Livinglies's Weblog

There are judges across the land who are asking questions that are extremely uncomfortable for lawyers who are seeking protection under litigation immunity.

In one specific case there was an exchange in court between the attorney that was pursuing Foreclosure and the judge. The challenge presented by the homeowner was simply that the attorney did not represent any party with an interest in the outcome of the litigation.

So the judge asked the attorney to identify his client. The Foreclosure attorney replied “the plaintiff.”

The judge responded with “that’s not good enough. Please name the party who is your client.”

The foreclosure attorney stammered a bit and then said “Ocwen loan servicing.” Needless to say, Ocwen was not the plaintiff and could not be the plaintiff under any scenario.

The judge concluded that the attorney did not represent any party who was named as a plaintiff in the Foreclosure lawsuit. In that particular case, the foreclosure attorney was not referred for Bar discipline or to the prosecutor’s office for intentionally lying to a sitting judge. But that could happen.

I have had more than a few cases where when pressed, the attorney who made an appearance on behalf of the pursuit of Foreclosure finally admitted that their only client was Ocwen loan servicing.

That issue is settled law. Even if Ocwen was performing the functions that one normally attributed to a servicer, it could not be the claimant in a bankruptcy action nor the plaintiff in a foreclosure lawsuit. It also cannot be the beneficiary in a non-judicial foreclosure.

In the Connecticut case that I made reference to above, the foreclosure lawyer had inserted Deutsche Bank national trust company, as trustee for a trust. The truth was, as admitted by the lawyer, that Deutsche Bank national trust company had never hired that lawyer and I never agreed to allow that lawyer to make an appearance on behalf of Deutsche Bank national trust company.

This is standard operating procedure used by Foreclosure players. The retainer for legal services is executed between a law firm and a company that is named as a “servicer.” The law firm receives electronic instructions from an unknown source including all the materials necessary to initiate foreclosure proceedings. That includes the name that should be inserted in the lawsuit as the plaintiff.

If the foreclosure lawyer wins the case and the property is sold at auction and then liquidated, the proceeds of the auction or liquidation goes to unknown parties who were never mentioned during the foreclosure process. Those unknown parties are in virtually all cases intermediaries our conduit for the investment banks. In the case stated above, Deutsche Bank national trust company would never see a dime and never has seen any money from any payment by any homeowner or from the sale of any property owned by a homeowner.

I’m not going to try to convince you that this scenario is true or correct. But I have good grounds and hundreds of cases to support the premise that assuming this scenario is true in virtually all Foreclosures conducted in this country, homeowners who challenge the process with persistence and aggression, will most often either prevail or settle on highly favorable terms.

Filed under: foreclosure |