Homeowners with Courage and Conviction Generally Win Foreclosure Cases

I often receive links to cases that either corroborate what I have been saying or challenge my conclusions. Many of those links are opinions from trial courts, and most of those are from Federal DIstrict judges (mainly because most, but not all, state court judges do not issue opinions justifying their rulings.

Even in best-case scenarios, the opinion of a trial judge is not binding as a precedent on anyone. But reading such decisions does inform us about the assumptions, presumptions, and biases confronted by homeowners.

One such decision comes from Pennsylvania Federal Court. U.S. Bank N.A. v Gerber. U.S. Bank v. Gerber, 380 F. Supp. 3d 429 (M.D. Pa. 2018). Some people like the way that the District Court Judge says that the lawyers who supposedly represent U.S. Bank N.A. are missing the mark. And the decision does raise some interesting points about strategy and tactics for homeowners.

This particular decision says that the argument employed in thousands of cases “misses the mark.” The Judge is referring to the erroneous argument that since homeowners were not a party to the chain of transactions that were supposedly memorialized by assignments of mortgage and endorsements, they (the homeowners) have no standing to challenge them even if they are false.

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I agree that this one conclusion by this trial judge is an important rejection of one of the most common “defenses” raised by lawyers for the banks. But it does not create a precedent such that any other court needs to follow it. You can show it to another judge as a persuasive authority but it has no precedential authority — i.e., a requirement that the next judge must follow the reasoning or conclusions of the trial judge who issued it.

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I think the larger issue is the elephant in the living room. Reading the case law on foreclosure litigation, one thing has become crystal clear: Despite the APPARENT accuracy of homeowner defenses, such defenses will only be considered relevant to the case if they are worded such that the connection to the prima facie case in foreclosure is perfectly clear.
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The problem is that lawyers and pro se homeowners are too scared to unambiguously challenge the existence, ownership, and authority over an allegedly unpaid loan account.
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It is perfectly within the scope of good pleading to make a statement and then say that you will prove it during discovery. (Just don’t make a statement about a fact that you have already admitted). It is equally permissible to say that the opposition refuses to supply answers to your discovery demands and that both evidentiary and monetary sanctions should apply.
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This is why I keep pressing homeowners to secure the services of competent trial counsel or to find counsel who is responsive to direction from attorneys who win these cases. And it is why I emphasize to homeowners the importance of understanding securitization.
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Gerber, without realizing it, saddled up his horse using all the right gear and then rode off bareback on another horse. This is a common failure of lawyers and pro se litigants. For example, it is not enough to say that securitization changed the contract. The judge says quite clearly that this might be true but that the burden of pleading is on the one who makes the statement. So if Gerber had alleged the ways in which the contract was changed with much greater specificity, the judge would have taken the defenses more seriously.
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I do think the judge was probably wrong in construing some of the reasons the contract was changed as not specific enough. But with the weight of securitization infrastructure surrounding everything, the only thing that a judge will respond to is that the current claimant has no claim and will not be able to produce evidence corroborating their claim and implied assertions in discovery.
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In essence, the homeowner is forced under current judicial doctrine to boldly state that there is neither a contract nor a debt owed by the homeowner to the designated Plaintiff or Beneficiary.
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The defense needs to be that the named Plaintiff (U.S. Bank as trustee) is pursuing a false claim, has never collected any money, and has no intention of receiving any proceeds from the forced sale or collection from the homeowner or his/her property.
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But both homeowners and their attorneys are afraid to state that because of the possibility that the lawyers for the designated Plaintiff will come up with some actual proof of payment of value in exchange for a valid conveyance of ownership of the underlying obligation, the legal debt, note, and mortgage. Nobody likes to look stupid.
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As with all cases,  the timid lose even if they are right. What stops homeowners from winning is the fear that the “Banks” will be able to produce an admissible record corroborating the existence, ownership, and authority of U.S. Bank or any other designated claimant. They can’t and if they could they would have done so 20 years ago.
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The plain facts support two main points:
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(1) the documents upon which the foreclosure mills place reliance are false — i.e., they memorialize transactions that never occurred, meaning that the final designated claimant never came to own the alleged loan account, never suffered any economic loss, and never had a record of ownership of any loan account; and
(2) the investment banks have used their outsized influence to change both pleading and proof requirements in foreclosure litigation, resulting in the courts changing the laws governing such transactions in ways that are inconsistent with the intent and content of laws passed by Congress and the laws of any State legislature.
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Of course that in and of itself is unconstitutional because only legislatures can make laws. And only courts can enforce them. 

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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 COMMENTS ON THIS BLOG AND ELSEWHERE ARE BASED ON THE ABILITY OF A HOMEOWNER TO WIN THE CASE NOT MERELY SETTLE IT. OTHER LAWYERS HAVE STRATEGIES DIRECTED AT SETTLEMENT OR MODIFICATION. 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).

Yes you DO need a lawyer.
If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

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3 Responses

  1. All is protection in courts of old government processes to stimulate spending which is major element of the GDP. They allowed private securitization without any checks or balances in place. Then they concealed the collapse by ineffective settlements that did nothing for the people. Neil is correct the two most important issues are 1) there was never any financial balance sheet accounting 2) there is never any authority.
    However, cases like this case set precedent – particularly if one is in the Third Circuit. Attorneys see these cases and will not take defense cases because precedent will be put forth and they know it.
    Now that the problems of the crisis are finally hitting the economy and markets (government has manipulated interest rates since the crisis – a band aid approach) – the fallout could be very severe – affecting many more people who did nothing in the past to stand up for the victims. As the deeds of the government will unfold further – judicial bias will do more harm to the economy. These bad decisions will ultimately be reversed – as bad decision usually are.
    Courts in the Third Circuit such as PA are particularly bad. I say government deeds because they allowed banks to do fraud without any checks and balances, and then the government handled all poorly. We can all only hope that the judges, as their own pockets are affected, take lessons in financial fraud and the economy itself, and that bias is no longer reflected in judicial decisions. Attorneys who get a jump on defense will then be in the driver’s seat.

  2. Exactly what I said in unlawful detainer court and Commissioner did a double take. My loan was not in a trust but somehow Chase treated it as such and needed to say it was a other types of loans when it wasn’t! Chase assigned to non bank just to get rid of me. At the hearing non bank rep immediately said purported loan was an FHA loan and when I said it wasn’t the commissioner allowed the case to go forward.

    The end result wasn’t good but still preserved right to lawsuit and title claim which non bank fought against.

    Through the administrative process have multiple note versions, loan histories and worse fraudulent documents that non bank lawyers were allowed to say were NOT FACTS at least on eviction ruling although commissioners rationale was I lived on the property too long for free while basically agreeing with issues I brought up.

    If homeowners go through the administrative process before going to court and fake lender responds with fraudulent documents should be half the battle.

  3. Fear is NOT causing homeowners to lose !!!!!!

    Bias. Corruption. Fraud. Ponzi. The System is ……

    If Neil. You came to my courtroom against my neighbors 7 year old. And I’m the judge. I will guarantee you lose to that 7yo. End of story.

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