US Bank Bails on Foreclosure Constitutionality Hearing

US Bank has decided to agree to the injunction against its foreclosing on Lisa Brumfiel’s home.

 

Why?  US Bank didn’t want to face a hearing in Federal Court on the constitutionality of Colorado’s foreclosure process.  Judge William Martinez had set a hearing on Colorado’s Rule 120 hearings for Wednesday May 15, 2013.

 

In Colorado a court must approve a foreclosure sale following a Rule 120 hearing.  The only two issues litigated at the hearing are whether there is a default on the note and whether the borrower is in the military.  However, the issue of standing must always be addressed in any court proceeding.  Here a company can be in court if it is the holder of the borrower’s note.

 

Unlike other states, Colorado does not require a mortgage company to prove they hold the original note on a mortgage.  Colorado statutes section 38‑38‑101 allows a foreclosing company to produce just a copy of the note along with a statement by its attorney that the company is the holder of the note.

 

Ms. Brumfiel was to argue to the Court that not allowing a borrower to contest the validity of the holder’s evidence of ownership is a violation of the Due Process Clause of the 14th Amendment to the United States Constitution.

 

If Judge Martinez had ruled that Rule 120’s attorney statement provision is unconstitutional, foreclosing in Colorado would no longer be a slam-dunk.

 

Congratulations to Ms. Brumfiel, but I’m sure we’ll be back in court.  US Bank may have dodged this attempt at justice for Colorado’s homeowners by giving up on one foreclosure, but we’ll keep fighting.

Federal Judge Halts Foreclosure to Review Bizarre Colorado Law

A Federal Judge has temporarily halted a foreclosure in order to rule on Colorado’s unique and likely unconstitutional foreclosure law.

US District Court Judge William Martinez has set a hearing on Colorado’s qualified holder law for May 15, 2013.  Martinez will take arguments regarding the Colorado foreclosure statute allowing an attorney to state that his client has standing to foreclose on a property.

Colorado Revised Statutes, section 38‑38‑101(6)(a) states that proper evidence of an indorsement or assignment of a debt shall include the original indorsement or assignment or a certified copy thereof recorded in the county where the property is located.

Section 38‑38‑101(6)(b), however, allows for the presentation of a copy of the indorsement or assignment together with a statement by his attorney that the copy is true and correct.

A copy of the original note and deed can usually be obtained from the clerk and recorder’s office.  Anyone can go online and obtain such a copy, so that’s not conclusive evidence of standing.

In order to prove that the copy is a true and accurate copy of the original, not just a downloaded version, the court needs to hear testimony from someone who has first-hand knowledge regarding the original and copied versions of the documents.

Normally a witness can be examined about the veracity of his statements.  Simple questions about a note would include ‘when did you see the original?’, ‘where did you see the original?’, ‘when was the copy made?’, ‘who made the copy?’, and ‘have you compared the copy and the original side-by-side?’.

In Colorado, however, according to the State’s foreclosure statute, the court must accept the foreclosing party’s attorney’s statement as true.

Our Constitutional right to due process requires that we receive a reasonable process before other rights are denied.  This generally means that one who wishes to take something from me must show that he has the right to do so and I have a right to contest his assertions.

In the case of a foreclosure, the foreclosing party must prove that he owns the note on which he is foreclosing.  I have the right to contest his assertion that he owns the note.

In Colorado, a mortgage company can simply produce a copy of a note and have their attorney state that is a true and correct copy.  I cannot contest the attorney’s assertion of the truthfulness of the copy.

This is unconstitutional and needs to be removed from Colorado’s laws.  Borrowers’ rights under the Due Process clause to the US Constitution to examine any evidence put before the court must be restored.