Challenging the Lawyers for the Foreclosure Mill
Based upon 16 years of research, an investigation by our company, an investigation by third-party forensic analysts, and an investigation by law enforcement and law markets (see 50 state settlement, for example), it is legally, factually, and axiomatically true that lawyers who initiate foreclosure actions are most likely doing so without the benefit of a client who has a legally recognizable interest in the outcome of the litigation or nonjudicial foreclosure.
The bar to suing those lawyers whose client is most likely another law firm who in turn has been hired by yet another law firm (none of whom have an interest in collecting money from the subject homeowner or the sale of the homeowner’s property), is something called litigation immunity which absolves the lawyer or at least protects the lawyer from all manner of misleading statements in court, whether in writing or orally.
But it need not end there. In my opinion, it is time for homeowners who are faced with false claims of securitization to file complaints or grievances with the governing bar association under certain circumstances.
Here is a direct quote from the report of disciplinary actions contained in the most recent issue of the Florida Bar Journal. A lawyer was disciplined for “repeated failures to respond to court orders in two pending matters and failure to comply with the court’s Rules of Practice and Procedure.”
This brings up an interesting point. As every pro se homeowner litigant knows and every lawyer representing homeowners knows, if timely and proper discovery demands are served on the lawyer presenting the foreclosure mill, there will be a response — consisting of objections and evasions, plus production of newly fabricated unsigned documents or documents containing the signature of people who either don’t exist or who don’t know that their signature was used on those documents. Even if they knew, they had no access to information that would support the truth of the matters asserted in those documents.
More often than not, homeowners either win the case or force a very favorable settlement by timely and properly enforcing their discovery demands by seeking and obtaining a court order compelling compliance with the Rules of the Court, the discovery demands, and the Court’s order.
In most such cases, the discovery demands are served but never enforced and thus become a nullity in the process of litigation.
But in many other cases, the lawyer for the foreclosure mill will refuse to comply with the court rules and court orders by filing repeated motions and memorandums about why compliance should not be required or ordered— even when it has already been ordered.
In nearly all such cases, the judges let them get away with it —even granting summary judgment to the opposing lawyer, who lacks a client with an interest in the disputed MONEY. Remember that foreclosure is about money. Suppose the parties or actors involved have no expectation or entitlement to receive any money. In that case, they have no business issuing a declaration of default, a notice of sale, or filing a lawsuit in foreclosure.
So that brings us to my point, which will most likely incur the wrath of most people in the legal profession. When it comes to the prosecution of foreclosure claims, the bar associations have universally assumed that such claims are valid and true without the benefit of a trial on the merits in which the proof of the matters asserted is ever presented. They are merely following suit on the requirements that the court follow the legal presumptions from facially valid documents.
So the bar associations are prosecuting claims against foreclosure defenders and never against lawyers who pretend to have a valid claim. In most cases, they are right in refusing to bring disciplinary proceedings against the lawyers representing foreclosure mills with other law firms as clients.
As long as the lawyer has some basis to believe that he has a client and the client has a claim, then he or she can name the plaintiff or beneficiary and proceed with the foreclosure action.
The exception comes went the lawyer manifests repeated failures to respond to court orders in pending matters and failure to comply with the court’s Rules of Practice and Procedure.
Violating a court order is not worthy of bar discipline. We all do it from time to time. And we are allowed to cure the violation. But if we don’t cure it and instead refuse to comply with the court order, thus violating the basic rules of civil procedure — along with the requirement of good faith — then there are grounds for the lawyer to be disciplined, and there are hundreds of cases in which lawyers have been disciplined for exactly that reason.
If more people were to file such complaints with the bar, the bar would be required to investigate those complaints. After finding that the lawyer never had a client other than another law firm (who also had no right, title, or interest in the alleged debt or underlying obligation), they would have multiple grounds to issue discipline — and, in my opinion, they would be required to do so.
If that happened, the foreclosure mill business plan would disintegrate since they would all risk losing their licenses. In turn, that would unravel the entire securitization scheme and foreclosure schemes precisely because there is no claimant plaintiff or beneficiary.
Without the umbrella of litigation immunity and tactical immunity conferred by bar associations, nobody would be authorized to imply or argue a nonexistent claim.
This ends the illegal practice of invoking foreclosure procedures in cases where this is no debt owed to any of the actors.
Stop Foreclosure, Sue for Breach of Contract
Now is the perfect time to stand up for your legal rights and sue for beach of contract, mortgage fraud, and foreclosure fraud because the legal tide is beginning to turn, and homeowners are starting to win! In 2016 the California Supreme Court ruled in Yvanova v. New Century Mortgage Corporation (Case No. S218973, Cal. Sup. Ct. February 18, 2016) that homeowners have legal standing to challenge an assignment of the mortgage loan contract in an action for wrongful foreclosure on the grounds that the assignment(s) is/are void. Obviously if the court had ruled differently, the banks would have had carte blanche to forge mortgage assignments with wild abandon. In fact, without a system of endorsements and assignments it would be impossible to determine who has a legitimate interest in the property!
In THE PAPER CHASE: SECURITIZATION, FORECLOSURE, AND THE UNCERTAINTY OF MORTGAGE TITLE ADAM J. LEVITIN writes "the mortgage foreclosure crisis raises legal questions as important as its economic impact. Questions that were straightforward and uncontroversial a generation ago today threaten the stability of a $13 trillion mortgage market: Who has standing to foreclose? If a foreclosure was done improperly, what is the effect? And what is the proper legal method for transferring mortgages? These questions implicate the clarity of title for property nationwide and pose a too- big-to-fail problem for the courts.
The legal confusion stems from the existence of competing systems for establishing title to mortgages and transferring those rights. Historically, mortgage title was established and transferred through the “public demonstration” regimes of UCC Article 3 and land recordation systems. This arrangement worked satisfactorily when mortgages were rarely transferred. Mortgage finance, however, shifted to securitization, which involves repeated bulk transfers of mortgages.
Like many other cases, current trial court decisions are getting reversed because the courts are waking up to the reality of the rule of law. What they have been following is an off the books rule of “anything but a free house.” However a recent Yale Law Review Article eviscerates the assumptions of a free house for the homeowners and destroys the myth that somehow that policy has saved the nation. You can read the Yale Law Review article “In Defense of “Free Houses” for more information on this tide change.
To facilitate securitization, deal architects developed alternative “contracting” regimes for mortgage title: UCC Article 9 and MERS, a private mortgage registry. These new regimes reduced the cost of securitization by dispensing with demonstrative formalities, but at the expense of reduced clarity of title, which raised the costs of mortgage enforcement. This trade-off benefited the securitization industry at the expense of securitization investors because it became apparent only subsequently with the rise in mortgage foreclosures. The harm, however, has not been limited to securitization investors. Clouded mortgage title has significant negative externalities on the economy as a whole.
If your loan contains fraud or it was securitized then your lender may have breached your mortgage loan contract, and therefore your mortgage loan contract could be legally challenged in a court of law. If your mortgage loan contract is declared legally void, then any assignments of the mortgage loan contract, or subsequent assignments, could also be declared legally void.
Securitization is the process of taking an asset and transforming them into a security. A typical example of securitization is a mortgage-backed security (MBS), which is a type of asset-backed security that is secured by a collection of mortgages. Keep in mind that it is perfectly legal for banks to create mortgage-backed securities (MBS's); however there are significant legal ramifications that will either harm you, or benefit you, depending on what actions you take in response to the fact that your mortgage or deed of trust is legally void resulting in your property, in reality, being unsecured, just like a unsecured credit card debt. What's in your wallet?
This is why we recommend that you take immediate action and sue for the remedy the law entitles you to, and that you deserve. Treble damages and clear and free title to your home. Not sure if your loan contains mortgage fraud or if it was securitized, no problem, we will do a free mortgage fraud analysis and free Bloomberg securitization search for you.
Many of the programs that had modest success in the early days have fallen into disfavor as banks have enacted strategies to counter their progress. The banks are not going to go down without a serious fight. They have a large arsenal of tools to use, and the legal muscle to keep the industry off balance. This is not a static game. The reason that banks have been successful, for the most part, in protecting the large number of mortgages that were securitized is that there is an intricate web of legal theories that they hide behind to justify what they have done. In effect, they have created a shell game where the ball seems to move around in defiance of the laws of physics.
The banks are relying on a complex interaction between UCC 3 commercial paper law, UCC 9 securitization law, bailment law, agency law and local laws of the jurisdiction where the property is located. They would have us believe that what they have been doing since the 1970’s is perfectly legitimate. Many lawyers who have challenged the banks have gotten close to exposing the scheme only to find that judges retreat away from the complexity of the legal theories involved and fall back on procedural barriers under the auspices of protecting the equitable interests of the banks and their agents.
FRAUD STOPPERS Foreclosure Defense Program has moved the bar forward in many substantial ways:
- Our Private Administrative process is a targeted approach to Informal Discovery:
- 3-501. PRESENTMENT or States equivalent
- Mortgage Error Resolution/Request for Information: If you believe there is an error on your mortgage loan statement or you’d like to request information related to your mortgage loan servicing, you must exercise certain rights under Federal law related to resolving errors and requesting information about your mortgage loan. If you think your credit report, bill or your mortgage loan account contains an error, or if you need more information about your mortgage loan, you send a written letter concerning your error and/or request.
- Cutting edge mortgage fraud examination and court ready lawsuits and trial ready evidence to win your case
- Nationwide foreclosure defense attorneys and Pro Se litigation education and support products and services
Subsection of Presentment (example Covenant 8 of UCC3 Note) shows NOTE and under paragraph 1 states: “BORROWER’S PROMISE TO PAY: In return for a loan that I have received, I promise to pay….
MULTI STATE FIXED RATE NOTE--Single Family--Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3200 1/01 (page 1 of 3 pages) Covenant:
I and any other person who has obligations under this Note waive the rights of Presentment and Notice of Dishonor. “Presentment” means the right to require the Note Holder to demand payment of amounts due. “Notice of Dishonor” means the right to require the Note Holder to give notice to other persons that amounts due have not been paid.
- 15 U.S. Code § 1692g - Validation of debts
Often a debt collector cannot validate a debt and therefore cannot legally enforce collections.
- Truth In Lending Act (TILA RESCISSION) codified in 12 CFR Part 226 (Regulation Z); particularly§ 226.34 Prohibited acts and §226.32 sub-paragraph (ii) et seq. predatory lending practices
A mortgage loan covered by the Truth in Lending Act may be rescinded by mailing a Rescission Letter to the purported lender, forcing the purported lender/creditor to oppose that rescission with a lawsuit within 20 days or lose all opposition rights.
- The primary focus of the legal aspect of our program revolves around taking the theories and best practices that have been most successful around the country and make refinements.
“Here, the specific defect alleged is that the attempted transfers were made after the closing date of the securitized trust holding the pooled mortgages and therefore the transfers were ineffective.
- Our program seeks to avoid getting mired in the complexity of the various areas of law involved, instead focusing on a simple, focused approach that makes it harder for judges to avoid the strength of our core arguments.
- The PMA trustees and executive team have a diverse set of skills and significant experience in the core areas that will improve the success factors for our operations.
We have spent an exhaustive amount of time analyzing all of the cases that have been successful in resolving mortgage securitization problems. We have designed our legal information litigation strategy to hit the banks hard and fast where they are most vulnerable.
Our primary focus is on getting clear and marketable title to the property by arguing that the actions of the banks have made the security provisions of the mortgage/deed of trust unenforceable.
Instead of fighting the foreclosure itself head-on, we argue that none of the banks or their agents has the right to enforce the foreclosure provisions of the Mortgage/Deed of Trust. In effect, if none of the banks have standing to enforce the foreclosure provision, we are entitled AS A MATTER OF LAW to a declaratory judgment of Breach of Contract (Security Agreement) that is res judicata, i.e., a permanent ban on foreclosure.
The Stand & Fight Program is a complete program that provides you with everything you need:
- Administrated Process
- Court Ready Chain of Title Investigation and Signed Affidavit
- Complaint along with all exhibits
- Legal Research
- Legal Briefs
- Case Management for Local Civil Rules of Procedures
- Training and Support