livinglies.wordpress..com | November 7, 2016
By Neil Garfield
The "tender" discussion in or out of bankruptcy court is a non sequitur. Why would you "tender" money to a party whose claim is obviously false?
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
I recently had occasion to respond to an email regarding, as it turned out, understanding the way securitization actually worked, as opposed to what is shown on paper. The topic was "tender." This is what I wrote:
Why would you "tender" money to a party whose claim is obviously false? This would be adding insult to injury. Your debt arose when you received the money or the benefit of someone paying money on your behalf. If you then execute a note to the party who gave you that money, directly or to a disclosed authorized agent, the debt is merged into the note, as it should be. That prevents double liability --- one liability fro the debt and one liability arising from the note.
But if you executed a note in favor of a party who was NOT the source of funds and NOT authorized by the source of funds, then the execution of the note would be the creation of two liabilities --- one on the debt, owed to the source of funds, and one on the note which if released, could end up being a negotiable instrument that, if paid for, would indeed create the second liability. (Even without being purchased we have seen millions of cases where the assertion of "holder" is mistakenly used to grant HDC status).
The claimants in your case can collect from you if their claim derives from a transaction in which money was delivered to you by the payee on the note or if the payee on the note was acting in a representative capacity for the source of funding.
But we already know that the payee was not acting in a representative capacity for the the actual source of funding --- a group of investors whose identification is withheld from the Petitioner.
We know this because the investors bought certificates issued by a trust. The proceeds of sale of the trust-issued certificates were to have been paid to the issuing trust. If that had happened, then the trust would have paid for the acquisition (not the origination) of loans. And if that was what actually happened then the Trust would be a holder in due course not subject to the petitioner's defenses.
None of the claimants assert status as holders in due course. Hence one of the elements of HDC status is missing since the only reasonable thing for the trust to have done would have been to assert HDC status and merely prove the purchase of the loans. The missing element is obviously the purchase for value since good faith is presumed and knowledge of borrower's defenses is difficult to imagine, let alone prove.
Since HDC status is not asserted, the only logical conclusion is that the trust never did the only thing the trust was created to do --- purchase loans. And the only reason that can be reasonably applied is that the Trust never made the purchase because it never received the money from the sale of the certificates. And that means that the trust never purchased existing loans as per the requirements of the trust prospectus and PSA. That takes the Trust out of the mix entirely.
That leaves us with the investors money being used to originate mortgages without their consent or knowledge and contrary to the terms of the documents under which they agreed to fund the purchase of the trust certificates.
There is a complete absence of any paper trail linking the investors to the loans that were originated. All documentation was prepared and executed as if the Payee had loaned money to the Petitioner.
There are only two possibilities. Either the intermediaries who sold the trust issued certificates kept all the money or they kept part of it.
Given the fact that none of the assignments or endorsements were supported by any consideration, the only reasonable assumption is that there was no consideration because none was due --- i.e., the transferor had no rights to the debt and the note and mortgage were NOT evidence of the debt.
It follows logically that there is no evidence of the debt other than the events that occurred at the falsely dubbed "loan closing."
Those events give rise to a debt owed by Petitioner that is NOT the subject of the note and mortgage that were executed. Those instruments refer to a transaction that never existed. Petitioner was given money once, not twice.
The chain of paper offered by the claimants provides the rest of the answer to these highly complex obscure fictitious transactions. Ultimately the paper chain relied upon by the claimants leads up to a trust or party acting as though it were in the position of a REMIC trust.
It does not lead to the investors because we know that the investors' money never went into the trust and that therefore the trust is a sham entity created solely on paper, without any physical existence or trust administrator in the form of a live person. In fact, upon inquiry, it is obvious that the Trust never had a bank account and never engaged in any business activity at all. The investors therefore have interests in an empty trust --- which is all the documentation they have or could claim.
All of the claimants are in fact intermediaries posing as real parties in interest. When confronted they pivot from being servicers, or agents, or attorneys in fact or "holders." It is a moving target until the question is posed: whose money was used in the origination or acquisition of the debt? Are those parties on any of the documentation? It was the investors' money that was used. And no, the investors are not directly or indirectly on the paperwork relied upon by the claimants. And the claimants are not directly or indirectly representing the investors. The claimants are intermediaries whose only claim is that they represent the trust and perhaps the trust beneficiaries as it relates to the business of the trust, which is nothing.
Hence tender to the claimants for any reason would be to guarantee two liabilities for one transaction. Tender would pay the baseless claim of the claimants while allowing the real debt to go unpaid under circumstances where the investors, to whom the money is owed, did not give actual or apparent authority to these claimants. All current court events are being carried on without the knowledge of the investors, much less their intention to give authority to these claimants who were part of a larger fraudulent scheme.
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