Justice Rubin correctly anticipates the birth of a new black market industry — stealing debts as part of a larger scheme of stealing money.
In the context of an industry already using dubious tactics to collect on debts they have acquired, the prevailing notions in the minds of most judges allows for the question “Why buy the debts when you can just steal them?”
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THE FOLLOWING ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
Hat tip to Eric Mains
As a result of my articles on legal presumptions and the havoc they are causing in creating faulty precedent instead of following precedent, Eric Mains found the above Case decision in California. I agree with Eric. The dissent neatly explains why the assumptions and presumptions currently in use are not being applied properly and are resulting in a body of law that has opened the door to unlimited moral hazard. Justice Rubin correctly anticipates the birth of a new black market industry — stealing debts as part of a larger scheme of stealing money.
Indeed there is ample evidence of the spread of imposters who are, under existing law, issuing self serving proclamations that they own consumer debts. Consumers, having no information about what and who manages their debts, will often concede the debt and concede that the debt is owed to the party who proclaimed ownership. And it all comes from a notion that never should have been allowed into American jurisprudence in the first place, to wit: a debtor may not challenge a party who claims to be his/her creditor. Discovery need not be allowed and proof need not be offered as to the veracity of the claims by “strangers” to the debt.
The underlying assumption is that since the debtor owes someone, ANYONE can enforce it. The theory advanced by courts is that the debtor/borrower/consumer has no standing to challenge the self proclamation. The theory advanced by courts is based upon the assumption that even if the debtor is right, it makes no difference to the debtor. The harm, if any, is to someone else who is the real creditor. The remedy can be worked out between the claimant and the real creditor.
The underlying assumption is incredibly based upon the assumption and presumption that the claimants are still acting in good faith and not acting as thieves. This is odd in view of the dozens of cases in which the self proclaimed participants in the securitization of debt have been shown to have committed forgery, fabrication, back-dating, robo-signing in what appears to be a majority of alleged loans to alleged borrowers that are subject to what now is obviously false claims of securitization. None of it is true.
This underlying assumption of good faith is contrary to the facts. It is wrong. And what Justice Rubin seeks to present is simply that any such claimant should prove their status and not be presumed to be a creditor just because they said so. As he puts it, either they are the creditor or they are not. It is an easy task and always has been an easy task to prove ownership of a debt. The fact that the banks have fought so hard to get courts to accept their assertions of ownership and authority just because the bank said so, should in and of itself have raised multiple red flags. Justice Rubin conceeds that, ” I suspect that creditor-beneficiaries and their trustees do not want to be forced to prove they own a homeowner’s debt and have authority to foreclose because it is now well understood that in too many cases they can’t prove their ownership and authority. I am not prejudging the facts in this case, for that is why we have discovery and a trial.”
And the other underlying assumption is that there is no harm to the debtor who is obviously faced with multiple liability on the same debt, an inability to seek reinstatement, modification or settlement with the real creditor, and a bar to the legitimate defenses in state court, Federal Court and bankruptcy court. The courts routinely order the false creditor and the debtor into mediation. The debtor is forced to either reject a settlement with an unauthorized party and thus lose his or her home or to execute modification agreements that are not worth the paper on which they are written.
Trial courts across the land are still statistically more likely than not to adopt this pattern of abuse of due process. Courts are created to provide a fair forum in which the parties can be heard without presumptions of guilt of those accused of criminal or civil acts that cause harm to society or specific victims. The burden has always been on the accuser or the claimant — until now. For the past 10 years the court system has evaded, avoided, and ignored the reality expressed by claims of the debtor, the proof in court that the self proclaimed enforcing parties were unauthorized strangers — all because the judges started off with the wrong premise when there should have been no premise at all.
The necessity perceived by court administrators was also an incorrect presumption. Had the judges continued processing foreclosures the way they always did it would have resulted in virtually all of the foreclosures being denied. Or, to be fair, it would have resulted in all of the foreclosures being granted because there was nothing wrong. All evidence clearly shows a pattern of conduct of illegal, fraudulent activities in virtually all foreclosures over the past 10 years.
Had the court administrators merely kept to their current systems one of two results would have been clear: (1) the claimants were perpetrating a fraud or (2) the homeowners were putting up false defenses for the purposes of delay. Either way, there would not have been a glut of foreclosure litigation. Either it would have been obvious that the enforcement claims were bogus thus eliminating the claims, or the defenses would have been revealed as frivolous, thus eliminating the defenses.
Instead the defenses of homeowners were routinely ignored and their lawyers were reprimanded and threatened by judges who believed that their presumptions were proper and that the lawyers were merely hairsplitting to “get a free house.” Experience now shows that these defenses are being upheld in an increasing number of cases and that judges following the the rule of accepting self serving statements from banks and servicers are now being reversed in an increasing number of cases.”
The conclusion to be drawn from these decisions has yet to be enunciated by a majority on the bench with the clarity expressed in Justice Rubin’s dissent. He admits that, ” The reason I point out the omission is to highlight the difficulty of learning from tangled paper trails “who, what, where, when, and how” in mortgage cases involving lender documents that are sometimes – take your pick – incomplete, lost, inaccurate, post-dated, altered, robosigned, or created after the fact….” It doesn’t have to be this difficult. Again, like the Judge opines, ” Chase either had the authority to act when it submitted a credit bid to foreclose on appellants’ home despite having sold appellants’ promissory note to Freddie Mac – and has the evidence to prove it – or it did not. (See Civ. Code, § 2924h, subd.(b) [the “present beneficiary” may credit bid at trustee’s sale].) It really is a simple matter. Is that too much to ask when people are losing their homes? ”
The glut of claims on mortgage foreclosures caused the judicial system to switch into an emergency mode. In so doing they skipped over the elements of fraud, due process and moral hazard in favor of “processing” the claims as quickly as possible rather than determining if the claims had any validity.