Institutional Bias Must End For the Sake of Society

Jan 20, 2022

I have been inundated by emails and comments from people who are frustrated by the apparent futility of challenging claims whose success depends solely and entirely on the ability of the lawyer for a designated claimant to outlast their targets — i.e. consumers of fake debt products.

There is a substantive response and a procedural response. Here is my substantive response:

The problem is institutional bias. The courts are informed from information in the public domain and by what goes on in court. In court, once something is admitted, it is fact. Once something is admitted into evidence without objection it is fact. Judges are supposed to use “common sense” which means what they already know about transactions in general.

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But what they “know” is derived entirely from information that is skewed by institutional bias. That institutional bias is derived from policy decisions that were made during a period of time (2008-2010) where the “emergency” was perceived strictly through the lens of threats from Wall Street banks.

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In so doing, they changed the law, ad hoc, to allow virtual creditors to be designated despite the complete absence of any viable or meritorious claim to administer, collect or enforce the “debts” that they routinely pursue.

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Under existing law, there is no debt to pursue if there is no person or company that maintains an unpaid loan account receivable. This has been true as long as there have been laws.

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The fact that payment has not been received according to a schedule is not a default under current law unless it produces a financial loss or injury arising from an unpaid receivable — not a “loss” arising from the loss of expected revenue that is claimed to be unrelated to the purported loan transaction.

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Wall Street cannot and should not have it both ways.

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Either those revenue sources are related to the consumer transactions or they’re not.

If they are not related, then they have no financial loss arising from nonpayment and thus no claim for payment.

If they are related, then it should have been disclosed and the undisclosed revenues and profits must be offered or paid to the consumer, at least in part.

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Holding homeowners responsible for loss of revenues from schemes dependent upon the sale of securities is contrary to the law and the public interest. Allowing those participants to continue their predation on the consumer to generate even more revenue is unconscionable and unconstitutional.

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For the state or Federal government to deprive a consumer or homeowner of their title or possession to property or to deprive a consumer of his or her financial reputation there must be a claim that is recognized at law. No such claim exists unless there exists a claimant who has suffered actual or imminent financial loss derived from the subject of the transaction. The subject of the transaction is either a loan or it is a securities scheme with a loan component. There is no loan component if there is no loan account with an unpaid balance.

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Yet data reports are routinely presented in administrative proceedings, court proceedings, correspondence, and notices that fail to identify or even allow inquiry into the existence or status of an unpaid loan account receivable.

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It is either presumed or if the presumption fails, then the claim is denied. But it is only denied at the end of litigation where the consumer or homeowner has spent $50,000 if they have access to resources from which those expenses can be paid. If they don’t have such access the claim is granted based upon the presumption of facts derived from fabricated documents presenting false information.

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What you could be asking the IG to do, is to investigate whether the CFPB and Federal Reserve are intentionally avoiding their mandate to protect the country the economy, and consumers specifically (in the case of the CFPB). In fact, one could argue that the institutional bias has caused dilution of the currency by allowing the private sector to issue “cash equivalent” unregulated securities.

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The net effect of the current Wall Street “innovations” has been a hard sell of personal contact, correspondence, and advertising designed to get consumers to take on more debt so Wall Street can sell more securities. The basic fundamental elements of a loan transaction have been destroyed without any notice or information provided to consumers who utilize various debt products.

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Consumers don’t know that the designated “lender” (i.e., virtual creditor) has no stake in the outcome of the transaction.

They don’t know that they can’t rely on appraisals or underwriting because the goal is not to profit from interest on loans but rather the sale of securities.

They don’t know that the proceeds from the sale of securities completely pay off all participants, lenders, and underwriters several times over.

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And so they can’t be said to have accepted those undisclosed terms. And yet, everyday consumers believe they’re bound by those terms, and the courts enforce them — a phenomenon that is completely based upon institutional bias that produces inaccurate and misleading information about the presumed existence of enforceable loan account receivable that do not exist on the accounting ledgers of any company.

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Fundamentally, the institutions and courts must overcome their fear of armageddon. Wal Street has both promised and threatened the government with economic collapse in the event of interference with its strategy of selling securities in this manner. This is similar to when the president of GM famously said that what is good for GM is good for the country.

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The adjustments necessary to make the securitization “innovation” fair and legal will reduce but not eliminate the economic incentives to continue with these schemes. Those adjustments must come from a change in institutional bias and concomitant willingness of the courts to reform the transactions to reflect economic reality — the issuance of a promissory note and mortgage in order to launch the sale of securities.

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The current institutional bias interferes with the basic mandates of many federal and state agencies and even law enforcement. The CFPB regulatory receives inquiries and complaints from homeowners seeking to identify any person or company that maintains an unpaid loan account receivable due from them to that person or company. The answer is never forthcoming because there is no such person or company.

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Yet the CFPB continues to treat the ambiguous and illusory responses from the participants in securitization schemes and foreclosure schemes as adequate to address the complaint. The CFPB is thereby producing a distortion of economic realities in order to sustain policy decisions that were unsupportable when made even if they were excusable.

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Here is my procedural response: Any claim can be defeated even if it is technically valid. Mere testing of the claim can result in the inability of the claimant to prove their case. And in the case of claims based on failure to make payments according to a schedule, aggressively and persistently contesting whether the payments are legally due will most often result in a favorable result to consumers.

That said, such consumers face an institutional bias problem.

The rules of court (i.e. institution) and commonly used forms that are accepted as sufficient for pleading, filing, or recording currently allow disinterested parties to file false claims with impunity — despite efforts by the courts to require various forms of declarations. Those forms are simply deficient. And the people signing them have no personal knowledge and they’re not asserting anything that is definite because they have nothing definite to say.

The result is that the bogus claim gets to be fully litigated taxing the ability, resilience, and emotional stability of the consumer victims of this practice. In plain language, they must wait until the end of litigation to win whereas such claims in the context of other civil claims (other than foreclosures) would be dismissed with prejudice at the outset.

This produces a form of legal extortion. Either the consumer pays $50,000 more or less to persist in litigation against a bogus claim or they lose their home, their financial reputation, and their lifestyle. The goal of the foreclosers is to liquidate the house for fees paid to all foreclosure participants and the rest goes to the securitization players. No loan account is ever satisfied because none exists.

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