For assistance with presenting a case for wrongful foreclosure, please call 520-405-1688, customer service, who will put you in touch with an attorney in the states of Florida, California, Ohio, and Nevada. (NOTE: Chapter 11 may be easier than you think).
CHAMPERTY AND MAINTENANCE ARISE AS WE PREDICTED HERE YEARS AGO.
Editor’s Analysis: For those of you who have followed this blog for years, it will come as no surprise that local governments are suing the Banks for back taxes, failure to pay recording fees through the private recording system as MERS et al, and that Homeowner, Condominium and Cooperative Associations have figured out that their lien might have priority over the mortgages that are recorded, but not perfected. The good news is that this pits institution against institution, where the idea of a “free house” for borrowers doesn’t poison the waters and the Judges really must rule on evidence instead of proffers of evidence that are outright lies.
In Arizona alone the potential collection of back and unpaid taxes, fees, costs, penalties etc. comes to more than $3 Billion — that is their figure not mine. I estimated it as closer to $10 billion. The legislature wanted to move forward in enabling the AG to collect thees fees which would have completely reversed their budget from deficit to surplus.
At one time I was representing several hundred condominium and cooperative associations. I enforced their liens with foreclosure so I’m no stranger to being on the other side of this. The liens were valid because there was a declaration recorded that was specifically referred to in the deed and title insurance. The issue was did the homeowner pay or not pay. Any contest based upon mismanagement of the association was bifurcated or dismissed to be heard another day in another courtroom.
I am told that there are numerous “businesses” that are popping up buying the HOA lien and the filing to foreclose — with considerable success, because THEY unlike the homeowners are attacking the instruments of record as imperfect liens, attacking the note and supposed assignments as no evidence of any real transaction and demanding discovery and proof of payment.
So we now have hundreds of lawsuits filed by State, County and City governments for fees and transactions that were neither real nor recorded. In Florida now where I am licensed we are taking on associations as clients — but only for the actions to quiet title, nullification of the mortgage instrument and other claims related to securitization. For those HOAs where the issue is non-payment, we are happy to take them on as clients but there is no reason to switch attorneys. But usually beyond the issue of non-payment is whether the deed on foreclosure for the now abandoned property (in whole or in part) is the priority of the lien. Once the forecloser’s claim loses priority, it will established that the mortgages were not real and the debt is not secured. Quiet title does not extinguish the debt but it sure does clear out invalid lienholders who cannot prove their claim with proof of payment for the origination or purchase of the loan.
Hence the action by the HOA invalidates the foreclosure and possibly the debt as well. That is as it should be since the underwriting banks showed one set of a documents to the investor/lenders and another set of documents to the homeowner/borrower. There was no meeting of the minds. In both cases the fake documents falsified the use of funds and title creating a shell game that is still corrupting our title systems across the country.
Thus the action by the HOA, properly done, allows the homeowner to stay and pay their maintenance fees and special assessments without worrying about a mortgage foreclosure from a party claiming to be the creditor. Worst case scenario is that the supposed forecloser steps into the shoes of a lienholder that is junior to the HOA and other liens as of the date of judgment on the quiet title action. Of course if the bank cougohs up the money then there is no action for the HOA to take. The Banks know that everything stated here is true, so in most cases, except for truly abandoned property, the Bank is going to pay the lien, the attorneys fees and court costs.
This is why so many people are starting businesses that buy up the liens and then foreclose on the banks. The deal they make with the HOA is usually at some sort of discount, whereas the Bank will get little or no discount from the business that took over the lien. There is a risk here of the issue of Champerty and Maintenance on both sides of litigation here. If the HOA sues directly and at their own expense, they are not susceptible to claims of Champerty and maintenance. But the agreement to transfer the lien to a stranger to the transaction gives rise to those claims especially if there is a sharing of the outcome.
This is why I wrote a long time ago several article on Champerty and maintenance. These nominees are commencing foreclosure proceedings on behalf of unidentified people who money is at risk and the banks and other entities that are doing this are funding the litigation and expenses of foreclosure, regardless of whether it is in a judicial or non-judicial state. If there is sharing of the proceeds in one form or another then it is most likely Champerty and maintenance. A simple cause of action alleging a short plain statement of ultimate facts upon which relief could be granted is enough to get passed a motion to dismiss and it is highly likely to get into discovery given the nature of the cause of action. Seeing the actual trail of money, who paid whom, how and when will essentially eviscerate the forecloser’s “mortgage”, Note”, assignment and “substitution of “trustee.”
It is classic Champerty and Maintenance that if the principal to whom the money is owed by the borrower has decided NOT to pursue the claim that an interloper will be almost automatically be branded as a party whose interest results strictly from Champerty and maintenance. It is a very old doctrine but I have canvassed several states and it is still very much on the books and still used.
Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: CHAMPERTY AND MAINTENANCE, condominium association, cooperative association, debt, HOA, homeowner association, LIEN PRIORITY, Mortgage, note, NULLIFICATION OF INSTRUMENT, quiet title |