October 11, 2010

We celebrate Columbus Day today today for his finding a new world. We also today celebrate today the continuing admissions and relevations being made by various banks and servicers (Bank of America, GMAC/Ally Bank, and JPMorgan Chase) that many of the foreclosures which they “processed” may have been legally infirm due to, among other things, “document irregularities”, which is a sugar-coated way of saying that they essentially filed fraudulent documents to foreclose. We here at FDN are going into our third straight year of seeking, in discovery, the alleged authority of the various “lenders”, servicers, “trustee” banks, and “successors by merger” entities to foreclose, and more and more courts are finally starting to seriously question this authority instead of blindly accepting whatever the foreclosing party alleges or files.

The real advantage of these admissions for the borrowers is that they may be construed to constitute “newly discovered evidence” in the context of seeking to set aside or “unwind” a foreclosure which has already taken place. Obviously, the borrower could not have discovered something which the banks, servicers, etc. have just now revealed, especially when these foreclosing parties previously took the position that the foreclosure documents were legitimate. This newly discovered evidence, which has ONLY been recently made available by the foreclosing parties themselves, should be sufficient to mount a challenge against a foreclosure which has already been “processed” so that the borrower can seek to unwind it. Further, as the banks, servicers, etc. are essentially admitting that they engaged in fraud by nondisclosure of the legal infirmities in their documents, a fraud by omission claim could be advanced for the purposes of the borrower’s seeking damages remedies against the offending foreclosing parties.

Since we posted our prior article on this website as to the real upshot of these recent revelations, we have been receiving hundreds of inquiries from borrower victims of foreclosures which went otherwise unchallenged or incompletely defended, which is one of the reasons which our network is expanding at a rapid rate. What will really be interesting is the deposition testimony and other matters which will be revealed in formal discovery so that we may understand the real magnitude of the fraud and continue to seek justice for borrower victims of the illegal foreclosures.

Jeff Barnes, Esq.,