Wading through the difference between substantive claims or theories and the procedural opportunities to present them

by Neil Garfield

A recent exchange of correspondence from a good client of mine (one of the legacy cases I am still directly litigating) produced questions and answers that mirror literally hundreds of inquiries I receive every week. I offer the following as guidance to both lawyers and clients.

The context of such conversation and communications between lawyer and client is that the client is usually completely unaware of the procedural paths and restrictions on presenting answers, affirmative defenses, counterclaims, collateral lawsuits, theories, and facts. While the lawyer must be interested in all the facts, the lawyer must choose to dance those facts that are most likely to lead to a successful judgment in favor of his client.

The friction comes when the client continues t think of new ideas, facts, and other theories or suggestions while the case is already proceeding. Generally speaking, most of those new issues are no longer available to discuss.

The one place where that is NOT true is in the narrow window in which the court allows the pursuit of reasonable discovery demands that reasonably relate to the allegations of a foreclosure complaint or the affirmative defense raised. That narrow window is one in which properly rafted discovery demands are served and all motions and hearings are field and set such as Motion to Compel Motion for Economic Sanctions, Motion for Evidentiary Sanctions (or positive inference), and motion in limine or Motion to exclude certain evidence.

So the following represents the exchange between the lawyer (me) and client, redacted to remove identifiable parties.

Your email contains much in philosophical issues that affect the manner in which mortgages are created, communication with lenders and services are processed, workout requests or settlement demands are processed, and a host of other issues. Virtually none of them have any relationship with your current pending appeal.

None of the issues you raise merit a telephone conference between you and I. Your question would require several hours of instruction on Florida substantive law, Florida substance procedure and Florida customs and practices

My engagement is not educational. Such an endeavor would result in a presentation and questions and answers that (a) you won’t completely understand and (b) would take several hours costing at least $2,000 and possibly more.

My role is as an advocate for you and we appear to have crossed the threshold in which Oral Argument might be canceled. This I am reading the cases cited and preparing myself for oral argument in which I will be questioned by the panel. This means that they will mostly be asking about the procedural and jurisdictional legal issues about which I argued in the brief and defending the argument propounded by opposing counsel.

Except in rare instances specifically and expressly provided by the State Consitution or State law, there are no new arguments or acts allowed unless, as we have done in your current appeal you allege lack of jurisdiction by the lower trial court and the current appellate court. IIn, fact, in the current state where all briefs have been exchanged and filed, there I nothing else to raise in writing.

As a matter of good practices in appellate litigation, it is rarely productive and frequently dismissed by the panel when the advocate for a party attempts to introduce new factual issues or even new emphasis on factual issues or legal conclusions.

Nonetheless, I answer the apparent questions and comments in your email as follows:

You wrote: shouldn’t we give [my trial lawyer] the Zoom link, so he will better understand how to argue if we go back down to the lower court? The answer is yes. You take care of that but I assume Ackley will only take the time he is retained to do that and otherwise has no scheduling conflicts.

You wrote: How can I ensure no one else comes after me for money over this? Would you represent me during the settlement process? Answer: No assurance in court for anything. If I am retained, yes I can represent you.

You wrote: What are our chances of having the 2nd DCA decide in our favor? What are the chances that they will want to settle before it goes back down to lower court? Answer: I don’t know the answer and nobody does. Statistically speaking the overwhelming percentage of appeals fail to produce any correction and foreclosure cases are even worse. It has been done by multiple lawyers but there is no statistical evidence as to what constitutes a successful appeal in foreclosure cases.

You wrote: Do you think my asking for $5 million to settle would be too much? Answer: Nobody can answer that question yet. First, you need to win. Don’t trip over your own feet. You have no claim if the trial and appellate system decide that the claim against you was valid and enforceable.

You wrote: If it goes back down to lower court, can I switch to Federal court? Answer: No. The time to file a motion for removal has expired and you have no credible grounds for doing so.

You wrote: How do I prove that their long fraud on the court and the damages thereby done to me were so extensive that compensatory damages should be given for that as well? Answer: You can’t — until you file a lawsuit seeking such damages. It is not possible to make such claims in the current case. The new lawsuit is an entirely new and different matter and will cost at least $15,000 to pursue.

You wrote: Final Judgement said there is over $375,000 MONEY OWED BY ME to Deutsche Bank National Trust Company as Trustee for Long Beach Mortgage Loan Trust 2006-WL3 when I actually owed (or didn’t owe, as per our theory) $206,000. The house is now worth, according to Zillow, over $360,000 (has been going up in value by $16,000 per month for months). Further, if the loan was sold multiple times, shouldn’t I be entitled to some of that money? Should I be calculating how wrong the judgment was, what they made from my signature through their criminal activity, and what my damages (settlement amount) should be? In my mind, isn’t there a law (you wrote about it at some point on your website) that says that if a false debt is ascribed to one, one can ask for 3 times that amount ($1.1 million) in damages? Is that considered punitive or compensatory damages? And couldn’t I ask to see exactly how many times my loan was sold, and to whom? Answer: these issues are potentially ripe if and only if you
(a) win the appeal
(b) the remand order from the Appellate court allows full inquiry in the lower court into the naming of a new bidder without consideration
(c) you prevail in discovery and the evidentiary hearing and
(d) the court concludes that
(1) the transfer of bid was void.
(2) the bid at auction was void
(3) the sale of the property was void
(4) the transfer of bid by the attorney of record was a legal nullity
(5) the transfer of bid was without consideration and the reason for that is that no payment was due
(6) that no payment was due because the judgment holder suffered no loss and because the original claim for remedy of nonexistent injury was also nonexistent.

You wrote: Won’t they be anxious to settle if it appears that I understand that they are committing fraud on the court? How they are trying to get them and their buddies (the “registered holders” entity) a free house, on top of all the money they’ve received for their other frauds? Answer: NO. The only thing that is important at this stage is the facts in the record. This MIGHT end up being supplemented by an evidentiary hearing in the lower trial court. Your feelings, knowledge, or added theories have no current significance to the outcome of the case. Second, all foreclosure mills operate under one single main directive — wear out the opposition. The translation of that is that they will litigate to the bitter end in most cases as you have already seen. They do this because most litigants drop out of the fight.

You wrote: If the lower court decides to reverse the foreclosure, would Chase/SPS still be able to come after me? (This may be theoretical, but I want to know ). Answer: I have no way of knowing what they’ll do. I have cases where we won multiple times but they seeking to pursue administration, collection, and enforcement of a nonexistent obligation on behalf of a nonexistent entity with no injury and no claim. One of them is now 14 years old. In your case, neither Chase nor SPS has ever stated that THEY have a claim against you. That would make it far more challenging for them to now say that the real party in interest against you was either one of those entities.

You wrote: So the question I have then is: did Chase at some point actually create an entity called ” Registered Holders of… LBMLT-2006-WL3, Asset-backed certificates WL3-2006″ (the one that got the assignment of bid, and the one SPS listed in a proof of claim in BK court) and then somehow put my loan into (or commit my loan to) that 2nd entity? Was it actually trust for securitized loans, and if so was my loan then actually (or fake-)securitized? Or was it some other nefarious entity? If it wasn’t securitized at all, or fake-securitized, can they somehow still get the lower court to decide in their favor (like with a “no harm done” argument). If it was fake “securitized”, was it the same type of thing as all the others, where it was sold multiple times? Answer: These points MIGHT be relevant if we can get the trial judge to consider the issues that are outlined above. Your points WOULD be relevant in a separate collateral lawsuit.

You wrote: Modification/Non-HAMP–Recently, XXXXXXXXXXX flew me up to Tallahassee as a Florida homeowner (not as APON Secretary) to publicly discuss my case (at a press conference), in particular the difficult time I had modifying the loan (to get support for the bill they had introduced–see other email). When I explained to that I was able to modify the loan with WAMU before the 2008 crash, and then that during the foreclosure I went through a long modification process (in which they said I did not qualify for a HAMP mod and) which ended with me rejecting their offer of a non-HAMP loan (called something like a “JPM modification”), my friend XXXXX said she felt that the reason that SPS didn’t offer me a HAMP loan modification was that it wasn’t one that was bought by Freddie and Fannie, or maybe it wasn’t ever “securitized” (or even fake-securitized) before Chase took over the loan . This was something I had suspected (using my intuition) before, and I had asked that question during discovery (my own question–though most of my discovery questions I adopted from your guidelines). They denied that there was another trust that Chase created where my loan was “deposited”. Answer: First, you need to recognize and accept that fact that for your case, under the procedural rules that you may no longer challenge or seek a variance, the time for amending your answer, affirmative defense and potentially asking to file a counterclaim is 100% expired. You might include such facts as part of a collateral lawsuit seeking declaratory, injunctive, and supplemental relief.
Such a suit might have considerably more credibility if you are able to prevail in the appellate court and then prevail in the proceedings that occur pursuant to the order of remand.
The HAMP violation is probably true (and provable) — but you must remember that the parties with whom you are dealing had no right, title, or interest relating to you, your property, your alleged (nonexistent) underlying obligation or loan account receivable, the note you issued along with eh mortgage. A more accurate description would be interference with your HAMP protections rather than a violation of HAMP itself. You can’t get relief for violation of HAMP or even negligence in processing HAMP applications if your servicer never had a right to receive the application or process it.
The reason for the foregoing suggestion of interference rather than a violation is simple.
• If they were not a creditor who maintained a loan account receivable with a history dating back to the origination of the transaction, legally they were not an authorized claimant under UCC 9-203 UCC, adopted verbatim by the Florida legislature (and all U.S. legislatures).
• If they were not a legally authorized representative of a creditor (not just a claimant) then they and no right to even correspond with you (violation of FDCPA and other statutes) much less offer or pursue you to execute forbearance, modification etc.
• As such, not being a creditor or servicer in the conventional sense, their defense can and will be that they were not subject to the requirements and restrictions of the lending and servicing statutes since they were neither a lender nor servicer.



Stop Foreclosure, Sue for Breach of Contract 

Now is the perfect time to stand up for your legal rights and sue for beach of contract, mortgage fraud, and foreclosure fraud because the legal tide is beginning to turn, and homeowners are starting to win! In 2016 the California Supreme Court ruled in Yvanova v. New Century Mortgage Corporation (Case No. S218973, Cal. Sup. Ct. February 18, 2016) that homeowners have legal standing to challenge an assignment of the mortgage loan contract in an action for wrongful foreclosure on the grounds that the assignment(s) is/are void. Obviously if the court had ruled differently, the banks would have had carte blanche to forge mortgage assignments with wild abandon. In fact, without a system of endorsements and assignments it would be impossible to determine who has a legitimate interest in the property!

In THE PAPER CHASE: SECURITIZATION, FORECLOSURE, AND THE UNCERTAINTY OF MORTGAGE TITLE ADAM J. LEVITIN writes “the mortgage foreclosure crisis raises legal questions as important as its economic impact. Questions that were straightforward and uncontroversial a generation ago today threaten the stability of a $13 trillion mortgage market: Who has standing to foreclose? If a foreclosure was done improperly, what is the effect? And what is the proper legal method for transferring mortgages? These questions implicate the clarity of title for property nationwide and pose a too- big-to-fail problem for the courts.

The legal confusion stems from the existence of competing systems for establishing title to mortgages and transferring those rights. Historically, mortgage title was established and transferred through the “public demonstration” regimes of UCC Article 3 and land recordation systems. This arrangement worked satisfactorily when mortgages were rarely transferred. Mortgage finance, however, shifted to securitization, which involves repeated bulk transfers of mortgages.

Like many other cases, current trial court decisions are getting reversed because the courts are waking up to the reality of the rule of law. What they have been following is an off the books rule of “anything but a free house.” However a recent Yale Law Review Article eviscerates the assumptions of a free house for the homeowners and destroys the myth that somehow that policy has saved the nation. You can read the Yale Law Review article “In Defense of “Free Houses” for more information on this tide change.

To facilitate securitization, deal architects developed alternative “contracting” regimes for mortgage title: UCC Article 9 and MERS, a private mortgage registry. These new regimes reduced the cost of securitization by dispensing with demonstrative formalities, but at the expense of reduced clarity of title, which raised the costs of mortgage enforcement. This trade-off benefited the securitization industry at the expense of securitization investors because it became apparent only subsequently with the rise in mortgage foreclosures. The harm, however, has not been limited to securitization investors. Clouded mortgage title has significant negative externalities on the economy as a whole.

If your loan contains fraud or it was securitized then your lender may have breached your mortgage loan contract, and therefore your mortgage loan contract could be legally challenged in a court of law. If your mortgage loan contract is declared legally void, then any assignments of the mortgage loan contract, or subsequent assignments, could also be declared legally void.

Securitization is the process of taking an asset and transforming them into a security. A typical example of securitization is a mortgage-backed security (MBS), which is a type of asset-backed security that is secured by a collection of mortgages. Keep in mind that it is perfectly legal for banks to create mortgage-backed securities (MBS’s); however there are significant legal ramifications that will either harm you, or benefit you, depending on what actions you take in response to the fact that your mortgage or deed of trust is legally void resulting in your property, in reality, being unsecured, just like a unsecured credit card debt. What’s in your wallet?

This is why we recommend that you take immediate action and sue for the remedy the law entitles you to, and that you deserve. Treble damages and clear and free title to your home. Not sure if your loan contains mortgage fraud or if it was securitized, no problem, we will do a free mortgage fraud analysis and free Bloomberg securitization search for you.

Many of the programs that had modest success in the early days have fallen into disfavor as banks have enacted strategies to counter their progress. The banks are not going to go down without a serious fight. They have a large arsenal of tools to use, and the legal muscle to keep the industry off balance. This is not a static game. The reason that banks have been successful, for the most part, in protecting the large number of mortgages that were securitized is that there is an intricate web of legal theories that they hide behind to justify what they have done. In effect, they have created a shell game where the ball seems to move around in defiance of the laws of physics.

The banks are relying on a complex interaction between UCC 3 commercial paper law, UCC 9 securitization law, bailment law, agency law and local laws of the jurisdiction where the property is located. They would have us believe that what they have been doing since the 1970’s is perfectly legitimate. Many lawyers who have challenged the banks have gotten close to exposing the scheme only to find that judges retreat away from the complexity of the legal theories involved and fall back on procedural barriers under the auspices of protecting the equitable interests of the banks and their agents.

FRAUD STOPPERS Foreclosure Defense Program has moved the bar forward in many substantial ways:

  • Our Private Administrative process is a targeted approach to Informal Discovery:
  • 3-501. PRESENTMENT or States equivalent
  • Mortgage Error Resolution/Request for Information: If you believe there is an error on your mortgage loan statement or you’d like to request information related to your mortgage loan servicing, you must exercise certain rights under Federal law related to resolving errors and requesting information about your mortgage loan. If you think your credit report, bill or your mortgage loan account contains an error, or if you need more information about your mortgage loan, you send a written letter concerning your error and/or request.
  • Cutting edge mortgage fraud examination and court ready lawsuits and trial ready evidence to win your case
  • Nationwide foreclosure defense attorneys and Pro Se litigation education and support products and services

Subsection of Presentment (example Covenant 8 of UCC3 Note) shows NOTE and under paragraph 1 states: “BORROWER’S PROMISE TO PAY: In return for a loan that I have received, I promise to pay….

MULTI STATE FIXED RATE NOTE–Single Family–Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3200 1/01 (page 1 of 3 pages) Covenant:


I and any other person who has obligations under this Note waive the rights of Presentment and Notice of Dishonor. “Presentment” means the right to require the Note Holder to demand payment of amounts due. “Notice of Dishonor” means the right to require the Note Holder to give notice to other persons that amounts due have not been paid.

  • 15 U.S. Code § 1692g – Validation of debts

Often a debt collector cannot validate a debt and therefore cannot legally enforce collections.

  • Truth In Lending Act (TILA RESCISSION) codified in 12 CFR Part 226 (Regulation Z); particularly§ 226.34 Prohibited acts and §226.32 sub-paragraph (ii) et seq. predatory lending practices

A mortgage loan covered by the Truth in Lending Act may be rescinded by mailing a Rescission Letter to the purported lender, forcing the purported lender/creditor to oppose that rescission with a lawsuit within 20 days or lose all opposition rights.

  • The primary focus of the legal aspect of our program revolves around taking the theories and best practices that have been most successful around the country and make refinements.

“Here, the specific defect alleged is that the attempted transfers were made after the closing date of the securitized trust holding the pooled mortgages and therefore the transfers were ineffective.

  • Our program seeks to avoid getting mired in the complexity of the various areas of law involved, instead focusing on a simple, focused approach that makes it harder for judges to avoid the strength of our core arguments.
  • The PMA trustees and executive team have a diverse set of skills and significant experience in the core areas that will improve the success factors for our operations.

We have spent an exhaustive amount of time analyzing all of the cases that have been successful in resolving mortgage securitization problems. We have designed our legal information litigation strategy to hit the banks hard and fast where they are most vulnerable.

Our primary focus is on getting clear and marketable title to the property by arguing that the actions of the banks have made the security provisions of the mortgage/deed of trust unenforceable.

Instead of fighting the foreclosure itself head-on, we argue that none of the banks or their agents has the right to enforce the foreclosure provisions of the Mortgage/Deed of Trust. In effect, if none of the banks have standing to enforce the foreclosure provision, we are entitled AS A MATTER OF LAW to a declaratory judgment of Breach of Contract (Security Agreement) that is res judicata, i.e., a permanent ban on foreclosure.

The Stand & Fight Program is a complete program that provides you with everything you need:

  • Administrated Process
  • Court Ready Chain of Title Investigation and Signed Affidavit
  • Complaint along with all exhibits
  • Legal Research
  • Legal Briefs
  • Motions
  • Answers
  • Interrogatories
  • Depositions
  • Case Management for Local Civil Rules of Procedures
  • Training and Support

Take action right now and get the FACTS and HELP that you need to gain the legal remedy that the law entitles you to, and that you deserve!

[ccwr-pricing-table id=”2″]

For information on foreclosure defense call us at 800-459-1215. We offer litigation support, admissible evidence, expert witness testimony, education, training, and support in all 50 states to attorneys and pro se homeowners.


Get In Touch


111 W Washington Street,
Chicago, IL 60602

Hours: CST

Mon: 10am – 5pm
Tue: 10am – 5pm
Wed: 10am – 5pm
Thur: 10am – 5pm
Fri: 10am – 5pm
Sat: Closed
Sun: Closed

Send A Message


Fraud Stoppers Logo

THIS SITE IS NOT INTENDED TO BE MISCONSTRUED AS LEGAL ADVICE. FRAUD STOPPERS is a Private Members Association PMA. FRAUD STOPPERS PMA is NOT a law firm, non-profit organization, or government agency.  FRAUD STOPPERS PMA does not operate in the public sector. Although this website is visible to the public  FRAUD STOPPERS PMA does not intend for any information contained in this website to be considered as legal advise.

The information about Foreclosure law and other legal information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.  Information on this website may not constitute the most up-to-date legal or other information.  This website contains links to other third-party websites.  Such links are only for the convenience of the reader, user or browser; FRAUD STOPPERS and its members do not recommend or endorse the contents of the third-party sites.

Readers of this website should contact their attorney to obtain advice with respect to any particular legal matter.  No reader, user, or browser of this site should act or refrain from acting on the basis of information on this site without first seeking legal advice from counsel in the relevant jurisdiction.  Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation.  Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client relationship between the reader, user, or browser and website authors, contributors, contributing law firms, or committee members and their respective employers. This site provides “information” about the law and is only designed to help users safely cope with their own legal needs. But legal information is not the same as legal advice — the application of law to an individual’s specific circumstances.

The views expressed at, or through, this site are those of the individual authors writing in their individual capacities only – not those of their respective employers, FRAUD STOPPERS, or committee/task force as a whole.  All liability with respect to actions taken or not taken based on the contents of this site are hereby expressly disclaimed.  The content on this posting is provided “as is;” no representations are made that the content is error-free.

For instant access to an affordable local competent attorney click here