Tag Archives: MERS

MERS AND ITS ROLE AS A PLAINTIFF AND DEFENDANT … OR THE LACK THEREOF!

(OP-ED) — This is an educational overview as to what has taken place in the American legal forums in the last two decades and my take on what it all means:

UPDATE: Please see my comments to Lori’s question in the comments section as to Bank of America’s claimed “successor by merger” BS to BAC Home Loans Servicing LP fka Countrywide Home Loans Servicing, LP, especially using MERS to hide the real truth!

HISTORICAL PERSPECTIVE

On January 1, 1999, Mortgage Electronic Registration Systems, Inc. and its parent MERSCORP, Inc. (“MERSCORP”), surfaced as a new brainchild of the mortgage industry after two previously-failed efforts to put an effective electronic database into useable form.

MERSCORP is the “brain” part of  the “brainchild” … Mortgage Electronic Registration Systems, Inc. is the “child” part of the “brainchild”.

The acronym known as “MERS” was attached to the “brainchild” to further confuse the system of things from being able to specifically identify whether the parent or the baby bastard child is coming into play at any given moment.

According to research done by Robert M. Janes, J.D. (retired attorney) in his work SHELLGAME MERS, Contrived Confusion (available at esprouts.com), the “MERS” known in mortgages and deeds of trust as Mortgage Electronic Registration Systems, Inc. HAS NO “MEMBERS”, despite what attorneys for “MERS” have told judges all across America.  The entire system of things has bought into this crap.  Our entire judicial system has been permeated with lies.  As Hitler’s propaganda minister Joseph Goebbels stated (paraphrased), “tell a lie long enough and often enough and people will come to believe it as truth.”

MERSCORP however owned everything known as the MERS® System, up until the time that Intercontinental Exchange, Inc. (“ICE”, who also owns the New York Stock Exchange) bought MERSCORP and all of its assets and transferred all of the MERS servers to Mahwah, New Jersey, where ICE’s data servers are located.  This happened in October of 2018.  From February of 2012 until October of 2018, MERSCORP was merged into MERSCORP Holdings, Inc. and operated as such until ICE acquired it.

MERSCORP had all of the “Members” who technically are users and subscribers of its “MERS® System”.   They have an executory contract with MERSCORP.  As far as I can tell, when ICE acquired MERSCORP Holdings, Inc., ALL of the databases, memberships and every other facet of MERS went with the sale and transfer to ICE.

These latest developments also beg the question: Do I have to sue Intercontinental Exchange, Inc. if I want to go after MERSCORP Holdings, Inc., since ICE now owns MERSCORP?   That’s a question for counsel to answer; however, I personally wouldn’t sue either one of them, knowing what I know about NOT giving MERS a “leg up” … and given the fact that MERSCORP is now backed by the power of Wall Street funding!

MERS WANTS TO BE “ALL THINGS TO ALL PEOPLE”

Unfortunately for MERS, one State (Tennessee)’s Supreme Court gutted MERS’s business model like a chicken in the Ditto decision.  See attached:

MERS v DITTO_TN Supreme Court rules against MERS!

Unfortunately for the other 49 States, their respective Supreme Courts did not issue a ruling as succinctly as Tennessee’s ruling was.   Only Washington (Bain), Oregon (Niday and Brandrup), Montana (Pilgeram), Maine (Greenleaf and Saunders), New York (Agard, Bresler, Collymore and Silverberg), Kansas (Kesler), Arkansas (SW Homes), Nebraska (Dept. of Banking and Finance) and Missouri (Bellistri) did some damage to the MERS® System, but nowhere near the damage inflicted in Ditto.

Sadly, for the rest of the country, especially in Minnesota (Jackson) and Michigan (Sauerman), where the foregoing cases have propelled the MERS business model into fruition, homeowners in those states (except Minnesota and Michigan, where homeowners are essentially f**cked) have a long, uphill battle against any securitized trust that made use of the MERS® System to do its bidding.

REPUDIATION AGREEMENTS: A POTENTIAL WAY OUT

If you were lucky enough to have a mortgage loan originated by New Century Mortgage Corporation or Fieldstone Mortgage Company, you may have a legal solution as a possibility to consider in maneuvering through the legal pitfalls created by the use of MERS in your mortgage security instrument.

To date, to my knowledge and research, these two entities were the only two entities that had executory contracts with MERSCORP (or any form thereafter) repudiated their contracts with the MERS® System and its owner/parent MERSCORP Holdings, Inc.    See the attached below:

NCMC Notice of Repudiation

The foregoing repudiation was validated in the case of DiLibero v. MERS in Rhode Island.  I like to use this case because the Rhode Island Supreme Court likes to rub homeowners’ noses in MERS’s bullshit every chance it gets because Little Rhody’s lower courts have bought into the lies propounded by MERSCORP-retained attorneys.

See the case here: DiLibero v MERS_2015-13-190

In a previous post, I talked about the positive outcome of using the repudiation agreement as a means to assert the lack of standing of the Plaintiff Bank, unlike what happened in the Cruz v MERS case, where Cruz lost because he didn’t use the repudiation agreement. Duh?  (Was Cruz or his attorney even aware of this?)

See the case here: Cruz v. MERS_2015-12-136

The second known notice of repudiation was filed in the bankruptcy case of Fieldstone Mortgage Company, in a rather voluminous omnibus filing:

Fieldstone Mortgage Bankruptcy

As I teach in my COTA Workshops, repudiation of a contract in a Chapter 11 proceeding is like taking a dump.   Getting rid of excess baggage that could potentially weigh you down as to legal issues coming back to bite you in the ass.

In what I’ve just presented, both entities unilaterally decided they didn’t want to play in the MERS® System any further because they deemed it a potential liability and thus NOTICED MERS that they were ending their relationship with MERSCORP.  This has provided at least one homeowner with an “out”.

In what I deem is a “new twist” to the equation, the New York-based law firm of Jenner & Block (where Neil Barofsky works), issued a memo, dated January (2019), entitled “Recent Developments in Bankruptcy Law”, wherein Section 9 talks about “executory contracts” and where the debtor in possession (of whatever is part of the debtor’s estate or business) does not need court approval to repudiate (or cancel) an executory contract (see below):

NOTE: Click on the picture to see it in full size!

For a full copy of the report (in PDF format): Recent Developments in Bankruptcy Law, Jan 2019 (Jenner & Block)

What does THIS SAY for Chapter 11 petitioners who repudiate MERSCORP executory contracts NOT needing court approval?   How do you know a MERSCORP executory contract with a so-called “MERS Member” was cancelled by the Chapter 11 debtor unless you ask about it (in discovery)?   Would you care to go rummaging through bankruptcy court filings (at ten cents a page)?   The repudiation agreement by the defunct lender or notice of such may not even be in there!

MERS AS A PLAINTIFF

In the states that allow Mortgage Electronic Registration Systems, Inc. to file a foreclosure action against a borrower, MERS is simply claiming that it’s exercising its right to foreclose per the language in the security instrument.  In some cases I’ve seen, MERS’s attorneys even come in and attempt to claim a surplus after the sale, even though MERS itself receives no payments, incurs no financial harm, etc. (see Restatement of Mortgages, Third § 5.4), which I think the law firm is clearly attempting to pilfer whatever surplus it can get for its own gains and not those of MERS or its parent.

The problem I have with MERS being anywhere near a foreclosure is not so much the contractual angle, but the damage angle, based on the Spokeo v. Robins decision by the U.S. Supreme Court.  How was MERS damaged?    In the Robinson case in California, MERS plead to the 9th Circuit (as part of getting the appellate court to affirm the lower court’s ruling) that its business model would be harmed if the appellate court didn’t rule in its favor.  You see how the lie permeates into the appellate court system?

Sadly, I liken MERSCORP CEO Bill Beckmann and his Board of Directors as a little Hitler and his band of little crony “yes-men”.   They all need to be in jail!  And speaking of Hitler …

MERS AS A DEFENDANT

The main reason that MERS (as Mortgage Electronic Registration Systems, Inc.) is listed as a Defendant in foreclosure cases is because the Plaintiff REMIC or servicer (posing as the party claiming to have the right to enforce the security instrument) wants to notice MERS in order for MERSCORP employees to check the database to make sure that there aren’t any other “mesne assignees” hiding somewhere within the chain of custody of the electronic trading going on involving that alleged loan, in order to provide a “clearing” of potential unknown Defendants that may come in later and file a claim in the case.

THE SUPREME COURT HAS (TO DATE) NOT ALLOWED ANTI-MERS CASES TO COME BEFORE IT

Writs of Certiorari have tried and failed.  However, I still believe that we will continue to see more MERS-related decisions appealed to the nation’s highest court until the matter of MERS’s flawed business model and the damage it has inflicted on over 80-million homes finally gets resolved.

THE BOTTOM LINE IS STILL THE ASSIGNMENTS: THE DEVIL IS IN THE DETAILS! 

Again, if you go into the back of The Quiet Title War Manual, you will see state-by-state listings of statutes that cover certain elements of law involving quiet title, declaratory relief, deficiency judgment law, etc. … and below that section, three individual paragraphs on actionable statutes and case law involving violation of statute in the recording of documents into the land records which contain false information (many of which are felony-rooted in nature) or violate provisions of state consumer protection act laws.  We are now (based on my past posts) seeing the use of these mechanisms in attacking the banks’ attorney(s) (because sometimes there is more than one attorney or law firm involved in any given foreclosure) in turning a statutory violation into an ethical violation!

When a foreclosure mill attorney is put “at risk” of being suspended or being disbarred for suborning perjury, committing perjury or some other ethical misconduct, do you really think he (or she) is going to want to stay in the fight?   Further, what future substituted law firm would want to step “into the pile of poop” created by the first law firm, knowing it would put itself “at risk” of having its Errors & Omissions insurance policy attacked?

Things To Watch Out For …

  1. Any entity that has filed for Chapter 11 Bankruptcy before 2010 … as to whether they got court approval to repudiate the MERSCORP executory contract.

This provides you with a potential argument (or at least an affirmative defense to a foreclosure) that MERS and its alleged “agents” (“officers’)  for the “nominee” has any authority that was repudiated by the originating lender (debtor-in-possession);

2.  Assignments dated AFTER the originating lender filed for bankruptcy (easily discovered on Google or Google Scholar).

You especially want to check for language within the assignments (of mortgage or deed of trust) that says, “together with the Note”, because MERS cannot transfer what it does not have an interest in.   Secondly, not many people argue that there is no specific right delegated to MERS to “assign” anything.   Thirdly, NOTES ARE NEGOTIATED … not transferred or assigned; and

3.  Any mortgage foreclosure complaints, notices of trustee’s sale or similar notices that reflect that MERS has any authority to do anything, specific to the state of the union you are in.

Certain states, as I’ve mentioned before, do NOT allow MERS to do much of anything, while in other states, MERS can pretty much steamroller over homeowners.

My question is, why are you still living there?   Or better yet, why haven’t you attacked the assignments in Consumer Protection or statutory claims?

The Devil Is In The Details

Always check the assignment of mortgage or deed of trust for:

  1. Self-dealing (by the servicer and its employees);
  2. Claims that the note was “assigned” in addition to the mortgage or deed of trust by MERS;
  3. Names and addresses of law firms involved in the assignment;
  4. Names and addresses of title companies involved in the assignment;
  5. Names and addresses of servicers involved in the assignment that claim the Plaintiff’s address is in c/o the servicer’s address;
  6. Names of known robosigners involved in the assignment;
  7. Names of notaries participating in the assignment that are acknowledging under PENALTY OF PERJURY;
  8. Phony MERS addresses (like their alleged Ocala, Florida address, which actually belonged to Electronic Data Systems);
  9. Dates of assignments that well post-date the REMIC’s 424(b)(5) Prospectus Cut-Off and Closing Dates;
  10. Post-dating or back-dating of the assignment; and
  11. Documents created in one state that are executed in another state.

Any of these “details” can be used as evidence to go after the law firm attempting the foreclosure!   And THAT my friends … is how the system of things should work!

Coming soon …

P.S.: Hat tip to David A. Rogers, Esq. of Austin, Texas for the Fieldstone materials!

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Filed under OP-ED, Securitization Issues

UPL, FELONY PERJURY: THE UNINTENDED CONSEQUENCES OF DOCUMENT MANUFACTURING!

OP-ED — The author of this post is a consultant to attorneys on chain of title issues and the system of things. This is not legal advice but rather an exploration down a path that few even think to travel. 

“I was just doing my job.”  

What kind of response do you think you’d get from a robosigner in a deposition when asked how they prepared or executed a recorded assignment?

Part of what I have not discussed in my series on GUTTING THE UNDERBELLY OF THE BEAST is what might inadvertently happen when documents are manufactured by third-party or servicer document mills with the intended purpose of causing them to be recorded in the land records to give standing to a plaintiff in an upcoming (or current) foreclosure case.  For all intents and purposes, the documents were recorded to give some sort of legal force and effect, right?   After all, foreclosure mill lawyers and trustees (in non-judicial settings) rely on these assignments to go on about the business of stealing (uh, er, foreclosing on) peoples’ homes, right?

If I were go back into time (April 3, 2011) and trace the interviews conducted by Scott Pelley on the 60 Minutes segment, The Next Housing Shock, you would see a prime example of how a document mill operates.  These third-party document manufacturers exist all over the U.S. largely in part to excessive demands on the marketplace to produce still-missing documentation, designed to “fit” a specific situation to achieve a desired result.  The actual result was that Lorraine M. Brown (who has since served her time and is out of prison) was convicted for heading up a document mill that operated outside of the “arms-length” purview of the mortgage servicers, as Pelley explained on the broadcast.

Then there were two Florida attorneys working for the Attorney General’s office in Tallahassee: June Clarkson and Theresa Edwards.  Both were basically forced out of their jobs after releasing a detailed report on document manufacturing misbehaviors:

florida ag report_unfair deceptive and unconscionable acts in foreclosure cases

In March of 2012, the mortgage loan servicers and the 49 states Attorneys General came to an agreement NOT to continue the process of document manufacturing unless the documents actually contain legitimate information and are not misrepresentative in nature.  No sooner did the ink dry on that agreement, the servicers and the third-party mills working with servicers were back at it again.

From 2012 until as late as 2016, Bank of America cranked out tens of thousands of documents a year using contract workers in its Simi Valley, California manufacturing plant.  According to one worker there, when he complained to his supervisors that he didn’t feel right about what he was signing, he was told, “You’re lucky you have a job, now get back to work!”   His supervisor was undoubtedly NOT an attorney but rather, an actual employee of Bank of America.

Unauthorized Practice of Law, Explained (in pertinent part)

State Bars from across the country have gone after suspects who violated their statutes by practicing law without a license to do so.  Here’s a couple of examples of those statutes:

TEXAS

As you can see from the following language below, UPL is not just holding yourself out to be a lawyer or doing things only a lawyer could do without being licensed.  This statute applies to a whole range of concerns, which are then determined on an individual basis (I highlighted the pertinent parts):

SUBCHAPTER G. UNAUTHORIZED PRACTICE OF LAW

Sec. 81.101. DEFINITION. (a) In this chapter the “practice of law” means the preparation of a pleading or other document incident to an action or special proceeding or the management of the action or proceeding on behalf of a client before a judge in court as well as a service rendered out of court, including the giving of advice or the rendering of any service requiring the use of legal skill or knowledge, such as preparing a will, contract, or other instrument, the legal effect of which under the facts and conclusions involved must be carefully determined.

(b) The definition in this section is not exclusive and does not deprive the judicial branch of the power and authority under both this chapter and the adjudicated cases to determine whether other services and acts not enumerated may constitute the practice of law.

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Could an assignment be that “other document incident to an action or special proceeding”, such as a foreclosure wherein that document is given legal force and effect by the court in the taking of someone’s home?  Texas also has statutes that cover the recording of false documents:

Tex. Pen.Code, Title 7, Ch. 32, § 32.46(a)(1) makes it a felony to cause a forged or fraudulent document to be filed or recorded.

1. Common Law Fraud: To sustain a cause of action for actual fraud, the plaintiffs must prove (1) the defendant made a material representation that was false; (2) the defendant knew the representation was false or made it recklessly as a positive assertion without any knowledge of its truth; (3) the defendant intended to induce plaintiffs to act on the representation; and (4) plaintiffs actually and justifiably relied on the representation and thereby suffered damages. See Ernst & Young, L.L.P. v. Pac. Mut. Life Ins. Co., 51 S.W.3d 573 (Tex. 2001); 2. Texas Civil Practice & Remedies Code § 12.002 allows for recovery of up to $10,000 per fraudulent document; 3. Texas Civil Practice & Remedies Code § 16.003 provides for a 2-year challenge to recorded documents.

——-

Sadly, the two-year challenge to phony documents was probably put there by some self-serving legislators who were bought off by the banks, who knew that at some point, the suspect document might be discovered; however, it appears to run in conflict with the felony penal code’s mandates.  So which carries more weight? The penal code or the civil code?   If the penal code was enforced, the sheriff’s enforcing the laws couldn’t say, “Oh, it’s a civil matter. Take it up with the judge.”, as he’s kicking you to the curb.  A felony action runs longer than Texas’s civil code statute.

FLORIDA

Sadly, Florida Statutes only cover holding one’s self out as an attorney when one is not, but several case studies have presented us (below), with some interesting overviews about real property law:

” … the Court has held that it constitutes the unlicensed practice of law for a nonlawyer to prepare a warranty deed, quitclaim deed, land trusts, leases and mortgage agreements. The Florida Bar v. Irizarry, 268 So. 2d 377 (Fla. 1972); The Florida Bar v. Hughes, 697 So. 2d 501 (Fla. 1997); The Florida Bar v. Lister, 662 So. 2d 1241 (Fla. 1995); The Florida Bar v. Valdes, 464 So. 2d 1183 (Fla. 1985).”

UPL in Florida is a third-degree felony.  Florida appears very non-committal in its commentaries on what broadly constitutes UPL; however, as seen below from the General UPL Definitions, document manufacturing without a supervising attorney appears to be a real “gray area” (that needs some attention):

10-2. DEFINITIONS RULE 10-2.1 GENERALLY

Whenever used in these rules the following words or terms have the following meaning unless the use of the word or term clearly indicates a different meaning:

(a) Unlicensed Practice of Law. The unlicensed practice of law means the practice of law, as prohibited by statute, court rule, and case law of the state of Florida.

(b) Paralegal or Legal Assistant. A paralegal or legal assistant is a person qualified by education, training, or work experience, who works under the supervision of a member of The Florida Bar, an out-of-state lawyer engaged in the authorized practice of law in Florida or a foreign lawyer engaged in the authorized practice of law in Florida and who performs specifically delegated substantive legal work for which the supervising lawyer is responsible. A nonlawyer or a group of nonlawyers may not offer legal services directly to the public by employing a lawyer to provide the lawyer supervision required under this rule. It constitutes the unlicensed practice of law for a person who does not meet the definition of paralegal or legal assistant to use the title paralegal, legal assistant, or other similar term in offering to provide or in providing services directly to the public.

——-

Florida also has a felony perjury statute with teeth in it, as it has a civil component attached:

817.535 Unlawful filing of false documents or records against real or personal property.

(1) As used in this section, the term:

(a) “File” means to present an instrument for recording in an official record or to cause an instrument to be presented for recording in an official record.
(b) “Filer” means the person who presents an instrument for recording in an official record or causes an instrument to be presented for recording in an official record.
(c) “Instrument” means any judgment, mortgage, assignment, pledge, lien, financing statement, encumbrance, deed, lease, bill of sale, agreement, mortgage, notice of claim of lien, notice of levy, promissory note, mortgage note, release, partial release or satisfaction of any of the foregoing, or any other document that relates to or attempts to restrict the ownership, transfer, or encumbrance of or claim against real or personal property, or any interest in real or personal property.
(d) “Official record” means the series of instruments, regardless of how they are maintained, which a clerk of the circuit court, or any person or entity designated by general law, special law, or county charter, is required or authorized by law to record. The term also includes a series of instruments pertaining to the Uniform Commercial Code filed with the Secretary of State or with any entity under contract with the Secretary of State to maintain Uniform Commercial Code records and a database of judgment liens maintained by the Secretary of State.

(e) “Public officer or employee” means, but is not limited to:

1. A person elected or appointed to a local, state, or federal office, including any person serving on an advisory body, board, commission, committee, council, or authority.
2. An employee of a state, county, municipal, political subdivision, school district, educational institution, or special district agency or entity, including judges, attorneys, law enforcement officers, deputy clerks of court, and marshals.
3. A state or federal executive, legislative, or judicial officer, employee, or volunteer authorized to perform actions or services for any state or federal executive, legislative, or judicial office, or agency.
4. A person who acts as a general or special magistrate, auditor, arbitrator, umpire, referee, hearing officer, or consultant to any state or local governmental entity.
5. A person who is a candidate for public office or judicial position.
(2)(a) A person who files or directs a filer to file, with the intent to defraud or harass another, any instrument containing a materially false, fictitious, or fraudulent statement or representation that purports to affect an owner’s interest in the property described in the instrument commits a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
(b) A person who violates paragraph (a) a second or subsequent time commits a felony of the second degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

(3) If a person is convicted of violating subsection (2) and the owner of the property subject to the false instrument is a public officer or employee, the offense shall be reclassified as follows:

(a) In the case of a felony of the third degree, to a felony of the second degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
(b) In the case of a felony of the second degree, to a felony of the first degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

(4)(a) If a person is convicted of violating subsection (2) and the person committed the offense while incarcerated in a jail or correctional institution or while participating in a pretrial diversion program under any form of pretrial release or bond, on probation or parole, or under any postrelease supervision, the offense shall be reclassified as follows:

1. In the case of a felony of the third degree, to a felony of the second degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
2. In the case of a felony of the second degree, to a felony of the first degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
(b) If a person’s offense has been reclassified pursuant to this subsection, the sentencing court shall issue a written finding that the offense occurred while incarcerated in a jail or correctional institution and direct that a copy of the written finding and judgment of conviction be forwarded to the appropriate state institution or county facility for consideration of disciplinary action and forfeiture of all gain-time or any early release credits accumulated up to the date of the violation.

(5) If the person is convicted of violating subsection (2) and the owner of the property covered by the false instrument incurs financial loss as a result of the instrument being recorded in the official record, including costs and attorney fees incurred in correcting, sealing, or removing the false instrument from the official record as described herein, the offense shall be reclassified as follows:

(a) In the case of a felony of the third degree, to a felony of the second degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
(b) In the case of a felony of the second degree, to a felony of the first degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
(6) A person who fraudulently records a claim of lien in the official records pursuant to part I of chapter 713 is subject to the fraud provisions of s. 713.31 and not this section.
(7) If a person is convicted of violating this section, the sentencing court shall issue an order declaring the instrument forming the basis of the conviction null and void and may enjoin the person from filing any instrument in an official record absent prior review and approval for filing by a circuit or county court judge. The sentencing court may also order the instrument forming the basis of the conviction sealed from the official record and removed from any applicable electronic database used for recording instruments in the official record.
(8)(a) Any person adversely affected by an instrument filed in the official record which contains a materially false, fictitious, or fraudulent statement or representation has a civil cause of action under this section without regard to whether criminal charges are pursued under subsection (2). A notice of lis pendens in accord with s. 48.23 shall be filed which specifically describes the instrument under challenge and the real or personal property affected by the instrument.

(b) Upon a finding that the instrument contains a materially false, fictitious, or fraudulent statement or representation such that the instrument does not establish a legitimate property or lien interest in favor of another person:

1. The court shall determine whether the entire instrument or certain parts thereof are null and void ab initio. If the court finds the instrument void in its entirety, it may order the instrument sealed from the official record and removed from any electronic database used for indexing or locating instruments in the official record. The court may also, permanently or for a period of time, enjoin the defendant who filed the instrument or who directed the filer to file the instrument from filing or directing a person to file an instrument in the official records without prior review and approval for filing by a circuit or county court judge, provided that as to third parties who may have given value for an interest described or granted by any instrument filed in violation of the injunction, the instrument shall be deemed validly filed and provides constructive notice, notwithstanding any failure to comply with the terms of the injunction.
2. Upon a finding of intent to defraud or harass, the court or jury shall award actual damages and punitive damages, subject to the criteria in s. 768.72, to the person adversely affected by the instrument. The court may also levy a civil penalty of $2,500 for each instrument determined to be in violation of subsection (2).
3. The court may grant such other relief or remedy that the court determines is just and proper within its sound judicial discretion.
(c) The prevailing party in such a suit is entitled to recover costs and reasonable attorney fees.
(d) The custodian of any official record shall, upon payment of appropriate fees, provide a certified copy of the sealed instrument to the party seeking relief under this section for use in subsequent court proceedings; in addressing or correcting adverse effects upon the person’s credit or property rights, or reporting the matter for investigation and prosecution; or in response to a subpoena seeking the instrument for criminal investigative or prosecution purposes.
(e) Upon request, the custodian of any official record shall, upon payment of appropriate fees, provide a certified copy of the sealed instrument to any federal, state, or local law enforcement agency.
(f) If feasible, the custodian of the official record where the instrument is recorded shall record any court order finding that the instrument is null and void in its entirety or in certain parts thereof.
(g) An instrument removed from an electronic database used for recording instruments in the public record pursuant to this section shall be maintained in a manner in which the instrument can be reduced to paper form.
(9) A government agency may provide legal representation to a public officer or employee if the instrument at issue appears to have been filed to defraud or harass the public officer or employee in his or her official capacity. If the public officer or employee is the prevailing party, the award of reasonable attorney fees shall be paid to the government agency that provided the legal representation.
(10) This section does not apply to the procedures for sealing or expunging criminal history records as provided in chapter 943.
History.s. 1, ch. 2013-228.

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The foregoing is some pretty substantive stuff, eh?   Now let’s examine a couple of the key items that got Florida foreclosure mill attorney (su casa, mi casa) David J. Stern disbarred:

In Count One of the Complaint that got him disbarred, at Paragraph 6:

During all times material, respondent elevated several staff to managerial/supervisory positions in the Stern law firm, including, but not limited to, attorneys Beverly McComas and Miriam Mendieta, and nonlawyer, Cheryl Samons, who was the office manager of the foreclosure department and/or manager of operations.

Cheryl Samons’ signature (as you may have been aware) showed up on thousands of documents as an Assistant Secretary of Mortgage Electronic Registration Systems, Inc., many times utilizing a notary (Terry Rice) whose commission was not valid at the time of acknowledgment.  These documents were then recorded in land records all over Florida and used to foreclose on unsuspecting homeowners.

Paragraphs 9 , 14 and 16 (of the Bar Complaint further stated:

(9) In their supervisory capacity, Mendieta, McComas, and Samons were accountable and answerable only to David J. Stern as the managing attorney and sole shareholder of the Law Offices of David J. Stern, P.A.

(14) Ultimately, the firm’s supervisory echelon employees such as Mensieta, McComas, and Samons, due to their extensive supervisory and managerial duties and responsibilities were given annual salaries that ranged from $200,000 to $600,000.

(16) David J. Stern’s lack of supervisory oversight, together with that of the supervisory echelon, contributed to many allegations of misconduct, including many judicial referrals to the Bar, on the part of the Stern law firm and its associates, which included, but were not limited to: (B) Improperly executed and/or improperly notarized documents, including, but not limited to, assignments of mortgage, and affidavits of reasonable attorneys’ fees …”

So if David J. Stern was not directly supervising the activities of Cheryl Samons, she could pretty much do whatever she wanted, including drafting documents that contained false and misrepresentative information (under Florida Criminal Code § 817.535).

Don’t you think that these third-party document mills operate in much the same way?   Without attorney supervision?   Exactly how much did Cheryl Samons get paid?

What is so different from what David J. Stern got disbarred for … and Lorraine M. Brown went to prison for … that these robosigners and their respective notaries can’t be held to the same criminal standards?  All of the depositions I’ve read of Stern Law Firm employees say nothing about how much anyone got paid and none of them appear to inquire as to the accuracy of the information contained on the document, with the exception of authority vested in the signer by MERS.

CALIFORNIA

BUSINESS AND PROFESSIONS CODE – BPC

DIVISION 3. PROFESSIONS AND VOCATIONS GENERALLY [5000 – 9998.11]

( Heading of Division 3 added by Stats. 1939, Ch. 30. )

CHAPTER 4. Attorneys [6000 – 6243]

( Chapter 4 added by Stats. 1939, Ch. 34. )

ARTICLE 7. Unlawful Practice of Law [6125 – 6133]

( Article 7 added by Stats. 1939, Ch. 34. )

6125.

No person shall practice law in California unless the person is an active licensee of the State Bar.

(Amended by Stats. 2018, Ch. 659, Sec. 89. (AB 3249) Effective January 1, 2019.)

6126.

(a) Any person advertising or holding himself or herself out as practicing or entitled to practice law or otherwise practicing law who is not an active licensee of the State Bar, or otherwise authorized pursuant to statute or court rule to practice law in this state at the time of doing so, is guilty of a misdemeanor punishable by up to one year in a county jail or by a fine of up to one thousand dollars ($1,000), or by both that fine and imprisonment. Upon a second or subsequent conviction, the person shall be confined in a county jail for not less than 90 days, except in an unusual case where the interests of justice would be served by imposition of a lesser sentence or a fine. If the court imposes only a fine or a sentence of less than 90 days for a second or subsequent conviction under this subdivision, the court shall state the reasons for its sentencing choice on the record.

(b) Any person who has been involuntarily enrolled as an inactive licensee of the State Bar, or whose license has been suspended, or has been disbarred, or has resigned from the State Bar with charges pending, and thereafter practices or attempts to practice law, advertises or holds himself or herself out as practicing or otherwise entitled to practice law, is guilty of a crime punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code or in a county jail for a period not to exceed six months. However, any person who has been involuntarily enrolled as an inactive licensee of the State Bar pursuant to paragraph (1) of subdivision (e) of Section 6007 and who knowingly thereafter practices or attempts to practice law, or advertises or holds himself or herself out as practicing or otherwise entitled to practice law, is guilty of a crime punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code or in a county jail for a period not to exceed six months.

(c) The willful failure of a licensee of the State Bar, or one who has resigned or been disbarred, to comply with an order of the Supreme Court to comply with Rule 9.20 of the California Rules of Court, constitutes a crime punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code or in a county jail for a period not to exceed six months.

(d) The penalties provided in this section are cumulative to each other and to any other remedies or penalties provided by law.

(Amended by Stats. 2018, Ch. 659, Sec. 90. (AB 3249) Effective January 1, 2019.)

6126.3.

(a) In addition to any criminal penalties pursuant to Section 6126 or to any contempt proceedings pursuant to Section 6127, the courts of the state shall have the jurisdiction provided in this section when a person advertises or holds himself or herself out as practicing or entitled to practice law, or otherwise practices law, without being an active licensee of the State Bar or otherwise authorized pursuant to statute or court rule to practice law in this state at the time of doing so.

(b) The State Bar, or the superior court on its own motion, may make application to the superior court for the county where the person described in subdivision (a) maintains or more recently has maintained his or her principal office for the practice of law or where he or she resides, for assumption by the court of jurisdiction over the practice to the extent provided in this section. In any proceeding under this section, the State Bar shall be permitted to intervene and to assume primary responsibility for conducting the action.

(c) An application made pursuant to subdivision (b) shall be verified, and shall state facts showing all of the following:

(1) Probable cause to believe that the facts set forth in subdivision (a) of Section 6126 have occurred.

(2) The interest of the applicant.

(3) Probable cause to believe that the interests of a client or of an interested person or entity will be prejudiced if the proceeding is not maintained.

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As you can see from California’s statutes, there really isn’t much in the way of disciplinary punishment for those actually “doing the deed”, other than felony perjury under the Penal Code:

PENAL CODE – PEN

PART 1. OF CRIMES AND PUNISHMENTS [25 – 680]

  ( Part 1 enacted 1872. )

TITLE 7. OF CRIMES AGAINST PUBLIC JUSTICE [92 – 186.34]

  ( Title 7 enacted 1872. )

CHAPTER 4. Forging, Stealing, Mutilating, and Falsifying Judicial and Public Records and Documents [112 – 117]

  ( Chapter 4 enacted 1872. )

115.  

(a) Every person who knowingly procures or offers any false or forged instrument to be filed, registered, or recorded in any public office within this state, which instrument, if genuine, might be filed, registered, or recorded under any law of this state or of the United States, is guilty of a felony.

(b) Each instrument which is procured or offered to be filed, registered, or recorded in violation of subdivision (a) shall constitute a separate violation of this section.

(c) Except in unusual cases where the interests of justice would best be served if probation is granted, probation shall not be granted to, nor shall the execution or imposition of sentence be suspended for, any of the following persons:

(1) Any person with a prior conviction under this section who is again convicted of a violation of this section in a separate proceeding.

(2) Any person who is convicted of more than one violation of this section in a single proceeding, with intent to defraud another, and where the violations resulted in a cumulative financial loss exceeding one hundred thousand dollars ($100,000).

(d) For purposes of prosecution under this section, each act of procurement or of offering a false or forged instrument to be filed, registered, or recorded shall be considered a separately punishable offense.

(e) (1) After a person is convicted of a violation of this section, or a plea is entered whereby a charge alleging a violation of this section is dismissed and waiver is obtained pursuant to People v. Harvey (1979) 25 Cal.3d 754, upon written motion of the prosecuting agency, the court, after a hearing described in subdivision (f), shall issue a written order that the false or forged instrument be adjudged void ab initio if the court determines that an order is appropriate under applicable law. The order shall state whether the instrument is false or forged, or both false and forged, and describe the nature of the falsity or forgery. A copy of the instrument shall be attached to the order at the time it is issued by the court and a certified copy of the order shall be filed, registered, or recorded at the appropriate public office by the prosecuting agency.

(2) (A) If the order pertains to a false or forged instrument that has been recorded with a county recorder, an order made pursuant to this section shall be recorded in the county where the affected real property is located. The order shall also reference the county recorder’s document recording number of any notice of pendency of action recorded pursuant to paragraph (2) of subdivision (f).

(B)  As to any order, notice of pendency of action, or withdrawal of notice of pendency of action recorded pursuant to this section, recording fees shall be waived pursuant to Section 27383 of the Government Code.

(f) A prosecuting agency shall use the following procedures in filing a motion under subdivision (e):

(1) Within 10 calendar days of filing a criminal complaint or indictment alleging a violation of this section, the prosecuting agency shall provide written notice by certified mail to all parties who have an interest in the property affected by the false or forged instrument, or in the instrument itself, including those described in paragraph (5).

(2) (A) Within 10 calendar days of filing a criminal complaint or indictment alleging a violation of this section, the prosecuting agency shall record a notice of pendency of action in the county in which the affected real property is located.

(B) Within 10 calendar days of the case being adjudicated or dismissed without obtaining an order pursuant to subdivision (e), the prosecuting agency shall record a withdrawal of the notice of pendency of action in the county where the affected real property is located.

(3) The written notice and notice of pendency of action described in paragraphs (1) and (2) shall inform the interested parties that a criminal action has commenced that may result in adjudications against the false or forged instrument or the property affected by the false or forged instrument, and shall notify the interested parties of their right to be heard if a motion is brought under subdivision (e) to void the false or forged instrument. The notice shall state the street address, if available, and the legal description of the affected real property.

(4) Failure of the prosecuting agency to provide written notice or record a pendency of action as required under paragraphs (1) and (2) within 10 calendar days shall not prevent the prosecuting agency from later making a motion under subdivision (e), but the court shall take the failure to provide notice or record a pendency of action as required under paragraphs (1) and (2) as reason to provide any interested parties additional time to respond to the motion. Failure of the prosecuting agency to so notify interested parties under this subdivision or record a pendency of action as required under paragraphs (1) and (2) within 10 calendar days shall create a presumption that a finding as described in paragraph (9) is necessary to protect the property rights of the interested party or parties.

(5) If the instrument sought to be declared void involves real property, “interested parties” include, but are not limited to, all parties who have recorded with the county recorder in the county where the affected property is located any of the following: a deed, lien, mortgage, deed of trust, security interest, lease, or other instrument declaring an interest in, or requesting notice relating to, the property affected by the false or forged instrument as of the date of the filing of the criminal complaint or indictment.

(6) Any party not required to be noticed under paragraph (1) or (5) who nonetheless notifies the prosecuting agency in writing of the party’s desire to be notified if a motion is brought under subdivision (e) to void the false or forged instrument shall be treated as an interested party as defined in paragraph (1) or (5).

(7) The court shall set a hearing for the motion brought by the prosecuting agency under subdivision (e) no earlier than 90 calendar days from the date the motion is made. The prosecuting agency shall provide a copy by certified mail of the written motion and a notice of hearing to all interested parties described in paragraphs (1), (5), or (6), and all other persons who obtain an interest in the property prior to recordation of notice of pendency of action no later than 90 days before the hearing date set by the court. The notice shall state the street address, if available, and the legal description of the affected real property.

(8) At a hearing on a motion brought by the prosecuting agency under subdivision (e), the defendant, prosecuting agency, and interested parties described in paragraphs (1), (5), or (6), shall have a right to be heard and present information to the court. No party shall be denied a right to present information due to a lack of notice by the prosecuting agency or failure to contact the prosecuting agency or the court prior to the hearing.

(9) (A) At a hearing on a motion brought by a prosecuting agency under subdivision (e), if the court determines that the interests of justice or the need to protect the property rights of any person or party so requires, including, but not limited to, a finding that the matter may be more appropriately determined in a civil proceeding, the court may decline to make a determination under subdivision (e).

(B) If, prior to the hearing on the motion, any person or party files a quiet title action that seeks a judicial determination of the validity of the same false or forged instrument that is the subject of the motion, or the status of an interested party as a bona fide purchaser of, or bona fide holder of an encumbrance on, the property affected by the false or forged instrument, the court may consider that as an additional but not dispositive factor in making its determination under subdivision (e); provided, however, that a final judgment previously entered in that quiet title action shall be followed to the extent otherwise required by law.

(g) As used in this section, “prosecuting agency” means a city attorney, a district attorney, the Attorney General, or other state or local agency actively prosecuting a case under this section.

(h) An order made pursuant to subdivision (e) shall be considered a judgment, and subject to appeal in accordance with, paragraph (1) of subdivision (a) of Section 904.1 of the Code of Civil Procedure.

(Amended by Stats. 2014, Ch. 455, Sec. 1. (AB 1698) Effective January 1, 2015.)

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LAW FIRM PARTICIPATION

When it comes to the actual document recording, you may see the law firm involved in the preparation or handling of the document.  Here are some examples:

As opposed to other law firms who are doing the foreclosing that rely on third-party document mills, title companies and servicer document mills to manufacture standing to keep documents beyond arms-length for the purposes of plausible deniability in the preparation of these suspect documents:

NDEX West LLC is another name for National Default Exchange, which foreclosure mill Barrett Daffin (a North Dallas foreclosure mill with offices on the West Coast) is involved in. At one time, then-California Attorney General Kamala Harris was investigating NDEX West.  It is uncertain whether that investigation has been concluded. NDEX West may or may not even be aware that it was or is currently being investigated (unless someone reads this blog and tells them about it).  I was made aware of the investigation through my corporate attorney, who was contacted by Kamala Harris’s office.

When the law firm participates, one must determine (generally through bona fide discovery … and not just your own personal opinion) whether the law firm actually “supervised” the execution and/or preparation of the document; how much interaction the law firm had with the document’s execution and/or creation; and whether or not the law firm reviewed any alterations to the document (common in third-party document mills), wherein you see a lot of surrogate signing, notary fraud and other suspect issues that have to be vetted, NOT TO MENTION the actual information being false and in violation of statutes like the foregoing California Penal Code and the Florida Criminal Code § 817.535.

It further makes one wonder HOW people can create, execute and cause to be recorded millions of documents (which are separate acts of perjury committed under the statutes) and not get burned by UPL issues because they created documents with the purported effect of representing something of a legal nature in the land records without the review and/or supervision of a licensed attorney.  This is something that the legislatures of all 50 states certainly need to take a closer look at because illicit document manufacturing has not stopped, despite what the servicers say!

Then you’d obviously ask yourself … if Cheryl Samons was allowed to do what she did and her acts constituted suspect felony behavior, why isn’t she in jail too?  Not only did her suspect assignment show up in the Harpster case in Pasco County, Florida, years later one of those same suspect assignments showed up in a Hillsborough County, Florida case! strominger assn_stern

The Strominger case was eventually dismissed.

THE SYSTEM OF THINGS HASN’T BEEN PLAYED OUT YET

In Nevada, two title officers with LPS were taken to task on a 606-count indictment, only to have all of those charges thrown out due to prosecutorial misconduct.

David J.Stern may have been disbarred; however, he still is out of the business with a puttload of money from his ill-gotten gains as the reputed “King of the Foreclosure World”. He had the supervisory capacity to oversee his non-lawyer staff (as mandated by bar rules), yet he apparently chose to ignore them.  If document mills don’t have “supervisory attorneys”, what would the unintended consequences of document manufacturing by companies like Indecomm Global Services, Security Connections and Nationwide Title Clearing be?

The reason Samons and others like her are NOT in jail is because we do not go far enough into “the system of things” to make that happen.  We are simply happy to NOT be foreclosed on and that’s good enough for us right now.   Why spend the extra money?

Maybe at a point in time in the near future … we’ll get there.  But for now, until someone rises to the occasion within a legal proceeding, we’re not there yet.  Keep in mind that it is my suggestion to ALWAYS depose a notary first and make sure to have a copy of the office floor plan.  Most of the leasing agents have access to them, as required under a lease, to illustrate “finish out” details.

Below is an example of one signing room floor plan (allegedly MERS’s address in Ocala, Florida, which really belonged to EDS):

The foregoing illustration was actually used in the promotion of the agent, who referred to this location as ideal for a “document manufacturing plant”.  Where in the hell did he get that idea from?   I generally look at these floor plans to determine the location of where the notaries are located, versus the persons executing the documents.  One of Bank of America’s so-called “employees” chose to admit in an interview that none of his signatures were ever witnessed by notaries when he worked in that document manufacturing plant for over three years.  His documents were collected from him and taken to the notary section to be acknowledged, which contradicts what the notarial execution language says, “under Penalty of Perjury under the laws of the State of California.”   Am I making sense here?  I recently received a copy of an assignment of mortgage signed by this admitted robosiger/contract worker for Bank of America, which goes to show you that the “damage” created by the recording of these documents (to that property’s chain of title, etc.) is on-going, despite what the banks and their servicers may think.

CIVIL CONSPIRACY IN RELATION TO DOCUMENT MANUFACTURING

How many robosigners and notaries does it take to form a civil conspiracy?   One of each.   If a law firm was giving any “direction” or “supervision” to the matter of executing and recording these documents, don’t you think they’ve become part of that “conspiracy”?   We’ll leave that question for a solid answer when someone manages to get proper discovery in a future case.  If you manage this, please let me know!  We’d all like to know.

In most U.S. states, civil conspiracy is not actionable in of itself (as a cause of action); however, according to existing case law, civil conspiracy can be used to prove the intent in an underlying tort (misrepresentation).  This is where we get back into document content and not whether someone had permission from MERS.  In my book, a corporate resolution that the Grantor cannot or refuses to prove had teeth in it (which MERS constantly refuses to prove) in order for someone to sign on its behalf poses an interesting challenge.  Does MERS actually become part of the civil conspiracy because of some alleged authority granted by it?  MERS can’t stay hidden in the woodwork forever.  At some point, the courts (I predict) will determine some sort of liability connected with a criminal proceeding.

Again, the system of things has to come full circle for this to occur.

 

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WHEN THE NOT-SO-OBVIOUS BECOMES OBVIOUS …

(OP-ED) — The author of this post is not an attorney.  I hate having to put disclaimers on here, but some people can’t separate common sense from what might be termed “legal advice”; thus, given the behavior of  “the system of things” to always backfire at some point in time, caveats are always necessary in any walk of life.

Happy New Year!

Being as it’s 2019 still doesn’t change the fact that on many an occasion, mortgage loan servicers are the parties actually conducting the foreclosures both judicial and non-judicial settings.  We’re seeing an uptick in the number of cases where assignments of mortgage or deed of trust show the “assignee” as the benefactor of the mortgage loan (ONLY) which is when the conveniently-manufactured “excuse” for paperwork is discovered in the land records around the time of the foreclosure action.  This does not excuse the fact that you have no contract with the servicer, but the lender does … maybe.  Some sort of authority has to represent what the servicer can do and cannot do; however … no one bothers to check limited powers of attorney to see if such authority was ever granted.  Are we by-passing that evaluation all because of desperation, which causes us to overlook detail?

The Not-So-Obvious … 

Roughly about a year ago, a sailboat waterfront property in Punta Gorda, Florida was sold at auction.  The winning bidder paid the fees and went to closing, only to find out Select Portfolio Servicing, LP, the mortgage loan servicer behind the auction, wasn’t the proper party to be selling the foreclosed home.  The deal fell through.  Who discovered it?   The title company that was trying to close the deal!

The Obvious …

It looked like all the paperwork was there, except when it wasn’t.  And look who discovered it … the title company.  They weren’t going to insure the home because the seller didn’t have the authority to sell it, nor did the seller (SPS) have an interest in it.  How can a party with no interest in foreclosed property sell it?   Which brings me to another point.  Since this foreclosure auction was in Florida, which is a judicial state … in order to get to the point where it went to auction, a final judgment of foreclosure had to be obtained from the circuit court, which it was. This means that someone had to lie to the judge to get the final judgment in the first place!  Did the attorney(s) who made the misrepresentations in court, both in the pleadings and in oral arguments, get sanctioned or punished?  Hell, no!  Why?  Because the Borrowers (who were from Michigan; Florida has a lot of “snowbirds” that own property there that don’t bother to check condition of title when they purchase Florida property) didn’t bring it up … and …

The Not-So-Obvious …

Because Florida judges only care about the bonuses they get from the State Legislature for kicking people to the curb any way they can!  Generally, that’s done through some overlooked procedural process … or in cases where the Borrowers show up in court, the judge then ambushes the Borrowers (and their attorneys) by asking, “When’s the last time you made a mortgage payment?”  or in the alternative … “Are you in default?”  (as if you know the legal meaning of default).  You blindly answer because of intimidation.

The Obvious …

Instead of objecting to the judge’s question by fundamentally answering that the servicer may have been making the payments for you all along, there is no firm proof of when the last payment was made on the account; and there’s no real proof that anyone is in default, except maybe the servicer, for failing to make the payments as part of their contractual obligation to the lender.  No one ever goes there, especially when there’s a REMIC trust involved.  What the judge is doing is trying to justify the foreclosure by side-stepping your due process rights to discovery.  When you let him/her do that, they get a bonus … AND … you get kicked to the curb!

The Not-So-Obvious … 

The banks already know and assume, because it’s a numbers game, that homeowners don’t have the money to fight and that 95% of them will run if given the opportunity, instead of fighting for what’s theirs.  The banks may be aware that the servicer is the real party retaining the foreclosing attorney or law firm, but they simply look at the complaint caption and take what’s written in the pleadings as the gospel truth, when it is far from it.  This is why it’s disadvantageous to live in a deed of trust (non-judicial) state than in a judicial (mortgage) state, where you get your day in court … because all foreclosures are deemed to be legal until otherwise challenged.

The obvious … 

If and when you find yourself with more month at the end of the money and the mortgage payment is going to be late or short in dollar amount, it is certain your account will be red-flagged after the 10th of the following month when the mortgage payment isn’t received.  As per the patterns discovered in the OSCEOLA COUNTY FORENSIC EXAMINATION, it is also highly likely that the mortgage loan servicer will direct its employees to manufacture a phony assignment, using MERS to cover up the chain of title, to convey your property (along with the note, which MERS cannot do since it admittedly doesn’t have an interest in the note) into a REMIC trust.  This will happen within the 90-day period of you not making timely mortgage payments.  This is all done because the servicer wants your home because it’s going to get reimbursed for all of those payments (principal and interest) it made for you!

The Not-So-Obvious … 

What the servicer doesn’t tell you is that when it starts sending you loan modification paperwork, the foreclosure paperwork shuffle affecting your home is already in progress.  It is at this point in time that borrowers are distracted by distress and frustration, all by design planning on the part of the servicer.  This is why there are so many complaints against mortgage loan servicers these days.

The Obvious … 

You have a limited amount of time to prepare … either to run or to fight the good fight.  Your research should include talking to at least two different foreclosure defense attorneys.  Within 90 days to six months, you can expect to get a notice that the proceedings just got traction and are moving forward.  I can guarantee you 100% that if you do nothing, you lose your home.

The Not-So-Obvious … 

Mortgage loan servicers really hate discovery.  They have limited information in the Borrowers’ Collateral Loan Files.  Most Borrowers take the path of least resistance, which is what the servicers are counting on, and send them a Qualified Written Request under RESPA § 6, expecting to get a document dump of everything in their file, which is NOT what the servicer wants to see or hear.  Borrowers seem to forget that a QWR is not real discovery.  Servicers side-step all sorts of issues in answering QWR’s outside of a court case.

The Obvious … 

The chain of title has evidence which you can readily obtain in certified form, especially the assignments!  The devil is in the details and that is exactly where you’ll find your false and misrepresentative statements!   The Borrower should seek out counsel that is versed in discovery in order to craft questions and statements that are likely to have to set the stage for a Motion to Compel to get the servicer to answer them.  No discovery = No truth!

And the truth shall set you free!

 

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AMERICA’S HOUSING CRISIS, LIKE EVERYTHING ELSE, IS THE GOVERNMENT’S FAULT!

(OP-ED) — The author of this post is a consultant to trial lawyers handling chain of title and foreclosure matters and thus, cannot render legal or financial advice.  This post is for educational purposes only. 

I was reading a news article in the local paper by a local columnist entitled, “There’s no place for you here …”   The article basically pontificated that low and middle class workers cannot afford this area’s housing market.  If what that columnist said were absolutely true (and I debate his viewpoints in so many ways), whose fault is that?

America continues to face a housing crisis that state governments could create a master plan to solve, yet nothing obvious and straightforward is being done.  We all think that our elected congresspeople and senators in DC will do something about it, since the issue seems to be promoted as a national issue and not a state one.  Not so in my book because it’s all become politically relative.  Politicians simply say what the voters want to hear, whether what they say means anything or not.  The system is rigged to favor the elected and not the body politic.  We need to wake up and face that fact.

THE FORECLOSURE CRISIS CONTINUES TO FUEL THE HOUSING CRISIS … AND VICE VERSA

The “American Dream” has brought with it a ton of lobbying by the banks and their minions and history has shown us the “American Dream” has brought with it a ton of scandal, including the illicit manner that continues to happen in every county’s land records: manufactured assignments.  This garbage is the by-product of Wall Street and its desire to make itself rich through securitization, off the backs of investors and borrowers alike.  Because the laws that are legislated into existence seem to favor the banks and the oligarchs that run this country, a number of ideas are contemplated here:

  1. The politicians that run this country, BOTH Democratic and Republican, have notions in their head that they think they’re better than we are.
  2. Every two to four years, we all get to watch them smear each other on TV with negative campaign ads that frankly unzip the fly of dysfunctional governments at both state and federal levels.
  3. The two-party system rightfully caused this mess and the mess won’t stop until “the system of things” is changed in favor of the people and not in favor of politicians, who get to live out their retirement better than we Americans could ever have it, if we even get to retire.

Despite what you’re reading that is spewed from spoon-fed, government sources, fake news or not, foreclosures are continuing, whether in record numbers or not … and talk about a resolution to this mess is cheap in DC.  With the CFPB (or whatever “new and improved” acronym they want to apply to this now-seemingly worthless bunch of bungling bureaucrats) being watered down, aggrieved consumers can now stop turning to the U.S. government for answers and resolution because it won’t be there for them.

Our problem is … we depend too much on government to be our savior because the government has a bad habit of promising everything, but not without strings attached.  The banks have made sure of that.  Thus, securitization is back in full swing again and the same people who got stung by the last housing crisis are the first in line to apply for their MERS-originated mortgages … rinse and repeat.  Drink the Kool-Aid … rinse and repeat.  People who are ignorant of history are doomed to repeat it. 

This means more theft of homes, more trashed out and worthless chains of title and more shadow inventory being kept off the books, thus skewing the real numbers of  what’s being illicitly taken … and taken for granted … maybe we don’t have a crisis after all … ahhh … but we do.  And it’s not going away any time soon. As long as builders are building unaffordable homes (homes with a market value of over $250,000), this will force Americans to have to borrow more and drive them deeper into debt.  This is the typical Catch 22 syndrome of the mistakes we made in the last housing boom. Until builders are reigned in or people stop drinking the Kool-Aid, it will be status quo in America. The state and local governments could change that, but they’re not doing anything worth mentioning.

THE “CLASS SYSTEM” GAP IS EXPANDING IN AMERICA

I live in a county where retirees (some with accumulated wealth) comprise better than 25% of the population.  Home building permitting is at a standstill because of the backlog of builders coming back into the picture and the government has complete control of what these builders do, what they build and who they employ while building what they’re building.  Because permitting is taking so long and counties are becoming more particular about construction and design issues as well as code enforcement, the cost of housing becomes the victim of cost overruns.

Only one “affordable housing” project has been contemplated for this area and surprisingly, the home builders who are continuing to build “upscale” housing are part of the debate to limit that type of housing because of the “riffraff” it brings with it.  No one said anything about building “projects” here, as if that has some sort of negative connotation attached to it.   These builders however seem to forget that if only the wealthy people can buy homes in this area and rents are too expensive to support the lower income and middle income families, there won’t be any labor force to accommodate the service businesses needed to wipe the noses (and asses) of the rich people.  Yowsah! Yowsah! Yowsah!  I’m perturbed by this, because I used to own/manage/work in the restaurant business for many years and I can tell you how unpleasant things can get when people who have money take people for granted who are just trying to keep up, absent the snobbish behavior.  I must be a black man trapped in a white man’s body because there are days I wake up and I feel like a “slave to the riddim”.

And I’m not being facetious here.  I’m one of the lower to middle class, just like most of you.  Sure, I have my “American Dream” but it’s different from yours.  I do not support the DC behaviors.  Deep State is counterproductive to forward-thinking government progress because it seeks to disrupt change for the better.  I do not support the two-party system because of what it’s done to America.  I am non-partisan in my thinking here.  I have to be.  We all need to be realistic for the moment because our “spending habits” (Americans are deeper in credit card debt than ever before), which are created by the spending boom that occurs with “holidays” like Black Friday, fuels negative habit patterns that will drive lower to middle-income wage earners deeper into the abyss of debt and make them less likely to be able to even afford to rent because they’re too consumed with their “comfort zones” (what it takes to make us happy in the short term).  Americans rarely ever save (unless they’re rich and they can afford to save) and most live paycheck to paycheck.  What’s in your wallet?  More month than the end of the money?

So if you were fortunate enough to have been born into wealth or accumulated it through investing and working smart, then you can certainly understand what might be in the mindset of that waitress or waiter that takes your order the next time you go out to feast at a corporate restaurant chain because all of the mom and pop operations have since become scarce due to the way our economy has made it unaffordable to start competing small businesses … and yes, not without strings attached … again.

Our state and local governments have played right into this scenario by not mandating affordable housing as part of their “master plan” (albeit Multnomah County/Portland, Oregon is attempting a stab at it) in subdivisions that still provide decent living standards for lower to middle income families with homes priced between $50,000 and 100,000.00!  The success of that program remains to be seen.  The days of the McMansion are gone thanks to the new tax laws that limit the amount of property taxes that can be deducted on a 1040 tax form.  You can thank your DC bunch for that. Only the rich will be able to afford them … and with that … comes a whole different set of problems and risks.

Coupled with the foreclosure crisis, anyone attempting to buy shadow inventory at a discount risks legal battles (prolonged quiet title actions for example) that could prevent them from actually getting a bargain, unscathed.  This includes investors that are trying to accommodate the poor in making housing affordable.  There is going to have to be consideration factored in for rents, because what people will be able to afford will be way less than what the rich can afford.

There is further conflict in reports of whether millienials migrate to the inner city because of job growth or in the alternative, move out into “the ‘burbs” because of space and security.  While one study says millennials can’t afford today’s housing because they don’t save, live from paycheck to paycheck, continue to rely on mommy and daddy when things get tough and are least immune from impulse spending … another study says they’re just fine if they want to move to suburbia and that most of them are, according to studies.  The disinformation campaign isn’t helping matters much because it means more gobbledygook to wade through to get at the real truth.

The influx of foreign workers into this country isn’t helping our economy much because jobs are being created to accommodate those who will work for less.  This is forcing the class system in America to widen because the rich are paying this influx lower wages so they (the rich) can make more money.  Many workers who have migrated into the U.S. seek jobs that pay cash; thus, they pay no taxes, yet they get social security benefits and free health care, which someone else has to pay for.  The two-party system sees this as a means to an end … to woo more non-citizens to become voters so they can vote for the “party”, who influences their choice.  In the meantime, you saw what banks like Wells Fargo did to “encourage” migrant illegal aliens to open bank accounts.  The banks are supported by the U.S. government.  The servicers who work of the banks lie, cheat and steal in the name of the banks, taking property away from hard-working Americans using servicer-manufactured documents containing false and misrepresentative declarations.

WE HAVEN’T EVEN APPROACHED THE IDEA OF A CASHLESS SOCIETY YET

What the banks really want is a cashless society.   Many in the U.S. government support this idea.  Why?

  1. It’s a way to gain personal control of every hard-working American, forcing them to do transactions using a debit or credit card.
  2. Every transaction of the type identified in #1 is already being monitored by the U.S. government (FINCEN) and the private banking sector.
  3. It reduces the amount of goods and services sold and traded in the underground economy (or so they think).  It would actually promote and increase (incentivize) participation in the underground economy, more in rural areas than in the major cities.
  4. The U.S. government can simply take earned “credits” right out of peoples’ bank accounts any time it wants to, for taxes, child support, etc., leaving the individual with nothing to live on.

No one would want to migrate here after a move like that because illegals work for cash.  If no one possessed fiat “cash” (M1) then privacy rights would be completely removed.  By tapping into a bank account, the government could purposefully screw with anyone it wanted to, knowing exactly how much an individual is “leveraged”.  How in the world do you think the writers of Enemy Of The State fathomed this story line?  Do the writers know something we don’t?

When an individual can’t eat and feed his family because his “line of credit” or cash flow is suddenly cut off, what do you think will happen?   A classic “have not” scenario.  He takes from the “haves” by whatever means possible.   You really want to live in a society like that?  America is already ranked as one of the most dangerous places to live by Atlas & Boots and Forbes Magazine.  A cashless society would make a bad thing worse because the police cannot stop random acts of violence when they themselves could become instant victims.  No amount of deposited “fiat credit money” can stop a rebellion or even a full-scale revolution, which is what you’d have if the government insisted on going this route. The major cities would turn into blood baths.  I’m not being paranoid here.  Think about what you would do if you had to face this situation head-on.  What would you do?  After all, you gave the government your tax dollars and you voted for all of these politicians who loaded your “Government By The People” with hundreds of layers of bureaucracy, some of which has broken off and become a part of Deep State.

DO YOU SMELL SOCIALISM?

I majored in political science and journalism in college; thus, I posit the following scenario:

Imagine taking all of the money away from the rich and passing it around to all of the poor to fund the services necessary to accommodate the influx of non-citizens into America.  The poor will spend through all of their newly-found gratis like shit through a goose (an old saying of Gen. George S. Patton) and will then expect MORE.  Now there’s no future for American businesses because the wealthy will not be able to support their businesses and expand their businesses to accommodate more employees because they are broke (or taxed into non-existence), just like the rest of us.  This is why socialism hasn’t worked wherever it’s proliferated because someone has to pay for the “nanny state”, which the government created with your tax dollars. Socialism begats authoritarianism, which begats communism.  The result of communistic behaviors promotes crime (e.g. the Russian mafia, etc.) in order to circumvent and deliberately retaliate against government behaviors.

Everybody likes free stuff!  However, someone has to pay for the services that illegal immigrants are receiving in this country.  Someone has lost a job to an illegal immigrant.  Someone died at the hands of an illegal immigrant.   And more than 5,000 people are trying to get into this country illegally and the whole mess at the San Ysidro border crossing has been politicized to the point of nauseation.  No one is a racist just because they are implementing the laws that are in place in this country.  This is what the executive branch of our federal government was designed to do.  Blame our founding fathers for even thinking that we should all be safe and secure and live in peace and freedom.  Now I’m being facetious.  Depending on which political party (of the two) you belong to, you see 5,000 new voters, voting towards socialism and getting free stuff, or you see 5,000 new voters sucking off the teat of America and at some point in time, someone will have to pay for it. But how?

INCREASING TAXES PROMOTES REVOLUTIONARY IDEAS

Yes … just like in America’s Prohibition Era, whenever taxes were increased, people went underground to survive and the shadow economy flourished.  History has not changed.  U.S. government economists (like Bruce Bartlett) and socialist think tanks are still trying to figure out how to bring the shadow economy under control so they can tax it … yeah, good luck with that.  And who profits from all of this?  The banks.  After all, their “fed” is the one who keeps “loaning money” to the government, so it can continue to write checks its body can’t cash to support “nanny state” philosophies.

People seem to forget how history repeats itself.  It further seems to me that we got into a war with the British over a 3% tea tax, right?

The big outcry at the time was taxation without representation.  Think about the 23 taxes you pay on a loaf of bread and tell me that this country is not the frog swimming around in luke warm water. Unbeknownst to him, the master of the fire is turning the heat up to gradually boil him alive! Think about that the next time you have to pay for someone else’s direct benefit to your detriment (you’re broke again?).

TAXING APPROPRIATE SOURCES

Colorado and Washington State have discovered just how much extra revenue the recreational marijuana business brings in.  The federal government however, ironically doesn’t want to allow marijuana businesses to have bank accounts that the government can get legitimate tax gains from.  The irony of it all is that banks are great sources for laundering drug money, aren’t they?  When people who buy controlled substances like marijuana use cash they’ve taken from their pocket or their bank account, give it to a drug dealer in exchange for pot, who then uses those funds to go out and buy basic necessities to live on and spends the cash right back into the mainstream economy … that money ends up getting deposited into someone else’s bank account at some point in time down the road.  Yet, those in government that have created all of this “reefer madness paranoia” legislation seem to believe that the banking system Uncle Sam borrows from (and then spends it like a drunken sailor) plays no part in it; thus, the government shouldn’t be held accountable, even though it provided the vehicles and the mechanisms in which buying drugs is facilitated.  People pay for drugs with cash … not a debit or credit card.  Any cash can be “laundered” no matter what source it came from, even if legitimate.  Our foolish government could be taxing pot sales at all levels but the politicians won’t listen to the voters, will they?  And that’s just one area that the politicians who allegedly run this country aren’t listening to … or if they are listening … they don’t care and they vote the way they want to vote.  If they want to keep pot illegal, despite what the voters want, they’ll keep pot illegal.  This is another prime example of the way our government is to blame for its failure to counterbalance revenue shortfalls.

THE “CLASS SYSTEM” GAP FUELS THE CRIME RATE

And just when you thought that a cop shooting an unarmed “African-American” wasn’t bad enough, I still maintain that when you displace a family on the street … and the head of household runs out of options, you end up with more murder-suicides, suicides, death by cop and crimes against property when the system can ill afford to maintain law and order in the present day as it is … all because the local government, which has every means to change the environment in every one’s favor, still wants to make its “master plans” cater to those who can afford it.  It doesn’t matter what race, color or creed you are!  The biggest mistake facing America today is allowing the class system “gap” to widen. By allowing the class system gap to proliferate throughout America, the scales could tip to the point that when there’s nothing the “have nots” won’t do to take from the “haves”, we’ll end up in another civil war (regional in nature, maybe) … and it’s our state and federal politicians that have widened this gap … so they can come in and play nanny state.  The widening of the gap promotes the idea that socialism will fix it, which is false (if you’ve studied economics).

When it comes to a prime example of how easy it would be for civil insurrection to occur, visit an area that’s been placed under martial law (you may not see eye to eye with me on this).   Here’s a mild example … go into any hurricane-affected area and see how the government treats the locals.  Why was Blackwater brought into New Orleans following Hurricane Katrina?  To prevent armed insurrection … because that’s where the city was headed. Anyone who has been through the “Superdome” experience can attest to that. When disaster strikes, what’s the first thing the “have nots” do?  Loot!  It never ceases to amaze me that “have nots” would grab TV sets while looting a disaster area when the electricity is out.  You can’t eat or drink a TV.  You really think the pawn shops are going to accept stolen merchandise, just so you can have a cheeseburger?  The “have nots” come in every race, color and creed.  If they have no money and they’re hungry, what do think they’re going to do at the first opportunity? (I’ll let you figure that one out.)

When the 2008 financial collapse occurred on Wall Street, then-Secretary of the Treasury Hank Paulson was calling congressmen telling them that if they didn’t bail out the banks, martial law might have to be declared.  You see how the government’s mindset behaves when a disaster strikes. Hence, TARP was created.  Even more sadly, most government employees believe everything their government tells them!  That’s how the government gets more support for its nanny state policies!

THE FOUR MOST IMPORTANT BASICS IN LIFE: FOOD, WATER, SHELTER … AND A WAY TO MAKE A DECENT LIVING

If you’re employed in any one of these first three areas, you will always have an income because everyone needs these three things to survive in America.  This is no longer the American Dream but the American Nightmare.  Anyone living under substandard conditions will agree with me that the family unit is in jeopardy.  Tempers flare because of lack of money or the sudden shift in any one of the basic three things needed to survive, which includes being displaced from your home.  I wrote about this in Clouded Titles.

Now that I’ve painted a minuscule picture of  “the ghost of things to come”, we need to take a stand (at least on our own behalf) to take all of these factors into consideration … and then do something civil about it.

FOOD

I find it best to research one of the basic first three areas and find a niche within it.  I know a lot of people that are resellers for survival foods.  I know fewer who have actually now resorted to truck farming (it’s also an underground economic niche and can be very profitable) and I used to help pay my mortgage payments on my first home with a hen house full of laying hens (eggs are great barter material too).  In order to accomplish all that, you might think “country”.  There is a lot of unrestricted land out there and folks living in these areas tend to think a lot alike (they don’t like big government) … something the U.S. government doesn’t like.  Whatever the government doesn’t like is probably a great thing for America because anything that happens in the hinterland benefits the local economy, not DC.  All of the possible changes you could employ to affect a positive outcome for your local economy are a good thing, even if you’ve been foreclosed on and have to start over again.   There are areas of the country where land is still cheap and food production is in demand.  Even in WWII we had “Victory Gardens”.  Flea markets are a great source of networking!  Food trucks can also be a profitable business if run right, albeit you’ll be facing permitting issues and health regulations.

WATER

I cannot believe that people have actually run afoul of the law for harvesting rainwater.  However, it’s a great source of income.  Who would have ever thought that putting water in a plastic bottle and selling bottled water would ever work?  Whoever did is making a killing now because the well hasn’t run dry and the merchants have made the bottled water industry a necessity of life, even if it means you have to dispose of something that’s not biodegradable. With our water supplies / groundwater becoming contaminated (see Flint, Michigan), water filtration systems is also another big business that the wealthy certainly can afford.  Even smaller supply, pour-over systems sell well during hard times.  Man cannot live without water … so getting into any business that involves the production or supply of clean, potable water is a good thing.

SHELTER

Your PLAN B might include doing what I did in buying a tract of land, owner finance. My payments were $222 a month for 10 years.  Even on a fixed income, pulling a used mobile home out onto a tract of land works, especially if it’s paid off.  I used an investment return to pay for getting set up on 3/4-acre mortgage free.  Just to show you I’m not kidding, see below (front and back yard).  I was only 40 minutes from Austin, Texas!

This is what mortgage-free living can look like, if you have a PLAN B that you can start up on a small budget without having to get a mortgage. Anything relative to setting up shelters for people on unrestricted land out in the country is a good thing.  We had German Shepherds roaming the property so we never had to worry about break-ins.  It cost me less than $15,000 out of pocket to set up!   You could even do it for less with a little creative thinking!

It is amazing what you can find out there to live in, it’s peace and quiet country living … and you could put your property into a trust for asset protection to keep it away from the money-grubbing banksters or debt collectors trying to collect on judgments!  Sure, it’s not a McMansion, but it’s home and it’s a stress-free environment!  It’s also far from the madding crowd … so in the event of unrest, you’ve got more time to plan and react if you need to.  Anything connected to real estate … agents, brokers, investors, developers, storage sheds, portable buildings (which can be converted into housing) and cabins … can be profitable with a little marketing. Any carpentry skills become a real plus!

MAKING A DECENT LIVING

Retirement is NOT a part of my vocabulary. I don’t see what the big rush is to retire anyway, given the fact that the government would like you to wait until you’re 70 to start drawing Social In-security. Besides, any business worth having means that an entrepreneurial spirit is probably alive and well and is driving the business forward.  If you’ve lost your regular job (or you think you might lose your job), this is the time to start planning for your future.  An active LLC or incorporation costs next to nothing to set up and consulting businesses (like mine) take a lot less money to start up.  There are books out there that have oodles of information in them on how to start your own business. Find something you’re good at and go for it.  Don’t turn a negative foreclosure into a pity party.  Use it as your learning curve and don’t make the same mistake next time.  Examine what caused you to get into the mess in the first place and then … go out and do just the opposite.  The banks may hate you … but hey, mortgage free living is really where it’s at!  Being self-employed means taking home more of your paycheck NOW and not having to wait on a tax refund from the government, which has been operating in the negative since 1933.  It’s also another great way to live without borrowing!  Being creative about it is what I find most rewarding.  As an afterthought, only create these entities if you have the means to keep track of their accounting and tax filing status.

Retraining in later life is not as bad as it sounds, even if you’re disabled.  As long as you’ve got brains, there’s a consulting position out there or a desk job that will pay you a decent living with little up-front investment.  Thinking positive in this day and age is hard to do. There’s so much negativity around. The idea behind all of what I’ve just stated in my foregoing diatribe is designed to get your inner sanctum churning because the times, they are a-changing, again!

 

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