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.
Articles |The FORUM |Law Library |Videos | Fraudsters & Co. |File Complaints |How they STEAL |Search MSFraud |Contact Us
Cindy
I'm needing help in assessing this fact in an elderly homeowner's case: The first copy of a note attached to the complaint included an alleged indorsement in blank by the original lender. About a year later (2011) in discovery, the plaintiff's law firm submitted a second copy of the note with two new alleged indosements, one special indorsement to CW and a CW indorsement in blank. Of course, CW ceased to exist in 2008, so I'm thinking this means stamped indorsements were added to a copy of the note after the case began in 2010. Plaintiff claims to be the holder of the note and mortgage at the time of filing the lawsuit but claimed the document custodian had possession of the note. 

Should this second copy of the note with stamped indorsements be presented as fraud on the court? 

To further complicate this issue, the homeowner's case is one where BoA "parent company" took over servicing long after the lawsuit was filed and affirms in a letter that it does not own the loan, rather, it alleges that a Fannie trust is the "creditor to whom the debt is due." Since the parent company wholly owns the plaintiff and the parent company acknowledges that it does not own the loan, does that mean its subsidiary could not hold the note as it claims?

As an aside, here is something I don't think I've seen mentioned here or in any case I've read: The UCC says the party entitled to enforce must be in possession of the INSTRUMENT ... as opposed to a copy of the instrument. The UCC defines its use of the term "instrument" as a negotiable instrument. A copy of the note is no more negotiable [legally] than a copy of a check is negotiable. 

Also, to add another tidbit, I have a copy of a FNMA 2011 lender letter stating that the servicers are not its agents, assigns, or representatives, but are instead, independent contractors. Are we all missing a significant issue with FNMA loans by not bringing this to the court's attention? 
Quote 0 0
Bill
Quote:
Should this second copy of the note with stamped endorsements be presented as fraud on the court? 
 
Your question is the reason it is very difficult to give any thoughts or opinions about someone's case on line.  I don't think anyone can give you an opinion without seeing the documents. 
 
My knee jerk reaction without seeing EXACTLY what is on the documents would be, NO.  I don't think it is fraud upon the court, and I think it could easily explained away.  It could have very easily been a simple paperwork mistake.
 
The long answer would be you need more focused discovery and to start reading the cases in your jurisdiction.  What the Plaintiff gives you in discovery can be used by you as evidence, it is NOT evidence, and it cannot be used to support the Plaintiff's case.  If you chose NOT to use discovery responses in court they just sit in a pile on your desk.  You obviously would NOT want to use documents or responses that have a negative effect on your case.
 
On the flip side, I would encourage you to read the cases on pleadings being judicial admissions, denying the authenticity of exhibits, and denying averments in the pleadings.  Most of the time what you put in your pleadings (complaint) is a Judaical admission.  This includes your exhibits.  The court does not need to accept as true averments that are contradicted by exhibits attached.  In some jurisdictions you cannot deny the authenticity of your own exhibits. 
 
This can cause problems and questions of facts for the court. 
 
Rather than trying to say a paper work mistake (that's what they will say) is fraud upon the court, I personally would first be looking at are they binding themselves to something negative with the complaint?  I do think you are raising a question of fact in regards to did they have the original note when they filed suit and exactly when did they receive it.  If you focused some discovery asking them to authenticate the note attached to the complaint as a true and correct copy and probe some more on when it was received, from whom, ect...  you may box them in a little.  If they admit that the copy attached to the complaint is true and correct, they were the holder the whole time, where did the endorsements come from?  It obviously had to be sent to the other entities for endorsement.  When they received the note THEY became the holder for how ever brief a time it took them to do the endorsement.  With good discovery and some answers under oath you may get them pretty twisted.  I've seen a few bankruptcy cases where this has happened.  The bank said they had the note at all times but the evidence showed other parties did hold the note in the same period. 
 
If the endorsements are totally different, it really raises a question of did they have the original at commencement.
 
It is pretty difficult to say you have the original and deny the authenticity of the copy you attached to the complaint. 
 
I don't think you are going to have much success with fraud at this point...you need more discovery answered under oath.
 
Not legal advice.......Just a few thoughts......
Quote 0 0
Hi Bill,

Would you explain this sentence for me.

What the Plaintiff gives you in discovery can be used by you as evidence, it is NOT evidence, and it cannot be used to support the Plaintiff's case. 

Thanks,
Bob
Quote 0 0
Bill

Bob Schmidt wrote:
Hi Bill,

Would you explain this sentence for me.

What the Plaintiff gives you in discovery can be used by you as evidence, it is NOT evidence, and it cannot be used to support the Plaintiff's case. 

Thanks,
Bob


Sorry if I worded this in a way that was difficult to understand. 

An example would be:

I ask for a copy of any assignment of my mortgage in discovery. 

The Plaintiff gives me a copy from the originator to a trust.


What impact does this have on my case?

1. 
Quote:
What the Plaintiff gives you in discovery can be used by you as evidence


I can use this as evidence in my case.  It doesn't magically become evidence, I have to submit it to the court as evidence.  If I don't feel it helps me I don't have to reference the assignment in any way.

2. 
Quote:
it is NOT evidence


Just because someone responds to discovery does not make it part of the case or evidence.  In many jurisdictions discovery is done on an informal basis without involving the court at all until one party needs to compel the other party.  In many jurisdictions the local rules PROHIBIT a party from just filing discovery responses unless it is in support of some kind of motion or pleading.  The copy of the assignment again would not be evidence unless I submitted it to the court or the Plaintiff submitted it to the court as evidence.

3. 
Quote:
and it cannot be used to support the Plaintiff's case


In most jurisdictions what you give to another party in discovery cannot be used to support your case.  The Plaintiff in this example cannot reference the assignment that was given to the Defendant in response to discovery.  If they wanted to use this assignment, again, the Plaintiff would have to submit the assignment to the court as evidence and I would have a chance to object.

Another great example would be a request for admissions.  Most of these are going to be denied.  The Plaintiff can't deny an admission then go to the Judge and say this is evidence, see here, we denied this in our discovery response.

Discovery is a VERY STRONG tool.  Many cases are ENDED because of discovery.  With the example you can see why.  You can also see why the Plaintiff doesn't want to answer ANYTHING.  It can be used AGAINST them but benefits them in no way. 

You can pick and choose what responses and documents you receive in discovery to give to the Judge as evidence and what you don't like you can discard.

As I said, you would need to involve the court (read the local rules) when they refuse to answer your discovery.  IF YOU SUBMIT A HUGE DISCOVERY REQUEST you will have to go to the Judge on a motion to compel and explain why this isn't burdensome.  I have seen MANY examples on the net that are very long.  While these may be drafted by an attorney, these are NOT usually a good example to follow.  Attorneys are experienced in motions to compel and most likely have a standard response on the objections to their questions.  A Pro Se is going to have a much harder time with this.  It most likely would be far more effective (and time consuming, causing long delays) to split your discovery into a few smaller requests.  Give them one, when they answer, give them another one. 

I'm not an attorney, this isn't legal advice...................
Quote 0 0
Cindy
Bill, thank you so much for this helpful discussion. I appreciate your help more than I can say. I understand so much more now about appropriately handling discovery. Everyone should read this short and clear explanation. Excellent.

I have another question. If the homeowner has evidence that completely negates the servicer's claim that it is the holder of the note, and this evidence came from a letter to the homeowner from the servicer's parent company, must that letter be presented as evidence during discovery? 

Quote 0 0
Write a reply...