Remove That Mortgage !!

Two months ago I listed six attacks on mortgages. The first was to rescind the mortgage under the Truth In Lending Act in a Chapter 13 bankruptcy, and pay a dividend on the remaining obligation, which amount is based on the debtor’s disposable income.  I advised that this argument won at the Massachusetts bankruptcy court level but was rejected in Maine and Puerto Rico.

The previous Massachusetts ruling was vigorously reaffirmed by Judge Hillman in his recent Jaaskeleinen decision, Jaaskelainen v. Wells Fargo Bank, N.A. (In re Jaaskelainen), 391 B.R. 627 (Bankr. D. Mass. 2008).  He also ruled that a signed disclosure of receipt of the proper number of notices was only a rebuttable presumption, consistent with the law, and presentation of contrary evidence destroys the presumption and leaves the court to make its decision free of the presumption.

Judge Hillman also ruled that modest concerns with the “chain of custody” of the documents were unreasonable unless supportable.  Simple suggestions that a document might have been lost or misplaced after a closing were rejected.  “A closing booklet is not a murder weapon or controlled substance which requires a perfect chain of custody to prove guilt.”

Finally, there was no bona fide error defense available because the lender had no reasonable safeguard procedures in place.  It was unreasonable to rely on the closing agent as the checking mechanism.  (is this akin to the fox guarding the henhouse?)