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Here is what almost everyone is getting wrong and why it matters:

In the run up to the mortgage meltdown, investment banks were described as taking foolish risks, buying loans that were likely or even guaranteed to fail. It’s true, some investment banks that were not in on the grand scheme did exactly that and Lehman might have been one of them, Bear Stearns another.

But for the TBTF banks it was a different story. They were not lending money nor buying mortgage loans. They were funding the origination of loans likely or guaranteed to fail with incoming investor money that was intended by the investors to buy good quality loans that were seasoned by some period of time in which payments were made by the borrower. They were purchasing loans the same way. And they were not buying derivatives, they were selling them. SO the entire “bailout” was a farce. There were no losses.

Why does this matter?

Arguing what I have stated above will not get you anywhere in court. In fact, you might even lose ground to a judge who views you or your lawyer as a conspiracy theorist. So don’t do that. Remember that anything you affirmatively allege or assert, you then must prove by competent and substantial evidence that you don’t have and you probably never will have. reference to newspaper articles, especially if they are opinion pieces will only dig your hole deeper.

So what then?

If you understand the basics outlines above and apply logic then just knowing what happened can lead to victory in court and often does.

For regular readers of this blog you know that I have continually distinguished between the money trail and the paper trail. This is the difference between truth and fiction, respectively.

We know that there is no evidence that could support the assertion or even the implication that the originator loaned a penny if (a) it was a thinly capitalized broker or “originator” or (b) the loan occurred at the peak of the mortgage meltdown in 2004-2008, or both.

We therefore know that that anyone who claimed to be a successor to the originator did not purchase the loan. Hence they could not be presumed to own the debt. And without ownership of the debt, there can be no enforcement of the mortgage under existing law although there could conceivably be  path to enforcing the note for a personal judgment.

So tactically this suggest that you vigorously pursue a discovery strategy and trial strategy that shows that the lawyers for whoever was named as having initiated the foreclosure did so knowing that the named claimant/entity either did not exist or did not own the debt. This is easier than you might think. By drilling down to the finer points of your defense narrative, you can accomplish a lot, but it takes thought, and preparation of discovery, trial objections and cross examination.

Also remember that you are fighting a battle that can be and often is won against the banks. You don’t hear about homeowner successes because nearly all of them are “settled” under seal of confidentiality, putting the home at risk once again if confidentiality is breached. Translation: Once the banks are convinced the homeowner is going to win, they pay the homeowner to shut up.

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