D.F. Its coming you way on 5/11/2018

Dodd Frank Act Section 1063


(1) EXISTING RIGHTS, DUTIES, AND OBLIGATIONS NOT AFFECTED.—Section 1061(b)(1) does not affect the validity of any right, duty, or obligation of the United States, the Board of Governors (or any Federal reserve bank), or any other person that—

(A) arises under any provision of law relating to any consumer financial protection function of the Board of Governors transferred to the Bureau by this title; and

(B) existed on the day before the designated transfer date.

(2) CONTINUATION OF SUITS.—No provision of this Act shall abate any proceeding commenced by or against the Board of Governors (or any Federal reserve bank) before the designated transfer date with respect to any consumer financial protection function of the Board of Governors (or any Federal reserve bank) transferred to the Bureau by this title, except that the Bureau, subject to sections 1024, 1025, and 1026, shall be substituted for the Board of Governors (or Federal reserve bank) as a party to any such proceeding as of the designated transfer date.

Do not confuse the Lender and Creditors Claims

logo-cert-cfeWhen a mortgage funds the process causes the notes holder to ship its collateral “note” to the creditor meaning the bank wiring good funds into closing. The funds originate from a member bank in the name of the lender F.B.O the mortgagor. The amount wired is the obligation of the lender to creditor where the notes maker or mortgagor owes a debt to the lender as legal holder.
Holder therefore is the lender to mortgagor and the obligor to creditor a member bank .

If the lender sold the loan the purchaser is in possession of the instrument “note” evidencing the obligation. If the lender did not sell the loan by 180 days the note remains with the creditor . First Horizon is the Lender and Bear Sterns is the Creditor for lines of Credit used to fund the subject mortgage.

At 180 days but no greater than 360 days there must be a valid assignment from Lender to  a thrid party purchaser for value.

If the assignment is not from Lender to bonefide purchaser than Creditor takes assignment by its possession of the collateral it has held all along.

A corporate assignment from Lender to Creditor collateralize s the revolving lines of credit issued to lender but otherwise are worthless. The corporate assignment from Lender to :___________ and blank endorsement  never serves any other purpose.

MERS is the nominee only for the term the loan is out for sale or first 12 months and is used to replace the Seller Purchaser bailment requirements.

Take this to court or take it to the bank as fact .

We are secondary markets auditors and accountants who do not offer free home services…just facts in the secondary and capital markets handling of these legacy loans in foreclosure. The fact is in every case seen to date the debt  in controversy is NOT the consumers but the antecedent debt of a thrid party  involving the creditors and lenders .


Washington Office / Tel 202-550-8364

What You’re Missing in a Foreclosure Defense is the Foreclosure!

General Taxation of COD Income

Under the Code, U.S. persons, including corporations, are taxed on their worldwide income. Sec. 61 defines gross income to include COD income.

When a debtor recognizes COD income, the creditor may receive a corresponding Sec. 165(g) worthless securities deduction or a Sec. 166 bad debt deduction.

What does this mean ? You are sent a 1099 A for Abandonment of claims meaning the cost to charge off bad debt the lender owed its creditor and never satisfied .

Problems arise where the HUD shows the amount owed the existing lines of record were in fact paid.  The second issue is where the amount paid by borrower was never wired into closing …  or funds were rerouted into a bank depository as trust funds used to acquire a series of pass through certificates.

In either event your left holding the bag for the amount owed by the lender to the foreclosing party, the amount that failed to wire to the existing lien holders and loss of title that was irrevocably conveyed after closing

Sec. 108 provides several exceptions to the definition of COD income. For example, Sec. 108(e)(6) provides that a capital contribution [meaning homes and mortgages for stock ] issued by banks in the form of debt forgiveness by LLC officers and directors as shareholder-creditor that generally does not involve an issuance of stock of the debtor produces COD income only to the extent the outstanding debt exceeds the contributing shareholder’s adjusted tax basis in the debt.

More importantly under Sec. 108(e)(8), a member bank as Chase a Delaware Corporation recognizes COD income if it transfers stock in satisfaction of its debt….MEANING YOU PURCHASED THEIR WORTHLESS SHARES BY CONVEYING YOUR HOME and at that time A MORTGAGE WAS CANCELLED AS  IF IT WAS PAID IN FULL SATISFACTION.

CLAIMS BROUGHT BY LAWYERS IN CONSUMERS DEFENSES ARE …lets say off base and not on target. Its true the fair market value (FMV) of the stock will always be less than the adjusted issue price of the debt.

Thus, when mortgages are forgiven by a banks officer and directors shareholder-creditor and no new stock is issued, the consumer debtor recognizes gain to the extent the adjusted issue price of the debt exceeds the shareholder-creditor’s basis in the debt.

The shareholder-creditor increases its basis in the stock of the debtor in an amount equal to the adjusted issue price of the debt (see also Sec. 1016(a)(1), Regs. Sec. 1.1502-19(d)(1), and Letter Ruling 201337007).

More to follow so please stay tuned – difficult subject matter is tough to digest when its valuable to your claim. expert.witness@live.com


Facebook Foreclosures, Nominee and IRS

You will find quite a crowd on Facebook these days conversing on topics ranging from foreclosure fraud to how to burn the Department of  Treasury for a lifetime membership  to unlimited wealth . Unfortunately the Treasury crowd cant differentiate welfare from stealing but they often make more sense these days than the foreclosures bottom feeders.

Seriously if the Department of Treasury wanted to ensure your wealth  they would publish a manual on just how to break into their electronic platform and describe in government fashion the method for whatever it is these folks converse about. I am more  in favor of playing 52 card pick up on the freeway or riding unicycles on tall buildings balancing off the most extreme ledges.

There is an argument for the foreclosure victims and its a difficult argument to get across conservative folks who are timely or current and those who are facing loss and eviction after years of sleepless nights.

LOST NOTE v. LOST NOTES: The note is lost and its fact but not to be confused with lack of willingness to  locate the instrument  as compared to a lack of capacity to enforce it. If you agreed to a mortage in good faith and executed  the note you  promised to pay back the money. The majority of mainstream Americans would agree with the courts as that is all the judicious appears willing to go off.   Nothing  in effect will deny an Innocent third party purchaser the  right to enforce the note he purchased. Even in the event of a default and strong counter claims to deny standing should a foreclosing party enter the court absent the note.

The note under the Legacy Brand mortage was not lost to anything incident to volume of industry shake up after the markets tanked. The note was cashed in by the purchaser who in this case is the seller.  Its called divestiture of assets and cancellation of debt for the involuntary conversion of the instrument and obligation into ordinary income .

Ordinary income is taxable In the United States at the marginal tax rates. Generally there are six “tax brackets” ranging from 10% to 35%.  However, after the 2003 Tax Cut, qualified dividends and long-term capital gains are taxed at the same rate of 15% (up to 20% after 2012). The amount withheld in certain instances can run as high as 39.4 percent of the amount paid to the tax payer.

Here is where a genuine controversy arises that  that fails to enter into counterclaims nor attention of the press or lawyers on both sides. Mortgages transfer title and the note cancelled for its full value paid over 30 years under sec 108 (i) accelerated recovery. This beg the question of why? Why would anyone make a bad loan as lenders did from 2001-2008  placing money at risk and then right it off . Add to the confusion why the lender allowed the consumer to stay in the  home  for more than five years from the day of the alleged default?

INSTALLMENT SALES – Under the requirements  of Section 453 B a tax payer lender or its successors can claim benefits of installment sale reporting  under installment sale rules. Those benefits are in the booking of phantom income  attributed to a faulted household  capitalized at 10 times the note face value.

In my professional opinion this entire mortage  crisis is due in part to the federal deficit reduction  act and 911 and includes member banks recpatuire due the IRS dating back to 10/19/87

Consider MERS for example where a “nominee” is someone designated to act for another. As used in the federal tax lien context, a nominee is generally a third-party individual who holds legal title to property of a taxpayer while the taxpayer enjoys full use and benefit of that property. In other words, the federal tax lien extends to property “actually” owned by the taxpayer even though a third party holds “legal” title to the property as nominee.

Generally speaking, the third party in a nominee situation will be either another individual or a trust.

More to report here  over the coming days !