Tag Archives: risk averse

GUTTING THE UNDERBELLY OF THE BEAST – PART 5

(OP-ED, first posted: September 7, 2018) —

The writer of this post is a paralegal and consultant to attorneys on matters involving chain of title, foreclosures and document manufacturing.  The opinions expressed herein are that of the writer’s only and do not constitute legal or financial advice.  Any use of the theories or ideas suggested in this post is entirely at your discretion and will probably result in disaster without the proper legal help.

Now comes the fun part!

It’s not the punch line … it’s the back end of the set-up!

This is where risk aversion and the filing of claims are twained!

JURISDICTION

When a real estate brokerage, title company, document mill or law firm is created, incorporated or organized by statute (an LLC, an LP, an LLP, a PA, a PC, etc.), these are statutory creatures of the state they are formed, organized or incorporated in.  This means the state has jurisdiction over the  “misbehaviors” of these entities and the agents-representatives-employees who represent them.  Someone has to answer to somebody for something!

In a law firm, there are named partners, of which one of them is a managing partner or supervising attorney.  That person generally is the contact person for not only service of process (can act as the Registered Agent or is in contact with the Registered Agent) but is also the individual that is named as the contact person for the firm’s errors and omissions (“E & O”) insurance.  Law firm E & O insurance costs are hefty, depending on the number of attorneys, partners, etc. to be insured.  It is implied here that each participating attorney has: (1) an education in law; (2) has passed the state bar exam; and (3) has applied for and received a license to practice law in that state for which he or she sat for the state bar in.  Whether the attorney is a novice or a seasoned veteran, each attorney has to pass muster for moral turpitude and character before getting licensed.  The state bars are generally the policing agency responsible for disciplining attorneys when they do something egregious or violate any of the Rules of Professional Conduct.  In short, everyone in the law firm, including the partners and the supervisory attorneys are liable and held responsible by the disciplinary agency that governs their behaviors, namely, the state bar’s disciplinary committee.  These committees are generally off-shoots of the judicial system of things in each state.   The behaviors of lawyers are regulated by the states they practice in, so each state’s Supreme Court decides whether they practice law in their respective states or not.  The supervising attorney is also responsible for the behaviors of all of the “non-lawyers” working in the firm.  The foregoing is a restatement for insurance purposes … we’ll get to that in a moment.

UPL: THE UNAUTHORIZED PRACTICE OF LAW

Each state bar also has an Unauthorized Practice of Law Committee, which generally is an organized group of “henchmen” that investigate matters of relevance when non-lawyers either: (a.) attempt to represent paying clients as attorneys or advocates; and (b.) practice law, which is a statutorily-prescribed and heavily-regulated profession.  Part of the problem with today’s society is that even though attorneys have to go through a lot of schooling and testing and licensing, a lot of the body politic doesn’t trust them.  There have been numerous instances where malpractice has been committed and thus, a lot of attorneys have made a bad name for the profession.  People don’t even trust the profession as a whole, because many state bar associations don’t discipline their misbehaving lawyers enough or to the degree that it satisfies the desires of the body politic.  This is why non-lawyers have jumped into the legal fray.  In real property law, lawyers are tasked with document review to make sure that everything contained within a document is legally sound.  Because of the unveiling of illegitimate processes conducted by servicers and their lackeys in creating phony documents, everyone thinks they know how to read, analyze, interpret and determine various causes of action that will fall right in line with getting a paycheck equal to or better than a practicing lawyer. Promoting oneself as having the ability to review documents and give opinions about what’s in them had better have been followed with “J.D.” and “Esq.” (yes, I know, it’s a title of nobility … let’s not go there!); otherwise, the UPL Committee steps in when they become aware of the practice.  You see, in the legal system, the UPL Committees were set up to protect the paychecks of attorneys and not the paychecks of non-lawyers!  Most non-lawyer violators (for UPL) get ONE warning.  If they keep doing what they were warned ONCE NOT TO DO, then felony charges are filed against them and they are prosecuted to the fullest extent of the law.  The foregoing is a restatement for insurance purposes … we’ll get to that in a moment.

FORECLOSURE COURT JUDGES

This body of “lawyers” have either been elected or appointed to serve on the bench because they have demonstrated the capacity in the understanding of the rules of civil procedure, the rules of criminal procedure, the rules of evidence and generally, the body of law that accompanies the field they serve as judges in.  For the purposes of this article, I focus on the state judges and NOT federal (as they are appointed for life) because state judges are generally elected and thus responsible to voters and constituents alike.  They are also responsible to the county they serve in while on the bench and hold themselves out as “employees” of the county, with the privilege of sovereign immunity from the decisions they make.  These judges also have a Code of Conduct (or Judicial Canons) which they must abide by.  In Florida, for example, when a judge is suspected of committing an infraction that harms the public or specific persons within the cases he or she rules upon in the process of presiding over a case, that judge can be brought up on disciplinary charges before the Judicial Qualifications Commission (the “JQC”).  Every state has some sort of judicial disciplinary committee, even though they may have different names.  The Supreme Courts of each state can also determine whether a judge remains on the bench, based on their behaviors or the lack thereof, albeit in their consideration of the recommendations of the judicial disciplinary committee.

EXPOSURE AND RISK

We now come to the part about how “state statutes” play into the mix.  Virtually every state has “fraudulent document statutes”.  Some have less severe penalties than others. I put them all into The Quiet Title War Manual under “state-specific resources”, which took up half the book, explaining in three paragraphs on actionable offenses in each state regarding the recording of false documents.

In Florida, for example, the state legislature enacted the Florida Criminal Code § 817.535, which makes it a third-degree felony to record a document known to contain false and misrepresentative statements for the purposes (intent) to steal the property (by and through the foreclosure process) … PLUS … a fine equal to the market value of the home!  Missouri just recently passed a similar statute, which also allows for doing a Cancellation & Expungement action to clear title of bogus assignments and other related documents.

Interestingly enough, the foregoing Florida statute also has a “civil component”.  This is equally important to understand, as the statute is interchangeable in concept, yet its meaning is clear … you record a phony document in order to create standing and further rely on it in court, you’re in trouble!  This puts everyone whose name appears in the recorded assignment at risk. The subsequent filing of foreclosure complaint pleadings, which rely on false and misrepresentative statements in order to claim the right to foreclose, put the actors within the document at legal risk.  Once the “assignment” itself (containing the false and misrepresentative information) is recorded, other documents can then be challenged based on the falsity of the information contained in the assignments, such as: (a.) Appointments of Substitute Trustee; (b.) Affidavits of Lost Note; and (c.) Notice of Default and Sale.  Post-foreclosure, any transfer in title through Trustee’s Deeds or Clerk’s Deeds can also be challenged, predicated on the falsity of the statements contained within the assignment that was manufactured in order to create standing.

The county clerks are immune from suits in the removal of phony documents, as they are generally mandated by statute to record what is given to them, as long as it contains all of the elements of a proper recording (according to statute).  Still, John O’Brien, the Register of Deeds from Southern Essex District in Massachusetts, will not record documents that contain the name of known robosigners.  Some states’ clerks will turn over suspicious documents to their local DA’s for review before recording.  This still does not absolve the wrongdoing if the documents contain false and misrepresentative information.

This is not the part where you read the foregoing and get mad.  This is the part where you get “clarity”.  It’s all about the assignments!   It’s always been about the assignments!  Any attorney, trustee, auctioneer or any law firm or title company attempting to transfer title as the result of either a judicial or non-judicial foreclosure has EXPOSURE and thus, inherent RISK of being attacked (“called on the carpet”) and held liable! These types of behaviors are what insurance companies are trying to avoid!

To finalize this section of my work, let’s posit for a moment that the attorney brought this assignment up in court (or attached it to his pleadings as an Exhibit) and got the court to rely on it’s validity, even though the other side brought in an expert witness attorney who testified as to the falsity of the document’s contents and the judge ignored the expert attorney’s testimony and awarded the property to the bank anyway.  Let’s also include that fact that most of the time, it’s the mortgage loan servicer that is claiming to have authority to foreclose on behalf of the lender, with no Limited Power of Attorney (“LPOA”) to show for it.  This document can also be challenged, because these documents are restrictive in nature and many times, there’s noting in the LPOA that allows the servicer to foreclose (but do everything else, which increases its exposure as well).

Everyone in the foregoing scenario has to answer to a higher authority   There are title companies out there who help the banks foreclose on real property and they get to answer to the State Department of Insurance.  Mortgage loan servicers have to be licensed and bonded and have to answer to the Department of Banking and Finance.  If this wasn’t so, Fidelity National Financial wouldn’t have been so quick to “spin off” Lender Processing Services when the SHTF post-financial collapse of 2008 and DOCX became a 3-ring media circus, resulting in the prosecution and imprisonment of Lorraine M. Brown, it’s principal.

It is at this point that we start to create the biggest, baddest paper trail imaginable … and I will explain that paper trail in my next segment … stay tuned!!

 

 

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GUTTING THE UNDERBELLY OF THE BEAST – PART 4

(OP-ED, first posted: September 4, 2018) —

The writer of this post is a paralegal and consultant to attorneys on matters involving chain of title, foreclosures and document manufacturing.  The opinions expressed herein are that of the writer’s only and do not constitute legal or financial advice.  Any use of the theories or ideas suggested in this post is entirely at your discretion and will probably result in disaster without the proper legal help.  By the end of this “series” of posts, you should understand what RISK is! 

WHY INSURANCE COMPANIES ARE “RISK AVERSE”

Like most of us who take the time to analyze the “odds” (remember the Hunger Games … “may the odds be ever in your favor”?), insurance companies make money betting on sure things.  They don’t like paying out claims.  They won’t insure individuals who may have a propensity to do “crazy shit” (like skydive, bungee jump, etc.) that might result in a serious accident or death.  They won’t insure companies that have a higher risk than normal for being sued (for committing fraud, etc.).  They also make exceptions to items within “the system of things” concerning real property, which is where this part of the evisceration of “the system of things” takes place.

SCHEDULE “B”

If you’ve ever looked at a “Schedule B” in an Homeowner’s Indemnity Policy, you will see that things that aren’t recorded in the public records as part of a chain of title are exempt from coverage. Heck, if you’ve looked at a number of the exceptions on that portion of the policy, virtually everything that you could imagine, from encroachments against a registered legal description, riparian right or legal description changes due to accretion or avulsion, virtually every obvious thing that could be insured, isn’t.  Then what is the policy worth spending extra money on?   Because the insurance companies are willing to bet you won’t ever file a claim on anything having to do with title.  That’s a sure moneymaker to them.  Anything that has alleged “coverage” on it (or so you thought) is probably exempt thanks to “Schedule B”.  Get your title policy out and look at Schedule B and you can easily spot what I’m talking about here.  This is how insurance companies make most of their money.  They exempt issues and activities that could result in them having to pay out claims.  The insurance companies really didn’t understand the “risks” that were played on them in the securitization game either, which is why they filed lawsuits against many of the REMICs’ sponsor-sellers when they realized the “game was rigged” in favor of the banks. They were paying out too many claims on the seller’s title policies because the chain of title was all screwed up.  As history has shown us, the sponsor-sellers of these REMIC trusts made off (Madoff) like bandits!

“BEAN COUNTERS”

This is why actuarial tables are developed by the “bean counters”.  Based on past performances of certain professions or activities, insurance companies know whether or not a certain profession is susceptible to risk; thus, the insurer having to pay out a claim to an injured party at some point.  The insurance companies have had years of experience in paying (or not paying) out claims to know which professions and activities present the most risk; thus, they become “risk averse”, meaning, they run away from risk.  It’s like the little guy who has a chance to walk away from a fist fight with a big guy twice his size.  Not every scenario presents us with a David versus Goliath option … and that’s the battle homeowners have been fighting.

AGENCY, NEXUS AND CIVIL CONSPIRACY

Now we come to the part in the “story” where you are dealing with a foreclosure.  Since I started doing research into “clouded titles” and discovered that part of the equation included the recording of certain documents, which make up a property owner’s chain of title, many of these documents appeared to have presented a certain “risk” of being challenged as to their validity.  I don’t have to spend time (here) wasting the effort to explain the 2008 financial collapse and the resulting “cause and effect” of what was finally unveiled to Main Street … securitization … and the sloppy paperwork (or the lack thereof) that eventually crept its way into every county’s land records throughout the entire United States.  Anyone that understands “robosigning” or “document manufacturing” or has read Clouded Titles knows what I’m talking about here.

As was revealed in both the Williamson County Real Property Records Audit and Osceola County Forensic Examination that my firm conducted, despite the fact that the mortgage loan servicers all agreed NOT to produce phony documents and record them in the land records in an attempt to “create standing” to foreclose, they’re still doing it anyway to this very day!

Each one of the parties involved in any Assignment or Mortgage or Deed of Trust had to establish a contractual relationship with one another.  By signing agreements to provide certain provisions for each assignment, a “nexus” (or connection) was created that could tie all of the participating individuals or entities together.  Each individual working within a company acts as an “agent” (or representative, whether an employee or independent contractor) of the principal.  Agency is thus established by the party granting the status (the “grantor” of anything) within “the system of things” … NOT the Grantee (the agent).  The agent however, in tandem with other agents from other nexuses created by outside party contracts, can be held liable for misrepresentation on a document and so can the principals themselves.  If you sign an insurance policy and claim that you do not engage in activities that are “risk averse” and you go out and commit suicide (for example) within a 2-year period, the insurance company will not pay because they learned quickly (ab initio) that people who find themselves destitute (such as in the crash of 1929), take out a life insurance policy with whatever money they have left and then kill themselves (by jumping out a window) believing that their heirs will get money from the insurer, quickly got the attention of the insurance companies, who quickly developed a 2-year waiver of indemnity for killing yourself and conveniently called it a “suicide clause”.

When two or more actors are involved in the creation and execution of a document, each party becomes suspect (NOT GUILTY UNTIL PROVEN GUILTY) as to taking part in what could be alleged to be a civil conspiracy.  I think many attorneys doing foreclosure defense have missed that part of the equation because they don’t bother to depose EVERY AVAILABLE PARTY that is represented within any given document being used as evidence against their clients.  Why?  Because depositions start at somewhere around $3,000 apiece and most homeowners don’t want to spend that kind of money.  The “other side” will bring their attorney into the mix, who will object to virtually every question asked that is posited to prove that a contractual relationship existed somewhere, with the intention of thwarting anything discoverable that can be used to defeat the foreclosure or to seek damages.  I also believe that many (not all) foreclosure defense attorneys are inherently lazy and would rather do the business model of “the taking of people’s money” [not necessarily at this firm (below), for which I find their name symbolic] and eventually watching them lose their homes anyway:

Not every state actually has a “cause of action” for civil conspiracy; however, every state has a cause of action for …

NEGLIGENCE

… and this is where “the system of things” starts to get interesting.  When the same group or groups of individuals misbehave and participate in document manufacturing scams that deprive homeowners of their rights, they draw unwanted attention to themselves.  Take Bryan Bly, Crystal Moore and Dhurata Doko for instance.  They have all been deposed (more than once as I understand it from watching their deposition videos) and were asked questions about their “risky behaviors” in creating assignments of mortgage and deeds of trust.  At the time these three were deposed, they were all employed by Nationwide Title Clearing, Inc. of Palm Harbor, Florida.  By virtue of the name used, one should be able to assimilate what they mean by “title clearing”.   In fact, this company boasts (online) that it has been involved in the recording of over 16,000,000 documents since its inception.  It’s kind of like the McDonald’s of document mills (over 16-million served).  In my book, that’s not something to brag about just to get clients. In fact, one of Core Logic’s attorneys (in a webinar I was privy to) declared that companies making up documents to “clear title” or “assign or transfer” mortgage loans or notes had better be careful in what they create and attest to for fear of retribution under the laws covering the Unauthorized Practice of Law (UPL), which is a felony in every state that has such a statute covering this “risky behavior”.   Thus, one who KNEW OR SHOULD HAVE KNOWN that the behavior they’ve engaged in constituted a felony, could be deemed negligent.  This also goes for attorneys working for the banks that are “suspect” for participating in the “process” (after recording, return to the ABC Law Firm). The law firm’s apparent involvement in creating (or directing the creation of) an assignment in order to foreclose becomes a party to the civil conspiracy.

Every attorney is bound by a state bar association’s Rules of Professional Conduct, each of which is drafted (in whole or in part) according to the national substantive rules promulgated by the American Bar Association.  There’s a section on “Misconduct”, which can be used to punish attorneys who come into court and commit certain misdeeds, like relying on or making false and misrepresentative statements (in the court record or in open court).  These attorneys are held to a higher standard, where they KNEW OR SHOULD HAVE KNOWN that what they were attesting to in writing or orally in open court, could be held against them personally and they could be held liable for their negligent behavior.

ENTITY REPRESENTATION

In “cutting to the chase”, banks and mortgage loan servicers (and title companies or document manufacturing companies who are working with them in creating documents to “clear title” or “create standing”) HAVE TO have a law firm representing them in court; otherwise, they can’t appear.  If we use “the system of things” to “hold the attorney and his law firm’s “feet to the fire”, they would naturally be discouraged from appearing in court to represent their “entity”, which may have used false and misrepresentative statements in a document contained in their foreclosure arsenal.  In other words, you wonder why law firms are “substituted out” right in the middle of a case?  Look at the case and seek out what the firm being substituted out might have done that created a liability for itself that it is trying to distance itself from.  The firms appear to be working in tandem to thwart any appearance of misbehavior that could be exposed for which they could, individually or as a firm, be held liable.  Which is why law firms have E & O insurance (errors and omissions).

It’s all about the insurance … and what’s not covered … that they’re worried about!   More details about insurance and bonding and the court’s responsibilities to NOT indulge felony behavior and the potential resulting liabilities for their actions coming soon to this blog post  … stay tuned!

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GUTTING THE UNDERBELLY OF THE BEAST – PART 2

(OP-ED, first posted: August 29, 2018) —

The writer of this post is a paralegal and consultant to attorneys on matters involving chain of title, foreclosures and document manufacturing.  The opinions expressed herein are that of the writer’s only and do not constitute legal or financial advice. 

It is hard to say how much we spend on the average for insurance coverage for a wide and varied range of issues.  I personally spend over $7,000 a year on insurance and I’m sure that others spend well more than that.   My CPA’s tell me that what you spend on ALL insurance is supposed to equal roughly 10% of your estimated gross income.  If you’re spending more than that, something might be amiss with your personal financial planning.

As a business, basic liability insurance for a small business like mine consulting firm runs about $350 a year.  I am sure that other larger firms are then paying into the tens of thousands for insurance coverage depending on their liability, which is based on risk assessment.  Remember, insurance companies are risk averse, which means they shy away from companies that might posit high-risk behaviors.  The insurance companies are in business to make money, not spend it paying claims on damages based on the imputed negligence of their insureds.  Insurance companies buy office buildings and other large real estate holdings because they can make a guaranteed income with a full list of tenants paying every month (as an example). Insurance companies ARE the financial guarantee (in large part) guaranteeing “right behavior” of their insureds.

WHERE THE COUNTIES FIT IN … 

Counties take in annual property taxes from every property owner registered within their databases, based on assessments of market values and mill levies (dollars per thousand times the estimated assessed value of the property).  By law, the counties are always in first lien position, because residency is a jurisdictional issue that was legally addressed by state legislatures long before mortgage liens were.  The law makes it easy for a county, over time, to take property away from those who refuse to pay taxes when they become due, whether ad valorem, non-ad valorem or special assessment in nature. Those of you who think you can put property back into the state of allodial title to avoid paying taxes can stop reading now. Those days are seriously OVER and you will lose.

Most counties are self-insured.  A lot of the pool of money that the counties rely on for self insurance purposes come from property taxes and go into a general fund.  Most counties (the larger ones in population) have Risk Managers.  Smaller counties generally employ County Executives, which do principally the same thing: damage control.  Counties generally enjoy sovereign immunity.  There is plenty of case law to back that up.  Sovereign immunity, by definition, is a judicial doctrine that prevents the government or its political subdivisions, departments, and agencies from being sued without its consent. The doctrine stems from the ancient English principle that the monarch (or king) can do no wrong.  Ahhhh … but we all know on occasion the “king, or the king’s men … DO WRONG”!  Sadly, many of them have gotten away with it.

Counties are sued generally (as you will read about if you did your research like I did before writing Beyond End Game Strategies) for the acts of persons employed by the county.  Let’s say someone who works for the county is driving along and runs a red light and slams into your vehicle in an intersection.  Believe it or not, THIS type of suit against counties is more predominant than what I’m going to address in this and future articles.  Or a child falls into a public swimming pool and drowns because there was no lifeguard around to save him because the lifeguard was off making time with the female pool staff.  This could be construed as simple negligence, for which the county could be liable.

ATTORNEYS CAN BE HELD LIABLE FOR MALPRACTICE … BOTH OF THEM!

“Imagine if you will” (to quote the late Rod Serling, or “submitted for your approval”) … going after an attorney for malpractice.  Here’s one article posted on Lexology® you’ll probably want to read as a “concept piece”: Tripartite Relationship: Insurers suing panel counsel lawyers – lexology

I covered the foregoing on my recent radio show on WKDW-FM, 97.5, North Port, FL, streaming live at kdwradio.com.  You can hear it this Friday night (Aug. 31) at 6 pm EDT!  Click LISTEN NOW and wait for the program to start.

The substance of this is based on negligence (negligent behavior).  Now, imagine this being applied to foreclosure defense attorneys who fail to perform as expected (and required).  Imagine further going after the other side’s attorney for bringing a false and misrepresentative document into a foreclosure case, relying on it and making similarly subjective, misrepresentative statements in open court, allowing the court to step all over your rights in handing your property over to the bank’s mortgage loan servicer.  Why isn’t your attorney paying attention to the false and misrepresentative information on the assignments when this is the “keys to the kingdom”?   If your attorney has knowledge about the falsity of such a document, he is bound by the Professional Code of Conduct to report it.  Have you ever heard of an attorney that has done this?   I’ll let you answer that question yourself because I can’t think of one.

When a complaint is filed with the State Bar (of any state), they supposedly have a duty to examine the complaint for its legitimacy.  THIS IS NOT SOMETHING YOU SHOULD DO AS A PRO SE LITIGANT!  YOU ARE NOT A BAR-LICENSED ATTORNEY!  YOU HAVE NO CODE OF PROFESSIONAL CONDUCT YOU HAVE TO ANSWER TO OR FOLLOW!

Subsequent to filing a claim with the State Bar, the E & O policy of the attorney and his law firm is researched and located and contacted.  Either a claim will be paid out upon the formal filing of a complaint or in the alternative, claims for attorney representation in front of the state bar could be denied, which means the attorney “is bleeding green”.   This is “the system of things” operating in reverse because here … you weren’t paid a benefit, but the attorney was denied a benefit, which was a detriment to him.  If the insurance company is allowed to sue to recoup what it has paid out in damages, then they’ll go after the law firm, etc. and make them “bleed green” … this is assuming you suffered a damage (post-foreclosure judgment, loss of home, loss of equity).  Once a judgment is obtained, a Motion to Vacate is the only thing that sets the stage for any subsequent action.  YOU CANNOT DO THIS YOURSELF!   YOU ARE NOT DEFENDING A TRAFFIC TICKET HERE!  PRO SE LITIGANTS WILL END UP LOSING THEIR HOME, IN JAIL OR THE SUBJECT OF A HEFTY FINE, OR BOTH!  You did not learn any of this in civics class!  They don’t teach this stuff in high school OR college for a reason.  They don’t want you to know “the system of things” and how it works.

LIABILITY … AND WHY THE BANKS ARE NOT EAGER TO TRANSFER TITLE ON FORECLOSED HOMES … 

Let’s take the case of the 2-year-old toddler who accompanied his parents into their new (resale) home in Tampa, Florida.   The home they just acquired was situated next to a foreclosed home.  There were clearly signs in the windows denoting that the property had been foreclosed on or was about to be.  Like most busy parents in the middle of unloading a moving truck, they lost track of the toddler.  They found him floating face down in the pool of the foreclosed home, which was not covered up properly, and efforts to revive him failed.  Of course, despite the foreclosure on the property, the bank claimed it wasn’t liable because the homeowner’s name was still on title and he was required to pay for insurance and bore all of the responsibility for anything happening on the property.   Sadly, this happens a lot (as to the lack of title transfer) with foreclosures, until the banks find a bona fide purchaser.  So in my mind, the homeowner, despite the fact he’s vacated the premises, he’s still liable.  If the hazard insurance, which covers personal liability, isn’t maintained or isn’t in place at all because of a lapse in coverage, the homeowner then becomes solely and financially liable to the parents of the deceased child.  This is why banks won’t transfer title right away after seizing a property.   In fact, in California, you aren’t even buying the property in foreclosure!  You’re buying the lien!  How many of you know that?  This would make Trustee’s Deeds a complete sham!  Why isn’t anyone attacking the validity of Trustee’s Deeds based on California law?   Lack of knowledge, I suspect.  Those of you reading this for the first time wouldn’t have a clue as to where to turn to next, so don’t even try.

Title companies are also risk averse and won’t allow transfer until things are “buttoned up” … or so we’ve been told.  This is where more illicit document manufacturing occurs.  But it gets even better because licensed operators (attorneys, law firms, notaries, debt collectors, insurance companies, title companies) are all responsible to a higher authority!  Stay tuned!

 

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GUTTING THE UNDERBELLY OF THE BEAST – PART 1

(OP-ED, first posted: August 25, 2018) —

The writer of this post is a paralegal and consultant to attorneys on matters involving chain of title, foreclosures and document manufacturing.  The opinions expressed herein are that of the writer’s only and do not constitute legal or financial advice. 

Everything these days revolves around insurance of some sort.  The credibility of some professions is backed up with insurance or bonding to guarantee against losses incurred by inadvertent or blatant illicit behaviors of those insured or bonded.  The system of things revolves around the dollar.  People have put their faith in the dollar, whether it has any backing or not.  As long as people (the body politic) can be fooled into a perception of believing that this so-called “legal tender” can still be used to pay debts “public or private”, the system will continue to flourish, whether “in the red” or “in the black”.

REALITY CHECK

Look how many times you purchase insurance in your life and for what purposes (CYA).

Virtually all 50 states require some sort of minimum liability auto insurance, through a policy that guarantees the insurance company will cover a loss if a claim is filed against the policy.  Many folks just get a liability policy if they’re driving a car that has no lien against it; however, an auto loan on a vehicle will require that you have full coverage.  Based on your driving record and your credit score, full coverage insurance can rape your monthly income, denying you of even basic needs just because you need to get to work and a means of insurable transportation to get you there.

Throughout the last decade of this dismal fight to keep Americans in health insurance, we’ve been forced to buy health insurance coverage through some sort of program connected with the Affordable Care Act.  Seniors over 65 are forced to buy Medicare.  That too comes with a price tag.  Part B is $134 a month, no matter WHO you go through to get insurance.  Any supplement insurance (which is highly recommended by agents these days), adds another $80-$100 a month on top of the $134 you pay every month just to avoid a financial catastrophe due to health issues.

You can’t get a mortgage loan without insuring the property with hazard insurance. When homeowners get into trouble, the first thing to be neglected is the hazard insurance payment.  Then the property taxes.  The lender (or its servicer) then has to cover any claimed losses by putting forced placed insurance on the property because the property owner failed to do so.  This process, which I call a “cheap date”, is used in part to prove that the servicer, acting on behalf of the lender, has some sort of interest to protect in the property, especially when it comes time to foreclose on said property.

If you own a business, most if not all responsible business owners carry a general liability insurance policy.  These policies generally start at $350 a year, which is no big deal. However, given any type of special insurance coverage, you’ll find that the more “risk averse” an insurer has to weigh in on a given situation, the more expensive the policy. For example, if your business deals in a product or service that comes with a higher risk than most of injuring the general public, this forces the premiums to go up.

Because many Americans are not well-funded and are deep in debt, the last type of insurance policy they encounter is a life insurance policy, to make sure that if something happens to them, their loved ones at least have some minimal nest egg to keep them going. This is where a majority of Americans put the least amount of dollars. Most of us are underinsured in this category.  I’ve heard a lot of folks say that “you’re making a bet with the insurance company that you’re going to live so long before they have to pay out”.  This is true, which is why I buy 10 to 15-year term insurance.  If I live past 80, I’m lucky.  Good luck getting insurance past 85, because virtually all insurance companies will deny coverage past that age because they know what the odds are of a quick payout.

By the time you’re 80 (if you live that long), you should have some sort of an “estate” to leave behind that’s worth something.  Most Americans however don’t even have $50,000 in savings they can fall back on if, God forbid, something goes wrong.  In fact, the number of consumer bankruptcies, especially those over age 65, is on the upswing. Student loans, mortgages and consumer debt are driving the bankruptcy filings, statistically well ahead of medical catastrophes.  However, I would proffer that “debt stress” would cater to certain medical issues at some point.

A NECESSARY EVIL

There’s insurance coverage out there for virtually every kind of behavior, including liability for actions taken against you that could be deemed illegal.  This is why we have “bonds” in place for judges, clerks, virtually all elected officials, notaries and credit repair people, to name a few.  Most counties in America are “self-insured”.  Most states have what is known as an “insurance risk pool” or a back-up fund of money to pay for damages that the state or its actors might cause against its citizens.

Law firms and real estate brokerages have what is known as “E & O” policies (or should) in order to exist.  “E & O” stands for Errors & Omissions (policies).  These types of policies generally pay out for legal services in case the insured comes under fire for erroneous or negligent behavior.  It’s a “knew or should have known better” scenario.  So the E & O primarily covers legal fees for representing the insured and/or paying out claims against the insured’s policy.

If there wasn’t an insurance policy covering something somewhere, our litigious society would drive this country into a financial meltdown sooner than later.  The only way that a meltdown would occur sooner than later is if the “perception” of the masses were to dynamically change to reflect an understanding that “insurance” supports the “underbelly of the beast.”   This is why I wrote the “Beyond End Game Strategies” supplement.  The concepts expressed here go beyond the traditional thoughts of most Americans. Insurance companies are “risk averse” … and their “end game” is to deny claims whenever possible due to exceptional or non-covered acts of the insured.  This is why insurance companies file more declaratory relief actions than most any other entity in America … to have a court determine whether they’re responsible to pay a claim on behalf of the insured.

Do you see where my thought processes are going?  There is a method to the madness and the “beast” is the system of things.

And … at some point … a meltdown in America is likely.

Stay tuned for Part 2.  It gets better! 

 

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