Miuse of Lift Stay Order Causes Chaos in State and Federal Courts

I have noticed on many occasions that the bankruptcy court judges are adding to the orders some language of finding that the movant is the owner of the loan. The court lacks jurisdiction to consider those issues and that is the reason why the act of lifting the stay is a ministerial act based upon a preliminary finding that the movant has some colorable right to proceed.

It is nothing more than an order of remand outside the administrative side of the bankruptcy following which the debtor ought to be able to file either an adversary proceeding in the Bankruptcy action, a federal civil action with the Federal District Civil Court or the state court of competent jurisdiction.

But when filed outside the adversary proceeding in the bankruptcy court, the debtor is often met with the argument that the matter has already been litigated and that therefore the debtor should be barred from “re-litigating” the issue under the Rooker-Feldman doctrine, or the common law doctrines of collateral estoppel or res judicata.

Frequently uninformed Judges accept this argument as true. While it is true that good research and writing of memorandums might suffice I have suggested to attorneys that they attack the source — the bankruptcy Judge in the administrative proceedings in which the bankruptcy is being processed.

Based upon this I have advised several attorney who have asked for my research and opinion, that the court be advised that the lift stay order is going to be misused and that the court lacks jurisdiction to do anything other than grant or deny the motion to lift stay. But many Judges are adding language that implies that the matter has been litigated, which causes unending procedural problems for the homeowners.

If you lose, you ought to ask the Judge to insert language in the order that the order may not be construed as a findings of fact based upon an adversary hearing in which evidence was presented on the merits of the intended foreclosure or the the debtor’s defenses.

The problem you are addressing is that if the lift stay order is entered, it is often construed by state courts as being conclusive as to the issue of the ownership of the loan, the legal ability of the forecloser to submit a credit bid, and your potential defenses.

This is particularly true where Judges gratuitously add, at the urging of the would-be forecloser that the forecloser is the owner of the loan. Since the burden of proof required at a motion to lift stay hearing is merely whether there exists some “colorable” right to proceed, it is not a hearing in which due process  has been afforded the debtor as to the merits of the supposed creditor’s claim nor the defenses of the debtor, where the burden of proof is at least a preponderance of the evidence.

So I often suggest that counsel for the debtor specifically request that if the Judge is inclined to grant the lift stay order, that the Judge also recite the fact that this order should not be construed as barring the defenses or claims of the debtor under the Rooker-Feldman doctrine, res judicata or collateral estoppel, which is something for the state court to decide.

Whether you are filing or speaking or both, the wording should go something like this (check with licensed counsel as to form and content):

1. The debtor denies that the party seeking relief from stay is a creditor of the bankruptcy estate or an authorized representative of any creditor. In fact, the moving party refuses to provide the identity of the creditor who could submit a credit bid in lieu of cash at auction and refuses to provide either the debtor or this court with any evidence from the Master Servicer which has access to the loan receivable account that contains all of the receipts and disbursements relative to this loan and the pool it is alleged to be the owner of the loan.
2. Debtor also denies that a perfected lien exists in which this moving party or any other party can foreclose.
3. Debtor denies the default, since the subservicer and other parties continued to make payments to the creditor’s loan or bond receivable account after the alleged declaration of default and notice of sale. Hence even if this court were to decide that the “colorable” claim threshold had been met, the order entered should not be subject to claims by this movant that a default exists or that it is the the actual owner of a loan receivable account in which the balance is deficient or payments have not been made to the creditor.
4. In fact, based upon public records, it is apparent that a mortgage bond was issued in lieu of an account or loan receivable and that the account was or should be credited with payments received by insurance, credit default swaps and other contractual arrangements with the subservicer and master Servicer in which the creditor was paid or credited with those payments that expressly waived subrogation and which did not involve an assignment or purchase of the loan.
5. Based upon the facts thus far discovered by debtor and the lack of evidence offered by the the party seeking the right to foreclose, debtor specifically denies that she ever entered into a financial transaction with this party or any of its predecessors. Debtor admits that she has had many loans or credit with many parties as is evident from the schedules filed in this bankruptcy, but none of those included this party moving to lift stay or any predecessors.
6. If the court were to enter an order based upon the “colorable” interest doctrine, Debtor respectfully requests that this party or any successors be barred from using this order as a matter that had had already been litigated and that debtor be permitted to assert claims and defenses in the state court, as these would-be foreclosers have claimed when the debtor brings actions for Temporary restraining Orders and other claims.
7. Debtor denies the the note is evidence of any loan owed by debtor to this movant or any of its predecessors and denies therefore that the Deed of Trust constitutes a perfected lien against the subject property and further denies that the power of sale contained in the Deed of Trust can be exercised —particularly without an adversary proceeding in which evidence is presented with proper foundation through testimony of competent witnesses that the debtor can cross examine.
8. In fact, upon information and belief, the wire transfer instructions received by a closing agent specifically exclude this movant and any predecessors in interest or asserted interest regarding the loan origination documents, that were not and never were supported by consideration nor were any “assignments” or sales of the loan ever supported by consideration in which value or money exchanged hands. Debtor denies that the named payee was the lender or source of funds for any loan and therefore could not neither be the beneficiary under the deed of trust nor have any nominee as beneficiary under the deed of trust.
9. This is being brought to the court’s attention at a late date because the information about the origination of the loan only recently came into the hands of the debtor.
10. Debtor denies the validity and authenticity of any documents proffered by the supposed creditor to whom no money is owed and who lacks any right, justification or excuse to bring any collection or foreclosure proceeding since it neither funded nor purchased the loan.
11. Even in a motion to lift say, the burden is upon the movant to bring forward some competent evidence in which the foundation for any documents being used to support the motion are supported by the testimony of a witness that is competent to testify — on personal knowledge of the all of the receivable instead of the partial accounting from the subservicer upon which the the movant and the trustee on the deed of trust rely. Debtor denies that such a witness exists because the facts upon which such a witness would be required to testify also do not exist.
12. Debtor intends to bring an adversary action against this movant for wrongful foreclosure, abuse of process and slander of title, amongst other causes of action. If the court denies the motion to lift stay, debtor shall file the adversary action in the in this Court. If the Court grants the motion to lift stay, debtor shall file the proceeding in state court. Debtor requests that her meritorious claims not be barred by misuse of civil procedure and misuse of the rules of evidence and common law doctrines based upon a hearing whose burden of proof is less than “probable cause” in criminal actions.

If the BKR judge disagrees, then statistics would indicate that a LATERAL appeal to the District Court judge would have a much higher likelihood (50%) of success than an appeal to the BAP (15%) or Circuit Court of Appeal (15%).

24 Responses

  1. @ Poppy

    And so it has come to this, eh? That it is the “homeowner’s job” to figure out how to defend ourselves against the blatant lies of the servicers—who have the judges in their pocket. Hmmm. Sure wish that had been in the original contract we signed.

  2. @ E. ToLLe

    Thanks for the send-off…no genius here, lot of court time and the judges are listening to some of this. Many of the ideas discussed here you cannot get in the court, the fraudsters have it all under proprietary information. There are folks here who have been through the drill and are making some, headway. There is no silver bullet, but the judges, many of them do not understand some of this and it is not their job to read thousands of pages of paperwork, just administer the law, which is the homeowners’ job to portray.

    Everything the originators and servicers put into the courts are lies…so, it goes. I have my own problems and am just trying to share what has gained traction, but to no avail here. You can only chase what it is your grasp, particularly when you have no money and the system ties you in a knot.

    So long…thanks again, for a speedy retreat!

  3. Thanks Opoppywan…. Sorry not to have hit your high standards. Don’t let the LL café doors smack you in the ass on the way out. Oh, and here’s your hat.

  4. Unbelievable comments….the answers are right here in your grasp. The conspiracy stuff is true, but a moot point. Not writing here anymore. You folks will see the truth is evident and very accessible. Good Luck! Too interested in everything else, not your house!

    You’re all listening to things that are way beyond what can get you where you need to be, if in fact you are interested in fighting for your home and liberty.

    Just my piece.

  5. Who said it is YOUR government? Of course they govern you & all, like slave owners did. Better say our slave-masters.

  6. I’ve never been big on conspiracy theories, but I have to eat my hat on this 9-11 stuff. I couldn’t believe that our government would murder all those people over money. But it seems to be true. We’re all screwed.

  7. anybody have their computer crash while watching the 9-11 video?
    mine did.

  8. @ carie, thanks for the link on the WTC-AIA video. A must watch film. My partner is AIA, a high-steel designer, knows this stuff inside out and signed on on the spot. No tin foil hat needed. I give it two guillotines up.

    That huge sucking noise at the end is the sound of any remaining hope that the USA can pull off a peaceful resolution to the end game orchestrated against one and all by the elite. It will come down to REV 2.0, without a doubt. It’s the only way.


  9. FBI hoaxters cloud bank-crimes instead of trace bribery of court staff by banks & their lawyers http://www.fbi.gov/about-us/investigate/white_collar/mortgage-fraud/mortgage_fraud

  10. @carie…… you are correct. I read an article saying that the “GSE debt” is owned in this order by: China, Japan, Russia and the Cayman Islands. Paraphrasing now…… ” … the bailout was to avoid an international incident…”.

  11. Just ’cause something is on a piece of paper does not make it true! I have thousands of papers from discovery, QWR’s, work products, etc…they are ALL inconsistent.

    To me, you have to question everything. Verification and validation of every date, time, document, statement, anything to do with the loan. You cannot escape the work and as someone else said, you must read other cases to see what they are doing and gear up for your defense.

    The originators in sub-prime were the borrowers, not the homeowners’ and they do not conform to contract laws. Lines of credit were used, that is a large flaw, because they did not segment the loans to each property, making the perfection of the lien impossible. Even the documents filed at the deed office are lies. If someone borrowed money to lend to you, there is no lien perfection and the recorded deed is incorrect.

    Companies like BOA, bought servicing from Countrywide, not the ownership of loans. New Century didn’t fund thousands of loans, stole the money from payments and escrows and defaulted on the lines of credit. Geez, how can your loan be valid under those circumstances? They defaulted, you didn’t, long before you stopped making payments. Check this stuff folks, it is all true and easier than trying to figure out REMIC trusts, PSA’s, Master Purchase Agreements, etc…it is right there.

    Doesn’t mean you will win, but certainly is evidenced in paperwork, that you can acquire. Just my input, not legal advice, lots of court time!

  12. US need no more budgets since its endless counterfeit dollars better go countless than counted in budgets!!! http://www.youtube.com/watch?v=c-g137O_x10&feature=em-share_video_user

  13. Thanks Neil. As a recovering attorney with nearly 40 years of abstinence from practicing law but now with avid interest in doing what I can to support foreclosure justice for borrowers I admire the use of rational thought in service of what is right. Because of my earlier legal education I find that I can read and understand (at least to some degree) what you speak about in this blog. I love it that you were able to see that bankruptcy judges and their decisions are being misused to claim that something has been adjudicated when it clearly has not been. As a long time non-participant in the legal arena I woud not have caught that along with the millions of ordinary exploited folks who would walk away having been screwed by the system once again.

    I often share your blogs with my curating comments on Facebook and Google+. I am also participating with Project Reconomy in Oregon to do what we can here to sock it to the banksters and Wall Street. This is the most effective and practical work for economic justice I know of.

    On the theoretical front I would not say what you/we are doing is a solution but it is what is necessary until a solution is devised. I suggest proceeding to challenging the entire rational for real estate speculation all of which is really land speculation (the getting of something for nothing at the expense of everyone else) which is one of America’s favorite games. None of this would have happened if everyone wasn’t interested in cashing in on the unearned increment of increased land values inherent in investment in real estate for profit. All of that game could be put behind us if we would shift our tax systems to capture community created land values ala Henry George. But that is worth another discussion some other time.

    Thanks again.

  14. @DCB

    Here is an answer to your question on another thread:

    “…The subprime was born out of loans that were reported to GSEs as in default and risky. You would not even know that this was reported about you, you would not even know that you are now classified as subprime. No one would tell you. But, if the GSEs did NOT purchase your refinanced loan, you know you were subprime. This is especially problematic if you were a GSE loan BEFORE you refinanced. How do you find that out??? Not easy. GSEs will not disclose if any prior loan was a GSE loan.

    No — nothing on credit report will reflect a prior foreclosure item. In fact, unless you look closely, credit report may disclose little (however, someone who is well versed in reading credit reports will be able to pick up slight discrepancies). Credit report will report the prior loan as paid —- but, they will not disclose that it was not paid by you!!!! Someone else paid the GSEs off to acquire the collection rights. So, yes the loan was paid — but just not by you — you remain in default with the GSE.

    No new mortgages could be issued on the above scenario. But, LOANs in the false form of mortgages were issued by the subprime. They were just not valid mortgages as they claimed to be, because you did not qualify for a valid mortgage. Relate it to credit card debt. If in default, the collection rights can be sold at anytime. This is not balance sheet assets, but rather income to the debt buyer — if they can collect.

    Same with the false mortgages. Although, people were not told they were reported as in default (some may have actually been in default — then ask yourself — how do you think you would qualify for mortgage??? How do you think you refinance a default loan???) You cannot. You refinanced debt collection rights. Not a secured loan. There is a reason that loans were not sold to GSEs. Big question is — was it a GSE loan BEFORE you refinanced???

    Collection rights carried at face value — not the loan itself. These loans are not, and never were, a part of bank’s balance sheet receivables. The problem with the banks is that the securitized the cash pass-throughs to the collections rights — and then purchased the securities themselves. THOSE securities were on the banks balance sheets — until the government purchased them.

    “Loan” collection rights still there after trust liquidations because it was collection rights that backed the trusts. Collection rights do not go away — despite liquidation of the trust. Collection rights survive the trust liquidation. “

  15. Frank: with only $10 trillion in outstanding total U.S. Mortgages BanGsters are spending the rest on getting HI!!!! http://www.federalreserve.gov/econresdata/releases/mortoutstand/current.htm

  16. @JG

    Here is some more info for you (and anyone else who cares to know) regarding the false default and ensuing crash…(this is from the person who has been researching and investigating this for years, and has the physical proof—you know, the person who went to Fannie/Freddie with the info and was told by them to “Let it go.”) :

    “…The purpose for the false default is that they got the collection rights for free. Then, they sold cash pass-through to the collection rights to security investors in the fake REMICs. Easy profit. First, they put borrower in default — and report the same to the GSE investor. Then they collect insurance on the default, and purchase the collection rights for free (just about) from the GSEs. Then they “refinance” the collection rights to increase the debt owed. Then they sell the cash flow pass-through to security investors for the fake “refinance.” Make a huge profit on the investment packaging of the pass-through. And, make a profit on the spread between what they collect (as to yield on payments), and what they actually pay (yield) to security pass-through investors. If default occurs, then they take the house. But they never contemplated mass default — never thought this through. The problem was that the defaults occurred so fast and quickly, that the REMICs collapsed — they could not pay were they obligated to pay, thus, a “trigger” event occurred for massive default, and which required the government bailout. And, even before the massive defaults started to occur, Europe had already picked up on the fact that the “mortgages” were fraudulent — they started to pull out fast from their investments. What was occurring was a complete crisis — a financial collapse. If the government did not step in, that is what would have happened. However, no one cared about the victims of the fraud, and that they never had a valid mortgage. Nothing more than dischargeable credit card debt.

    Profit Profit Profit — that was the motivation for false default. And, the GSEs did not care, they were not making much profit on their loans —- investing in the bank securitization of false mortgages was more profitable to them — a higher interest rate. In fixed income, profit is all about yield.

    And, all about investment banking FEES…”


  18. From In re Raja, BK ED VA, Alexandria division
    08-18409 (Indy Mac was the bankster)

    “The court does stress, however, that relief from the automatic stay simply removes a temporary barrier to the enforcement of creditor rights and is not a final determination of the creditor’s right to enforce its claimed security interest. See Grella v. Salem Five Cent Savings Bank, 42 F.3d 26 (1st Cir. 1994) (holding that order granting relief from the automatic stay does not have preclusive effect). The debtor
    remains free to bring an action in state court challenging
    IndyMac’s right to foreclose and may bring in state or federal
    court any claim to enforce rescission under the Truth in Lending
    Act or for relief under other statutes.”

    This is ‘just’ a bk case in a particular venue. You could try to stand on this bk case if you want to use its premises, but instead you might use your legal research vehicle to find any global cites, cases referring to this case, or others in support of the prop that relief from stay does not determine the rights of the parties. And of course, then take those to your attorney for his review. Also, find Grella. But a caution about bringing tila or other claims for damages which existed prior to the bk petition: if you dont take the right steps, you may find yourself without standing to bring the claims since they may belong to your bk estate. Bk trustees seldom like to mess with those claims, but that doesn’t change needing to do what has to be done with him and your petition. Ask a competent bk attorney. I sort of went off point. This
    case says to this lay person that relief from stay is not preclusive of
    an action by a homeowner in another forum.

  19. I’m looking for that case about rfs and res j. But I just remembered this: the Vargas court found that banksters adding “and its successors and or assigns” to motions for relief from stay is an improper attempt to garner relief for unknown parties. Vargas is at scribd and probably all over the internet. Vargas may not be precedent in everyone’s jurisdiction, but it’s logic should be.

  20. I have some case law which supports the tenet that relief from stay is not determinative of the rights of the parties. RFS is not res judicata as to those rights and a homeowner should be free to take the action to a state court imo and I think that’s what case law finds. It’s not dispositive. I don’t know about filing an AP after relief from stay has been granted. Seems like RFS would take the matter out of the jurisdiction of the bk court. Hmmm on that one. Maybe not. I’ll see if I can find my case(s).
    In the meantime, it may be helpful to study banksters’ arguments against homeowners’ opp to mtns for stay relief so you can anticipate their arguments against yours to strategize. You need a pacer acct and or a research vehicle to do that.

  21. In addition, tnharry—the servicers took MILLIONS of homes and took BILLIONS of dollars based on the lie of securitization—how is that NOT unjust enrichment…seriously? I would really like that explained…thank you.

  22. (Sorry for posting this off topic thread, but I am trying to get an answer from tnharry)

    @tnharry—can you please respond to my response to you…here is the thread (re. unjust enrichment, among other things):

    tnharry, on August 31, 2012 at 6:31 am said:
    i’ve said it before and I’ll say it again. fraud is easy to say and hard to prove. what are your damages for this fraudulent concealment? so what if the REMIC wasn’t funded or the note didn’t make it into the trust? neither of those have damaged you.

    carie, on August 31, 2012 at 2:35 pm said:
    Also, tn—-what about all the money I gave the servicer under false pretenses?
    Bottom line: They said in writing that my “loan” was “securitized”, and they “service it”. It was never securitized. They took my money based on that lie. Why do they get to keep our money based on a lie? What law are they violating when they collect money from you based on lies? Wouldn’t my damages include all the money they took from me based on those lies? Hello?

    carie, on August 31, 2012 at 11:31 am said:

    I have a document from the servicer signed by them stating “Your loan was securitized.” That is a blatant lie, a lie they used to take my money and ultimately foreclose on me and my family.

    The “damages” are the moving expenses, rent, utilities, etc., medical bills related to stress, that I have had to pay for being illegally kicked out of my home with fraudulent, fabricated documents—which are based on an original contract that is full of lies about transactions that never took place…

  23. RIGHT ON NEIL: Because bankruptcy judges, except a few honest ones are well bribed. Actually they even add an even more corrupt language to stay lift orders that:
    “this tentative order takes effect immediately and movant (bogus lender) does not have to wait for entry of order to steal subject property”. Just check any court’s tentative orders and you’ll see them.

  24. Neil,

    You are right.

    Two cases with Onewest Bank FSB as servicer of Indymac Trust.

    Indymac RAST 2007-A5 and Deutsche Bank as Trustee.

    Into a 9th circuit appeal and Onewest Bank, FSB filed 3rd Motion for Relief from Stay (“MFRS”). Result lower judge was going to lift stay due to colorable interest, and he wrote so what there is a chain of secured interest gap. However, I filed for emergency motion to the 9th circ. BAP, They denied. Then to the 9th circ. real judges and they gave me an injunction against Deutsche Bank and their agents. No bond was needed. Appeal pending.

    INDX 2005AR12 Trust with Deutsche Bank as Trustee.

    The chain of title is absolutely a sham.

    Commercial Capital Bank FSB originated and was the trustee of the Deed of Trust. Nothing on the land title records until an assignment March 2011 from Indymac FDIC using Roger Stotts as attorney in fact. FOIA shows Onewest did not own the note and sold servicing only.

    Then guess what belatedly they find an allonge that was not attached to the note and an unrecorded assignment to Indymac. Indymac uses the now famous Brian Broulliard to endorse the note in blank. I have his depo. Onewest as servicer does MFRS stating it holds the note and is the “person entitled to enforce” it or (“PETE”). SEE In re: Veal. This is a chapter 11 and there is an adversary in place. Onewest says they don’t care what the FDIC assigned. Although the Trustee of the DOT is dissolved and only the beneficiary may direct the NOD, An yes there is fortunately no MERS.

    These people need to be stopped and this article is timely. The BK court is worthless and is now in the banks pocket.

    Hopefully the 9th circ. will nail them and also the BK courts.

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