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News
& Updates
TRO granted in Fairfax County staying eviction after foreclosure sale based on homeowner's right to cure the default
August 2010
Update:
the TRO has now been converted to a preliminary injunction, meaning the
homeowners cannot be evicted at least until the case is over.
Homeowner was in the process of modifying his loan, when the bank
foreclosed on him anyway. Servicer Central Mortgage Co. appointed
a Substitute Trustee to act on its behalf. But the sale, which
went to the "noteholder," resulted in a transfer of the property to
HSBC Bank, not the entity on whose behalf the Sub Trustee was acting
(Central).
Homeowner
challenged the sale and made two arguments: first, the sale is
fraudulent and otherwise improper because HSBC did not appoint the
Substitute Trustee and because there was no evidence (even by
recitation) of HSBC's ownership of the note. Second, Homeowner
alleged violations of his right to cure the default and interference of
his right to cure in the form of the bank inducing him to do nothing
but wait for a loan mod decision.
The judge did not
reach the technical defense of HSBC's standing/right-to-enforce
the obligation, but did see a problem with the bank's actions with
respect to Homeowner's right to cure.
If your bank or
mortgage servicer tells you they will not foreclose during loan
modification negotiations, but do foreclose anyway behind your back,
you may have a cause of action against them for violations of your
right to cure the default, including your right to obtain a decision on
your loan modification application before your home can be sold in
foreclosure.
FIRST FORECLOSURE
DEFENSE VICTORY IN VIRGINIA BASED ON STANDING/CAPACITY: debtor defeats
pretender lender’s lift-stay motion.
June 2010
In
2005, Debtor executed and delivered to “Synergy One” a fixed-rate
promissory note in the principal sum of about $290K secured by a Deed
of Trust on real property located in Manassas, VA. The Deed of Trust
listed Synergy-One as the “Lender,” and Mortgage Electronic
Registration Systems, Inc. (“MERS”) as “the beneficiary” of the Deed of
Trust “solely as nominee for Lender and Lender’s successors and
assigns.”
During the pendency of a non-judicial foreclosure
commenced by SunTrust Mortgage, Debtor filed for Chapter 7 bankruptcy,
and then retained us as counsel. After checking with Fannie Mae and
Freddie Mac, our office ascertained that the loan was (at least at some
point) owned by Fannie. Suntrust then moved for lift-stay relief in the
bankruptcy court to continue with its (bogus) foreclosure. Debtor,
through counsel, opposed the motion on the grounds that SunTrust’s
motion contained no evidence that SunTrust had the right to enforce the
lien, that SunTrust was not the “real party in interest” as required by
the federal rules of procedure, and that the debt was “unenforceable
against the debtor and property of the debtor, under any agreement or
applicable law.” Additionally, Debtor’s counsel introduced into
evidence a copy of the note that appeared different than the copy
submitted by SunTrust and its attorneys (it contained an extra blank
endorsement). After a hearing on May 5, 2010, the judge ruled from the
bench and agreed with Debtor that SunTrust had not established it was
the “real party in interest.” The judge, however, gave SunTrust a
chance to establish itself as a “lender” by setting a trial for June 2,
2010, whereby SunTrust would have a chance to produce the original note
and bring in other witnesses, including “documents custodian.”
On
May 26, 2010, our office filed its list of witnesses indicating that we
would put on the stand SunTrust’s and Synergy-One officials whose
signatures appeared on purported endorsements on the copies of the
Note. On
May 27, 2010, after seeing Debtor’s list of witnesses, SunTrust
withdrew its lift-stay motion!
So the stay remained in place and SunTrust can’t foreclose. What’s
more, we have now turned the pending non-judicial foreclosure into a
judicial one by filing an adversary proceeding (a complaint challenging
the pending foreclosure) in the bankruptcy court.
Another
Recent "Standing/Capacity" Victory in Virginia
June 2010
Homeowner
filed for Chapter 7 in the U.S. Bankruptcy Court for the Eastern
District of Virginia. A pretender lender (Chase) filed a motion to lift
stay to be able to proceed with its bogus foreclosure. Debtor then
filed an answer and an opposition to the motion, asserting about 10
defenses and arguing that Chase did not have the right to enforce the
subject obligation.
Chase in response filed an affidavit by an
FDIC official alleging that Chase got the subject loan by operation of
law. The problem was, the affidavit did not establish that the official
had any personal knowledge of the events he was testifying to. Debtor
challenged the affidavit on evidentiary grounds.
On the day of
the hearing, Chase's attorney said "your honor, we are not prepared to
address Debtor's objections; we request a continuance." The case was
continued beyond the date the automatic stay would normally last (60
days), so the continuance was tantamount to a denial of Chase's motion.
If you are about to lose your home to some unknown entity (such as a
securitization trust or a "Some Bank as Trustee"),
whith
which you never signed any contract or loan documents, and you are in a
nonjudicial foreclosure state, such as Virginia, where the
pretender-lender need not prove in court their right to
enforce
the underlying obligation, use bankruptcy if your situation allows.
In bankruptcy, THEY will have to come to court and ask the
judge
to allow them to foreclose. That's when you can just sit back and poke
holes in their case, asserting your defenses and demonstrating to the
judge that they cannot prove their puported right to foreclose.
HERE IS WHY IT IS OFTEN
IMPOSSIBLE TO GET
A LOAN MOD: Government gives our money to banks, prividing
incentives to
foreclose/short-sell instead of modify loans.
WELCOME TO COMMUNISM: While some financial mills took unjustified risks and others flat-out
duped the public into buying toxic loans designed to fail and make the
banks money (Goldman Sachs, anyone?), taxpayers are now picking up the
tab. The mistakes and ploys of some are now being dumped on the
entire nation. If that is not communism, I don't know what is.
If courts do not stop this (by not letting the banks have yet
another windfall of foreclosed properties), no one will.
Foreclosure:
Debtors successfully raise standing issues against pretender-lenders in
bankrupcty...more>
Immigration:
an
Ethiopian citizen gets an INA 209(c) waiver and a green card after 10
years of immigration struggles and a prior deportation order...more>
