TONIGHT! How to Win Eviction/UD Actions

Posted on October 11, 2018 by Neil Garfield

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Charles Marshall will discuss today two seminal unlawful detainer (UD) cases, in which respectively in each case the lower Court there found per usual for the institutional UD Plaintiff against the ‘former’ homeowner who was foreclosed on by an institutional trust, aka ‘lender-in-succession’. Yet on appeal of the UD judgment, in both these separate cases, the appellate courts reversed the judgment and remanded the cases.

First up for discussion today is Bank of New York Mellon (BNYM) v. Preciado, the appeal decided in August 2013. The second case is US Financial, L.P. v. McLitus, decided on appeal in August of 2016, which appeal decision was published in November 2016.

Both appellate courts found that neither UD Plaintiff had perfected title, as required by CCC 2924. Will discuss the reasons for this on today’s show.

The courts are meandering back to application of basic law, now that their fears of causing global collapse seem behind them. In Hawai’i the Supreme Court decided that subjective criteria used to dismiss homeowner claims were inapplicable and added that a wrongful foreclosure action could be filed BEFORE the foreclosure was finalized.

In Unlawful Detainer (UD) actions brought in nonjudicial foreclosure states (the majority) there has always been tension between the lawsuit that must be filed by the party claiming possession and the burden of proof. Judges seem to perceive it in the past as just another action for TRO where the homeowner must essentially assert defenses to pleadings that are not filed by the foreclosing party and then prove assertions without having access to the records of the opposing party.

Make no mistake about it. The UD proceeding is the first time anyone makes allegations about the change of title through the foreclosure process and therefore is the first time the homeowner is entitled to frame a narrative defense to real allegations ultimately relating to “perfecting title.”

But the key is the willingness to fight despite  apparently long odds against the homeowner. It’s not as bad as it looks, but it is still an uphill battle. 99% of all UD actions are resolved by the homeowner defaulting on either answering the complaint or failing to prosecute the defenses. Of the cases that are hotly contested, my perception is that somewhere between 25%-35% of homeowners actually win. That figure could be low because of the lack of definition of what constitutes a hotly contested case.

Note that the cases scheduled to be outlined by Charles are appellate cases in which the homeowner lost at the trial level. That means a commitment to persist in the fight is the primary factor in winning homeowner cases, one by one.

Filed under: foreclosure | Tagged: , | 3 Comments »

Tricks of the Trade: Banks’ Playbook Behind the scenes

Posted on August 28, 2018 by Neil Garfield

For those who are willing to do the work, events after the “sale” of the foreclosed property will probably reveal the puppets and at least point to the puppet-masters.

As you investigate each named party leads to a dead end without any legal entity who is responsible for the actions taken.

I have a client who is in a predicament that is usually the way things go in the world of false claims of securitization and false paperwork, false sales, and transfers after sales of the property. Taking my advice she has admitted nothing and she assumes that whatever “information” is proffered by the attorneys handling the foreclosure is a lie. So she continued to follow the trail even after the property was supposedly sold and a deed was issued supposedly to the trust who according to the foreclosure mill was the owner of the “loan” (or at least the debt.

Part of her problem is that when she looks up the “owner” on the website of the county recorder, a name pops up that was never in the foreclosure, never in litigation and never in the chain of title.

Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult.

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Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345. The TEAR replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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In this case American Home Mortgage Investment Company (AHMIC) suddenly shows up on the website of the recorder’s office at the time when an eviction or unlawful detainer is about to be filed.
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Note that there is a difference between judicial states where defenses have theoretically at least been tried and decided and nonjudicial foreclosure states where the first time that the “foreclosing party” is forced to  make and prove allegations is in the unlawful detainer action. In nonjudicial states many intrepid homeowners and lawyers have achieved either victory or settlement, in some cases causing the case to drag out for 10 years or more.
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This gets into the tricks of their trade. They use their corrupt influence with clerks at the office to show whatever name is given to the clerk who makes entries on the website. I have personally seen this in action in a Citi case where the clerk in a corrupt Florida county changed the name of the Plaintiff multiple times without admitting to why she did so and from whom she had received her instructions — because there certainly was no pleading filed that changed the name of the Plaintiff. The corrupt county is the only county government ever audited by the state auditor and which resulted.
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The website is not the official record although it is usually treated as such. A frequent ploy of the mill lawyers is to ask the court to take judicial notice of what is on the recorder’s website, or what is on the sec.gov website.
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In both cases the entries are made by the lawyers or the servicers and are entirely self serving. Judicial notice is NOT to be applied just because data or documents appear on an agency website.
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Judicial notice is an economical way of proving a fact that everyone knows to be true, is not contested and was generated from a credible source which by definition is NOT a party who would benefit from the entry or uploading.
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The only way AHMIC could be the owner of the property is if one of the following  conditions was met:
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  1. AHMIC  entered into a transaction with the trust, with Deutsche Bank as Trustee in which the property was purchased for value from the Trust. If a deed exists that says that it is very recent because it did not come to me as part of the foreclosure chain of title.
  2. AHMIC  entered into a transaction with the trust, with Deutsche Bank as Trustee, but signed by Ocwen as “attorney in Fact” in which the property was purchased for value from the Trust. If a deed exists that says that it is very recent because it did not come to me as part of the foreclosure chain of title. Without a power of attorney attached, in accordance with industry standards, or at the very least identified by date and parties, the execution of such an instrument must be further investigated to determine if the execution of the deed was valid and not void.
  3. A person whose employment is uncertain executed a deed to AHMIC on behalf of either the trust, the trustee and /or Ocwen (as attorney in fact — see preceding paragraph on power of attorney). There is no consideration or value paid although the deed may state something like $10 and other valuable consideration. This is the most likely scenario.
    1. If the facts conform to this, then the transfer without value indicates that AHMIC was a conduit or alleged principal (most likely conduit) at the time of the sale. Your opposition will state that the bid by the trust was a credit bid on behalf of a “creditor”.
    2. The transfer without value indicates that the foreclosing trust was only a placeholder for an undisclosed party. AHMIC could not be a creditor unless it had an actual financial stake in the purported loan. In actuality AHMIC is stepping into the nonexistent shoes of American Brokers Conduit, which is merely a fictitious name.

In other words their games, often revealed after the foreclosure sale and mostly overlooked reveal the misrepresentations of fact that were knowingly made to the Judge, the homeowner, and indeed the world through recording instruments that should never have been drafted, much less executed and recorded.

Filed under: foreclosure | Tagged: , , , , , , | 19 Comments »

Why Everyone (except SCOTUS) is Wrong About TILA Rescission

Posted on June 26, 2018 by Neil Garfield

All contrary arguments are erroneous since they would insert a contingency where the statute contains no room for any contingency. The language of the statute bars any such contingency when it says that the TILA Rescission is effective upon delivery, by operation of law. If anyone wants the statute to say or mean anything different they must get their remedy from the legislature, not the courts, who have no authority whatsoever to interpret the statute otherwise. The status of any case involving foreclosure is that it does not exist. Hence the court is left ONLY with the power to perform the ministerial act of dismissing the case for lack of jurisdiction.

Let us help you plan your TILA RESCISSION strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult.

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Get a Consult and TEAR (Title & Encumbrances Analysis and & Report) 202-838-6345. The TEAR replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

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THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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So in answer to questions about putative “modifications”, eviction or unlawful detainer, bankruptcy, and TILA Rescission this is what I have written in response to some inquiries.

Should the rescission be recorded? Not necessarily but

YES. I would like to see it recorded. You need to check with the clerk in the recording office or an attorney who understands recording procedure. Generally recording a document with an old date must be attached to an affidavit that is recorded with the notice of rescission attached. The affidavit explains that the attachment was inadvertently not recorded at the time it was created.

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Should a copy of the notice of rescission be filed in the court record also?

YES. If there is any way to get the recorded document into the court record, it should be pursued.

This presents title issues because if you are recording this long after events have transpired, some of which are also recorded as memorializing transactions, fake or real. Any recorded instruments that purports to be a memorialization of a transaction before the rescission was recorded would generally be given priority.
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The lawyer sent me an answer to my notice of rescission. Now what?
Either file to enforce the duties to be performed (if you are within one year of the date of delivery of the notice of rescission), or file a quiet title action if the one year has expired. There are several different scenarios actually, but this is the one I would focus upon.
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I am getting kicked out of bankruptcy court. Now what?
Getting “kicked out” of BKR court probably means that you are back in the state court system which might open some opportunities for you to get more into the court record. (Like an old rescission).
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My property is being sold. Does that mean that I have to get out?
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They can’t get you out without filing an unlawful detainer (eviction in some jurisdictions) based upon an asserted change of title. There might be a period of time between the sale and the attempt to get you out of the home (eviction or unlawful detainer). If the property is sold to a “third party” they want want rent from you, which could allow you to stay.
The unlawful detainer action presents another opportunity to raise the issue of rescission, since the entire action is based upon a valid change of title. It also sets off potentially another round for appeal, especially on the issue of rescission. Res Judicata and Collateral Estoppel do not apply to jurisdictional issues. If the rescission was mailed then by operation of the law the note and mortgage are void.
The defense is ordinarily that the “sale” was a fabrication based upon fictional claims and was contrary to the notice of rescission, which voided the note and mortgage upon which they were relying. The time for challenging the rescission has long passed. Hence all enforcement actions after the date of the 2009 rescission are void since they were based upon various claims attendant to paper instruments that were void, effective the day of delivery of the rescission.
Note that delivery of TILA Rescission notice is complete when dropped in a USPS mailbox and your testimony that it was sent via US Postal Service is all that is necessary as foundation.
I sent 2 notices of rescissions. Is that better or worse for me?
If I was defending against your claim of rescission I would argue that sending the 2016 rescission was either an admission that the earlier one had not been sent or that it was a concession that, for whatever reason, the 2009 rescission notice had been abandoned.
Hence I suggest you put very little emphasis on the new rescission and maximum emphasis on the old rescission.
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I sent the rescission less than 3 years after the modification but more than 3 years since the alleged consummation. Hoes my rescission affect my loan in that instance?
In most cases “modifications” are not treated as new loans. But the fact that something is called a modification and it really changes everything including the “lender” it may be possible to characterize it as a new loan subject to TILA Rescission. TILA Rescission hinges on whether the “modification” was a new loan — a fact, we would argue — that must be determined by trial. Since intent is part of the analysis of a contract, this could present another opportunity to force them to admit they don’t know the identity or intent of the creditor and whether said creditor had given them authority to make a new contract.
And the underlying narrative for this approach is that as a new contract, the “lender” was required to comply with disclosure requirements at the time of the new contract, thus triggering the three day right of rescission and the the three year limitation. Under my theory, based on Jesinoski, it doesn’t matter whether the three years has expired or not.
We know for certain that the notice of rescission is effective upon mailing; it is not based upon some contingent event or claim or court order. The date of consummation is itself a factual issue that can be in the pleading of the creditor (who is the only one with standing, the note and mortgage having been rendered void) claiming that the notice of rescission should be vacated based upon the three years, the date of consummation etc. 
Any alternative theory that puts the burden on the property owner would be contrary to the express wording of the statute and the SCOTUS ruling in Jesinoski. The statute 15 USC §1635 and SCOTUS are in complete agreement: there is no law suit required to make rescission effective. It would make the statutorily defined TILA Rescission event indefinite, requiring a court ruling before any rescission would be treated seriously. In other words, the opposite of what the statute says and the opposite of what SCOTUS said in Jesinoski. 
All contrary arguments are erroneous since they would insert a contingency where the statute contains no room for any contingency. The language of the statute bars any such contingency when it says that the TILA Rescission is effective upon delivery, by operation of law. If anyone wants the statute to say or mean anything different they must get their remedy from the legislature, not the courts, who have no authority whatsoever to interpret the statute otherwise. The status of any case involving foreclosure is that it does not exist. Hence the court is left ONLY with the power to perform the ministerial act of dismissing the case for lack of jurisdiction.
All this is important because we ought to be heading toward any defensive strategy that reveals the absence of a creditor. We are betting that the fight to conceal the name of the creditor is a cover for not knowing the the identity of the creditor, hence fatally undermining the authority as holder, servicer, trustee or anything else.
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What if consummation never occurred?
It may turn out that consummation between the parties to the note and mortgage never occurred. It’s important to remember that would mean the rescission is irrelevant since the loan contract does not exist. But such a finding by a court of competent jurisdiction would negate the legal effect of the note and mortgage; this is true as long as the note was not purchased for value in good faith by a buyer without knowledge of the borrower’s defenses.
In that case, the burden does shift to the homeowner and it is entirely possible that under that scenario there could be no consummation but nevertheless homeowner liability would continue on the falsely procured note and potentially the mortgage as well. The reason is simple: that is what the State statute says under Article 3 and Article 9 of the UCC, as adopted by all 50 states. The homeowner’s remedy in such a scenario would be limited to actions for damages against the intermediaries who perpetrated the the fraudulent and fictitious “transaction” in which the named lender failed to loan anything.

Filed under: BURDEN OF PROOF, foreclosure, jurisdiction, legal standing, MODIFICATION, Motions, originator, Pleading, quiet title, sham transactions, TILA rescission | Tagged: , , , , , , , , | 5 Comments »

Breaking it Down: What to Say and Do in an Unlawful Detainer or Eviction

Posted on December 21, 2017 by Neil Garfield

Homeowners seem to have more options than they think in an unlawful detainer action based upon my analysis. It is the first time in a nonjudicial foreclosure where the foreclosing party is actually making assertions and representations against which the homeowner may defend. The deciding factor is what to do at trial. And the answer, as usual, is well-timed aggressive objections mostly based upon foundation and hearsay, together with a cross examination that really drills down.

Winning an unlawful detainer action in a nonjudicial foreclosure reveals the open sores contained within the false claims of securitization or transfer.

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HAT TIP TO DAN EDSTROM

Matters affecting the validity of the trust deed or primary obligation itself, or other basic defects in the plaintiffs title, are neither properly raised in this summary proceeding for possession, nor are they concluded by the judgment.” (Emphasis added.) (Cheney v. Trauzettel (1937) 9 Cal.2d 158, 159-160.) My emphasis added

So we can assume that they are specifically preserving your right to sue for damages. But also, if they still have the property you can sue to get it back. If you do that and file a lis pendens they can’t sell it again. If a third party purchaser made the bid or otherwise has “bought” the property you probably can’t touch the third party — unless you can show that said purchaser did in fact know that the sale was defective. Actual knowledge defeats the presumptions of facially valid instruments and recorded instruments.

The principal point behind all this is that the entire nonjudicial scheme and structure becomes unconstitutional if in either the wording of the statutes or the way the statutes are applied deprive the homeowner of due process. Denial of due process includes putting a burden on the homeowner that would not be there if the case was brought as a judicial foreclosure. I’m not sure if any case says exactly that but I am sure it is true and would be upheld if challenged.


It is true that where the purchaser at a trustee’s sale proceeds under section 1161a of the Code of Civil Procedure he must prove his acquisition of title by purchase at the sale; but it is only to this limited extent, as provided by the statute, that the title may be litigated in such a proceeding. Hewitt v. Justice’ Court, 131 Cal.App. 439, 21 P.(2d) 641; Nineteenth Realty Co. v. Diggs, 134 Cal.App. 278, 25 P.(2d) 522; Berkeley Guarantee Building & Loan Ass’n v. Cunnyngham, 218 Cal. 714, 24 P.(2d) 782. — [160] * * * In our opinion, the plaintiff need only prove a sale in compliance with the statute and deed of trust, followed by purchase at such sale, and the defendant may raise objections only on that phase of the issue of title

So the direct elements are laid out here and other objections to title are preserved (see above):

  • The existence of a sale under nonjudicial statutes
  • Acquisition of title by purchase at the sale
  • Compliance with statutes
  • Compliance with deed of trust

The implied elements and issues are therefore as follows:

  • Was it a Trustee who conducted the sale? (i.e., was the substitution of Trustee valid?) If not, then the party who conducted the sale was not a trustee and the “sale” was not a trustee sale. If Substitution of Trustee occurred as the result of the intervention of a party who was not a beneficiary, then no substitution occurred. Thus no right of possession arises. The objection is to lack of foundation. The facial validity of the instrument raises only a rebuttable presumption.
  • Was the “acquisition” of title the result of a purchase — i.e., did someone pay cash or did someone submit a credit bid? If someone paid cash then a sale could only have occurred if the “seller” (i.e., the trustee) had title. This again goes to the issue of whether the substitution of trustee was a valid appointment. A credit bid could only have been submitted by a beneficiary under the deed of trust as defined by applicable statutes. If the party claiming to be a beneficiary was only an intervenor with no real interest in the debt, then the “bid” was neither backed by cash nor a debt owed by the homeowner to the intervenor. According there was no valid sale under the applicable statutes. Thus such a party would have no right to possession. The objection is to lack of foundation. The facial validity of the instrument raises only a rebuttable presumption.

The object is to prevent the burden of proof from falling onto the homeowner. By challenging the existence of a sale and the existence of a valid trustee, the burden stays on the Plaintiff. Thus you avoid the presumption of facial validity by well timed and well placed objections.

” `To establish that he is a proper plaintiff, one who has purchased property at a trustee’s sale and seeks to evict the occupant in possession must show that he acquired the property at a regularly conducted sale and thereafter ‘duly perfected’ his title. [Citation.]’ (Vella v. Hudgins (1977) 20 Cal.3d 251,255, 142 Cal.Rptr. 414,572 P.2d 28; see Cruce v. Stein (1956) 146 Cal.App.2d 688,692,304 P.2d 118; Kelliherv. Kelliher(1950) 101 Cal.App.2d 226,232,225 P.2d 554; Higgins v. Coyne (1946) 75 Cal.App.2d 69, 73, 170 P2d 25; [*953] Nineteenth Realty Co. v. Diggs (1933) 134 Cal.App. 278, 288-289, 25 P2d 522.) One who subsequently purchases property from the party who bought it at a trustee’s sale may bring an action for unlawful detainer under subdivision (b)(3) of section 1161a. (Evans v. Superior Court (1977) 67 Cai.App.3d 162, 169, 136 Cal.Rptr. 596.) However, the subsequent purchaser must prove that the statutory requirements have been satisfied, i.e., that the sale was conducted in accordance with section 2924 of the Civil Code and that title under such sale was duly perfected. {Ibid.) ‘Title is duly perfected when all steps have been taken to make it perfect, i.e. to convey to the purchaser that which he has purchased, valid and good beyond all reasonable doubt (Hocking v. Title Ins. & Trust Co, (1951), 37 Cal.2d 644, 649 [234 P.2d 625,40 A.L.R.2d 1238] ), which includes good record title (Gwin v. Calegaris (1903), 139 Cal. 384 [73 P. 851] ), (Kessler v. Bridge (1958) 161 Cal.App.2d Supp. 837, 841, 327 P.2d 241.) ¶ To the limited extent provided by subdivision (b){3) of section 1161a, title to the property may be litigated in an unlawful detainer proceeding. (Cheney v. Trauzettel (1937) 9 Cal.2d 158, 159, 69 P.2d 832.) While an equitable attack on title is not permitted (Cheney, supra, 9 Cal.2d at p. 160, 69 P.2d 832), issues of law affecting the validity of the foreclosure sale or of title are properly litigated. (Seidel) v. Anglo-California Trust Co. (1942) 55 Cai.App.2d 913, 922, 132 P.2d 12, approved in Vella v. Hudgins, supra, 20 Cal.3d at p. 256, 142 Cal.Rptr. 414, 572 P.2d 28.)’ ” (Stephens, Partain & Cunningham v. Hollis (1987) 196 Cai.App.3d 948, 952-953.)
 
Here the court goes further in describing the elements. The assumption is that a trustee sale has occurred and that title has been perfected. If you let them prove that, they win.
  • acquisition of property
  • regularly conducted sale
  • duly perfecting title

The burden on the party seeking possession is to prove its case “beyond all reasonable doubt.” That is a high bar. If you raise real questions and issues in your objections, motion to strike testimony and exhibits etc. they would then be deemed to have failed to meet their burden of proof.

Don’t assume that those elements are present “but” you have a counterargument. The purpose of the law on this procedure to gain possession of property is to assure that anyone who follows the rules in a bona fide sale and acquisition will get POSSESSION. The rights of the homeowner to accuse the parties of fraud or anything else are eliminated in an action for possession. But you can challenge whether the sale actually occurred and whether the party who did it was in fact a trustee. 

There is also another factor which is whether the Trustee, if he is a Trustee, was acting in accordance with statutes and the general doctrine of acting in good faith. The alleged Trustee must be able to say that it was in fact the “new” beneficiary who executed the substitution of Trustee, or who gave instructions for issuing a Notice of Default and Notice of sale.

If the “successor” Trustee does not know whether the “successor” party is a beneficiary or not, then the foundation testimony and exhibits must come from someone who can establish beyond all reasonable doubt that the foreclosure proceeding emanated from a party who was in fact the owner of the debt and therefore the beneficiary under the deed of trust. 

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Filed under: burden of persuasion, BURDEN OF PROOF, Eviction, foreclosure, Trail Objections, Unlawful Detainer | Tagged: , , , , , , , , , , , | 22 Comments »

Eviction Immediately After Foreclosure?

Posted on May 20, 2017 by Neil Garfield

Lenders who foreclose and take ownership of security property via credit bid at the foreclosure sale often confront a tenant whose lease has been extinguished, but who would rather not vacate the property.

Just how quickly can the lender serve a notice to quit and start the eviction ball rolling?

A recent decision from California’s Second Appellate District — Dr. Leevil, LLC v. Westlake Health Care Center — clarifies the timing requirements.

Facts: lender forecloses, serves notice to quit immediately, then later records Trustee’s Deed and sues for unlawful detainer

Westlake Village Property, L.P. owned property containing a skilled nursing facility.  Westlake Village leased the facility to Westlake Health Care Center, an affiliated corporation.

The lease was for a 20-year term, and contained an automatic subordination clause, as many commercial leases do.

Six years into the lease, Westlake Village took out a loan from TomatoBank, secured by a deed of trust on the nursing facility property.  Westlake Village defaulted on the loan and declared bankruptcy.

The bank sold the loan to Dr. Leevil, LLC.  Leevil obtained relief from the bankruptcy stay, instituted a nonjudicial foreclosure sale (trustee’s sale), and purchased the nursing facility via credit bid.

The day after the trustee’s sale, Leevil served Westlake Health with a notice to quit.  Leevil recorded the Trustee’s Deed five days later.

Westlake Health refused to vacate the property, and Leevil sued for unlawful detainer.  Westlake Health claimed that its lease was senior to the deed of trust and that the notice to quit was invalid because it was served before the Trustee’s Deed was recorded.

Trial court’s judgment

The trial court ruled that the lease was subordinate to the deed of trust and was extinguished by the trustee’s sale.

The court also found that the notice to quit was valid, and ordered eviction.

Westlake Health appealed.

Court of Appeal’s opinion

The court of appeal affirmed the judgment in favor of Leevil.

If a lease executed before the recordation of a deed of trust does not contain a subordination clause, then the lease will survive a subsequent foreclosure — meaning the foreclosure purchaser takes the property “subject to” the lease.

But here, the court observed that the lease contained an automatic subordination clause.  As such, Leevil’s foreclosure sale extinguished Westlake Health’s lease.

The court also held that the Code of Civil Procedure (section 1161a) “does not require that title be perfected (i.e., that the trustee’s deed be recorded) before service of the three-day notice.  It requires that title be perfected before a tenant ‘may be removed’ from the property.”

In other words, a notice to quit (a prerequisite to an unlawful detainer lawsuit) is valid as long as the trustee’s deed is recorded before the owner files a lawsuit for unlawful detainer.

Lesson

When a lease is extinguished by a foreclosure sale due to a subordination clause, the foreclosure sale purchaser may immediately serve a notice to quit.  Under the Dr. Leevil decision, the notice to quit will be held valid as long as the trustee’s deed is recorded before the owner files a lawsuit for unlawful detainer.

[View source.]

http://www.jdsupra.com/legalnews/eviction-immediately-after-foreclosure-16755/

Filed under: foreclosure | Tagged: , | 1 Comment »

VA Court Finally Recognizes Circular Reasoning of the Banks

Posted on June 29, 2016 by Neil Garfield

“Because I said so” or “because I already did it” is not a recognizable legal ground for possession of property even after the forced sale of the property. In an action for possession of property, the taker must establish that it is the legal owner and that the ownership was obtained lawfully and properly. The fact that a prior judgment was entered allowing the foreclosure sale is not dispositive.

The “presumed facts” are directly contrary to the actual facts. Or, as I have stated it in other circumstances, the money trail does not match the paper trail. There are no real transactions in most instances.

THE FOLLOWING ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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see http://4closurefraud.org/2016/06/28/parrish-v-fnma-subject-matter-jurisdiction-unlawful-detainer-supreme-court-of-virginia-va%c2%adcates-foreclosure-judgement/

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For ten years — about the same amount of time that I said the rescission is valid upon mailing and did not require lawsuit or tender — I have advocated and encouraged lawyers for homeowners faced with eviction, writ of possession, or unlawful detainer to adopt a simple logic. Eviction is proper when the owner and possessor merely leases the property or grants some sort of title that has expired. That is certain and it is final and nobody disagrees with it.

The problem in the Courts is that judges have routinely ignored one simple basic fact: the current occupier of the property had legal title and the total right to possession of the property before this new party came into the picture and claimed the right to title and now claims the right to possession. Final Judgments entered in the Court records are not dispositive as pointed out by this Virginia court and as pointed out by the Supreme Court of the State of California in Yvanova.

It is the second part of the “formula” that came up in a Virginia Court, which has been one of the most difficult states in the nation for homeowners contesting the baseless actions of foreclosing parties. The logic is simple. Where the homeowner was clearly the owner of record and the possessor, the party seeking foreclosure must assert (nearly always absent) and prove that it came into title ownership lawfully and properly.

The interesting thing about this is that if the homeowner contests the eviction or unlawful detainer and does so with sufficient grounds as to create doubt as to whether the party seeking eviction lawfully acquired title, THEN the burden shifts to the party seeking eviction to prove that everything that happened before was lawful and proper. And we all know that without legal presumptions being improperly applied practically none of the evictions were or could be proper.

Like other things this is not a magic bullet. But it provides some daylight. The Virginia court held that as long as the homeowner successfully raises a question about title, the court hearing the eviction claim must dismiss the claim immediately because it has no right or jurisdiction actually try a case based upon title claims. I think you would find similar laws in other states where, for example, if County court the jurisdiction is far more limited than it is in Circuit Court. The County Court may hear and decide and eviction but as soon as the Court sees a bona fide question about title, it must dismiss the case leaving the parties to sort out their differences elsewhere. That might be in state Circuit Court or Federal District Court.

The party seeking eviction would need to go to a court of competent jurisdiction and plead that (a) they are the lawful title owner (b) they are entitled to possession and (3) the current occupants have lost their right to possession even though they had both title and possession before the foreclosure. Any allegation based in actual fact must be proven by actual facts and legal presumptions clearly should not apply once the lower court has already determined that there is doubt as to whether the documents for title were validly issued. This might prevent the party seeking to confirm title and seeking the eviction from using any legal presumptions since the documents themselves have already been determined by a lower court to lack trustworthiness or authenticity or legal effect.

One thing to keep in mind is that without legal presumptions none of the foreclosures could go forward because there is no proof in existence, in most cases, of the existence of an executed loan contract between the homeowner and the “originator.” The “presumed facts” are directly contrary to the actual facts. Or, as I have stated it in other circumstances, the money trail does not match the paper trail. There are no real transactions in most instances. The paper trail creates legal presumptions but as soon as a court orders that the foreclosing party open its books to determine whether there were actual transactions, actual loans by the parties upon whom the forecloser relies, the bank case falls to pieces.

… a conundrum because some actions for unlawful detainer necessarily turn on the question of title. Unlawful detainer is an action against a defendant who lawfully entered into possession of real property but whose right to lawful possession has since expired. It is brought by a plaintiff lawfully entitled to possession at the time of suit, which the defendant is then unlawfully withholding. Allen v. Gibson, 25 Va. (4 Rand.) 468, 473 (1826). The validity of the plaintiff’s right of possession is an issue that, when disputed, must be determined in the adjudication of the unlawful detainer action. Id. at 474. The plaintiff must show either (1) prior actual possession, which was then yielded to the defendant under some temporary or defeasible estate that has ended, or (2) a right of possession acquired after the defendant’s entry. Id. at 474-76.

Whether the plaintiff has a right of possession will not always present a question of title. Such a question will never arise in the first class of cases, where the plaintiff’s right is based on prior actual possession. For example, a landlord may bring an action for unlawful detainer against a tenant who holds possession of the leased premises in violation of the lease or after it has expired. In such cases, the defendant’s possession is derivative of the plaintiff’s title, and the defendant is not permitted to challenge it. [e.s.]

Emerick v. Tavener, 50 Va. (9 Gratt.) 220, 223 (1852). However, a plaintiff in the second class of cases, who claims a right of possession acquired after the defendant’s original, lawful entry, must show the validity of that right. When the plaintiff’s after-acquired right of possession is based on a claim of title, the plaintiff may be required to establish the validity of that title. Corbett v. Nutt, 59 Va. (18 Gratt.) 624, 648 (1868).2 Actions for unlawful detainer in the foreclosure context generally fall into this category. [e.s.]

Where the right of possession depends solely upon a claim of title, the question of whether that title is valid is a threshold question in an unlawful detainer action. While a court’s resolution of that question in an unlawful detainer action may not, by statute, be preclusive in actions for ejectment or to quiet title, the court trying the unlawful detainer action nevertheless must weigh the parties’ competing arguments about validity to determine whether a plaintiff’s prima facie right of possession evidenced by a trustee’s deed has been rebutted by the defendant. [e.s.]

In most foreclosure cases, a trustee’s deed will satisfy the foreclosure purchaser’s burden to establish that it acquired a right of possession after the homeowner’s original, lawful entry, and the homeowner will have no good-faith basis to contest it. However, in limited circumstances, the homeowner could allege facts sufficient to place the validity of the trustee’s deed in doubt. In such cases, the general district court’s lack of subject matter jurisdiction to try title supersedes its subject matter jurisdiction to try unlawful detainer and the court must dismiss the case without prejudice. Warwick, 56 Va. (15 Gratt.) at 542 (“[O]n being convinced that the case involves a bona fide claim of title to real estate,” a court not of record “is bound to dismiss [the proceeding] immediately.”).

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Does Yvanova Provide a Back Door to Closed Cases?

Posted on March 18, 2016 by Neil Garfield

That is the question I am hearing from multiple people. My provisional answer is that in my opinion there is a strong argument for using it if the property has not been liquidated after the foreclosure auction. There might be a grey area while the property is REO and there might be a grey area where the property has been sold but the issue of a void assignment is raised in an eviction procedure. It will strain the minds of judges even more, but these issues are certain to come up. As things continue to progress Judges will shift from looking askance at borrowers and thinking their defenses are all hairsplitting ways to get out of a debt and get a free house. Upon reflection, over the next couple of years, you will see an increasing number of judges taking the same cynical view and turning it toward the banks and servicers who in most cases function neither as banks or servicers.

The Yvanova court took great pains to say that this was a very narrow ruling. Starting with that one might argue it only applied to that specific case. But they went further than that and we all know it. SO it stands for the proposition that a void assignment can be the basis of a wrongful foreclosure. AND most BANK LAWYERS agree that is a huge problem for them, at least in California but they think it will adopted across the country and I agree with the Bank lawyers on that assessment.

The reason is simple logic. If the foreclosure is wrongful then it seems stupidly simple to say that it was wrong in the first place. If it was “wrong” the questions that emerge in legal scholarship arise from two main paths.

What does “wrong” mean. Or to put it in Yvanova language is wrong the same as void or is it voidable. This would have a huge impact on issues of jurisdiction, res judicata, collateral estoppel etc. Does it mean that it was wrong and you can get damages or does it mean that it was wrong and therefore the homeowner still owns the house. I lean towards the former not by preference but by what I think the court was saying between the lines. The whole point of nonjudicial foreclosure (amongst two other points that are obvious) is to provide stability and confidence in the title system. So if a wrong foreclosure occurs the title would most likely remain in whoever bought it at auction — although the purgatory in which many properties remain (REO) might create a grey area in which there is no prejudice in vacating the sale. Indeed if the party holding the “FINAL” title did so by fraud (using a void assignment) then equity would seem to demand return of title to the homeowner. AND THEN you still have the problem of evictions or writs of possession or whatever they are called in your state. Title is one thing but possession is another. If you raise the void assignment can you defeat possession even if you can’t defeat the title transfer? It would SEEM not but equity would demand that a thief not further the rewards of his ill-gotten gains.

Next path. Procedure, evidence and objections. Going back in time the homeowner might have objected or even alleged things that the Yvanova court now finds to have merit. So a lay person might think that is all they need is to show the void assignment and presto they have title or money or both in their hands. Not so fast. Due process is intended to allow a person to be heard and the justice system is designed and created to FINALIZE disputes, whether the decision is right or wrong. SO questions abound about what happened at the trial court level. But there was a remedy for that. It is called an appeal. And there are choices to even go to Federal Court if the state court is rubber stamping void instruments. But the time for doing that has expired on all but a few cases and the judicial doctrine of finality is the most difficult to overcome. Even a condemned man usually will be put to death even if there is actual evidence of innocence after a period of time has expired and a number of appeals have been exhausted.

SO that is my long winded way of saying I don’t know. If Yvanova opens the door to many new openings of closed cases, it certainly doesn’t say so. But a defense of a current case — even one amended to cite Yvanova, might fare much better.

The real answer: pick a path and try it.

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Utah Judge Voids Foreclosure Sale — It Never Happened

Posted on November 11, 2014 by Neil Garfield

For more information or assistance please call 520-405-1688 or 954-494-6000

——————————

see http://www.kcsg.com/view/full_story/25831345/article-Utah-Homeowner-Wins-Lawsuit-Against-Bank-of-America-in-Illegal-Foreclosure-Action?instance=more_local_news1

see Judges Order at

Click to access JC9H_Decision_and_Order_140500067.pdf

This case shows how Recontrust — an entity created and controlled by Bank of America — goes down in flames AFTER the sale of the property. The Judge found that Reconstrust was not a proper “substitute trustee” and in my opinion neither are any of the other “substitute trustees” in the context of loans subject to false claims of securitization.

The case is a direct instruction to do what I have been advocating for years. If you think you have a meritorious defense or attack on the foreclosure, deny the implied claims, and plead and prove that your objection is not based upon procedural irregularities, but rather on the fact that the party seeking to sell or foreclose the property never had any right to appear must less enforce anything involved in the loan.

In this case the status was that the sale had already occurred and Recontrust was seeking the usual eviction. The Judge, separating the chafe from reality simply said that Recontrust had no rights whatsoever and that the eviction would not occur (judgment entered for homeowner) and that the reason why the homeowners wins is that the foreclosure sale was void ab initio.

The lesson is that if you are going to try to split hairs you are at best headed for a continuance so that there is an appearance of due process. But if you really want to win, then you need to learn something about securitization — the concept, the written documents and the actions by parties claiming rights under self-serving documents that are completely false.

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Time Running Out on Foreclosure Renters

Posted on December 19, 2012 by Neil Garfield

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For assistance with presenting a case for wrongful foreclosure, please call 520-405-1688, customer service, who will put you in touch with an attorney in the states of Florida, California, Ohio, and Nevada. (NOTE: Chapter 11 may be easier than you think).

Editor’s Comment: It would sound like a joke if it were not so real. First you oversell mortgages, throwing underwriting standards overboard, then comes the inevitable foreclosure and eviction of the homeowner — but not the tenant who WAS protected under Federal law but is no longer going to receive that protection. Millions of people are going to be seeking rental accommodations.

The result? rental prices will go up creating a new tax on those who rent, and housing starts will increase. Think about it, we build a bunch of houses, sell them as exorbitant rates knowing we are going to get thrown back in our lap, we create blighted abandoned neighborhoods and towns and subdivisions, and the solution selected is not to find a way to put people in homes that are unoccupied but to build more houses.

Policy makers like new construction because of the impact on jobs. Investors like renting because they get higher and higher rental income on their properties. But the essential problem of homelessness will remain because the rents will be priced outside the capability of the prospective renters.

Wouldn’t it be a better idea to keep the homes occupied, to prevent blighted neighborhoods where the cities bulldoze the homes away because the banks walked away from their responsibility as “owners?” Wouldn’t it be a better idea to keep getting tax revenue from these homes? Wouldn’t it be better for utilities and local businesses to have the people occupying these homes pay their bills and revive a stagnant economy and unemployment?

Of course we could start with extending the rights of tenants to stay in homes legally rented to them by the homeowners. But amongst the millions soon to be displaced are those homeowners who occupy their homes, who put earnest money into the deal and more money to fix up and furnish the place. Most of them had no idea that the amount demanded in the notice of default, in the foreclosure and in the auction was simply a wild guess without taking into account the money received from insurance, credit default swaps and federal bailouts.

Most had no idea that the party foreclosing on them had not invested one dime into the funding or purchase of their loan. These people were every much a victim of fraud as the investors who bought bogus mortgage bonds. We know the remedy for fraud but in this country it has a twist. If you are big enough and you commit fraud you to keep the money and property obtained through illegal or criminal means. But if you are the little guy then you get prosecuted for numbers on an application form that you never saw, much less filled out until closing along with a 3 inch stack of papers to initial and sign.

PRACTICE HINT: WHETHER YOU ARE REPRESENTING THE HOMEOWNER OR THE RENTER THERE ARE VIABLE, WINNABLE DEFENSES THROUGH DENY AND DISCOVER. WITH RENTERS THE DEFENSE WILL BE RAISED THAT A RENTER CANNOT CHALLENGE TITLE.

But the only reason why the party seeking eviction (forcible detainer) has standing is that title changed. The allegation of a change in title is an essential part of their pleading.

You should argue that if they bring up title then you have the right and obligation to defend it by showing that the title that was recorded was procured through fraudulent means.

The renter still owes the money to the homeowner. The response should be a counterclaim or interpleader in which the homeowner and the “new” owner fight it out over who gets the rent money. Otherwise the renter could be twice liable for the same rent if the unit owner prevails in overturning the foreclosure.

Renters At Risk In Foreclosure Crisis Rely On Short-Term Federal Law

Renters Foreclosure Crisis

A group of homeless people sit around the fire at their homeless encampment near the Mississippi River on Feb. 23, 2012, in St. Louis. (AP Photo/Tom Gannam)

A key law that has prevented millions of low-income tenants from becoming homeless is set to expire at the end of the 113th Congress, kicking off what experts warn could be a new wave of evictions.

Homelessness is up 16 percent among families in major cities since the beginning of the foreclosure crisis, according to a report from the U.S. Conference of Mayors, and the number of renters affected by foreclosure has tripled in the past three years.

While public attention has centered on homeowners, research shows rental properties constitute an estimated 20 percent of all foreclosures, and 40 percent of families facing foreclosure-related evictions are renters. Those numbers translate into millions of Americans at risk of homelessness, many of them children.

What stands between many of those children and the streets is a little-known federal law that, barring congressional intervention, will expire in 2014.

In 2009, the Protecting Tenants at Foreclosure Act (PTFA) granted renters the right to stay in their homes until the end of their lease or, if they have no lease, for a minimum of 90 days. Without that guarantee, renters are dependent on a patchwork system of state and local protections that range from quite good — in California and Connecticut, for instance — to completely inadequate.

“States have not stepped up to ensure protections within their jurisdictions,” said Tristia Bauman, a housing attorney at the National Law Center on Homelessness & Poverty. “And so the PTFA is still the best protection available and we want to make sure that it lasts beyond 2014.”

Bauman is the primary author of the law center’s new report, “Eviction (Without) Notice,” that warns the homelessness problem for renters will only continue to worsen. The total number of renters has increased by 5.1 million nationally since 2000. In 2010, renters made up the majority of households in several of our nation’s most populous cities, and their numbers are expected to grow.

“This report shows how important PTFA’s protections are and the need to make them permanent,” said Maria Foscarinis, executive director of the National Law Center on Homelessness & Poverty in a statement. “But it also shows that, because many people are not aware of the law and oversight is limited, PTFA rights are often violated — leaving families across the country out on the street.”

A survey of 156 renters, many of them unaware of their rights under federal law, found the failure of new owners to determine the occupancy status of residents in foreclosed properties to be among the top PTFA violations cited by respondents.

“We found that new owners may make no effort to determine if the property is occupied,” said Bauman. “The tenant is left in a position where they may not know their properties have changed hands until they come home and their door is locked.”

A survey of 227 legal rights advocates cited lack of communication from new owners (85.9 percent); illegal, misleading or inaccurate written notices (68.1 percent); and harassment from real estate agents, law firms or bank representatives (61.1 percent) as top problems.

Pointing to these violations of the PTFA and the ongoing risk of homelessness as a result of the foreclosure crisis, Bauman said, “All of this speaks to the need for this law to continue to be a protection.”

Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: , , , , , , , , , , , | 39 Comments »

1.5 Million Seniors Foreclosed — Most Illegally

Posted on December 4, 2012 by Neil Garfield

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Editor’s Comment and Analysis: As I predicted (along with many others), the foreclosure scam is reaching further and further to all segments of the population. With more than half of all homeowners under 40 being “underwater” and the release of information showing that widows are being hit hardest, the statistics showing 1.5 million foreclosures on people over 50 are hardly surprising. But they don’t tell the whole human story of grief, confusion and disbelief that the banks would engage in large-scale fraud.

It is ironic that many of the millions who were hit with foreclosure were the same people who joined the public outcry against mortgage relief because they were playing by the rules, making their payments, and also losing money. They failed to educate themselves and their naive belief that the debts were legitimate and the borrowers were deadbeats led the public, the media, and those who pull the levers of power in Federal and State government to conclude that the debts were legitimate and the market simply went sour.

To call these debts legitimate in the face of absolutely incontrovertible facts regarding appraisal fraud, forgery, robo-signing, and lies told in in court is akin to drawing the distinction between rape and legitimate rape. You can argue all you want about what a woman should look for to “detect” a possible criminal and and argue circumstances when she “asked for it” but rape is rape.

And you can argue all you want about how homeowners should have read a pile of papers 6 inches thick to determine what was really going to happen to their lives if they signed those papers and that they should have investigated who was behind the easy money, but in the end they were the victims, just like many investors were the victims.

And until we agree that the money the banks received should have been allocated to the investors on whose behalf they received the money we won’t know the amount of the debt of the homeowner, if any, that is remaining. Allowing foreclosures to start, foreclosure “sales” to be conducted, foreclosure deeds to be issued “for cash received” when they accepted a credit bid from a non-creditor, and then allowing evictions was and remains wrong.

In fact, while I have not seen a study analyzing this, I’ll bet you will find that the same people who were foreclosed were on pensions paid by managed funds that bought the bogus mortgage bonds that enabled the mortgage meltdown in the first place.

So the same people were both losers in investing in mortgages and then losers when their own money was used against them in deals that were impossible to be viable.

The tragic irony here is that most borrowers still don’t get it. They also think the debts are legitimate and that any claims of fraud or predatory loan practices are just ways of delaying the inevitable foreclosure and eviction.

Precious few homeowners have any idea that they have legitimate defenses and remedies that would lead to a mortgage-free house or a modification that uses fair market value as a basis for the loan balance and applies the payments received by creditors from insurance, credit default swaps and federal bailouts.

In what I have called Deny and Discover, lawyers following this blog or who have arrived at the same conclusions on their own are winning case after case. Mark Stopa published an article about 14 cases in Florida in which 14 different judges entered summary final judgment FOR THE BORROWER!

As the banks plant articles warning against strategic defaults, ultimately, there is no debtor’s prison in this country and they can’t do a thing about it. And widows, pensioners and others who are on fixed incomes and facing rising medical and living expenses are forced into default. This mess will take decades to clear up unless government does its job of governing and applying the same set of rules to everyone. If you commit fraud, you owe restitution and you are punished either civilly or criminally.

Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: , , , , , , , , , , | 39 Comments »

The Banks, Rushing To Foreclose So They Can Sit On Vacant Homes

Posted on May 10, 2012 by Neil Garfield

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Editor’s Comment:

Author: 

These damn judges here in Florida, they really need to wake up, start working harder and grant more foreclosures more quickly.  Hurry up already, and stop whining about budget cuts and staff positions cut, and who cares that the entire state court system is funded by less than one percent of the state budget, and shut up about case loads that have tripled to 3,000 or more cases per judge and frazzled judicial assistant.  Just grant those damn foreclosure judgments….after all, everyone knows the economy cannot recover until these damn slacking judges push through this foreclosure backlog….right?

Oh wait a minute, there’s apparently a bit of a fly in this ointment.  You see, apparently the banks are cancelling foreclosure sales just as quickly as our good judges are able to sign those damn Final Judgments of Foreclosure…yup…apparently, now wait just a dadgummed minute.

You mean to tell me our elected circuit court judges are busy throwing families out into the streets just so the banks can amass ever larger portfolios of vacant and abandoned properties that they are apparently not responsible for taking care of?

Well shut my mouth!  You don’t say?  Really!  No way?  Do you mean to tell me we can’t blame all this on our under-funded judges and this ain’t the fault of those damn ethically-challenged foreclosure defense attorneys what with all their delay tactics and pesky rules and those absurd arguments about THE LAW…blah, blah, blah.

When exactly will this nation wake up and start directing appropriate anger and rage at the real evil that’s hard at work, everyday all across this sleeping nation?

From the Tampa Times:

It’s an oft-repeated pattern.

In the last 12 months, lenders have canceled auctions on 4,204 properties in Pinellas and Hillsborough counties. Sales have been canceled two, three, even nine times on some homes.

In many cases, banks delay seizures to avoid having to pay maintenance bills or homeowner association fees. Meanwhile, neighbors fend off vandals and thieves and worry about property values falling because of the deteriorating houses.

The repeated cancellations burden the court system.

“These never seem to go away,” said Thomas McGrady, chief judge of the Pinellas-Pasco County Circuit. “It’s a nuisance.”

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Mortgage Rates in U.S. Decline to Record Lows With 30-Year Loan at 3.84%

Posted on May 7, 2012 by Neil Garfield

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Editor’s Comment:

It appears as though Bloomberg has joined the media club tacit agreement to ignore housing and more particularly Investment Banking or relegate them to just another statistic. The possibilities of a deep, long recession created by the Banks using consumer debt are avoiđed and ignored regardless of the writer or projection based upon reliable indexes.

Why is it that Bloomberg News refuses to tell us the news? The facts are that median income has been flat for more than 30 years. The financial sector convinced the government to allow banks to replace income with consumer debt. The crescendo was reached in the housing market where the Case/Schiller index shows a flash spike in prices of homes while the values of homes remained constant. The culprit is always the same — the lure of lower payments with the result being the oppressive amount of debt burden that can no longer be avoided or ignored. The median consumer has neither the cash nor credit to buy.

Each year we hear predictions of a recovery in the housing market, or that green shoots are appearing. We congratulate ourselves on avoiding the abyss. But the predictions and the congratulations are either premature or they will forever be wrong.

The financial sector is allowed to play in our economy for only one reason— to provide capital to satisfy the needs of business for innovation, growth and operations. Instead, we find ourselves with bloated TBTF myths, the capital drained from our middle and lower classes that would be spent supporting an economy of production and service. That money has been acquired and maintained by the financal sector giants, notwithstanding the reports of layoffs.

From any perspective other than one driven by ideology one must admit that the economy has undergone a change in its foundation — and that these changes are ephemeral and cannot be sustained. With GDP now reliant on figures from the financial sector which for the longest time hovered around 16%, our “economy” would be 50% LESS without the financial sector reporting bloated revenues and profits just as they contributed to the false spike in prices of homes. Bloated incomes inflated the stampede of workers to Wall Street.

Investigative reporting shows that the tier 2 yield spread premium imposed by the investment bankers — taking huge amounts of investment capital and converting the capital into service “income” — forced a structure that could not work, was guaranteed not to work and which ultimately did fail with the TBTF banks reaping profits while the rest of the economy suffered.

The current economic structure is equally unsustainable with income and wealth inequality reaching disturbing levels. What happens when you wake up and realize that the real economy of production of goods and service is actually, according to your own figures, worth 1/3 less than what we are reporting as GDP. How will we explain increasing profits reported by the TBTF banks? where did that money come from? Is it real or is it just what we want to hear want to believe and are afraid to face?


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People Have Answers, Will Anyone Listen?

Posted on May 3, 2012 by Neil Garfield

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Editor’s Comment: 

Thanks to Home Preservation Network for alerting us to John Griffith’s Statement before the Congressional Progressive Caucus U.S. House of Representatives.  See his statement below.  

People who know the systemic flaws caused by Wall Street are getting closer to the microphone. The Banks are hoping it is too late — but I don’t think we are even close to the point where the blame shifts solidly to their illegal activities. The testimony is clear, well-balanced, and based on facts. 

On the high costs of foreclosure John Griffith proves the point that there is an “invisible hand” pushing homes into foreclosure when they should be settled modified under HAMP. There can be no doubt nor any need for interpretation — even the smiliest analysis shows that investors would be better off accepting modification proposals to a huge degree. Yet most people, especially those that fail to add tacit procuration language in their proposal and who fail to include an economic analysis, submit proposals that provide proceeds to investors that are at least 50% higher than the projected return from foreclosure. And that is the most liberal estimate. Think about all those tens of thousands of homes being bull-dozed. What return did the investor get on those?

That is why we now include a HAMP analysis in support of proposals as part of our forensic analysis. We were given the idea by Martin Andelman (Mandelman Matters). When we performed the analysis the results were startling and clearly showed, as some judges around the country have pointed out, that the HAMP loan modification proposals were NOT considered. In those cases where the burden if proof was placed on the pretender lender, it was clear that they never had any intention other than foreclosure. Upon findings like that, the cases settled just like every case where the pretender loses the battle on discovery.

Despite clear predictions of increased strategic defaults based upon data that shows that strategic defaults are increasing at an exponential level, the Bank narrative is that if they let homeowners modify mortgages, it will hurt the Market and encourage more deadbeats to do the same. The risk of strategic defaults comes not from people delinquent in their payments but from businesspeople who look at the principal due, see no hope that the value of the home will rise substantially for decades, and see that the home is worth less than half the mortgage claimed. No reasonable business person would maintain the status quo. 

The case for principal reductions (corrections) is made clear by the one simple fact that the homes are not worth and never were worth the value of the used in true loans. The failure of the financial industry to perform simple, long-standing underwriting duties — like verifying the value of the collateral created a risk for the “lenders” (whoever they are) that did not exist and was present without any input from the borrower who was relying on the same appraisals that the Banks intentionally cooked up so they could move the money and earn their fees.

Many people are suggesting paths forward. Those that are serious and not just positioning in an election year, recognize that the station becomes more muddled each day, the false foreclosures on fatally defective documents must stop, but that the buying and selling and refinancing of properties presents still more problems and risks. In the end the solution must hold the perpetrators to account and deliver relief to homeowners who have an opportunity to maintain possession and ownership of their homes and who may have the right to recapture fraudulently foreclosed homes with illegal evictions. The homes have been stolen. It is time to catch the thief, return the purse and seize the property of the thief to recapture ill-gotten gains.

Statement of John Griffith Policy Analyst Center for American Progress Action Fund

Before

The Congressional Progressive Caucus U.S. House of Representatives

Hearing On

Turning the Tide: Preventing More Foreclosures and Holding Wrong-Doers Accountable

Good afternoon Co-Chairman Grijalva, Co-Chairman Ellison, and members of the caucus. I am John Griffith, an Economic Policy Analyst at the Center for American Progress Action Fund, where my work focuses on housing policy.

It is an honor to be here today to discuss ways to soften the blow of the ongoing foreclosure crisis. It’s clear that lenders, investors, and policymakers—particularly the government-controlled mortgage giants Fannie Mae and Freddie Mac—must do all they can to avoid another wave of costly and economy-crushing foreclosures. Today I will discuss why principal reduction—lowering the amount the borrower actually owes on a loan in exchange for a higher likelihood of repayment—is a critical tool in that effort.

Specifically, I will discuss the following:

1      First, the high cost of foreclosure. Foreclosure is typically the worst outcome for every party involved, since it results in extraordinarily high costs to borrowers, lenders, and investors, not to mention the carry-on effects for the surrounding community.

2      Second, the economic case for principal reduction. Research shows that equity is an important predictor of default. Since principal reduction is the only way to permanently improve a struggling borrower’s equity position, it is often the most effective way to help a deeply underwater borrower avoid foreclosure.

3      Third, the business case for Fannie and Freddie to embrace principal reduction. By refusing to offer write-downs on the loans they own or guarantee, Fannie, Freddie, and their regulator, the Federal Housing Finance Agency, or FHFA, are significantly lagging behind the private sector. And FHFA’s own analysis shows that it can be a money-saver: Principal reductions would save the enterprises about $10 billion compared to doing nothing, and $1.7 billion compared to alternative foreclosure mitigation tools, according to data released earlier this month.

4      Fourth, a possible path forward. In a recent report my former colleague Jordan Eizenga and I propose a principal-reduction pilot at Fannie and Freddie that focuses on deeply underwater borrowers facing long-term economic hardships. The pilot would include special rules to maximize returns to Fannie, Freddie, and the taxpayers supporting them without creating skewed incentives for borrowers.

Fifth, a bit of perspective. To adequately meet the challenge before us, any principal-reduction initiative must be part of a multipronged

To read John Griffith’s entire testimony go to: http://www.americanprogressaction.org/issues/2012/04/pdf/griffith_testimony.pdf


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Guest Writer Shares Info on Fraud in CA Foreclosure Cases

Posted on April 27, 2012 by Neil Garfield

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Editor’s Comment: The following information was submitted to the blog by a law firm.  We do not know this law firm.  We are simply passing along information that may be of interest to Californians.  As always, please do your research.

From counsel for Consumer Rights Defenders for our loyal followers, you may be interested in this California information which is not meant to be legal advise, just some information that is public knowledge. Call if you need foreclosure help at 818.453.3585 ask for Steve or Sara.   Ms. Stephens Esq7777@aol.com

___________

Elements of fraud cause of action: A plaintiff seeking a remedy based upon fraud must allege and prove all of the following basic elements:

· Defendant’s false representation or concealment of a ‘material’ fact (see Rest.2d Torts | 538(2)(a); Engalla v. Permanente Med. Group, Inc. (1997) 15 Cal.4th 951, 977, 64 Cal.Rptr.2d 843, 859–misrepresentation deemed ‘material’ if ‘a reasonable (person) would attach importance to its existence or nonexistence in determining his choice of action in the transaction’);

· Defendant made the representation with knowledge of its falsity or without sufficient knowledge of the subject to warrant a representation;

· The representation was made with the intent to induce plaintiff (or a class to which plaintiff belonged) to act upon it (see Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 869, 76 Cal.Rptr.3d 325, 333–fraud by false representations means intent to induce ‘reliance’; fraud by concealment involves intent to induce ‘conduct’);

· Plaintiff entered into the contract in ‘justifiable reliance’ upon the representation (see Ostayan v. Serrano Reconveyance Co. (2000) 77 Cal.App.4th 1411, 1419, 92 Cal.Rptr.2d 577, 583–P’s admission of no reliance on a representation made by D precludes cause of action for intentional or negligent misrepresentation); and

· As a result of reliance upon the false representation, plaintiff has suffered damages. [Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1239, 44 Cal.Rptr.2d 352, 359; see Manderville v. PCG & S Group, Inc. (2007) 146 Cal.App.4th 1486, 1498, 55 Cal.Rptr.3d 59, 68; and Auerbach v. Great Western Bank (1999) 74 Cal.App.4th 1172, 1184, 88 Cal.Rptr.2d 718, 727–‘Deception without resulting loss is not actionable fraud’ (¶ 11:357.1)]

(1) [11:354.1] Particularized pleading required: A fraud cause of action must be pleaded with particularity; i.e., every element of the cause of action must be alleged factually and specifically in full. [Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216, 197 Cal.Rptr. 783, 795; see Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73, 269 Cal.Rptr. 337, 345–complaint must plead facts showing ‘how, when, where, to whom, and by what means the representations were tendered’; Nagy v. Nagy (1989) 210 Cal.App.3d 1262, 1268-1269, 258 Cal.Rptr. 787, 790–fraud complaint deficient if it neither shows cause and effect relationship between alleged fraud and damages sought nor alleges definite amount of damages suffered]

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Lawyers Take Note: Wells Fargo Slammed With $3.1 Million Punitive Damages on One Wrongful Foreclosure

Posted on April 12, 2012 by Neil Garfield

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GARFIELD PROPOSES NATIONAL LAW FIRM FOR COUNTER-ATTACK

Editor’s Comment: 

The most perplexing part of this mortgage mess has been the unwillingness of the legal community to take on the Banks. Besides the intimidation factor the primary source of resistance has been the lack of confidence that any money could be made, ESPECIALLY on contingency. If you were the lawyer in the case reported below, you would be getting a check for fees alone of over $1.2 million on a single case. And as this article and hundreds of others have reported, based upon objective surveys, most of the 5 million homes lost since 2007 were wrongful foreclosures.

So the inventory for lawyers is 5 million homes plus the next 5 million everyone is expecting. Let’s due some simple arithmetic: if 4 million homes were wrongfully foreclosed and the punitive damages were $1 million per house the total take would be $4 Billion with contingency fees at $1.6 Billion. If each house carried $200,000 in compensatory damages, then the total would be increased by $800 Million with Lawyers taking home $320 Million. These figures exceed personal injury and malpractice awards. Why is the legal profession ignoring this opportunity to do something right and make a fortune at the same time?

Right now I’m a little under the weather (open heart surgery) but that hasn’t stopped my associates from rolling out a plan for a national anti-foreclosure firm. I’m only doing this because nobody else will. If you have had a home wrongfully foreclosed or suspect that your current foreclosure is wrongful, write to NeilFGarfield@hotmail.com (remember the “F”) and ask for help. Lawyers and victims of wrongful foreclosures should be able to pool their resources to attack the massive foreclosure attack with a massive anti-foreclosure attack.

Wells Fargo Slapped With $3.1 Million Fine For ‘Reprehensible’ Handling Of One Mortgage

Ben Hallman

A federal judge who has fiercely criticized how big banks service home loans is fed up with Wells Fargo.

In a scathing opinion issued last week, Elizabeth Magner, a federal bankruptcy judge in the Eastern District of Louisiana, characterized as “highly reprehensible” Wells Fargo’s behavior over more than five years of litigation with a single homeowner and ordered the bank to pay the New Orleans man a whopping $3.1 million in punitive damages, one of the biggest fines ever for mortgage servicing misconduct.

“Wells Fargo has taken advantage of borrowers who rely on it to accurately apply payments and calculate the amounts owed,” Magner writes. “But perhaps more disturbing is Wells Fargo’s refusal to voluntarily correct its errors. It prefers to rely on the ignorance of borrowers or their inability to fund a challenge to its demands, rather than voluntarily relinquish gains obtained through improper accounting methods.”

The opinion reflects Magner’s disgust with tactics that Wells Fargo used to fight the case — and perhaps frustration with an appeals court ruling in a separate, but similar case, that overturned her order that would have forced Wells Fargo to audit and provide a full accounting for more than 400 home loans in her jurisdiction.

As The Huffington Post previously reported in a story co-published with The Center for Public Integrity, sources familiar with the preliminary findings said that the bank made costly accounting errors in the administration of practically all of those loans.

In an emailed statement, Tom Goyda, a Wells Fargo spokesman said: “The ruling handed down by the court in an individual bankruptcy case covers allegations going back more than six years and ignores significant changes in servicing practices that have occurred since that time. We believe that there are numerous factual and legal problems with the opinion and are reviewing our options regarding an appropriate legal response.”

Goyda said that an appeal of the ruling is “one option” the bank is considering.

Despite widespread reports that the banks and other companies that service home loans engaged in a range of misconduct — from ordering unnecessary property inspections to misapplying payments in a way that can lead to wrongful foreclosure — few judges have had the time, ability or inclination to do the kind of forensic analysis necessary to uncover wrongdoing in individual cases. For a non-accountant, reading a loan history is like interpreting hieroglyphics without a Rosetta Stone, and banks are often reluctant to turn them over in the first place.

The exceptions have tended to come in federal bankruptcy courts, where justices typically have more time to dig into loan accounts, and are much more likely to have the financial expertise necessary to do so. In an earlier interview, Magner said that she analyzed the loan files of more than 20 borrowers in her court and found mistakes in every instance.

“These are loans of working-class people who bought homes they could afford and whose loans were not administered correctly from an accounting perspective,” she said. “I think that these types of problems occur in almost every [defaulted] loan in the country.”

The current case involves Michael Jones of New Orleans. In a 2007 decision, Magner ruled that Wells Fargo improperly charged Jones more than $24,000 in fees, owing to a fundamental problem in the automated methodology the bank used to account for his loan payments.

After Jones fell into default, Magner ruled, the bank improperly applied his mortgage payments to interest and fees that had accrued instead of to principal, as required by his servicing contract. This triggered a waterfall of additional fees and interest that consumer lawyers call “rolling default.” Later, after Jones applied for bankruptcy, the bank continued to misapply payments, according to Magner’s opinion.

In the most recent opinion, Magner describes Wells Fargo’s litigation tactics, which involved filing dozens of briefs, motions and other filings that slowed down the proceedings to a snail’s pace, as “particularly vexing.” The tactics suggest that any other borrower who might wish to contest a fee or charge would find a legal challenge to the bank simply too burdensome.

And yet, Magner writes, it is only through litigation that the abuses can be uncovered. Calling Wells Fargo’s conduct “clandestine,” Magner wrote that the bank refused to communicate with Jones even as it was misdirecting payments for improper purposes.

“Only through litigation was this practice discovered,” Magner writes. “Wells Fargo admitted to the same practices for all other loans in bankruptcy or default. As a result, it is unlikely that most debtors will be able to discern problems with their accounts without extensive discovery.”

Magner wrote that the bank still refuses to come clean with homeowners about mistakes it made in the accounting of home loans. This is particularly troublesome in her district, where more than 80 percent of the borrowers who file for bankruptcy have incomes of less than $40,000, and consequently are often unable to hire the kind of legal firepower necessary to counter Wells Fargo’s army of lawyers.

“[W]hen exposed, [Wells Fargo] revealed its true corporate character by denying any obligation to correct its past transgressions and mounting a legal assault ensure it never had to,” Magner wrote.

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Occupy Wall Street Groups Protest Foreclosure, Try To Halt Evictions

Posted on November 18, 2011 by Neil Garfield

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11/16/11 04:49 PM ET

Occupy Wall Street Foreclosures

Monique White of North Minneapolis has been hosting weekend barbecues for friends and family for years. On Sunday, her usual guest list of friends and neighbors expanded to include protesters from the local spinoff of the Occupy Wall Street movement. They’d come to try and stop the bank from throwing White out of her house.

“These people are here to support me — and not only me, just to let other people know and be aware of what’s going on,” White said.

What’s going on is American homeowners are still slogging through the aftermath of a recession caused by the near-collapse of the financial sector in 2008. Since then, bailed-out banks have allegedly treated struggling homeowners so badly that state and federal law enforcement agencies are negotiating a multi-billion dollar settlement, and federal bank regulators have offered to check for wrongdoing in any foreclosure that happened in 2009 or 2010.

Occupy Wall Street kicked off in September to protest economic injustice, and now in at least three American cities, Occupy protesters are using the stories of local residents losing their homes to dramatize and protest the ongoing foreclosure crisis. In each case, Occupy-affiliated protesters have pitched their tents on the lawns where they don’t want to see local sheriff’s deputies pile the belongings of an evicted family.

On Sunday evening, 15 or so protesters came to Elizabeth Sommerer’s home in Cleveland. They’d heard via Twitter that Sommerer, a mother of two, would be evicted on Tuesday.

“We’d been talking for a few weeks about ways to draw attention to what’s going on with the foreclosure crisis,” said protester Chris Soboleski, a 29-year-old web developer from Painesville, Ohio.

Sommerer’s home went into foreclosure in 2009, Cuyahoga County records show. Her husband postponed the sheriff’s sale by filing for bankruptcy. But they couldn’t keep up with their Chapter 13 payments, and then, Sommerers said, she and her husband split up. Fannie Mae, the government-sponsored mortgage company, bought the property in August.

Soboleski and other Occupy protesters helped Sommerer connect with her local representative on the Cleveland City Council, Brian Cummins, whose staff helped her get to court on Monday to file a request to postpone the eviction for 30 days. Her request was granted, court records show.

“I think it was a huge day for the movement,” said Cummins, a member of the Green Party. “This is really great because it got them out in the community and in touch with someone in a very real life situation.”

“They stand up for the little guy,” Sommerer said of the protesters in a video uploaded to YouTube on Monday. (Soboleski said Sommerer did not want to do another interview about her situation after already providing details to local reporters. Independent attempts to reach her were unsuccessful.) “This is Main Street. Wall Street can take care of itself. Main Street needs everybody.”

Sommerer said she’s looking for work and a nearby place to live so her kids don’t have to change schools. She’d be happy to rent her former home from Fannie Mae if possible. “I was not raised to be a freeloader. I don’t want to be a freeloader. I will pay my way. I just need time to put it together,” she said in the video.

“Even if you do have to foreclose on someone, you can do it with a certain amount of compassion and humanity,” Soboleski said. “There’s a certain amount to be said for rules, but on the other hand we all want to live in a society where humanity matters more than bureaucracy.”

Not all of the Occupy actions have been successful. In Snellville, Ga., protesters failed to prevent the eviction of the Rorey family, who told the Gwinnett Daily Post they fell victim to a scam artist who promised them lower monthly payments in 2010. The difficulty of obtaining loan modifications since the collapse of the housing bubble has made it easy for scam artists to prey on desperate homeowners, who have been susceptible to claims that a hired “expert” knows secrets to obtaining loan mods they don’t.

Fannie Mae, which has owned the property since last year, said it works to prevent foreclosures.

“We have a Mortgage Help Center in Atlanta where homeowners can meet with a trusted housing counselor to discuss their mortgage situation and options to avoid foreclosure,” a Fannie Mae spokeswoman said in a statement. “Unfortunately, the homeowner did not seek assistance from our Help Center.”

Occupy protesters in Minneapolis hope they’ll have better luck with Monique White. Thirty or so protesters have been camping in her living room and kitchen, with some spilling out onto her lawn, since November 8.

“I’ve never had this many people in my house before. It gets kind of overwhelming sometimes,” White said. All the same, she added, “I appreciate everything that they’ve done for me.”

White fell behind on her payments in 2009. The following February, as she was trying to get a loan modification from U.S. Bank, she said, budget cuts cost her her job counseling at-risk kids for a non-profit. “That’s when everything started spiraling out.”

The Occupy protesters say U.S. Bank should cut White some slack.

“They just had record profits this quarter, and the CEO of US Bank, Richard Davis, just doubled his salary to $19 million,” said Nick Espinosa, 25. “So what we’re talking about with a family like Monique’s is pennies to them.”

Government-backed mortgage company Freddie Mac bought her house as a foreclosure in January, and U.S. Bank said what happens is now up to Freddie. Freddie Mac said White’s eviction has already been postponed and that the company was considering her for a program that would allow her to rent the property.

White said she has been working a part-time job at a liquor store and is desperately looking for new work.

“Basically what I’m looking for is for U.S. Bank to rewrite my loans in order for me to stay in my home and make it affordable for me,” White said. “I’m not asking for a handout. All I’m asking is for time or for Freddie Mac or U.S. Bank, whoever owns the house or is trying to take the house, to come to the table.”

 

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MASS SUPREME COURT CLARIFIES: YOU CAN’T SELL WHAT YOU DON’T OWN — MISSING HOMEOWNER WINS CASE WITHOUT KNOWING IT

Posted on October 20, 2011 by Neil Garfield

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WRONGFUL FORECLOSURE IS NOT THE FOUNDATION FOR TITLE

PROSPECTS FOR TITLE PROBLEMS ACROSS THE NATION ARE MUSHROOMING

EDITOR’S NOTE: Likening the claims of the bank and the person who received a “quitclaim” deed to a Brooklyn Bridge transaction, the Court simply stated the most basic law: you can’t sell what you don’t own. But the reasoning of this Supreme Court decision, citing cases from long ago that are as valid to day as when they first decided, also goes directly to the issue of whether title can be challenged in an eviction arising from a foreclosure case.

The rule that a tenant cannot challenge the title of his landlord in an eviction case makes sense — if it is a landlord tenant case. But foreclosure cases are not landlord tenant cases. The fallacy of applying the rule to foreclosure cases is obvious and just as simple as the Massachusetts Supreme Court decision itself.

In a landlord-tenant case the allegation is that the defendant is a tenant under a lease and that they didn’t pay their rent under the lease terms. To allow title challenges that frankly are not really relevant would be to clog the courts with unnecessary litigation and stretch out the time a tenant  could stay without paying rent. Thus the rule that says you can’t raise defects in title in an eviction action between landlord and tenant. The allegation is made that by the Landlord that he is the Landlord, that the defendant is a tenant and that there is a lease, with the payment due of $x dollars per month  or per week and that the tenant did not pay — which has caused the landlord damage and therefore they need the possession of the property back so they can receive rent again to pay the mortgage, maintenance etc.

Foreclosure cases are much different. Here the allegation is that the Plaintiff is the owner, not a landlord as in the landlord-tenant case. Further, the allegation is that the occupant was the owner and isn’t anymore. The allegation MUST be that the change occurred as a result of a foreclosure that was duly prosecuted and in which there was a proper sale in which the Plaintiff obtained title and in which the rights to ownership and thus possession by the homeowner were foreclosed.

In civil procedure EVERYWHERE what is alleged is presumed to be true only in a motion to dismiss. If the allegations are denied, then there must be evidence from the plaintiff proving their allegations. In this case in Massachusetts as is the case in thousands of other instances, the evidence clearly shows that US bank was not the mortgagee when it initiated foreclosure.

Therefore US BANK could not foreclose. But it did anyway. And because they received a deed, they say that is enough. But a homeowner need only deny the allegations of the foreclosure and the sale and force the Plaintiff to prove it obtained real title in proper form and substance. Here is where US Bank fails and therefore the case was dismissed (in this case not an eviction, but a suit to quiet title against a homeowner who cannot be found).

If the allegation supporting the eviction action is faulty and cannot be proven, then the occupant wins. Those are the rules. If you make an allegation you must prove it with real evidence — not with presumptions that would allow people to sell the Brooklyn Bridge 100 times and make claims of presumption of title.

SEE 10.18.2011 Mass Sup Ct Bevi;aqua

Nemo Dat Trumps Bona Fide Purchaser

posted by Adam Levitin

The Massachusetts Supreme Judicial Court just handed down a second
major mortgage foreclosure ruling, Bevilacqua v. Rodriguez.  The case
was an Ibanez follow-up dealing with the rights of a purchaser at an
invalid foreclosure sale. I thought this was a no brainer case and
said so in an amicus brief co-authored with some of the Credit Slips
crew. As the trial court noted, the foreclosure sale purchaser has to
lose otherwise I could actually sell you the Brooklyn Bridge or some
other property I don’t own.

What was cool about this case from an academic perspective was that it
pitted two heavyweight, Latin-inscribed principles of commercial law
against each other:  the nemo dat quod non habet principle (you can’t
give what you don’t have) and the bona fide purchaser principle (one
who takes in good faith for value and without notice of defect will
get legal protection against claims). While these are both venerable
principles of commercial law, there should have been no question that
nemo dat prevails. It is arguably the foundational principle of
commercial law:  the most one party can transfer to another are the
rights it has.
We have one critical carve-out to that principle, the
holder-in-due-course doctrine, but the holder-in-due-course is much
like the bona fide purchaser:  it only applies if you take in good
faith and without notice of defect. And if you’re buying at a
non-judicial foreclosure sale, you’ve got notice of possible defect
(and one might argue about good faith). It’s a little like the problem
of finding a bargain when shopping–if it’s too good of a deal, it
could be a fraudulent transfer.

And so the Massachusetts Supreme Judicial Court held.  If the
foreclosure was done improperly, the foreclosing party didn’t have
title to the property and thus couldn’t transfer title to the
purchaser. The court didn’t dismiss the suit with prejudice, so Mr.
Bevilacqua could get the property–if the foreclosure is done right in
the first place, but that means starting over again.

A lot of people think that the ruling in Bevilacqua will kill the REO
market. I doubt it. It might make it a bit harder to get title
insurance, but the title insurers have to keep issuing titles because
they need the cash flow. If there’s a widespread problem, they’re
already insolvent, so why not keep on doing business? There’s no tort
of deepening insolvency (at least in Delaware).

As with Ibanez, the Supreme Judicial Court merely upheld very sensible
principles that shouldn’t be controversial:  you need to be the
mortgagee to foreclose and you can’t sell what you can’t deliver.
What’s kind of astounding is that the banks have had the chutzpah to
challenge these basic principles of commercial law, as if centuries of
commercial law jurisprudence should suddenly bend to their
convenience. This is the same sort of arrogance that engendered the
creation of MERS and the Article 9 mortgage transfer process.

There’s a third case awaiting decision from the Massachusetts Supreme
Judicial Court, Eaton v. Fannie Mae, which deals with the question of
whether a “naked mortgagee”–a mortgagee that isn’t the
noteholder–can foreclose. I filed an amicus arguing no way no how,
but we’ll see how the court rules.

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UTAH ATTORNEY SUCCEEDS IN GETTING REMOVAL TO FEDERAL CT REMANDED BACK TO STATE CT CONVERTING NON-JUDICIAL TO JUDICAL FORECLOSURE

Posted on September 30, 2011 by Neil Garfield

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LAWYER OVERCOMES PRESUMPTION OF VALIDITY OF TRUSTEE DEED IN UTAH

 EDITOR’S NOTE: BOA and Recontrust, their puppet “substitute trustee” have stumbled into a quagmire and attorney John Christian Barlow has seized the opportunity to shine a light on the illegal foreclosures by BOA and Reconstrust. This might have national implications. 
BOA and Recontrust made all the way through the usual fake auction and some underling signed a Trustee Deed. Under State Law the Trustee is presumed valid, which is to say, properly procured. But Barlow attacked the validity of the sale in the eviction action where BOA sought to obtain possession. As in other cases he recently started fighting, he attacked the validity of the sale. By raising serious issues concerning the auction, “sale” and the pattern of conduct, Barlow succeeded in overcoming the presumption of the validity of the Trustee Deed.
This left BOA with a naked deed that needs to be authenticated and validated by the Utah State Court. BOA and Reconstruct actually stumbled twice by invoking their “right” to Remove the case to Federal Court where the Judges have been friendlier to banks. Tearing apart the arguments one by one, the Federal Judge said that Recontrust and BOA had argued themselves into a corner thus depriving the Federal Court of jurisdiction since this was obviously a matter to be heard in state court, as to whether the eviction could proceed.
The written opinion of the Federal Judge alerted the State Judge to inconsistencies in the positions argued by BOA and Reconstrust. So the whole case now is going to be heard judicially as to whether the eviction is proper — a  finding that is entirely dependent upon whether the Trustee’s Deed will stand up to scrutiny and be sustained — or if the Trustee’s Deed is removed or expunged from the title records because of the various illegal actions with which we are all now too familiar.
Once the Trustee Deed is discredited  (it is already put in doubt by Attorney Barlow and the findings of the Federal Judge), title reverts back to the homeowner and they get to stay in their home and they can negotiate with the real creditor in good faith.
Utah law is not the same, but is similar to many other states. Check with a lawyer before you assume anything or do anything. But the fact remains that removal to state court can be challenged (Motion for remand) and the non-judicial sale can be converted into a judicial foreclosure proceeding — something no banks wants because they must allege and prove things that are simply not true. That it was done in an eviction proceeding is all the more impressive but it is also logical that it occur there because it is not until after the pretender has committed itself in writing to each and every act that they can no longer play musical chairs or musical documents to give the Judge “what he wants.”

(Salt Lake City, UT) – St. George attorney John Christian Barlow, representing homeowners who have lost their home to the Bank of America’s (NYSE: “BAC”) foreclosure machine ReconTrust, may have finally achieved a measure of success in the battle of Utah homeowners against ReconTrust’s illegal foreclosures.

Federal Judge Clark Waddoups Thursday returned to Utah Fifth District Court in St. George a case in which ReconTrust was named as a third-party in the complaint claiming immunity under the National Bank Act in an unlawful detainer action. (ORDER and MEMORANDUM DECISION)

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LAWYERS TAKE NOTE! COURTS ARE ALLOWING TITLE QUESTIONS IN EVICTIONS

Posted on September 13, 2011 by Neil Garfield

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“The mere fact that the pretenders are avoiding trials at all costs is proof unto itself that they do not have the goods, they do not have title, they are not the creditor and they are merely sneaking into the system to fill the void created by the the real creditors (investor/lenders) who want no part of the foreclosure process nor any need to defend against predatory, deceptive or illegal lending practices. ” — Neil Garfield

OREGON COURT DENIES EVICTION: SHOULD HAVE BEEN A QUIET TITLE LAWSUIT

EDITOR’S NOTE: The eviction laws were mostly designed for landlord tenant situations. Once again, pretender lenders are using questionable practices using laws that don’t apply to the cases they are bringing. But ever since Judge Shack in New York and Judge Boyco in Ohio started questioning whether the homeowners were actually getting their day in court, the courts have been shifting away from the old rules.

The old rules basically prevent a tenant from questioning the title of his landlord as a defense to an eviction. The reason is obvious. You sign a lease with someone, pay them for a while and then stop paying — the issue of who has title title is  basically irrelevant. You have a  contract (lease) either oral or written, you breached it, and so the summary procedure for eviction makes it easier on landlords to get tenants out and begin renting the apartment, condo or house. The only real defense is payment and some issues like retaliatory eviction for reporting health problems, and similar landlord tenant issues. You see these laws in Arizona, Florida and every other state I’ve looked at.

Along comes massive foreclosures and instead of having a contract with the landlord you have a claim by someone you never heard of, with paperwork you’ve never seen, much of it unrecorded, and claiming default without being the creditor or even establishing that they represent the creditor. So in non-judicial states for example, this is the first time you have seen, met or had any day in court and you are told that you are in a court of limited jurisdiction and that if you want to raise issues regarding fraudulent or wrongful foreclosure you need to do it in another court. In the meanwhile, the court is going to evict you no matter how much proof you have that the party doing the evicting obtained title illegally and may never have obtained title.

As I have been saying for 4 years, eviction is not a remedy to anyone claiming to have a right to possession of a foreclosed home unless there has been an opportunity to examine all the claims of the pretender lenders to actual ownership of the obligation and the possession of the proper paperwork. Even in judicial states this is not working right because the foreclosures are considered clerical by judges and many of them don’t believe, or at least didn’t believe until recently, that the banks would be so arrogant and stupid as to make claims on mortgages that were never perfected as liens and never transferred to them or anyone else.

So here we have an Oregon judge that spots the issue and simply states that this is not an eviction, it is a quiet title issue and if you want possession you need to prove title. If you want to prove title, considering the defects that are apparent and alleged by the homeowner then you need to file a quiet title action. This is the same as I have been saying for years. If they really had the goods and they really could prove that US Bank, or BOA was going to lose money because of the alleged default on the obligation, then all they needed to do was go to trial on a few dozen of these cases and the issues raised by homeowners would go away. Instead the issues are growing in volume and sincerity.

The mere fact that the pretenders are avoiding trials at all costs is proof unto itself that they do not have the goods, they do not have title, they are not the creditor and they are merely sneaking into the system to fill the void created by the the real creditors (investor/lenders) who want no part of the foreclosure process nor any need to defend against predatory, deceptive or illegal lending practices.

Categorized | STOP FORECLOSURE FRAUD

Court rulings complicate evictions for lenders in Oregon

Court rulings complicate evictions for lenders in Oregon

“Those issues give credence to Defendan’t argument that this case is better brought as one to quiet title and then for ejectment.”

OregonLive-

Another Oregon woman successfully halted a post-foreclosure eviction after a judge in Hood River found the bank could not prove it held title to the home.

Sara Michelotti’s victory over Wells Fargo late last week carries no weight in other Oregon courts, attorneys say. But it illustrates a growing problem for banks  — if the loans’s ownership history isn’t recorded properly, foreclosed homeowners might be able to fight even an eviction.

“There’s this real uncertainty from county to county about what that eviction process is going to look like for the lender,” said Brian Cox, a real estate attorney in Eugene who represented Wells Fargo.

Michelotti’s case revolved around a subprime mortgage lender, Option One Mortgage Corp., that went out of business during the housing crisis. Circuit Court Judge Paul Crowley ruled that it was not clear when or how Option One transferred Michelotti’s mortgage to American Home Mortgage Servicing Inc., which foreclosed on her home and later sold it to Wells Fargo.

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UNPUBLISHED AZ APPELLATE DECISION ON IMPROPER SERVICE VOIDS FORCIBLE DETAINER

Posted on September 8, 2011 by Neil Garfield

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COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary GET COMBO TITLE AND SECURITIZATION ANALYSIS – CLICK HERE

SEE FHLM V TIETJEN LACK OF PROPER SERVICE OF PROCESS CV20100212

Before you start thinking that this decision is of little consequence, consider this: First Magnus cases are riddled with service problems just as most of the cases are filled with fabrications, forgeries and misrepresentations. This Court might reconsider its decision to make this case unavailable to be cited as precedent when it starts seeing more of these appeals. I know of one case where the Judge actually threatened to cuff the party and wait for service in court.

But read the case carefully because it is correct as to its reasoning. You can easily waive service of process by asking for anything other than dismissal for lack of jurisdiction. The converse mistake is also being made where once the Judge has ruled, the homeowner fails to assert defenses for fear of it being construed as a waiver of the original objection to service. Once the Judge rules, all defenses should be raised.

While this case is NOT some great victory for homeowners across the state of Arizona nor anywhere else, it is another incremental step of the court system in scrutinizing the actions of the supposed lenders. It also reveals some pique by the appellate judges about the cavalier attitude of trial judges towards homeowners in ignoring the express public policy of the State of Arizona that foreclosures are a bad thing for the state as well as the homeowners. The legislature passed that language, not some wild-eyed blogger. Look it up.

 

Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: , , , , , , , , , , , , , , , , , , , , | 6 Comments »

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