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Bank Fraud From the Top Down

livinglies.wordpress.com | October 26, 2016

By Neil Garfield

THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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I recently had the occasion to ghost write something for a customer in relation to claims based upon fraud, MERS, and "Successors." Here is what I drafted, with references to actual people and entities deleted: * MERS was created in 1996 as a means for private traders to create the illusion of loan transfers. On its website MERS states emphatically that it specifically disclaims any interest in any debt and disclaims any interest in any documentation of debt (i.e., a promissory note) and specifically disclaims any interest in any agreement for collateralizing the obligations stated on the note.

* There is no agreement in which MERS is authorized as an agent of any creditor. The statement on the note and/or mortgage that it is named as nominee for a "lender" is false. No agreement exists that sets forth the terms or standards of agency relationship between the Payee on the subject "note" or the mortgagee on the subject mortgage. MERS is merely named on instruments without any powers to exercise on behalf of any party who would qualify as a bona fide mortgagee or beneficiary.

* No person in MERS actually performs ANY action in connection with loans and no officer or employee of MERS did perform any banking activity in relation to the subject loan. MERS is a passive database for which access is freely given to anyone who wants to make an entry, regardless of the truth or falsity of that entry. It is a platform where the person accessing the MERS IT system appoints themselves as "assistant secretary" or some other false status in relation to MERS. MERS is not, as its proponents claim, a device for eliminating the recording charges on legitimate purchases and sales of mortgage loans; instead it is a "layering" device (another wall Street term) for creating the illusion of such transfers even though no transaction actually took place.

* Hence there is no basis under existing law under which MERS, in this case, was either a nominee for a real creditor and no basis under existing law under which MERS, in this case, could possibly claim that it was either a mortgagee or beneficiary under a deed of trust.

* MERS has not claimed and never will claim that it is a mortgagee or beneficiary.

* The lender, under the alleged "closing documents" was also a sham nominee. None of the parties in the alleged "chain" were at any times a creditor, lender, purchaser, mortgagee, beneficiary, or holder of any note. None of them have any financial interest or risk of loss in the performance of the alleged "loan" obligations.

* Plaintiff reasonably relied upon the representations at the "Closing" that the originator who was named as Payee on the note was lending her money. But in fact the originator was merely acting as a broker, conduit or sales agent whose job was to get the Plaintiff to sign papers - an event that triggered windfall compensation to all the participants (except the Plaintiff), equal to or even greater than the amount of principal supposedly due from the "loan."

* In fact, the originator and multiple other parties had entered into a scheme that was memorialized in an illegal contract violating public policy regarding the disclosure of the identity of the "lender" and the compensation by all parties who received any remuneration of any type arising out the "Closing of the transaction." The name of the contract is probably a "Purchase and Assumption Agreement" - a standard agreement that is used in the banking industry after the loan has been underwritten, approved and funded. In the case at bar those parties entered into the Purchase and Assumption Agreement before the subject "loan" was closed", before the Plaintiff even applied for a loan.

* The source of the money for the alleged "loan" was a "dark pool" (a term used by investment bankers) consisting of the money advanced by investors who thought they were buying mortgage bonds issued by a Trust, in which their money would be managed by the Trustee. In fact, the Trust is either nonexistent or inchoate having never been funded with the investors' money. The dark pool contains money commingled from hundreds of investors in thousands of trusts.

* The investors were generally stable managed funds including pension, retirement, 401K money for people relying upon said money for their living expenses after retirement. They are the unwitting, unknowing source of funds for the transaction described as a "closing." Hence the loan contract upon which the Defendants rely is based upon fraudulent representations designed to mislead the court and mislead the Plaintiff and the byproduct of a broader scheme to defraud investors in "Mortgage backed securities" that were issued by a nonexistent trust that never owned the assets supposedly "backing" the "security" often described as a mortgage bond.

* Thus the fraud starts with the misrepresentation to investors that the managed funds would be managed by a trustee and would be used to acquire existing loans rather than originate new loans. Instead their funds were used directly on the "closing" table by presumably unwitting "Closing agents." The fact that the funds arrived created the illusion that the party named on the note and mortgage was actually funding the loan to the "borrower." This was a lie. But it explains why the Defendants have continually refused to provide any evidence of the "purchase" of the loan by the parties they claim to form a "Chain."

* In the alleged "transfer" of the loan, there was no purchase and no payment of money because at the base of their chain, the originator, there was no right to receive the money that would ordinarily be a requirement for purchase of the loan. There also was no Purchase and Assumption Agreement, which is basic standard banking practice in the acquisition of loans, particularly in pools.

* As Plaintiff recently learned, the originator was not entitled to receive any payment from "successors" and not entitled to receive any money from the Plaintiff who was described as a "borrower." In simple accounting terms there was no debit and so there could be no "corresponding" credit. And in fact, the originator never did receive any money for purchasing the loan nor any payments that were credited to a loan receivable account in its accounting records. Yet the originator executed or allowed instruments to be executed in which the completely fraudulent assertion that the originator had sold the loan was memorialized.

* The "closing" was completely improper in which Plaintiff was fraudulently induced to execute a promissory note as maker and fraudulently induced to execute a mortgage as collateral for the performance under the note. Plaintiff was unaware that she had just created a second liability because the debt could not be legally merged into an instrument that named a party who was not the lender, not a creditor, and not a proper payee for a note memorializing a loan of money from the "lender" to the Plaintiff.

* The purpose of the merger rule is to prevent a borrower from creating two liabilities for one transaction. The debt is merged into the note upon execution such that no claim can be made on the debt. None of these fine points of law were known to Plaintiff until recently. The reason she did not know is that the originator and the rest of the parties making claims based upon the fraudulent "loan" memorialized in the note all conspired to withhold information that was required to be disclosed to "borrowers" under Federal and State Law.

* In the case at bar, the debt arises from the fact that Plaintiff did in fact receive money or the benefit of payments on her behalf - from third parties who have no contractual, constructive or other relationship with the source of funds for the transaction. The note is based upon a transaction that never existed - a loan from the originator to the Plaintiff. The debt is based upon the receipt of money from a party who was clearly not intending to make a gift to Plaintiff. The debt and the note are two different liabilities.

* Assuming the original note exists, Plaintiff is entitled to its cancellation and return, along with release and satisfaction of the mortgage that collateralizes the obligation set forth on the sham promissory note.

* In the interim, as this case clearly shows, the Plaintiff is at risk of a second liability even if she prevails in her claim that the note was a sham, to wit: Under UCC Article 3, if an innocent third party actually purchases the mortgage or deed of trust, the statute shifts the risk of loss onto the maker of the instrument regardless of how serious and egregious the practices of the originator and the background "players" who engineered this scheme.

* Further the financial identity and reputation of the Plaintiff was fraudulently used without her knowledge and consent to conduct "trades" based upon her execution of the above referenced false instruments in which many undisclosed players were reaping what they called "trading profits" arising from the "closing" and the illegal and unwanted misuse of her signatures on instruments in which she was induced to sign by fraudulent misrepresentations as to the nature and content of the documents.

* Plaintiff suffered damages in that her title was slandered and emotional distress damages and damage to her financial identity and reputation. Further damages arising from violation of her right to quiet enjoyment of the property was violated by this insidious scheme.

 

 

 

 

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