Tonight! How to Plead and Prove Fraud By the Banks

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Fraud can be a very effective claim or defense. But it is not an easy claim. Fraud must be both pled and proven clearly and convincingly. Some view the burden of pleading and proof as unfair when compared to a claim for foreclosure which has a burden of proof that requires only that it is more likely than not that the claimant is real and has a real claim entitling the claimant to a remedy. That is a philosophical argument.

If fraud is used as a defense the damages are limited to the amount of the foreclosure claim. If it is used as a counterclaim or in a separate lawsuit then the statute of limitations is probably going to be an issue because the fraud most likely occurred many years before.

But the counter arguments to application of the statute of limitations are active concealment of the truth and continued misrepresentation, and then maturation of the claim which might not accrue until the foreclosure is decided against the borrower. I think the only valid argument is active concealment. But depending upon which state you are in the statute of limitations may not be applicable if fraud is alleged as an affirmative defense in recoupment.

The pleading and proof requirements for fraud in all circumstances are very rigorous. Knowing now to plead and wording the complaint or defense properly is essential to getting fraud on the table in litigation which by the way opens the door to discovery that might not otherwise be allowed if you are merely defending the foreclosure on other grounds. That said, a successful action for fraud has a high likelihood of achieving a significant verdict for compensatory and potentially punitive damages.

4 Responses

  1. Kali is absolutely correct on this. Need to acquire your evidence – Who what where etc.

    I have been saying for a long time that loan modifications, unless title is cleared, actually conceal the title problems.

    https://nypost.com/2019/04/18/wells-fargo-accused-of-misleading-homeowners-in-mortgage-crisis-aftermath/

  2. check your state’s Racketeering Statutes. Continuing bad acts by the players constitute recurring or new acts of fraud.

  3. Proving the claim is by way of EVIDENCE acquired, i.e., DISCOVERY predicated on the PLEADING(s).

  4. @ ALL

    SPECIFICALLY plead in detail WHO, WHAT, WHERE, WHEN, WHY, & HOW your state statutes mandate claims for fraud, deceit & misrepresentation — from inception to present.

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