VICTORY for Homeowners: Received Title and 7 Figure Monetary Damages for Wrongful Foreclosure

Victory in California, as we have predicted for years. Maria L. Hutkin and Jude J Basile were the attorneys for the homeowners and obviously did a fine job of exposing the truth. Their tenacity and perseverance paid off big time for their clients and themselves. They showed it is not over until the truth comes out. So for all of you who are saying you can’t find a lawyer who “gets it” here are two lawyers that got it and won. And for all those who were screwed by the banks, it isn’t over. Now it is your turn to get the rights and damages you deserve.

Maria L. Hutkin and Jude J. Basile

Maria L. Hutkin and Jude J. Basile

The homeowners won flat out at a trial — something that should have happened in most of the 6.6 million Foreclosures conducted thus far. U.S. Bank showed its ugly head again as the alleged Trustee of a trust that was most probably nonexistent, unfunded and without any assets at all much less the homeowners alleged loan. Still the settlement shows how far Wall Street will go to pay damages rather than admit their liability to investors, insurers, counterparties in credit default swaps, and the Federal Reserve.
When you think of the hundreds of millions of wrongful foreclosures that were the subject of tens of billions of dollars in “settlements” that preserved homeowners rights to pursue further damages and do the math, it is obvious why even the total of all the “settlements” and fines were a tiny fraction of the total liability owed to pension funds and other investors, insurers, CDS parties, the Federal Government and of course the borrowers who never received a single loan from the banks in the first place. If 5 million foreclosures were wrongful, as is widely suspected at a minimum, using this case and some others I know about the damages could well exceed $5 Trillion. Simple math. Maybe that will wake up the good trial lawyers who think there is no case!

Maria L. Hutkin and Jude J. Basile

A fitting announcement on the 5th anniversary of the Lehman Brothers collapse. the economy is still struggling as more than 15 million American PEOPLE were displaced, lost equity and forced into bankruptcy by imperfect mortgages that were a sham, and thus imperfect foreclosures that were also a sham. Another 15 million PEOPLE will be displaced if these wrongful, illegal and morally corrupt sham foreclosures are allowed to continue.
This case, like the recent case won by Danielle Kelley (partner of GGKW) was based upon dual tracking. In Kelley’s case the homeowners had completed the process of getting an approved modification, which meant that underwriting, review, confirmation of data, and approval from the investor had been obtained. In Kelley’s case the homeowner had made the trial payments in full and paid the taxes, insurance, utilities and maintenance of the property.

The Bank argued they were under no obligation to fulfill the final step — permanent modification. Kelley argued that a new contract was formed — offer, acceptance and the consideration of payment that the Bank received, kept and credited to the homeowner’s account. But the bank as Servicer was still accruing the payments due on the unmodified mortgage, which is why I have been harping on the topic of discovery on the money trail at origination, processing, and third party payments. 

The accounting records of the subservicer and the Master Servicer should lead you to all actual transactions in which money exchanged hands, although getting to insurance payments and proceeds of credit default swaps might require discovery from the investment banker. So in Kelley’s case, the Judge essentially said that if an agreement was reached and the homeowner met the requirements of a trial period, the deal was done and entered a final order in favor of the homeowner eliminating the the foreclosure with prejudice.

In this One West case the court went a little further. The homeowners were lured into negotiations, expenses and augments under the promise of modification and then summarily without notice to the homeowner sold the property at a Trustee sale under the provisions of the deed of trust. The Judge agreed with counsel for the homeowners that this was dual tracking at its worst, and that the bank did not have the option of proceeding with the sale. 

The homeowners were forced to vacate the property and make other housing arrangements and these particular homeowners were enraged and had the resources to do what most homeowners are too fearful to do — go to the mat (go to trial.)

One West made several offers of settlement once the Judge made it clear that the homeowners had stated a cause of action for wrongful foreclosure. Bravely the attorneys and the homeowners rejected settlement and insisted on a complete airing of their grievances so that everyone would know what happened to them. After multiple offers, with trial drawing near, OneWest finally agreed to give clear title back to the homeowners and pay $1 million+ in damages on what was a six figure loan. 

We now have cases in both judicial and non-judicial jurisdictions in which the homeowner was awarded the house without encumbrance of a mortgage and even receiving monetary damages in which the attorneys achieved substantial rewards on 7 figure settlements  that probably would be much higher if they ever went to trial — particularly in front of a jury. This is only one of the paths to successful foreclosure defense. I hope attorneys and homeowners take note. Your anger can be channeled into a constructive path if the lawyers know how to understand these loans, and how to litigate them.

“There’s hope. I feel their pain.” — Danielle Kelley, Esq. , partner in Garfield, Gwaltney, Kelley and White.

http://calcoastnews.com/2013/09/onewest-bank-pays-7-figures-mortgage-fraud-case/

Danielle Kelley, Esq. Swings Back at Separation of Note and Mortgage

Danielle Kelley, Esq. whom I admired before she became my law partner has again broke some old/new ground in compelling fashion. This is not legal advice and nobody should use it without consulting an attorney who is properly licensed in good standing in the jurisdiction in which the property is located and who is competent on the subject of bills and notes.
The bottom line: if the note and mortgage were intended by the law to be considered one instrument, they would be one instrument. But they are not because all the conditions in the mortgage would render the note non-negotiable under the UCC and that would be true even if the loan was actually sold, for real, with payment and an assignment. The conditions expressed in the mortgage or deed of trust render the mortgage non-negotiable. Hence an alleged transfer of the note separates the note from the mortgage because the mortgage is by definition non-negotiable. If the banks lose the application of the UCC, which they should, they are dead in the water because they have no way to prove the transactions upon which they rely in collection and foreclosure.
All of this leads us back to the “sale” of the loan because the presumption arising out of being a holder or holder in due course does not exist where the paper is non-negotiable. The Banks must allege and prove the origination and sale the old fashioned way — by alleging that on the ___ day of ___, in the year ___ XYZ loaned the homeowner $____________. Pursuant to that transaction the defendant executed a note and mortgage (or deed of trust), attached hereto and incorporated by reference. On the ___ day of ________ in the year ________, Plaintiff acquired said loan by payment of valuable consideration and received an assignment that was recorded in the public records at page ___, Book ____ of the public records of ____ County. Defendant failed or refused to make payment commencing the ___ day of ____ in the year ____. Plaintiff gave notice of the delinquency and default, provided the Defendant with an opportunity to reinstate as required by the mortgage and applicable law (copy of said notices attached). Defendant will suffer financial loss without collection of the debt for which it owns the account receivable. Pursuant to the terms of the mortgage which is attached hereto, Defendant agreed that the subject property was pledged as collateral for the faithful performance of the duties under the note, to wit: payment.
Of course the Banks refuse to do that because it opens the door to discovery to exactly what money was paid, to whom and why. AND it would show that there were no actual transactions — just shuffling of paper.

Affirmative defense

Non-negotiability of Subject Note Prohibits Plaintiff from Enforcing it Pursuant to Fla. Stat. §673, et seq and Failure to Attach Documents Pursuant to Florida Rule of Civil Procedure 1.130

With regard to all counts of the Complaint, the Plaintiff’s claims are barred in whole or in part because the subject note that the Plaintiff may produce is not a negotiable instrument and therefore the Plaintiff cannot claim enforcement of the note pursuant to Fla. Stat. §673, et seq.  In order for an instrument to be negotiable it must not, amongst other things, “state any other undertaking or instruction by the person promising or ordering payment to do any act in addition to the payment of money.”  §673.1041(1)(c).  While there is no appellate case law in Florida (and precious little in the entire country) which has ever interpreted this portion of the statute to mortgage promissory notes, the Second District has interpreted this section with respect to retail installment sales contracts in GMAC v. Honest Air Conditioning & Heating, Inc., et al., 933 So. 2d 34 (Fla. 2d DCA 2006).  There, the Second District held that clauses in the RISC such as the requirement for late fees and NSF charges rendered the contract non-negotiable.  This Court should be mindful that the GMAC case was recently applied to a mortgage foreclosure in the Sixth Judicial Circuit.  See Wells Fargo Bank, N.A. v. Christopher J. Chesney, Case No. 51-2009-CA-6509-WS/G (6th Judicial Circuit/Hon. Stanley R. Mills February 22, 2010).

The note attached to Plaintiff’s Complaint contains the following obligations other than the payment of money

1.      The obligation that the borrower pay a late charge if the lender has not received payment by the end of a certain period of days after the payment is due.  Defendants assert this defense although Section 7(a) of the Note attached states “See Attached Rider”.  The only riders attached to the Complaint are a “Prepayment Rider to Note” and an “Adjustable Rate Rider”, the latter of which deals with the interest change, not late fees.  Therefore there are documents potentially missing from the Complaint which runs afoul of Florida Rule of Civil Procedure 1.130 that such documents be attached as they are a document upon which a defense can be made.  Defendants are asserting the defense without the applicable rider; however, if Plaintiff is in possession of the original note, as they should be in order to foreclose, Plaintiff would have had said document to file.   

2.      The obligation that the borrower to tell the lender, in writing, if borrower opts to may prepay in clause 5 of the Note and the Prepayment Rider to the Note. 

3.      The obligation that the lender send any notices that must be given to the borrower pursuant to the terms of the subject note by either delivering it or mailing it by first class mail in clause 8; and

4.       The obligation of the borrower to waive the right of presentment and notice of dishonor in clause 9.

Because the subject note contains undertakings or instructions other than the payment of money, the subject note is not negotiable and therefore the Plaintiff cannot claim that it is entitled to enforce same pursuant to Fla. Stat. §673, et seq.

In addition to, or in alternative of, the following argument, even if the subject note is deemed negotiable, Fla. Stat. §673, et seq. (and therefore negotiation) cannot be utilized to transfer the non-negotiable mortgage, which is a separate transaction.  See in Sims v. New Falls Corporation, 37 So. 3d 358, 360 (Fla. 3d DCA 2010) (providing that a note and mortgage were two separate transactions).  The terms of the mortgage are expressly not incorporated into the terms of the note; rather, they are merely referenced by the note.  See clause 11 of the note.  Indeed, nowhere in the subject note is the right to foreclose the mortgage a remedy for default under the note.  It is clause 22 of the mortgage, on the other hand, which allows this.  Clause 22 of the mortgage, however, cannot be transferred to Plaintiff by negotiation as the mortgage is not negotiable.  

America Lost

In America we are no longer proud. We have a government that is teaching our children that its OK to lie , cheat and steal. That integrity and honor is something only our ancestors Believed in.

Its no longer about  the proud nation we once were, its about America Lost.

 

Az Attorney General Gets It! Precisely Wrong

Nothing could have said it better than these words from the chief law enforcement officer of the state. He said it because he meant it. And he was sort of right in a twisted way. And he was expressing the frustration of all three branches of government together with nearly everyone including the borrowers. The words were "assuming no underlying injustice."

You see that everyone has become so wrapped up in the paperwork and the arguments about the paperwork nearly everyone has forgotten to ask the most basic question: WAS THERE A TRANSACTION WITH OFFER, ACCEPTANCE AND CONSIDERATION. WHERE IS THE MONEY? where is the canceled check or wire transfer receipt? He was only saying that the fabricated forged paperwork was an acceptable short-cut IF NO INJUSTICE is present. In other words, at the end of the day it is just the collection of a debt. But what if there is no debt? Then what is all that paperwork about?

So to make it clear, what I am saying is that if I loan you money, you owe it to me whether we have anything in writing or not. If I fabricate and forge your signature on it, what's the harm? You got the money, you agreed to pay it back, you still owe what I loaned you. And if the note, forged or not, conforms to the deal the borrower thought they were getting, what difference does it make whether you use the note or not?

Ok, there is a problem with the statute of frauds, and about a dozen other statutes and doctrines that arose to prevent fraud and injustice. So maybe it isn't acceptable to fabricate documents, forge signatures, lie to the courts and otherwise do things that ordinary citizens can and are put in jail for doing the exact same thing.

But so what? You owe me money, you know it and you are not going to get out of owing it just because I committed some crime. I didn't commit a crime in loaning you the money, did I? I committed a crime in collecting it --- and that is what is bothering everyone including even the borrowers.

So why do I write this blog, litigate cases against the "lenders", appear as an expert witness to give opinion evidence and explanations of the finance industry?

Well, let's see. What if I didn't loan you the money, AND I got paid more money than you received in a loan from someone else? Huh? Yes, think about it. What if I didn't loan you the money? What if the paperwork was not just fraudulent and criminally created, what if it was just plain wrong? What if there was no transaction at all between us? Should I still be allowed to collect from you, take your house, your livelihood, your reputation? Might you spot some injustice if you learned that banks, pension funds, governments, investors, the central bank (Federal Reserve), gave me ten times more money than you got on the loan?

You are assuming that because the money showed up at the closing table that the loan was real. But the money on the table was stolen. Oops that does make things a little different doesn't it? And here is the kicker ---- the thief got paid ten times over for making the loan appear real. The only injustice is to investors whose money was stolen and borrowers whose lives were stolen.

But I guess that isn't enough. It is ok to steal, it is ok to lie, It is ok to fabricate documents.it is ok to drain the money from our economy and blow up world commerce. You know, on second thought I don't agree with the Arizona Attorney General. I think he is a paid stooge and an idiot. Because I know him, met him and explained to him what the truth was, Along with his investigation team who like in Florida when they were getting close to an arrest were fired or transferred.

Injustice? Where is there not injustice in this whole thing. We have debased our currency, undermined the financial integrity of our governments, left pensioners with too little money to get the payments they were expecting, and we have taken homes away from people just because someone at the top thinks it is too inconvenient to bring the banks down, put the criminals in jail, and leave the victims without any effective remedy. I thought we were better than that and that people like the Arizona Attorney General should be investigated for corruption. But then I was always an idealist.