How California Homeowners in Foreclosure Can Move to Vacate Default Judgment

10 Sunday Apr 2016

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

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California, California foreclosure, California Residents, Foreclosure in California, Foreclosure laws in California, non-judicial foreclosure

This post is designed to educate California residents facing foreclosure, as to what they would expect and how to navigate out of the problem.

The Real Estate meltdown that began in late 2007 has resulted in an unprecedented number of loans in default and a substantial upsurge in foreclosures across the country. California continues to be one of the states hardest hit by the foreclosure crisis. Whether representing a borrower struggling to make its mortgage payments or a lender faced with a defaulted loan, it is essential for lawyers to have an understanding of the intricacies of California foreclosure law.

The starting point for this understanding is the statutory framework for nonjudicial foreclosure as well as California’s famous (or perhaps infamous) “one-action rule.”

In California, a lender considering foreclosure may choose one of two avenues—judicial or nonjudicial foreclosure—although sometimes a lender elects to commence a judicial foreclosure and a nonjudicial foreclosure to preserve (for a time) both options. Judicial foreclosure, as the term suggests, begins with the lender filing a complaint against the borrower. As with most litigation, this process can be drawn out and expensive. Nonjudicial foreclosure, on the other hand, is relatively inexpensive and less time-consuming.
A critical distinction between judicial and nonjudicial foreclosure is the lender’s ability to pursue the borrower for a deficiency judgment if the sale price is less than the full amount of the borrower’s obligation.

A deficiency judgment is an option only for lenders who choose judicial foreclosure. For loans that are nonrecourse by statute or that contain contractual nonrecourse clauses, it generally does not make sense for the lender to foreclosure judicially, because the principal benefit of judicial foreclosure—the possibility of a deficiency judgment—is not available.

Nonjudicial Foreclosure: The remedy of nonjudicial foreclosure is found in a deed of trust. A deed of trust—the preferred instrument in California for securing a borrower’s loan obligations with real property—almost always contains a “power of sale” clause that enables the trustee (typically a title insurance company) to sell the property to satisfy the borrower’s obligations if a default occurs. Given the relative ease with which a nonjudicial foreclosure can be accomplished, most lenders opt for this approach.

The nonjudicial foreclosure rules are statutorily prescribed and require strict compliance. The rules endeavor to strike a balance among the varying interests of lenders, borrowers, other lien claimants, and trustees. Whereas lenders desire a speedy and inexpensive method of recovery, borrowers desire protection against wrongful loss of their property, junior lienholders want to protect their interests, and trustees simply need their responsibilities clearly delineated.

If any step in the foreclosure process violates the nonjudicial foreclosure statute, the validity of the foreclosure sale may be challenged. The borrower may be able to enjoin the sale and recover damages from the lender.
When a borrower defaults on an obligation secured by a deed of trust, the lender sometimes may prefer to restructure or “work out” a loan—for example, by reducing the interest rate and/or required periodic payments, or extending the maturity date. In other cases, the lender may decide that a workout is not realistic or in the lender’s best interest. In such a case, the lender will elect to declare a default, which starts in motion the process for selling the property pursuant to the power-of-sale provision.7 The first step is for the lender to make a demand on the trustee to commence the foreclosure process.

Notice of Default
One of the main components of the statutory scheme is the stringent notice requirements. Upon receipt of the lender’s demand, the trustee initiates a nonjudicial foreclosure by recording a notice of default (NOD) in the county in which the property is located. The purpose of the NOD is to provide notice to the borrower, its successors, junior lienholders, and other interested persons—and notice to the world—that there has been a default. The NOD must identify the name of the borrower, include recording information for the deed of trust or the legal description of the property, specify the type of breach that has occurred and the specific dollar amount due, declare the lender’s election to sell the property, and include the lender’s contact information.

The NOD must also contain a statement notifying the borrower that the default can be cured by payment of the delinquencies within the prescribed reinstatement period. However, if the note grants the lender the right to accelerate payment of the entire debt upon the borrower’s default, the NOD does not need to articulate the lender’s election to accelerate.

Once the NOD is recorded, the foreclosure clock starts ticking. For the three months following recordation of the NOD, the borrower (and any successor), as well as anyjunior lienholder with a recorded lien, each has the opportunity to cure the default and “reinstate” the loan by paying all amounts in default and all reasonable costs and expenses incurred by the lender, including trustee’s and attorney’s fees, but excluding any portion of the principal that would not otherwise be due had the default not occurred. This exclusion allows the borrower to reinstate the loan without paying the entire debt. However, if the default resulted from the borrower’s failure to pay the entire principal balance at the maturity date, reinstatement is not possible.

Within 21 days following reinstatement, the lender must deliver to the trustee a notice of rescission of the NOD, which withdraws the declaration of default and demand for sale and advises the trustee of the reinstatement.

The trustee must record the notice of rescission within 30 days after the trustee receives the notice and all fees and costs owing to the trustee.

The trustee is required to mail a copy of the NOD to the borrower within 10 days of the recordation date and to all persons who have previously recorded a “request for special notice” of any default under the deed of trust. Within one month after recording the NOD, the trustee also must send a copy of the NOD to any successor of the borrower and any junior lienholders. Once the NOD is recorded, the foreclosure clock starts ticking. For the three months following recordation of the NOD, the borrower (and any successor), as well as any junior lienholder with a recorded lien, each has the opportunity to cure the default and “reinstate” the loan by paying all amounts in default and all reasonable costs and expenses incurred by the lender, including trustee’s and attorney’s fees, but excluding any portion of the principal that would not otherwise be due had the default not occurred. This exclusion allows the borrower to reinstate the loan without paying the entire debt. However, if the default resulted from the borrower’s failure to pay the entire principal balance at the maturity date, reinstatement is not possible.

The borrower, its successor, and any junior lienholder may exercise this reinstatement right beginning on the date of recordation of the NOD until five business days prior to the sale. If the default is cured, the borrower’s obligation is reinstated according to its original terms as if no default had occurred.Within 21 days following reinstatement, the lender must deliver to the trustee a notice of rescission of the NOD, which withdraws the declaration of default and demand for sale and advises the trustee of the reinstatement. The trustee must record the notice of rescission within 30 days after the trustee receives the notice and all fees and costs owing to the trustee.

A minimum of three months must transpire after the NOD is recorded before the

trustee may record a notice of sale (NOS).

The NOS must specify the date, time, and location of the sale and include a description of the property and the deed of trust, the terms of the sale, the trustee’s contact information, the total amount of the unpaid balance of the obligation, and a reasonable estimate of costs incurred by the lender at the time of the initial publication of the NOS.

At least 20 days prior to the sale, the trustee is required to record the NOS, mail

the NOS to the borrower and all persons who requested special notice, post the NOS at the property itself and in one public place in the county in which the property is located standard practice is to post the NOS at a courthouse—and publish the NOS in a newspaper of general circulation in the city in which the property is located. The NOS must be republished once a week for three consecutive weeks.

The sale can be postponed for a number of reasons at any point before a bid has been accepted on the day of the sale. The post-ponement period can last for up to one year from the date of the original sale, after which time a new NOS must be published, posted, mailed, and recorded. Reasons for post-ponement include 1) the borrower and lender mutually agree to postpone the sale, 2) the borrower files for bankruptcy protection, 3) a court enjoins the sale, 4) the lender decides unilaterally to postpone the sale, and 5) the trustee postpones the sale to protect the interests of either the borrower or lender. If the sale is not postponed, it must take place at the location and time specified in the NOS and be open to the public.

Any person, including the borrower and lender, may bid at the sale. The trustee will sell the property by auction to the highest bidder for cash, although the lender is entitled to “credit bid” up to the full amount of the indebtedness. The trustee has the right to require all prospective bidders to show evidence of funds prior to commencing the bidding (usually a cashier’s check in hand).

Upon completion of the sale, a trustee’s deed upon sale is recorded, transferring title to the successful bidder.

One-Action Rule California’s one-action rule provides that there can be but one form of action for the recovery of any debt, or the enforcement of any right, secured by a mortgage upon real property.

The word “one” in one-action rule is used qualitatively and not quantitatively and refers to the rule that the lender’s only option to recover a debt secured by a mortgage or deed of trust upon real property is to foreclose on the collateral securing the debt. It is crucial that a lender be advised of the requirements of the one-action rule, as certain conduct that does not on its face appear to constitute an “action,” such as a bank lender exercising a statutory right of offset against an account held by its borrower, may violate the rule.

The one-action rule has two elements. First, the lender must pursue foreclosure

before taking any other action against the borrower for recovery of the debt.

Second, all the security must be exhausted before the lender sues the borrower directly on the debt.

However, since a deficiency judgment is unavailable in a nonjudicial foreclosure

sale, the lender cannot pursue the borrower for a personal judgment if the sale proceeds from a trustee’s sale are not enough to satisfy the debt. In jurisdictions without such a rule, the borrower can be forced into the untenable position of simultaneously having to defend a personal action on the debt and a foreclosure action on the real property.

The invocation of the one-action rule is at the borrower’s option. When a lender initiates proceedings to collect a personal judgment against the borrower, the borrower can raise the one-action rule as a defense and compel the lender to foreclose and apply the sale proceeds to satisfy the debt.

In the alternative, the borrower can elect not to assert the defense, in which case the lender that has not foreclosed is deemed to have made an election of remedies. The lender can recover a personal judgment against the borrower—but at the price of losing its lien and therefore its right to foreclose on the real property.

The one-action rule is widely misunderstood. Moreover, a violation of the rule can

result in devastating consequences for the lender. Before commencing a foreclosure—whether judicially or nonjudicially—a number of strategic considerations must be evaluated. Foreclosure can be a byzantine process for lenders and borrowers. It is the role of real estate counsel to provide guidance and demystify the complexities of California foreclosure law.

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

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How California Homeowners Can Technically Disqualify their Foreclosure Mill Attorney

09 Thursday Oct 2014

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

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California, Mortgage Electronic Registration System, Pro se legal representation in the United States

In this age of fraudulent foreclosures by foreclosure mills, homeowners should be in a position to effectively challenge and disqualify the foreclosure mill Attorneys, if for anything, that can effectively delay your foreclosure and ultimately save your home.

In most foreclosure cases, the existence of conflict of interest is obvious. If you look at your pleadings carefully, you will notice that in most cases, the pleadings will reflect that the Attorney who is representing your purported lender is “also” representing MERS. In other words the law firm is acting as counsel for the lender who initiated this foreclosure proceeding, in conjunction with MERS who is also a defendant in the case. Incredibly the lender’s counsel (who is like a plaintiff – for commencing and prosecuting the foreclosure proceeding), even though it has already acted as counsel for the defendant, MERS, in similar cases! OR representing both the lender and MERS in non judicial foreclosure cases where the homeowner is suing everyone involved in his mortgage loan transaction. By virtue of commencing foreclosure via a MERS purported assignment, the lender has trapped itself. It is only when a homeowner uses such opportunity to bring that to the court’s attention with a “motion to disqualify counsel” will the homeowner take advantage of the situation.

It is fundamental that the same law firm cannot represent a plaintiff and a defendant in the same case.

The purported lender may dispute its representation of MERS, but there is no other explanation for why the purported lender’s own employees prepared the purported assignment and executed it on behalf of MERS. In order words, if the Attorney representation of both parties was not a conflict, then why did the lender’s own employee prepare the purported assignment and sign it for MERS? Even if you case does not involve the an Attorney representing both the lender and MERS, If the homeowner research carefully within your region, you will notice that the same counsel had in the past became the counsel of record for MERS in many other cases active before courts. As such, the Attorney’s status as counsel for the defendant MERS is not reasonably in dispute.

Homeowners should make the arguments that calls into question
the fair administration of justice. To illustrate, the homeowner fear that MERS may institute legal proceedings against him in the future. After all, what is to stop MERS from taking the position, at some point in the future, that it is the owner and holder of the Note and deed of trust.
Where would that leave the homeowner Or the then-owner of the subject property? Or the title insurance company that writes title insurance based on the title that is derived from a foreclosure on the subject property (if a foreclosure is allowed)?

Homeowners should argue that under a myriad of cases, the conflict of interest by which lender’s counsel is operating, couple with the affect that conflict is having on the administration of justice requires its disqualification as counsel. See State Farm Mut. Auto. Ins. Co. v. KA.W., 575 So. 2d 630 (Fla 1991); Koulisis v Rivers, 730 So. 2d 289 (Fla. 4th DCA 1999); Campell v. American Pioneer Savings Bank, 565 So. 2d 417 (Fla. 4th DCA 1990).

To the extent that lender’s counsel disagree with the facts set forth herein, homeowner should argue that the court cannot simply accept the law firm’s version of events as true. Rather, in that event, an evidential hearing is required. To illustrate further, on February 12, 2010, the Second District reversed a summary judgment of foreclosure where the plaintiff bank did not show a proper assignment of mortgage. See BAC Funding Consortium, Inc. v. Jacques, Cas No 2D08-3553 (Fla. 2d DCA 2010). This ruling comes on the heels of the Florida Supreme Court’s recent rule change requiring that all mortgage foreclosure lawsuits be executed under oath.

Other jurisdiction have started noticing the fraud brought upon the Honorable courts, entertained motions to disqualify counsels and have also disqualified counsels based on facts as stated herein. After all, only in recent years have banks and their employees begun drafting assignments in mass quantities in an attempt to “push through” non-judicial and judicial foreclosures. Other jurisdictions, however, have begun catching on to these unseemly tactics. One New York court, for example, after discussing problems with an assignment of mortgage similar to those set forth above, ruled:
“Even if [plaintiff] is able to cure the assignment defect, plaintiff’s counsel then has to address the conflict of interest that exist with his representation of both the assignor of the instant mortgage, MERS as nominee for HSBC Mortgage, and the assignee of the instant mortgage, HSBC….”

HSBC Bank USA, N.A. v. Vazquez, 2009 N.Y. Slip. Op. 51814 (2009); see also Bank of N.Y. v. Mulligan, 2008 N.Y. Slip. Op. 31501 (2008) (The Court is concerned that [the person who signed the assignment] may be engaged in a subterfuge, wearing various corporate hats«´); Deutsche Bank National Trust Co. v. Castellanos, 2008 N.Y. Slip. Op. 50033 (2008) (If he is a Vice President of both the assignor and the assignee, this would create a conflict of interest and render the July 21, 2006 assignment void.´); HSBC Bank, N.A. v. Cherry, 2007 N.Y. Slip. Op.52378 (2007) (The Court is concerned that there may be fraud on the part of HSBC, or at least malfeasance. Before granting an application for an order of reference, the Court requires an affidavit from [the person who signed the assignment] describing his employment history for the past three years.)

The situation here is similar to that presented to the First District in Live and Let Live, Inc. v. Carlsberg Mobile Home Props., Ltd., 388 So. 2d 629 (Fla. 1st DCA 1980). In that case, plaintiff’s attorney was the escrow agent for the real estate transaction upon which the lawsuit was based. What he knew or was told at closing was relevant at trial. Id. Deeming him a central figure in the lawsuit, the First District required his disqualification. Id. In so ruling, the court cited ethical considerations promulgated by the Florida Supreme Court in In Re Integration Rule of The Florida Bar, 235 So. 2d 723 (Fla. 1970), including DR 5-102, which provides:

(A) If, after undertaking employment in contemplated or pending litigation, a lawyer learns or it is obvious that he or a lawyer in his firm ought to be called as a witness on behalf of his client, he shall withdraw from the conduct of the trial and his firm, if any, shall not continue representation in the trial. (B) If, after undertaking employment in contemplated or pending litigation, a lawyer learns or it is obvious that he or a lawyer in his firm ought to be called as a witness other than on behalf of his client, he may continue the representation until it is apparent that his testimony is or may be prejudicial to his client.

A potent weapon in any lawyer’s arsenal is a motion to disqualify opposing counsel. If used successfully, it stops the opposing party in its tracks and forces an adversary to start over with a new lawyer. And for those on the receiving end of such a motion, it is crucial to know whether it should be granted or rejected. Courts have developed a four-factor test to assess the merits of a disqualification motion, but before we discuss that test, consider the following example.

Assume “Attorney A” is long-time litigation counsel for Widgetco Inc. Widgetco is being sued, and the opposing party deposes one of Widgetco’s employees who is not named as a party in the suit but who has percipient knowledge of the underlying facts of the case. Attorney A defends the deposition of that employee and, at the start of the session, states on the record that he is appearing as counsel for the employee. A year later the employee steals company trade secrets and opens a competing business.

Widgetco then hires Attorney A to sue the former employee for misappropriation of trade secrets and unfair competition. Counsel for the former employee promptly files a motion to disqualify Attorney A on the ground that he has a conflict of interest because he was counsel for the employee during the deposition in the prior case. Is Attorney A out of luck and off the case? Not necessarily.

PERSONAL RELATIONSHIP REQUIRED
To win the disqualification motion, the former employee must first show that he or she was personally represented by Attorney A. In addition, the employee must show a “substantial relationship” between Attorney A’s current and previous representation of the former employee (Brand v. 20th Century Ins. Co., 124 Cal. App. 4th 594, 602 (2004)). An attorney representing a corporation does not automatically have an attorney-client relationship with the organization’s individual constituents (officers, directors, shareholders, employees) (Vapnek, Tuft, Peck & Wiener, California Practice Guide: Professional Responsibility, ¶ 3.90 (The Rutter Group, 2007)). Rather, courts distinguish between a corporate counsel’s representation of corporate officers, directors, and employees “in their representative capacities and the representation of those persons in their individual capacities.” (Koo v. Rubio’s Restaurants, Inc., 109 Cal. App. 4th 719, 732-33 (2003).) As one court has stated, “[G]enerally, there is no individual attorney-client privilege between a corporation’s attorney and individuals within the corporation unless there is a clear showing that the individual consulted the corporate counsel in the officer’s individual capacity.” (Tuttle v. Combined Ins. Co., 222 F.R.D. 424, 429 (E.D. Cal. 2004).)

The preeminent case explaining this distinction is Meehan v. Hopps (144 Cal. App. 2d 284 (1956)), in which long-time corporate counsel represented the corporation in a suit against Stewart Hopps, a former officer and chairman of the board. Hopps moved to disqualify the corporation’s counsel, arguing that he had spent many hours conferring with counsel, and had delivered to counsel memoranda and personal files relating to various legal matters in which the corporation was involved (144 Cal. App. 2d at 287, 290). The court of appeal affirmed the trial court’s denial of the motion to disqualify, holding that “[t]he attorney for a corporation represents it, its stockholders and its officers in their representative capacity” and in no way “represents the officers personally.” (144 Cal. App. 4th at 290; see also Talvy v. American Red Cross, 205 A.D. 2d 143, 150, 618 NYS 2d 25, 29 (N.Y. Ct. App. 1984) (“Unless the parties have expressly agreed otherwise in the circumstances of a particular matter, a lawyer for the corporation represents the corporation, not the employees”).) The court concluded not only that the attorney could act adversely to Hopps, but also that he could use against Hopps any information that Hopps “was required by reason of his position with the corporation to give to that attorney.” (144 Cal. App. 4th at 290.) Thus, as commentators have noted, “[t]he fact that counsel may have learned confidential information about [former officers now adverse to the company] does not disqualify counsel from continuing to represent the corporation.” (Friedman, California Practice Guide: Corporations at ¶ 6:3.2 (The Rutter Group, 2007).) The primary issue, then, on a motion to disqualify a lawyer who previously represented a client’s employee is whether the former employee can establish that he or she had a personal attorney-client relationship with the company’s litigation counsel (Koo, 109 Cal. App. 4th at 729). The rule against representation adverse to a former client does not apply when the relationship of attorney and client has never, in fact, been created between the attorney and the complaining party. (See 1 Witkin, California Procedure at § 151, p. 206 (4th ed. 1996).)

A formal contract is not necessary to establish that an attorney-client relationship exists (Waggoner v. Snow, Becker, Kroll, Klaris & Kravis, 991 F.2d 1501, 1505 (9th Cir. 1993) (applying California law)). On the other hand, the former employee’s mere subjective belief that he or she was personally represented by corporate counsel is not sufficient (Fox v. Pollack, 181 Cal. App. 3d 954, 959 (1986)). Rather, it is the former employee’s burden to prove that the totality of the circumstances reasonably implies an agreement by the company’s lawyer not to accept other representations adverse to the former employee’s personal interests (Responsible Citizens v. Superior Court, 16 Cal. App. 4th 1717, 1733 (1994)).

THE FOUR-FACTOR TEST
A federal court applying California law has cited four factors to use in assessing whether the totality of the circumstances reasonably implies an agreement of personal representation. The four factors are: (1) the nature and extent of the contacts between the attorney and the purported client; (2) whether the purported client divulged confidential information to the attorney; (3) whether the attorney provided the purported client with legal advice; and (4) whether the purported client sought or paid for the attorney’s services (Fink v. Montes, 44 F. Supp. 2d 1052, 1060 (C.D. Cal. 1999)).

Attorney contacts. The first factor of the Fink test involves the nature and extent of the contacts between the attorney and the former employee. California case law does not address whether a corporate lawyer whose sole contact with a corporate employee is to prepare him or her for deposition and/or to defend the employee at deposition is by reason of that contact alone disqualified from representing the corporation in a lawsuit against the employee. However, cases from other jurisdictions generally provide that the corporate attorney is not deemed to represent the employee personally in such circumstances.

For example, in Polin v. Kellwood Co. (866 F. Supp. 140 (S.D.N.Y. 1994)) a former officer of a company met with the company’s lawyers to prepare for his deposition in a lawsuit involving the company. In a later lawsuit against that same former officer, the district court held that the corporate lawyers were not automatically disqualified from representing the company because “[t]he mere fact that a corporate lawyer meets with an employee – or as here, an ex-employee – to prepare for a deposition, cannot make the employee the client of the lawyer.” (866 F. Supp. at 142.)

Also instructive is Spinello Cos. v. Metra Industries, Inc. (2006 Westlaw 1722626 (D. N.J. 2006)), in which the defendant (a former officer) sought to disqualify Spinello’s counsel because he had defended the officer at, and prepared him for, a deposition in a previous lawsuit involving Spinello. The court concluded that no personal attorney-client relationship existed between the company’s counsel and the former officer (2006 Westlaw 1722626 at *6).

Courts have reached a different conclusion when the attorney specifically identifies himself or herself on the record as “counsel for the individual employee” (or the attorney remains silent when the employee identifies the attorney as personal counsel). For example, in Advance Mfg. Technologies, Inc. v. Motorola, Inc. (2002 Westlaw 1446953 (D. Ariz. 2002)), a former employee of Motorola met with Motorola’s counsel to prepare for deposition. At the deposition, when asked by opposing counsel whether he was represented by an attorney, the former employee said he was represented by Motorola’s lawyer. Motorola’s lawyers “remained silent and did not deny or otherwise qualify [the former employee’s] affirmative response.” (2002 Westlaw 1446953 at *1.) The court determined that silence in the face of the potential client’s expressed belief of representation made the belief an objectively reasonable one and, indeed, manifested the attorney’s “implied consent to an attorney-client relationship.” (2002 Westlaw 1446953 at *5.)

Similarly, in E.F. Hutton & Co. v. Brown (305 F. Supp. 371 (D. Tex. 1969)), the district court held that corporate counsel who represented a corporate officer at an SEC investigative proceeding, and at a bankruptcy hearing at which the officer testified, had a personal attorney-client relationship with that officer. Critical to the district court’s finding in E.F. Hutton was the fact that in both proceedings the corporate lawyer made formal appearances as counsel for the individual officer (305 F. Supp. at 386-87). The court noted that though an attorney’s appearance in a judicial or semi-judicial proceeding “creates a presumption that an attorney-client relationship exists between the attorney and the person with whom he appears,” that presumption becomes “almost irrebuttable” when the attorney enters a “formal appearance” for that person (305 F. Supp. at 387, 391-92).

E.F. Hutton and Advance Manufacturing Technologies should be contrasted with Waggoner (991 F.2d at 1506), in which the Ninth Circuit found that no attorney-client relationship existed, in part, because the lawyer was identified as “corporate counsel” both at trial and during a deposition of his client’s former officer.

In addition, in today’s legal world it is not uncommon for depositions to be videotaped and for the videographer to ask for “appearances of counsel,” which are part of the video record (and sometimes part of the sten-ographic record as well). To avoid any confusion, then, corporate counsel defending an employee should always state that he or she is representing the witness in the witness’s capacity as an employee of the company, and not individually. Counsel must also be careful in objecting to document requests served with deposition notices for a client’s employee: Those objections should clearly indicate that they are made on behalf of the deponent as an employee, not as an individual.

Confidential information. The second Fink factor analyzes whether the former employee divulged confidential information to the attorney (44 F. Supp. 2d at 1060). The confidential information to which the Fink court refers concerns the individual employee; it is not confidential information relating to the business of the corporation.

A court will look at whether the confidential information was disclosed to the attorney in a situation in which the employee had an expectation of privacy. In the Spinello case noted above, the court held that the corporate employee had no expectation of privacy in conversations with a corporate lawyer about issues relating to the corporation. It acknowledged that the former employee had conversations with the company lawyer in preparation for his deposition, but observed that the confidential information exchanged was in regard to the company’s business plan. The court then noted that all exchanges were for the benefit of the company, concluding that the employee “had no reasonable expectation of privacy regarding these conversations to the exclusion of … Spinello Companies when they were made and cannot claim they are confidential now.” (See 2006 Westlaw 1722626 at *5.)

Accordingly, a company attorney may consider having a company officer present during preparation sessions for the deposition of a company employee; with the officer present, the employee can have no reasonable expectation of privacy.

Legal advice. The third Fink factor addresses whether the corporate lawyer provided the former employee with legal advice. Again, the court will be looking to see if personal legal advice has been given, apart from legal advice regarding company business. (See Tuttle, 222 F.R.D. at 429 (no attorney-client privilege because employee did not seek legal advice from corporate attorneys “in a personal capacity”); U.S. v. Keplinger, 776 F.2d 678, 700 (7th Cir. 1985), cert. denied, 476 U.S. 1183 (1986) (“Defendants do not dispute the attorney’s testimony that defendants never explicitly sought individual legal advice or asked about individual representation”).)

Obviously, explaining to a witness the rules of a deposition and general practices in responding to questions should not be considered personal legal advice (upon which a later disqualifying motion could be based). Such advice simply protects the company’s interests and is consistent with a finding that the law firm represented the person only as an employee of the company and not as an individual.

If the individual officer or employee is potentially a party to the case, it is much more likely that corporate counsel can be shown to have provided personal legal advice. In such a situation, in which the employee’s personal interests are at stake, a court could easily conclude that the lawyer’s representation of the employee was personal in nature.

Who paid? The fourth and final Fink factor is whether the former employee sought out or paid for the services of the corporation’s attorney. In the usual situation involving the deposition of a corporate employee, the company – not the employee-seeks out representation by the corporate attorney. This is often reflected in the retention agreement. Thus, one court found no attorney – client relationship between company counsel and a former CEO because the engagement letter limited the engagement to the company’s intellectual property matters (Synergy Tech & Design Inc. v. Terry, 2007 Westlaw 1288464 (N.D. Cal 2007)). Typically, the attorney will be compensated by the company and not by the individual. In the Synergy case, the court found no attorney-client relationship, based in part on the fact that the corporation was “billed for or paid for all of the filing fees and expenses” (2007 Westlaw 1288464 at *8). Lawyers representing a corporation should therefore take extra care when defending the deposition of a client’s employee.

Whenever an attorney enters an appearance – whether during a deposition or at the courthouse – care should be taken to make clear the identity of the client, especially if corporate entities and individual corporate employees are involved in the case. One never knows if a corporate client’s employee will turn into an adversary who might seek to have the company’s lawyer removed from a future case.

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

California Broker Receives 10-Year Prison Sentence for Mortgage Fraud

18 Sunday Aug 2013

Posted by BNG in Foreclosure Defense, Fraud, Judicial States, Non-Judicial States, Pro Se Litigation, Your Legal Rights

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California, Federal Bureau of Investigation, Foreclosure, Justice Department, Mortgage fraud, Real estate, Special agent, United States Department of Justice

In California, a real estate broker out of Elk Grove was sentenced to 10 years in prison for her role in a mortgage fraud scheme that led to more than $5.5 million in losses, the Justice Department announced in a statement.

Hoda Samuel, 62, owned and operated Liberty Real Estate & Investment Company and Liberty Mortgage Company.

Out of 30 fraudulent sales transactions that occurred between April 2006 and February 2007, Samuel serve as the real estate agent for the buyer in 29 of the home sales, according to the statement. All the properties involved in the transactions went into foreclosure.

The transactions included false statements pertaining to income, employment, and rental history. To back the fabricated information, false documents were created and presented to lenders, and people were paid to answer calls from lenders and affirm the false statements.

Samuel also exaggerated the value of the collateral securing the loans, often exceeding the actual asking prices by $15,000 to $40,000. Repairs and costs for disability access modifications were also included in the prices, but were rarely done. According to the statement, at times, children of buyers were named as building contractors so money could go to the buyers.

“Greed-based crimes such as these can undermine the stability of our financial institutions and the economy, resulting in devastating consequences for homeowners, businesses and the communities in which the properties are located,” said special agent in charge Monica M. Miller of the Sacramento division of the FBI.

For More Information How to Save Your Home From Foreclosure as a Result of Mortgage Fraud Like this Visit http://www.fightforeclosure.net

Why Homeowners In Foreclosure Proceedings May Need To Remove Their Cases To Federal Courts

15 Thursday Aug 2013

Posted by BNG in Affirmative Defenses, Appeal, Federal Court, Foreclosure Defense, Judicial States, Litigation Strategies, Non-Judicial States, Pro Se Litigation, Trial Strategies

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California, Federal Rules of Civil Procedure, Lawsuit, State Courts, Supreme Court of United States, United States, United States district court, United States federal courts

A Guide To Removing Cases To Federal Courts

REMOVING CASES TO FEDERAL COURT – A CHECKLIST

Defendants in consumer foreclosure or finance cases regularly “remove” cases filed against them in state court to federal court. This post discusses the process of removal, including the factors defendants should consider before deciding to remove a case to federal court. It sets forth a step by step “checklist” for defendants who decide they would prefer federal court to state court.

What is removal?
Removal is the process of transferring a case from state court to federal court. It is provided for by federal statute. 28 U.S.C. §§ 1441-1453; Fed. R. Civ. Pro. 81(c). State courts have no role to play in determining whether a case is removed or not – a defendant can remove a case if it elects to do so and the case could have been filed in federal court in the first place (with
some exceptions).

Once a case has been removed from state to federal court, the state court no longer has jurisdiction over the matter, though a federal court can remand a case to state court. A federal judge can remand a case without any request by the plaintiff if the judge does not believe federal
jurisdiction has been properly established by the defendant. A plaintiff can also move to have the case remanded to state court if the plaintiff does not believe federal jurisdiction exists. In some cases, where the basis for removal is “federal question” jurisdiction (where a claim is based
on federal law) and that claim is later dismissed, leaving only state law claims, a judge may decline to exercise jurisdiction over the remaining state law claims, and they can be re-filed in state court. However, in general once case has been removed to federal court it stays there until fully resolved.
Note that only a defendant can remove a case to federal court. The theory is that if a plaintiff files a case in state court, he, she, or it selected that forum and cannot change to federal court. In the context of mortgage servicing litigation, this can prevent removal of a borrower’s claims raised as counterclaims in a foreclosure initiated by the servicer in state court.

Why remove cases to federal court?

There are a number of reasons mortgage servicers frequently remove cases to federal court.
• Federal judges are generally more experienced with the types of cases servicers typically face (i.e., consumer finance-related matters)

• Better developed case law (a federal district court is bound by the decisions of the circuit court of appeals in which the district court is located, and the opinions of other district court judges are published – state court judges are not bound by federal court decisions and state trial court opinions are generally not published)

• More consistent – and thus predictable – treatment in federal court

• Generally better judges in federal court. This is highly variable, however. There are many, many very fine judges in state court, and there are some terrible judges in federal court. Every situation must be evaluated based on the particular judge assigned to the case in state court and the possible judge assignments in federal court.

• Usually cases move faster in federal court than in state court. The amount of time that passes between the initiation of a case and its resolution is one of the biggest factors in the overall cost of litigation – both in terms of the direct expenses of litigation and the cost of business interruption – so resolving cases quicker will generally result in lower overall litigation cost.

• Familiarity with the Federal Rules of Civil Procedure and certainty regarding expectations and obligations, which can vary in state court

• In cases that may go to trial, the jury pool may be more favorable in federal court than in state court. Usually a federal district is broader and covers a wider demographic than a state court jury pool. This can be beneficial or detrimental depending on the particular circumstances.

• In class action litigation, the availability of interlocutory review of class
certification orders.

Step 1:
Do you really want to remove?

Although we typically advise clients to remove cases from state to federal court whenever possible, the particular circumstances of each case must be considered before making a final decision. There are situations in which a defendant will be better off in state court than federal court.

For example, your case may be assigned to a particularly favorable state court judge. If you or your counsel know that judge to be fair or to have rendered favorable decisions on key issues in the past, you will likely want to remain in that forum rather than taking your chances with an unknown federal judge. If you do not have prior experience with the judge to whom the case has been assigned in state court, obtain input from attorneys who have experience with that judge. You or your counsel should also research the state court judge’s track record. Are there published appellate opinions related to that judge’s decisions? Does that judge have any experience with the type of case you have assigned to the judge, and if so, how has he or she handled those kinds of cases in the past?

You should always get basic biographical information for the state court judge to whom you have been assigned before making a decision to remove a case from that judge’s courtroom.
There are many sources for such information, including bar association surveys, local legal newspaper guides (for example, the California Daily Journal volume of “Judicial Profiles” is an excellent resource for information about California judges) and third-party websites such as “The
Robing Room” (www.therobingroom.com).

When a case is removed to federal court, it is randomly assigned to a federal district court judge and/or magistrate judge. There is no way to know in advance what judge the case will be assigned to upon removal. Therefore, a removing defendant is always taking a risk that the
federal judge assigned to the case will be less favorable than the state court judge it was assigned to. However, the risk can be calculated to a degree. Certain federal judicial districts have judges with better reputations than others. If you are in a district that only has a couple of judges and
they have poor reputations in the kind of case you are facing, you are less likely to remove. If you are in a jurisdiction with more judges, or a very high ratio of favorable to unfavorable federal judges, you are more likely to remove. There are no jurisdictions, however, in which the federal judges are all excellent nor are there any where the judges are all poor. Every jurisdiction has some judges that are very good and every jurisdiction has judges that are not so good.

Ultimately, whether you should remove the case to federal court requires the exercise of judgment and a balancing of the risks, but ultimately whether you get a “better” judge in federal court than state court will come down to a certain degree of luck.

If the case you are considering removing arguably relates to another case or cases pending in the same jurisdiction you are removing to, you may be able to seek to have the case you are removing transferred to that judge or consolidated with those cases. Similarly, if the case is a re-filed action (or an action that is related in some way to an earlier case), you may be
able to have the case assigned to the judge who heard the earlier case. Forum or “judge” shopping is frowned upon, but if there are efficiencies to be gained by having a particular case assigned to a particular judge, judges are amenable to such transfers.

Finally, you need to take into account the published decisions involving the issues you are facing in the case. If the federal court has a number of negative opinions, or there is negative authority from the U.S. Court of Appeals that includes the district court you would remove your case to, you will probably prefer to stay in state court. Conversely, if the state court authority is negative (or non-existent) and the federal court authority is more positive, you will likely want to get your case into the federal court if you can.

Step 2:
Determine whether there is federal jurisdiction.

In order to remove a case to federal court, the federal court must have subject matter jurisdiction over the matter. If there is no federal jurisdiction, the case cannot be removed.

Generally speaking, a case can be removed to federal court if it could have been filed in federal court by the plaintiff. In many cases both state and federal courts may have subject matter jurisdiction over a particular matter, and the plaintiff has his or her choice of which court to present the claim to. Plaintiffs generally prefer state courts for all the same reasons defendants
generally prefer federal courts. They believe the state court forum offers them leverage in settlement discussions and a more favorable forum for resolution of their claims.

Federal subject matter jurisdiction generally comes in two different varieties: Federal Question Jurisdiction and Diversity Jurisdiction. Diversity jurisdiction is now broken into two subsets – “standard” diversity jurisdiction and “CAFA” jurisdiction in putative class action
cases.

Federal Question Jurisdiction

Federal question jurisdiction exists when a claim arises pursuant to a federal law. For example, if a plaintiff alleges a claim pursuant to the Truth in Lending Act, the Real Estate Settlement Procedures Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, etc., the case presents a “federal question” and can be removed to federal court. In addition,
certain state claims that present a “substantial federal question” can also be removed on the basis of federal question jurisdiction. For example, a state consumer fraud claim that contends that a defendant violated the state statute by acting “unlawfully,” where the “unlawful” conduct is
alleged to be a violation of a federal statute, may present a federal question even though the claim is actually brought pursuant to state law. Also, certain state court claims are pre-empted by federal law, and thus present federal questions.

28 U.S.C. § 1331
The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.

Supplemental Jurisdiction

When a case containing claims that present federal questions and claims that do not present federal questions, the federal court has what is called “supplemental jurisdiction” to hear the non-federal claims. However, if the court dismisses the federal claims, it has discretion to either retain the state claims or remand them to state court. You should beware that in some
courts, judges regularly refuse to exercise supplemental jurisdiction over state claims if the federal claims are dismissed. This results in the state claims being dismissed without prejudice – i.e., the plaintiff can simply re-file them in state court. Thus, in cases where there is a significant likelihood that the claims presenting federal questions will be dismissed but it is less certain whether the state claims will be dismissed, you should anticipate that the state claims may wind up back in state court notwithstanding the removal. Your overall goals for the litigation should be considered when deciding whether to remove if there are both federal and non-federal claims
presented. If you believe the case will be settled quickly or your goal is to resolve the litigation by way of a motion as quickly as possible, you may elect not to remove a case if there is a chance that the federal court will refuse to consider the state claims.

This is also a good reason to raise both federal question and diversity jurisdiction as the basis for removal if there is a good faith basis to assert both in the notice of removal. While a federal court has discretion to decline to exercise supplemental jurisdiction to consider the state claims if it dismisses the federal claims, the same is not true if diversity jurisdiction exists. For this reason, you should always include diversity jurisdiction as a basis for removal if possible.

28 U.S.C. § 1367

(a) Except as provided in subsections (b) and (c) or as expressly provided otherwise by Federal statute, in any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution. Such supplemental jurisdiction shall include claims that involve the joinder or intervention of additional parties.

(b) In any civil action of which the district courts have original jurisdiction founded solely on section 1332 of this title, the district courts shall not have supplemental jurisdiction under subsection (a) over claims by plaintiffs against persons made parties under Rule 14, 19, 20, or 24 of the Federal Rules of Civil Procedure, or over claims by persons proposed to be joined as plaintiffs under Rule 19 of such rules, or seeking to intervene as plaintiffs under Rule 24 of such rules, when exercising supplemental jurisdiction over such claims would be inconsistent with the jurisdictional requirements of section 1332.
(c) The district courts may decline to exercise supplemental jurisdiction over a claim under subsection (a) if—

(1) the claim raises a novel or complex issue of State law,

(2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction,

(3) the district court has dismissed all claims over which it has original jurisdiction, or

(4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction.

(d) The period of limitations for any claim asserted under subsection (a), and for any other claim in the same action that is voluntarily dismissed at the same time as or after the dismissal of the claim under subsection (a), shall be tolled while the claim is pending and for a period of 30 days after it is dismissed unless State law provides for a longer tolling period.

(e) As used in this section, the term “State” includes the District of Columbia, the Commonwealth of Puerto Rico, and any territory or possession of the United States

The Two Flavors of Diversity Jurisdiction

In order to avoid bias in state courts against a state’s own citizens and against citizens of other states, Congress enacted a statute that provides for federal court jurisdiction over disputes between citizens of different states. However, the rule is subject to certain conditions and limitations. Recently Congress passed the Class Action Fairness Act, or “CAFA”, which makes it easier for defendants in class action cases to remove such cases to federal court on the basis of diversity jurisdiction.

As pointed out in the previous section, diversity jurisdiction offers a defendant more certainty that the case will be fully adjudicated in federal court, as a court has discretion to refuse to exercise supplemental jurisdiction over state law claims if it dismisses claims presenting federal questions. However, if diversity jurisdiction exists, it will cover all of the claims.

“Standard” Diversity Jurisdiction

Diversity jurisdiction exists when there is complete diversity of citizenship among the parties and the amount in controversy exceeds $75,000.00 exclusive of interest and costs.

For “complete diversity” to exist, no plaintiff can be a citizen of the same state of any defendant. So if there are five plaintiffs, only one of whom is a citizen of California, and there are five defendants, and one of them is also a citizen of California, complete diversity is lacking and the case cannot be removed on the basis of diversity jurisdiction (though it still might be
removed if a federal question is presented in one or more claim). If all five plaintiffs are citizens of California but none of the defendants are California citizens, then complete diversity exists.

Individual Citizenship
An individual is typically a citizen of the state in which he or she resides.

Corporate Citizenship

Corporations are citizens of the state where it was incorporated as well as the state in which it maintains its principal place of business. Often this will be the same state, but a corporation may also often be a citizen of two states. A corporation organized pursuant to the laws of the State of Delaware whose principal place of business is located in New York is a
citizen of both Delaware and New York. Determining where a corporation’s principal place of business is located can be tricky. Different courts apply different tests, so it is possible that in some courts a corporation is considered a citizen of state A and state B where another court will
consider it to be a citizen of state A and state C.

National Bank Citizenship
National banks – banks organized pursuant to the laws of the United States rather than the laws of any particular state – are citizens of the state of their “main office” as specified in their articles of association. There are some wrongly decided district court opinions that hold that a national bank is a citizen of both the state specified as the location of its main office in its
articles of association and the state of its principal place of business. The majority of decisions, however, hold that a national bank is a citizen of only one state – the state specified in its articles of association as the location of its main office.

LLC/Partnership Citizenship
Limited liability companies and partnerships are problematic because they are considered citizens of the states in which their members or partners are citizens. In larger LLCs or partnerships, this can be a large number of states, which often precludes removal on the basis of diversity jurisdiction. Fortunately, few mortgage servicers are organized as LLCs or partnerships.

Trust/Trustee Citizenship
Unfortunately, trusts and trustees are frequently defendants in mortgage servicing litigation, and the analysis of the citizenship of a trust is problematic. If a trustee is a “real party in interest,” then only the trustee’s citizenship is considered for purposes of diversity jurisdiction.
However, it would be a rare case in which the servicer would want to take the position that the trustee of the typical RMBS trust is the “real party in interest.” In most cases, the plaintiff is seeking relief against the trust, not the trustee individually. The trustee will want to avoid
individual liability and limit liability to the trust for which the trustee serves as trustee. For example, if the plaintiff is suing for consumer fraud and includes “XYZ Mortgage Servicing, Inc., a Delaware corporation and ABC Bank, N.A., as Trustee for the 2006-1 Series 6 Certificates” as defendants, ABC Bank, N.A. will want to avoid individual liability – in other words, if plaintiff successfully obtains a $1,000,000 judgment, the ABC Bank will want
satisfaction of that judgment to come exclusively from the Trust, not from the Bank’s assets.

Note that state law can vary on the ability of a trustee to avoid individual liability in this way – a topic beyond the scope of this pamphlet. For purposes of citizenship, the salient point is that if the servicer plans to take the position that the trustee is not the “real party in interest” and that
the trust itself is the “real party in interest,” then the citizenship of the beneficiaries of the trust must be considered. That is, the servicer will need to know who all the investors in the trust are (as well as their citizenship) in order to use diversity as a basis for removal.

Beware of cutting corners here. If the servicer takes the position that only the citizenship of the trustee matters, the trustee could be estopped from later contending that it is not the real party in interest. Since it is very unlikely that a servicer would ever take the position that the trustee is the real party in interest, if you are removing a case in which a trust or trustee is a defendant, you will need to determine who the beneficiaries are and their citizenship, and lay those facts out in the notice of removal.

Nominal or “Fraudulently Joined” Defendants In determining whether diversity of citizenship exists, you do not consider the citizenship
of “nominal” or “fraudulently joined” defendants. “Nominal” or “fraudulently joined” defendants are defendants who do not have any real interest in the outcome of the litigation and are added simply to avoid diversity jurisdiction. For example, a mortgage servicing company organized in Delaware with its principal place of business in California may have an office and
operations in Texas. If it is sued in Texas state court by a Texas citizen, diversity of citizenship would exist unless the plaintiff names a co-defendant that is a Texas citizen. If the plaintiff adds one of the mortgage servicing company’s employees who happens to live in Texas, the presence
of that individual defendant would break the diversity unless the employee is a “nominal” or “fraudulently joined” defendant. In other words, if the claim is for rescission pursuant to TILA, there is no way the individual defendant could possibly have liability and thus the individual defendant’s citizenship would not be considered by the court in determining whether diversity jurisdiction exists.

You should also beware of improperly joined claims. Often a plaintiff’s lawyer will join dozens of individual claims against dozens of unrelated mortgage servicers in a single action.

The loans have no relationship to each other, and other than a common issue of law, the claims are completely unrelated. Sometimes these claims are joined by a common argument that MERS is the beneficiary of the mortgages involved, and that MERS is somehow unlawful or mortgages
for which MERS serves as beneficiary are unenforceable. These cases can result in loss of diversity if one of the unrelated defendants is a citizen of the same state as one of the plaintiffs.

In this case, you should seek to sever the claims and remove. In order to avoid the removal deadline, this may need to be done on an expedited basis, or you may need to remove first and seek severance in the federal court. Which course to take in a case like this is highly dependent
upon the particular circumstances presented.

Amount in Controversy
When asserting “standard” diversity as the basis for federal jurisdiction, the removing party must allege and be prepared to support an argument that the “amount in controversy” is in excess of $75,000 exclusive of interest and costs. Note that “amount in controversy” is not necessarily the same thing as “damages.” Consequential expenses – such as the expenses
incurred as a result of complying with an injunction – can be considered when determining whether more than $75,000 is “in controversy.” Also, in any case where the borrower is contending that the loan is null and void or unenforceable, so long as the principal balance due exceeds $75,000 the amount in controversy standard will be satisfied.

Cases where the amount in controversy standard is hard to satisfy typically involve challenges to various fees or charges imposed by a mortgage servicer. Typically these cases are pled as class actions and may be removable pursuant to CAFA (see discussion infra). However, if a number of plaintiffs join together to seek recovery of relatively small amounts, it can be difficult or impossible to meet the amount in controversy threshold. Defendants cannot “aggregate” damages of multiple plaintiffs to meet the amount in controversy standard.

28 U.S.C. § 1332(a)

(a) The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between—

(1) citizens of different States;

(2) citizens of a State and citizens or subjects of a foreign state;

(3) citizens of different States and in which citizens or subjects of a foreign state are additional parties; and

(4) a foreign state, defined in section 1603 (a) of this title, as plaintiff and citizens of a State or of different States.

For the purposes of this section, section 1335, and
section 1441, an alien admitted to the United States
for permanent residence shall be deemed a citizen of
the State in which such alien is domiciled.

CAFA Jurisdiction

In 2005, Congress enacted the Class Action Fairness Act, which, among other things, made it easier for defendants to remove putative class action cases to federal court. CAFA can be a complicated statute to apply, but for purposes of this discussion, you need to be aware of two key differences between “standard” diversity jurisdiction and removal pursuant to CAFA.

First, only “minimal” diversity is required (not “complete” diversity). That is, only one plaintiff and one defendant need be citizens of different states – the presence of a defendant who is a citizen of the same state as one of the plaintiffs will not necessarily destroy diversity.

Second, the amount in controversy standard is raised to $5,000,000, but the claims of prospective class members can be aggregated (unlike “standard” diversity). Thus, if there are over 1,000,000 people in the class, the “amount in controversy” standard is satisfied even if each of them suffered damages of only $5.

There are several exceptions to these rules. For example, if more than 2/3 of the prospective class are citizens of the state in which the case was filed and at least one defendant is also a citizen of that state, the court will not take the case pursuant to CAFA. In other situations the court may have discretion to exercise jurisdiction depending on how many prospective class
members are citizens of the forum state.

28 U.S.C. § 1332(d)
(d)

(1) In this subsection—

(A) the term “class” means all of the class members in a class action;

(B) the term “class action” means any civil action filed under rule 23 of the Federal Rules of Civil Procedure or similar State statute or rule of judicial procedure authorizing an action to be brought by 1 or more representative persons as a class action;

(C) the term “class certification order” means an order issued by a court approving the treatment of some or all aspects of a civil action as a class action; and

(D) the term “class members” means the persons (named or unnamed) who fall within the definition of the proposed or certified class in a class action.

(2) The district courts shall have original jurisdiction of any civil action in which the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs, and is a class action in which—

(A) any member of a class of plaintiffs is a citizen of a State different from any defendant;

(B) any member of a class of plaintiffs is a foreign state or a citizen or subject of a foreign state and any defendant is a citizen of a State; or

(C) any member of a class of plaintiffs is a citizen of a State and any defendant is a foreign state or a citizen or subject of a foreign state.

(3) A district court may, in the interests of justice and looking at the totality of the circumstances, decline to exercise jurisdiction under paragraph (2) over a class action in which greater than one-third but less than two thirds of the members of all proposed plaintiff classes in the aggregate and the primary defendants are citizens of the State in which the action was originally filed based on consideration of—

(A) whether the claims asserted involve matters of national or interstate interest;

(B) whether the claims asserted will be governed by laws of the State in which the action was originally filed or by the laws of other States;

(C) whether the class action has been pleaded in a manner that seeks to avoid Federal jurisdiction;

(D) whether the action was brought in a forum with a distinct nexus with the class members, the alleged harm, or the defendants;

(E) whether the number of citizens of the State in which the action was originally filed in all proposed plaintiff classes in the aggregate is substantially larger than the number of citizens from any other State, and the citizenship of the other members of the proposed class is dispersed among a substantial number of States; and

(F) whether, during the 3-year period preceding the filing
of that class action, 1 or more other class actions asserting
the same or similar claims on behalf of the same or other
persons have been filed.

(4) A district court shall decline to exercise jurisdiction under paragraph (2)—

(A)
(i) over a class action in which—

(I) greater than two-thirds of the members of all proposed plaintiff classes in the aggregate are citizens of the State in which the action was originally filed;

(II) at least 1 defendant is a defendant—

(aa) from whom significant relief is sought by members of
the plaintiff class;

(bb) whose alleged conduct forms a significant basis for the claims asserted by the proposed plaintiff class; and

(cc) who is a citizen of the State in which the action was originally filed; and

(III) principal injuries resulting from the alleged conduct or any related conduct of each defendant were incurred in the
State in which the action was originally filed; and

(ii) during the 3-year period preceding the filing of that class action, no other class action has been filed asserting the same or similar factual allegations against any of the defendants on behalf of the same or other persons; or

(B) two-thirds or more of the members of all proposed plaintiff classes in the aggregate, and the primary defendants, are citizens of the State in which the action was originally filed.

(5) Paragraphs (2) through (4) shall not apply to any class action in which—

(A) the primary defendants are States, State officials, or other governmental entities against whom the district court may be foreclosed from ordering relief; or

(B) the number of members of all proposed plaintiff classes
in the aggregate is less than 100.

(6) In any class action, the claims of the individual
class members shall be aggregated to determine whether
the matter in controversy exceeds the sum or value of
$5,000,000, exclusive of interest and costs.

(7) Citizenship of the members of the proposed plaintiff classes shall be determined for purposes of paragraphs (2) through (6) as of the date of filing of the complaint or amended complaint, or, if the case stated by the initial pleading is not subject to Federal jurisdiction, as of the date of service by plaintiffs of an amended pleading, motion, or other paper, indicating the existence of Federal jurisdiction.

(8) This subsection shall apply to any class action before or after the entry of a class certification order by the court with respect to that action.

(9) Paragraph (2) shall not apply to any class action that solely involves a claim—

(A) concerning a covered security as defined under 16(f)(3) [1] of the Securities Act of 1933 (15 U.S.C. 78p (f)(3) [2]) and section 28(f)(5)(E) of the Securities Exchange Act of 1934 (15 U.S.C. 78bb (f)(5)(E));

(B) that relates to the internal affairs or governance of a
corporation or other form of business enterprise and that
arises under or by virtue of the laws of the State in which
such corporation or business enterprise is incorporated or
organized; or

(C) that relates to the rights, duties (including fiduciary
duties), and obligations relating to or created by or
pursuant to any security (as defined under section 2(a)(1)
of the Securities Act of 1933 (15 U.S.C. 77b (a)(1)) and
the regulations issued thereunder).

(10) For purposes of this subsection and section 1453, an unincorporated association shall be deemed to be a citizen of the State where it has its principal place of business and the State under whose laws it is organized. (11)

(A) For purposes of this subsection and section 1453, a
mass action shall be deemed to be a class action
removable under paragraphs (2) through (10) if it
otherwise meets the provisions of those paragraphs.

(B)

(i) As used in subparagraph (A), the term “mass action”
means any civil action (except a civil action within the
scope of section 1711 (2)) in which monetary relief claims
of 100 or more persons are proposed to be tried jointly on
the ground that the plaintiffs’ claims involve common
questions of law or fact, except that jurisdiction shall exist
only over those plaintiffs whose claims in a mass action
satisfy the jurisdictional amount requirements under
subsection (a).

(ii) As used in subparagraph (A), the term “mass action”
shall not include any civil action in which—

(I) all of the claims in the action arise from an event or
occurrence in the State in which the action was filed, and
that allegedly resulted in injuries in that State or in States
contiguous to that State;

(II) the claims are joined upon motion of a defendant;

(III) all of the claims in the action are asserted on behalf
of the general public (and not on behalf of individual
claimants or members of a purported class) pursuant to a
State statute specifically authorizing such action; or

(IV) the claims have been consolidated or coordinated
solely for pretrial proceedings.

(C)

(i) Any action(s) removed to Federal court pursuant to this
subsection shall not thereafter be transferred to any other
court pursuant to section 1407, or the rules promulgated
thereunder, unless a majority of the plaintiffs in the action
request transfer pursuant to section 1407.

(ii) This sub-paragraph will not apply—

(I) to cases certified pursuant to rule 23 of the Federal
Rules of Civil Procedure; or

(II) if plaintiffs propose that the action proceed as a class
action pursuant to rule 23 of the Federal Rules of Civil
Procedure.

(D) The limitations periods on any claims asserted in a
mass action that is removed to Federal court pursuant to
this subsection shall be deemed tolled during the period
that the action is pending in Federal court.

Step 3:
Is removal timely?
Watch the deadline carefully!

A defendant must remove within 30 days of receiving summons and complaint. There is a split of authority regarding the impact of an “earlier served” defendant on a “later served” defendant’s ability to remove. In jurisdictions known as “first served” jurisdictions, the deadline runs from the date of service on the first defendant served. It is important to know whether you are in such a jurisdiction. If a co-defendant was served 29 days ago and you were just served today, your removal may be due tomorrow! Other jurisdictions follow a “last served” defendant
rule, meaning each defendant gets a full 30 days to decide whether to remove the case. While an earlier served defendant may be time-barred from removing a case, a later served defendant could still remove in such a jurisdiction.

If a case cannot be removed immediately but becomes removable later, the defendant has 30 days from the receipt of the amended complaint or pleading that makes the case removable. For example, a complaint may be amended and add a federal claim or a claim that increases the amount in controversy, or a plaintiff may settle with a non-diverse defendant, removing that party from the case. In no event can a case be removed more than one year after filing, however, unless it is a class action removable pursuant to CAFA.

Deadlines for removal cannot be extended by agreement of the parties or even by order of court. The deadlines are jurisdictional. That is, if they are not satisfied, the court does not have jurisdiction to hear the case.

Step 4:
Obtain Consent of Co-Defendants

All co-defendants who have been served with summons and complaint must consent to removal of a case before it can be removed. This can impose a significant hurdle, particularly if you are under significant time pressure to get a case removed. For one thing, you may not know for sure whether the co-defendants have been served or not. If there is no evidence of service of
process on the docket and you have no reason to believe the co-defendants have been served, we typically allege in our notice of removal that “on information and belief” no other co-defendants
have been served, and that on further “information and belief” any other co-defendants would consent to removal. However, the best practice is to contact the co-defendants and obtain their consent. If a co-defendant is a frequent defendant in litigation, it may be possible to identify its
usual outside counsel and contact that attorney to obtain the consent. Otherwise, a call to a General Counsel or a law department might yield results. However, if you know that a co-defendant has been served (for example, there is a proof of service on the docket indicating
service) you must have consent from that co-defendant before you can remove the case. Consenting co-defendants should file written consents with the court to ensure that the court does not remand the case to state court on a sua sponte basis due to lack of proof of consent.

We generally counsel clients to remove cases within 30 days of the date they are filed even if they have not yet been served. This avoids any issues over timeliness of the removal (a case removed within 30 days of filing is per se timely). It also helps avoid the need to obtain consent of co-defendants since there is not likely going to be any evidence of service of process on the docket this early in a case.

If a co-defendant has already removed a case, you should file a written consent to that removal (assuming you consent) and you should also file your own notice of removal if there are any additional grounds that support federal jurisdiction and/or the removal that were not stated in the co-defendant’s notice of removal. You need to do this within the same 30 day deadline for filing the notice of removal itself.

Step 5:
Prepare & File Documents in Federal Court
Several documents need to be prepared and filed in both federal and state court in order to effectuate the removal, including a notice of removal, a certificate of interested parties, a civil cover sheet, appearance forms and a notice of filing of notice of removal.

Document No. 1:

Notice of Removal

The key document is the notice of removal itself. This document should be prepared as if it were a motion seeking to establish federal jurisdiction. It consists of numbered paragraphs in which the removing defendant alleges all of the facts pertinent to a determination that federal jurisdiction exists. The notice of removal should be supported by evidence. Some federal judges review cases that have been removed from state court and assigned to them even without any motion to remand being filed. These judges will sua sponte remand a case to state court if they are not convinced that federal jurisdiction exists. Because you don’t know how active the judge assigned to your case will be, best practices call for the submission of the evidence necessary to support your allegations with the notice of removal. This can include an affidavit or affidavits of
knowledgeable witnesses about those facts, and will likely include documents supporting the factual allegations. The notice of removal should cite the complaint to the extent the complaint contains allegations that bear on federal jurisdiction. All of the pleadings filed in the state court
must be attached to the notice of removal.

This is another place where you may be tempted to cut corners – particularly given the time pressure you may be under to get the removal accomplished. Resist that temptation. A remand will mean that you have wasted your time and incurred expenses with nothing to show for them.

Document No. 2:
Certificate of Related Parties

Another document that must be filed when you remove a case is a certificate of related parties. The specific requirements vary from court to court, but most if not all federal courts require a statement to be filed identifying any affiliates of a corporate defendant. The certificate
may not need to be filed when the removal is filed, but it is a good practice to file it together with the other removal papers so that it has been taken care of and does not get overlooked later. The requirements are usually set forth in the court’s local rules and typically require disclosure of theidentity of any entity or person owning more than 5% of a corporation, the identities of the members of an LLC, the identities of the partners of a partnership, etc. as well as the affiliates of each of those (i.e., tracing ownership up the “corporate family tree”). As mentioned elsewhere,
you need to be careful of how you treat trustees of trusts who may be named defendants, and consider whether you need to disclose the identity of the beneficiaries of the trusts in order to avoid an argument later that the bank or entity serving as trustee has individual liability.

Document No. 3:
Civil Cover Sheet
This is a form most district courts require to be completed and filed when the notice of removal is filed. Although it is perfunctory, it contains information the court looks at in determining whether diversity or federal question jurisdiction has been properly invoked. An error here can result in greater scrutiny of the allegations of the notice of removal.

Document No. 4:
Appearance Forms
Many, but not all, district courts will also require the attorneys appearing for the removing defendant to file separate appearance forms.

28 U.S.C. § 1446

(a) A defendant or defendants desiring to remove any civil action or criminal prosecution from a State court shall file in the district court of the United States for the district and division within which such action is pending a notice of removal signed pursuant to Rule 11 of the Federal Rules of Civil Procedure and containing a short and plain statement of the grounds for removal, together with a copy of all process, pleadings, and orders served upon such defendant or defendants in such action.

(b) The notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within thirty days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter.

(c) If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable, except that a case may not be removed on the basis of jurisdiction conferred by section 1332 of this title more than 1 year after commencement of the action.

****

(d) Promptly after the filing of such notice of removal of a civil action the defendant or defendants shall give written notice thereof to all adverse parties and shall file a copy of the notice with the clerk of such State court, which shall effect the removal and the State court shall proceed no further unless and until the case is remanded

Step 6:
Prepare & File Documents for State Court

Once the notice of removal has been filed in federal court, you must apprise the state court of the fact that the case has been transferred. This is accomplished by filing a “Notice of Filing of Notice of Removal” in state court.

It is the filing of this document that officially divests the state court of jurisdiction. For this reason, timing can be important. Generally speaking orders entered in state court prior to removal remain in effect after the case has been removed unless vacated or modified by the federal court. Temporary restraining orders entered in the state court will remain in effect until they expire by their terms or applicable federal rules. Preliminary injunctions, however, will continue until they have been vacated, modified or expire by their own terms. Thus, if the Plaintiff is seeking a temporary restraining order or other relief in the state court and you would
prefer not to have the state court consider the issues raised in such a proceeding, you will want to not only file the notice of removal in the federal court prior to the hearing on any such matter, but also the notice of filing of notice of removal in the state court prior to that hearing. Once the
notice of filing of notice of removal is filed, the state court is deprived of jurisdiction to act unless and until the federal court remands the case to state court.

Copies of all of these documents must be promptly served upon the plaintiff’s counsel.

Step 7:
Defend Against Motion to Remand
A motion to remand is a plaintiff’s request that the federal court return the case to state court. A motion to remand can be based upon an argument that the federal court lacks jurisdiction (e.g., the amount in controversy is less than $75,000, the citizenship allegations are incorrect in the notice of removal and the parties are not diverse, the complaint does not state a
federal claim, etc.) or an argument that the removal procedure was flawed in some way (e.g., a served defendant does not consent, removal was untimely, etc.).

The plaintiff has 30 days to file a motion to remand based on a defect in the removal procedure.
A claim based on lack of subject matter jurisdiction can be raised at any time! One of the dangers of removal is a faulty assertion of subject matter jurisdiction. A plaintiff who does not believe that federal jurisdiction exists can “lie in the weeds” on that issue and see if he or she can settle the case or obtain a favorable result without seeking remand or arguing a lack of
jurisdiction. If the case does not go as the plaintiff hoped, he or she can claim that the court lacked subject matter jurisdiction and that he or she gets to start all over in state court. For this reason, you must be absolutely certain that subject matter jurisdiction exists before removing a case.

Federal courts are said to “jealously guard” their jurisdiction. This means they strictly construe the removal statute in favor of remand and against removal.

Beware that the statute contains a fee shifting provision. If the court finds that there was no “objectively reasonable basis” for the removal, it can award the plaintiff its fees and costs in seeking remand.
28 U.S.C. § 1447(c)
(c) A motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction must be made within 30 days after the filing of the notice of removal under section 1446 (a). If at any time before court lacks subject matter jurisdiction, the case shall
be remanded. An order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal. A certified copy of the order of remand shall be mailed by the clerk to the clerk of the State court. The State court may thereupon proceed with such case.

Step 8:
Consider Options if Remand is Ordered
Consider your options if remand is ordered, but in point of fact they are limited. An order remanding a case to state court is generally not reviewable on appeal.

There are exceptions to this rule, but they are so rare and unlikely to apply in the typical case against a mortgage loan servicer that they are not worth discussing here. Under certain circumstances you can seek a writ of mandamus from a court of appeals if remand is ordered, but this is also very rare and there is a high standard that must be satisfied to obtain it.
There is an exception for cases removed pursuant to CAFA. An order remanding a case removed pursuant to CAFA can be appealed. See 28 U.S.C. § 1453(c)(1) (notwithstanding 28 U.S.C. § 1447(d), court of appeals may review remand order where case was removed under CAFA).
Basically, if remand is ordered, you are going back to state court and will litigate there. Most state court judges will not hold your attempt to take the case away from them against you, but it is something to keep in mind.
28 U.S.C. § 1447(d)
(d) An order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise, except that an order remanding a case to the State court from which it was removed pursuant to section 1443 of this title shall be reviewable by appeal or otherwise.

Step 9:
Impact of Removal on Deadline to Respond

Once the case is removed, you have the longer of:

i. 21 days from the date you receive the summons and complaint; or

ii. 5 days from the date of removal

to respond to the complaint with a motion to dismiss, answer and affirmative defenses, or some other pleading. Typically we take a conservative approach and contact the plaintiff’s counsel immediately upon removal to agree to a stipulated deadline for a response to the complaint.
Normally 5 days is insufficient, but in some cases if a motion to dismiss is ready to go there is no reason to delay further.

If the case is remanded to state court, the state court rules of procedure will apply. These can vary. The best practice is once again to seek a stipulation with the plaintiff’s lawyer for a deadline for the response in state court following remand

Federal Rule of Civil Procedure 81(c)

(c) Removed Actions.

(1) Applicability.
These rules apply to a civil action after it is removed
from a state court.

(2) Further Pleading.

After removal, repleading is unnecessary unless the
court orders it. A defendant who did not answer
before removal must answer or present other
defenses or objections under these rules within the
longest of these periods:

(A) 21 days after receiving — through service or
otherwise — a copy of the initial pleading stating the
claim for relief;

(B) 21 days after being served with the summons for
an initial pleading on file at the time of service; or

(C) 7 days after the notice of removal is filed.

(3) Demand for a Jury Trial.

(A) As Affected by State Law. A party who, before
removal, expressly demanded a jury trial in
accordance with state law need not renew the
demand after removal. If the state law did not
require an express demand for a jury trial, a party
need not make one after removal unless the court
orders the parties to do so within a specified time.
The court must so order at a party’s request and
may so order on its own. A party who fails to make a
demand when so ordered waives a jury trial.

(B) Under Rule 38. If all necessary pleadings have
been served at the time of removal, a party entitled
to a jury trial under Rule 38 must be given one if the
party serves a demand within 14 days after:

(i) it files a notice of removal; or

(ii) it is served with a notice of removal filed by
another party.

Conclusion
In most cases you will prefer to have your cases proceed in federal court rather than state court. On the surface, removing a case from state court to federal court is not difficult. However, there are many contours to federal jurisdiction, and various issues that may not be apparent at first glance that can significantly impact the litigation that must all be accounted for.
Removal should not be taken lightly – it should be carefully considered, planned for and implemented.

For More Information Why Removal of Your Wrongful Foreclosure Case to the Federal Court Might Be the Best Option to Save Your Home Visit: http://www.fightforeclosure.net

How to Effectively and Strategically Challenge and Win Your Wrongful Foreclosure Against Your Bank or Lender

18 Saturday May 2013

Posted by BNG in Affirmative Defenses, Foreclosure Defense, Judicial States, Loan Modification, Non-Judicial States, Your Legal Rights

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Tags

California, Foreclosure, Mortgage loan, Real Estate Settlement Procedures Act, RESPA, TILA, Trustee, United States

The key factors in making sound decision as to how to fight your foreclosure are based on whether your State has a Judicial or non-judicial foreclosure process.

It is vital to determine your strengths and weaknesses in order to know whether to use OFFENSIVE or DEFENSIVE tactics and strategies.

First of all you have non-judicial and judicial foreclosure states. Non-judicial basically means that instead of signing a conventional mortgage and note, you signed a document that says you give up your right to a judicial proceeding. So the pretender lender or lender simply instructs the Trustee to sell the property, giving you some notice. Of course the question of who is the lender, what is a beneficiary under a deed of trust, what is a creditor and who owns the loan NOW (if anyone) are all issues that come into play in litigation.

In a non-judicial state you generally are required to bring the matter to court by filing a lawsuit. In states like California, the fore-closers usually do an end run around you by filing an unlawful detainer as soon as they can in a court of lower jurisdiction which by law cannot hear your claims regarding the illegality of the mortgage or foreclosure.

In a judicial state the foreclosure must be the one who files suit and you have considerably more power to resist the attempt to foreclose.

These are the stage process:

Stage 1: No notice of default has been sent.

In this case you want to get a forensic analysis that is as complete as humanly possible TILA, RESPA, securitization, title, chain of custody, predatory loan practices, fraud, fabricated documents, forged documents etc. I call this the FOUR WALL ANALYSIS, meaning they have no way to get out of the mess they created. Then you want a QWR (Qualified Written Request) and DVL (Debt Validation Letter along with complaints to various Federal and State agencies. If they fail to respond or fail to answer your questions you file a suit against the party who received the QWR, the party who originated the loan (even if they are out of business), and John Does 1-1000 being the owners of mortgage backed bonds that are evidence of the investors ownership in the pool of mortgages, of which yours is one. The suit is simple, it seeks to stop the servicer from receiving any payments, install a receiver over the servicer’s accounts, order them to answer the simple question as to Who is my creditor and how do I get a full accounting FROM THE CREDITOR? Alternative counts would be quiet title and damages under TILA, RESPA, SEC, etc.

Tactically you want to present the forensic declaration and simply say that you have retained an expert witness who states in his declaration that the creditor does not include any of the parties disclosed to you thus far. This [prevents you from satisfying the Federal mandate to attempt modification or settlement of the loan. You’ve asked (QWR and DVL) and they won’t tell. DON’T GET INTO INTRICATE ARGUMENTS CONCERNING SECURITIZATION UNTIL IT IS NECESSARY TO DO SO WHICH SHOULD BE AFTER A FEW HEARINGS ON MOTIONS TO COMPEL THEM TO ANSWER.

IN OTHER WORDS YOU ARE SIMPLY TELLING THE JUDGE THAT YOUR EXPERT HAS PRESENTED FACTS AND OPINION THAT CONTRADICT AND VARY FROM THE REPRESENTATIONS OF COUNSEL AND THE PARTIES WHO HAVE BEEN DISCLOSED TO YOU THUS FAR.

YOU WANT TO KNOW WHO THE OTHER PARTIES ARE, IF ANY, AND WHAT MONEY EXCHANGED HANDS WITH RESPECT TO YOUR LOAN. YOU WANT EVIDENCE, NOT REPRESENTATIONS OF COUNSEL. YOU WANT DISCOVERY OR AN ORDER TO ANSWER THE QWR OR DVL. YOU WANT AN EVIDENTIARY HEARING IF IT IS NECESSARY.

Avoid legal argument and go straight for discovery saying that you want to be able to approach the creditor, whoever it is, and in order to do that you have a Federal Statutory right (RESPA) to the name of a person, a telephone number and an address of the creditor i.e., the one who is now minus money as a result of the funding of the loan. You’ve asked, they won’t answer.

Contemporaneously you want to get a temporary restraining order preventing them from taking any further action with respect to transferring, executing documents, transferring money, or collecting money until they have satisfied your demand for information and you have certified compliance with the court. Depending upon your circumstances you can offer to tender the monthly payment into the court registry or simply leave that out.

You can also file a bankruptcy petition especially if you are delinquent in payments or are about to become delinquent.

STAGE 2: Notice of Default Received

Believe it or not this is where the errors begin by the pretender lenders. You want to challenge authority, authenticity, the amount claimed due, the signatory, the notary, the loan number and anything else that is appropriate. Then go back to stage 1 and follow that track. In order to effectively do this you need to have that forensic analysis and I don’t mean the TILA Audit that is offered by so many companies using off the shelf software. You could probably buy the software yourself for less money than you pay those companies. I emphasize again that you need a FOUR WALL ANALYSIS.

Stage 3 Non-Judicial State, Notice of Sale received:

State statutes usually give you a tiny window of opportunity to contest the sale and the statute usually contains exact provisions on how you can do that or else your objection doesn’t count. At this point you need to secure the services of competent, knowledgeable, experienced legal counsel professionals who have been fighting with these pretender lenders for a while. Anything less and you are likely to be sorely disappointed unless you landed, by luck of the draw, one of the increasing number of judges you are demonstrating their understanding and anger at this fraud.

Stage 4: Judicial State: Served with Process:

You must answer usually within 20 days. Failure to do so, along with your affirmative defenses and counterclaims, could result in a default followed by a default judgment followed by a Final Judgment of Foreclosure. See above steps.

Stage 5: Sale already occurred

You obviously need to reverse that situation. Usually the allegation is that the sale should be vacated because of fraud on the court (judicial) or fraudulent abuse of non-judicial process. This is a motion or Petitioner but it must be accompanied by a lawsuit, properly served and noticed to the other side. You probably need to name the purchaser at sale, and ask for a TRO (Temporary Restraining Order) that stops them from moving the property or the money around any further until your questions are answered (see above). At the risk of sounding like a broken record, you need a good forensic analyst and a good lawyer.

Stage 6: Eviction (Unlawful Detainer Filed or Judgment entered:

Same as Stage 5.

What are some examples of financial injury due to errors, misrepresentations, or other deficiencies in the foreclosure process?

Listed below are examples of situations that may have led to financial injury. This list does not include all situations.

The mortgage balance amount at the time of the foreclosure action was more than you actually owed.

You were doing everything the modification agreement required, but the foreclosure sale still happened.

The foreclosure action occurred while you were protected by bankruptcy.
You requested assistance/modification, submitted complete documents on time, and were waiting for a decision when the foreclosure sale occurred.

Fees charged or mortgage payments were inaccurately calculated, processed, or applied.

The foreclosure action occurred on a mortgage that was obtained before active duty military service began and while on active duty, or within 9 months after the active duty ended and the service member did not waive his/her rights under the Service Members Civil Relief Act.

If you are ready to take the battle to these interlopers, in order to reclaim the home that is rightfully yours, visit http://www.fightforeclosure.net

FightForeclosure.net

~ Your "Pro Se" Foreclosure Fight Solution!

Tag Archives: California

How California Homeowners in Foreclosure Can Move to Vacate Default Judgment

How California Homeowners Can Technically Disqualify their Foreclosure Mill Attorney

California Broker Receives 10-Year Prison Sentence for Mortgage Fraud

Why Homeowners In Foreclosure Proceedings May Need To Remove Their Cases To Federal Courts

How to Effectively and Strategically Challenge and Win Your Wrongful Foreclosure Against Your Bank or Lender

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