Due Process Abuses

The recent so-called "recovery" from the U.S. National Housing Crisis is exposing extensive and extraordinary due process abuses that, if allowed to continue, will eventually destroy the average person's constitutional protections of his or her property. Layer by layer, the cover up is exposing a level of corruption that will eventually cause the demise of the middle class in America.

We've all heard the expression:

"The fix is in."
The popular "Wiktionary" offers a meaning for the phase that one can not help but think was written with the mission of The Due Process Advocate in mind:

"A process (for example, a court case) has been rigged behind the scenes and its outcome will not reflect true justice."
Who would have ever imagined that U.S. Courts could become so openly corrupt as to blatantly sacrifice the due process rights of Americans for the sake of supporting private political agendas? Nevertheless, the National Housing Crisis precipitated the exposure of, perhaps, just how fast a corrupt, but profitable, political agenda can infiltrate the legal system. Only now are we learning just how much "the fix is in" with respect to the litigation of foreclosure and eviction actions all over the United States.

In fact, during the last few decades, the secondary mortgage market became a play-ground for "get-rich-quick" financial power-houses and big banks to make billions of dollars . This was accomplished through an elaborate and sophisticated scheme centered around the so-called "securitization" of mortgages which made wind-fall profits for the banks, but rendered homeowners defenseless against the inevitable devaluation of the homes and, for millions, the inevitable foreclosures that followed.

One has only to read The Official Government Edition of THE FINANCIAL CRISIS INQUIRY REPORT; FINAL REPORT OF THE NATIONAL COMMISSION ON THE CAUSES OF THE FINANCIAL AND ECONOMIC CRISIS IN THE UNITED STATES, submitted by The Financial Crisis Inquiry Commission pursuant to Public Law 111-21 in January of 2011. This report makes the following conclusions: (see CONCLUSIONS OF THE FINANCIAL CRISIS INQUIRY COMMISSION at Page XV of the 633 page report):

"We conclude this financial crisis was avoidable."

"We conclude widespread failures in financial regulation and supervision proved devastating to the stability of the nation's financial markets."

"We conclude dramatic failures of corporate governance and risk management at many systemically important financial institutions were a key cause of this crisis."

"We conclude a combination of excessive borrowing, risky investments, and lack of transparency put the financial system on a collision course with crisis."

"We conclude the government was ill prepared for the crisis, and its inconsistent response added to the uncertainty and panic in the financial markets."

"We conclude there was a systemic breakdown in accountability and ethics."

"We conclude collapsing mortgage-lending standards and the mortgage securitization pipeline lit and spread the flame of contagion and crisis."

"We conclude over-the-counter derivatives contributed significantly to this crisis."

"We conclude the failures of credit rating agencies were essential cogs in the wheel of financial destruction."

These conclusions are taken verbatim from the CONCLUSIONS OF THE FINANCIAL CRISIS INQUIRY COMMISSION at Page XV of the 633 page report. The entire report is available here:

http://www.foreclosurebyfraud.com/usr/pdf/201101.pdf
The bottom line is this: Courts all over the country are supporting the "cover-up" of the largest MLM-type Ponzi-scheme ever to hit planet earth; all at the cost and demise of millions of American homeowners. The devastating scheme was orchestrated by and through the securitization of large pools of mortgages. These pools of mortgages then produced the income streams (of mortgage principal and interest payments) that created insane wind-fall profits and fees as these mortgage pools were unmercifully leveraged., sliced and diced, and converted to financial derivatives of every conceivable kind and nature. How else does one account for, or explain, how 5 to 10 trillion dollars worth of mortgages were turned into hundreds of trillions of dollars worth of mortgage-backed derivative products?

Tragically, the average homeowner was nothing more than an unsuspecting "pawn" in the scheme; not having the vaguest idea what was really going on.

Worse yet, homeowners facing foreclosures were unmercifully "duped" into accepting responsibility for the whole mess; as they were systematically stripped of any right to recover their losses, claim recourse, and/or hold the real culprits (the financial power-houses and the government regulatory agencies that went along with the charade) responsible for the extraordinary harms they caused to homeowners caught in the middle.

This was accomplished by, literally, engineering an elaborate and sophisticated scheme to deprive homeowners of their due process rights to recover. When homeowners began to realize the ramifications and "personal financial demise" associated with having a mortgage that (solely because of the government's fiscal policies and intervention) was all of a sudden substantially more than the value of their home, it was too late. The "fix was in." The government adopted a plan to take total control of the housing market and that plan mandated that individual due-process rights of homeowners be sacrificed.

Here are the most obvious and glaring due process abuses, related to the national housing crisis, that have been employed by the big banks, legislated by the government, and supported by courts all over the country (Note: As you realize the gravity of these abuses in terms of their inherent violation of due process rights, you'll also see how the same basic tactics are employed and infiltrating other critical areas of consumerism in the United States.). Thousands of homeowners have fallen prey to the due process abuses committed under the guise of these three "legal" actions:

1. Mortgage Modification Offers

Homeowners (the mortgagors) are often led to believe that the only viable alternatives they have to avoid foreclosure are those alternatives offered by their current mortgage servicer - who they typically believe is duly authorized to foreclose. In many instances, however, mortgage companies and servicers did not actually have the requisite legal standing to foreclose a mortgage because their rights to do so were compromised as a given loan transaction traveled through the secondary market; often without the proper legal requirements and documentation. In other instances, homeowners believed they were being offered an actual "mortgage modification" when, in fact, they were being offered only a temporary "payment arrangement" to buy time. Homeowners don't always realize that their "mortgage company" (i.e. the party collecting payments and alleging to be a duly authorized representative of the mortgagee or mortgage servicer) is an adversary once a mortgage loan is in default - seeking primarily to protect its own interests, not the homeowner's interests. In fact, many so called "loan modification" programs are designed to get payments from borrowers under the disingenuous guise of offering a long-term solution when, in fact, absolutely nothing is being guaranteed except that (a) someone will get payments for some type of forbearance, and (b) in the process of "applying" for the modification, the homeowner re-affirms and/or confirms the alleged debt with substantial costs added to the mortgage loan. As part of the process, homeowners also provide updated financial information that can be used to the homeowner's detriment or disadvantage. The result is that many "modifications" were offered as costly "band aids" that were designed to have the homeowner, in essence, waive his or her due process rights under the guise of offering help. This is why each and every mortgage modification offer began with the requirement that the homeowner write a "hardship letter" which confirmed, in writing, that (a) the homeowner was, in fact, in default, and (b) the default was due to the homeowners problems and circumstances - and not the banks predatory and/or illegal actions in the secondary market.

2. Non-Judicial Foreclosures

If a homeowner's property is located in a non-judicial foreclosure state, the mortgage holder (mortgagee) does not have to go to court in order to foreclose the mortgage. In essence, this means that the foreclosure can proceed more quickly and, obviously, with no court supervision. This has opened the door for a host of frauds as many such non-judicial foreclosures were, and are, orchestrated by foreclosure mills who use non-judicial foreclosure to conduct foreclosure auction sales under circumstances where the alleged a legal foreclosure could never prevail in a court proceeding due to any and/or all of the following circumstances and reasons; all of which are designed to suppress or eliminate the homeowners rights to due process:

Conflicts of Interest
Illegal foreclosures are taking place in epidemic proportions all over the country through the operation of "foreclosure mills." For the purposes here, a foreclosure mill is defined as an organized effort by a mortgagee and/or its legal representatives to circumvent applicable foreclosure laws through the orchestration of a sophisticated maze of unfair, deceptive, and illegal acts and conduct being perpetrated on innocent mortgagors to generate wind-fall profits. The key ingredient and characteristic in the successful operation of a foreclosure mill is the presence of the unconscionable conflicts of interest which serve to violate any sense of public trust and responsibility that attorneys are supposed to exemplify as "officers of the Court." To the contrary, attorneys from the same firm that is operating as a foreclosure mill often do ALL of the following in a foreclosure proceeding: (a) represent the servicer and/or lender, (b) represent the party that assigned the subject mortgage loan to the servicer and/or lender, (c) represent the party named as the mortgagee or "seller" at the foreclosure sale, and (d) represent the "buyer" at the foreclosure sale; often a government-sponsored enterprise such as Fannie Mae, Freddie Mac, or HUD. The result of this obvious collusion and conflict of interest is that it creates an unmercifully "stacked deck" which is all but impossible for a homeowner to defend against without really deep pockets. However, these conflicts of interest are in violation of any reasonable interpretation of the state and federal laws prohibiting unfair and deceptive business practices - if not constituting outright racketeering!

Securitization Defects and Issues
This aspect of the foreclosure process is especially complex, but is finally becoming the subject of many legal inquiries. In a nutshell, the financial gurus on Wall Street have converted large pools of mortgages (thousands and thousands of them) into "securities" in order to enable investors from around the globe to invest in fractional interests of these mortgage pools; often held in large trusts. In that process, these mortgage loans were often "sliced and diced" in a fashion and method which often resulted in unaccountability, or even loss, of the original mortgage documents; perhaps because so much of the process was conducted through electronic means. The bottom line is that the advocates of the Wall Street derivative financing schemes (with the intent to make, literally, billions off these collateralized debt obligations) want to conveniently "excuse" the fact that, for example, your original mortgage note can't be located, was not properly assigned, was not properly transferred, and/or was not properly endorsed; despite that these circumstances could render a foreclosure based on these deficiencies to be invalid.

In many cases, mortgages were allegedly assigned to Real Estate Mortgage Investment Conduit (REMIC) trusts long after the closing and cut-off dates of the respective trusts had passed. These types of defects are often rationalized by foreclosing attorneys as being unimportant; and these attorneys concentrate on putting the borrower on defense by pushing a foreclosure forward. Borrowers should demand, therefore, that the original mortgage note (or an exact copy), together with all its applicable assignments and/or endorsements as of the time of commencement of any foreclosure proceeding, be produced for the purposes of debt validation and the proof of legal standing. Many law firms that are hired to foreclose these "toxic assets" are specialists in covering up the legal deficiencies created in the "wind-fall-profits-driven" securitization process on Wall Street.

Forgeries & Fake Documents
Forging documents is a process of changing, altering, creating, or imitating documents with the intent to deceive the party or parties relying on the authenticity of those documents (usually to create a false sense of authority and many times produce a monetary gain). Unfortunately, forged and faked documents can play a major role in an illegal foreclosure if the forgery isn't challenged or discovered. One notable area where forgeries take place is in the "after-the-fact" production of documents that are necessary to prove the chain of title of the holders in due course pursuant to substantiating the legal standing to foreclose. Therefore, you should take a close look at any documents that were seemingly not available or recorded on or about the time they were allegedly executed and are, at a much later date (sometimes years later) being brought to the table to substantiate legal standing to foreclose (such as mortgage assignments and allonges to mortgage notes).

Verbal Misrepresentation Tactics
Mortgage servicers are notorious for making statements and promises that are NEVER reduced to writing. In fact, the correspondence that a homeowner receives in the mail often refutes what the homeowner has been told on the phone (especially when trying to get the homeowner to send money, send documents, and/or provide more information). The classic example is the homeowner that sends modification documents and information (i.e. a hardship letter, financial documents, etc.) only to be told "it wasn't received" or "it wasn't complete" and/or it "hasn't been processed." Meanwhile, the foreclosure gun remains pointed at the homeowner's head and precious time is ticking away as the homeowner makes more payments to avoid foreclosure. While the servicer tells the homeowner to contact the lender's attorney to stop the foreclosure, the lender's attorney tells the borrower to contact the lender or servicer. This "runaround routine" is standard operating practice in the foreclosure arena. However, it is also an unfair and deceptive trade practice (though hard to prove).

Forbearance Frauds
During the early stages of a foreclosure proceeding, borrowers are often encouraged to contact their "lender" in order to prevent a pending foreclosure. In many instances, these homeowners are led to believe that they can obtain a lower payment and/or reduction in principal as a permanent modification of their mortgage loan. In MOST cases, however, these disingenuous offers are designed by mortgage services to (a) extract money out of the borrower under false pretenses, while (b) getting updated financial information from the borrower, and (c) deceptively getting the borrower's confirmation that certain amounts are owed and the lender has legal standing to foreclose. In essence, more often than not, forbearance arrangements are merely temporary payment plans which are misrepresented as alternatives to foreclosure when, in fact, there is no reasonable likelihood or intent on the part of the servicer or lender to stop a pending foreclosure.

Lack of Legal Standing
This is, perhaps, the most difficult area for a typical homeowner to "wrap his or her mind around." Very often, foreclosure notices are received from attorneys representing entities the homeowner has never even heard of (or conducted any business with). This is because a mortgage and mortgage note can be assigned (or transferred to a new "holder in due course") one or more times as it travels through the secondary market. Even more confusing is the fact that mortgages were pooled and "securitized" so they could be sold to investors as securities all over the world. The significance is that this pooling and securitization of mortgages as collateralized debt obligations, often accomplished by assignments made by Mortgage Electronic Registration Systems, Inc. (MERS) as a nominee for the holders of these mortgages and notes, has created a debacle. Courts all over the country are trying to agree about whether the mass-assignment of mortgage interests by MERS (often separate from the mortgage note) has compromised the legal ability to foreclose the mortgages. The bottom line is that the party foreclosing a mortgage has to prove that it is the valid holder in due course of both the mortgage and underlying mortgage note it seeks to foreclose. That is often easier said than done.

Lack of Debt Validation
The foreclosing party has an obligation to substantiate and account for the alleged amount that is owed and in default. Often borrowers do not challenge the amount owed because they know they are "in debt." However, being in debt , in and of itself, isn't a sufficient reason for being foreclosed on. You have a right to an exact accounting. The foreclosing party, especially in this age of sophisticated accounting software, should immediately be able to generate a complete accounting of all the receipts, credits, debits, charges, disbursements, and running balances with respect to the given mortgage loan account since its inception. Additionally, a borrower has the right to examine the original document which evidences the debt (with all the applicable and requisite assignments and/or endorsements which appear on, or are affixed to the mortgage note as an allonge) which substantiate that the party foreclosing is, in fact, the holder of the note and has legal standing.

Notice Deficiencies
Foreclosures may be conducted only in accordance with strict rules and guidelines as established by state and federal laws. One of the first of such requirements is the strict conformance with the procedural notices required by law. Therefore, it is important to make sure the party foreclosing has met all of the notice requirements as specified in the applicable foreclosure laws in your state. Any material notice deficiency (in content, timing, or other material aspect) can invalidate a foreclosure proceeding.

3. Post-foreclosure Evictions and Personal Property Seizures

It is well-established at law that a foreclosed homeowner is entitled to the same due process rights as any other legal resident or citizen of the United States. However, any objective analysis of the many recent Court Proceedings (especially in New Hampshire that) involve title and possessory actions against foreclosed homeowners tells a much different story.

While a homeowner may have lost his real property (i.e. his real estate) through a foreclosure proceeding, that foreclosure does not give the foreclosing "bank" (or a "foreclosure mill") a right to seize the homeowner's personal property (i.e. the homeowner's personal belongings).

The reason why is very straightforward:

A "mortgage" is simply an agreement by the homeowner that, if the homeowner defaults on the repayment of the money he or she borrowed, the lender can "foreclose" the mortgage. Foreclosing the mortgage means the lender can sell the security (real estate collateral) for the loan at public auction in order to recoup the money that was loaned to the homeowner. The security that is sold at a foreclosure sale (again, in a vast majority of residential foreclosure sales) is only the "real" property (real estate) owned by the homeowner; and NOT the homeowner's personal property and belongings.

Alert to New Hampshire Homeowners: Nevertheless, (and very much unlike its neighboring states and a vast majority of other states in the country), in New Hampshire, a foreclosed homeowner's personal belongings are very much at risk of being "unconstitutionally-seized" by a "bank" (the term is commonly used by the "foreclosure mills" for just about any financial institution that forecloses as the "mortgagee" - even though the so-called "bank" might be Mortgage Electronic Registration Systems, Inc,, a Real Estate Mortgage Investment Conduit, a Government Sponsored Enterprise such as Fannie Mae or Freddie Mac, or an actual bank). It is a mystery as to why neither the New Hampshire law enforcement community nor the New Hampshire Courts have the courage to challenge the "financial powerhouses" (i.e. the nation's biggest banks that received "deferred prosecution" for their roles as exposed by the $25 billion national mortgage settlement) who are orchestrating such blatant and unconstitutional due process abuses in wanton disregard for the foreclosed homeowners' clear right to their own personal property.

The United States Constitution is clear and unambiguous about the protections of "life, liberty and property" that are guaranteed to the legal residents and citizens of the United States. These Constitutional protections mandate the universal, not arbitrary, application of due process throughout every court-house in the country.

Homeowners facing foreclosure are entitled to these Constitutional protections:

1. the right to be heard in defense of title and possessory actions taken against his or her real or personal property; and
   
   
2. the right to defend those ownership and possessory actions within a fair legal proceeding conducted in a competent manner.
   
   

Many of the actions and tactics discussed above are designed with the specific purpose of preventing a homeowner from exercising his or her due process rights.

While it is the housing crisis that precipitated the publication and distribution of The Due Process Advocate, it has become more than apparent that similar "anti-due-process campaigns" have become commonplace in a host of other areas of consumerism in the United States. Some of the more common areas where "the fix is in" mentality has replaced sound judicial practice include, especially, divorce proceedings, bankruptcy proceeding, and debt collection proceedings.

As more research is conducted and cases are reviewed, The Due Process Advocate will report its findings.