Rule 11 (Bankruptcy Version Rule 9011) Sanctions for Misstatements By Pretender Lenders and Lawyers

Hot off the presses on May 26, 2009 comes this erudite opinion from federal district court Judge Young in Massachusetts, taking the servicers to task for misrepresentations as to what entity holds the note, and also (and especially) affirming sanctions against the lawyers who (mis)represented them. See In Re Nosek, CA 08-40095-WGY, (D.Mass. May 26, 2009.:
A choice sampling:
Oscar Wilde once said “It’s not whether you win or lose,
it’s how you place the blame.” This case presents the unedifying spectacle of a litigant and its lawyers engaging in
egregious misrepresentations and, now that they have been sanctioned for such misconduct, scrambling to pass the blame on
to others much like the iconic Thomas Nast cartoon of The Tweed Ring.”

“It is the creditor’s responsibility to keep a
borrower and the Court informed as to who owns the note and
mortgage and is servicing the loan, not the borrower’s or the
Court’s responsibility to ferret out the truth.” Order at 11.

And my favorite footnote comes after this statement:
“Buchalter contends that the Bankruptcy Court’s ruling suffers from hindsight bias. It was not until 2005 that any
court required a servicer to identify itself as an authorized agent.7”

The footnote shows that the judge is not convinced, “This argument is singularly unpersuasive. It is
tantamount to saying, “We’ve been making these misrepresentations for years. Until 2005, no one seemed to care.”

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s