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How to Beat the Shell Game

by Neil Garfield | November 19, 2018

The bottom line is that the foreclosures are a sham. The proceeds of the foreclosure never go into a REMIC Trust because there is neither a REMIC election nor a Trust, much less any entity that outright owns the debt, note or mortgage. In order to win, you must know that the securitization players use sham conduits and fictitious names at will, leaving an ever widening gap between the real and the unreal. It’s the gap that enables so many homeowners to win.

Without getting too metaphysical about it, I am reminded by what Ghandi said when he won India’s independence against all perceived odds. He said that in the end truth always wins out. Always. Of course he didn’t say when that happens.

I recently received an email from someone dealing with “Shellpoint” servicing. I thought it might be beneficial for everyone to see my response, to which I have added some edits.

Shellpoint is an apt name. It is a Shell company organized to deflect inquiries and claims from the real actors. The “point” is how they stab homeowners. Modifications are pointless in most cases, designed to place the homeowner in a hopeless economic situation in which they cannot avoid foreclosure.

Mods are intentionally convoluted and virtually nothing is happening on their side except the process of asking for more documentation when you have already sent or they already have it. Some mods are “granted” but only after they have raked the homeowner over the coals and they offer ice in the inter, along with their outright theft of the debt from the actual legal or equitable owner.

The new lender, effectively, is the so-called servicer who in turn has a Purchase and Assumption Agreement with the underwriters of so-called mortgage bonds or certificates. They are not bonds and they are not actual certificates. While those underwriters do business in the fictitious name described as a REMIC trust when dealing with homeowners, they do not use the fictitious name when they create the illusion of ownership of the debt, note or mortgage.

CWABS is Countrywide. CW was an aggregator only in the loosest sense of the word. Most believe that CW acquired the loans and then was the seller to REMIC Trusts. The entire scheme was a sham. CW did not acquire any loans and was therefore not the seller of the debt, note or mortgage. The REMIC Trust was legally nonexistent and /or had no transaction conducted in its name in which the Trustee of the so-called REMIC Trust was entrusted with your loan to manage on behalf of beneficiaries who also were nonexistent.

The investors who purchased certificates issued in the name of the fake trust are not beneficiaries. The Trustee has absolutely no power to even inquire as to the affairs of the Trust much less actively manage them. Read the PSA — all the way through.

Although there are a few exceptions the investors disclaim any right, title or interest to the debt, note or mortgage. If they were beneficiaries they would have rights to the loans and rights regarding the management of those loans. The named Trustee would have fiduciary duty to the investors regarding those loans. In truth the underwriter of the certificates was actually the issuer acting under the name of the nonexistent trust which was neither the direct nor indirect owner of any assets, much less loans. And the Trustee is merely a rent-a-name to make it look like a serious financial institution was at the head of this scheme.

Companies like Shellpoint claim their power is derived from the nonexistent trust that does not own the debt, note or mortgage and which will not receive the proceeds of foreclosure.

If their powers and rights are said to derive from the existence of the Trust, then they have no power. They have no right to collect anything or enforce anything unless a specific owner of the debt, note and mortgage is (a) identified and (b) the owner gives specific rights and direction to an agent (servicer) to conduct business in the name of the owner or for the benefit of the owner of the debt, note and mortgage.

Proving this to a judge who is at best skeptical of such claims is essentially impossible. That is because the defense narrative would require digging deep into the books and records of the trust (there are none) and deep into the records of the previous and current servicers to determine where they sent money that they collected from homeowners supposedly pursuant to the terms of a promissory note. The current state of such narratives is that they are deemed not credible or “not proven” even though they are true. And accordingly the attempts at such discovery and investigation are thwarted by the court sustaining objections to such discovery.

Those objections are lodged by lawyers who claim that they represent the named claimant. That is also a misrepresentation in many cases because the claimant they have named does not exist and has no direct or indirect power or rights over the debt, note mor mortgage. Since the claimant does not exist, that should be the end of the matter. But once again rebuttable presumptions come to the rescue of the lawyers of nonexistent clients. And once again those presumptions are not rebuttable without getting proof from sources who simply will never comply even if ordered by a court.

But just to be clear, this is a possible basis for suing the lawyers who filed such claims either knowingly or by failing to conduct basic due diligence. Any normal lawyer would not knowingly take directions from a third party in which they were to file suit or start a nonjudicial foreclosure on behalf of a nonexistent entity that neither exists nor has any interest in the subject matter of litigation. So later when you file suit for wrongful foreclosure, abuse of process, RICO or whatever you decide are proper grounds and causes of action, consider the foreclosure litigation to be a vehicle for laying the groundwork for actions in fraud, misrepresentation and negligence.

So the lawyers who win these cases enter the courtroom knowing that the defense narrative is true but they do not assert it as a claim they must prove. They are adept at keeping the burden of proof away from their client homeowner. The winning lawyers basically follow the track of keeping the burden of proof on the claimant who seeks foreclosure. The lawyers know that the the claimant simply will not and cannot answer certain questions that can be used to undermine the legal presumptions on which the entire claim is based, contrary to the actual facts. The winning defense lawyers are the ones who use timely objections and good cross examination (i.e., constant follow-up). In the end the witness or the document will collapse under its own weight.

 

 

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