Is Non-Judicial Foreclosure Unconstitutional in the Modern Context?

Here’s an excerpt from an article by attorney Jeff Barnes on why he thinks the non-judicial foreclosure structure is unconstitutional, especially in the modern context:

This post is the result of my personal observations as counsel in more non-judicial foreclosure cases than I can count over the last 4+ years around the United States. With the rampant use of robo-signers, fraudulent assignments, backdated notaries, and “public records” manner of taking someone’s house away, it has become more than evident that the entire non-judicial foreclosure system needs to be scrapped in every state where it is used. The reasons are several.

First, the system is unconstitutional. What other system permits an alleged “creditor” to take away something which is titled in your name simply by filing three documents in the public records? All a foreclosing “creditor” has to do to foreclose, in a non-judicial state, is to file (1) a Notice of Default, (2) a Notice of Substitution of Trustee, and (3) a Notice of Sale, and the house is sold at public auction. To make matters worse, there is no state which requires a foreclosing party (or trustee sale company) to generate and mail or send a new sale notice if the sale in the Notice of Sale does not take place on the date in the Notice; the onus is on the homeowner to “keep in contact with” the trustee sale company as to when the “new” sale date is.

On top of that, a homeowner in a non-judicial foreclosure state has to file a lawsuit to seek a court order to stop the sale, which is a two-phased effort: a Temporary Restraining Order to seek to stop the sale temporarily, followed by a separate Motion for Preliminary Injunction to stop any sale during the pendency of the foreclosure challenge. To make matters worse, most states have a bond requirement to effectuate an injunction, and the amount is usually so large that the homeower cannot afford it. This manner of placing the burden on the homeowner to disprove the foreclosing party’s case and being labeled as “guilty until proven innocent” reeks of unconstitutionality.

 

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