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HOLD THE PRESSES! RICO IS ALIVE AND WELL — IT IS THE DEFAULT THAT IS IRRELEVANT!!!
The key element here is the Court’s determination that the lawyers were misleading the court by characterizing the homeowner’s claim as seeking damages for a false assignment. The Sixth Circuit correctly analyzed the situation and arrived at the simple conclusion: if BOA didn’t have any right to foreclose the mortgage then it doesn’t matter whether or not the homeowner defaulted.
The importance of this finding, finally, in a somewhat conservative court cannot be understated. It might well be as important as the Jesinoski decision. The reason it is so important is that this means that the primary assumption by virtually all courts in the land is turned upside down. That assumption is that if the borrower defaulted it doesn’t matter who is foreclosing. This Federal Court has arrived at THE OPPOSITE CONCLUSION that cannot be argued — which I have been saying since 2007: If the party foreclosing has no right to do so then the alleged default of the alleged borrower doesn’t matter. And the reason for THAT is that the alleged default is irrelevant. Why is it irrelevant? Simple: it is irrelevant because the party foreclosing has no legal relationship with the loan as owner, holder, servicer or anything else. This is the first major decision where the court shows its understanding that the foreclosing parties have no injury, regardless of whether the homeowner stopped paying or not.
Just like the Jesinowski decision told thousands of Judges they had it wrong on rescission, so does this decision tell thousands of Judges they have it wrong on the burden of proof and the burden of pleading. This decision comes in no small part from the fact that after getting a foreclosure judgment, on the eve of a hearing in which the capacity of the person who executed affidavits was going to be examined, BOA dismissed the action and then vanished. Lesson: If BOA suddenly dismisses the action it can only be the result of their knowledge that they had no right to foreclose in the first place.
If that is the correct conclusion, as it was in this case, the homeowner has every right to sue for wrongful foreclosure. But this case goes further: the sixth circuit says, and I agree, that such conduct qualifies for a RICO lawsuit which makes punitive damages a lot easier.
THE TIDE HAS TURNED.
Filed under: foreclosure