(a) If tender of payment of an obligation to pay an instrument is made to a person entitled to enforce the instrument, the effect of tender is governed by principles of law applicable to tender of payment under a simple contract.
(b) If tender of payment of an obligation to pay an instrument is made to a person entitled to enforce the instrument and the tender is refused, there is discharge, to the extent of the amount of the tender, of the obligation of an indorser or accommodation party having a right of recourse with respect to the obligation to which the tender relates.
(c) If tender of payment of an amount due on an instrument is made to a person entitled to enforce the instrument, the obligation of the obligor to pay interest after the due date on the amount tendered is discharged. If presentment is required with respect to an instrument and the obligor is able and ready to pay on the due date at every place of payment stated in the instrument, the obligor is deemed to have made tender of payment on the due date to the person entitled to enforce the instrument.
So naturally, you want to know why the creditor would be so stupid as to return your overdue payment. for the answer see (a) above, and paragraph two of section 1 of the uniform covenants of your mortgage or deed of trust:
Payments are deemed received by Lender when received at the location designated in the Note or at such other location as may be designated by Lender in accordance with the notice provisions in Section 15. Lender may return any payment or partial payment if the payment or partial payments are insufficient to bring the Loan current. Lender may accept any payment or partial payment insufficient to bring the Loan current, without waiver of any rights hereunder or prejudice to its rights to refuse such payment or partial payments in the future, but Lender is not obligated to apply such payments at the time such payments are accepted. If each Periodic Payment is applied as of its scheduled due date, then Lender need not pay interest on unapplied funds. Lender may hold such unapplied funds until Borrower makes payment to bring the Loan current. If Borrower does not do so within a reasonable period of time, Lender shall either apply such funds or return them to Borrower. If not applied earlier, such funds will be applied to the outstanding principal balance under the Note immediately prior to foreclosure. No offset or claim which Borrower might have now or in the future against Lender shall relieve Borrower from making payments due under the Note and this Security Instrument or performing the covenants and agreements secured by this Security Instrument.
NORMAN BRADFORD SHOWS THAT THE COURTS LIKE RESCISSION and OTHER FORMS OF MORTGAGE ATTACK, etc, IF THE BORROWER ARTFULLY MANAGES THE ATTACK.
If you want to see a case where the court denied rescission pre-Jesinoski, but the court awarded damages and attorney fees to the plaintiff, and where the MORTGAGE ATTACK lawsuit shows you how to set up a win, read up on Bradford v HSBC. Get the PACER docket report for this case:
1:09-cv-01226-TSE-JFA Bradford v. HSBC Mortgage Corporation et al
If you use the RECAP THE LAW extension in Firefox or Chrome browser, you can get an abbreviated docket report and some case docs FREE. Get the Docket Report I just ran HERE:
This case has not ended yet, partly because the creditor filed for bankruptcy and has not come out yet.
As the above opinions show, Bradford took out a refi loan in 2006, and paid on it for two years even thought the loan broker had lied, bait and switched him, then Bradford send the lender a justified notice of rescission in 2008. He sued for TILA rescission, for related damages including credit reputation damage for failure of the creditor to remove the lien and to tender after he offered to tender, for FDCPA violations for trying to collect a rescinded debt, for RESPA violations because the servicer refused to tell him the identity of the creditor (for which Bradford won costs, $4K damage, and over $25K legal fees), and for wrongful foreclosure. He filed the lawsuit 1 year and 16 days after sending notice of rescission.
Document 56 shows that a competent plaintiff like Bradford can craft a multi-count complaint so that it sails past a motion to dismiss with flying colors. The judge analyzes the complaint carefully and seems to love it.
The court ended up dismissing the rescission complaint because the 4th Circuit had opined that the borrower must sue within 3 years after closing, and Bradford sued a little over 4 years after closing. Thereafter, the 4th Circuit changed its view about the timing of rescission lawsuit, incidentally aligning with the Jesinoski opinion.
After the creditor comes out of bankruptcy, Bradford will have the ability to challenge the rescission dismissal in light of later Circuit position on suing for rescission, and in light of Jesinoski. The court would, of course, reverse the dismissal and order the unwinding of the loan. However, Bradford will have a considerable amount of setoffs, and the creditor knows it.
So, instead of challenging the dismissal right off, he can demand a settlement from the creditor (“Give me the house free and clear and call us even”). He will point out how badly he has beat up his adversaries already, and how much more he will beat them up with the rescission and setoffs and enormous legal fees, etc. They might make him a suitable counter offer. Or he might have to take them back to court. Time will tell.
Regardless, Bradford has not made a house payment since late 2008, he does not have to make payments because of the justified rescission, and interest stopped accruing on his debt in 2008, giving him free use of that money in the form of his house
In summary, Norman Bradford has, though his case, conducted a Mortgage Attack seminar for anyone wanting to know how to beat up the bank and its team members. The pleadings sit there on PACER for you to study.
Statute of Limitations Applies to Whole Payment Stream
By Bob Hurt, 18 September 2015
Florida’s 1st District Appellate Court gave Germaine and Andrea Brown a rude awakening by telling them the Florida foreclosure 5-year statute of limitations does not apply a 30-year stream of mortgage payments even after the creditor accelerates the loan, making the entire balance immediately due and payable. The panel cited the Florida Supreme Court opinion in Singleton v Greymar (2004) as the controlling authority (“the unique nature of the mortgage obligation and the continuing obligations of the parties in that relationship.”). The panel held that “the subsequent and separate alleged default created a new and independent right in the mortgagee to accelerate payment on the note in a subsequent foreclosure action.” In other words, every default of a scheduled payment provides a new right to sue, throughout the original term of the loan.
The panel admitted that Florida’s 3rd District had reached a contrary conclusion in Deutsche Bank v Beauvais (2014). But the panel harked to the USDC adverse opinion in Stern v BOA (2015) which claimed that Beauvis opinion went against ”overwhelming weight of authority.” Now the Beauvais court plans to review its decision.
This should make it abundantly clear that the foreclosure statute of limitations in Florida does not constitute a valid defense against foreclosure, except on payments more than 5 years overdue on which the creditor has failed to take action.
Why should this matter to mortgage victims facing foreclosure? Because you cannot depend on Foreclosure Defense to defeat foreclosure. The court/trustee will NOT give you a free house.
ONLY ONE methodology gives home loan borrowers a reliable chance beat the appraiser, mortgage broker, title company, servicer, and creditor in a mortgage dispute: MORTGAGE ATTACK. Borrowers must ATTACK THE VALIDITY OF THE LOAN, and to do that, they must get a comprehensive mortgage examination.
If you have a mortgage dispute, contact Mortgage Attack NOW for a full explanation of the ONLY WINNING METHODOLOGY.
NATIONSTAR MORTGAGE, LLC v. Brown, Fla: Dist. Court of Appeals, 1st Dist. 2015
District Court of Appeal of Florida, First District.
Opinion filed August 24, 2015.
Nancy M. Wallace of Akerman LLP, Tallahassee; William P. Heller of Akerman LLP, Fort Lauderdale; Celia C. Falzone of Akerman LLP, Jacksonville, for Appellant.
Jared D. Comstock of John F. Hayter, Attorney at Law, P.A., Gainesville, for Appellees.
Appellant challenges a final summary judgment holding that the statute of limitations bars appellant’s action to foreclose the subject mortgage. We agree with appellant that the statute of limitations did not bar the action. Thus, we reverse.
It is undisputed that appellees have failed to make any mortgage payments since February 2007, the first month in which they defaulted. In April 2007, appellant’s predecessor in interest gave notice of its intent to accelerate the note based on the February 2007 breach, and filed a foreclosure action. However, the trial court dismissed that action without prejudice in October 2007, after counsel for the lender failed to attend a case management conference.
The next relevant event occurred in November 2010, when appellant sent appellees a new notice of intent to accelerate, based on appellees’ breach in March 2007 and subsequent breaches. Appellees took no action to cure the default, and appellant filed a new foreclosure action in November 2012. Appellees asserted the statute of limitations as an affirmative defense, arguing that the new action and any future foreclosure actions were barred because they were not filed within five years after the original 2007 acceleration of the note. § 95.11(2)(c), Fla. Stat. (2012) (establishing five year statute of limitations on action to foreclose a mortgage).
The principles set forth in Singleton v. Greymar Associates, 882 So. 2d 1004 (Fla. 2004), apply in this case. In Singleton, the Florida Supreme Court recognized “the unique nature of the mortgage obligation and the continuing obligations of the parties in that relationship.” 882 So. 2d at 1007 (emphasis added). The court sought to avoidboth unjust enrichment of a defaulting mortgagor, and inequitable obstacles “prevent[ing] mortgagees from being able to challenge multiple defaults on a mortgage.” Id. at 1007-08. Giving effect to those principles in light of the continuing obligations of a mortgage, the court held that “the subsequent and separate alleged default created a new and independent right in the mortgagee to accelerate payment on the note in a subsequent foreclosure action.” Id. at 1008. The court found it irrelevant whether acceleration had been sought in earlier foreclosure actions. Id. The court’s analysis in Singleton recognizes that a note securing a mortgage creates liability for a total amount of principal and interest, and that the lender’s acceptance of payments in installments does not eliminate the borrower’s ongoing liability for the entire amount of the indebtedness.
The present case illustrates good grounds for the Singleton court’s concern with avoiding both unjust enrichment of borrowers and inequitable infringement on lenders’ remedies. Judgments such as that under review run afoul of Singleton because they release defaulting borrowers from their entire indebtedness and preclude mortgagees from collecting the total debt evidenced by the notes securing the mortgages they hold, even though the sum of the installment payments not made during the limitations period represents only a fraction of the total debt. See GMAC Mortg., LLC v. Whiddon, 164 So. 3d 97, 100 (Fla. 1st DCA 2015) (dismissal of earlier foreclosure action “did not absolve the Whiddons of their responsibility to make mortgage payments for the remaining twenty-five years of their mortgage agreement”). We further observe that both the note and the mortgage at issue here contain typical provisions reflecting the parties’ agreement that the mortgagee’s forbearance or inaction do not constitute waivers or release appellees from their obligation to pay the note in full. These binding contractual terms refute appellees’ arguments and are inconsistent with the judgment under review.
We have held previously that not even a dismissal with prejudice of a foreclosure action precludes a mortgagee “from instituting a new foreclosure action based on a different act or a new date of default not alleged in the dismissed action.” PNC Bank, N.A. v. Neal, 147 So. 3d 32, 32 (Fla. 1st DCA 2013); see also U.S. Bank Nat. Ass’n v. Bartram, 140 So. 3d 1007, 1014 (Fla. 5th DCA), review granted, 160 So. 3d 892 (Fla. 2014) (Case No. SC14-1305) (dismissal of earlier foreclosure action, whether with or without prejudice, did not bar subsequent foreclosure action based on a new default);Evergrene Partners, Inc. v. Citibank, N.A., 143 So. 3d 954, 955 (Fla. 4th DCA 2014)(foreclosure and acceleration based on an earlier default “does not bar subsequent actions and acceleration based upon different events of default”). The dismissal in this case was without prejudice, so much the more preserving appellant’s right to file a new foreclosure action based on appellees’ breaches subsequent to the February 2007 breach asserted as the procedural trigger of the earlier foreclosure action. We find that appellant’s assertion of the right to accelerate was not irrevocably “exercised” within the meaning of cases defining accrual for foreclosure actions, when the right was merely asserted and then dismissed without prejudice. See Olympia Mortg. Corp. v. Pugh, 774 So. 2d 863, 866-67 (Fla. 4th DCA 2000) (“By voluntarily dismissing the suit, [the mortgagee] in effect decided not to accelerate payment on the note and mortgage at that time.”); see also Slottow v. Hull Inv. Co., 129 So. 577, 582 (Fla. 1930) (a mortgagee could waive an acceleration election in certain circumstances). After the dismissal without prejudice, the parties returned to the status quo that existed prior to the filing of the dismissed complaint. As a matter of law, appellant’s 2012 foreclosure action, based on breaches that occurred after the breach that triggered the first complaint, was not barred by the statute of limitations. Evergrene, 143 So. 3d at 955 (“[T]he statute of limitations has not run on all of the payments due pursuant to the note, and the mortgage is still enforceable based upon subsequent acts of default.”).
We are aware that the Third District has reached a contrary conclusion in Deutsche Bank Trust Co. Americas v. Beauvais, 40 Fla. L. Weekly D1, 2014 WL 7156961 (Fla. 3d DCA Dec. 17, 2014) (Case No. 3D14-575). A federal district court has refused to follow Beauvais, noting that it is “contrary to the overwhelming weight of authority.” Stern v. Bank of America Corp., 2015 WL 3991058 at *2-3 (M.D. Fla. June 30, 2015) (No. 2:15-cv-153-FtM-29CM). The court in Beauvais acknowledges that its conclusion is contrary to the weight of authority on the questions presented. 2014 WL 7156961, at *8-9. That court’s docket shows that the court has set the case for rehearing en banc; it remains to be seen whether the merits disposition will change.
Accordingly, we reverse and remand for further proceedings on appellant’s foreclosure action.
THOMAS and MARSTILLER, JJ., CONCUR.
NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF FILED.
“…with figurative hand holding the nose, the Court, for the reasons
set forth below, will grant Debtor’s motion for summary judgment.”
“The Court will proceed to gargle in an effort to remove the lingering bad taste.”
In the case I linked above, the New Jersey US Bankruptcy court denied foreclosure of an unpaid mortgage because the claimant securitization trust FAILED to sue within 6 years after it had accelerated the note because of non-payment. The New Jersey 6 year foreclosure statute of limitations, enacted in 2009 as an adjunct to the 1995 Fair Foreclosure Act, forbids foreclosure later than 6 years after accelerating the note.
I see the banks’ moaning about this decision as an effort to have their cake and eat it too. The bank accelerates the note, making the whole balance due immediately, but still wants the statute of limitations to expire AFTER the originally scheduled maturity date of the note(typically 20 or 30 years.)
A similar dispute has arisen in Florida, and the courts simply cannot face the reality that creditors who fail properly to litigate
foreclosure deserve to lose their claim against the borrower. The Florida Supreme Court has failed to weigh in on the matter so far, but has granted certiorari to determine whether the Statute of Limitations applies to accelerated notes. See Bartram v. U.S. Bank, Nat’l Ass’n, 140 So. 3d 1007 (Fla. 5th DCA 2014), cert granted, (Fla. Sept. 11, 2014)(No. SC14-1265).
The Third District has opined that a dismissal with prejudice
de-accelerates the note as a matter of law. I disagree, but anyway see Deutsche Bank Trust Company Americas v. Beauvais, 3D14-575, 2014 WL 7156961 (Fla. 3d DCA 2014). The Third DCA also held that a threat to accelerate does not constitute an acceleration. See Snow v. Wells Fargo Bank, N.A., 2015 WL 160326 (Fla. 3d DCA Jan. 14, 2015).
In my opinion, a threat to accelerate does not constitute an
acceleration, but NO dismissal, with or without prejudice, stops the
statute of limitation clock from ticking or restarts it. The clock
starts ticking on the payment stream at the instant the first breach
occurs or on the entire amount of the note with accrued interest and
collection costs the instant the creditor accelerates the note.
The big rub in all this lies with the concept of acceleration. The borrower must make payments in a stream of payments, and every payment has an associated statute of limitations. But if, because of a breach, the creditor accelerates the note, making the entire balance due and payable forthwith, the statute of limitations clock starts ticking at the acceleration because the payment stream obligation no longer exists, by operation of the law of the contract.
Let us back off from all this to see it in crystal clear context. What difference does a foreclosure or related statute of limitations make when the lender or others injured the borrower at the inception of the loan through such heinous acts as these:
loan application fraud
bait and switch tactics
excessive origination fees
A borrower who attacks the injurious parties over these can end up with millions of dollars in compensatory and punitive damages, or the house free and clear, without the gruelling terror of a foreclosure battle.
If you want to know how to find such injuries as those I listed above,
plus dozens more, visit this web site:
TECHNICAL ALERT: I, the author, am not an attorney or practitioner, and I do not seek in this article to solve any specific problem for any specific person. I provide this information for academic and discussion purposes. Consultant a COMPETENT attorney on all questions of law. To ensure competence, demand and verify a winning record in similar cases before you trust his battle scheme.
Background: Why I Write this Article
Securitization audits have suffered a SHOCKING decline recently as foreclosure victims learned the hard way that the audits give no value to the foreclosure process, and foreclosure victims cannot use them to avert foreclosure.
Hundreds of people have called me personally or written to me about their mortgage problems since 2009. I would say thousands, but I have lost count. That year I started giving people FREE information about what works and what does not win mortgage disputes against creditors and their agents and associates.
The majority of those callers had already blown hundreds to thousands of dollars on a “Securitization Audit” or flimsy “Loan Audit” which did not have the worth of the powder to blow them to hell. Many mortgagors had also blown thousands to pay a foreclosure “pretense defense” attorney for the privilege of dragging out the foreclosure. Most of those foreclosure victims eventually lost their homes to foreclosure auction. Many who did loan mods went into foreclosure again and either lost the home or soon will.
Every one of those people bought a service from a clueless “Kool-Aid Drinker” or an out-and-out scammer (charlatan, cheat, con artist). Even those attorneys who promised “We’ll keep you in the house as long as we can” committed legal malpractice if they failed to examine the mortgage transaction comprehensively for evidence of fraud and other torts, contract breaches, regulation breaches, and legal errors, and as a result failed to lodge the causes of action and affirmative defenses that would have averted foreclosure.
I write this commentary not just to give all those snakes-in-the-grass the literary black eye that they deserve, but also to give the reader something FREE that bozo scammers charge hundreds or thousands for.
I shall tell you, in short order, how to find out who owns your note and why the chain of ownership of the note has no relevance to foreclosure courts.
Securitization audit scammers tell their desperate, clueless foreclosure victim prospects that they will research the “chain of title” and find out who owns the note and what shenanigans happened during transfers of note ownership. They will suggest that the chain of title to the note really matters in a foreclosure dispute.
In reality, as demonstrated by myriad foreclosure sales, it does not matter at all to the foreclosure judge or trustee. Those scammers will talk about their certification, credentials, and the crookedness of securitization, putting the note into the trust after the closing date specified in the pooling and servicing agreement (PSA), REMIC violations, Bloomberg terminals for researching Securities and Exchange Commission information, etc. And they will show you a wad of useless affidavits, and claim to have functioned as expert witnesses. They will not tell you their affidavits and testimony have no notable effect on foreclosure decisions.
Judges and Lawyers Declare the Securitization Audit CROOKED
I shall prove to you right now that those securitization audit scammers and the charlatan attorneys who con you into paying for such audits are liars and con artists for suggesting such audits have an iota of value.
See, Demilio v. Citizens Home Loans, Inc. (M.D. Ga., 2013) (“Frankly, the Court is astonished by…Plaintiff’s attempt to incorporate such an ‘audit,’ which is more than likely the product of “charlatans who prey upon people in economically dire situation.”)
In other words, after reading this, you show yourself a fool if you ever fall for their suggestions that you need the audit to terminate a foreclosure permanently.
You do not have to take my word for it. Look at what two attorneys say about securitization audits:
“… Most ‘securitization audits’ that I have reviewed are inadmissible in a court of law; they contain a mere opinion of a layman without personal knowledge (direct experience) as to what happened with a particular mortgage note after closing. Why pay a securitization auditor when you can have your grandmother provide an opinion as to what happened with the note and have her sign an ‘audit report’? In reality, in about 95% of all cases, the information supplied by a ‘securitization audit’ is either already publically available, or it is unavailable to either the homeowner or the auditor. Thus, where a homeowner genuinely lacks this information, an outsider’s opinion (in contrast to the bank’s admission) is unlikely to help.”
Gregory Bryl, Foreclosure Defense Attorney, Virginia and Florida.
“Mortgage Loan Securitization Audits ARE A CRIME! … THAT INFORMATION IS USELESS IF IT IS NOT ADMISSABLE IN COURT! … So I issue the challenge once again….WILL ANY SO CALLED SECURITIZATION EXPERT PLEASE STAND UP? PLEASE, SHARE WITH ME ADMISSABLE EVIDENCE OF SUCCESS IN ANY FORECLOSURE OR BANKRUPTCY CASE!”
Matthew Weidner, Foreclosure Defense Attorney, Florida.
Why A Borrower Defaulting a Valid Loan Cannot Beat Foreclosure
Before I tell you how to get the benefit of a securitization audit FREE, and how to get the name of the note owner, let us examine some essential facts. To get to those facts, please answer these questions, assuming you have become a mortgagor (borrower):
Did you borrow money to purchase, refinance, or get a line of credit on a home?
Did you sign a note in which you agreed that you had received a loan?
Did you sign a security instrument (Deed of Trust – DOT, or Mortgage) in which you asserted having seisin (possession) and having transferred the estate to the lender for purpose of a mortgage or deed of trust?
Did the lender assign a servicer to service your account (take payments manage, escrow, distribute proceeds, answer your questions regarding servicing the loan)?
Did you make any timely payments to the servicer?
Foreclosure Deals with Breach of Contract
If you answered yes to those questions, then you know you have a contractual relationship with the lender, in which various other entities played a role (realtor, appraiser, mortgage broker, Title Company, attorney, etc.).
Moreover, you know that if either you or the others breach the contract, then that entitles you or the lender to take legal action. You know that in a judicial foreclosure state the lender may sue you and take the house in a foreclosure sale if you breached the contract. You know that in non-judicial foreclosure state, the lender may get the trustee to foreclose.
The lender needs to fulfill certain conditions, listed in § 22 of your loan security instrument, prior to such action, such as notify you that you breached the note, accelerate the note to make the balance due and payable now, and then take the matter to the trustee or sue you to get that money or the house.
You Lose the House if You Breached the Note
You SHOULD know that if the lender or his agents or associates engaged in some crooked behavior that invalidated the note or the loan transaction, that will give you reason to sue.
If the lender sues you for a breach and wins, the lender gets your house, or money from its sale, because the lender has a security instrument.
Unlike the lender, you do not have a security instrument that lets you go to the court or trustee to order the lender or his agent or associate to give up his house in some kind of foreclosure sale. So how do you deal with injuries you suffered in the loan process? And how do you find out who owns the note?
Why Not Ask the Servicer and Complain to the CFPB?
You should know that if you want to learn who owns the note, you do not need a securitization audit because you can just ask the servicer. And that remains true if you want some error in your loan corrected.
You might know, though many do not, that the US Government has established the Consumer Financial Protection Bureau (CFPB) to resolve disputes between borrowers and lenders and their servicers. You can file a complaint at the following web site:
Why You Have No Standing in PSA or Note Assignment Disputes
But wait a minute. Surely you must wonder whether robo-signing, notary falsification of note assignments, assignment to a securitization trust after the closing date specified in the Pooling and Servicing Agreement (PSA), violations of Real Estate Mortgage Investment Conduit (REMIC) rules, and other securitization and assignment issues have any bearing on foreclosure, and whether you can use related arguments to beat foreclosure. You might actually believe a securitization audit can shine some light on these concerns.
Let us answer another set of questions to get to the truth:
Did you become a party to, become injured by, or become a third party beneficiary of:
The PSA for a trust that owns your note?
Any assignment of your note to another creditor (owner of beneficial interest in the note)?
If you answered NO to both a and b above, then you know that neither the assignment nor the PSA have any effect on you whatsoever. Surely you know they do not affect whether or not you have breached your note or owe a mortgage loan debt. So, therefore, you know (do you not?) that you have no standing to dispute or enforce the PSA or any assignment of the note in court. That means robo-signing of the note (one of those ridiculous things securitization auditors tell you they will find for you) has become irrelevant to you and to any court.
See, Javaheri v. JPMorgan Chase Bank N.A., 2012 WL 3426278 at *6 (C.D. Cal. Aug. 13, 2012). (“Plaintiffs here do not dispute that they defaulted on the loan payments, and the robo-signing allegations are without effect on the validity of the foreclosure process.”)
About Blank Indorsements of the Note
Furthermore, according to the Uniform Commercial Code (UCC), if a creditor indorses the note in blank instead of naming an assignee, the note becomes bearer paper. See, UCC §3-205https://www.law.cornell.edu/ucc/3/3-205.
3-205. SPECIAL INDORSEMENT; BLANK INDORSEMENT; ANOMALOUS INDORSEMENT.
(a) If an indorsement is made by the holder of an instrument, whether payable to an identified person or payable to bearer, and the indorsement identifies a person to whom it makes the instrument payable, it is a “special indorsement.” When specially indorsed, an instrument becomes payable to the identified person and may be negotiated only by the indorsement of that person. The principles stated in Section 3-110 apply to special indorsements.
(b) If an indorsement is made by the holder of an instrument and it is not a special indorsement, it is a “blank indorsement.” When indorsed in blank, an instrument becomes payable to bearer and may be negotiated by transfer of possession alone until specially indorsed.
(c) The holder may convert a blank indorsement that consists only of a signature into a special indorsement by writing, above the signature of the indorser, words identifying the person to whom the instrument is made payable.
(d) “Anomalous indorsement” means an indorsement made by a person who is not the holder of the instrument. An anomalous indorsement does not affect the manner in which the instrument may be negotiated.
An enormous number of notes bear blank indorsements. That makes it easy to hand them off without cumbersome paper trails. Thus, whoever holds the note can enforce it, whether or not the holder owns beneficial interest in it. So, try answering this question:
If the most recent indorser of your note indorsed your note in blank, why would you care who owns it?
I suppose you realize that you should not care because the note holder, regardless of identity, will foreclose and take the house if you breach the note.
Who May Enforce the Note, Even if Lost, Stolen, or Destroyed
“Person entitled to enforce” an instrument means (i) the holder of the instrument, (ii) a nonholder in possession of the instrument who has the rights of a holder, or (iii) a person not in possession of the instrument who is entitled to enforce the instrument pursuant to Section 3-309 or 3-418(d). A person may be a person entitled to enforce the instrument even though the person is not the owner of the instrument or is in wrongful possession of the instrument.
3-309. ENFORCEMENT OF LOST, DESTROYED, OR STOLEN INSTRUMENT.
(a) A person not in possession of an instrument is entitled to enforce the instrument if:
(1) the person seeking to enforce the instrument
(A) was entitled to enforce it the instrument when loss of possession occurred, or
(B) has directly or indirectly acquired ownership of the instrument from a person who was entitled to enforce the instrument when loss of possession occurred;
(2) the loss of possession was not the result of a transfer by the person or a lawful seizure; and
(3) the person cannot reasonably obtain possession of the instrument because the instrument was destroyed, its whereabouts cannot be determined, or it is in the wrongful possession of an unknown person or a person that cannot be found or is not amenable to service of process.
(b) A person seeking enforcement of an instrument under subsection (a) must prove the terms of the instrument and the person’s right to enforce the instrument. If that proof is made, Section 3-308applies to the case as if the person seeking enforcement had produced the instrument. The court may not enter judgment in favor of the person seeking enforcement unless it finds that the person required to pay the instrument is adequately protected against loss that might occur by reason of a claim by another person to enforce the instrument. Adequate protection may be provided by any reasonable means.
In view of these laws, the Trustees and Courts do not require the PETE to present the original note in order to foreclose. Some states, like Florida, which require the original and will not admit into evidence a copy of a negotiable instrument, provide a law allowing a creditor to reestablish a lost, stolen, or destroyed instrument, and thereby effectively to create a new, legal “original.” See Florida Statutes, Chapter 71, http://goo.gl/hrB9bY.
So, answer these questions:
Can a creditor foreclose a lost, stolen, or destroyed note on which you defaulted?
Can a PETE who does not have creditor status foreclose a note in default?
I hope you answered YES to those two questions. If so, you have by now begun to realize that only two questions have salient importance in your mortgage:
Did you breach the note?
Does the note lack validity?
If you answer yes to the first question, then you know that the PETE can enforce the note by foreclosing and forcing a sale of the collateral property – your house.
The ONLY Reliable Basis for Battling the Creditor and Associates
If you answered yes to the second question, then you might have an opportunity to undo the foreclosure and wind up with the house free and clear, or with a loan modified to your advantage, or setoffs from your debt, or compensatory and punitive damages awards. You may sue for injuries that made the note invalid, whether or not you face foreclosure.
You may NOT sue until you have complied with § 20 of your loan security instrument, which provides the following delightful text:
Neither Borrower nor Lender may commence, join, or be joined to any judicial action (as either an individual litigant or the member of a class) that arises from the other party’s actions pursuant to this Security Instrument or that alleges that the other party has breached any provision of, or any duty owed by reason of, this Security Instrument, until such Borrower or Lender has notified the other party (with such notice given in compliance with the requirements of Section 15) of such alleged breach and afforded the other party hereto a reasonable period after the giving of such notice to take corrective action. If Applicable Law provides a time period which must elapse before certain action can be taken, that time period will be deemed to be reasonable for purposes of this paragraph. The notice of acceleration and opportunity to cure given to Borrower pursuant to Section 22 and the notice of acceleration given to Borrower pursuant to Section 18 shall be deemed to satisfy the notice and opportunity to take corrective action provisions of this Section 20.
You can find applicable law (RESPA – Real Estate Settlement Procedures Act – 12 U.S.C. 2601 et seq.) and Regulations (Regulation X – 12 C.F.R. 1024 et seq.) at the below web sites, but take note that I have provided links to the latest at this point in time, and you might need to refer to earlier years based on your situation:
Take note of (carefully read) 12 U.S.C. 2605 and 12 C.F.R. 1024.35 at the above links, for these tell you the duties of the servicer to notify you of changes of the servicer, and explain what questions the servicer must answer for you, what questions the servicer may ignore, and what corrective actions the servicer must take.
So, you see, if you know the note lacks validity in some respect because the lender, servicer, title company, mortgage broker, appraiser, realtor, or some attorney or other third party injured you at the inception of the loan, you can ask for a settlement from, or sue the injurious party. You start by bringing the injuries to the attention of the servicer.
Now you face a gnawing question that you absolutely must answer:
How do you find out whether the note lacks validity?
Why Mortgage Borrowers Need a Professional Mortgage Examination
Obviously, YOU should examine all the documents related to your loan transaction for evidence of fraud, regulatory breaches, contract breaches, legal errors, and flim-flams. You might find all kinds of causes of action (reasons to sue) that entitle you to challenge the validity of the loan in court and get the court to compensate you for your injuries.
To examine your loan transaction and related issues comprehensively and comprehensively, you will need a good working knowledge of tort law, contract law, mortgage finance law, real estate law, criminal law, bankruptcy law, foreclosure law, consumer credit law, and federal and state regulations law dealing with mortgages, lending, disclosures, credit reporting, debt collection, equal opportunity, etc.
That brings us to the toughest question of all:
Do you have the requisite knowledge and skill to perform a comprehensive, professional examination of your loan transaction and any related court actions?
Frankly, I guess most home loan borrowers do not have a clue how to do that. So naturally, you will want an answer to this question:
Who has such competence and experience to perform a comprehensive mortgage loan transaction examination?
This article focuses on an entirely different issue. It deals with why you do not need a securitization audit and how to get the putative benefits of such an audit FREE. So, I shall address the answer to the above question briefly at the end of the article.
But, I do guarantee you right now that NO securitization auditor or so-called forensic loan auditor, and only the rarest of attorneys, has the remotest capability of doing such an examination correctly without wasting your money.
How to Discover Who Owns Your Mortgage Note: Ask the Servicer
So let us get on with this final question:
How do I find out who owns the note?
How to Avoid Paying the Wrong Party
Most people worry about who owns the note because they do not want to pay the wrong person and then face an accusation of breaching the note through non-payment. Some simply want to mount a challenge against foreclosure, thinking that if the wrong person forecloses, that will justify asking the court to dismiss the case or stop the foreclosure.
Suppose you do not know who owns the note and you fear that the wrong person will receive your mortgage payments. That could open you to an accusation by the real creditor that you breached the note through non-payment. The courts provide a means for ensuring that your payment goes to the right party: the Interpleader Action.
Your loan security instrument identifies whom to pay. If you ever doubt whom to pay, you can file the interpleader action to remove doubt and comply with the terms of your loan. The court will assign someone to take your money and pay it to the correct party.
Federal Law Helps You Find the Owner of the Note
As to how to find out who owns the note, federal law requires the creditor and servicer to notify you of any change in creditor or servicer timely so you do not pay the wrong party. Read the law for yourself, here:
A servicer of a consumer obligation arising from a consumer credit transaction shall not be treated as an assignee of such obligation for purposes of this section unless the servicer is or was the owner of the obligation.
(2) Servicer not treated as owner on basis of assignment for administrative convenience
A servicer of a consumer obligation arising from a consumer credit transaction shall not be treated as the owner of the obligation for purposes of this section on the basis of an assignment of the obligation from the creditor or another assignee to the servicer solely for the administrative convenience of the servicer in servicing the obligation. Upon written request by the obligor, the servicer shall provide the obligor, to the best knowledge of the servicer, with the name, address, and telephone number of the owner of the obligation or the master servicer of the obligation.
Federal law also requires the servicer and creditor to notify the borrower of any change in the servicer or creditor.
See, 15 U.S.C. 1641(g)
(g) Notice of new creditor
(1) In general
In addition to other disclosures required by this subchapter, not later than 30 days after the date on which a mortgage loan is sold or otherwise transferred or assigned to a third party, the creditor that is the new owner or assignee of the debt shall notify the borrower in writing of such transfer, including—
(A) the identity, address, telephone number of the new creditor;
(B) the date of transfer;
(C) how to reach an agent or party having authority to act on behalf of the new creditor;
(D) the location of the place where transfer of ownership of the debt is recorded; and
(E) any other relevant information regarding the new creditor.
As used in this subsection, the term “mortgage loan” means any consumer credit transaction that is secured by the principal dwelling of a consumer.
Thus, the borrower should always have timely notice in order to pay the right party and to know whether the right party has made any effort to foreclose a defaulted loan.
If in doubt the borrower need only call or write to ask the servicer. The servicer must give the borrower the identity and contact information for the creditor, and the details regarding escrow for insurance and property tax, and other information regarding servicing the loan.
Get Help from the Consumer Financial Protection Bureau
If the servicer plays dumb or either the servicer or creditor fail to inform the borrower, then the borrower may seek enforcement assistance from the CFPB. As I mentioned above, you can file a complaint via the web site:
As to punishing servicer recalcitrance, federal law provides borrowers with a private right of action against the creditor and/or servicer as appropriate. The court can order the defendants to pay the borrower up to $4000, plus any actual damage, plus legal fees and costs of the action. The court can force the defendants to give the proper information to the borrower.
See, 15 U.S.C. 1640(a)
§1640. Civil liability
(a) Individual or class action for damages; amount of award; factors determining amount of award
Except as otherwise provided in this section, any creditor who fails to comply with any requirement imposed under this part, including any requirement under section 1635 of this title, subsection (f) or (g) of section 1641 of this title, or part D or E of this subchapter with respect to any person is liable to such person in an amount equal to the sum of—
(1) any actual damage sustained by such person as a result of the failure;
(2)(A)(i) in the case of an individual action twice the amount of any finance charge in connection with the transaction, (ii) in the case of an individual action relating to a consumer lease under part E of this subchapter, 25 per centum of the total amount of monthly payments under the lease, except that the liability under this subparagraph shall not be less than $200 nor greater than $2,000, (iii) in the case of an individual action relating to an open end consumer credit plan that is not secured by real property or a dwelling, twice the amount of any finance charge in connection with the transaction, with a minimum of $500 and a maximum of $5,000, or such higher amount as may be appropriate in the case of an established pattern or practice of such failures; 1 or (iv) in the case of an individual action relating to a credit transaction not under an open end credit plan that is secured by real property or a dwelling, not less than $400 or greater than $4,000; or
(B) in the case of a class action, such amount as the court may allow, except that as to each member of the class no minimum recovery shall be applicable, and the total recovery under this subparagraph in any class action or series of class actions arising out of the same failure to comply by the same creditor shall not be more than the lesser of $1,000,000 or 1 per centum of the net worth of the creditor;
(3) in the case of any successful action to enforce the foregoing liability or in any action in which a person is determined to have a right of rescission under section 1635 or 1638(e)(7) of this title, the costs of the action, together with a reasonable attorney’s fee as determined by the court; and
(4) in the case of a failure to comply with any requirement under section 1639 of this title, paragraph (1) or (2) of section 1639b(c) of this title, or section 1639c(a) of this title, an amount equal to the sum of all finance charges and fees paid by the consumer, unless the creditor demonstrates that the failure to comply is not material…
Please read the full Civil Liability law at the below link. I have only provided the part important to this discussion.
You can satisfy your curiosity about the PSA and other documents related to your loan, such as the bank’s 424(b)(5) prospectus form filing. You need only dig around in Edgar at the Securities and Exchange Commission’s web site here:
Thus, You Need NO Securitization Audit to Receive its Alleged Benefits
As you can see, I have just saved you the cost of a securitization audit. I have given you the main benefit of it, knowledge of how to discover the identity of the creditor, the person who owns beneficial interest in the note, and I have shown your entitlement to get the court to award damages to you for a failure to give that information. And I gave you all that ABSOLUTELY FREE.
Now you know also that you do not need to pay some scalawag huckster of a securitization auditor to find out who owns your note. Most of the time the so-called auditor gives clients a bunch of useless information like a copy of the PSA, but fails to tell you who owns the note. Why? Because creditors indorsed most securitized notes in blank and most notes have become securitized.
If in doubt, check the Fannie Mae or Freddie Mac web site and enter your loan number, for they own many if not most of the mortgage notes.
If still in doubt, pick up the phone. Call the servicer, and ask, “Who owns my note?” If you get the bum’s rush, try it in writing, then contact the CFPB, and complain. If that does not work, SUE.
But under NO CIRCUMSTANCES should you bother with a securitization audit. It will only waste your money and your time, and give you zero benefit.
Yes, I know I titled the article to make it seem like securitization audits provide benefits you can get free. Well I gave you FREE those benefits that a securitization auditor fools victims into thinking they will get for a big fat fee, but which the victims do not get at all.
If you already made the ill-informed mistake of paying a securitization auditor for that useless audit, I suggest that you demand a full refund and report that scalawag to the State Attorney General. Why? Because those crooked “auditors” know they sell useless junk.
Save Your Money for a Professional Mortgage Examination
Besides, you will need all that money to pay a competent, professional mortgage transaction examiner to examine your transaction documents. That will reveal injuries you have suffered. And when you show the injuries to the servicer, the injurious parties, the CFPB, and the court, you thereby give yourself the ONLY opportunity of pressing your adversary into a settlement or of obtaining a damage award judgment from the court.
Yes, I know the ONLY such examination firm in the USA, the only one I can confidently recommend.
If you have a mortgage and you want help with it, familiarize yourself with the articles and concepts at the Mortgage Attack web site here:
Congress intended the right of rescission to protect the consumer from putting the family home at risk by using the home or the equity in it to secure a loan. It doesn’t apply in mortgage loans for the purpose of PURCHASING the house. The TILA right of rescission doesn’t protect the home purchaser; it protects the borrower who has the home or equity in it.When looking at laws, read the whole area of a topic to find the definitions and rules of construction, like this one:
15 U.S. Code § 1602 – Definitions and rules of construction
(x)The term “residential mortgage transaction” means a transaction in which a mortgage, deed of trust, purchase money security interest arising under an installment sales contract, or equivalent consensual security interest is created or retained against the consumer’s dwelling to finance the acquisition or initial construction of such dwelling.
The lender, upon receiving a rescission notice may either accept the rescission or dispute it. If accepted the lender must return all payments and terminate its security interest. The borrower then must tender the loan proceeds to the lender. Should the lender wish to contest the rescission notice, it should send a letter so stating to the borrower. Then either the lender or the borrower may file a declaratory judgment action to determine whether the notice was valid.
Warning, if the borrower files a lawsuit, there is a filing fee and there is an obligation by the borrower to certify that they are making a pleading in good faith and upon a reasonable investigation. That should weed out a lot of truly frivolous claims. Without that mechanism in place, anyone can send a letter and assert a rescission demand, but if they do, they will be sanctioned.
In the case of the borrower defaulting, the lender might file a foreclosure action or initiate nonjudicial foreclosure proceedings as appropriate. The borrower would then assert rescission as an affirmative defense to foreclosure or in a declaratory judgment action to halt a nonjudicial sale.
Remember, courts have the discretion to not only determine whether there is a proper basis for a rescission notice but also to reorder the creditor’s and debtor’s obligations in the event rescission was proper. Even if the rescission notice is well founded, a court can still require the borrower to show an ability to tender before forcing the lender to return funds and void a security interest.
Charlatans and Bozos in the foreclosure pretense defense industry have made grand pronouncements about how many lawsuits borrowers will file for rescission or injury resulting from having a rescission effort denied. Frankly, I have no idea how many borrowers gave the lender a TIMELY TILA rescission notice. But it makes no sense for the majority of borrowers over the past 7 or 8 years because many bought at the peak of the market, and 3 years later they had underwater loans because of the collapse of house values generally. How could they pay that back? Well, the arithmetic would allow subtraction Borrower Repayment minus Lender Repayment. That might yield a sufficiently low amount for the borrower to sell the house in order to raise the money for repaying the lender. But, in many cases, borrowers would still fall short, and they could not repay the lender, so the court would not order a rescission.
Yes, a few rescission lawsuits will come up, but not that many. The Foreclosure pretender defenders will gladly take those borrower’s money for filing the action.
Here’s Proof that A Talented Attorney Can Beat the Stuffing out of a Crooked Mortgage Lender
Okay to distribute this freely.
THE BEAUTY OF BROWN V QUICKEN LOANS
The outcome of the Brown v Quicken Loans case gives hope to all mortgage victims and should embarrass all Foreclosure Pretense Defense Attorneys. This compilation shows the public and the legal community HOW TO BEAT THE ABUSIVE MORTGAGE LENDER and obtain a nearly $5 million judgment. I challenge every Mortgagor to READ the above-linked document COMPLETELY.
Hats off to Jim Bordas and Jason Causey of Bordas & Bordas Law firm, Wheeling WV, for engineering the defeat of Quicken Loans and using the LAW to bludgeon them into submission. I expect the final opinion in Quicken’s second appeal from the WV Supreme Court soon.
THE KEY TO WINNING – ATTACK THE MORTGAGE, NOT THE FORECLOSURE.
How did the Bordas team win? They examined the mortgage and discovered a horror story of criminal and civil abuses by lender Quicken Loans. Quicken made the loan so toxic they couldn’t sell or securitize it.
Quicken refused to offer Brown a reasonable settlement, so Bordas sued, and won a whopping $2+ million judgment. Quicken appealed, the Supreme Court of WV remanded, the trial court upped the judgment to nearly $5 million. Quicken appealed again, and the Supreme Court of WV will soon end the case with a final opinion against Quicken.
What lesson shall we learn from this? Just this… If you face foreclosure, you need a comprehensive mortgage examination to prove the causes of action against the lender, and you need a lawyer willing and able to attack the mortgage, not merely defend against the foreclosure.
If your lawyer won’t seek and find the causes of action underlying your mortgage and then attack the lender on that basis, you need to FIRE that attorney. Don’t rest until you have found a competent litigator like Jim Bordas.
LEGAL MALPRACTICE LAWSUIT OPPORTUNITIES FOR FORECLOSURE VICTIMS
If you have already lost your home to foreclosure AND you had a lawyer helping you who FAILED to seek causes of action or to attack on that basis, you may have a valid legal malpractice claim against that attorney. Call me at 727 669 5511 to discuss your issues.
STEP-BY-STEP PLAN FOR COMING OUT AHEAD
In order to save your home from foreclosure, or become able to negotiate a cram-down of the loan balance (and other favorable terms), or to sue the lender for injuring you, you must do one thing first:
HIRE A COMPETENT MORTGAGE EXAMINER OR ATTORNEY to examine your mortgage and find all the causes of action.
Of course, a good mortgage examiner will charge you a fraction of what the lawyer will charge, IF you can find an examiner or lawyer with the requisite competence. Which worries me. Which is why I have gone to the trouble of writing this message.
Read http://MortgageAttack.com then call 727 669 5511 for more info. I know the only competent professional mortgage examiner in America.
What? You want to know steps 2 and 3? Okay, I’ll give you the other steps…
If the examination report reveals causes of action (torts, breaches, legal errors) against the lender or lender’s agents (title company, mortgage broker, appraiser, servicer)…
Notify the servicer and then attempt to negotiate a settlement. I suggest finding a “CLOSER” type of lawyer to negotiate for you. I suggest a “loan mod” type of settlement where the lender lowers the balance to the present market value, gives a favorable fixed interest rate, sets the term for 30 years, no prepayment penalty, assumable, no balloon, forgive arrears and legal fees/costs. If this fails…
Sue via complaint, counter complaint, cross complaint as necessary. I suggest hiring a COMPETENT lawyer (not a foreclosure pretender defender) for this purpose. If possible, find one to take your case on contingency. The lawyer will use the causes of action from the mortgage examination report to formulate the pleading.
Go to next step if you have no money or no causes of action.
DO NOT let your home go to foreclosure final judgment. If you do, it will haunt your credit record for 10 years AND (depending on your state) leave you owing a huge deficiency judgment when the auction does not bring enough money to discharge your debt. Instead, try to work with the lender to do one of these:
Short-Sale: Bank agrees that you may sell the house at a discounted price in order to end the foreclosure, and hand over all the proceeds from the sale to the bank. This imposes some work and stress on you, but if you have equity in the house (it has higher resale value than you owe on the mortgage note), this should be your first choice
Keys-for-Cash: Bank pays you cash ($2,000 to $20,000, depending on the value of the home) to move out, leave the home broom clean, and deed the property to the bank. This can save a huge litigation cost for the bank, and make leaving the property less stressful for you. Sometimes a mortgage examination can reveal weak causes of action that can pressure the bank to give you a Keys-for-Cash deal.
Deed-in-Lieu-of-Foreclosure: Same as Keys-for-Cash, except the bank gives you no cash.
TAKE THE RIGHT ACTION – CONTACT ME NOW
Okay, I have given you the proof that you can beat your abusive lender, and I have shown you the strategic plan for doing so. If you simply refuse to do what I have outlined above, then you really deserve to lose your home to foreclosure, or to make underwater loan payments. But if you feel READY TO ACT SENSIBLY, contact me immediately for help.
And if you don’t need help, SOMEBODY you know DOES. Pass on this message and encourage your friends, associates, family members, loved ones to call me or write me for help. And send them to http://MortgageAttack.com for an education on the issues.
No, I have no authorization to practice law or give legal advice, so I refrain from both. But I’ll discuss the academic and strategic business aspects of your situation as necessary.
Yes, if you fit into the category of “Foreclosure Pretender Defender,” you can contact me too, and I’ll help you the best I can. Believe it or not, training for kool-aid drinkers like you has become available. Sorry, no CLE credits.
AND… I don’t charge money for giving business guidance. So, what do you have to lose? Give me a call. 727 669 5511
Whether or not a person can afford an attorney, it makes good sense to know the law, rules, regulations related to the case, and to know how and where to find case law. OBVIOUSLY, you should go to a law library or consult an attorney if you can find a competent one willing to fight for you and with some kind of proven track record.
It also makes sense to have a subscription to prepaid legal service like Legal Shield so you can talk to a lawyer inexpensively about your rights and options.
Unfortunately I have learned better than to trust an attorney to develop a sound strategy or to manage a case efficiently or to advocate my cause aggressively. In the end YOU are responsible for winning or losing your case, and YOU suffer (the lawyer doesn’t) if you lose your case. So, you need to keep your “thumb on the pulse” of the case at all times, to keep the lawyer “honest” so to speak, particularly if you have had the sad misfortune of hiring a foreclosure pretender defender (don’t make me name names).
In order to remain aware and capable, you need to learn the law and become disposed to using it. And you should learn about litigation practice – rules of procedure and evidence. I have collected some links to federal and Florida laws, and legal research sites. Enjoy.
Equity skimming on HUD property or VA loan property a Federal Crime – 12 USC 1709-2
12 USC 1709-2
Whoever, with intent to defraud, willfully engages in a pattern or practice of—
(1)purchasing one- to four-family dwellings (including condominiums and cooperatives) which are subject to a loan in default at time of purchase or in default within one year subsequent to the purchase and the loan is secured by a mortgage or deed of trust insured or held by the Secretary of Housing and Urban Development or guaranteed by the Department of Veterans Affairs, or the loan is made by the Department of Veterans Affairs,
(2)failing to make payments under the mortgage or deed of trust as the payments become due, regardless of whether the purchaser is obligated on the loan, and
(3)applying or authorizing the application of rents from such dwellings for his own use,
shall be fined not more than $250,000 or imprisoned not more than 5 years, or both. This section shall apply to a purchaser of such a dwelling, or a beneficial owner under any business organization or trust purchasing such dwelling, or to an officer, director, or agent of any such purchaser. Nothing in this section shall apply to the purchaser of only one such dwelling.