During the past four years, my 2 minor children and I have experienced and documented a consistent policy of Criminal Estate Abuse and Involuntary Redistribution of Assets relating to our Estate We are outraged. Unless there is an immediate change in Richard A. Smith's illegal actions, we will follow through with this boycott. Richard A. Smith, through the misuse or abuse of wills, trusts, guardianships, and other probate-related scenarios has effectively diverted & hidden assets away from two minor teenage girls, the intended heirs/beneficiaries of their mother's estate. Richard A. Smith's lawyers, accountants and other unethical participants – sometimes with complicity from probate and other courts – have separated all of us from our property, and our rightful inheritance.
A Cautionary Tale For All Parents
Why?
Imagine that you are a 10 year-old child...
Now imagine that you have just woken up from last night's sleep, only to learn that your mother had died in tragic car accident...
And now imagine your 10 yo self being whisked away from your family home, your pets, your friends, and ultimately from your only remaining parent.
That is exactly the situation & state of mind my two minor daughter found themselves in less than 12 hours after their mother died.
Within a 12 hour time span:
- 1.) My children lost: Their loving mother Diane Smith Adamez
- 2.) My children lost: The HOME they had spent over half of their lives in
- 3.) My children's "Family Unit" was Intentionally Destroyed
During the past four years, my 2 minor children and I have experienced and documented a consistent policy of Criminal Estate Abuse and Involuntary Redistribution of Assets relating to our Estate.
We are outraged.
Richard A. Smith, through the misuse or abuse of wills, trusts, guardianships, and other probate-related scenarios has effectively diverted & hidden assets away from two minor teenage girls, the intended heirs/beneficiaries of their mother's estate. Richard A. Smith's lawyers, accountants and other unethical participants – sometimes with complicity from probate and other courts – have separated all of us from our property, and our rightful inheritance.Who Is Richard A. Smith?
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And then, as if losing your mother wasn't horrible enough, your grandparents tell you, "You can't stay here at your house anymore, because your mother could not pay the mortgage, and now the bank is going to take it away."
I have a hard time imagining what my children went thru the day their mother Diane Smith Adamez, died.
I didn't have to imagine for long for my very own "personal hell" to come charging.
And that day, Hell came in the form of Richard Allen Smith.
This is usually the part where about 1/3 of the people I share my story with just shrug and say, "Well, you really just need to let it go, and move on with your life..."
The next 1/3 just shrug and say, "Well, she was your ex-wife, so really you don't get anything..."
The last 1/3 just shrug and say, "Well, if what you are saying is really true then you shouldn't have any problems finding a lawyer to help you. Besides, if what Richard was doing was REALLY ILLEGAL or harmful to the children the courts would step in and make thing right, but why would he do that to you and the children - he doesn't need the money from your "supposed estate". So he couldn't possible be doing anything wrong."
Then they close with what the first & second groups of people say:
"Well, you really just need to let it go, and move on with your life, because she was your ex-wife, so really you don't get anything..."
And that's what I used to tell my children for the first two years after their mother died.
I would just shrug and tell them a little white lie, "Well, you really just need to not worry about that. Your mother loved you all, and I'm sorry that she wasn't in a position to leave anything to you when she died. Things just really didn't work out in the end as she expected..."
And then I would just shrug and tell them the second lie, "Well granddaddy (RIchard A. SMith) told me that your mother was bankrupt at the time of her death, and all the investments, property and money she had set aside for your children to inherit went to pay all the bills she had when she died. Granddaddy told me that the small amount of money that was left went to pay off the mortgage on the house."
And then, over these past four years, when the girls & I find ourselves in dire financial straits, we contemplate letting them just go and let the "Family" take them in and raise them in Bryan is when I tell the third lie, "If what Richard was doing was REALLY ILLEGAL or harmful to children the courts would step in and make thing right, but why would he do that to you? He doesn't need the money from our "imaginary & supposed estate". So he couldn't possibly be doing anything wrong."
Over these past four years, I can count the people that I have talked to about our estate issues that actually understand it only because they have experienced the same thing as we have - on one hand... exactly five people in this whole world that can truly empathize with us. And those are people that have had some margin of success in actually stopping the "Involuntary Reallocation of Assets", and actually recover some of their respective estates. Only two have succesfully been able to get a criminal investigation started by law enforement channels.
But I digress, so I will jump back to the day of Diane's death and how Hell came in the form of Richard Allen Smith.
Wait! First I need to tell you about Richard.
Richard is not just any ordinary person. He isn't your average father or grandfather. He isn't just some schmuck millionaire. In fact, he isn't even a millionaire.
The fact is that his total net worth I can conservitavely estimate is easily at $500 Million Dollars.
Coldwell Banker United Realtors, the net value of that company alone is at $100 Million Dollars.
His Real Property alone is valued at $300 Million Dollars - Residential, Commercial AND Mineral Rights Real Estate properties, all over the world.
His Corporate Business Entities are harder to estmate, but they are all basically set up to allow him to take advantqage of tax shelters for Domestic & Foreign Corporate LLC's that allow one to maintain a "veil of Secrecy" as to who the actual owners are AND how much money they launder thru his "Charitable Organizations" which are basically tax-exempt.
I was in Richard's "Family" for over 20 years. I learned a lot. I heard a lot. In fact I learned firsthand, by observation and by researching his activities that Richard is in fact NOT JUST ANY ORDINARY PERSON.
First, I'll start with his Political Career & aspirations. Then with the Coldwell Banker empire.
Then and only then, after you have some background on the man you will understand why I say how Hell came in the form of Richard Allen Smith.
For Richard, it's not about Money. It's not about Power.
Because when you have Money AND Power like RIchard does, the only thing that you desire is CONTROL.
ANd that is what his whole ordeal is really all about.
It is a tragic tale of how an incredibly wealthy & powerful man "CONTROLS" everyone and everything that comes into his "circle".
Those who do not comply are eviscerated. They are destroyed. Richard brings hell with him. He destroys his targets using gang-stalking tactics that are carried out by his team of lawyers, accountants, business and political connections.
His favorite tactics to employ are "Financial Ruination", "Divide & Conquer", "Character Assassination", "Courts / Lawsuits / Lawyers - Technically Legal" and last but not least, "Financial and Emotional Abandonment with A Healthy Dose of Mental Abuse". All done with a very high degree of pride, with no regard to his victims, their families, children and especially their livelihood... the classic tell-tale mark of a true sociopath, a true narcissist.
Using these techniques, his ultimate goal is to "throw so much shit upon his mark" that they usually just go away - I mean JUST GO AWAY, and never bother to persue legal options or avenues to fight against his "Corporate Raider" mentality which he uses in his personal and business life.
I am drawing upon these topics regarding Richard so I can clearly illustrate how he used these "techniques": To actually cause his very own daughter's death Then to deny his daughter's minor children of ANY portions of their rightful inheritance and estate. To intentionally and criminally defraud me, Jeff Adamez of my share of Diane's Estate.
Not only portions that are "legally and lawfully" mine under texas probate, civil, and family law statutes, but portions of the estate that she intentionally and diligently set up for me, her ex-husband to have in the event of her death, because her dying wish that she made perfectly and legally clear to me, was, in the event of her death, that I am to raise OUR children, and under NO CIRCUMSTANCES was I to let ANYONE from her side of the family to raise OUR CHILDREN. She even instructed me to limit their interaction with the "Family" for any extended period of time.
Funny, as horrible as the early years of our divorce was
Diane Smith Adamez: Jan 20, 1963 - Oct 15, 2010
October 15th marks the 4 year anniversary of the death of Diane Smith Adamez. I met Diane on February 15, 1986. We married in 1990 and we had four children together. We divorced in 2005, and she died in a tragic car accident on October 15, 2010.The fact is that Diane was in my life for almost 25 years. We dated for 4 years & were married for 15 years. We had 4 beautiful children together. Diane was my girlfriend, my fiancee, my wife, my ex-wife, but most importantly she was the mother of our 4 children.
Someone famous Source Title
The fact is that Diane was in my life for almost 25 years. We dated for 4 years & were married for 15 years. We had 4 beautiful children together.
I can say that there is not a single other person in the world who knew her as well or as intimately as I did.
Diane was my girlfriend, my fiancee, my wife, my ex-wife, but most importantly she was the mother of our 4 children.
For the past 4 years, since her death I have single-handedly raised our two minor daughters, Jennifer (16) and Morgan (15).
And it has been the most wonderful 4 years of my life.
Unfortunately, it has also been the worst 4 years of my life.
Since her death on October 15th 2010, my 2 minor girls & I have been victimized and abandoned by Diane's family, specifically by Diane's father, Richard A. Smith of Bryan, TX.
Now it is time for the truth to come out.
Now is the time for the true story to be told about the events that ultimately lead to her untimely and tragic death.
Also it is time for the truth and true story of how her family, and her own father have criminally and illegally done everything in their power to steal EVERYTHING that rightfully belonged to me AND the minor children after her death.
The legal aspects of the probate and estate issues are very complex.
The things that Richard A. Smith, Diane's father, our children's grandfather, has done as executor and trustee of the estate are numerous.
Suffice it to say that any and all legal avenues, as well as illegal avenues were pursued and acted on by Richard A. Smith all in the attempt to wrongfully, and illegally deny me and the minor children of our rightful share and control of OUR ESTATE WHICH WAS AND IS LAWFULLY AND RIGHTFULLY OURS.
Many of you will possibly be turned off by my truthful and painful accounting of these events and incidents.
In fact they are really quite unbelievable. Most of you will think, "that stuff only happens in the movies" or that I may wrong in my accusations "because our legal system doesn't work like that in the real world".
Many will also think that I am simply bitter, greedy, a gold digger, an opportunist, or just plain crazy.
All I can say is that each and every incident and act that I address in this series of stories that I will be posting will be backed up with actual documents, links to the actual case law, statutes and court rulings at the county, state and federal levels.
So I want to close with this:
I pray that you read and follow this series of posts that I will be making until the complete story is told.
I pray that you will share my story with as many people that you possibly can.
I pray that our story will serve as a cautionary tale to all parents and divorced parents.
I pray that our experience will save other people from having to suffer through what we have been through.
Lastly, I pray that by telling our story, that we might be able to bring the people responsible for our suffering to justice, and to get back everything that we were entitled to and everything that was rightfully our to begin with.
I welcome all feedback, questions or comments you have. I am happy to answer any questions. I welcome everyone's opinion.
Thank you my FB friends. I can say that I know all of my FB friends and that I have "friended" you because you have & had a special place in my heart, and were a part of my wonderful magical life growing up or part of my adult life. I love you all.
Jeff Adamez
- By admin
- 25/07/2013
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Richard Allen Smith
Billion Dollar Club: Coldwell Banker United, REALTORS® Ranks as One of Nation's Top-Producing Brokerage Firms in RISMedia's Power Broker Report
- Richard A. Smith CEO of Coldwell Banker United, REALTORS operates in 59 locations as Coldwell Banker United, Realtors® in Texas, Florida, South Carolina and North Carolina. The company engages in the sale and leasing of residential, industrial, commercial and farm and ranch realty. The company is the largest independently owned real estate company in Texas in revenue units and is ranked by RealTrends as the 8th largest real estate firm in units in the nation at the end of 2013. It is also the largest company in Gross Commission Income and Units in the Coldwell affiliate network. Education: Bachelor of Science in Mechanical Engineering from Texas A&M University, Class of '59. Corps of Cadets, Squadron 22. Military: Captain, U.S. Air Force, four years active duty Family: Wife - Norma Marie (maiden name Dansby) Children - Three daughters: Sandra, born November 25, 1960 Diane, born January 20, 1963 Sharon, born April 17, 1966 Nine grandchildren
According to "REAL Trends®" a leading industry trade publication, the company, in 2012, was ranked #8th nationally among all real estate companies in transaction sides and #9th nationally among all real estate companies in sales volume.
The "REAL Trends®" report is a compilation of nationwide studies of leading real estate companies that represent a comprehensive collection of data assembled on the leaders of the residential brokerage industry.
Coldwell Banker United, Realtors® currently operates 59 residential branch offices and three commercial branch offices with a sales force averaging 2,000 sales associates and over 275 employees.
The company closed 25,022 transaction sides in 2013 with a sales volume of over $5.7 billion.
According to RIS Media's Power Broker Report for 2013, Coldwell Banker United, Realtors® ranks #8 in transaction count and #12 in sales across the Nation.
The company is a principal broker with Cartus, a company which provides relocation services to dozens of the nation's top corporations and has the largest market share of any relocation company.
This association produces thousands of referrals and third-party listings to the company.
The company provides access to the services of Coldwell Banker Mortgage in all of its residential branch offices.
The company offers title insurance through United Title in selected Houston, Texas markets.
In fact it was just the start of a brutal, calculated plot to disinherit and take away everything that their mother & I had planned and worked very hard for in the event of one or both of our deaths - to leave an estate for our children and the surviving parent.
An estate the we built on our own, with insurance policies and real property that we had acquired over our 21 years together as husband and wife, and as the parents of our children we structured the estate to keep any financial hardship from befalling either of us in the event of our deaths.
Because less than 12 hours after her death, I was told EXACTLY what was going to happen if I attempted to raise MY CHILDREN after their mother's death.
1 “Housejacking” can
result if banks mishandle files, lose payments, or even engage in mass perjury
to produce documents supporting illegal foreclosures.
2 Yet, despite a
well-documented history of gross negligence and outright fraud, over half of all
states still allow banks to foreclose on homes without first going to court or offering any proof that the foreclosure is valid.
3 In the majority of these
“non-judicial foreclosures,” a trustee stands in for the judicial system and is
meant to act as a neutral party to the transaction—with duties to both parties—
to assess the legitimacy of the bank’s claim.
4
This dependence on a “neutral”
trustee is misplaced because trustees present no meaningful safeguard against
wrongful foreclosure.
5 Offering any proof that the foreclosure is valid.
3 In the majority of these
“non-judicial foreclosures,” a trustee stands in for the judicial system and is
meant to act as a neutral party to the transaction—with duties to both parties—
to assess the legitimacy of the bank’s claim.
4
This dependence on a “neutral”
trustee is misplaced because trustees present no meaningful safeguard against
wrongful foreclosure.
- Wrongful Foreclosures Abound 111B.
- THE MODERN MORTGAGE ERA AND NON-JUDICIAL FORECLOSURE .......... 116A.
- The Rise of Private Recordings and the Resulting Loss of Land Recording Transparency:Mortgage Electronic Registration Systems .. 1224.
- NON-JUDICIAL FORECLOSURE AND THE ROLE OF TRUSTEES 126A.
- Non-Judicial Foreclosure ... 126B.
- The Current Role of Trustees in Non-Judicial Foreclosures .......... 129C.
- The Structural Dynamics That Prevent Trustees From Remaining Neutral 3IV.
- RE-ENVISIONING THE ROLE OF THE TRUSTEE ........ 136A.
- Legislation 1.
- Record Requirement b.
- Insulation From Other Parties .
- Prohibition of Foreclosure If Legal or Factual Disputes Arise .... 140d.
- Specific Factual Scenarios That Are Ripe for Pursuit 150C.
- Ethics Complaints 1501.
- Ethical Rules On Which to Base Complaints Against Trustees
- CONCLUSION 154
Nonetheless, she receives a notice from the mortgage company that it is initiating a foreclosure proceeding.
The proceeding does not require a judge, jury, or court.
Rather, a designated trustee is the only neutral party who stands between the homeowner and an illegal, wrongful foreclosure.
However, there is one problem: under current law, the trustee is unregulated and almost always financially connected to the same bank that errantly initiated the foreclosure.
The result is almost always the same: the homeowner loses her home.
This problem, to which advocates sometimes refer as “housejacking,” is the result of the modern foreclosure system’s failure to provide meaningful investigation into the mistakes of the foreclosing banks 1. Ethical Rules on Which to Base Complaints Against Trustees
The Cox court pointed out that, although Washington allows attorneys to both represent banks and serve as the trustee, the attorney must still not engage in activity prohibited by the state’s code of professional responsibility.336
The court further suggested that the trustee in Cox, who served the interests of the bank to the detriment of the homeowner, may have violated the American Bar Association’s Model Rules of Professional Conduct (MPRC).337 According to section 5-105, “[a] lawyer shall not continue multiple employment if the exercise of his independent professional judgment in behalf of a client will be or is likely to be adversely affected by his representation of another client, or if it would be likely to involve him in representing differing interests.” 338
The court’s reference to this rule suggests an interesting possibility.
The court implied that when an attorney elects to become a trustee and thereby takes on a legal fiduciary duty to a borrower, the attorney becomes the legal representative of the borrower.339
Although the court did not identify at what point the borrower and the trustee enter into an attorney-client relationship, guidance is available.
Typically, courts look to the client’s intent in determining if an attorney-client relationship exists.340
If this is true, then a borrower, who contacts a trustee knowing that the trustee is a lawyer and that the trustee is required to help him, may have a reasonable expectation that the trustee is acting as his lawyer. Similarly, the MRPC dictate how the trustee should interact with the borrower, even absent an attorney-client relationship.
MRPC 4.3 explains that [i]n dealing on behalf of a client with a person who is not represented by counsel, a lawyer shall not state or imply that the lawyer is disinterested.
When the lawyer knows or reasonably should know that the unrepresented person misunderstands the lawyer’s role in the matter, the lawyer shall make reasonable efforts to correct the misunderstanding.
The lawyer shall not give legal advice to an unrepresented person, other than the advice to secure counsel, if the lawyer knows or reasonably should know that the interests of such a person are or have a reasonable possibility of being in conflict with the interests of the client.341
Under this rule, if the homeowner is represented, the attorney should not speak with him. At the same time, the trustee still owes a duty to the homeowner and must provide him with information.
If the homeowner is unrepresented, the 336. Cox, 693 P.2d at 687. 337. Id. (discussing the Washington professional conduct rules).
338. MODEL CODE OF PROF’L RESPONSIBILITY DR 5-105 (1980). 339. Cox, 693 P.2d at 687. 340. Douglas K. Schnell, Note, Don’t Just Hit Send: Unsolicited E-Mail and the Attorney-Client Relationship, 17 HARV. J.L. & TECH. 533, 540 (2004). 341.
MODEL RULES OF PROF’L RESPONSIBILTY R. 4.3 (2012).
trustee must disclose its adverse interests, and the only advice it may give to the homeowner is to seek counsel.
Telling the homeowner to reinstate the loan by paying the back due amounts if the homeowner does not believe he is in default could be interpreted as giving legal advice.
Telling the homeowner to call the bank for more information seems equally inappropriate.
The ethical duties related to unrepresented parties illustrate the untenable schizophrenia that exists when an attorney for the bank is also charged with being the neutral trustee in a disputed matter.
The formation of an attorney-client relationship between the borrower and the attorney-trustee poses similar challenges.
For example, if the debtor becomes the attorney-trustee’s client, the trustee runs the risk of breaching the duty of confidentiality if it shares information from the borrower with the bank.342
Similarly, the attorney-trustee’s failure to provide advice to the borrower could constitute malpractice.
Finally, it is unclear whether the inclusion of an “attorney fee” or a “trustee fee” in the homeowner’s deficiency creates an attorney-client relationship between the borrower and the attorney-trustee. Interestingly, the most obvious conflict the attorney-trustee may have is with the bank.
The attorney is required to represent the bank “zealously” so long as it is “within the bounds of the law.”343
At the same time, the attorney-trustee is required by most states to be a neutral party between the bank and the borrower.
If the attorney-trustee took this duty seriously, it would have to disclose this conflict to the bank.344
By disclosing that it could not advocate for the bank, or even accept the bank’s story as true if challenged by a homeowner, the attorneytrustee would likely convince the bank it needed new counsel.
However, there is no evidence that any attorney-trustee has ever made such a disclosure to any bank.
This speaks to the fact that most trustees either do not see the conflict or do not care that a conflict exists.
These issues can be addressed without questioning the ethics of any specific attorney.
Rather, attorneys should pose ethical questions to and seek advisory opinions from their state bar associations and ethical boards in order to determine what an attorney-trustee may and may not do.
The attorney could ask:
1. May a neutral attorney-trustee decide an issue in favor of its client and against a homeowner, to whom the attorney-trustee owes a fiduciary duty, if there is a dispute between the parties as to law or fact?
2. May an attorney hold a duty of zealous advocacy for one party while simultaneously owing a duty of neutrality to a party whose interests 342.
See MODEL CODE OF PROF’L RESPONSIBILITY DR 4-101 (1980) (listing the standards governing the duty to preserve a client’s information). 343. See MODEL CODE OF PROF’L RESPONSIBILITY EC 7-1 (1980). 344.
MODEL CODE OF PROF’L RESPONSIBILITY EC 5-16 (1980). are adverse to the attorney’s client? Would this require written disclosure to one or both parties?
3. May a trustee for a homeowner in a foreclosure also appear in court to advocate against the homeowner and in favor of foreclosure?
4. Does an attorney who serves as a trustee and has a legally recognized fiduciary duty to a borrower enter into an attorney-client relationship if the borrower shares information with the trustee or seeks advice from the trustee because the he believes that the trustee is an attorney and is required to be fair to the borrower?
5. If an attorney agrees to serve as a trustee in a foreclosure, and, in the process of that foreclosure, obtains information from a borrower to whom the trustee owes a fiduciary duty, is the trustee prohibited from later using that information in a subsequent action against the borrower?
6. If an attorney agrees to serve as a trustee in a foreclosure, and, in the process of that foreclosure, obtains information from a borrower to whom the trustee owes a fiduciary duty, is the trustee prohibited from later representing another party against the borrower in a related transaction?
In addition to advisory opinions, attorneys who commit ethical violations could be reported to the state bar association or ethics committee.
Adverse opinions in this setting could deter future misconduct.
Similarly, if attorneys continue to engage in practices prohibited by advisory rulings, there would be little reason for them to escape punishment.
Overall, it is likely that some states would issue advisory opinions that would be inconsistent with some current practices, which could help to eradicate some of the questionable conduct of modern trustees. 2.
A Real Example On Which to Build This proposal is more than theory.
The North Carolina State Bar has already considered the ethical duties of the attorney-trustee in a foreclosure action.
The Ethics Committee concluded that “[s]o long as the attorney serves as trustee, he may not be involved in any proceeding arising from or connected with the deed of trust.”345
More specifically, the Committee explained that [t]he proper rule is that the trustee/attorney cannot ethically represent either the lender or the borrower in a role of advocacy at any state of the foreclosure proceeding.
The trustee in his fiduciary capacity is charged with the duty of preserving the interests of both, and in that sense he represents both. If, during the existence of the fiduciary relationship, he should act in an adversary capacity for either, he 345. N.C. R. PROF’L CONDUCT 82 (1990).
would violate his fiduciary duty to the owner, and this would offend the Code provision against conflict of interest.346
The problem is that the Ethics Committee provided this guidance in 1978.347 Consequently, there is a pressing need for an examination of the ethics of the dual role of the attorney and the trustee to be in the modern mortgage era.
Clear inquiries and precise answers would have an immediate impact on the behavior of trustees.
Although it is difficult to predict what ethics boards will say in response to questions about relatively new, sometimes poorly understood situations, it seems likely that, at a minimum, ethics decisions could serve as a check on the most egregious behaviors of some attorney-trustees.
V. CONCLUSION
Presently, the very banks that collapsed the world economy are being trusted, with no judicial oversight and no meaningful neutral party, to remove people from their homes.
The same companies responsible for robo-signing, derivatives, MERS, the bailout, and exotic loans that were designed to fail are trusted to carry out foreclosures fairly.
The banks’ actions go unchecked because trustees are unregulated and, in some cases, unfair.
There is no doubt that this system is broken, and that costs of wrongful foreclosures are immense.
Fortunately, there are some simple solutions that can convert trustees from potential accomplices to wrongful foreclosures into meaningful parts of the solution. Legislation, litigation, and ethical inquiries are all means to accomplish this goal.
Reforming the role of the trustee protects property rights, promotes certainty, reduces the number of wrongful foreclosures, and encourages modifications of loans.
These results are good for homeowners, but, more importantly, are net positives for the broader economy and society as a whole.
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Fraudulent & Wrongful Foreclosures: by Richard A. Smith, CEO Coldwell Banker United Can We Trust Trustees? Proposals for Reducing Wrongful Foreclosures
John E. Campbell
University of Denver Sturm College of LawOctober 19, 2012
Catholic University Law Review, Vol. 63, 2014 U Denver Legal Studies Research Paper No. 13-22
In 27 states non-judicial foreclosure is the primary method of foreclosure. Non-judicial foreclosure means that a secured party may sell the property of a homeowner without ever providing proof to a court that default has occurred or that the foreclosing entity has standing to foreclose. In place of a court, the foreclosing entity provides documents to a trustee who then carries out the task of providing notice to the homeowner of default, carrying out a foreclosure sale, and deeding the property to the new buyer. In this process, the trustee is the only neutral who oversees the forced transfer of one party’s property to another.
Non-judicial foreclosure has long been justified as a simple way to carry out foreclosures. Historically, there was little chance that there would be any dispute about 1) whether payments were made, or 2) who had the right to foreclose. Further, because the lender almost certainly valued the stream of revenue from mortgage payments more than it did the chance to foreclose, to the extent that there were payment disputes, they could often be resolved. As a result, the trustee’s job was uneventful and could be carried out by a sheriff or a private citizen.
Today, as a result of the mortgage crisis – including sloppy underwriting, rampant securitization, poor record keeping and questionable legal practices regarding recording – the fundamental principles that supported non-judicial foreclosure in its current state are no longer present. The result is that antiquated laws are being applied to novel new foreclosure problems. The only potential neutral in this new frontier is the trustee. The fundamental problem with this is that these trustees are inadequate to ensure just resolutions both because 1) they are untrained and unregulated, and 2) they are almost exclusively loyal to the banks that initiate foreclosures.
The lack of training and regulation is prevalent. States do not require trustee to be licensed, and there are usually no statutory guidelines about trustee responsibilities. The result is that trustees carry out the important task of the forced transfer of one person’s property to another as the only neutral, but they are ill-equipped to serve as that neutral. The need to consider whether the note has been transferred, whether state recording laws have been complied with, whether default has occurred under the deed of trust, whether robo-signed documents are present, and a host of other questions that relate to whether foreclosure is appropriate are beyond what most trustees can or will consider. The result is that trustees rely upon the representation of large institutional banks, the same banks that repeatedly have been shown to be sloppy and/or fraudulent in their record keeping, payment tracking and foreclosure initiations.
The second issue identified above is that many trustees are simply not neutral at all. In many cases in most states, the trustees in non-judicial foreclosures are either the attorney for the bank that is foreclosing or they are employed by a company that is owned by attorneys for the bank. A cottage industry, sometimes referred to as foreclosure mills, has sprung up. In these mills, attorneys churn out foreclosures in mass at bargain, bulk prices. These same attorneys may own title companies that do the title work related to foreclosure, they may serve as debt collectors for the bank prior to or after foreclosure, and they often represent the same banks in actions to remove homeowners from their homes after foreclosure. As a result, there are financial incentives for the trustees to keep the repeat business of the banks, both because they make money in the foreclosure process, and because they often make additional money representing the bank in related foreclosure matters before and after the foreclosure. These close financial ties between the bank and the trustee, the ethical duty to represent the bank zealously (despite a duty to be neutral to the borrower), and the need to process foreclosures quickly (as opposed to conducting investigations into the bona fides of the conditions needed to justify foreclosure) all conspire to make it highly improbably that the trustees can fulfill their duty of neutrality.
The results are shocking and troubling. Reports from throughout country are emerging that suggest that wrongful foreclosures, which amount essentially to home theft, are occurring regularly. These range from foreclosures carried out by parties without standing to foreclosures in situations where there was no default at all.
This article details the history of mortgage era and non-judicial foreclosure, focuses on the law relating to trustees, identifies the current problem with trustees, details real-life scenarios that have played out as a result of unchecked or biased trustees, and then proposes changes to trustee law and practice. Specifically, this article argues that concrete reform regarding the role of trustees, including who may serve and how they are regulated, can produce a ripple effect that prevents the most egregious and erroneous foreclosures from proceeding by shepherding some of them into court and encouraging the bank to consider alternatives to foreclosure in other cases. This article offers suggestions to improve the situation by focusing on three distinct arenas and methods: 1) legislative reform, 2) potential impact litigation, and 3) application of existing ethical rules that might apply to attorney trustees.
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- By admin
- 25/07/2013
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- Metronic, Keenthemes, UI Design
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- By admin
- 25/07/2013
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- Metronic, Keenthemes, UI Design
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