Lender Jammed In Foreclosure Attempt; Failed To Prove Legal Standing, Says Colorado Judge

In Douglas County, Colorado, the Douglas County News Press reports on local couple Louis and Margaret Sadler, who are assiting their daughter fight a foreclosure action that threatens the loss of her home.

• The [...] couple, who hired Castle Rock attorney Michael Robinson to handle the routine foreclosure, saw a Douglas County district court judge on June 19 put a stop to the foreclosure sale when the lender could not prove it was a party of interest in the case.

• The lender's failure to prove its interest is part of an industry practice Robinson says could impact victims of foreclosure across the state. "This is a case of first impression in Colorado," Robinson said. "This is going to wake people up and make them realize 'I don't have to take this, I can fight back.'" The fight began when Robinson embarked on his research in the time he had to respond to the original foreclosure action. His search of the publicly-filed documents disclosed something was amiss.

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• During the June 19 trial, Lorainna Diaz, the chief of mortgage litigation for Countrywide Home Loans, was unable to identify the person whose stamped signature endorsed the note or when the note was endorsed to the Bank of New York. Diaz testified by phone from the company's Fort Worth, Texas, office but her efforts did not pay off for the Bank of New York. "I don't find [Diaz] to be credible at all," said Douglas County district court Judge Vincent White when he found in Sadler's favor. "She couldn't establish when [the transfer] occurred or that it was legitimate. I would expect someone in her position to be able to say when it was transferred and how [Sadler] was noticed."

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• For those who find themselves in similar situations in Colorado, White's decision could open the door to great possibilities, Robinson said. "So far the problem has been that everybody surrenders [in the face of foreclosure]," Robinson said. "The message here is that people aren't going to roll over, they're going to fight."

• Robinson and his co-counsel hope others join the fight and have built a Web site, www.blockcoloradoforeclosure.com, to provide a resource for those facing foreclosure in Colorado.

In dismissing the court order authorizing the foreclosure sale, the judge indicated that the lender can re-file the case if they want, presumably if it is able to get its paperwork straight.

For the whole story, see The foreclosure fight is on.

For other posts that reference the failure of some mortgage lenders and their attorneys to file the required loan documents when starting foreclosures, Go Here, Go Here, and Go Here.