Minnesota | U.S. District Judge Patrick J. Schiltz Sanctions Homeowner’s Attorney $50,000 for “frivolous show-me-the-note actions”

“I’d hope that the decision does not have a chilling effect on bringing claims which are properly brought by consumers and their attorneys. That would be an unfortunate result of this claim because there are many appropriate claims and appropriate situations – in particular in this foreclosure area – where bad things were done. That is what the robo-signing cases were all about, that is why there are sanctions and that is why we’ve got a nationwide settlement with the major banks, because things were not done properly”


Legal decision has attorneys talking

MPR News received a tip about a complicated story involving an attorney, a judge and the state’s foreclosure laws.

U.S. District Judge Patrick J. Schiltz has taken the unusual step of sanctioning Minneapolis attorney William Butler for filing what the judge calls frivolous show-me-the-note actions. That’s where a homeowner facing foreclosure argues that because the mortgage and note are held by different entities, the home’s mortgage or foreclosure on that mortgage is invalid.

Separating the note from the mortgage contributed to the practice of mortgage securitization, one culprit in the housing bubble and crash.

Some courts in other states have ruled in favor of homeowners in cases like these. But here, Judge Schiltz says it’s been established under Minnesota law (he references Jackson v. Mortgage Electronic Registration Systems, Inc.) that the entity that holds the mortgage can foreclose on the mortgage even if that entity does not also hold the note. Showing the note is not necessary under foreclosure by advertisement, which is how most of Minnesota’s foreclosures are processed.

Rest here…



15 Responses to “Minnesota | U.S. District Judge Patrick J. Schiltz Sanctions Homeowner’s Attorney $50,000 for “frivolous show-me-the-note actions””
  1. Thats not true people that are foreclosed on with a 1st and 2nd mortgage the lender foreclose on only the first the second is sold to a bill collector and they start coming after you in the name of the lender if you read that the judge opinion he fined butler had butler to pay the banks attorney the suit also called for butler to pay back all his clients his response was they hired him

  2. Barbra Orr says:

    One last thing Brian are you related to Judge Judy?

  3. Barbra Orr says:

    Brian I respect your comments and if that it the law then it is the law. No unfortunately Judges are not elected. I believe they are chosen so if you get a bad one oh well. Brian please do not get all worked up as I am not saying that Judge Schiltz is a bad Judge. It sounds like the Homeowners attorney was being frivolous and the Judge followed the letter of the law just like judge judy.
    Brian are you an attorney, in law school, paralegal or is your father an attorney? Judge?

  4. To Tell The Truth says:

    From all the info we have gathered so far and proofs of fraud committed by the banks attorneys and some judges, it is very easy to see that this judge is one that is paid for by the banks. He either does not understand the relationship between the note and the mortgage et al…he will not be sitting much longer on that bench and he will need to recant his verdict.
    DO not despair, pray for him for the Higher Judge, God to give him wisdom to do the right thing unafraid. The attorney should appeal and win all his cases…how come no foreclosure mill attorneys like Stern and others not in jail or fined the same fines? Interesting that only these homeowners’ attorney is been used as a scapegoat…

    I agree that his oath should be filed along with all the cases. Perhaps he is one of those judges that took the two oaths instead of one…the secret oath that is…go figure…what is done in darkness will be exposed to the light.

    And look at the banks that are involved!!!!! No wonder!!!!

    • BB says:

      Amplified Bible
      Isaiah 10
      WOE TO those [judges] who issue unrighteous decrees, and to the magistrates who keep causing unjust and oppressive decisions to be recorded,

      To turn aside the needy from justice and to make plunder of the rightful claims of the poor of My people, that widows may be their spoil, and that they may make the fatherless their prey!

      And what will you do in the day of visitation [of God’s wrath], and in the desolation which shall come from afar? To whom will you flee for help? And where will you deposit [for safekeeping] your wealth and with whom leave your glory?

      4Without Me they shall bow down among the prisoners, and they shall fall [overwhelmed] under the heaps of the slain [on the battlefield]. For all this, [God’s] anger is not turned away, but His hand is still stretched out [in judgment].

      PRAY FOR ME DEUTSCHE bank is evicting me and they don’t even say they are the owner… the loan reverted back to SPS and now SPS says they own it and won’t give loan modifications… they say I don’t even have a loan that they own it… I put in a motion to dismiss because the violated NO TRESPASS by their own admission, delivered it on april 4 2012 and said I had until March 12 2012 (my birthday) to respond. and I responded before the judge even had a chance to ok that they could mail it… WHAT A CROCK… now I will ask for a declaratory judgement that the owner can only evict

      and they sent the title and deed and it is still in my name when SPS says they bought it 6 months ago…

      I wrote to the WA atty general… he has already sued one company HELP ME JESUS!!!!!! EXPOSE THESE CROOKS AND TEAR THIS CORRUPT biz DOWN RIGHT NOW .HEAR THE CRIES OF YOUR PEOPLE and give them some of their deserved WOE (misery grief and sorrow) that they have sown on the people… REDEEM OUR HOMES JESUS SHINE YOUR LIGHT ON THIS ABOMINATION… LET THE REAPERS OVERTAKE THE SOWERS AND CRUSH THEM. the wicked flee when no one chases them. BB the WidowWarrior

  5. dRp says:

    Hopefully this will be overturned.


    please email dRp@forecloseYou.com
    regarding banks messing with our kids

  6. flex says:

    I wonder If I will ever see or read in the near future that this decision from this judge will open the door for other judges to recognize that indeed the jurisdiction of standing is imperative to be able to foreclose. This tactic of show me the note was used at the beginning of this saga and many judges hate to hear these words again, even though is viable today after so many wrong doing from the lenders and servicers.
    I can not wait to see how all the judges from all the rest of 49 states will react to this judge’s decision.
    Will they follow suit with the same judgment or will apply the law as they suppose to do per the constitution?
    I also believe this things happened for a reason. This will be read by thousands of attorneys and they will have to have a plan of action if this happens again. I would like to read the reactions of the best minds professors of law in our country tomorrow.
    Here we go again, another roller coster. However, we must lose some to win some. This is exactly what happened for the last 5 years. How many cases the lenders and servicers won and now look how the table is turning to our side? Everyday I read cases and news about how the lenders are losing in court. If this judge were Judge Shack from New York, It would had been a different results.
    In general, things are getting better. Look at what happen this weekend in Hawaii regarding a case of securitization. We are going to hear and read a lot more about securitization, psa, remic, and learn a lot more in the near future as more and more cases will come up after the statue of this case set the base for all of us to confront the pretender lender or servicer to prove if the have the right to foreclose.
    America, don’t give up. Keep fighting. We must educate the judges even though some are stubborn and are sold out to the banks.
    Somebody should do an investigation on this judge and expose him to the world and see where he is going to find another job in the future. God Bless America.

  7. Ali says:

    Can you say “Bifurcation”. When the note and deed are separated that is what occurs and it also goes aganst the PSA. So evryone gets scewed. Yes this will backfire on this so called judge and I’d be willing to bet that the bar will come to his defense. This judge needs to be transfered to “dog-bite” court tilll he can be voted off the bench!






  9. JamesM says:

    It is interesting that the court did not refer the lawyer to the bar in that state. The court may have been avoiding the states supreme court from directly examining if the note defense is “viable” defense because most sanctions on lawyers are administered and controlled by the supreme court.

    I think the constitutionality of the state new law will, at some time, be put to the test, in that it directly conflicts with the UCC and federal decisions on the issue. I wonder if this provides the lawyer that vehicle, if he is the right person to carry that water, since he has failed to successfully argue the issue in the courts below.

    • Brian says:

      In fact, the judge did report the attorney to the lawyer’s board. See page 39 of the Order, “This Court will forward a copy of this order to the Minnesota Lawyer’s Professional Responsibility Board.”

      The issue is more than just Butler’s “show-me-the-note” theory. The judge was also upset with Butler’s mistatement of the law, judge-shopping, changing his arguments mid-stream, and presenting new arguments all the time. The judge found “Butler has been abusing, not using, the judicial system, and his conduct appears to violate mulitple provisions of the Minnesota Rules of Professional Conduct.” See page 39.

      The posters on this page need to realize that in Minnesota, when there is a non-judicial foreclosure, (except for extremely rare situations), the borrower owes no money to the bank that foreclosed – regardless of how much money the bank lost on the loan. But Butler then argues that borrowers will remain liable to the holder of the note – even after a foreclosure of the mortgage. This is absolutely false. See page 43.

      You cannot mislead the court about the law. That is why he is being sanctioned.

  10. Beth A> says:

    This poor excuse for a judge made a huge mistake and a “career decision” = guess he will not get re-elected when the time comes.

    This will end up costing the homeowner even MORE harm via appeal costs. Hopefully a complaint will be filed and the judge will be sanctioned.

    • Brian says:

      Federal Judges are not elected. He will be on the bench for a long time. By the way, every federal judge that has ruled on one of this lawyer’s cases has also dismissed the complaint. There are also several other sanctions motions pending.

  11. Reuben Nieves says:

    This shows the ignorance of the court. . In Carpenter v. Longan, 83 U.S. 271, 274 (1872) the Supreme Court

    decided a case from Colorado and said “The note and mortgage are inseparable; the former as essential,

    the latter as an incident. An assignment of the note carries the mortgage with it, while an assignment of the

    latter alone is a nullity.” Why then is the issue of standing not based on whether the lender could show that it

    has the original note in his possession to evidence that it is the real party in interest with standing to


    • Brian says:

      Right, let’s all go back to the way things were in 1872. Women could not vote; separate but equal was ok; JIm Crow laws were widespread; child labor was allowed. But more importantly, Minnesota statutes expressly allow for non-judicial foreclosure and do not require the foreclosing party to hold the note. That is what the Minnesota Supreme Court ruled in Jackson v. MERS (Minn. 2009). Read Judge Schiltz’ 54 page opinion, then read Jackson v. MERS – then post comments on this story. Justice Page in his dissent in Jackson v. MERS echoed some of the same language that you quote from Carpenter. But Justice Page was outvoted (6-1) and Jackson v. MERS is the law in Minnesota. The result might be different in another state with different statutes (such as Colorado in 1872). The result might also be different is the foreclosure was “by action” where proof of the note is required.

Leave a Reply