Livinglies's Weblog

Gary Dubin is one of the few lawyers with more life and legal experience than I have. While I have won most of my trial cases, Dubin has been consistently winning both trial and appellate cases, especially concerning false claims of foreclosure.

Here is another one that displays his talent for narrowing the legal issues to something that a homeowner can actually win.

see CAAP-18-0000326sdo

I’m unsure if he entirely agrees with my description of why the actors in foreclosure scams resorted to fake documents and unsupported claims. And truth be told, he probably does not care. He is merely following the tradition — when defending, question everything, admit nothing and make the claimant prove their case. Once he has prevented the opposition from proving their case, his job is over. The homeowner wins.

One of the oddities here is that this was an ejectment action claimed by Aurora Loan Services, a company that no longer existed but whose name was acquired by various people who wanted to use it as a business name or, as we call it in the legal profession, a fictitious name.

The original Aurora went bust along with its “parent,” Lehman Brothers. Neither one of them owned any obligations, debts, notes, or mortgages. And neither one had been representing a creditor who did own those basic elements for any claim to administer, collect, or enforce an allegedly unpaid loan account.

But the use of the Aurora name is useful to create the false impression that it is an old company that is merely continuing its role as a creditor, servicer, or both.

The homeowners contended that Aurora had failed to establish that it had an unimpeachable title, which for the above reasons, is an understatement. And the homeowners were right. The Hawaii land court’s seal was required for that; Aurora (a) did not have that and (b) could not produce foundation evidence that it had any right to receive it.

The homeowners also contended that Aurora (actually the foreclosure mill lawyers) “failed to show that, in exercising, [its] alleged right to nonjudicial foreclosure under a power of sale, [it] exercised this alleged right in a manner that is fair, reasonably diligent, and in good faith…” This provision may surprise many lawyers and homeowners, but it is incorporated into the statutory scheme of every U.S. jurisdiction and rarely used.

And lastly, at least on appeal, the homeowners contended that Aurora “has not adequately addressed the issue that the subject mortgage was assigned to [Aurora] through fraudulent action.” This is obviously a tough one because all foreclosure actions are predicated on fraud unless the unpaid loan account actually exists as paid for by the owner on whose books and records the loan account is maintained. Homeowners who can’t believe there is no unpaid loan account often waive this fatal defect — thus producing their own doom.

This is where Dubin’s superior talent in advocacy came to the fore: He convinced the court that there was an extra duty of care when nonjudicial foreclosure is employed as the vehicle for forcing the sale of homestead property. The court held that

To establish it had title to the Property, Aurora also submitted a copy of the Quitclaim Deed. The Quitclaim Deed resulted from a nonjudicial foreclosure. Thus, Aurora had to show that the foreclosure sale “was fairly conducted and resulted in an adequate price under the circumstances.” Omiya, 142 Hawai#i at 457 n.37, 420 P.3d at 388 n.37 (quoting Hungate v. L. Off. of David B. Rosen, 139 Hawai#i 394, 409, 391 P.3d 1, 16 (2017) (citing Kondaur, 136 Hawai#i at 240-42, 361 P.3d at 467- 69)).

I would remind the reader who is old enough o remember that this duty has always existed. Dubin convinced the Hawaii court of appeals to bring it back.

I should add that Frederick J. Arensmeyer and Matthew K. Yoshida were also the attorneys on appeal.

And I will add my own unasked opinion that the sole reason that Dubin was targeted for disbarment was not for something he did but rather for something he didn’t do — namely, lose foreclosure defense cases. His success in defending foreclosures painted a big red target on his back.

The influence of investment banks permeates almost every facet of government. They got away with the “Big Lie” or “Big Steal” in which they procured the signature of homeowners on false pretenses. By concealing the true nature of the deal, they convinced homeowners — and the rest of the world — that the transactions were loans.

But they were, in fact, in the business of selling securities, derivatives, and hedge contracts, the proceeds of which far exceeded the amount of any transaction with the homeowner. The money they reportedly gave to, or paid on behalf of the homeowner, did not cost any of the actors in the lending marketplace one cent.

As soon as the documents were signed, all the actors were paid outlandish sums of money for selling the deal. Nobody lost money after that, regardless of whether or not the homeowner made scheduled payments on a nonexistent loan account. If the homeowner paid, it was pure profit. If the foreclosure succeeded, it would be pure profit for everyone.

The homeowner was dealing with people who had no stake in the success of the alleged promise to repay the incentive money used at “closing.”

The homeowner was assuming risks far above those normally encountered in a loan transaction and was left with no creditor or an authorized servicer acting on behalf of a creditor, lender, or successor lender.

The entire success of this scheme is based on the ability to convince homeowners that they really owe the money back. But that money was an incentive payment for launching the largest securities scheme in economic history.

Suppose homeowners had known they would have no lender or servicer and that the opposing actors had a vested interest in collecting illicit gains from foreclosure. What do you think they would have done when asked to sign the papers?

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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 14 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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If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

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