November 23, 2011

FDN is pleased to announce that we now have a certified securitized loan and trust auditor in-house. We have been literally flooded with securitization audit requests of late in connection with both ongoing litigation and persons who desire an audit to determine how to proceed in an actual foreclosure, threatened foreclosure, or for use in settlement negotiations. Inquiries as to this may be made through the inquiry form on the “Contact Us” link.

We are also in the process of finalizing a relationship with a group of certified bank fraud examiners who previously worked for major mortgage lending institutions and government agencies. These experts will provide valuable support in connection with affirmative claims being made against banks and their agents arising out of foreclosure-related litigation, including predatory lending claims and fraud-based claims. Details as to the persons involved and areas of expertise are expected to be published on this website by the end of next week.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

November 21, 2011

We have been asked this question repeatedly, and more and more in the last few weeks as 2011 draws to a close. Although we cannot predict the future, we do offer some information which has been relayed to us, and some personal observations as well based on recent events.

First, foreclosure is now a well-established business among the banks and servicers, and more and more foreclosures are being filed. We were recently advised that approximately 4 million NEW foreclosures are to be filed in the next few months.

Second, the attitude of the foreclosing parties is becoming increasingly hostile. The often told story of someone who was put through hoop after hoop by a “lender” or servicer in connection with a loan mod request (loss of documents, denials that documents were sent, inconsistent communications concerning the status of a mod application, refusal of the party offering the mod to affirm in writing that the foreclosure will be cancelled pending the loan mod neogitations, etc.) are becoming more and more rampant.

Several months ago, an attorney working for a foreclosure Firm told me point blank: “You are not a real foreclosure lawyer until you kick a single mother with 4 kids out into the street on Christmas Eve.” There was no laughter when this comment was made to me.

Third, in view of the Attorney General lawsuits and the litigation against the banks, we are seeing more and more homeowners questioning whether a prior foreclosure was legal, with requests to seek to “unwind” or reverse the foreclosure. Most states have one or more remedies to make this challenge, and as many of our clients are investors who lost their life savings on properties which were foreclosed, we are being asked more and more to seek to undo past foreclosures.

One thing seems fairly certain: foreclosure is going to continue for several years. I even had a Judge tell me this in a recent hearing. What we have to do is to continue the challenge. More and more courts are deciding in favor of homeowers on critical issues, which we view as a very good sign.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

November 16, 2011

Recently, we have had many inquiries from Colorado homeowners as to the effect of a Rule 120 Motion and hearing, and communications reflecting a misunderstanding of the procedure. We urge Colorado homeowners to read this article so that they know how the Rule 120 system works and what remedies are available.

In a Rule 120 proceeding, the alleged creditor files a Motion for an Order Authorizing the sale of certain real estate (which is the homeowner’s property). The Motion must set forth certain specific facts, and requests that the Court set a date and time for a hearing on the Motion where the alleged creditor will ask for an Order authorizing the sale of the property.

The matter is thereafter set for a hearing by a Notice of Hearing, which notifies the homeowner that on a date and time certain, a hearing on the Motion will be held at a specific court location. The Notice specifically provides that if no response to the Motion is filed by a date certain before the hearing (usually within 5 days before the date of the hearing), that the Court may cancel the hearing and authorize the foreclosure and Public Trustee’s sale without further notice.

The reality is that if no response is timely filed opposing the Rule 120 Motion, there is no “hearing”; the court simply enters an Order authorizing the sale as the Rule 120 Motion is deemed “uncontested” as the homeowner did not properly or timely oppose it.

If a homeowner files a timely response properly opposing the Rule 120 Motion, a hearing is thereafter scheduled for a day some time in the future, and NOT on the day set forth in the Notice of Hearing. Once the matter is properly contested, a separate hearing has to be scheduled at which time the alleged creditor must present evidence to support its claim and request that a sale date be scheduled some time in the future. The homeowner has the opportunity, at that heaaring, to present matter to oppose the Motion. What usually happens is that the alleged creditor will ask that the sale be on the date which is set forth on the Public Trustee’s “Combined Notice”, which is a separate document sent to the homeowner, if there is sufficient time before said date to do so.

As such, if a homeowner properly and timely opposes the Rule 120 Motion, the house cannot be sold on the date of the “hearing” on the original Notice of Hearing for the Rule 120 Motion. On that date, Orders for sales are entered if there is no timely and proper opposition filed; if an opposition is timely and properly filed, the matter is removed from the date on the Notice of Hearing for the Rule 120, and the court schedules the matter for a separate “evidentiary” hearing.

A “timely and properly” filed opposition to a Rule 120 Motion is ONLY done by an attorney. There are specific matters which must be put into the opposition, and Colorado also has electronic filing and service requirements as well for service on the alleged creditor. The other problem is that “foreclosure mill” attorneys may not coordinate a hearing date with the homeowner who is not represented by counsel, and may just set it on their own. We have also known foreclosure mill attorneys to render false information to unrepresented homeowners as to what the law and procedure is.

As a contested Rule 120 hearing is very narrow in scope, even if a homeowner’s challege to the Rule 120 Motion is unsuccessful, the homeowner can still file a separate lawsuit to seek to stop and challenge the foreclosure. There is no preclusive effect of an adverse Rule 120 disposition which precludes the filing of a separate challenge to the foreclosure. We have, however, been advised by homeowners that foreclosure mill attorneys have told unrepresented homeowners that if they lose the Rule 120 hearing that the matter is over and they should not make any further challenge to the foreclosure. We even had a situation this week where a foreclosure mill attorney told a Judge that “the standing issue was already decided at the Rule 120, so this lawsuit will not succeed”. The law, however, is otherwise, and the matter is in fact progressing to a full evidentiary hearing on the homeowner’s request for a preliminary injunction.

Another problem is that the Notice of Hearing on the Rule 120 filed by the foreclosure attorney may be inaccurate or misleading. An example of this is in a Rule 120 Notice filed by a foreclosure attorney in one of our cases which says: “If you dispute the default or other facts claimed by (alleged creditor, which will remain unnamed for purposes of this article) to justify this foreclosure under the Soldiers’ and Sailors’ Relief Act of 1940, as amended, you must make a written response to the Motion, stating under oath the facts upon which you rely and attaching copies of all documents which support your position.”

This Notice is absolutely misleading and inaccurate as it leads the homeowner to believe that the only proper challenge to the Rule 120 Motion is pursuant to the Soldiers’ and Sailors’ Relief Act of 1940, when the truth is that the Colorado Supreme Court issued a published decision in the year 1989 which specifically held that issues as to whether the alleged creditor is the real party in interest may be raised in a Rule 120 hearing, and that a court which does not permit this to be raised (and confines the matter to “default” and “Soldiers’ and Sailors” issues) commits due process violations and reversible error.

Again, a non-attorney homeowner is not going to know this or how to properly present it to the Court. Thus and again, we strongly urge homeowners facing foreclosure in Colorado to consult an attorney who practices in this area. Trying to do this without an attorney is dangerous at best.

Finally, as with all litigation, there is no certainty that a particular Judge is going to accept the homeowner’s challenge to either the Rule 120 Motion or a challenge to a foreclosure in a subsequent lawsuit. The majority of the real issues related to securitization, compliance by a securitized trustee with the PSA, etc. have not been addressed by the Colorado appeallate courts, so there is no firm guiding law on these issues at this time. We are and will continue to bring these issue to the fore in Colorado, as other states have already decided these issues in the homeowner’s favor, and Colorado courts are permitted to look to the law of other states for guidance if there is no Colorado law “on point.”

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

November 11, 2011

FDN conducted its last foreclosure defense seminar in its Newport Beach, California offices today. The next seminar will be held once FDN moves its offices to greater Los Angeles, California, which relocation is anticipated to occur at the end of this year. The move is in connection with Mr. Barnes’ expanding practice requiring access to multiple airports and proximity to FDN’s Los Angeles based counsel.

Attorneys from North Carolina, Ohio, Indiana, and California attended today’s seminar which was repeatedly praised as “amazing” in all respects. Attendees repeatedly voiced that they now felt confident and powerful armed with the amount of material and knowledge gained at the seminar. One attendee expressed that his only experience in foreclosure defense was in assisting relatives with a foreclosure, but that now he was ready to pursue a foreclosure practice.

A 500 page handbook with templates for pleadings, motions, discovery, legal memoranda, and copies of key case decisions was provided to each attendee, focusing on case decisions favorable to borrowers on issues of failure of a securitized trustee to comply with the PSA, third-party beneficiary status of a borrower to challenge compliance with a PSA, reversing summary judgment where there was no evidence that the bankruptcy trustee of a bankrupt lender provided MERS with the authority to assign a mortgage loan from the bankrupt lender to a servicer; and the new standard for opposing proofs of claim and stay relief motions in Bankruptcy actions in nine states.

The FDN foreclosure defense seminar series has now trained attorneys licensed and practicing in the states of New Jersey, New York, Pennsylvania, Illinois, Indiana, Ohio, North Carolina and California in setting up, managing, and expanding their foreclosure defense practices. The seminars have also directly resulted in the addition of seven law Firms to the FDN attorney network, and the ability of those firms to share information and strategies as to pleading, motion practice, discovery, and settlement avenues with a network of now 42 law Firms across the U.S., and also the ability to assist their clients who have properties in states other than where these attorneys normally practice.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

November 8, 2011

The Clerk of the Court for Duval County, Florida has sued MERS and its parent company for civil conspiracy, unjust enrichment, and fraudulent and negligent misrepresentation, claiming that “MERS has usurped the rights and privileges of the Florida Clerks of Court by establishing, maintaining and inducing lenders to use its private recording system, which unlawfully interferes and competes with the public recording system”. The suit seeks, among other things, an injunction to prohibit the use of MERS in Florida. As those of you who have followed MERS know, MERS made a decision years ago that Florida was the one state where it would cease instituting foreclosures in its own name. However, MERS has and continues to execute documents for the purpose of substantiating the filing or prosecution of foreclosures.

The real question will be whether, if this action is successful, it will have any impact on the existing Florida case law which permits MERS to do a host of things in connection with foreclosures, including assigning promissory notes which it does not own; assigning loans to securitized mortgage loan trusts years after the trusts close; assigning loans from bankrupt lenders without approval from the bankruptcy court, etc. Hopefully, it will have such an impact where the appellate courts of Florida will perceive that there is a conflict between the old decisions which uphold the actions of MERS and the frauds being perpetrated by MERS, and a consequent overruling of the “bad precedent” as to MERS.

On a separate note, we have received many thanks, praises, and congratulations of late from clients who are fighting foreclosure for our diligence in continuing to challenge the actions of banks, servicers and securitized trustees around the United States, and our tireless work in doing so. After now 4 years of hard work, it is apparent that most of the courts in the US are finally starting to see what really happened; that the foreclosing parties have not demonstrated that they have the right to foreclose; that they routinely fail to comply with the very agreements which govern the manner by which mortgage loans are transferred; and that they thus cannot railroad foreclosures through the system as they used to do so easily.

The next step, in addition to the assertion of affirmative claims against the wrongfully foreclosing parties, is the securing of evidence of insurances and other collateral sources which provided for benefits and payments upon default by the borrower in securitizations. Although Jeff Barnes, Esq. has obtained no less than nine separate court Orders compelling this discovery, the foreclosing parties have never, ever, produced the required discovery, resulting in both dismissals of foreclosures and the assessment of attorneys’ fees against the offending foreclosing party.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

November 3, 2011

W. J. Barnes, P.A. has been approved by The Florida Bar as a Sponsor for presentation of foreclosure defense seminar courses. The Florida Bar has also approved all seven courses to be presented at FDN’s November 11, 2011 Foreclosure Defense Seminar in Newport Beach, California, and has assigned general CLE credit to each course. 

Only five seats remain open for this seminar. Please contact [email protected] for information. Registration closes Tuesday, November 8, 2011.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

November 2, 2011

Only five (5) seats remain for FDN’s final seminar in its Newport Beach, California office, which will be held on Friday, November 11, 2011. Registration forms are available by e-mail inquiry to [email protected]. Seminar is limited to attorneys and paralegals associated with law firms only.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

November 1, 2011

As most of you who follow the foreclosure websites know, the Attorney General of Delaware has recently instituted claims against MERS for fraudulent practices and other wrongful acts. We are glad to see that another AG has recognized what MERS is versus what it claims to be, and has taken action accordingly.

Jeff Barnes, Esq. represents borrowers, with the assistance of local counsel, in Delaware where MERS either filed the foreclosure action or was otherwise involved with the alleged “assignment” of the mortgage to a third party for purposes of either instituting or furthering a foreclosure. In each case, we have sought discovery as to MERS, including all sources of authority which would permit MERS to undertake any action to institute or further a foreclosure. In one case where we did, MERS (the Plaintiff in the foreclosure action) substituted with another entity.

Those of you who have even an inkling of the MERS issues know that MERS’ own self-imposed Terms and Conditions preclude the use of the MERS system to either create or transfer any beneficial interests in mortgage loans, and MERS disclaimed any status as a lender, servicer, credit advancer, or similar characteristic in the Nebraska Dept. of Finance v. MERS litigation years ago in order to avoid having to register as a mortgage broker and pay attendant fees, etc. Notwithstanding these affirmative representations by MERS’ own attorneys to the Nebraska Supreme Court, MERS then alleges, in the other 49 states, that it is the “beneficiary” of a Deed of Trust or the “mortgagee” of a mortgage or otherwise has the right to undertake actions directly related to the creation or transfer of a beneficial interest in a mortgage loan, such as executing an assignment of mortgage or deed of trust (oftentimes to a securitized mortgage loan trust years after the trust closed, which is not permitted by the trust documents), or substituting the original trustee (in a non-judicial foreclosure state) with a third-party “trustee sale company” (such as ReconTrust, Northwest Trustee Services. Quality Loan Service, Trustee Corps, etc.), for purposes of furthering a foreclosure.

For years, we have argued, based on numerous cases from over a dozen states which have addressed the issue, that these actions of MERS are illegal and fraudulent. We thank the AG of Delaware for recognizing that these actions are fraudulent and must be punished.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

October 26, 2011

         (Mr. Barnes had dental surgery last week and was out for several days; hence no articles last week)

The Appellate Division of the State of New Jersey has reversed a summary judgment which had been entered in favor of Aurora Loan Services, LLC. The opinion cited decisional law that a party must generally “own or control the underlying debt” in order to foreclose, and if the debt is evidenced by a negotiable instrument such as a promissory note, the determination whether a party owns or controls the underlying debt is governed by Article III of the UCC.

The Court found that Aurora was neither a holder of the note nor a person not in possession who is entitled to enforce, and that the Certification of Aurora’s “Vice President” did not state that she personally confirmed that the copies of the note, mortgage, and assignment were copies of originals in Aurora’s files.

More importantly, the Court found that the assignment, signed by a “Vice President” of MERS as nominee for Lehman Brothers, was ineffective first as there was no Certification by this VP or any other representatiive of MERS regarding the VP’s authority to execute the assignment or circumstances of the assignment. The problem with the assignment was further compounded by the fact that Lehman filed for Bankruptcy in 2008, which was before the date of what the Court termed the “purported assignment” in 2009, and the Court thus questioned whether Lehman’s designation of MERS as nominee remained in effect after Lehman filed BK absent ratification of that designation by the BK Trustee.

This same situation is present is many of our cases: the original lender (e.g. Lehman, WaMu, American Home Mortgage, Accredited Home Lenders, and others) files for BK, and the securitized trustee or servicer then purports to foreclose based on a post-BK filing assignment without any evidence that the assignment was permitted by the BK trustee. This opinion is what we believe to be the first which actually addresses this precise issue which relates directly to the threshold issues in any foreclosure of standing, real party in interest, and the “person entitled to enforce” issue under the UCC.

In Missouri, a probate Judge has dismissed a claim by HSBC Bank USA, N.A. as the claimed trustee of a series of Nomura “Asset-Backed Certificates”, finding that HSBC is not a “person” under either of the Missouri statutes which permit a “person” to make a claim in a probate proceeding. The Motion which precipitated the dismissal characterized HSBC as Trustee for the certificates as “nothing more than a stack of paper”. Apparently the Court agreed, and found that HSBC had no standing to sue.

This decision is important as it relates directly to who can make a claim relating to a mortgage and note. If a particular state statute provides only that a “person” may institute a foreclosure, and the trustee of a series of MBS does not quality as a “person”, then there should be no standing for that trustee to foreclose. Obviously, the individual state statute must be consulted, but this ruling provides a new avenue of attack on securitized “trustees” seeking to make claims.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

October 13, 2011

An Orange County (Orlando) Florida Judge today denied Wells Fargo’s Motion for Summary Judgment after the borrower filed papers detailing the incomplete nature of discovery and setting forth how WF did not meet its burden for summary judgment, including reference to the transcript of a prior hearing on the same motion where the Judge told WF: “you do not own the note” and that WF would not only have to prove ownership of the Note but the source of authority given to WF to foreclose when it was not the original lender. The homeowner, who originally proceeded pro se, served discovery through her counsel Jeff Barnes, Esq. seeking discovery on the very issues highlighted by the Judge in the prior hearing.

Florida Default Law Group, which represents WF, objected to all of the homeowner’s pro se discovery and failed to ever serve a response to the homeowner’s discovery served by Mr. Barnes, only filing an open-ended Motion for Extension of Time to respond to the discovery some 37 days after the expiration of the 30 days permitted by the Florida Rules of Civil Procedure to serve a response to the discovery.

At today’s hearing, the Judge stated: “The law in Florida is very clear: if discovery is incomplete, there is no summary judment.” WF’s Motion was thus denied, again, as it was at the prior hearing in June of 2010. Despite having 16 months to provide discovery, WF has failed to do so, as it also failed to do in the Iowa case where Mr. Barnes represents the homeowner where WF recently voluntarily dismissed its case just weeks before the trial was scheduled (per prior post on this website of October 4, 2011).

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com