Judge, I request a 10 minute recess!

A new study out not long ago suggests that if you're going to court, you'd better get there early, or things won't go so well for you, because the judge may be thinking more about that bag lunch in his chambers than your legal needs: A recent study showed that judges handed down less favorable decisions to prisoners later in the day, with the effect reversing after a break.

Reported primarily by sites like Freakonomics as suggesting that hungry judges hand down harsher sentences in criminal cases, the study is actually broader than that, with the researchers saying the study:

hints that the apparent depletion exhibited by the judges is due to the act of making decisions rather than simply elapsed time

That is, the more judges do, the less mental energy they have to put into things they do later, unless they take a short break, resulting in judges simply rejecting requests and sticking with the "status quo."

Two indicators support our view that rejecting requests is an easier decision—and, thus, a more likely outcome—when judges are mentally depleted: (i) favorable rulings took significantly longer than unfavorable rulings and (ii) written verdicts of favorable rulings were significantly longer than written verdicts of unfavorable rulings

So it was harder, and took longer, for the judges to come up with a ruling in favor of the prisoner's request when "mentally depleted."

The researchers also didn't conclude that simply having a Kit Kat was likely to let more convicts back on the streets:

However, we cannot unequivocally determine whether simply resting or eating restores the judges’ mental resources because each of the breaks was taken for the purpose of eating a meal. We also cannot ascertain whether taking a break improved the judges’ mood because mood was not measured in our study....

The study concludes by pointing directly at the white elephant in the courtroom:

Nevertheless, our results do indicate that extraneous variables can influence judicial decisions, which bolsters the growing body of evidence that points to the susceptibility of experienced judges to psychological biases. Finally, our findings support the view that the law is indeterminate by showing that legally irrelevant situational determinants—in this case, merely taking a food break—may lead a judge to rule differently in cases with similar legal characteristics.

The idea that mental resources can be depleted and result in harsher rulings or more "status quo" judgments has a significant impact on lots of cases. For example: In initial appearances, in Dane County, lawyers can check in and get their cases called before pro se defendants' cases come up -- so the defendant who has a lawyer gets a double advantage of a lawyer and an early ruling on bond conditions.

Domestic violence cases, foreclosure judgments, and divorces also have a cattle call aspect in many courts: The courts line up 5, 10, 15 cases in the morning and run through a sometimes-lengthy list of stipulated or default judgments before taking the contested cases - -so the contested cases are being heard after the judge is "mentally depleted." (I also noted, in my judicial campaign, that litigants with a lawyer in domestic abuse cases are more likely to get an injunction granted. Having lawyered-cases go earlier could affect that, as well.)

Most of the world is having fun with this, making jokes about bringing the judge a sandwich. It's worrisome, though, because lawyers like me present unusual claims to judges on a fairly-regular basis, and if the effect in this study holds up, at least some of those cases were decided in part based on the time of day I was in court.

I guess I shouldn't complain about those 8 a.m. hearings anymore?

A legal system based on more than allegations? C'mon! (My Actual Case Results)

Last week was a good one for me: In one case, I was able to use a 1970 case to avoid judgment on the pleadings in a foreclosure case even though we admitted not making all payments as required, while in another I got a judge to grant what I'm pretty sure will be the first jury trial on civil claims under Wisconsin's mortgage broker regulations.

Today, I'll talk about the judgment on the pleadings. Dane County Case Number 10 CV 6115 involved a plaintiff filing for foreclosure; in response, the defendant (my client) admitted not paying the mortgage as required but denied that the plaintiff was the actual holder of the mortgage, and denying that a notice of acceleration had been given.

The plaintiff then filed a motion for judgment on the pleadings, citing an old case, Virkshus v. Virkshus, 250 Wis. 90, 26 N.W.2d 165 (1947). The plaintiff claimed that the admission of not paying meant that it was entitled to a judgment of foreclosure, but as I pointed out in the response brief, Virkshus was a pretty limited decision: The Virkshus case involved an appeal from a foreclosure over the second mortgage, and the defense raised was one of fraud -- the defendant claimed the mortgage was the result of fraud.

Because the Virkshus documents in question were executed under seal -- a defense almost nobody knows about -- there was sufficient consideration and the Court simply noted that the defense had failed to establish facts (on summary judgment) that could constitute fraud.

In particular, the court looked at the pleadings regarding payment, where it was admitted that no payments had been made, and noted that a plaintiff whose defense relies on payment must not only deny missing payments, but must affirmatively allege something about those payments to survive summary judgment.

What the plaintiff in my case failed to do was read on to find out that All Electric Service, Inc. v. Matousek, 46 Wis.2d 194, 174 N.W.2d 511 (1970) substantially limited Virkshus... by allowing a defendant sued for breach of an oral agreement to deny that he owed money as part of a denial that the plaintiff had actually done the work.

The Matousek court correctly held that a plaintiff who claims to be owed money must, when a defendant denies that, prove the amount due, and that, combined with Matousek's affirmative defenses, was sufficient to go forward with the case.

Based on that, I got the Court in the Dane County case to refuse to enter a judgment on the pleadings -- which means that the plaintiff has to actually prove a case, instead of just making an allegation. I imagine that the lender is quite upset about this whole "having to bring actual evidence and actually prove something by a preponderance of that actual evidence they have to produce" standard that courts are now applying to lenders.

Consent orders issued to major lenders -- but are they a sham?

NPR broke this story over a week ago, but I didn't hear about it until yesterday. (They don't wake me for the important meetings.)

After several months of investigation into the so-called robo-signing scandal, federal banking regulators are taking action against the nation's largest mortgage servicers. As a result, Bank of America, JPMorgan Chase and Wells Fargo, among others, will have to change the way they handle foreclosures. NPR's Tamara Keith has the story. ...The issue of robo-signing blew up last fall, after several bank employees admitted they had signed thousands of foreclosure documents without verifying their accuracy. Hundreds of thousands of foreclosures were put on hold and later resumed when banks said they didn't find any cases of foreclosures that shouldn't have happened. Still, state attorneys general from all 50 states launched an investigation, as did federal banking regulators. Today, the regulators took enforcement action. John Walsh is the Acting Comptroller of the Currency

Consumer advocates say the orders are a "sham," but are they? I'll take a look at them, beginning with the JPMorgan consent order from the OCC:

In the order, the OCC alleged that JPM caused employees to file false affidavits and that JPM initiated or litigated foreclosure proceedings without verifying a proper legal basis for doing so.

(JPM did not agree that those were accurate findings.)

The OCC then ordered the creation of a "Compliance Committee" which must meet monthly and file reports documenting JPM's compliance with the consent decree. 2 members of the committee must be non-employees of the Bank or a subsidiary.

JPM must create an 'action plan,' to be approved by OCC, saying what they plan to do about the problems (the ones they didn't admit existed... which isn't a good sign) with specific proposals to include limitations on the number of loans assigned to one employee, and processes to ensure that legal pleadings have a factual basis...

...which, I'll note, the lawyers for the lenders were supposed to be doing... but the OCC consent decree includes a section requiring lenders to actually supervise their lawyers...

...and the "single point of contact," which will probably largely address many people's frustrations -- that they get the runaround by talking to a different person every time.

The consent decree also appears to forbid fee structures based solely on meeting deadlines or increasing foreclosures.

In part VI, the decree addresses MERS, but primarily to require that they more specifically track potential errors on MERS' part, not to forbid it.

Part VII requires an independent consultant to review foreclosures but only those filed after January 1, 2009 and before December 31, 2010, for some reason -- foreclosures filed after January 1, 2011 weren't problematic? -- the goal being to determine if they were properly brought in the first place, including compliance with HAMP. JPM is required, after that review is done, to submit a proposal for reimbursing any harmed borrowers.

It goes on like that -- basically the whole thing says "tell us what you're going to do to find and fix any problems" and provides for oversight of that process, with the added benefit that the plan will be in writing (and therefore easily discoverable; I imagine it'll be all over the Internet about 24 hours after it's filed.)

One downside: the order expressly disclaims any rights to anyone not a party to the Order -- so individual litigants won't be able to sue to enforce its provisions under third-party beneficiary rules.

(Full text of the order here.)

So is it a sham? Maybe, maybe not -- that depends on how well the OCC goes about enforcing the resulting orders, and whether any individually wronged homeowners get compensated for the problems that have been caused. But the absence of a private remedy leaves me concerned that this isn't going to be enforced much at all.

If you leave a comment on this post, I may have to send you a dollar.

That's the logic from a lawsuit filed against Arianna Huffington and AOL filed as a class action suit by a blogger and labor activist who feels that his uncompensated contributions should be compensated. Said the plaintiff, Jonathan Tasini:

In my view, the Huffington Post’s bloggers have essentially been turned into modern-day slaves on Arianna Huffington’s plantation,” he said. “She wants to pocket the tens of millions of dollars she reaped from the hard work of those bloggers….This all could have been avoided had Arianna Huffington not acted like the Wal-Marts, the Waltons, Lloyd Blankfein, which is basically to say, ‘Go screw yourselves, this is my money.’”

(Source.) That outrage -- and certainly not a desire to promote his own name and efforts -- led Tasini to file a claim based on "unjust enrichment," one that could (but probably won't) lead to checks for about $11,000 for all the bloggers who have ever posted on HuffPo.

The basis for the claim -- unjust enrichment -- has been derided by some commentators as being worthless, and by others as a catch-all:

The mere fact that it’s the central doctrine in play here tells you something. “Unjust enrichment is one of those backup theories we use...It’s the kind of theory you bring when you don’t have another one that’s clearer.

(That was said by a San Francisco IP/media lawyer, quoted here.) In reality, "unjust enrichment" is neither a catch-all nor a worthless common law doctrine, but unless the law in the jurisdiction where Tasini filed is substantially different than the unjust enrichment law in Wisconsin, Tasini's lawsuit is likely to fail on those grounds: Unjust enrichment typically requires that a party confer a benefit on one side -- as a blogger does when posting for free-- that the other other side knows of the benefit -- as HuffPo does when it allows the posting -- and that the recipient then retain the benefits in an unjust or unfair amount.

It's part three that really destroys Tasini's claim: Tasini gets benefits from posting on HuffPo, of course (how many bloggers would like a national platform that draws people in?) and it's going to be almost impossible to show that Tasini's -- or all bloggers' -- contributions to HuffPo were more valuable to HuffPo than HuffPo was to them -- let alone that it was unfair for HuffPo to keep the benefits when it made clear to bloggers that they weren't getting paid in the first place.

Given Tasini's rhetoric, though -- his comparison of Arianna Huffington to a plantation owner shows he has zero sense of perspective but a healthy understanding of publicity -- I'm reasonably certain that the real goal of the lawsuit is to promote his own name and efforts, not to actually get compensation for the "class" of bloggers.

For $21 million, you can do whatever you'd like to my credit. (What's My Case Worth?)

The Fed claimed that there were no problems with wrongful foreclosures recently, but a jury in Georgia may disagree after it awarded a man $21 million in a suit against his lender:

U.S. Army sergeant David Brash has won more than $21million in damages from PHH Mortgage after it falsely claimed he defaulted on his loan.

The 29-year-old was awarded the enormous sum by a Columbus jury after he sued the mortgage company - the country's eight-biggest - for reporting him as 'seriously delinquent' to credit rating companies.

PHH claimed he was behind on his mortgage payments, when in fact they had been automatically deducted out of his Army pay cheque every month.

The sergeant, who is married with a baby on the way, had no problems with his $160,000 mortgage until September 2009, when he began to get late notices in the post. He called PHH repeatedly to find out what was going on, but each time he was put through to an outsourced customer service center in India, where staff couldn't answer his questions.

Brash's lawyer got recordings of the calls, which were automatically recorded by PHH, and played them for the jury -- including Brash being put on hold for up to 55 minutes, and repeatedly changing the stories he was being told.

Brash didn't just sue -- his lawyer wrote a "qualified written request" under RESPA and the company failed to respond as required by law -- and he had damages:

The firm reported him to three credit rating companies, seriously damaging his credit score. His credit card applications were turned down and he began to worry the situation would affect his career in the army.

(Same source.) The articles don't note it, but the award almost certainly was made under Georgia law, since RESPA doesn't allow for punitive damages -- so people who are bothered by PHH's practices outside of Georgia may find this case not quite as useful.

Here's something to think about in light of what passed for practices in the mortgage lending industry the past few years... (Consumer Matters)

What would happen if two people who thought they had a contract were later unable to enforce it? Completely unable to enforce whatever remains of the contract?

That question comes up more often than you might think, and may be raised in court even more frequently as the mortgage lending crisis continues to end up in courts, the question being when should people be forbidden to enforce a contract?

Shea v. Grafe, 88 Wis.2d 538 isn't a mortgage lending case; it's a consumer case and one of the first to interpret the Wisconsin Consumer Act, but as I re-read it recently for a little side project of mine that I'll tell you all about someday, I couldn't help but consider the ruling in light of what I've seen about mortgage lending.

The case starts out innocently enough, as so much litigation does, at a motor home show in the Wisconsin Dells. Grafe was there showing some homes, and Shea was there showing some stuff, too - -and got interested in buying a motor home from Grafe.

Grafe offered to sell the home for $19,000, and Shea agreed, planning to put down $1,000 -- going to Grafe's place of business in Minnesota to finalize the deal.

Once there, Grafe and Shea came up with the seemingly-clever plan of inflating the price of the motor home to attract a third-party financer -- so they said the home was actually selling for $21,000, and claimed that Shea was putting down $3,000, not $1,000, the idea being to show that the purchaser had more equity in the motor home than he actually did.

(See why I thought of mortgage lending cases? Here and here and here I discussed similar practices).

That worked: a lender took the bait, but requested that Shea put a little more down, so the two sides worked up a different set of fraudulent paperwork, with some additional money down from Shea, who wrote some checks that ended up bouncing.

Hey, who could've foreseen that someone who would agree to a fraudulent scheme might be less than trustworthy, right?

So while Grafe is unhappy with Shea, Shea's not too pleased, either -- he gets the motor home (in Wisconsin) and finds out it has trouble with the water system.

Hey, who could've foreseen that someone who would agree to a fraudulent scheme might sell a defective motor home, right?

Shea said he was (to quote the opinion) "thoroughly disgusted" with the motor home and that the sellers could take it back; the two sides worked out a deal (with the help of lawyers) and signed a written release that returned Shea's money to him, the motor home to Grafe, and left everyone happy, right?

Wrong! This is America, even back then, and so Shea naturally sued, under the Wisconsin Consumer Act, claiming violations of a variety of financing and penalty-payment statutes, and Grafe sued back for its losses - -having held the home for 18 months and then selling it for a little less than Shea had agreed to buy it for.

If you're keeping track, a number of questions have now been raised, and not all of them are versions of "Who'd want to buy a motor home, anyway?"

The questions I have so far are:

1. Why can Shea sue under the Wisconsin Consumer Act, if almost every portion of this case took place in Minnesota? It's a Minnesota company which sold the home to Shea in Minnesota and took the home back in Minnesota and so on and so forth.

2. Why'd Shea sue anyway, given that he got most of his money back? (I suspect the answer to that question is because he had a lawyer, but maybe I'm wrong.)

3. Why can Shea sue, if he signed a release?

4. And why can Grafe sue, if he signed a release?

5. Who drafted that release, anyway? It didn't waive all claims?

Anyhow, the whole mess ends up in circuit court, which finds for both parties, awarding Shea some money and fees and Grafe some money and offsetting the balances and Shea netted an award, which Grafe appealed.

The Supreme Court of Wisconsin took up the issue of illegality of the contract sua sponte:

We address none of the issues raised by the parties. We requested supplemental briefing on the question whether the insertion of inflated down payment and purchase price figures rendered the contract illegal, and if so, what effect such illegality would have on this action to recover penalties under the Consumer Act. The parties agree that the inflated figures should have no effect on the disposition of this appeal. We disagree. ....
We recognize the parties have not pleaded illegality of the contract, and the trial court did not raise the issue. We sua sponte consider the issue of illegality. Restatement of Contracts, sec. 600, Comment a (1932), notes: "Illegality, if of a serious nature, need not be pleaded. If it appears in evidence the court of its own motion will deny relief to the plaintiff. The defendant cannot waive the defense if he wishes to do so. Indeed, if the court [88 Wis.2d 546] suspects illegality, it may examine witnesses and develop facts not brought out by the parties, and thereby establish illegality that precludes recovery by the plaintiff." We consider this illegality to be of a serious nature. The illegality appeared in the face of the contract, in the evidence, and by the admissions of the parties.

So even though both parties agreed to just kick their fraud under the rug, the Supreme Court felt it important to address whether this was the type of contract it should enforce -- and the fact that it took up the question kind of tells you, the reader, where it's headed with this. And where it's headed is you're out of luck, guys:

An agreement which "contemplates or necessarily involves the defrauding or victimizing of third persons as its ultimate result" is void as against public policy. Twentieth Century Co. v. Quilling, 130 Wis. 318, 324-25, 110 N.W. 174 (1907). Accord: Rietbrock v. Studds, 262 Wis. 5, 53 N.W.2d 712, 54 N.W.2d 899 (1952); Farmers & Merchants State Bank v. Perry, 186 Wis. 93, 202 N.W. 179 (1925); Restatement of Contracts, sec. 577 (1932). Insofar as the inflated contract figures were designed to induce the lending institution to finance the transaction, the contract contemplated misleading the institution and therefore is tainted with illegality. Cf.: Farmers & Merchants State Bank, supra at 98, 202 N.W. 179.

Now that's interesting enough from a consumer point, but consider that sentence in light of mortgage schemes that inflated people's incomes in order to make a loan look like it worked, so that brokers could finance the loans and then sell them for a premium -- one witness in one of my cases recently testified that he'd make a $100,000 loan and sell it for $101,000 or $102,000, and that witness helped sign off on a loan which overstated by a lot the income of the borrower -- doing so in order to make the loan work and have it be sellable.

The Court went on:

Responsible financing is a vital part of a healthy economy and is essential to commerce. Lending institutions must be able to rely on the integrity of the representations of those who seek financing. Public policy, therefore, demands that courts decline to enforce a contract or grant relief based on a contract upon the application of either of the conspiring parties unless failure to enforce or grant the relief sought would create a greater injustice than that sought to be avoided by nonenforcement.

That sentence is the escape hatch, of course: We won't enforce any illegal contracts... unless we think it would be even worse to not do so. That could mean a lot. It could mean, depending on the judge you get, that, say, a fraudulent mortgage contract cannot be enforced to foreclose on a borrower, because kicking that person out of the house would be a "greater injustice," or it could mean that a borrower can't get out of paying on the contract because he or she got many hundreds of thousands of dollars in principal and someone has to pay that back.

Or it could mean, as it did in Shea v. Grafe, that neither side gets anything:

Since the penalties awarded under the Wisconsin Consumer Act resulted from a finding that the contract provisions violated the Wisconsin Consumer Act and since we conclude the contract was void ab initio because it was contrary to public policy, we are obliged to return the parties to the position in which we found them.

I haven't yet researched, and so I haven't yet found, any cases in which a court invalidated a mortgage for fraudulent underpinnings, and a lot of questions would have to be answered before any judge would feel comfortable invalidating a possibly-illegal contract involving a home and a couple hundred thousand dollars, and remember that in Shea the third-party financer was not (so far as I could tell) left out in the cold, so no innocent parties were hurt, but it's at least interesting to note that for 32 years, Wisconsin has had a case on the books saying that when two sides conspire to inflate a deal in order to entice a third party lender, that contract shouldn't be enforced.

A stunning blow against the forces of evil... (My Actual Case Results)

... or at least the people who claim something's frivolous when it's not. My views on lawyers who claim the other side is being frivolous are pretty well-known by this point. (They're here, and here, in particular.) But those views are apparently not shared by a lot of other lawyers, and so I've had to begin fighting back against lawyer who (in my view) inappropriately claim something's frivolous.

The problem, of course, is that saying a suit is frivolous isn't just a word: it's a legal term of art that threatens one side with paying some or all of the other side's fees -- and because of that, it can be a devastating type of allegation to make: claiming that a case is frivolous requires the lawyer receiving such a threat to explain to their client what that means, and that puts a fear into the client that they might have to pay fees... because no lawyer can guarantee that a court wouldn't find a case frivolous, no matter how certain he or she is that the case is on solid ground.

So making the threat of frivolousness means putting the seed of doubt into the other side's mind, which isn't a bad thing if that seed of doubt should be there. But if the case is not frivolous -- or not even arguably so -- then the threat itself can be frivolous.

A side effect of the frivolousness claim is to interfere with the attorney-client relationship; because a frivolous case can let the Court penalize the client, the lawyer, or both, making the claim of frivolousness can put the lawyer and the client on opposing, or potentially opposing sides. Again, that's not necessarily wrong if the case is frivolous, or arguably so -- but it is wrong if the case isn't frivolous.

Which is why I've begun fighting back against what I view as baseless claims of frivolousness; my new stance is if you make the claim, you'd better win it, because if you claim a case of mine is frivolous and you don't get the Court to agree, I'm going to do something about it.

In some cases, what I've done about it is filed a request for sanctions under other statutes, such as 28 USC 1927, which lets a federal court tax costs and fees for "vexatious" conduct. I've considered reporting to the Office Of Lawyer Regulation.

And now I've used In The Matter of Sanctions Of Quiles, an unpublished but very important case that allows a court to punish a litigant for making frivolous claims -- and allows an opponent to get the actual physical filing removed from the record.

In Quiles, a lawyer made a series of allegations against insurance defense counsel, including that the lawyer was orchestrating a witness' refusal to talk with him, allegations the trial court said were incorrect. Relief was denied to the complaining lawyer, and the insurance defense attorney then served a section 802.05 motion requesting that the offending papers be removed from the file:

Progressive moved for sanctions, affording Schapiro twenty-one days to withdraw his previously filed (and now denied) original and reconsideration motions that contain “[baseless] accusations [against Benson] of inappropriate conduct.” Schapiro apologized to the trial court and to Benson for accusing Benson of speaking with Wang, and Schapiro modified his reconsideration motion accordingly. However, Schapiro insisted on pursuing the modified motion without modifying the criticized cases, and continued his insinuations that Benson was responsible for his inability to obtain Quiles’s medical records from Froedtert Memorial Lutheran Hospital. Benson replied that she would pursue sanctions for Schapiro’s failure to withdraw his reconsideration motion altogether because it contained personal attacks of unprofessional conduct against her.

Schapiro -- the lawyer who made the allegations -- never did withdraw the motions, and the Court ultimately fined Schapiro $250. Schapiro complained that he hadn't been specifically warned of the conduct that was objectionable, but the trial court and the Court of Appeals said the motion was sufficiently specific.

(I'd like to commend the insurance defense attorney, Benson, for [apparently] not first filing the motion, but waiting until after Schapiro's motion was denied before asking that he withdraw it. That level of restraint is remarkable and uncommon in the practice today.)

Which brings me to my case. You may recall that back in December, I got into a dispute about whether I could issue a subpoena for a lawyer who was employed by the firm representing a mortgage lender. I won that argument -- the Court said I could depose the lawyer -- and I then wrote the other side and asked them to withdraw the motion that had opposed my subpoena.

I didn't do that because they were wrong to oppose the subpoena; they can oppose a subpoena, although I didn't think they had a good case to do so, but their requests to avoid the deposition weren't, in my opinion, frivolous.

No, I wrote them and asked them to withdraw the motions and papers because in the motion and affidavits objecting to my subpoena, the plaintiff and its lawyers accused me of being frivolous and harassing.

Why, you might ask, would that be necessary to put into a motion for protective order? Especially when a motion for sanctions under 802.05 requires 21-day notice before being filed with the Court?

I asked myself that, and then I asked the other side to withdraw the affidavit and related papers, because the Court had ruled in my favor, so my request was per se NOT frivolous or harassing.

It was correct.

The other side refused to withdraw the motion, and so I filed my own motion for sanctions, and after a couple of hearings, the Court again agreed with me: The defendants, whatever they were thinking before they filed the papers, had lost on the issue and therefore could not refuse to withdraw the allegations.

The Court ordered them to withdraw the affidavit making the allegations, and ordered costs and fees to our side.

All of which should serve as a lesson to lawyers thinking they'll gain something by claiming an action is frivolous: When you put that on the record or forward it as a chain of thought, you'd better win, because if you don't, you could end up paying yourself.

In other words, don't frivolously claim a case is frivolous.

Meet Linda Green... and Linda Green... and Linda Green...

From reader Kevin S. comes a tip to watch the 60 Minutes report "The Next Housing Shock", a story that examines another example of the rampant fraud underlying some (but not all) foreclosures:

It's bizarre but, it turns out, Wall Street cut corners when it created those mortgage-backed investments that triggered the financial collapse. Now that banks want to evict people, they're unwinding these exotic investments to find, that often, the legal documents behind the mortgages aren't there. Caught in a jam of their own making, some companies appear to be resorting to forgery and phony paperwork to throw people - down on their luck - out of their homes.

The report examines a service that simply began signing names to documents and notarizing them, using (in one case, at least) the name "Linda Green" because it was a short name and easy to write -- if you watch the video, pay attention to the many signatures of Linda Green.

I've already begun discussing with lawyers in my firm how to track the names, and signatures, of assignments of mortgages, and I think that everyone would do well to ask, in the future, for a pre-litigation sample of the assignment-signing person's signature.

A federal government foreclosure case, and a look at the federal courthouse in Chicago. (My Actual Case Results)

Don't get too excited; there's no actual results yet. But you can kind of follow the case as it goes along.

I'm counsel for the defendant-appellant in US v. Buchman, Seventh Circuit Court of Appeals' case number 10-2306, which was argued yesterday.

The issues in the case are:
1. Whether the district court properly confirmed the marshall's sale after finding that the prices bid at auction were the best measure of "fair value,"
2. Whether the district court should have modified the judgment and denied confirmation in order to allow "servicing rights" under federal law or a state-law redemption period.
3. Whether the case was moot for failure to seek a stay of litigation pending appeal.

Our side answers those questions as "No, yes, and no." But the case is more complicated than that, and I'll discuss it in detail once the Court rules. In the meantime, you can hear me actually arguing the case -- including a spirited debate with Justice Easterbrook in which he's somewhat disparaging of bankruptcy filings -- by clicking this link. That'll take you to the 7th Circuit's website, where you'll see a link under "Case Information" for "oral arguments." Clicking that link will take you to a page where you can enter the case number (10-2306) and listen away!

The pictures on this post are the actual courthouse (above right), and the Seventh Circuit's courtroom, with a close-up of the podium where lawyers stand to argue.

Here's a fun fact for people opposed to "socialism" (but in favor of home ownership.)

According to NPR's Planet Money podcast last week, following the takeover of Fannie Mae and Freddie Mac by the U.S. Government, by 2010 about 90% of all home mortgages issued in the country went through the federal government.

In Europe, meanwhile, almost no governments are involved in home ownership, according (again) to Planet Money.

The articles themselves, or the podcasts, are must-read for anyone who owns a home, wants to own a home, once owned a home, or is affected in any way by government. (You know who you are.)

But just for the record: We are perfectly okay with the government making sure that people can buy a home, but the government helping to provide health insurance to sick children is a horrendous intrusion onto our personal liberties? Good thing I'm just a consumer lawyer and don't need to help the American people make sense or have decent priorities.

I'm sure the third time will be the charm. (Consumer Law Matters)

Making big news this week: There are laws that the administration wants to enforce even though they were passed by someone else. In this case, it's AG J.B. "Van" Hollen's Department of Justice getting tough with a Columbus mortgage company. In a press release, the DOJ said it responded to "more than 60" complaints*

*Really, was it that hard to simply say the exact number? Did you just stop counting at 60?

and investigated, finding (allegedly?) that First American Funding Company LLC violated telemarketing and other consumer protection laws. From that press release:

“This company used extremely misleading language in their telemarketing practices,” Van Hollen said. “They sometimes even used language that implied they were calling on behalf of the consumer's home mortgage. When consumers called back, concerned there was a problem with their loan, they were surprised and frustrated to learn it was, in fact, a sales pitch. Such practices, along with the high volume of calls warranted this action.” Today's lawsuit, filed with a Dane County Circuit Court, charges First American Funding with violations of the state's No-Call and Direct Marketing laws. The lawsuit alleges the defendant called residents registered on the state's No-Call list; engaged in deceptive and misleading practices; and engaged in prohibited telemarketing practices by repeatedly causing residents' phone lines to ring and calling residents who previously asked the company cease making calls. The lawsuit also alleges First American Funding made calls from as many as 6 telephone lines that were not registered with the state as required under law.

This isn't the first time DOJ has gone after the company: CCAP records show a state action that resulted in a consent judgment in Racine County case number 05 CX 04 (I'm assuming it's the same company -- same name, different address, same city) and in Dodge County case number 08 CV 49 (in which the State was awarded a $42,000 judgment that was paid in 2009).

But this time I'm sure the company will get the message.