Mortgage Servicing Fraud
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ka

The Court of Appeals for Kentucky released an opinion today in the case of Miller v. Republic Bank and Trust Company:

 

http://opinions.kycourts.net/coa/2010-CA-001625.pdf

 

This decision is of no great significance to foreclosure defense either nationally or even in Kentucky.  The decision actually relates only to whether a purchaser at a foreclosure sale was entitled to the return of an earnest money down payment when the sale after auction failed to close due to a lien issue.

 

But in reading the decision, I noted within Footnote 1 on page 1 mention of an issue that I have seen present recurring problems for pro se litigants.  I recall that it was the subject of a prior post by Mr. Roper.  Perhaps someone can locate that post.

 

The footnote reads:

"We note that both of the Millers signed the notice of appeal and the prehearing statement.  However, only Kimberly Miller signed the briefs that were filed.  As a pro se litigant, Ms. Miller cannot represent anyone other than herself; therefore, the briefs she filed only apply to her."

On a half dozen occasions, I have seen pleadings and MSJ responses by participants at this Forum where one borrower-defendant who is actively engaged in the case has prepared and filed a document signed only by one of two or more defendants.

 

When one defendant who is not an attorney prepares and files an answer or other response austensibly on behalf of other defendants without those defendants actually joining in the response by either (a) signing the answer or response or (b) filing their own signed and similar (or identical response), the other parties very often can be found to be in default.

 

That is precisely what the footnote in Miller indicates here.  In Miller, it didn't really matter.  The Kentucky COA considered and rejected Mrs. Miller's appeal.  But had Mrs. Miller actually prevailed, Mr. Miller still would have lost, since he didn't either file a brief or sign the brief filed by Mrs. Miller.

 

*

 

There are circumstances where it is in the interest of co-defendants to sign documents together.  There are also instances where it is better for each co-defendant to answer or file separately.  But it is NEVER acceptable for one non-attorney defendant to prepare and file an answer on behalf of another defendant.

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Steve Anderson
True, True, but let's look at an issue that never gets discussed much but what must come up numerous times in foreclosure proceedings. There are usually other defendants on the summons and complaint to cover the plaintiff's plump derriere, excuse my visual, but you have to have a nonsensical humor sometimes.

I have to ask, how do you include all these other defendants if you are expending the major portion of your energy defending your own hide, haha, still humorizing. In other words, or for example, on my summons and complaint, my nephews and niece were named. I have never heard anything about their input or defense since the proceeding started. So, how do I find out about their role, without getting into a legal stew. See, there must be more cooperaton and consideraton between the parties involved in a civil suit, as there can never be settlement or resolution without some sort or agreement to the arguments. Just my defendant's perspective, SA
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ka

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I have never heard anything about their input or defense since the proceeding started. So, how do I find out about their role, without getting into a legal stew.

 

Steve:

 

There is really nothing humorous about this at all.  Rather, I find your response to be both alarming and even pathetic!  And you really seem NOT to be either understanding or benefiting from the thoughtful posts of Mr. Roper, t, Bill, George, John, myself and others.

 

They have explained that when someone fails to answer, that a default judgment can be taken against that person.  This applies to everyone named and served with process in the suit.

 

So if your nieces and nephews, or others, were named and served, and they have failed to answer, then the plaintiff can obtain a default against each and every one of them.  For that matter, a default can be taken in an undefended suit even when the plaintiff fails to set forth a meritorious basis for the suit!  The default judgment is very difficult to set aside (except where there can be proven a lack of service) and almost impossible to successfully appeal, because ALL defensive arguments are usually deemed to be waived.

 

Har, har, har!  Ha, ha, ha!  Isn't that FUNNY!

 

Similarly, if you were named and served both as executor and individually, two separate and distinct capacities, then you would need to answer and defend in both capacities.

 

This is not an either / or proposition.  If you are named and served as executor and individually and answer only as executor, then the plaintiff may be able to obtain a default against you in your individual capacity.  This could extinguish your ownership and leasehold interests in the subject property.

 

If you are named and served as executor and individually and answer only individually, then the plaintiff may be able to obtain a default against you in your representative capacity as executor. This could extinguish the estate's ownership interests in the subject property and destroy any value in the estate which might otherwise be enjoyed by everyone in the family who is a beneficiary of your mother's estate.

 

Ha, ha!  What a riot!

 

Moreover, if you fail to answer as executor and allow a default to be taken against the estate when there were viable defenses which could have been or should have been interposed, your nieces and nephews may be able to later sue you for breach of fiduciary duty for failing to defend the estate against this suit.

 

Whoops!  The JOKE IS ON YOU!!

 

YOU ARE VERY CLEARLY IN WAY OVER YOUR HEAD.

 

As a non-lawyer, you CANNOT file defensive pleading on behalf of the other heirs.  Each must file his or her own answer IF they have been properly named and served.  (If they haven't been served, usually in most places, it is better NOT to answer UNLESS the plaintiff falsely represents to the court that service was completed.  SEE A LAWYER!!)

 

As executor, you stand in a fiduciary relation to the other heirs and are REQUIRED to put their interests before your own.  It is difficult to imagine a more egregious breach of fiduciary duty than filing an individual answer to a suit against both you and the estate without also filing an answer as executor.  That probably qualifies as a breach of fiduciary duty as a matter of law!

 

In many places, courts have found that administrators and trustees who are non-lawyers CANNOT file a pro se answer on behalf of an estate or trust.  YOU NEED TO DISCUSS THIS WITH AN ATTORNEY BEFORE IT IS TOO LATE.

 

Still, if you cannot find an attorney and both you and the estate lack the resources to employ an attorney, it is probably better to heed Mr. Roper's counsel about the importance of filing an answer and to file a pro se answer as executor before it is too late.  It is plausible and even likely that the plaintiff might, by motion, get the pro se answer stricken.  But this might still buy you a little time.  This MIGHT BE better than doing NOTHING.  You ought NOT file anything without first at least discussing this with a lawyer experienced in probate.

 

IF there is another member of the family with the resources, skill and knowledge (and who has the resources to employ a lawyer) who could act as executor in your place and who would be agreeable to other members of the family, you should explore whether it is possible under NY law to have that person substituted as executor or administrator.  It may be better for everyone if the executor is someone else if you cannot or will not employ a lawyer to defend.  If you cannot and will not defend as executor or if you intend to pursue a course of action when benefits YOU individually, at the expense of the other heirs, YOU OUGHT TO STAND ASIDE.

 

If the estate is wholly without any resources, as when the ONLY asset is the subject property, and the mortgage amount exceeds the value of this property, then I certainly understand that it might be foolish to expend money to employ an attorney.

 

If I was an administrator in such a case, I would be sending letters to ALL of the other heirs explaining the situation and ASKING if anyone wanted to CONTRIBUTE to the voluntary employ of a lawyer to defend against the suit.  (I would write this letter very carefully so that it could help me in a suit for breach of duty, but could NOT be used against me in the foreclosure suit.  TALK TO A LAWYER!)  This would both present an opportunity for others to vocalize any objection to your failing to employ a lawyer to defend and would probably at least somewhat immunize you later to someone bringing another action against you.

 

I AM UNFAMILIAR WITH PROVISIONS OF NEW YORK LAW RELATING TO DEFICIENCY JUDGMENTS.  In general, if a creditor obtains a judgment against a secured creditor and the sale of the asset securing the debt fails to cover the full amount of the debt, then a deficiency judgment can often be obtained.  This deficiency might then be applied against other estate assets.

 

For example, suppose that a mother/grandmother dies and leaves a house to her son, while leaving her grand piano to her eldest granddaughter, her prize show horse to the next eldest granddaughter, her stamp collection to the eldest grandson and her late husband's coin collection to the second grandson.

 

Further suppose that the house is subject to a mortgage, but that there is minimal equity.  The son is named executor.  The son also occupies the subject property under a lease.

 

The mortgage servicer sues the son as both executor and individually as heir, naming all beneficiaries to the estate, who were named as alternative beneficiaries and beneficiaries of the individual bequests as shown.  The son answers individually, but fails to answer as executor.

 

The servicer then obtains a default judgment against the son as executor.  THIS IS A JUDGMENT AGAINST THE ESTATE.  The subject property is ordered to be SOLD AT AUCTION by a referee (in NY State).  When the proceeds of the sale of the property fails to cover the (padded) asserted balance, the servicer further applies to the court for a deficiency judgment.  The court then orders the grand piano, the show horse, the stamp collection and the coin collection sold to pay the deficiency.

 

Now ALL of the intended bequests of the mother are extinguished by the reckless behavior of the son in failing to properly defend the suit.  Each grandchild has a valid cause of action against the son for breach of fiduciary duty for failing to answer and defend.

 

Truly, where the value of the house was close to the amount of the mortgage, the matter probably could have been settled through a negotiated deed in lieu or short sale, which would have at least preserved the grandchildren's bequests.

 

I emphasize that the precise way such an example plays out is fact dependent and also depends upon some specifics as to statutes and case law of the jurisdiction.  It might NOT play out this way in New York State.  But this is probably a pretty mainstream example of the potential perils in many places.

 

I WOULD NEVER WANT TO FIND MYSELF HOLDING A FIDUCIARY ROLE WHERE MY ACTIONS (OR INACTIONS) CAUSED HARM TO OTHERS.  You really need to assess the facts, discuss the matter with a lawyer and reconsider whether you are acting in the best interests of those for whom you are acting as a fiduciary!  I have little interest in helping you to harm your nieces and nephews through the provision of further suggestions and insight.

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Curious

So this has sparked a question on the defendants listed in my case. One of them is the state of Florida and they have not answered the complaint. I’m not sure why the State of Florida was listed but I’m very familiar with all the filings in my case and there was not an answer submitted by the state of Florida. Obviously no defense either. They were also never removed by the plaintiff as defendants.

 

Actual name of defendant listed is the "Florida State Department of Revenue".

 

So is the state of Florida in default in my case? The case has been open for 4 years now. ? . ?

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ka

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So this has sparked a question on the defendants listed in my case. One of them is the state of Florida and they have not answered the complaint. I’m not sure why the State of Florida was listed but I’m very familiar with all the filings in my case and there was not an answer submitted by the state of Florida. Obviously no defense either. They were also never removed by the plaintiff as defendants.

Actual name of defendant listed is the "Florida State Department of Revenue". 

 

So is the state of Florida in default in my case? The case has been open for 4 years now. ?

Plaintiffs would typically name as a defendant in a foreclosure action any persons or entities that they believe might have rights in or a claim to the subject property.

 

When governmental entities are named, this is usually to assure that the foreclosure disposes of any tax liens on the property.  These might be superior to or subordinate to the mortgage being foreclosed, depending upon the nature of the lien.

 

Usually a lien for unpaid ad valorem taxes is a lien superior to the mortgage and cannot be extinguished.  But a state could have some unasserted lien in respect of any other deficiency in taxes, assessments or fees, possibly even associated with another different property.

 

Yes, if the state hasn't answered it might be subject to having a default judgment taken.  But if the state isn't actually owed any money or lacks any actual claim or lien, then it probably is unnecessary to go to the expense of filing an answer.

 

Similarly in some places a complaint lists John Does as tenants and then seeks to serve these John Does by posting the summons or citation at the property address.  Whether this obtains the actual jurisdiction over a tenant depends upon state law, rules and unique facts of a case.

 

The plaintiff typically not only wants title but also possession of the property.  For this reason, tenants under a lease may need to be named and served.  Again, the necessity of doing so varies with state law.Generally, in most places, a plaintiff cannot get a judgment for claims outside of the pleadings.  So unless the plaintiff makes a particular claim against a particular defendant, naming some of these defendants is necessary only to make the judgment binding against these other persons.  But usually the other defendants wouldn't be liable for a judgment for money damages, etc.

The judgment usually needs to conform to the pleadings.  So unless a plaintiff expressly asked for relief in respect of a particular defendant, such relief could ordinarily not be granted, even with a default.

 

A defendant can therefore usually read the pleadings, obtain an understanding of the plaintiff's claims with respect to the defendant and then make an informed decision (in consultation with a good attorney) about the necessity and advisability of actually appearing.

 

Failure of the state Department of Revenue to answer may mean that nothing is owed or that the amount owed doesn't warrant the expense of employing an attorney to assert the claim.

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Steve Anderson
ka, wow, you got really heavy in your comments. I was just trying to make light of my proceedings. I know how important all this defending is, and am thankful for your wisdom. I guess frustration is setting in, because I spend so much time and energy in this foreclosing, but am not seeing the benefits of its defense yet.

This past weekend, I have sat down with others being foreclosed on, checked my legal sources and listened and read many arguments that might enlighten my situation. Noone was able to shine light on or nothing was established regarding, who really owns the house of a deceased that is in foreclosure attempting to be defended by the executor. Also, the executor's role can't be defined, and we really went into narrowing his rights and duties. I can't see how he isn't considered standing in stead for the deceased and should be able to defend as a borrower, homeowner, or mortgagor. If not, then why is he being summoned to be involved in this issue of loan repayment. I hope we can keep discussing these sensitive issues as there seems to be very little information on these type of proceedings to go by. SA
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t

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This past weekend, I have sat down with others being foreclosed on, checked my legal sources and listened and read many arguments that might enlighten my situation.  Noone was able to shine light on or nothing was established regarding, who really owns the house of a deceased that is in foreclosure attempting to be defended by the executor.

 

Steve -

 

I think that ka was rather specific that you needed to be consulting the New York probate laws in addition to laws relating to foreclosure.  And ka also expressly told you that you need to consult with a probate attorney.

 

Talking to other foreclosure defendants about foreclosure defenses is great.  It is unsurprising to me that they would lack knowledge and insight into probate matters.

 

Like real estate law and foreclosure law, there are aspects of probate law that vary considerably from state to state.

 

I share ka's misgivings about giving you further suggestions and advice.  He has explained to you already that you seem to be in way over your head and that your situation is particularly perilous.

 

You have responded to ka's prior posts and the posts of others in ways that suggest that you are not comprehending what is being explained.  This is alarming for everyone.

 

For example, you initial posts, you were WARNED that you probably needed to answer BOTH as executor or individually.  This was the CORRECT ANSWER in almost ALL STATES.  You were also warned that you probably needed an attorney to defend as executor.

 

And yet, later, your post reflects that you are still wringing your hands as to WHETHER to answer as executor or individually.  Since you didn't GET THAT, nothing else much seems to matter.  If you aren't going to answer in each capacity, then you are simply going to LOSE.  Everything else as to discussion of your case is ACADEMIC and will prove to be irrelevant and a WASTE OF EVERYBODY's TIME.

 

Some Forum participants, particularly those with some prior grounding or experience in litigation or extensive business experience warm to topics faster than others.  Those who struggle to understand the basics, probably cannot get up to speed fast enough to act pro se when the litigation is complex.

 

You have presented a situation which is inherently complex.  You also seem to be quite BLIND to the conflicts with which you are presented.

 

Those of us here at the Forum who understand complex matters have more than a little reason to be very concerned that in proceeding to try to defend pro se that you are ignoring the possible peril to the other heirs in pursuing your own narrow self interest!  Why would we want to help you to harm the other members of your family?

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Steve Anderson
Quick reply. I want to state here that I have no intention of harming my nephews and niece. I was just making an observation of not hearing from them about their involvement. I have taken into account every post about my situation and am grateful for the counsel and advice. I am defending my foreclosure, both as an executor and as an heir individually, just like the summons intimates.

The reason I want to keep these kinds of threads going is they lend light to the legalities of the proceedings. A parent dying and the son or daughter living in the home caretaking for them would seemingly be a circumstance that is prevalent and occurs in many families throughout the country. I would hope we could shed some perspective on our sharing of our wisdom and views, SA
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ka

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The reason I want to keep these kinds of threads going is they lend light to the legalities of the proceedings. A parent dying and the son or daughter living in the home caretaking for them would seemingly be a circumstance that is prevalent and occurs in many families throughout the country. I would hope we could shed some perspective on our sharing of our wisdom and views, SA

 

Steve,

 

This particular thread was started by me to discuss the issue of pro se litigants making the mistake of thinking that they can file legal documents on behalf of a co-defendant.

 

Perhaps this applies to YOU, perhaps not.

 

In any case, you seem to have hijacked this thread to again discuss your case.

 

I would also like to see this thread kept alive, but to discuss the topic shown in the Subject of the thread.

 

You have now steered discussion to your case in three separate threads and now another thread has appeared relating to another NY foreclosure in probate.

 

While it is not at all unusual for threads to somewhat drift to other topics, it seems that you desire to change the subject of the thread to your topic.

 

You also seem to be simply IGNORING the thoughtful advice given and seem to think that the means of litigating a foreclosure action is to simply present each and every issue that occurs to you as a new question to be answered by Forum participants.  You seem to be too lazy to either purchase and read a good book on New York probate or foreclosure law or to even explore the many threads on a range of topics which could be readily found by searching the Forum.

 

That is, your impulse is ALWAYS to SHIFT YOUR WORK TO SOMEONE ELSE.  This is getting very boring!  How about you BEGIN by doing a little reading and research and then present a question that reflects that you are actually interested in helping yourself instead of having others help you and do your work for you!

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t

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This particular thread was started by me to discuss the issue of pro se litigants making the mistake of thinking that they can file legal documents on behalf of a co-defendant.

 

ka:

 

You might have instead simply revived Mr. Roper's thread:

 

A Note About Preparing and Signing Pleadings for Others -- Unauthorized Practice of Law

http://ssgoldstar.websitetoolbox.com/post/A-Note-About-Preparing-and-Signing-Pleadings-for-Others-Unauthorized-Practice-of-Law-5260327

 

Mr. Roper had previous warned Forum participants about this very issue!

 

I certainly understand your aggravation at Steve hijacking your thread.  This happens all too often at the Forum.

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