Welcome to The Home Equity Theft Reporter, a blog dedicated to informing the consumer public and the legal profession about Home Equity Theft issues. This blog will consist of information describing the various forms of Home Equity Theft and links to news reports & other informational sources from throughout the country about the victims of Home Equity Theft and what government authorities and others are doing about it.
Monday, September 17, 2012
Court Rejects Bankster 'Buy Off' Of Ch 7 Trustee w/ $10K In Exchange For F'closure Defense Waiver; Homeowner's Defenses Not Waivable By Trustee: Judge
From the National Consumer Bankruptcy Rights Center blog:
In an action comparable to two wolves and a sheep voting on what to have for dinner, the Bankruptcy Court for the Southern District of Florida stepped in on behalf of the sheep and disapproved a settlement agreement under which the trustee sought to waive the debtor’s defenses in an underlying state court foreclosure action. In re Larkin, 468 B.R. 431 (Bankr. S.D. Fla. 2012).
Approximately one year prior to debtor’s filing her chapter 7 bankruptcy petition, Wells Fargo instituted foreclosure proceedings on the debtor’s home. The debtor counterclaimed in that action and raised defenses to Wells Fargo’s claims. The chapter 7 trustee sought to allow the foreclosure to go forward and to dismiss the debtor’s counterclaim and waive her defenses in the underlying foreclosure action, in exchange for Wells Fargo paying $10,000 to the estate.
The court disapproved the settlement agreement finding that while the counterclaim was property of the estate, (citing Parker v. Wendy’s Int’l, Inc., 365 F.3d 1268,1272 (11th Cir.2004)), the defenses to the foreclosure action were not and, therefore, could not be waived by the trustee.
The issue of whether the debtor’s defenses were property of the estate turned on interpretation of section 558 which provides:
The estate shall have the benefit of any defense available to the debtor as against any entity other than the estate, including statutes of limitation, statutes of frauds, usury, and other personal defenses. A waiver of any such defense by the debtor after the commencement of the case does not bind the estate.
The court correctly found that this provision permits the trustee to avail himself of debtor’s defenses but does not authorize the trustee to deprive the debtor of those defenses.
The court did caution that defenses that seek monetary damages may be more akin to counterclaims and could, therefore, be waived by the trustee, but that defenses that seek to reduce potential recovery by the claimant do not fall into that category and are not waivable by the trustee as to the debtor.
CBC News: Betrayal of Trust (A CBC investigation reveals how lawyers across Canada have misappropriated and mishandled clients money, to the tune of tens of millions of dollars, or sometimes even charging vulnerable people top dollar for shoddy services)
Land Contract/Contract For Deed/Rent-To-Own Rackets
The New York Times: The Housing Trap (In the wake of the housing crisis, low-income families have turned to seller financing to buy homes but these deals can be a money trap)
Beware The Fine Print: Consumers Forced To Sign Away Their Rights To Use Court System
The NY Times: Arbitration Everywhere, Stacking the Deck of Justice(Part 1 in series examining how clauses buried in tens of millions of contracts have deprived Americans of one of their most fundamental constitutional rights: their day in court)
Foreclosure Mills' Abysmal Record In Complying With New NYS Foreclosure Requirements
Justice Deceived: How Large Foreclosure Firms Subvert State Regulations Protecting Homeowners
MFY Legal Services Report On Questionable Practices By Process Servers In Debt Collection Cases
Justice Disserved: A Preliminary Analysis of the Exceptionally
Low Appearance Rate by Defendants in Lawsuits Filed in the Civil Court of the City of New York
Mortgage Mess Redux: Robo-Signers Return (A Reuters investigation finds that many banks are still employing the controversial foreclosure practices that sparked a major outcry last year)
CNN Video: As Foreclosures Mount, Florida Court Turns To 'Rocket Docket'
The Wall Street Journal: A Florida Court's 'Rocket Docket' Blasts Through Foreclosure Cases (2 Questions, 15 Seconds, 45 Days to Get Out; 'What's to Talk About?' Says a Judge)
"Produce The Note" Strategy When Dealing With Missing Promissory Notes In Foreclosure Actions
ABC Video: Fighting Against Foreclosure (Some homeowners have found a new tactic to keep the banks at bay)
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