May 10, 2011

We are seeing a disturbing pattern of misconduct emerging in Florida in cases where “new” attorneys are taking over the representation of foreclosing Plaintiffs who were former clients of David J. Stern, P.A. and other foreclosure mills. These “new” law Firms, including but not limited to Albertelli Law of Tampa and McCalla Raymer of Orlando, are filing documents in cases where W. J. Barnes, P.A. is and has been counsel of record for the borrower for long periods of time, but not copying the Barnes Firm on such filings. This demonstrates that these “new” law Firms are not reviewing the court file, and the result is an apparent attempt to cause court proceedings to take place without notice to the borrower’s counsel.

Not providing a copy of any filing to a party’s counsel of record is not only illegal, but unlawful and unethical as well, and is especially egregious if that filing is a Motion for Summary Judgment or Notice of Hearing. We have been made aware of this because certain of our clients have copied us with papers they have received from the plaintiff’s “new” Firm which do not show a copy of the paper to their counsel of record. We hope that the Judiciary will command that these “new” law Firms show cause why sanctions should not be entered against them.

Separately, registration for FDN’s foreclosure defense seminar scheduled for Friday, May 20, 2011 in Edison, New Jersey closes this coming Monday, May 16, 2011. Registration forms are available by e-mail request to [email protected]. Again, the seminar is only for attorneys and paralegals associated with law Firms.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

May 3, 2011

Last Thursday, April 28, 2011, FDN attorney Jeff Barnes, Esq. obtained another dismissal of a foreclosure and  awards of attorneys fees against two banks in cases in Lee County, Florida. Two other cases were removed from the “rocket docket” and are being sent back to the presiding Judge for hearings on objections asserted by the foreclosing plaintiff to Mr. Barnes’ discovery requests. Courts in Florida, New Jersey, and Oregon have already compelled this same discovery to be produced in cases where Mr. Barnes is representing the borrowers, and dismissals of foreclosures have been the sanction in cases in New Jersey and Florida where the foreclosing plaintiff has not complied with the discovery and orders compelling the documentary discovery. Two of the cases in New Jersey were dismissed without even a Motion to Compel pending, which is a clear signal that Judges are not going to tolerate a foreclosing plaintiff’s noncompliance with a borrower’s discovery.

In Washington, a Federal Judge in a case which was filed in state court by a borrower challenging a foreclosure but which was removed to Federal court has issued an Order which has stayed a foreclosure involving a securitization and MERS pending the resolution of a certified question to the Washington Supreme Court as to MERS’ authority and claim to be a “beneficiary” under the Washington Deed of Trust Act. The Order also extended the state court injunction against any foreclosure, and also stated that the plaintiff may have a cause of action for breach of duty of good faith against the trustee sale company.

The plaintiff had asserted a claim for breach of fiduciary duty against the company which was rejected by the Court, but the Court’s Order opened the door to a claim for breach of duty of good faith against the trustee sale company. This ruling is the first of its kind that we are aware of that permits a borrower to assert a direct claim for breach of duty against the trustee sale company. We are utilizing this recent ruling in our Washington-based cases involving securitizations and MERS to likewise request a stay of any foreclosure pending the resolution of the certification issues in the Washington Supreme Court.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

April 27, 2011

FDN’s foreclosure defense seminar for attorneys and paralegals in Edison, New Jersey is just 23 days away (Friday, May 20, 2011). Registration closes on Monday, May 16, 2011. Registration forms are available by e-mail request to [email protected].

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

April 27, 2011

The Michigan Court of Appeals has issued a decision for publication dated April 21, 2011 which undoes MERS’ ability to institute non-judicial foreclosures by publication. The very well-reasoned opinion goes through the history of what MERS is using much of the MERS case law which FDN has been using in cases across the United States, and analyzes this against the Michigan foreclosure by advertisement statute, which does not contain any provisions for “nominees” or other non-owners of promissory notes to institute foreclosure.

The case distinguishes the Jackson decision from Minnesota, noting that the Minnesota statute does permit a nominee to undertake foreclosure action. Michigan’s statute is very different, and the Court went to significant length to set forth the reasons why MERS does not qualify as a party with the ability to institute foreclosure under the Michigan statute.

FDN has added additional counsel in Michigan, and our attorneys have already prepared Motions for Summary Judgment in MERS cases based on this new appellate decision.

Separately, one of the presiding Judges in the Ft. Myers (Lee County, Florida) foreclosure division announced today at a “docket sounding” that the current foreclosure system there (which those of us who practice there know to be the “rocket docket”) will cease to exist as of June, 2011. This announcement came in the wake of the recent ACLU appeal to the Florida Second District Court of Appeal which illustrates the constitutional infirmities with the current Lee County foreclosure system.

Although the Judge announced that the Court “has no firm exit stragtegy” from the present system, Jeff Barnes, Esq., who was present in that court today for a hearing, also discussed the matter with several court personnel after the hearing, who advised that they have been told that the cases will probably revert back to the original assigned Judge to proceed in the normal manner of other civil cases.

This is a step in the right direction. Borrowers will now be provided with the same protections in litigation as other, non-foreclosure litigants, and not be subjected to the arbitrary and debilitating “rocket docket” procedures which essentially railroaded foreclosure cases through a system of disparate treatment and to the advantage of the trustee banks, servicers, and “rent-a-lawyers” who appeared at the rocket docket hearings for the foreclosure mills day after day for the purpose of “rapid disposition” of borrowers’ interests in their homes and investment properties.

Jeff Barnes, Esq., www.ForeclosureDefensenationwide.com

April 21, 2011

Judge Lynn Tepper of the Pasco County (6th Judicial Circuit), Florida Circuit Court has dismissed, on the same day, two separate foreclosure actions filed by SunTrust. Both of the March 15, 2011 Orders require SunTrust, on the filing of any Amended Complaint, to do the following:

   (a)  Plead a chain of ownership and holdership to establish its standing to sue at the inception of the case, and in so doing, SunTrust must remedy the inconsistencies contained in the original Complaint; and

   (b)  Plead its capacity to sue and its ability to maintain an action within the Court’s jurisdiction; and

   (c)  If SunTrust is not the owner of the note, it must specifically plead ultimate facts identifying the owner and SunTrust’s authority to act as representative for said owner, attaching proof of said representative authority; and

   (d)  If SunTrust has accelerated the note at issue it must attach a copy of the notice of acceleration upon which it relies; and

   (e)  If not previously filed, SunTrust must post the required cost bond (under the Florida statute cited.)

The Order also and further requires SunTrust to comply with the amended version of Rule 110(b) of the Florida Rules of Civil Procedure and Florida Statute 92.525 which requires that the Amended Complaint be properly verified as part of the Complaint and not as a separate pleading.

Bravo and kudos to Judge Tepper for: (i) upholding the form and substance requirements of verification of mortgage foreclosure actions enunciated by the Supreme Court of Florida and Florida decisional law; (ii) upholding the ultimate fact pleading requirements for civil cases in Florida; and (iii) requiring SunTrust to plead facts to establish standing to sue at the outset of the case, and not by post-filing “cleanup” or other method. We are currently representing borrowers who are in foreclosure litigation with SunTrust or who have been threatened with foreclosure by SunTrust where SunTrust has admitted that it does not own the note and where the note is (allegedly) owned by FNMA, with SunTrust claiming that it has “authority” to act for FNMA as alleged “owner” of the note.

The Orders were entered in Pasco County, Florida case numbers 2010-CA-1339 ES and 51-10-CA-1306 ES. We thank one of our dedicated readers for providing this important update in Florida.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

April 15, 2011

FDN will be hosting its next two foreclosure defense seminars on the following dates: Friday, May 20, 2011 in Edison, New Jersey; and Friday, June 24, 2011 in Newport Beach, California. Space is limited, and registration for the New Jersey seminar has been brisk. Registration Forms are available by e-mail request to [email protected].

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

April 14, 2011

We have been railing against the misdeeds, faulty paperwork, and wrongful actions of MERS for now going on four (4) years. Although most Judges have seen the truth and have ruled accordingly against MERS, there are certain holdouts who continue to (wrongfully) equate MERS “solely a nominee” with MERS “as an agent” and have otherwise approved MERS’ faulty practices. Fortunately for all of us, the United States Department of the Treasury, the Board of Governors of the Federal Reserve, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, and the Federal Housing Finance Agency have found, apparently after an exhaustive investigation, that MERS and MERSCORP have committed a series of serious failures with respect to their operations and management in connection with services provided to Examined Members related to initiating foreclosures, including the following (from page 5, paragraphs 4 and 5 of the Consent Order as to MERS):

     (a)  have failed to exercise appropriate oversight, management supervision and corporate governance, and have failed to devote adequate financial, staffing, training, and legal resources to ensure proper administration and delivery of services to Examined Members (e.g. mortgage lenders and servicers); and

     (b)  have failed to establish and maintain adequate internal controls, policies, and procedures, compliance risk management, and internal audit and reporting requirements with respect to the administration and delivery of services to Examined Members; and

     (5) by reason of the conduct set forth above, MERS and MERSCORP engaged in unsafe or unsound practices that expose them and Examined Members to unacceptable operational, compliance, legal, and reputational risks. (empasis added).

     Shazam!!! A series of findings by multiple Federal agencies (which MERS and MERSCORP do not admit or deny) that MERS and its parent corporation engaged in unsafe or unsound practices in connection with initiating foreclosures which expose them and the lenders, “trustee” banks, and servicers to UNACCEPTABLE legal risks!

     About time. Those of us who live in this world are more than aware of the never-ending parade of fraudulent acts undertaken by MERS on almost a daily basis; MERS’ consistent violations of its own self-imposed regulations and limitations; and MERS’ violations of trusts documents, trust law, and regulations and contract requirements applicable to securitized mortgage loan trusts. These findings should prompt every Judge who has a case with MERS issues being litigated to take a serious step back and put the brakes on any foreclosure until ALL of the actions of MERS are fully analyzed against MERS’ own Terms and Conditions, any trust documents, and applicable law. The various Federal agencies have recognized and confirmed the misconduct, so it is time for the Courts to do likewise.

Jeff Barnes, Esq., www.ForeclosureDefensenationwide.com

April 12, 2011

Jeff Barnes, Esq., representing an LLC-owned apartment complex in Indiana, has successfully defeated a Motion for Summary Judgment which was filed by Deutsche Bank as trustee of a securitized mortgage loan trust. The Court candidly admitted that this was its first case involving securitization of mortgage loans. Mr. Barnes prepared the legal memoranda and personally argued at the hearing. The Court denied the summary judgment, stating that there were genuine issues of material fact.

This decision is important not only because it shows that commercial loans have also been securitized, but further as it appears to be the first such ruling on a commercial securitization foreclosure case in the State of Indiana. Mr. Barnes is also representing other borrowers in Indiana involved in foreclosures filed by Deutsche Bank as “trustee” for securitized mortgage loan trusts with individual home loans. 

In Florida, choas is the order of the day following the David J. Stern debacle. As those of you who follow this website are aware, Stern recently requested more time from the Palm Beach Circuit Court to withdraw from over 100,000 foreclosure cases, which request was denied by the Court. What has happened is that the former Stern clients (primarily securitization “trustee” banks and servicers) have been scrambling to obtain new counsel. The result has been literal chaos, disorder, and confusion. In several cases where Jeff Barnes, Esq. represents the borrowers, the “new” law Firm has admitted to failing to copy Mr. Barnes on court filings and confusing one case with another. In other cases, multiple attorneys have appeared for the same hearing on behalf of the Plaintiff, without each knowing the other was involved.

It is only going to get worse. With Stern notifying the world that his Firm is in the process of withdrawing from over 100,000 foreclosure cases in Florida alone, the nightmare is sure to continue.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

April 9, 2010

We previously posted that two of the New Jersey foreclosure mills had opposed the application of Jeff Barnes, Esq. for admission to the courts pro hac vice, and that all such “objections” were denied. This week, another New Jersey Judge has granted Mr. Barnes’ admission, this time to the Morris County Chancery court in a case where U.S. Bank is the securitization “trustee”. The Order granting the application was significant in that it made reference to the fact that the borrowers specifically stated that they wanted Mr. Barnes to represent them, and that pursuant to recent decisions by other judges, including the Chief Judge, the case in which the application was made (which is a securitization case) is deemed to be “complex” under New Jersey’s Rules of Court.

This is an important milestone development in view of the mantra repeatedly espoused by attorneys for foreclosing “trustee” banks such as Deutsche Bank, U.S. Bank, and Bank of America, who consistently argue to the courts that “this is just a routine foreclosure”. As those of you who follow this website know, there is nothing “routine” about a securitization, with more and more aspects and nuances of the complicated world of mortgage-related derivatives emerging now almost daily.

A prime example of this is a recent discovery by our loan and trust investigator of Fitch’s “upgrade”, in 2006, of a RALI series securitization which generated $9.96 billion (yes, that’s billion) which purchased mortgages from various banks, including SunTrust. The narrative states that the overwhelming majority of the mortgage pool consists of 30-year fixed rate loans on primary residences with an average borrower FICO score of 715. If this is true and the mortgage-backed securities collateralized by this trust were “upgraded” based on this information, how then does MERS or anyone else get away with assigning a toxic, non-performing loan to such a trust years after it closed for purposes of furthering a foreclosure?

Our investigator has also advised us that as of April 8, 2011, the Mortgage Bankers’ Association is demanding more information on insurances available to servicers when a mortgage loan goes into “default” status. This is the same insurance which many attorneys representing servicers have said “does not exist” or “is not relevant” to a foreclosure. Well, if the servicer which instituted the foreclosure claiming a default on the loan has in fact received insurance proceeds in connection with the claimed default, how is that information not relevant to the issue of the amount allegedly “due” on the loan as demanded by the party seeking foreclosure?

Separately, in a hearing in the Monroe County (Key West) Florida court yesterday, Mr. Barnes successfully defended a summary judgment motion filed against a Florida borrower by Iberia Bank as alleged successor to Orion Bank, which was the original lender. The borrower was approved for a loan modification by Orion and made her first 2 monthly payments on the modification, which payments were accepted by Orion Bank. However, when Iberia Bank “took over” after Orion failed and went into FDIC receivership, Iberia took the position that the approved loan modification with the original lender was “not valid”; refused to honor the modification which the borrower made payments on and which had been accepted by the original lender which approved the modification; declared a default on the pre-modification loan balance; and instituted foreclosure. The Judge denied Iberia’s Motion for summary judgment, stating that there were genuine issues of material fact present.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

April 8, 2010

We have previously advised Colorado borrowers of the importance of Colorado’s Rule 120 procedure, where the foreclosing party files a Motion asking the Court to schedule a foreclosure sale. We have also advised that if the borrower has a challenge to the foreclosure that it should be made in response to the Rule 120 Motion, which response should only be done through an attorney.

This week, we were informed that Wells Fargo is telling borrowers who have applied for a loan mod “not to worry” about the Rule 120 hearing and not to attend it, as they are in loan modification. THIS IS ABSOLUTELY FALSE AND FRAUDULENT. It is obvious that Wells Fargo is doing this to circumvent the borrower’s legal right to challenge a foreclosure, so that when the loan mod request is ultimately denied (which the overwhelming majority are), Wells Fargo can then foreclose on the date set by the Court at the Rule 120 hearing, where the borrower did not appear and did not file a challenge to the foreclosure request.

In New Jersey, Jeff Barnes, Esq. was admitted pro hac vice in two more Chancery courts over the objection of the foreclosure mills Zucker Goldberg and Fein Such. We view these “objections” to a borrower’s right to retain the counsel of their choosing to be in bad faith and asserted for no legitimate purpose in an effort by the foreclosure mill to attempt to (wrongfully) seek to control who represents the borrower or who the borrower can retain for legal assistance. Obviously the New Jersey courts, which have consistently overruled these “objections”, feel the same way, and have, by their rulings, ensured that the borrower, as the client, maintains the right to control who they wish to represent them in court.

FDN attorneys have also been recently retained by Tennessee borrowers who were victims of the flood who are now not only facing foreclosure of their damaged homes, but also litigation from the property insurers who have filed lawsuits (called “interpleaders”) asking the Court to determine who is owed the insurance proceeds: the borrower/flood victim or the foreclosing party. As the insurance company’s filings have raised issues as to securitization and possible violations of the Tennessee nonjudicial foreclosure laws, we will be litigating these issues inside of the insurance company’s interpleader action.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com