Social Apocalypse

State courts stubbornly refuse to abide by explicit ruling by U.S. Supreme Court in mortgage law, trampling borrower’s who did everything right

State courts stubbornly refuse to abide by explicit ruling by U.S. Supreme Court in mortgage law, trampling borrower’s who did everything right

PRESS RELEASE

By Theresa Baker

May 20, 2016

Woodland, WA -- In a ruling by the Washington State Court of Appeals on May 10, 2016, borrowers Todd and Theresa Baker were told that even though they were never in default on their mortgage, and did nothing wrong, their home of 22 years would be sold at auction because the court’s erroneous ruling was in the past, so it would stand.  The logic being that the court cannot risk causing disruption to the new buyers of the Baker’s home (who purchased the house at auction with full awareness of the pending litigation-lis pendens) because that “would be unfair”.

The lender, who the Baker’s maintain had no legal right to their home due to a lawfully rescinded promissory note, convinced a trial court in 2014 that the Baker’s had incorrectly rescinded their predatory mortgage (which was not in default) for violations of the Truth In Lending Act.  Following the decision of the Clark County Superior Court ruling on summary judgement that there were procedural errors in the Baker’s 2009 TILA Rescission, the Baker’s home was put into foreclosure.  

The appeals ruling: Download Denial-by-WCA

TILA Rescission

When borrowers sign on the dotted line for a new mortgage on their home, the United States Congress put in place laws that would serve to protect borrowers from unfair lending practices such as misstating fees and charges, or not clearly outlining the terms of a mortgage or providing required disclosures. This gave borrowers and lenders a level playing field and the reassurance that their transaction was protected by law to be as they were being told it was.

One of the more powerful laws is contained in the Truth In Lending Act: Mortgage Rescission ("TILA Rescission").  While most people can recall getting documents at a loan closing saying that they have a right to cancel the transaction within three days of signing if they choose, what many people do not know, is that this same law also states that in certain transactions (like mortgage refinances) your right to rescind is extended to three years if there are certain material defects and/or omissions.  It is the extended three year right of rescission that was recently addressed and clarified by the United States Supreme Court in January of 2015 because of a widely occurring problem of lower courts misinterpreting the law, making it nearly impossible to use by a borrower.  

It’s a harsh remedy for lenders

Lenders hate TILA Rescission (15 U.S. Code § 1635) It is a sort of “nuclear option” when a borrower discovers certain problems in their loan documents, the borrower can simply cancel their mortgage. Congress intended for the remedy to be harsh, as a deterrent to lenders because it is so easy for a lender to hide things in loan documents that are unfair or illegal. TILA Rescission was designed to be done non-judicially, or OUTSIDE of a courtroom.  Unfortunately, nothing is more judicial than TILA Rescission.

If a borrower has the elements required to rescind (and the Baker’s did), there are simply four steps, they go like this:

1. Borrower simply sends the lender a letter stating that they are rescinding their mortgage. (the Baker’s did this) The promissory note becomes VOID upon the sending of letter ab initio or "from the beginning".
2. Lender then has 20 days to remove their lien from the title of the borrower's home and cancel the deed of trust, and inform the borrower that this has been done.
3. The lender must refund to the borrower all funds exchanged in the transaction, including all interest paid to date and fees paid in connection with the loan. (the Baker’s lender DID NOT do this)
4. Only AFTER the lender has completed the above steps does the borrower then tender’s back to the lender all proceeds received from the lender. There is a logical reason that these steps occur in this order. The borrower cannot access financing to tender the proceeds of the loan if there is still a lien on it.

If the lender disagrees with the borrower's rescission claim, they have the right to file a motion for declaratory relief within 20 days to ask the court to examine the borrower's claim. The court can void the rescission claim if it is without merit.  

It is this extended right of rescission that the Baker’s turned to when they discovered egregious errors on their mortgage documents that caused them to be deceived on their own mortgage, and to have thousands of dollars taken. After trying for months to get the lender to fix the errors on their documents to no avail, they made the difficult decision to rescind their mortgage (which was not in default) in May of 2009. They prepared for the action of rescission carefully, consulting attorneys and local experts. They got approved for a new mortgage refinance to have ready, because they knew would need to tender back to the bank all funds they had received as part of their obligation in the rescission. What they didn’t prepare for was that the lender would not respond legally to their rescission.  Years later, after much collaboration with hundreds of people nationwide, they learned that ignoring a borrower’s rescission was not only common, it was standard practice by lenders.  Lenders are rewarded for not responding to TILA Rescissions as the Baker’s case bears out in textbook fashion.

Reality: TILA Rescission still is not what it was intended to be by Congress-Even post-Jesinoski

What followed their rescission is a long story, but it can be summed up easily: The Baker’s got a good attorney, spent lots of money, and proceeded to trudge through seven years of misery trying to access justice on what was actually a very simple case. What started out as trying to get a fraudulent, current mortgage straightened out has culminated in the Baker’s losing their home after 7 years of tortuous, expensive litigation. Their advice to anyone contemplating using TILA Rescission to hold the lender to their word? Don’t. It’s not worth it, and you will probably fail. Unless the courts start ruling according to the law, the remedy of TILA Rescission is NOT in fact available, they hold their case as an example of this. The courts will bend over backward to avoid ruling against the lender.

At last! Exonerated by the US Supreme Court

Less than two years after the trial court erroneously ruled that the Baker’s had improperly rescinded their mortgage, on January 23, 2015, with the Baker’s still in possession of their home and fighting to save it, there was a landmark unanimous ruling in the United States Supreme Court regarding the proper invocation of a TILA Mortgage Rescission in Jesinoski v. Bank of America. The ruling settled a circuit court split that was creating conflicting and erroneous rulings around the nation.  Lower courts were ad-libbing all kinds caveats to the facially simple and direct remedy to a fraudulent or defective mortgage. The US Supreme Court, in its ruling, settled all doubts about the act of invoking a TILA Rescission, and stated that there is no change in this law, it is now as it has always been, and no court has the discretion to change it. Unfortunately for the Baker's and most any other borrower who relied on this remedy, the Supremes did NOT address in detail the EFFECT of TILA Rescission.  Though it is spelled out in unambiguous language in USC1635(b), courts are still making up their own rules about it. Washington State courts especially.

The Baker’s rushed to bring this great news to their attorney, as the Jesinoski case upon which the Supreme Court ruled, was essentially identical to their own.  The very succinct ruling by Justice Antonin Scalia was written in terse language, and stated among other things, that the law was clear on it’s face, and meant what it said. No court had the discretion to interpret it in any other way.  Further, on the specific question, as in the Baker’s case, of whether or not a borrower had to also file a lawsuit within the 3 year statute to “validate” the rescission, the US Supreme Court firmly denied that this was required, and with regard to cases in which this was ruled in the past, Justice Scalia stated, “that was error.”

The ruling, in clear language, exonerated the Baker’s and proved without any doubt that they had rescinded exactly as they should have, meaning that their promissory note had become void on May 28, 2009, as the law said.  It follows that all transactions and court rulings that referenced the voided promissory note were void by operation of law. Finally, after tens of thousands of dollars in legal costs, unspeakable personal suffering and humiliation they would be able to start to recover.

Bakers file a Rule 60(b) motion from relief from judgement

Immediately, the Baker’s attorney filed a rule 60(b) motion for relief from judgement, asking the trial court to reverse their erroneous ruling, and allow the Baker’s to litigate the issues surrounding their rescission for the very first time. In circumstances where justice was not served by a ruling, a rule 60(b) motion gives the court the authority to overturn their ruling at their discretion in the interest of equity.  If a party demonstrates that a great wrong has been committed then a court abuses its discretion if it does not reverse.

The Baker’s were relieved that finally a court might hear the arguments on what had happened and could decide who really was the victim in their case. Up until now, the Baker’s had been denied even a trial because of the trial court’s broad rejection of all of their claims of injustice in a quick summary judgement ruling back in 2014, awarding thousands of dollars in attorney fees to the lender. If the trial court reversed, they could finally have their day in court.

Download Rule 60(b) Motion for Relief

The trial court's ruling

On March 9, 2015 the trial court, in a stark, one-sentence ruling, decided against the Baker’s stating that she would not reverse her ruling because “a change in the law is not an extraordinary circumstance” even though the Supreme Court was explicit that this was not a change in the law.  The Baker’s immediately filed an appeal alleging the trial court had abused her discretion, and that there was no change in the law, this was clearly articulated by Justice Scalia in the US Supreme Court's unanimous ruling in “Jesinoski”. It was the court that erred, not the Baker’s.  

Foreclosure trustee rushes to auction the Baker’s home of 22 years

Soon after the trial court ruled against the Baker’s, the foreclosing trustee, Northwest Trustee Services, rushed to auction their home, even though their case was on appeal. Northwest Trustee Services, though required by law to be a neutral referee in foreclosure actions, had been in a contentious battle with the Baker’s for almost 7 years now.  The Baker’s filed a “lis pendens” (notice of pending litigation) against the title of their home to announce to any potential buyer that the home was in litigation, warning them that the title would be affected. The Baker’s were convinced that, by rushing to auction their home before the appeals court heard the case, the trustee was attempting to manipulate the appeals court by creating an obstacle against ruling in their favor. Courts do not like their rulings to harm innocent third parties, like buyers of a home at a foreclosure auction.  

Baker’s lose on appeal

On May 10, 2016 the appellate court ruled against the Baker’s. The appellate court was asked to decide whether the trial court had abused its discretion when it refused to concede it’s error in 2014 and relieve the Baker’s from judgement.  The two weightier issues in this ruling were regarding “finality” and whether reversing would have “prospective application”. “Finality” addresses parties’ reliance on a court's ruling being final. To decide whether finality is affected, it is argued whether any parties will be unfairly injured by the court reversing themselves.  The Baker’s argued that since the trial court was deciding on an issue that if reversed, would affect no one, finality was not affected. At the time the trial court heard their case, the Baker’s were still in possession of their home (it had not been sold to an innocent third party) further, the lender was not even entitled to the home by operation of law, according to Justice Scalia in the US Supreme Court ruling.  The Baker’s were merely asking for the opportunity to go to court to litigate the issues.

The law also says that if sustaining the erroneous judgement had “prospective application” then the court should reverse.  Carrying out the result of the erroneous ruling even though it was no longer equitable is “prospective application”. The Baker’s argued that there was prospective application in that at the time of the trial court’s ruling the home was not scheduled to be sold, and losing their home was the logical end consequence of the erroneous decision.  When an appeals court analyzes whether or not a trial court abused their discretion, they are to examine the facts that were presented to the lower court. It would be counter-intuitive to consider facts that occurred AFTER the trial court ruled. Nonetheless, this is what happened.

The appeals court said that finality is affected and there was no prospective application because the house had since been sold, and that a third party would be affected and they would not disturb that.  The Baker’s were stunned that the tactics of the foreclosing trustee of selling their home after the trial court had ruled and during their appeal effectively caused them to lose their appeal case.  They didn’t lose on the merits of their case, but on the manufactured circumstances of a foreclosure trustee who is legally required to conduct a neutral process of divesting someone of their home when they defaulted on their obligations to their lender.  The Baker’s never defaulted on their obligations at any time.

Justice or "procedural game"?

When looking for a simple explanation for this loss, it can be summed up like this: There were procedural errors that caused the court to divert from the proper just outcome for the Bakers.  That means mistakes were made the way it was litigated. The Baker’s rescinded their mortgage properly, there was never any dispute about that. When a mortgage is properly rescinded, the law says that the note becomes void immediately. Nothing can "unvoid" it, not even a confused trial court judge. In this case, there was no default, there was no delinquency, there was simply a trial court judge that decided that it would be better to sustain her erroneous decision and resurrect a voided promissory note, than to concede that a gross injustice had occurred to this family who could not possibly have access to their right of rescission in the face of a ruling like this. This is the essence of the Jesinoski ruling that was left out.  Many experts have said that this will be the next phase of Jesinoski: Establishing the EFFECT of a TILA Rescission. Although the law is clear, the Baker's case exemplifies the reason this needs to be ruled upon by SCOTUS. Void is not voidable. It's void.

Not only have the Baker’s lost their home, their self respect and 7 years of their lives, they have expended about $100,000 in legal fees and costs, lost most of their possessions and the appeals court even awarded the trustee and the lender their attorneys’ fees.

The Baker’s future

It is unclear what the future holds for the Baker’s. Their faith in the justice system, though always strong, has been deeply shaken.  The costs of litigation are almost more than they can bear, and the personal cost on their lives and their health have been extreme.  Yet, they cannot accept, in such a simple, straight-forward case as theirs, that the courts cannot identify unfairness at it’s most obvious.  After all, that is the reason we have courts. Not to allow parties to prevail on some procedural technicality, but to serve justice. This is why judges are human beings.

The Baker’s will be continuing in their effort to access justice, because in the end, they hope that the truth of their case will be finally heard in a courtroom by a jury. They believe that allowing corruption to prevail will destroy our society, and every citizen should resist it to best of their ability. The alternative is unthinkable.

The Baker's respectfully ask you to share this information so that it might help others.
They would also like to thank the many, many people who have supported them through this horrific time in their lives and they thank God for their beautiful children and compassionate friends.

To the hardworking, skilled attorneys who believed in us and worked so hard and gave their advice, we are forever indebted.

For more information please contact:

Theresa Baker

190 Bozarth #468

Woodland, WA 98674

[email protected]

Briefs and more information can be found at:

http://www.SocialApocalypse.com

The Bakers are represented by David A. Leen and the Northwest Consumer Law Center in Seattle

Updated: WA State Appeals Court Overrules US SUPREME COURT On TILA Rescission!

The foreclosure trustees are out of control in Washington State, and there has been little effort to reign them in.

Recently, we sought relief from judgement on an erroneous ruling stating our TILA Rescission was "time barred" when it was not. The United States Supreme Court recently confirmed in "JESINOSKI v. COUNTRYWIDE" (Read it here) that our rescission was done exactly as it should have been and that means our promissory note became VOID upon rescission in May, 2009.  After 7 years of litigation and horrific suffering, we have finally been redeemed by the highest court in the land.  Most of time has spent fighting our most arduous opponent: foreclosure trustee, who continues to fight to discredit our TILA Rescission, even in the face of the SCOTUS ruling.  We filed a motion for relief from the erroneous judgement and were denied. We immediately appealed the obviously flawed ruling, and to our SHOCK, the trustee scheduled our home for sale at auction! DURING THE APPEAL! Our home was auctioned approximately 3 months AFTER we filed our appeal and we are now homeless.

 

In 2009, after extensive effort to reach an agreement with the corrupt mortgage broker (Paramount Equity Mortgage, who was suspended in Washington State for ONE YEAR for committing the same fraud in mortgage documents that they did in our documents) we had no alternative to access remedy other than to rescind our mortgage.  I have documented fraud from TWO state agencies confirming the garbage that is in my loan documents.  I did not take this decision lightly, it's a big deal to rescind your mortgage, it's expensive for the bank (or... it was DESIGNED to be, as a deterrent to fraud).  

So, after exhausting every avenue of help I could to get money stolen from us at closing returned (including hours on the phone fighting with one of the owner's of Paramount Equity Mortgage, Matt Dawson-who laughed at me and said there was nothing I could do to him-and he was right), and my window of opportunity closing, I rescinded my mortgage.  This was done with great care, with a lot of help from attorneys and other experts to make sure it was done correctly.  Little did I know, until January of 2015 (the "Jesinoski" ruling), there was almost no possibility for any homeowner to use TILA Rescission as congress intended due to so many "add-ons" and caveats by the various circuit courts, creating their own interpretation of this very simple, logical statute.  The banks saw to that as we were destined to find out over the next 7 years of unspeakable agony.

If there has been one consistency in our TILA Rescission case, it is the mind boggling ignorance of the Washington State courts to grasp the meaning of this very simple, straight-forward legal action: TILA Mortgage Rescission.  It is as if you have to dice it up into ever-tinier pieces and feed it to them like small children.  They simply refuse to get it.  Or is it that they refuse to rule against the "lender" and "trustee"? We must now ask ourselves this very troubling question. After 7 years of trying to access justice in our very text-book rescission case, it's becoming the only feasible answer.  Attorneys and experts around the country have commented on our case consistently: HOW can the court rule like that? Not one time in all of these years have we received criticism on our case.  NEVER. Only incredulity.

By way of example of the lack of subject matter familiarity the lower court had; (this is in the verbatim report) Judge Barbara Johnson, with a perplexed look on her face, actually asked our attorney in oral arguments, "Why would they want to rescind their mortgage? Don't they want to KEEP their home?" This SHOCKING display of ignorance of what she was ruling on caused us to know the outcome before the ruling was handed down. There was no possibility of prevailing in the face of such incompetence from someone who is supposed to know the law, or at least ATTEMPT to understand it. TILA Rescission absolutely never culminates in a borrower giving up their home. She obviously hadn't even read our case when she came to the bench. After this hearing, our home of more than 20 years, that we built ourselves and raised our children in, and were never in default on, was handed unceremoniously to a servicer who admitted in court had no legal authority to take it. For seven years we have been struggling to decode the law to these judges, and our most voracious defender of the "lender", who worked to discredit our rescission for 7 years? The FORECLOSING TRUSTEE.  Why would the trustee be so focused on this? There is a serious problem with foreclosure trustees in Washington State, and it's time to make it stop.

The unthinkable truth is starting to become unavoidable in Washington State: that they refuse to rule in favor of borrowers who are being unlawfully robbed of their homes. Borrower victories are extremely rare and sporadic in this state.  They will NOT rule according to the law by some behind-the-curtain mandate that forbids them from hurting the trustees and servicers who are systematically pocketing the assets of homeowners in a team effort, denying due process of law in a routine and cavalier manner.  We have doggedly re-approached the bench again and again to reiterate the indisputable truth that a wrong was committed here. Their response is to hand out a poorly-thought-out ruling, full of error and misapprehension, that addresses everything but the most obvious truth: We completed our rescission exactly according to the law, this was confirmed by the United States Supreme Court, and the court chose NOT to reverse an erroneous ruling (no reason given other than our case was not extraordinary), and our house would be sold at auction 3 months later in the face of our appeal.  

It is important to remember that our house wasn't even scheduled for sale when we appeared before the trial court to ask her to reverse her erroneous ruling.  All we were asking for was the opportunity to litigate the issues. No one could be harmed by allowing us to finally litigate the issues of our case (we had never even been allowed to do that either, by summary judgement). Not once has a court even heard our case, we have been dismissed by summary judgement by a judge with little to no subject matter familiarity by an erroneous precedent that occurred more than a YEAR AFTER I rescinded the mortgage. This is grossly inequitable.

Luckily for the "lender" the "trustee" (Northwest Trustee Services, by no surprise) fought voraciously against our rescission from the beginning, trying to convince the court that it was not valid.  

QUESTION: Why would the "trustee" be concerned with the validity of our TILA Rescission? It was stated on multiple briefs and letters that the "trustee" attorneys had nothing to do with "matters of origination" when they were trying to convince the court of their innocence in this case.  They made the lenders work easy in our case and wrote far more elaborate arguments against us than the "lender" did.  They repeatedly told the court that we "got in over our heads", "were Orwellian", "there must be SOME good reason why a Deputy Sheriff doesn't pay his mortgage", laying shame at our feet over and over again. Listening to them tell the court we were losers and deadbeats and dishonest was excruciating.  NONE of this was true. We NEVER defaulted on our mortgage. There is a name for this kind of behavior; it's called slander of character.  The "trustee" convinced the court that we were deadbeats, quote:"trying to get a free house" (this particular trustee loves to say that in court, and I have stacks of instances about this with other borrowers-WHY IN THE WORLD would a trustee's attorney even utter such words?!) and that "his clients rights were being violated".  What about the borrower's rights, which he is EQUALLY required to protect by Washington State law?  I have binders full of this vitriol.

Example of misaligned "trustees": After we lost our motion for relief from judgement in front of Clark County Superior Court, I became a pro se litigant so that I could expediently communicate with my opponents.  I was preparing to appeal the court's completely inadequate ruling, and reached out to the "trustee's" attorney who had been our attacker from the very beginning.  I appealed to him to consider removing himself from the lawsuit by concurring that in the face of the Supreme Courts' ruling, our rescission had always been proper, and in exchange, we would DROP HIM from our lawsuit.  After all, it is actually possible that a borrower is correct and the trustee made a mistake. I thought that was very generous considering the horror he had put us through.  Keep in mind, THIS IS THE FORECLOSURE "TRUSTEE'S" COUNSEL-not the "lender".  His response?  Incredibly: NO. He would continue to discredit our TILA Rescission.  Why would he do this? I had offered to exonerate him completely.  He had no need to defend his client further, I offered to release them. No, he wanted our house and he wanted me to suffer. Can there be any other explanation? I would love to hear it.  The "trustee" is supposed to be a neutral referee in non-judicial foreclosure, I can assure you they are far from that.

The opinion from the Washington State Court of Appeals Div II can be read CLICK HERE

NEW: Petition For Review to Washington Supreme Court: CLICK HERE

I can save you the time reading the 14 page opinion, which has all the appearances of being written by our opponents, the gist of it is this: Our TILA Rescission (which, in 2009 voided the promissory note ab initio by operation of law) is being ignored by the state court because they claim our attorney should have APPEALED the original motion for summary judgement because the foreclosure action was being brought by the wrong beneficiary in 2010... Got that?  It's eye-popping insanity. It's circular logic.  It's a dog chasing it's tail.  We didn't even argue the fact that the wrong beneficiary was taking our home, because the mortgage was RESCINDED! THERE CANNOT BE A BENEFICIARY. Why would we appeal an argument that was not in the case?! In our recent appeal, we introduced this inequity because it was additional evidence that a great inequity had been committed against us, and inequity was part of the requirement of satisfying our claim of manifest injustice. Instead, the court said that we should have appealed this fact (even though it was not argued, no relevant) in our original motion for summary judgement. It's just impossible to relay the extent of circular logic this is. It has no place in a high court like the court of appeals. 

If that is not enough, then ALL courts have a responsibility to rule SUA SPONTE when they can correct an injustice.  CLEARLY the requisites of a non-judicial foreclosure had not been met on at least ONE count: There was never a default. 

This is the story of a TILA Rescission that was executed perfectly, according to the law, rendering the promissory note null and void. The procedures we completed were confirmed correct by a unanimous supreme court of the United States, and STILL, the lower courts in Washington State say, sorry we made a mistake on ruling against you before, but we won't overturn it, because we already told the "servicer" (who acquired the voided note AFTER our rescission, a VOID transaction) they could take your house and they don't want to give up their windfall. Yes, that is exactly what happened.  

Consider this analogy: If this were criminal law, and DNA evidence exonerated an innocent man serving a life sentence, he would be set free. The court would not say, "Well, you've been here for so long, and we hate to overturn ourselves so you will stay in prison so people will trust the judicial system." This is the finality argument that has lost us this case.  It's inconceivable.

Please take a moment and share this story (there are links below). We cannot silently let these kinds of rulings go unquestioned.  I am sorry our courts are so over-worked. I am sorry they have long dockets. But you know what? Maybe they should examine why there are so many home owners in court? Perhaps they should think about why the "trustees" litigation attorney is nearly dropping from exhaustion and appearing in court ALL THE TIME with the same claims-"these people are trying to get a FREE HOUSE!?" He chants this all the time in court. I have yet to meet someone losing their home who is trying to get a "free house". It's abhorrent, and in my opinion, slander.  

 

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 You can listen to a lively discussion about our case on the Foreclosure Hour national radio show hosted by well known, experienced attorney Gary Victor Dubin who participated in the Jesinoski decision : 

Foreclosure Workshop #13:
Baker v. Northwest Trustee Services: A Case Study in How To Retroactively Reverse a Foreclosure Judgment Based on a Subsequent Change in Governing Case Law

As the case law in several states appears to becoming increasingly friendlier to homeowners in foreclosure proceedings, old case precedents will gradually be overturned or substantially revised.

That raises the question how borrowers who have already been foreclosed on can use such supervening court decisions to reopen their closed foreclosure cases.

The Opinion in Baker v. Northwest Trustee Services, decided May 10, 2016 by the Washington State Court of Appeals, provides, in the context of a TILA rescission claim post-Jesinoski, a good lesson for homeowners on often completely unknown or commonly misunderstood options how to and how not to use a change in the law to retroactively vacate an earlier foreclosure judgment.

You can listen online here: The Foreclosure Hour

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 So stay tuned because it is our belief that the upper courts are going to have a much stronger understanding of what it means when the Supreme Court of The United States UNANIMOUSLY interprets law, it is to be heeded.  The law requires lower courts to align themselves with the Supreme Court if at all possible. This is not happening.

For those of you who have been by our side from the beginning, those of you who have shared your journey and your expertise, you know who you are, we love you all, and thank you with all of our heart. The outpouring of support at this horrendous ruling has been humbling and has kept us breathing in and out when it got a little difficult at times. We have lost everything we own, and are living in a trailer, but we will not stop because this is not going to be tolerated. We want to believe in our justice system. Our entire lives are dedicated to the equity of our judicial system, and we doggedly, steadfastly continue to pursue justice.  

AMICUS CURIAE will be requested as we move forward. Please help us reach these "busy courts" and share our story (because it is the story of many) and encourage support from organizations and agencies on the merits. These terrible rulings are hurting case law and legitimately wronged borrowers around the country.

I have never been "anti-foreclosure". There are often times when the rights of the lenders must be protected.  I am anti-wrongful foreclosure.  I do not march in front of banks, because this is not the banks fault: They have been PERMITTED to do what they do, and that will always be the case, as it is with all crime. If you allow criminals to commit crime then they will. No big epiphany there. If you don't issue speeding tickets, people will speed. I blame regulators and law enforcement and the foreclosure trustees for NOT DISTINGUISHING between legitimate borrower default and LENDER/TRUSTEE perpetuated default.  In our case, there wasn't even a default and we have lost our home. 

Until the trustees stop being compensated in the manner they are (paid for a completed foreclosure as expediently as possible) this WILL NOT CHANGE. Do trustees get paid the same if the foreclosure IS NOT completed? I think you should find out. Imagine if we allowed judges to own bail bonds companies?? How many times would the accused go to jail I wonder?

I propose that foreclosure trustees be public servants.  Yes, I do.

Foreclosure should not be able to be initiated, facilitated, perpetuated or adjudicated by ANY entity who PROFITS from it. Period. 

If you want to do something to help in this fight you can in about two seconds;

Please click one of these links below and share this story. THANK YOU!

@AGOWA: Why Did You Hire 2 Foreclosure Mill Attorneys As Head Of Consumer Protection Division?

KingCast and Mortgage Movies Interview Request with WA AG Ferguson on Foreclosure Mill Attorneys and Office Integrity.

"As a former Assistant Attorney General and escrow attorney I can safely say that America's legal compass dangles in a very precipitous state when big money interests have co-opted the very institution that our citizens rely on for consumer protection. Are the foxes watching the henhouse in the Nation's Capitol and in Washington State? Some have even argued that it is tantamount to a pedophile watching a daycare center.  " ~Christopher King

Read more on this disturbing development in Washington State: CLICK HERE! 

The Washington Attorney General has a long way to go to instill confidence that Consumers have any chance whatsoever in prevailing on legitimate claims of abuse. Let's hope he welcomes KingCast and has answers for us.

 

Foreclosure Hit Men: Trustees Are The Trestle For The Money Train Delivering The Middle Class To The Mega Rich

Any good television western will give you the solution: Blow up the trestle.

Full disclosure here: Foreclosure is a necessary part of the housing market.  The laws we have are more than adequate to assure that all parties' are protected from financial loss and default. Enforcement is the problem.  It has always been the problem. The top cop has not been on the job, I am sorry to say. This problem lies at the feet of your Attorney General.

The avalanche of less-than-legal foreclosure actions could never have happened without the "Foreclosure Hit Men": foreclosure mills and their "affiliated" trustees.  These guys have built a foreclosure machine that grinds through thousands of questionable "defaults" and the titles to these homes are delivered expediently to the coffers of "servicers" and banks that do not even have a legal right to have them.  For many of these foreclosure mills, their principles own every company in the chain of "consumer protection requirement procedures" that have to occur, assuring that they control-and PROFIT FROM-that auction.  A conflict of interest by someone who, according to the Washington Deed of Trust Act, is supposed to be impartial to both the lender and the borrower and assure that a non-judicial foreclosure proceeds according to the law?  In the EXTREME.

It's undisputed that there are millions of broken chains of title that allegedly connect borrower's debts to their homes.  The reason that these broken chains exist is beyond the scope of this blog and has been exposed ad-nauseum in grave detail. The bottom line though, as in most things is that these broken title chains exist for only three reasons:
1. Corruption
2. Greed
3. Opportunity

If the "greedy" were not aided by "corruption" then they would not have succeeded, but more importantly, they have opportunity by lack of law enforcement. They are dependent on each other, and are self-sustaining.  It is a three-legged stool. You only need to get rid of one leg: opportunity.

The solution: Blow up the train trestle with some law enforcement.  

Every Friday, middle class wealth is unceremoniously transferred from the American Citizen, to the Corrupt and Greedy.  And what is the mechanism that delivers all of this wealth into the waiting laps of the greedy? That great "train trestle" over which it all must pass to arrive at it's final destination: Foreclosure Mills.  The greedy persons solution to that pesky problem of "due process of law".

The Foreclosure mills are the interim pilot that navigates questionable foreclosures over that "due process of law" minefield, because they know the way and they "know people". They have built an industry of "specialized services" that creditors are completely dependent on to cash in on their distressed-borrower-lottery-ticket;

They own the Trustee
They own the Trustee law firm
They own the process server
They own the title company
They own the property preservation company
They own the news publication company

It's despicable... But it is human nature, because there is opportunity. It is ridiculous to expect anything else. If people can, they will.

States Attorney's General hold in their hands the golden key to put the home ownership train back on the track. While they certainly cannot end all wrongful foreclosure actions, they can lift the curtain of secrecy behind which these shady firms seem to enjoy complete immunity.  There is simply no reason for these firms to fear regulation, because it is so infrequent that they are held accountable for even egregious misconduct.  It is rare that a borrower has the financial might to stand up to them, and if they do, they don't have the stomach for it.

It's time to close the door on corruption. 

The housing market will never recover until people feel safe again that they will not be mined for cash at the next turn in the economy, which is exactly what happened in 2008.  I have lost count of how many people have told me they will NEVER finance a home again. I don't blame them, I know I won't, not from a large bank. A local credit union, maybe.

What can you do? Educate yourself. SHARE this blog post and other blog posts, get the word OUT. Do not elect corrupt politicians and hold the elected officials accountable.  Do not sit silently on your hands and do nothing, and most of all: Do not assume that the law is being obeyed, MAKE SURE.  Be a good American and demand justice.

Sporadic Justice: Washington State TILA Rescission Case Exemplifies Hopelessness, Inconsistency of Toothless Consumer Protection Laws

(Links to download the briefs for this upcoming case in Washington State Court of Appeals, Div II. follow )

Consistency in application of the law would go a long way to bring equity and justice into what is left of the expectation of "consumer protections".  When a consumer is ripped off, they are encouraged to turn to consumer protection laws to access justice.  This is a hit-and-miss proposition, unfortunately.

The thrust of this case is an appeal of denial of a Motion for Relief from Judgement under Rule 60(b)(...) in Clark County Superior Court under Judge Barbara Johnson immediately following the UNANIMOUS ruling by the United States Supreme Court (USSC) in Jesinoski v. Countrywide which confirmed in strong language that TILA Rescission is effected upon the borrower's notice of his desire to rescind, and the mortgage NOTE becomes automatically VOID upon notice to the creditor.  Applying the explicit instructions of Justice Scalia, who said that the TILA means exactly what it says: That the note and mortgage become void automatically upon the borrower's notification to his lender of his intention to rescind by operation of law, the Bakers should still have a home, but they do not.

 

If you are unfamiliar with this landmark case, you can read it here: Jesinoski v. Countrywide

This case is extraordinary because the material facts of the Baker's case are identical to the Supreme Court case, and yet their home has been taken from them, though they were never in default on their mortgage.

 

The Baker's properly rescinded their mortgage in 2009, which was not in default, and their notice of rescission was ignored and their house was subsequently foreclosed upon in June 2015, in the face of this pending appeal.

 

The principle matter in this case is that the USSC, in January of 2015 mandated that the TILA never required a borrower to sue the creditor for ignoring the notice of rescission in order for the note to become void by operation of law. They further declared that TILA is unambiguous on it's face, and because of this, NO court has the discretion to interpret it.  This means that all transfers and court rulings on the material issues of this case are VOID because the court was ruling on VOID MATERIAL FACTS AND DOCUMENTS and the trial court should have vacated the ruling.

 

The Baker's TILA rescission was done properly, exactly as specified in the TILA, invoked for egregious misrepresentation of finance charges at loan closing by Paramount Equity Mortgage that they discovered and for which they were seeking redress.  When the lender refused to correct the errors, the Baker's exercised the legal right of TILA Rescission as a last result.  Prior to the rescission, they obtained pre-approval of a new mortgage to tender the proceeds of the rescinded mortgage as outlined in the TILA. 

 

The creditor ignored their rescission and then SOLD the (now voided) promissory note to another lender immediately after the rescission.  the new "creditor" repeatedly told the Bakers that their TILA Rescission was nothing to do with them, which of course, was a blatant untruth.

 

***There could not be a transfer of a voided note!***  

 

Nonetheless, the new "creditor" proceeded to foreclose on their home after months of litigation. What followed was 6 years of tortuous, costly litigation and humiliation for the Bakers, culminating in the loss of their home of more than 20 years.  TILA Rescission was designed specifically by Congress to be conducted OUTSIDE of judicial supervision, yet nothing could be more judicial than to try and rescind a mortgage, because lenders NEVER complied with them.  It was much more profitable to ignore the rescission, they were rewarded for doing so.

 

The Baker's continue to fight this gross miscarriage of justice. Their case exemplifies that there is NO WAY for borrower's to do what the law outlines and succeed. It is doubly tragic that even when the borrower follows the letter of the law precisely, it is met with incompetence at the bench.  Sadly, most trial court judges have very limited understanding of this important consumer protection law, and the rulings bear this out.  Example: In the Baker's motion hearing for relief, Judge Barbara Johnson asked the Baker's counsel, "Why would the Baker's want to rescind their mortgage? Don't they want to keep their home?" If a person were to construct a more succinct illustration of why it is impossible to do anything right as a consumer, this should illuminate the problem.  Not only was the judge completely uninformed of the mechanism of TILA Rescission, she was clearly attempting to rule NOT according to the law, but to effect a "desired outcome".  Unfazed by the United States Supreme Court's explicit unanimous ruling outlining that she had ruled erroneously, she ordered the foreclosure to proceed, and the Baker's home was sold at auction.

 

This is happening every day, and consumers are being mowed over by this amateur justice, and losing their homes.

 

Let's hope that the Court of Appeals looks carefully at the INTENTIONS of all parties involved and at the extent to which the "Trustee" (Northwest Trustee Services) in this case endeavored to aid the creditor in discrediting the Baker's TILA Rescission (for which they stress has nothing to do with them) and portrayed them repeatedly as "deadbeats" when in fact, they were never in default on their mortgage.  The Court record shows that in oral arguments NWTS attorney Joshua Schaer emphasized with great emotion, that his client should prevail because, among other things, "the Baker's haven't made a house payment in over 3 years!"  and, incredibly, "...the Baker's got in over their heads!"  Statements such as these can only be characterized as an attempt to slander the reputation of the borrower to the Court as a "slacker who doesn't pay their bills".  As if they weren't paying huge court bond and attorney fees to gain access to justice.  

 

Even the trustee displays incompetence about what TILA Rescission is: He repeatedly declared that the Baker's attempts to "get a free house" were going to fail, and made many other comments on record in this regard.  Educated people know that Rescission does NOT offer a free house to anyone, rather it attempts to restore the parties to the position they were in before the mortgage was established, and that includes the borrower tendering back the funds borrowed.  The Baker's were prepared and able to do this, but this fact is always downplayed in court.  You see, that would taint the whole "deadbeat debtor" thing they were pushing.

 

It is important to emphasize that these comments are from the "impartial TRUSTEE", not the "Creditor".  Do these sound like "impartial" opinions to you?  Do you think it's possible that the "Trustee" gave any credence to the Baker's pleas to the ONLY examiner of the proper execution of the foreclosure to alert him to the defects in the proceeding?  

 

It is of note that the attorney for the alleged "Creditor" and the attorney for the "TRUSTEE" were the same guy: Joshua Schaer.  Later, he resigned as the bank attorney, presumably because the Baker's attorney pointed out that it was unlikely that the "Trustee" was capable of being "impartial" (as the law dictates) if the same attorney represented BOTH the bank and the trustee! Unfortunately, in Washington State, this is business as usual. 

 

Here are the appellate briefs:

 

Download Brief of Appellant 2015-07-22

Download Brief of Respondent 2015-08-18

Download Brief of Respondent PennyMac

Download Baker Reply 2015-09-18

 

 

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