NOTICE OF DEFAULT: REAL OR FAKE?

First I want to thank the readers and the lawyers for climbing aboard this train on a highly improbable journey of turning the tide on Wall Street. Many of you are doing an outstanding job in this homeowner’s war to protect your property and our way of life. I am blessed to have been the recipient of so much help.

In discussions with lawyers I have come to realize that there is some confusion with my admonition to challenge everything and assume nothing. And it flies on the back of the deep guilt that most homeowners carry because they know they have not made a payment. Bottom Line: The mere fact that a payment wasn’t made doesn’t mean you are in default. Read that again. A default is a failure to make a payment that is due and it must also be a failure to pay the party to whom it is due. The fact is that from our vantage point here reviewing hundreds if not thousands of cases, we do not see the party to whom a payment could be due. Just as importantly, the parties suing in foreclosure, sending out notices of default, or notices of sale lack the knowledge to know whether a default exists or not. That is because they are layering the process so they can later claim plausible deniability when they are caught with their hand in the cookie jar, seeking title to property for which they have not contributed one dime other than the enforcement process itself.

Lack of payment is not a default. If you refinance your property, sell it or otherwise prepay your mortgage or, very importantly, if the Federal government or some insurance carrier has paid off your debt, your payment is either not due at all or it is due to an entirely different party than the one pretending to be a lender. When you sell your house and the old mortgage is paid off you stop making payments. Is that a default? Obviously not. So if the obligation has been partially or entirely paid by some third party in the securitization chain you are clearly entitled to know (a) who is holding the ownership rights to that loan, if anyone and (b) how much money they have already been paid and by whom.

The pretender lenders are bluffing their way through the process by having some company with an institutional sounding name send you a notice of default. A Notice of Default doesn’t create the default. Nor does a notice of default mean a default exists if it comes from a party you know lacks authority, knowledge, or standing.

The basic premise then of the process whether it is in judicial or non-judicial environments is not whether there is a “statutory scheme for the handling of these mortgages” but remains whether the loan is actually in default and if so what party is suffering financially as a result of the default (standing).

Bottom Line: If you concede the point that there is a default you are conceding your case away. Whether it is in a non-judicial or judicial proceeding, your effort should be to require the party seeking the real affirmative relief — the pretender lender — to prove that a default exists. That would require them to produce an accounting for every penny that was given to anyone in connection with your loan all the way up to the investor, and beyond, if a payment was made to or on behalf of the investor. This isn’t rocket science. In the old days, your mortgage lender would produce a payment record, show the court the original documentation and produce a witness that actually is the bookkeeper and records custodian on your loan. Both you and the court would see every penny they received from anyone in connection with the loan and every penny that was paid out under the terms of the note and mortgage. This is very basic stuff. But if you let them get away with it, they will bluff their way through it creating the presumption that you are in default and that presumption will be used against you unless you object and deny the allegation.

Practice TIP: In all probability the lawyer on the other side has never spoken with anyone outside his firm about your case. He therefore cannot represent anything factual to the court. In any event, the lawyer has no right to be representing facts to the Judge unless it is already admitted into evidence. That is virtually never the case since these motions come up before the first piece of evidence is even introduced, let alone admitted. If the lawyer starts blustering and making allegations of fact, he should be interrupted with an objection that he is either testifying or referring to facts that are not in evidence.

If he is testifying he is a witness and not the lawyer and is subject to cross examination and if you actually get that chance you’ll ask him what personal knowledge he has from his own perceptions regarding your loan account, the answer will be none, and he will disqualified as a witness because he lacks competence to testify. If he representing facts not in evidence, then he needs to allege them in a pleading and prove them with a competent witness. And the fact that he ac tually did not talk with anyone or otherwise make any effort to verify the default, means that he didn’t fulfill his obligation of due diligence to assure that the representations he is arguing in court are in fact supported by facts.

Tags: borrower, civil procedure, disclosure, foreclosure defense, foreclosure offense, fraud, Lender Liability, securitization, trustee
Posted in bubble, Corruption, Eviction, securities fraud |