BONY Objections to Discovery Rejected

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It has been my contention all along that these cases ought to end in the discovery process with some sort of settlement — money damages, modification, short-sale, hardest hit fund programs etc. But the only way the homeowner can get honest terms is if they present a credible threat to the party seeking foreclosure. That threat is obvious when the Judge issues an order compelling discovery to proceed and rejecting arguments for protective orders, (over-burdensome, relevance etc.). It is a rare bird that a relevance objection to discovery will be sustained.

Once the order is entered and the homeowner is free to inquire about all the mechanics of transfer of her loan, the opposition is faced with revelations like those which have recently been discovered with the Wells Fargo manual that apparently is an instruction manual on how to commit document fraud — or the Urban Lending Solutions and Bank of America revelations about how banks have scripted and coerced their employees to guide homeowners into foreclosure so that questions of the real owner of the debt and the real balance of the debt never get to be scrutinized. Or, as we have seen repeatedly, what is revealed is that the party seeking a foreclosure sale as “creditor” or pretender lender is actually a complete stranger to the transaction — meaning they have no ties i to any transaction record, and no privity through any chain of documentation.

Attorneys and homeowners should take note that there are thousands upon thousands of cases being settled under seal of confidentiality. You don’t hear about those because of the confidentiality agreement. Thus what you DO hear about is the tangle of litigation as things heat up and probably the number of times the homeowner is mowed down on the rocket docket. This causes most people to conclude that what we hear about is the rule and that the settlements are the exception. I obviously do not have precise figures. But I do have comparisons from surveys I have taken periodically. I can say with certainty that the number of settlements, short-sales and modifications that are meaningful to the homeowner is rising fast.

In my opinion, the more aggressive the homeowner is in pursuing discovery, the higher the likelihood of winning the case or settling on terms that are truly satisfactory to the homeowner. Sitting back and waiting to see if the other side does something has been somewhat successful in the past but it results in a waiver of defenses that if vigorously pursued would or could result in showing the absence of a default, the presence of third party payments lowering the current payments due, the principal balance and the dollar amount of interest owed. If you don’t do that then your entire case rests upon the skill of the attorney in cross examining a witness and then disqualifying or challenging the testimony or documents submitted. Waiting to the last minute substantially diminishes the likelihood of a favorable outcome.

What is interesting in the case below is that the bank is opposing the notices of deposition based upon lack of personal knowledge. I would have pressed them to define what they mean by personal knowledge to use it against them later. But in any event, the Judge correctly stated that none of the objections raised by BONY were valid and that their claims regarding the proper procedure to set the depositions were also bogus.

tentative ruling 3-17-14

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