Justice Schack's take is straightforward, and sends a tremor through some bank suites: If a bank cannot prove ownership, it cannot foreclose. "If you are going to take away someone's house, everything should be legal and correct," he said. "I'm a strange guy - I don't want to put a family on the street unless it's legitimate."
As a result, he's become an example for other judges to follow, and a "dangerous" rogue in the eyes of lenders.
What's surprising, however, is Judge Schack isn't coming up with novel readings of the law. He's just forcing lenders to follow the rules.
"To the extent that judges examine these papers, they find exactly the same errors that Judge Schack does," said Katherine M. Porter, a visiting professor at the School of Law at the University of California, Berkeley, and a national expert in consumer credit law. "His rulings are hardly revolutionary; it's unusual only because we so rarely hold large corporations to the rules."
"A ‘Little Judge' Who Rejects Foreclosures, Brooklyn Style " [New York Times]
(Photo: steakpinball)
You god-forsaken SOCIALIST!!! Do you want the terrorists to win?!?!? Why do you hate 'Murica!?!?!
]]>The New York attorney general is going after process servers who decided that it was too much trouble to actually give the legal papers to the defendants. Much easier to just bill various law firms for lots of work (in some cases, literally impossible amounts--there are only 24 hours in a day), throw away the papers, and screw over the people being sued.
Thousands of legal judgments are being thrown out because the defendants had no chance to defend themselves. The first they knew of the case was when people grabbed money from their bank accounts, or showed up with legal judgments demanding they pay.
Is anyone here convinced that banks that can't bother to submit evidence that they really own the mortgage carefully vetted their process servers to be sure that all the papers were being served in the correct way, on the correct people?
]]>It would be unhealthy to see the pendulum swing too far the other way, but I don't think it is an extraordinary dream to wish for an even playing field.
As it is, even if you are right, and the company is wrong, and you suffered untold damage due to a large corporation's greed and corner-cutting, you can be litigated, postponed and delayed until Old Nick himself wins the gold medal in figure-skating.
This simple thing here, that corporations would be held to the same burden of proof as you and I when attempting to exercise their right, whatever they may be, should be regarded as a cornerstone of justice. That we would be so amazed by it sadly tells as lot about the way this nation has gone to the dogs.
]]>@ARP:
It's actually a great deal lower than that--at the pleading stage, you don't "prove" anything. Making a prima facie complaint simply means that you properly allege those elements that, if they were to be proved at a trial, entitle you to the relief sought.
@sinfonian94:
If you're talking about corporate charter revocation, it's true that's a rare occurence. However, litigation, both civil and criminal, destroys corporations all the time. Daily, in fact.
@merely_a_muse: Wow...I read that as "wears ONLY bow ties" and was imagining a little old geezer riding a scooter around a courthouse wearing just a bowtie and his birthday suit.
You just made my morning.
]]>@tankertodd:Many of these "Deadbeats" would not be that way if they still had Jobs. Which they probably would still have if the Banks did not screw up the economy in the first place.
]]>@xtc46 - thinksmarter on twitter: Yep, Its there fault the Banks screwed the economy, so they lost there jobs....
If the Banks did not make the mess in the first place, many of the beople that are behind, would not be behind.
]]>Dumb stuff like that is annoying; there is blame all around.
]]>I've also had banks call and ask me for the notes or mortgage deeds a year after the closing. Funny, as the notes go directly to the bank, and the deeds go to the town clerk, who is then instructed to send them directly to the bank after recording. I keep records of everything I send, including delivery confirmations. So when I see a bank employee's signature on the receipt for the package containing the note, it's clear they have just lost the document. It happens a lot more than you would think.
]]>@Cyberxion101, Atticka: Makes me think of Judge Fudge from Drawn Together. "I can't rule on your motion right now. I'm far to busy... bein' delicious."
]]>That's because, while they are state-of-the-art around technology and have the best online banking system I've ever seen, they are a very conservative institution around money, and only lend to people who are not at risk of not being able to pay their mortgages.
They also have made steady profits all through this latest financial crisis.
Nobody put a gun to the banks' heads and made them lend money to deadbeats. Nobody made Wells Fargo steer people who qualified for affordable prime mortgages into unaffordable sub-prime mortgages. Nobody made Chase send out internal memos telling their reps how to lie to their own computers to put people into loans they didn't actually qualify for.
I have no sympathy for wrong-doers, but I believe most of the blame lies with greedy irresponsible financial institutions, not irresponsible deadbeat borrowers.
]]>My parents bought their first house under that system, in 1958. I'm not saying it was a perfect way to do things, but it was much simpler than today, and you sure didn't see the kinds of shenanigans we've seen over the last decade with things like ARMs with balloon payments, and bankers steering borrowers into loans they actually couldn't afford.
As far as outlawing mortgage-backed securities...
I'd be fine with any level of mortgage securitization, under two conditions:
1. With any given mortgage, only one clearly recognizable organization can manage it at any one time, the mortgage can't move more than, say, once every three years, and nobody else up the chain can even contact the borrower, let alone try to foreclose.
2. If anybody goes to foreclose or otherwise go to court against a borrower, they have to place 5% of the mortgage's principal balance in a court-controlled escrow account. If their paperwork isn't in order, the court immediately forks over that money to the borrower as recompense for hassling them.
HSBC bank appealed a recent ruling, saying he had set a "dangerous precedent" by acting as "both judge and jury," throwing out cases even when homeowners had not responded to foreclosure motions.
As you said, in many cases it's not exactly cause for celebration. But it also seems appalling to me that this is an exception and not the norm.
]]>*sniff* *sniff* what's that smell. oh, it's tankertodd the troll.
]]>Surely this can all be settled in mandatory binding arbitration!
]]>Nation of laws indeed.
]]>@JGKojak: But then all the corporations would leave their state and settle somewhere else. They would try to get their home state law to apply. If they can't do that, corporations threaten to pull out of the state. Law makers freak out because they won't get anymore campaign financing or perks. So, lawmakers relax the standards and it goes back to business as usual. The only thing is that its pretty likely you can out-bluff a corporation if you're big enough (sorry North Dakota). Their desire for contstant double digit growth will force them back into the state eventually.
]]>@huadpe: Except that in the intial stages of a case, the burden of proof can be low. The plaintiff just needs to prove a prima facie case. Meaning, it seems like there might be a case. If the defendent doesn't show up, then a default judgement is entered in favor of the plaintiff and that's generally the end of it.
It appears that most judges don't bother looking at the documents to see if the plaintiff really has a prima facie case and just assume that they do since they're producing all sorts of financial documents.
]]>Judges look -very- unfavorably upon attempts to be litigious in order to harm others for your own gain, and they're generally found to be illegal. Further, in a civil case, the burden of proof is on the plaintiff. So when you sue someone, you have to provide proof that your claim is valid, before the defense would have to come up with a scrap of paper. When you're being foreclosed upon, you're the defendant, so the bank has to come up with the documents as its their burden of proof.
]]>@GitEmSteveDave_HasAFrenchLoaf: I'm not sure the judge would want them, seeing as you haven't exactly stated where this French loaf is...
]]>@MostlyHarmless: HOW DARE YOU IMPLY SUCH NONSENSE? You consumer hater! Take your non branded, menial statements elsewhere!
/flamewar
]]>One of my favorites was the guy in Baltimore who'd made all of his payments on time to the right place. But his mortgage had been "securitized", and the people who took his payments didn't pass them on correctly. So some financial organization showed up out of the blue, foreclosed, kicked him out, and sold his house to somebody else. It took him years to get it sorted out. He was kind enough to just take the money and move elsewhere; he probably could have gotten the whole foreclosure and subsequent sale unwound by the court, but that would have booted out some other poor soul who had bought and moved into the foreclosed house in good faith.
There have even been cases where multiple institutions have claimed to own the same mortgage and tried to demand double mortgage payments.
There's a reason banks need to have their paperwork in order before filing for foreclosure. Without that, it's all to easy for incompetent or crooked institutions to screw over homeowners.
]]>So it's not like the thousands of bondholders each have a slice of the title. One entity owns the title, it processes payments and pays the bondholders, and it (the mortgage servicer) is responsible for maintaining clean title.
]]>@xtc46 - thinksmarter on twitter: These people aren't getting 'help' - their rights under the law are being protected.
]]>So no, they're not getting a free house, but it might delay a foreclosure long enough for them to get their poo together.
]]>@henneko: That's the first thing I thought of. What ended up happening with that sheriff?
]]>@Wuhao: This is what I was thinking. Most people who are having trouble right now are in trouble becasue of their mistakes. I just cant decide how many irresponsible people im ok with helping to make sure the ones who really need help are helped.
]]>I got a tax note from the county because Chase had been paying my escrow on the wrong address(! - they only got 2 digits wrong out of 6...)
Took a couple months to clear up.
Now imagine if I weren't current with my mortgage- I bet, given what I faced at Chase, that they couldn't produce the right documents.
You know-- all it would take is for a few states to pass "truth in foreclosure" laws requiring banks to do some local paperwork to foreclose, and said local paperwork would require all the documentation be in order.
]]>Bad asses indeed.
]]>I'd buy him a drink if I could.
]]>This isn't the first time this kind of thing has happened, there was that one sheriff that refused to serve eviction notices for foreclosure on renters unless the bank could demonstrate that it had met its legal obligation of advance notice to the tenants of rental units. I'm sure this decision will be met with equal amounts of confused vitriol and ignorant flaming.
]]>If the Defendant doesn't respond to a lawsuit in time, the Plaintiff may obtain a "default judgment" since the Defendant is in default. The amount of delving into the records that's done is up to the judge. They can't do an independent, in-depth investigation on every motion for default judgment they hear.
]]>Yes, making regular payments without complaint is a good start to proving the loan exists.
If you don't lose the house, though, you'll end up bankrupt. If you were living where I do (which you American's don't), that means you are likely to lose the house anyway. Of course, that's expected, since no banks will sign a no-recourse mortgage up here.
]]>You can't put the corporation in jail, but the "death penalty" is used a lot more for corporations, especially smaller ones, so that kind of evens it out. Kind of.
]]>Clearly this is one of those "activist" judges that I hear people complaining about. How dare he apply the law as it is written. Won't somebody think of the corporations?
Disclaimer: The above should be read as sarcasm.
Experience has taught me I must explain this for the humor impaired.
@The Porkchop Express: Meanwhile, at the Hall of Justice....
]]>Banks and other financial institutions have got themselves into this mess by pursuing the fast buck and worrying more about meeting revenue predictions/goals.
]]>Well it really says a about most judges. They are letting foreclosures go though improperly. This isn't a wake-up call for corporations. It's a wake-up call for judges.
]]>It has made me wonder if it would be possible for somebody who is NOT being foreclosed upon could file some sort of declaratory judgment action basically to get the court to declare that you don't owe the bank any more money because they don't have the right documents.
]]>I am not sure how this applies to 'non-judicial' states where the banks don't need a court order to foreclose. I don't know how that is allowed.
]]>...I wonder how you go about putting a corporation in jail.
]]>We need more judges like this one to remind corporations that they are beholden to legal obligations as well.
]]>If the bank has proof they own the home and the current homeowners aren't paying, only then can they foreclose.
]]>@Atticka: he probably sleeps with that blindfolded lady next to his bed.
]]>