Wells Fargo’s New Scam: Involuntary Debt Trap

So it has come to light that Wells Fargo employees did the following:

On Thursday, federal regulators said Wells Fargo (WFC) employees secretly created millions of unauthorized bank and credit card accounts — without their customers knowing it — since 2011.

The phony accounts earned the bank unwarranted fees and allowed Wells Fargo employees to boost their sales figures and make more money.

“Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses,” Richard Cordray, director of the Consumer Financial Protection Bureau, said in a statement.

In other words, the bank went one step beyond what they normally do, which is to create money out of thin air when a customer requests it.  They obviously decided, “Why wait around for customers to come in and ask us to create money for them?  Why not just do it on our own?  That way we can earn all the fees from securitization and the deposits that these bank and credit card accounts will give us.”  In other words, “We’re not creating voluntary debt slaves fast enough, so what’s to stop us from involuntarily chaining people to debts that they don’t even know about (answer to that question: certainly not the paltry fine Wells was charged nor the immunity they were granted)?”

Yes, credit card “receivables” are securitized, just like home loans.  That’s one reason they’ll give a credit card to just about anybody—to be able to sell it into securitization after originating the account, thereby selling off any risk to the bank into the open secondary market for credit card debt.  For example, here is Wells Fargo touting its “credit-card-backed” ABS, among many other types:

Asset-backed securities (ABS) – Gain access to both consumer and commercial asset-backed securities, including those backed by credit card, auto, student loan, container, and rail car receivables, among others.

How many of the fake Wells Fargo credit card accounts were securitized, generating all manner of fees?  No one that I’ve seen is really talking about that particular aspect of this situation, but if I had to hazard a guess as to an exact number, I’d guess 100%.

Keep in mind that credit card applications are, for the purposes of the bank’s treatment of them, more or less the same as a promissory note.  Indeed, this Wells Fargo credit card application includes a section called “Promise to Pay,” which states the following on p. 4:

(9)Promise to Pay

.When you use your Account or let someone else use it, you promise to pay the total amount of the Purchases, Cash Advances, and balance transfers, plus all interest, fees and other amounts that you may owe us. We may limit or close your Account, but the terms of this Agreement will apply until you pay the Account in full.

And as we all know, “promise to pay” is the magic phrase that creates a debt, same as in a promissory note!  Further down, there are more references to a “promise to pay,” such as this one on p. 7:

(21) Payments.

•Minimum Payment.  You promise to pay the Minimum Payment due by the Payment Due Date.

The fact that Wells Fargo maintains the right to securitize your account is contained in the following language on p. 9:

(29) Assignment

.We have the right to assign your Account to another creditor. The other creditor is then entitled to any rights we assign to them. You do not have the right to assign your Account.

So the idea that a bank is restrained from creating money just whenever it wants has now been proven to be totally false.  We already knew that banks manufacture currency out of thin air as part of their “divine right” of money creation, but the one check on that has always been that they could only do it when someone asked for a “loan.”  That is, the customer was at least in control of deciding whether or not to take on a debt via the magic “promise to pay.”

But now we have confirmation that they can and do just create money—in the form of checking accounts and credit card accounts—whenever they damn well feel like it.  And they can make you responsible for it–removing your control of what debts you will or will not have to pay.  The news coverage of this situation has often referred to the accounts as “fake,” which they were, just as the money that was created by these accounts is also fake, but both the accounts and the money they created were treated legally as very real, which is the entire problem with the monetary system as it currently exists.  Creating money out of nothing upon request was already and bridge too far, so this new revelation is just absolutely beyond the pale.  That’s too much power. And if anyone thinks Wells Fargo is the only bank that did or would do this…think again.

The banks have to be seized, shut down, and the power of money-creation given back to the people individually as I have written about many times

Posted in Conspiracy, Debt Slavery, Everything Is Rigged, Financialization, Securities, self-issued currency, Wells Fargo | Tagged , , , , , | 1 Comment

American Death Squads? Terrence Crutcher and Compliance.

Another day, another police execution of an unarmed black male, this time with his hands unmistakably up, and captured on video from multiple angles.

My initial take on it was to to tweet/Facebook the following:

“He complied…but still died…”

The idea behind that is of course that a number of people tend to excuse the actions of police when they kill unarmed black people by offering the following bit of supposedly helpful advice—“If only the unarmed black person would have complied with the officer’s orders, he’d still be alive.”

Except here, in the case of Terrence Crutcher, we see that such is not necessarily true, as it also wasn’t true in the case of Charles Kinsey, the black Florida mental health worker who was lying down on the ground with his hands up and visible, unarmed, yet was still shot by police.

It wasn’t true in the case of Philando Castile, who was shot and killed by an officer in Minnesota while reaching for his ID, per officer’s orders.

As cases like these continue to emerge, the question becomes obvious: Have the police essentially become American death squads? This is in no way meant to downplay or trivialize the horror of political death squads in El Salvador and other places.

But consider the first part of the Wikipedia definition of the term “death squad”:

“A death squad is an armed group that conducts extrajudicial killings…”

When the police, an armed group, kill an unarmed person like Terrence Crutcher, that is the very definition of an “extrajudicial” killing.  “Extrajudicial” simply means:

“done in contravention of due process of law”

When you have the police acting as judge, jury, and executioner—as has been the case in a number of these shootings–that is a denial of due process of law.  It is the exact opposite of the way that the American system of justice is supposed to work.

We can reach the conclusion that the police are acting as American death squads–per the definitions above–with a minimum of controversy when we consider the case of West Virginia officer Stephen Mader, the officer who was fired for not killing a suspect.

You may recall the details—Mader responded to a call from the victim’s girlfriend saying that the victim was threatening to kill himself.  When Mader showed up, the victim had a gun, but he wasn’t pointing it at Mader.  The victim told Mader to shoot him, and Mader said, “I’m not going to shoot you, brother”—and Mader kept his word.  Unfortunately, two other officers then showed up, and the victim flashed the gun in their direction, and he was shot without hesitation.  Mader was then fired because he did not shoot the suicidal man—the official explanation was that Mader “failed to eliminate a threat.”  The only problem with that assessment?  The victim’s gun wasn’t even loaded.

What are they so afraid of?

So it turns out that there actually was no threat, neither to Mader nor to the officers who did kill the suicidal man.  But that is the key—the police are taught to believe that the public at large is a threat, whether they have a gun or not, or whether it is loaded or not.  And that the threat must be eliminated.  In other words,  the police department (at least this one in West Virginia) wants extrajudicial killings to take place.

The public is also taught to believe that there are constant threats of violent crime, even though violent crime is way down compared to past decades.  As the Washington Post reports:

“This decline in gun violence is part of an overall decline in violent crime. According to the FBI’s data, the national rate of violent crime has decreased 49 percent since its apex in 1991. Even as a certain type of mass shooting is apparently becoming more frequent, America has become a much less violent place.”

So what are the cops so afraid of?  Or why do they say they’re so afraid?  Why do the cops seem to perceive a phantom threat that statistically speaking, isn’t there?  Or why do they want us, the general public, to believe that such as threat is there?

Why is it that, as the public has become less violent, the cops have become more violent?  To put it another way, it is the cops who are out of control, not the public.

Why was Crutcher executed?  After all, there was nothing going on to make the cops think anything untoward was happening–no gun visible, no one complaining of being harmed by Crutcher, no visible signs of anything awry. Just a guy with a car stalled in the middle of the road (which is why the cops were dispatched to the scene).  A big black guy.   And he very well may have been giving the cops some attitude, like “Why do you guys have a bunch of guns on me? I’m telling you, my car just stalled out. Watch, I’ll show you, it won’t even start…”  But that doesn’t mean he deserved to be executed.

Indeed, the cops could have retreated if they actually felt threatened. There was no apparent reason to take Crutcher into custody immediately.  But for some reason, they wouldn’t back off long enough to assess what was actually going on.  The cops and their defenders would like us to believe that it is entirely possible—and totally plausible—that Crutcher did have a big gun in his car and was reaching for it, even though statistically, that is way less likely than it would have been decades ago.

However, if that had been the case—and it wasn’t; Crutcher had no gun in his raised hands or in the car—the second the cops see it, they light him up. They’ve already got the drop on him. They’re trained. He presumably isn’t. They can afford to wait until they actually see a gun. That’s what we’re paying them for.

Or that’s what we think we’re paying them for.  The cops, though, seem to think they are a death squad, as evidenced by the case of Stephen Mader.  They literally think that they should shoot first, ask questions later.

I’m not at all comfortable with this state of affairs, and I’m shocked at people that are.  And there are quite a few people who think that way, who say that, “Well, if you don’t follow a cop’s orders to the letter, you’re gonna get shot and deservedly so.”  They think that  we are put on this earth to obey cops.

We are not, and we must remind the cops and their cheerleaders of that fact.

Posted in Police State, racism | Tagged , , , , , , , , , | 4 Comments

Obedience—not resistance—is futile


Resistance is not futile—obedience is.

Don’t believe me?

Think about it.

You obey and what happens? More obedience is required. You go to work, you pay your bills, you pay your taxes, you support your candidates, and so on.

Repeat after me I am free

And what happens? More work, more bills, more taxes, more unjust laws. It never ends—just more debt, i.e., obedience. “Obedience” is a code word for slavery. “Authority” is a code word for master.

What if you just didn’t obey? What if you resisted? That’s where the freedom is—in resistance.

The worst that could happen is…you’d be free…

The best that can happen with obedience?  Well, ask The Godfathers…


Where does resistance get you?  Think Rosa Parks.  Or George Washington.  Or MLK.  Or BolivarMalalaTank Man.  The results may not be immediate or immediately desirable, and getting to the results will not be easy.  Not at first, anyway.

Resistance is vital, and it’s everywhere in the news right now—Colin Kaepernick and his growing protest, the Native peoples fighting the pipeline.

Resistance is life—every day we resist hunger, thirst, disease, injury.  We daily refuse to obey the dictates of the world that constantly reminds us that it could do without us.

Some of the best writing on the detrimental effects of obedience I have ever read is from Arthur Silber:

By demanding obedience above all from a child (whether by physical punishment, by psychological means, or through some combination of both), parents forbid the child from fostering an authentic sense of self. Because children are completely dependent on their parents, they dare not question their parents’ goodness, or their “good intentions.” As a result, when children are punished, even if they are punished for no reason or for a reason that makes no sense, they blame themselves and believe that the fault lies within them. In this way, the idealization of the authority figure is allowed to continue. In addition, the child cannot allow himself to experience fully his own pain, because that, too, might lead to questioning of his parents.
In this manner, the child is prevented from developing a genuine, authentic sense of self. As he grows older, this deadening of his soul desensitizes the child to the pain of others. Eventually, the maturing adult will seek to express his repressed anger on external targets, since he has never been allowed to experience and express it in ways that would not be destructive. By such means, the cycle of violence is continued into another generation (using “violence” in the broadest sense). One of the additional consequences is that the adult, who has never developed an authentic self, can easily transfer his idealization of his parents to a new authority figure. As Miller says [emphasis added]:
“This perfect adaptation to society’s norms–in other words, to what is called “healthy normality”–carries with it the danger that such a person can be used for practically any purpose. It is not a loss of autonomy that occurs here, because this autonomy never existed, but a switching of values, which in themselves are of no importance anyway for the person in question as long as his whole value system is dominated by the principle of obedience. He has never gone beyond the stage of idealizing his parents with their demands for unquestioning obedience; this idealization can easily be transferred to a Fuhrer or to an ideology.”

Go forth and resist death and slavery knowing that it is NOT futility!

Posted in Crap-italism, Debt, Debt Slavery, Everything Is Rigged, freedom, Police State, Resistance, Tyranny, Wage slavery | Tagged , , , , , , , , , , , , , | Leave a comment

Kaepernick fires off a pass to…everyone. Hopefully we’ll make the catch.

NOTE 9/12/16: This was previously posted August 29, 2016 but was inexplicably removed for some reason.  Probably some error of mine, but I didn’t do anything differently than I normally do.  Oh well, here it is again, just not quite as timely…

A collection of thoughts about 49ers QB Colin Kaepernick…

So I posted this meme on Facebook under this status: “He will inspire others as others inspired him. It’s not really about what Colin did, it’s about what you are gonna do. In a very real sense, we are all his wide receivers…”

Colin Kaepernick

…and a Facebook friend mused that he could support Kaepernick in this case if only he hadn’t made it about race.  I mused back that:

That’s a fair point. And I agree–the real issue isn’t race, it’s state violence. Not that race isn’t also an issue, which is a source of confusion for a lot of people, because the victims of much of the most outrageous state violence are black. Having said that, the outrageous state violence upon minorities creates a desensitizing effect that will carry over when the same level of indiscriminate state violence gets turned on the white population. It will already be established that, if an unarmed person is killed by the police, that unarmed person should have “obeyed orders” and not been “breaking the law.” The unarmed victim will always be seen as having “brought it upon himself.”

And when one really thinks about what Kaepernick actually did, one might conclude, as I did, that:

It’s actually quite eye-opening that the simple act of remaining seated while a song plays can generate so much controversy in 2016. The best thing those who oppose him for it could have done would have been to completely ignore it, which would have deprived his very small gesture of any of its power. The eye-opening part is of course that in an age in which we can carry all the accumulated knowledge of human history in our pockets, purses, bras or what have you, it still strikes a lot of people as super-important to conform to an outmoded, gratuitous exercise in groupthink.

An FB friend posted this misguided meme…

Colin Kaepernick alleged house

Which I reposted with the following:

No! The anti-Kaepernickians completely miss the point–he never said HE HIMSELF was oppressed. By sitting during the anthem, he stood NOT for himself, but for others. He stood up by sitting down. He is obviously quite aware of how good he personally has it, which puts him in the position of being able to call attention to the plight of those who aren’t as privileged as he is, which makes his simple act all the more admirable.

And finally, there was the Facebook friend who posted this single sentence: “There’s no such thing as an oppressed American.”

FB-No oppressed Americans

Wow. Lots of agreement with that statement by this person’s friends.  I asked what this person meant by the use of the word “oppression.”  His answer:  “By ‘oppressed,’ I mean when someone isn’t afforded the rights and opportunities that every other citizen enjoys…that no American is being held back, or treated unfairly.”  Eh, close, I guess.  Not exactly the Webster definition of “unjust or cruel exercise of authority or power.”  How anyone can state no Americans are oppressed under that definition is beyond me…

UPDATE:  In the days between the original posting of this article and this re-post, I created the following meme:



Posted in California, civil rights, Free Speech, racism | Tagged , , , | Leave a comment

Metallica on the bankster economy?

On their killer new tune “Hardwired,” Metallica probably didn’t intend to comment on the rigged, doomed-to-crash bankster economy, but that’s how I hear these lyrics in the song’s chorus:

“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!

Of course, if we cancelled the black hole of debt and took the radically equalizing step of using self-issued currency, we wouldn’t be fucked at all…

Posted in Crap-italism, Debt, Debt Slavery, Everything Is Rigged, Feudalism, self-issued currency, Uncategorized, Wealth transfer | Tagged , , , , , , , | Leave a comment

Wall Street Wanted Homeowners To Default And MIHOP


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.”

Posted in Financialization, Foreclosure, Foreclosure fraud, Redistribution | Tagged , , , , , , , , , | 1 Comment


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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Does Money Exist? Of Course Not.


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!”

Further down:

“…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!

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MERS: Fake organization sues pranksters pretending to be MERS

LRM-Jack London Mail

The mail store where the prank MERS had its mail sent.

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!

Posted in California, Foreclosure, Foreclosure fraud, MERS, Paper terrorism, Securitization Fail | Tagged , , , , , , , | 1 Comment

Why didn’t Yvanova help Yvanova? Q & A with CA attorney David Seal



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.

Posted in California, Foreclosure, Foreclosure fraud, Securitization Fail | Tagged , , , , , , , , , , , , | 1 Comment