While this blog focuses primarily on foreclosures and legal issues, the fact of the matter is that the foreclosure crisis is a symptom of two pervasive wrongs that continue to lurk across this country. The first is widespread and institutionalized fraud. The Fat Cats and financial wizards, with the consent of our elected and appointed leaders, engineered a system that sucked billions of dollars in equity and wealth from the middle and lower class and concentrated that wealth in those at the top of the pyramid…and those in foreign countries. Now that the wealth and equity has been sucked out of private hands, our courts and our local elected judges are being used to wrestle away the private property rights that were secured by the former privately-held wealth.
Unemployment- The Rot That Threatens To Destroy This Country
The second major wrong that has this country in the death grip is pervasive unemployment and underemployment. The Wall Street Journal today reports that there are 14.6 million Americans looking for work, or 9.5% of the workforce. (See the full article here) Now I think that number dramatically understates the scope of the problem because the figure does not account for all those people who are actually out of work or working and earning far less than they need to survive. If those real numbers were factored in, the unemployment number would surge dramatically. For the underemployed, I’m talking about any family where both are working, but are not making enough to cover the reasonable expenses of daily life. Factor in the costs of the very basics…housing, food and medical care and the percentage of Americans who are not surviving is daunting.
Consider too the number of people employed by the US Military and the percentage of GDP attributable to that portion of our larger economy. As of December 31, 2009 1,421,668 people are on active duty in the military with an additional 848,000 people in the seven reserve components. The 2009 U.S. military budget is almost as much as the rest of the world’s defense spending combined and is over nine times larger than the military budge of China. For FY 2010, Department of Defense spending amounts to 4.7% of GDP. Now I’m a huge supporter of our military, but the point I’m making is that we cannot afford to stop any of our existing wars because we cannot have even a small percentage of unemployed combat trained veterans languishing stateside unemployed with nothing to do.
Foreclosures- What is the point?
Against this bleak background, the foreclosure crisis plays out. Americans are unemployed and underemployed. They’re being thrown out of their homes forcefully on the orders of circuit court judges. The beneficiaries of these forced dispossessions are large financial institutions, foreign investment interests and federal governments agencies that are the ultimate owners of the debt. We all acknowledge that most of these parties engaged in widespread and massive fraud in the creation and transfer of the debt obligations. Through depositions and discovery we’re increasingly aware that the foreclosure mills and institutions are engaging in fraud in the litigation of these cases. Even in those cases where there is not abject fraud, in some cases the legal standards applied to obtain foreclosure has been so diminished that it’s become a meaningless farce. (see foreclosure rocket dockets) Rewarding those who committed fraud and the law firms that continue to diminish the rules of law and evidence that should apply in our courtrooms deeply offends my sense of fair play and right and wrong. And against this background I ask, “Why are we permitting these foreclosures to continue?” What will these bad actors (the lenders and their attorneys) do with these properties when the take them back? Why are we not forcing these bad actors to permit homeowners to stay in their homes under terms that are reasonable under the circumstances? The current modification schemes are not working and the lenders and their attorneys are not engaging in good faith negotiations with homeowners. The point of foreclosure should be to return a non-performing and wasting asset into some better performing use….but in this economy and in this practical reality, the best performing use of residential property is to keep homeowners in their homes under terms that are fair and just.
Our Judges- The Only Hope We Have of Preserving What Liberties And Dignity Remain
People don’t want to be in foreclosure. It’s embarrassing. It’s painful. It’s gut wrenching. Homeowners who are in foreclosure are largely not in foreclosure because they were reckless or irresponsible. Naive, gullible, misinformed….perhaps, reckless and irresponsible….perhaps in some instances….but how does their unintended conduct compare with the intended conduct of the far more sophisticated party….the lenders that made the loans and the bag men that are now suing to foreclose? Our local judges are the last line of defense against the inequitable conduct that brought us all to this place. This is not just about foreclosure. It’s not just about borrowing money and paying it back. It’s very much about all the sophisticated shenanigans that was playing behind the scenes and continues to play out in courtrooms across this country. The judges sitting on circuit court benches are by and large some of the brightest, most dedicated and intelligent people you’ll ever meet. Some may have been a bit shell shocked as this crisis invaded their courtrooms, but I’m fairly certain that most now understand most of the issues that play out in this sordid foreclosure arena. For those that still do not, we all need to do our job of telling the story in their courtroom until they get it.
I admire your appeal to the circuit court, but they are sold out to stimulus money.
Their over “burdened” dockets are too much of a bother … they simply don’t want to deal with it. As a result a foreclosure case is not a single case with thought given to the law…. but foreclosures cases! A backlog that is a “problem” that should be pushed through the courts as a whole.
And now we have senior judges handling the cases in Florida. Completely unaccountable and ready to take the brunt of any public backlash. Our Circuit Court Judges in Florida are happy to hand them over to the senior judges and not give a care.
So much for judicial foreclosures. Florida has judicial foreclosures in equity…. but reality is we have tuned out senior judges now pushing cases through. Rubber stamps.
Attorney Weidner where do the courts get the authority to appoint senior judges with stimulus money?
Are judges not elected? I want to see the actual law passed by our legislature allowing senior judges to try foreclosure actions.
It is no secret loan servicers are not working with homeowners. HAMP was set up to fail and with the confusion of the securitization of loans, it has enabled the banks to foreclose, bypassing the most basic proof of all: produce the note.
I have often wondered how the homeowners can fight foreclosure successfully. The lost note does not appear to work since the bank simply asks the court to accept a copy since they lost the original. With people like you helping homeowners fight to keep their homes is inspiring.
If a homeowner were to form their own corporation, deed their property to this newly formed corporation, and the bank foreclosed on the homeowner. Couldn’t the foreclosure be deemed invalid since the bank foreclosed on the wrong party (i.e. the homeowner and not the newly created corporation formed by the homeowner). I realize this is a band-aid solution and the gaping wound will take a much more complex strategy to stop the foreclosures, but it would at least buy some time.
The attorney could file a motion to set aside the foreclose based on the bank foreclosing on the wrong party.
Since the loan is already in default, the only ramification of a homeowner deeding his/her property to their own corporation or LLC would invoke an acceleration or due on sale clause. That clause has already been invoked due to the homeowners’ default.
Just a thought.
I founded beingmiddleclass.org. We are a group of people sharing information in an effort to postpone, hopefully stop foreclosure. We are also a support system for those who are struggling in this failed economy and it is our mission to strengthen the middle class. Matt, I have added a place on our forum to post your blog entries and would welcome you to join us.
Keep up the fight!
One thing you may want to try – the borrower is the “grantor” or “trustor” of the trust that was created when the note and mortgage was originally signed. You can revoke the “power of attorney” that was given to the bank as the “trustee” of the mortgage. The banks breached the trust when they sold the note and mortgages as securities. That was not disclosed in the original contract. Borrowers did not know the banks were going to use thier notes as collateral to wheel and deal on Wall Street. The borrower, as “trustor” has the right to revoke. There is nothing in the contracts that say you can’t! Without their power of attorney, I don’t think they have the right to foreclose. Or demand a “cease and desist” per FDCPA until the bank produces the accounting documents that will prove the note was liquidated at the time of origination. When they are sold as securities, what are the investors paying for the piece of the pie? The Plaintiff is only allowed to “claim” the amount of their interest in the security. This is why they don’t want to produce the accounting records. They have nothing invested! Also, the tragedy is when they foreclose on loans they have already written off, they get a judgement PLUS the house, plus interest, plus a deficiency. The borrower loses everything, plus gets a big bill, and the banks walk away with over 200%+ profit! It’s called corruption and greed.
Believe me, this whole fiasco was PLANNED by the bankers and the Federal Reserve that is behind this. Their intention is to bankrupt America. Our founding fathers warned us against letting the private bankers control the money. They did the same thing in old England 200 years ago. History is repeating itself because we have allowed a corrupt government to get in bed with the banksters. We need to run them out of the country and start issuing the money from the State level. They are withholding the money from the economy, so everyone goes bellyup and then are taking our houses. This is a transfer of wealth, plain and simple. The American Revolution was fought against the bankers who were in bed with the King that wanted to tax the colonies in gold, the Civil War was financed by the English bankers and when Lincoln wanted to issue Greenbacks to fund the war, they killed him. Kennedy wanted to end the Fed and issue “treasury notes”, and they killed him too. Why should we allow a bunch of murdering thieves to run our country? If we do nothing about it, it will only get worse. We should be filing a class action against ALL the banksters and demand they be investigated along with the politicians as to their securities dealings that have bankrupted the nation again. 1933 US BK was a result of the banksters wheeling and dealing in the 1920’s. Today is a mirror of what happened then only on a larger scale. Prosperity does not come from debt, it comes from sound money that is backed by true value. The government only creates debt that needs to be financed at interest cost (the Fed Reserves profit) and then passed on to us in the form of taxes. We need all the good “Lawyers” to stand up and help us get back the Common Law of the Land that the banksters have manipulated into dissolving for their benefit. The American people know what needs to be done, we just need someone to help do it. Being that the “federal money” is federal issue, the States can nullify anything the federal law tries to control. 10th Amendment rights. See http://www.nullifynow.com