From http://www.foreclosureblues.wordpress.com

Editor’s Note: I think we posted the referenced case when it came out, but this article from foreclosure blues does point out some things that I had not emphasized. They are right that a primary point to remember is that where there is a conflict between what the would-be forecloser SAYS and what they submit as EXHIBITS, the Exhibits control for purposes of motion hearings. Of course neither the pleading nor the exhibits are evidence until there is an evidential hearing, the exhibits are offered into evidence after a competent witness establishes authenticity, personal knowledge, business records, foundation etc.and the Judge accepts them into evidence. Of course you can change all that by just sitting back and saying nothing while they keep offering exhibits into evidence without any objections from you.

Editor’s Note….This decision is directly on point and this strategy has the potential to sway the entire foreclosure pendulum in favor of the homeowner, in order to obtain the leverage needed to force a truly viable financial solution.

A Florida Circuit Court Judge has issued a 5-page written opinion dismissing a foreclosure filed by Aurora Loan Services, LLC finding that the Plaintiff (Aurora) lacked standing at the inception of the case and that the MERS assignment was invalid.

The court cited several Florida cases and the Bellistri v. Ocwen case from Missouri as to the necessity of standing being established and that it cannot be waived. Aurora claimed to have standing by an alleged “equitable transfer” of the note, possession of the original note, and the MERS assignment. The court stated very bluntly “These arguments are without merit”.

As to the “equitable transfer” argument, the court found that there was no indication in the assignment that the note and mortgage were physically transferred to Aurora, and could not have been in view of the second count of the Complaint to “enforce a lost note”. The “physical possession” argument was vitiated by the fact that the exhibits attached to the Complaint, including the Note and Mortgage, were executed in favor of an entity other than Aurora (which we all know is nothing more than a servicer which was the servicer for the now-bankrupt Lehman Brothers), and that when there is a conflict between what the Complaint alleges and what the exhibits show, the exhibits control. The court also found that none of the documents attached to the Complaint identified Aurora as the “holder”.

The Court went on to show why the MERS assignment was a legal nullity, citing the LaSalle Bank v. Lamy case from New York, the MERS v. Nebraska Department of Finance case, the Arkansas and Kansas Supreme Court cases on the lack of authority of MERS, the Saxon v. Hillery case from California, and the In Re Vargas case from the California Bankruptcy Court to demonstrate that MERS’ capacity is limited and that MERS had no authority to execute the assignment. The Court held the assignment to be invalid.

The Court finally noted that the lack of standing at the inception of the case is not a defect that may be cured by the acquisition of standing after the case is filed, citing a Florida appeals case from the same appellate court which issued the BAC Funding case on standing (which we previously discussed on this website).

The Court dismissed the foreclosure and reserved jurisdiction to address the borrower’s request for attorneys’ fees.

The importance of this April 28, 2010 opinion is severalfold: first, it shows that trial court Judges are willing to accept the law on MERS from other jurisdictions. Second, it shows that trial court Judges are going to hold foreclosing parties to their legal obligations of proving standing by competent evidence. Third, it shows that courts will dismiss legally infirm foreclosure cases and entertain borrower requests for attorneys’ fees in having to defend a legally infirm foreclosure.

19 Responses

  1. Hi Neil and thanks for all the good articles and comments as per the Securitization issues. I have learned a lot from your workshop.

    My thoughts that I would like to throw out are pertaining to the Modification of a Securitized Note.

    How do these Servicers think they can pull out a single Note from a Securitized Trust, change the terms and amounts on the Note and then insert the Note back into the Trust without the knowledge or consent of the Investors? How does that not change the Prospective with out the knowledge or consent of the SEC or the IRS?

    Forensic Mortgage Audits and Foreclosure Defense

  2. Where can I find a copy of this opinion. Looked everywhere but to no avail. Plz help.

  3. Edgetraderplus, you are awesome and have a fine legal mind


  5. The judge refused to review the evidence in our case. He also did not use the depositions or interrogatories. The bank could not prove anything. We were not in arrears when they sold our home. They also did not follow the rules of chapter 244 section 14. We paid over 150,000 in payments and zero was applied to our principal. Our home was inhabitable due to mold and the bank employee stated that our home was in such great condition it increased in value. It is bulls–t was is going on today and the courts are allowing it.

  6. Let me quickly add that there are two opponents in most all foreclosure cases: the plaintiff and the judge.
    Never assume a defendant will receive impartiality from the judge. Most often, not.

    For example, in denying one’s signature on the copy of the note presented, it is not beyond a judge to imporperly intervene and ask, “Well, you did sign the note, didn’t you?” If one responds “yes,” game over for that tactic.

    Never, never admit anything. Admit NOTHING! The burden of proof is on the one making the claim. DO NOT DO THEIR JOB FOR THEM! Deny the signature and make them produce the original. The defendant is
    ENTITLED to see it. Of course, one can waive that argument

    In fact, in the above situation, I would either ask the judge if he/she were acting as an advocate for the plaintiff, or make an objection, citing judicial bias as the reason.

    Also, everyone should know this: When making an objection, there are formal rules for them, as well. Once an objection is made, there must be a reason given for the objection, and there are only about 8 or 9 reasons to cite. If no reason is given, the objection can be overlooked, and an appeals court will not review it.

    Keep in mind, as well, when in court, one is there to defend themselves, yes, but another important purpose is to be establishing the record for appeals.

    How does one establish a record for appeals? By making formal objections that can and will be reviewed for judical error or abuse of discretion.

    It is a battle, and a stacked one.

  7. Sunday 4 July 2010


    An evidentiary hearing is much as the words imply. It is when both sides have an opportunity to present whatever evidence they intend, and this is important for many here, subject to applicable rules of evidence and procedure.

    It is where one can challenge, [which should have already occurred, as when plaintiff presents a copy of a note, and a copy is hearsay] any evidence based on the rules. One of the rules is that hearsay evidence cannot be admitted IF CHALLENGED. If the evidence submitted is not challenged, the opportunity for challenge is waived and the evidence is accepted as true, even though it may not be.

    Rights once waived are waived forever. Keep in mind, one can challenge evidence without an evidentiary hearing. As alluded above, when a plaintiff files its complaint to foreclose, the defendant has 30 days to respond. In that response, the defendant can deny that the copy of the note is acceptable and demand the original. Deny that the signature on the copy is the defendant’s signature because the defendant DID NOT SIGN a copy. The orignal note must be demanded in order to verify the veracity of the signature.

    Deny that the plaintiff is the original creditor and demand to see the bookkeeping entries that prove the alleged loan was listed as an asset on the plaintiff’s books.

    Deny that the assignment is proper and demand to see the entire chain of commend from the original lender to successive parties.

    Deny, deny, deny everything. Challenge everything. This is where one makes life difficult for the plaintiff and forces same to “fess up, or shut up. This is the strongest opportunity to shut the procedure down. Most miss it, entirely.


  8. Would someone be kind to explain to me What is evidential hearing ? Thanks

  9. This isn’t always true if you have a corrupt Judge which happened in our case. We provided proof of everything and had a witness a credit counselor who tried to deal with the bank when they refused our payment without being in arrears and had never sent our closing papers until 3/17/08 from 9/25/03 and they foreclosed on 3/11/08. It cost $40,000 and a corrupt Judge it is a disgrace.

  10. Friday 2 July 2010

    Of course, I should have qualified that I refer to experience in Illinois, where in Cook County, courts are v lender friendly. Assignments are allowed even after the commencement of a case, as mentioned, to effect a substitute of parties. I know that first hand.

    Milage may vary elsewhere…

  11. edgetraderplus

    Simply meant that most courts do not accept assignments effectuated after foreclosure action has started.

    This is one thing the courts tend to do right. Of course, it is not enough.

  12. Thursday 1 July 2010


    Not to step on the excellent comment by anonymous, but an assignment can be made, let me qualify it and say “during” foreclosure, as in a substitution of parties.

    It is not clear what anonymous meant by “after” foreclosure, or, as often happens, I misunderstand the statement.

    Assignments are made all the time. What is the most important point for you is, if you are facing a foreclosure complaint, demand a chain of title from the original creditor to whatever entity is acting as plaintiff.

    Trespass Unwanted makes an excellent point in stating that the mortgage language clearly states that only the Lender can foreclose, and only the Lender can send notices. Read your mortgage document. There are usually two sections in the mortgage, often around paragraph 9 and again around paragraph 18. You will see the references as you read, to make sure you have the right section. You can make a very pusuasive challenge using this. Standing goes to jurisdiction, and without jurisdiction, the court cannot hear the case.

    Always, always remember: the burden of proof is on the plaintiff. Deny the plaintiff has a proper chain of title to give it standing as a party in interest. Deny every aspect of the complaint, an easy tactic to take.


  13. Used car guy. I hope he’s available tomorrow. 10 months and I NEVER got a plan of action I gave 10k. What the f I’d going on

  14. fighting foreclosure

    leave a reply box @ the bottom of the page “copy & past the body of text ” or upload a pdf file elsewhere online [your chose of host] & post a link here.

  15. can someone tell me how can I post an important case on this site?

  16. Zinger

    No one will probably answer you because your questions are discussed here many times.

    What is the law and what actually happens in a court room are two different things.

    To answer your question, and I am not a lawyer, I do not believe that a holder means they can just foreclosure – there are many issues and states approach this differently. Unfortunately, without proper challenge, many courts will just grant the holder the foreclosure.

    There is no consensus in courts. The case law for foreclosure is not cohesive and is largely subject to interpretation by the luck of the draw – that is, the opinion of the judge you get.

    Some states just routinely grant the holder the foreclosure. Other states demand chain of title and further proof of right to foreclosure. Bankruptcy courts are stricter in requiring identification of the actual creditor (not just a holder) than state/federal courts in foreclosure actions – but that is if you hire a bankruptcy lawyer that is willing to litigate..

    Most courts have held that assignments CANNOT be made after foreclosure action – but as to default – is another question. How long is the default? when was the foreclosure action filed?

    In all cases, you must present a valid challenge to the foreclosure action. You must present reasonable question as to the party that is demanding foreclosure and the current whereabouts of loan. You must be able to demonstrate to the judge that the foreclosure action is bogus and fraudulent . Many approaches are discussed on this blog. All are good – but none can be guaranteed.

    Start with researching your own current creditor. This is not easy.
    You are new. Best to get a lawyer that understands what is going on. Perhaps this blog can help you find an attorney in your area. Maybe bankruptcy should be done in conjunction with any legal action against foreclosure.

    Issues are complicated – and, honestly, many courts just do not know what they are doing.

    Good luck. Just wanted to respond to you – in case no one else did.

    I am not an attorney and this is not meant to be construed as legal advise and only for educational purposes.

  17. I called my lawyers’ office today. Asked his secretary if he’s in the office tomorrow, I’m dropping off some stuff.

    “No, Mr. P__ will not be in tommorow, he’s appealing a foreclosure…”

    I replied “GREAT! That’s what I want to hear! See you tomorrow!”

  18. Can you clarify… if they are the holder does that mean they can foreclose???? and is this indicatibng that servicers cannot foreclose? I also would like to know if an assignment can be made AFTER default?

  19. according to collier county clerk of courts website search, this case was refiled 6/22/10 and a hearing is scheduled for 7./9/10. Their website is difficult, it doesn’t show any links to get court documents.

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