July 29, 2014

I have wanted to comment on this for some time, but let it go thinking that maybe the situation would change. It has somewhat, but not to the extent that one might think in view of the emerging law in foreclosure litigation.

For the past six years, I have all too often been asked this question by Judges across the US: “But, Mr. Barnes, your client did not pay the mortgage, right?” Of course, I then have to explain that we may deal with that issue if AND AFTER we get past the standing issue, which is the threshold issue which must be resolved before any claims of “defaults” or “amounts due” are approached. That is, “Your Honor, we first have to resolve whether these people on the other side even have the right to be here or request any relief.” It has been and continues to be a difficult hurdle. However, more and more Judges are getting it.

The problem is that, as one Judge told me years ago, “Mr. Barnes, I pay my mortgage and I do not know who owns it, so why should your client get away with not paying his?” My response is that maybe, Your Honor, you should question who owns your loan and whether or not you owe what the servicer claims you owe. You may be overpaying. The Judge offered to recuse himself and hire me to find out. Naturally, I declined for obvious reasons.

The law on standing is pretty clear in the 30+ states I have worked in since 2008. The problem is that the “we have the Note, therefore we win” mantra of the “bank” attorneys too often carries the day. We actually have two cases on appeal at this time where our expert (a former Wall Street national securitization manager for one of the largest investment banks and who actually put securitizations together and had the responsibility for making sure that the securitizations complied with Federal laws and regulations) testified, without any rebuttal or any cross-examination, that pursuant to public filings and documents from the involved parties that the foreclosing “bank” does not, did not, and could not own the loan. Notwithstanding that unrebutted evidence, the Judge signs the “form” boilerplate Final Judgment of Foreclosure anyway.

This results in more appeals being filed, thus causing an additional burden on the courts and expending of taxpayer dollars to show the appeals court that the trial Judge did not follow the evidence or the law. Even if the appeal does not result in a reversal, the time, expense, and labor involved drains the public coffers, all because the Judge did not follow the law in the first instance. For some reason, some Judges just cannot rule against a bank, and others never met a bank they didn’t like.

Those of you who have followed this website since 2008 know what a fight this has been. The fight is now progressing to the legislatures and the higher appellate courts. In California, for example, one division of an appeals court recently filed an opinion which essentially insulted the intelligence of the Judges who issued the Glaski opinion (which came from another division of the California appeals courts), with the rhetoric being mocking and demeaning. What will this lead to? You got it: more litigation, and thus more draining of taxpayer dollars.

Judges: don’t be afraid of the evidence. Don’t be afraid of the law. Don’t be afraid to rule against the banks. If the facts and the law do not support the bank’s claim, it is ok to rule against the bank. In fact, the 4th District Court of Appeal in Florida issued one decision where the Court essentially said to the trial court whose decision it reversed: in case you didn’t hear us the first time, we are telling you again, as we did before, that you are wrong, and thus the summary judgment is reversed because the bank did not satisfy its burden for the same reason as in the prior appeal on the same issue.

We need more appeals courts to adopt this stance of following the law, and more trial court Judges to follow those appellate rulings.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com