No Mediation Without True Lender

EDITOR’S NOTE: It wasn’t so long ago that I had to practically pulled teeth to get her attorneys to agree with the proposition that nearly all of the foreclosures were fake.  Matt Wiedner seems to have his finger on the pulse of what is really happening. I think the most important feature of this article is that mediation is a farce unless the real parties in interest are in the room. It’s really the same issue as we encounter in litigation: STANDING. The fact remains that the great mortgage sting leading to the great recession is still very much in progress. It starts with the servicing companies along with other intermediaries that have no financial interest in either the loan or any mortgage bond purporting to claim ownership of the loan. They have a vested interest in making certain that the home goes all the way through the process of foreclosure because for them that is where the money is. By the time they are done with the foreclosure process they have imposed so many fees, costs and surcharges that there is nothing left to pay the investors who advanced money into a pool from which some mortgages were funded.

When these intermediaries intervene in the process of foreclosure, modification, short sale, or mediation they are merely creating the appearance of good faith when in fact they have no business being involved at all. They continue to waste the time of everyone involved in the process. They are successful in creating the illusion that they are the right people to conduct negotiations or litigation. In fact, their only interest lies in obstructing the process long enough to impose fees that eliminate any value of the loan and eliminate any possibility  of a conclusion in which the homeowner is able to achieve a reasonable settlement with the real lender.

Investors, borrowers, and attorneys should aggressively act to enforce the obligation of the party alleging that it is the lender to prove that it is in fact the lender. You can start with a simple question to the company that services the mortgage. To whom have you been paying the borrower’s monthly loan payments? Then ask for proof. Chances are they will do almost anything to avoid answering that question. It is is a simple question. I think that there are many judges that would find it difficult to understand why any “lender” or servicing entity objected to answering that question. It goes to the heart of jurisdiction and to the heart of the illusion which thus far has been successfully created in the minds of most judges and many lawyers.

Matt Weidner Blog
Today, July 28, 2010, 2 hours ago

Fight The Mortgage Servicers Who Bring These Foreclosure Actions
Today, July 28, 2010, 2 hours ago | Matthew D. Weidner, Esq.
The vast majority of foreclosure cases are brought not by the real
parties that have any interest in the outcome of the litigation, but
by nominal, shell Plaintiffs that have been propped up by the
investors or the real parties in interest to pursue the litigation.
Because the vast majority of foreclosures go undefended, this
important point is missed in the vast majority of cases.  While it may
be missed in cases, the consequences of this phenomena are profound
and broad reaching.

The failure to identify what parties are really at risk in litigation
prevents courts, policy makers, investors and the general public from
knowing who stands to win or lose in litigation.  Concealing the
identity of the real party in interest allows those who made bad
decisions to shirk their responsibility in the litigation, a fact that
is more important when their conduct could very well make them
complicit in creating the situation that led to the litigation.  On a
very practical level, litigation pursued by servicers probably
prohibits effective settlement or mediation discussions because they
lack the risk of loss that forces effective resolutions.  The
consequences of this are played out hundreds of thousands of times a
day as homeowners try futilely to negotiate a short sale or
modification with the lender.  This is especially important now that
circuits across the state are rolling out mediation programs.

FORECLOSURE MEDIATION IS NOT GOING TO WORK UNLESS THE REAL PARTIES IN
INTEREST ARE IN THE COURTROOM

The fact that mediations are not going to work until we have real
players at the table will be borne out in the months to come.
Certainly borrowers will share some of the blame for not actively
participating in the mediation and settlement discussions, but at the
end of the day, another bank owned property is a loss for all parties
involved….there are too many of these properties already.

The key to addressing this problem is to first attack the Plaintiff’s
capacity.  The first part of the attack is the fact that most
Plaintiffs are never properly identified in the lawsuit.  Courts must
begin to demand knowing just exactly where this company comes from
that is bringing this action.  Courts must begin to ask, “Who am I
about to grant this $250,000 judgment to?”  then not let the case
proceed until they have a very clear answer to that question.

Our State Division of Corporations or Department of Financial Services
must begin to demand registration of all these nominal and real
plaintiffs.  Specific laws are already on the books that demand
registration of foreign corporations and of all trusts, but these
registration requirements are being totally ignored.

OUR STATE IS IGNORING MILLIONS OF DOLLARS IN TAX REVENUE AND FAILING
TO PROVIDE APPROPRIATE REGULATORY OVERSIGHT BY IGNORING THESE LAWS.

Once the nominal plaintiff is properly identified, it’s time to demand
proof that they have the authority to maintain the litigation on
behalf of the real party in interest.  This too is addressed by the
capacity argument, but you must also be thinking about this in the
context of preparing discovery, because the proof demanded will come
in the form of the Plaintiffs responses to the discovery requests.

I have previously attached my capacity Motion to Dismiss and I can
tell you that when the facts support this Motion, it is nearly
impossible for the Plaintiffs to wiggle their way around.  Even the
most bank-friendly judge will have problems denying this Motion and if
the motion is denied, it sets up a very significant summary judgment
or appeal issue. I’m going to work on this motion again to put some
more recent circuit court cases into it, but as I’ve stated before…

CAPACITY IS A CASE KILLER!

Keep up the good fight!

—
Jake Naumer  Union Capital
Licensed Financial Advisor
3187 Morgan Ford
St Louis Missouri 63116
314 961 7600
Fax Voice Mail 314 754 9086

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