Courts rule against ridiculous foreclosure defense arguments

Remember the famous Judge Schack of New York?  He threw out foreclosure cases to the delight of foreclosure victims all over the USA, giving them hope.

Well hopes got dashed when a NY Appeals court hammered shack for abusing discretion and not following the law.

http://www.forbes.com/sites/danielfisher/2013/03/25/ny-court-reinstates-foreclosure-chides-judge-for-robosigning-sanctions/

When will foreclosure victims stop drinking the kool-aid of foreclosure defense?  They waste a fortune hiring malpracticing attorneys to defend against foreclosure, and they lose the house anyway, even when delusional judges like Shack toss the foreclosure.


Also, the show-me-the-note argument often fails.  These opinions explain why:

Henkels v. J.P. Morgan Chase (D. Ariz., 2011) ("Plaintiff argues that the facts in this case are distinguishable from the cases decided by the courts in the District of Arizona. However, Plaintiff does not identify how the facts in this case differ from the numerous District of Arizona cases concluding that the "show me the note" theory and UCC-related arguments are not cognizable legal theories. Plaintiff's reliance on case law from judicial foreclosure states is inapposite in a non-judicial foreclosure state, such as Arizona. The Arizona Supreme Court has explained this distinction: "Unlike their judicial foreclosure cousins that involve the court, deed of trust sales are conducted on a contract theory under the power of sale authority of the trustee. They are therefore held without the prior judicial authorization ordered in a mortgage foreclosure." In re Krohn, 52 P.3d 774, 777 (Ariz. 2002). The Arizona statutes governing the sale of foreclosed property through a trustee's sale do not specifically require that the foreclosing party produce a physical copy of the original Promissory Note. See A.R.S. § 33-807(A) ("[A] power of sale is conferred upon the trustee of a trust deed under which the trust property may be sold . . . after a breach or default in performance of the contract or contracts for which the trust property is conveyed as security, or a breach or default of the trust deed."). 

Accordingly, Plaintiff's allegations relating to the "show me the note" theory and UCC-related arguments will be dismissed for lack of a cognizable legal theory. See Balistreri, 901 F.2d at 699."); 

Mitchell Bank v. Schanke, 2004 WI 13, 268 Wis. 2d 571, 676 N.W.2d 849 (Wis., 2004) ("The parties to this litigation focus on the missing Note and whether the Bank needed to produce the Note to foreclose. The circuit court, the court of appeals, and the parties all speak of the Mortgage as "securing the $50,000 note." Yet, this is an improper use of terminology. "A mortgage, secures the debt, not the note, bond, or other evidence of the debt, while the note represents, and is the primary evidence of, the debt." 59 C.J.S. Mortgages § 143 (1998). What matters is the debt itself, not the Note. Thus, the proper inquiry is whether the Bank failed to prove the debt secured by the Mortgage. 

The Mortgage in question here secures two categories of debts. First, it secures the $50,000 debt evidenced by the missing Note. Second, the Mortgage, via the dragnet clause, purports to secure all antecedent debt owed by the Waltkes to the Bank. With respect to the first category—the debt evidenced by the Note—the Bank was not required to produce the Note in physical form, if it could establish the Note's existence, terms, and conditions through other evidence, or otherwise establish the existence of outstanding debt secured by the Mortgage. See, e.g., New England Savs. Bank v. Bedford Realty Corp., 680 A.2d 301, 310 (Conn. 1996) (finding that the loss of a promissory note supporting a mortgage was not fatal to foreclosure action). "In Wisconsin, the cause of action on a note evidencing an indebtedness and the cause of action to foreclose the mortgage on real estate that secures the indebtedness are distinct." Bank of Sun Prairie v. Marshall Dev. Co., 2001 WI App 64, ¶ 12, 242 Wis. 2d 355, 626 N.W.2d 319. Thus, in the context of a mortgage foreclosure action: 

A bill or note is not a debt; it is only primary evidence of a debt; and where this is lost, impaired or destroyed bona fide, it may be supplied by secondary evidence. The loss of a bill or note alters not the rights of the owner, but merely renders secondary evidence necessary and proper. 

Therefore, it matters not whether the Note itself is produced, as long as the Bank can prove the underlying debt secured by the Mortgage.")


And I have attached the Welk v GMAC ruling from the USDC in Minnesota.  There a scammer foreclosure defense attorney Butler sued an array of banks and argued all kinds of nonsense for an array of clients.  The court sent him packing, and I expect him to get disbarred.

Docket:  http://dockets.justia.com/docket/minnesota/mndce/0:2011cv02676/122251/
Opinion: http://law.justia.com/cases/federal/district-courts/minnesota/mndce/0:2011cv02676/122251/149
Court of Appeals affirms: http://caselaw.findlaw.com/us-8th-circuit/1638697.html,

The only practical way to address foreclosure is to get the mortgage examined professionally, and then shove the causes of action in the mortgagee's face and demand settlement, or sue the lender.

Call me if you need help with that.

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Bob Hurt         Blog 1 2 3   f  t   2460 Persian Drive #70 Clearwater, FL 33763 Email; Call: (727) 669-5511 Law Studies: Donate   Subscribe Learn to Litigate with Jurisdictionary