Monthly Archives: December 2019

BELATED CHRISTMAS PRESENT … WHEN WITNESSES DON’T HAVE PERSONAL KNOWLEDGE

(OP-ED) — The author of this post is hoping you are having a safe and peaceful holiday season … with an educational viewpoint as a belated gift … which has its own conclusions of law thrown in for good measure.  

Here’s an interesting take on an older 2019 case, which by the way was just recently “Shepardized” only to discover it’s still “standing” and hasn’t been reversed and it has to do with what a witness knows and is able to testify to versus what that same witness doesn’t know.  It’s a case out of Wisconsin (smile and say “Cheese!” Mr. Witness … you don’t know what you’re talking about and the court agrees with the homeowner)!

Wells Fargo Bank NA v Juza, Wisc App Ct Dist 3 No 2017AP1515 (June 25, 2019)

And of course, it’s not published!  If the system of things were to allow every homeowner-favored case to be published, we’d actually learn something about how cases are won, not how they’re lost.

We spend all our time trying to prove a negative.  Why not just dump that task on the witness?

From an analyst point of view, scroll down the foregoing PDF to the bottom of Page 7 (of 14) … where it says “DISCUSSION”.

Start reading at the second sentence … and when you get to the top o the second column of Page 8 (of 14), you will begin to see where Bank of America’s case begins to fall apart. The word ROBOSIGNER appears multiple times throughout this ruling.  It’s nothing that the Court’s don’t recognize or want to hear … because most judges will pooh-pooh these allegations all day long. However, the fact remains that if you can catch the witness in a bald-faced lie, it makes your appeal that much more palatable to the higher courts if you can show the witness could … in no way … have had personal knowledge of a lot of the facts:

  1. Who had actual possession of the note and mortgage at the time of the foreclosure?
  2. How did the robosigner in this instance contradict himself in his testimony?
  3. What evidence did the other side (coming against the homeowner) fail to produce or establish?
  4. How could the lack of knowledge be used to beat up the other side’s argument that the witness was there only to assist the Plaintiff Bank to commit fraud on the court?
  5. How does the other side “dilute” its arguments by asserting that proving fraud on the court requires more than just a witness’s committing perjury?
  6. How does the Plaintiff Bank misuse case law in trying to get a court to side with it?  (Another reason for research into each cited case!)
  7. Submitting a false affidavit to a court amounts to just the same as committing fraud on the court, right?

The Circuit Court dismissed the case with prejudice on one hand but dismissed the “judgment on the note” on the other hand, allowing the bank to have another “bite at the apple”.  We certainly can’t give the homeowner a free house, now can we?  Geez, I saw nothing in this case about filing a complaint against the law firm and the attorney of record with the state bar, did you?   The attorney must have had some knowledge about the ROBOSIGNER … or was the attorney just too arrogant to recognize he was possibly suborning perjury on the court?

So we end the matter on a 50-50 split decision … Wells Fargo’s appeal was frivolous and the homeowners get denied their motion for attorneys fees and costs (because … and probably due to the rationale of the court systems in this country … they get to stay in their home just a bit longer without having to pay for it).

Of course this opinion won’t be published.  Why would you even think that?  We might actually learn something from unpublished opinions, right?

Look at the bright side.  If they’re unpublished opinions, the other side won’t be so quick to study them.

Happy Holidays!

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THE HOA – INVESTOR DILEMMA: CONFLICT IN SOUTH CAROLINA

(BREAKING NEWS – OP-ED) — The author of this post includes the relative case opinion for your educational enjoyment. One does not have to be an attorney to read a court opinion and derive the same conclusions I did, even though they’re not legal advice. 

A lot of you have moved into areas that contain homeowners associations (hereinafter “HOAs”).  After living in one once, I’m no longer a big fan of them. This is largely due in part to the following rationale:

  1. There’s usually an area resident living near you that drives by your home every day and takes notes of “alleged violations” on your property (e.g., grass not mowed to that person’s specified desire; extra vehicle parked on the street; vehicle with signage on it visibly parked in the driveway; mailbox flag painted green when the specifications call for flags to be painted red; 5-gallon bucket of water (with water in it) sitting noticeably within eyeshot, which could draw mosquitoes; dead grass which should be replaced with decent sod (in their opinion); tree branches hanging too low over sidewalk; roof shingle torn away; clump of weeds growing visibly near the entrance to your driveway … and the list goes on and on of all the nitpicking that these “Gladys Kravitz’s” do on a regular basis);
  2. Making modifications to your home without contacting the HOA’s Architectural Control Committee FIRST and getting prior approval (or not) before doing the modifications; and the most notorious …
  3. Failing to timely pay HOA dues and assessments.

I hate it when people tell me I “can’t” do something to a property I’m responsible for occupying and maintaining, don’t you?

While the foregoing examples can be particularly annoying, the argument for having an HOA is that having community-based oversight protects property values in the neighborhood … except when the HOA decides to file liens against you and subsequently foreclose on the property in a manner that “shocks the conscience”.

Such was the case in South Carolina, where (in this case), the Hales, who had been faithfully paying on their existing mortgage regularly, inadvertently forgot to pay their $250 HOA dues and were foreclosed on by their HOA (Winrose).

Investors particularly like this kind of scenario because they can buy properties through HOA sales cheap.  The problem with all of this is that (if you were paying attention beforehand) the Hales had a mortgage and were current on it.

What part of reading the Covenants, Conditions & Restrictions (hereinafter “CC&Rs”) and By-Laws of the HOA do you not get?

Here’s a thought: Before moving into an area, do the following:

  1. Identify immediately upon inquiry whether the property is part of an HOA, COA (Condominium Owners Association) or POA (Property Owners Association) … or any kind of Planned Unit Development (PUD) BEFORE even deciding whether or not you want to live there;
  2. Identify what utility districts supply the property with water, sewer, electric, etc. (yes … these little buggers can posit real headaches for you as well); and
  3. Demand a copy of the CC&Rs (some of these can be quite lengthy … yes, you need to get them) and the HOA/COA/POA/PUD By-Laws … and read them from cover to cover.  You’ll notice one particular thing about these entities: they don’t have to notice lien holders, only property owners!

The disagreement came from the Chief Justice of the South Carolina Supreme Court, who appears to have sided similarly with recent Nevada and U.S. 9th Circuit opinions that HOAs may possess a super priority lien in certain cases; however, when it comes to fighting a homeowners’ claim that you unjustly enriched yourself (as an investor buying their property at an HOA foreclosure sale) for a pittance while they were stuck with the mortgage … well … that’s where the rubber meets the road (as it were) as you’ll see when you read this opinion:

Winrose HOA et al v Hale, Sup Ct SCar No 27934 (Dec 18, 2019)

I found this 11-page opinion interesting because of its apparent equitable conflicts. The case was reversed and remanded back to the appellate court because the Hales demonstrated that the buyer of their HOA lien (Regime) bought 38 other properties at HOA foreclosure sales and not once bothered to pay off the senior liens, which then turned around and foreclosed on the properties Regime bought for failure to pay the mortgages.  In other instances, Regime bought at least 15 properties where it quitclaimed back to the owners for a profit between $2,911 and $13,984 per property … WOW!  What a game of things, eh?  This is one way to make money as an investor, especially when the homeowners are actually paying on their mortgages.  The 38 properties were probably rented out, if Regime actually evicted the homeowners in favor of renters and Regime could have likely pocketed the earnings prior to foreclosure (if there was equity in the properties, could that not be construed as criminal equity skimming?); however those side mentions were not actually contained in the opinion.

Shitty investor behavior?  Perhaps.

If you read Part II of this opinion (starting at Page 5), you’ll see why judges have “equity hats”.  While many investors think of these as “Ass Hats” because in the minds of the investor, a sale is a sale is a sale is a sale.  However, the CC&Rs and the By-Laws clearly state (in nearly all instances I’ve seen) that the HOA is NOT required to notice the lien holder of a pending foreclosure sale!  Even though the mortgage (deed of trust) does state that the lender MAY, in an effort to protect its lien interest in a property, mostly contained in the mortgage’s Paragraph 9), pay the HOA dues to protect its lien interest, most don’t.  This is what has created the super priority liens cases in Nevada … and now apparently, due to inequitable concerns, in South Carolina.

The “Equity Hat” comes in (in this case) where the winning bid “shocks the conscience”.  It’s one thing if the investor were to do a chain of title assessment (COTA) on the property and discover bogus assignments for which it could later “knock out” the existing lender in lieu of paying the mortgage loan off.

However, that is NOT how this plays out.

The inequities in this instance went against the HOA and Regime:

  1. The Hales were minimally in arrears on their HOA dues, yet the HOA foreclosed on a $128,000 home in its eagerness to collect the outstanding $250! The greedy bastards!  Welcome to the world of homeowners associations!  The majority of them behave just like this!  Many at least give the homeowners notice (along with plenty of time) to make up the delinquency in order to avoid foreclosure.
  2. Regime, because it attempted to extort the astronomical sum of $35,000 from the Hales on a $3,000 bid it paid at the HOA foreclosure sale!  The greedy bastards! Welcome to the world of extortion by investor.  This is not unusual; however, since I’m an investor, I tend to look at things a bit more objectively.

Black letter law is what it is. Investors aren’t responsible for paying the senior lien if they acquire property at an HOA foreclosure sale.  Homeowners are responsible (according to their mortgage loan terms and conditions) for paying dues and assessments to prevent the lien holder from losing their first position claim to the property.  In this case, lesson learned.  The Supreme Court vacated the HOA sale and remanded the case back to the Special Master for further proceedings.  Equity is Equity folks.  What shocks my conscience even more is the absence of thought when it comes to buying property in an HOA, giving a third party control over how you live and charging you a fee to do it … and when you don’t pay the fee, they steal your property for a paltry sum just to make a point that they’re in control of your life!

Be that as it may … especially as we’re in the “holiday season” … the outcomes (the just desserts) are based on your honest objectives in investing in anything, whether it’s buying a property (in an HOA or not) or investing in others’ misfortunes. What goes around comes around.

Be that as it may … a homeowner living in an HOA has to be on the lookout for “shitty behavior” on the part of the HOA (including checking the legal description and comparing it to what’s really recorded in the land records … you might be surprised to find the HOA doesn’t have a claim of lien on you at all because the legal description was improper!) … and by not stepping into this trap in the first place by buying elsewhere, where HOA’s don’t rule your life.

I know … some people like having an axe held over their heads all the time to keep them in line.  They think they’re good citizens by living in an HOA community. Many of these HOAs have golf courses and other super amenities that cater to the current affluence out there … but … as the saying goes:  Ah, the times … they are a-changing!  These HOAs may find the younger mindsets of the millennials and their successors want nothing to do with them.

This is why I teach chain of title assessment classes … BTW … there’s one coming up soon … CLICK HERE for more info!  Caveat Emptor!

In my next post … I’m going to break loose into the politico of the discord that has infiltrated America … which goes to show that you can’t drain the swamp without something stinking!  Many of you are “preparing for uncertain times” … and rightly so … you should be!

 

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WHY IT PAYS TO CHECK THE WHOLE CHAIN OF TITLE!

(BREAKING NEWS – OP-ED) — The author of this post is providing the following case for your review to prove his point (not legal advice).  Take the educational value for what it is when you don’t do your due diligence! 

1601 Bay LLC et al v Wilmington Savings Fund Society FSB et al, 3D19-492 (Nov 20, 2019)

This is one of the reasons I decided to offer an online Chain Of Title Assessment (COTA) class in the near future, so you can take advantage of not having to travel distances to participate in (8) 2-hour sessions to learn how these assessments are conducted and utilized.  These are not for foreclosure defense use (as an exhibit) … only for case development.

We are still in the midst of a foreclosure crisis.  It’s all due to the blowback of issues like what’s been described in this case.  It’s not hard to understand.  If you don’t look at the entire chain of title (and don’t expect your title company to do this for you) as an investor or future homeowner, you deserve what you get.

I’m going to be brief about this because you’ve heard me “beat the drum” now for how many years?  Many of you have scoffed at my pontifications.  Some of you have taken it to heart.  The mega-banks are worthless when it comes to fair and honest dealing, yet consumers are still flocking to them for loans, which they are still securitizing.  Again, definition of insanity (as I discussed in my last post).

The upcoming workshop dates … February 1st, 8th, 15th, 22nd.  Times are Eastern (9 am – 1 pm).  For more details, see the Clouded Titles website.

 

 

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