Such rulings from appellate courts undermine confidence in the judicial system for those who are victims of wrongdoing and reinforce the confidence and arrogance of those committing the wrongs that they will get away with it.
see 9th Circuit Foreclosure Trustee not a debt collector 10-56884
The entire “Substitution of Trustee” scheme is performed with two purposes only — (1) to record a self servicing document that will be considered facially valid establishing a “new” beneficiary and (2) the selection of an entity whose sole purpose is to facilitate foreclosure.
As a Trustee on a deed of trust it has obligations set forth in state statutes allowing the use of non-judicial foreclosure proceedings. The old beneficiary, frequently a title company, would follow the requirements of the statutes and common sense. The “new” one is “appointed” by a self-proclaimed beneficiary with instructions to foreclose. Hence the new trustee is obviously selected because of the likelihood that it will follow instructions from the self-proclaimed “successor” beneficiary and thus “establish” the validity of the new beneficiary and the data from the new beneficiary indicating the existence of a default. That is why it is described as “the foreclosure trustee.” The old one might require more information and documentation to establish the authenticity of the successor beneficiary.
The 9th Circuit here amending its prior opinion, rules out the foreclosure trustee as a debt collector because it is only selling collateral and not seeking recovery of money. Never mind the default letter that gives the amounts required for reinstatement or the redemption rights of any borrower. Playing right into the hands of the banks, the 9th Circuit has simply failed to deal with realities and instead has arrived at a result that this is as remote from the realities of today’s foreclosures as any Dickensian portrayal of the courts (see “Bleakhouse“).
The dissenting opinion from which I quote below sums up the weakness of this decision:
The suggestion in Hulse that a foreclosure proceeding is one in which “the lender is foreclosing its interest in the property” is flatly wrong. A foreclosure proceeding is one in which the interest of the debtor (and not the creditor) is foreclosed in a proceeding conducted by a trustee who holds title to the property and who then uses the proceeds to retire all or part of the debt owed by the borrower. See Cal. Civ. Code § 2931; Yvanova v. New Century Mortg. Corp., 365 P.3d 845, 850 (Cal. 2016). Any excess funds raised over the amount owed by the borrower (and costs associated with the foreclosure) are paid to the borrower. See Cal. Civ. Code § 2924k; see also Jesse Dukeminier & James E. Krier, Property 590 (2d ed. 1988). Thus, contrary to the holding in Hulse, “[t]here can be no serious doubt that the ultimate purpose of foreclosure is the payment of money.” Glazer, 704 F.3d at 463. Nor, because the FDCPA defines a “debt collector” as one who collects or attempts to collect, “directly or indirectly,” debts owed to another, 15 U.S.C. § 1692a(6), does it matter that the money collected at a foreclosure sale does not come directly from the debtor.
But even this fairly clear rendition of foreclosures recites “facts” that are in an alternate universe, to wit: that “the money collected at a foreclosure sale does not come directly from the debtor.” Where else did it come from? It came from the sale of the alleged debtor’s homestead which is property owned by the debtor and which can only be stopped by payment of the amount demanded or a lawsuit challenging the Substitution of Trustee, the status of the supposed successor beneficiary and the presence of a default between the homeowner, on the one hand, and the new beneficiary on the other hand. Either way the money comes from the debtor.
Add to that the obvious fact that Recontrust and other entities similarly situated are simply controlled entities of the large banks. In a word, they are appointing themselves as beneficiary and as successor trustee through the use of a sham entity that has no interest nor any power to act like a true trustee. The analytical issue appears to be that taken collectively, the Foreclosure Trustee, the self proclaimed successor beneficiary and the self proclaimed or appointed “servicer” are aiming for foreclosure under the guise of a quest for money.
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