Guidance for Judges When Considering Admissibility of Hearsay Business Records

We have all seen it. Practically every foreclosure trial is the same. The lawyers claim they represent the servicer but do not claim to be representing the Plaintiff “Trust.” Their sole witness is a robo-witness whose sole job is to testify in court and who in most cases never had any other relationship with the servicer or any bank or trust involved in the subject foreclosure.

The lawyer seeks to get into evidence the “business records” of the “servicer.” In most cases the “servicer” is not the servicer. It has processed no payments and has done none of the duties of a servicer as it is understood in the industry and as specified in the Pooling and Servicing Agreement. That servicer is in actuality an enforcer masquerading as a servicer.

So the lawyer shows the witness the “business record” and asks him what it is and the witness replies that it is the business records of his employer, the alleged servicer who is not a servicer. And then come the rehearsed questions about whether the witness is “familiar” with the record keeping procedures of his employer but is never asked about the record-keeping procedures of the the predecessors who actually collected money from the borrowers and who did and in most cases still are making payments to the investors who are the real “creditors.”

The witness usually knows nothing about who, what, when , where and why any records were kept, why they reflect certain changes in posting or anything else because his employer entered the picture AFTER the borrower stopped paying but during the time that the previous “servicer” was making payments tot he investors. In most cases the investors are getting paid currently through servicer advances. That in truth is what the real case is about — getting to a foreclosure judgment and sale so the previous servicer can collect back the volunteer payments made to investors.

My tirades about hearsay and exceptions to hearsay to allow certain documents can be summed up thusly: By definition any document purporting to have relevant information or data on it is hearsay simply because a document cannot be cross examined nor can it attest to its own authenticity, accuracy, reliability and truthfulness. On that everyone agrees. So a witness is necessary to provide a foundation for one of the exceptions to the hearsay rule which simply says that a hearsay statement may not be admitted in evidence. The witness can’t say that he heard from someone not in the courtroom that the light was red. If the lawyer wants to get the red light into evidence he needs the person who said it, not the person who heard it.

But more than that is the credibility of a witness, and the company he or she represents, in connection with current foreclosures. They are retained as a stand-in for their predecessors so they don’t have to answer questions about how and why certain records were kept and how and why the court and the borrower is not entitled to the rest of the records which would show payments to the real creditors. They are there at the behest of the former servicer for the sole purpose of getting a foreclosure judgment and sale not for the protection of the creditor, who has been paid, but for the advantage of the predecessor who wants to collect the volunteer advance payments made to the investors. That predecessor has no direct claim against the borrower. So they are disguising their claim as a foreclosure leaning on the fact that the borrower stopped paying. But if the creditors are receiving payment anyway there is no default.

Since it is the servicer that has an interest, the credibility of the witness or “records.” is at least in some doubt. My feeling is that the credibility of the witness is more than a little in doubt. Both the witness and the company for whom he or she is the corporate representative have no interest in serving the “lender” or “creditors” and have only the interest of themselves and their predecessor “servicers” to protect or advance. So by my reckoning lawyers should argue more forcefully (notwithstanding some appellate decisions to the contrary) to bar such evidence in court. They could, if they really wanted to be open about it, bring in a witness who was involved in the creation of the records that were “boarded.”

I came across a recently decided case and I liked their description of what constitutes trustworthiness and credibility. I offer it below:

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In Kagen aka Gaurino v Kagen,Unpub Per Curiam Opinion, (#318459, 7/14/2015) the Court of Appeals reversed a trial court order denying the father’s motion to update the children’s vaccinations; and ordered that the children be vaccinated, but in strict compliance with the recommendations of the children’s pediatrician.

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A critical issue before the court was the admissibility of hearsay evidence under the catch-all exception of MRE 803(24). <>

Hearsay evidence may be admissible under the catch-all exception of MRE 803(24). “To be admissible under MRE 803(24), a hearsay statement must: (1) demonstrate circumstantial guarantees of trustworthiness equivalent to the categorical exceptions, (2) be relevant to a material fact, (3) be the most probative evidence of that fact reasonably available, and (4) serve the interests of justice by its admission.” People v Katt, 468 Mich 272, 290 (2003).  In Katt, 468 Mich at 291 n 11, the Michigan Supreme Court quoted with approval various factors that federal courts have adopted in analyzing a statement’s trustworthiness. Of particular relevance are the following factors: (3) The personal truthfulness of the declarant. If the declarant is an untruthful person, this cuts against admissibility, while an unimpeachable character for veracity cuts in favor of admitting the statement. The government cannot seriously argue that the trust due an isolated statement should not be colored by compelling evidence of the lack of credibility of its source: although a checkout aisle tabloid might contain unvarnished truth, even a devotee would do well to view its claims with a measure of skepticism. (4) Whether the declarant appeared to carefully consider his statement. * * * (8) Whether the declarant had personal knowledge of the event or condition described. * * * (11) Whether the statement was made under formal circumstances or pursuant to formal duties, such that the declarant would have been likely to consider the accuracy of the statement when making it.<>

In Kagen, proffered reports from the Center for Disease Control (CDC), National Institute of Health (NIH), Food and Drug Administration (FDA), and Michigan Department of Community Health (MDCH) were admissible. Although hearsay, “[a]ll four reports are official (formal) statements by government agencies.” Kagen I, unpub op at 5. That the reports were prepared in the declarants’ official capacities and were presented in a public forum assured that the declarants had verified the accuracy of the information before its dissemination.  Such reports “were prepared by experts in the field of child immunizations and were based on scientific study,” we reasoned, and “it would impose an unreasonable burden to expect [the party] to present the testimony of the government agents who compiled or prepared the reports.” Kagen I, unpub op at 5. Accordingly, such reports produced by government agents are “the most probative evidence of [a material] fact [that is] reasonably available.” See Katt, 468 Mich at 290. As noted, such formal reports are also reliable as required under the first Katt factor as they are created by individuals in their official capacities and for public dissemination, invoking a special duty to ensure accuracy. Kagen I, unpub op at 5-6.<>

However, documents from Wikipedia are not inherently trustworthy.  See, e.g., Badasa v Mukasey, 540 F3d 909, 910 (CA 8, 2008); Bing Shun Li v Holder, 400 Fed Appx 854, 857 (CA 5, 2010) (“We agree with those courts that have found Wikipedia to be an unreliable source of information.”); United States v Lawson, 677 F3d 629, 650 (CA 4, 2012) (“Given the open-access nature of Wikipedia, the danger in relying on a Wikipedia entry is obvious and real. As the “About Wikipedia” material aptly observes, “[a]llowing any-one to edit Wikipedia means that it is more easily vandalized or susceptible to unchecked information.” Further, Wikipedia aptly recognizes that it “is written largely by amateurs.”); Johnson v Colvin, unpublished opinion of the United States District Court for District of Maine, decided September 25, 2014 (Docket No. 1:13-cv-406-DBH) (“Counsel are reminded that this court has not accepted Wikipedia as a reliable medical reference.”); Smartphone Techs LLC v Research in Motion Corp, unpublished opinion of the United States District Court for the Eastern District of Texas, filed February 13, 2012 (Docket No. 6:10-CV-74-LED-JDL) (citations omitted)<>

A blog by its very nature is not akin to a formal and official statement presented by a government agency. A blog is a “[w]eb site that contains online personal reflections, comments, and often hyperlinks provided by the writer.” Merriam-Webster’s Collegiate Dictionary (11th ed), p 133. As described by this Court in Ghanam v Does, 303 Mich App 522, 547; 845 NW2d 128 (2014) (quotation marks and citation omitted): Ranked in terms of reliability, there is a spectrum of sources on the internet. For example, chat rooms and blogs are generally not as reliable as the Wall Street Journal Online. Blogs and chat rooms tend to be vehicles for the expression of opinions; by their very nature, they are not a source of facts or data upon which a reasonable person would rely.<>

Snopes.com as a website that “has come to be regarded as an online touchstone of rumor research” also lacks the characteristics of trustworthiness.  See (accessed July 1, 2015). The site touts: “Welcome to snopes.com, the definitive Internet reference source for urban legends, folklore, myths, rumors, and misinformation.” (accessed July 1, 2015).<>

Finally, the catch-all exception to the hearsay rule does not open the door to the introduction of anything a physician or ‘purported’ expert has to say. The other evidentiary rules governing the introduction of expert testimony (MRE 702, MRE 703 and MRE 707) make it plain that in the absence of an adequate foundation, an expert opinion lacks reliability.<>

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