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Category Archives: Litigation Strategies

What Borrowers Must Know About Voiding Liens in a Mortgage

06 Sunday Oct 2019

Posted by BNG in Appeal, Bankruptcy, Banks and Lenders, Borrower, Case Laws, Case Study, Federal Court, Foreclosure, Foreclosure Crisis, Foreclosure Defense, Fraud, Judicial States, Legal Research, Litigation Strategies, Loan Modification, Mortgage fraud, Mortgage Laws, Non-Judicial States, Note - Deed of Trust - Mortgage, Pro Se Litigation, Real Estate Liens, State Court, Trial Strategies, Your Legal Rights

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enforceability of judgment lien, Foreclosure, foreclosure defense, homeowners, involuntary liens, Lien, lien stripping, lien voidance, liens, Loan, Loan servicing, Mortgage loan, Mortgage modification, Mortgage servicer, Pro se legal representation in the United States, Property Lien Disputes, property liens, Real Estate Liens, Removing Liens, Types of Real Estate Liens, Unperfected Liens, voluntary liens

There are numerous methods for voiding questionable liens in any given mortgage. In this post, we’ll discuss an interesting decision by the U.S. Court of Appeals for the Ninth Circuit in Bankruptcy Adversary Proceeding.

This decision from the U.S. Court of Appeals for the Ninth Circuit poses a serious threat to mortgage companies that service mortgages of chapter 13 debtors. Mortgage servicers should be aware of the case’s implications and adjust their internal case monitoring procedures as necessary.

Consider a common situation. A borrower files a chapter 13 bankruptcy case, and her mortgage servicer files a proof of claim for the mortgage balance. The borrower then objects to the proof of claim based on some purported technicality: the signature was forged, the endorsement was improper, the servicer lacks standing to enforce the note, etc. For whatever reason, the mortgage servicer does not respond to this objection, and the claim is disallowed by default.

When this happens, the borrower will often attempt to leverage a favorable settlement, like a mortgage modification, by filing a lawsuit to void the mortgage under 11 U.S.C. § 506(d). This provision allows a bankruptcy court to void a lien if the lien secures a claim that is not “allowed.” Because the mortgage was “disallowed” by default due to the mortgage servicer’s failure to respond, this statute theoretically allows the court to void the mortgage altogether.

Courts generally do not void mortgages that are substantively valid but were disallowed because of a default. The most common solution in these situations is a settlement and a motion to reconsider the disallowance under 11 U.S.C. § 502(j). Bankruptcy courts may grant these motions for “cause” at their discretion, which is typically satisfied if the mortgage servicer can prove the substantive validity of the mortgage. See generally In re Oudomsouk, 483 B.R. 502, 513-14 (Bankr. M.D. Tenn. 2012). This works to everyone’s advantage: the mortgage servicer gets paid through the bankruptcy, and the debtor avoids the risk of post-bankruptcy foreclosure if the lien’s validity is ultimately upheld after the case concludes.

The decision of the U.S. Court of Appeals for the Ninth Circuit in In re Blendheim may change this result. 2015 WL 5730015 (9th Cir. Oct. 7, 2015). In Blendheim, the debtors owned a condominium with two mortgages. After filing chapter 7 and obtaining a discharge of their unsecured debts, the debtors immediately filed a chapter 13 case to restructure their mortgages on the condominium (this process is known as a “chapter 20”). HSBC, the senior servicer, filed a proof of claim for the senior mortgage, but the debtors objected because (a) HSBC attached only the deed of trust, and not the promissory note, to the proof of claim, and (b) one of the signatures on the note was purportedly forged.

For reasons unknown, HSBC did not respond to the objection, and the bankruptcy court entered an order disallowing HSBC’s claim by default. Five months later, the debtors brought an adversary proceeding to void the mortgage under 11 U.S.C. § 506(d). Almost eighteen months after the bankruptcy court disallowed HSBC’s claim, HSBC filed a motion to reconsider the disallowance. HSBC also challenged the debtors’ attempt to void the mortgage because the disallowance was not actually litigated; it was the result of a default. The bankruptcy court disagreed, finding that (a) HSBC had no good reason for failing to respond to the claim objection, and (b) the statute plainly permitted lien avoidance in these circumstances. After the bankruptcy court confirmed the debtors’ plan, which provided for payment of only the junior mortgage, HSBC appealed.

On appeal, HSBC raised three primary issues. First, it argued that Section 506(d) should not operate to void its mortgage, notwithstanding the plain language of the statute, when the order disallowing the claim was not actually litigated but was based on a default. Second, it argued that even if the lien were properly voided under Section 506(d), the result could not be permanent because the debtors, having recently received a discharge in their chapter 7 case, were not eligible for a discharge in their chapter 13 case. Third, it argued that by losing its lien because of a default order in the bankruptcy case, as opposed to a formal lawsuit, it was denied due process.

The court disagreed with HSBC on each issue. First, it held that lien avoidance was appropriate. HSBC cited cases where courts refused to void a mortgage when a claim was disallowed for being filed late. The court distinguished these cases, holding that a creditor who files a late proof of claim is not “actively participating in the case” and therefore cannot have its state law lien rights impacted. See generally Dewsnup v. Timm, 502 U.S. 410, 418-19. But when a creditor timely files a proof of claim then willfully fails to respond to the debtors’ objection to the claim, the situation is fundamentally different. According to the court, the Bankruptcy Code plainly allows permanent lien avoidance when a creditor, like HSBC, “just sle[eps] on its rights and refuse[s] to defend its claim.” Blendheim, 2015 WL 5730015, at *11.

Next, the court addressed HSBC’s second argument and held that lien avoidance was appropriate even though the debtors were not eligible for a discharge. Acknowledging a split of authority, the court clarified that discharge affects only personal liability, not the in rem rights of creditors, so the cases on which HSBC relied were distinguishable. Nothing in the Bankruptcy Code prohibits lien avoidance just because a borrower has no right to a discharge.

Finally, the court held that HSBC’s due process was not offended. HSBC received notice of the claim objection and had ample time to respond.  Its failure to do so, while fatal to its lien, did not violate its due process rights.

What This Means for Mortgage Creditors

The Blendheim case may have serious implications for mortgage creditors. This situation is not an outlier: mortgage servicers commonly fail to respond to claim objections. his may be because of the quick deadline to respond to these objections or the use of separate legal counsel for handling administrative functions in bankruptcy versus defending adversary proceedings. Historically, when a claim is disallowed based on a creditor’s failure to respond to a claim objection, bankruptcy courts will grant a reconsideration motion under Section 502(j) if the creditor can prove the substantive validity of the mortgage.

After Blendheim, the result may be different. The Blendheim court, after all, did not seem to care about the underlying validity of HSBC’s claim. Instead, it focused on HSBC’s failure to respond without a good reason.

How does this Affect Mortgage Creditors

Mortgage servicers should be aware of this decision and should make sure that they are closely following the dockets of cases involving their borrowers in bankruptcy. If they don’t, they risk losing their mortgage lien, if any, altogether.

CASE STUDY:  HSBC v. BLENDHEIM

[The views expressed in this document are solely the views of the Author. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance]

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

If you are a homeowner already in Chapter 13 Bankruptcy with questionable liens on your property, you needs to proceed with Adversary Proceeding to challenge the validity of Security Interest or Lien on your home, Our Adversary Proceeding package may be just what you need.

Homeowners who are not yet in Bankruptcy 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 https://fightforeclosure.net/foreclosure-defense-package/ “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: https://fightforeclosure.net/foreclosure-defense-package/

If you have received a Notice of Default “NOD”, take a deep breath, as this the time to start the FIGHT! and Protect your EQUITY!

If you do Nothing, you will see the WRONG parties WITHOUT standing STEAL your home right under your nose, and by the time you realize it, it might be too late! If your property has been foreclosed, use the available options on our package to reverse already foreclosed home and reclaim your most prized possession! You can do it by yourself! START Today — STOP Foreclosure Tomorrow!

 

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How Homeowners Can Set Aside Foreclosure Sale

06 Sunday Oct 2019

Posted by BNG in Banks and Lenders, Borrower, Federal Court, Foreclosure, Foreclosure Crisis, Foreclosure Defense, Fraud, Judgment, Judicial States, Litigation Strategies, Mortgage fraud, Mortgage Laws, Non-Judicial States, Note - Deed of Trust - Mortgage, Pleadings, Pro Se Litigation, State Court, Trial Strategies, Your Legal Rights

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federal courts, Foreclosure, foreclosure defense, homeowners, Judicial States, Non-Judicial States, overture a foreclosure sale, Pro se legal representation in the United States, setting aside foreclosure sale, State Courts, wrongful foreclosure, wrongful foreclosure appeal, Wrongful Mortgage Foreclosure

What are the Reasons a Foreclosure Sale May Be Set Aside

Generally, to set aside a foreclosure sale, the homeowner must show:

– irregularity in the foreclosure process that makes the sale void under state law
– noncompliance with the terms of the mortgage, or
– an inadequate sale price that shocks the conscience.

Sometimes homeowners are not aware that a foreclosure sale has been scheduled until after it has already been completed. Even if your home has been sold, there are some instances where you might be able to have the foreclosure sale invalidated, though this is uncommon. This post will discuss how to set aside a foreclosure sale and the circumstances that might warrant it.

Irregularity in the Foreclosure Process

State statutes lay out the procedures for a foreclosure. If there are irregularities in the foreclosure process—meaning, the foreclosure is conducted in a manner not authorized by the statute—the sale can potentially be invalidated.

Some examples of irregularities in the foreclosure process are:

  • The loan servicer does not send notice to the borrower.
  • A state statute requires notice by advertising the sale in a newspaper, but the servicer does not place the advertisement.
  • The foreclosing lender did not get an assignment of the mortgage.

Example. In U.S. Bank v. Ibanez, the Massachusetts Supreme Judicial Court invalidated two foreclosure sales where the mortgages were assigned to the lender after the completion of the foreclosure sale. The court decided that the foreclosures were void because the lenders lacked legal authority to foreclose.

However, in some states, courts are reluctant to set aside a foreclosure sale based upon violations of foreclosure statutes unless the violation resulted in actual prejudice (harm) to the homeowner. For instance, the homeowner may have to show that the lender’s failure to follow the statutory requirements chilled the bidding at the foreclosure sale and, as a result, the homeowner was liable for a larger deficiency judgment.

Noncompliance With Terms of the Mortgage

If the lender or servicer fails to comply with the terms of the mortgage contract, this may constitute sufficient reason to set aside a foreclosure sale.

Example. Many mortgages and deeds of trust require that the lender or servicer send the borrowers a breach letter giving them 30 days to cure the default before starting a foreclosure. If the servicer doesn’t send a breach letter, this may provide grounds for invalidating the foreclosure.

Inadequacy of Sale Price

Inadequacy of sale price might justify setting aside a foreclosure sale if the price is so low that it “shocks the conscience” of the court. It is often difficult to get a sale set aside on this basis. Usually to get a sale invalidated for inadequacy of sale price, you will also need additional circumstances that warrant voiding the sale.

For instance, courts are more likely to set aside a sale if there is an inadequate sales price combined with:

  • some irregularity (such as if the sale was advertised to take place at 3:00 p.m., but was actually held at 11:00 a.m.), or
  • unfairness (like if the lender re-sold the property for a much higher price right after the foreclosure sale, which demonstrates that it could have received a higher price at the foreclosure sale).

Though keep in mind that some courts might be hesitant to void the sale unless the violation resulted in actual prejudice to the homeowner.

How to Set Aside the Foreclosure Sale

The procedures to set aside a foreclosure sale depend on whether the sale was judicial (where the lender forecloses through the state court system) or nonjudicial (which means the lender does not have to go through state court to get one).

Setting Aside a Sale in a Judicial Foreclosure

Attempting to invalidate the sale in a judicial foreclosure can typically be done in the following ways, depending on state law:

  • If the foreclosure case stays open through completion of the sale process, then you can raise an objection to the legitimacy of the sale in that case.
  • If the state judicial process terminates once the foreclosure judgment is entered (and not appealed), then you must either file a motion to reopen the case or file a separate action to void the sale.

The actual process is generally determined by statute, rule, or case law.

Setting Aside a Sale in a Nonjudicial Foreclosure

If the property was foreclosed non-judicially, the homeowner will usually have to file a lawsuit in state court to void the sale. It may also be possible in some instances to file bankruptcy and ask that the sale be set aside as part of the bankruptcy case.

There are a few nonjudicial foreclosure states that require a court to confirm the sale. In those states, the homeowner can sometimes raise objections to the sale in the confirmation process. However, in some states the confirmation process is limited to determining whether or not the property sold for fair market value at the foreclosure sale and the court will not review other issues.

What Happens if the Sale Is Set Aside?

If the foreclosure sale is set aside as void, title to the property is typically returned to the homeowner while the mortgage and other liens generally are re-established. However, if the property has been resold to another party following an invalidated sale, some state statutes provide that the subsequent sale to a good faith purchaser eliminates the foreclosed homeowner’s right to challenge the sale on procedural grounds. In these types of cases, the homeowner might be able to seek damages against the lender or servicer.

The reasons that justify, as well as, the procedures for, invalidating a foreclosure sale are complicated. So, if you are considering trying to set aside a foreclosure sale, the earlier you begin the fight using the content found within our package, the better chance of succeeding.

[The views expressed in this document are solely the views of the Author. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance]

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 https://fightforeclosure.net/foreclosure-defense-package/ “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: https://fightforeclosure.net/foreclosure-defense-package/

If you have received a Notice of Default “NOD”, take a deep breath, as this the time to start the FIGHT! and Protect your EQUITY!

If you do Nothing, you will see the WRONG parties WITHOUT standing STEAL your home right under your nose, and by the time you realize it, it might be too late! If your property has been foreclosed, use the available options on our package to reverse already foreclosed home and reclaim your most prized possession! You can do it by yourself! START Today — STOP Foreclosure Tomorrow!

If you are a homeowner already in Chapter 13 Bankruptcy and needs to proceed with Adversary Proceeding to challenge the validity of Security Interest or Lien on your home, Our Adversary Proceeding package may be just what you need.

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What Homeowners With Business Should know About Federal Judgments and Chapter 11 Plans

16 Tuesday Jul 2019

Posted by BNG in Affirmative Defenses, Bankruptcy, Borrower, Case Laws, Credit, Federal Court, Judgment, Judicial States, Litigation Strategies, Non-Judicial States, Pro Se Litigation, Trial Strategies, Your Legal Rights

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10 years, chapter 11, chapter 11 bankruptcy, Chapter 11 Plans, Consent decrees, dormant judgment, enforceability of judgment lien, enforceability of judgments, entry of judgment, execution method, execution on a judgment, extinguishment, federal courts, Federal Judgments, federal statute, homeowners, installment judgments, issuance of the remittitur, Judgment, judgment creditors, judgment expired, notice of entry of judgment, periodic payments, registered judgment, renewal of judgment, renewing a judgment, state law, Statute of Limitations, statute of limitations for judgment renewals, statute of repose, time-barred judgment, write of execution

What greeting card do you expect from the judgments warehoused in your file cabinets? Yes, those judgments can mail you a greeting card. Your first choice is the birthday card: “Happy 10th Year Anniversary. What a ride. Thanks for the renewal. See you in ten years.” Your other choice is the condolence card: “10 years? You waited too long. My dearest sympathy.”

Victory lasts forever, but not a federal judgment. “There is ‘no specific federal statute of limitations on how long [a federal] judgment is effective. (citation omitted) When no federal statute applied, state practices and procedures are utilized.”1 State law provides a judgment creditor with the rights and remedies to enforce a federal money judgment under F.R.C.P. 69(a)(1), including the renewal of a money judgment.2 The law of the state measures the life of a federal judgment. A pending appeal does not toll the enforceability period under C.C.P. § 683.020.3

The Law of the Domicile Measures the Life of a Federal Judgment

In In Re Levander,4 the Ninth Circuit held that the federal courts apply the law of the domicile in the enforcement of a judgment.5 Similarly, in McCarthy v. Johnson,6 the court held that Utah state law provided the mechanism for the renewal of a federal judgment. In Fidelity Nat. Fin. Inc. v. Friedman, the Ninth Circuit held that state law applies when measuring the life of judgments. Federal and bankruptcy courts apply state law when renewing a judgment because federal judgments lack a federal expiration date.7 While Fidelity dealt with a registered judgment, the principle that a registered judgment is deemed a judgment for all purposes under 28 U.S.C. § 1963 is nevertheless applicable.

The Ninth Circuit held that the federal courts are to apply state law in determining the statute of limitations.8 Likewise, the Fifth Circuit applied Texas state law in Andrews v. Roadway Express, Inc. (5th Cir. 2006) 473 F.3d 565, holding that a consent decree, arising from a class action suit, was time barred as a result of the plaintiffs’ failure to timely renew the judgment and raising the issue whether other judgment providing for payment to class bear a fixed life.9 Unless a federal statute provides otherwise, the practice relative to the revival of dormant judgment is governed by state law.10

Deader Than a Doornail: the Statue of Repose

Some states have held that a time-barred judgment is extinguished and ceases to exist (“statute of repose”), as opposed to having a procedural rule that bars recovery in the enforcement of judgments.11 In United States v. Tacoma Gravel & Supply Inc.,12 the Ninth Circuit, construing Washington state law, held that Washington state’s limit on the enforceability of judgments is a statute of extinguishment (i.e., a statute of repose),13 not a statute of limitations. Moreover, the Ninth Circuit unequivocally held that “this is not a statute of limitations but of extinguishment; after six years, a Washington judgment has no force or effect—it ceases to exist. [Collection of Washington state cases]”14 The Tacoma court applied Washington state law to bar enforcement brought by the United States, stating that the “Appellant had no judgment left to renew,” a conclusion predicated in part on the government’s filing in state court.15 The court did not leave the government empty-handed. It left open the prospect that the underlying claim was still viable under United States v. Summerlin.16 Tacoma is important because it demonstrates that a renewal statute is also a statute of repose that may extinguish the judgment completely.

Read the Manual

California Code of Civil Procedure §§ 683.110 through 683.220 provide for the renewal of a judgment consisting generally of the filing and service of an application for renewal [Sections 683.140 to 683.150]. Upon filing the application, the clerk shall enter the renewal in the court records.17 Section 683.150(a) authorizes renewal without the necessity of service of process of the renewal “package.” (Judicial Council Form Nos. EJ-190, EJ-195, and MC-012, and include a detailed declaration of interest).

To initiate enforcement, the judgment creditor must serve the renewal by mail. See C.C.P § 683.160(b). To maintain the judgment lien on the real property, the judgment creditor must record a certified copy of the application for renewal. SeeC.C.P § 683.180.18 Ten years is a long time and expect that the debtor might have conveyed the property, fraudulently or otherwise. The judgment creditor must personally serve the transferee and file proof of service within 90 days of the renewal filing. See §§ 683.180(b)(1) & (2) in prosecuting the renewal. This is a common error and title reports (modern parlance and much cheaper: litigation guaranty) are de riguer in identifying the transferee. In the online world, nearly every county recorder (except Los Angeles) will identify the grantee of the debtor under the “granter/grantee” index. Use Judicial Council Form EJ-190 for the Northern District of California, not the Central District, which requires a traditional filing.19

Chapter 11 Plans Are Money Judgments and Expire Like Any Other Federal Judgment

The fact that a class action [“Andrews”] judgment expired suggests that a confirmed Chapter 11 plan, providing for payment to the creditors, would likewise expire unless renewed pursuant to the domicile law. Chapter 11 plans are a blend of contract, judgment, and consent decree, offering payment to a group of creditors.20 Chapter 11 plans assure payment equivalent to their recovery in a Chapter 7 liquidation21 and are subject to enforcement if breached.22 If a consent decree arising from a class action expires like any other federal judgment, the confirmed Chapter 11 plan, bearing the near-identical attributes (judgment, class of claimants, continuing supervision, claim filings procedures, and pro rata payment based on the consent decree), would likewise expire absent a renewal under state law.23 The statute of repose would extinguish the plan obligations and reinvigorate a mediocre balance sheet. The plan discharge would recapitalize the debtor. Who would be beneficiary of the plan “kicking the bucket?” Answer: the shareholders who are the [pre-petition] creditors.

Is dumping the Chapter 11 plan a good deal and for whom? Answer: Yes, if stock of the debtor, freed of the plan and publicly traded, offers greater value to the creditors than payments under the plan. Expiring Chapter 11 plans recast the asbestos mega-cases24 whose plans bear a lifespan of 10 years plus and compensate claimants with debtor’s stock [through a claimant’s trust]. The statute of repose frees the debtor of plan obligations [billions], jumpstarts the stock, and puts real money in the hands of the claimants.

Federal Courts Are Eternal But Federal Judgments Are Not

The life of a federal judgment could easily exceed 10 years, given various appeals up to the Supreme Court. Consent decrees offering payment over time to claimants can run 10 years or more. Asbestos Chapter 11 plans readily exceed ten years and the Johns Manville plan is now in excess of 20 years. These plans [judgments or decrees] bear the risk of extinguishment if not renewed and, if expired, would upset settled social and political expectations.

Is a plan implosion a disaster? In a Chapter 11, the beneficiaries are the creditors as shareholders, anticipating an upswing in the stock value, would move to extinguish the plan and inherit a revived company. This result suggests that the plan extinguishment more efficiently compensates victims of the mass tort than the plan payments because the invisible hand of the marketplace reveals this outcome. The plan extinguishment will wipe out the plan and the market will rush to the stock.

1. In re Fifarek (Stark v. Fifarek), 370 B.R. 754, 758 (Bankr. Court, W.D. Mich. 2007); In re Hunt (Lillie v. Hunt), 323 B.R. 665, 666 (Bankr. W.D. Tenn. 2005) (“Since there is no specific statute of federal statute of limitations on how long this judgment is effective, the parties agree that we must look to Tennessee law [citation omitted])”.

2. Fed R. Civ Pr. 69(a)(1)&(2)

3. Fidelity Creditor Service, Inc. v. Browne (2001) 89 Cal.App.4th 195, 201 [106 Cal.Rptr.2d 854]: The period prescribed in Section 683.020 commences on the date of entry and is not tolled for any reason

4 In re Levander, 180 F.3d 1114 (9th Cir. 1999)

5. Id. at 1121-1122, “We have held that Federal Rule of Civil Procedure 69(a) empowers federal courts to rely on state law to add judgment-debtors under Rule 69(a), which permits judgment creditors to use any execution method consistent with the practice and procedure of the state in which the district court sits.” citing to Cigna Property & Cas. Ins. Co. v. Polaris Pictures Corp., 159 F.3d 412, 421 (9th Cir.1998) (quoting Peacock v. Thomas, 516 U.S. 349, 359 n. 7, 116 S.Ct. 862 [1996])(internal quotation marks omitted); see also, Andrews at 568; Crump v. Bank of America, 235 F.R.D. 113, 115 (D.D.C. 2006); RMA Ventures v. Sun Am. Life Ins. Co., 576 F.3d 1070, 1074 (10th Cir. 2009) (“Once a federal district court issues a write of execution, a judgment creditor must follow the procedure on execution established by the laws of the state in which the district court sits. [Citations omitted] ***). Thus, as required by FRCP 69(a)(10), Defendants have turned here to the method of execution prescribed under Utah law.”

6. McCarthy v. Johnson, 172 F.3d 63 (10th Cir. 1999). Unpublished Opinion

7. Fed.R.Civ.Pro 69(a) et seq. incorporates the law of the state in enforcing money judgments, including the requirement of a renewal. McDaniel v. Signal Capital Corp., 198 B.R. 483, 486-487 (Bankr. S.D. Texas 1996); see also, In re Brink, 227 B.R. 94, 95-96 (Bankr. N.D. Texas, 1998); In re Davis, 323 B.R. 745, 748-749 (Bankr. D. Ariz, 2005); In re Hunt; (Lillie v. Hunt), 323 B.R. 665, 666-667 (Bankr. W.D. Texas 2005); In re Fifarek (Stark v. Fifark), 370 B.R. 754, 758 (Bankr. W. D. Mich. 2007). Also In re Romano (Romano v. LaVecchia), Westlaw cite unavailable [WESTLAW?] (9th Circuit BAP, 2009) (“Thus, state law governs the procedure for execution on a judgment in the absence of an applicable federal statute. There is no relevant federal statute we have been able to locate with regard to the renewal of judgment. The parties agree that Nevada law governs the enforcement of the judgment.” [6 years], aff’d 2010 Ap. Lex 5444 (9th Circuit, 2010).

8. See Marx v. Go Publ. Co., Inc., 721 F.2d 1272, 1273 (1983); see also; Duchek v. Jacobi, 646 F.2d 415, 417 (1981).

9. Andrews at 567-568 (collection of cases). Note the discussion whether the issue is the time limits for the issuance of a writ of execution is subject to state law and whether the judgment is extinguished.

10. See Donellan Jerome Inc. v. Trylon Metals Inc., 996 F. Supp. 996 (USDC, N.D.Ohio 1967 (Collection of cases).

11. Mississippi provides for statute of repose, not statute of limitations for judgment renewals. [Mississippi Code § Ann 15-1-43].

12. United States v. Tacoma Gravel & Supply Co., 376 F.2d 343, 344-345 (9th Cir. 1967) (“Consequently, the judgment becomes inoperative for any purpose after expiration of six years.) Please note that, while Washington has extended the life of a judgment to ten years, the holding in Tacoma that the Washington statute is one of repose, extinguishing the judgment, still applies. Cf. RCW 4.16.020 and 4.56.210

13. A statute of repose cuts off a right of action after a specified period time, irrespective of accrual or even notice that a legal right has been invaded. Giest v. Sequoia Ventures, 83 Cal.App.4th 300, 305 (Cal.App.1 Dist., 2000).

14. Tacoma at 344.

15. Id. at p. 345.

16. In re Penberthy, 211 B.R. 391, 395 (Bankr.W.D. Wash. 1997).

17. Goldman v. Simpson, 160 Cal.App.4th 255, 262: “The statutory renewal of judgment is an automatic, ministerial act accomplished by the clerk of the court; entry of the renewal of judgment does not constitute a new or separate judgment. ‘Filing the renewal application (and paying the appropriate filing fee, Gov.C. § 70626(b)) results in automatic renewal of the judgment. No court order or new judgment is required. The court clerk simply enters the renewal of judgment in the court records.’”

18. Songer v. Cooney (Cal. App. 2 Dist. 1989) 214 Cal.App.3d 387, 393, 264 Cal.Rptr. 1 [abstract of judgment ensures enforceability of judgment lien even though the debtor is bankrupt].

19. If in state court, the alternative method (if timely) is to file a suit to renew the judgment. See Pratali vs. Gates (1992) 4 Cal App. 4th 632, 637-638 and Green vs. Zissis (1992) 5 Cal. App. 4th 1219, 1222; for more a detailed discussion, see Fredric Goldman vs. Orenthal James Simpson (O.J. Simpson) (2008) 160 Cal.App.4th 255 [continuing jurisdiction over judgment debtor who absconds from California]. If the defendant departed the state, C.C.P. § 351 tolls the statute of limitations. Green vs. Zissis, supra., at 1222-1123. See also Kertesz vs. Ostrosky (2004) 115 Cal. App. 4th 369, 373. A California state court judgment becomes final upon expiration of the appeal time, or issuance of the remittitur. Green vs. Zissis, supra. p. 1223. If notice of judgment is service, the judgment becomes final in 60 days, and absent notice, 180 days. The notice of entry of judgment kicks off the 60-day clock under C.R.C. 8.104(a)(1) & (2) [60 days after notice from clerk or party], but under C.R.C. 8.104(a)(3), the judgment does not become final until 180 days after entry of judgment. A federal judgment, on the other hand, differs from state law, and is final upon entry. Eichman v Fotomat Corp. (9th Cir 1985) 759 F.2d 1434, 1439.

20. In re Bruce Bartleson, 253 B.R. 75 (9th Cir. BAP 2000) at 78-79

21. 11 U.S.C. § 1129(a)(7)(A)(ii) [Unsecured creditors should emerge from the Chapter 11 with equal or better than what would a Chapter 7 would pay]

22. See In re OORC Leasing, LLC (Bankr. N.D. Ind. 2007) 359 B.R. 227 at 233.

23. A statute of repose extinguishes the judgment. A statute of limitations on a judgment renders the judgment unenforceable. Consent decrees, Chapter 11 plans, and installment judgments provide for periodic payments, sometimes spanning more than ten years. Chapter 11 asbestos plans span decades. This article suggests that a statute of repose would extinguish the decree, plan, or judgment. The statute of limitations might render the decree, plan, or judgment unenforceable but the obligation might remain viable as a contract and enforceable by way of independent suit. Installment judgments have a separate clock under C.C.P. § 683.130(b)(1) based upon the accrual of the past-due payments. The math is left to another article.

24. Nearly all publicly traded.

[The views expressed in this document are solely the views of the Author. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance]

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 https://fightforeclosure.net/foreclosure-defense-package/ “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: https://fightforeclosure.net/foreclosure-defense-package/

If you have received a Notice of Default “NOD”, take a deep breath, as this the time to start the FIGHT! and Protect your EQUITY!

If you do Nothing, you will see the WRONG parties WITHOUT standing STEAL your home right under your nose, and by the time you realize it, it might be too late! If your property has been foreclosed, use the available options on our package to reverse already foreclosed home and reclaim your most prized possession! You can do it by yourself! START Today — STOP Foreclosure Tomorrow!

If you are a homeowner already in Chapter 13 Bankruptcy and needs to proceed with Adversary Proceeding to challenge the validity of Security Interest or Lien on your home, Our Adversary Proceeding package may be just what you need.

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What Homeowners Must Know After they Have Been Sued in a Bankruptcy Adversary Proceeding

18 Monday Jun 2018

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

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adversary proceeding, automatic stay, Bankruptcy, bankruptcy adversary proceeding, bankruptcy court, Foreclosure, foreclosure defense, homeowners, Law, Lawsuit, Mortgage Electronic Registration System, Mortgage loan, Plaintiff, Pro se legal representation in the United States, United States

This post will be helpful to the Debtor when defending against a creditor’s/trustee’s objection to your discharge or the filing of a Complaint for Nondischargeability based upon fraud/conversion; however, this post may also assist the Debtor in bringing an adversary proceeding should one be necessary.

Introduction

An adversary proceeding is a lawsuit brought within your bankruptcy. This lawsuit normally centers around whether a particular debt or all of your debts are dischargeable (or forgiven) through the act of your filing bankruptcy. These lawsuits usually focus around some alleged improper act on your part, including fraud, misrepresentation, or your failure to abide by the Bankruptcy Code and accompanying Rules.

You are now at the point of the adversary process where you have received, by mail or by personal service, the complaint filed by your creditor which asks the Court to decide whether or not that particular obligation should be part of your bankruptcy discharge or an objection to your overall discharge should be granted.

This section of the adversary proceeding packet is to inform you of what your obligations are in order to prepare for a trial. Note that there are references to the bankruptcy rules: Local Rules of Bankruptcy Practice = LR; Federal Rules of Bankruptcy Procedure = Fed.R.Bankr.P. You may also find both types of Rules at the county law library or you may access the Local Rules at the court’s website http://www.uscourts.gov. You should take a look at these rules if you have any questions about the information given in this section.

Step 1: Answer

After you receive a complaint, you must file an answer with the clerk of the Bankruptcy Court within 30 days after issuance of the summons. (Fed.R.Bankr.P. 7012) You must provide a copy of that answer to the creditor’s attorney.

Step 2: Pre-Trial Conference

Note that the cover sheet you receive from the Court will set forth a pre-trial conference date in the lower right-hand corner of the Summons. You must attend that hearing. At that time, the Court will set parameters for trial. The Court may also discuss with the parties whether or not any settlement is possible. Prior to this pre-trial conference with the Court, and within thirty (30) days after you have answered the complaint, you are required to meet with the attorney for the creditor to discuss how discovery will be conducted in the case. After you have had this discussion and no later than fourteen (14) days after the meeting with the attorney, the parties are required to submit a discovery plan. (Fed.R.Bankr.P. 7016 and LR 7016) This plan is a form which the creditor’s counsel will have and will be filled out by both parties. The form will then be submitted to the Court and the Court will then approve, disapprove or modify the discovery plan and enter any other orders that may be appropriate.

Step 3: Discovery

After you have gone through the preparation of the discovery plan and have had it approved by the Court, you will then conduct your discovery. Local Rule 7026 will provide you with information as to what the parties may or may not do during the discovery process. You may also want to look at Local Rules 7026 through and including 7036 and Fed.R.Bankr.P. 7026 through and including 7036 which gives further information regarding some of the discovery tools or requirements.

Step 4: Motions

You may find that throughout the time frame prior to trial that motions are being filed. Motions may be filed by either party. If you are served with a motion in your adversary proceeding, please be advised that you are required to file your opposition or response with the Court and serve your response to the creditor’s attorney not more than fifteen (15) days after you have received the motion and, in no event, not later than five (5) business days prior to the date set for the hearing on the motion. (Fed.R.Bankr.P. 9013 and Local Rule 9014) Make sure that you provide counsel with a copy of your response.

When you get to Court, you are basically going to supplement what is in your opposition or your motion so the Court can make a well-informed analysis of the situation and then deliver an appropriate decision. Please note that when you are in front of the Court, your time is limited. Generally, a motion is limited to approximately five minutes for both sides. It is the feeling of all judges in our district that if all motions and oppositions are well-drafted and timely filed, there is no reason to spend lengthy periods with oral argument. Therefore, you will be expected to come in to court, make a brief presentation and then sit down.

Step 5: Trial

After you have completed all discovery and all motions, you will then be at the point where the parties are ready to proceed with trial. Your trial date will be assigned to you at the pre-trial conference and the Court will generally schedule the trial within 60 and 120 days depending upon the nature of the matter being tried.

Approximately two weeks prior to the trial, you are required to file with the Court a trial statement, a list of witnesses, and a list of exhibits. You must also exchange these documents with the attorney for the creditor. If you and the attorney for the creditor can agree on what the basic issues in trial are going to be, the trial statement may be filed jointly. In other words, one statement will represent the facts and information for both sides to the Court.

The day before the trial, the parties will mark all the exhibits and any supplemental information that needs to be added to the trial statements. Although you are not required to agree with the attorney for the creditor as to what exhibits may be introduced into evidence, it is strongly encouraged that the parties try to agree to all exhibits to be placed before the Court in an effort to have an economical and efficient adjudication of the case.

Certain documents have been included in this packet so that you will have the ability to understand what needs to be filed with the Court prior to trial. However, it is strongly recommended that you access the court’s website at http://www.uscourts.gov and download a copy of the Local Rules. These will prove very useful to you through the course of the adversary proceeding. You may also wish to check with the county law library for a copy of the Local Rules.

All bankruptcy judges are willing to set up a time to discuss whether or not the case may be settled. Many times, having an impartial third party listening to the problems will allow negotiations to flow freely and hopefully obviate the need for the trial. If a settlement conference is set up, it will not be the judge in front of whom this matter will be heard, so you need not fear that you will be prejudiced in any way if this matter is not settled.

COURTROOM ETIQUETTE BETWEEN THE COURT AND THE PARTIES

1.  Don’t take the argument personally (no personal slurs against the other party.)

2. Advocacy does not mean we cannot be civil and communicate with the other side.

3. Adversary proceedings are intended to be negotiated if possible.

4. If you cannot resolve the matter and proceed to trial, remember the following:

a. Dress Appropriately- Nice attire such as a suit or slacks is acceptable. Please no hats, shorts, thongs, tank tops, etc.

b. Your statements should be addressed to the court and not to the other side- The only time you should speak to opposing counsel is during breaks or with the Court’s permission after requesting a break.

a. Do not interrupt the other side or the judge when they are speaking.

b. Remember to follow the rules as explained in the attached documents regarding the filing of your trial statement, list of exhibits, witnesses, etc.

DEALING WITH THE LAW

1. Understand your responsibilities and respond accordingly. You are held to the same standard as an attorney when presenting your case and arguing the legal issues. You may need to educate yourself on the law at issue by visiting the law library and reading the Bankruptcy Code and cases dealing with those sections of the code involving your case.

2. Sanctions – Remember that if you act disrespectful to the Court or opposing attorney, or if you lie in your court pleadings or under oath at trial, the Court has the power to sanction you by either assessing a fee or ruling for the opposing party.

3. If you have any questions regarding your responsibilities, call the other side’s attorney they will answer procedural questions, but cannot assist you with your legal argument.

4. Know the Local Rules – you can obtain a copy by accessing the court’s website at http://www.uscourts.gov You may also be able to obtain the rules from the county law library or from opposing counsel.

 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 https://fightforeclosure.net/foreclosure-defense-package/ “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: https://fightforeclosure.net/foreclosure-defense-package/

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What Homeowners in Foreclosure Must Know About TRO and Injunction

06 Sunday May 2018

Posted by BNG in Federal Court, Foreclosure Defense, Judicial States, Litigation Strategies, Non-Judicial States, Pleadings, Pro Se Litigation, Restitution, State Court, Your Legal Rights

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Appeal, Foreclosure, foreclosure defense, homeowners, injunction, Law, Pro se legal representation in the United States, TRO

Very few people fully appreciate the powerful and flexible remedy offered by an injunction. Injunctions are extraordinary, both in terms of their timing and their effectiveness. Certain injunctions are issued with a rapidity otherwise unknown in the American legal system. Injunctions frequently have consequences so sweeping that they effectively shut down operating businesses or otherwise affect dramatically the rights of the parties involved in an irreversible manner – even when the requested injunction is refused. Two illustrative examples of the power of injunctions which have recently been seared into the American consciousness are the injunction against further ballot counting in Florida following the 2001 presidential election and the injunction ordering Napster, the Internet music swapping service, to cease and desist from operating.

Simply put, injunction proceedings are high stakes poker. If a party plays its first hand wrong, the game may be over before another hand is dealt. This article will explore the remedies available in an injunction proceeding, the timing implications involved in either seeking or defending an injunction, and the particular hallmarks incident to various kinds of injunctions.

The Remedies Available Through An Injunction

The only limitation on remedies available through an injunction is the creativity of counsel or of the judge hearing the case. Generally speaking, there are two kinds of relief available through an injunction: prohibitory and mandatory. A prohibitory injunction is the most common form of injunction, and directs a party to refrain from acting in a certain manner. Examples of a prohibitory injunction are cease and desist orders (entered against Napster), or an order stopping a bulldozer prior to the razing of an historic building. Injunctions can also be mandatory, however, in which case the court directs a party to take affirmative action. Examples of this kind of injunction were seen in the school integration and busing cases prevalent several decades ago. Whether prohibitory or mandatory, the only limit on the power of the trial judge (other than the role of appeals courts) is that the remedy selected be reasonably suited to abate the threatened harm and that the court be in a position to enforce its own order and assess a party’s compliance.

The Timing Implications Involved In Seeking Or Defending An Injunction

Similar to the type of remedy, courts and parties have significant flexibility regarding timing, so long as the party seeking an injunction is not guilty of unreasonable delay in requesting the court’s assistance. What constitutes “unreasonable” delay will vary from case to case. There are three kinds of injunction requests, which vary by the timing of the request. The first is called an ex parte injunction (also sometimes popularly known as a temporary restraining order, or TRO. The technical name for such an injunction in the Pennsylvania Rules of Civil Procedure is “special relief”). The other two kinds of injunctions are preliminary injunctions and permanent injunctions.

Ex Parte Injunctions

Ex parte injunctions are appropriate only when the threatened harm is so immediate and so severe that even giving the other party notice of the application for the injunction and an opportunity to be heard in opposition is not practical. Ex parte literally means one-sided. A party seeking the entry of an ex parte order (without the involvement of or even notification to the other party most directly affected) has an exceedingly heavy burden in convincing a judge the emergency warrants such extreme action. By definition, there will not be even minimal due process afforded to the affected party; therefore, the courts’ rules require certain safeguards to protect it. For example, in state court in Pennsylvania, an interim order granted on an ex parte basis may not remain in effect for more than five days without the commencement of a hearing. Furthermore, the party seeking such an injunction also has the obligation to post a monetary bond which the judge deems sufficient to compensate the affected party if it is later determined that the ex parte injunction should not have been granted.

During an ex parte injunction hearing, there is frequently no actual hearing. Although a judge is free to insist upon a full evidentiary presentation, he or she usually permits these applications to be presented in chambers. The presentation of such an application represents one of the only instances in our legal system where one party’s attorney has the opportunity to sit down with the judge and render an entirely one-sided version of the matter before the court. Although the lawyer is acting as an advocate for his client, he or she must be scrupulously honest and avoid exaggerating the circumstances. Engaging in any form of overreach throughout this onesided process can have disastrous effects on both counsel and client, once the adversely-affected party is represented and has an opportunity to tell its side of the story. For obvious reasons, judges react very poorly to being sandbagged.

There is no requirement that a party seeking injunctive relief make a request for ex parte relief. Instead, because judges are very reluctant to grant such requests, and given the heavy burden involved in all actions for injunctions, it’s wise for a client not to risk its credibility before the court by asking for ex parte injunctive relief unless it is truly necessary. Counsel will advise requesting ex parte relief only where circumstances are very favorable.

Preliminary Injunctions

A preliminary injunction represents the most common form of injunctive relief requested. A preliminary injunction differs from an ex parte injunction in that the affected party is given notice that the application has been filed and has an opportunity to appear and be heard at a formal hearing where both parties may present evidence. Unlike ex parte injunction practice, a preliminary injunction almost always involves an evidentiary presentation in open court. Although not a full-blown trial, these hearings are critically important and set the stage for any litigation to come. In many cases, these hearings – and the judge’s reaction to them – constitute the entirety of the litigation.

More often than not, preliminary injunction hearings are conducted without the benefit of a significant amount of time to prepare and without the benefit of discovery, through which documents and testimony from the other side and its witnesses can be obtained prior to the hearing. Therefore, unless the party seeking the injunction is certain it fully understands the case and is completely prepared to present its case at hearing, it is a good idea to attempt to secure a court order to allow for limited discovery in preparation for the hearing to be conducted on an expedited basis, sometimes the very day before the hearing.

At the hearing, the party seeking the injunction has the burden of convincing the judge of a number of things. (Injunction requests are presented to a judge sitting without a jury. Therefore, the more counsel knows about the judge, including his or her political and ideological leanings, the better). Among the elements which must be proven by the party seeking the injunction are: (1) it has no adequate remedy other than an injunction (such as money damages); (2) truly irreparable harm will occur in the absence of an injunction; (3) it is more likely than not that the moving party will prevail on the underlying merits when the matter ultimately goes to trial; (4) the benefit to the party seeking the injunction outweighs the burden of the party opposed to the injunction; and (5) the moving party’s right to the relief sought is clear.

Although these are somewhat flexible – even vague – standards, the judge must be satisfied that all of these elements have been satisfactorily proven prior to granting an injunction. Needless to say, it is easier for the defendant to argue that one or more of these five elements has not been satisfactorily proven than it is for the moving party’s lawyer to argue that all five have been proven. The law sets such exacting standards because the consequences of an injunction can be so dramatic.

The Role of the Injunction Bond

The purpose of the injunction bond is to protect the party against whom the injunction has been entered in the event it is later determined that the injunction should not have been granted. Assuming the judge is persuaded by the proof at the hearing and is willing to grant an injunction, a determination as to the appropriate amount for the injunction bond must be made. The party seeking the injunction will predictably argue that its proof has been so strong that only a nominal bond should be required. Conversely, the adversary will argue that only a significant bond will be adequate to protect his or her client. The judge must balance these competing arguments. Particularly in the event that the judge had any reservation regarding the strength of the moving party’s case, the setting of the bond is another manner in which he or she may protect the interests of the party to be enjoined. There are circumstances where the bond is so sizable that the moving party, which has successfully demonstrated its entitlement to an injunction, will not or cannot satisfy the bonding requirement. In such a case the injunction will not become effective: No bond, no injunction. Thus, it is possible that a party can lose on the merits at the hearing, but never actually be enjoined due to its adversary’s failure to post the required bond.

The Role of the Appellate Court

Most court orders are not subject to an appeal until the case is over in all respects. Orders affecting injunctions, however, are exceptions to this rule. A party dissatisfied with a judge’s decision regarding an injunction – whether that decision grants, denies, modifies, dissolves or otherwise affects an injunction – has an immediate right to appeal that judge’s ruling in both the state or the federal court systems. However, although an appeal is available, it will usually prove extremely difficult to overturn the trial judge’s decision because of the manner in which appellate courts review decisions concerning injunctions. Furthermore, in all but the rarest of occasions, the injunction will remain in place throughout the appeal process, which can itself be lengthy.

Essentially, the court system recognizes that decisions involving injunctions are necessarily made in a somewhat subjective manner and are also made under sometimes severe time constraints. Appellate courts therefore defer to trial judges’ findings and generally believe that the judge who heard the evidence first-hand is in the best position to evaluate the case. As a result, the standard on appeal is very narrow: The trial judge’s decision will be upheld if there is any evidence in the record to support the decision. It doesn’t matter whether the appellate judges would have reached the same decision or not. The thinking is that the trial court should exercise its discretion in the first instance and, if there is more than one plausible interpretation of the evidence, the trial court’s acceptance of any particular interpretation cannot be an abuse of that discretion.

Permanent Injunctions

There is no requirement that a party seeking permanent injunctive relief first request either ex parte or preliminary relief. A permanent injunction may be sought as part of the full trial on the merits in an action, regardless of the outcome of prior proceedings in the case. In reality, however, many injunction cases do not proceed this far because, as previously indicated, the earlier proceedings (the granting or refusal of an ex parte or preliminary injunction) frequently alter the landscape so significantly that further proceedings are never pursued.

Sometimes, however, a permanent injunction is sought following previous proceedings. A permanent injunction may be sought, for example, where a party has been dissatisfied with the outcome of a preliminary injunction proceeding, but remains adamant about securing its rights. With the chances of a successful appeal so low, either the winner or the loser at the preliminary injunction level may elect to press on with discovery and attempt to convince the trial judge to change his or her decision after hearing all of the evidence. (Naturally, the judge’s first impression is always hard to overcome.) As with any order affecting an injunction, a dissatisfied party may appeal from any order entered in consideration of a request for permanent injunction. With a fully developed trial record, the appellate court will be somewhat less deferential to the trial court’s conclusion, yet a successful appeal remains difficult.

Injunctions are particularly powerful and flexible tools, which can have dramatic consequences to the parties involved. Homeowners can use injunction to delay moving out of the property while wrongful foreclosure Appeal is pending. A Homeowner seeking an injunction or attempting to defend against one should be well versed how these procedures works, if you are litigating Pro Se, or Secure counsel familiar with the intricacies of injunction practice.

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 https://fightforeclosure.net/foreclosure-defense-package/ “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: https://fightforeclosure.net/foreclosure-defense-package/

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What Pro Se Homeowners Must Know About Appellate Issues and Record on Appeal

28 Saturday Apr 2018

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

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Appeal, Appellate court, Appellate Issues, appellate proceeding, appellate record, arguments for appeal, closing argument, Jury instructions, litigator, Motion in Limine, Objections, post-judgment, pre-trial, Pro Se Litigating, Pro Se litigator, Pro Se trial litigators, Record on Appeal, trial, Trial court

Trying cases is one of the most exciting things a litigator does during his or her career but it is also certainly one of the most stressful.

While over 90% of the cases never make it to trial before settlement, if your case is one of the 10% or less that made it to trial, as a Pro Se litigator, there are few things to bear in mind.

A study conducted few years back shows that About 97 percent of civil cases are settled or dismissed without a trial. The number tried in court fell from 22,451 in 1992 to 11,908 in 2001, according to the study. Plaintiffs won 55 percent of the cases and received $4.4 billion in damages.

Homeowners litigating their wrongful foreclosure cases Pro Se are not Attorneys by profession, however, this post is designed to help Homeowners perfect and win their wrongful foreclosure Appeals.

Your case on appeal can be greatly improved by focusing on potential appellate issues and the record on appeal from the start of a case until the finish.

While in the trenches during trial, many litigators understandably focus all of their energies on winning the case at hand. But a good litigator knows that trial is often not the last say in the outcome of a case. The final outcome often rests at the appellate level, where a successful trial outcome can be affirmed, reversed, or something in between. The likelihood of success many times hinges on the substance of the record on appeal. The below discusses a variety of issues that Pro Se trial litigators should keep in mind as they prepare and present their case so they position themselves in the best possible way for any appeals that follow.

Prepare Your Appellate Record From The Moment Your Case Begins

Perhaps one of the biggest misconceptions regarding preserving an adequate record on appeal is when a Pro Se litigant should start considering what should be in the record. In short, the answer is from the moment the complaint is filed. At that time, Pro Se Litigants should begin to think carefully about the elements of each asserted cause of action, potential defenses and their required elements, and the burden of proof for each. Every pleading should be drafted carefully to ensure that no arguments are waived in the event they are needed for an appeal. For instance, a complaint should allege with specificity all the factual and legal elements necessary to sustain a claim, while an answer should include any and all applicable affirmative defenses to avoid waiver. See, e.g., Travellers Int’l, A.G. v. Trans World Airlines, 41 F.3d 1570, 1580 (2d Cir. 1994) (“The general rule in federal courts is that a failure to plead an affirmative defense results in a waiver.”).

Likewise, if you file a motion to dismiss, ensure that the motion contains all the
necessary evidence that both a trial court and appellate court would need to find in your favor.

Of particular importance in federal court practice is the pre-trial order. Under Federal
Rule of Civil Procedure 16, the pre-trial order establishes the boundaries of trial. See Elvis Presley Enterprises, Inc. v. Capece, 141 F.3d 188, 206 (5th Cir.1998) (“It is a well-settled rule that a joint pre-trial order signed by both parties supersedes all pleadings and governs the issues and evidence to be presented at trial.”). If the pre-trial order does not contain the pertinent claims, defenses or arguments that you wish to present at trial, you are likely also going to be out of luck on appeal.

Later on in the case, as the factual record becomes more fully developed, consider
whether amending or supplementing the pleadings or other court submissions are necessary to make the record as accurate as possible. Most states follow the federal practice of allowing liberal amendments. However, these can be contested, particularly late in the process, closer to trial. While appellate review is often for abuse of discretion, formulating a strong motion in favor of or in opposition to an amendment can preserve the issue.

What to Keep in Mind as Your Case Proceeds

As the case develops, consider whether the elements you need to prove your case are
sufficiently reflected in the information you obtain during discovery. If not, determine whether there are ways to obtain the information you need well before trial starts. By the time trial arrives, it may be too late to supplement the record to get before the trial judge and the appellate court what you need to win your case. In that regard, anything you have in writing that gets submitted to the court may very well end up being part of the record on review, so make sure it is accurate and understandable. Incomprehensible or incomplete submissions can muddy your appellate record and damage a successful appellate proceeding. In the same vein, make sure
anything presented to the court prior to trial that you want to be part of the record is transcribed.

Otherwise, there will be an insufficient record on appeal. This is particularly so when it comes to discovery disputes. Although they are common in present day litigation, judges hate discovery disputes. To preserve discovery issues for appeal, be sure to get a ruling, and make sure it is reflected in writing. Moreover, carefully review every pre-trial court order or other judicial communication, including court minutes, to ensure accuracy. Attempting to make corrections during the appellate process may not be possible.

Another significant area for appellate issues is the failure to timely identify experts. This is subject to an abuse of discretion standard of review, so it is important that one builds a record on the issue, particularly regarding any prejudice suffered by the untimely disclosure.

After Discovery Closes – The Motion in Limine

Once discovery has closed, consider carefully any motions in limine you may want to
make. Although motions in limine are not strictly necessary, they are helpful in identifying evidentiary issues for the judge and litigant and increase the chances of a substantive objection, sidebar, and ruling when the issue arises at trial. One potential pitfall – some jurisdictions require a party to renew an objection at trial after a motion in limine has been denied, so make sure to do so if necessary. See, e.g., State ex. Rel Missouri Highway and Transp. Com’n v. Vitt, 785 S.W.2d 708, 711 (Mo. Ct. App. E.D. 1990) (“A motion in limine preserves nothing for review. Following denial of a motion in limine, a party must object at trial to preserve for appellate review the point at issue.”) (internal citation omitted). Also, if the Court delivers its ruling on a motion in limine orally, make sure it is transcribed properly by the court reporter.
Leave no doubt that you have raised (and obtained a ruling on) an issue.

Now the Trial – What to Keep in Mind

Above all else, when in doubt, object. Objections should be immediate and specifically describe the basis for the objection so the record is clear. Make the argument to win –
every objection should be more than just reciting labels, and should provide sufficient information for the trial judge to decide the issue. The goal is not to be coy with the trial judge and hope for a lucky break, but to be prepared to make an argument to win the issue at trial or, alternatively, on appeal. In addition, if you are the party proffering the evidence, make sure the proffer is on the record and that you expressly state why the evidence is being offered. This may require pressing on the judge to get the full objection on the record. If you fail to do so, you risk the appellate court not reviewing the claim on appeal. See, e.g., National Bank of Andover v. Kansas Bankers Sur. Co., 290 Kan. 247, 274-75 (2010) (observing “purpose of a proffer is to make an adequate record of the evidence to be introduced … [and] preserves the issue for appeal and provides the appellate court an adequate record to review when determining whether the trial court erred in excluding the evidence.”). Also, always be careful of waiving any issues for appeal by agreeing to a judge’s proposed compromise on evidentiary issues.

An important but often overlooked consideration is the courtroom layout and dynamics. Well-thought and timely objections will be for naught if they are not transcribed. Sometimes the courtroom layout can make record preservation difficult. For example, if objections are made at sidebar conferences where the court reporter is not present, those objections may not make their way into the appellate record or be dependent on the after the fact recollections of others. See, e.g., Ohio App. R. 9(c) (describing procedures for preparing statement of evidence where transcript of proceedings is unavailable and providing trial court with final authority for settlement and approval). This should be avoided whenever possible.

Beyond objections, make sure all the evidence you need for your appeal is properly admitted by the trial court before the close of your case. All exhibits that were used at trial should be formally moved into evidence if there is any doubt as to whether they will be needed on appeal. If you had previously moved for summary judgment and lost, make sure you take the necessary steps at trial to preserve those summary judgment issues, especially in jurisdictions that do not allow interlocutory appeals.

Another important aspect of the trial is the jury instructions. Jury instructions should always be complete. Remember that the instructions you propose can be denied without error if any aspect of them is not accurate, so break them into small bites so that the judge can at least accept some parts. Specifically object to any jury instructions as necessary before the jury begins its deliberations. See, e.g., Fed. R. Civ. P. 51(c). Failure to do so will waive the right to have the instruction considered on appeal. See, e.g., ChooseCo, LLC v. Lean Forward Media, LLC, 364 Fed. Appx. 670, 672 (2d Cir. 2010) (finding that defendant’s objection to jury instructions and verdict form during jury deliberations did not comply with Fed. R. Civ. P. 51(c) and noting that the “[f]ailure to object to a jury instruction or the form of an interrogatory prior to the jury retiring results in a waiver of that objection.”).

Additionally, when you lodge your objections, make sure you explain why the jury charge is in error since general objections are insufficient. See, e.g., Victory Outreach Center v. Meslo, 281 Fed. Appx. 136, 139 (3d Cir. 2008) (holding that general objection to the court’s jury instructions and proposed alternative instructions, “were insufficient to preserve on appeal all potential challenges to the instructions” and were not in compliance with Fed. R. Civ. P. 51(c)(1)). If possible, have a set of written objections to the other side’s jury charges, and get the judge to rule on that, since judges like to hold such conferences off the record.

Also, do not overlook the verdict form. Know that when you agree to a particular form (general or special), that will mean that you are probably taking certain risks and waiving certain arguments one way or the other. Give this thought, and make sure that you know the rules of your jurisdiction on verdict forms so you can object if necessary. See, e.g., Palm Bay Intern., Inc. v. Marchesi Di Barolo S.P.A., 796 F.Supp. 2d 396, 409 (E.D.N.Y. 2011) (objection to verdict sheet should be made before jury retires); Saridakis v. South Broward Hosp. Dist., 2010 WL 2274955, at *8 (S.D. Fla. 2010) (noting that Federal Rule of Civil Procedure 51(c)(2)(B) states that an objection is timely if “a party objects promptly after learning that the instruction or request will be … given or refused” and that the Eleventh Circuit “require[s] a party to object to a … jury verdict form prior to jury deliberations” or the party “waives its right to raise the issue on appeal.”). (internal quotations and citation omitted).

Finally, pay careful attention to the closing argument. This can be an area where winning at trial by convincing a jury may be at odds with preserving the issue on appeal. On the flip side, many litigators are loath to interrupt a closing argument to object. If you need to object to preserve an issue, do so.

Post-Judgment – Final Things to Consider

First, determine whether certain arguments must be made post-judgment to preserve those arguments for appeal. Some arguments (such as those attacking the sufficiency of the evidence) must be made at that time or they are waived. See, e.g., Webster v. Bass Enterprises Production Co., 114 Fed.Appx. 604, 605 (5th Cir. 2004) (holding that failure to challenge back pay award in post-judgment motion waived the issue on appeal absent exceptional circumstances that did not exist). Written motions post-judgment should include all relevant references to trial transcripts and evidence to make as complete and clean a factual record as possible.

Second, when the appellate record is being compiled, carefully double check the record to ensure its accuracy. Many times the trial court clerk or court reporter accidentally omits portions of the record. If this is not caught and corrected in a timely manner, you may be stuck with a bad record. Most jurisdictions have procedures in place for supplementing and correcting the record but understand them well in advance so there is adequate time to address any discrepancies before the appellate briefing is due.

Conclusion

Too often even seasoned trial lawyers get tripped up on appeal by not having an orderly and complete record. As a Pro Se litigator, you must never lose sight of the factual and legal issues in a case and what an appellate court will need to consider in making the desired determinations. As demonstrated above, a winning record requires thought at all stages of the litigation, not just when the notice of appeal is filed. With proper preparation, attention to detail, and forethought, one can ensure that the proper record on appeal is never in doubt.

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 https://fightforeclosure.net/foreclosure-defense-package/ “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: https://fightforeclosure.net/foreclosure-defense-package/

 

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What Homeowners Must Know About Mortgage Fraud & Restitution

10 Tuesday Apr 2018

Posted by BNG in Banks and Lenders, Case Laws, Case Study, Foreclosure Crisis, Foreclosure Defense, Fraud, Judicial States, Legal Research, Litigation Strategies, Mortgage fraud, Mortgage Laws, Non-Judicial States, Pro Se Litigation, Restitution, State Court, Your Legal Rights

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Foreclosure, homeowners, Law, Lawsuit, Loan, Monetary Restitution, Mortgage fraud, Nevada, Ninth Circuit, Pro se legal representation in the United States, Restitution

During the peak of the housing boom in Las Vegas, Russell, a mortgage loan processor for a large bank, reviewed a mortgage application. Everything appeared to be in order: this particular type of mortgage loan required no income verification because the buyer had excellent credit and the home would be an owner-occupied property. Russell approved the loan for the bank.

Unbeknownst to Russell and the bank, the applicant was actually a “straw buyer,” using his name and credit to buy the house at the insistence of his business partner, but not actually intending to live in the house. All the applicant had to do was sign a few documents and both the applicant and his business partner would profit from exploding housing prices. The applicant’s credit would allow the pair to purchase a single-family residence for $295,000, and then, before the first mortgage payment came due, they would flip the property, that is, immediately sell the home, and profit from the home’s extraordinary short-term appreciation. The applicant never planned on living in the house nor making any mortgage payments, despite his execution of loan documents to the contrary.

Unfortunately, housing prices did not continue their fantastic escalation and the pair were unable to sell the home. Not surprisingly, neither the applicant nor his business partner made any mortgage payments and the home went into foreclosure. At the time of the home’s foreclosure, the house had a fair market value of $265,000. However, the bank that relied on the applicant’s information had too many similarly situated properties at the time of the foreclosure and decided to keep the home in inventory until it could sell the home at a later date.

Meanwhile, the financial institution became suspicious of the applicant and realized he never even moved into the house, despite claiming on his Uniform Residential Loan Application that this would be an “owner-occupied” property.

Concerned with an increase in mortgage fraud, the lender tipped off authorities, who subsequently investigated and arrested the straw buyer and his business partner. Almost a year later, the partners pled guilty and were sentenced, inter alia, to pay restitution to the financial institution. At the time of sentencing, the home had a fair market value of $145,000.

The court ordered restitution based on the Mandatory Victims Restitution Act (MVRA) concerning fraud and property. The victim, in this case the bank, argued its amount of loss equaled $295,000 (the amount originally borrowed) less the current fair market value of the property returned, $145,000; thus, the court should order the defendants to pay restitution of $150,000. On the other hand, the defendants argued that at the time the property was returned to the financial institution, the value of the home was $265,000. And because the bank had control over the property since that point in time, and had the ability to sell it any time, the defendants should not be liable for the further declining
market conditions. Thus, the defendants argued they only owed restitution of $30,000. Alternatively, the judge could consider a third possibility: recent  recommendations from US Sentencing Guidelines. Under these new guidelines,
the court determines the fair market value of the home on the defendants’ sentencing
date.

But, if the bank had not sold the home by that date, that fair market value would be based on the county’s assessed value of the property. In Clark County, where Las Vegas is situated, the Assessor’s Office updates property values annually and, depending on the specific time frame in this hypothetical, the assessment value can range from a lagging property assessment valuing the home at $280,000 to a more current assessment valuing the home at $125,000.

Which measure of restitution and subsequent calculation is best? That is, which value most adequately compensates the injured victim without unfairly burdening the defendants? The Ninth Circuit would side with the defendants in this case, having previously held that the value of the home on the date the bank gains control is the proper measure of restitution. Accordingly, the defendants in this case would be ordered to pay only $30,000 in restitution. On the other hand, the Seventh Circuit would hold that the “property” stolen was the money used to finance the home purchase, and not the actual home.

Subsequently, the “property” is not returned to the victim until the bank sells the
house and gets the entire amount it loaned to the defendants back. For that reason, if the bank sold the home by the sentencing date for $145,000, the defendants would be ordered to pay $150,000 in restitution. And if a judge considered the US Sentencing Guidelines, she would look to the local assessor’s office to determine the correct value. Thus, the amount of restitution a defendant pays depends on where the mortgage fraud takes place and whether the presiding judge considers the US Sentencing Guidelines. Accordingly, mortgage fraud restitution is not uniform throughout the United States.

This note discusses the circuit split in applying the Mandatory Victims Restitution Act of 1996 to mortgage fraud crimes—specifically, the difference in the mortgage fraud restitution formula. In Part I, I provide an introduction to mortgage fraud. In Part II, I provide background on the Mandatory Victims Restitution Act of 1996, which established a directive to courts to order restitution to identifiable victims. Further, the Act indicated, albeit imprecisely, that the restitution amount is based on the property’s value on the sentencing date, less the property’s “value” on the date the property is returned. Regrettably, the Act does not provide a definition of the word property,” which has resulted in a circuit split. Three circuit courts calculate the mandatory restitution as the property’s “value” based on the date the property is returned—that is, the property’s fair market value on that date. On the other hand, four circuits insist that the “value” of the property can only be determined when the bank actually sells that property. In Part III, I will discuss the circuit split where courts disagree on the “appropriate” restitution calculation.

In an effort to provide a uniform calculation, last year the US Sentencing Commission proposed changes to the US Sentencing Guidelines. While the Guidelines are only advisory and not mandatory, these recent amendments result in a third possible calculation that I discuss in Part IV.

Finally, in Part V, I critique each of the three imperfect approaches. In addition, I provide comparisons to various state foreclosure deficiency statutes as an illustration of alternative calculations. I conclude by proposing an amendment to the Mandatory Victim Restitution Act that, in the cases of collateralized loans obtained by fraud, defines “property” as the actual property fraudulently obtained: cash. In addition, I propose an additional “good faith” clause to the amendment to prevent banks from holding onto a foreclosed property longer than necessary. The sooner a property is sold, the sooner the bank recuperates some of its lost funds and the sooner a defendant knows the restitution
amount he must pay.

A. What is Mortgage Fraud?

In the hypothetical above, the partners executed mortgage fraud by using the applicant’s name and credit as a “straw buyer.” That is, a person who allows his name to be used in the loan process but has no intention of actually making any mortgage loan payments. Mortgage fraud comes in a variety of forms. For example, a person commits loan origination fraud when he misrepresents or omits information on a loan application upon which an underwriter ultimately relies to write a loan. Mortgage fraud can also occur with illicit programs aimed at current homeowners who are having trouble with their payments. Lately, this type of foreclosure rescue fraud is increasing. These types of scams focus on homeowners on the verge of foreclosure. Criminals promise to “stop or delay the foreclosure process,” and, in return, homeowners sign over their property to the criminals.

Mortgage fraud can also include “flopping.” Flopping occurs when a bank agrees to a short sale with the homeowner who then attempts to get the lowest price possible by purposefully damaging the soon-to-be-sold house. The house is then bought by an accomplice, cleaned up, and immediately flipped for a profit of upwards of 30 percent. In 2011, Nevada ranked second to Florida in the Mortgage Fraud Index (MFI), a ranking of states based on reported fraud and misrepresentation investigations. The FBI investigates mortgage fraud through Suspicious Activity Reports (SARs) filed by financial institutions.

The number of mortgage fraud SARs filed in 2011 was 93,508. To put this in perspective, in 2003 the number of reports filed was less than 7,000. However, mortgage fraud may be decreasing: 2012 SARs are down 25 percent compared to the previous year.

B. Why Does Mortgage Fraud Matter?

Mortgage fraud is a “significant contributor” to our economic crisis. Mortgage fraud has contributed to an increasing number of home foreclosures, decreasing home prices, and tightening of credit because of investor losses attributable to mortgage-backed securities. Further, “[t]he discovery of mortgage fraud via the mortgage industry loan review processes, quality control measures, regulatory and industry referrals, and consumer complaints lags behind economic indicators—often up to two years or more, with the impacts [of the fraud] felt far beyond these years.” Undeniably, reports of mortgage fraud persist and are continually emphasized in the news.

Lenient underwriting standards and a booming housing market have shaped a perfect backdrop for fraud to thrive. However, “[b]y 2007, real estate values began to fall and mortgage lenders began experiencing large losses due to fraud, reducing their ability to fund new mortgage loans.” The economic implications of mortgage fraud are staggering. The actual dollar amount attributed to mortgage fraud is unknown, however in 2010 alone “more than $10 billion in loans originated with fraudulent application data.”

Moreover, in fiscal year 2012, 70,291 SARs were filed with losses of $2.69 billion. And while the number of mortgage fraud instances has decreased, the dollar amounts involved in instances of fraud has increased.

C. Why Restitution?

Until the early 1980s, courts did not habitually consider restitution as part of sentencing guidelines. In fact, if a court ordered restitution, it was usually based on the defendant’s ability to pay. The passage of the Victim and Witness Protection Act (VWPA) in 1982, its subsequent revision in 1986, and later the Mandatory Victims Restitution Act (MVRA) in 1996 empowered federal judges to order restitution to victims of certain crimes without consideration of the defendant’s ability to pay. Unfortunately, victims receive only a fraction of the costs from crimes through restitution, as not all defendants have the resources to pay the restitution and their income potential diminishes significantly once they are in jail. However, as courts consider both the MVRA and the frequently cited public policy argument for restitution (making the victim whole), courts consequently order restitution awards to mortgage fraud victims. Indeed, “[v]ictims in mortgage fraud cases are statutorily entitled to restitution.

D. The Split

When a court convicts a defendant of mortgage fraud, and the defendant’s return of the property alone is not enough to fully restore the identified victim, the court will try to offset this deficiency in one of two ways. The Second, Fifth, and Ninth Circuits determine restitution based on the property’s fair market value the day the victim receives title to the property. The Third, Eighth, Tenth, and, most recently, Seventh Circuits hold the shortage is calculated based on the actual sale of the collateral real estate. Thus, the value of the property is unknown until the property has been sold and the lender receives the net proceeds. Consequently, this split “sets up a potential case for the U.S.
Supreme Court to decide whether the MVRA requires a court to determine restitution based on the fair market value of collateral real estate on the date it is returned to a victim . . . or the cash value upon foreclosure sale.”

II. THE MANDATORY VICTIMS RESTITUTION ACT OF 1996

Congress first enacted legislation in support of victims’ rights with the Victim and Witness Protection Act of 1982 (VWPA). The act included a broad provision for victim restitution. In considering the bill, the Committee on the Judiciary indicated that [t]he principle of restitution is an integral part of virtually every formal system of criminal justice, of every culture and every time. It holds that, whatever else the sanctioning power of society does to punish its wrongdoers, it should also insure that the wrongdoer is required to the degree possible to restore the victim to his or her prior state of well-being.

However, while this report indicated the importance of requiring restitution,
the Act only provided that a Court may order the defendant to pay restitution. Congress expanded and amended legislation for victims in future legislation, most notably in the Mandatory Victims Restitution Act of 1996. Congress identified one of the primary purposes of the Act as “requiring Federal criminal defendants to pay full restitution to the identifiable victims of their crimes.” In addition, Congress specifically made mandatory restitution applicable to fraudulent crimes against property. Moreover, Congress explicitly identified the legislation’s purpose:

This legislation is needed to ensure that the loss to crime victims is recognized, and
that they receive the restitution that they are due. It is also necessary to ensure that
the offender realizes the damage caused by the offense and pays the debt owed to the
victim as well as to society. Finally, this legislation is needed to replace an existing
patchwork of different rules governing orders of restitution under various Federal
criminal statutes with one consistent procedure.

If restitution is appropriate, a court may only award it to identifiable victims. A
federal crime victim is defined as “a person directly and proximately harmed as
a result of the commission of a Federal offense or an offense in the District of Columbia.” Further, restitution is only applicable to crime victims when the
defendant is actually convicted. In addition, “[a] ‘victim’s’ participation in a
fraudulent mortgage scheme . . . will generally exclude the victim from
restitution.”

It should also be remembered that restitution, “like all criminal sanctions . . . is a sanction of limited application.” Restitution is only complete, then, when payment of the obligation is complete. In jurisdictions that allow “extended or nominal payment mechanisms,” which can prolong the repayment, the variable time value of money may cause any restitution to be technically incomplete, even once the balance is repaid in full. Unfortunately, only 17.4 percent of measured property offenses resulted in criminal charges. Where convictions of mortgage fraud do result, however, courts consider the language of the MVRA in awarding restitution:

The court may also order restitution . . . . The order may require that such defendant
. . . return the property to the owner of the property . . . or . . . if return of the property . . . is impossible, impractical, or inadequate, pay an amount equal to the greater of . . . the value of the property on the date of the damage, loss, or destruction, or . . . the value of the property on the date of sentencing, less the value (as of the date the property is returned) of any part of the property that is returned . . . .

Accordingly, when the return of the property is inadequate restitution, the MVRA states that the offset value must be determined as of the date the property is returned. However, the statute is silent as exactly how to measure the value of the property on that date. Consequently, in the absence of clear guidelines, three possible formulas have arisen.

III. THE CIRCUIT SPLIT

With a lack of clarity in defining “property” in the MVRA, the circuit courts have split in their interpretations of restitution. Two circuits have followed the Ninth Circuit in determining that the value of the property is the fair market value on the date of the property’s return, arguing that once the property is returned to the victim, the victim has control over the property and may dispose of the property whenever it chooses. Accordingly, these courts calculate the fair market value of the property based on the date the property is returned rather than waiting for a later sale. Conversely, four circuits hold that the “property” can only be valued when the house is eventually sold and the proceeds are provided to the victim because cash, not real estate, was the actual
property the defendants took from the victim.

A. The Ninth Circuit Method

A bank would say a restitution calculation can only be determined when the property is sold, but a defendant would argue that if a bank holds on to the property in a declining market, it is unfair for the defendant to pay more in restitution than what the property was worth when the victim regained control of it. The Ninth Circuit method considers the fairness of a bank refraining from selling a property immediately, and ultimately agrees with the defendant’s argument.

After the passage of the Victim and Witness Protection Act in 1982, the Ninth Circuit became the first circuit court to consider mortgage fraud restitution. The court turned to an earlier decision in a timber theft case for property valuation guidance. In United States v. Tyler, the defendant was ordered to pay restitution for his theft of timber from a national forest. However, the victim, the federal government, did not sell the timber upon its seizure and in fact purposefully held onto the timber, claiming it needed the timber for evidentiary purposes in its case against Tyler. During the period between the
arrest and sentencing, timber prices declined. The district court found that the
amount of restitution equaled the difference of the timber’s value from sentencing
date and the higher value when defendant actually stole the timber. The Ninth Circuit disagreed with the District Court and held that the defendant should not have an increased restitution when the victim decides to retain the property. The court reasoned that the defendant’s conduct did not cause the subsequent loss the government experienced and therefore restitution was properly calculated as the property’s value on the date the victim regained control of the timber.

The Ninth Circuit subsequently applied this logic to a mortgage fraud context in United States v. Smith, where the defendant obtained loans secured by speculative real estate. The court determined that the credit against restitution should be based on the value of the property on the date title is transferred to the victim. The court noted, “[a]s of that date, the new owner had the power to dispose of the property and receive compensation.” Because the victim has control over the property’s sale once the property is returned, “[v]alue should therefore be measured by what the financial institution would have received in a sale as of that date.”

The Smith decision served as the “keystone for all of the subsequent decisions.”
The Ninth Circuit reinforced this valuation method in later cases. Further, in United States v. Gossi, the court elaborated on its prior decisions that value should be based on the date the victim has control over the property. Specifically, the court noted that what comes with control of the property is the power to dispose, which allows the victim to sell the property anytime and provides no immediate calculation of restitution. Subsequently, the court cited Smith, stating the “[v]alue should therefore be measured by what the financial institution would have received in a sale as of that date.” Finally, this past year, the Ninth Circuit upheld its mortgage fraud restitution calculation in United States v. Yeung. In Yeung, the defendant enlisted five people in a scheme involving false information on straw buyers’ loan applications in order to purchase and refinance homes in Northern California during the booming housing market. The district court considered a sentencing memo indicating that Yeung should pay restitution in the amount of the “outstanding principal balance on the defaulted loans less any money recovered from a sale of the properties used as collateral for the loans.”

Applying the US Sentencing Guidelines, rather than the MVRA, the district court ordered a restitution award in excess of $1.3 million. The Court of Appeals, however,
indicated that a financial institution has control of the property either when the
property is sold or when, citing Smith, the lender “had the power to dispose of
the property and receive compensation,” and therefore restitution should be
based on the fair market value on the date the property is returned. One distinction in Yeung, however, involved a loan purchased on the secondary market. One of the loans had been sold from the originating lender to a loan purchaser at a discount. The court indicated that the “property” in such circumstances is the actual loan, and not the original real property. The court determined that the restitution calculation in this type of circumstance must consider how much the loan purchaser paid for the loan, “less the value of the real property collateral as of the date the victim took control of the collateral property.”

Further, the court disagreed with the district court’s calculation of one property’s value. The district court determined the value of one of the properties as $363,863—the amount the victim received from the property’s sale. However, this sale did not occur until sixteen months after the victim took control of the property. Accordingly, the court found the actual value should be determined from the date the victim took control of the property. Two circuits follow the Ninth Circuit’s restitution calculation. In both United States v. Reese and United States v. Holley, the Fifth Circuit maintained that a property’s value is determined based on the date the collateral property is returned to the lender. Further, in Holley, the Fifth Circuit specifically analogized the facts of Holley to the Smith case in subscribing to the Ninth Circuit calculation

Relatedly, in United States v. Boccagna, the Second Circuit performed an extensive analysis of how property value should be measured, ultimately agreeing with the Ninth and Fifth Circuits. The Boccagna court noted that the MVRA does not define how to determine the value of property. Instead, the court stated, the “law appears to contemplate the exercise of discretion by sentencing courts in determining the measure of value appropriate to restitution calculation in a given case.” The court found the property’s sale price was lower than the fair market value and remanded the case to determine this value as part of the restitution calculation.

B. The Seventh Circuit Method

In contrast, four circuit courts presume the fair market value is determined only by the actual sale of the property. I have referred to this calculation as the Seventh Circuit method because of that court’s recent decision in which it analyzed all circuit holdings to date. However, these decisions begin outside of that circuit. The Third Circuit, in United States v. Himler, observed that the return of the property would be inadequate to compensate the victim, and explicitly disagreed with the Ninth Circuit’s view that value of the property is “as of the date the victim took control of [it].” The court noted instead that real estate is an illiquid asset, and “is only worth what you can get for it.” Thus, the court held that restitution would equal the original loan amount, less the eventual amount recovered from a sale. Surprisingly in this case, waiting until the sale actually
occurred resulted in the defendant paying less restitution than he would have if the fair market value had been used. The condominium in Himler sold for significantly more than its presumed value when title was transferred, due to favorable market conditions.

The Tenth Circuit, in United States v. James, also concluded that value is based on the actual foreclosure sales price and not an appraised value when the property is returned to the mortgage holder. The court noted that the MVRA “generally uses the term ‘value,’ and does not limit calculation of ‘value’ only to the use of the ‘fair market value’ of the property at issue.” Further, because the statute does not specifically mention value as being fair market value, there are other examples of value that may be appropriate, such as foreclosure sales price and replacement price. The court subsequently noted that
value can be a flexible concept, and a court with discretionary powers should keep in mind the purpose of restitution—to make the victim whole. The court concluded, therefore, that the foreclosure sale price in that case reflected a more accurate measure of the victim’s loss. Similarly, the Eighth Circuit, in United States v. Statman, used the foreclosure sale price of a fraudulently purchased bakery business in calculating the restitution award to a state’s small business-funding agency. While the defendant wanted the court to consider the appraised value of the bakery, the court cited James and determined that a foreclosure sale price was a permissible calculation method. The court also agreed with the Tenth Circuit; its decision aligns with the public policy concerns, which justify the existence of restitution in the first place—the need to make victims whole for the actual loss. While this case involved financial fraud, and not mortgage fraud per se, the chosen calculation method aligns this circuit with the sale-price camp.

Most recently, in United States v. Robers, the Seventh Circuit joined the Third, Eighth, and Tenth Circuits concluding “it is proper to determine the offset value [of property that is returned] based on the eventual amount recouped by the victim following sale of the collateral real estate.” The court observed that because the victim loaned cash to the defendants to purchase the property, the cash was therefore the “property” taken, not a home. Basing its opinion on the plain language of the MVRA, the Seventh Circuit decided that “ ‘property’ must mean the property originally taken from the victim,” the value can only be determined by the amount of cash returned to the victim from a sale.

IV. YET ANOTHER PERSPECTIVE—US SENTENCING GUIDELINES

The US Sentencing Guidelines are advisory rules that set out uniform sentencing guidelines for various offenses. The Guidelines are not mandatory,
and while judges have discretion in sentencing, courts must consider the Guidelines
in determining a defendant’s sentence. Moreover, a court of appeals reviewing a sentence that follows the Guidelines will consider the sentencing reasonable per se. Under these Guidelines, the factors considered when imposing a sentence include restitution to the victim. Further, the Guidelines state that, “[i]n the case of an identifiable victim, the court shall . . . enter a restitution order for the full amount of the victim’s loss, if such order is authorized under 18 U.S.C. . . . § 3663.”

The US Sentencing Commission annually reviews the current Guidelines and proposes amendments to reflect inadequacies in recent sentences. Recent revisions to the Guidelines, however, are not consistent with the latest Seventh Circuit decision in Robers. In the Dodd-Frank Wall Street Reform and Consumer Protection Act, Congress issued a directive to the US Sentencing Guideline Commission to review and amend federal sentencing guidelines related to “persons convicted of fraud offenses relating to financial institutions or federally related mortgage loans and any other similar provisions of law.” The amendment subsequently attempts to address the inconsistencies with Application Note 3(E) and “credits against loss rule,” which offsets a victim’s
loss by any credit the victim has already received. In general, the rule deducts the fair market value of the property returned to the victim from the amount of restitution the defendant is required to pay. In other words, the restitution is offset by the collateral’s fair market value. The Commission specifically addressed the situation that the circuit courts have wrestled with—when the victim gets the collateral back but has not disposed of the property, resulting in a problematic value calculation. The Commission noted this and, in an attempt to provide uniform guidelines, it proposed two changes. The first change established a specific date of the fair. market value determination: “the date on which the guilt of the defendant has been established.” The second change “establishes a rebuttable presumption that the most recent tax assessment value of the collateral is a reasonable estimate of the fair market value.” The Commission suggests that a court may consider the accuracy of this measure by examining factors such as how current the assessment is and the jurisdiction’s calculation process. In sum, a court ordering restitution following these Guidelines would establish the value of the property based on the official date of the defendant’s guilt. In addition, if the property has been returned to the victim but remains unsold, a court will use the local tax assessor’s value of the property to determine the property’s value.

V. CRITIQUE OF THE THREE CALCULATIONS

The absence of a definition for the term “property” in the MVRA is the root of the different applications of the statute throughout the country. “When the court defines ‘property,’ the question is whether the statute refers to the property stolen or the property returned. They are not necessarily equivalent, particularly in the context of complex financial instruments . . . .” However, as stated previously, the Act’s purpose is to make the victim whole, and no matter which formula is used, each calculation has the potential to not achieve this goal.

A. The Ninth Circuit Method: Control as the Impetus

There are several advantages to the Ninth Circuit mortgage fraud restitution calculation method, which holds that the fair market value should be calculated based on the date the property is returned to the financial institution victim. First, the date reflects the date that control over the property has been returned to the victims. Accordingly, the bank then has the power to dispose of the property at its discretion without additionally penalizing the defendant if the victim refrains from selling the property on that date. For example, a victim may decide to hold on to the property, as in United States v. Tyler or United States v. Smith, coincidental with a declining market. A victim may have too
many properties in inventory to immediately put a particular property up for sale. Or a victim may be making a calculated business decision to retain the property for a certain period of time for accounting purposes. No matter the purpose behind the retention, it is unfair to place the additional penalty that coincides with declining real estate prices on the defendant who had no control or even influence over the property’s sale.

Second, this specific date requires no guesswork when attempting to calculate the amount of restitution, which results in better efficiency. On the date the bank gets the property back, an appraisal can determine the property’s fair market value. The court can immediately calculate the restitution amount with this figure. Waiting until the property actually sells could result in a delay of months or years to determine how much the actual proceeds from the sale are. As a result, the court has an almost immediate figure to apply to the calculation and can order the restitution award right away. On the other hand, the Ninth Circuit calculation method has some considerable weaknesses. First, real estate is an illiquid asset, and determining fair market value of an illiquid asset is difficult. An appraisal only suggests what the house could sell for, not what the house actually will sell for. In addition, appraisals are based on historical data of home sales, and during sharp market increases or decreases an appraisal will not reflect the most up-to-date real estate prices.

Second, the recent housing bubble created an economic environment where home prices decreased at a radical rate. Traditionally, such sharp declines are not a concern with real estate over the long run because, while real estate prices fluctuate, they eventually trend upward. However, in situations like the recent drops in home values, the victim-lender can be punished for the market decline, despite the fact the victim was actively trying to sell the property. In addition, amidst tightening credit conditions, fewer buyers may qualify to purchase a home. This results in too much supply, not enough demand, and
consequently puts further downward pressure on home prices. The victimlender
is therefore penalized for market conditions beyond its control and consequently
does not receive complete restitution. Further, a victim financial institution is not in the business of selling homes; it is in the business of making collateralized mortgage loans for qualified buyers. Not only will the lender have costs associated with selling the
home (for example, carrying costs or realtor commissions), the lender cannot make a sale magically happen, especially if the home is situated in a market flooded with other foreclosure sales. Thus, when the lender eventually sells the home, it can potentially face a greater loss, an inequity beyond its control.

B. The Seventh Circuit Method: Cash Proceeds are the “Property”

As discussed in Part II, the Seventh Circuit, along with three other circuits, requires a sale of the property in order to establish the net proceeds offsetting a restitution award. These circuits distinguish that the property fraudulently obtained was the cash proceeds to finance a real estate purchase, not the actual home. Thus, this method recognizes the illiquidity of real estate and instead requires cash proceeds from a property’s sale; therefore, no return of the property for restitution purposes occurs with just the transfer of title or “control” over the property.

In addition, this method provides a more exact amount to the restitution calculation. With an appraisal, a court only has an approximation of what the house is worth. With an actual sale, the court knows specifically what the home sold for, and also has information on the true net proceeds to the lender.

Finally, this method also provides a buffer of protection for a victim trying to sell a property in a declining housing market. If the victim is unable to sell the property immediately, and home prices continue to plummet, the victim will not be financially punished by an ensuing lower sales price of the property. Thus, by treating the property as cash proceeds and not calculating the restitution award until there is a sale of the property, this allows the victim to come closer to achieving full restitution because the funds returned are the original amount that was taken.

This calculation method, however, has some distinct disadvantages. First, calculating the amount of time a home will be on the market is a challenge. For example, in a downturn economy, is it appropriate for the defendants to wait for the home to sell for months or years? At what point should the restitution award sentence be official? Without an established time period for a requisite sale, there will be a decrease of both efficiency and certainty as the defendant will have to wait longer to find out what the value of the property is and therefore how much restitution is necessary. In addition, what if the lender purposely holds on to the property longer than necessary? Indeed, victim banks could make a “business decision” to hold onto a property for years before attempting to sell. This type of allowance does not encourage an efficient method of asset redistribution, which can delay economic recovery in a down economy. Further, what if the victim holds an improper foreclosure auction—for example, by failing to advertise the foreclosure sale—and subsequently purchases the home itself for an amount far lower than fair market value because of a (not surprising) lack of buyers? Should the
lender be rewarded for its misbehavior? On the other hand, some would argue
that between the two parties—a convicted criminal who attempted to defraud a
financial institution and a more innocent lender who trusted the criminal borrower—
the defendant should absorb the risk.

Further, it is possible in a booming housing market that a defendant will owe no restitution. For example, if the defendant fraudulently obtained a home loan for $200,000 and the victim lender subsequently sold the property for $205,000, the defendant will be absolved from restitution. However, if part of the goal of restitution is to make the victim whole, the victim is more than compensated in a booming housing market.

Moreover, this type of calculation can have an adverse effect on other types of property. Knowing that the value of the property is not calculated until the item is actually sold, a criminal has little incentive to actually return the property. This would not be a concern for real property, but the same legal framework could be applied to other forms of collateral that can be moved and hidden, like cars. Thus, a thief can choose to hold on to the property or never return the property because of a lack of incentive to return it immediately. Accordingly, “[t]he decision is focused on the statute’s goal of making victims whole but potentially interferes with the statute’s goal of returning property to
victims.” Consequently, “[i]f a defendant is going to be on the hook for the offset amount regardless of when the property is sold, then why return the property? Also, the decision may have the unintended consequence of interfering with the marketplace . . . .”

Finally, the loan in question in these circumstances is for a collateralized asset. The actual home provided security to the lender. As such, the lender bore the risk when it made the loan; however, the lender also understood it could foreclose on the home in case of default. Thus, this cost of doing business is already accounted for and a victim lender understands this type of risk when providing mortgage loans.

C. US Sentencing Guidelines: Local Property Assessment is the Real
“Value”

As discussed in Part IV, the US Sentencing Guidelines establish the date of valuation as the conviction date of the defendant. In addition, if the property has not sold by that date, the local property tax assessor’s value of the home is the value of the property for restitution calculation purposes. There are several advantages to this approach. First, if every circuit applied this approach, these guidelines would result in a uniform application throughout the country and would eliminate the conflicting restitution awards. In addition, this approach sets a number that can be calculated and independently verified. An individual could easily confirm the tax assessor’s value of the property and calculate the restitution.

Moreover, the Guidelines allow flexibility. For example, if a court determines that an assessed value is too divergent from a property’s fair market value, the court has discretion to address these differences and assign a fair market value.

The Guideline method, however, has potential disadvantages. First, as previously
noted, the assessed value may not be near the fair market value of the property, and a battle of experts may ensue as both the defendant and the victim claim otherwise. In addition, this discrepancy may afford too much discretion to judges when the goal of the Guidelines is to set a uniform policy.

In addition, this approach disregards the Seventh Circuit method recognizing that the property taken was the actual cash for the home loan. Instead, by relying on a tax assessor’s value if the home remains unsold, the Commission determined that the “property” is the tangible real estate, and not the cash that was lent. Again, if the victim were unable to sell the home in a declining housing market, the restitution award would fail to compensate the victim for its true loss.

D. Alternative Methods of Calculation – State Deficiency Statutes

The problematic issue of fair market assessment is not unique to restitution.
Every state and the District of Columbia have a deficiency statute, whereby a lender can obtain a deficiency judgment to recover the difference between a foreclosure sale price and the current outstanding balance owed on the mortgage loan. Not every jurisdiction, however, calculates this deficiency in the same way. For example, Nevada calculates the home value based on the actual sale price, not the fair market value when the property is returned to the lender. However, the court may also consider the home’s appraised
value in its determination.

Some states maintain that a foreclosure sale price determines the value of the home when calculating a deficiency judgment. In other words, these states determine that a property’s value is only determined at the time of the property’s sale. Therefore, this calculation is similar to the Seventh Circuit method whereby a property’s value can only be determined following a sale of the real estate.

Other states consider the fair market value of the property when considering a deficiency judgment. States that consider the fair market value at the time the property is returned coincide with the Ninth Circuit calculation method. Notably, some of these states are states that have had a high number of foreclosures and are within the Ninth Circuit: for example, Arizona and California. Other states provide that the courts have discretion to determine the appropriate value of the property. This discretion is analogous to the alternative offered by US Sentencing Guidelines. This alternative is available when a court deems the property’s assessed value is inappropriate and provides that a court has authority to consider other evidence in its determination of a property’s value.

Thus, just as there is a lack of uniformity in the restitution calculation depending on which state you live in, there is a corresponding lack of uniformity regarding deficiency judgments. While most states follow the foreclosure sale approach recognizing the property’s value can only be determined with an actual sale, this approach does not account for the amount of time a financial institution can choose to hold onto the property. It further fails to account for the lack of control a mortgagor has over the sale process. On the other hand, while the fair market approach recognizes the importance of the control aspect, this approach does not consider a mortgagee’s potential inability to sell in a down economy.

E. Analysis

Restitution is founded primarily on the idea that the victim should be made whole for his property loss. The actual property that was defrauded from a victim in mortgage fraud is the money lent as part of the real estate transaction.
Therefore, until the actual money is returned, equity has not been restored to the victim. However, equity also demands that a victim not take advantage of the criminal defendant and hold on to the returned real estate property longer than necessary to sell the real estate property. Therefore, there should be a limitation to ensure a victim does not unreasonably allow the property to languish. Accordingly, a “good faith” requirement should be included in any amendment to the MVRA, requiring a victim to sell the property to recoup funds with good faith. Thus, a defendant who believes a victim unfairly held onto a property for too long may petition the court to reduce the amount of restitution owed if the victim did not commence the sales process with good
faith.

If Congress were to amend MVRA, it should provide a definition of the term “property” to help distinguish between properties at the different phases of a financial transaction. Because of the diverse types of financial fraud—e.g. mortgage fraud compared with securities fraud—the term “property” may have more than one meaning within these contexts, and may also change throughout the transaction. For instance, consider a scheming debtor who fraudulently obtained a margin loan to purchase both mortgage backed securities and corporate bonds. The property “stolen” initially in this case is the fraudulently obtained cash used to purchase the assets. However, after the margin loan is received, the property now consists of two types of financial instruments within
the debtor’s portfolio. Indeed, the property in its current form (financial assets)
can be converted back to the form of the original property (cash). However, with the current definition of property, it is unclear if that conversion is even required.

The definition of property should state that “property” is defined as the specific or particular type of asset (such as cash) that the defendant secured from the victim. This way, the “property” returned to the victim (money) will be the same type of property stolen (money used to purchase the home). In addition, similar to many state statutes prohibiting insurance companies from operating in bad faith, the Act should prohibit victim-lenders from operating in bad faith.

VI. CONCLUSION

Defendants, like the partners in the fictional story in the introduction, could face varied restitution awards depending on which state they commit the mortgage fraud in. This lack of a uniform approach results in inadequate restitution to victims. If the goal of the MVRA is to make victims whole, a more standardized and consistent calculation of restitution is required. Providing a definition of property in the MVRA would provide this uniformity. Further, requiring victims to act in good faith as they attempt to convert property back to the type of asset they were deprived of will help ensure defendants aren’t unfairly punished.

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 https://fightforeclosure.net/foreclosure-defense-package/ “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: https://fightforeclosure.net/foreclosure-defense-package/

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How Homeowners Can Use Ibanez Case to Fight a Wrongful Foreclosure

26 Monday Mar 2018

Posted by BNG in Bankruptcy, Banks and Lenders, Case Laws, Case Study, Federal Court, Foreclosure Crisis, Foreclosure Defense, Fraud, Judicial States, Legal Research, Litigation Strategies, Loan Modification, MERS, Mortgage Laws, Mortgage mediation, Mortgage Servicing, Non-Judicial States, Pro Se Litigation, Securitization, State Court, Your Legal Rights

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bank forecloses, bankruptcy court, Foreclosure, homeowners, Ibanez Case, Loan, Massachusetts, MERS, Mortgage Electronic Registration System, Pro se legal representation in the United States, US Bank, wrongful foreclosure

Many homeowners who found themselves in wrongful foreclosure situation may have a valid defense, against the perpetrators of these crimes.

How much does it cost to get justice, when a bank forecloses on your house illegally? Thousands of ex-homeowners don’t pursue their rights to a financial settlement because they assume they couldn’t pay the legal fees.

In fact, it costs less than you fear. Consumer lawyers take a few cases at no charge. More likely, you’ll pay fees — upfront or on a monthly plan — tied to the lawyer’s estimate of the time it will take and your ability to pay. If they win your case, they’ll collect from the financial institution, too.

Before readers attack the “greedy lawyers” for defending “deadbeat” clients who couldn’t repay their mortgage loans, let me quote from a groundbreaking decision of 2011 by the Massachusetts Supreme Court. The court reversed two foreclosures because the banks — Wells Fargo and U.S. Bancorp, acting as trustees for investors — couldn’t prove that they actually owned the mortgages. Judge Robert J. Cordy excoriated them for their “utter carelessness.” The fact that the borrowers owed the money was “not the point,” he wrote. The right to deprive people of their property is a powerful one and banks have to prove they have the legal standing to do so.

American law cannot allow property seizures based on backdated, incomplete, or fraudulent documentation, no matter what the circumstances are. Otherwise, no one’s home is safe. Courts enforce private property rights through the cases brought before them. In other words, lawyers.

The Massachusetts case began not with consumers, but with the banks themselves. They asked the courts to affirm that the foreclosures were valid so they could get title insurance. That pulled the borrowers — Antonio Ibanez and Mark and Tammy LaRace — into the fray. When the horrified courts looked at how the foreclosures had gone down, they said, “no way,” and gave the former owners their property back.

Ibanez, a special ed teacher, bought the home for investment in 2005 and defaulted in 2007 on a $103,500 loan, according to the court papers. Even since, the house has been boarded up. Ibanez filed a Chapter 7 bankruptcy, so he now has title to the home and no obligation on the debt. The mortgage investors will take the loss.

The LaRaces borrowed $103,200 to buy their home in 2005 and also defaulted in 2007. They had an offer on their home, but the servicer foreclosed anyway. (During the trial, the foreclosing law firm admitted that servicers are graded on how quickly they can liquidate a mortgage.)

The LaRaces have moved back into their long-unattended home, but first they had to clean up mold, fix plumbing, and make other repairs. They would gladly resume payments on the mortgage, their lawyer Glenn Russell says. But the trustee bank doesn’t own the loan. The investors don’t own it because the mortgage was never transferred properly. The original lender, Option One, no longer exists. So whom do they pay?

This important case opens the door to thousands of foreclosure do-overs in Massachusetts at the time, and continuing and equally influenced courts in other states, as well. But there hasn’t been a rush by lawyers to get involved, probably because the field is complex and not especially remunerative. No class actions have been certified, as at that time or shortly thereafter, so the cases proceeded one by one. The financial trail can be hard to track (the Massachusetts documents were unwound by mortgage-fraud specialist Marie McDonnell).  The lawyer — often, a sole practitioner — is up against the awesome resources of major financial institutions.

Neither Ibanez nor the LaRaces were charged for their lawyer’s services. Collier had file a claim for wrongful foreclosure and was paid from any settlement. Russell did the same. At the time, Russell also thinks the LaRaces are owed something for the cost of repairing their home.

Very few cases start as pro bono, however. Lawyers who defend consumers have bills to pay, just as the banks’ corporate attorneys do. You may opt to fight it Pro Se using the package from our website, or if you want to fight an unfair foreclosure, you might be offered one of several arrangements:

An upfront fee. “Many of my clients were formerly very successful individuals,” Russell says. On average, the value of the homes of the people who contact him is “somewhat north of $500,000.” He suggests a fee based on their means.

Monthly payments. If you’re not making monthly mortgage payments, some portion of that money could be applied to legal expenses. Collier says he puts the payments into escrow and retains them if he gets the house back (he says he always does, in predatory lending cases).

Bankruptcy payment plans. The clients of North Carolina bankruptcy attorney Max Gardner are usually in a Chapter 13 monthly repayment plan. Each state sets the maximum attorney’s fee, payable as part of the plan.

Mostly, the attorneys get paid by suing the financial institutions, who settle claims or suffer court judgements due to their own illegal activity. People who beat up on consumer lawyers scream that they bring frivolous cases just for the fees. But consumer lawyers only get paid if their case is good, so they’re pretty rigorous about whom they choose to represent. “I was called crazy for practicing in this area of law, as in ‘I would be broke’ by not getting enough fees,” Russell says. “Three years later, I am still here and still living my motto of helping people first.”

Most homeowners are successful fighting there case Pro Se using the package we offer for fighting Foreclosure, as your interest is at stake, and you have the most to lose, not Attorneys. They gets paid whether you win or lose. However, homeowners equally have options when fighting wrongful foreclosure.

If you think you have a case, your toughest challenge isn’t fees, it’s finding a lawyer with the expertise to press your claim successfully, Gardner says. If you don’t have a personal reference for a qualified lawyer, the best place to look is the website of  the National Association of Consumer Advocates. Next best: the National Association of Consumer Bankruptcy Attorneys. In either case, ask if the lawyer has won other securitization, mortgage servicing, and foreclosure cases. “They have to know what documents to ask for,” Gardner says. That’s what wins.

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 https://fightforeclosure.net/foreclosure-defense-package/ “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: https://fightforeclosure.net/foreclosure-defense-package/

 

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What Homeowners Must Know About Mortgage Servicing Fraud

19 Monday Mar 2018

Posted by BNG in Banks and Lenders, Federal Court, Foreclosure Crisis, Foreclosure Defense, Fraud, Judicial States, Landlord and Tenant, Legal Research, Litigation Strategies, Mortgage Laws, Mortgage mediation, Mortgage Servicing, Non-Judicial States, State Court, Your Legal Rights

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Borrower, borrower loan, current balance, delinquency reports, Financial institution, mortgage loans, Mortgage servicer, Mortgage Servicing Fraud, remittance reports, servicer, servicer reports, servicing audit

As a homeowner, it is your duty to know what is going on, in your home mortgage.

Mortgage servicing typically includes, but is not limited to, billing the borrower; collecting principal, interest, and escrow payments; management of escrow accounts; disbursing funds from the escrow account to pay taxes and insurance premiums; and forwarding funds to an owner or investor (if the loan has been sold in the secondary market). A mortgage service provider is typically paid on a fee basis. Mortgage servicing can be performed by a financial institution or outsourced to a third party servicer or sub-servicer.

Mortgage servicing fraud generally involves the diversion or misuse of principal and interest payments, loan prepayments, and/or escrow funds for the benefit of the service provider. Mortgage servicing fraud can take many forms, including the following:

• A mortgage sells a loan it services, but fails to forward funds to the owner of the loan following the sale. The servicer continues to make principal and interest payments on the loan so the owner is not aware that the loan had been sold.

• A mortgage servicer diverts escrow payments for taxes and insurance for its own use. This action would jeopardize a financial institution’s collateral protection.

• A mortgage servicer that fails to forward principal and interest payments to an institution that holds the note and mortgage, could report that loan as past due for a short period of time, and then use proceeds from other loans to bring that loan current. This would be similar to a lapping scheme involving accounts receivable. Deliberately failing to post payments in a timely manner causes late fees to increase which directly elevates the servicers’ income.

• A mortgage servicer makes payments on loans originated for or on behalf of a financial institution as a means to avoid repurchase pursuant to first payment default provisions.

Examples
o Several insiders of a mortgage company fraudulently sold serviced loans belonging to other financial institutions and kept the proceeds. An insider modified data in the servicing system to make it appear the loans were still being serviced and were current.

o Two executive officers of a mortgage company took out personal mortgage loans in their names which were subsequently sold to an investor, with servicing retained by the mortgage company. The executives did not make any payments on their loans and suppressed delinquency reporting to the investor, allowing them to “live free” for a period of time until the investor performed a servicing audit and discovered the fraud.

Best Practices
• Perform annual on-site review of loan files and servicer reports.
• Establish internal audit reviews that include a sampling of loans handled by each servicer and verify collateral lien status for such loans.
• Obtain and reconcile reports to document and verify total amount of loans serviced, payments and allocation, servicer fees, delinquent loans, etc.
• Verify receipt of funds on loans authorized for sale by a servicer.
• Review, at least annually, the servicer’s registration status, licensing status, financial health and capability, and compliance with the servicing contract/agreement.
• Establish a contingency plan should the servicer be unable to perform its contractual obligations.
• Verify current insurance policies and amounts of coverage (flood and hazard).
• Verify payment of property taxes.
• Review, as documented in board meeting minutes, management reports on mortgage servicers (annual reviews, quarterly performance reports, aging reports, loan modification reports, delinquency reports, etc.)
• Establish appropriate limitations on access to internal bank systems and records.
• Establish appropriate conflict of interest policies prohibiting compensation/ payments from service providers to bank employees.
• Review of internal and external audit reports of the servicer.
• Review customer complaint processes, procedures, and reports.
• Review analysis and trend reports comparing a servicer’s operations and statistics with Mortgage Bankers Association’s statistics.
• Obtain and review samples of original payment documents (e.g., borrower loan payment checks) to verify that the borrower is the source of payments and that funds from other sources are not being used to make payments or hide delinquencies.

Red Flags
A red flag is an indicator that calls for further scrutiny. One red flag by itself may not be significant; however, multiple red flags may indicate an operating environment that is conducive to fraud.
• Failure of the financial institution to perform an on-site review of the servicer (loan documents, servicing records, etc.)
• A review of remittance reports provided to the financial institution by servicer finds a:
o Lack of detail within the remittance reports (principal reduction, interest paid, late fees charged and paid).
o Remittance reports that fail to reconcile with bank records.
• A review of delinquency reports provided to the financial institution by the servicer finds a:
o Lack of detail within delinquency reports.
o High volume of delinquent loans.
• A review of portfolio reports provided to the financial institution by the servicer finds a:
o Lack of detail within portfolio reports (listing of loans owned by the financial institution being serviced by the servicer including current balance).
o Portfolio reports that fail to reconcile with bank records.
• Annual review reveals detrimental information or deteriorating financial condition of the servicer.
• County records indicating lien holders are unknown to the financial institution.
• Excessive delay in a servicer’s remittance of principal and interest payments, escrow payments, or prepayments.
• Cancellation or reductions in coverage on servicer’s insurance policies, including errors and omissions policies.
• Failure of the servicer to maintain copies of original payment documents (e.g., loan payment checks) verifying borrower as the source of payments.
• Excessive errors related to payment calculations on adjustable rate loans or escrow calculations.

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 https://fightforeclosure.net/foreclosure-defense-package/ “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: https://fightforeclosure.net/foreclosure-defense-package/

 

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What Homeowners Must Know About Mortgage Fraud Schemes

11 Sunday Mar 2018

Posted by BNG in Affirmative Defenses, Banks and Lenders, Federal Court, Foreclosure Crisis, Foreclosure Defense, Fraud, Judicial States, Landlord and Tenant, Legal Research, Litigation Strategies, Loan Modification, MERS, Mortgage Laws, Mortgage mediation, Non-Judicial States, Pleadings, Pro Se Litigation, Scam Artists, Title Companies, Trial Strategies, Your Legal Rights

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Appraiser, Asset Rental, Borrower, Builder Bailout, Buy and Bail, Buyer, Chunking, Closing/Settlement Agent, Double Selling, Equity Skimming, Fake Down Payment, Fictitious Loan, Fraudulent Appraisal, Fraudulent Documentation, Fraudulent Use of Shell Company, Identify Theft, Loan Modification and Refinance Fraud, Loan Servicer, Mortgage Servicing Fraud, Originator, Phantom Sale, Processor, Property Flip Fraud, Real Estate Agent, Reverse Mortgage Fraud, Seller, Short Sale Fraud, Straw/Nominee Borrower, Title Agent, Underwriter, Warehouse Lender

Mortgage fraud has continued to increase since the 2005. Declining economic conditions, liberal underwriting standards, and declining housing values contributed to the increased level of fraud. Market participants are perpetrating mortgage fraud by modifying old schemes, such as property flip, builder-bailout, and short sale fraud, as well as employing newer schemes, such as buy and bail, reverse mortgage fraud, loan modification, refinance fraud, and mortgage servicing fraud.

This Post defines schemes as the big picture or secret plan of action used to perpetrate a fraud. There are a variety of “schemes” by which mortgage fraud can take place. These schemes can involve individuals inside the financial institution or third parties. Various combinations of these schemes may be implemented in a single fraud. The descriptions provided below are examples of traditional and emerging schemes that are used to facilitate mortgage fraud.

Builder Bailout
This scheme is used when a builder, who has unsold units in a tract, subdivision, or condominium complex, employs various fraudulent schemes to sell the remaining properties.

Buy and Bail
This scheme typically involves a borrower who is current on a mortgage loan, but the value of the house has fallen below the amount owed. The borrower continues to make loan payments, while applying for a purchase money mortgage loan on a similar house that cost less due to the decline in market value. After obtaining the new property, the borrower “walks” or “bails” on the first loan.

Chunking
Chunking occurs when a third party convinces an uninformed borrower to invest in a property (or properties), with no money down and with the third party acting as the borrower’s agent. The third party is also typically the owner of the property or part of a larger group organizing the scheme. Without the borrower’s knowledge, the third party submits loan applications to multiple financial institutions for various properties. The third party retains the loan proceeds, leaving the borrower with multiple loans that cannot be repaid. The financial institutions are forced to foreclose on the properties.

Double Selling
Double selling occurs when a mortgage loan originator accepts a legitimate application and documentation from a buyer, reproduces or copies the loan file, and sends the loan package to separate warehouse lenders to each fund the loan.

Equity Skimming
Equity skimming is the use of a fraudulent appraisal that over-values a property, creating phantom equity, which is subsequently stripped out through various schemes.

Fictitious Loan
A fictitious loan is the fabrication of loan documents or use of a real person’s information to apply for a loan which the applicant typically has no intention of paying. A fictitious loan can be perpetrated by an insider of the financial institution or by external parties such as loan originators, real estate agents, title companies, and/or appraisers.

Loan Modification and Refinance Fraud
This scheme occurs when a borrower submits false income information and/or false credit reports to persuade the financial institution to modify or refinance the loan on more favorable terms.

Mortgage Servicing Fraud
This fraud is perpetrated by the loan servicer and generally involves the diversion or misuse of loan payments, proceeds from loan prepayments, and/or escrow funds for the benefit of the service provider.

Phantom Sale
This scheme generally involves an individual or individuals who falsely transfer title to a property or properties and fraudulently obtain funds via mortgage loans or sales to third parties.

Property Flip Fraud
A fraudulent property flip is a scheme in which individuals, businesses, and/or straw borrowers, buy and sell properties among themselves to artificially inflate the value of the property.

Reverse Mortgage Fraud
Reverse Mortgage Fraud involves a scheme using a reverse mortgage loan to defraud a financial institution by stripping legitimate or fictitious equity from the collateral property.

Short Sale Fraud
Fraud occurs in a short sale when a borrower purposely withholds mortgage payments, forcing the loan into default, so that an accomplice can submit a “straw” short-sale offer at a purchase price less than the borrower’s loan balance. Sometimes the borrower is truly having financial difficulty and is approached by a fraudster to commit the scheme. In all cases, a fraud is committed if the financial institution is misled into approving the short-sale offer, when the price is not reasonable and/or when conflicts of interest are not properly disclosed.

Two additional fraud schemes, which are briefly addressed below, are debt elimination and foreclosure rescue schemes. While these schemes are typically not perpetrated directly on financial institutions, and therefore not expanded upon to the same degree as the above-mentioned schemes, the end result of the scheme can have a negative impact on the financial institution.

COMMON MECHANISMS OF MORTGAGE FRAUD SCHEMES

This Post Paper defines mechanism as the process by which fraud is perpetrated. A single mortgage fraud scheme can often include one or more mechanisms and may involve collusion between two or more individuals working in unison to implement a fraud.

The following is a list of common mechanisms used to perpetrate mortgage fraud schemes:

Asset Rental
Cash or other assets are temporarily placed in the borrower’s account/possession in order to qualify for a mortgage loan. The borrower usually pays a “rental” fee for the temporary “use” of the assets.

Fake Down Payment
In order to meet loan-to-value requirements, a fake down payment through fictitious, forged, falsified, or altered documents is used to mislead the lender.

Fraudulent Appraisal
Appraisal fraud can occur when an appraiser, for various reasons, falsifies information on an appraisal or falsely provides an inaccurate valuation on the appraisal with the intent to mislead a third party.

Fraudulent Documentation
Fraudulent documentation consists of any forged, falsified, incomplete, or altered document that the financial institution relied upon in making a credit decision.

Fraudulent Use of Shell Company
A business entity that typically has no physical presence, has nominal assets, and generates little or no income is a shell company. Shell companies in themselves are not illegal and may be formed by individuals or business for legitimate purposes. However, due to lack of transparency regarding beneficial ownership, ease of formation, and inconsistent reporting requirements from state to state, shell companies have become a preferred vehicle for financial fraud schemes.

Identify Theft
Identity theft can be defined as assuming the use of another person’s personal information (e.g., name, SSN, credit card number, etc.) without the person’s knowledge and the fraudulent use of such knowledge to obtain credit.

Straw/Nominee Borrower
An individual used to serve as a cover for a questionable loan transaction.

COMMON PARTICIPANTS
Various individuals participate in mortgage fraud schemes. The following list consists of common participants in such schemes and each is linked to the glossary:

Appraiser – One who is expected to perform valuation services competently and in a manner that is independent, impartial, and objective.

Processor – The processor is an individual who assembles all the necessary documents to be included in the loan package.

Borrower – One who receives funds in the form of a loan with the obligation of repaying the loan in full with interest. The borrower may be purchasing property, refinancing an existing mortgage loan, or borrowing against the equity of the property for other purposes.

Real Estate Agent – An individual or firm that receives a commission for representing the buyer or seller, in a RE purchase transaction.

Buyer – A buyer is a person who is acquiring property.

Seller – Person offering to sell a piece of real estate.

Closing/Settlement Agent – An individual or company that oversees the consummation of a mortgage transaction at which the note and other legal documents are signed and the loan proceeds are disbursed. Title companies, attorneys, settlement agents, and escrow agents can perform this service. Local RE law may dictate the party conducting the closing.

Title Agent – The title agent is a person or firm that is authorized on behalf of a title insurer to conduct a title search and issue a title insurance report or title insurance policy.

Loan Servicer – A loan servicer is a public or private entity or individual engaged to collect and process payments on mortgage loans.

Underwriter – The credit decision-making process which can be automated, manual or a combination of both. In an automated process, application information is entered into a decision-making model that makes a credit determination based on pre-determined criteria. In a manual process an individual underwriter, usually an employee of the financial institution, makes the credit decision after evaluating all of the information in the loan package, including the credit report, appraisal, and verification of deposit, income, and employment. Financial institutions often use a combination of both, with the automated decision representing one element of the overall credit decision. In each case, the decision may include stipulations or conditions that must be met before the loan can close.

Originator – The individual or entity that gathers application data from the borrower. Alternatively, a person or entity, such as a loan officer, broker, or correspondent, who assists a borrower with the loan application.

Warehouse Lender – A short-term lender for mortgage bankers. Using mortgage loans as collateral, the warehouse lender provides interim financing until the loans are sold to a permanent investor.

CONCLUSION
Mortgage fraud continues to result in significant losses for financial institutions, as well as, the Homeowners. It is imperative that homeowners understand the nature of the various schemes and recognize red flags related to mortgage fraud. This knowledge and use of best practices will help with the prevention of mortgage fraud, and financial losses to the homeowner.

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 https://fightforeclosure.net/foreclosure-defense-package/ “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: https://fightforeclosure.net/foreclosure-defense-package/

 

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