Required Reading for Free Forensic Loan Examiners Seminar on August 2, 2019

see FREE SEMINAR FOR FORENSIC LOAN AUDITORS

The difference between merely writing a report and actually getting its contents admitted into evidence — and then to get a court to give it enough weight to turn the tide in findings of fact — is monumental. Anyone can write a report. Whether it is admissible and whether it is credible or convincing are entirely different matters.

This is the issue I have struggled with for years. And for the past 15 years, both pro se litigants and lawyers have struggled vainly to get such reports admitted into evidence without the live testimony of a credible witness or who can establish their bona fides. The homeowner can’t testify about what is int ehr report because (a) they didn’t do the investigation and research and (b) they don’t fully understand its contents.

This article deals with who is really an “expert” and when can they testify and why should their testimony be given any weight, even if admitted into evidence,

FLORIDA SPONTANEOUSLY COMBUSTS ON EXPERT WITNESS RULES:

Daubert v Frye expert witness testimony. Each state is different and states may differ from the Federal rule.
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Florida see Florida Bar News July 2019 volume 46 number 7
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“On its own authority, The Florida Supreme Court has revisited and reversed its 2017 Opinion and approved using the Daubert standard in the procedural evidence rules to qualify expert testimony and witnesses in trials.”
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Thus general acceptance is not sufficient in and of itself. GAAP is not sufficient in and of itself although the loophole is probably that testimony providing foundation for introducing GAAP principles  and then factually applying them to the facts at hand might be admissible anyway simply as a fact witness giving factual testimony without opinion, even if an opinion is implied.
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The new rule under Daubert in Florida makes it more difficult to predict whether at all the testimony from a witness will be admissible and suggest that the practitioner might try to seek a ruling a provoke a fight over that before trial, since it could have a devastating impact on the trial strategy if the witness is declared incompetent or unable to testify.
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Disclosure of the expert witness is an essential threshold to getting their testimony admitted into evidence. And of course judges might take the safe path of admitting the testimony and then ignoring it, in terms of giving it weight in their final decision.
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The new rule in Florida also means that introduction of a witness who is being asked to testify in a foreclosure trial will be subject to the individual perception of the judge using unenumerated Daubert tests but which include “for example”
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  • Whether the expert’s technique or theory has been tested and  to what result
  • Whether the technique has been subjected to peer review or publication
  • The known or potential rate of error
  • The existence and maintenance of standards or controls
  • The Frye rule — general acceptance
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What all of this means, is that expert testimony may simply be reduced to a wild card in Florida especially if the designated expert does not possess generally accepted professional credentials (advanced academic degree and professional licensing).
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But for forensic auditors the fact remains that their testimony is really only required to provide foundation for the introduction of their report and reading excerpts from the report. Whether the testimony is persuasive or will be given any weight by the trier of fact depends entirely upon the the use of demonstrative exhibits (like posters) and the credibility of the witness.
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So the credentials of such a witness are not so important as to exclude him or her from performing forensic auditing of loan accounts — but credentials remain important in terms of admissibility, credibility and weight of the testimony as evidence.
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Having experience, as some of you already do, as a licensed Private Investigator, or “certified” Loan auditor will help but probably only if the witness can state that they have performed many such investigations or audits and can point to findings of fact, in prior court cases, that conform to the evidence presented by the witness.
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And their testimony probably won’t be given much weight unless they can establish — or some other witness can establish — that what they were looking for and how they were looking were methods that a re in general acceptance.
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To that extent the testimony of an accountant about GAAP — Generally Accepted Accounting Principles —— as promulgated by the Financial Accounting Standards Board, whose statements are used as part of the rules and regulations of the SEC and other Federal and State agencies would be quite helpful as corroboration for the witness who performed the investigation unless the accountant (CPA) performed the investigation himself or herself.
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Although there are many factors to consider when vetting an expert, the ultimate question is whether the expert’s testimony will be admissible in court. If the court deems an expert’s testimony inadmissible, especially suddenly and in the middle of trial, it can have a disastrous effect on the outcome of the case. However, the governing standards of expert witness admissibility are not uniform throughout the United States.
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The two major governing standards can be found in two seminal cases – a D.C. Circuit case, Frye v. United States, 293 F. 1013 (D.C. Cir. 1923), and a U.S. Supreme Court decision, Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). The federal court system exclusively follows Daubert while state courts are divided between the two. Interestingly, each state has taken on its own interpretation of these two benchmark cases, making the admissibility of expert testimony more variable between jurisdictions. Prior to trial – and ideally, prior to retaining your expert – it is critical to have a working understanding of these standards, their specific jurisdictional variations, and any recent, applicable case law.
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The Frye Standard: General Acceptance in the [Scientific] Community. 
The general premise in Frye v. United States, 293 F. 1013 (D.C. Cir. 1923) states that an expert opinion is admissible if the scientific technique on which the opinion is based is “generally accepted” as reliable in the relevant scientific community. In Frye, the Circuit affirmed the trial court’s decision to expert testimony concerning a lie detector test. The test, which was based on changes in systolic blood pressure, was considered to have “not yet gained such standing and scientific recognition among physiological and psychological authorities.”
[Generally accepted Accounting Principles (GAAP) would automatically qualify by definition. ]
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The Daubert Standard: Enumerated Factors to Consider

In Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), the Supreme Court effectively overruled Frye in federal courts, holding that the case law was inconsistent with the applicable evidentiary rules, namely, Rule 702 of the Federal Rules of Evidence. In Daubert, the Court held that the twin standards of Rule 702 – relevance and reliability – are incompatible with the stricter “general acceptance” test.
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The Court emphasized the importance of a trial judge’s “gatekeeping responsibility” when admitting expert testimony and listed a non-exhaustive list of factors to consider such as: 1) whether the expert’s technique or theory can tested and assessed for reliability, 2) whether the technique or theory has been subject to peer review and publication, 3) the known or potential rate of error of the technique or theory, 4) the existence and maintenance of standards and controls, and 5) whether the technique or theory has been generally accepted in the scientific community.
Under this new standard, the Court encouraged a more liberal approach to admitting expert testimony, stressing the importance of subjecting witnesses to vigorous cross-examinationinstead. The decision in Daubert to relax the admissibility standards of expert testimony was further expounded by its progeny. In General Electric Co. v. Joiner, 522 U.S. 136 (1997), the Court emphasized the importance of expert methodology, opposed to focusing solely on the conclusory opinion, finding that “conclusions and methodology are not entirely distinct from one another.”

3 Responses

  1. It is not about judge puppets – this is about U.S. Government and what has been concealed from all – including the U.S. Government itself. We, the people, are the U.S. Government.

    Judges petrified to go against the U.S. Government wrongful conclusions. The government should NEVER have bailed out the banks WITHOUT investigation. No investigations occurred. U.S. Government was afraid of financial meltdown. That is the LIE we live. There would have been no meltdown had the government spoke the truth, and we would not have the great inequities that we have today. Markets would have reflected was is true and real. Markets are fake, and whether it happens tomorrow, next month, next year, or next couple of years — it will happen. Cannot be sustained. Many will recall that the Great Depression began with global economic crisis. The U.S. does not live in a bubble. Not anymore.

    So the judges — they remain in la la land. Afraid to cry “WOLF” — wolf being the U.S. Government who covered for the banks. Afraid to go against them. Afraid to open Pandora’s box.

    And, so we sit and wait, this 4Th of July weekend holiday, for the truth to come. Impossible for it to never come. Impossible. Yet, to each and every representative running — dems and reps — get your act together. Politics is not would it should be.

    We may not get houses back, but we will get dignity back. I am confident that it will happen. Dignity is demanded. We will get there, and, hopefully, with restitution. Demand accountability from your representatives. All part of concealing. NOT acceptable. Return the Government from the banks – to the people. .

    Thanks.

  2. Damn the Truth! Our Judges KNOW what’s right! Or at least they want to keep that designation all for themselves.

  3. Homeowner wins jury award in Wisconsin, Judge overturns. COA affirms. We’re doomed.
    Why get expert testimony?

    https://scholar.google.com/scholar_case?case=10563950078256839580&hl=en&lr=lang_en&as_sdt=4,50&as_vis=1&oi=scholaralrt

    As to the first issue, we conclude that the circuit court properly overturned the jury’s verdict on the duty of good faith and fair dealing claim. In doing so, we explain that the Ayreses have not shown that a contract existed between them and Wilmington under which Wilmington had a duty of good faith and fair dealing with respect to the Ayreses’ loan modification application.

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