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

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

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

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

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see scotus oral argument on fdcpa 17-1307_apl1

Hat tip to Charles Cox

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

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

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

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

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

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