Judges, Lawyers and Foreclosures

In an earlier post, I reported on Alabama judges defying their Chief Judge’s order to halt issuing marriage licences to same sex couples.  Undoubtedly these judges are courageous, particularly as they are elected and risk defeat in the future.

Recently, however, the New York Times reported on “Two Judges Who Get It About Banks“.  Both decisions addressed unscrupulous practices by banks, in these cases Wells Fargo, that led to wrongful foreclosure.  The cases are demonstrative of the deceit and fraud that caused much of the mortgage foreclosure crisis. 

The first case involved a wrongful foreclosure against Mr. and Mrs. Holms.  They were told that a payment of  $10,000.00 would stop the foreclosure. They were told if they faxed a copy of the check to Wells Fargo that the foreclosure scheduled for the next day would be cancelled.  The couple managed to raise the funds, faxed the check and Wells Fargo proceeded anyway.  The couple learned as soon as a lawyer was retained that they had a viable defense to the original foreclosure.  

“Defendant Wells Fargo’s deceptive and intentional conduct displayed a complete and total disregard for the rights of David and Crystal Holm,” wrote R. Brent Elliott, a circuit judge in Missouri’s 43rd Judicial District, in a Jan. 26 opinion. “Wells Fargo took its money and moved on, with complete disregard to the human damage left in its wake.”  The court awarded the Holms $200,000.00 in actual damages, attorneys fees and nearly $3,000,000.00 in punitive damages.

In the second case, New York Bankruptcy Judge Drain, heard a separate case involving Wells Fargo.  In that case it became clear that Wells Fargo had manufactured evidence purporting to make the bank the legitimate owner of the debt. The testimony, Judge Drain noted, shows “a general willingness and practice on Wells Fargo’s part to create documentary evidence, after the fact, when enforcing its claims, WHICH IS EXTRAORDINARY”

The White Plains lawyer, Linda Tirelli, who represented the debtors commented:  “I very respectfully disagree that this is extraordinary…This is business as usual, not just at Wells Fargo.”

So the question arises why are these cases newsworthy?  The judges are to be applauded for their findings.  Some might call this courageous judging.  Their findings certainly were unusual and welcomed. These judges were doing their job.    Without regard to clearing dockets and other administrative considerations, these judges listened and weighed the evidence, made findings and took offense at disregard the banks showed for law and process.  

There have, however, been thousands of similar foreclosure cases across the nation.  Why now are we hearing of cases addressing bank fraud?  Why haven’t judges made these findings before?  Is it poor lawyering? The inability of debtors to hire counsel?  Are the attorneys hired by debtors quickly overwhelmed by the aggressive tactics of the bank attorneys?    We may not have the answers those questions although it seems implausible that so many years after the foreclosure crisis started debtors are only now presenting evidence of fraud and forgery.   The sad stories of those who lost their homes, of broken families and dreams, reinforce the need for civil Gideon laws.  Appointment of competent counsel in civil cases that so fundamentally alter people’s lives must be viewed as a fundamental right and not a privilege that the state cannot afford.