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By Moe Bedard (Filed Under Stop Foreclosures Effectively)
This is the question of the day floating throughout the legal blog sphere and I wanted to elaborate on this subject that we have covered extensively here “first” on LoanWorkout.org in the past.
In federal court, written proof of who holds the mortgage must be presented at the time the foreclosure is filed. In county common pleas courts, proof must be presented before a judgment is issued.
Our past “missing note” and “illegal foreclosure proceedings” blog posts focused in the great State of Ohio and the honorable Federal Court Judges, Boyko, Rose and O’Malley decisions that sent shock waves throughout online legal communities everywhere.
1. Deutsche Bank Foreclosures Tossed Out of Ohio Federal Court – “They Own Nothing!” - Judge Christopher A. Boyko of the Eastern Ohio United States District Court, on October 31, 2007 dismissed 14 Deutsche Bank-filed foreclosures in a ruling based on lack of standing for not owning/holding the mortgage loan at the time the lawsuits were filed. Read Boyko’s decison here.p>True Sale, False Securitizations – Typically the sale is followed up by an unlawful detainer proceeding to evict the former owners. The way in which the logic of this court could be used is by filing a complaint and Preliminary Injunction in a court in the county where the property is located. The injunction would stay any foreclosure proceedings by the trustee. A declaratory judgment could also be obtained that would declare the rights of the trustee invalid and thus prevent them from taking future actions against the homeowner.
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3. The Judicial Integrity of the United States Court is “Priceless” – 27 More Foreclosures Dismissed – Jacksonville Legal Aid attorney April Charney remarked to us regarding the two Ohio decisions: ” As to the real ramification of the Ohio decision, aside from slowing the foreclosure trains, is that the fact that there were no “original” assignments rendering the sales of the mortgages to the trusts, in violation of the true sale obligations imposed by securities law. ”
4. 32 More Foreclosures Dismissed for Lack of “Documentation” - In another Ohio ruling on November 14th, State District Judge Kathleen Mc Donald O’Malley dismissed 32 more foreclosures for lack of “documentation”. Read the Deutsche Ruling, we reported on the Judge Boyko decision in which he dismissed 14 Deutsche Bank foreclosures and then was followed up by Judge Rose throwing out another 27 foreclosures the following day for lack of documentation.
Stephen Bucha, chief magistrate of Cuyahoga County Common Pleas Court, has dismissed hundreds of foreclosure cases for not having paperwork. He said it can be time-consuming and expensive for lenders to produce and record the documents, adding, “They wait until they have to do it.”
This will continue to prove to be a huge issue for securitized trusts to properly prove ownership with the legal documentation of these loans. Now, it appears that some homeowners (and judges) have caught on and it is expected that many more of these cases will be thrown out of courts across America.
While the very question of legality of the trusts’ methods is the one under debate here, the core point of our article series on the matter is that some Federal judges in Ohio are now agreeing that these practices are illegal and putting a stop to foreclosures that employ them.
California is a non-judicial foreclosure state. This means the banks do not file a complaint in court to foreclose on the property. They simply execute a Trustee Sale. This requires them to provide notices in strict accordance to the applicable laws. The sale is a private action that effectively terminates ownership rights by the borrower.
Typically the sale is followed up by an unlawful detainer proceeding to evict the former owners. The way in which the logic of this court could be used is by filing a complaint and Preliminary Injunction in a court in the county where the property is located. The injunction would stay any foreclosure proceedings by the trustee. A declaratory judgment could also be obtained that would declare the rights of the trustee invalid and thus prevent them from taking future actions against the homeowner.
There are other claims worth exploring that are derivatives of all this.
For example, perhaps a claim for slander of title since the trustee did not have the rights to initiate the foreclosure process. Claims under California Business and Professions Code Section 17200 (UDAP statute) may also be available. The leverage that a consumer attorney could use from this type of an action may very well make the difference between a homeowner staying in their home, or packing their bags.”
In researching the internet on other grass root consumer advocate websites, I came across a newly popular blog in which a Southern California Attorney reported that most all foreclosures filings in the state can be set aside.
“The power of sale by non judicial means is contained in the civil code 2932. In order to be valid the assignment must be recorded California civil code 2932.5. Most all notices of default recorded by the “Sub-Prime” lenders have not recorded an assignment till just before or just after the Trustee’s sale. They rely on the MERS agency agreement to protect them but under California law they are wrong.”
In an economic environment where the odds against the American homeowner are huge. It is a welcome breath of relief to know that there are ways a consumer can fight his unlawful foreclosure.
As noted before, true sale challenges and missing note theories are a viable foreclosure defense by consumer advocate attorneys and patriot homeowners who are willing to take up the fight against a foe that was though to be unbeatable in the past. Your lender!
Now, it looks as if the challenges that face lenders and banks may be more than just making it to the next quarterly earnings report with their head “barely” above water. It’s time for Main Street to proliferate the federal and state court systems across America and challenge these banks.
Right along with their exploding number of foreclosure cases across the country.
In an interview Friday, U.S. District Judge Dan Polster said he expected more foreclosure cases dismissed in federal court, including from his own docket.
The federal court here has about 1,000 pending foreclosure cases and is on track to have 1,200 for the year. Five years ago, it handled fewer than a dozen a year.
Polster said the court has become more vigilant in foreclosure cases because they are too one-sided. Many homeowners do not contest the foreclosure, so the lenders face no defense lawyers in court proceedings.
“It’s up to us to supervise it,” said Polster. “When you’re taking people’s homes, it falls to the integrity of the court.”
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