Watch Out For Those Prepared Orders!!!

What amazes me most here, is how fast this came to the forefront. I warned you all about this new scam, the banks were doing, called RENTALS.. and here we go. Lets not forget, we once again, have the TBTF in the headers ... and worst yet, Judges again, not prepared for this new fraud.  I warned all of you and investors too, now here we go.

Watch Out For Those Prepared Orders!!!

by Neil Garfield

I was in court yesterday battling out an attempt by U.S. Bank to have all rent turned over to them from several investment properties. The Florida Statute, like many others, allows for a summary procedure and allows the Judge to grant the Motion even if the owner if the properties has defenses. I had many problems both with the statute and the facts. U.S. bank had appeared out of nowhere as successor to Bank of America. How did it become the successor? We don't know because it was done with an ex orate notice of substitution of Trustee that reminds me of the way they do that in non-judicial states. There, the "new beneficiary" of the deed of the trust pops up put of nowhere and substitutes the trustee on the deed of trust by naming its own controlled entity as the trustee. So the new mortgagee/beneficiary names itself as the mortgagee and then names itself as trustee.

Here in Florida we have much the same thing as the pretender lenders continue their shell game. In the case I was arguing, the Judge was ready to rule in favor of US Bank despite numerous defenses regarding the money, the loan, the standing of the parties, etc. until I asked how the ex lenses of running the properties would be paid. The first interesting thing is that there was no requirement of a factual affidavit, testimony or evidence. I think that is an incorrect application of the words "summary proceeding."

So the "take no prisoners " attorney in Miami whips out an order already nicely printed and the Judge tells us to go over it and if there are any disagreements to let him know. This is where the rubber meets the road, where attorneys for the banks are steam rolling over foreclosure defense attorneys and pro se litigants with orders that do not resemble anything the Judge ordered, which was net rents. In similar situations you should have the information rom a securitization report that shows how much the alleged creditors have already received in non stop non refundable advance payments of interest from the Servicer. So far in the case I am handling, those payments total more than $70,000 for each property. how many times does the creditor need to be paid.

So the provision requiring an accounting of course was acceptable, but then nearly everything else in the order amounted to a summary final judgment and the case would be effectively over upon entry of the order, including going back to 2009 for all the rent received since the original notice of default was sent. The proposed pre-printed order contained some pretty bizarre stuff. The Judge had heard the entire proceeding in 10 minutes despite the fact that even the bank had noticed it for 30 minutes and we had said at last 2 hours would be required.

The principal problem that I had and with which the judge agreed was that in a summary proceeding like this it is not the so-called lender that decides what are proper expenses, like the proposed order said, it is the Judge. "Trust me" the bank's attorney had said to me out in the hallway. I didn't and neither did the judge.

So we go back into the courtroom with the Order that I found nearly completely unacceptable because I did one thing that most people don't --- I knew I was dealing with a lawyer that would try anything. So I read every word of the proposed order and sat there processing it. This of course was wholly unacceptable to the bank lawyer who was expecting me to skip over the parts where we gave up the litigation and the bank simply won the entire case based upon a summary proceeding that had no evidence.

Upon return to the harried judge, we explained our differences and it became apparent to everyone that the bank lawyer was not really all that clear about what he was asking for and I kept asking clarifying questions, like "are you going to become the landlord?" No he said he didn't want that. In fact his own client who did not appear, told my client that they didn't want the rent --- which bring up a whole bunch of other problems. So beware of this rents gimmick.

It looks to me that the so-called new trustee doesn't want and won't take the rents, and that the whole rent turnover thing is simply a profit center for the attorneys who represent the banks. By asking for authority to represent and taking discovery as to whether the Bank wants the rents, you will probably uncover a conflict, and an opportunity to apply sanctions against the law firm representing the Bank.

In the end, the Judge who was irritated at me for arguing my client's case, turned to lean more and more against the bank. He said he was close to denying the motion. And then the bank attorney took it one step over the line with the judge and the Judge said he would not sign the order and that the hearing should be rescheduled allowing us to fight another day. The point is that without carefully going over the proposed order, whether you have won or lost, you are leaving yourself wide open to abuse.