Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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When these transactions are deconstructed, a horrific nexus of fraud becomes apparent. Once upon a time, the borrower sat down at the closing table at the escrow company. He did NOT own the property when he sat down at the table.

Yet, all of a sudden, he miraculously owns the property, free and clear of all encumbrances: otherwise, how could he mortgage it? The borrower has signed an agreement stating inter alia that. ‘for good and valuable consideration, RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED’, and being fully seized in the property (which means fully owning it without any encumbrance) ‘I, the borrower, do hereby enter into this agreement to mortgage said property as fully described in this document by virtue of my appointment as trustor, and do appoint as trustee irrevocably for this purpose’ (the name of the trustee who works for the title company handling the transaction).

Let us pause here. A document has been written which clearly states that the buyer admits to having received ‘consideration’ of some type PRIOR to this point in time – in exchange for WHAT? He admits that he owns the property free of all debt; otherwise he could not mortgage it. The escrow company agrees with him that the property at this point is free and clear of debt, or else they could not serve as the intermediary fiduciary party certifying these assertions as facts.

But this begs the very obvious question: if the borrower already owns the property, why does he need the mortgage, unless he is borrowing money to be used for some other private purpose of his? If he uses the property as collateral for the loan, when does he receive the money? Has the borrower, or has any party involved, EVER received the money from the mortgagee?

• The answer is NO!

What has actually happened is that the borrower’s promissory note was immediately monetized by stamping ‘Pay to the order of’ on the reverse of the promissory note, which was then deposited as cash into a deposit account at a bank. The borrower was never told that this occurred.

• This ‘stamping’ procedure amounts to an ACT OF CONVERSION.

Furthermore, the very ACT OF ALTERING A NEGOTIABLE INSTRUMENT, after the signature of the payer or original issuer is on it, VOIDS THE INSTRUMENT.

The next thing that happens, again without the knowledge of the buyer, is that the bank opens a transaction account based on the cash deposit of the buyer, and from this transaction account, using the bank’s name on a bank check, the check is issued to the seller in the agreed amount according to the sale figures.

• The numbers are of course all just bookkeeping entries, which simply debit the depositor’s account by the amount of the bank check.

The seller leaves the escrow office with check in hand, which he then proceeds to deposit in his checking account, whereupon his bank balance increases via bookkeeping entry, while the issuing bank’s transaction account is debited via a bookkeeping entry.

The next step in this fraudulent transaction occurs when the bank, now in possession of a large mortgage obligation, sells this mortgage obligation to a lender of some kind or other, usually the Government-Sponsored Enterprises (GSEs) Fannie Mae (Federal National Mortgage Association) or Freddie Mac (Federal Home Loan Mortgage Corporation). The bank then receives full cash payment, again via a simple bookkeeping entry, and is appointed the ‘servicer’ of the loan for its entire period of existence. The seller is happy, and goes his merry way.

But the buyer possesses no knowledge that he actually funded his own transaction through his own promissory note, and is never told that this was the basis of the entire transaction, or that he still has a demand deposit account at the bank from which the check to the buyer originated via the transaction account.

So the entire arrangement is absolutely unconscionable from the outset. Very clearly, as some US courts are showing signs of realizing, there was never any valid contract, so that no obligation could ever have arisen based upon its terms. The bank has clearly become unjustly enriched by means of the fraudulently prepared documents which have cleverly and most deviously concealed the true illegal nature of the transaction – wherein the bank was never in any danger of having incurred any risk whatsoever, and was enriched through the sale to the true purchaser of the mortgage, while not handing over the money to the actual issuer of the promissory note as the ‘consideration’ for the creation of the mortgage.

The bank’s charter will clearly reveal and confirm that such acts of concealment, conversion, misrepresentation, etc, constitute an act that is ultra vires, so therefore the bank is fully liable for these transgressions, and should have its charter revoked.

Another crucial dimension arising from this skewed state of affairs is that, since the entire note of obligation has now been proven to be null and void ab initio, and the property ‘owner’ is still the trustor, he is entitled at this point to revoke trustee appointment of the title company’s trust document, since it was obtained through fraudulent misrepresentation.

Where does this state of affairs NOW leave all the parties? Since there is no valid mortgage, the property owner is now free to have the property reconveyed into his name without any other names, hindrance or encumbrance applying to it. Specifically:

• The bank has sold an invalid mortgage to Fannie Mae.

• Fannie Mae is a true holder, since they took it for value as true, and as represented by the bank.

• The mortgage is now worthless as collateral, and can no longer be used as a component of the mortgage-backed securities bundle that has already been sold into the marketplace by Fannie Mae.

• The property owner has no obligation to Fannie Mae, as Fannie Mae was never a party to the sale. On the contrary, the bank is the party that benefited from the payment of cash provided by Fannie Mae, and the bank must therefore make Fannie Mae whole by return of the value by a legitimate means – either by paying cash, or else by the replacement of another fraudulently obtained mortgage.

• That leaves the property owner in possession of a free and clear property, and the criminal bank holding the bag as the entity responsible to the actual lender (Fannie Mae, or whomever), for repayment of the funds advanced.

• The bank cannot lay claim to any property interest, as the bank was engaged in a fraudulent transaction and had no valid contract with the buyer, and acknowledged that the property owner had no claim on this property at the time of the transaction.

Here, we need to take the law as it clearly stands, without second-guessing any dimension of its application, either in the United States or Britain. The law ‘leaves wrongdoers where it finds them’, and ‘they may not profit from their wrongdoings’.

This reality opens a further can of worms for the banks, in that the law is also governed by a maxim that ‘any money you make from the illegal use of my money is my money’.

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Suppose the judicial community knows this?

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    What you are describing is the "monetization of debt". It was fully exposed
by Jerome Daly back in 1968 in the "Credit River" decision. (The name of the
County is ironic) The point is that from 1968 to 2008, the banks had the right
to take an asset like real estate, appraise it, and then turn its value into cash, all with the blessing of the Federal Reserve System. This is because
Congress removed the gold reserve required to issue Federal Reserve Notes.
(read "The Biggest Con" by Irwin Schiff). Also, silver coins and certificates were removed from circulation(1968) which left only unconstitutional fiat Federal Reserve Notes in circulation. It was the beginning of the forty year inflationary bubble which ended in 2008.
    Now the whole world economy is deflating, the bubble has burst! Congress
and the Fed are trying to pump more air (into the bubble) but it escapes as
fast as they pump it in. The hucksters on Wall Street are hyping one more
bubble, gold. However that too will soon crash and everyone will know for
sure that deflation, not inflation, is the new reality.Since most of the debts
prior to 2008 were created out of nothing (ie fiat currency), nothing of value
was loaned. Theoretically, since nothing was loaned, nothing is owed. If our
Judges followed Constitutional law, all mortgage loans would be unenforceable. On a practical level, the debts can never be repaid because
there is not enough money in the World to pay the principal, much less the
interest! Real Estate has to crash back to the 1968 level before the crisis
will be over, as well as prices and wages. At that point a new silver backed
currency will have to be issued. Gold will be used as international balance
of trade currency. We are on the downhill side of the roller coaster and nothing will stop it until all this phony debt is liquidated!
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