“You Must Secure The Collateral/Custodial Files & All Electronic Entries In The Lender’s’ Accounting, Financial, & General Ledger Systems & Document Custodian’s Tracking System”


This may be one of the most important papers I have written regarding mortgage foreclosures and the mortgage foreclosure crisis we face in America. Since 2007, our nation has been in the midst of the Great Recession and a fiscal crisis we have not endured since the Great Depression. In order for our nation to prosper and move out of this Great Recession, we must fix our housing, mortgage, and securities markets.

We must clean house, no pun, and take a top to bottom approach in this effort. To do this, we must rid our courts of the backlogs of foreclosure cases and bring homes and properties to the marketplace in as smooth a transition process as possible. To do this, we must reform many industry practices and educate judges and lawyers on how to accomplish this goal in a constitutionally protected manner.

No one and I mean no one should unjustly benefit and be enriched from this morass and the crimes committed. With this paper I am sure to take some shots from many of my advocate and foreclosure defense lawyer colleagues and friends who will not like some of what I write here. However, this is an equal opportunity and critical paper. No one deserves a free house. Any lawyers claiming they will get you a free house need to be reported to the their state bar association.

Servicers and corrupt foreclosure law firms should not get a free house either. They must prove up their rights and claims in a constitutionally protected fashion. Short of the death penalty and incarceration, the taking of a human being’s home or property should take be conducted with the utmost of care and caution in the judicial process. The automated and robotic foreclosure processes that have been engineered over the last two-decades must be reengineered to stop the frauds and abuses that have permeated our legal system.

Far too many major banks and servicers are getting a free pass to unjustly take away a borrower’s property and getting a free house in the process. The Florida Supreme Court recently acknowledged this issue in its decision1 in the Roman Pino v. the Bank of New York Mellon case. The Court, while ruling against the borrower, placed into context the issue when it stated “the context of the issue as presented in this case arises out of a widespread problem associated with fraudulent documentation filed by various financial institutions seeking to foreclose on real property throughout the state…”

Anyone blaming borrowers and homeowners for this crisis has not reviewed the facts and analyzed the situation correctly. The blame for this crisis lies squarely on the heels of the mortgage industry and its lawyers. These frauds were systemic and endemic, not isolated mistakes and errors. As you will see in this paper, the CEOs and boards of major banks and mortgage companies like Fannie Mae and Freddie Mac were fully aware of the frauds, but chose to turn a willful blind-eye to the abuse and its ultimate consequences.

Yet, despite the fraud and the abuse, there should be no free rides or free homes for the victims. Government, advocates, courts, and the industry need to address real issues with real solutions. The formulaic modification and short sale models should not continue to push square pegs through round holes. Each situation is uniquely different.

The industry must stop its automated processes and create more human interaction with borrowers. Solutions and resolutions must be created. I will strive to work on those in the near future and each person reading this paper must strive to do so as well, for our nation and our collective psyches.

While we need to speed the foreclosure process up, it must be done in a constitutionally protected process. I propose such a process in this paper starting with the foreclosure affiant and witness process.

As such, to protect our nation, taxpayers, borrowers, and investors each alleged lender must be required to prove their note ownership with their accounting and financial books and records, not fabricated and forged paperwork and dubious servicing records that only allege accounting for a borrower’s payments.

Due to the Sarbanes-Oxley Act that was created after the ENRON debacle, this should be a relatively simple process. Journal entries in the lender’s financial, accounting, and general ledger systems showing a borrower’s note as an asset and the asset being recognized and derecognized from the alleged lender’s books should be able to be produced with the push of a few keys and clicks of a mouse.

These accounting books and records, not servicing records, should be readily available and made part of each affidavit in support of summary judgment or provided to any borrower and their attorney, if requested, in non-judicial foreclosure states. They should a standard part of a note owner or their authorized servicer’s evidence in each foreclosure trial. If not, judgment cannot not be entered in that the servicing records may support the amount of payments missed, but it cannot support the actual “loss” and deficiency incurred, if any, to the foreclosing party or alleged note owner.

There are tens of billions of dollars in repurchases, substitutions, sales, servicing advances, lender paid mortgage insurance, guarantees, and other compensation and income streams in the pool of mortgage foreclosures that need to be identified and accounted for in each foreclosure action.

Issues such as who has really suffered a loss and what is the amount of that actual loss must be addressed in each proceeding? Is there really a holder in due course or can a borrower sue the current alleged lender for the torts of the originators and securitizers.

By now, the questions for judges and lawyers should not be whether frauds, bad, and unlawful acts were committed for we all know they were. The questions that should be posed to each court is how was the borrower damaged; who was responsible for the damages; who are or were the ultimate lenders that actually suffered any loss; how much is their actual loss; and how do we adjust the equities for the borrower and the true and rightful owner of the debt? Simply, who can a borrower sue and settle with?

In mortgage foreclosure reality, not legacy perception, there are a plethora of real parties in interest and indispensible parties that need to be before the Court in court contested non-judicial and judicial foreclosure cases. Many of the alleged claims in foreclosure brought forth in foreclosure court are in reality subrogation claims that need to be treated differently. Government Sponsored Enterprises (“GSEs”) such as Fannie Mae and Freddie Mac, pool mortgage, and lender paid mortgage insurers may all have to be part of the process.

When judges begin ordering the accounting and financial books and records of the alleged owner of a borrower’s note to be produced, not servicing records, at trail or attached to affidavits of indebtedness, you will begin to see a tidal wave of settlements, modifications, note sales, and new borrowing options presented to homeowners.

From options to buy the note at a discount or the value of the home; deeds in lieu with options to buy; and modifications to new notes, the mortgage market will begin to cleanse itself if judges mandate the simple production of the real lender’s accounting and financial records and the collateral file and entries in the document custodian’s tracking system. I promise that you will see a sudden abidance and adherence to rules of evidence and civil procedure.

The simple fact is this. If the industry once more ignores the warnings in this paper and does not fix their fatally flawed affiant and witness process, their next settlement may be far greater than their combined $35 billion settlement for robo-signing and foreclosure fraud. You see, robo-signing wasn’t the cancer I identified over a decade ago, only a genetic marker for a much greater cancer.

Full report below…




  1. Lydia Johnson says:

    we have friends that are losing there house with ocwen. and know of several more . why are they still allowed to do business in THE USA! they are from INDIA . I see that several states have banned them from doing business in there states! HOW STATE ARIZONA DOES NOT CARE, and what ever other states also. they should be BANNED IN THE USA ! there is no help for people !SAD

  2. greywolf62 says:

    Some valid points, but misses the mark. It’s not about whether or not anyone deserves a free house. This mess is about accountability. Homeowners are being held accountable and even penalized, but banks, lawyers, and judges are not. Homeowners have been harmed — lost homes, lost families, lost income, lost credit, lost community. The folks who deliberately and willfully caused the harm — the folks in positions of public trust — have been rewarded. Logic dictates that the homeowners need to be made whole (and $800 doesn’t cut it), while the perpetrators should be punished.

    So here is a better solution — They owe me six years of back salary, etc for their lies. They owe me all the missed birthdays, holidays, weddings, funerals. They owe me missed nights of sleep, and the loss of my professions.[I was paying my mortgage when they declared default. They sent me back the money after they declared default. 65-months later and we are still fighting because they refuse to admit they were wrong and insist on me admitting to a default that never occurred.]

    I want the people who helped create my nightmare in jail.
    Nikole Shelton (robo signer, probably in jail already),
    Judy Faber (robo signer)
    Adrian Barajas — Notary
    Mini Ali – false Broker Price Opinion claiming my 4,215 sqft home was only 2,096 sqft
    Yaron Shaham — Lawyer who committed perjury
    Adam Barasch — Lawyer who committed perjury and filed false documents
    Scott Hyman — Lawyer
    Greg Eisner – lawyer
    joseph Delmotte – lawyer
    Judge Catherine Baeur (Judge who is presiding over cases helping to perfect the fleecing of America)
    Judge Scott Steiner (Judge accused of quid pro quo sexual favors, presently hearing cases as though he deserves to sit in judgement of anyone)
    Joseph Lyons — GMAC Mortgage employee who submitted false declaration
    (more names as I draft the complaint)

    See how easy it is to name names? Now to file criminal complaints with:
    (1) Local Police Department
    (2) Local County Sheriff
    (3) District Attorney Real Estate Fraud Division
    (4) Attorney General Real Estate Fraud Division
    (5) Federal Bureau of Investigation Criminal Fraud Department
    (6) State Department of Real Estate
    (7) The State Bar
    (8) Judicial Commission

    One complaint with copies to everyone. No forgiveness. Just like they aren’t really forgiving anything from us, we must refuse to forgive any one of them. Put them all in jail.

    They are stealing everything you worked for. Take your stuff back and take away their freedom to prevent them from doing it to others. They only want forgiveness because we are poised to win.

    Our victory may result in total chaos, but it’s either total chaos or the enslavement of just 8 millions of us. I say if you are one of the eight million facing foreclosure, it really shouldn’t matter to you, now does it? Why are you fighting to protect the rights of people who don’t give a crap about your plight? They want you to give up because the truth is starting to make them uncomfortable.

  3. PJ says:

    Though each case may be slightly different, most are pretty black and white. A contract is entered into and the terms are either upheld or they’re not. The lender either abides by contract, real estate, consumer protection, and securities laws, or it does not; and the loan is either paid timely or its not.

    Instead of burdening the court system with millions of foreclosure cases, why not create ATMs for justice?  They could be called AJMs.  Feed all real estate, UCC and consumer protection laws into a computer program (not court decisions–I’m not fond of judges writing laws), making sure that all laws comport themselves with the US Constitution. 

    Require that anyone who wants to challenge a foreclosure get a forensic audit of their loan and its path, mindful that this would not be necessary if transparency were available, as it was when proper records were recorded in the county where the property is located.

    Feed the particulars into the computer program. Let the program decide whether the title is clouded, whether securitization and/or bifurcation have taken place, whether proper and timely assignments have been attested to and recorded, whether the consumer protection and contract laws have been followed, whether the loan has been paid (sometimes many times over), the bank or servicer instituting the foreclosure action has standing to do so. Let the program decide on damages relative to the extent of the bankers’ malfeasance. Currently, the law allows for a “free” home, plus treble damages, plus attorney fees and costs.

    Such an impartial computer program would take pressure off those overworked, and dare I say compromised, judges.

    It would be technology put to its highest use.This sort of computer application would also work well with discovering fraud in foreclosure actions that have already taken place.

    Further, another like application could be written for Title 26, subsection A, income tax, considering that the liability for income tax is rather limited to say the least.  

    Of course, these computer programs would be moot if money, or actually, federal reserve notes (notes are debt instruments) were simply eradicated, which is probably the best idea of all. Eliminating federal reserve notes entirely would certainly pull the rug out from under those who have been in control.

    For more on that, see

  4. Sue Em says:

    Too big to fail is also to big to clean up their mess. Even if they wanted to, they could not handle the amount of loans they knowingly messed up and pushed through their system. It would cost too much. My servicer has my mortgage, note (endorsed in blank) and security interest but didn’t know about it. We sued in court and they didn’t know about it. We won and they didn’t know about it. We had to give them the names and contact information of their attorneys cause they didn’t know them.
    To big to know…

  5. Defrauded homeowners in the underwriting and appraisal (where the bank employees committed MORTGAGE FRAUD) deserve a FREE HO– USE far more than THE BAG-MAN SUCCESSOR BANK/SERVICER deserves a free house…

  6. Bill Finnegan says:

    This is without a doubt a great article with great understanding of the obvious problems of fraudulent foreclosure in cause and effect. However, I must agree with Deborahbreuner that the revelation of truth within the relationship between the people and the government is the issue that must be addressed. Do they serve themselves or the people? I am greatly saddened by Deborah’s plight which is no different with all of us who have suffered the emotional and financial rape by the “legal?” system but her numbers are certainly far greater. I applaud her survival and outlook in this matter as well. As she stated truth is far more simple either we have the laws and abide by them or not. Has the arrogant appearance of the governmental system boldly shown it’s true colors and we have suddenly awakened and found out that it is all “Chicago Politics”, “Business as usual” , “Made Man” and “connected or not connected”. To silence the naysayers, this statement has nothing to do with the Obama Administration which is nothing more than the harvest of actions taken from 1913 on with THE FED, IRS, SOCIAL SECURITY ACT, GOLD CONFISCATION ETC. The simple solution and I believe the most effective is all homeowners start a moratorium and withhold their payments until the system is forced to correct itself. You don’t feed the cancer you cut off the supply line which is the money. There is nothing hidden that will not be revealed. The TRUTH will always come forth as long as there are people that are not willing to compromise it for peace – we all know that kind of peace is always short lived. The culling process is not a new issue in mankind but we must remember it requires mankind to become economic slaves first, then let the culling begin! FYI, I am just another insignificant poor Irish kid from Chicago trying to survive.

  7. BOBBI SWANN says:

    For once, I am going to disagree with Lavelle’s writings. Me personally I think he has missed the boat somewhere between 2207 & 2013. It’s about abiding by the terms of a contract. Let’s say, for example, that you put an offer to purchase a home and within that offer you place an earnest money deposit. This is done as part of the ‘contract’ and a gesture to the seller that you have ‘intent’ to purchase that home. You have complied with all the terms and contingencies of that contract but at some point you realize that you would rather have the house down the street. When or if you cancel that contract or fail to close the transaction as ‘promised’ in the purchase contract you will lose those monies placed on behalf of the seller and more than likely you could be sued for non-performance in a legally binding contract. The same applies here. When the lenders ‘broke’ the contract they are not entitled to any renumeration. Period. That part is covered under the UCC laws and other state & federal specific laws. A FREE HO– USE, you say? Well, if the lender doesn’t play by the rules and just like everyone else who is bound under terms of contracts, you lose. That loss is another person’s gain. So if the borrower wins his case in court and receives a debt-free home, so be it! It’s called the price for doing business. To heck with all this mumbo jumbo about borrowers only wanting free homes. Quite contrare, Lavelle, they only want justice. If the justice prevails and cancels the mortgage contract because lender was negligent or broke the contract, then Praise The Lord for the law has won! Just WHERE is that 7.6 billion in wealth that has been stolen? Tell us where it went Lavelle!

  8. lwalker1230 says:

    i have just read, and reread this article, and I am in court trying to find out who is the true note owner, only thing is they will not tell us. so i am waiting to see if the case can get to the trial stage and see if the federal judge will make them provide all of the information in this report. wed have spent over $80,000 and 6+ years and still do not know who is the true note owner, and or any financial statement from anyone other than a computer print out for a firm located in a country other than the USA.

  9. Sharon Duncan says:

    This is excellent! A must read!

  10. Lee Perry says:

    I just uploaded my motion to compel Fannie Mae for common business documents regarding the transfer of my loan. The court ordered discovery ‘facilitation’ to get a recommendation. The ‘Facilitator’ recommended I drop my motion and forever waive my ability to re-ask the questions or object to the answers given. see .

  11. MIBA says:

    I read in the Bible if a thief gets caught, he/she must pay back 7 times the amount in which he stole; therefore, a lot of banks and servicers will be giving homes back debt free or lining the pockets of the homeowners with 7 times the value these banks, servicers, and law firms say is owed by the homeowners. Nothing like making a wronged person whole again.

  12. Apple says:


  13. project_wolverine says:

    Follow the money and you will find the fraud. Force the TBTF banks to show proof of loss and own up to it in court and come to an agreement of settlement. I like it! TBTF has given us no choice we can not trust them to do the right thing any longer. I do have one question you say new borrowing options presented to homeowners! can we trust these criminals to play fair and negotiate new terms of mortgage and if not will we be able to re-mortgage with another bank after they destroyed our credit? I dont think homeowners are looking for a free house but you can only stay underwater for so long before you drown. If we could only create a new market for the value of our underwater homes (the mortgage market will begin to cleanse itself).

  14. I’m sorry but though you have written a nice article, based on a lot of complicated mortgage facts, the truth is far more simple; there are federal laws which aren’t being upheld in this country and why should the public be spending more of their hard earned money to have to defend their homes against purposely ignored laws? I lost four properties to illegal foreclosures and had a financial institution embezzle 80M$s out of my trust account. I believe the four unlawful foreclosures were the retaliation to me for reporting the 80M$ embezzlement, to the proper authorities, which has sent me straight into the streets to live in shelters where there are many more victims to this, now silenced with no computers, cell phones or cars. All these federal crimes are being committed on purpose, while the government authorities watch; the attorneys and judges withhold evidence and the media, who knows the truth, refuses to report it! So your article merely delays what the truth is. Our USA Government sanctions these federal crimes on purpose. What is the goal? To kill off the public; thin out the population? Why? Is it greed? Could our leaders actually want more than what they have already taken from the public?

    • Thomas says:

      You are right Deborahbreuner. I am sorry for your loss. For four years I have been fighting and reading these blogs. These crimes have drawn the attention of scholars, economists, experts, historians, attorneys, etc. Their conclusions, analysis, recommendations, etc. are at times very insightful and interesting (reading). But, your simple truth is basically not seen or heard over these intillectuals. PEOPLE are hurting, homeless and in despair. They all think we want a free home. I hear you!

    • Randy Styer says:

      Deborah- I have read on Christopher Story’s International Currency Review that the securitization process used in the banking industry is illegal according to Federal Laws but that specific law was never stated. You referenced the same thing and the fact that the government is sanctioning these federal crimes. I have just sued the banks and everyone involved on my foreclosure and I would appreciate your help if you know of the specific laws making the securitization process illegal. I am researching this area thoroughly and find I am having to educate these attorneys I come across. Haven’t come across one worth their salt so far. Hope you have gotten back on your feet by now. Thanks for your input. Randy

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