Numerous Defenses

I previously wrote and stated that the plan in defending foreclosures was to simply treat a complaint for foreclosure like real litigation.  This may have been misinterpreted as a strategy to drive up litigation costs and thereby force the bank to settle.  This is not a winning strategy.  Who is in a better position to fund litigation than a bank? 

Instead, by defending the foreclosure complaint numerous defenses emerge.  The Lender did not do things properly.  The depositor, the custodian, the Trustee, the Servicer did not do things properly.  The issue is not the same in every case, but every case has some issue.  In addition, the law firms handling the foreclosure complaints are attempting to treat every foreclosure identical in order to process the paperwork as efficiently as possible. 

The Ohio Supreme Court has warned against discussing the particular facts of a case in a public forum, so I will speak only in general terms.  I have successfully prevented Sheriff's Sales from proceeding; received relief from judgment, or I am currently defending foreclosure complaints raising a number of different issues.  Here a just a few examples. The Plaintiff asserted that it held the promissory note at a time when Fannie Mae reported that it owned the mortgage note on its website.  The Plaintiff sought to foreclose on a mortgage that was assigned to it by way of a power of attorney, but the power of attorney was not recorded with the Recorder's office.  The Servicer sent notice of acceleration when the promissory note requires the Lender or the Note Holder to provide notice.  Default judgment was granted after the Plaintiff filed a notice of dismissal.  Mers assigned a mortgage acting solely as a nominee more than a year after the Lender had been dissolved.  In a refiled complaint with a different named Plaintiff, the Plaintiff used the same affiant stating that he had again reviewed business records (were the records the  business records of the first plaintiff or the second plaintiff). 

All of these present major issues for the Plaintiff.  All of these major issues are probably repeated throughout the numerous foreclosures now pending.  The Plaintiffs and their attorneys are ill equipped to handle the many defenses, and therefore the Lenders are willing to resolve the foreclosure complaint on favorable terms.  It is not simply being a thorn; it is not simply driving up litigation costs.  Nor is it something that can be taught in a one day seminar.

Homeowners facing a foreclosure complaint must seek out an attorney with experience in Civil Litigation.

IT'S OFFICIAL

The law office opened space in Boardman, Ohio; we placed an advertisement in the phone book, and new business cards were printed.  The image above is the back of the new business card.  This is really a different avenue for the law office.  Normally, people talk to one another about legal issues they might have encountered.  It comes up in casual conversation.  Referrals occur because people seek out an attorney; ask their friends about an attorney or actually know an attorney. 

With a Homeowner facing foreclosure it is completely different.  Homeowners do not talk about it.  Homeowners are afraid, embarrassed, and at their wits end.  It does not come up in casual conversation.  The last time I checked Mahoning County, Ohio had 796 pending foreclosure cases.  Trumbull County, Ohio had a similar number of pending foreclosures.  If there are so many pending foreclosures, why is it that individuals do not know that their friends, neighbors, and co-workers are facing foreclosure?  In addition, if there are so many pending cases, why are there not more attorneys representing Homeowners?

As a result, it is more difficult to get the information out to Homeowners.  Direct mail is one avenue, but I know that many individuals receiving my letter have already received a number of other letters.  The majority of those other letters are from attorneys who truly believe the only alternative is Bankruptcy.  "If I can fix my situation with my house, I do not need to file bankruptcy" is a comment I have heard on a number of occasions. 

The Ohio Supreme Court and Foreclosures

The Ohio Supreme Court in U.S. Bank NA vs. Duvall Case No. 2011-218 was set to determine the issue of standing, but decided that the case was rendered moot when U.S. Bank released the mortgage lien as paid in full.  A pending case of U.S. Bank NA vs. Perry Ohio Supreme Court Case No. 2011-170 was stayed pending the outcome of Duvall. 

On October 7, 2011, the Ohio Supreme Court continued the briefing in Perry now pending the outcome in Federal Home Loan Mortgage Corp. vs. Duane Schwartzwald Case No. 2011-1362 (the certified conflict) and Case No. 2011-1201 (the discretionary appeal).  The certified conflict asks the parties to brief the following issue:

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

The certified conflict was filed by the homeowner as Appellant.  Accordingly, anyone desiring to submit a brief in support of the Homeowner's position must file a brief pursuant to Supreme Court Rule 6.2(A) within 40 days of the record being filed with the Clerk of Courts.  The record was filed on October 21, 2011.  As such, a brief in support of the Homeowners should be filed on or before November 30, 2011.  (Unless Appellants obtain an extension of time within which to file their brief.)

Sheriff's Sales Stopped to Date

I added a small counter on the top of this site to count the number of Sheriff's sales that were scheduled and then cancelled because of a pleading I filed on behalf of a client.  In a way this is a measure of success and the bigger that number becomes it would appear that we are having more success.  Viewing that number as a measure of success will be short sighted and ultimately demonstrate a lack of success. 

I want homeowners who have a judgment against them and a Sheriff's Sale scheduled to know that there's still hope.  However, I want homeowners facing foreclosure to learn that they must defend the lawsuit and hire an attorney to do so.  The earlier the better.  As soon as a complaint is received the homeowner should be contacting an attorney.  In the early stages legitimate defenses must be met and overcome by the Bank.  After judgment, those same defenses can be avoided by demonstrating a lack of "excusable neglect".  The homeowner is again put on the defensive side of the issue.  Instead of taking charge of the litigation; explaining the many failures of the Bank to follow the rules (rules previously established by the Bank), the homeowner is left hoping the Court will understand their plight.

I am not implying that the Courts or the Judges are less than fair.  But sometimes in a fair game homeowners will lose.  Do everything possible to put yourself in a position to win; i.e keep your house with a manageable payment.  Defend the foreclosure complaint; hire an attorney, and do it early in the process.

Occupy Wall Street and Foreclosures

If you listen to the many voices coming from the Occupy Wall Street crowd, it is difficult to identify the purpose of the protest.  The problem is that the purpose does not fit neatly into a sound bite or onto a button.  What is the overarching theme throughout all of this is that people are challenging the status quo.  A revolution in thinking.  In college they taught that the beginning of the 1900's was a similar revolution in thinking; arts, religion, agriculture, industry.

What does this have to do with Foreclosure Defense?  Up to this point people have blamed the homeowner and the homeowner blamed himself/ herself.  The homeowner truly thought that a loan modification was the Bank's attempt to help.  The homeowner fell behind, couldn't catch up, the Bank had to file foreclosure, but then the Bank came to the rescue with a modification.  People have been accustomed to having the Government solve major issues, and therefore the Government can solve this issue.

Foreclosure Defense and those practicing it should be educating the public that the way to correct the foreclosure problem is to defend the foreclosure complaint.  The Bank has no desire or incentive to work out a reasonable modification.  The homeowner and the lawyers involved cannot understand why the Bank will not work with the homeowner.  If the house goes to Sheriff's Sale the Bank will certainly receive less than what the Bank would recieve if it worked with the homeowner.  Wrong. 

In May of 2011 Ginnie Mae, our Federal Governement, issued $25.4 billion dollars in mortgage backed securities.  The thought process by the Governement is that it must keep putting money into the system to keep liquidity in the market.  The unintended result is that Banks do not have to make good business decisions.  The Government encouraged Banks to make loans without considering a business decision.  Now the Banks do not have to consider business decisions when a mortgage goes into default.  Simply foreclose, purchase the home at Sheriff's Sale and eventually make a claim on the Government guarantee of that loan.  Why wait 30 years to get paid in full when a foreclosure dramatically reduces the time.

The Federal Government will never simply stop the current system, but individuals can dramatically slow down the system by defendning the foreclosure complaint.  The Bank faced with actual litigation is more inclined to make a business decision instead of simply following the same pattern of foreclose, Sheriff's Sale, make a claim against the Federal Guarantee.

Occupy Wall Street is in part an opportunity to inform homeowners facing foreclosure that they have the means to correct the problem without waiting for the Government to correct the problem.

The Plan

I was recently asked to explain my plan for defending foreclosures.  The Plan is really pretty simple.  Treat a foreclosure complaint like real litigation.  Examine the evidence presented; compare the evidence to the applicable law, and formulate a defense. 

There are a number of issues that have been widely discussed such as "robo-signing" or "show me the note".  These issues and many other issues exist in many foreclosure cases.  Each homeowner is an individual; each mortgage note has been handled slightly different; each mortgage has been treated differently.  The Plaintiff is not the same and the allegations are not the same.  So the Plan for the defense is slightly different.  However, the ultimate Plan remains the same: Defend the Foreclosure Complaint.

While this seems like a rather simple approach the Plaintiff in the Foreclosure Complaint is not adequately prepared to litigate every foreclosure.  By making the Plaintiff treat the complaint like real litigation the homeowner can gain some leverage in the negotiations and possibly obtain a loan modification that makes sense.

The Unfortunate Foreclosure Practice

There are a number of defenses available to individuals facing foreclosure.  As individuals have recently contacted my office to defend their foreclosure complaints from the beginning, I am excited to see a number of available defenses.  It feels very satisfying to explain a potential defense and a strategic outcome to the client and sense their relief.  Unfortunately, the majority of the foreclosure defenses with which I have been involved have been severely damaged by the time I became involved.  Legitimate defenses have to be raised in a motion for relief from judgment, or I have to argue on appeal that available defenses were asserted and overlooked by the trial court,

If a homeowner aggressively defends the foreclosure complaint from the begining, the outcome is more likely to be satisfactory for the homeowner,