Recently, an article appeared in the Advocate, a magazine circulated to Idaho attorneys which supposedly addresses the legal concepts applicable in Idaho relating to fraudulent foreclosures. The author is described as specializing in complex financial transactions, and it is clear, her paycheck comes from representing banks.
Overall, the article is a puff piece designed to suggest that banking attorneys are correct in all of the tactics they use to attempt to defeat fraudulent foreclosure actions, and it references a case pending before the Idaho Supreme Court, Trotter v. BONY. It repeatedly uses the inflammatory mantra that homeowners who resist foreclosure just want a ” free house.” To date invocation of this horridly prejudicial phrase has served the banks well around the country, even though in most cases, the attorneys for the banks have absolutely no idea what the homeowner’s true intent is.
Unfortunately, it is also an amazing feat of sloppy thinking. Mortgages and deeds of trust are security devices. In other words they are designed to secure payment of an underlying promissory note. In most instances in which homeowners resist illegal foreclosures, they are seeking to invalidate the mortgage or deed of trust on the basis of lack of standing, robo-signing, false assignments and false notarizations, which are serious defects in the documents. See U. S. Bank, NA v. Ibanez, 458 Mass. 637 (Mass. 2011). However, even if the mortgage or deed of trust is held to be invalid, the underlying promissory note is still enforceable (absent any defenses to the note), just not through foreclosure. Carpenter v. Longan, 83 US 271 (1872)
For my vote, a homeowner who still owes money on a promissory note is hardly in line for a free house. The ” free house” argument is deliberately designed to obfuscate this distinction in the hopes that the district judge will be so prejudiced by it, he or she will look no further to ascertain whether the deed is valid. To date, it’s been wildly successful.