Randomly Distributed Trial Court Justice: A Case Study and Siren from the Consumer Bankruptcy World

Randomly Distributed Trial Court Justice: A Case Study and Siren from the Consumer Bankruptcy World
Forthcoming in American Bankruptcy Institute Law Review
by Gary Neustadter*

Mortgage_fraud_hd“Between February 24, 2010 and April 23, 2012, Heritage Pacific Financial, L.L.C. (“Heritage”), a debt buyer, mass produced and filed 218 essentially identical adversary proceedings in California bankruptcy courts against makers of promissory notes who had filed Chapter 7 or Chapter 13 bankruptcy petitions. Each complaint alleged Heritage’s acquisition of the notes in the secondary market and alleged the outstanding obligations on the notes to be nondischargeable under the Bankruptcy Code’s fraud exception to the bankruptcy discharge. The notes evidenced loans to California residents, made in 2005 and 2006, which helped finance the purchase, refinancing, or improvement of California residential real property. When issued, the notes were secured by junior consensual liens on the real property, but subsequent foreclosure of senior consensual liens, precipitated by the mid-decade burst of the housing bubble, left the notes unsecured.

This article reports an empirical study of these bankruptcy adversary proceedings. Continue reading

CONFISCATE THE PATENTS!

By Sydney Sullivan

confiscatedIf you really want to revive SAVE the economy… Either the Congressional legislature or the courts are going to have to confiscate the bank patents.

Those on the cutting edge of foreclosure defense realize that the “new” securitization system was completely patented from the cradle to the grave in the USPTO… as if to make it appear legal. From the very inception of securitization starting with the Fannie Mae 1003 loan application software to the Wells Fargo targeted sales system… to foreclosure, REO and beyond …each and every step has been developed by some sharp IT guy and likely the idea and eventual purpose, patent and use was created from an idea by the higher-ups.

If the fraudulent foreclosure scheme, a defunct economy and the lack of any meaningful indictments within the TBTF cabal is bothersome… even in lieu of the huge fines, penalties and settlements for fraudulent activities that would send the average individual to the hoosegow for 150 years (just ask Mr. Madoff), then think about this: Okay, you don’t want to indict them – then confiscate the patents that the banks are using to perpetrate the fraud… ’cause they are still operating business as usual. Continue reading