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In a statement made via a news release issued Wednesday about the suit, James said, “In failing to fulfill their basic responsibility, Balsamo [law firm] caused untold trauma, stress, and financial hardship to New York tenants throughout the city. With each housing case, there is far too much at stake for lawyers to cut corners. We are talking about people’s ability to have a roof over their head.”

I doubt if it comes as any real surprise to the many law firms that quickly organized to file claims against consumers — especially homeowners. But the money was just too good to turn it down.

In an article in the New York Law Journal by Jason Grant, he reveals that Attorney General Letitia James sued a law firm for “deceptive rent collection practices” and “initiating frivolous lawsuits,” according to the complaint and a news release. Although I would argue that criminal charges might apply, the AG has chosen to go the civil route.

The NY AG alleges that a Brooklyn landlord-tenant law firm runs “a high-volume debt collection and eviction litigation practice by copying and pasting assertions from an intake sheet.”

The AG attacks the practice by copying and pasting assertions from an intake sheet filled out by their clients without conducting any meaningful attorney review of cases, and have sued and even evicted tenants where there was no legal basis to do so.

I take note that the allegation is not that they copy and paste from other pleadings. All lawyers do that. They are allowing third parties to file suit using the law firm as a cover. And the reason is both plausible deniability and litigation immunity. A private party could be used for making baseless arguments and assertions in court, but a lawyer cannot.

This is a little-noticed breakthrough. For the past 20 years law firms have grown rich by getting vastly overpaid for cutting and pasting allegations, names of Plaintiffs, and citations to exhibits in foreclosures — all without ever receiving a single communication from their presumed “client.”

These law firms not only fail to perform the basic due diligence required of all lawyers, but they are also in fact paid to NOT ask questions of anyone.

When a lawsuit names U.S. Bank or Deutsch or Mellon as Plaintiff you can be virtually certain that U.S. Bank does not know anything about the lawsuit, has not authorized it, wants nothing to do with it, and won’t even acknowledge it. Try getting one of the alleged REMIC Trustees to acknowledge the settlement when a forbearance or modification is offered.

For an outlandish fee, such Banks are allowing their names to be used as Trustees but they too know full well that they are probably going to be exposed to substantial liability for renting out their names for use in illegal collections and foreclosures. The documents do everything possible to protect those banks who enter the fray not as banks or even as trustees, but as participants in a civil conspiracy.

In the documents, they are prohibited from exercising any monitoring,  knowledge, control or even ratification of acts performed in their name. All states have laws that say that no material acts governing the administration of affairs of a trust can be performed by anyone other than a trustee.

But there is no trustee authorized to administer the active affairs or property of the REMIC trust because (a) it isn’t a trust and (b) there is property or res that has been conveyed into the trust or to the named Trustee either on its own behalf or in any representative capacity. I might add (c) which is that the REMIC trusts are not just entities that are not trusts, they are also not REMIC entities and in many cases, they are not legal entities at all.

Instead of producing a Trust Agreement that according to all b basic treatises on trust, including states and common law, the Wall Street community produces a Pooling and Servicing Agreement (PSA) which is (a) not a trust agreement and (b) a statement of future intention. It does not recite that anyone ever purchased, sold, or conveyed any asset to anyone, least of all a loan account receivable.

Foreclosures brought in the name of such trustees strongly imply the existence of a REMIC trust without ever asserting the words “REMIC trust.” This is probably because it is not a Real Estate Mortgage Investment Conduit.

These implied REMIC trustees are not even allowed to inquire. nor confirm the identity and authority of a “subservicer” who is supplying the witness for trial and whose name is used for the production of documents that were fabricated for trial. Documents that did not exist and would not exist but for purposes of trial.

So back to the subjects at hand. The NY AG is correct and this could have a ripple effect throughout the country. Lawyers are not supposed to take any action on behalf of anyone before that person, or business entity becomes a client. the banks are not clients of the foreclosure mill and they won’t say that they are clients. They are not billed or contacted by the law firm before, during, or after the foreclosure action is filed and executed.

• These law firms are receiving an “intake” electronically on their desktops where it is converted without human thought into the necessary documents for initiating a foreclosure.
• There is not a single lawyer, investigator, paralegal, or clerk who has any idea whether the instruction to name U.S. Bank., N.A., is based upon any factual foundation.
• There is not a single lawyer, investigator, paralegal, or clerk who has any idea whether the instruction to plead any facts or use any exhibit is based upon any factual foundation.
• There is not a single lawyer, investigator, paralegal, or clerk who has any idea whether the institution named as REMIC Trustee or named as their client is based upon any factual foundation.

From the article, quoting from the NY AG complaint:

“Law firms and attorneys that send rent demands or file non-payment proceedings under their name are representing that an attorney was meaningfully involved in assessing the legal merits of the claims,” states the complaint, which is signed by two members of the Housing Protection Unit of the Attorney General’s Office.

“Such a representation is false or misleading if, in fact, there has been only superficial, ministerial attorney involvement,” the complaint further says. “Likewise, when attorneys sign their names on court papers they represent to the litigants and the court that what they allege is true and based on a reasonable inquiry.”

The suit brings seven causes of actions and alleges that actions taken for years by the boutique firm in its “housing court practice” have violated state Executive Law, the Federal Debt Collection Practices Act, and state General Business Law.

Foreclosure defense lawyers should take note of this. This is not just bad practice. It is an opening to win the case outright. Because if neither the lawyers nor the client has any basis upon which they could make any allegation of facts the described behavior of a homeowner that caused financial injury, they have no proof that such facts are true.

So, for all their clever manipulations and carefully worded scripts, you can defeat them consistently by challenging at every turn whether they do represent the REMIC trustee, whether the fabricated documents are reciting events in the real world and whether the stated claimant or Plaintiff or creditor actually has any legal right or even moral right to assert claims to administer, collect or enforce alleged debts from homeowners.

Simple example: If an assignment says there is a grantor or grantee, start asking questions and demanding answers under RESPA, FDCPA, and court discovery. They don’t have the answers. You don’t need to prove fraud. You only need to undermine their ability to prove a prima facie case — something they won’t be allowed to even try if they have refused to comply with discovery, court orders, and even sanctions. The beauty is that they will always refuse. That is your ticket.

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Neil F Garfield, MBA, JD, 75, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.

But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more. In addition, although currently rare, it can also result in your homestead being free and clear of any mortgage lien that you contested. (No Guarantee).

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