Tuesday, January 21, 2014


What About All Those Cases Where Foreclosure Was Dismissed?

As I predicted in 2009, the number of cases where foreclosure had been simply dismissed without further action has increased exponentially. The homeowner is normally afraid to take any proactive stance for fear of awakening the giant who will then respond by filing another foreclosure. Some of these cases are as much as 10 years old which goes beyond the statute of limitations in virtually all jurisdictions. As a caveat, let me add that there are states in which the statute of limitations is “ongoing” which means that the entire action is not barred by the statute of limitations; instead, in states where this doctrine is applicable, each new payment due gives rise to a new Period where the statute of limitations begins to run.
The number of inquiries I am receiving based on this scenario has been steadily increasing for the last year. At this point I would say it is accurate to say that I am receiving inquiries at the rate of 3 to 5 per day involving cases in which foreclosure has gone into a state of “limbo”. In most cases the time between the disappearance of the pretender lender at the present time has been a period of years.
There are several strategies that might be applicable and you should contact a licensed attorney who is practicing in the area in which your property is located before you make any decision about taking action or not taking action.
The first strategy which is being followed by most people at this time is doing absolutely nothing. These are people who’ve been living without paying rent or mortgage payments and who hopefully have been wise enough to pay the taxes and insurance. If they haven’t paid the taxes they could lose the home as a result of the tax lien. There most likely entitled to relief under some cause of action like nullification of instrument or a lawsuit to quiet title and may be entitled to damages under various statutes or common law doctrines. In judicial states where the action has been dismissed, most lawyers agree that the dismissal of the action should be recorded in the county records that keep track of transactions involving property.
Another strategy which is being followed by an increasing number of people is a lawsuit to quiet title and nullify the mortgage. The lawsuits to quiet title are getting more traction than any efforts to nullify the mortgage. This is because the homeowner cannot identify whether there is an actual creditor and who that creditor might be. But that is what constructive service of process is all about. You publish the notice in a legal newspaper to let the world know that there is a pending action in which anyone who is claiming a right property, directly or indirectly, or claiming a right under the mortgage or note, might be negatively affected by the outcome of the litigation. If the judge accepts that there is a good possibility that in the absence of anybody coming into court to defend the action a default will be entered along with a final judgment.
I know several hundred cases in which such final judgments have been entered resulting in the elimination of the mortgage and note completely.  Frankly I think most of the cases should be resolved by elimination of the mortgage and potentially avoid the note as an instrument upon which party could rely enforce the collection of a debt.  That would still theoretically leave a debt owed by the borrower to an unknown creditor.
Some interesting questions arise when servicer’s case against the borrower has been dismissed by the creditor has not been informed. The argument would be that the servicer as an agent of the creditor has notice and therefore his principal has notice. This would only be true if the servicer was operating under the provisions of the pooling and servicing agreement. But the provisions of the pooling and servicing agreement would not apply unless the trust was the  creditor. if the investors realize that their interest in the loan arises not because of their purchase of bogus mortgage bonds but rather because their money was used directly to fund the origination or acquisition of loans, then the servicer has no written agreement upon which you can rely for its power to enforce collection of the debt, the note or the mortgage.
There are several other strategies that are in use right now which I do not wish to elaborate upon. I suspect that they may be successful only because they are not on the radar for the banks or the attorneys for the banks. So I don’t want to do anything that might impair the ability of some borrower out there to get the relief that he deserves.
In all cases the homeowner should obtain a full title and securitization report. This can be obtained from us or any number of other reputable vendors. If you are purchasing or selling a home or attempting to refinance it probably should take extra steps to assure that there are no defects in the chain of title and especially no defects in connection with the satisfaction or release of the existing mortgage. In all probabilities those defects exist. I have been receiving an increasing number of inquiries from people who wish to purchase a home but after reading what is available on the Internet have realized that they might not get clear title. Thus they come to us to review the transaction and give our opinions as to what defects might exist and what to do about them.
For information about our services please call 520-405-1688

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Sunday, January 19, 2014


Kansas Homeowners to Receive Relief Under Ocwen Mortgage Settlement

(Source: Attorney General Derek Schmidt) – More Kansas homeowners will receive relief after a settlement with mortgage servicer Ocwen Financial Corporation, Kansas Attorney General Derek Schmidt announced on December 19.

“We continue to seek help for Kansas homeowners harmed by improper conduct during the financial crisis,” Schmidt said. “This settlement is the latest in our ongoing efforts to protect Kansas consumers.”
The settlement terms address servicing misconduct by Ocwen and by two companies later acquired by Ocwen: Homeward Residential Inc. and Litton Home Servicing LP. Ocwen specializes in servicing high-risk mortgage loans. According to a complaint filed in the U.S. District Court for the District of Columbia, the misconduct resulted in premature and unauthorized foreclosures, violations of homeowners’ rights and protections, and the use of false and deceptive documents and affidavits, including “robo-signing.”
Ocwen, the nation’s fourth-largest mortgage servicer, settled the allegations with Kansas, 48 other states, the District of Columbia and the federal government.

In Kansas, more than 900 homeowners who were foreclosed upon by Ocwen will be eligible for cash payments. Additional consumers may be eligible for principal reductions. Compliance with the settlement will be overseen by the National Mortgage Settlement monitor Joseph A. Smith, Jr. Consumers who are eligible for the cash payments will be contacted by the settlement administrator but may also contact Ocwen directly for more information. Current borrowers whose loans are serviced by Ocwen should call 1-800-337-6695 or email ConsumerRelief@Ocwen.com.

More information on this settlement and the National Mortgage Settlement is available on the Attorney General’s Consumer Protection website at www.InYourCornerKansas.org.

Source: Attorney General Derek Schmidt

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Thursday, January 16, 2014



Pro se legal representation refers to the instance of a person representing himself or herself without a lawyer in a court proceeding, whether as a defendant or a plaintiff and whether the matter is civil or criminal. Pro se is a Latin phrase meaning "for oneself". This status is sometimes known as propria persona (abbreviated to "pro per").

Florida is a judicial state when it comes to foreclosure. That means your lender has to sue you in court in order to foreclose on your property. In a non-judicial state such as Georgia, the mortgage document contains a "power of sale clause". The clause gives the lender preauthorization to sell your property without a court order.  If you've just been served a foreclosure summons, do not panic. Your worst mistake would be to ignore it. If you do not respond to the complaint, you've given an easy victory to the mortgage company. Usually you have 20 to 30 days to respond; if you do not respond, a default judgment will be entered against you, and eventually you will lose your house..

Florida is a judicial state when it comes to foreclosure. That means your lender has to sue you in court in order to foreclose on your property. In a non-judicial state such as Georgia, the mortgage document contains a "power of sale clause". The clause gives the lender pre-authorization to sell your property without a court order.  If you've just been served a foreclosure summons, do not panic. Your worst mistake would be to ignore it. If you do not respond to the complaint, you've given an easy victory to the mortgage company. Usually you have 20 to 30 days to respond; if you do not respond, a default judgment will be entered against you, and eventually you will lose your house.

You must file an answer or a motion to dismiss within that time frame. Most people are intimidated by the judicial system. If you can overcome your initial fear, you will be immensely rewarded regardless of whether you win or loose. You must be prepared to leave behind the idea that a) the law is about justice b) that all attorneys are honest and follow the law c) that judges must take the side of justice. U.S judicial system is based on an adversarial contest between the plaintiff and the defendant. The judge has to be impartial to both parties. If the plaintiff cheats and lies in court, don’t expect the judge to intervene. It is the responsibility of the defendant to raise the issue. For that reason, you must be vigilant at all time and never trust the authenticity of anything the plaintiff attorney presents. Your weapons are statutory lawscase laws and the rules of civil procedure. Rules of civil procedure dictate the manner in which the lawsuit must proceed. Like in any game, the opposing party will try to bend the rules and cheat. Knowing the rules of civil procedure is crucial to your success. If you don't master the rules of civil procedure, your opponent will cheat without you being able to challenge the foul play. You can obtain a copy of the rules of civil procedure in your state for free. Nolo's book on self-representation should be read by every pro se. Chapter 8 and 9 are particularily important to learn.
To buy time, you can file a Motion for Enlargement of Time or a Motion to Dismiss. You can ask for 20 extra days to file your answer. Sample pleadings are available on the Pleading section of this web site.
Call your county courthouse and get the contact info of the judge assigned to your case. Write down the name and address of the Judicial Assistance for the judge and the clerk office. Some courts allow you to file by mail; you can also go directly to the courthouse to have your documents filed. A copy of each filing must be sent to the plaintiff attorney and in some cases the judge requires a courtesy copy sent to his office. Call the judicial assistance for more information.

Anatomy of A Foreclosure Complaint

You've been served a foreclosure summons. That means the bank is suing you to get the property that secured your loan. With the summons, you will find the complaint detailing what you're being sued for.
The foreclosure complaint is made of several parts.
  1. Style of the case: this is the section that list the plaintiffs and the defendants. For example  "BANKSTER BANK VS JOHN SMITH";
  2. The case number;
  3. The title;
  4. An introductory  paragraph;
  5. Numbered paragraphs;
  6. Demand for relief;
  7. Certificate of service;
  8. A signature block.

Live Cycle of a Foreclosure Lawsuit

Most foreclosure lawsuits follow similar pattern. This pattern is comprised of several stages:
  1. Pre-answer stage: At this stage, the defendant files several motions to dismiss before filing his/her answer. The pending motions to dismiss toll the time to answer the complaint. This technique can delay the foreclosure process for several months.
  2. Post-answer Stage: Once all the motions to dismiss have been heard and ruled upon, the defendant will be ordered to file an answer. Once an answer is filed, the plaintiff will most likely move for a summary judgment. A good defendant will vigorously oppose the summary judgment motion. The motion will most likely be denied or overturned on appeal. Once the plaintiff responds to defendant answer, the case is technically at issue. Sometime plaintiff will send a notice to the court declaring that the case is at issue; at that point the court can schedule a trial at anytime. According to Florida Rule of Civil Procedure 1.440, a case is at issue after any motions directed to the last pleading served have been disposed of.
  3. Discovery Battle Stage: At this point, each party will try to build their case with discovery. This is a time consuming process and emotionally exhausting. It is a battle of contrition. The defendant must be patient and persistent.
  4. Settlement Stage: There are two ways the lawsuit will be resolved. Either the parties settle, or the matter go to trial. The defendant should never negotiate in a position of weakness. Let the plaintiff make an offer. Defendant should always be ready to go to trial and prepare for appeal. The way to prepare for appeal is to make timely objections, obtain a ruling on the objections and always have a court reporter present at each hearing and trial.

Foreclosure Defense Road Map For Judicial States

1) You’re at least three months late on your mortgage payment.
2) The servicer or “lender” sends you a Notice of Default
3) Send a Qualified Written Request to the loan servicer. They have twenty days to acknowledge receipt of your request; then they have sixty days to provide the information demanded.
4) You receive a foreclosure complaint. You have 20 to 30 days to file a response to the complaint. Check the document for exact deadline. Failure to timely respond to the complaint will result in a default being entered against you. In a sense, you’ve given an easy victory to the plaintiff.
5) If the plaintiff is a trust, a defunct bank, or a bank not registered in your state, file a “Motion to Dismiss For Lack of Capacity”.
6) If the plaintiff is an entity from another state and did not post a cost bond, file a “Notice of Failure of Plaintiff to Post Non-residential Cost Bond”. After twenty days if plaintiff has not posted the cost bond, file a “Motion to Dismiss For Failure to Post Cost Bond”. Schedule a hearing and bring a court reporter to the hearing.
7) If there is no assignment from the original lender to the current plaintiff, file a “Motion to Dismiss For Lack of Standing”.
8) If plaintiff files an “Affidavit of Amount Due and Owed”, file a “Motion To Strike Affidavit of Amount Owed”.
9) If plaintiff files a Motion for Summary Judgment, file an “Affidavit Opposing Summary Judgment”.
10) Send your interrogatories. If plaintiff does not answer the interrogatories in a timely manner, file a “Motion to Compel” and schedule a hearing. Make sure to bring a court reporter.
11) File your answer, affirmative defenses and counter-claims if necessary.
12) Request for production of documents.
13) Schedule deposition to depose affiants.
Understanding the rule that the court of appeal uses to determine the merit of a case is very instructional. Watching appellate court oral arguments videos will increase your knowledge of the process and help you properly preserve the record for appeal.

The Power of Affidavits in a Lawsuit

An affidavit is a written statement confirmed by oath or affirmation, for use as evidence in court. It allows one party to make out of court statements without being challenged. The real danger of affidavits arises when the opposing party ignore it or fail to challenge it with an opposing affidavit. Unfortunately, most pro se litigants don't understand the rule and fail to challenge an affidavit.
An unchallenged affidavit has more power than any non-sworn document or argument a party may file. So, when the bank schedules a summary judgment hearing, it is likely to win when the homeowner does not object to its affidavits. The judge is pretty much limited as to whether to grant the summary judgment (SJ) or not. All the legal elements for summary judgment are present.
The homeowner will argue with the judge without realizing that he/she has not put a strong legal defense against the SJ.
The most common affidavits filed by the pretender lenders (PL) in a foreclosure are:
  • Affidavit of Amount Due & Owing
  • Affidavit of Attorney's Fees & Cost
  • Affidavit of Reasonable Attorney Fees
 Every single one of these affidavits must be objected to as soon as they are filed. You also have the right to depose the affiants of any affidavit filed with the court.
A homeowner can also use affidavits to his advantage. For instance if the homeowner has personal knowledge of a matter, he can file an affidavit with the court. The pretender lender will have hard time effectively challenging his affidavit because they will have to counter it with statements from someone at the company who has personal knowledge of the case; which is a heavy burden for pretender lenders.

How to Find a Competent Foreclosure Attorney

If you can afford an attorney, it is advisable to hire one to defend your foreclosure. The big “if” of course is affordability. Having said that, we should keep in mind that all attorneys are not created equal. An incompetent attorney can cost you money and your case; there are enough of them to be wary. Here is some advice in finding a good foreclosure attorney.
Once the initial foreclosure complaint is filed by the plaintiff, your name and address will become public record and will be available for mass mailing. You will certainly receive numerous solicitations from local attorneys. Armed with the solicitation letters, go to your county clerk web site and do a party search on some of the attorneys on your list. Some counties’ system allows you to do searches by parties; some systems do have that functionality. Once you’re able to pull a list of cases with the attorney as a defense counsel, check the docket entries. Has the attorney been fighting vigorously for his/her clients?
By reviewing a few cases, you can determine how good an attorney is.
Has he files any pre-answer motions?
Has he filed any affirmative defenses and counter –claims?
Was he persistent in his discovery method?
What is his win/lose ratio?
If you want more information beyond dockets review, go to the court house and request to see the files you’re interested in. Read the pleadings filed by the attorney. You can even make copies to take home. Once you feel comfortable with an attorney’s competence, then you should make the jump. There is no guaranty, but at least you made an educated guess.
If you still need a lawyer who "gets it" in Florida, feel free to contact me for reference.

Get Organized

As a pro se defendant, you can easily be overwhelmed by the sheer amount of information and papers being generated about your case. If you don't manage the flow of information efficiently and in a systematic way, you could make serious mistake down the road. One should purchase a) 1 1/2 binder b) 3 hole paper punch.
When you receive any document, punch and file it in the binder. That way you have everything in one place and easy to browse. You're going against professionals, so be professional in your organization.

How to Prepare For a Court Hearing

You first need to confirm at least 24 hours before the hearing that the court reporter will be present at the hearing. Write down the key points of the motion on a piece of paper.  Each argument should be summarized in one sentence. Familiarize yourself with the arguments. Bring three copies for each case law you plan to use to support your argument; give one to the judge, one to the opposing council and one for yourself. When it time to talk, go over each argument one by one. Do not allow the opposing council to interrupt you. If he/she does interrupt, say "excuse me, I am not done yet".
If the judge ask you a question you don't know the answer to or don't want to answer at this time, just say "You honor, I stand on my pleading."
Do not be forced to say things you don't want to say.
Dress professional. I recommend wearing a suit and tie for men. Appearance does matter.
Don't be intimidated; you have every right to be there.

New Foreclosure & Real Property Filing Fees

Effective June 1, 2009 for a new civil action in Florida circuit court relating to real property or mortgage foreclosure, the following filing fees shall apply:
  • For a claim where the value is $250,000 or more: $1,906.00
  • For a claim where the value is more than $50,000.00 but less than $250,000.00:$906.00
  • For a claim where the value is $50,000.00 or less: $401.00
 If you can't afford these fees, file an application for indigent status with the clerk of the court.

Book Recommendations

For pro-sers who are serious about taking their legal education to the next level, these books will be a good start.
  • Foreclosures by National Consumer Law Center
  • Truth in Lending by National Consumer Law Center
  • The Cost of Credit by National Consumer Law Center
  • Consumer Law Pleadings by National Consumer Law Center
  • Trawick's Florida Practice & Procedure by H. Trawick
  • Trawick's Florida Practice & Procedure Forms by H. Trawick
  • Florida Appellate Practice by Philip J. Padovano
  • Florida Civil Practice by Philip J. Padovano
  • 23 Legal Defenses to Foreclosure by Troy Doucet
  • Structured Finance & Collateralized Debt Obligations by Janet M. Tavakoli
  • Legal Research: How to Find & Understand the Law by Stephen Elias & Susan Levinkind
  • Business Law by Robert W. Emerson, J.D.
  • Civil Procedure: A Contemporary Approach by A. Benjamin Spencer
  • Behind The Black Robes: Failed Justice by Barbara C. Johnson
  • Stop Foreclosure Now by Lloyd Sega
  • Berman's Florida Civil Procedure by Bruce J. Berman
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whistleblower (Photo credit: ElectronicFrontierFoundation)

If this is posted, it has be posted anonymously.
Many people seeking loan modifications have difficulty with their paperwork being lost. This rarely happens. The reason their documents go missing is because they are intentionally destroyed in order to prevent a loan modification in circumstances where Wells has a legal obligation to modify a loan. Wells Fargo had a legal obligation under its TARP agreement when it still had 25 billion in Federal money, and still has the obligation as part of its servicing agreements. If Wells has an obligation to modify, but doesn’t want to, they have to create a way of rejecting the modification application without there being a record of it. Losing the documents serves this purpose.
Documents are destroyed in “The Black Hole.” The people you talk to when you are seeking a loan modification have no knowledge of it. Many of them are temps, lacking experience in loan processing. It never registers with most of them that something strange is going on. The Black Hole is kept completely isolated from Wells Fargo servicing staff. Even if they realize it exists, they have no idea of its location.
Here’s how it works. Any document pertaining to a loan modification must pass through The Black Hole. A customer cannot simply submit a document directly to the people working on their modification application. Wells gives customers a fax number to submit their documents to. This fax number goes directly into the Black Hole. If physical documents are sent to a Wells Fargo fulfillment center (known as an FC), they are faxed to the Black Hole by servicing staff. If you send documents directly to a processor working on loan modification, they are forbidden to simply take the documents and work on your application. They must fax them to the black hole. Serving staff are only permitted to communicate with a borrower via telephone or mail using form letters- no email.
The people who work in servicing are completely cut off from The Black Hole. They have never talked to anyone who works there, they have never received any communication from it. Documents go into The Black Hole, sometimes they come out, sometimes they don’t. When documents disappear, it’s not random.
The following is my belief as to how the Black Hole works. I won’t give my reasons behind the belief, because it would be a long explanation. Documents sent to The Black Hole are converted to PDF documents. A software system scans the document, pulling the loan number. With the loan number, the system automatically pulls servicing data- such as payment history, investor info, loan to value at origination, and so on. Another existing software system (an LPS product) identifies the property location and data on the local real estate market. The Black Hole uses this information to make a decision about whether or not it is in the best interest of the lender/servicer to modify the loan.
If you are way upside-down in your house, the lender/servicer may not want to foreclose if they have a risk that they can’t saddle the investor with the loss- better modify that loan! What if they can foreclose, pay off the investor, and make money on the equity in the house?- your modification docs might get lost. Depending on who the investor is, they may want to drag things out to make higher servicing fees, or in the case of a government loan, make money by the fees charged for services by third party vendors, vendors in which the servicer has ownership interest. In the case of Wells, this would be RELS. There is nothing that warms the heart of a banker like risk-free fee income. The relationships with LPS and First American should also be given scrutiny.
I think it unlikely The Black Hole is actually in Wells Fargo. They have to keep it separate from their own staff, and separation provides a layer of insulation from discovery in lawsuits. It’s likely a service provided by LPS. It’s curious that other servicers who are LPS clients have a public record of the same kinds of loan modification document disappearance. My best guess for the name of the LPS product (software) that does this is LPS HAMP Solutions.
Why would Wells do this? Doesn’t this sound far-fetched? You have to understand how they think. First, a core element of Wells Fargo corporate culture is what they call “the Wells Fargo swagger.” This a polite way of saying that at Wells Fargo corporate, arrogance is a virtue. Legally, this is outside the application of any existing regulatory box. While all of the intent for violations of law are there, there is no precedent for the law having been applied in this way.  For example, Wells Fargo knows the O.C.C. could potentially apply Reg B to loan mod applications, but they have never done so. Plus, Reg B fines levied per occurrence. Even if the O.C.C. said that every instance of document destruction is the equivalent of a loan denial, what record is there that it occurred? Wells Fargo staff meets with the O.C.C. bi-weekly. They have an established system for their interaction. All of this falls outside of their established way of interacting. The internal Wells Fargo compliance system is built to serve this existing interaction.
This is why a big corporation like Wells can run circles around regulators, making money all the way. Regulators are under funded and understaffed. Wells makes it easy to do their job with compliance systems that tell the regulators what they want to hear, while they are way out in front of the Federal Government making money on the frontier.
Wells Fargo’s public statements regarding loan modification, as well as on many other subjects, are not credible. Remember the scandal in 2009 about charitable contributions? Earlier this year, Mark Heid stood up in front of Congress and, in sworn testimony, stated Wells Fargo had 17,000 people working to keep people in their homes. This was false. Using an internal system, I counted them. The total number was a lot less, and this included all of the people in loss mitigation, even all the people whose job it is to foreclose on houses- not keep them in their homes. Just prior to Mark Heid’s first appearance before congress in 2010, Wells Fargo converted existing loan fulfillment sites to loan modification- an effort to fluff the numbers – and started converting those fulfillment sites back to loan origination right after his second testimony. Even in the interim between the two congressional appearances, there were fulfillment sites internally listed as loan modifications sites that were at least partially committed to origination. In Wells Fargo’s Branch retail fulfillment system, there was (as of June 2010), approximately 6,500 people working in loan origination fulfillment- and creating a new loan is a lot more work than modifying an existing loan. I find Mark Heid’s testimony be very difficult to believe.  How do we know Wells Fargo is telling the truth when they claim to have modified over half a million mortgages? How can this be independently verified? The compliance agent for the Federal Loan Modification program is Freddie Mac, a company with whom Wells Fargo has old, very close, and very large (hundreds of billions of dollars) relationships. How do we know they are telling the truth about anything?
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If you would like to receive information on how you might avoid the foreclosure of your home, please e-mail me your name, address, and phone number. Someone from our office will be in touch right away to assist you. With Warm Regards, Kelly L. Hansen, HOMEOWNERS HELPING HOMEOWNERS, ctsmyhon@yahoo.com
Be happy, healthy and prosperous, but most of all, be blessed.
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Kelly L. Hansen

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Kelly L. Hansen
33605 W. 88th Street
De Soto, KS 66018
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