I was keeping track of the number of Sheriff's Sales stopped, but I decided that this gave the wrong impression to viewers. An attorney should not be consulted as a matter of last resort. Instead an attorney should be consulted early in the process and the sooner an attorney is consulted the more likely a Homeowner will have a favorable result

The Law Office of Bruce M. Broyles

2670 North Columbus Street, Suite L, Lancaster, Ohio 43130

Phone: (740) 277-7850 / (330) 965-1093

The Ohio Rules of Professional Conduct suggest that the reader be informed that one of the purposes of this blog is to attract potential clients, and therefore should be considered attorney advertisement

Friday, April 20, 2018

Ohio Business Records

Usually, I try to provide some tidbit of knowledge relating to the defense of foreclosures.  I currently have a number of cases that have gone to trial or are being prepared for trial.  The Ohio Business records exception to hearsay has come up rather frequently.  I have challenged the admission of these business records on the following grounds:
1.  The witness is not properly qualified under the rule.  Here, I argue that the only job of the witness is to travel the country and be a witness at trial.  The witness has only recently reviewed the file and knows little about the actual workings of any department.

2.  The records are from other similar servicing companies and Plaintiff has not questioned or reviewed any of these records.

3.  The records are from untrustworthy sources based upon Billion dollar settlements and fines.

4.  The records are not "business records".  Plaintiff obtained an interest in the loan only to file a foreclosure action.  Plaintiff has never used or relied upon any record to make a business decision.  This is especially true when the employer of the witness obtained an interest in the loan shortly before the complaint was filed or after the complaint was filed.

While the business records exception is applicable to all Ohio civil litigation, it comes up in almost every foreclosure cases.  
Evid.R. 803(6), states:
(6) Records of regularly conducted activity. A memorandum, report, record, or data compilation, in any form, of acts, events, or conditions, made at or near the time by, or from information transmitted by, a person with knowledge, if kept in the course of a regularly conducted business activity, and if it was the regular practice of that business activity to make the memorandum, report, record, or data compilation, all as shown by the testimony of the custodian or other qualified witness or as provided by Rule 901(B)(10), unless the source of information or the method or circumstances of preparation indicate lack of trustworthiness. The term “business” as used in this paragraph includes business, institution, association, profession, occupation, and calling of every kind, whether or not conducted for profit.

Plaintiff in a foreclosure case either through an affidavit of an employee or through the testimony of an employee at trial will present a statement of an employee that rotely repeats the language of Evidence Rule 803.  However, the witness does not work in that office or department.  Instead, the employee is hired to travel around the country providing testimony in foreclosure cases.  The witness will become familiar with the account records of the defendant by reviewing a file shortly before trial.  Not what the evidence rule intended.

The witness will state that he/she is familiar with the business practices of plaintiff; that the records were made at or near the time of the event, by a person with knowledge, and that it was the regular business practice to make such records.  However, the witness never worked for the company that produced the records, never performed the record making, and never relied upon the records.

The witness will be employed by a company that had the rights to collect the debt transferred to it moments before the complaint was filed, or even during the litigation.  The witness will discuss how the records are reviewed for any missing or abnormal item in the business records of the previous company.  If an abnormality in the business records is found, the company that now owns the debt will contact the company that previously owned the debt, and the missing information or document is provided.  This process is known as "boarding" and if the witness can describe the process in any detail, the business records are allowed in as evidence.

Defendant can challenge the Plaintiff's witness on the records, the record keeping process, and the record boarding process, but any inability of the witness will be overlooked because to be admissible the record does not have to be produced by the witness and the witness does not need first hand knowledge of the events recorded.

Defendant can also challenge the Plaintiff's source of the records as being untrustworthy.  There is very little case law on what constitutes an untrustworthy source.

The rationale behind Evid.R. 803(6) is that if information is sufficiently trustworthy that a business is willing to rely on it in making business decisions, the courts should be willing to as well. See Staff Note to Evid.R. 803(6).
Deutsche Bank Nat’l Trust Co. v. Hansen (Ohio App. 5th Dist.), 2011-Ohio-1223, at 21.

This is how I would imagine the evidence rules were intended to apply to a foreclosure.  The local bank would call the bookkeeper who had custody of the account records.  The bookkeeper did not input every single notation in the account record of defendant homeowner, but the bookkeeper knew the tellers, has seen the defendant homeowner making payments, and had actually trained one or more of the individuals putting the notations in the records of defendant homeowner.  The records before the witness are copies but she made the copies earlier in the week so that the official records did not need to leave the bank.  Finally, she could rely upon the business records because no homeowner ever doubted the records, and the records were used by the bank to decide if it was going to extend any more credit to the defendant homeowner.

Today, the Plaintiff is either a multinational corporation or a trust which possesses thousands of loans.  The local bank does not keep the local account.  Instead, the loan is packaged and sold so many times that an industry as developed just to keep track of all the transactions (MERS).  The loans are sold, or the servicing rights are sold by the thousands.  Each loan would be expected to have many pages of loan documents, payments, payment histories, telephone call logs, telephone conversation transcripts, demand letters, and field visits.  Many thousands of page of information have been transferred several times during the life of the loan.  Each time each loan is transferred, the new servicer "boards" or reviews each paper of each loan.

Typically, as a homeowner becomes in default, the servicing rights are transferred several more times, as the value of the non-performing loan is less.  Then as the loan is about to be foreclosed there is a whirlwind of activity to make certain that all the transfers of the loan are documented.  The business entities that are buying and selling these loans and are reviewing all the papers regarding the loans, do not have the time or money to make certain that the transfers are properly documented until right before the complaint is filed.

The Plaintiff and the plaintiff's servicer's employee now come into court and state that Plaintiff has relied upon the business records to make business decisions.  Plaintiff states that it can rely upon the business records from these other financial institutions.  The financial records of these other financial institutions should not be considered untrustworthy.  The financial institutions have had allegations of bad practices, but those claims of bad acts have been settled to avoid the cost of litigation.  These other financial institutions have not admitted liability, they have simply paid BILLIONS to settle claims regarding their business practices.  

Friday, April 6, 2018

My New Office

My Office has moved.  My office is now located at 2670 North Columbus Street, Suite L in Lancaster, Ohio 43130.  My telephone number is (740) 277-7850.  My previous number (330) 965-1093 should eventually remotely access and transfer to my new location.  There has been a delay in the process and my (330) 965-1093 telephone number does not answer while the two providers discuss an issue with "porting".  I apologize for the inconvenience. 

My email remains the same; and my website is still located at

Monday, February 19, 2018


I have not posted a blog in quite sometime, so the first thing I wanted to do was to let people know that I am moving my office to the Central Ohio area.  I am originally from Lancaster, Ohio and I will be relocating to be closer to my family and my wife's family.  Very little else will change.

I will still practice in the Eastern portion of Ohio, with cases from Lake County to Scioto County.  I will still be readily available by phone and email.  I will meet with clients when they desire a face to face meeting, but as my current clients already know most things can be accomplished over the telephone or through email.

An Update on Defending Foreclosures

Despite the national media finding a new economic crisis to focus on, many people are still struggling with keeping their house or saving their house from foreclosure.  Many of the same tactics are being used.  Homeowners are suddenly three months behind when a new servicer takes over the loan.  Homeowners are still encouraged to stop making payments while a loan modification is being worked out.  Even though HAMP is no longer an ongoing government program, HUD Regulations are more often incorporated into the promissory notes and mortgages, and Regulation X provides all mortgagees (homeowners) with certain protections while working out a loan modification.  In addition, as the loans have been transferred repeatedly, many of the lenders are becoming much more willing to waive late fees, and accrued interest.  Loan modifications are actually somewhat helpful instead of simply delaying the inevitable.

While promising changes are occurring in modifications, trial courts have become more favorable settings for homeowners.  Many of the arguments remain the same, but Homeowners are having greater success in avoiding summary judgment and getting to trial.  At trial some of the weaknesses of the Plaintiff's case become more apparent.  

There is still no free home.  (The wisdom of the kingdom was reduced to a single phrase: No free Lunch.). However, a dismissal based upon the failure to comply with conditions precedent should not simply result in the Bank starting over.  Instead, if the bank improperly accelerated the loan balance and then refused to accept payments, then the bank should be liable for the arrearages; the accrued interest, and late fees under RESPA.  This will result in what most homeowners are seeking: going back to the point before all the problems started.

Sunday, March 6, 2016

Yvanova vs. New Century Mortgage Corporation No.S218973 Supreme Court of California

When the California Courts issued the decision of Glaski v. Bank of America, supra, 218 Cal.App.4th 1079, I did not get that excited and did not pay much attention.  Glaski was issued in a "non-judicial" state; Glaski involved a claim for wrongful foreclosure; it was an appellate decision; and other Appellate decisions distinguished or criticied Glaski.  However, the recent decision of Yvanova vs. New Century Mortgage Corporation, in which the California Supreme Court determines that a homeowner can challenge an assignment as void, is exciting.

There are still all of those reasons to criticize the California decision.  It is a "non-judicial" state, and even the opinion states that the opinion is on a limited and narrow issue.  However, in Yvanova, the Court discusses the issue with such clarity and in such plain language that Courts will be hard pressed to ignore its holding.  Yvanova starts with the simple premise that only a person or entity with an interest in the promissory note or mortgage can sue to enforce the promissory note or foreclose upon the mortgage.  (A simple concept that the Courts and Banks have contorted into unrecognizable pretzel like images of the original concept.).  Yvanova then discusses the difference between a void and a voidable transaction.  

The Yvanova Court discusses many of the other cases from other jurisdictions that the Ohio Courts have ignored and continue to ignore.   However, the California Supreme Court has gathered many of these cases from other jurisdictions in one place and discusses them all in detail.  In Yvanova the Court addresses the debate; engages in the debate, and makes a well reasoned choice between the two sides.  Yvanova determines that the Homeowner can challenge the validity of an assignment as being void, and does so in a manner that does not appear to be the result of result oriented circuitous reasoning.

With the recent decision of U.S. Bank Natl. Assn. v. George (Ohio App. 10th Dist.), 2015-Ohio-4957, and Anh Nguyet Tran vs. Bank of New York Petition for Writ of Certiorari, the issue of standing, and now the California Supreme Court issuing a well reasoned opinion in support of the homeowners right to challenge the validity of an assignment, it may be that the tide is turning in favor of the homeowner.

The Law Office of Bruce M. Broyles: Ohio Homeowners may be able to Assert Failure to C...

The Law Office of Bruce M. Broyles: Ohio Homeowners may be able to Assert Failure to C...: In several  previous posts; April 5, 2013 Failure to Comply with PSA Results in Void Judgment; and August 2, 2013 Update on Failure to Comp...

Ohio Homeowners may be able to Assert Failure to Comply with PSA

In several  previous posts; April 5, 2013 Failure to Comply with PSA Results in Void Judgment; and
August 2, 2013 Update on Failure to Comply with PSA, I argued that Homeowners facing foreclosure are entitled to assert the failure to comply with the pooling and servicing agreement.  I stated that the failure to comply with the PSA would result in a void transfer of the promissory note or a void assignment of the mortgage.  In a post September 29, 2015 Anh Nguyet Tran vs. Bank of New York Petition for Writ of Certiorari, I asserted that Anh Nguyet Tran highlighted a similar battle being fought in Ohio as Homeowners are prevented from asserting challenges to the validity of the assignment based upon appellate court decisions that rely upon Bank of New York Mellon vs. Unger (Ohio App. 8th Dist.) 2012-Ohio-1950.  

The argument that I have been making that the federal cases relied upon by Unger were being misinterpreted.  I relied upon the Alexander vs. Deutsche Bank National Trust Co. (N.D. Ohio West Dis.) Case No.: 3:12-CV-02704; and Slorp vs. Lerner Sampson & Rothfuss587 Fed.Appx. 249.  According to Alexander and Slorp Ohio Homeowners should be able to challenge the validity of assignments if the challenge would result in a void transaction.

Now the Court of Appeals for the Tenth District has made the same argument in granting a homeowner facing foreclosure the right to challenge an assignment as being void.  

In U.S. Bank Natl. Assn. v. George (Ohio App. 10th Dist.), 2015-Ohio-4957, the Court held:

Because we have reversed the trial court's summary judgment on issues concerning the note and appellants' challenge to appellee's standing to enforce the note, we necessarily overrule our prior holding in LSF6 Mercury REO Invests. Trust Series 2008-1 v. Locke , 10th Dist. No. 11AP-757, 2012-Ohio-4499. In Locke, we held that the makers of notes and mortgages are without standing to challenge the validity of transfers or assignments to which they were not parties.  ***

We believe that at least one of the underlying cases relied on by the court in Locke has been clarified to the point that its premise as we surmised it no longer supports what we previously held in Locke denying standing to non-privity challengers of note and mortgage transfers and assignments. We thus extend our holding in Pasqualone to clarify that standing broadly exists for persons to challenge the validity of the transfer of a note4 or assignment of the mortgage, whether or not in privity with the person entitled to enforce the note or mortgage, regardless of whether or not the note has been negotiated and transferred under R.C. Chapter 13, Ohio's codification of the Uniform Commercial Code.
The maker of a note or mortgagor who is facing enforcement at law on the note or enforcement in equity on the mortgage has a personal stake in challenging whether a person claiming to be entitled to enforce such a note or a mortgage has been duly transferred or assigned rights under either or both instruments, regardless of whether or not the challenger is in privity with the person claiming the right to enforce.

The Court in George went on to explain that the cases upon which it relied upon in Locke had been clarified, stating:

Locke's holding is based in part on a line of federal court decisions5 that, even since we decided Pasqualone, has been modified by the Sixth Circuit Court of Appeals. In Slorp v. Lerner, Sampson & Rothfuss, 587 Fed.Appx. 249, 254-56 (6th Cir. 2014), the United States Sixth Circuit Court of Appeals held: [Slorp] attributes his injuries to the improper foreclosure litigation. According to the complaint, [defendant] Bank of America (through LSR) filed a foreclosure action against Slorp despite its lack of interest in the mortgage; the defendants misled the trial court by fraudulently misrepresenting Bank of America's interest in the suit; and Slorp incurred damages when he was compelled to defend his interests. If Bank of America had no right to file the foreclosure action, it makes no difference whether Slorp previously had defaulted on his mortgage. * * * [T]he district court erred when it held otherwise. * * * Much of the district court's analysis was taken from Livonia Properties Holdings, LLC v. 12840-12976 Farmington Road Holdings, LLC, [717 F.Supp.2d 724 (E.D.Mich.2010), aff'd, 399 Fed.Appx. 97 (6th Cir.2010)] where we held that a homeowner did not have standing to challenge the validity of a home-loan assignment in an action contesting a foreclosure. 399 Fed.Appx. 97, 102 (6th Cir.2010). We analyze the district court's holding in more detail than might ordinarily be necessary because our Livonia Properties opinion has confounded some courts and litigants, see, e.g., Etts v. Deutsche Bank Nat'l Trust Co., No. 13-11588, 2014 WL 645358, at *4 (E.D.Mich. Feb. 19, 2014) * * *. 5 See, e.g., Livonia Properties Holdings, L.L.C. v. 12840-12976 Farmington Rd. Holdings, L.L.C., 717 F.Supp.2d 724 (E.D.Mich.2010), aff'd, 399 Fed.Appx. 97 (6th Cir.2010). No. 14AP-817 14 The district court held, and the defendants now maintain, that Slorp lacked standing to assert his claims because an individual who is not a party to an assignment may not attack the assignment's validity. We differ with this interpretation of Livonia Properties. The sweeping rule that the district court extrapolated from Livonia Properties dwarfs our actual holding in that case. (Footnote deleted.) On summary judgment or otherwise, it is the movant's burden to establish the chain of transfers and assignments, if it is not the original mortgagee, and this is well-established in the law. Seimer at ¶ 19. That the mortgagor may not be a party or in privity to a party to an assignment contract should not operate to diminish in any way that burden. See Slorp at 255 ("a non-party homeowner may challenge the validity of an assignment to establish the assignee's lack of title, among other defects"). Thus, we clarify governing case law and overrule our previous holding in Locke, fully restoring the burden placed on the person asserting entitlement to enforce the note or mortgage. Accordingly, the maker of the note or mortgage has standing to challenge their enforcement against the maker, even if not a party in privity to the particular transfer or assignment challenged.

If U.S. Bank Natl. Assn. v. George allows the Homeowner to challenge the validity of an assignment then homeowners throughout the State of Ohio should be making this argument.

Tuesday, September 29, 2015

Anh Nguyet Tran vs. Bank of New York Petition for Writ of Certiorari

An amended complaint asserting a RICO action against REMIC trusts was dismissed on the grounds that Plaintiffs lacked standing to assert the failure to comply with the Trust's pooling and servicing agreement.  The writ asserts that a split exists within the U.S. Circuits on the issue of Plaintiffs' standing.  The Second Circuit held that Plaintiffs lacked standing to challenge the validity of the assignment.  The First Circuit in Culhane v. Aurora Loan Services of Nebraska, 708 F.3d 282 (1st Cir.2013) held that Plaintiffs have standing to challenge the validity of the assignment.

Both Anh Nguyet Tran and Culhane address the issue of whether Plaintiffs have standing to challenge the validity of an assignment.  However, rather than determining only the threshold issue that Plaintiffs have standing to challenge the validity of the assignment as in Culhane, the Court in Anh Nguyet Tran addressed the merits of the challenge to the validity of the assignment.  In Culhane, the Court determined that if the Plaintiff's challenge was correct the foreclosure would be void.  As such, Culhane found the Plaintiffs had standing, but then determined that the Plaintiffs' challenge to MERS involvement in the transaction did not render the assignment void.  In Anh Nguyet Tran, the Court determined that Plaintiffs' lacked standing to challenge the validity of the assignment based upon the Court's determination of the merits.  In Anh Nguyet Tran, the Court determined that the challenge to the validity of the assignment would not succeed and therefore determined that Plaintiffs lacked standing.

One of the main issues is whether the failure to comply with the Trust's governing documents renders the transaction void or merely voidable.  If the promissory note and mortgage are transferred after the closing date, and in a manner not described by the Pooling and Servicing Agreement, then the terms of the Pooling and Servicing agreement are violated.  The majority of these trusts are governed by New York Law. The New York Law of Estates, Powers and Trusts, N.Y. EPT. LAW § 7-2.4, states:

If the trust is expressed in the instrument creating the estate of the trustee, every sale, conveyance or other act of the trustee in contravention of the trust, except as authorized by this article and by any other provision of law, is void.

The Second Circuit relied upon standard Trust Law and determined that the beneficiaries could ratify invalid acts of the Trustee.  If the invalid acts could be ratified, then these transactions were merely voidable, not void.  A voidable transaction does not give Plaintiff mortgagors standing to challenge the validity of the assignment.

The problem in Anh Nguyet Tran is that the Court addresses the merits of the case upon a motion to dismiss based upon the threshold issue of standing.  There has been no discovery and no argument presented on the issue upon which the Court ultimately determined the case; whether the beneficiaries could ratify the invalid act of the Trustee.  Generally speaking, it is true that beneficiaries can ratify the invalid acts of the Trustee.  However, in mortgage securitization the Courts are dealing with REMIC Trusts, and these Trusts have provisions which prevent the Trustee from taking any action that would render the REMIC election invalid.  The invalid acts of a Trustee of a REMIC Trust cannot be ratified.  As such, these invalid transactions are void not merely voidable.

A similar battle is being fought in Ohio.  Homeowners are prevented from asserting challenges to the validity of the assignment based upon appellate court decisions that rely upon Bank of New York Mellon vs. Unger (Ohio App. 8th Dist.) 2012-Ohio-1950.  However, the Sixth Circuit has expressly stated that the federal cases relied upon by Unger are too broadly interpreted.  See, Alexander vs. Deutsche Bank National Trust Co. (N.D. Ohio West Dis.) Case No.: 3:12-CV-02704; and Slorp vs. Lerner Sampson & Rothfuss,
587 Fed.Appx. 249.  According to Alexander and Slorp Ohio Homeowners should be able to challenge the validity of assignments if the challenge would result in a void transaction.