Consumer Debt Defense-

There has been a significant increase in the number of consumer credit litigation in Ohio.  Are you being sued by LVNV Funding, LLC; Capital One, CitiBank, or Discover.  Many consumers have turned to debt relief organizations.  These organizations attempt to negotiate a settlement with your creditors.  If they are unsuccessful in negotiating a settlement, then it is likely that you will have a lawsuit to defend.

Most consumers believe that they have very few defenses.  However, R.C> 1343.03 places a limit on the rate of interest that the credit card companies can charge.  The credit card companies will assert that by using the credit card and retaining the benefits of the credit card, the consumer has become obligated to perform pursuant to the credit card agreement.  However, Ohio has a maximum rate of interest that can be charged in the absence of a written contract signed by the consumer.  The consumer must execute a written agreement in which the consumer agrees to pay interest in excess of the statutory maximum rate.  The consumer must also execute a written agreement in which the consumer agrees to pay compounded interest.

The longer that you have had the credit card account and the more payments that  yoou have made on the account, the more likely that your account balance has been improperly calculated.

Do not allow yourself to agree to unreasonable repayment terms.  More importantly,  do not allow a default judgment to be rendered against you.

If you have been sued by your credit card company there is a good chance that your accouunt balance has been miscalculated and you can save thousands on the balance due.

I moved my office

My wife and I moved to Waterford, Ohio.  We live on the Muskingum River just North of Lock No. 5 known as Lock No. 5.  We have three dogs and our backyard ends in the Muskingum River, with a deck off the backyard that extends out over the bank.  You cannot get to the water from the deck but you can sit and watch the river.  Down the bank there is a dock on the water.

I still travel and practice in many of the Counties of Ohio in the Eastern half of the State.  Since moving to Waterford, Ohio I am trying to concentrate on serving the South Central and Southeastern Counties of the State.  I am looking for clients in Athens, Fairfield, Hocking, Licking, Morgan, Noble, Perry, and Washington counties.

Law Office of Bruce M. Broyles 752 Luke Chute Road, Waterford Ohio 45786 

(330) 259-6073

bruce@brucebroyleslaw.com+

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. 5^th 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.  

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 brucec@brucebroyleslaw.com; and my website is still located at brucebroyleslaw.com.

MY OFFICE IS MOVING

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.

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. 8^th 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 & 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.

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.

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. 8^th 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.

CLIENT RECEIVES HELP FROM EXPERT WITNESS

I previously represented a client in a foreclosure case.  The client decided he no longer wanted to contest his foreclosure, and asked me to cease any further efforts.  Recently, the client contacted my office stating that he had a federal criminal matter in which the potential sentence was being greatly increased due to the Lender significantly increasing the amount it allegedly lost on a mortgage it foreclosed upon.  Through Attorney Jeff Barnes' network of attorneys and experts I was able to put my client in contact with Richard Kahn of FPG-USA.  Mr. Kahn worked on my client's report while away from his office on a previously scheduled trip; had the report to my client's criminal defense attorneys, and Mr. Kahn's report made a dramatic change in the outcome of the sentence.
See, the testimonial at the link below.

 http://www.fpg-usa.com

http://www.fpg-usa.com/#!testimonials/c1yws

Evidence of Ratification

The New York law of Trusts states expressly that transactions in violation of the Trust governing documents are void.  Most Courts do not analyze the  the trust documents and simply say that the mortgagor is not a party tovthe PSA and therefore cannot enforce the terms of the PSA.  Those Courts that do lookvfurther into the issue, eventually say that the beneficiaries can ratify the conduct of the Trustee and therefore the failure to comply with yhe PSA renders the transactions merely voidable.  However if one reads the PSA the PSA expressly prohibits the trust from taking any action that would render the trust subject to a tax or invalidate the REMiC.  As such yhe beneficiaries can not ratify these acts or transactions.  In yhe alternative,  shouldn't the Platiff trust be required ro demonstrate thst the beneficiaries actually ratified the act or transaction.

Rolling Stones Article on JPMorgan Chase

http://www.rollingstone.com/politics/news/the-9-billion-witness-20141106 I normally do not repost articles, but the above article gives some in depth information about the information that JPMorgan Chase's management was telling Congress. While the article has little to do with Homeowners Facing Foreclosure, it does demonstrate the depth to which Lenders will go to seek profits. JPMorgan Chase's management was also before a Congressional hearing discussing loan modifications and the moral hazard of principle reductions. First, how "moral" does this guy appear now? Second, the "principle" that would have been reduced is simply recapitalized late fees, interest, legal fees, inspection fees, forced placed insurance fees. Suddenly, the "moral" hazard disappeared when JPMorgan Chase could use these accounting gimmics of "consumer assistance" to obtain huge credits towards the fines that were imposed.

Home Owners Facing Foreclosure do not be discouraged by Bank of America vs. Kuchta

Again I have not read the entire opinion of Bank of America vs. Kuchta. My first blush gut reaction was to be somewhat discouraged, but this decision does not in any way signal the end of Home Owners Facing Foreclosure's ability to defend the action. It should signal thosecin litigation to seek professional assistance early. In many of the recent appellate decisions, the Courts are paying closercattntion to the finer points. Was the affidavit proper? Did the lender comply with the conditions precedent? In addition, I have noticed more Homeowners receiving better loan modifications regardless of the stage of the litigation. In addition, new guidelines regarding the prevention of a sale or proceeding to judgment while a loan modification is pending are being given more weight, at least by the Lenders. TrialmCourts were less almost hostile to a stay as a result of HAMP. The Magistrates would comment that HAMP only had guidelines bug no Federal Regulations. Being able to point to new fede regulations appears to have cauht the attention of the trial courts. do not be discouraged by the Kuchta decision. Yes, the financial industry will not be toppled by the gridlock causedby void foreclosures. Therecwill be no rrevolution. However, courts are beginning tk treat foreclosures as something more than a nuisance clogging the docket. In addition, banks are apparently growing weary of the fight. Banks are more apt to modify a loan than to draw an unreasonable line in the sand.

Ohio Supreme Court Issues Decision in Bank of America vs. Kuchta

I only recently received a copy of the slip opinion in Bank of America vs. Kuchta 2014-OHIO-4275, so I do not intend this to be an in depth analysis of the decision or its ramifications. I am writing to tell all Home Owners Facing Foreclosure that this decision will limit what an attorney can do for you after judgment has been rendered. Prior to the decision there was at least an issue as to whether a motion for relief judgment under Civil Rule 60(B) could be used to argue that the plaintiff lacked standing. In fact, prior to the decision, an argument could be made that a common law motion to vacate a void judgment could be made well after the judgment was rendered. The arguments centered upon whether the lack of standing resulted in a void judgment or merely a voidable judgment. At a glance, the decision appears to render lack of standing to be nothing more than a defense which must be asserted or it is waived. Again, I stated that I had not read the decision, so I do not want to try to analyze it here. However, this should be a WARNING to all Home Owners Facing Foreclosure, if you attempt to defend the foreclosure on your own an attorney attempting to asist you after judgment will be limited. Standing can only be challenged by a direct appeal. On appeal the attorney will be limited to the arguments and the evidence that were before the trial court. While there are still arguments available pursuant to Civil Rule 60(B), standing is no longer one of those arguments. In addition, many homeowners do not seek out an attorney until the Notice of Sheriff's Sale arrives. Plaintiffs are required to provide notice of Sheriff's Sale only a short period of time before the Sheriff's Sale. Plaintiff's have been delaying their request for an order of sale, and as a result, by the time many Home Owners Facing Foreclosure seek out the assistance of an attorney many of the grounds for relief under Civil Rule 60(B) are no longer available. Grounds under Civil Rule 60(B)(1)-(3) must be asserted within a reasonable period of time, and not beyond one year after judgment. As I have consistently stated, Home Owners Facing Foreclosure need to retain counsel early and defend the foreclosure in order to level the playing field in the loan modification process.

Foreclosures Measures Near Pre-Crisis Levels/ Another Attack on Homeowners Facing Foreclosures

Browsing the internet I came across a story from Market Watch that stated essentially levels of foreclosures have returned to "near pre-crisis levels". Below is the link to the story, which includes a graph that creates a new statistic "completed foreclosures per mortgage". I believe this graph is deceptive.

First, the writer picks 2005 and declares that this is the pre-crisis numbers. This is sort of like saying gas prices have gone down, as long as no one remembers when gas was less than $2.00/ gallon. Second, the writer uses "completed foreclosures" to gauge the decline in Homeowners Facing Foreclosure. Who decides when a foreclosure is completed. Is it when the decree of foreclosure is filed, when the Sheriff Sale takes place, when the Sale is confirmed. If the writer chooses confirmed Sheriff Sales, then "completed foreclosures" becomes a relatively small number.

I went to the Ohio Supreme Court website and pulled the statistical reports for the Courts of Ohio. If you characterize 2005, as the writer did, "Pre-Crisis" the number of foreclosures that were filed in the State of Ohio was 63,996. The graph demonstrates that the height of the crisis was 2010. In Ohio, there were 85,483 new foreclosure complaints filed. In 2009, there were 89,053 new foreclosure complaints filed. The statistical reports for 2013 and 2014 are not available from the Ohio Supreme Court at this time. The graph has the numbers in 2012 demonstrating a significant decline and close to the "pre-crisis" 2005 numbers. In 2012, there were 70,469 new foreclosure filings. The writer of the Market Watch article could say in Ohio we are approaching the "Pre-crisis" numbers of 2005; or there has been a decline from the height of the crisis. However, what the numbers really show is that there were 70,469 homeowners who were far enough behind in their mortgage payments that the Bank resorted to foreclosure. This does not include those still struggling to keep current, or those who are behind but only 1 or 2 months behind. If you look at the new foreclosures filed in 1999, 31,229 foreclosure complaints were filed. I believe that 1999 would be a better year to consider as "pre-crisis" but the available reports on-line do not go back any further. In 2012, the number of new foreclosure cases was still nearly double the number of foreclosures in 1999.

My analysis of the numbers really provides no better gauge than the Market Watch article. Especially, if you have stumbled upon this article in search for assistance in defending a foreclosure. The purpose of my writing is to again explain to the Homeowner Facing Foreclosure that the Banks and National media are working against you to make you feel alone and hopeless. The Market Watch article is intended to keep the Homeowner Facing Foreclosure from seeking help, from fighting. Things are better for everyone but you. Even the recent stories of Homeowners prevailing against their lenders are clouded with bad news. The story was not about victories, but about secret non-disclosure agreements and how homeowners can be harmed in the future. The stories should be simple, those who fight usually get help. Those who fight usually end up with a reasonable monthly mortgage payment. Do not be misguided by the National Media, you are winning the battle and Banks are starting to offer reasonable deals for those who are willing to fight. http://blogs.marketwatch.com/capitolreport/2014/05/29/five-states-make-up-nearly-half-of-u-s-foreclosures-corelogic/

Wednesday, May 28, 2014

Single Point of Contact

Recent changes to the Federal Guidelines have imposed new protections for consumers dealing with the companies that allegedly own and service their mortgages. These new regulations require the Lender or the Servicer to provide a single point of contact. The purpose is to prevent the Homeowner from being switched and transferred from numerous representatives while trying to seek assistance with their loans.

I am an attorney. I represent a number of homeowners facing foreclosure. I deal with Lenders and Servicers on a regular basis. The frustration each Homeowner going through this process is not an individual occurrence, coincidence, the result of the sheer volume of cases. In my opinion, it is purposesful and calculated to cause as many homeowners to be overwhelmed and frustrated and eventually walk away from their home.

Here, is a short list of the issues caused by Lenders and Servicers that I have encountered repeatedly:

1. You must be at least 3 months behind in your payments before we can assist you with a modification;

2. Your financial documents are out of date;

3. We did not recieve your loan modification application;

4. You did not qualify for HAMP;

5. Your trial payments must be in certified funds;

6. Your trial payments were not received on time;

7. You do not need to answer the complaint as the modification will resolve the issues;

8. You do not need an attorney as the modification will resolve everything;

9. You do not need to attend the default hearing as we are working on a loan modification.

Now the Lenders and Servicers are attempting over burden attorneys and frustrate attorneys representing Homeowners facing foreclosure by providing a single point of contact listing only the property address. If you call the single point of contact with the property address they are not allowed to give out any information unless you know the name of the Homeowner. (The reason I was calling was to find out the name of teh Homeowner.). All I need to know is which file to put the letter in. I already have a single point of contact; opposing counsel.

Well the strategy worked. I was frustrated long enough to post these comments. However, I am not ready to walk away from any of the Homeowners. The point of my writing is to again encourage Homeowners to continue to fight. Do not allow Lenders and Servicers to frustrate you until you give up. This is also another reason why Homeowners should contact an attorney. I cannot understand why Homeowners attempt to defend the biggest asset they will most likely ever purchase on their own. Not only is this a complicated area of law, litigation itself can be complicated. At a minimum you need an attorney who is well versed in litigation. An attorney who is familar with many of the defenses and issues involved in foreclosure may be more helpful, but the point is that you must defend the foreclosure. You must be prepared to file an appeal if you lose at the trial court level. It has been my experience that the more you are willing to fight, the more likely the Lender will eventually work with you to reach an outcome that is beneficial.

Sunday, May 18, 2014

God does not have tenure

In law school they told us that they were going to train us to think like lawyers.  While in law school they reminded us of many great philosophers who had stated that you could never have too many people trained in the law.  Once we left law school and joined private practice ethical considerations told us that we should  not take advantage of those untrained in the law.  When Courts interact with lay persons the Court will often describe the language of lawyers as legalese.   To recap;we are being trained to think in a noble profession but once we are educated we are apparently too well educated to speak in plain English for the common person to understand it.

As a result we end up in highly academic discussions regarding void versus voidable; jurisdiction over the person, subject matter jurisdiction, and original jurisdiction.  Combining these concepts we end up with academic discusions relating to whether a void judgment, which is a nullity and "of no force and effect", but cannot be challenged after an appeal  as the trial court has been divested of jurisdiction.

Scholarly trained professionals with contempt for common persons having intellectual discussions about complex issues without any regard for the everyday lives that foreclosures rip apart.  This is what it feels like we have become.  Then you start asking how did we become this.

 At a continuing legal education seminar the answer was given.  A panel of four highly esteemed professors were discussing the value of understanding the original intent of those who wrote the Constitution.   They all agreed that whatever value derived from the original intent given by the interpretor, the original intent could be derived from other contemporary writings.  Those who wrote the Declaration of Independence also wrote the Constitution, as well as, letters and speeches and sermons for and against the ratification of the Constitution.   The esteemed professors had various opininions as to the manner of determining the original intent and the importance to place on the original intent. After giving their presentations on the way to practice Constitutional Law, the emphasis to be placed on the original intent,  and how to determine the original intent, they opened the floor for questions.  I asked: are you are of the concept that the Declaration of Independence was a prayer, and did you consider the concept in your analysis of original intent.  Two of the esteemed professors ignored me like I was an an uneducated lay person who had no concept of what we were discussing being that of legalese and such.  One professor  stated that he has aware of the concept but had rejected it in his analysis.   The remaining professor asked me what I meant by prayer.  Without a great deal of thought I neverously stated a solemn personal discussion with the Creator of the Universe, God.  He responded that the founding fathers were certainly not speaking to a single all powerful being.  At most the use of the word creator would refer to nature or the spirit of the trees..  NO THEY WERE NOT PRAYING TO GOD!!
We have entrusted these four men with the training of our future lawyers.  Future lawyers are being told that the Declaration of Independence and the Constitution were in no way interested in God.  Not only is this shameful, but it also explains how plainly understood concepts are contorted  to reach intended results for specific clients without any thought of what is right, fair or required.  Instead we have legally trained advocates attempting to win each issue at all costs regardless of what might happen to the greater good.

Thursday, January 30, 2014

The Assault on Homeowners Continues

     Many Homeowners facing foreclosure sit in silence waiting for the Sheriff to someday knock on their door. Others leave their home when the foreclosure complaint is served upon them. These individuals think that there is no hope; they blame themselves, and assume there is nothing that can be done.

     Other Homeowners facing foreclosure contact the various help lines that are plastered on billboards throughout the State. Every now and then I will call the telephone number. I usually get an automated answering service which after a number of prompts disconnects the telephone call. Many of these individuals eventually end up with an agency willing to help the Homeowner complete a loan modification application. These Homeowners are usually asked to complete or update the application so many times that they eventually give up, or the process takes so long that it is impossible to modify the loan.

     Another group of Homeowners Facing Foreclosure turn to the internet. There are a number of helpful websites, all of which warn the Homeowner to hire competent counsel. Unfortunately, for every helpful website, there are numerous other websites that are simply not helpful. These websites direct the Homeowner to contact out of State Attorneys; tell the Homeowner how they can obtain free and clear title to their home in six easy steps using a Qualified Written Request (QWR); explain numerous defenses to the Homeowner related to the securization process, the credit swap payments, table funding, or a host of other issues surrounding the loan. These less than helpful websites arm the Homeowner with just enough information to allow the Homeowner to confidently walk into Court; lose the case and their house on a procedural or evidencial issue, and then declare that the system is a fraud.

     Now, Homeowners are being told that Attorneys that represent Foreclosure Defendants are really just "Pretender Defenders". Homeowners are told that these attorneys merely delay the inevitable while bilking all the Homeowners' money in fees. Instead, the Homeowner should purchase a Securitization Audit or a Mortgage Calculation Audit/Review. Armed with these "weapons" the Homeowner should find a "personal injury attorney" who is prepared to negotiate a settlement on behalf of the Homeowners. These websites have gone as far as to disparage the name of Attorneys who have won significant cases for Homeowners Facing Foreclosure.

    There are many good attorneys in Ohio who are Defending Foreclosures and obtaining Good results for their clients. Homeowners need to retain a competent attorney early in the process, at or before the foreclosure complaint is served. Instead, Homeowners are doing everything but contacting a competent attorney. When the Notice of Sheriff Sale arrives, then Homowners seek counsel. By this time many of their rights have been severely damaged if not lost.

Monday, January 20, 2014

The Courts Handling of Schwartzwald Should be a Wake Up call to Homeowners

The manner in which the Courts of Ohio have applied and interpreted Schwartzwald should be a wake up call to Ohio Homeowners. On October 31, 2012, the Ohio Supreme Court examineed the constitutional grant of jurisdiction of the Common Pleas Courts in Article IV Section 4(B), and determined that if a party lacked standing at the time the complaiunt was filed then the Court of Common Pleas "lacked jurisdiction". In Schwartzwald, the Ohio Supreme Court then stated that this lack of "jurisdiction" could be raised at anytime. The use of terms such as "jurisidiction" and "raised at anytime" lead attorneys representing Homeowners facing foreclosure to assert that a judgment was void if the Plaintiff lacked standing at the time the complaint was filed. The Schwartzwald issue arises in three situations: on direct appeal, in a motion for relief from judgment, and in a motion to vacate. On direct appeal the issue is simply whether the Plaintiff had standing. In a motion for relief from judgment, the Courts have to determine that the lack of standing renders a judgment voidable, and then the Court has to determien whether the three pronged test of Civil Rule 60(B) was met. In a motion to vacate, the Court must determine if the judgment is void. On direct appeal, a homeowner has to have defended the action and raised the issue in the trial court. In addition, the homeowner had to file an appeal within 30 days from the date of judgment. It seems as though the the Courts are willing to apply Schwartzwald in those cases where the Homeowner has diligently defended the action. In a motion for relief from judgment, the Homeowner has to demonstrate that he has a meritorious defense (lack of standing); that he has grounds under Civil Rule 60(B) for relief, and that the motion was filed within a reasonable period of time (not to exceed one year in most instances). A motion for relief is usually filed after the time to appeal has expired and the argument is essentially that the matter was not or could not be raised prior to judgment. A review of the cases demonstrates that trial courts are more likely to find "excusable neglect" when the motion for relief from judgment is filed fairly quickly after the judgment was filed. In a motion to vacate, the Courts have to find that the judgment is void and can be raised at anytime. In these cases, the Courts of Ohio have often ignored the actual language of Schwartzwald and instead found that the Ohio Supreme Court did not mean :jurisdiction" or that there is an additional type of jurisdiction that does not result in a void judgment. In the context of a motion to vacate a void judgment the Homeowner is much more likely to have his lack of action to be held against him. Homeowners should take notice that the Courts are less likely to assist Homeowners the more time that elapses. In addition, I am of the opinion that the Plaintiffs know that Homeowners are more likely to seek legal advice immediately before the Sheriff's sale, and therefore Plaintiffs will wait until a year has almost elapsed before filing the paper work necessary to initiate a Sheriff's Sale. More than a year will have expired since the judgment was filed and now the Court must find that the judgment was void. At this point the Court will begin to discuss the effect that such a determination would open up the "floodgates" or otherwise disrupt the real estate markets. The Courts will also start to focus more of their attention to be critical of the Homeowner's lack of action. Ohio Homeowners have valid defenses based upon Schwartzwald, but the Courts will not suffer or reward the Homeowner's delay. There are many competent attorneys doing good work for Ohio Homeowners, but their efforts are being greatly hampered by the Homwoners' delay. Ohio Homeowners must immediately seek legal advice when facing a foreclosure complaint

Tuesday, October 8, 2013

WEBSITE AND CONTACT

I write this blog in an attempt to be helpful and to encourgae homeowners facing foreclosure to seek legal counsel.  I recently realized that this blog has not been very helpful in allowing homeowners to contact my office.  The website for the Law Office of Bruce M. Broyles has recently been updated to allow individuals to quickly and easily contact my office by submitting an e-mail. 

Please visit my website at brucebroyleslaw.com and see the new contact form.

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Bruce M. Broyles

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