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EDITOR’S COMMENT: The probabilities of a settlement are rising. The $25 Billion settlement actually settles very little but it probably will suffice for the vast majority of homeowners who were displaced wrongfully by foreclosure. This is not because they are getting proper restitution. It is because these represent the people who have had the fight crushed out of them. They are absorbing the loss to the great advantage of the banks and servicers.

According to most published reports, this is not an obstacle for homeowners who wish to pursue individual claims for wrongful foreclosures and associated claims. On the other hand, it will invite argument as to whether the settlement does pre-empt certain types of claims, which will muddy the waters just as the banks and servicers want it to be.

All this in the context of hundreds of articles containing copies and proof of wrongdoing by the banks, failure to establish the basic elements of a claim against anyone, much less a homeowner with whom they have no contract, and actual criminal conduct to cover-up the wrong-doing. This has been chronicled by DCB who submitted the following list of articles as proof that we have known for years, but as a society, we are reluctant to restore to the victims the available restitution from the Banks and servicers.

MOTION TO SHIFT THE BURDEN OF NON-PERSUASION: One additional note: at the very end there is a decision that I had missed which could have some persuasive authority. The decision is a bit muddled but it addressed a strategy I have long championed — putting the burden of proof where it belongs.

It is axiomatic that a party wishing to have a claim enforced must make the claim, plead the elements of the cause of action and then prove it. The general rule is that the party who brings up the matter seeking affirmative relief (like collection on a debt or a foreclosure) has the burden of pleading and proving his case BEFORE anything is required of the opposing party.

In my opinion lawyers should file a motion to re-align the parties so that once in court, the party seeking to foreclose would be requried to plead and prove their case. In non-judicial states, this could serve to change things considerably. There a simple denial and motion to realign would convert the case to a judicial caase, which is the way it ought to be. If the pretender has the goods, they should have no objection. Instead non-judicial process is used as an end run around the usual requirement of pleading and proving their case.

The result, as we have seen repeatedly, is that a foreclosure that would not be granted in a judicial foreclosure is rubber stamped because of incorrect presumptions about the nature and constitutionality of non-judicial process. As practiced, it clearly violates the due process rights set forth clearly in our U.S. Constitution.

Following is submitted by DCB

List of Documents for JUDICIAL NOTICE
1. New York Sues Banks Over Mortgage Registry System, WSJ, MARKETS FEBRUARY 3, 2012, BY CHAD BRAY NEW YORK—New York Attorney General Eric T. Schneiderman sued three of the nation’s largest banks over a private national mortgage registry system, contending it has resulted in a wide range of deceptive and fraudulent foreclosure filings. The lawsuit, filed in New York State Supreme Court in Brooklyn, names units of Bank of America Corp., J.P. Morgan Chase & Co. and Wells Fargo & Co. as defendants, as well as MERSCorp., which owns and operates the Mortgage Electronic Registration Systems, known as MERS. In his complaint, Mr. Schneiderman alleges that MERS has effectively eliminated the public’s ability to track property transfers http://online.wsj.com/article/SB10001424052970203889904577201060859616158.html

2. “Fed’s Raskin: Mortgage Servicers Must Fix ‘Deceptive’ Practices,” WSJ, JANUARY 8, 2012, By ERIC MORATH; “ WASHINGTON—Federal Reserve Gov. Sarah Bloom Raskin called upon mortgage servicers to fix their “sloppy and deceptive practices” and said the Fed must impose fines on servicers as part of a push for more forceful government action to fix the broken housing market… It is important “that the severe misconduct that has been uncovered in the mortgage servicing sector be addressed through intensified public enforcement of the law… “The Federal Reserve and other federal regulators must impose penalties for deficiencies that resulted in unsafe and unsound practices,” Ms. Raskin said…. Regulators, including the Fed, must take action against mortgage servicers to correct bad practices, Ms. Raskin said. For example, the Fed and other federal regulators investigated 14 of the largest mortgage servicers and last April found each had “significant problems. The review process is one of several efforts to address revelations that surfaced a year ago over banks’ use of so-called robo-signers, bank employees who signed off on huge numbers of legal foreclosure filings daily and falsely claimed to have personally reviewed each case. Ms. Raskin and fellow Fed Governor Elizabeth Duke have led the central bank’s study of housing policy, an area normally outside the central bank’s purview ” [Emphasis Added.]
http://online.wsj.com/article/SB10001424052970203513604577146801346334564.html

3. “NEVADA ATTORNEY GENERAL SUES LENDER PROCESSING SERVICES; ALLEGES WIDESPREAD ABUSES.”
DECEMBER 16, 2011. “Nevada’s attorney general filed a lawsuit against Lender Processing Services Inc. (LPS) alleging widespread fraud and misleading of consumers, adding to legal woes at the mortgage-services company and sending its shares lower.

The company’s shares were down 8.7% at $15.83 in
http://online.wsj.com/article/BT-CO-20111216-710615.html
4. “BANKS IN PUSH FOR PACT,” WSJ, BUSINESS DECEMBER 13, 2011. BY RUTH SIMON, NICK TIMIRAOS AND DAN FITZPATRICK “Five large lenders could be forced to make concessions worth roughly $19 billion as bank representatives and government officials push to put the finishing touches on a settlement of most state and federal investigations of alleged foreclosure improprieties…” http://online.wsj.com/article/SB10001424052970204336104577094772749499652.html

5. “MASSACHUSETTS SUES BANKS OVER FORECLOSURES,” WSJ, DECEMBER 1, 2011, Associated Press, NEW YORK — “Massachusetts sued five major banks Thursday over deceptive foreclosure practices such as the “robo-signing” of documents, potentially undermining negotiations between lenders and state prosecutors across the nation over the same issue…” http://online.wsj.com/article/AP42fa25a884654772aaf9a9ec07459844.html

6. “NEVADA GRAND JURY INDICTS TWO IN ALLEGED ROBO-SIGNING SCHEME ,” WSJ, U.S. NEWS, NOVEMBER 16, 2011. BY RUTH SIMON, “A Nevada grand jury has handed up criminal indictments against two title officers employed by Lender Processing Services Inc. for allegedly directing and supervising a robo-signing scheme, in which documents filed in foreclosure cases were signed without proper legal review…” http://online.wsj.com/article/SB10001424052970203699404577042961074968218.html
7. “MORGAN STANLEY IN N.Y. PACT, Wall Street Firm Agrees to Foreclosure Standards and End to ‘Robo-Signing’.” WSJ LAW NOVEMBER 11, 2011, BY LIZ RAPPAPORT, “…Morgan Stanley on Thursday became the second Wall Street giant to agree to a set of standards that aim to halt foreclosure abuses. Under a pact with Benjamin M. Lawsky, superintendent of New York’s Department of Financial Services, the New York securities firm and three other companies pledged to adhere to business practices that aim to prevent mishandling of loans and end “robo-signing,” in which bank employees signed foreclosure documents without reviewing case files as required by law…” http://online.wsj.com/article/SB10001424052970204224604577030010982458588.html

8. “PRICE OF FORECLOSURE SETTLEMENT CLIMBS HIGHER”,. WSJ BUSINESS NOVEMBER 1, 2011 BY RUTH SIMON, NICK TIMIRAOS AND DAN FITZPATRICK “The price tag to settle the state and federal investigation of bank foreclosure practices has increased by at least $5 billion in recent weeks, people familiar with the negotiations say. The proposal on the table now puts a $25 billion value on a settlement by the nation’s five largest mortgage servicing companies—Ally Financial Inc., Bank of America Corp., Citigroup Inc., J.P. Morgan Chase & Co. and Wells Fargo & Co. In exchange for picking up a bigger tab, banks would be released from certain legal claims tied to mortgage originations. Representatives of the five banks declined to comment…” http://online.wsj.com/article/SB10001424052970203707504577010421094503502.html

9. “BANKS, STATE REACH A DEAL” WSJ MARKETS SEPTEMBER 1, 2011. BY LIZ RAPPAPORT “The mortgage industry will take a step toward cleaning up some of its most controversial practices under a deal between a New York regulator and three financial firms, including Goldman Sachs Group Inc. Under the agreement with the state’s financial-services superintendent, Benjamin M. Lawsky, the three firms—Goldman, its Litton Loan Servicing business and Ocwen Financial Corp.—promised to end so-called robo-signing, in which bank employees signed foreclosure documents without reviewing case files as required by law. They also agreed to comb through loan files for evidence they mishandled borrowers’ paperwork and to cut mortgage payments for some New York homeowners….” http://online.wsj.com/article/SB10001424053111904716604576543021468088268.html

10. “AMERICAN HOME MORTGAGE FILES ‘ROBO-SIGNING’ SUIT,” WSJ, MARKETS AUGUST 23, 2011, BY NICK TIMIRAOS; One of the nation’s largest mortgage servicers filed a lawsuit on Tuesday against Lender Processing Services Inc., a top mortgage industry technology and services vendor, alleging that the firm improperly signed mortgage documents on its behalf and triggered millions of dollars in legal expenses as a result. American Home Mortgage Servicing Inc. said in the lawsuit that it had incorrectly processed more than 30,000 mortgage assignments when seeking foreclosure on properties in all 50 states as a result of the work by an LPS subsidiary. http://online.wsj.com/article/SB10001424053111904279004576526500703056250.html

11. “BANKS HIT HURDLE TO FORECLOSURES,” WSJ BUSINESS JUNE 1, 2011. By NICK TIMIRAOS Banks trying to foreclose on homeowners are hitting another roadblock, as some delinquent borrowers are successfully arguing that their mortgage companies can’t prove they own the loans and therefore don’t have the right to foreclose. These “show me the paper” cases have been winding through the courts for several years. But in recent months, some judges have been siding with borrowers and stopping foreclosures after concluding that banks’ paperwork problems are more serious than previously thought and raise broader ethical questions. This year, cases in California, North Carolina, Alabama, Florida, Maine, New York, New Jersey, Texas, Massachusetts and others have raised questions about whether banks properly demonstrated ownership. http://online.wsj.com/article/SB10001424052702304563104576357462376821094.html

12. “MORTGAGE OWNERSHIP MISCUES THREATEN FORECLOSURES,” WSJ Real estate news and analysis, June 1, 2011, “…one reason why mortgage companies have struggled to get foreclosures back on track: Banks are running into more challenges questioning whether they have properly documented ownership of mortgages. The speed of bundling loans from nonbank lenders into mortgage securities sold by Wall Street has now spawned some confusion as banks’ lawyers have struggled to properly file foreclosures showing that mortgage trusts own their loans. Some lawyers say that confusion has prompted some attorneys and other mortgage firms to fabricate and backdate documents. In January, the U.S. Trustee Program, a division of the Justice Department that oversees bankruptcy cases, raised “concerns about the integrity” of documents filed on behalf of Deutsche Bank…lawyers for American Home submitted new paperwork showing that the loan had been transferred last June to a company called Sand Canyon Corp., the parent of Option One. But that raised eyebrows because Sand Canyon executives previously testified that the firm exited the mortgage business entirely in 2008, meaning it wouldn’t have been able to assign anything in 2010…. Mark Polen, a judge on the [Florida] appellate court, wrote… ‘Decision-making in our courts depends on genuine, reliable evidence,’ he wrote. ‘The system cannot tolerate even an attempted use of fraudulent documents.’” [Emphasis added.] http://blogs.wsj.com/developments/2011/06/01/mortgage-ownership-miscues-threaten-foreclosures/
13. “JUDGES SEE LITTLE IMPROVEMENT IN FORECLOSURE PROCEDURES,” WSJ, HOMES APRIL 29, 2011. By RUTH SIMON, “Some judges are skeptical of claims by lenders that they have substantially improved their foreclosure procedures since controversy over the practices exploded last fall F. Dana Winslow, a N.Y. State Supreme Court Justice in Long Island’s Nassau County, said there has been only “a marginal improvement in what is being submitted to the court.…For example, financial institutions are ‘showing a better chain of title’ about who owns the debt, he said. “But I’m not seeing any additional clarity on who has control over the actual mortgage note signed by the borrower and lender and where the note is….’ In New York, foreclosure filings have declined sharply since New York State Chief Judge Jonathan Lippman issued an order in October requiring lawyers to sign an affidavit affirming that foreclosure paperwork was properly reviewed and to their knowledge is accurate. ‘There’s almost a presumption that there may be something wrong with the documentation,’ said O. Max Gardner III, a lawyer in Shelby, N.C., who represents borrowers in bankruptcy cases. U.S. regulators have ordered banks to take steps to “ensure the accuracy of all documents” used in the foreclosure process….” [Emphasis added.] Write to Ruth Simon at ruth.simon@wsj.com http://online.wsj.com/article/SB10001424052748703367004576289241312106726.html

14. “FANNIE REPORT WARNED OF FORECLOSURE PROBLEMS IN 2006,” WSJ MARKETS MARCH 25, 2011, By CARRICK MOLLENKAMP And NICK TIMIRAOS, “Fannie Mae was warned in a 2006 internal report of abuses in the way lenders and their law firms handled foreclosures, long before regulators launched investigations into the mortgage industry’s practices. The report said foreclosure attorneys in Florida had “routinely made” false statements in court in an effort to more quickly process foreclosures and raised questions about whether some mortgage servicers or another entity had the legal standing to foreclose… In recent months, federal and state officials have initiated probes into whether banks and foreclosure law firms improperly seized homes by using fraudulent or incomplete paperwork. Some U.S. banks temporarily froze foreclosures to review their processes and now face the prospect of a multibillion-dollar settlement with federal and state officials. Elizabeth Warren, the White House adviser in charge of establishing the new Bureau of Consumer Financial Protection, said in congressional testimony last week that with proper oversight, “the problems in mortgage servicing would have been exposed early and fixed while they were still small.” Ms. Warren didn’t name Fannie Mae and referred to the industry in general….” http://online.wsj.com/article/SB10001424052748703784004576220582457540372.html
15. “FORECLOSURE TALKS SNAG ON BANK LIABILITY”, WSJ, LAW AUGUST 22, 2011. BY RUTH SIMON, VANESSA O’CONNELL AND NICK TIMIRAOS: “Efforts to reach a settlement that would end the long-running probe of foreclosure practices are snagged over whether banks will get broad legal immunity from state officials for mortgage-related claims. Federal and state officials are seeking penalties of $20 billion to $25 billion from Bank of America Corp., J.P. Morgan Chase & Co. and other financial firms under investigation since last fall. The banks are pushing hard for a deal, but they have insisted on a wide-ranging legal release from state attorneys general. ‘They wanted to be released from everything, including original sin,” said a U.S. official involved in the …’” http://online.wsj.com/article/SB10001424053111904070604576521282894534152.html

16. “BANKS IN PUSH FOR PACT” WSJ: BUSINESS, DECEMBER 13, 2011.. BY RUTH SIMON, NICK TIMIRAOS AND DAN FITZPATRICK, ”Five large lenders could be forced to make concessions worth roughly $19 billion as bank representatives and government officials push to put the finishing touches on a settlement of most state and federal investigations of alleged foreclosure improprieties…” http://online.wsj.com/article/SB10001424052970204336104577094772749499652.html

17. “U.S. PROBES FORECLOSURE-DATA PROVIDER-LENDER PROCESSING SERVICES UNIT DRAWS INQUIRY OVER THE STEPS THAT LED TO FAULTY BANK PAPERWORK.” WSJ LAW APRIL 3, By AMIR EFRATI and CARRICK MOLLENKAMP “A subsidiary of a company that is a top provider of the documentation used by banks in the foreclosure process is under investigation by federal prosecutors. The prosecutors are “reviewing the business processes” of the subsidiary of Lender Processing Services Inc., based in Jacksonville, Fla., according to the company’s annual securities filing released in February. People familiar with the matter say the probe is criminal in nature. Michelle Kersch, an LPS spokeswoman, said the subsidiary being investigated is Docx LLC. Docx processes and sometimes produces documents needed by banks to prove they own the mortgages. LPS’s annual report said that the processes under review have been “terminated,” and that the company has expressed its willingness to cooperate. Ms. Kersch declined to comment further on the probe. A spokesman for the U.S. attorney’s office for the middle district of Florida, which the annual report says is handling the matter, declined to comment. The case follows on the dismissal of numerous foreclosure cases in which judges across the U.S. have found that the materials banks had submitted to support their claims were wrong. Faulty bank paperwork has been an issue in foreclosure proceedings since the housing crisis took hold a few years ago. It is often difficult to pin down who the real owner of a mortgage is, thanks to the complexity of the mortgage market.” http://online.wsj.com/article/SB10001424052702303450704575160242758576742.html

18. “UNDER PILES OF PAPERWORK, A FORECLOSURE SYSTEM IN CHAOS” (pgs A1, A24) THE WASHINGTON POST, September 23, 2010), By Ariana Eunjung Cha and Brady Dennis Washington Post Staff Writers; “The nation’s overburdened foreclosure system is riddled with faked documents, forged signatures and lenders who take shortcuts reviewing borrower’s files, according to court documents and interviews with attorneys, housing advocates and company officials.” [See also Department of Homeland Security: http://www.fbiic.gov/public/2010/oct/Financial_Services_SOSD_September2010.pdf
http://www.washingtonpost.com/wp-dyn/content/article/2010/09/22/AR2010092206146.html
19. “ERRORS LEAVE FORECLOSURES IN QUESTION” (pgs B1, B7), THE NEW YORK TIMES, September 25, 2010: “The recent admission by a major mortgage lender that it had filed dubious foreclosure documents is likely to fuel a furor against hasty foreclosures, which have prompted complaints nationwide since housing prices collapsed…While GMAC is the first big lender to publicly acknowledge that its practices might have been improper, defense lawyers and consumer advocates have long argued that numerous lenders have used inaccurate or incomplete documents to remove delinquent owners from their houses….J. Thomas McGrady, chief judge in the foreclosure hotbed of St. Petersburg, said the problems went far beyond GMAC. Four major law firms doing foreclosures for lenders are under investigation by the Florida attorney general… ‘Some of what the lenders are submitting in court is incompetent, some is just sloppy,’ said Judge McGrady of the Sixth Judicial Circuit in Clearwater, Fla. ‘And somewhere in there could be a fraudulent element.’” [Emphasis added.] http://www.nytimes.com/2010/09/25/business/25mortgage.html

Approval and Order of Judicial Notice: E.R. 21; Wall Street Journal
The Court hereby approves the list of Wall Street Journal Articles attached as evidence of the facts set out therein as evidence of an industry practice of filing defective documents to obtain possession of homes, and other similar described failures, and such other information as is set out therein; and ORDERS that the plaintiff shall have the to use the articles in part or in full for purposes of pleadings, motions, and as admissible evidence at trials in this case.
So-Approved and ORDERED:
____________________________________________
Judge ______________
MOTION TO TRANSFER THE RISK OF NON PERSUASION
Plaintiff herein respectfully moves this court order the burden of proof to shift in respect of industry practices described in the WALL STREET JOURNAL. The issues presented there included but were not limited to defective documents filed with the court to obtain possession or title to the subject homeowner real estate. Movant requests that the court ORDER that the burden to shall and has shifted to defendant debt collector to shall show cause why his activities were held to a higher standard of care than the “industry practice, or the evidence of industry practices stated in the Wall Street Journal Articles admitted as evince into this record by Judicial Notice of Adjudicative facts” filed herewith as conclusive evidence of such industry practices ALSO FOLLOWED BY DEFENDANT DEBT COLLECTOR, and if he shall not make a persuasive demonstration as he may show cause, then he shall be conclusively presumed to have followed those practices.
ORDER THAT THE BURDEN TO SHALL AND HAS SHIFTED TO DEFENDANT DEBT COLLECTOR TO SHOW CAUSE OR FORFEIT THE QUESTION
This Court hereby issues this ORDER that the burden to shall and has shifted to defendant debt collector and he shall show cause within 30 days why his activities were held to a higher standard of care than the “industry practice, or the evidence of industry practices stated in the Wall Street Journal Articles admitted as evince into this record by Judicial Notice of Adjudicative facts” filed herewith as conclusive evidence of such industry practices ALSO FOLLOWED BY DEFENDANT DEBT COLLECTOR, and if he shall not make a persuasive demonstration as he may show cause, then he shall be conclusively presumed to have followed those practices.
_________________________________________________
Judge___________________________

Tags: appraisal fraud, foreclosure fraud, FORECLOSURE SETTLEMENT, foreclosures, housing market, housing prices, investors, mortgage fruad, mortgages, MOTION TO SHIFT THE BURDEN OF NON-PERSUASION, settlement, strategic default, uaction fraud
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