NOTE: The author of this blog post is a paralegal who has committed a great portion of his life to helping homeowners in defense of their homes in cases of attempted foreclosure with research and educational outlets and information. The information posited here does not (for obvious reasons) constitute legal advice but rather the opinions expressed by the author.
The whole idea behind the ruling in Spokeo was narrow in nature. The U.S. Supreme Court (May 16, 2016) was asked whether Robins (the consumer bringing suit against the people search engine Spokeo) had standing to maintain an action in federal court under the Fair Credit Reporting Act.
The author is attaching the U.S. Supreme Court opinion for your thorough study and review.
Suits involving any federal statute are supposed to be filed in U.S. District Court in the jurisdiction where the consumer lives. There is no doubt that Robins did in fact file the suit in the appropriate jurisdiction; however, the U.S. District Court dismissed his complaint for lack of standing. Robins tried to file this as a class action, claiming that Spokeo did this “damage” not only to himself, but to others similarly situated. The “damage” was listing personal information on Spokeo’s search engine that exposed Robins’ personal information to the general public.
The nation’s highest Court opined that the “injury-in-fact requirement” mandates that a plaintiff has to allege an injury that is both “concrete and particularized”, citing Friends of the Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc., 528 U.S. 167, 180-181 (2000). Thus, since the turn of the century, any plaintiff bringing an action in federal court should have known that if they could not demonstrate a specific and actual injury-in-fact, their suit wasn’t going anywhere.
APPLICATION OF SPOKEO TO REMIC FORECLOSURES
Now we examine the issues involving a trustee for a Real Estate Mortgage Investment Conduit (REMIC) bringing a foreclosure action against a consumer/homeowner under the same pretext. Assuming that the U.S. Supreme Court’s ruling is far superior to that of a state court judge, the REMIC would then need to bring an action that demonstrates specific and concrete injury based on a “particularized” set of facts.
The REMIC’s trustee comes into the foreclosure action claiming the following:
- The homeowner/borrower entered into a contract (mortgage or deed of trust);
- The homeowner/borrower failed to make his payments;
- The homeowner/borrower is in default; and
- As a result, the certificate holders that the trustee is representing have been financially harmed.
Here’s where things get a bit dicey.
True, the homeowner/borrower did in fact sign a contract (mortgage or deed of trust) … ADMITTED. However, who actually funded the loan hasn’t been fully proven, due to the “table-funded” aspects of securitization.
False, despite the homeowner making his payments, the investors still got paid every month, thanks to the Advances section of the REMIC’s own governing document [the 424(b)(5) Prospectus], which is available through either sec.gov or secinfo.com. Every REMIC has conditions whereby if the borrower fails to make the payment, the servicer (or subservicer) shall make the payments for them. Thus, whether or not the borrower failed to make their payments under #2 of the foregoing, someone, namely the servicer (or subservicer) was making the payments to the certificate holders within the REMIC every month as required under the Advances section of the Prospectus.
You see, investors who bought into this line of crap (in many instances) got stung when the markets collapsed in 2007-2008. Many investors sued under the claim that the lenders did not adhere to their own documents when they allegedly made “qualified loans” to borrowers who had the ability to repay those loans. Insurance companies filed suits against the REMICs and their sponsors because the lenders filed false applications for default insurance, knowing full well that the borrowers who got the loan proceeds didn’t have the ability to repay, when on the insurance applications, the applicants stated the insurance would cover defaulted loans after Day 91. Many insurance companies were on the hook and paid out beaucoup bucks to these financial institutions for loans, multiple times over, before realizing they were snookered into paying on claims that were based on false information.
So here you have a REMIC, allegedly coming into court, asking a state judge to grant foreclosure (or in the deed of trust scenario) filing “suspect” documents in the land records and subsequently selling the homeowner/borrower’s property on the courthouse steps at a prescribed date and time. In order to stop a deed of trust from being foreclosed on, the homeowner/borrower has to file a suit in court, generally in U.S. District Court, because the lender claiming to have the right to foreclose is in another state from where the property is situated.
The problem is … the REMIC’s attorneys are claiming that #3 and #4 (of the foregoing itemized sentences) are in fact true, when they know otherwise.
If the Advances section of the REMIC trust’s own Prospectus says the servicer (Master Servicer or subservicer) shall pay the certificate holders the principle and interest payments every month whether the borrower pays or not, then where is the actual “injury in fact” for which the trustee is bringing the action? Where is the specific dollar lost wherein the certificate holders were harmed?
When a judge asks the homeowner/borrower in court, “When’s the last time you made a payment on your mortgage loan?” They are representing the REMIC from the bench. Homeowners and their attorneys of course, don’t know how to respond without pissing off the judge. One would think the proper answer would be, “I cannot recollect when I made the last mortgage payment, your Honor; however, the payments to the claimed injured parties have been paid every month according to the Plaintiff’s own documents.” However, unless the homeowner/borrower actually had the knowledge in order to properly respond, citing Spokeo v Robins as the reason for their response, the court is going to treat them like a deadbeat.
Further, when most attorneys for the homeowner/borrower answer the complaints or initiate suit, they virtually admit that their client is in default, when they should have known otherwise. This is due to the nature of the laziness of most attorneys to do their homework and understand the real issues within the gravamen of the suit.
Even further than that, the plaintiff’s attorneys bringing the foreclosure claim, stating that the borrowers are in default, are in essence, lying to the court … and getting away with it. So what the hell is going on here? Either there is a concrete injury-in-fact under Spokeo or there isn’t, right? The right to challenge standing based on the concrete injury-in-fact works both ways, not just to the detriment of the bank.
The real truth probably lies in WHO retained the foreclosure mill attorney to bring the action in the first place.
One look at the supporting documents will probably tell the homeowner/borrower that the real party in interest here is the servicer or Master Servicer (or the subservicer), who is lying to the Court, claiming they have the right to be there, representing the interests of the REMIC, claiming the borrower is a deadbeat, knowing full well that they (the servicer) have been paying the certificate holders all along; thus, the parties in interest really haven’t been harmed, have they?
Do you (as the homeowner/borrower) actually have a signed contract with the servicer? (Didn’t think so.)
So it appears that the servicer’s own employees “manufactured” the assignments that are “suspect”, which are then recorded in the land records in the county where the property is located … and then using their own phony documents in reliance of their planned foreclosure actions against the property. In the case of a second mortgage loan lender, its servicers are doing the same thing, knowing that when they foreclose, they get to pay off the first mortgage a negotiated sum and then sell the property for well more than the equity share held by the homeowner and pocket the difference, many times splitting the ill-gotten gains with the law firms doing the dirty work.
The U.S. Supreme Court clearly outlined the parameters in Spokeo:
- The Plaintiff must have suffered an injury-in-fact;
- … that is fairly traceable to the challenged conduct of the defendant; and
- … that is likely to be redressed by a favorable judicial decision.
Thus, if no concrete injury-in-fact can be proven, that the Certificateholders weren’t damaged because they were being paid every month by the servicer, then neither the Trustee nor the claimed injured parties have any standing to pursue the foreclosure in the first place. If #1 of the foregoing can be demonstrated to the court hearing the matter that there’s no real injury-in-fact, then #2 and #3 can’t be approached because the Plaintiff lacks standing to even be there in the first place!
Thus, the lessons learned from the foregoing are:
- Discovery should be utilized to make the “plaintiff” produce payment records of all payments made to the certificate holders; thus, demonstrating that the certificate holders weren’t harmed;
- Spokeo’s very finite determinations supersede any state or federal district court ruling;
- If the Plaintiff’s allegations claim the homeowner/borrower is in default, then all of the phony documents recorded in the land records were “created” as part of a criminal scheme to defraud the homeowner/borrower of their property;
- The court should be asking the plaintiff’s attorney WHO actually retained them to represent the REMIC; and
- The real truth should then be exposed, based on the court’s new understanding of what’s actually going on here, in order to facilitate a challenge to all of the phony documents recorded in the county land records through a C & E action.
If you haven’t been on the Clouded Titles website lately, perhaps you should check out the latest information available. In addition, check out the archived broadcasts from Clouded Titles author Dave Krieger, in interviews with Dr. Judy Mikovits and Dr. Carrie Madej about what’s really going on with the jabs.
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