A couple of months ago our local Sheriff tried to dodge the fraud in foreclosures and other mortgage instruments.  I and a few others grilled him pretty good during a lunch meeting, but he held fast.

Well Mr. Sheriff, what do you say to this, and for those who are running for his office in our county in the upcoming election, who is willing to stand and promise to do the right thing?

Besides being the right thing to do, it will also win the race!

http://www.youtube.com/watch?feature=player_embedded&v=lbp4eF0LnFI

Now we got something interesting going on....

Sometimes law is complex, nuanced, difficult.  Other times it’s black and white…you just read the words, look at the facts and the answer is unavoidable.  Such is the case with the simmering dispute over the fact that the notes that are part of nearly every residential foreclosure case are not negotiable instruments.  Oh sure, too many courts won’t take the time to consider the argument and…just yesterday I heard an appellate court argument where the judges just kept repeating the mantra, “this is a negotiable instrument” without ever doing any analysis at all and without any finding of that “fact” from the trial court.  The attorney needed to stop the appellate judge right there and say, “No Your Honor, it’s Not A Negotiable Instrument”.

Matt then goes into a rather complicated and technical discussion of what all this means.  I'll try to simplify it.

A negotiable instrument is (under the UCC Section 3) something that involves only (1) the payment of money, and (2) possibly the payment of interest.  It can be payable on demand or a specific time. 

Because it is an instrument that has no real interpretation available as to whether the terms were complied with or not (it's just about money) these can be passed around as if they were cash by simply "negotiating" (signing) the back.  You can pass a check around like this; it is a negotiable instrument because it is payable on demand and it is only an instrument for a given amount of money.

A mortgage inherently contains other conditions, such as "you will maintain insurance", "you can prepay without penalty (or with one)", "the following things can be charged to you other than principal and interest", and "the note might be accelerated (due in full) if I do (or don't do!) x, y or z."

None of these are simply the payment of money on a given schedule or upon demand, coupled with a possible payment of interest.  All involve other conditions, which make the note non-negotiable.

The reason it's not negotiable is that the formal process of assignment transfers not only the note but also the obligations of the parties, including the beneficiary -- who might have obligations.  It is therefore much more formal than something that is "negotiable".  Assignments require formalities like notaries and such, because everyone has to agree - - not just the borrower.  And if the formalities are not followed then the assignment simply never happened and title to the note in question remains with the original party.

The import of this decision, assuming it stands, is significant.  It means that the "defenses" to all the fraudclosure crap may just evaporate, as once you force recognition of all of those formalities if they didn't happen then the guy standing in front of the judge asking to steal your house fails, as he's not the right person to be making the request -- that is, he's a thief instead of a forecloser!

And once you force these institutions to come to court with true and complete documents you find that they can't -- they have played "fast and loose" with the documents, they don't have them at all, they try to cheat and forge them, and in some cases it appears they are trying to collect twice on the same instrument!

You can bet this ruling will be challenged, but there is hope so long as we have some real jurists that remain on the bench.  And as Matt explains, attempting to use these arguments "pro-se" is dangerous, but the fact remains that there is progress in this decision.

A case that I wrote about some time ago is being heard by the Florida Supreme Court:

Roman Pino loan #130133456 – $162,400 – (July 2011 satisfaction – still on the books in Jan 2012 trust report in “foreclosure” status) [3764 Mil Run Court, Greenacres, FL 33463] – BoA monthly servicing fee for non-existent mortgage $50.73

This loan, it turns out, was not just being billed for "servicing" that wasn't happening.  It also was apparently a fraudclosure -- a foreclosure in which fabricated documents were used by the bank involved to try to foreclose.

The bank got caught and attempted to avoid sanction for its behavior by withdrawing the complaint rather than face the music for the bogus documents, then re-file the case later.

"This was a case of an intentionally fraudulent document fabricated to use in a court proceeding," says former U.S. Attorney Kendall Coffey, author of the book Foreclosures in Florida.

If the Supreme Court rules against the banks, "a broad universe of mortgages could be rendered unenforceable," Coffey says. "The cost to the financial industry is difficult to estimate, but it could be substantial."

No, really?

It should be substantial when you file knowingly-bogus documents in a courtroom.  You should be prosecuted for perjury, lose your original case and face criminal sanction.

In this particular case the bank went further -- when they got caught and then re-filed, and the respondent's counsel pushed back they bought him off by filing a satisfaction, effectively giving him a free house, in an attempt to prevent judicial review of their conduct!

What the Florida Supreme Court is being asked to decide, in effect, is whether or not the courts have both the right and duty to protect and sanctity and integrity of the legal process, or whether big and powerful firms that sue under false pretense can effectively pervert that process with bogus documents and, if caught, simply "buy off" the individual cases where they get busted but continue to engage in the same egregious conduct, effectively stealing houses while occasionally "giving" one or two away to "pay off" the few who effectively challenge their activity.

The Florida Supreme Court should take a strong stand for the integrity of legal process, barring a plaintiff who files, through any other means than honest mistake, a voluntary dismissal.  This will retain the right to dismiss a case that is defective through either honest error while sending a strong signal that intentional abuse of legal process to try to steal homes (or anything else) will not be tolerated.

Well well what do we have here?

Philip A. Kramer, a Calabasas attorney at the center of a national loan modification scam, agreed to be disbarred last month.

Kramer (bar number 113969), 52, admitted to numerous counts of misconduct including collection of illegal fees, failure to return advance fees and accepting employment in states where he was not licensed to practice law. Kramer also agreed to pay $122,000 in restitution to 27 former clients as part of a stipulation accepted April 13 by the State Bar Court.

In 2011 I posted a series of articles, entitled:

Mass-Joinder Ball of String, Remember The "Mass Joinder" Lawsuits? and more on the issue of foreclosure "rescue" and "sue the lender" strategies, cautioning that it's very hard to know whether or not these various proffered strategies are legitimate or not.

It appears from the above cite that one of the lawyers involved in one of the more-popular instance of these "services" has voluntarily surrendered his law license and accepted disbarment, and in the process of doing so admitted to a number of counts of misconduct.

This case is a reminder that you need to be very careful when dealing with so-called "foreclosure mitigation" people, as the various "deals" offered that will do you no good (and at best will simply take money from you; at worst you may lose both the money AND your house!) not only come from non-attorney "sources" but in some cases actual "licensed attorneys" are involved these schemes as well.

Be safe out there.

Oh c'mon.... the conversation didn't really go something like this, did it?

"Uh, we're foreclosing in the wrong name."

"Oh.  That could be bad.  Well, let's file a correct document then."

"Uh, if we do that the homeowner's association might come after us -- it will change how much we have to pay them."

"Oh we don't want to do that."

"I know, I know!  We'll just quitclaim it after the fraudclosure foreclosure is complete!"

Left unsaid of course is that if you're foreclosing in the "wrong name" and you know you're doing it then you're intentionally misleading the court.

What do we call that again?

Business as usual, when it's our outrageously corrupt legal system, right?

Link here: http://4closurefraud.org/2012/04/24/lender-processing-services-lps-internal-email-accidentally-leaked-in-a-fraudclosure-case/

Update 4/25: It gets better -- now the law firm is trying to have the document removed from the record!  How do you spell "oops"?