Thursdays LIVE! Click in to the Neil Garfield Show
Call in at (347) 850-1260, 6pm Eastern Thursdays
In the Case of OBDUSKEY v. MCCARTHY & HOLTHUS LLP, decided yesterday, March 20, 2019, a unanimous but ambivalent Supreme Court of the United States decided that lawyers are not debt collectors in non judicial states. In doing so, they undermined the due diligence requirement in the bar rules of every jurisdiction that require a lawyer to perform enough investigation to assure that the client is real and has at least an arguable claim.
Several justices opined that Congress should clear up the ambiguity that they perceived in the law. The case was seen as fundamental challenge to the non judicial statutory scheme adopted in 32 states in which property subject to a Deed of Trust could be sold privately without judicial process. We have called out the problem as a substantive and procedural one.
Substantively, most such sales are based upon false premises, i.e., that the claimant is a beneficiary which in simple language means that it is the owner of the debt.
Procedurally, the flaw in the nonjudicial scheme is that a challenge to the foreclosure puts the burden of proof on the borrower who has no direct knowledge of the foundation and can only interpret what is available.
This is different from the burden in judicial states that conform with due process — the claimant must establish it possesses a claim for relief that is founded on ownership of the debt, and that the proceeds of sale would go to pay the debt. While judicial states are still struggling with the fact that the sale proceeds are not going to pay the debt, in nonjudicial environments the question can hardly even come up.
Combined with litigation privilege the decision yesterday insulates lawyers from any liability for pursuing claims that they knew or should have known were legally corrupt.
What is more important and least understood is that the virtual immunity granted to lawyers provides banks with an impenetrable vehicle through which they continue to commit widespread fraud — to the detriment of borrowers, investors, taxpayers, the financial system and society at large.
Filed under: foreclosure |
In Colorado foreclosure process the creditor doesn’t have to prove that it has a legitimate claim because the court relies on conclusive presumptions instead of rebuttable presumptions that are statutory and the judge’s do not require the creditor to prove that it is a holder in due course.
Thousand of homeowners spend their lifetime savings believing that the courts are impartial and never get discovery or a trial before their property is summarily taken in the Rule 120 foreclosure followed by an eviction although the are allowed to go to “any court of competent jurisdiction which is a fruitless endeavor.
Colorado however, has home rule cities which have the ability to pass ordinances such as the one have proposed.
The most famous case defining the scope of the substantive powers conferred upon municipalities by the home rule amendment is City & County of Denver v. Hallett. “[Article XX] was intended to confer not only the powers specially mentioned, but to bestow upon the people of Denver [as a home rule city] every power possessed by the Legislature in the making of a charter for Denver.” 34 Colo. 393, 399; 83 Pac. 1066, 1068 (1905).
Under this broad standard, the test for determining the validity of action taken by a city is simply whether or not the legislature could have authorized the action taken. City & County of Denver v. Board of County Comm’rs, 113 Colo. 150, 156(1945); See, e.g., Fishel v. City & County of Denver, 106 Colo. 576, 108 P.2d 236 (1940); City & County of Denver v. Henry, 95 Colo. 582, 38 P.2d 895 (1934);
Accordingly, the City and County of Denver can enact an ordinance that within the City and County of Denver, all courts presiding over foreclosures require creditors to prove that they own the note in order to foreclose. As the Supreme Court said in. Goodwin v. Dist. Court,779 P2d 837 Colo 1989) which required that the Real Party in Interest defense must be considered by the court, and that once raised the burden devolves upon the party seeking the order of sale to show that he or she is the real party.
The City and County of Denver’s ordinance should require that the burden devolves on the creditor regardless of whether the Real Party in Interest defense is raised or not, and that the court has no discretion to disallow the defense nor discretion not to require the creditor to prove that it is a holder in due course. It also is compliant with Goodwin v. Dist. Court ,779 P2d 837 Colo 1989) and Myrick vs Garcia, 332 P2d 900,903 (1958) holding that if rebutted, submission of the note was prima facie evidence of holder in due course, and “ownership” must be proved at trial.
And hold our government accountable who are beholden to the banks — who contribute to campaigns. All in control.
Forget Russia. There should be a special investigation into WHO covered up the financial fraud. WHO allowed the cover up. Judges abiding by cover up.
Wake up Trump. Sitting in your lap. Do something. Don’t just sit there and let it continue. Let it GO!!!! Forward!!!
Judges will always protect corrupt banks and their lawyers, nothing new.Its time to hold JUDGES liable for this mess
The League of Fraudulently Dispossessed Homeowners has a sealed lawsuit in Federal Court of Claims . http://www.disleague.com/
CFPB did not help — their amicus link is —
https://files.consumerfinance.gov/f/documents/bcfp_amicus_obduskey-v-mcCarthy-holthus-llp_2018-11.pdf
Carole Meier — I have never seen trustees subject to FDCPA — not even in judicial states. They will claim collecting for their own account.
To fix the foreclosure mess in the USA it is going to take the HONEST lawyers to gang up together against the dishonest ones and the Bars of the states maybe too, to require the law to be administered equally to all, and the fraud to be exposed no matter WHO goes down as a result. Otherwise, as it stands, our barristers of this country who are our so-called “Officers of the Court” are going to remain “Officers in Support of Fraud, Crime and Lawlessness in Our Courts” along with the crooked judges who are upholding, aiding and abetting this foreclosure fraud scheme. You would be surprised at how many of our law-abiding citizens and not just the criminals now have a total, complete contempt for our lawyers, judges, legal officials, courts and the entire legal system as a whole in our country, due mainly to how the foreclosure fraud has been handled and forced down our citizens’ throats.
.
Excellent timing Neil! Looking forward to your analysis.
Readers who would like to see more references on this subject, a bunch are consolidated here: http://tinyurl.com/yyyzhxjp
It appears, from the SCOTUS justices, that the FDCPA was set up to not conflict with non judicial (easy fraud) state foreclosures. One word – the justices focused on – “ALSO.” Federal law is supposed to preempt state law. But the word “ALSO, it was concluded, allows the non judicial states foreclosure attorneys to carry on without FDCPA violation concern. Was this stupidity on part of the drafters of changes to the FDCPA? Or deliberate? .
Where are the non judicial state representatives that allowed this to happen? In hiding?
Well, the Lawyers may be protected, but what about their Trustee?
Quality Loan Services chose to ignore all documents that we sent to them over the years. They never responded to any disputes or other proof we offered to defend our position. It was clear from the start that they would only represent the person paying their bill. I wish I could file a complaint or even better file a class action suit to stop them from harming any other homeowner in this way and for all the emotional and financial harm that was caused because of their predatory actions.
Just another example of the BAR insulating it’s own. I guess the Powers legislated to the CFPB in Dodd/Frank really were nothing but whitewash… smoke and mirrors for the sheeple so the Legal Elite’s can maintain order and control of the masses because… well… because they’ve shown us all that they can do it so well…. for them. As the Birster v. American Home Mortgage Services, Inc., clearly states… start at page 8
https://files.consumerfinance.gov/f/201112_CFPB_Birster-amicus-brief.pdf