April 23, 2012

For a third time, an Iowa District Court has denied summary judgment to the “foreclosing Plaintiff”, which began with Wells Fargo back in 2005 but changed, in 2011, to US Bank as “trustee” of a securitized mortgage loan trust. For those who have followed this case, Wells Fargo’s second summary judgment request was denied on July 6, 2011. Jeff Barnes, Esq. and local Iowa counsel Christine Sand, Esq. represent the homeowner.

The Court’s five page Order sets forth that the Plaintiff (now US Bank as “trustee”) “fails here for two independant reasons”. First, the Plaintiff failed to show Wells Fargo’s entitlement to the instrument when the admitted loss of possession of the Note occurred, which conclusion was reached at the July 6, 2011 summary judgment hearing. The Court found that the Plaintiff simply asked the Court to reach a different conclusion now based on essentially identical facts which were presented at the prior summary judgment hearing.

Second, the Court found that the Plaintiff failed to show the nonexistence of a genuine issue of material fact as to what happened to the original Note. Plaintiff’s Affiant Erin Roesch only states that she “learned” of the loss without further explanation, with such “learning” being based on second-hand information. The Court found that the Affidavit failed to comply with Iowa Statute 554-3309 as the Affidavit was not based on peersonal knowledge and was otherwise deficient in several respects.

The matter will now proceed to trial.

Separately, the forclosure defense seminar last Friday, April 20 attracted participants from Florida, California, and Nevada, all of whom have sent extremely complimentary e-mails praising the event and stating that they acquired an enormous amount of knowledge. The next seminar is being planned to take place in south Florida in late June, with another seminar to be scheduled in California some time in July.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

April 18, 2012

The location for FDN’s Foreclosure Defense Seminar scheduled for this Friday, April 20, 2012 has changed. The seminar will be held at 455 North Camden Drive, 6th Floor, Beverly Hills, California 90210, tel.: (310) 279-5100. This is the Wells Fargo building on the corner of Camden and Little Santa Monica Boulevard.

The next seminar is being planned to take place in Boca Raton, Florida on Friday, June 29, 2012. Interested attorneys and paralegals may contact us by e-mail through the “Contact Us” link above.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

April 16, 2012

FDN’s Jeff Barnes, Esq. is currently lead appellate counsel in appeals pending in four different states:

(a) In Oregon, a homeowner has appealed a summary judgment to the Oregon Court of Appeals on the issue of whether MERS can be a “beneficiary” under the Oregon Trust Deed Act. The Oregon Trial Lawyers’ Association has filed amicus briefs in support of the homeowner’s position. The appeal has been fully briefed and was orally argued by Mr. Barnes.

(b) In Washington, a homeowner has appealed a decision of the Bankruptcy Court on the issue of whether the claimed “secured” creditor satisfied the evidentiary prerequisites necessary to overrule the homeowner/debtor’s objection to the Proof of Claim filed by the alleged “secured” creditor per the requirements of the Ninth Circuit Bankrupty Appellate Panel’s decision in the matter of In Re Veal. Mr. Barnes will be arguing the case before the 9th Circuit Bankruptcy Appellate Panel on May 16, 2012.

(c) In Tennessee, Mr. Barnes has filed the borrower’s first Brief in an appeal of the denial of a Tennessee court to permit the borrower’s newly retained counsel to file a response to the foreclosing party’s Motion for Summary Judgment. The hearing on the Motion was unilaterally accelerated by the foreclosing party’s counsel without notice to the homeowner’s newly-retained counsel. The state court judge did not grant the summary judgment until almost a week after receiving the homeowner’s newly retained counsel’s motion to file a response to the summary judgment motion, and waited over a month to deny the homeowner’s request. The Order appealed from states, in part, that if the court were to grant the relief requested that it would be “aiding and abetting” the homeowner.

(d) In Florida, Mr. Barnes will shortly be filing the homeowner’s Initial Brief in a case where a Florida state court judge granted the foreclosing party’s motion for summary judgment despite the judge’s statements during the summary judgment hearing that there appeared to be issues of fact as to the endorsement on the Note.

Mr. Barnes has also been retained on other appellate matters which are in their initial stages.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

April 10, 2012

This post is the result of my personal observations as counsel in more non-judicial foreclosure cases than I can count over the last 4+ years around the United States. With the rampant use of robo-signers, fraudulent assignments, backdated notaries, and “public records” manner of taking someone’s house away, it has become more than evident that the entire non-judicial foreclosure system needs to be scrapped in every state where it is used. The reasons are several.

First, the system is unconstitutional. What other system permits an alleged “creditor” to take away something which is titled in your name simply by filing three documents in the public records? All a foreclosing “creditor” has to do to foreclose, in a non-judicial state, is to file (1) a Notice of Default, (2) a Notice of Substitution of Trustee, and (3) a Notice of Sale, and the house is sold at public auction. To make matters worse, there is no state which requires a foreclosing party (or trustee sale company) to generate and mail or send a new sale notice if the sale in the Notice of Sale does not take place on the date in the Notice; the onus is on the homeowner to “keep in contact with” the trustee sale company as to when the “new” sale date is.

On top of that, a homeowner in a non-judicial foreclosure state has to file a lawsuit to seek a court order to stop the sale, which is a two-phased effort: a Temporary Restraining Order to seek to stop the sale temporarily, followed by a separate Motion for Preliminary Injunction to stop any sale during the pendency of the foreclosure challenge. To make matters worse, most states have a bond requirement to effectuate an injunction, and the amount is usually so large that the homeower cannot afford it. This manner of placing the burden on the homeowner to disprove the foreclosing party’s case and being labeled as “guilty until proven innocent” reeks of unconstitutionality.

Further, the non-judicial system never contemplated a creature like MERS or a hydra like securitization. The process was essentially implemented to prevent a landowner who sold someone “40 acres and a mule” from having to personally serve that person with a lawsuit to get his land back if the payment was not made. We have advanced far from that sceanario.

Due process of law requires notice and an opportunity to be heard when there is a claim made against someone. In the judicial foreclosure states, the foreclosing party is made to prove their case, and has no right to sell someone’s house unless the case progresses to a Final Judgment. The homeowner is personally served with a lawsuit (notice), and is permitted to file papers to challenge the lawsuit and be heard at trial (opportunity to be heard). The opportunity to be heard is even present in the summary judgment context, as there is a hearing and the homeowner can challenge the summary judgment request, and has ample time to do so. During this whole process, there is no “bond” requirement in order to stop any sale: the burden is on the foreclosing party to demonstrate, under the law and evidence, that it is legally entitled to foreclose.

In marked (and unconstitutional) contrast, a homeowner has to purchase the constitutional right to an opportunity to be heard in a non-judicial foreclosure state by (a) filing a lawsuit with all of its attendant fees and attending at least two injunction hearings, and (b) posting a bond. These costs and expenses are required whether the homeowner retains counsel or not. There is no other area of the law which requires someone to buy what is guaranteed by the Constitution, and forcing a homeowner to do so is not only a form of prior restraint, but is also places a monetary condition on being permitted to exercise a constitutional right.

“Mr. President, tear down that wall”. Abolish the unconstitutional non-judicial foreclosure system.

At least one state has recognized the inherent problems with fraudulent assignments, robo-signers, lack of notice etc. which are the infectious diseases in non-judicial foreclosures. Hawai’i’s Act 48 abolished non-judicial foreclosures for a year and presently requires all foreclosures to be instituted judicially, forcing the “bank” to prove that it has the legal right to foreclose. Bravo to the Aloha State. Alaska, Washington, Oregon, Nevada, California, Arizona, Montana, Colorado, Minnesota, Michigan, Georgia, North Carolina, Texas, Tennessee, and the other non-judicial states should follow Hawai’i’s leadership example.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

April 4, 2012

The next FDN Foreclosure Defense seminar is scheduled to be held in Beverly Hills, California on Friday, April 20, 2012. Topic areas will be initial case evaluation; identification of preliminary defenses; MERS; securitization issues; discovery; filing and defending dispositive motions; mediation; bankruptcy issues; and loan modification issues.

Registration forms are available by e-mailing us through the “Contact Us” link above. As always, seminar attendance is limited to attorneys and paralegals.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

April 4, 2012

A landmark decision was issued on March 29, 2012 by the U.S. District Court for the District of Hawai’i in the matter of Deutsche Bank National Trust Company as Trustee, etc. v. Williams, Civ. No. 11-00632 JMS/RLP, which dismissed DB’s Complaint for foreclosure after finding that the purported “Assignment of Mortgage” was fatally flawed and there was no demonstated compliance, by DB, with the PSA. The mortgage and Note were to Home 123, a subsidiary of the bankrupt New Century Mortgage. The court found that the January 13, 2009 assignment by Home 123 to DB as Trustee of the securitized mortgage loan trust was impossible in view of the Home 123 bankruptcy and liquidation effective April 1, 2008.

The court also highlighted the “inexplicable” arguments by DB’s counsel that discovery was required to determine the Note’s assignment where DB claimed that it “may have” received the mortgage and/or Note pursuant to a PSA in 2007. The court found that the PSA required the seller to deliver to DB the assignments of mortgage for each mortgage loan and for DB to certify receipt of a Note and Assignment of Mortgage for each loan. The court found that if DB was to receive the Note and mortgage through a 2007 PSA, then the 2009 Assignment was “a nullity”. The court also found that there was no evidence establishing which mortgages were included in the PSA.

Perhaps most important is the fact that the court distinguished its own prior decisions which did not permit a borrower to attack compliance with the PSA when a borrower sued, which cases were relied on by DB that the Williamses were not parties or beneficiaries to the assignment and thus cannot challenge them. The court stated: “Plaintiff’s argument confuses a borrower’s, as opposed to a lender’s, standing to raise affirmative claims…In this action the proverbial shoe is on the other foot — Deutsche Bank asserts affirmative claims against the Williamses seeking to enforce the Mortgage and Note, and therefore must establish its legal right (i.e. standing) to do so.”

Separately, the Florida Fourth District Court of Appeal reversed a summary judgment where there was outstanding court-ordered securitization discovery. In Osorto v. Deutsche Bank, No. 4D10-3631 (opinion filed March 28, 2012), the trial court had granted the homeowner’s Motion to Compel the PSA, agreements containing any obligation to repurchase the loan; documents attached to the PSA; documents concerning the reassignment or repurchase of the loan from the buyer or assignee back to the original seller or assignor or to any predecessor; and documents concerning the transfer or assignment of the the loan.

These cases highlight the fact that the courts are now permitting homeowners to raise defenses and seek discovery on securitization issues, which is something we have been pushing for over the last 4 and 1/2 years. We have previously advised of numerous cases we have had dismissed because of an abject refusal of a foreclosing party to provide these documents. These recent decisions go further to specifically discuss why such documents are relevant and that they are subject to being produced, and how they directly relate to standing issues.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com