June 20, 2012

A Key West, Florida Circuit Judge has vacated a final judgment of foreclosure entered after a trial where the homeowner was not present and could not be present for the trial due to his religious beliefs and practices. The homeowner had filed a motion to continue the trial, supported by an affidavit, based on the fact that the trial was scheduled during one of the highest holy days in his religion (a shabbos day during Passover). The court denied the motion and conducted the trial without the homeowner being present.

The homeowner filed a Motion to Vacate the final judgment on the grounds that holding the trial on a high religious holiday where the homeowner could not be present for the trial, and where the court had express notice of this before the trial, violated Florida’s Religious Freedom Restoration Act of 1998, Fla. Stat. sec. 761.03. The statute expressly provides that the government shall not substantially burden a person’s exercise of religion even if the burden results from a rule of general applicability, and that the “exercise of religion” is an act or refusal to act that is substantially motivated by a religious belief whether or not the religious exercise is compulsory or central to a larger system of religious belief.

The Motion argued that the court is an arm of the government, and that the rule of general applicability (setting cases for trial) was applied in a manner which burdened the homeowner’s exerecise of his religion (being forced to attend a trial on a high religious holiday). The court granted the homeowner’s Motion, vacated the Final Judgment, and the sale is in the process of being voided. The homeowner is represented by Jeff Barnes, Esq.

Foreclosures in Florida are on the rise both in number and in stages of progress now that several law Firms have taken over many of the cases left in the lurch as a result of the David J. Stern debacle, which left over 100,000 Florida foreclosures “up in the air” when the Stern Firm ceased operations. Mr. Barnes’ Firm has been recently retained in more than a dozen new Florida foreclosure cases, and we are receiving inquiries from Florida homeowners daily.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

June 18, 2012

The past two weeks have seen positive strides in foreclosure defense, especially the compelling of securitization discovery and permitting borrower attacks on foreclosures.

A Florida Judge denied summary judgment in Duval County, Florida where the corporate borrower had been representing itself and had filed responsive pleadings late. The foreclosing party sought a court default and summary judgment, but the Court denied both Motions and granted the Motion filed by Jeff Barnes, Esq. (who represents the borrower) to vacate any default and to serve an Answer to the Complaint. Another Judge in Osceola County, Florida compelled discovery sought by Mr. Barnes in another securitization case over the objection of the foreclosing Plaintiff.

In a case pending in New Jersey where the Court had compelled the foreclosing Plaintiff to produce securitization discovery four (4) separate times, the Court dismissed the action after the subject discovery was not produced. The foreclosing Plaintiff has sought to reinstate the case, arguing with the Judge that it should not be compelled to produce the discovery that the Court has already ordered four (4) separate times. The Court has ordered that the discovery, including depositions, be completed by a date certain or the case will wind up being the first foreclosure case in New Jersey which is dismissed with prejudice for repeated discovery violations. The borrowers are represented by Jeff Barnes, Esq. and local NJ counsel Daniel Schmutter, Esq.

Several of the “banks” are utilizing removal of state court cases to Federal court in an apparent effort to stave off discovery obligations incident to the borrower’s state court discovery. These “banks” are just delaying the inevitable, especially in light of a recent decision from the New Hampshire Federal Court which held that if a purported assignment does not comply with the PSA, there was no assignment. In distinguishing cases which do not permit an “attack” on an assignment, the Court held that if there is no assignment in compliance with the (securitized trust) documents, then no assignment occurred, and as such the argument is not that there is an attack on an assignment, but that no assignment took place at all.

A Florida appellate court has also reversed summary judgment where court-ordered securitization discovery, including all documents referred to or attached to the PSA, were not produced.

We thank our readers for providing us with these new decisions.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

June 5, 2012

It is common knowledge that the American Home Mortgage group of companies files for Bankruptcy in 2007. The proceeding continues to this day. During the course of the bankruptcy, certain court Orders have been entered permitting the destruction of duplicate documents and documents relating to mortgage loans which did not close or were abandoned.

The Plan Trust has now filed a Motion seeking to abandon certain original documents being held in Iron Mountain document storage facilities across the United States. Prior to filing bankruptcy, the American Home Mortgage companies contracted with Iron Mountain Information Management, Inc. for document and data storage. The account numbered 04421.0M070K (the “M070K asccount”) was used for hard copy document storage utilized by the servicing business, American Home Mortgage Servicing, Inc. (AHMSI), which servicing business was sold out of the bankruptcy early on.

Iron Mountain has now demanded the payment of $473,527.57 in expenses relating to the M070K account, and AHMSI has filed a request for payment of “alleged administrative expenses” in the AHM Bankruptcy seeking to be indemnified as to any expenses it may have to pay Iron Mountain relating to the M070K account. AHMSI has taken the position that certain of the documents stored under the M070K account belong to the AMH group of Debtors, and thus AHMSI is not responsible for Iron Mountain’s bill.

The Plan Trustee has taken the position that the documents are AHMSI’s property pursuant to the Sale Approval Order which approved the Asset Purchase Agreement whereby the AHM Debtors sold AHMSI all of the books and records that were being stored in connection with the sale of AHMSI out of the Bankruptcy Estate. The Plan Trustee has taken the position that the documents being stored under the M070K account consist of loan applications and other documents relating to the servicing business. As AHM shut down its loan origination business 5 years ago, sold AHMSI four years ago, and liquidated most of its other assets prior to the effective date of the Chapter 11 Plan, the Plan Trustee has no need for the Iron Mountain documents for the remaining Chapter 11 process. The Plan Trustee thus seeks an Order permitting it to abandon the Iron Mountain documents to the extent that the Plan Trust has any interest therein.

As we all know, AHMSI continues to pursue foreclosures throughout the United States. Until now, certain original documents relating to the mortgage loans the subject of these foreclosures have been maintained as a function of the AHM Bankruptcy. Now, however, AHMSI is trying to saddle the AHM Bankruptcy Estate with the cost of maintaining these documents, and the Chapter 11 Plan Trustee wants no part of that burden. As such, if the documents are abandoned, and no one pays Iron Mountain’s bill, the documents could very well wind up being destroyed.

Anyone who believes that their original documents may be the subject of this Motion may thus want to contact counsel for the Plan Trustee, which is the Firm of Young, Conaway, Stargett, & Taylor, LLP, 1000 North King Street, Wilmington, Delaware 19801, telephone (302) 571-6600. The three attorneys from YCST listed on the Plan Trust’s Motion are Sean Beach, Esq., Margaret Greecher, Esq., and Patrick Jackson, Esq. Co-counsel for the Plan Trustee is the Firm of Hahn & Hessen, LLP, 488 Madison Avenue, New York, New York 10022, telephone (212) 478-7200. The three attorneys from H&H listed on the Motion are Mark Indelicato, Esq., Edward Schnitzer, Esq., and Joseph Orbach, Esq.

This information is public, and was provided to Mr. Barnes as he remains on the service list for the AHM Bankruptcy due to his prior involvement in the case relating to certain homeowners/borrowers.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

May 29, 2012

First, we hope that everyone had a happy and safe holiday weekend.

On Wednesday, May 24, 2012, Jeff Barnes, Esq. stopped a foreclosure sale in a case in Key West, Florida which was scheduled to occur the next morning. Although the foreclosing Plaintiff had, allegedly, tendered the original mortgage and Note to the court at a prior summary judgment hearing, there was no record of the actual documents being in the court file. Florida law, including recent case law, requires that the actual documents be in the court file at the time of a summary judgment hearing and foreclosure judgment. The Chief Judge cancelled the sale in view of the documents not being in the court file and thus not part of the record at the time of the foreclosure.

Separately, the United States District Court for the District of New Hampshire has denied Wells Fargo’s Motion to Dismiss a homeowner’s complaint in the matter of Drouin v. American Home Mortgage Servicing, Wells Fargo Bank, and Option One Mortgage Corporation, Case No. 11-cv-596-JL (Order issued May 18, 2012). The case involved a simlar factual situation as another being litigated by Jeff Barnes, Esq. in another state, and involving an alleged assignment by Sand Canyon (the “changed” name of Option One) at a time Option One nor Sand Canyon did not own any mortgages.

In Drouin, the court found that Option One changed its name to Sand Canyon Corporation in early 2008, and by virtue of an affidavit of Sand Canyon’s President filed in another matter in 2009, Sand Canyon did not own any residential real estate mortgages as of that time. Notwithstanding this admission under oath, there was a purported “assignment” of the homeowner’s mortgage from Sand Canyon to Wells Fargo on March 24, 2011.

The court held that the homeowners had standing to attack the alleged transfer as there was not and could not have been any assignment as a matter of fact. The court held that the challege was not an attack on the assignment itself, but that no assignment occurred, concluding that the homeowners had standing to pursue their theory that Sand Canyon did not hold their mortgage and thus could not have assigned it to Wells Fargo. The court also found that because of this, Wells Fargo’s argument that the homeowners could not assert a cause of action to enjoin a foreclosure was “easily rejected.”

If Wells Fargo in fact maintained the position that it was assigned the mortgage by Sand Canyon, this could possibly be construed as a fraud upon the court, as the affidavit of Sand Canyon’s President and the matters therein, which were sworn to under oath, are matters of public knowledge which should have been known to Wells Fargo at all times material both before and during the 2011 foreclosure case.

We thank one of our dedicated readers for bringing this important opinion to us.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com 

May 23, 2012

Mr. Barnes’ offices will be closed from Friday, May 25, 2012 through and including Monday, May 28, 2012 in connection with the Memorial Day weekend. Mr. Barnes will be out of town Thursday, May 24, 2012 on other business. We wish everyone a safe and happy holiday weekend.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

May 23, 2012

FDN is pleased to announce the addition of Edward Levy, Esq. and the Atlas Law Firm of Denver, Colorado to our nationwide attorney network. Mr. Levy is a former CPA and current bankruptcy litigator who has associated with W. J. Barnes, P.A. and Jeff Barnes, Esq. to defend foreclosure-related matters in bankruptcy cases in Colorado, including Motions for Relief From Stay and Proofs of Claim filed by servicers, securitized mortgage loan trustees, and other parties attempting to foreclose. Mr. Levy’s is the 43rd law Firm to become associated with the FDN network.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

May 17, 2012

FDN’s Jeff Barnes, Esq. has been recently retained to file appeals in cases in Oregon and Minnesota, and will also be appellate co-counsel in an appeal in Montana. The appeals are of adverse summary judgment rulings in cases involving MERS and securitization issues. Mr. Barnes is currently lead appellate counsel on appeals pending in Tennessee, Oregon, and Florida.

Yesterday, Mr. Barnes argued an appeal before the (Federal) 9th Circuit Bankruptcy Appellate Panel on the issue of whether the Bankruptcy Judge erred in failing to sustain the Debtor/homeowner’s objection to an Amended Proof of Claim (POC) filed by US Bank as the claimed Trustee of a securitized mortgage loan trust. The original POC had been filed by Wells Fargo as servicer. The case involves a POC which is grounded upon a “Lost Note Affidavit” which specifically states, under oath, that the transfer is based on a Mortgage Loan Sale Agreement (MLSA). However, the MLSA was never produced and never entered into evidence despite USBank being given multiple opportunities to do so.

The Lost Note Affidavit submitted by USB purports to justify an initial transfer of the mortgage loan in late May of 2006 to one of the interim transferees pursuant to the MLSA which is dated March 3, 2002. Significantly, the Order appealed from recites that the loan was never assigned. There was also no evidence that the transfer to USB complied with the Mortgage Loan Conveyance Provisions of the PSA (for the securitized mortgage loan trust). 

The Bankruptcy Judge sustained USBank’s Amended Proof of Claim absent (a) any evidence of assignment and (b) absent the MLSA (upon which the original transfer was based) being entered into evidence. As to the PSA issue, the Bankruptcy Judge’s position was that the intent of the PSA was to transfer the loan, so it must have taken place.

Mr. Barnes has also just been recently retained in cases in Oaklahoma and New Mexico, and more inquiries are being received from those states.   

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

May 15, 2012

FDN’s summer foreclosure defense seminar, which will be held in Boca Raton, Florida, is being rescheduled. The seminar had been planned for June 29. Due to a professional conflict which has arisen, the seminar is being rescheduled to a later date, which we are intending to be in late July or sometime in August. The firm date will be posted on this website once it is chosen.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

May 11, 2012

A Morris County, New Jersey Judge has today dismissed a foreclosure filed by US Bank as the claimed “trustee” of a securitized mortgage loan trust for its repeated failure to comply with Court Management Orders compelling securitization discovery, including producing a witness of US Bank as Trustee for deposition. The Court has entered four (4) Management Orders compelling the discovery, all of which were not complied with by US Bank. The Order of Dismissal recites the deficiencies of US Bank as to the subject discovery.

The homeowners are represented by Jeff Barnes, Esq. and local NJ counsel Dan Schmutter, Esq. Today’s dismissal is yet another in a string of dismissals which have been entered on Motion of Mr. Barnes and his local counsel for the foreclosing Plaintiff’s refusal to comply with discovery. Previous dismissals have been entered in Atlantic, Glouster, and Monmouth counties, with Morris County being added today.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

May 7, 2012

The nonsense and outright lies perpetrated by the banks just keeps getting more and more unbelieveable. This latest example is laughable out loud.

Numerous homeowners around the United States have been sending us correspondence from Chase Home Finance (which merged into JPMorgan Chase some time ago) and attorneys representing Chase stating that “Chase is committed to helping homeowners remain in their homes”. These letters have been sent in connection with threatened foreclosure proceedings, and with information as to (purported) loan modification through HUD.

The result is disturbingly the same: the “offer” from Chase is a loan “modification” where the new payment is larger than the monthly payment sought to be reduced by modification. As Chase has actual knowledge that the homeowner cannot even make the current monthly payment, Chase is obviously intentionally setting up the homeowner for a loan modification “offer” which Chase knows must be declined as economically impossible.

To add insult to the injury, the Chase loan mod program is known as “Once and Done”, meaning that if a loan mod offer is rejected that Chase will not make any further loan modification efforts, and will commence foreclosure proceedings.

Chase also has a record, as do other banks, of claiming that a trial mod payment was “not received timely” resulting in a default being declared when in fact the homeowner has proof that the payment was received timely if not before the due date. Again, more evidence of Chase’s intentional manufacturing of fraudulent defaults for the purpose of furthering fraudulent foreclosures.

So there you have it: if you don’t agree to pay Chase more money which Chase knows up front that you cannot afford, there is no loan mod, and you proceed to foreclosure. Obviously this is Chase’s intended result, purposefully structured so that it can tell the Government that “well, we attempted to work with the homeowner, but the homeowner rejected our offer…”, knowing full well that the alleged “modification” was not made in good faith and knowing what the only consequence will be.

More “good public relations” from Chase and Mr. Dimon.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com