May 15, 2020

Mr. Barnes has been participating in numerous CLE courses concerning force majeure and impossibility of performance defenses. The presentations so far have focused on narrative and cases involving assertion of the defenses in the non-foreclosure arena and have not, as of yet, specifically focused on the application of these defenses to foreclosures or evictions (aka FED and UD cases) in the context of a pandemic. The probable reason is that there has never been a pandemic in recent history which has affected homeowners in the manner that COVID-19 has, and thus there is no case law on the application of these defenses in the present context. Many cases involving foreclosure or eviction issues where these defenses will be raised will thus be “cases of first impression” in the courts.

All of the presenters agree on one thing: that there is going to be a lot of litigation and a lot of new law created as to the application of these defenses to foreclosure and eviction proceedings (which are scheduled to resume next month in numerous states). Several of the presenters have also commented that special COVID-19 mediation procedures will probably be set up as well.

To this end, Mr. Barnes has teamed up with Will Younghans of Coast to Coast Consultants LLC, and have formed a new company which is geared specifically toward assisting homeowners facing foreclosure or eviction as a result of the effects of COVID-19. The company will be involved in the development of new law centered around the defenses of force majeure, impossibility of peformance, and other defenses applicable to COVID-19 related foreclosures and evictions.

Mr. Barnes and Mr. Younghans, who have already worked together for several years on many foreclosure-related cases in several states, will also be assisting homeowners in COVID-19 related loan negotiations and mediations. Mr. Younghans has years of nationwide experience in assisting homeowners with loan modifications and workouts.

Requests for assistance can be made through the “Contact Us” link above.

Jeff Barnes, Esq., ForeclosureDefenseNationwide

May 6, 2020

The COVID-19 virus pandemic is having, and will continue to have, a significant effect on foreclosures, evictions, and other collection and possessory actions throughout the United States and the world in an unprecedented way. Although most states have imposed temporary moratoriums on foreclosures and evictions, the restrictions will eventually be lifted, at which time foreclosures and evictions are expected to spike rapidly.

A mortgage and a lease are contracts. Thus, contract-related defenses such as force majeure and impossibility of performance become important if in fact a homeowner or renter was not able to make their payments due to the effects of the virus which then caused the foreclosure or eviction. These are very fact-specific defenses and require proper notice, documentation, and recording of events, and depend on individual circumstances.

As the COVID-19 pandemic is something that has not affected us in modern times, there is a dearth of case law on the force majeure and impossibility of performance defenses outside of the commercial sales/sale of goods arena (where, for example, the defenses come up due to a livestock plauge, revolution or governmental action in the seller’s or buyer’s destination country, etc.). Thus, an entire new area of case law will be developed in the coming months (and probably years) as to how these defenses work in the mortgage loan and rent areas of the law.

Mr. Barnes has already developed several theories of defense for the upcoming onslaught of foreclosures and eviction filings, and is actively engaged in CLE courses on the issues. One thing is for certain: these defenses are very complex, so they should not be randomly asserted without the benefit of an attorney, especially as doing so improperly will lead to bad case law decisions as took place across the nation after the 2008 crash when homeowners tried to advance securitization-related defenses on their own without the assistance of an attorney. Force majeure and impossibility of performance issues, like securituzation, are “rocket science”, and cannot be learned by surfing the internet over a weekend.

We will continue to provide information as to the force majeure and impossibility of performance issues as more information becomes available.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

March 16, 2020

It is no secret that there will be significant downline effects from the business closings, layoffs, and loss of income as a result of the coronovirus. Governor Cuomo of New York announced today that all restaurants, bars, and casinos in New York, and probably the tri-state area (New York, New Jersey and Connecticut) will be closing at 8:00 p.m. this evening. Thousands of employees who depend on income from tips will thus be experiencing financial issues, as will the owners of, investors in, and suppliers to restaurants, bars, and casinos.

We have thus been advised to expect a spike/increase in notices of default and foreclosure threats and filings to occur within the next 30-60 days. Fortunately, the effects of the virus do not, at least at this point, appear to be as extreme as the financial meltdown of 2008, but sources advise that the worst is not over and in any event, the downline effects from even a 30-day shutdown of businesses will have multiple ripple effects on the lives of homeowners in connection with their mortgage loans.

Reuters news agency announced yesterday that the Federal Open Market Committee directed the Open Market Trading Desk to increase holdings of mortgage-backed securities by at least $200 Billion beginning today. Homeowners may thus be receiving communications that they loan has been sold and/or that their servicer is changing.

We will be emphasizing efforts to try to help homeowners negotiate a resolution to any default or threats of foreclosure early on and without lengthy litigation. We have entered into a business relationship with Dr. Andre Larabie, a professional debt negotiator with over 25 years of experience who has handled and resolved debt claims all over the world. Our team will be working towards steering any threats of foreclosure into a resolution arena (e.g. Mediation) early on to help homeowners.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

January 24, 2020

A Palm Beach County Circuit Court Judge today denied Citi’s Motion for Summary Judgment, finding that there are genuine issues of material fact as to whether the alleged “original” Note is in fact an original. Citi had filed a foreclosure action in 2009 in which it represented to the Court that the Note was lost, but later claimed to have found it. The 2009 case was dismissed, and Citi refiled in 2017. Jeff Barnes, Esq. of W.J. Barnes, P.A. represented the homeowners in the 2009 case and also represents them in the 2017 case.

An attorney from the law Firm representing Citi claimed to have obtained the “original” Note from the court file in the 2009 case. However, the Clerk’s notes state that although Citi’s filing stated that the Note was an original, it was a copy. The homeowners requested and were granted a personal inspection of the claimed “original” Note, and have filed Affidavits that the claimed “original” is not an original based on numerous factors. To date, no affidavits have been filed by Citi to contradict the homeowners’ affidavits.

The homeowners have attempted to subpoena the attorney who claims to have obtained the “original” Note from the 2009 case court file, but shortly after the homeowners filed their Affidavits, that attorney suddenly no longer worked for the law Firm, and he has been avoiding service of a deposition subpoena.

The Judge found that based on the conflicting positions of the parties and the fact that the homeowners filed Affidavits that there are genuine issues of material fact as to whether the claimed “original” is in fact and original. There are also numerous other issues concerning claims of setoff, standing, and unilateral modification of the loan documents.

The case has been set for trial for May 8, 2020.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

December 18, 2019

Jeff Barnes has successfully vacated a summary judgment in Tacoma, Washington and caused a second summary judgment motion to be denied in Oklahoma City. Both cases involve Wilmington Savings Fund Society securitizations.

In the Tacoma case, the Plaintiff filed a Motion for Summary Judgment. Shortly thereafter and just before the hearing on the motion and unknown to the homeowner at the time, the homeowner’s local counsel was suspended from the practice of law. Local counsel was to have opposed the MSJ and attended the hearing as Mr. Barnes (PHV co-counsel for the homeowner) was scheduled to be in trial in another case.

The local counsel did not request a continuance of the hearing; did not advise the Court of her suspension; and did not appear at the hearing. The Court granted the MSJ despite the homeowner’s pro se request at the hearing that it be continued as her attorney did not appear and did not advise the homeowner that she (local WA counsel) would not be appearing.

Mr. Barnes and the client only thereafter learned of the suspension of local counsel from opposing counsel in another foreclosure case where the same (suspended) local counsel was representing a homeowner. The Tacoma homeowner thereafter obtained new local WA counsel, and Mr. Barnes immediately filed Motions to vacate the summary judgment based on the exceptional circumstances of the (suspended) local WA counsel (a) failing to notify the client or the court of her suspension; (b) failing to request a continuance of the hearing so that the client could obtain new local counsel; and (c) failing to prepare any papers to oppose the MSJ prior to her suspension.

The Court granted Mr. Barnes’ Motions finding that the circumstances constituted the type of exceptional circumstances which warranted relief pursuant to CR 60(b).

Yesterday, an Oklahoma City District Court Judge denied the Plaintiff Wilmington Savings Fund Society’s second Motion for Summary Judgment. A prior MSJ had been filed and opposed by Mr. Barnes. The Plaintiff never requested a hearing on the first MSJ and simply filed a second MSJ.

The Judge who heard the MSJ granted it without permitting Mr. Barnes to present his case; made a decision not based on the law; and took the position that “your client owes somebody money, right?” Mr. Barnes filed a Motion for Reconsideration of this ruling, which was granted by the new Judge who took over the case.(See our post of October 4, 2019 below).

Yesterday, Mr. Barnes re-argued the MSJ detailing the numerous genuine issues of material fact presented by the Plaintiff itself and the controlling Oklahoma law including that related to allonges (as there is no endorsement on the Note and Wilmington started with one allonge when the case was filed and added 3 more as the case progressed, and as Oklahoma has an allonge statute). The Judge denied the MSJ and has ordered discovery to proceed.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

October 4, 2019

This morning, an Oklahoma City District Court Judge granted the homeowners’ Motion for Reconsideration of a prior grant of summary judgment in favor of Wilmington Savings Fund Society as the claimed “trustee” of a securitization trust. The case involves an original lender which filed for bankruptcy in 2009 and four claimed allonges, 3 of which were filed after the Complaint was filed and as the Plaintiff kept being substituted.

Jeff Barnes, Esq. represents the homeowners together with local Oklahoma City counsel Scott Harris, Esq. Mr. Barnes prepared the Motion for Reconsideration and argued it in person in the Oklahoma District Court this morning.

A prior Judge had granted Wilmington’s MSJ without even permitting Mr. Barnes to make his argument and without hearing any evidence as to whether Wilmington had satisfied Oklahoma’s statutory and decisional law requirements to establish an allonge as a legal form of endorsement, commenting only that “well, your client owes somebody money, right?”. The prior Judge also did not permit an examination of the alleged original Note or allonges at the prior hearing, a fact which Wilmington’s counsel admitted at this morning’s hearing.

The Judge today recognized the issues involved and thus granted rehearing, which served to preclude Wilmington from presenting the case for final adjudication today which Wilmington had requested.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

September 10, 2019

An incredible settlement was reached for husband and wife homeowners in a Federal case where an investment bank, as the claimed “trustee” of a securitization Trust, sought foreclosure. Although we cannot reveal the terms of the settlement or the identity of the homeowners or the foreclosing bank, the settlement resulted in the bank agreeing to “eat” more than 65% of its claim due in significant part to the efforts of Mr. Barnes (who represents the homeowners) in obtaining an Order from the Federal Judge which placed the bank in serious jeopardy of being able to prove its case. Mr. Barnes’ inquiries of the bank’s witness during a deposition of the witness revealed the Bank’s weaknesses in is case, which the Federal Judge found to be significant.

W.J. Barnes, P.A. has also been retained by homeowners on two separate cases where Mr. Barnes has prepared Petitions for Certiorari Review to the United States Supreme Court. Mr. Barnes completed both Petitions in the span of 30 days. The first case involves a challenge to Colorado’s “Rule 120” non-judicial foreclosure process. The second involves a determination by the Tennessee appellate courts which upheld a prohibition and preclusion on Mr. Barnes’ cross-examination of the bank’s witness, during a deficiency trial, as to the manner by which foreclosure sales were conducted and the prices obtained for the commercial properties sold where the witness testified to these matters on direct examination. The law of both Tennessee and the U.S. Supreme Court permits cross-examination of a witness even on matters which are otherwise inadmissible if the witness opens the door as to the matters on direct examination.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

July 18, 2019

This morning, a Palm Beach County, Florida Circuit Judge denied a Motion to Dismiss filed by Citibank, N.A. as trustee of a securitization trust which sought to dismiss the homeowners’ Counterclaim for Declaratory Relief sounding in unilateral modification of contract. Jeff Barnes, Esq. of W. J. Barnes, P.A. represents the homeowners. Mr. Barnes filed the Counterclaim as part of the homeowners’ Answer and Affirmative Defenses to Cit’s Complaint for Foreclosure. He also briefed the matter and argued it in open court this morning.

In denying Citi’s Motion to Dismiss, the Judge stated that the Counterclaim “smacks of factual issues” relating to the acts undertaken by Citi which resulted in the unilateral modification of the loan contract without prior notice to or consent of the homeowners..

The homeowners have alleged in the Counterclaim that in connection with their loan being the subject of a securitization that the loan was converted from a regulated, residential mortgage loan transaction to an unregulated commercial investment contract, and that numerous matters in connection therewith were never disclosed to the homeowners and thus they did not consent to these changes which modified the loan contract. The Counterclaim also alleges that the “your loan may be sold” language in the loan contract is vague and misleading, and does not properly disclose numerous material matters which, if they had been disclosed to the homeowners pre-contract, would have resulted in the homeowners not agreeing to sign the loan documents.

Mr. Barnes, who developed this theory and argument, is currently advancing it in numerous foreclosure actions across the United States. A Tennessee Judge also previously denied a Motion to Dismiss the unilateral modification of contract claim which Motion was filed by Bank of New York Mellon. The Judge found that the Complaint, filed by the homeowner, stated a cause of action for unilateral modification of contract.

Almost all states have established case law which consistently holds that a contract which is unilaterally modified without consent, without knowledge of the other party, without any “meeting of the minds”, and without any additional consideration for the modification is unenforceable.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

July 14, 2019

Mr. Barnes, in conjunction with two network attorneys, has filed a Petition in the Supreme Court of the United States which challenges Colorado Rule of Civil Procedure 120’s non-judicial foreclosure process on due process and other constitutional grounds. The Petition was filed on Friday, July 12, 2019 and has been served not only on the Respondent but also the Colorado Attorney General.

Rule 120 permits anyone who checks off boxes on a form to claim status as a “qualified holder” of the alleged debt and seek an Order Authorizing Sale (OAS). Unless the homeowner files a timely challenge before the artificial “hearing” date in the Rule 120 Motion, the home will be sold without any court hearing with an OAS being issued by the Clerk of the Court on the artificial “hearing” date.

If the homeowner files a timely challenge (which limits defenses which can be asserted), the matter proceeds to a quasi-administrative “probable cause” hearing to schedule a Trustee’s (foreclosure) sale date without the homeowner being afforded any opportunity to conduct discovery, and with the foreclosing party being given a presumption of standing. The entire process is in derogation of centuries of civil precedent (including foreclosure-law precedent in the judicial foreclosure states) which requires a party claiming to be entitled to foreclose to prove the legal ability to do so and to obtain a Final Judgment before a foreclosure sale date can be scheduled. Rule 120 reverses the process, saddling the homeowner with a “presumption of guilt” and permitting the foreclosing party to take the home without any discovery being provided and without any Final Judgment being entered.

The “remedy” to challenge an OAS is to bring a separate action under Rule 120(d) after the entry of an OAS and before the sale date, requiring the homeowner to (a) institute litigation including a Complaint and Motion for Temporary Restraining Order to try to stop the sale, which (b) requires the posting of some sort of bond and (c) conversion of any TRO to a preliminary injunction to prevent any sale for the duration of the litigation, which generally requires an evidentiary hearing. Thus, the borrower has to advance thousands of dollars up front just for the privilege of being able to make a challenge to the foreclosure without the foreclosing party having to provide discovery to support its position and without having to obtain a judgment before a sale date is set.

The case law in Colorado is that an action filed under Rule 120(d) is to be considered “de novo”, meaning that it is to be considered a fresh action and with any “findings” of a Rule 120 hearing (which is non-adversarial as there is no “Plaintiff” or “Defendant” and there is no “judgment” entered in a 120 proceeding) having no res judicata or collateral estoppel effect on the Rule 120(d) challenge. There is case law in Colorado which so holds. However, Colorado Judges have been shown not to follow this law: in fact, one Judge stated, in a 120(d) injunction hearing, that he could consider the “findings” of the Rule 120 hearing as “persuasive”, thus acting in derogation of the case law and not treating the 120(d) action as de novo as required by law.

The entire 120 process was railroaded through the Colorado legislature by a foreclosure mill attorney whose Firm was thereafter sued by the Colorado Attorney General for fraud. It has been discovered that there were hundreds of the “qualified holder” forms which were signed by his Firm without any real investigation as to the truth of the matters being “checked off” in the boxes on the form. However, Rule 120 remains on the books.

The Petition filed by Mr. Barnes and his affiliated counsel involves a case where Citibank claimed, for over 4 years, that it was the “qualified holder” of the homeowners’ loan which position continued through the 120 proceeding, the sale, the 120(d) action filed by the homeowners, the issuance of the Trustee’s Deed on Sale, and into a FED (eviction) action which remains pending. Mr. Barnes took the deposition of the representative of Citibank in the eviction proceeding, which he could not have done in the 120 proceeding (as no discovery is permitted in a 120 proceeding) and as he was precluded from doing in the 120(d) proceeding as Colorado does not permit discovery to be instituted until a civil case is at a point where an Answer is filed and as the District Judge dismissed the 120(d) case without an Answer being filed by Citibank.

Citibank’s designated representative (from Ocwen) testified under oath in the deposition taken in the FED case that Citibank never, ever, had an interest in the loan; that the loan was never in a Citibank securitization trust (as Citibank had claimed since 2014); and that all of the foreclosure filings by Citibank were erroneous. Citibank was thus able to hide its fraud for over four years, and but for Mr. Barnes’ insistence on the deposition, Citibank would have essentially stolen the homeowner’s residence based on false evidence continuously presented to the Colorado courts for over four years.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

July 3, 2019

Two opposing expert witnesses in the same case have both consistently testified that there are insurances and reserves to cover the risk of borrower defaults on loans placed into a securitization trust, and that the premiums for these insurances and reserves are paid for by the borrowers from a portion of their interest payments. The homeowner’s expert Richard Kahn, a 40-year veteran of the Wall Street securitization business, and Bank of America’s expert Laura Borrelli, a former member of the New Jersey Banking Commission, provided this consistent testimony in depositions.

This evidence directly contradicts the fallacious argument, made by “bank” and servicer foreclosure attorneys (and accepted by many Judges), that such resources are not available to a borrower as a source of defense or challenge to the amount claimed due under the loan the subject of a foreclosure as “the borrower is not a party to such contracts”. The sworn testimony demonstrates that it is the BORROWER WHO IS PAYING FOR THE INSURANCE AGAINST THE RISK OF HIS OWN DEFAULT. As such, a borrower should properly be permitted to assert a setoff-related defense and engage in discovery to ascertain information as to the specific insurances and reserves available to the securitization trust into which the borrower’s loan was placed, and the payments to the trust by any insurer as a result of claims arising from defaults for any tranche into which the borrower’s loan was placed. Mr. Kahn has also testified that one loan may serve as collateral for several tranches, so it is entirely possible that the default on one loan could result in multiple payments to the trust.

The problem at this point is undoing the damage caused by bankster lawyers who pervert and misrepresent the facts, just as they have done with the same false argument that “the borrower has no standing to challenge an assignment” which is based upon their selective use of only a portion of a ruling from the U.S. Court of Appeals for the 6th Circuit in the Livonia Properties case, which the same 6th Circuit later clarified in another decision by holding that the true ruling in Livonia Properties is that a borrower DOES have standing to challenge a putative assignment. Mr. Barnes has obtained a ruling from a Pennsylvania Federal Court which so holds, and which is the subject of a recent post.

Jeff Barnes, Esq,, www.ForeclosureDefenseNationwide.com