Mortgage Servicing Fraud
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t

Florida's Fourth District Court of Appeals handed down a new decision on rehearing today in the case McLean v. JPMorgan Chase Bank, N.A., which reaffirms that standing is determined at the inception of a case:

 

McLean v. JPMorgan Chase Bank, N.A., No. 4D10-3429 (Fla. 4th DCA Feb. 8, 2012)

http://www.4dca.org/opinions/Feb%202012/02-08-12/4D10-3429.rh'g.pdf

 

From the decision:

"While it is true that standing to foreclose can be demonstrated by the filing of the original note with a special endorsement in favor of the plaintiff, this does not alter the rule that a party’s standing is determined at the time the lawsuit was filed.  See Progressive Exp. Ins. Co. v. McGrath Cmty. Chiropractic, 913 So. 2d 1281, 1286 (Fla. 2d DCA 2005).  Stated another way, “the plaintiff’s lack of standing at the inception of the case is not a defect that may be cured by the acquisition of standing after the case is filed.”  Id. at 1285.  Thus, a party is not permitted to establish the right to maintain an action retroactively by acquiring standing to file a lawsuit after the fact.  Id. at 1286.

 

To summarize, the plaintiff must prove that it had standing to foreclose when the complaint was filed.  See Country Place Cmty. Ass'n v. J.P. Morgan Mortg. Acquisition Corp., 51 So. 3d 1176, 1179 (Fla. 2d DCA 2010) (“Because J.P. Morgan did not own or possess the note and mortgage when it filed its lawsuit, it lacked standing to maintain the foreclosure action.”); see also Jeff–Ray Corp. v. Jacobson, 566 So. 2d 885, 886 (Fla. 4th DCA 1990) (holding that a foreclosure complaint failed to state a cause of action where plaintiffs relied on assignment of mortgage that was dated four months after the lawsuit was filed)."

 

Does this sound familiar?

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Foley
Damn, I need some Federal or Bankruptcy case law that says EXACTLY this for a situation just like this...  Sound familiar?  why, it "speaks for itself..."
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Kate

Look at Mr. Roper's old posts from the Ohio Federal cases.  For example, the Boyko, Dowd, Rose and O'Malley decisions from 2007 and 2008.  The orders and opinions from these decisions generally have the law you require. A lot of these were posted in the Legal Lounge.

 

See also Mr. Roper's thread:

 

Standing and Jurisdiction Is Dependent Upon the Facts At the Commencement of the Suit

http://ssgoldstar.websitetoolbox.com/post/Standing-and-Jurisdiction-Is-Dependent-Upon-the-Facts-At-the-Commencement-of-the-Suit-5335771

 

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Bob

Your link didn't work .. try this one ... http://tinyurl.com/82nnc62

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Gordon

McLean v. JPMorgan Chase Bank, N.A., No. 4D10-3429 (Fla. 4th DCA Feb. 8, 2012)

 

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Unregistered
Doesn't this clarification leave Chase in the same predicament that cannot be cured?
Since the court record shows that the original note indeed was submitted after commencement of the suit, but the endorsement was not dated, Chase can't go back and slip in a date on the endorsement without constituting fraud upon the court, right?

Could lack of standing be cured by some other means? If so, how?
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t

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Doesn't this clarification leave Chase in the same predicament that cannot be cured?

Since the court record shows that the original note indeed was submitted
after commencement of the suit, but the endorsement was not dated, Chase can't go back and slip in a date on the endorsement without constituting fraud upon the court, right?
 
Could lack of standing be cured by some other means? If so,
how? 
 
Dismissals due to lack of standing are almost always dismissals without prejudice.
 
This means that the decision is not a final adjudication of the case and the matter can simply be refiled.  Upon refiling, the plaintiff might have cured the standing problem.
 
There is a common sense aspect to this that is actually rather just.  Suppose, for example, that A and B have a contract and B is in breach of the contract.  C, a stranger to the contract, brings suit against B.
 
B would seem to be entitled to a dismissal as to C.  But this shouldn't and wouldn't preclude A, the actual real party at interest and the party with standing from bringing the suit.
 
Similarly, suppose that A has assigned A's interest to C, but does so after the commencement of the suit.  At commencement, C lacks standing, so in most jurisdictions and in U.S. courts, B would be entitled to a dismissal due to lack of standing.
 
But C can still refile, since C has later acquired an interest.  Compare the result where A sues B and then assigns A's interest to C after commencement of the suit.  In this situation, usually C could intervene and move for a substitution of plaintiff stepping into A's shoes to continue the suit.
 
But when C jumps the gun and sues before C acquires any interest, the court usually would lack jurisdiction and would have to dismiss the suit for lack of standing.
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Unregistered

FYI

HungarianProse thread: JPMorgan vs. McLean    02/02/12 at09:09 AM

Does anybody here know if arehearing was filed in the above case?

JohnLewis: The answer to your ? is "Yes". it was filed on 1/04/2012 andthe Applellant (McLean) filed a 'Response' on 01/19/2012.

 

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John Lewis
Could lack of standing be cured by some other means? If so,
how?
 
HOW ~ on their refile, having previously introduced their 'evidence' of standing, does it not "...leave Chase in the same predicament that cannot be cured?"
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John Lewis

after reading and then re-reading t's explanation ~ I get it ~ so if anyone is looking for the 'answer' to my ? plez revisit t's example above.

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Chuck

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after reading and then re-reading t's explanation ~ I get it ~ so if anyone is looking for the 'answer' to my ? plez revisit t's example above.

 

There is another way to think about the standing problem, John, which illustrates why a dismissal based upon standing must always be without prejudice.

 

Suppose arguendo, that the rule was otherwise.  If this were the case, I could bring a foreclosure suit against you (while a stranger to your mortgage).  When you showed that I lacked any interest in the mortgage, you might then obtain a dismissal of my suit with prejudice.  Then, you might claim res judicata immunity to suit, having prevailed in the suit I brought against you as a ruse simply to help you establish such res judicata immunity.

 

The example is still a little shaky because res judicata actually only applies where there is a unity of parties and cause of action.  But the example shows why a dismissal without prejudice might be just.

 

Generally, an adjudication of a suit is binding upon only those participating in the suit.  Those who were never named and served and over whom the court failed to obtain jurisdiction can rarely be bound by a court's decision.

 

Perhaps an even cleaner justification may be found in the fact that when a court lacks standing it is without jurisdiction to adjudicate.  The only order the court can enter is one of dismissal and it cannot reach any other aspect of the case, since it lacks jurisdiction.  A dismissal with prejudice is a determination.  A dismissal without prejudice is not, as it merely restores the parties to their respective positions prior to the institution of suit.  Nothing is determined except that the court lacks jurisdiction to hear and determine the case.

 

The court is saying "we are not allowed to decide".  If it's decision was binding upon the parties as to future actions, then the court would have decided something.

 

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John Lewis
"Chuck" ..Perhaps an even cleaner justification may be found in the fact that when a court lacks standing it is without jurisdiction to adjudicate."

Chuck, you have so perfectly described my 'got it' moment, well a much 'cleaner' description actually. TU!
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Unregistered
I am studying, but I admit that I am very weak in knowledge of civil procedure and rules of evidence, etc., so I have a few questions about standing being a threshold matter. Could the defendant move for determination of other issues first, or would lack of standing come up anyway and preclude adjudication of any part of the case? 

For example, if the plaintiff admits in its responses that it is not in possession of the original note at commencement of the suit, one could successfully argue that it lacks standing. However, if it goes ahead and attaches to the complaint a "true and exact" copy of the alleged note with only the originating lender's indorsement in blank, then later in discovery provides a second copy with additional undated indorsements from a lender out of business years before the suit, would it be wise for the defendant to move for summary judgment (or some other motion ??) to get a final court determination about fraud on the court, filing and recording false documents, slander of title, etc? 

Are homeowners missing an opportunity for an effective counterpunch by not aggressively seeking the court's decision about the plaintiff's filing sworn false documents? 

Instead of pursuing action again violations of state property law, some of which are felonies, it seems to me that many defendants are allowing the plaintiff's lack of standing to suck all the life out of their defenses. Once the plaintiff knows the details of the defense, it would be easier to defeat the homeowner on refiling.

The recent McLean decision and clarification addressed two notes that were filed, the first one a sworn copy. Does not the assignment of mortgage and the second note being the original and different from the first, constitute judicial admission of perjury, slander of title, fraud on the court, etc. The plaintiff swore the first copy was a true and exact copy of the original note. It wasn't. Yet the judge addressed lack of standing. Is the effect of judicial admission essentially being missed because it is not brought up, and it is not the judge's job to bring it up, whereas lack of standing is his responsibility to consider even if the defendant fails to bring it up?  
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Manny

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For example, if the plaintiff admits in its responses that it is not in possession of the original note at commencement of the suit, one could successfully argue that it lacks standing. However, if it goes ahead and attaches to the complaint a "true and exact" copy of the alleged note with only the originating lender's indorsement in blank, then later in discovery provides a second copy with additional undated indorsements from a lender out of business years before the suit, would it be wise for the defendant to move for summary judgment (or some other motion ??) to get a final court determination about fraud on the court, filing and recording false documents, slander of title, etc?

 
Are homeowners missing an opportunity for an effective counterpunch by not aggressively seeking the court's decision about the plaintiff's filing sworn false documents?
 
 
Your post reflects a misunderstanding not only of the law, but also of the processes actually used in most judicial foreclosures.  I would encourage you to review some of Mr. Roper's older posts on this.  Also study the pleadings in other foreclosure cases in your jurisdiction.
 
You describe the filing of different documents as fraud on the court.
 
Most complaints are unsworn.  When the plaintiff attaches a copy of the note, sans indorsements, this is usually a judicial admission that the note was unindorsed on the date the complaint was filed.  But the plaintiff is not swearing to anything.
 
Mr. Roper has posted about how exhibits to complaints are considered part of the complaint, control the allegations in the complaint and are judicial admissions in most places.
 
If it turns out that the plaintiff attached an incorrect copy to the pleadings, there is nothing either fraudulent or criminal about this, even if it was deliberate.  This is so, because the complaint is unsworn.
 
Mr.  Roper has presented defendants with a fantastic avenue to defeat the plaintiff with its own evidence.
 
It is not necessary to prove any fraud in order to get the court to dismiss for lack of standing.  Using Mr. Roper's suggested argument, the defendant merely points out that the attachment of the unindorsed copy is a judicial admission that the note was unindorsed at commencement and it is game over.  IT DOES NOT MATTER WHETHER THE NOTE WAS INDORSED LATER.
 
Now, very often when the plaintiff realizes that a defendant is contesting its holdership and standing, the plaintiff will very often file with the court another copy of the note that contains indorsements missing from the original copy.  In many places, this is done by filing something along the lines of a "notice of filing of promissory note", but without amending the complaint.  (In many jurisdictions, a plaintiff must seek court permission to amend the complaint.)
 
Very often, this notice of filing is also unverified.  No one will swear to the authenticity of this new copy or even the original.  Rather, it is merely presented.
 
Most defendants are too ignorant to object or object too early or too late.
 
Unless the plaintiff amended its complaint, the copy attached to the complaint usually still controls in most places.  But the plaintiff's attorney will focus the court's attention on the newly filed copy.
 
Most defendant's never make Mr. Roper's suggested argument about judicial admission as to exhibits, even though appellate courts in many states have already ruled that Mr. Roper is correct.
 
Since the notice used to furnish the new copy of the note is also unsworn, still no fraud on the court has occured (UNLESS you can prove that the indorsements are forgeries).
 
Usually, contested foreclosures are decided at summary judgment.  A third copy of the note will then usually be attached to the motion for summary judgment.  For the very first time, the plaintiff will furnish a sworn affidavit which will authenticate the new copy of the note.  The affidavit will omit any mention of the indorsements, will neglect to address of explain the discrepancy as to the prior copy and will not discuss when or where the note was indorsed.
 
Instead, the affidavit will include the conclusory averment that "The plaintiff is the owner or the holder [without specifying which] of the note."  (See Mr. Roper's discussion of conclusory affidavits.)
 
Since the prior two copies were unsworn and the new copy is authenticated in as evasive a way possible, WHERE IS THE FRAUD?
 
*
 
You need to GET OVER your fixation of trying to prove fraud, at least in the first outing.  Instead, ALL YOU USUALLY NEED TO DO IS ARGUE THAT THE ORIGINAL COPY OF THE NOTE FILED WITH THE COMPLAINT IS A JUDICIAL ADMISSION THAT THE NOTE WAS NOT INDORSED AT COMENCEMENT.  THEN YOU WIN THE STANDING ARGUMENT.
 
If you are litigating a second time after an initial dismissal, you would want to focus on attacking the negotiation.  But you are never going to prove any fraud on the court in respect of documents attached to unsworn pleadings.
 
You need to get the plaintiff to answer sworn interrogatories or OBJECT the the admissibility of the exhibits without sworn authentication and force the plaintiff to SWEAR TO THINGS.
 
YOU DO NOT WANT TO DO THIS IN RESPECT OF THE UNSWORN EXHIBITS ATTACHED TO A COMPLAINT.  THIS IS A SHORTCUT TO LOSING WHEN THE EXHIBIT IS A NOTE THAT LACKS INDORSEMENT.  WHY WOULD YOU WANT TO EXCLUDE AN EXHIBIT THAT WINS THE CASE FOR YOU?
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Unregistered
Manny, thank you very much! 

As you probably noticed I admitted I know little about civil procedure or rules of evidence, but I am studying. I have read many posts by Mr. Roper and others. I am also studying my state's law. I do not post here without first doing due diligence in checking for previous posts to try to find answers to my questions. Sometimes it's not easy for me to find just the right previous post to answer my question. I think the search tool is lacking on this site, but sometimes I don't know enough to ask intelligent questions or to know what to search for. Also, I guess I don't have the same comprehension as others on the first read about these complex (to me) issues. I do appreciate your time in answering my ignorant questions. 

I see now. 
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t

The post above by Manny is very useful and informative!

 

Manny seems to have read and understood Mr. Roper's guidance in this area, which is cutting edge nationally.  This thread can probably benefit from a link to Mr. Roper's thread on the subject of judicial admission by exhibit:

 

Judicial Admissions -- Exhibits Control Over Allegations In Pleadings: Khan v. Bank of America

http://ssgoldstar.websitetoolbox.com/post/Judicial-Admissions-Exhibits-Control-Over-Allegations-In-Pleadings-Khan-v.-Bank-of-America-5179188

 

Although Mr. Roper presents authority for only a handful of states, if researchers use his explanation in keyword searches of the law and cases of their state, they are very likely to find that their state has already reached a similar holding, though rarely within the context of a foreclosure proceeding.

 

Start with the language of the Rules that allows attachment of exhibits to the complaint!

 

Manny gets to the heart of another matter that is really important to understand.

 

Very often, when litigating against scoundrels who you know or suspect to be engaged in all manner of fraud and deceit, including forgery, perjury, evidence fabrication and similar mischief, there is an impulse that you need to be showing the court this mischief.  The trouble is that a defendant will usually bear the burden of proof to demonstrate the fact of the mischief.  This can be a very difficult threshold.

 

Swindlers will suggest to you that this is easy.  And swindlers will seek to sell you a wide variety of useless reports and services which purport to demonstrate the fraud.

 

Very often, the successful strategy is to simply embrace rather than attack the false evidenceIn instances where a plaintiff has plead an unindorsed note as well as a post commencement assignment, the plaintiff has presented what is usually conclusive evidence to entitle a borrower to a dismissal!

 

Do not become fixated on trying to prove wrongdoing.  Instead, maintain a single-minded and intense focus on proving precisely that which will entitle you to a dismissal.

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Unregistered
If a notarized verification page is included in the initial petition stating that the preparer of the document verifies that the contents of the complaint are true and accurate to the best of her knowledge and belief, would this be considered a sworn document? Or does a sworn document include something more?
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