FORECLOSURE MILL BUTLER & HOSCH SHUTS DOWN

May 18, 2015

Butler & Hosch, which was (according to the press) one of the largest foreclosure mills in the country, has shut down and has filed an Assignment for the benefit of creditors. The Firm was based in Orlando, Florida and had offices in numerous states and was prosecuting approximately 60,000 foreclosure cases, having admittedly picked up “many files from the defunct Law Offices of David J. Stern”.

The press has stated that its 700 employees were “stunned” at the news, which was apparently delivered at 5:00 p.m. last Thursday in a conference call with an attorney from another large law Firm which handles foreclosures in Florida.

Thus, those 60,000 cases will be in limbo until the former clients of B&H retain another law Firm, which may be difficult as many of the files are most likely infected with David Stern problems (e.g. fraudulently manufactured documents, bogus assignments, backdated notaries, fraudulent claims, etc.).

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

HOW “BANK” LAWYERS HAVE PERVERTED THE CASE LAW

May 11, 2015

As our readers know, whenever a homeowner seeks to challenge an assignment of mortgage (or deed of trust), “bank” attorneys chant the mantra “the borrower has no standing to challenge an assignment as he is not a party to it”, allegedly relying on the body of case law which stemmed from the decision of the US Court of Appeals for the 6th Circuit in Livonia Properties Holdings, LLC v. 12840-12976 Farmington Road Holdings, LLC, 399 F. App’x 97 (6th Cir. 2010). ¬†Unfortunately, many courts across the US jumped on the bandwagon, apparently having never actually read the full opinion or the 6th Circuit’s more recent decision in Slorp v. Lerner et al., No. 13-3402 (6th Cir. September 29, 2014), which clarified the erroneous application of Livonia Properties (with citation to several post-Livonia Properties decisions) and which the 6th Circuit itself stated (as to the Livonia Properties case)¬†“has confounded some courts and litigants”.

In partially reversing the trial court, the 6th Circuit held the following:

The sweeping rule that the district court extrapolated from Livonia Properties dwarfs our actual holding in that case. The district court in Livonia Properties stated that an individual “who is not a party to an assignment lacks standing to challenge that assignment”, and our Livonia Properties opinion quoted and endorsed that general statement, perhaps inartfully. But we quickly limited the scope of that rule, clarifying that a non-party homeowner may challenge the validity of an assignment to establish the assignee’s lack of title, among other defects. See also Carmack v. Bank of N.Y. Mellon, 534 F. App’x 508-511-12 (6th Cir. 2013)(“Livonia’s statement on standing should not be read broadly to preclude all borrowers from challenging the validity of mortgage assignments under Michigan law.”) Thus, a non-party homeowner may challenge a putative assignment’s validity on the basis that it was not effective to pass legal title to the putative assignee. See Conlin v. Mortg. Elec. Registration Sys., 714 F.3d 355,361 (6th Cir. 2013); …see also Woods v. Wells Fargo Bank, N.A., 733 F.3d 349, 353-354 (1st Cir. 2013)(“the debtor may also question a plaintiff’s lack of title or right to sue”). (emphasis added)

The Slorp opinion went on to distinguish the facts in Livonia Properties to clarify that the homeowner lacked “standing” to assert that the assignment was not properly recorded or suffered from some technical defects that prevented the assignee from establishing chain of title, but that in the Slorp case, the homeowner alleged that Bank of America, the putative assignee, held neither the mortgage nor the note when it filed the foreclosure action because the parties lacked the authority to assign his mortgage to Bank of America. The court stated: “That distinction makes all the difference”.

However, “bank” attorneys have consistently taken the position that the rejected “sweeping” rule applies. Without a proper argument from the homeowner to highlight the error, courts across the US have gone along with this erroneous non-principle of law. In fact, we just reviewed a decision from a state supreme court which was recently issued (and issued well after Slorp) which still clung to the erroneous “Livonia Properties” rule, without even mentioning the later cases which clarified the error.

In a second example, a District Court of Appeal in Florida previously issued the same type of “sweeping” rule stating that a borrower has no standing to challenge noncompliance with the PSA, grounded on the same argument (that the borrower is not a party to the PSA contract). Although the opinion deals ONLY with PSAs, “bank” attorneys have taken the position that this “rule” applies to prospectuses, SEC 15D filings, SEC interim reports, and all manner of documents relating to securitization trusts. Thus, once again, the “bank” attorneys have perverted the actual holding of case law, and without proper opposition, the courts are again “drinking the Kool-Aid”.

Granted, many courts do not have full-time law clerks to really dig into the arguments made by the “banks” and servicers, but there should be at least a minimal inquiry. A simple WestLaw search on Livonia Properties would have revealed the subsequent decisions which clarified and limited it. The fact that this is apparently not being done is a sad commentary on the system, and leads the public to question the integrity of and distrust the judicial system.

Jeff Barnes, Esq.

MASSIVE FORECLOSURE FRAUD ON PART OF DAVID J. STERN MAY BECOME SUBJECT OF ACTIONS TO VACATE TENS OF THOUSANDS OF FORECLOSURES

May 7, 2015

Jeff Barnes, Esq. has been approached by several homeowners who were the victims of fraudulent foreclosure actions filed by the Law Offices of David J. Stern to institute litigation to vacate the foreclosures based on evidence from numerous sources including official investigations against the Stern law Firm. Mr. Barnes has been presented with depositions and other documentary evidence demonstrating the massive pattern of corporate fraud engaged in by the Stern law Firm acting as agent for numerous “banks” and servicers, who knew or should have known of the fraud but did nothing about it other than to cause it to continue.

Mr. Barnes has been requested to file an action naming the Stern law Firm, its employees who manufactured the fraudulent documents and foreclosure foreclosure papers, and the banks and servicers who used the Stern law Firm to perpetrate the fraudulent foreclosures which numbered in the tens of thousands.

Florida law provides that a judgment can be opened or vacated if it was obtained by fraud, or if it is void, and also has a “crime/fraud” exception to the attorney/client privilege which does not protect communications between a party and its attorney if those communications were made in furtherance of the perpetration of or for the purpose of committing a crime or fraud even if the crime or fraud is not consummated. Fla.Stat. sec. 90.502 as explained in First Union National Bank v. Turney, 824 So.2d 172 (Fla. 1st DCA 2001). Obviously the fraudulent Stern foreclosures were “completed”.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com