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.,


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.,


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,,