California Bankruptcy Court Judge Edward Jellen Says Repeatedly He Doesn’t Care if the Creditor Asking to be Paid is Really Owed the Money

Per Georgetown Law Professor and bankruptcy specialist Adam Levitin and Tara Twomey of the National Association of Consumer Bankruptcy Attorneys in a Yale Journal on Regulation article:

The trustee will then typically convey the mortgage notes and security instruments to a “master document custodian,” who manages the loan documentation, while the servicer handles the collection of the loans. Increasingly, there are concerns that in many cases the loan documents have not been properly transferred to the trust, which raises issues about whether the trust has title to the loans and hence standing to bring foreclosure actions on defaulted loans…. In these cases, there is a set of far-reaching systemic implications from clouded title to the property and from litigation against trustees and securitization sponsors for either violating trust duties or violating representations and warranties about the sale and transfer of the mortgage loans to the trust.

Standing is a threshold issue and is a first year law school topic. It appears Judge Zellen either slept through that class or has been re-educated by the banksters since then.

The borrower is pro se (although he may have gotten some coaching from a lawyer) and appears to have comported himself well. The judge is quite another matter. This hearing took place last year but is germane because the case is going for oral arguments before the 9th Circuit Court of Appeals next week. Hat tip April Charney:

Zulueta Bankruptcy Court Transcript

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  1. ambrit

    Firstly, I’d like to see this judges credentials. Does he understand the true issues here, and if so, is he willfully negligent here? Can the Debtor appeal the bias demonstrated by the judges sarcasm and condescension? If all goes south for the debtor, can he try for a clawback in the future if new rules are promulgated? I.E. can a ‘with prejudice’ ruling be foisted upon him? Lastly, is this judge elected or appointed? Either answer suggests strategies for recompense. Lastly, a naif question, I’m sure, but, why is this being adjudicated in Bankruptcy Court? Could this be a jurisdiction where the primary residence is split out of a personal bankruptcy, or protected from siezure? This Zellen cat looks to be the poster child for “Hanging Judge.”

    1. Just Tired

      I am not a lawyer, but have had the misfortune to have spent far more time than is humane involved in lawsuits. (Did I win? I already answered that: I am not a lawyer) With that background I must say that finding a judge in California that, without any apparent sensibilities, does not follow the law, is like…..well, finding life in Earth.

    1. Just Tired

      Is that your idea of common law? Quaint idea, but it kinda changes the concept of a nation of laws and not men. It’s one of them thar “slippery slope” kinda things. Yathink?

    2. Jean

      It’s worth remembering that years back, Mish devoted countless blog space to the desirability of the mortgage “walk away”, those with the ability to make their payments, but whose financial position could be enhanced by property abandonment. He later went on to advise legal counsel before such a step. Perhaps Mr. Zulueta was simply following Mish’s earlier advice.

      So what is the objection to the free house? If it’s all in Mr. Zulueta’s best interest, it is in keeping with the law?

      Mish also holds the position that essentially all public labor contracts should be discarded, as their creation is the result of fraud involving politicians and union leaders.

      Good luck in trying to square this circle. Mish’s definition of common sense departs radically from most other’s.

      1. Praedor

        There is no “moral” reason to pay a banker a debt. There is nothing moral about repaying such a debt. I am sick and tired of people who try to inculcate the false religion of “you are morally obligated to repay debts to bankers (so they can pad their filthy, unearned nests)”

        I applaud “walk away”. I applaud it wholeheartedly. It is way PAST time that the ursurers suck rocks. They are owed NOTHING.

        1. F. Beard

          I applaud “walk away”. I applaud it wholeheartedly. Praedor

          You are wrong! Defaulters should stay rent-free in their houses for as long as they can get away with it. :)

          1. F. Beard

            it’s his view on the rule of law that I despise: He’s against it, if it inconveniences the rich and connected.

            Ouch! You may have a point but I would bet that it is the broader economy he is concerned about, not the rich and connected.

          2. wunsacon


            I’m ambivalent about so many people squatting in their “own” homes. On the one hand, they overbid for houses and locked me out of the market for the past 10 years. And, by squatting, they continue to keep prices higher than I am willing to pay for a s***shack. But, on the other hand, the banks suck more. So…

          3. F. Beard

            And, by squatting, they continue to keep prices higher than I am willing to pay for a s***shack. But, on the other hand, the banks suck more. So… wunsacon

            The banks traditionally pit savers against borrowers while screwing both of them (and themselves!). But both borrowers and savers can be bailed out which would ironically fix the banks too.

          4. Dave of Maryland

            On squatting: None of you have thought it through.

            Around the corner from me on a major connecting road, there is a house which has been very visibly foreclosed. The grass is two feet high, the mailbox is overgrown. It’s the only such house I have yet seen.

            So what is stopping the former owners from moving back in?

            After you’ve been evicted, what stops you from putting your things in storage, moving into a motel for, say, two weeks, and then breaking into your former home & moving back?

            What stops foreclosed owners from moving back into their bank-abandoned homes? Once the bank has got you out, they stop bothering with the property. Like, why do you always find lost articles in the last place you look? Because you stop looking !!! Once you’re gone, the bank stops looking. They stop bothering.

            So you’re evicted, you give it two weeks to blow over, you move back in. You phone up the gas & electric companies, you get your phone reconnected, the trash & sewer, and carry on.

            What or who is going to stop you? Mow the lawn and the city won’t cite the place for untidiness. Someone’s going to evict you? Like you haven’t faced that one already???

            Literally, I bought a house five years ago that only appeals to quirky people like me. There weren’t a lot of them around five years ago, there are probably none now. Which means this place is unsaleable. (The place down the street is much more desirable than this one.) If I were not to pay another cent on my mortgage, I don’t know how long it would take to be physically evicted, but I am certain that two weeks later I could move back in & unless the economy does something strange, like, I dunno GET BETTER, I could stay here, rent & mortgage free, for life.

            Methinks if I did I should get on down to the courthouse & see about property taxes. Don’t want to get caught out on that.

            Hey evicted people! When landlords evict, they have the place rented again before sundown. When banks evict, they walk away. Don’t resign yourself to living in your car. Go back & live in your OWN HOME.

            Enough people do this & it’s almost certain laws will be passed ex post facto to justify it. It’s the win-win we’ve been looking for.

  2. Sundog

    The Court: Well, you know, the bottomline is you’re not going to get a free house.

    So the bottom line is not rule of law. Glad we cleared that up.

    1. Wendy

      the bottom line is, someone’s getting a free house… but it ain’t you, peon!

      FWIW, bankruptcy judges are appointed for 14-year terms. It is extremely rare for them to not be reappointed, but I have seen it happen in the case of a smart though extremely abusive judge. It is also very rare for them to leave the bankruptcy bench for higher courts. They’re lifers, unless they return to private practice in order to earn more $$$.

    2. attempter

      Although it’s alarming to hear a judge say that, the same logic is pretty common on these comment threads.

      It goes either, “the debtor shouldn’t get a free house”, or more often, “well, the debtor owes the debt to somebody.”

      In either case, the implicit argument is that if the only way to prevent that undesirable outcome is for the alleged creditor to not have to prove he’s owed the money, then that’s what should happen.

      It’s something like, “If no one can prove he’s a creditor, then whoever comes closest wins.”

  3. psychohistorian

    It just came to me. This is all just about natural evolution.

    We are just evolving from Rule of Law to Rule of Money.

    1. Valissa

      This echoes my own historical conclusion, albeit a bit simplistically as historical trends are multiversal and interwoven in complex strands. And the concept of “natural evolution” questionable.

      The Rule of Money has always been a significant component but in today’s world has become the main thrust of power seeking. It has a very addictive quality about it too. In the movie “Inside Job” they showed how the Wall Street gang recreated with prostitution and cocaine, esp. the cocaine. This is also reflected in the title of one of the articles in today’s NC Links “American Banks ‘High’ On Drug Money”.

      This is why I don’t think it’s the ideology that’s the main problem. IMO, a person’s chosen ideology is just a mental justification/cover/front for their root desires. Academics, and intellectuals in general, like to pretend that rude and crude instincts have been conquered by reason. A look at the current economic situation should be enough to dispell that notion.

      1. Just Tired

        Since this article is about an event that took place in California, your comments lead me to say: “Wow, that’s heavy, man.”

    2. Anonymous Jones


      I guess I can forgive you for not noticing the “evolution” because it actually happened before you were born. Given that it was impossible for you to have witnessed this “evolution”, I can understand the confusion.

      Everyone grows up thinking everything is new. “Oh, all those old people, they’re so ignorant. They can’t possibly have thought of all the things we know now in our advanced state.” I mean, seriously, there are texts thousands of years old discussing the corruption of justice by the wealthy. Sometimes I just don’t believe that I’m actually forced to type the things I type.

      So the idea here is that the past was, I guess, some halcyon time of freedom and justice? Yeah, I know that’s what some history schooltexts try to tell you. It doesn’t make it true. If you really investigate the facts, you will discover that the courts were far more rigged centuries ago than they are now.

      This doesn’t mean we shouldn’t try to eliminate the corruption now. Obviously, this judge’s rulings should be overturned right quick. The rulings are preposterous, and hopefully, the appeals process (which was developed for exactly this purpose (i.e., to slap down idiot lower court judges)) will work.

      1. Valissa

        Please explain your rant about evolution as it makes no sense to me. If you are commenting based on what I said then you misunderstood. I was questioning the ‘naturalness’ of the evolution into Rule by Money (since money is manmade can one call this ‘natural’? it is arguable but not definitive), not the concept of evolution itself. I have been studying history for some time and I am NOT young. When talking about what causes history and the evolution of human civilization there are many points of view about that.

        1. wunsacon

          Anon was merely saying that “this ‘evolution’ is not new; money has always ruled; you’re just waking up to it”.

          There’s a good chance he’s correct.

          1. Valissa

            “you’re just waking up to it”.

            Why are you making this assumption? I have been aware of this for quite some time.

            What is up with all this “attitude” anyway? Why do some here automatically assume others are stupid or ignorant based on unfounded assumptions? Whatever happened to friendly conversation between intelligent people?

      2. Valissa

        People went to jail as a result of the Savings & Loan crisis, so one could argue that the Rule of Law was still dominant. There were also prosecutions related to Enron, and that was even more recent. But right now lot’s of folks would like to see some perp walks, but it’s not happening. So there has been a historically recent shift in the application of the Rule of Law.

        1. Skippy

          Rule of Law or *Law of Rule* lov…tis like a sock inside out, its still a sock although its orientation is relevant to the observer.

          Skippy…is it all just Diana’s mirror viewed from the emperors barge?

          1. Skippy

            amendum…is it all just Diana’s mirror viewed from the temple, by the emperor, whilst he waits for the completion of his barges…dalliances distractions till then?

            Skippy…@wunsacon that and much more as one commenter opined here, paraphrasing…god has been replaced by fiat electrons and_every thing now_is a *derivative* of — IT —.

            PS. do electrons feel empathy and_if not_how does one give it comport.

  4. TraderGreg

    Can negligent judge be removed from the cases that are above his level of comprehension? This judge is shame to his profession – what the State of California is going to do about it?

    1. Tao Jonesing

      The state of California can do nothing about it.

      This judge is a federal judge, not a state judge.

    2. rpf061549

      What will the State of California do, you ask. Best case – porbably nothing; worst case – promote him to a higher position. I live in CA and from what I’ve seen, judicial officers seem to have no desire to “get it.” Judges can be removed, but don’t hold your breath (someone may laugh – the judge? – as you turn blue).

    3. Just Tired

      “Can negligent judge be removed from the cases that are above his level of comprehension?”

      The answer is technically yes. However unemployment in California would approximately double.

    4. Justicia

      Sadly, our courts are full of judges who either don’t know the law or ignore it. Law libraries are filled with books reporting judicial errors that have been reversed. That’s how the system works.

      1. Dave of Maryland

        It’s usually expressed as, “The law is what you can get away with.”

        People are such hopeless idealists!

    5. lannie loeks

      I just heard from 2 law firms that specialize in foreclosure that ‘no judge in California will listen to arguments that the Bank doesn’t have standing for whatever reason.
      several reasons…Judge is predjudiced “they just want a free house” as above.
      Judges fear the flood gates will open.
      Judges are unstudied and don’t understand that families are being fleeced by the banks.

  5. Sundog

    Jonathan Kwitny: “Still, despite poverty, misery and injustice, the people of Zaire can be grateful to the people of the United States for one thing: we have kept their country from communism. What is less widely considered, but equally true, however, is that we have also kept it from capitalism — or at least anything that might remotely resemble a free market. And therein lies a key to many of the world’s problems. The free market is demonstrably the most bountiful economic system on earth. And it has become the odd role of the United States of America to deny that system to hundreds of millions of people the world wide.” as quoted in Raymond W. Baker, “Capitalism’s Achilles Heel”, p. 141)

    The bird has come home to roost. Zollen’s take could well be expressed in cold war terms: “That creditor may be a son of a bitch but he’s our son of a bitch.”

  6. bmeisen

    Thanks for making this available. Liked Zulueta’s heads-up response to Jellen’s first virtual clubbing: “I’m not asking for a free house, your Honor.”

    1. Just Tired

      Zulueta came off like a real lawyer — thinking that somewhere in the process lies a discussion about the facts and the a law. Chun came off like a sycophant — may I take your order, Judge — which is where too many lawyers end up sooner or later. And the judge….H. L. Menken once said, “A judge is a law student who marks his own examination papers.”

  7. yankeefrankee

    Ya see, he’s a big important federal judge, and he ain’t gonna be swindled by some two-time pro se peon who’s playing “lawyer-ball” in his court room.

  8. Random Observer

    Yves, it’s Judge Jellen, not Zellen.

    FYI, the #1 issue on appeal is whether Judge Jellen erred by granting Zulueta only 8 minutes and not a full and complete opportunity to argue his objection to claim.

    The closest thing to “legal reasoning” in the proceeding is the statement that debtor is not getting a free house. This should be remanded, especially in light of the Judge’s order, which provides absolutely no findings of fact or law to support his order. No findings of fact = no appellate deference to the judge below.

  9. Jeremy

    “Pro se Felipe” was killin’ it in there. He was the only guy in there who sounded like a lawyer.

  10. This Ain't no Police State

    A tenured individual can be ousted. Impeachment. (Trial, the hearing of witnesses, and the introduction of evidence.)

  11. Bam_Man

    This what “the end of credit” looks like, and it is just the beginning. Rest assured, it will be quite a spectacle.

  12. Tigercrane

    Zulueta should have hired a bankruptcy attorney. There are many in his area who understand these issues very well and could have presented them to best advantage. This hearing was winnable and he wasn’t able to get there because he didn’t have the skills to present the whole argument coherently. It’s painful to see someone bring a butter knife to the shootout when the other side has guns.

    1. leapfrog

      I agree, Tigercrane. I’ve hired a very good BK atty who loves to go to trial. There is no way I would take such a gamble with my one shot at getting this thing right, by botching something up and representing myself. I know its a crap-shoot, but at least I have a professional fighting on my side. I am not expecting a “free house” either – as a matter of fact I hate that term. But then why is an entity that cannot prove owernship think its entitled to a “free house” either?

      1. Just Tired

        Zulueta did fine, maybe by blind-pig luck but so what. The only thing a lawyer would have brought to the party is Fear. Fear on the part of the judge that he would be reversed on appeal. As one previous poster pointed out (I assume he was a lawyer), Zuleta has a very good record for appeal, and it cost him only his own time. With all due respect, your argument suggests that Jellen, leaped to the conclusion that Zulueta would be “getting a free house” solely because Zueleta was not a member of the bar. Jellen made it very clear that that was his reasoning: “you don’t get a free house” period. And, with that background you suggest that an experienced lawyer would have made Jellen, think, well maybe a free house for Zulueta was not so bad after all. Nonsense. For whatever reason, Jellen made up his mind that if Zueleta was going to get a free house(which despite Zueleta’s clever response was exactly what was on the table), it was going to be because of the appellate court, and not Jellen. (Like, I don’t get paid enough to do this). So Jellen gave Zueleta his record and punted. Like I said, but for his own time, Zueleta got this for free. I say that’s one smart dude! Now,handling the appeal, that’s another matter.

    2. JasonRines

      What is happening is that many defendents cannot afford a bankruptcy attorney. Necessity is the mother of all invention, including defendents educating themselves. As an astute commentator above opined, the Judges are not amused. America has fully become a two-tiered society or have and have nots. The have nots will continue onward until it directly effects the personal property of those that made the rules to tilt in their favor putting the property and very lives in danger. This will take many forms and once this inevitability is more manifest, those making the rules will begrudgingly power share.

  13. Mish

    It’s worth remembering that years back, Mish devoted countless blog space to the desirability of the mortgage “walk away”, those with the ability to make their payments, but whose financial position could be enhanced by property abandonment. He later went on to advise legal counsel before such a step. Perhaps Mr. Zulueta was simply following Mish’s earlier advice.

    So what is the objection to the free house? If it’s all in Mr. Zulueta’s best interest, it is in keeping with the law?

    Mish also holds the position that essentially all public labor contracts should be discarded, as their creation is the result of fraud involving politicians and union leaders.

    Good luck in trying to square this circle. Mish’s definition of common sense departs radically from most other’s.

    Jean it would help if your comments made any sense at all.

    Yes I am an advocate of walking away. Please note when someone walks away, they lose the house.

    You are making the idiotic argument that walking away means owning a house free and clear.

    This person did not pay his mortgage and lost the house. Justice was served. That should not be so tough to figure out now should it?

    Yes I do advocate getting rid of public unions. I presented a strong case many times in many ways how public unions make people slaves. You failed to say anything about my arguments, you just threw mud.

    Moreover, and in the first place, the union debate nothing to do with today’s argument at hand.

    Jean, I advise you to think before you write, or you will make yourself look even more foolish than you do now.


    1. razzz

      As soon as the Debtor said “MERS” that judge wanted out of there.

      And I don’t blame judge for wanting out of there since there is no way he could show cause for his findings now or then. This from a Federal judge within his scope to hear and rule on the arguments…if he elected to hear both side of the arguments including the MSR with the actual controlling document in this case, the PSA (a 99.5% chance the mortgage was pooled).

    2. Anonymous Jones

      “I advise you to think before you write.”

      You are living in the biggest glass mansion I’ve ever seen…

    3. F. Beard

      Mish is (mostly) consistent so stop insulting him. He believes in the Austrian theory that a short, sharp recession is the cure for the economy. He also has long opposed the current banking system while some of you support it (Yes, I mean you Philip P)!

      I disagree with Mish on some things but he is no jerk.

      1. ambrit

        Mr Beard;
        I must agree with you. This process is the definition of “public discourse.” As long as someone presents a coherent and reasoned arguement for their position, who are we to censor them? Mz Smith has certain standards for discourse on her blog and, absent egregious conduct, is quite tolerant. We can do no less.
        On another front, who really cares if someone is a ‘jerk’ or not, provided they meet the minimum standards for rational arguement? Look at the history of science. Many pioneers in the field were roundly castigated for being; antisocial, opinionated, vulgar, rude, haughty, etc. etc. They still did good work and advanced the boundaries of civilization. So folks, let’s concentrate on the evidence and leave the character assasinations at home.

    4. TraderGreg


      You don’t have a clue what you are talking about. That’s why I stopped reading your blog. Sad – but you continue to go down the sewer, and no bottom in sight.

      You miss the legal argument: ownership, note, etc. – oh well, just ignore it, too much for you.

    5. Fifi

      ZOMG! The real Mish himself! The One!

      No seriously, you are wrong on this one. There is an issue of standing and that’s a core principle of law at stakes there. If Deutsche Bank can’t keep its paperwork straight, it’s its problem, even if it benefits a weaselly debtor for a while.

      And yes, you are utterly over the top and awfully predictable, ideological and single minded in some opinions and some matters.

      But contra TraderGreg, I still read you for the totally off-the-beaten tracks insights and news highlights you offer on a regular basis. Don’t worry. Knowing your biases, I always check, recheck and re-recheck each time I have a aha moment after reading something on your blog, to make sure it’s not you going out on a limb and that there is indeed a there there. But, once something passes my Mish-O-meter, I’m say the signal to noise ratio is pretty good.

      If only for one thing, I owe you a debt of gratitude for pointing very early on that deflation (and zero-bound) could be a very serious issue in this cycle. You DID save me a boatload of money. So, thank you.

      Please, do keep ranting :-)

  14. US Luddite

    These iniquitous contracts mean little, other then a successful degradation of freedoom.

  15. Jean


    You applaud the judge’s “common sense” decision. I do not, as written by Random Observer … “The closest thing to “legal reasoning” in the proceeding is the statement that debtor is not getting a free house. This should be remanded, especially in light of the Judge’s order, which provides absolutely no findings of fact or law to support his order. No findings of fact = no appellate deference to the judge below.” I do not see judicial “common sense” at play here. I do not applaud a court order based on a the need that no one get a free house. That does not equal advocating for a free house. I am an advocate of due process. You appear to place the desired final result/action above due process. That’s genuinely frightening stuff.

    There is a connection between your advocacy of “walking away” (with which BTW I do not concur). You support the walking away, but only if the borrower loses the house. My position is that once the “walking away” lands in court, due process must be afforded to both parties.

    I made no representation of the entirety of your anti-public union stance, and am not interested in arguing it here. But, like it or not, legal contracts are in play here. You have many times stated those contracts can be dismissed as fraudulent, without ever showing anything to support that.

    You can lash out all you like, but there are people who simultaneously think and do not agree with your positions.

    1. Key Cases

      “You have many times stated those contracts can be dismissed as fraudulent, without ever showing anything to support that. ”
      They were all fraud, we just can’t admit it yet. Ironic similarity to nuclear disaster, such as the one that faded in the early spring.

  16. Blurtman


    I concur with F Beard. Let’s have a debate based upon facts, and not name calling.

  17. highplainslawer

    Well, I practiced Bankruptcy law for over 25 years and I see nothing wrong with what the judge did. What I did see in the transcript was a pro se client who did not have a clue about what he was doing or how to present a case.

    This was basically the wrong forumn for this dispute. The validity of the lien really needs to be determined in state court.

    The debtor does not get a free house. If the mortgage company does not have a valid lien, the trustee sells the property and distributes the proceeds to the debtor’s creditors. It is interesting that the trustee was not even present.

    1. Yves Smith Post author

      I sincerely doubt you are a BK lawyer.

      I’d like to say I don’t mean to be harsh, but you asked for it. What about standing and “proof of claim” don’t you understand? You put your foot in mouth and chewed with this one “The validity of the lien really needs to be determined in state court.” WTF? One of the most important jobs of the BK court is to determine the validity of claims and the priority among them.

      And BKs aren’t handled in state court, and bankruptcy courts routinely opine on real estate and securitization matters in the course of Chapter 13 cases, in fact some of the most important rulings on this front have been in bankruptcy court.

      Don’t make stuff up here, there are too many readers who know better and will call you out.

      1. Thomas Barton, JD

        Yves, I think you are being unduly harsh on the 25 year bankruptcy lawyer and the judge. The pro se petitioner was behaving essentially as a poorly schooled discovery action. He would have benefited from seeking a legal aid attorney who could have at least told him that he has some evidentiary burden to present to the court not just assertions of confusion. These cases scream out for large consolidation with the linchpin MERS connection being laid out in a solid evidentiary process. I wish that one of the friends of your monoline bond attorney named Tom would weigh in on this matter. I think that the appellate courts have been tardy in addressing the matter. Talk of free houses and ignorant judges does not provide a template for evidence in a court where affirmative evidence is always necessary to make positive headway.

        1. Jane Doe

          The burden is on the creditor rather than the debtor to prove their claim. To rely on formality here with a pro se defendant is absurd. Standing, proof of claim, is paramount to the bankruptcy system not being corrupt. Just like there are whole volumes on bankruptcy fraud by debtors. There are whole volumes on false claims regarding creditors. The views of you and others here would invite corruption.

          1. Random Observer

            Burden shifts to debtor to provide evidence of invalidity after creditor’s presentation of facially valid Proof of Claim. My reading was Debtor was attempting to use Creditor’s documents as evidence to meet his burden of challenging their facial validity.

            I would be surprised if the appellate court doesn’t remand and gently remind the judge of the rules governing the proper handling of pro se litigants. The judge’s focus seems to be on “No Free House” rather than taking the 15 seconds it would have taken to civilly explain to debtor the procedure I summarized in my first sentence.

          2. Jane Doe

            “facially valid” means something more than presentation of documents or else there is nothing more than corruption and circular reasoning.

      2. Just Tired

        I tend to agree with Yves. In a matter that involves federal jurisdiction, state law is applied unless federal law (in this case bankruptcy law) specifically preempts state law. I am not a lawyer but have had personal experience in this area of the law. It is hard for me to believe that there is federal law preempts California law in this case. Actually since my extensive personal experience (is I refer to it as misfortune), that California is a non-judicial foreclosure state. Unless one brings a lawsuit for some alleged bad acts by the lender (such as fraud) to stop a non-judicial foreclosure, the only place for recourse is in bankruptcy court. Zueleta has apparently not made any actionable allegations against the mortgage holder, he has only said follow the law and show me your paperwork. In other words, he is merely asking the bankruptcy court, as part of his overall bankruptcy proceeding,to verify that the mortgage holder has followed the non-judical foreclosure laws of the State of California. Again, that’s a non-lawyers take, learned from about 25 years in the School of Hard Knocks.

  18. chris

    I don’t think the issue is getting a free house. the judge is a fool and incapable of an original thought. The idea that the banks cut so many corners, created MERS to avoid fees and to avoid cost of processing, Failed to follow PSA guidelines etc etc….put the eoncomy in a deep freeze.
    If the bank would do the prudent business thing like modify loans as fast as possible then no one would have to go through this crap to try and get them to actually come to the table and do what they should have done just because it makes sense from a cost perspective.
    the judge is ignorant and so is anyone that agrees with this ruling.

  19. indio007

    This case is a loser. the judge asked him for evidence and he failed to provide any. HIS OWN TESTIMONY IS SUFFICIENT. Arguing like an attorney when you are pro se is a death knell.
    You don’t argue that it fraud you testify that it’s fraud. You are a witness to everything when you are pro se.

    Only a pro se defendant and the notary can identify absolutely the authenticity of a document. A straight denial goes a long way.

    1. Jane Doe

      You have no idea what you are talking about. Typically when a judges sees a pro se defendant they do not treat them as if a lawyer is arguing the case. Moreover the problem with the case is no the pro se, but the judges position. One of the cornerstones of bankruptcy law is standing. Without, it does not matter how the judge feels about ‘free house.” The judge was simply wrong here. It is not a close call.

      1. indio007

        Formalisms will ultimately be his down fall in appeals.

        Contrary to belief the appeals court only looks at “the record”. This guy didn’t add anything to it. In fact, he allowed the other side enter more evidence without objection. That’s what the appeal court will rule on. Evidence in the record. There is the best evidence rule. There is evidence the note was transferred. Notes can pass by assignment. The authenticity of that assignment should have been attacked.

        I would have asked the judge point blank.” If they tried to sell you this debt with this paperwork would you buy it?”

        1. Just Tired

          Indio — you have to be a lawyer and I would bet that Jane Doe is too. My money is on Jane. Try to do something else on your day off. The appeal is about how much time Zueleta got to make his points. Naturally, he would have made all of the points you suggest if he had the time. Where I part company with most is that I think the judge set this up for Zueleta to win. He just was not going to make the call and risk (no matter how small the probability) that he made the decision and was later reversed. That’s how CA works. Give Zueleta his record, and let the big boys who make the big bucks do the heavy lifting. If you asked the judge if he would buy the paper, he would just as likely told you to shut and sit down. No matter what you said, you would have lost just like Zueleta.

        2. indio007

          No I’m not a lawyer. It seems that that every man is presumed to know the law an ignorance of the law is no excuse, it seems not knowing it is at your own peril.

  20. bob goodwin

    I am late to this thread, and would surely love to see the banks hoisted upon their own petard. But as I play out my fantasies, I find an outcome that is unacceptable to society at large. The primary role of law is consistency not fairness. I am guessing that the judiciary will always lean towards “your not getting a free house” and interpret law with that slant. If my fantasy case, when the paper work is so shoddy that even the judges can’t abide, then the legislature will step in.

    Governments have a long history of adjudicating bubbles after the fact, such as setting prices and making markets for colapsing tulip bulb prices.

    If more than a few people create real trouble in the courts, the legislatures will simply make MERS practices the law of the land.

    I sure hope I am wrong.

  21. ericmcsquare


    The Judge’s ruling will likely be affirmed (the 9th Circuit may criticize the Judge’s courtroom demeanor but in the end that will likely do nothing to overturn the opinion).

    The reason the ruling is likely to be affirmed is that in BKY the filing of a Proof of Claim (POC) is considered prima facie evidence that the debt is valid. The debtor has the option of filing an object and presenting evidence of the invalidity or unenforcability of the debt. If the debtor presents such evidence (exhibits of oral testimony) then it falls upon the creditor to rebut such evidence. In the event the creditor rebuts the evidence the POC stands. In the event the creditor does not sufficiently rebut the evidence the POC is either reduced or struck.

    In this case, the Debtor’s response of “No” to the Judge’s question “do you have any evidence” on page 3 line 24 was fatal to his objection.

    Never state that you have no evidence in an objection to POC as that is the surest way to lose (if Debtor states they have no evidence the Judge will be required to overrule their objection no matter the Debtor’s oratory skills).

    1. indio007

      That’s exactly what I was trying to say. The guy should have been ready to give his own testimony about the authenticity of the documents. I have still never figured out how one testifies pro se. DO you get to just go on a rant?

  22. Debtor

    The information provided on bankruptcy court judge Edward Zellen was very useful.It is always good to know that their are blogs so dedicated to providing information that is seriously concerned with the reader’s needs.Thanks for sharing your insights with us through your blog.

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