Federal Judge Refuses to Dismiss Bank Break-In Case Against JP Morgan, Lender Processing Services

In the sordid underworld of foreclosure-related reporting, certain stories have started to develop a prototypical feel. Bank Forecloses on Wrong Home. Bank Forecloses on Home with No Mortgage. Bank Refuses Even to Talk About Short Sale. Bank Sends Borrower into HAMP-Created Hall of Mirrors and Forecloses Anyhow.

The problem with stories becoming cliched is that the force of the recognition of the injustice loses some of its punch with repetition. But one type of story still seems to trigger well warranted outrage in the public: Bank Breaks Into House.

It still seems incredible to most citizens that banks can break locks, go into houses, remove property, and the police don’t consider it to be a crime, even when a bank agent breaks into the wrong home. Since banks routinely force their way into houses during foreclosures, the police apparently can’t wrap their minds around the fact that servicers might be going into houses they aren’t entitled to invade.

One case that got national attention was that of Nancy Jacobini. A company hired by JP Morgan to manage properties broke into her home while she was inside even though the property was not in foreclosure:

video platformvideo managementvideo solutionsvideo player

And to add insult to injury, the bank broke in a second time, after Jacobini had filed suit in Federal court. The lame excuses made, that she was not paying her utilities and had abandoned the house, were simply untrue.

Jacobini’s attorney Matt Weidner obtained a favorable ruling today on the bank’s actions. If you read the order, the judge clearly does not buy the bank’s position that it had a broad right to enter the house. The judge looks to the limitations put on the banks’ right to gain access and dismissed JP Morgan’s motion to dismiss, except with regards to a claim regarding good faith and fair dealing (a motion generally included in most suits related to contracts but seldom meaningful on a practical level). The logic of the ruling suggests this case is not looking good for the bank side.

Jacobini Order November 23, 2011

Nevertheless, her attorney, Matt Weidner, is appealing this order. Why? Get this: JP Morgan had NO legal relationship to Jacobini at the time of the break ins. It has filed a robo-signed assignment of mortgage that post-dates the break-in. The practical implication is that random financial institutions are being allowed to barge into people’s properties, and the only recourse they have is a slow, costly adjudication.

Let’s hope that Jacobini succeeds in making this sort of abuse costly for JP Morgan. Hitting banks in the wallet may be the only way to get their attention.

I hope

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  1. Bhikshni Lozang Trinlae

    Thanks to OWS for focusing lame stream media on public’s abuse by the banks (LSM sugar daddys)

  2. YankeeFrank

    It is disgusting how illiterate our culture has become that the rule of law is mocked and derided in favor of simplistic and glib assertions. One can be tortured or disappeared upon accusation of “terrorism”, because obviously if the state declares you as such, you must be dangerous. A bank can illegally break into the home of someone who is behind on their mortgage because they are “clearly” a “deadbeat” and “deserve” whatever punishment they get. The hard-won and wise protections of the constitution and common law are disregarded in favor of state and corporate (any difference these days?) “efficiency”. It all comes down to the facile reduction of our rights in favor of “law and order” by a people that doesn’t know its own, not to mention world, history. If the people continue on this slide towards a sad illiterate know-it-all state of being, we are finished as a civilized society.

    1. jake chase

      The beginning of the end was really the New Deal, when otherwise intelligent people decided that only an all powerful Federal government was big and strong enough to resolve the problem of a moribund private sector. Now we have a national security state, a counterterrorism state, an expediency state, all run by shyster politicians whose only credentials are a glib tongue and a willingness to turn tricks on behalf of campaign contributors. The only result is continual enhancement of predatory corporate power, relentless looting, to an accompanyment of never ending propaganda. Yet nine out of ten people continue clammoring for Government to “do something”. Hayek and Rand saw all this coming, and they are now villified, even on this site (especially on this site), as tools of the predatory rich. It makes you wonder how many people even bother to read books any more.

      1. Doug Terpstra

        The beginning of the end was really the New Deal…

        Now there’s a declarative stretch of revisionism. The New Deal somehow begat ‘voodoo’ supply-side Reaganomics; union-busting; the deregulation of S&Ls, telecoms, hedgies, trusts, and faux-media monopolies; globalized war, tax cuts for plutocrats, rigged-trade pacts, and free-racket cannibalism? Oh, and it was the New Deal that gave us almost three boom-bust decades of Ayn Rand-acolyte maestro Greenspan as chairman of the Criminal Reserve Cartel? Really? Nice try.

        As Clint Eastwood said, “Extremism is so easy. You’ve got your position, and that’s it. It doesn’t take much thought. And when you go far enough to the right you meet the same idiots coming around from the left.”

        Rand’s absolutist ideology was a violent pendulum swing from her life of furtive paranoia under Soviet totalitarianism. But ironically, her own bloodless objectivism, licentious libertarianism, unavoidably morphs into its own perversion of might-makes-right authoritarianism. The snake eats its tail as the rugged individualists are inexorably transmuted into the corporate kleptocracy we suffer now (only a bit longer). Rand’s noble hero, ubër-architect Howard Roark demolishes his own artistically-compromised buildings, and Soviet “communism” begets US fascism.

        This is the beauty of the OWS movement. It cannot be reduced to a catechism of absolutist ideology with a litany of negotiation points. It is not about socialism versus free enterprise; it is not about a retro creed or dogma; it is about spirit, the next revolution in human evolution, a transfiguration of society greater than the agricultural or industrial revolutions.

        1. Up the Ante

          You have hit the nail on the head, Mr. Terpstra.

          jake chase’s version is the shill’s near-final version of covering their tracks.

          Can you imagine how brain-fukt someone must be to even generate such a train of linkages, lol ?

          (jake really wants to tell us it was Glass-Steagall that did it)

        2. GeorgeSalt

          Great post. Google “Big Sister Is Watching You,” Whittaker Chamber’s review of “Atlas Shrugged.” Chambers noted some of the same things you mentioned:

          “Nor has the author, apparently, brooded on the degree to which, in a wicked world, a materialism of the Right and a materialism of the Left first surprisingly resemble, then, in action, tend to blend each with each, because, while differing at the top in avowed purpose, and possibly in conflict there, at bottom they are much the same thing. The embarrassing similarities between Hitler’s National Socialism and Stalin’s brand of Communism are familiar. For the world, as seen in materialist view from the Right, scarcely differs from the same world seen in materialist view from the Left. The question becomes chiefly: who is to run that world in whose interests, or perhaps, at best, who can run it more efficiently?”

          That’s why I always chuckle when some Randroid presumes to be a champion of freedom.

      2. F. Beard

        The beginning of the end was really the New Deal, jake chase

        Wrong! The beginning of the End was not later than 1913.

        Too much Limbaugh?

        1. jake chase

          The real beginning of the end was Alexander Hamilton’s federal assumption of State Revolutionary War debt at par. He created a class of millionaire speculators who gobbled up western lands and forced farmer settlors to buy on mortgage at inflated prices. The same farmers were taxed to service the debt. In those days the taxes were the excise variety, principally on liquor, I believe.

    2. Christophe

      YankeeFrank, there is a full article hiding in your post just waiting to be written.

      How do buzzwords like “efficiency”, “law and order”, and “terrorism” manage to appropriate new meanings and connotations to themselves as they grow to effect a near-religious fervor in the populace?
      Why does the populace allow the distorting prisms of these new ideologies to overwhelm its ability to judge what is in its best interest?
      In whose best interest is it to place these ideological straight jackets around people’s ability to think rationally?
      How do the spin doctors use the media to slowly weave these restrictive outlooks in the psyches of their audience?
      Is it our fear, greed, arrogance, or laziness (inherent in all of us) which leaves us so vulnerable to this kind of misdirection?
      Would strengthening our confidence, generosity, modesty, or diligence (inherent in all of us) be the best corrective for our current warped perspective and abdication of responsibility?

      Thank you for writing such a fertile post and for jogging my frame of reference. I will begin considering people’s actions and speech from the perspective of whether it favors efficiency and order or wisdom and thoughtfulness.

    3. Christophe

      P.S. I am sorry that your worthy thread was hijacked by a thoughtless efficiency worshiper. Please post more threads on this subject soon to encourage a richer debate.

      1. LeonovaBalletRusse

        My, what a high horse you ride, Christophe. You might be the re-incarnation of William Buckley, Jr.

    4. Ramone

      Are there any reports of a bank agent breaking into a house … either the ‘right’ one or ‘wrong’ one and getting shot as a burglar?

      Sounds like dangerous business to me : /

  3. Michelle Fig

    This video talks about Safeguard as the largest company that handles the ‘securing’ of these homes and the company associated with the Jacobini case, but the title of this blog says Lender Processing Services. (?)

      1. LeonovaBalletRusse

        Oh, yeah, PL – What are *contractors* for but for the principal’s “release from liability?” So clever.

  4. F. Beard

    It still seems incredible to most citizens that banks can break locks, go into houses, remove property, and the police don’t consider it to be a crime, even when a bank agent breaks into the wrong home. Yves Smith

    When will we realize that banks are not a necessary evil and that they are just evil?

    Banking is based on counterfeiting and special government privileges. Usury is the least of banking sins and even that is forbidden between fellow countrymen in the Bible.

    As for banking being a utility that is a bogus argument. Yes, only one set of water and sewage pipes are practical but ANY number of private currencies are doable with computers and modern communications.

      1. F. Beard

        Reminds me of the college joke whose punch line is:

        “Do you know how many Aggies it takes to get a pound of brains?!”

        I went to an A&M myself.

  5. Capt. Jack

    I have to share this Happy Thanksgiving Story sent to me by a friend.

    Despite a stay on foreclosures being ordered by a Federal Judge – the villainous foreclosure mill Harmon Law attempted to illegally conduct an auction yesterday as a sweet holiday gesture. Harmon Law met their match on the porch steps of the Grady family.

    Threatened by a lawsuit, the Harmon goons thought better of the idea, got back in their black cars, and retreated to their lair.

    A Happy Thanksgiving Story for the Grady Family

    (Link takes you to The Hamlet)

    Sometimes it really is a Wonderful Life…

  6. PL

    “JP Morgan had NO legal relationship to Jacobini at the time of the break ins. It has filed a robo-signed assignment of mortgage that post-dates the break-in.”

    Ah, let me guess, Chase argues owning the promissory note is sufficient to allow it to enforce terms of the mortgage such as preservation of property? Therein lies the larger issue; when does a legal relationship between a bank-mortgagor and a mortgagee arise? Black letter law says the relationship arises upon Assignment of Mortgage. If the assignment hasn’t been made then a bank which merely owns the promissory note can’t enforce terms of the mortgage. This situation is similar to a bank instituting foreclosure before the mortgage is assigned to it, just a different context.

    1. Yves Smith Post author

      Chase is not the owner of the note. It’s almost certainly supposed to be in a securitization trust and Chase as servicer is agent of the trust. Small scale samples in New York show that in 2/3 of the cases, non-Countrywide notes don’t have the correct endorsements and thus legally are in some indeterminate state earlier in the securitization chain.

      1. PL

        The usual scenario would be one where a securitized trust owns the note, but here the court order states Chase currently holds the note and owns the mortgage. If Chase is the servicer, then the Assignment of Mortgage piece doesn’t fit.

  7. Ray Phenicie

    The banking industry has sided with the thug occupying the White House and for many folks Mr. Obama can do no wrong.
    The history of the Presidency in the last 50years can be summed up in brief:
    With the exception of Jimmy Carter, the ascent of candidates to the 1600 Pennsylvania Ave residence has been that of a minor thug to major criminal status. Nixon’s history exemplifies that best with the final scenes in 1973 of a man running through the White House foaming at the mouth. Bush Sr. was head of the CIA under Nixon, Bush Jr. was the epitome of a wimpy small town crook, and now Obama evinces the aura of a slick Cosa Nostra operative.

    1. Binky the perspicacious bear

      I think as standard practice the banks get behind anybody in power who can help them execute their desired policy, even were it to be Rand Paul, Ron Paul, Ru Paul, or Ralph Nader.

  8. alex

    Yves: “Since banks routinely force their way into houses during foreclosures”

    Do they? I thought they had to hire the sheriff’s department to evict someone (which in the worst case involves deputies having to force their way in). Under what circumstances can a bank or its private agents (i.e. not the sheriff’s dept.) forcibly enter an occupied home?

    1. PL

      Mortgage holders may enter for purposes of property preservation, maintenance and security (if permitted under the terms of the mortgage.)

      1. alex

        But surely there must be some requirement (statutory or case if not contractual) the the lender has to first make a reasonable attempt to contact the owner or something.

          1. PL

            The mortgage contains reasonableness standards. The bank must have “reasonable cause” to enter upon “reasonable notice.” Clearly neither criteria was met in this case.

  9. Jeff

    I wonder if any bank has ever broken into an occupied home, or one that might be occupied where there are firearms and citizens willing to use them on the intruders once they set foot through the door?

    Terms for locksmiths and bank agents to learn:

    property line,
    building envelope,
    reasonable warning,
    fear of life,
    breaking and entering,
    body mass,
    vital organs,
    hollow points,
    Second Amendment.

    1. PL

      If the courts don’t uphold the rule of law, then some people may resort to self help (fight intruders). That dangerous scenario may be avoided requiring banks to hold the mortgage and note before taking steps any toward property preservation or foreclosure. It’s up to the judges whether we have a society of law or anarchy, because the legislature and the executive branches have abdicated.

    2. LeonovaBalletRusse

      Right, Jeff. What is the legal definition of *to trespass*?

      “Private property” is the cornerstone of the *Capitalist* religion in America. This is why the 1% began with their *eminent domain* putsch decades ago.

    1. LeonovaBalletRusse

      JanR, thanks for the link, with information on *Maritime Law* and its abuse, indespensable to our comprehension of *the big picture*. For even in the U.S. Navy, the *chain of custody* of each and every item passing through hands or instruments for transportation is of *paramount importance*.

      We see the predominant Anglo-American powertrain: from “Her Majesty’s [British] Imperial Navy” unto the U.S. Navy and Coast Guard from “sea to shining sea”. This reminds us of why the Carolinas still have such clout in *financial politics*. Charleston no longer is home to the retired U.S. Navy brass, so now it ranks above its official station.

      And now, “We are a Pacific nation,” with carriers and other vessels based in every major body of water in the world, missile-ready. This explains why Iran has been devoting its riches NOT to a nuclear bomb, but to various mine-laying vessels in The Persian Gulf, and super-fast craft armed with “impenetrable missiles” ready to strike *Great Satan*.

      Do they really think they are going to win?

      Empire is all, no matter how you slice it.

  10. rotter

    Ive never felt the need or the desire to own a gun before now. But maybe ill just head to wal mart and pick up something simple, and keep it behins the couch and hope, and pray,that “a company hired by JP Morgan breaks into my home while im there”.Happy Thanksgiving!

    1. Wentworth

      No, I don’t really think you do. Chase’s rent-a-cops show up, see your shotgun, and call for police backup. Police arrive, with an amazing amount of lethal gear, searchlights, negotiators, SWAT personnel, probably a TV crew or two in tow, and entirely swept aside are niceties like who’s house it is, and which courthouse that darn little piece of paper is, etc etc., because you and your shotgun have suddenly made you into someone the cops need to take down by any means necessary. It can only end one of two ways: you take a perp walk to the copcar under your own power in full surrender mode, or you get ridden out of your house on a gurney bleeding from numerous holes. Either of those alternatives appeal to you?

      Actually, I AM kind of surprised not to have read about some of these bank goons trying to foreclose on armed militia types. If there ever was a situation where this 2nd-amendment stuff seems ideally suited, wrongful foreclosure would seem to be it.

      1. LeonovaBalletRusse

        Then they might zap or electrocute you with a Tazer, or give you a *tranquilizer* or other *injected substance; then you might be dragged to the psychiatric *gulag* archipelago. No, best to pay up and lay low. No?

        Recall the vivid imagery of the film “CABARET”. Brute force does work against a *recalcitrant* or *impure* population. Compare with the ultimate intimidation *room* of last resort in Orwell’s “Nineteen Eighty-Four.”

  11. McKillop

    In the ’80s, in Calgary, Canada, a man by the name of Valentine fell afoul of the bank(rbc, I think)in that payment of his mortgage was interruptd.
    He claimed that the bank had erred and that he had also attempted to pay the mortage, either outright or by resuming the monthly payments.
    I am unclear as to specific details.
    At he time, he owed about $28,000.00 on a home that had increased -owing to a bubble formed in Canada’s oil patch- to a value of $280,000.
    The bank dispatched two employees to Valentine’s home, whereupon he held the employees captive, at gunpoint.
    The newspaper reports failed to hold my attention, but I did meet Mr. Valentine personally a few years later, after he had been released from prison, once he had become ruined.
    He told me his story, tried to show me the documentation and manuscript that he had that was going to expose the injustice that had taken his worth and sent him to prison.
    From what I understand, usaian cops are much more “shoot-em up” than Canadian cops.
    It’s o.k. to talk tough but I hope many of you people who are claiming the right to violent defense remember that you are ‘always out-numbered, always out-gunned’.
    The muckymucks at banks can always hire more goons, yeh?
    (so perhaps we might say, “always out-numbered, always out-gooned.)

    1. Evan

      I don’t know what rights apply in Alberta. In Tennessee, I would assume that anyone not wearing a police or fire department uniform while forcibly entering my locked, occupied home intends to harm me or my family. I would use any weapon at my disposal, not to hold the intruder, but to terminate the threat.

      1. foxwizard

        While it is true that under both the US Constitution and English Common Law one is permitted to use sufficient force to defend one’s family, almost everyone who has used a gun to defend their home and family in the last decade or so has ended up going to jail. Despite liberal gun laws to the contrary, the authorities take a dim view of people protecting themselves in these United States, and it will be an even dimmer view if the offense is protecting one’s family from a corporation perpetrating a crime.

        So, if you own a gun either don’t use it or keep a criminal attorney on retainer.

        1. Evan

          Excellent point. Actually, my gun is locked, and therefore would not be rapidly available in such an unlikely and sudden event. However, almost every home is full of improvisable weapons, from cutlery to sports equipment to the contents of the tool drawer.

          I think the key is whether the resident reasonably believes there is a threat of harm, and chooses to respond or surrender to a potential attacker. Obviously you can’t just maim someone who clearly only wants to change your lock.

          1. Attitude_Check

            If you fire a weapon at someone breaking into your house make sure they are dead. If you can’t or won’t do that then don’t even get your weapon.

  12. Jim Davey

    It is just a matter of time before someone is killed … breaking into my home would lead to the certain natural instincts (law enforcement training … I’ll only fire to stop the threat not to kill as is the law, but I’ll write the report. The persons entering will likely not ever write anything … or testify … but to the pearly gate … hope they prepare really good answers. It is coming. Not if. Just when?

Comments are closed.