The Elephant in the Living Room — “No Action Arises From Deceit”

/ / Published in Absolute Data

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The Elephant in the Living Room — “No Action Arises From Deceit”

 by Neil Garfield, published on Living Lies, on November 29, 2017
BZ: I have included some comments extracted by a friend of mine well versed in the Elephant in the living room and dealing with it, so to speak… They illuminate some dots for you.

Some comments as extracted –

Neil is mostly on point again. [Neil Garfield is an attorney who has enough fortitude, scruples, and conscience to speak the truth (very rare, especially among attorneys) about the enormous fraud which has been being perpetrated against the American people, from at least 1913 and the so-called Federal Reserve Act]

 

“I think that it is time to talk about the elephant in the living room — that foreclosures are not so much about law — which  favors homeowners — than they are about politics, which favors the banks.” … 

 

“The biggest problem for people to wrap their heads around is that there was no loan, as it is defined by law. You can’t argue that point because it makes you sound nuts, but it is true. If we were to use hundreds of years of common law development, as it exists today, the money received by most homeowners was not the result of a loan contract.” …

 

“The fundamental error committed by the courts is that they are allowing benefits to flow to the banks from an illegal scheme. Ex dolo malo non oritur actio [“no action arises from deceit”]. “from a dishonorable cause an action does not arise”) is a legal doctrine which states that a plaintiff will be unable to pursue legal remedy if it arises in connection with his own illegal act.[1] Particularly relevant in the law of contract, tort and trusts,[2] ex turpi causa is also known as the “illegality defence”, since a defendant may plead that even though, for instance, he broke a contract, conducted himself negligently or broke an equitable duty, nevertheless a claimant by reason of his own illegality cannot sue.

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I think that it is time to talk about the elephant in the living room — that foreclosures are not so much about law — which  favors homeowners — than they are about politics, which favors the banks.
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If you look at litigation in the student loan marketplace, you will see that the same defenses that we use in foreclosure are getting traction because of the perception that students are different from homeowners.
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Student stereotype is young white up and coming professional who got a raw deal. The homeowner is a lower middle class person of color whose eyes were bigger than their wallet.
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This type of stereotyping produces incongruous results. And it is based upon the erroneous notion that there was a legal, valid loan at the base of all the paper. In almost all cases there was not. In almost all cases, if the disclosure had been proper, the investor and the homeowner would have known that the banks were creating “trading profits” to launder the money they stole from investors.
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In all cases neither the investor nor the homeowner would have opted in on the deal without the investor being compensated for  their investment or the homeowner being compensated for his/her signature and reputation.

The biggest problem for people to wrap their heads around is that there was no loan, as it is defined by law. You can’t argue that point because it makes you sound nuts, but it is true. If we were to use hundreds of years of common law development, as it exists today, the money received by most homeowners was not the result of a loan contract. In real life, investors were defrauded into thinking their money would be managed by a trust with a trustee that they knew very well. That never happened. SOME of the stolen money ended up on the “Closing table” where the homeowner thought he/she was getting a home loan.

The fundamental error committed by the courts is that they are allowing benefits to flow to the banks from an illegal scheme.

Ex dolo malo non oritur actio [“no action arises from deceit”].

“from a dishonorable cause an action does not arise”) is a legal doctrine which states that a plaintiff will be unable to pursue legal remedy if it arises in connection with his own illegal act.[1] Particularly relevant in the law of contract, tort and trusts,[2] ex turpi causa is also known as the “illegality defence”, since a defendant may plead that even though, for instance, he broke a contract, conducted himself negligently or broke an equitable duty, nevertheless a claimant by reason of his own illegality cannot sue.
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So the actual legal effect is as follows: the homeowner is credited with money that ultimately came from the investors but was paid by the banks who intercepted the money that was intended for a REMIC Trust. The banks, under ex dola malo non oritur actio, cannot receive the benefits of their illegal scheme.
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The investors contributed money and the homeowners contributed their personal reputation and signature without knowing they were being used for an illegal scheme. Neither one received disclosure or a share of the pornographic “profits” created by the illegal scheme.
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As for the current status, legally, the investors have an equitable unsecured claim against the homeowner that could be converted to a judgment lien. The mortgage and note are void and unenforceable both because they are defective in referring to a nonexistent loan and a nonexistent loan transaction and because they are part of a fraudulent scheme.
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BUT the politics of foreclosure is entirely different. As noted above, homeowners are seen not as victims but as the appropriate parties to bear the risk of untenable “loans.” Every branch of government had a choice when this thing broke in 2008. Either make the banks pay for it and provide direct relief for homeowners and investors (thus providing a stimulus to the economy), as they did in Iceland, or buckle under the threat that the entire financial system would collapse if the illegal behavior was not sanctified. In most countries the choice is obvious — let the homeowners burn.
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The problem with politics governing legal decisions (besides the fact that it should never happen) is that politics change. Thus it is the trial lawyers job to embarrass the judge, piece by piece, such that the judge feels pushed into a corner and that in this one case he/she will allow the homeowner to prevail.

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