I don’t know how I missed this but 4closurefraud.com compiled a list of cases in which the banks lost. (See below) The basis on which they lost was simply the finding that the alleged Trust or Plaintiff did not own the debt, note or mortgage. This is the same as the San Francisco study that found that at least 65% of all foreclosures were initiated by “strangers to the transaction.”
The issue confronting lawyers is that at trial, the Judges are assuming and presuming things that are not true. And the facts are counter-intuitive, leaving the lawyer with no answer to the question “Well if the originator didn’t fund the loan, who did?” and the corollary question “Well if the Trust doesn’t own the loan, who does?”
Such questions shift the burden of proof to the one party who knows nothing — the homeowner. It is much more difficult to fight with opposing counsel and the Judge at trial than a major aggressive push in discovery. Judges frequently start out leaning towards the bank, but once it is pointed out that discovery is a much broader process than trial, many lawyers are punching through the fog. Arguments about presumptions during discovery should be turned on their head — that all such presumptions are rebuttable.
And one last point — for nearly ten years I have been cautioning lawyers and homeowners not to admit things they know nothing about. None of you actually have the facts and none of you has the requisite knowledge (except in rare cases) about the money trial. People complain about “bad” decisions and accuse the court of bias. But in most cases where the borrower loses it is because facts that are untrue or unproven are accepted as true.
If you look closely at rulings where an opinion has been published, notice that the ruling is based upon facts that were admitted by the homeowner that never should have been admitted. This is a common error. The truth is that the homeowner doesn’t know the money trail but they assume that there is a money trail because to assume otherwise leaves the court in a fog. Once you assume that the borrower really did get a loan from the originator and once you assume that the party initiating the foreclosure purchased the loan, the paperwork arguments lose virtually all of their strength.
So unless you actually know the money trail and unless you know that it supports the paper trail, don’t admit it. Here is a brief checklist of things that should not be admitted unless you know they are in fact true:
- The originator was the lender.
- The loan was funded by the originator
- The note and mortgage were properly released from the closing by the closing agent
- The mortgage or deed of trust was properly recorded (NOT if it was void, which is uttering a false instrument)
- The note and mortgage are valid documents arising from a consummated loan contract between the homeowner and the originator.
- The originator owned the debt, note or mortgage.
- An assignment from the originator gave rise to rights to enforce the note and mortgage.
- Someone purchased the debt, the loan contract, the note and mortgage by paying money to the originator (in almost all cases this is not true).
- The property is encumbered by a valid security instrument (the mortgage or deed of trust)
- The substitution of trustee was valid
- The notice of default was valid (not if the issuer of the notice was an unauthroized servicer)
- The party issuing the substitution of trustee and/or notice of default was a proper beneficiary under a deed of trust
- In the forced sale of the property, the successful bidder was a real creditor who could submit a credit bid instead of cash.
- The REMIC Trust exists
- The REMIC Trust ever existed in the real world — i.e., that it conducted any business, maintained a bank account or otherwise purchased assets that were managed by the trustee
- The REMIC Trust owns the debt, note, loan contract or mortgage
- The servicer is authorized (simple logic: if the loan is NOT in the Trust then the servicer CAN’T be authorized by a Trustee of Trust that doesn’t own the loan.
- The Trustee on the Deed of Trust (nonjudicial states) is the substituted Trustee (in reality if the substitution of trustee was void or invalid then the original Trustee is still the Trustee on the deed of Trust)
- The named Trustee is the Trustee or authorized agent for the certificate holders of the REMIC Trust
- The payment history submitted by the latest servicer is correct (go back and look at prior payment histories from the servicers’ predecessors)