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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JohnH
Even though the mortgage company brought this foreclosure suit against me in 2006, they only became owner and holder of the note by assignment a month ago. I am trying to find any Texas cases that might hold that they lacked standing in the first place. The hearing on their summary judgment is tomorrow, the one with the undisclosed, unknown affiant. I need all the help I can get.
Thank you,
JohnH.

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Knows About Standing
JohnH:

You certainly do wait until the 11th hour my friend!  I think that you are going to owe someone a beer!

I fear that you will find NO TEXAS MORTGAGE RELATED CASES on standing.

But happily for you, a past contributor to this site gave us a very nice exposition on standing as it is applied in Texas.  And the cases cited should give you a solid authority to challenge the plaintiff's standing.

You need look no further than an MS Fraud Forum search using obvious key words:  Texas AND standing.

Since standing is an implicit restraint upon the jurisdiciton of the Texas courts to adjudicate actual controversies and is imposed by the so-called "open courts" provision of the Texas Constitution, you might want to narrow your search by adding the search term "open courts".

Try searching the Forum for:  Texas AND standing AND "open courts"

I will take a look at some of my own notes and will seek to ADD to what has already been posted.

You might also want to correspond with the previous contributor who posted the material on standing.  He might have copies of some of the cases he cites.
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Knows About Standing
JohnH:

Here are a few more key abstracts from cases which might be useful in arguing standing in Texas:

“Subject matter jurisdiction is essential to the authority of a court to decide a case.  Standing is implicit in the concept of subject matter jurisdiction.  The standing requirement stems from two limitations on subject matter jurisdiction: the separation of powers doctrine and, in Texas, the open courts provision.  Subject matter jurisdiction is never presumed and cannot be waived.”  Texas Association of Business v. Texas Air Control Board, 852 S.W.2d 440 at 443, 444; 1993 Tex. LEXIS 22; 36 Tex. Sup. J. 607.

 

*

 

“A plaintiff must have both standing and capacity to bring a lawsuit.  Coastal Liquids Transp., 46 S.W.3d at 884.  The issue of standing focuses on whether a party has a sufficient relationship with the lawsuit so as to have a ‘justiciable interest’ in its outcome, whereas the issue of capacity ‘is conceived of as a procedural issue dealing with the personal qualifications of a party to litigate.’  6A CHARLES ALAN WRIGHT, ARTHUR R. MILLER, AND MARY KAY KANE, WRIGHT, MILLER & KANE, FEDERAL PRACTICE AND PROCEDURE: CIVIL 2D § 1559, at 441 (2d ed. 1990).  We have previously distinguished between these two threshold requirements as follows:

 

A plaintiff has standing when it is personally aggrieved, regardless of whether it is acting with legal authority; a party has capacity when it has the legal authority to act, regardless of whether it has a justiciable interest in the controversy.

 

Nootsie, Ltd. v. Williamson County Appraisal Dist., 925 S.W.2d 659, 661, 39 Tex. Sup.Ct. J. 1049 (Tex. 1996); see also 6A WRIGHT, MILLER, & KANE, FEDERAL PRACTICE AND PROCEDURE: CIVIL 2D § 1559, at 441 (‘Capacity has been defined as a party’s personal right to come into court, and should not be confused with the question of whether a party has an enforceable right or interest.’).”  Austin Nursing Center v. Lovato, 171 S.W.3d 845 at 848, 849; 2005 Tex. LEXIS 386; 48 Tex. Sup. J. 624 (Tex. 2005).

 

*

 

“In Texas, the standing doctrine requires that there be (1) ‘a real controversy between the parties,’ that (2) ‘will be actually determined by the judicial declaration sought.’  Nootsie, 925 S.W.2d at 662 (quoting  Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 443-44, 36 Tex. Sup. Ct. J. 607 (Tex. 1993)).  Implicit in these requirements is that litigants are ‘properly situated to be entitled to [a] judicial determination.’ ….  Without standing, a court lacks subject matter jurisdiction to hear the case.  Tex. Ass 'n of Bus., 852 S.W.2d at 443.  Thus, the issue of standing may be raised for the first time on appeal.  Id. at 445.”  Austin Nursing Center v. Lovato, 171 S.W.3d 845 at 849; 2005 Tex. LEXIS 386; 48 Tex. Sup. J. 624 (Tex. 2005).

 

*

 

“The plaintiff bears the burden of alleging facts that affirmatively show the trial court has subject-matter jurisdiction.  Tex. Ass'n of Bus., 852 S.W.2d at 446; Bishop, 74 S.W.3d at 878.”  In re Archer, 2006 Tex. App. LEXIS 3682 (Tex. App – 4th Dist. San Antonio, 2006).

 

*

 

“A party may challenge subject matter jurisdiction in a motion for summary judgment.  Id. at 554.  Upon such a challenge, the plaintiff has the burden to allege facts affirmatively demonstrating that the trial court has subject matter jurisdiction.  See Texas Ass'n of Bus., 852 S.W.2d at 446.”  Lovato v. Austin Nursing Center, 113 S.W.3d 45; 2003 Tex. App. LEXIS 4725 (Tex. App—3rd Dist. Austin, 2003), aff’d Austin Nursing Center v. Lovato, 171 S.W.3d 845; 2005 Tex. LEXIS 386; 48 Tex. Sup. J. 624 (Tex. 2005).

 

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“… a court deciding a plea to the jurisdiction is not required to look solely to the pleadings but may consider evidence and must do so when necessary to resolve the jurisdictional issues raised. The court should, of course, confine itself to the evidence relevant to the jurisdictional issue.”  Bland Independent School District v. Blue, 34 S.W.3d 547; 2000 Tex. LEXIS 106; 44 Tex. Sup. J. 125 (Tex. 2000).

 

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“… we hold that a named plaintiff’s lack of individual standing at the time suit is filed deprives the court of subject matter jurisdiction over the plaintiff’s individual claims and claims on behalf of a class.”  M. D. Anderson Cancer Center v. Novak, 52 S.W.3d 704; 2001 Tex. LEXIS 57; 44 Tex. Sup. J. 905 (Tex. 2001).

 

*

 

Standing is determined at the time suit is filed in the trial court …. Carr, 931 F.2d at 1061[1]  Texas Association of Business v. Texas Air Control Board, 852 S.W.2d 440 at 446 n 9; 1993 Tex. LEXIS 22; 36 Tex. Sup. J. 607 (Tex. 1993).



[1]  Carr v. Alta Verde Indus., 931 F.2d 1055, 1061 (5th Cir. 1991).

 

*

 

Subject-matter jurisdiction ‘depends on the state of things at the time of the action brought’ [quoting Chief Justice John Marshall]… Mollan v. Torrance, 9 Wheat. 537, 539 (1824); see, e.g., Smith v. Sperling, 354 U.S. 91, 93, n. 1 (1957); St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 289-290 (1938).”  From Justice Scalia’s concurring opinion in Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Foundation, Inc., 484 U.S. 49;108 S. Ct. 376;98 L. Ed. 2d 306;1987 U.S. LEXIS 5030.

 

*

 

It is a rule of general application that one person may not bring suit in the right of another.  McGinnis v. McGinnis, Tex.Civ.App., 267 S.W.2d 432; American Ins. Union v. Allen, Tex.Civ.App., 192 S.W. 1087.”  Kaplan v. Kaplan, 373 S.W.2d 271; 1963 Tex. App. LEXIS 1832 (Tex. Civ. App. – Houston, 1963).

 

* * *

 

Please bear in mind (a) that I am NOT an attorney and am not qualified to give you any legal advice, (b) that I have no specalized knowledge or expertise of Texas law whatsoever, and (c) that I only just saw your post about forty-five minutes ago and threw these abstracts together from case notes I have on file.

Also, consider this additional pleading note.  Usually in Texas you would challenge jurisdiction by a plea to the jurisdiction, a dilatory plea.  Such a plea is usually decided primarily with reference to the allegations in the plaintiff's pleadings, though evidence may be taken.  If the jurisdictional defect arises solely due to a defect in pleading, the plaintiff in Texas usually has a right to amend his pleadings.  But if the jurisdictional defect cannot possiblybe cured, then the case must be dismissed.

Another approach is to raise a jurisdictional challenge in a defensive summary judgment motion.  This typically requires the plaintiff to produce at least some affirmative summary judgment evidence demonstrating jurisdiction.

Note that the proof thresholds may differ depending upon the approach taken.  I suspect that you can DO BOTH:  raise a plea to the jurisdiction and then file a defensive motion for partial summary judgment on jurisdiction.

It is unclear to me what has been pled to date or HOW you intend to incorporate the arguments at tomorrow's hearing.

CONSIDER CAREFULLY AND DISCUSS WITH YOUR LAWYER WHETHER AN INCOMPLETELY PLED JURISDICTIONAL ARGUMENT IS BETTER DECIDED TOMORROW OR WHETHER YOU INTERESTS MIGHT BE BETTER SERVED CAREFULLY PACKAGING THESE ARGUMENTS AND FILING YOUR OWN DEFENSIVE SUMMARY JUDGMENT MOTION. YOU MAY BE ABLE TO BEAT THE PLAINTIFF ON THE PLAINTIFF'S SUMMARY JUDGMENT MOTION TOMORROW AND THEN SAVE TO JURISDICTIONAL ARGUMENT FOR ANOTHER DAY.  

 

One other point.  The jurisdictional defects in the plaintiff's case may not get ANY BETTER with time.  But if the matter is dismissed without prejudice, the plaintiff may just clean up the evidentiary mess and REFILE.  You maybe better off DELAYING and DEFERRING your jurisdictional argument until just before trial.  This draws the matter out longer.

 

Moreover, if the plaintiff lacks ANY evidentiary support for the case, you might be far better off seeking a defensive summary judgment on the merits.  That would dispose of the case with prejudice.  A jurisdictional dismissal would almost always be without prejudice and you will be facing the plaintiff again soon.  Why speed up the re-trial?

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JohnH
Thank you very much for the information, that's my middle name, 11th hour! lol.

I'll let you know how it goes,

JohnH

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O -

Debtor Without Lawyer Defeats Motion for Relief from Stay, Based on Lack of Standing

A Washington bankruptcy court recently agreed with a pro se debtor that mortgage servicing agents do not possess legal standing to bring relief from stay motions in chapter 13 cases.

In re Jacobson, 2009 WL 567188 (Bky.W.D.Wash. March 6, 2009), involved a chapter 13 bankruptcy debtor whose mortgage servicing agent filed a motion seeking an order from the bankruptcy court that it could foreclose on the debtor’s home mortgage, based upon lack of payments.  The debtor had a lawyer in the chapter 13 case, but the lawyer made no appearance.  Consequently, the debtor responded to the motion on his own behalf, and argued his case in open court with no lawyer.

The bankruptcy court was concerned that an out-of-state law firm had filed the motion on behalf of the mortgage servicer, but that a lawyer having no formal association with that firm appeared in court to argue the mortgage servicer’s motion.  Henceforth, the court stated, it would hear no arguments from such lawyers, unless a formal notice of association were timely filed.

The motion of “UBS AG, as servicing agent for ACT Properties, LLC (”Movant”),” was accompanied by an unauthenticated copy of an adjustable rate note in favor of Castle Point Mortgage, Inc.; and by a “barely legible” copy of a mortgage in favor of Castle Point Mortgage as “lender”; the beneficiary was identified as Mortgage Electronic Registration Systems, Inc. (MERS); and an apparently unrecorded “Assignment of Mortgage” to ACT Properties.  The motion was also supported by a declaration (made in Irvine, California) by a “bankruptcy specialist” that Wells Fargo Document Custody had possession of the note, mortgage, and assignment, in its Minnesota offices.

The court observed that the bankruptcy specialist had incorrectly noted the date the mortgage was signed, missing the actual date by several weeks.  It appeared doubtful the bankruptcy specialist had reliable knowledge of the mortgage or note.

In denying UBS AG’s motion, the bankruptcy court stated that only a “real party in interest” could file a motion in a federal court proceeding.  This was true even if the mortgage servicing agent had the power, granted to it by the owner of the mortgage, to file a bankruptcy court motion.  The court held that relief from stay had to be granted to the owner of the mortgage, and therefore the motion had to be filed by the owner of the mortgage.  It was not acceptable for the servicing agent to file the motion for relief from stay.

Because there was no evidence before the bankruptcy court that UBS AG was the owner of the mortgage note, or that UBS AG had any authority to foreclose the mortgage, UBS AG lacked standing; it was not the real party in interest.  The court ruled that UBS AG was not entitled to an order allowing it to foreclose the mortgage.

Debtor Without Lawyer Defeats Motion for Relief from Stay, Based on Lack of Standing : Mortgage Law Network
 
Mortgage Servicing Fraud
 
 
 Best of Luck!
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O -
Ooooop's,, I only meant to post a link to the MSF web site. Lot's of Good info there.
 
Law Library
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JohnH
Thank you O! well, here I go into the chasm of death............I might lose you....

JohnH

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Good Luck John! Or break a leg, which ever makes you most confident. We're crossing our fingers for you.

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O -
I hope it turned out ok for you.


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JohnH
I think it went very well. The Judge said he was leaning toward denying both ours and theirs, moving on to trial..........decision in a week or two.

Check out these two arguments.....

Our breach of contract claim should be thrown out because our contract is with the lender and NOT with the servicer............

Respa claim re notice of transfer should be denied because servicer had been calling on the phone, even though they sent no written notice.....

Things that make you go hmmmmm............

Thanks all,
JohnH

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O -

I'm glad for you that it went ok.

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Knows About Claims
Glad to hear that you had some success!

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Our breach of contract claim should be thrown out because our contract is with the lender and NOT with the servicer.


This sounds legally correct.  It would seem that you would need a third party complaint with service of the actual entity who you allege breached the contract.

If an insurance agent sells you a policy written by Collossal Epic Insurance and then Collossal Epic Insurance refuses to pay a claim, who is your cause of action against?  While there may be some misdeeds that are directly actionable against the agent (as in some collusive fraud), a cause of action on the insurance contract itself would seem to be between the parties in privity of contract.

You should probably ask court permission to amend your pleadings to ADD the Lender as a party, though if late in the litigation process, this has some down sides (for example, a limited discovery period or no discovery against the Lender).

Generally, a dismissal as to one party wouldn't preclude another separate cause of action against another UNLESS the issue was one for which there was some sort of mandatory duty to make a counterclaim in the interests of judicial economy due to the issue arising out of the same set of facts as the matter being litigated.

Check the Texas Rules and cases on mandatory and permissive counterclaims.

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RESPA claim re notice of transfer should be denied because servicer had been calling on the phone, even though they sent no written notice.....


This sounds more specious.  Your problem here may be identifying the actual harm and establishing a basis for damages. 
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JohnH
Thank you Knows About Claims and all, luckily the lender is a defendant along with MERS. The servicer was the only one to move for summary judgment. Their admission that we have no contract with them may bode well for Tortuous Interference with the contract by a Third party, the servicer.

Mind you, the servicer did breach the contract by failing to send the notice of transfer. ( but we didn't have a contract with them?)

I really don't remember that it said anywhere in my closing docs that 'if we fail to send a written notice of transfer, and therefore violate RESPA, we can call you on the phone instead.'

Still going Hmmmmm..........

JohnH.
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Knows About Claims
John H.:

Hopefully, you will prevail on your issues.  But if you suffer an adverse ruling or find yourself headed to trial, on the issue of notice, I would highly recommend to you that you very carefully scrutinize the express language of the alleged promissory note and/or deed of trust.

You are very likely to find language such as this in the promissory note:

"7.  Unless applicable law requires a different method, any notice that must be given to me under this Note will be given by delivering it or mailing it by first class mail to me at the Property Address above or at a different address if I give the Note Hoder a notice of my different address.  ..."

Example taken from circa 2001 FHLMC Form 3200 promissory note.

You should find some language like this in the deed of trust:

"15.  Notices.  All notices given by the Borrower or Lender in connection with this Security Instrument must be in writing.  Any notice to Borrower in conneciton with this Security Instrument shall be deemed to have been given to Borrower when mailed by first class maul or when actually delivered to Borrower's notice address is sent by other means.  ..."

Similarly:

"20.  Sale of Note; Change of Loan Servicer; Notice of Grievance.  ...  A sale might result in a change in the entity (known as the "Loan Servicer") that collects Periodic Payments due under the Note and Security Instrument and performs other mortgage loan servicing obligations under the Note, this Security Instrument, and Applicable Law.  There also might be one or more changes of the Loan Servicer unrelated to a sale of the Note.  If there is a change of the Loan Servicer, Borrower will be given written notice of the change which will state the name and address of the new Loan Servicer, the address to which payments should be made and any other information RESPA requires in connection with a notice of transfer of servicing."

Example taken from circa 2001 FHLMC Form 3044 Deed of Trust for Texas.

I would think that irrespective of what the case law generally says about RESPA notices, that the Lender probably had a contractual duty to notify you in writing as set forth in the instruments they seek to enforce.  Moreover, since these are contracts of adhesion written by the Lender, any ambiguity in the contractual terms should be construed against the Lender.

Also, whatever else transpired at closing is essentially irrelevant to the contract.  Note that you will find some language similar to that shown below, probably in bold within the promissory note:

"THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENT OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTiES."  

In short, the contract says the disclosure must be in writing.  There is no other alternative.

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To any extent that you failed to make and preserve these arguments at the summary judgment hearing and things go South on you, you may want to ask your attorney whether you are entitled to file a motion for a new trial under Tex. R. Civ. P 320.  IF this is permissible to set aside summary judgment, your motion might raise the additional point about the contractual necessity of giving written notices.  Generally, properly getting a new point into a motion for a new trial or a motion to set aside a judgment and arguing the new point or issue preserves the issue for appeal. 

* * *

If you are litigating against MERS, you should definitely try to contact the prior MS Fraud contributor Mr. Roper, whose posts on standing I called to your attention.  Though he is not an attorney, he is the subject matter expert on evidence and law regarding MERS.  He may be able to point you to valuable cases and evidence.  Hopefully, you are already in touch with him.  Other Forum participants can help you with MERS, as well.

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JohnH
The issue was argued well, no new point necessary. We signed a 'certification of mailing address' at closing saying that all correspondence concerning the note and mortgage shall be sent to our P.O. box. None ever was. Were it not from a third party foreclosure rescue operator (who had the address right) we would have lost our home without ever knowing it, having made all our payments timely to the lender's address on the first payment letter.

Even after the correct address was finally known by the servicer, they filed their application for an order to foreclose with notices still to the wrong address. The same or similar language IS in our documents.

I have read Mr. Roper's posts and found them very interesting. He has certainly been noticed by his absence of late, probably tired of some of the cat fights in here, which is a shame and a great loss. Thank you for your help as always Knows About......I certainly do owe you a beer!

JohnH.

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JohnH
Oh, I forgot, the reason the assignment was from MERS to the lender only a month ago, is because the earlier one got lost and was never recorded.

Read, THE DOG ATE IT! your honor,

JohnH

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Paul Harwood
These servicers must have a lot of dogs since so many of these "assignments" seem to get "lost" or eaten by their dogs. Good luck! PH.
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Knows About Assignments
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These servicers must have a lot of dogs since so many of these "assignments" seem to get "lost" or eaten by their dogs.

 
Paul:
 
From spots checks I have done, it appears that upwards of 90% of all assignments recorded and pled in mortgage foreclosure actions nationally are bald forgeries.  The original assignments are NOT actually "lost" or "missing".  The mortgage investors KNOW where they are and COULD have produced or pled the real assignments.
 
But this is inconvenient.  It is easier to simply fabricate the necessary evidence than to obtain and plead the real evidence.
 
This is one reason that discovery is so key to a successful mortgage foreclosure defense.  You need to let the plaintiff start lying under oath.  Then PROVE the lies.  Only then will they SETTLE.
 
Discovery is the KEY to success!  
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Knows About Lies

Knows About Assignments wrote:
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These servicers must have a lot of dogs since so many of these "assignments" seem to get "lost" or eaten by their dogs.

 
Paul:
 
From spots checks I have done, it appears that upwards of 90% of all assignments recorded and pled in mortgage foreclosure actions nationally are bald forgeries.  The original assignments are NOT actually "lost" or "missing".  The mortgage investors KNOW where they are and COULD have produced or pled the real assignments.
 
But this is inconvenient.  It is easier to simply fabricate the necessary evidence than to obtain and plead the real evidence.
 
This is one reason that discovery is so key to a successful mortgage foreclosure defense.  You need to let the plaintiff start lying under oath.  Then PROVE the lies.  Only then will they SETTLE.
 
Discovery is the KEY to success!  

This is how you lost your case. Lying to the Judge under OATH.

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JohnH
Oh no!   I have a NUT lose in my thread!

JohnH

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O -

JohnH wrote:
Oh no!   I have a NUT lose in my thread!

JohnH


That was 2 funny!
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JohnH
Oops, my bad spelling, I should have said,

Oh no! there is a NUT loose in my thread!

JohnH

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Kohler
Did JohnH win his case?
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