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The Money Trail vs. The Paper Trail Review

by Neil Garfield | May 28, 2017

by KK MacKinstry/Lendinglies.com

Homeowners trying to receive evidence of the money trail are stonewalled from obtaining the documents that would help them to prove their case and prevail. Discovery is often blocked on ordinary grounds or on the basis of relevance. Therefore Discovery must be executed with precision, caution and as part of the record. Both the money trail and the paper trail matter, but revealing the money trail is much more difficult because in that discovery lies the smoking gun.

To date, foreclosures are based on fake, fabricated documents because the Megabanks deliberately designed underwriting requirements that required the destruction of the mortgage notes. The servicer's attorney typically proffers an original note that is robosigned by a party with no personal knowledge of the note or loan history and status. Just because the documents appear facially valid and it contains all the elements it doesn't mean the information the note or loan documents are true.

During the Neil Garfield Show broadcast on May 25, 2017 Neil Garfield advised that people fighting foreclosure consider the following:

#1 Why is the Lawyer's client the servicer and not the trust or true creditor?

Homeowners should object and demand that the true creditor bring the lawsuit- not the servicer. Most of the time the attorney doesn't even know who the real client really is. For more information please see:

https://livinglies.wordpress.com/2017/05/25/foreclosure-mills-dont-know-their-client/

#2 The Note is not the Original.

In the majority of foreclosures, the note was destroyed shortly after closing. Furthermore, the note does not contain the borrower's signature(s). The note is a fake and a fabrication and the use of a fabricated note should involve governmental agencies and law enforcement action. A note without a valid signature should not be admitted into the record or enforced. Unfortunately, the only remedy for the homeowner typically occurs only after the home has been sold.

#3 Robosigners know nothing

You must object immediately that robosigner testimony does not provide a foundation, is hearsay and is leading. Object quickly and if sustained move to strike or you sustain the objection. You don't have a second to spare when objecting.

#4 The Note is nothing but a memorialization

The note is a memorialization of an event that never happened because the third party that provided the funds was never identified. Under the merger doctrine the debt merges into the note but when the creditor and the payee are different there can't be a merger. Thus, the note is no longer evidence of the debt. You must be prepared and have relevant case law to argue the party on the note must bring the lawsuit, not a third party.

You can't prove the money trail unless you are able to obtain discovery. Without evidence it is impossible to determine if the transfer was a transfer of convenience or memorializes an actual purchase and sale. The majority of transfers are merely ones of convenience to create the appearance of a legitimate transfer.

When there is no consideration provided for transfer it should be inferred that there is no consideration paid for the note. When you are purchasing a property with real money it would be logical to assume you would retain proof of payment! Since there was no exchange of real money there is no evidence of consideration of payment.

The best way to obtain evidence of the money trail to justify discovery is by:

-cross examining the bank witness to establish that the witness has been coached on what to say and may have been given scripted notes but doesn't know anything about the loan or note.

-asking the witness about the boarding process including who transferred and maintained the process as well as the elements of the transfer.

-question the witness if they conducted a thorough search of ownership or if someone else did. If someone else did- strike as hearsay.

– ask witness if the records are kept at LPS during litigation.

-determine if there was fraud not only in the inducement but in the execution of documents.

A new and exciting litigation opportunity has been raised by investigator Bill Paatalo who believes that insurance and reinsurance companies are the ones really pulling the strings and directing the foreclosure. Often the borrower is paying for the mortgage insurance by paying a higher interest rate for the lenders mortgage insurance without disclosing this fact to the borrower. This trend was especially prevalent in early 2000 when lender's were issuing 80/20 loans to get around the need for a down payment.

Paatalo believes this practice violated the 1998 Home Owners Protection Act which required disclosure of any kickbacks, higher premiums or interest rates under RESPA. Through a practice called captive reinsurance agreements the borrower paid a higher interest rate in exchange for lender private mortgage insurance when it would have been less expensive for the borrower to receive a lower interest rate while paying for mortgage insurance themselves.

Paatalo encourages borrowers to review their loan closing document and look for any representations from the originator disclosing the higher interest rate incurred by the homeowner. If the originator didn't disclose this practice, and the homeowner just discovered the fraud, the homeowner likely still have a claim since the statute of limitations doesn't begin to run until the fraud is discovered.

 

 

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"CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea–it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online)".

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