Foreclosure Strategists-Meet Tuesday-Forcible Detainers w/Attrny Rick Sherman

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Contact: Darrell Blomberg  602-686-7355

Meeting: Tuesday, July 17th, 2012, 7pm to 9pm  $10

Forcible Detainers from Attorney’s Perspective                                                            with Attorney Rick Sherman

Rick Sherman will share his perspective of Forcible Detainers.  Attorney Sherman has prosecuted FEDs from both the servicer and homeowner side.  (Yes, Attorney Sherman has been on the homeowner side of forcible for some of his clients!)

This will be a great meeting and an excellent learning experience.  I have discussed many topics pertaining to FEDs with Mr. Sherman and I think you will be pleased with this meeting’s contents.

Please send me your questions for Attorney Sherman.

*****    Meeting Protocol     *****

What we have before us is an opportunity to learn about the Forcible Entry and Detainer from the perspective from a man who has stood on both sides of the courtroom.

Attorney Sherman is bringing us specialized knowledge and expertise in ONE area of the foreclosure process.  He will not be expected to address, nor entertain, in any way, off-topic requests, remarks or opinions.  This is not an opportunity for us to show Attorney Sherman how much we know.

Please be mindful that the focus of this meeting is FEDs.  This meeting is not about foreclosure fraud, an abysmal administration, a jaded judiciary or lax legislators.  It’s about FEDs!  Let’s keep our questions to concerns like; “you can’t argue title,” “denied,” “demanding a jury trial,” “what are your merits,” “presumption of compliance,” “Guilty or not guilty?  Is this a criminal matter?,” etc.

I understand that many people are upset and jaded about foreclosures in general.  Dropping a bomb about your frustration of things outside the control or expertise of a speaker who has agreed to share his/ her knowledge serves no one.  Truthfully, it creates an adversarial air that deprives fellow attendees of the learning opportunity they’ve come to partake in.  Additionally, it takes the speaker off their area of expertise and chews up their resources to no one’s advantage.

Got it?  FEDs!  Thank you.


Hogan Opinion Amended

The Hogan opinion has been amended by the Supreme Court of Arizona.  I’ve attached the amended opinion for your records.  The changes were essentially in section 11 of the opinion.  One sentence was amended to read, “Moreover, the trustee owes the trustor a duty to comply with the obligations created by the statutes governing trustee sales and the trust deed.”  This sentence was added to section 11, “A.R.S. § 33-801(10) (providing that “[t]he trustee’s obligations . . . are as specified in this chapter [and] in the trust deed”).


$50 Million Sweep is ON HOLD!

On Tuesday, 2012-06-12, the plaintiffs and defendants in the Morones – Hernandez v Horn (Az AG) & Ducey (Az Treasurer) case stipulated that the $50 Million Sweep from the Attorneys’ General Settlement Funds will not be transferred to the State of Arizona General Fund until at least 2012-12-31!  The Minute Entry can be found at this link:


We meet every week!

Every Tuesday: 7:00pm to 9:00pm. Come early for dinner and socialization. (Food service is also available during meeting.)
Macayo’s Restaurant, 602-264-6141, 4001 N Central Ave, Phoenix, AZ 85012. (east side of Central Ave just south of Indian School Rd.)
COST: $10… and whatever you want to spend on yourself for dinner, helpings are generous so bring an appetite.
Please Bring a Guest!
(NOTE: There is a $2.49 charge for the Happy Hour Buffet unless you at least order a soft drink.)


I have set up a Facebook page. (I can’t believe it but it is necessary.) The page can be viewed at, look for and “friend” “Foreclosure Strategist.”

I’ll do my best to keep it updated with all of our events.

Please get the word out and send your friends and other homeowners the link.


I have set up a MeetUp page. The page can be viewed at Please get the word out and send your friends and other homeowners the link.


COURT WATCHERS – Upcoming Hearings

Tuesday, July 17, 2012* at 3:00 p.m*., Jerry Priore (Pro Se) 
                             (*Time and Date are subject to change!)

Forcible Detainer Hearing
Old Court House, 125 W. Washington, Courtroom 001, Phoenix, AZ
Commissioner James R. Morrow

Wednesday, July 18, 2012 at 10:00 a.m., Sherryl Madison (Carla Bartschi – Pro Se)

Forcible Detainer Hearing – Jurisdiction
Old Court House, 125 W. Washington, Courtroom 001, Phoenix, AZ.
Commissioner Benjamin E. Vatz

Thursday, July 19, 2012 at ??:?? ?.m., Scott Misenhalter (Dan McCauley)


Thursday, July 26, 2012 at 10:15 a.m. Waltner (Andre Merrett)

Waltner v. JPMorgan Chase Bank, NA, & California Reconveyance Company
Courtroom 1, Arizona Court of Appeals, Division 1
Oral Argument:  Arguing on Waltner’s behalf will be Andre Merrett of Aiken Schenk Hawkins & Ricciardi, P.C. of Phoenix.  He will be arguing that the Waltners should have been granted default judgment, and in the alternative, the court should not have granted summary judgment to the Defendants because the Waltners had introduced a material issue of fact — that Chase could not have been the beneficiary in 2009 entitled to foreclose because their loan had been sold in 2005 (and not to Chase).

Wednesday, August 22, 2012, 9:30am, Oral Argument, “$50 Million Sweep Lawsuit”

Morones – Hernandez v Horn (Az AG) & Ducey (Az Treasurer) – CV2012-008573
Judge Mark Brain, 101 E Jefferson, Room 413, Phoenix, AZ 85003

???, August ??, 2012, at ??:?? ?.m. Steve Sontag


Please let me know when your court appearances are.

May your opportunities be bountiful and your possibilities unlimited.

“Emissary of Observation”

Darrell Blomberg




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

Interesting procedural issues coming up in Arizona Courts. First WAMU asks the Court of Appeals to depublish its decision that possession of the note was not necessary, meaning that the decision would apply ONLY to that one case and not serve as precedent for other cases. That is a pretty favorable ruling for the Banks. WAMU doesn’t exist anymore. Why would they want it depublished? People should realize this is oral argument, not a decision, which could come in weeks or months.

My guess is that they don’t think it will withstand the test of time or a Supreme Court review or the review of any other court. If the party foreclosing doesn’t have the original note than anyone could have it. You can’t pick up one end of the stick without picking up the other. If anyone could have it then anyone could foreclose based solely on instructions to the trustee on the deed of trust or the filing of a foreclosure lawsuit.

If anyone could foreclose then anyone has a right to title — ANYONE. This opens the door for some creative procedural issues that could be raised by homeowners or friends of homeowners. The specifics of those strategies I don’t write about. That is why I have One on One time conferences for one hour with lawyers and their clients. So on reflection then maybe the lawyers and the Banks realized that the decision fell into the category of “be careful what you wish for.” So they could be thinking that this decision is an eventual win for borrowers regardless of how it ends up — overruled or followed by other courts.

The other move was rebuffed by the Arizona Supreme Court. The certified question for review in Hogan v Washington is “Can a lender foreclose its deed of trust without owning the note which the deed of trust secures.” Now THAT is a bit of a sticky wicket and could account for the move by WAMU to have its winning decision in appellate court depublished. There are many issues that could be discussed deriving their interest and value from the question itself. I’ll discuss a few of them.

  1. The meaning of “lender.” It is unclear whether they are presuming that the forecloser is a “lender.” Or perhaps the homeowner already waived that issue by accepting the forecloser as a “lender.” That would make the forecloser a creditor. Thus the issue of whether they can foreclose without some documentation might be moot. But we know that they are not assuming the forecloser is a creditor because a creditor would have and own the note. In turn, that would appear to eliminate referring to the forecloser as a “lender.” That is what the appeal is about. So why do they refer to the forecloser as a “lender?” Is it because they just using a shorthand way of referring to the forecloser? If so it is either misleading or it is telegraphing that they intend to rule for the forecloser because they are presuming factually that the forecloser is the lender or creditor and simply does not have the paperwork. By reducing it to a paperwork issue it is easier to say that we are not going to hold up an orderly system of disposing of distressed properties because of minor deficiencies in paperwork.
  2. What it means to have possession of the original note. The possessor could be a bailee, holding it for someone else with no powers to do anything but deliver it, or a holder by virtue of some agreement or a holder in due course in the case of a sale of the note. The real issue is is the money. If the facts as presented or presumed have the forecloser losing money as a result of the borrower not paying, then the decision is most likely going to run in favor of the forecloser and could be worse: the court may state a presumption that the party who gives an instruction to the trustee on the deed of trust or who files suit is in fact the holder in due course. That would make the possession of the note irrelevant unless the homeowner could show that the actual possessor was not a bailee but was a party claiming rights under the note — something that actually isn’t so hard to do as it might sound in the case of securitized loans.
  3. What it means to not have possession of the original note. If the forecloser does not have physical possession of the note the forecloser, at a minimum, is obligated to tell the court where it is and why it isn’t in the forecloser’s possession. In fact the trustee’s obligation of due diligence requires it to have this information before obeying instructions to send out a notice of default and notice of sale. Further, the failure of the forecloser to have physical possession of the note gives rise to a question of fact. This brings up the thorny issue of whether loans claimed to be securitized CAN be foreclosed using the power of sale in a deed of trust or if they MUST be foreclosed judicially by a lawsuit. How would the trustee, exercising due diligence determine who was right, who was credible and who was lying through their teeth. Is the trustee empowered to conduct some sort of hearing? What are the rules?
  4. What it means to own the note. If the forecloser actually owns the note, then the likelihood is that the forecloser has every right to foreclose or sell the property by whatever means are legally provided in the state in which the property is located. The issue of fact is whether the forecloser is the owner and that is determined by whether there was a sale of the note or if the note is still owned by the party that originated the mortgage and whose name is shown as payee on the note. My review of hundreds of these chains of documents reveals thousands of documents referring to a transaction that never occurred. Transfer of the note without consideration (payment) is a transfer of convenience and creates a bailee rather than an owner — unless the recipient receives the note to secure yet another loan to the transferor, in which case it is a bailee with an interest which might be the same as a holder but not be the same as a holder in due course.
  5. What it means to not own the note. If the forecloser does not own the note, it is possible to construct a scenario in which the property could be foreclosed but it seems unlikely that the procedures contained in the power of sale would be sufficient to cover that situation. Hence, in my opinion, a forecloser who does not own the note might initiate foreclosure proceedings, but only by disclosing the principal for whom the forecloser is acting. This assumes that the non-owning forecloser has possession of the note. If the non-owning forecloser does not have possession of the note and they cannot account for where it is, the foreclosure dies right there and then. The sticky wicket here is who can bid as creditor at auction? The answer is always the creditor. If the creditor does not submit the credit bid, and the forecloser does so instead without the bid being on behalf of the creditor and the deed issued to the creditor (assuming the identity of the creditor has been established) then there is no valid sale unless the bid is paid in cash.
  6. What it means to foreclose the deed of trust. Most courts say that a deed of trust is no different than a mortgage. And indeed the terms are often used interchangeably. But in Arizona and other states some distinctions have been drawn, making the foreclosure a private sale to which the homeowner agreed and therefore there is no requirement of due process. Such decisions in my opinion are wholly wrong and unconstitutional. I predict that at some point Arizona or some other non-judicial state is going to state unequivocally that the power of sale does not take precedence over due process and that if the forecloser cannot demonstrate a prima facie case in judicial foreclosure, then the notice of default and notice of sale are invalid, as is the auction and any deed ensuing from the bogus auction.
  7. What it means that the deed of trust secures the note. This seemingly innocuous and obvious question leads to some very thorny issues that the courts so far have been loathe to consider. The fact is that under all laws, the obligation of the borrower arises upon receipt of the loan whether documented or not. A borrower cannot escape repayment simply because it wasn’t in writing but the terms that a court might impose might not be what the lender had in mind. Notes are not actually secured even though we say they are. It is the obligation that is meant to be secured. The note is evidence of the obligation and is presumed a true and correct representation of the agreement of the parties unless challenged for good cause. The problem is in the wording of the deed of trust or mortgage. The mortgage is incident to the note, it is often said and so stated in the mortgage or deed of trust. But what is obviously meant is that it secures the obligation by collateralizing through a lien on the home. The reason there is a problem is that the obligation in most cases arises between the party who loaned the money (an undisclosed remote investor) and the borrower, while the note refers to a transaction in which the loan originator loaned the money to the borrower. Thus the note is incorrect in its identification of the lender. The novel issue that will eventually be presented and considered by the court is whether the obligation is secured by the mortgage or deed of trust or if the security agreement has been eviscerated by the incorrect identification of the lender (which is a violation of the Truth in Lending Act). Another possibility is that the parties might be given the opportunity to reform the instruments to conform to the facts. The sticky wicket there is the effective date of that new instrument as amended by a court of law in a venue of competent jurisdiction. At a minimum, this would mean that the entire process would be renewed from scratch including the right to rescind.
  8. Where is the obligation in this discussion? THAT is the essential question. In the end the only thing that matters in commerce is getting paid. If the party who loaned the money does not get paid that party in our system of government has an absolute right to get a judgment for that money which is unpaid upon presenting proof that they are a creditor, that the loan was made, that they are going to lose money if the home is not sold for their benefit and that they can demonstrate by a preponderance of the evidence that the balance owed after all appropriate credits is $X, for which they demand judgment and sale. The sticky wicket here is that the parties to whom the obligation is owed have mostly abandoned their claims against homeowners and are pursuing claims against the investment bank that sold them the certificates that gave them an undivided interest in the loans. Eventually the Courts will come to terms with this fact and determine how or whether there should be any right to collection for or on behalf of a creditor who has not asked for affirmative relief but upon request from a third party who has their own reasons for demanding the relief sought (foreclosure). And lastly, the Courts will be required to deal with the definitions and procedures for allowing a “credit bid” under such circumstances where the creditors do not want the property and do not authorize that the property be taken in their name or on their behalf. This will probably lead to cash bids that will be very low and start rising as homeowners realize that there is a light at the end of the tunnel.

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