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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As a research aid for those who might benefit from the employment of the "clean hands" defense in a judicial foreclosure, folks might want to read the cited text and the underlying cases shown below.  Each of these cases is available for FREE viewing at the LexisOne website:

http://www.lexisone.com

 

"However, in order to invoke the equitable doctrine of laches, "it is fundamental that he who comes into equity must come with clean hands." Christman v. Christman (1960), 171 Ohio St. 152, 154, 168 N.E.2d 153. This maxim "requires only that the plaintiff must not be guilty of reprehensible conduct with respect to the subject-matter of his suit." Kinner v. Lake Shore & Michigan S. Ry. Co. (1904), 69 Ohio St. 339, 69 N.E. 614, 1 Ohio L. Rep. 853,  [*11]  paragraph one of the syllabus. See, also, Goldberger v. Bexley Properties (1983), 5 Ohio St.3d 82, 85, 5 Ohio B. 135, 448 N.E.2d 1380; North Coast Cookies, Inc. v. Sweet Temptations, Inc. (1984), 16 Ohio App.3d 342, 16 Ohio B. 391, 476 N.E.2d 388, paragraph two of the syllabus (the "clean hands" doctrine concerns grossly inequitable behavior in the underlying transaction which is the subject matter of the suit); Ohio Engineering Co. v. Hardin Quarry Co. (Sept. 12, 1980), Hardin App. No. 6-80-2, 1980 Ohio App. LEXIS 11124, unreported (quoting Ohio Jur. 2d p. 148, Equity, para. 70 (a party in equity "who founds his cause upon a transaction in respect of which he is himself guilty of unconscionable conduct cannot have any relief whatsoever, for he is personally barred.")). Thus, for the doctrine of unclean hands to apply, the offending conduct must constitute reprehensible, grossly inequitable, or unconscionable conduct, rather than mere negligence, ignorance, or inappropriateness."

Wiley v. Wiley, CASE NUMBER 9-06-34, COURT OF APPEALS OF OHIO, THIRD APPELLATE DISTRICT, MARION COUNTY, 2007 Ohio 6423; 2007 Ohio App. LEXIS 5622, December 3, 2007, Date of Judgment Entry.

 

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"The doctrine of unclean hands states the following: "'he who seeks  [*11]  equity must come with clean hands.' 'Equity is based upon what is perceived as just under the circumstances of each case and, when both parties are guilty of injustice, a court of equity will leave them as they are.'" Patterson v. Blanton (1996), 109 Ohio App.3d 349, 354, 672 N.E.2d 208."

Nelson v. Nelson, CASE NO. 2007-G-2758, COURT OF APPEALS OF OHIO, ELEVENTH APPELLATE DISTRICT, GEAUGA COUNTY, 2007 Ohio 6246; 2007 Ohio App. LEXIS 5484, November 21, 2007, Decided.

 

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"The doctrine of unclean hands states the following: "[h]e who seeks equity must come with clean hands. Equity is based upon what is perceived as fair under the circumstances of each case and, when both parties are guilty of injustice, a court of equity will leave them as they  [*5]  are." Patterson v. Blanton (1996), 109 Ohio App.3d 349, 354, 672 N.E.2d 208.

. . .

Equity requires that, whenever a party takes the initiative to set in motion the judicial machinery to obtain some remedy but has violated good faith by his or her prior-related conduct, he will be denied the remedy. Marinaro v. Major Indoor Soccer League (1991), 81 Ohio App.3d 42, 45, 610 N.E.2d 450. To bar a party's claims, that party must be found to be at fault in relation to the other party and in relation to the transaction upon which the claims are based. Trott v. Trott, Franklin App. No. 01 AP-852, 2002 Ohio 1077."

Seitz v. Kozma, No. 86922 , COURT OF APPEALS OF OHIO, EIGHTH APPELLATE DISTRICT, CUYAHOGA COUNTY, 2006 Ohio 3591; 2006 Ohio App. LEXIS 3540, July 13, 2006, Date of Announcement of Decision.

 

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"The doctrine of "clean hands" is an equitable doctrine. See, generally, Basil v. Vincello (1990), 50 Ohio St. 3d 185, 190, 553 N.E.2d 602; Brosky v. Brosky (Mar. 28, 2001), 9th Dist. No. 00CA007662, 2001 Ohio App. LEXIS 1426, citing Marinaro v. Major Indoor Soccer League (1991), 81 Ohio App. 3d 42, 45, 610 N.E.2d 450. This doctrine prescribes that when "a party takes the initiative to set in motion the judicial machinery to obtain some remedy but has violated good faith by his prior-related conduct, the court will deny the remedy." Marinaro, 81 Ohio App. 3d at 45. "The maxim, 'he who comes into equity must come with clean hands,' requires only that the plaintiff must not be guilty of reprehensible conduct with respect to the subject matter of [the] suit." Id."

City of Wooster v. Entm't One, Inc., C.A. No. 03CA0043 , COURT OF APPEALS OF OHIO, NINTH APPELLATE DISTRICT, WAYNE COUNTY, 158 Ohio App. 3d 161; 2004 Ohio 3846; 814 N.E.2d 521; 2004 Ohio App. LEXIS 3446, July 21, 2004, Decided.

 

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"In the context of a mortgage, the requirement that the mortgage funding check becomes paramount. "A mortgage is a security interest which rests upon the underlying debt." Citizens Loan & Savings Co. v. Stone (1965), 1 Ohio App.2d 551, 556, 206 N.E.2d 17; see, also, Division of Aid for Aged, Dept. of Pub. Welfare v. Huff (1960), 110 Ohio App. 483, 486, 168 N.E.2d 316 (stating that "[a] mortgage is a lien for a debt and something more. It is a transfer of the title as security and to be void on payment."). Thus, if the check transferring the funds that give rise to the underlying debt is dishonored, it is only logical that the mortgage likewise fails."
Lanco Title Agency v. Mortgage Plus, Case No. 03CA6 , COURT OF APPEALS OF OHIO, FOURTH APPELLATE DISTRICT, JACKSON COUNTY, 2004 Ohio 2267; 2004 Ohio App. LEXIS 2029, April 30, 2004, Filed

[A very NICE case showing correspondent relationships...]

 

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"It is also a fundamental rule of equity that he who seeks equity must do equity. Id. As explained in Trott v. Trott , Franklin App. No. 01AP-852, 2002 Ohio 1077:

"The clean hands doctrine of equity  [*6]  requires that whenever a party takes the initiative to set in motion the judicial machinery to obtain some remedy but has violated good faith by his or her prior-related conduct, the court will deny the remedy. Marinaro v. Major Indoor Soccer League (1991), 81 Ohio App.3d 42, 45, 610 N.E.2d 450. Thus, in order for the doctrine to bar a party's claims, the party must be found to be at fault in relation to the other party and in relation to the transaction upon which the claims are based."

Moreover, "the maxim, 'He who seeks equity must come with clean hands,' requires only that the party must not be guilty of reprehensible conduct with respect to the subject matter of his suit." Basil v. Vincello (1990), 50 Ohio St.3d 185, 190, 553 N.E.2d 602."

Parmatown Spinal & Rehab. Ctr., Inc. v. Lewis, No. 81996 , COURT OF APPEALS OF OHIO, EIGHTH APPELLATE DISTRICT, CUYAHOGA COUNTY, 2003 Ohio 5069; 2003 Ohio App. LEXIS 4571, September 25, 2003, Date of Announcement of Decision.

 

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"The doctrine of clean hands is based on the maxim of equity that provides "he who comes into equity must come with clean hands." Marinaro v. Major Indoor Soccer League (1991), 81 Ohio App.3d 42, 45, 610 N.E.2d 450."

Seminatore v. Climaco, Climaco, Lefkowitz & Garofolia Co., LPA, NO. 81568 , COURT OF APPEALS OF OHIO, EIGHTH APPELLATE DISTRICT, CUYAHOGA COUNTY, 2003 Ohio 3945; 2003 Ohio App. LEXIS 3513, July 24, 2003, Date of Announcement of Decision , Discretionary appeal not allowed by Seminatore v. Climaco, Climaco, Lefkowitz & Garofoli Co., L.P.A., 799 N.E.2d 187, 2003 Ohio LEXIS 3240 (Ohio, Nov. 26, 2003)

 

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"R.C. 3105.011 states that a judge in a domestic relations action has "full equitable powers *** appropriate to the determination of all domestic relations matters." An equitable defense can be raised against a statutory remedy and, therefore, the equitable doctrine of unclean hands can be employed, where appropriate, in a divorce action. n16 Equity requires that whenever a party takes the initiative to set in motion the judicial machinery to obtain some remedy but has violated good faith by his or her prior-related conduct, he will be denied the remedy. n17 To bar a party's claims, that party must be found to be at fault in relation to the other party and in relation to the transaction  [*32]  upon which the claims are based. n18

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -16

Safranek v. Safranek, Cuyahoga App. No. 80413, 2002 Ohio 5066.17

Marinaro v. Major Indoor Soccer League (1991), 81 Ohio App.3d 42, 45, 610 N.E.2d 450. 18

Trott v. Trott, Franklin App. No. 01 AP-852, 2002 Ohio 1077.
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"Equity refuses to lend its aid in any manner to one seeking its active interposition, who has been guilty of unlawful or inequitable conduct in the matter with relation to which he seeks relief. *** If the alleged wrongful conduct of the complainant 'appears not to have injured, damaged, or prejudiced the defendant, the maxim may not be successfully invoked.'" n19

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Shampton v. City of Springboro (Nov. 13, 2001), Warren App. No. CA2000-08-080, CA2000-09-081, 2001 Ohio App. LEXIS 5105.
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Offenberg v. Offenberg, Nos. 78885, 78886, 79425, 79426 , COURT OF APPEALS OF OHIO, EIGHTH APPELLATE DISTRICT, CUYAHOGA COUNTY, 2003 Ohio 269; 2003 Ohio App. LEXIS 283, January 23, 2003, Date of Announcement of Decision , Appeal after remand at Glassman v. Offenberg, 2006 Ohio 3837, 2006 Ohio App. LEXIS 3801 (Ohio Ct. App., Cuyahoga County, July 27, 2006).

 

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"Briefly stated, the clean-hands doctrine provides that a party cannot come to the court seeking equity where that party has engaged in reprehensible conduct with respect to the subject matter of the action. See Marinaro v. Major Indoor Soccer League (1991), 81 Ohio App.3d 42, 610 N.E.2d 450. The doctrine of "clean hands" is an equitable doctrine. See Basil v. Vincello (1990), 50 Ohio St.3d 185, 190, 553 N.E.2d 602; Marinaro at 45."

O'Brien v. Ohio State Univ., CASE NO. 2004-10230 , COURT OF CLAIMS OF OHIO, 139 Ohio Misc. 2d 36; 2006 Ohio 4346; 859 N.E.2d 607; 2006 Ohio Misc. LEXIS 129, August 2, 2006, Filed , Judgment entered by O'Brien v. Ohio State Univ., 2006 Ohio 4737, 2006 Ohio Misc. LEXIS 130 (Ohio Ct. Cl., Aug. 18, 2006)

 

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Bear in mind that these cases were selected SOLELY because they touched upon the clean hands doctrine AND they were avalable for FREE at the LexisOne site, as they are less than five years old.  But anyone litigating OUGHT TO BE looking for cases that are as directly ON POINT as to the facts in their case as reasonable practicable.  So this is NOT intended to be anything other than a survey introduction to the topic to STIMULATE discussion and research, NOT a statement as to the law or its applicability to anyone's case!

 

There are no doubt excellent Ohio case digests and experienced Ohio lawyers which should be consulted in developing your litigation strategy!

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O -

Thanks for the Great info

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Bill,
Thank you for your research and insight.  I feel so utterly lost with all the legal jargon.  It takes me back seven years ago  (12/15/00 to be exact) when my son suffered the traumatic brain injury in a car accident.  The neurologist and trauma Drs. threw out word like diffuse axonal injury, basal ganglia, neuro storm, icp monitor etc.  I would fly down the hall of the ICU to the medical library and arm myself with knowledge.  The son that was to stay in a vegetative state NOW has his Associates degree and an independent life.  Against all odds I have seen miracles happen and I have to have faith that I shall see another miracle in this situation. I strongly believe Knowledge is power. Thank you again. 

I have the RESPA letter prepared to send certified/return receipt to Freedom Mortgage, LoanCare, Chase and the Attorney who filed the foreclosure.  I feel this is the first step to protect our rights, we shall see what the attorney we met with recommends doing and go from there.   The "clean hands" references seem to be a good parrellel to our situation.  I am also calling Legal Aid and HUD (conventional loan side)to see how they may be able to help.  Pro bono or contigent is what we really need.  The funds just are no longer there, our entire savings and retirement went to save our child and to keep afloat the past seven years.  We are literally starting over...as are many others in this sinking ship called Mortgage Fraud.

To everyone:  Keep you spirits up, hug your loved ones and know that wherever you are together, that is HOME!  The rest is just wood and stone. 

Have a great week

Julie

Be the LIGHT you wish to see in the world!
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MSFraud,org
Thank you to Mr. Roper for the information on the Unclean Hands Doctrine.  It is certainly applicable in our cases against crooked lawyers. 

We put it in the Legal Lounge near the bottom under Causes of Action.
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curious

Has anyone actually seen a foreclosure case since the meltdown where a borrower prevailed on a clean hands defense?  If so, what is the case style and number, etc. 

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angry&NOT TAKING IT
thanks.. mr roper... you do fiiiiiiine work! i hope other appreciate as much as i do! thanks againt
anti
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f

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thanks .. mr roper... you do fiiiiiiine work! i hope other appreciate as much as i do! thanks againt

 

anti
 
You probably should have thanked William A. Roper about four years ago, anti!  Or at least before he left the Forum in disgust six months ago after the site administrators betrayed Forum participants by caving in to swindlers.  This is a very old thread!

 

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Hi All

Any tread that is revisited/revived that was started or replied by Mr. Roper is so very welcomed.

I have tried over the past two months to read as much has possible. Being that my time is limited and my reading and understanding level is not on par with the many so called self professed legal scholars on this board  F being one of mention.

I have noticed that Mr. Roper NEVER wanted or expected self adulation's or acclaim. Mr. Roper's mission  I believe, was simply to assist distressed homeowners and inform the less informed. I am glad to see that Mr. Roper is posting here again even if only to pay tribute to another poster (NYE).

The so called legal scholars should try to incorporate a little " BED SIDE MATTER" in dealing with less scholarly poster like myself. So with all that being said, let me now address the Clean Hands Doctrine as it pertains to cases in my state of NJ.

I have noticed that many foreclosure defense attorney's mention the Clean Hands Doctrine in there motion opposing summary judgment however the trial judges never mention the doctrine in there opinion.

It would be most educational and informative if someone could post case law where the Clean Hands Doctrine was used to have a foreclosure case dismissed.

In closing please be reminded that this board is a forum on Mortgage Servicing Fraud and not a Harvard law Class. A poster should not be expected to have the legal capacity of F. Lee Bailey or Oliver Wendell Holmes, nor should a poster be criticized for lacking of the aforementioned capacity.

Thanks and much appreciation to each and every contributor here at MSFraud.

Best regards

Acesfull 

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t

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Has anyone actually seen a foreclosure case since the meltdown where a borrower prevailed on a clean hands defense?  If so, what is the case style and number, etc.  

 

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I have noticed that many foreclosure defense attorney's mention the Clean Hands Doctrine in there motion opposing summary judgment however the trial judges never mention the doctrine in there opinion.

It would be most educational and informative if someone could post case law where the Clean Hands Doctrine was used to have a foreclosure case dismissed.

 

I have never seen any recent case in which a borrower prevailed using the clean hands argument.

 

On the other hand, I have seen several cases where a case was dismissed for fraud on the court.

 

Clean hands is generally a broader argument than fraud on the court in that it could subsume some bad conduct on the part of the lender or servicer outside the courtroom.

 

But the clean hands argument also has its limitations.  Most particularly, the clean hands argument is an equitable defense rather than a defense at law.

 

Most judicial foreclosure actions involve two counts.  First there is a count relating to the assertion of default under the note.  Second is a count for the foreclosure of the subject property.

 

The first count is an action at law.  Only the second count is a claim in equity.

 

If the borrower were to prevail only on a clean hands defense, but not on any other basis, while the plaintiff otherwise proved its case, the result ought to be a judgment for money damages under the first count on the note, but denial of the second foreclosure count.

 

The bank would get a money judgment but be denied relief as to foreclosure of the subject property.  Clearly, a dismissal of both counts for fraud on the court is better when this can be proven.

 

It should also be noted that in order to prevail on a clean hands defense, the defendant needs to particularly plead and prove the bad behavior showing unclean hands.  In most cases I have seen, the clean hands defense is plead generally without specifics and is rarely proven. 

 

This is not an indication that the defense isn't viable, but bear in mind that the defendant has the burden of proof to show the bad behavior.  Often, it is easier to show a defect in the plaintiff's evidence or proof.

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Bill
t wrote:

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Has anyone actually seen a foreclosure case since the meltdown where a borrower prevailed on a clean hands defense?  If so, what is the case style and number, etc.  

 

Quote:
I have noticed that many foreclosure defense attorney's mention the Clean Hands Doctrine in there motion opposing summary judgment however the trial judges never mention the doctrine in there opinion.

It would be most educational and informative if someone could post case law where the Clean Hands Doctrine was used to have a foreclosure case dismissed.

 

I have never seen any recent case in which a borrower prevailed using the clean hands argument.

 

On the other hand, I have seen several cases where a case was dismissed for fraud on the court.

 

Clean hands is generally a broader argument than fraud on the court in that it could subsume some bad conduct on the part of the lender or servicer outside the courtroom.

 

But the clean hands argument also has its limitations.  Most particularly, the clean hands argument is an equitable defense rather than a defense at law.

 

Most judicial foreclosure actions involve two counts.  First there is a count relating to the assertion of default under the note.  Second is a count for the foreclosure of the subject property.

 

The first count is an action at law.  Only the second count is a claim in equity.

 

If the borrower were to prevail only on a clean hands defense, but not on any other basis, while the plaintiff otherwise proved its case, the result ought to be a judgment for money damages under the first count on the note, but denial of the second foreclosure count.

 

The bank would get a money judgment but be denied relief as to foreclosure of the subject property.  Clearly, a dismissal of both counts for fraud on the court is better when this can be proven.

 

It should also be noted that in order to prevail on a clean hands defense, the defendant needs to particularly plead and prove the bad behavior showing unclean hands.  In most cases I have seen, the clean hands defense is plead generally without specifics and is rarely proven. 

 

This is not an indication that the defense isn't viable, but bear in mind that the defendant has the burden of proof to show the bad behavior.  Often, it is easier to show a defect in the plaintiff's evidence or proof.


+1

Aequitas legem sequitur - Equity follows the law

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Equity follows the law

Equity will not allow a remedy that is contrary to law. The court of Chancery never claimed to override the courts of common law. In Story on Equity third English edition 1920 page 34,"where a rule, either of the common or the statute law is direct, and governs the case with all its circumstances, or the particular point, a court of equity is as much bound by it as a court of law, and can as little justify a departure from it." it is only when there is some important circumstance disregarded by the common law rules that equity interferes. As per Cardozo in Graf v. Hope Building Corporation, 254 N.Y 1 at 9 (1930), "Equity works as a supplement for law and does not supersede the prevailing law."

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