An Eyewitness View of the System — Fraud Corruption and Injustice
What did we as a society learn from the actions of Wall Street and the economic collapse of 2008? What systemic changes have occurred to protect us from the repeat actions of Wall Street’s corrupt practices? What I learned created many more questions of which no one was able to give me answers to when I desperately needed them. When Wells Fargo Bank began their non-judicial foreclosure proceeding against my home while I had been current on my mortgage, I had to find my own answers.
My most notable questions were:
How is it that a bank, law firm, or frankly, anyone is able to foreclose on a homeowner who is up to date on their mortgage payments or has even paid cash for their home? How can a party foreclose on a homeowner without being in possession of the mortgage note? How is it that fraudulent documents, with fraudulent information, with fraudulent signatures are such a systemic issue and are continually allowed in courtrooms across America? How is it that a party with absolutely no financial position, or legal standing, in a mortgage agreement is allowed to steal a homeowner’s home from them? What happens to all of this fraud and its relation to Wall Street and the fraudulent securitization of notes in mortgage backed securities of which much of our global economy is predicated upon?
My name is Douglas J Boggs. I have been a real estate investor/developer, and General Contractor for my entire adult life and I am a nationally certified Bloomberg Forensic Loan Securitization Auditor. Also, I am the author of the acclaimed book “Quantum of Justice — The Fraud of Foreclosure and the Illegal Securitization of Notes by Wall Street”. This book is the non-fiction narrative of my self litigated lawsuit against Wells Fargo Bank, for fraud, in Boggs v. Wells Fargo Bank. The book includes filed legal documents, written and oral arguments, and eyewitness experience exposing the true depths of corruption from our halls of justice regarding the fraud of our foreclosure system, the corruption of our judicial system and the complicit nature of our legislative body politic, and how it affects the everyman.
When Lehman Brothers collapsed in August of 2008, I owned twenty different properties across the country, and I was building nearly 20 more homes in Texas, while managing a handful of other construction projects in the San Francisco bay area where I lived. In Feb. 2009, Chase Bank, the construction lender for the homes being constructed in TX, refused to pay my company, Boggs Development Group, LLC, over $300,000 of independently inspected and approved project payments. They claimed that after the economic collapse, they were no longer able to issue payments for their debts. Not too long before this, they had received a bailout package of $25 billion dollars from the Federal Government. Their refusal to pay their debts shut down my business in Texas, and soon after California came to a halt, leaving me, dozens of employees and subcontractors out to dry.
Due to the nature of the collapsed economy in 2008, and its effect on the real estate and the construction industries, I had been seriously and directly financially affected, like most Americans. Despite this, my wife at the time, and I were still current on our mortgage payments. Although, we thought there might come a day, if things didn’t turn around, that we would need a modification or some sort of mortgage assistance. We had spent the past two years trying to be proactive, so as not to have us reach that point. We were talking with Wells Fargo Bank(WFB) on a near daily basis to try to get ourselves into a mortgage modification program (HAMP, TARP, etc.) that would help us to stave off what we could see, possibly hanging out on the horizon.
In October, 2012, WFB advised us to stop making our mortgage payments so they would then be able to comply with the Federal regulations and they could then help us with a loan modification. This sounded insane, but we are taught in our society to trust the banks. Hesitantly, in November of 2010, we did not make a payment on the advice of WFB. On Dec. 31, 2010, WFB began a non-judicial foreclosure proceeding against my home in Oakland, CA. Prior to this action, we had been up to date on our mortgage payments. So, subsequently none of this made any sense. I needed answers and I was now left with little time.
In a non-judicial foreclosure action in CA the borrower is supposed to be notified of the fact that they have defaulted on their loan and have 90 days from the date of that notification to try to rectify the default. However, when filing the Notice of Default(NOD), Summary Information, and the Declaration of Wells Fargo Bank documents that are required as per CA Civil Code 2924 and the power of sale clause in our deed of trust agreement, WFB checked the box that stated that they had complied with CA Civil Code 2923.5(g). This code outlines that the financial institution had tried diligently, as per the code requirements, to reach the borrower and could not. There in allowing them to expedite and activate the non-judicial foreclosure proceeding quickly and eliminating our right as a borrower to attempt to rectify the situation to which they had advised us to enter into. By their fraudulent filing of this document they denied us our right to remedy the situation. We had been discussing these issues with them on a near daily basis for the past few years. The wheels of foreclosure were already turning.
In a non-judicial foreclosure proceeding there is a presumption of correctness to all of the documents being filed to the court by a financial institution or foreclosing party. This is due to the fact that a trustee is involved in the transaction. The trustee is to act as a middleman, an independent party, between the financial institution and the borrower in a deed of trust. The trustee, as an independent party to the transaction, is tasked to protect the title of the borrower from adverse harm by another party. This is outlined in the 1978 California Supreme Court case Garfinkle v. Superior Court of Contra Costa County.
In a non-judicial foreclosure, since there is a trustee acting as an independent party acting on behalf of the court between the lender and the borrower, there is a presumption of correctness of all of the documentation filed by the financial institution. The only option to stop a foreclosure proceeding in this situation is for the homeowner to file a lawsuit against the foreclosing party. There is no other option to stop the foreclosing party from stealing someone’s home. This is because the trustee in the non-judicial foreclosure process is considered the court. They are acting as an independent party in lieu of and on the court’s behalf. But, what if they weren’t independent. What if the trustee were acting on behalf of the foreclosing party. This would mean that the court itself is corrupt and fraudulent.
Our only option left to try to stop this fraudulent foreclosure action was to file a lawsuit against WFB. Due to the nature of our economic situation at the time I had no money to hire an attorney, so I had to act as my own attorney against one of the world’s largest financial corporations. The timeline to rectify this was closing in as their legal filings had timelines that we had to respond to. A real life David and Goliath story was unfolding right before my eyes. There was a scheduled Trustee Sale date for our home on April 12, 2011.
On April 11, 2011, I filed a lawsuit against Wells Fargo Bank for fraud and breach of contract with much help of a retired paralegal and local college legal professor. The last minutes of the day to file I found myself running through the hallowed halls of justice because upon our attempt to file we found that if you are acting as a ProPer litigant in California there is a rule, CA Civ. Procedure 405.23b, which states that you have to have a sitting judge sign off on your litigation documents prior to filing in court. Lawyers don’t have to run around and find a judge that will review and sign off on their documents. They simply file documents, in this case, through the trustee, who then files them to the court. Anxiously knocking on judges chamber doors, we were able to find one and file before the end of the day who would sign off. We were able to stop the fraudulent sale of our home the following day.
One thing that I did find interesting at this moment was that, upon my performing the Service of Process and sending the legal documents to all of the parties involved in the lawsuit for Service, I realized that the address to send all legal documents to Wells Fargo Bank was the same address as to send legal documents to the trustee of record on the deed of trust. This didn’t seem right as the trustee is to be an independent party in a deed of trust agreement and non-judicial foreclosure action.
Over the next coming four years of being remanded from state Superior Court to Federal Court and back to state Superior Court, filing four Amended Complaints, and having 114 different Motions, Responses, Interrogatories, Memorandum of Points and Authorities, and other legal documents, as well as, in court oral arguments during litigation, I uncovered something.
By the time I was writing and filing my Third Amended Complaint, I realized that I needed to find a legitimate deed of trust in which to use to base my argument that our deed of trust was fraudulent. I needed to find a deed of trust that follows the proper codes of civil procedure. Its contents and construction actually follow the rule of law. Since my complaint was that the trustee was faulty and was filing fraudulent documents on behalf of WFB I needed to find a way to actualize this. I had to find some other documents in the country records that were correct in order to show that the documents being filed against me were incorrect. I needed to find a valid deed of trust in order to show a legitimate document so I could compare it with the paperwork that we had. To show the court that ours was indeed fraudulent on its face.
So, I went to the Alameda County Recorder’s Office and began searching through the database of real estate filings to find a legitimate deed of trust document that followed the rule of law in its construction and its necessary contents. Any deed of trust filed that I could use as a template for my argument that showed what a deed of trust was by law supposed to contain. After a few weeks of searching through tens of thousands of documents taking me back to December of 1997, I finally found one. Then another. Then another. It was easy to find documents that complied with the rule of law prior to 1998. I found this quite odd.
What happened on January 1, 1998, that made every deed of trust filed in the Alameda County Recorder’s Office since that date change so radically in the information provided and structure of the information? The way things were written since Jan. 1, 1998, created a pathway of corruption to follow. Out of the thousands and thousands of deeds of trust filed since January 1, 1998, in Alameda County Recorder’s Office, that I searched were fraught with fraud and therefore void.
Now, I needed to find out from the legislative level what took place that would allow this to be this way. What changed at the legislative level that would make something like this happen at such a scale? After much research, I came across CA Senate Bill 1638. When this bill was passed in 1996, it was to become effective law on January 1, 1998. What I found in the wording of this bill was that the banks have the right to replace the trustee at will. The problem that I found with this is that this would mean that the banks own the trustee and therefore the trustee is no longer independent. The independence of the trustee is still valid law dictated by the CA Supreme Court in 1978. However, this code change on January 1, 1998, allows any bank to name a trustee at will who will do the financial institution’s bidding and file whatever document the bank tells them to file. The trustee is therefore no longer an independent party.
The reason the Supreme Court was so adamant about the independence of the trustee, in their ruling in 1978, was that in a deed of trust agreement and in the non-judicial foreclosure procedure it is the trustee who is acting as the court. They are the court. They have to be independent. How could one line in a code change seemingly change the rule of law to a point that any bank could file fraudulent documents against any homeowner at any time and foreclose on them.
So, I petitioned the State of CA to pull the file on that bill so that I could review all of the documents pertaining to the creation of this code change. How was it defined? How was it worked, reworked and debated in order to get to its result? The secretary I talked with admitted to me that no one had ever asked for this file since the date that it was originally filed. So, they blew off the dust and sent me the 120 odd pages of notes from Senators that helped to create and define this code change. I found that a Senator Johnson wrote the bill. He included very detailed information within the bill saying that, “… despite the change in this code the financial institution and foreclosing party must still comply with the rules of foreclosure, CA Civil Code 2924, and the power of sale clause in a deed of trust.”
The notes state that it had reached a point to which it was agreeable to all the members of the state senate and was going to be signed unanimously. The previous changes and acknowledgements within the 120 pages of senate notes showed that the wording was agreeable and would pass. Because it was worded right.
There were a couple of attorneys in place to help write and construct this bill acting on behalf of the Mortgage Broker’s Association of California. It seemed that they came in at the “11 o’clock” hour and changed the wording of the bill prior to the next morning vote which was to pass unanimously. These lawyers changed the senator’s wording in the bill. They altered what it was going to state prior to the vote. They removed the reference that the rule of this code must follow the existing CA Civil Code 2924 and replaced it with one line that stated that, “…the financial institution or foreclosing party has the right to substitute the trustee at will.”
Boom.
The trustee is no longer independent. Now. I was able to put together why it was that when I was looking for the addresses to serve the original pleading papers and the Summons to send to all of the parties involved in the case, that the trustee of record in the deed of trust agreement and Wells Fargo Bank, the lender involved in the agreement had the same address.
Let’s try to put this into a perspective. In 2008, Wall Street imploded due to an excessive amount of selling and trading mortgage backed securities. These MBS’s were based on real estate mortgage agreements. Since Jan. 1, 1998, every commercial deed of trust mortgage agreement in the state of CA was based on fraud due to the fact that there was no longer a legitimate trustee involved in the deed of trust. The banks owned the trustee and therefore had full control over a borrower’s title and mortgage. The trustee was not independent therein making the deed of trust, used by the financial institution void. Every mortgage note from CA that had been securitized and bundled into a MBS made that mortgage backed security void. Wall Street traded these securities to investors, other financial institutions, and securities such as Credit Default Swaps, etc. Trading trillions and trillions of dollars of these security instruments based on fraud in its inception. They have been traded in securities for decades creating a house of cards based on void documents. An entire global economy that is based on blank sheets of paper. There are at least 32 states in the United States that use the deed of trust and trustee in their mortgage agreements. You do the math.
I had found this information out shortly after filing my Third Amended Complaint to the court. I was not happy with the construction and the wording of the Complaint due to the stress and the lack of time that I was under to complete it and file it. However, I found a code that stated that I was able to file a Fourth Amended Complaint to the court if the opposing party had not yet filed a Response to the previously submitted Complaint within the 30 day timeline to file.
I quickly got to work. We were scheduled to appear in court for a hearing to address the Third Amended Complaint of which the defense had still yet to respond. After completing the Fourth Amended Complaint, I decided that before we go into the scheduled hearing for the Third Amended Complaint, I would file the Fourth in the court and then give it to the judge at the hearing. While there I could then serve the opposing counsel of Wells Fargo with the Complaint.
I went to the office of the court to file. The person behind the counter at the office told me that I couldn’t file the complaint because I didn’t have permission from the judge. I told her that I didn’t need permission from the judge because the opposing counsel had not responded to the Third, which gave me leave to amend without permission from the judge. She shook her head and stated that she would not accept the filing.
Frustrated, we went to the hearing across the street for the Third Amended Complaint. When we were called to court the judge asked if I was ready to address the Amended Complaint. At that point, the lawyers for Wells Fargo Bank interrupted and said,” You honor, would this be the Third Amended Complaint or the Fourth Amended Complaint?”
The judge acted seemingly confused and said, “ Well, I am aware of a Third Amended Complaint but not a Fourth.”
I went on to explain that I had just left the office of the court to file the Fourth, but she wouldn’t let me, stating that I needed the judges permission. So, this begs the bigger question of how did they know about the Fourth Amended Complaint?”
The judge looked angrily over to the opposing counsel’s desk and stated with a chuckle, “Well, I would be interested in reading that.” So, I approached the bench and gave him a copy. I walked back to the opposing counsel’s table and gave them a copy and said, “You’ve been served.”
In early 2014, we were scheduled to appear in court to discuss the Fourth Amended Complaint. When the session began, once again, the courtroom was filled with people. The judge asked us if we were ready to begin.
(Excerpt of the section From The Author on pages 18–20 of “Quantum of Justice — The Fraud of Foreclosure and the Illegal Securitization of Notes by Wall Street”)
“Your honor, with all of the evidence that we’ve presented here in your court over the past three and a half years of this litigation, and the 114 different motions and responses in this case that have been submitted, I ask Wells Fargo Bank to answer this one very detailed question. If they can simply answer it and tell me that I am wrong, I will stop the litigation and leave. And that question is this, your honor:
Isn’t it true that a financial institution knows that a trustee in a deed of trust contract has absolutely no power to police a beneficiary’s actions in a power of sale clause in such a contract due to SB1638 (1996) which beginning on Jan 1, 1998, changed the wording to CA Civil Code section 2934a therein giving the power to the beneficiary to substitute the trustee at their will. Thereby eliminating any independence that the trustee is supposed to possess, as originally intended by the State Supreme Court in 1978 through the Garfinkle v. Contra Costa County case?
As a lender knows this and can subsequently choose the trustee who will do the bank’s bidding for them, they can therefore submit fraudulent documents at any time to the county office and illegally begin the foreclosure procedure against any borrower and steal their home whether they are current with their mortgage or not. Isn’t this prima facie evidence that there is no independence of the trustee in a deed of trust?
And if the trustee doesn’t hold any power to police the actions of the beneficiary in a deed of trust agreement, doesn’t that make the deed of trust agreement void on its face? And if the banks know this and fail to inform the borrower of this fact, doesn’t it then mean that this is actionable fraud based on the withholding of vital information that would be pivotal to the borrower’s final decision making process before entering into the contractual agreement? And through the deceptive acts of the lender in the real estate transaction by withholding information from the borrower, doesn’t this simply mean that there is not a true meeting of the minds due to the contract’s concealment of information by the bank from the borrower? And if there were no true meeting of the minds, which is a cornerstone of contract law and the definition of a legal binding agreement based on the statute of frauds(1677), does not this mean the contract is then indeed void?
And if the deed of trust agreement is void, does it not mean that the beneficiary can be held liable for all of the funds they received from the borrower throughout the duration of the contract agreement, including penalties? And wouldn’t it also mean that they deceived the court by stating that they have any standing or jurisdiction to argue a contract that is void on its face due to the fraud they perpetrated against the borrower now here in the court? And wouldn’t they also be liable to the borrower for all profits made by their manipulation of the borrower’s contract through the securitization of that note of Wall Street? And would the beneficiary also be liable to the borrower for committing mail fraud for every document sent to the borrower during the duration of the contract, thereby acting on behalf of a fraudulent contract agreement to entice and coerce to incite any payments or penalties accrued from the borrower based on the fraudulent deed of trust contract agreement?
And wouldn’t that also mean the security with which that contract was pooled into each tranche of an investment vehicle, such as a mortgage backed security, then indeed be based on fraud making that investment vehicle void? And wouldn’t the beneficiary also be liable to the court for knowingly deceiving and committing fraud against the court for every deed of trust and foreclosure document filed into the court system?”
He sat quiet and motionless. One could hear a pin drop in the packed courtroom of Alameda County, CA. You could see the wheels of jurisprudence weighing heavily behind the eyes of the electable caped adjudicator.
“Can they show me that I am wrong?” I added as the string of lawyers from Wells Fargo Bank sat silently with no response.
They couldn’t show the court that I was wrong then and are unable to still today.”
Shortly after this hearing, and out of the watch of the capacity filled court, the judge dismissed the case of Boggs v. Wells Fargo Bank on a technicality and removed all of the court documents from public view.
This short synopsis of a riveting 458 page narrative delivers a taste, through eyewitness experience, of the depth of deception, corruption, fraud and collusion between Wall Street, our legislative body, and our judicial systems in America today. The story of Boggs v. Wells Fargo Bank exposes the trail to tens of trillions of dollars of fraud and corruption through the highest levels of government defrauding families for decades. It is time for the public to be able to pull the veil back and see what kind of smoke and mirrors lie behind the curtains.
Douglas J Boggs — Writer/Entrepreneur
Author of “Quantum of Justice”
