From: Charles Cox []
Sent: Thursday, November 17, 2011 6:48 AM
To: Charles Cox


November 17th, 2011 | Author: Matthew D. Weidner, Esq.

This really is extraordinary. An Attorney General brings a HUGE indictment against two individuals…but here’s why it is so earth-shattering… carefully the crimes that are alleged….then understand that these same acts were probably performed all across this country hundreds of thousands of times.

The conundrum created by an announcement such as this is once it’s done once by one Attorney General, what are all the other Attorney’s General and enforcement agencies to do? Shall they just ignore what their counterpart is alleging? Are they able to just sit on the sidelines and ignore the serious allegations of systemic violations knowing full well that it was/is happening in their states as well?

And what about states like North Carolina and Massachusetts where elected public officials like Jeff Thigpen and John O’Brien have been screaming bloody hell for years, demanding that something be done?

The implications here are mind-blowing…read the indictment carefully and just extrapolate out, all across the country……


How do you explain righteous indignation…

From: Charles Cox []
Sent: Thursday, November 17, 2011 7:16 AM
To: Charles Cox
Subject: How do you explain righteous indignation…

If you look up the term “Indignant” in the dictionary, you might find this video:

Charles Wayne Cox – Oregon State Director for the National Homeowners Cooperative
Email: mailto:Charles
Websites:;; and
P.O. Box 3065
Central Point, OR 97502
(541) 727-2240 direct
(541) 610-1931 eFax

MERScurseProtect America’s Dream



Paralegal; CA Licensed Real Estate Broker; Certified Forensic Loan Analyst. Litigation Support; Mortgage and Real Estate Expert Witness Services.


From: Charles Cox []
Sent: Thursday, November 17, 2011 10:14 AM
To: Charles Cox


Posted on November 17, 2011 by Neil Garfield

EDITOR’S NOTE: The race is on — who is going to be the first attorney general to bring the major banks to their knees begging for amnesty instead of demanding it because they are too big to fail? Any politician with future ambitions had better not be cozy with Banks or even favor leniency. If there is a bailout, it had better be to John Q Public.

California attorney general’s office subpoenas Fannie, Freddie

Information is sought on the mortgage giants’ roles as landlords who own thousands of foreclosed properties in California. Also sought are details of their mortgage-servicing and home-repossession practices, a source says.

Clouds on Title



ALTA Counsel Discusses Recourse for Homeowners in Foreclosure Scandal


Many homeowners who lost their homes over the past few years are wondering what the robo-signing scandal means for them. Steve Gottheim, ALTA’s Legislative Counsel, tells a reporter at NBC News that homeowners who purchased a house at a foreclosure sale should have obtained an Owner’s Title Insurance Policy.


The statements by Steve Gottheim, ALTA’s Legislative Counsel, are not doubt the last thing the four surviving major commercial members of the title insurance industry wanted publicly stated by a major player in that industry. In prior correspondence with the group and others we have expressed the potential affect and concerns the ongoing mortgage fraud foreclosure crisis has had upon the title insurance industry. The issue first appeared in a DIRT discussion relating to “insuring title to foreclosed properties in the face of litigation” back in mid-May of this year. It confirms what we had previously then stated. To which Ms. Charney replied (i) “the knowledge of the defects are open, notorious and obvious to all, the defect may be fatally defective . . . so egregious as to render the title serving as the underlying security for the debt to be defective and pass no insurable interest whatsoever along to the alleged assignee.” Professor Whitman then chimed in stating: “Bill – actually, I think you are right on target. There have been many questionable foreclosures, and in some cases the defects are doubtless sufficient to make the foreclosure either void or voidable (the latter meaning that the sale won’t be set aside if the property has passed to a BFP). Moreover, since the defects in many cases are a matter of public record, it could be very difficult for a buyer to satisfy a court that he is a BFP. To which he added (iii) “In time many of these sales are going to come back and bite the title insurers who insured them. Obviously, the industry would rather not call attention to this likelihood, but it is there all the same.” And again, (iv) “if the defect is curable, it is important the curing documents be placed of record for the benefit of future title examiners”. To which both I and the recent Report of the ACS concluded (v) “the burden of proving the right to foreclose must be placed on the foreclosing party; i.e., if a remote assignee or securitization trustee claims the right to foreclose, it must prove the legal basis for that claim. It cannot be the case that a remote party can claim the right to foreclose, with the property owner then forced to disprove its entitlement to that action.


The statements of the ALTA Legislative Counsel only confirm our prior warning. They

may be found at Questions for Homeowners in Foreclosure Scandal, NBC News | November 17, 2011.


From: Charles Cox []
Sent: Tuesday, November 15, 2011 5:44 AM
To: Charles Cox
Subject: NO AUTHORITY FOR MERS SIGNERS – SUPPORT FOR STATEMENT – hultman/lps depo materials

April got quite a few emails asking for the authority for the above statement. The below email and attachments are the response to all these emails.

Please read the depos and the applicable mers membership rules.

Neither MERS nor merscorp ever performed the corporate actions or gave authority or documentation needed to give the mers VP Bill Hultman the corp authority to appoint a single signer; the signers were required to be officers of the mers member corp; the signer had to be appointed in their official capacity, not personal, and mers’ signers would only have the power that the principal had (as mers is only a nominee), the principal being the originating lender who was contractually bound to execute the docs required by the psa only and exclusively within the start up term of the trust. And there is no capacity or authority for any of the signer activity that we are dealing with, surrogate or otherwise, after the closing date of each REMIC trust.

4-7-10 William Hultman Deposition.pdf
09-25-2009 Deposition of RK Arnold, CEO, MERS.doc
corporate rep depo rk arnold 9 25 2006.doc
MERS dep trans of William Hultman.- 11_11_09.pdf


see also 1/3 of all homes underwater — at a minimum

EDITORIAL NOTE: With a few places as an exception, home prices, once predicted as bottoming out LAST YEAR, continue to drop and are expected to take another plunge of 15%-20%. Experts who once predicted the bottom in 2010 are now saying it will be sometime in 2012. Here is what I say: home prices will continue to drop and could even go to near zero because of the rise of title problems caused by exotic Wall Street scenarios in which the title to most properties were affected. As for when they hit “bottom” it will be when the foreclosure nightmare is over. Even the optimistic experts concede that is, on average, another 8 years, with New York topping the list at 57 years.

The reason is simple arithmetic. Start with joblessness, lack of capital for new businesses, and add a healthy amount of fraudulent foreclosures pushing the market downward while the Banks report higher and higher profits through accounting tricks that would baffle the most avid puzzle fanatic. Basic fact pattern: as the prices go lower people “default” on mortgages that have probably long since been paid off. The further prices go down the more people are underwater — either worse than before or for the first time. I spoke with one homeowner who bought his home for $550,000 and only took out a mortgage for $175,000. “Now I see and feel the problem,” he said. “I never thought that I could ever be underwater because the mortgage was so low compared with the purchase price. Yet here I am, the house listed for $175,000, the broker telling me I’ll be lucky to get $140,000 and after all selling expenses I might see $125,000 or less.”

He’ll need to come to the table with money in order to sell and he knows that whoever he pays is probably not entitled to the money. he just wants out of a neighborhood that is a virtual ghost town. What was once a thriving community is  bereft of the family, secure atmosphere on the brochures.

Home Prices Drop in Nearly 3/4 of U.S. Cities

home valuesWASHINGTON — Home prices dropped in nearly three quarters of U.S. cities over the summer, dragged down by a decline in buyer interest and a high number of foreclosures.

The National Association of Realtors said Wednesday that the median price for previously occupied homes fell in the July-September quarter in 111 out of 150 metropolitan areas tracked by the group. Prices are compared with the same quarter from the previous year.

Fourteen cities had double-digit declines. The median price in Mobile, Ala. dropped 17.7 percent, the largest of all declines. Phoenix and Allentown, Pa., Atlanta, Las Vegas and Miami also experienced steep declines.

Eight cities saw double-digit price increases. The largest was in Grand Rapids, Mich., where the median price rose 23.7 percent. South Bend, Ind., Palm Bay, Fla., and Youngstown, Ohio, also saw large price increases.

The national median home price was $169,500 in the third quarter, down 4.7 percent from the same period last year.

Most analysts say that prices will sink further because unemployment remains high and millions of foreclosures are expected to come onto the market over the next few years.

Sales of previously occupied homes dropped to a seasonally adjusted annual rate of 4.88 million in the third quarter, slightly ahead of last year’s pace for the same period. Sales were lower than usual for the summer season last year because a federal tax credit inspired more buying in the spring.

This year, sales are on pace to finish behind last year’s total, which was the lowest in 13 years.

Sales are low even though the average rate on the 30-year fixed mortgages is hovering near 4 percent.

Regionally, the median home price in the Midwest fell 2.2 percent to $142,300 in the quarter from the year before, even as sales activity jumped 25 percent. In the South, the median price also slid 2.2 percent to $153,200 and home sales increased 15.5 percent.

The Northeast’s median home price dipped 6.5 percent during the period to $236,700, as sales rose from the previous year by 11.6 percent. The median home price in the West dropped by 9 percent to $205,700 in the third quarter from a year ago. Sales there increased 16.7 percent.

Also see:
Where Are the Real Home Bargains? Not Where You Think!
Mortgage Rates Stay Low, But Homebuyers Aren’t Budging

Top 10 Cities For Military Retirement
Gallery: 10 Cheapest Places To Retire

Fighting Foreclosure in California

Using the Courts to Fight a California or Other Non-Judicial Foreclosure – 3-Stage Analysis – including a Homeowner Action to “Foreclose” on the Bank’s Mortgage Security Interest – rev.



California real property foreclosures are totally different from foreclosures in New York and many other states. The reason is that more than 99% of the California foreclosures take place without a court action, in a proceeding called a “non-judicial foreclosure”. Twenty-one states do not have a non-judicial foreclosure. [These states are CT, DE, FL, IL, IN, KS, KY, LA, ME, MD, MA, NE, NJ, NM, NY, ND, OH, PA, SC, UT, VT. – Source:] In California, the lending institution can go through a non-judicial foreclosure in about 4 months from the date of the filing and recording of a “Notice of Default”, ending in a sale of the property without any court getting involved. The California homeowner can stop the sale by making full payment of all alleged arrears no later than 5 days prior to the scheduled sale. Unlike a judicial foreclosure, the homeowner will have no right to redeem the property after the sale (“equity of redemption”, usually a one-year period after judicial foreclosure and sale). For a visual presentation of the timeline for California and other state non-judicial foreclosures, go to Visual Timeline for California Non-Judicial Foreclosures.

A 50-state analysis of judicial and non-judicial foreclosure procedures is available at 50-State Analysis of Judicial and Non-Judicial Foreclosure Procedures.]

The problem I am going to analyze and discuss is under what circumstances can a homeowner/mortgagor go into court to obtain some type of judicial relief for wrongful or illegal conduct by the lender or others relating to the property and mortgage. My discussion applies as to all states in which non-judicial foreclosures are permitted.

There are three distinct stages that need to be separately discussed. These stages are the borrower’s current situation. The three stages are:


  • Homeowner is not in any mortgage arrears [declaratory judgment action]
  • Homeowner is behind in mortgage payments – at least 5 days before auction [injunction action, which could even be called an action by a homeowner to “foreclose” upon or eliminate the lending institution’s mortgage security interest]
  • Property was sold at auction [wrongful foreclosure action]


I. Homeowner Is Not in any Mortgage Arrears [Declaratory Judgment Action]

As long as a homeowner keeps making the mortgage payments, and cures any occasional short-term default, the homeowner is in a position to commence an action in federal or state court for various types of relief relating to the mortgage and the obligations thereunder. One typical claim is a declaratory judgment action to declare that the mortgage and note are invalid or that the terms are not properly set forth. There are various other types of claims, as well. The filing of such an action would not precipitate a non-judicial foreclosure. Compare this to a regular foreclosure, in which the homeowner stops paying on the mortgage, gets sued in a foreclosure action, and then is able in the lawsuit to raise the issues (as “defenses”) which the California homeowner would raise as “claims” or “causes of action” in the lawsuit being discussed for this first stage.

II. Homeowner Is Behind in Mortgage Payments – at Least 5 Days before Auction [Injunction Action seeking TRO and Preliminary Injunction, which you might say is a homeowner’s own “foreclosure proceeding against the bank and its mortgage interest”]

This is the most difficult of the three stages for making use of the courts to oppose foreclosure. The reasons are: foreclosure and sale is apt to take place too quickly; the cost of seeking extraordinary (injunctive) relief is higher because of the litigation papers and hearing that have to be done in a very short period of time to obtain fast TRO and preliminary injunctive relief to stop the threatened sale; the cost of this expensive type of injunctive litigation is probably much higher for many homeowners than just keeping up the mortgage payments; and, finally, you would have to show a greater probability of success on the merits of the action than you would need to file a lawsuit as in Stage 1, so that the homeowner’s chances of prevailing (and getting the requested injunction) are low and the costs and risks are high.

Nevertheless, when the facts are in the homeowner’s favor, the homeowner should consider bringing his plight to the attention of the court, to obtain relief from oppressive lending procedures. The problem with most borrower-homeowners is that they do not have any idea what valid bases they may have to seek this kind of relief. What anyone should do in this case is talk with a competent lawyer as soon as possible, to prevent any further delay from causing you to lose an opportunity to fight back. You need to weigh the cost of commencing a court proceeding (which could be $5,000 more or less to commence) against the loss of the home through non-judicial foreclosure.


III. Property Was Sold at Auction [Wrongful Foreclosure Action]

If the property has already been sold, you still have the right to pursue your claims, but in the context of a “wrongful foreclosure” lawsuit, which has various legal underpinnings including tort, breach of contract and statute. This type of suit could not precipitate any foreclosure and sale of the property because the foreclosure and sale have already taken place. Your remedy would probably be monetary damages, which you would have to prove. You should commence the action as soon as possible after the wrongful foreclosure and sale, and particularly within a period of less than one year from the sale. The reason is that some of your claims could be barred by a short, 1-year statute of limitations.

If you would like to talk about any possible claims relating to your mortgage transaction, please give me a call. There are various federal and state statutes and court decisions to consider, with some claims being substantially better than others. I am available to draft a complaint in any of the 3 stages for review by your local attorney, and to be counsel on a California or other-state action “pro hac vice” (i.e., for the one case) when associating with a local lawyer.

What is the Independent Foreclosure Review?

Q1. What is the Independent Foreclosure Review?

As part of a consent order with federal bank regulators, the Office of the Comptroller of the Currency (OCC), the Office of Thrift Supervision (OTS) (independent bureaus of the U.S. Department of the Treasury), or the Board of Governors of the Federal Reserve System, fourteen mortgage servicers and their affiliates are identifying customers who were part of a foreclosure action on their primary residence during the period of January 1, 2009 to December 31, 2010.

The Independent Foreclosure Review is providing homeowners the opportunity to request an independent review of their foreclosure process. If the review finds that financial injury occurred as a result of errors, misrepresentations or other deficiencies in the servicer’s foreclosure process, the customer may receive compensation or other remedy.
Q2. What is a foreclosure action? What foreclosure actions are part of the Independent Foreclosure Review?

Foreclosure actions include any of the following occurrences on a primary residence between the dates of January 1, 2009 and December 31, 2010:

* The property was sold due to a foreclosure judgment.
* The mortgage loan was referred into the foreclosure process but was removed from the process because payments were brought up-to-date or the borrower entered a payment plan or modification program.
* The mortgage loan was referred into the foreclosure process, but the home was sold or the borrower participated in a short sale or chose a deed-in-lieu or other program to avoid foreclosure.
* The mortgage loan was referred into the foreclosure process and remains delinquent but the foreclosure sale has not yet taken place.

Q3. How do I know if I am eligible for the Independent Foreclosure Review?

Your loan must first meet the following initial eligibility criteria:

* Your mortgage loan was serviced by one of the participating mortgage servicers in Question 4.
* Your mortgage loan was active in the foreclosure process between January 1, 2009 and December 31, 2010.
* The property was your primary residence.

If your mortgage loan does not meet the initial eligibility criteria outlined above, you can still have your mortgage concerns considered by calling or writing your servicer directly.
Q4. Who are the participating servicers? What mortgage servicers and their affiliates are part of the Independent Foreclosure Review process?

The list of participating servicers includes:

* America’s Servicing Co.
* Aurora Loan Services
* Bank of America
* Beneficial
* Chase
* Citibank
* CitiFinancial
* CitiMortgage
* Countrywide
* EverBank/EverHome Mortgage Company
* GMAC Mortgage
* IndyMac Mortgage Services
* MetLife Bank
* National City Mortgage
* PNC Mortgage
* Sovereign Bank
* SunTrust Mortgage
* U.S. Bank
* Wachovia Mortgage
* Washington Mutual (WaMu)
* Wells Fargo Bank, N.A.

Q5. What are some examples of financial injury due to errors, misrepresentations or other deficiencies in the foreclosure process?

Listed below are examples of situations that may have led to financial injury. This list does not include all situations.

* The mortgage balance amount at the time of the foreclosure action was more than you actually owed.
* You were doing everything the modification agreement required, but the foreclosure sale still happened.
* The foreclosure action occurred while you were protected by bankruptcy.
* You requested assistance/modification, submitted complete documents on time, and were waiting for a decision when the foreclosure sale occurred.
* Fees charged or mortgage payments were inaccurately calculated, processed, or applied.
* The foreclosure action occurred on a mortgage that was obtained before active duty military service began and while on active duty, or within 9 months after the active duty ended and the servicemember did not waive his/her rights under the Servicemembers Civil Relief Act.

Q6. How does my mortgage loan get reviewed as part of the Independent Foreclosure Review?

Homeowners meeting the initial eligibility criteria will be mailed notification letters with an enclosed Request for Review Form before the end of 2011.

If you believe that you may have been financially injured, you must submit a Request for Review Form postmarked no later than April 30, 2012. Forms postmarked after this date will not be eligible for the Independent Foreclosure Review.

If you have more than one mortgage account that meets the initial eligibility criteria for an independent review, you will receive a separate letter for each. You will need to submit a separate Request for Review Form for each account. It is important that you complete the form to the best of your ability. All information you provide may be useful.
Q7. How can I submit the Request for Review Form?

Homeowners meeting the initial eligibility criteria will be mailed notification letters with an enclosed Request for Review Form before the end of 2011. If you received the notification letter, you can send in your Request for Review Form in the prepaid envelope provided, postmarked no later than April 30, 2012.

If your loan is part of the initial eligible population and you need a new form by mail, have questions, or need help completing the form you have received in the mail, call 1-888-952-9105, Monday through Friday, 8 a.m.–10 p.m. ET or Saturday, 8 a.m.–5 p.m. ET.
Q8. Who can submit or sign the Request for Review Form?

Either the borrower or a co-borrower of the mortgage loan can submit and sign the form. The borrower signing the Request for Review Form should be authorized by all borrowers to proceed with the request for review. In the event of a finding of financial injury, any possible compensation or remedy will take into consideration all borrowers listed on the loan, either directly or to their trusts or estates.
Q9. What if one of the borrowers has died or is injured or debilitated?

Any borrower, co-borrower or attorney-in-fact can sign the form. In the event of a finding of financial injury, any possible compensation or other remedy will take into account all borrowers listed on the mortgage loan either directly or to their trusts or estates.
Q10. Do I need an attorney to request or submit the Request for Review Form?

No. However, if your mortgage loan meets the initial eligibility criteria and you are currently represented by an attorney with respect to a foreclosure or bankruptcy case regarding your mortgage; please refer to your attorney.

The Independent Foreclosure Review is free. Beware of anyone who asks you to pay a fee in exchange for a service to complete the Request for Review Form.
Q11. If I have already submitted a complaint to my servicer, do I need to submit a separate Request for Review Form to participate in this process?

If your mortgage loan meets the initial eligibility criteria, you should submit a Request for Review Form to ensure your foreclosure action is included in the Independent Foreclosure Review process.
Q12. What happens during the review process?

You will be sent an acknowledgement letter within one week after your Request for Review Form is received by the independent review administrator. Your request will be reviewed for inclusion in the Independent Foreclosure Review. If your request meets the eligibility requirements, it will be reviewed by an independent consultant.

Your servicer will provide relevant documents along with any findings and recommendations related to your request for review to the independent consultant for review. Your servicer may be asked to clarify or confirm facts and disclose reasons for events that occurred related to the foreclosure process. You could be asked to provide additional information or documentation. Because the review process will be a thorough and complete examination of many details and documents, the review could take several months.

The Independent Foreclosure Review will determine whether financial injury has occurred as a result of errors, misrepresentations or other deficiencies in the foreclosure process. You will receive a letter with the findings of the review and information about possible compensation or other remedy.
Q13. How do I know who my servicer is? How do I find them?

The company you sent your monthly mortgage payments to is your mortgage servicer. It is not necessarily the company whose name is on the actual foreclosure documents (although in most cases, it is). If you don’t remember the name of the servicer for your foreclosed property, we suggest you review cancelled checks, bank statements, online statements or other records for this information.

If you are still unsure of who your mortgage servicer is or do not see their name listed in Q4, please call 1-888-952-9105, Monday through Friday, 8 a.m.–10 p.m. ET or Saturday, 8 a.m.–5 p.m. ET.
Q14. If I request an Independent Foreclosure Review, is there a cost or will there be a negative impact to my credit?

The Independent Foreclosure Review is a free program. Beware of anyone who asks you to pay a fee in exchange for a service to complete the Request for Review Form.

The review will not have an impact on your credit report or any other options you may pursue related to your foreclosure.
Q15. Where can I call if I need help completing the form or have any questions about the review process?

Call 1-888-952-9105 Monday through Friday, 8 a.m.–10 p.m. ET or Saturday, 8 a.m.–5 p.m. ET. If you have already submitted a Request for Review Form, please have your Reference Number available to expedite your call.
Q16. How are military servicemembers affected by the Independent Foreclosure Review?

In the review, servicers are required to include all loans covered by the Servicemembers Civil Relief Act that meet the qualifying criteria. However, servicemembers or co-borrowers may also request a review through this process. Financial injury may have occurred if the foreclosure action occurred on a mortgage that was obtained before active duty military service began and while on active duty, or within 9 months after the active duty ended.
Q17. How am I affected if I submit a Request for Review Form while in active bankruptcy?

If you submit a Request for Review Form and a review is conducted of your foreclosure process, this will have no impact on your bankruptcy. The letter being sent to you about the Independent Foreclosure Review is not an attempt to collect a debt. If you are in bankruptcy, please refer this letter to your attorney.
Q18. I’m still working with my servicer to prevent a foreclosure sale. Will I still be able to work with them?

Yes, continue to work with your servicer. Participating in the review will not impact any effort to prevent a foreclosure sale. The review is not intended to replace current active efforts with your servicer.
Q19. How long will the review process take and when can I expect a response?

You will be sent an acknowledgement letter within one week after your Request for Review Form is received by the independent review administrator. Because the review process will examine many details and documents, the review could take several months. The Independent Foreclosure Review will determine if financial injury occurred as a result of the servicer’s errors, misrepresentations or other deficiencies in the foreclosure process. You will receive a letter with the findings of the review and information about possible compensation or other remedy. Not every finding will result in compensation or other remedy.
Q20. What happens if the review finds that I was financially injured as a result of errors, misrepresentations or other deficiencies in the foreclosure process?

You will receive a letter with the findings of the review and information about possible compensation or other remedy. The compensation or other remedy you may receive will be determined by your specific situation. Not every finding will result in compensation or other remedy.
Q21. What happens if the review finds that I was not financially injured as a result of errors, misrepresentations or other deficiencies in the foreclosure process?

You will receive a letter with the findings of the review. Not every finding will result in compensation or other remedy.
Q22. What if I disagree with the eligibility requirements or the result of the Independent Foreclosure Review?

The decision of the review is considered final and there is no further recourse within the Independent Foreclosure Review process. The Independent Foreclosure Review will not have an impact on any other options you may pursue related to the foreclosure process of your mortgage loan.
Q23. Does filing a Request for Review Form prevent me from filing other litigation or action against the servicer?

No. Submitting a request for an Independent Foreclosure Review will not preclude you from any other options you may pursue related to your foreclosure

banksters defense

From: Charles Cox []
Sent: Thursday, November 10, 2011 6:18 AM
To: Charles Cox
Subject: banksters defense

One of the older play books was sent to me this morning so I thought I’d send this stuff out in case some of you don’t have this info and might find it useful.


Charles Wayne Cox – Oregon State Director for the National Homeowners Cooperative
Email: mailto:Charles
Websites:;; and
P.O. Box 3065
Central Point, OR 97502
(541) 727-2240 direct
(541) 610-1931 eFax

MERScurseProtect America’s Dream



Paralegal; CA Licensed Real Estate Broker; Certified Forensic Loan Analyst. Litigation Support; Mortgage and Real Estate Expert Witness Services.


From LivingLies iterogatories for any securitized loan

From: Charles Cox []
Sent: Thursday, November 10, 2011 6:02 AM
To: Charles Cox
Subject: From LivingLies

  1. What is the name of the pool
  2. What is the EIN of the pool
  3. Who actually acts in the capacity of Trustee in that they report and/or distribute funds
  4. What IRS Form is used to send an end of year tax statement to investors in the pool?
  5. How many parties are identified as trustees or fiduciaries in the formation of the pool.
  6. Same question but this time “in the operation of the pool.”
  7. Does the pool still exist
  8. Does the subject loan exist in the pool? How do you know that?
  9. Is the person answering these interrogatories personally familiar with the facts arising from the origination of the loan?
  10. Is the person answering these interrogatories personally familiar with the facts rising from the origination of the pool?
  11. Is the person answering these interrogatories personally familiar with the facts arising from the operation of the pool?
  12. When was the pool created? As what type of legal entity?
  13. when is the first time anything was filed with the IRS requesting or declaring REMIC status?
  14. What was the date cut-off date applicable under the REMIC statute?
  15. What was the cutoff date under the PSA?
  16. Was the subject loan transferred into the pool before or after the cut-off date?
  17. If after, please describe the circumstances?
  18. Under what laws was the pool created
  19. What kind of entity is the pool?
  20. Is the Pool filing as qualified for REMIC status?
  21. When did it file for REMIC status
  22. What form was used to report to the IRS for the tax years 2006-present
  23. Is FANNIE an active Trustee? What are the duties of FANNIE and did it perform any of those duties.
  24. Identify the person at Fannie that is in charge of performing trust duties with respect to this pool, including name, status, address, telephone and email address. If the person has not been the same since inception of the pool, identify each person that was employed by FANNIE acting in support of the duties of FANNIE as a Trustee or fiduciary.
  25. Who was the underwriter of the Bonds that were offered to investors?
  26. IS FANNIE an owner in the pool
  27. Is FANNIE an owner of the pool
  28. Is FANNIE the owner of the subject loan
  29. IS the pool the owner of the subject loan
  30. Was ownership of the pool ever changed?
  31. Was ownership of the loans in the pool ever changed
  32. Was the ownership of the subject loan ever changed
  33. Identify all documents of transfer by which any party other than the originator claims to have acquired an interest in the subject loans with sufficient specify such that it would satisfy the requirements for a request to produce.
  34. Where are those documents
  35. Who are the people who actually have custody or control.
  36. Through what kind of account are payments, proceeds, receipts and distributions processed? Who is the owner of said accounts? What persons are signatories on said accounts? By whom are those persons employed? Do such employees operate according to a contract or manual? Where is that manual. Do they operate according to their employment contract? Who are the parties to said contract? Where is a copy of the employment contract? To whom do they report in FANNIE? Do they report to anyone else?
  37. What statements of distributions and receipts does FANNIE prepare?
  38. What statements of receipts or distributions does FANNIE send?
  39. To whom are statements sent?
  40. what is the EIN of Fannie? Does it have more than one EIN? Does it maintain multiple EIN for trusts for which it is the trustee? Does it have subsidiaries or affiliates?
  41. Identify the person or persons having possession of facts and reports showing all receipts and disbursements relative to the pool as reported to investors.
  42. Did the pool receive any benefits or proceeds from insurance or bailout, TARP, credit enhancements? When? How much?
  43. Has any inquiry been made as to whether third parties received such benefits from TARP, bailout, insurance or credit enhancements where such receipts were related to eh status or claimed contents of the pool?
  44. If such proceeds were received by third parties relating to assets of the pool or the status of the pool, explain how those proceeds were reported to investors and how they are allocated as to each investor.
  45. If such an allocation as made to the pool, and to the investors, explain how those proceeds were allocated toward the obligations of borrowers in loans contained in the pool
  46. If no such allocations were made, explain the legal reason why those proceeds were not used as the basis for allocations to the pool, the investors and the borrowers.
  47. If no inquiry was made, explain why no such inquiry was made, who made the decision and whether there are any documents that can be identified with specificity that reflect the decision to refrain from such inquiry.
  48. Including all receipts and disbursements received by or on behalf of the pool, what is the balance due of the subject loan that is due to the investors and how did you compute it? Who did the computation? Where is this person and what is his/her address telephone number etc.
  49. Is the balance due to investors different than the balance claimed as due from the borrower? IF yes, explain why
  50. Has any settlement occurred between the pool, the trustees or servicers of the pool and the investors? When? What were the terms? What document reflects such settlement

Foreclosure Starts Rise as Servicers Process Backlog of Delinquent Loans – Decline in Home Prices – 11 More Commercial Banks Pushed to Insolvency

From: Charles Cox []
Sent: Tuesday, November 08, 2011 7:00 AM
To: Charles Cox
Subject: Foreclosure Starts Rise as Servicers Process Backlog of Delinquent Loans – Decline in Home Prices – 11 More Commercial Banks Pushed to Insolvency

Foreclosure Starts Rise as Servicers Process Backlog of Delinquent Loans

By: Krista Franks 11/07/2011

Foreclosure starts among private-label residential mortgage-backed securities (RMBS) have been rising toward historic averages over the past six months, which will lead to an influx of distressed properties bringing downward pressure to the housing market, according to recent RMBS Performance Metrics from Fitch Ratings.

According to Fitch, foreclosure start rates for severely delinquent RMBS loans have stayed above 10 percent since September — a rate they have not reached since November 2009 — and have been working their way toward their 14 percent average between 2000 and 2010.

“Rising foreclosure start rates are likely a sign that servicers are playing catch-up on actions that have been delayed over the past year,” states Diane Pendley, managing director of Fitch Ratings.

In fact, the rise in foreclosure starts has occurred most heavily among severely delinquent loans. Foreclosure starts among loans that have been delinquent for six months or more have almost doubled in the past five months.

In contrast, foreclosure starts among loans three months to six months delinquent have increased by 25 percent over the past five months.

The foreclosure process is averaging about eight months in non-judicial states and 15 months in judicial states, according to Fitch.

Despite foreclosure starts being on the rise, foreclosure completions in judicial states hover near their historic lows. Fitch attributes this to “servicers’ continued loss mitigation efforts, a backlog in court foreclosure filings, and weak demand in the housing market.”

About a year after deficiencies in the foreclosure process were brought to light, Pendley says, “Mortgage servicers now generally feel they have implemented the corrective actions that they determined were needed.”

“With corrective actions now in place, servicers now need to process a significant backlog of problem loans as well as implement other process changes in parallel,” she continues.

The effects of rising foreclosure starts as servicers work their way through the backlog of distressed loans may not be evident for more than a year, according to Fitch.

©2011 DS News. All Rights Reserved.

Wall Street Journal- Foreclosures Fall When Banks Forced to Tell The Truth – (IMAGINE THAT!)

From: Charles Cox []
Sent: Tuesday, November 08, 2011 7:11 AM
To: Charles Cox
Subject: Wall Street Journal- Foreclosures Fall When Banks Forced to Tell The Truth – (IMAGINE THAT!)

Wall Street Journal- Foreclosures Fall When Banks Forced to Tell The Truth

November 8th, 2011 | Author: Matthew D. Weidner, Esq.

Florida passed a rule that required banks to verify the accuracy and truthiness of the claims they were making in foreclosure cases. The banksters and fraudclosure mills largely ignored the rule, and continue to play games with it even today. But even if anyone had bothered to force compliance with the rule (GASP!) I’m not aware of a single case of any punishment for lying in pleadings filed with the court.

What might happen if someone tried to enforce truthiness in the midst of Florida Fraudclosure? Well, we should look to Nevada and see that foreclosures ground to a halt when that state started (GASP!) requiring the banks to tell the truth.

Now here in FLORIDA, THE MOST CORRUPT STATE IN THE NATION, we could never stand for such a bold initiative… fact, Florida is heading in exactly the opposite direction with Florida’s (un)Fair Foreclosure Act….well, the legislators and “leadership” can wallow in their beds made of lies and fraud….the reality is the whole market is a stinking mess, like driving a school bus full of children over a rickety bridge made of sticks. In the end, it’s all coming crashing down. Go ahead foreclosure mills, get all the foreclosure judgments you want….then you just try to sell all those stinking foreclosed properties…..I DARE YOU!…..

But back to the story….just what happens when the banksters are forced to tell the truth??????

Foreclosure filings in Nevada plunged in October during the first month of a new state law stiffening foreclosure-processing requirements.

Slightly more than 600 default notices were filed against homeowners through Oct. 25 in the state’s two most-populous counties, Las Vegas’s Clark County and Reno’s Washoe County. That was down from 5,360 in September, or an 88% drop, according to data tracked by, a real-estate website that tracks such filings. Default notices represent the first step in processing foreclosures.


Lasalle v. Glarum- Team Ice- The Insider’s Briefs Submitted to The Appellate Court! Tom Ice in Florida doing yeoman’s work!

From: Charles Cox []
Sent: Tuesday, September 20, 2011 9:59 AM
To: Charles Cox
Subject: Lasalle v. Glarum- Team Ice- The Insider’s Briefs Submitted to The Appellate Court! Tom Ice in Florida doing yeoman’s work!

Lasalle v. Glarum- Team Ice- The Insider’s Briefs Submitted to The Appellate Court!

September 19th, 2011 | Author: Matthew D. Weidner, Esq.

There is a very real and a very profound battle raging across this country. Actually there are many wars and they are not just limited to this country. All around the world in fact, real people are rising up against the overreaching and the abuses of the banks and the power systems that have destroyed our economy, enslaved people and laid waste to our naive notions of due process and justice.

One of the battlefronts in this country are foreclosure courtrooms where dedicated advocates stand up for consumers and fight against the banks and all the power and influence they bring to bear. Every battle is an epic struggle not unlike David taking on several Goliaths all at once. These advocates fight the banks with their armies of lawyers (paid at $600/hour with taxpayer funded bailout money.) and they often fight an entire system predisposed to strike anyone who dares to challenge the awesome power bent on crushing any resistance that dares to stand in the way.

Without a doubt some of the true superheros in this battle are the warriors at Ice Legal in Palm Beach, Florida. The national news has repeated sung their praises, but I daresay not many have actually read the work that lies at the heart of the battle. But today, you can have an insider’s look.

Now, the Glarum case should not have been all that extraordinary. As a good local judge reminded me recently, “That’s always been the law in this state!” But the banks have responded as if the Glarum opinion will mean THE END OF THE WORLD AS WE KNOW IT! The banks have already begun an all out, full stops campaign to attack this decision…and I’m guessing they will bring every single power they can to bear in an effort to attack this plain and clear restatement of the existing law.

I encourage you to read each brief carefully, but before you get there, have a read of a few of my favorite highlights:

In short, appellants argue that it may look like a duck, and quack like a duck, but the court would need a zoologist to testify that it is in fact a duck before it could make that finding.

To adapt the BANK‟s own metaphor: the bare, unsworn statement of its attorney that something looks like a duck and quacks like
a duck is not evidence of a duck.

In Florida, all averments to fraud must be pled with particularity. Rule 1.120(b), Fla.R.Civ.P. (2009). In this case the Appellants amended their answer twice (R.VoI.Three pp.566-567) and never alleged fraud as an affirmative defense. See Supp.R.pp.553-555. They have, however, thrown it around the court room quite a bit.

Section 90.902(8), Florida Statutes (2009), provides that “[ c ]ommercial papers and signatures thereon and documents relating to them, to the extent provided in the Uniform Commercial Code” are self-authenticating. While the Assignment is not commercial paper it is related to the Note and is self authenticating pursuant to 90.902(8). HUH?

The BANK takes the sanctionably irresponsible position that the trial court‟s “factual determinations” in entering summary judgment are to be reviewed for “an abuse of discretion.”1 It is elementary that, if the trial court made factual determinations, it erred in entering summary judgment. Coquina Ridge Properties v. E. W. Co., 255 So. 2d 279, 280 (Fla. 4th DCA 1971) (Summary judgment
reversed because “[t]he trial court may not try or determine factual issues in [summary judgment] proceedings; … substitute itself for the trier of fact and determine controverted issues of fact.”) Not surprisingly, all the cases cited by the BANK for this standard of review
having nothing to do with summary judgment.

Worse than merely misstating the standard of review, the BANK actually employed this incorrect standard throughout its brief. One glaring instance is the BANK‟s contention that summary judgment should be affirmed because “there was not enough evidence to allow Judge Sasser to rule in [“the OWNERS] favor at the summary judgment hearing.” Another example is its statement that “[i]t cannot seriously be argued that what the Appellants have identified as evidence…was enough to allow Judge Sasser to make a finding in their favor.” While the BANK‟s stunningly frivolous assertion regarding the summary judgment standard of review would never have misled this Court, it is nevertheless emphasized here because it is indicative of the BANK‟s lack of concern for accuracy and candor when addressing both this Court and the court below.

Correction to the BANK’s Statement of Facts: The BANK tells this Court that the promissory note, mortgage and assignment were “all…duly recorded in the public records.” There is nothing in the record to suggest that the promissory note was ever recorded.

As often occurs when a proffered assignment of mortgage encounters evidentiary snags, the BANK now claims that it “does not need the Assignment to prevail in this case.”

Having failed to adduce evidence to support its allegations of standing, the BANK cannot now change to a different allegation of
standing during the appeal.

The BANK ridicules the OWNERS insistence that the original mortgage be authenticated as “bizarre” because “if it is not the document they executed, they should feel free to say so.” Quoting the trial court judge during an evidentiary hearing, the BANK suggests that the OWNERS should know if the BANK‟s documents are authentic, simply by looking to see if its terms match the copy they received at closing.

Brief, answer, reply and opinion attached.

Craig Bell PropertyDetailPrintable.pdf

Follow up editor’s comments (Neil Garfield) on Dallas v. MERS/BofA et al and an additional Texas MERS 14th Court of Appeals Case

From: Charles Cox []
Sent: Thursday, September 22, 2011 8:19 AM
To: Charles Cox
Subject: Follow up editor’s comments (Neil Garfield) on Dallas v. MERS/BofA et al and an additional Texas MERS 14th Court of Appeals Case

"So Dallas is suing MERSCORP et al, including big old Bank of America who is already on our death watch. And Dallas is going to win, meaning that county recorders across the country are going to make their claim for fees that are due, even if the transactions were fraudulent because they tried to use those transactions as a means to foreclose. And ultimately, the banks are going to cornered — not being able to foreclose because they did not pay their fees.

The banks were and are the deadbeats, but they had a lot of money and power which is now fast flowing away from them. Politicians have figured it out — run against the banks and you can’t go wrong. They’ll get more money and more votes from people and other interest groups running against the banks than doing their bidding. We might let organized crime thrive for a while, but we always take it down."




EDITOR’S NOTE: Real change, real reform, real improvement are going to come from good people doing the right thing instead of standing by and watching their neighbors get clobbered, hoping and wishing that it won’t happen to them. So now protests and rallies are being held and they are growing. Over 2,000 people on Wall Street camped out and their voices are getting louder. Spanish citizens are banding together and forming a wall of bodies that the local,"Sheriff" refuses to penetrate to evict the homeowner. Leaders are rising to the top — people like Dan earl, Martin Andelman, Darrel Blomberg and others are not just actively helping their neighbors and their friends and those who find them pleading for help, they are making a difference.

Politicians are noticing that it is a pretty good bet to run against the banks since nobody likes them anyway and there is a special enmity that the citizens feel toward the banks, who have been draining the lifeblood out of our economy for over 3 decades. This time the banks went far enough for the people, the government and investors to strike back — giving restitution to the victims of the banks feeding frenzy.

Those victims are taxpayers, government agencies whose fees were not paid, regulators whose fees were not paid and who did not receive reports that were essential to orderly commerce, failure to record transactions in real property allowing almost anyone to wake up in the morning deciding to steal a house by asserting they are the beneficiary, filing a substitution of trustee naming someone that is in league with them, and then proceeding with the notice of sale, the auction and submitting a "Credit bid" that is as fake as a three dollar bill.

One by one, local government is getting the message — the banks owe them and they have nothing to fear from the banks. It is an illusion and a myth that the government can call the shots as we let them — because we have long since withdrawn our consent to that. The budgets will be restored by government agencies tracking down the money that is due — not from new taxes — but normal fees and taxes required to perform the services that all of us need government to perform, like recording an interest in real property.

So Dallas has sued MERSCORP and some well-known shareholders seeking to recover its fees and restore its budget. Dallas has now made a statement that they will no longer underwrite the costs of the securitization scam and they want the money that the banks did not pay when they transferred interests in real estate repeatedly without ever recording the interest in the public records of the county in which the property was located.

They have a good case too. Because the trick the banks tried was to use some end user, the final nominee of the securitization process who would claim that they were the holder and owner of the loan so that a foreclosure could occur and another house could be stolen by a party who neither the loaned the money nor purchased the obligation. But now the banks have stepped on a rake because in order to give the "final nominee" the right to foreclose they must claim multiple transfers of the loan, none of which were reported on record. They want to use the county’s facilities to foreclose, but they don’t want to pay for the intervening transactions that they say gives rights to the the party foreclosing on behalf of the his hashed scheme.

So Dallas is suing MERSCORP et al, including big old Bank of America who is already on our death watch. And Dallas is going to win ,meaning that county recorders across the country are going to make their claim for fees that are due, even if the transactions were fraudulent because they tried to use those transactions as a means to foreclose. And ultimately, the banks are going to be cornered — not being able to foreclose because they did not pay their fees. The banks were and are the deadbeats, but they had a lot of money and power which is now fast flowing away from them.

Politicians have figured it out — run against the banks and you can’t go wrong. They’ll get more money and more votes from people and other interest groups running against the banks than doing their bidding. We might let organized crime thrive for a while, but we always take it down.

HERE IS THE BOMBSHELL — the model paragraph that will ultimately be the undoing of of the "Substitute trustees" the auctions, sales, deeds and evictions. When the full import of this paragraph sinks in, the banks will be left naked in the wind, revealed as common thieves who never loaned any money and who never purchased an obligation but managed to create an elaborate scheme to steal the homes in derogation of the rights of both investors and homeowners. In all the foreclosures, assuming the dubious proposition that the liens were perfected, the modification of the loan with a principal correction would have resulted in a better deal for the investor and the crush of evictions would have been reduced to a trickle because the deals would have been workable — something the original loans never aspired to as a goal, since the originators were after fees for closing not payback on the loans.

"PLAINTIFF moves the court pierce the MERSCORP and MERS corporate veils and impose liability upon the Defendants Stewart and BOA as shareholders in MERSCORP for the activities of MERSCORP and MERS alleged herein. Recognizing the corporate existence of MERSCORP and MERS separate from their shareholders, including Stewart and BOA, would cause an inequitable result or injustice, or would be a cloak for fraud or illegality. MERSCORP and MERS were under-capitalized in light of the nature and risk of their business. The corporate fiction is being used to justify wrongs, perpetrating fraud, as a mere tool or business conduit for others, as a means of evading legal obligations, to perpetrate monopoly and unlawfully gain monopolistic control over the real property recording system in the State of Texas, and to circumvent statutory obligations."


The Subprime Shakeout:The Government Giveth and It Taketh Away: The Significance of the FHFA lawsuits

The Subprime Shakeout: The Government Giveth and It Taketh Away: The Significance of the Game Changing FHFA Lawsuits


The Government Giveth and It Taketh Away: The Significance of the Game Changing FHFA Lawsuits

Posted: 14 Sep 2011 05:58 PM PDT

It is no stretch to say that Friday, September 2 was the most significant day for mortgage crisis litigation since the onset of the crisis in 2007. That Friday, the Federal Housing Finance Agency (FHFA), as conservator for Fannie Mae and Freddie Mac, sued almost all of the world’s largest banks in 17 separate lawsuits, covering mortgage backed securities with original principal balances of roughly $200 billion. Unless you’ve been hiking in the Andes over the last two weeks, you have probably heard about these suits in the mainstream media. But here at the Subprime Shakeout, I like to dig a bit deeper. The following is my take on the most interesting aspects of these voluminous complaints (all available here) from a mortgage litigation perspective.

Throwing the Book at U.S. Banks

The first thing that jumps out to me is the tenacity and aggressiveness with which FHFA presents its cases. In my last post (Number 1 development), I noted that FHFA had just sued UBS over $4.5 billion in MBS. While I noted that this signaled a shift in Washington’s “too-big-to-fail” attitude towards banks, my biggest question was whether the agency would show the same tenacity in going after major U.S. banks. Well, it’s safe to say the agency has shown the same tenacity and then some.

FHFA has refrained from sugar coating the banks’ alleged conduct as mere inadvertence, negligence, or recklessness, as many plaintiffs have done thus far. Instead, it has come right out and accused certain banks of out-and-out fraud. In particular, FHFA has levied fraud claims against Countrywide (and BofA as successor-in-interest), Deutsche Bank, J.P. Morgan (including EMC, WaMu and Long Beach), Goldman Sachs, Merrill Lynch (including First Franklin as sponsor), and Morgan Stanley (including Credit Suisse as co-lead underwriter). Besides showing that FHFA means business, these claims demonstrate that the agency has carefully reviewed the evidence before it and only wielded the sword of fraud against those banks that it felt actually were aware of their misrepresentations.

Further, FHFA has essentially used every bit of evidence at its disposal to paint an exhaustive picture of reckless lending and misleading conduct by the banks. To support its claims, FHFA has drawn from such diverse sources as its own loan reviews, investigations by the SEC, congressional testimony, and the evidence presented in other lawsuits (including the bond insurer suits that were also brought by Quinn Emanuel). Finally, where appropriate, FHFA has included successor-in-interest claims against banks such as Bank of America (as successor to Countrywide but, interestingly, not to Merrill Lynch) and J.P. Morgan (as successor to Bear Stearns and WaMu), which acquired potential liability based on its acquisition of other lenders or issuers and which have tried and may in the future try to avoid accepting those liabilities. In short, FHFA has thrown the book at many of the nation’s largest banks.

FHFA has also taken the virtually unprecedented step of issuing a second press release after the filing of its lawsuits, in which it responds to the “media coverage” the suits have garnered. In particular, FHFA seeks to dispel the notion that the sophistication of the investor has any bearing on the outcome of securities law claims – something that spokespersons for defendant banks have frequently argued in public statements about MBS lawsuits. I tend to agree that this factor is not something that courts should or will take into account under the express language of the securities laws.

[]The agency’s press release also responds to suggestions that these suits will destabilize banks and disrupt economic recovery. To this, FHFA responds, “the long-term stability and resilience of the nation’s financial system depends on investors being able to trust that the securities sold in this country adhere to applicable laws. We cannot overlook compliance with such requirements during periods of economic difficulty as they form the foundation for our nation’s financial system.” Amen.

This response to the destabilization argument mirrors statements made by Rep. Brad Miller (D-N.C.), both in a letter urging these suits before they were filed and in a conference call praising the suits after their filing. In particular, Miller has said that failing to pursue these claims would be “tantamount to another bailout” and akin to an “indirect subsidy” to the banking industry. I agree with these statements – of paramount importance in restarting the U.S. housing market is restoring investor confidence, and this means respecting contract rights and the rule of law. If investors are stuck with a bill for which they did not bargain, they will be reluctant to invest in U.S. housing securities in the future, increasing the costs of homeownership for prospective homeowners and/or taxpayers.

You can find my recent analysis of Rep. Miller’s initial letter to FHFA here under Challenge No. 3. The letter, which was sent in response to the proposed BofA/BoNY settlement of Countrywide put-back claims, appears to have had some influence.

Are Securities Claims the New Put-Backs?

The second thing that jumps out to me about these suits is that FHFA has entirely eschewed put-backs, or contractual claims, in favor of securities law, blue sky law, and tort claims. This continues a trend that began with the FHLB lawsuits and continued through the recent filing by AIG of its $10 billion lawsuit against BofA/Countrywide of plaintiffs focusing on securities law claims when available. Why are plaintiffs such as FHFA increasingly turning to securities law claims when put-backs would seem to benefit from more concrete evidence of liability?

One reason may be the procedural hurdles that investors face when pursuing rep and warranty put-backs or repurchases. In general, they must have 25% of the voting rights for each deal on which they want to take action. If they don’t have those rights on their own, they must band together with other bondholders to reach critical mass. They must then petition the Trustee to take action. If the Trustee refuses to help, the investor may then present repurchase demands on individual loans to the originator or issuer, but must provide that party with sufficient time to cure the defect or repurchase each loan before taking action. Only if the investor overcomes these steps and the breaching party fails to cure or repurchase will the investor finally have standing to sue.

All of those steps notwithstanding, I have long argued that put-back claims are strong and valuable because once you overcome the initial procedural hurdles, it is a fairly straightforward task to prove whether an individual loan met or breached the proper underwriting guidelines and representations. Recent statistical sampling rulings have also provided investors with a shortcut to establishing liability – instead of having to go loan-by-loan to prove that each challenged loan breached reps and warranties, investors may now use a statistically significant sample to establish the breach rate in an entire pool.

So, what led FHFA to abandon the put-back route in favor of filing securities law claims? For one, the agency may not have 25% of the voting rights in all or even a majority of the deals in which it holds an interest. And due to the unique status of the agency as conservator and the complex politics surrounding these lawsuits, it may not have wanted to band together with private investors to pursue its claims.

Another reason may be that the FHFA has had trouble obtaining loan files, as has been the case for many investors. These files are usually necessary before even starting down the procedural path outlined above, and servicers have thus far been reluctant to turn these files over to investors. But this is even less likely to be the limiting factor for FHFA. With subpoena power that extends above and beyond that of the ordinary investor, the government agency may go directly to the servicers and demand these critical documents. This they’ve already done, having sent 64 subpoenas to various market participants over a year ago. While it’s not clear how much cooperation FHFA has received in this regard, the numerous references in its complaints to loan level reviews suggest that the agency has obtained a large number of loan files. In fact, FHFA has stated that these lawsuits were the product of the subpoenas, so they must have uncovered a fair amount of valuable information.

Thus, the most likely reason for this shift in strategy is the advantage offered by the federal securities laws in terms of the available remedies. With the put-back remedy, monetary damages are not available. Instead, most Pooling and Servicing Agreements (PSAs) stipulate that the sole remedy for an incurable breach of reps and warranties is the repurchase or substitution of that defective loan. Thus, any money shelled out by offending banks would flow into the Trust waterfall, to be divided amongst the bondholders based on seniority, rather than directly into the coffers of FHFA (and taxpayers). Further, a plaintiff can only receive this remedy on the portion of loans it proves to be defective. Thus, it cannot recover its losses on defaulted loans for which no defect can be shown.

In contrast, the securities law remedy provides the opportunity for a much broader recovery – and one that goes exclusively to the plaintiff (thus removing any potential freerider problems). Should FHFA be able to prove that there was a material misrepresentation in a particular oral statement, offering document, or registration statement issued in connection with a Trust, it may be able to recover all of its losses on securities from that Trust. Since a misrepresentation as to one Trust was likely repeated as to all of an issuers’ MBS offerings, that one misrepresentation can entitle FHFA to recover all of its losses on all certificates issued by that particular issuer.

The defendant may, however, reduce those damages by the amount of any loss that it can prove was caused by some factor other than its misrepresentation, but the burden of proof for this loss causation defense is on the defendant. It is much more difficult for the defendant to prove that a loss was caused by some factor apart from its misrepresentation than to argue that the plaintiff hasn’t adequately proved causation, as it can with most tort claims.

Finally, any recovery is paid directly to the bondholder and not into the credit waterfall, meaning that it is not shared with other investors and not impacted by the class of certificate held by that bondholder. This aspect alone makes these claims far more attractive for the party funding the litigation. Though FHFA has not said exactly how much of the $200 billion in original principal balance of these notes it is seeking in its suits, one broker-dealer’s analysis has reached a best case scenario for FHFA of $60 billion flowing directly into its pockets.

There are other reasons, of course, that FHFA may have chosen this strategy. Though the remedy appears to be the most important factor, securities law claims are also attractive because they may not require the plaintiff to present an in-depth review of loan-level information. Such evidence would certainly bolster FHFA’s claims of misrepresentations with respect to loan-level representations in the offering materials (for example, as to LTV, owner occupancy or underwriting guidelines), but other claims may not require such proof. For example, FHFA may be able to make out its claim that the ratings provided in the prospectus were misrepresented simply by showing that the issuer provided rating agencies with false data or did not provide rating agencies with its due diligence reports showing problems with the loans. One state law judge has already bought this argument in an early securities law suit by the FHLB of Pittsburgh. Being able to make out these claims without loan-level data reduces the plaintiff’s burden significantly.

Finally, keep in mind that simply because FHFA did not allege put-back claims does not foreclose it from doing so down the road. Much as Ambac amended its complaint to include fraud claims against JP Morgan and EMC, FHFA could amend its claims later to include causes of action for contractual breach. FHFA’s initial complaints were apparently filed at this time to ensure that they fell within the shorter statute of limitations for securities law and tort claims. Contractual claims tend to have a longer statute of limitations and can be brought down the road without fear of them being time-barred (see interesting Subprime Shakeout guest post on statute of limitations concerns.


Since everyone is eager to hear how all this will play out, I will leave you with a few predictions. First, as I’ve predicted in the past, the involvement of the U.S. Government in mortgage litigation will certainly embolden other private litigants to file suit, both by providing political cover and by providing plaintiffs with a roadmap to recovery. It also may spark shareholder suits based on the drop in stock prices suffered by many of these banks after statements in the media downplaying their mortgage exposure.

Second, as to these particular suits, many of the defendants likely will seek to escape the harsh glare of the litigation spotlight by settling quickly, especially if they have relatively little at stake (the one exception may be GE, which has stated that it will vigorously oppose the suit, though this may be little more than posturing). The FHFA, in turn, is likely also eager to get some of these suits settled quickly, both so that it can show that the suits have merit with benchmark settlements and also so that it does not have to fight legal battles on 18 fronts simultaneously. It will likely be willing to offer defendants a substantial discount against potential damages if they come to the table in short order.

Meanwhile, the banks with larger liability and a more precarious capital situation will be forced to fight these suits and hope to win some early battles to reduce the cost of settlement. Due to the plaintiff-friendly nature of these claims, I doubt many will succeed in winning motions to dismiss that dispose entirely of any case, but they may obtain favorable evidentiary rulings or dismissals on successor-in-interest claims. Still, they may not be able to settle quickly because the price tag, even with a substantial discount, will be too high.

On the other hand, trial on these cases would be a publicity nightmare for the big banks, not to mention putting them at risk a massive financial wallop from the jury (fraud claims carry with them the potential for punitive damages). Thus, these cases will likely end up settling at some point down the road. Whether that’s one year or four years from now is hard to say, but from what I’ve seen in mortgage litigation, I’d err on the side of assuming a longer time horizon for the largest banks with the most at stake.

The Subprime Shakeout:The Government Giveth and It Taketh Away: The Significance of the FHFA lawsuits

From: Charles Cox []
Sent: Saturday, September 17, 2011 5:34 PM
To: Charles Cox
Subject: The Subprime Shakeout:The Government Giveth and It Taketh Away: The Significance of the FHFA lawsuits

Note…links are active but not highlighted. If you want to follow any, usually you can hold the Ctrl button then left click. Or read it in the Word attachment which might be easier to read.

The Subprime Shakeout.docx

Order Certifying MERS in Washington

From: Charles Cox []
Sent: Friday, September 02, 2011 12:59 PM
To: Charles Cox
Subject: Order Certifying MERS in Washington


  1. Is Mortgage Electronic Registration Systems, Inc., a lawful “beneficiary” within the terms of Washington’s Deed of Trust Act, Revised Code of Washington section 61.24 .005 (2), if it never held the promissory notes secured by the deed of trust?
  2. If so, what is the legal effect of Mortgage Electronic Registration Systems, Inc., acting as an unlawful beneficiary under the terms of Washington’s Deed of Trust Act?
  3. Does a homeowner possess a cause of action under Washington’s Consumer Protection Act against Mortgage Electronic Registration Systems, Inc., if MERS acts as an unlawful beneficiary under the terms of Washington’s Deed of Trust Act?

This is the second time that a trial court has certified questions to the Supreme Court of a state with respect to the pattern of conduct by those who acted as intermediaries in the process of securitization of debt. In this case, similar to the case being heard by the Supreme Court of the state of Arizona on September 22, 2011, the specific issue can be boiled down to a single point, to wit: if a strawman is being used essentially as merely a placeholder on what would otherwise be a legal document, what is the effect on title, what is the effect on foreclosure, and what right of action exists in favor of the homeowner if the strawman had no interest in the financial transaction?

The very manner in which the questions are phrased makes it clear that the trial court believes that it will require a change in the law for the pretender banks to prevail in the past, present or future foreclosures or mortgage litigation. The impact of the current pattern of conduct in corrupting the title system in all 50 states continues to have a pervasive effect on the housing market, our national economy, and our standing in world opinion. A correction is certainly required. It seems clear that both sides of the issue have proponents who admit that a correction is necessary. If the correction involves changing our notions of certainty in the marketplace wherein a buyer must make further inquiry than what is reflected in public records, the amount of investigation and paperwork involved in virtually any transaction will skyrocket. If the correction involves applying existing law and the rules of evidence, the title to property involved in tens of millions of transactions will be put in doubt, requiring a massive streamlined effort to “quiet title” thus restoring confidence in the marketplace.

Either way, we are in for a prolonged period of time in which title defects and uncertainty in the marketplace will dominate our attention


AZ AG File Amicus Brief Favoring Homeowners – From LivingLies

From: Charles Cox []
Sent: Friday, September 02, 2011 9:55 AM
To: Charles Cox
Subject: AZ AG File Amicus Brief Favoring Homeowners – From LivingLies



The case is Julia Vasquez v Deutsch Bank National Trust Company, as Trustee for Saxon Asset Securities Trust 2005-3; Saxon Mortgage, Inc., and Saxon Mortgage Services, Inc. Supreme Court Case No CV 11-0091-CQ, U.S. Bankruptcy Court Case No: 4:08-bk-15510-EWH. Assisting in the writing of the Amicus Brief were Carolyn R. Matthews, Esq., Dena R. Epstein, Esq., and Donnelly A. Dybus, Esq..

In a very well -written and well-reasoned brief, the Arizona Attorney general takes and stand and makes a very persuasive case contrary to the tricks and shell games of the pretender lenders. It also addresses head-on the contention that that a negative ruling to the banks will cause financial disaster. Just as we have been saying for years here on these pages, the AG makes short shrift of that argument. And the AG takes the bank to task on their “spin” that stopping the foreclosures will have a chilling effect on the housing market and therefore the economy. The absurdity of both positions is exposed for what they are — naked aggression and greed justifying the means to defraud and corrupt the entire housing market, financial industry and the whole of the consumer buying base in this and other countries.

Of particular note is the detailed discussion in the Amicus Brief regarding the recordation of interests in real property. While the brief does not directly attach perfection of liens that violate the provisions of Arizona Statutes, the implications are clear: If the public record does not contain adequate disclosure as to the identity of the interested parties, the document is neither properly recorded, nor is the party seeking to enforce such a document entitled to use that document as though it had been recorded.

The use of a double nominee method of identifying the straw-man beneficiary (usually MERS) and a straw-man “lender” (usually the mortgage originator that was acting only as a conduit or broker) leaves the public without any knowledge as to the identities of the real parties in interest. In the case of a mortgage lien, if it is impossible to know the identity of the party who can satisfy the lien, then the lien is not perfected. The same reasoning holds true with any other document required to be recorded, to wit:

PUBLIC POLICY OF ARIZONA AGAINST FORECLOSURES: The AG also meets head on the obvious bias in the courts in which the assumption is made that that it is somehow better for society to speed along the foreclosures. Not so, says the AG



From: Charles Cox []
Sent: Saturday, September 17, 2011 2:17 PM
To: Charles Cox

"If you want to save your home, you’ve got to get a good lawyer who knows how to take a deposition—no exceptions."


EDITOR’S NOTE: Be careful before you celebrate over this. Yes, it is now more difficult for the banks to lie their way through foreclosure. The word is "difficult" not "impossible."

They can still lie their way through foreclosure if you don’t know how to challenge or object to affidavits, business records, testimony that is not from a COMPETENT (that has a technical definition) witness, etc. And you must also satisfy the same requirements if YOU want to put evidence in the record and have the Judge hear it. Getting it in the record is not usually half as hard as having the Judge actually consider it — that is a matter of ease of presentation and style.


Submitted on 2011/09/16 at 12:43 pm

Oh, no, we have to actually prove our cases!” Bank lawyers respond to the Glarum case by Mike Wasylik Esq. on September 16, 2011

Glarum has the banks running scared.
The biggest challenge banks face in today’s foreclosure crisis is that they still haven’t come to grips with the need to tell the truth when they testify. The recent case of Glarum v. LaSalle [PDF] has put even more pressure on the banks to tell the truth in foreclosure court, and now the banks and their lawyers are in a blind panic.

Banks have to provide admissible evidence in foreclosure cases

In the Glarum case, the trial judge had granted a summary judgment in favor of the bank, and ordered the Glarum home to be sold at auction. In support of its motion for that summary judgment, the bank offered the sworn affidavit of Ralph Orsini, who swore that the Glarums had defaulted on their loan and that they owed the bank a particular amount of money. Unfortunately, Orsini didn’t know these things were true, so he relied on the computer database to tell him these things. And according to the appellate court, that’s where the problem began:

Orsini did not know who, how, or when the data entries were made into Home Loan Services’s computer system. He could not state if the records were made in the regular course of business. He relied on data supplied by Litton Loan Servicing, with whose procedures he was even less familiar. Orsini could state that the data in the affidavit was accurate only insofar as it replicated the numbers derived from the company’s computer system. Despite Orsini’s intimate knowledge of how his company’s computer system works, he had no knowledge of how that data was produced, and he was not competent to authenticate that data.

(Emphasis mine.) The appellate court threw out the affidavit, and the resulting judgment, because Orsini’s statements were mere hearsay. They didn’t prove anything.

Applying long-held evidentiary principles to foreclosure cases

Bank lawyers, instead of recognizing this case as reaffirming long-understood principles of basic evidence, have sounded the alarm. Here’s what one “client alert” from Greenberg Traurig had to say:

The Fourth District Court of Appeals has sent a strong statement that more generic affidavits currently utilized in some cases will no longer be sufficient where they do not include specific and detailed factual information regarding the compilation of the loan and payment data into a computer system. In doing so, the appellate court may have achieved the unintended result of dramatically changing the foreclosure landscape in Florida.

Again, emphasis mine. Changing the landscape? Hardly. Here are some of the things that Greenberg Traurig recommends banks will need to do in future foreclosure cases:

· The affiant should be familiar with and have a specific understanding as to how the records are kept by the company and about the company’s recordkeeping practices in general.

· The affidavit may need to include factual information establishing that the records relied upon were kept in the ordinary course of the company’s regularly conducted business activity, with specific reference to each record that is relied upon.

· …the affidavit may need to contain language addressing the procedures that the company takes to ensure that the information input into its computer system is accurate.

· …the information included in the affidavit will need to be sufficient to show that the records were made by or from information transmitted by a person with knowledge.

· The courts may even require the affidavit to provide information regarding the procedures used by the prior loan servicer to ensure that the information is kept within the normal course of its business…

· Particular care should be given to who the company selects as the affiant…

None of this is revolutionary, or even surprising, to anyone who’s ever litigated a commercial case before—it’s “Business Records 101.” Business records are never admissible, because they are hearsay, unless you do all those things. Why? Because business records are hearsay, so you have to lay the groundwork to get them admitted.

Pursuant to section 90.803(6)(a), Florida Statutes, documentary evidence may be admitted into evidence as business records if the proponent of the evidence demonstrates the following through a record’s custodian:

(1) the record was made at or near the time of the event; (2) was made by or from information transmitted by a person with knowledge; (3) was kept in the ordinary course of a regularly conducted business activity; and (4) that it was a regular practice of that business to make such a record.

That’s always been the law in every case, and the Glarum court has now ruled that the same law that applies to everyone else now applies to banks, too. And that’s just fair.

If you want to save your home, you’ve got to take depositions.

What lessons can be learned from Glarum? first, that banks are terrified of having their affiants’ depositions taken, and will fight even harder to prevent that from happening. They are terrified of what “borrower’s counsel” like us can do when we have the opportunity to ask them questions under oath. And when we do get the chance to ask those questions, we can blow a foreclosure case right out of the water, just like in Glarum.

Finally, borrowers, homeowners, and other foreclosure defendants should know this: taking depositions in your foreclosure case is a critical step in protecting your home—one that our law firm has long viewed as essential in almost every foreclosure case. And it’s a step that almost no foreclosure defendant is competent to handle on their own. If you want to save your home, you’ve got to get a good lawyer who knows how to take a deposition—no exceptions.


From: Charles Cox []
Sent: Tuesday, September 13, 2011 11:20 AM
To: Charles Cox


Posted on September 13, 2011 by Neil Garfield

“The mere fact that the pretenders are avoiding trials at all costs is proof unto itself that they do not have the goods, they do not have title, they are not the creditor and they are merely sneaking into the system to fill the void created by the real creditors (investor/lenders) who want no part of the foreclosure process nor any need to defend against predatory, deceptive or illegal lending practices. ” — Neil Garfield


EDITOR’S NOTE: The eviction laws were mostly designed for landlord tenant situations. Once again, pretender lenders are using questionable practices using laws that don’t apply to the cases they are bringing. But ever since Judge Shack in New York and Judge Boyco in Ohio started questioning whether the homeowners were actually getting their day in court, the courts have been shifting away from the old rules.

The old rules basically prevent a tenant from questioning the title of his landlord as a defense to an eviction. The reason is obvious. You sign a lease with someone, pay them for a while and then stop paying — the issue of who has title is basically irrelevant. You have a contract (lease) either oral or written, you breached it, and so the summary procedure for eviction makes it easier on landlords to get tenants out and begin renting the apartment, condo or house. The only real defense is payment and some issues like retaliatory eviction for reporting health problems, and similar landlord tenant issues. You see these laws in Arizona, Florida and every other state I’ve looked at.

Along comes massive foreclosures and instead of having a contract with the landlord you have a claim by someone you never heard of, with paperwork you’ve never seen, much of it unrecorded, and claiming default without being the creditor or even establishing that they represent the creditor. So in non-judicial states for example, this is the first time you have seen, met or had any day in court and you are told that you are in a court of limited jurisdiction and that if you want to raise issues regarding fraudulent or wrongful foreclosure you need to do it in another court. In the meanwhile, the court is going to evict you no matter how much proof you have that the party doing the evicting obtained title illegally and may never have obtained title.

As I have been saying for 4 years, eviction is not a remedy to anyone claiming to have a right to possession of a foreclosed home unless there has been an opportunity to examine all the claims of the pretender lenders to actual ownership of the obligation and the possession of the proper paperwork. Even in judicial states this is not working right because the foreclosures are considered clerical by judges and many of them don’t believe, or at least didn’t believe until recently, that the banks would be so arrogant and stupid as to make claims on mortgages that were never perfected as liens and never transferred to them or anyone else.

So here we have an Oregon judge that spots the issue and simply states that this is not an eviction, it is a quiet title issue and if you want possession you need to prove title. If you want to prove title, considering the defects that are apparent and alleged by the homeowner then you need to file a quiet title action. This is the same as I have been saying for years. If they really had the goods and they really could prove that US Bank, or BOA was going to lose money because of the alleged default on the obligation, then all they needed to do was go to trial on a few dozen of these cases and the issues raised by homeowners would go away. Instead the issues are growing in volume and sincerity.

The mere fact that the pretenders are avoiding trials at all costs is proof unto itself that they do not have the goods, they do not have title, they are not the creditor and they are merely sneaking into the system to fill the void created by the real creditors (investor/lenders) who want no part of the foreclosure process nor any need to defend against predatory, deceptive or illegal lending practices.

Court rulings complicate evictions for lenders in Oregon

“Those issues give credence to Defendant’s argument that this case is better brought as one to quiet title and then for ejectment.”


Another Oregon woman successfully halted a post-foreclosure eviction after a judge in Hood River found the bank could not prove it held title to the home.

Sara Michelotti’s victory over Wells Fargo late last week carries no weight in other Oregon courts, attorneys say. But it illustrates a growing problem for banks — if the loans’s ownership history isn’t recorded properly, foreclosed homeowners might be able to fight even an eviction.

“There’s this real uncertainty from county to county about what that eviction process is going to look like for the lender,” said Brian Cox, a real estate attorney in Eugene who represented Wells Fargo.

Michelotti’s case revolved around a subprime mortgage lender, Option One Mortgage Corp., that went out of business during the housing crisis. Circuit Court Judge Paul Crowley ruled that it was not clear when or how Option One transferred Michelotti’s mortgage to American Home Mortgage Servicing Inc., which foreclosed on her home and later sold it to Wells Fargo.

RICO Case Against JPM Chase

From: Charles Cox []
Sent: Saturday, September 03, 2011 6:22 PM
To: Charles Cox
Subject: RICO Case Against JPM Chase

Jeff Barnes at it again…could get interesting.

Also see: It would be good to get a copy of the complaint to see how it is drafted.

Charles Wayne Cox – Oregon State Director for the National Homeowners Cooperative
Email: mailto:Charles
Websites:;; and
P.O. Box 3065
Central Point, OR 97502
(541) 727-2240 direct
(541) 610-1931 eFax

MERScurseProtect America’s Dream



Paralegal; CA Licensed Real Estate Broker; Certified Forensic Loan Analyst. Litigation Support; Mortgage and Real Estate Expert Witness Services.

UPDATE: Link to Webcast of Attorney General Kamala Harris’ Announcement of Mortgage-Related Law Enforcement Action

From: Charles Cox []
Sent: Thursday, August 18, 2011 8:13 AM
To: Charles Cox
Subject: UPDATE: Link to Webcast of Attorney General Kamala Harris’ Announcement of Mortgage-Related Law Enforcement Action

Advisory Only

August 18, 2011

Media Advisory

Contact: (415) 703-5837

Print Version

UPDATE: Link to Webcast of Attorney General Kamala Harris’ Announcement of Mortgage-Related Law Enforcement Action

WHAT: Attorney General Kamala D. Harris will announce a mortgage-related enforcement action.

Press Conference LIVE STREAM VIDEO:

WHEN: Thursday, August 18, 2011

Press Conference – 11:30 a.m.


14th Floor Conference Room
State Building
455 Golden Gate Ave.
San Francisco, CA 94102

Please RSVP at agpressoffice or 415.703.5837. Press Credentials are required to attend Press Conference.

# # #


From: Charles Cox []
Sent: Wednesday, August 17, 2011 5:56 PM
To: Charles Cox

(Neil Garfield) EDITOR’S COMMENT: I was talking with an expert in landlord tenant law and I received an interesting suggestion. The case involved someone who has just been served with a writ of restitution where the owner had to peaceably leave her home — or it wouldn’t be so peaceful. The suggestion was that the owner file a forcible detainer action of her own against the current party that evicted her and accuse them of trespass as well. If she has proof, and in this case she does, that the documents were forged (even the verified complaint for eviction was forged) then there were many false parties and false documents.

So I squeezed my source a little more and the following is the line of reasoning he was suggesting that we follow from a fact standpoint. The names and details are redacted except for the pretenders. Comments anyone?

1. Petitioner’s primary residence has just been served with a writ of restitution requiring her to vacate the premises.

2. Petitioner is the legal owner of the property.

3. Petitioner cooperated with law enforcement, but states affirmatively that she has proof that the verified complaint filed by US Bank for the forcible detainer from her primary residence was a forged document with a false notary.

4. Further, Petitioner now has in her possession proof that the documents by which US Bank claims to be the creditor were also forged, fabricated and misrepresented to the court intentionally and with willful disregard for the consequences or the truth.

5. Petitioner asserts that US Bank used trickery and falsehood to falsely represent facts to the Court that it knew were untrue.

6. The Substitution of Trustee was a false, forged and fabricated document that was misrepresented by US BANK and their counsel as being authentic.

7. Using the false Substitution of trustee, US BANK caused a false, fabricated notice of default, despite payments being made under contract to the creditors.

8. Using the false Notice of Default, US Bank caused a false Notice of Sale to be issued despite the fact that it was neither the beneficiary nor the lender, nor a successor thereto by any means, nor had US Bank ever parted with anything of value that would constitute consideration or an interest in Petitioner’s obligation to creditors.

9. Using the false Notice of Sale and the false substitute of trustee, a false auction was held by the false substitute trustee, where the false substitute trustee represented US Bank as the false creditor and the false trustee “Accepted” a non-existent bid (US Bank was not present at the false auction) in which the false substitute trustee issued a deed upon “foreclosure” without receiving any consideration of any kind.

10. The false substitute trustee was at all times under the direct control and instructions of US BANK. US Bank had in substance substituted itself as the false trustee using the CalWestern entity.

11. Using the fraudulently created and fraudulently obtained deed from the false substitute trustee US Bank initiated an FED action against the Petitioner.

12. Using the false, forged, fabricated and unauthorized documentation described above, and using the rules of eviction to its advantage, US Bank obtained a Judgment for Eviction and Restitution of the premises against the Petitioner.

13. Using the fraudulently obtained Judgment for Restitution and Eviction, US Bank filed the required documents for a writ of restitution to issue.

14. Petitioner is now legally evicted from a home that she legally owns since the deeds used by US Bank were wild deeds, unauthorized and not in the chain of title.

15. Petitioner demands possession of her home.

16. The actions of US Bank constitute slander of title, trespass, and have caused severe emotional distress to the Petitioner.

To allow US Bank to continue on this march of theft would make this court a co-venturer in a gross miscarriage of justice.

AHMSI sues LPS and DocX over robo-signing scandal

From: Charles Cox []
Sent: Tuesday, August 23, 2011 9:11 AM
To: Charles Cox
Subject: AHMSI sues LPS and DocX over robo-signing scandal

Thanks April

Charles Wayne Cox – Oregon State Director for the National Homeowners Cooperative
Email: mailto:Charles
Websites:;; and
P.O. Box 3065
Central Point, OR 97502
(541) 727-2240 direct
(541) 610-1931 eFax

MERScurseProtect America’s Dream



Paralegal; CA Licensed Real Estate Broker; Certified Forensic Loan Analyst. Litigation Support; Mortgage and Real Estate Expert Witness Services.

Gomes and Supremes

From: Charles Cox []
Sent: Wednesday, August 17, 2011 4:59 PM
To: Charles Cox
Subject: Gomes and Supremes

Petition attached…thanks to Ed Peckham…San Diego attorney…

Charles Wayne Cox – Oregon State Director for the National Homeowners Cooperative
Email: mailto:Charles
Websites:;; and
P.O. Box 3065
Central Point, OR 97502
(541) 727-2240 direct
(541) 610-1931 eFax

MERScurseProtect America’s Dream



Paralegal; CA Licensed Real Estate Broker; Certified Forensic Loan Analyst. Litigation Support; Mortgage and Real Estate Expert Witness Services.

Petition for Certiorari.pdf

The Post finds problem in 92% of bank foreclosure filings

From: Charles Cox []
Sent: Wednesday, August 17, 2011 9:36 AM
To: Charles Cox
Subject: The Post finds problem in 92% of bank foreclosure filings


Posted on August 17, 2011 by Neil Garfield


EDITOR’S NOTE: My figures tracking thousands of foreclosures indicate the same thing that the New York Post found. There are a scattered few foreclosures that are good old-fashioned foreclosures of valid mortgages. The borrower didn’t pay and there were no third party payments; the mortgage documents were the normal variety without nominees, MERS, substitutions of Trustee, and new parties that are clearly outside the chain of title. It can be expressed as a rule: if there is a substitution of trustee, there is a 99% chance the loan was (a) securitized and (b) invalid, without any valid transfers of authority or ownership. If MERS was involved, the same rule applies.

So the question is not one of probability or theory — the forgery of documents, the origination of the loan, the fabrication of documents, the intentional misrepresentation by counsel (with plausible deniability, but nonetheless knowing) — all contribute to the same conclusion. The substitutions of counsel were in virtually ALL CASES faked, which means that the notice of default, the notice of sale, the auction, the auction sale, the deed upon foreclosure are all void or voidable, depending upon state law. The proof of claim in bankruptcy is faked.

So now what? Those of you who have been following the blog for years know what I am going to say. Unless we change our legal system and throw out hundreds of years of statutory law, common law and standard practices in the real estate transactions, the last owner of the property still owns it. That would be the homeowner. The implications of this are enormous, I know. It means that even people who were foreclosed and evicted (illegally) from their homes have a right to claim ownership, move in, and possess the property — regardless of when it was. It means that there is a 92% probability that out of the 5 million families dispossessed from their homes, at least 4,500,000 of them could return to those properties.

So what would be the status of their ownership, possession and their obligation when their loan was funded? There are many technical issues that present themselves in this scenario, but generally speaking, if you check with any duly licensed attorney in the jurisdiction in which your property is located you will probably find that the following applies:

1. Legally the home is owned in fee simple absolute by the homeowner.

2. Other documents on the title registry will need to be removed through a lawsuit called “Quiet Title.” If there is any legislation required it will be to streamline the Quiet Title procedures.

3. Among the other documents to be removed or ignored, depending upon state law, is the mortgage or deed of trust signed at closing by the homeowner. See my next post on the validity of the original mortgage.

4. All of the foreclosure documents and all of the sale and deed documents from the foreclosure must be removed to have clear title.

5. If the arriving homeowner has purchased the home from another homeowner who was subject to one of these mortgages and/or foreclosures or if there is prior foreclosure the chain of title, all of those must be cleared in order to have clear title.

6. A title company will no longer issue title insurance (unless it is one of the under-capitalized shill title carriers started by the banks) without stating an exception to their commitment with respect to the issue of title in securitized loans and claims arising out of the fact that the foreclosures, transfers or satisfactions were not within the chain of title.

7. The obligation owed to unknown undisclosed creditors is not as was stated in the note on any of those securitized context transactions. There are varying degrees of misstatement in the note but the usual defects are that the actual creditor was never specified and the terms that the actual creditor received included promises from third parties (in the PSA) about payment of the monthly payment, payment of the interest and payment of the principal on each securitized mortgage. Thus the balance can never be known until the parties — all of them — provide an accounting.

8. In each state there is a cause of action for accounting, not necessarily known exactly under that name. You might also want to seek appointment of a receiver to make sure that the payments have been committed properly and not diverted, but that last point probably has the issue of standing attached to it — i.e., it is more properly brought by the investor.

9. If there is a balance due under the obligation it is unsecured, discharged in bankruptcy, and not subject to any security agreement in which any person or entity can make a claim to ownership of anything the homeowner owned, including the house that was the subject of foreclosure or will be subject to foreclosure.

10. Occupied homes by virtue of foreclosure sales that fall under this scope are probably subject to eviction or forcible detainer or unlawful detainer, depending upon the state. Thus the arriving homeowner would need to evict the people who are now living in the home. Again if legislation is to be passed, it should be to smooth the transition in such circumstances and establish a clear right of action for damages for those evicted through no fault of their own.

11. If there is a balance due under the obligation that arose when the loan was funded, then it is subject to offset for any damage claims that are owned by the homeowner for slander of title, trespass, civil theft, fraud, TILA violations, RESPA violations etc.

The Post finds problem in 92% of bank foreclosure filings

August 15, 2011 |

Filed underLenders <;
Posted by Istvan Fekete <;

Since last fall when the whole robo-signing scandal started banks are promising they won’t do it again. But evidences around every corner show the exact opposite: banks are still foreclosing on properties without any right to do it.

A recent probe comes from the New York Post. And the result: In a staggering 92 percent of the claims brought by creditors asserting the right to foreclose against bankrupt families in New York City and the close-in suburbs, banks and mortgage servicers couldn’t prove they had the right to kick the families out on the street, a three-month probe by The Post has shown.

The Post discovered that robosigned documents are still included in the foreclosure paperwork, or – another situation– banks are pressing foreclosures without the proper paperwork and so on.

After reviewing more than 150 Chapter 13 bankruptcy filings from June 2010 in New York’s Eastern and Southern federal court districts the team “put together a random sample of 40 cases where creditors such as banks – but more often loan servicers – filed proofs of claim for first mortgage debt.

The research unearthed claims riddled with robosigners, suspicious documents and outrageous fees. And in a stunning 37 out of 40 cases, The Post discovered a broken chain of title from the original lender to the company now making claim against a local family for its home and thousands of dollars in questionable fees,” the Post writes.

The paperwork was seen by experienced foreclosure defense lawyers, and these experts agreed that the findings reflect a widespread pattern of malfeasance by banks and loan servicers.

“In-court borrowers are by definition broke and can’t hire document experts, but anybody who knows this terrain knows that stuff that looks this suspicious almost certainly is fraud,” says financial industry expert Yves Smith. “There are too many miraculous copies of documents showing up at the eleventh hour and nonsense like that to think this is clean.”

“The largest financial institutions in the US are doing it every day, and I have not seen it slow down or stop,” says Westchester attorney Linda Tirelli. “The game is always the same: Make up documents and foreclose as fast as you can.”

When the troubled homeowners face the foreclosure lawsuit they don’t have any lawyer to help them see through the paperwork servicers file. However, there are a few judges that have a critical eye, such as Judge Arthur Schack, or New York’s chief judge Jonathan Lippman.

In its investigation, the Post uncovered a pattern of problems centered on mortgage assignments – used when a mortgage is sold to a third party – and endorsements of notes, which is the paperwork that rides with the transfer of the mortgage giving the holder a rightful claim to foreclose.

These included:
* Missing or highly questionable endorsements of notes.
* Questionable timing of documents, including mortgage assignments by companies that were no longer in business on the date of the assignment.
* Signatures by robosigners — individuals who slapped their signature on hundreds of affidavits without attesting to their accuracy — on mortgage assignments.
* Proof-of-claim filings by mortgage servicers without documentation of their legal right to do so on behalf of the owner of the loan.
* Assignments created after the debtor filed for bankruptcy, when the law prevents a creditor from making any new claims.
* Mortgage assignments directly from the originator to the trustee for the securitized trust, bypassing the necessary intervening steps of transfer to the sponsor and depositor.

THE MYTH OF FANNIE OR FREDDIE ACTUALLY “BUYING” MORTGAGES (In other words…check into CONSIDERATION…these are “contracts” afterall)

From: Charles Cox []
Sent: Wednesday, August 17, 2011 3:20 AM
To: Charles Cox
Subject: THE MYTH OF FANNIE OR FREDDIE ACTUALLY "BUYING" MORTGAGES (In other words…check into CONSIDERATION…these are "contracts" afterall)

Neil Garfield – EDITOR’S ANALYSIS: I keep encountering the same myth, which is being overlooked by people on all sides; virtually none of the mortgages were ever sold to Fannie or Freddie. It doesn’t matter if they have it on their website as being owned by them. It doesn’t matter that pretenders are using false representations, fabricated documents and forged documents. The property was not sold pure and simple.

The "seller" in virtually every case was NOT the originator. And the originator never sold or transferred the obligation, note and mortgage to anyone. It doesn’t take a rocket scientist: ergo the property was not sold. Fannie and Freddie are holding zippo. Any money they paid was paid for nothing. Any property interest they are showing on their books is false.

TAXPAYERS are getting the shaft over and over again, while hidden liabilities for slander of title, trespass and a myriad of other claims pile up, for which the GSEs (Fannie and Freddie) could be liable. The money for the purchase of these loans came from taxpayers. What did taxpayers get? ZIPPO.



Key documents

Last summer, Fannie Mae executives decided the mortgage giant was “suffering delays in the processing of its foreclosures.”

These documents reveal how Fannie Mae addressed those delays, including a letter to GMAC Mortgage spelling out its new policies to assess compensatory fees and require banks to get its written permission to delay foreclosure sales on loans more than 12 months in arrears. The records also include letters to six lenders setting performance goals for the third quarter of 2010.

Tell us your story

Have you been through the nightmare of foreclosure? Have you struggled to get help from the federal government’s Making Home Affordable programs or the Hardest Hit Fund? Do you have a tale to tell? E-mail your story, 300 words or less, along with your e-mail address and phone number, to getpublished or by using the "Submit News" tab on the Free Press smartphone app. We’ll select the best and share them on freep .com .

Related Links

· Inside Fannie Mae: Confidential records show how Fannie Mae breaks the rules

· Programs for financially troubled homeowners haven’t helped much to date

· Who are Fannie Mae and Freddie Mac?

· How metro Detroit homeowners can get help

· One family’s story of heartbreak in mortgage scandal

· Homeowners share their frustrations: We got roadblocks, not help

· Persistence pays off after 18 months of faxes and late fees

· The true cost of foreclosure for lenders, homeowners, communities, neighbors all end up paying

· Mortgage principal reductions mired in controversy

· Trying to do the right thing leaves homeowner in shambles

· Disabled vet trades war in Iraq for battle over home

· Not getting it in writing costs Clawson grandma

· Income was too much — and too little

· Know your rights — and how to get help

· Fighting to save their homes

· How metro Detroit homeowners can get help

· Real estate brokers just want to move homes

· Fannie Mae and Freddie Mac’s fire sales dilute metro Detroit home values

· Who are Fannie Mae, Freddie Mac?

· Interactive map: Fannie Mae, Freddie Mac metro Detroit foreclosures sales compared to market value

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Part one of a three-part series.

Part two: Fannie Mae and Freddie Mac’s fire sales are crippling metro Detroit communities, leaders say

Part three: Homeowners share their frustrations: We got roadblocks, not help

Inside Fannie Mae: Confidential records show how Fannie Mae breaks the rules | How metro Detroit homeowners can get help | Who are Fannie Mae and Freddie Mac? | Programs for financially troubled homeowners haven’t helped much to date | One family’s story of heartbreak in mortgage scandal | How this report was compiled | Accountability, answers are lacking

In early December, a senior executive at Fannie Mae assured members of the Senate Banking Committee in Washington that the mortgage giant was doing everything possible to address the foreclosure crisis.

"Preventing foreclosures is a top priority for Fannie Mae," Terence Edwards, an executive vice president, told the panel. "Foreclosures hurt families and destabilize communities."

But confidential documents obtained by the Free Press show that Fannie Mae has pushed an agenda at odds with those public assurances.

The records cover Fannie Mae’s foreclosure decisions on more than 2,300 properties, a snapshot from among the millions of mortgages Fannie handles nationally. The documents show Fannie Mae has told banks to foreclose on some delinquent homeowners — those more than a year behind — even as the banks were trying to help borrowers save their houses, a violation of Fannie’s own policy.

Fannie Mae has publicly maintained that homeowners would not lose their houses while negotiating changes to mortgages under the federal Home Affordable Modification Program, or HAMP.

The Free Press also obtained internal records revealing that the taxpayer-supported mortgage giant has told banks that it expected them to sell off a fixed percentage of foreclosed homes. In one letter sent to banks around the country last year, a Fannie vice president made clear that Fannie expected 10%-12% of homes in foreclosure to proceed to sale.

Taken together, the documents offer an unprecedented window into how Fannie decides whether to allow borrowers to exhaust all options to keep their homes. "It’s scary, it really is," said Leisa Fenton of Clarkston, who is among an untold number of people whose homes were sold in foreclosure even though they had been assured their homes were safe while they sought mortgage relief from Washington.

Her family’s home was sold at auction in October. "We just keep praying the Lord is going to work it out," she said.

Alan White, a law professor at Valparaiso University and a leading national expert on the foreclosure crisis, reviewed the records for the Free Press and said they show Fannie Mae — which is regulated by the Federal Housing Finance Agency — is sabotaging the nation’s foreclosure prevention efforts and helping drive down home values.

"Fannie just wants to clean up its balance sheet and get these loans off the books while taxpayers are eating these losses," White said, referring to the multibillion-dollar federal bailout of Fannie Mae in 2008 and the rising cost to taxpayers.

"And Treasury and the FHFA are letting them get away with it. It’s a huge waste. Wealth is being destroyed, people are losing houses needlessly, and taxpayers are losing money."

Fannie Mae officials declined to be interviewed and would not address the issues raised in the records obtained by the Free Press, including a lengthy series of questions provided by e-mail.

But a former Fannie Mae executive, Javid Jaberi, whose name is on some of the documents, said the internal records merely reflect an effort by Fannie Mae to get banks to respond more quickly when loans are delinquent, even if that means pushing some foreclosed homes to sale.

In an interview Wednesday, Jaberi said there is plenty of blame to go around. Borrowers often didn’t understand their options. Banks weren’t doing enough to help borrowers to get mortgage relief. And HAMP’s documentation rules, he said, were too complex.

"Everyone is to blame," Jaberi said, including Fannie Mae.

Fannie spokesman Andrew Wilson said in a statement Fannie is "committed to preventing foreclosures whenever possible."

"We encourage homeowners to reach out as early as possible … to pursue modifications and other foreclosure prevention solutions."

Various lenders — Bank of America, GMAC Mortgage, CitiMortgage and Chase — would not discuss Fannie’s policies.

Records reveal foreclosure tactics

Fannie Mae and many of the nation’s top banks have faced considerable criticism for doing little to stem foreclosure sales, which grew by 1.6 million last year. Investigations by other news media outlets showed that Fannie Mae (and the banks that directly service home loans) help only a sliver of people promised relief, and often delay or bungle applications for modifications. Other reports showed Fannie has punished banks that were too slow to foreclose.

The documents obtained by the Free Press indicate, for the first time, that Fannie wasn’t simply indifferent to helping homeowners, but launched a concerted effort to force seriously delinquent borrowers from their homes.

Fannie’s foreclosure policy — what an August 2010 document calls "our new delay initiative" — focused on homeowners more than 12 months late on their mortgages, including people actively negotiating loan modifications. That stance conflicts with the government’s (and Fannie’s) rules, which are meant to insulate people while they seek loan relief under HAMP.

Mortgage companies, of course, can’t wait forever for delinquent borrowers to catch up on their payments. But critics argue that Fannie Mae’s confidential foreclosure policy is not only at odds with its public assurances, but adds to the inventory of vacant homes across the nation and lowers property values for everyone.

According to White, the Valparaiso professor, foreclosing on a home typically costs Fannie Mae far more than a successful loan modification. But, he and others say, Fannie is willing to absorb higher losses because it knows taxpayers — not Fannie Mae — will eventually reimburse the loss.

Since 2008, when the government took over Fannie Mae and its sister company, Freddie Mac, the mortgage giants have cost taxpayers $141 billion, with estimates that the bill could eventually reach as high as $389 billion.

Fannie Mae and Freddie Mac are significant players in the foreclosure crisis; they own or guarantee more than half of all existing single-family mortgages and about two-thirds of all new U.S. home mortgages. Fannie also administers the U.S. Treasury Department’s $29.9-billion foreclosure prevention initiative — Making Home Affordable, which includes HAMP — that was launched by President Barack Obama in 2009.

Everyone loses

Fannie Mae doesn’t lend directly to homeowners. It buys loans from banks, guarantees them, and relies on the banks to service the loans directly. Fannie funds its mortgage investments by issuing debt securities in domestic and international capital markets.

Fannie Mae, according to rules outlined on its Web site, has told banks that service its loans that they "should not proceed with a foreclosure sale" until a borrower has been evaluated for a loan modification under HAMP. That squares with HAMP’s written rules, which forbid banks from completing foreclosures without first weighing a person’s eligibility for a modification.

According to RealtyTrac, which tracks U.S. foreclosures, 1.6 million homes were sold in foreclosure last year, including 78,704 in Michigan. It’s unclear from the records how many could have kept their homes had Fannie not enacted its confidential foreclosure policy.

Metro Detroit leaders say Fannie Mae’s actions are destabilizing neighborhoods and driving down home values. They pleaded with federal regulators to help.

"Local governments are trying to keep people in their homes and keep property values up, and here you have a government bureaucracy ripping (those efforts) to shreds," said Wayne County Executive Robert Ficano.

"It doesn’t make sense."

Adam Taub, a Southfield lawyer who works with people trying to save their homes, said Fannie is "being very, very aggressive, very proactive, in trying to kick people out. … They’re putting a lot of pressure on" the banks.

He said he had several cases in which banks were willing to modify loans but Fannie Mae was unwilling to cooperate. He said he had no way to know whether Fannie’s policy affected those cases.

"They’re making their books look better, and making neighborhoods look worse, and that hurts everybody’s property values," Taub said.

The confidential records reviewed by the Free Press include notations on more than 2,300 homes in which banks asked Fannie to delay foreclosure sales while homeowners sought modifications or other relief, including short sales — in which a lender lets the borrower sell a home for less than what is owed.

In one instance, from August 2010, Bank of America requested a 45-day delay for a Wisconsin homeowner who owed $124,610 and was 32 months delinquent. The bank said the borrower was applying for a loan modification through HAMP and "it appears that all financial documents have been received and we are waiting for an underwriter to be assigned."

Fannie Mae’s response: "Per our new delay initiative, any loan over 12 months deliq must be on an active payment plan with monthly payments coming in. Therefore, this request to postpone is declined. Please proceed to sale."

IndyMac Mortgage Services sought a delay for a Hawaii borrower who provided all records required by HAMP. The homeowner, 22 months behind, owed $412,225. Fannie: "Proceed with foreclosure."

The records do not identify any homeowners by name.

Wilson, the Fannie Mae spokesman, would not address these or other specific documents, saying only that Fannie evaluates delay requests case by case and has approved some delays "if the situation warranted it."

Indeed, Fannie officials approved some brief delays, records show — with conditions.

In October, Bank of America sought a delay for a California borrower who was 24 months behind, owed $230,449 and had filled out a HAMP loan package. Fannie agreed to delay sale until early November, but noted:


Meg Burns, chief of policy at FHFA, which oversees Fannie Mae, said foreclosure sales are delayed "all the time. We suspend foreclosure processing all the time. … There are plenty of postponements."

Burns said if anyone is to blame for home losses, it’s the banks for not dealing sooner with homeowners.

FHFA officials also noted that Fannie and Freddie are adopting new rules in October that provide incentives and penalities to encourage servicers to work with delinquent borrowers at an early stage.

Edward DeMarco, FHFA’s acting director, has said the new policies should give homeowners a greater understanding of the process and minimize taxpayer losses by ensuring loans are serviced efficiently and fairly.

FHFA also noted that since Fannie and Freddie were taken into conservatorship, they have completed more than 900,000 loan modifications.

Fannie Mae’s foreclosure policy is also being applied to seriously delinquent borrowers in programs other than HAMP, records show.

In one case last October, Bank of America sought a delay for a Michigan borrower seeking a loan modification who owed $65,542 and was two years behind, but whose finances were improving.

"Borrower is reflecting positive monthly cash flow of $914.77 and may be able to afford a modified payment," the bank wrote. Fannie refused, noting the lengthy delinquency: "Proceed to sale."

Ira Rheingold, executive director of the National Association of Consumer Advocates, said, "It’s rarely in anyone’s best interest to kick out a struggling homeowner who is trying to stay in their home, particularly in cities like Detroit whose housing market is devastated."

He said it’s absurd Fannie is taking actions "devastating to the homeowners and communities they’re supposed to be serving. It really is obscene."

Jamison Brewer, a lawyer with Michigan Legal Services in Detroit, said Fannie’s actions are contrary to what borrowers seeking modifications are being told — that foreclosure sales are put on hold while they apply for HAMP.

"Our tax money went into Fannie," he said. "It’s just ridiculous."

Requests for short sale delays are likewise being denied, the internal records show.

In October, Bank of America sought a delay for a California borrower who owed $416,786, was 13 months behind, and trying to close a short sale. "LOAN IS IN DOCUMENT COLLECTION PHASE," the bank noted. "FILE HAS HAD 0 PREVIOUS POSTPONEMENTS." Fannie Mae declined, noting simply, "Too delinquent."

Sticking taxpayers with the losses

White, the Valparaiso professor, said Fannie’s decision to target homeowners who are more than a year delinquent doesn’t allow for changes in some people’s financial situations, such as a new job or higher pay.

He is among a bipartisan collection of critics who say Fannie is less concerned with helping homeowners than in pushing the cost of troubled mortgages to taxpayers.

For example, White said, if a home with a $200,000 mortgage is foreclosed and Fannie nets $80,000 from its sale, Fannie loses $120,000. But because Congress authorized the Treasury Department to reimburse Fannie as part of the government’s takeover, taxpayers eat the losses.

"Fannie would rather foreclose all the bad and marginal mortgages now, even at very high loss rates, while losses are on the taxpayer, so that when it is once again a private company, these risky mortgages will be gone, and will not result in losses for its shareholders," he said.

"Treasury and Congress have given Fannie a blank check, but Fannie knows the checkbook will be taken away sooner or later."

Fannie Mae has made it difficult in other ways for borrowers to keep their homes.

Take the case of a woman represented by lawyer Lorray Brown of the Michigan Poverty Law Program.

The Eaton County woman lost her home in foreclosure and was facing eviction when she persuaded a bank to lend her $170,000 to buy the property back from Fannie Mae. Brown said Fannie initially rejected her client’s offer, insisting on the full $184,000 the woman owed — $14,000 more than the woman could raise.

Fannie did not accept the woman’s offer until January, after months of wrangling. Had Fannie Mae won the fight, it would certainly have spent more than $14,000 on legal fees and foreclosures costs while displacing a family and leaving another home vacant.

Fannie lawyers referred questions to headquarters, which declined to comment.

Well before Edwards, the Fannie Mae executive, testified before the Senate committee that the mortgage giant was doing all it could to prevent foreclosures, Fannie Mae was making plans to punish banks that were not selling foreclosed homes quickly enough, records show. The records obtained by the Free Press buttress documents reported by the Washington Post earlier this year.

"Fannie Mae is suffering delays in the processing of its foreclosures," according to one unsigned, Aug. 31, 2010, memo. The memo, a "talking points" summary for Fannie Mae management, outlined its plans to fine banks for delaying foreclosure on seriously delinquent homeowners.

As an example, the memo notes, a bank would be fined $5,218 at the time of foreclosure on a house with a mortgage balance of $121,000 and 22 months late.

The memo said Fannie Mae was initially targeting mortgages 18 or more months delinquent to "scrub and clean up servicers’ existing portfolios."

In a June 18, 2010, letter, Jaberi, then Fannie Mae’s vice president, also cited fines in a letter to GMAC.

"Fannie Mae urges you to begin more closely managing delays in the processing of our foreclosure cases as soon as possible," Jaberi wrote, adding: "You must keep the contents of this letter and the requirements confidential."

In the interview Wednesday, Jaberi confirmed that versions of that letter went to all banks that serviced Fannie Mae mortgages.

Fannie Mae also sent letters in June 2010 warning at least six lenders that Fannie projected and expected "approximately 10%-12% of monthly foreclosure inventory will go to sale."

Bert Ely, a banking consultant based in Alexandria, Va., who reviewed the letters for the Free Press, said they show Fannie "wants to force these default situations into a foreclosure sale" and raised questions about whether Fannie is setting arbitrary targets.

"When you have a uniform approach like that, it makes you wonder whether they are just pushing action by the servicers irrespective of local market conditions," he said.

Kurt Eggert, a law professor at Chapman University in Orange, Calif., who has testified before Congress on mortgage issues, said it’s unrealistic to expect banks to hit uniform targets because "they have a different mix of mortgages. … And some are much better at modifying mortgages than others."

Jaberi denied that Fannie took a cookie-cutter approach with banks. Fannie was merely "trying to create a dialogue between Fannie Mae and the servicer. … These are nonperforming assets and need to be resolved. … We were putting more pressure on the servicers to do their jobs."

Alys Cohen, staff attorney for the National Consumer Law Center, noted that Fannie threatened no punishment to banks that denied a loan modification to qualified homeowners, but did threaten to punish banks that didn’t foreclose fast enough.

"That results in many qualified homeowners ending up in foreclosure," she said.


From: Charles Cox []
Sent: Wednesday, August 17, 2011 9:41 AM
To: Charles Cox


Posted on August 17, 2011 by Neil Garfield

I held back on writing this post until I was sure beyond a reasonable doubt that I was right. I’ve said it one form or another, but not like this. It is my opinion (to be checked with licensed attorney) that most mortgage liens over the last 10 years+ were never perfected and improperly filed. If you check with cases involving mechanics liens, mortgage liens, bankruptcy etc., the issue is always about priority of liens and perfection of liens. The essential tests I have distilled from many sources are as follows:

  1. The most important test of the perfection of a lien is whether the lienholder could issue a satisfaction of that lien.
  2. The other statutory steps in establishing the lien and giving it the right place in the priority of the lien must be fulfilled to the letter. Each state differs slightly on such procedures.

Be careful here because this is not one size fits all. There are two classes of such mortgages, and this conclusion regarding the perfection, priority, enforcement and viability of the lien only applies to one class. The first class is the minority by far, but it is a significant minority. There were some actual lenders, apparently like World Savings, that did in fact make loans out of their own cash or credit. That they were later sold into the secondary market does nothing for you if you are challenging the original loan, which presumably was otherwise executed and properly filed. Hence, at the time of origination neither misrepresentation of the creditor nor the PSA were involved.

The other class, including subclasses, accounts for at least 85% of all loans during this period. In most cases the loan originator was either a thinly capitalized mortgage broker who was called “the lender” even though they never gave the borrower one penny and never intended to do so. If there were any borrower claims arising out of the loan transaction itself it would, the strategy goes, be filed against the loan originator (except now we know they were not the lender and were acting as an agent for an undisclosed principal).

The fact that the loan originator was not the lender/creditor means that the real creditor was outside the transaction. Thus a satisfaction of the obligation could only be given by or on behalf of the undisclosed creditor. By definition there is no way of knowing, but for off-record communication, who to go to for a satisfaction. Factually the Promissory Note is a lie. And therefore the “Security instrument” which misstates the terms itself, is based upon a document that does not properly recite the terms of repayment (i.e., including the terms of the PSA).

It does not properly recite the terms of repayment because (1) it provides a nominee instead of the real name of the creditor/lender and (2) it does include all the terms and parties to the deal (see the PSA). If MERS was used, you have a nominee for title, a nominee for creditor, and therefore no real party on the side of the lender, in terms of on-record activity. This results in the lien being imperfect or never perfected. Check the cases and statutes. This conclusion is unavoidable based upon the factual assumptions I have made here.

The focus on forgery, fabrication and misrepresentation (robo-signing) is important. After all this shows fraudulent intent. But it begs the question as to whether the original lien was perfected. And by the way (see previous post) invalidating the lien does not eliminate the obligation or even the possibility of a judgment lien if it is available to the creditor (depends upon the state).

So the narrow issue addressed here ONLY relates to the perfection of the mortgage or deed of trust, which is only one method of enforcement of a debt. These issues are important as to discharge-ability of the obligation in bankruptcy and enforceability of the putative lien in state or Federal Court. There are obvious ramifications as to lawsuits to Quiet Title as well.


From: Charles Cox []
Sent: Tuesday, August 16, 2011 5:26 PM
To: Nancie Koerber
Subject: WTF?

The judge is Michael Mosman of the USDC for the District of Oregon, Portland Division. MERS is gloating over these decisions. Check out their newsroom –

Although Judge Mosman cites Hooker, IMHO, his interpretation is way off. Mosman did what Florida’s 5th DCA did in the Taylor v. Deutsche ruling – take an extremely winding path in order to reach the conclusion that MERS has some sort of authority. To this extent, Mosman states that the infamous clause in every mortgage granting MERS certain rights "if necessary to comply with law or custom" grants MERS the right to receive payment of the obligation.

TILA Rescission – Maine Supreme Court – Tender Not Necessary When “Bank” Failed to Perform

From: Charles Cox []
Sent: Monday, August 15, 2011 7:59 AM
To: Charles Cox
Subject: TILA Rescission – Maine Supreme Court – Tender Not Necessary When "Bank" Failed to Perform

Although the Pelletiers have not yet tendered to the bank the proceeds of the loan that they received from Ameriquest, the statute specifies that tender is not required until the creditor has performed its obligations under the law.

15 U.S.C.S. § 1635(b). The facts established in this summary judgment record indicate that the creditor—the bank—has not yet performed its obligation to “return to the obligor any money or property given as earnest money,

downpayment, or otherwise.” Id. Thus, the Pelletiers were not yet required to tender the proceeds to the bank, and the court did not err in imposing the remedy of rescission on summary judgment. Further proceedings are necessary, however, to define the scope of that remedy. Because the parties have not followed the process specified by statute with precision and clarity, the court may “otherwise order[]” appropriate procedures to give effect to the remedy of rescission. Id. Accordingly, although we affirm the court’s judgment granting the Pelletiers’ request for

rescission, we remand the matter for the court to determine how this rescission should be effectuated.

The entry is:

Summary judgment for the Pelletiers on the foreclosure complaint affirmed. Remanded for further proceedings to effectuate the rescission of the January 18, 2006, agreements.

Charles Wayne Cox – Oregon State Director for the National Homeowners Cooperative
Email: mailto:Charles
Websites:;; and
P.O. Box 3065
Central Point, OR 97502
(541) 727-2240 direct
(541) 610-1931 eFax

MERScurseProtect America’s Dream



Paralegal; CA Licensed Real Estate Broker; Certified Forensic Loan Analyst. Litigation Support; Mortgage and Real Estate Expert Witness Services.


Bank of America Uses Attack Dog to Smear NY AG Schneiderman

From: Charles Cox []
Sent: Monday, August 15, 2011 7:59 AM
To: Charles Cox
Subject: Bank of America Uses Attack Dog to Smear NY AG Schneiderman

The Roundup for August 15, 2011 »

Bank of America Uses Attack Dog to Smear NY AG Schneiderman
By: David Dayen Sunday August 14, 2011 6:02 pm Tweet10

I could barely suppress a laugh when reading about Bank of America CEO Brian Moynihan begging Tim Geithner to settle the foreclosure fraud issue so they can get out from under their liability. As Yves Smith points out, if Tim Geithner had the power to get Bank of America out of their mess, he surely would have done it by now, before their stock dipped 36% in the last three weeks. Geithner simply doesn’t have jurisdiction over state courts, where many judges are simply not going to allow foreclosures when standing to foreclose cannot be proven (Moynihan apparently distinguished on a conference call between “states where foreclosure can take place” and “states where foreclosure is going through very slowly,” and he might as well have been distinguishing between states that respect the rule of law and states that don’t). Geithner may try, but he cannot compel Attorneys General in both parties to settle for pennies on the dollar and relinquish all of their liability for consumer protection violations and fraud upon state courts. He cannot influence investors who see a giant meal ticket in the form of forcing big banks to repurchase faulty mortgage backed securities. If there was a magic bullet in this debacle, it would already have been fired.

The problem is enough AGs are proceeding with mortgage lawsuits against banks so as to render that advantage moot. New York’s Eric Schneiderman is moving ahead in a very systematic way, and Delaware’s Beau Biden seems to be moving in concert. Massachusetts’ Martha Coakley is also pushing ahead, albeit on different mortgage issues. Nevada’s Catherine Masto has a major anti-Countrywide suit outstanding that she has no intention of dropping. Kamala Harris in California has nibbled at some foreclosure related issues and may proceed on a broader basis. Colorado’s John Suthers is apparently also likely not to participate in the settlement, which means he may file litigation.

Moreover, any state AG settlement does not restrict private parties’ rights to sue. It won’t stop the $10+ billion AIG action against Countrywide, nor will it bar the various private efforts to derail BofA’s $8.5 billion mortgage settlement. And it will not stop borrowers from using chain of title issues to fight foreclosures.

Best part of this article was learning in the last line that Lawrence DiRita, a former spokesman for Donald Rumsfeld, now flaks for Bank of America. Poetic.

So having figured out that the Feds cannot come riding to the rescue with another back-door bailout, Bank of America has settled on Plan B. They’ve decided to smear the AGs who are doing their job.

And they’re doing it in a very roundabout way. They’ve trotted out Kathryn Wylde, the President of the Partnership for New York City, to attack Eric Schneiderman for his intervention in the Bank of America settlement with investors over mortgage backed securities. Wylde is going to bat for BofA as well as the Bank of New York Mellon, the trustee for the MBS in the settlement. And she is actually arguing that Schneiderman, by defending the rights of investors and seeking the truth on out and out securitization fraud, is threatening the existence of the financial sector in New York City. No, really.

A BNY Mellon spokesman told me the bank didn’t want to comment on the broader implications of the AG’s filing, but directed me to Kathryn Wylde, CEO of the Partnership for New York City, a business development non-profit. She said that the AG’s “careless action” hurts New York’s standing as a financial center.

“It’s disappointing from the standpoint of the business community that the AG would make a fraud accusation against a major financial institution — in the press,” she told me. “And to not have any consultation with the institution? The bank was blindsided by what appears to be an outrageous charge.” (The AG’s press office didn’t respond to my request of comment.)

BNYM DIRECTED the reporter to Wylde, incidentally. Wylde has done this before, back in November 2009, arguing that breaking up big banks would hurt New York City. This would be outrageous enough on its own. But Wylde happens to sit on the board of directors for the New York Federal Reserve (sub. reqd.).

So you have a board member for an federal overseer of banks on Wall Street (Wylde claims that the NY Fed “serves no regulatory function,” which is just absolutely not true) attacking a state regulator for stepping into a settlement where he has found massive fraud in a preliminary investigation. She’s taking up for BNYM, which the NY Fed oversees, against the state Attorney General. This is just a classic case of regulatory capture.

There’s almost no way this is not coordinated. Wylde is pretty powerful in New York circles, I understand, and she’s raising fears of a slowdown to New York City’s main economic engine to stall regulatory oversight. The banks must continue looting, the story goes, or they’ll stop creating jobs in Manhattan. I don’t think Schneiderman is likely to fold under this attempt at pressure, especially because the evidence keeps moving in his favor, rather than the other way. The New York Post, of all papers, has a damning story on this today.

In a staggering 92 percent of the claims brought by creditors asserting the right to foreclose against bankrupt families in New York City and the close-in suburbs, banks and mortgage servicers couldn’t prove they had the right to kick the families out on the street, a three-month probe by The Post has shown […]

The Post dug through more than 150 Chapter 13 bankruptcy filings from June 2010 in New York’s Eastern and Southern federal court districts — covering the five boroughs, Long Island and nearby northern counties including Westchester–in search of local foreclosure or pre-foreclosure cases. We then put together a random sample of 40 cases where creditors such as banks — but more often loan servicers — filed proofs of claim for first mortgage debt.

The research unearthed claims riddled with robosigners, suspiciousdocuments and outrageous fees. And in a stunning 37 out of 40 cases, The Post discovered a broken chain of title from the original lender to the company now making claim against a local family for its home and thousands of dollars in questionable fees.

This is essentially the same investigation that Abigail Field undertook for Fortune a couple months ago. The New York freakin’ Post now joins Fortune in having done more of an investigation into foreclosure fraud than the 50-state foreclosure fraud task force.

But some of the AGs who believe in their job description are starting to catch up here. And try as the elites and oligarchs might to stop them, a tipping point is being reached where the public may understand just how much the mortgage industry wrecked the system of private property in this country.

UPDATE: Clearing up something from up above – Wylde specifically claimed that the board of directors of the NY Fed serves no regulatory function, not that the NY Fed itself doesn’t. She’s on solid ground with that statement, which I misinterpreted. It hardly negates the position she’s put herself into with this attack. There is such a thing as appearance of impropriety. And Wylde has played this game before, equating any regulatory effort on a bank to destroying New York City. And that’s not in any way above board.

Charles Wayne Cox – Oregon State Director for the National Homeowners Cooperative
Email: mailto:Charles
Websites:;; and
P.O. Box 3065
Central Point, OR 97502
(541) 727-2240 direct
(541) 610-1931 eFax

MERScurseProtect America’s Dream



Paralegal; CA Licensed Real Estate Broker; Certified Forensic Loan Analyst. Litigation Support; Mortgage and Real Estate Expert Witness Services.


From: Charles Cox []
Sent: Wednesday, August 10, 2011 11:43 AM
To: Charles Cox


Posted on August 10, 2011 by Neil Garfield



Debtor informed the Bankruptcy Court (herein, “Court” as the trial court) that it had expert testimony to support Debtor’s challenge to the Motion, and informed the Court that the evidence in the record contained certain indicators that also supported Debtor’s challenge. Primarily Debtor contends that the Loan, Note and Deed of Trust (“DOT”) were intended for Securitization into a Mortgage Backed Security (“MBS”) Trust, and that Appellee was not, either at the time the bankruptcy case was filed, nor at the time the motion for relief from stay was filed: the real Article 3 Holder of the Note; nor the owner of the Loan; nor the party possessed of the DOT rights, including the security interest in the Property. Debtor alleged that the merger agreement was irrelevant. Debtor alleged that the Loan, Note and DOT rights had been sold or otherwise transferred to a completely separate entity, within weeks after the original loan closed, to a completely separate entity from either FHHLC, FTBNA and FHHL.

The Court did not hold a single evidentiary hearing. It did not require a single piece of evidence or testimony to be admitted in a legal proceeding, subject to cross examination and the right to present controverting evidence. The Court did not require that the evidence and the purport of said evidence met even the standard of summary judgment evidence. Debtor was not afforded an opportunity to perform reasonable discovery, despite the fact that Debtor informed the Court that they intended to immediately serve written discovery requests.

  1. Did the Court err in finding that FHHL proved itself to have Constitutional Standing and Real Party in Interest status (“RPI”) (Prudential Standing), without having to present any evidence in an admissible form, over Debtor’s objection?
  2. Even if FHHL had established a prima faci case that it had Constitutional Standing and Prudential Standing, was it a denial of due process, or in contravention of statutory law or the applicable rules of procedure to deny Debtor an evidentiary hearing?
  3. was it error to deny Debtor the right to a reasonable amount of discovery within a reasonable period of time in this case?
  4. What evidence is necessary to prove Constitutional Standing and Prudential Standing in the context of a Motion for Relief from Stay in Bankruptcy Court on residential real estate?



From: Charles Cox []
Sent: Friday, August 12, 2011 10:11 AM
To: Charles Cox


Posted on August 12, 2011 by Neil Garfield


So you have denied the claims of the pretenders and put that in issue. You have even alleged fraud, forgery and fabrication and the catch-word “robosigning”. But the Judge, alleging that he did not want to “make new law” (which wasn’t true) or allegedly because he didn’t want to start an avalanche of litigation interfering with judicial economy (and therefore allowing fraud and theft on the largest scale ever known to human history) has not only denied your claims and motions, but refused to even put the matter at issue, thus enabling you to at least use discovery to prove your point.

So the pretenders have their way: no evidence has been introduced into the record. You have proffered, they have proffered, but somehow their proffer means something more than your proffer even though no proffer is evidence.

Attorneys recognize this as low hanging fruit on appeal, where the trial judge is going to get the case back on remand with instructions to listen to the evidence and allow each side to produce real evidence, not proffers from counsel, and allow each side to conduct discovery. It’s not guaranteed but it is very likely. And the pretenders know that if it ever gets down to real evidence as opposed to arguments of counsel, they are dead in the water, subject to sanctions and liability for slander of title and other claims.

So they have come up with this strategy of setting supersedeas bond higher and higher so that the order appealed from goes into effect and they are able to kick the can down the road with a foreclosure sale, more transfers etc in the title chain, thus enabling them to argue the deed is done and the “former” homeowner must be relegated to only claiming damages, not the home itself. People can be kicked out by eviction proceedings that typically are conducted in courts of limited jurisdiction where in most states you are not allowed to even allege that the title is not real or that it was illegally obtained.

Initially supersedeas bond was set at levels that could be met by homeowners — sometimes as little as $500 or a monthly amount equal to a small fraction of the former monthly payment. Now, Judges who are heavily influenced by banks and large law firms, especially chief Judges who stick their noses into cases not assigned to them, are making sure that the case does NOT go to jury trial and essentially influencing the presiding Judge ex parte, to set a high supersedeas bond thus preventing the homeowner from obtaining a stay of execution on the eviction or the final judgment regarding title.

Of course it is wrong. But it is happening. You counter this by (1) making the record on appeal as to the merits of the appeal (2) adding to the record actual affidavits and testimony as to value, rental value etc. and (3) of course demanding and evidential hearing on the proper amount of the bond. Here you want to search out and produce the bond set in similar cases in the county in which your case is pending. Make sure you have a court reporter and a transcript on appeal and that the record on appeal is complete. It is not uncommon for certain documents to get “lost” or allegedly not “introduced” so when the appellate court gets it you can be met with the question of “what document?”

The other reason they are increasing supersedeas bond is because of a misconception by many pro se litigants and even some attorneys. They have the impression that the appeal is over if the bond is NOT posted with the clerk. And they have the impression that they can’t challenge the amount of bond set, or even go to the appellate court just on that issue and ask the appellate court to set bond — something they might not do but when they remand it, it is usually with instructions to the trial judge to hear evidence on the relevant issues — again something the pretenders don’t want.

Supersedeas bond ONLY applies to execution of the order or judgment that you are appealing. You can AND should continue with the appeal and if you win, the Judgment might be overturned — which means by operation of law you probably get your house back.

All these things are technical matters. Listening to other pro se litigants or even relying upon this other sites intended to help you is neither wise nor helpful. Before you act or fail to act, you should be in close contact with an attorney licensed in the jurisdiction in which your property is located. Local rules can sometimes spell the difference between the life or death of your case.


From: Charles Cox []
Sent: Wednesday, August 10, 2011 11:43 AM
To: Charles Cox


Posted on August 10, 2011 by Neil Garfield

Submitted on 2011/08/08 at 8:38 pm

Sorry the supporting PDF documents did not come through but if any lawyers out there are interested and send me a reply email and I will forward the supporting PDF copies along with the text

by Forrest Hazard

Hold onto your hats Folks…

There are not just two separate frauds here: I finally figured out how to stop MERS [Mortgage Electronic Registration Systems Inc] as foreclosing entity and assignee in California and possibly throughout the United States and it applies to all previous mortgages as well Follow the logic:

The block in totality applies to every mortgage entered into or foreclosed upon since the name MERS {Mortgage Electronic Registration Systems Inc] was suspended by official action of the Franchise Tax Board and the Secretary of State the name cannot be used by MERS [either California or Delaware] because of Section 201B of the Corporation as both Names were/are identical and still remain suspended thereby invoking at least during the known period of suspension [since 2004] [See below] and activate the following bar to conducting any real estate transaction

(d) If a taxpayer’s powers, rights, and privileges are forfeited or suspended pursuant to Section 23301, 23301.5, or 23775, without limiting any other consequences of such forfeiture or suspension, the taxpayer shall not be entitled to sell, transfer, or exchange real property in California during the period of forfeiture or suspension


Undoubtedly two identical names are likely to deceive the public

201. (a) The Secretary of State shall not file articles setting forth a name in which “bank,” ” trust,” “trustee” or related words appear, unless the certificate of approval of the Commissioner of Financial Institutions is attached thereto. This subdivision does not apply to the articles of any corporation subject to the Banking Law on which is endorsed the approval of the Commissioner of Financial Institutions.

(b) The Secretary of State shall not file articles which set forth a name which is likely to mislead the public or which is the same as, or resembles so closely as to tend to deceive, the name of a domestic corporation, the name of a foreign corporation which is authorized to transact intrastate business or has registered its name pursuant to Section 2101, a name which a foreign corporation has assumed under subdivision (b) of Section 2106, a name which will become the record name of a domestic or foreign corporation upon the effective date of a filed corporate instrument where there is a delayed effective date pursuant to subdivision (c) of Section 110 or subdivision

c) of Section 5008, or a name which is under reservation for another corporation pursuant to this section, Section 5122,Section 7122, or Section 9122, except that a corporation may adopt a name that is substantially the same as an existing domestic corporation or foreign corporation which is authorized to transact intrastate business or has registered its name pursuant to Section 2101, upon proof of consent by such domestic or foreign corporation and a finding by the Secretary of State that under the circumstances the public is not likely to be misled. The use by a corporation of a name in violation of this section may be enjoined notwithstanding the filing of its articles by the Secretary of State. (c) Any applicant may, upon payment of the fee prescribed therefore in the Government Code, obtain from the Secretary of State a certificate of reservation of any name not prohibited by subdivision(b), and upon the issuance of the certificate the name stated therein shall be reserved for a period of 60 days.

The Secretary of State shall not, however, issue certificates reserving the same name for two or more consecutive 60-day periods to the same applicant or for the use or benefit of the same person, partnership, firm or corporation; nor shall consecutive reservations be made by or for the use or benefit of the same person, partnership, firm or corporation of names so similar as to fall within the prohibitions of subdivision (b).

23303. Notwithstanding the provisions of Section 23301 or 23301.5,any corporation that transacts business or receives income within the period of its suspension or forfeiture shall be subject to tax under the provisions of this chapter.

Identically MERS has no exemption to use of the state Real Property registry authorizing it to use EDS/LPS or MERSREGISTRY therefore they owe significant fees under the following statute: [Unjust Enrichment] These are triggered any time MERS conducts a foreclosure or completes an assignment of s mortgage on part of its primary

MERS either California or Delaware is additionally in violation of the following state-county statute


11911. (a) The board of supervisors of any county or city and county, by an ordinance adopted pursuant to this part, may impose, on each deed, instrument, or writing by which any lands, tenements, or other realty sold within the county shall be granted, assigned, transferred, or otherwise conveyed to, or vested in, the purchaser or purchasers, or any other person or persons, by his or their direction, when the consideration or value of the interest or property conveyed (exclusive of the value of any lien or encumbrance remaining thereon at the time of sale) exceeds one hundred dollars($100) a tax at the rate of fifty-five cents ($0.55) for each five hundred dollars ($500) or fractional part thereof. (b) The legislative body of any city which is within a county which has imposed a tax pursuant to subdivision (a) may, by an ordinance adopted pursuant to this part, impose, on each deed, instrument, or writing by which any lands, tenements, or other realty sold within the city shall be granted, assigned, transferred, or otherwise conveyed to, or vested in, the purchaser or purchasers, or any other person or persons, by his or their direction, when the consideration or value of the interest or property conveyed(exclusive of the value of any lien or encumbrance remaining thereon at the time of sale) exceeds one hundred dollars ($100), a tax at the rate of one-half the amount specified in subdivision (a) for each five hundred dollars ($500) or fractional part thereof. (c) A credit shall be allowed against the tax imposed by a county ordinance pursuant to subdivision (a) for the amount of any tax due to any city by reason of an ordinance adopted pursuant to subdivision(b). No credit shall be allowed against any county tax for a city tax which is not in conformity with this part.

11912. Any tax imposed pursuant to Section 11911 shall be paid by any person who makes, signs or issues any document or instrument subject to the tax, or for whose use or benefit the same is made, signed or issued.

Causes of action are set forth below:


1571. Fraud is either actual or constructive.

1572. Actual fraud, within the meaning of this Chapter, consists in any of the following acts, committed by a party to the contract, or with his connivance, with intent to deceive another party thereto, or to induce him to enter into the contract:

1. The suggestion, as a fact, of that which is not true, by one who does not believe it to be true;

2. The positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true;

3. The suppression of that which is true, by one having knowledge or belief of the fact; 4. A promise made without any intention of performing it; or,

5. Any other act fitted to deceive.

1573. Constructive fraud consists:

1. In any breach of duty which, without an actually fraudulent intent, gains an advantage to the person in fault, or any one claiming under him, by misleading another to his prejudice, or to the prejudice of any one claiming under him; or,

2. In any such act or omission as the law specially declares to be fraudulent, without respect to actual fraud.

1574. Actual fraud is always a question of fact.



1708. Every person is bound, without contract, to abstain from injuring the person or property of another, or infringing upon any of his or her rights.

1709. One who willfully deceives another with intent to induce him to alter his position to his injury or risk, is liable for any damage which he thereby suffers.

1710. A deceit, within the meaning of the last section, is either:

1. The suggestion, as a fact, of that which is not true, by one who does not believe it to be true;

2. The assertion, as a fact, of that which is not true, by one who has no reasonable ground for believing it to be true;

3. The suppression of a fact, by one who is bound to disclose it, or who gives information of other facts which are likely to mislead for want of communication of that fact; or,

4. A promise, made without any intention of performing it.

1711. One who practices a deceit with intent to defraud the public, or a particular class of persons, is deemed to have intended to defraud every individual in that class, who is actually misled by the deceit.

1712. One who obtains a thing without the consent of its owner, or by a consent afterwards rescinded, or by an unlawful exaction which the owner could not at the time prudently refuse, must restore it to the person from whom it was thus obtained, unless he has acquired a title thereto superior to that of such other person, or unless the transaction was corrupt and unlawful on both sides.

Is MERS responsible for the actions taken by corporate signors Officers California law says YES

2337. An instrument within the scope of his authority by which an agent intends to bind his principal, does bind him if such intent is plainly inferable from the instrument itself.

CALIFORNIA CIVIL CODE AGENCY SECTIONS 2295-2300, 2304-2326, 2330-2339, 2342-2345, 2349-2351

2295. An agent is one who represents another, called the principal, in dealings with third persons. Such representation is called agency.

2296. Any person having capacity to contract may appoint an agent, and any person may be an agent.

2297. An agent for a particular act or transaction is called a special agent. All others are general agents.

2298. An agency is either actual or ostensible.

2299. An agency is actual when the agent is really employed by the principal.

2300. An agency is ostensible when the principal intentionally, or by want of ordinary care, causes a third person to believe another to be his agent who is not really employed by him.

2304. An agent may be authorized to do any acts which his principal might do, except those to which the latter is bound to give his personal attention.

2305. Every act which, according to this Code, may be done by or to any person, may be done by or to the agent of such person for that purpose, unless a contrary intention clearly appears.

2306. An agent can never have authority, either actual or ostensible, to do an act which is, and is known or suspected by the person with whom he deals, to be a fraud upon the principal.

2307. An agency may be created, and an authority may be conferred, by a precedent authorization or a subsequent ratification.

2308. A consideration is not necessary to make an authority, whether precedent or subsequent, binding upon the principal.

2309. An oral authorization is sufficient for any purpose, except that an authority to enter into a contract required by law to be in writing can only be given by an instrument in writing.

2310. A ratification can be made only in the manner that would have been necessary to confer an original authority for the act ratified, or where an oral authorization would suffice, by accepting or retaining the benefit of the act, with notice thereof.

2311. Ratification of part of an indivisible transaction is a ratification of the whole.

2312. A ratification is not valid unless, at the time of ratifying the act done, the principal has power to confer authority for such an act.

2313. No unauthorized act can be made valid, retroactively, to the prejudice of third persons, without their consent.

2314. A ratification may be rescinded when made without such consent as is required in a contract, or with an imperfect knowledge of the material facts of the transaction ratified, but not otherwise.

2315. An agent has such authority as the principal, actually or ostensibly, confers upon him.

2316. Actual authority is such as a principal intentionally confers upon the agent, or intentionally, or by want of ordinary care, allows the agent to believe himself to possess.

2317. Ostensible authority is such as a principal, intentionally or by want of ordinary care, causes or allows a third person to believe the agent to possess.

2318. Every agent has actually such authority as is defined by this Title, unless specially deprived thereof by his principal, and has even then such authority ostensibly, except as to persons who have actual or constructive notice of the restriction upon his authority.

2319. An agent has authority:
1. To do everything necessary or proper and usual, in the ordinary course of business, for effecting the purpose of his agency; and,
2. To make a representation respecting any matter of fact, not including the terms of his authority, but upon which his right to use his authority depends, and the truth of which cannot be determined by the use of reasonable diligence on the part of the person to whom the representation is made.

2320. An agent has power to disobey instructions in dealing with the subject of the agency, in cases where it is clearly for the interest of his principal that he should do so, and there is not time to communicate with the principal.

2321. When an authority is given partly in general and partly in specific terms, the general authority gives no higher powers than those specifically mentioned.

2322. An authority expressed in general terms, however broad, does not authorize an agent to do any of the following:
(a) Act in the agent’s own name, unless it is the usual course of business to do so.
(b) Define the scope of the agency.
(c) Violate a duty to which a trustee is subject under Section 16002, 16004, 16005, or 16009 of the Probate Code.

2323. An authority to sell personal property includes authority to warrant the title of the principal, and the quality and quantity of the property.

2324. An authority to sell and convey real property includes authority to give the usual covenants of warranty.

2325. A general agent to sell, who is entrusted by the principal with the possession of the thing sold, has authority to receive the price.

2326. A special agent to sell has authority to receive the price on delivery of the thing sold, but not afterwards.

2330. An agent represents his principal for all purposes within the scope of his actual or ostensible authority, and all the rights and liabilities which would accrue to the agent from transactions within such limit, if they had been entered into on his own account, accrue to the principal.

2331. A principal is bound by an incomplete execution of an authority, when it is consistent with the whole purpose and scope thereof, but not otherwise.

2332. As against a principal, both principal and agent are deemed to have notice of whatever either has notice of, and ought, in good faith and the exercise of ordinary care and diligence, to communicate to the other.

2333. When an agent exceeds his authority, his principal is bound by his authorized acts so far only as they can be plainly separated from those which are unauthorized.

2334. A principal is bound by acts of his agent, under a merely ostensible authority, to those persons only who have in good faith, and without want of ordinary care, incurred a liability or parted with value, upon the faith thereof.

2335. If exclusive credit is given to an agent by the person dealing with him, his principal is exonerated by payment or other satisfaction made by him to his agent in good faith, before receiving notice of the creditor’s election to hold him responsible.

2336. One who deals with an agent without knowing or having reason to believe that the agent acts as such in the transaction, may set off against any claim of the principal arising out of the same, all claims which he might have set off against the agent before notice of the agency.

2337. An instrument within the scope of his authority by which an agent intends to bind his principal, does bind him if such intent is plainly inferable from the instrument itself.

2338. Unless required by or under the authority of law to employ that particular agent, a principal is responsible to third persons for the negligence of his agent in the transaction of the business of the agency, including wrongful acts committed by such agent in and as a part of the transaction of such business, and for his willful omission to fulfill the obligations of the principal.

2339. A principal is responsible for no other wrongs committed by his agent than those mentioned in the last section, unless he has authorized or ratified them, even though they are committed while the agent is engaged in his service.

2342. One who assumes to act as an agent thereby warrants, to all who deal with him in that capacity, that he has the authority which he assumes.

2343. One who assumes to act as an agent is responsible to third persons as a principal for his acts in the course of his agency, in any of the following cases, and in no others:
1. When, with his consent, credit is given to him personally in a transaction;
2. When he enters into a written contract in the name of his principal, without believing, in good faith, that he has authority to do so; or,
3. When his acts are wrongful in their nature.

2344. If an agent receives anything for the benefit of his principal, to the possession of which another person is entitled, he must, on demand, surrender it to such person, or so much of it as he has under his control at the time of demand, on being indemnified for any advance which he has made to his principal, in good faith, on account of the same; and is responsible therefor, if, after notice from the owner, he delivers it to his principal.

2345. The provisions of this Article are subject to the provisions of Part I, Division First, of this Code.

2349. An agent, unless specially forbidden by his principal to do so, can delegate his powers to another person in any of the following cases, and in no others:
1. When the act to be done is purely mechanical;
2. When it is such as the agent cannot himself, and the sub-agent can lawfully perform;
3. When it is the usage of the place to delegate such powers; or,
4. When such delegation is specially authorized by the principal.

2350. If an agent employs a sub-agent without authority, the former is a principal and the latter his agent, and the principal of the former has no connection with the latter.

2351. A sub-agent, lawfully appointed, represents the principal in like manner with the original agent; and the original agent is not responsible to third persons for the acts of the sub-agent.


23301. Except for the purposes of filing an application for exempt status or amending the articles of incorporation as necessary either to perfect that application or to set forth a new name, the corporate powers, rights and privileges of a domestic taxpayer may be suspended, and the exercise of the corporate powers, rights and privileges of a foreign taxpayer in this state may be forfeited, if any of the following conditions occur: (a) If any tax, penalty, or interest, or any portion thereof, that is due and payable under Chapter 4 (commencing with Section 19001)of Part 10.2, or under this part, either at the time the return is required to be filed or on or before the 15th day of the ninth month following the close of the taxable year, is not paid on or before 6p.m. on the last day of the 12th month after the close of the taxable year. (b) If any tax, penalty, or interest, or any portion thereof, due and payable under Chapter 4 (commencing with Section 19001) of Part 10.2, or under this part, upon notice and demand from the Franchise Tax Board, is not paid on or before 6 p.m. on the last day of the 11th month following the due date of the tax. (c) If any liability, or any portion thereof, which is due and payable under Article 7 (commencing with Section 19131) of Chapter 4of Part 10.2, is not paid on or before 6 p.m. on the last day of the 11th month following the date that the tax liability is due and payable.

23301.6. Sections 23301, 23301.5, and 23775 shall apply to a foreign taxpayer only if the taxpayer is qualified to do business in California. A taxpayer that is required under Section 2105 of the Corporations Code to qualify to do business shall not be deemed to have qualified to do business for purposes of this article unless the taxpayer has in fact qualified with the Secretary of State.

23302. (a) Forfeiture or suspension of a taxpayer’s powers, rights, and privileges pursuant to Section 23301, 23301.5, or 23775 shall occur and become effective only as expressly provided in this section in conjunction with Section 21020, which requires notice prior to the suspension of a taxpayer’s corporate powers, rights, and privileges.

(b) The notice requirements of Section 21020 shall also apply to any forfeiture of a taxpayer’s corporate powers, rights, and privileges pursuant to Section 23301, 23301.5, or 23775 and to any voidability pursuant to subdivision (d) of Section 23304.1.

(c) The Franchise Tax Board shall transmit the names of taxpayers to the Secretary of State as to which the suspension or forfeiture provisions of Section 23301, 23301.5, or 23775 are or become applicable, and the suspension or forfeiture therein provided for shall thereupon become effective. The certificate of the Secretary of State shall be prima facie evidence of the suspension or forfeiture.

(d) If a taxpayer’s powers, rights, and privileges are forfeited or suspended pursuant to Section 23301, 23301.5, or 23775, without limiting any other consequences of such forfeiture or suspension, the taxpayer shall not be entitled to sell, transfer, or exchange real property in California during the period of forfeiture or suspension.23303. Notwithstanding the provisions of Section 23301 or 23301.5,any corporation that transacts business or receives income within the period of its suspension or forfeiture shall be subject to tax under the provisions of this chapter.

23304.1. (a) Every contract made in this state by a taxpayer during the time that the taxpayer’s corporate powers, rights, and privileges are suspended or forfeited pursuant to Section 23301,23301.5, or 23775 shall, subject to Section 23304.5, be voidable at the instance of any party to the contract other than the taxpayer.

(b) If a foreign taxpayer that neither is qualified to do business nor has a corporate account number from the Franchise Tax Board, fails to file a tax return required under this part, any contract made in this state by that taxpayer during the applicable period specified in subdivision (c) shall, subject to Section 23304.5, be voidable at the instance of any party to the contract other than the taxpayer.

(c) For purposes of subdivision (b), the applicable period shall be the period beginning on January 1, 1991, or the first day of the taxable year for which the taxpayer has failed to file a return, whichever is later, and ending on the earlier of the date the taxpayer qualified to do business in this state or the date the taxpayer obtained a corporate account number from the Franchise Tax Board.

(d) If a taxpayer fails to file a tax return required under this part, to pay any tax or other amount owing to the Franchise Tax Board under this part or to file any statement or return required under Section 23772 or 23774, within 60 days after the Franchise Tax Board mails a written demand therefor, any contract made in this state by the taxpayer during the period beginning at the end of the 60-day demand period and ending on the date relief is granted under Section 23305.1, or the date the taxpayer qualifies to do business in this state, whichever is earlier, shall be voidable at the instance of any party to the contract other than the taxpayer. This subdivision shall apply only to a taxpayer if the taxpayer has a corporate account number from the Franchise Tax Board, but has not qualified to do business under Section 2105 of the Corporations Code. In the case of a taxpayer that has not complied with the 60-day demand, the taxpayer’s name, Franchise Tax Board corporate account number, date of the demand, date of the first day after the end of the 60-day demand period, and the fact that the taxpayer did not within that period pay the tax or other amount or file the statement or return, as the case may be, shall be a matter of public record.23304.5. A party that has the right to declare a contract to be voidable pursuant to Section 23304.1 may exercise that right only in a lawsuit brought by either party with respect to the contract in a court of competent jurisdiction and the rights of the parties to the contract shall not be affected by Section 23304. 1 except to the extent expressly provided by a final judgment of the court, which judgment shall not be issued unless the taxpayer is allowed a reasonable opportunity to cure the voidability under Section 23305.1.If the court finds that the contract is voidable under Section 23304.1, the court shall order the contract to be rescinded. However, in no event shall the court order rescission of a taxpayer’s contract unless the taxpayer receives full restitution of the benefits provided by the taxpayer under the contract.23305. Any taxpayer which has suffered the suspension or forfeiture provided for in Section 23301 or 23301.5 may be relieved there from upon making application therefor in writing to the Franchise Tax Board and upon the filing of all tax returns required under this part, and the payment of the tax, additions to tax, penalties, interest, and any other amounts for nonpayment of which the suspension or forfeiture occurred, together with all other taxes, additions to tax, penalties, interest, and any other amounts due under this part, and upon the issuance by the Franchise Tax Board of a certificate of revivor. Application for the certificate on behalf of any taxpayer which has suffered suspension or forfeiture may be made by any stockholder or creditor, by a majority of the surviving trustees or directors thereof, by an officer, or by any other person who has interest in the relief from suspension or forfeiture.


17903. As used in this chapter, “registrant” means a person or entity who is filing or has filed a fictitious business name statement, and who is the legal owner of the business.

17910. Every person who regularly transacts business in this state for profit under a fictitious business name shall do all of the following: (a) File a fictitious business name statement in accordance with this chapter not later than 40 days from the time the registrant commences to transact such business. (b) File a new statement after any change in the facts, in accordance with subdivision (b) of Section 17920. (c) File a new statement when refiling a fictitious business name statement.

17910.5. (a) No person shall adopt any fictitious business name which includes “Corporation,” “Corp.,” “Incorporated,” or “Inc.” unless that person is a corporation organized pursuant to the laws of this state or some other jurisdiction.

In 2005 I sued MERS and MERSCORP both successfully I also sued the California Department of Corporations and California Secretary of State in small claims court I settled those small claims cases for a Certificate of a Non Filing entity and a letter see below

17918. No person transacting business under a fictitious business name contrary to the provisions of this chapter, or his assignee, may maintain any action upon or on account of any contract made, or transaction had, in the fictitious business name in any court of this state until the fictitious business name statement has been executed, filed, and published as required by this chapter.

This is one of the items obtained from that small claims suit

According to the Enforcement Division of the SEC in Washington which I spoke to both under Paul Cox and Mary Schapiro Ace Securities a Chinese Shadow Bank doing business under a Japanese Division of the Karachi stock Exchange fraudulently filed 85000 documents with the SEC and loaned out over 39 Trillion dollars [One
trillion dollars is a stack of 100 dollar bills 700 miles in height] never paid any state or federal taxes claiming that it was a Delaware business trust [A
trust declared to be illegal outside of Delaware by the IRS an abusive trust] but loaned mostly to Bank of America Wachovia Wells Fargo CountryWide Washington Mutual and a host of others including Ownit Mortgage [From CNN
Special A house of cards infamy] mostly through HSBC as Trustee and securitized through MERS [Mortgage Electronic Registration Systems Inc]

To this the Franchise Tax Board sent the following response:

In the case of MERS they stated the following:

Apparently they refuse to follow this Corporation law in this matter

All of my documents having been issued by California state and Delaware state regulatory agencies were granted Judicial Notice [Court authenticity] in the courtroom of Judge Laura Halgren September 17 2007 in multiple cases most notably El Cajon California East County San Diego case number 2007-33928. There are 6 – 1000 page folders in that case alone

No action was ever taken by any entity against either MERS or Ace to the best of my knowledge

DFI counsel Kenneth Sayre Peterson stated

The California Attorney General Issued one of many letters seen below (there is nothing below, sorry…)

MERS: The Unreported Effects of Lost Chain of Title on Real Property Owners”

From: Charles Cox []
Sent: Tuesday, August 09, 2011 9:27 AM
To: Charles Cox
Subject: MERS: The Unreported Effects of Lost Chain of Title on Real Property Owners"

“MERS: The Unreported Effects of Lost Chain of Title on Real Property Owners”

White paper by David Woolley

Not sure if I sent this out before or not.

Charles Wayne Cox – Oregon State Director for the National Homeowners Cooperative
Email: mailto:Charles
Websites:;; and
P.O. Box 3065
Central Point, OR 97502
(541) 727-2240 direct
(541) 610-1931 eFax

MERScurseProtect America’s Dream



Paralegal; CA Licensed Real Estate Broker; Certified Forensic Loan Analyst. Litigation Support; Mortgage and Real Estate Expert Witness Services.

MERS Report Exhibits Combined Reduced.pdf

April Charney on Case distinguishing Agard – thread

From: Charles Cox []
Sent: Wednesday, August 10, 2011 11:20 AM
To: Charles Cox
Subject: April Charney on Case distinguishing Agard – thread

From one of my real estate attorney blogs…

Bank of America’s back-door TARP

From: Charles Cox []
Sent: Wednesday, August 10, 2011 11:20 AM
To: Charles Cox
Subject: Bank of America’s back-door TARP

It never ends with these dirt-bags…

Charles Wayne Cox – Oregon State Director for the National Homeowners Cooperative
Email: mailto:Charles
Websites:;; and
P.O. Box 3065
Central Point, OR 97502
(541) 727-2240 direct
(541) 610-1931 eFax

MERScurseProtect America’s Dream



Paralegal; CA Licensed Real Estate Broker; Certified Forensic Loan Analyst. Litigation Support; Mortgage and Real Estate Expert Witness Services.

Standing to Invoke PSAs as a Foreclosure Defense

From: Charles Cox []
Sent: Tuesday, August 09, 2011 6:57 AM
To: Charles Cox
Subject: Standing to Invoke PSAs as a Foreclosure Defense

Standing to Invoke PSAs as a Foreclosure Defense

posted by Adam Levitin

A major issue arising in foreclosure defense cases is the homeowner’s ability to challenge the foreclosing party’s standing based on noncompliance with securitization documentation. Several courts have held that there is no standing to challenge standing on this basis, most recently the 1st Circuit BAP in Correia v. Deutsche Bank Nat’l Trust Company. (See Abigail Caplovitz Field’s cogent critique of that ruling here.) The basis for these courts’ rulings is that the homeowner isn’t a party to the PSA, so the homeowner has no standing to raise noncompliance with the PSA.

I think that view is plain wrong. It fails to understand what PSA-based foreclosure defenses are about and to recognize a pair of real and cognizable Article III interests of homeowners: the right to be protected against duplicative claims and the right to litigate against the real party in interest because of settlement incentives and abilities.

The homeowner is obviously not party to the securitization contracts like the PSA (query, though whether securitization gives rises to a tortious interference with the mortgage contract claim because of PSA modification limitations…). This means that the homeowner can’t enforce the terms of the PSA. The homeowner can’t prosecute putbacks and the like. But there’s a major difference between claiming that sort of right under a PSA and pointing to noncompliance with the PSA as evidence that the foreclosing party doesn’t have standing (and after Ibanez, it’s just incomprehensible to me how this sort of decision could be coming out of the 1st Circuit BAP with a MA mortgage).

Let me put it another way. Homeowners are not complaining about breaches of the PSA for the purposes of enforcing the PSA contract. They are pointing to breaches of the PSA as evidence that the loan was not transferred to the securitization trust. The PSA is being invoked because it is the document that purports to transfer the mortgage to the trust. Adherence to the PSA determines whether there was a transfer effected or not because under NY trust law (which governs most PSAs), a transfer not in compliance with a trust’s documents is void. And if there isn’t a valid transfer, there’s no standing. This is simply a factual question–does the trust own the loan or not? (Or in UCC terms, is the trust a "party entitled to enforce the note"–query whether enforcement rights in the note also mean enforcement rights in the mortgage…) If not, then it lacks standing to foreclosure.

It’s important to understand that this is not an attempt to invoke investors’ rights under a PSA. One can see this by considering the other PSA violations that homeowners are not invoking because they have no bearing whatsoever on the validyt of the transfer, and thus on standing. For example, if a servicer has been violating servicing standards under the PSA, that’s not a foreclosure defense, although it’s a breach of contract with the trust (and thus the MBS investors). If the trust doesn’t own the loan because the transfer was never properly done, however, that’s a very different thing than trying to invoke rights under the PSA.

I would have thought it rather obvious that a homeowner could argue that the foreclosing party isn’t the mortgagee and that the lack of a proper transfer of the mortgage to the foreclosing party would be evidence of that point. But some courts aren’t understanding this critical distinction.

Even if courts don’t buy this distinction, there are at least two good theories under which a homeowner should have the ability to challenge the foreclosing party’s standing. Both of these theories point to a cognizable interest of the homeowner that is being harmed, and thus Article III standing.

First, there is the possibility of duplicative claims. This is unlikely, although with the presence of warehouse fraud (Taylor Bean and Colonial Bank, eg), it can hardly be discounted as an impossibility. The same mortgage loan might have been sold multiple times by the same lender as part of a warehouse fraud. That could conceivably result in multiple claimants. The homeowner should only have to pay once. Similarly, if the loan wasn’t properly securitized, then the depositor or seller could claim the loan as it’s property. Again, potentially multiple claimants, but the homeowner should only have to pay one satisfaction.

Consider a case in which Bank A securitized a bunch of loans, but did not do the transfers properly. Bank A ends up in FDIC receivership. FDIC could claim those loans as property of Bank A, leaving the securitization trust with an unsecured claim for a refund of the money it paid Bank A. Indeed, I’d urge Harvey Miller to be looking at this as a way to claw back a lot of money into the Lehman estate.

Second, the homeowner had a real interest in dealing with the right plaintiff because different plaintiffs have different incentives and ability to settle. We’d rather see negotiated outcomes than foreclosures, but servicers and trustees have very different incentives and ability to settle than banks that hold loans in portfolio. PSA terms, liquidity, capital requirements, credit risk exposure, and compensation differ between services/trustees and portfolio lenders. If the loans weren’t properly transferred via the securitization, then they are still held in portfolio by someone. This means homeowners have a strong interest in litigating against the real party in interest.

I’m not enough of a procedure jock to know if there’s a way for a homeowner to force an interpleader among the potential claimants-trust, depositor, seller, etc, but that seems like the right way to handle this. In any event, I think the fact that the homeowner isn’t a party to the securitization is kind of beside the point. The homeowner should be able to challenge standing because the homeowner has real legal interests at stake in litigating against the right party.

STUDY: Mortgage Assignments to Washington Mutual Trusts Are Fraudulent

From: Charles Cox []
Sent: Sunday, August 07, 2011 2:01 PM
To: Charles Cox
Subject: STUDY: Mortgage Assignments to Washington Mutual Trusts Are Fraudulent

STUDY: Mortgage Assignments to Washington Mutual Trusts Are Fraudulent

Posted on August 7, 2011 by Neil Garfield

EDITOR’S NOTE: We know the foreclosures were gross misrepresentations of fact to the Courts, to the Borrowers and to the Investors. This article shows the crossover between the MegaBanks — sharing and diluting the responsibility for these fabrications as they went along. If you are talking about one big bank you are talking about all the megabanks.

The evidence is overwhelming. The reasons are many. But the fundamental theme here is that Banks are committing widespread fraud using the appearance of credibility just because they are banks.

Thus the strategy of pushing hard in discovery and persevering through adverse rulings appears to be getting increasing traction. Every time anyone, including judges, take a close look at this mess the conclusion is the same — the Banks’ foreclosures have been a sham. The homeowners still legally own their home and the lien is unenforceable or non-existent.

What part of the obligation of the borrower still exists? To whom is it payable? These are questions the Banks as servicers refuse to answer. It’s a simple set of questions that never had any bite to them until now.

From Lynn Symoniak

Mortgage Fraud

Bank of America
JP Morgan Chase
Lender Processing Services
WaMu Trusts
Washington Mutual
WMABS Trusts
WMALT Trusts

Action Date: August 6, 2011
Location: Jacksonville, FL

An examination of over 5,000 Mortgage Assignments to Washington Mutual
Trusts shows that these Trusts (WaMu, WMALT and WMABS) used Mortgage
Assignments signed by employees of JP Morgan Chase to foreclose. The
most prolific of the Chase signers, all from Jacksonville, Florida,
include Elizabeth Boulton, Margaret Dalton, Barbara Hindman, Patricia
Miner, Roderick Seda and Shelley Thieven. These Chase employees sign
as MERS officers on behalf of at least 30 different mortgage companies
to convey mortgages AND NOTES to Washington Mutual trusts that closed
years earlier.

In the vast majority of these cases, Bank of America is the Trustee.

Because the original loan documents are missing, Bank of America
allows Chase to make up new documents as needed to foreclose. The vast
majority of these Assignments state that the Trusts acquired these
mortgages in 2009 and 2010.

There are two separate frauds here:

1. not having the documents despite the promises to investors that the
documents were obtained and safely held; and

2. fabricating the replacement documents to foreclose.

In almost every case, Bank of America is the Trustee.

Did the FDIC just not notice any of this? There are thousands of these
specially-made Assignments signed by Chase employees for WaMu, WMALT
and WMABS trusts used across the country.

When Bank of America did not use documents fabricated by Chase to
foreclose, it used documents fabricated by LPS in Dakota County, MN.

New York AG Schneiderman Comes out Swinging at BofA, BoNY

From: Charles Cox []
Sent: Saturday, August 06, 2011 4:42 PM
To: Charles Cox
Subject: New York AG Schneiderman Comes out Swinging at BofA, BoNY


Posted on August 6, 2011 by Neil Garfield

New York AG Schneiderman Comes out Swinging at BofA, BoNY
Posted By igradman On August 5, 2011 (4:28 pm) In Attorneys General

This is big. Though we’ve seen leading indicators over the last few weeks that New York Attorney General Eric Schneiderman might get involved in the proposed Bank of America settlement over Countrywide bonds, few expected a response that might dynamite the entire deal. But that’s exactly what yesterday’s filing before Judge Kapnick could do.

Stating that he has both a common law and a statutory interest “in protecting the economic health and well-being of all investors who reside or transact business within the State of New York,” Schneiderman’s petition to intervene takes a stance that’s more aggressive than that of any of the other investor groups asking for a seat at the table.

Rather than simply requesting a chance to conduct discovery or questioning the methodology that was used to arrive at the settlement, the AG’s petition seeks to intervene to assert counterclaims against Bank of New York Mellon for persistent fraud, securities fraud and breach of fiduciary duty.

Did you say F-f-f-fraud? That’s right. The elephant in the room during the putback debates of the last three years has been the specter of fraud. Sure, mortgage bonds are performing abysmally and the underlying loans appears largely defective when investors are able to peek under the hood, but did the banks really knowingly mislead investors or willfully obstruct their efforts to remedy these problems? Schneiderman thinks so. He accuses BoNY of violating:

Executive Law § 63(12)’s prohibition on persistent fraud or illegality in the conduct of business: the Trustee failed to safeguard the mortgage files entrusted to its care under the Governing Agreements, failed to take any steps to notify affected parties despite its knowledge of violations of representations and warranties, and did so repeatedly across 530 Trusts. (Petition to Intervene at 9)

By calling out BoNY for failing to enforce investors’ repurchase rights or help investors enforce those rights themselves, the AG has turned a spotlight on the most notoriously uncooperative of the four major RMBS Trustees. Of course, all of the Trustees have engaged in this type of heel-dragging obstructionism to some degree, but many have softened their stance.

since investors started getting more aggressive in threatening legal action against them. BoNY, in addition to remaining resolute in refusing to aid investors, has now gone further in trying to negotiate a sweetheart deal for Bank of America without allowing all affected investors a chance to participate. This has drawn the ire of the nation’s most outspoken financial cop.

And lest you think that the NYAG focuses all of his vitriol on BoNY, Schneiderman says that BofA may also be on the hook for its conduct, both before and after the issuance of the relevant securities. The Petition to Intervene states that:

Countrywide and BoA face liability for persistent illegality in:
(1) repeatedly breaching representations and warranties concerning loan quality;
(2) repeatedly failing to provide complete mortgage files as it was required to do under the Governing Agreements; and
(3) repeatedly acting pursuant to self-interest, rather than
investors’ interests, in servicing, in violation of the Governing Agreements. (Petition to Intervene at 9)

Though Countrywide may have been the culprit for breaching reps and warranties in originating these loans, the failure to provide loan files and the failure to service properly post-origination almost certainly implicates the nation’s largest bank. And lest any doubts remain in that regard, the AG’s Petition also provides, “given that BoA negotiated the settlement with BNYM despite BNYM’s obvious conflicts of interest, BoA may be liable for aiding and abetting BNYM’s breach of fiduciary duty.” (Petition at 7) So much for Bank of America’s characterization of these problems as simply “pay[ing] for the things that Countrywide did.

As they say on late night infomercials, “but wait, there’s more!” In a step that is perhaps even more controversial than accusing Countrywide’s favorite Trustee of fraud, the AG has blown the cover off of the issue of improper transfer of mortgage loans into RMBS Trusts. This has truly been the third rail of RMBS problems, which few plaintiffs have dared touch, and yet the AG has now seized it with a vice grip.

In the AG’s Verified Pleading in Intervention (hereinafter referred to as the “Pleading,” and well worth reading), Schneiderman pulls no punches in calling the participating banks to task over improper mortgage transfers. First, he notes that the Trustee had a duty to ensure proper transfer of loans from Countrywide to the Trust. (Pleading ¶23). Next, he states that, “the ultimate failure of Countrywide to transfer complete mortgage loan documentation to the Trusts hampered the Trusts’ ability to foreclose on delinquent mortgages, thereby impairing the value of the notes secured by those mortgages. These circumstances apparently triggered widespread fraud, including BoA’s fabrication of missing documentation.” (Id.) Now that’s calling a spade a spade, in probably the most concise summary of the robosigning crisis that I’ve seen.

The AG goes on to note that, since BoNY issued numerous “exception reports” detailing loan documentation deficiencies, it knew of these problems and yet failed to notify investors that the loans underlying their investments and their rights to foreclose were impaired. In so doing, the Trustee failed to comply with the “prudent man” standard to which it is subject under New York law. (Pleading ¶¶28-29)

The AG raises all of this in an effort to show that BoNY was operating under serious conflicts of interest, calling into question the fairness of the proposed settlement. Namely, while the Trustee had a duty to negotiate the settlement in the best interests of investors, it could not do so because it stood to receive “direct financial benefits” from the deal in the form of indemnification against claims of misconduct. (Petition ¶¶15-16) And though Countrywide had already agreed to indemnify the Trustee against many such claims, Schneiderman states that, “Countrywide has inadequate resources” to provide such indemnification, leading BoNY to seek and obtain a side-letter agreement from BofA expressly guaranteeing the indemnification obligations of Countrywide and expanding that indemnity to cover BoNY’s conduct in negotiating and implementing the settlement. (Petition ¶16) That can’t be good for BofA’s arguments that it is not Countrywide’s successor-in-interest.

I applaud the NYAG for having the courage to call this conflict as he sees it, and not allowing this deal to derail his separate investigations or succumbing to the political pressure to water down his allegations or bypass “third rail” issues. Whether Judge Kapnick will ultimately permit the AG to intervene is another question, but at the very least, this filing raises some uncomfortable issues for the banks involved and provides the investors seeking to challenge the deal with some much-needed backup. In addition, Schneiderman has taken pressure off of the investors who have not yet opted to challenge the accord, by purporting to represent their interests and speak on their behalf. In that regard, he notes that, “[m]any of these investors have not intervened in this litigation and, indeed, may not even be aware of it.” (Pleading ¶12).

As for the investors who are speaking up, many could take a lesson from the no-nonsense language Schneiderman uses in challenging the settlement. Rather than dancing around the issue of the fairness of the deal and politely asking for more information, the AG has reached a firm conclusion based on the information the Trustee has already made available: “THE PROPOSED SETTLEMENT IS UNFAIR AND INADEQUATE.” (Pleading at II.A) Tell us how you really feel.

Note: Though the proposed BofA settlement is certainly a landmark legal
proceeding, there is plenty going on in the world of RMBS litigation aside from
this case. While I have been repeatedly waylaid in my efforts to turn to these
issues by successive major developments in the BofA case, I promise a roundup
of recent RMBS legal action in the near future. Stay tuned…]

Article taken from The Subprime Shakeout –

URL to article:

California reportedly subpoenas BofA over toxic securities – and – FLORIDA BAR OPINION- TOXIC TITLES, TENS OF THOUSANDS OF FORECLOSURE SALES IN PERIL

From: Charles Cox []
Sent: Thursday, October 20, 2011 7:55 AM
To: Charles Cox
Subject: California reportedly subpoenas BofA over toxic securities – and – FLORIDA BAR OPINION- TOXIC TITLES, TENS OF THOUSANDS OF FORECLOSURE SALES IN PERIL

California reportedly subpoenas BofA over toxic securities

California is trying to determine whether BofA and its Countrywide Financial subsidiary sold investments backed by risky mortgages to investors in California under false pretenses, a source says.

By Alejandro Lazo and E. Scott Reckard, Los Angeles Times

October 20, 2011

Investigators with the state attorney general’s office have subpoenaed Bank of America Corp. in connection with the sale and marketing of troubled mortgage-backed securities to California investors, according to a person familiar with the probe.

The state is trying to determine whether the bank and its Countrywide Financial subsidiary sold investments backed by risky mortgages to institutional and private investors in California under false pretenses, according to the person, who was not authorized to speak publicly and requested confidentiality.

The subpoenas, which were served Tuesday, come as talks continue for a broad foreclosure settlement by a coalition of state attorneys general and federal agencies. California walked away from those discussions with major banks more than two weeks ago, saying what the banks were offering was not enough and the state would pursue its own investigations.

California has left the door open to signing on to a bigger settlement, and the BofA subpoenas were seen as a move to exert further pressure on the bank. The person familiar with the matter would not say how much the securities in question cost investors.

"I think the California AG is seeking leverage here," Nancy Bush, an independent bank analyst and contributing editor to research firm SNL Financial, said. "They have backed out of whatever 50-state AG settlement that is coming down the road, and they want more from that settlement, so, you know, why not bring a little extra pressure to bear?"

State and federal officials are also trying to entice California back into talks, this week floating an idea for helping creditworthy homeowners refinance loans that are underwater, or higher than the values of the homes. But the subpoenas could also indicate that Atty. Gen. Kamala Harris is widening her own probe of big mortgage lenders.

Harris has created a mortgage fraud strike force with a mandate of looking into all aspects of mortgage fraud, including securitization.

Many of these investments plunged in value as the housing market collapsed. Under California’s False Claims Act, which makes it a crime to defraud the state, damages of up to three times the amount of the claim can be awarded if the victim was an institutional investor, such as one of the state’s pension funds.

Bank of America declined to comment.

The person familiar with the investigation would not name any of the alleged victims but said that the list would include institutional investors and could potentially include private individuals.

The subpoenas are the latest assault resulting from Bank of America’s 2008 acquisition of Countrywide Financial Corp. as the Calabasas-based lender, then the nation’s No.1 home lender, skidded toward bankruptcy.

Countrywide helped fuel the housing boom and bust by trying to out-compete all rivals in the high-risk niches of the business: subprime loans to people with bad or nonexistent credit histories, "liar" loans made without verifying income and assets, and mortgages that allowed borrowers to pay so little that their loan balances rose instead of falling.

The Calabasas-based goliath bundled up many of the riskiest loans to back private-label securities that proved toxic to banks and investors. It also lobbied heavily to relax the standards at government-sponsored mortgage finance companies Freddie Mac and Fannie Mae, which are now wards of the government and have cost taxpayers billions of dollars.

BofA has also been strapped with massive losses from legal settlements over Countrywide loans.

Within months of acquiring Countrywide, Bank of America agreed with then-California Atty. Gen Jerry Brown and his counterparts in other states to cut payments by as much as $8.6 billion on mortgages that the officials said had abused borrowers.

Other settlements included a 2010 promise to forgive up to $3 billion in principal for Countrywide borrowers in Massachusetts; an agreement last year to pay $600 million to former Countrywide shareholders to settle a securities fraud lawsuit; and billions of dollars in payments to Fannie Mae and Freddie Mac to settle demands for buybacks of flawed home loans.

Then last June, Bank of America disclosed an agreement to pay out $8.5 billion to 22 institutional investors to settle demands that it repurchase bonds backed by Countrywide mortgages, with an additional $5.5 billion set aside to beef up reserves for similar claims filed by other investors in mortgage bonds.

It wasn’t clear whether those litigation reserves would include funds to cover any liability for demands by Harris.


The United States Supreme Court has denied a writ of certiorari in a case involving MERS, refusing to reconsider a California court ruling, which upheld MERS’ right to initiate foreclosures.

From: Charles Cox []
Sent: Friday, October 14, 2011 7:02 AM
To: Charles Cox
Subject: The United States Supreme Court has denied a writ of certiorari in a case involving MERS, refusing to reconsider a California court ruling, which upheld MERS’ right to initiate foreclosures.

The United States Supreme Court has denied a writ of certiorari in a case involving MERS, refusing to reconsider a California court ruling, which upheld MERS’ right to initiate foreclosures.

After calming down, it was apparent this would be more likely than not to happen.

Suit alleges banks and mortgage companies cheated veterans and U.S. taxpayers

From: Charles Cox []
Sent: Wednesday, October 05, 2011 9:26 AM
To: Charles Cox
Subject: Suit alleges banks and mortgage companies cheated veterans and U.S. taxpayers

Suit alleges banks and mortgage companies cheated veterans and U.S. taxpayers

By Steve Vogel, Published: October 4

Some of the nation’s biggest banks and mortgage companies have defrauded veterans and taxpayers out of hundreds of millions of dollars by disguising illegal fees in veterans’ home refinancing loans, according to a whistleblower suit unsealed in federal court in Atlanta.

The suit accuses the companies, including Wells Fargo, Bank of America, J.P. Morgan Chase and GMAC Mortgage, of engaging in “a brazen scheme to defraud both our nation’s veterans and the United States treasury” of millions of dollars in connection with home loans guaranteed by the Department of Veterans Affairs.

“This is a massive fraud on the American taxpayers and American veterans,” James E. Butler Jr., one of the lawyers bringing the suit, said Tuesday.

Tens of thousands of the VA loans have gone into default or resulted in foreclosures, resulting in “massive damages” to the U.S. government, the suit alleges. The faulty loans will cost taxpayers hundreds of millions of dollars, with the costs rising as more VA loans go into default, according to the suit.

The two mortgage brokers who brought the suit said in an interview that they were instructed by the lenders not to show attorney’s fees on their estimates, but to add them to the title examination fee.

Under VA rules, lenders can charge veterans for recording fees and taxes, credit reports and other customary fees, but they are not allowed to charge attorney’s fees or settlement closing fees. “It was gut-wrenching to us, seeing the brazenness” of the lenders, broker Victor E. Bibby said.

The case involves refinanced loans that are available to retired or active-duty veterans on homes they already own. The program is aimed at giving veterans the opportunity to lower their interest rates or shorten the terms of existing home mortgages.

The whistleblower suit, which was unsealed Monday, seeks to recover damages and civil penalties on behalf of the U.S. government. The Justice Department has notified the U.S. District Court that it is not taking over the case but is reserving the right to intervene at a later date, according to court papers.

“The government has not yet made a decision about whether to intervene in this case,” Sally Quillian Yates, United States attorney for the Northern District of Georgia, said Tuesday. “As the case develops, we will continue to evaluate the merits of the case, and we will consider intervening . . . if it becomes appropriate to do so.”

“This is a very significant case,” Patrick Burns, spokesman for the nonprofit Taxpayers Against Fraud, said Tuesday. “It deals with widespread fraud from veterans who were personally pickpocketed for hundreds if not thousands of dollars, and the liability has been shoved on the federal government.”

During the past decade, more than 1.2 million of the refinanced loans have been made to veterans and their families, and up to 90 percent may have been affected by the alleged fraud, according to attorneys for the plaintiffs.

“The banks collected hundreds of millions of dollars in hidden fees from veterans, and they obtained hundreds of millions of dollars in loan guarantees they otherwise wouldn’t have received,” said Mary Louise Cohen, a Washington attorney who is also representing the whistleblowers.


ONEWEST SANCIONED FOR PRETENDING TO BE A LENDER – remember, motions to compel can go either way!

From: Charles Cox []
Sent: Thursday, October 06, 2011 6:57 AM
To: Charles Cox
Subject: ONEWEST SANCIONED FOR PRETENDING TO BE A LENDER – remember, motions to compel can go either way!


Posted on October 6, 2011 by Neil Garfield

(Onewest Bank Gets a Spanking)

Onewest Bank filed a motion to compel responses to Discovery against me.

Thanks to the Info on Neil’s site- I knew Onewest bank was not a real party in interest. I refused to respond to their bogus discovery.

I had to educate my Probate Attorney as to the issues.

It helped that I obtained email FOIA response from the FDIC that indicated their sale of the assests of INDYMAC bank in March 2009 did not include the “loan” that has been under litigation now for 25 months.

Instead of OWB attorneys getting their requested $2,300 in sanctions against me, as the Personal Representative of My 88 year old dads Estate- The Judge “got it” and sanction them for $750.

For the record- this California Judge relied on C.C.P 378(A) to based his decision to sanction the Onewest Bank “tall building” Attorney(s)

I hope this info will help others fighting the good fight here in California.

Stay Strong,

Steven Rosenberg


Replacing Economic Democracy with Financial Oligarchy

Michael Hudson: Replacing Economic Democracy with Financial Oligarchy

By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City and a research associate at the Levy Economics Institute of Bard College. Cross posted from CounterPunch.

Soon after the Socialist Party won Greece’s national elections in autumn 2009, it became apparent that the government’s finances were in a shambles. In May 2010, French President Nicolas Sarkozy took the lead in rounding up €120bn ($180 billion) from European governments to subsidize Greece’s unprogressive tax system that had led its government into debt – which Wall Street banks had helped conceal with Enron-style accounting.

The tax system operated as a siphon collecting revenue to pay the German and French banks that were buying government bonds (at rising interest risk premiums). The bankers are now moving to make this role formal, an official condition for rolling over Greek bonds as they come due, and extend maturities on the short-term financial string that Greece is now operating under. Existing bondholders are to reap a windfall if this plan succeeds. Moody’s lowered Greece’s credit rating to junk status on June 1 (to Caa1, down from B1, which was already pretty low), estimating a 50/50 likelihood of default. The downgrade serves to tighten the screws yet further on the Greek government. Regardless of what European officials do, Moody’s noted, “The increased likelihood that Greece’s supporters (the IMF, ECB and the EU Commission, together known as the “Troika”) will, at some point in the future, require the participation of private creditors in a debt restructuring as a precondition for funding support.”

The conditionality for the new “reformed” loan package is that Greece must initiate a class war by raising its taxes, lowering its social spending – and even private-sector pensions – and sell off public land, tourist sites, islands, ports, water and sewer facilities. This will raise the cost of living and doing business, eroding the nation’s already limited export competitiveness. The bankers sanctimoniously depict this as a “rescue” of Greek finances.

What really were rescued a year ago, in May 2010, were the French banks that held €31 billion of Greek bonds, German banks with €23 billion, and other foreign investors. The problem was how to get the Greeks to go along. Newly elected Prime Minister George Papandreou’s Socialists seemed able to deliver their constituency along similar lines to what neoliberal Social Democrat and Labor parties throughout Europe had followed –privatizing basic infrastructure and pledging future revenue to pay the bankers.

The opportunity never had been better for pulling the financial string to grab property and tighten the fiscal screws. Bankers for their part were eager to make loans to finance buyouts of public gambling, telephones, ports and transport or similar monopoly opportunities. And for Greece’s own wealthier classes, the EU loan package would enable the country to remain within the Eurozone long enough to permit them to move their money out of the country before the point arrived at which Greece would be forced to replace the euro with the drachma and devalue it. Until such a switch to a sinking currency occurred, Greece was to follow Baltic and Irish policy of “internal devaluation,” that is, wage deflation and government spending cutbacks (except for payments to the financial sector) to lower employment and hence wage levels.

What actually is devalued in austerity programs or currency depreciation is the price of labor. That is the main domestic cost, inasmuch as there is a common world price for fuels and minerals, consumer goods, food and even credit. If wages cannot be reduced by “internal devaluation” (unemployment starting with the public sector, leading to falling wages), currency depreciation will do the trick in the end. This is how the Europe’s war of creditors against debtor countries turns into a class war. But to impose such neoliberal reform, foreign pressure is necessary to bypass domestic, democratically elected Parliaments. Not every country’s voters can be expected to be as passive in acting against their own interests as those of Latvia and Ireland.

Most of the Greek population recognizes just what has been happening as this scenario has unfolded over the past year. “Papandreou himself has admitted we had no say in the economic measures thrust upon us,” said Manolis Glezos on the left. “They were decided by the EU and IMF. We are now under foreign supervision and that raises questions about our economic, military and political independence.” On the right wing of the political spectrum, conservative leader Antonis Samaras said on May 27 as negotiations with the European troika escalated: “We don’t agree with a policy that kills the economy and destroys society. … There is only one way out for Greece, the renegotiation of the [EU/IMF] bailout deal.”

But the EU creditors upped the ante: To refuse the deal, they threatened, would result in a withdrawal of funds causing a bank collapse and economic anarchy.

The Greeks refused to surrender quietly. Strikes spread from the public-sector unions to become a nationwide “I won’t pay” movement as Greeks refused to pay road tolls or other public access charges. Police and other collectors did not try to enforce collections. The emerging populist consensus prompted Luxembourg’s Prime Minister Jean-Claude Juncker to make a similar threat to that which Britain’s Gordon Brown had made to Iceland: If Greece would not knuckle under to European finance ministers, they would block IMF release of its scheduled June tranche of its loan package. This would block the government from paying foreign bankers and the vulture funds that have been buying up Greek debt at a deepening discount.

To many Greeks, this is a threat by finance ministers to shoot themselves in the foot. If there is no money to pay, foreign bondholders will suffer – as long as Greece puts its own economy first. But that is a big “if.” Socialist Prime Minister Papandreou emulated Iceland’s Social Democratic Sigurdardottir in urging a “consensus” to obey EU finance ministers. “Opposition parties reject his latest austerity package on the grounds that the belt-tightening agreed in return for a €110bn ($155bn) bail-out is choking the life out of the economy.” (Ibid.)

At issue is whether Greece, Ireland, Spain, Portugal and the rest of Europe will roll back democratic reform and move toward financial oligarchy. The financial objective is to bypass parliament by demanding a “consensus” to put foreign creditors first, above the economy at large. Parliaments are being asked to relinquish their policy-making power. The very definition of a “free market” has now become centralized planning – in the hands of central bankers. This is the new road to serfdom that financialized “free markets” are leading to: markets free for privatizers to charge monopoly prices for basic services “free” of price regulation and anti-trust regulation, “free” of limits on credit to protect debtors, and above all free of interference from elected parliaments. Prying natural monopolies in transportation, communications, lotteries and the land itself away from the public domain is called the alternative to serfdom, not the road to debt peonage and a financialized neofeudalism that looms as the new future reality. Such is the upside-down economic philosophy of our age.

Concentration of financial power in non-democratic hands is inherent in the way that Europe centralized planning in financial hands was achieved in the first place. The European Central Bank has no elected government behind it that can levy taxes. The EU constitution prevents the ECB from bailing out governments. Indeed, the IMF Articles of Agreement also block it from giving domestic fiscal support for budget deficits. “A member state may obtain IMF credits only on the condition that it has ‘a need to make the purchase because of its balance of payments or its reserve position or developments in its reserves.’ Greece, Ireland, and Portugal are certainly not short of foreign exchange reserves … The IMF is lending because of budgetary problems, and that is not what it is supposed to do. The Deutsche Bundesbank made this point very clear in its monthly report of March 2010: ‘Any financial contribution by the IMF to solve problems that do not imply a need for foreign currency – such as the direct financing of budget deficits – would be incompatible with its monetary mandate.’ IMF head Dominique Strauss-Kahn and chief economist Olivier Blanchard are leading the IMF into forbidden territory, and there is no court which can stop them.”

The moral is that when it comes to bailing out bankers, rules are ignored – in order to serve the “higher justice” of saving banks and their high-finance counterparties from taking a loss. This is quite a contrast compared to IMF policy toward labor and “taxpayers.” The class war is back in business – with a vengeance, and bankers are the winners this time around.

The European Economic Community that preceded the European Union was created by a generation of leaders whose prime objective was to end the internecine warfare that tore Europe apart for a thousand years. The aim by many was to end the phenomenon of nation states themselves – on the premise that it is nations that go to war. The general expectation was that economic democracy would oppose the royalist and aristocratic mind-sets that sought glory in conquest. Domestically, economic reform was to purify European economies from the legacy of past feudal conquests of the land, of the public commons in general. The aim was to benefit the population at large. That was the reform program of classical political economy.

European integration started with trade as the path of least resistance – the Coal and Steel Community promoted by Robert Schuman in 1952, followed by the European Economic Community (EEC, the Common Market) in 1957. Customs union integration and the Common Agricultural Policy (CAP) were topped by financial integration. But without a real continental Parliament to write laws, set tax rates, protect labor’s working conditions and consumers, and control offshore banking centers, centralized planning passes by default into the hands of bankers and financial institutions. This is the effect of replacing nation states with planning by bankers. It is how democratic politics gets replaced with financial oligarchy.

Finance is a form of warfare. Like military conquest, its aim is to gain control of land, public infrastructure, and to impose tribute. This involves dictating laws to its subjects, and concentrating social as well as economic planning in centralized hands. This is what now is being done by financial means, without the cost to the aggressor of fielding an army. But the economies under attacked may be devastated as deeply by financial stringency as by military attack when it comes to demographic shrinkage, shortened life spans, emigration and capital flight.

This attack is being mounted not by nation states as such, but by a cosmopolitan financial class. Finance always has been cosmopolitan more than nationalistic – and always has sought to impose its priorities and lawmaking power over those of parliamentary democracies.

Like any monopoly or vested interest, the financial strategy seeks to block government power to regulate or tax it. From the financial vantage point, the ideal function of government is to enhance and protect finance capital and “the miracle of compound interest” that keeps fortunes multiplying exponentially, faster than the economy can grow, until they eat into the economic substance and do to the economy what predatory creditors and rentiers did to the Roman Empire.

This financial dynamic is what threatens to break up Europe today. But the financial class has gained sufficient power to turn the ideological tables and insist that what threatens European unity is national populations acting to resist the cosmopolitan claims of finance capital to impose austerity on labor. Debts that already have become unpayable are to be taken onto the public balance sheet – without a military struggle, needless to say. At least such bloodshed is now in the past. From the vantage point of the Irish and Greek populations (perhaps soon to be joined by those of Portugal and Spain), national parliamentary governments are to be mobilized to impose the terms of national surrender to financial planners. One almost can say that the ideal is to reduce parliaments to local puppet regimes serving the cosmopolitan financial class by using debt leverage to carve up what is left of the public domain that used to be called “the commons.” As such, we now are entering a post-medieval world of enclosures – an Enclosure Movement driven by financial law that overrides public and common law, against the common good.

Within Europe, financial power is concentrated in Germany, France and the Netherlands. It is their banks that held most of the bonds of the Greek government now being called on to impose austerity, and of the Irish banks that already have been bailed out by Irish taxpayers.

On Thursday, June 2, 2011, ECB President Jean-Claude Trichet spelled out the blueprint for how to establish financial oligarchy over all Europe. Appropriately, he announced his plan upon receiving the Charlemagne prize at Aachen, Germany – symbolically expressing how Europe was to be unified not on the grounds of economic peace as dreamed of by the architects of the Common Market in the 1950s, but on diametrically opposite oligarchic grounds.

At the outset of his speech on “Building Europe, building institutions,” Mr. Trichet appropriately credited the European Council led by Mr. Van Rompuy for giving direction and momentum from the highest level, and the Eurogroup of finance ministers led by Mr. Juncker. Together, they formed what the popular press calls Europe’s creditor “troika.” Mr. Trichet’s speech refers to “the ‘trialogue’ between the Parliament, the Commission and the Council.”

Europe’s task, he explained, was to follow Erasmus in bringing Europe beyond its traditional “strict concept of nationhood.” The debt problem called for new “monetary policy measures – we call them ‘non standard’ decisions, strictly separated from the ‘standard’ decisions, and aimed at restoring a better transmission of our monetary policy in these abnormal market conditions.” The problem at hand is to make these conditions a new normalcy – that of paying debts, and re-defining solvency to reflect a nation’s ability to pay by selling off its public domain.

“Countries that have not lived up to the letter or the spirit of the rules have experienced difficulties,” Mr. Trichet noted. “Via contagion, these difficulties have affected other countries in EMU. Strengthening the rules to prevent unsound policies is therefore an urgent priority.” His use of the term “contagion” depicted democratic government and protection of debtors as a disease. Reminiscent of the Greek colonels’ speech that opened the famous 1969 film “Z”: to combat leftism as if it were an agricultural pest to be exterminated by proper ideological pesticide. Mr. Trichet adopted the colonels’ rhetoric. The task of the Greek Socialists evidently is to do what the colonels and their conservative successors could not do: deliver labor to irreversible economic reforms.

Arrangements are currently in place, involving financial assistance under strict conditions, fully in line with the IMF policy. I am aware that some observers have concerns about where this leads. The line between regional solidarity and individual responsibility could become blurred if the conditionality is not rigorously complied with.

In my view, it could be appropriate to foresee for the medium term two stages for countries in difficulty. This would naturally demand a change of the Treaty.

As a first stage, it is justified to provide financial assistance in the context of a strong adjustment programme. It is appropriate to give countries an opportunity to put the situation right themselves and to restore stability.

At the same time, such assistance is in the interests of the euro area as a whole, as it prevents crises spreading in a way that could cause harm to other countries.

It is of paramount importance that adjustment occurs; that countries – governments and opposition – unite behind the effort; and that contributing countries survey with great care the implementation of the programme.

But if a country is still not delivering, I think all would agree that the second stage has to be different. Would it go too far if we envisaged, at this second stage, giving euro area authorities a much deeper and authoritative say in the formation of the country’s economic policies if these go harmfully astray? A direct influence, well over and above the reinforced surveillance that is presently envisaged? … (my emphasis)

The ECB President then gave the key political premise of his reform program (if it is not a travesty to use the term “reform” for today’s counter-Enlightenment):

We can see before our eyes that membership of the EU, and even more so of EMU, introduces a new understanding in the way sovereignty is exerted. Interdependence means that countries de facto do not have complete internal authority. They can experience crises caused entirely by the unsound economic policies of others.

With a new concept of a second stage, we would change drastically the present governance based upon the dialectics of surveillance, recommendations and sanctions. In the present concept, all the decisions remain in the hands of the country concerned, even if the recommendations are not applied, and even if this attitude triggers major difficulties for other member countries. In the new concept, it would be not only possible, but in some cases compulsory, in a second stage for the European authorities – namely the Council on the basis of a proposal by the Commission, in liaison with the ECB – to take themselves decisions applicable in the economy concerned.

One way this could be imagined is for European authorities to have the right to veto some national economic policy decisions. The remit could include in particular major fiscal spending items and elements essential for the country’s competitiveness. …

By “unsound economic policies,” Mr. Trichet means not paying debts – by writing them down to the ability to pay without forfeiting land and monopolies in the public domain, and refusing to replace political and economic democracy with control by bankers. Twisting the knife into the long history of European idealism, he deceptively depicted his proposed financial coup d’état as if it were in the spirit of Jean Monnet, Robert Schuman and other liberals who promoted European integration in hope of creating a more peaceful world – one that would be more prosperous and productive, not one based on financial asset stripping.

Jean Monnet in his memoirs 35 years ago wrote: “Nobody can say today what will be the institutional framework of Europe tomorrow because the future changes, which will be fostered by today’s changes, are unpredictable.”

In this Union of tomorrow, or of the day after tomorrow, would it be too bold, in the economic field, with a single market, a single currency and a single central bank, to envisage a ministry of finance of the Union? Not necessarily a ministry of finance that administers a large federal budget. But a ministry of finance that would exert direct responsibilities in at least three domains: first, the surveillance of both fiscal policies and competitiveness policies, as well as the direct responsibilities mentioned earlier as regards countries in a “second stage” inside the euro area; second, all the typical responsibilities of the executive branches as regards the union’s integrated financial sector, so as to accompany the full integration of financial services; and third, the representation of the union confederation in international financial institutions.

Husserl concluded his lecture in a visionary way: “Europe’s existential crisis can end in only one of two ways: in its demise (…) lapsing into a hatred of the spirit and into barbarism ; or in its rebirth from the spirit of philosophy, through a heroism of reason (…)”.

As my friend Marshall Auerback quipped in response to this speech, its message is familiar enough as a description of what is happening in the United States: “This is the Republican answer in Michigan. Take over the cities in crisis run by disfavored minorities, remove their democratically elected governments from power, and use extraordinary powers to mandate austerity.” In other words, no room for any agency like that advocated by Elizabeth Warren is to exist in the EU. That is not the kind of idealistic integration toward which Mr. Trichet and the ECB aim. He is leading toward what the closing credits of the film “Z” put on the screen: The things banned by the junta include: “peace movements, strikes, labor unions, long hair on men, The Beatles, other modern and popular music (‘la musique populaire’), Sophocles, Leo Tolstoy, Aeschylus, writing that Socrates was homosexual, Eugène Ionesco, Jean-Paul Sartre, Anton Chekhov, Harold Pinter, Edward Albee, Mark Twain, Samuel Beckett, the bar association, sociology, international encyclopedias, free press, and new math. Also banned is the letter Z, which was used as a symbolic reminder that Grigoris Lambrakis and by extension the spirit of resistance lives (zi = ‘he (Lambrakis) lives’).”

As the Wall Street Journal accurately summarized the political thrust of Mr. Trichet’s speech, “if a bailed-out country isn’t delivering on its fiscal-adjustment program, then a ‘second stage’ could be required, which could possibly involve ‘giving euro-area authorities a much deeper and authoritative say in the formation of the county’s economic policies …’” Eurozone authorities – specifically, their financial institutions, not democratic institutions aimed at protecting labor and consumers, raising living standards and so forth – “could have ‘the right to veto some national economic-policy decisions’ under such a regime. In particular, a veto could apply for ‘major fiscal spending items and elements essential for the country’s competitiveness.’

Paraphrasing Mr. Trichet’s lugubrious query, “In this union of tomorrow … would it be too bold in the economic field … to envisage a ministry of finance for the union?” the article noted that “Such a ministry wouldn’t necessarily have a large federal budget but would be involved in surveillance and issuing vetoes, and would represent the currency bloc at international financial institutions.”

My own memory is that socialist idealism after World War II was world-weary in seeing nation states as the instruments for military warfare. This pacifist ideology came to overshadow the original socialist ideology of the late 19th century, which sought to reform governments to take law-making power, taxing power and property itself out of the hands of the classes who had possessed it ever since the Viking invasions of Europe had established feudal privilege, absentee landownership and financial control of trading monopolies and, increasingly, the banking privilege of money creation.

But somehow, as my UMKC colleague, Prof. Bill Black commented recently in the UMKC economics blog: “One of the great paradoxes is that the periphery’s generally left-wing governments adopted so enthusiastically the ECB’s ultra-right wing economic nostrums – austerity is an appropriate response to a great recession. … Why left-wing parties embrace the advice of the ultra-right wing economists whose anti-regulatory dogmas helped cause the crisis is one of the great mysteries of life. Their policies are self-destructive to the economy and suicidal politically.”

Greece and Ireland have become the litmus test for whether economies will be sacrificed in attempts to pay debts that cannot be paid. An interregnum is threatened during which the road to default and permanent austerity will carve out more and more land and public enterprises from the public domain, divert more and more consumer income to pay debt service and taxes for governments to pay bondholders, and more business income to pay the bankers.

If this is not war, what is?

MERS Has Trouble, Right There in Ohio, With a Capital ‘T’.(Martin Andleman Piece)

From: Charles Cox []
Sent: Tuesday, October 18, 2011 7:54 PM
To: Charles Cox
Subject: MERS Has Trouble, Right There in Ohio, With a Capital ‘T’.(Martin Andleman Piece)

MERS Has Trouble, Right There in Ohio, With a Capital ‘T’…

Geauga County’s prosecuting attorney, David P. Joyce has filed a class action lawsuit on behalf of the county “and all other similarly situated counties in Ohio,” against MERS and everybody else who used the MERS “scheme,” alleging that they violated Ohio law requiring that, “each and every mortgage assignment must be recorded in the proper Ohio county recording office,” and that by doing so, they avoided paying the counties the attendant recording fees.

Former Ohio Attorney General Marc Dann says the case does accurately represent what he referred to as “black letter law” in the State of Ohio for the last 200 years. He also described the case as being fairly narrow in that it’s really going after the recording fees that were not paid to each county when the defendants used the MERS system, but in doing so, the case is also going to have to establish the problems with the over all MERS operation.

According to Dann, “Ohio law requires that transfers of beneficial interest be recorded in the appropriate county, so either they avoided paying the fees to the counties for what was otherwise a valid transfer, or perhaps the transfers were invalid, in which case many, many foreclosures should not have been allowed to happen.”

Geauga County is a small, rural county near Cleveland, Ohio, and Dann, who has his law office in Cleveland, has been fighting for the rights of Ohio homeowners since serving as the state’s Attorney General in 2007-08. He says that if Geauga County’s prosecutor wins this case, he may be reopening thousands of foreclosures.

“This case asks court very directly whether the MERS system complies with state law. If it doesn’t then I’m going to go back and reopen all of the foreclosures alleging that the transfers were invalid,” says Dann without hesitation.

The class action lawsuit, however, is about damages, and they could be substantial. Dann says that the county recording fees are in the $30-$40 range, so in a state with over 80,000 foreclosures a year, and I have no idea how many mortgages that have been securitized over the last so many years, the amounts of fees avoided by easily reach into the millions.

The complaint alleges that the MERS system is a “scheme” designed to evade the required recording fees and the suit specifically seeks payment of those fees, saying that in the securitization process mortgages are assigned at least twice.

Also included in the complaint is the allegation that the defendants “systematically broke chains of land title throughout Ohio counties’ public land records by creating ‘gaps’ due to missing mortgage assignments they failed to record, or by recoding patently false and/or misleading mortgage assignments. Further the complaint states that the “defendants’ failure to record has eviscerated the accuracy of Ohio’s counties’ public land records, rendering them unreliable and unverifiable.”

I asked renowned consumer bankruptcy attorney Max Gardner what he thought would happen if the case were to be successful and he said it could put MERS out of business, or certainly make it a costly mistake for all involved.

“MERS INC. is a wholly owned subsidiary of MERSCORP and has no assets to speak of, and MERSCORP has some assets but it looks to me like a multi-million dollar judgment would be beyond their ability to pay,” Max said.

“So, I guess they’d need a bailout,” he quips. “If it even looks like the prosecutor is going to be able to win this case, it’ll definitely be time for MERS to make a call to Houston, you know to say, we’ve got a problem… and it’s a big problem,” Gardner adds.

Max says that, although this case is somewhat similar to a case previously filed in Minnesota, he’s not aware of “any other case alleging this theory filed by a state or county to-date.”

The complaint states that the “defendant’s purposeful failure” to record the mortgage assignments in compliance with state law has caused “far-reaching, devastating consequences for Ohio counties and their public land records.” And further, that those damages “may never be entirely remedied.” (Emphasis added.)

The lawsuit, which was filed on October 13, 2011, names as defendants: MERSCORP, INC. and Mortgage Electronic Registration System, Inc., but also names:

Home Savings and Loan Inc., Bank of America Corp, CCO Mortgage Corp, Chase Home Mortgage Corp, Citimortgage Inc, Corelogic, Corinthian Mortgage Corp, Everhome Mortgage Corp, GMAC, Guaranty Bank, HSBC Bank, MGIC Investors Services, Nationwide Advantage Mortgage, PMI Mortgage Services Company, Suntrust Mortgage, United Guaranty Corp, Wells Fargo Bank, and Doe Corporations – names and addresses unknown.

So, obviously this is one to watch, both for the homeowners in Ohio, and elsewhere. The ramifications, should the case be successful, could very well spread to other states, as the Ohio counties involved could receive hundreds of thousands or millions of much-needed dollars.

Once again, the arrogance of MERS and the industry that created it is astounding. I mean, to simply disregard out of hand, 200 years of Ohio state law, without a second thought, is remarkable. And when I read that it may never be entirely remedied, I can’t help but wonder what the ultimate cost of what was done will be and who will one day be forced to pay it.

From talking with Marc Dann and Max Gardner, it looks like this is a case that will cause great concern back at MERS headquarters, and all I can say is… it’s about time.

You can find a copy of the complaint attached.

Mandelman out.


Maybe it’s true…hmmm!

From: Charles Cox []
Sent: Wednesday, October 19, 2011 6:22 AM
To: Charles Cox
Subject: Maybe it’s true…hmmm!

I thought this was BS when I first saw it but the video below shows maybe I’m wrong:

California Governor and Attorney General Get served

Does anybody know about this organization? and what it means?

725,000 judgment against Wells Fargo for Misapplying $2,212 Mortgage Payment (from

From: Charles Cox []
Sent: Wednesday, October 19, 2011 12:34 PM
To: Charles Cox
Subject: 725,000 judgment against Wells Fargo for Misapplying $2,212 Mortgage Payment (from

See the attached:

725,000 judgment against Wells Fargo for Misapplying $2,212 Mortgage Payment

Below is a story of an attorney that has been battling the banks on behalf of many Northern Nevada homeowners for several years. His first experience with the banksters’ egregious conduct towards borrowers began in September 2004 and resulted in a $725K judgment against Wells Fargo Bank. The judgment was entered in April 2009 and is currently being appealed for the second time.

After almost 3 years of litigation, an internal electronic office memorandum dated on or about May 2005 contained an admission from Wells Fargo that it had mistakenly applied the mortgage payment to the wrong account and that it should correct its error. However, Wells Fargo refused to correct its admitted error and has begun a campaign trying to wear down and outlast his client. A campaign that began in September 2004 when it first misapplied his client’s mortgage payment (”$2200″). The action was filed in the federal district Court of Northern Nevada in May 2005 and was finally agreed to submit the matter to binding arbitration in January 2009.

An arbitration award was issued in February 2009 and I moved for an award of attorney’s fees and costs in the amount of about $500,000. In Wells Fargo’s opposition to the fee application, it admitted that “plaintiff’s fees and costs pale in comparison to the fees it paid.” Regardless the arbitrator award all of my client’s fees and costs. Wells Fargo then moved to have the arb award vacated pursuant to the Federal Arbitration Act in the district court. The district court refused to rule on its motion because the parties’ stipulation to proceed to binding arbitration was with the understanding that the losing party would appeal the award directly to the 9th Circuit.

In August 2009, Wells Fargo appealed the arbitration award. In February, 2011, the 9th Circuit remanded the motion back to the district court with instructions to rule on the motion. On August 17, 2011, the district court issued its memorandum of decision and order denying Wells Fargo’s motion. And, despite the standard for vacating an arbitration award being next to impossible to meet, Wells Fargo filed another appeal to the 9th Circuit on or about September 10, 2011.

The following is a summary of the attached award and findings of fact by the arbitrator, retired California Appellate Court Justice Michael Nott.

This dispute arose out of Wells Fargo inadvertently applying Johnson’s $2,212.00 September 2004 mortgage payment to the wrong mortgage account. Despite Wells Fargo having discovered and admitting its mistake on or about May 2005, Wells Fargo refuses to this very day, October 11, 2011 (over 7 years later), to remedy its admitted wrong doing and continues to employ 2 expensive law firms to employ expensive delaying tactics to postpone the inevitable payment of the arbitration award.

Retired California Appellate Court Justice Michael Nott after 3 1/2 days of trial and reviewing all the evidence and testimony presented by the Parties concluded that despite Wells Fargo having eventually admitted that it had been wrong all along, Wells Fargo refused to correct its error. In an overview of all the evidence presented, he concluded that this matter should have never taken so long to resolve. It just wasn’t complicated and, more poignantly, the evidence is overwhelming that Johnson provided sufficient documentary proof to back his assertion from Day 1 that all appropriate payments had been made to Loans 55 and 56. Id. In his final analysis, Justice Nott concluded that there wasn’t any reason to rush to reporting any negative comments to the CRAs (after the first report) until the problem was finally resolved. Justice Nott noted that Wells Fargo was servicing 8 of Johnson’s other mortgage loans and did not have to report any of them delinquent.

Justice Nott’s ultimate conclusion was that on the face of the documents presented at trial by Johnson, the investigation by Wells Fargo was inadequate, unreasonable, and untimely under the rules of the FCRA. Further, the yoyo reporting and clearing of late payments from October through May, and the continued foreclosure proceedings on Loan 56 were unnecessary and improper.

Johnson was awarded $260,910 including the attorney’s fees and costs he incurred from September 2004 through the end of the arbitration on or about February 2009. Almost 4 1/2 years of litigation that included, but not limited to, trips to California, North Carolina, and Iowa. Attorney fees awarded were $427,739, and cost in the amount of $37,069.

The attorney on the case is:

Tory M. Pankopf
A Foreclosure Defense Law Firm
10471 Double R Blvd., Suite C
Reno, Nevada 89521
Tel. (775) 384-6956
Fax (775) 384-6958



From: Charles Cox []
Sent: Monday, October 24, 2011 2:58 PM
To: Charles Cox

New post on Livinglies’s Weblog



by Neil Garfield

Many questions are piling in as lawyers start to drill down into the whole securitization scheme. The COMBO helps; yet in order to properly present the case in court you need to understand more than just your transaction. When I started the blog, and periodically thereafter, I made reference to a doctrine that was created in the context of tax litigation but which applies and has been applied in commercial situations. Sometimes you have to figure out the goal of the transaction in order to determine the parties. The doctrines that apply are the SINGLE TRANSACTION DOCTRINE and the STEP TRANSACTION DOCTRINE. The key question that is answered is what was the goal — or to put it another way, if you take out that piece, would the same transaction have otherwise still occurred in some other fashion?

Applied to debt, whether it is mortgage or otherwise, it is stated as follows: If investment bankers were not selling mortgage bonds to investors, would the loan have been otherwise been made? If the answer is no, there would have been no transaction, then the doctrines apply. If the doctrines apply, then the nature of the transaction is determined by its goal — the issuance of mortgage bonds, and all the exotic hedge and credit enhancements products that went along with it. Once that is determined, the real parties in interest emerge — the mortgage bonds were sold for the purpose of funding loans. So the loans and the bonds are the evidence of the total transaction. The borrowers and the investors are the real parties in interest. Most interpretations of RPIT come down to money — who gave it and who got it?

It might be that the more significant party in interest on the borrower side is not the homeowner at all, but rather the investment banker who created a promise to pay the investors under false pretenses. The homeowner did not know about that promise and certainly had no idea of the false pretenses. The issue is whether the mortgage, deed of trust or other security instrument is enforceable as to power of sale, foreclosure or otherwise. That can only be true if the right party has signed it and the right party enforces it. But it is also restricted to enforcement of a valid outstanding obligation, which is described in other instruments.

Usually, in a mortgage loan, the obligation is described in a note. In our current situation the obligation is described in a convoluted series of documents, some of the them fabricated, including the PSA,, prospectus etc. because the lender investor didn’t get a document from the homeowner, they received it from the investment banker. Thus the totality of the documentation with the investor and with the borrower might be used to describe the obligation — but then you have that pesky problem of Truth in Lending where all the documents must be revealed and disclosed to the borrower.

The only reasonable interpretation in securitization transactions is that the entire risk of loss would have shifted to a different party if the mortgage bonds were not being sold. This is what caused all the intermediaries to abandon normal underwriting standards. This ALL parties involved in ALL parts of the transaction are mere intermediaries or conduits and not possessed of any economic interest int he transaction, except those arising out of their role as a conduit. For example, if you write a check to Target to buy a TV, the goal was to purchase a TV. the fact that you wrote a check, that TARGET took the check tot heir bank, that the check was cleared through Federal Reserve or other intermediaries, and presented to your bank who sent it to their account processor which then provided the information as to wheth er the funds were present to cover the check, which led your bank authorizing payment is all irrelevant to the issue of the purchase of the TV.

In our current crisis, all those intermediaries are vying for the TV when one of them has any economic interest in it. In this example, the intermediaries would have that opportunity if Target didn’t care whether or not they got back their TV or didn’t care to fight about it for whatever reason. The vacuum and opportunity for disinterested intermediaries to pretend to be interested and pretend to have rights to the TV would be almost irresistible if you had no ethics, morality or conscience. The single transaction doctrine and step transaction doctrine were created to sort out such situations.

In the mortgage context, that is exactly what is happening. I predicted 4 years ago that litigation results would depend entirely upon whether the Banks could be successful at misdirecting the attention of the court to the parts of the transaction instead of the totality of it — the money processing through conduits and intermediaries — or if they were correctly instructed by borrowers that they now know that the real transaction was the purchase of a mortgage bond by investors and that the borrowers signature was merely incident to, and necessary for the completion of the transaction such that the investment banker would not be required to return the money to the investor.

Like Target in the example above, the investors have decided, so far, not to fight with the homeowner but rather to take their fight to the investment banker who sold them the bonds under false pretenses. But if the investors and borrowers did get together and settle the obligation in any manner or with any means, the issue of foreclosure would be over. There would be no obligation or at least there would be no default.

There are issues as to how to characterize the fraudulent foreclosures, unlawful detainer, seizure of personal property, etc. And the related question is whether those involve transfers of interests in property or if they involve instruments that are investments, securities or whatever. I have concluded as an expert that the documents of “transfer” (forgetting their foundation and authenticity for a moment) are in actuality part of a larger scheme whose end purpose was the issuance of multiple forms of securities or other instruments exempted from security regulation. Even if exempted, it doesn’t make it a real estate transaction.

It does make it a fraudulent scheme, if the the property owner was fraudulently induced into executing documents under the pretense that this was a conventional mortgage loan situation, when hidden from the property owner, it was really part of the loop of issuing “mortgage bonds” (certificated or noncertificated to investors. Since the goal was to get money from investors and then have them abandon their interests in the “mortgages” or the “property” the property aspects seem incidental to the real nature of the transaction.

In fact, when you take a step back, you will see that the borrowers were duped into becoming "issuers" of paper that they had no idea was going to be used for bonuses on Wall Street. Borrowers did not know that the amount loaned to them or for their benefit fell far short of the amount collected from investors.

Under that scenario, their was, as I have said from beginning, a single transaction. That transaction was between the investor and the property owner, which was undocumented since neither were in privity to a written instrument in which both of them appeared. Or it could be said that the note is one small part of the documentation, in which the PSA, A&A, prospectus, bond, etc. were in TOTAL, the documentation. If those documents are, in total, the only documentation of the transaction, then the note cannot be accepted into evidence without the rest of the evidence.

And the security instrument or agreement (Deed of trust) might only mention the note. If it does that, then it has referred to a piece of paper that does not have all the terms of the transaction. Since they were intentionally hiding the existence of a the securitization chain from the borrower, it can’t be said that the omission of the other documents was accidental. Thus the security instrument would be invalid on the most fundamental grounds — it does not secure the obligation — evidence of which is contained in multiple instruments, it attempts to secure only the note, which does not contain all the evidence of the obligation and terms of repayment.

As such, if that is accepted by the Court, the security instrument would need to be reformed in order to be effective. Whether that reformation would relate back to the original recording is a question I cannot answer. But in my opinion, no security instrument is capable of being enforced if it makes reference to a single document that is to be used as evidence of an obligation, the performance of which triggers the enforcement provisions of the security instrument — unless that single document contains all the evidence of the obligation.


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