Technical vs Substantive Objections: What difference does it make?

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Lawyers and homeowners are upset. Their objections to the very soft proof offered by parties attempting to foreclose on property are met with instant skepticism and usually, even if the objection is sustained, the case ends up at a foreclosure sale. The reason is simple. Judges are people. They come to the bench with personal experiences, education, training, and active litigation experience. Like all professionals these experiences shape their perceptions and “leanings” (not bias). Underneath everything is the question in their mind: “What difference does it make?” If the result is going to be the same regardless of what technical objections or narrative offered by the homeowner, the Judge is annoyed with what appears to be an obvious waste of time caused by due process requirements. Yes there is a certain amount of prejudgment by Judges and the recent disclosures exposed by Tom Ice in the 4th DCA clearly show that Judges are deciding cases based upon policy decisions rather than the merits of the case.

But that is only part of the problem. The real problem is that Judges are not open to an alternative narrative — and that is because in most cases they won’t allow the presentation of evidence that would give them that alternative narrative.

The underlying narrative is simple, in the mind of most judges: The borrower received a loan, signed papers, breached the terms expressed on those papers, and now faces the ultimate penalty — forfeiture of his home. While this may lead some judges to show compassion toward the homeowners, regardless of how they got into the mess, our system requires the employment of remedies like foreclosure. You put up collateral and you don’t pay — you lose the collateral. This narrative is axiomatic in the mind of most Judges because they have not been educated as to the unique, faulty, fraudulent scheme devised by Wall Street in creating availability of a large pool of money vastly in excess of the entire GDP of the U.S. economy.

The current narrative also places a burden of proof on the homeowner which should not be enforced. If the homeowner denies the loan, the consideration, and the truth of the matters asserted on the papers he signed, then the burden should be on the foreclosing party. This is particularly true where the evidence of the fraud is in the sole care, custody and control  of the foreclosing party, their co-venturers, predecessors or successors.

This also accounts for the game of musical chairs played by the banks where servicers are changing every year or even more often, Trustees are changing, and the Plaintiffs are continually changing. They are then able to say that they can’t find the papers and only have “electronic copies” which is basically a way of saying we were negligent nor fraudulent. That bothers a lot of Judges but they are not getting the narrative required to answer the fundamental question: “What difference does it make?”

Placing the burden of proof on someone who can only prove their point from the records of the party suing him is unfair. Not enforcing discovery demands is outright ridiculous — but only if an alternate narrative is developed. We are now preparing extensive motions and memoranda declaring the homeowner’s theory of the case. This shows point by point why each interrogatory, request to produce and request for admission is essential to the defense theory of the case. Of course in order to do that you need to understand your own narrative. Many lawyers focus in on a magic bullet, like the lack of an assignment of the mortgage. They fail to submit written argument that states the difference between the note, which does not need an assignment, and the mortgage which does need an assignment. That failure undermines their credibility.

Laying out your theory of the case gives the Judge something that he or she didn’t have before — an answer to what difference it makes. Challenge the forecloser on the substantive basis that there is a complete absence of any transactions upon which the forecloser relies. The narrative goes on to show that the illusion of a standard mortgage transaction was indeed created; but the reality is bait and switch — that the loan was in most cases funded with the proceeds of civil theft from Pension funds and other “investors” on Wall Street. And the conclusion is that every foreclosure forces losses onto the real lenders and forces the bad loans into an empty trust; and that each foreclosure continues the fraud on both the real lenders and the borrower.

Such blanket assertions are confronted with the perception that the allegations are false and counter-intuitive. But when you continue your narrative showing that the Trusts were merely an illusion covering up the theft from the investors or theft from the trust which issued an IPO of bonds but received nothing in return. No holder in due course is alleged because there isn’t any. THAT is something that DOES bother a lot of Judges (“Why don’t they allege the status of holder in due course, which would eliminate the borrower’s defenses? who is the holder in due course?”).

Your narrative should address directly the “free house” analysis used by the banks. There is no such thing. Even in states like Florida with its extensive homestead protection, the real creditor is entitled to a judgment on the debt even if the note and mortgage were fabricated or defective. Foreclosure is not an option until the homestead exemption is lifted but whenever someone wants to sell their home they will encounter the Judgment that must be paid with interest at statutory rates. So there is no free house, especially in most other states where the homestead exemption is virtually nothing.

But you still must issue a narrative that explains why these banks with brands and reputations dating back 150 years would come to court and allege they are a creditor or have rights to sue on behalf of a creditor. The answer is the money. They make money doing it. They are able to do it without the real lenders knowing about the status of the loan or that it is in foreclosure or could be modified and they recover servicer advances as well as making a profit on “REO” property that should be in the name of the Trust or the investors but usually doesn’t work out that way. It’s the perfect crime. Imagine stealing money from a safe. You would be caught right? But not if you had a signed document that said the owner of the safe can’t look inside. That is what the PSA and Prospectus do.

The plain fact is that the originator whose name was put on the note and mortgage and other settlement documents was never the lender and simply used the money of the investors without regard to the existence of the trust. Only they have the proof and if they could prove otherwise they would have done so in the thousands of cases where I have asserted these issues. instead they enter into “too good to be true” settlement agreements under strict confidentiality — specifically naming me as one person to whom no information can be given.

Ask anyone who represents conventional banks in conventional loans. If they were foreclosing, as I have done for many banks and other entities, if the defendant denied the transaction, I would have gladly put an end to their nonsense by showing that each element of the transaction was satisfied. End of case. The only reason I would extend litigation time into years and fighting or avoiding the true narrative is because the narrative I alleged in the foreclosure case is not as strong as I would need to say “case over.” In fact, if I learned that there were no transactions as alleged by the bank I represented, I would be ethically bound to resign, withdraw and potentially inform the Court that my reasons consist of the code of professional conduct.

That is why this fight is only half over. Eventually the true narrative will get into the mainstream and lawyers who want to protect their license to practice law will be careful about what they allege and what they try to prove. In the meantime, lawyers should challenge the presumptions in the burden of proof on the grounds that the denial requires the bank or servicer to prove the loan and every transaction upon which they rely, on the basis that the information and data that would prove or disprove defendant’s narrative of the case is solely within their care custody and control, and that it does make a difference because the way they did it, there is no possible direct foreclosure although a judgment lien could be converted into a foreclosure if the laws allowed it. Only this would remove the servicer from claiming authority as a servicer, and remove the trustee from claiming that the trust owns anything except foreclosed property.

Only then will the Pension funds the homeowners be able to connect, when they realize that the trust and the trust provisions were ignored, requiring a new infrastructure excluding the old servicers and putting in servicers, receivers, trustees on deed of trust that are actually empowered to act based upon policy set by the Pension funds and the homeowners. When that happens foreclosures will grind to a virtual halt, the economy will be stimulated beyond anything in the past, and the recovery from the depression caused by the banks will be over.

8 Responses

  1. Long live Neil Garfield. Be Strong and Courageous

  2. In my case they were in such a rush to get their unclean hands on my house they left a trail of bad documents and I found em.and I’m using them. Remember that rope that they hang themselves with. It’s true.they know too.

  3. You are so right lots of racketeering. Check out FDCPA lawsuits on line. Lots of them.

  4. Gotta add, louise I’m really struggling with “debt collectors” foreclosing, particularly in the paperwork I’ve seen. The violations go from A to Z…contract, RICO, Libor, GAAP, accounting in general, perjury, ethics violations, hearsay, etc….the list is long! In my non-lawyer opinion.

  5. Wholeheartedly agree with you UKG, they do not have the documents to prove anything just like the debt collectors violating the FDCPA.

  6. Exactly UKG! They step down because you nailed them, not because they have a concious. Because if they did they would have verified the facts before filing. Next Please.

  7. In fact, if I learned that there were no transactions as alleged by the bank I represented, I would be ethically bound to resign, withdraw and potentially inform the Court that my reasons consist of the code of professional conduct.
    It called “racketeering”.

  8. They can’t prove anything. Not without committing forgery.
    You guys have been chasing your tails here the last 5 years.

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