Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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Ben Tuey

A & B are a Married - A signs both note and mortgage, B only signs mortgage. Foreclosure filed naming A & B as defendants. A dies. Judicial State.

Can the Note be enforced against B?  Can the foreclosure proceed against B?

thanking all in advance,

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poe
Yes, and it surely will.
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poe
clarification: the note can only be enforced against the person who signed it, but it doesn't matter because the debt will be enforced against the house itself, so to speak. 
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Kris
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A & B are a Married - A signs both note and mortgage, B only signs mortgage. Foreclosure filed naming A & B as defendants. A dies. Judicial State.

Can the Note be enforced against B? Can the foreclosure proceed against B?


The answer is not nearly as cut and dried as indicated in the prior response and the answer may and probably will vary somewhat from state to state depending upon particular statutory provisions and case law enunciations as to the law of property as well as probate laws. A state's marriage laws may also come into play. And the precise form of ownership is also of great importance.

To the extent that B has granted a valid mortgage of B's interest, the Lender can usually proceed with a foreclosure of B's interest in the property.

But where A is a co-owner and a maker of the note, the Lender would usually have to join A in the cause of action and after A's death, A's personal representative -- executor or administrator -- or A's heirs would usually have to be joined in the action. Moreover, in many states, a claim for money against an estate needs to be first presented to the personal representative and allowed or rejected before a creditor can sue on a claim.

The interest of a spouse in a co-owned property is treated very differently under the property laws of different states. In some places, B may automatically succeed to A's interest (in the residence). In other places it may depend upon how title was taken, etc.

Unless B was also a guarantor of the instrument, the Lender would usually have only an action in equity against B under the mortgage. While the Lender could very well bring such an action against only B, one of B's seemingly valid defenses if such an action was filed would be a plea in abatement of some sort (varies by jursidiction), pointing out that an essential party has been omitted as a defendant.

One equitable maxim is that "Equity delights to do justice and not by halves". That is, if what is sought in equity is justice shouldn't all the interested parties be brought before the court to resolve all issues in a single action?

On the other hand, like virtually every other defense, the defense which is not plead and argued is usually waived, so if the Lender proceeds against B ONLY and obtains a judgment, especially by default, the Lender would tend to extinguish B's interest in the real property without respect to any of the other details mentioned above.

However, it should be noted that in a foreclosure against B only, usually it is only B's interest that would be foreclosed.

Whether A has any remaining interest would depend wholly upon the other factors above mentioned and particularly whether the form of ownership vested A's interest in B at A's death (e.g. tenants by the entirety or joint tenants with a right of survivorship, subject to unique state law treatment).

If A still owns half (or some other portion of the property) a foreclosure of B's interest would leave the Lender (or winning bidder) and A's estate as co-owners of the property. If B owns the entire property, then the Lender might only need to foreclose as to B. B could still demand that the estate be joined in the action, since the note might still be a valid obligation of the estate and B may be entitled to insist that the estate make good on the obligation to avoid the foreclosure.

If there is any source of cheer in this situation, it is that the foreclosure mills usually have a very poor understanding of probate law (though it is improving). Since these foreclosure mills tend to cut corners and give each case the short shrift, if you school yourself up on foreclosure law, the law of real property, probate law and equity, you might be able to grind them to at least a standstill for some extended period of time.

I am aware of one very sharp pro se litigant who has kept the Lender at bay for seven years. The plaintiff has made numerous mistakes in that case and may lose the case outright due to these mistakes. It is unlikely that most would succeed this well, but a strong capable defense could very well draw the matter out longer.

Also, others have previously commented on the strategy and desirability of minimizing the information you communicate to the plaintiff. If you give the plaintiff a LOT of information and coach them along when they make mistakes, by pointing out the mistakes, then you are very likely to lose quickly and surely. By contrast, if you are very sparing in the information you provide, then you might do very well.

For example, many borrowers think that the very first thing they should do is call up the bank and tell them that A is dead. That will surely be of great help to the bank because it helps them to avoid so many procedural mistakes. By contrast, I know of one instance where the Lender sued a dead man and obtained a judgment against the dead man. Two years later, the heirs got the Lender to expressly agree to vacate the judgment since it was void. In most states, a judgment against a dead man is not merely voidable, but absolutely void. Last I heard, four years into the matter, the Lender still didn't have a valid judgment. If the heirs had called up the bank or the law office and helped them correct all of their various mistakes throughout the original proceeding, the hosue would have been lost several years ago.

Look for that thread on avoiding taking the Lender to school!
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poe
Whatever happens, I'm sorry for your loss, and don't lose hope.  Cases on this website and in  courts which match your own circumstances as closely as possible will give you some insight on how you may be impacted by this misfortune. 
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Ellis
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poe - tu --

mason = criminal mine


I think Mason's answer should probably be appreciated for what I take it to be, which is satirization and reinforcement of the point made in the previous post.

I doubt that Mason is actually encouraging anyone to embark upon this particular strategy, but the underlying point Mason makes is still valid. When the plaintiff is litigating with complete and accurate information, getting a valid, final judgment can be quick and easy. By contrast, when a plaintiff lacks accurate information, it may very well proceed and make one or more serious legal mistakes.

It was discussed in another thread that the very last thing that a defendant wants to do is to be calling a plaintiff's timely attention to various mistakes and legal errors made by a plaintiff. That is, in Mr. Roper's words "taking the plaintiff to school". Without orchestrating outright misrepresentations, a much better strategy is usually to tell the Lender and the Lender's attorneys NOTHING. Any good attorney will tell a client in both criminal and civil litigation to "Shut Up". Avoid talking about the case with the opposition or even anyone else who could be questioned or deposed.
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poe
This is a complicated situation, because  it now involves more than one area of litigation, and there is no way to begin to understand anyone's situation. Just find a good attorney if you can do that, who specializes in probate.  But try to understand it yourself, as well. When it comes to day to day things, think about being re-active, more than pro active. 
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Johnny

Here is another case a homeowner needs help with: "A" died three years before the suit was filed and before the alleged cause of action accrued. "A" was never in default and "B" paid all payments as agreed until a loan mod process became "dual-tracking" for more than a year. "B" kept paying as agreed during loan mod process, but was surprised with a foreclosure suit, more than a year later. "B" did not owe the debt.

After suspecting forgery in multiple versions of the note (each and all filed as true), "B" filed a motion to compel discovery and court delayed ruling for four months, then denied discovery at the same time it granted summary judgment to the defunct servicer. This servicer does not exist and had not existed for almost two years at the time it won summary judgment. Opposing counsel filed a motion for summary judgment but never substituted the Plaintiff. FTC documents show that the servicer was merged with and into another entity, so it was merged out of existence. The remaining party to the merger denied, in writing, owning the note and mortgage, and named another party as the creditor to whom the debt is due. On record.

"A" was sued in personam and in rem and remained a defendant with "B" until summary judgment was granted. In the judgment entry only A and B are defendants, the court finds that "A" should be dismissed from the case, and rendered the judgment in rem against "B" for the alleged amount due, but "B" didn't sign the note. The court did not expressly dismiss "A" but just rule against "B" in rem.

"A" was sued in personam and in rem, but court only "finds" that "A" should be dismissed, but does not do so. Is it possible that only half of the property is in the judgment? "B" has homestead possession rights, but "B" did sign the mortgage.

Several months after the commencement, the servicer, by counsel, moved to add parties, which included heirs, assigns, personal representatives, etc, but not the estate. These added parties were not mentioned in the journal entry.

It seems that the judgment might be void and all the proceedings too, since the decedent had died two years before the lawsuit was filed, but was sued in personam and in rem--wasn't dismissed until summary judgment, if then. No personal representative was appointed when the petition was amended to add parties. Only "A" and "B" are the defendants in the journal entry.

The journal entry states that "A" and "B" did make and deliver a note and mortgage ... but "B" didn't make a note. This fact is clear on the record made in the proceedings. 

The Plaintiff named in the judgment is still the defunct servicer, who sued in its own name and did not make any claim of being an agent or rep of any other entity.

Is it possible that the court had no jurisdiction over "A" and should have dismissed the case at commencement as a nullity, and if that is not correct, then is it possible that the court lost subject-matter jurisdiction when the servicer ceased to exist and no substitution was made? Opposing counsel concealed this material fact for two years. "B" responded to give notice of the Plaintiff's demise, but opposing counsel convinced the court that the defunct servicer was a subsidiary of the "too big to fail bank," thus it was the same as being filed in the "too big to fail bank's" name. The money, he said, would go to the bank in the end. (Fannie Mae owned in 2011, according to the lookup tool, but now the tool says it doesn't own the loan. Fannie was never mentioned.) "B" presented certified docs from Sec. of State of terminating the servicer who won. State law prohibits terminated partnerships from maintaining any action, proceeding, or suit in any court in the state.  My question is how can the deed after sale go to a party who doesn't exist? Or since the law firm purports to have the original note (the authenticity was disputed) can it just fill in the blank and get the deed to my home, since it has no client?

I am hoping that the judgment can be vacated as void due to lack of jurisdiction (neither the debtor or the creditor exist), violation of rights to due process of law (delaying then denying discovery), and fraud was used to procure the judgment. (Concealing the demise of the Plaintiff for two years, and filing forged [by-alteration] negotiable instruments.)

If anyone has any thoughts about this summary judgment mess, I would appreciate the comments.

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$&?!

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After suspecting forgery in multiple versions of the note (each and all filed as true), "B" filed a motion to compel discovery and court delayed ruling for four months, then denied discovery at the same time it granted summary judgment to the defunct servicer.

Filing a motion to compel isn't usually going to get the matter resolved unless the motion is also scheduled for hearing.  If B failed to set the motion for hearing, then it is unsurprising that the court would deny the motion when it entered summary judgment.

Issues with regard to discovery are usually within the sound discretion of the trial court and are only very rarely disturbed on appeal.  Whether to compel discovery is a different (though related) issue than whether to continue a matter due to a party's lack of preparedness for summary judgment.  The Rules set forth an express procedure for obtaining a continuance when additional discovery is necessary.  Compliance with that procedure is mandatory.  See Federal Rule 56(d) or your state's equivalent:

"(d) When Facts Are Unavailable to the Nonmovant.  If a nonmovant shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition, the court may:
(1) defer considering the motion or deny it;
(2) allow time to obtain affidavits or declarations or to take discovery; or
(3) issue any other appropriate order."

If B complied with the procedure and made a compelling motion to continue under 56(d) fully supported by proper affidavit, perhaps B can get this judgment reversed on appeal.  If B failed to comply with the required procedure, then the appellate court is unlikely to reverse.  This would never be an issue that would void a judgment.

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This servicer does not exist and had not existed for almost two years at the time it won summary judgment. Opposing counsel filed a motion for summary judgment but never substituted the Plaintiff. FTC documents show that the servicer was merged with and into another entity, so it was merged out of existence. The remaining party to the merger denied, in writing, owning the note and mortgage, and named another party as the creditor to whom the debt is due. On record.

This is an issue of capacity and does not implicate the jurisdiction of the court.  Admittedly, this is a little confusing.

If X sues Y and Y is actually dead, then a judgment entered against Y is usually void for reasons discussed in other threads by Mr. Roper, myself and others.  The central defect in such an instance is that a court can never really obtain personal jurisdiction over a dead person.  No jurisdiction means that the judgment is void.

However if X sues Y and X is dead, this is quite another different problem.  X has seemingly invoked the jurisdiction of the court (possibly through fraudulent representations about X's continued life and existence), but since X is dead X lacks the capacity to sue.  Capacity is not jurisdictional.  Moreover, there are special pleading rules regarding capacity.  See Rule 9(a):

"(a) Capacity or Authority to Sue; Legal Existence.
(1) In General. Except when required to show that the court has jurisdiction, a pleading need not allege:
(A) a party's capacity to sue or be sued;
(B) a party's authority to sue or be sued in a representative capacity; or
(C) the legal existence of an organized association of persons that is made a party.
(2) Raising Those Issues. To raise any of those issues, a party must do so by a specific denial, which must state any supporting facts that are peculiarly within the party's knowledge."


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"A" was sued in personam and in rem and remained a defendant with "B" until summary judgment was granted. In the judgment entry only A and B are defendants, the court finds that "A" should be dismissed from the case, and rendered the judgment in rem against "B" for the alleged amount due, but "B" didn't sign the note. The court did not expressly dismiss "A" but just rule against "B" in rem.

If the court had entered a judgment against a dead party, A, the judgment would be void as against A.  But that would not make the judgment void against B.

Interestingly, the plaintiff has set and sprung a trap for B.  By excluding A from the judgment, the plaintiff has not done anything that would implicate the validity of the judgment.  The judgment is not in any way defective for failing to mention or include language which dismisses A.  Rather, it is NOT a final judgment, since it fails to resolve all pending claims against all parties.  What B should have done when the judgment was prepared was to demand that the language dismissing A be included.

Now, if A seeks to appeal the judgment, the appellate court can and probably will dismiss the appeal.  Most interlocutory orders are NOT appealable and the court of appeals usually lacks jurisdiction to even hear an appeal unless and until a final judgment has been entered.

Thus, when B actually does appeal the Lender sits back and allows time to run by as it proceeds to move forward with the foreclosure sale of the property.  The Lender gets an order confirming the sale and even an order of ejectment and has the sheriff toss B out on the street.  After completing these aspects of the foreclosure, the Lender points out to the court of appeals that the trial court never entered a final order and that the appeal is premature.  B's appeal is then dismissed.  B is then also homeless and confused.  B thinks that the courts are corrupt, but the courts are simply following well established and clearly articulated rules.  The court of appeals has no authority to hear the appeal, because the judgment wasn't final!

*

There is nothing defective in any way about rendering a judgment against B in rem in respect of a default in the note by A.  The judgment is (or should be) against the property.  B agreed that the property would be security for the repayment of the loan by A.

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"A" was sued in personam and in rem, but court only "finds" that "A" should be dismissed, but does not do so. Is it possible that only half of the property is in the judgment? "B" has homestead possession rights, but "B" did sign the mortgage.

Whether A's interest in the property has been foreclosed depends completely upon the form of ownership and the state laws of property of the jurisdiction.  If A and B are married and took title to the property as tenants by the entirety (or B's state's equivalent) in respect of being husband and wife, B may have succeeded to A's interest in the property outside of probate upon A's death.  Similarly, if A and B owned the property as joint tenants with a right of survivorship, then B may have succeeded to A's interest upon A's death.

In either case, if B owned the property, then the Lender usually completes a legally effective foreclosure merely by suing B.  The foreclosure is usually effective not only against B's original interest, but also against an "after acquired" interest by B.  That is B mortgage not only B's current interest but any and all later interest also acquired by B.

By contrast, if A and B are unrelated and own the property as tenants in common, then usually a foreclosure of B's interest would not implicate A's ownership interest in the property.  But the failure of the Lender to foreclose A's interest does not implicate the validity of the judgment against B.  There is nothing void about such a judgment.  It is usually legally effective against B's interest.  But the foreclosure is still incomplete.  To acquire valid title, the Lender really would still need to foreclose against A.  But this does nothing to reinstate B in the property and the Lender's ejectment of B can be complete even without further proceeding against A (there might be some instances where B might still have some rights to occupy the property if B was an heir at law to A, but this too would depend upon state law and the wording of the orders).

Most foreclosure mills are not particularly confused about any of this.  If the Lender got a final judgment against B only, it was probably because that was all that was needed.  Excluding A from the judgment was a little trick to cause A to expend unnecessary funds and energy filing an appeal, only to discover that the appeal was premature and useless.

If B was using an attorney, especially one of the sleazy Florida defensive foreclosure mills, these firms would next usually tell the defendant, "Oh, you need to pay us an additional $10,000 to supplement your retainer if you want us to get A dismissed and file a new appeal!"

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Several months after the commencement, the servicer, by counsel, moved to add parties, which included heirs, assigns, personal representatives, etc, but not the estate. These added parties were not mentioned in the journal entry.

The plaintiff's motion to add other parties was defensive in case B argued that there was a defect in parties.  When B failed to make the necessary and proper defensive arguments in B's answer, the plaintiff found it unnecessary to pursue the other parties.

One of the equitable defenses available to B was to argue that there was a defect in parties.  In equity, a plaintiff must typically name and serve, bringing to court, every party with an interest in the equitable outcome.  When the plaintiff fails to do this, the defendant should file some sort of plea in abatement (or B's state's equivalent).  When effectively interposed, this does not prevent the foreclosure but abates -- stops -- the foreclosure from moving forward until all of the necessary parties are joined.

If B fails to make this defensive argument, the argument is waived.  Unless B complained about a defect in parties and the plaintiff's failure to bring all of the parties before the court, then B usually cannot complain about this on appeal.  The issue will have been completely waived.  This is never an issue that would implicate the validity of a judgment or render a judgment void or even voidable.

See also Rule 21:

http://www.law.cornell.edu/rules/frcp/rule_21

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It seems that the judgment might be void and all the proceedings too, since the decedent had died two years before the lawsuit was filed, but was sued in personam and in rem--wasn't dismissed until summary judgment, if then. No personal representative was appointed when the petition was amended to add parties. Only "A" and "B" are the defendants in the journal entry.

Nothing in the facts you recite or describe is suggestive that the judgment would be in any way void or even voidable!  The judgment might be legally erroneous if B raised the proper arguments in the answer and then supported these arguments with proper summary judgment evidence.

If A had been named in the judgment, the judgment might then be void as to A.  Even so, such a judgment would probably be legally effective against B.

There is no duty by the court to reach a determination as to A UNLESS and until one of the parties to the matter seeks the Court's determination, by motion, for which hearing is scheduled or determination is expressly requested by submission.  B could have moved for the case to be dismissed as to A and set that motion for hearing.  Or B could have interposed an equitable defense as to a defect in parties through some plea in abatement and set that plea for hearing.  In failing to do either, the court was under no compulsion to discover, recognize and rule on the defect arising from A being dead.  Similarly, the plaintiff could have brought the matter to a head by seeking a hearing and ruling on its motion to substitute.  It seems likely that they didn't both when B failed to make the correct defensive arguments.

Since the plaintiff perceived that B was an idiot and that B didn't know what B was doing, it sat back and let B make these mistakes.  The foreclosure mill lawyers probably got a good chuckle over these mistakes.

There isn't an appealable issue here because B never complained of the matter to the trial court.

A court hearing a foreclosure case in most states would not have any authority at all to appoint a "personal representative".  That would be something that would be done in a separate probate proceeding.  In some places the same courts hear both kinds of matters, in other places, like New York and Texas, there are special courts (NY Surrogate's Court, TX Statutory Probate Courts or County Courts at Law) that hear probate matters.  If both A and B were dead or if A was dead and A was the sole owner of the property, then the suit would usually have to be brought against A's personal representative OR A's heirs at law.

Here, again, is where pro se litigants are their own worst enemy.  Under the probate laws in most places, where a creditor is owed money by a decedent the creditor can initiate probate proceeding.  Since this is costly and time consuming, the Lender doesn't want to do this.  They want for the borrower's family to go out of pocket for the fees for probate attorneys.

So the Lender engages in a form of saber rattling.  They send a few threatening letters or call the borrower's widow, etc.  Maybe they post a large notice on the property.

Most idiots will call up the bank and proceed to tell the bank all sorts of things that really ought never to have been communicated.  The bank's representative gets the borrower to give all manner of detail as to the identity of the heirs, etc.  Then, after they have obtained all of the information they want, they will tell the heirs that they cannot deal with the heirs unless and until a personal representative is appointed.  Next, the heirs rush out and give $$$ to a mediocre and corrupt probate attorney.  The attorney examines the matter and quickly learns that the case is already LOST because of the information communicated to the bank by the heirs before retaining the attorney.  So the attorney files the routine regular probate paperwork and goes on vacation to spend the client's retainer.  After returning from vacation, the heirs are told that the retainer is exhausted and that they need to send more $$$, etc.

After the heirs pay the probate lawyers anywhere from $10,000 to $20,000, they are told that they need to employ another separate law firm if they want to resist the foreclosure.  Then the probate attorneys get a nice referral fee from the defensive foreclosure mills and can take another vacation at the heirs' expense.

The best strategy is usually to TELL THE BANK NOTHING and to DO NOTHING in respect of probate.  If the bank sues a single decedent and gets a judgment, then the judgment is usually void.  The bank may make this mistake unless they are coached by the heirs who seem always to eager to help speed the foreclosure along.  The bank WANTS the heirs to initiate probate and to get a personal representative appointed, because that allows the foreclosure to go forward.  Usually, a lender will wait one or two years before pushing forward with initiating probate, because they can almost always rely upon some idiot heir rushing into court to get the probate underway.  (Of course there may be other valid reasons for heirs to initiate probate where there exist other assets that need to be distributed or other bills that need to be paid.)

There is no monolithicly correct strategy when the borrower has died.  The strategy depends upon the unique facts of each situation and the laws of each state.  But the very WORST THING TO DO is to call up the bank and give the bank a lot of information that they can use to speed the foreclosure.

When the heirs call the bank and spill their guts, a foreclosure can often be accomplished as fast or faster than when the defendant is living.  When the heirs are cautious and avoid communicating with the bank and when the heirs take the time to read the probate laws, the rules and the cases, usually it takes from three to ten years to complete a foreclosure in respect of a single decedent.

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The journal entry states that "A" and "B" did make and deliver a note and mortgage ... but "B" didn't make a note.  This fact is clear on the record made in the proceedings.

Here, again, you show a complete misunderstanding and ignorance of the law and how things really work.  When you say that the judgment recites that B made the note, you are complaining that the court reached an erroneous conclusion.  Simply because the court made a mistake, it does not follow that the judgment is void or even voidable.

One of the very first problems that B is presented with is that usually B cannot complain on appeal about issues not raised and presented to the trial court.  To the extent that B effectively argued in defense that A was not a maker of the note, perhaps this issue is sufficiently preserved, but this might still be a close question.  It may also have been necessary for B to raise the defect in this journal entry by way of some motion to correct the judgment.  (It may still be possible to do this if the order was an interlocutory order and not a final judgment due to the failure to fully dismiss A.)

It is possible that if B fails to seek correction of the error that the matter cannot be complained about on appeal.  B needs to carefully read the pleadings, motions and other documents on file, as well as the rules and cases on the rules to see whether this can be complained about on appeal without raising the issue by motion to correct the judgment.

Even if this issue could be appealed, the appellate court would usually simply correct the judgment by omitting the offending language:  B still loses the house, but the judgment no longer says that B was the maker of the note.  I fail to see how that is a particularly productive use of time and energy.  What is it that you proved?  Admittedly, the offending language might seem to subject you to a deficiency judgment, so this is possibly a very valid reason to get the language corrected.  But such a judgment can also be discharged in Bankruptcy.  I would try to get this fixed, but by moving for a correction of the judgment.  The Lender might even agree to a correction, though I doubt it against a pro se litigant who seems so hopelessly confused!

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The Plaintiff named in the judgment is still the defunct servicer, who sued in its own name and did not make any claim of being an agent or rep of any other entity.

As explained above, this is an issue of capacity and was probably waived.  If the argument was not properly raised in the answer, then it cannot be an issue on appeal.

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Is it possible that the court had no jurisdiction over "A" and should have dismissed the case at commencement as a nullity, and if that is not correct, then is it possible that the court lost subject-matter jurisdiction when the servicer ceased to exist and no substitution was made?

The court lacked jurisdiction over A.  But the court also didn't name A in the judgment.  A has not been harmed and the failure to obtain jurisdiction has no effect whatsoever over the court's valid jurisdiction over B.  If B was properly named and served, then the court had personal jurisdiction over B.  Even if B was never served at all, if B answered and participated in the suit then the court had valid personal jurisdiction over B.

The cessation of existence of a corporate entity is a matter of capacity.  Even the cessation of existence is probably problematic.  A little known trick that the Lenders and foreclosure mills have been doing for several years (brought out by Mr. Roper in posts here at the Forum since deleted by the site administrator) is to continue paying corporate franchise fees for various defunct entities.  If you check the corporate records in several states, you will find that entities that have been out of business for several years SEEM to still exist.  (This may or may not be the case with the plaintiff in A and B's case.)  When the corporate franchise taxes are paid, this makes it appear that the entity still exists and can make it hard to mount an effective capacity defense.

But if the capacity defense is not properly interposed in the answer, it is completely waived.  There are no circumstances where this sort of capacity problem would divest a court of subject matter jurisdiction.  You have been reading the specious posts by the scam artists.  There is simply no merit to this whatsoever.

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Opposing counsel concealed this material fact for two years. "B" responded to give notice of the Plaintiff's demise, but opposing counsel convinced the court that the defunct servicer was a subsidiary of the "too big to fail bank," thus it was the same as being filed in the "too big to fail bank's" name. The money, he said, would go to the bank in the end. (Fannie Mae owned in 2011, according to the lookup tool, but now the tool says it doesn't own the loan. Fannie was never mentioned.) "B" presented certified docs from Sec. of State of terminating the servicer who won. State law prohibits terminated partnerships from maintaining any action, proceeding, or suit in any court in the state.  My question is how can the deed after sale go to a party who doesn't exist? Or since the law firm purports to have the original note (the authenticity was disputed) can it just fill in the blank and get the deed to my home, since it has no client?

If the capacity defense was properly plead in the answer -- and it sounds from your rambling that it was not -- then this could be a robust issue on appeal.  If capacity was not properly plead, then the defense may be "outside the pleadings".  The matter still might have been tried by consent, in which case it could still be an appealable issue.  See Rule 15(b):

http://www.law.cornell.edu/rules/frcp/rule_15

Unfortunately, because B seems to have spent his or her time reading various vacuous arguments made by scam artists and has adopted the scam artists' legally erroneous vocabulary, it seems likely that B has flushed this case down the toilet.

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I am hoping that the judgment can be vacated as void due to lack of jurisdiction (neither the debtor or the creditor exist), violation of rights to due process of law (delaying then denying discovery), and fraud was used to procure the judgment. (Concealing the demise of the Plaintiff for two years, and filing forged [by-alteration] negotiable instruments.)

Again, nothing in your post suggests that the judgment would be void in any way.  There does not seem to be a jurisdictional issue.

The discovery issue isn't going to be a due process problem.  There exists a specific process in the rules to resolve discovery disputes.  There exists a specific process to obtain a continuance when a defendant lacks evidence to defend at summary judgment.  See Rule 56(d). 

Since the Rules expressly ABSOLVE EVERY plaintiff of any duty to plead the valid existence of the plaintiff UNLESS and UNTIL a defendant raises a capacity defense, your assertion that the plaintiff engaged in any fraud is going to ring rather hollow.  See Rule 9(a)(1).  The plaintiff is going to simply point out that B didn't properly and timely make the capacity argument and that therefore the plaintiff was under no duty to make any representation to the court at all.  Unless B properly raised the capacity argument with a defense compliant with Rule 9(a)(2), the plaintiff will argue that B waived the capacity issue and that the matter was outside of the pleadings at summary judgment.  If B made this argument and denominated it erroneously as an affirmative defense rather than as a defense, B may have waived the burden of proof on this issue.  This was discussed at length in anther recent thread.

Still, to any extent that the matter was properly raised and framed, then there could be a valid appeal issue.  But the issue is NOT fraud, which is exceptionally difficult to prove.  You have adopted the language of the swindlers and scam artists, which is an almost certain route to the loss of your property.  The appeal issue would be that there was a [i]disputed issue of material fact about the plaintiff's capacity, precluding summary judgment.[/b]  You see, you do not need to prove the plaintiff's lack of capacity.  All you need to do is raise a valid fact issue about capacity to survive summary judgment. 

Even uttering the word "fraud" is a complete mistake.  Fraud IS an affirmative defense upon which B would bear the burden of proof.  And as an affirmative defense, B would have to PROVE fraud to survive summary judgment.

However, there are a few things to realize about this.  First, in order for their to be a dispute as to this material fact, B needed to put in some evidence IN PROPER EVIDENTIARY FORM.  For summary judgment, this means that the information needed to come in (a) by affidavit, (b) discovery responses, (c) CERTIFIED COPIES OF PUBLIC RECORDS, etc.  See Rule 56(c).  If B simply attached copies of documents found on the Internet without properly proving these up, this is NO PROOF AT ALL.

Still, there is one other fleeting hope if B really properly plead capacity.  And here, yet again, we see how essential it is to carefully read and understand Mr. Roper's posts, because he has clearly shown everyone the path to prevail!

If B validly interposed the capacity defense, as a defense rather than erroneously denominating it as an affirmative defense, then it was the plaintiff's burden of proof to prove its own capacity!

Here, once again, we find that the postings of the scam artists and the mediocre and crooked defense foreclosure mills are totally off the mark.  Even when capacity is plead, these fools are still pleading this as an affirmative defense three years after Mr. Roper alerted everyone as to this mistake, which it is NOT.  [i]Capacity is never, ever an affirmative defense.[/b]  It is an essential element of every plaintiff's cause of action.  But the plaintiff is relieved of either pleading or proving capacity under Rule 9(a) UNLESS the defendant properly raises the issue in the answer.

So IF B properly raised the defense and AVOIDED the legal error of denominating this as an affirmative defense, then it was incumbent upon the plaintiff to come forward with valid summary judgment evidence showing its own capacity.

Even so, a statement in the plaintiff's affidavit of merit, even falsely averring valid capacity, might very well be enough UNLESS B properly OBJECTED to the summary judgment evidence arguing that the averment was conclusory, that the affiant lacked personal knowledge or that the averment was deficient under the Best Evidence Rule.

Once again, Mr. Roper showed the way to win this sort of argument.

If B's legal arguments were as poorly formulated and articulated as your post, then B seems to have correctly LOST the case and may have no valid appealable issues.

However, if B properly raised the capacity issue in the answer, but then lost this argument due to perjured representations by the plaintiff within an affidavit, this could be an issue which might be addressed in a well written and well support Rule 60(b) motion to vacate.

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Nelson
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Whether A's interest in the property has been foreclosed depends completely upon the form of ownership and the state laws of property of the jurisdiction. If A and B are married and took title to the property as tenants by the entirety (or B's state's equivalent) in respect of being husband and wife, B may have succeeded to A's interest in the property outside of probate upon A's death. Similarly, if A and B owned the property as joint tenants with a right of survivorship, then B may have succeeded to A's interest upon A's death.


Do you know of any Ohio cases about form of ownership and whether a decedent has to be named?
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$&?!
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Do you know of any Ohio cases about form of ownership and whether a decedent has to be named?


The 2nd District Court of Appeals handed down a decision that related to this topic last week:

James B. Nutter & Co. v. Phillips, 2013-Ohio-184 (Ohio App. 2nd Dist. 2013)

If you simply take the time to read all of the mortgage related decisions for your state as these are released each week, you can learn a great deal.  If you spend your time reading the drivel that is posted by scam artists at these supposed foreclosure defense web sites, you are almost certainly going to lose your case.  Most of what is posted by the swindlers is myth, distortion or hyperbole.  They are not actually trying to teach borrowers how to prevail.  They are seeking to draw new victims into their scams.
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Larry
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Interestingly, the plaintiff has set and sprung a trap for B. By excluding A from the judgment, the plaintiff has not done anything that would implicate the validity of the judgment. The judgment is not in any way defective for failing to mention or include language which dismisses A. Rather, it is NOT a final judgment, since it fails to resolve all pending claims against all parties. What B should have done when the judgment was prepared was to demand that the language dismissing A be included.

Now, if A seeks to appeal the judgment, the appellate court can and probably will dismiss the appeal. Most interlocutory orders are NOT appealable and the court of appeals usually lacks jurisdiction to even hear an appeal unless and until a final judgment has been entered.


We have a case like that in PA recently. Lender get order of foreclosure but do not get amount of damages in order. Since order of foreclosure lacked amount of damages, court held that it was not final appealable order.

HSBC BANK USA, NA v. Currie, No. 1083 EDA 2012 (Pa. Super. 2013)
http://scholar.google.com/scholar_case?case=5367415356972506506

I ask Mr. Roper about this. He say this is common trick. He say alway read rules! Again and again.
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poe
When a litigant has had a substantial right cut off or subjected to a final decision at any time in a case, doesn't that trigger the right to an appeal, with or without a final order ( proceeding w/caution, due to danger of res judicata on the same issue)? (in Ohio). It seems like there is a way to do that, but also, many appeals rejected for lack of final order.
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robt
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When a litigant has had a substantial right cut off or subjected to a final decision at any time in a case, doesn't that trigger the right to an appeal, with or without a final order ( proceeding w/caution, due to danger of res judicata on the same issue)? (in Ohio). It seems like there is a way to do that, but also, many appeals rejected for lack of final order.


In almost every state and in Federal courts, orders which are not final orders -- those deemed interlocutory orders -- are generally not appealable. Usually, by statute and rule, there are a handful of interlocutory orders that are specially designated as to be of a type that are subject to appeal. Yes, these sometimes involve substantial rights of parties, but that is an overly broad and uneven description and definition.

Examples of common interlocutory orders that are not usually appealable are docket control orders, order on motions to file amended pleadings, motions to dismiss (when denied), orders relating to discovery disputes, orders relating to motions for continuance, orders denying motions for summary judgment and so forth. Any of these might involve a rather significant or substantial right.

What usually distinguishes an interlocutory order from a final order is that the trial court usually retains the plenary jurisdiction and thus the authority to alter these orders.

For example, suppose that a court enters a docket control order setting some schedule for the case. There is nothing really final about such an order at all. Upon motion by any party, or sua sponte, the court can alter the scheduling order at any point throughout the case. In complex cases, a court may alter a scheduling order several times.

Motions to dismiss and motions for summary judgment are asymmetric as to whether a final order. Usually, when such motion is denied, the case continues and thus a denial of such a motion involves an interlocutory order. By contrast, when granted a motion to dismiss or motion for summary judgment would very often dispose of all issues and all parties (though some such motions might not, as in a motion to dismiss certain claims, but not others). (This also presents an interesting special situation when there are cross-motions for summary judgment by both the plaintiff and defendant. Usually the denial of a MSJ is not appealable, but if one motion is granted and one denied, both usually become appealable. By contrast, if both are denied, neither is usually appealable, at least until the conclusion of the case.)

This is a very practical approach. If the courts didn't follow such a rule, every case would be subject to continuing intermediate delays as parties appealed each and every order entered throughout the trial court's hearing and determination.

In thinking about interlocutory orders, bear in mind that it is not the case that such orders are not subject to appeal at all. This is not a correct statement of the law. Rather, the rule that an interlocutory order is not appealable really means that such an order is not appealable until the final conclusion of the case.

So if a party made a motion to amend it answer for example, and this motion was denied, the denial would not be subject to am immediate appeal, but rather would need to await the final adjudication of the case. Entry of the final order would make all of the previous interlocutory orders appealable.

Great care must be taken in distinguishing those orders which are interlocutory and non-appealable from the special matters for which interlocutory appeals are allowed. Again, these vary from state to state. Generally, when an interlocutory appeal is permitted it is to allow an early intervention by appellate courts in special issues that might help avoid an unnecessary and protracted consideration of a matter in the trial court. If an interlocutory order is directly appealable and an appeal isn't made, that issue might be immune from complaint at an appeal of the final order or judgment.

Take the time to read the statutes, rules and cases from your jurisdiction to understand the distinction.
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Lauren
In Texas, the rules on appeal of interlocutory orders are found in Tex. Civ. Parc. & Rem. Code 51.014:

http://www.statutes.legis.state.tx.us/Docs/CP/htm/CP.51.htm#51.014

This seems to be consistent with what others have posted about interlocutory orders above.
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Alan
For a discussion of the types of interlocutory orders appealable in Florida, see Florida Rule of Appellate Procedure 9.130. The analysis above by others about the appealability of interlocutory orders is correct and those taking the time to read the Florida appellate rule will see that the Rule is exactly consistent with the discussion above.
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helen
I have a similar case as Johnny. But the servicer was merged out of existence and the Sec. of State terminated its registration and provided certified documents to prove it. Servicer continued to maintain the suit. Successor by merger denies owning the loan (note and mortgage). Would capacity have to be pled if this statute is cited? The limited partnership was represented as a duly formed "corporation" in the petition, but it was formed and registered a limited partnership. Corporation's have a winding down period to include concluding lawsuit, but LPs don't. 


F.  A domestic limited partnership that has ceased to be in good standing or a foreign limited partnership that has ceased to be registered in this state may not maintain any action, suit or proceeding in any court of this state until the domestic limited partnership has been reinstated as a domestic limited partnership in good standing or the foreign limited partnership has been reinstated as a foreign limited partnership duly registered in this state.  An action, suit or proceeding may not be maintained in any court of this state by any successor or assignee of the domestic limited partnership or foreign limited partnership on any right, claim or demand arising out of the transaction of business by the domestic limited partnership after it has ceased to be in good standing or a foreign limited partnership that has ceased to be registered in this state until the domestic limited partnership or foreign limited partnership, or any person that has acquired all or substantially all of its assets, has caused the limited partnership to be reinstated as a domestic limited partnership in good standing or as a foreign limited partnership duly registered in this state, as applicable.

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Steve
Recent Illinois appeal opinion that foreclosures are quasi in rem not in rem. 



http://www.state.il.us/court/Opinions/SupremeCourt/2010/June/107954.pdf

http://www.americanbar.org/content/dam/aba/publishing/rpte_ereport/2010/6/RP_Levine.authcheckdam.pdf



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Poe
That was excellent. In Rem/Quasi-In Rem have been confusing concepts, and I was beginning to think they only applied in cases when the state was the Plaintiff, (taxes). Does anyone know if an "in rem" would need to state as much around the caption? Or would a real one just list the address of the property? And should a quasi-In Rem be identified from the beginning?
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Mel
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That was excellent. In Rem/Quasi-In Rem have been confusing concepts, and I was beginning to think they only applied in cases when the state was the Plaintiff, (taxes). Does anyone know if an "in rem" would need to state as much around the caption? Or would a real one just list the address of the property? And should a quasi-In Rem be identified from the beginning?


Over the years, the entire concept of in rem actions have fallen into increased disfavor. One might very well describe in rem as a legal theory in decline for more than a millenia.

Our U.S. Constitution with provision for due process rights and similar due course of law provisions in many state constitutions emphasize the right of a citizen to notice. In antiquity, cost of communication was high, mortality rates were low and the cost of assuring effective notice could often be disproportionate to the value of a case. The concept of in rem actions where a suit was brought against the thing rather than the person emerged as the most efficient way to resolve claims and issues about disputed property when a person was unavailable.

Modern practice and decisions emphasize the right of persons to effective notice whenever their rights are subject to adjudication, even in tax cases. In more and more instances, decisions have rejeected the in rem theories in favor of quasi in rem or even in personam actions with substituted service. One must take exceptional care in relying upon any older decisions discussing these doctrines.

True in rem actions now concern a very narrow set of issues, like the disposition of money or other property taken in a criminal seizure where those who might otherwise make a claim are not readily identifiable because no one wants to implicate themselves in the related crime.

Generally, Lenders are going to be reluctant to use any legal theory that fails to give a strong title in the property at conclusion. In other threads, there has recently been much discussion about void versus voidable judgments. One rather basic principle of law is that a judgment usually binds only those who are parties to a proceeding. Thus, if a suit is brought and the suit fails to name a critical party, the judgment may not be binding as to that person.

While an in rem action, properly brought, might be binding upon the property, it would not necessarily dispose of all rights of the other non-parties. Rules in most places require that defendants join in the same action all counterclaims arising out of the same set of facts. Parties then cannot later re-litigate the same issue on other theories. But this doesn't apply to non-participants. Thus, a non-participant could sometimes reopen a matter by bringing a new action unfettered by res judiciata.

There are a few places where foreclosures can involve some in rem theories. But this seems unlikely to be an avenue which would be relied upon except in exceptional circumstances. The plaintiff wants finality and also wants an insurable and marketable title at the conclusion of the foreclosure. Getting a judgment which could be later collaterally attacked or voided would impair the marketability and value of the subject property.
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Jock


[i]ABN Amro Mortgage Group v. McGahan, No. 107954, 931 N.E.2d 1190, 237 Ill.2d 526 (Ill. 2010)[/b]
http://scholar.google.com/scholar_case?case=10512605090112285483

This is hardly a new or startling development. The decision is now more than two years old and simply re-enunciates the holding of a prior U.S. Surpeme Court decision: [i]Freeman v. Alderson, 119 U.S. 185, 7 S.Ct. 165, 30 L.Ed. 372 (U.S. 1886)[/b]. See http://scholar.google.com/scholar_case?case=17949823749867308030 . An Illinois appellate court had muddled this concept at the invitation of some dishonest foreclosure mill law firms proceeding against unrepresented decendents who did not even intervene and participate in the appeal.

It should probably also be noted that several Forum participants have articulated some of the principles underlying the Illinois Supreme Court decision in McGahan in posts in other threads. They have noted that decisions against a dead person are usually void. They have also noted that decisions which do not name and serve a person do not usually bind a person. Basically, this decision shows that these posts are correct.
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poe
 In Ohio, they can move to substitute the Defendant for the personal representative, but it has to be in the right time frame. I'm not sure what that is. It depends on whether the claim was "contingent". I don't understand exactly what contingent means. Either side can do that. 
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Liam
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In Ohio, they can move to substitute the Defendant for the personal representative, but it has to be in the right time frame. I'm not sure what that is. It depends on whether the claim was "contingent". I don't understand exactly what contingent means. Either side can do that.


I cannot answer as to the rules in Ohio.

In some places, there is a different procedure used when a defendant originally named and served later dies (which involves the continuation of a suit already underway) than when the named defendant was dead when the suit was commenced.

The correct procedure isn't always simply a matter of a state's Rules of Civil Procedure or statutes relating generally to court procedures. Rather, the procedure often also involves the interplay between these procedural laws and rules and a state's probate statutes.

Procedures vary widely depending both upon the probate statutes and whether a state utilizes judicial or non-judicial foreclosure methods. In some states, the death of a borrower requires a judicial approach where a non-judicial foreclosure might have been otherwise possible. In some states, whether a Lender can proceed judicially or non-judicially also depends upon whether a decedent's estate is being handled non-judicially by an independent executor or judicially with a court supervised administration.

Another variable is whether the purported creditor is seeking only to enforce the mortgage, deed of trust, trust deed or other mortgage security instrument or whether the purported creditor is seeking to hold an estate liable under the note.

None of this is particularly easy to research or understand. It will take any borrower a great deal of time to get up to speed on both the procedural and the probate aspects of foreclosure in respect of the death of a borrower.

*

In some places, claims for money are handled differently than non-monetary claims. It is easy to see how that might be the case, since money claims can most readily be reduced to some amount certain, while some non-monitary claims cannot. Usually, contingent claims would be those which would be contingent upon some facts outside of the instrument. By definition, negotiable instruments would not usually be contingent claims. By contrast, a contract of guarantee or surety would be, since the liability of the guarantor would be usually be contigent upon the performance of the principal maker of the obligation.
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