Livinglies's Weblog

What you need to realize is that this is all about technical law. It is not an argument.

It doesn’t matter whether the act was ministerial or could be labeled as anything else. The question is simply whether they did it.

Don’t get lost in the weeds. If they did it, then the company that was designated as the “servicer” did not do it. And even if they were working for the company that was designated as the “servicer,” that “servicer” still did not do it.

Therefore any business record that is produced in response to statutory letters under the FDCPA or RESPA needs to come from the company that did it – not the company that produces the report in correspondence or in court.

This is why I keep advising you to have a trial attorney advising you on what to do next and what to do with the responses that you are receiving.

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I recently received a copy of a motion to dismiss filed in behalf of one of the 3rd party financial technology companies that was alleged to be a “servicer” in the complaint filed by the homeowner. A close look at the motion shows that somebody was not thinking when they filed it.

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The company involved was Exela, who was alleged to be receiving, processing and accounting for payments tendered by the homeowner and depositing those payments at a client’s instructions, described as an investment bank operating through intermediaries.

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This defendant has responded by filing a motion to dismiss that essentially concedes that all of those factual allegations are true, which it is required to do under the rules of pleading. *

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Usually, the motion to dismiss telegraph that if an answer is required, it will categorically reject the facts alleged in the complaint. In this case, there was no such statement.

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The motion to dismiss was solely based on the idea that even if Exela was operating as described in the complaint, it did nothing wrong and therefore, there was no legal cause of action that the homeowner could pursue against Exela.

The financial technology companies (FinTech) are still trying to pretend that the CFPB did not categorize them (May 2022) as “servicers” required to comply with agency rules governing companies that purport to be servicing unpaid receivable accounts on behalf of a creditor who owns the account. So they are rejecting the label of “servicer” even though they concede that they are performing servicing functions.

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That is somewhat like pleading “not guilty” despite video evidence showing the defendant committing the criminal act.

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Here was my response to the homeowner when she sent me the motion to dismiss:

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The first thing I want to point out is that you have accomplished something. Exela has admitted at least the possibility that they are the ones who are opening the envelopes, processing, and accounting for the receipt, and depositing checks at the instructions of “the client.”

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So it is ONLY the records of that company, Exela, that can be introduced as a business record because they are the only company that did business with the homeowner. And it is only an officer of Exela who can provide the required foundation testimony as to the report being a printout from the business records of Exela (not Ocwen for example).

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Your opposition is literally prohibited from finding or presenting such a witness, which means that they must fake the report under the name of the designated “servicer” as being the business record when the company that has a business record does not and will not appear.

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They will not produce ther records or witness from Exela because that witness will be asked a preliminary question that, if answered, would cause the house of cards to crumble. He or she would testify, if they were truthful, that Exela worked for some intermediary.

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The testimony would reject the notion that Exela worked for the servicer, making the “servicer” irrelevant and all of its records not admissible if timely and proper objections to hearsay, foundation, best evidence etc. are raised. They would lose every case, and the securitization infrastructure would be in real trouble.

Filed under: foreclosure |