Banks Are Baffled by Florida Supreme Court Ruling in Glass v Nationwide

Yesterday’s article was about a paradigm shift at the Florida Supreme Court that flipped, for the most part, law that prevented homeowners from being granted attorney fees when they won their foreclosure cases.

Today (hat tip to Greg Da Goose) I received an article published by Burr Forman (bank lawyers) that admitted that the ruling was surprising and also projected that the ruling could have far reaching implications under various proceedings and laws.

seehttp://www.burr.com/2019/01/07/blogs/consumer-finance-litigation/Florida-Supreme-Court-Reverses-Fourth-DCA-on-No-Standing-No-Fees

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Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult or check us out on www.lendinglies.com.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
A few hundred dollars well spent is worth a lifetime of financial ruin.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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Here are some notable quotes from the Burr Forman analysis:

“In a surprising opinion, the Florida Supreme Court determined that the Fourth DCA’s opinion “both misstates the basis of the trial court’s ruling on Glass’s motion for dismissal and fails to address Glass’s motion for appellate attorney’s fees based on the voluntary dismissal.” Notably, the Florida Supreme Court found that the trial court had dismissed the case based on pleading defects in the Complaint, not based on an express finding that Nationstar was not in privity with the note and mortgage.”

Editor’s Note: The author was right to zoom in on that language. Here is the real problem. If a court finds that there was a lack of privity, then it is arguable that the named claimant could never bring the foreclosure action again. (this is more complicated that it appears). So the lawyers for the claimant do not want an express finding of lack of privity unless the express finding is limited to “before suit was filed.” The homeowner’s lawyers on the other hand have a two pronged issue: a finding of no privity does support a wrongful foreclosure action and related torts and breach of statute etc., but it may at the same time bar an award of attorney fees.

The author finds the opinion has contradictory statements. But I find that the Court is finally addressing the real issue, slowly perhaps, that the foreclosure claimants either do not exist or have no right, justification, title, interest or authority to be party to a foreclosure action.

The Florida Supreme Court is signaling that it will look at issues that were previously ignored. And the Court is not stupid: the implications of homeowners winning so many foreclosure cases is that the foreclosure cases are winnable. By inference, the Court is saying “if these are ‘standard foreclosure cases’ as counsel recites in the opening statement in court, then why are so many failing?”

The lawyers for the banks and servicers might have shot themselves in the foot or as Mayer calls it “stepped on a rake.”

First, by filing appeals on fee awards, they were going off of an ad hoc plan instead of the bank playbook. They highlighted the fact that homeowners were winning their cases — something the banks have meticulous about keeping out of the press.

By appealing orders awarding fees they directly put the issue of privity — the relationship between the parties — directly in issue. They will never survive scrutiny on the issue because they changed the debt in the note into an unrecognizable obligation of an investment bank that was using some sort of “Trust” name as a fictitious DBA name. And so they can never assert any conclusions of fact or law that says otherwise.

This cycle of appeals brought by the banks may well have accomplished what homeowners have been trying to do for the last two decades — raise the issue of whether the real party in interest is at the table or in the courtroom.

FLA S Ct Reverses Course on Homeowner’s Award of Attorney Fees and Raises Other Issues for Defense of Foreclosures

For those of us that have access to the data, we know that homeowners are winning foreclosure cases all the time. Nobody else knows because as soon as a homeowner wins or gets into a winning position they are offered money for their silence. The situation worsened when Florida and courts in other states turned down the homeowner’s demand for attorney fees after the homeowner had flat out won the case — especially where the case was dismissed for lack of standing.

Here the homeowner once again wins, having advanced several defense narratives. The homeowner applies for recovery of attorney fees and the demand is rejected because the loan contract no longer exists or because the party seeking to use it was shown not to be party to it, at least when suit was commenced. The Florida Supreme Court reversed that decision and rejected others like it.

Recognizing the danger of the erroneous rulings from the trial court and the district courts of appeal, the Court rejected arguments that a dismissal, voluntary or otherwise, based upon lack of standing meant that the loan contract no longer existed. While not completely abandoning the lower courts the Florida Supreme Court has narrowed the issues such that it is again almost always arguable and even inevitable that if the homeowner wins the foreclosure case an award of fees will follow.

fla s ct attny fees 1-4-19 sc17-1387 Glass v Nationwide

see also Follow Up Article to this Article

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Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult or check us out on www.lendinglies.com.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
A few hundred dollars well spent is worth a lifetime of financial ruin.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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This case opens a can of worms for the banks and servicers and corroborates much of what I have been writing for 12 years.

At issue was the homeowner’s right to prevail on an attorney fees award after winning the case in the trial court. This has previously been denied on the basis that cases dismissed for lack of standing meant that there was not contract. But the Florida Supreme Court says that the fact that just because the party involved had no right to enforce the contract doesn’t mean there was no contract.

The clear implication here is that the court did not want the erroneous rulings of trial courts and appellate district courts to be construed as completely canceling the loan contract. Any other ruling would be inherently ruling on the rights of unidentified third parties who DID have a right to collection of payment from the borrower’s debt and who did have a right to enforcement — without any notice to them because they are undisclosed and unknown.

The Supreme Court ruled that failure to allege or prove standing does not negate the fact that the homeowner is the prevailing party and entitled to fees under F.S. 57.105(7).

Citing its own decision in 1989, Katz v Van Der Noord 546 So 2d 1047, the Supreme Court held that even if the contract is rescinded or held to be unenforceable the prevailing party is still entitled to fees under the reciprocity provisions of F.S. 57.105(7).

This upends a basic strategy of the banks and servicers. Up until this decision they were virtually guaranteed an award of fees and costs if they won and immunity to fees if they lost. This reopens the fees issue and may give attorneys a reason to accept foreclosure defense cases — even on contingency or partial contingency.

But the court, perhaps in dicta, also mentions whether the note is negotiable, quoting from the homeowner’s arguments and pleadings.

Up until now the mere existence of the original note and in many cases a copy of the note, was sufficient to regard the note as a negotiable instrument. But the Florida Supreme Court is hinting at something here that the banks and servicers really don’t want to hear, to wit: it takes more that announcing the existence of a note to make it negotiable. This is not so.

Which brings me to my final point: read carefully the day the claimant is introduced and you will probably find that the note and assignment are not facially valid because they require reference to parole or extrinsic evidence. This bars legal presumptions, at least in the absence of a specific reference to the documents supporting the execution of the instrument as a substitution of trustee, an assignment or an endorsement.

The court was more than hinting at the idea that subsequent treatment of the note, which may have been a negotiable instrument at the time of execution (if the “lender” was in fact the lender). The question is whether the note is facially valid, to wit: whether the note specifically names a maker, payee and an unconditional promise to pay. If the originator was not the lender then extrinsic evidence would be required to prove the loan and the debt and the party who would have been appropriately named as payee on the note.

If subsequent indorsements or assignments for a note that WAS negotiable remove certainty from one or more of the elements of a facially valid instruments, then it is no longer a negotiable instrument. And THAT means that the all “reasonable” assumptions and legal preemptions are taken off the table.

The reason is simple. In order to be a negotiable instrument the assignee or successor must have certainty as to the parties and terms of the note. If extrinsic or parole evidence is required to provide that certainty the instrument is not negotiable and thus not entitled to any assumptions or presumptions.

So for example (taken from another case) when a Substitution of Trustee occurs in a nonjudicial state and it is executed by “U.S. Bank National Association, as trustee, in trust for registered Holders of First Franklin Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates, Series 2007-FF I, by Select Portfolio Servicing, Inc., as attorney-in-fact” then there are several points that require extrinsic or parole evidence, making the note non negotiable or at least arguably so.

In this scenario for an assignee to take a note from a party claiming rights to enforce in this instance one must know

  1. The name of the Trust, and the jurisdiction in which it was organized and is now existing.
  2. The instrument by which US Bank claims to be trustee
  3. Identification of “registered holders”
  4. The identification and content of the certificates
  5. The instrument by which SPS claims to be “attorney in fact”
  6. If you look closely you will also see that there is a question as to whom it is claimed that SPS is representing as attorney in fact. In any event “attorney in fact” means that a power of attorney exists but without specific reference to that power of attorney by date and parties, extrinsic or parole evidence is required meaning that no assumptions or legal presumptions may be made.

In other words the note cannot be accepted by anyone without extrinsic evidence. The fact that documents are apparently accepted by the assignees doesn’t change anything as to the facial validity of the document. Without facial validity there can be no negotiability under Article 3 of the UCC. Without negotiability there can be no assumptions or legal presumptions and thus the claimant must prove every element of its claim without presumptions.

And of course when the homeowner wins an award of attorney fees is now once again probable in addition to court costs.

Remember always: the point is not who can get away with enforcement. The point of the law is assuring that the owner of the debt is the one enforcing the debt and collecting the proceeds of enforcement. Before false claims of securitization this premise was almost universally true. Now it is rarely true that the true owner of the debt is represented.

And the apparent absence of such a party due to manipulation of the debt by intermediaries, does not legally create a vacuum into which anyone with knowledge and access to data may step in and claim rights of enforcement. As stated in California Ivanova decision the law does not allow the borrower’s debt to be owed to anyone whose premise is simply that they claim it.

Texas Two Step: “Successors and Assigns”

Homeowners are losing to legal presumptions arising from apparently facially valid documents. Thus defensive strategies, tactics and narratives should include a robust attack on the facially validity of the instruments relied upon by parties seeking foreclosure. In most cases the grounds for such an attack are present — but only upon careful reading and review of the instrument.

Looking a the “return to” instruction can often give a clue as to what is going on. If the “Lender” is asserted as “Broker One” or “American Broker’s Conduit” or some other sham conduit, the fact that no payments were ever made to BOL or ABC combined with the instruction to return the document to some other entity would be corroboration of a defense narrative that the debt was never owned or controlled by the name used to designate the “lender.”

The ubiquitous use of the phrase “successors or assigns” can also be used as part of the defense narrative. Was there a succession? Was there a previous assignment? If not directly referenced on the document then the assumption must be that “successors and assigns” is mere surplusage. That means that only the name used to designate the “lender.” And if that “lender” is dead then MERS has no party principal for whom it can act as nominee.

Assignments and indorsements from such an entity are not valid. Without assertions of the face of the document, it is improper and illegal to assume that MERS is acting on behalf of someone or some party that was the owner of the debt — especially when that party has never been specifically identified.

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Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult or check us out on www.lendinglies.com.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
A few hundred dollars well spent is worth a lifetime of financial ruin.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
==========================

Take a look at the following analysis I recently performed for a client:

  1. DOT names MERS as Beneficiary.  “MERS holds only legal title…” for “lender”
  2. Assignment of Deed-of trust has MERS executing as nominee for Broker One Lending (BOL) LLC its successors or assigns located at PO Box 2026 in Flint Michigan, which is an address associated with MERS and MERSCORP.
    1. The hidden factor here is that when you read the wording carefully you can see that it is unknown if (a) the person signing worked for MERS (I can tell you with certainty they did not) (b) BOL existed at the time of the assignment and (c) whether the assignment was executed on behalf  of a successor or assign which on its face could indicate that the claimant successor was JP Morgan Chase.
    2. There is no basis of any agency relationship as nominee or otherwise between MERS and JP Morgan Chase as to this alleged loan.
    3. The agency relationship existed only between MERS and BOL. If there was a successor or other assign it is not revealed which makes the assignment subject to parole evidence, and hence cannot be claimed to be facially valid.
    4. If not facially valid no legal presumptions as to the existence or content of the assignment can be drawn.
    5. JPM cannot assign to itself — if they claim to be the successor or assign and thus claim the a agency (nominee) relationship with MERS, and to have some agent of JPM execute the assignment on behalf of JPM as successor or assign of BOL then they are assigning from JPM to JPM.
    6. The reference to “and assigns” indicates at least the possibility of a previous assignment that is unrecorded. Hence this assignment would not be considered facially valid and is presumptively in conflict with itself, to wit: if the DOT was previously assigned then it could not be again assigned to a different party. If the DOT was previously assigned to JPM there is no reference to such a transaction.
    7. BOL had ceased to exist when the assignment was executed, hence the agency relationship was automatically terminated by law when BOL ceased to exist.
    8. Since no purchase transaction is referenced the cessation of business by BOL either terminated MERS status as nominee or continued such status to the trustee as defined by statute of the estate of BOL.
    9. Samuel B Muller executes as “assistant Secretary” – a designation reserved for robosigned and forged documentation over the past 20 years. We can state with  virtual certainty that he was not an employee or agent of MERS until he gained access to the MERS IT platform and designated himself as assistant secretary. We scan state with certainty that his knowledge of any data relating to the subject debt, note or mortgage was nonexistent and that therefore the document should be considered unauthorized or, as it is now known, “robosigned.”
    10. In all likelihood JPM  never entered into any transaction in which it purchased for value the subject debt, note and mortgage. Based upon our proprietary information and related admissions by representatives and counsel for JPM it was neither the owner of the debt nor the beneficiary as defined by applicable statutes at the time of the foreclosure proceedings and sale. Any action undertaken at the direction of JPM including substitution of trustee or notices are not notices on behalf of any party answering to the definition of a beneficiary of the DOT.
    11. Based upon our prior encounters with JPM it has intervened and/or interposed itself as servicer for the subject debt, note and DOT and further claims to own the subject d debt, note and mortgage despite no foundation for such claim. Its claim to having the rights of a servicer are not defined, referenced nor founded upon any facts in reality.
    12. As such there could have been default in payment to JPM or BOL because BOL had never  been receiver of payments and JPM was never entitled to receive them as creditor. If it claims to be the agent for the owner of the debt, note or DOT no such assertion or reference is contained in any document utilized in the alleged foreclosure proceedings and sale of the subject property.
    13. The amounts stated as due therefore cannot be taken as a representation of what is on the books of the party who owns the debt, note and DOT (as beneficiary).
    14. Claims for  Quiet Title, Interest, and Judicial foreclosure are not only without foundation — they are contrary to the facts and events that took place in the real world marketplace.
    15. An interesting observation is that in the HELOC loan JPM Chase is asserted as “lender,” This could be the time that JPM interposed or intervened in the original loan.
  3. Indorsement of the note from BOL to Flagstar Bank within days of the alleged loan closing is a strong presumptive indicator that BOL, as its name implies, was only acting as a Broker who did not in actuality have any rights to access the funds being loaned. Hence the BOL could not  have owned the debt even at the time of the closing.
    1. An indorsement from a party who does not own the debt nor have any rights to enforce the debt is (a) meaningless and void as it cannot create rights that were not present at the time of the claimed “transfer” and (b) such endorsement could obviously not be used as proof (facially valid or otherwise) of ownership of the debt or rights to control enforcement. Therefore under Article 9 of the UCC, no foreclosure is applicable in the absence of clear and convincing proof that the debt was owned by party on whose behalf the foreclosure was initiated and pursued.
  4. The 2015 TILA Rescission notice is somewhat vague in its interpretation of law but effective as a notice of rescission. There is considerable conflict in the courts. But the Supreme Court by unanimous decision in Jesinoski v Countrywide made it clear that 15 USC §1635 is a procedural statute, not one that gives rise to a specific claim. When the notice is sent and delivered it is effective as terminating the loan contract, and under Reg Z rendering void the note and mortgage or deed of trust — by operation of law.
    1. While numerous defensive arguments could theoretically be raised to vacate the TILA rescission the fact that it occurred is indisputable according to both the statute and the US Supreme Court.
    2. And while such defensive arguments could be brought as claims to support vacating the notice of rescission, this is restricted to the following:
      1. A party with standing without reference to the note and mortgage that are now void
      2. Filing within 20 days of the date that the notice was effective
      3. Defensive references to a three year limitation, or other restrictive facts in sending the notice of rescission are attempts to raise the claim that the rescission should be vacated without filing a pleading on behalf of a party with standing who does not rely on the void note and void mortgage (DOT) as the basis for asserting standing. In essence such arguments are references to claims that could have been brought by the creditor but never were.

Tonight! Russell Baldwin and Neil Turn Over Some New Ideas on the Neil Garfield Show at 6pm EDT

Thursdays LIVE! Click in to the Neil Garfield Show

Tonight’s Show Hosted by Neil Garfield

with Charles Marshall and Bill Paatalo

Call in at (347) 850-1260, 6pm Eastern Thursdays

Virtually every document offered by lawyers who purport to represent the banks, trusts and servicers does one or more of the following:

  1. Refers to another document without specifically identifying the document
  2. Conflicts with another document
  3. Omits attachment of relevant documentation legally required to make the principal document facially valid.
  4. The documents contains internal conflicts that cannot be resolved without looking outside the document. (PSA)

All of these things undermine or eliminate the claim that the document is facially valid and therefore entitled to legal presumptions. But there is more…

Tonight Russell Baldwin joins me to discuss some theories that might have some traction off the usual track of foreclosure defense. We will be discussing recoupment, assumption of risk and the continuing discoveries by Bill Paatalo about conflicts and inconsistencies in the documents used to claim rights of collection, servicing and foreclosure. Bill Paatalo and Charles Marshall join the conversation tonight to offer their insights. 

Russell Baldwin can be reached at

baldwin_atty@embarqmail.com

or

Address4355 NW U.S. 101, Lincoln City, OR 97367

 

Student Loan Defense Not Much Different Than Foreclosure Defense

see NLRG Defending Student Loan Claims

First let me say there ARE differences. But mostly you are dealing with the same or similar issues. Who actually made the loan? Who actually owns the debt? Do they have the paperwork or are they faking it? Can it be discharged in bankruptcy?

http://www.nlrg.com/legal-content/the-lawletter/contracts-investigating-and-defending-against-student-loan-claims

One lawyer wrote in to me saying that, like the mortgage cases, the opposition can’t produce the note. Despite protestations to the contrary, this is highly indicative that the loans were sold into the secondary market and then claimed as assets of a trust that most likely did not exist, had no beneficiaries, no trustee (with powers of a trustee), and had no trustor or settlor. The contributing lawyer stated that so far he has not lost a single case.

1099-C Received from “Servicer”

My personal take on this is that borrowers who receive this form for “forgiveness of debt” should probably send a letter or form of contest to the IRS stating the objection to the filing of the 1099-C. The objection or contest should state, in most cases, that this has been filed by a party who had no right, title or interest in the loan and that the form is not indicative of any final resolution of the debt, which is owned by third parties unrelated to the filer.

One of  my favorite legal research firms just published a short blurb on the subject:

The Lawletter Vol 43 No 7 Charlene Hicks—Senior Attorney, National Legal Research Group

To date, no consensus has been reached among courts throughout the United States on the question as to whether a creditor’s issuance of an IRS Form 1099-C results in the extinguishment of the reported debt in favor of the debtor. Form 1099-C bears the title “Cancellation of Debt,” and, according to the IRS, a creditor should issue this form to the debtor for any year in which a debt is cancelled. Depending on the state in which the debtor resides, a creditor’s issuance of a Form 1099-C may have the effect of barring further collection efforts and of completely discharging the reported debt.             The two divergent approaches taken by courts on this issue result in opposite outcomes. The majority approach is illustrated by the Fourth Circuit’s opinion in FDIC v. Cashion, 720 F.3d 169 (4th Cir. 2013).

Read more at: http://www.nlrg.com/legal-content/the-lawletter

My opinion is this: if the filer had no right to collect or enforce it follows that it had no right to cancel the debt. This ploy is enabling hundreds of companies to take tax deductions costing taxpayers billions of dollars. Meanwhile recipients of these fabricated forms with false information are stuck wondering whether they now owe tax on debt forgiveness. I think they don’t owe anything and that after they file a letter of protest or objection, the false income on the 1099-C should be ignored.

MERRY CHRISTMAS AND HAPPY NEW YEAR

THANKS TO EVERYBODY WHO HELPED THE RESISTANCE AGAINST FRAUDULENT FORECLOSURES AND EVICTIONS!

AND SPECIAL THANKS TO ALL THOSE WHO CONTRIBUTED TO THE EFFORT HERE AT GTC HONORS, INC., THE LIVINGLIES BLOG, LENDINGLIES.COM, AND THE NEIL GARFIELD SHOW.

AFTER 12 YEARS OF DOING THIS IT STILL DRIVES ME EVERY DAY!

NEIL F GARFIELD

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