Tonight! How Foreclosure Defense Attorneys are Winning Cases: Case Study in Florida 6PM EDT 3PM PDT — with a West Coast Perspective

Thursdays LIVE! Click in to the WEST COAST Neil Garfield Show

with Charles Marshall and Bill Paatalo

Or call in at (347) 850-1260, 6pm Eastern Thursdays

Tonight we discuss the strategies and reasons for homeowners to win foreclosure cases.

Specifically we look at yet another case where a homeowner did win, hands down game over.


see also

see also

There is one simple fact about the statistics regarding the likelihood of success in contesting foreclosures. The statistics used by the banks and the courts and the media are all based upon all foreclosures 96% of which are completely uncontested. They are uncontested because homeowners don’t understand their rights and they don’t understand that they don’t deserve that treatment morally, ethically or legally.

When you break down the 4% (contested cases) you find that 60% of homeowners give up when they are presented with virtually ANY modification no matter how stupid and in signing that document they create more obstacles to contesting the foreclosure in the future.

These homeowners, usually unrepresented or poorly represented, don’t realize that by signing the modification document they have in fact created a new loan, stiffing the investors and creating revenue for the servicer and the investment bank that started the securitization scheme. The don’t realize because they have never been given the facts.

So that leaves 2.4% of all foreclosures. So far the “win” rate for the banks is 97.6%.

Of the remaining 2.4% about half settle with favorable results from the perspective of the homeowner. They are still stiffing the investors without knowing it and they are giving up or releasing a number of rights that could include damages for filing a false foreclosure claim.

As for stiffing the investors I’ll summarize by saying that in each foreclosure or modification or settlement the result is revenue distributed to the servicer, the Master Servicer (lead underwriting investment bank) and various other parties.

If it is foreclosure, the proceeds of sale to a third party don’t go to investors who put up the money but never got title to the debt, note or mortgage. Instead the proceeds are claimed as “servicer advances” or at the last minute when nobody is looking the mortgage loan schedule is amended such that the foreclosed loan is taken out and a new, possibly performing loan is put in. That’s when you see an assignment of the credit bid to a conduit for the investment bank.

Either way the entire proceeds come to the investment bank and affiliates as pure revenue.

The other half of the 2.4% go to trial. Of those only 50% are seriously contested, by aggressive discovery, objections at trial and good cross examinations. So the banks win 1.2% of those boosting their winning “statistics” from 97.6% to 98.8% — all due to improper defenses, procedures and mistakes plus a fair amount of court bias.

Of the remaining 1.2% that are seriously contested the homeowners win 65% of those cases. So that means the banks win another .42% bringing their total WIN statistics to 99.3% and the total WIN statistics for homeowners as either .7% if you just include the judgments for the homeowners or 1.9% if you include favorable settlements.

If you now re-read this post you will see that the figures could be vastly different if all foreclosures were seriously contested and that court bias would be bending the other way if the foreclosures were strongly contested. In plain language the homeowners could be winning at least 68% of foreclosure cases and the resulting softening of court bias could easily raise that to 95%.

5 Responses

  1. Standing issue is bogus. Generated from Livonia — a unrelated case.

  2. And… did Florida Supreme Court change it’s decision on Nationstar Mortgage LLC v. Glass? Or, are Defendants still able to be awarded attorney fees? Thank you all!

  3. What damages can be awarded by the Florida Courts, when a Defendant wins a case for Lack of Standing?

  4. The Indiana Court of Appeals reversed judgment awarded to a bank against a former homeowner who filed for bankruptcy, finding that because the man had been discharged of any liability on the mortgage, the judgment was in error.

    After Michael Mannion filed for bankruptcy on a residence he owned in Kokomo, he received a discharge from the mortgage debt and stopped making payments on the mortgage. During the next decade, Mannion faced three foreclosure actions brought against him by predecessors in interest, two of which were dismissed.

    The third, brought by Wilmington Savings Fund Society FSB, survived the Howard Superior Court after Wilmington claimed that its foreclosure action was based upon a default by Mannion that occurred after the dismissal of the first foreclosure action, and was therefore not barred by res judicata. The trial court granted Wilmington’s motion for summary judgment and denied Mannion’s, also entering a separate in rem summary judgment and decree of foreclosure in favor of Wilmington.

    The Indiana Court of Appeals reversed, finding the trial court erred in awarding summary judgment to Wilmington. The appellate court first noted that it was not a novel concept that because Mannion had received discharge in bankruptcy before the initiation of the first foreclosure, he was no longer personally liable for the debt secured by the mortgage.

    “Wilmington’s assertion ignores the undisputed fact that Mannion’s personal liability under the mortgage had been discharged in bankruptcy,” Senior Judge John Sharpnack wrote. “The essentials of the controversy are the same in both foreclosure actions: the debt is unpaid; Mannion is discharged from liability for the debt; the creditor can foreclose on the property; and the creditor is seeking an in rem judgment. Thus, both foreclosure actions were based on the nonpayment of the mortgage due to the mortgagor’s discharge in bankruptcy.”

    Additionally, the appellate court pointed out in Michael J Mannion v. Wilmington Savings Fund Society FSB,19A-MF-00446, that different amounts alleged in each of the foreclosure actions were of no consequence.

    “Due to the creditors’ lack of success in their attempts to foreclose, the litigation has spanned many years, thus increasing the amount of the debt; this does not create a new and independent basis for foreclosure,” the panel wrote.

    “Finally, Wilmington includes a public policy argument that Mannion should not receive the property ‘free and clear’ of its lien. However, where, as here, the creditor created the situation as a direct result of its failure to prosecute, and the homeowner obtained a judgment on the merits, the judgment should have its full res judicata effect in accordance with res judicata principles.”

    The appellate court therefore remanded with instructions for judgment to be entered in Mannion’s favor.

  5. This is very important and good Neil. Especially about the modifications.
    Will add though — you know I do that — investors did not put up money to the borrowers — they do not EVER lend or fund borrowers directly. . The investors invested in the security underwriters garbage. Was not the loans that were “garbage” as the media and settlements would like us to believe. It was the securitization that was “garbage.”

    Thank you — have a good show.

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