Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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William A. Roper, Jr.
In the case Aurora Loan Servs., LLC v. Phillips, the Ohio Court of Appeals for the Fifth Appellate District affirmed a default judgment against borrowers Suzanna and Charles Phillips:
Aurora Loan Servs., LLC v. Phillips, Case No. 10-CA-000021, 2011-Ohio-2954 (Oh. App. 5th Dist. 2011)
http://www.sconet.state.oh.us/rod/docs/pdf/5/2011/2011-ohio-2954.pdf
The decision holds that a borrower cannot allow the entry of a default judgment, allow the appeals period to run, and then later complain that the court lacked jurisdiction to hear and decide the case due to a lack of plaintiff standing.  This is not an unexpected outcome and quite frankly this was not an appeal that ought to have ever been undertaken.

Despite the obsessive rantings of some who sat on their hands and failed to timely raise the correct arguments, the necessity of standing cannot be raised for the first time in a collateral attack on the judgment.

Unlike New York, where standing has to be raised in the first defensive pleading, Ohio has fairly defendant friendly standing rules and a recognition that a lack of standing deprives the court of jurisdiction.  But this doesn't mean that the matter of standing deprives the court of jurisdiction when the matter isn't raised at all.

The Phillips had two opportunities to present the standing argument.  First, they could have done so in a responsive and timely answer.  In this case, they failed to file a timely answer and later moved for leave to file an out of time answer.  The trial court first denied their motion to accept the out of time answer and then, when the Phillips filed an answer despite that denial, the Court granted the plaintiff's motion to strike.

It may well have been error for the court to refuse the out of time answer.  Very often, the rules and the cases on the rules hold that courts should err on the side of generosity in allowing out of time answers so that matters can be decided on the merits.  Without examining the record and the briefs, the reasons for the denial of the Phillips' excusable neglect motion under Rule 6(b) are not readily apparent.

But when the court granted its final judgment by default, the Phillips has a second opportunity to raise both the issue of error in not allowing the late answer and in arguing lack of standing.

But the Phillips did not file a timely appeal!

They let the appeal period run and instead sought by emergency motion to stay the sale and to vacate the judgment of foreclosure.

It is noteworthy that in seeking to vacate the sale after judgment, the Phillips assumed the burden of proving their motion.  Had they made a timely answer, raising the standing defense, then the plaintiff Aurora would have borne the burden of proving its own standing, subject to the rebuttal and impeachment by the Phillips.

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We have previously noted in many other threads that those who fail to answer and allow a default to be taken face a very daunting challenge in getting a default set aside.

While some Ohio courts have held that standing may be challenged for the first time on appeal, that would be in an appeal of the order granting the foreclosure, NOT the later order confirming the sale.

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The Phillips made their first blunder in failing to answer.  Even in failing to answer, had they sought to interpose an answer earlier in the case, the answer almost certainly would have been accepted.  In attempting to file an exceptionally late answer, some fourteen months after the complaint was filed, they faced a much tougher scrutiny of their 6(b) motion.

When they lost, they could have filed a timely notice of appeal, but didn't do this either.

I do not mean to sound unsympathetic.  The mortgage servicers and their foreclosure mill law firms are engaged in epic, systemic forgery, perjury and evidence fabrication.

But if one team doesn't even show up for the game and loses by default, can the defaulting team later validly complain that the winning team was taking steroids or plotting to throw greaseballs?

In many instances, when the defendant defaults, the courts pay minimal attention to the evidence and grant a default judgment on little or no evidence.  In the defaulted cases, very often the plaintiff didn't need to plead the forged and fabricated evidence at all.  Usually, a perjured affidavit alone will do the trick and in some court rooms, they neglect to file even that!

The place and time to confront the forgery and the perjury is in the courtroom at the scheduled hearing and trial.  I have little sympathy for those who fail so miserably to defend themselves and then take up a meritless appeal.

Former Democratic Ohio Attorney General Marc Dann, represented the Defendants in this case.  He ought to know better!

The lesson to be taken from this case is to file your answer on time and, faced with an adverse trial court decision, to file a timely appeal.
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