Briefs Submitted for Oral Argument in Arizona

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CV110091CQ Brief [Plaintiff Vasquez]

CV110091CQ Brief filed by Defendants

CERTIFIED QUESTIONS SUBMITTED FOR SUPREME COURT REVIEW

AMICUS BRIEFS REPORTEDLY BEING FILED BY ARIZONA AG AND OTHERS

A lot of buzz being generated about this time in  Arizona Supreme Court. The Court has scheduled oral argument in an auditorium and it will be broadcast, from what I understand on September live on September 22, 2011.

The big question of course is whether we will take a step forward or a step backward. The certified questions are straightforward and the greater weight of the law clearly supports Vasquez. If the banks lose this one, as they have on appellate review, they will once again be forced backward on 5 million foreclosures, many of which were in Arizona. My position is simple: if the law is applied and substance is more important than a procedure (non-judicial foreclosure) that in the current environment is questionable at best, then the Court will issue a ruling and opinion that will require Judges to make inquiry as to the truth of the matters asserted by the banks. If it is true, they can foreclose, If it is false they can’t. The fact that the decision could have large ramifications should not stop the court from doing the right thing.

As for the large ramifications, they run both ways. A decision for the banks will mean that title will be forever corrupted and uncertainty will be introduced into the marketplace that was never permitted or even contemplated. A decision for the borrowers will put the borrowers back into the driver’s seat to reclaim their home, damages for wrongful foreclosure and it will create a huge opportunity for community banks and credit unions to pick up the pieces of what is left of the megabanks when their balance sheets are revealed as nothing more than the emperor’s new clothes. A decision for banks will continue to stifle the economy that is already choking on foreclosures, unemployment and lack of capital or income to fuel economic growth. A decision for the borrowers will inject capital back into the economic equation and allow homeowners to recover with some money in or wealth in their pockets that can fueled the stimulus needed for the economy, employment and increased tax revenue for the states and federal government.

AS FOR THE FREE HOUSE STORY: It’s true. Someone is going to get a free house. Will it be the disinterested non-creditor banks who misbehaved and lied in the process of lending and documenting the alleged loans, and withheld accounting from third party payments made without subrogation? Or will it be the homeowner who has down payments, monthly payments, maintenance, taxes and insurance, as well as furnishings and home improvements in the home? Will there be a windfall? Yes. Either to the banks who don’t have anything to lose except an opportunity to get a free house or to the homeowner who had more left on his obligation than the value of his claims against the bank for wrongful foreclosure, predatory lending, fraudulent lending etc.

 

19 Responses

  1. […] SEE ALSO BRIEF SUBMITTED FOR ORAL ARGUMENT IN ARIZONA […]

  2. So if the Az supreme court hears these oral arguements how soon will they make their decision public and what will it mean in the long run.

  3. Carie, your huff post story link.

    “”He’s like, ‘Are you Ernie?’ He’s like, ‘I’m here to pick up the truck.’ I says, ‘Can this wait?’ He’s like, ‘It really can’t.’ He gets on the phone. He sees what’s happening.”

    Soto said the repo guy got on the phone with his superior and tried to explain what was going on to see if he could get out of the assignment, but the superior had no sympathy for Soto.”

    So this guy gets his car repo’d as well. I wonder if the repo guy had the pink slip? You know car loans are ABS securitized as well. Another scam in one story headline.

    Now, I’m a dog guy and it sucks he had to put his best friend to doggy heaven, as all dogs you to heaven.

    Unlike Banksters & Wall Street which should rot in hell.

  4. Wish I could tell this guy about livinglies…

    http://www.huffingtonpost.com/2011/07/15/homeowner-who-walked-away_n_899739.html

  5. I wonder if Irene Dorner (HSBC) showed up today in Judge Schack’s courtroom today?

    take a look here, folks. they’re talking about us……..
    A changing world: an overview of new trends in default litigation

    Baker Donelson Bearman Caldwell & Berkowitz PC
    Linda S. Finley
    USA
    July 14 2011

    2010-2011 has seen unprecedented litigation involving the default servicing process. Across the country the number of lawsuits is skyrocketing. The theories of these lawsuits are limited only by a borrower’s or plaintiff’s counsel’s imagination and ability to search the Internet to find the latest trend.

    Litigation Involving Robo-Signing— It’s a Brave Neu World

    By now, we all know the term “Robo-Signing,” which was ushered in with a south Florida case, GMAC Mortgage, LLC vs. Ann M. Neu. During deposition, the GMAC witness testified that she did not have personal knowledge of the information contained in an affidavit used in the foreclosure process.

    There was little or no rehabilitation of the witness during the deposition and ultimately, the court’s ruling against the lender was harsh. Numerous articles have been written using the term robo-signing but the bottom line is servicing departments and their foreclosure counsel must know how to properly execute affidavits which stand up to scrutiny.

    First and foremost the affiant (party executing the affidavit) should have an understanding about the document he/she is signing. Simply put, the purpose of an affidavit is to make a written statement under oath, just as if that person were testifying in court. A checklist to the affiant is:

    The affiant should have personal knowledge of the facts – AFFIDAVITS ARE EVIDENCE. To be admissible, testimony must be offered by a competent witness with personal knowledge of the facts.
    Documents and computer records are hearsay. The affiant and his/her counsel must know how to get such evidence into court properly. An exception to the hearsay objection is the use of such documents as business records. To get a business record into evidence through an affidavit, your attorney should treat the affidavit just as she would in taking oral testimony. That is, the affidavit should state that the documents reviewed by the affiant are records kept in the regular course of business (such as payment and transactions histories); that the affiant is familiar with these records; and that the affiant has reviewed the specific records. Only after laying this legal foundation does the affiant state what the records show. Setting out the affidavit in this posture provides the court with competent evidence of what the records are, how they are kept, and that the witness is familiar with the records and has reviewed the records, with the conclusion being a statement of what the records show.
    The affiant should have confidence that legal counsel has current knowledge of the law governing the content of affidavits including the Federal Rules of Evidence, state court statutes, Rules & Common Law; Local Rules, General Orders and Standing Orders. Question your counsel to ensure that the counsel keeps abreast of changes in the law and is not just passing standard forms to the court.
    The affiant should pay attention to the details. Watch the dates used in affidavits. Beware of the use of “effective date” versus the actual date the affidavit is executed and notarized.
    The affiant should never sign a document with blanks
    Litigation Involving Execution of Assignments

    Another litigation trend is attacking any assignment in the property title chain and particularly to attack assignments from MERS to the party holding the note at the time a foreclosure commences. Proper execution of real estate documents is state-specific but you should always take the following steps:

    Confirm authority to execute. The person executing the assignment must have authority to sign.
    Read what is being executed.
    Check the dates.
    Execute in front of a notary.
    Review, review, review form assignments! In particular, note the effective date of the instrument and all of the language in the instrument.

    Suits Du Jour

    It is impossible to identify every legal theory currently used by plaintiffs in bringing default litigation claims. The term “wrongful foreclosure” is too generic to be useful other than to generally identify a theory that a plaintiff is entitled to judgment because the note holder could not or should not execute the power of sale provisions in the security instrument. However, below are other specific claims which reappear frequently:

    Failure to Modify: The No-Mod, Mo-Mod and Re-Mod Cases
    In a No-Mod case, the plaintiff alleges the servicer or lender either had a duty or an agreement to modify the existing loan terms. There is a trend among borrowers who bring suit without counsel to allege that they have a government created right to a HAMP loan. Effective defenses to this allegation include use of the statute of frauds (a legal theory which requires a “writing”). More problematic are allegations that the parties (lender/servicer and borrower) had agreed to terms of a loan modification but nevertheless foreclosure ensued. Therefore, it is important that any written communication with a borrower is very clear as to what conditions apply before foreclosure will be halted.
    Practice Tip: If you haven’t reviewed form letters or other communication which go to borrowers concerning loan modification agreements, you should do so without delay. Make sure that the letters clearly communicate the lender/servicers’ intent regarding halting any default activity.

    The Mo-Mod theory is based on the plaintiff’s allegations that the modification terms offered were not good enough and that the lender or servicer is withholding a better deal. This theory is often combined with an argument that HAMP terms were withheld from the borrower.
    The Re-Mod theory alleges that borrower’s circumstances changed but the lender/servicer refused to review the prior modification offer or to offer something new.
    Standing Challenges: Challenges to the right of the foreclosing party to commence or perform the foreclosure are not new theories, although the press would have the public believe otherwise. Standing challenges are another wrinkle in the “you don’t have the right to foreclose the loan theory” (i.e. wrongful foreclosure). The issue has been renewed by a Massachusetts opinion, U.S. Bank National Association v. Ibanes1 where the court found a foreclosure sale void where the securitization trustee could not provide valid assignment information to verify the rights of the foreclosing party. Actually, it is logical that the note holder would have this burden, but the issue is complicated by MERS issues, defective assignments, lost notes, assignment, pooling and servicing agreements and other securitization issues. This issue is easily defended if the assignments are of record and if the original documents evidencing the right of the foreclosing party can be located. Some courts have found other ways that the lender/note holder can prove its interest. An Alabama court in US Bank v. Congress2 found that the trustee of a securitized trust had standing to bring foreclosure if it holds the note and that the party did not have to own the note to have standing. Further, that court held that the pooling and servicing agreement could be evidence of right to foreclose if that document identified the loan in its schedules.
    Negligence and Breach of Fiduciary Duties: Although a state-by-state consideration, an allegation by a borrower that the lender, servicer or investor has breached a fiduciary duty owed to the borrower should raise a red flag, particularly because mortgage transactions are, in most states, considered to be long arm contractual transactions in which a fiduciary duty is not owed to the borrower by the lender or its assignees of title. The legal theory of negligence also concerns breach of a duty owed by one party to another. If no duty is legally owed, then there can be no claim for negligence.
    Federal Regulatory Claims: Of late, there has been a surge in cases alleging violation of federal regulatory claims such as violations of the Truth in Lending Act (TILA), Real Estate Settlement Procedures Act (RESPA), Home Owner’s Equity Protection Act (HOEPA) and the Fair Debt Collections Practices Act (FDCPA). Boilerplate lawsuits can be found on the Internet ready to cut and paste into a complaint. Most often the plaintiff and, in a surprising number of cases, the attorney, have failed to read the statute and may ignore important provisions of what the statute covers and when suits regarding violations of the statue must be brought. There are often simple defenses to such claims such as a bar on prosecution on account of the expiration of statutes of limitation (for instance, TILA has a bar for damages after one year and bars rescission of the loan after three years; RESPA has a one- or three-year claims bar dependent upon which provision of the statute the claim is based upon); inapplicability to loans not secured by the principal dwelling or those which are not purchase money, reverse mortgages or open ended agreements.

  6. […] via Briefs Submitted for Oral Argument in Arizona « Livinglies’s Weblog. […]

  7. Louise – about the only thing 100% correct in that post was the last sentence. The rest were statements that were slightly out of context and not completely true. Best advice is consult an atty. Next best advice is to find someone who’s been successful at what you’re trying and to mimic their filings and arguments.

  8. The issue of the free house for the homeowner is done through a Quiet Title action. In that action, if the homeowner wins, there is a settlement agreement wherein the homeowner is indemnified if anyone else comes forward and tries to take the house back or put a lien on it or whatever. There is also a service by mail done so that anyone making a claim against the house has 30 to 45 days to file a claim. It is filed in the newspaper legal notices. The time period depends upon the state the action is filed in. After the time period expires, any claimants cannot make a claim. Please consult an attorney.

  9. Newcomer to Argue High-Stakes Foreclosure Case Before Fla. Supreme Court
    Adolfo Pesquera – Daily Business Review

    July 15

    http://www.law.com/jsp/article.jsp?id=1202501156555&Newcomer_to_Argue_HighStakes_Foreclosure_Case_Before_Fla_Supreme_Court&slreturn=1&hbxlogin=1Enrique Nieves III

    As a relative novice in the legal profession, Ice Legal senior associate Enrique Nieves III is prepping for his biggest case and his first appearance before the Florida Supreme Court.

    At 31, Nieves is assigned to argue a case that may decide the fate of thousands of mortgage foreclosures similar to his case, Roman Pino v. Bank of New York Mellon.

    The question before the court seems straightforward: Can banks escape fraud claims in foreclosures by simply dropping their case?

    But the ramifications are potentially severe, and with its decision the state’s high court will likely decide what consequences lenders will face for the robo-signing scandal and allegedly fraudulent assignment-of-mortgage documents that has affected thousands of cases.

    The national media swarmed on the issue, and last fall lenders imposed their own moratoriums on new foreclosure filings. The attorneys general in all 50 states launched investigations of lenders.

    In Nieves’ case, the 4th District Court of Appeal ruled Feb. 3 that BNY Mellon legally avoided a claim that it committed a fraud on the court by voluntarily dismissing a foreclosure action against Pino, a Lake Worth, Fla., resident. The claim was dismissed after Pino’s counsel scheduled depositions and asked for an evidentiary hearing to determine whether BNY Mellon used a fraudulent mortgage assignment.

    On appeal is an 8-1 en banc decision saying courts have no authority to rescind voluntary dismissals and that no harm was done. Judge Mark Polen disagreed, saying the allegation of a systemic fraud was the very thing the Supreme Court addressed in its 2010 rule change giving courts greater latitude in sanctioning plaintiffs who make false allegations.

    If the Supreme Court agrees with Polen, a host of homeowners may get a chance to seek sanctions from their lenders. Those are the stakes for Nieves.

    A 2007 graduate of Pennsylvania State University Dickinson School of Law, Nieves was 70th of 177 in his class and vice president of the Minority Law Students Association. He has been an attorney for less than four years and has argued only four appeals, all before district courts of appeal.

    Opposing counsel will be Katherine E. Giddings, an Akerman Senterfitt shareholder in Tallahassee and chair of The Florida Bar’s Rules of Judicial Administration Committee.

    Among Giddings’ prominent cases was her 2008 defense of the Democratic National Committee in the 11th U.S. Circuit Court of Appeals after the DNC refused to seat Florida delegates at the national convention because the Republican-controlled Legislature scheduled its primary too early for Democratic rules.

    “She told me she teaches appellate board certifications for The Bar,” Nieves said.

    He appreciates the irony. His opponent could very well be the lawyer who instructs him when he goes for his appellate law certification, which he doesn’t qualify for yet because he hasn’t had enough cases.

    GETS AT ISSUES

    Nieves has been at the Royal Palm Beach, Fla., law firm for just two years. The Texas transplant was raised in San Antonio, moved to Georgia during high school and made a name for himself on the basketball court.

    “We played basketball together at Collins Hill High School in Suwanee,” said Donnie Davis, an Atlanta schoolteacher, Nieves’ best friend and best man at his wedding in Jamaica last summer.

    “Enrique gave one of the longest best man speeches in history,” Davis said. “He knew a lot about my background, but he edited out a lot of parts, which I appreciated.”

    Davis and Nieves followed each other to Georgia State, where they played for NCAA Basketball Hall of Fame coach Lefty Driesell. A point guard, Nieves took his basketball talents to Coppin State University where he completed an undergraduate degree in science.

    What drew Nieves to Florida after law school was a chance to spend time with a cousin he was close to from his days in San Antonio — Anthony Alabi was an offensive tackle for the Miami Dolphins.

    When Nieves wasn’t catching a football game, he was drafting memoranda, orders and opinions as a staff attorney in Palm Beach Circuit Court.

    “We started the same day,” said Jessica Rodriguez, now a staff attorney for U.S. Magistrate Judge Ann Vitunac.

    Of the half-dozen in the rookie class of 2007 staff attorneys, Rodriguez recalled Nieves as an excellent writer.

    “He’s very good at getting to the issue,” Rodriguez said. “If I was working on something, I could give it to him to proof or edit. He would come back with advice, give me good ideas or guidance on things I may not have thought of. He’s very sharp and kind of thinks outside the box.”

    Nieves thinks he got the bug for appellate work at Penn State. He had to take an appellate practice course his second year, and it turned out to be a natural fit. But he wanted to be in a courtroom, too.

    GOT A SHOT

    The Ice Legal firm was barely a year old when Thomas Ice hired Nieves in July 2009.

    “When we hired him, I was looking for a bankruptcy attorney,” Ice said. “But we were so busy with appeals. I needed someone to step in. I gave him a shot at it, and he showed right away he was excellent.”

    Writing is a skill many attorneys lack, Ice added, noting they tend to get lost in the legalese and the archaic language of 19th century case law. Nieves’ writing style meshed with Ice’s own. And he appreciated Nieves’ experience as a court staff attorney.

    “That’s excellent experience for getting to see the judges in action,” Ice said. “He understands that if you know a judge’s personality, their likes and dislikes, their feelings on certain issues, you can craft your arguments and tailor them to particular judges.”

    Nieves’ first oral argument came in March 2010 before the 3rd District Court of Appeal on a service of process issue.

    He considers his first notable case to be Valcarcel v. Chase Bank dealing with attorney fees, which he won last year in the 4th DCA without argument on the briefs. A Palm Beach circuit judge dismissed the case because of misconduct by a Chase attorney but refused to award attorney fees to Ice Legal.

    Nieves won a reversal. The issue of attorney fees has come up as an appellate issue several times, most recently in a May 18 opinion from the same court when Nieves prevailed against Flagstar Bank and Mortgage Electronic Registration Systems.

    Nothing he’s done to date, however, compares to Pino’s case. Still, Nieves does not lack for confidence. And Ice looks forward to his high court debut.

    “I’d like to see him up there against the big bank with their cadre of attorneys,” Ice said. “It makes a good David versus Goliath picture in my mind. He’s certainly going toe-to-toe against a very experienced, very highly paid lawyer on the other side.”

    On July 1, the Florida Supreme Court granted BNY Mellon’s motion for extension of time. It has until Aug. 4 to answer Nieves’ brief. No date has been set for oral arguments.

  10. […] Livinglies’s Weblog Filed Under: Foreclosure Law News, Foreclosure News Tagged With: crisis, foreclosure, […]

  11. “Either to the banks who don’t have anything to lose except an opportunity to get a free house or to the homeowner who had more left on his obligation than the value of his claims against the bank for wrongful foreclosure, predatory lending, fraudulent lending etc.”

    THAT is the part I find most frightening, especially with the pro-corporate mindsets of the supreme courts in most red states.

  12. 2nd Wave of Foreclosures May Have Started

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    By Mark Puente, St. Petersburg Times, Fla.

    July 14–For months, experts have predicted that a second wave of foreclosures would hit Tampa Bay and the rest of Florida. Now, it appears they were right.

    Initial foreclosure notices in June jumped nearly 61 percent over the previous month in the bay area and 24 percent statewide, according to a RealtyTrac report released today. Lenders delivered initial notices to 3,390 homeowners around Tampa Bay and 23,769 in Florida.

    Putting the best face on those dismaying numbers, the June foreclosure figures for the bay area are still down nearly 50 percent compared to June 2010.

    Filings in many other Florida regions also climbed last month. Sarasota-Bradenton jumped 34 percent; Miami-Fort Lauderdale, 14 percent; Orlando, 34 percent; and Ocala, 45 percent, the report said. The filings for those areas are also lower than June 2010.

    Scott Brown, chief economist with Raymond James in St. Petersburg, cautioned not to put too much weight into figures for one month.

    But “it’s not a good sign,” he said. “The worst is still behind us. It’s going to be years before a full recovery.”

    Before June, filings had dropped in six of seven months.

    The talk of a second wave of Florida foreclosures increased in the fall when three huge law firms collapsed amid allegations of sloppy and fraudulent documentation, stalling thousands of cases.

    Experts said that, combined with the shadow inventory — homes for which mortgages are 90 days late and nearing foreclosure — would trigger a second wave of filings and depress the housing market even more.

    James J. Saccacio, chief executive officer of RealtyTrac, estimates that 1 million foreclosure actions should have taken place this year but will be pushed back to 2012. He blamed the increased filings on the paperwork delays in courthouses.

    “This casts an ominous shadow over the housing market, where recovery is unlikely to happen until the current and forthcoming inventory of distressed properties can be whittled down to a manageable number,” he said.

    Matthew Weidner, a St. Petersburg lawyer who focuses on foreclosures, doesn’t see an end to the doomsday scenario caused by foreclosures. He blames executives at Wall Street lenders for the increased filings.

    “This is a catastrophe being laid upon a crisis,” he said. “America is foreclosing upon ourselves. The federal government is foreclosing on taxpayers to pay rich bankers. This is madness.”

    Nationally, initial filings rose nearly 4 percent last month, but represented a decrease of 29 percent from June 2010.

    Mark Puente can be reached at mpuente@sptimes.com or (727) 893-8459. Follow him on Twitter at twitter.com/markapuente.

    [Last modified: Jul 14, 2011 12:22 AM]

  13. tn—I had my boxing gloves on yesterday—sorry about that…have a good one!

  14. 2:30 eastern time UsedKar. that should be interesting.

  15. I wonder if Irene Doerner (HSBC) showed up today in Judge Schack’s courtroom?

  16. So I read both briefs and now wonder if they picked the wrong case to submit to the Supreme Court. As the foreclosure hasn’t happened yet, it seems the Court could deem the issue not “ripe”. The mortgage company’s argument that, even if Vasquez’s position is correct, all they do is restart the FC since they now have the assignment in place is somewhat damning to the whole discussion. It leaves the door open for a very hollow victory.

  17. I guess that depends on if there are other creditors. One interesting take on this stuff is that if you “beat” the foreclosure and no one can prove standing to foreclose, someone probably can still assert the underlying debt even if it can’t be enforced via foreclosure. That entity sues for an unsecured debt, then records that judgment as a lien against the property. Just like that, there’s a relatively clean, enforceable lien against the property again. That’s assuming they could prove a case for the debt and get a judgment, and that may be a big assumption since you’ve already beaten someone in the FC action.

  18. Free house?

    Thought it was established that other lenders potentially lurk ready to reestablish a judgment lien against those “free houses.”

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