Tag Archives: FDCPA

FDCPA CAN STILL APPLY TO NON-JUDICIAL FORECLOSURES!

(OP-ED) — The author of this post is the author of The FDCPA, Debt Collection and Foreclosures … and posits the following for educational purposes and for your consideration in the paradigm shift that has now become the focus of thousands of consumers.

I’ve noticed an uptick in the number of pro-bank/pro-debt collector law firm postings regarding the U.S. Supreme Court’s latest narrow ruling in the Obduskey case (out of the 10th Circuit Court of Appeals).  I love how these folks like to “pat themselves on the back” for their observations that non-judicial foreclosure proceedings can still be business as usual, despite the caveats their posts now contain.  Why on earth would they post “caveats” to the debt collection industry (which includes law firms like the one Dennis Obduskey filed an FDCPA action against) if they were so sure of themselves in being able to just walk all over borrowers they claim are in default?

Despite the fact the nation’s highest court resolved the federal circuit split on whether non-judicial foreclosures can continue as “business as usual”, the ruling was “narrow in scope” regarding the enforcement of security interests as defined under 15 USC § 1692f(6), which is what the Court focused on in its decision: Obduskey v McCarthy & Holthus LLP, 586 U.S. ___ (2019)

What Congress intended … 

Creditors used to love the idea that they could open up a can of “whoop ass” on debtors any time they felt like it, even late-night, repetitive or threatening phone calls (“I know where you live” and “your mommy’s going to jail” and “we’re going to sue you if you don’t pay” or “we’re going to bomb your office building if you don’t come down here and pay this bill” or “you !@)#(%^!”.)  The caveats I’m seeing in these law blog posts still make reference to the fact that the latest FDCPA-related ruling DOESN’T mean “business as usual”.  It simply means that debt collectors trying to enforce deeds of trusts have to be extra careful NOT to step over that well-defined line of intended “abuses” that do in fact, fall under the FDCPA!

Enforcing a recorded security interest (deed of trust, security deed, HELOC, etc.) in a non-judicial state means just that.  If a third party (the trustee, NOT MERS) intends on using the terms of the security instrument to act as the third party in taking back collateral, the collection activity has to specifically and purely involve that process.  The narrow ruling still prohibits abusive debt collection practices, whether or not a non-judicial foreclosure is still the intended outcome.  The abusive debt collection practices fall under 15 USC 1692d and 15 USC 1692e, as well as portions of 15 USC 1692f (1) through (5) and (6)(B)(C) and (7) and (8).  See here for clarification: FAIR DEBT COLLECTION PRACTICES ACT 09-1996

If you have a case … you have a case … 

Every time the debt collection industry scores a narrow victory, they pontificate their accomplishments as soon as humanly possible, almost to the point of bragging rights (see, I told you so … lemme rub your nose in it) kind of stuff.  This is typical of the legal profession, especially the kind that can operate unchecked when it comes to carrying out enforcement actions.

One of the more remarkable things I find is that all non-judicial foreclosures are assumed to be legal unless otherwise challenged.  One of the things I put forward in the book (mentioned above) is that careful analysis of the debt collection laws needs to be strictly adhered to (the letter of the law), which you are attempting to assert was violated.

How the “chain of title” points to potential suspect violations of 15 USC 1692e(5) … 

Here’s where the latest ammo we’ve been sharing on the C&E comes into play.  Cancellation and expungement (C&E) actions are used to disable and destroy the authority these debt collectors rely on to even enforce a security instrument.  Under “False or misleading representations” (§ 807 of the FDCPA), section 5 prohibits false, deceptive or misleading representation in threatening “to take any action that cannot legally be taken” … which would mean to me that if you could strip away the lies contained within the assignments that generally precede the initiation of a non-judicial foreclosure action through a C&E, the authority of the debt collector would be void and the debt collector’s representations would then be false and misleading, which IS a violation of the FDCPA!

Champagne budget … Beer Belly Pocketbook! 

A C&E action is definitely a cheaper way to wage war on an unsuspecting servicer (who is really behind the scenes of the debt collection/non-judicial enforcement proceeding), stripping away whatever rights it thinks it has to steal your house on behalf of party or parties unknown (which could be Fannie Mae or Freddie Mac, lest we hold the GSEs unaccountable in the end) than waging an all-out FDCPA battle in federal court, which costs substantially more money.  Try to keep the emotions in check for the moment while I finish.

The document the servicers are creating is the assignment of deed of trust (much like the assignment of mortgage), which they claim gives them the authority (on behalf of the alleged “lender”) to appoint a substitute trustee to initiate a non-judicial foreclosure.  Do you have a contract with the mortgage loan servicer?   (Didn’t think so.)  However, servicers have Limited Powers of Attorney, which they claim give them the authority to do whatever they want, including wading into the shark-infested waters of violations created under the FDCPA.  Strip away their authority under the assignment as void … they’re like “chum in the water”.

This is why I’m releasing a two-day training video DVD set with the latest book by attorney Al West and myself, The C&E on Steroids! in very short order.  What better a way to deal with America’s tainted real property records than to fight the good fight head-on in state court, rather than wage a flimsy, unsupported war in federal court without first demonstrating the ultra vires behavior of the trustee thanks to a phony assignment, which you’ve knocked out FIRST in a C&E action!

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AN EXAMPLE OF HOW A C & E FITS INTO THE SYSTEM OF THINGS!

(NOT-SO-BREAKING-NEWS — OP-ED) — The poster of this blog is NOT an attorney; however, he works with attorneys to achieve positive results in creating potential legal scenarios that could stop foreclosures dead in their tracks! 

There are times when the legal system “pats itself on the back” and times when it pauses to reflect on past issues.  The party discussed in this case happens to be one Jorge Porter, a gentleman I was introduced to long ago by the late Coral Gables, Florida foreclosure defense attorney John Herrera, who sadly passed away long before his time.   It never ceases to amaze me that “the system of things” that runs the legal profession and the manner in which case law is established and made available to the public comes at a time when it’s convenient for the banking industry and not for consumers.

Such is the case here, where it’s taken several months for a Third DCA Florida case to reveal itself:

CitiMortgage, Inc v Jorge Porter et al, 3D17-2469 (Dec 19, 2018)

Bogus documents?  You bet!  Suspect criminal behavior?  You bet.  The Appellate Court even used the term “criminal” in its ruling!   There are some great Florida cases cited in this ruling, which reflect on past cases where fraudulent documents were introduced into the case, relied upon, to the detriment of the parties bringing these suspect documents into court!

Then surprisingly, months later, the legal profession decided to approach this subject matter, with a blog posting:

Lexology Article on Porter Case (Mar 21, 2019)

When one reads the court’s order … and then reads the Lexology post, it pins the misbehavior directly on the borrower, Jorge Porter!  This also goes to show you that “two wrongs don’t make a right”!  Filing administrative crap in the land records like Deeds of Reconveyance, Substitutions of Trustee, Satisfactions of Mortgage, Land Patents, U.C.C.-1 Financing Statements and the like is NOT the way to solve your problems if you’re facing foreclosure or even default.  Because the Florida Third DCA pointed it out, the appellates did it for a reason.  You cannot file bogus crap in the land records to defeat a lien interest yourself!  We have a process to legally deal with the system of things when bogus documents are suspect.

It’s called a cancellation and expungement action (C & E)!

We wrote a book about it (see below).  No one else has done this because no one has really come up with any viable solution to challenge these documents even though state statutes allow for it.  Not only that, we’ve figured out a way to “make it personal”, which means we’ve figured out a way to by-pass the Fair Debt Collection Practices Act and go after the lawyers, document mills, notaries and title companies who caused this bogus crap to be recorded in the land records in the first place!  All one has to do is go searching in the land records for assignments and I will prove my point 9 times out of 10!   You see, the recent Obduskey decision by the United States Supreme Court doesn’t address ethical violations committed by attorneys for the banks when they rely on bogus, criminally-conspired-and-drafted, fraudulently-recorded documents!  The Obduskey case also does NOT protect the robosigners and notaries whose names appear on these fraudulent documents!

Thus, California attorney Al West and I put together an intensive, two-day class to educate you as to HOW a C & E action is created, researched, analyzed, drafted, filed and executed on!

I’ve blogged about it before, but this case just got under my craw (Jorge Porter should have known better) and I had to share it because when “something is rotten in Denmark” and there are 500-million-plus suspect bogus documents in the land records THAT ARE STILL THERE and STILL CONTINUE TO BE THERE, even AFTER the foreclosure has taken place (some are actually recorded AFTER the foreclosure has taken place … by the very banks doing the foreclosing) … don’t you think you owe it to yourself to research what the “mongoose is to the snake”?

DETAILS ON THE WORKSHOP:

The host hotel has extended the registration deadline until

Friday, March 29th

for those of you wishing to reserve a sleeping room for the event.

The downloadable forms you need to attend are right here:

 LAS VEGAS FORECLOSURE DEFENSE WORKSHOP INFORMATION

Simply book your sleeping room for this event by clicking on this link:

 http://group.doubletree.com/ForeclosureDefense

We got a really great room rate and FREE breakfast buffet!

FREE airport shuttle service to and from Las Vegas McCarran Airport (LAS)!

Seating is limited! (and we mean “limited”)

We have millionaire investors … attorneys … homeowners in litigation …

trusts and LLCs in litigation … real estate agents and brokers … paralegals …

ALL REGISTERED TO ATTEND!

The best part is … DIRTY DOCUMENTS apply to all their cases!

You can pay for your attendance fees by visiting THIS LINK!

Once you’ve paid your attendance fee, click here:

FDW REGISTRATION FORM_LAS VEGAS_2019

to download your Registration Form!

Fill it out, scan it and email it HERE!

Make sure you pay attention to all pull-down menus and

related cart processing information!

We have a secure website and we do not store cardholder information!

Everyone attending gets handouts and a copy of the brand new book:

You don’t have much time though.  

The date of this workshop is fast approaching! 

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FDCPA CHALLENGED IN NON-JUDICIAL FORECLOSURES: U.S. SUPREME COURT TESTIMONY

(BREAKING NEWS) —

Here’s a rare treat … oral transcripts from Dennis Obduskey v. McCarthy & Holthus, LLP:

obduskey v mccarthy & holthus llp, scotus no 17-1307_oral transcripts of supreme court proceedings

(OP-ED) —

We’ve been waiting on the arguments here, because how the FDCPA is interpreted when it comes to foreclosures in non-judicial (Deed of Trust) states is at issue and has been in conflict among the federal circuits as to whether the enforcement of a security instrument (the actual deed of trust) constitutes the “collection of a debt”.  The 10th U.S. Circuit Court of Appeals (where the case originated) says enforcement of a security instrument is not a violation of the Fair Debt Collection Practices Act because it does not constitute debt collection.

Part of the problem here, is that it is and it isn’t (enforcement of a collection of debt) but an enforcement by the Trustee to sell property which is collateral for a debt (the note).  McCarthy & Holthus LLP is a known law firm that is part of a nationwide network that foreclosures on property wherein the borrower is claimed to be in default because of non-payment on the actual obligation (the Note).

Other courts have narrowly interpreted the matter in both ways.  This is where the conflict has occurred and this is why SCOTUS is hearing the matter.  If the Trustee is only attempting to satisfy the Lender’s need to recover the collateral that was pledged and does nothing more than use the contractual obligation of publication and sale to satisfy the terms of the security instrument (deed of trust) … that’s one thing.  The second the Trustee steps over the line and retains a law firm to enforce the terms of the security instrument and demand “payment” of a “sum certain”, THEN the attempt to collect a debt IS IN FACT, where misrepresentations occur, which would constitute a violation of the FDCPA!  My non-lawyer wisdom tells me to let YOU be the judge here!

If the law firm has all of its ducks in a row, that’s one thing.  But in this case, the argument tends to indicate it didn’t, which is why Dennis Obduskey filed suit.   This case represents one of the biggest challenges to non-judicial foreclosures in the United States; thus, this is worth the read if you are contemplating such an action.  Enjoy!

P.S.: The same amount of federal and state conflict has occurred with the MERS® System and the way the courts have treated it.  Why SCOTUS won’t hear those relative arguments may change.  For now, that issue is at a standstill.

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THE MINDSET OF SOME FEDERAL JUDGES IS DISCONCERTING …

(OP-ED) — 

It scares me when I have spent hours upon hours doing research into the behaviors of the American federal judicial system and after fully digesting the U. S. Supreme Court cases of 07-1015_Ashcroft v Iqbal and 05-1126_Bell Atlantic Corp v Twombly et al … I find it a bit disconcerting when I talk to attorneys about their experiences in federal court and they tell me that suicide would be a better alternative.

From recent white papers I’ve read on the subject, legal scholars have pegged the federal judiciary as nothing more than glorified “case managers” … and the most recent article posted by the American Bar Association confirms my suspicions when I read that judges now want to eliminate discovery in cases involving less than $500,000!  The average homeowner’s residence in this country is less than that sum, so what does that say for your due process rights in courts of limited jurisdiction, which the federal courts are?

If this was not a significant assertion, made by a 3rd U.S. Circuit Court of Appeals judge at a Federalist Society panel last month, I would have dismissed the white papers I read as speculation backed by demonstrative case law.

(Hon. Thomas Hardiman)

This judge received applause for his remark to the panel when he said, “If I were to do something unilaterally, I would probably institute a new federal rule that said all cases worth less than $500,000 would be tried without any discovery.”   Another 6th Circuit judge, Hon. Amul Thapar, another judge said to be on President Trump’s short nominee list to the Supreme Court, said that clients and their lawyers would both be happier if they could get to trial more quickly, to which Hardiman added that because vanishing jury trials in federal courts are more common, judges have put increasing reliance on alternative dispute resolution, stating, “How many clients win, and the judgment they earned was less than the fees they paid their lawyer?  That’s a Pyrrhic victory.”

What then does that say for the idea that banks are so willing to remove foreclosure cases to federal court because they already are aware of the outcome (a 12(b)(6) dismissal)?   Yet, homeowners are so eager to file cases in federal courts using federal questions and statutory violations like TILA and RESPA, when the actual damage suffered has yet to be determined.

Other judges attending the panel discussion also noted that federal rules already require that discovery be “proportional to the needs of the case”. Others stated that “discovery is a key element of our current adversarial system, often leading to obtaining evidence of legal violations via admissions in sworn testimony, smoking-gun documents or memos that demonstrate wrongdoing.”

While the federal system has apparently recognized abuse in the discovery process, their roles as case managers appears to be expanding so they can rid their dockets of garbage lawsuits, citing one means of doing so is by implementing a civil Brady Rule, which basically promotes the idea that in civil litigation, the parties would have an affirmative obligation to turn over discovery, even if it’s harmful to them!  Under the status quo, such damning evidence might get buried under a pile of evidence like “a needle in a haystack”.

This would imply (at least to me in my non-lawyer mindset) that I’m not going to get a fair shake in any federal court anywhere in the United States of America because everyone’s simply looking to find ways to chuck my hard work … case in – case out … by applying case management standards, mediation and when necessary, applying the “big stick” of sanctions if I insist on my due process rights to discovery.

It’s no wonder the banks play their crooked games in state court.  They know they’ve got a “back door” if the homeowner responds with removal to federal court or comes forward in the state court action with something that could hang the banksters and their lawyers out to dry. When threatened, the bank’s lawyers remove the case to federal court, because most cases involve an out-of-state lender and/or servicer and an amount necessary to sustain diversity jurisdiction ($75,000).  This is why class actions are starting to be frowned upon at the federal level.  Boutique law firms can get rich off the backs of our dilemmas!  Examine the number of FCRA and FDCPA actions being filed singularly versus class action and you’ll see what I mean as to the treatment they get.  And these are statutory violations that mandate federal district level filings!

Lazy man’s way out, I say!

If no one wants to get to the truth, why do we keep supporting this federal justice system by electing folks who nominate and vote them into permanent judicial status, giving them loads of inherent power, when you can’t get a fair shake?   What a waste of tax dollars!

It’s a Catch 22 of “feeding the monster” that at a point in time will devour us! This is why I advocate keeping your cases on the “local level” and letting “the system of things” do what it’s supposed to do.

 

 

 

 

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THIRD U.S. CIRCUIT ISSUES PRECEDENTIAL RULING IN FDCPA CASE AGAINST MCM … REVERSED AND REMANDED!

BREAKING NEWS — OP-ED — 

This ruling just out of the United States Third Circuit Court of Appeals:

CLASS ACTION SUIT REVERSED AND REMANDED FOR FURTHER PROCEEDINGS! 

Schultz v Midland Credit Mgmt Inc et al, 3rd App Cir No 17-2244 (Sep 24, 2018)_Precedential

Midland Credit Management sent Robert and Donna Schulz separate dunning letters which misstated the rights of the debt collector in reporting a forgiveness of debt as required by IRS regulations, which only applies if the debt is over $600.

The FDCPA (Fair Debt Collection Practices Act) specifically prohibits a debt collector from using “false, deceptive or misleading representation in connection with the collection of any debt.” 15 U.S.C. § 1692e

The District Court had jurisdiction, but as many U.S. District Court judges do, they favor debt collectors and not debtors and often rule against the debtors, misinterpreting the law or in the alternative, the intent of the law.

The 14-page ruling is an educational tool for both litigants and their lawyers.  Understand that MCM knew or should have known better.

This is also a clear and classic example of a STATUTORY VIOLATION as described in the 10-part series GUTTING THE UNDERBELLY OF THE BEAST!

Also, read the footnote on Page 8, where “multiple discharges of indebtedness of less than $600 are not required to be aggregated.” 26 C.F.R. §1.6050P-1(a)(2).  That means that the debt collector can’t total up all of the separate debts (even if they add up to more than $600) and use language in their communication to the debtor which violated the foregoing statute or code. Debt collection, as imparted and regulated by the FDCPA, sets specific standards for what constitutes a violation of statute.  Understand that the FDCPA provides a remedy, at law.  The federal court has jurisdiction because the law is a federal law.  There are state debt collection laws that could have been cited in the federal case along with the FDCPA and the Court would have had to apply the applicable State Laws to the case as they were intended by the legislature to be followed.  When this doesn’t happen at the state level, we have appellate courts to do our bidding.  Just because the judge misinterpreted the law doesn’t mean he should be taken off the bench.

The system of things only applies to his removal if he does something morally or ethically egregious that cannot be resolved by anything other than attacking his bond for provable damages.

I don’t care if he’s a senior judge, like a lot of them are on the federal bench.  Also take to heart that the attorneys litigating FDCPA claims these days like to do class actions because there’s more in it for them in attorney’s fees.

However, also note that the special witness in the class action (the Schultz’s) could get up to $25,000 for their testimony in leading the class action.  Think about that in part when you apply “the system of things” to statutory violations!

Stay tuned for PART 10 of GUTTING THE UNDERBELLY OF THE BEAST!   It’s sure to be a doozey!

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