Officials at the CFPB have cautiously opened the door to administrative hearings conducted by the Bureau, subject to the administrative procedures act. This may sound like boring stuff, but the end result could be the ability to bring claims in an administrative hearing rather than in court.
Even the current revised administrative litigation procedures represent a paradigm shift by the Biden administration that harkens back to the initial reaction of the George W. Bush administration. It was the opinion of President Bush that no help should have been offered by the government to the banks. He considered the banks to have been the direct cause of the problems that became apparent in 2008. Bush was right, and now so is Biden.
If such administrative proceedings are allowed (which they ought to be), a hearing officer rather than a judge or magistrate would hear the evidence and make rulings on discovery and objections. Given the context of the agency such rulings would most likely diverge from many of the common rulings emanating from judges in court proceedings.
In plain language, a complaint could be filed with the Bureau challenging the existence, status, and authority over an implied or alleged unpaid loan account. It is highly unlikely that lawyers representing a foreclosure mill would be successful at convincing the hearing officer to simply rely on presumptions arising from what appear to be facially valid documents.
I believe that any agency charged with regulating any activities in the marketplace or society should be required to conduct in-house hearings for the agency to arrive at findings of fact and conclusions of law.
Those findings of fact and conclusions of law might be subject to challenge in a subsequent court proceeding. But the administrative findings would carry the presumption of validity.
So if the CFPB hearing officer decided that there was insufficient evidence to establish the existence of unpaid loan account receivable and insufficient evidence to establish the ownership of such an account, even if it did exist, the burden of persuasion and the burden of proof would shift to the attorney representing the foreclosure mill.
This would essentially leave the attorney in the foreclosure mill hanging naked in the wind. Unless they could convince a judge to overturn the findings of fact and conclusions of law reached by an administrative law judge, all of their efforts to claim rights to administer, collect or enforce the alleged or implied unpaid loan account (the underlying obligation) would vanish. I don’t think that is likely to happen.
This move by the CFPB should be encouraged by all consumers of financial products, particularly any financial product that involves installment payments. It would vastly reduce the cost of litigation, and it would end the dispute at a much earlier time than is currently available to any consumer with a meritorious defense.
Currently, such consumers generally are required to litigate to the bitter end, often spending tens of thousands of dollars, to reach a conclusion that there is insufficient evidence that the parties named by the opposition have any right, justification, or excuse for claiming any authority to administer, collect or enforce an implied or claimed obligation (for which there is also insufficient evidence of the existence, status or balance).
Filed under: foreclosure |
Thanks Neil, as always. this may help a 78 year old Vietnam Veteran like me. I wish you all the best in health, happiness, and being safe. Semper Fi.
This could be a game changer for consumers. Judicial litigation is significantly more costly than administrative litigation, and non-lawyers can much more easily argue their position at an administrative hearing because the rules of evidence won’t hinder their introduction of evidence to support their case. I look forward to this action by the CFPB. Thanks Neil, and I am praying for your complete recovery. George Gingo