CC securitization and agreement to terms...

[My~Cuz~n~Vinny~]

Can Securitization be used as a discovery tool indirectly?

The burden of proof is on the plaintiff to show that a contract creating the debt existed. Canney v. New England Tel & Tel. Co., 353 Mass. 158, 164 (1967). The plaintiff also bears the burden of proving that the defendant breached the contract. Beware situations where debt collectors try to shift the burden informally to the defendant. Frequently, debt collectors improperly present the issue to the defendants as "this debt is yours, and you owe it, unless you can prove otherwise."

In cases involving credit cards, courts require the actual terms and conditions of the agreement with the user's actual signature as proof of a contract. A photocopy of general terms to which the credit issuer may currently demand of its customers is not sufficient. For example, if a model credit card contract provides for the creditor to recover attorney's fees and court costs in a collection action, the burden is on the creditor to show that the debtor in fact received and agreed to that contract. Norfolk Financial Corporation v. MacDonald, 2003 Mass. App. Div. 153, 154.

First, to qualify.as a business record, the document must have

been made: (1) in good faith, (2) in the regular course of business, (3) before the commencement of the legal action, and (4) that it is the regular course or practice of the business to make such records. MASS. GEN. LAWS Ch. 233, § 78; MacDonald, 2003 Mass. App.

March 2007 FDIC-Division of Supervision and Consumer Protection Manual

Eligible Receivables for CC securitization

Arise from an "eligible account."

Be created in compliance, in all material respects, will all requirements of law applicable to the credit card issuing bank.

Have all authorizations, consents, orders or approvals of or registrations or declarations with any governmental authority that are required to be obtained, effected, or given by the bank in connection with the conveyance by the bank of receivables to the trust.

Have good and marketable title, free and clear of all liens and security interest. at time of creation.

Have a cardholder payment obligation that is legally enforceable against the cardholder in accordance with the terms of the agreement.

Constitute an account under Article 9 of the Uniform Commercial Code (UCC).

1. Plaintiff has no evidence admitted that a C.C. account is valid.

2. Defendant has generally denied all statements in complaint.

3. Plaintiff's only requests for discovery admissions and interrogatories and production of documents have been answered as denied by defendant,without any objections by plaintiff.

4. Battling MSJ's are ruled as denied for both parties.

5. Discovery is closed as requested by plaintiff.

6. Fact finders mission is scheduled.

1. Plaintiff has produced no agreement to terms ,no contract ,no agreement of an amount due as agreed to between parties.

2. Plaintiff has produced no choice of law provision governing any terms of agreement.

3. Plaintiff has produced no choice of law provision governing any terms of agreement of interest rate after an alleged default.(28.9%)

4. Plaintiff has produced no prospectus on the alleged account.

5. Plaintiff has produced no document showing business records were created at the time of the alleged default.

Long after suit commenced plaintiff produced alleged account as stated. Evidence exists that attorney requested account application documents 6 months after charge off.Evidence exists that plaintiff sent document void of any selected records as being found on the alleged "applied for account". Same request was made to Plaintiff again and marked " RUSH for Litigation ". Two months in to suit, Plaintiff produces the same document to their attorney,but now Items are checked off as being found. No signature of employee. Just checked off boxes selected as found.

6. Plaintiff has produced no credentials of any affiant or Authorized Agent as being a competent natural person.

7. Plaintiff has produced no credentials of any natural person whom initiated request for litigation from the alleged OC.

Since plaintiff lost summary judgment, and the Plaintiff is known for public fact that it securitizes it's credit card receivables(legally)....wouldn't they also have to produce....

.... a cardholder payment obligation that is legally enforceable against the cardholder in accordance with the terms of the agreement...?

....and a quarterly prospectus showing what constitutes an account under Article 9 of the Uniform Commercial Code (UCC). ?

A little summary about securitization. It is Legal to use a revolving pool of credit card receivables as an asset for principal. That is not arguable. If Plaintiff cannot produce an agreement of terms or a signed contract, then accordingly the sale of asset backed securities is premised upon an estimation that precludes the available assets for sale with any prospectus.

Basically they used an erroneous estimation of assets. If they have no documentation of cardholder payment obligation that is legally enforceable against the cardholder in accordance with the terms of the agreement is produced...... then on a federal level they are one violation closer to a viable racketeering charge. No less in good shape to prove the existence of a contract in accordance with the terms of the agreement of the specific credit card agreement.

The other side has so far been failed to prove through discovery that

" use and acceptance is admissible ". By way of law or by use. They haven't proven use . They haven't proved acceptance.

[Flyerfan]

If the complaint is based on "account stated", though, a signature is not required. Use of the card constitutes the contract. This is a common theme in credit card cases.

Account stated basically says if you did not dispute the charges then you agreed to them.

[antiquedave]

This issue can be a tar baby, I used securitization as a defense to challenge the OC's standing, the Judge in the case allowed it to continue, that in itself is a rarity, most Judges are not going to allow it.

It is a complicated issue with a lot of twists and turns and ultimately most people and accountants, lawyers and Judges do not understand it, or can explain it let alone a Pro Se that needs to at the very least be able to bring the Judge along for the adventure.

The opposing Attorney did not understand it and claimed that the documents I requested in discovery did not exist, so I provided proof in the form of copies of public filings with the SEC and the Master Trust that referenced the documents when I filed my motion to compel.

That is all the farther I got in the process before we came to an agreement

The opposing attorney spent all their energy and time trying to dispel the Securitization defense which quite honestly surprised me, I never got to test the waters on the other defenses or to attack the affidavit and affiant.

I did have multiple FDCPA and MOCC claims and included not just claims in the response but I attached an affidavit, included my damages, and the complaint for two of the counter/cross claims.

This requires a lot of time, IF you are going to use it I would suggest that you have all of your other defenses nailed down and that you do not place a lot of hope in it to be a silver bullet.

IF I am sued again I will use it again because I know that the Judge will allow it, and I know that the opposing attorney will most likely hate it and hate dealing with it. They will not release the documents you want in discovery and you know; guys that has value in and of itself.

[My~Cuz~n~Vinny~]

If the complaint is based on "account stated", though, a signature is not required. Use of the card constitutes the contract. This is a common theme in credit card cases.

Account stated basically says if you did not dispute the charges then you agreed to them.

Thanks Flyerfan.

Their first count is breach of contract. 2nd count is account stated.

So far they have nothing admitted as evidence or proven to be admitted from the defendant.They wish to say use and acceptance in their discovery and their MSJ has already been denied and we are supposedly are going to trial,,,but must go to the fact finders mission first.

[My~Cuz~n~Vinny~]

Thanks antiquedave. I agree, it is indeed a tar baby without overburdening the judge. I still see it as a valuable tool but not as a stand alone defense. If they fail to repurchase any unstructured early amortization event to the trust ,(which backs the banks receivables ),then they not only have show the prospectus to prove the sale was made to an investor,but that the amortization event was repurchased.

Plus they have not proven this account is valid.They have been denied a MSJ already on use and acceptance...written contracts,,,alleged agreements.A prospectus showing a sale of pooled receivables on the account should prove whether they sold it or not. The OC always owns the alleged account unless, they didn't do their repurchasing according to the master agreement and corresponding prospectus.

[rte]

Antiquedave,

How did you dig up information on SEC filings and the like? Is that simple enough to do, or do you need special access? I probably don't have the smarts to investigate, but I did come across a roundtable discussion sponsored by the FTC in which lawyers and court representatives talked about securitizing judgments. Apparently a judgment has a higher sale value.

Could you share with us how you dug up the info? This sort of thing may not fly in court but for an MSJ, it may raise some kind of doubt that makes for a triable issue. Just thinking out loud. Who knows, it may even make it to appellate level, or maybe not.

Thanks!

[antiquedave]

Antiquedave,

How did you dig up information on SEC filings and the like? Is that simple enough to do, or do you need special access? I probably don't have the smarts to investigate, but I did come across a roundtable discussion sponsored by the FTC in which lawyers and court representatives talked about securitizing judgments. Apparently a judgment has a higher sale value.

Could you share with us how you dug up the info? This sort of thing may not fly in court but for an MSJ, it may raise some kind of doubt that makes for a triable issue. Just thinking out loud. Who knows, it may even make it to appellate level, or maybe not.

Thanks!

Do you have a link to the roundtable discussion? One of my letters of complaint, I think it was to the Comptroller was about CA's intentionally floating unreasonable offers to settle debts in order to push the debt into the court system so the attorneys can get their fees and bloating the debts so that they could then get judgments that could be sold for a higher amount than the individual debts were worth.

anyways the filings can be found on the SEC site, and some by google, try searching for things like Chase Master Trust etc. that is how I found things,

[BrunoTheJDBkiller]

Judges sometimes allow things that they have never seen used just to play it safe. It's still up to you to prove the validity of the defense, and securitization has none. It has been tried but has never succeeded, because it has nothing to do with the underlying theme of the case, which is whether or not the defendant defaulted on a credit card obligation. Trusts and securitization have nothing to do with that, they are simply methods by which creditors can raise money. It's like selling stock, and the interest paid in by the cardholders pays the dividends. When the account goes into default it is removed from the trust.

[antiquedave]

Judges sometimes allow things that they have never seen used just to play it safe. It's still up to you to prove the validity of the defense, and securitization has none. It has been tried but has never succeeded, because it has nothing to do with the underlying theme of the case, which is whether or not the defendant defaulted on a credit card obligation. Trusts and securitization have nothing to do with that, they are simply methods by which creditors can raise money. It's like selling stock, and the interest paid in by the cardholders pays the dividends. When the account goes into default it is removed from the trust.

Depends on how you define success, if the opposing counsel throws their hands in the air and decides you're too crazy to deal with and cuts you loose I define that as success.

That being said it is a risky proposition especially if the Judge doesn't buy in

[BrunoTheJDBkiller]

Right, I would not try this in court as a rule because you never know.....the judge might just look at you and ask you for your case law. Sorry, another Quigley Down Under moment there.

[rte]

Thanks, I found something for my OC's master trust. Now I have to figure out what this is all about.

Here's the link for the FTC roundtable discussions.

Protecting Consumers in Debt Collection Litigation and Arbitration: A Roundtable Discussion

[BV80]

Antiquedave,

How did you dig up information on SEC filings and the like? Is that simple enough to do, or do you need special access? I probably don't have the smarts to investigate, but I did come across a roundtable discussion sponsored by the FTC in which lawyers and court representatives talked about securitizing judgments. Apparently a judgment has a higher sale value.

Could you share with us how you dug up the info? This sort of thing may not fly in court but for an MSJ, it may raise some kind of doubt that makes for a triable issue. Just thinking out loud. Who knows, it may even make it to appellate level, or maybe not.

Thanks!

Go to the SEC website and search the filings. Just enter the name of the company. Most of the time, you're looking for a prospectus or an 8K or 10K filing.

For instance, I have a recent filing from Asset Acceptance that states they use predictive dialers in their collection attempts.

[My~Cuz~n~Vinny~]

Bruno the judge might just look at you and ask you for your case law.

What about lack of standing? It s directly related to the Claim of action.

Your honor, in the interest of expediency if the plaintiff cannot provide documentation of ownership, then all alleged claims will be a moot point. Providing the prospectus will allow the court,as well the defendant ,to ascertain ownership when this instant action was brought forth.As the defendant has denied any indebtedness ,without objection from the plaintiff, lack of standing is well warranted in this case.

If they do produce the prospectus the eligibility criteria must also be met.One of those criteria is....a cardholder payment obligation that is legally enforceable against the cardholder in accordance with the terms of the agreement. So how can they use an account that has no binding agreement by dint of contract term and conditions applicable to that account? A generic agreement would not fulfill the requirement to be securitized. They are waking a thin tight rope.

Edited November 27, 2012 by My~Cuz~n~Vinny~

[rte]

There's nothing in the SEC website for Target National Bank, but I've googled master trust and found a few items. Still need to study these cuz I don't understand a thing.

[My~Cuz~n~Vinny~]

There's nothing in the SEC website for Target National Bank, but I've googled master trust and found a few items. Still need to study these cuz I don't understand a thing.

http://mydebtrelease.com/wp-content/uploads/2012/06/CC-Securitization-Manual.pdf

Here is Cilly Banks......CITIBANK CREDIT CARD MASTER TRUST I (Form: S-3/A, Received: 08/28/2012 12:53:37)

Found some good ifo on edgar online too. FreeEDGAR: Free Real-Time SEC EDGAR Filings

Edited November 27, 2012 by My~Cuz~n~Vinny~

[rte]

Thanks, Vinny. Very interesting.

[Seadragon]

improper accounting practices. The argument will piss the court off because he is more inclined to deal with plaintiffs who file suit not theoretical plaintiffs.

I think you are chasing the dragon on the securitization as it is going down in flames repeatedly in courts all around the USA.

what would be better is show any SEC actions taken or anyother regulatory actions against plaintiffs

To me the securitization is like telling the court"the opposing attorney wore one brown sock and one black one to court." They want to hear how the case dosn't add up for evidence reasons not a reason they don't care about.

I think truthfully the only good thing for securitization would be if you had a bad judge and found out he has substantial shares of the trust. Then you could recuse him. Other than that it doesn't stop those ddeclarations and alleged evidence

[BrunoTheJDBkiller]

What about lack of standing? It s directly related to the Claim of action.

You're ignoring the main point I gave you. Once an account goes into default, it is removed from the trust and reverts to the OC, who then sues you. The trust is out of the picture at that point and is even more irrelevant than it was when the account was current.

[My~Cuz~n~Vinny~]

What about lack of standing? It s directly related to the Claim of action.

You're ignoring the main point I gave you. Once an account goes into default, it is removed from the trust and reverts to the OC, who then sues you. The trust is out of the picture at that point and is even more irrelevant than it was when the account was current.

Once an account goes into default, it is (supposed to be) removed from the trust and reverts to the OC, who then sues you.....

That is where big banks get in trouble. NextCard went defunct because they could not repurchase the early amortization events due to the master trust obligor. Like Citibank does with Deutsche Bank. As recent as Oct.2012 big banks now must hold up to 10% of their capitol to ensure against default on risky trades such as the debacle of 2008 bail out. In essence the big bank is and was lending it's credit,not its cash.Off book accounting is illegal.So is selling estimated credit card receivables if they don't repurchase the loan from the master trust. Add the prospect of a 3 month maturity of the revolving credit card pool and the result grows exponentially . All is needed is to show the receivable was sold as a collateralized debt obligation. That is enough to open the proposition that they lack standing in the instant action. Which trumps their Claim.

Edited November 27, 2012 by My~Cuz~n~Vinny~