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The People's Lawyer: Fighting Against Foreclosure Fraud and Courts' Abuse of Power

The People's Lawyer: Fighting Against Foreclosure Fraud and Courts' Abuse of Power
Wed, 6/3/2015 - by Senka Huskic

Attorney Scott Stafne, of Washington state, is known in foreclosure fraud circles as the “people’s lawyer” – one who not only understands the complicity of mortgage fraud, but who plays an active role on social media and elsewhere sharing his knowledge and opinions with the general public. For people facing their own foreclosures, neglected by their own government and pushed aside while the banks still continue with their old stealing practices, Stafne's engagement means a lot. Here he explain why he does what he does, and his motivations for fighting the big banks on behalf of the people.

Senka Huskic: How did a personal injury expert ended up covering and fighting foreclosure fraud? You’re a third-generation lawyer – were your father and grandfather involved in similar issues in their practice?

Attorney Scott Stafne: Foreclosure fraud is a type of personal injury, just one that our courts let the banks get away with. People who have their homes wrongfully taken from them experience all sorts of injuries, for which the common law of torts would normally provide a remedy.

My dad also practiced personal injury law and was part time City Attorney for Bettendorf, Iowa, which is on the Iowa side of the Quad Cities, across from Moline and Rock Island, Illinois. Dad gained significant experience in annexation law as Bettendorf grew over the course of my youth.

SH: In your appellate published brief Burkart vs MERS, you stated that "much of the mortgage foreclosure mess results from the judiciary’s lack of respect for the principles of federalism and state sovereignty guaranteed by the United States Constitution... What often happens [is] federal judges usurp the jurisdiction of state courts to decide state law so as to protect the interests of federal and national entities at the expense of local state interests, which have traditionally protected state property owners from fraud and injustice.” Explain why this is important.

SS: Our Constitution contemplates a federal system of governing where states share in power that limits the federal government’s powers. Those powers which are not given to the federal government are reserved to the states. The Constitution contemplates each state will have sovereignty over its own territory. There is no core sovereignty more fundamental than that of the state to control the distribution of land within its borders.

Typically, the federal Constitution and federal laws trump state constitutions and statutes. But state laws governing the distribution of land within the state are within the core sovereignty of the states and beyond the authority of Congress to regulate. The Supremacy Clause is very specific that only federal law, i.e. statutes and treaties enacted pursuant to the Constitution’s enumerated powers, are supreme. Thus, only federal court decisions construing federal law and treaties are supreme under the United States Constitution.

Federal court authority to construe state law is limited by federalism, which gives states like Washington the ultimate right to interpret its own laws, especially in areas where state sovereignty is contemplated by the U.S. Constitution. When the foreclosure meltdown began, federal banks, government service entities like Fannie Mae and Freddie Mac, and servicers sought the protection of federal courts against those borrowers who sued to prevent wrongful foreclosure. Rather than certify unresolved issues regarding Washington’s foreclosure law and the Washington Constitution to the Washington Supreme Court, federal courts decided to construe Washington law themselves.

I regard this as an abuse of power by the federal courts. Washington’s Constitution, like those of many states, specifically legislates with regard to the state government’s authority to dispose of real property within its borders. Federal courts lacked authority to construe the meaning of Washington’s Constitution in the first instance, but did so anyway.

Based on my research, it is obvious Washington’s Constitution prohibits enforcement of “power of sale” clauses in deed of trust agreements through nonjudicial foreclosures. Article II, section 28, subsection 9 of Washington’s Constitution states: “The legislature is prohibited from enacting any private or special laws in the following cases: … (9) From giving effect to invalid deeds, wills or other instruments.” Article IV, section 6 of Washington’s Constitution provides that all cases involving the title and possession of real property shall be within the original jurisdiction of the superior court. This provision states in pertinent part: “The superior court shall have original jurisdiction in all cases in equity and in all cases at law which involve the title or possession of real property…”

History teaches us that “power of sale” clauses were not enforceable in most states and territories of the United States during the 19th century. The Washington Territory followed the example of Oregon and Michigan in enacting legislation in 1969 to prevent their enforcement. Twenty years later, in 1889, the above constitutional provisions were enacted to prevent the legislature from ever allowing nonjudicial enforcement of such clauses.

SH: There are many flaws with MERS (Mortgage Electronic Registration Systems) and its legality is being questioned constantly? How this could happen – didn’t we have enough oversight of the banks or were those who were supposed to oversee their work corrupted?

SS: I think this economic collapse was carefully calculated as a means to redistribute wealth from the middle class to the wealthy. We lost any meaningful control over the banks during the Clinton administration. By the time several of them became “too big to fail” they had effectively purchased all three branches of our government and most state governments.

SH: How could we stop this and clean up what has occurred, making sure that something like this never happens again?

SS: I believe Americans will have to take to the streets in order to take their country back from the empire which has replaced it. We, the people, will have to join together at risk of peril to stand down the evil which has overcome our land.

SH: What is your take on multiple settlements between our government and the banks? It's not only that the banks are buying their way out of jail, but nothing has been done to help those who lost their homes via fraudulent foreclosures – the same issue which is the reason for these settlements.

SS: It appears obvious that servicers and debt collectors simply calculate economic penalties for violating laws into their cost of doing business. That is why such companies should be made liable to those whom they injure in an amount calculated to make the injured parties hold and deter the wrongdoers from further misconduct. I believe those directing and/or participating in such criminal enterprises should be jailed and/or executed (notwithstanding that I oppose the death penalty generally).

SH: Do you think that not enough people are challenging their foreclosures or do you think that our courts are mostly in favor of the banks and people think that they don’t have a chance in proving this fraud in the court of law? The Warren Group issued a report in March that said that "the number of foreclosure starts in January was 70 percent higher than the same month in 2014, rising from 364 to 618. Foreclosures have increased over the past year because mortgage companies and lenders were waiting for several important regulations and court rulings to be resolved.”

SS: I don’t believe people have much chance. I do not believe our courts are fair or just in this and many other areas of the law.

Comments

My father passed 5 yrs agoI need immediate assistance I think my mom is a current victim of foreclosure fraud she currently faces eviction please if you can
Point me and my family in the right direction
Thank you

I too have a family member in the process of fraudclosure.. Have you gotten any answers in your case?? Feeling Lost :(

If your in the new york area and need a good foreclosure attorney let me know i found one she has very good affordable prices .Im in foreclosure and i did alot of research to find the right attorney so contact me or text me or gmail me cell phone # is 3474099957 if i dont answer leave a message.

I know that these days none of the minority people are not represented. I worked on campaigns and know a candidate for We the People.

I think he may have a good approach, I for one am an Eco freak, re-education, feeding our starving American Children?

Love to hear some progressive or even aggressive resolves.

Thank you to all

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