ADmit and Lose: Another Unnecesary Loss for Borrower

Editor’s Analysis: How simple do I need to make this. If you admit the debt and that it was due and you didn’t pay it, everything else is window dressing for “gimme a break.” The 11th Circuit Court of Appeals had no choice but to rule against the borrower and to affirm the lower court’s ruling.

The facts stated by the court included the fact that the homeowner had refinanced by “entering into a transaction with IndyMac.” How does the Court know that transaction occurred? Because that is what the borrower said and that is the end of the discussion.

If the borrower said that there was no completed transaction with IndyMac, that any signed documents were the product of fraudulent concealment of the real lender, leaving the borrower with no real lender to hold accountable for compliance with TILA and state lending laws, and not even a lender that was authorized to issue a satisfaction of mortgage, then the Court would not have said that the borrower entered into a transaction with IndyMac. Instead it would have said that the facts were in dispute as to whether the Plaintiff’s loan was the result of a transaction with IndyMac or some other entity.

The court also recites that Plaintiff failed to make a payment due. Where did they get that fact? From the borrower’s tacit or explicit admission. If the Plaintiff said that there was no payment due and that just because an instrument calls for a payment is not ipso facto proof that the payment is due. It might have been paid by someone else or it might not have been due at all because there never was a deal between Plaintiff and IndyMac and its successors.

After dealing with those admissions, the court basically concluded that the other errors, fabrications and even forgeries of the banks and servicers were not particularly important. What was the harm. The borrower’s right to due process doesn’t mean that he can admit the debt, admit the default, admit the collateral, admit the note and then say he should nonetheless win.

You must remember that due process does not mean the same thing as “justice.” It means an opportunity to be heard. And this Plaintiff was heard to complain about illegal activity of the foreclosing party on a debt that the Plaintiff admitted was owed and secured by the house and on which he hadn’t paid.

Milani v. One West Bank FSB, Case No. 11-15378 (11th Cir. October 17, 2012) (unpublished) (per curiam).

Plaintiff Borrower failed to state sufficient facts to support claims for wrongful foreclosure, quiet title or fraud. Nor could Plaintiff maintain an action for declaratory judgment because the events had already occurred causing the material rights to accrue.

An action was commenced in state court, then removed to federal court in the Northern District of Georgia. The District Court granted motions to dismiss by the Defendants on several grounds and determined that amendment of the complaint would be futile. On review, the Court of Appeals affirms the District Court.

Plaintiff refinanced debt secured by his home in 2005. In his complaint, Plaintiff alleged that he had defaulted on the loan, that the security deed he signed was assigned through the defendants and that one of the defendants had initiated foreclosure against his home. Plaintiff did not present sufficient factual allegations to state a claim for wrongful foreclosure – duty, breach, cause, or damages. Nor could Plaintiff prevail on his action for quiet title because he stated in his complaint that he had signed over legal title in the security deed but no facts that the assignee’s title was fatally defective. His claim for fraud was not supported by factual allegations identifying with particularity the materially false representation nor valid grounds for concealing material information. Declaratory judgment was unavailable because Plaintiff had already defaulted on the note. Finally, Plaintiff failed to provide a factual or legal basis for his argument that foreclosure was improper because the defendants “separated the pertinent note and security deed in the process of engaging in the ‘illegal scheme of securitization of residential mortgages’ — leaving the note unsecured and the security deed unenforceable — and because certain of the assignments of the pertinent security deed were fraudulent or ‘doctored'”.

Marcus, Wilson and Edmonson, Circuit Judges.