Bankruptcy: Objection to Motion for Relief from Stay

[sfosmith]

Does anyone know how to get an evidentiary hearing in the Bankruptcy Court to determine if a bank holds the note they say they do?

My judge simply permits a bank to issue their own declaration from a bank officer for evidence that they hold the note and that they are the real party in interest.

I thought about a motion for evidentiary hearing, but don't know if it is allowed.

Any experience here?

Pro Se

[tobee43]

when you go pro se they depend on your lack of knowledge to bog you down in motions etc...

in this case i would likely think you would have to file some type of objection to the document that the bank submitted....

it may be time to get an attorney.....hate to say.

[HHM]

What is the end game scenario here, what are you really trying to accomplish?

However, if a "motion" is filed, then the responding document is either a "response"
or "objection." When an objection to a motion is filed, then a hearing is scheduled by the court automatically (in most cases).

[sfosmith]

Objection to Motion for Relief from Stay

I filed an objection to bank's motion for relief from automatic stay in chapter 13.

I included a memorandum outlining the legal reasons why the bank had no standing to bring the motion, since their proof of claim included only a copy of a note endorsed on a separate piece of paper (allonge) from the original mortgage company allegedly in 2006. An assignment of Deed of Trust was made by MERS in 2010 after notice of default was filed.

Assuming that the loan was securitized as Wall Street paper, I suspect the bank may no longer have the original note. The bank has not complied with my request to review the note since February this year, sending only copies of the note I signed in 2006 with the undated, detached endorsement. The law, as I understand it, requires demonstration of note ownership when the note is not held and properly endorsed. The purpose of the law is to protect debtors from other investors who may produce a note later, when the house is foreclosed by the loan servicer, investment bank, or whatever.

My objection is to convince the court to apply the law. My judge in California allows proof in the form of a declaration by a bank officer or bank lawyer that the bank possesses the [original] note.

We all know the banks have been caught lying, backdating, and forging documents. To allow your opponent to certify that they have the evidence you seek without producing it before the court is not right. A bank officer can literally look at a copy of the note on an imaging system and sign a declaration that he saw it and it is in their possession. It seems the Wall Street syndicate is getting an easier time in court than you or I would have in a private dispute over an investment.

For this reason, I am seeking an evidentiary hearing with discovery. If the judge does not grant the request, I will appeal to the circuit court. I posted here to get comments on how to get the evidentiary hearing when judges are partial to the powerful banks. At this time, I think the best way is to file a counter motion which will be heard at the same time as my objection to the bank's amended motion in September.

Hope this is more clear. Any comments?

[HHM]

So, the bank filed a MFRS after chapter 13 was filed. That means either (a) you did not provide for curing the arrears in the plan, or (b) you did not start paying your regular mortgage after the case was filed.

Please tell me you have not fallen for one of those "produce the note" get a free house schemes. Here is the problem from a judges perspective. You are correct, the banks are doing some shady things when it comes to the letter of the law of evidence; HOWEVER, you took out a mortgage, presumably paid on it for some time, and then stopped. Your actions indicate that there was a valid mortgage at some point and very few judges are going to rule in your favor over an "evidence" issue. Now, if there was some underlying fraud in the mortgage, that is one thing. Also, in the BK system, the BK judges often look at this as a state law issue. They will often grant the MFRS and allow you to fight it out in state court.

I hope it goes your way, but still, it is not clear what you are trying to accomplish. This issue should never have gone to MFRS in a chapter 13 in a properly crafted chapter 13 plan.

So, I hate to blunt, but it sounds like you are doing this pro se (without an attorney) and are in over your head. Which is usually the case with pro se chapter 13's.

[sfosmith]

Thank you for those comments. Most people jump into Bankruptcy to get more time with the automatic stay. I have a little experience in courts of law but will plainly admit that I'm outgunned by law firms with knowledge, influence and funds.

I realize this may be an exercise in delaying the inevitable. The judges are not standing up for the citizens and the politicians are owned by Wall Street and powerful corporations.

In my case, there may be some fraud in the loan docs which will come out when I get to state court.

I hear what your saying about "produce the note". It's become a cliche. I know banks don't have to produce the note for California trustee sales. But an objection to motion for relief from stay is different.

I got a sense of the judge's position this month, and won a new hearing based on a technical violation of the judge's courtroom policy. So I think he will find for the bank no matter what the legal argument is as soon as they get their declaration corrected. I might as well start the notice of appeal now.

I think the reason why people want to fight the banks is because it is not simply that you borrowed money and you owe to someone. Its because the note you signed was leveraged by the investment banks 30, 40, 50 fold and made trading derivatives, purposely engineering a system of bankruptcy, collecting taxpayer funded insurance, being repaid in full, then selling your house and starting the cycle again.

One West Bank, for instance. makes a huge profit on foreclosures with the deal they got from the FDIC for taking over Indymac.

[justbroke]

As HHM wrote, this is only a stall tactic. Even if there are bad assignments, the Note is usually a bearer note (endorsed in blank), and it can be easy to overcome these hyper-technical issues. In other words, the "produce the note" people lose in the end 99.999% of time.

The "holder of the note" will just say, simply, that you owe the money. Since the Note is a bearer instrument, they have the right to foreclose. Most Judges will listen to that argument. The only time it becomes an issues is when the paperwork is wrong. This is usually because the Note never actually ever changed hands, and has been in one of 3 major "vaults" (warehouses) owned by companies that store documents. (So much so, that even a lost note is not an issue for most of these banks.)

If this is just a delay tactic... fine. However, what HHM wrote is true. Don't blame the politicians or the banks. We all "enjoyed" the system. You need to blame yourself too, unless you aren't the one who signed the Promissory Note?

(A Trustee sale on a "Deed of Trust" is totally different from a Mortgage. Now that I know what a "deed of trust" is, I will try to avoid them!)

[sfosmith]

I agree that the simple "produce the note" demand is bound to fail. There is, however, some success when one spends time to look behind the curtain into the securitization schemes: The trust your loan was placed in even before you signed papers, the other trustee, the prospectus, pooling and servicing agreement, possible payoff of loan by credit default swap insurance all facts that may lead to the right of discovery for a evidentiary hearing.

Lawyers are uncovering the ugly truth that when these "lenders" foreclose, they aren't paying any investors. It's all extra money. They made a killing on your loan through leveraging already.

The more you learn about Wall Street, the more you will understand that there is no clear owner of the note, and no clear investor that has to be paid. It was a high stakes game loaded with fraud and paid for by taxpayers.

There is plenty of blame for politicians to accept for paving the way for this system.

[justbroke]

I agree that the simple "produce the note" demand is bound to fail. There is, however, some success when one spends time to look behind the curtain into the securitization schemes:

What success??? The "produce the note" defense has slowed down, but has not stopped foreclosures. So much so, that the "standard" practice now in Florida, is to submit a certified copy of the Note, Mortgage, Assignment(s) and an affidavit of the amounts due and owing when filing a Foreclosure Lawsuit. There is no longer something to "produce". Even if you attack the assignments, most Judges will look at the "bearer" Promissory Notes as sufficient.

As HHM wrote, remember, that you did take what's known as a consensual lien by signing a mortgage and note when you made the purchase/refinance. That fact alone is proof that you owe someone some money. That they sold the "rights" to collect from you, to someone else... is immaterial.

Even the supreme court opined that the security instrument (mortgage/deed of trust) always follows the note (promissory note). The assignment problems have always been with the security instrument and the MERS issue. I think if you ask any seasoned foreclosure attorney... they'll tell you that produce the note or defective assignment issues will only slow down the inevitable.

It has nothing to do with "Wall Street". It has to do with a hyper-technical process from which most jurisdictions had ignored the technicalities. You would need a genuine issues of ownership of the note, or have a bad, missing or incorrect endorsement to have any winning strategy. In most cases, the only "delay" tactic is to declare that the Plaintiff is not a beneficiary or agent of the holder of the note, and can't foreclose upon the mortgage. That will get you a nice delay, and that's about it. The plaintiff will just go and fix the paperwork.

[sfosmith]

Let Me Be Clear

By success I refer to cases where the judge has cancelled mortgages such as In Re Foreclosures.

I agree that produce the note alone is a dead end. But doing the the research on title, trust pools, and case law may cause a question of fact to arise. I refer to the proof of claim and whether the foreclosing party has standing to foreclose.
If the Servicer, say Chase Bank, sold the loan but remains the servicer, they a vulnerable to an attack on standing.

In May, a bankruptcy judge wiped out 1.2 million allegedly owed to Citibank because of standing and MERS issues. Ricky Walker v. Citibank.

We know lawyers have caught banks and their lawyers forging documents, backdating, and bogus declarations. Look what's going on with the prosecution of David Stern and Watson, Shapiro and Fishman in Florida. Fraud. I sure wish I was being foreclosed on by Stern.

If I found fraud in my loan docs or chain of title or foreclosure docs, you don't think I could get the attention of the judge on that? Or a court of appeal?

So when one begins to dig in, something may turn up. And lead the court to grant the right to inquiry. That's when the bank is inclined to make a deal. They don't want discovery of what happened to your loan in the "market place".

For some, the goal is a mortgage modification and cancellation of arrears and on better terms than the bank will offer with an application.

[justbroke]

By success I refer to cases where the judge has cancelled mortgages such as In Re Foreclosures.

Go re-read "In Re Foreclosures". The judge only dismissed the pending foreclosures. The judge did not void the valid liens on the property.

However, I will agree that there are plenty of foreclosure defense attorneys, some of whom I absolutely love (in Florida), that have made great strides in the securitization process and collateral attack on "MERS". Even they will tell you that getting the lien avoided and mortgage "canceled" is a stretch.

I don't want to give false hopes to people on this board. Besides, this is a very specific foreclosure strategy and there are boards out there more dedicated and suited to that discussion. In the context of a Bankruptcy, most of the BK judges won't want to hear what is otherwise a State issue. Unless there is some problem with the actual motion, the movant, in bankruptcy court, only needs to show they are a party in interest to have the motion granted. The judge will defer it to State court where it is more appropriate to wage a battle over "State" law on the issue.

Let me add that I have read In Re Forclosures, N. District of Ohio, Eastern Division, several times. I just looked at the "Order" at the end and it reads

For all the foregoing reasons, the above-captioned Foreclosure Complaints are dismissed without prejudice

As I stated before, these cases are dismissed and "without" prejudice allowing the plaintiffs to refile. They are paperwork issues only.

[ryan]

.... In most cases, the only "delay" tactic is to declare that the Plaintiff is not a beneficiary or agent of the holder of the note, and can't foreclose upon the mortgage. That will get you a nice delay, and that's about it. The plaintiff will just go and fix the paperwork.

I am doing this right now.

It is plenty of work to file appropriate motions, pro se, and get anywhere. But, so far it has bought me a lot of time.... actually more than I expected. Like Justbroke says, eventually they will produce corrected paperwork and I will lose...however based on my latest projections that will be into next year.

I have NO expectations of getting a free house ,lol.
(..tho if Ed McMahon were still alive....hmmm)

[justbroke]

In May, a bankruptcy judge wiped out 1.2 million allegedly owed to Citibank because of standing and MERS issues. Ricky Walker v. Citibank.

Now that BKforum is back up, I ask you to go re-read Walker V. Citibank as well. This was an issue on a proof of claim. The claim was denied without prejudice. Again, nowhere does the judge "wipe out" or otherwise void the security interest in any of the cases you have brought forward.

This is a zero-sum game. (And that's all it is... a game.) The whole purpose of the challenges to standing, assignments, endorsements and the like, are only to by time. However, the information that was posted in this thread used words that would have people believing that they will have their mortgage "wiped out". Even in the NY case where the judge denied a claim, the lawyers, on their own website and blog, state that the owner did not get a "free" house and there are more battles ahead.

justbroke says to use this as a strategy. Most intelligent attorneys who play this zero-sum game, will tell you it will get you a delay only. These same attorneys will tell you that you may now have leverage as well with the creditor. This leverage may allow you to get a modification and maybe even a principal reduction, just so that the lender doesn't lose a lot of money litigating the case(s).

I'll just leave everyone with this. In all these instances, the security instrument was never challenged. The fact that there are documentation issues surrounding a foreclosure -- including forged assignments and maybe even endorsements on fraudulent allonges -- doesn't negate that the mortgager did take out a loan and pledge the property as security. Now, I highly recommend that people challenge standing (locus standi) because there have been cases where one creditor claimed to own the promissory note, and then another party stepped forward and claimed the SAME ownership rights to collect on the promissory note! If anything, at least these challenges will validate the correct creditor who is entitled to the benefits under the terms of the note.

[ryan]

If I found fraud in my loan docs or chain of title or foreclosure docs, you don't think I could get the attention of the judge on that? Or a court of appeal?.

I missed this comment before. You should know, as someone who is well into the process already, it is no piece of cake to 'get the judges attention'. You can't merely say you THINK there is fraud, you have to prove it..... And, I'll say this whole process is mentally very taxing and takes many hours of preparation. Judges are not push overs for this line of argument.

..and getting to a court of appeals is whole other mountain to climb. For instance, you'll need a court reporter for all your previous hearings, to have something for the appeals court to review. I already know my limits, and have set my expectations realistically. Remember, most lawyerrepresented clients fail at this as well.

ps...what did happen to the forum going down?