Court Turns Jaundiced Eye on Wells Fargo Robo-Mischief

Posted by NCBRC – January 31, 2015

Wells Fargo lacked standing to assert a claim pursuant to a Note secured by a Deed of Trust, where a forged indorsement in blank did not give it “holder” status under applicable Texas law.  In re Franklin, No. 10‐20010 (Bankr. S.D. N.Y.  Jan. 29, 2015).

As evidence in support of its first proof of claim Wells Fargo submitted: 1) the Note, dated October 30, 2000, payable to Mortgage Factory Inc. with a specific indorsement by Mortgage Factory to ABN Amro Mortgage Group, Inc. (“ABN Amro”); 2) a Deed of Trust securing the Note; 3) an Assignment of Lien, pursuant to which Mortgage Factory assigned its rights to ABN Amro; 4) an Assignment of Deed of Trust by ABN Amro assigning “all beneficial interest in” the Deed of Trust, together with the Note, to Mortgage Electronic Registration System (“MERS”) as nominee for Washington Mutual Bank, FA; 5) various loan modification forms involving Freddie Mac and Wells Fargo; and 6) an Assignment of Mortgage from MERS to Wells Fargo (including neither rights under the Deed of Trust, nor the Note). The assignment was dated July 12, 2010—three days before the date of the first claim—and was executed on behalf of MERS “as nominee for Washington Mutual Bank, FA” by John Kennerty, Assistant Secretary, presumably of MERS.

Upon challenge by the debtor Wells Fargo filed an amended claim which was identical to the first except that the copy of the Note attached to the second claim offered a deus ex machina in the form of a blank indorsement, signed by Margaret A. Bezy, Vice President, for ABN Amro.

The debtor challenged the second claim for: 1) lack of standing because Wells Fargo did not own the loan yet filed the claim on its own behalf, not as agent or servicer for Freddie Mac, 2) the blank indorsement was forged. (The debtor’s motion for summary judgment on the first objection was denied because Texas follows the common law rule that “the mortgage follows the note,” and the note is enforceable by the Holder.)

At the close of discovery, the court held an evidentiary hearing in which it considered the debtor’s testimony, testimony of a witness offered by Wells Fargo and the transcript of John Kennerty’s deposition. The court found that Wells Fargo was not a “holder” and, therefore, lacked standing to enforce the Note.

Where the Note was indisputably in Wells Fargo’s possession, the question was whether the blank ABN Amro indorsement by Margaret A. Bezy made Wells Fargo a “holder” with the right of enforcement. Under Texas law, an indorsement is presumed to be valid but that presumption may be overcome by “the introduction of sufficient evidence so that a reasonable trier of fact in the context of the dispute could find in the defendant’s favor.”

Walking through the evidence, the court turned to the deposition testimony of Mr. Kennerty finding that: 1) when Mr. Kennerty signed the Assignment of Mortgage from MERS to Wells Fargo, he was an employee of both MERS and Wells Fargo; 2) he signed the document three days prior to the date Wells Fargo submitted the first claim; 3) during the period that he executed the assignment he typically signed between 50 and 150 default documents per day without any real understanding of the legal significance of what he was doing. The court found that the evidence surrounding Mr. Kennerty’s execution of the assignment, while not directly related to the indorsement in blank upon which Wells Fargo ultimately relied, was suggestive of Wells Fargo’s willingness to forge documents for the purpose of deception.

There was more. Mr. Kennerty further testified as to practices within Wells Fargo when proper paperwork and assignments were not available. From this testimony the court concluded: “It constitutes substantial evidence that Wells Fargo’s administrative group responsible for the documentary aspects of enforcing defaulted loan documents created new mortgage assignments and forged indorsements when it was determined by outside counsel that they were required to enforce loans.”

Based on these findings, the burden of proof that the blank indorsement was not forged shifted to Wells Fargo. Wells Fargo offered the testimony of Mr. Campbell who had no personal knowledge of the documents in question but offered testimony to qualify them as authentic and to explain that the blank indorsement appeared in Wells Fargo’s electronic file prior to its filing the second claim. Mr. Campbell had no understanding of the technology used to maintain Wells Fargo’s records, how the records were entered or stored, or whether they could be changed once entered. He exhibited no understanding of the difference between indorsing assignments from Wells Fargo and indorsing them to Wells Fargo. Noting that the “business records exception” to the hearsay rule is liberally construed, however, the court found that Mr. Campbell’s testimony was enough to satisfy the requirement that the document in question “was kept in the course of a regularly conducted business activity and that the making of such record was the regular practice of that activity.”

Nonetheless, Mr. Campbell’s testimony did not dispel the conclusion that the Note was originally transferred to Wells Fargo with only the specific indorsement to ABN Amro and no blank indorsement. The court reasoned: “why would only an outdated and unenforceable version of the Note have been logged in by Wells Fargo when it took over the file in February 2007 if the only enforceable version of the Note had in fact existed at that time (and should have existed since 2002)? The far more likely inference, instead, is that when the loan was transferred to Wells Fargo, the Note with the blank ABN Amro indorsement did not exist.” The next question, that Wells Fargo could not explain to the satisfaction of the court, was how the blank indorsement entered the picture 22 months later. The court noted that even Washington Mutual Bank, FA, one of the links in the transfer chain, could not have had the right of enforcement without the blank indorsement. Yet it did not appear until long after the Note was in Wells Fargo’s possession. The court surmised that the course of the debtor’s repayment (and lack thereof) on the loan and attempted modifications, did not trigger the need for the indorsement in blank until the time that indorsement suddenly appeared. There was no evidence that the indorsement in blank was generated anywhere but within the walls of Wells Fargo to give it entitlement to enforce the Note.

The debtor’s objection to the claim was sustained.

Franklin Bankr SD NY opinion

Yvanova answer brief to the California Supreme Court Filed 1-28-2015

Yvanova 1.28.15 [Filed] Answer Brief on the Merits-v1

Will I Lose My Security Clearance if I File Bankruptcy? by Brett Weiss, Esq.

I practice in the Washington, DC area. Lots of my clients work for federal agencies and contractors who require security clearances as a condition of their employment. The first question they ask when them come to see me is whether a bankruptcy filing will cause them problems with their security clearance. The short answer I give: No, it will not.

This causes surprise, in large measure because of the urban legends about bankruptcy that just aren’t true. But why won’t bankruptcy have a negative impact on a security clearance? The reason is simply because bankruptcy makes you less of a security risk.

What makes someone a security risk? According to the Department of Defense, “The purpose of a security clearance is to determine whether a person is able and willing to safeguard classified national security information, based on his or her loyalty, character, trustworthiness, and reliability.” “All available, reliable information about the person, past and present, favorable and unfavorable, is considered in reaching a clearance determination. When an individual’s life history shows evidence of unreliability or untrustworthiness, questions arise whether the individual can be relied on and trusted to exercise the responsibility necessary for working in a secure environment where protection of classified information is paramount.”

Under this standard, it is not the bankruptcy itself that potentially could cause a problem, but the reasons the person files for bankruptcy. For example, if you run a Ponzi scheme, or if you defraud people, or if you committed criminal acts, and file bankruptcy as a result, this could be a problem. But if your or a family member’s illness caused financial problems, or if you were out of work or had your wages cut, or if you got divorced (events that cover almost 90% of all consumer bankruptcies), these don’t impact your reliability or trustworthiness and a bankruptcy that results won’t impact your clearance.

I have represented people who work at DOD, DIA, CIA, NSA and the White House, as well as every branch of the military. I have represented people with every possible security clearance, from Confidential to Top Secret (and the other clearances that have only letters and numbers describing them). NOT ONE has told me that a bankruptcy filing had any impact whatsoever on their security clearance, their job, or their advancement. I have even had clients tell me that their security officer told them that they needed to file for bankruptcy or they would lose (or not get) their clearance! The only requirement is that you tell your security officer before you file so that they know you are not trying to hide anything. They already know that you’re in financial difficulty–bankruptcy shows that you’re addressing the problem and fixing it.

And this makes sense. Bankruptcy allows you to deal with your debt. It allows you to eliminate it, restructure it, and pay it. It enhances your reliability and trustworthiness, and makes you less of a risk that someone will offer to take care of your financial problems in exchange for your password.

So if you are worried that you’ll lose your security clearance if you file bankruptcy, don’t. It will actually help.

REQUESTS FOR ADMISSIONS IN CALIFORNIA

NEW FORM FOR REQUESTS FOR ADMISSIONS IN CALIFORNIA
Posted on August 15, 2012 by Neil Garfield
In responding to an attorney request, I thought the end product, while not perfect, was worthy of sharing with our readers, especially the lawyers and paralegals. Hat tip to Dan Hanecek who wrote most of it.
In compliance with Code of Civil Procedure Section 2033.220, each response to the requests for admission shall:
(a) Admit so much of the matter involved in the requests as is true;
(b) Deny so much of the matter involved in the requests as is untrue; and
(c) Specify so much of the matter involved in the request as to the truth of which the responding party lacks sufficient information and knowledge.
PLEASE TAKE NOTICE that if the RESPONDING PARTY fails to serve a timely response to these REQUESTS FOR ADMISSIONS, the RESPONDING PARTY thereby waives any objections to these requests, including objections based on privilege or on the protection of work product pursuant to Civ. Code Proc. §2018.
PLEASE TAKE FURTHER NOTICE that in the event the RESPONDING PARTY fails to serve a timely response to these REQUESTS FOR ADMISSIONS, this PROPOUNDING PARTY reserves the right to move the Court for an order deeming all facts set forth herein admitted.
PLEASE TAKE FURTHER NOTICE that if the RESPONDING PARTY fails to admit the truth of any matter when requested to do so under this section, and if the PROPOUNDING PARTY thereafter proves the truth of that matter, the PROPOUNDING PARTY may move the court for an order requiring the RESPONDING PARTY to pay the reasonable expenses incurred in making that proof, including reasonable attorneys fees.
If any of these requests for admissions cannot be fully answered, please answer to the extent possible, specifying the reasons for your inability to answer the remainder, and set forth any information, knowledge or belief you have concerning the unanswered portions.
INSTRUCTIONS & DEFINITIONS
A. A CREDITOR MEANS A PARTY WHO IS QUALIFIED UNDER CALIFORNIA LAW TO SUBMIT A CREDIT BID AT A FORECLOSURE AUCTION.
B. Please furnish all information in your possession and control. If you cannot answer the requests in full after exercising due diligence to secure the information to do so, state the answer to the extent possible specifying your inability to answer the remainder, and state whatever information or knowledge you have concerning the unanswered portion.
C. Each request and interrogatory is considered continuing, and if you obtain information which renders its answers or any of them incomplete or inaccurate, you are obligated to serve amended answers on the undersigned.
D. Insofar as may be applicable, and except as otherwise indicated, the term “DOCUMENT” or “DOCUMENTS” shall refer to any and all writings and recorded materials, of any kind whatsoever, that is or has been in your possession, control or custody or of which you have knowledge, whether originals or copies including, but not limited to contracts, documents, notes, rough drafts, inter-office memoranda, memoranda for the files, letters, research materials, correspondence, logs, diaries, forms, bank statements, tax returns, card files, books of account, journals, ledgers, invoices, blueprints, diagrams, drawings, computer print-outs, discs or tapes, reports, surveys, statistical computations, studies, pictures, maps, graphs, charts, minutes, manuals, pamphlets, or books of any nature or kind whatsoever, and all other materials handwritten, printed, typed mimeographed, photocopied or otherwise reproduced; and slides or motion pictures, television tapes; all tape recordings (whether for computer, audio or visual replay) or other written, printed or recorded matter or tangible things on which words, phrases, symbols or information are affixed.
E. A request to “IDENTIFY” a document is a request to state (insofar as may be applicable):
1. The date of such document.
2. The type of document or written communication it is.
3. The names and present addresses of the person or persons who prepared such document and of the signers, senders and addresses of each document.
4. The name of any principal whom or which the signers, senders and preparers of
documents were thereby representing.
5. The present location of such document.
6. The name and present address of the person now having custody of the document.
7. Whether you possess or control the original or a copy of thereof and if so, the location and name of the custodian of such original or copy.
8. A brief description of the contents of such document.
F. A request to “DESCRIBE” any oral statement or communication is a request to state:
1. The name and present address of each individual making such statement or communication.
2. The name of any principal or employer whom or which such individual was thereby representing and the position in which such individual was then employed or engaged by such principal or employee.
3. The name and present address of the individual or individuals to whom the oral statement or communication was made, and the name of any principal or employer whom such person or persons were representing at the time of and in connection with such oral statement or communication, as well as the employment position in which they were then employed or engaged.
4. The names and present addresses of any other individuals present when such oral statement or communication was made or who heard or acknowledged hearing the same.
5. The place where such oral statement or communication was made.
6. A brief description of the contents of such oral statement or communication.
G. A request to “CITE” portions or provisions of any document is a request to state, insofar as applicable with reference to such portion or provision, the title, date, division, page, sheet, charge order number, and such other information as may be necessary to accurately locate the portion or provision referenced.
H. The term “PERSON” shall include a natural person, partnership, corporation, association, or other group however organized.
I. Whenever a request is made to “IDENTIFY” a natural person, it shall mean to supply all of the following information:
1. His/her full name.
2. His/her employer and position at the time.
3. The name of any person or entity (natural or artificial) whom she/he is claimed to have represented in connection with the matter to which the interrogatory or request relates.
4. His/her last known address, telephone number, and employer.
5. His/her present employer.
J. A request to “EXPLAIN FULLY” any answer, denial or claim is a request (insofar as may be applicable) to:
1. State fully and specifically each fact and/or contention in support of your answer, denial or claim; and
2. For each such fact or contention, to identify each person who has knowledge relative to that fact or contention, each document that tends to support that fact or contention; and each document that tends to dispute that fact or contention.
K. Unless otherwise specified, the terms “SUBJECT LOAN,” “SUBJECT LOAN TRANSACTION,” or “SUBJECT TRANSACTION” means the transaction(s) described in the complaint(s), including any prior or ongoing contract or communication relating to the transaction and/or account, up to and including the date of your answers to these interrogatories.
L. Throughout this request, “YOU” or “YOUR” refers to the answering party or parties, and their owners, officers, agents, representatives, independent contractors, employees, attorneys, and/or anyone acting on their behalf.
If any paragraph of this request is believed to be ambiguous or unduly burdensome, please contact the undersigned and an effort will be made to remedy the problem.
REQUESTS FOR ADMISSIONS
1. ADMIT THAT YOU ARE NOT A CREDITOR.
2. ADMIT THAT THE LOAN ORIGINATOR NEVER HAD THE SUBJECT LOAN ON ITS BOOKS AND RECORDS AS A LOAN RECEIVABLE.
3. ADMIT THAT THE LOAN ORIGINATOR WAS PAID BY THIRD PARTIES, NOT DISCLOSED TO THE BORROWER.
4. ADMIT THAT THE LOAN ORIGINATOR WAS NOT THE SOURCE OF FUNDS FOR ANY FINANCIAL TRANSACTION WITH THE BORROWER.
5. ADMIT THAT NO ASSIGNMENT OF THE ALLEGED LOAN WAS EVER SUPPORTED BY CONSIDERATION OR VALUE.
6. ADMIT THAT NO ACCOUNTING OR REPORT HAS EVER BEEN ISSUED (AND DELIVERED TO BORROWER) BY THE SOURCE OF FUNDS FOR THE ORIGINATION OF ANY ALLEGED LOAN TRANSACTION WITH THE BORROWER.
7. ADMIT THAT THE MASTER SERVICER NEVER ISSUED (AND DELIVERED TO BORROWER) AN ACCOUNTING OR REPORT FOR THE ORIGINATION OR TRANSFER OF THE SUBJECT “LOAN.”
8. ADMIT THAT THE CREDITOR WHO WOULD QUALIFY UNDER CALIFORNIA STATUTES TO SUBMIT A CREDIT BID AT AUCTION WAS RECEIVING PAYMENTS FROM THIRD PARTIES IN RELATION TO THE SUBJECT “LOAN.”
9. ADMIT THAT THE MASTER SERVICER OR OTHER AGENTS OF THE CREDITOR AS DEFINED IN THE PRECEDING PARAGRAPH RECEIVED PAYMENTS FROM THIRD PARTIES IN RELATION TO THE ALLEGED POOL IN WHICH THE SUBJECT “LOAN” IS CLAIMED TO BE INCLUDED AS AN ASSET.
10. ADMIT THAT NO THIRD PARTY PAYMENTS HAVE BEEN REFLECTED IN THE DEMANDS UPON BORROWER.
11. ADMIT THAT NO ACCOUNTING DEBITS OR CREDITS HAVE BEEN REPORTED TO THE BORROWER OR SUBSERVICER AS TO RECEIPTS AND DISBURSEMENTS RELATING TO THE SUBJECT LOAN, DIRECTLY OR INDIRECTLY?
12. ADMIT THAT THE “BORROWER’S” ACCOUNT WAS NOT REDUCED BY THIRD PARTY PAYMENTS.
13. Admit that the note and deed of trust at issue in this litigation were never assigned to DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE OF THE INDYMAC INDX MORTGAGE LOAN TRUST 2006-AR14 (hereinafter “AR-14 Trust”).
14. Admit that, as the alleged servicer, OneWest Bank, F.S.B. is required to make advance payments of principal and/or interest under Section 3.06 of the Pooling & Servicing Agreement of the AR-14 Trust.
15. Admit that, as the alleged SUBservicer, OneWest, Bank, F.S.B. is required under Section 3.07 of the Pooling & Servicing Agreement of the AR-14 Trust to have individualized loan by loan accounting of the Notes and Deeds of Trust/Mortgages allegedly in the AR-14 Trust.
16. Admit that the arrears amount listed in the Notice of Default on August 10, 2011, #20111074447, recorded in the Los Angeles County Recorder’s Office was from the alleged SUBservicer’s (OneWest Bank, F.S.B.) account and not the account of the alleged creditor.
17. Admit that the AR-14 Trust never sent a written Declaration and Demand for Sale to MTDS, Inc. a California Corporation dba Meridian Trust Deed Service for the Notice of Default dated August 10, 2011, #20111074447, recorded in the Los Angeles County Recorder’s Office.
18. Admit that the amount listed in the Notice of Default on August 10, 2011, #20111074447, recorded in the Los Angeles County Recorder’s Office, did not match the amount that was reported to investors of the AR-14 Trust as required under Regulation AB Item 1122(4)(v).
19. Admit that the alleged loan obligation under the Note and Deed of Trust at issue in this litigation is not in default.
20. Admit that no due diligence was conducted by YOU as to whether the note and deed of trust at issue in this litigation was ever properly assigned to YOU pursuant to the requirements of the Pooling & Servicing Agreement and 424B Prospectus.
21. Admit that there was never any memorialized monetary transaction between YOU and Plaintiffs.
22. Admit that MTDS, Inc. dba Meridian Trust Deed Services was never substituted as Trustee.
23. Admit that representations were made to the Superior Court County of Los Angeles that the AR-14 Trust was the beneficiary and proper foreclosing party.
24. Admit that third parties have made contributions to Plaintiffs’ account by way of, but not limited to, advances, credit default swaps, insurance or government funds.
25. Admit that these contributions were never credited to Plaintiffs’ account.
26. Admit that mortgage payments received by Plaintiffs were never properly credited to their account.
27. Admit that YOU never had the necessary documents to show ownership and status of YOUR account as the alleged creditor.

Forclosure Defense Request for Admissions Checklist

This is from a Judicial Foreclosure state for California Just Reverse the role between Plaintiff and defendant ie. In California the Defendant is the Bank.  One Advantage we have in California is that a Plaintiff can begin discovery 10 days after service of the Summons. Sooooo.. Serve the complaint on the bank. Ten days later Request for admissions with Form Interrogatories be sure and check 17.1 and your off to the races….

Foreclosure Defense

REQUESTS FOR ADMISSION CHECKLIST

STANDING 2

ASSIGNMENTS 3

ENDORSEMENTS 3

WITNESSES 3

LOAN SERVICING 3

SERVICING REQUIREMENTS-HAMP 3

STABILIZATION ACT OF 2008. 3

SERVICING REQUIREMENTS-HUD 3

LOAN ORIGINATION 3

FEES/CHARGES 3

PAYMENT HISTORY 3

LOST NOTE 3

TRUTH IN LENDING [TILA] 3

SECURITIZED TRUSTS 3

MERS 3

CERTIFICATE OF AUTHORITY (F.S. 607.1502) 3

GENERAL/MISC. 3

SERVICE OF PROCESS 3

NEGOTIABLE INSTRUMENT 3

FEDERAL/FLORIDA DEBT COLLECTION PRACTICES ACT 3

MORTGAGE REVENUE BOND PROGRAM 3

REQUEST FOR ADMISSIONS CHECKLIST
STANDING

1. Admit that [Plaintiff] Mortgage Corporation has no standing to initiate foreclosure proceedings against [Defendant].

2. Admit that the mortgage note, if attached to Plaintiff’s Complaint, is an exact and authentic copy of the original.

3. Admit that the Plaintiff is not the lender named in the original mortgage note which is the subject of this case.

4. Admit that the original lender has not transferred possession of the original mortgage note or any rights thereunder to Plaintiff.

5. Admit that Plaintiff is not in possession of the original mortgage note.

6. Admit that Plaintiff is not the holder of the original mortgage note.

7. Admit that Plaintiff is not the owner of the original mortgage note.

8. Admit that Plaintiff did not have actual physical possession of the original mortgage note prior to filing the foreclosure Complaint in this case.

9. Admit that [Plaintiff] did not retain or authorize [Plaintiff’s attorney] to commence the above entitled action against [Defendant] or any other defendant relating to the Subject Property.

10. Admit that the alleged copy of the promissory note submitted as plaintiff’s “Exhibit A” attached to the named plaintiff’s complaint is not a true and correct copy of any promissory note which [plaintiff bank] lost or destroyed.

11. Admit that the alleged copy of the promissory note submitted as plaintiff’s “Exhibit A” attached to the named plaintiff’s complaint includes no allonge showing any assignment to named plaintiff [plaintiff].

12. Admit that no paper showing any assignment of the promissory note in this instant case to named plaintiff [ ] ever existed.

13. Admit that [plaintiff bank] has not contracted with [plaintiff’s lawyer’s name, address] in these proceedings.

14. Admit that your company’s disclosed claimed holder in due course of the monetary instrument, deed of trust, and/or asset is holding such note in compliance with State and Federal law and is actually entitled to the benefits of payments;
ASSIGNMENTS

1. Admit that [Lender/Mortgagee] has assigned the Promissory Note and Mortgage to a third party.

2. Admit that [Signer] did not have authority to convey by assignment, the subject mortgage from [Lender/Morgagee] to [Plaintiff] on [Date] in [city/state].

3. Admit or deny that [signer] did not have a valid Power of Attorney from [lender] authorizing him/her to convey the subject mortgage by assignment to [Plaintiff].

4. Admit or deny that [signer] is not an officer or employee of [lender/mortgagee] corporation.

5. Admit or deny that the Assignment purporting to convey the subject mortgage and promissory note in the instant action was signed and executed after the filing of the complaint and commencement of this action.

ENDORSEMENTS

1. If the original mortgage note in this case included an allonge, then the said allonge was not permanently affixed to the said note.

2. An allonge cannot be permanently affixed to a mortgage note by way of a paper clip, staple or scotch tape.

3. An allonge was affixed to the original mortgage note in this case because there was insufficient room at the bottom or foot of the original mortgage note for any endorsements.

4. Admit that [Signer] did not have the authority to endorse the promissory note that is the subject of this action from [Lender] to Plaintiff.
WITNESSES

1. Admit that [Affiant] is not the authorized person to swear the Affidavit of Merit.

2. Admit that [Affiant] does not have first hand knowledge of the alleged facts reported in his/her affidavit.
LOAN SERVICING

1. Admit that each servicer and/or sub-servicer of this mortgage has not serviced this mortgage in accordance with statute, laws and the terms of mortgage, monetary instrument/deed of trust, including but not limited to all accounting or bookkeeping entries commencing with the original loan solicitation through and including any parties, instruments, assignments, letters of transmittal, certificates of asset backed securities and any subsequent transfer thereof;

2. Admit that each servicer and/or sub-servicer of this mortgage has not serviced this mortgage in compliance with local, state and federal statutes, laws and regulations commencing with the original loan solicitation through and including any parties, instruments, assignments, letters of transmittal, certificates of asset backed securities and any subsequent transfer thereof;

3. Admit that this mortgage account has not been credited, debited, adjusted, amortized and charged correctly and disclosed fully commencing with the original loan solicitation through and including any parties, instruments, assignments, letters of transmittal, certificates of asset backed securities and any subsequent transfer thereof.

4. Admit that interest and principal have not been properly calculated and applied to this loan.

5. Admit that any principal balance has not been properly calculated, amortized and accounted for.

6. Admit that all good faith and reasonable disclosures of transfers, sales, Power of Attorney, monetary instrument ownership, entitlements, full disclosure of actual funding source, terms, costs, commissions, rebates, kickbacks and fees were not and still are not properly disclosed to our client(s), including but not limited to the period commencing with the original loan solicitation through and including any parties, instruments, assignments, letters of transmittal, certificates of asset backed securities and any subsequent transfer thereof.

SERVICING REQUIREMENTS-HAMP

1. Admit that [Plaintiff Bank/Servicer] is the parent corporation of [Plaintiff]

2. Admit that [Plaintiff] took [xx] Billion in TARP money in November 2008.
3. Admit that as a recipient of TARP funds, [Plaintiff] is obligated and contractually committed to comply with the Home Affordable Modification Program guidelines.
4. Admit that [Plaintiff Bank] signed a COMMITMENT TO PURCHASE FINANCIAL INSTRUMENT and SERVICER PARTICIPATION AGREEMENT for the HOME AFFORDABLE MODIFICATION PROGRAM under the EMERGENCY ECONOMIC STABILIZATION ACT OF 2008.
5.. Admit that [Plaintiff] has not provided the defendant in this action the required servicing under the Home Affordable Modification Program Guidelines.

SERVICING REQUIREMENTS-HUD

1. Admit that Plaintiff failed to have a face to face meeting with Defendant before three full monthly installments were unpaid as required by 24 C.F.R. 203.604.

2. Admit that Plaintiff U.S. Bank, N.A. did not comply with the HUD loan servicing and loss mitigation regulations pursuant to 24. C.F.R. 203 subpart C.

3. Admit that special loan servicing requirements promulgated by the Secretary of HUD and codified in the Code of Federal Regulations are incorporated into the terms of the mortgage and note at issue in the instant case.

4. Admit that failure to comply with the HUD loan servicing regulations constitutes a breach of the mortgage contract.
LOAN ORIGINATION

1. Admit that this mortgage loan was not originated in lawful compliance with all federal and state laws, regulations including, but not limited to Title 62 of the Revised Statutes, RESPA, TILA, Fair Debt Collection Practices Act, HOEPA and other laws;

2. Admit that the origination and/or any sale or transfer of this account or monetary instrument, was not conducted in accordance with proper laws and was a lawful sale with complete disclosure to all parties with an interest;
FEES/CHARGES

1. Admit that charges, fees or expenses, not obligated by the Defendant in any agreement, have been charged, assessed or collected from this account or any other related account arising out of the subject loan transaction.

PAYMENT HISTORY

1. Admit that [plaintiff] is not in possession of the account and general ledger statement, authenticated by a competent fact witness, proving a deficiency owed by [defendant].

2. Admit that absent possession of the account and general ledger statement, authenticated by a competent fact witness, proving a deficiency owed by [defendant], [plaintiff] cannot prove a deficiency owed by [defendant].
LOST NOTE

1. Admit that the original mortgage note has not been lost or destroyed.

2. Admit that the original lender has not filed an affidavit attesting to the loss of the original mortgage note or its destruction.

3. Admit that Plaintiff does not have a signed Power of Attorney authorizing it to file any type of affidavit attesting to the loss of the original mortgage note or its destruction.

4. Admit that Plaintiff never had possession of the original mortgage note before it was allegedly lost.

5. Admit that Plaintiff has no actual knowledge as to who lost the original mortgage note.

6. Admit that some party other than the Plaintiff lost the mortgage note in this case.

TRUTH IN LENDING [TILA]

1. Admit or deny that proper statutory disclosures regarding the mortgage, its interest and other related charges and mode of payment has been made to [Defendant].
2. Admit that no Truth In Lending Act disclosures were provided to [Defendant] prior to his/her signing the loan documents.

3. Admit that Plaintiff’s assignor did not provide [Defendant] with any Truth In Lending disclosures three days prior to the time when he/she signed the loan documents.

SECURITIZED TRUSTS

1. Admit that the original mortgage note in this case is part of a securitized trust composed of more than one mortgage loan.

2. Admit that the securitized trust was created by a Pooling and Servicing Agreement.

3. Admit that the Pooling and Servicing Agreement includes mandatory rules as to the time for the transfer of all original mortgage notes and security instruments (mortgages and deeds of trust) to the Trust.

4. Admit that the original mortgage note was not transferred and delivered to the Custodian for the Trust.

5. Admit that the original mortgage note was not received by the Custodian for the Trust prior to the final date for the delivery of the same as set forth in the Conveyance rules of the Pooling and Servicing Agreement.

6. Admit that the Custodian filed a written report with the Trustee for the securitized trust in which it attested to the actual possession and custody of the original mortgage note in this case.

7. Admit that the named Depositor for the securitized trust in this case did not transfer the original mortgage note to the Custodian for the trust.

8. Admit that the Sponsor for the securitized trust in this case did not actually transfer the original mortgage note to the Depositor for the trust.

9. Admit that the Originator for the mortgage loan in this case did not transfer the original mortgage note to the Sponsor for the securitized trust.

10. Admit that the Trustee for the securitized trust in this case is not the lawful owner and possessor of the original mortgage note.

11. Admit that no party, other than the Trustee for the securitized trust in this case, has any legal claims or rights in the original mortgage note.

12. Admit that any and all documents that purport to transfer the original mortgage note from the Originator to Plaintiff would not be consistent with the mandatory conveyance rules in the Pooling and Servicing Agreement for the trust that actually owns the original mortgage note.

13. Admit that the securitized trust that owns the original mortgage note in this case issued bonds or certificates to various parties who thereby acquired an ownership interest in the corpus of the trust.

14. Admit that the corpus of the trust consisted and does consist of original mortgage notes such as the note in this case.

15. Admit that the bonds issued by the trust were rated by a bond rating agency such as Fitch, Moody’s or Standard & Poor’s.

16. Admit that the investment-grade bonds issued by the trust could not have been sold without such ratings by a bond rating agency.

17. Admit that in rating the bonds, the bond rating agency represented and confirmed to the potential bond buyers that the Custodian actually had physical possession of all original mortgage notes to be delivered to the trust, including the note in this case.

18. Admit that in rating the bonds, the bond rating agency represented and confirmed to the potential bond buyers that all of the original mortgage notes had been properly transferred and delivered to the Custodian in an unbroken chain of transfers and deliveries from the originator to the intermediate parties and from such parties to the said Custodian for the trust.

19. Admit that the Master Document Custodian for the securitized trust in this case verified in writing to the Trustee for the trust that it had confirmed an unbroken chain of transfers and deliveries of the original mortgage note from the Originator to the Sponsor, from the Sponsor to the Depositor, from the Depositor to the Trustee for the trust, and from the Trustee to the Master Document Custodian for the trust.

20. Admit that in rating the bonds, Fitch, Moody’s or Standard & Poor’s represented and confirmed to the potential bond buyers that all of the original mortgage notes had been properly transferred and delivered to the Master Document Custodian in an unbroken chain of transfers and deliveries from the originator to the intermediate parties and from such parties to the said Master Document Custodian for the trust.

21. Admit that in rating the bonds, Fitch, Moody’s or Standard & Poor’s represented and confirmed to the potential investment-grade bond buyers that all of the original mortgage notes had been transferred to the trust in true sales from each party in the chain of transfers and deliveries.

22. Admit that the Prospectus for the trust in this case represents that the trust is the lawful owner and possessor of all original mortgage notes included in the trust, including the original mortgage loan in this case.

23. Admit that the Prospectus for the trust in this case represents that the mortgage loans are owned by the trust and are bankruptcy remote from any claims against the originators of the said loans.

24. Admit that the Prospectus for the trust in this case represents that each transfer and delivery of the original mortgage notes from the originator to the sponsor, from the sponsor to the depositor and from the depositor to the Master Document Custodian for the trust was a true and arms-length sale.

25. Admit that the Prospectus for the trust in this case represents that the trust is the lawful owner and possessor of all original mortgage notes included in the trust, including the original mortgage loan in this case.

26. Admit that plaintiff trustee does not possess a delivery and an acceptance receipt for each sale in the chain of assignments and transfers described in the PSA from the originator of the loan to the trust.

27. Admit that plaintiff trustee does not possess any document from the master document custodian for the trust confirming that all of the required transfers of defendants’ mortgage and note occurred.

28. Admit that plaintiff trustee does not possess any document from the master document custodian for the trust confirming that there is an “Unbroken chain” of transfers from the originator to the sponsor, from the sponsor to the depositor, and from the depositor to the trust.

MERS

1. Admit that MERS has never claimed any beneficial rights or any form of ownership rights in the original mortgage note.

2. Admit that MERS is not the holder of the original mortgage note in this case.

3. Admit that any rights MERS may have had in the original mortgage note were transferred to the Master Document Custodian for the securitized trust when the trust was formed or shortly thereafter.

4. Admit that MERS has no business records as to the receipt of any payments on the original mortgage note.

5. Admit that MERS has no business records as to the application of payments on the original mortgage note.

6. Admit that MERS has on employees who have never serviced the original mortgage loan in this case.

7. Admit that as between MERS and the Trustee for the securitized trust, the Trustee has all rights of ownership and possession with respect to the original mortgage note.
8. Admit that Mortgage Electronic Registration Systems Inc. (”MERS”) did not retain or authorize [Attorney for Plaintiff] to commence the above entitled action against [Defendant] or any other defendant relating to the Subject Property.

9. Admit that MERS did not provide any information to [Attorney for Plaintiff] used in drafting the allegations of the Complaint which [Attorney for Plaintiff] served and filed.

10. Admit that MERS did not have any direct or indirect involvement in controlling any other aspect of the above entitled action against [Defendant].

11. Admit that MERS has no direct knowledge that [Attorney for Plaintiff] commenced the above entitled action against [Defendant] under the name of MERS.

12. Admit that MERS has never verbally communicated with [Attorney for Plaintiff] with regard to the above entitled action during any stage of the action.

13. Admit that MERS has never communicated with [Attorney for Plaintiff] in writing at any stage of the above entitled action that [Attorney for Plaintiff] has commenced against [Defendant] by simply naming MERS as the Plaintiff.

14. Admit that MERS could not have authorized [Attorney for Plaintiff] to commence the above entitled action against [Defendant] or any other defendant relating to the Subject Property, because MERS has no pecuniary interest in the subject property and therefore has no standing and/or authority to sue [Defendant(s)].

15. Admit that MERS has no legal or beneficial interest in the promissory note underlying the security instrument for which it serves as “nominee”.

16. Admit that MERS has no legal or beneficial interest in the loan instrument underlying the security instrument for which it serves as “nominee”.

17. Admit that MERS has no legal or beneficial interest in the mortgage indebtedness underlying the security instrument for which it serves as “nominee”.

18. Admit that MERS has no interest at all in the promissory note evidencing the mortgage indebtedness.

19. Admit that MERS is not a party to the alleged mortgage indebtedness underlying the security instrument for which it serves as “nominee”.

20. Admit that MERS has no financial or other interest in whether or not a mortgage loan is repaid.

21. Admit that MERS is not the owner of the promissory note secured by the mortgage and has no rights to the payments made by the debtor on such promissory note.

22. Admit that MERS does not make or acquire promissory notes or debt instruments of any nature and therefore cannot be said to be acquiring mortgage loans.

23. Admit that MERS has no interest in the notes secured by mortgages or the mortgage servicing rights related thereto.

24. Admit that MERS does not acquire any interest (legal or beneficial) in the loan instrument (i.e., the promissory note or other debt instrument).

25. Admit that MERS has no rights whatsoever to any payments made on account of such mortgage loans, to any servicing rights related to such mortgage loans, or to any mortgaged properties securing such mortgage loans.

26. Admit that mortgage indebtedness for which MERS serves as the “nominee” is not reflected as an asset on MERS’ financial statements.

27. Admit that failure to collect the outstanding balance of a mortgage loan will not result in an accounting loss by MERS.

28. Admit that when a foreclosure is completed, MERS never actually retains or enjoys the use of any of the proceeds from a sale of the foreclosed property, but rather would remit such proceeds to the true party at interest.

29. Admit that MERS is not actually at risk as to the payment or nonpayment of the mortgages or deeds of trust for which it serves as “nominee”.

30. Admit that MERS has no pecuniary interest in the promissory notes or the mortgage indebtedness for which it serves as “nominee”.

31. Admit that MERS is not personally aggrieved by any alleged default of a promissory note for which it serves as “nominee”.

32. Admit that there exists no real controversy between MERS and any mortgagor alleged to be in default including [Defendant].

33. Admit that MERS is never the holder of a promissory note in the ordinary course of business.

34. Admit that MERS is not a custodian of promissory notes underlying the security instrument for which it serves as “nominee”.

35. Admit that MERS does not even maintain copies of promissory notes underlying the security instrument for which it serves as “nominee”.

36. Admit that MERS did not retain Cheatham or obligate itself in any way to pay any legal fees to Cheatham with regard to Cheatham commencing the above entitled action.

CERTIFICATE OF AUTHORITY (F.S. 607.1502)

1. Admit that [plaintiff bank] is not domestic to the state of Florida

2. Admit that [plaintiff bank] has not registered as a business entity with Florida’s Secretary of State or his agent.

3. Admit that [plaintiff bank] is not chartered as a bank in Florida.

4. Admit that [Plantiff corporation] does not have a valid Certificate of Authority to conduct business in the State of Florida.
GENERAL/MISC.

1. Admit that it is the practice of [plaintiff bank] to charge-off and sell notes in arrears after collecting insurance on the outstanding amount of indebedness.

2. Admit that after [plaintiff bank] charges off and sells evidence of indebtedness, the commercial paper illustrating the duty between the mortgagor and mortgagee or assignee becomes legally uncollectible.
SERVICE OF PROCESS

1. Admit or deny that Summons has been served properly on [Defendant] in this case.

NEGOTIABLE INSTRUMENT

1. Admit or deny that the promissory note at issue in this action is not a negotiable instrument under Florida Statute 673.1041 because it is governed by and subject to the HUD default loan servicing and loss mitigation regulations, 24. C.F.R. 203 subpart C.
FEDERAL/FLORIDA DEBT COLLECTION PRACTICES ACT
MORTGAGE REVENUE BOND PROGRAM

1. Admit or deny that the subject mortgage loan was pooled into Mortgage Backed Securities (MBS) which have been sold to investors.

GLASKI, AND JUDGES

CALI ATTORNEY SPEAKS ON CURRENT STATE OF FORECLOSURE DEFENSE, 

Posted on September 8, 2014by eggsistense

Recently I had a discussion with a California attorney named David who defends homeowners against foreclosures.  David also allowed that he had once worked for a law firm that defended banks, so the combination of those two sides of  David’s experience were of course completely tantalizing to me.  He agreed to be interviewed and I sent him some questions via email.  What follows are David’s unedited answers to my 6 questions, along with an introduction by David himself.

Make sure you check out the whole thing, as David comments on Glaski and the granting of certiorari by the California Supreme Court to the Yvanova case (which held essentially the opposite of Glaski), as well as efforts to convert California from a non-judicial foreclosure state to a judicial one.

PREFACE: I have to preface my answers here by pointing out that I am a practicing lawyer here in California. As such, that is going to color my beliefs and my answers to these questions. I actively represent homeowners in foreclosure matters in California courts. If one wants to know what a lawyer thinks of this subject, my answers will be useful. If one believes that all lawyers are evil then what I say will not be of interest. I am just going to go ahead and answer things from my perspective and if one has or is contemplating legal action over a bad foreclosure, hopefully I will provide some useful information.

LRM: You remarked that you were used to case law that says “the banks win.” Can you elaborate on that?

SAM: Regarding case law that says “banks win” in California – In California there seems to be much case law that has developed over a long time, which effectively rules out many of the legal issues which can be successful in other states.

“Show me the note” defenses, for example don’t work in California.

Securitization arguments, with the narrow exception of the Glaski decision, which is currently being reviewed by the California Supreme Court, don’t work. There is even case law that an oral agreement or promise to delay a foreclosure sale is not enforceable by the homeowner, due to the fact that it is not in writing and should be considered an “oral modification to a written contract.” There is law that says once a Trustee’s Deed Upon Sale (the document that is created when title transfers at the foreclosure sale auction) is recorded, there is a legal presumption that the sale was conducted fairly. There is case law that says a homeowner doesn’t have “standing” to object to defects in the securitization process. It all adds up.

The net effect is that it limits the ways in which one can challenge a foreclosure. Even so, the only real chance one has of saving the home (as opposed to merely suing for damages post-foreclosure) is to get to court somehow before the foreclosure sale takes place, because once that TDUS is issued, it is all downhill for the banks. After that point, one can sue for money damages, but to get the house back you would usually need to prove fraud, which is proven to a higher burden of proof.

This is all in addition to the fact that non-judicial foreclosures are used 90-plus percent of the time here (as opposed to judicial foreclosures, which are in essence a lawsuit to obtain foreclosure and are the sole remedy foreclosing in some states), and when paired with a subsequent UD decision, it sometimes seems there is no due process to the homeowner. I could go on and on.

As lawyers practicing in this area in California, we’re often regaled by examples of how lawyers from other states “do it”, sometimes even by those lawyers. Anyone who has practiced can tell you however, that in California we have some of the most aggressive litigators there are. It is just that we are faced with a set of laws here which make it a very different playing field from, say, Florida. That being said, if you have a good case, pursue it timely, and hire a good attorney, there are still things that can be done to help you.

LRM: Do other attorneys (no names necessary, of course) that you have talked to feel that way?

SAM: The quick answer is yes. Well, good ones do. The quick buck artists, and those who are just too uninformed to know better don’t.

There are a lot of people who are well-meaning, but are inadequately informed.

But lawyers who are involved and knowledgeable about litigating these cases are aware of the challenges that we face here in California.

LRM:  You mentioned you had done work defending loan servicers–how did you get into and then out of that?

SAM: Since law school I have always been very adept at contractual law issues, earning top scores in several contractual-related courses. In part that was due to the fact that I studied economics as an undergrad and necessarily had some knowledge of banking and financial systems. Contractual law is something that I always have always found very second-nature.

Due to the glut of lawyers, most of the jobs that were available were for tort lawyers, and for the first few years of my experience I worked at some of the well-established local insurance defense firms. I worked for a very well-regarded local trial lawyer for several years, where I got invaluable experience. So, I received great training as a litigator, learned a lot about courtroom strategy, but I wanted to try something new. In the late 90s I was offered a job in the litigation department of a local firm that defended banks in wrongful foreclosure actions. It turned out that foreclosures were at a 22-year low at that point, but this firm had received a few wrongful foreclosure cases. I and other lawyers there worked hard and resolved those cases, some with trial and others without, and the work dried up.

I stayed there long enough to learn mortgage and foreclosure law well. I then put that to use years later in handling mortgage cases, including wrongful foreclosure cases for homeowners, and suits against loan modification law firms. (One of the things I do for my clients is I try to get their funds back from any loan modification or forensic audit or other foreclosure prevention scams).

The law remained largely unchanged for the next few years, until the National Mortgage Settlement and the Homeowners Bill of Rights legislation. When the HBOR was passed, a friend of mine extended me an offer to work on a contract basis full time for a local firm that represented servicers. My workload wasn’t what it could be so I took the assignment. That particular firm was counting on the HBOR having the result of turning California into a de facto “judicial foreclosure state” where non-judicial foreclosures were an option but where banks and lenders preferred to use the judicial foreclosure remedy. That business model didn’t take off and in retrospect seems rather foolish – banks and servicers love non-judicial foreclosures, they are cheaper, quicker, and the lack of due process to the homeowner means that there is a greater chance of succeeding. So, that is how I got out of working on the banking end.

But the good thing is that I got a very close inside view of what the banking industry, and the foreclosure law firm industry, thinks about the HBOR and its various issues. Many of the issues with the HBOR and the National Mortgage Settlement will take years to develop, as caselaw develops slowly (take Glaski for instance).

Since then, I have further engaged on the consumer side and have continued to get training and attend classes, participate in lawyers’ list serves, and to network with other attorneys to remain knowledgeable about the cutting edge of wrongful foreclosure litigation in California.

LRM:  Did you learn anything useful regarding foreclosure defense while behind enemy lines (i.e., defending servicers)?

SAM: Yes, very much so. There is no substitute for being employed at a firm that does one thing all day long, learning from others who have done the same. And I have to say that many of the issues I see foreclosure lawyers pursuing or inquiring about are complete non-starters here in California. My training allows me to be more selective and more accurate in my case evaluation. I know what works, what causes one to lose credibility with the Court, and how to deal with banking lawyers.

Many of the banking lawyers are fundamentally decent people, and if one starts accusing them of being in collusion with the banks and servicers to “steal the house,” suing the lawyers, etc. – which all might make for great grandstanding to non-lawyers – but without proof to support those claims it never goes anywhere (without proof) and it guts any respect the court or opposing counsel has for the case or the attorney. While most people tend to think of lawyers as powerful, equating an associate at a law firm who represents banks to a high level “bankster” would be like accusing the teller at your local branch of getting rich on the TARP bailouts. During the time, both times actually, that I worked on the “other side” of things, I was never asked to do anything unethical.

One thing I did learn from working on that side is that the quality of work by the plaintiff bar is usually substandard. For example, we would often see pleadings submitted by attorneys that contained very little in the way of supporting factual allegations. And we would frequently see Complaints which attempted to plead theories of liability that are not valid under California law. And I am talking about work coming from lawyers, not the work of pro per litigants and legal aid services (which usually have some of the same problems, in addition to the absence of an attorney). Quite often the Complaints and legal work would seem as if there were no underlying legal issue of merit, because if there had been, it certainly wasn’t being advanced in the papers that were filed. So, after awhile, one begins to get the feel for what one has to do to build credibility to the case.

I also learned that there are so many meritless (or at least poorly litigated) foreclosure cases, that if you can be the one who makes your case stand out and appear to have some merit, you can get a favorable resolution working with bank lawyers. Often the goal of wrongful foreclosure litigation is to encourage the bank to either stop a foreclosure proceeding, or to enter into a monetary settlement with the Plaintiff. Sometimes the bank will offer new loan terms, and forego the foreclosure, as a part of a settlement. One must litigate in a manner that builds credibility if this is to happen.

If one appears to be merely engaging in delay tactics, or pursuing litigation to see if the bare fact of a lawsuit – any lawsuit – is going to cause a bank to change its approach, in my experience the days of success for those strategies are few. Unfortunately, the majority of the cases I saw when I was on the “other side” were of that nature. And often, the eventual result of such approaches is that the client is left in a financially worse position – after paying attorneys fees, court costs, and any additional fees to the other side – from pursuing questionable cases.

So, what I try to do is to handle a case in such a way that the banks and the courts and the decision makers will take it seriously. And that includes having a professional relationship with, and respect for the other counsel.

I feel like what I‘ve learned has value, and is a fairly rare commodity in the plaintiff’s bar. I’m not going to risk my credibility in the legal field by engaging in a liar’s contest with the lawyers and non-lawyers who are not as qualified.

Of course, I’ve learned things on the plaintiff’s side as well. I’ve learned how emotional people get over losing a home, and how attached they are to their houses. I am humbled to have as a friend a former client who told me that his mortgage case, which involved a wrongful foreclosure, was the most difficult thing he’s ever gone through in his life. I enjoy the camaraderie that one gets from dealing with a “real” person (as opposed to someone working in the loss mitigation department of a corporation) and especially like achieving good results for real people.

LRM:  Do you think judges are naive about the foreclosure fraud or do you think they’re somehow in on it, even if being “in on it” means not “opening the floodgates”? What I’m really trying to get at is, why are judges letting this go on?

SAM: In answering this question, I have to go back to my preface that not all foreclosures are considered bad or wrong or fraudulent. I would like to change the lack of due process one gets in California with the non-judicial foreclosure followed by quickie UD system, but that is a legislative issue more than anything else. And I am working on proposals to change the legislation in California that relates to foreclosures, including one which proposes to make California a judicial foreclosure state.

First it is important to consider what the role of the judge is. At the Court level where facts are tried – the judge in trial court (which is either Superior Court in California State Courts, or District Court in Federal Courts) is required to follow the law as it exists at the time he or she makes the ruling. That means that the judge has to follow the precedent and statutes that are already there.

If one is bringing a case, knowing that it is contrary to existing law, just know that the trial court judge is not going to change existing law. One would have to be prepared to appeal the case to generate an appellate court opinion, which if published, would be citable case law precedent to do that. And sometimes, one would even need to plan to seek writ to the California Supreme Court to change a law, or to change it statewide.

The question asks about whether judges are naïve about fraud or in on it. In my experience, judges generally are not naïve. But you have to be able to prove the fraud, and especially with fraud, that becomes very case specific.

Sometimes, what certain litigants believe is a bad judge is really a judge who is restrained from considering certain issues because of the state of the law. In those instances, hopefully the homeowner’s attorney has prepared his or her client for the possibility that the judge may not see the great relevance of, for example, the fact that a certain loan servicer was known to employ robosigners. That won’t be because the judge is in on it, it might be because the legal theory that those facts relate to is just a non-starter in California (see above for answer to number 1).

That being said, any system is going to be imperfect and any system with people in it is going to be corruptible. I find that it is not productive for me, or my clients, to go into court believing the system is so corrupt that all the judges have been bought off, and that the only reason I would ever lose a motion is due to corruption. Such things can become self-fulfilling prophecies and most of the time I have a good idea of whether a strategy is going to work or not.

The lawyers I know who feel, or who say they feel, that the corruption is pervasive seem to play off of those beliefs in order to deflect their clients ire at losing. The lawyers I know who think that way also tend to lose a lot. Again, self-fulfilling prophecies. One has to ask, if the system is so pervasively corrupt, then why would anyone bother with an attorney who believes that?

Over any given year of practice, there will be a few times where a judge has made a ruling that is so contrary to the law or facts, or where the judge has seemingly bent over so far to try to help the other side, that I get suspicious. But it’s rarely provable. Ultimately, if you suspect something fishy is going on you have to weigh your options and decide the best approach for your case.

It’s far more likely that a judge (and there is one I am thinking about in particular right now) is frustrated with the glut of foreclosure cases, and due to his past as a member of a certain political group, or involvement with a certain real estate company, might be very one-sided about how he or she approaches foreclosure cases. One simply has to try to avoid such judges (with CCP 170.6 challenges among other things). If the bad judge or judges can’t be avoided, then you have to play the hand you are dealt, which may mean settling as opposed to going to trial.

If one does get a judge that is corrupt or unprofessional, I am a big supporter of one’s right to challenge questionable behavior by a judge, especially if that takes the form of unfair or unbalanced treatment from the bench. There are procedures for reporting a judge to the Judicial Council or to the Presiding Judge. In my career, I’ve reported one judge and have left it up to my clients whether to report judges in some other instances.

But I think the issue underlying the question, is one of why are the laws what they are? That comes from decades if not centuries of lawmaking and legislating in California which favors banking interests. Until the recent foreclosure crisis this was not something the average person cared about. Before that, everyone assumed that only bad people suffer foreclosures, and there was little political capital to make any changes. I think the political capital is there, and the case volume is there as well, to see the problems with the current system. The legislature is there and can be lobbied for these changes, and that is something I am a big believer in. I participated in a recent law day where a consumer lawyer’s group I belong to met with legislators and their aids about certain legal changes they were advocating for. I have started a legal foundation, which will be working towards this issue in the next year.

LRM: As I mentioned to you, some judges refused to follow Glaski back in 2013. But now that the CA Supreme Court has refused to have it de-published, do you think Glaski will help make any difference for the better for homeowners?

SAM: Since you’ve provided me these questions to answer, Yvanova was accepted for Certiorari by the California Supreme Court. I imagine that one of the reasons that this happened is that there is currently a split of authority in California with Glaski (and cases following it) and Yvanova (which rejects Glaski) being the law, depending upon one’s jurisdiction. From a due process perspective, I’d like to see it Glaski upheld.

Some who favor Glaski, myself included, feel that the case law that is critical of Glaski is inadequately reasoned. Sometimes the cases critical of the Glaski decision are conclusory in their analysis, merely stating that they find it “unpersuasive.” We can expect that the California Supreme Court will expound on it quite a bit more, but that decision is a few months in the future at least.

Ocwen Wall of Shame

20141021 NY-Lawsky to Ocwen – Letter regarding backdating

20141023 Ocwen Backdating draws Attention of Attys Gen Bloomberg

20141218 Ocwen stalls Short Sales-Bloomberg

20141222 Bill Erbey Loses $300M in Hours, No longer Billionaire – Forbes

20141222 Executive is Sacked for His Company’s Misdeeds – New Republi

20141223 How Erbey of Ocwen Lost His Empire -The Street

20150113 CA seeks to suspend Ocwen’s Mtg License – Reuters