Why Everyone (except SCOTUS) is Wrong About TILA Rescission

Posted on June 26, 2018 by Neil Garfield

All contrary arguments are erroneous since they would insert a contingency where the statute contains no room for any contingency. The language of the statute bars any such contingency when it says that the TILA Rescission is effective upon delivery, by operation of law. If anyone wants the statute to say or mean anything different they must get their remedy from the legislature, not the courts, who have no authority whatsoever to interpret the statute otherwise. The status of any case involving foreclosure is that it does not exist. Hence the court is left ONLY with the power to perform the ministerial act of dismissing the case for lack of jurisdiction.

Let us help you plan your TILA RESCISSION strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult.

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Get a Consult and TEAR (Title & Encumbrances Analysis and & Report) 202-838-6345. The TEAR replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

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

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So in answer to questions about putative “modifications”, eviction or unlawful detainer, bankruptcy, and TILA Rescission this is what I have written in response to some inquiries.

Should the rescission be recorded? Not necessarily but

YES. I would like to see it recorded. You need to check with the clerk in the recording office or an attorney who understands recording procedure. Generally recording a document with an old date must be attached to an affidavit that is recorded with the notice of rescission attached. The affidavit explains that the attachment was inadvertently not recorded at the time it was created.

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Should a copy of the notice of rescission be filed in the court record also?

YES. If there is any way to get the recorded document into the court record, it should be pursued.

This presents title issues because if you are recording this long after events have transpired, some of which are also recorded as memorializing transactions, fake or real. Any recorded instruments that purports to be a memorialization of a transaction before the rescission was recorded would generally be given priority.

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The lawyer sent me an answer to my notice of rescission. Now what?

Either file to enforce the duties to be performed (if you are within one year of the date of delivery of the notice of rescission), or file a quiet title action if the one year has expired. There are several different scenarios actually, but this is the one I would focus upon.

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I am getting kicked out of bankruptcy court. Now what?

Getting “kicked out” of BKR court probably means that you are back in the state court system which might open some opportunities for you to get more into the court record. (Like an old rescission).

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My property is being sold. Does that mean that I have to get out?

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They can’t get you out without filing an unlawful detainer (eviction in some jurisdictions) based upon an asserted change of title. There might be a period of time between the sale and the attempt to get you out of the home (eviction or unlawful detainer). If the property is sold to a “third party” they want want rent from you, which could allow you to stay.

The unlawful detainer action presents another opportunity to raise the issue of rescission, since the entire action is based upon a valid change of title. It also sets off potentially another round for appeal, especially on the issue of rescission. Res Judicata and Collateral Estoppel do not apply to jurisdictional issues. If the rescission was mailed then by operation of the law the note and mortgage are void.

The defense is ordinarily that the “sale” was a fabrication based upon fictional claims and was contrary to the notice of rescission, which voided the note and mortgage upon which they were relying. The time for challenging the rescission has long passed. Hence all enforcement actions after the date of the 2009 rescission are void since they were based upon various claims attendant to paper instruments that were void, effective the day of delivery of the rescission.

Note that delivery of TILA Rescission notice is complete when dropped in a USPS mailbox and your testimony that it was sent via US Postal Service is all that is necessary as foundation.

I sent 2 notices of rescissions. Is that better or worse for me?

If I was defending against your claim of rescission I would argue that sending the 2016 rescission was either an admission that the earlier one had not been sent or that it was a concession that, for whatever reason, the 2009 rescission notice had been abandoned.

Hence I suggest you put very little emphasis on the new rescission and maximum emphasis on the old rescission.

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I sent the rescission less than 3 years after the modification but more than 3 years since the alleged consummation. Hoes my rescission affect my loan in that instance?

In most cases “modifications” are not treated as new loans. But the fact that something is called a modification and it really changes everything including the “lender” it may be possible to characterize it as a new loan subject to TILA Rescission. TILA Rescission hinges on whether the “modification” was a new loan — a fact, we would argue — that must be determined by trial. Since intent is part of the analysis of a contract, this could present another opportunity to force them to admit they don’t know the identity or intent of the creditor and whether said creditor had given them authority to make a new contract.

And the underlying narrative for this approach is that as a new contract, the “lender” was required to comply with disclosure requirements at the time of the new contract, thus triggering the three day right of rescission and the the three year limitation. Under my theory, based on Jesinoski, it doesn’t matter whether the three years has expired or not.

We know for certain that the notice of rescission is effective upon mailing; it is not based upon some contingent event or claim or court order. The date of consummation is itself a factual issue that can be in the pleading of the creditor (who is the only one with standing, the note and mortgage having been rendered void) claiming that the notice of rescission should be vacated based upon the three years, the date of consummation etc. 

Any alternative theory that puts the burden on the property owner would be contrary to the express wording of the statute and the SCOTUS ruling in Jesinoski. The statute 15 USC §1635 and SCOTUS are in complete agreement: there is no law suit required to make rescission effective. It would make the statutorily defined TILA Rescission event indefinite, requiring a court ruling before any rescission would be treated seriously. In other words, the opposite of what the statute says and the opposite of what SCOTUS said in Jesinoski. 

All contrary arguments are erroneous since they would insert a contingency where the statute contains no room for any contingency. The language of the statute bars any such contingency when it says that the TILA Rescission is effective upon delivery, by operation of law. If anyone wants the statute to say or mean anything different they must get their remedy from the legislature, not the courts, who have no authority whatsoever to interpret the statute otherwise. The status of any case involving foreclosure is that it does not exist. Hence the court is left ONLY with the power to perform the ministerial act of dismissing the case for lack of jurisdiction.

All this is important because we ought to be heading toward any defensive strategy that reveals the absence of a creditor. We are betting that the fight to conceal the name of the creditor is a cover for not knowing the the identity of the creditor, hence fatally undermining the authority as holder, servicer, trustee or anything else.

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What if consummation never occurred?

It may turn out that consummation between the parties to the note and mortgage never occurred. It’s important to remember that would mean the rescission is irrelevant since the loan contract does not exist. But such a finding by a court of competent jurisdiction would negate the legal effect of the note and mortgage; this is true as long as the note was not purchased for value in good faith by a buyer without knowledge of the borrower’s defenses.

In that case, the burden does shift to the homeowner and it is entirely possible that under that scenario there could be no consummation but nevertheless homeowner liability would continue on the falsely procured note and potentially the mortgage as well. The reason is simple: that is what the State statute says under Article 3 and Article 9 of the UCC, as adopted by all 50 states. The homeowner’s remedy in such a scenario would be limited to actions for damages against the intermediaries who perpetrated the the fraudulent and fictitious “transaction” in which the named lender failed to loan anything.

Filed under: BURDEN OF PROOF, foreclosure, jurisdiction, legal standing, MODIFICATION, Motions, originator, Pleading, quiet title, sham transactions, TILA rescission | Tagged: , , , , , , , , | 5 Comments »

NJ Supreme Court: If Borrower Abides By Terms Of Settlement Agreement, Lender Must Modify Mortgage

Posted on August 2, 2017 by Neil Garfield

Blog Pete’s Take

 http://www.lexology.com/library/detail.aspx?g=06b8e212-01e0-4a00-aacf-87b6af32b34d

USA August 1 2017

Lawsuits arising out of foreclosures and mortgage modifications are common. (Even more common than lawsuits about gyms or health clubs if you can believe that.) Nearly every day there is a decision from the Appellate Division arising out of a residential foreclosure. Most of these fall into the same category — borrower defaults and loses home through foreclosure then challenges lender’s standing to foreclose after the fact — but some are more interesting. That was the case with GMAC Mortgage, LLC v. Willoughby, a decision released yesterday by the New Jersey Supreme Court involving a mortgage modification agreement entered into to settle a foreclosure lawsuit.

Almost two years ago, I wrote a post about Arias v. Elite Mortgage, a lawsuit over the alleged breach of a mortgage modification agreements. In that case, borrowers entered into a mortgage modification agreement with their lenders that included a Trial Period Plan (“TPP”). As the name suggests, a TPP requires borrowers to make reduced monthly payments in a timely manner for a trial period, after which, if they make the payments, the lender agrees to modify their mortgage. In Arias, the Appellate Division held, as a matter of first impression, that if a borrower makes the trial payments under the TPP, the lender must modify the mortgage, and if it doesn’t, the borrower can sue for breach. However, the holding was purely academic because the borrower in that case failed to make one of the trial payments in a timely manner so it could not sue.

In GMAC Mortgage, the New Jersey Supreme Court faced a similar situation with a much less academic result.

In GMAC Mortgage, plaintiff foreclosed on defendant’s home after defendant defaulted on her mortgage. After a sheriff’s sale was scheduled for the home, the parties entered into mediation under New Jersey’s Residential Mortgage Foreclosure Mediation Program, which was set up in response to the collapse of the housing market several years ago.

At mediation, the parties entered into a settlement agreement that “gave [defendant] a path to save her home through a ‘permanent modification’ of [her] loan.” The agreement, the terms of which were written by plaintiff’s lawyer on a form provided by the courts, offered defendant a “trial to permanent modification plan contingent on her signed modification documents and an initial down payment.” Specifically, the agreement required defendant to make a $6,000 down payment within a few weeks of the settlement and to make monthly payments of $1,678.48 for the next year. The agreement further stated that if all trial payments were made, plaintiff plaintiff would “make modification permanent,” but “if defendant missed any payments, plaintiff would “continue with foreclosure.”

Defendant complied with the agreement. She made the down payment and the required monthly payments. One year after signing the settlement agreement, however, she received a letter from plaintiff with a “wholly new modification agreement” that was being provided to her “because she ‘successfully completed the requirements of [her] Special Forbearance Program.” The proposed terms were not as favorable to defendant as the original agreement — they shortened the maturity date and increased the monthly payments. Defendant did not sign the agreement but did begin making the higher monthly payments.

Plaintiff sent defendant two more modification agreements, each with terms slightly different than the original agreement. When defendant refused to sign them, plaintiff “advised her that her loan would be ‘referred to foreclosure.’”By this point, defendant had paid plaintiff more than $58,000 under the original settlement agreement.

In response to plaintiff’s notice, Defendant moved to enforce the original settlement agreement. Rather than ruling on the motion immediately, however, the court first sent the parties back to mediation. At mediation, plaintiff proposed a new settlement, consisting of a new down payment, higher interest rate, and new monthly payments. As the deadline to accept the offer neared, defendant provided plaintiff with a cashier’s check for the down payment and verbally agreed to the terms. But she never signed the loan modification documents, so plaintiff revoked the offer.

The trial court then denied defendant’s motion to enforce the settlement, holding that it was a “provisional settlement as evidenced by [defendant’s] submission to subsequent mediation sessions.” Shortly thereafter, plaintiff obtained final judgment of foreclosure and the property was sold to plaintiff at sheriff’s sale for $100.

Defendant appealed, but the Appellate Division affirmed. The New Jersey Supreme Court then granted certification and reversed.

The Supreme Court noted that the parties “[did] not dispute whether they entered a settlement; they dispute[d] whether it was a provisional or permanent loan modification agreement.” It then held that “[a]lthough the Agreement in this case [was] not free of all ambiguity, the terms [were] nevertheless sufficiently definite and detailed to indicate, with reasonable certainty, that the parties intended a permanent loan modification.” In support of its decision, the Supreme Court emphasized the plain language of the agreement, which stated that if defendant made “all trial payments,” plaintiff would “make modification permanent.” Defendant made all of the trial payments, therefore plaintiff was required to make the modification agreement permanent. The Supreme Court further noted that “nothing in [the] Agreement suggested that, after a period of twelve months, [plaintiff] could unilaterally demand that [defendant] agree to a new loan modification on different terms that those that appeared in the [original agreement].”

The Supreme Court was not persuaded by plaintiff’s argument, which the trial court relied upon to deny defendant’s motion to enforce the settlement, that defendant’s participation in mediation sessions and other negotiations with plaintiff after signing the original agreement prevented defendant from enforcing the agreement. Rather, the Supreme Court wrote these efforts off as being the product of desperation on defendant’s part, observing: “[Defendant struggled, perhaps not deftly, to save her home by continuing with meditations and negotiations because of her failure to secure the relief to which she was entitled by the chancery court.”

Having ruled that defendant should have been entitled to enforce the original settlement agreement, the Supreme Court remanded the case to the trial court to “fashion a suitable and equitable remedy.” It noted that defendant would not be entitled to specific performance — i.e., the return of her home — if her home was sold to a bona fide, good faith purchaser. But, she might be entitled by damages. The Supreme Court thus left “to the sound discretion of the chancery court the determination whether [defendant] suffered financial damages and, if so, the amount.”

Filed under: foreclosure | Tagged: , , , | 2 Comments »

Fannie and Freddie Launch Flex Modification Program: No Paperwork Required in Some Cases

Posted on February 21, 2017 by Neil Garfield

By the Lending Lies Team

Fannie Mae and Freddie Mac have launched a new loan modification program for troubled mortgages known as “Flex Modification.”  The GSE’s have an issue with rising defaults and questionable paperwork and the Flex Modification allows them to modify the underlying defective “loan” and gloss over the false endorsements, assignments and chain of title issues.  Brilliant!

The new flexible loss mitigation tool is a combination of the impotent HAMP,  the Standard Modification, and the Streamlined Modification, and will replace the trio as early as March 2017.

Loan servicers are beginning to implement the Flex Modification at that time, but will be required to participate starting October 1st, 2017.

The Home Affordable Modification Program (HAMP) expired at the end of December.

How the Flex Modification Works

It is obvious that Fannie and Freddie are attempting to lure as many homeowners in or near default inot the Flex Modification program.  Unlike the original HAMP modifications that required burdensome amounts of paperwork (that was intentionally lost), the required borrower documentation needed to get a loan modification under this new program is surprisingly minimal.

A major problem with HAMP was the complicated paperwork and long, drawn out processes.  Not to mention that loan servicers who had little incentive to modify a loan when they could foreclose, typically threw the homeowner’s application into the trash.

HAMP has been revised to make it easier for borrowers to get relief, and it appears those lessons have been applied to the new Flex Modification, at least in theory.  However, the reality is that a servicer who illegally forecloses on a home receives a financial windfall, compared to a paltry fee for modifying.

Fannie and Freddie claim that the Flex Modification will aim to lower monthly housing payments to help at-risk, delinquent borrowers avoid foreclosure.


Those who are less than 90 days behind on their mortgage must submit a Borrower Response Package (BRP) in order to be evaluated for a Flex Modification, which will target a 20% monthly payment reduction and a 40% Housing Expense-to-Income (HTI) Ratio.  Why such aggressive measures when the previous HAMP program would rarely reduce principal or monthly payments?  The GSE’s have always been hostile to homeowners wishing to modify preferring to foreclose.  Less than 40% of all applicants were given loan modifications.

Freddie Mac noted that a “high percentage” of those at least 60 days delinquent would be eligible, and in some cases it could also be an option for those who are current on the mortgage or less than 60 days late.

However, that latter group would need to occupy their homes in order to get relief.

For those more than 90+ days delinquent, the program targets the same 20% payment reduction, but requires no “borrower documentation.”

Likely this program will be used to grease the runways, as Timothy Geitner of the Fed admitted back in 2008 when HAMP was devised.   It appears that the GSEs know they have MAJOR issues with the underlying loans they guarantee and they are resorting to issuing modifications to wipe the slate clean.  I predict that there is language in the agreement that states the homeowner will not sue their servicer or the GSE’s once the loan is modified.  The GSEs, Fed and OCC are not benevolent entities- they are cold, calculating bankers where profit is all that matters.

In other words, they realize you’re in imminent danger of foreclosure and that they have major legal liabilities so they’re going to make it easy for you to get assistance.   Without knowing more about the program I can already tell it doesn’t pass the sniff test.

Perhaps this program will actually provide relief by lowering monthly mortgage payments.  It is likely that borrowers will be incentivized to hit the 90 day plus delinquent status to take advantage of the easier modification option also.  Not that it matters because the entire program appears to be created to “fix” loans that are damaged beyond repair.

It is interesting that many loan servicers are exiting the market while the GSEs are attempting to paper over their fraudulent history.  There are unseen forces in the background that are influencing change.  It appears that servicers and faux lenders are running scared or do they know something we don’t?

In any case, the program will also allow for principal forbearance to an 80% mark-to-market loan-to-value ratio (MTMLTV), but this amount must not exceed 30% of the unpaid principal balance.

Some key changes from the Standard Modification include:

• Housing-to-income ratio for borrowers less than 90 days delinquent changed from less than/equal to 55% to 40%


• No amortization choice for borrowers with an MTMLTV ratio of less than 80%


• Must now forbear principal down to a 100% MTMLTV ratio rather than the prior 115%

Flex Modification Eligibility

– Mortgage must be owned or guaranteed by Fannie Mae or Freddie Mac (GSEs do not own loans)


– Must be 60 or more days delinquent unless owner-occupied and in imminent default


– Must submit a Borrower Response Package (will the servicer actually process the package when they have more incentive to foreclose than modify?)


– Must have an eligible hardship


– Must verify income


– Must have been originated 12 months prior to evaluation date


– Must target a 20% principal and interest payment reduction and 40% front-end DTI


*If 90 days+ delinquent, a Borrower Response Package is not required, and servicer is not required to confirm a borrower’s hardship or income.

Ineligible for Flex Modification

– FHA, VA, and USDA loans


– Mortgages subject to recourse


– Mortgages secured by second homes or investment properties less than 60 days late


– Mortgages that have been modified three or more times previously


– Mortgages approved for a short sale or deed-in-lieu


– Mortgages under a different modification program


– Mortgages that don’t make it through the trial period or aren’t brought current

Filed under: foreclosure | Tagged: , , , , | 13 Comments »

Renewing the Statute of Limitations Accidentally: Modifications and Payments

Posted on June 10, 2016 by Neil Garfield

It seems apparent to me that the banks are sidestepping the statute of limitations issue by getting homeowners to renew payments after the statute has run. Given the confusion in Florida courts it is difficult to determine with certainty how the statute will be applied. But the execution of a modification agreement would, in my opinion, almost certainly waive the statute of limitations, particularly since it refers to the part of the alleged debt that was previously barred by the statute. It would also, in my opinion, reaffirm a discharged debt in bankruptcy.

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

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There are several reasons why servicers are offering modifications and several other reasons why they don’t.

My perception is that the main reason for offering the modification is that the servicer is converting the ownership of the debt from the investors to the servicer and by reference to an empty trust with no assets. HAMP modifications are virtually nonexistent statistically. “In house” modifications are what they are offering; that is code for “it’s our loan now.” That scenario leaves the servicer with rights to the debt that didn’t legally exist before — but subject to separate, private agreements with the Master Servicer who is willing to pay the servicer for their apparent “services” but not willing to share in the windfall profits made by a party who now owns a loan in which they had no financial interest before the execution of the modification.

This is a good alternative to stealing from the investors by way of false claims for “Servicer advances” where the money, like all other deals in the false securitization chain, comes from “investments” that the investors thought they were making into individual trusts. And by the way this part explains why they don’t offer modifications — the Master Servicer can only apply is false claim for “recovery” of servicer advances when the property is liquidated.

A second reason for applying pressure to a homeowner to sign more papers they don’t understand is to get the homeowner to (1) agree or reaffirm the debt, thus restarting the statute of limitations from where it had originally left off and (2) to get the homeowner to make at least some payments, thus reaffirming the debt for purposes of both bankruptcy and the statute of limitations. This explains why they take three “trial” payments and then deny the “permanent” modification after they already announced the homeowner was “approved.”

In this sense there is no underwriting done. There is only an evaluation of how the Master Servicer can make the most money. This also is an example of why I say that the interests of servicers are adverse to the investors who have already been screwed. Forced sale doesn’t just artificially limit the recovery, it virtually eliminates recovery for the investor while the servicers take the money and run.

And a third reason for coercing the homeowner into a modification agreement that is guaranteed to fail is that the homeowner has either waived defenses and claims or has created the conditions where waiver could be asserted.

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Filed under: foreclosure | Tagged: , , , , , , , | 11 Comments »

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

Posted on May 16, 2016 by Neil Garfield

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Filed under: foreclosure | Tagged: , , , , , , , | 33 Comments »

Modification is An Illusion: 80%+ turned down

Posted on August 3, 2015 by Neil Garfield

Livinglies Team Services: see GTC HONORS Services, Books and Products

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For more information please email us at gtchonors.llblog@gmail.com or call us at 954-495-9867 or 520-405-1688

This is not legal advice on your case. Consult a lawyer who is licensed in the jurisdiction in which the transaction and /or property is located.

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One of the reasons that I never started up a division to process loan modifications is that although I could easily have made a ton of money, most of them would fail and I knew it. Every once in a while I accept an engagement to help negotiate the modification but the essential problem that everyone is ignoring is that we are not dealing with the creditors AND we are not dealing with an authorized representative of an ACTUAL creditor. So I think that the entire modification scene is a PR stunt and I won’t play.

One of the interesting statistics shows that over half of all homeowners in trouble were not seeking to get out of a legitimate debt. Quite the contrary. They were seeking to make what they knew was invalid, into a valid binding contract with reasonable terms. — Four million of them! So much for deadbeat borrowers.

And if the experience had not been so frustrating with “incomplete applications” and “lost applications” and then turned down because “investor rejected” probably all of the foreclosures would have been worked out except for a few and the economy would not have tanked eliminating jobs for workers whose pension funds had been invested and lost in the mortgage backed securities scheme. In a sense many, if not most working people were foreclosing on themselves!

Practice Suggestion: I wonder whether the worker with pension rights and benefits could demand information on which REMIC Trusts issued what securities to their Pension Fund or the mutual funds in which their 401k was invested.

But instead of good faith efforts to modify, they got lies, deceit, fabrication and fraudulent schemes to tilt the borrower into a foreclosure that didn’t need to happen. And in so doing they killed both the borrower’s equity and the REAL creditor’s equity in the loan, driving down prices with their control of the market just as they had artificially increased the price of homes far above their values during the boom.

Why would the Banks force themselves to lose money by rejecting modifications and forcing foreclosure and depressing market prices? Simple — that is not what happened. They didn’t lose money. They made money. And they suffered no losses from the write down of mortgages that mostly could have been saved. That is what happens when Wall Street gets unfettered discretion to do anything they want without a regulator looking over their shoulder and without law enforcement carting them off to jail.

In the end it doesn’t matter in our bully culture if the investors (pension funds) lost money, it doesn’t matter if 18 million people have been displaced from their homes, their lives and their jobs. What matters to Wall Street is how much money they can make regardless of how they do it and who gets hurt. The Obama administration is still drinking the Cool-aid along with his predecessor in office, Bush. Neither of them had a clue about finance and they still take their advice and information from the same people who screwing everyone.

Filed under: foreclosure | Tagged: | 39 Comments »

Modification Offers Are Enforceable Contracts

Posted on January 8, 2015 by Neil Garfield

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

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We have all seen it, heard and experienced it over and over again. In this case Wells Fargo offered a “temporary” modification, it was accepted and the trial payments were made. Wells Fargo said the modification offer and acceptance lacked consideration — the height of arrogance since they have no transaction with consideration supporting their claim of ownership of the debt, note or mortgage.

Wells disavowed the settlement and went forward with foreclosure. The homeowner’s claim to enforce the modification contract was dismissed for failure to state a cause of action, agreeing with Wells Fargo that there was no consideration. The appellate court reversed stating that there was consideration and that it was more than adequate. There are now hundreds of cases in which trial judges and appellate courts have enforced the modification agreements.

Here is one you can look at:

http://www.ca4.uscourts.gov/Opinions/Unpublished/132390.U.pdf

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