December 20, 2013

The United States District Court for the District of Rhode Island released its opinion last month in the matter of Cosajay v. Mortgage Electronic Registration Systems, Inc., 2013 WL 5912569 (D. Rhode Island, Nov. 5, 2013) which permits a homeowner to challenge a post-trust closing assignment in defending a foreclosure action. The Defendants’ “lack of standing because you are not a party to the assignment” argument was soundly rejected as an “absurd position” which would “unduly insulate assignments” and deprive homeowners of their legally protected right to have a foreclosure proceed legally and correctly.

The homeowner challenged a MERS assignment to a securitized mortgage loan trust which had occurred outside of the time specified by the securitized trust for such an assignment. The challenged MERS assignment was on March 12, 2008; however, the trust had closed on April 30, 2007, and thus no 2008 assignment was possible. The homeowner sought a declaration that the assignment was invalid, that the Defendants did not hold her mortgage and note, and that the Defendants lacked standing to foreclose or to enforce the note.

The Magistrate recommended that the case be dismissed because the homeowner lacked standing as she was not a party to the challenged assignments. The court rejected the Magistrate’s Report and Recommendation, and thoroughly and repeatedly rejected the Defendants’ “lack of standing to challenge the assignment” argument citing to holdings from the United States Court of Appeals for the First Circuit which held that there is “no principled basis for employing standing doctrine as a sword to deprive mortgagors of legal protection conferred upon them under state law”, and that the Defendants’ argument as to an alleged lack of standing by the homeowner to challenge the assignment was “extreme and incongruous”.

Bravo to the Hon. John J. McConnell, Jr. for this opinion, which is another in the recent line of cases permitting such challenges including the Glaski decision from California; the Erobobo decision from New York; and the In Re Saldivar decision from the Texas Bankruptcy Court, which follow the reasoning of the earlier Horace decision from Alabama and the Hendricks decision from Michigan (where Mr. Barnes represented the homeowner (Hendricks) with the court granting summary judgment to the homeowner when it was shown that there was no compliance with the mortgage loan transfer provisions of the PSA). A Federal court has cited Hendricks in another case, stating that its logic is plausible.

It has taken six long years of work across the US, but the courts are finally coming to the realization that the one-theme mantra of the banks and servicers of “we have the note, thus we win” no longer carries the day, and that the banks and servicers now have a lot more to allege and prove before they can be permitted to seek the drastic remedy of foreclosure.

Jeff Barnes, Esq.; www.ForeclosureDefenseNationwide.com

December 16, 2013

With the release of the US Bank admissions per our post of November 6, 2013; the issuance of the opinions from the Supreme Courts of Oregon and Montana holding that MERS is not the “beneficiary”; and recent opinions from various jurisdictions which are now, finally, holding that securitization-related issues are relevant in a foreclosure, a host of new legal issues are about to be litigated in the trial and appellate courts throughout the country. It has taken six (6) years and coast-to-coast work to get courts to realize that securitization of a mortgage loan raises issues as to standing, real party in interest, and the alleged authority to foreclose, and that the simplistic mantra of the “banks” and servicers of “we have the note, thus we win” is no longer to be blindly accepted.

One issue which we and others are litigating relates to mortgage loans originated by Option One, which changed its name to Sand Canyon Corporation and thereafter ceased all mortgage loan operations. Pursuant to the sworn testimony of the former President of Sand Canyon, it stopped owning mortgage loans as of 2008. However, even after this cessation of any involvement with servicing or ownership of mortgage loans, we see “Assignments” from Option One or Sand Canyon to a securitization trustee bank or other third party long after 2008.

The United States District Court for the District of New Hampshire concluded, with the admission of the President of Sand Canyon, that the homeowner’s challenge to the foreclosure based on a 2011 alleged transfer from Sand Canyon to Wells Fargo was not an “attack on the assignment” which certain jurisdictions have precluded on the alleged basis that the borrower is not a party to the assignment, but is a situation where no assignment occurred because it could not have as a matter of admitted fact, as Sand Canyon could not assign something it did not have. The case is Drouin v. American Home Mortgage Servicing, Inc. and Wells Fargo, etc., No. 11-cv-596-JL.

The Option One/Sand Canyon situation is not unique: there are many originating “lenders” which allegedly “assigned” mortgages or Deeds of Trust long after they went out of business or filed for Bankruptcy, with no evidence of post-closing assignment authority or that the Bankruptcy court having jurisdiction over a bankrupt lender ever granted permission for the alleged transfer of the loan (which is an asset of the Bankruptcy estate) out of the estate. Such a transfer without proof of authority to do so implicates bankruptcy fraud (which is a serious crime punishable under United States criminal statutes), and fraud on the court in a foreclosure case where such an alleged assignment is relied upon by the foreclosing party.

As we stated in our post of November 6, the admission of US Bank that a borrower is a party to any MBS transaction and that the loan is governed by the trust documents means that the borrower is, in fact, a party to any assignment of that borrower’s loan, and should thus be permitted to seek discovery as to any alleged assignment and all issues related to the securitization of the loan. We have put this issue out in many of our cases, and will be arguing this position at both the trial and appellate levels beginning early 2014.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

November 25, 2013

In a 21-page opinion issued today, the Supreme Court of Montana held that MERS is not the “beneficiary” under Montana’s Small Tract Financing Act (Montana’s non-judicial foreclosure statute). Jeff Barnes, Esq. represented the homeowners in the appeal, assisted by local Montana counsel Eric Hummel, Esq. Mr. Barnes wrote the Briefs and argued the matter before the full panel of Justices on September 25, 2013. The decision is now the law in the State of Montana.

The Court relied upon the Brandrup decision from Oregon (the companion case to the Niday decision from the Supreme Court of Oregon which also held that MERS is not the “beneficiary” under Oregon’s non-judicial foreclosure statute), and other cases cited by Mr. Barnes (who successfully argued the Niday decision in Oregon as well at both the Court of Appeals and Supreme Court levels).

In concluding that MERS is not the beneficiary under the statute, the Court quoted the homeowners’ argument  that “MERS was not the lender, did not extend any credit, and is nothing more than an electronic tracking entity”. Thus, the DOT was not and could not have been executed “for the benefit” of MERS. The Montana statute, which is practically identical to Oregon’s, requires that the “beneficiary” under the statute be the person “for whose benefit a trust indenture is given”.

The Court also rejected MERS’ argument that it is a “special agent” of the lender, finding no evidence to support this argument which the Court found that MERS wrongfully attempted for the first time on appeal. The Court held that there are no extenuating circumstances or new developments in the law to justify MERS’ not asserting an agency theory at the trial level. The Court further held that even if it had decided the agency issue using the language in the DOT, that evidence is reasonably susceptible to more than one inference and thus the legal relationship between MERS and the lender is not purely a question of law, with the term “nominee” being subject to more than one interpretation based on the context of its use.

The Court stated: “MERS relies on the same vague and confusing claim of authority as dispositive for the agency issue in this case”, referring to the Supreme Court of Oregon’s finding in Brandrup that the DOT only obfuscates MERS’ status by first granting the narrow designation of “nominee” holding “only legal title”, but then grants MERS the right to exercise “any and all” interests of the lender “as necessary”. The Court concluded that the facts of the case are susceptible to a determination that MERS was the kind of nominee that is not an agent.

The summary judgment entered by the trial court was thus also reversed.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

November 22, 2013

A New Jersey Chancery Judge has just denied a Motion to Strike a homeowner’s Contesting Answer and Defenses and dismiss his Counterclaim in a New Jersey case involving five (5) claimed Assignments which involve MERS, EMC, and Wells Fargo. In what appears to be a unique case, Wells Fargo has requested, in its Complaint, that the Court declare that three of the Assignments are void and of no effect. Counsel for Wells Fargo attempted to argue the Motion as one for summary judgment although it was not styled as such. Motions for Summary Judgment are decided under a completely different set of rules and case law in New Jersey.

The Judge stated that he has never seen a chain of title to a mortgage loan which is so complex, thus giving rise to issues of material fact and warranting denial of the Motion to Strike and Dismiss.

Jeff Barnes, Esq. represents the homeowner together with local New Jersey counsel Michael Jacobson, Esq. Mr. Barnes is admitted pro hac vice in the case and argued the matter within the last hour.

Separately, the United States District Court for the District of Rhode Island issued an opinion on November 5, 2013 in the matter of Cosajay v. MERS, 2013 WL 5912569, which rejected the Magistrate’s Report and Recommendation which dismissed the homeowner’s lawsuit based on a lack of standing to challenge the assignments. The U.S. District Court held that the homeowner has standing to challenge the foreclosure attempt, which challenge is based upon the 2008 purported MERS assignment to a securitized mortgage loan trust which closed in 2007. The homeowner asserts that on these facts, there was thus nothing for MERS to assign in 2008.

The opinion is similar in its reasoning to the Glaski decision from California, although it does not rely on Glaski but on cases from Massachusetts and on Rhode Island non-judicial foreclosure statutes. The Court stated that its “decision finding standing is buttressed by Defendants’ extreme and incongruous argument that would allow Ms. Cosjay no relief because she is not a party to the assignment”, thus putting the kebash on decisions from other states which have taken this “extreme and incongruous” position.

This decision should be used in any case, as legally permitted, where the foreclosing “bank” or servicer claims that the homeowner cannot attack the assignment because they are not a party to it. The battle as to this significant issue thus continues, but the only cases which really explain the fallacy in the position that the homeowner cannot challenge the assignment because they are not a party to it are the decisions which explain why this position cannot legally stand. The decisions which take the “incongruous” position simply adopt it without much if any legal reasoning.

A copy of the decision, which has already been widely published on the internet, is also available upon e-mail request to us.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

November 20, 2013

In a span of 3 business days, one Florida Judge has denied a servicer’s request for the entry of a foreclosure judgment without a summary judgment motion or trial in one case; another Florida Judge has dismissed a Bank of New York securitization case and assessed attorneys’ fees against Bank of New York in another case; and a Colorado District Judge has enjoined a non-judicial foreclosure sale on a foreclosure attempt by Bank of New York. The homeowners in each of the cases are represented by Jeff Barnes, Esq.

On November 14, 2013, a Lee County (Ft. Myers, Florida) Judge denied Nationstar’s Motion for an Order to Show Cause why a foreclosure judgment should not be entered pursuant to Florida Statute 702.10, as amended, which permits a foreclosing party to request that the Court enter a Final Judgment of foreclosure without even a motion for summary judgment being filed and without a trial.

The statute essentially reverses centuries of civil jurisprudence to place a burden of proof on a homeowner to show that they have valid defenses to a foreclosure when a foreclosing party files for what is called an Order to Show Cause. The hearing on the Motion, which is conducted without the protections of Rule 1.510 of the Florida Rules of Civil Procedure and without the protections of decisional law, permits the foreclosing party to request the entry of summary judgment without a Motion for Summary Judgment even being filed, and without requiring the foreclosing party to comply with any of the summary judgment requirements of Florida law. We have taken the position that the Statute is unconstitutional.

Yesterday, a Key West, Florida Circuit Judge dismissed a case filed by Bank of New York as the claimed trustee of a Countrywide securitization. The action was never properly served, and the “Amended Notice of Action” filed by BONY’s successor counsel did not comply with the verification requirements for Florida foreclosure cases.

The same Judge also yesterday assessed attorneys’ fees against BONY as the claimed trustee of a Bear Stearns securitization in another case incident to a prior dismissal of that case. The dismissal was entered as BONY failed to comply with a prior Order of the Court which had dismissed the prior action due to BONY’s noncompliance with discovery and Pretrial Orders of the Court, which dismissal conditioned any re-filing of the case on full compliance with the prior discovery and pretrial orders. BONY re-filed the case without any such compliance in violation of the prior dismissal Order. Florida case law permits attorneys’ fees to be assessed against a foreclosing party whether the dismissal is with or without prejudice, and even if the dismissal is not a ruling on the merits.

A Colorado District Judge has entered an Order enjoining a non-judicial foreclosure sale incident to a foreclosure filed by BONY as the claimed trustee of (another) Bear Stearns securitization. As our readers know, in Colorado, the precipitating procedure for a non-judicial foreclosure is the filing of a request for an Order Authorizing Sale (OAS) in a Rule 120 proceeding. Any ruling from that proceeding which results in a sale date being set may be challenged by the filing of a separate action, and there is no res judicata or collateral estoppel effect of the prior Rule 120 ruling on the subsequent action.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

November 6, 2013

We have been provided with a copy of U.S. Bank Global Corporate Trust Services’ “Role of the Corporate Trustee” brochure which makes certain incredible admissions, several of which squarely disprove and nullify the holdings of various courts around the country which have taken the position that the borrower “is not a party to” the securitization and is thus not entitled to discovery or challenges to the mortgage loan transfer process. The brochure accompanied a letter from US Bank to one of our clients which states: “Your account is governed by your loan documents and the Trust’s governing documents”, which admission clearly demonstrates that the borrower’s loan is directly related to documents governing whatever securitized mortgage loan trust the loan has allegedly been transferred to. This brochure proves that Courts which have held to the contrary are wrong on the facts.

The first heading of the brochure is styled “Distinct Party Roles”. The first sentence of this heading states: “Parties involved in a MBS transaction include the borrower, the originator, the servicer and the trustee, each with their own distinct roles, responsibilities and limitations.” MBS is defined at the beginning of the brochure as the sale of “Mortgage Backed Securities in the capital markets”. The fourth page of the brochure also identifies the “Parties to a Mortgage Backed Securities Transaction”, with the first being the “Borrower”, followed by the Investment Bank/Sponsor, the Investor, the Originator, the Servicer, the Trust (referred to “generally as a special purpose entity, such as a Real Estate Mortgage Investment Conduit (REMIC)”), and the Trustee (stating that “the trustee does not have an economic or beneficial interest in the loans”).

The second page sets forth that U.S. Bank, as Trustee, “does not have any discretion or authority in the foreclosure process.” If this is true, how can U.S. Bank as Trustee be the Plaintiff in judicial foreclosures or the foreclosing party in non-judicial foreclosures if it has “no authority in the foreclosure process”?

The second page also states: “All trustees for MBS transactions, including U.S. Bank, have no advance knowledge of when a mortgage loan has defaulted.” Really? So when, for example, MERS assigns, in 2011, a loan to a 2004 Trust where the loan has been in default since 2008, no MBS “trustee” bank (and note that it says “All” trustees) do not know that a loan coming into the trust is in default? The trust just blindly accepts loans which may or may not be in default without any advanced due diligence? Right. Sure. Of course. LOL.

However, that may be true, because the trustee banks do not want to know, for then they can take advantage of the numerous insurances, credit default swaps, reserve pools, etc. set up to pay the trust when loans are in default, as discussed below.

The same page states that “Any action taken by the servicer must maximize the return on the investment made by the ‘beneficial owners of the trust’ — the investors.” The fourth page of the brochure states that the investors are “the true beneficial owners of the mortgages”, and the third page of the brochure states “Whether the servicer pursues a foreclosure or considers a modification of the loan, the goal is still to maximize the return to investors” (who, again, are the true beneficial owners of the mortgage loans).

This is a critical admission in terms of what happens when a loan is securitized. The borrower initiated a mortgage loan with a regulated mortgage banking institution, which is subject to mortgage banking rules, regulations, and conditions, with the obligation evidenced by the loan documents being one of simple loaning of money and repayment, period. Once a loan is sold off into a securitization, the homeowner is no longer dealing with a regulated mortgage banking institution, but with an unregulated private equity investor which is under no obligation to act in the best interest to maintain the loan relationship, but to “maximize the return”. This, as we know, almost always involves foreclosure and denial of a loan mod, as a foreclosure (a) results in the acquisition of a tangible asset (the property); and (b) permits the trust to take advantage of reserve pools, credit default swaps, first loss reserves, and other insurances to reap even more monies in connection with the claimed “default” (with no right of setoff as to the value of the property against any such insurance claims), and in a situation where the same risk was permitted to be underwritten many times over, as there was no corresponding legislation or regulation which precluded a MBS insurer (such as AIG, MGIC, etc.) from writing a policy on the same risk more than once.

As those of you know who have had Bloomberg reports done on securitized loans, the screens show loans which have been placed into many tranches (we saw one where the same loan was collateralized in 41 separate tranches, each of which corresponded to a different class of MBS), and with each class of MBS having its own insurance, the “trust” could make 41 separate insurance claims AND foreclose on the house as well! Talk about “maximizing return for the investor”! What has happened is that the securitization parties have unilaterally changed the entire nature of the mortgage loan contract without any prior notice to or approval from the borrower.

There is no language in any Note or Mortgage document (DOT, Security Deed, or Mortgage) by which the borrower is put on notice that the entire nature of the mortgage loan contract and the other contracting party may be unilaterally changed from a loan with a regulated mortgage lender to an “investment” contract with a private equity investor. This, in our business, is called “fraud by omission” for purposes of inducing someone to sign a contract, with material nondisclosure of matters which the borrower had to have to make the proper decision as to whether to sign the contract or not.

U.S. Bank has now confirmed, in writing from its own corporate offices in St. Paul, Minnesota, so much of what we have been arguing for years. This brochure should be filed in every securitization case for discovery purposes and opposing summary judgments or motions to dismiss where the securitized trustee “bank” takes the position that “the borrower is not part of the securitization and thus has no standing to question it.” U. S. Bank has confirmed that the borrower is in fact a party to an MBS transaction, period, and that the mortgage loan is in fact governed, in part, by “the Trust’s governing documents”, which are thus absolutely relevant for discovery purposes.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

October 3, 2013

Several of our clients have recently received letters from Ocwen Loan Servicing in response to inquiries as to who owns the homeowner’s loan. The response from Ocwen is a form letter, which states: “There is no single investor of the loan. The loan is one of many in a securitized investment trust (with name of the trust). Ocwen is the servicer of the loan, and not necessarily the owner of the loan. Although the ownership of the loan may change, the ownership has no bearing on the servicing of the loan.”

Look at that series of admissions very carefully. We know that Ocwen is a servicer, and is never an “owner” of a loan. A servicer is (allegedly) working to service the loan on behalf of some owner. Who is that owner? Ocwen does not know, and admits that the ownership may change.

Servicing rights are conveyed by a servicing contract. Who is Ocwen working for? It does not say. What rights have been conferred upon Ocwen by whoever owns the loan? Ocwen does not say. What amount is the owner claiming is owed and under what facts? Ocwen does not say.

Ocwen does admit that the loan was securitized. This admission implicates all of the securitization issues, including authority of the servicer, whether the loan was properly transferred to the trust, whether there were any paydowns or payoffs of the note through insurances, credit default swaps, reserve pools, etc. depending on the current state of the law in whatever jurisdiction a foreclosure is pending. As you know, some states have case law which permits inquiry into the issues; some do not; and some are undecided.

This letter alone warrants intensive discovery in any foreclosure case in view of the admissions of Ocwen, which admissions generate a wealth of issues of fact for discovery and trial as well.

Thank you, Ocwen!

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

October 1, 2013

As our readers know, we are heading into our 6th straight year of fighting foreclosures. Our legal network has grown to 42 law Firms nationally, and continues to grow.

We get literally hundreds of e-mails each week from homeowners who need assistance. However, more and more of these are from people who try to do the foreclosure challenge or defense on their own, wind up getting an adverse ruling or having their home sold, then coming to us asking us to fix the problem. We reviewed more than 25 inquiries today alone, and more than half were from homeowners had put themselves in exactly this difficult position. When a homeowner who is not an attorney who has either (a) done things improperly, or (b) not taken the proper steps by proper procedures, or (c) not filed papers on time, this makes our job more than difficult, more expensive, and with a more uncertain result.

At this point in history, foreclosure defense is rocket science. Notwithstanding the wealth of law as to substance on the internet, the rules of procedure are not, and one cannot learn all of the proper rules of procedure without both going to law school and routinely practicing in court. There is just no substitute, just the way I would never, ever, try to practice medicine, engage in engineering endeavors, pretend to be an architect, or engage in any other profession which requires intensive schooling, a professional license, and on-the-job training for years on end.

The other problem is that homeowners who are not attorneys have taken many cases up on appeal which have resulted in many homeowner-unfriendly decisions, which then makes it even more difficult to advance a credible position which is not accepted by a Judge because of a decision from a non-lawyer appeal which was not properly briefed or argued before the appeals court.

That said, it is unfortunate that we are not able to help certain homeowners who present us with a situation where they have tried to defend the foreclosure themselves, and have placed the case in such a bad posture that we are not able to assist. The proper thing to do, as we have said over and over again since 2008, is to retain an attorney early on, at the first sign of a foreclosure threat. The attorney can then structure the defense properly, instead of trying to dig the homeowner out from a litigation grave from which, sometimes, it is impossible to escape.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

September 20, 2013

In a stunning ruling from the Ninth Judicial Circuit Court of Common Pleas of Charleston, South Carolina, a Judge has issued a detailed, 4-page written opinion dismissing a foreclosure action filed by Deutsche Bank National Trust Company as the claimed trustee of an IndyMac securitization, holding that DB failed to show that it was the owner and holder of the original Note and Mortgage at the time the Complaint was filed. FDN South Carolina network counsel Bill Sloan, Esq. represents the homeowner and prepared and argued the homeowner’s Motion to Dismiss.

Counsel for DB made the familiar argument that it had possession of the original Note endorsed in blank, that the Note was a negotiable instrument under the UCC, that the Mortgage follows the Note, and that thus DB had established its right to foreclose. The Court disagreed, citing precedent from the United States Supreme Court’s decision in Carpenter v. Longan, 83 U.S. 271, 16 Wall. 271, 21 L.Ed. 313 (1872) which the Court found “clearly supports the notion that the Plaintiff must own the Note and the Mortgage to foreclose on the property (emphasis in the opinion).” The Court determined that “Plaintiff failed to show that it owned the Mortgage at the time the Complaint was filed”, and also noted that the Mortgage shows MERS to be the mortgagee but that “MERS is never mentioned in the Note.”

The Court stated: “It is clear that to have standing in this foreclosure case, Plaintiff must not only be the holder and owner of the original Note, but also the Mortgage as well. Plaintiff’s Complaint in this case fails to meet this criteria. Plaintiff lacks standing to initiate and prosecute the foreclosure, and dismissal pursuant to Rule 17(a) and Rule 12(b)(6) SCRCP is appropriate.”

This ruling is based on foreclosure law from the United States Supreme Court, which trumps any contrary state law which does not require the foreclosing Plaintiff to own both the Note and the Mortgage at the time that the foreclosure Complaint is filed. This ruling demonstrates the essential fallacy in the “UCC, I have the Note, mortgage follows the Note” theory espoused by every attorney for the banks and servicers. What remains to be seen is whether the judiciary handling foreclosure cases will follow the law of the U.S. Supreme Court or not.

A copy of the Order is available upon e-mail request.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

September 19, 2013

The following is essentially an “op-ed” piece, the matters being a product of what I have seen occurring around this country in the past 5+ years since I became a full-time foreclosure defense litigator. To my knowledge, no one has sought to advance this position in court yet, but it may be that no one else has seen it as I do.

Foreclosures are “civil” actions, meaning, in court parlance, that they are not in the criminal, family, or probate divisions of the court. In the old days (pre-MERS, pre-securitization, pre-robo-signers, etc.), all foreclosure cases came into the civil court (including what are called, in some states, “Chancery” divisions) and were governed by the same Rules of Civil Procedure and pretrial procedures as other civil cases. This applied whether the case was filed as a judicial action by the foreclosing party in a judicial state, or whether filed by a homeowner challenging a foreclosure in a non-judicial state. Parties involved in foreclosure cases were treated the same and given the same rights as any other “civil” litigant involved in non-foreclosure litigation and provided with the same litigation tools, including discovery and full hearings.

What has happened in several jurisdictions is that homeowners involved in foreclosure cases have become relegated to “special” foreclosure divisions, “special” rules of procedure, and “special” pretrial procedures which (a) rob the homeowner of the protections afforded to other civil litigants; (b) railroad a foreclosure case through the system at an accelerated rate of speed; (c) force early trials which hamstring discovery rights and permit the “banks” and servicers to avoid their discovery obligations; and (d) subject homeowner litigants in foreclosure cases to procedures which have been designed for no other purpose than to “clear the court dockets”.  What is without dispute is that the dockets are crowded solely as a result of the disaster created by the investment banks and servicers from the getgo.

The United States Constitution guarantees something called “equal protection”, and precludes something called “disparate treatment” being applied to a “suspect class”. This body of law arose primarily out of the civil rights movement, and there is a wealth of case law on these issues from the Federal courts. However, all of these infirmities are present in certain jurisdictions which have chosen drastic (and, I assert, unconstitutional) measures to cram and jam foreclosure actions through the system.

Homeowners involved in foreclosure litigation are within the general class of civil litigants. All civil litigants are guaranteed certain rights, including the right to have their case governed by the Rules of Civil Procedure and pretrial and trial procedures applicable to all other civil litigants. However, a “suspect class” has been created within the general class of civil litigants (those being homeowners in foreclosure cases), whose members are being subject to “disparate treatment”, meaning that they are being treated differently than other members of the general class of civil litigants with the results being unconstitutional as applied, notwithstanding that the “special” foreclosure procedures may not be unconstitutional on their face. The difference is well-established in the case law: a rule of law may pass muster as being “facially” constitutional, but is unconstitutional when it is applied. That is what is happening in several states with the “special” foreclosure procedures.

In order to stop this wrongful torrent, someone has to be willing to file an action challenging the constitutionality of the “special” foreclosure procedures as applied, using the equal protection principles recognized in the law. The “bank lobby” has had its effect on certain state governments, which have caused the enactment of the “special” procedures for the sole purpose of making it easier for the “banks” and servicers to line their pockets with money and real property by causing the courts to deny homeowners the same rights as other civil litigants, which is illegal as is “robo-signing”, backdating Assignments, forging notary information, and creating fabricated promissory notes through “photoshop”, etc.

A government will get away with something illegal until someone calls them to the carpet on it. A perfect example of this occurred several years ago in Florida, where a new school was under construction and where the DOT had already, before the school was completed, placed the “School Zone” signs outside of the incomplete school which reduced the speed limit to 15 mph during certain hours of the day. Although the school was incomplete and unoccupied, the police wrote hundreds of tickets for “speeding through a school zone” until about 100 people showed up in court on the same day from tickets written by the same police officers and advised the Court of the facts. The Judge threw out all of the tickets at the same time and admonished the officers. Needless to say, the ticket writing stopped that day.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com