Homeowners In Non-Judicial States Face Tough Battle Fighting Foreclosures Tainted By Rogue Robosigning Trustees Conducting Public Sales

The following excerpt from a recent story in The Huffington Post highlights the difficulty faced by homeowners in non-judicial foreclosure states to fight back against foreclosures tainted by rogue robosigners:

• Notice of Default Robo-Signing. About half the states are "nonjudicial states" (including California, Nevada, and Arizona -- important states so far as the foreclosure crisis goes). As Kate Berry writing for the American Banker argues, the foreclosure process in these states begins with a formal "notice of default" (NOD) letter sent to the delinquent homeowner; this is followed up by a notice published in a local newspaper.(1)

• The NOD is supposed to be signed by an agent of the "party of interest"--the company with legal standing to foreclosed. By signing the letter, that agent certifies that she has reviewed the relevant documents to determine, most importantly, that the homeowner had defaulted on payments and that the company for which she is acting as agent really does have standing to foreclose. But in practice, these letters are Robo-signed by people who never look at documents. They do not even seem to know for whom they are acting as agent!

• For example, in the Nevada case studied by Berry, Stanley Silva (a title officer at a title firm) gave a deposition asserting that he never reviewed documents before signing NOD letters. Further, he said he was acting "on behalf of Ticor Title of Nevada, who is agent for LPS title, who is agent for National Default Servicing" who is "apparently" agent for Fidelity National, which is "apparently" a servicer for Wilshire, which acted as agent for Wells Fargo, which claimed to have standing to foreclose!

• Now that is a nice "daisy chain" that successfully hides the party of interest from the homeowner trying to avoid foreclosure! Lawyer Walter Hackett, [with Inland Counties Legal Services, in San Bernardino, Calif.,](2) who is handling a number of such cases, says "A huge percentage of notices of default and notices of trustee sales are legally questionable and probably void."

• Since foreclosures in these nonjudicial states do not have to go through the courts, it is probable that abuses are common -- and hard to expose because homeowners have to file a lawsuit to get to a judge. Heck, the homeowner would need a sleuth better than Sherlock Holmes to find out who holds the interest in the mortgage.

Source: Requiem for MERS (and the Banks That Created the Frankenstein Monster).

(1) See American Banker: New Point of Foreclosure Contention: Default Notice.

(2) Inland Counties Legal Services provides free legal assistance for eligible low-income clients in case priority areas adopted by the firm's Boards of Directors.