January 31, 2013

As most of you know, approximately 52 servicers and lenders, including GMAC Mortgage LLC, filed for Bankruptcy in mid-May of last year. As you may not know, however, GMAC obtained stay relief to pursue foreclosures, and recently, Warren Buffett’s Berkshire Hathaway bought the loans from the BK trustee lock, stock, and barrel “free and clear of liens” from the sellers. What that means is that, for all practical purposes, anyone with a foreclosure involving GMAC or any other the other 51 entities who sold their assets to Berkshire may find that Berkshire is the new foreclosure mill.

Not so fast, however. We have been advised that someone has been offered a significant principal reduction in connection with an unsolicited loan mod offer from MERS “for GMAC”. MERS in fact signed the proffered loan mod. Figure that: MERS, which does not extend credit, loan money, or collect money and is not a lender, is offering a loan mod on behalf of a bankrupt entity.

Separately, we are seeing more and more instances where courts are faced with a situation where there is no law on a given foreclosure issue out of that state’s appellate courts, leaving the trial courts with no guidance from law of that state. As anyone who has studied law knows, the law is dynamic and not static, and has to change and adapt with the times. In the world we live in, that means that there has to be someone willing to take an issue to the state appellate court which has no law on an issue in order to establish it, as we did in Oregon on the MERS issue, which we are also taking to the Montana Supreme Court this spring.

One of the facilitating vehicles in the law, which is common in each state, for making new law is case law which permits a state with no law on an issue to look to what is called the “law of other jurisdictions” for guidance: that is, for example, State A, which has no law on a given issue, can look to case law from States B, C, D, etc. which have case law on the issue to see how it has been analyzed. Ohio did this with New York decisions on foreclosure issues as early as 2008, and the trend has been followed ever since.

Attorneys for the banks like to take the position, when there is no state law on an issue in a state where a case is pending, that “Judge, there is no law on this in our state, so the homeowner’s request must be denied.” In reality, this is the perfect situation for showing the court that other states HAVE dealt with the issue, which can provide the Judge with guidance and so that he or she does not have to “re-invent the wheel.”

The problem, of course, is when the banks misinterpret or misconstrue what a case really says, like they have been doing nationally with the Livonia Properties case out of the U.S. District Court for the Eastern District of Michigan. Banks like to take the postion that the case stands for the proposition that a borrower cannot challenge an assignment. What the case actually says is that a borrower CAN challenge irregularities in the foreclosure process under Michigan’s non-judicial foreclosure statute including irregularities in the assignment process.

Per our prior posts, 2013 looks to be a year of “making law” in the foreclosure arena with the numerous appeals pending, and with more on the way. We will continue to advise of these decisions.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com


January 21, 2013

FDN attorney Jeff Barnes, Esq. has been recently admitted to the United States Court of Appeals for the 6th Circuit, adding to his prior admissions to the United States Courts of Appeals for the Third, Tenth, and Eleventh Circuits. Mr. Barnes has also been recently retained to handle six (6) appeals in six different jurisdictions, which appeals are in both Federal and state courts. The Firm has also been recently retained on new foreclosure filings in various states, including Indiana, Tennessee, Colorado, and Florida.

As those of you who follow this website are aware, the MERS issues were argued by Mr. Barnes in the Supreme Court of Oregon on January 8, 2013, as MERS appealed the decision of the Oregon Court of Appeals which ruled against MERS. Mr. Barnes will also be presenting the MERS issues to the Supreme Court on Montana next month in another case of first impression, as Montana has no state appellate law on the MERS issues (as Oregon did not until the Oregon Court of Appeals issued the Niday decision on July 18, 2012 which was argued by Mr. Barnes as well).

There are many states which have no state appellate law on many of the issues in foreclosure defense litigation, including the MERS issues and securitization related issues (compliance with PSA requirements, etc.). It has been and will continue to be part of the mission of FDN attorneys to make the law on these issues so that states have guidance from their state appellate courts.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com


January 10, 2013

It is now public knowledge that the Law Offices of Marshall C. Watson, P.A., a Florida foreclosure mill, has been ordered to be shut down and closed pursuant to a Consent Judgment with The Florida Bar, which also suspends the lead attorney for 91 days and found that an attorney in the Firm was paid $1.00 for each of the thousands of Affidavits “robo-signed” outside of the presence of a Notary and without that attorney having knowledge of what was being signed, which Affidavits were filed in courts. The Bar has stated that it is “the lowest point” in the foreclosure process.

Like the prior closure of the infamous Law Offices of David J. Stern, P.A. (which was formerly the most active Florida foreclosure mill which left over 100,000 foreclosure cases in limbo when the office shut down), the closing of Marshall Watson will leave tens of thousands of foreclosure cases without counsel and thus “up in the air” to be re-routed to other Firms, assuming they will accept them. With the legal infirmities in these files, no other Firm may want to take on a file from a Firm which has been found (and admitted) to have created fraudulent foreclosure documents. Many of the Stern cases still have not been re-assigned to this day despite that Firm having been out of business for over a year.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com