The Queer World of Foreclosures Coupled with Fake claims of Servicing

A Sarasota Judgment That Shook the Foreclosure Machine

A 2020 Sarasota, Florida judgment shows the deep gap between foreclosure fantasy and reality.

The case: U.S. Bank, as Trustee for the LSF11 Master Participation Trust v. Cheri Melchione, Case No. 2011 CA 5724 NC (12th Circuit Court, Sarasota County, Florida).

The plaintiff—LSF11 Master Participation Trust—was no more real than LSF9, its infamous predecessor. The court entered final judgment in favor of the homeowner, who had never missed a single payment.

Why the Homeowner Won

The judge zeroed in on the “Payment History,” a cornerstone of foreclosure litigation.

• Entries had been reversed with no explanation.

• The servicer’s robo-witness could not clarify who created the entries.

• The supposed servicer, Nationwide, admitted it did not receive, process, or disburse payments.

👉 The judge concluded: the Payment History had no foundation and could not be trusted.

This case confirms what foreclosure defense has argued for years:

• Servicers are often nominees, not actual servicers.

• Payment histories are litigation printouts, not true business records.

• Robo-witnesses testify without direct knowledge.

The Bigger Picture: Sham Servicers and Trustees

This decision highlights the fictional roles in securitized foreclosures:

• Servicers like Nationwide: nominal parties with no servicing duties.

• Trustees like U.S. Bank: never assigned real trust duties or powers.

• MERS and substitute trustees: placeholders for entities seeking fees, not restitution.

Without homeowner challenges, judgments would routinely be entered based on debts that don’t exist and payments never missed.

What Happens Now?

The ruling raises an unresolved question:

• Can law firms and “servicers” continue to make false claims to collect or enforce nonexistent debts after a final judgment for the homeowner?

The judgment didn’t go as far as issuing a declaratory statement on that point. But it leaves the door open for future challenges.

Bankruptcy Angle: Capping Credit Bids

Another development adds to the conversation. A recent bankruptcy court decision capped the amount of any credit bid at fair market value.

Why does this matter?

• Foreclosure auctions are supposed to maximize proceeds for creditors.

• Allowing inflated credit bids eliminates competition, cheats creditors, and burdens borrowers with inflated deficiency judgments.

• By capping bids, the process is more transparent and equitable.

This ruling could expand options in:

• Chapter 11 bankruptcy (most common),

• Potentially Chapter 13 or Chapter 7 cases.

It’s a powerful tool to explore for homeowners in bankruptcy.

Key Takeaways

• Homeowner wins happen. Courts are beginning to see through fabricated payment histories and sham servicers.

• Payment records matter. If a servicer can’t prove who created them, they’re worthless in court.

• Bankruptcy strategy is evolving. Capping credit bids could reshape foreclosure auctions in favor of homeowners and real creditors.

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Nobody paid me to write this. I am self-funded, supported only by donations. My mission is to stop foreclosures and other collection efforts against homeowners and consumers without proof of loss. If you want to support this effort please click on this link and donate as much as you feel you can afford.

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Neil F Garfield, MBA, JD, 75, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.

But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more. In addition, although currently rare, it can also result in your homestead being free and clear of any mortgage lien that you contested. (No Guarantee).

Yes you DO need a lawyer.
If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

Please visit www.lendinglies.com for more information.

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Tags: bankruptcy, foreclosure defense
Posted in Bankruptcy, foreclosure defenses, foreclosure mill, Uncategorized |