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Legislative Corruption: Here There Everywhere - 'Produce the Note Foreclosure Bill'

Written by Subject: Housing
A gift from FreedomsPhoenix - Senior Editor Powell Gammill's Article for the  Inaugural Edition of FreedomsPhoenixe-Zine

by Powell Gammill
Senior Editor of

In Arizona, frequent political scandals makes a splash and then rapidly evaporate.   Rarely is it  covered by the local media...gosh, I wonder why?

Arizona politics is uproariously funny all of the time.  But if you look around where you live you will see the very same distractions in whatever ruling political entity you have that seizes your money and buys stuff and people with it.  It is a well honed, time honored predictable machine that spread like a cancer along with the wagon trains.  Wherever there is money, there quickly follows government.

In April of this year for instance, a Arizona Senator named Michele Reagan (R-Scottsdale) (2010 "donations") guided a bill through the Senate, SB1259, that would make the courts ask for proof that the party trying to foreclose upon another person's property produce the note to the property.     Seems reasonable?  [The reason she introduced the bill is she was screwed by her mortgage bank.  (see 2010, KPHO-TV5 video report here)  Coincidentally the federal suit was settled -- so sorry, "conditions undisclosed" -- on the very day the passed bill in the Senate was scuttled by a strike everything in the House with Sen. Reagan's permission.]

If I claim I own the property and you are behind in your payments for that property and I want my property back shouldn't I be able to produce the proof I actually own the land I am asking the court to seize and "return" to me?  In Arizona, apparently not.

Here is the funny part.  This is already Arizona law.  This is already the written court procedure. 

So Sen. Reagan's bill, which passed 28-2, was simply directing the courts to do what was already 400 years of Western property legal precedence and current stated procedure in the Arizona Court system.  Except the hilarious part: Arizona judges were taking the word that "we own the land" from their esteemed fellow members of the bar who are after all an "officer of the court" and thus would never, ever lie. 

This has become the common foreclosure procedure [actually throughout the nation].  Those current property "occupants" who produced their sale's agreement identifying the owner of record to the property in question as someone else were over-ruled and their objections ignored.  Land was being seized and given to lawyers submitting essentially a quit claim with the ink barely dry on behalf of clients for someone's land.  And court procedure set into place after decades of Arizona being known as a land fraud mecca, is once again back to assisting in the land swindles as it was in the 1970's.  Black robed pirates indeed.  I suppose they will be getting another shining edifice built in their honor---the typical bribe to the courts in Arizona; nicer digs.

So the overwhelmingly passed bill triumphantly travels to the Arizona House where who could possibly object to "show us the papers?" ;-)

Rep. Nancy McLain, (R-Bullhead City) (2010 "donations") the chairwoman of the Banking and Insurance committee takes it upon herself to strike all of the language in the bill and insert an unrelated fire services bill for her committee to review.  She explains why she did this here; 'to protect stupid people who were being foreclosed upon from having false hope.'  Nice.  You will also see she blames the bill being deliberately killed when it came to the House by the Speaker of the House, Rep. Andrew Tobin (R- Dewey) (2010 "donations").  ["I was just following orders."] 



The switch occurs during the hearing in the House (video):



My hat is off, and here is a little musical tribute for Ms. McLain's (video) abilities:

The only media in the state that has covered this scandal has been the CBS affiliate, KPHO-TV5.  Other so called news outlets with loans and advertising from the banks remain deaf, dumb and blind.  Yet this has been covered both nationally (ex., Huffington Post) and internationally (ex., Russia Today). 

Channel 5 interviewed both Rep. McLain and Sen. Reagan on April 25:

"Just to be clear, representative, it was solely your decision to not hear the original bill in committee, right?" asked reporter Elizabeth Erwin.

"That is correct, yes," Rep. McLain answered.

McLain said the bill would have given folks in foreclosure false hope and given those who just don't want to pay their mortgage a loophole to get out of forking over the cash.

How did she come to that conclusion?

"I call it the 'lobbyists employment act' because I had banker lobbyists, down (at the capitol) like crazy trying to kill this bill in the house," said Sen. Reagan.

"I've got to ask, did lobbyists have anything to do with your decision?" Erwin asked McLain.

"Well, there were people that came and talked to me about it," she responded.

This would normally be where the story ends.  But there was a politician presented with a new way to enrich himself when an outraged Realtor Darrell Blomberg -- who audits trustee sales -- approached him to ask if there wasn't anything he could do to revive SB1259 in its original form.  That politician, Rep. Carl Seel (R-Phoenix) (2010 "donations"; Clean Elections Whore) says sure there is something I can do, so he schedules to introduce a House version of SB1259 as an amendment.

But on the scheduled day he is to take the floor and offer the amendment he failed to appear or be found.  Whoop, deadline passed, so sorry.  Later, he says he changed his mind.  Alright, bought off, not unusual. 

But with him the paper trail to the bribe is clear.  A few days before he is to offer the amendment putting this bill back into play in the House he gets roughly an $102,000 amount gifted to him off of a reduction in the principle on his own home loan.  Sweet.  How do we know this? Mr. Blomberg had been hired to help try to get Rep. Seel's under water home's loan principle partly forgiven and had told him that it was unlikely he would get it reduced especially since Rep. Seel had already been turned down twice.  He got a 56% reduction!

KPHO-TV5 corners Rep. Seel at his now $102,000 cheaper home and asks him about this amazing coincidence and you can watch the video here as Seel does the "Sidestep" (no embed available):

"Your average homeowner in Arizona doesn't have that, 'I'm a legislator and I'm going to draft some legislation card' to play to force their lender's hand," Blomberg said.

"So you didn't use your position as a state representative to modify your home loan?" Erwin asked.

"None whatsoever. There's no connection whatsoever, and if need be I'll swear in court to that," Rep. Seel said.   [I hope, but doubt, that will be arranged by a prosecutor Rep. Seel.]

So there you have it.  Arizona lobbying at its finest done by banks.  The federally controlled (or controlling) institutions you entrust with your money if you are still gullible.  Feeling serviced?  And with the exception of a Phoenix TV News station who is actually reporting this news, the best coverage and why it is important is coming from Karl Denniger who is blogging on the other side of the nation.  This is so reminiscent of The Arizona Project only without the dead reporter.  [see also AZScam]  And I suspect now the story ends.  But there are so many other current stories in Arizona to tell....


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