Free Housers Lose Evidence Challenges at 9th Circuit BAP on Business Records Hearsay Exception
Pro-per Debtors with four bankruptcies under their belts and with 104 months of mortgage payment default (8.6 years) lost their appeal of the bankruptcy court's order granting relief from stay to the secured lender. The house had already been foreclosed but the appeal was not moot because relief was also sought to pursue an unlawful detainer action to evict the Debtors, and the record did not indicate whether the Debtors had been evicted.
The Debtors apparently challenged every aspect of the loan, including the secured creditor's standing and that they never borrowed the money in the first place, but the BAP focused on two aspects of the appeal related to the evidence presented by the secured creditor on the whereabouts of the original note and whether the secured creditor's declaratory evidence by a bank vice president satisfied the business records exception to the hearsay rule to establish the creditor's standing and that the bank had possession of the original note. The court found the delcaratory evidence met the exception. While not a surprising outcome, the opinion reviews the requirements for meeting the business records exception to a hearsay objection to evidence.
While ultimately unsuccessful in getting their house for free, their tenacity got them almost 9 years rent free and a bit of a legal education. Opinion here.