Discovery Changes and Broadens After Hawaii Supreme Court Decision

Based on questions that greeted me when I got to my desk this morning, here are just some of the thoughts that apply — a case review and analysis for each case being necessary to actually draft the right questions and to close any trap doors.

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THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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NOTE: Procedural questions should be posed to local counsel who knows local discovery rules and court procedure. My answer is based upon general knowledge and not based upon any experience in litigating discovery issues in your state.
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The effect of the new decision in the link above is most probably (a) a broadening of existing discovery requests (b) rehearings on recent decisions denying discovery and (c) an opportunity and a reason to ask the questions you really want to ask.
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The first question is whether the questions you would ask now are already within the scope of the questions you have already asked. If so, generally speaking, there is nothing to do. In this scenario you could send a letter, I think, that clarifies your questions in view of the new Supreme Court ruling. The letter would specifically address certain issues that were raised in questions already asked and tells them the details you expect. This could be done in a supplemental request for discovery citing the new Supreme Court decision. Check with local counsel.
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Second, and this is more likely, your case should be analyzed within the context of the new decision. It seems to me that the decision opens up some broader scope of discovery than had previously been submitted. Your opposition will fight this tooth and nail. Pointing to the Hawaii Supreme Court decision is not going to be enough even if the property is in Hawaii. You need to have a very clear narrative that explains why you are asking for the answers to questions and the production of documents and answers to request for admissions. Without a clear defense narrative your first Motion to Compel them to respond will likely fail. The general rule is that discovery, with certain exceptions, can be any request that could lead to the discovery of admissible evidence. By “admissible” the meaning is evidence that is relevant and “probative” to the truth of the matter asserted. It isn’t relevant unless it ties into either the case against you or the defense narrative. Lack of clarity can be fatal.
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The opposition is going to claim privilege, privacy, and proprietary information. You should force them to be more specific as to how the identification of the creditor is proprietary, or an invasion of privacy or some privilege. Tactically I would let them paint themselves into a corner, so you need someone who knows how to litigate. Once it is established that they can’t or won’t disclose the matters into which you have inquired, then the question becomes how they will prove authority from the creditor without identification of the creditor from whom all authority flows.
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That could lead to a motion for summary judgment wherein you allege that they have failed and refused to make disclosure as to the most fundamental aspect of pleading a case. Since their authorization to initiate and maintain a foreclosure action must relate back to the authorization of the creditor (owner of the debt) and they now have not or will not identify that party(ies), the presumption of authority must be considered rebutted, thus requiring them to prove their case with facts and not with the benefit of legal presumptions.
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Since they have admitted on record that they cannot prove they are acting on behalf of the creditor, it follows that they cannot prove authority to initiate or maintain a foreclosure action. Hence, the outcome is certain. They will not be able to prove standing although they might have made certain assertions or allegations that might pass for standing such that they can withstand a motion to dismiss or demurrer. The essential assertion of standing is either rebutted or barred from proof. Hence judgment should be entered for the homeowner.
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Some of this might come out in a motion for sanctions which is virtually certain to come from you when they fail to properly respond to your requests for discovery. This is intricate litigation that should be handled by a local attorney.
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Again don’t start a second front in the battle if you have already covered it in your previously submitted requests for discovery. I think you have asked most of the right questions, although now with this decision it becomes more refined.Among the questions I would ask in view of the new decision from the Supreme Court of Hawaii are the following presented only as narrative draft, subject to improvement by local counsel:
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  1. Does the trust exist under the laws of any jurisdiction? If yes, describe the jurisdiction in which the trust is recognized as existing.
  2. Was the trust organized under the laws of any jurisdiction? If yes, when and where?
  3. Does the trust own the subject debt? If yes, please explain why the trust is not claimed as a holder in due course.
  4. Does the trust allow the beneficiaries an interest in the assets of the trust?
  5. Please describe the manner in which the certificate holders are beneficiaries of a trust.
  6. Does the named Trustee of the Trust have any rights or obligations to monitor trust assets?
  7. Does the named Trustee of the Trust engage in any activities in which it is administering the assets of the Trust.
  8. Describe the assets of the Trust.
  9. Please identify the Trustor or Settlor of the Trust.
  10. Please identify the date, place and parties involved in any transaction in which assets were entrusted to the named trustee for the benefit of named or described beneficiaries.
  11. Please identify the date, place and parties involved in any transaction in which assets were purchased by the Trust or in which a Trustor or Settlor purchased assets that were then entrusted to the named trustee of the Trust for the benefit of named or described beneficiaries.
  12. Is the named Trust a fictitious name being used by one or more other entities?
  13. Do the certificates contain provisions in which the holder of the certificate disclaims any right, title or interest to assets of the Trust or any right, title or interest to the subject loan? If yes, please describe the provision, in what document it is located, the date of the document, and where that document currently exists in the care, custody and/or control of the Trust or any party doing business as or on behalf of the named Trust.
  14. Please describe the owner of the debt, to wit: describe the party currently carrying a receivable on its books that includes the subject loan, wherein no other party is ultimately entitled to proceeds of payments, proceeds or recovery on the subject loan.
  15. Is it your contention that residential foreclosure is legally allowed without ownership of the underlying debt from the borrower? If so, describe the elements of a party who would be legally allowed to foreclose on a residential mortgage without ownership of the underlying debt.
  16. Does the Trust have a bank account in the name of the Trust?
  17. Does the Trust have a bank account in the name of the named Trustee as Trustee for the Trust.
  18. If the answer to either of the two preceding question is yes, please describe the account, its location and identify the signatories on said account.
  19. Please describe the retainer agreement between the named Trust and current counsel of record including all the parties thereto, the date(s) of execution and date that the agreement became effective, the names of the signatories, and their authority to execute the instrument.
  20. With respect to loans attributed to or allegedly owned by the Trust please describe the parties who make decisions, along with a description of their authority, with respect to the following relating to the subject loan:
    1. Whether to foreclose
    2. When to foreclose
    3. What documents are needed for foreclosure
    4. Applications for modification
    5. Terms of modification
    6. Terms for settlement of the debt

DEUTSCH BANK Memo Reveals Documents and Policies Ripe for Discovery

This completely corroborates what I have been saying for years along with a chorus of lawyers and pro se litigants across the county. It simply is not true that the attorney represents the trust or the trustee. 

This “Advisory” shows that there are documents that are rarely in the limelight and that clarify claims of securitization in practice. Note that the memorandum cited below comes from Deutsch Bank National Trust Company, as trustee and Deutsch Bank Trust Company Americas, as trustee.

These names are often NOT used when foreclosure actions are initiated where the name of the alleged REMIC Trustee is Deutsch Bank. It is important to note that neither of the two trust entities actually have been entrusted with any loans on behalf of any trust. Their name is used, for a fee, as windows dressing.

In this memo, Deutsch is attempting to limit its liability beyond the absence of any duties or trustee powers whose absence is revealed by reading the Pooling and Servicing Agreement (PSA) which is the alleged Trust instrument.

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THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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Hat tip to Bill Paatalo

See Deutsche Bank Memorandum – July 2008

I have previously published and commented on parts of this memorandum. This is an expansion on my comments. This “advisory” obviously intends to bring alleged servicers back in line because it states in the introductory paragraph that the Trustee respectfully requests that all servicers review the First Servicing Memorandum and adhere to the practices it describes.”

None of this would have been necessary if the servicers were conforming to the directions and restrictions contained in the First Servicing Memorandum. We all know now that they were not conforming to anything or accepting instruction from anyone other than the alleged “Master Servicers” for NEITs (nonexistent  inactive trusts).

In discovery, one should ask for any servicer memoranda that exist including but not limited to the Memorandum to Securitization Loan Servicers dated August 30, 2007 a/k/a the First Servicer Memorandum, and all subsequent correspondence or written directions to servicers including but not limited to this “Advisory Concerning Servicing Issues Affecting Securitized Housing Assets.

Note also the oblique reference to the fact that the cut-off date actually means something.  It states that “typically” the REMICs (actually NEITs) take ownership of loans at the time the securitization trusts are formed. Thus discovery would include questions as to whether or not that occurred and if not, when did transfer of ownership occur and with what parties. Also one would ask for correspondence and agreements attendant to the alleged “transaction” in which the Trust allegedly purchased the loans with trust money that came from the proceeds of sales of certificates to investors. If the Trust did not pay value for the loans then it did not acquire the debt. It only acquired the paper instruments that are used as evidence of the debt.

Perhaps most importantly, the memo comes down hard on the use of powers of attorney, which are a favorite medium through which lawyers for the foreclosing parties typically try to patch obvious gaps in the chain of ownership or custody of the loan documents.

Then the memo provides foreclosure defense attorneys with the opportunity to attack the foundation laid for testimony and exhibits from robo-witnesses. It states that all parties must “Understand the mechanics of of relevant securitization transactions and related custodial practices in sufficient details to address such questions in a timely and accurate manner.” As any foreclosure defense lawyer will tell you, the robo-witness knows nothing about “the mechanics of of relevant securitization transactions and related custodial practices.” [The problem is that most borrowers and foreclosure defense lawyers don’t know either].

The inability of the robo-witness to describe the specific securitization practices in real life as it pertains to the subject loan gives rise to a cogent attack on the foundation for the rest of his testimony. With proper objections, perhaps motions in limine, and cross examination, this could lead to a defensive motion to strike the witnesses testimony and exhibits for lack of foundation. The following quote takes this out of the realm of theory and argument and into simple fact:

Servicers must ensure that loss mitigation personnel and professionals engaged by servicers, including legal counsel retained by servicers, understand the mechanics of relevant securitization transactions and related custodial practices in sufficient details to address such questions in a timely and accurate manner. In particular, servicing professionals [including “loss mitigation”] must become sufficiently familiar with the terms of the relevant securitization documents for each Trust for which they act to explain, and where necessary, prove those terms and resulting ownership interests to courts and government agencies.”

Note the assumption that lawyers are hired by servicers and not the Trustee or the Trust. Thus the servicers hire counsel and then order that foreclosure be brought in the name of the alleged trust. But if there is no trust or no acquisition of the debt, or authorization (remember powers of attorneys are not sufficient), the servicer is without legal authority to do anything, much less collect money from homeowners or bring foreclosure actions.

Paragraph (2) of the this “advisory” also gives guidance and foundation for what various people, especially attorneys, can say about who they represent and how.

“The Trustee believes that all persons retained by the servicer should specifically role or capacity in which they are acting. … One would be less accurate… if he or she claimed to be … attorney for the Trustee. A more accurate statement [attorney for servicer] acting for [Deutsch] as trustee of the Trust.”

This completely corroborates what I have been saying for years along with a chorus of lawyers and pro se litigants across the county. It simply is not true that the attorney represents the trust or the trustee.

 

A Document labeled “Assignment of Mortgage” Does Not Prove the Sale of the “Loan”

Too many lawyers and pro se litigants look at the title to a document and don’t know what else to do with it. They accept as true that a document is what is stated. That is one of the many trapdoors the banks have laid for us.

Listen to the Last Neil Garfield Show at http://tobtr.com/s/9673161

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THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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The “title” to a document is a statement of fact that may or may not be true. The title used is for the convenience of the party who drafted it. In our analysis we do not assume or accept that any  document is what is stated as the title or anywhere else in the document.
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The fact that a document is entitled “Assignment of Mortgage” does not mean that in reality there is either a valid mortgage or that a valid debt, note or mortgage was sold in any transaction.
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Nor does the existence of the document mean that the signatures are authentic and authorized or even that the named entities or signatories actually exist as legal “‘persons.'”
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The admission of such a document into evidence normally proves only that the document exists. While the existence of the document might raise assumptions or even legal presumptions, the document itself is not proof of any statements of fact or issues referred to in the wording of the document.
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Such statements would normally be regarded or should be regarded as hearsay and excluded from evidence unless someone with personal knowledge, under oath, had personal knowledge for their five sense and recalled events that were tied to the execution of the document.
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Objections must be timely raised or the objection is waived. Hence, if opposing counsel refers to wording in the document, that wording is hearsay but must be barred by (a) an objection at the moment the wording is the subject of a question to a witness and (b) the court sustaining the objection in the absence of a proper foundation for the admission of what is or ought to be recognized as excluded hearsay evidence.

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FAMILIARITY IS BREEDING CONTEMPT IN THE COURTS

Business Records Exception On Shaky Ground: The main point is foundation: the affidavit or testimony by the robo-witness must show that the company he works for is in fact the servicer of the loan, as authorized by the owner of the debt, and that he/she has actual knowledge of the procedures and posting policies of the servicer and the owner of the debt. I would add that this “corporate representative” must show that he/she and the “servicer” is authorized to speak for, and thus appear for the foreclosing party.

see http://www.newyorklawjournal.com/home/id=1202770275522/Casting-Doubt-on-Validity-of-Servicer-Affidavits-in-Foreclosure-Litigation?mcode=1202615326010&curindex=0&slreturn=20160925141040

Hearsay is always excluded from evidence — at least when it is ruled as hearsay. A document is hearsay in nearly all instances and thus may not be introduced into evidence — unless it satisfies the elements of a exception to the hearsay rule of exclusion.

In foreclosures the main hearsay event arises from the fact that no creditor appears in court. It is virtually always a company that claims to be a servicer for the owner of the debt, but the situation is nearly always opaque as to the identity of the owner of the debt who they say authorized them as servicer.

The typical testimony from a robo-witness, on leading questions from the attorney, is that he/she is familiar with the the record keeping process and policies of the servicer and that the letter, or payment history sought to be introduced into evidence was produced in the ordinary course of business from records kept in the ordinary course of business based upon entries made at or near the time of an actual event. Of course, with most of such documents there is no “event” and that is a problem for banks and servicers.

New York seems to be leading the way on the issue of whether these documents are trustworthy exceptions to the hearsay rule of exclusion. See the above link.

Judges in New York now know they will be reversed unless there is clear and competent evidence that the witness can attest from their own personal knowledge using one or more of their five senses — i.e., that they have seen and heard and followed the process of making and keeping records and that they had access to the records showing that the “servicer” was authorized to act as such.

The reason why banks have shifted from the old tried and true practice of sending a representative of the alleged owner of the debt to court is that such a person knows too much and would either be required to perjure themselves or tell the truth, to wit: that the company he/she works for is not the owner of the debt and he/she has no idea who is the owner. Such a person would be forced to admit either ignorance of any transaction in which their employer purchased the loan or that the loan was not in fact purchased by his/her employer.

Such an admission would completely obliterate the claim of the company claiming to be a servicer on behalf of the owner of the debt. This in turn would eliminate the business records exception to the hearsay rule of exclusion. We could go deeper into the number of IT platforms that are maintained and by whom they are maintained and whether the “servicer” even has access to the actual records, but it seems potentially unnecessary with decisions coming from appellate courts who are worried about opening the door on hearsay in millions of other cases unrelated to foreclosure.

Those courts are rapidly retreating from the temporary imposition of an extended exception to the hearsay rule because they can readily see how justice would not be served in criminal and civil matters if the rule remains as loose as it is now.

It is much better for the banks to send someone who knows nothing and therefore cannot accidentally or otherwise tell the truth about these bogus loans and fraudulent foreclosures. The banks are in essence throwing the servicers under the bus, along with the attorneys hired by the servicers. But the walls are caving in on them and they will soon need to put up or shut up — producing a real witness with real (not presumed) knowledge or take a voluntary dismissal. As we have seen in thousands of cases, when presented with that choice the banks voluntarily dismiss their actions even when it means they must pay attorney fees to the homeowner.

The obvious conclusion is that there is no such witness and the facts asserted by the foreclosing party are pure fiction, reliant entirely upon illusion and the erroneous application of legal presumptions.

From the article cited above:

“Lenders will need to find ways in which to meet the new requirements imposed in order to satisfy the business records exception to the hearsay rule announced in decisions such as Royal. For instance, lenders may seek to avoid altogether obtaining affidavits from third-party loan servicers, and instead use representatives of the lender, who can attest to their familiarity with the lender’s record-keeping practices and procedures, in order to submit affidavits and documents to the court.

 
Alternatively, if lenders continue to insist, even after Royal and the other decisions of the Second Department discussed above, to use affidavits from third-party loan servicers in mortgage foreclosure litigation, then the best practice will be to have loan servicers (as opposed to lenders) be the party to act as the plaintiff in the foreclosure litigation. So long as the loan servicer is authorized to do so by the lender, courts have found that loan servicers have standing to present claims for foreclosure and sale on behalf of the lender that owns and holds the note and mortgage at the time of the commencement of the action. See, e.g., Flushing Preferred Funding Corp. v. Patricola Realty Corp., 964 N.Y.S.2d 58 (Sup. Ct. Suffolk Co. 2012).”

MEDIATIONS, MODIFICATIONS, SHORT-SALES AND SETTLEMENTS

SERVICES YOU NEED

AUTHORITY AND AGENCY

In “Fair Game” Gretchen Morgenson continues to unravel the failing process of “saving homes” while the world ignores the simple truth that legally the homes are in no jeopardy but for the pranks and illusions created by the pretender lenders.

  • There is no valid foreclosure, auction, mediation, modification, short-sale, satisfaction of mortgage, release and re-conveyance, or even settlement with a party to whom the money is not owed and a party owning no rights under the security instrument (the mortgage or deed of trust).

It is all an illusion given reality by repetition not by truth. It is fraud ignored by courts who naturally find it far more likely that a deadbeat homeowner is trying to trick the court than a world class bank or someone pretending to be an agent of a world class bank. But in the end, whether title moves by foreclosure or any of the procedures mentioned above, there is no clear title. There is clouded, fatally defective title and a settlement with a party lacking any power to even be in the room.

This is why I have maintained that lawyers err when they do not aggressively (on the front end despite the rules requiring mediation etc.) insist on proof of authority to represent and proof of agency and proof that a decision-maker is in the room. If those elements are not satisfied, there can be deal — only the appearance of a deal.It is entirely possible that not even the lawyer has authority to represent and that the lawyer has conflicts of interest when you make the challenge. If a lawyer asserts he represents a party you have a right to demand proof of that. I’ve seen dozens of cases unravel at just that point.

The foreclosure mills play musical chairs but they are forgetting that this fraud on the court may come back and haunt them with liability, discipline and even criminal charges. They keep their options open until they absolutely are forced to name a pretender lender. That lawyer standing in the room has generally spoken to nobody other than a secretary in his own firm. he doesn’t know the client, or any representative of the client. He or she presumed to be authorized to represent the client because the file was given to him or her.

Think I am kidding. Try it out on Deutsch Bank or U.S. Bank or BONY-Mellon. Demand that the lawyer produce incontrovertible proof that their client knows the case even exists and that this lawyer represents them.

From what I am seeing, this interrupts the flow of plausible deniability. Nobody high up in the food chain wants to come in and say they have personal knowledge or that they have anything to do with these foreclosures. They just want their monthly fee for pretending to be Trustee over a pool that was never created, much less funded. They will try to use affidavits from people who know nothing and who are probably not even employed by the “client.” Even if they are employed a quick inquiry will reveal that the signatory lacks authority to hire legal counsel and has no personal knowledge of the case.

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September 18, 2010

When Mortgage Mediation Is a Gamble

By GRETCHEN MORGENSON

NEVADA — one of the states where home prices went stratospheric during the housing mania — is now reporting some of the nation’s most horrifying foreclosure figures. Last week, RealtyTrac said that 1 in every 84 households in the state had received a foreclosure notice in August, 4.5 times the national average.

To mitigate this continuing disaster, the Nevada Assembly created a foreclosure mediation program last year. Intended to help keep families in their homes, the program brings together troubled borrowers and their lenders to negotiate resolutions.

The program began on July 1, 2009, and in its first year, 8,738 requests for mediation were received and 4,212 completed, according to the state’s Administrative Office of the Courts. Some 668 borrowers gave up their homes and 445 were foreclosed upon in the period.

“We are the only state that requires the bank to do something — they must come to the table if the homeowner elects mediation,” said Verise V. Campbell, who administers the program. “We are now touted as the No. 1 foreclosure mediation program around the country. The program is working.”

During its first year, 2,590 cases — more than 60 percent of completed mediations — resulted in agreements between borrower and lender, Ms. Campbell said. But when asked how many actually wound up assisting homeowners through permanent loan modifications, she said her office did not track that figure.

Most of these agreements, say lawyers who have worked in Nevada’s program, were probably for temporary modifications like those that have frustrated borrowers elsewhere — you know, the kind of plan that lasts only three months until the bank decides that the borrower does not qualify for a permanent modification.

Clearly, the Nevada program is superior to the White House’s Home Affordable Modification Program, where borrowers have trouble even reaching lenders by phone. Forcing banks to meet with borrowers is definitely a good step.

But some mediators who have participated in the Nevada program and some lawyers who represent borrowers in it say it has flaws that may give the banks an advantage over borrowers.

Patrick James Martin, a lawyer in Reno who is a certified public accountant and an arbitrator for the Financial Industry Regulatory Authority, was an early mediator in the program. In a recent letter to Nevada’s state court administrator, Mr. Martin expressed concern that the program favored lenders.

“I really felt the lenders didn’t have too much interest in having the program work,” Mr. Martin said in an interview. “A lawyer would show up for the lender with none of the documents required by the program. When they got into the mediation, they would call somebody in a bullpen someplace who had a computer handy and the borrower might or might not qualify for modification. No discussion, no negotiation.”

Mr. Martin said he no longer received cases to mediate.

Another experienced mediator, who declined to be identified because he feared reprisals, was removed from the system after he recommended sanctions for banks that did not meet their obligations under the program. These duties include showing up, bringing pertinent documents and having authority to negotiate with the borrower.

After this mediator made a petition for sanctions in a case this year, Ms. Campbell sent him and the other parties in the matter a letter saying that the recommendation was not a “valid Foreclosure Mediation Program document.” The letter, on Supreme Court of Nevada stationery, also stated that nothing in the law that established the mediation program “requires or permits a mediator to recommend specific sanctions.”

But the statute governing mediations in Nevada clearly specifies that if a lender does not participate in the mediation in good faith, by failing to appear, for example, “the mediator shall prepare and submit to the mediation administrator a petition and recommendation concerning the imposition of sanctions” against the lender. The court then has the power to issue sanctions, which can include forcing a loan modification.

Keith Tierney is a veteran real estate lawyer who was until recently a mediator in the program. He, too, stopped receiving mediation assignments after recommending sanctions against lenders in a number of cases. He said that a program official told him last week that he was no longer eligible because he issued a petition and recommendation for sanctions, even though that is what the law allows.

When asked why she believed that such recommendations were not allowed, Ms. Campbell said mediators who issued them were not following the program rules as interpreted by Nevada’s Supreme Court.

But Mr. Tierney said: “The statute trumps rules. Every attorney in the world knows that if a rule is in contradiction to a statute, the rule is null and void.”

Administering the program gives Ms. Campbell great power. She issues certificates allowing foreclosures to take place after mediations occur. And while she said such certificates were submitted only when mediators’ statements showed they should be, mistakes have happened.

ONE woman went through a mediation in which the lender didn’t provide necessary documents and the mediator noted it, according to legal documents. Under the rules, no certificate is supposed to be issued in such a circumstance, but shortly afterward, the borrower received notice of a trustee sale. Ms. Campbell’s office had issued a certificate allowing foreclosure; only by filing for bankruptcy could the borrower stop it.

Ms. Campbell said such problems were rare. The state doesn’t produce data that would allow her assertion to be verified.

Ms. Campbell is not a lawyer and is not a veteran of the housing or banking industries. Before overseeing the mediation program, she worked in the casino industry. She worked for a Chinese company developing a gambling property in Macau and was director of administration for the Cosmopolitan Resort and Casino in Las Vegas.

Ms. Campbell said that her position involved administrative duties, not legal insight, and that her experience overseeing large projects amply prepared her to manage the Nevada mediation program.

But David M. Crosby, the lawyer who represented the borrower whose case resulted in an erroneous foreclosure action, said significant questions remained about the program. Among them, he said, was the role that Ms. Campbell played in the process.

“Does she just do administrative stuff or does she make decisions?” he asked. “That doesn’t seem well decided.”


In States Requiring Mediation

More and more states are following the example set by the federal government in requiring mediation or modification attempts before going forward with litigation. We think that is a good idea in theory, but without the teeth that is in the enabling rules and statutes in Florida, you are just going to end up playing the same game of “who’s my lender.?”

Even in Florida, as in all cases, YOU must bring up the the issue of the authroity of the person being offered as a decision-maker.” 99 times out of a hundred they are not. The most they have is some authority from a dubious source to agree to some minor adjustments, like adding the payments to the back end of the mortgage.

Make no mistake about it — there is no decision-maker unless they have full power over that mortgage. That means they could if they want to, reduce the principal. They will argue that nobody has that power because the securitization documetns prohibit it. That is their little way of getting your eye off the ball.

Of course the securitization documents don’t allow certain things to be done to the mortgage. Those documents are aimed at restricting the actions of the agents of the principal (i.e. the creditor/lender).

It is ONLY an authorized representative of the investors who DO have the final say over any settlement that is needed in that mediation room and proof of that authority, which means notice to the investors, which means disclosing that notice to the investors and proof that a sufficient number of investors under the documents have approved the grant of decision-making authority to modify, amend, alter or change the obligation, note and/or mortgage.

Unless the person offered for the mediation has the authority to sign a satisfaction of mortgage on whatever terms he/she sees fit, they are not the decision-maker. If the other side refuses to comply move for contempt, sanctions and to strike their pleadings with prejudice.

If the other side fights this and they probably will, you should probably argue that this is a flat out admission that the principal (i.e., real party in interest, creditor, lender) is not represented in the proceedings because the other party in your litigation refuses to disclose them contrary to the requirements of federal law, state law and the rules of civil procedure.

If they can’t produce this authority then they also lack authority to foreclose. It might even be an admission that they are seeking to steal the house, put in their own entity and keep the proceeds of sale contrary to the interests of the investor who is entitled to be paid and contrary to the borrower who is entitled to a credit against the obligation that is due.

Florida 6th District Strikes at Heart of Pretender Lenders

5 08 10 Florida mediationorder

The main message is that what we have here is a legal obligation in search of a creditor and that the opposition is trying to use the court as a vehicle to steal the house and run with it while the whole securitization mess is scrutinized.

I think this Order is far more significant than it might seem both statewide in Florida and nationally. This Order, as I read it, requires (1) verification of the Lender’s status and (2) the ACTUAL authority of a designated person in writing, as a decision-maker; in plain language it asks whether the note is actually legally payable to the (pretender) Lender that wishes to foreclose and whether they have an actual live person who has the authority to mediate, execute a satisfaction of mortgage and otherwise make any final decisions on the settlement of the matter. That eliminates virtually 100% of all pretender lenders, which in turn eliminates virtually 100% of all foreclosures.

This Order should be used as persuasive argument that an entire district has found the need to do this, which combined with the other Supreme Court and trial decisions we have reported here, should be persuasive enough to give the Judge pause about who is the REAL party trying to get a FREE HOUSE.

In the Motion Practice Workshop, an underlying theme is that you should not be arguing in the abstract or the nuances. In one hearing after another your objective is to get the Judge to agree to at least one thing that is OBVIOUS procedurally and gradually get to the next hearing and then the next, in a process of education that gives the Judge time to process and absorb the reality of the situation.

The main message is that what we have here is a legal obligation in search of a creditor and that the opposition is trying to use the court as a vehicle to steal the house and run with it while the whole securitization mess is scrutinized.

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