Many of the cases are technically “won” by homeowners who successfully point out that at the time the foreclosure commenced, the named claimant (plaintiff/beneficiary) did not have possession or construction possession of the promissory note and therefore had no legal standing to file suit.
Common law precedent asserts that the judge is mandated to dismiss without prejudice which means the lawyers can file again when they possess the note.
There are several problems with how this is being processed in American jurisprudence.
The first is the assumption that the named claimant is the owner of the loan account and not just the possessor or intended possessor of the promissory note.
In the cases I have tried, one judge entered a Final Judgment for the homeowner because there was insufficient evidence to prove ownership of the loan account — condition precedent to enforcing any security instrument under §9-203 UCC, adopted verbatim in all US jurisdictions). The judge also found that the documents that were introduced were fabricated.
At some point in the litigation, the lawyer frot he foreclosure mill introduces a document entitled “Limited Power of Attorney” (LPOA) without introducing the referenced “servicing agreements.” But those servicing agreements completely change the implication of the LPOA.
One of the more interesting things about the limited power of attorney supplied by the opposition is that it is often dated AFTER the claims began.
That being the case the only proper foundation would be testimony or exhibits showing that the relationship existed before the date of the document or a recital in the document that the document should be considered effective at an earlier time. I have frankly seen no such document in any case.
In my opinion, such documents are introduced as a tool to launder the apparent authority of the “servicer” and to launder the title to the lien. Good lawyers pick up on this and win the cases. Most homeowners do not know the difference.
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There is usually no reference to it being effective at an earlier date. This is especially interesting if the entire action depends on events that occurred before that date that were subject to claims related to the administration, collection, and enforcement of a “loan account” due from the defendants to the named claimant (e.g., US Bank).
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The document often on its face states that it was drafted and recorded by the “servicer (e.g., Ocwen loan servicing LLC). It is executed “on behalf of the trusts” by US Bank “not in its individual capacity, but solely as trustee.”
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There is no warranty, assertion or implication that any of the names used on the exhibit to the LPOA are or ever were trusts that were organized and existing under the laws of any jurisdiction. Nor is there any warranty, assertion or implication that US Bank has been entrusted with the ownership of any underlying obligation, note or mortgage.
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Our conversation with opposing attorneys makes it clear and evident that they are attempting to create a new type of party. I understand this argument because US Bank is not a party to the litigation.
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Further, I understand his argument that there is no named trust, per se. His argument seems to be limited to creating a party by naming it as a plaintiff in litigation.
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This may seem like splitting hairs, and I understand that the judge will be resistant to split those hairs. But it is very apparent to me, not only in this case but in hundreds of other cases in which I litigated against US Bank, that the alleged “plaintiff” is merely a name – and not a party or business entity that could answer to a judgment for fines, sanctions, costs or attorney’s fees.
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This is why all foreclosure mills avoid the custom and practice of naming the trust. They never state that the claim is brought on behalf, for example, of “US Bank, N.A., a trustee for the YXZ Trust, organized and existing under the laws of the state of ABC.” This is a requirement of pleading that virtually everyone ignores, and even Final Judgments are entered in favor of the named claimant without ever knowing if it legally exists.
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The opposing lawyer is almost always unable or unwilling to define the role of US Bank. I know from personal experience in litigating many cases that the lawyer has had absolutely no contact with U.S. Bank nor is the law firm in an attorney-client relationship with U.S. Bank (as an example, or whoever else is named as “trustee of REMIC trust”).
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This is why, in prior litigation, when we had agreed to terms for settlement, it all collapsed when I asked for the acknowledgment of US Bank. It is also why in mediation in the prior litigation the lawyer insisted that she represented Ocwen loan servicing and NOT US Bank.
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The LPOA does not say that Ocwen is a records custodian. It generally refers to Ocwen as an implied “servicer.” And it refers to servicing agreements as though US Bank had entrusted the administration of loan accounts owned by US Bank to Ocwen, the date of which would be the date of the LPOA or perhaps before that.
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But the servicing agreements also contain no warranty or statement of ownership or title to the lien, the note or the underlying obligation as required by FS 679.203 (adopted from §9-203 UCC, verbatim, along with all other US jurisdictions).
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Let’s make sure we don’t get caught up in the argument that the right to enforce the note is also the right to enforce the lien through foreclosure. The condition precedent in the statute for enforcement of the note is different than the condition precedent in the statutes for enforcement of the lien.
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Enforcement of the note requires delivery or right to delivery PLUS granting an entitlement to enforce by a grantor with the right to grant such authority. The inquiry into who granted that authority to enforce is almost always missing. Ultimately it should come from the owner of the underlying obligation, albeit through intermediaries.
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Enforcement of the lien requires that the would-be enforcer pay value for the underlying obligation (not the note or mortgage, although that could be implied). The obvious intent was to raise the stakes for a foreclosure beyond the stakes for enforcement of a note. But the enforcement of the note is not meant to benefit people who do not own the claim.
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The LPOA, in short, is entirely restricted to those activities that comply with or are congruent with the servicing agreements. The servicing agreements do not nominate or appoint Ocwen to act as records custodian. The LPOA says it is empowering Ocwen to receive, deposit, process, input data or report data on any movement of money in or out of the alleged unpaid loan account that is implied but not directly alleged or asserted to exist.
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But the servicing agreements proscribe the limits of that LPOA authority, and those servicing agreements do NOT recite any method or means by which Ocwen would receive or deposit funds or distribute those funds — which means that the recital in the LPOA is a sham.
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In point of fact, US Bank has never received the proceeds from any forced sale of property in the context of this and similarly named “Plaintiffs” and is not intended to receive such proceeds.
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The reason is simple: the named Plaintiff or beneficiary does not legally exist. It is a front, a sham conduit that enables the investment banks to distribute the funds as they desire without any reference or relationship to any unpaid loan account existing on the books of any business entity.
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And there is no such expectation for any “investor” to receive such money proceeds since they get paid regardless of whether the homeowner pays or not.
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And since no other interested party event is referenced in the current action, there is no justifiable issue that needs to be decided.
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Ultimately the lawyer for the foreclosure mill is merely claiming that since the homeowner stopped paying on a schedule of payments in 2008, SOMEONE should be able to collect and enforce it, and it might as well be him.
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Under that theory, anyone could collect on the invoice you receive in the mail from anyone. The only condition precedent would be if the claimant knew about it.
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And this is why the claims, facts, and issues preclusion (res judicata and collateral estoppel and law of the case) arguments are so important.
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Suppose a prior law firm already tried the case. In that case, you want an order, like the ones I have obtained, that says that there was a full trial and that the findings of fact are that the named Plaintiff (e.g., US Bank) failed to produce sufficient and persuasive evidence that it ever owned the unpaid loan account.
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They introduced or attempted to introduce exhibits and testimony but were either struck down by the court sustaining objections or otherwise defeated by the court’s conclusion that there was insufficient evidence to establish that US Bank, for example, as Plaintiff ever owned the loan as was argued and alleged at trial.
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The opposing lawyer will want the court to ignore that despite the absence of any motion for consideration, rehearing, or vacation of the final judgment that said just that.
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He or she wants the court to rule that the findings of fact and conclusions of law reached by prior judge in the prior action were not binding — and for the current court to rule that US Bank owned the subject loan when the first action commenced based upon an illegal rendition of a notice of default by Ocwen who and no power to issue it.
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In short, the lawyer for the foreclosure mill wants the court in the current case to issue a ruling inconsistent with the prior ruling reached by the prior judge as though the current presiding judge was an appellate panel.
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CLICK TO DONATENeil 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).
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This is all correct Neil. And LPOA – worthless as entities become defunct – even if valid at time. Further – if trusts are valid, which they are not, only LPOA from trustee to Master Servicer has authority. Master Servicing rights sold all the time, and LPOA rarely reflects any authority from a claimed trustee (trusts are NOT valid) to a claimed Master Servicer. LPOAs are frowned upon for valid clean title. But in foreclosure – anything goes — who cares? According to courts – not them. Computershare? Anyone?
So… if the Defendant wins on Lack of Standing or other decision, does the Defendant ever receive attorney fees from
the fake entity or are they able to collect any judgment from the fake entity? How do the Plaintiffs’ law firms handle the judgments? Do they just ignore them, and file appeals or new cases?
Heck. I have a letter from US Bank that they have absolutely nothing to do with any Fraudclosure or ownership in the property.
Yet somehow they are the substituted Plaintiff in the Fraudclosure shell game as US Bank NA Trustee for XYZ Trust.