THE HONORABLE PAUL B.

SNYDER
CHAPTER 13
HEARING DATE:
HEARING TIME:
LOCATION: Tacoma, Washington
RESPONSE DATE:

IN THE UNITED STATES BANKRUPTCY COURT FOR

THE WESTERN DISTRICT OF WASHINGTON AT TACOMA

In Re: )
) CASE NO. 10-44491
)
W. MARK FRAZER ) DEBTOR'S MOTION TO CONVERT
KONILYNN FRAZER ) PETITION TO CHAPTER 7
)
Debtors )
_______________________ ) DECEMBER 31, 2010

The Debtors in the above-captioned Chapter 13 Petition hereby respectfully

Motion the Court, pursuant to the provisions of the United States Bankruptcy Code Title

11 §1307(a) , to convert the Petition from Chapter 13 of the Code to Chapter 7, on the

basis that, after the commencement of this Petition for Relief, further facts have come to

light which lend credence and foundation to the proposition that there is no identified

proper creditor with a money claim on the real property of the Debtor. Debtor represents

that the substance of a Chapter 13 Petition as respects secured lenders is the payments

of arrearages on a Note over time so as to restore the Note to current lending status.

Absent a credible claimant, payments cannot flow to a proper party, and such status

cannot result.

As this bizarre state of affairs has evolved in a convoluted manner, some

explanation to the Court as to the sequence of events that actually transpired is

appropriate. Thus, in further support of their Motion, the Debtors would represent as

follows:

1
A. THE CONTROVERSY OVER THE NOTE.

1. Original Loan Negotiations.

In March of 2006, the Debtors herein, husband and wife, sought to re-finance

existing Notes and Mortgages on their real property located at 10404 - 45th St.Ct.E.,

Edgewood, Washington 98372. To this end, the Debtor Mark Frazer pursued

negotiations with the entity "Home 123 Corporation," which represented itself as a

California Corporation with its principal place of business at 3351 Michelson Drive, Suite

400, Irvine, CA 92612 [hereinafter: "Home 123"]. Within these negotiations, "Home

123" represented that it was the "lender" and would lend of its own capital to fund the

proposed loan. After receipt and exchange of confidential information, "Home 123"

proposed a transaction with itself as lender and the husband debtor Mark Frazer as the

borrower.

Unknown to Debtor Mark Frazer, "Home 123" was in reality a brokerage entity

set up by the entity "New Century Mortgage Corp.," itself part of the entity "New Century

Financial Corp." together with other New Century-branded entities. "New Century

Mortgage" maintained a principal place of business at P.O. Box 11052, Orange CA

92856; the street address was not disclosed to the public, as "New Century Mortgage"

conducted its business through its front brokers masquerading as lending entities,

including "Home 123."

Unknown to Debtor Mark Frazer, "New Century Mortgage" in turn reviewed the

origination proposals generated by "Home 123" with the undisclosed entity "Hansen

Quality," itself part of the "Fidelity National Financial Company" group. "Hanson Quality"

did reviews of originations as respects to credit quality; with respect to the Debtors,

"Hanson" developed a "Fidelity HQ Score" of 525 and classified the proposed

transaction as "High Risk (1.0)" as of March 21, 2006 [BATES Number FRAZ 000030,

2
REF. Debtors' Exhibit "1"]. Such "High risk" loans could not be sold into securitized

pools by the counter-party traders to New Century's buyers; nonetheless, three days

later, the loan was closed through "Home 123."

The "Hansen Quality" analysis, bearing their internal number "HQ 12238561," is

attached hereto as Debtors' Exhibit "1" . On Page 1 of 1 of the "Home 123" proposal

on the Frazer Loan is emblazoned in large letters: "NOT APPROVED." 1 The page

bears BATES Number FRAZ 000036.

After further internal discussions between personnel of "Home 123" and "New

Century Mortgage," to which the Debtors were not apprised or privileged, the "Not

Approved" loan became "Approved" on March 22, 2006 [BATES Number FRAZ 000035].

The "Approval" also contains the admission that "Home 123" would obtain a fee of

$15,519.20; this demonstrates that, at all times and undisclosed to the Debtors, the

entity "Home 123" was but an origination-fee broker of mortgage loans, and had none of

its own monies at risk.

2. The "Note" does not describe the transaction.

On or about 24 March 2006 the Debtor Mark Frazer was presented with the

final loan proposal wherein the Debtor would receive a "new loan" of $484,000 at an

"interest rate of 6.500%". In consonance with this proposal, "Home 123" by

representative met with Frazer, proposed a new loan at 6.5% interest, and submitted a

certain "Note" to which only the Debtor Mark Frazer was the Obligor thereon.

A copy of the "Note" is previously before this Court as Document 66-1, entered

12/22/10. The Exhibit [66-1] states thereon that the "Lender is Home 123 Corporation"

1
THE "Home 123" document is labelled as "NCMC Loan Approval APPRVL01 (031606)," and
now bears loan origination number 1007123819, the number ultimately assigned to the Frazer
loan.

3
[see at para. 1 therein]. The "Note" instructed the Debtor to make his payments at the

Ivrive, California address of "Home 123." Based on these representations, the Debtor

Mark Frazer signed the proffered "Note."

The "Home 123" representations were untruthful. In fact, "Home 123" was never

the Lender as so described as "home 123" never had any of its own monies at risk.

Debtor has ascertained that the funds flowed from what is termed in the trade as a

"warehouse lender," which herein was the entity "Salomon Bros.," an investment-

banking firm in New York City that dealt with securitized re-sales of bundled mortgage

notes. See Debtors' Exhibit "2". 2

Unknown to Debtor, the transaction was never with the entity he thought he was

doing business with; the transaction was actually with Salomon Bros.

Consequently, the "Note" neither describes the Obligation nor the transaction.

3. The signing brokerage was unlicensed.

As a term of art, the Frazer transaction was a "table-funded loan," where the

identity of the lender was never disclosed to the borrower and the fictitious lender was

merely a fee-origination brokerage. "Table-funded loans" are viewed as predatory loan

transactions by the Office of the Controller of the Currency. The further problem that

presents itself is the belated discovery that the entity "Home 123" was never licensed as

a loan brokerage within the State of Washington. The owning entity, "New Century

Mortgage Corporation," at the time was licensed as a residential mortgage lender, until

the State of California revoked the business permit to transact such business on 04

2
The Exhibit flows from responses to Request for Discovery, In re New Century TRS Holdings
Inc., Docket No. 07-1`041260-KJC [U.S.Bankr.Ct., Distr. Del.], "Sixth Amended and Restated
Mortgage Loan Purchase and Warranties Agreement", BATES No. FRAZ 000225.

4
October 2007, effectively shutting down New Century.3 New Century then entered into

liquidation proceedings before the Delaware Bankruptcy Court.

The Debtors conclude that "Home 123" was thus deliberately falsely described

within the "Note" document as the "lender" as it had no permit as a brokerage, and

sought to conceal this from the Debtors. Debtors further conclude that the "note"

document did not reveal that the transaction was a table-funded loan, with Salomon

Bros. As the source of funds, so as to circumvent having the loan classified as a

"predatory loan transaction" under O.C.C. Rules. In so doing, the participants

perpetrated a deceit upon the Debtors.

4. The loan transaction was deliberately designed to fail.

It now becomes clear that the true purpose of the transaction was to sell to the

unwary borrowers a product that was deliberately designed to fail. While astonishing

and at first glance counter-intuitive, a further examination of the roles of the players in

the transactions demonstrates how this comes to pass.

Although the loan product was represented as a "6.5% loan," in fact it was

anything but. Buried within the small print of the "Note" is a descriptive of events that

were designed to dramatically boost the interest rate after April 2008, two years after

conclusion of the described "transaction." Therein, the re-set rate is described as

"adding six and fifty-five hundredth(s) percentage points to the Current Index." [See:

"Note" at Sec. 4(c). This gobbledygook is then further amplified by the addendum: "the

Note Holder will then round the result of this addition to the nearest one-eighth of one

percentage point." In order to do this algebraic computation worthy of an advanced

3
The Order revoking the New Century Mortgage lender and servicer licenses is appended
hereto as Debtors' Exhibit "3"

5
degree in accounting, the reviewer must first reference back to Sec. 4(b) titled "The

Index" and understand that the "Index" is to be predicated upon "the average of the

interbank offered rates for six month U.S. Dollar-denominated deposits in the London
4
market, as published in the Wall Street Journal." Aside from observing the obvious,

that the Debtor, a journeyman in Washington State, hardly can be expected to read the

Wall Street Journal published three thousand miles away, the idea that the Debtor is

going to understand anything about "interbank offered rates on the London market" is

preposterous.

The reality is that the "Note" proffered to the Debtor Frazer for his signature was

intended to morph into a compounded Note with a coupon of 11.621% [Index Rate of

5.071% plus Margin Rate of 6.550%]. With such a huge coupon, the broker "Home

123," its alter-ego "New Century Mortgage," and the warehouse lender Salomon Bros.

could re-vend the "Note" into yet another pool, for a further premium.

Flowing from Discovery in the DE bankruptcy proceedings of New Century, the

Trustee of New Century TRS Holdings Inc. produced the documents in Debtors'

Exhibit "4", Bates Documents FRAZ 000319, 000323, and 000329. "323" clarifies that

the warehouse lender, the actual entity that had placed funds at risk, was "Salomon

Bros." "329" clarifies that the actual "Index Rate" was 5.071%, even though the "loan

to value" or "ltv" was at 83.44827586 [an internal number not disclosed to the Debtors],

4
The descriptive of the "current index" is further complicated by the incorporated proviso that the
index will be "the most recent Index figure available as of the first business day of the month
immediately preceding the month in which the change date occurs." The Debtor as prospective
borrower thus has the onerous burden of determining what month the "change date" is in, then
going back through the Journal printing of the interbank offered rates in the previous month, then
determining what the "first business day" of that month was, and then using that as the Index to
be carried forward to the Calculation paragraph, to add onto the hundredths percentage points
described there. Piece of cake for any stone-mason, to be sure.

6
which placed the proposed loan outside of the 80% "ltv" limit and per-se made it a sub-

prime, or high-risk loan that could not be included in the proposed tranche sales.

BATES "319" clarifies that the purpose of the manipulations was the generation

of an additional premium of $10,830.89 in the forward sale of the holographic image of

the "Note" to yet undetermined third parties, the next [and unrevealed] step in the chain

of claims against the image of the "Note." It is not the real Note as there is no real Note;

the imaged "Note" does not even describe the original lending transaction, which

remains between yet other parties, undisclosed to the Debtor and to this Court.

The two identifiable mark-ups, $15,519.20 taken by "Home 123" and the

$10,830.89 taken by "New Century Mortgage," for a staggering total of $ 26,350.09; this

astonishing sum was skimmed "off the top" by the "New Century" entities in their

undisclosed brokerage [which was also unlicensed]. These are "fee-origination"

brokerage transactions intended solely to inure to the windfall gains of the brokers, the

New Century entities, violative of their duties and obligations to the Debtor-borrower

(obligations of utmost duty of care to client) and designed for self-enrichment.

The brokers never disclosed, and did not recite in their "Note," that the true

lender was not represented or disclosed to the borrower.

Once the holographic-imaged "Note" was sold forward, which the manufacturers

did on 31 May 2006, and the fees collected, the brokers intended to wait until the "loan"

went to the hidden re-set, when the payments would escalate to an anticipated

11.621%. At that point, the Debtors' payments under the original scheme would "re-set"

or jump to $ 4,837.74, resulting (were the Debtors actually able to pay it for the

remaining 28 years) a cash flow of at least $ 1,257,587.87 in "interest." While as a

practical matter the "re-set" would be unpayable, noting further that taxes, maintenance,

utilities and insurances would be additional to the yearly cash burden of $ 58,043 paid to

7
the "forward buyers," this was the intent of the Brokers. The reason is transparent: at

that point [April 2008], the Debtors would be caught in a cash squeeze, and would be

forced to yet once again "re-finance," thus providing two new benefits: a further source

of an extra $ 26,350 or more to the New Century / Home 123 interests, and further

tranche-sale profits from new product to be forward-sold by the Salomon Bros. interests.

In sum, the loan product co-brokered by "Home 123" was specifically designed

and intended to fail; it was designed to convert the borrower(s) into Perpetual Debtors,

who would be forced to continue to come back to "Home 123 / New Century" every two

years for a re-finance, and each time generating another $26,350 or more in fee income

to the New Century machine.

In the "Perpetual Debt" cycle, the homeowners would in economic substance be

obliged to surrender an extra $1,099 each month, in perpetuity, to "New Century" as a

"vigorish" payment, or hush-money fee, for the privilege of having continual refinancings

on their "sub-prime," or otherwise unsaleable, "loan." The loan product was designed

that this cycle could never stop; when it did, either the Debtors would have won the

Lottery, received an Inheritance, or be foreclosed on by the forward-buyers. And as long

as home prices continued to artificially inflate to provide inflated appraisal values, the

loan cycle would remain in the maw of the New Century fee-generating machine.

An Instrument designed to create "perpetual debt" within the economic realities

understood by the presumptive lender is not enforceable in either this or any Court of

Equity, as such an Instrument is inherently unconscionable, and the fruits of such a

scheme of penury are not, in equity, to lie with the perpetrator thereof.

8
B. THE CONTROVERSY OVER THE NOTE INDORSEMENT.

Notwithstanding that the "Note" document was not a descriptor of the transaction,

and was manufactured by an entity that was not licensed as a loan broker, nonetheless

the fee broker "Home 123" proffered same for forward-sales to unidentified third-party

investors. This "Note," which does not represent the table-funded loan, was in turn at

some point subjected to two ink-pad rubber stampings. The "stampings" are intended to

describe a transfer of the Note to un-named parties, as purported "Indorsements." The

attempt at Indorsement fails.

The first "stamping" states baldly: "Pay to the order of, without recourse

____________, Home 123 Consc [obliterated]_________ BY ___________"

Superimposed upon this partial stamping is a second stamping, that seems to

suggest: "Steve Nagy [presumed copy of signature]

Name: Steve Nagy

-Title: V.P. Records Management "

Taken together and in concert, the suggestion seemingly put forward is that

these two rubber stampings, cumulatively, would serve as an Indorsement "in blank"

pursuant to the provisions of the Uniform Commercial Code ["UCC"]. The attempt fails.

There is no evidence to suggest that the "stampings" were placed simultaneously

upon the "Note." There is no evidence to suggest that "Steve Nagy," whatever his

employment status of "Home 123," which has never been established, placed the stamp

by his own hand. Indeed, even the most cursory of examinations of litigation files

wherein "Home 123" was engaged suggests that the "Steve Nagy" stamp was placed

upon thousands of such documents. Were the two stamps to be placed by a hand other

than that of "Steve Nagy," as seems to be the more likely case, then the document

9
Indorsement is not "perfected," and the document cannot be enforced by the final

possessor of the Instrument.

The "Steve Nagy" stamps are further troubling in that on or about 04 October

2007 the license of the New Century entities to transact any business in the loan arena

was revoked by the California Corporations Commissioner (File No. 413-0120)[Exh. 4].

Equally troubling, the "New Century" group of entities filed for bankruptcy on April 02,

2007. There is no evidence to suggest that this "Note" document was stamped, by

whomever, prior to April 2, 2007. Indeed, all suggestions are that it was stamped after

the commencement of the New Century bankruptcy petition. Pursuant to the principles

set forth in New Century Mortgage Corp., et al. V. Braxton, Land Court, Mass., 09-

393485 (Jan. 11, 2010), "[P]laintiffs must overcome a scattered and incomplete

record… . Essentially the plaintiff's must show …that the transfers took place either

before the bankruptcy, or with leave of the bankruptcy court or liquidating trustee. The

plaintiffs bear the burden of proving their standing, and their factual allegations are not

viewed in an indulgent light." [See: Debtors' Exhibit "at 5, Id.].

The same requirements apply to the purported "assignments" of the "Deed of

Trust," which follows. The Braxton case above is particularly on point as it addresses

squarely the situation of "New Century" in its various Assignments could not and did not

demonstrate any evidence of approval within the context of the bankruptcy proceedings

into which "New Century" had placed itself. Accordingly, the Braxton court ruled in favor

of the Defendant Homeowners and granted Summary Judgment against "New Century."

Within California, the mere presentation of such an Instrument bearing an

uncertain claimed Indorsement by stamping does not grant validity to the stamped

Indorsement, to inure to the benefit of the Presenter. Pursuant to RCW 62.A of the

California Adoption of the Uniform Commercial Code, the burden of establishing the

10
validity of the presumed Indorsement falls squarely on the Presenter. It remains

troubling that no such independent supporting evidence has been proffered, yet claimed

successors to the "Note Indorsement" would have its validity inure to their benefit.

At this point, the "Note" by facial Indorsement remain unperfected, and the

property of "Home 123." Yet "Home 123" is before the Delaware Bankruptcy Court,

wherein neither the Trustee nor the Court has authorized any transfer of assets to other

than the Liquidating Trustee. This astonishing conflict creates a cloud over whom to

pay, if indeed the "Note" can be found to be descriptive of the Obligation, which seems

not to be the case.

C. TROUBLING PROBLEMS WITH THE DEED OF TRUST

A. Debtor Konilynn Frazer received no Consideration.

In reviewing the making of the "Deed of Trust" that was constructed by "Home

123" in conjunction with "Ticor Title," observation is made of the "notations" made on the

internal "Home 123" documents previously referenced as BATES FRAZ 000036 and

BATES 000037 [the "Not Approved" loan review documents], submitted as Debtors'

Exhibit 1. Therein, it appears that "Underwriter Jennifer Eppeney" determined that

"Spouse must sign: Mortgage…"[see at #9]. Consonant with this internal directive, at

some point the Deed of Trust [hereinafter, synonymously "DOT" or "Mortgage"] was

placed before the Debtor Konilynn Frazer and she was instructed to sign it.

The "Note" was conspicuously NOT signed by the Debtor Konilynn Frazer, and

no demand was made upon her to do so, as she was not contemplated to receive, and

did not factually receive, any Consideration in exchange for the "Note" or anything else;

indeed, the entire transaction and the fruits thereof are remarkably bereft of any

consideration to Debtor Konilynn Frazer. Ultimately, out of the transaction some funds,

11
to the extent of $14,793.25, were issued by check made payable only to Debtor Mark

Frazer.

Debtor Konilynn Frazer was neither a guarantor nor an accommodation endorser

of any Obligation, and she received no benefit from the transaction contemplated by the

facial parties "Mark" and "Home 123," admittedly not even the proper parties as the

transaction was in reality being orchestrated by "New Century" and "Salomon Bros."

What remains troubling about the presumptive creditor's claim is that, nonetheless, the

posturing creditor Deutsche Bank would strip Konilynn Frazer of her ownership rights

and possession of her undivided interest in her home to inure to the benefit of these

players, without Consideration.

The Document, constructed by "Home 123," is unconscionable in that it lists, on

page 14 of 15 thereof [the "signature page"], "Konilynn Frazer" as a "Borrower," when in

truth, known to "Home 123" at the time it manufactured the Document, Konilynn Frazer

was not a borrower, received no benefit from the transaction, was paid no Consideration

for her signature on the Instrument, and was a stranger to the transaction.

Equally, there is no evidence presented by the creditor that the Debtor Konilynn

Frazer was informed of the implications of the signature "Home 123" induced her to

place upon the security instrument. Taken together and in concert, the acts and

practices of "Home 123" as the generator of the Instrument are and were

unconscionable, rendering the Instrument unenforceable as to the Debtor Konilynn

Frazer.

BATES FRAZ 000036/37 make it clear that the addition of Konilynn Frazer as a

signer on the Security was a belated attempt to obtain further claims to collateral absent

consideration, without even the flimsy pretext of accommodation endorser to the "Note."

12
As such, the expansion of the security instrument to include Konilynn Frazer is

unconscionable and ripe for stripping from the Obligation.

B. The Mortgage document is defaced and altered by the Creditor.

A further troubling aspect of the proffered "Mortgage" of the Debtors' real

property is the defacement that is observable on the page 15 of 15 thereof, the notarial

undertaking.

Upon inspection, it is apparent that at some point in time the Document was

altered or defaced in that the original dating of the Notarial Undertaking was changed to

read "2006." The defacement is not initialed.

It is black-letter law that defacement or alteration of an Instrument renders the

Instrument unenforceable as against the adverse party. The circumstances of the

defacement remain unexplained and no proffer of proof has been made to this Court, to

the Debtors, the Trustee, or anybody else. It becomes entirely a matter of speculation

as to when this "notarization" was affixed or appended to the Instrument. Had it been

done concurrently, presumably were the alteration a scrivener's error, it would have

been initialed by the signer and the parties. There is none. One speculation is that it

was defaced later by an employee of "Home 123." An equally likely speculation is that

the entire notarization was manufactured in bulk in blank, and the names of the Parties

filled in by clerks in documents-processing rooms; a blank 05 or 04 "notarization" was

simply spliced onto the Instrument and the date made to conform to 06. No one knows

for sure.

The troubling change in the Document renders the Document non-transferable,

from which no Assignment to a further or subsequent Holder may flow. This raises

further questions as to the enforceability of this "property pledge" against the Debtors in

favor of the entity Deutsche Bank within the context of these proceedings.

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 D. TROUBLING PROBLEMS WITH THE PROOF OF CLAIM

Claim "4" filed in the instant Case [Claim #4, filed 07/09/10] reflects that

the creditor is "Deutsche Bank National Trust Company" [see: "Name of Creditor"].

Claim #4 further reflects that Notices should be sent to an address in South Carolina.

The Proof consists of two pages: B-10 Official Form, and a second page titled as

"Attachment to Proof of Claim." The "Attachment" would reflect a series of apparent

accountings. The foundation for such proposed "accountings" are not before the Court.

1. The Signer is not an employee of the Creditor.

The Proof of Claim #4 [hereinafter: "Proof"] contains but a loop (apparently

intended to suggest a signature) at the bottom. There is a further representation of: "/s/

Lily Porkalob " suggesting that the "loop" is the mark of Lily Porkalob [hereinafter:

"Porkalob"].

Presumptively, the Court would infer that Porkalob is an employee of the creditor.

Yet that is not the case. After some tracing, Porkalob has been determined to be

resident at 12115 SE 174th Lane #H101, Renton, Washington State 98058. See:

Debtors' Exhibit "6", published "résumé" of Lily M. Porkalob. The Renton WA address

is 2,274 miles from the Fort Mill, SC address recorded upon the Proof of Claim for the

creditor.

There is no substance to the representation that Porkalob "works for" the creditor

DBNT. Rather, the evidence uncovered by the Debtors would suggest that Porkalob is a

junior clerk within the Routh Crabtree Olsen foreclosure-law firm. Porkalob appears on a

number of singles web-sites including "Who's Hot in Renton" and is rated as a "7." Her

friends publish web comments regarding having drinks in bars in Renton. This active

social life is not representative of employment in South Carolina.

14
 What Porkalob, as clerk of Routh Crabtree, has done is take numbers that

someone else has calculated, and attached her "squiggle" or mark to the documents

(alternatively, yet some further unknown person put the squiggle mark or loop on the

papers and Porkalob never even saw the document, which is equally plausible. Clearly,

it is not a "signature," as required under the Proof of Claim). Nothing within the filed

Proof of Claim is on the personal knowledge of the person signing it. Insofar as there is

a claim of "money loaned" [see: "Basis for Claim," Item #2], the Proof of Porkalob would

have this Court infer that the Claim lies against both Debtors; yet as has been

established hereinabove, no funds or consideration flowed to the Debtor Konilynn

Frazer. Konilynn Frazer is not an Obligor on the transaction, nor on the "Note."

2. Supporting affidavits, not written by the Signors, are not made on

personal knowledge of the Signors.

Previously, attempts were made by the "DBNT" entity, through "affidavits"

manufactured in Washington State and shipped out for various signatures by persons

who did not generate the affidavit and had no knowledge of the truth of the statements

contained therein. These "affidavits" were then filed with this Court, and are subject of

parallel litigation.

Document # 54 before this Court, filed in a belated attempt to establish some

foundation for the Proof of Claim, in actuality was manufactured by Routh, Crabtree in

Washington and shipped over to Orange County [San Diego area], California, for

"signing." Although "Melissa Wilman" as Singor would represent that she is a "Vice

President," there is no recitation of that in the Notarial Undertaking and the claim is

unsupported. The entirety of the Wilman Affidavit is a series of conjectures of what

might have transpired, and is laced repeatedly with the disclaimer, "Upon Information

and Belief."

15
 "Belief" is not a proper foundation for an Affidavit. The Court is not interested in

Wilman's state of mind; the Court is interested only in the facts.

Wilman did not do the acts she describes in the Affidavit. Wilman makes the

statement, repeatedly, that "I caused…" [an act to be done]. Again, the Affidavit is

emphatically not on personal knowledge, and not on personal acts or acts she

personally saw and is competent to aver.

Wilman seeks to establish [or more trenchantly, Routh, Crabtree seeks to

manufacture a chain of title and convinced Wilman to sign off on it] that, by "belief"

alone, this Court should accept the proposition that "Home 123" "delivered" the "Note" to

"Morgan Stanley Mortgage capital," which in turn upon her "belief" then "sold" the item to

Morgan Stanley ABS Capital I Inc.;" which in turn by "belief" "conveyed" the item to

"Trust 2006-NC-4" on an "as of" date, whatever that is supposed to mean.

Yet this series of "beliefs" is not supported by the internal documents of "Home

123," revealed in the BATES sequence discovered in the Delaware bankruptcy

proceedings, as in BATES FRAZ 000033 the reference is to the client as "New Century

Mortgage Corp.," which does not appear anywhere at all within the Willman Affidavit.

Further, BATES FRAZ 000035 recites that a "Hazard Insurance Coverage" is to

be purchased with the "Lender Loss Payable to read: NEW CENTURY MORTGAGE

CORPORATION". No explanation is offered why a loss payee with no claim to the

rights to the subject property, as set forth by the Willman Affidavit, should surface within

the loan files maintained by Home 123 and New Century TRS Holdings Inc. in Delaware

Bankruptcy Court.

The Debtors additionally observe that, pursuant to the representations revealed

in BATES FRAZ 000323, the flow of funds was through the entity "Salomon Bros." It

remains undisputed that Salomon Bors. was at some point the conduit for the loan, of

16
which the "Note" is not the evidence of the Obligation. Yet once again Salomon Bros. is

absent from the custodial chain being averred "by information and belief" by Willman.

The Willman Affidavit has no credibility. It is not on personal knowledge, and it

flatly contradicts evidence developed with the Federal Bankruptcy Court system. It is

dubious that Willman is even a "Vice President" of DBNT; more likely, yet another fiction.

Coupled with the "Willman" Affidavit, the proposed creditor DBNT filed as

Document No. 56 on 10/19/2010, an affidavit apparently signed by "Barbara Campbell"

[hereinafter: "the Campbell Affidavit"]. Campbell claims that she "caused the physical

file" to be pulled from "storage." The inference, although not stated, is that the "physical

file" is maintained with her at Santa Ana, California. Campbell additionally avers that

the "records are kept in the course of regularly conducted business" and that "entries are

made at or near the time of the event recorded.." and so forth.

These averments are flatly contradicted by Deutsche bank National Trust's

["DBNT's"] own representations before the United States District COurt for the District of

Columbia, DBNT v. Federal Deposit Insurance Corporation, Docket 1:09-CV-1656-RMC

[hereinafter: "the FDIC litigation"]. In this major litigation, seeking billions of dollars in

damages, DBNT by counsel David Boies [of Bush v. Gore note] represents to the Court

that :

"While the Trustee generally takes possession of the mortgage and note,

the documents and information necessary to determine whether a particular

mortgage loan breaches the Representations and Warranties remain with the

Servicer. These documents include origination and underwriting files, servicing

records, borrower statements made during the origination of the loan, payment

histories, and borrower correspondence. "

DBNT v. FDIC, Deutsche Bank Nat'l trust Memorandum of Laws, 1/14/11

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 Based upon DBNT's own representations to the United States District Court in

the District of Columbia by Attorney David Boies, the "files" are kept by the Servicer as

a standard business practice of DBNT. This flatly contradicts the representations made

under Oath by Wilman that the "original documents relating to the subject loan" are kept

by DBNT. This flatly contradicts the representations made by Campbell that she has

personal knowledge "of entries in the records," "the associated business records," and

"their contents."

The Filing in DBNT v. FDIC is appended thereto as Debtors' Exhibit "6" . Based

on the glaring discrepancies between the DBNT representations made herein, and in the

"DBNT v. FDIC" docket, and the failure of a knowledgeable employee to sign the Proof

of Claim, the Debtors conclude that whoever might be the claimant on the Mark Frazer

Obligation, that person does not stand before the Court. the DBNT "Proof" is a

charade.

3. The Claim is likely paid in full by proceeds of insurance.

Another unsettling prospect in this tangled web is the distinct probability that the

actual loan obligation is extinguished by the proceeds of insurance, unknown to the

Debtors and to this Court. It appears to have been a routine business practice for the

New York players in the mortgage securitization schemes to purchase single-premium

credit insurance upon the product. An oblique reference is made to such insurance

within the Delaware disclosures. At BATES FRAZ 000265, an oblique reference is made

that the "Mortgagor", i.e. the Debtor, was not required to purchase a single-premium

credit insurance policy [see: at para. ( jjj ) therein]. The only possible rationale for such

a specific and oblique requirement to be incorporated within the "Sixth Amended and

Restated Mortgage Loan Purchase and Warranties Agreement," see at BATES FRAZ

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000225, is that the existence of such pre-purchased insurance would interfere with the

placement of equal insurance by the Purchaser or their further assigns, as was uniformly

done within the New York securitization industry.

In effect, the credit insurance policy [all of which issued policies were non-

recourse; thus the "note" or claims would not accrue back to the insurer] has already

discharged the claim of indebtedness now being advanced by DBNT. The presumptive

debt is already paid; it is just not paid by the Debtors herein. Nonetheless, this is a

Court of Equity, and under equitable principles the Claimant cannot be heard to "collect

twice" on the same claim.

CONCLUSION

The Debtors have demonstrated that serious and troubling questions remain as

to any outstanding claims of others upon the real property placed before this Court.

- The original loan was not with "Home 123" as the funds flowed from an

undisclosed third party, and the "Note" does not describe the Obligation.

- "Home 123" was in reality a brokerage operation generating large fees, and it

had no license in the State of Washington to be a loan broker.

- The loan transaction was with a table-funded warehouse lender, not disclosed

to the Debtors. The tracking of the actual Obligation is unknown, but not that which is

described by "DBNT."

- The loan transaction was deliberately designed to fail, in order to generate a

perpetual debt, and is against public policy; as such, it cannot be enforced.

- The interest rate could not be readily ascertained from the face of the

Instrument, rendering the Instrument unconscionable.

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 - What was forward-sold was not the Obligation, but a holographic-imaged

"Note" that did not describe the parties or the obligation, and was in effect sold from an

"empty paper bag" to others supported by credit-insurance policies.

- the Indorsement in two stamps is without foundation.

- Debtor Konilynn Frazer received no Consideration for her signature upon the

Deed of trust, which itself was defaced and altered subsequent to signing.

- The Proof of Claim is not signed by the Creditor, nor an employee of the

Creditor. It fails the requirements of Form B-10.

- The Affidavits insupport of the Proof of Claim are not on personal knowledge,

but on "belief." They have no credibility.

- DBNT never had possession of the original loan files, which they admit to

within other litigation before the Federal Courts as their customary business practice to

never take possession of those files.

- the actual Claim is likely paid for in full by the proceeds of credit insurance, on

a non-recourse basis.

Taken in its totality, no possible Chapter 13 Plan could ever succeed, as there is

no Creditor now or even likely to step forward to be a legitimate heir to the proceeds of

such Plan payments. The exercise would be one of futility.

WHEREFORE, the undersigned Debtors respectfully Motion this Court to Convert the

Petition to one of Chapter 7.

BY THE DEBTORS,

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