Archive for November, 2013

Does the Bank have a “Witness” at Trial?

There are a billion nuances to defending a homeowner at a foreclosure trial.  Here’s a fun one – does the bank even have a “witness” who can testify?  In my experience, often not.

Suppose the foreclosure plaintiff is Wells Fargo Bank, N.A. as trustee of some alphabet soup securitized trust.  Whenever this happens, the witness at trial is almost never an employee of Wells Fargo Bank (or whatever corporate fraudster is standing in as the plaintiff).  Rather, that witness purports to be a witness for the servicer – a totally different entity (Ocwen Financial Corp., for example).

When that bank lawyer calls the witness to the stand, one of the first things they try to establish, through testimony, is that Ocwen is the servicer of this loan for Wells Fargo.

Objection.  Hearsay.  There are no documents here establishing Ocwen is the servicer of this loan.

Often, at that point, the bank’s lawyer and witness have nothing to say – and no documents – in which event that objection should be sustained.  That “witness” has no personal knowledge of Ocwen being a “servicer” for Wells Fargo for that loan – that testimony is hearsay, based off of a pooling and servicing agreement which is not before the court and not in evidence.  That makes the testimony inadmissible hearsay.

In other cases, the bank’s lawyer will pull out some type of power of attorney, a document that purportedly gives the servicer, Ocwen, the authority to prosecute foreclosures on behalf of the plaintiff, Wells Fargo.  If you look closely at these POAs, though, you’ll often notice they are limited – the term “limited” often being in the title of the document itself, i.e. “Limited Power of Attorney.”  More significantly, in the body of the document, the servicer is given authority to prosecute the foreclosure only “to the extent authorized by the pooling and servicing agreement,” or words to that effect.

If the bank doesn’t have the pooling and servicing agreement with them in court, then guess what?  The Power of Attorney is useless.  After all, that POA only gives the servicer authority to act (and, essentially, be the servicer) to the extent authorized by a specific document … but that specific document isn’t even in court, so the bank has nothing showing the servicer has the authority to prosecute that case.

As a result, the “witness” who came to court to testify that the company he/she works for is the “servicer” for the plaintiff should not be able to even begin her testimony, as it’s all inadmissible hearsay.

This was one argument I made in a foreclosure trial yesterday, with success.  The bank thought they were going to foreclose, but its witness wasn’t even allowed to testify.

Again, there are dozens of other, little tricks like this that I use to help homeowners (many I’m not willing to share for fear they be seen by evil eyes), particularly in a trial setting.  If you’re a homeowner, but you don’t have counsel, did you know to assert this defense/objection?  If not, how many other bona-fide defenses do you think you’re missing out on?

Banks often show up to trial without a true “witness.” Don’t let them get away with it.

Mark Stopa

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The Aftermath of Focht

When Florida’ Second District Court of Appeal issued a written opinion in Focht v. Wells Fargo Bank, N.A. on September 25, 2013, Florida homeowners, consumer advocates, and defense attorneys were concerned.  After all, there was potential for the Florida Supreme Court to change the law and take away one of the biggest defenses homeowners can raise in a foreclosure case, the bank’s standing at the inception of the suit.

Fortunately, that issue is now dead.  Wells Fargo decided not to appeal to the Florida Supreme Court, and even though the Second District certified the issue, the Florida Supreme Court lacks jurisdiction to rule when an appeal is not filed. mI’d like to think Wells Fargo realized it had no chance of prevailing after reading my motion for rehearing, but whatever the reason, there is no imminent risk of the law being changed on this issue.  “Standing at inception” remains a requirement in all foreclosure cases in Florida, and that’s great news for homeowners, obviously.

Meanwhile, though, some bank lawyers and even some judges are pointing to the Focht ruling as proof of a changing of the guard in the foreclosure arena.  They see Focht as proof that judges are tiring of defense arguments and should just rule in favor of banks.  In support, they point not only to the certified question and, in particular, Judge Altenbernd’s concurring opinion.

I suppose I can understand this logic.  After all, three appellate court judges openly campaigned that the Florida Supreme Court change the law to prevent homeowners from raising “standing at inception” as a defense in foreclosure cases.  Judge Altenbernd is so troubled at the equities of foreclosure defense that he openly lamented something that is totally lawful, homeowners collecting rents while a foreclosure suit is pending.

Hence, it might seem easy to argue Focht as proof that the tide is turning.  It might be easy, but it’s wrong.   

Focht doesn’t help banks.  Focht helps homeowners!  Just look at who won the appeal – not Wells Fargo, but Focht!  Yes, the judges didn’t want to have to rule in Focht’s favor.  Yes, Judge Altenbernd finds it inequitable.  The point, though, is that despite their personal feelings on the matter, these judges still ruled in favor of the homeowner!

This is the essence of foreclosure defense.  Frankly, I don’t care if judges want to rule in my favor.  I don’t care about their personal feelings on the matter.  All I ask, as defense counsel, is that they follow the law.  In that sense, Focht is the poster-child for foreclosure defense.  Quite simply:

Judges’ personal feelings on foreclosures are irrelevant.  All that matters is that they continue to follow the law.

So if any bank lawyer tries to say Focht somehow proves a trial court judge should rule in favor of a homeowner, that it proves the tide is turning, make sure you argue otherwise.  Focht doesn’t help banks – it helps us.

Mark Stopa

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“I’m Sorry, You’re Too Late”

It happens nearly every day.  A homeowner comes to my office with a tear-jerking story, explaining how he/she has been foreclosed.  A Final Judgment of Foreclosure was entered, but the homeowner is now ready and willing to pay Stopa Law Firm to defend the case.  “Work your magic, Mark.  We’re ready.”

There’s just one problem.  The homeowner waited too long.  There’s no magic to work – the case is over.  You see, once a Final Judgment is entered, the time to assert defenses has passed.  As a matter of procedure, those defenses are barred.  Short of a bankruptcy consultation, there’s little that can be done to stop that foreclosure.  Defenses that could have carried the day can no longer be raised.

“I’m sorry, you’re too late.”

Sometimes I fear that I perpetuate this problem by providing information on this blog.  Homeowners may think they can take the information provided here and defend a case on their own.

Please … don’t make this mistake, folks.

I could spend years educating you on how to defend your case.  It’s called law school – and that’s just the start of it.  The nuances of what to argue and how to argue it are never-ending.  Candidly, the biggest problem for pro se homeowners, in my experience, is they might know what to argue, but they have no idea when or how to argue it.

You think the bank lacked standing when it filed suit, so you bring a motion to dismiss.  Wrong.

You think the bank lacked standing when it filed suit, so when the bank moves for summary judgment, you don’t file anything, but you show up at the hearing to argue.  Wrong.

I’ve created an entire business model predicated on helping as many homeowners as possible as inexpensively as possible.  It’s called Stopa Law Firm.  If you’re waiting to retain us, please – don’t be penny wise and pound foolish.  Get an experienced foreclosure defense attorney on your side before it’s too late.  Otherwise, you’ll be one of the many prospective clients calling our office only to be told:

“I’m sorry, you’re too late.”

Mark Stopa

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Bankruptcy Stay Prevents ANY Activity in State Court Foreclosure Cases

In the foreclosure universe that exists in Florida courts in 2013, judges often take it upon themselves to set foreclosure cases for trial.  Case Management Conferences (CMCs) are the precursor for trial, a hearing for the purpose of setting a case for trial.  Many homeowners want to avoid these trials and the CMCs which precede them.  With Florida judges loathe to grant continuances, it may feel impossible to do so.  This is one instance where bankruptcy can be so valuable – not as a substitute for foreclosure defense, but in addition to it.

If a homeowner files bankruptcy right before a trial, CMC, or whatever hearing is scheduled in the pending foreclosure case, that court proceeding must be cancelled under the “automatic stay” provisions of the bankruptcy code.  This “stay” typically lasts weeks, sometimes months, occasionally more.  As a result, nothing can take place in the state court foreclosure lawsuit (for so long as the bankruptcy stay is in effect).  No matter how much the bank or the judge may want the case to proceed, federal law prohibits it.

In recent months, I’ve seen Florida judges react to bankruptcy filings by scheduling CMCs.  The judges’ rationale is clear … “if the homeowner is going to file bankruptcy to prevent/delay trial, then I want a CMC to take place in 60 days to see if the stay is still in effect and, if not, set trial.”  As a result, homeowners and/or their counsel are forced to come to state court and attend a CMC, often when a bankruptcy stay is in place.

The state court judge may think this is innocent, but I’m convinced this is wrong.  Even if the judge’s intent is simply to inquire if a bankruptcy stay is still in effect, that CMC should not take place.  Such CMCs happen frequently in state courts throughout Florida, but they shouldn’t.  But don’t take my word for it – check out the ruling of this Tampa bankruptcy judge.  This language from the Order is particularly interesting:

By operation of 11 U.S.C. § 362(a), the automatic stay came into effect on September 28, 2012, when Mr. Hanna filed a petition for Chapter 13 relief. A suggestion of bankruptcy was filed in the pending state court foreclosure case. Notwithstanding this notice, matters continued to be set in the foreclosure case, including what is denominated as a case management or status conference.

The automatic stay prohibits the continuation of any judicial proceeding against the debtor that was commenced prior to the bankruptcy filing. The fact that the state court plans to conduct a “Case Management Conference” or a “Status Conference,” as opposed to the adjudication of a substantive motion, does not change this Court’s ruling.  When the automatic stay under 11 U.S.C. § 362(a) is in place, even administrative matters cannot take place.

Debtor and his counsel cannot be required to attend hearings in the face of the stay, as that creates a burden the statute is designed to prevent. While this Court appreciates the desire of the state court to be informed as to matters that effect the administration of that court, nonetheless, such proceedings place an additional burden on the debtor and his counsel to attend hearings that should be suspended by operation of the automatic stay.

If you’re a homeowner, an attorney for a homeowner, or a judge, please be aware of this issue.  It might feel innocent to schedule a CMC in a foreclosure lawsuit when a bankruptcy stay is in effect, but at least one bankruptcy judge shares my view that it’s wrong.

Mark Stopa

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