Class Actions for Wrongful Foreclosure?

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This is not a legal opinion on any individual case. It is for general information only. Get a lawyer.


When I wrote about the class actions my opinion was based upon analysis I had done several years back. I am no expert on class action, but I had previously come to the conclusion that a class action, while theoretically viable, would be difficult to certify. Upon reflection that analysis could be wrong.

As a short preface, I will outline my premise.

My factual premise is that Wall Street brokers acting as investment banks created fictitious entities (Trusts). The trust instrument was called a pooling and servicing agreement (PSA). from that trust instrument various parties had powers and authority to do certain things once a loan was admitted into the trust pool of mortgage loans. If the trust was in fact never funded, then the trust entity could not have purchased the loan as set forth in the PSA. It was the “perfect crime.” They were doing IPO’s for entities that didn’t actually exist and where the “Trustee” had contracted away any right to review or even inquire about the business of the Trust, which of course did not exist.

The facts are that the trusts were never funded, the “trustee” had no powers, the trust had no res, and none of the trusts actually acquired any loan through purchase because they lacked the financial resources to do so. The Brokers on Wall Street issued what appeared to be mortgage backed securities that were neither mortgage backed nor securities.

This caused the banks — in cases where there was active litigation — to fabricate, forge, back-date, robo-sign and otherwise create the illusion that they had the right to foreclose and that they had the right to modify, which they did not. It is on this basis that many cases have been won by lawyers (including myself and Patrick Giunta).

What they were concealing was that they were selling every loan multiple times. A foreclosure sale would be a rubber stamp from a valid governmental authority that would create the illusion that the state processed the foreclosure using the fraudulent documents prepared by or for the Banks. It implied that the proper parties had brought the action, that the balance sought was a true balance, and that the creditor, servicer and homeowner were the only real parties in interest.

A foreclosure sale enabled the Banks to report to multiple buyers of the same loan that the loan failed, thus diminishing the liability of each Bank to repay all the entities, insurers, hedge fund managers etc.. And THAT is why the modification process became so convoluted and usually led to foreclosure. A modified loan keeps the Bank’s liability as a current threat on the horizon where they might owe as much as $8 million for a $200,000 “loan.”

The TARP program is illustrative of the problem created by the Wall Street banks. At first it was issued as a bailout for failing mortgages. When it was revealed that the banks actually didn’t own the mortgages. TARP was expanded to include failed mortgage bonds issued by the trusts. When it was revealed that the bonds were SOLD by the banks, not purchased by the banks, TARP’s definition was morphed into merely the vague term “troubled assets). The Maiden Lane entities were the trash receptacles for the worst of the toxic waste created by the Banks.

There were many ways to deal with the banks who had executed a Ponzi scheme based partly on the Madoff scheme. The problem was that the illicit siphoning of money out of the U.S. Banking system had been channeled through conduits off shore and invested in non-perishable commodities like tin, copper,zinc and even lithium. There was no time to track down the money trail. So government was actually afraid that there would not be sufficient buying of US debt and that the government would collapse from lack of funds — not that the financial system would collapse because there are 7,000 regional, community banks and credit unions that use the exact sale electronic backbone for posting electronic funds transactions as the large banks. But a deal with the large banks was easier to assure continued buying of US debt instruments.

After multiple studies (2007-2011) by universities, county recorders, and other independent organizations it was quickly determined that nearly all of the foreclosures were being done by “Strangers” to the transactions (San Francisco study) and that the original notes were being intentionally destroyed (Porter study, University of Iowa)  because they were evidence of misrepresentation as to the nature and amount of the actual loans the banks were approving, using the money of investors (pension funds etc.).

The short story from this point is that it was only by fabricating destroyed documents that the foreclosures could proceed. At one point LPS in Jacksonville actually published a menu of services and costs to fabricate and forge documents.

Up to this point I think my analysis holds — no class action will be certified under current rules. But there is one more factor that I wasn’t thinking about when someone recently posed the question to me.

All the banks entered into consent decrees with government agencies and a 50 state settlement in which the finding by the agency was present and the banks neither admitted nor denied those findings but agreed to pay billions of dollars for wrongful foreclosure and other alleged misbehavior and the Banks further agreed to perform reviews prior to initiating foreclosure. The banks used investor money for the fines and damages and they did not perform the reviews — because if they had, the foreclosure rate would have sunk like a stone.

My current thought, then is that if Federal and State Agencies, combined with Federal Agencies effectively treated the issue as a class action, then the problem of certification might be argued as having already been decided. Homeowners are getting paltry checks from the banks (without waiving any rights of action against the banks) for wrongful foreclosure. Those checks, in the hundreds of dollars, sometimes over a $1,000 could be regarded as a down payment. And since those checks emanated from what in substance were class actions by government entities with agency findings that have an arguable basis for being considered presumptively correct, the class action could be for the REST of the money which amounts to trillions of dollars.

30 Responses

  1. Even if viable, class actions won’t be available for long, thanks to your House of Representatives. See:

  2. Henry Ford was right!
    “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

    How can one; legally; and lawfully in accord with the USA constitution; pay [not discharge] a money demand for an alleged non-monetary obligation if there is no money; and; by the plaintiff’s own claim; the obligation is presumed to be non-monetary? Seems like a man’s life itself (labor, IP, etc.) becomes the payment!
    This is evil!

    NOTE: legal tender is not lawful money; rather it is trade-able for such – cite 12USC411

  3. Holy smokes… your state legislature gave the license for the bankers to commit fraud upon you! (wink-wink nod-nod… and don’t forget to add a percentage of your ill-gotten windfall to our election campaign fund)

    TO WIT:

    Paragraph 3(N) of the complaint states: “Capacity in which Plaintiff brings this foreclosure: Plaintiff is the Mortgagee under 735 ILCS 5/15-1208 [(West 2010)].” Section 15-1208 of the Foreclosure Law reads:
    “‘Mortgagee’ means (i) the holder of an indebtedness or obligee of a NON-MONETARY obligation secured by a mortgage or any person designated or authorized to act on behalf of such holder and (ii) any person claiming through a mortgagee as successor.”
    735 ILCS 5/15-1208 (West 2010).


    ya’all see that – a NON-MONETARY obligation – they know there is no money in a bankrupt government – or for use by its franchisees! Yet they take YOUR promissory note AS MONEY and negotiate it and use it into Wall Street as the basis of all the computer spreadsheet funds they allege are real!

    Henry Ford was right!
    “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

  4. Order from Appeals:

    In sum, the district court’s denial of class certification on
    an improper ground raises a question worthy of immediate
    appeal under Rule 23(f), and on the merits constitutes “an
    error best handled by a swift remand,” Allen, 358 F.3d at 470.

    Accordingly, the order of the district court is VACATED and
    the case is REMANDED for further proceedings consistent
    with this opinion.

  5. Dec 9 2015 breaking news on Class Action – Northern Dist Illinois…

    In the
    United States Court of Appeals
    For the Seventh Circuit
    No. 15-8018

    LVNV FUNDING, LLC, et al.,

    Petition for Leave to Appeal from an Order of the United States District
    Court for the Northern District of Illinois, Eastern Division.
    No. 12 C 1410 — Jorge Alonso, Judge.

    Before WOOD, Chief Judge, and FLAUM and SYKES, Circuit

    WOOD, Chief Judge. Scott McMahon, the plaintiff in this
    putative class action arising under the Fair Debt Collection
    Practices Act (FDCPA), 15 U.S.C. § 1692 et seq., sought to certify
    a class of persons in Illinois who had received misleading
    dunning letters from defendant LVNV Funding, LLC.
    (There are other defendants, but for simplicity we refer to
    them collectively as LVNV.) After the district court declined
    to certify the class, McMahon petitioned this court under
    Federal Rule of Civil Procedure 23(f) for permission to appeal
    that decision. We grant McMahon’s petition and proceed
    to the merits, because the parties’ comprehensive submissions—
    together with the record in the district court—
    suffice to decide this limited question. We conclude that the
    district court’s decision to deny class certification was erroneous
    and thus that the case must be sent back to the district
    court for further proceedings on the class allegations.
    See Pella Corp. v. Saltzman, 606 F.3d 391, 393 (7th Cir. 2010);
    Allen v. Int’l Truck & Engine Corp., 358 F.3d 469, 470 (7th Cir.
    2004); see also Johnson v. Pushpin Holdings, LLC, 748 F.3d 769,
    771 (7th Cir. 2014).
    (case link included)

  6. Good verbiage

    Sent from my iPhone


  7. A Revolving Door Helps Big Banks’ Quiet Campaign to Muscle Out Fannie and Freddie

    They won’t be happy until the small American Landowner/Homeowner is a “distant myth” and the protocol of RENTING from the largest UBER LANDLORDS; Modeled upon 10th Century Monarchical/Fascist England; is restored… Call it “Economic Eugenics”

    Seven years after their dubious lending practices helped push the United States economy to the brink of disaster, the nation’s largest banks are closing in on a long-sought goal: to unseat Fannie Mae and Freddie Mac, the mortgage finance giants, and capture ‘their’ share of the profits in the country’s $5.7 trillion home loan market.Taking place largely behind the scenes, the movement to take over the mortgage market has been propelled in part by a revolving door between Washington and Wall Street, an investigation by The New York Times has found.

    While the big banks’ effort to enshrine their vision into law has failed so far, plans to replace Fannie and Freddie — which have long supported the housing market by playing a unique role as so-called government-sponsored enterprises, or G.S.E.s — are still very much alive. The Obama administration has largely embraced the idea, and government regulators are being pushed to put crucial elements into effect.

    A review of lobbying records, legal filings, and internal emails and memorandums, as well as housing officials’ calendars and White House and Treasury visitor logs, ILLUMINATES the banks’ effort. Assisting in this work, the documents show, is a group of high-level housing finance specialists who have moved back and forth between public service and private practice in recent years…

  8. try a mass action instead of a class action
    (look it up)

  9. Reverse Purchase Transaction
    Reverse Repo
    Fed Window?

  10. Deadly Clear!
    I gave None permission to gamble with our collateral on Wallstreet.
    Reverse That!

  11. DJ, When you came in to sign the phoney mortgage and note, your identity was already stolen and all around violations of TILA, RESPA. No disclosure either of MERS and what it meant. I do not think borrowers would have purchased house if they knew a secret off-record means of transferring the mortgage and note (MERS) was going to “cloud” their titles. The wrench in the works is when they “foreclose” on someone who paid for the property up front with cash or paid it off over time and have all the receipts. That makes it very obvious that the records have been forged and fabricated.

  12. you are correct.

    when all signed mortgage, there was a ( mins number on it.) meaning it was already sold to someone for securitzation.

    but lets look at this also. does your note have a mins number on it???/ i dont think so. funny.

    Deadly Clear, on December 11, 2015 at 1:25 pm said:
    IMHO – since the securitization procurement agreements and process were pre-existing (prior to the signing of the faux mortgage documents), why wouldn’t the class action be failure to disclose the intent to create securities from the homeowners’ collateral. A Rule 10(b)5 class action? Why can’t we press the non-disclosure issue?

  13. just copy paste it , in googles it will come up first.

    NOTICE: All slip opinions and orders are subject to formal
    revision and are superseded by the advance sheets and bound
    volumes of the Official Reports. If you find a typographical
    error or other formal error, please notify the Reporter of
    Decisions, Supreme Judicial Court, John Adams Courthouse, 1
    Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-
    13-P-874 Appeals Court
    No. 13-P-874.
    Plymouth. November 4, 2015. – December 11, 2015.
    Present: Berry, Meade, & Maldonado, JJ.
    Mortgage, Foreclosure, Real estate. Real Property, Mortgage,
    Sale. Sale, Real estate. Notice, Foreclosure of mortgage.
    Practice, Civil, Retroactivity of judicial holding.
    Retroactivity of Judicial Holding.

  14. @iwantmynpv…okay, so prove up your wins for the rest of us

  15. @ iwantmynpv,

    Thank you, you handsome devil.

  16. michaelkeane just touched on the greatest point ever mentioned on LL, and it went entirely unnoticed.

  17. Bob G, I can prove it up and have on 6 different occasions. We had terrific wins for really great people who love me, and also due to fantastic research… and we are making the Courts great again.

  18. I still have my house, but you never know when the ax is going to fall.

  19. Question for Neil: How do you go about proving your conclusory allegation that the loans were sold 40X over? And all the other allegations have the trappings of a Tom Clancy novel. No judge is going to be able to follow all that stuff, and it would cost millions of dollars to prove it even if he could follow it.

    The only outfit in the country that has the resources and street cred to prove up all that stuff is the U.S. Justice Dept. And lotsa luck with that one.

  20. @ djbelanger

    Is there a link to the Mass. case? No having any luck locating it.

  21. Aurora Loan Services, LLC v. Murphy (AC 13-P-0874)

    just in from mass.

  22. I’m with Javagold! I’m in. I will never ever be made whole again but this just might help.

  23. My point is:

    The criminals, as per, Article 1, Section 8 of the Constitution, fraudulently engaged, “To borrow money on the credit of the United States”.

    They did so through the fraudulent mechanism that is the intentionally mislabeled, central bank (the Federal Reserve).

    The “credit” they borrowed, belongs to We The People; they used FRAUD to borrow it.

    They are using Fraud to conceal their current INSOLVENCY- their debts far outnumber their liabilities (google “Quadrillion”).

    The 1200 TRILLIONS OWED is equal to 10 times the GDP of every country on the planet- the currency (phony, hyper-inflated, fraudulent “Federal Reserve Notes”) is worthless…


    So, Renounce the bankers, repudiate their fraudulent currency (phony, hyper-inflated “Federal Reserve Notes”) and recapture our “Sovereignty”.

    Then pro rate delivery of “Greenbacks (a viable, currently-existing, replacement currency) as the 1200 TRILLIONS OF FRAUDULENT FEDERAL RESERVE NOTES are returned into the ownership of “We The People”.

    The banks are not the government. Presently, they believe they are above the law. Those in fraudclosure readily understand what is at stake.

    I think “The Big Short” comes out today. I hope it is time to “Short” bank stocks.

  24. Reblogged this on Deadly Clear and commented:
    IMHO – since the securitization procurement agreements and process were pre-existing (prior to the signing of the faux mortgage documents), why wouldn’t the class action be failure to disclose the intent to create securities from the homeowners’ collateral. A Rule 10(b)5 class action? Why can’t we press the non-disclosure issue?

  25. Reinventing Banking: Developments in Russia, Iceland, the UK and Ecuador
    by Ellen Brown

  26. IMHO – since the securitization procurement agreements and process were pre-existing (prior to the signing of the faux mortgage documents), why wouldn’t the class action be failure to disclose the intent to create securities from the homeowners’ collateral. A Rule 10(b)5 class action? Why can’t we press the non-disclosure issue?

  27. Article 1, Section 8 of the Constitution allows Congress, “To borrow money on the credit of the United States”.

    Article 1, Section 8, also allows Congress, “To coin money, regulate the value thereof… “ etc.


    I checked. It doesn’t say that anywhere.

    The intentionally mislabeled, “Federal Reserve” is neither, “Federal- it is owned by a group of privately-owned, international bankers; nor do those bankers support their criminal behavior through possession of ANY, “RESERVES- OUR CURRENCY IS CREATED OUT-OF-THIN-AIR…



    Back in those days it was termed: “Taxation without representation”.

    Nowadays, it may best be understood as operating under the same bogus, defiance of the Rule Of Law and I would like to sum it as follows: “Foreclosure vexation with Fraud as Causation”.

    Simply put: We the People have been had and a select, elitist minority has fomented TREASON because they believe they are above the Rule of Law.

    I think their day is coming.

    “Corporations are NOT people and I am Not, your friend”.

    Plant more acorns, We The People are gonna need more trees.

  28. I want in !!!!! Heck, you can use my fraudclosing as the lead ….

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