Discovery in Foreclosure Actions

Discovery is more complex than lay people realize. There is a lot of work that goes on behind the scenes in court. Our paralegal, Connie Lasco, saw the problems and forwarded the request for service to me for comment.

Here is an example of my comments to one homeowner who is defending her home pro se. She is asking us to do a motion to compel — based upon her filing of a request for production.

We do provide those services. But there were certain prerequisites that were unknown to her. My response should assist lawyers and pro se litigants in considering the discovery demands and the the usual “answers” from the banks and servicers.

Let us help you plan your discovery requests and defense narrative:

954-451-1230 or 202-838-6345. Ask for a Consult.

Purchase now Neil Garfield’s Mastering Discovery and Evidence in Foreclosure Defense webinar including 3.5 hours of lecture, questions and answers, plus course materials that include PowerPoint Presentations. Presenters: Attorney and Expert Neil Garfield, Forensic Auditor Dan Edstrom, Attorney Charles Marshall and and Private Investigator Bill Paatalo. The webinar and materials are all downloadable.

Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230 or 202-838-6345. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

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Discovery is a process by which one party can ask the other anything related to the case. Anything that might lead to the discovery of admissible evidence is allowed to be asked or demanded. If you don’t get it, you can ask the court to compel the answer or production. If you still don’t get it, you can ask the court for sanctions that might include striking the pleadings of the opposing side. BEWARE: Trial orders often contain discovery cutoff dates and instructions on how to preserve objections, or else they are waived.

Hawaii is one of the many jurisdictions that require “meet and confer” before allowing a motion to compel to be heard.  that means that the proponent of the discovery requests calls the opposing attorney and schedules a telephone conference in which the parties meet and confer regarding objections that were raised and answers that were insufficient.

I always recommend that a careful and complete Journal be started and maintained with respect to all contact with opposing counsel. You may need assistance from us in reviewing your demand for discovery, reviewing the response, and suggesting the specific questions you will ask of opposing counsel. You should also have an understanding as to why you are saying that response was inadequate or the objection  was inappropriate. You should treat the “meet and confer” as having the same priority as a prospective hearing on a motion to compel.
The usual procedure in discovery is as follows:
  1.  Initial discovery should basically track the pleadings. In a judicial state that means seeking discovery that allegedly supports the allegations in the foreclosure complaint and seeking discovery that supports the denials and affirmative defenses (and possibly counterclaim). In a nonjudicial (“Power of Sale”) state it means the same thing but in reverse — the complaint in those states is filed by the homeowner instead of the bank and it is the bank that serves answers and affirmative defenses to the claim of the homeowner, as alleged in the complaint.
  2. Initially a package of discovery is served upon the opposing party.
  3.  This includes interrogatories, requests for production, and requests for admission.
  4.  You have only served a request for production
  5.   Interrogatories and requests for admission generally ask for responses as to factual events and possibly legal “contention.”
  6.  The request for production should generally track the interrogatories and requests for admission. In most foreclosure cases the responses on all three discovery tools are generally inconsistent with one another. This is a double-edged sword. Opposing counsel and the client seeking foreclosure will intentionally provide inconsistent answers in order to obfuscate the real answers. But the homeowner can use the inconsistent answers as the basis for a motion to compel.
  7.  A motion to compel responses to a request for production without including interrogatories and requests for admission opens the door for arguments from opposing counsel that might otherwise be closed.
  8.  It is extremely important and often overlooked that the homeowner and propounding discovery demands uses language that could be interpreted as an admission against interest. This is why I have repeatedly recommended that all discovery demands be carefully reviewed. As one example, homeowner should avoid assuming that any document, assertion or allegation from the foreclosing party  is authentic, valid or true. It is better to say “transaction” then to refer to a “mortgage” or “loan” or “note.”

14 Responses

  1. Roger, you’re right. Three endorsements. A->B->C->D. Each recorded as a “true sale”, “bankruptcy remote” transaction. Though, appears MERS intended to short-circuit that. Still, the note itself should have the endorsements.

  2. The law merchant is just another legalized money fraud; however, it is supposed to be a geometrically perfect system as set out in Bills of Exchange and Promissory Notes rules and UCC;

    However, the banksters have greyed the lines with hypothecation of debt; and, have confused the public between money of account and money of exchange; do not even bother going down that rabbit hole;

    Its all null and void; its time to end the Fed as Ron Paul says; its time for a Debt Jubilee as Lyndon La Rouche says; and, for the banksters to give back the stolen homes, cars and trade names;

    Maxim – He who is once criminal is presumed to be always criminal in the same kind or way.

    Its time to develop alternatives to the western Anglo-Zionist Ponzi scheme; its time for a Truth & Reconciliation Commission by, for and of the people; in peace

  3. There should actually be three endorsements on the note: originator to seller (depositor), seller to sponsor, sponsor to trustee. I think I have that right. Then off to the custodian. It’s all in the PSA. When Wells originated or aggregated, they endorsed, transferred, and recorded nothing. Everything held in Des Moines. Same for anything with MERS on it. Very few mortgage transfers recorded: that would have precluded placing those mortgages in multiple trusts.
    The argument is “negotiation for value” and “valid transfer’” with “proof of consideration” under UCC 309.§ 3-303 Value and consideration.
    (a) An instrument is issued or transferred for value if:
    (1) The instrument is issued or transferred for a promise of performance, to the extent the promise has been performed;
    (2) The transferee acquires a security interest or other lien in the instrument other than a lien obtained by judicial proceeding;
    (3) The instrument is issued or transferred as payment of, or as security for, an antecedent claim against any person, whether or not the claim is due;
    (4) The instrument is issued or transferred in exchange for a negotiable instrument; or
    (5) The instrument is issued or transferred in exchange for the incurring of an irrevocable obligation to a third party by the person taking the instrument.
    (b) ”Consideration” means any consideration sufficient to support a simple contract. The drawer or maker of an instrument has a defense if the instrument is issued without consideration. If an instrument is issued for a promise of performance, the issuer has a defense to the extent performance of the promise is due and the promise has not been performed. If an instrument is issued for value as stated in subsection (a), the instrument is also issued for consideration.
    5A Del. C. 1953, § 3-303; 55 Del. Laws, c. 349; 70 Del. Laws, c. 86, § 3.;

  4. I think I would still contend that the note needs to be endorsed to plaintiff before being enforced, not blank, even if it were blank when it arrived. Same with a blank endorsed check, it wouldn’t be deposited blank, it’d be filled out with something, like my name. Any bank takes those every day.

  5. WileyC,

    A blank endorsed promissory note is no different than a blank endorsed check. You try to cash or deposit a blank endorsed check at any depository bank or credit union; it’s considered a third party check and would require the presence of the original assignee to confirm the transfer. Such should be the same in litigation; the court should force, at your insistence, the original lender to be enjoined as a party to the action. For that matter, MERS should be enjoined in the event the mortgage is a Fannie/Freddie standard form, as it should be identified in that mortgage as nominee for lender and lender’s successors and/or assigns, which would make MERS nominee, or agent for the assignee, even after transfer. Good luck finding an attorney who isn’t totally clueless about these observations.

  6. btw, R, not yet sure I agree with you. While at not IS indeed ‘negotiable’, it is made out to a specific entity, and MUST be negotiated to another party via assignment, delivery, et al. When a note it endorsed in blank, it’s like cash for whomever happens to be holding it at any given time, intended or not. That’s not negotiation.

  7. Thanks for that R, new question….
    How is it courts here are allowing an First Amended Petition to be filed that resets the ‘initial’ date of filing such that a lately-endorsed note provides standing ‘from inception’. Seems to me, plaintiff just achieved standing 6 years after the original filing.

  8. Wylie Coyote, the note is negotiable as soon as you sign it. It’s like a check. You’re the maker. My loan was funded with a phony cashier check from Deutsche Bank. The notes made payable to Wells Fargo. As Neil says the note does not memorialize the transaction that took place. It isn’t so much the endorsement, it’s that the judges accept a copy of the note with a late endorsement and say that’s all they need to prove transfer! There has to be transfer with consideration. The discovery has to go to the consideration pledged four the transfer or the assignment of the mortgage. These are the answers that will not be given in Discovery. If you get a judge to Grant your Discovery they’ll fold up like a paper bag. Then you walk away with money and no case law in your favor or anyone else’s.

  9. All of our Discovery requests were met with a motion for protective order. We originally requested deposition testimony from the attorneys involved in the first foreclosure action. Judge wasn’t going anywhere near that one. We have a motion in front of the judge actually 3, regarding a protective order, a decision on whether or not the amended pleading was accepted, and more tailored Discovery to be ruled upon. Opposing counsel relies on Bankruptcy Court judgements that have nothing to do with defending the title in State Court. Relying on a vacated default foreclosure judgment as well. After those motions are argued were staring at summary judgment. Can’t wait!

  10. When does a note become a “negotiable instrument”? I’d suggest it when the endorsement is applied. If following the money, the endorsement should be paired with a financial transaction, consideration, paid from the endorser to the endorsee, same date. Since endorsements typically are not dated, any receipt they may come up with showing consideration would establish the date of endorsement, perhaps. Just a thought.

    However, I was wondering if it could be construed that it a breech of fiscal responsibility on the part of the Originator to blank-endorse a note to whomever the wind sends it to. The note states “and Lenders’ successors and assignees”, not just anyone. It shows intent, not surrender.

  11. Great comments for Compel motions. We have full sets as well to propound if anyone needs help at low pricing [vs. law firm] and have cheat sheets if you want to take depositions of persons most knowledgeable. Call Sara at Consumer Rights Defenders 818.453.3585.

  12. Reblogged this on California freelance paralegal and commented:
    California law also requires a meet and confer effort before filing any motion to compel further responses to discovery requests.

  13. Great list, thank you for sharing!

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