Monthly Archives: August 2014

What Homeowners Must Know About “Withrawing Reference” in Bankruptcy Proceeding

30 Saturday Aug 2014

Posted by in Bankruptcy, Case Laws, Case Study, Federal Court, Foreclosure Defense, Judicial States, Litigation Strategies, Non-Judicial States, Pleadings, Pro Se Litigation, Your Legal Rights

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This post is designed to inform homeowners about withrawing reference in Bankruptcy proceedings. Simply put, when a homeowner is already pursing its foreclosure case in the Federal Court, and later files an emergency chapter 13 bankruptcy to protect his/her home from foreclosure. The homeowner in certain cases may opt to pursue the lender via bankruptcy adversary proceeding which is a seperate proceeding from the Chapter 13 automatic stay protection. What usually happens is that the homeowner may opt to use same causes of action as used in the Federal case, to pursue the Bankruptcy adversary proceeding. When this happens, the lender’s attorneys usually files what is known as “Motion for Withdrawal of reference” citing that the causes of actions in Chapter 13 adversary proceedings were the same as the ones in the Federal case, therefore that it would be better to withdraw the references in the Bankruptcy proceeding and remind them back to the Federal proceeding as that would serve best for judicial economy and to avoid multiple payment of damages from two different jusisdictions of the same material facts of causes of action. The Bankruptcy judges with their descretions can then decide, if the causes of action listed in the Bankruptcy proceeding would require the withdrawal of the either “Some of the causes of action or the Entire Adversary proceeding” as filed, since those causes of actions were already included in the Federal proceeding. Or whether some causes of actions in the Adversary proceeding were different and thus require that they remain in the Adversary proceeding for the case to continue in the Bankruptcy forum.

The number of reported cases dealing with motions for withdrawal of the reference appears to be on the rise. Practitioners need to be cognizant of this option and make an early determination as to whether to pursue withdrawal of the reference from the bankruptcy court under 28 U.S.C. §157(d). A well-considered motion to withdraw the reference is an important strategy that may result in a more favorable outcome for targets of bankruptcy litigation.

The district court may withdraw, in whole or in part, any case or proceeding referred under this section, on its own motion or on timely motion of any party, for cause shown. The district court shall, on timely motion of a party, so withdraw a proceeding if the court determines that resolution of the proceeding requires consideration of both title 11 and other laws of the United States regulating organizations or activities affecting interstate commerce. In an early case interpreting this statute, the district court in the Southern District of New York examined the historical underpinnings of §157(d) (including a review of Northern Pipeline) and stated that the statute “reflects Congress’s perception that specialized courts should be limited in their control over matters outside their areas of expertise.” American Tel. & Tel. Co. v. Chateaugay Corp., 88 B.R. 582, 583 (S.D.N.Y. 1988).

Section 157(d) has two branches. It vests discretionary (also described as permissive) authority with the district court to withdraw the reference upon a showing of “cause” by the filing of a timely motion. It also mandates the withdrawal of the reference as to proceedings that involve non-title 11 federal laws that regulate or affect interstate commerce or organizations.

A motion to withdraw the reference is filed with the bankruptcy clerk but is decided by the district court in the district where the bankruptcy case arose pursuant to Rule 5011(a). If the district court withdraws the reference, the bankruptcy court is stripped of jurisdiction over the matters for which the reference is withdrawn. Patterson v. Williamson, 153 B.R. 32, 33 (E.D. Va. 1993). Section 157(d) also entitles the district court to withdraw the reference sua sponte, but does not relieve it from the requirement that cause be present for sua sponte permissive withdrawal.

The first step in this inquiry is to determine whether there are nonbankruptcy federal laws at issue in the proceedings. Then it is necessary to determine whether to proceed under discretionary or mandatory withdrawal standards, or both.

Timeliness Is Key
Early recognition of the option of seeking withdrawal of the reference is extremely important because the motion must be “timely” under either a discretionary or mandatory standard. A motion is timely, if brought as promptly as possible, in light of the developments in the bankruptcy proceeding or at the first opportunity. Hupp v. Educational Credit Management Corp., No. 07CV1232 WQH (NLS), 2007 WL 2703151, at *3 (D. Cal. Sept. 13, 2007). A motion to withdraw the reference may be untimely when a significant amount of time has passed since the moving party had notice of the grounds for withdrawing the reference or where withdrawal would have an adverse effect on judicial economy. Id.

In an often-cited case, a district court ruled that a motion to withdraw the reference was untimely when it was filed five months after the bankruptcy petition and only one month after the filed adversary complaint. In re Mahlmann, 149 BR 866, 870 (N.D. Ill. 1993). The court noted that the “the key issue is when the moving party was first aware nonbankruptcy federal laws must be dealt with in resolving the case.” Id. at 869. Of particular significance was the fact that the federal claims existed for some time before the bankruptcy, as evidenced by the movant’s civil action against the debtor related to those claims, which was filed more than eight months before the bankruptcy. Id. at 870. One court has even held that a motion to withdraw the reference should have been filed contemporaneously with the defendant’s answer to an adversary complaint because the presence of “other laws” requiring the withdrawal of the reference was known at that time. See Securities Group 1980, 89 B.R. 192, 194 (M.D. Fla. 1988) (emphasis added). The failure to file constituted a waiver of the right to do so. Id.

The timing of the motion may also be affected by whether a jury demand is being made. A motion to withdraw the reference should generally be filed at the time of an answer containing a jury demand to avoid the outcome in In re HA-LO Industries, where the motion was deemed untimely when the proponent, who filed a jury demand on July 24, 2003, did not move to withdraw the reference until Oct. 28, 2004. 326 B.R. 116 (Bankr. D. Ill. 2005).

While some courts have focused on whether prejudice exists (see In re The Singer Co. N.V., No. 01CV0165 (WHP)), a movant cannot rely on that soft of a standard. A motion to withdraw the reference should be filed as soon as possible after the issues are known and before the bankruptcy court has dealt with those issues.

Permissive Withdrawal
Assuming the motion is timely filed, what factors will persuade a district court to exercise its discretionary authority to grant permissive withdrawal? The definition of “cause” has been left to the courts to decipher; the legislative history is of little help.

An early articulation of the standard for determining cause directed the district court to consider the goals of uniformity in the administration of bankruptcy cases, reduce forum-shopping, foster the economical use of the parties’ resources and expedite the bankruptcy process.

Holland Am. Ins. Co. v. Succession of Roy, 777 F.2d 992, 999 (5th Cir. 1985). The Holland case also cautioned that the district court “must keep one eye cocked toward the decision of the Supreme Court in [Northern Pipeline]… Whatever the precise teaching of [Northern Pipeline,] it holds, at a minimum, that Article I bankruptcy courts may not have original jurisdiction over adversary proceedings that do not intimately involve the debtor-creditor relationship and rest solely in issues of state law.”

More recent cases have added to the Holland factors with a focus on whether the proceeding is core or noncore and whether there is a right to a jury trial, while keeping an eye on judicial economy. In re County Seat Stores Inc., No. 01 CIV. 2966 (JGK), 2002 WL 141875, at *4 (S.D.N.Y. Jan. 31, 2002.) The presence of noncore issues are often central to the district court’s consideration of a motion to withdraw the reference and relates closely to judicial economy. In re Enron Corp., 317 B.R. 232, 234 (S.D.N.Y. 2004). Whether an adversary proceeding sought to be withdrawn is core or noncore has been held to be “the most important factor.” In re Coe-Truman Technologies Inc., 214 B.R. 183, 187 (N.D. Ill. 1997). While §157(b)(1) permits bankruptcy judges to hear and determine core proceedings, §157(c)(1) requires a de novo review of such matters by the district court, and only it can enter a final order. Thus, judicial economy is best served by having the district court first determine the issue.

The fact that the bankruptcy court cannot conduct a jury trial on a noncore matter is also sufficient cause for permissive withdrawal. In re Orion Pictures Corp., 4 F.3d 1095, 1101 (2d Cir. 1993). See also In re Daewoo Motor America Inc., 302 B.R. 308, 315 (C.D. Cal. 2003) (“Thus, where there is a right to jury trial in a noncore matter, that factor may weigh heavily in favor of withdrawing the reference so as to give the parties an opportunity for a jury trial in the district court.”). Where an insurance dispute was “entirely severable from the bankruptcy proceedings” and said dispute involved noncore issues, the district court withdrew the reference. In re Comdisco Inc., No. 04 C 5570, 2004 WL 2674398, at *2 (N.D. Ill. Oct. 15, 2004).1

While cause is not defined in the statute and is a flexible concept, it is not an “empty requirement.” Holmes v. Grubman, 315 F. Supp. 2d 1376, 1381 (M.D. Ga. 2004) (reciting same factors previously described as being applicable in Eleventh Circuit). The moving party bears the burden of demonstrating that both the timeliness and cause requirements of §157(d) have been met. In re Almac’s Inc., 202 B.R. 648, 654 (D. R.I. 1996).

Mandatory Withdrawal
Most courts applying the mandatory withdrawal standard employ a “substantial and material test,” but this phrase has been given a variety of meanings. Some courts utilize this standard in interpreting the term “consideration” under §157(d) and find that mandatory withdrawal is required only if the proceedings cannot be resolved without “substantial and material consideration of nonbankruptcy laws.” In re G-I Holdings Inc., 295 B.R. 211, 221 (D. N.J. 2003).

The Seventh Circuit stated that the substantial and material test really refers to the necessary extent of interpretation of the non-title 11 statute or the court’s necessary analysis of “significant open and unresolved issues” and not the mere application of it. In the Matter of Vicars Ins. Agency Inc., 96 F.3d 949, 954 (7th Cir. 1996). Another court has found the substantial and material test to have been satisfied where the nonbankruptcy federal law at issue (domestic patent law) is central to the outcome of the case. In re Singer Co., 01 Civ. 0165 (WHP), 2002 U.S. Dist. LEXIS 2629, at *8 (S.D.N.Y. Feb. 20, 2002). On the other hand, a district court recently denied a motion to withdraw the reference where the issues of federal law presented (FDCPA and RESPA claims) were routinely considered in bankruptcy proceedings and therefore did not require the court’s substantial and material consideration. Prince v. Countrywide Home Loans, No. 1:08-0058, 2008 WL 4572545, at *2 (M.D. Tenn. Oct. 8, 2008).

The District Court for the Southern District of New York appears to use various iterations of the test. In In re Enron Corp., the court looked to whether the examination of the federal law in question would be more than de minimis in deciding to withdraw the reference. No. 04 Civ. 8177 (RCC), 2004 WL 2711101 at *4 (S.D.N.Y. Nov. 23, 2004). In another case, mandatory withdrawal was warranted where a nonbankruptcy federal statute “arguably conflicts” with the Bankruptcy Code. In re Cablevision S.A., 315 B.R. 818, 821 (S.D.N.Y. 2004). This court has also held that “novel or unsettled questions of nonbankruptcy law” do not need to be present to permit the district court to withdraw the reference. In re Enron Corp., 388 B.R. 131, 139 (S.D.N.Y. 2008). While withdrawal is not mandated when consideration of non-Code law “entails only the straightforward application of settled law to the facts of a particular case,” it is required when a significant interpretation of non-Code statute is needed, when a non-Code issue dominates, or when nonbankruptcy federal law governing the case significantly and materially conflicts with relevant bankruptcy law. In re Chateaugay Corp., 193 B.R. 669, 673 (S.D.N.Y. 1996).

As shown by the foregoing, the substantial and material test can have different meanings. The case most likely to lead to withdrawal of the reference under the mandatory withdrawal provision of §157(d) would involve a non-title 11 federal issue that is central to the determination of the case, not regularly ruled on by bankruptcy courts, and presents either an undecided issue under the non-title 11 law or conflicts with bankruptcy policies.

Conclusion
The statutory resolution under §157(d) to the Northern Pipeline constitutional crisis is less than satisfactory because it leaves much uncertainty as to the jurisdictional limits of bankruptcy courts. Uncertainty is inherent in the absence of a clear definition of “cause” and the “substantial and material” overlay attributed to the mandatory withdrawal standard. We can say that timeliness of the motion is critical and that there is much room for advocacy.

The nonanalytical factors associated with motions to withdraw the reference should be recognized but overcome and a careful judgment made as to whether such a motion is likely to succeed. Contrary to initial inclinations and depending on the issues, the bankruptcy court may be as or better equipped than the district court to decide even a noncore issue. The district court should not be concerned about taking all or part of a case from the bankruptcy court, and the bankruptcy court should not be concerned that §157(d) permits or requires a withdrawal of the reference.

1 Interestingly, the same court ruled seven months earlier that, despite the fact that a state law insurance question at issue was noncore, withdrawing the reference was not appropriate because judicial economy and efficiency actually would have been hindered by the withdrawal. In re HA 2003 Inc., No. 3 C 9008, 2004 WL 609799, at *3 (N.D. Ill. March 22, 2004).

When Homeowner’s good faith attempts to amicably work with the Bank in order to resolve the issue fails;

Home owners should wake up TODAY! before it’s too late by mustering enough courage for “Pro Se” Litigation (Self Representation – Do it Yourself) against the Lender – for Mortgage Fraud and other State and Federal law violations using foreclosure defense package found at http://www.fightforeclosure.net “Pro Se” litigation will allow Homeowners to preserved their home equity, saves Attorneys fees by doing it “Pro Se” and pursuing a litigation for Mortgage Fraud, Unjust Enrichment, Quiet Title and Slander of Title; among other causes of action. This option allow the homeowner to stay in their home for 3-5 years for FREE without making a red cent in mortgage payment, until the “Pretender Lender” loses a fortune in litigation costs to high priced Attorneys which will force the “Pretender Lender” to early settlement in order to modify the loan; reducing principal and interest in order to arrive at a decent figure of the monthly amount the struggling homeowner could afford to pay.

If you find yourself in an unfortunate situation of losing or about to lose your home to wrongful fraudulent foreclosure, and need a complete package that will show you step-by-step litigation solutions helping you challenge these fraudsters and ultimately saving your home from foreclosure either through loan modification or “Pro Se” litigation visit: http://www.fightforeclosure.net

What Nevada Homeowners Needs to Know About Removal of Cases to the Federal Court

30 Saturday Aug 2014

Posted by in Banks and Lenders, Case Laws, Case Study, Federal Court, Foreclosure Defense, Judicial States, Non-Judicial States, Pro Se Litigation, Your Legal Rights

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A 2013 Nevada Supreme Court Certification created a legal dilemma for the Banks and purchasers of deeds of trust.

Removal to U.S. District court  may not be an option in residential wrongful foreclosure actions for banks and other purchasers of trust deeds, and their eviction counterparts, after the Nevada Supreme Court’s recent en banc opinion in Chapman v. Deutsche Bank Nat’l Trust Co., 129 Nev. Adv. Op. 34 (May 30, 2013).

Typically, in Nevada, when a residential borrower defaults, the mortgage servicer will initiate a nonjudicial foreclosure. After completing Nevada’s mandatory foreclosure mediation program, the nonjudical foreclosure will proceed to a trustee’s sale. Often, borrowers will continue to improperly occupy the property, forcing the purchaser at the trustee’s sale (typically the bank or servicer) to begin eviction proceedings in state justice court. In response, and in an effort to stay eviction proceedings, borrowers will often file a separate lawsuit in state district court for wrongful foreclosure/quiet title, among other claims.

At this point, if the defendant purchaser of the property can establish diversity or federal question jurisdiction, it will usually seek removal of the borrower’s lawsuit to U.S. District court. The purchaser’s eviction proceedings remain in state justice court and are either completed before the borrower’s lawsuit is adjudicated or the eviction proceedings are stayed pending the outcome of the lawsuit in U.S. District court. In any event, a purchaser could at least rest assured that its lawsuit would proceed in U.S. District court and not be remanded to state court.

Chapman has changed all of that in that it significantly impairs the federal court removal option under this typical scenario. Accordingly, banks and other purchasers of trust deeds will have to alter how they deal with evictions and nonjudicial foreclosures in Nevada to reduce Chapman’s affect.

Chapman is the result of  two questions certified to the Nevada Supreme Court by the Ninth Circuit Court of Appeals in Chapman v. Deutsche Bank Nat’l Trust Co., 651 F.3d 1039 (9th Cir. 2011). The Ninth Circuit asked the Nevada Supreme Court:

  1. Is a quiet title action under Nevada Revised Statutes § 40.010, which is premised on an allegedly invalid trustee’s sale under Nevada Revised Statutes § 107.080(5)(a), properly characterized under Nevada law as a proceeding in personam, in rem, or quasi in rem?
  2. Is an unlawful detainer action under Nevada Revised Statutes § 40.255(1)(c) properly characterized under Nevada law as a proceeding in personam, in rem, or quasi in rem?

Id. at 1048.

The Nevada Supreme Court answered these questions by determining that eviction and quiet title actions are both properly characterized as proceedings involving a property interest. To be precise, the Court chose not to make a distinction between in rem and quasi in rem proceedings, but held that eviction and quiet title actions are not in personam. At first glance, this holding seems rather benign, but the practical effects are far reaching because of the typical scenario explained above. If the bank first files an eviction proceeding, and while the eviction process is still open, the borrower files a separate action in state court contesting ownership to the property, under Chapman, removal of the borrower’s action to U.S. District court is prevented under a doctrine known as the prior exclusive jurisdiction doctrine.

Under this doctrine, “when one court is exercising in rem jurisdiction over a res, a second court will not assume in rem jurisdiction over the same res.” Marshall v. Marshall, 547 U.S. 293, 311 (2006). Accordingly, where parallel state and federal court proceedings seek to “‘determine interests in specific property as against the whole world’ (in rem), or where ‘the parties’ interests in the property … serve as the basis of the jurisdiction’ for the parallel proceedings (quasi in rem), then ‘the doctrine of prior exclusive jurisdiction fully applies.’” Chapman, 651 F.3d at 1044 (internal citations omitted).

Hence, if an eviction proceeding was first filed and remains open while a second quiet title lawsuit is filed by a borrower, removal of the quiet title action is now precluded in Nevada by the prior exclusive jurisdiction doctrine. If one does remove the second matter, a swift and likely successful motion to remand can now be expected. In order to avoid this situation, and to protect a party’s ability to litigate in U.S. District court, there are a few options worth considering.

First, if a bank has an ongoing eviction proceeding in state justice court, and then is served with a quiet title action in state district court, a trust deed purchaser may move on an expedited basis to transfer the eviction proceeding to where the quiet title action was filed, and then remove to U.S. District court. Because the right to remove is governed by statute, 28 U.S.C. §1441(a), and in the normal case a defendant has only 30 days to remove after being served, 28 U.S.C. § 1446(b), the bank will need to be extra vigilant in moving to transfer the eviction proceeding to state district court and then timely remove the case to U.S. District court. A second option is to voluntarily dismiss the eviction action without prejudice,  then remove the quite title proceeding to U.S. District court. The bank can then move in the U.S. District court to evict. In the appropriate case, a trust deed purchaser can initiate a quiet title action in U.S. District court and seek injunctive relief to remove a borrower from the trustee deed purchaser’s property.

The Chapman case will certainly change the way the financial services industry and other purchasers of trust deeds handle eviction proceedings in Nevada. Chapman does not preclude removal, but banks and other purchasers of trust deeds will have to carefully consider the timing and method by which it removes borrowers from property that has been foreclosed upon.

When Homeowner’s good faith attempts to amicably work with the Bank in order to resolve the issue fails;

Home owners should wake up TODAY! before it’s too late by mustering enough courage for “Pro Se” Litigation (Self Representation – Do it Yourself) against the Lender – for Mortgage Fraud and other State and Federal law violations using foreclosure defense package found at http://www.fightforeclosure.net “Pro Se” litigation will allow Homeowners to preserved their home equity, saves Attorneys fees by doing it “Pro Se” and pursuing a litigation for Mortgage Fraud, Unjust Enrichment, Quiet Title and Slander of Title; among other causes of action. This option allow the homeowner to stay in their home for 3-5 years for FREE without making a red cent in mortgage payment, until the “Pretender Lender” loses a fortune in litigation costs to high priced Attorneys which will force the “Pretender Lender” to early settlement in order to modify the loan; reducing principal and interest in order to arrive at a decent figure of the monthly amount the struggling homeowner could afford to pay.

If you find yourself in an unfortunate situation of losing or about to lose your home to wrongful fraudulent foreclosure, and need a complete package that will show you step-by-step litigation solutions helping you challenge these fraudsters and ultimately saving your home from foreclosure either through loan modification or “Pro Se” litigation visit: http://www.fightforeclosure.net

Why Mortgage Foreclosure is on the Rise Again in Nevada

30 Saturday Aug 2014

Posted by in Banks and Lenders, Case Laws, Case Study, Foreclosure Crisis, Judicial States, MERS, Mortgage Laws, Non-Judicial States, State Court, Your Legal Rights

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Recent Study and filing records shows that mortgage notice of default and foreclosure is on the rise in the State of Nevada within the past few months.

Some of the causes of the rise resulted from the Fall 2012 decision where the court upheld MERS in foreclosure proceedings.

The Nevada Supreme Court validates the use of the Mortgage Electronic Registration System, Inc. (MERS), allowing foreclosures to proceed.  On September 27, 2012, the Nevada Supreme Court issued Edelstein v. Bank of New York Mellon, 128 Nev. Adv. Op. 48 (Sept. 27, 2012), clarifying and establishing rules affecting the transfer of real property interests.  Prior to this decision, judges in Nevada struggled with the effect of MERS as a nominee or beneficiary of a deed of trust.  This holding abolishes the repeatedly asserted claim that MERS, as a nominee or beneficiary, invalidates the security interest and prohibits foreclosure.  This landmark decision eliminates a major stumbling block faced by lenders and servicers defending wrongful foreclosure claims.

The primary holding of Edelstein establishes that designating MERS as a nominee and beneficiary does not irreparably “split” the promissory note from the deed of trust and, so long as the note and deed of trust are ultimately reunited in the same party, a trustee’s sale can proceed.  Edelstein validates MERS’s use and legitimacy for the financial services industry in Nevada.  Under Edelstein, the parties in interest have the opportunity to cure potential assignment and transfer irregularities that may have occurred during the life of the mortgage paper, so long as the foreclosing party has possession of both the note and deed of trust upon foreclosure. In owner-occupied residential property, however, a borrower in default may elect to mediate under the state-run foreclosure mediation program. If chosen, the amended foreclosure mediation rules require the beneficiary, or its agent, to bring certified copies of the note and deed of trust and any assignments thereof. See FMR 11. Similarly, after the passage of AB 284, an affidavit accompanying all notices of default filed after July 1, 2011 requires the trustee, beneficiary or agent to verify information concerning the note, deed of trust and assignments.   Nevertheless, in a litigation context, Edelstein should prove invaluable in providing the financial services industry with the tools it needs to successfully protect its interests.

The Court noted that planned “separation” of the note and deed of trust does not render either instrument void.  Although both the note and deed of trust must be held together in some combination of either the beneficiary and noteholder being the same entity or sharing an agency relationship, nothing requires them to be unified at a time prior. In essence, their being held by different entities as the result of securitization, for example, prior to foreclosure has no effect on a subsequent foreclosure in the name of a holder then in possession of both.

In Edelstein, the Nevada Supreme Court also adopted the Restatement (Third) of Property (Mortgages) § 5.4 (1997), which states that a mortgage note and deed of trust are automatically transferred together, unless the parties agree otherwise.  Accordingly, if a foreclosing entity can demonstrate an assignment of either the note or the deed of trust, that alone is sufficient to establish authority to foreclose.  Nevertheless, the Nevada Supreme Court found that the deed of trust and note were “split” in this case because at inception, MERS was the “beneficiary” under the deed of trust, while the original lender was the noteholder.  Admittedly, this aspect of the holding creates a certain degree of confusion, because the Court also found that MERS was the agent of the holder of the note and, that where an agent of a secured party has actual possession of a note, the secured party has taken actual possession.  In light of its express adoption of the Restatement (Third) of Property (Mortgages) § 5.4 (1997) that the security follows the note—and vice versa—the Court certainly could have omitted the notion that the note could be “split” from the deed of trust as a matter of law.

Notwithstanding, Edelstein’s utility remains, because the Nevada Supreme Court’s holding that MERS’s recording of the assignment of the deed of trust containing express language that the deed of trust was assigned “together with the note or notes,” properly transfer both the deed of trust and note to the assignee, here, Bank of New York Mellon.  In accepting that language in a recorded assignment as sufficient to affect a transfer of both the deed of trust and note, the burden of proof on a foreclosing beneficiary is substantially minimized.  At least, in the non-bankruptcy context, foreclosing beneficiaries and their agents can now rely upon this holding to validate the effectiveness of similar language included in assignments, thus demonstrating a proper assignment of the note through a recorded document, rather than by testimonial evidence.

The Court further clarified the definition of “agency” among lenders, beneficiaries, servicers and trustees, by expressly recognizing various agency relationships.  The Court held that MERS, designated as a “nominee,” is an agent for a lender, or its successors and assigns.  The Court acknowledged that a servicer is also an agent for the lender or beneficiary and, found that, although helpful, the production of a servicing agreement is not required by Nevada law or the Foreclosure Mediation Program Rules in order to establish a servicer’s authority to foreclose.  The Court further confirmed that a trustee is an agent for the lender or beneficiary and, thus, the lender or beneficiary is entitled to enforce a note even when its trustee is in possession of the note.  Expressly acknowledging the reality that foreclosure is based on several entities working together as agents, Edelstein is favorable to beneficiaries as it validates these relationships and reduces the burden in establishing these agents’ relationships and authority to act on behalf of the beneficiary.

Although not without certain inconsistencies, the Edelstein opinion overall provides helpful guidance regarding establishing foreclosure authority in defending wrongful foreclosure, quiet title and other real property claims in both consumer and commercial finance litigation and in interrelated non-judicial foreclosure proceedings.

When Homeowner’s good faith attempts to amicably work with the Bank in order to resolve the issue fails;

Home owners should wake up TODAY! before it’s too late by mustering enough courage for “Pro Se” Litigation (Self Representation – Do it Yourself) against the Lender – for Mortgage Fraud and other State and Federal law violations using foreclosure defense package found at http://www.fightforeclosure.net “Pro Se” litigation will allow Homeowners to preserved their home equity, saves Attorneys fees by doing it “Pro Se” and pursuing a litigation for Mortgage Fraud, Unjust Enrichment, Quiet Title and Slander of Title; among other causes of action. This option allow the homeowner to stay in their home for 3-5 years for FREE without making a red cent in mortgage payment, until the “Pretender Lender” loses a fortune in litigation costs to high priced Attorneys which will force the “Pretender Lender” to early settlement in order to modify the loan; reducing principal and interest in order to arrive at a decent figure of the monthly amount the struggling homeowner could afford to pay.

If you find yourself in an unfortunate situation of losing or about to lose your home to wrongful fraudulent foreclosure, and need a complete package that will show you step-by-step litigation solutions helping you challenge these fraudsters and ultimately saving your home from foreclosure either through loan modification or “Pro Se” litigation visit: http://www.fightforeclosure.net

Why Unsophisticated Homeowners Are Losing Their Homes

29 Friday Aug 2014

Posted by in Banks and Lenders, Foreclosure Crisis, Judicial States, Non-Judicial States, Scam Artists, Your Legal Rights

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Many homeowers who suddenly found themselves in foreclosure situation often wonder why me? The situation most homeowners found themselves is directly related to the word “Mortgage”.

It is a total ruse that a house with a mortgage is an investment. It is a liability!

It’s amazing how moronic the advise some homeowners get when purchasing a home. In many cases homeowners prefer to believe in “bad advise” as the norm.

Think about this, if the people start trusting and borrowing from each other, (Seller Financing), thereby cutting out the middle man, none of these would have happened.

This post is designed to show you why Equity, Down Payments and Principal Payments Are For The Financially Uneducated.

Do you Think equity, down payments and principal payments are a good idea?

Are you like most Americans who’ve been brainwashed by the media propaganda paid for and perpetuated by the banks and think that unless you have a substantial down payment, you aren’t qualified to own a home?

Do you honestly believe that it’s somehow “American” to put down money on a home and pay down a mortgage?

Let’s examine reality…..

Before we begin, tell me how much you’d like to invest in this wonderful investment:

  • You get to pay a substantial amount in cash for the investment but don’t own anything
  • Your money is 100% at risk of loss and there’s nothing you can do to prevent the loss (e.g., no stop loss order)
  • Your money is illiquid
  • Your money generates a negative rate of return (yes, negative which sort of disqualifies it as an investment)
  • Your money is only accessible through a loan costing you several points and fees and subject to strict underwriting guidelines which do not allow you to access all of your money, or through divestiture of the underlying investment thereby subjecting you to taxable income
  • Your money placed in the investment has cost you a tax deduction thereby increasing your taxes
  • You get to continually add to this investment with forced financial contributions monthly that further expose you to financial risk, generate a negative rate of return and continually increase your tax liability

mr-t-300

What is this wonderful investment and where can you get one?

It’s called a mortgage and you invest in it when you put down a down payment or when you pay down principal balance on a mortgage.

In short, the banks have perpetuated the myth that a greater down payment better qualifies someone to own a home which is preposterous.

A greater down payment is a greater insurance policy for the bank in the event you default and they have to foreclose. It has nothing to do with your qualifications or ability to repay a loan.

banksters-300

It’s all about risk mitigation…………..for the banks, not for you.

Likewise, when you pay down principal on a fully amortized mortgage, you’re steadily increasing the insurance policy of the bank, not increasing anything for your own benefit for all the reasons cited above.

Paying down principal actually makes it take longer for you to pay off a mortgage because you lose the compounding effect the investment could yield in an interest or income bearing investment.

In most instances, your equity isn’t asset protected or shielded thereby exposing you to loss via judgments and tax liens.

The money you do pay down generates a negative rate of return. Assuming it appreciates, the property generates the exact same rate of return regardless of how much is owed.

Beyond that, due to the Federal Reserve’s stated policy of continual devaluation of the dollar, the money used as a down payment or principal balance payment is losing value and buying power……..daily.

You NEVER want to put money down or pay down a mortgage. It’s moronic and goes against the grain of every solid financial, wealth creation and asset protection plan.

Rather than pay down the mortgage, it’s better to use the down payment and money you would have paid down in principal payments and place them in an interest or income bearing investment that has the ability to compound or precious metals if compounding is less important and insurance is of greater importance.

As many Americans saw in states like California, Arizona, Nevada and Florida when the housing bubble burst, equity evaporated overnight. The degree of equity someone had and the number of consecutive on time monthly payments had zero impact on their loss of equity, property value or the banks desire or ability to foreclose. Many Americans learned the hard way that down payments, principal balance reduction and equity were for the financially uneducated.

Equity, down payments and principal payments are diametrically opposed to wealth creation and actually inhibit your abilities for generating investment income.

They limit or eliminate your cash reserves and thereby decrease or eliminate your ability to leverage OPM (Other People’s Money) for other investments. With each down payment or principal payment, you move one step closer to a default because you’re expending liquid capital that could be used in the event of an emergency or cash flow crunch.

Why would you voluntarily slow or stop your ability to generate returns, invest in other properties and make yourself unnecessarily illiquid and risk default?

For the sake of equity?

Hello, McFly?

In the current market climate, conventional mortgages require a down payment for most loan products. The key here is to either arrange owner financing and avoid the down payment requirement altogether or minimize the down payment you’re required to put down if you absolutely must use conventional financing.

So, it begets the logical question, what’s the benefit? You be the Judge!

When Homeowner’s good faith attempts to amicably work with the Bank in order to resolve the issue fails;

Home owners should wake up TODAY! before it’s too late by mustering enough courage for “Pro Se” Litigation (Self Representation – Do it Yourself) against the Lender – for Mortgage Fraud and other State and Federal law violations using foreclosure defense package found at http://www.fightforeclosure.net “Pro Se” litigation will allow Homeowners to preserved their home equity, saves Attorneys fees by doing it “Pro Se” and pursuing a litigation for Mortgage Fraud, Unjust Enrichment, Quiet Title and Slander of Title; among other causes of action. This option allow the homeowner to stay in their home for 3-5 years for FREE without making a red cent in mortgage payment, until the “Pretender Lender” loses a fortune in litigation costs to high priced Attorneys which will force the “Pretender Lender” to early settlement in order to modify the loan; reducing principal and interest in order to arrive at a decent figure of the monthly amount the struggling homeowner could afford to pay.

If you find yourself in an unfortunate situation of losing or about to lose your home to wrongful fraudulent foreclosure, and need a complete package that will show you step-by-step litigation solutions helping you challenge these fraudsters and ultimately saving your home from foreclosure either through loan modification or “Pro Se” litigation visit: http://www.fightforeclosure.net