By: Neil Garfield | LivingLies
“This case has appropriate and serious repercussions to foreclosure mills. It is common for the substitute trustee (frequently Tiffany and Bosco) or the attorney to send out a Notice of Default and Notice of Sale PLUS a Debt Collection Letter. Now they might be liable for sending out false and misleading information.” Neil F Garfield, livinglies.me
This case stands for the proposition that the note is evidence of a debt and can be used to collect on a debt. The Mortgage or deed of trust is all about an interest in real property and is an entirely different instrument —- and the debt collector cannot say that the debt collection letter was sent to enforce the mortgage because that is NOT what it says or what they can do.
The repercussions and ripples from this decision are far-reaching. Can the trustee be operating as both the seller of the property AND as a debt collector. Either way, this decision says they can be sued for misrepresenting the truth and guiding the borrower into foreclosure — a practice sometimes refereed to as dual tracking, but in this case they had the borrower “opt-out” of Hamp under false pretenses so they could foreclose.
You might ask why T&B have so much power? You could also ask why there is a rush to a fire sale on property where the majority could be worked out in payments affordable to the homeowner. The answer is that the pile of paperwork relied on by the foreclosers is just that — a pile of papers that have no value or legal validity. The failure of the closing agent to place the name of the REMIC on the note and mortgage (deed of trust) together with the fact that the named payee was merely a placeholder (sham) just like MERS, PLUS the fact that the terms of repayment on the note differed from the agreement of the actual source of funding from the investors on the bond, all undermine the validity of the obligation, note and mortgage more than questionable.
Discovery will reveal exactly this pattern. AND this pattern means that the note is not evidence of the debt because the payee or lender named did not live up to its part of the bargain — it didn’t fund the loan. Thus the separate contract providing a contingent interest in the property is a nullity because it is predicated upon the enforcement of an unenforceable note and obligation.
Lawyers take note! The tide is turning. Those in front of it will benefit greatly. Those who join later may receive some benefit but nothing like the early adopters. These transactions are all sham transactions giving rise to repossession by the disposed homeowner and damages for wrongful foreclosure including, in California, damages for emotional distress.
If the investors wanted to enforce the note or mortgage they could not do it as they have stated in their own pleadings. This was a PONZI scheme of the highest order and it is still unraveling.
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