How Could This Not Be a Loan?

by Neil Garfield

I think the one idea that sticks in the throat of nearly everyone is the idea that no money was loaned. That idea seems impossible and to many skeptics, it sounds like a snake-oil salesman trying to peddle what people want to hear. People know that they did really buy their home, and the majority of these transactions are refinancing, which means that the old “lender” got paid off, right?

First of all, let’s agree on at least one thing. Virtually all installment payment agreements are now subject to claims of “securitization.” This means that behind every transaction is an investment bank that is arranging payments, only where necessary, and who is receiving the proceeds of consumer payments plus all of the revenue and profits from the sale and training of unregulated securities.

If there is one thing missing from most articles analyzing consumer debt, it is the failure to recognize that a handful of investment banks are the center of all of those transactions and they all have reciprocal agreements. Those agreements are mostly in writing but difficult to obtain, and sometimes tacit. You don’t need to look any further than any pooling and servicing agreement to see the world’s largest banks all participating in the same venture. In prior years, this fact alone would’ve been sufficient for antitrust action.

So here is my effort at explaining it. There are several categories of transactions that occur with homeowners.

1. The homeowner is buying a new home from a developer or contractor.
2. The homeowner is buying a home from the existing homeowner.
3. The homeowner is buying a home from a party or business entity that asserts ownership after foreclosure on the previous homeowner.
4. The homeowner is refinancing the new home they purchased from a developer or contractor.
5. The homeowner is refinancing a home they bought from a prior homeowner.
6. The homeowner is refinancing a home they bought from a foreclosure buyer.
7. The homeowner refinances by entering into a forbearance agreement.
8. The homeowner refinances by entering into a modification agreement.
9. Securitization of data and attributes of homeowner’s promise make scheduled payments — no relevant transaction because there was no sale of the underlying obligation, legal debt, note or mortgage (or deed of trust). Since law requires that sale for enforcement by successors, the foreclosure players fake the documents.

Let’s define our terms.

“Homeowner” means in this case someone who is looking to buy a home or who is looking to change their transaction.

“Refinance” means that the homeowner is a party to some transaction and/or documentation that changes the terms of the homeowner’s prior promise to make scheduled payments.

“Money source” means the investment bank that (a) borrowed money from a third party bank like Credit Suisse, (b) used the borrowed funds to make payments to or on behalf of the homeowner. (It pays back the loan to its lender (and co-underwriter of certificates) through sales of certificates to investors promising scheduled payments, without maturity, collateral, or a guarantee of payment.)

1. PURCHASE OF NEW HOME FROM DEVELOPER: generally speaking, this is the only transaction that is in substance but it appears to be in form. Money is actually paid to the developer.

The money trail for this transaction looks something like this: LENDER—>MONEY SOURCE/INVESTMENT BANK—>SUBSIDIARY OR CONTROLLED AFFILIATE OF MONEY SOURCE—>CLOSING AGENT—>DEVELOPER.

The paper trail (i.e. contracts) for this transaction looks something like this: MONEY SOURCE/INVESTMENT BANK—>AGGREGATOR (like Countrywide Home Loans)—>(a) Assignment and Assumption Agreement with Originators (like Quicken Loans) and (b) Indemnification Agreement with title insurers—>Mortgage Broker—>Mortgage salesman—>Homeowner execution of promise to pay and collateral for making scheduled payments to Originators.

Bottom Line: The homeowner is getting money, courtesy of an investment bank that is NOT intending to make a loan or be governed by any lending laws.

The homeowner is making a promise to pay the originator who did not lend any money or make any payments to or on behalf of the homeowner.

The only party identified as a lender is the originator who did not make a loan.

The only party that arranged for payment disclaims any role of being a lender.

The payment made on the homeowner’s behalf was an incentive payment designed to procure the signature of the homeowner on a note and mortgage (or deed of trust).

Legally since there was no lending intent by either the named “lender” or the Money Source, there is either no contract at all or no loan, since there was no meeting of the minds.

If the transaction is not rescinded the deal needs to be reformed with a court determining what incentive payment the homeowner should have received from the scheme to issue, sell and trade unregulated securities.

But if the homeowner tacitly or expressly asserts or agrees or admits it was a loan, then for all purposes in court, it will be treated as a loan not subject to reformation.

2. PURCHASE OF NEW HOME FROM PRIOR HOMEOWNER: generally speaking most of these transactions do not result in the payment of money to any prior lender. But the excess due to the seller is paid in the same way that money is paid where the homeowner purchases a home from a developer.

Most of such transactions are steered to originators and aggregators who represent the money source (investment bank) who was involved in the financial transaction with the prior homeowner.
Because the proceeds of the “new financing” or “purchase money mortgage” would be paid to the same investment bank, no money exchanges hands with respect to the “pay off” of the prior note and mortgage.

The confusing point for most lawyers and homeowners is that there is nothing illegal about a bank holding a prior mortgage lien. There is nothing illegal about the same bank doing business with the next owner. And there is nothing illegal about the bank not issuing a check to itself when the owners change.

But that is not what is happening. “The bank” does not exist. The money source (investment bank) is not carrying the homeowner’s promise to pay scheduled payments as an asset and therefore is not “the bank.”

For legal purposes, the test is simply whether or not the investment bank has suffered a loss as a result of the refusal or failure of the homeowner to make a scheduled payment. Or, phrased differently, the question from the beginning is whether or not the investment bank has the source of money ever excepted any risk of loss arising from the value of a loan account receivable.

The answer to both questions is in the negative. In dozens of cases across the country, lawyers have been asked to identify the creditor and have admitted that they cannot do so.

The only logical conclusion is that the transaction was never intended to be a loan (with the exception of the homeowner who did intend to get a loan, but did not receive it).

The investment banks wanted the homeowner to believe they were getting a loan instead of an incentive payment to execute a promise to make scheduled payments. They did not want the homeowner to know that they were receiving an incentive payment. Disclosure of that fact is an absolute requirement under the law. If they had disclosed the true nature of the transaction, they would have been subject to bargaining and competition.

3. PURCHASE OF NEW HOME FROM FORECLOSURE BUYER: generally speaking, relative to any current financing arrangement, no money exchanges hands on these deals because and substance, the foreclosure buyer generally is receiving some sort of protection or indemnification from a title company that has been to issue insurance on a transaction that cannot pass the test of marketability or clear title — mostly because of the above factors. The anecdotal evidence on thousands of cases reviewed by me strongly indicates that nearly every foreclosure buyer is in substance a placeholder or nominee for the investment bank. By flipping the paper title, the foreclosure buyer receives a “profit” that is in substance a fee for legitimizing the foreclosure. That profit or fee is funded by the investment bank.

4. REFINANCING: generally speaking, all transactions that carry the label of “refinancing” are false transactions. Because securitization does not involve the purchase and sale of any underlying obligation, legal debt, note, or mortgage, each such transaction represents a new opportunity to create a new securitization infrastructure using the same transaction. Investment banks use every means of their disposal to encourage “refinancing” since it is the source of most of their new sales of certificates. The only money paid out is the excess, after fees, over the amount previously declared as “principal.” But this “principal” is not carried on the accounting ledger of any company or any person as an asset, nor is there any reserve for bad debt (simply because there is no risk of loss).

Forbearance is a form of “refinancing” because it accomplishes a number of things for the investment bank. First, obtain a signature from the homeowner that ratified or admits that the previous paperwork and financial transactions were all valid. Second, it essentially removes the placeholder originator from the paper trail. Third, it installs a new placeholder name and obtains consent from the homeowner. Fourth, it establishes a company claimed to be the servicer as the legitimate recipient of funds or proceeds from homeowner payments or the sale or foreclosure of the collateral (i.e., the home).

Modification is the same as forbearance: It introduces new parties under coercion. Homeowners sign these documents with total strangers mostly out of sheer panic. What they’re doing is waiving rights and creating tracks in the sand that are opposite to their financial interest and well-being.
Given all of that, many people ask me why I have consented or approved of a homeowner entering into a new agreement with players who are conducting an illegal scheme. The answer is simple and the investment bankers know the answer: they have the money to make a homeowner’s life miserable and they are not subjected to vigorous enforcement by regulators and law enforcement.

The entire burden of resisting this massive scheme of “Financial weapons of mass destruction” Falls on each homeowner, one at a time. It takes considerable time, money, and resources to resist.
So when the opportunity comes to settle the matter on favorable terms that reduce the payment, interest rate, and principal, and the homeowner lacks the will or the resources to resist, the only choice left is to settle with the perpetrators who put them in a bad position and who are cheating each homeowner out of their rightful share of the securitizations scheme.

 

 

     
 

Foreclosure Daily News Update ⋅ December 2, 2021

 
     
 

Out of ‘triage mode’: Timeline updated for foreclosure of uptown Charlotte Epicentre – WBTV

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Epicentre businesses in limbo pending foreclosure – Spectrum News

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A foreclosure could be on the horizon, putting many businesses like Epic Times in jeopardy. James Mack opened Epic Times in Epicentre six years …

     
 
 

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A Florida appeals court has kicked a judge off a foreclosure case and barred her from considering an order to show cause that alleges perjury by …

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Once the bustling hub of Charlotte’s nightlife, the Epicentre is heading for foreclosure – WFAE

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Once the hub of nightlife in uptown, Charlotte’s Epicentre is going into foreclosure. That’s according to a court overseeing the receivership of …

     
 
 

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Local ministry may face foreclosure, prepares to appeal to State Tax Tribunal – Hillsdale Collegian

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A local Christian organization could face foreclosure at the end of March 2022 due to taxes accrued in 2019.

     
 
 

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A foreclosure can hurt your credit, and it can take several years to recover. You may also have a hard time getting another mortgage for a period.

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Does It Make Sense to Sell Your House If You Owe More Than It’s Worth? – RISMedia

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Pornhub, Youporn and more face foreclosure – economy – UK Parents Lounge

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‘Stop Tax & Take’ campaign, launched by Milwaukee pastors, demands moratorium on … – WUWM

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… area churches are demanding an immediate moratorium on what they say are unfair efforts by the city to tax them under threat of foreclosure.

     
 
 

If a SiliconSage property in San Jose’s Alum Rock forecloses, investors could lose millions …

The Business Journals

One of SiliconSage’s properties in San Jose could be foreclosed and … his wife should get any surplus money made after foreclosure proceedings.

     
 
 

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“For servicing businesses to survive the shutdown of the foreclosure … now—a factor which will help prevent a flood of foreclosures and then …

     
 
 

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Long story short, in six years, I was broke and the Lincoln town cars filled with pin stripe suits were there to begin the foreclosure process.

     
 
 

Rev. Jesse Jackson stops in Milwaukee to fight against church taxes – Spectrum News

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“The reason why I’m here is because not only did they tax my church, but they also foreclosed on the church during the pandemic.”.

     
 
 

Ulster County negotiates $12M sale of former IBM site Tech City to National Resources

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The county and Ginsberg have been engaged in foreclosure proceedings for roughly two years. The $12 million total in taxes owed was in addition to …

     
 
 

CJ-21-1671/CS REAL ESTATE | Legal Notices | tulsaworld.com

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Google adds five Stadia Pro games for December 2021 – 9to5Google

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Community Ventures receives $400,000 award from NeighborWorks – Lane Report

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… lead to mortgage default, foreclosure, eviction and homelessness. … conversations will be had about the implications of foreclosure and the …

     
 
 

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Williams County Courthouse | Local News

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Clark County Common Pleas Court cases – Springfield News-Sun

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21CV0352: MidFirst Bank v. Ryan D. Burleson, Capital One Bank, Clark County Treasurer, Jane Doe unknown spouse of Burleson (if any), foreclosure.

     
 
 

Moshe S Newhouse of Lakewood New Jersey based Moshe S Newhouse Real Estate, taps …

IT News Online

… DEP data, topo maps, zoning layers, ethnic data, income data, traffic data, foreclosure and recent sales across the United States.

     
 
 

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The future of uptown Charlotte and the Epicentre – WBTV

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Smith added the future is still bright for the district, despite the looming foreclosure. “It is too important an asset, with all of its parking, …

     
 
 

Rivian CEO on partnership with Amazon – CNN Video – News Nation USA

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The Picker: Lincoln Riley makes a painful departure | Tulsa World Contests | tulsaworld.com

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… didn’t they?), talking in hushed tones with words like “foreclosure,” “separation” and “divorce” sometimes reaching our young ears.

     
 
 

The Docket: Real estate lawsuit roundup for 12.2.21 – BusinessDen

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Mechanic’s lien foreclosure of $39,544.28, for property at 1330 West 38th Ave., Denver. Attorneys: Albert V. Evans. Filed: 11/12/2021. 21cv33625.

     
 
 

Des Moines metro nonprofits making the most of Giving Tuesday – YouTube

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Iredell | Legal Announcements | mooresvilletribune.com

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Firm Case No: 1247951 – 10238 AMENDED NOTICE OF FORECLOSURE SALE 18 SP 386 Under and by virtue of the power of sale contained in a certain Deed of …

Tax Foreclosure | Johnson County Kansas – Johnson County Kansas

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EpiCentre Update + Pilot Mountain Update + Robbery | Charlotte, NC Patch

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… identify man who attempted robbery with child at southwest Charlotte store (WBTV); Charlotte EpiCentre: What’s Still Open During Foreclosure?

     
 
 

PUBLIC NOTICES | Clarke County Democrat

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NOTICE OF SALE UNDER POWER FORECLOSURE NOTICE … of paying the indebtedness secured by said mortgage, as well as the expenses of foreclosure.

     
 
 

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… FERNANDO G. PADILLA LEZAMA are made party defendant(s) to this foreclosure action because you are one of the mortgagors and may be liable for …

     
 
 

DOA officials hope to set up pilot homeowners assistance program | Guam News | postguam.com

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… they are hoping to set up a pilot program to immediately help some homeowners at risk of foreclosure or utility disconnection.

     
 
 

Rev. Jesse Jackson joins fight against Milwaukee church tax

FOX6 News Milwaukee

… forces with other church groups to demand an immediate moratorium on Milwaukee’s demand for churches to pay taxes under threat of foreclosure.

     
 
 

Rocket Eviction Helps Distressed Landlords with Fast Eviction Services in Las Vegas, NV …

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Rocket Eviction offers buybacks, sales, and short sales to help overwhelmed owners get out of their properties or stop foreclosure proceedings.

     
 
  WEB  
 

St. Joseph & Grand Island Foreclosure (Paperback) | FoxTale Book Shoppe

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Full Title: St. Joseph & Grand Island Foreclosure Description: The Making of the Modern Law: Trials, 1600-1926 collection provides descriptions of …

     
 
 

St. Louis Public Radio on Twitter: “St. Louisans facing tax foreclosure would see relief via new fund …

twitter.com

St. Louisans facing tax foreclosure would see relief via new fund https://bit.ly/3G34kqM via. @STLonAir.

     
 
 

Cheap houses for sale in colbert or lawrence county alabama – Organife

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We provide nationwide foreclosure listings of pre foreclosures … Buy Cheap Foreclosed Homes for Sale in Colbert County, AL.

     
 
 

View Hendricks county details – SRIServices

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Foreclosure. Online. Hendricks County. 2924 East County Road 750 South, Clayton, Indiana, 46118. Clayton Indiana 46118. Cause #:.

     
 
 

In light of the news of Jamberry’s official foreclosure Color Street would like to extend a hand …

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Amazon.com: Nail Polish: Beauty & Personal Care. In light of the news of Jamberry’s official foreclosure Color Street would like to extend a hand and …

     
 
 

Foreclosure, Divorce, Estates, Behind on Taxes – real estate wanted… – Craigslist

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Foreclosure, Divorce, Estates, Behind on Taxes … At White Knight Real Estate Solutions we have 40+ years experience with complicated situations. Send …

     
 
 

15 Foreclosure Attorney Jobs in Concord NH Near Me | LawCrossing.com

Law Crossing

15 Foreclosure Attorney Jobs in Concord are now available on LawCrossing.com, America’s #1 Legal Job Site. Your legal job search ends here.

     
 

 

FRAUD STOPPERS Daily News Update ⋅ December 1, 2021

 

Quiet Title Foreclosure Lawsuit – FRAUD STOPPERS

Fraud Stoppers

… sale or eviction if pending; Lis Pendens – to cloud marketability of title; Exhibits & Instructions; FRAUD STOPPERS PMA Membership included.

     

 

Who Owns Your Mortgage Note?

Have you ever asked who owns your mortgage note? A better question to ask is, “If I paid off my mortgage loan tomorrow, would I get clear and equitable title to my real property?” If your mortgage loan contract was converted into a mortgage backed security and sold to an investment trust on Wall Street you might not!

If you are thinking of applying for a loan modification, or refinancing through the Home Affordable Refinance Program (HARP), Home Affordable Modification Program (HAMP), or other program(s) under the Making Home Affordable (MHA) initiative there are a few things to consider.

First, remember that the entity who claims to own your mortgage loan is not automatically the same entity that may be servicing your mortgage loan. A loan servicer is a debt collections company that sends you mortgage statements, takes your payments each month, and if you have an escrow account, pays your homeowner’s insurance and property tax bills. But who really owns your mortgage loan?

If you want to find out here are a few things you can do:

  • Ask the servicer. Your loan servicer is legally obligated to tell you the name, address, and telephone number of the owner of your loan as shown in their records. It’s a good idea to ask them in writing officially with a “Qualified Written Request” via certified mail while keeping a log of your communications. The name of your servicer should be on your mortgage statement, but you can also use the MERS link below.
  • Original lender. Your loan may have never been sold, and still kept as a “portfolio loan” with the original lender. That’s the way loans used to be done!
  • Fannie Mae. In reality, many loans are sold to FNMA aka “Fannie Mae”. See Fannie Mae loan lookup tool.
  • Freddie Mac. Similar story with Federal Home Loan Mortgage Corporation (FHLMC) aka “Freddie Mac”. See Freddie Mac loan lookup tool.
  • Mortgage Electronic Registration Systems, Inc. (MERS) is a big online registry designed to replace the costly process of publicly recording mortgage ownership at the local government level with a private electronic version that allows the swapping of mortgages with no friction at all. MERS tracks both the servicing rights and ownership of mortgage loans in the United States, although the accuracy has been called into question. See MERS ServiceID lookup tool. You can also call them at 888-679-6377 FREE.
  • Search the Securities and Exchange Commission (SEC) for the alleged trust that claims they are the owner of your mortgage loan: https://www.fraudstoppers.org/how-to-search-the-sec-for-a-securitized-trust
  • Register for a Free Mortgage Fraud Analysis and Securitization Search. Complete our Mortgage Fraud Analysis form and we will conduct a free securitization check to see if your mortgage loan contract was converted into a mortgage backed security and who really owns your note. If your loan was securitized than you may have legal standing to sue your lender, or current loan servicer, for mortgage fraud and quiet title. Find out more by completing our Mortgage Fraud Analysis form or call us at 773-877-3655 and we will help you get the facts and evidence you need to get the legal remedy you deserve.

Cases like the Glaski v. Bank of America and Jesinoski v. Countrywide Home Loans may have provided hope for homeowners who were victims of mortgage and foreclosure fraud. But they did not strike at the heart of the real problem behind the securitization of millions of mortgage loans.

The Glaski decision states that if some entity wants to collect on a debt they must first legally own that debt. Furthermore, if that entity is claiming ownership by way of an Assignment, it must prove that Assignment is legally valid.

The Jesinoski case addressed a borrower’s right to rescind, or cancel, their mortgage loan contract under the Truth in Lending Act (TILA) by only providing written notice to the lender, without filing suit. A loan is rescinded at the time the rescission letter is mailed. If the lender wants to refute or fight the rescission they must file an action to do so, and they have limited time to do so.

If your mortgage was securitized (the practice of pooling mortgages and selling their related cash flows to third party investors as securities) then it was part of a table funded transaction. In a table funded transaction the borrower named on the note is NOT in debt to the lender (“Pretender Lender”) because they signed the note in the capacity of an Accommodation Party, or co-signer for the purpose of incurring liability on the instrument without being a direct beneficiary of the value given for the instrument!

The broker, or originator, of the loan is pretending to loan money to the alleged “Borrower“, but in reality they trick the alleged “Borrower” into co-signing on a note that is pledged as collateral on a warehouse line of credit with the funding bank.

It is illegal for banks to loan credit, they can only loan money!

But if the Pretender Lender is not the entity putting up the funds, then there is no underlining indebtedness between the alleged “Borrower” and the originator who is named on the note. And if there is no underlining indebtedness between the parties named on the note, then the mortgage (or deed of trust) vaporizes into nothingness, and is legally unenforceable as a matter of law.

If your mortgage loan contract was part of a table funded transaction and converted into a mortgage backed security that was sold to an investment vehicle, or trust, on Wall Street, then you may have legal standing to rescind your mortgage loan contract, and sue your “Pretender Lender” for Special Damages equal to triple the original amount of your note, plus clear and equitable title to your home!

Fraud Stoppers is part of a National Private Members Association that provides back office litigation support to law firms, foreclosure defense advocacy groups, and pro se litigants nationwide. Our Private Members Association can help you sue your lender for mortgage fraud, with or without an attorney.

Then after our free mortgage fraud analysis is done, we can scheduled a free potential cause of action consultation to discuss your loan and lawsuit in detail and help you get started filing your state and federal lawsuit for the remedy that the law entitles you to, and that you deserve!

You can save 60% to 70% in legal fees when you get your lawsuit started yourself, Pro Se, (without an attorney), and then bring in a local attorney to help you at trial, where you need them the most! This way you can get the best of both worlds: Save money in legal fees, and get the professional help you need at the same time!

FRAUD STOPPERS Private Members Association (PMA) has a PROVEN WAY to help you save time and money, and increase your odds of success, suing the banks for mortgage and foreclosure fraud.

Our primary focus is helping you get clear and marketable title to your property by arguing that the actions of the banks have made the security provisions of the mortgage/deed of trust unenforceable as a matter of law.

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.

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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.

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