DEBUNKING THE MYTHS OF FORECLOSURE LITIGATION

I am often asked by those who are affected by foreclosure and desire to access the legal
system to right the wrongs they believe committed by banks and loan servicers certain
hypothetical questions. The disclaimer here of course is that these answers being provided herein
are based solely on my own personal experience and my own observation as an attorney working
on actual cases of foreclosure in Washington, and not anywhere else. I further disclaim that by
providing answers to these generic and hypothetical questions, I am in no mean intending for
them to be legal advice to any specific individual or entity. There is no attorney-client
relationship being created by the communication of information here between myself and my
law firm with anyone. No one should act upon any such information without first seeking
qualified professional on your specific matter. The hiring of an attorney is an important decision
that should not be based solely upon information posted on the internet or advertisements.
CAN FILING A LAWSUIT AT THE LAST MINUTE STOP THE NONJUDICIAL
FORECLOSURE?
The answer is a qualified yes. Filing a lawsuit at the last minute can stop the nonjudicial
foreclosure sale. However, this is a very expensive proposition and carries with it certain risks.
No lawyer that I know of like to file a lawsuit at the last minute because what she has to do is
drop everything else to tend to this emergency. Yet, the bigger risk associated with filing a
lawsuit to stop the sale is you will be required to make payments to the court registry during the
course of the lawsuit. The amount is either the mortgage payment that you couldnt make
originally, or the fair rental value of the property. Based on the insistence of lawyers representing
banks, judges have been known to impose a year or two worth of property taxes and hazard
insurance in addition to the monthly payment. That being the case, filing a lawsuit on an
emergency basis is not helpful but hurtful to your situation, which is already dire.
IS IT TRUE THAT ONCE THE LAWSUIT IS STARTED, THINGS WILL SLOW
DOWN?
The opposite actually happens. Filing a lawsuit initiates a case schedule in most courts.
This case schedule has deadlines for your lawyer and these deadlines are very rigid. Unless the
opposing lawyer agrees or the court permits, your lawyer must file disclosures, send out written
discovery, depose witnesses and perform other activities pursuant to the deadlines. And all of
these activities cost money. In addition to the attorney fees, you are responsible for the costs.
Because you often have to name multiple entities as defendants and because most witnesses will
likely be located out-of-state, your lawyer has to depose them where they are at, or via electronic
means which would significantly increase the costs of the lawsuit.

DOES FILING THE LAWSUIT GIVE ME MUCH MORE TIME TO FIGHT THE
FORECLOSURE?
The short answer is no. Foreclosure resistance cases get dismissed out of court very often
upon a motion to dismiss or a motion for summary judgment brought by the opposing lawyers.
Very often, your lawyer must respond to dispositive motions brought by more than one
defendant at any given time. Based on a simple survey of orders issued on foreclosure cases, one
can see that federal courts judges in Tacoma are more prone to dismiss than those in Seattle, and
even within the Seattle Division, some federal court judges dismiss at a much higher rate than
their colleagues. While the federal court judges take a bit of time to issue the order of dismissal,
the majority of state court judges grants summary judgment in favor of the banks and foreclosing
trustees and dismiss these lawsuits on the day of the hearing. Thus, despite having to spend
thousands to initiate the lawsuit but barely able to obtain discovery, many homeowners find
themselves being dismissed out of court and facing another round of foreclosure. In that sense,
litigation can only serve as a tiny Band-Aid being placed on an open wound where blood is
gushing out.
DO I HAVE ANY FINANCIAL EXPOSURE AS THE PLAINTIFF FILING THE
LAWSUIT?
The answer is yes. Lawyers representing banks and trustees have been very quick to pick
up on the judiciarys negative reaction to lawsuits brought by homeowners and have used it to
their advantage. In addition to filing motion to dismiss and motion for summary judgment, these
lawyers have become much more aggressive in their effort to prevent homeowners from
accessing the court. In particular, RCO Legal P.S., the sister law firm of Northwest Trustee
Services (NWTS), has been filing anti-slap motions urging judges to impose $10,000.00
penalty and attorneys fees against any homeowner who dares to challenge their business
practices. In the context of filing this motion in one of my cases (Matyuk v. NWTS, Snohomish
County Superior Court Case No. 14-2-07227-7), Josh Schaer, the RCO lawyer representing
NWTS, has told me that his client will never pay and that my client will run out of money.
While I could chalk his statements up to posturing or arrogance, I do believe that Mr. Schaer has
good reasons to be so certain of his companies success in nullifying homeowners due process.
At the hearing, Judge Bruce Weiss denied Mr. Schaers anti-slap motion but refused to grant my
client any attorney fee for having to oppose the same. The judge held that the motion brought by
Mr. Schaer was not frivolous and that he had been swayed by Mr. Schaers argument. Imagine if
the judge was not just swayed but completely convinced of Mr. Schaers argument; my client,
who already lost his home to foreclosure, would have to pay a penalty of $10,000.00 and
attorneys fees because he had the audacity to question the business practices of the largest
foreclosure mill in the Northwest. I as the attorney of record would be exposed to sanctions for
bringing the lawsuit on behalf of my client. The natural result is fewer lawyers would be
inclined to undertake representation of homeowners in foreclosure.

IS MY CASE STRONG BECAUSE IT HAS A MERS ASSIGNMENT?

Thousands of words have been written by attorneys and judges regarding the role of
MERS and the countless MERS assignments recorded in the public records (yes, MERS
assignments are still being recorded as we speak). However, in Washington, judges have
consistently found that: 1) homeowners do not rely on MERS assignments actively (most
homeowners were not aware of MERS prior to foreclosure and had never been contacted by
MERS); 2) MERS does not actively command the foreclosure, and 3) there is no injury or
damage being caused (directly) by the MERS assignment. Again, the opposition is quick to
point out that you are not a party to the assignment and thus cannot challenge it. Mr. Fred
Burnside, of Davis Wright Tremaine, lawyer for MERS, has represented to the courts repeatedly
that the MERS assignment is never necessary to conduct foreclosure but it is being recorded to
serve a business purpose of his client. In making such representation, Mr. Burnside has
neglected to explain why the recording fee of the assignment is included within the amount to be
cured by the homeowner as stated in the notices of default sent out by the trustee companies. If
MERS assignments are recorded only to serve MERS business purpose and MERS financial
gain and not necessary to foreclose, shouldnt MERS have to pick up the tab?
CAN I USE THE SECURITIZATION AUDIT (THAT I PAID LOTS OF MONEY FOR)
AS EVIDENCE IN MY LAWSUIT?
I have yet to come across a Washington appellate decision, federal or state, where the
court has held faulty securitization operates to invalidate the loan or nullify the ability to
foreclose on the collateral. If anyone has the citation to such a case or cases, I would love to
know. I have attended training and read up on securitization and I am capable of articulating why
failed securitization should matter in the context of foreclosure. Yet, based on how quickly
judges dispose of foreclosure cases in our state on grounds other than securitization, I would not
make securitization the center of my argument. The opposition has made the point repeatedly
that the homeowner-borrower has no standing to challenge any contractual arrangement which
she is not a party of. Judicial opinions in Washington have been dismissive of defective
securitization through their finding that since every entity can act as an agent of every other
entity, the missing links in the chain of assignment of mortgage loans do not present a problem
for the foreclosing entity.

HOW EFFECTIVE IS THE ARGUMENT THAT THE LOAN HAS BEEN PAID OFF
ALREADY! OR THEY COMMITTED FRAUD SO I DONT HAVE TO PAY IT
BACK!
I have seen judges getting red in face with anger and raising their voice at us as consumer
lawyers in their belief that all we are after is a free house. And I have heard some homeowners
say that if they cant have a free house, then the bank should not get a free house either via
wrongful foreclosure. This free house rhetoric needs to be removed from the debate because
all it does is to obfuscate the real issue. If the loan was in fact paid in full via credit default swap
or insurance or some other devices, the payment was not made for your benefit and therefore you
cant benefit from that payment. Getting a subprime loan based on your signature on the
application that said you made $15,000 a month when you in fact did not make that kind of
income is not fraud. Finally, if for other reasons, you believe the origination of the loan was
fraudulent, then you should have dealt with the problem then rather than to raise fraud years later
when facing foreclosure.
WHAT ABOUT ROBO-SIGNERS?
The exposure of Linda Green and robo-signers by 60-Minute in 2011did not deter banks
from engaging in the practice of manufacturing evidence for foreclosure. If anything, these
entities and their lawyers have been emboldened in their quest to speed up foreclosure process.
They are now relying on robo-testifiers or professional testifiers whose job is to sign sworn
declarations and to testify at depositions, hearings and trials concerning the substance of
foreclosure documents. Despite strenuous objections made by consumer lawyers, judges have
accepted testimony from these actors readily and some have even commented that their
declarations are in fact trustworthy. Strangely enough, even concerning the same professional
testifier, one judge can be leery about the veracity of his testimony while another judge readily
accepts it at face value. This is the case of Charles Boyle serving as a witness/declarant for
OneWest Bank. In McDonald v. OneWest, 929 F.Supp.2d 1079 (W.D. Wash. 2013) Federal
District Court Robert Lasnik, who did not accept Mr. Boyles statements in a declaration but
required Mr. Boyle to appear in person, expressed in his written opinion that: Mr. Boyle's
declarations consist of sweeping statements, a few of which may be within his ken and
admissible, but most of which are assuredly hearsay. When he was asked to sign a declaration in
this case, he thought he was responding on behalf of OneWest and therefore felt justified in
questioning co-workers, running computer searches, and reviewing other sources before
reporting their statements as his own. Nothing in his declarations would alert the reader to the
fact that Mr. Boyle was simply repeating what he had heard or read from undisclosed and
untested sources. When his statements turned out to be untrue, Mr. Boyle conveniently blames
inaccuracies in the underlying documentation, computer input errors, or faulty reporting.
A year later, in the case of In re Butler, 512 B.R. 643 (W.D. Wash. 2014), involving the
same defendant loan servicer OneWest, and the same professional witness, Charles Boyle, the

bankruptcy judge, Marc Barreca, accepted Mr. Boyles sworn declaration at face value and
commented that the borrower/homeowner did not submit any evidence of her own to suggest
that the facts offered by Boyle and Campbell are untrue, or otherwise dispute their testimony.
Reading the opinions written by these two judges who are housed in the same federal courthouse
regarding the same professional testifier who rendered evidence on behalf of the same defendant
loan servicer, only one logical conclusion can be drawn, which is, Mr. Boyles testimony, like
fine wine, apparently was improving with time.
CAN I USE CASES FROM OTHER STATES IN SUPPORT OF MY ARGUMENT?
You can use almost anything from anywhere to support your argument that the
foreclosing entity does not have the legal right to foreclose on your home. The question is what
kind of weight Washington courts will give these sources. My experience has been that neither
decisional laws from other states nor documented misconduct by banks and loan servicers had
resulted in any discernible difference in the way our courts decide foreclosure issues, especially
at the trial court level.
CAN I SUE FOR MILLIONS BECAUSE I HAVE SUFFERED SERIOUS EMOTIONAL
DISTRESS AND THESE ENTITIES SHOULD BE PUNISHED AS A RESULT OF
WRONGFUL FORECLOSURE?
The short answer is yes. In January of this year, Judge R. Brent Elliott, of Clinton
County, Missouri, awarded $2.9 million in punitive damages against Wells Fargo Home
Mortgage Inc., and quieted title in favor of the plaintiff-homeowner based on two faulty
foreclosures. The judge wrote The evidence established that Wells Fargos intentional choice to
foreclose arose from own financial incentives In other words, in this case, a powerful
financial company exerted its will over a financially distressed family in Clinton County,
Missouri. The result is predictable. Plaintiffs were severely damaged; Wells Fargo took its
money and moved on, with complete disregard to the human damage left in its wake. In April,
a jury in Chicago awarded Alena Hammer $500,000 in actual damages including mental anguish
and emotional distress, plus $1.5 million in punitive damages under the Illinois Consumer Fraud
Act for misconduct in loan servicing. (http://www.satprnews.com/2015/04/22/2-millionunanimous-jury-verdict-2/).
Yes, you can sue and get millions for foreclosure misconduct. However, there is a
qualifier to my answer, which is, not yet in Washington! The general sentiment among many
judges in Washington is that homeowners losses and suffering are NOT attributed to corporate
wrongdoings. Rather, these losses are caused by the economic downturneffectively
disconnecting the economic downturn from corporate wrongdoings. In particular, Washington
courts have unified in the holding that if you are still in title of your house and occupying it
without making payments, you havent been damaged and there would be no recovery, including
recovery for emotional distress.

I know of only one case which went to trial where the homeowners, who resisted
foreclosure for four years and had yet to lose their house to trustees sale, were awarded a little
under $50,000.00 in actual and treble damages under the Washington Consumer Protection Act
by the trial court. Retiring bankruptcy judge Karen Overstreet also awarded the homeowners
their attorneys fees and costs to be paid by the trustee company, NWTS. In re Meyer, 506 B.R.
533 (W.D. Wash. 2014). Having lost at trial, NWTS appealed the decision to the district court
next door. Federal District Court Judge Ricardo Martinez quickly reversed the trial court. Meyer
v. U. S. Bank N.A., 2015 U.S.Dist. LEXIS 47745 (April 9, 2015). His Honors reasons were:1)
the trustee company did not have a duty to investigate the information given by the loan servicer,
and 2) violations of the Deed of Trust Act committed by NWTS were only technical, and, 3)
the homeowners cannot show that they were prejudiced or deceived by these technical
violations. In his written opinion, Judge Martinez quoted his colleague, Judge Richard Jones, for
the expression that: "[t]he court can chide Defendants for abysmal customer service in a
business tied intimately to its customers' financial and emotional well-being. The court cannot,
however, change the basic truth that if a homeowner cannot pay her mortgage, she will
ultimately lose her home." (Citing to Singh v. Federal Nat. Mortg. Ass'n, 2014 U.S. Dist.
LEXIS 15745, 2014 WL 504820, *7 (W.D. Wash. 2014)).
WHAT FACTORS DETERMINE THE OUTCOME OF MY LAWSUIT?
It is extremely important to know what judges believe and how they feel about the
subject of foreclosure because these human factors are what really drive the outcome of your
case and not technical analysis of the facts or the law. It is logical to expect that the judges who
believe in corporate accountability to hold these financial institutions responsible for their
conduct. By contrast, judges who feel you as the homeowner-borrower should be responsible for
your own economic failings will expect you to either cure your default, or let go of your home. If
your lawyers advocacy of your legal position is viewed by the court as pesky distractions or
mere delay tactics, then you will not prevail. Given the current state of play, a more practical and
productive approach to resolving mortgage default is to deal with the default early and think of
litigation only as a last resort.
Ha Thu Dao, Esq.
Grand Central Law, PLLC
787 Maynard Ave South, Seattle, WA 98104
727-269-9334
youremylawyer@gmail.com
.