The Temporary Restraining Order (TRO): Stopping the Sale OR Stopping the Credit Bid

I started thinking about different procedural matters that are the likely subject of objections that could be sustained by a trial judge and would most likely be affirmed by an appellate court.

As for the authority of the BKR judge, the appropriate objection would seem to be that the court is not really a court and that the hearing is not an adversary proceeding, which means that the BKR judge is there to gather facts and rule on minor issues concerning some of the evidence but not allowed to make a dispositive ruling on anything that would mean one side wins and the other side loses.

The objection, depending upon the exact circumstances and what the Judge wants to say would be that with all due respect to the judicial system, this BKR “Judge” does not have authority to try a case and therefore can’t enter a final order or final judgment — something left entirely to the tenured federal district judges.

The objection would state that the most the BKR Judge can do is issue recommendations along with the reasons for his recommendations. But there even is even a question as to what rulings on the admissibility of evidence are within the power of a BKR Judge.

Then as I was doing the ghost writing and recommendations for an attorney in Northern California, I realized that there were two primary lines of attack in pursuing a TRO. One line of attack is the usual objections to lack of evidence etc. along with the dual tracking where modification is started but then never finished and the homeowner is dumped into foreclosure — something expressly prohibited by the Dodd-Frank Act and the CFPB.

Yet another related attack is also introduced given the fact that the non-judicial process, like bankruptcy doesn’t have any place for a full hearing on the merits of either the claim or the denial of the claim and neither the trustee nor the BKR judge has the power or the time to conduct a hearing in which real evidence is proffered with proper foundation from a competent witness, cross examination and so forth.

This last points yields the interesting yet absolutely crux of the matter — even if procedurally the trustee and “beneficiary” prove they have the the power to continue with the sale, they have not proved that the “beneficiary” is a creditor under state statute and therefore they have failed to establish their right to submit a credit bid. Believe me, if the bid had to be in cash, there would be no sales. It is the credit bid that is the Achilles heal of the foreclosure process. Procedurally it may be challenging to stop the foreclosure sale, but practically it is not hard at all to block a party from entering a credit bid or attacking the sale on the absence of consideration.

Under the principles of Deny and Discover, which is getting increasing traction as more lawyers are following what I have suggested, the entire claim is denied and in discovery, or even for the actual hearing, a subpoena is issued to the “beneficiary” to show all financial transactions starting with the origination of the loan up to and including the present. Unless the beneficiary can show it is also a creditor because they would lose the money they paid out for the loan, then they are not entitled to enter a credit bid.

In discovery you don’t want what you know they already have or could fabricate for the hearing — documents of assignments and endorsements, allonges etc. all of which are fake, fabricated and forged.

What you want is discovery or by subpoena at the hearing is the cancelled check, the wire transfer, the ACH entry, all of which have digital entries and counterparts throughout the financial system and can’t be faked, as far as I know, even by the biggest guns on Wall Street. I know this because I  have a business processing debt and ATM transactions. I know how, why, who and when money actually exchanges hands and how the Federal Reserve, account processors and other parties KNOW when a financial transaction is complete, to wit: when the money has exchanged hands without any caveats. Ask for these, and you will most certainly settle your case. The reason is simple — there is no such money trail and at that point the entire stack of fake paperwork starts to stink like fish after three days in the hot sun.

Tags: foreclosure defense
Posted in Corruption, Fabrication of documents, foreclosure defenses, Foreclosure Questions |