It is currently up to the homeowner to forcefully and convincingly persuade a judge that the party seeking foreclosure is unrelated to the debt and that foreclosure won’t result in paying down the debt — because the proceeds of foreclosure sale, contrary to popular assumption, are not going to any owner of the debt carrying a risk of loss on that debt.
While it is possible to reveal this under current statutes, the burden is unfairly placed on the homeowner to “prove” or reveal a defense to a claim that should never have been filed in the first place.
The fact that the current statutory scheme allows the false claimants to get to second base by fabricating and forging documents is an obvious defect in our current system of laws.
I recently received an email from a contributing reader who was complaining that judges are to blame for the foreclosure mess.
Correction. While judges might share some blame, it was the investment banks who did this, and their control over state legislatures and Congress has fostered an environment of moral hazard.
If you go to a doctor and tell him/her that your left foot is hurting don’t be surprised if he/she fails to diagnose brain cancer. Maybe the doctor should have or could have discovered brain cancer but he/she had no reason to look.
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In court the judge is there to call balls and strikes. If a homeowner fails to present a viable defense the court is required to enter judgment for the party claiming foreclosure — even if the judge suspects that something is wrong. But is is also true that a judge is supposed to use their own eyes and ears and to determine if there is at least facial validity to the documents being presented. And it’s true that many judges came to the bench with biases that work against homeowners.
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But I can say from personal experience that while some cases are lost due to lazy, biased or even corrupt judges, the primary reason a homeowner loses is that both lawyers and pro se litigants have failed to persuasively rebut the presumption arising from facially valid documents.
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Both homeowners and lawyers often fail to adequately prepare before a hearing and instead focus their minds on why they are right without rehearsing how they will convince a judge that each step is subject to a viable challenge.
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When you go to court the case stops being about right and wrong and becomes a contest of who can be more persuasive. Instead of viewing the judge as an adversary litigants should view the judge as a jury who has no stake in the outcome — because most of them don’t.
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Your real beef is with the statutes that allow legal presumptions to arise from apparently facially valid documents and rules of civil procedure that allow a fake claimant with a fake claim to get to second base before the homeowner can even begin to mount a credible defense. By that time the foreclosure mill has virtually full control over the case narrative.
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While facial validity can and should be attacked, the statutes should be strengthened to assure that the claimant in foreclosure is actually a creditor who has paid value for the debt or has been authorized by an identified creditor who owns the debt.
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The statutes should explicitly require an evidentiary hearing similar to probable cause in which the claimant comes forward with a history of debt ownership and transfer and possession of documents. Nearly all foreclosures should and would fail, often with prejudice, at such a hearing.
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Such a statutory change would maintain the burden of proof on the claimant and prevent shifting the burden of proof to the homeowner who has minimal access to actual relevant data concerning the loan. Such statutory changes would require servicers to disclosure the party to whom they render payment after collection from a homeowner, and whether such party is yet another conduit or servicer and if so, for whom.
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Additional statutory changes should include provisions from the FDCPA and RESPA where a wrongful foreclosure results in an award of compensatory damages including emotional distress, punitive damages, sanctions, and required orders to correct the chain of title and cancel the instruments that were recorded in derogation of title.
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Further, a statutory change and require the claimant itself to be clearly identified would go a long way to curing the current and past tidal wave of wrongful foreclosures. The claimant should be identified as being both the creditor who owns the debt and the party who would be legally liable for courts, costs, sanctions or other relief ordered by a court in favor of the homeowner.
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Current statutes provide the raw material for such remedies but place an undue burden on homeowners who have no access to the information that is being against them and in violation of law.
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But it is currently up to the homeowner to forcefully and convincingly persuade a judge that the party seeking foreclosure is unrelated to the debt and that foreclosure won’t result in paying down the debt — because the proceeds of foreclosure sale, contrary to popular assumption, are not going to any owner of the debt carrying a risk of loss on that debt.
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