Hearsay Practice Hints: Meeting Intimidation with Facts

I went to a hearing yesterday on the Bank’s Motion for Summary Judgment. The Motion had the usual deficiencies and the affidavit was, as usual, worthless because the witness failed to state any basis for personal knowledge. The attachments to the motion were absent. The Bank avoided the allegation that it ever made a loan and avoided any allegations that there was financial injury and if so, to whom. The Foreclosure Mill was rotating coverage attorneys who knew little about the case. We quickly agreed to drop the motion for summary judgment and move forward to a status conference in 120 days, allowing time to explore modification and discovery.

The interesting thing is that the Bank’s attorney actually said to me that we should not conduct discovery because it would only add to the attorneys fees that the homeowner would owe. This rolled out of his mouth in a manner that indicated to me that it was a standard ruse to get the homeowner to give up rather than fight. Of course I didn’t take his suggestion seriously and I told him so. But I could see how pro se litigants and even inexperienced lawyers have their confidence undermined by that “suggestion.” The ruse is that the Bank is going to win anyway. The facts are that the Bank in that case has potentially insurmountable proof problems. And the tactic is also used because the foreclosure mills are paid a flat fee for all cases, usually $1200 or $1400 and the law firm therefore wants as little work as possible on each case.

Practice Hint: always check the State Statutes (or the Federal Rules) on evidence, especially here say and hearsay exceptions before you open your mouth or file any discovery. There are some juicy morsels in there. Like how you can use business records as an exception to hearsay and how the fundamental issue is the trustworthiness of the records. Simply stated, if the records are those of a non-party who has no interest in the outcome, then the Court should lean toward allowing the business records into evidence upon the proffer of an appropriate witness and compliance with other rules of procedure requiring notice to the opposing party. Those rules should be carefully reviewed and used against the Bank if they don’t comply. REMEMBER ANY INSTRUMENT IS PROBABLY HEARSAY BECAUSE IT ISN’T A WITNESS. the issue is whether the records qualify for an exception to the hearsay rule. If the records come from a party, then they are inherently suspect because they are self-serving even if they are true or could be true. The rules should be strictly applied and you should preserve the issue not only with motions in limine but also by objecting at trial should the issue come up again even after the Court has entered an order barring the introduction of the business records.

As far as I can tell the Banks make no attempt to comply with the law and rules regarding business records, as an exception to the basic rule that hearsay is not admissible in evidence. If you read and study the applicable laws of evidence, rules of civil procedure and hold their feet to the fire, you just might have punctured their case. Failure to comply with those laws and rules is fatal to the foreclosure case, even if they right. It is potentially fatal to the homeowner if there is a Failure to object to hearsay on the basis that the Bank failed to comply with the laws and rules governing introduction of business records.

Practice Hint: lawyers for the foreclosure mill really know very little about securitization. In fact, few foreclosure defense lawyers have mastered it, which is why my law firm is providing litigation support across the country. The proof of that is that when I ask lawyers to informally comply with our request of proving the money trail with cancelled checks, wire transfer receipts, wire transfer instructions, the lawyers say “no problem” only to later nervously evade the issue after they ask the Bank that is foreclosing.

The lawyers for the Banks honestly believe that the homeowner’s closing was largely in compliance with Federal and state laws. They don’t understand that the securitization was an illusion. They don’t understand why a closing agent would take money from a third party and apply it to the closing and then have the homeowner sign a note and mortgage in favor of a party who was not loaning any money at closing, directly or indirectly. They don’t understand that the original note is fatally defective in those circumstances and that the mortgage is a non-perfected encumbrance that is not enforceable. They don’t understand that recording the mortgage doesn’t correct deficiencies in the closing process.

As always, check with an attorney licensed in your jurisdiction before you apply anything contained in this article. And always remember that just because you are right it doesn’t automatically follow that you win. The Judge must also be convinced that you SHOULD win, which is why I counsel pro se litigants to get lawyers or at least legal advice. Remember that the devil is in the details.

Tags: business records exception to hearsay rules, exceptions to hearsay, foreclosure, hearsay, motions in limine, OBJECTIONS, required notice on business records
Posted in Corruption, evidence, foreclosure mill, Modification, Motions, Pleading, securities fraud, Servicer |