TO PAY OR NOT TO PAY: PREPARING FOR BATTLE

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LIVINGLIES STOREFRONT HAS BEEN OVERHAULED.

TAKE A LOOK AT IT. NAVIGATION HAS BEEN GREATLY IMPROVED.

So let’s take a look at the steps to making decisions about your mortgage.

FIRST THINGS FIRST: EVERYTHING HERE IS FOR GENERAL INFORMATION AND IS NOT ADVICE OR AN OPINION ON YOUR SPECIFIC CASE. YOU SHOULD CHECK WITH AN ATTORNEY LICENSED IN THE JURISDICTION IN WHICH YOUR PROPERTY IS LOCATED. REMEMBER FIRST AND FOREMOST THAT THERE IS NO MAGIC BULLET TO STOPPING A FORECLOSURE, STOPPING AN EVICTION OR GETTING A MODIFICATION. THE ONLY THING THAT WILL FORCE THE FORECLOSER TO STOP IS A COURT ORDER. THE ONLY THING THAT WILL FORCE THE MODIFICATION IS A COURT ORDER DECLARING THAT THE SERVICER OR BANK DID NOT CONSIDER OR DID NOT PROPERLY CONSIDER YOUR PROPOSAL.

As for whether to pay or not to pay, we are talking about either an inevitable time when the homeowner won’t be able to pay or a voluntary decision to stop paying. Proactive behavior is the order of the day. Get educated, get the information to challenge the claims of those who are claiming they know the principal due on the obligation and those who claim they know the identity of the party or parties to whom the obligation is owed.

Or, the decision is simply whether the homeowner has had enough, and is going to walk away from a bad investment.

There are legal, tax and other personal considerations in any of these decisions, so you should seek professional help before you decide what you are going to do and how you are going to do it.

Asking for modification is becoming an effective tool for buying time and determining whether something might be done for you — but here again it is only the aggressive and persistent fighter who is willing to challenge the servicer or bank on the basis that the the modification proposed was never actually considered and was instead simply denied because the servicer ro bank would make more money in foreclosure even though the investor would be worse off.

There are many people who are moving toward stopping payment and using whatever time they can buy from the system to live in the house without payment in order to recover some of their loss. No guarantee as to how long they have. It could be a few months, but I know of cases where it has been a few years.

ALL THAT SAID, what you want to do is discover any discrepancies between the representations contained in the following:

1. TO THE BORROWER: The closing papers and title chain. This requires the forensic  TILA analysis and title report with commentary.
2. TO THE INVESTOR: The closing papers and securitization chain. This requires the securitization analysis and report. Realize that this is the representation of the way the securitization was going to work when they took the money from the investor, normally before the closing and even before you made application for your loan.
3. TO THE INVESTOR AND THE BORROWER: The way the money was actually handled — the money trail. This requires an accounting for all money in and out from the borrower and A LOAN LEVEL ACCOUNTING FOR all money in and out to the creditor. They are not the same thing. Often the servicer is paying the creditor at the same time that it is declaring a default against the borrower. Often they claim payments or principal due that has been paid by third parties. This splits the obligation into a secured and an unsecured portion, which in turn leads to the inevitable conclusion that the note and mortgage were intentionally split by the securitizers. The UCC has a provision for that and it at the very least raises the question of whether the mortgage agreement is still enforceable — but it does not eliminate the obligation.
4. TO THE COURT: The paperwork filed in court where some party, unknown usually until the foreclosure becomes an issue, claims ownership of the loan although they provide no proof of any specific transaction in which money exchanged hands. Here is where “representations of counsel” are used in lieu of actual proof. This requires (not mandatory) an expert declaration).

The point is that if you compare the above four trails, you will find in the usual securitized situation discrepancies between the representations made to the borrower, and the representations made to the investor/creditor. Then you will find discrepancies and conflicts between the representations made to the investor (and the representations made to the borrower) and the actual handling of the money which ignores the parties, conditions and restrictions stated in the mortgage, note, closing papers, and securitization documents. And if you listen carefully and attentively you will hear misrepresentation from counsel that conflict with all three other categories.

Now for the tools to use.

1. We provide a COMBO TITLE and securitization Report (see above) because we are coaxing you into doing the whole job instead of the minimum. This report should be targeted at looking at both open and closed loans, determining whether the right parties executed the right instruments. It mostly happens, as you have been reading about robo-signing, surrogate signing, fabrication and forgery, that there are numerous breaks in the authority of the the people and the companies whom those people say they work for which in turn results in a break in the chain of title. It is in the comparison of the Title and Securitization search that you can see how anyone could even claim authority to execute a substitution of trustee, notice of default or notice of sale. The objective here is to determine whether the mortgage agreement is enforceable — not to declare that the whole thing was a fraud and therefore the home should go to the borrower without payment. 
2. You should also get the Forensic TILA Analysis. This, especially in combination with the COMBO, could provide the basis for TILA rescission. Don’t discount that option. It is powerful tool and the failure of the lender to file a declaratory action with the statute of limitations period provided by the TILA statutes may operate as a waiver of any defenses or claim they have against the validity of the rescission. And remember that rescission is also a remedy for various types of common law and statutory fraud actions.
3. The Loan level accounting is something you need only if it is available and the rest of the information turns out to be in the public records. This is what each case is REALLY about — the MONEY. By directing the Court’s attention to the entire money trail instead of just that portion between the borrower and the servicer, you will be able to raise issues of a fact that appear to be unresolvable.
   
4. Remember that argument over the meaning of documents is one thing, but presenting the court with issues that show or seek to know where the money actually went, who got it and how it was allocated is a very different thing for most judges. Finding actual transactions between the securitization participants in which money exchanged hands trumps any argument about the meaning of some provision in the documents.
   
5. Livinglies will provide an affidavit (after full payment) on the COMBO but that is only an affidavit that the work was done and the facts determined by the search are accurately reported — it is not an opinion nor a compelling expert story of how the obligation, mortgage and note were all created and how they were moved or attempted to be moved (transferred). 
6. Then there is the Expert declaration, which frankly takes several hours to write, using the materials developed from the COMBO, the forensic Review, the Loan Level Accounting and the Pleadings, if any. Here is where you get the signature and notarization from Neil Garfield or one of the other analysts as the case requires, telling a story tot he court to enable the court to understand this transaction. 
7. Lastly, there is the consultation with Neil which requires that all the above work be done, so he can direct the attorney on potential strategies and tactics that are currently working. The client is allowed to listen in and the conversation is part of attorney work product privilege. There are no such consultations without a licensed attorney representing the homeowner. NO exceptions. Specific objections and argument are covered along with the foundation for the introduction of the homeowner’s evidence.

Remember we are not offering rescue or relief. We are offering the data and other information and analysis to enable litigants to have the evidence necessary to present their side of a case.

Tags: bankruptcy, borrower, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, LOAN MODIFICATION, modification, quiet title, rescission, RESPA, securitization, TILA audit, trustee, WEISBAND
Posted in bubble, Corruption, Eviction, securities fraud |