Banks do not want to go to trial in mortgage foreclosure cases. Judges and the Wall Street Journal still do not get it.
Banks want to avoid trial because trial shines a light on the facts of a case. When you want to see what’s buried in the back yard you grab a shovel and dig. You lift the hood and check the engine. You peel the skin and look for bruises.
What do you find when you lift up the carpet? That is where the dirt is. A trial lifts the carpet and exposes all the dirt and banks do not want anyone looking at the dirty little mortgage securitization and accounting secrets, secrets that could be exposed during a trial. Banks want to win the foreclosure case by using documents and affidavits prepared by bank employees with fancy Vice-Presidential titles – newly hired employees with no prior banking experience now signing documents as the bank Vice-President.
These documents tell how one bank assigned a mortgage to another bank, or how someone affirmed the loan account balance as being accurate. And these documents are used by bank lawyers to convince judges there is no need for a full blown stand up and swear under oath testifying live body in the witness chair trial. No, banks use these robo-signed documents to summarily obtain judgment under various state rules of procedure that bypass the trial if the bank lawyer can convince a judge the evidence is undisputed and insurmountable.
Robo-signed documents say what need be said to avoid trial.
In Illinois the procedure is called a Motion For Summary Judgment and requires a party establish there is no genuine issue of material fact in dispute. The motion usually attaches assignments and affidavits that, in a perfectly honest world, tell the honest to goodness truth, but in robo-world, sweep the dirt under the rug in favor of Vice-Presidential oath swearing.
But why not have a trial? Banks want to avoid trial, because they stand to lose. In a trial the bank has to produce a witness, someone, anyone, to testify about the facts of the case. And that witness is subject to cross examination. And the bank has to satisfy the burden of proof that the facts are more likely in favor of the bank than not.
Yes the spotlight shines brightly on the facts in a trial. With the wrong set of facts, the bank could lose the ability to foreclose a mortgage. Oh there are additional costs associated with trials, time and expense for lawyers, but banks freely spend that time and money trying to prevent trials now. And banks do not send high priced attorneys into every former stagecoach stop that now has a court house. No, banks hire local yokel appearance attorneys to handle the paperwork. Hey, facts are facts, right? So, it shouldn’t take William Jennings Bryan to persuade a judge a debt is unpaid. No, an actual trial would not add all that much to the mix.
It is the legal principle called res judicata that banks fear. Once a party loses a trial on an issue, that party does not get a second chance to re-litigate that issue. So if a bank goes to trial and loses, res judicata prevents retrial. Case over, mortgage foreclosure over, finis. Banks do not want a res judicata trial decision stopping a foreclosure.
This October the Wall Street Journal learned that a couple of foreclosure defense lawyers shined the light on a bank document preparer, a Vice-President of swearing to this or that. The Vice-robot claimed to have signed as many as 10,000 documents without examining a file or account. This revelation led to Bank of America temporarily placing a moratorium on foreclosure cases. Soon, Ally’s Financial, PNC Financial and JPMorganChase & Co. joined the moratorium.
Hmmm, why would the nation’s largest mortgage banks flat out stop hundreds of thousands of foreclosure cases? Why would the nation’s State Attorneys General jointly investigate robo-signing? There must be a real dirty floor under that carpet. But, the Journal, focusing its ink on the delay and not on the go-forward, wrote several articles about the moratorium and the robo-signors and the homeowners affected by the moratorium, including one of my clients.
When a WSJ reporter asked me what I thought about the moratorium I said ” I do not want a moratorium on foreclosures. I want every case to go to trial, not to be summarily decided on a motion for judgment with phony affidavits. I want a trial where the Bank brings to Court a flesh and blood witness to testify under oath and be cross examined – someone who can be arrested and thrown in jail for perjury.” One would think a judge could clean up the mess left behind by robo-falsified document-signors, one would think. But not in Florida.
Florida foreclosure defense attorney Chip Parker wrote a scathing editorial criticizing Florida’s “Rocket Docket” of foreclosure cases where retired judges are called back to duty to clear the thousands of cases jamming Florida courts. Chip cites an article where Chief Judge A. C. Soud hopes to resolve 25 cases an hour.
Hmmm, do the math, that is 144 seconds per foreclosure case. It took Officer Obie way longer than that to convict Arlo “Kid” Guthrie of littering. Florida judges believe they can dispense foreclosure justice once every 2.4 minutes. You can’t boil grits in 2.4 minutes, not even instant grits. But you can get instant foreclosure in Florida because there is NO TRIAL.
Soon the moratorium will be lifted and banks will refile new cases using new documents that say the same thing, but signed by new Vice-Presidents who will not admit to Pinball Wizard signing, you know, that deaf dumb and blind kid thing. And there will be NO TRIAL. And that is how banks want it.