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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We have been served with a foreclosure complaint.  Our deadline to file an answer is 4/24/2010.  We were working with a bankruptcy lawyer (we are currently NOT in bankruptcy), he advised us to not file an answer.   From what I've been reading, I find this extremely uncomfortable.   We live in New Jersey and have been granted a 6 month forbearance persuant to the Mortgage Stabilization Relief Act.   This Act mandates that we attend mediation.   This is the reason our bankruptcy lawyer said that we do not NEED to file an answer.  Is this correct ?  If so, will we lose our right to bring forth a defense later on down the road.
 
Our loan was originated in July 2007.  We applied for a loan with National Bank of Kansas City.  About 5 days from closing our mortgage broker told us that we no longer qualififed for that loan.  Mind you nothing financially had changed in order for this to happen.  He offered us a new loan but this loan was interest only and had a higher rate.  I believe we still have the original good faith estimate of the loan we actually applied for.   We were furious but had no choice and we accepted the interest only loan.  About a month after closing we were sent a document to be signed.  Apparently, we did not sign it at closing.  Not a big deal.  I think it was a document relating to the rate.  We signed it and sent it back.   Around that same time we were notified that our mortgage was sold off to Wells Fargo.  Our note states that National Bank of Kansas City is our lender.  Our mortgage states that MERS is the nominee.   Our mortgage was assigned to Wells Fargo on 1/29/2010 (2 1/2 years after Wells Fargo became our servicer) and  about 90 plus days after we were delinquent in our payments.  With our foreclosure complaint there was no copy of the assignment of mortgage, by the way, the assignment of mortgage is not recorded. 
 
We believe that Wells Fargo does not have our note.  I don't think they even know what pool our loan is in.  Oddly, after fighting with them for 14 months trying to get a modification, they offered us a trial payment period.  The trial payment period ends about a month before the forebearance period is up.  We don't know if we should accept it.  We don't want to be one of the ones that are on the trial period for months and months with no end in sight.
 
If someone could please give us the name of a good attorney.  Or direct us to where it says if we even need to file an answer.  We would sooo appreciate it.   We only have about 2 or 3 days left.
 
Thank you.
 
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Vince
I believe that you should ALWAYS file an answer, just what I've been told, Vinny
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Go to http://www.livinglies.wordpress.com and look for the lawyers who "get it" list on the right had side of the homepage.  Call a few and interview them.
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AR this is by nomeans legel advice But you should fire your lier arr lawyer because he knows if you dont file an answer you default and they will motion for summery judgement.
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The Equitable One
File an answer.

29 months ago when suit was filed against me I was completely ignorant of the issues, processes, rules, possible defenses, etc. The answer I filed is what I refer to as the "dumb a**" answer. I simply repeated the same phrase for each of the counts:

"Defendant is not in possession of sufficient information to confirm or deny, so he denies."

Had I not filed that, er, um, rather pathetic response I'd have lost on default judgment in a matter of weeks. As it is I am still in my house and as each month passes I become more aware, more informed, more educated, more capable. The tide seems to finally be turning a bit more in my favor. I will yet prevail. When I do I'll know it was all set up by that "dumb a**" answer.

File an answer.



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I dont know about civil procedure in jersey, but I would file a motion to dismiss first, let the court rule on that motion, which may take a bit of time.  If they rule against you, you will get another 20-30 days to file your answer. 
not a lawyer but i hear that thats the best tactic.
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I would file this  QWR and a Motion to Dismiss to buy sometime. Then look for an attorney. Your attorney can file Amended Motion to Dismiss before the hearing.
Check the Civil Rules and Procedure in your state. Google to look for it
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IN THE CIRCUIT COURT OF THE  JUDICIAL CIRCUIT, IN AND                             DADE COUNTY, FLORIDA

                                                           

                                                            CASE NO:

 

SELECT PORTFOLIO SERVICING, INC.,

 

            Plaintiff(s)

 

VS.

 

SMART

, et al.,

           

            Defendant(s)

 

__________________________________/

 

                             QUALIFY WRITTEN REQUEST

 

The Defendant hereby requests the Plaintiff information about the fees, costs and escrow accounting of my loan. This demand is a Qualified written Request (QWR), pursuant to the Real Estate Settlement and Procedures Act (RESPA),12 U.S.C. § 2605(e).

 

The documents requesteed should be mailed to (Defendant address)

The information I request as part of this QWR is as follows:

1) The current interest rate on this account.

2) The adjustment dates of each interest rate adjustment on this account, with the corresponding

adjustment amount.

3) Who the current holder of the mortgage is, and their mailing address for process of service, along with a current telephone number.

4) Who the current holder of the note is, and their mailing address for process of service, alongwith a current telephone number.

5) The date that the current holder acquired this mortgage and from whom it was acquired from.

6) The date your firm began servicing the loan.

7) The previous servicer of the loan.

8) The monthly principal and interest payments, and monthly escrow payments received from the date of the loan’s closing to the date of this QWR;

9) A complete payment history of how those payments were applied, including the amounts applied to principal, interest, escrow, and other charges;

10) The total amount due of any unpaid principal, interest, escrow charges, and other charges due as of the date of this letter. Please list separately and identify each amount due;

11) The total amount of principal paid on the account up to the date of this letter;

12) The payment dates, purposes of payment and recipient of any and all foreclosure fees and costs that have been charged to my account;

13) A breakdown of the current escrow charges showing how it is calculated and the reasons for any increase within the last 24 months;

14) A breakdown of any shortage, deficiency or surplus in the escrow account over the past three years.

15) A breakdown of all charges accrued on the account since the date of closing, that includes but is not limited by, late charges, appraisal fees, property inspection fees, forced placed insurance charges, legal fees, and recoverable corporate advances.

16) A statement indicating which covenants of the mortgage and/or note authorize each charge.

17) Please provide a copy of all appraisals, property inspections, and risk assessments completed for this account.

18) Please provide a copy of all trust agreements pertaining to this account.

19) Please provide a copy of all servicing agreements (master, sub-servicing, contingency, specialty, and back-up) pertaining to this account.

20) Please provide a copy of all written loss-mitigation rules and work-out procedures for this account.

21) Please provide a copy of all manuals pertaining to the servicing of this account.

22) Please provide a copy of the LSAMS Transaction History Report for this account, and include a description of all fee codes.

23) If this account is registered with MERS, state its MIN number.

24) A statement indicating the amount to pay this loan off in full as February 1, 2009.

I hereby dispute all late fees, charges, inspection fees, property appraisal fees, forced placed insurance charges, legal fees, and corporate advances charged to this account. Additionally, I believe my account is in error. Pursuant to 12 U.S.C. § 2605(e), you are hereby notified that placing any negative coding on my credit report before responding to this letter is a violation of RESPA and the FCRA. Your organization will

be subject to civil liability if negative coding appears for this account before a response to this QWR isissued to me.

Please provide me confirmation that you have received this QWR within 20 days, as required under 12 U.S.C. § 2605(e). Thereafter, please respond to these questions within 60 days of receipt of this letter, also as required under 12 U.S.C. § 2605(e).

 

 

 

 _________________

Defendant Name/Address

 

 

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Here is a sample of Motion to Dismiss. Tell your attorney you want a similar motion with NJ case law. If he does not have case law, go to the court house and ask the clerk to see some foreclosure cases. Look for the motion to Dismiss ,note the case law and give the info to your lawyer. If you do nothing, you may end up with a Default Judgment then Bank can sell your house on court step auction. Check my threat in this forum "Tactical Consideration in fighting Foreclosure" and http://www.foreclosureprose.com for more info. Buy time and save money to hire a good lawyer. It is very difficult to win as Pro-Se.
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IN THE CIRCUIT COURT OF THE  XXXX JUDICIAL CIRCUIT

                             IN AND FOR               FLORIDA

                                                       CIVIL ACTION

 

                                                                                   CASE NO. 

                                                                     

US BANK AS TRUSTEE

 

                                                Plaintiff,           

v.

 

JOHN SMITH

                                                Defendants.

________________________________________/

 

 

    DEFENDANTS MOTION TO DISMISS COMPLAINT WITH PREJUDICE

                            

 

        Comes now the Defendants John and Arlen Smith moves the Court to dismiss Plaintiff’s complaint, pursuant to Rules 1.130, 1.210(a) and 1.140(b)(6), Florida Civil

 

Procedures , and in support  thereof states as follows:

 

1.                  THE SMITH’s home, encumbered by a mortgage and promissory note made to and held by FIRST MERIDIAN MORTGAGE, is the property at issue in this foreclosure action.

2.                  The Plaintiff, US BANK as Trustee. and not FIRST MERIDIAN MORTGAGE filed this foreclosure action allegedly as owner and holder of the note.

3.                  US Bank as Trustee also brings a count for reestablishment of promissory note pursuant to section 673.3091, Florida Statutes.

 

CONDITION PRECEDENT

In the Definitions of the subject mortgage, Paragraph (B) defines:

a.       “Borrower” as JOHN SMITH and ARLENE SMITH Husband and Wife, and

b.      “Lender” as  FIRST MERIDIAN MORTGAGE

 

         Plaintiff Fails to establish Cause of Action- Plaintiff Fail to State a Claim

         Upon Which Relief May Be Granted; Plaintiff Lacks of Standing to Sue;

                                      Lack of Subject Matter Jurisdiction

 

 

4.     Plaintiff lacks of Subject Matter Jurisdiction. The Plaintiff’s fails to attach any  

documents to identify who or what  US bank as Trustee . is; nor can

 

Defendant determine from the Plaintiff’s  complaint upon what facts the Plaintiff is claiming to be the real party in interest with standing to pursue this foreclosure action on a promissory note which is required by the  Florida Rules of Civil Procedures1.140

 

(b)1.  Plaintiff did not attach the Notes proving Plaintiff’s ownership of any debt against the Defendant.  Therefore This Court lacks of subject matter jurisdiction to proceed. Subject matter jurisdiction has never been established on the record.  The jurisdictional question can be raised at anytime and can never be time barred . Declaire v. Yohanan, 453 So. 2d 375 (Fla 1984).  The Court should dismiss this Complaint pursuant to Rules 1.210(a) and 1.140(7) of the Florida Rules

 

and Procedure because no promissory note attached to the Complaint evidencing that

 

Plaintiff is the true owner of the note or the existence of the promissory note . Therefore Plaintiff is not the real party in interest , the debt does not exist, the Complaint should be dismiss due to Plaintiff’s  Lacks of Subject Matter Jurisdiction

 

5.       Lacks of Standing to Sue .Plaintiff’s complaint fails contain any sufficient facts to establish who the Plaintiff   is or the Plaintiff’s relationship to the Defendant, , or the Plaintiff’s relationship or connection  to the claim for foreclosure of a promissory note, including the failure to identify the date of the alleged assignment of the mortgage and note to the plaintiff. The Plaintiff alleges in paragraph 4 of its complaint it is “the owner and holder of  the  subject note and mortgage”.  These allegations are directly conflicting with the mortgage and other documents attached to the complaint thereby rendering the complaint insufficient  to identify who the Plaintiff is or what fact establish the standing of Plaintiff to file and pursue this foreclosure.

 

6.          Plaintiff filed defective pleadings with exhibits that were legally insufficient to

 

support the complaints, to show standing or to invoke the subject matter jurisdiction of

 

the court. Florida Rules of Civil Procedure rule 1.130(a) required that standing must be established by pleadings and exhibits attached thereto at the date of filing the action, and requires the Plaintiff to attach to its Complaints copies of all bonds, notes, bills of exchange contracts, accounts , or documents upon which action may be brought. Plaintiff failed to attached sufficient documentation to supports its pleading in this case.

 

7.            No original documentation, negotiable instruments, notes or mortgage, pursuant to Florida Rules of Court evidence code 90.953(1)(2), and (3) was placed in the case file at the time the complaint was filed. Duplicate of negotiable instruments are not admissible.

 

    90.953. Admissibility of duplicates – A duplicate is admissible to the same extent

         as original , unless:

         (1)   The document or writing is a negotiable instrument as defined in s. 673.1041,

          a security as defined in s. 678.1021, or any other writing that evidences a right to

          the payment of the money, is not itself a security agreement or lease, and is of a type   that is transferred by delivery in the ordinary course of business with any necessary    endorsement or assignment.

         (2)  A genuine question is raised about the authenticity of the original or any other          document or writing.

         (3)  It is unfair, under the circumstance, to admit the duplicate in lieu of the original.

 

8.      Plaintiff fails to produce the Original of the Note or any other copy to support of

 

its claims to be the owner and holder of the Note.  This fact alone deprives plaintiff of 

 

standing pursuant to Florida Rules of Civil Procedures rules 1.113(a) and 1.210(a). Standing must be established by the initial pleading and may not rely on subsequent filing as its basis.

 

9.     No document was attached or filed with the Complaint showing that the Plaintiff meets any of the criteria of Florida Rules of Civil Procedure rule 1.210(a) which would authorize the Plaintiff to pursue this action as a nominee or stand-in or for the true owner(s) and/or holder(s) of the note. Plaintiff is therefore barred from doing so.

 

10.        In this case, the Plaintiff’s allegation of material facts claiming it is the owner of the subject note are inconsistent with the documents attached to the Complaint. When exihibits are inconsistent with the Plaintiff’s allegations of material facts as to real party in interest, such allegations cancel each other out. Fladell v. Palm Beach County Canvassing Board, 772 So. 2d 1240 (Fla 2000), Greenwald v. Triple D Properties, Inc. 424 So. 2d 185 (Fla 4.th DCA 1983), Costa Bella Development Corp.vs Costa Development Corp, 441 So. 2d 114

 

(Fla. 3rd DCA 1993).

 

11.       Failure to state a Cause of Action. Failure to state a sufficient claim.

 

Because Plaintiff cannot prove that it now own the note, and failed to establish in

 

its complaint that it owned or held the note and mortgage at the commencement of this

 

action.  Plaintiff failed to state a sufficient claim and  failed to state a cause of Action..

 

Plaintiff failed to establish itself as the real party in interest . This fact renders the complaint objectionable. Greenwald v. Triple D. Properties, Inc. 424 So. 2d 185, 187 (Fla. 4th DCA 1983). Plaintiff fails to identify what powers it has to foreclose on the note and mortgages

 

In Florida, an agent does not have a cause of action against a party allegedly breaching a contract with its principal. The principal must authorize the agent to bring the suit. Media 

Placement v. Combined Broad. Inc 638 So. 2d 105-106, (Fla 3rd DCA 1994).

 

12.       In Florida, the prosecution of a residential mortgage foreclosure must be by the owner and holder of the mortgage and the note. Your Construction Center Inc v. Gross316 So. 2d 596 (Fl. 4th DCA 1975).  The Plaintiff fails to establish its possession or ownership of the Mortgage and Note, and; therefore cannot ensure that the Defendants, John and Arlen Smith , are adequately protected against loss that might occur by reason of a claim  by another person to enforce the instrument. Therefore, Plaintiff is unable to meet the requirement of Florida Statute Section 673.3091.

 

 

                                            Re-Establishment  of  Note

 

 Defendant also moves to Dismiss Plaintiff’s Count II Re-Establishment of Note

 

13.    Plaintiff fails to bring forward the “Original Promissory Note:, the subject matter of this action, and having failed to meet requirement of  Florida Statute 71.001 Re-establishment  of paper, records and files. DLJ Mortgage Capital, Inc v. D. Scott Heinman Trustee . Case no. 07CA 015829-1 In Admiralty DCA 13 Hillsborough County Fla.  Nov 2008. Judge Franz Gomez  denies the Plaintiff Motion to re-establish the Promissory Note. The Statute requires the Plaintiff to attach a substantial copy of that lost or destroyed; the Plaintiff has to name in the Complaint all parties interested for or against such  the re-establishment. In this case, the Plaintiff has to name all note holders, assignees, assignor of the lost Promissory note and Plaintiff failed to prove that it is the owner of the lost note. The Plaintiff, US Bank as Trustee, is not the owner name on the note.  

 

14.       Since US BANK as Trustee ,  fails to allege the date it took assignment of the note and mortgage or the date the note and mortgage were lost or destroyed, it is not possible to determine if in fact Plaintiff was entitled to enforce the note and mortgage when they were lost.  Though the right to enforce a promissory note and mortgage once in the possession of an assignor can be assigned though the note and mortgage be lost (National Loan Invest. v. Joymar Ass., 767 So.2d 549 (Fla. 3rd DCA 2000)), if another party further up the assignment chain lost the note and mortgage, Plaintiff can not show it is entitled to foreclose unless it specifically alleges facts that establish that it or its assignor had the right to enforce the note though it was lost prior to the assignment.  State Street Bank v. Lord, 851 So.2d 790 (Fla. 4 Dist. 2003).

 

15.        This is a  pleading deficiency because Plaintiff in fact admits in paragraph 

 

19 of the complaint that “Plaintiff neither has any knowledge as to when the subject

 

Promissory Note was lost or destroyed, nor as to the manner of loss or destruction.”  Further, Plaintiff  loosely alleges in paragraph  17 that “Plaintiff or its predecessor(s) was in possession of the Promissory Note and was entitled to enforce it when the loss of possession occurred.”

 

16.   It is insufficient to merely allege that the note is lost and repeat verbatim the separate clauses of section 673.3091, Florida Statutes.  Rather, pursuant to section 673.3091, Florida Statutes an owner of a lost, stolen, or destroyed instrument must allege facts establishing he is prevented from producing the original instrument.  Gutierrez v. Bermudez, 540 So.2d 888 (Fla. 5th DCA 1989); see also Lawyers Title Ins. v. Novastar Mortg., 862 So.2d 793 (Fla. 4th DCA 2003); Dunn v. Willis, 599 So.2d 271 (Fla. 5th DCA 1992); Barber v. Ehrich, 394 So.2d 220 (Fla. 5th DCA 1981).

 

17.        Plaintiff, for example, fails to allege when Plaintiff first came into possession of the note and mortgage, where same were stored, the date as of which Plaintiff realized it was no longer in possession of the note and mortgage, and the steps Plaintiff  took as a result.

 

18.          The failure to state a cause of action is a  pleading deficiency not curable even in the instance of a default judgment.  Hogan v. Garceau, 880 So.2d 823 (Fla. 5th DCA 2004).

 

19.         Section 22 of the Subject Mortgage provides the manner in which the lender must provide notice of the default and acceleration of the loan documents. 

 

20.          The law is well settled in Florida (and the mortgage contains a provision) requiring that the Lender must give the “Borrowers” notice of the loan default and an opportunity to cure the default before the loan can be accelerated.  See, Barnes v. Resolution Trust Corp.664 So.2d 1171 (Fla 4th DCA 1995); New England Mutual Life Ins. Co. v. Luxury Home Builders, Inc., 311 So.2d 160 (Fla. 3d DCA 1975); and Campbell v. Werner, 232 So.2d 252 (Fla. 3d DCA 1970).

 

21.         Plaintiff.  fails to give  proper written notice of default and  acceleration as required by the mortgage and law. Defendants did not receive Notice of   Default and  Acceleration before the lawsuit was filed.

 

22.        Defendants, John and Arlen Smith, reserve the right to amend and/or additional bases for their Motion to Dismiss subject to further discovery.

 

 

            WHEREFORE, Defendants,  requests this Court dismiss the Plaintiff’s

 

Complaint with prejudice for (1) Lacks of subject matter jurisdiction, (2) Failure to state a sufficient Claim, (3) Lacks of Standing, (4)  Failure to meet requirement of Florida Statute 71.001 for re-establishment of notes, (5) Failure to provide proper written Notice of Default and Acceleration as required by the mortgage and law.

.

____________________________                                                                                    Defendant

 

 

 

 

 

                               

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Thank you all for your responses...

We met with a lawyer this evening.  He will be taking our case.  We are filing
AN ANSWER.  Thank God.  A lawyer who gets the fact that you NEED to file an answer.  Not some stupid schmuck who says....hey, so what, who cares... no need to file an answer....  IDIOT !!!

Retainer is about $4000.  We have a fairly regular case. 
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Make sure the Answer has Affirmative Defenses . Without Affirmative Defenses, it will be difficult to oppose the Plaintiff Motion for Summary Judgement . The Affirmative Defense sets grounds for arguments to oppose SMJ.  Show the following sample to your attorney. I never give a lot of money one time to an attorney. I would negotiate to pay in 2 or 3 times so I can see how good is his answer first. If the Answer is not good, I can fire him without losing a big sum of money.
In Florida, the rule says if there is no discovery filed, the Plaintiff can file Motion to Summary Judgment after the Answer is filed and set the hearing.
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SAMPLE 1 - ANSWER WITH AFFIRMATIVE DEFENSES, JURY TRIAL
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This is Florida pleadings with Florida case laws cited. It is better with case laws from the Litigants state. Go to the Law library, use Westlaw to search state case laws.

IN THE CIRCUIT COURT OF THE FOURTH

JUDICIAL CIRCUIT, IN AND FOR DUVAL

COUNTY, FLORIDA

 

CASE NO:      16-2008-CA-02102

DIVISION:      CV-G 

 

U.S. Bank, N.A., Plaintiff,

vs.

 

Arthur L. Campbell; Salulysa Campbell, et al.,

Defendants.

_____________________________________/

 

DEFENDANT SALULYSA CAMPBELL’S FIRST AMENDED ANSWER TO COMPLAINT, AFFIRMATIVE DEFENSES, COUNTERCLAIMS AND DEMAND FOR TRIAL BY JURY

 

            COMES NOW the  separate Defendant Salulysa Campbell and for her first amended answer to the plaintiffs’ complaint, affirmative defenses, counterclaims and demand for trial by jury, states:

 

ANSWER

 

            1.   Defendant denies that this Plaintiff has stated a cause of action for foreclosure because on the date this lawsuit was filed the plaintiff was not the true owner of the claim sued upon; is not the real party in interest and is not shown to be authorized to bring this foreclosure action.

           

            2.   Admit

 

3.      Deny that the subject note and mortgage was assigned to U.S. Bank, N.A. 

 

Defendant affirmatively asserts that the promissory note attached to the Plaintiffs’ Complaint directly and specifically incorporates federal regulations issued by the Secretary of Housing and Urban Development which contractually limit the plaintiff’s rights of acceleration, collection and foreclosure in the case of a borrower’s default, to wit:

 

“If Borrower defaults by failing to pay in full any monthly payment, then Lender  may, except as limited by regulations of the Secretary in the case of payment defaults, require immediate payment…This Note does not authorize acceleration when not permitted by HUD regulations.  As used in this Note, ‘Secretary’ means the Secretary of Housing and Urban Development…”

 

                  Defendant further denies that the subject note is a negotiable instrument or that the note is subject to being held in due course; denies that the subject note was legally assigned to the Plaintiff; denies that the Plaintiff is the present owner of the subject mortgage or the promissory note; and denies that the provisions of the Uniform Commercial Code apply to the subject loan transaction or the promissory note.

 

               Defendant’s denial of the plaintiff’s claim that it owns the subject mortgage or note is also based on the contents of the purported assignments attached to the complaint which show that the exact same persons executed or witnessed the assignments on the exact same day with Jon. H. Cardell Assistant Vice President purportedly assigning  on behalf of and to both Mercantile Bank and Carolina First Bank.

 

            4.   Admit that this separate defendant is the present owner of the subject property and the only person in possession of the subject property.  Deny that Arthur Campbell has any ownership or possessory interest in the property.

 

            5.   Deny.  Separate Defendant made payments including a payment made on October 10, 2007 which payments exceeded the monthly required payment.  These payments totaled $919.56 while the monthly payment  was at or about $646.30.  Plaintiff recorded this payment  on or about October 17, 2007 per page 2 of Customer Account Activity Statement.  

 

              6.  Deny the amount of the debt as alleged.  Defendant disputes the amount and  characterization of this debt, affirmatively claims that many unauthorized, illegal, and  predatory charges and fees have been added to the claimed balance due under the subject mortgage and note and by reason thereof, and pursuant to the Federal Fair  Debt Collection Practices Act Defendant hereby demands written and itemized verification of said debt from the Plaintiff including a complete written and itemized transaction history and accounting of  all charges, fees and payments.

 

            7.   Deny.

 

            8.   Deny.

 

            9.   Deny as this is not an allegation of fact.

 

            10.  Deny.

 

            11.  Deny.

 

            12.  Deny.

 

13.     Deny.

14.     Deny.

15.     Deny.

 

AFFIRMATIVE DEFENSES

 

1.  FAILURE TO STATE CAUSE OF ACTION; PLAINTIFF DOES NOT HAVE STANDING BECAUSE PLAINTIFF IS NOT REAL PARTY IN INTEREST:  The exhibits attached to Plaintiffs’ Complaint are inconsistent with Plaintiffs’ allegations as to ownership of the subject promissory note and mortgage on the date this foreclosure action was commenced.  Plaintiffs have failed to establish that plaintiffs are real parties in interest and have failed to state a cause of action.

a.   The HUD insured promissory note that is the subject of this foreclosure action is not a negotiable instrument and therefore is not subject to transfer by endorsement because the note directly and specifically incorporates and directly references and applies federal regulations issued by HUD that limit the Lender’s rights of acceleration,       collection and foreclosure in the case of a borrower’s default.  The application,       incorporation and reference to the HUD federal regulations which set out specific       default loan servicing and loss mitigation requirements imposed on the lender renders       the note nonnegotiable under the Uniform Commercial Code.

b.   The HUD insured promissory note has a boxed FHA case number and states, in pertinent part, under the section on borrower’s failure to pay:

 

            “If Borrower defaults by failing to pay in full any monthly payment, then Lender may, except as limited by regulations of the Secretary in the case of payment defaults, require immediate payment…This  Note does not authorize acceleration when not permitted by HUD regulations.  As used in this Note, ‘Secretary’ means the Secretary of Housing and Urban Development…” 

 

c.   It is plain on the face of the HUD insured promissory note at issue in this foreclosure that is attached to the plaintiffs’ Complaint that the note does not contain just an unconditional promise to pay.   The resulting uncertainty presented by the terms of the note that specifically apply, incorporate and reference the HUD regulations defeat       any argument that the note is a negotiable instrument subject to transfer via      endorsement.

 

d.   Therefore, the Uniform Commercial Code, F.S.Chapter 673 does not apply to transfer or enforce the promissory note at issue in this foreclosure action. Nagel v.       Cronebaugh, 782 So. 2d 436 (Fla. 5th DCA 2001), citing United Nat’l Bank of Miami       v. Airport Plaza Ltd. Partnership, 537 So. 2d 608,609 (Fla. 3d DCA 1988); Thompson       v. First Union National Bank, 643 So.2d 1179 (Fla. 5th DCA 1994); See also,       Bankers Trust v. 236 Beltway Investment, Inc., 865 F. Supp. 1186 (E.D. Va. 1994).

 

e.   The HUD insured promissory note is conditional because it is subject to and governed by the HUD default loan servicing and loss mitigation regulations.  The court cannot determine the obligations required of the person promising to pay or the person       requiring payment without reference to the HUD regulations.  As a result, the note is       not an unconditional promise, is not a negotiable instrument and is not subject to       transfer by endorsement. Fla. Stat. § 673.1041.

 

f.   Under Section 3-106(a) of the Uniform Commercial Code  “a promise or order is  [conditional if it] is subject to or governed by another record, or [the] rights or      obligations with respect to the promise or order are stated in another record.  Fla. Stat.     § 673.1061.

 

g.  “To determine whether an instrument meets negotiable instrument definition of Uniform Commercial Code, only [the] instrument itself may be looked to, not other      documents, even when other documents are referred to in instrument.” First State      Bank at Gallup v. Clark, 570 P.2d 1144 (N.M. 1977); Amberboy v. Societe de Banque      Privee, 831 S.W.2d 793, 794 (Tex. 1992); Walls v. Morris Chevrolet, Inc., 515 P.2d    1405, 1407 (Okl. App. 1973).

 

h.  “No instrument can be negotiable which (1) is subject to another agreement, (2) refers to another agreement for the rights of the parties, or (3) incorporates another      agreement.” Hawkland, Uniform Commercial Code Services § 3-105:2.  See also,      Holly Hill Acres, Ltd. v. Charter Bank of Gainesville, 314 So. 2d 209, 210-11 (Fla.2nd      DCA 1975) (holding that the incorporation of the terms of a separate writing makes      the promissory note a non-negotiable, conditional promise to pay); Hawkland,

 

     Uniform Commercial Code Services § 3-105:2; Dzikowski v. Moreno (In re V.O.C. Analytical Labs., Inc.) 263 B.R. 156, 160-61 (S.D. Fla. 2001); (The phrase "subject to" or words to that effect are fatal to negotiability, regardless of the actual provisions of the other document.)  Hawkland, Uniform Commercial Code Services § 3-105:2; 28; (“An order or promise is conditional if either the instrument states that the rights or obligations of the parties are defined or stated in another writing or that the rights or obligations of the parties are subject to the terms of another writing.”) Anderson, Uniform Commercial Code § 3-106:8 [Rev].

 

 



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Answer with Affirmative Defenses and demand for Jury Trial -continued
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h.  “No instrument can be negotiable which (1) is subject to another agreement, (2) refers to another agreement for the rights of the parties, or (3) incorporates another      agreement.” Hawkland, Uniform Commercial Code Services § 3-105:2.  See also,      Holly Hill Acres, Ltd. v. Charter Bank of Gainesville, 314 So. 2d 209, 210-11 (Fla.2nd      DCA 1975) (holding that the incorporation of the terms of a separate writing makes      the promissory note a non-negotiable, conditional promise to pay); Hawkland,

 

     Uniform Commercial Code Services § 3-105:2; Dzikowski v. Moreno (In re V.O.C. Analytical Labs., Inc.) 263 B.R. 156, 160-61 (S.D. Fla. 2001); (The phrase "subject to" or words to that effect are fatal to negotiability, regardless of the actual provisions of the other document.)  Hawkland, Uniform Commercial Code Services § 3-105:2; 28; (“An order or promise is conditional if either the instrument states that the rights or obligations of the parties are defined or stated in another writing or that the rights or obligations of the parties are subject to the terms of another writing.”) Anderson, Uniform Commercial Code § 3-106:8 [Rev].

 

 


Ann
    01/18/10 at 01:08 AMReply with quote#12

SAMPLE 1-  Continued.

2.  FAILURE TO COMPLY WITH APPLICABLE HUD SINGLE FAMILY DEFAULT LOAN SERVICING REQUIREMENTS/ FAILURE TO COMPLY WITH CONDITIONS PRECEDENT:  Both the HUD insured promissory note and mortgage that are the subject of this foreclosure action directly and specifically apply, incorporate and refer to federal regulations issued by HUD that directly limit the plaintiff’s rights to accelerate and foreclose in the case of a borrower’s default.  The provisions in both the note and the mortgage direct the plaintiff to engage in special default loan servicing and loss mitigation in its efforts to collect this debt to avoid foreclosure. 

a.  The mortgage has on its face a boxed FHA Case number and states:

            “9.  Grounds for Acceleration of Debt.

                             (a)  Default:  Lender may, except as limited by regulations issued by the Secretary in the case of payment defaults, require immediate payment…

                             (d)  Regulations of HUD Secretary. In many circumstances regulations issued by the Secretary will limit Lender’s rights in the case of payment defaults to require immediate payment in full and foreclose if not paid.  This Security Instrument does not authorize acceleration or foreclosure if not permitted by regulations of the Secretary.”

 

b.  Defendant affirmatively defends this foreclosure based on the Plaintiffs’ failure to comply with the forbearance, mortgage modification, and other foreclosure prevention      loan servicing requirements imposed on Plaintiffs and the subject FHA mortgage by      federal regulations promulgated by HUD, pursuant to the National Housing Act, 12      U.S.C. 1710(a).  As a result, Plaintiffs have failed to establish compliance with a     statutory and contractual condition precedent to this foreclosure because of Plaintiffs’     failure to comply with the federal regulations, as set out herein:

                        1.  Defendant defaulted on this FHA insured residential mortgage which is the subject of this cause due to reasons beyond her control.

                        2.  Defendant suffered severe a severe financial hardship as a result of losing her job.

                        3.  Her husband was unexpectedly imprisoned.

                        4.  Defendant suffered another economic setback and hardship in March 2008  when the Department of Children and Families decreased her Food Stamp      benefits.

                        5.  Defendant had to pay outstanding utility charges or have them disconnected while alone caring for two children.

                        6.  These circumstances caused the defendant to suffer severe financial problems.

7.  At all times defendant informed and notified the plaintiff through the plaintiff’s outsourced servicer of the subject mortgage loan about her financial hardship and circumstances.

                        8.  Defendant was in contact with Plaintiffs’ agents, representatives and  employees personally, and through Jacksonville Area Legal Aid, and she informed all parties, through her contacts and communications with the servicer of her loan of her financial hardship, her requests for loss mitigation and acceptable terms by which defendant could reinstate her mortgage.

                        9.  Plaintiff failed to offer any reasonable offer for or accommodation of loss mitigation in light of the defendant’s severe economic circumstances.

                        10.  Defendant timely informed Plaintiff of her extreme hardships, the nature of dependency on her income, and necessity that plaintiffs not demand aggressive unachievable payments in order to work out a modification.

                        11.  The interaction between the defendant and U.S. Bank, N.A., is not fairly or accurately characterized as “working with” because of the failure of U.S.      Bank, N.A. to follow the applicable default loan servicing obligations imposed on the plaintiffs.

                        12.  Plaintiff failed to properly service the Defendant’s federally insured home loan  under the troubled loan servicing regulations imposed on this HUD insured      loan because Plaintiff failed to offer this Defendant any reasonable opportunity for loss mitigation in light of the Defendant’s severe economic hardships which were not of her making or under her control.

                        13.The Plaintiff did not evaluate the loan for purposes of modification pursuant to the applicable and controlling federal servicing regulations, but instead,     Plaintiff failed and refused to provide this Defendant with access to a modification or workout of the subject mortgage reasonably as required by federal law.

                        14.The Plaintiff did not properly evaluate this Defendant’s troubled loan for      purposes of foreclosure avoidance because when the Defendant defaulted on her loan due to reasons beyond her control, the Plaintiff failed to adapt its collection and loan servicing practices to this Defendant’s individual circumstances.

                        15.The Plaintiff also did not make a reasonable effort as required by federal law to arrange a face to face meeting with the Defendant before three full monthly installments were unpaid as required by 24 C.F.R.  203.604.

                        16.The Plaintiff failed to evaluate all available loss mitigation techniques and failed to re-evaluate these techniques each month after the defendant missed      payments as required by 24 C.F.R.  203.605.

                        17.The plaintiff failed to properly evaluate this defendant’s loan for troubled loan servicing and failed to provide defendant with proper access to evaluation for a loan modification or for forbearance by the act of filing this foreclosure before      offering Defendant any of the federally required foreclosure avoidance options.

                        18.Plaintiff ignored its obligation to provide the defendant access to her legal right to receive to default loan servicing pursuant to the controlling federal laws and regulations that govern her HUD insured home loan and / or the pooling and servicing agreement that applies to the default loan servicing obligations of the plaintiff in the course of servicing the subject mortgage loan.  The plaintiff’s pooling and servicing agreement is on file with the SEC.

                        19.Plaintiff denied this Defendant her right to receive forbearance, mortgage modification, and other foreclosure prevention loan services before the      initiation of this foreclosure action.

                        20.Defendant made it clear to Plaintiff that she needed all the financial reprieve that she could gain under the troubled loan servicing protocol set out in the      federal law and regulations that apply to her federally insured home loan.

                        21.The Plaintiff failed to offer a loan modification to the defendant that followed the applicable default loan servicing requirements; failed to take into account      this Defendant’s financial circumstances; failed to address or deal with the legitimate disputes and issues this defendant has raised concerning the balance due under the terms of the subject mortgage loan.

22.  The Defendant made reasonable attempts to get back on track in regards to the payment of her mortgage taking into account her financial difficulties and hardship which were due to reasons beyond her control. 

            c.  The Plaintiff was required under federal law to adapt its collection and loan servicing practices to Defendant’s individual circumstances and failed to do so.

            d.  The Plaintiff did not make a reasonable effort as required by federal law to arrange a face to face meeting with Defendant before three full monthly installments were unpaid.  24 C.F.R. 203.604.

            e.  The Plaintiff was required by federal law to evaluate all available loss mitigation techniques and to re-evaluate these techniques each month after default and failed to do so.  24 C.F.R. 203.605.

            f.  HUD has determined that the requirements of 24 C.F.R. Part 203(C) are to be followed before any mortgagee commences foreclosure.

            g. Plaintiff has no valid cause of action for foreclosure against defendant unless and until Plaintiff can demonstrate compliance with the regulations in 24 C.F.R. Part 203(C). 

            h. As a result,  Defendant was denied access to the foreclosure prevention services and the mortgage servicing options that the plaintiffs are obligated to follow in servicing this federally insured  home loan which are designed to avoid foreclosure of this HUD insured mortgage.

             i. Defendant did everything she could to keep up with her monthly mortgage payments.

             j. This entire foreclosure and all the extra costs and fees associated therewith were supposed to be avoided by and through the good faith and timely provision of default loan servicing and loss mitigation assistance which the Defendant was entitled to receive and which the Plaintiff was obligated to provide under federal law and under                  the specific terms of the subject mortgage and note.

             k. Plaintiff denied this Defendant any opportunity to access a legitimate HUD required process to avoid this foreclosure. 

3.  PLAINTIFF FAILED TO COMPLY WITH APPLICABLE LOAN SERVICING REQUIREMENTS:   Plaintiff failed to provide separate Defendant with legitimate and non predatory access to the debt management and relief that must be made available to  FHA borrowers, including this Defendant and that control and apply to the subject mortgage loan.  Plaintiff’s non-compliance with the conditions precedent to foreclosure imposed on the Plaintiff makes the filing of this foreclosure premature based on a failure of a contractual and/or equitable condition precedent to foreclosure which denies Plaintiff’s ability to carry out this foreclosure. 

a.  Defendant asserts that the special default loan servicing requirements contained in the federal regulations are incorporated into the terms of the mortgage contract between the parties as if written therein word for word and the defendant is entitled to rely upon the servicing terms set out in the mortgage and the HUD regulations. 

b.  Alternatively or additionally, the Defendant is contractually and equitably  entitled to enforce the special default servicing obligations of the plaintiff described hereinabove.

c.   Plaintiff cannot legally pursue foreclosure unless and until Plaintiff demonstrates compliance with the foreclosure prevention servicing imposed by the mortgage contract  under which the plaintiff owns the subject mortgage loan. 

d.  The Plaintiff failed, refused or neglected to comply with prior to the commencement of this action with the servicing obligations specifically imposed on the Plaintiff in many particulars, including, but not limited to:

            1.  Plaintiff failed to service and administer the subject mortgage loan in

compliance with all applicable federal state and local laws. 

            2.  Plaintiff failed to service and administer the subject loan in accordance with the customary an usual standards of practice of mortgage lenders and servicers.

            3.  Plaintiff failed to extend to defendants the opportunity and failed to permit a modification, waiver, forbearance or amendment of the terms of the subject loan or to in any way exercise the requisite judgment as is reasonably required pursuant to the HUD regulations and the mortgage contract. 

e.  Plaintiff’s failure to meet the servicing obligations cause the filing by Plaintiff of this foreclosure to be in premature, in bad faith and a breach by Plaintiff of its obligation to Defendant set out in the mortgage contract and as specified in the HUD regulations and the contractual and equitable duty of the plaintiff to act in good faith and to deal fairly with defendant.

f.   Instead, Plaintiff’s servicing failures as set forth herein render Plaintiff’s actions in filing this premature foreclosure to be in breach of the mortgage contract, in breach of plaintiff’s contractual and equitable fiduciary duties owed to defendant; in bad faith and not in accordance with the acceptable loan servicing required under the mortgage, the note and the HUD regulations.

g.   Plaintiff intentionally failed to act in good faith or to deal fairly with the Defendant by failing to follow the applicable standards of residential single family mortgage servicing as described in these Affirmative Defenses thereby denying the Defendant access to the residential mortgage lending and servicing protocols applicable to the subject note and mortgage.

5.  ILLEGAL CHARGES ADDED TO BALANCE: Plaintiff has charged and/or collected payments from Defendant for attorney fees, legal fees, foreclosure costs, late charges, property inspection fees, title search expenses, filing fees, broker price opinions, appraisal fees, and other charges and advances, and predatory lending fees and charges that are not authorized by or in conformity with the terms of the subject note and mortgage or the controlling pooling and servicing agreement which specifies the waiver of late payments and other collection charges as part of the forbearance and loan modification default loan servicing.  Plaintiff wrongfully added and continues to unilaterally add these illegal charges to the balance Plaintiff claims is due and owing under the subject note and mortgage.

6.  FAILURE OF GOOD FAITH AND FAIR DEALING: UNFAIR AND UNACCEPTABLE LOAN SERVICING:    Plaintiff intentionally failed to act in good faith or to deal fairly with the subject Defendant by failing to follow the applicable standards of residential single family mortgage servicing as described in these Affirmative Defenses thereby denying Defendant access to the residential mortgage servicing protocols applicable to the subject note and mortgage.

7.   UNCLEAN HANDS/ESTOPPEL:  The Plaintiff comes to Court with unclean hands and is prohibited by reason thereof from obtaining the equitable relief of foreclosure from this Court as set forth in the Defendant’s statement of facts contained hereinabove and incorporated herein.  The Plaintiffs’ unclean hands result from the Plaintiffs intentional and reckless failure to properly service this mortgage pursuant to the applicable federal regulations and the contract between the parties before filing this foreclosure action.  Plaintiff intentionally failed to offer Defendant access to the special default loan servicing for financially troubled borrowers that the applicable federal law and the contract between the parties requires including moratorium, forbearance and loan modification.  As a matter of equity, this Court should refuse to foreclose this mortgage because acceleration of the note would be inequitable, unjust, and the circumstances of this case render acceleration unconscionable.  This Court should refuse the acceleration and deny foreclosure because the Plaintiff has waived the right to acceleration or is estopped from doing so because of intentionally misleading and reckless conduct and unfulfilled conditions.

          WHEREFORE, Defendant requests the Court dismiss the Plaintiffs’ Complaint with prejudice, and for all other relief to which this Defendant proves herself entitled including an award of reasonable attorney’s fees and costs in this action.

8.  PLAINTIFF LACKS STANDING:  U.S. Bank, N.A. is not the true owner of the claim sued upon, is not the real party in interest and is not shown to be authorized to bring this foreclosure action.

    #13

 

 



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Wow, thank you so much Ann.  I really appreciate it.  By the way, will my attorney show me the answer before he files it ?  I know I don't have to sign it but I forgot to ask him if he needs to get my approval before sending it off. 

Also, was that you that said you were able to find the trust your loan was in ?  I've been searching for about 3 plus months and haven't found ours.  I've tried the secinfo site and the ctslink site with no luck.

Any thoughts on how I could find it ?  It has to be there right ?  Would it be under the original lender National Bank of Kansas or would it be under Wells Fargo ?
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I request that my attorney to e-mail me all pleadings for me to review before filing. I don't have to sign the pleadings but I want to see them before filing and make sure I have a copy of the final & filed version. I gave my attorneys several pleading samples and discoveries samples I found in my research to save him research time. I e-mail him all info I found related to foreclosure defense to keep him updated. I look up my case docket every 3 days and I e-mail him if I see any new papers filed in my case. I learn and learn everything I can about Foreclosure Defense. I go to court house and read Foreclosure cases to see what the other attorneys do to help their clients. Court cases are public info. I take notes when I see interesting pleadings and add them in my research. I sit in the Court room during Foreclosure proceedings to observe how hearings happens. It's my battle and I want to be ready and in control.
I think filing an Answer without a Request for Production is putting myself in a sitting duck situation, waiting to be shot at any time by Plaintiff Motion for Summary Judgment
If you want more Foreclosure material to read including instruction how to find your loan , e-mail me at ocean11@the-beach.net. Best wishes
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I can help, I am not a lawyer but I do know the foreclosure gig. The Federal Courts have ruled pertaining to Wells Fargo and MERS. Neither have the mortgage note, no note no foreclosure. Look up "In re 14 foreclosure" also "In re foreclosure" Federal Judges have ruled that if the mortgage company cannot produce the mortgage note then the foreclosure is quashed. I do legal writtings, your case is easy.
Also, people are filing charges in the Law Division for fraudulently recording the loan in the Clerks office. Anything else e-mail me.
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William A. Roper, Jr.
A.R. needs help from an actual, qualified practicing lawyer!  It is great for folks to offer posted suggestions.  But in the end, A.R. needs to follow the lawyer's advice or get another lawyer.

Pete:  Foreclosure defense is FAR from a sure thing!  And defensive strategies as well as court rules vary considerably from jurisdiction to jurisdiction.  What works in judicial foreclosure states usually is ineffective in non-judicial foreclosure venues.  How and when defenses are pled in foreclosure states varies widely.

A.R. asked for help finding a good lawyer.  That is what A.R. NEEDS!
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Your right about different jurisdictions, but the federal courts override state proceedings.  Remember "Holder in Due Course", it's under Federal rule of Civil Procedure 17, and U.C.C. section 3-308, in NJ its R. 4:64. In re Foreclosure and In re 14 Foreclosure where in federal courts.
Check if you can file under the state Consumer Fraud Act, in NJ and NM you can file RESPA and TIL violations under those acts. 
Best of Luck A.R. 
As to William Roper, Jr, the lawyers are tied into the courts and ONLY looking out for the courts, the Banks have a very strong hold and influence  in and around the courts.
Just remember, lawyers are protecting their license not their clients rights. To back up my claim, have A.R. ask his lawyer to send out a Respa 6 letter, know what that is????
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I can recommend a good foreclosure defense attorney in South Jersey, if that's where his ppty is.  And I know of another attorney who does Essex County, NJ. He got SJ dismissed and the case is on for trial. The judge said to the bank's attny, "at least 2 assignments are missing."
If Pete still needs help and can send me an email.  I note that the request was in April though.
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William A. Roper, Jr.
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Pete said
Your right about different jurisdictions, but the federal courts override state proceedings.  Remember "Holder in Due Course", it's under Federal rule of Civil Procedure 17, and U.C.C. section 3-308, in NJ its R. 4:64. In re Foreclosure and In re 14 Foreclosure where in federal courts.

 
1.  State courts are NOT bound to the Federal Rules of Civil Procedure UNLESS a particular state has adopted the Federal Rules for use in state court.  State court Rules are in no way subordinate to Federal Court RULES, though Federal law pre-empts state law in certain other areas and particularly in Constitutional matters.
 
2.  "Holder in Due Course" is distinctive from being a holder under the UCC.  A valid holder can enforce a promissory note, but the holder can only interpose holder in due course protections as to certain affirmative defenses if the holder also qualifies as a holder in due course.  Holder in due course is NOT central to a standing defense.
 
3.  While a standing defense can be raised under the Article III restraints on Federal Courts, the restraints of Article III do NOT apply to State courts.  Many state courts operate under similar restraints under "open courts" provisions of state constitutions, but these vary widely.  Some states do not recognize standing as a state constitutional imperative (e.g. Maine).  [See my prior posts on this topic]
 
4.  Federal Rule 17 and similar state court provisions in many states relate to a suit being brought by a real party at interest.  Very often, a defendant making a Rule 17 real party at interest argument is DEFEATED if the plaintiff can show that it has acquired interest in the mortgage indebtedness even after commencement of the suit.  By contrast, a Constitutional standing argument requires ownership of the indebtedness at the commencement of the suit or else the suit MUST BE dismissed, usually without prejudice. 
 
Pete, your failure to understand these concepts and incorrect articulation of these principles is going to cost someone their home!
 
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Pete said  
As to William Roper, Jr, the lawyers are tied into the courts and ONLY looking out for the courts, the Banks have a very strong hold and influence  in and around the courts.  Just remember, lawyers are protecting their license not their clients rights.  To back up my claim, have A.R. ask his lawyer to send out a Respa 6 letter, know what that is????


I am NOT a big fan of the legal profession and it turns my stomach to see the poor representation that is passed off as the practice of law.  But Courts are also very prejudiced and hostile against pro se litigants.

Depending upon the intelligence, knowledge, skill and time that a defendant has, self-representation may be a reasonable answer.  I have represented myself pro se for more than four years and I am doing fine.  But, while not a lawyer, I have an Ivy League education and prior experience in the mortgage industry.

I would NOT recommend self-representation to the average defendant and whenever a defendant has the resources to obtain legal representation, I would encourage them to do so.
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The holder of the mortgage note is the real party of interest, is it not. If the Bank sold the mortgage note to either wall street under mbs's or the fed bought your note the bank has no standing to collect or foreclose on a property that they have already been paid for. Also the bank is not a third party collection agency, they can only collect for what is owed to them. the real parties in interest are either wall street or the fed reserve, is it not? The banks have no standing because their debt is satisfied, this has been argued with cases In re Foreclosures and other Ohio federal rulings. You must also consider assignment and nominees in the MERS cases where the courts have ruled against MERS every time. The argument is simple, if the bank received money to satisfy a debt for a property does the bank have any legal rights to the house, Absolutely not. You owe either wall street or the federal reserve. Wall street was a risk that was bailed out by who's money? OURS! The feds are buying mortgage notes directly from banks with who's money? OURS! 
Now heres the problem, the banks are foreclosing on property and reselling it when they know the debt has been paid in full by another source. 
William get back, I'll check for your reply.
  
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