Editor’s note: One of the tricks in civil procedure that has gone over the heads of some Judges is that the banks and servicers are refusing to comply with discovery, and while their refusal is subject to a later hearing they proceed with the foreclosure because there is no TRO.
In this case, Judge Tarle understood the connection immediately. While normally the Court is fairly liberal in giving parties time to respond to discovery, he also understood that this could open a window of opportunity for them to foreclose making the case moot for all intents and purposes. So he wrote in his order the same thing that a Judge would right in granting a TRO and prevented them from taking any action on the loan until the issues of discovery was resolved.
see Fagan – 7.27.12 Minute Order Re Ex Parte Hearing
I’ve asked the leading attorneys for banks that are not involved in the securitization illusion. They all respond the same way:
Q; You are the attorney for a bank, right?
A: Yes
Q: And as such you are required to file foreclosure actions on borrowers who can’t pay, right?
A: Yes if the board orders it, which is only after attempts have been made to do a workout.
Q: If you were met with challenges as to whether you funded the loan, owned the loan or had it as an account receivable would you delay discovery?
A: Absolutely not. I would immediately comply with the discovery, produce affidavits from witnesses and copies of our books and records showing the funding of the loan and our continuous ownership of the loan.
Q: If your bank said we have the note but we don’t have this loan as a loan receivable because it is owed to someone else, would you tell them to foreclose?
A: Absolutely not, unless they foreclosed in the name of the real owner of the obligation where the trail of assignments leads to that real creditor.
Q: At the auction of the property, if you were asked to submit a credit bid for the bank you are representing, you would ordinarily submit it in the name of that bank, right?
A: Yes
Q: But if you were only representing the bank who had documented authority to foreclose on behalf of another lender, on whose behalf would you submit the credit bid?
A: Obviously the real creditor, That is what the statute says. You pay cash unless you are the actual creditor to whom the money is owed and the note is collateralized by the property.