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My point on the Brooklyn Bridge is that it's not an abstraction. As a concrete matter, when you start trying use real facts, it falls apart. "The note just goes to the enforceability of the debt, not the ability to grab to the collateral." I don't like the word "just." The note also allows enforcement of the security, and is the central premise of the "mortgage follows the note" doctrine. Are the briefs available on-line, other than WL or Lexis? My interest in this case was high, but now that I've been told the price tag, it's a little higher. Do ejectment judgments have special appeal rules?
Foreclosure timelines in different states have different markers. Here, equity of redemption is called either cure of default or right to reinstate. The right of redemption is generally six months (12 months for ag, and 12 if the amount owing is less than 2/3 the original principle). In any case, if the redemption period is post-sale and statutory, then can it be called equity of redemption? I don't think it can. This gets to one main reason counsel should be retained early. Way too many people lack basic information about what to expect and what the time lines are. Worse, they think foreclosure is uniform state -to-state and they read blogs that talk about rules in Florida that are not accurate for their state. Then, they show up at the attorney's office when the property has been posted for eviction.
"Unlike an action on a note, which is an action at law, mortgage foreclosure is an equitable action—it is the cutting off the borrower’s equity of redemption." What authority do you have for that? Foreclosure by advertisement, as far as I know, is ALWAYS a statutory "procedure." That's a main reason why it passes Due Process analysis. While repo (after eviction) is an like an equitable remedy, it's also a statutory remedy in this context. It's an interesting point, but I'd still like to see authority. "The idea that a thief could enforce a mortgage is laughable." The thief would also have to have a prior assignment in its favor in a typical non-judicial state (whether recorded - like in MN - or merely effective, like MA). That said, a forged assignment would be void. Or would it? That gets into differences in forgeries. I really don't know under Ibanez, for example, if the court found that Jane signed for her subordinate Fred, but ABC Mortgage still intended to assign to Vampire Squid Trust, and the document was otherwise fine for proving that intent, and was somehow ratified, that Ibanez wouldn't have come out in favor of USBank. This is one danger of over-reading Ibanez.
Ownership of the note was irrelevant. Enforcement rights were found in USBank, and Ms. Congress's own expert witness agreed that a holder of the note could foreclose. The judge found that USBank was a holder. Where is the error?
"The PSA says The Bank of New York is the owner of the note and mortgage and that in no way shape or form should the servicer claim ownership in the note or mortgage." Read the opinion. USBank didn't need to be an "owner" as long as it had enforcement rights. Ms. Congress's own witness stated that the "holder" could foreclose, and that the rules were controlled by Alabama law. Judge Vowell found that USBank was a "holder" entitled to enforcement, regardless of who the "owner" was. What is the error here? There was no lost note here. Not all cases are the same.
The problem is that foreclosures by advertisement have been held to have adequate due process protection. Due process does not require full-blown civil court process. I, for one, would not object to that not being the case, but there is a lot of precedent that needs to be overruled to get there. As for Spence's comment, I have proposed to clients to just that. At this point, I think I could make a good faith case that a quiet title is necessary to ensure an effective reconveyance, that enough doubt has been sewn into the records that a borrower could ask for a declaratory judgment setting the standard for reconveyance. Taking the loan default facts off the table could change the dynamic. Hard sell, though. In addition, the defendant would have a chance to cure.
Given that this case largely deals with assigning the burden of proof, much of the discussion of this case has been ironic (and a bit distasteful). What is the point of saying this case has no precential value? It certainly has some, and I would say more than most district court decisions. That said, it's not a mandatory and binding precedent. (It does seem set up for an appeal). Just a little digging shows: "Judge Vowell has been a circuit judge since January, 1995 and is currently the presiding judge in Jefferson County. Prior to his service on the Court, Judge Vowell practiced law with Beddow, Embry, & Beddow (1961 - 1987) and Vowell & Meelheim (1987 - 1994). Judge Vowell, a graduate of Auburn University (B.A. - 1959) and the University of Virginia (J.D. - 1961), is active in the American Bar Association, the American Bar Institute, the Alabama Law Institute, the American Judicature Society, and the Birmingham Inn of Court." It is ironic that there is the implication that he's some hayseed. I'm not attesting to his "brilliance," but I doubt he's a dummy, either, and his CV creates a presumption in my mind that he's probably a pretty competent and well-regarded judge, elected by peers to be the presiding judge in a large circuit, at least without further evidence to the contrary. Yes, obviously some are arguing the evidence is contained in the opinion itself, with which I non-concur. As I said above, an appeals court will probably ultimately decide whether this template is good law. One reference to "My Cousin Vinnie" being set in Alabama was uncalled for, IMO. First, Vinnie, the New Yorker, was not a gifted lawyer, yet even he could attain competence with some help from the local judge. Second, the system worked for Vinnie's cousin. Throwing this out offhand as a slur was really just ham-handed redneck-baiting, and not really apropos anyway. The merits of the opinion should stand or fall on their own. Judge Vowell's opinion is not binding, but it probably does represent the template for these cases for the circuit around Birmingham and carries some weight about how the top judge thinks a likely commonly-asserted argument ought to be treated in an eviction proceeding. The opinion addresses what, IMO, is the weakness of the "securitization-as-fraud" constellation of claims. It's the kind of strategy where everything (or almost everything) has to go right for it to work at all. Lost in the big picture is the court differentiating ownership of the note from ability to enforce the note, and once it finds enforceability in USBank, the rest is mostly wind-up. Focusing on ownership to the exclsuion of enforcement rights was a pretty big hole in the argument. There's only one way to win, and a lot of ways to lose for Ms. Congress. Eviction hearings/trials rarely afford a defendant a chance to make claims denying claims of title in the plaintiff. The two jurisdiction I've defended in do not allow broad affirmative defenses. They are enumerated and/or statutorily authorized. Going outside of those is very difficult. So, at the very least, the Birmingham circuit is more open than others. The Brooklyn Bridge analogy does not work, or maybe it does, but in the opposite way you intend. Apply it and you will see what I mean. Sheriff's Deed holder of Brooklyn Bridge seeks to evict ... whom exactly? That's just the first problem. Although the argument was treated as an affirmative defense, I think the case would surely apply to quiet title cases brought by a homeowner. In either situation, the homeowner has the burden of proof of proving something. First, because USBank has a record interest in the Sheriff's deed, it has to be made a party. This is what gives it standing. This is why the arguments denying standing to trustees ring hollow to me. You can't make a claim against someone and then argue that they don't have standing. This is not to say that a party claiming enforecment rights ought to automatically have standing in a Motion for Relief from Stay, however. The nature of a typical quiet title case is to prove that a specific interest is invalid, void, discharged, or otherwise defeased (as in a lost deed case where a completed conveyance to the Plaintiff is requested for relief). cf. Torrens Registration, where the goal is to affirmatively vest title in someone or something, free of broad spectrums of adverse claims, specifically preserving other claims supported by record interests that have not been adequately noticed and proven void, invalid, discharged or otherwise defeased. To get behind the Sheriff's deed, Ms. Congress needed to prove that USBank didn't have the right to enforce the note, and thus foreclose. While there was lot of smoke here, where exactly is any evidence cited that USBank's claim that it was so entitled actually contradicted? The best and possibly only ways to do this are 1) to allege and prove an alternative interest - that someone else has enforcement power, or 2) that nobody has enforcement power. IMO, the court properly called BS on a party claiming enforcement rights having to prove perfect documentation. At the very least, the party alleging the defect needs to prove that those defects are so significant that enforcement rights don't exist in the party claiming them, and lie elsewhere, or not at all, all the while not getting an unjust enrichment from that claim. Nonetheless, the court still reviewed the evidence and found, essentially, that USBank had enforcement rights, and more importantly, by implication, that it was less likely that USBank didn't have the rights. I just don't see that as that as "clearly erroneous." As for Paul Jackson, I'm pretty sure that I have read articles where he claims not to be a lawyer. I don't think he is. I read him, but I don't put much stock in what he says about a case like this. But it's also difficult to find timely analysis from anybody without an ax to grind who also knows what they're talking about.
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Mar 7, 2011