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IN THE UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF OKLAHOMA


Timothy and Hannah Lee,
Plaintiff(s),
Case No. ____________________
v.
First United Bank and Trust,
Defendant,
Shannon Taylor,
Defendant,
R.I.C.O.
FRAUD, BANK FRAUD
CONSPIRACY/OBSTRUCTION OF JUSTICE
TAX FRAUD, MONEY LAUNDERING, WIRE FRAUD, PERJURY,
DUE PROCESS VIOLATIONS IN STATE COURT AND RIGHT TO REMOVE TO THIS
FEDERAL COURT JURISDICTION, DEFENDANTS DID NOT PRODUCE THE ORIGINAL
NOTE
U.S. Patriot Act Title III

PETITION IN THE NATURE OF A SUIT FOR DEPRIVATION


OF FEDERALLY PROTECTED RIGHTS TITLE 42 USC 1983, 1981, 1985, 1988, TITLE 18
USC 241, 242, 1512, 1968, 1964, FOR INJUNCTIVE AND DECLARATORY RELIEF AND
OTHER DAMAGES AS THE COURT SHALL DETERMINE REASONABLE, LAWFUL, AND
JUST
COMES NOW, Plaintiffs Timothy and Hannah Lee, Pro se, [for the present time] for a
complaint against the Defendants, states as follows:
JURISDICTION
1.
This court has subject matter jurisdiction under the laws of the United States of
America, Article III 2, U.S. Constitution; 42 U.S.C. 1983, 1985 and 1986 (failure to prevent) as
conferred by the U.S. Constitution 28 USC 1331 and 1343and 2254 under the 1st, 4th, 5th, 6th, 8th, and
14thAmendments. This action involves constitutional charges, grounds, questions, and jurisdiction is
supplemented by 28 USC 1367(a) and challenges the constitutional violations of state and federal law,
procedure and practice by state and federal officials and officers of the court. Plaintiff also brings this
main action through [civil RICO statute].
2.

This action is brought within the time constraints of 42 USC 1983 and particularly

under the continuing organizational complicity and fraud scope, central to this complaint.
VENUE
3.
Venue is proper because individual parties are (or were at the time) residents and
citizens of the State of Oklahoma and the United States.
PARTIES
4.
Plaintiffs, Timothy and Hannah Lee, is an citizens of the United States and residents
of Tulsa County, State of Oklahoma.
LEGAL PROPERTY IN DISPUTE
The Northeast Quarter of the Northeast Quarter of the Northeast Quarter of the Northeast Quarter
(NE/4 NE/4 NE/4 NE/4) in Section Seven (7), Township Twenty-two (22) North, Range Fourteen (14)
East of the Indain Base and Meridian, Tulsa County, State of Oklahoma, according to the U.S.
Government Survey thereof, commonly known as 11276 E. 176th Street North, Collinsville, Ok. 74021
(the Property)
5.

Defendents:
a. First United Bank and Trust Co.,
b. Shannon Taylor.

GROUND 1. Under the patriot act domestic terrorist to delegitimize political opponents, and thus
legitimize the state's own use of terror against those opponents. Opponents in participants are
following: (Title III, VI, VIII, H.R. 2975) Charges in header above also applies along with
FRAUD/BANK FRAUD, PROCEDURAL DUE PROCESS VIOLATIONS IN STATE/COURT.
The Federal Dept Collection Practice Act. None Proper Serves of State Foreclosure Proceedings.
THE HOBBS ACT18 U.S.C. 1951

Loans had already been paid in full by transfer, AIG, resale, etc... and with out providing the
Original Note that was signed by ink at said past closing proceedings. In Crawford v. Washington, 541
U.S. 36 (2004),basically states where is the body backing up the document?
An ongoing criminal investigation has been in place in the state of Florida by both the Florida Attorney
General and the Justice Department. Upon information and belief, a parallel investigation is ongoing in
the state of Kentucky and at least three other states. In September 2010, the national press began
reporting that one of the Defendants, GMAC, had placed a moratorium nationwide on foreclosures,
based on the illegalities in the policies, practices and procedures of their own employees and the law
firms representing their interests in foreclosures.

On September 24, 2010, Members of Congress, Alan Grayson, Barney Frank and
Corrine Brown wrote an open letter to Mr. Michael J. Williams, President and CEO of
Fannie Mae, as to the egregious nature and Congressional hearings as to the issues which
are the subject of this action.
Due Process Issues
Right to present a defense Holmes v South Carolina, 126 S.Ct. 1727 (2006)
Diminished capacity defenses Clark v Arizona, 126 S.Ct. 2709
Actual innocence Oregon v Guzek, 546 U.S. 517 (2006)
Conditions of inherent prejudice Carey v Musladin, 127 S.Ct. 649 (2006)
REFERENCE:
EXPERT DECLARATION OF NEIL FRANKLIN GARFIELD, ESQ.

UNITED STATES BANKRUPTCY COURT


DISTRICT OF ARIZONA, TUCSON DIVISION
ANTHONY TARANTOLA, Debtor

Case # 4:09-bk-09703-EWH

_______________________________
_

EXPERT DECLARATION OF

NEIL FRANKLIN GARFIELD, ESQ.


Deutsche Bank National Trust Company , Chapter 13
as Trustee in trust for the benefit of the
Certificateholders for Argent Securities
Inc., Asset-Backed Pass-Through Certificates, Series 2004-W8, its assignees
and/or successors,
Movant,
v.
Anthony Tarantola, Debtor; and Dianne
C.
Kerns, Chapter 13 Trustee,
Respondents.

STATE OF ARIZONA )
)
COUNTY OF MARICOPA )

Neil Franklin Garfield, Esq., deposes and states unsworn under penalty of perjury as follows:
I am over the age of 18 years and qualified to make this affidavit. I have no direct or indirect interest in
the outcome of the case at bar for which I am offering my observations, analysis, opinions and testimony. I have been a licensed member in good standing of the Florida Bar since May 31, 1977. My resume was filed by debtor previously and is incorporated herein.
My area of expertise which is offered in the case at bar is based upon my knowledge, training and experience in the field of securities, the securities industry, derivative securities, securitization of debt, securities regulation, special purpose vehicles, structured investment vehicles, pooling of assets for issuance of asset-backed securities, issuance and sale of asset-backed securities and specifically mortgagebacked securities by special purpose vehicles in which an entity is named (frequently as a trust with a
trustee for the holders of certificates or non-certificated interests in mortgage-backed securities), the
economics of securitized residential mortgages, the securitization of mortgage loans, accounting, generally accepted accounting principles, and Financial Accounting Standards in the context of said securitizations, the internal revenue code as it applies to REMIC vehicles and pooling and servicing of securitized loans. I also rely upon my specific experience with the creation of derivative securitized instruments when I worked on Wall Street for various investment banking firms, and as an investment banking consultant in a company that was owned by me. I also rely upon current and recent contacts in the
investment banking industry, including intermediary conduits, underwriters of issued and reissued securities that were sold to investors in the form of mortgage-backed securities. I have knowledge, training and direct experience with various precursor asset protection strategies including minimization of
tax liability which also are constructed to be made bankruptcy remote in commercial and real estate settings. I have knowledge, training and experience in loan origination, underwriting, and the assignment
and assumption of securitized residential mortgage loans. I also have legal knowledge, training and experience including areas of securities law and litigation, real estate property law and litigation, and the
Internal Revenue Code as applicable to REMICs and the uniform commercial code.
Further, I have knowledge, training and experiences in the actual practices prevalent during the period
of 2001 to 2008 that enabled the securitization of residential home mortgage loans, the accumulation
and availability of investment dollars, and the representations and assumptions used in the sale of mortgage-backed securities to investors. In addition, I have specific knowledge, training and experience in
the review of hundreds of mortgage closing documentation, and compliance with the Federal Truth in
Lending Act, the Federal Real Estate Settlement and Procedures Act and other consumer protection
statutes, common law, rules, and regulations from federal and state agencies regarding predatory lending practices, and customary practices in the closing of real estate transactions in the State of Arizona.
All factual testimony or statements made in this declaration are true and correct to the best of my
knowledge and belief. All opinions stated herein are based upon a reasonable degree of probability or a
high likelihood of probability. I have no direct or indirect interest in the outcome of the case at bar for
which I am offering my observations, analysis, opinions and testimony.
I have been asked to render opinions pertaining to the closing of a purported loan transaction between
Anthony Tarantola and an entity named in the closing papers as Argent Mortgage. I have reviewed
all appropriate documentation in connection with the purported loan closing specifically, I have re-

viewed the contextual documentation which provided the foundation by which the loan closing could
occur, to wit: the securitization documents that were executed prior to the offering or origination of the
subject loan. In addition, I have reviewed the actual closing documents in the subject loan and I have
reviewed various web sites of the parties that were named at the time of the closing, and the intermediaries in the securitization chain who were conduits for the origination, underwriting and funding of the
loan on behalf of investors who purchased mortgage-backed securities.
Each of the documents, web sites, and other materials which are in my possession by virtue of having
done similar reviews and analysis on numerous other transactions, some of which involve the same
parties as in the instant litigation, are of the type that experts in my field would customarily rely upon
in forming opinions and inferences.
The method of analysis which I employed consisted of numerous steps which are summarized as follows:
1. Review of the securitization documentation enabling the offer and sale of the loan product to
the debtor/borrower in the instant case.
2. Review of the closing documentation between the borrower and the alleged lender.
3. A comparison of the closing documentation with the borrower and the foundation documents,
in particular, the pooling and service agreement, assignments, assumptions, underwriting standards, acceptance standards for receipt and acceptance of the borrowers obligation into a pool
of other loans, and the roles of the securitization participants.
4. Analysis of the chain of title on record in connection with the property described in the closing
documents of the borrower.
5. Analysis of the chain of negotiation of the obligation, note and mortgage (Deed of Trust).
6. Opinion and conclusions relating to the ownership of the obligation, note and/or mortgage. In
rendering these opinions and conclusions, I assumed that the transaction consisted of a loan
that was funded for the benefit of the borrower thus creating an obligation. I further assumed
that the note and writer were evidence of said obligation. In addition, I assumed that the Deed
of Trust was incident to the executed note and did not constitute evidence of the obligation nor
did it replace or constitute the note.
7. Opinions and conclusions relating to the current status of the obligations of the borrower.
8. Opinions and conclusions relating to the current status of the creditor, including an identification of the creditor.
9. Opinions and conclusions regarding the status of the obligation as reflected by the servicers
records.
10. Opinions and conclusions regarding the status of the obligation in accordance with all receipts
and disbursements by or on behalf of the creditor, its agents or affiliates, including third-party
mitigation payments received by or on behalf of the owner of the beneficial or equitable interest in the obligation.
My opinions and conclusions are affected by the context of my general opinions and conclusions regarding the securitization of residential home loans during the period 2002 through 2008. In my opinion, the real parties in interest in each and every such transaction, were the borrower (debtor) and the
creditor (investors who advanced the funds from which the loan was funded).

The obligation that arose as a result of the funding of the loan and the acceptance of the benefits of
said funding, gave rise to an obligation between the borrower and the actual lender (investor). In my
opinion, the documentation utilized by the parties at many levels in the securitization chain, do not reflect the intention of the real parties in interest, and therefore do not constitute complete evidence of
the obligation. In my opinion, the Deed of Trust utilizing a nominee or strawman as the beneficiary,
where said nominee was never involved in the funding of the transaction, or in many cases specifically disclaimed on the face of the documentation, and elsewhere any interest or claim regarding the
obligation note or mortgage (Deed of Trust) is the equivalent of the failure to state any beneficiary under the Deed of Trust or any mortgagee under mortgage deed. Lastly, my opinion is that the party who
can exercise the power of sale under non-judicial statutory authority, is limited to a party who could
plead and prove a case in foreclosure in a judicial proceeding. My opinion is that said statement, is the
only valid conclusion, inasmuch as any other interpretation would open the door to moral hazard, allowing the taking of property without due process.
TARANTOLA PARTIES
It is my observation that many different parties in the securitization chain have initiated foreclosure expressing title or attempted to claim rights to enforce the DOT and Note. This serves as the backdrop to
the instant litigation. In thousands of cases, servicers, MERS, agents with power of attorney, trustees
of every ilk and level etc. have initiated such actions claiming or representing that they stand in the
shoes of the Lender without a shred of evidence to proffer under the rules of evidence to support their
claim.
Several such attempts, upon discovery have led to extremely heavy sanctions not only against the party
illicitly seeking foreclosure, but against the law firm that advocated for such an unjust result.
Civil sanctions as high as $850,000 have been levied against lawyer and client.
Criminal investigations are underway in many states, class actions by investors, class actions by borrowers and qui tam actions are all underway alleging tawdry schemes, fraud and deception.
In some of those cases I have seen the evidence to support the allegations of investors against these
same parties and class actions by borrowers against these same parties and in my opinion they have
merit, while the defenses offered are, in my opinion completely without merit.
I do not convey here, with certainty that the Movant is automatically subject to sanctions or criminal
penalties as a result of other cases; however, the backdrop of hundreds of cases in which documents
were fabricated and forged in the name of Deutsch Bank in particular, leaves me extremely skeptical as
to the efficacy of their claims.
I have reviewed multiple files in which securitization participants have all claimed to be the holder,
Lender, HDC or agent for an undisclosed creditor who nonetheless had every right to take the property
of a homeowner based upon a presumed but unproved debt owed to another party.

The parties the subject transaction according to my review of the securitization documentation dated
May 1, 2004 (the cutoff date), the loan closing documents, and my knowledge of the parties and standard practices of the financial services industry are as follows:
1. Unidentified Investors (Lender as a group) who purchased mortgage backed securities. This
purchase was the source of money advanced into an account from which, among other things,
the borrowers loan was funded. The Lender received a bond with terms and conditions at substantial variance from the note signed by the borrower. It is therefore my opinion that the obligation owed to the Lender was different in amount and rights to payments than the obligation
signed by the borrower as to amount and obligation to make payments. Both the bond and the
note anticipate insurance and other mitigating payments, hence the Lender and borrower,
although unknown to each other, were in agreement on one point: that insurance, guarantee or other counterparty payments would be credited to the Lender and a credit against
the obligation owed by the borrower. The Movant steadfastly refuses to answer questions
about such payments or even the identity of the Lender. These payments were never allocated to
the individual loans giving rise to the claim for third party payments, although they were paid to
the Lender or the Lenders agents. The money to purchase the insurance, guarantee and counterparty contracts was paid by the intermediaries from money due to the investor, the borrower or
both. Since the condition subsequent is expressly stated in the securitization documentation in
compliance with like provisions in the note signed by borrower I presume that the only reason
why the Movant would refuse to provide a proper accounting and the identity of the Lender is
that they either dont know, dont care or are hiding something. It is my opinion that the answer
can fairly be stated as all three. The intermediaries, having sought and obtained false appraisals
of the securities sold to investors, false appraisals of the property used as collateral for the buyer, and falsely made insurance claims on their own behalf, now seek to obtain an even greater
benefit using the argument, as I have heard it in hundreds of cases, that it is somehow more
equitable that they profit at the expense of the borrower and the investor.
a. In accordance with the Uniform Commercial Code as adopted by the State of Arizona, the Investors as a group are the creditor of the obligation from the borrower.
i. The almost universal practice of the industry and certainly the pattern of conduct of
the parties named as underwriters and other intermediaries in the Tarantola chain, is
that the securities transaction occurred prior to the offering or closing on the origination
of the loan to Tarantola through Argent Mortgage acting as a mortgage broker, unregistered as such in the State of Arizona.
b. In this case there are two pools identified and named. This might be an error of the underwriters or evidence that the loan was split into two pools or that the loan was intended to be
transferred into both pools. If the loan was intended to be transferred into both pools, it is possible that the first one in time may have priority.
c. For reasons explained below, it is my opinion that the status of the loan in terms of securitization is most likely that it was never perfected into any pool. My conclusion is that virtually all
other parties in the securitized loan chain are irrelevant other than the Lender as identified in
this paragraph and, as nominal parties, Argent Mortgage Company, LLC and/or Argent Securities, Inc. However, several of the parties named below received mitigation payments to be applied to loans that included the Tarantola loan.
d. The amount of money advanced by investors in relation to this loan I have computed through
mathematical calculation (see below) to be approximately $747,000.

e. The amount of money shown on the closing documents to have been funded on this loan was
approximately $377,000, plus points etc.
f. The amount of money received through third party payments I have computed through mathematical calculation to be a minimum of 5 times the loan amount and a maximum of 30 times
the loan amount. Thus the minimum received from third parties for contractual loss mitigation
broken down and allocated to this loan was approximately $1,885,000. Adding the yield spread
premium gap ($747,000-$377,000=$370,000) the gross amount received by intermediary agents
of the investors totals approximately $2,255,000. These third party payments are specifically
provided in the securitization documents (see appendix) but undisclosed to both the real parties
in interest, to wit: the borrower and the Lender. I therefore conclude that the loan is not and never was in default.
2. Anthony Tarantola, borrower
3. Argent Securities Inc. as depositor
2. Ameriquest Mortgage Company, as seller and master servicer
3. Deutsche Bank National Trust Company as trustee for American Home Mortgage Assets Trust
2007- 1 mortgage back **** through certificates, Series 2007-1
4. Greenwich Capital Markets Inc.
5. Banc of America Securities LLC, underwriter
6. Goldman Sachs and Company, underwriter
7. Deutsche Bank Securities Inc., underwriter
8. Merrill Lynch Pierce Fenner and Smith Incorporated, underwriter
9. NIMS, insurer; one or more insurance companies issuing a financial guaranty insurance policy covering payments to be made under the securitization documents
10. Argent Mortgage Company LLC, wholesaler, the mortgage loans will have been originated by the
sellers wholesale lending affiliates, Argent Mortgage Company LLC and Olympus Mortgage Company (prospectus)
11. Town and Country Credit Corp., retailer
12. Olympus Mortgage Company, wholesaler, the mortgage loans will have been originated by the
sellers wholesale lending affiliates, Argent Mortgage Company LLC and Olympus Mortgage Company (prospectus)
13. Bedford Home Loans Inc., retailer Alt-A
14. Radian Guaranty a Pennsylvania Corporation, insurer, providing limited protection in the event of
mortgage loan default
15. Series 2004-W8 Trust, a putative trust referred to in the prospectus and pooling and service agreement, the depositor will establish a trust relating to the Series 2004-W8 certificates (Prospectus),
indicating that a condition subsequent was required, to wit: the formation of a trust under applicable
state law, presumably the laws of the State of New York
16. John P. Grazer, CFO, signatory for Argent Securities Inc.
17. John P. Grazer, EVP, signatory for Ameriquest Mortgage Company

18. Ronaldo Reyes, assistant vice president, signatory for Deutsche Bank National Trust Company
19. Valerie Delgado, associate, signatory for Deutsche Bank National Trust Company
20. MERS System
21. DTC
22. Clear Stream (Luxemburg) Euroclear Bank SA/NV
23. Deutsche Bank National Trust Company as trustee for Argent Securities Inc. asset back past
through certificates Series (sic) 2004-W8, referred to in the securitization as a Trust to be created in
the future by the depositor Argent Securities.
a. My research reveals no actual entity by that name although it seems to have been filed for REMIC
status with the Internal revenue Service.
b. The existence of the trust is therefore unknown, in the absence of further evidence.
c. Whether the trust ever had ownership of the loan if it did exist is subject to conditions precedent
that affirmatively appear to have been unsatisfied. Hence acceptance of any assignment or attempted
assignment of the subject loan is doubtful at best.
d. If the loan was effectively transferred, the current status of the loan is dependent upon conditions
subsequent expressly stated in the securitization documents. Since the loan is part of a failed pool
wherein the customary practice was liquidation and transfer of assets for resecuritization and reissuance
of mortgage backed securities or derivatives thereof, it is virtually impossible for the loan to be in the
pool claimed by Movant.
e. My conclusion is that unless the Movant is an actual trustee with actual trustee powers of an actual
successor trust wherein actual assets in the trust include the Tarantola loan, then the Movant has no
basis in fact for attempting enforcement of the obligation, note or mortgage. I have neither seen nor am
I able to uncover through research such situation.
f. Accordingly, it my opinion that the legal title to the loan is hopelessly defective but the equitable title
remains with the investors who advanced the money from which the borrowers loan was funded. But,
since the agents of the investors received money that is due to the borrower under the Truth in Lending
Act (being undisclosed fees and profits) the investors have a legal claim against the investment bank
that did the writing and selling of the mortgage backed securities. The equitable claim for a lien on the
borrowers property is extinguished by virtue of the fact that the amounts received offset any scheduled payments in the past, present or future.
The loan made to Debtor was part of a two way transaction in which the two parties at each end thereof
each purchased a Financial Product.
On one end, the home buyer or refinancer was sold a residential home loan.
On the other side, a Mortgage Bond was sold to an Investor.
In my opinion, both financial products were securities. Neither set of securities were properly registered or regulated.
Information that would reveal the identity of the "Lender" is in the sole care, custody and control of the
Loan Servicer or another Intermediary conduit in the Securitization Chain, including but not limited to
the Trustee or Depositor for the Special Purpose Vehicle that re-issued the homeowner's Note and encumbrance as a Derivative Hybrid Debt Instrument (bond) and equity instrument (ownership of percentage share of a pool of assets, of which the subject loan was one such asset in said pool).
Said Security, the Bond, that was sold to an Investor was done by use of the Borrowers identity and
obligation without permission. In my opinion, it is equally probable that the Investors were kept un-

aware that a maximum of only 2/3 of their investment was actually going to fund Debtor's loan and
others similarly situated, with the excess being used to create instant income for Participants. Debtor
was unaware that such large profits or premiums were being generated by virtue of his identity and signature on the purported loan documents.
In my opinion, Tarantolas obligation is owed to the party who advanced the money to fund the loan.
This party consists of a group of investors who purchased interest known as mortgage-backed securities, granting them the full beneficial right and ownership of a percentage of a pool of assets in the process of securitization. My conclusion is that the borrower owes the money to the creditor as described
above. It is the creditor who has an obligation to provide a full and complete accounting of all receipts
and disbursements that are allocable to the loan account or the loan transaction with the borrower. In
the case at bar, no such accounting has been offered. In fact, the intermediaries who purport to have the
right to foreclose, clearly refuse or have failed to provide the necessary information for the borrower to
determine the current status of the obligation. Instead, the intermediaries offer only an accounting for
transactions during a specific period between the borrower and the servicer. Missing from this accounting, are transactions between the borrower and the originating lender (Argent) and transactions in
which third-party payments were received by the creditor or on behalf of the creditor through authorized agents or affiliates, all as set forth in the pooling and service agreement and prospectus, a copy of
which is attached hereto with excerpts that in my opinion are relevant to the analysis of this case.
In my opinion Argent was acting as the agent, subagent, or affiliate of multiple parties (each with conflicting interests and roles) at the time of the closing with the borrower. The principal was undisclosed.
Argent was, as I have seen in numerous transactions, engaged in a pattern of conduct in which it acted
as the Agent for undisclosed principles. Thus the loan clearly a table-funded loan, as promulgated by
Regulation Z of the Federal Reserve, and the applicable provisions of the Truth in Lending Act. The
purpose of said regulations and laws is to reduce the asymmetry of information between the borrower
and the lender. It is presumed that the lender is in a superior position and far more sophisticated in the
analysis of proposed loan transactions than a borrower who may be accepting the offering of a loan
product with little or no knowledge as to what it contains. This transaction was a single transaction
between the borrower and the party who advanced funds, with many intermediaries acting as conduits
and agents for documentation and money.
Based upon the answers and objections to debtors discovery, I conclude that there is an issue of fact as
to whether the loan was in fact securitized. Movant declined to answer a question as to whether it was
the beneficiary of the Deed of Trust. Instead it declares that it is the holder of the note. From that answer, it appears that Movant is not the beneficiary of the Deed of Trust but is asserting the position that
it is the holder of the note. Movant declines to answer whether the note is payable to Movant. Therefore
I conclude that the note is payable to some other party.
Movant declines to answer any question about the pooling of the obligation, evidence of the obligation
(note) or any instrument incident to said evidence (note) that would secure the obligation with an encumbrance upon real property. I conclude that this is an admission against interest. Movant alleges that
it is the Trustee of a Pool of Assets that includes the debtors obligation. Yet Movant declines to answer
any questions, including an admission that said pool of assets actually includes Debtors obligation. I
therefore conclude that the Pool does not include debtors obligation, as of the time of the response to
debtors discovery.

Since Movant asserts it the Trustee of a Trust and the subject matter in dispute in the case at bar does
not appear to have any relationship to said trust, the Trustee (Deutsch) has no interest in the debtors
obligation, directly or indirectly. Based upon my knowledge of standard industry practices the most
likely reason is that the alleged assignments either never actually took place or never were perfected.
While it is possible, although unlikely, that any such assignments were properly and timely executed,
there is no evidence that the assignment was accepted, and thus the transaction was never completed.
Therefore, I conclude that the only beneficiary of record is Argent, the originating lender. However, all
the facts point to the intention of the parties to securitize the loan and thus was funded not by Argent as
a creditor, but by investors who purchased mortgage backed securities. It is therefore my conclusion
that legal ownership remains vested in Argent with equitable ownership or rights of subrogation in favor of the investors. This was a table-funded loan, which was funded like hundreds of others originated
by Argent, through third parties that were not disclosed nor were the fees for the origination, yield
spread premiums or other compensation relating to the funding disclosed to the borrower. This is presumptively a predatory loan under regulation Z of the Federal Reserve, and the Federal Truth in Lending Act.
To be clear, in other forums the attempt has been made to characterize this analysis as meaning that although the borrower took the benefit of the loan and the creditor (investor) advanced the money that
funded the loan, the borrower no longer had any obligation. This is not correct.
This analysis only means that the identity of the creditor has been misstated and the issue of whether
the obligation is secured is dependent upon whether there was a split of the note from the mortgage
which is a question of fact.
The simple answer is that if the note is payable to one party and the beneficiary under the deed of trust
is another party, the note and mortgage were separated and the obligation is no longer secured. However, this cannot be finally resolved in this forum with the current configuration of parties. The reality
is that the equitable owner of the obligation (the investor) intended to have the money advanced secured by a mortgage, as all the paperwork shows. The borrower clearly understood that an obligation
was being created and that it was secured by an encumbrance upon the debtors real property.
Hence, the intention of the real creditor and the borrower were the same. It was the intermediaries, acting as agents of the investors, that failed to perform their duties in perfecting or completing the transaction, thus causing numerous breaks in the chain of title of both the note and the mortgage.
The obligation lies at the essence of the transaction whether documents were prepared or not, and
whether those documents were prepared correctly or not and whether they were properly recorded or
not. The investor therefore has equitable rights to assert which the debtor must answer. Those rights are
subject to a complete accounting from the creditor (investor) and the agents of the creditor. The balance, if any, is still due and might be secured by a lien created by the court. The terms of payment
might be gleaned from the original note as amended by the court in equity.
At this time, therefore, there is no valid notice of default or notice of sale. The substitute trustee has
failed to perform due diligence or is ignoring the duty to do so. Based on the above, the substitute
Trustee on the deed of trust has a duty to cease any proceedings. The substitution of trustee was, as indicated above, most likely executed by a party with no interest, beneficial or otherwise, in the obligation, note or mortgage. To a high degree of certainty I conclude that the Trustee under the Deed of Trust
remains unchanged from the recitations on the recorded Deed of Trust.
Securitization of residential home mortgages are not improper or illegal. The method, in practice, by
which residential home mortgages were securitized during the period 2002 to 2008 was mostly improp-

er and illegal. Besides the usual predatory practice of steering borrowers into more expensive and less
viable loans than would be appropriate or acceptable to either the borrower or the lender (investor),
there existed a second yield spread premium at the level of the sale of the loan to the investor. The prospectus and pooling and service agreement clearly allow for the funds to be used for general operational purposes, instead of providing a specific schedule of a use of proceeds in which all of the invested
funds are used to fund residential home mortgages and fees as set forth in those documents.
This created a gap, which was used by the investment banking underwriter who created and controlled
all of the intermediaries, in which the difference between the rate of return promised in the offering of
mortgage-backed securities and the nominal rate of return of the pool resulted in a gap which varied
from 5 percent to 100 percent of the actual loan funded in any given case. In my opinion, in the case at
bar, this yield spread premium gap, properly allocated to the loan in the case at bar, together with the
undisclosed fees and yield spread premiums paid to the parties and intermediaries involved in the closing, actually exceeds the entire principle due at the time of the closing of the loan.
CALCULATION OF YIELD SPREAD PREMIUM IN UPPER TIER OF SECURITIZATION CHAIN:
$1 billion (approximate) in securities offering. No showing of actual proceeds or any limitations on issuer. Second yield spread premium may exist in this unknown spread or in the spread between the offering amount and the unknown actual amount funded. Extrapolating from yields disclosed in the prospectus the actual yield promised to investors was approximately 7%, with the right to reduce same under a variety of circumstances wholly in control of the underwriters. The nominal yield weighted average is stated in several different ways in order to confuse the reader and make computation more challenging. Based upon computations made directly from the prospectus and comparing it with similar
prospectuses involving most of the same parties, the nominal actual average interest was sold to the
SPV at approximately 9.6%. Thus, rounding down, the yield spread premium was 2.5%. 2.5% is 26%
of the nominal 9.6% rate. Applying 26% to the declared proceeds, the dollar yield spread, undisclosed
to either the investors or the borrowers, was approximately $250,000,000. The nominal principal of the
debtors note is approximately $377,000. The non-weighted yield spread premium at this level of the
lending chain should therefore be expressed as either $94,250 or $82,500. Applying an average
between the two methods, the estimated non-weighted yield spread premium on this loan is approximately $88,000 without weighting. Applying the customary weighting using the actual nominal rate sold
on this debtors loan (14.1%), the estimated yield spread premium earned by participants in this lending
chain from this level of the lending chain was in fact approximately $369,460 (almost equal to the loan
itself). Adding customary interest ($232,759.80) and treble damages ($1,108,380) under the Federal
Truth and Lending Act the net actual dollar liability for yield spread premium at said level due from the
lending chain on debtors loan would therefore be expressed as $ $1,341,139.80 due to borrower. This
amount is subject of course to a determination of all other claims and defenses each or any of the
parties may have.
Under the terms of the Truth in Lending Act and other applicable statutes, undisclosed fees are due
back to the borrower, and thus would affect the status of any alleged default, and the balance due on the
obligation. In addition, the presence of the second yield spread premium as described above, necessitates the purchasing of insurance and other credit enhancements, hedge products and guarantees. The
reason why it necessitates the use of such products, besides the obvious risk that the loan is likely to go
unpaid by the borrower, is that in the event that the loan is in fact paid, and remains fully performing,
the amount owed to the creditor will be equivalent to the amount allocated to his purchase of mortgagebacked securities. This would leave the securities underwriter in the position of owing the difference
between what the investor thought was being invested in loans and the actual lower amount.

The purchase amount of the securities vastly exceeds the amount that was invested in the funding of
mortgage loans including the one in the case at bar. In order to avoid criminal and civil liability in administrative sanctions, it would be necessary for the intermediaries who retained the yield spread
premium gap, to retain the power to declare the pool in which loans were allegedly located, to have
been depreciated in value and thus collect the proceeds of insurance, credit enhancements, hedge
products and so forth. By retaining the power to declare a pool as being in default or failure, the intermediaries were guaranteed the proceeds of insurance or other third-party payments regardless of
whether a particular loan went into default or not.
These amounts were default mitigation payments, which should have been allocated on some basis to
each obligation claimed to be in the loan pool. I have sued a simple mathematical calculation arriving
at the relative size of the loan to the entire pool identified by the prospectus. In accordance with the
provisions of the note, which is partial evidence of the obligation as stated above, the receipt of such
payments would be first applied to payments due, second to fees due, and third returnable to the borrower. Presumably, the return to the borrower would be by way of a credit against the obligation due;
however, it is an open question as to wheather or not the money received from third parties should be
actually paid to the borrower or simply credited against the obligation due.
In my opinion, none of the parties in the case at bar have any credible claim to the status of the creditor. Further, none of the parties in the case at bar have any clear credible claim to being in the status of
an authorized agent for the principle.
There are several reasons for the above findings.
First the actual principle is a confused issue which must be sorted out with the proof as offered by the
alleged lender.
There are multiple levels of potential authority to enforce the obligation if any is due. Because
of the extremely high likelihood that third-party payments were received, but are neither denied nor admitted by the parties in the case at bar, it is most likely that the notice of default was fatally defective,
and in fact that there is no default when the third-party payments are applied as required.
The confusion arises out of the creation of documents by the investment banking underwriter
which were intentionally obscure. The purpose of said obfuscation was to enable the investment banker
to write down the value of the pool of assets, while at the same time allowing the master servicer to
purchase the assets at a vastly reduced price compared to that which was paid by the actual lender (investors).
Thus the payment by third-party insurers or counter-parties, would be retained by the master
servicer and used as profit which was directed to certain entities which appear to be located in London.
Taking the securitization documentation on its face, however, one would reach the inevitable conclusion that the lender is the investor, the trustee is in actuality a conditional agent of an undetermined
pool of assets which purportedly are organized into a trust which is not properly formed under the laws
of the State of New York as specified by the laws of said state. Thus the grouping of investors was at
best a loosely knit partnership using the prospectus and pooling service agreement as a reference point
for what appears to be an unwritten operating agreement.
The master servicer is the party that, on its face, retains all power over all transactions and
would be the party that might conceivably have some claim of agency to bring claims for enforcement
of the obligation. However, at the instruction of the master servicer, and in accordance with the provisions of the securitization documentation, there is no requirement for due diligence, inquiry or investig-

ation as to the actual status of a particular obligation and whether it is in actuality in default after giving
credit for all potential payments that may have been made and accepted on behalf of whoever is the
current holder of the paper which is used as evidence of the obligation.
It is highly likely that the investors have a claim to the same money that the borrowers are entitled to receive under the Truth in Lending Act. Some of these actions by the intermediaries, violate the
wording and the intent of the real parties and interests (the home owner and the investor). The actual
documentation that serves as the evidence of the obligation is both the note that was executed by the
borrower and the bond that was received by the lender (investors). In some cases the specific provisions vary considerably, and actually conflict with one another. That conflict is always resolved in favor
of the intermediaries to the detriment of both the investor and the borrower. In my opinion, neither the
investor nor the borrower would have executed any documentation, advanced any funds, nor accepted
the loan product that was offer, had the full facts been known by both sides. It is therefore the imperative of the intermediaries to keep the investor and the home owner separate inasmuch as sharing of information between the investor and the home owner could lead to a considerable chain of negative consequences to the intermediaries.
In addition, the chain of authority continues down from the master servicer to sub-servicers
and other agents. In connection with this particular case, the pooling and service agreement was executed by Renaldo Reyes, whose conversation with a borrower was heard by the declarant. In part, I
rely upon the content of said conversation in which Mr. Reyes said that notwithstanding the wording
and provisions contained in the securitization documentation and the various instruments allegedly executed in connection with the underwriting, funding, and assignment of the subject obligation, that the
party with the actual fiduciary rights, duties and obligations is the sub-servicer handling the account
with the borrower. In fact, Mr. Reyes states that the final decision on the disposition of any loan, lies in
practice solely with said servicer and not with the nominal trustee (Deutsch).
Thus we have nominally a number of intermediaries in the chain as described in the documentation, most of which is conflicting, and requires no action on the part of any of the intermediaries, and
prevents any action by any of the intermediaries without satisfaction of conditions subsequent which
are described in the securitization documentation. Contrary to the recitations in the documentation, Mr.
Reyes seems to state that the practice employed in all securitized home mortgage transactions, is different than the requirements set forth in any of the documents, including the loan closing documents executed by the borrower.
The plain truth of the transaction is that the investor lent the money, the borrower took the benefit of the funding of the loan, while the documentation shown to the borrower and the documentation
shown to the lender were different. On the one hand the borrower executed note and Deed of Trust and
on the other hand the investor received a bond which was based upon the alleged existence of certain
assets which could be changed out, depreciated or otherwise disposed of without the knowledge or consent of either the lender or the borrower. This contradiction in terms as well as contradiction in practice
requires that any party seeking to enforce the obligation or enforce the right to an encumbrance on the
real property, must state a case for doing so and show the actual chain of documentation which would
in fact and in truth present the reality of the situation. In my opinion, the reality of the situation is that
the lender has an equitable right to the obligation subject to an accounting for third-party payments.
Further, it is my opinion that the lender may have an equitable right to seek an encumbrance upon the
property securing the obligation, if any as it is redefined based upon the proof which is offered to the

court. In turn the borrower has a claim against any party who received directly or indirectly the benefit
of third party payments, the proceeds of which came from insurance policies purchased from the transaction between the Lender (Investors) and the borrower.
I use the following definition of Creditor taken from research in cases, the Bankruptcy Code
and the Uniform Commercial Code. A Creditor is a legal entity that has advanced funds, goods or
services in consideration of the right to payment, or has purchased the right to be paid. In the bankruptcy context, a Creditor is an entity that had a Claim against Debtor before the case was filed. 11
U.S.C. 101(10). A "Claim" is a right to payment. 101(5). Only a Creditor may file a Proof of Claim.
501(a). The "Official Form 10 reflects this requirement by describing the Name of Creditor' as the
person or other entity to whom the debtor owes money or property." In the context of securitized residential mortgages (including the one in the instant case), a Creditor is a legal entity or group of entities
or persons under the law who have advanced money for the funding of mortgage loans and who are
owed money from those mortgage loans. The creditor in the case at bar can be generically described as
an Investor, as defined under the rules and regulations of the Securities and Exchange Commission who
has paid money to an intermediary in a chain of securitization that resulted in the funding of one or
more residential loan transactions; the promise to pay is from an entity usually referred to as a Special
Purpose Vehicle (SPV) which is frequently erroneously referred to as a Trust with a Trustee, that in
the applicable Pool in this case was Movant.
The creditor/investor receives an instrument which is generically referred to as a Mortgage
Backed Asset Certificate (Certificate). The Certificate incorporates terms by which the promise to
pay interest and principal is made by the issuing SPV.
The promise to pay is conditioned upon several terms, including but not limited to the performance of a pool of loans, the obligations of third parties, and impliedly the receipt of insurance proceeds
triggered by partial non-performance of the pool of assets allocated to the SPV.
In turn the SPV pool is carved out of other pools created by Aggregators employed by investment banking firms. The Aggregators are parties to Pooling and Service Agreements and Assignment
and Assumption Agreements, which are Securitization documents that predate the funding of the loans
in any of the Pools. The Certificate issued to the Investor conveys a percentage interest in the Pool of
assets that is allocated to the SPV. To the extent the information in this paragraph was phrased in generalities, they were applicable to the specifics in this case.
I was asked to render an opinion as to the factual basis pertinent to the issue of Standing. As
relates to Constitutional Standing, my opinion is premised on the following definition: Constitutional
standing under Article III requires, at a minimum, that a party must have suffered some actual or
threatened injury as a result of the defendants conduct, that the injury be traced to the challenged action, and that it is likely to be redressed by a favorable decision. Valley Forge Christian Coll. v. Am.
United for Separation of Church and State, 454 U.S. 464, 472 (1982); United Food & Commercial
Workers Union Local 751 v. Brown Group, Inc., 517 U.S. 544, 551 (1996).

My presumption, in the context of the question posed to me, is that standing requires that a
party will suffer financial loss derived from non-performance (i.e., nonpayment) of the subject contract,
which in this case is the obligation that arose when the subject loan was funded on behalf of the debtor
as homeowner and referred to in some documents as the Borrower. Since the funding occurred out of a
pool of money received by the investment banker from the investors, the investors are the creditors.
By way of indenture (usually incorporating a prospectus) the investors agreed to an operating
plan that defined the functions of the conduit which was used to funnel funds to the investor from the
pool. However, since no assets remain in the conduit which is defined under the Internal Revenue Code
as a REMIC (Real Estate Mortgage Investment Conduit) it is challenging to describe the creation,
maintenance and function of the trust.. The REMIC is referred to in the world of finance as an SPV
(Special Purpose Vehicle). I presume the words conduit and vehicle convey the fact that no actual
business events of taxable or monetary significance takes place in the REMIC. I conclude that this corroborates my opinion that the investors are the creditors, having been the only parties to advance funds
from which the subject loan was funded.
The note signed by said borrower and the mortgage-backed bond accepted by the investor who
purchased said security are both evidence of the obligation.
The Deed of Trust is intended to be incident to the note and possibly incident to the bond, if the
chain of title was perfected. The Payee on the note and the payee on the bond are different parties. The
bonds were issued with three principal indentures: (1) repayment of principal non-recourse based upon
the payments by obligors under the terms of notes and mortgages in the pool (2) payment of interest
under the same conditions and (3) the conveyance of a percentage ownership in the pool of loans,
which means that collectively 100% of the investors own 100% of the entire pool of loans.
This means that the Trust does NOT own the pool nor the loans in the pool. It means that the
Trust is merely an operating agreement through which the investors may act collectively under certain conditions. Accordingly, it is my opinion that the parties with standing in relation to a securitized
loan are the debtor/borrowers and the creditor/investors. This would be further corroborated if, as a
matter of fact, the investment banker followed industry standard of selling the mortgage backed security FORWARD. Selling forward means that the security was sold and the money was collected before
the first loan was offered or funded on behalf of borrowers. However, even if the investment banker
had not closed the sale of the securities with investors before accepting applications for loans, it would
have been on the basis of an expectation of said funding. Ultimately, in all securitized loans there is
really only one transaction --- a loan from the investors to the homeowner. Without an investor there
would be no loan; conversely without a borrower there would be no investor or investment.
It is accordingly my opinion that none of the intermediary parties are or ever were creditors and
that they therefore lack standing as defined above. None of them had at any time relevant to the subject
matter before this Court, the filing of the Bankruptcy Case to the present, suffered any actual or
threatened injury as a result of the Debtors non-payment of monthly payments pursuant to the original
terms of the Note, nor because of her alleged default thereon, nor can any actual or threatened injury be
traced to any other proceedings in bankruptcy court, including but not limited to the motion for relief
from stay proceedings, any action involving a Proof of Claim, the Chapter 13 Plan or otherwise, and

therefore there never was any legitimate redress available to any of these parties by a favorable decision.

As relates to the issue of Real Party in Interest, the factual criteria and question I have
presupposed is: Whether Movants own financial interest was at stake in the outcome of the litigation
before the Bankruptcy Court. My opinion is offered based on all evidence before the Court to date is
as follows:
A) Other than the Lender (investors) none of the parties to this transaction and certainly
no party in court now ever had any of its own funds at risk in the outcome of the litigation.
B) The Trustee cannot act as one would have the authority to do, for example, as if it had
an unlimited power of attorney, or as in an express trust that grants unlimited authority to
act on behalf of the Certificate Holders. The Trustee cannot stand in the shoes of the
certificate holders without a special grant of authority and indemnification. Therefore, the
Trustee does not have the authority to be the Real Party in Interest on behalf of the Certificate Holders. Also, the proof in the record is inadequate to establish that the ownership
of the Note, holdership of the Note, or right to enforce the Note was properly pooled to
the above described alleged Mortgage Trust Pool. Accordingly, as the record stands,
the evidence does not establish the Trustee as being the Real Party in Interest.
None of the known Participants in the subject securitization chain, including but not limited to
Movant, has suffered any financial loss relating to the loan, nor are they threatened with any future loss
even if foreclosure never occurs. None of the known securitization Participants has ever been the real
party in interest as a lender or financial institution underwriting a loan while funding same with respect
to the loan. None of the known securitization Participants, will suffer any monetary loss through non
performance of the loan. All of the known securitization Participants received fees and profits relating
to the loans. The existence and identity of the real parties in interest was withheld from the
Borrowers/Plaintiffs in the closing and servicing of the loan, and since.
All of the known securitization Participants fail to meet one or more of the following two tests
required for HDC status: 1) without actual knowledge of defects; and/or 2) in good faith, meaning a legitimate belief that the loan was solid, based upon the information they had at the time of purchase of
the Note.
The investor is still the Creditor if the investor has not sold, transferred or alienated the hybrid
mortgage backed security and if the investor has not been directly or indirectly paid through credit default swaps, with or without subrogation, or paid through a federal program with or without subrogation. Since no such instruments appear on record, any right of subrogation would appear to be equitable. Thus for purposes of this declaration, the unknown and undisclosed Investors constitute the only
Creditor presumed to exist until the undersigned is presented with contrary evidence of the type that an
expert in my field of expertise would normally take into account in forming opinions and conclusions.
Therefore I conclude that if there remain any Creditors, pursuant to the Note, they are the
unidentified Investors and all other parties are intermediary or representative or disinterested. Debtor
has made unsuccessful attempts to obtain from Movant and others the identity of the Investors, the documentation authenticating their identity, and an accounting that would show all money paid or received
in connection with the subject obligation. Neither Affiant, nor Movant, nor the Court will be able to de-

termine the amount of Debtors equity in the property until a complete accounting of all debits and
credits, including but not limited to, the 3rd party payments referred to above.
Until such time as requests for said information have been answered, I will be unable to identify
with certainty the exact identity of the current creditor, meaning the true owner of the alleged obligation, other than to say, with certainty, that it is not Movant, nor any Participant in the Securitization
chain.
Several transactions have purportedly taken place regarding the subject loan, as the Note was
transferred up the chain of securitization to the Trustee of the MBS Pool. In my opinion, the "Lender,"
as set forth in the original DOT, in securitized loans is at best only a nominee for an undisclosed principal. The transaction with the homeowner was subject to a pre-existing contractual relationship
wherein the Investors advanced the funding for the loan and profits, fees, expenses, rebates, and kickbacks. This is known to many of the known and unknown securitization Participants, inasmuch as they
have been the recipients of memoranda from legal counsel and advisers, which in my opinion are not
protected by attorney client privilege or the attorney work product privilege, in which they have been
informed that it is only a Nominee when the Lender does not advance cash for funding the loan
and does not receive any payments on the obligation.
MORAL HAZARD: A situation has been created which at least theoretically would allow multiple parties to make claims on the same property from the same borrower, claiming the same Note and
DOT as the basis therefore. The intended monetary effect of the use of such a Nominee was to provide
obfuscation of profits and fees that were disclosed neither to the Investor who put up the money nor to
the Borrower in this loan. In the case at bar, it is my opinion based upon a reasonable degree of financial analytical certainty, that the total fees and profits generated were actually in excess of the principal
stated on the note which is to say that Investors unknowingly placed money at risk the amount of which
vastly exceeded the funding on the loan to the borrower.
The only way this could be accomplished was by preventing both the Borrower and the Investor
from accessing the true information, which is why the industry practice of Nominees like the private
MERS system were created. Even where MERS is not specifically named in the originating documents
presented to the homeowner at the "closing" it was industry practice from 2001-2008 to utilize MERS
"services", or to implement practices similar to those utilized by MERS.
Therefore it is possible and even probable that the data from the closing was entered into the
MERS electronic registry and that an assignment was executed to MERS purportedly giving
MERS some power over the obligation, the Note and/or the encumbrance. As a general rule in securitized transactions and especially where MERS is named as Nominee, documents of transfer (assignments, endorsements, etc.) are created and executed contemporaneously with the notice of default thus
selecting a Participant in or outside the securitization chain to be the party who initiates collection and
foreclosure. The very practice of having a secret system of recording transfers of beneficial ownership
of real estate notes, ipso facto creates an automatic cloud upon title.
In my opinion, it is unlikely that any HDC exists, because of the way securitization was universally practiced within the investment banking community during 2001 through 2008. Hence the loan
product sold to the subject homeowner included a Promissory Note that was evidence of a real obligation that arose when the transaction was funded but lost its negotiability in the securitization process,
which thus bars anyone from successfully claiming HDC status.
The negotiability of the note was negatively affected by (1) the splitting of the note and mortgage as described herein; (2) by the addition of terms, conditions, third party obligors and undisclosed
profits, fees, kickbacks all contrary to existing federal and state applicable statutes and common law
(which has relevance to the TILA, RESPA and related allegations in the Forensic Review Analysis, at-

tached hereto as Exhibit A; and (3) knowledge of title and chain of title defects in the ownership of the
Note, beneficial interest in the encumbrance, and position as Obligee on the obligation originally undertaken by the subject homeowner.
The only party that can claim to be a Holder in Due Course (HDC) of the Note are those that
paid value for the Note, without knowledge that there were any pending challenges to its validity and
who fulfill the other requirements for HDC status. This HDC and the Third Party Sources are the only
ones that could conceivably suffer a monetary or pecuniary loss resulting from non-payment of the obligation. The Investor could lose if because they advanced the actual funds from which the Financial
Product Loan was funded, assuming these Investors that purchased asset backed securities were those
in which ownership of the Loans were described with sufficient specificity as to at least express the intent to convey ownership of the obligation as evidenced by the Promissory Note and an interest in real
property consisting of a security interest held by an entity that was described as the Beneficiary of a
Trust created by an instrument entitled Deed of Trust. These Investors were not named. This practice
has been intentional, in my opinion, based on the overwhelming commonality of this reoccurring obvious failure, and other overwhelming evidence. The Third Party Sources that could conceivably lose because they would have paid value prior to default or notice of default, and fall within one or more of
the following classifications:
a) Insurers that paid some party on behalf of said investors;
b) Counterparties on credit default swaps;
c) Conveyances or constructive trusts arising by operation of law through cross collateralization and over collateralization within the aggregate asset pools or later within the
Special Purpose Vehicle tranches; 1 "Tranches" is an industry term of art referring to the
types of division within a Special Purpose Vehicle. They are described in the Securitization Documents reviewed and on file.
d) The United States Treasury Department through the Troubled Assets Relief Program
in which approximately $600 billion of $700 billion has been authorized and paid to purchase or pay the obligation on "troubled" (non performing) assets of the LOANS are part
of the class of assets targeted by TARP;
e) The United States Federal Reserve, which has extended credit on said troubled assets
and has exercised options to purchase said troubled assets;
f) Any other party that has traded in mortgage backed securities from the aggregated
pools or securitized tranches containing interests in the Notes.
In my opinion, based on evaluation and review of a multitude of Mortgage Backed Securities
documentation, financial documentation, from knowledge of the gains that can be made by various Participants from various triggers, and from investigations performed, and the consistency with which the
same situation, with the same problems is seen to exist in nearly every example, it is reasonable to conclude that the creation of an untenable situation for Investors in these transactions, or the appearance of
an untenable situation for Investors, is that paradoxically said situations have been intentionally created.
The loan made to Debtor was part of a two way transaction in which the two parties at each end
thereof each purchased a Financial Product. On one end, the home buyer or refinancer was sold a
residential home loan. On the other side, a Mortgage Bond was sold to an Investor. In my opinion, both
financial products were securities. Neither set of securities were properly registered or regulated, and
the information that would reveal the identity of the "Lender" is in the sole care, custody and control of

the Loan Servicer or another Intermediary conduit in the Securitization Chain, including but not limited
to the Trustee or Depositor for the Special Purpose Vehicle that re-issued the homeowner's Note and encumbrance as a Derivative Hybrid Debt Instrument (bond) and equity instrument (ownership of percentage share of a pool of assets, of which the subject loan was one such asset in said pool). Said Security, the Bond, that was sold to an Investor was done by use of the Borrowers identity and obligation
without permission. In my opinion, it is equally probable that the Investors were kept unaware that a
maximum of only 2/3 of their investment was actually going to fund Debtor's loan and others similarly
situated, with the excess being used to create instant income for Participants. Debtor was unaware that
such large profits or premiums were being generated by virtue of his identity and signature on the purported loan documents.
According to information from Debtor, Debtor has made unsuccessful attempts to obtain from
Movant and others the identity of the Investor/Creditor and possession of documentation authenticating
this identity. Neither Affiant, Movant, nor the Court will be able to determine the identity of the Creditor, if any still remains, until requests for information and documentation have been complied with.
I have also reviewed, for the past 40 years, published Financial Accounting Standards obviously
intended for auditors involved in auditing and rendering opinions on the financial statements of entities
involved in securitization, securities issuance and securities sale and trading. If the known Participants
in the securitization scheme followed the rules, they did not post the instant transaction as a loan receivable. The transaction most likely was posted on their ledgers as fee income or profit which was
later reported on their income statement in combination with all other such transactions. These rules explain how and why the transactions were posted on or off the books of the larger originating entity.
These entries adopted by said companies constitute admissions that the transaction was not considered
a loan receivable on its balance sheet, or on the ledgers used to prepare the balance sheet, but rather
shown on the income statement as a fee for service as a conduit. These admissions in my opinion are
fatal to any assertion by any such party currently seeking to enforce mortgages in their own name on
their own behalf, including but not limited to the securitization Participant in this case.
It also appears that the standard industry practice of creating a yield spread premium between
the Creditor and Originator was extended and expanded in the case of the securitization chain such that
in this case, in my opinion, it is highly probable, far beyond 50% probability that the Debtor's loan was
sold or pre-sold to the Investors at a gross profit to the Participants in the securitization chain of at least
35% of the total principal balance of the note.
It is also my opinion that this was done without full disclosure to the Investors and that this is
tantamount to fraud upon the Investors. In my opinion the investors were and remain completely unaware that much, and in many cases most of the money they supplied was used to fund fees for the Participants in the securitization chain, with the rest used to fund bloated mortgage loans based upon inflated appraisals by companies that had a less than arm's length relationship with the Originator and
others involved in obtaining approval for the loan. These yeild spread premiums far exceed those ever
paid prior to the securitization of residential mortgages.
With yield spread premiums such as these, there was no way that there could ever be a legitimate profit made by any Investor under ordinary circumstances, with the exception of those in upper
tranches, whose profit was insured from the start, no matter how lacking in viability were these investment vehicles on the whole, because of the way payments to the Investors were prearranged. It is also
my opinion that the overall Security was planned by the Aggregator (in this case, Goldman Sachs and
subsidiaries) and other Participants to fail from the start. The reason for the intended failure of the overall Pool in my opinion was to better insure that the fraud perpetrated on the Investors would be less
likely to be discovered and to make it so that additional unearned profit could be made by the Aggregator and other Participants, based on the Third Party Payments discussed above that were payable only

when there was a declaration of default by the Pool, often called a trigger event, the various forms of
which are defined in the PSA and other Securitization Documents. In my opinion, direct allegations or
implications regarding fraud and conversion, as well as intentional aiding and abetting or conspiracy
are well taken. The theory that each Participant, including the very first party in the securitization
chain, the Lender on the Deed of Trust, is complicit in acts and series of acts with knowledge that these
actions will harm the debtors, including fraud and conversion, and/or are part of a scheme to commit
fraud and conversion in the form of not crediting borrowers account by third party source payments,
thereby converting ownership of the property from the Borrower, the Debtor in this case, is well respected among those that study transactions of this sort.
The following are types of wrong performed upon borrowers, at least some of which occurred
with the Debtor/Plaintiff in this case, by Loan Brokers and Originators (Lenders in the original deeds
of trust), which were acts in furtherance of an overall fraud and conversion scheme that were necessary
to its success, because without a large number of loans doomed to fail from the start the main planner
and major Participants could not be certain that the Mortgage Pools as a whole would fail.
a) The fact that Borrowers paid as much as double what the homes were
actually worth, due to a real estate market that was artificially inflated because of
the wealth of investment dollars looking for a home following the bursting of the
dot.com bubble, followed by what amounts to an economic depression for the
working poor. Borrowers can't afford the payments and they are losing their homes,
and the unbelievable abundance of foreclosures shows the extent to which any
defect in character they may have is common to large numbers of persons.
Appraisal values were often over-inflated even above the artificially high values
provided by the market and appraisers were advised they would not receive further
business unless they cooperated.
b) Borrowers were mislead as to what the monthly payments would be a few
years into the loans.
c) In more extreme cases, Borrowers were often offered teaser rates that they
qualified for, but which greatly increased within a very short period of time.
d) There was so much investment money looking for someone to borrow it that could
sign a note during this time, that loans were pushed at people with
persuasive and high pressure tactics;
e) Borrowers were advised that they could afford a much nicer home then they
really could. It appears hard to resist a home that is much nicer than thought affordable,
when someone that appears to be a reputable professional assures them they can afford
it. Optimism and wishful thinking overpower reason.
f) Loan brokers were pushed to offer loans that were on worse terms than
the borrower could qualify for. Sometimes they received higher commissions, often
in secret, for getting people to take out loans on terms that were less beneficial then
a loan that Borrowers would have qualified for. And sometimes the only loan products
that loan brokers had available to them were those containing unfavorable terms.

g) Borrowers were advised that they did not have to worry about the payments being unaffordable in the future, because they would be definitely be able to refinance again at
that point, because the market was so solid.
h) Underwriters were pushed by supervisors to pass through bad loans, many of which
were obviously doomed to fail from the start.
Under the Truth in Lending Act, Regulation Z, and the Real Estate Settlement Procedures Act,
these undisclosed yield spread premiums are a liability of Participants in the securitization chain, including the loan Originator and all Participants owed to the Homeowner/Debtor. In my opinion, this
disclosure does not appear on any of the Homeowner/Debtor's documents identifying the parties participating in fee-splitting or yield spread premiums nor the amounts involved as required by the Truth in
Lending Act and the Real Estate Settlement and Procedures Act. Further, no information appears in
Debtor's closing documentation that would have caused him to inquire about such a premium.
In my opinion, the allegations contained in 21-23 of the Amended Complaint, pertaining to
TILA, RESPA and similar statutes are well taken. Questions as to statute of limitation would not be applicable on a number of theories, including, but not limited to: fraud tolls the statute of limitations; and
until the name of the true creditor, lender, beneficiary is made known to the borrower, the statute of
limitations time frame does not begin to run.
A MBS Pool Trust is not really a true Trust. The Trustee thereof has been involved in a
joint enterprise with the other Participants in the creation of a Financial Product for sale to Investors, the purchasers of Mortgage Bonds. The so-called Pool Trustee is more like an administrator. The first loyalty of the Pool Trustee is not to the Investors, but to the parties to which it
entered into contract with, the Participants. Based on its actions as can be seen over and over
again, it seems it is more interested finding ways not to reimburse the Investors than to find
ways to do so. In the securitization of the loans, the rights of various named mortgagees, assignees and/or Trustees have each been superseded by succeeding conduits including BAC, the socalled Trustee, which is really something of a figure-head. The Trustee of a Mortgage Pool
such as that in this case is more like an administrator than a trustee. The powers of said officer
or Trustee are limited to ONLY what the Certificate Holders authorize. It cannot be overemphasized that the Investors were not signatories to the Securitization Documents, only the
named Participants were. The transaction with the Investor in which they advanced "loan"
money for the subject homeowner's loan product, was consummated most likely before the
transaction with the homeowner or was subject to binding agreements between various Participants in the securitization scheme that pre-dated the transaction with the homeowner. Therefore, the actual and undisclosed Creditor was the Investor who advanced the cash and who was
known by the securitization Participants, and therefore was the only party entitled to claim a
first lien either legally or under equitable subrogation. Accordingly, the only potential party to a
foreclosure wherein the purported creditor alleges financial injury and therefore a right to collect the obligation, enforce the Note or enforce the DOT is either a party who has actually advanced cash and stands to lose money or an authorized representative who can disclose the principal, provide proof of service or notice and show such express, unequivocal and complete authority to perform all acts and make all decisions without condition. In my opinion, any condition placed upon the Trustee to act for the MBS Pool Certificate Holders, including the power to
enter into any compromise, makes The Trustee is something less than the Real Party in Interest
on behalf of the Certificate Holders. For one thing, the certificate holders in either or any of the
named pools might have settled their claims under the procedures set forth in the securitization
documents. IN that case, the special purpose vehicle (i.e., the pool or trust is certainly

dormant and probably dissolved, leaving the Trustee pursuing foreclosure on a home loan that
(a) is not in the pool and (b) is paid off AND in some other pool.
Also, a party must be answerable to the claims, affirmative defenses and counterclaims of the
homeowners for such causes of action or defenses as might be applicable or they would be blocked potentially by collateral estoppel if the court determined the foreclosing party was acting within the scope
of its agency for the Principal, the Certificate Holders.
In my opinion, as above, and with a reasonable degree of factual and legal certainty, the disclosed principals in the securitization chain, up to and including the Pool Trustee, are not the Creditors
nor are they authorized agents for the Creditors, without proof that they have been granted this authority pursuant to the terms of the Securitization documents.
Otherwise, the Participants, including Servicers and Pool Trustees, in my opinion, are interlopers or impostors whose design is to take title to property they have no right to claim, and to enforce
a Note which is evidence of an obligation that is not owed to them but rather to another.
The details of this information, whether the Special Purpose Vehicle still exists, whether the investor has been paid in full through Third Party Payments, are known only to these securitization Participants and the heretofore undisclosed Investors. And the Participants have demonstrated time and time
again that they are not credible. In my opinion the attorneys for the known Securitization Participants
do not have any authority to represent the Creditor, and could not represent them due to the obvious
conflict of interest, to wit: the Investors upon learning that a substantial amount of their advance of
cash was pocketed by the intermediaries and now is left with a mortgage whose nominal value is far
below what was paid, and whose fair market value is far below the nominal value, would have potential
substantial claims against the securitization Participants for fraud, conversion, breach of contract, and
other claims. Fraud upon the investors in relevant to borrowers because it is additional evidence of an
overall fraud and conversion scheme against borrowers, because it tends to show motive and intent in
the fraud and conversion claims made by borrowers.
This concludes this Unsworn Declaration, made under penalty of perjury.
Signed on _June 21, 2010.
___/S/ NEIL F. GARFIELD, ESQ.____________________
Neil Franklin Garfield, Esq.

REFERENCE: NO ORIGINAL NOTE! Crawford v. Washington, (02-9410) 541 U.S. 36 (2004) 147
Wash. 2d 424, 54 P.3d 656
Where is the body?

IN THE SUPREME COURT OF FLORIDA


CASE NO.: 09-1460
IN RE: AMENDMENTS TO RULES
OF CIVIL PROCEDURE AND FORMS FOR USE
WITH RULES OF CIVIL PROCEDURE
COMMENTS OF THE FLORIDA BANKERS ASSOCIATION
The Florida Bankers Association thanks this Honorable Court for the opportunity to
comment on the Emergency Rule and Form Proposals of the Supreme Court Task Force
on Residential Mortgage Foreclosure Cases.
Introduction:
The Florida Bankers Association ("FBA") is one of Florida's oldest trade association. Its
membership is composed of more than 300 banks and financial institutions ranging in
size from small community banks and thrifts, to medium sized banks operating in
several parts of the state, to large regional financial institutions headquartered in Florida
or outside the state. The FBA serves its constituents and the citizens of the state of
Florida by serving as an industry resource to all branches and levels of government in
addressing those issues which affect the delivery of financial services within this state.
{O1456895;1} 2 SUMMARY OF THE COMMENTS
The Supreme Court Task Force on Residential Mortgage Foreclosure Cases ("Task
Force") proposes an amendment to Florida Rule of Civil Procedure 1.110 to require
verification of residential mortgage foreclosure complaints. The proposed rule does not
effectuate its stated goal of deterring plaintiffs that are not entitled to enforce the
underlying obligation from bringing foreclosure actions. Existing and effective law
provides better substantive protection against unauthorized foreclosure suits. Section
673.3091, Florida Statutes, establishes stringent proof standards when the original note
is not available, and requires the court to protect the mortgagor against additional
foreclosure actions. In addition, the courts have ample authority to sanction lawyers and
lenders asserting improper foreclosure claims. This authority is explicit in Florida law
and implicit in the courts' inherent power to sanction bad faith litigation. Finally, the
proposed amendment imposes a substantive condition precedent to foreclosing a
residential mortgage foreclosures and thus appears to violate Florida's constitutional
doctrine of separation of powers.
COMMENTS
I. THE PROPOSED AMENDMENT WILL NOT EFFECTUATE THE DESIRED
GOAL.
The rationale for the proposed amendment is set forth in the proposal for promulgation:
{O1456895;1} 3 This rule change is recommended because of the new economic reality

dealing with mortgage foreclosure cases in an era of securitization. Frequently, the note
has been transferred on multiple occasions prior to the default and filing of the
foreclosure. Plaintiff's status as owner and holder of the note at the time of filing has
become a significant issue in these case, particularly because many firms file lost note
counts as a standard alternative pleading in the complaint. There have been situations
where two different plaintiffs have filed suit on the same note at the same time.
Requiring the plaintiff to verify its ownership of the note at the time of filing provides
incentive to review and ensures that the filing is accurate, ensures that investigation has
been made and that the plaintiff is the owner and holder of the note. This requirement
will reduce confusion and give the trial judges the authority to sanction those who file
without assuring themselves of their authority to do so.
With respect and appreciation for the efforts of the Task Force and its laudable goals, the
proposed amendment will not effectuate the reduction of confusion or give trial judges
any authority they currently lack.
A. Plaintiff's Status as Owner and Holder of the Note.
In actual practice, confusion over who owns and holds the note stems less from the fact
that the note may have been transferred multiple times than it does from the form in
which the note is transferred. It is a reality of commerce that virtually all paper
documents related to a note and mortgage are converted to electronic files almost
immediately after the loan is closed. Individual loans, as electronic data, are compiled
into portfolios which are transferred to the secondary market, frequently as mortgagebacked securities. The records of ownership and payment are maintained by a servicing
agent in an electronic database.{O1456895;1} 4 The reason "many firms file lost note counts as
a standard alternative pleading in the complaint" is because the physical document was
deliberately eliminated to avoid confusion immediately upon its conversion to an
electronic file. See State Street Bank and Trust Company v. Lord, 851 So. 2d 790 (Fla. 4th
DCA 2003). Electronic storage is almost universally acknowledged as safer, more
efficient and less expensive than maintaining the originals in hard copy, which bears the
concomitant costs of physical indexing, archiving and maintaining security. It is a
standard in the industry and becoming the benchmark of modern efficiency across the
spectrum of commerceincluding the court system.
The information reviewed to verify the plaintiff's authority to commence the mortgage
foreclosure action will be drawn from the same database that includes the electronic
document and the record of the event of default. The verification, made "to the best of
[the signing record custodian's] knowledge and belief" will not resolve the need to
establish the lost document.
B. The Process for Re-Establishing the Note Provides Significant Substantive Protection
to the Mortgagor.
The process for re-establishment of a lost or destroyed instrument by law imposes a
strict burden of proof and instructs the court to protect the obligor from multiple suits on
the same instrument. Section 673.3091, Florida Statutes, sets forth the elements a
plaintiff must prove in order to enforce an obligation for which it does not have the

original instrument: {O1456895;1} 5 A person not in possession of an instrument is entitled to


enforce the instrument if: a) person seeking to enforce the instrument was entitled to
enforce the instrument when loss of possession occurred, or has directly or indirectly
acquired ownership of the instrument from a person who was entitled to enforce the
instrument when loss of possession occurred. b) The loss of possession was not the
result of a transfer by the person or a lawful seizure; and c) the person cannot reasonably
obtain possession of the instrument because the instrument was destroyed, its
whereabouts cannot be determined, or it is in the wrongful possession of an unknown
person or a person that cannot be found or is not amenable to service of process. Once
the plaintiff has plead and proved the foregoing, there is an additional judicial
requirement: The court may not enter judgment in favor of the person seeking
enforcement unless it finds that the person required to pay the instrument is
adequately protected against loss that might occur by reason of a claim by another
person to enforce the instrument. Adequate protection may be provided by any
reasonable means.
673.3091(2), Fla. Stat. (emphasis added).1 This protection may be effectuated by any
means satisfactory to the court. It commonly takes the form of a provision in the final
judgment stating that to the extent any obligation of the note is later deemed not to have
been extinguished by merger into the final judgment, the plaintiff has by law accepted
assignment of those obligations. In other words, the
1The legislature amended Section 673.3091, Florida Statutes, in 2004 to address the
issues raised by the State Street court in recognition of the commercial reality that
almost all purchase money notes are electronically stored and assigned in electronic
form. {O1456895;1} 6 plaintiff who enforces a lost or destroyed instrument assumes the risk
that a third party in lawful possession of the original note or with a superior interest
therein will assert that claim. The original obligor has no liability. C. Courts Have
Statutory and Inherent Authority to Sanction Plaintiffs Asserting Claims Not Supported
by Law or Evidence.
Any party seeking to foreclose a mortgage without a good faith beliefbased on
investigation reasonable under the circumstances--in the facts giving rise to the asserted
claim may be sanctioned "upon the court's initiative." 57.105(1), Fla. Stat. This statute,
though somewhat underused by our courts, affords judges the authority to immediately
impose significant penalties for bringing unfounded litigation. Perhaps more significant
is this Court's recent (and appropriate) reaffirmation of a trial court's inherent authority
to sanction litigantsspecifically attorneyswho engage in bad faith and abusive
practice. See Moakely v. Smallwood, 826 So. 2d 221, 223 (Fla. 2002), citing United
States Savings Bank v. Pittman, 80 Fla. 423, 86 So. 567, 572 (1920) (sanctioning
attorney for acting in bad faith in a mortgage foreclosure sale).2
2 The potential for sanctions is in addition to the significant economic deterrence to
bringing unauthorized foreclosure actions. Presuit costs such as title searches and
identification of tenants and/or subordinate lienors, the escalating filing fees and costs of
service (particularly publication service and the concomitant cost of diligent search if the

mortgagor no longer resides in the collateral) significantly raise the cost of filing a suit
in error. {O1456895;1} 7 II. REQUIRING VERIFICATION OF RESIDENTIAL MORTGAGE
FORECLOSURE COMPLAINTS IMPLEMENTS PUBLIC POLICY WITHIN THE
LEGISLATURE'S CONSTITUTIONAL AUTHORITY.
The Task Force Report giving rise to the proposed amendment clearly speaks to a public
policy concern unrelated to the procedural concerns of the courts. The stated purpose
to prevent the filing of multiple suits on the same noteis clearly a matter of public
policy rather than one of court procedure. Requiring verification of a residential
mortgage foreclosure complaint imposes a condition precedent to access to courts that
exceeds the procedural scope of the Florida Rule of Civil Procedure 1.110. In situations
in which verification of complaints or petitions is established as a threshold requirement
for pursuing an action, that requirement is imposed by the legislature. See, e.g.,
702.10, Fla. Stat. (requiring verification of mortgage foreclosure complaint where
plaintiff elects Order to Show Cause procedure.) If public policy favors setting an
evidentiary threshold for access to courts, the legislature must exercise its policy-making
authority.
The only other rule of civil procedure which imposes the duty to verify a petition is a
petition for temporary injunction. Fla. R. Civ. P. 1.610. The rationale for requiring
verification there is clear: The petition itself and any supporting affidavits constitute the
evidence supporting the requested temporary injunction. The court's decision is made
solely on the evidentiary quality of the documents {O1456895;1} 8 before it. That is not the
case here. Verification of the foreclosure complaint will not relieve the plaintiff seeking
to foreclose a residential mortgage of the burden of proving by competent and
substantial evidence that it is the holder of the note secured by the mortgage and entitled
to enforce the mortgagor's obligation.
Verification adds little protection for the mortgagor and, realistically, will not
significantly diminish the burden on the courts. The amendment is not needed or helpful.
CONCLUSION
The Florida Bankers Association recognized the hard work and the laudable goals of the
Supreme Court Task Force on Residential Mortgage Foreclosure Cases. However, it
appears that in the urge to find new ways to address the crisis facing mortgagors and
mortgagees as well as the court system, the Task Force fashioned a new and ineffectual
rule while ignoring the panoply of significant and substantive weapons already provided
by Florida law. The Florida Bankers Association respectfully requests that this
Honorable Court decline to adopt the proposed amendment to Florida Rule of Civil
Procedure 1.110.{O1456895;1} 9
Respectfully submitted,
Florida Bankers Association
___________________________
Alejandro M. Sanchez Virginia B. Townes, Esquire
President and CEO Florida Bar No.: 361879

Florida Bankers Association AKERMAN, SENTERFITT


1001 Thomasville Road, Suite 201 420 South Orange Avenue
Suite 201 Suite 1200 (32801)
Tallahassee, FL 32303 Post Office Box 231
Phone: (850) 224-2265 Orlando, FL 32802
Fax: (850) 224-2423 Phone: (407) 423-4000
asanchez@floridabankers.com Fax: (407) 843-6610
virginia.townes@akerman.com
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing comments have been
served on The Honorable Jennifer D. Bailey, Task Force Chair, 73 W. Flagler Street,
Suite 1307, Miami, Florida 33130-4764, this 28th day of September, 2009.
___________________________
Virginia Townes, Esquire
Florida Bar No. 361879

BRIEF IN SUPPORT
THE GOVERNMENT-SPONSORED ENTERPRISES CAN RECLAIM THE
MONEY SCAMMED
FROM THEM BY THE BANKS: THEY ARE GROSSLY NEGLIGENT IN
FAILING TO DO SO
Both the principal sum and the illegal profits generated by the bank can theoretically be reclaimed by
Fannie Mae and Freddie Mac (which, given the huge gaps in the accounts of these and other
Government-Sponsored Enterprises, they urgently need to do), since it was their funds that were
obtained by fraud in the first place. These can be recovered with the Qui Tam Act.
Of course we are now well and truly looking through the Looking-Glass, because Fannie Mae, Freddie
Mac, the Federal Home Loan Bank System and other relevant Government-Sponsored Enterprises (or
GSEs) and the banks themselves are all actually government agencies although the double-minded
phrase Government-Sponsored Enterprise itself gives the lie to such obfuscation and the banks are
independent organizations as well as being supervised government agencies.
The GSEs cannot operate in the private sector and at the same time refrain from seeking the
remedies due to them when they have been defrauded: and officials in Government who may seek to
restrain them from so doing would be acting illegally. In any case, the books still need to be balanced,
but thats a problem for Fannie Mae and Freddie Mac; its not the buyers/foreclosure victim's problem.
CASE LAW HAS PROTECTED BORROWERS WHO WERE MISLED
US case law already exists in which the banks concerned have been obliged by the courts to pay back
all the money paid in by borrowers who were not informed in writing at the outset, that their payments
would rise as soon as the Federal Reserve raised interest rates, so that through the banks failure to

disclose, the contracts were shown to have been illegal.


The banks appealed against this outcome, and lost. As a consequence, thousands of homeowners had
millions in payments and fees returned to them. However the case in question did NOT bring up any of
the issues discussed in our analysis.
When loans are extended, the party extending the loan MUST provide FULL DISCLOSURE, or the
transaction is illegal. Another thorny problem facing banks is that once a banking corporation has
committed an ultra vires action, their charter is required to be suspended and they are obliged to cease
all business transactions immediately until reinstated by the State banking authority.
While in this condition, banks may not enter into any contracts, nor may they sue in court. What, then,
does this mean for ALL THE BUSINESS that they have conducted SINCE the first ultra vires action
was committed?
Reference:
January 15, 2010

Exclusive: U.S. Attorney General's 5,000 DOJ Pending


Indictments Targeting Financial Fraud, And National Security
http://www.familysecuritymatters.org/publications/id.5273/pub_detail.asp
C. Austin Burrell
TOP SECRET BANKERS MANUAL
http://cirrus.mail-list.com/paycheck-piracy/Bankers-Manual-Top-Secret.pdf
David Mack - Witness

MEMORANDUM OF LAW BANK FRAUD


I have, through research, learned the following to be true and most likely applies to me, which is the
reason I have requested and demanded the bank to validate their claims and produce pursuant to
applicable law. This MEMORANDUM serves to support my suspicions and identify criminal facts. The
bank allegedly loaned me their money when in reality they deposited (credited) my promissory note
and used that deposit to pay my seller. Source and reasoning after reviewing the original file clearly
shows this fact, which is the reason for the bank refusing and failing to validate and to produce as
stipulated by law. However, the truth is out and there is plenty of law backing up the fact that the bank is
criminal.
FORECLOSURE ACTIONS AND CASES LAWFULLY DISMISSED (NOT LETTING BANK
FORECLOSE WITHOUT LAWFUL VALIDATION AND PRODUCTION) BY THE COURTS DUE
TO BANK'S FAILURE TO VALIDATE & PRODUCE AS STIPULATED BY LAW AND
COMMITTED BANK FRAUD AGAINST THE BORROWER
FROM THE BAR ASSOCIATION'S OFFICIAL WEB SITE :... this Court has the responsibility to
assure itself that the foreclosure plaintiffs have standing and that subject matter jurisdiction requirements
are met at the time the complaint is filed. Even without the concerns raised by the documents the plaintiffs

have filed, there is reason to question the existence of standing and the jurisdictional amount. Over 30
cases are covered by the BAR at:
http://www.abanet.org/rpte/publications/ereport/2008/3/Ohioforeclosures.pdf
A national bank has no power to lend its credit to any person or corporation . . . Bowen v. Needles Nat.
Bank, 94 F 925 36 CCA 553, certiorari denied in 20 S.Ct 1024, 176 US 682, 44 LED 637.
Countrywide Home Loans, Inc. v Taylor - Mayer, J., Supreme Court, Suffolk County / 9/07
American Brokers Conduit v. ZAMALLOA - Judge SCHACK 28Jan2008
Aurora Loan Services v. MACPHERSON - Judge FARNETI 1 1Mar2008
A bank may not lend its credit to another even though such a transaction turns out to have been of benefit
to the bank, and in support of this a list of cases might be cited, which-would look like a catalog of ships.
[Emphasis added] Norton Grocery Co. v. Peoples Nat. Bank, 144 SE 505. 151 Va 195.
In the federal courts, it is well established that a national bank has not power to lend its credit to another by
becoming surety, indorser, or guarantor for him.' Farmers and Miners Bank v. Bluefield Nat 'l Bank, 11 F
2d 83, 271 U.S. 669.
Bank of New York v. SINGH - Judge KURTZ 14Dec2007
Bank of New York v. TORRES - Judge COSTELLO 11Mar2008
Bank of New York v. OROSCO - Judge SCHACK 19Nov2007
Citi Mortgage Inc. v. BROWN - Judge FARNETI 13Mar2008
The doctrine of ultra vires is a most powerful weapon to keep private corporations within their legitimate
spheres and to punish them for violations of their corporate charters, and it probably is not invoked too
often. Zinc Carbonate Co. v. First National Bank, 103 Wis 125, 79 NW 229. American Express Co. v.
Citizens State Bank, 194 NW 430.
"It has been settled beyond controversy that a national bank, under federal Law being limited in its powers
and capacity, cannot lend its credit by guaranteeing the debts of another. All such contracts entered into
by its officers are ultra vires . . ." Howard & Foster Co. v. Citizens Nat'l Bank of Union, 133 SC 202,
130 SE 759(1926).
. . . checks, drafts, money orders, and bank notes are not lawful money of the United States ... State v.
Neilon, 73 Pac 324, 43 Ore 168.
American Brokers Conduit v. ZAMALLOA - Judge SCHACK 11 Sep2007
Countrywide Mortgage v. BERLIUK - Judge COSTELLO 1 3Mar2008
Deutsche Bank v. Barnes-Judgment Entry
Deutsche Bank v. Barnes-Withdrawal of Objections and Motion to Dismiss
Deutsche Bank v. ALEMANY Judge COSTELLO 07Jan2008

Deutsche Bank v. Benjamin CRUZ Judge KURTZ 21May2008


Deutsche Bank v. Yobanna CRUZ - Judge KURTZ 21May2008
Deutsche Bank v. CABAROY - Judge COSTELLO 02Apr2008
Deutsche Bank v. CASTELLANOS / 2007NYSlipOp50978U/- Judge SCHACK 11May2007
Deutsche Bank v. CASTELLANOS/ 2008NYSlipOp50033U/ - Judge SCHACK 14Jan 2008
HSBC v. Valentin - Judge SCHACK calls them liars and dismisses WITH prejudice **
Deutsche Bank v. CLOUDEN / 2007NYSlipOp5 1 767U/ Judge SCHACK 1 8Sep2007
Deutsche Bank v. EZAGUI - Judge SCHACK 21Dec2007
Deutsche Bank v. GRANT - Judge SCHACK 25Apr2008
Deutsche Bank v. HARRIS - Judge SCHACK 05Feb2008
Deutsche Bank v. LaCrosse, Cede, DTC Complaint
Deutsche Bank v. NICHOLLS - Judge KURTZ 21May2008
Deutsche Bank v. RYAN - Judge KURTZ 29Jan2008
Deutsche Bank v. SAMPSON - Judge KURTZ 16Jan2008
Deutsche v. Marche - Order to Show Cause to VACATE Judgment of Foreclosure 11 June2009
GMAC Mortgage LLC v. MATTHEWS - Judge KURTZ 10Jan2008
GMAC Mortgage LLC v. SERAFINE - Judge COSTELLO 08Jan2008
HSBC Bank USA NA v. CIPRIANI Judge COSTELLO 08Jan2008
HSBC Bank USA NA v. JACK - Judge COSTELLO 02Apr2008
IndyMac Bank FSB v. RODNEY-ROSS - Judge KURTZ 15Jan2008
LaSalleBank NA v. CHARLEUS - Judge KURTZ 03Jan2008
LaSalleBank NA v. SMALLS - Judge KURTZ 03Jan2008
PHH Mortgage Corp v. BARBER - Judge KURTZ 15Jan2008
Property Asset Management v. HUAYTA 05Dec2007
Rivera, In Re Services LLC v. SATTAR / 2007NYSlipOp5 1 895U/ - Judge SCHACK 09Oct2007
USBank NA v. AUGUSTE - Judge KURTZ 27Nov2007
USBank NA v. GRANT - Judge KURTZ 14Dec2007
USBank NA v. ROUNDTREE - Judge BURKE 11Oct2007
USBank NA v. VILLARUEL - Judge KURTZ 01Feb2008
Wells Fargo Bank NA v. HAMPTON - Judge KURTZ 03 Jan2008
Wells Fargo, Litton Loan v. Farmer WITH PREJUDICE Judge Schack June2008
Wells Fargo v. Reyes WITH PREJUDICE, Fraud on Court & Sanctions Judge Schack June2008

Deutsche Bank v. Peabody Judge Nolan (Regulation Z)


Indymac Bank,FSB v. Boyd - Schack J. January 2009
Indymac Bank, FSB v. Bethley - Schack, J. February 2009 ( The tale of many hats)
LaSalle Bank Natl. Assn. v Ahearn - Appellate Division, Third Department (Pro Se)
NEW JERSEY COURT DISMISSES FORECLOSURE FILED BY DEUTSCHE BANK FOR FAILURE
TO PRODUCE THE NOTE
Whittiker v. Deutsche (MEMORANDUM IN OPPOSITION TO DEFENDANTS MOTIONS TO
DISMISS) Whittiker (PLAINTIFFS OBJECTIONS TO REPORT AND RECOMMENDATION) Whittiker
(DEFENDANT WELTMAN, WEINBERG & REIS CO., LPAS RESPONSE TO PLAINTIFFS
OBJECTIONS TO REPORT AND RECOMMENDATION) Whittiker (RESPONSE TO PLAINTIFFS
OBJECTIONS TO MAGISTRATE JUDGE PEARSONS REPORT AND RECOMMENDATION TO
GRANT ITS MOTION TO DISMISS)
Novastar v. Snyder * (lack of standing) Snyder (motion to amend w/prejudice) Snyder (response to amend)
Washington Mutual v. City of Cleveland (WAMU's motion to dismiss)
2008-Ohio-1177; DLJ Mtge. Capital, Inc. v. Parsons (SJ Reversed for lack of standing)
Everhome v. Rowland
Deutsche - Class Action (RICO) Bank of New York v. TORRES - Judge
COSTELLO 1 1Mar2008
37.
Deutsche Bank Answer Whittiker
38.
Manley Answer Whittiker
39.
Justice Arthur M. Schack
40.
Judge Holschuh- Show cause
41.
Judge Holschuh- Dismissals
42.
Judge Boyko's Deutsche Bank Foreclosures
43.
Rose Complaint for Foreclosure | Rose Dismissals
44.
O'Malley Dismissals
45.
City Of Cleveland v. Banks
46.
Dowd Dismissal
47.
EMC can't find the note
48.

Ocwen can't find the note


49.
US Bank can't find the Note
50.
US Bank - No Note
51.
Key Bank - No Note
52.
Wells Fargo - Defective pleading
Complaint in Jack v. MERS, Citi, Deutsche
GMAC v. Marsh
Massachusetts : Robin Hayes v. Deutsche Bank
Florida: Deutsche Bank's Summary Judgment Denied
Texas: MERS v. Young / 2nd Circuit Court of Appeals - PANEL: LIVINGSTON, DAUPHINOT, and
MCCOY, JJ.
Nevada: MERS crushed: In re Mitchell
"Neither, as included in its powers not incidental to them, is it a part of a bank's business to lend its credit. If
a bank could lend its credit as well as its money, it might, if it received compensation and was careful to put
its name only to solid paper, make a great deal more than any lawful interest on its money would amount to.
If not careful, the power would be the mother of panics, . . . Indeed, lending credit is the exact opposite of
lending money, which is the real business of a bank, for while the latter creates a liability in favor of the
bank, the former gives rise to a liability of the bank to another. I Morse. Banks and Banking 5th Ed. Sec 65;
Magee, Banks and Banking, 3rd Ed. Sec 248." American Express Co. v. Citizens State Bank, 194 NW 429.
"It is not within those statutory powers for a national bank, even though solvent, to lend its credit to another
in any of the various ways in which that might be done." Federal Intermediate Credit Bank v. L 'Herrison,
33 F 2d 841, 842 (1929).
"There is no doubt but what the law is that a national bank cannot lend its credit or become an
accommodation endorser." National Bank of Commerce v. Atkinson, 55 E 471.
"A bank can lend its money, but not its credit." First Nat'l Bank of Tallapoosa v. Monroe . 135 Ga 614, 69
SE 1124, 32 LRA (NS) 550.
".. . the bank is allowed to hold money upon personal security; but it must be money that it loans, not its
credit." Seligman v. Charlottesville Nat. Bank, 3 Hughes 647, Fed Case No.12, 642, 1039.
"A loan may be defined as the delivery by one party to, and the receipt by another party of, a sum of money
upon an agreement, express or implied, to repay the sum with or without interest." Parsons v. Fox 179 Ga
605, 176 SE 644. Also see Kirkland v. Bailey, 155 SE 2d 701 and United States v. Neifert White Co., 247
Fed Supp 878, 879.
"The word 'money' in its usual and ordinary acceptation means gold, silver, or paper money used as a
circulating medium of exchange . . ." Lane v. Railey 280 Ky 319, 133 SW 2d 75.

"A promise to pay cannot, by argument, however ingenious, be made the equivalent of actual payment ..."
Christensen v. Beebe, 91 P 133, 32 Utah 406.
A bank is not the holder in due course upon merely crediting the depositors account. Bankers Trust v.
Nagler, 229 NYS 2d 142, 143.
"A check is merely an order on a bank to pay money." Young v. Hembree, 73 P2d 393
"Any false representation of material facts made with knowledge of falsity and with intent that it shall be
acted on by another in entering into contract, and which is so acted upon, constitutes 'fraud,' and entitles
party deceived to avoid contract or recover damages." Barnsdall Refining Corn. v. Birnam Wood Oil Co. 92
F 26 817.
"Any conduct capable of being turned into a statement of fact is representation. There is no distinction
between misrepresentations effected by words and misrepresentations effected by other acts." Leonard v.
Springer 197 Ill 532. 64 NE 301.
If any part of the consideration for a promise be illegal, or if there are several considerations for an
unseverable promise one of which is illegal, the promise, whether written or oral, is wholly void, as it is
impossible to say what part or which one of the considerations induced the promise. Menominee River Co.
v. Augustus Spies L & C Co.,147 Wis 559-572; 132 NW 1122.
The contract is void if it is only in part connected with the illegal transaction and the promise single or
entire. Guardian Agency v. Guardian Mut. Savings Bank, 227 Wis 550, 279 NW 83.
It is not necessary for recision of a contract that the party making the misrepresentation should have known
that it was false, but recovery is allowed even though misrepresentation is innocently made, because it
would be unjust to allow one who made false representations, even innocently, to retain the fruits of a
bargain induced by such representations. Whipp v. Iverson, 43 Wis 2d 166.
"Each Federal Reserve bank is a separate corporation owned by commercial banks in its region ..." Lewis v.
United States, 680 F 20 1239 (1982).
HOW AND WHY THE BANKS SECRETLY AND QUICKLY
SWITCH CURRENCY
NOT FULFILL THE LOAN AGREEMENT (THE CONTRACT)
OBTAIN YOUR MORTGAGE NOTE WITHOUT INVESTING ONE CENT
TO FORCE YOU TO LABOR TO PAY INTEREST ON THE CONTRACT
TO REFUSE TO FULFILL THE CONTRACT
TO MAKE YOU A DEPOSITOR (NOT A BORROWER)
The oldest scheme throughout History is the changing of currency. Remember the moneychangers in the
temple (BIBLE)? "If you lend money to My people, to the poor among you, you are not to act as a
creditor to him; you shall not charge him interest Exodus 22:25. They changed currency as a business.
You would have to convert to Temple currency in order to buy an animal for sacrifice. The Temple
Merchants made money by the exchange. The Bible calls it unjust weights and measures, and judges it to be

an abomination. Jesus cleared the Temple of these abominations. Our Christian Founding Fathers did the
same. Ben Franklin said in his autobiography, "... the inability of the colonists to get the power to issue their
own money permanently out of the hands of King George III and the international bankers was the prime
reason for the revolutionary war. The year 1913 was the third attempt by the European bankers to get their
system back in place within the United States of America. President Andrew Jackson ended the second
attempt in 1836. What they could not win militarily in the Revolutionary War they attempted to accomplish
by a banking money scheme which allowed the European Banks to own the mortgages on nearly every
home, car, farm, ranch, and business at no cost to the bank. Requiring We the People to pay interest on
the equity we lost and the bank got free.
Today people believe that cash and coins back up the all checks. If you deposit $100 of cash, the bank
records the cash as a bank asset (debit) and credits a Demand Deposit Account (DDA), saying that the bank
owes you $100. For the $100 liability the bank owes you, you may receive cash or write a check. If you
write a $100 check, the $100 liability your bank owes you is transferred to another bank and that bank owes
$100 to the person you wrote the check to. That person can write a $100 check or receive cash. So far there
is no problem.
Remember one thing however, for the check to be valid there must first be a deposit of money to the banks
ASSETS, to make the check (liability) good. The liability is like a HOLDING ACCOUNT claiming that
money was deposited to make the check good.

Here then, is how the switch in currency takes place


The bank advertises it loans money. The bank says, "sign here". However the bank never signs because
they know they are not going to lend you theirs, or other depositor's money. Under the law of bankruptcy of
a nation, the mortgage note acts like money. The bank makes it look like a loan but it is not. It is an
exchange.
The bank receives the equity in the home you are buying, for free, in exchange for an unpaid bank
liability that the bank cannot pay, without returning the mortgage note. If the bank had fulfilled its
end of the contract, the bank could not have received the equity in your home for free.

The bank receives your mortgage note without investing or risking one-cent.
The bank sells the mortgage note, receives cash or an asset that can then be converted to cash and still
refuses to loan you their or other depositors' money or pay the liability it owes you. On a $100,000
loan the bank does not give up $100,000. The bank receives $100,000 in cash or an asset and issues a
$100,000 liability (check) the bank has no intention of paying. The $100,000 the bank received in the
alleged loan is the equity (lien on property) the bank received without investment, and it is the $100,000 the
individual lost in equity to the bank. The $100,000 equity the individual lost to the bank, which demands
he/she repay plus interest.
The loan agreement the bank told you to sign said LOAN. The bank broke that agreement. The bank now
owns the mortgage note without loaning anything. The bank then deposited the mortgage note in an account
they opened under your name without your authorization or knowledge. The bank withdrew the money
without your authorization or knowledge using a forged signature. The bank then claimed the money was
the banks property, which is a fraudulent conversion.
The mortgage note was deposited or debited (asset) and credited to a Direct Deposit Account, (DDA)
(liability). The credit to Direct Deposit Account (liability) was used from which to issue the check. The
bank just switched the currency. The bank demands that you cannot use the same currency, which the bank
deposited (promissory notes or mortgage notes) to discharge your mortgage note. The bank refuses to loan
you other depositors' money, or pay the liability it owes you for having deposited your mortgage note.

To pay this liability the bank must return the mortgage note to you. However instead of the bank paying the
liability it owes you, the bank demands you use these unpaid bank liabilities, created in the alleged loan
process, as the new currency. Now you must labor to earn the bank currency (unpaid liabilities created in
the alleged loan process) to pay back the bank. What the bank received for free, the individual lost in equity.
If you tried to repay the bank in like kind currency, (which the bank deposited without your authorization to
create the check they issued you), then the bank claims the promissory note is not money. They want
payment to be in legal tender (check book money).
The mortgage note is the money the bank uses to buy your property in the foreclosure. They get your real
property at no cost. If they accept your promissory note to discharge the mortgage note, the bank can use
the promissory note to buy your home if you sell it. Their problem is, the promissory note stops the interest
and there is no lien on the property. If you sell the home before the bank can find out and use the
promissory note to buy the home, the bank lost. The bank claims they have not bought the home at no cost.
Question is, what right does the bank have to receive the mortgage note at no cost in direct violation of the
contract they wrote and refused to sign or fulfill.
By demanding that the bank fulfill the contract and not change the currency, the bank must deposit your
second promissory note to create check book money to end the fraud, putting everyone back in the same
position they where, prior to the fraud, in the first place. Then all the homes, farms, ranches, cars and
businesses in this country would be redeemed and the equity returned to the rightful owners (the people). If
not, every time the homes are refinanced the banks get the equity for free. You and I must labor 20 to 30
years full time as the bankers sit behind their desks, laughing at us because we are too stupid to figure it out
or to force them to fulfill their contract.
The $100,000 created inflation and this increases the equity value of the homes. On an average homes are
refinanced every 7 1/2 years. When the home is refinanced the bank again receives the equity for free. What
the bank receives for free the alleged borrower loses to the bank.
According to the Federal Reserve Banks own book of Richmond, Va. titled YOUR MONEY page seven,
...demand deposit accounts are not legal tender... If a promissory note is legal tender, the bank must
accept it to discharge the mortgage note. The bank changed the currency from the money deposited,
(mortgage note) to check book money (liability the bank owes for the mortgage note deposited) forcing us
to labor to pay interest on the equity, in real property (real estate) the bank received for free. This cost was
not disclosed in NOTICE TO CUSTOMER REQUIRED BY FEDERAL LAW, Federal Reserve
Regulation Z.
When a bank says they gave you credit, they mean they credited your transaction account, leaving you with
the presumption that they deposited other depositors money in the account. The fact is they deposited your
money (mortgage note). The bank cannot claim they own the mortgage note until they loan you their
money. If bank deposits your money, they are to credit a Demand Deposit Account under your name, so you
can write checks and spend your money. In this case they claim your money is their money. Ask a criminal
attorney what happens in a fraudulent conversion of your funds to the bank's use and benefit, without your
signature or authorization.
What the banks could not win voluntarily, through deception they received for free. Several presidents, John
Adams, Thomas Jefferson, and Abraham Lincoln believed that banker capitalism was more dangerous to
our liberties than standing armies. U.S. President James A. Garfield said, Whoever controls the money in
any country is absolute master of industry and commerce."
The Chicago Federal Reserve Bank's book,Modern Money Mechanics, explains exactly how the banks
expand and contract the checkbook money supply forcing people into foreclosure. This could never happen
if contracts were not violated and if we received equal protection under the law of Contract.
HOW THE BANK SWITCHES THE CURRENCY This is a repeat worded differently to be sure you

understand it. You must understand the currency switch.


The bank does not loan money. The bank merely switches the currency. The alleged borrower created
money or currency by simply signing the mortgage note. The bank does not sign the mortgage note because
they know they will not loan you their money. The mortgage note acts like money. To make it look like the
bank loaned you money the bank deposits your mortgage note (lien on property) as money from which to
issue a check. No money was loaned to legally fulfill the contract for the bank to own the mortgage note.
By doing this, the bank received the lien on the property without risking or using one cent. The people lost
the equity in their homes and farms to the bank and now they must labor to pay interest on the property,
which the bank got for free and they lost.
The check is not money, the check merely transfers money and by transferring money the check acts LIKE
money. The money deposited is the mortgage note. If the bank never fulfills the contract to loan money,
then the bank does not own the mortgage note. The deposited mortgage note is still your money and the
checking account they set up in your name, which they credited, from which to issue the check, is still your
money. They only returned your money in the form of a check. Why do you have to fulfill your end of the
agreement if the bank refuses to fulfill their end of the agreement? If the bank does not loan you their
money they have not fulfilled the agreement, the contract is void.
You created currency by simply signing the mortgage note. The mortgage note has value because of the
lien on the property and because of the fact that you are to repay the loan. The bank deposits the mortgage
note (currency) to create a check (currency, bank money). Both currencies cost nothing to create. By law the
bank cannot create currency (bank money, a check) without first depositing currency, (mortgage note) or
legal tender. For the check to be valid there must be mortgage note or bank money as legal tender, but the
bank accepted currency (mortgage note) as a deposit without telling you and without your authorization.
The bank withdrew your money, which they deposited without telling you and withdrew it without your
signature, in a fraudulent conversion scheme, which can land the bankers in jail but is played out in every
City and Town in this nation on a daily basis. Without loaning you money, the bank deposits your
money (mortgage note), withdraws it and claims it is the bank's money and that it is their money they
loaned you.
It is not a loan, it is merely an exchange of one currency for another, they'll owe you the money, which they
claimed they were to loan you. If they do not loan the money and merely exchange one currency for
another, the bank receives the lien on your property for free. What they get for free you lost and must labor
to pay back at interest.
If the banks loaned you legal tender, they could not receive the liens on nearly every home, car, farm, and
business for free. The people would still own the value of their homes. The bank must sell your currency
(mortgage note) for legal tender so if you use the bank's currency (bank money), and want to convert
currency (bank money) to legal tender they will be able to make it appear that the currency (bank money) is
backed by legal tender. The bank's currency (bank money) has no value without your currency (mortgage
note). The bank cannot sell your currency (mortgage note) without fulfilling the contract by loaning you
their money. They never loaned money, they merely exchanged one currency for another. The bank received
your currency for free, without making any loan or fulfilling the contract, changing the cost and the risk of
the contract wherein they refused to sign, knowing that it is a change of currency and not a loan.
If you use currency (mortgage note), the same currency the bank deposited to create currency (bank
money), to pay the loan, the bank rejects it and says you must use currency (bank money) or legal tender.
The bank received your currency (mortgage note) and the bank's currency (bank money) for free without
using legal tender and without loaning money thereby refusing to fulfill the contract. Now the bank
switches the currency without loaning money and demands to receive your labor to pay what was not
loaned or the bank will use your currency (mortgage note) to buy your home in foreclosure, The
Revolutionary war was fought to stop these bank schemes. The bank has a written policy to expand and
contract the currency (bank money), creating recessions, forcing people out of work, allowing the banks to
obtain your property for free.

If the banks loaned legal tender, this would never happen and the home would cost much less. If you allow
someone to obtain liens for free and create a new currency, which is not legal tender and you must use legal
tender to repay. This changes the cost and the risk.
Under this bank scheme, even if everyone in the nation owned their homes and farms debt free, the banks
would soon receive the liens on the property in the loan process. The liens the banks receive for free, are
what the people lost in property, and now must labor to pay interest on. The interest would not be paid if the
banks fulfilled the contract they wrote. If there is equal protection under the law and contract, you could get
the mortgage note back without further labor. Why should the bank get your mortgage note and your labor
for free when they refuse to fulfill the contract they wrote and told you to sign?
Sorry for the redundancy, but it is important for you to know by heart their shell game, I will continue in
that redundancy as it is imperative that you understand the principle. The following material is case law on
the subject and other related legal issues as well as a summary.

LOGIC AS EVIDENCE
The check was written without deducting funds from Savings Account or Certificate of Deposit allowing
the mortgage note to become the new pool of money owed to Demand Deposit Account, Savings Account,
Certificate of Deposit with Demand Deposit, Savings Account, and/or Certificate of Deposit increasing by
the amount of the mortgage note. In this case the bankers sell the mortgage note for Federal Reserve Bank
Notes or other assets while still owing the liability for the mortgage note sold and without the bank giving
up any- Federal Reserve Bank Notes.
If the bank had to part with Federal Reserve Bank Notes, and without the benefit of checks to hide the
fraudulent conversion of the mortgage note from which it issues the check, the bank fraud would be
exposed.
Federal Reserve Bank Notes are the only money called legal tender. If only Federal Reserve Bank Notes are
deposited for the credit to Demand Deposit Account- Savings Account, Certificate of Deposit, and if the
bank wrote a check for the mortgage note, the check then transfers Federal Reserve Bank Notes and the
bank gives the borrower a bank asset. There is no increase in the check book money supply that exists in the
loan process.
The bank policy is to increase bank liabilities; Demand Deposit Account, Savings Account, Certificate of
Deposit, by the mortgage note. If the mortgage note is money, then the bank never gave up a bank asset.
The bank simply used fraudulent conversion of ownership of the mortgage note. The bank cannot own the
mortgage note until the bank fulfills the contract.
The check is not the money; the money is the deposit that makes the check good. In this case, the mortgage
note is the money from which the check is issued. Who owns the mortgage note when the mortgage note is
deposited? The borrower owns the mortgage note because the bank never paid money for the mortgage note
and never loaned money (bank asset). The bank simply claimed the bank owned the mortgage note without
paying for it and deposited the mortgage note from which the check was issued. This is fraudulent
conversion. The bank risked nothing! Not even one penny was invested. They never took money out of any
account, in order to own the mortgage note, as proven by the bookkeeping entries, financial ratios, the
balance sheet, and of course the bank's literature. The bank simply never complied with the contract.
If the mortgage note is not money, then the check is check kiting and the bank is insolvent and the bank still
never paid. If the mortgage note is money, the bank took our money without showing the deposit, and
without paying for it, which is fraudulent conversion. The bank claimed it owned the mortgage note without
paying for it, then sold the mortgage note, took the cash and never used the cash to pay the liability it owed
for the check the bank issued. The liability means that the bank still owes the money. The bank must return
the mortgage note or the cash it received in the sale, in order to pay the liability. Even if the bank did this,

the bank still never loaned us the bank's money, which is what 'loan' means. The check is not money but
merely an order to pay money. If the mortgage note is money then the bank must pay the check by returning
the mortgage note.
The only way the bank can pay Federal Reserve Bank Notes for the check issued is to sell the mortgage
note for Federal Reserve Bank Notes. Federal Reserve Bank Notes are non-redeemable in violation of the
UCC. The bank forces us to trade in non-redeemable private bank notes of which the bank refuses to pay
the liability owed. When we present the Federal Reserve Bank Notes for payment the bank just gives us
back another Federal Reserve Bank Note which the bank paid 2 1/2 cents for per bill regardless of
denomination.

What a profit for the bank!


The check issued can only be redeemed in Federal Reserve Bank Notes, which the bank obtained by selling
the mortgage note that they paid nothing for.
The bank forces us to trade in bank liabilities, which they never redeem in an asset. We the people are
forced to give up our assets to the bank for free, and without cost to the bank. This is fraudulent conversion
making the contract, which the bank created with their policy of bookkeeping entries, illegal and the alleged
contract null and void.
The bank has no right to the mortgage note or to a lien on the property, until the bank performs under the
contract. The bank had less than ten percent of Federal Reserve Bank Notes to back up the bank liabilities
in Demand Deposit Account, Savings Account, or Certificate of Deposit's. A bank liability to pay money is
not money. When we try and repay the bank in like funds (such as is the banks policy to deposit from which
to issue checks) they claim it is not money. The bank's confusing and deceptive trade practices and their
alleged contracts are unconscionable.
SUMMARY OF DAMAGES
The bank made the alleged borrower a depositor by depositing a $100,000 negotiable instrument, which the
bank sold or had available to sell for approximately $100,000 in legal tender. The bank did not credit the
borrower's transaction account showing that the bank owed the borrower the $100,000. Rather the bank
claimed that the alleged borrower owed the bank the $100,000, then placed a lien on the borrower's real
property for $100,000 and demanded loan payments or the bank would foreclose.
The bank deposited a non-legal tender negotiable instrument and exchanged it for another non legal tender
check, which traded like money, using the deposited negotiable instrument as the money deposited. The
bank changed the currency without the borrower's authorization. First by depositing non legal tender from
which to issue a check (which is non-legal tender) and using the negotiable instrument (your mortgage
note), to exchange for legal tender, the bank needed to make the check appear to be backed by legal tender.
No loan ever took place. Which shell hides the little pea?
The transaction that took place was merely a change of currency (without authorization), a negotiable
instrument for a check. The negotiable instrument is the money, which can be exchanged for legal tender to
make the check good. An exchange is not a loan. The bank exchanged $100,000 for $100,000. There was no
need to go to the bank for any money. The customer (alleged borrower) did not receive a loan, the alleged
borrower lost $100,000 in value to the bank, which the bank kept and recorded as a bank asset and never
loaned any of the bank's money.
In this example, the damages are $100,000 plus interest payments, which the bank demanded by mail. The
bank illegally placed a lien on the property and then threatened to foreclose, further damaging the alleged
borrower, if the payments were not made. A depositor is owed money for the deposit and the alleged
borrower is owed money for the loan the bank never made and yet placed a lien on the real property
demanding payment.

Damages exist in that the bank refuses to loan their money. The bank denies the alleged borrower equal
protection under the law and contract, by merely exchanging one currency for another and refusing
repayment in the same type of currency deposited. The bank refused to fulfill the contract by not loaning the
money, and by the bank refusing to be repaid in the same currency, which they deposited as an exchange for
another currency. A debt tender offered and refused is a debt paid to the extent of the offer. The bank has no
authorization to alter the alleged contract and to refuse to perform by not loaning money, by changing the
currency and then refusing repayment in what the bank has a written policy to deposit.
The seller of the home received a check. The money deposited for the check issued came from the borrower
not the bank. The bank has no right to the mortgage note until the bank performs by loaning the money.
In the transaction the bank was to loan legal tender to the borrower, in order for the bank to secure a lien.
The bank never made the loan, but kept the mortgage note the alleged borrower signed. This allowed the
bank to obtain the equity in the property (by a lien) and transfer the wealth of the property to the bank
without the bank's investment, loan, or risk of money. Then the bank receives the alleged borrower's labor
to pay principal and Usury interest. What the people owned or should have owned debt free, the bank
obtained ownership in, and for free, in exchange for the people receiving a debt, paying interest to the bank,
all because the bank refused to loan money and merely exchanged one currency for another. This places you
in perpetual slavery to the bank because the bank refuses to perform under the contract. The lien forces
payment by threat of foreclosure. The mail is used to extort payment on a contract the bank never fulfilled.
If the bank refuses to perform, then they must return the mortgage note. If the bank wishes to perform, then
they must make the loan. The past payments must be returned because the bank had no right to lien the
property and extort interest payments. The bank has no right to sell a mortgage note for two reasons. The
mortgage note was deposited and the money withdrawn without authorization by using a forged signature
and; two, the contract was never fulfilled. The bank acted without authorization and is involved in a fraud
thereby damaging the alleged borrower.

Excerpts From Modem Money Mechanics Pages 3 & 6


What Makes Money Valuable? In the United States neither paper currency nor deposits have value as
commodities. Intrinsically, a dollar bill is just a piece of paper, deposits merely book entries. Coins do have
some intrinsic value as metal, but generally far less than face value.
Then, bankers discovered that they could make loans merely by giving their promises to pay, or bank notes,
to borrowers, in this way, banks began to create money. More notes could be issued than the gold and coin
on hand because only a portion of the notes outstanding would be presented for payment at any one time.
Enough metallic money had to be kept on hand, of course, to redeem whatever volume of notes was
presented for payment.
Transaction deposits are the modem counterpart of bank notes. It was a small step from printing notes to
making book entries crediting deposits of borrowers, which the borrowers in turn could "spend" by writing
checks, thereby "printing" their own money.

Notes, exchange just like checks.


How do open market purchases add to bank reserves and deposits? Suppose the Federal Reserve System,
through its trading desk at the Federal Reserve Bank of New York, buys $10,000 of Treasury bills from a
dealer in U.S. government securities. In today's world of Computer financial transactions, the Federal
Reserve Bank pays for the securities with an "electronic" check drawn on itself. Via its "Fedwire" transfer
network, the Federal Reserve notifies the dealer's designated bank (Bank A) that payment for the securities
should be credited to (deposited in) the dealer's account at Bank A. At the same time, Bank A's reserve
account at the Federal Reserve is credited for the amount of the securities purchased. The Federal Reserve

System has added $10,000 of securities to its assets, which it has paid for, in effect, by creating a liability
on itself in the form of bank reserve balances. These reserves on Bank A's books are matched by $10,000 of
the dealer's deposits that did not exist before.
If business is active, the banks with excess reserves probably will have opportunities to loan the $9,000. Of
course, they do not really pay out loans from money they receive as deposits. If they did this, no additional
money would be created. What they do when they make loans is to accept promissory notes in exchange for
credits to tile borrower's transaction accounts. Loans (assets) and deposits (liabilities) both rise by $9,000.
Reserves are unchanged by the loan transactions. But the deposit credits constitute new additions to the
total deposits of the banking system.
PROOF BANKS DEPOSIT NOTES AND ISSUE BANK CHECKS. THE CHECKS ARE ONLY AS
GOOD AS THE PROMISSORY NOTE. NEARLY ALL BANK CHECKS ARE CREATED FROM
PRIVATE NOTES. FEDERAL RESERVE BANK NOTES ARE A PRIVATE CORPORATE NOTE
(Chapter 48, 48 Stat 112) WE USE NOTES TO DISCHARGE NOTES.
Excerpt from booklet Your Money, page 7: Other M1 Money
While demand deposits, travelers checks, and interest-bearing accounts with unlimited checking authority
are not legal tender, they are usually acceptable in payment for purchases of goods and services.
The booklet, Your Money, is distributed free of charge. Additional copies may be obtained by writing to:
Federal Reserve Bank of Richmond Public Services Department P.O. Box 27622 Richmond, Virginia
23261
CREDIT LOANS AND VOID CONTRACTS: CASE LAW
In the federal courts, it is well established that a national bank has not power to lend its credit to another by
becoming surety, indorser, or guarantor for him.' Farmers and Miners Bank v. Bluefield Nat 'l Bank, 11 F
2d 83, 271 U.S. 669.
"A national bank has no power to lend its credit to any person or corporation . . . Bowen v. Needles Nat.
Bank, 94 F 925 36 CCA 553, certiorari denied in 20 S.Ct 1024, 176 US 682, 44 LED 637.
The doctrine of ultra vires is a most powerful weapon to keep private corporations within their legitimate
spheres and to punish them for violations of their corporate charters, and it probably is not invoked too
often .. . Zinc Carbonate Co. v. First National Bank, 103 Wis 125, 79 NW 229. American Express Co. v.
Citizens State Bank, 194 NW 430.
A bank may not lend its credit to another even though such a transaction turns out to have been of benefit
to the bank, and in support of this a list of cases might be cited, which-would look like a catalog of ships.
[Emphasis added] Norton Grocery Co. v. Peoples Nat. Bank, 144 SE 505. 151 Va 195.
"It has been settled beyond controversy that a national bank, under federal Law being limited in its powers
and capacity, cannot lend its credit by guaranteeing the debts of another. All such contracts entered into by
its officers are ultra vires . . ." Howard & Foster Co. v. Citizens Nat'l Bank of Union, 133 SC 202, 130 SE
759(1926).
. . . checks, drafts, money orders, and bank notes are not lawful money of the United States ... State v.
Neilon, 73 Pac 324, 43 Ore 168.
"Neither, as included in its powers not incidental to them, is it a part of a bank's business to lend its credit. If

a bank could lend its credit as well as its money, it might, if it received compensation and was careful to put
its name only to solid paper, make a great deal more than any lawful interest on its money would amount to.
If not careful, the power would be the mother of panics . . . Indeed, lending credit is the exact opposite of
lending money, which is the real business of a bank, for while the latter creates a liability in favor of the
bank, the former gives rise to a liability of the bank to another. I Morse. Banks and Banking 5th Ed. Sec 65;
Magee, Banks and Banking, 3rd Ed. Sec 248." American Express Co. v. Citizens State Bank, 194 NW 429.
82.
"It is not within those statutory powers for a national bank, even though solvent, to lend its credit to another
in any of the various ways in which that might be done." Federal Intermediate Credit Bank v. L 'Herrison,
33 F 2d 841, 842 (1929).
83.
"There is no doubt but what the law is that a national bank cannot lend its credit or become an
accommodation endorser." National Bank of Commerce v. Atkinson, 55 E 471.
84.
"A bank can lend its money, but not its credit." First Nat'l Bank of Tallapoosa v. Monroe . 135 Ga 614, 69
SE 1124, 32 LRA (NS) 550.
85.
".. . the bank is allowed to hold money upon personal security; but it must be money that it loans, not its
credit." Seligman v. Charlottesville Nat. Bank, 3 Hughes 647, Fed Case No.12, 642, 1039.
86.
"A loan may be defined as the delivery by one party to, and the receipt by another party of, a sum of money
upon an agreement, express or implied, to repay the sum with or without interest." Parsons v. Fox 179 Ga
605, 176 SE 644. Also see Kirkland v. Bailey, 155 SE 2d 701 and United States v. Neifert White Co., 247
Fed Supp 878, 879.
87.
"The word 'money' in its usual and ordinary acceptation means gold, silver, or paper money used as a
circulating medium of exchange . . ." Lane v. Railey 280 Ky 319, 133 SW 2d 75.
88.
"A promise to pay cannot, by argument, however ingenious, be made the equivalent of actual payment ..."
Christensen v. Beebe, 91 P 133, 32 Utah 406.
89.
A bank is not the holder in due course upon merely crediting the depositors account. Bankers Trust v.
Nagler, 229 NYS 2d 142, 143.
90.
"A check is merely an order on a bank to pay money." Young v. Hembree, 73 P2d 393.
91.
"Any false representation of material facts made with knowledge of falsity and with intent that it shall be
acted on by another in entering into contract, and which is so acted upon, constitutes 'fraud,' and entitles
party deceived to avoid contract or recover damages." Barnsdall Refining Corn. v. Birnam Wood Oil Co..
92 F 26 817.
92.
"Any conduct capable of being turned into a statement of fact is representation. There is no distinction
between misrepresentations effected by words and misrepresentations effected by other acts." Leonard v.
Springer 197 Ill 532. 64 NE 301.
93.
If any part of the consideration for a promise be illegal, or if there are several considerations for an
unseverable promise one of which is illegal, the promise, whether written or oral, is wholly void, as it is
impossible to say what part or which one of the considerations induced the promise. Menominee River Co.
v. Augustus Spies L & C Co., 147 Wis 559. 572; 132 NW 1122.
94.
The contract is void if it is only in part connected with the illegal transaction and the promise single or

entire. Guardian Agency v. Guardian Mut. Savings Bank, 227 Wis 550, 279 NW 83.
95.
It is not necessary for rescission of a contract that the party making the misrepresentation should have
known that it was false, but recovery is allowed even though misrepresentation is innocently made, because
it would be unjust to allow one who made false representations, even innocently, to retain the fruits of a
bargain induced by such representations. Whipp v. Iverson, 43 Wis 2d 166.
96.
"Each Federal Reserve bank is a separate corporation owned by commercial banks in its region ..." Lewis v.
United States, 680 F 20 1239 (1982).
97.
In a Debtor's RICO action against its creditor, alleging that the creditor had collected an unlawful debt, an
interest rate (where all loan charges were added together) that exceeded, in the language of the RICO
Statute, "twice the enforceable rate." The Court found no reason to impose a requirement that the Plaintiff
show that the Defendant had been convicted of collecting an unlawful debt, running a "loan sharking"
operation. The debt included the fact that exaction of a usurious interest rate rendered the debt unlawful and
that is all that is necessary to support the Civil RICO action. Durante Bros. & Sons, Inc. v. Flushing Nat 'l
Bank. 755 F2d 239, Cert. denied, 473 US 906 (1985).
98.
The Supreme Court found that the Plaintiff in a civil RICO action need establish only a criminal "violation"
and not a criminal conviction. Further, the Court held that the Defendant need only have caused harm to the
Plaintiff by the commission of a predicate offense in such a way as to constitute a "pattern of Racketeering
activity." That is, the Plaintiff need not demonstrate that the Defendant is an organized crime figure, a
mobster in the popular sense, or that the Plaintiff has suffered some type of special Racketeering injury; all
that the Plaintiff must show is what the Statute specifically requires. The RICO Statute and the civil
remedies for its violation are to be liberally construed to effect the congressional purpose as broadly
formulated in the Statute. Sedima, SPRL v. Imrex Co., 473 US 479 (1985).
DEFINITIONS TO KNOW WHEN EXAMINING A BANK CONTRACT
BANK ACCOUNT: A sum of money placed with a bank or banker, on deposit, by a customer, and subject
to be drawn out on the latter's check.
BANK: whose business it is to receive money on deposit, cash checks or drafts, discount commercial paper,
make loans and issue promissory notes payable to bearer, known as bank notes.
BANK CREDIT: A credit with a bank by which, on proper credit rating or proper security given to the
bank, a person receives liberty to draw to a certain extent agreed upon.
BANK DEPOSIT: Cash, checks or drafts placed with the bank for credit to depositor's account. Placement
of money in bank, thereby, creating contract between bank and depositors.
DEMAND DEPOSIT: The right to withdraw deposit at any time.
BANK DEPOSITOR: One who delivers to, or leaves with a bank a sum of money subject to his order.
BANK DRAFT: A check, draft or other form of payment.
ANK OF ISSUE: Bank with the authority to issue notes which are intended to circulate as currency.
LOAN: Delivery by one party to, and receipt by another party, a sum of money upon agreement, express or
implied, to repay it with or without interest.

CONSIDERATION: The inducement to a contract. The cause, motive, price or impelling influences,
which induces a contracting, party to enter into a contract. The reason, or material cause of a contract.
CHECK: A draft drawn upon a bank and payable on demand, signed by the maker or drawer, containing an
unconditional promise to pay a certain sum in money to the order of the payee. The Federal Reserve Board
defines a check as, "...a draft or order upon a bank or banking house purporting to be drawn upon a
deposit of funds for the payment at all events of, a certain sum of money to a certain person therein named,
or to him or his order, or to bearer and payable instantly on demand of."
QUESTIONS ONE MIGHT ASK THE BANK IN AN INTERROGATORY
Did the bank loan gold or silver to the alleged borrower?
Did the bank loan credit to the alleged borrower?
Did the borrower sign any agreement with the bank, which prevents the borrower from repaying the bank in
credit?
Is it true that your bank creates check book money when the bank grants loans, simply by adding deposit
dollars to accounts on the bank's books, in exchange, for the borrower's mortgage note? Has your bank, at
any time, used the borrower's mortgage note, "promise to pay", as a deposit on the bank's books from which
to issue bank checks to the borrower?
At the time of the loan to the alleged borrower, was there one dollar of Federal Reserve Bank Notes in the
bank's possession for every dollar owed in Savings Accounts, Certificates of Deposits and check Accounts
(Demand Deposit Accounts) for every dollar of the loan?
According to the bank's policy, is a promise to pay money the equivalent of money?
Does the bank have a policy to prevent the borrower from discharging the mortgage note in "like kind
funds" which the bank deposited from which to issue the check?
Does the bank have a policy of violating the Deceptive Trade Practices Act?
When the bank loan officer talks to the borrower, does the bank inform the borrower that the bank uses the
borrowers mortgage note to create the very money the bank loans out to the borrower?
Does the bank have a policy to show the same money in two separate places at the same time?
Does the bank claim to loan out money or credit from savings and certificates of deposits while never
reducing the amount of money or credit from savings accounts or certificates of deposits, which customers
can withdraw from?
Using the banking practice in place at the time the loan was made, is it theoretically possible for the bank to
have loaned out a percentage of the Savings Accounts and Certificates of Deposits?
If the answer is "no" to question #13, explain why the answer is no.
In regards to question #13, at the time the loan was made, were there enough Federal Reserve Bank Notes
on hand at the bank to match the figures represented by every Savings Account and Certificate of Deposit
and checking Account (Demand Deposit Account)?
Does the bank have to obey, the laws concerning, Commercial Paper; Commercial Transactions,

Commercial Instruments, and Negotiable Instruments?


Did the bank lend the borrower the bank's assets, or the bank's liabilities?
What is the complete name of the banking entity, which employs you, and in what jurisdiction is the bank
chartered?
What is the bank's definition of "Loan Credit"?
Did the bank use the borrowers assumed mortgage note to create new bank money, which did not exist
before the assumed mortgage note was signed?
Did the bank take money from any Demand Deposit Account (DDA), Savings Account (SA), or a
Certificate of Deposit (CD), or any combination of any Demand Deposit Account, Savings Account or
Certificate of Deposit, and loan this money to the borrower?
Did the bank replace the money or credit, which it loaned to the borrower with the borrower's assumed
mortgage note?
Did the bank take a bank asset called money, or the credit used as collateral for customers' bank deposits, to
loan this money to the borrower, and/or did the bank use the borrower's note to replace the asset it loaned to
the borrower?
Did the money or credit, which the bank claims to have loaned to the borrower, come from deposits of
money or credit made by the bank's customers, excluding the borrower's assumed mortgage note?
Considering the balance sheet entries of the bank's loan of money or credit to the borrower, did the bank
directly decrease the customer deposit accounts (i.e. Demand Deposit Account, Savings Account, and
Certificate of Deposit) for the amount of the loan?
Describe the bookkeeping entries referred to in question #13.
Did the bank's bookkeeping entries to record the loan and the borrower's assumed mortgage note ever, at
any time, directly decrease the amount of money or credit from any specific bank customer's deposit
account?
Does the bank have a policy or practice to work in cooperation with other banks or financial institutions use
borrower's mortgage note as collateral to create an offsetting amount of new bank money or credit or check
book money or Demand Deposit Account generally to equal the amount of the alleged loan?
Regarding the borrowers assumed mortgage loan, give the name of the account which was debited to record
the mortgage.
Regarding the bookkeeping entry referred to in Interrogatory #17, state the name and purpose of the
account, which was credited.
When the borrower's assumed mortgage note was debited as a bookkeeping entry, was the offsetting entry a
credit account?
Regarding the initial bookkeeping entry to record the borrower's assumed mortgage note and the assumed
loan to the borrower, was the bookkeeping entry credited for the money loaned to the borrower, and was
this credit offset by a debit to record the borrower's assumed mortgage note? Does the bank currently or has

it ever at anytime used the borrower's assumed mortgage note as money to cover the bank's liabilities
referred to above, i.e. Demand Deposit Account, Savings Account and Certificate of Deposit?
When the assumed loan was made to the borrower, did the bank have every Demand Deposit Account,
Savings Account, and Certificate of Deposit backed up by Federal Reserve Bank Notes on hand at the
bank?
Does the bank have an established policy and practice to emit bills of credit which it creates upon its books
at the time of making a loan agreement and issuing money or so-called money of credit, to its borrowers?

SUMMARY
The bank advertised it would loan money, which is backed by legal tender. Is not that what the symbol $
means? Is that not what the contract said? Do you not know there is no agreement or contract in the absence
of mutual consent? The bank may say that they gave you a check, you owe the bank money. This
information shows you that the check came from the money the alleged borrower provided and the bank
never loaned any money from other depositors.
Ive shown you the law and the banks own literature to prove my case. All the bank did was trick you.
They get your mortgage note without investing one cent, by making you a depositor and not a borrower.
The key to the puzzle is, the bank did not sign the contract. If they did they must loan you the money.
If they did not sign it, chances are, they deposited the mortgage note in a checking account and used it
to issue a check without ever loaning you money or the bank investing one cent.
Our Nation, along with every State of the Union, entered into Bankruptcy, in 1933. This changes the law
from "gold and silver legal money and common law to the law of bankruptcy. Under Bankruptcy law the
mortgage note acts like money. Once you sign the mortgage note it acts like money. The bankers now trick
you into thinking they loaned you legal tender, when they never loaned you any of their money.
The trick is they made you a depositor instead of a borrower. They deposited your mortgage note and issued
a bank check. Neither the mortgage note nor the check is legal tender. The mortgage note and the check
are now money created that never existed, prior. The bank got your mortgage note for free without loaning
you money, and sold the mortgage note to make the bank check appear legal. The borrower provided the
legal tender, which the bank gave back in the form of a check. If the bank loaned legal tender, as the
contract says, for the bank to legally own the mortgage note, then the people would still own the homes,
farms, businesses and cars, nearly debt free and pay little, if any interest. By the banks not fulfilling the
contract by loaning legal tender, they make the alleged borrower, a depositor. This is a fraudulent
conversion of the mortgage note. A Fraud is a felony.
The bank had no intent to loan, making it promissory fraud, mail fraud, wire fraud, and a list of other crimes
a mile long. How can they make a felony, legal? They cannot! Fraud is fraud!
The banks deposit your mortgage note in a checking account. The deposit becomes the banks property.
They withdraw money without your signature, and call the money, the banks money that they loaned to you.
The bank forgot one thing. If the bank deposits your mortgage note, then the bank must credit your
checking account claiming the bank owes you $100,000 for the $100,000 mortgage note deposited. The
credit of $100,000 the bank owes you for the deposit allows you to write a check or receive cash. They did
not tell you they deposited the money, and they forget to tell you that the $100,000 is money the banks owe
you, not what you owe the bank. You lost $100,000 and the bank gained $100,000. For the $100,000 the
bank gained, the bank received government bonds or cash of $100,000 by selling the mortgage note. For the
loan, the bank received $100,000 cash, the bank did not give up $100,000.
Anytime the bank receives a deposit, the bank owes you the money. You do not owe the bank the money.

If you or I deposit anyone's negotiable instrument without a contract authorizing it, and withdraw the
money claiming it is our money, we would go to jail. If it was our policy to violate a contract, we could go
to jail for a very long time. You agreed to receive a loan, not to be a depositor and have the bank receive the
deposit for free. What the bank got for free (lien on real property) you lost and now must pay with interest.
If the bank loaned us legal tender (other depositors money) to obtain the mortgage note the bank could
never obtain the lien on the property for free. By not loaning their money, but instead depositing the
mortgage note the bank creates inflation, which costs the consumer money. Plus the economic loss of the
asset, which the bank received for free, in direct violation of any signed agreement.
We want equal protection under the law and contract, and to have the bank fulfill the contract or return the
mortgage note. We want the judges, sheriffs, and lawmakers to uphold their oath of office and to
honor and uphold the founding fathers U.S. Constitution. Is this too much to ask?
What is the mortgage note? The mortgage note represents your future loan payments. A promise to pay the
money the bank loaned you. What is a lien? The lien is a security on the property for the money loaned.
How can the bank promise to pay money and then not pay? How can they take a promise to pay and call it
money and then use it as money to purchase the future payments of money at interest. Interest is the
compensation allowed by law or fixed by the parties for the use or forbearance of borrowed money. The
bank never invested any money to receive your mortgage note. What is it they are charging interest on?
The bank received an asset. They never gave up an asset. Did they pay interest on the money they received
as a deposit? A check issued on a deposit received from the borrower cost the bank nothing? Where did the
money come from that the bank invested to charge interest on? The bank may say we received a benefit.
What benefit? Without their benefit we would receive equal protection under the law, which would mean
we did not need to give up an asset or pay interest on our own money! Without their benefit we would be
free and not enslaved. We would have little debt and interest instead of being enslaved in debt and interest.
The banks broke the contract, which they never intended to fulfill in the first place. We got a check and a
house, while they received a lien and interest for free, through a broken contract, while we got a debt and
lost our assets and our country. The benefit is the banks, who have placed liens on nearly every asset in the
nation, without costing the bank one cent. Inflation and working to pay the bank interest on our own money
is the benefit. Some benefit!
What a Shell Game. The Following case was an actual trial concerning the issues we have covered.
The Judge was extraordinary in-that he had a grasp of the Constitution that I havent seen often
enough in our courts. This is the real thing, absolutely true. This case was reviewed by the Minnesota
Supreme Court on their own motion. The last thing in the world that the Bankers and the Judges
wanted was case law against the Bankers. However, this case law is real.

STATE OF MINNESOTA IN JUSTICE COURT COUNTY OF SCOTT TOWNSHIP OF CREDIT


RIVER
MARTIN V. MAHONEY, JUSTICE
FIRST BANK OF MONTGOMERY, Plaintiff, CASE NO: 19144
Vs.
Jerome Daly, Defendant. )

JUDGMENT AND DECREE

The above entitled action came on before the court and a jury of 12 on December 7, 1968 at 10:00 a.m.
Plaintiff appeared by its President Lawrence V. Morgan and was represented by its Counsel Theodore R.
Mellby, Defendant appeared on his own behalf.
A jury of Talesmen were called, impaneled and sworn to try the issues in this case. Lawrence V. Morgan
was the only witness called for plaintiff and defendant testified as the only witness in his own behalf.
Plaintiff brought this as a Common Law action for the recovery of the possession of lot 19, Fairview Beach,
Scott County, Minn. Plaintiff claimed titled to the Real Property in question by foreclosure of a Note and
Mortgage Deed dated May 8, 1964 which plaintiff claimed was in default at the time foreclosure
proceedings were started. Defendant appeared and answered that the plaintiff created the money and credit
upon its own books by bookkeeping entry as the legal failure of consideration for the Mortgage Deed and
alleged that the Sheriffs sale passed no title to plaintiff. The issues tried to the jury were whether there was
a lawful consideration and whether Defendant had waived his rights to complain about the consideration
having paid on the note for almost 3 years. Mr. Morgan admitted that all of the money or credit which was
used as a consideration was created upon their books that this was standard banking practice exercised by
their bank in combination with the Federal Reserve Bank of Minneapolis, another private bank, further that
he knew of no United States Statute of Law that gave the Plaintiff the authority to do this. Plaintiff further
claimed that Defendant by using the ledger book created credit and by paying on the Note and Mortgage
waived any right to complain about the consideration and that Defendant was estopped from doing so. At
12:15 on December 7, 1968 the Jury returned a unanimous verdict for the Defendant. Now therefore by
virtue of the authority vested in me pursuant to the Declaration of Independence, the Northwest Ordinance
of 1787, the Constitution of the United States and the Constitution and laws of the State Minnesota not
inconsistent therewith.
IT IS HEREBY ORDERED, ADJUDGED AND DECREED
That Plaintiff is not entitled to recover the possession of lot 19, Fairview Beach, Scott County, Minnesota
according to the plat thereof on file in the Register of Deeds office. That because of failure of a lawful
consideration the note and Mortgage dated May 8, 1964 are null and void.
That the Sheriffs sale of the above described premises held on June 26, 1967 is null and void, of no effect.
That Plaintiff has no right, title or interest in said premises or lien thereon, as is above described.
That any provision in the Minnesota Constitution and any Minnesota Statute limiting the
Jurisdiction of this Court is repugnant to the Constitution of the United States and to the Bill of Rights of
the Minnesota Constitution and is null and void and that this Court has Jurisdiction to render complete
Justice in this cause.
That Defendant is awarded costs in the sum of $75.00 and execution is hereby issued therefore.
A 10 day stay is granted.
The following memorandum and any supplemental memorandum made and filed by this Court in support of
this judgment is hereby made a part hereof by reference.
BY THE COURT
Dated December 9, 1969
MARTIN V. MAHONEY
Justice of the Peace Credit River Township Scott County, Minnesota

MEMORANDUM
The issues in this case were simple. There was no material dispute on the facts for the jury to resolve.
Plaintiff admitted that it, in combination with the Federal Reserve Bank of Minneapolis, which are for all
practical purposes because of their interlocking activity and practices, and both being Banking Institutions
Incorporated under the laws of the United States, are in the Law to be treated as one and the same Bank, did
create the entire $14,000.00 in money or credit upon its own books by bookkeeping entry. That this was the
Consideration used to support the Note dated May 8, 1964 and the Mortgage of the same date. The Money
and credit first came into existence when they credited it.
Mr. Morgan admitted that no United States Law of Statute existed which gave him the right to do this. A
lawful consideration must exist and be tendered to support the note. (See Anheuser Busch Brewing Co. v.

Emma Mason, 44 Minn. 318. 46 NW 558.) The Jury found there was no lawful consideration and I agree
Only God can create something of value out of nothing. Even if defendant could be charged with waiver or
estoppel as a matter of law this is no defense to the plaintiff. The law leaves wrongdoers where it finds
them. (See sections 50, 5 1, and 52 of Am Jur 2d "Actions" on page 584.") No action will lie to recover on a
claim based upon, or in any manner depending upon, a fraudulent, illegal, or immoral transaction or
contract to which plaintiff was a party. Plaintiffs act of creating is not authorized by the Constitution and
Laws of the United States, is unconstitutional and void, and is not lawful consideration in the eyes of the
law to support any thing or upon which any lawful rights can be built. Nothing in the Constitution of the
United States limits the jurisdiction of this Court, which is one of original jurisdiction with right of trial by
jury guaranteed.
This is a Common Law Action. Minnesota cannot limit or impair the power of this Court to render complete
justice between the parties. Any provisions in the Constitution and laws of Minnesota which attempt to do
so is repugnant to the Constitution of the United States and void. No question as to the Jurisdiction of this
Court was raised by either party at the trial. Both parties were given complete liberty to submit any and all
facts and law to the jury, at least in so far as they saw it. No complaint was made by Plaintiff that Plaintiff
did not receive a fair trial. From the admissions made by Mr. Morgan the path of duty was made direct and
clear for the jury. Their verdict could not reasonably have been otherwise. Justice was rendered completely
and without purchase, conformable to the law in this Court on December 7, 1968.
BY THE COURT
MARTIN V. MAHONEY
Justice of the Peace Credit River Township Scott County, Minnesota
Note: It has never been doubted that a note given on a consideration, which is prohibited by law is void. It
has been determined independent of Acts of Congress, that sailing under the license of an enemy is illegal.
The emission of Bills of Credit upon the books of these private Corporations for the purposes of private
gain is not warranted by the Constitution of the United States and is unlawful. See Craig v. @ 4 peters
reports 912, This Court can tread only that path which is marked out by duty. M.V.M.
JUDGE MARTIN MAHONEY DECISION AS FOLLOWS
"For the Justice's fees, the First National Bank deposited @ the Clerk of the District Court the two Federal
Reserve Bank Notes. The Clerk tendered the Notes to me (the Judge). As Judge my sworn duty compelled
me to refuse the tender. This is contrary to the Constitution of the United States. The States have no power
to make bank notes a legal tender. Only gold and silver coin is a lawful tender." (See American Jurist on
Money 36 sec.13.)
Bank Notes are a good tender as money unless specifically objected to. Their consent and usage is based
upon the convertibility of such notes to coin at the pleasure of the holder upon presentation to the bank for
redemption. When the inability of a bank to redeem its notes is openly avowed they instantly lose their
character as money and their circulation as currency ceases." (See American Jurist 36-section 9). "There is
no lawful consideration for these Federal Reserve Bank Notes to circulate as money. The banks actually
obtained these notes for cost of printing - A lawful consideration must exist for a Note. As a matter of fact,
the "Notes" are not Notes at all, as they contain no promise to pay." (See 17 American Jurist section 85,
215) "The activity of the Federal Reserve Banks of Minnesota, San Francisco and the First National Bank
of Montgomery is contrary to public policy and contrary to the Constitution of the United States, and
constitutes an unlawful creation of money, credit and the obtaining of money and credit for no valuable
consideration.
Activity of said banks in creating money and credit is not warranted by the Constitution of the United
States." "The Federal Reserve Banks and National Banks exercise an exclusive monopoly and privilege of
creating credit and issuing Notes at the expense of the public which does not receive a fair equivalent. This

scheme is obliquely designed for the benefit of an idle monopoly to rob, blackmail, and oppress the
producers of wealth. "The Federal Reserve Act and the National Bank Act are, in their operation and effect,
contrary to the whole letter and spirit of the Constitution of the United States, for they confer an unlawful
and unnecessary power on private parties; they hold all of our fellow citizens in dependence; they are
subversive to the rights and liberation of the people. "These Acts have defiled the lawfully constituted
Government of the United States. The Federal Reserve Act and the National Banking Act are not necessary
and proper for carrying into execution the legislative powers granted to Congress or any other powers
vested in the Government of the United States, but on the contrary, are subversive to the rights of the People
in their rights to life, liberty, and property." (See Section 462 of Title 31 U. S. Code).
"The meaning of the Constitutional provision, 'NO STATE SHALL make anything but Gold and Silver Coin
a legal tender ' payment of debts' is direct, clear, unambiguous and without any qualification. This Court is
without authority to interpolate any exception. My duty is simply to execute it, as and to pronounce the
legal result. From an examination of the case of Edwards v. Kearsey, Federal Reserve Bank Notes (fiat
money) which are attempted to be made a legal tender, are exactly what the authors of the Constitution of
the United States intend to prohibit. No State can make these Notes a legal tender. Congress is incompetent
to authorize a State to make the Notes a legal tender. For the effect of binding Constitution provisions see
Cooke v. Iverson. This fraudulent Federal Reserve System and National Banking System has impaired the
obligation of Contract promoted disrespect for the Constitution and Law and has shaken society to its
foundation." (See 96 U.S. Code 595 and 108 M 388 and 63 M 147)
"Title 31, U.S. Code, Section 432, is in direct conflict with the Constitution insofar, at least, that it attempts
to make Federal Reserve Bank Notes a legal tender. The Constitution is the Supreme Law of the Land.
Section 462 of Title 31 is not a law, which is made in pursuance of the Constitution. It is unconstitutional
and void, and I so hold. Therefore, the two Federal Reserve Bank Notes are Null and Void for any lawful
purpose in so far as this case is concerned and are not a valid deposit of $2.00 with the Clerk of the District
Court for the purpose of effecting an Appeal from this Court to the District Court." "However, of these
Federal Reserve Bank Notes, previously discussed, and that is that the Notes are invalid, because of a
theory that they are based upon a valid, adequate or lawful consideration. At the hearing scheduled for
January 22, 1969, at 7:00 P.M., Mr. Morgan appeared at the trial; he appeared as a witness to be candid,
open, direct, experienced and truthful. He testified to years of experience with the Bank of America in Los
Angeles, the Marquette National Bank of Minnesota and the First National Bank of Minnesota. He seemed
to be familiar with the operation of the Federal Reserve System. He freely admitted that his Bank created all
of the money and credit upon its books with which it acquired the Note and Mortgage of May 8, 1964. The
credit first came into existence when the Bank created it upon its books. Further, he freely admitted that no
United States Law gave the Bank the authority to do this. This was obviously no lawful consideration for
the Note.
The Bank parted with absolutely nothing except a little ink. In this case, the evidence was on January 22,
1969 that the Federal Reserve Bank obtained the Notes for this seems to be conferred by Title 12 USC
Section 420. The cost is about 9/10th of a cent per Note regardless of the amount of the Note. The Federal
Reserve Banks create all of the money and credit upon their books by bookkeeping entries by which they
acquire United States Securities. The collateral required to obtain the Note is, by section 412 USC, Title 12,
a deposit of a like amount of bonds. Bonds which the Banks acquire by creating money and credit by
bookkeeping entry."
"No rights can be acquired by fraud. The Federal Reserve Bank Notes are acquired through the use of
unconstitutional statutes and fraud." "The Common Law requires a lawful consideration for any contract or
Note. These Notes are void for failure at a lawful consideration at Common Law, entirely apart from any
Constitutional consideration. Upon this ground, the Notes are ineffectual for any purpose. This seems to be
the principal objection to paper fiat money and the cause of its depreciation and failure down through the
ages. If allowed to continue, Federal Reserve Bank Notes will meet the same fate. From the evidence
introduced on January 22, 1969, this Court finds that as of March 18, 1969, all Gold and Silver backing is

removed from Federal Reserve Bank Notes." "The law leaves wrongdoers where it finds them. (See I Mer.
Jur 2nd on Actions Section 550)."Slavery and all its incidents, including Peonage, thralldom, and debt
created by fraud is universally prohibited in the United States. This case represents but another refined form
of Slavery by the Bankers. Their position is not supported by the Constitution of the United States. The
People have spoken their will in terms, which cannot be misunderstood. It is indispensable to the
preservation of the Union and independence and liberties of the people that this Court, adhere only to the
mandate of the Constitution and administer it as it is written. I, therefore, hold these Notes in question void
and not effectual for any purpose." (4) January 30, 1969
Judge Martin V. Mahoney
Justice of the Peace Credit River Township
CREDIT LOANS AND VOID CONTRACTS PERFECT OBLIGATION AS TO A HUMAN BEING
AS TO A BANK
Furthermore, this Memorandum of law is offered in order to advance understanding of the complex legal
issues, present and embodied in the Common Law, with authorities, law and cases in support of, which will
constitute the following facts:
Privately owned banks are making loans of "credit" with the intended purpose of circulating "credit" as
"money". Other financial institutions and individuals may "launder" bank credit that they receive directly or
indirectly from privately owned banks. This collective activity is unconstitutional, unlawful, in violation of
Common Law, U.S. Code and the principles of equity. Such activity and underlying contracts have long
been held void, by State Courts, Federal Courts and the U.S. Supreme Court. This Memorandum will
demonstrate through authorities and established common law, that credit "money creation" by privately
owned bank corporations is not really "money creation" at all. It is the trade specialty and artful illusion of
law merchants, which use old-time trade secrets of the Goldsmiths, to entrap the borrower and unjustly
enrich the lender through usury and other unlawful techniques. Issues based on law and the principles of
equity, which are within the jurisdiction of this Court, will be addressed.
THE GOLDSMITHS
In his book, Money and Banking (8th Edition, 1984), Professor David R. Kamerschen writes on pages 56
-63: "The first bankers in the modern sense were the goldsmiths, who frequently accepted bullion and coins
for storage ... One result was that the goldsmiths temporarily could lend part of the gold left with them . . .
These loans of their customers' gold were soon replaced by a revolutionary technique. When people brought
in gold, the goldsmiths gave them notes promising to pay that amount of gold on demand. The notes, first
made payable to the order of the individual, were later changed to bearer obligations. In the previous form,
a note payable to the order of Jebidiah Johnson would be paid to no one else unless Johnson had first
endorsed the note ... But notes were soon being used in an unforeseen way. The note holders found that,
when they wanted to buy something, they could use the note itself in payment more conveniently and let the
other person go after the gold, which the person rarely did . . .The specie, then tended to remain in the
goldsmiths' vaults. . . . The goldsmiths began to realize that they might profit handsomely by issuing
somewhat more notes than the amount of specie they held. . . These additional notes would cost the
goldsmiths nothing except the negligible cost of printing them, yet the notes provided the goldsmiths with
funds to lend at interest . . . .And they were to find that the profitability of their lending operations would
exceed the profit from their original trade. The goldsmiths became bankers as their interest in manufacture
of gold items to sell was replaced by their concern with credit policies and lending activities . . .
They discovered early that, although an unlimited note issue would be unwise, they could issue notes up to
several times the amount of specie they held. The key to the whole operation lay in the public's willingness
to leave gold and silver in the bank's vaults and use the bank's notes. This discovery is the basis of modern
banking: On page 74, Professor Kamerschen further explains the evolution of the credit system: "Later the
goldsmiths learned a more efficient way to put their credit money into circulation. They lent by issuing

additional notes, rather than by paying out in gold. In exchange for the interest-bearing note received from
their customer (in effect, the loan contract), they gave their own non-interest bearing note. Each was
actually borrowing from the other ... The advantage of the later procedure of' lending notes rather than gold
was that . . . more notes could be issued if the gold remained in the vaults ... Thus, through the principle of
bank note issuance, banks learned to create money in the form of their own liability." [Emphasis Added]
MODERN MONEY MECHANICS
Another publication which explains modern banking as learned from the Goldsmiths is Modern Money
Mechanics (5th edition 1992), published by the Federal Reserve Bank of Chicago which states beginning on
page 3: "It started with the goldsmiths ..." At one time, bankers were merely middlemen. They made a profit
by accepting gold and coins brought to them for safekeeping and lending the gold and coins to borrowers.
But the goldsmiths soon found that the receipts they issued to depositors were being used as a means of
payment. 'Then, bankers discovered that they could make loans merely by giving borrowers their promises
to pay, or bank notes... In this way, banks began to create money ... Demand deposits are the modern
counterpart of bank notes . . . It was a small step from printing notes to making book entries to the credit of
borrowers which the borrowers, in turn, could 'spend' by writing checks, thereby printing their own money."
[Emphasis added]
HOW BANKS CREATE MONEY
In the modern sense, banks create money by creating "demand deposits." Demand deposits are merely
"book entries" that reflect how much lawful money the bank owes its customers. Thus, all deposits are
called demand deposits and are the bank's liabilities. The bank's assets are the vault cash plus all the "IOUs"
or promissory notes that the borrower signs when they borrow either money or credit. When a bank lends its
cash (legal money), it loans its assets, but when a bank lends its credit it lends its liabilities. The lending
of credit is, therefore, the exact opposite of the lending of cash (legal money).
At this point, we need to define the meaning of certain words like "lawful money, legal tender, other
money and dollars. The terms "Money" and "Tender" had their origins in Article 1, Sec. 8 and Article 1,
Sec. 10 of the Constitution of the United States. 12 U.S.C. 152 refers to "gold and silver coin as lawful
money of the United States" and was unconstitutionally repealed in 1994 in-that Congress can not delegate
any portion of their constitutional responsibility without Amendment. The term "legal tender" was
originally cited in 31 U.S.C.A. 392 and is now re-codified in 31 U.S.C.A. 5103 which states: "United
States coins and currency . . . are legal tender for all debts, public charges, taxes, and dues." The common
denominator in both "lawful money" and "legal tender money" is that the United States Government issues
both.
With Bankers, however, we find that there are two forms of money - one is government-issued, and
privately owned banks such as WASHINGTON MUTUAL, and JP MORGAN CHASE, issue the other. As
we have already discussed government issued forms of money, we must now scrutinize privately issued
forms of money.
All privately issued forms of money today are based upon the liabilities of the issuer. There are three
common terms used to describe this privately created money. They are credit, demand deposits and
checkbook money. In the Sixth edition of Blacks Law Dictionary, p.367 under the term Credit the term
Bank credit is described as: Money bank owes or will lend a individual or person. It is clear from this
definition that Bank credit which is the money bank owes is the bank's liability. The term checkbook
money is described in the book I Bet You Thought, published by the privately owned Federal Reserve
Bank of New York, as follows: "Commercial banks create checkbook money whenever they grant a loan,
simply by adding deposit dollars to accounts on their books to exchange for the borrowers IOU . . . ." The
word "deposit" and "demand deposit" both mean the same thing in bank terminology and refer to the bank's
liabilities.
For example, the Chicago Federal Reserves publication, Modern Money Mechanics states: "Deposits are
merely book entries ... Banks can build up deposits by increasing loans ... Demand deposits are the modern
counterpart of bank notes. It was a small step from printing notes to making book entries to the credit of
borrowers which the borrowers, in turn, could 'spend' by writing checks. Thus, it is demonstrated in

Modern Money Mechanics how, under the practice of fractional reserve banking, a deposit of $5,000 in
cash could result in a loan of credit/checkbook money/demand deposits of. $100,000 if reserve ratios set by
the Federal Reserve are 5% (instead of 10%).
In a practical application, here is how it works. If a bank has ten people who each deposit $5,000 (totaling
$50,000) in cash (legal money) and the bank's reserve ratio is 5%, then the bank will lend twenty times this
amount, or $1,000,000 in "credit" money. What the bank has actually done, however, is to write a check or
loan its credit with the intended purpose of circulating credit as "money." Banks know that if all the people
who receive a check or credit loan come to the bank and demand cash, the bank will have to close its doors
because it doesn't have the cash to back up its check or loan. The bank's check or loan will, however, pass as
money as long as people have confidence in the illusion and don't demand cash. Panics are created when
people line up at the bank and demand cash (legal money), causing banks to fold as history records in
several time periods, the most recent in this country was the panic of 1933.
THE PROCESS OF PASSING CHECKS OR CREDIT AS MONEY IS DONE QUITE SIMPLY
A deposit of $5,000 in cash by one person results in a loan of $100,000 to another person at 5% reserves.
The person receiving the check or loan of credit for $100,000 usually deposits it in the same bank or
another bank in the Federal Reserve System. The check or loan is sent to the bookkeeping department of the
lending bank where a book entry of $100,000 is credited to the borrower's account. The lending bank's
check that created the borrower's loan is then stamped "Paid" when the account of the borrower is credited a
"dollar" amount. The borrower may then "spend" these book entries (demand deposits) by writing checks to
others, who in turn deposit their checks and have book entries transferred to their account from the
borrower's checking account. However, two highly questionable and unlawful acts have now occurred. The
first was when the bank wrote the check or made the loan with insufficient funds to back them up. The
second is when the bank stamps its own Not Sufficient Funds check "paid" or posts a loan by merely
crediting the borrower's account with book entries the bank calls "dollars." Ironically, the check or loan
seems good and passes as money -- unless an emergency occurs via demands for cash - or a Court challenge
-- and the artful, illusion bubble, bursts.
DIFFERENT KINDS OF MONEY
The book, I Bet You Thought, published by the Federal Reserve Bank of New York, states: "Money is any
generally accepted medium of exchange, not simply coin and currency. Money doesn't have to be
intrinsically valuable, be issued by a government or be in any special form." [Emphasis added] Thus we see
that privately issued forms of money only require public confidence in order to pass as money. Counterfeit
money also passes as money as long as nobody discovers it's counterfeit. Like wise, "bad" checks and
"credit" loans pass as money so long as no one finds out they are unlawful. Yet, once the fraud is
discovered, the values of such bank money like bad checks ceases to exist. There are, therefore, two
kinds of money -- government issued legal money and privately issued unlawful money.
DIFFERENT KINDS OF DOLLARS
The dollar once represented something intrinsically valuable made from gold or silver. For example, in
1792, Congress defined the silver dollar as a silver coin containing 371.25 grains of pure silver. The legal
dollar is now known as "United States coins and currency." However, the Banker's dollar has become a unit
of measure of a different kind of money. Therefore, with Bankers there is a "dollar" of coins and a dollar of
cash (legal money), a "dollar" of debt, a "dollar" of credit, a "dollar" of checkbook money or a "dollar" of
checks. When one refers to a dollar spent or a dollar loaned, he should now indicate what kind of "dollar"
he is talking about, since Bankers have created so many different kinds.
A dollar of bank "credit money" is the exact opposite of a dollar of "legal money". The former is a liability
while the latter is an asset. Thus, it can be seen from the earlier statement quoted from I Bet You Thought,
that money can be privately issued as: "Money doesn't have to ... be issued by a government or be in any
special form." It should be carefully noted that banks that issue and lend privately created money demand to
be paid with government issued money. However, payment in like kind under natural equity would seem to
indicate that a debt created by a loan of privately created money can be paid with other privately created

money, without regard for any special form as there are no statutory laws to dictate how either private
citizens or banks may create money.
BY WHAT AUTHORITY?
By what authority do state and national banks, as privately owned corporations, create money by lending
their credit --or more simply put - by writing and passing "bad" checks and "credit" loans as "money"?
Nowhere can a law be found that gives banks the authority to create money by lending their liabilities.
Therefore, the next question is, if banks are creating money by passing bad checks and lending their credit,
where is their authority to do so? From their literature, banks claim these techniques were learned from the
trade secrets of the Goldsmiths. It is evident, however, that money creation by private banks is not the result
of powers conferred upon them by government, but rather the artful use of long held "trade secrets." Thus,
unlawful money creation is not being done by banks as corporations, but unlawfully by bankers.
Article I, Section 10, para. 1 of the Constitution of the United States of America specifically states that
no state shall "... coin money, emit bills of credit, make any thing but gold and silver coin a Tender in
Payment of Debts, pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligations of
Contracts . . "[Emphasis added]
The states, which grant the Charters of state banks also, prohibit the emitting of Bills of credit by not
granting such authority in bank charters. It is obvious that "We the people" never delegated to Congress,
state government, or agencies of the state, the power to create and issue money in the form of checks, credit,
or other "bills of credit." The Federal Government today does not authorize banks to emit, write, create,
issue and pass checks and credit as money. But banks do, and get away with it! Banks call their privately
created money nice sounding names, like credit, demand deposits, or checkbook money. However,
the true nature of "credit money" and "checks" does not change regardless of the poetic terminology used to
describe them. Such money in common use by privately owned banks is illegal under Art. 1, Sec.10, para. 1
of the Constitution of the United States of America, as well as unlawful under the laws of the United States
and of this State.
VOID "ULTRA VIRES" CONTRACTS
The courts have long held that when a corporation executes a contract beyond the scope of its charter or
granted corporate powers, the contract is void or "ultra vires".
In Central Transp. Co. v. Pullman 139 U.S. 60, 11 S. Ct. 478, 35 L. Ed. 55, the court said: "A contract ultra
vires being unlawful and void, not because it is in itself immoral, but because the corporation, by the law of
its creation, is incapable of making it, the courts, while refusing to maintain any action upon the unlawful
contract, have always striven to do justice between the parties, so far as could be done consistently with
adherence to law, by permitting property or money, parted with on the faith of the unlawful contract, to be
recovered back, or compensation to be made for it. In such case, however, the action is not maintained upon
the unlawful contract, nor according to its terms; but on an implied contract of the defendant to return, or,
failing to do that, to make compensation for, property or money which it has no right to retain. To maintain
such an action is not to affirm, but to disaffirm, the unlawful contract."
,

"When a contract is once declared ultra vires, the fact that it is executed does not validate it, nor can it be
ratified, so as to make it the basis of suitor action, nor does the doctrine of estoppel apply." F& PR v.
Richmond, 133 SE 898; 151 Va 195.
"A national bank ... cannot lend its credit to another by becoming surety, indorser, or guarantor for him,
such an act ; is ultra vires . . ." Merchants' Bank v. Baird 160 F 642.
THE QUESTION OF LAWFUL CONSIDERATION

The issue of whether the lender who writes and passes a "bad" check or makes a "credit" loan has a claim
for relief against the borrower is easy to answer, providing the lender can prove that he gave a lawful
consideration, based upon lawful acts. But did the lender give a lawful consideration? To give a lawful
consideration, the lender must prove that he gave the borrower lawful money such as coins or
currency. Failing that, he can have no claim for relief in a court at law against the borrower as the
lender's actions were ultra vires or void from the beginning of the transaction.
It can be argued that bad checks or credit loans that pass as money are valuable; but so are counterfeit
coins and currency that pass as money. It seems unconscionable that a bank would ask homeowners to put
up a homestead as collateral for a "credit loan" that the bank created out of thin air. Would this court of law
or equity allow a counterfeiter to foreclose against a person's home because the borrower was late in
payments on an unlawful loan of counterfeit money? Were the court to do so, it would be contrary to all
principles of law.
The question of valuable consideration in the case at bar, does not depend on any value imparted by the
lender, but the false confidence instilled in the "bad" check or "credit" loan by the lender. In a court at law
or equity, the lender has no claim for relief. The argument that because the borrower received property for
the lender's "bad" check or "credit" loan gives the lender a claim for relief is not valid, unless the lender can
prove that he gave lawful value. The seller in some cases who may be holding the bad check or Credit
loan has a claim for relief against the lender or the borrower or both, but the lender has no such claim.
BORROWER RELIEF
Since we have established that the lender of unlawful or counterfeit money has no claim for relief under a
void contract, the last question should be, does the borrower have a claim for relief against the lender? First,
if it is established that the borrower has made no payments to the lender, then the borrower has no claim for
relief against the lender for money damages. But the borrower has a claim for relief to void the debt he
owes the lender for notes or obligations unlawfully created by an ultra vires contract for lending "credit"
money.
The borrower, the Courts have long held, has a claim for relief against the lender to have the note,
security agreement, or mortgage note the borrower signed declared null and void.
The borrower may also have claims for relief for breach of contract by the lender for not lending "lawful
money" and for usury for charging an interest rate several times greater than the amount agreed to in the
contract for any lawful money actually risked by the lender. For example, if on a $100,000 loan it can be
established that the lender actually risked only $5,000 (5% Federal Reserve ratio) with a contract interest
rate of 10%, the lender has then loaned $95,000 of "credit" and $5,000 of "lawful money". However, while
charging 10% interest ($10,000) on the entire $100,000. The true interest rate on the $5,000 of "lawful
money" actually risked by the lender is 200% which violates Usury laws of this state.
If no "lawful money" was loaned, then the interest rate is an infinite percentage. Such techniques the
bankers say were learned from the trade secrets of the Goldsmiths. The Courts have repeatedly ruled
that such contracts with borrowers are wholly void from the beginning of the transaction, because
banks are not granted powers to enter into such contracts by either state or national charters.
ADDITIONAL BORROWER RELIEF
In Federal District Court the borrower may have additional claims for relief under "Civil RICO" Federal
Racketeering laws (18 U.S.C. 1964). The lender may have established a "pattern of racketeering activity"
by using the U.S. Mail more than twice to collect an unlawful debt and the lender may be in violation of 18
U.S.C. 1341, 1343, 1961 and 1962.
The borrower has other claims for relief if he can prove there was or is a conspiracy to deprive him of
property without due process of law under. (42 U.S.C. 1983 (Constitutional Injury), 1985 (Conspiracy)
and 1986 ("Knowledge" and "Neglect to Prevent" a U.S. Constitutional Wrong), Under 18 U.S.C.A. 241

(Conspiracy) violators, "shall be fined not more than $10,000 or imprisoned not more than ten (10) years or
both."
In a Debtor's RICO action against its creditor, alleging that the creditor had collected an unlawful debt, an
interest rate (where all loan charges were added together) that exceeded, in the language of the RICO
Statute, "twice the enforceable rate". The Court found no reason to impose a requirement that the Plaintiff
show that the Defendant had been convicted of collecting an unlawful debt, running a "loan sharking"
operation. The debt included the fact that exaction of a usurious interest rate rendered the debt unlawful and
that is all that is necessary to support the Civil RICO action. Durante Bros. & Sons, Inc. v. Flushing Nat 'l
Bank. 755 F2d 239, Cert. denied, 473 US 906 (1985).
The Supreme Court found that the Plaintiff in a civil RICO action, need establish only a criminal "violation"
and not a criminal conviction. Further, the Court held that the Defendant need only have caused harm to the
Plaintiff by the commission of a predicate offense in such a way as to constitute a "pattern of Racketeering
activity." That is, the Plaintiff need not demonstrate that the Defendant is an organized crime figure, a
mobster in the popular sense, or that the Plaintiff has suffered some type of special Racketeering injury; all
that the Plaintiff must show is what the Statute specifically requires. The RICO Statute and the civil
remedies for its violation are to be liberally construed to effect the congressional purpose as broadly
formulated in the Statute. Sedima, SPRL v. Imrex Co., 473 US 479 (1985).
Aside from any legal obligation, there exists a societal and moral obligation enure to both the Plaintiff and
the Defendant in that if you were to defuse a Bomb, and you completed the task 99% correct, you are still
dead. Grantor believes that his position on the law is sound, but fears grievous repercussions throughout the
financial community if he should prevail. The credit for money scheme is endemic throughout our society
and could have devastating effects on the national economy.
Grantor believes that another approach may be explored as follows:
PERFECT OBLIGATION AS TO A HUMAN BEING
That which is borrowed is wealth. Labor created that wealth, so it is money notwithstanding its form.
Consideration is promised in advance by the Promissor of the Note, in the nature of principal and interest
payments for the consideration provided by the lender, which is his personal wealth created by his labor.
A Mortgage Note or Promissory Note secures the position of the lender and if there is default on the
promise to pay then the borrower has agreed to accept the strict foreclosure remedy provided by state
statutes.
Then the borrower obligated themselves to pay back the principal and pay for the use of it, in the form of
interest for the years over which the principal is to be paid back. When payments stop there is a prima
facie injury to the lender. When payments stop the lender has strict foreclosure procedure in state court to
remedy the pay back of the balance of the principal.
Judgment to foreclose on the property is granted upon the mere proof that payments have ceased as
promised. The property is sold to cover the unpaid balance; deficiency judgment may be needed. All is right
with the world. Here the lender would be prejudiced if complete and swift remedy were not available.
Absent such remedy the government would be party to placing the lender into a condition of involuntary
servitude to the borrower.
PERFECT OBLIGATION AS TO A BANK
In years past banks and savings and loans institutions enjoyed the remedy outlined above. The reason was
they were lending out money belonging to their depositors and there was prima facie injury to the
depositors upon the mere proof that payments had ceased. Thereby the bank as well as the government
would be party to creating a condition of involuntary servitude upon the depositors if strict foreclosure
remedy were not available. Today depositors are not in jeopardy of being injured when a person borrows
money from a bank. The bank does not lend their money, only their credit in the amount of the loan (paper
accounting). Hence no prima facie injury exists to either the depositors or the bank upon the mere proof that

payments cease. Injury is based upon the payments made as to the credit line.
PERFECT OR IMPERFECT OBLIGATION
A perfect obligation is one recognized and sanctioned by positive law; one of which the fulfillment can be
enforced by the aid of the law. But if the duty created by the obligation operates only on the moral sense,
without being enforced by any positive law, it is called an "imperfect obligation," and creates no right of
action, nor has it any legal operation. The duty of exercising gratitude, charity, and the other merely moral
duties are examples of this kind of obligation. Edwards v. Keaney, 96 U.S. 595, 600, 24 L.Ed. 793.
Government approved the Federal Reserve Bank, Inc., as the Central Banking system for the United States,
and its policy is reviewed by Congress albeit, in a haphazard manner. The Federal Reserve authorizes its
private money Federal Reserve Bank Notes to be used by lending institutions such as member banks, to
operate upon a system of fractionalizing. The nature of which is that they do not lend either their money or
the money of the depositors, the money is created out of thin air, by the mere stroke of a pen. When there is
no consideration in jeopardy of being returned, then the obligation is to make the bank injury proof, to the
extent of the obligation, which would be to make them whole.
The only legal obligation is based upon the moral issue, which under the law is an Imperfect Obligation, to
return to them their property, which isnt wealth, but credit. A Promissory Note is signed under "economic
compulsion" when, the "loan" will not be consummated unless and until the borrower signs it. Thus,
performing the act of signing a Promissory Note cannot be considered voluntary.
The discharging of the credit is based upon social, economic, and moral standards to make the bank whole,
if injury is claimed, in any court action where default on the Promissory Note is on record and where the
bank fails to verify an injury, the bank cannot enforce a promise to pay consideration where they provided
no consideration. For the bank to be able to force upon the defendant an amount over and above the credit,
is to force upon the defendants a debt that goes to the control of their labor against their will. This condition
would be Peonage, which has been abolished in this country.
(42 U.S.C. 1994, and 18 U.S.C. 1581.)
The question then arises as to when is the obligation discharged, to put the bank in a position, where there is
no record of injury to it?
THE CASE IS CLEAR
Conspiracy against rights: If two or more persons conspire to injure, oppress, threaten, or intimidate any
person in any State, Territory, Commonwealth, Possession, or District in the free exercise or enjoyment of
any right or privilege secured to him by the Constitution or laws of the United States, or because of his
having so exercised the same; or If two or more persons go in disguise on the highway, or on the premises
of another, with intent to prevent or hinder his free exercise or enjoyment of any right or privilege so
secured - They shall be fined under this title or imprisoned not more than ten years, or both; and if death
results from the acts committed in violation of this section or if such acts include kidnapping or an attempt
to kidnap, aggravated sexual abuse or an attempt to commit aggravated sexual abuse, or an attempt to kill,
they shall be fined under this title or imprisoned for any term of years or for life, or both, or may be
sentenced to death. [18, USC 241]
Deprivation of rights under color of law: Whoever, under color of any law, statute, ordinance, regulation,
or custom, willfully subjects any person in any State, Territory, Commonwealth, Possession, or District to
the deprivation of any rights, privileges, or immunities secured or protected by the Constitution or laws of
the United States, or to different punishments, pains, or penalties, on account of such person being an alien,
or by reason of his color, or race, than are prescribed for the punishment of citizens, shall be fined under
this title or imprisoned not more than one year, or both; and if bodily injury results from the acts committed
in violation of this section or if such acts include the use, attempted use, or threatened use of a dangerous

weapon, explosives, or fire, shall be fined under this title or imprisoned not more than ten years, or both;
and if death results from the acts committed in violation of this section or if such acts include kidnapping or
an attempt to kidnap, aggravated sexual abuse, or an attempt to commit aggravated sexual abuse, or an
attempt to kill, shall be fined under this title, or imprisoned for any term of years or for life, or both, or may
be sentenced to death. [18, USC 242]
Property rights of citizens: All citizens of the United States shall have the same right, in every State and
Territory, as is enjoyed by white citizens thereof to inherit, purchase, lease, sell, hold, and convey real and
personal property. [42 USC 1982]
Civil action for deprivation of rights: Every person who, under color of any statute, ordinance, regulation,
custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected,
any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any
rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in
an action at law, suit in equity, or other proper proceeding for redress, except that in any action brought
against a judicial officer for an act or omission taken in such officer's judicial capacity, injunctive relief
shall not be granted unless a declaratory decree was violated or declaratory relief was unavailable. For the
purposes of this section, any Act of Congress applicable exclusively to the District of Columbia shall be
considered to be a statute of the District of Columbia. [42 USC 1983]
Conspiracy to interfere with civil rights: Depriving persons of rights or privileges: If two or more persons
in any State or Territory conspire or go in disguise on the highway or on the premises of another, for the
purpose of depriving, either directly or indirectly, any person or class of persons of the equal protection of
the laws, or of equal privileges and immunities under the laws; or for the purpose of preventing or hindering
the constituted authorities of any State or Territory from giving or securing to all persons within such State
or Territory the equal protection of the laws; or if two or more persons conspire to prevent by force,
intimidation, or threat, any citizen who is lawfully entitled to vote, from giving his support or advocacy in a
legal manner, toward or in favor of the election of any lawfully qualified person as an elector for President
or Vice President, or as a Member of Congress of the United States; or to injure any citizen in person or
property on account of such support or advocacy; in any case of conspiracy set forth in this section, if one
or more persons engaged therein do, or cause to be done, any act in furtherance of the object of such
conspiracy, whereby another is injured in his person or property, or deprived of having and exercising any
right or privilege of a citizen of the United States, the party so injured or deprived may have an action for
the recovery of damages occasioned by such injury or deprivation, against any one or more of the
conspirators. [42 USC 1985(3)]
Action for neglect to prevent: Every person who, having knowledge that any of the wrongs conspired to
be done, and mentioned in section 1985 of this title, are about to be committed, and having power to
prevent or aid in preventing the commission of the same, neglects or refuses so to do, if such wrongful act
be committed, shall be liable to the party injured, or his legal representatives, for all damages caused by
such wrongful act, which such person by reasonable diligence could have prevented; and such damages
may be recovered in an action on the case; and any number of persons guilty of such wrongful neglect or
refusal may be joined as defendants in the action; and if the death of any party be caused by any such
wrongful act and neglect, the legal representatives of the deceased shall have such action therefore, and may
recover not exceeding $5,000 damages therein, for the benefit of the widow of the deceased, if there be one,
and if there be no widow, then for the benefit of the next of kin of the deceased. But no action under the
provisions of this section shall be sustained which is not commenced within one year after the cause of
action has accrued. [42 USC 1986]
COURT: The person and suit of the sovereign; the place where the sovereign sojourns with his regal
retinue, wherever that may be. [Black's Law Dictionary, 5th Edition, page 318.]

COURT: An agency of the sovereign created by it directly or indirectly under its authority, consisting of
one or more officers, established and maintained for the purpose of hearing and determining issues of law
and fact regarding legal rights and alleged violations thereof, and of applying the sanctions of the law,
authorized to exercise its powers in the course of law at times and places previously determined by lawful
authority. [Isbill v. Stovall, Tex.Civ.App., 92 S.W.2d 1067, 1070; Black's Law Dictionary, 4th Edition, page
425]
COURT OF RECORD: To be a court of record a court must have four characteristics, and may have a
fifth. They are:
a.
A judicial tribunal having attributes and exercising functions independently of the person of the magistrate
designated generally to hold it [Jones v. Jones, 188 Mo.App. 220, 175 S.W. 227, 229; Ex parte Gladhill, 8
Metc. Mass., 171, per Shaw, C.J. See, also, Ledwith v. Rosalsky, 244 N.Y. 406, 155 N.E. 688, 689] [Black's
Law Dictionary, 4th Ed., 425, 426]
b.
Proceeding according to the course of common law [Jones v. Jones, 188 Mo.App. 220, 175 S.W. 227, 229;
Ex parte Gladhill, 8 Metc. Mass., 171, per Shaw, C.J. See, also, Ledwith v. Rosalsky, 244 N.Y. 406, 155
N.E. 688, 689] [Black's Law Dictionary, 4th Ed., 425, 426]
c.
Its acts and judicial proceedings are enrolled, or recorded, for a perpetual memory and testimony. [3 Bl.
Comm. 24; 3 Steph. Comm. 383; The Thomas Fletcher, C.C.Ga., 24 F. 481; Ex parte Thistleton, 52 Cal 225;
Erwin v. U.S., D.C.Ga., 37 F. 488, 2 L.R.A. 229; Heininger v. Davis, 96 Ohio St. 205, 117 N.E. 229, 231]
d.
Has power to fine or imprison for contempt. [3 Bl. Comm. 24; 3 Steph. Comm. 383; The Thomas Fletcher,
C.C.Ga., 24 F. 481; Ex parte Thistleton, 52 Cal 225; Erwin v. U.S., D.C.Ga., 37 F. 488, 2 L.R.A. 229;
Heininger v. Davis, 96 Ohio St. 205, 117 N.E. 229, 231.] [Black's Law Dictionary, 4th Ed., 425, 426]
e.
Generally possesses a seal. [3 Bl. Comm. 24; 3 Steph. Comm. 383; The Thomas Fletcher, C.C.Ga., 24 F.
481; Ex parte Thistleton, 52 Cal 225; Erwin v. U.S., D.C.Ga., 37 488, 2 L.R.A. 229; Heininger v. Davis, 96
Ohio St. 205, 117 N.E. 229, 231.] [Black's Law Dictionary, 4th Ed., 425, 426]

Taking into consideration all of the documentation contained herein it is


abundantly clear that no foreclosure action is warranted, justified or lawful. There
is no injury to the purported lender. A court of record should decide what actions
should and must be taken as a result of the unlawful actions of the Defendant.
ALL TRANSACTIONS SINCE THE ULTRA VIRES ACTION MAY BE NULL AND VOID
Does it not mean that all the transactions following the ultra vires action have been null and void? And
if so, does that not mean that the trillions generated off the back of funds that are owned by others (e.g.
Ambassador Wanta) are all not merely illegally procured, but also that the transactions themselves are
null and void? And to complicate matters even further, the insurance companies contracts contain
clauses which state that policies are in effect ONLY so long as corporate banking charters are in effect
and/or the corporation is in good standing.

Nor can it be complacently taken for granted any longer by the criminalist classes that American Courts
are now so notoriously corrupt, and the Judiciary so irrevocably compromised, that they can be relied
upon to sustain the illegal status quo indefinitely.
FIDDLING OF BANKS BOOKS DOES NOT CREATE A CONTRACT
In other words, all of a sudden; the banks books are balanced, since the bank possesses a credit and a
debit that suddenly match. But that process does not create a contract, which is what the court requires
to be filed, in order to support any request for foreclosure PROVIDED A CONTRACT IS
REQUESTED BY THE PERSON BEING FORECLOSED UPON, WHEN THE FORECLOSURE IS
BEING CHALLENGED IN COURT.
The crucial point here is that when the person being foreclosed upon requests the contract when
challenging the foreclosure in court, he or she will be able thereby to demonstrate to the court that the
bank cannot provide any such document.
In the case cited with Deutsche Bank, they could not provide the contract because it did not possess a
contract. Accordingly, the court properly dismissed the foreclosure process. Cases were cited out of
Ohio.
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
JACALYN S. NOSEK, Debtor
NO. 08-40095-WGY
Vs.
AMERIQUEST MORTGAGE CO.; et al.
Buchalter contends that the Bankruptcy Courts ruling
suffers from hindsight bias. It was not until 2005 that any
court required a servicer to identify itself as an authorized
agent.7 See In re Parrish, 326 B.R. 708, 720 (Bankr. N.D. Ohio
2005) (holding that [a] claimant who is a servicer must, in
addition to establishing the rights of the holder, identify
itself as an authorized agent for the holder).
7 This argument is singularly unpersuasive. It is
tantamount to saying, Weve been making these misrepresentations
for years. Until 2005, no one seemed to care.
Case 4:08-cv-40095-WGY Document 21 Filed 05/26/2009 Page 17 of 20
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
IN RE FORECLOSURE CASES

CASE NO. NO.1:07CV2282


07CV2532
07CV2560
07CV2602
07CV2631
07CV2638
07CV2681
07CV2695
07CV2920
07CV2930
07CV2949
07CV2950
07CV3000
07CV3029
JUDGE CHRISTOPHER A. BOYKO
OPINION AND ORDER
CHRISTOPHER A. BOYKO, J.:
On October 10, 2007, this Court issued an Order requiring Plaintiff-Lenders in a
number of pending foreclosure cases to file a copy of the executed Assignment demonstrating
Plaintiff was the holder and owner of the Note and Mortgage as of the date the Complaint
was filed, or the Court would enter a dismissal.
So the message to all who are vexed by this fraudulent finance offensive is that no loan can be
foreclosed upon without a contract to back it up: and no contract exists in these cases. However it is
essential for the foreclosure to be challenged at the hearing and that the contract be requested. This is
usually done in America by means of a motion lodged prior to the date of the hearing, which the
Plaintiff has done in State Court Proceedings.
COURTS WILL DO THE RIGHT THING IF THEY HAVE NO CHOICE
The Court will (perhaps surprisingly to some) usually do the right thing if the right documents are
placed before it by means of the proper procedure, as it has no choice in the matter. On the other hand,
the Court does not have to answer a question that it is not asked to adjudicate upon or to take into
consideration. This means that even if the Judge may be aware that no contract exists to back up the
foreclosure, UNLESS THE REQUEST FOR THE CONTRACT IS MADE, the foreclosure will be
granted. Therefore those concerned must always ensure that a motion challenging the foreclosure and
requesting the contract MUST be lodged prior to the hearing.
In the Ohio report cited, the author implies, but does not actually state, that the reason the bank did not
possess the contract was that the contract had been collectivized as the bank had been a purchaser of
some of the packaged sub prime derivatives. It can now be seen that these so-called mortgage-backed,
collectivized, synthetic derivatives that have been sold around the world which are based on loans,
have nothing to back them up and are therefore worthless. Some notes have been paid by transfer and
double dipping that is against the law(s)...

Summary of the Law of Voids in the United States:


What follows is a brief summary giving details of how to stop a foreclosure or else to get ones house
back after it has been taken through the invalid Court process.
Before a Court (Judge) can proceed judicially, jurisdiction must be complete consisting of two
opposing parties (not their Attorneys: although Attorneys can enter an appearance on behalf of a party,
only the parties can testify, and until the Plaintiff testifies, the Court has no basis upon which to rule
judicially). The two halves of subject matter jurisdiction equate to the statutory or common law
authority that the action is brought under (the theory of indemnity) and the sworn testimony of a
competent fact witness concerning the injury suffered (= the cause of action). If a jurisdictional failing
appears on the face of the record, the matter is void, subject to vacation with damages, and can never be
time-barred. So a question that naturally occurs is:
International Currency Review, World Reports Limited [see this website] Volume 31, Numbers 3 & 4,
Fourth Quarter 2006, pages 178-179; and International Currency Review, Volume 33, Numbers 1 and
2, September 2007, pages 383 and 285.
(2) E.g. Transamerica Insurance Co. v. South, 975 F. 2d 321, 325-326 (7th Circuit 1992); United States
v. Daniels, 902 F. 2d 1238, 1240 (7th Circuit 1990); King v, Ionization International, Inc., 825 F. 2d
1180, 1188 (7th Circuit 1987); and: Central Laborers Pension and Annuity Funds v. Griffee, 198 F. 3d
642, 644 (7th Circuit 1999).
(3) Wahl v. Round Valley Bank 38 Ariz. 411, 300 P. 955 (1931); Tube City Mining & Milling Co. v.
Otterson, 16 Ariz. 305, 146p 203 (1914); and Millken v. Meyer, 311 U.S. 457, 61 S. CT. 339, 85 L. Ed.
2d 278 (1940).
Fraud in the Inducement: is intended to and which does cause one to execute an instrument, or
make an agreement The misrepresentation involved does not mislead one as the paper he signs but
rather misleads as to the true facts of a situation, and the false impression it causes is a basis of a
decision to sign or render a judgment Source: Steven H. Gifis, Law Dictionary, 5th Edition,
Happauge: Barrons Educational Series, Inc., 2003, s.v.: Fraud.
Fraud in Fact by Deceit (Obfuscation and Denial) and Theft:
ACTUAL FRAUD. Deceit. Concealing something or making a false representation with an evil
intent [scanter] when it causes injury to another Source: Steven H. Gifis, Law Dictionary, 5th
Edition, Happauge: Barrons Educational Series, Inc., 2003, s.v.: Fraud.
Theft by Deception and Fraudulent Conveyance:
THEFT BY DECEPTION:
FRAUDULENT CONCEALMENT The hiding or suppression of a material fact or circumstance
which the party is legally or morally bound to disclose.
The test of whether failure to disclose material facts constitutes fraud is the existence of a duty, legal
or equitable, arising from the relation of the parties: failure to disclose a material fact with intent to
mislead or defraud under such circumstances being equivalent to an actual fraudulent
concealment.
To suspend running of limitations, it means the employment of artifice, planned to prevent inquiry or
escape investigation and mislead or hinder acquirement of information disclosing a right of action, and
acts relied on must be of an affirmative character and fraudulent.
Source: Black, Henry Campbell, M.A., Blacks Law Dictionary, Revised 4th Edition, St Paul: West
Publishing Company, 1968, s.v. Fraudulent Concealment.

FRAUDULENT CONVEYANCE:
FRAUDULENT CONVEYANCE A conveyance or transfer of property, the object of which is to
defraud a creditor, or hinder or delay him, or to put such property beyond his reach.
Conveyance made with intent to avoid some duty or debt due by or incumbent on person (entity)
making transfer.
Source: Black, Henry Campbell, M.A., Blacks Law Dictionary, Revised 4th Edition, St Paul: West
Publishing Company, 1968, s.v. Fraudulent Conveyance.

FORECLOSURES AT THE TABLE


Beginning at the Escrow closing table we become victims of Predatory Lenders. We sit down, and
before we leave the Escrow Company we believe we have borrowed enough money to buy the
American Dream Our home.
Does it ever occur to anyone to actually read the Deed of Trust or the Mortgage Note in detail
without an attorney and take the responsibility to know exactly what we are signing?
DEED OF TRUST
A. Security Instrument means this document, which is dated together with all Riders to this
document.
B. Borrower is the American Dream Buyer and/or Mrs. American Dream Buyer.
Borrower is the trustor under this Security Instrument.
C. Lender is ABC MORTAGE Lender is a CORPORATION under the law of a federal savings
bank. And the address is 2345 USA Street, Any City, and Any State.
D. Trustee is You Got Screwed Trust Company
E. MERS is Mortgage Electronic Registration Systems, Inc. MERS is a separate corporation that
is acting solely as a nominee for Lender and Lenders successors and assigns, MERS is the
Beneficiary under this Security Instrument. MERS address is 1595 Springhill Road #310,
Vienna, VA 22182.
F. Note means the promissory note signed by Borrower and dated who knows when, and the
note states the Borrower owes Lender A bazillion dollars, plus interest. Borrower has
promised to pay this debt in regular Periodic Payments and to pay the debt in full not later than
500 years from now...
G. Property means...
H. Loan means...
I. Riders means...
J. Applicable Law means...
K. Community Association Dues , Fees and Assessments means
L. On and On and On...
1.24.

All the awesome things you agreed to within the Deed of Trust.

15. Notices. All notices given by Borrower or Lender in connection with this Security Instrument
must be in writing. Any notice to Borrower in connection with this Security Instrument shall be
deemed to have been given to Borrower when mailed by first class mail or when actually delivered
to Borrowers notice address if sent by other means.

BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this
Security Instrument and in any Rider executed by Borrower and recorded with it.
______________________________ Borrower
EXPLAINATION OF
DEED OF TRUST
1.

The Deed of Trust is NOT a contract; it is only signed by one party. A promissory agreement
between two or more persons that creates, modifies, or destroys a legal relation. An agreement
between two or more parties, preliminary step in making of which is offer by one and
acceptance by other, in which minds of parties meet and concur in understanding of terms. Lee
v, Travelers Ins. Co. of Hartford, Conn.

2.

Who did you have a Meeting of the Minds with in order to create this contract? Is required to
make a contract is not based on secret purpose or intention on the part of one of the parties,
stored away in his mind and not brought to the attention of the other party, but must be based
on purpose and intention which has been known or which from all the circumstances should be
known. McClintock v. Skelly Oil Co.

3.

Who did you make the agreement with and who do you have to perform for?

4.

Is this an Unconscionable Contract? One which no sensible man not under delusion, duress,
or in distress would make, and such as no honest and fair man would accept. The lenders,
escrow companies, trustees, and beneficiarys accept these agreements beings they are not
honest or fair. Franklin Fire Ins. Co. v. Noll.

5.

Unilateral contract: One in which one party makes an express engagement or undertakes a
performance, without receiving in return any express engagement or promise of performance
from the other. There is no other! The alleged lender indicates they have given you a loan, and
you have promised to pay it back. They didnt give you anything.

Without a contract there is no Deed of Trust, without a Deed of Trust there is no lien or
Security Interest, therefore what you have created is a one sided agreement with yourself. What
you create you can un-create, just as you would a WILL.

GROUND 2: R.I.C.O.
Defendant(s) have by their acts/actions, past behavior(s) Racketeering in State Court Proceedings
including the State in this case as well including Judges an their bar friends collection attorneys.

Agency Holding Corp. v. Malley-Duff & Associates, 107 SUPREME COURT 2759, 483 U.S. 143,
151 (1987) and Rotella v. Wood et al., 528 U.S. 549 (2000).

Abraham v. Singh, 480 F.3d 351 (5th Cir. 2007) (person / enterprise distinction).
Bridge v. Phoenix Bond & Indemnity Co., 128 S.Ct. 2131 (2008) (reasonable
reliance).
Canyon County v. Syngenta Seeds, Inc., 519 F.3d 969 (9th Cir. 2008) (proximate
cause / injury to property).
City of New York v. Smokes-Spirits.com, Inc., 541 F.3d 425 (2d Cir. 2008)
(operation and management / injury to business or property).
Cory v. Aztec Steel Building, Inc., 468 F.3d 1226 (10th Cir. 2006), cert. denied, 127
S. Ct. (2007) (accrual of civil RICO claims).
Dahlgreen v. First National Bank, 533 F.3d 681, 690 (8th Cir. 2008) (operation
and management).
Limestone Development Corp. v. Village of Lemont, Illinois, 520 F.3d 797 (7th Cir.
2008) (accrual / continuing violations).
Odom v. Microsoft Corp., 486 F.3d 541 ( 9th Cir. 2007) (enterprise / racketeering
activity distinction).
RWB Services, LLC v. Hartford Computer Group, Inc., 538 F.3d 681 (7th Cir.
2008) (intervening third-party victims)
Sanchez v. Triple-S Management, Corp., 492 F.3d 1 (1st Cir. 2007) (mail and wire
fraud / attempted extortion).
Spool v. World Child Intern. Adoption Agency, 520 F.3d 178 (2d Cir. 2008)
(continuity of pattern).
Sybersound Records, Inc. v. UAV Corp., 517 F.3d 1137 (9th Cir. 2008) (proximate
cause / section 1962(a)).
Walter v. Drayson, 538 F.3d 1244 (9th Cir. 2008) (operation and management).
Wilkie v. Robbins, 127 S.Ct. 2588 (2007) (extortion vs. legitimate government
power).
Plaintiff's preliminary RICO case statement
Plaintiff(s) in this complaint, testifies to injury to property and business by reason
of acts that violate section 4 of the Clayton Act. See Attick v. Valeria Associates,
L.P., S.D. N.Y. 1992, 835 F. Supp. 103. Plaintiffs, has articulated violations of
racketeering laws, will testify that the violations injured property warranting treble
damages. See Avirgan v. Hull, C.A. 11 (Fla.) 1991, 932 F.2d 1572. In naming
Defendants, Plaintiffs, has established that an enterprise exists which undeniably
affects interstate commerce. See Yellow Bus Lines, Inc. v. Drivers, Chauffeurs &
Helpers Local Union 639, C.A.D.C. 1990, 913 F.2d 948, 286 U.S. App. D.C. 182,

certiorari denied 111 S.Ct. 2839, 501 U.S. 1222, 115 L.Ed. 2D 1007. Plaintiffs, has
standing to sue under RICO as Defendants have shown violations of RICO, injury
to property, and causation of the injury by the violations. See Hecht v. Commerce
Clearing House, Inc. C.A. 2 (N.Y.) 1990, 897 F.2d 21, 100 A.L.R. Fed. 655.
Plaintiffs, has perfected a RICO claim by showing the existence of a RICO
enterprise, showing a pattern of racketeering activity: fraud, shown nexus between
the defendants and the pattern of frauds, and shown resulting injury to property.
See Standard Chlorine of Delaware, Inc. v. Sinibaldi, D.Del. 1992, 821 F. Supp.
232. Plaintiffs, has demonstrated that, Plaintiffs, has sustained injuries as
proximate result of the pattern of frauds by the defendants. See Jordan v. Herman,
F.D. Pa. 1992, 792 F. Supp. 380. In naming Defendants, does illicit business
benefiting the syndicate to which Defendants, et al.,

belong, directly and

indirectly. The syndicate is able to recoup and profit by Defendants investment


affecting interstate commerce. See Nassau-Suffolk Ice Cream, Inc. v. Integrated
Resources, Inc. S.D.N.Y. 1987, 114 F.R.D. 684. Defendants, clearly articulated
Defendants, making plaintiff a target of fraud and resulting de jure property losses.
See Polletier v. Zweifel, C.A. 11 (Ga.) 1991, 921 F.2d 1465, rehearing denied 931
F.2d 901, certiorari denied 112 S.Ct. 167, 502 U.S. 855, 116 L.Ed. 131. The causein-fact that but-for the chicanery of the enterprise members including Defendants,
et al., Plaintiffs, would have not been deprived of personal and business interests,
business opportunities and would not have incurred tangible losses is sufficient to
state factual causation for provision of RICO act providing for treble damages. See
Khurana v. Innovative Heath Care Systems, Inc., C.A. 5 (La.) 1997, 130 F.3d 143,
vacated 119 S.Ct. 442, 525 U.S. 979, 142 L.Ed. 2d 397, on remand 164 F.3d 900.
Plaintiffs, reliance on traditional principles of proximate causation applying to

RICO cases is illustrated in the well pleaded testimony that Plaintiffs, was the
target of extortion and his property interests were damaged by the predicate acts of
the defendants. See In re American Honda Motor Co., Inc. Dealership Relations
Litigation, D. Md. 1996, 941 F.Supp. 528. There exists an undeniable relationship
between the acts of the defendants and the damage to property of Plaintiffs, See
Red Ball Interior Demolition Corp. v. Palmadessa, S.D.N.Y. 1995, 908 F.Supp.
1226. The damage caused by the defendants was the natural and reasonably
foreseeable consequence of the frauds perpetrated by the defendants. See Protter v.
Nathans Famous Systems, Inc. E.D. N.Y. 1995, 904 F.Supp. 101. The frauds
perpetrated by the defendants were the legal cause of Jeffrey Brown, being the
target of fraud, being defrauded of property interests, and related damages. See
Prudential Ins. Co. of America v. U.S. Gypsum Co. D.N.J. 1993, 828 F.Supp. 287.
The enterprise to which all the defendants belong is evident to a high degree and it
is also evident to a high degree that unknown at this time associates such as
Individual defendants acted as a continuing unit. See Compagnie de Reassuarance
Dlle de France v. New England Reinsurance Corp. D. Mass. 1993, 825 F.Supp.
370. It is undeniable that Defendants Receives money for defrauding parties such
as Plaintiffs, and Defendants receives compensation to collateral enterprises
represents the necessary investment in the class of business to which all the
defendants belong for the continuing privilege of defrauding people of their
legitimate property interests. See Grand Cent. Sanitation, Inc. v. First Nat. Bank of
Palmerton, M.D.Pa. 1992, 816 F.Supp. 299. Undeniably, the defendants have used
the United States Mail Service for purposes of fraud and extortion.

GROUND 3. Bank Fraud, Mortgage Fraud in State Court Proceedings. Plaintiffs made payments

under the Home Affordable Modification Program better known as TARP on time to their Mortgage
payments some were returned unpaid.
STANDARD OF REVIEW
Wells Fargo Bank, N.A. v. Farmer, 18 Misc.3d 1124(A) (N.Y.Sup. 02/04/2008)
From Wells Fargo:
Arthur M. Schack, J, delivered the opinion of the court.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law 431
Plaintiff's application, upon the default of all defendants, for an order of reference for the premises
located at 363 Madison Street, Brooklyn, New York (Block 1820, Lot 76, County of Kings) is denied
without prejudice, with leave to renew upon providing the Court with: a copy of a valid assignment of
the instant mortgage and note to plaintiff WELLS FARGO BANK, N.A., AS TRUSTEE (WELLS
FARGO); a satisfactory explanation to questions with respect to the two December 8, 2004
assignments of the instant mortgage and note from ARGENT MORTGAGE COMPANY, LLC
(ARGENT) to AMERIQUEST MORTGAGE COMPANY (AMERIQUEST), and then from
AMERIQUEST to plaintiff WELLS FARGO; and satisfactorily answering certain questions regarding
a May 5, 2005 limited power of attorney from WELLS FARGO, as Trustee, to LITTON LOAN
SERVICING, LP, as Servicer.
Defendant HILLARY FARMER borrowed $460,000.00 from ARGENT on December 3, 2004. The
note and mortgage were recorded in the Office of the City Register, New York City Department of
Finance on December 21, 2004 at City Register File Number (CRFN) 2004781656. Five days
subsequent, on December 8, 2004, two alleged assignments of the instant mortgage and note took
place. First, ARGENT allegedly assigned the note and mortgage to AMERIQUEST. Then
AMERIQUEST allegedly assigned the note and mortgage to plaintiff WELLS FARGO. For reasons
unexplained to the Court, both of these assignments were not recorded for more than fourteen months.
Then, they were both recorded at that same time and sequentially, on February 6, 2006, at CRFN
2006000100653 and CRFN 2006000100654.
While both ARGENT and AMERIQUEST list on the assignments offices at different locations in
Orange, California, both of the assignments were executed by one Jose Burgos, "as Agent," before the
same notary public, in Westchester County, New York. Both of these assignments failed to have a
power of attorney attached. Thus, these assignments are invalid and plaintiff WELLS FARGO lacks
standing to bring the instant foreclosure action.
If plaintiff can cure the assignment defect, the Court needs to know: by what authority did Mr. Burgos
act "as Agent" for both ARGENT and AMERIQUEST? ; why is the same person acting on the same
day as the assignor and the assignee of two mortgage behemoths? ; and, why do corporations located in
Orange, California have assignments executed on the other side of the continent, in Westchester
County, New York?
Assuming that plaintiff can provide answers to the above questions, plaintiff has to then answer various
questions about LITTON, its alleged servicer. The instant application for an order of reference contains
an "affidavit of merit and amount due" by Debra Lyman, Vice President of LITTON, attorney in fact

for WELLS FARGO. The Limited Power of Attorney WELLS FARGO dated May 5, 2005, attached to
the instant application for an order of reference, states that WELLS FARGO: in its capacity as trustee
under certain Servicing Agreements relating to Park Place Securities Inc. Asset Backed Pass through
Certificates, Series 2005-WLL1 dated as of March 1, 2005 (the "Agreement") by and among Park
Place Securities, Inc. as ("Depositor") and Litton Loan Servicing LP as ("Servicer") and Wells Fargo
Bank, N.A. as Trustee hereby constitutes and appoints: LITTON LOAN SERVICING LP its true and
lawful attorney-in-fact . . . to execute and deliver on behalf of [WELLS FARGO] any and all of the
following instruments [documents with respect to foreclosures] to the extent consistent with the terms
and conditions of the Agreement [sic].
Since the Court does not know for whom WELLS FARGO is the Trustee, the Court doesn't know if the
above-named March 1, 2005 Agreement refers to the instant mortgage. A Trustee is defined as "one
who, having legal title to property, holds it in trust for the benefit of another and owes a fiduciary duty
to that beneficiary" (Black's Law Dictionary 1519 [7th ed 1999]). Thus, the Court needs to know for
whom WELLS FARGO holds the property in trusted. Further, to determine if Ms. Lyman had the
authority to execute her affidavit on behalf of plaintiff WELLS FARGO, the Court needs to inspect the
March 1, 2005 Servicing Agreement. (EMC Mortg. Corp. v Batista, 15 Misc 3d 1143 (A), [Sup Ct,
Kings County 2007]; Deutsche Bank Nat. Trust Co. v Lewis, 14 Misc 3d 1201 (A) [Sup Ct, Suffolk
County 2006]).
Plaintiff WELLS FARGO must have "standing" to bring this action. The Court of Appeals (Saratoga
County Chamber of Commerce, Inc. v Pataki, 100 NY2d, 901, 812 [2003]), cert. denied 540 US 1017
[2003]) held that "[s]tanding to sue is critical to the proper functioning of the judicial system. It is a
threshold issue. If standing is denied, the pathway to the courthouse is blocked. The plaintiff who has
standing, however, may cross the threshold and seek judicial redress." In Carper v Nussbaum, 36 AD3d
176, 181 (2d Dept 2006), the Court held that "[s]tanding to sue requires an interest in the claim at issue
in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the
litigant's request." If a plaintiff lacks standing to sue, the plaintiff may not proceed in the action. (Stark
v Goldberg, 297 AD2d 203 [1d Dept 2002]).
In the instant action, the two December 8, 2004 assignments, from ARGENT to AMERIQUEST and
then AMERIQUEST to WELLS FARGO, are defective. This affects WELLS FARGO's standing to
bring this action. The recorded assignments are both by Jose Burgos "as Agent." The assignments lack
any power of attorney granted by either ARGENT or AMERIQUEST to Jose Burgos to act as their
agents. Real Property Law (RPL) 254 (9) states: Power of attorney to assignee. The word "assign" or
other words of assignment, when contained in an assignment of a mortgage and bond or mortgage and
note, must be construed as having included in their meaning that the assignor does thereby make,
constitute and appoint the assignee the true and lawful attorney, irrevocable, of the assignor, in the
name of the assignor, or otherwise, but at the proper costs and charges of the assignee, to have, use and
take all lawful ways and means for the recovery of the money and interest secured by the said mortgage
and bond or mortgage and note, and in case of payment to discharge the same as fully as the assignor
might or could do if the assignment were not made.
Therefore, to have a proper assignment of a mortgage by an authorized agent, a power of attorney is
necessary to demonstrate how the agent is vested with the authority to assign the mortgage. "No special
form or language is necessary to effect an assignment as long as the language shows the intention of the
owner of a right to transfer it [Emphasis added]." (Tawil v Finkelstein Bruckman Wohl Most &
Rothman, 223 AD2d 52, 55 [1d Dept 1996]; see Suraleb, Inc. v International Trade Club, Inc., 13
AD3d 612 [2d Dept 2004]).

To foreclose on a mortgage, a party must have title to the mortgage. The instant assignments are both
nullities. The Appellate Division, Second Department (Kluge v Fugazy, 145 AD2d 537, 538 [2d Dept
1988]), held that a "foreclosure of a mortgage may not be brought by one who has no title to it and
absent transfer of the debt, the assignment of the mortgage is a nullity." Citing Kluge v Fugazy, the
Court (Katz v East-Ville Realty Co., 249 AD2d 243 [1st Dept 1998], held that "plaintiffs attempt to
foreclose upon a mortgage in which he had no legal or equitable interest was without foundation in law
or fact."
It is clear that plaintiff WELLS FARGO, with the invalid assignments of the instant mortgage and note
from ARGENT, lacks standing to foreclose on the instant mortgage. The Court, in Campaign v Barba,
23 AD3d 327 [2d Dept 2005], held that "[t]o establish a prima facie case in an action to foreclose a
mortgage, the plaintiff must establish the existence of the mortgage and the mortgage note,
ownership of the mortgage, and the defendant's default in payment." (See Household Finace
Realty Corp. Of New York v Wynn, 19 AD3d 545 [2d Dept 2005]; Sears Mortgage Corp. v Yahhobi, 19
AD3d 402 [2d Dept 2005]; Ocwen Federal Bank FSB v Miller, 18 AD3d 527. [2d Dept 2005]; U.S.
Bank Trust Nat. Ass'n v Butti, 16 AD3d 408 [2d Dept 2005]; First Union Mortgage Corp. v Fern, 298
AD2d 490 [2d Dept 2002]; Village Bank v Wild Oaks Holding, Inc., 196 AD2d 812 [2d Dept 1993].
Accordingly, it is ORDERED that the application of plaintiff WELLS FARGO BANK, N.A., AS
TRUSTEE, for an order of reference for the premises located at 363 Madison Street, Brooklyn, New
York (Block 1820, Lot 76, County of Kings) is denied without prejudice, and it is further ORDERED
that leave is granted to plaintiff WELLS FARGO BANK, N.A., AS TRUSTEE, to renew its application
for an order of reference for the premises located at 363 Madison Street, Brooklyn, New York (Block
1820, Lot 76, County of Kings), upon presentation to the Court, within forty-five (45) days of this
decision and order of: (1) a proper assignment of the instant mortgage and note to plaintiff, WELLS
FARG0 BANK, N.A, AS TRUSTEE, and compliance with the statutory requirements of CPLR 3215
(f) by an affidavit of facts executed by someone with authority to execute such an affidavit: (2) an
affidavit from an officer of plaintiff, WELLS FARG0 BANK, N.A, AS TRUSTEE, explaining for
whom WELLS FARGO BANK, N.A. is acting as Trustee, why Jose Burgos acted as both an assignor
and assignee on December 8, 2004, and, why the December 8, 2004 assignments were executed in
Westchester County, New York, and not Orange, California; and (3), if the affidavit of facts is executed
by a loan servicer, a copy of the power of attorney to the loan /servicer and the Servicing Agreement
authorizing the affiant to act in the instant foreclosure action.
REFERANCE
Mortgage fraud may be perpetrated by one or more participants in a loan transaction, including the
borrower; a loan officer who originates the mortgage; a real estate agent, appraiser, a title or escrow
representative or attorney; or by multiple parties as in the example of the fraud ring described above.
Dishonest and non-reputable stakeholders may encourage and assist borrowers in committing fraud
because most participants are typically compensated only when a transaction closes.
During 2003 The Money Programme of the BBC in the UK uncovered systemic mortgage fraud
throughout HBOS. The Money Programme found that during the investigation brokers advised the
undercover researchers to lie on applications for self-certified mortgages from, among others, The
Royal Bank of Scotland, The Mortgage Business and Birmingham Midshires Building Society[2]
In 2004, the FBI warned that mortgage fraud was becoming so rampant that the resulting "epidemic" of

crimes could trigger a massive financial crisis.[3] According to a December 2005 press release from the
FBI, "mortgage fraud is one of the fastest growing white collar crimes in the United States".[4]
The number of FBI agents assigned to mortgage-related crimes increased by 50 percent between 2007
and 2008. [5] In June 2008, The FBI stated that its mortgage fraud caseload has doubled in the past
three years to more than 1,400 pending cases. [6] Between 1 March and 18 June 2008, 406 people were
arrested for mortgage fraud in a FBI sting across the country.
THE HOBBS ACT18 U.S.C. 1951
R.I.C.O.
FRAUD
CONSPIRACY/OBSTRUCTION OF JUSTICE
TAX FRAUD, MONEY LAUNDERING, WIRE FRAUD, PERJURY,
U.S. Patriot Act Title III
PETITION IN THE NATURE OF A SUIT FOR DEPRIVATION
OF FEDERALLY PROTECTED RIGHTS TITLE 42 USC 1983, 1981, 1985, 1988, TITLE 18 USC
241, 242, 1512, FOR INJUNCTIVE AND DECLARATORY RELIEF AND OTHER DAMAGES AS
THE COURT SHALL DETERMINE REASONABLE, LAWFUL, AND JUST
GROUND 4. Due Process Violations and Violations of TARP. (Home Modification Program)
N.Y. Supreme Court Blocks Foreclosure Due To Predatory Lending Violations
In a recent potentially precedent-setting decision, New York Supreme Court Justice, Joseph Maltese
denied a banks motion to foreclose on a sub-prime mortgage due to several predatory lending
violations.
In the LaSalle Bank N.A. v. Shearon Case (No.100255/2007, 2008 WL 268449), the lender LaSalle
Bank, moved for summary judgment in its foreclosure action against David and Karen Shearon. Not
only did Justice Maltese dismiss the foreclosure action by the lender, but also granted the homeowners
summary judgment on their counter claim that the lender violated New York predatory lending law.
The Judge ordered a hearing to assess damages against the bank. The borrower may be entitled to
receive damages including all of the interest paid, the closing costs charged for the loan and a refund of
any amounts paid. Because the bank engaged in predatory lending practices, the mortgage and loan
may be voided, thus stripping the lender of any right to collect, receive or retain any principal or
interest. This also gives the borrower the ability to recover any payments made under the agreement.
Details of the Purchase
In January 2006, Karen and David Shearon bought their first home in Staten Island New York for
$335,000. The sales contract however, listed a purchase price of $355,100.00, which included a
$20,100 "sellers concession" used to pay closing costs associated with obtaining the loan. The sale
was ultimately financed with two loans. One loan for $284,000 with a fixed-to-adjustable rate feature
and a second for $71,000 at a fixed rate in excess of 10%. Total points and fees financed on the loan
were approximately 5.4% of the total amount borrowed.

Although the Shearons combined annual income was only $30,000, their mortgage broker assured
them that they would qualify for traditional loan products with fixed interest rates and that he was
"shopping around for the best rates." Despite their strong credit scores, and the assurances of their
broker, the Shearons were given a high-cost loan typically assigned to sub-prime borrowers.
The borrowers attorney said his clients tried to back out of the loan prior to closing but were told
theyd lose their $5,000 deposit and could be sued if they didnt go through with the agreement. They
had also already given up their apartment lease. "I feel that I was bullied into accepting the way it
was," said David Shearon. They ended up closing the loan with WMC Corporation.
Less than two years after closing their loan, when the Shearons failed to make their monthly mortgage
payments, LaSalle Bank as loan trustee and successor to the original lender began foreclosure action.
In defense of the foreclosure action, Shearon argued that he was the victim of predatory lending
practices.
Borrower Claimed Predatory Violations
David Shearon alleged that the original lender had engaged in six predatory lending practices through
the loan closing process on his Staten Island home.
1. Excessive financing was approved (106% of the purchase price) to allow closing costs to be
financed.
2. Inadequate due diligence regarding Shearons ability to repay the loan.
3. The lender intentionally placed Shearon in a sub-prime loan to the benefit of the lender with
excessively high interest rates.
4. Failure to provide federally mandated disclosures.
5. Forgeries of numerous loan-related documents.
6. The lender repeatedly employed coercive tactics.
Court Acknowledged Predatory Violations
The New York Supreme Court found that the bank had committed at least three predatory lending
violations of the New York Banking Law.
1. Points and fees financed on the Shearon loan equaled nearly 5.4% of the total loan. The court
held that the original lender, by financing fees and points in excess of the 3% allowed had
violated the statute.
2. The court found that the original lender did not even attempt to demonstrate that they had
performed their due diligence in determining the borrowers ability to repay the loan. Not
providing this due diligence is a violation of New York banking law governing high cost loans.
3. The court held that the original lender also failed to comply with the so-called "Counseling
Statue" of the banking law by not providing a "Consumer Caution and Home Ownership
Counseling Notice" with a list of credit counselors.
Why This Decision is Important
This court case has been followed closely and will have a significant impact on the future of predatory
lending for a number of important reasons.
Minnesota December 7, 1968
Jerome Daly

First National bank of Montgomery Vs.

California Pribus vs. Bush 118 Cal. App 3d. 3d 1003. 173 Rptr
747 Cal App. Dist 4
Colorado Holllerman vs. Murray 666 OP 2d. 1107 Colo. App Boyles
Brothers Drilling Co. vs. Orion Industries 761 P 278 Colo. App.
Connecticut SKW Real Estate Limited Partnership vs. Gallicchio, 49
Conn. App. 563. 716 A
Washington DC Big Builder Inc. vs. Israel 709 A 2d74
Delaware P&B Properties LLC vs., John T Ownes, 1996 DE 19300
Florida Booker vs. Saratoga Inc 707 So. 2d 886 Fla. App. Dist. 11
Georgia Milestone vs. David No. A01A2059 GA App
Indiana First Bank of Whiting vs. Samocki Brothers 1987 IN 30650
Nevada 09 CV 01143 Richard Coward vs. First Magmas financial
corporation
Louisiana HT Olinde JR Meredi vs. the 400 Group A Uninco Blue
Book Cit form 1997 LA 757 Pioneer Valley hospital Inc. vs. Elmwood
Partners LLC No 01-CA 453 LA App Cir 5
Minneapolis Northwestern National Bank of Minneapolis vs. John M
Shuster 307 NW 2d. 767
New York Michael Spielman et al Vs. Manufacturer Hanover Trust
Company 456 NW Ed 1192
Ohio Society National Bank vs. Security Fed S&! 71 Ohio St. 3d
321 643 NE 2d 1090 All American Finance Co. vs. Pueh Shows Inc
30 Ohio St. 3d 130.507 NE 2d 1134
Establishes a Defense for Borrowers Undergoing Foreclosure
This is the first time in New York that a judge has invoked those predatory lending violations against a
lender, and it could signal a shifting tide in how foreclosures are handled. James Tierney director of the
National Attorneys General program at Columbia Law School said, "Trial judges across the country are
beginning to question banks seeking to foreclose on homeowners in similar situations."
This decision will encourage other borrowers and their counsel to wave the red predatory lending flag
in response to foreclosure proceedings. One copycat suit, Alliance vs. Dobkin (No. 10625/2006, 2008
WL 1758864), has already received national attention and although this case was unsuccessful because
the judge ruled that predatory lending practices were not employed, you can be sure that many more
will follow. Expect for many, undergoing foreclosure to use this same tactic.

The Warning Message Has Been Sent


Although damages have not yet been assessed, many are shocked by the extent of the damages that
may be awarded to the borrower. Damages may include returning all mortgage payments and expenses
to the borrower, awarding attorneys fees and voiding the banks mortgage and loans. The scope of the
possible relief in this decision makes it very clear that judges are taking predatory lending very
seriously.
Margaret Becker, director of the Homeowner Defense Project at Staten Island Legal Services said, "It is
very encouraging that judges are clearly taking the issue of predatory lending in the subprime market
seriously and are willing to enforce laws to protect people from these kinds of pernicious practices."
Expanded Scope for Lender Liability
The courts decision emphasizes the fact that loan originators as well as the subsequent purchasers of a
loan have liability for predatory lending practices. This is particularly important when one considers
how often sub-prime loans are packaged, sold and resold. By the time foreclosure proceedings occur,
the original offending lender may be far removed.
It is notable that LaSalle Bank was not involved in the original mortgage transaction with the
Shearons. Despite this fact, LaSalle Bank is still being held responsible for the predatory lending
violations and ultimately will be "left holding the bag."
Noah L. Pusey of Cilmi & Associates in Manhattan who represented David and Kathy Shearon said,
"LaSalle Bank certainly arent the primary bad guys, but clearly it would have been better for them if
they had looked into certain protocol adopted by other banks."
Avoid Costly Predatory Violations
In the midst of the ever-increasing cries of predatory lending, this case highlights again the importance
of avoiding violations. Lenders in the subprime mortgage market or lenders who acquire these loans
must understand how devastating non-compliance can be.
THE HOBBS ACT18 U.S.C. 1951
R.I.C.O.
FRAUD
CONSPIRACY/OBSTRUCTION OF JUSTICE
TAX FRAUD, MONEY LAUNDERING, WIRE FRAUD, PERJURY,
U.S. Patriot Act Title III
PETITION IN THE NATURE OF A SUIT FOR DEPRIVATION
OF FEDERALLY PROTECTED RIGHTS TITLE 42 USC 1983, 1981, 1985, 1988, TITLE 18 USC
241, 242, 1512, FOR INJUNCTIVE AND DECLARATORY RELIEF AND OTHER DAMAGES AS
THE COURT SHALL DETERMINE REASONABLE, LAWFUL, AND JUST

GENERAL ALLEGATIONS

Plaintiff's pleadings were deliberately and lawlessly shelved and/or dismissed, and the hearing and
rulings deliberately ignored evidence submitted and created unconstitutional due process violations.
This violated due process, equal protection and meaningful access to the courts; 3:94CV7202, Title 28
USC 2254(b).

CAUSE OF ACTION
Defendants acted under simulation of a legal process, with deliberate indifference, defiance and
intentional culpable neglect, willfully and wantonly, and by a systematic unlawful pattern of abuse,
judicial & legal malpractice, breach of trust, and breach of fiduciary duty which led to denial of a fair
trial, due process and Equal Protection under the law that can be evidenced from the record. This
was done to intentionally, systematically and unlawfully deprive Plaintiff of his private property and
the right to redress and to present evidence in his defense of Defendants action to unlawfully
foreclose on Plaintiffs private property. A PROPER CERTIFICATE OF JUDGMENT CANNOT BE
ISSUED as a matter of law, without legal sufficiency of evidence including the presentment and
authentication of a live wet signature note during a proper, lawful and LEGAL PROCESS.
Defendants had a clear legal duty to enforce and Equally protect Plaintiff's rights as secured by
the U.S. Constitution and due process and equal protection clauses of the 5th & 14th amend as well
as 1st, 4th, 6th, & 8th, amendments and Equal protection of 3:01CR702, AND 3:94CV7202, (due
process, fairness, confrontation, production of witnesses and evidence and being fairly heard),
17, 21 (access to the courts) and 23 (privacy and be left alone), and well-settled case law,
but willfully and intentionally breached and violated such duty and failed to prevent or remedy the
situation, causing Plaintiff to lose liberty, status and property and suffer cruel physical and emotional
terror and duress without justification or support in law.
CLAIM FOR RELIEF
Denial of the rights to self-defense and to be left alone and Equal Protection of these laws, in violation
of Art. IV of the U.S. Constitution and of the 4th, 5thand 6th ,14th and 8th amendments to the Bill of
Rights, and equal protection of the truth or facts, due process and equal protection of
Plaintiff's Constitutional and statutory right.
Ethical and Legal DilemmaTruth v. Exposure
At this point the fraud was too clear and extensive and involved too many court and none court
officers to allow Plaintiff to bring evidence and truth into court.
Resolved by Defendants:
To further ignore, deny and violate Plaintiff's rights of due process and equal protection under the law
and violate both by unlawfully preventing lawful access to the courts and any hearing from taking

place, thereby also preventing access to higher court appellate review until Plaintiff's time ran out
and torture Plaintiff to drag it out in futile legal battles in forewarned and enjoined prejudicial higher
courts.
GROUND 4:
FORTH CLAIM FOR RELIEF
Systematic, ongoing unlawful Intentional tort denial and obstruction of due process and Equal
Protection of Plaintiff's lawful rights to meaningful access to the courts of a fair and thorough
hearing and access to State and Federal lawful appellate processes and remedies; to
proliferate, continue maintain and conceal blatant malpractice and fraud upon the court by
willful and wanton failure to apply and intentional disregard for the law or duty to
correct, rectify, prevent or protection of Plaintiff from the egregious lawless actions of
previous "brother" judges or of the law and rules to purposefully obstruct, prevent and
moot lawfully mandated rights and relief and to intentionally prevent justice and any favorable
outcome to fraudulently avoid liability by deliberate violation of the 1st, 4th, 5th, 6th, 8th , &
14th amendments of the Bill of Rights and Equal Protection and violate Canons of Ethics and
Codes of Professional Responsibility, and Plaintiff's civil rights to be duly, Equally, fairly and
justly treated and protected by these laws.
GROUND 5: Jurisdiction in State Court Violations
JUDICIAL NOTICE IN THE NATURE OF WRIT OF ERROR CORAM NOBIS
NON CORPORATE ENTITY & A DEMAND FOR JUDGMENT

COMES NOW, Timothy Lee and Hanna Lee, a non corporate entity with a JUDICIAL
NOTICE; IN THE NATURE OF WRIT OF ERROR CORAM NOBIS & A DEMAND FOR
JUDGMENT, Pursuant to FRCP Rule 4 (j). This Court define under FRCP Rule 4 as a FOREIGN
STATE as defined under 28 USC FOREIGN SOVEREIGN IMMUNITY ACT (FSIA) is being
jurisdictionally challenged and full disclosure of the true jurisdiction of the past Oklahoma State Court
is now being demanded Howlett v. Rose, 496 U.S. 356 (1990) Federal Law and Supreme Court Cases
apply to State Court Cases.
Any failure to disclose the true jurisdiction is a violation of 15 Statutes at Large, Chapter 249
(section 1), enacted July 27 1868
Chap. CCXLIX. ---An Act concerning the Rights of American Citizens in foreign States

Whereas the rights of expatriation is a nature and inherent right of all people, indispensable to
the enjoyment of the rights of life, liberty, and the pursuit of happiness; and whereas in the recognition
of this principle this government has freely received emigrants from all nations, and invested them with
the right of citizenship; and whereas it is claimed that such American citizens, with their descendants,
are subjects of foreign states, owing allegiance to the government thereof; and whereas it is necessary
to the maintenance of public peace that this claim of foreign allegiance should be promptly and
finally disavowed; Thereof.
Be it enacted by the Senator and the House of Representatives of the United States of American in
Congress assembled, That any declaration, instruction, opinion, order, or decision, of any officers of
said government which denies., restricts , impairs or questions the rights of expatriation , is hereby
declared inconsistent with the fundamental principles of this government.
As an America Citizen I hold the inherent right of the 11th amendment. The judicial power shall
not be construed to extend to any suit in law or equity, commenced or prosecuted by a Foreign State. If
this FOREIGN STATE is misusing the name of this American Citizen by placing it in all caps or
misusing the last name as a CORPORATION all complaints and suit against such CORPORATION
fall under the FSIA and the DEPT OF STATE OFFICES in Washington DC has to be notify pursuant
to 22 CFR 93.1 -93.2. A copy of the FISA has to be file with the complaint to the defendants chief
executive officer of that CORPORATION.
MUNICIPAL, COUNTY OR STATE COURT lacks jurisdiction to hear any case under the
FOREIGN STATE definitions. This jurisdiction lies with the UNITED STATES DISTRICT COURT
under the FISA Statutes pursuant to 28 USC 1330.
Because the original Defendant is a non-corporate entity and is not registered with the Secretary
of State as a CORPORATION the Petitioner has failed to state a claim to which relief can be granted
under 12(b)(6). BANKS and MORTGAGE COMPANIES have failed to furnish the original note along
with its delegation of authority to Counsel filed into the record. There for this case must be dismissed
for lack of jurisdiction, Venue and Subject Matter. Confirmed: Circuit Court, Pinellas County, Florida
Circuit Civil Division Master ORDER Dismissal Calendar No. 012009-013.

EXAMPLE CASE SUMMARY OF DAMAGES


The bank made the alleged borrower a depositor by depositing a $100,000 negotiable instrument, for
example, which the bank sold or had available to sell for approximately $100,000 in legal tender. The
bank did not credit the borrower's transaction account showing that the bank owed the borrower the
$100,000. Rather the bank claimed that the alleged borrower owed the bank the $100,000, then placed
a lien on the borrower's real property for $100,000 and demanded loan payments or the bank would
foreclose. The bank deposited a non-legal tender negotiable instrument and exchanged it for another
non-legal tender cheque, which traded like money, using the deposited negotiable instrument as the
money deposited. The bank changed the currency without the borrower's authorization. First by
depositing non legal tender from which to issue a cheque (which is non-legal tender) and using the
negotiable instrument (your mortgage note), to exchange for legal tender, the bank needed to make the
cheque appear to be backed by legal tender. No loan ever took place. Which shell hides the little pea?
The transaction that took place was merely a change of currency (without authorization), a negotiable
Instrument for a cheque. The negotiable instrument is the money, which can be exchanged for legal
Tender to make the cheque good. An exchange is not a loan. The bank exchanged $100,000 for
$100,000. There was no need to go to the bank for any money. The customer (alleged borrower) did not
receive a loan, the alleged borrower lost $100,000 in value to the bank, which the bank kept and
recorded as a bank asset and never loaned any of the bank's money. In this example, the damages are
$100,000 plus interest payments, which the bank demanded by mail. The bank illegally placed a lien on
the property and then threatened to foreclose, further damaging the alleged borrower, if the payments
were not made. A depositor is owed money for the deposit and the alleged borrower is owed money for
the loan the bank never made and yet placed a lien on the real property demanding payment.
Damages exist in that the bank refuses to loan their money. The bank denies the alleged borrower
Equal protection under the law and contract, by merely exchanging one currency for another and
refusing repayment in the same type of currency deposited. The bank refused to fulfill the contract by
not loaning the money, and by the bank refusing to be repaid in the same currency, which they
deposited as an exchange for another currency. A debt tender offered and refused is a debt paid to the
extent of the offer. The bank has no authorization to alter the alleged contract and to refuse to perform
by not loaning money, by changing the currency and then refusing repayment in what the bank has a
written policy to deposit. The seller of the home received a cheque. The money deposited for the
cheque issued came from the borrower not the bank. The bank has no right to the mortgage note until
the bank performs by loaning the money. In the transaction the bank was to loan legal tender to the
borrower, in order for the bank to secure a lien. The bank never made the loan, but kept the mortgage
note the alleged borrower signed. This allowed the bank to obtain the equity in the property (by a lien)
and transfer the wealth of the property to the bank without the bank's investment, loan, or risk of
money. Then the bank receives the alleged borrower's labor to pay principal and Usury interest. What
the people owned or should have owned debt free, the bank obtained ownership in, and for free, in
exchange for the people receiving a debt, paying interest to the bank, all because the bank refused to
loan money and merely exchanged one currency for another. This places you in perpetual slavery to the
bank because the bank refuses to perform under the contract. The lien forces payment by threat of
foreclosure. The mail is used to extort payment on a contract the bank never fulfilled. If the bank
refuses to perform, then they must return the mortgage note. If the bank wishes to perform, then they
must make the loan. The past payments must be returned because the bank had no right to lien the
property and extort interest payments. The bank has no right to sell a mortgage note for two reasons.
The mortgage note was deposited and the money withdrawn without authorization by using a forged
signature and; two, the contract was never fulfilled. The bank acted without authorization and is

involved in a fraud thereby damaging the alleged borrower.

AFFIDAVIT
I, Timothy Lee and Hannah Lee, make this petition under the sworn testimony clause and all
statements are true to the best of my knowledge.
______________________________
Timothy Lee, Pro se [for now]
______________________________
Hannah Lee, Pro se [for now]
State of Oklahoma
County of Tulsa
Signed and sworn (or affirmed) to
Before me on October____, 2011, by Timothy Lee and

Hannah Lee,

__________________________________________________

Official Witness
SEAL

CONCLUSION
WHEREFORE, Plaintiff Timothy Lee and Hannah Lee, moves and prays this court for
judgment against Defendants in an Amount of Four Million Dollars ($4,000,000) or to be
determined by a jury demanded, too compensate him for his damages including but not limited to:
monetary, personal, punitive, injunctive and specific performance relief and damages; all costs and
fees, to be collected by the court; all reasonable attorney fees costs to be collected by the court; Grant
of Judgment and all subsequent appellate pleadings and cessation of withholding; nullification and
vacation of expungment that should have been granted, preferably nunc pro tunc respectively;
immediate reinstatement of all constitutional rights. Immediate return of his property. Injunction for
cessation of all federal funds to the State of Oklahoma, pursuant USC penalties for federal civil rights

Violations; willfully contrary to the Health and Welfare of the Nation under Title 42 USC 1983, 1985,
& 1986; and for such other relief including criminal prosecution of Defendants, as this court deems just
and proper. Plaintiffs, also reserves all rights to compensation under the Qui Tam Act as the alleged
Mortgage was a Fannie Mae Jumbo and the Federal Government has a financial interest.

Signed this___________ day of October____, 2011.


Respectfully Submitted:
_________________________________
Timothy Lee, Pro Se [At Present]
11276 E. 176th St. N.
Collinsville, Ok. 74021
_________________________________
Hannah Lee, Pro se
11276 E. 176th St. N.
Collinsville, Ok. 74021

DEFENDENTS
a. First United Bank and Trust Co.
P.O. Box 1486
Durant, Ok. 74702
b. Shannon Taylor,
Triad Center I, Suite 550,
7666 E. 61st St.,
Tulsa, Oklahoma 74133