MAINE S. CT: HSBC AFFIDAVIT NOT TRUSTWORTHY – SUMMARY JUDGMENT REVERSED

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The fact that the true creditor doesn’t want to collect from homeowners is not a good reason to allow someone else to collect it. — Neil Garfield

FORECLOSURE CASE LAW – HSBC v. MURPHY, Maine Supreme Judicial Court, 2011 ME 59 (May 19, 2011)

“AFFIDAVITS SUBMITTED BY HSBC ARE INHERENTLY UNTRUSTWORTHY”

NOTABLE QUOTES:

“We have also repeatedly emphasized that a party’s assertion of material facts must be supported by record references to evidence that is of a quality that would be admissible at trial...This qualitative requirement is particularly important in connection with mortgage foreclosures where the affidavits submitted in support of summary judgment are commonly signed by individuals who claim to be custodians of the lender’s business records. Thus, the information supplied by the affidavits is largely derivative because it is drawn from a business’s records, and not from the affiant’s personal observation of events.” (e.s.)

“The foundation that the custodian or qualified witness must establish is four-fold:
(1) the record was made at or near the time of the events reflected in the record by, or from information transmitted by, a person with personal knowledge of the events recorded therein;
(2) the record was kept in the course of a regularly conducted business;
(3) it was the regular practice of the business to make records of the type involved; and
(4) no lack of trustworthiness is indicated from the source of information from which the record was made or the method or circumstances under which the record was prepared.“

“Because we determine that the affidavits submitted by HSBC are inherently untrustworthy and, therefore, do not establish the foundation for admission of the attached documents as business records pursuant to M.R. Evid. 803(6), we vacate the judgment without reaching the substantive issues raised.”

“In Chase Home Finance LLC v. Higgins, 2009 ME 136, ¶ 11, 985 A.2d 508, 510-11, we stated that at a minimum, in support of any motion for summary judgment in a residential mortgage foreclosure action, the mortgage holder must include the following facts, supported by evidence of a quality that could be admissible at trial, in the statement of material facts:
•    the existence of the mortgage, including the book and page number of the mortgage, and an adequate description of the mortgaged premises, including the street address, if any;
•    properly presented proof of ownership of the mortgage note and the mortgage, including all assignments and endorsements of the note and the mortgage;
•    a breach of condition in the mortgage; •    the amount due on the mortgage note, including any reasonable attorney fees and court
costs;
•    the order of priority and any amounts that may be due to other parties in interest, including any public utility easements;
•    evidence of properly served notice of default and mortgagor’s right to cure in compliance with statutory requirements;
•    after January 1, 2010, proof of completed mediation (or waiver or default of mediation), when required, pursuant to the statewide foreclosure mediation program rules; and
•    if the homeowner has not appeared in the proceeding, a statement, with a supporting affidavit, of whether or not the defendant is in military service in accordance with the Servicemembers Civil Relief Act.”

It is, perhaps, stating the obvious that an affidavit of a custodian of business records must demonstrate that the affiant meets the requirements of M.R. Evid. 803(6)7 governing the admission of records…A business’s records kept in the course of its regularly conducted business may be admissible notwithstanding the hearsay rule if the necessary foundation is established “by the testimony of the custodian or other qualified witness.” M.R. Evid. 803(6). “A qualified witness is one who was intimately involved in the daily operation of the [business] and whose testimony showed the firsthand nature of his knowledge.”

EDITOR’S NOTE: There is no point of higher importance than that the evidence be heard and considered — and that it be tested for admissibility as evidence. This case artfully describes the process by which evidence is admitted. It also reveals the way the pretenders are avoiding the rules of evidence and getting away with it — until a court takes a close look.

The mistake in court that is replicated across the country is that lawyers, judges and pro se litigants are assuming evidence rather than going through the process of presenting it. The issue is not some technical two-step to avoid foreclosure. The issue is whether the requirements of law  have been met and therefore whether the party presenting itself as the would-be forecloser is in fact entitled to do so. Specifically, the mistake being made repeatedly is that lawyers are failing to object to affidavits that are inherently defective and failing to object to witnesses that either sign the affidavits or testify in court when they clearly do not possess the elements of a competent witness.

The reason they don’t have a competent witness is that their business records do not qualify for the business records exclusion to the hearsay rule. So they are merely presenting a warm body who tries to give the appearance of being a records custodian of records kept in the ordinary course of business and therefore carry a degree of credibility since they were not prepared for litigation.

That in fact is the opposite of what the banks have — they have only records prepared for litigation and no records that were kept in the ordinary course of business on any level, much less the chain of custody of records and knowledge, based upon actual transactions that were performed by the pretender. All the testimony and affidavits refer to transactions that did NOT involve the pretender forecloser. That is why this court, together with hundreds of courts across the country are coming to the conclusion that the affidavits are inherently defective (not credible), requiring an actual presentation of formal evidence in a trial or evidential hearing.

If the pretenders had the real goods, they would simply go forward with trials and presentation of formal evidence and the defenses and adversarial proceedings would quickly fade away as they won case after case on the evidence. But the truth is that the cases they are “winning” are without evidence and solely based upon presumptions and ignorance of the rules of evidence. Why is this important?

All this is important, because in a real trial, the pretender would have to allege and prove that it is a creditor who stands to lose money if they are not able to sell the home to mitigate their damages. Their problem is that they have no damages, the original transaction with the homeowner was fatally defective BECAUSE the pretenders wanted it to be that way and they figured they could get away with it. So far they are right. In most cases, the homeowner walks away without realizing his mortgage doesn’t exist, and the note is void, and that the obligation arising out of the funding of his loan is either paid, or the true creditor is more interested in collecting from the investment banker who sold garbage mortgage bonds than in trying to collect from individual homeowners. The fact that the true creditor doesn’t want to collect from homeowners is not a good reason to allow someone else to collect it.

Think about it. If the mortgages were valid, if the notes were enforceable, if the loans were properly underwritten, if the obligation of the homeowner was properly disclosed and linked with the investor lender — there would be no issue. In fact, there probably would be no foreclosures because the loans would have been viable and those that were not, would have been modified or settled. If the situation was “just a matter of paperwork” the paperwork would be cleaned up. But it isn’t. There are two primary ways to clean up the paperwork — go to the borrower and get a new signature or go to court and force the borrower to accept the new paperwork since the intent of the parties and the identification of the parties and the terms of transaction are clear as crystal.

The absence of any proceedings that would clean up the supposed paperwork mess gives rise to the obvious presumption that the banks, with their legions of smart lawyers, have not chosen to pursue those easy remedies. The only reason they would not choose a remedy that would clearly remove any doubt as to the validity of the loans and the truth of a default or delinquency is that they know they would lose if they had to present admissible evidence in court. In plain language they obviously know the loans are defective and paid in full and that they can’t win in court except by cheating. So they put a moral tag on it that the obligation is moral issue and that even if it is already paid off, and even if the the obligation a rose as a result of a fraudulent scheme, it should still be paid again. Is this any way to run a country?

Tags: affidavit, bailout, Bank of America, bankruptcy, borrower, business records, competency of witness, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, fraud, hearsay, HSBC, MERS, quiet title, rescission, securitization, summary judgment, TILA audit, trustee, Wells Fargo
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