Monday, October 25, 2010

Memo to Ben Bernanke: When Fishing In Troubled Waters Bring A Harpoon

We're reliably informed that Ben Bernanke, chairman of the Federal Reserve and a seemingly nice fellow is sticking the federal oar in the murky waters of foreclosures and debtor creditor wrangling. It seems that he's not satisfied with the way Bank of America and all those other wonderful folks are handling things.

I think it's a lot simpler.

Let me lay it out for you all.

An attorney's signature on a petition-which is how a judicial foreclosure starts-represents that he personally has verified the allegations of the petition and that they are true. If that signature's falsely applied, that means you don't have to look farther-the attorney's on the hook and the petition, as written, is of no value and needs to be revised or dismissed and refiled.

That also goes for affidavits where the affiant states under oath and on penalty of perjury that they have personal knowledge of the contents of the financial records as it relates to this petitioner's transaction.

If that's false, the result's got to be the same-the petition's suspect and needs to be repaired or overhauled and refiled. And, the affiant ought to be prosecuted for perjury on an industrial scale. Anyone who signs an affidavit under oath that they know to be false ought to wear the red badge of perjurer, and branding might be a salutary correction. Anyone who notarizes something they know to be false also needs a spanking.

As a practical matter, many of these foreclosure actions are pro forma-the debtor's gone to who knows where, the home's empty, and the bank's stuck with it. That much I understand and I'm not saying they should not be able to exercise the rights they contracted for. Fair dealing demands that the banks are not any better subjects for abuse just because they're bigger.

But lying on a petition, and that forming the basis for foreclosure? That's another kettle of fish entirely, even assuming that you could even demonstrate who actually owns the mortgage-not an easy task these days.

For debtor side lawyers, the message is clear, assuming that you've got a client with some fight still in them and the cash to put something in the collection plate.

It is this. Put the other side to their proof. That always has produced results in secondary or tertiary collection cases, and the collectors not infrequently could not actually come up with legally sufficient proof.

After all, that's the plaintiff's burden, and if they can't sustain the burden they should be sent home with a stern admonition to do a better job next time. That's the fairness part of the equation, that he who cannot sustain his burden takes nothing.

There. I have spoken.