Lawyers in Nonjudicial States Should File Constitutional Challenge

I have been receiving increasingly urgent and frustrated messages from lawyers in nonjudicial cases. They are dismayed that the most basic components of proof are not required from “new” trustees on deeds of trust and “new” beneficiaries on the deed of trust, all self proclaimed and presumed valid even if the borrower denies it. Here is my answer:

I think what is missing is a plan for presentation. AND a decision about whether to go to Federal or State Court, or the California Supreme Court or even directly to the 9th Circuit if that is possible. Your case is really against the whole state of California (or whichever state the property is located) for violation of equal protection — debtors whose loans were mortgaged are treated differently from other debtors potentially including the debtors whose cars were mortgaged. Debtors who are subject to non judicial process are not given the same rights and procedures for debtors who are sued in judicial foreclosures. The normal process is if you want to allege a debt that requires a judicial judgment to enforce it, you are required to sue. That is why the decisions in and out of nonjudicial states say that due process requirements must be strictly construed. But in contested nonjudicial foreclosures, it is so loosely construed that complete strangers to the loan transaction can win the house. (See San Francisco study, Baltimore study etc.).
The argument that it is an agreement is cute but not right. Yes it is an agreement and anyone can contract with terms they agree to. But the exception is whether the contract violates law or public policy. Any agreement that violates public policy or to violate state or federal law is void. All Deeds of trust are arguably unconstitutional. But what will fly is a challenge to the nonjudicial scheme as to those cases where the borrower has made the proceeding a contested proceeding by denial of the essential elements of the nonjudicial procedure.

The “agreement” exists ONLY because of a statutory scheme that allows it and the only reason that statutory scheme exists is because of the original presumption behind such a scheme. If the foreclosure is truly uncontested, then it is hard to argue that the due process rights of the homeowner have been diminished. Thus repossession or forced sale at “auction” (another issue to be considered) might be the most expeditious way of handling it without clogging the courts.

But if the homeowner contests all aspects (including that he is a debtor and that the beneficiary is in fact the creditor) — the substitution of trustee, the naming of the beneficiary, the notice of default, the notice of sale etc. THEN the question becomes whether the “contract” (deed of trust) is valid and in particular whether the statutes allowing non judicial foreclosure are being APPLIED in an unconstitutional manner.

A non-creditor stranger who wins this procedure is allowed to place a “credit bid” at “auction” (which are really not conducted as public auctions) gets title to the property spending only the money required to pay for costs of filing.

Specifically, under normal circumstances, if the Trustee on the deed of trust was to receive a notice from the borrower that everything he has received from the wrong beneficiary has incorrect information and that the loan is not in default — the Trustee would ordinarily be required to file an interpleader action. The interpleader would say that he has a duty to both parties and there is a contested matter. The trustee asks for fees and costs because they have no vested interest in the outcome. Then the parties file pleadings about why they should get their way. But this doesn’t happen in practice. And the truth is, if the borrower is right, the substitution of trustee is invalid and the old trustee is still the trustee on the deed of trust. With that on record, how can anyone actually get clear title?

The problem in non-judicial states is that in practice (and in particular in the context of a contested loan which is subject to claims of successors or securitization) the self-declared beneficiary is not required to file substantive pleadings asking for specific relief. This would require the “beneficiary” to state that they are a beneficiary and to plead facts in support of that, attaching various exhibits, and that the loan is in default, and then they would be required to prove it. This would give them a prima facie case to prove. And the borrower would be required to answer the complaint of the beneficiary, file affirmative defenses and counterclaims. That is the very essence of due process in civil action and it should be strictly construed in foreclosures which consists of a forfeiture of the homestead — the virtual equivalent of the death penalty in civil litigation.

But in practice, the State of California doesn’t do any of that. In fact, they do the reverse. If a homeowner wishes to contest the substitution of trustee et al, the homeowner must file a complaint for TRO. And because they are the complainant, they are treated as having the burden of pleading and proof. This statutory scheme was conceived before multiple claims of successors and securitization were known. In practice it needs to be corrected by the courts until the legislature closes the loopholes that make the nonjudicial procedure unconstitutional in practice in certain types of cases.

This flips the rules of civil procedure and evidence on its head. In practice borrowers are not only required to plead that they deny the substitution of trustee et al was valid but to prove it — thus reversing the procedure that would be required in a judicial foreclosure, which is a second equal protection argument. Why are borrowers with other secured collateral (autos, e.g.) treated differently from borrowers with homes as collateral? Why are mortgagors treated differently in proceedings arising from non judicial process than in judicial process?

So the current practice requires the borrower to deny allegations that have not been filed and then prove that their denial is valid. That makes no sense and is an obvious denial of due process. The way the process works in practice is a stranger to any transaction with the borrower says “You owe me money” and then the borrower has the burden of saying “No I don’t” and then the defendant has the burden of pleading and proving that he doesn’t owe the money when he doesn’t know what the stranger is talking about. The only way the borrower can prevail on meritorious claims and defenses is by proving a negative. This is the opposite of due process.

This is why I have said since early 2008, that an action needs to be brought directly to the California Supreme Court or in Federal court or perhaps a special action to the 9th Circuit in which the application of the non judicial statutory scheme is challenged for those cases where the borrower denies the rights of substitution of trustee, denies the status of the self appointed new beneficiary and denies the default, denies the loan, etc. If the question is put to the court I feel confident that the decision will be in favor of borrowers. But any attempt to declare the non judicial scheme unconstitutional as a whole will fail.

25 Responses

  1. @A Man – Kalicki is a weird duck because the appeal is about attorney fees payable to the homeowner by Chase. Buried in that, on Pg. 12, is a statement that the trial court ruled that Chase ADMITTED to forging a false assignment and recording it, implying it was presented it as a fraud on the court. If published, this would be a handy tool for any homeowner opposing Chase, especially if WAMU was involved. This could be the veritable chink in the armor we have been waiting for. The ruling on the fees isn’t remarkable, but the offhand admission is.

    BTW, I just sent DinsFLA a template request letter / proof of service (you have to send copies of letters to affected parties) and a link to file the letter thru the internet. The time to amend the ruling has passed

  2. Here is some potential good news for Californians

    http://stopforeclosurefraud.com/2014/07/13/kalicki-vs-jp-morgan-chase-request-publication/

    Good Luck Be Strong and Courageous elexquisitor

    GOD BLESS AMERICA

  3. @ScottT – Excellent suggestion for self-inflicted correction. I would hope you personally confirm it works before sharing the results with us.

  4. Click-Click-Click-Click-Click-BANG!!

    That is an Amish drive by shooting.

    Make it a Great Day.

  5. Well here I am – needing to file writ of review to CA Supreme Ct in the next 5 days (w / 18 copies). The courts want to view my case as a non-judicial foreclosure because a NOD was recorded by a stranger to the contract, and I view my case as a slander of title because a NOD was recorded after banksters violated either fed or state law regarding responses to QWRs. Most people might question the ethics of rewarding the law-breakers and punishing the homeowner, but that didn’t faze the presiding appellate judge who denied my request for re-hearing.

    Now if I can find a way to include the recent Kalicki case indicating that the banksters do forge documents and perjure themselves in attempted grand theft, I may have a second example of such criminal activity. This demonstrates a pattern necessary for prosecution. Then again, thanks to our state attorney general, the banksters have been pre-exonerated from such prosecution due to national ‘settlements’.

  6. Holy Crap!!

    I’ve been quoted.

    I’m not sure how I feel about that.

  7. Agree with your points about their agenda to take all from us. Let’s not forget the bankrupcty law changes so you cannot get out of student debt. By the way, bankruptcy is part of the Constitution so that we did not have debtor’s prisons in US like there were in Europe.

    The taking of the property of Americans has been a goal for a long time:

    “On September 1st, 1894, we will not renew our loans under any consideration. On September 1st, we will demand our money. We will foreclose and become mortgagees in possession. We can take two-thirds of the farms west of the Mississippi as well, at our own price…Then the farmers will become tenants, as in England .” – 1891 American Bankers Association Memo, recorded as testimony in the Congressional Record, April 29th, 1913

  8. Insurance guys would sincerely be out for blood. The gloves would really-really-really come off.

    I have never filed an insurance claim, it just ain’t in my dna. Too prone to owning more houses and cars than I can manage and insurance claims are just not allowed.

    THAT being said – In theory, if one were so inclined you could attach 4 or 5 mortgage’s to a house each with it’s own insurance policy.

    Cash out. They would all have to close basically the same day.

    Torch it once the wire posts. Insurance pays off the mortgage’s.

    Bad idea. Do not try that at home but it is possible.

    MAKE IT A GREAT DAY.

  9. I like Scott Thompson’s style.

  10. it’s hard to write code from this curb….🙂

  11. What if everybody’s houses accidentally burned down at once. Who would get the fire insurance MONEY ???

  12. An attempt at fixing an HTML error….

    In the reality we find ourselves in, the only “agreement” that exists is the one whereby the Oligarchy agrees that it wants your property and then takes it. Laws? What laws? And if there are pesky laws on the books, well, laws can be rewritten to suit the tastes of the Masters of the Universe. After countless months of Sundays, believing in a different outcome legislatively, or in the courts, is to succumb to a special malady reserved for fools and former property owners.

    As Stupendous Man cogently wrote on another forum:
    This has been building for some time. The UCL’s HFAP is but another step on the same path of the government being complicit in the massive criminal conspiracy.
    UCC underwent changes in the early 90′s.
    MERS began in the mid 90′s.
    Recording statutes have been re-written.
    Repeal of Glass Steagle.
    Changes to BK laws in the mid 2000′s.
    Etc.
    Those doing these things know what they are doing. It is a bit incremental but the long term goal has always been clear to them – to own everything by making certain no one else owns anything. Stealing is acceptable. Bribing and buying our government is OK. Re-writing laws, or writing new laws, that legalize what was previously illegal is OK.

    The above quote was lifted from a website discussing the unbelievable, in your face attempt at an end run, actually, it’s more like a brazen dismantling of any rights borrowers could possibly have….and it’s all being done under the direction of many of our finest educational institutions, with funding provided by us, the taxpayers. That’s right….we’re financing our own demise. You can’t make this shit up.
    The “Home Foreclosure Procedures Act” (HFPA) is being written by Uniform Law Commission (ULC), a group of Montgomery Burns’ want-a-bees. Its goal is to put the finishing touches on the perfect crime scene, to strip each and every one of us from any legal protections we’ve enjoyed for countless generations by removing any and all impediments to their crime syndicate.
    Simply put, it removes any of the issues surrounding the Oligarchy taking whatever they want, whenever they want it, with no repercussions whatsoever. Its goal is to legitimize the rampant criminality; the shredding of notes, the multi-pledging of loans into various trusts, paving the way for the implementation of a new and improved electronic (and we all know uber-fraudulent) recording registry set up for and by the banksters, to “legally” bypass the county recording systems across the land. And last but not least, broken chains will no longer be an issue (not that they’re that problematic at present – what’s a few billion $ here and there among accomplices?) as the MOTU will simply determine who has the right to foreclosure. I’m not sure if that last feat will be pulled off by retina scan or some other high-tech, sophisticated looking wave-of-wand, but it suits our Owners very well. No longer would they have to go to the lengths needed to fool society, that of getting loser attorneys to forge and perjure themselves millions of times over in order to take all of the properties of the world.
    At some point in time, it would (or will, as there is no alternative) behoove all of us former-citizens of a once-free country to decide, en masse, to sharpen any and all farm implements and start moseying east, towards those white, marbley, historic buildings that used to belong to us citizens that now harbor fugitives and criminals, with the intent on causing bodily harm and general mayhem. And if you still harbor hope that this monster can be addressed through peaceful means….remember this….they, the Oligarchy, our Masters, can see exactly what you’re thinking writing, and speaking, and will see to it that you are arrested or worse, simply for saying what I’ve just said, for the NSA now classifies dissent as terrorism. Dissent will get you tossed into the pokey for as long as they choose. See the movie The House That I Live In to see what that’s like. Life without parole for a dime bag of crack? Or life behind bars for agreeing that it’s time to do the Great Republic Reset, as our forefathers envisioned?
    Deputy Sheriff Barney Fife, who used to be forbidden from carrying a single revolver bullet so that he wouldn’t hurt anyone, now has his hands on an automatic weapon filled with deadly hollow-point bullets while driving an armored missile launcher, dressed from head to toe in Kevlar. He went from assisting the citizenry keeping drunks off the street to Robo-Cop in one generation. “G-O-L-L-Y!” his buddy Goober would say, if in fact he could get the words out before the drone reigned hellfire down on him, leaving a hole in the ground where he once stood.
    Get off the couch, or listen to the fat lady sing….it’s a choice that will have to be made.

  13. In the reality we find ourselves in, the only “agreement” that exists is the one whereby the Oligarchy agrees that it wants your property and then takes it. Laws? What laws? And if there are pesky laws on the books, well, laws can be rewritten to suit the tastes of the Masters of the Universe. After countless months of Sundays, believing in a different outcome legislatively, or in the courts, is to succumb to a special malady reserved for fools and former property owners.

    As Stupendous Man cogently wrote on another forum:
    This has been building for some time. The UCL’s HFAP is but another step on the same path of the government being complicit in the massive criminal conspiracy.

    UCC underwent changes in the early 90′s.

    MERS began in the mid 90′s.

    Recording statutes have been re-written.

    Repeal of Glass Steagle.

    Changes to BK laws in the mid 2000′s.

    Etc.

    Those doing these things know what they are doing. It is a bit incremental but the long term goal has always been clear to them – to own everything by making certain no one else owns anything. Stealing is acceptable. Bribing and buying our government is OK. Re-writing laws, or writing new laws, that legalize what was previously illegal is OK.

    The above quote was lifted from a website discussing the unbelievable, in your face attempt at an end run, actually, it’s more like a brazen dismantling of any rights borrowers could possibly have….and it’s all being done under the direction of many of our finest educational institutions, with funding provided by us, the taxpayers. That’s right….we’re financing our own demise. You can’t make this shit up.

    The “Home Foreclosure Procedures Act”</a (HFPA) is being written by Uniform Law Commission (ULC), a group of Montgomery Burns' want-a-bees. Its goal is to put the finishing touches on the perfect crime scene, to strip each and every one of us from any legal protections we’ve enjoyed for countless generations by removing any and all impediments to their crime syndicate.

    Simply put, it removes any of the issues surrounding the Oligarchy taking whatever they want, whenever they want it, with no repercussions whatsoever. Its goal is to legitimize the rampant criminality; the shredding of notes, the multi-pledging of loans into various trusts, paving the way for the implementation of a new and improved electronic (and we all know uber-fraudulent) recording registry set up for and by the banksters, to “legally” bypass the county recording systems across the land.

    And last but not least, broken chains will no longer be an issue (not that they’re that problematic at present – what’s a few billion $ here and there among accomplices…. as the MOTU will simply determine who has the right to foreclosure. I’m not sure if that last feat will be pulled off by retina scan or some other high-tech, sophisticated looking wave-of-wand, but it suits our Owners very well. No longer would they have to go to the lengths needed to fool society, that of getting loser attorneys to forge and perjure themselves millions of times over in order to take all of the properties of the world.

    At some point in time, it would (or will, as there is no alternative) behoove all of us former-citizens of a once-free country to decide, en masse, to sharpen any and all farm implements and start moseying east, towards those white, marbley, historic buildings that used to belong to us citizens that now harbor fugitives and criminals, with the intent on causing bodily harm and general mayhem. And if you still harbor hope that this monster can be addressed through peaceful means….remember this….they, the Oligarchy, our Masters, can see exactly what we’re thinking, writing, and speaking, and will see to it that we're arrested or worse, simply for saying what I’ve just said, for the NSA now classifies dissent as terrorism. Dissent will get you tossed into the pokey for as long as they choose. See the movie The House That I Live In to see what that’s like. Life without parole for a dime bag of crack? Or life behind bars for agreeing that it’s time to do the Great Republic Reset, as our forefathers envisioned and indeed, encouraged?

    Deputy Sheriff Barney Fife, who used to be forbidden from carrying a single revolver bullet so that he wouldn’t hurt anyone, now has his hands on an automatic weapon filled with deadly hollow-points while driving an armored missile launcher, dressed from head to toe in Kevlar. He went from assisting the citizenry by keeping that poor drunk Otis off the streets to Robo-Cop in one generation. “G-O-L-L-Y!” his buddy Goober would say, if in fact he could get the words out before the drone reigned hellfire down on him, leaving a hole in the ground the size of a car, where he once stood.

    Get off the couch, or listen to the fat lady sing….it’s a choice that will have to be made. Or it will be made for you.

  14. And I completely agree with Neil’s point :

    “California (or whichever state the property is located) for violation of equal protection — debtors whose loans were mortgaged are treated ”
    Consumers were hung out to dry.

  15. Lawyers should jam a GLOCK into the mouths of these completely-retarded-to-the-bone foreclosure firms.

    That is the ONLY thing they will understand.

    I can promise you these spun-out-goon-special-ed-firms will continue with this modus operandi until they smell gas @ 30,000 feet.

    Oh they demand war, on their terms, their way so they can win otherwise it hurts their feelings!

    YES THEY REALLY ARE THAT RETARDED I COULD NOT BELIEVE EITHER.

    Go light their vile asses up Israeli style – it will make them feel special.

    Make it a Great Day.

  16. Sadly I had to get the 1099a IRS document issued by the servicer ( debt collector) calling themselves the lender being an outright lie. I was illegally dispossessed of my home / note right to possession has a 10 yr SOL folks.

  17. Hi Mr Garfield, Im requesting a refund for the litigation helps for lay people, I ordered the layman’s letters from your store in the beginning of may and have yet to receive it.I have ask Danielle for a refund on several occasions , please only send me what I ordered, it’s not fair to make me accept a substitute of info that I don’t want! You have called me a valued customer, please treat me as such!

  18. Why would a property owner have to file a law suit to stop or have returned a property that has no financial interest in the properties? It seem the States have some understanding of securities in order to have their chain of owner records correct.

    Land Recorders should at least know that a 95% of all FHA, VA & USDA loans are placed into a Ginnie Mae Mortgage Backed Securities, and this is accomplish as the Notes which the security instrument (mortgage, deed of trust, security deed) is created from, is signed in blank and relinquished in 100% of the cases.

    So here we are knowing the fact of how the Ginnie MBS polling works and is publish by them, yet here come a Wells Fargo or BOA somehow being assigned a security instrument!

    The problem is very simply that a copy of the Note and every time it changes hand is not recorded and should be, but it not for foolery of what taking place now. Recent ruling against MERS will bring down the frauds that have taken place!

  19. The big difference here is that in judicial states they have to file a lawsuit that the homeowner can answer. In non judicial states, the homeowner has to create a lawsuit/complaint and file it. Then, the other side (servicer/bankster) has to file an answer–all inside a lawsuit.

  20. @ Stupendous Man ,

    YES , most people walk away in judicial states ,, but in non-judicial states it’s not a matter of walking away .. they really have no chance and as Neil outlines this should be sent up to the 9th Circus or the Calif Supremes as it breaks the system. There are 50 states and we need to give them 50 fronts to fight on.

  21. There is a bit of a myth that non-judicial states have it much worse than judicial. While there is some truth to the myth it cannot be presumed to be the whole, or entire, truth.

    95% of homeowners in judicial foreclosure states fail to file an answer to the complaint. It becomes a simple matter of Plaintiff’s filing a motion for default, or summary, or both, and obtaining favorable judgment. In those cases there is no scrutiny whatsoever applied to Plaintiff’s allegations.

    In cases in which a homeowner does file an answer many courts are reticent to apply the rules of procedure, and evidence, properly and fairly. There is a bit more time involved, and in “going through the motions” there is an appearance of due process, but the result is usually the same. A homeowner is left having to file an appeal. This is costly and time consuming. The home can be sold, and eviction proceedings undertaken such that the homeowner is dispossessed during the pendency of the appeal.

    An appearance, or mirage, of due process isn’t much better (if any) than non-judicial foreclosure. Or, in other terms, we’ve all got it bad folks.

  22. Neil…..you are a true soldier with the courage of The shepherd boy David who stood against Goliath!!

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