Livinglies's Weblog

And the secondary question is why private Bar associations should be empowered to enforce their own rules often treated as law — especially when their decisions are so heavily influenced by political considerations. The contrived ignorance of the Bar is the most important factor in pereptuating the fraud described in this article.

In the old days (early 1990s and earlier), it was all very simple. I had requirements if a bank or hard money lender came to my office seeking foreclosure. It’s not just that I refused to file a case with no merit. The issue was that without proof of the actual balance due showing on the creditor’s ledger and proof of default, the judge would dismiss the case, even if nobody opposed it. In my career as a trial lawyer, I personally handled more than 500 foreclosures of every type imaginable.

I either won or settled every time because I would always make certain that we were suing the right defendant on behalf of the right plaintiff on the right debt and the right balance due. So did every other lawyer. On the defense side, I continue to win almost every time for the same reason in reverse — the underlying legal obligation is absent.

Today it is different. Each attorney is protected by a doctrine called litigation immunity. Each litigant is protected by attorney-client privilege unless the client demands action that constitutes the commission of a new crime or violation of the civil code. Today (and for the last 25 years), lawyers are filing papers in an attempt to invoke legal processes in which the remedy is the forced sale of the property. But they have no reason to accept the instructions they receive — and they never ask.

When challenged, their defense is that they had no information that would lead them to believe that they were serving false legal papers. Their problem is that they have no reason to believe in the merits of the case they are filing, and they know that now — despite the game of musical chairs in which the task of filing such fraudulent actions is rotated from player to player.

The applicable ethical rule is that they should only advocate a cause in which the lawyer believes there is a legal possibility of success. Instead, the lawyers who file foreclosures do so without any contact with the implied client and without any original source information about the status of the debt. All they are given is hearsay that is struck whenever it is competently challenged in court. They are being used as players in the scheme to force the sale of homes, using the proceeds to reward the players instead of reducing the implied debt.

In short, they don’t know and they don’t care. No such lawyer ever speaks to anyone at U.S. Bank, even if U.S. Bank or U.S. Bank trust is used as the name of the Plaintiff. No such lawyer has any reason to believe that any tryst exists or that U.S> Bank has created a trust account into which there was a deposit of ownership of an unpaid account due from the homeowner. It is all a sham to make the Judge believe that this is an institutional foreclosure. In truth, it is not institutional, and it is not really a foreclosure because none of the players has any legal claim to the lien.

The real client of the lawyer who files foreclosure papers is a regional law firm through whom electronic data and instructions are passed. The source is not known, and nobody ever tells the lawyer that the homeowner owes any money to any of the players or that any player has suffered a default or loss. But if the lawyer files the paper and argues as if the paper was real, he or she earns a salary, and the law firm makes a  huge profit.

Background — The 1960’s when everything changed. During that time, we had some great revelations about Wall Street. We found out that they were trading and borrowing on stock that had been entrusted to them to hold in “street name.” Dozens of companies went out of business because the market had a hiccup, and suddenly these brand name securities brokerage firms had to account for all (not some) of the stock certificates that had been entrusted to them. In many cases, the firms did not know the location or the current legal owner of the stock certificates. We saw the same thing happen in 2008 for similar reasons.

The 1960’s were also the times when several investors like Warren Buffet emerged with a single purpose — and it was named “value investing.” This was based on in-depth securities analysis. And once you decided that the company was sold and had a good future ahead, you bought the shares of stock and held them indefinitely regardless of market conditions.

This violated the pressure for instant gratification with overnight profit from day trading. But it also yielded a far greater return than any of the trading promoted by most ignorant registered representatives (as they were then called) who were ignorant as to the value and trained only to sell a tagline (now known as a meme).

Another value investor was Max Heine, who made hundreds of millions of dollars in the 1960’s buying bonds from distressed corporations.  By performing or directing close securities analysis in these companies, Max correctly concluded that the market price of the bonds was trading far under the value of the bonds because the company would likely pay all or part of the principal due on the bonds. Max hired me because of a bit of nepotism and favors with my family.

Filed under: foreclosure |