Defending Foreclosure is Practice Not Theory: Discovery is the Key

I’m not sure why there are people who are calling my approach theoretical. My focus is strictly practical — using the rules of civil procedure to expose the truth of the matter asserted. Specifically, the end result should be and most often is that the opposition either dismisses the claim, or the court bars them from proceeding when the are unable or unwilling to answer interrogatories and requests to produce.

Based upon what some people are writing to me I think that they are either skipping discovery entirely or they are using a shotgun approach in discovery. The questions and requests must be properly worded and directed to the only thing that is in dispute — whether the claimant has suffered any financial injury as a result of the admitted nonpayment on an admittedly existing loan.

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If you think the approach is theoretical you are misapprehending the simple strategy that I propose. The issue is not complicated: does the claimant have a right to foreclose because they are seeking restitution of an unpaid debt owed to the claimant? If the answer is no, which is usually the case in loans subject to claims of securitization, then the reason is that the claimant doesn’t own the debt. The rest of the allegations are true — the existence of a loan, the nonpayment etc.

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The theory behind the approach is complex but that is not something that homeowners can or should try to prove. It is merely an anchor for the strategy so the lawyer does not lose his or her way.
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Documents will all say things that would lead to the opposite conclusions. But the actual facts are opposite. It is the burden of the homeowner in foreclosure to ask questions and demand production of documents that support the claim that the debt is owed to the claimant because the claimant owns the debt and has suffered injury from nonpayment (default).
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Once the homeowner establishes that the opposition is unwilling or unable to respond to those questions and demands, the legal presumptions arising from what the documents state can be and usually are undermined — even raising the inference or presumption that the claim is false.
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But even if the inference or presumption in favor of the homeowner is not raised, the opposition can be prevented from introducing any evidence of ownership of the debt because they failed to answer discovery, failed to obey court orders requiring their answer and then were in contempt of court. Judges are very willing to impose sanctions on pleading and even sanctions preventing the claimant form introducing evidence intended to support the claim.
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So my approach is far from theoretical. It is practical and understandable if you understand the rules of civil procedure.

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PRACTICE NOTE: For any of this to work, you must do the work. File discovery, file motion to compel, file motion for sanctions and file motion in limine. In a case that is entirely about the debt most judges (not all) will have no problem with requiring answers to discovery directed at information about the debt.
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The confusion in the courts and in people’s minds occurs when they assume that the proceedings are actually a foreclosure simply because the claimant says so. It is not a foreclosure unless the action is for restitution of an unpaid debt. I use the word restitution because foreclosure is an action in a court of equity.
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And there are thousands of cases finding ways to bend the law in favor of claimants who say they are foreclosing because they are focusing on (a) the documents which are mostly fabricated and (b) more importantly, an assumption that is unfounded and untrue. The biggest problem is the belief of attorneys and their clients that the action is actually a foreclosure. It isn’t.
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So you get cases that say that even if things are “irregular”, they will affirm the decision because in the end end there is no real foul and no real harm. It is the burden of the homeowner to disabuse them  of this notion at least in part and make them face the fact that there is no evidence to support any claim on behalf of the claimant or any party that is mysteriously represented by the claimant.
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You will always get this result when you focus on the documents instead of the facts. The underlying assumption in all of these cases is that the case is a foreclosure — which means that it is an action for restitution of an unpaid debt. If that is true then the court is justified in bending rules in favor of the claimant because ultimately the proceeds of the foreclosure sale will go to pay off the debt.
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That is why it is essential that the homeowner attack the ownership of the debt. Because if the claimant doesn’t own it then the action is not for restitution of an unpaid debt. A debt is not owned without paying for it. But despite law to the contrary, the courts make an additional presumption that even if the claimant is not “technically” entitled to foreclose, the money from the forced sale of the property will still go to some party or parties that have  paid value for the debt and are injured by nonpayment. This assumption is without any foundation of facts and is in fact erroneous.
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The money is going into the pocket of those players involved in the “foreclosure” and they receive it as revenue. However the revenue part of the scheme while implied should probably not be part of the defense narrative because it sounds like conspiracy theory and lacks “credibility” even though it is true.

2 Responses

  1. The crime is coming from the top.

    In my situation, HUD’s Senior VP Michael Drayne lied to Michigan Senator Peters about my loan, , and its proven by a fake Trustee Bank of New York.

    On Dec 11th BONY finally responded to my demands for disclosure and claimed that PennyMac/(Stanford Kurland/David Spector’s part of Countyrwide) is the Issuer of securities insured by Ginnie Mae.

    Which completely contradicts with Drayne’s respond to Sen. Peters that the Issuer was Caliber Home Loan, Inc (Chris Mozilo/Anderson’s part of Countyrwide).

    All parties cannot provide ANY basic information about the Trust which holds my loan as a security.

    Everyone lies and their lies conflict with each other.

    HUD is loaded with sophisticated securities fraudsters who must be in jail at least 10 years ago.

    Michael Drayne, worked 18 years for Chevy Chase bank who defrauded investors and insurers from more than 5 BILLION.

    In 2011 Chevy Chase was a defendant in at least 2 large securities fraud cases. Its CEO Drayne was hired by HUD to ….supervise “Issuers” – who are another bundle of securities fraudsters Countrywide Financial !!! (Speaking about foxes in the hen houses)

    Michael Bright, former Ginnie Mae’s President who stepped down last year, was Countrywide’ trader and CEO of PennyMac/Blackrock who massively buy HUD’s loans, in violation of all laws.

    Maren Kasper, who stepped down as Ginnie Mae’President in October 2019 worked for a company owned by Blackstone, another vulture equity fund who massively buys loans from HUD and filed fraudulent foreclosures. Blackstone controls Bayview Loan Servicing LLC, both under control from Bank of America

    MERS Vice President Kurt Pfotenhauer is also a Vice President of First American Title (who sells fake Title Insurance policies in violation of all applicable laws, which FAM has no intention to adhere.

    Pfotenhauer for 5 years worked for OR Senator Gordon Smith, whom he “donated” over $14,000.

    Oregon invested over $1 billion in Lone Star/Caliber and BlackRock/PennyMac, despite all evidence of fraud and all objections from local watchdogs organizations .

    Pfotenhauer is an active lobbyist for banks’ interests in the Senate, and helped to “kill” several important regulations.

    Pfotenhauer’s wife Nancy was a lobbyist for McCain; and also actively lobbied for KOCH Industries She built and managed the DC team’s lobbying operation, PAC and all legislative and regulatory strategies in addition to jointly running KII’s government affairs operations globally. The largest privately held company in the country, KII’s interests fell heavily in the energy, environment, transportation and tax fields. She ran multimillion-dollar issue campaigns at the federal and state level.

    Now Sen. Smith and Nancy Pfotenhauer work in media industry, no surprise we do not hear anything about Big Banks’ fraud.

  2. This is all true Neil, but discovery is not easily granted – at least not for what one really needs.

    People fell into a trap. Modifications were set up to prey upon people desperate, rightfully, to save their home. People don’t ask the fundamental question — “where is the money going?” – even when they are paying.

    If we questioned “title,” and modifications, foreclosures could be much more easily challenged in any court. For those that are paying, and don’t know why they have a “debt collector,” title to property is permanently destroyed. Paying is also destroying the truth. As I have said – paying is the one big mistake I have made (and I never had a modification). Attorneys tell me to stop paying and foreclose. But in my state, you will lose if you don’t pay. I have equity and can’t risk foreclosure. Nevertheless, standing up to the truth is something I have felt compelled to do – for all. .

    The documents are fake. There is no one to enforce correction. Even if you win at foreclosure – the task of document correction is still in front of you. However, the fraud has been so covered-up that no one will ever allow document correction, because the consequence to the economy is too great.

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