Show Me the Money!!!

Posted on November 11, 2013 by Neil Garfield Apparently I have been unsuccessful in getting the main point across about the so called securiti!ation of loans " sho# me the money is the demand, not sho# me the note$ %irst, in most cases, the securiti!ation process never happened despite the pile of paper generated by the sham securiti!ation scheme$ &he 'mismanaged( money of investors really amounts to intentionally N)& depositing the investor money into the trusts that had issued the bonds$ It also represented a #hole different #orld of under#riting that bro*e every rule in the boo* for ris* management$ +ut that #as the point$ &hey #anted the ris* to be higher than #as advertised so they could bet, on inside information that only the ban*s had, that the loans and bonds #ould fail or be substantially diminished roughly in proportion to the drop in real estate prices$ ,o they needed loans to fail or at least for mar*et conditions to change such that the ban*s could declare a 'credit event( and collect insurance and other money that should have gone to investors$ +ut the point is that the loan closings, #ere, for the most part, a complete sham #ith stra#men at every seat at the closing table e-cept for the borro#ers #ho #ere completely una#are of #ho they #ere ta*ing a loan from and under #hat conditions$ &he problem that I am still encountering #ith both homeo#ners and their foreclosure defense attorneys is the disconnect bet#een *no#ing the money arrived at the closing table and the #rongful conclusion that it must have come from the payee on the note and the mortgagee on the mortgage$ In most cases the payee #as a stra#man, the mortgagee #as a stra#man, and the lender #as a stra#man$ &he #orst part is that they #ere stra#men in a fictitious transaction " i$e$ the loan never occurred #hich is #hy in common pleading today the foreclosing party scrupulously avoids alleging that a loan #as ever made to the homeo#ner$ &hey don.t #ant the burden of proof on them in their complaint that there #as a loan because there #as no loan$ +A,I/ P01A2ING 133)34 Instead of alleging the loan and financial in5ury they s*ip to the signing of the documents$ 6es, the homeo#ner signed many documents, but the bargain #as that the homeo#ner #ould get a loan from the people #ith #hom he had accepted an offer$ &he loan #as consideration for the contract, and #ithout consideration there is no enforcement of any contract$ &his is the stic*ing point in the minds of many la#yers, including foreclosure defense attorneys$ In fact, even the client finds it hard to believe he never had a deal #ith the people on the signed documents$ After all money 2I2 sho# up at the closing table, so ho# could deny the loan7 And #hy should the homeo#ner #in in litigation #ith the foreclosing party #hen it is so obvious that the homeo#ner did receive money, and therefore by operation and presumption of la# #as obliged to pay it bac*7 I am trying to ma*e this as simple as possible and directly address the issue that la#yers are having applying the true facts of the transaction to the re8uirements of contract la# and property la# evolved over centuries$ 9ere *no#ledge of a loan does not ma*e anyone a lender$ If I *no# you received a loan from anyone that gives me no rights$ If anything, my *no#ledge might be an invasion of privacy if you didn.t tell me$ An enforceable contract re8uires offer by one party, acceptance by the other party and /)N,I213A&I)N passing bet#een those parties$ &his is basic contract la#$ ,*irting the re8uirements of contract la# and property la# opens Pandora.s bo- #ith hope crushed

and annihilation a certainty$ It is because avoiding basic precepts of la# eliminates certainty in the mar*etplace for any transaction$ &he real description of the real transaction is simple4 in most cases the investors gave money to investment ban*ers under false pretenses but the money #as given and the investment ban*ers had it$ &hat #as a real transaction, even though the paper#or* that supposedly provided the terms of the investment #ere completely ignored$ &he investor money #as being held by the investment ban*$ 3eal money and no doubt that occurred$ Ne-t, for simplicity sa*e, the investment ban* funded the origination or ac8uisition of loans through a series of conduits, some of #hich included regional ban*s #ho don.t sho# up as foreclosing parties but #ho made billions acting as conduits to scrub the money before it #as received by the closing agent$ &he net effect #as a #ire transfer from an entity #ith no relation or connection to the homeo#ner, the closing agent, the lender, the payee, the mortgagee, the mortgage bro*er or the originator$ &he #ire transfer is received by the closing agent and applied to a 'closing( that #as a sham$ &he paper#or* #as there and the money #as there, but the money never came from the parties to the paper#or*$ In some cases :perhaps 20 2;<= the loans #ere ac8uired in the same #ay but there #as no need to have a closing agent, to ma*e it loo* li*e a bona fide transaction #as ta*ing place$ In most cases, the loan origination #as a complete sham$ ,o #ho is the lender7 It can only be the the investors #ho #ere the actual source of funds$ +ut, as #e have seen in multiple la#suits from lenders, insurers, credit default s#ap counterparties, and the federal government, the ban*s claimed to be the lender since the money loo*ed li*e it had come from them, even tough they #ere violating the terms of their agreement #ith the investors and #ere acting as an agent or conduit for the investors$ ,o then I am as*ed, #hat difference does that ma*e7 &he ans#er is that the paper#or* ma*es it seem that the loan #as an e-ecuted contract #ith offer, acceptance and consideration, but it failed in reality because none of the parties to the #ritten documents #ere in fact a lender, creditor or too* part in any #ay in any real transaction #ith the homeo#ner$ &he moment after the loan documents #ere signed, the homeo#ner could not obtain a satisfaction of mortgage and return of the paid note, because the investors #ere the only people #ho could sign such documentation$ +ut the investors could not return the original note because they never received it$ And even if they received it, someone else had their name on the note as the payee$ And the investor could not e-ecute a satisfaction of mortgage that #ould have cleared the title of that encumbrance because they had never received the mortgage document, nor any assignment, nor #as their name on the mortgage or deed of trust as beneficiary, mortgagee, lender or anything else$ ,o the bottom line is that the paper trail is 5ust that " a trail of paper unsupported by any real transaction$ If it #ere other#ise you can bet the +an*s #ould be producing canceled chec*s and #ire transfers and telling me to shut up$ +ut in my cases, they are fighting me tooth and nail so they are not ordered to produce it$ +ut they are telling me to please shut up$ A paper trail can only be one thing under la# " evidence of a transaction$ &he debt is created #hen the money is received and by la# the debtor is the receiver of the funds and the creditor is the source of the funds$ %irst thing #e learn in /ontracts 101 is that the note is not the debt, it is evidence of the debt$ &he mortgage is not the debt, and it isn.t even evidence of the debt$ it is a separate agreement to provide enforcement mechanisms for the note$ +ut the note #as e-ecuted #ith the e-pectation that the homeo#ner #ould be getting money from the payee on the note$ &hey didn.t get money from the payee on the note :in most cases=$ In fact, they didn.t get money from any of the parties disclosed to them

in the disclosure statements and >?2 settlement forms re8uired by la#$ &o ma*e matters #orse, the homeo#ner did not receive money from AN6)N1 in the paper trail$ ,o this #as not a table funded loan, this #as an ?N%?N212 loan transaction #hich ma*es it unenforceable$ &he current practice of not claiming in the allegations of the foreclosing party that a loan ever too* place is an effort to force the homeo#ner to state it as an affirmative defense " thus violating due process$ &he homeo#ner should be able to simply deny the allegation #hich #ould *eep the burden of proof on the foreclosing party$ &hen the foreclosing party #ould need to sho# proof of payment in order to ma*e a prima facie case$ Instead 5udges are allo#ing the complaint to supposedly state a cause of action #ithout alleging the loan and #ithout alleging financial in5ury #hich opens Pandora.s bo- in discovery$ ,o let.s loo* at the complaint and #hat it means$ &he foreclosing party need only allege that the homeo#ner signed the paper#or*, and didn.t comply$ the rest is history and 'inevitable$( The principles of pleading are that there must be a present controversy that is not hypothetical or to be inferred$ &he simple rule is that you must ma*e a short plain statement of ultimate facts upon #hich relief could be granted$ Alleging the e-ecution of a document by one party #ithout alleging that it #as part of an enforceable and e-ecuted contract is alleging that you have evidence of something but you #on.t say #hether anything actually happened$ &herefore you #on.t say if you have financially damaged$ &his flies in the face of the basic rule of construction in filing a complaint4 2?&6 +31A/> )% 2?&6 2A9AG1, /A?,A&I)N In contract la#, this means a duty imposed by a contract that is enforceable$ I submit that it is basic bold blac* letter la# that if you don.t allege a transaction conducted pursuant to a contract based upon the essential elements of offer, acceptance and consideration you have failed to state a cause of action and you have failed to establish the foundation for alleging that you #ere damaged$ %urther, I submit that the failure to ma*e such allegations fails to invo*e the 5urisdiction of the court over the parties or the property or the rents$ And I further submit that any 5udgment rendered #ithout a proffer of evidence of the loan of money by the parties in the paper trail is void, based upon fraud and should be vacated$ ,imple reasoning4 if those complaints are not dismissed for lac* of 5urisdiction and 5udgements are entered, the homeo#ner is stuc* #ith possibility that someone #ill sho# up #ith the real promissory note and be able to prove it #as their money that the homeo#ner received$ @hat #ill be the defense of the homeo#ner in that position7 &hat is #hy #e have la#s, rules of civil procedure, and pleading re8uirements$ If those foreclosure sales are not vacated, the fact is that anyone holding property sub5ect to claims of securiti!ation #ill never be able to get rid of the mortgage encumbrance even if they pay it off in full as demanded by some party in the paper trail$ &hey cannot sell the property and #arranty title, they cannot refinance, and they cannot modify or settle the claims #ithout the real source of money being involved in the process$