Documented Faked Debt vs Undocumented Real Debt:

Editor’s Note: I don’t want to get technical but it is quite necessary in order to understand a corroboration of my statements regarding (a) whether a loan is secured (b) whether the terms of repayment to the creditor were stated the same way in both the offer to the investor-lender and the borrower and (c) the identity of the creditor with a “loan receivable” as well as the status the account designated as loan receivable for a particular borrower.

The bottom lone is that this is all about money, not documents. UCC arguments may be used to bolster your position and provide the judge with a pathway out of the thorny thicket, but the initial attack must be on the debt itself, to wit: if the judge thinks you are attempting to argue your way out of a legitimate debt, you’ve already lost and no amount of legal theory, forgeries in the assignment chain or other skullduggery is going to change the ultimate result. In plain language there is no legitimate debt owed to either the current forecloser or it’s predecessors. In fact there is no debt at all owed to any of these parties.

The documents are a mere ruse to create the appearance of a loan when none existed. And conversely the lack of documents on the actual loan between the actual lender and the borrower is used to discredit the argument that there was a difference between the fake loan and the real one. But if you follow the actual money and the documents that actually show payments in and out of an escrow account that was referred to under various alias names, the conclusion is inescapable: the actual loans of actual money were neither voluntary nor secured.

Europe seems far more willing to tackle these thorny issues than the U.S. And so they will get to the goal post of stability ahead of us. They understand that there well might be the case in derivatives that they could be neither secured nor even of any value if they refer to a transaction that never existed. We refuse to consider that possibility on ideological grounds. This type of behavior will collapse our reputation with third world nations whose people’s perception of the world is more magical and spiritual than the current consensus amongst developed nations.

European bankers accept as a fact that derivative contracts might yet be required to be secured, since they are mostly not secured now. They understand that there really is no actual loan receivable account because the investment bankers replaced it with a mortgage bond deriving it’s value from a prospectus and pooling and servicing agreement, together with other “securitization documents” whose terms were completely ignored when the bankers moved the money around.

Europe’s bankers and regulators seem to have no problem in tackling the issue of over-collateralized on and cross collateralization when that specifically means that it exacerbates the issue of secured and unsecured creditors when the loan proceeds are used to fund the shortfall or default of another loan, contrary to the express terms of the borrower’s note, which, as we have said, is neither evidence of the creditor nor evidence if the terms of repayment as said terms were presented to the investor-lenders.

In litigation, this is the reason why banks and servicers are refusing to disclose basic issues of fact that would ordinarily be part of their initial pleading and exhibits if they were filing Foreclosures properly or giving proper instructions to the trustee. Discovery reveals that the documented transaction is a complete farce or ruse while the actual transaction (where money exchanged hands) has very little documentation.

They would be forced to stop foreclosing (a) because they can never prove they are the owner if the loan receivable for which the alleged note is proceeded as evidence and (b) they have no way of demonstrating much less corroborating the existence of a perfected lien. The recorded lien is a wild deed based upon a non-existent monetary transaction. Any further documentation arising out of a wild deed brings nothing of substance to the table.

This is where my approach has differed somewhat from the approach of Max Gardner. everything that Max explains is true and is excellent corroboration for the attacking the legitimacy of the debt, but the main attack must be on the legitimacy of the debt, lest homeowners continue to get stuck in the rabbit hole of arguing that deficiencies in the transfer of a legitimate debt somehow rendering the debt uncollectable. Attacking the transfers is am implicit admission of the legitimacy of the original debt recited in the fake note and mortgage. Attacking the origination of the debt as being faked, merely requires you to demand proof of what every other lender has been required to provide the court, without which, the court cannot allow foreclosure or collection.

This seems to be the approach getting the least traction in court rooms because it appears as a gimmick. Providing the judge with pleadings, discovery and proof that there existed both a fake transaction and a real one accepts the fact that there is a legitimate debt and gives the judge a choice of which path to take.