Tag Archives: default

Letting the banks “get away with it” …

(BREAKING NEWS, OP-ED) — Part of what we’ll be discussing in the upcoming Foreclosure Defense 101 Workshop on Saturday, October 24th between 10:00 a.m. and 2:00 p.m. (EDT) is affidavits … in general … and specifically regarding lost notes and assignments.

To further this discussion, I did some heavy research after seeing a Law.com post about a Pennsylvania “lost note affidavit” case and upon review, found what I was looking for … and the results were shocking!

On Page 2 of this 12-page opinion, the borrower (Rao) mortgaged the property and gave MERS nominee status on behalf of SunTrust Mortgage, Inc. That was in early 2006. Notice the following sentence … “On or around April 22, 2013, SunTrust discovered the note was missing from their vault and David Aken, Vice President, executed a Lost Note Affidavit.” Two years later MERS, assigned the mortgage to MB Financial.

Without looking at the assignment, I’ll bet you the servicer’s employees drafted and executed that assignment and it all followed Rao’s alleged “default” on his mortgage (March 1, 2011). That means it took SunTrust two years (April 22, 2013) to discover it didn’t have a “note” in its vault. Could it be that the note was shredded after it was uploaded into the MERS® System? At the bottom of page 2, MB Financial claimed it was in possession, either “directly or through an agent” of a “Lost Note Affidavit”, maintaining it had the right to foreclose on the mortgage.

Now we go to court … MB Financial’s attorney brought in a witness from SunTrust’s “default” department, attesting to the fact that a “Lost Note Affidavit” existed with a “copy” of the note, which contained no endorsement page. Gee, the author wonders how they got a “copy” of the Note if it was lost … Hmmm. Did anyone bother to ask why that was so? How can you negotiate a “note” if only a “copy” exists?

The bank also submitted a certified copy of the Assignment of Mortgage, assumedly drafted and executed by SunTrust to MB Financial. The trial court sustained Mr. Rao’s objection to the Lost Note Affidavit based on hearsay and refused to allow it into evidence, in addition to the admission of the Limited Power of Attorney.

The confusion begins where Mr. Rao (assumedly through his attorney) first made an oral motion for a Nonsuit and discussing with the judge the difference between a Nonsuit and a Directed Verdict, which the Court then entered on behalf of the homeowner. The Directed Verdict was later changed to a Nonsuit in favor of the homeowner after the bank filed a Post-Trial Motion. The next paragraphs … read them carefully because they contain the “nuggets”, in which the objections were sustained in favor of the homeowner.

Understand that was this entire matter was over was the differences between a nonsuit and a directed verdict and what the evidence could otherwise prove or show. Because the Trial Court precluded the Lost Note Affidavit from evidence, MB Financial couldn’t prove “possession” of the Note. But could it “prove” its case anyway if it only had a “copy”?

This is where it helps to know local court rules (or at best, state rules).

What you’re seeing in this case is the roundabout, typical argument that banks always use in getting their lost notes “re-established” to make them “stick” as evidence at trial. Why then, did it take SunTrust so long to discover it had no note? Was it because it wasn’t until after 2011 that Rao didn’t pay his mortgage loan and someone went looking for the documentation? Why did it take so long to discover the original note wasn’t part of the collateral loan file? The Superior Court ruled that as long as the witness can “provide sufficient information relating to the preparation and maintenance of the records” to justify their trustworthiness, they should be allowed into evidence as business records.

However, there is no mention of proof of the default. Since MERS was involved, the note had to have been securitized into a REMIC trust, which was commonplace during that time. The author sees no evidence of any default argument here, but rather, a business records exception argument.

Also notice that the Court declined to analyze whether the contents of the Lost Note Affidavit complied with the statutory “sufficiency requirements” and reversed and remanded the case for a new trial. That means MB Financial “gets another bite at the apple”.

And this is why we’re going to cover the affidavits per se in our upcoming workshop. The basis for creating an affidavit is personal knowledge and how and when “things” got lost, stolen, misplaced … or even created in the first place!

You can sign up for the workshop on the Clouded Titles website!

The author of this post is not an attorney and offers this constructive analysis for educational purposes only.

Leave a comment

Filed under BREAKING NEWS, OP-ED

A QUESTION OF LIABILITY?

(BREAKING NEWS, OP-ED) — The author posits the following for your educational consideration in light of the current uptick in foreclosures and this article should not be regarded as legal advice. 

Here’s a brief scenario for homeowners to ponder … 

It’s 2009.  A Tampa homeowner was among thousands served by a process server with a Summons and Complaint to Foreclose because of an alleged default on their mortgage.

Like most homeowners at the time, when served, they freaked out.  They freaked out, so much so, that 97% of them decided to pack up their belongings and move away.

Like most homeowners at the time, before the foreclosure even took place, more than likely, they couldn’t afford to pay their hazard insurance, which is mandatory under their mortgages and deeds of trust.  That’s usually the first thing that gets defaulted on BEFORE the mortgage payments go into arrears.  The next thing that goes into default is the property taxes, despite the fact most mortgage loans are escrowed.  But what if they’re not?

So the Tampa homeowner gives up in despair, with no hazard insurance in place and moves out, leaving the swimming pool uncovered and the backyard fence unlocked.

A couple moves in next door and as they’re moving load after load into their “new home”, they notice their 2-year-old toddler has wandered off.  Where do you think they found him?

Floating face down in the neighbor’s pool … unable to  be revived by paramedics.   Nice first day in their new home, huh?

THIS REALLY HAPPENED IN TAMPA, FLORIDA

The couple discovered that the bank was foreclosing on the property and sued the bank for negligence.  The bank balked, saying that the title to the home was not in the bank’s name but in the name of the homeowner because the foreclosure was not completed and the bank wasn’t in possession of the home.

So who’s liable?    The Tampa homeowner?

For further clarification, check out this newly-released, 10-page case: Apex Mtg Corp v Great Northern Ins Co et al, 7th App Cir No 19-2525 (Aug 24, 2020)

This will help you understand how banks think. This will also help any homeowner under fire in a foreclosure setting to understand what unintended consequences are.

Even if your name is still on title, there can be unintended consequences if anything happens on your property AFTER you vacate it.

Next, look at Page 5 in the case and see how the 7th U.S. Circuit Court of Appeals viewed “actual possession” and “default” as to their stated terminology.

Here again, we look at the definitions in play as the means for who’s liable and who’s not.

Who’s in possession? 

The entire schematic in this case falls upon the party in control of the contract (mortgage or deed of trust).  This is why this case is very self-explanatory, no matter how many times you read it.  It contains some great nuggets that may help in keeping homeowners in foreclosure trouble out of hot water.   While the author of this post submits that the responsible thing for any vacating homeowner is to “secure” everything on their property to prevent such dangers, what sense does it make putting all that extra money into a place you’re going to end up moving out of?

As long as you are in possession, this author suggests you examine the chain of title for flaws and suspicious assignments because those assignments will generally be filed just prior to the alleged lender attempting foreclosure commences the process against you. Fighting those suspect documents is clearly a way to stay in your home for up to two years, which is why this author has materials available on the Clouded Titles website. No pressure.

If you have lots of equity in your home, the banks want the house and they’ll fight you for it, which is why this author likes the idea of selling and downsizing while the benefits of recovering any equity are within reach.  This gives you more options.  The author only suggests fighting if the bank is moving too quickly and you need time to market and sell your home … or stay in it until you’ve formulated a PLAN B.  Staying in the home and fighting the bank for years on end only adds to the stress on your body’s immune system, which by now, you’ve probably figured factors right into why your chances for getting COVID-19 might be higher due to a weakened immune system.

Having a weak immune system makes you more “liable” to succumb to more than just the common cod.  This author knows because he’s seen it first hand.

Stay the course.  Fight if you have to.  Always have a PLAN B … and don’t be afraid to do your due diligence to avoid unintended consequences.

 

4 Comments

Filed under BREAKING NEWS, OP-ED

PREPARING FOR THE FORECLOSURE ONSLAUGHT

(OP-ED) — The author of this post is a paralegal and trial consultant on quiet title, foreclosure and document challenges and does not offer the following information for anything but educational “intake” value; thus, none of this should be regarded as legal advice nor relied upon without the advice of competent counsel.  

THE TIME TO PREPARE IS NOW!

Understand that my postulations on this blog serve as warning signals for “how to head ’em off at the pass” and my notions are served by supporting case law.

I consider Rhode Island to be a hopeless case when it comes to MERS-related cases.  Anytime you want to argue what rights MERS has to do anything in front of a Rhode Island Superior Court judge, you may as well just turn around, bend over and let him … (insert your own imaginative deviations here).

However, on occasion, a case will come up where judges’ deviant behavior is called out by their state’s Supreme Court and I make note of the following case as it relates to other matters you should be looking out for at the inception of the alleged “bank” behavior in its attempt to start a foreclosure action:

Woel v Christiana Trust et al, Sup Ct R. I. No. 2018-347 (June 2, 2020)

The very basic tenets of a foreclosure involve “notice” and what constitutes proper notice.  Many things come into play in this 16-page opinion; however, despite the rantings of the mortgage loan servicer in this opinion (Selene Finance), the state’s highest court vacated the Superior Court judge’s for summary judgment in favor of the alleged REMIC.

Preparation for the onslaught by your alleged “note holder” involves some deliberate planning:

  1. Get out all of your mortgage documents and read them, especially the part where the default and any related notices to you come into play.  If notice does not comport to the terms of your mortgage or deed of trust, your focal point becomes attacking THAT flaw, not everything else.  The foregoing case illustrates that.
  2. Obtain copies of all recorded documents NOW!  You get them from your county land records. Do not wait until you start getting notices from your mortgage loan servicer and go into a state of panic or denial and hit the “pause” button.  Because of this COVID-19  pandemic, you have the ideal opportunity to get proactive to deal with what may be coming at you head-on when the moratoriums are lifted and the servicers go on the warpath.
  3. Locate any/all Assignments of Mortgage or Deed of Trust.  These become your secondary form of attack.  You will need to analyze them fully and understand what constitutes the basis for your attack.  Come at them in the wrong way and your attack plans will fail. Examining these assignments requires due diligence and intensive research.  Plan on spending an entire day looking up everyone that is named within those assignments and background them thoroughly.
  4. Develop a timeline of your chain of title.  You have to be able to clearly identify WHAT happened during the course of ownership of your home and identify with specificity WHEN it happened and attempt to detail the reasons for such occurrences.  Knowing HOW an entity operates in order to develop suspect patterns is important in your research, so don’t skimp here, on time or details.
  5. Obtain certified copies of all recored assignments as well as “office copies” of all recorded documents.  You want a certified copy of the assignment as evidence in support of your two-pronged secondary attack.  What I will be sharing in the upcoming online Foreclosure Defense 101 Workshop will deal with this step in the process.  Keep in mind that you may have experience in dealing with previous foreclosure attempts.  Many of the defenses may have resulted in successes in your favor; however, also keep in mind that the servicers’ lawyers are going to ramp up the next time and probably won’t make the same mistake again.
  6. Open all mail and especially those certified letters and notices from your alleged “note holder” or servicer.  DO NOT let them pile up on the desk or kitchen counter. Be excited when they arrive.  Be excited when the process server comes to your door.  DO NOT avoid service.  If you do, the bank’s lawyers (who are really representing the servicers) will serve you with Substituted Service and/or when that attempt fails, you get hit with a default judgment, which is as good as gold to the bank!  (This of course, does not apply to deed of trust states!)
  7. Examine any notices you receive regarding the “alleged default” on your loan. Understand WHO the letter is coming from and WHO is attempting to accelerate the note, which requires payment in full in lieu of pursuit of a foreclosure action against your property.  The letter should fully explain WHO is claiming to be the “note holder” that has the right to enforce the terms of the mortgage or deed of trust.  If that portion is missing from the notice, you have every right to immediately demand an explanation vis a vis a Qualified Written Request under Section 6 of the Real Estate Settlement Procedures Act (RESPA).  You cannot prepare an adequate defense if you don’t know who’s coming after you.
  8. In all instances, assume that: (a.) any notices you get from a trustee or law firm are based on actions by the mortgage loan servicer, NOT the lender or trustee of a REMIC trust; (b.) any notices you get will likely contain false and misrepresentative statements; and (c.) any notices you get will rely on a corresponding assignment that has been recorded in the land records preceding a Substitution of Trustee or Notice of Default or Notice of Intent to Foreclose.
  9. At all times during the process, keep your eye on the land records!  Check them weekly for any sign of new recordings, corrections to the assignments or newer recordings, attempts to hide the assignments by using alternative means (like putting all of the recorded documents in the name of your spouse, etc.). If need be, ask your county clerk for help in determining if there’s “anything else” in the land records you’ve missed that could defeat your defense, including Limited Powers of Attorney recorded by the mortgage loan servicers, especially when they’re the “assignor” and the “assignee” (called a self-assignment) of any alleged authority.
  10. Understand that YOU are NOT the perpetrator of any alleged foreclosure scheme coming against you!  You have every right as a property owner to defend the home to the best of your ability, even if you lack legal acumen.  As a participant, you may also become the victim of identity theft and numerous felonies committed by the bank, the trustee or the mortgage loan servicer dealing with your mortgage loan.  Assume everything they tell you is a lie … and you won’t be surprised later because you’ve prepared yourself to retaliate against their false assumptions.

Mortgage loan servicers are out to make money to reimburse what they had to pay investors or whatever lender happens to allege it’s the “note holder”.

At a point in time in the near future, the moratoriums will be lifted and you should be well prepared to understand whether the servicer coming against you has any right to offer you a loan modification or forbearance … or for that matter … to come against you at all.  I’ll discuss that in my next segment.  Visit the Clouded Titles website for more information!

Leave a comment

Filed under OP-ED, Securitization Issues, webinar, workshop

AMERICA BRACES FOR MASS FORECLOSURES AS ECONOMY RE-OPENS!

(UPDATE: SEE ADDENDUM TO THIS POST AT THE BOTTOM!)

(BREAKING NEWS — OP-ED) — The author of this post has spent the last 12 years researching securitization, foreclosure issues and other consumer-related, debt collection topics.  The opinions offered here are the authors and should not be construed as legal advice. 

FOR MANY BORROWERS, THE SHIT WILL HIT THE FAN! 

As expected, I’m getting backchannel feeds on the serious uptick in foreclosures, especially in the GSE-related foreclosure arena.  So here’s the immediate concerns, based on my current research:

  1. The government (through Congress) issued a moratorium on foreclosures due to the corona-crisis.  You can anticipate that it’s the calm before the storm because when the moratorium is lifted, the mortgage loan servicers for Fannie Mae, Freddie Mac, Ginnie Mae and conventional lenders have already made plans to ramp up on those lulled into a false sense of security. Congress will not interfere with the “pulse of the economic backlash” when it comes to the government’s own interests, FHFA or not.
  2. The mortgage loan servicers have been paying advances to the GSE’s REMICs (Real Estate Mortgage Investment Conduits) since Congress imposed the moratorium. Under their contracts, the servicers and/or subservicers  are required to pay investors the principal and interest on every loan alleged to be in “default” under the terms of the mortgages and deeds of trust these mortgage loan servicers are collecting payments from borrowers on that are allegedly contained within the REMICs.
  3. The longer an extended moratorium lasts, the more “in the soup” the servicers become because their surplus funds accounts they use to pay the advances with are being further depleted and they would logically be forced to “borrow” from everyone’s escrow accounts (“rob Peter to pay Paul”) to make good on their contracts, knowing full well that when (not IF) the moratorium is lifted, they will force the shit to hit the fan in order to foreclose, sell and reimburse themselves for all their losses.
  4. Those who have been able to make their mortgage payments every month despite the moratorium might want to check their escrow accounts to make sure they are solid and accurate and haven’t been “borrowed from” (the “robbing Peter” side of the equation). The servicers will emphatically deny they’ve raped every account they could grab money from; however, if notations aren’t made of the alleged “robbery”, how would the servicer actually know WHICH ACCOUNT they borrowed from, meaning the innocent borrowers who’ve made their payments every month will see a shortfall in their escrows, which could inadvertently put their accounts in default, which in turn could force borrowers to have to make up the shortfalls (through no fault of their own) to make up the difference to bring their accounts current.  This may be one of the reasons that Ocwen Loan Servicing and its parent issued $600-billion in securities to shore up their “advance” payments.
  5. Because the moratorium is set for 60 days out, whatever delinquencies occurred during that time will be calendared for default on that magic date I’ve talked about before … DAY 91!  Expect a rash of threatening letters from the mortgage loan servicers to borrowers in trouble as they push their collection activities forward another 30 days past the moratorium to hit that magic date!

DAY 91 FACTORS INTO THE ACCOUNTING, MORATORIUM OR NOT! 

It matters not whether you were given a “grace period” with this moratorium, the mortgage loan servicers are in business to make money by foreclosing on properties they can’t resolve; thus, if you don’t have a windfall to bring your loan delinquencies current, it will trigger DAY 91.

Prior to “DAY 91”, you may see the following actions taken by the mortgage loan servicers:

  1. DSNews is already reporting intended aggressive pricing on foreclosed properties to sell to third-party investors as quickly as possible.
  2. Anticipate MERS-related documents, particularly REMIC transfers and indirect transfers to the servicers themselves, as a means of justifying the upcoming foreclosures, which means those assignments are going to hit the land records just prior to the start of the actual foreclosure process.
  3. The faster the servicer can sell the property to the third-party investor, the faster it can convert title to the GSE “after the fact” and “lose” that REO inventory to the new buyer (with transfer of title) before the homeowner even knows what hit them. The GSE will then do a direct title transfer (through the mortgage loan servicer) directly to the third-party investor who will assume all risk of acquisition of a property stained by title issues.

THE GSE’S HAVE REMICS TOO!

One thing most people don’t realize (and this can be verified) is that the government sponsored entities set up REMIC trusts to obtain investor money they use to back the loans they guarantee.  If you’ll go to irs.gov and type in Publication 938 for 2009 forward in the search engine, you’ll see the listings (by quarter) LOADED with GSE-backed REMICs!  Depending on what year you took out your loan is the year you’d search for on that website, plus subsequent years in case your loan was traded into another related REMIC until trading stopped within the MERS System®.  The securitization process is a virtual “shell game” until the foreclosure starts and the roulette wheel stops on the particular REMIC the servicer is paying.  The servicer will then move toward the final DAY 91 objective … to cash in on the credit default swap, default insurance, PMI, LMPI or whatever other cash cow it can get its hands on to reimburse itself for all of the advance payments it made during the absent of the borrower’s payments.

In the meantime, Fannie Mae and Freddie Mac are now going to buy home loans going into the government’s forebearance program just after they close, something neither had done before, in order to provide liquidity to the mortgage markets so originators can keep lending.

So as not to keep regurgitating a point, I put a news story in the top link so you can see where the forbearance programs are headed.  The CNBC article (above) affirms everything I’ve been saying … as noted in the following paragraph:

“The four-month servicer advance obligation limit for loans in forbearance provides stability and clarity to the $5 trillion Enterprise-backed housing finance market,” said FHFA Director Mark Calabria. “Mortgage servicers can now plan for exactly how long they will need to advance principal and interest payments on loans for which borrowers have not made their monthly payment.”

So you see, the servicers took a gamble on the advances and went into the hole doing it … and the government is in bed with this.

Some friend the government is, huh?  They claim to give you relief yet who’s really getting relief?  The banks and their minions.  The Fed claims to have loaded $2.3-trillion into the economy, yet where did that money go?   Not into our pockets I can assure you.

Know this … no matter what administration is running the United States, the end result is the same … protect the government at all costs … screw the dumb-ass taxpayer who doesn’t know any better (the way “they” think).  These Congresspeople think they know more than you do. Could they be right?  After all, who’s the smarter … the ones who got elected or those who elected them?  Based on what promises?  The existing Congress, a majority of whom have been serving for decades, have done their best to protect their power bases while kicking the can down the road … in the name of politics.

And we collectively let them do it.  We have collectively fallen for their bipartisan, two-party, political crap.

Congress made a deal with the banks … to protect the banks … it’s in 12 United States Code … Banks and Banking.  Congress has repeatedly let the banks screw us.  And we collectively keep letting them do it.  When is the merry-go-round of craziness going to stop?  When we have a civil war?  Or maybe a revolution?  At the polls?  Or in the streets?

And we should not worry about the mortgage loan servicer’s accounting practices, right?

IF YOU’RE NOT IN DEFAULT, HOW IS IT THEY’RE TRYING TO FORECLOSE ON YOU?

All the while the moratoriums have been in place, the servicers were stuck paying the advances on the mortgage loans, whether borrowers paid their monthly payments or not. Now the piper is coming to collect. If you didn’t (or couldn’t) work out a forbearance proposal or loan modification during the time you were a shut-in, the foreclosure process (unknown to you) was probably on the back burner and now things just got fired up again.

Those in non-judicial states will be suffering more dramatically as they try to figure out how to cope with aggressive mortgage loan servicer activities in stopping courthouse step foreclosures by publication and sale.  These borrowers are in a definite time crunch as they don’t have the luxury of court hearings unless they create them through the filing of a lawsuit. That means money spent out of pocket in order to stay in the current “survival mode” we’re already experiencing as the economy starts to bounce back from quarantines and lockdowns.

Those borrowers residing in judicial states will ultimately “have their day in court”.  It will be a 90-120 day average by the time the case gets to trial.  Keep in mind that most courts will be closed until at least mid-July 2020, so the uptick in foreclosures will probably start after the 2nd quarter ends (in 2020).

But if the advance payments were being made … how is it you’re in default and the investors have been harmed?

That’s something the banks and their servicers say is not up to you to decide … as you don’t have a contract with the investors!

You have a contract with the originating lender, which in a securitized mortgage … is a corresponding lender!

And logically, you’re going to be searching the land records trying to find that pesky assignment, right?

But wait!  The servicer’s attorney’s are going to argue that you’re not a third-party beneficiary; thus, you don’t have a right to bring a claim against the assignment.  How is that relevant?  Your name is on the assignment, right?  The originating mortgage or deed of trust is referenced on the assignment, right?  Who said anything about being a third-party beneficiary?  You see … this is how the bank’s attorneys get the courts to agree with them, because your loan was securitized and you and the investor have no “nexus” or commercial connection to each other.

POTENTIAL SOLUTION … ATTACKING THE DOCUMENT ON DIFFERENT GROUNDS!

We are starting to see results in the use of the C & E (Cancellation & Expungement) Action as a viable way to throw a “monkey wrench” into the grind of the foreclosure machine.  The questions about this process vary but the crux is the same … what is it and how does it work?

In a brief step-by-step process …

  1. The borrower goes to the public record and obtains an office copy and one certified copy of the assignment(s) in question.  These are the suspect assignments, which may contain up to a dozen or so false statements and/or misrepresentations.
  2. The borrower then researches and procures evidence showing the statements contained within the assignment(s) are false and/or misrepresentative. You can bet that no right-minded cop or detective is going to investigate anything without being fully “briefed” on the subject matter showing why you believe the public record to be false and misrepresentative, constituting a felony recording under most state statutes.  Developing harder-to-find evidence may require the services of a private investigator.
  3. The borrower (still on title, generally) goes to the local police department and files a criminal complaint on the assignment(s). The complaint filing is designed to generate a police department case number.  The borrower can be expected to spend time with a detective or officer explaining the nature of the complaint, which is most likely going to be hand written on their complaint form. You can do this before or after you file (or respond to) a foreclosure action.  I generally prefer to do it BEFORE I file the action, that way, I can include the criminal complaint in my civil action for damages.
  4. I file a declaratory relief action against those responsible for the assignment(s). I would suggest following the criminal statute religiously and if applicable, couple it with the consumer protection act statute individually for the State (of the Union) I’m in, in a claim for damages.  I do NOT sue for wrongful foreclosure because the foreclosure hasn’t occurred yet.
  5. Make sure the other side’s lawyers get the criminal complaint included with the exhibits.  This not only lets the court know a crime may be connected with the foreclosure filing, but that the attorney for the servicer may be held as an accessory if they keep trying to insist the document is legal. No right-minded attorney, bank lawyer or not, isn’t going to risk being disbarred for going up against a criminal complaint.  If anything, it will certainly “shake them up”, possibly forcing a settlement.
  6. Make sure all parties (the party who prepared the document, the party who executed the document and the party who notarized the document) are served.  I find suing the servicer themselves is a moot issue if the foreclosure hasn’t occurred yet.  If the servicer sues and you find the assignment in question was prepared or ordered by the servicer or its law firm, then the law firm, if it prepared the assignment(s) are also named defendants because they knew or should have known that the information was false and/0r misrepresentative.  Include the law firm and the lawyer who prepared the document in the criminal complaint.
  7. If at all possible, keep the civil action and the criminal action going simultaneously.  Do not drop the civil complaint if the DA decides to prosecute the document and those responsible for creating it and recording it, in violation of the penal code.  By dropping the civil complaint, you’re sending a signal to the DA that you’re not serious about pursuing damages.  Two-pronged attacks are better than one.
  8. Prepare your deposition list.  You’d be surprised once you start moving for depositions of the parties involved they don’t come at you with a settlement, rather than risk a criminal complaint against them moving forward, thus reinforcing the civil action in the judge’s mind as being even more legitimate.  Do not hold back on the other side’s lawyer if the law firm prepared the document(s) that are suspect.
  9. Follow the court docket religiously.  That means twice a day for the entire duration of the lawsuit. Once in the morning and once in the late afternoon, before the court closes.  The other side will wait until the last minute to file stuff to screw with you, especially on Friday afternoon, when they can buy time over the weekend to screw with your calendar (your time off relaxing) and your ability to respond to their motion or brief.
  10. Be prepared for oral argument.  You never know when you’re going to get called into a hearing to determine the validity of your lawsuit. The judge may also query law enforcement to see what they’re doing about your criminal complaint.  In one instance we’re aware of, the local police department forwarded the complaints to the DA … AND the State Attorney General’s office for follow-up!  Also, make sure you have expert witnesses lined up that can validate both your criminal and civil complaint information.

I know we haven’t taught HOW to set up the criminal complaints in our regular C & E classes; however, this new injection of the police report does add a certain flavor of suspicion in our civil claim, don’t you think?  Imagine the consequences:

  1. The attorney handling the foreclosure matter attempts to interfere with the criminal investigation of the matter and ends up making the matter worse, potentially putting himself in a position of obstruction of justice.  The attorney for the bank cannot attempt to persuade authorities from looking into your complaint without lending suspicion of them being involved.
  2. The law firm or the attorney preparing the document ends up being indicted by a grand jury as part of the grander scheme of things.
  3. The judge handling the civil matter is found to be “side dealing” and interfering with the criminal case in order to further the civil case along to help the bank out, either through direct interference in the criminal investigation or by pushing the civil case forward in favor or the bank knowing a criminal prosecution is likely, which would make him an accessory to a felony … enough to remove him from the bench and potentially put him in prison!

There is also a potential chance that the criminal investigation will go nowhere because the investigators: (a.) weren’t provided with enough evidence or information by you to establish probable cause; or (b.) didn’t understand the nature of the complaint because of the way it was presented.

I have 18 sets of the C & E class (8 DVD-video set and the book, The C & E on Steroids!) available online on the Clouded Titles website.  Once these are gone, they will take time to re-order, more time than you might have. I don’t have to tell you that following this moratorium’s end, those in trouble … their days are numbered.

Remember, when you get the kit, I give you an hour of consulting on your specific case, which may include a call to a criminal attorney who can give me ideas as to how to posture your criminal complaint based on what evidence you have! 

UPDATE ADDENDUM:  As I mentioned on City Spotlight – Special Edition on WKDW-FM, which will repeat this coming Monday, May 4th at 2:00 pm. Eastern Time, CLICK HERE TO LISTEN, attorneys now have a duty to inquire whether the client is using their case to commit fraud or some other crime upon the defendant in a suit.  The American Bar Association’s Standing Committee on Professional Responsibility has issued Formal Opinion 491, to clarify this requirement in the wake of increased reporting of individuals using legal services for money laundering and terrorist financing.  But it goes beyond that definition, especially if the attorney(s) or their law firm participated in the drafting of the bogus assignment and then had it sent back to them once it was executed and recorded.  This is a way to: (a.) name the law firm in the suit; (b.) name the attorney in the suit; and (c.) force the attorney to inquire as to whether he knew before submitting the document to be executed that it contained misrepresentative statements, which could warrant criminal legal action against him and/or his firm.  This is where things get dicey for the other side because depositions and discovery can now target counsel who participated in any way in the drafting, execution and recording of a document that could be construed to be a third-degree felony in many states!

Here’s the formal opinion: aba-formal-opinion-491

 

 

 

 

 

 

Leave a comment

Filed under BREAKING NEWS, OP-ED, Securitization Issues

WHEN THE NOT-SO-OBVIOUS BECOMES OBVIOUS …

(OP-ED) — The author of this post is not an attorney.  I hate having to put disclaimers on here, but some people can’t separate common sense from what might be termed “legal advice”; thus, given the behavior of  “the system of things” to always backfire at some point in time, caveats are always necessary in any walk of life.

Happy New Year!

Being as it’s 2019 still doesn’t change the fact that on many an occasion, mortgage loan servicers are the parties actually conducting the foreclosures both judicial and non-judicial settings.  We’re seeing an uptick in the number of cases where assignments of mortgage or deed of trust show the “assignee” as the benefactor of the mortgage loan (ONLY) which is when the conveniently-manufactured “excuse” for paperwork is discovered in the land records around the time of the foreclosure action.  This does not excuse the fact that you have no contract with the servicer, but the lender does … maybe.  Some sort of authority has to represent what the servicer can do and cannot do; however … no one bothers to check limited powers of attorney to see if such authority was ever granted.  Are we by-passing that evaluation all because of desperation, which causes us to overlook detail?

The Not-So-Obvious … 

Roughly about a year ago, a sailboat waterfront property in Punta Gorda, Florida was sold at auction.  The winning bidder paid the fees and went to closing, only to find out Select Portfolio Servicing, LP, the mortgage loan servicer behind the auction, wasn’t the proper party to be selling the foreclosed home.  The deal fell through.  Who discovered it?   The title company that was trying to close the deal!

The Obvious …

It looked like all the paperwork was there, except when it wasn’t.  And look who discovered it … the title company.  They weren’t going to insure the home because the seller didn’t have the authority to sell it, nor did the seller (SPS) have an interest in it.  How can a party with no interest in foreclosed property sell it?   Which brings me to another point.  Since this foreclosure auction was in Florida, which is a judicial state … in order to get to the point where it went to auction, a final judgment of foreclosure had to be obtained from the circuit court, which it was. This means that someone had to lie to the judge to get the final judgment in the first place!  Did the attorney(s) who made the misrepresentations in court, both in the pleadings and in oral arguments, get sanctioned or punished?  Hell, no!  Why?  Because the Borrowers (who were from Michigan; Florida has a lot of “snowbirds” that own property there that don’t bother to check condition of title when they purchase Florida property) didn’t bring it up … and …

The Not-So-Obvious …

Because Florida judges only care about the bonuses they get from the State Legislature for kicking people to the curb any way they can!  Generally, that’s done through some overlooked procedural process … or in cases where the Borrowers show up in court, the judge then ambushes the Borrowers (and their attorneys) by asking, “When’s the last time you made a mortgage payment?”  or in the alternative … “Are you in default?”  (as if you know the legal meaning of default).  You blindly answer because of intimidation.

The Obvious …

Instead of objecting to the judge’s question by fundamentally answering that the servicer may have been making the payments for you all along, there is no firm proof of when the last payment was made on the account; and there’s no real proof that anyone is in default, except maybe the servicer, for failing to make the payments as part of their contractual obligation to the lender.  No one ever goes there, especially when there’s a REMIC trust involved.  What the judge is doing is trying to justify the foreclosure by side-stepping your due process rights to discovery.  When you let him/her do that, they get a bonus … AND … you get kicked to the curb!

The Not-So-Obvious … 

The banks already know and assume, because it’s a numbers game, that homeowners don’t have the money to fight and that 95% of them will run if given the opportunity, instead of fighting for what’s theirs.  The banks may be aware that the servicer is the real party retaining the foreclosing attorney or law firm, but they simply look at the complaint caption and take what’s written in the pleadings as the gospel truth, when it is far from it.  This is why it’s disadvantageous to live in a deed of trust (non-judicial) state than in a judicial (mortgage) state, where you get your day in court … because all foreclosures are deemed to be legal until otherwise challenged.

The obvious … 

If and when you find yourself with more month at the end of the money and the mortgage payment is going to be late or short in dollar amount, it is certain your account will be red-flagged after the 10th of the following month when the mortgage payment isn’t received.  As per the patterns discovered in the OSCEOLA COUNTY FORENSIC EXAMINATION, it is also highly likely that the mortgage loan servicer will direct its employees to manufacture a phony assignment, using MERS to cover up the chain of title, to convey your property (along with the note, which MERS cannot do since it admittedly doesn’t have an interest in the note) into a REMIC trust.  This will happen within the 90-day period of you not making timely mortgage payments.  This is all done because the servicer wants your home because it’s going to get reimbursed for all of those payments (principal and interest) it made for you!

The Not-So-Obvious … 

What the servicer doesn’t tell you is that when it starts sending you loan modification paperwork, the foreclosure paperwork shuffle affecting your home is already in progress.  It is at this point in time that borrowers are distracted by distress and frustration, all by design planning on the part of the servicer.  This is why there are so many complaints against mortgage loan servicers these days.

The Obvious … 

You have a limited amount of time to prepare … either to run or to fight the good fight.  Your research should include talking to at least two different foreclosure defense attorneys.  Within 90 days to six months, you can expect to get a notice that the proceedings just got traction and are moving forward.  I can guarantee you 100% that if you do nothing, you lose your home.

The Not-So-Obvious … 

Mortgage loan servicers really hate discovery.  They have limited information in the Borrowers’ Collateral Loan Files.  Most Borrowers take the path of least resistance, which is what the servicers are counting on, and send them a Qualified Written Request under RESPA § 6, expecting to get a document dump of everything in their file, which is NOT what the servicer wants to see or hear.  Borrowers seem to forget that a QWR is not real discovery.  Servicers side-step all sorts of issues in answering QWR’s outside of a court case.

The Obvious … 

The chain of title has evidence which you can readily obtain in certified form, especially the assignments!  The devil is in the details and that is exactly where you’ll find your false and misrepresentative statements!   The Borrower should seek out counsel that is versed in discovery in order to craft questions and statements that are likely to have to set the stage for a Motion to Compel to get the servicer to answer them.  No discovery = No truth!

And the truth shall set you free!

 

3 Comments

Filed under OP-ED