What foreclosure Judges want to see in court

As Neil Garfield explained to me and many of his clients and readers, the only thing most judges are interested in is where did the money go, who paid, who received and whether it was paid, and if in part, to what extent. One must be very careful to distinguish this from the “show me the note” defense, which was effective for a while in obtaining dismissal of judicial foreclosures without prejudice. Our belief is that the Banks, servicers, and lawyers, through Loan processing Services and its various progeny overcame the missing note with the use of color printers, copiers and rob signing or surrogate signing.


The Bank’s strategy works simply because the absence of a monetary transaction is still inconceivable for most lawyers, judges and even borrowers. Everyone knows (or believes) that money exchanged hands. Everyone believes that the obligation exists, that the note is evidence of that obligation, and the mortgage secured the faithful performance of the duties (principally repayment). When the homeowner borrower or their attorney strolls into court and admits all of that, admits that there is balance outstanding, admits that the homeowner borrower failed to make a scheduled payment (without objecting on the basis that the payment was not and is not due) a first year law student could decide the case. Any homeowner borrower who enters the courtroom under those circumstances is saying “Yes I owe the money, no I didn’t pay it, but here is why you should give me a free house.” In such cases, the Bank correctly wins in motion practice and the case never gets into discovery much less pretrial or trial mode.


Most Judges seem to feel that “technical” violations included in the chain of assignments, allonges, endorsements or even the mortgage or deed of trust don’t matter. It doesn’t matter whether we agree or disagree with such judges — they must be approached with other arguments and using other strategies. They want to know one thing, and that will govern how they see the case forever:  did the homeowner take a loan and did they make their payments as scheduled? If the homeowner answers affirmatively that the loan was accepted and acknowledges that payments stopped as of a certain or contested date, the Judge will presume the existence of a valid obligation that the borrower is attempting to wiggle out of using exotic theories and technical objections.


The answer and affirmative defenses to assert in court are that in which the borrowers deny any wrongdoing associated with loan, responds that there has been no default, and no demand has been made from the actual creditor.  If the real lender wants their money they must demand it, which they have not done because these fake pretender lenders and servicers are initiating an action of foreclosure when they are not the ones who have paid value for this loan in court. And if these so-called lenders want to pursue the foreclose action, they must produce an agreement in which the real lender was given a security interest in the property — something that doesn’t exist. All this can be corrected, and most homeowners are willing to participate in the correction if evidence is brought forth by any party plaintiff or creditor. However the correction to perfect an interest in the loan must be based upon legal and economic reality rather than the proffers of false facts and non-existent transactions. These pretend lenders claim rights in the loan via assignment, endorsements, trustees of the named trust etc to bring forth the foreclosure action.


There are usually two outcomes to these cases, either we know at the end the identity of the creditor, the principal amount due after all appropriate deductions, and the terms of repayment or, as we have seen in thousands of cases, the case suddenly moves off the radar and upon investigation it is revealed that after a Judge orders discovery to proceed, the case is ripe for settling with the Lender or outright dismissal when these pretend lenders fail to provide answers in the discovery process.  The strategic point here is to raise an issue of fact that MUST be heard by the court whether or not the Court thinks at the time that the issue of fact raised by the borrower has merit. Once the Court agrees that the issue of fact exists, then the borrower is on his way to discovery, denial of motions for summary judgment denials of motions to lift stay, etc. And that’s how you can win. That’s how Neil won and that’s how we win going forward.



2 Responses

  1. Very succinct, and stated in a way any lay person can digest. This is and has been the problem for 15+ years. Judges need to attend CLE re these complex ‘technical’ flaws the financial industry cooked up so they can be smarter, more effective, and honorable judiciary. Thanks for keeping Neil’s work going!

  2. Excellent analysis. I believe that the current “ lender” ( assigned three times after I challenged the “loan” ) is a non existent “trust” in Delaware . I need to schedule an appointment with you ASAP.
    Rich Rendina 561 308-3181

Contribute to the discussion!