Are Foreclosure Trustees Debt Collectors?

Such rulings from appellate courts undermine confidence in the judicial system for those who are victims of wrongdoing and reinforce the confidence and arrogance of those committing the wrongs that they will get away with it.

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see 9th Circuit Foreclosure Trustee not a debt collector 10-56884

The entire “Substitution of Trustee” scheme is performed with two purposes only — (1) to record a self servicing document that will be considered facially valid establishing a “new” beneficiary and (2) the selection of an entity whose sole purpose is to facilitate foreclosure.

As a Trustee on a deed of trust it has obligations set forth in state statutes allowing the use of non-judicial foreclosure proceedings. The old beneficiary, frequently a title company, would follow the requirements of the statutes and common sense. The “new” one is “appointed” by a self-proclaimed beneficiary with instructions to foreclose. Hence the new trustee is obviously selected because of the likelihood that it will follow instructions from the self-proclaimed “successor” beneficiary and thus “establish” the validity of the new beneficiary and the data from the new beneficiary indicating the existence of a default. That is why it is described as “the foreclosure trustee.” The old one might require more information and documentation to establish the authenticity of the successor beneficiary.

The 9th Circuit here amending its prior opinion, rules out the foreclosure trustee as a debt collector because it is only selling collateral and not seeking recovery of money. Never mind the default letter that gives the amounts required for reinstatement or the redemption rights of any borrower. Playing right into the hands of the banks, the 9th Circuit has simply failed to deal with realities and instead has arrived at a result that this is as remote from the realities of today’s foreclosures as any Dickensian portrayal of the courts (see “Bleakhouse“).

The dissenting opinion from which I quote below sums up the weakness of this decision:

The suggestion in Hulse that a foreclosure proceeding is one in which “the lender is foreclosing its interest in the property” is flatly wrong. A foreclosure proceeding is one in which the interest of the debtor (and not the creditor) is foreclosed in a proceeding conducted by a trustee who holds title to the property and who then uses the proceeds to retire all or part of the debt owed by the borrower. See Cal. Civ. Code § 2931; Yvanova v. New Century Mortg. Corp., 365 P.3d 845, 850 (Cal. 2016). Any excess funds raised over the amount owed by the borrower (and costs associated with the foreclosure) are paid to the borrower. See Cal. Civ. Code § 2924k; see also Jesse Dukeminier & James E. Krier, Property 590 (2d ed. 1988). Thus, contrary to the holding in Hulse, “[t]here can be no serious doubt that the ultimate purpose of foreclosure is the payment of money.” Glazer, 704 F.3d at 463. Nor, because the FDCPA defines a “debt collector” as one who collects or attempts to collect, “directly or indirectly,” debts owed to another, 15 U.S.C. § 1692a(6), does it matter that the money collected at a foreclosure sale does not come directly from the debtor.

But even this fairly clear rendition of foreclosures recites “facts” that are in an alternate universe, to wit: that “the money collected at a foreclosure sale does not come directly from the debtor.” Where else did it come from? It came from the sale of the alleged debtor’s homestead which is property owned by the debtor and which can only be stopped by payment of the amount demanded or a lawsuit challenging the Substitution of Trustee, the status of the supposed successor beneficiary and the presence of a default between the homeowner, on the one hand, and the new beneficiary on the other hand. Either way the money comes from the debtor.

Add to that the obvious fact that Recontrust and other entities similarly situated are simply controlled entities of the large banks. In a word, they are appointing themselves as beneficiary and as successor trustee through the use of a sham entity that has no interest nor any power to act like a true trustee. The analytical issue appears to be that taken collectively, the Foreclosure Trustee, the self proclaimed successor beneficiary and the self proclaimed or appointed “servicer” are aiming for foreclosure under the guise of a quest for money.

7 Responses

  1. If the initial beneficiary is no good, they shouldnt be able to convey any interest to anyone. “Nemo dat…”

  2. In times such as these, it is time to look for common law remedies; Anna Von Reitz has a 6 step emancipation process; file your own grant and deed of trust with the land recorders office; create an express trust; copyright your name; notify the rats that the game is up;

    Look up Michigan Jural Assembly; they have a handbook; there is no remedy in the bar legal system; the bar legal system is the problem; it is contrary to even it’s own code of conduct, ethics, morals, maxims, old authorities and principles; without prejudice; in peace;

  3. Disgust is all I have for this entire business…if that’s what you call it, a business?

    Recon Trust…check out the deed books in San Fransisco, the reorganization attorney for New Century buying up properties from them. Name: Suzanne Uhland (she has been sanctioned 4 times for alleged fraud, never disbarred) If it wasn’t so outrageous, it would be funny!

    US Bank supposedly bought my DOT at the courthouse, then is named in the foreclosure action as a “trustee” for the REMIC…while Ocwen says they own the note. Then in 2012 they, Ocwen claims to have gotten an assignment from New Century by Steve Nagy (have a copy of his bankruptcy signage 2008, not his signature, 100% certain, plus he didn’t work for NC in 2012). Exhausting nonsense and then add the magistrate allowing for the 4 time to run through the court, a sale of the property after it being dismissed 3 times by the same players. In Superior Court now, continued at hearing, ?????????

    They continue to get a bite of the apple, until the paperwork looks right!

  4. When will it end I swear they stole our home put my life into a freakin tailspin five years later irs is penalizing the hell out of my wife for us using her retirement that we thought we could get an attorney and refinance or sum bs with whomever had taken over Indy Mac?three attorneys LTR lost home based on lack of us having standing now I really slip because all my life I have seen ppl have this dream fulfilled thirty year mortgages banks literally doing all they could to keep us in your place wtf when my gen turn comes up ?all the bs bout following laws and this and that something or other ? Why how who what ?and look at us today police killings terrorist groups man I wish somebody would wake me up ! Or something ! Love the work you guys are doing keep fighting the good fight oh yeah did I mention the home was in our fam for like 75 yrs owned it outright took loan to update it for future family members to use as a springboard into a better if not easier life?smh !

  5. Typical “decision” from the 9th Circus of morons. What about the “right of redemption?” (before or after the trustee’s sale). Merely one issue not discussed by these idiots! If you can pay off what is purportedly “owed” before foreclosure (I won’t get into the statutory details on this) or after in the case of a judicial foreclosure, then it is an attempt to collect a debt just as all their documents state in writing (what about “parol evidence” rule). A clear and unambiguous violation of the FDCPA and Rosenthal FDCPA. Yet another pathetic display from treasonous “judges.” Rule of law, due process be damned.

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