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Miami judge warns big banks to stop playing cruel foreclosure games with people’s homes

Julie Nicolas and her three sons – Jon, Alex and Mark – in their North Miami Beach home at Christmas 1997.

By Noreen Marcus, FloridaBulldog.org

Miami-Dade Circuit Court Judge Beatrice Butchko is warning national banking giants and their counsel they’ll pay a hefty price if they commit fraud or violate due process or ethics rules to drive mortgage debtors out of their homes.

On June 2 Butchko took the extraordinary step of accusing Bank of America and Bank of New York Mellon of criminal contempt for allegedly offering perjured testimony in a foreclosure. She scheduled both for arraignment at a Zoom hearing on June 25.

Also to be arraigned that day for criminal contempt is the banks’ lawyer, Nathaniel Callahan, a partner in the Fort Lauderdale office of the Akerman law firm.

Late Thursday, however, an appeals court put all proceedings in the case on hold while it considers arguments from the parties.

The banks and their lawyer allegedly lied about whether Bank of America is still involved in servicing a mortgage loan. If it is, defendant Julie Nicolas can introduce Bank of America documents that may prove the foreclosure was fraudulent.

In her order, Butchko laid out the options for the banks and Callahan. If they plead guilty, she’ll hold a sentencing hearing where they can present evidence of mitigating circumstances. If they plead not guilty, she’ll set the matter for trial.

foreclosure
Attorney Nathaniel Callahan

A contempt finding could result in “jail, adjudication, probation, a finding of unclean hands, monetary fines, injunctions, attorney’s fees, and/or other sanctions,” the order says.

Conviction would also trigger a Florida Bar ethics investigation into Callahan’s conduct. Callahan did not respond to email or phone messages from Florida Bulldog seeking comment.

Callahan’s Akerman colleagues reacted to the perjury accusation by asking Butchko’s supervisors on the Third District Court of Appeal to immediately order her off the ongoing case and all future cases with Callahan and his adversary, foreclosure defense lawyer Bruce Jacobs.

Akerman on the attack

The petition Akerman filed Tuesday accuses Butchko of “rubber-stamping” a contempt order that Jacobs drafted because she is “partial to Mr. Jacobs” and “he is in a special position to influence her.”

Miami-Dade Circuit Judge Beatrice Butchko

“There is a clear appearance of impropriety,” it asserts. “This Court should urgently hold Judge Butchko and Mr. Jacobs accountable for the harm they have unleased [sic] against Mr. Callahan. The media character onslaught alone could be irreparable,” the petition says.

Akerman’s petition offered no evidence to support its assertions.

The petition went on to note that Third DCA judges have twice referred Jacobs for Florida Bar ethics probes. In a disciplinary trial last month, he was found guilty of impugning the integrity of the courts by trying to disqualify two judges from hearing his foreclosure cases. The referee’s punishment recommendation to the Florida Supreme Court is expected next month.

‘This doesn’t fly’

Still, Butchko’s contempt action elevates the case of Bank of New York Mellon vs. Julie Nicolas. The judge is giving credence to what Jacobs and many others have argued for years: The predatory lending scandal of a decade ago has evolved into routinely abusive loan-servicing.

“This is the first time a judge has taken everything we said seriously and saw what was happening and said, ‘This doesn’t fly,’ ’’ said David Winker, a Miami lawyer who also represents defendants in foreclosure actions.

foreclosure
Attorney Bruce Jacobs

Defendant Nicolas, 58, a nurse and single parent, is trying desperately to hang onto her North Miami Beach home. She described many years of mortgage loan torment before her house was auctioned off in April.

Nicolas explained in an interview with Florida Bulldog that while she never stopped working, her employer held back her pay during a months-long audit. She had three sons to support and a commitment to her patients.

So she fell a few months behind on her monthly payments, prompting endless demands for loan modifications. The notorious subprime mortgage powerhouse Countrywide (now part of Bank of America) had originated her loan before it was bundled off to other servicers, each with its own complicated rules.

Meanwhile, a parallel process moved inexorably toward an end game of foreclosure, sale and eviction. No one ever offered to help Nicolas keep her home, she said.

Fear of a nighttime eviction

The company de jure would dangle a loan modification, use some bureaucratic excuse to snatch it away, and then move on to the next one. Faceless functionaries would reject the revised loan and repeat the process, refusing her payment attempts and finally auctioning the property, according to Nicolas.

The mortgage company “was always inconsistent on their side,” she said. “It was always, ‘You didn’t have this paper.’ Nobody called me. I would do another one, then another. Same thing, nobody called back.

“I’m always checking, I’m always calling. I’m just making sure we’re on the same page, but nobody’s ever on the same page,” Nicolas said.

“It’s more like they wanted the house,” she said. On paper they sold it for $260,000, but the new owner couldn’t take possession because Jacobs challenged the sale and blocked the title transfer.

Nicolas still could lose her home of 28 years. “I don’t get a good night’s sleep because I’m always thinking they might come in the middle of the night and say, ‘Get out,’ ” she said.

‘A little hope’

At the same time, Nicolas credits Jacobs and his staff with taking care of her and giving her “a little hope.” She knows that Butchko’s contempt action weighs in her favor.

And if Butchko grants a separate motion she is scheduled to hear Thursday, the day before the contempt arraignment, Nicolas’s mortgage will be stricken, allowing her to keep the house.

Jacobs is asking the judge to sanction the banks for allegedly defying a court order to answer questions about possibly fraudulent documents. Scrapping the mortgage would be part of the sanction, which could also spawn a second criminal case, this one for fraud.

Nicholas’s predicament is not uncommon, despite a 2012 deal between the U.S. Department of Justice and 49 state attorneys general, on one side, and the nation’s five largest mortgage servicers, Bank of America among them.

DOJ celebrated the record $25 billion settlement for its potential to end loan and foreclosure abuses like the modification dance Nicolas began at about the same time as the settlement.

The agreement “holds the banks accountable, it provides badly needed relief to homeowners, and it transforms the mortgage servicing industry so now homeowners will be protected and treated fairly,” Iowa Attorney General Tom Miller said in a DOJ media release.

Laura Wagner, executive director of the nonprofit Floridians for Honest Lending, tracks mortgage servicing abuses and publicizes individual horror stories. She doesn’t see them slackening.

“A lot of people assumed after the last crisis in 2008 and the changes at the federal level that they were going to solve a lot of problems, but unfortunately, I don’t think they solved enough problems to have a huge impact,” she said.

The average person who pays the mortgage on time every month doesn’t need to worry. “But if there’s any small hiccups in your life, if you ever have your loan go into forbearance, that’s when you start to see the flaws in the system,” Wagner said. “It can literally happen to anybody.’’

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Comments

17 responses to “Miami judge warns big banks to stop playing cruel foreclosure games with people’s homes”

  1. The judge is fair and I don’t believe that she will let them take her home after 28 years the loan banks are so not being compassionate to people you can’t even trust them

  2. This is very encouraging. A fair judge not bought out by the banks.

  3. I went thru this dance with Countrywide — over insurance escrow mix-ups on their end that tripled my monthly payments. I offered them a full payment settlement to clear up the mess and they wouldn’t take it. They sued to foreclose — and the case took 5 years. I too feel like they were in it for the real estate, not to simply service the mortgage …. they couldn’t even come up with a consistent pay off amount. After 5 years, they took what was originally offered, but only because their cut-rate lawyers couldn’t produce a copy of the mortgage document or prove how much was actually owed. I represented myself in court — a harrowing experience, but felt vindicated in the end. Hope the judge throws the book at these leeches.

  4. The banks normally don’t own the loans, they only service the loan(collect payments), and it makes very little each month…about $80 a month on a $200,000 mortgage.. But if it forecloses, it can add numerous default related fees. By pretending to offer loan modifications they can keep a person in this default hamster wheel paying those fees. Cruelly, the person believes they have a chance to modify the loan and keep the house when they don’t and never did. Thousands of people chased modifications and during that time their balance also went up so when they can’t pay anymore, the bank lawyers tell the judges that the homeowners are deadbeats who’ve been living for free, when the homeowners had been trying to work something out for months and years. Very cruel and most do not know that this happened to them. Happened to thousands of people.

  5. After 14 years we still battle. We have the truth and must hold the criminals accountable. The “Callahan” on our case is attorney Steven Dailey of Kutak Rock, he got caught lying to the judge yet wasn’t stopped from stealing our home.

    Bruce Jacobs is a good and honorable man and shall not be punished for having integrity.

    The writer is wrong about being safe if you are making on time payments too, I have friends who were “on time” and even with “paid off” homes and the criminal foreclosure Mills created fraud upon the courts and extrinsic fraud on the land records too and homes were given to the criminals.

    Until attorneys who steal homes are stopped noone is safe, not one homeowner is safe.
    Creating an appearance of standing to foreclose when there is none is a game of thieves with bar cards.

    How about still being billed for a fake mortgage by a foreclosure Mill who stole our home 5 years and continuing! Yep, they took our home and stole my identity and social security number, both are being illegally used to bill me as the criminals evade taxes. Steven Dailey, SPS, BONYM et al stole my home, my identity, my SS#, my title and all through a real estate fraud scheme for them to evade taxes and take everything my family owned.

    Wait for this next wave of millions of foreclosures on the horizon! Hopefully this judge does the right thing and stops the attorneys stealing this families home through fraudulent paperwork, enough is enough!!!

    http://www.abolishthebankers.com

    http://www.disleague.com

  6. Traci Lynn Brown Avatar
    Traci Lynn Brown

    I just wanted to reply i hope anyone that is involved with predatory lending or a foreclosure mill wins against them to save their home. I am a victim of a fraudulent eviction and foreclosure 3 years ago 05/12/18 in Phoenix, Arizona. I owned my home 15 years. I wanted to inform whomever said that if you’re a mortgage holder that has never missed a payment or being on time they won’t bother you. This is untrue. I never missed a payment and was on time the first 7 years of my mortgage until it transferred from M&T Bank to Bayview in August of 2011. When I became aware of my biggest financial nightmare on July 21, 2016, Bayview had enough time with their predatory accounting making me look as if I was a loser homeowner that cou ldn’t pay my bills. I fought them for 2 years, even taking them to Sandra Day Oconnor federal, court bc I couldn’t get assistance from any source and of course there I had my constitutional rights violated and lost my home on May 12, 2018. I still have very bad PTSD and haven’t been right since, but I try to put a face on for my son and granddaughter…. I will continue to post everywhere that Bayview Loan Servicing, LLC with the government backing them, literally stole my home, and did so with remorse for almost having me take my life. I believe today it is the most HENIOUS crime and they should (I don’t care how long it takes) be severly punished for doing this to innocent American lives!!!!!!!!!!!!!!

  7. I’m in Miami Dade, Florida and also fighting fraudclosure and going to trial on October 18, 2021. We need to unite in this fight against the fraud of these criminals. united we can help each other, educate other homeowners and have a voice to make changes in legislature to protect us!!!! we need to stop saying we need to do something and act on it!!!!!! Please join AMERICAN PROPERTY OWNERS NETWORK (APON) http://www.apropertyownersnetwork.org July 6, 2021 members get to attend a free zoom webinar by Neil Garfield.

  8. Robert Marley Avatar
    Robert Marley

    It about time an honest judge is taking action against the criminals. I could write a novel of their criminality, the banksters, and their hitmen lawyers. I am up against the same two criminal enterprises and the Judge is a breath of fresh air. Don’t forget how all this happened.

    Wall Street and Banks Murded the global economy through a single Ponzi scheme, asset securitization, toxic waste predatory loans, unsound and unsafe baking practice; ignored warnings from the OCC in 2003 not to issue these toxic waste loans, and then when the preverbal Sh*t hit the fan, they went to congress to beg for our taxpayer dollars to save themselves from their own wrongdoings, and instead of congress referring them to the DOJ for prosecution, they gave them our money with the promise to modify their toxic waste garbage loans. We all know how that turned out. My favorite quote to the Courts:

    “The most elementary conceptions of justice and public policy require that the wrongdoer shall bear the risk of the uncertainty which his own wrong has created”. See, Bigelow v. RKO Radio Pictures, Inc., 327 US 251 – Supreme Court (1946), See Package Closure Corp. v. Sealright Co., 141 F.2d 972, 979. That principle is an ancient one, Armory v. Delamirie, 1 Strange 505

    I applauded the Judge and have the utmost respect for her integrity. We need many more like her.

    You may quote this. From Massachusetts, Bob Marley, pro-se litigant

  9. Judson Witham Avatar

    https://vimeo.com/164729640

    https://vimeo.com/166017517

    The Racketeering is OFF THE RAILS

  10. Nadia Nasrawi Avatar

    So good feeling to know judge is acting fair and companionate to vulnerable. THANK JUDGE BEATRICE BUTCHCO. One of the kind beautiful inside out hope we find more like judge Beatrice

  11. SPSERVICING which services FREDDIE MAC LOANS is foreclosing after forbearance. The government and FREDDIE MAC forced small landlords to give tenants FREE RENT. FREDDIE MAC PROMISED that borrower’s payment would NOT be more than before forbearance and borrowers would NOT be required to pay all past due payments in a lump sum. Also repayment plans offered requires payments that are more than twice the previous payment.
    CFPB does not PROSECUTE LYING SERVICERS.
    THEY ARE ALL FORCING SMALL OLD LANDLORDS TO KILL THEMSELVES.
    THE EVICTION MORATORIUM IS STILL IN EFFECT DESPITE HAVING A VACINE, JOBS AVAILABLE, FREE MONEY GIVEN TO PEOPLE, MASK MANDATES LIFTED, COVID INFECTIONS NO LONGER A THREAT, JUDGES HAVE FOUND THE CDC EVICTIONMORATORIUM ILLEGAL.

    WHY IS GOVERNMENT STILL PERCUTING SMALL LANDLORDS AND ROBBING THEM OF THEIR SOLE SOURCE OF INCOME?

    THIS IS HITLER EVIL!

  12. Here is no debt, only lies about debt. Mortgages are not about borrowing money. Mortgages are a reference point to an original transaction which was securitized and extinguished many years ago. Home buyers make a promise to repay for INFORMATION about someone’s debt which happened in the past and does not exists. .
    Nobody maintain any accounts receivable where they deposit homeowners’ money. They are all stolen as revenue by Wall Street Investment Banks who also steal your homes as additional revenue.
    Here is no debt. Securitization is a lie. And so far nearly everyone, including homeowners, believes the lie.

    Each new “financing” results in a brand new string of securities sales — without retirement of the previous string of securities sales.Based upon market data, that each securities scheme produces $12 in revenue for each $1 transacted with homeowners. But that is only the first level.

    A single homeowner transaction is that each new refi or sale changes a few data points but does not change the single and only underlying transaction. That transaction was neither intended nor recorded as a loan on the books of account of investors, investment banks or even the named originator .

    Countrywide refused to take a full payment because they had nowhere to deposit it.
    The truth is that Wall Street is selling the myth of loans, not the actual loans, which are in fact thinly disguised incentive payments for homeowners to cooperate in creating the data reference points for the sale of securities to investors who have no financial interest in their transaction. Securitization means that an asset has been “securitized.” That means an asset has been sold in parts to investors. No such sale ever occurs in connection with homeowner transactions.

    Each time the property is subject to false claims of “refinancing” it starts a new scheme of securities sales that does not retiree the old one. And this is why the “shadow banking market” has gone from $0 to $1.4 quadrillion between 1983 and now. That dollar amount is “nominal value” because no financial transactions took place other than the issuance, sale and trading of derivatives based on falsely labeled “asset-backed” securities. It is not real money, which totals less than $100 trillion. But Wall Street has successfully sold the myth that it is real money when they say it is.

    The current economic infection plaguing the American economy is not the result of Wall Street grabbing a higher commission on transactions. Everyone thinks that but it isn’t true. It is the result of Wall Street inserting itself into the transaction as though it was a real party in interest and doing that with impunity and without any disclosure. This completely blocks free market forces from making corrections.

    Wall Street is hiding behind a carefully constructed myth of free markets. Wall Street does not disclose and carefully conceals the relevant and material information to the investors who buy certificates or the derivatives of certificates, nor the homeowners who think they are getting loans. In plain words, Wall Street is lying about all of the transactions that occur in relation to the trading and sale of securities that use the data rather than the ownership of asset-based transactions.

    Investors have come to believe that they have some sort of indirect interest in transactions with homeowners. that is false and they would defend any claim that asserted such a relationship because that would make them lenders subject to liability for violation of lending laws — something that continues to take place with rampant regulatory.

    In fact, investors are told that this is a way of lending “without risk” — without being a lender. They have sold the myth that by not showing up on the paperwork of any “Closing” with homeowners they are protected from loss, bankruptcy, or liability for noncompliance with laws governing transactions with borrowers and consumers.

    Investors are not told that by adopting that form over substance strategy, they have written a blank check and abandoned all rights to force anyone to comply with the conditions of their purchase of certificates. And while the promise to make payments to them comes from a big investment bank doing business under the name of a nonexistent trust, that promise is subject to the sole discretion of that investment bank who also does not appear as a lender, owner, creditor, holder of paper from any homeowner.

    Investors are told that the certificates are insured but they are not told that the proceeds of the insurance are paid to the brokers, not to them. Investors, like homeowners, are left with a hologram of an empty paper bag. The Wall Street “banks” are left with all the money regardless (and especially) if the value of the investment declines in an “event” declared in the sole discretion of the Wall Street securities brokerage firms that are not allowed to use the powers of both brokerage and commercial banking — something that was completely banned until the repeal of Glass-Steagal.

    The other group of investors are the homeowners who are brainwashed into thinking they are borrowers in a transaction that leaves them without a lender, without a loan account receivable and without anyone with legal authority to administer, collect or enforce a promise to pay that they issued without knowing that the transaction was simply the start of a new securities scheme in which oversized revenue would be generated far exceeding the transaction they thought was a loan.

    How many homeowners would have completed their transactions on the same terms if they knew that there was no liability for noncompliance with lending laws, there was no incentive to create a viable loan transaction, there were incentives for appraisal fraud and there were incentives for the transaction to”fail?”

    The entire jumble of convoluted rationales for the falsely labeled “Securitization” scheme has been the exercise of deceit and theft. The fact remains that once the money hits the closing table, there are no financial transactions after that except for the cashout transactions.

    And that is why no foreclosure mill can come forward now, as they were required to do up until around 20+ years ago, and produce a witness from a company that could prove that they owned an existing obligation from the homeowner and that they were taking a loss because the homeowner wasn’t paying. That is why they are appointing companies to pose as servicers when those same companies are not permitted to touch any payments from homeowners or make distributions to investors.

  13. The American Property Owners Network a new non-profit uniting homeowers politically and in a Florida Supreme Court action to stop “fraudclosures” thanks you profusely, Judge Butchko!!!!!! God bless you!!!!

  14. Dianna Montez Avatar
    Dianna Montez

    Maybe this info will help me with my wrongful foreclosure case in CA. Steven Dailey is the attorney for USBank assigned to my case. I hope my judge follows Judge Butchko. God bless Judge Butchko!!!

  15. Eugene Torlucci Avatar

    I have been included in multiple class act selllments with the same mortgage servicer for the past 6 years with my identity being mistaken for my deceased father while the equity is being drained from my home to accommodate my late father’s expenses……well played with the help of industry insiders.

  16. One fair and moral judge amidst a pit of corrupt vipers that blindly side with banks will not rectify the sickening problem that has manifested within American home owning society.

    This is what too big fail has given us and it’s past for some goddamned accountability and consequences besides fines and lip service.

    This country’s entire justice system has become every bit as cancerous and corrupt as the greed ridden banks. But places like Florida and Georgia have become the undisputed kings of foreclosure fraud, predatory lending, and authoritarian HOAs. They’re all in on it together at the court level giving each other the reach around at the expense of would be/ wannabe homeowners preying on every new poor sucker that moves in after the previous poor sucker got sucked dry.

    It’s sickening.

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