I have been informed in a “forensic audit” of the chain of title of my mortgage, or another source, that the terms of a Pooling and Servicing Agreement (PSA) has been violated related to the assignment of my mortgage. Can I challenge a pending foreclosure on this basis?

5 November 2012

Answer:  No, with the caveat that each case has unique facts that deserve independent evaluation.  This argument raises questions of standing and whether an assignment is void vs. voidable.  The overwhelming consensus from courts is that a mortgagor does not have standing to raise a violation of the PSA as grounds to invalidate an assignment, etc.  Butler v. Deutsche Bank,  2012 WL 3518560 *9 (D. Mass., Aug. 14, 2012); Juarez v. U.S. Bank Nat. Ass’n, Civil Action No. 11-10318-DJC, 2011 WL 5330465, at *4 (D. Mass. Nov. 4, 2011); In re Correia, 452 B.R. 319, 324 (1st Cir. BAP 2011) (per curiam); In re Almeida, 417 B.R. 140, 149 (Bankr. D. Mass. 2009); In re Samuels, 415 B.R. 8, 22 (Bankr. D. Mass. 2009); Cf. In re Lacey, Bankr. No. 10-19903-JNF, 2012 WL 2872050, at *17 (Bankr. D. Mass. July 12, 2012); In re Bailey, 468 B.R. 464, 473-76 (Bankr. D. Mass. 2012).  If an assignment complies with the applicable state laws, it is valid as to the mortgagor and any other third party. 

As indicated above, this argument, along with many other arguments raised by people trying to defend against a foreclosure, like the “known robo-signer” argument this author has commented on before, has a very poor track record with the courts.  This fact is typically not advertised by the various sources found on the Internet promoting these types of arguments.

There can be meritorious arguments to defend against a foreclosure, but a violation of the PSA is not typically one of them.  Be wary of those that seem be overconfident that one of these arguments seen on the Interest so often will be grounds for you to avoid foreclosure.  They may simply be telling you what you want to hear.

In the event that you are looking to defend against a foreclosure, please be mindful that it is a serious legal undertaking.  Do not be taken advantage of those touting a buzz-word argument you find on the Internet.  The best course of action is to obtain a legal opinion/assessment of whether you have grounds to defend against a foreclosure from an attorney that you believe genuinely has your best interests at heart.  Feel free to give us a call.

One or more of the assignments in the chain of title for my mortgage was signed by a “known robo-signer.” Can I challenge a pending foreclosure on this basis?

2 November 2012

Answer: Although each case has unique facts that deserve independent evaluation, probably not.  Although there has been much robo-signing in various contexts that has come to light in recent years, this does not necessarily translate into a winning argument to invalidate an assignment and a successful foreclosure defense.  The robo-signing argument is typically a loser.  The most recent example/case known to this author is Butler v. Deutsche Bank.  2012 WL 3518560 at *9 (D. Mass., Aug. 14, 2012).

 

You also have to ask yourself: what facts do you actually know about the signing of the assignment that you can in good faith allege in a court case?  (Keep in mind that allegations raised in a court proceeding must be made in good faith.)  Also, who are those that “know” the person is a robo-signer? 

Despite a consensus from courts, this argument and a strain of similar buzz-word type arguments appear to have been raised frequently in recent time and they continue not to be successful.  Based on the tone of recent decisions issued by judges that seem to be recognizing a pattern, it may get to the point that these types of arguments could be regarded as frivolous and sanctions against those that raise them may be issued. 

Frankly, if you are thinking of raising any type of “robo-signer” argument, the banks and their attorneys will likely regard it as a sign that you are unfamiliar with the actual results of raising these types of arguments. 

 

It is understood that you may see confident statements splashed all over the Internet concerning various arguments to avoid foreclosure.  And yes, there have been some watershed decisions that have caused drastic changes to the foreclosure process and in the law in this emerging “field” of foreclosure defense law in the past four years.  However, this does not mean everyone can claim a robo-signer was involved in the transfer of their mortgage and then avoid foreclosure.  All one needs to do is read Massachusetts Lawyers Weekly regularly to see how many of these popular, buzz-word type arguments actually play out in the courts.

Understand that the author handles foreclosure defense as part of an active legal practice and advocates zealously for his clients.  And there are, at times, arguably often, meritorious arguments based on good law to defense against a foreclosure.  However, it is professionally unethical (and personally and emotionally unhealthy) to write and speak too optimistically about arguments that are typically not promising, or borderline frivolous.  Please do not fall victim to these statements.  Rather, the best course of action is to obtain a legal opinion from an attorney that you believe genuinely has your best interests at heart.

In the event that you are looking to defend against a foreclosure, please be mindful that it is a serious legal undertaking.  In the large majority of cases it will entail the engaging of competent legal counsel and the pursuit of meritorious claims based on facts believed in good faith in order to be successful.  The author suggests a thorough consultation with a competent attorney that will provide a realistic assessment of your legal situation before embarking on foreclosure defense litigation in Massachusetts.