Homeowner Strategy in Foreclosure Litigation

Posted on May 2, 2023 by Neil Garfield

Court procedure is a long and tedious process during which the parties make their points and counterpoints. If you don’t make the point evident, you lose. If you don’t make the counterpoint, you lose. If you lose, the opposition wins. This is about the rules, not justice or the pursuit of truth.

Recently a client asked me to comment on whether to file an adversary complaint in a Chapter 13 bankruptcy along with eh schedules attached to then petition or to wait until the opposition makes their move. Here is what I answered.

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There are arguments both ways. You are required to name anyone making a monetary claim against you, so your schedules already state the case. But his email also makes sense. I would file ASAP because I like to take the lead in the case narrative.

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Also, waiting for them to make their move is a bit risky in my opinion.
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First, they are not required to make a claim on the same logic. Since you already named them, they don’t need to do anything. They might never file a proof of claim which leaves you in the position of being able to file one for them (which is nice since you can admit that their claim is disputed, unliquidated, and unsecured).
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Second, waiting for them to make their move is in my opinion, a strategic mistake. They are likely to file a motion to lift the stay and in support of that, the first thing the judge is going to see (and the US Trustee in bankruptcy) are the fake documents supporting their right to file. Waiting means that the first time the judge sees your counternarrative is in reply to their fake narrative. The tendency of judges is to perceive the case as claim made, defense required.
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Third, I would exercise your right of limited discovery ASAP to establish the matters, facts, and issues in dispute. The sooner you convince the judge that this is complex litigation rather than procedural devices to avoid inevitable liability, the better.
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But in the end I am a consultant in your case not the captain of the ship. Your lawyer must evaluate what I am saying here and decide, in the current specific environment in which this litigation will occur, whether to use one strategy or tactic or another.

REMEMBER THAT YOUR RIGHT OF DUE PROCESS DOES NOT INCLUDE MONOPOLIZING THE COURT’S TIME FOR AS LONG AS IT TAKES TO FULLY LITIGATE EVERY ISSUE THAT YOU OR YOUR LAWYER THINKS IS WORTH LITIGATING. PICK 2-3 LEAD ISSUES AND STAY WITH THEM.

DUE PROCESS only means that the judge must give you an “adequate” amount of time to assert and argue your chosen positions in litigation. The so-called “rocket docket” was a violation of due process because it provided no time for the homeowner to state a defense or to challenge the case brought against them.

The “rocket docket” started with the presumption that the claim was valid and the homeowner was being allowed to present the illusion of a defense.

The thinking behind that is the delusion that a lawyer or judge could understand the securitization process that has been in use since the late 1990s. That being the case, there was no use to bring in or even allow experts to testify. Hence Judges were and are making rulings without a shred of evidence — something they were never authorized to do by Constitution or statute.

And that is the conundrum for homeowners and their lawyers. You are facing a judge who thinks he or she knows and usually starts out adamant about what the court “knows” when in fact, they are completely ignorant. Like most litigation, it is the lawyer’s job to gradually re-educate the judge such that he or she will insist on compliance with the rules of procedure and the rules of evidence.

Before you act on the truth of the matters asserted above, you should find a lawyer who is licensed in the jurisdiction in which the property is located.

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Neil F Garfield, MBA, JD, 76, 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).

Yes you DO need a lawyer.
If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

Please visit www.lendinglies.com for more information.

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