Danielle Kelley Forces Bank Into Permanent Modification

Danielle Kelley, Esq., is a senior litigation partner in GGKW (the law offices of Garfield, Gwaltney, Kelley and White with home offices in Tallahassee and branches in South Florida and Central Florida), now liberated from the administrative duties associated with running a law practice. Focusing her attention on litigating her cases, the results are getting better and better. Her latest blog turns her attention to enforcement of modification duties by the very same banks who report they are doing their best when in fact they are intentionally done their worst. She be reached at 850-765-1236, 954-495-9867, or dkelley@ggkwlaw.com. Neil F Garfield can be reached at the same numbers and ngarfield@ggkwlaw.com.

The latest is that Danielle Kelley took on the banks in the murky area of modifications — in Court. Her argument: once the trial modification has been satisfied, there is no discretion for the bank to deny the permanent modification. Her client made the payments and supplied the documentation (the usual 30 times because the bank kept lying to her client saying they didn’t have the complete file, asking for things that Kelley proved had even already received several times).

As with the whistle blower affidavits in the current breaking news, Kelley showed that the bank lied saying they had not received paperwork when they had. Opposing counsel was forced to concede that his client had behaved that way — thus setting up the unclean hands argument (which in this case turned out to be unnecessary).

Despite her client satisfying all parts of the trial modification which opposing counsel had to admit, the permanent modification was denied. Kelley said basically “no, it isn’t denied. It is automatic.” The bank scoffed at her and paid the price. Kelley ditched them in the preliminaries. She was just warming up and she had already won.

Opposing counsel citing the HAMP statute said that the bank was under no obligation to permanently modify the loan — even if the borrower has accepted the offer of the bank for the trial modification and then paid in accordance with the terms of the trial modification and even if the bank accepted those payments. Opposing counsel said “just because they complied with the trial modification doesn’t mean they automatically get a permanent modification.” The Judge thought otherwise and was pretty angry about it authorizing sanctions against the bank. “Yes it does mean that counsel — what else could it mean?”

The Judge took it under advisement, did the research, and issued the order. The modification is permanent by Court Order. The case is over with jurisdiction reserved to impose sanctions on the banks and award attorney fees to Kelley and her client. Whether the bank is going to appeal is unknown. But the lesson from this simple motion to enforce the settlement/modification are clear starting with THERE WAS REAL MONEY PAID AND REAL MONEY ACCEPTED AND THE MOVEMENT OF THE MONEY PRECISELY FOLLOWED THE PAPERWORK (the agreement to go into a trial modification).

See more on modification: http://dkelleylaw.wordpress.com/2013/06/26/the-in-house-modification-what-the-boa-declarations-point-to/

You might not see the connection but the ninth circuit opinion essentially came to the same conclusion and then turned the borrower down on his argument that the loan documents should not or could not be enforced. The decision starts out with the statement that the borrower was loaned money as stated in the note. Everything was down hill from there. Once the Court is presented with a real transaction (more apparent than real in the Arizona case, but this issue was never raised), where real money was paid pursuant to the terms of a real contract, the case is essentially over.

The Banks successfully suckered the lawyer into looking at the paperwork instead of looking at the money trail and comparing it with the paperwork. No allegation was made and no Discovery was put in the record showing that there was no real transaction as stated in the note and mortgage.

The two cases are very different in fact pattern but the result is the same: THERE WAS REAL MONEY PAID AND REAL MONEY ACCEPTED AND THE MOVEMENT OF THE MONEY PRECISELY FOLLOWED THE PAPERWORK. The problem in the Arizona case is that there never was any real issue with whether the money had tracked the paper trail even though it appears as though in reality it probably didn’t. Without the issue in the record, as the Court pointed out, they had no obligation to raise issues that were never raised at the trial level.


See: 9th circuit slams homeowners. June 28. 2013 http://cdn.ca9.uscourts.gov/datastore/opinions/2013/06/28/11-16597.pdf

this is not a bad decision. it is just another example of how lost we can get if we just follow the paper trail. the court was perfectly correct in its reasoning and and its conclusion. I predicted the outcome and told the lawyer involved here that he was pursuing the wrong path.

The opening words of the decision basically tells all we need to know. it says that the homeowner borrowed the money from the party set forth on the note. There is no question raised as to whether or not the party set forth on that note as the payee was in fact the lender. After that, it was all downhill.

The only way these cases can be won is by showing the money trail first. That is what reveals the actual parties to the transaction. Then by showing that the money trail does not track or follow the paper trail you can argue standing, and the fact that the mortgage lien was never perfected. That is the only thing that can stop a foreclosure.

It only makes sense that the courts as a whole are not going to let people off the hook unless the adversary has no right to receive the benefits. If you start with the premise that the loan was made just like it says in the note, you might as well pack your bags and go home. The courts are not going to refuse to enforce an obligation they think is real and which is not challenged by the debtor. The business of some coffee spilled on the document thus rendering the document unenforceable is not going to work and it isn’t working. Nor should it.

THERE IS NO MAGIC BULLET THAT IS GOING TO STOP ENFORCEMENT OF WHAT IS OBVIOUSLY AND ADMITTEDLY A LEGITIMATE DEBT. IT IS THE DEBT ITSELF AND THE COMPARISON TO THE PAPERWORK THAT LAWYERS SHOULD CONCENTRATE THEIR ATTENTION. Then you will see a tsunami of decisions in favor of the borrower because the transaction described in the note, the mortgage, the assignments and the pleadings do not exist. Pierce through the smoke and mirrors of Wall Street and you will find nothing to support their position.

The lawyers who insist on maintaining their focus of attention on the paperwork are simply guilty of mental masturbation. They get paid and the client suffer the consequences. With this latest decision, there should be little doubt that looking for a “gimmick” way out of this is not going to work. Foreclosure defense lawyers need to show that the party seeking the benefit of of foreclosure is not entitled to it.

4 Responses

  1. I have an excellent lawsuit against AHMSI now Owcen. Anyone having trouble with this criminal company feel free to email me at pmainsworth05@gmail.com.

  2. God Bless you Neil and Danielle for sharing this valuable defense and logic.

  3. Subject: File No. S7-35-11
    From: marilyn h Lane
    Affiliation: concerned individualSeptember 5, 2011
    The abominable banking system that is in place today, gives a bank great incentive to foreclose on an Ultra Vires contract, as the bank demands lawful money returned for the unlawful money lent.
    By what Authority are the Banks doing this? There is no authority for doing this. This is in complete prohibition to Art 1 Para 10 Cl1 of our US Constitution.
    All of our cases with slightly different facts all stem from the same Fraud.
    The Bank did not lend you LAWFUL MONEY but the Bank intentionally wrote
    a bad check and gave it to you –to circulate as money
    I certainly did not know this kind of fraud was going on when I signed my mortgage and note. Did you?
    The Mortgagor puts up a down payment, the Mortgagor pays a lot of fees and probably paid an attorney to represent them, all in order to get this bad check
    Would a Mortgagor have put in all that money, if one knew the truth of how the Banks ran their illegal business. I bet not.
    Did anyone notify you after that big day – the Banks check bounced – of course not. When the check that the Bank wrote came back to the Bank that wrote it, the bank didnt say we only have 5% , if that much and it was not stamped insufficient funds the bank stamped it paid
    So since the Bank did not have the money sitting in the banks account when they wrote the check, what the bank gave you is their credit.
    That is exactly what is prohibited by Art. 1 Para 10 Cl 1 of the US Constitution.
    What authority gives the Bank the right to make contracts with bad checks
    Nothing- Nada.
    Lawful money is needed to make a contract valid.
    Over and Over Mortgagors gave a Bank a mortgage on their castle , in return for a Bank giving you a credit entry on their books and charging you Interest on this credit. Also illegal.
    Did the Bank give you lawful money or is that what you got, credit?
    Banks are not allowed to lend their credit- Banks are in the business to lend
    lawful money There is not a Bank charter that allows a Bank to lend their credit.
    And as we continued to make monthly payments the Bank collected more money on their fraud.
    You try writing a check when you dont have funds sitting in your account to cover it.
    You can be sure that check is coming back markedinsufficient funds You are not allowed to do it and either is a Bank.
    This scam of Ultra Vire contracts caused injury to us, the true homeowners.
    In addition the banks are laundering bad checks.
    The Banks violate Truth in Lending Laws.
    The Banks are collecting Interest on money that doesnt exist. (Lending you 5% and collecting Interest on 95% of thin air)
    And once the Bank gets their Ultra Vire contract going, they start flipping them to MERS, Securitizations , Wall Street, Title Companies etc. there is no shortage of people all wanting to get their piece of the illegal profits.

  4. How do you modify that which is fraudulent and then ask why judges turn a blind eye to the scam

    Seems inconsistent at the very least.

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