FLOODGATES vs. JUSTICE

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I had assumed that the only reason the Judges were holding back on decisions in favor of Borrowers and Petitioners in bankruptcy was that they just couldn’t believe that the banks would commit blatant fraud and because they trusted the banks and the large firms that represented the banks. The thought was that any defense by a borrower is really a plea for delay of the inevitable. The deadly question “Did you sign that note” followed by “did you make those payments” could not be overcome by any “Yes, but” answer.

As we go further down the track and we find that

• the answer is that we DO contest and deny the authenticity of the note both because
  

• we don’t believe that is actually the note signed by the borrower and
  

• because the note does not describe the transaction that actually occurred,
  

• and that the answer is that the borrower denies that any payment due is unpaid,
  

the issue becomes increasingly complex but there is still another reason for the resistance of judges to admit that just because an advance of money was made to the homeowner doesn’t mean that the party seeking to enforce payment either made the loan or paid for the loan. That of course leaves the issue open as to how many times the borrower can be sued for the same note, especially when the note itself is fatally defective in naming the wrong parties and excludes essential and material parts of the transaction between the borrower and the lender (investor). BUT IT ALSO LEAVES OPEN THE POSSIBILITY THAT 80 MILLION MORTGAGE TRANSACTIONS MIGHT BE SUBJECT TO JUDICIAL MODIFICATION OR NULLIFICATION.

So it turns out after hearing hours of motion practice, appeals and reading transcripts, I had missed something. Judge Canady from the Florida Supreme Court alluded to it when he pleaded with the legislature to provide adequate funding for justice to be served. The answer was staring me in the face — the pretender lenders don’t want justice to be served and they don’t want an army of  judges pouring over defective documents (ALL MORTGAGES 1999-2011?) that could nullify the mortgage, eliminate any enforcement by the pretender and potentially eliminate any enforcement at all. So this comes out of the Judge’s mouths by allusions to floodgates of litigation, as they contemplate every mortgage ending up in court.

So the question is whether we are really going to say that the courts are not going to hear cases on the merits because we just don’t have the time or money to do it? It would seem that with 0.7% of the entire Florida budget devoted to the justice system, the lobbyists are working hard to restrict the funding so the truth can’t come out. One of the Judges on an appellate panel I heard more or less said it when he asked the attorney for the homeowner whether his position would mean that ALL non-judicial foreclosures would require an evidentiary hearing. The answer the Judge didn’t want to hear and which was sidestepped by counsel is YES — if a pretender could not prevail in a judicial foreclosure, there is no reason for him to do so in a non-judicial foreclosure.

The basic problem is that NOBODY wants to hear this answer or accept it as true. Probably not even the borrowers, or most of them anyway. MERS says it has seen over 80 million loan transactions go in and out of its data records. If those loan transactions lack documentation, or if the documentation lacks authenticity or truth, then we have a huge title mess on our hands and the courts seem like the only place this can be  cured. The mega banks are obviously pushing this to the wall on the supposition that nobody is going to say we need to redo 80 million mortgages, even if that is what the law requires. So the homeowner, the pensioner, the taxpayer, the state and local government take it on the chin because the fraud was so big that we lack the resources to correct it.

But that is not really true, is it? What we lack is the resolve to correct it not the resources. If we resolved to apply the law and it became known to the mega banks that no bluff would make it through the courts, then the fight would be over long before the floodgates were really a risk. Unfortunately fear is a more powerful motivator than common sense. So right now we are stuck in a status quo where the law and common sense is being thrown to the ditch while Jamie “Gem” Dimon run the joint.  Anybody remember how this turns out? —  Organized crime gets a huge boost courtesy of the government and the little guy, whether he is a consumer or worker, gets the shaft.

Welcome to the new season of “Boardwalk Empire.”

Posted in bubble, Corruption, Eviction, securities fraud |