Hawaii Supreme Court: Yes to wrongful foreclosure counterclaim BEFORE foreclosure is completed and no to”plausible” pleading

Now that the courts are no longer in fear of precipitating an economic meltdown, it’s time to return to legal decisions instead of political decisions. The Hawaii Supreme Court has done just that in a common sense decision that sweeps aside most of the Wall Street arguments against allowing homeowners to raise the fraudulent foreclosure issue. The decision goes back decades in reaffirming the law and the intent of the rules of civil procedure.

The bottom line is that homeowners must be allowed an opportunity to prove their claim at the same time they are defending a foreclosure action. This levels the playing field and hopefully is a harbinger of future decisions from the high court in each of the states.

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.

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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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see Landmark Hawaii Supreme Court Case

BANK OF AMERICA, N.A., SUCCESSOR BY MERGER TO BAC HOME LOANS SERVICING, LP FKA COUNTRYWIDE HOME LOANS SERVICING LP, Respondent/Plaintiff-Appellee, vs. GRISEL REYES-TOLEDO, Petitioner/Defendant-Appellant,

Remember that while this decision could be used as persuasive authority, it is not binding authority over the courts of any state other than Hawaii.

There are several parts to this decision each consistent with the others.

  1. On a motion to dismiss, plausibility of the allegations are now irrelevant. The homeowner must be given the opportunity to prove the allegations of the complaint. As the Court correctly points out, the plausibility test requires some consideration of some facts that have not been proven or disproven. Hence the plausibility test conflicts directly with the presumption, on a motion to dismiss, that all allegations are true. “Notice pleading” is the law in Hawaii and purportedly is so in many other states where plausibility tests are nonetheless applied. This opinion may go a long way to reversing that erroneous trend.
  2. Notice pleading requires only a short plain statement of ultimate facts upon which the relief sought could be granted. But I would add that the rules about fraud and deceit are still in play, i.e., I don’t believe that any state, including Hawaii would allow a count sounding in fraud without giving some examples in the pleading of the misleading and/or deceitful way that the defendant(s) acted. This decision basically addresses violation of statute and similar kinds of actions.
  3. The implication of this decision is that the pleading should be short and that the homeowner must be given a fair chance to prove his/her allegations.
    1. I am quite certain that this Court would insist on allowing discovery to penetrate far more deeply that is currently generally allowed.
    2. The arguments that the actual transactions and the actual creditor’s identities are private, proprietary and remote was silly to begin with.
    3. This decision will be used by practitioners in Hawaii to demand access to records and to get it through court orders. This alone will result in a landslide of settled cases under seal of confidentiality — if lawyers for homeowners insist on such discovery.
  4. Further moving the ball forward, this Court decided emphatically that claims of wrongful foreclosure can be filed in a counterclaim against the parties involved with the  initiation of wrongful or illegal foreclosure proceedings. That means that contrary to California law and other states, the homeowner does not need to wait to file the claim.
    1. This is a two edged sword. It virtually mandates the filing of the wrongful foreclosure claim because the clock is probably ticking on the statute of limitations the moment the foreclosure is initiated by either judicial or nonjudicial means.
    2. The California doctrine has always been ridiculous and anti-consumer. By denying access to the courts for what is already known to be a wrongful foreclosure based upon false documentation they tie both hands behind the backs of attorneys representing homeowners in foreclosure cases.
    3. Knowing this, most lawyers are now declining representation of homeowners despite clear defects, lies and fabrication of documents relied upon by the lawyers supposedly representing a foreclosing party that many times does not even exist.
    4. Hence the doctrine that wrongful foreclosure claims ONLY arise after the foreclosure is complete produces an absurd result. Once the homeowner proves his/her claims they shouldn’t have lost their home, their life-style and their credit reputation, all based upon illegal acts that were known at the outset, the only remedy under that doctrine is money damages.
  5. The decision also addresses the very important issue of standing. Simply stated, if some party is designated as the foreclosing party, it is the duty of that party and the attorney representing that party to perform sufficient due diligence as to
    1. whether the entity exists,
    2. whether it has possession of the note,
    3. whether the note is endorsed to them by a party who owned the debt,
    4. whether the mortgage or deed of trust was assigned to them by a party that owned the mortgage and the debt, and
    5. whether the debt was in fact transferred from a party who owned the debt to the party claiming the right to foreclose.
  6. If they fail or refuse to perform that due diligence they are violating the law in Hawaii and most likely in dozens of other states. In Hawaii that alone gives rise to a cause of action for damages if damages can be proven, which in most cases is fairly easy. So they are liable for damages if they didn’t perform due diligence.
  7. If they did perform the due diligence and filed knowing that the threshold markers of legal standing are absent, it is malicious abuse of process, it is breach of statutory duties, and it is fraud because the filing of the the lawsuit is a representation that the due  diligence was completed and showed legal standing. And it is probably RICO.

Summary: While it is difficult to predict how and when other states will react to this opinion, it seems likely that this decision in the State of Hawaii will make jurists in other states very uncomfortable. The bias to rule for the alleged foreclosing party just received a blow to any rationality supporting that bias.

Banks and Servicers Really DO Tell Homeowners Not to Pay — To Trap Them Into Foreclosure

The story is basically the same. Hundreds of thousands of homeowners were told that in order to get refinancing or modification they needed to stop paying their monthly mortgage payments. This was a ruse. It was also practicing law without a license. It was a lie aimed at trapping homeowners into a position where they could not recover. Thousands of judges have heard the same story from hundreds of thousands of homeowners and still they refuse to believe it.

Get a consult! 202-838-6345

https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments.
 
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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see http://ijr.com/2016/10/725120-bank-told-couple-not-to-pay-mortgage-while-refinancing-then-they-got-a-letter-that-ruined-their-lives/

The goal is to get homeowners into foreclosures. The plan is pretty simple. Use any means available to force the homeowner into a foreclosure. This takes several forms — one of which is the intentional “negligence” in the posting of payments and forced placed insurance that I have previously written about.

But by far the the largest scheme at work is the wrongful representation that homeowners must be 90 days behind in their payments in order to be considered for any modification or refinancing. It just is not true. And it never was true.

The script given to “representatives” (call centers) is careful not to specifically say “you must stop making payments and continue to make no payments for at least 90 days”. Instead the script contains a lie about how if they are current they cannot be considered for a workout, refinancing or modification.

And getting them to stop payments means that they won’t get refinancing because they will already be delinquent on their current “mortgage” loan.

And getting them to stop for at least 90 days means that for three months the beleaguered homeowners THINK they have some relief, while at the same time the “delinquency” is mounting to levels from which they can never recover.

All this is happening while the frightful homeowners receiving notices of foreclosure are told not to worry about it — it’s just one hand not knowing what the other is doing. But in the vast majority of cases the foreclosure notices are real and the promise of refinancing or modification is simply a lie.

ESTOPPEL: There actually is a legal doctrine that covers this situation without establishing a fiduciary relationship. Reasonable reliance upon a representation that misleads the homeowner into taking actions that work to their detriment is covered by the doctrine of estoppel. It works in many situations. The statement that homeowners must be 90 days behind to be considered for a workout, refinancing or modification is untrue. The homeowner is reasonably relying upon a large financial or non financial institution to give them correct information inasmuch as the institution has greater access better understanding of the laws and rules. If the homeowner reasonably relies upon such representations to his/her detriment the bank or servicer should be stopped, in a court  of equity, from taking advantage of an action that was the proximate result of their own representation.

Most judges and lawyers still look at the mortgage situation through the lens of law school and their early practice — before the era of “securitization fail” (Adam Levitin). The thought that banks would want loans to be non-performing is preposterous through that lens. But it would also be preposterous for those same banks to have spawned an era of fabricated, fraudulent and forged paperwork that led to multiple consent decrees and the 50 state settlement.

The plain truth is that the old lens is occluded, in need of cataract surgery.

If you remove the premise that the banks want the “loans” to be performing and substitute the premise that they want the loans to be non-performing, everything makes sense. Of course this dove-tails with my many earlier articles about the absence of an actual loan contract. The business model of the banks is essentially a cover-up and making a profit from the cover-up as much as the original illegal acts.

What the banks have succeed in doing in millions of foreclosures is the introduction of a court order into an otherwise false and broken chain of claims of ownership and authority by those who stole money from investors and now regard the loss of homestead as collateral damage to people who just don’t matter.

The court order or Judgment does something that none of the prior fabricated, forged, robo-signed documents could do on their own — it provides cover for all the preceding illegal acts because a court order is presumed to be the law of the case. The courts have been the unwitting pawns in this game whose strategy crosses both state and international boundaries.

And perhaps the really shocking thing about all this is that the bank crisis in 2008 was in actuality an illusion. The only thing the banks stood to lose was prospective profits. Their scheme hoodwinked the highest levels of government. That’s what happens when you rely on the conspirators to provide data on a crisis they created out of thin air. They knew there was nobody in government who could figure out why the banks were hard selling loan products that were (a) unprofitable and (b) doomed to fail. The banks did not engage is risky behavior. There was no risk to them. It was only risky for the rest of us.

Somewhere along the line here the courts are going to get cornered into finally deciding what happens when a thief steals money from someone and then uses some of the money to lend to someone else, without either the victim of theft or the “borrower” knowing the truth.

“Credit Bid” Comes Under Scrutiny in 9th Circuit

As I have been writing and talking about the forced judicial sales, my opinion has always been that in most cases there is an absence of evidence that the party making the credit bid was in fact the creditor thus entitled to make a “credit bid” at the auction. The credit bid is an allowance for the creditor to bid up to the amount of the debt owed to them without paying cash at the sale. This has been ignored since I first started writing about it. I think the credit bid is void and fraudulent if a non-creditor submits a credit bid when it is not the creditor. In nonjudicial states this is an easier proposition than in judicial states where a Final Judgment has been rendered.

This case is also notable because it finally addresses the issue of the liability of the Trustee on a deed of trust, concluding that if the party claiming to be the beneficiary was in fact not the beneficiary, and there is no evidence to suggest otherwise, the trustee is potentially liable. It would be helpful to pursue discovery against the Trustee, since it is always a “substituted trustee” that is in fact under the thumb or owned by the parties who are making self-serving declarations of their status as “beneficiaries” under the deed of trust. THAT of course provides grounds to object and challenge the substitution of trustee and everything that follows. If the self-proclaimed beneficiary is a nonexistent entity or otherwise does not conform to the statutory definition of a beneficiary, then it has no power to substitute a new trustee. And everything that the trustee does after that point is void. In discovery look for the agreement that says the new Trustee is indemnified and held harmless for all claims, violations etc. It’s there — but you need to force the issue.

THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER. ALSO NOTE THAT THIS IS NOT YET PUBLISHED AND THEREFORE IS NOT MANDATORY AUTHORITY YET.
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Get a consult! 202-838-6345

https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments.
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see 9th Circuit decision, Jacobsen v. Aurora Loan Services, Case No. 12-17021

Wrongful foreclosure. We reverse the district court’s grant of summary judgment in favor of Aurora on the wrongful foreclosure claim. In California, the elements of a wrongful foreclosure action are (1) the trustee or mortgagee caused an illegal, fraudulent, or willfully oppressive sale of real property pursuant to a power of sale in a mortgage or deed of trust; (2) the party attacking the sale was prejudiced or harmed; and (3) in cases where the trustor or mortgagor challenges the sale, the trustor or mortgagor tendered the amount of the secured indebtedness or was excused from tendering. Sciarratta v. U.S. Bank Nat’l Ass’n, 202 Cal. Rptr. 3d 219, 226 (Ct. App. 2016). The district court erred by granting summary judgment on the ground that it found nothing wrong with the foreclosure sale.
First, the district court failed to review the record in the light most favorable to the non-movants when the district court assumed that the form of Aurora’s bid at the foreclosure sale was a cash bid. On appeal, the parties now agree that the form of the bid was a credit bid.
Second, a genuine dispute of material fact remains regarding whether Aurora properly made a credit bid. California law permits “present beneficiary of the deed of trust” to credit bid at the foreclosure sale. Cal. Civ. Code § 2924h(b). However, it is not uncontroverted that Aurora was the present beneficiary of the deed of trust. A deed of trust is “inseparable from the note it secures.” Yvanova v. New Century Mortg. Corp., 365 P.3d 865, 850 (Cal. 2016); see also Domarad v. Fisher & Burke, Inc., 76 Cal. Rptr. 529, 536 (Ct. App. 1969) (“[A] deed of trust has no assignable quality independent of the debt, it may not be assigned or transferred apart from the debt, and an attempt to assign the deed of trust without a transfer of the debt is without effect.”). The record contains evidence that Aurora did not “own” O’Brien’s loan before the foreclosure. ER 19-20, 136-38, 181. However, the record also contains evidence that Aurora is “currently in possession” of the original promissory note, which was endorsed in blank, although it is not clear from Aurora’s declaration when Aurora became the holder of the note.[4] [ER 179-80; 185-195]. It appears that there remains a question of fact whether Aurora was the “beneficiary” of the deed of trust at the time of the foreclosure and thus whether it was entitled to make a credit bid at the foreclosure sale, and we remand for the district court to address this issue in the first instance.
Moreover, in order to prevail on their claim of wrongful foreclosure, Plaintiffs must also show that they suffered prejudice or harm as a result of irregularities or illegalities in the foreclosure sale. Sciarratta, 202 Cal. Rptr. 3d at 226. Because the district court granted summary judgment to Aurora on a different ground, the court did not address the element of prejudice or harm. In the circumstances, we also deem it prudent to remand this claim to the district court to consider the prejudice question in the first instance. We therefore reverse the district court’s grant of summary judgment on the wrongful foreclosure claim and remand for further proceedings.[5]
AFFIRMED IN PART AND REVERSED AND REMANDED IN PART. The parties shall bear their own costs on appeal.
[**] The Honorable James V. Selna, United States District Judge for the Central District of California, sitting by designation.
[*] This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3.
[1] The district court did not address standing. However, “[w]e may affirm on any ground supported by the record, even it if differs from the rationale used by the district court.” Buckley v. Terhune, 441 F.3d 688, 694 (9th Cir. 2006) (en banc).
[2] We GRANT both parties’ requests for judicial notice.
[3] In their reply, Plaintiffs suggest that their cancellation of instruments claim survives their contention that the note and deed of trust were void ab initio. Because this argument was first raised in the reply brief, we deem it waived. Delgadillo v. Woodford, 527 F.3d 919, 930 n.4 (9th Cir. 2008).
[4] Note that in today’s modern mortgage world, the “owner” of the underlying debt (that is, the entity who will receive the ultimate economic benefit of payments from the note, less a servicing fee) and “holder” of the note (the party legally entitled to enforce the obligations of the note) are not always one and the same. See, e.g., Brown v. Wash. State Dep’t of Commerce, 359 P.3d 771, 776-77 (Wash. 2015) (discussing modern mortgage practices and the secondary market for mortgage notes; “Freddie Mac owns [borrower’s] note. At the same time, a servicer . . . holds the note and is entitled to enforce it.“)(emphasis added). It thus appears possible that the “beneficiary” under the deed of trust would follow with the note (and with the entity “currently entitled to enforce [the] debt”), rather than the income stream. See Yvanova, 365 P.3d at 850-51; see also Hernandez v. PNMAC Mortg. Opp. Fund Investors, LLC, 2016 WL 3597468, *6 (Cal. Ct. App. June 27, 2016) (unpublished) (if the foreclosing party “could properly and conclusively establish . . . that it did hold the Note at the [time of foreclosure], that would be dispositive and preclude a wrongful foreclosure cause of action because a deed of trust automatically transfers with the Note it secures—even without a separate assignment.”)(citing Yvanova).
[5] We also reverse the district court’s grant of Cal-Western’s motion to dismiss the wrongful foreclosure claim. The trustee must conduct the foreclosure sale “fairly, openly, reasonably, and with due diligence” “to protect the rights of the mortgagor and others.” Hatch v. Collins, 275 Cal. Rptr. 476, 480 (Ct. App. 1990). Here, the complaint alleges that Cal-Western’s acceptance of a void credit bid was unlawful. If the credit bid was void and the acceptance of the credit bid was unlawful, Cal-Western failed to conduct the foreclosure sale with due diligence, and thus the complaint states a claim against Cal-Western.

 

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.

Getting Your Goals Set on the Right Conclusions

For further information please call 954-495-9867 or 520-405-1688.

This for general information only and NOT an opinion on your case.
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I was responding to a client about the goals in opposing the wrongful foreclosures. These are hard to write or say. It might seem to be a contradiction in terms to walk away with a waiver of deficiency or some other “Settlement” or “Modification” with a party whom you know (but may not be able to prove) is false party with fake papers.

You might believe there might be as much as $50,000 in equity if and when repairs are made. My concern is that we don’t get pulled into reverse logic here. If the house is barely break-even without the repairs, then it could be wise to pursue short-sale or modification.  The real question is how much will it really cost to make the required repairs and where would you get the money from?

This is where most lay people put the cart before the horse. Equity in the home is not a matter for speculation, nor should it be calculated from a starting point of “after repairs.”

If you are looking for the pretenders to pay you damages sufficient to pay for the repairs and for them to give up on the foreclosure, it would be a mistake to assume that is going to happen without full scale litigation for wrongful foreclosure seeking money damages. That would require a lot of money in fees, costs and other expenses. You should determine whether  you have any appetite for that.

If you did have the money for repairs, then it would seem that you would have made the repairs and then sold the house, taking your equity and paying off whoever is claiming to own the loan, even if they don’t. If you don’t have the repair money, that leaves the only source of money to fix the house as the parties who wish to foreclose on it.

I have never seen them  agree to anything like that for one simple reason: They are not interested in either the house or the money. They want a foreclosure judgment and sale — that is the only path that will give them some protection against accusations of stolen money and stolen homes.

 

Since the goal of your opposition is NOT to break-even or minimize damages on the loan itself, and since their real goal is more closely related to off-record transactions in which your loan was sold multiple times, they obviously are not going to make it easier for you to save the home, save the equity, and especially [not] save the loan. They want the loan to fail not succeed. They want the foreclosure sale.

 

Now the anger and frustration nationwide with all forms of institutions flows in large part from the simple fact that we all know that the banks committed serious fraud and other illegal acts in creating these loans. We all know that there was nothing but pretense and presumption in transferring these loans and steering loans to foreclosure — rather than a workout where the original loan investments were protected, and of course foreclosure with fabricated, forged, back-dated documentation that included notes and sometimes mortgages — even if they were rescinded.

“We all know” is insufficient to prove a case or a defense. The courts have added to the problem by restricting discovery, restricting evidence on the basis that the off-record transactions (even in discovery) are irrelevant, that the money trail for the subject loan is irrelevant, and then entering orders and judgments consistent with the conclusion that might be stated as follows: “Judgment is entered in favor of the one with the most paper even if the paper does not speak the truth.”

 

My tentative conclusion, if all of my presumptions are correct, is that in situations where this analysis is relevant, on an individual basis, as a life decision, the only real goal might be to walk away without a deficiency judgment and leave it at that. Any other course of action in litigation will lead to a judgment in the trial court that statistically speaking is going to be against the homeowner, leaving the issues to be decided on appeal. That is process that will likely take at least one year and probably 2 years to complete.
From my perch of course I want all notes and mortgages to be contested if there are any claims of securitization or sale. And the proof of concept is already established — those who truly litigate all the way down to trial, have a much better chance to see a much better result than those who simply walk away. But that costs money, time and energy. And that is why I often tell lawyers and homeowners that the only right decision is what the homeowner decides to do and is willing to pay for.

Missouri Wrongful Foreclosure: Trial Court Awards over $3 Million Including Punitive Damages and Quiet Title

For further information please call 954-495-9867 or 520-405-1688

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see Quiet title Wrongful foreclosure Punitive Damages Missouri judgment.1-26-15.pdf ocr

Missouri had been impenetrable. Things change. This case finds that neither the GSE nor anyone else in the chain had the power to enforce the paper because they did not really have ownership of the loan, that their title was false, that quiet title is granted to plaintiffs, that foreclosure was wrongful, that compensatory damages are awarded and that punitive damages would be awarded. Total Judgment $3 million +.

Important takeaways —

  1. The tide has turned. Courts are no longer looking the other way on intentionally sloppy foreclosures that cover up a larger fraud on investors. The courts are not clear on how that occurred, partially because nobody has been allowed to present  it, but they have enough of a feel of the situation to see that there is something fundamentally wrong with the mortgage origination and foreclosure practices.
  2. Quiet title can be awarded supported only by a finding that the mortgage is unenforceable. Whether this will stick on appeal is unknown. My view is that the mortgage stays although there is nobody (yet) claiming a genuine right to enforce it.
  3. At this point, if the foreclosing parties don’t have it right, it is viewed as an intentional or grossly negligent act, giving rise to compensatory damages, attorney fees, costs, and punitive damages.
  4. The value of a wrongful foreclosure case might be $3 million + which falls into line with other decisions.
  5. Judges are getting angry over the fact that they accepted false representations in the past.
  6. Judges are perceiving the difference between the debt and the paper that purports to describe the debt — i.e., the note and mortgage. While it is not expressed in so many words, this decision and others like it, sees the paper as largely fictitious even though there is a genuine debt out there. By implication, the courts are saying the debt has no paper that applies and that therefore nobody should be allowed to enforce the paper. It is close to declaring the mortgage void ab initio.

Title After Wrongful Foreclosure: Martha Coakley Getting to Heart of the Problem of Fraudulent Foreclosures

For further information please call 954-495-9867 or 520-405-1688

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see Massachusetts Settlement: Fine PLUS Curing Title Defects

Martha Coakley gets it. She is the attorney general of Massachusetts. And she alone has enforced the law the way it should be enforced. When a bank or anyone else files a fraudulent foreclosure action they should pay for it AND the title should be corrected. If the foreclosure was false then the title is defective as shown in the county records. All previous national and state settlements were for money only. In this case four banks have agreed that they will pay a fine AND take all necessary steps to cure title. The four banks are the usual suspects — Bank of America (BOA), Chase, Citi, Wells Fargo.

Bank of America, Citi, JPMorgan Chase, and Wells Fargo were accused of violating Massachusetts foreclosure laws and the Massachusetts Consumer Protection Act by foreclosing on properties in the Commonwealth when they did not hold the rights to the mortgages, and therefore did not legally have the right to foreclose….

The Massachusetts AG office alleges in the amended complaint that the four banks ignored a fundamental legal mandate established in the Supreme Judicial Court’s Ibanez decision in January 2011 that mortgagees must strictly comply with the Commonwealth’s foreclosure laws. The Massachusetts foreclosure law states that a mortgage is void if whoever initiates the foreclosure does not hold the mortgage through valid assignment or is not the mortgagee of record at the time the foreclosure notice is published.

The complaint further alleges that the four banks did not obtain a valid assignment of the mortgage prior to publishing foreclosure notices on the properties and therefore the foreclosures should be invalidated. Also according to the complaint, the banks’ actions adversely affected the marketability and insurability of titles to numerous properties in the Commonwealth.

As part of the settlement, the banks will be required to assist consumers who claim the title to his or her residence is void from an unlawful foreclosure. Assistance will likely include conducting a thorough title review, providing curative documents, releasing junior leans held by banks, and paying costs associated with the title cure in cases where consumers do not have title insurance, according to the Massachusetts AG office.

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