Friday, January 21, 2011

FIRST STANDING-RELATED VICTORY IN VIRGINIA: Aurora's claim to title thrown out for lack of standing!

January 21, 2011, Prince William County, Virginia

Yeah, I know... You are thinking, What standing? Isn't Virginia a nonjudicial foreclosure state?

Well, the twist in this case was a self-created cloud on the title that Aurora sought to remove prior to its contemplated foreclosure. Aurora sought this by affirmatively coming to court as a plaintiff.  The homeowner had previously recorded a release of the subject lien based on her reading of TILA and on some "advice" over the internet.

Even though there may have been some colorable basis in the law for the homeowner's position (TILA provides that upon consumer's rescission, the security interest becomes void and creditor must take steps to effectuate rescission or bring a declaratory judgment action), I had at least two Virginia judges (one federal and one state) tell me that the homeowner's conduct of recording a release here borders on criminal fraud warranting referral to the state prosecutor. (As some readers have rightfully pointed out, not a single robo-signer has been referred to a prosecutor to date.)

But be that as it may, Aurora sought to have the homeowner's recordings removed from the chain of title and, to do that, it had to show.... standing.  It had to show that it itself had any interest in the property before it could ask for any "relief" with respect to the property.

Aurora's claim to the property was based on a promissory note not payable to it, but endorsed in blank and supposedly acquired by it after the loan's origination.  We challenged Aurora's position and held Aurora to its burden to plead and prove its case to the full extent of the law.

You won't believe what happened next.  The judge, having heard the arguments and having asked very pointed and crucial questions (I've been in front of him before and he is a very solid and fair judge, one of those who we say "follows the law"), sided with Aurora and denied (overruled) our demurrer (motion to dismiss)!

Then we proceeded to the merits.  During that time, I asked the court to "clarify" what interest it found on the part of Aurora and where it stemmed from, given that Aurora failed to plead all the necessary elements in its case with respect to the promissory note.  The judge immediately realized that it was "reversible error" to find such an interest existed on this record, and that he would have to reverse himself and rule for us (albeit reluctantly).  He stated something like, "I hate to do this, I hate to do this, but we gotta do it right."  And then he reversed himself on the spot in our favor and justified his own ruling by stating that it would not be a favor to Aurora either if he issued an order in the case that was was likely to be reversed on appeal.

In some matters, whatever the judge's personal preference, his hands are tied by the law!  This is what makes the judiciary branch of government different from any other branch.  You better pray that America remains the land governed by the rule of law.  Neither the king to the banks are above the law!

What this case tells us is that, as homeowners, people are facing a tremendous policy hurdle (and even prejudice) to overcome in every court of law when trying to challenge a bank's right to take one's house without proper (due) process.  This judge basically thought my client was a deadbeat who's trying to get out of a justly imposed obligation.  If you are a homeowner, your arguments must be air-tight, so that anything done in derogation of your position would be "reversible error."

Also, it doesn't hurt to briefly address the policy concerns and tell the judge that you as a borrower were duped at closing with false promises of never-ending rising home values and quick refinances available at anyone's whim. A bunch of sharks concocted and issued your loan with utter disregard of your ability to repay and without putting any of their own funds at risk.

So there you have it. Aurora does not have standing to mess with the chain of title!


  1. Do you have a case title and docket # to share? I have a friend in VA that has nearly the same facts but they lost the unlawful detainer. They filed a satisfaction in their case too. Maybe he can get the judgment vacated.

  2. "I had at least two Virginia judges (one federal and one state) tell me that the homeowner's conduct of recording a release here borders on criminal fraud warranting referral to the state prosecutor."

    This is a joke wanting to refer the homeowner to the state prosecutor. Have they referred one robo-signer, atty or bank officer to the states attorney for filing 100's of 1000's of fraudulent document in the courtrooms and the county recorder's offices?

  3. @Dana.
    If they lost the unlawful detainer, they likely can't get the judgment vacated. Unlawful detainer is a special type of action, limited action where the only question to be determined is possession of the property. It's useless to raise chain of title arguments in an unlawful detainer action.

  4. Is there Case number or name? Question we have a case in prince William county. Could we accomplish the same thing with a quite title action?

  5. Attorney Gregory Bryl
    I am in Virginia too and the judge said we will move the case forward with the Quite Title. What are your thoughts on this. The Judge moved this case for Quite Title after the Demurrer of the Banks. My case is in court since 2008. Can you highlight some thing about the quite title please.

  6. @Mohammad:
    For those type of questions, just feel free to call my office. 202-360-4950

  7. Where can we research this case?

  8. I do not have the homeowner's permission to disclose their identity. Also, the order simply states that the homeowner's demurrer (motion to dismiss) is sustained (granted). Since the case was thrown out at its initial stage, it does not contain a helpful research record. To understand the issues, you can read In re Kemp. I've discussed in here on the blog before.

  9. oh man so thank you for standing up with that homeowner :-) love to finally have a toehold about this critical issue in Virginia!!! Keep it up!