Hawaii Homeowners Win Wrongful Foreclosure Lawsuit

 

Attorney Gary Dubin Does it Again In Hawaii: Persistence Pays

Neil Garfield
Oct 28

Gary Dubin is one of the few lawyers with more life and legal experience than I have. While I have won most of my trial cases, Dubin has been consistently winning both trial and appellate cases, especially concerning false claims of foreclosure.

Here is another one that displays his talent for narrowing the legal issues to something that a homeowner can actually win.

see CAAP-18-0000326sdo Aurora v. Kalanui CAAP-18-0000326sdo

I’m unsure if he entirely agrees with my description of why the actors in foreclosure scams resorted to fake documents and unsupported claims. And truth be told, he probably does not care. He is merely following the tradition — when defending, question everything, admit nothing and make the claimant prove their case. Once he has prevented the opposition from proving their case, his job is over. The homeowner wins.

One of the oddities here is that this was an ejectment action claimed by Aurora Loan Services, a company that no longer existed but whose name was acquired by various people who wanted to use it as a business name or, as we call it in the legal profession, a fictitious name.

The original Aurora went bust along with its “parent,” Lehman Brothers. Neither one of them owned any obligations, debts, notes, or mortgages. And neither one had been representing a creditor who did own those basic elements for any claim to administer, collect, or enforce an allegedly unpaid loan account.
But the use of the Aurora name is useful to create the false impression that it is an old company that is merely continuing its role as a creditor, servicer, or both.

The homeowners contended that Aurora had failed to establish that it had an unimpeachable title, which for the above reasons, is an understatement. And the homeowners were right. The Hawaii land court’s seal was required for that; Aurora (a) did not have that and (b) could not produce foundation evidence that it had any right to receive it.

The homeowners also contended that Aurora (actually the foreclosure mill lawyers) “failed to show that, in exercising, [its] alleged right to nonjudicial foreclosure under a power of sale, [it] exercised this alleged right in a manner that is fair, reasonably diligent, and in good faith…” This provision may surprise many lawyers and homeowners, but it is incorporated into the statutory scheme of every U.S. jurisdiction and rarely used.

And lastly, at least on appeal, the homeowners contended that Aurora “has not adequately addressed the issue that the subject mortgage was assigned to [Aurora] through fraudulent action.” This is obviously a tough one because all foreclosure actions are predicated on fraud unless the unpaid loan account actually exists as paid for by the owner on whose books and records the loan account is maintained. Homeowners who can’t believe there is no unpaid loan account often waive this fatal defect — thus producing their own doom.

This is where Dubin’s superior talent in advocacy came to the fore: He convinced the court that there was an extra duty of care when nonjudicial foreclosure is employed as the vehicle for forcing the sale of homestead property.

The court held that
To establish it had title to the Property, Aurora also submitted a copy of the Quitclaim Deed. The Quitclaim Deed resulted from a nonjudicial foreclosure. Thus, Aurora had to show that the foreclosure sale “was fairly conducted and resulted in an adequate price under the circumstances.” Omiya, 142 Hawai#i at 457 n.37, 420 P.3d at 388 n.37 (quoting Hungate v. L. Off. of David B. Rosen, 139 Hawai#i 394, 409, 391 P.3d 1, 16 (2017) (citing Kondaur, 136 Hawai#i at 240-42, 361 P.3d at 467- 69)).

I would remind the reader who is old enough o remember that this duty has always existed. Dubin convinced the Hawaii court of appeals to bring it back.

I should add that Frederick J. Arensmeyer and Matthew K. Yoshida were also the attorneys on appeal.
And I will add my own unasked opinion that the sole reason that Dubin was targeted for disbarment was not for something he did but rather for something he didn’t do — namely, lose foreclosure defense cases. His success in defending foreclosures painted a big red target on his back.

The influence of investment banks permeates almost every facet of government. They got away with the “Big Lie” or “Big Steal” in which they procured the signature of homeowners on false pretenses. By concealing the true nature of the deal, they convinced homeowners — and the rest of the world — that the transactions were loans.

But they were, in fact, in the business of selling securities, derivatives, and hedge contracts, the proceeds of which far exceeded the amount of any transaction with the homeowner. The money they reportedly gave to, or paid on behalf of the homeowner, did not cost any of the actors in the lending marketplace one cent.
As soon as the documents were signed, all the actors were paid outlandish sums of money for selling the deal. Nobody lost money after that, regardless of whether or not the homeowner made scheduled payments on a nonexistent loan account. If the homeowner paid, it was pure profit. If the foreclosure succeeded, it would be pure profit for everyone.

The homeowner was dealing with people who had no stake in the success of the alleged promise to repay the incentive money used at “closing.”

The homeowner was assuming risks far above those normally encountered in a loan transaction and was left with no creditor or an authorized servicer acting on behalf of a creditor, lender, or successor lender.
The entire success of this scheme is based on the ability to convince homeowners that they really owe the money back. But that money was an incentive payment for launching the largest securities scheme in economic history.

Suppose homeowners had known they would have no lender or servicer and that the opposing actors had a vested interest in collecting illicit gains from foreclosure. What do you think they would have done when asked to sign the papers?

 

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:

  1. WAIVERS

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
  • Motions
  • Answers
  • Interrogatories
  • Depositions
  • Case Management for Local Civil Rules of Procedures
  • Training and Support

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