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Oregon Strikes Down Hearsay Part of Affidavit

Posted by Neil Garfield | April 10, 2018

It’s been the bane of existence for foreclosure defense lawyers. They are presented with affidavits or declarations in which the matters that are asserted are not based on personal knowledge and are hearsay that should be excluded from any evidence considered by the court.

These documents are most often offered in motions for summary judgment that are in reality tactical devices to avoid being required to prove actual facts supporting the assertion or allegation that the foreclosing party has the right to enforce the note and the mortgage. By inference the right to enforce the debt is assumed.

Lawyers for the banks and servicers are conceding this is a setback for them.

see USBank v McCoy.pdf

Contrary to the trial court decision, the appellate court found that the homeowner was correct in his objection to portions of a declaration that were clearly hearsay. Those hearsay portions were the basis for granting relief to the foreclosing party.

This was merely a matter of following established law and procedure. In my opinion, and in the opinion of hundreds of other lawyers, most of the foreclosures that have been processed over the past 15 years would have been concluded in favor of the homeowner if the courts had merely followed established law and procedure.

From Bill Paatalo (hat tip, by the way):

Here’s what a bank lawyer had to say about this ruling.

http://usfn.site-ym.com/blogpost/1296766/296492/Oregon-Proof-of-Standing-Clarified-in-Appellate-Ruling

I don’t know about you guys, but his last sentence seems to state that the declarations are being prepared by default counsel and sent to the servicers for execution. Not that we didn’t know this already, but…. AREN’T THESE DECLARATIONS SUPPOSED TO BE COMING FROM THE SERVICERS?!!

“As a result of McCoy, servicers should anticipate more challenges to foreclosures from borrowers (and potentially judges) where a servicer's affidavit filed in support of a dispositive motion for entry of judgement does not adequately demonstrate either that the witness has personal knowledge of the possession of the note at the time the foreclosure was filed, or does not include a record of the collateral file whereabouts (containing the promissory note) attached to the declaration as an exhibit (such as a screen printout).

Servicers should expect a more thorough declaration for execution along these lines from default counsel.”

But this case stands out for another reason. US Bank is named as the foreclosing party. But unlike most of the other cases in which US Bank is named as the foreclosing party, US Bank is presented as follows:

U.S. BANK NATIONAL ASSOCIATION, as Trustee for the Structured Asset Investment Loan Trust, 2005-10, its successors in interest and/or assigns, Plaintiff-Respondent,

What is different is that here the lawyers are naming US Bank as trustee for the named trust instead of being trustee for “certificate holders” or “certificates.” It is a more direct approach than is usually taken in foreclosures in which U.S. Bank is named as trustee for undisclosed parties or named as trustee for digital certificates.

Of course they still have a couple of problems. They don’t allege that the trust actually exists or conducts business anywhere or for that matter than it ever conducted business. Any person or entity seeking relief from a court in equity or in law must first identify themselves with sufficient specificity to identify them. If it is a business entity, like a REMIC trust, then it should identify itself as, for example, “a common-law trust organized and existing under the laws of the state of New York with its principal business located at 123 Main St., New York, NY.”

This enables the defendant and the court to know who is bringing suit or otherwise invoking a legal process. As I have repeatedly stated on this site, there is certainly no evidence that any of the REMIC trusts are in existence at the time that their name is invoked for the purposes of initiating foreclosure procedure. In fact, there is scant evidence that the trusts ever existed or conducted business, much less the business of buying mortgage loans.

On the contrary, every case I have ever seen involving the naming of a REMIC trust as alleged that it is a “holder” implying that it has received the right to enforce from the owner of the debt. This clearly demonstrates that the trust never entered into a transaction in which it purchased loans. If that had been the case, lawyers would have asserted that their alleged client was a “holder in due course,” in which case no defenses could have been raised against enforcement of the note.

 

 

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