July 7, 2011

FDN is now entering its fourth year assisting borrowers nationwide in challenging and defending foreclosures. Our attorney network has grown from the Barnes Firm and one local counsel in the eastern United States in early 2008 to some 38 local counsel nationally in over 30 states ranging from Hawaii to New Jersey to Minnesota to Texas to Arizona and throughout the US. The website has had over 3.8 million hits to date.

Our network has successfully brought issues such as to securitization, MERS, toxic assignments, and foreclosure irregularities to the attention of courts in each of the states where we litigate, and we have had numerous foreclosures dismissed and have been awareded attorneys’ fees in others. We have forced the lenders and servicers to produce discovery which, from 2008 to 2009, they claimed to be “privileged” or “subject to privacy interests”. We have successfully established in Michigan the fatal flaw of noncompliance with the PSA resulting in summary judgment for the borrower. 

The Oregon Trial Lawyers’ Association has recently filed an Amicus Curiare Brief in support of our pending appeal in the Oregon Court of Appeals on the MERS issue, which is as yet undecided on the appellate level in Oregon. Recently, we have implemented the holding from In Re Veal to challenge Proofs of Claim and Motions for Relief From Stay in the Bankruptcy Courts, as the Veal case has, according to at least one Washington Bankruptcy Judge, “changed everything”. Our network is becoming more and more involved in Federal Bankruptcy work due to the wealth of positive decisions from the BK courts.

Which brings us to Veal. The decision is a 46-page virtual encyclopedia as to issues arising out of Article 3 and Article 9 of the Uniform Commercial Code as they relate to promissory notes and mortgage instruments (finally dispelling the myth propounded by foreclosing attorneys that a promissory note on a mortgage loan is a “negotiable instrument” under Article 3 when in fact it is not as it is tied to a security instrument, thus implicating Article 9 of the UCC and the issues of delivery and proof of delivery), and standing and real party in interest requirements for POCs and stay relief requests. The case, which reversed the Arizona Bankruptcy Court’s grant of stay relief and denial of the borrower’s objection to claim, emanates from the 9th Circuit Bankruptcy Appellate Panel, which covers the Bankruptcy Courts in Alaska, Hawaii, Washington, Oregon, California, Nevada, and Artizona.

The decision clarifies and binds those Bankruptcy trial courts listed above on issues which borrowers have been raising for years, and provides a framework for objections to POCs and challenges to Motions for Relief From Stay. We expect the impact of the decision to “travel east” to other Bankruptcy courts, with our network attorneys advancing the principles from Veal across the nation.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com