BLOG TEMPLATE OF DEMAND LETTER AS OF 7-6-08

NOTICE: IF THIS TRANSACTION IS OR WAS COVERED UNDER ERRORS AND OMISSIONS INSURANCE OR INDEMNIFICATION OR INVESTOR INSURANCE OR COLLATERAL GUARANTEES OR TRANCHE ASSURANCE IN A SECURITIZED TRANSACTION (SALE OF ASSET BACKED SECURITZED WITH ONE OR MULTIPLE TRANCHES) THESE MUST BE DISCLOSED TO THE UNDERSIGNED ATTORNEY AND A COPY OF THIS LETTER MUST BE SENT TO ALL PARTIES WHO HAVE ACTUAL OR POTENTIAL LIABILITY, INSURANCE OR RIGHTS OF INDEMNIFICATION LETTERHEAD Date of Letter Addressee LENDER NAME, ADDRESS, PHONE NUMBER AND FAX NUMBER IF AVAILABLE MORTGAGE BROKER’S NAME, ADDRESS, PHONE NUMBER AND FAX NUMBER IF AVAILABLE COPIES SENT TO: ATTORNEY FOR “LENDER” NAME, ADDRESS, PHONE NUMBER AND FAX NUMBER IF AVAILABLE BORROWER(S) NAME SSN#XXX-XX-XXXX NAME SSN#XXX-XX-XXXX Settlement Agent: NAME ADDRESS TEL AND FAX IF AVAILABLE SETTLEMENT AGENT FILE NUMBER Addressee LENDER NAME, ADDRESS, PHONE NUMBER AND FAX NUMBER IF AVAILABLE TRUSTEE NAME, ADDRESS, PHONE NUMBER AND FAX NUMBER IF AVAILABLE COPIES SENT TO: MORTGAGE AUDIT SERVICE on behalf of Borrower(s) SETTLEMENT Loan Number: XXXXXXXXXXX Loan Number: XXXXXXXXXXX Loan Number: XXXXXXXXXXX PROPERTY PROPERTY ADDRESS First Mortgage Lender Name Borrower’s Name --- Date of Letter 1 NOTICE: IF THIS TRANSACTION IS OR WAS COVERED UNDER ERRORS AND OMISSIONS INSURANCE OR INDEMNIFICATION OR INVESTOR INSURANCE OR COLLATERAL GUARANTEES OR TRANCHE ASSURANCE IN A SECURITIZED TRANSACTION (SALE OF ASSET BACKED SECURITZED WITH ONE OR MULTIPLE TRANCHES) THESE MUST BE DISCLOSED TO THE UNDERSIGNED ATTORNEY AND A COPY OF THIS LETTER MUST BE SENT TO ALL PARTIES WHO HAVE ACTUAL OR POTENTIAL LIABILITY, INSURANCE OR RIGHTS OF INDEMNIFICATION Dear Sir or Madame: Please accept this letter on behalf of the above-named property owner and borrower. While this letter is written in part for purposes of settlement and compromise it is also a demand letter which can and will be used as necessary. It is therefore not a confidential communication protected under the rules of settlement disclosures and correspondence. You have taken the position that you represent the lender in the subject transaction. Our information is that this is a false assertion and that any notice of sale, foreclosure action, sale or eviction is wrongful abuse of the judicial system. Your client/customer is not the lender and has no authority, ownership, possession or control over the security instrument or note. Hence, every action you have taken thus far is wrongful. As an attorney you are obligated to perform due diligence to confirm the facts alleged by your client and in particular to confirm legal standing. One call to confirm whether your client had the necessary authority, possession of the original note or any other documents entitling your client to pursue sale or foreclosure would have revealed that this transaction was securitized --- i.e., assigned up to mortgage aggregators, investment bankers,. special purpose vehicle entities, “secured” with credit default swaps and eventually transferred, assigned or pledged to investors in asset backed securities. Demand is herewith made that you take all necessary steps to reverse all actions taken including the negative report to the credit reporting agencies and any third parties. Further, we herewith instruct you to send copies to this letter to the real parties in interest in the subject loan transactions, or their authorized legal counsel. We require a copy of said transmittal, including the contact information and official position of the person to whom you forward this letter. And as to the real party in interest, it is our information that the subject loan was the subject of transmittal or reference, in exchange for which the “lender” whose name appears on the note and mortgage (or the trustee named as the nominal title holder taking title pursuant to trust agreement with the “lender”) received (a) full payment of the entire principal of the note and (b) a premium of approximately 2.5% of the entire loan balance. It would therefore appear that (a) the note has been satisfied in full by third party payment, (b) no assignment or sale of the actual instruments occurred on record nor was same disclosed and (c) the transfer of certain rights prior to or contemporaneous with the alleged “closing” of this “loan” transaction negated any interest in the transaction by the “lender” and thus voided any authority of the lender to enter into any agreement with a Trustee, who therefore holds title solely in constructive trust for the homeowner/borrower. Further, according to our information the transfer of rights was repeated multiple times by multiple parties which involved the guarantee of revenue and payments that were not provided in the note. The note being a negotiable instrument under the UNiform Commercial Code, and representing a passive income, thus constitutes the issuance of security without compliance with the applicable state and Federal securities law. Accordingly, we demand First Mortgage Lender Name Borrower’s Name --- Date of Letter 2 NOTICE: IF THIS TRANSACTION IS OR WAS COVERED UNDER ERRORS AND OMISSIONS INSURANCE OR INDEMNIFICATION OR INVESTOR INSURANCE OR COLLATERAL GUARANTEES OR TRANCHE ASSURANCE IN A SECURITIZED TRANSACTION (SALE OF ASSET BACKED SECURITZED WITH ONE OR MULTIPLE TRANCHES) THESE MUST BE DISCLOSED TO THE UNDERSIGNED ATTORNEY AND A COPY OF THIS LETTER MUST BE SENT TO ALL PARTIES WHO HAVE ACTUAL OR POTENTIAL LIABILITY, INSURANCE OR RIGHTS OF INDEMNIFICATION indemnification and bond for any exposure to liability which the homeowner/borrower may suffer as a result of fraudulent representations concerning the content of the note and misrepresentations as to the the true obligors. The homeowner/borrower was induced to sign documents which the homeowner/borrower believed to be a standard mortgage and note with the standard relationships between borrower and lender when in fact the borrower was tricked into issuing a security, and was not made aware of the fact that the funding of the loan came from an undisclosed party, and that the subject loan was never entered in the accounting of the lender nor reported as an asset in the “lender’s” reports to regulatory authorities. Instead, the “lender” recorded the transaction only insofar as it received a fee or premium on the subject security/note on its income statement but never recorded either the asset nor any reserve for default. Thus any “mortgage service provider” entered into a reserved rights that were not transferable because they were not retained or owned by the transferor. Accordingly the homeowner/borrower has no way of knowing whether the homeowner/borrower is subject to multiple claims from third parties each of whom claims an interest in the mortgage and note. We therefore demand proof, along with the opportunity to inspect original documentation, showing that the homeowner/ borrower is obligated to pay you or anyone else. In the absence of receiving such documentation, we will assume that you do not have it and that therefore you are not entitled to any payment. It would also follow that you would be unaware of any additional third party payments that included alleged payment obligations or revenue streams “derived from” the note/security executed at “closing” under false pretenses, as aforesaid, and that therefore you are unable to provide us with any accountant for the entire stream of revenue, payments, cross guarantees, up stream tranche payments, credit default swap payments and the dozens of fees that were not disclosed at the time of the “closing.” It is our intention to withhold payment and file an action to foreclose any rights you or any third party claims to any alleged encumbrance or liability in connection with real property subject to the subject documents that appeared at the ”closing.” Apparently you have also appeared or might appear in a bankruptcy court of competent jurisdiction in similar cases, and would do so in this case if the opportunity arose, requesting relief from the automatic stay, alleging that you were the lender. This should be corrected, as you know, in that it subjects you to sanctions. Neither you nor anyone claiming an interest through you qualify as a secured creditor of a liquidated debt. You or your client have previously been presented with proper notices of deceptive lending practices in the closing on the above-referenced loans. Said notices were accompanied by Proposed Resolutions under the Federal Truth in Lending Act and the Real Estate Settlement Procedures Act. The allegations concerning the misrepresentation of the APR is aggravated by the inflated appraisal used to justify the loan. The borrower here is entitled to the recovery of First Mortgage Lender Name Borrower’s Name --- Date of Letter 3 NOTICE: IF THIS TRANSACTION IS OR WAS COVERED UNDER ERRORS AND OMISSIONS INSURANCE OR INDEMNIFICATION OR INVESTOR INSURANCE OR COLLATERAL GUARANTEES OR TRANCHE ASSURANCE IN A SECURITIZED TRANSACTION (SALE OF ASSET BACKED SECURITZED WITH ONE OR MULTIPLE TRANCHES) THESE MUST BE DISCLOSED TO THE UNDERSIGNED ATTORNEY AND A COPY OF THIS LETTER MUST BE SENT TO ALL PARTIES WHO HAVE ACTUAL OR POTENTIAL LIABILITY, INSURANCE OR RIGHTS OF INDEMNIFICATION refunds, rebates, damages and punitive damages or treble damages in addition to attorney fees and costs. The manner in which the mortgage and closing were conducted, the structure of the financing and the overall circumstances of the transaction have resulted in a waiver of the exemptions provided in TILA for rescission of certain residential mortgages, including the liens and notes referenced in this letter. Notwithstanding the above, your agents have threatened foreclosure, sale and eviction of the homeowner/borrower, despite the facts that the borrower is not in default, the lender and trustee are ignorant of any facts to state affirmatively that the borrower is or is not in default, the lender is in default of its obligations under applicable Federal and State laws, the lender at the closing the servicing agent are not the real parties in interest (i.e., they lack standing to proceed to judicial or non-judicial sale), the trustee and lender lack authority to proceed but have intentionally and fraudulently filed papers and posted notices as though the authority was present. This matter has been referred to our office for settlement, as per prior discussions you have had with the auditors and the borrower’s advisers. We require proof and copies of documentation, including a description of where the originals can be found as to the ACTUAL legal holder of the note and the owner of the mortgage lien or proof that you hold current, effective authorizations from all actual owners of collateralized securities that were sold using the subject property, mortgage, note and borrower’s signature as the asset from which the security derived its value. In the alternative, for settlement purposes only, we would accept bonded assurance of indemnification and hold harmless from any claims arising from any third party against the borrower. WE HEREWITH DEMAND THE NAMES AND CONTACT INFORMATION ALONG WITH A DESCRIPTION OF THE SECURITY SOLD, THE ASSIGNMENT MADE, AGREEMENTS SIGNED, BETWEEN ALL OF THE MORTGAGE BROKERS, REAL ESTATE BROKERS, DEVELOPERS, APPRAISERS, MORTGAGE AGGREGATORS, INVESTMENT BANKERS, RETAIL OR OTHER SELLER OF SECURITIES AND THE INVESTORS WHO PURCHASED THE SECURITIES. BASED UPON THE INFORMATION WE HAVE RECEIVED THUS FAR AND IN ACCORDANCE WITH OUR SUMMARY STATED BELOW WHICH YOU CAN EVALUATE FOR YOURSELVES, WE FIND CAUSES OF ACTION FOR LIABILITY AGAINST YOU AND SEVERAL OTHER PARTIES, AND CAUSES OF ACTION WHICH DEMONSTRATE THE DE-LINKING OF THE NOTE, MORTGAGE AND RISK OF LOSS. First Mortgage Lender Name Borrower’s Name --- Date of Letter 4 NOTICE: IF THIS TRANSACTION IS OR WAS COVERED UNDER ERRORS AND OMISSIONS INSURANCE OR INDEMNIFICATION OR INVESTOR INSURANCE OR COLLATERAL GUARANTEES OR TRANCHE ASSURANCE IN A SECURITIZED TRANSACTION (SALE OF ASSET BACKED SECURITZED WITH ONE OR MULTIPLE TRANCHES) THESE MUST BE DISCLOSED TO THE UNDERSIGNED ATTORNEY AND A COPY OF THIS LETTER MUST BE SENT TO ALL PARTIES WHO HAVE ACTUAL OR POTENTIAL LIABILITY, INSURANCE OR RIGHTS OF INDEMNIFICATION YOU HAVE NOT DEMONSTRATED THE AUTHORITY OR KNOWLEDGE TO KNOW WHETHER THERE WAS PAYMENT BY A THIRD PARTY(IES) TO THE ULTIMATE BENEFICIARY OF THE INCOME STREAM PROMISED TO THE INVESTOR IN AN ASSET BACKED SECURITY. IN FACT, WE BELIVE YOU CANNOT IDENTIFY THE HOLDER OF THE NOTE, THE MORTGAGE, THE RISK OF LOSS OR THE ULTIMATE BENEFICIARY OF THE INCOME STREAM, NOR CAN YOU CLAIM KNOWLEDGE AS TO THE FLOW OF INCOME RECEIVED BY SAID BENEFICIARY(IES). SOME OF THE LEGAL ISSUES PRESENTED IN THIS CASE MORTGAGE MELTDOWN: A series of events (stemming from the 1983 introduction of derivative securities) created by a tacit cartel of investment bankers and other financial institutions in which borrowers were “approved” "loaned" money on purchase money mortgages based upon false appraisals in the context of contemporaneous securitized transactions where the investment capital was procured by fraud in unregulated security offerings to "qualified" investors, based upon false assurance, false ratings, false insurance backing, and false appraisals of underlying property, income of borrowers and many other factors. The logistics of this scam were revealed in pieces and have threatened the very existence of many financial institutions and the financial markets themselves. Indexes, such as LIBOR, were indirectly manipulated by U.S. financial institutions to hide the true facts. Despite a brief period in which certain arcane "auction markets" froze up (in places and events unknown to the public, business has resumed as usual. The lack of regulation from a responsible, accountable agency or group of agencies has spawned hundreds of lawsuits and millions of foreclosures, many producing counterclaims for far more than the original mortgage and note. The net result was that millions of people were defrauded directly or indirectly by the purchase of asset backed securities whose risk and value were not verified and million of people were defrauded directly or indirectly as the result of purchasing or refinancing property whose value was intentionally inflated under circumstances where the loan was not underwritten in conventional terms and standard features like escrow accounts for insurance and taxes were excluded from the payments. Large, undisclosed and unconscionable fees and points were First Mortgage Lender Name Borrower’s Name --- Date of Letter 5 NOTICE: IF THIS TRANSACTION IS OR WAS COVERED UNDER ERRORS AND OMISSIONS INSURANCE OR INDEMNIFICATION OR INVESTOR INSURANCE OR COLLATERAL GUARANTEES OR TRANCHE ASSURANCE IN A SECURITIZED TRANSACTION (SALE OF ASSET BACKED SECURITZED WITH ONE OR MULTIPLE TRANCHES) THESE MUST BE DISCLOSED TO THE UNDERSIGNED ATTORNEY AND A COPY OF THIS LETTER MUST BE SENT TO ALL PARTIES WHO HAVE ACTUAL OR POTENTIAL LIABILITY, INSURANCE OR RIGHTS OF INDEMNIFICATION charged to borrowers, which combined with the APR and the inflated appraisals created usurious loans in virtually every case. Thousands of mortgage brokers, appraisers and others involved in the process are likely to lose their licenses or otherwise receive discipline from teh regulatory boards in their state or jurisdiction. QUIET TITLE: In essence the reverse of a traditional foreclosure where the owner of the property forecloses the claim of the people against whom he he has filed suit claiming the property free and clear of all encumbrances. Demand is made that you accept service of process of a quiet title action through your designated attorney and that you admit the essential allegations and consent to judgment being entered. The significance in foreclosure OFFENSE is that the loan has been assigned, sold and transferred multiple times and broken up into thousands of pieces along with many others that were intermingled in portfolios, sometimes with cross guarantees from one portfolio to another. This process started before the first payment was due on the mortgage loan and before the victim/borrower came to know the real facts of the loan withheld from him in an asymmetric information environment in an inter-temporal transaction. Thus the true owner, against whom rescission could be claimed was never disclosed to the victim/borrower. The quiet title action sues "John Doe" identified as all persons having an ownership interest in the mortgage lien on the subject property. The allegation is made that while the victim/borrower has been notified of a transaction, the victim/borrower, petitioner has not been advised of who the entities or people are who own this interest. And since there are TILA and other fraudulent violations, the victim/ borrower/petitioner wishes to rescind. Efforts to determine the true owners have led the Borrower to determine that there may be thousands of entities or owners, none of whom have been disclosed to Borrower despite attempts to secure said information (contained in the TILA report and demand). First Mortgage Lender Name Borrower’s Name --- Date of Letter 6 NOTICE: IF THIS TRANSACTION IS OR WAS COVERED UNDER ERRORS AND OMISSIONS INSURANCE OR INDEMNIFICATION OR INVESTOR INSURANCE OR COLLATERAL GUARANTEES OR TRANCHE ASSURANCE IN A SECURITIZED TRANSACTION (SALE OF ASSET BACKED SECURITZED WITH ONE OR MULTIPLE TRANCHES) THESE MUST BE DISCLOSED TO THE UNDERSIGNED ATTORNEY AND A COPY OF THIS LETTER MUST BE SENT TO ALL PARTIES WHO HAVE ACTUAL OR POTENTIAL LIABILITY, INSURANCE OR RIGHTS OF INDEMNIFICATION In Ohio and other states, the inability of the “Lender” or Mortgage Servicer to produce the original note and mortgage, combined with their inability to produce the documentation regarding the assignment or sale of the loan has resulted in de-linking the mortgage from the security interest in the home and the cancellation of the note giving the borrower free and clear title to the property that was subject to the original loan transaction. If the court demands that the mortgage servicing company be named as nominal Defendant or Respondent, the mortgage servicing company has only one job: to produce information and proof of ownership of the loan. It is doubtful that anyone, least of all the mortgage servicing entity will be able to fulfill this condition. Thus the default judgment will be entered, the victim stops paying the mortgage, and has a recorded judgment relieving his property of any mortgage lien and offsetting the note with the refunds and damages payable to the victim, thus satisfying the entire principal of the note and awarding attorney fees to the victim/petitioner. RESCISSION: The right to reverse the transaction. Ordinarily rescission involves giving back everything you received in exchange for getting back everything you gave. In this setting it means the right to get back ALL the interest, points, closing costs and attorney fees and other costs at or after closing that you incurred as a result of the transaction. Rescission rights exist under Federal Statutory Law (Truth in Lending Act - TILA, State Deceptive Business practice Acts, and at common law.) It doesn't mean the Borrower is required to give back the money to the lender --THAT obligation commences AFTER the lender admits to the rescission or it is otherwise decreed and then it is reduced by the refunds of points, interest, closing costs paid plus damages and attorney fees suffered as a result of the issues raised in this letter. Rescission does not in this case mean the Borrower owes any money at all to the lender. It means that the mortgage lien is extinguished and so is the note. It converts a secured debt, non-dischargeable in bankruptcy to an unsecured debt wholly dischargeable in bankruptcy. And unless the party coming into court or the auction as a "representative" of the lender can prove that they have received their instructions First Mortgage Lender Name Borrower’s Name --- Date of Letter 7 NOTICE: IF THIS TRANSACTION IS OR WAS COVERED UNDER ERRORS AND OMISSIONS INSURANCE OR INDEMNIFICATION OR INVESTOR INSURANCE OR COLLATERAL GUARANTEES OR TRANCHE ASSURANCE IN A SECURITIZED TRANSACTION (SALE OF ASSET BACKED SECURITZED WITH ONE OR MULTIPLE TRANCHES) THESE MUST BE DISCLOSED TO THE UNDERSIGNED ATTORNEY AND A COPY OF THIS LETTER MUST BE SENT TO ALL PARTIES WHO HAVE ACTUAL OR POTENTIAL LIABILITY, INSURANCE OR RIGHTS OF INDEMNIFICATION and authorization from a party who is authorized to give those instructions, then they lack authorization, they lack legal standing and they are probably committing a fraud on the Borrower, the court and everyone else. Companion Tranche A specific tier or segment of REMIC security. A REMIC tranche that is structured to absorb a disproportionate amount of the volatility caused by variations in the prepayments of the underlying collateral. Companion tranches are created to be more volatile so that other tranches in the same REMIC, called PAC or TAC tranches, may have more stable cash flows. Hence the name companion. Also called support tranches. The significance in Foreclosure defense is that this is one of the devices used in the covenants or indentures of ABS instruments that assures payment to the holder of the security. Since the holder of the security is the "owner" of the mortgage and note, it is reasonable to assume that either the holder of the mortgage has been paid by a third party or that a third party assumed the liability. Hence any grounds for foreclosure, notice of sale, judgment, sale or eviction have been waived and any attempt to plead or represent otherwise to public authorities or the Court would be fraud. The existence of a interest and/or payment reserve in the special purpose vehicle formed to issue asset backed securities also provides the basis of our denial that there is or even could be a delinquency or default on this loan. Compliance Risk One of nine risks defined by the Office of the Comptroller of the Currency (OCC). The risk to earnings or capital arising from violations of or nonconformance with laws, rules, regulations, prescribed practices, or ethical standards. This risk is incorporated in the Federal Reserve definition of legal risk. Participants in the Mortgage Meltdown of 2001-2008 were virtually all out of compliance and upon filing of an administrative complaint to the OCC, could be prosecuted for violations. The scheme in which the recipients of this engaged was developed to conduct economic and financial activity beyond the reach of regulation and outside of the requirements to disclosures to innocent third parties who were thus defrauded and suffered First Mortgage Lender Name Borrower’s Name --- Date of Letter 8 NOTICE: IF THIS TRANSACTION IS OR WAS COVERED UNDER ERRORS AND OMISSIONS INSURANCE OR INDEMNIFICATION OR INVESTOR INSURANCE OR COLLATERAL GUARANTEES OR TRANCHE ASSURANCE IN A SECURITIZED TRANSACTION (SALE OF ASSET BACKED SECURITZED WITH ONE OR MULTIPLE TRANCHES) THESE MUST BE DISCLOSED TO THE UNDERSIGNED ATTORNEY AND A COPY OF THIS LETTER MUST BE SENT TO ALL PARTIES WHO HAVE ACTUAL OR POTENTIAL LIABILITY, INSURANCE OR RIGHTS OF INDEMNIFICATION damages and did not receive the benefit of the bargain that was sold to them at the “closing” of the real estate transaction. Conventional Mortgage A mortgage loan based solely upon the value of the mortgaged real estate and the creditworthiness of the borrower. A mortgage loan without insurance or guarantees from a government agency. as stated above, this transaction was not, is not and can never be described as “conventional” under any definition or interpretation. The significance is that with securitization of the loans there is (a) insurance to the holder of the CLO (b) guarantees of payment from third parties and (c) in practice, guarantees from the Federal Government (witness the Federal Reserve bailout of Bear Stearns and the Federal Reserve policy of allowing investment bankers who are holding CLOs to use those CLOs for loans at the Fed window). The securitized transactions thus converted the original transaction from a conventional loan to a complex consumer credit, insured, guaranteed, pooled security transaction falling far outside of the TILA exemption regarding residential home mortgages eligibility for rescission. INTER-TEMPORAL TRANSACTIONS: Transactions in which the commencement of the terms at the execution of the deal contains terms, risks or provisions that differ from a later time. Many borrowers are seduced into accepting these deals believing that the extra money they are getting out of the mortgage proceeds will help them indefinitely to make future payments. It is the lender's obligation to disclose that this is not the case, that the borrower's income does not cover the amount of future payments which the lender understands and the borrower does not (see asymmetric information). The fact that with the passage of a short period of time (as little as three months) the payments would be increased to a level that the borrower could not afford was not disclosed to the borrower but well-known to all other participants in the real estate and “loan” “closing.” First Mortgage Lender Name Borrower’s Name --- Date of Letter 9 NOTICE: IF THIS TRANSACTION IS OR WAS COVERED UNDER ERRORS AND OMISSIONS INSURANCE OR INDEMNIFICATION OR INVESTOR INSURANCE OR COLLATERAL GUARANTEES OR TRANCHE ASSURANCE IN A SECURITIZED TRANSACTION (SALE OF ASSET BACKED SECURITZED WITH ONE OR MULTIPLE TRANCHES) THESE MUST BE DISCLOSED TO THE UNDERSIGNED ATTORNEY AND A COPY OF THIS LETTER MUST BE SENT TO ALL PARTIES WHO HAVE ACTUAL OR POTENTIAL LIABILITY, INSURANCE OR RIGHTS OF INDEMNIFICATION DEMAND FOR PRELITIGATION SETTLEMENT In our opinion, the case should be settled for a complete release of the mortgage obligation, the filing of the satisfaction of lien, release and return of the note or an affidavit stating that the note is lost, which affidavit will be filed in the County records, and payment of attorney fees, auditing fees and expert witness fees in an amount not less than $16,500. This offer automatically expires at 5:00pm ten (10) calendar days following the date of this letter or the next business day if said ten day period ends on a weekend or United States National Holiday. We explain our reasoning below. Unless you disagree, it probably would be wise to accept the offer immediately, since we are authorized to bring suit in a court of competent jurisdiction based upon the facts and causes of action raised in this letter and prior correspondence. Based upon information received from the experts in this case and based upon our own factual and legal investigation there appear to be claims in addition to the claims stated in prior correspondence, which claims based upon the following summary, are in most cases not exclusive and therefore the demands stated in this letter and prior correspondence you have received, which is incorporated herein as specifically as if set forth at length hereat, should all be considered cumulative. 1. Usury: As a result of the artificially inflated “fair market values” utilized by the LENDER, its agents, servants and/or employees, to induce the borrower to sign the mortgage documents and purchase the property, the effective yield now vastly exceeds the legal lending limit in the State of origination, if the borrower pays in accordance with the mortgage and note indentures. A quick review of the usury law will reveal that while it has been relaxed somewhat to accommodate predatory lending through credit cards and payday loans, it remains somewhat stringent in connection with other loans and allows the borrower to to cancel the loan and collect damages. Hence, just for the record, in the unlikely event we do not settle this case, demand is herewith made for full satisfaction of the mortgage and note plus three times the value of the note in damages, plus attorney fees and costs of 10% of the value of the of the claim which is the principal of the note plus three times the principal of the note. 2. Security Violation: The subject mortgage was part of a purchase transaction in which the property was sold with promises and assurances that the value would go up, the rental value would assure a return on investment, and that the investor need not perform any work, since the maintenance and other factors would be done by third parties --- the Condominium First Mortgage Lender Name Borrower’s Name --- Date of Letter 10 NOTICE: IF THIS TRANSACTION IS OR WAS COVERED UNDER ERRORS AND OMISSIONS INSURANCE OR INDEMNIFICATION OR INVESTOR INSURANCE OR COLLATERAL GUARANTEES OR TRANCHE ASSURANCE IN A SECURITIZED TRANSACTION (SALE OF ASSET BACKED SECURITZED WITH ONE OR MULTIPLE TRANCHES) THESE MUST BE DISCLOSED TO THE UNDERSIGNED ATTORNEY AND A COPY OF THIS LETTER MUST BE SENT TO ALL PARTIES WHO HAVE ACTUAL OR POTENTIAL LIABILITY, INSURANCE OR RIGHTS OF INDEMNIFICATION Association, the real estate broker, the management office etc. This constitutes, despite the appearance of other “uses” the sale of a security under the Securities Act of 1933 and other applicable Federal and state Securities laws. The sale of this security was improper, lacking disclosure, rights to rescind under the securities laws, and lacking in disclosure as to the true nature of the transaction and the true position of the parties, including but not limited to the fact that the “lender” was in actuality acting as a conduit, removing the essential aspect of risk-sharing in the normal lender-borrower relationship, that the risk of loss was not only real but unavoidable because of the artificially inflated values, and that the Buyer should consider the purchase to be a high-risk investment with the possibility of total loss. Since the sale of THIS security was part of larger plan to sell securities to “qualified” investors using false ratings and false assurances of insurance, together with a promised rate of return in excess of the revenue produced by the underlying efforts, the sale of THIS security was part of larger Ponzi scheme wherein securities were sold at both ends of the spectrum of the supplier of capital (the investor) and the consumer of the capital (the borrower and the seller of the property). Since compensation arising from the transaction with this borrower was not disclosed to the borrower, the transaction lacked proper disclosure and is subject to rescission, compensatory and punitive damages. Hence, just for the record, in the unlikely event we do not settle this case, demand is herewith made for full satisfaction of the mortgage and note plus three times the value of the note in damages, plus attorney fees of 10% of the value of the of the claim which is the principal of the note plus three times the principal of the note. 3. Common Law Fraud in the Inducement and Fraud in the execution of the closing documents including but not limited to the settlement statement, the mortgage and note. Hence, just for the record, in the unlikely event we do not settle this case, demand is herewith made for full satisfaction of the mortgage and note plus three times the value of the note in damages, plus punitive and/or exemplary damages plus attorney fees of 10% of the value of the of the claim which is the principal of the note plus three times the principal of the note. 4. STATE Unfair and Deceptive Trade Practices Act: while the transaction clearly involves interstate commerce, Florida law provides for much the same remedies as described above for unfair and deceptive lending or business practices. Hence, just for the record, in the unlikely event we do not settle this case, demand is herewith made for full satisfaction of the mortgage and note plus three times the value of the note in damages, plus punitive and/or exemplary damages plus attorney fees of 10% of the value of the of the claim which is the principal of the note plus three times the principal of the note. 5. TILA claims have been summarized in prior correspondence. Because the transaction is not a pure first mortgage residential transaction, the TILA exception for rescission does not apply and we therefore demand rescission in addition to the above-stated claims. Hence, just for the record, in the unlikely event we do not settle this case, demand is herewith made for full satisfaction of the mortgage and note plus three times the value of the note in damages, plus First Mortgage Lender Name Borrower’s Name --- Date of Letter 11 NOTICE: IF THIS TRANSACTION IS OR WAS COVERED UNDER ERRORS AND OMISSIONS INSURANCE OR INDEMNIFICATION OR INVESTOR INSURANCE OR COLLATERAL GUARANTEES OR TRANCHE ASSURANCE IN A SECURITIZED TRANSACTION (SALE OF ASSET BACKED SECURITZED WITH ONE OR MULTIPLE TRANCHES) THESE MUST BE DISCLOSED TO THE UNDERSIGNED ATTORNEY AND A COPY OF THIS LETTER MUST BE SENT TO ALL PARTIES WHO HAVE ACTUAL OR POTENTIAL LIABILITY, INSURANCE OR RIGHTS OF INDEMNIFICATION punitive and/or exemplary damages plus attorney fees of 10% of the value of the of the claim which is the principal of the note plus three times the principal of the note. 6. RESPA: You have failed to properly respond to the claims under the act are are currently in violation. Hence, just for the record, in the unlikely event we do not settle this case, demand is herewith made for full satisfaction of the mortgage and note plus three times the value of the note in damages, plus punitive and/or exemplary damages plus attorney fees of 10% of the value of the of the claim which is the principal of the note plus three times the principal of the note. 7. RICO: As stated above there were multiple parties in multiple states in a scheme spanning virtually all continents in which false, misleading and non-conforming statements were made to investors and borrowers alike, wherein numerous entities (including but not limited to the recipients of this letter) acted in concert with other “lenders” and investment bankers to artificially create the appearance of higher market values for property and the false appearance of trends that did not in actuality exist, but for the “free money” (secured under false pretenses) pumped into a financial system and real estate market consisting of false and deceptive high pressure sales tactics whose objectives were to get the borrower’s signature without regard for the consequences to either the borrower or the investor. Hence, just for the record, in the unlikely event we do not settle this case, demand is herewith made for full satisfaction of the mortgage and note plus three times the value of the note in damages, plus punitive and/or exemplary damages plus attorney fees of 10% of the value of the of the claim which is the principal of the note plus three times the principal of the note. Under Federal Law, you are a provider of financial services and/or products to a borrower whom you or your agents, predecessors, or successors intentionally deceived at the closing of the loan, conspired to misrepresent the proper appraised value of the property, and have now ignored your basic responsibilities of presenting a response to the notices and correspondence already on file with you and regulatory agencies, who have been informed of your illegal and improper conduct. Notwithstanding the above, the borrowers are now faced with the apparent prospect of losing their house, their credit rating, and have been required to seek the services of legal counsel to forestall the loss, for which services demand is herewith made under the terms of the mortgage and all applicable Federal (TILA, RESPA, RICO) and State Law.. YOUR CONDUCT, IF IT CONTINUES, PROVIDES THE NECESSARY EVIDENTIARY BASIS FOR THE ASSERTION OF A CLAIM UNDER THE STATE CIVIL REMEDIES FOR CRIMINAL PRACTICES ACT, WHICH PROVIDES FOR THE IMPOSITION OF TREBLE DAMAGES, COSTS AND ATTORNEY FEES. First Mortgage Lender Name Borrower’s Name --- Date of Letter 12 NOTICE: IF THIS TRANSACTION IS OR WAS COVERED UNDER ERRORS AND OMISSIONS INSURANCE OR INDEMNIFICATION OR INVESTOR INSURANCE OR COLLATERAL GUARANTEES OR TRANCHE ASSURANCE IN A SECURITIZED TRANSACTION (SALE OF ASSET BACKED SECURITZED WITH ONE OR MULTIPLE TRANCHES) THESE MUST BE DISCLOSED TO THE UNDERSIGNED ATTORNEY AND A COPY OF THIS LETTER MUST BE SENT TO ALL PARTIES WHO HAVE ACTUAL OR POTENTIAL LIABILITY, INSURANCE OR RIGHTS OF INDEMNIFICATION Accordingly your position, in the absence of any authority to do so under law is invalid and illegal. ON BEHALF OF THE BORROWER/HOMEOWNER DEMAND IS HEREWITH MADE THAT ALL EFFORTS AT SALE, EVICTION OR FORECLOSURE BE STOPPED IMMEDIATELY AS THE PROPERTY IS SCHEDULED FOR EVICTION/SALE WITHIN A FEW DAYS. Any further attempts at collection will result in further action taken on behalf of the borrowers for all remedies available in law and equity in both administrative proceedings, and judicial forums possessing competent jurisdiction, which will seek damages for unfair trade trade practices, treble damages under applicable law for RICO, FTC and little FTC violations, consequential damages and refunds, attorney fees, court costs, and all other available remedies in law or equity. PLEASE GOVERN YOURSELVES ACCORDINGLY!!! Very truly yours, First Mortgage Lender Name Borrower’s Name --- Date of Letter 13