Ohio Courts’ Reluctance to Admit Fraud Causes 16 years of Foreclosure Litigation

Jack Wright – MSFraud.org

February 23, 2012 PDF Version

CLEVELAND – This week, Ohio’s 8th District Court of Appeals heard oral arguments in what must be one of the most disturbing foreclosure cases in the nation’s history. It is the case of Richard Davet, and one of the most disturbing aspects of the case is it should have been dismissed with the bank’s 1996 filing. Subsequent Ohio case law agrees.

In 1996, NationsBanc (now Bank of America) initiated a foreclosure action against the Davet family and invoked the jurisdiction of the court by claiming to be the owner and holder of the loan. Mr. Davet, who the Wall Street Journal would later describe as prescient, immediately challenged Bank of America’s standing to sue and counterclaimed for damages. Davet established Fannie Mae was the owner and holder. This was more than a decade before the public would learn about the systemically false ownership claims made by banks. Without the proper party, the law directs courts to summarily dismiss the case. And that is where the Davet case should have ended. The truth should have set Davet free in 1996. It did not.

Instead of dismissing the complaint, the 1996 court somehow granted judgment to Bank of America after it was already established they were not the real party, and therefore the court was without jurisdiction to render judgment.

Since then, Davet has been stuck inside a judicial treadmill, and for reasons that many consider highly suspect, the seemingly influenced Ohio courts have vigorously refused to release Davet from the injustice of its own void ab initio judgment. For the last 16 years, the Davet’s lives have been manipulated and controlled by a judgment the law considers mere waste paper. This should be a crime in itself.

Fool a judge once –shame on you; manipulate judges thousands of times and you can turn a city into the “Epicenter for Foreclosures” and 60 Minutes will come to town to film the damage you caused.

Don’t Give Up On Ohio Courts Just Yet

Granted, Ohio’s judiciary does not have a highly-regarded history like Massachusetts, which is poised to rule as soon as this month on a foreclosure case that could justly lead to a surge in claims from home owners seeking to overturn unlawful seizures. But Ohio has shown promise during Davet’s ordeal with widely-cited foreclosure opinions of its own, such as Wells Fargo v. Jordan, Wells Fargo v. Byrd and Deutsche Bank v. Triplett that all fit squarely within the four corners of Davet’s case and support vacating the void ab initio judgment


if plaintiff has offered no evidence that it owned the note and mortgage when the complaint was filed, it would not be entitled to judgment as a matter of law.”,- “in a foreclosure action, a bank that was not the mortgagee when suit was filed cannot cure its lack of standing by subsequently obtaining an interest in the mortgage.The Jordan opinion also states: “Several judges have held that a complaint must be dismissed if the Plaintiff cannot prove that it owned the note and mortgage on the date the complaint was filed.”


Also encouraging, Davet’s current appeal has been assigned to the author of Wells v. Jordan. So there is much confidence this court will not and cannot make the same mistakes as other Davet courts. Davet claims he still has legal title and his latest appeal is an action to get his home back. It is an important issue and Ohio’s former Attorney General Marc Dann and attorney Grace Doberdruk are representing him.

The mishandling of wrongful foreclosures became so great it attracted 60 Minutes to come to Cleveland to report on the devastation these preventable foreclosures had caused.

In an earlier November 2010 article, Ohio Chief Magistrate Bucha and other Cuyahoga County judges said that they fear document foreclosure defects may give former homeowners a claim on the title that will affect future sales. That scenario fuels Judge Russo’s sense of urgency to sort out problems now, she said. “If courts around the country do not handle this on an individual case basis and there are later problems with the title, the courts will have participated with the clouding of the title,” Russo said. “The potential for harm is so immense at so many levels.”

Two months later, when asked what homeowners should do when they find fraud and forgery was used to wrongfully take their home, Bucha told MSFraud that Ohio has legal remedies to reverse the process on an individual case by case basis. But, the Davet case keeps confirming Ohio courts are reluctant to disturb these massive frauds upon its courts, county records and residents.

Recent Audits Overwhelmingly Support Davet’s 1996 Claims

In 1996, the Internet was basically useless for researching mortgage fraud. If Davet had posted Bank of America was trying to take his home and they did not own it, his post may have been flagged as inappropriate or spam. But today, the truthfulness of that statement is being uncovered across the country. Just last week, an audit by San Francisco county officials of about 400 recent foreclosures there determined that almost all involved either legal violations or suspicious documentation.

In Massachusetts, McDonnell Property Analytics did an audit for County Registrar John O’Brien and found 75% of assignments of mortgage were invalid. People are still trying to get these astonishing figures to fit inside their heads. I mean, what do you call this level of incompetence? Wall Street and the mortgage industry are calling it: Succe$$

Cleveland witnessed this in 1996 and made the conscious decision to ignore it; repeatedly. Since then, the question has remained – why? One Ohio judge referenced foreclosures on his Internet bio as: “the gift that keeps on giving”, as foreclosures paid for the remodeling of his courthouse. Yes, you can blame the forgeries and unlawful foreclosures on the banks, but you also have to place blame on our fact-finders and gatekeepers of justice for getting it wrong greater than 75% of the time.

Now, the 8th District Court of Appeals has another opportunity to redeem itself; only this time it has been matured by the visual damage and alarming statistics. If it should not, then what is the point of continuing to audit, study, survey and investigate the biggest foreclosure fraud in our history if the findings promote nothing more than scandalous headlines?

Davet was not supposed to figure out so early in the game that the bank did not own his home, so when he did, Bank of America had to find a way to at least make it appear they owned it. Several days after they filed for foreclosure, the bank’s law firm, Carlisle, McNellie, allegedly perpetrated a fraud upon the court when it hastily forged a 1996 assignment – after the fact. But they named the loan originator who no longer owned Davet’s loan. The courts apparently didn’t care and Davet’s home later sold.

This disturbing result worked so well, it would be repeated in countless cases until Cleveland eventually became branded as the “Epicenter for Foreclosures” by the New York Times.

Keep in mind, Davet came along in 1996. The mortgage industry was still tweaking the concealment features of its new theft by deception scheme and MERS was soon to make its property record-smashing debut. The success of this Foreclosure Machine would depend greatly on the participation of a judiciary that could be relied upon to blindly rubber-stamp foreclosures. In areas where that reliance worked best, foreclosures exploded, lives were ruined, and many communities were left struggling to survive.

The new model also leaned heavily on its favorite statistic: 9 out of 10 people targeted would not know to challenge the banks ownership, because back then, the public and the courts largely believed if a bank presented a statement to a court of law, it must be truthful. Intimidated, 9 out of 10 homeowners would leave the keys on the counter and walk away.

The bank would also walk away… with the free house and all of the homeowner’s equity. To obtain this windfall, the bank would write a threat letter to the homeowner; or if necessary, fill out a computer-generated court form and take it to a court for a stamp of approval. It worked almost like a conveyer belt, with a robotic-like judge sitting at the stamping station near the end of the line. Florida’s Rocket Docket became famous for it. Did it help? No, it propelled Florida into one of the worst foreclosure states in the country. Illegal foreclosures flourished in areas where the judiciary and law enforcement were complicit. Compare that to Nevada. After it imposed criminal penalties for what the banks and their lawyers were doing – illegal foreclosures virtually stopped.

Did Davet’s Evidence Threaten The Foreclosure Machine?

If not, then why did Bank of America bring in the “influential” firm Jones Day, to litigate Davet into the ground? Yes, Jones Day, litigating for years against a pro se litigant on one house with an $83K mortgage.

Think about it. If banks could win possession of a home they do not own, with a borrower not in material default, and while the homeowners were living in it… why, they could take anybody’s home.

And that is why today we still hear horror stories of banks foreclosing on homes that didn’t even have a mortgage; foreclosing on the wrong home, and even one where there wasn’t a home to foreclose. Curiously, it seems nobody has asked the bank: “Since you clearly do not own this home, where did you get the “data” contained in the documents you filed with the court?”

Remember, Wall Street banks were betting specific loan pools would default, while they had their own servicers like EMC, Litton, Ocwen, SPS/Fairbanks, etc., busy manufacturing the pool’s performing loans into default and foreclosure. Lists of property data was being shipped to foreclosure factories (Servicers) and mills (law firms) with instructions to foreclose on every property on the list. To foreclose on performing loans, Servicers would simply manufacture a default by holding or rejecting timely payments and then tack on a laundry list of fake fees to make it appear the account was in default. We are still hearing these same stories today. This fabricated data would falsely claim the homeowner was not paying. That would be all a judge would need to grant the foreclosure before the homeowner had a chance to say: “Huh?”

How Much Court Influence Do Banks Really Have?

During a recent private meeting with Bank of America’s chief of litigation, Mr. Davet found it odd that he was told at least 10 times: “You will never beat us in Court.” Was she saying Bank of America’s board is ready to use whatever resources it has to make sure Davet doesn’t win? Or did she just mean their investor’s money?

How Will Ohio Address Its Wrongful Foreclosure Problem?

What would be the condition of Cleveland today if its courts had taken a proactive approach to tainted foreclosures when it first noticed the problem in 1996? Would it have become the foreclosure epicenter? Will the court now take the results of recent studies, surveys and audits into consideration? Or will they continue aiding in the conspiracy of concealment?

Financial institutions continue to soak up judicial resources in perpetuating this fraud as an alternative to facing the music. As Ohio’s Judge Christopher Boyko so eloquently stated in his now famous Opinion in 2007:

“The institutions seem to adopt the attitude that since they have been doing this for so long, unchallenged, this practice equates with legal compliance. Finally put to the test, their weak legal arguments compel the Court to stop them at the gate.”

Ohio Courts may decide it’s time to turn it around and start undoing the damage. And they certainly have a good place to start.

Davet Reply Brief