15 min read

Foreclosure Fraud 2.0...

Foreclosure Fraud 2.0...

...appears to be on the horizon.  As the actual data on foreclosures and defaults gradually and steadily ticks upward, other data--including particularly a spike in household debt led by increased mortgage debt and recent consumer credit card binges--suggests that very soon it may be 2008 all over again and that a residential real estate market correction is imminent.  Most recent data shows that, in March 2022 foreclosures were up 29 percent from the previous month and 181 percent from March 2021.  

If a real estate market correction is imminent, then the process will likely be much different, and for many potentially much more challenging, than it was from 2008 to 2014.  It will be different because in 2008 the problem from the point of the view of the powers that be (PTB) was that there was too little "liquidity."   That is, the bad gamblers on Wall Street did not have enough money to pay their bad debts so new money had to be added to the system so they could pay off their bad bets.  As things stand right now, the bailout banks have $3.8 trillion in bailout dollars on deposit with the Federal Reserve.  This is high powered monetary base.  If and when the depositors (Fed member banks) withdraw it and lend it into the economy it has the potential to materially increase the money supply and therefore inflation.  Unlike 2008, now the U.S. banking system is awash in actual and potential "liquidity."  

The reason this money has not escaped into Main Street circulation is that the Federal Reserve has been paying interest on these reserves since 2008.  Since October of 2008, the Federal Reserve has been incentivizing American banks not to lend to Main Street.  Interest on excess reserves (IOER), now interest on all reserves (IOR), was the brainchild of Ben Bernanke's mentor and Fed governor Stanley Fischer.  In the 1980's, Fischer was an Israeli central banker and experienced Israel's mass inflation first hand.  IOER/IOR operates like a Main Street lending spigot.  If banks can make more on riskless IOER/IOR than they can by lending into a risky Main Street economy, then they will keep their reserves deposited with the Fed.  If the Fed started charging rent on reserves rather than paying interest, the U.S. would likely experience a Weimar Republic-like currency collapse.  The post-pandemic inflation is not a result of the 2008 bailouts, it is the result of the 2020-to date direct stimulus payments.  The Fed's M1 chart provides clear evidence of this.  

If we are about to experience a controlled demolition of the real estate market (and other markets) the excess reserves sitting on deposit with the Fed therefore represent a potential weapon of mass confiscation.  Very large institutional buyers, like BlackRock and Berkshire Hathaway, are already flush with cash and for several years have been surreptitously scooping up properties nationwide.  In an economic downturn, the well-funded Wall Street cronies with lots of cash will be good credit risks, certainly better credit risks than most in the Main Street economy.  Whale real estate investors with cash on hand and access to much more makes a future foreclosure crisis doubly perilous for Main Street homeowners who are already on their heels from the economic shutdowns related to the pandemic narrative.  

And at the same time, if Foreclosure Fraud 2.0 visits Main Street soon, much also will be similar to the 2008 to 2014 time period.  This is because the underlying problem in 2008--62 million fatally void securitized mortgages--has never been remedied.  

The 2008 financial crisis awakened millions of debt-saturated Main Street homeowners to the fact they may have made some bad choices while under the intoxicating influence of five years of artifically low interest rates from 2003 to 2008.  It also awakened Wall Street to the fact that the Federal Reserve's low-interest soma had caused Wall Street, in its frenzy to profit from residential mortgage securitization, to fail to dot its i's and cross its t's in its pretend "securitization" of 62 million residential real estate loans.    


The real eye-opener for Main Street with respect to the 2008 bailouts was proof that the U.S. federal government has no concern for Main Street citizens.  Then, like now, Main Street was hurting economically and Congress showed its complete contempt for Main Street by shoveling money in directions that actively harmed, rather than helped, Main Street.  

The 2008 collapse--triggered by rapidly increasing securitized mortgage default rates--meant that Wall Street faced over $1.6 trillion in losses if these loans were revealed for what they actually were:  more than $1.6 trillion in unsecured debt.  When Congress (Team Red and Team Blue united) put its thumb on the scales of justice and rewarded the criminally negligent Wall Street banks by giving them trillions in federal bailouts, thereby green-lighting a fraudulent foreclosure process, this was the straw that broke Main Street's back.   The 2008 bailouts gave the bailout banks and Wall Street the ammunition (liquidity) and legal protection they needed to steal the homes of millions of Main Street Americans.   This betrayal has not been remedied.  Main Street has not forgotten nor forgiven.    

In 2010, highly respected law professors specifically informed Congress of the reasons why most, if not all, securitized mortgages were void at origination.  In 2011, 60 Minutes openly exposed the mundane, rubber-meets-the-road mechanism of foreclosure fraud--fraudulent transfer documents signed by know-nothing functionaries.  Despite the openly acknowledged and recognized fraud, the courts and every other ostenstible authority turned a blind eye and abetted Wall Street's foreclosure fraudsters.  In what could have been a fair fight between two sets of flawed combatants--soma-inebriated and overleveraged Main Street homeowners v. equally inebriated Wall Street banksters holding a pair of twos in a high stakes poker game--the U.S. federal government chose to backstop Wall Street.   Team Red's George W. Bush bailed out the banks and Team Blue's Obama courts stewarded over Wall Street's four-year frenzy of nationwide residential real property theft.  


I am personally interested in this issue because I feel I have a little bit of unfinished business relating the 2008 bailouts.  My efforts on behalf of Main Street from 2010 to 2014 led the Minnesota federal courts to financially cripple me by fining (sanctioning) me out of business.   One local federal judge even filed a first-ever ethical complaint against me, resulting in the ongoing suspension of my Minnesota law license.  You can read the story here.  The movie is here.   Although I remain a member in good standing of both the United States Supreme Court bar and, interestingly, the U.S. Tax Court bar, the state law license suspension has been economically debilitating as it was intended.  I was cancelled before being cancelled was cool.  

If in fact we are headed into another foreclosure crisis, I therefore hope that the very detailed and specific information in this piece will help many people avoid being victimized by fraudulent foreclosures.  Because governments at all levels and all branches have shown their contempt for Main Street, the methods in this piece are designed to take effective, defensive, action that does not rely on judges or authorities of any type.  They have all proven themselves to be fatally self-interested.  Thankfully, we can nevertheless use existing systems and structures to communicate the truth.  We can expect, and indeed know, that the truth will ultimately win even though individually we may not.  I expect that someday the information in this piece will help honest authorities clean up the nationwide title mess created by the U.S. federal government, the bailout banks, and negligent courts.  

I am grateful for the Minnesota courts that have given me the motivation to write this.  


I know with a fairly high degree of certainty that there are as many as 62 million properties with flawed titles.  I also know that there are many who were irreparably harmed in the foreclosure crisis and who have never received justice.  This includes hundreds of  Minnesota families who were formerly my clients.  

Not much has changed since I wrote Foreclosure Fraud in a Nutshell in 2011.  Read it to understand how the foreclosure fraud game works.  I will nevertheless repeat the salient points here.  A good summary of the legal basis for the lawsuits that got me suspended, and federal court responses to them, can be found here.  These lawsuits, quiet title actions, demanded that the bailout banks prove something that I was confident that they could not prove--that the mortgages they held were valid.

Three points supported my view then and support it now.  

First, the bailout banks' best (and only) evidence supporting their claim to legal ownership of 62 million securitized mortgages consists of millions of mortgage assignments signed by unwitting $15-an-hour perjurers who had no legal authority to assign a mortgage and had idea what they were doing.  Every fraudulent foreclosure and every flawed title has the tell-tale sign of an assignment of mortgage (AOM) signed by a person without knowledge or authority.  This was the subject of the 60 Minutes piece referenced above.  These fraudulent AOMs are clearly identifiable and there are millions of them that are still of-record in 3000 county recorders' offices.  Massachusetts' Southern Essex County Registrar of Deeds John O'Brien developed of list of signers of perjured documents and called his small office "a crime scene" containing over 30,000 fraudulent documents.  When recorded and certified, these foundationless and hearsay-within-hearsay documents become admissible as public records and not subject to cross-examination.  

Second, the reasons why fraudulent AOMs are necessary--a systemic failure to transfer notes and mortgages to securitization trusts--is contained in Professor Adam Levitan's testimony to Congress.  Like the fraudulent AOMs that are of record, the internal records of securitized loans are also irreconcilably flawed. This is because they lack evidence any evidence of a timely transfer of promissory notes and mortgages to the securitization trustee.  In order for a securitized loan to be valid, there must be a valid, timely physical transfer of the the securitized notes and mortgages to the securitization trustee.  The best evidence of this would be an AOM signed by a person with authority from the loan originator (the "lender" and "mortgagee" at the original closing table) to the securitization trustee on or about the time the original loan closed.  This never happened which was the underlying reason why the 2008 bailouts were necessary.  

While some authorites posit that the "mortgage follows the note" theory of legal title (the erroneous legal presumption supporting the MERS system) applies to mortgage securitization (obviating the need for an AOM to the trustee at loan origination), this point is moot.  That is beause there is also no evidence that any securitized promissory note was ever properly endorsed by the original lender in favor of a securitization trust.  If the mortgage follows the note and the note was never properly transferred to the securitization trustee, then the loan was never really "securitized," the mortgage is invalid and the note represents unsecured debt.  

Third, I knew and know the flawed nature of bailout-backed securitized mortgages because I am the only lawyer in the United States who has sued a mortgage loan securitizer and who has successfully voided and invalidated two recorded and allegedly securitized AOMs.  Just like the 2008 bailout banks, the phony mortgage securitizer in this case claimed to legally own the mortgages simply because they were recorded with the county recorder.  I won the case not because of any particular brilliance, but because I produced the original promissory notes at trial.  Of the many hundreds of securited loans I have analyzed, every one had a fraudulent, recorded AOM signed by one of these people.  In my experience, not one 2008 bailout bank produced a valid AOM signed at or around the time of the original loan closing from the original lender to the securitization trustee.  Nor did they produce  any evidence of a timely and legal transfer of any securitized promissory note.  Because of this absence of evidence, in a fair trial all 62 million securitized loans would likely be invalidated.  

Foreclosure Fraud 1.0 was made possible by Mortgage Electronic Registration Systems, Inc. (MERS), the purposefully opaque "'nominal" holder of millions of securitized mortgages.  Foreclosure Fraud 1.0 exposed MERS for what it was and is--Wall Street's illegitimate attempt to leapfrog over Main Street's state and local governments in order to financialize U.S. residential real estate.  Wall Street and Washington invented MERS, located in the D.C. swamp backwaters of Reston, Virginia, to provide a veil of cover for the securitization (fractional interest sale and resale) of residential mortages and at the same time avoid paying local county deed and transfer taxes.  When, in 2008, the fraudulent mortgage securitization system failed and it was exposed that there were over 62 million void, improperly securitized mortgages--again, meaning that there was trillions of dollars in unsecured debt masquerading as properly collaterized mortgage loans--George W. Bush, Barack Obama, Ben Bernanke, Hank Paulsen, Timothy Geither, and the U.S. Congress all stepped in to protect Wall Street from its own mistakes.

Incidentally, the Minnesota Supreme Court suspended my license ostensibly because it determined that I was obdurately refusing to acknowledge its decision in Jackson v. MERS.   Jackson expressly holds the MERS had the legal authority to commence a non-judicial foreclosure in its own name in Minnesota.  As I noted at pages 9-10 of my brief to the court in and the oral argument, on July 11, 2011 (four years before my suspension) MERS, at the direction of the United States Comptroller of the Currency, itself rejected the Jackson holding and amended its rules (Rule 8(e)) to require that all foreclosures everywhere be brought in the name of, not MERS, but the "note owner" or the "note owner's servicer":  

... the note owner or the note-owner's servicer shall cause the [MERS] Certifying Officer to execute the assignment from MERS to the note owner's servicer, or to such other party expressly and specifically designated by the note owner before initiating foreclosure or filing Legal Proceedings in all states.

In retrospect I was naive to believe that the current system would give Main Street borrowers a fair shake against Wall Street banks.  I do, however, still expect justice.  I just don't expect that the current system with the current people are capable of delivering it.  My primary hope through this piece is to educate you about the fraud underlying the 2008 bailouts, the subsequent fraudulent foreclosures, the ongoing pollution of nationwide title records, and finally to show you specifically how to legitimately and permanantly expose the truth about fraudulently securitized mortgage loans.  And then, as Saint Augustine said, together we will let the truth take care of itself:  

The truth is like a lion.  You don't need to defend it.  Let it loose.  It will defend itself.


Total U.S. federal government debt is currently at around $90 trillion.  Unfunded liabilities are somewhere north of $170 trillion.  Combined that represents $778,000 in debt per U.S. citizen or $2,067,000 per U.S. taxpayer.  We thus appear to be on the precipice of a once-in-a-lifetime economic correction if we aren't in it already.  In addition to the important points in this piece, Congress' recent $40 billion in funding of the NATO v. Russia proxy war in Ukraine war may be an important "canary in the coal mine" signal.  Russia's so-far successful roubles-for-gas play, as perceived by Washington D.C., appears to represent an existential threat.  Preserving the petrodollar, the D.C. kleptocracy, Raytheon, Lockheed Martin, and the CIA is clearly more important to the federal government than helping Main Street.    

Because Washington D.C. has never really cared about Main Street, Main Street must take advantage of every opportunity it gets to protect itself.  A severe economic correction is such an opportunity.  Rapidly rising prices (caused by decades of federal inflationary dollars coming home to roost), a stagnating economy (caused by federal consume-now-and-produce-later fiscal and monetary policies), and lack of domestic productivity (caused by decades of globalist trade policy), represent an opportunity for Main Street to focus its collective mind on important, local, economic issues.  This includes doing what it can do working within a deeply flawed system to protect itself from the securitized mortgage mess.  

Taking responsiblity now will lead to taking authority later.  


As Massachusetts South Essex County Register of Deeds John O'Brien stated in the midst of Foreclosure Fraud 1.0, county recorders' offices are "crime scenes" polluted with fraudulent foreclosure lies.  The 30,000 fraudulent documents filed in South Essex County alone are just a very tiny fraction of the millions of fraudulent documents that remain of record in every county in the United States.  

Prior to my license suspension, I recognized that no judge anywhere had the courage to do anything about the ongoing foreclosure fraud.  At the same time, as I was leaving the active practice stage I felt the obligation to somehow preserve the truth of what was going on.  I did this by employing a mechanism used by the foreclosure fraudsters, only my method is legitimate and is based on facts that are not subject to reasonable dispute.  Because the federal system and every state system has a rule of evidence that requires judicial acknowledgement of "adjudicative facts," I began preparing highly detailed Requests for Judicial Notice and recording them against properties that had been polluted and slandered with fraudulent documents.  The idea was and is to record the truth with the county recorders and let the truth defend itself.  If and when a legitimate authority--one concerned about Main Street and honest title records--attains actual authority, a truthful record will help that authority clean up the crime scene.  

The Rule of Evidence that allows this in Minnesota and federally is "Rule 2o1." For this reason, my office called these documents "201's."   There are only three categories of securitized loans:  (1) private trusts; (2) Fannie Mae trusts; and (3) Freddie Mac trusts.  I had templates for each of these three types: (1) Fannie Mae 201; (b) Freddie Mac 201; and Trust 201.  The linked template samples are a little dated and so are not immediately ready to use, but you and/or your licensed lawyer are free to edit, modify, tailor, and use them to fit your specific situation.  I provide them to show you how the necessary information is plugged in and communicated.  

The 201's contain everything necessary to void a fraudulent foreclosure and clear a fraudulent title record.  First, they pull out and identify the fraudulent AOM and show why it is fraudulent.  When I was actively filing 201's I had a good working relationship with John O'Brien's office and he would graciously execute an affidavit stating that his audit had revealed that the person who signed the AOM was a fraudulent signer.  The venerable Mr. O'Brien is still operating the Registry and I a suspect that he will be equally accomodating to anyone who asks for his assistance.  If not, the smart woman who conducted the audit of fraudulent signers for Mr. O'Brien, Marie McDonnell, can be reached here.

Second, the 201s also succintly explain why the securitization itself is fatally flawed.  The securitization section of the 201's identifies:  (1) the date of the trust closing; (2) the law governing the trust; and (3) the trust requirement that the trust trustee obtain physical, legal title to notes and mortgages within 90 days of the closing of the securitization trust.  The SEC's Edgar database allows free and unencumbered access to the pooling and servicing agreements (PSA).  Obtaining PSAs from Edgar, however, can be challenging.  Here is a very good how-to primer on searching Edgar and an example of a PSA.  

Another example of a PSA is here.  In this example, you can see that the name of the securitization trust was the "WaMu Series 2007-HE4 Trust."   The material things that get plugged into the 201 and also attached as exhibits are:  (1) the "closing date" of the trust (section 1.01) which was June 13, 2007; (2) section 2.02 requires that the trustee acquire legal title by physically receiving the mortgages and notes (within 90 days of trust closing in 2007) (p. 87); (3) Delaware law governs the trust (section 11.04, p. 202--this is unusual, in my experience New York law governs the vast majority of private PSAs); and (4) when available, I also include things that affirm the idea that the timely physical transfer of notes and mortgages is necessary to perfect legal title in the trustee (in this PSA, these are Exhibits E-3 and F-2).  

PSA information is sometimes difficult or impossible to obtain.  This is a minor obstacle that can be solved by demanding it from the foreclosing lawyer or the mortgage servicer if the mortgage is not in foreclosure.  If the foreclosing lawyer is foreclosing on behalf of the "WaMu Series 2007 HE4 Trust" he should have or be able to obtain the PSA.  If not, he needs to be reminded that he will be committing a fraud upon the court or county recorder if he proceeds.  

I am currently assisting an old client and his licensed lawyer in this exact situation.  The lack of a PSA offers the opportunity to educate the foreclosing lawyer about the fraud that he risks perpetrating.  The foreclosing lawyer for this old client (who has successfully fended off the fraudsters for 12 years) recently cancelled the foreclosure sale and is feverishly searching for a PSA relating to a 2006 securitization.  The PSA may actually not exist.  As the foreclosing lawyer searches for a non-existant PSA, he may be awakening to the fact that he risks contributing to a crime scene at the county recorder's office.  The lawyer should do the ethical thing and give up trying to steal my old client's house, tell his bankster client that the debt it claims to own is not secured by a mortgage, and further remind his client that the unsecured debt is easily dischargable in bankrupty.  The bankster client should then treat the claim accordingly.  The bankster should recognize it is in very weak position and gingerly and gently seek to persuade my old client not to file bankruptcy.  JP Morgan acquired WaMu debt for .61 cents on the dollar in 2008.  One cent on the dollar (a nearly 100 percent return) would be a reasonable and fair settlement.  The same is true for all the rest of the 62 million securitized mortgages.  This is what should have happened in Foreclosure Fraud 1.0.  

Back to the 201s.  A final, recordable 201 should show that the securitization trust closed in the year identified in the PSA (for example, 2007) and that there is no of-record evidence of a timely (2007) physical transfer of the mortgage and notes to the securitization trustee.  Evidence of physical transfer of notes and mortgages within 90 days of closing is necessary to establish a securitization trustee as the valid, legal owner of a securitized mortgage.  The 201 should also call out the fraudulent, recorded AOM by noting that it is dated years after the closing date of the securitization trust (this is always true) and it is signed by a fraudulent signer.    

Note that I am keeping an open mind.  It remains possible that somewhere there exists a valid securitization trust.  If there is, then the burden of proof is on those who have created the crime scene to prove it.  The 201s make this clear.  


I sincerely hope that this information helps someone.  Over 23,000 people accessed and used this "No Thank You" letter and the other pieces on this site in response to the attempted mass-vaccination fraud.  The letter helped people retain their jobs and avoid experimental drug experiments.  I hope that many, many more people access and use the 201's.  If you or your licensed lawyer need individualized foreclosure help, click the "subscribe" button and choose the foreclosure defense option.  You can cancel the subscription at any time.  No risk.      

If you don't need a foreclosure defense, become a free or $9 per month subscriber anyway.  I write about once a month and always with the specific purpose of helping Main Street think clearly and creatively in order to avoid Leviathan's attacks.