SCOTUS Oral Argument Illuminates the Main Question in Foreclosures: What are the roles of the parties?

Two days ago in the case of Obudskey v McCarthy and Holthus LLP the  Supreme Court of the United States (SCOTUS) heard oral argument on issues relating to the application of the Federal Debt Collection Procedures Act (FDCPA).

The argument for including the law firm pursuing foreclosure was presented by DANIEL L. GEYSER, Esq. in a case that started in Texas.

In the course of reading the oral argument and comments by the court it is clear that everyone is struggling with defining the roles of each of the players in foreclosure.  The fact that such a struggle exists is a testament to the credibility of arguments raised by homeowners that claimants are misrepresenting their roles and capacity to pursue foreclosure or at least on dubious ground for claiming any rights in relation to the subject debt. While the SCOTUS ruling could go any number of ways, the fact that they took the case for review combined with the content of the oral argument, shows that the roles of all the parties who line up to pursue foreclosure are obscured.

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see scotus oral argument on fdcpa 17-1307_apl1

Hat tip to Charles Cox

Claims under the FDCPA are very interesting because in order to determine of the party that is acting is a debt collector you must first determine if they are a creditor and then determine whether their activities fall within the FDCPA. By alleging they are a debt collector you are implicitly stating that they are not a creditor — i.e. an owner of the debt seeking to collect it.

This opens discovery on the issue of who owns the debt and wether the party demanding payment is representing the owner of the debt . We know they are not representing the owner of the debt (there probably is no “owner of the debt”) and they are not owners of the debt — unless a presumption is made that possession of the original note raises the presumption of transfer of the debt.

That in turn raises the question of whether the note was delivered by someone who owned the debt.

And THAT is at the heart of the game for the banks. They lead foreclosure defense counsel, homeowners and the courts into believing that the existence of the chain of paper is sufficient to raise a virtually irrebuttable presumption that what is written in the chain of paper is true. It is not true. So the entire tsunami of foreclosures was based upon the premise of the banks that it is true because they say it is true.

This is accepted by courts because they automatically accept representations of bank counsel as credible —- and automatically reject assertions of foreclosure defense counsel —- as either not credible or just technical ways to either delay the inevitable (which is a prejudgment) or get out of a legitimate debt (making the frequently erroneous assumption that the debt is legitimate) without regard to whether it is owed to the claimant who is named in the foreclosure proceedings — or whether the claimant has a legal relationship (privity) with the owner of the debt.

6 Responses

  1. Reblogged this on Deadly Clear.

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  2. Hey Friends-
    Enjoy the weekend – Rock-On with these Anti-Foreclosure Songs

    The Great American Foreclosure Song by Andrew Bean & David Holmes

    Foreclosure Of A Dream by Megadeath

    Ill Never Sign A Loan Again

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  3. anon– people have done that. Precedent case law against even challenge of it. The problem is MUCH bigger. Encouraged by SCOTUS acceptance of this case (and I do not live in a non-judicial state and I am not in default and I am not an attorney). And, the Florida case. People have to NEVER give up. Government has to come clean – then, and only then, may our courts turn around. They let the people take the fall, and battle against courts on their own. Lets hope SCOTUS does the right thing.

    Liked by 1 person

  4. It may be interesting to challenge the validity of assignment of mortgage done after the closing dates of the trusts in SCOTUS for a decision. If it is found to be defective and invalid, then all previous homeowners who lost their homes through this type of irregular foreclosures must be compensated.

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  5. More involved that the CFPB opinion, John, I think. Non-judicial states have own laws. This case involves state laws that it is claimed are not affected by FDPCA because of the non-judicial status of foreclosures.

    This is a very important case for non-judicial states. As Judge Sotomeyer points out — how can judicial states be affected by the FDCPA and not non-judicial states?

    Usually, federal law supercedes state law. This should be easy decision for SCOTUS — but nothing easy about SCOTUS or any court of law.
    .

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  6. I hate to bring this up again… but this issue was addressed anbd ruled upon by the ONLY Govt. Agency SPECIFICALLY Legislated to do so. The CFPB. Please read the CFPB’s Birster Amicus Brief where they cite both their power of authority (Dodd/Frank) and their definitions. It’s here: https://www.consumerfinancemonitor.com/wp-content/uploads/sites/14/2012/04/11th-Cir.-Birster-amicus-brief.pdf Since it IS a Govt. Agency legislated to make such definitions… then the only recourse I could see a court WOULD have would be to rule as to whether or not their decision was legal and then there would still be no retroactivity to it because of the no post ex facto laws.

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