see Legal Standing established Only in Reference to Delivery of Note or Rights to Note
This is perfect example of what I have been talking about. The article raises legal points that are entirely correct. But it begs the question — who actually owned the debt by virtue of having paid money for it? The authors ignore that point entirely just as the memorandums of law and motions to strike do when they are filed by attorneys for parties claiming the right to foreclose.
The point of the article is that the courts are using presumptions that do actually apply to infer that legal standing is present. And those presumptions are almost always sufficient to deny a motion to dismiss a foreclosure complaint or a motion for summary judgment filed by the borrower.
True legal standing requires that the claimant is suffering actual economic loss as a consequence of the borrower’s action or inaction. That loss is not real if they don’t own the debt by reason of having paid value for it. If they have not paid value for it, then they obviously suffer no financial loss resulting from nonpayment. Therefore there is no default that can be legally declared by the claimant or on behalf the claimant.
This requirement has been codified for hundreds of years and is now found in the statutes of all fifty states who have adopted the exact wording of Article 9 §203 of the Uniform Commercial Code (UCC). It is a condition precedent to filing a foreclosure that the claimant has acquired title to the debt by virtue of having paid value for it. It is also common law in every state that a transfer of the mortgage without an effective transfer of the debt is a legal nullity. You can’t own a mortgage if you don’t own the debt.
The borrowers lose cases because in the absence of rebutting the legal presumptions, the borrower has not met its burden of proof and the party claiming the right to foreclose has met its burden of proof through the use of legal presumptions which if unrebutted are as good as real facts. On the issue of standing that is the entire story.
Borrowers can meet their burden of proof contrary to the belief of many judges and lawyers. And meeting that burden means that they destroy the presumption of standing and thus require the party claiming the right to foreclose to actually prove their legal standing, instead of just relying on paperwork. In other words by forcing the issue of facts over legal fictions like legal presumptions.
Lawyers and pro se litigants often make a procedural mistake which dooms them to failure at this point. They mistakenly believe that by raising the issue of whether the party actually has legal standing that the burden shifts to the party claiming the right to foreclose. It doesn’t. The burden shifts when you have established that the presumption is rebutted.
The way you establish that the presumption is rebutted is by revealing that either (a) the party claiming foreclosure does not own the debt and never paid value for it or (b) raising an inference that the party claiming foreclosure does not own the debt pursuant to Article 9 §203 UCC as adopted as state law in all 50 states.
The way you reveal that the party claiming foreclosure does not presently own the debt by reason of having paid for it is by asking them about the transaction in which they paid value for the debt. If they reply that there was no such transaction then you have satisfied your burden, assuming you bring this to the attention of the court in the proper manner. At that point the case is over. Payment of value for the debt is a condition precedent to initiating foreclosure. Thus the borrower wins in that scenario but the problem of course is that scenario never plays out that way.
The way you raise the inference that the party claiming foreclosure does not own the debt and never paid for it is by conducting aggressive discovery in which the claimant will always dodge the question and return fire with some legal memorandum about presumptions. The court will often need to be reminded that the gravamen of the case is whether the claimant is actually the owner of the debt and not just the presumed owner of the debt.
By serving properly worded discovery demands and then following it up with well drafted and legally supported motions to compel, followed by motions for sanctions you can raise the inference that the claimant has not paid value for the debt, defeat the presumption to the contrary, and force the claimant to prove that it is the current owner of the debt by reason of having paid for it. And you might also get an order from the court granting your motion in limine that essentially says that since they refuse to give an answer as to payment for the debt or ownership of the debt, they will not be able to produce any evidence to the contrary at trial. If granted the case is over.
The banks want you to go down a rabbit hole looking for kinks in the documents. While I won’t say that challenging obvious defects in the documents is pointless, the case will only be won when you have established that the proper party with a real claim is not before the court.
Filed under: foreclosure |
Junior — well put. Bob G – like you, but Junior is correct. This is what we deal with. And we deal with it for a reason — the loans were never valid from origination. NEVER VALID.
Bogus filings. How do you deal? All we can do is demand ACCOUNTING of monies – prior to even origination. But courts are not cooperative. But we will get there.
Why? Because the truth is still there to be told. Truth is always told – no matter how long it takes. It will get there.
Thanks!!!!
Bob G–you ARE missing the point if you neglect to mention that in way too many cases the plaintiff is NOT a valid PETE…and you did neglect to mention that. You bring up the original lender—but in far too many of these cases to count the original lender is long gone before litigation occurs. My contention to you is that just because a party CLAIMS to be PETE, doesn’t make them PETE. In fact, in my case, multiple parties have claimed to be PETE and neither one of them actually was in truth. That’s why my own case has been going on for just shy of a decade.
In my case the current pretender actually admitted in pleadings that the note was lost by a prior supposed holder—mind you, they could not and did not provide any evidence to support that claim. But then, even on the same page as that admission, the most recent pretender stated that it is both owner and holder of the original note–their language, not mine–even though they admitted already to never seeing said original note, let alone possessing it. BTW, the original note, they now claim, was lost 8 years ago….they claim to have acquired that exact same original note 3 years ago. So, the note was—and still remains—lost to this day….but they claim to have physically come into possession of it 5 years AFTER it became lost…oh, and to this day, they do not have it and cannot produce it. They cannot produce anything showing that they acquired either the note or the right to enforce from a party that DID have standing. So before you pretend, Bob, that I don’t know what I am talking about, think again. I am a pro se, who has now been fighting this mess through two separate foreclosure lawsuits, since 2010. The first one was dismissed due to them never serving us. The second one was filed by the so-called original lender….and the moment we filed our counter claim against them, they sold it in a hurry. Then again, they were not lawfully able to sell it anyway because it was given fact that they had already sold it before—multiple times. This claimed sale marked the FIFTH time that they “sold” this note off to another party. But in all that time, they never claimed to buy it back from anyone. You do the math and then tell me again how I don’t know what I am talking about, thanks.
Do not confuse “owner” with “holder.”. Security investors are only entitled to pass-through of current cash flows. You may call them “beneficiary” “owners” of cash flows. They “hold” nothing. Title is not passed through to security investors — not the way it works. If security investors have a beef- they need to go to the security underwriter – not the borrower.
The “Holder” in securitization is the trustee to the trust. But, in actuality, for these “crisis” loan the trustee holds nothing. Even if they held the mortgage/note when the trust was active (which is doubtful because these were just default debts with charged off notes), the trustee’s role is just to “Hold” the documents for the benefit of current cash flow pass-through to security investors. Once, the loan is reported in default, the trustee holds nothing. The debt is swapped out by contracts — which are not securities.
All you have is your good old debt collector who hides behind the curtain under the false identity of the trustee to the trust. The trustee is gone.
There may a right to enforce the debt — but, that right has to validated and produced. THAT is not happening. Borrowers should have a right to negotiate with any debt collector who purchased collection rights for, likely, pennies on the dollar.
Courts needs to stop saying enforce the note. Note is gone. It is enforcement of a charged off debt that is all that is left. .
How do courts accept different versions of NOTES,, changing endorsements etc should b only defective dociment needed to expose the criminals
Exactly Junior anyone going along w banksters and not common sense and fairness law requires must have an agenda.
JUNIOR reread my post. I haven’t missed any boat. I’ve doing this for 9 years. I litigate against trusts, LPs, LLCs, and all kinds of critters. ya gotta have an original owner of the debt that can grant pete status to someone further down the food chain. that’s what i said. period.
Bob, you’re missing the point, seriously.
Yes, parties other than the owner can be PETE. Yes, it is true that the plaintiff does not need to be the actual owner/holder of the debt. HOWEVER, here’s where you come off the rails. NO ONE can have authority as PETE unless they either ARE the owner/holder, or they were granted legitimate authority by a party that IS the legit owner/holder. That’s where you’re missing the boat.
In other words, suppose you own a loan. I come along and claim to own it, without you being aware. I grant a POA to my neighbor Sam, and authorize him to represent my interests in the matter. Sam has ZERO lawful authority to do anything as PETE because he was NEVER authorized by the only party that can grant lawful authority–you, the actual owner.
Applied to foreclosure situation, for example, I am up against an entity that claims to be a trustee for a trust. That trustee claims to have a servicing agreement with a servicer, and that servicer is, despite not being named in the case, the actual client of the plaintiff’s attorney. The trustee is named as plaintiff, and plaintiff’s counsel only deals with the servicer. But wait—the trustee has no lawful authority to appoint anyone to service the loan in question, because that trustee has no lawful claim of either ownership or authority. Truth is, this one loan has been “sold” a half dozen times—all of those “sales” were done by the supposed original lender. The most recent “sale” occurred between that original lender and an LLC—a company, not a trust. Then, along comes US Bank Trust, in name only, claiming to have authority to act on this loan. Funny thing, I have written notice from that trustee that actually admits that they are not even aware of the loan in question, they have no involvement or even knowledge of foreclosure cases, and don’t even know if a given loan is in default or not.
So, even though you’re correct that PETE does not need to be the rightful owner, the only way that party can lawfully act is if they were granted such authority from the true rightful owner.
Anything else is fraud, pure and simple.
In my opinion, other than advice about employing aggressive discovery, the advice given in this post is not very good.
The “claimant” does not have to be the owner of the debt. The claimant only needs to have the right to enforce the debt. Somewhere along the chain of title the debt owner has to exist, but he doesn’t have to be the PETE. All the owner of the debt needs to do is to authorize someone to enforce the terms of the note. That could be a subsequent “holder” or one not a holder in possession of the note, such as someone to whom the note has been delivered without any indorsement for the purpose of enforcing the terms of the note.
As for motions to compel resulting in an order compelling disclosure, they are extraordinarily difficult to come by in NY. You have to prove that you have had serious and meaningful failed negotiations with the bank’s attys. But the statute specifying was is required is geared to attys dealing with other attys, who will continuously be dealing with each other on other cases. That’s not the case with foreclosures where it is bank atty vs. pro se litigant. They will just stonewall you until they can slip in a sum judg motion, and then it’s game over.