Challenging the Lawyers for the Foreclosure Mill

Based upon 16 years of research, an investigation by our company, an investigation by third-party forensic analysts, and an investigation by law enforcement and law markets (see 50 state settlement, for example), it is legally, factually, and axiomatically true that lawyers who initiate foreclosure actions are most likely doing so without the benefit of a client who has a legally recognizable interest in the outcome of the litigation or nonjudicial foreclosure.

The bar to suing those lawyers whose client is most likely another law firm who in turn has been hired by yet another law firm (none of whom have an interest in collecting money from the subject homeowner or the sale of the homeowner’s property), is something called litigation immunity which absolves the lawyer or at least protects the lawyer from all manner of misleading statements in court, whether in writing or orally.

But it need not end there. In my opinion, it is time for homeowners who are faced with false claims of securitization to file complaints or grievances with the governing bar association under certain circumstances.

Here is a direct quote from the report of disciplinary actions contained in the most recent issue of the Florida Bar Journal. A lawyer was disciplined for “repeated failures to respond to court orders in two pending matters and failure to comply with the court’s Rules of Practice and Procedure.”

This brings up an interesting point. As every pro se homeowner litigant knows and every lawyer representing homeowners knows, if timely and proper discovery demands are served on the lawyer presenting the foreclosure mill, there will be a response — consisting of objections and evasions, plus production of newly fabricated unsigned documents or documents containing the signature of people who either don’t exist or who don’t know that their signature was used on those documents. Even if they knew, they had no access to information that would support the truth of the matters asserted in those documents.

More often than not, homeowners either win the case or force a very favorable settlement by timely and properly enforcing their discovery demands by seeking and obtaining a court order compelling compliance with the Rules of the Court, the discovery demands, and the Court’s order.

In most such cases, the discovery demands are served but never enforced and thus become a nullity in the process of litigation.

But in many other cases, the lawyer for the foreclosure mill will refuse to comply with the court rules and court orders by filing repeated motions and memorandums about why compliance should not be required or ordered— even when it has already been ordered.

In nearly all such cases, the judges let them get away with it —even granting summary judgment to the opposing lawyer, who lacks a client with an interest in the disputed MONEY. Remember that foreclosure is about money. Suppose the parties or actors involved have no expectation or entitlement to receive any money. In that case, they have no business issuing a declaration of default, a notice of sale, or filing a lawsuit in foreclosure.

So that brings us to my point, which will most likely incur the wrath of most people in the legal profession. When it comes to the prosecution of foreclosure claims, the bar associations have universally assumed that such claims are valid and true without the benefit of a trial on the merits in which the proof of the matters asserted is ever presented. They are merely following suit on the requirements that the court follow the legal presumptions from facially valid documents.

So the bar associations are prosecuting claims against foreclosure defenders and never against lawyers who pretend to have a valid claim. In most cases, they are right in refusing to bring disciplinary proceedings against the lawyers representing foreclosure mills with other law firms as clients.

As long as the lawyer has some basis to believe that he has a client and the client has a claim, then he or she can name the plaintiff or beneficiary and proceed with the foreclosure action.

The exception comes went the lawyer manifests repeated failures to respond to court orders in pending matters and failure to comply with the court’s Rules of Practice and Procedure.

Violating a court order is not worthy of bar discipline. We all do it from time to time. And we are allowed to cure the violation. But if we don’t cure it and instead refuse to comply with the court order, thus violating the basic rules of civil procedure — along with the requirement of good faith — then there are grounds for the lawyer to be disciplined, and there are hundreds of cases in which lawyers have been disciplined for exactly that reason.

If more people were to file such complaints with the bar, the bar would be required to investigate those complaints. After finding that the lawyer never had a client other than another law firm (who also had no right, title, or interest in the alleged debt or underlying obligation), they would have multiple grounds to issue discipline — and, in my opinion, they would be required to do so.

If that happened, the foreclosure mill business plan would disintegrate since they would all risk losing their licenses. In turn, that would unravel the entire securitization scheme and foreclosure schemes precisely because there is no claimant plaintiff or beneficiary.

Without the umbrella of litigation immunity and tactical immunity conferred by bar associations, nobody would be authorized to imply or argue a nonexistent claim.

This ends the illegal practice of invoking foreclosure procedures in cases where this is no debt owed to any of the actors.


One Response

  1. Excellent knowledge; thanks as always Neil!

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