“We’re so fucked/shit outta luck/hardwired to self-destruct…”
It’s the end of the world as we know it…but most people don’t know it!
Great article from Neil Garfield today–How Servicers Engineer Defaults Using the Escrow Accounts, Forced Placed Insurance and False Projections— about how the Wall Street wolves got their defaults to trigger the big payoff from the CDS: manipulate escrow accounts. Exactly this happened to me (from the article):
“…the escrow is manipulated by either projecting taxes and insurance too high or projecting them too low.”
My taxes were projected too low in order to make my monthly payment appear lower at signing. Like, way too low. Laughably, unrealistically low, especially when the tax bill for the year previous was available. At the end of the year, they—Countrywide–hadn’t collected enough to pay the taxes, creating an escrow deficiency, and that’s where the whole foreclosure mess started for me. I pointed all this out in my lawsuit and it of course fell on deaf ears.
Had Countrywide (this was in 2007) realistically projected what they knew I had to actually pay in taxes, I would’ve rejected the deal at signing because I wouldn’t have been able to afford it. But that’s how they sucked us in, with the lower payment, made possible by simply fudging the numbers. Some people would call it fraud. The pitch was this: we can lower your monthly payment if you’ll just refinance with us! But gotta have an escrow account with force-placed insurance! And so when that escrow account goes into a deficiency, as I believe was purposely done because the amount of taxes was underestimated at closing, you then have to pay a new, higher monthly payment to make up the difference. Or, default. Because default is what Wall Street wanted. Read “The Big Short” if you don’t believe me.
They wouldn’t let us pay the escrow deficiency in a lump sum. They tacked it on to the new, 30-odd% higher monthly payment, the very opposite of the pitch that got us to refinance in the first damn place. And we couldn’t pay it.
So glad to see an article about this. A small sense of vindication washed over me as I read it. So yes, default from homeowners was where Wall Street got the real payoff. Collecting on mortgages for 30 years each was chump change. The CDS and CDO markets were the tables where the high-rollers played. They put their own spin on the old Vegas saw that “The house always wins”—they always win your house, by purposely engineering you into default. It’s called MIHOP: “made it happen on purpose.”
The 45th anniversary…perfect time for education, not celebration.
Forty-three years ago today in what is now not-so-commonly known as the “Nixon Shock”, Richard Nixon ended the Bretton Woods system by ending the convertibility of Federal Reserve Notes to gold, thereby putting the United States—and the world—on the road to financial ruin. Or, to put it another way, Nixon made us all debt slaves to money printed out of thin air, leading to the inevitable foreclosure fraud, unemployment, bailouts, bail-ins and other treachery currently being visited upon us all.
Yes, Bank of America picked a winner when they plucked ol’ Dick Nixon from obscurity in 1945. Through Nixon, Bank of America achieved a magical feat even more fantastic than alchemy—to be able to create unlimited amounts of money at will, unbound by any brutish metals or economic reality. To be able to wield the incredible power and influence that such unlimited money can buy, and to be able…
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I was heartened to see the headline “Money Doesn’t Exist” on Zero Hedge today, even if the article did turn out to be more or less an ad for a Forex trading system. From the article:
“The biggest secret the Elite doesn’t want the have-nots to know: Money Doesn’t Exist!…The basis of the global financial system is built on a foundation of simple abstract concepts such as money, debt, finance, liquidity, equity, and trade. Money is a concept, an idea. It’s a medium of exchange – not a store of value!”
“…There’s little difference between ‘play’ money and Federal Reserve Notes, except that people ‘believe’ in the Federal Reserve System. Money is a belief, a dogma – more than a financial system.
But let’s be practical about the global monetary system – there’s no conspiracy, it’s simply a means of maintaining the status quo. Work is outdated, there needs to be a modern tool to keep the Elite “Elite” otherwise who would dig all the ditches? And more practically, big business, and global empire, needs a good accounting system. Money isn’t so much an enslavement system (although it is – but only because users ‘choose’ not to understand finance and basic math) as it is a means to create wealth and expand empire.”
This is the key concept that most people cannot wrap their heads around, that money does not exist in nature and can only be “created” out of nothing. I asked the question “DOES MONEY EXIST?” a couple years ago and came to this conclusion:
“…Money does not exist. It’s not that I haven’t thought that before or said it a million times and written about it before. I’m not sure why Fox’s explanation made me think it again, but it did.
Because when you really think about it, since the money is created out of thin air, that necessarily means it doesn’t exist. The Fed can no more say that the $20 million in Fox’s above example exists in any sort of objective reality any more than you or I could say that we have, I don’t know, super powers or something, because in objective reality, we do not.
The truth hurts
In other words, money is fictional. Imaginary. Think about that for a minute, particularly if it sounds wrong or nonsensical to you. Let it sink in. Try not to let what you’ve been told your entire life about money get in the way of understanding this very simple concept.
I know you don’t want to believe it. You can’t believe it. After all, if it were true, that would mean…all the hard work…all the long hours…for something imaginary? And that would mean all the hounding of the debt collectors and the shame and the guilt and the worry and the sleeplessness and the suicide or thoughts of it…were for something imaginary?
The truth hurts. But it is still the truth. And once we understand this truth, we face more difficult, painful questions, i.e., why should we let this continue? How best to get out of this false reality?”
OK, you might say, I can finally accept that money doesn’t exist—but so what? Well, that is the question—what do we do with that knowledge? As always, my proposal is this:
“The solution to these problems, then, is self-issued currency. That is, every citizen in a fiat system ought to have the ability to issue his or her own money, up to any amount needed. [NOTE 8-5-15: By “his or her own money”, I mean money denominated in the national currency, i.e., dollars, euro, etc. I do not mean that each person would issue his or own personal currency named after him or herself, as some critics of this idea apparently misunderstood.] This will solve both of the problems above, because when self-issued currency becomes the norm, paying money will be as easy and as painless and as much as an afterthought as saying “Thank you” is now. Problem one solved. And obviously problem two is solved because there would be no monopoly on the issuance of currency, hence no unnecessary control over anyone or anything, either by the state or by the issuer of the state’s currency.
For those that might recoil in horror at such an idea, keep in mind that all money is fictional. In fact, all money is already self-issued, as will be shown below. Money must be created by someone, somewhere, because money does not exist in nature–except to the extent that a natural item like gold or salt might be assigned the properties of money. Despite what the typical Western economics professor might say, money does not just naturally come into being as a consequence of people needing to exchange things.”
But wait, you might say—I thought money was fake? Why do you want to keep using money, even if it is self-issued? Well, I covered that in “Beat The Banks At Their Own Game: Self-Issued Currency In Action (Part Two)”:
“Why even bother with a currency at all, one might wonder, if the self-issued currency essentially makes everything free? Well, that’s just it—things aren’t “free” in the self-issued currency scheme. Prices would still be denominated in the national currency and self-issued checks would be written for those amounts. But the checks would function more as a “thank you note”—again, an acknowledgment that person A did something for or gave something to person B. That’s what money is already, we just aren’t trained to think of it that way. That is, all money is already fake and already worthless, even in the Federal Reserve/modern central bank scheme under which we live. Indeed, “Federal Reserve Notes” and “thank you notes” are both notes, they’re only distinguishable by their legal status, not by their value. And that’s why self-issued currency is more palatable than no currency at all—because people want an acknowledgment of a transaction. They don’t want to feel that someone got something over on them or that somebody got something for nothing. For that reason, there needs to be some form of currency, but it should be self-issued and not state- or bank-issued.”
Something like this is inevitable in the future, as more and more people get wise to the fact that money doesn’t exist. I’m overjoyed to see Zero Hedge hipping its large audience that that very important truth!
Ah, MERS—the “mortgagee of record” on some 62 million + mortgages. Their very business model is fakery, in that they claim to be the “beneficiary” or “mortgagee” of these millions of mortgages, when they know that they are in fact not the beneficiary because they don’t make loans and aren’t owed any money. Texas judge Nelva Gonzales Ramos, for instance, memorably saw through the chicanery of MERS in a 2013 order:
1. “MERS does not, however, hold any beneficial interest in the deeds of trust, and it is not a beneficiary of the deeds of trust. It is merely an agent or nominee of the beneficiary.” (p. 14)
2. “By having itself designated as the “beneficiary under the security instrument” in the deeds of trust presented to the County Clerk for recordation in the County’s property records, knowing that it would be listed as the grantee of the security interest in the property, it appears that MERS asserted a legal right in the properties. The Court concludes that, viewing the FAC’s allegations in the light most favorable to Plaintiff, one could plausibly infer that the recorded deeds of trust [naming MERS as “beneficiary”] constituted fraudulent liens or claims against real property or an interest in real property. “ (p. 14)
3. “While Defendants may not have acted with the actual purpose or motive to cause harm to the County, the FAC alleges that through their creation of MERS, Defendants intended to establish their own recording system in order to avoid having to record transfers or assignments with the County and paying the associated filing fees. (FAC ¶¶ 2, 3, 17.) Accordingly, one can reasonably infer from the allegations set forth in the FAC that Defendants were aware of the harmful effects the fraudulent liens would have on the County. That is sufficient to establish intent.” (p. 16)
4. “Accordingly, the Court concludes that the FAC sets forth sufficient facts to give rise to a plausible inference that Defendants made false statements to the County regarding their rights under the deeds of trust and their relationships to the borrowers in the mortgages issued by MERS members.” (p. 22)
5. “County records as having a security interest in the properties. Accordingly, viewing the allegations of the FAC in the light most favorable to Plaintiff, the Court concludes that one could plausibly infer that Defendants made material misrepresentations of fact to Plaintiff in the deeds of trust presented to the County for filing.” (p. 23)
So it’s kinda hilarious that a fake organization like MERS sued a couple of people two days ago for pretending to be MERS. Here’s what happened, from the MERS complaint:
“On or about December 16, 2015, an individual purportedly named Jack Lyles filed Articles of Incorporation with the California Secretary of State for “MERS, INC.” On March 29, 2016, Mr. Lyles filed a Statement of Information with the California Secretary of State specifying that MERS, INC would be in the business of “loans.”
A certified copy of the Articles of Incorporation and Statement of Information for MERS, INC is attached hereto as Exhibit C. 16. In his application for MERS, INC, Mr. Lyles identified the corporate address as 248 3rd Street, #42, Oakland, California 94607.
A packing, shipping, printing, and mailbox rental service business named Jack London Mail is located at that address. According the owner of Jack London Mail, mailbox number 42 does not exist at the business. 17.
The owner of Jack London Mail has further confirmed that people confused into believing that MERS, INC is the same entity as, or associated with, the Plaintiffs have sent mail, including legal documents and documents associated with Plaintiffs’ mortgage registration services, to the address Mr. Lyles identifed for the corporation.
In addition, on information and belief, people have attempted to secure service of process on Plaintiffs and messenger delivery of materials to Plaintiffs at this address This mail is always returned to sender, and process servers and messengers are rejected.”
So MERS, the invisibility cloak of the banksters, whose very existence is designed to sow confusion into the land records, now has the vapors over someone who is trying to out-confuse them? No sympathy here. How this Jack Lyles character was able to register a business with the California Secretary of State using a non-existent address is itself something of a mystery. But wait, there is another faker trying to spoof the fakers:
On or about December 16, 2015, an individual purportedly named Connie Vargas filed Articles of Incorporation with the California Secretary of State for “MORTGAGE ELECTRONIC REGISTRATION SYSTEM, INC. (MERS).”
On March 29, 2016, Ms. Vargas filed a Statement of Information with the California Secretary of State specifying that MORTGAGE ELECTRONIC REGISTRATION SYSTEM, INC. (MERS) would be in the business of “loans.” A certified copy of the Articles of Incorporation and Statement of Information for MORTGAGE ELECTRONIC REGISTRATION SYSTEM, INC. (MERS) is attached hereto as Exhibit D.
In her application for MORTGAGE ELECTRONIC REGISTRATION SYSTEM, INC. (MERS), Ms. Vargas identified the corporate address as 248 3rd Street, #429, Oakland, California 94607. As noted above, Jack London Mail is located at that address. According to the owner of Jack London Mail, mailbox number 429 is owned by someone unaffiliated with Defendants.
As confirmed by the owner of Jack London Mail, people confused into believing that MORTGAGE ELECTRONIC REGISTRATION SYSTEM, INC. (MERS) is the same entity as, or associated with, the Plaintiffs have sent mail, including legal documents and documents associated with Plaintiffs’ mortgage registration services, to the address Ms. Vargas identified for the corporation. In addition, on information and belief, people have attempted to secure service of process on Plaintiffs and messengers delivery of materials to Plaintiffs at this address. This mail is always returned to sender, and process servers and messengers are rejected.
Ha! Not one but two fake MERS registrations at the same shipping center! Filed on the same day! This prankster is a pro, because in filing these documents with the Secretary of State, he/she (i.e., “Jack Lyles” or “Connie Vargas”) is mimicking EXACTLY what MERS does to homeowners. See how it feels, MERS? When people file fake documents purporting to do fake things or to be fake entities? Not so pleasant, is it? I doubt the irony of this is lost on the homeowners who have been fighting the banks and MERS for years.
And indeed, MERS now does have some idea of how what they’ve been doing to homeowners feels:
The facts that the Defendant corporations have confusingly similar names to Plaintiffs and have been registered to false addresses has caused substantial confusion, and damage and irreparable harm to Plaintiffs, and threaten to continue to irreparably harm Plaintiffs. Defendants’ unauthorized actions have caused, and are likely to further cause, confusion, mistake, and deception of Plaintiffs’ customers, potential customers, parties in lawsuits, as well as members of the general public.
If this is what it takes to piss off MERS, then my hat is off to Jack Lyles and Connie Vargas! Because MERS is one of the main parties responsible for causing “substantial confusion, and damage and irreparable harm” to homeowners over the years. This is one hell of prank, for sure, especially considering that MERS has been really slippery over the years about what they should properly be called, and which MERS is which. I think all homeowners should keep their eyes on this one!
The foreclosure defense arguments of some California homeowners were given a big boost by the recent California Supreme Court decision in Yvanova v. New Century Mortgage. In fact, just last week, we published an interview with one such homeowner, Sherry Hernandez: “First Yvanova, Now Hernandez—Courts Warming Up to Homeowner Arguments.”
However, it was an open question at the time of that interview as to how—or whether—the much-lauded and progressive Yvanova decision would help the plaintiff herself. That question has now been answered in a decision (read it here) filed this past Friday by the Second District Court of Appeal and the answer is: the Supreme Court precedent which bears her name did not help her in her own case!
To help us understand this unfortunate turn of events, we again turned to David Seal, the attorney who utilized the logic of Yvanova to help breathe new life into the case of Hernandez v. PNMAC both at the Supreme Court and the Court of Appeal. Our email discussion follows below…
LRM: In a nutshell, what happened with Yvanova after the Supreme Court sent it back to the court of appeals?
Well, to answer that I think we need to first actually take a look at what the California Supreme Court did when it granted review of the Second District’s prior, adverse ruling in Yvanova v. New Century Mortgage. It was a very narrow review. As stated in the Supreme Court’s Opinion,
“We granted plaintiff’s petition for review, limiting the issue to be briefed and argued to the following: “In an action for wrongful foreclosure on a deed of trust securing a home loan, does the borrower have standing to challenge an assignment of the note and deed of trust on the basis of defects allegedly rendering the assignment void?”
In other words, with that narrow scope of review, the Supreme Court set up a situation in which it was entirely possible that it could enter a ruling which made a sweeping new pronouncement about foreclosure law, which could affect mortgage finance and foreclosure laws and litigation in a wide variety of cases, but which may have very limited effect on the Yvanova case specifically. And it turns out that is exactly what it did.
I believe that the California Supreme Court (and the Attorney General’s office, which wrote an Amicus brief in support of Yvanova) were disturbed that the law as it existed would not give a homeowner the ability to challenge a foreclosure if it were done by the wrong entity, pursuant to a void assignment. The prior Second District’s decision in Yvanova had been based on the concept that a homeowner simply didn’t have that right, previously.
The Supreme Court disagreed with the Second District on that point. But the Supreme Court was very careful not to go so far as to say that Yvanova could or did state a cause of action once that hurdle was removed. It did give some guidance on certain issues, such as the tender rule and the prejudice rule, which were and still are quite useful as seen by the Fourth District’s Opinion in Sciaratta v. U.S. Bank (2016), and the Hernandez v. PNMAC Opinion from the Second District, both of which cited to the California Supreme Court’s Opinion in Yvanova v. New Century Mortgage (2016) 62 Cal. 4th 919, very heavily. The Supreme Court’s decision also overruled some outdated caselaw.
But the Supreme Court didn’t send Yvanova back to the trial court, or write anything suggesting that given the new analysis of the issues that its own Opinion required, that Yvanova would be entitled to receive or automatically receive remand back to the trial court. Instead, it stated
“[W]e express no opinion on whether plaintiff has alleged facts showing a void assignment, or on any other issue relevant to her ability to state a claim for wrongful foreclosure.”
It merely instructed the Second District to reconsider the matter in light of its Opinion. I am sure Yvanova’s attorney knew this was a possibility given that language.
The Second District panel did its reconsideration, and concluded that the “late addition of a loan to a securitized trust” fact pattern is not viable, as it relies on New York trust law which states that under such facts, one has only pleaded a “voidable” transaction – as the trustee of whichever trust is involved has the ability to ratify late additions of the loan to that trust.
My belief is at this point is that the Yvanova Supreme Court Opinion continues to be important for homeowners in California.
LRM: Is the Court of Appeal thumbing its nose at the Supreme Court in some sense?
No. The Second District was tasked only with reconsidering Yvnova’s appeal, from a ruling on a demurrer denying leave to amend, in light of the Supreme Court’s ruling. It did not state that Yvanova had pleaded sufficient facts under that revised analysis, rather, it left that up to the Second District to determine.
There have been significant developments in caselaw and precedent over the past couple of years, in California (and all of my points are addressing only California substantive law here, as that is all I know) which have provided benefits and protections to consumers which were strangely not recognized by our courts previously. The Yvanova Supreme Court decision being one of those.
This is called due process at work. The right to due process does not mean that one will always win, but it does mean that one will get a fair consideration. And here, the Supreme Court weighed in, said “we think you’re looking at some of the issues wrong,” and sent it back for them to reconsider their ruling in light of that. As imperfect as our system is (and it is quite imperfect) one has to say that there has been much process here.
I do see that the different Courts of Appeal are struggling to come to terms with what Yvanova means, and I really wish it had reached a contrary result on re-hearing, as this result on complicates things.
Now it very well may be that Yvanova will again seek Supreme Court review, of some of the issues which were considered this second time around.
There is a natural tendency by people to look at the big signals of who “won” or “lost”, instead of getting to what that win or loss really meant. Taken at its most basic, we see the Internet go crazy with glee when a homeowner wins a trial or an appeal, and the overreaction to that can be the thought that now all homeowners will win all their cases from here on out. The law doesn’t work that way.
Even among lawyers, there is a tendency to over-estimate the effects of changes in the law from appellate decisions. Often those are extrapolated too far. I personally don’t believe that the “late addition of a loan to a securitized trust” fact pattern has much life in it. I could be proven wrong, and the Courts could change how they analyze such cases in the future. But presently, even before this latest Second District case, I had been less than optimistic about it.
But I remain, conversely, optimistic about OTHER fact patterns which involve “void assignments” which are void for different reasons – such as what we had in Hernandez v. PNMAC. I think the battlefield of this area of litigation will define over the next couple years which fact patterns are sufficient to allege a “void assignment” and which are not. There remains a lot of litigation, and appellate work, on many cases to come before that is clarified.
LRM: Is it not somewhat unusual for an appeals court to be overruled by the Supreme Court, only to have that same appeals court issue a ruling identical in result—if not in logic or reasoning?
Yes. It is somewhat unusual. The first unusual thing that happened was the California Supreme Court granted review, but only to review to consider this abstract legal theoretical question, and having ruled on that, was sending it back to the Second District without much case or fact-specific guidance.
Much as it might seem like a judicial mutiny, I don’t really see it that way. I think the Second District Court of Appeal just sees this particular fact pattern as being dead. Which is why I like Sherry Hernandez’s case so much, as hers does not involve these facts which are so reliant on New York trust law!
It also is confusing to laypersons and consumer advocates, and basically anyone who isn’t a lawyer. Actually, I shouldn’t stop there. It has probably confused plenty of them, too. God forbid it gets published! We’ll have inept lawyers running around citing the wrong Yvanova opinion with abandon and effectively short circuiting their clients’ cases.
LRM: So it is unusual is it for an appeals court to affirm a trial court, have that affirmation overruled by the Supreme Court, and then just issue another affirmation of the trial court?
It is quite rare. But I have to say, on balance, consumers in California are better off for Yvanova having persevered. Consumers are better off for the Supreme Court Opinion to exist. Consumers are better off for the Supreme Court to change the way courts look at the prejudice rule, and to (once again) state the often-ignored exceptions to the tender rule. And I think we are yet to see more law revision by the California Supreme Court in this area of law, and I hope I am right in that regard.
But the problem for Yvanova’s case was that her particular fact pattern was not getting judicial support at all with the exception of Glaski.
Every case is unique and different. One has to look at the details. I know of a case, where I have been consulting with a gentleman up north, who is alleging that he has an exception to this latest rule already – arguing that his loan wasn’t just belatedly added to a securitized trust, but further arguing that the trust has since disclaimed any ownership of it, citing to statements it made in litigation filings against governmental agencies for that proposition. So, he argues it can no longer be “ratified” and what was once “voidable” has now become “void.” So, maybe there’s hope for cases with these facts after all!
LRM: Does it strike you as odd and/or unjust that Hernandez (and eventually others) will be using the Yvanova decision to help her in the lower court while Yvanova herself is denied the right to use the Yvanova decision in the lower court?
Yes, it is odd.
For Sherry Hernandez, it is wonderful. But even there, the battle is not over. Ms. Hernandez still has to go back to the trial court, and plead her case in such a way that the trial court agrees she has pleaded a valid cause of action. If not, the case will again be lost to a demurrer. She will then have to prove her case factually in the trial court, and will have to beat the inevitable Motion for Summary Judgment. Though it might seem her case has been around for a long time, keep in mind it was dismissed at the front end, in the pleadings stage. The paper war is only getting started there.
Without a “void assignment” we have the odd situation of Yvanova herself not being able to benefit from her own recent California Supreme Court case.
The problem for Yvanova’s case was that her particular fact pattern was not getting judicial support at all with the exception of Glaski. It relied on out of state trust law to get to the assignment being “void.” I understand her attorney made an attempt to argue that California law, and not New York trust law, should be applied to the issue. The Second District didn’t agree with this position and didn’t see how that would make a difference. But perhaps that issue can be further developed in other cases or on review by the Supreme Court.
There are many other ways to state a cause of action for wrongful foreclosure. And it is a cause of action that is growing in strength and applicability in California, or at least it has been over the past couple of years. I remain a big fan of suing for wrongful foreclosure, and suing for negligence, in foreclosure cases, where the facts call for it.
But I have to confess that the Glaski-type fact pattern has always left me a little curious about its appeal. At its root you have a plaintiff who is suing based on something that did or didn’t happen relative to timing and record keeping of this trust, that one wouldn’t even know exists without doing some digging. That digging is a smart thing to do, it can reveal some interesting facts which are sometimes actionable. But the idea that a trust can’t ratify a late addition of a loan (ratification making it merely voidable and not void) just never sat right with me.
However, as stated above, the Supreme Court’s Opinion in Yvanova v. New Century Mortgage (2016) 62 Cal.4th 919 can be used by any litigant attempting to allege they are fighting a foreclosure by the wrong entity. It was cited by Yvanova in her briefs on rehearing before the Second District, as well, so strictly speaking she wasn’t “denied the right to use it” but I see what you mean. Because the Court of Appeal doesn’t think she has a “void assignment” the Court of Appeal also didn’t need to give much consideration to the Supreme Court’s pronouncements of new law in dealing with void assignments.
Up is down and down is up. Unless you are blessed or burdened as I am, with a long background in reading these cases, in which it all still makes some sense! I hope I haven’t been thoroughly confusing.
LRM: The tender rule played an important role in the Yvanova case at the trial court. How has the Yvanova Supreme Court decision changed the tender rule?
The quick answer is that it hasn’t changed it at all. However, it is helpful to have the Supreme Court reiterate the exceptions to the tender rule. Even though none of those are all that new, courts are still loathe to follow them. Sherry Hernandez’s case is a case in point. I made pretty much all the same tender rule arguments the first time through at the Second District Court of Appeals, and yet one of their reasons for affirming the trial court was based on the “tender rule.” Once the Supreme Court issued its Opinion in Yvanova, which cited to all the exceptions, and sent Hernandez’s case back to the Second District, we again made those arguments, but could make them with reference to a recent California Supreme Court Opinion.
My opposing counsel for PNMAC tried to tell the court that Yvanova did not mention the tender rule at all, which was inaccurate, and generally briefed and argued the issue as if those laws don’t exist. Which is one reason why we’re trying to get the Second District’s Opinion on rehearing of Hernandez v. PNMAC published. As a side note, it would be great to see one of these big firm lawyers ripped a new one for doing things like that!
LRM: One issue that Yvanova argued made her assignment void was that New Century went bankrupt and was liquidated in 2008 but somehow made an assignment of her note in 2011? This type of corporate zombie behavior is fairly common and to at least the layperson, this seems to be a pretty strong argument in favor of the idea that the Yvanova assignment is void. Why did the courts not agree?
The Opinion addresses this issue beginning at page 7. It states that New Century had appointed OCWEN Loan Servicing, LLC as its attorney-in-fact with the power to “act in the name, place and stead” and to “execute assignments of the deed of trust/mortgage and other usual and customary documents.” It went on to say that even if OCWEN had no authority to assign deed of trust to the Morgan Stanley investment trust (as Yvanova argued) that would make the assignment voidable and not void. The bankruptcy trustee had the discretion to ratify the transfer of the assets of New Century’s bankruptcy estate, which included the subject loan. The ability to ratify means it is not void.
LRM: To get back to the idea of Yvanova herself not being able to benefit from the precedent that bears her name for a minute, why do you think that the Supreme Court decided to address the issues in her case as opposed to others?
I think the Supreme Court–and as the amicus briefing shows, the Attorney General’s office–were of the belief that some of the foreclosure caselaw and concepts are outdated. They’re right. It actually could be called, on some level, “judicial activism” to grant the review in Yvanova the way the Supreme Court did it. In essence, saying, “Never mind the facts of the Yvanova case, let’s argue an abstract legal theory.” But I am glad they did it. The idea that a homeowner could not challenge a foreclosure by the wrong entity, done pursuant to a void, or even a fraudulent assignment, is an absurdity that needed to be overturned.
LRM: Surely she [Yvanova] wasn’t the first—or only—homeowner to try to get the Supreme Court to address these issues. Seems that the Supreme Court wouldn’t have addressed her issues at all unless they thought her overall case had some merit.
You are absolutely correct there. The Supreme Court often waits until several judicial districts have a split of authority on an issue, and once there exists enough different schools of thought, it will weigh in to encourage uniformity of laws and “orderly development of caselaw.” It can therefore take a long time before a legal issue gets reviewed by the State Supreme Court, and many cases are won or lost in the meantime, before it gets to it.
LRM: One thing that strikes me about the Court of Appeal’s decision is that it keeps faulting Yvanova, essentially saying that if she had only said x instead of y, the Court of Appeal would’ve ruled differently. For example, on p. 8, the Court of Appeal concludes that Yvanova “never explains exactly what she would allege if given leave to amend.”
I think what they are saying is that the Court of Appeal needed to hear some explanation beyond what they got as to what Yvanova would allege if given leave to amend. Her one argument raised a legal issue (and not a factual one). As it was a legal issue which could be resolved by review of law, that left them with no reason to believe she could state a valid cause of action in the trial court. Now maybe she could do that, but those facts didn’t make it into the brief, or there is some other explanation, or whatever. But they can only work with what is in the brief, and even then, they want it in the opening brief. Hernandez had the same problem the first time through in the Second District Court of Appeal.
LRM: And on p. 7 they say that “If plaintiff means to argue the trustee never obtained physical possession of the trust deed itself, she offers no authority” that such a defect is relevant. That is to say, the Court of Appeal seems to want Yvanova to state some magic words, but since she didn’t, she’s out of luck. That doesn’t seem to me to serve the interest of justice, at least not to this layperson.
I take it to mean they are looking for legal authority for the proposition that failure to obtain physical possession of the deed of trust is relevant to the analysis. Without that, they don’t generally volunteer the issue. Now there may indeed be no such authority, which would explain the lack of such a citation. But in the absence of any binding or even persuasive authority (which could be an out of state decision, or even a treatise, text, or law review article), should the court just make the assumption that the point referred to is on solid legal ground?
LRM: Is there not a contradiction in the Court of Appeal’s logic when they state on the one hand (p. 7 of Court of Appeal Yvanova decision) that Yvanova (Supreme Court decision) says that “the deed of trust, moreover, is inseparable from the note it secures, and follows it even without a separate assignment,” while arguing just a few paragraphs later (on p. 8) that Ocwen’s lack of authority to assign only the deed of trust (i.e., separately from the note) is merely something that Yvanova “theorizes?”
To be fair, Yvanova did theorize that, so they were just being accurate in saying it was theorized by her. I think when they said she theorized it, they were meaning Yvanova theorized that Ocwen lacked the authority to assign the deed of trust. I don’t think they meant Yvanova theorized that the deed of trust needs to follow the note. They don’t seem to have an issue with that, as I read it.
LRM: In other words, the Court of Appeal itself states that deeds of trust are inseparable from notes but then turns right around and dismisses an assignment of a deed of trust separate from a note—something central to the whole case—as basically only some sort of conspiracy theory to which Yvanova subscribed.
I don’t think they implied it was a conspiracy theory, rather they thought it was a legal theory which didn’t have any citation to authority. Without a citation to binding authority to say that the Court of Appeal is required to agree with Yvanova’s position in that regard, or persuasive authority, which would say that in someone’s opinion, it should agree with that position, the court is left with an unsupported legal theory, which it pointed out.
And I know Ms. Yvanova had competent counsel so I don’t mean that as any slight at him, and reiterate I haven’t researched the issue of whether there is or is not such supporting authority. It’s a good question, and one of these days when I am all caught up on my work, I’ll do that.
California homeowner advocate Sherry Hernandez is feeling great these days about her efforts to fight her wrongful foreclosure by Penny Mac (i.e., PNMAC). “I’m trying to enjoy my time because I know that it’s not going to be easy going ahead, but I’m just trying to bask in the moment for now,” Hernandez said.
And Hernandez has every reason to be excited, because in a very fortuitous and unexpected turn of events, her now three-year-old lawsuit against Penny Mac (née Countrywide) has suddenly gone from lost cause to cause for celebration. Indeed, just a few short weeks ago, the California Supreme Court overturned an appeals court’s December 2015 decision against Hernandez, and the appeals court in turn vacated its own decision against Hernandez and remanded the case back to the trial court, a move which not only gives Hernandez a more level playing field in the trial court this time around, but also places a few more arrows in her quiver that the court wouldn’t let her use in her first battle with the banks. To make a long story short, Hernandez v. PNMAC was the unstoppable force that met the immovable object of the typically bank-friendly courts and the immovable object…moved.
But this motion of the immovable object did not happen overnight, nor did it happen in a vacuum. David Seal–a Southern California litigation attorney who handles wrongful foreclosure cases and appeals–represented Hernandez in the appeals court and wrote her Petition for Review to the Supreme Court, and he summarized the history of Hernandez’s case thusly:
“In the trial court, she lost on a demurrer to the second amended complaint and no leave to amend was granted, so she filed an appeal. Her opening brief she did in pro per, then she hired me for the reply brief. The court of appeals affirmed the trial court, meaning they didn’t grant us any relief, but they did include a footnote to the effect that one of the issues in Sherry’s case was identical to the Yvanova v. New Century Mortgage case which hadn’t been ruled on yet.
And as history well tell, Yvanova turned out favorable for the homeowners and it disapproved of a lot of the case authority that the court of appeal had cited in ruling against us. Because of that, our Petition for Review was granted at the Supreme Court level and they ordered the court of appeal’s decision vacated and sent it back to the court of appeal for a rehearing and for proceedings consistent with the Yvanova decision. I think it was actually the first of the Yvanova-related cases which did that. In fact, it was sent back before Yvanova was. I don’t even think the court of appeals issued its new ruling on Yvanova. But it’s already issued one on ours.
So we got sent back to the court of appeals. There was another round of briefing, another round of oral argument and frankly Penny Mac’s attorney just argued a lot of redundant things. She was arguing as if Yvanova was never decided. She tried to argue, you know, turn the clock back. And then she tried to argue that Sherry wasn’t the borrower, which didn’t go over well. The opinion pretty much speaks for itself as to the merit of their argument—they lost. And so the decision is going to be final in a few days and it’ll be sent back to the trial court where they’re going to give Sherry leave to amend to plead a cause of action for wrongful foreclosure in accordance with the court’s ruling from last month.”
And what a beautiful ruling it is. A sample quote: “…our reading of the operative complaint along with the additional facts [Hernandez] now represents she can plead establishes a reasonable possibility [Hernandez] can go beyond mere allegations and present a specific wrongful foreclosure theory on which she intends to rely.” Such language leaves no doubt that the game has changed, which understandably pleases Hernandez to no end as she explained:
“You know why I love our ruling so much? Because I knew there were issues with the declaration by Rita Garcia [NOTE: a PennyMac employee] and with the allonge. But I had not brought it up at the trial level. I simply said that the documents from the bankruptcy weren’t correct. But I didn’t bring up the issues.
And when that judge sat there and he read off exactly what I knew was wrong with it–there were no dates, no proof that they had transferred it to anybody, no loan numbers—I was sitting there with my jaw dropped. I said, ‘Is he really saying that? I wish he would put it in the opinion,’ because I didn’t even think they would put it in the opinion, and they did! Wow!”
The satisfaction and sense of victory that Hernandez is currently feeling is made all the sweeter by the stark contrast between those emotions and the depths of the defeat, hopelessness, and frustration that Hernandez has endured since her fight against Penny Mac began. Hernandez laid out the nature of the problems she has faced throughout this ordeal:
“We have been characterized as ‘deadbeats’ as we have had to sit back, unable to mount our replies and show our evidence. It makes us crazy to hear PennyMac accuse us of having done something irresponsible and wrong when they are filing false documents into the County Recorder’s Office and using them as true. Attorneys for the lenders and servicers take seminars on how to cheat homeowners, meanwhile, we are forced to go into court armed only with the truth of our own case, our knees knocking and hands shaking as we try to get heard.
More significant than a homeowner ‘getting a free home’ is the blatant theft by these servicers, especially PennyMac, a corporation born out of the ashes of Countrywide and allowed to prosper from their former fraudulent acts. Ironically, we settled with our previous lender Countrywide due to their predatory lending practices. Now we face off against their illegitimate offspring, PennyMac. These former Countrywide executives prosper in spite of Countrywide having been labeled the primary corporation responsible for the economic recession, and they make million dollar salaries while we–who have done nothing wrong–lose our home, our savings and our retirement benefits and plans.”
The Hernandez case is clearly an important one as it is among the first post-Yvanova cases that will test the application of Yvanova‘s authority and possibly spearhead a revolution in the handling of wrongful foreclosure cases in which questionable—if not outright fraudulent—assignments typically play a starring role (LRM published an article on the significance of Yvanova here). Seal put it like this:
“I think it’s correct that there’s been a sea change in at least the appellate caselaw, and certainly the Supreme Court caselaw. And Yvanova was a huge victory that came about bit by bit. It’s very interesting seeing that the different courts don’t know what to do with it yet. And some are in denial.
The court has said, ‘You have to look at the prejudice rule and the tender rule differently now’ and has overruled the authority which was used to justify the way things have been done for a long time, frankly. And when you think about it, it’s monumental for California but it also affects, of course, federal cases in California because they’re applying California substantive law, so those are affected.
And other states are going to follow suit and really, the concept in Yvanova–as plain and logical and obvious as it seems to you and I—is a new thing for the world of Western finance, not just in California but in the whole world. I mean, Australia, England—they all do things much the same way. So it’s a very significant decision.”
Indeed, it’s fair to say that as far as the banks and their attempts to legitimize their foreclosure rampage are concerned, the times they are a-changin’ (in California, at least). They may change even more if and when the appeals court’s recent reversal of its decision in Hernandez v. PNMAC is published by the appeals court, in which case it could be cited as precedent, and therefore more useful to homeowners and their attorneys in wrongful foreclosure cases. Seal had this to say on the matter:
“We are seeking publication of Hernandez v. PNMAC for the reason that it expands on Yvanova, taking it outside the fact pattern of ‘late adding of a loan to a securitized trust,’ which is what makes this case so important. There are homeowners out there who have loans where there are bad assignments for various reasons, but no published decisions (yet) which deal with that issue. In Sherry’s case, at one point there was actually a different lender claiming ownership of the loan as well, a fact not pleaded by former counsel but one which could be important when she gets back to the trial court.”
In this extremely disturbing video in the Alton Sterling case in Baton Rouge, we see the cops set upon Sterling at 5 seconds in. The cop pulls his gun at 23 seconds in—after Sterling appears to be subdued and pinned to the ground–and we hear the first shot at 28 seconds. So in 23 seconds, a man goes from being a suspect to being summarily executed. What law or laws did this man break? Where was his trial by a jury of his peers? When did the police go from “protect and serve” to “harass and execute?”
This is unacceptable in the land of the “free.” It is standard operating procedure, however, in a police state. Don’t forget that the Supreme Court just ruled (in Utah v. Strieff) that the police can now, as the American Free Press puts it here, “stop a citizen for any or no reason, ‘discover’ grounds for arrest, and use any evidence ‘found’ to criminalize the individual.” And yet the FBI admits that Hillary Clinton broke the law while refusing to take any legal action against her.
There used to be a saying that “America is a nation of laws, not of men.” If that were ever true, it certainly isn’t now. RIP Mr. Sterling.
Since Orlando, there has been a lot of talk about doing away with the Second Amendment, for example: here and here. A Facebook commenter put it this way: “And I don’t give a damn about the Second Amendment, and I think the ‘self-defense’ rationale as it is usually presented is wrapped up in a mix of racist horseshit and delusional male power fantasy.”
The above video features ex-cop Michael Wood, who is very much in favor of gun control of the sort that would eventually see guns being all but completely unavailable to the average citizen. Wood begins this portion of his interview with Joe Rogan by plainly stating that the average citizen does not have the right to own a gun (approx. 1:53):
“OK, you set up a couple premises there…one of them is that they [citizens] have a right to that weapon, which I’m gonna argue to the end of the day that they don’t.”
Wood says that the Constitution makes it clear that gun ownership is only for the “well-regulated militia,” and explicitly and clearly gun ownership is not permitted to Joe Average. Because the Constitution says so.
In the very next sentence, however, he says this (approx. 2:17):
“I’m not a big fan of the Constitution and leaning on it because the world has changed dramatically…”
So on the one hand, he’ll argue to the end of the day that the Constitution limits gun ownership to a militia, but simultaneously doesn’t want to “lean on” the Constitution. Um, okay…
Then Rogan reads the complete text of the 2nd Amendment (approx. 31:00) and points out correctly that the Amendment also clearly states that “the right of the people to keep and bear arms shall not be infringed.” Rogan and Wood then try to flesh out what that means, even though it’s crystal clear. And not to get off into the 2nd Amendment weeds here, but my interpretation of the text is this: you’ve got to be able to get a militia together if you’re going to protect a free state, and the only way to get a militia together is if individual people own guns, so we recognize that personal ownership and use of firearms is an important right.
Even those who use the argument that guns can only be used in the context of a well-regulated militia because of the clarity of the clause which says that—as Wood does—must concede that the second clause about not infringing the right of “the people” to keep and bear arms is also equally clear. The problem comes in when the gun-control people want to make the two clauses mutually exclusive, i.e., the argument that the 2nd Amendment only refers to militias and not to general private ownership.
But enough about that.
The question is, is the Constitution meaningless or not? Are we going to take it seriously, or are we not doing that anymore? We all know the answer to that question—we’re not doing that anymore. For example, just this week, the 4th Amendment was de facto repealed this week (again) by the Supreme Court:
“The Fourth Amendment protects people from unreasonable searches and seizures by the government — or that’s how it works in theory, anyway.
In practice, though, court decisions over several decades have created so many exceptions to this constitutional principle as to render it effectively meaningless in many real-world situations.
On Monday, the Supreme Court further weakened the Fourth Amendment by making it even easier for law enforcement to evade its requirement that stops be based on reasonable suspicion. The justices ruled 5 to 3 that a police officer’s illegal stop of a man on the street did not prevent evidence obtained from a search connected to that stop to be used against him.”
Now, it’s of course in the text of the Constitution itself that it can and should be changed as needed. Amendments are a good thing—as long as they protect freedoms, which they have, for the most part. OK, not really, but also—kind of. When courts feel like interpreting them that way. When they don’t, we might as well not bother having a Constitution. Why should we, if even the courts don’t follow what it clearly says?
The trend is clearly toward ignoring and/or misinterpreting the Constitution. Somehow, “unreasonable searches” and “probable cause” means that unreasonable searches are just peachy and improbable cause is just as good as that other kind. Y’know, whatever. The right of “the people” to “keep and bear arms” doesn’t really mean that the people have the right to keep and bear arms, apparently. Such thinking is not just a war on the Constitution, it’s a war on reality, where words are treated as meaning the opposite of their dictionary definitions.
So for all practical purposes, there really isn’t a Constitution in any real and lasting sense. There is only an oligarchy that wants cover—i.e., the “Constitution”–for its nefarious purposes, and sometimes the oligarchy calculates that said nefarious purposes are best served by allowing a bit of freedom for Joe Average. But that’s the exception to the rule, of course.
Great article at Zero Hedge about the shooting in Orlando, and it ably and concisely breaks down the reason why so-called “conspiracy theorists” are so quick to suspect that an attack in a public place committed by “radical Muslims” is not as simple as it is made to seem in the mainstream media. In a word, this is the reason: petrodollar. The article puts it thusly:
“Well – it’s all part of a plan to support US Dollar hegemony. How does that work? As we explain in detail in Splitting Pennies – there’s a policy in washington that goes something like – use US Dollars or we’ll bomb you.”
Iraq is of course one of the prime examples of this disgusting, immoral policy. As the writer states:
“[Since Saudi Arabia prices] their oil in USD – buyers of oil must first convert to USD. It’s really a genius method to support the US Dollar, created by Richard Nixon. It is long term thinking, that isn’t subject to daily market pressures. Anyway, shortly before the most recent US invasion of Iraq, they wanted to price oil in Euros. USA said – NO. Wrong answer. Must buy USD. It’s really a simple policy, let’s not be sensational or dramatic about it.”
We have written about this before here at LRM, for example in the post “WAR IS A RACKET TO PROP UP DOLLAR–END OF STORY”:
“So Iran, for instance, has stopped using the dollar for oil purchases because the dollar is worthless. Russia has stopped using the dollar (see “Iran, Russia dump dollar for rial, ruble“). China is always making noise about dumping the dollar (or someone is suggesting it to them.) Great article here on Russia and the petrodollar (“Forget Russia Dumping U.S. Treasuries … Here’s the REAL Economic Threat”):
“Russia threatened to dump its U.S. treasuries if America imposed sanctions regarding Putin’s action in the Crimea.
Zero Hedge argues that Russia has already done so.
But veteran investor Jim Sinclair argues that Russia has a much scarier financial attack which it can use against the U.S.
Specifically, Sinclair says that if Russia accepts payment for oil and gas in any currency other than the dollar – whether it’s gold, the Euro, the Ruble, the Rupee, or anything else – then the U.S. petrodollar system will collapse…“
Since–as we have seen–money is created by man and can be anything, someone who has come up with a system of money that is used by the entire world and enriches that “someone,” that “someone” has to have some way to enforce the use of this system of money or he will go broke. That “someone” in this case is the Federal Reserve.
And the banks that control the United States and issue the world’s reserve currency via the Federal Reserve can’t allow competing currencies; creating money from thin air to buy off the real wealth of the world is their racket and no one else’s. So off to another war–but about propping up a dying currency, not to stop genocide or for any other lofty, noble reason. Because war is a racket and money is fictional.”
Indeed, the petrodollar is the sum total of what are commonly referred to with the polite, how-could-anyone-be-against-it term “American interests” in the Middle East. Because without the petrodollar, the U.S. economy will surely fail and American hegemony will come to a screeching halt. And the 1%, who benefit mightily from said hegemony, will find themselves no longer lords, but serfs like the rest of us. That’s why these atrocities continue. As the Zero Hedge article states:
“Without this long term support of the USD, America wouldn’t enjoy such import advantages, things in China wouldn’t be ‘cheap’ – and America wouldn’t be able to carry such a hudge debtload as it does, and other advantages. This also virtually eliminates the need for any domestic Forex programs – because the USD is unchallenged. There’s a natural tendency for those policies that support US Dollar hegemony, to crush anything that smells like “Forex” – and to further justification of foreign entanglements du jour. On today’s menu, we have Syria, Ukraine, Russia, and NATO expansion in East Europe.”
So does this mean that the Orlando attack was definitely a “false flag,” a manufactured event to excuse and encourage more war, more security, less freedom domestically, more fear for the populace, etc.? Hard to say for absolutely sure, but one thing is perfectly clear—events like these tend to whip up the requisite “Two Minutes Hate” against Islam by large numbers of people, thereby making it much easier to convince the population that more war, more bombing, more drones, more restrictions on civil liberties are all completely justified. An example:
“Unfortunetely a lot more have to die until the world can no longer deny the truth. Islam must die, and muslims must either abandon that fucked up faith or suffer the consequences.”
That is typical of the comments on the following video: “We Need Islam Control, Not Gun Control.” Don’t want to link to it, but you can find it on YouTube.
Make of it what you wish.