Page Text: neilfgarfield@icloud.com
Early Life
Living in Jacksonville, Florida, Garfield comes from a long line of Garfield creators and innovators: His great-grandfather created the first fully automated pharmaceutical plant in the United States 100 years ago, which now stands as an exhibit in the Smithsonian Institution in Washington, D.C. His cousin, Brian Garfield, was a prolific and acclaimed author of fiction and movies (Death Wish, Hopscotch, Kolchak’s Gold) and nonfiction (Currently the “War in the Aleutian Islands” is a popular coffee table book). His family funded research in the 1950’s that resulted in the worldwide production of lanolin from cholesterol. The Garfield Foundation is a major contributor to wildlife refuge and environmental causes.
For over 14 years, Neil Garfield has been researching, writing and collecting information about homeowners in distress and teaching lawyers how to litigate foreclosure defense cases. After correctly predicting the housing crash right down to the last dotted “i” and crossed “t” he began writing his blog http://www.livinglies.wordpress.com . Starting with modest results, the blog took on a life of its own and has enjoyed over 16 million visits from readers like you.
His basic premise is that the foreclosure mess was created as a smoke screen for theft from investors and borrowers. His research, which ash prompted others to confirm it, reveals that the loan account was was written off as part of the securitization of data about the loan. His research reveals that the securitization schemes are being falsely represented as securitization of debt, notes or mortgages. He believes that securitization of debt is a legitimate method of risk diversification but that the investment banks in practice turned it into a PONZI scheme, the full scope of which is not yet fully understood by government, the legal community, the press or the public.
He was first alerted to the possibility that the investment banks were conducting a fraudulent enterprise when he learned of a study by Katherine Ann Porter at the University of Iowa in 2007 where it was first revealed that 40% of the closing documents, including the promissory notes from “borrowers” had been destroyed or “lost.” Knowing that this percentage was far too high to be dismissed as accidental, he quickly concluded that the destruction of notes and other closing documents was intentional. He eventually concluded that the only reason a sophisticated worldwide banking institution would destroy promissory notes (equivalent of cash) was that the notes were created, sold and traded under false pretenses. The banks successfully convinced most people that images from a computer were just as good as the original paper (despite laws to the contrary).
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It was better for the banks to be guilty of negligence than to have the evidence readily on hand that they had intentionally created and operated a fraudulent enterprise.”You would only shred a $10 bill if its continued existence would implicate you in civil or criminal liability. So you would shred it because you told someone it was a $100 bill and now they want to see it. “Better to be guilty of negligence than criminal or civil fraud.”
Examining thousands of closings in the context of his research, investigation, interviews and analysis, he found that there were two central problems to the claims of securitization in practice:
(1) the loans were switched at closing with the borrowers meaning that the documented loan signed by borrower under false pretenses referred to a transaction that never existed and the closing proceeded based upon a prior Assignment and Assumption agreement calling for violation of various State and Federal law and was therefore void as were the acts performed pursuant to the illegal agreement, and
(2) that the accounts were switched at closing with the lenders (investors) meaning that the money of investors was not placed in the REMIC trust that was shown to them and that the loans were never delivered or transferred to the Trust. The result was that investor money in many cases came indirectly from a dynamic dark pool to the closing table unknown to both the investors and the borrowers.
Third parties claimed the loan as their own. But the loan relationship or contract was actually created between the investors and the borrowers, for which there was no documentation other than wire transfer receipts in the money trail which had to be traced to their funding sources, since various intermediaries were used to conceal the true nature of the transaction. His conclusion is that in many cases neither the trust documents and related securitization instruments nor the note and mortgage are contractual documents that can be enforced and none of them should have been filed or recorded.
Agreeing with the allegations in the lawsuits of investors, insurers, guarantors, and other third party sources of funding, Garfield concludes that both the Pooling and Servicing Agreement and the the note and mortgage are void or unenforceable documents because the main premise of each was ignored as were the central terms. Hence, neither the investors nor the borrowers are subject to provisions, terms and restrictions contained in the Pooling and Servicing Agreement, promissory note or mortgage each of which is a nullity. The conduct of the intermediary parties created by the investment banks corroborates both the substance of Garfield’s conclusions and the intent to defraud — this fully explaining the need for forged, fabricated, robo-signed documents that were neither authorized nor true.
Garfield’s final conclusion is that only the intermediaries want foreclosures because they are cutting off the liability to refund multiple disguised sales of the same loan. The value of the loan is continually diminished by each step in the foreclosure process despite a majority of cases in which the preservation of the investors’ capital would be far better served by a workout between investors and borrowers, reserving their rights to bring claims against the intermediaries who essentially stole the identity and rights of both the investors and the borrowers. With the investment banks continuing to “settle” claims for misbehavior by payment of fines — using investor money — they continue to diminish the capacity of the investors to be paid in full and the corresponding rights of the borrowers to a lower balance that is due (thus making the workout, settlement or modification far easier than the the current system in which “servicers” use any means possible to lure people into default and then foreclose, this protecting and enriching the servicer while the investor and the borrower suffer).
His central thesis is that BOTH the investor/Lenders who advanced the cash and the homeowners who mistakenly believed they had encumbered their homes have a legal basis to take the driver’s seat. The deal was always between the investors and the homeowners. Instead, the banks diverted the money and paper where they claimed ownership of the bonds and loans, (and even claimed losses that were nonexistent) cheating the investors (government, insurers etc) out of money and security and stealing homes on the basis of loans that had already been paid and should be distributed to investors, this reducing or eliminating the original debt, which in all events is not truly secured.