First Financial Educators and Karen Svihus

[Prof]

Judge, I will grant that there is an obligation. The question before the courts, both state and federal, is to whom is it due? Who are the holders in due course? The banks come in as interlopers waiving a note (or a forged note) and claiming right to collect under UCC section 3. If it was securitized into a trust, then the note, or collateral, is governed under the terms of the trust agreement. The note cannot be paid as a bearer instrument. UCC section 9 governs the securitized asset.

Could someone explain why the UCC applies, rather than common law on contracts?

Also, could someone explain why the house shouldn't be forfeited to the court, and let further legal proceedings determine who owns the note. It's clear that the "owner" has no claim to the property.

As to your secon question in the quoted posting above, "It just doesn't work that way."

The note represents the obligation of the debtor/homeowner to repay the debt. Only the holder (possession with endorsement) or transferee (sort of like an agent of the holder) can enforce collection of the debt, even where the debt is secured by a mortgage, deed of trust, or UCC security agreement perfected by a financing statement or otherwise.

If the note cannot be located, there is a provision for lost, stolen, destroyed instruments. However, frequently the person asserting rights in the note cannot show that it has received the note by endorsement or as bearer paper before it was lost by him, her, it.

In other words, without evidence of the debt, there is no reason to enforce the pledge of the collateral.

Finally, many states permit non-judicial foreclosure and there is no court to take possession of the collateral, anyway.

As to the JRB reply on mortgage insurance, VA guarantees were limited, as I recall, and Personal Mortgage Insturance required where the down-payment was less than 20% (?) was limited, but I cannot recall the details?

JRB???????????

[Judge Roy Bean]

I'll try to keep this as short as possible, but given the nature of some of the kinds of urban myths such as sfosmith's it deserves an explanation.

PMI was originally designed as a "credit enhancement" to improve the ratings of securities backed by mortgages with comparatively low down-payments.

There is "flow" insurance, which maintains payments to the Trust if and when a borrower is delinquent (and is the most commonly known version of PMI - covering about 13% of all loans); "bulk" which is purchased to cover existing pools (which might even be in addition to "flow" in some cases; "pool" which is a form of MI for securitized pools that aggregates the pricing for coverage of the entire pool. In all of those situations, there is a total limit of exposure to the insurer which may or may not exceed the guaranteed coverage on specific loans (flow). There is also "reinsurance," where a third party assumes some of the risk. And finally, banks may desire insurance for loans held on balance sheet in order to manage their own credit risk exposure in accordance with supervisory guidance or reduce the amount of regulatory capital that they must hold against high-LTV mortgages.

All of that is transparent to the borrower until foreclosure comes into the picture. Any number of factors will affect how much the insurer pays out - they're just like any other insurance adjuster - they will do whatever it takes to mitigate their losses.

The other thing the mythology of the loan being paid off fails to recognize is that PMI companies are regulated by the states - and until fairly recently state laws limited their individual risk exposure to no more than about 25% to 30% of the claimable amount. That has been expanded, I believe to as much as 40% in some states as long as third-party reinsurers are on the hook for the additional risk.

At foreclosure, the insurer really has two choices - pay the limited coverage liability and walk away, or they can pay 100% and take title to the property. I have yet to see a PMI company do that, although some years ago, two of them actually owned/controlled servicers and could have done it through them.

In some cases in the past the final insurance payout plus the sale value of the mortgage collateral was enough to make the lender whole, or even yield a profit for the lender and servicer. But in more recent cases there is a material loss, particularly where house values have not increased or as we've seen recently, fallen off the edge of reality.

FHA insured loans (not the kind of sub-prime loans that were so popular and temporarily massively profitable) are guaranteed at 100%. VA loans are capped at 25%.

[Omne]

Lets strip this down to the basics for your situation.

1 ) You applied for a mortgage in order to purchase a house.
2 ) You closed on a house and someone paid the owner of the house to transfer it to you.
3 ) You moved into the house and lived there while making payments to the mortgage servicer.
4 ) You started having financial problems and got behind on your mortgage.
5 ) You tried to find a way to get out of paying your mortgage so you sent $2800 to some scammers that promised to do that.
6 ) The basis for the scam is that there is some confusion as to the holder of the monetized securities so you claim you don't know who is owed the money.
7 ) You do know the identity of the servicer, the one you have been paying all along.
8 ) You are continuing to live in the house knowing that you have an obligation to pay.

Sorry, regardless of the questions on the securities you are still trying to get your house without paying the debt you voluntarily took out. If that wasn't true you would still be paying your servicer the normal amount while things got sorted out as to who holds what instead of spending $2800 to get out of it.

As long as you know where to send the payments and get a Satisfaction of Mortgage once you finish paying I fail to see why the rest is relevant to you.

[Prof]

Lets strip this down to the basics for your situation.

1 ) You applied for a mortgage in order to purchase a house.
2 ) You closed on a house and someone paid the owner of the house to transfer it to you.
3 ) You moved into the house and lived there while making payments to the mortgage servicer.
4 ) You started having financial problems and got behind on your mortgage.
5 ) You tried to find a way to get out of paying your mortgage so you sent $2800 to some scammers that promised to do that.
6 ) The basis for the scam is that there is some confusion as to the holder of the monetized securities so you claim you don't know who is owed the money.
7 ) You do know the identity of the servicer, the one you have been paying all along.
8 ) You are continuing to live in the house knowing that you have an obligation to pay.

Sorry, regardless of the questions on the securities you are still trying to get your house without paying the debt you voluntarily took out. If that wasn't true you would still be paying your servicer the normal amount while things got sorted out as to who holds what instead of spending $2800 to get out of it.

As long as you know where to send the payments and get a Satisfaction of Mortgage once you finish paying I fail to see why the rest is relevant to you.

Wrong again. You ignore the very basis of the home mortgage transaction: the mortgage secures the rights of the HOLDER or TRANSFEREE of the note to collect the balance due. NO ONE ELSE, mortgage servicer or Joe Blow, has the right to collect on the note or enforce the mortgage or deed of trust. The home owner is not obligated to pay a person who is not the holder, even if a mortgage servicer claims, without evidence, to be working for that person.

I did not write these laws -- they are fundamental constructs to the law of negotiable instruments and mortgages and go back to a period long before the UCC. The UCC provisions dealing with notes, Art. 3, initially adopted by the states in the original form in the 1960's to 70's, has now been the uniform law of the land for even in LA, for the last 40 or so years. IT AIN'T NEW. Besides, the banks wrote it and pressured for its enactment. THESE ARE THE BANKS' OWN RULES.

[Judge Roy Bean]

Lets strip this down to the basics for your situation.

1 ) You applied for a mortgage in order to purchase a house.
2 ) You closed on a house and someone paid the owner of the house to transfer it to you.
3 ) You moved into the house and lived there while making payments to the mortgage servicer.
4 ) You started having financial problems and got behind on your mortgage.

That's an assumption that is all-to-often made. In far too many cases, financial problems were exacerbated if not outright brought on by misbehavior on the part of an opportunistic servicer.

5 ) You tried to find a way to get out of paying your mortgage so you sent $2800 to some scammers that promised to do that.

It's far more complicated than that. In order to force the servicer to prove they have properly accounted for the funds in question, some people make the mistake of not paying whatever is demanded and then trying to get it back. By not knuckling under, some borrowers wind up in default and are using the letter of the law to thwart the servicer's attempt to foreclose.

6 ) The basis for the scam is that there is some confusion as to the holder of the monetized securities so you claim you don't know who is owed the money.
7 ) You do know the identity of the servicer, the one you have been paying all along.
8 ) You are continuing to live in the house knowing that you have an obligation to pay.

Not quite. In some cases the victim of abusive mortgage servicing is being forced to pay amounts they actually don't have an obligation to pay.

Sorry, regardless of the questions on the securities you are still trying to get your house without paying the debt you voluntarily took out. If that wasn't true you would still be paying your servicer the normal amount while things got sorted out as to who holds what instead of spending $2800 to get out of it.

Again, the problem there is the assumption that the "normal amount" will satisfy the servicer. If you look at the history of mortgage servicing abuses you'll find a handful of the most abusive servicers have had to pay hundreds of millions of dollars in fines and restitution.

As long as you know where to send the payments and get a Satisfaction of Mortgage once you finish paying I fail to see why the rest is relevant to you.

Ah - the "trust me" theory. We should trust the people who are more than willing to violate any number of laws and civil court procedural rules.

Why should it matter?

Good luck getting title insurance on that next house you try to buy if it was being serviced by one of the bad actors and was foreclosed on with forged documents and affidavits.

[Omne]

Lets strip this down to the basics for your situation.

1 ) You applied for a mortgage in order to purchase a house.
2 ) You closed on a house and someone paid the owner of the house to transfer it to you.
3 ) You moved into the house and lived there while making payments to the mortgage servicer.
4 ) You started having financial problems and got behind on your mortgage.

That's an assumption that is all-to-often made. In far too many cases, financial problems were exacerbated if not outright brought on by misbehavior on the part of an opportunistic servicer.

Depends on your point of view. In most of the cases I've seen, and I've seen quite a few, the lenders didn't provide fraudulent documents as far as the mortgage. It usually had the correct interest rate, term and adjustable language if necessary. Now, if you are saying that the lenders gave loans to people that couldn't repay them, sorry but tough. Nobody held a gun to their kids head to force them to sign the mortgage. If they didn't understand it they shouldn't have signed.

5 ) You tried to find a way to get out of paying your mortgage so you sent $2800 to some scammers that promised to do that.

It's far more complicated than that. In order to force the servicer to prove they have properly accounted for the funds in question, some people make the mistake of not paying whatever is demanded and then trying to get it back. By not knuckling under, some borrowers wind up in default and are using the letter of the law to thwart the servicer's attempt to foreclose.

I'm taking it from the original post. He got ripped off for $2800.

If you stop paying your mortgage, things happen. Unless you are at the end of the term and there is a question as to whether it paid in full or not then payments should continue while you are trying to straighten it out. If I have a 30 year mortgage and I'm paying $2000 a month and it's been 15 years I don't care if the statements are bolixed up or not the $2000 is still due. By all means bitch, complain and carry on to get a proper accounting but don't even try to justify stopping payments. The only time it's reasonable is if you made all the payments and they are demanding more. Then force the issue and go to court.

6 ) The basis for the scam is that there is some confusion as to the holder of the monetized securities so you claim you don't know who is owed the money.
7 ) You do know the identity of the servicer, the one you have been paying all along.
8 ) You are continuing to live in the house knowing that you have an obligation to pay.

Not quite. In some cases the victim of abusive mortgage servicing is being forced to pay amounts they actually don't have an obligation to pay.

As I said, if you have made all the payments called for in the mortgage you have a pretty good argument to not pay. If you haven't then you don't.

Sorry, regardless of the questions on the securities you are still trying to get your house without paying the debt you voluntarily took out. If that wasn't true you would still be paying your servicer the normal amount while things got sorted out as to who holds what instead of spending $2800 to get out of it.

Again, the problem there is the assumption that the "normal amount" will satisfy the servicer. If you look at the history of mortgage servicing abuses you'll find a handful of the most abusive servicers have had to pay hundreds of millions of dollars in fines and restitution.

There are upwards of 50 million mortgages in the US. You're painting with a pretty broad brush and are making quite a few assumptions yourself.

As long as you know where to send the payments and get a Satisfaction of Mortgage once you finish paying I fail to see why the rest is relevant to you.

Ah - the "trust me" theory. We should trust the people who are more than willing to violate any number of laws and civil court procedural rules.

There goes the broad brush again. I was going to spend more time responding but given your position regarding, apparently, all lenders it doesn't seem to be a useful investment of time.

In a way it reminds of another group of people that always talk about "them" and lump hundreds of thousands of people into one category.

[Judge Roy Bean]

...
In a way it reminds of another group of people that always talk about "them" and lump hundreds of thousands of people into one category.

Pot/kettle.

[Judge Roy Bean]

Depends on your point of view. In most of the cases I've seen, and I've seen quite a few, the lenders didn't provide fraudulent documents as far as the mortgage. It usually had the correct interest rate, term and adjustable language if necessary. Now, if you are saying that the lenders gave loans to people that couldn't repay them, sorry but tough. Nobody held a gun to their kids head to force them to sign the mortgage. If they didn't understand it they shouldn't have signed.

You clearly have little grasp of the realities of life where utterly bogus appraisals and forged documents were created to push loans through the underwriting process without the borrower's knowledge, let alone involvement.

...
The only time it's reasonable is if you made all the payments and they are demanding more. Then force the issue and go to court. ...
As I said, if you have made all the payments called for in the mortgage you have a pretty good argument to not pay. If you haven't then you don't.

BS. Good arguments don't win civil cases without good legal representation. Many borrowers have had to resort to bankruptcy whether they really needed to or not. When a $1,500 house payment + several hundred dollars in bogus fees are hard enough to keep up with, a $5K retainer is out of the question and predatory servicers take advantage of that situation every day.

[wserra]

Dragging the thread back to the original subject: Here is the brochure Svihus sends to her marks. While it's all nonsense, a few passages are worth special mention.

The process: first they "audit" your home for things they consider "anything that could be a potential fraud". One presumes they stop short of auditing their own "services". Once she finds all of these "frauds" - and she will, because that's how she gets paid - she "negotiates with the lender through written communications and phone calls regarding all the violation (sic) that were found". What's this cost?

 Current mortgages $4095
 In any stage of foreclosure $4995

Such a deal.

When the lender tells them to take a flying leap, the part that most interests this litigator begins. They bring a "quiet title action" in "local court by a local litigator that is co-counsel to LDA’s attorneys ... It is a judicial action won in federal court." Hmm. "Local court"? "Federal court"? Ah, well, a foolish consistency is the hobgoblin of little minds. Anyway, in whatever court, "There has (sic) been no losses". Probably because there "has" been no cases. Anybody ever heard of a quiet title in federal court?

I would observe that some people will believe anything, except that these thieves market to the desperate.

[Judge Roy Bean]

The "quiet title" ploy has been a heavily-promoted angle among scammers especially in recent months.

People with no access to legal representation are easy marks.

[Joandainty]

Financial planning is important for both individuals and businesses and is related with the control of finances and taking suggestions from experts or from the counsel concerning issues related with property. This helps you take right decisions regarding evaluation of stock and insurance policies.

Mod note - no advertising, url redacted

[sfosmith]

Looks like the price went up. http://www.box.net/shared/static/2nseo0 ... 5zk4dg.pdf
With a Quiet Title success rate of 95%, I guess its worth it. I got in for $2,800 back in winter of 2010. Haven't heard from them in over a year but confident I will be in the 95% some day.

I see Karen Svihus has changed her number to 209 area code. I sent them an email awhile back that I was going to advise the Santa Cruz District Attorney about her program with First Financial in Detroit area. I also said I would complain to whatever Bar Atty Linda Bernard is licensed with. I figure she probably got away from advising for this group in the interest of keeping her career from being destroyed.

As a consolation, I filed an Adversary Proceeding in the Bankruptcy Court, survived the usual motion to dismiss, and am doing well in discovery. Many pro se litigants have no choice but to do it themselves and it is hard to find a lawyer who know how to defeat a interloping creditor anyway. In discovery, I acquired two significant pieces of evidence the foreclosure mill lawfirm had no answer for which caused the judge some concern. Now onward with 5 more deposition examinations scheduled around the country. I love discovery!!!

[wserra]

Haven't heard from them in over a year but confident I will be in the 95% some day.

The 95% who either never hear from them again or get an endless string of "the dog ate my homework" excuses.

I sent them an email awhile back that I was going to advise the Santa Cruz District Attorney about her program with First Financial in Detroit area.

Did you get a response? [No.] Complain to both CA and MI authorities.

I also said I would complain to whatever Bar Atty Linda Bernard is licensed with.

Did you try to contact her first? After all, the aim is to get your money back.

As a consolation, I filed an Adversary Proceeding in the Bankruptcy Court

In whose bankruptcy did you file the AP?

I love discovery!!!

But "around the country" discovery can get expensive (writes someone who returned to NY last evening from two days of depos in Boca Raton. Rained the whole &$^%# time).

[Cathulhu]

Wes, I live in the Pacific Northwest. Isn't continual rain normal?

[sfosmith]

Did you try to contact her first? After all, the aim is to get your money back.

I requested my money back from First Financial. The actual funds went to an account supposedly owned by "Cal Trust" which maybe controlled by Svihus who then brings in First Financial Educators. Atty Linda Bernard was in an advisory position and no apparent connection to a demand for refund.

But "around the country" discovery can get expensive

Yes, with a lawyer. But Pro se it costs $250 RT air fare, cheap hotel, rental car, and $4.50 per transcript page. Best investment you can make in a lawsuit, and the only way you can penetrate the wall of secrecy of banksters and securities. It puts pressure on your opponent as the witness is liable to say anything, produce unseen documents or supply a treasure map to the next gold nugget.

[obadiah]

Wes, I live in the Pacific Northwest. Isn't continual rain normal?

It is at my house (longbranch)

[sfosmith]

I just got an email from Karen Svihus to undisclosed recipients:

Hi,

I have truly enjoyed working with each and every one of you.

As of this week I have been phasing out of my responsibilities in outside Sales & Marketing with Orlando at First Financial Education. My season with him has been one of the very best experiences ever. I will miss working with this team of dedicated professionals. I will especially miss many of you as well. I look forward to hearing many successes with homeowners.

The good news is be encouraged new strategies are being employed against the lenders in your behalf by Orlando and his team. They have the highest goals for each file.

Please call or email Orlando with all your questions about your files.

Any calls or email will not be answered or forwarded.

Orlando has new people working with him that will be very happy to take care of all your needs.



To your health and prosperity,

my very best to you,

Karen

I am sure that Orlando Washington and "his team" has some other marketing agents for the First Financial foreclosure rescue scam.

[sfosmith]

I just got an email from Karen Svihus to undisclosed recipients:

Hi,

I have truly enjoyed working with each and every one of you.

As of this week I have been phasing out of my responsibilities in outside Sales & Marketing with Orlando at First Financial Education. My season with him has been one of the very best experiences ever. I will miss working with this team of dedicated professionals. I will especially miss many of you as well. I look forward to hearing many successes with homeowners.

The good news is be encouraged new strategies are being employed against the lenders in your behalf by Orlando and his team. They have the highest goals for each file.

Please call or email Orlando with all your questions about your files.

Any calls or email will not be answered or forwarded.

Orlando has new people working with him that will be very happy to take care of all your needs.



To your health and prosperity,

my very best to you,

Karen

I am sure that Orlando Washington and "his team" will continue to draw in $3,000 fees in their confidence game with help from new marketing reps. Svihus, with her uncommon name, got top of the page publicity for over a year. I expect this influence her decision to leave this wonderful group. Karen's email was dated the evening of Tuesday July 24th, the same day as this news release:

Tuesday, July 24, 2012
Contact: (415) 703-5837

LOS ANGELES -- Attorney General Kamala D. Harris today announced defendants who ran a national loan modification scam were ordered to pay more than $4 million in penalties and restitution, including $2 million to consumers who were falsely promised modifications of their mortgage loans.

Not exactly what First Financial was doing, but signals that prosecution of sellers of rescue scams could be next.