Unveiling the Deceptive Nature of Loan Modifications: How FRAUD STOPPERS Can Help Homeowners Safeguard Their Rights

The article titled “Modifications Are Part of the Big Lie: Don’t send that application for modification if you don’t want to waive important rights” by Neil Garfield sheds light on the deceptive nature of loan modifications in the foreclosure process. The author highlights the risks and hidden consequences that homeowners may face when applying for loan modifications.

According to Garfield, filing an application for modification effectively waives important rights and exposes homeowners to undisclosed securities schemes. The application allows the unauthorized agent/servicer, such as New Rez aka PHH aka Ocwen, to act as if they have the authority to modify the loan, even though they lack such authority. It also transforms the original loan agreement into a new arrangement, making the unauthorized agent/servicer the virtual creditor while the homeowner relinquishes the right to contest their standing to administer, collect, and enforce the note and mortgage.

The article emphasizes that signing the modification application creates a legal presumption of validity for the document and all its contents, reinforcing the concealed nature of the underlying transaction in which the note and mortgage were executed and delivered. Additionally, it exposes homeowners to potential data privacy issues, as the application permits the servicer to sell and distribute personal and transaction data to third parties without adequate consent.

Garfield questions the intentions behind these modifications and points out the apparent flaws in the contractual relationships between the named plaintiff, agent/servicer, and the homeowner. The author cites a case where the judge found that the trust, trustee, and agent/servicer had no connection to the debt, note, or mortgage, further highlighting the questionable practices employed by these entities.

Amidst this context, the article introduces FRAUD STOPPERS as a potential resource to assist homeowners. It suggests that by conducting loan modification audits, FRAUD STOPPERS can help homeowners challenge the legitimacy of the underlying transactions, contest standing issues, and expose fraudulent practices. However, the specific details of how FRAUD STOPPERS’ loan modification audits can assist homeowners are not elaborated upon in the article.

In summary, Neil Garfield’s article warns homeowners about the potential risks and hidden consequences associated with loan modifications during the foreclosure process. It highlights the concealed nature of the transactions, the unauthorized authority of agent/servicers, and the waiver of important rights by homeowners. The article hints at the potential benefits of utilizing FRAUD STOPPERS and their loan modification audits to challenge these practices and protect homeowners’ rights.

Modifications Are Part of the Big Lie: Don’t send that application for modification if you don’t want to waive important rights.

by Neil Garfield

The application for modification licenses New Rez aka PHH aka Ocwen to sell, distribute the personal data and transaction data to third parties. Besides the obvious problems with data privacy, this confirms the apparent voluntary participation of the homeowner in a securities scheme that was and still is concealed from the homeowner.

By filing the application the homeowner is waiving his right to keep the compensation that was paid for the homeowner’s role in launching the securities scheme or to ask for more compensation. And it creates an assumption of risk by the homeowner that was, is, and always will be concealed from the homeowner. All of this is “illegal” but by signing the document the homeowner has launched a legal presumption that the document and everything on it is valid.

It reaffirms the concealed nature of the transaction in which the note and mortgage were executed and delivered. Instead of a loan agreement, the application alone establishes the authority of the New Rez aka PHH aka Ocwen to act as agent/servicer even though it has no such authority. It also makes New Rez aka PHH aka Ocwen the creditor, which means the homeowner is accepting a virtual creditor instead of a real one. And the homeowner is waiving any right to contest the standing of New Rez aka PHH aka Ocwen to administer, collect, and enforce the note and mortgage.

On behalf of a client, I recently received an “offer” for my client to apply for a modification. My response is going to be that we would be happy to apply for modification if New Rez aka PHH aka Ocwen can demonstrate (a) that the loan account receivable exists, (b) that U.S. Bank owns it on behalf of either a trust or certificate holders and (c) that New Rez aka PHH aka Ocwen can demonstrate that they have been authorized to act as agent/servicer for a creditor who owns the underlying obligation because (a) they paid for it and (b) they received a conveyance of ownership of the debt as part of a purchase transaction from someone who owned the loan account receivable.

Of course I know that they cannot do that. I know it because along with Patrick Giunta, Esq. in Fort Lauderdale all of that was established beyond any doubt. the Judge found that the trust, the trustee, and the agent/servicer (Ocwen) had no relationship to the debt, note, or mortgage but may have had possession of a note (now lost) that might have been an original. Final Judgment for the homeowner. In fact, at trial, the robowitness was dumbfounded when he realized that the fabricated “Power of Attorney” appointing Ocwen as servicer and as an “attorney in fact” had been not only false but incorrectly created with Chase being the grantor. Chase had nothing to do with this case.
But because they did not file the “original note” until after the lawsuit began — in 2008 — the judge felt compelled under Florida law to enter judgment for the homeowner with findings of fact that disposed of the merits of the case but dismissing the case without prejudice. that is because finding that there was not even the allegation of possession of the note before the filing of the lawsuit there was no jurisdiction. And no jurisdiction means the court is powerless to do anything but dismiss the case.

So the lawyers refiled the case even though there has been a complete negative adjudication of all facts necessary to prove a prima facie case for foreclosure. And they barely managed to squeak through a motion to dismiss because the defense of res judicata is an affirmative defense and so we will file our own motion for summary judgment.

The first interesting thing about all this is that the lawyers chose to file a case that they had already lost. Why? Well until two weeks ago, the law in that DIstrict was that there was no claim for attorney fees if the homeowner won because they established that the named claimant lacked legal standing — a fancy way of saying no case.

The recovery of attorney fees can only be based upon statute or contract. There is no statute that specifically grants the right to recover attorney fees when the named Plaintiff loses a foreclosure case. But there is the contractual provision in the note and mortgage for recovery of fees and Rule 57.105 Fla. R.C.P. that says that such provision is reciprocal.

BUT once the homeowner proves that the Plaintiff is NOT part of the contract, the law WAS that having proven that there was no contractual relationship between the Plaintiff and the homeowner, the homeowner was barred from taking advantage of the attorney’s fees provision in that contract.

All of that may seem to have some logic except for one thing: it was the Plaintiff who invoked the contract when they started the lawsuit asking for attorney fees and when they were shown to be lying, there are about a dozen reasons why they should not escape an award of attorney fees and costs. And that is what the Florida Supreme Court found. So now the attorneys have filed a new lawsuit that they thought had no risk if they lost; but they have a huge risk because the premise under which they were operating was not only wrong but downright malevolent. The playbook is designed to wear the homeowner down even if there is no case against the homeowner.

And so it is interesting that the unauthorized agent/servicer New Rez aka PHH aka Ocwen, constantly changing names to confuse the recipient, is now sending an “offer” to allow my client to apply for a modification. And just to be clear, that is no offer at all. They’re not saying they will consider it, grant it, or even that they are offering it on behalf of some named creditor. And that is why I scored points by filing three motions for sanctions against the opposing side which were granted. They showed up at “mediation” without any authorized person to settle the case. They were only authorized to offer to allow the homeowner to apply for a modification.

This particular offer was sent pursuant to a settlement agreement with the Florida Attorney General that requires them to modify loans. The AG office of course made the same mistake as all law enforcement and all regulators, to wit: that the agent/servicer was actually authorized to modify. In fact, the agreement can now be used to argue that they must have had the authority to modify — why else would that agreement require modification? THE AG was either hoodwinked or playing along. I don’t know.

But the main point of the modification is clear. It changes the falsely labeled loan agreement executed by the homeowner into something entirely different. Instead of a loan contract, the proposed application for modification changes the transaction forever. Perhaps the better description is that it reaffirms the concealed nature of the transaction in which the note and mortgage were executed and delivered.

Instead of a loan agreement, the application alone establishes the authority of the New Rez aka PHH aka Ocwen to act as agent/servicer even though it has no such authority. It also makes New Rez aka PHH aka Ocwen the creditor, which means the homeowner is accepting a virtual creditor instead of a real one. And the homeowner is waiving any right to contest the standing of New Rez aka PHH aka Ocwen to administer, collect, and enforce the note and mortgage.

So there you have it. That is the reason they sent it. It was designed to lure me into sending this to my client in order to establish a fact that doesn’t exist and a fact that has already been defeated — standing for either the named Plaintiff (U.S. Bank as trustee for SASCO, etc) or anyone else designated by New Rez aka PHH aka Ocwen. If they had been successful they might have a shot on the second lawsuit. And it now licenses New Rez aka PHH aka Ocwen to sell, distribute the personal data and transaction data to third parties. Besides the obvious problems with data privacy, this confirms the apparent voluntary participation of the homeowner in a securities scheme that was and still is concealed from the homeowner.

By filing the application the homeowner is waiving his right to keep the compensation that was paid for launching the securities scheme or ask for more. And it creates an assumption of risk by the homeowner that was, is, and always will be concealed from the homeowner. All of this is “illegal” but by signing the document the homeowner has launched a legal presumption that the document and everything on it is valid. And it makes the unauthorized agent/servicer the agent of the homeowner!

The accountholder(s) [label establishes homeowner as holder of an account that exists] consent [uninformed consent] to the disclosure by my servicer [affirms “servicer” as agent] or authorized third party,* [i.e, anyone and there is no referenced asterisk at the end of the document], or any investor/guarantor [note the introduction of new parties] of my mortgage loan(s) [affirming it is a mortgage loan], of any personal and non-personal information during the mortgage assistance process and of any information about any relief I receive, to any third party that deals with my first lien [affirming lien] or subordinate lien (if applicable) mortgage loan(s), including Fannie Mae, Freddie Mac or any investor, insurer, guarantor, or servicer of my mortgage loans(s) or any companies that provide support to them, for purposes permitted by law. Personal information may include, but is not limited to: (a) my name, address, telephone number; (b) my Social Security Number; (c) my credit score; (d) my income; and (e) my payment history [affirming paymetns were due] and information about account balances and activity and (f) my tax return and the information contained therein. I/We hereby authorize the servicer to release, furnish, and provide information related to my/our account to: [BLANK FOR ANYONE TO FILL IN LATER IF THEY NEED IT]

The Florida AG fell for this hook, line, and sinker. So have most homeowner and their lawyers. Take a closer look and ask yourself why they would have such wording if they were truly sure of their status as an agent for a lender, and why they wouldn’t announce guidelines for what the “modifications” would look like if “granted” and on whose behalf they are allegedly “modifying” the transaction falsely labeled as a loan. Every correspondence offering the hope of modification is a potential trap for homeowners who frankly, in my opinion, owe nothing. They were paid money equal to at most 8 1/2% of their revenue generated by these securities scheme, everyone received every payment to which they were entitled, and then they signed a note to give it back because they thought it was a loan.

But if it was a loan then there would have been an identifiable lender who had an entry on its accounting ledgers showing payment of value for the underlying debt. No such entity exists because the investment bankers were securities brokers and security brokers are interested in trading securities. They had no intention of assuming any risk of loss on nonperforming loans, so they made sure that the transaction looked like a loan but wasn’t. They had no interest in lending and they did not lend money. Investors loaned money to the brokerage firms. And nobody complied with lending statutes because there was no lender.