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I cannot overstate the importance of understanding the elements of securitization and the way it was distorted and continues to be distorted by banks who have pulled the wool over the eyes of just about everyone — including the borrowers themselves and their attorneys. Pleadings I have examined show that the lawyer or pro se litigant who drafted them are merely saying “there is something wrong here, but I don’t know what because the opposition won’t give me the information I need.” It then becomes a cat and mouse game as to what issues are relevant for discovery. In the end, even if the discovery is forthcoming neither the lawyer nor the homeowner knows what to do with it, which is why my firm provides litigation support to attorneys who are defending foreclosures.
In an effort to provide attorneys with the type of pleading necessary for affirmative defenses to actually mean anything —- and provide the platform for appropriate discovery, I am giving you a statement that has been used in some cases and could be used in most cases, although the originator depicted below is not one size fits all. There are several different types of originators but the one thing they all have in common in cases where claims of assignment and securitization are made, is that nearly all of them are subject to an Assignment and Assumption Agreement (see Neil Garfield on YouTube) which is to say that the loan is “sold” even before any application for loan is submitted.
The following is merely a potential guide, depending upon the facts of the case. It would be extremely helpful if you had a securitization and title report that you could attach or refer to in making these allegations. Once the matters are put in issue, the judge has no choice but to allow discovery on those points, which is why affirmative defenses are important. After you have stated your factual premises then you must choose between a variety of affirmative defenses that recognized by law, which is why this article is directed at attorneys. (I.e., the narrative below does not contain the affirmative defense — it only provides the factual basis for the affirmative defense of, for example, “Setoff.”)
Background: It is affirmatively alleged by Defendant that the originator shown on the promissory note and mortgage was a naked nominee, that the mortgage therefore had two nominees and no real party in interest, that the the mortgage lien was never perfected, and that neither the note nor the mortgage is legally enforceable because the reference is to a loan transaction that never in fact occurred.
It is further alleged that the defendant was tricked into signing documents that were predicated upon the advance of money by the originator — an advance that never occurred, and that this allegation is based upon the SEC filings of the parent company in which it is apparent that the business of the originator was not lending and that therefore the originator reported no loans receivable and no reserve for defaults in the balance sheet of its financial statement but did report fees received on its income statement.
Accordingly it is affirmatively alleged that any “sale” of the loan was a sham unsupported by consideration and that the true lender was concealed from the borrower for the purpose of creating a false paper trail and a false history of payments that would encourage investors to buy more mortgage bonds. It is affirmatively alleged that the true party in interest who advanced money from which funds were taken to fund a loan was a collective of investors who might be represented by an asset pool (REMIC trust) if the rules of the pooling and servicing agreement were followed. If the terms of the Pooling and Servicing Agreement were not followed then the account receivable is collectively held by a group of investors who are not represented by any trustee or manager. Based upon the facts of this case, the terms and conditions of the Pooling and Servicing Agreement were not followed in that the asset pool was not funded, the assets were not purchased and the conditions of a REMIC trust were not established.
By concealing and blocking information about the true lender, the defendant was prevented from reinstatement, modification, mediation or offset by the receipt of funds paid in mitigation. Accordingly the powers of the “servicer” derived from the Pooling and Servicing Agreement, do not allow for judgment to be entered in its own name, do not allow for the servicer to become the “creditor” by virtue of a judgment based upon untrue statements, and that the investors and the borrower are being victimized by a scheme in which money and property is diverted from the real parties in interest whose identities are concealed by the intermediaries who used said identities for personal profit. Further, if the strict conditions of the Pooling and Servicing Agreement were not followed, then the servicer has no direct privity with the REMIC trust and therefore lacks legal authority to act as servicer.
Lastly, the statements, demands and notices sent by the servicer conceal the actual financial transactions, including deductions from the principal balance due as result of (1) mitigation payments received by the agents of the real party in interest but which were not reported as applied and (2) continued payments by the “servicer” from funds supplied by the investment bank underwriter or its affiliates, after the borrower ceased making payments in order to conceal the true status of the loan for the purpose of providing misinformation that would encourage the investors to buy more bonds issued by REMIC trusts that were probably unfunded and never possessed any assets.
The continued payments and distribution reports were received by investors and applied thus reducing the account receivable balance but were not reported to the borrower since it would contradict the position of the servicer that the loan was declared in default and would contradict the allegation of the principal balance and accrued interest due to the owner of the account receivable.
The current foreclosure case represents a continuation of the pattern of behavior in which the true facts are obscured and the real parties in interest are prevented from settling any claims through modification, mediation or even payment in which only the investors as the sole owners of the account receivable may execute a valid satisfaction of mortgage and delivery of the original paid note.
Foreclosure Crisis Just Now Hitting Some States
http://realtormag.realtor.org/daily-news/2013/08/20/foreclosure-crisis-just-now-hitting-some-states
Here… It…. Comes… (Foreclosuregate)
http://market-ticker.org/akcs-www?post=223771
How to get your house for free: rare but possible
http://www.theage.com.au/business/world-business/how-to-get-your-house-for-free-rare-but-possible-20130821-2s9xt.html
Probe of foreclosure billing widens
http://www.denverpost.com/breakingnews/ci_23917779/probe-foreclosure-billing-widens
Homeowners Still Hurt by ‘Sloppy’ Service on Mortgages, Feds Say — AOL Real Estate
http://realestate.aol.com/blog/2013/08/26/CFPB-report-criticizes-mortgage-servicers/
30 thoughts on “Affirmative Defenses in Foreclosure Litigation”
I would like to find an aggressive and experienced foreclosure defense attorney in the State of Wisconsin. I have not yet missed any payments, but would like to formulate a strategy to exit a severely upside-down mortgage situation.
My 1st mortgage was transferred to MERS in 11/2006 after being sold from USA Funding and MidCountry. My second was through WAMU and Chase. My 1st isnow is serviced by Wells Fargo and owned by Citigroup.
US Bank and SN Servicing has submitted Forged documents in our federal bankruptcy case too and we will never stop perusing them in court for damages. We are also asking our Federal judge to prosecute their current attorney out of Jacksonville Florida who continued to defend this case knowing that forged document are before a federal court. All the offending parties at SN Servicing and their attorneys are committing a serious crime against our country. We have filed a formal complaint with the FBI and the US attorney general and many great Judges all across this nation are finally stopping them from this kind of fraud on American families. US Bank and SN servicing and their attorneys are also violating a serious consent order that was to protect the people from these crimes but they could care less. Please feel free to have your clients join a class action suit so that we can end their behavior with a multi billion dollar punitive damage suit. Join us, call Ray Shelton in Florida at 352 274 8467
@ I wantmynpv ,
Great link ,, the cases may all be different but they do rhyme… and that undated mystery allonge thing is almost as much of a joke as a “Linda Greene”.
Reply to carie’s question at Aug 27 at 1:02 pm : I have asked this question numerous times over the last few years (and at least once a month for the last six months) and servicer’s response is always: Investor is xxxx Bank, NA, as trustee for the trust. When advised that I asked who the “creditor” was and not the “investor” and that the trustee or trust can not be the creditor, they ignore this and continue to respond that “the investor is ….” Servicer just changed this month to SPS and they are using the same terminology, which again was questioned via a QWR and am waiting to see how they respond, but expect to receive same reply.
One more thing is right now Wells Fargo is still servicing most part of 1.3 million of Ginnie Mae pooled loan from WaMu that were not included in the FDIC arrangement with JPMorgan Chase.
So the case that was mention is perfect for drawing the attention that everyone of those loan will not be on some FDIC purchase list!
@iwantmynpv great case information which bring us back to the reason why this stuff is not resolved because the Federal Government is to deep in hiding ownership. Shelia Bair is hail some hero but the unraveling of what the FDIC in these casing show Bair was only looking out for the insurance fund of the FDIC and that if she would have done Washington Mutual Bank (WaMu) correctly it would have used the insurance reserves and would have needed to get monies from the US Treasury and she would at that time been under the thumb of Timothy Geithner who Bair hated.
Now in light of the Szymoniak case that was sealed for a 1 1/2yrs after it was settled and with the types of cases involving FDIC seizing the banks WaMu, IndyMac and these merges in Countrywide and Wachovia were not only plain loan are involved but the government insured loans have a problem because Ginnie Mae is in possession of the blank endorsed Notes.
The problem that the Bank have with Ginnie Mae pool loans is there is only one standard operating procedure and that is that the blank Note is relinquish to Ginnie Mae and that Note is now toast because Ginnie Mae as a party by law cannot purchase the debt. So there is never going to be an allonge because the fact is that these VA & FHA loans will all have a blank Note to the end of time because Ginnie ae cannot re-endorse the Note and there is no debt to sell because Ginnie Mae did not and could not purchase by law and rules, and cannot sell the debt.
Obama and the Administration hailed Bair but she screw this entire thing up to save face! You cannot tell me that after all these years somebody in Washington had not figure this crap out?
Nice article on how FIRREA is in use against the banking establishments.
http://www.kslaw.com/imageserver/KSPublic/library/publication/ca082113.pdf#page=1
Another NY Victory by a smart Judge, who simply gets it. Most of the cases that are part of a securitization, and certainly any loans that went through a FDIC Receivership (INDY, WAMU, AHM, etc..) all refer to a Loan Schedule. Check out this decision in favor of the Defendant.
http://decisions.courts.state.ny.us/fcas/fcas_docs/2013AUG/51003079520095SCIV.pdf
The alleged lenders need to wake. We the people are coming for you.
Weidner’s good , he recently changed his site around and may have changed hosts ,, I have many of his better essays saved but they’re on my “dead” computer ,, no worries hard drive is good and files are retrievable (motherboard failed) ,, but the drive is incompatible with my new pc … I can (maybe in a month or two) have them up somewhere..
and oops again – re weidner / 4closure fraud’s post. it wasn’t a NY case – it’s CA Glaski.
Carie I was told by Wells Fargo back in 2010 that they could not tell me because of privacy reasons.
Now I just asked Treasury, Justice, FBI, SEC, OCC, & HUD in light of Szymoniak complaint being unsealed and my complaint was exactly as her complaint in the fact that the assignment was a forgery and the Federal Government accepted an settlement for 92,735 forgeries how was my case not a part of some restitution of 92,735 Sen Warren is asking about or that my larger complaint that 800,000 government loan where illegally foreclosed.
I hope Warren is using my information because she mention the government settled for $255 million when the bank liability in false claims are as much of $37 billion.
Now I later found out that Wells Fargo when telling me they could not tell me who my investor was, however when pressure they said Ginnie Mae was the lien holder which is a lie because Ginnie Mae cannot be a lie holder.
But here is the why I believe the is Why the Fed did not bring charges against Lorraine Brown and instead let some state prosecute her, so the Fed does not have the names of her million admitted to forgeries. How is not the Federal government not prosecuting someone that committed 1 million forgeries in all 50 States? How does yes get way with some 5yr plead at one State!
Szymoniak said that still properties are being foreclosed with the name of Linda Green on it!
oops – that wasn’t Weidner. He was quoting 4closurefraud, I guess.
I have a hard time with Weidner’s website…..
Weidner has a valuable contribution today about a case in NY and the cut-off date of the trust. I encourage everyone to read the whole post for its discussion of the borrower’s standing to argue
a post cut-off assignment and the rams to a trust for accepting a
post-cut-off assignment.
Weidner:
“I had argued that given the apparent widespread failure to transfer mortgages into these trusts an attempt to later sue for foreclosure in the name of the trust (by the Servicer as a nominee or agent of the Trust, etc) was presumptively invalid because the alleged “owner” of the mortgage in fact was not the owner because they never took their ownership interest in a timely fashion and the law bars them from doing so at a later date.”
What struck me here is the word “presumption” (mol). I would think that not only does the law prohibit a trust from accepting a loan
post cut-off date, but that a presumption in fact exists that a trust wouldn’t because it destroys the purpose of the trust (etc – and why would a trust accept a loan in default?!) If we can support the imposition of a possibly first-impression “presumption” that a trust wouldn’t (not just couldn’t, as odd as that sounds) accept a late
assignment, we might move the burden of proof that a trust did where it belongs – on the bankster making the allegation. And what evidence would there be that the trust has in fact accepted a trust-killing loan?
An assignment requires acceptance by the assignee. (wouldn’t anyone, including a trust, be saying “I’m not taking this turkey!”?)
From Uslegal.com:
“A legal presumption is a conclusion based upon a particular set of facts, combined with established laws, logic or reasoning. It is a rule of law which allows a court to assume a fact is true until it is rebutted by the greater weight (preponderance) of the evidence against it.
Examples of legal presumptions, among others, include:
A child born of a husband and wife living together is presumed to be the natural child of the husband.
A person who has disappeared and not been heard from for seven years is presumed to be dead.
An accused person is presumed innocent until proven guilty.”
Courts imo should recognize two presumptions:
1) No trust would accept a post cut-off transfer because doing so destroys the purpose of the trust
2) No trust would accept a loan in default
Same goes for the note. The alleged endorsements are undated.
The note does present a further complication, though, but not insurmountable (although I’m convinced the note does in fact define who may enforce it – one who takes by transfer).
If you bought a relatively new note from me for 500k and I was supposed to endorse it to you and deliver it to you, but I didn’t for
4 years and by then, it was in default, would you take it?
Wouldn’t you refuse to accept it and instead demand the
500k you paid me for it? (When you sue me, wouldn’t I be the one who had to prove I delivered the note to you four years ago? )
I’m curious—has anyone here asked (lately) their servicer point blank: “WHO is the real creditor of my loan?” (which is our right under TILA to know.).
If so—what did they say?
Did they say one of these three things/lies:
“We don’t have to tell you that because of privacy laws…”
or
“The trustee of the securitization trust is the creditor…”
or
“We have complied with TILA by telling you the name of the MBS trust that your loan was pooled into…”
Yes Carie they the banksters are digging themselves a deeper grave.
NEVER AGAIN.
Re. Glaski appeal:
BofA:
“…especially now that the court’s decision will be published, rehearing is warranted to prevent the confusion and uncertainty the opinion will sow among the California courts…”
HA HA HA…good one.
http://www.huffingtonpost.com/2013/08/27/foreclosed-renters-homeless_n_3806745.html?utm_hp_ref=business
does somebody know a case or judgement , where the Mortgage
was not notarized in Florida ?
Yes American Home Mortgage used a notary from Williamson county Texas. Funny I am in Williamson county and AHMSI used a Florida notary on my forged documents.
I have seen other theories about looking at the very beginning of the transaction, and now I can see clearly why. The economy is not going to come back unless housing is up and running the way it should be and legally. There was a crooked mortgage broker and a crooked appraiser, crooked seller and crooked attorney (did time in federal prison) involved in my transaction. Also, the loan/note did not make it to the trust on time, but a document filed in the county Reg. of deeds made it look like it was transferred to a trust FIVE YEARS after the trust closed.
We will always have illegal foreclosure until one of the “too big to jail” fat cats like Wilber Ross gets indicted! American Home Mortgage/Owcen force foreclosure using illegal tatics. Indict Wilbur Ross on RICO- http://t.co/CfwTaBXD2n
Neil I believe this is your best posting every at least for me because it made me sit back and re-think what I as a mortgage loan officer and borrower did and had done to me with my loan.
As a Mortgage loan officer I could not sign as doing my own loan but who is not actually adding to this file when its your file. But I remember locking the loan with Washington Mutual Bank (WaMu) with a 30 day lock and the loan closed before the 30 days expired.
But even that the funding came from the bank I was working at the bank that was a correspondent of a host of banks including WaMu. Now the loan was under the correspondent agreement that the loan would be delivered to WaMu after the closing to their purchasing unit to be purchase. Once the was closed the closing package was overnight mailed to and if all thing were in ordered including assignment the loan was then purchase with end day of the closing before a first payment was even due, and with a government insured loan as my loan was the loan was then placed into the Ginnie Mae pool before the first payment was ever due.
So the loan worked itself into three parties hands and held by Ginnie Mae who cannot act as a lender because they are not, and they don’t purchase the debt but had the blank endorsed Note relinquish to them, which does separate the Note from the debt, as known by lenders/issuers and Ginnie Mae because there is no purchase that occurs. You see in my case Great Western Bank sold the loan to WaMu, so they know a sell must occur, yet when transferring the Note to Ginnie Mae there is not sell, but after the relinquishing of the Note and a sell of the securities there is an advancement of fund from the sell of securities.
Now the borrowers are unaware of who is the “holder in due course” and 100% of the government insured loans in the Ginnie Mae pools during 2009-2010 could not be consider for modifications because Ginnie Mae is not authorize to change an interest rate or term. The modification where made a part of the contract in exchange for the money given under TARP. The HAMP agreements where not that lender who signed the agreement could pick and choice, and it was either the borrower was qualified or disqualified for a modification.
Government insure borrower were told it was up to your investor, and that investor in the MERS system was Ginnie Mae who was in physical possession of the blank Note. Long and short of it is that can you really call this a home loan as the lender never intended to keep the loan as in days it was shipped off for the purpose to create a securities! 800,000 government insured loan in the Ginnie pools where not even process for a modification and simply foreclosed instead!
Attorney Garfield, My name is Grace Leland. I am 72 years old. I have a sale date scheduled for September 26, 2013 that can be verified on the recontrust.com website. I will attach the image to this e-mail FYI. I am in California. Can you help me? I would like to do it in pro per with your assistance. Isn’t the Glaski v. Bank of America case almost identical to mine? This is a published case from what I understand. How much money would I need to send you if I were to ask you to do your securitization report for me so I could at least attach it as an exhibit to a state or federal complaint pursuant to your recommendation. I don’t trust anyone else Attorney Garfield. Please help me.
Grace Leland (310) 376-4357 (310) 433-9711
Chrustine
The public interest gatekeepers at all levels failed in their pubkic duty to the un educated vulnerable and incapscitated.
And nothing happens in a vacuum. Last week, Nasdaq went down. Forex went down. Now, Eurex went down. Don’t anybody tell me something isn’t seriously up… The word everywhere (confirmed by Karen Hudes, former General Counsel at the World Bank, fired and reinstated and still on her cruisade to blow the whistle as loudly as she can) is “currency reset”, whatever that means for us. Catherine Austin Fitts also mentioned it. So, things are moving, one way or the other…
Deutsche Boerse says Eurex trading again after outage
FRANKFURT | Mon Aug 26, 2013 10:43am BST
(Reuters) – Exchange operator Deutsche Boerse said trading on its derivatives platform Eurex had been halted for over an hour on Monday, without giving an immediate explanation for the failure.
Deutsche Boerse said in a statement on its website that trading resumed at 0922 Central European Time, with a company spokesman declining to comment further.
The market impact of the trading glitch appeared to have been limited. A public holiday in London meant most traders in Europe’s largest equity market were not at their desks, and trading volumes remained well below their daily average.
Global markets have faced technological glitches recently. Last week the Nasdaq (NDAQ.O) stock exchange halted trading for three hours citing a “connectivity issue”.
Earlier this year, the Chicago Board Options Exchange delayed the start of trading there for half a day.
Deutsche Boerse last week said its cash and derivatives markets were available for 99.99 percent of the time in 2012.
(Reporting by Edward Taylor and Blaise Robinson; editing by Ludwig Burger and Keiron Henderson)
Visit stage2omega at: http://www.stage2omega.com/?xg_source=msg_mes_network
Yes a man
The entire system based on greed, greed and more greed is becoming quite moribund… Eventually, it will be put out of its (and our) agony. Just a question of time and patience.
The Real Risk at JPMorgan Isn’t Its Legal Mess
By SUZANNE MCGEE, The Fiscal Times
August 20, 2013
http://www.thefiscaltimes.com/Columns/2013/08/20/The-Real-Risk-at-JPMorgan-Chase.aspx
Remember that scene in Casablanca when Claude Rains, playing Captain Renault in the World War II-era city of the title, closing down Rick’s casino with the immortal words, “I’m shocked, shocked to find that gambling is going on in here,” even as he gratefully pockets his own winnings?
Well, welcome to the Wall Street circa 2013. JPMorgan Chase (NYSE: JPM) seems to be mired in a perfect regulatory storm, with some of its European traders facing criminal charges in connection with the London Whale losses, its commodities operations still faced with uncertainty as its aluminum warehouse storage “scandal” continues, and now the “revelation” that the bank hired the children of top Chinese officials in hopes that this would help it win more business. (It may even have worked – surprise, surprise. Odds are, though, that the nepotism scandal will prove to be a non-starter on the regulatory front: Once that can of worms is opened, it’s hard to imagine where it will ever end.)
RELATED: JPMORGAN CHINA PROBE SENDS CHILLS THROUGH INVESTMENT BANKS
In all, The Wall Street Journal notes, the bank faces as least seven investigations by various regulators. Yet while the bank says its legal woes might – in the worst case scenario – add $6.8 billion in losses above its existing reserves, this isn’t in and of itself a reason to flee the stock.
Set those possible losses against the bank’s earnings performance, its valuation (only 8.6 times trailing earnings), its lavish 2.93 percent dividend yield (almost enough to put it into the Dogs of the Dow category). Then factor in that short positions by traders hoping to profit from a fall in the bank’s share price have declined by nearly 5 percent lately, and still account for only about 1 percent of all shares outstanding, and you have a recipe for a rapid rebound.
What will trigger that? Who knows. But the odds certainly favor it, once the headline risks abate.
The one real risk here? The bank doesn’t just need to persuade investors that it takes compliance and risk management seriously, but to really, truly take compliance and risk management seriously.
In his letter to shareholders earlier this year, CEO Jamie Dimon wrote that the bank “must and will do a better job at compliance.”
“Let me be perfectly clear,” Dimon wrote. “These problems were our fault, and it is our job to fix them. In fact, I feel terrible that we let our regulators down. We are devoted to ensuring that our systems, practices, controls, technology and, above all, culture meet the highest standards. We want to be considered one of the best banks – across all measures – by our shareholders, our customers and our regulators.”
Any further revelations of questionable losses or trading activity and the context in which investors view JPMorgan Chase will turn much darker – and rightfully so. Once is a bad error of judgment; twice is unforgivable.
But most of the risks that we know the bank will face – rising interest rates, a decline in mortgage refinancing, the need to satisfy regulators on both capital plans and an emergency liquidation strategy – are common to all banks. What all banks don’t share is JPMorgan Chase’s dominant market position and the intense focus of its management team.
If you want to stay away from this stock, do so because it is mismanaging its business, failing to maximize returns or dropping the ball on risk management – not because of headlines about litigation. Unless JPMorgan Chase has been manipulating global markets on a massive scale (of the kind I’ve only encountered in crime fiction), then the ongoing litigation might leave a slight but not lasting tarnish on its name that time will rapidly remove.
Glaski was finally published.
the banksters are taking this case seriously
http://stopforeclosurefraud.com/2013/08/26/glaski-v-bank-of-america-appellants-opening-brief-respondents-brief-appellants-reply-brief/
NEVER AGAIN
And another issue i have is the issuance of a irs form 1099a stating indymac/onewest as lender is exhibited to challenge what has been presented as true to the court by parties to the lawsuit and what was recorded and by who.