Does The Defense of Homeowners in Foreclosure Border on The Unethical?
That’s not a question I need to ask myself, I know in my heart and deep within my professional soul, that defending foreclosures is not only ethical, it is the highest calling of my profession at this moment in our country’s history. I’m not just defending homeowners in foreclosure, I’m fighting to save my country, my courts and the Constitution of the United States of America.
The fact that this exact question was recently posed and published in the Huffington Post by retired federal judge H. Lee Sarokin only serves to illustrate just how dangerous these times we live in really are. (Original Post Here) I remember debating the reasons why this country gave murders and rapists the right to due process in high school and think that most people, even terribly unsophisticated people, understand that the right to due process is a bedrock of our country. The fact that a retired federal judge does not understand that the same due process protections that protect murders and rapists provide important protections to all of society vis a vis foreclosure defense is truly disturbing. The issues exposed in the defense of homeowners have exposed dangerous and systemic flaws in our legal and economic systems and the fault lines exposed represent very real challenges to the Constitutional rights of all Americans.
Reading between the lines, I suspect that the good retired judge who posed the question is one of the millions of Americans whose very existence is tied to examining his monthly stock and investment statements and that this perspective, rather than legal analysis, is at the heart of his question. The calculation from that limited and myopic perspective is simple. Value and balance up, life is good. Value and balance down, we’ve got problems. As the good judge recognizes, there are a myriad of reasons why homeowners find themselves in foreclosure (unemployment, economic unrest) and those factors, more than any issues related to foreclosure, pose the real threat to the economy and to our country’s overall well being.
I don’t have a retirement account and I don’t understand Wall Street or any of Wall Street’s charts and graphs and ratios and equations and statements and formulas. I read them. I examine them. I consider them but I don’t understand them. I am terribly, anxiously, increasingly afraid that the charts and graphs are as flawed, fraudulent and manipulated as the business practices of Wall Street that the defense of homeowners in foreclosure has exposed. I desperately hope that I’m wrong, but I fear that the investment accounts tied to this country’s mortgage market and investments are already worth far less than the charts and graphs and formulas say they are. I fear that large sectors of our economy operate like a Ponzi scheme. I am particularly convinced this is the case with the trillions of dollars that flow into mortgage servicers. To whom do millions of Americans mail or electronically transfer billions of dollars in monthly mortgage payments to each month? Where do these billions of dollars flow out to? Does any honest, verified, comprehensive, audited accounting exist? How much is skimmed off by the servicers? How much is shifted to affiliated insurance companies? How much goes offshore and to entities and interests whose ultimate goals and motives Americans do not share? And the questions directly related to our governments failed efforts to address this society changing crisis.
What are the perverse financial incentives involved that keep homeowners hurtling through foreclosure and prevent reasonable settlement or short sale offers from being accepted when these offers are objectively far superior than any other outcome the lender could hope to achieve? Where have the billions of dollars in federal money paid to servicers and banks gone? How much have the banks, the servicers, the foreclosure mills, the document mills made while everyday Americans wallow in the pit of despair, uncertainly and misery that is foreclosure. The banks and institutions that are driving this crisis made billions when the originated these loans (often under fraudulent circumstances). They took billions in the 2008 bailout orgy. They took additional billions in HAMP money that was supposed to provide relief to homeowners. But what relief do homeowners have to show for all these billions of dollars sloshing around? Precious little but generations of additional debt.
And the banks? They’ve got plenty. I have watched first hand in horror as Florida’s courts requisitioned nearly $10 million dollars of taxpayer money that was used to establish Kafka-esque Rocket Docket courtrooms where the express purpose was a speedy verdict in favor of the very banks and institutions that created the “technical” problems that are responsible for today’s court backlog. While we’re on the subject, it must always be noted that the vast majority of homeowner foreclosure cases are never defended by any attorney, much less a competent and experienced foreclosure defense attorney who can spot the real issues that cause these cases to grind to a halt. The fact that the vast majority of cases go undefended means that some obscene number of cases, perhaps 80 percent, go unchallenged. A post mortem examination of those undefended cases will reveal gross and systemic abuses the likes of which our court system is unprepared to address. Our foreclosure courtrooms and now our country’s record title system are crime scenes and there’s blood on the hands of the banks and institutions that are responsible for these crimes. Will there be any investigation or consequences for these crimes?
The robo signer controversy is a side show, a distraction. The robo signer controversy merely exposes much deeper and far more dangerous flaws in the financial and mortgage servicing industries. The question is not whether any robo signer or any signer for that matter does have or even could have personal knowledge. The question is why these robo signers and document mills even exist at all. If all these companies that were doing all this foreclosing actually owed, possessed, controlled, held or had the rights to own, hold, posess or control the mortgages they claim they do prior to foreclosing then why did none of them get around to actually producing the assignments, endorsements and real evidence of ownership years ago? When the arguments about ownership and holding and back dating assignments started being raised consistently months ago, why didn’t all these Plaintiffs start documenting the ownership of the mortgages they’re foreclosing on today months ago? Cut all these pesky defense arguments off before you even file the case. Get the documents required to foreclose prepared (fabricated) months before you file foreclosure rather than creating (fabricating) those documents during the course of the litigation. There are reasons why this still does not occur and we should not continue with foreclosures until we understand all of those reasons.
Keep in mind that the many significant issues raised by those who are defending foreclosure came because a handful of dedicated legal pioneers set out to challenge the sloppiness, greed and unrestrained arrogance of the banks. April Charney, James Kowalski, Tom Ice, Chip Parker. Those are just a handful of the dedicated consumer rights attorneys that struck out to challenge the banks, the foreclosure mills. Their pioneering work inspired legions of attorneys and activists that are standing up to fight for the rights of everyday Americans. As the battle to defend homeowners raged on, we’ve all come to realize that The Fourteenth Amendment right to Due Process has been eviscerated in the mad rush to grant more foreclosures to undeserving banks. Rules of Civil Procedure? We don’t need them. Rules of Evidence? Forget about them. Hundreds of years of case law? No place in this brave new world of foreclosure folly. The Fourth Amendment? Well, when Fannie and Freddie are the real parties in interest in more than half the mortgages being foreclosed, that means the foreclosure mills and foreclosure courtrooms have been commandeered to seize property from the taxpayer in order to render it to the federal government, a seizure all the more violative when those from whom the property was seized were not afforded basic due process protections. The First Amendment? Well, the only reason we’ve seen any real push back against the overpower of the banks and institutions is because our Free Press has contrasted the plight of the American people with the fraud, the abuses and the arrogant attacks being visited upon our courts by the banks and institutions. This freedom to share the details of the misdeeds that were committed and which are continuing to be committed throughout the foreclosure process is being attacked, with attorneys (like myself) and activists suffering threats of legal action and other sanctions for daring to share information about what the purveyors of the the financial evil have done. Their attacks will continue and we’ll all have to determine just how hard we’re all willing to fight to protect that most important right…the right to protest, the right to share the despair, the right shine the disinfecting light of free information on the financial cancer they’ve spread across the country. Are you willing to join in the fight or will you allow the banks and institutions to muzzle our Free Speech Rights?
It is not only ethical for attorneys to defend homeowners in foreclosure, it’s a lawyers highest ethical calling because the issues extend far beyond the homeowner in foreclosure and touch the cornerstone of our American experience….The United States Constitution.