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.,