Matt Weidner – Fighting For The American People

Archive for January, 2010

The Federal Government spends bajillions of dollars telling us that they’re trying to help homeowners in the foreclosure crisis.  Problem is, according to their own numbers:

• Over 900,000 Americans have begun trial modifications since the program’s inception and over 110,000 have been approved for permanent modifications as of December 31, 2009.

• Over 100 servicers have signed up to participate in HAMP, covering more than 89% of mortgage debt outstanding in the country.

So the problem is, 89% of mortgage loans are covered by this program that we’re paying $75 billion dollars for and only 110,000 consumers have benefited from….guess who reaps the biggest benefit from all this….

THE BANKS THAT CAUSED THE PROBLEMS IN THE FIRST PLACE!

Details of the new HAMP boondoggle can be found here. Under the new initiative:

1. New Requirements that Documentation be Provided Before Trial Modification Begins

   Today’s guidance refines the documentation process and makes it easier for eligible borrowers in trial modifications to get permanent modifications quickly.  Under this guidance:

   A simple, standard package of documents will be required prior to the servicer’s evaluation of the borrower for a trial modification. This process will be required for all new HAMP modifications that became effective after June 1, although mortgage servicers may implement it sooner.

2. Converting Borrowers in the Temporary Review Period to Permanent Modifications

   In December, Treasury implemented a review period through January 31 to provide servicers additional time to collect and submit missing documentation for borrowers in trial modifications, to require that borrowers be notified of any missing documents, and to give borrowers an opportunity to dispute and correct any erroneous information in their applications. Today’s guidance clarifies for servicers the proper procedures for conversion of those borrowers who are current on their monthly payments to permanent modifications.

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I was wondering what the response would be to the backlog of foreclosures and now it has reared its ugly head in the name of The Florida Consumer Protection and Homeowner Credit Rehabilitation Act.

A review of this bad, anti-consumer bill can be found in the St. Petersburg Times here. If it passes it will be bad news for consumers…some of the lowlights:

• If you’re a financially strapped Florida homeowner — 62,719 Tampa Bay properties got foreclosure notices last year — the 53-page bill contains worrisome signs.

• Non-judicial foreclosures must conclude in no less than three months and no more than a year. Most Florida foreclosures take a year to 18 months to work through the courts these days, longer if a lawyer fights a successful rear guard action. So in 90 days banks can theoretically auction the home out from under you.

• The Florida Supreme Court’s newly endorsed mandatory mediation for lenders and homeowners would effectively go bye-bye. The bill provides only for informal meetings between creditors and debtors.

• Even after homeowners are evicted, banks can still pursue them for unpaid mortgage debt. But banks will waive that right if homeowners avoid trashing or stripping the house before the new owner takes over.

With the strong anti Wall Street, anti banker, anti fat cat sentiment on the street, this will be a hard bill to pass, but something will come of it and I’ll keep watching.

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Years ago I filed a lawsuit on behalf of an out of state corporation client.  The opposing attorney filed a motion to dismiss because the corporation I was suing on behalf of was not registered with the Florida Secretary of State.  Fast forward to now when I’m building my practice on defending homeowners in foreclosure and the failure to register motion to dismiss issue is back…in a big way.

Capacity is Almost Never Plead In Foreclosure Cases

I have consistently argued that Florida law and Florida Rules of Civil Procedure require a plaintiff to be properly identified in order to maintain their lawsuit.  Properly identified means in the body of the complaint the full corporation or entity name is described along with its state or jurisdiction of registration.  (i.e. Bank of America a North Carolina Corporation or Bank of America a National Association chartered pursuant to the National Banking Act.)  In the vast majority of foreclosure cases filed in this state, the Plaintiff fails to identify who it is, how it is chartered and how it has the authority to bring the suit.  At best, you might find a plaintiff identified as, “U.S. Bank, N.A.”  What does “NA” stand for?  On a beer bottle it means “Non Alcoholic”. (I know this because it is written out.) While I’m 100% certain what it means in a foreclosure case, I’m pretty sure it means, “National Association”.  I’m also pretty sure that in some instances when the Plaintiff is “US Bank, NA” that plaintiff may (emphasis added) be exempt from some state laws.   I say may because I’ve actually read the National Banking Act and I’m very clear about the exemption/preemption language in the Act.  Some acts of NA plaintiffs are exempt and some state laws are preempted….but many more (and potentially the important ones) are not.  Taking deposits and collecting money is clearly exempted, but I’m not at all convinced that engaging in trust related activities is.  I’m also pretty sure that breaking down doors and unilaterally repossessing a borrower’s home without court process is not preempted by state law either. Anyway, the point is, Plaintiffs must be required to plead out their capacity at the start of these cases so that a whole range of other issues related to the Plaintiff’s action are on the table from the front end.

I’ll follow up more on this case later, but after this Order was issued, the Plaintiff amended their complaint to add yet a third party into the mix…the mortgage was written by World Savings, then they assert that World Savings was assumed by Wachovia, but that after they filed Wachovia was assumed by Wells Fargo….and so now a third party who conceivably has an interest in this case is being drawn in.  Problem is, the version of “Wells Fargo” they plead in is different than the evidence they attached to their amended complaint to prove up that Wells Fargo was the proper party in interest…so I’ve filed a Second Motion to Dismiss in this case…..stay tuned.

The full text of the opinion as published in the Florida Law Weekly is found below: Online Reference: FLWSUPP 1702MATA

Mortgages — Capacity to sue — Where plaintiff has failed to plead or specify in what capacity it brings suit and failed to define or identify nature of its legal entity, plaintiff has not pled capacity to sue — Capacity to sue may be raised by motion to dismiss where defect appears on face of complaint — Case dismissed without prejudice WACHOVIA MORTGAGE, FSB F/K/A WORLD SAVINGS BANK, Plaintiff, v. ANNE MATACCHIERO, Defendant. Circuit Court, 6th Judicial Circuit in and for Pinellas County. Case No. 08-16936-CI-13. December 15, 2009. Anthony Rondolino, Judge. Counsel: Brianna Finch. Matthew Weidner.

ORDER

THIS MATTER, having come on consideration from the Defendant’s Motion to Dismiss, filed by counsel for Defendant Matthew Weidner, this Court having reviewed the pleadings filed in this matter and accepted argument of counsel who appeared before the Court, it is hereby, ORDERED AND ADJUDGED that:

1. In its Motion to Dismiss, counsel for Defendant noted that the only identification of the Plaintiff appears in the caption of the Complaint and the first paragraph where the Plaintiff is identified simply as, “Wachovia Mortgage, FSB, F.K.A., World Savings Bank”. The Plaintiff’s name is not set off or specified within the body of the Complaint or in any other pleading nor is any description provided to explain the legal nature of the entity or to define what the initials “FSB” stand for.

2. Counsel for Defendant, in its Supplemental Memoranda in Support of Motion to Dismiss, cited Florida Rules of Civil Procedure Rule 1.120(a) Pleading Specific Matters which provides that:

(a) Capacity. It is not necessary to aver the capacity of a party to sue or be sued, the authority of a party to sue or be sued in a representative capacity, or the legal existence of an organized association of persons that is made a party, except to the extent required to show the jurisdiction of the court. . . .When a party desires to raise an issue asto the legal existence of any party, the capacity of any party to sue or be sued, or the authority of a party to sue or be sued in a representative capacity, that party shall do so by specific negative averment which shall include such supporting particulars as are peculiarly within the pleader’s knowledge.

3. Counsel for Defendant also cited Florida Rules of Civil Procedure Rule 1.110(b) which requires that a Complaint include a “short and plain statement of the grounds upon which the court’s jurisdiction depends. . .” Counsel for Defendant asserted that by failing to plead or specify in what capacity the Plaintiff brings suit and by failing to define or identify in any way the nature of its legal entity, the Plaintiff has not plead that it has the capacity to maintain suit before this Court.

4. “Capacity to sue” is an absence or legal disability which would deprive a party of the right to come into court. 59 Am.Jur.2d Parties § 31 (1971). This is in contrast to “standing” which requires an entity have sufficient interest in the outcome of litigation to warrant the court’s consideration of its position. Keehn v. Joseph C. Mackey and Co., 420 So.2d 398 (Fla.App. 4 Dist. 1982)

5. Counsel for Plaintiff introduced a Response to Defendant’s Motion to Dismiss in which it claimed the Plaintiff was both a Federal Savings Bank and not required to register with the Secretary of State in order to establish capacity and that it was a foreign corporation and exempt from registration pursuant to Florida Statute 607.1501. The inconsistent allegations made in Plaintiff’s response are not facts that have been plead and such facts must be plead so that Defendant may respond to them through a responsive pleading.

6. Counsel for Defendant represented to the Court that his research revealed few Florida Court opinions which address the issue of capacity to sue, but urged this Court to consider Federal Court opinions interpreting Federal Rule of Civil Procedure 9(a) from which Florida Rule of Civil Procedure Rule 1.120(a) is derived.

7. The issue of capacity to sue may be raised by motion to dismiss where the defect appears on the face of the complaint. Hershel California Fruit Products Co. v. Hunt Foods, 111 F. Supp. 603 (1975), quoting Coburn v. Coleman, 75 F. Supp. 107 (1974); Klebano v. New York Produce Exchange, 344 F.2d (2nd Cir. 1965).

8. Failure to raise the issue of a Plaintiff’s capacity by a specific negative averment has been held to constitute a waiver of that defense. McDonough Equip. v. Sunset Amoco West, 669 So.2d 300 (Fla.App. 3 Dist. 1996); Plumbers Loc. U.N. 519, Miami Fla. v. Serv. Plbg., 401 F. Supp, 1008 (1975); and see Sun Val. American Land Lease, 927 So.2d 259 (Fla.App. 2 Dist. 2006); Shaw v. Stutchman, 105 Nev. 128 (1989).

9. The Defendant’s Motion to Dismiss is GRANTED and the case is dismissed without prejudice except that the Plaintiff shall have twenty (20) days from the date of this Order to file an Amended Complaint to address the matters raised within the Defendant’s Motion to Dismiss. 10. If the Plaintiff Amends its Complaint the Defendant shall have twenty (20) days from the date of receipt of Amended Complaint to file its responsive pleading.

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An article in today’s Wall Street Journal found here notes that the housing market is recovering but

• Other areas look decidedly less hopeful. Miami, Las Vegas, Phoenix, Orlando, Jacksonville and Tampa, Fla., had the highest rates of defaulting borrowers among the 28 markets surveyed.

• The weakest job-market prospects this year were found in Tampa, Jacksonville, Las Vegas, Atlanta, Detroit and Phoenix, according to Moody’s Economy.com.

• In the Miami-Fort Lauderdale, Fla., area, about 28% of mortgage borrowers are behind on payments or in foreclosure, according to LPS Applied Analytics, compared with 8.6% in the Minneapolis-St. Paul area and 13.2% in the entire U.S.

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The legal and legislative deck is, for now, stacked severely against the borrower and homeowner in foreclosure proceedings.  Some things are slowly changing and an experienced foreclosure attorney can provide real assistance to help a homeowner keep their home or at least stay in it long enough to work on some better solution.

Tenants and Foreclosure The New Rights Provided in the Helping Families Save Their Home Act of 2009! The full text of this piece of legislation can be found here. The important part of the legislation is as follows…The lender cannot evict a tenant from the property when that tenant is living under a valid lease.  So how can this help the homeowner?  Well, let’s say you live in a neighborhood with similar homes.  You and your neighbor “switch” homes with each living in the other person’s similar or comparable home. 

Even if the lender files foreclosure, that lender could not evict either party from their new home!

I’m certain the lenders were not thinking of the potential constructive use of this provision when this section of the law passed, but just think of the consequences if everyone in America converted from an owner to a tenant….and all the lenders were stuck holding the bag, forced to accept the significantly-reduced amount of rent from their new tenant…Beautiful!

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While the knuckleheads in Washington continue to prattle on about health care, the economic picture continues to worsen and unemployment continues to grow.  Until something real is done about jobs, the economy will continue to shrink and our troubles will only worsen.  Some data from a recent Wall Street Journal Article that can be found here:

• Since the Great Recession began in 2007, some 8.6 million jobs have been lost, according to the bureau; and small businesses, the normal source for new jobs, are still shedding workers.

• Unemployment, in short, has graduated from being a difficulty, a worry. It is now a catastrophe, with some 15.3 million Americans out of work, according to the BLS.

• It could take as many as five years or even more to recover all of the eight-plus million jobs lost since March 2007. That’s because we would have to create an additional 1.7 million jobs annually beyond those for the 1.3 million new people who enter the work force every year.

• Economists may see the recession as being over, but the man on the street does not. Roughly 60% of the public believes the recession still has a way to go, a NBC/Wall Street Journal poll reported last October. Even those who have not suffered know someone—a friend, a neighbor, a family member—who is being hurt. Two in three say the rally in the stock market has not changed their views.

There are sound reasons for this gloom. Consumers have learned a bitter lesson. They understand that increased consumption—private and public—will have to come from income and not borrowing, and income will have to come from employment.

Hello People In Charge—-???? Do You Hear This?

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