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

Wednesday, October 31, 2012

Ohio Supreme Court Reverses Schwartzwald

While the issue was not expressly addressed, I believe the language of the opinion allows motions to vacate void judgments based upon the lack of standing.

The Ohio Supreme Court addressed the following certified conflict:
“In a mortgage foreclosure action, the lack of standing or a real party in interest defect can be cured by the assignment of the mortgage prior to judgment.”

The Ohio Supreme Court held that standing is required to invoke the jurisdiction of the common pleas court, and therefore it is determined as of the filing of the complaint. 

The Ohio Supreme Court concluded:
It is fundamental that a party commencing litigation must have standing to sue in order to present a justiciable controversy and invoke the jurisdiction of the common pleas court. Civ.R. 17(A) does not change this principle, and a lack of standing at the outset of litigation cannot be cured by receipt of an assignment of the claim or by substitution of the real party in interest.

The entire opinion can be viewed at the following link:

The Decision was unanimous without any concurring opinion.  The Legal Scholars do not need to attempt to decipher how the political winds may have affected the outcome.  The Court applied the Laws and Rules of Court.

Throughout this process I have been having a debate with others as to whether the lack of standing resulted in a void judgment or merely a voidable judgment.  A void judgment can be challenged at any time.  The issue can be raised at any point in the proceedings.  The issue cannot be waived.  I have always argued that standing was not "jurisdictional" and therefore the lack of standing did not result in a void judgment.  I had always asserted in the debate that the Courts used the phrase "invoke the jurisdiction" of the Court, but they did not really mean that a "jurisdictional" flaw existed. 

In the Ohio Supreme Court's decision today, I believe that there is a much stronger argument to be made that the lack of standing creates a jurisdictional flaw that results in a void judgment.

The Ohio Supreme Court addresses the issue of stadning by relying upon the Ohio Constitution's grant of original jurisdiction, stating:

 The Ohio Constitution provides in Article IV, Section 4(B): “The courts of common pleas and divisions thereof shall have such original jurisdiction over all justiciable matters
and such powers of review of proceedings of administrative officers and agencies as may be provided by law.”

The Ohio Supreme Court then cites holdings from its previous cases and holds:
“[s]tanding to sue is part of the common understanding of what it takes to make a justiciable case."

The resulting conclusion is that without standing there is no justiciable matter over which the Court of Common pleas can exercise jurisidiction, and any resulting judgment would be void, not merely voidable.

The Ohio Supreme Court also makes the following statement:

Standing is required to invoke the jurisdiction of the common pleas court.  Pursuant to Civ.R. 82, the Rules of Civil Procedure do not extend the jurisdiction of the courts of this state, and a common pleas court cannot substitute a real party in interest for another party if no party with standing has invoked its jurisdiction in the first instance.

Based upon the Ohio Supreme Court's decision in Schwartzwald 2012-Ohio-5017, a strong argument can be made that a Plaintiff that did not possess an interest in the promissory note and mortgage at the time the complaint was filed, had no standing to invoke the Court's jurisdiction, and any resulting judgment is void and subject to a motion to vacate.

Thursday, October 4, 2012

Thank you

It has been a while since I have written anything and I apologize, but I could not let this moment pass without saying thank you.

Recently a newspaper article covered a story about a homeowner facing foreclosure who decided to fight back.  The link is here .

That story will take you to the site of Ohio Fraudclosure, and if you go to the trusted attorney section I am listed with my contact information.  I greatly appreciate the efforts to guide Homeowners Facing Foreclosure to Attorneys with experience in this area.

Again, Thank you.

Friday, July 6, 2012

FDCPA and Those Calls to Clients

In 2007, Ohio replaced its Code of Professional Conduct with the Ohio Rules of Professional Conduct.  I was almost certain that a "Servicer" contacting the client during litigation violated the new ethical rules.  Today, when another client called distraught over receiving a telephone call from the "Servicer", I decided I needed to review the Rules again.  Turns out that Rule 4.2 comment [4] actually allows such contact between the clients.
4.2 Comment [4]Parties to a matter may communicate directly with each other, and a lawyer is not prohibited from advising a client concerning a communication that the client is legally entitled to make.
Upon further reflection, I had to question whether the contact was from a party to the litigation.  Since it was from the Servicer and not the Plaintiff this was not communication by a party.

I then reviewed the Ohio Consumer Protection Acts, and could not find any prohibition against clients being contacted directly by debt collectors.  I then turned to the Fair Debt Collection Practices Act (FDCPA) 15 U.S.C. §§ 1692-1692p.

I believe that the "servicer" would be a debt collector, and the FDCPA prohibits debt collectors from contacting consumers who are represented by counsel.  I did not see any definition of consumer which rendered the FDCPA inapplicable to mortgage debt.  Further, the cases that I reviewed involving FDCPA did not apply the statute to the Lender as it was collecting its own debt.  However, when a 'servicer" contact the client, it may be a debt collector because it is not an affiliate of the Lender.  A Lender that originated the loan only to immediately sell the loan and retain the "servicing rights" would be a debt collector.

The FDCPA prohibits a debt collector from directly contacting a consumer who is represented by counsel. 
Without the prior consent of the consumer given directly to the debt collector or the express permission of a court of competent jurisdiction, a debt collector may not communicate with a consumer in connection with the col­lection of any debt—
if the debt collector knows the consumer is represented by an attorney with respect to such debt and has knowl­edge of, or can readily ascertain, such attorney’s name and address, unless the attorney fails to respond within a reasonable period of time to a communication from the debt collector or unless the attorney consents to direct communication with the consumer; 15 U.S.C. 1692c.

The FDCPA provides civil damages up to $1,000 plus attorney fees.  I think it may be a good point of practice to advise opposing counsel to inform Plaintiff's "servicer" that it is not to directly communicate with the client.  This may avoid some aggravation for the client.  When the servicer contacts the Homeowner despite the requested warning, the servicer may be liable for civil damages under teh FDCPA.  Since the driving force behind many foreclosures seems to be the money that "servicers" make such a FDCPA claim may provide some leverage to thos erepresenting Homeowners Facing Foreclosure.

I am certain that many others have already thought of this and are (1) successfully using it or (2) are aware of the downfall of this strategy and avoid it.  I would ask for those reading this with experience on the issue reply and educate me accordingly.  

Thursday, July 5, 2012

Free Advice to Homeowners Facing Foreclosure

Today, I will again be in the office at 6:00 p.m. to answer any question of a Homeowner Defending a Foreclosure complaint.  I subscribe to a number of foreclosure websites and blogs, and I receive articles written by very knowledgeable and caring experts.  Most of those articles address very technical issues, or discuss the issue on a large national scale.  These articles present issues that may exist in a Homeowner's case, but the articles do noy provide easy how to information as to how these issues may apply to an individual case.

What I am trying to do is explain the process to people going through it the first time.  Litigation is complex.  Homeowners not only have to deal with the complexity of litigation, they also have to deal with the frightening experience and threat of losing their home.  

Foreclosure Defense seems to have created a cottage industry for companies and individuals to prey upon the difficult circumstances of these Homeowners.  Many Homeowners have be subjected to high pressure, fast talking, "too good to be true" sales pitches.  That is why I invite Homeowners Facing Foreclosure to come to my office and I will try to answer your questions.  Its FREE. 

Sunday, July 1, 2012

The Tension Between HAMP and the One Year Guideline

 The Making Home Affordable Program, Version 3.3, As of September 1, 2011.

In February 2009, the Obama Administration introduced the Making Home Affordable Program, a plan to stabilize the housing market and help struggling homeowners get relief and avoid foreclosure. In March 2009, the Treasury Department (Treasury) issued uniform guidance for loan modifications across the mortgage industry and subsequently updated and expanded that guidance in a series of policy announcements.

A number of attorneys will talk about HAMP and some of the requirements, but many, including myself, have, or at least had,  no idea where to locate the Guidelines, what authority existed for the Guidelines or the Federal Regulation creating the guidelines.  According to the guidelines, the Federal authorityb comes from the following:

As part of Helping Families Save Their Homes Act of 2009 (HFSTHA), Congress established the Servicer Safe Harbor by amending the Truth in Lending Act for the purpose of providing a safe harbor to enable such servicers to modify and refinance mortgage

The United States Department of Housing and Urban Development describes the authority the same as the guidelines.
Legal Authority: Section 230(b) of the National Housing Act (12 U.S.C. 1715u(b)), as amended by the Helping Families Save Their Homes Act of 2009, Division A of Public Law 111-22.

Administering Office: Assistant Secretary for Housing-Federal Housing Commissioner, U.S. Department of Housing and Urban Development, Washington, DC 20410-8000.
Information Source: Administering Office.

The HAMP Program and other relief efforts are overseen by the Special Inspector General for the Troubled Assets Relief Program, SIGTARP, which was established by Section 121 of the Emergency Economic Stabilization Act of 2008 ("EESA").
Under EESA, the Special Inspector General has the duty, among other things, to conduct, supervise and coordinate audits and investigations of the purchase, management and sale of assets under the Troubled Asset Relief Program ("TARP").
 loans under a "qualified loss mitigation plan."

Now that we know where to find the guidelines there are several provision that are helpful to Homeowners facing Foreclosure.

3.2 Suspension of Foreclosure Proceedings in Process
With respect to a borrower who submits a request for HAMP consideration after a loan has been referred to foreclosure, the servicer must, immediately upon the borrower’s acceptance of a TPP based on verified income, and for the duration of the trial period, take those actions within its authority that are necessary to halt further activity and events in the foreclosure process, whether judicial or non-judicial, including but not limited to refraining from scheduling a sale or causing a judgment to be entered.
The servicer will not be in violation of this section to the extent that: (a) a court with jurisdiction over the foreclosure proceeding (if any), or the bankruptcy court in a bankruptcy case, or the public official charged with carrying out the activity or event, fails or refuses to halt some or all activities or events in the matter after the servicer has made reasonable efforts to move the court or request the public official for a cessation of the activity or event; (b) the servicer must take 
some action to protect the interests of the owner, investor, guarantor or servicer of the loan in response to action taken by the borrower or other parties in the foreclosure process; or (c) there is not sufficient time following the borrower’s acceptance of the TPP for the servicer to halt the activity or event, provided that in no event shall the servicer permit a sale to go forward. The servicer must document in the servicing file if any of the foregoing exceptions to the requirement to halt an existing foreclosure sale is applicable.
3.3 Suspension of Scheduled Foreclosure Sale
When a borrower submits a request for HAMP consideration after a foreclosure sale date has been scheduled and the request is received no later than midnight of the seventh business day prior to the foreclosure sale date (Deadline), the servicer must suspend the sale as necessary to evaluate the borrower for HAMP. Servicers are not required to suspend a foreclosure sale when: (1) a request for HAMP consideration is received after the Deadline; (2) a borrower received a permanent modification and lost good standing (as described in Section 9.4); (3) a borrower received a TPP offer and failed to make one or more payments under the TPP by the last day of the month in which it was due; or (4) a borrower was evaluated based upon an Initial Package and determined to be ineligible under HAMP requirements.
The servicer will not be in violation of this section to the extent that a court with jurisdiction over the foreclosure proceeding (if any), or the bankruptcy court in a bankruptcy case, or the public official charged with carrying out the activity or event, fails or refuses to halt the sale after the servicer has made reasonable efforts to move the court or request the public official for a cessation of the sale. The servicer must document in the servicing system and/or mortgage file if the foregoing exception to the requirement to suspend an existing foreclosure sale is applicable.

Unfortunately for Homeowners facing foreclosure in Ohio there is an unintended tension between the Federal Government's desire to assist Homeowners Facing Foreclosure and the Ohio Supreme Court's Rules of Superintendence for Ohio Courts.  Rlue 35 requires a Case Management Section of the Supreme ourt to create and Audit Statistical Reports.  Rule 37 requires Judges to file statistical reports on a periodica basis.  Rule 39 creates time guidelines for the disposition of cases which shall be set forth on the statistical report forms.  Statistical Refport Form A, Section III, C (5) defines reporting case known as Foreclosure.
5. Foreclosures - Column E. This category is used for cases that involve the enforcement of a lien, mortgage, trust deed, or other similar instrument in any method provided by law. A case will be reported as terminated upon filing of foreclosure entry. Whether the case proceeds to the sale of the property has no influence on the termination of the case for reporting

Statistical Report Form A- Section III D(21) provides that the time period for the disposition of cases shall be listed immediately above line 21.  Rule 22 states: These time guidelines are mandatory and it is expected that all cases will be terminated within the applicable guideline.
General Division – Form A:
 Mandatory Time Guidelines
Professional Tort                    24 months
Product Liability                     24 months
Other Torts                              24 months
Worker’s Compensation       12 months
Foreclosures                            12 months
Administrative Appeals          9 months
Complex Litigation                  36 months
Other Civil                                24 months
Criminal                                       6 months

The Ohio Supreme Court publishes the statstical reports on its website, under the pull down menu of Reports and Publications.  The 2009 Statistical reports provides an overviw of a period of ten years of statistical reports,  See it here

The report also provides an insight into the Supreme Court's use of the statistical reports to evaluate the Courts of Ohio.  The key indicators are set forth in the 2009 Ohio Courts Statistical Summary, see the following excerpt.

General Notes Concerning Performance Measures
When analyzing the work of Ohio courts and judges, the Case Management Section of the Supreme Court regularly evaluates two key performance measures readily available using caseload statistics reported by the courts: clearance rates and overage rates. Both measures can be applied to a court’s overall docket, individual case types or groups of case types.
Clearance Rate
This measure identifies how well a court keeps up with its incoming caseload. It is calculated as follows:
Clearance rates can be calculated over any time period, as long as the incoming and outgoing values apply to that same time period. However, calculating clearance rates on a monthly basis is less valuable due to the ordinary variations that are seen when this data is viewed over a short time span.
Using monthly caseload statistical reports submitted by judges, the total number of outgoing cases is determined using the reported “Total Terminations” values. The total number of incoming cases is determined using the sum of the reported “New Cases Filed” and “Cases Transferred in, Reactivated, or Redesignated” values. The ratio of outgoing cases to incoming cases (produced using the above formula) is ordinarily multiplied by 100 and expressed as percentage. The target is a clearance rate of 100 percent.  A clearance rate of 100 percent means a court terminated over a given time period exactly as many cases as it took in during that same time period. If a court’s clearance rate is regularly less than 100 percent over an extended period of time, the court will develop a backlog because the pace of incoming cases exceeds the pace of outgoing cases.
While valuable, clearance rates alone do not accurately depict a court’s success in moving its entire docket forward in a timely fashion. A court may regularly demonstrate a 100 percent or greater clearance rate while simultaneously keeping a sizable number of cases from being disposed of within applicable time standards. Accordingly, clearance rates should,
where practicable, be viewed alongside a measure that gauges the extent to which a court’s caseload is pending beyond time standards, such as the overage rate.
Clearance Rate =   Total number of outgoing cases
                                  Total number of incoming cases
Overage Rate
This measure identifies the extent to which a court’s pending caseload lags past applicable time standards, or, overage. To put it another way, it measures the size of a court’s backlog. It is calculated as follows: Using the monthly caseload statistical reports submitted by judges, the total number of cases pending beyond the time guideline is determined
using the reported “Cases Pending Beyond Time Guideline” value, and the total number of cases pending is determined using the reported “Pending End of Period” value. The result is multiplied by 100 and expressed as a percentage.
In 2008, the Supreme Court, in
Disciplinary Counsel v. Sargeant, 118 Ohio St.3d 322, 2008-Ohio-2330, identified an overage rate of 10 percent or greater as an indication of a case management problem.
The 2009 Statistical Summary demonstrates that a county which handled 200 cases in 1997, and had 1800 to 2000 foreclosures filed in 2009 would be required to clear (clearance rate) 1600 more foreclosures within one year (overage rate).  There is an increase of 1600 cases with no new Judges, no new Magistrates, and most likely fewer Clerk of Court staff person.

Foreclosures must be completed within one year.  There are now many more foreclosures filed each year.  The Banks are using this pressure to overwhelm the Court system.  This causes a tension between HAMP which says foreclosures are to be stayed vs. the Ohio Supreme Court guidelines which require cases to be completed in a year.  As a result "Duel Tracking" must take place in Ohio, because the Courts can not afford to stay cases and still comply with the Ohio Supreme Court time guidelines. 

Duel Tracking is not inherently evil, but the Banks convince the Homeowners that they do not need an attorney.  The homeowner does not need to worry about the foreclosure.  However, when the time is up, the Court is going to dispose of the case. 

The oddity of the Supreme Court Guidelines is that the case is considered closed regardless of whether the Home goes to Sheriff's sale.  So Courts that are racing to comply with Supreme Court statistical reporting requirements are much more likely to cancel a Sheriff's sale due to HAMP modification.  Unfortunately for Homeowners, attorneys have trouble even finding the HAMP guidelines and statutory authority.  So Homeowners finally seek out counsel after the decree of foreclosure, and the attorney says there's nothing I can do for you now; its too late.


Monday, June 18, 2012


I am a lawyer.  I think Homeowners facing Foreclosure should contact an attorney.  However, I tried putting myself in the shoes of someone trying to seek out information to defend a foreclosure complaint.  I first looked at the summons that is attached to the complaint in Ohio.  It directs you to Save The Dream.  It gives you a telephone number; I called the number.  I asked straight up how do I find an attorney to help me.  The person on the other end of the telephone did not know. They did not provide that type of assistance, but he was able to set up an appointment at an office near me.   He gave me the address, but I declined the assistance.

I then located the address on the internet and the agency that was located at the address was a Credit Counseling Center.  I did not speak with anyone at the Center, but I have discussed a number of foreclosure cases with people who have gone to credit counseling.  The Credit Counseling Agency does not provide the names of attorneys who could provide assistance.  They provide credit counseling that will guide the individuals through the various governmental programs that will assist the Homeowner Facing Foreclosure.  These credit counselors assist the Homeowners while the Homeowners work with the Lender/Plaintiff.  (While the Homeowners need a lifeline, all they are given is an opportunity to take swimming lessons.). 

In Northeastern Ohio there are a number of billboards encouraging people to contact an agency for assistance.  The telephone numbers on most of the billboards, lead the person to Neighborworks, the National Federation of Credit Counseling, ESOP (Encouraging and Strengthening Ohio's People).  I was at a meeting with several individuals from ESOP, and I wanted to know how they put people in contact with attorneys.  The individuals I met with had no attorney resources to whom they could refer a Homeowner facing Foreclosure.  The ESOP representatives had no where to turn when their loan modification options for Homeowners facing Foreclosure ran out.  I gave them a number of my business cards and suggested that I could be a resource.  It has been almost a year and those representatives have never needed my assistance.

I have run into attorneys who work for Legal Aid Societies.  These attorneys are diligent, hard working and caring people.  They eductae themselves on the issues and are prepared to place the Lender/Plaintiff in a position to offer a reasonable loan modification.  The problem: in order to qualify for assistance from legal aid your income has to be below a certain level.  Those Homeowners may obtain a level playing field, but the Lender/ Plaintiff can simply run the numbers and say that the Homeowner facing Foreclosure does not qualify.  Those Homeowners Facing Foreclosure who have income to support a loan modification or otherwise defend the foreclosure complaint do not qualify for assistance from the attorneys at the Legal Aid Society.

Homeowners Facing Foreclosure, who contact a governemental agency for assistance, are told that by participating in a loan modification program the foreclosure complaint will be stopped.  I originally thought that this was misinformation purposefully provided to Homeowners Facing Foreclosure.  Upon closer inspection the HUD guidelines require the Lender to take no further action to proceed toward a judgment in foreclosure or toward the Sheriff Sale.  The Federal Governmental Agency that provides the assistance states that the Lender is not to proceed, but no one tells the Court that the Homeowner is pursuing a loan modification. No one tells the Homeowner that they need to contact the Court.  As a result, the Homeowner Facing Foreclosure pursues a loan modification which remains active until the foreclosure judgment or Sheriff's sale has occurred.  Now, that the Homeowner facing Foreclosure has "waived" most of their rights as a result of not participating in the foreclosure litigation, the Homeowner facing Foreclosure will receive notification that the loan modification has been denied.

Homeowners Facing Foreclosure, who are fortunate enough to find one of the many websites/ blogs that provide information to the Homeowners, must be overwhelmed with all of the inform that is provided.  As an attorney, I find the information provided helpful.  However, if I place myself as a Homeowner facing Foreclosure, I do not know where to start.  Most of the information is at the Calculus Level, and I am looking for the answer to 2+2.  Even the websites providing information encourage the Homeowner to contact an attorney and provide lists of trusted attorneys. But that  information is not front and center, and therefore must be overlooked.

I must assume that being a Homeowner Facing Foreclosure trying to find help places so much pressure, fear and anxiety upon the Homeowner that it is difficult to know where to turn.  I encourage Homeowners to educate themselves, seek assistance from all agencies available, but to also participate in the legal system.

Monday, June 11, 2012

Free Foreclosure Defense Advice Continues

I recently posted my willingness to offer free foreclosure defense advice to anyone who showed up at my office on Thursday evenings at 6:00 p.m.  In reviewing the post again, the message was not clear and the size of the text made it difficult to read, so maybe that is why no one has showed up on the first two Thursdays beginning at 6:00p.m.

I will be in my office and will answer any question anyone has regarding the foreclosure complaint and legal process.  It seems like most homeowners try to defend the complaint on their own and become confused and/or miss some important step along the way.  Homeowners facing foreclosure often wait until the Sheriff's Sale is approaching or after they have received an eviction notice before they contact an attorney.  (I am amazed at how many homeowners will send money to a "loan modifciation" company located out of state before they will consult with a local attorney.)

I do not believe a Homeowner is adequately equipped to defend the foreclosure on their own, but if the Homeowner is going to attempt to do it on their own, then I can at least be here as a resource.  It would seem that there have been so many "Foreclosure Rescue Scams" that homeowners have become wary and refuse to even talk to attorneys.  Hopefully, I can help some.

Wednesday, May 23, 2012






Saturday, May 19, 2012

Appearance counsel for Homeowners

I am not suggesting that Attorneys start doing this.  Instead, I am just floating an idea for people to comment on and critique.  There are probably a number of ethical rules that would prevent someone from actually doing it.  But what would happen if attorneys who practiced foreclosure defense just showed up at the Courthouse.  These attorneys could sit in the Courtrooms from 9:00 to 11:00 and again at 1:00 to 2:00.  When a case was called the attorney would wait to make certain that the Defendant did not stand or that another attorney was not present to represent the Defendant.  When it was clear that no one was there on behalf of the Defendant, the Attorney would simply state that he was there on behalf of the Defendant; that he had not had an opportunity to speak with Defendant regarding the matter but that he would ask the Court for an additional 30 days within which to file an answer.  The Court rarely requires Civil Rule 6 "good cause" and the Court would likely grant an extension of time. 

The Attorney would then have 30 days to contact the Defendant and see if the Defendant was interested in defending the foreclosure.  If the defendant was not interested, the attorney had obtained an additional 30 days for the Defendant to determine his next move.  No harm no foul.

If the Attorney was succesful in contacting the Defendant and the Defendant was interested in defending the foreclosure, then the Attorney could offer his services.  The attorney would not be causing delay merely for the sake of delay, as almost every foreclosure case that I have reviewed has some portion that has a defensible issue.  I am certain that the Supreme Court and Disciplinary Counsel would be concerned about the undue pressure that would result from this type of direct contact (soliciatation) by an attorney with a potential client. Maybe we should request an ehical opinion on the issue?

I do not see a great difference between the above and "appearance counsel" who have no authority and no contact with the client prior to walking into the Courtroom on behalf of the Plaintiff.  If the defendant does not appear, the appearance counsel is able to complete his task; hand the proposed entry to the court.  If the Defendant does appear, then appearance counsel stands there siliently while the Court resets the matter giving the Defendant time to either file an answer or retain an attorney.

If Attorneys could act as "appearance counsel", then the biggest obstacle to defending the foreclosure complaint would be avoided; getting the Homeowner facing foreclosure to take some inital action.  Almost every Homeowner Facing Foreclosure wants to defend their home.  The Homeowners are simply too scared to take the initial step.  One or two "appearance counsel" could prevent foreclosures in an entire county.  A network of "appearance counsel" across the entire State could combine their efforts and a handful of Foreclosure Defense Attorneys could prevent foreclosures in the State of Ohio.  With foreclosures piling up in the Courts,  the Ohio Supreme Court would have to extend the time for the Courts to resolve a foreclosure case.  As prosecuting foreclosures to a conclusion became more time consuming fewer law firms would agree to handle foreclosures.  Finally, the banks would have to make legitimate business decisions on a case by case basis.  No more governmental programs.  Bankers simply deciding that some cash flow is better than no cash flow.

Again, this is only an idea that has been posted for suggestions, comments, and ethical reviews.  While we are waiting for a decision on the propriety of "appearance counsel" for Defendants facing foreclosure, maybe we can get Homeowners tol start contacting an attorney for help.

Another Public Service Announcement: Answer the Complaint

The complaint in Ohio has a Summons attached to the front of it and both the Summons and Complaint are served upon the Defendant to begin the civil action.  The Ohio Supreme Court provides the standard form for the Summons to be used by the Ohio Courts of Common Pleas.  The Summons contains the following language:

You have been named a defendant in aforeclosure complaint.  You are hereby summoned and required to do the following:
1.  Within 28 days after service of this summons you must serve (deliver or mail) a copy of your Answer or your Motion for Extension of Time to Answer or Otherwise Plead upon the Plaintiff(s)' Attorney.  If the Plaintiff does not have an attorney, you must serve the Answer or Motion for Extension of Time to Answer or Otherwise Plead on the Plaintiff.  The 28 days is mandatory.  It includes the date you received this summons and excludes the date that you serve the Plaintiff's attorney or the Plaintiff.

2.  You must also file your originalAnswer or your original Motion for Extension of Time to Answer or OtherwisePlead with the Clerk of Court's Office within 3 days after you serve the Plaintiff(s)' attorney or Plaintiff, as appropriate.

The standard form also provides the following information:

We urge you to seek legal counsel.  You may contact the Save the Dream hotline by calling 1-888-404-4674.  Additional information and resources can be found at

Most homeowners are not trained in the law.  To the Courts and Attorneys the above instructions are very simple direct and easy to follow.  To a homeowner who has been dreading this day for quite some time, the fear and panic makes it difficult to read.  Once the Homeowners calms down, the above instructions are still very difficult to understand.  The Homeowner does not understand, even though it clearly says so, that the 28 days begins to run when the summons is received by the Homeowner.  Instead, the Homeowner will count 28 days from the date typed on the summons and determine that either the time has passed or there is very little time to react.

Even though two things are required, the Homeowner will do the suggested optional item set forth above.  The Homeowner will contact Save the Dream.  The telephone number is listed right on the summons, certainly they know more about the process than the Homowner.  Contacting Save the Dream does not fulfill either of the above requirements.  I do not mean to disparage Save the Dream.  All I am saying at this point is that the Homeowner may feel some relief; a counselor is available to help, but the complaint remains unanswered.  The Homeowner is still in default.

Other Homeowners will find the name and telephone number of Plaintiff's attorney and call the attorney.  Other Homeowners will contact the bank directly.  These Homeowners will again feel some relief; they will receive an application for assistance.  The Homeowners are talking to individuals; the individuals actually seem helpful and the Homeowners are given something that they can do and easily understand; answer questions about their finances; explain their financial predicament; provide pay-stubs and tax returns.  The process is almost refreshing at first.  The Homeowner has been wanting to discuss these impossible issues with someone.  However, the Homeowner is still in default; an answer has not been filed with the Court.

The loan modification process, whether through a governmental agency, the bank, or the Plaintiif's attorney takes much longer than expected.  The Homeowner seems to become emotionally invested to continuing with the loan modification process.  Despite how many times the paperwork is insufficient; the paperwork is lost; the paperwork needs updated, the Homeowner continues to turn in the paperwork and continues to contact the Bank, the agency or the attorney. 

The loan modification process also makes the Homeowner ignore the foreclosure complaint.  Some homeowners probably ignore the legal process purposely.  It's too scarey or complicated to think about.  Many other homeowners truly believe that they are participating in the foreclosure litigation; after all they contacted save the dream, they called the bank, they wrote to the attorney.  Another group of homeowners have been increasing in numbers; Homeowners who understand that they must file an answer, ask the people working with the homeowner on the loan modification if they must still file an answer to the complaint, and the Homeowners are mislead.  Some homeowners are outright lied to about the need to file answer.  Other Homeowners are told that it really is not needed and that a loan modification will resolve everything.  Why spend money on an attorney when the homeowner needs to demonstrate his ability to pay his mortgage or come up with a downpayment for the loan modification. 

Homeowners fall into the trap of not filing an answer to the complaint and rely upon the loan modification process to resolve the matter.  However, the Bank eventually files a motion for default, and the Court issues a default judgment and a Decree in Foreclosure.

The bank files a praecipe for order sale and the backlog of cases in many counties results in a number of many months before the order of sale is sent to the Sheriff.  Sometime between the default judgment and the advertisment for the Sheriff's Sale, the Homeowner is either denied a loan modification or presented a loan modification which they can not possibly afford.  Now what to do.  It is at this point many Homeowners contact an attorney.

Unfortunately, most attorneys tell the homeowner there is nothing that can be done.  Its too late. 

While there are still many things that can be done at this point (a motion for relief from judgment; a motion for stay of execution), this post is already too long and written in a stream of conscience format.

The Homeowner who has received a summons and complaint should realize that many attorneys offer free consultations.  Homeowners should also realize that attorneys defending foreclosures offer reduced fees and payment plan.  Contact an attorney.

If the Homeowner chooses to follow some other path, the Homeowner must prepare an answer to the compalint.  There are many sample answers available.  An answer should set forth the Caption.  The first three inches of the complaint where it identifies the court; the name of the plaintiff vs. the name of the defendant; the case number.  It should then plainly state ANSWER.  The answer must then admit or deny each numbered paragraph of the complaint.  After the answer is prepared, the Homeowner must mail a copy to the bank's attorney; file the original with the Court and then have a copy stamped with the filing date for your records.

You can then safely contact whoever you want to attempt to modify your loan.  When calling you should record the date and time of your call; the number that you called, the individuals full name who you spoke to, along with any identification number provided.  You should keep careful, neat and organized notes of each of your telephone converstaions.  You should keep all of your notes in a single designated notebook.  The length of time involved will surpass any of your expectations.  The homeowner should also keep a copy of any document that you complete and send to anyone in the loan modification process.  You should also track through a delivery confirmation, fax transmittal sheet, or fed Express tarcking information the receipt of the loan application.  

The take away from all this should be:  Answer the Complaint.  No matter what anyone else tells you, the Homeowner nust answer the complaint.

Saturday, April 28, 2012

A PSA (Public Service Announcement) aboutPSAs(Pooling and Servicing Agreements)

I recently saw a book review/ interview in which the author stated that Mortgage Backed Securities have been around since Mitt Romney's father, George Romney, was involved in one of the first mortgage backed securities.  I was also reviewing HUD regulations and loan modifications and ran across modification programs in the early 1990's.  Apparently, Mortgage Backed Securities have been around forever and are not necessarily the root of all evil.

At some point Mortgage Backed Securities became prevelant and dominated the finance of real estate transactions.  Talking heads spoke of a housing bubble and the eventual bursting of the bubble.  Those involved in Mortgage Backed Securities eventually invented financial products to protect themselves against the risk of the bubble bursting.  Real Estate transactions began ocurring at a more rapid pace and less credit worthy individuals became involved in these transactions.

As more information becomes available, more time is spent writing and talking about how we got here and who is to blame.  If they are not casting blame, the articles discuss extreme measures that should be taken by Homeowners against Banks or Politicians.  All of this adds to the collective "noise" that has allowed the Banks to continue to do wrong.  The Banks' wrong was not the MBS or the financial items used to diminish the Banks' risks.  The Banks' wrong which continues today is failing to take responsibility for their losses.  When they were making money the Banks did not do things "by the book", "did not crosss their T's and dot their I's".  Now the Banks are attempting to avoid the results of these failures.

Robo-signing is really just the result of Banks trying to recreate or create numerous transactions that should have been done years ago.  The banks created Trusts to hold mortgages and sold an interest in these trusts as certificates.  However, these Trusts required the notes and mortgages to be transferred to the Trust within a very limited period of time.  If these transfers did not occur within these strict time periods, then the assets were not properly transferred to the Trust.  If the assets were not transferred to the Trust, then the Trustee can not bring suit on the note or foreclose upon the mortgage.  Further, the Trust or Trustee can not subsequently transfer the note or mortgage to an investor or a Government Sponsored Entity; Fannie Mae, Freddie Mac.

I strongly believe that Homeowners must engage counsel at an early stage.  As soon as the complaint is filed a Homeowner should contact an attorney.  Attorneys that do not regularly defend foreclosures should refer Homeowners to those attorney that do.  In the last week I have filed a number of pleadings throughout Ohio, in which I argue that the Plaintiff Trust does not possess the Note or Mortgage, and that the Trustee can not seek to enforce a note or mortgage that is not an asset of the trust.  I have relied upon the following authority to make this argument:
1.  The Pooling and Servicing Agreement will set forth the governing law as the law of teh State of New York.
2.     The New York Law of Estates, Powers, and Trusts, NY EPT LAW 7-2.4
*** any act of the Trustee in contravention of the Trust is void ***
3.    I then provide provisions of the Pooling and Servicing Agreement which provide the manner in which the note and mortgage are to be transferred from the Originator to the Sponsor, to the Depositor, and then to the Trustee,
4.  I then cite cases Horace vs. LaSalle Bank NA; Hendricks vs. US Bank NA; and Deutsche Bank National Trust Co. vs. Williams for the proposition that a Plaintiff that fails to comply with the Pooling and Servicing Agreement can not bring suit.

These pleadings are currently pending in four different county courts of common pleas and a court of appeals.  I will post the results as they occur.

Should any attorney have additional authority or would like to discussthe matter in greater detail, please contact my office

Monday, March 5, 2012

Dual Tracking -- In Ohio It is Expected

I recently read a post regarding the California Act that will prohibit Banks from "dual tracking" foreclosure cases.  This term of art that is developing describes the situation in which the Bank continues to work with the Homeowner to modify the mortgage while also proceeding with the foreclosure action.  In Ohio, or at least in the cases I have seen, the Courts expect the Banks to continue to contact the Homeowners.  The Courts will actually inform the Homeowners to keep in constant contact with the Bank and the law firm representing the Plaintiff in the foreclosure, because the Banks never tell the attorneys anything.  Motions for default are denied or at least continued when a homeowner comes to Court the day of the hearing and says (1) I am working with the Bank and have made the final trial payment on my modification, (2) the Bank told me I did not need to appear, but I thought I should.  If the Homeowner did not appear default judgment would have probably issued.

Several of my more recent clients have stated that (1) they were told that a modification would resolve the foreclosure, (2) they did not need to appear at Court, (3) they were eventually denied the loan modification only to find out that the Court granted judgment in favor of the Bank.  In addition, those clients who have contacted my office as soon as they are served with the complaint, state that they are contacted by the Bank repeatedly until the answer is filed.  This could be the Bank ethically deciding not to contact a party who is represented by counsel, but it is starting to feel more like the Bank contacts homeowners trying to lull them to sleep until a default judgment is rendered against the Homeowner.

It would appear that this is simply another step in the well conceived foreclosure process by the banks.  Convince the Homeowners and the Public in general that everything is the fault of "irresponsible homeowners".  Dual track the process so the embarrassed Homeowner is lead to believe that he/she can quietly fix the problem through a loan modification without going to Court.  Obtain default judgment and deny the loan modification.  I reecntly suggested on a Mandelman Matters comment that an effort should be made to quantify the number of Homeowners who were convinced that they did not have to file a responsive pleading in the Court based upon their communications with the Bank. 

In a number of motions for relief from judgment I have been developing the idea that Ohio Courts already use a balancing test when determining excusable neglect under 60(B)(1), by finding the neglect more excusable based upon the strength of the defense.  The standard for relief from judgment should also be lessened when there is eviednce presented that the Homeowner was contacted by the Bank and encouraged to participate in a loan modification instead of defending the foreclosure action. 

An additional concern is that Banks are using the delay in bringing a property to Sheriff's Sale to their advantage.  Homeowners seem to be given a false sense of security with the knowledge that the Sheriff's Sale may not occur for some time.  The Homeowner believes that they have time to modify the loan.  However, as the time from the decree of foreclosure goes beyond one year, the Homeowner faces a much more difficult task in obtaining relief from judgment.  Several grounds for relief under Civil Rule 60(B) must be raised within one year.  Homeowners repeatedly send in their financial papers, wait 6 weeks for a response, and repeat.  A year goes by pretty quickly waiting for repeated responses.  The loan modification is denied; Sheriff's Sale is approaching rapidly, and the Homeowner has lost several grounds for relief as a result of more than a year passing.

Homeowners need to aggressively defend the Foreclosure Complaint from the beginning.  A concentrated effort needs to be made to advise these Homeowners.

The complaint and summons in Ohio now advise Homeowners of resources available from the Ohio Attorney General's Office.  However, the Homeowner is not cautioned that these groups are not attorneys, cannot represent the Homeowner in Court, and can only assist with the loan modification process.  Dual tracking and the Banks' overall strategy seem to be inadvertently assisted by referring Homeowners to these resources.

Tuesday, February 21, 2012

Reply Brief filed in the Ohio Supreme Court

Today, I filed a reply brief in Ohio Supreme Court Case No.:2011-1362 Federal Home Loan Mortgage Corp. vs. Duane Schwartzwald.  The Ohio Supreme Court certified a conflict and asked the parties to brief the issue:

In a mortgage foreclosure action, the lack of standing or a real party in interest defect can be cured by the assignment of the mortgage prior to judgment.

An amicus brief was filed on behalf of Ohio Homeowners and  You can review the brief by going to the Ohio Supreme Court's website or clicking on the link below 

In the Amicus Brief, I demonstrated that foreclosures require both an interest in the promissory note and an interest in the mortgage, and that the lack of one of these required interests could not be "cured" after the complaint was filed.  Civil Rule 17A has some application, but Civil Rule 17A should not be perverted the way the Foreclosure Plaintiffs attempt to use it.  I made clear and concise points and filed the brief in order to assist the Court.

The reply brief I filed may be found here:

The reply brief is very different.  Essentially I wrote to accuse the Appellee Bank of filing a brief that was intended to distract the Court's attention and avoid addressing the issue.  Appellee Schwartzwald filed a reply brief that addressed the issues and arguments raised by Appellee Bank.  Schwartzwald's brief may be found, here:

I think the reply brief is well written and well argued, but I was left with the feeling that the Bank successfully distracted and avoided the issue.  The Bank's brief spent so much time setting up straw figures and knocking them down that I was left feeling like the scarecrow after the flying monkeys were done.   In the final analysis, the issue that the Court wanted addressed was given two short paragraphs by the Appellee.

This is yet another example of how Banks, their attorneys, and the Main Stream Media have decided that the best way to address the issue is to make as much noise as possible without saying anything.  How many calls have attorneys received from people asking whether they will be helped by the recent National Foreclosure Settlement?  How many Homeowners, currently in various stages of foreclosure, are clinging to the hope that the overtly publicized resolution will actually impact their current situation?

Bottom line is this: There has been no settlement, there is no written agreement, the parties have not agreed, and the Courts have not approved anything.

But the main objective was achieved.  In all that noise, and just for an instant, people took their eyes off the ball.

Tuesday, February 14, 2012

National Mortgage Settlement: The Consumer Relief Framework

The Media has recently released that the Attorney Generals for various States have entered into a settlement with Five Major Banks regarding fraudulent practices.  The final version of the settlement has not been drafted, let alone agreed upon.  In addition, "settlement" at least implies that actual litigation was filed, and as such a Court may have to actually approve the settlement. Following suit with the entire process of mortgage securitization and the foreclosure filings, the Banks consider the Courts and the Legal System only as an afterthought and only when required.

Even though nothing has been finalized, agreed upon, or approved, a number of organizations have already started the rhetoric of "moral hazard" and "irresponsible borrowers".  I have reviewed only the Draft of the Consumer Relief  Framework, but even that reinforced my initial belief that this is another attempt to funnel money to the Banks in the name of assisting Homeowners.  (In prior relief efforts the Federal Government has announced huge sums to assist Homeowners.  Homeowners line up to apply for funds, and for a limited few that meet the eligibility requirements, the Government sends money to the Banks on behalf of the eligible Homeowner, of course.  This time the Government did not even attempt the facade.  The Governement and the Banks will just trade credits.)

Immediately, the Consumer Relief Framework talks in terms of "Servicers".  Anyone who has had an issue with their mortgage should agonize over having to discuss the matter with a servicer.  The Consumer Relief Framework then states:

"Programmatic exceptions to the crediting requirements listed below may be granted by the Monitoring Committee on a case-by-case basis."

The above is quoted not because of any earth-shattering revelation, but simply as an example of language of the agreement.  With langaugae such as the above, it should be simple to see that little if anything will be accomplished for the Homeowner.

The Consumer Relief Framework then talks in terms of "HAMP", "31%", "debt to income levels", and "Loan to Value indices".  HAMP has been a failure, but it will again give the general public the impression that the Government is doing something to help.  The Courthouse Halls will be filled with comments of "I wish I could get my loan modified like that."

How is it that principle reductions, which have been rejected by Ed Demarco and the FHFA as being harmful to the American Taxpayer, are now acceptable?  Suddenly, when the Banks have to come up with cash or credits, a principle reduction makes perfect sense.  Second, the Banks have never pursued deficiency judgments in Ohio.  Instead, the Homeowner receives a 1099 based upon the forgiveness of debt (which the IRS waives base upon a hardship). However, now the Banks can obtain a credit for the potential deficiency that was forgiven.  I believe a majority of the credit set forth in the Consumer Relief Framework will be based upon deficiency judgments that were in past never pursued.  The Banks will now have even less incentive to prevent a foreclosure.  Instead of a loan modification, involving a principle reduction, the Banks will cram through even more foreclosures.  But now in the name of the Consumer Refief Framework the Banks will pursue deficiency judgments in order to get credit towards their settlement.

Wednesday, February 8, 2012

A Brief Explanation of Robo-Signing

I have noticed that the more I argue on behalf of Homeowners facing foreclosure the less it becomes about the law.  I have always tried to be a reasonable attorney when it came to settlement and civil litigation.  I believe that I have developed a reputation as being a reasonable and practical litigator.  However, recently I have been asked by Magistrates,by Judges in Chambers,and by Appellate Panels essentially "does it really matter?"

Rules of Civil Procedure appear to be unimportant; Rules of Evidence are not practical.  A new legal maxim prevails: "When was the last time this person made his mortgage payment?"  I read an interview of a local Judge in an Alumni Newsletter, and his comments provided an insight into his beliefs "people bought more than they could afford."  Where did the judicial system gain this perspective?  Not from some wrongful corrupt or illegal process, but from the constant drip of the information that the Lenders have put out for consumption.  Look at the most recent article making the rounds in the popular periodicals

The article basically argues that Lenders have not done anything wrong.  Robo-signing?; is this a bad thing?  Since most people do not truly understand the concept the word seems to have no moral implication.  Let's face it: if you have a newborn you know all about newborns, a parent of a toddler knows all about toddlers, if your kid plays soccer you know "offsides", a parent of a hockey player knows "icing".  Unless you have been involved in a foreclosure, robo-signing is a foreign word that has no real meaning to you.

Robo-signing: some one with no training or understanding of accounting, lending practices or the law swears under oath and subject to the penalties of perjury that they have personally reviewed the records related to the Homeowner's mortgage and from that personal review they can say that the Plaintiff holds, or owns, or has possession of the promissory note; that the Plaintiff has an interest in the mortgage, that the entire balance of the note has been properly accelerated according to the terms of the note, and when the credits and debits from the last several years have been applied to the Homeowner's account I calculated the amount to be this specific number.  Never mind that I have not looked at any record, have not been sworn, have no personal knowledge of the information contained in this affidavit, and my employer told me to sign so many of these affidavits before lunch.  I also forgot: that is not my name and whatever a notary public is there isn't one watching me sign this document.

But the article was correct: the Homeowner did miss a payment.  Due process; civil procedure, justice, equal protection under the law.... simply bothersome concepts that are clogging the Courts.