VA Court Finally Recognizes Circular Reasoning of the Banks

“Because I said so” or “because I already did it” is not a recognizable legal ground for possession of property even after the forced sale of the property. In an action for possession of property, the taker must establish that it is the legal owner and that the ownership was obtained lawfully and properly. The fact that a prior judgment was entered allowing the foreclosure sale is not dispositive.

The “presumed facts” are directly contrary to the actual facts. Or, as I have stated it in other circumstances, the money trail does not match the paper trail. There are no real transactions in most instances.





For ten years — about the same amount of time that I said the rescission is valid upon mailing and did not require lawsuit or tender — I have advocated and encouraged lawyers for homeowners faced with eviction, writ of possession, or unlawful detainer to adopt a simple logic. Eviction is proper when the owner and possessor merely leases the property or grants some sort of title that has expired. That is certain and it is final and nobody disagrees with it.

The problem in the Courts is that judges have routinely ignored one simple basic fact: the current occupier of the property had legal title and the total right to possession of the property before this new party came into the picture and claimed the right to title and now claims the right to possession. Final Judgments entered in the Court records are not dispositive as pointed out by this Virginia court and as pointed out by the Supreme Court of the State of California in Yvanova.

It is the second part of the “formula” that came up in a Virginia Court, which has been one of the most difficult states in the nation for homeowners contesting the baseless actions of foreclosing parties. The logic is simple. Where the homeowner was clearly the owner of record and the possessor, the party seeking foreclosure must assert (nearly always absent) and prove that it came into title ownership lawfully and properly.

The interesting thing about this is that if the homeowner contests the eviction or unlawful detainer and does so with sufficient grounds as to create doubt as to whether the party seeking eviction lawfully acquired title, THEN the burden shifts to the party seeking eviction to prove that everything that happened before was lawful and proper. And we all know that without legal presumptions being improperly applied practically none of the evictions were or could be proper.

Like other things this is not a magic bullet. But it provides some daylight. The Virginia court held that as long as the homeowner successfully raises a question about title, the court hearing the eviction claim must dismiss the claim immediately because it has no right or jurisdiction actually try a case based upon title claims. I think you would find similar laws in other states where, for example, if County court the jurisdiction is far more limited than it is in Circuit Court. The County Court may hear and decide and eviction but as soon as the Court sees a bona fide question about title, it must dismiss the case leaving the parties to sort out their differences elsewhere. That might be in state Circuit Court or Federal District Court.

The party seeking eviction would need to go to a court of competent jurisdiction and plead that (a) they are the lawful title owner (b) they are entitled to possession and (3) the current occupants have lost their right to possession even though they had both title and possession before the foreclosure. Any allegation based in actual fact must be proven by actual facts and legal presumptions clearly should not apply once the lower court has already determined that there is doubt as to whether the documents for title were validly issued. This might prevent the party seeking to confirm title and seeking the eviction from using any legal presumptions since the documents themselves have already been determined by a lower court to lack trustworthiness or authenticity or legal effect.

One thing to keep in mind is that without legal presumptions none of the foreclosures could go forward because there is no proof in existence, in most cases, of the existence of an executed loan contract between the homeowner and the “originator.” The “presumed facts” are directly contrary to the actual facts. Or, as I have stated it in other circumstances, the money trail does not match the paper trail. There are no real transactions in most instances. The paper trail creates legal presumptions but as soon as a court orders that the foreclosing party open its books to determine whether there were actual transactions, actual loans by the parties upon whom the forecloser relies, the bank case falls to pieces.

… a conundrum because some actions for unlawful detainer necessarily turn on the question of title. Unlawful detainer is an action against a defendant who lawfully entered into possession of real property but whose right to lawful possession has since expired. It is brought by a plaintiff lawfully entitled to possession at the time of suit, which the defendant is then unlawfully withholding. Allen v. Gibson, 25 Va. (4 Rand.) 468, 473 (1826). The validity of the plaintiff’s right of possession is an issue that, when disputed, must be determined in the adjudication of the unlawful detainer action. Id. at 474. The plaintiff must show either (1) prior actual possession, which was then yielded to the defendant under some temporary or defeasible estate that has ended, or (2) a right of possession acquired after the defendant’s entry. Id. at 474-76.

Whether the plaintiff has a right of possession will not always present a question of title. Such a question will never arise in the first class of cases, where the plaintiff’s right is based on prior actual possession. For example, a landlord may bring an action for unlawful detainer against a tenant who holds possession of the leased premises in violation of the lease or after it has expired. In such cases, the defendant’s possession is derivative of the plaintiff’s title, and the defendant is not permitted to challenge it. [e.s.]

Emerick v. Tavener, 50 Va. (9 Gratt.) 220, 223 (1852). However, a plaintiff in the second class of cases, who claims a right of possession acquired after the defendant’s original, lawful entry, must show the validity of that right. When the plaintiff’s after-acquired right of possession is based on a claim of title, the plaintiff may be required to establish the validity of that title. Corbett v. Nutt, 59 Va. (18 Gratt.) 624, 648 (1868).2 Actions for unlawful detainer in the foreclosure context generally fall into this category. [e.s.]

Where the right of possession depends solely upon a claim of title, the question of whether that title is valid is a threshold question in an unlawful detainer action. While a court’s resolution of that question in an unlawful detainer action may not, by statute, be preclusive in actions for ejectment or to quiet title, the court trying the unlawful detainer action nevertheless must weigh the parties’ competing arguments about validity to determine whether a plaintiff’s prima facie right of possession evidenced by a trustee’s deed has been rebutted by the defendant. [e.s.]

In most foreclosure cases, a trustee’s deed will satisfy the foreclosure purchaser’s burden to establish that it acquired a right of possession after the homeowner’s original, lawful entry, and the homeowner will have no good-faith basis to contest it. However, in limited circumstances, the homeowner could allege facts sufficient to place the validity of the trustee’s deed in doubt. In such cases, the general district court’s lack of subject matter jurisdiction to try title supersedes its subject matter jurisdiction to try unlawful detainer and the court must dismiss the case without prejudice. Warwick, 56 Va. (15 Gratt.) at 542 (“[O]n being convinced that the case involves a bona fide claim of title to real estate,” a court not of record “is bound to dismiss [the proceeding] immediately.”).

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Does Yvanova Provide a Back Door to Closed Cases?

That is the question I am hearing from multiple people. My provisional answer is that in my opinion there is a strong argument for using it if the property has not been liquidated after the foreclosure auction. There might be a grey area while the property is REO and there might be a grey area where the property has been sold but the issue of a void assignment is raised in an eviction procedure. It will strain the minds of judges even more, but these issues are certain to come up. As things continue to progress Judges will shift from looking askance at borrowers and thinking their defenses are all hairsplitting ways to get out of a debt and get a free house. Upon reflection, over the next couple of years, you will see an increasing number of judges taking the same cynical view and turning it toward the banks and servicers who in most cases function neither as banks or servicers.

The Yvanova court took great pains to say that this was a very narrow ruling. Starting with that one might argue it only applied to that specific case. But they went further than that and we all know it. SO it stands for the proposition that a void assignment can be the basis of a wrongful foreclosure. AND most BANK LAWYERS agree that is a huge problem for them, at least in California but they think it will adopted across the country and I agree with the Bank lawyers on that assessment.

The reason is simple logic. If the foreclosure is wrongful then it seems stupidly simple to say that it was wrong in the first place. If it was “wrong” the questions that emerge in legal scholarship arise from two main paths.

What does “wrong” mean. Or to put it in Yvanova language is wrong the same as void or is it voidable. This would have a huge impact on issues of jurisdiction, res judicata, collateral estoppel etc. Does it mean that it was wrong and you can get damages or does it mean that it was wrong and therefore the homeowner still owns the house. I lean towards the former not by preference but by what I think the court was saying between the lines. The whole point of nonjudicial foreclosure (amongst two other points that are obvious) is to provide stability and confidence in the title system. So if a wrong foreclosure occurs the title would most likely remain in whoever bought it at auction — although the purgatory in which many properties remain (REO) might create a grey area in which there is no prejudice in vacating the sale. Indeed if the party holding the “FINAL” title did so by fraud (using a void assignment) then equity would seem to demand return of title to the homeowner. AND THEN you still have the problem of evictions or writs of possession or whatever they are called in your state. Title is one thing but possession is another. If you raise the void assignment can you defeat possession even if you can’t defeat the title transfer? It would SEEM not but equity would demand that a thief not further the rewards of his ill-gotten gains.

Next path. Procedure, evidence and objections. Going back in time the homeowner might have objected or even alleged things that the Yvanova court now finds to have merit. So a lay person might think that is all they need is to show the void assignment and presto they have title or money or both in their hands. Not so fast. Due process is intended to allow a person to be heard and the justice system is designed and created to FINALIZE disputes, whether the decision is right or wrong. SO questions abound about what happened at the trial court level. But there was a remedy for that. It is called an appeal. And there are choices to even go to Federal Court if the state court is rubber stamping void instruments. But the time for doing that has expired on all but a few cases and the judicial doctrine of finality is the most difficult to overcome. Even a condemned man usually will be put to death even if there is actual evidence of innocence after a period of time has expired and a number of appeals have been exhausted.

SO that is my long winded way of saying I don’t know. If Yvanova opens the door to many new openings of closed cases, it certainly doesn’t say so. But a defense of a current case — even one amended to cite Yvanova, might fare much better.

The real answer: pick a path and try it.

Utah Judge Voids Foreclosure Sale — It Never Happened

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see Judges Order at

This case shows how Recontrust — an entity created and controlled by Bank of America — goes down in flames AFTER the sale of the property. The Judge found that Reconstrust was not a proper “substitute trustee” and in my opinion neither are any of the other “substitute trustees” in the context of loans subject to false claims of securitization.

The case is a direct instruction to do what I have been advocating for years. If you think you have a meritorious defense or attack on the foreclosure, deny the implied claims, and plead and prove that your objection is not based upon procedural irregularities, but rather on the fact that the party seeking to sell or foreclose the property never had any right to appear must less enforce anything involved in the loan.

In this case the status was that the sale had already occurred and Recontrust was seeking the usual eviction. The Judge, separating the chafe from reality simply said that Recontrust had no rights whatsoever and that the eviction would not occur (judgment entered for homeowner) and that the reason why the homeowners wins is that the foreclosure sale was void ab initio.

The lesson is that if you are going to try to split hairs you are at best headed for a continuance so that there is an appearance of due process. But if you really want to win, then you need to learn something about securitization — the concept, the written documents and the actions by parties claiming rights under self-serving documents that are completely false.

Time Running Out on Foreclosure Renters


What’s the Next Step? Consult with Neil Garfield

For assistance with presenting a case for wrongful foreclosure, please call 520-405-1688, customer service, who will put you in touch with an attorney in the states of Florida, California, Ohio, and Nevada. (NOTE: Chapter 11 may be easier than you think).

Editor’s Comment: It would sound like a joke if it were not so real. First you oversell mortgages, throwing underwriting standards overboard, then comes the inevitable foreclosure and eviction of the homeowner — but not the tenant who WAS protected under Federal law but is no longer going to receive that protection. Millions of people are going to be seeking rental accommodations.

The result? rental prices will go up creating a new tax on those who rent, and housing starts will increase. Think about it, we build a bunch of houses, sell them as exorbitant rates knowing we are going to get thrown back in our lap, we create blighted abandoned neighborhoods and towns and subdivisions, and the solution selected is not to find a way to put people in homes that are unoccupied but to build more houses.

Policy makers like new construction because of the impact on jobs. Investors like renting because they get higher and higher rental income on their properties. But the essential problem of homelessness will remain because the rents will be priced outside the capability of the prospective renters.

Wouldn’t it be a better idea to keep the homes occupied, to prevent blighted neighborhoods where the cities bulldoze the homes away because the banks walked away from their responsibility as “owners?” Wouldn’t it be a better idea to keep getting tax revenue from these homes? Wouldn’t it be better for utilities and local businesses to have the people occupying these homes pay their bills and revive a stagnant economy and unemployment?

Of course we could start with extending the rights of tenants to stay in homes legally rented to them by the homeowners. But amongst the millions soon to be displaced are those homeowners who occupy their homes, who put earnest money into the deal and more money to fix up and furnish the place. Most of them had no idea that the amount demanded in the notice of default, in the foreclosure and in the auction was simply a wild guess without taking into account the money received from insurance, credit default swaps and federal bailouts.

Most had no idea that the party foreclosing on them had not invested one dime into the funding or purchase of their loan. These people were every much a victim of fraud as the investors who bought bogus mortgage bonds. We know the remedy for fraud but in this country it has a twist. If you are big enough and you commit fraud you to keep the money and property obtained through illegal or criminal means. But if you are the little guy then you get prosecuted for numbers on an application form that you never saw, much less filled out until closing along with a 3 inch stack of papers to initial and sign.


But the only reason why the party seeking eviction (forcible detainer) has standing is that title changed. The allegation of a change in title is an essential part of their pleading.

You should argue that if they bring up title then you have the right and obligation to defend it by showing that the title that was recorded was procured through fraudulent means.

The renter still owes the money to the homeowner. The response should be a counterclaim or interpleader in which the homeowner and the “new” owner fight it out over who gets the rent money. Otherwise the renter could be twice liable for the same rent if the unit owner prevails in overturning the foreclosure.

Renters At Risk In Foreclosure Crisis Rely On Short-Term Federal Law

Renters Foreclosure Crisis

A group of homeless people sit around the fire at their homeless encampment near the Mississippi River on Feb. 23, 2012, in St. Louis. (AP Photo/Tom Gannam)

A key law that has prevented millions of low-income tenants from becoming homeless is set to expire at the end of the 113th Congress, kicking off what experts warn could be a new wave of evictions.

Homelessness is up 16 percent among families in major cities since the beginning of the foreclosure crisis, according to a report from the U.S. Conference of Mayors, and the number of renters affected by foreclosure has tripled in the past three years.

While public attention has centered on homeowners, research shows rental properties constitute an estimated 20 percent of all foreclosures, and 40 percent of families facing foreclosure-related evictions are renters. Those numbers translate into millions of Americans at risk of homelessness, many of them children.

What stands between many of those children and the streets is a little-known federal law that, barring congressional intervention, will expire in 2014.

In 2009, the Protecting Tenants at Foreclosure Act (PTFA) granted renters the right to stay in their homes until the end of their lease or, if they have no lease, for a minimum of 90 days. Without that guarantee, renters are dependent on a patchwork system of state and local protections that range from quite good — in California and Connecticut, for instance — to completely inadequate.

“States have not stepped up to ensure protections within their jurisdictions,” said Tristia Bauman, a housing attorney at the National Law Center on Homelessness & Poverty. “And so the PTFA is still the best protection available and we want to make sure that it lasts beyond 2014.”

Bauman is the primary author of the law center’s new report, “Eviction (Without) Notice,” that warns the homelessness problem for renters will only continue to worsen. The total number of renters has increased by 5.1 million nationally since 2000. In 2010, renters made up the majority of households in several of our nation’s most populous cities, and their numbers are expected to grow.

“This report shows how important PTFA’s protections are and the need to make them permanent,” said Maria Foscarinis, executive director of the National Law Center on Homelessness & Poverty in a statement. “But it also shows that, because many people are not aware of the law and oversight is limited, PTFA rights are often violated — leaving families across the country out on the street.”

A survey of 156 renters, many of them unaware of their rights under federal law, found the failure of new owners to determine the occupancy status of residents in foreclosed properties to be among the top PTFA violations cited by respondents.

“We found that new owners may make no effort to determine if the property is occupied,” said Bauman. “The tenant is left in a position where they may not know their properties have changed hands until they come home and their door is locked.”

A survey of 227 legal rights advocates cited lack of communication from new owners (85.9 percent); illegal, misleading or inaccurate written notices (68.1 percent); and harassment from real estate agents, law firms or bank representatives (61.1 percent) as top problems.

Pointing to these violations of the PTFA and the ongoing risk of homelessness as a result of the foreclosure crisis, Bauman said, “All of this speaks to the need for this law to continue to be a protection.”

1.5 Million Seniors Foreclosed — Most Illegally

What’s the Next Step? Consult with Neil Garfield


For assistance with presenting a case for wrongful foreclosure, please call 520-405-1688, customer service, who will put you in touch with an attorney in the states of Florida, California, Ohio, and Nevada. (NOTE: Chapter 11 may be easier than you think).

Editor’s Comment and Analysis: As I predicted (along with many others), the foreclosure scam is reaching further and further to all segments of the population. With more than half of all homeowners under 40 being “underwater” and the release of information showing that widows are being hit hardest, the statistics showing 1.5 million foreclosures on people over 50 are hardly surprising. But they don’t tell the whole human story of grief, confusion and disbelief that the banks would engage in large-scale fraud.

It is ironic that many of the millions who were hit with foreclosure were the same people who joined the public outcry against mortgage relief because they were playing by the rules, making their payments, and also losing money. They failed to educate themselves and their naive belief that the debts were legitimate and the borrowers were deadbeats led the public, the media, and those who pull the levers of power in Federal and State government to conclude that the debts were legitimate and the market simply went sour.

To call these debts legitimate in the face of absolutely incontrovertible facts regarding appraisal fraud, forgery, robo-signing, and lies told in in court is akin to drawing the distinction between rape and legitimate rape. You can argue all you want about what a woman should look for to “detect” a possible criminal and and argue circumstances when she “asked for it” but rape is rape.

And you can argue all you want about how homeowners should have read a pile of papers 6 inches thick to determine what was really going to happen to their lives if they signed those papers and that they should have investigated who was behind the easy money, but in the end they were the victims, just like many investors were the victims.

And until we agree that the money the banks received should have been allocated to the investors on whose behalf they received the money we won’t know the amount of the debt of the homeowner, if any, that is remaining. Allowing foreclosures to start, foreclosure “sales” to be conducted, foreclosure deeds to be issued “for cash received” when they accepted a credit bid from a non-creditor, and then allowing evictions was and remains wrong.

In fact, while I have not seen a study analyzing this, I’ll bet you will find that the same people who were foreclosed were on pensions paid by managed funds that bought the bogus mortgage bonds that enabled the mortgage meltdown in the first place.

So the same people were both losers in investing in mortgages and then losers when their own money was used against them in deals that were impossible to be viable.

The tragic irony here is that most borrowers still don’t get it. They also think the debts are legitimate and that any claims of fraud or predatory loan practices are just ways of delaying the inevitable foreclosure and eviction.

Precious few homeowners have any idea that they have legitimate defenses and remedies that would lead to a mortgage-free house or a modification that uses fair market value as a basis for the loan balance and applies the payments received by creditors from insurance, credit default swaps and federal bailouts.

In what I have called Deny and Discover, lawyers following this blog or who have arrived at the same conclusions on their own are winning case after case. Mark Stopa published an article about 14 cases in Florida in which 14 different judges entered summary final judgment FOR THE BORROWER!

As the banks plant articles warning against strategic defaults, ultimately, there is no debtor’s prison in this country and they can’t do a thing about it. And widows, pensioners and others who are on fixed incomes and facing rising medical and living expenses are forced into default. This mess will take decades to clear up unless government does its job of governing and applying the same set of rules to everyone. If you commit fraud, you owe restitution and you are punished either civilly or criminally.

The Banks, Rushing To Foreclose So They Can Sit On Vacant Homes

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Editor’s Comment:


These damn judges here in Florida, they really need to wake up, start working harder and grant more foreclosures more quickly.  Hurry up already, and stop whining about budget cuts and staff positions cut, and who cares that the entire state court system is funded by less than one percent of the state budget, and shut up about case loads that have tripled to 3,000 or more cases per judge and frazzled judicial assistant.  Just grant those damn foreclosure judgments….after all, everyone knows the economy cannot recover until these damn slacking judges push through this foreclosure backlog….right?

Oh wait a minute, there’s apparently a bit of a fly in this ointment.  You see, apparently the banks are cancelling foreclosure sales just as quickly as our good judges are able to sign those damn Final Judgments of Foreclosure…yup…apparently, now wait just a dadgummed minute.

You mean to tell me our elected circuit court judges are busy throwing families out into the streets just so the banks can amass ever larger portfolios of vacant and abandoned properties that they are apparently not responsible for taking care of?

Well shut my mouth!  You don’t say?  Really!  No way?  Do you mean to tell me we can’t blame all this on our under-funded judges and this ain’t the fault of those damn ethically-challenged foreclosure defense attorneys what with all their delay tactics and pesky rules and those absurd arguments about THE LAW…blah, blah, blah.

When exactly will this nation wake up and start directing appropriate anger and rage at the real evil that’s hard at work, everyday all across this sleeping nation?

From the Tampa Times:

It’s an oft-repeated pattern.

In the last 12 months, lenders have canceled auctions on 4,204 properties in Pinellas and Hillsborough counties. Sales have been canceled two, three, even nine times on some homes.

In many cases, banks delay seizures to avoid having to pay maintenance bills or homeowner association fees. Meanwhile, neighbors fend off vandals and thieves and worry about property values falling because of the deteriorating houses.

The repeated cancellations burden the court system.

“These never seem to go away,” said Thomas McGrady, chief judge of the Pinellas-Pasco County Circuit. “It’s a nuisance.”

Mortgage Rates in U.S. Decline to Record Lows With 30-Year Loan at 3.84%

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Editor’s Comment:

It appears as though Bloomberg has joined the media club tacit agreement to ignore housing and more particularly Investment Banking or relegate them to just another statistic. The possibilities of a deep, long recession created by the Banks using consumer debt are avoiđed and ignored regardless of the writer or projection based upon reliable indexes.

Why is it that Bloomberg News refuses to tell us the news? The facts are that median income has been flat for more than 30 years. The financial sector convinced the government to allow banks to replace income with consumer debt. The crescendo was reached in the housing market where the Case/Schiller index shows a flash spike in prices of homes while the values of homes remained constant. The culprit is always the same — the lure of lower payments with the result being the oppressive amount of debt burden that can no longer be avoided or ignored. The median consumer has neither the cash nor credit to buy.

Each year we hear predictions of a recovery in the housing market, or that green shoots are appearing. We congratulate ourselves on avoiding the abyss. But the predictions and the congratulations are either premature or they will forever be wrong.

The financial sector is allowed to play in our economy for only one reason— to provide capital to satisfy the needs of business for innovation, growth and operations. Instead, we find ourselves with bloated TBTF myths, the capital drained from our middle and lower classes that would be spent supporting an economy of production and service. That money has been acquired and maintained by the financal sector giants, notwithstanding the reports of layoffs.

From any perspective other than one driven by ideology one must admit that the economy has undergone a change in its foundation — and that these changes are ephemeral and cannot be sustained. With GDP now reliant on figures from the financial sector which for the longest time hovered around 16%, our “economy” would be 50% LESS without the financial sector reporting bloated revenues and profits just as they contributed to the false spike in prices of homes. Bloated incomes inflated the stampede of workers to Wall Street.

Investigative reporting shows that the tier 2 yield spread premium imposed by the investment bankers — taking huge amounts of investment capital and converting the capital into service “income” — forced a structure that could not work, was guaranteed not to work and which ultimately did fail with the TBTF banks reaping profits while the rest of the economy suffered.

The current economic structure is equally unsustainable with income and wealth inequality reaching disturbing levels. What happens when you wake up and realize that the real economy of production of goods and service is actually, according to your own figures, worth 1/3 less than what we are reporting as GDP. How will we explain increasing profits reported by the TBTF banks? where did that money come from? Is it real or is it just what we want to hear want to believe and are afraid to face?

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