How Homeowners in Foreclosure Litigation Can Effectively Manage their Written Discovery

14 Monday Jul 2014

Posted by BNG in Discovery Strategies, Foreclosure Defense, Judicial States, Litigation Strategies, Non-Judicial States, Pro Se Litigation, Your Legal Rights

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As foreclosure litigation proceeds, each party is entitled to engage in a process of finding out what the opposing party’s claims consist of, the basis for those claims, and what proof or evidence that party has to support his or her position. This process is called “Discovery”.

This discovery may take several directions. Some forms of discovery are Written Interrogatories, Request for Admissions, Request for Production and Inspections of Documents, Request for Disclosure and subpoena duces tecum.

The “discovery” phase is a very important stage in your lawsuit. The outcome of your suit may be determined during this time of discovery. I take Discovery VERY seriously because it is time-sensitive and the attorney has serious responsibilities in this regard.

Clients can and probably will spend many hundreds and even many thousands of dollars in attorney’s fees during the Discovery period. Clients will spend an inordinate amount of time getting all of the documents and answers ready for inclusion in the Discovery. It is the client that has the documents and the answers, not the attorney. Sometimes, clients give responses to the attorney to try to avoid answering discovery properly. The Supreme Court of Texas has attempted to put a stop to this (except in a very limited number of situations) and this attorney does not do that, solely because it is the client that is harmed by the avoidance. Avoidance cost much more money in the long run and the courts will make you answer, most probably, in any event. Not only is it a serious expense in attorneys fees for your attorney to go to hearings to compel you to answer and for Rule 215 sanctions hearings, but the court can assess your opponent’s attorneys fees and costs against you for the avoidance. And, on top of that, a court can get a really bad impression of you than no client can erase. As to sanctions, the Court can take away you right to present evidence and causes of actions, dismiss your pleadings, and, with the “death penalty”, dismiss your case. So, this is very serious. I would never want you to go down this futile path.

No doubt it is a chore, tedious and time-consuming, but your efforts and your understanding of these Rules Regarding Your Written Discover Responses will save you money in the long run, and may keep you from losing your case or losing on some important point on a technicality. Many areas of family law are very technical. Under-standing of these Rules Regarding Your Written Discover Responses will help you appreciate what these various types of written discovery are. The types of discovery are:

(1) Written Interrogatories are questions you are asked and which you must answer under oath. They are limited in number by statute.

(2) Request for Admissions are basically statements or facts that an opposing party wants you to “admit”, but you may “deny” the statement, if the request is not true. If you don’t know (legitimately do not know) the answer, you can respond “I can neither admit or deny”. But, understand that there are always consequences for giving an answering discovery, if you ever change the response in the future. If you don’t timely answer, the admissions (statements) may be “deemed” admitted (taken as true). That, of course, can end your case.

Your responses to Discovery, whatever is required by the Discovery, must be filed with the other attorney, no later than thirty (30) days from the date the questions or requests themselves were received by your attorney. A draft of your answers or responses and all documents requested should be in your attorney’s office within a reasonable time frame in advance of their being sent to the other attorney. Fully abiding by the deadlines is essential, to allow your attorney a chance to digest your responses and discuss them with you, if necessary. Also, these responses sometimes take considerable time to assemble in proper form. So, don’t be lulled into thinking there is plenty of time for you to start preparing your answers or responses. Your attorney will need time to type, revise, review and timely file your answers or responses. Also, extensions require the other side that sent the Discovery to agree, or time and money must be spent to set and conduct a hearing on an extension of time, and those requests are not always granted by the court.

You must answer this Discovery completely and truthfully. If you don’t, you may be sanctioned (punished) by the Judge. As I have written above, this sanctioning could include striking part of your side of the lawsuit or a monetary fine, you and/or your witnesses may not be allowed to testify, you may not be able to bring out certain evidence at trial, or you may lose everything you wanted to accomplish in this lawsuit. Consequently, discovery must be taken very seriously and fully complied with in every way. Some discovery may request privileged materials or are otherwise legally improper questions. The privileged and/or confidential material does not need to be divulged or produced, but you and your attorney better be certain that the objection is legitimate, because, if it is not, and the other side files a motion to compel or a motion for sanctions, you may wind up having to pay attorney’s fees for delaying the process (attorney’s fees for the preparation and presentation of the motion) and costs. If the information is not privileged or protected by law under some other serious legal principle, then a written objection can be raised, BUT YOU STILL HAVE TO ANSWER. The answer might not be able to be used at trial or at any other time, until the Court rules on the specific objection(s).

If your answer was correct at the time, but circumstances later change, or you acquire additional information, or you unintentionally omitted an answer, you must supplement this information at least thirty (30) days prior to trial, and amend your previous answers. You must notify your attorney of any changes in any part of your answers immediately. Failure to supplement thirty (30) days prior to trial can result in undesirable consequences. For example, if you fail to identify a witness, in response to an interrogatory, that witness may not be permitted to testify.

If you need to add names of any witnesses, notify your attorney immediately upon your own knowledge of such.

Whether you want to deny requests or not answer them or produce documents, YOU MUST ANSWER THEM AND PRODUCE THE REQUESTED DOCUMENTS in a timely fashion to your attorney. There may be valid objections to the production or the answers, but, TODAY, you must answer and produce and make an objection (unless it is privileged) and then, both sides wait to get a ruling at trial on the objection. YOU CANNOT AVOID ANYMORE. Your answers and production are still due in 30 days. When appropriate, your attorney will file objections at the same time your answers or responses are filed with the opposing counsel.

(3) Request for Production of Documents and/or Subpoena Duces Tecum (used at depositions and trial)

Both a request for production and a subpoena duces tecum require you to gather and turn over to your attorney and then to the other side, certain relevant, requested documents (or other tangible things such as photographs, school records, tax returns, financial account information, letters, diaries, etc.). Most definitions of the term “documents” are a full, single-spaced page long or more, so very few things don’t fall within the matters to be produced. Then, there must be the original copy (sent to the requestor), a copy for your attorney, a copy to be used in evidence, and you should probably have a copy. Can anyone legitimately wonder why the simplest case can become voluminous in no time? You can copy this mountain of evidence yourself and possibly save some on the reproduction fees and attorney’s fees, also.

These two methods of discovery differ however, in the time allowed for response. The Request for Production has a thirty (30) day deadline for you, through your attorney, to turn over or make available for inspection, the documents or tangible things requested.

The Subpoena Duces Tecum normally has a shorter time frame, requiring you to bring with you to a hearing, trial or deposition, set at a time and certain date, the requested (subpoenaed) documents or other tangible things. These can also be Instanter, which means IMMEDIATELY.

You should bring these things to your attorney in advance of their due date for review and perhaps to protect your legal rights, if possible.

The documents you gather in response to the Request for Production are due in your attorney’s office by the deadline he gives you, which is usually at least a week before they are due at the other side’s office.

You are not required to produce any document or other tangible thing unless it is in your possession, custody or control. This means that you may not have actual possession of something, but as long as you have a superior right to make someone else produce it for you or to you, then the law says you have “possession” of the requested item and must produce it, or at least use your best efforts to produce it.

Sometimes your attorney may choose to provide the other side with the necessary consent form to obtain the requested records (and they incur the expense) from third parties.

If you do not do Discovery properly, my contract with you allows me to withdraw from you as your attorney. I will do that.

If after you make your initial response and you have additional materials that become available (example: new monthly bank statements, or something you overlooked or could not locate before), you must notify your attorney and take them to his/her office at once.

COST SAVINGS SUGGESTIONS

You may substantial save attorney’s fees and costs, if you follow certain suggestions. When you receive a written discovery request, you are likely to resent the time and trouble involved in responding. You have every right to discuss the requests with your attorney. However, you should remember that you pay for all the time your attorney spends on your case. If you require your attorney to spend time listening to your grievances about the discovery process, you are only increasing your fees and accomplishing nothing toward the resolution of your case. If the request is overbroad or harassing (and can be proven so, according to established legal theories), your attorney will file the appropriate objection and seek protection from the court. Otherwise, you must respond.

Interrogatories. When you receive the written interrogatories, you should first carefully read each question. Make sure you understand the question. If not, ask your attorney to explain it to you. Then, you should prepare a draft of the answers. After preparing your answers, review the questions again to make certain your answers are truthful and complete to fully answer the question asked. Do not offer additional information beyond the answer to the Interrogatory, but answer the question asked. All subparts must be responded to in to order asked. Finally, present your answers to your attorney in a legible form, and in the sequence asked in the interrogatories. If you have access to word processing equipment, you should ALWAYS type the answers. This way your attorney will not spend time trying to decipher your handwriting. You should submit your answers to your attorney well before the required answer date. Your attorney will then review your answers and may make suggestions for additional or less information. The attorney will prepare the answers in the proper form and will request you to sign, under oath before a notary public, those types of Discovery requiring answers under oath. Remember, the less time your attorney spends trying to read, understand and complete your answers, the more money you save in fees.

Request for Production. When you receive the request for production, you should first carefully read each request and make sure you understand them. If not, ask your attorney for further explanation. Then, you should begin gathering the requested documents. You should organize them by number, according to the number of the request. If you do not have possession, control or custody of a document, make a legible list of such item, according to the number of the request, and submit the list to your attorney. If the request is for monthly or periodic statements (e.g., bank or brokerage statements), organize them chronologically. Checks and the like can be loaded on a copy machine to the fullest extent possible. Many times, by reducing the image, you can get 8-10 checks on a page. But they must be legible.

You should index each response. For example, if Request #1 calls for bank statements and canceled checks for the period covered from January 1, 1990 to the current date, and you maintained two accounts during that period, your index will be:

“Response to Request #1 – Bank statements and canceled checks from account #5432, First National Bank, for the period covered from Jan.1, 1990 to current date, ewe produced in file #1. Bank statements and canceled checks from account #9876, State National Bank, for the period covered from Jan. 1, 1990 to the current date, are produced in file #1.”

Once the documents are collected, organized and indexed, submit them to your attorney. They should be presented with tabs separating the various documents (or in separate files), clearly identified by number according to the number of the request. Be sure to submit the documents well before the response deadline so that your attorney will have sufficient time to review them.

If you choose to present the material in a disorganized fashion, your attorney will be forced to spend extra time collecting and organizing at his/her hourly rate, which is usually expensive. This will be an additional and unnecessary expense to you, when litigation is expensive enough. Remember, the less time your attorney spends trying to organize, read and understand your production response, the more money you save in fees.

When Homeowner’s good faith attempts to amicably work with the Bank in order to resolve the issue fails;

Home owners should wake up TODAY! before it’s too late by mustering enough courage for “Pro Se” Litigation (Self Representation – Do it Yourself) against the Lender – for Mortgage Fraud and other State and Federal law violations using foreclosure defense package found at http://www.fightforeclosure.net “Pro Se” litigation will allow Homeowners to preserved their home equity, saves Attorneys fees by doing it “Pro Se” and pursuing a litigation for Mortgage Fraud, Unjust Enrichment, Quiet Title and Slander of Title; among other causes of action. This option allow the homeowner to stay in their home for 3-5 years for FREE without making a red cent in mortgage payment, until the “Pretender Lender” loses a fortune in litigation costs to high priced Attorneys which will force the “Pretender Lender” to early settlement in order to modify the loan; reducing principal and interest in order to arrive at a decent figure of the monthly amount the struggling homeowner could afford to pay.

If you find yourself in an unfortunate situation of losing or about to lose your home to wrongful fraudulent foreclosure, and need a complete package that will show you step-by-step litigation solutions helping you challenge these fraudsters and ultimately saving your home from foreclosure either through loan modification or “Pro Se” litigation visit: http://www.fightforeclosure.net

How Bankruptcy Can Help Protect Homeowner’s Assets

14 Monday Jul 2014

Posted by BNG in Bankruptcy, Federal Court, Foreclosure Defense, Judicial States, Non-Judicial States, Pro Se Litigation, Your Legal Rights

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When it comes to bankruptcy, the primary source of law is the Bankruptcy Code (Title 11 of the United States Code). Title 11 of the United States Code provides a comprehensive overview of all the substantive laws dealing with bankruptcy. Title (11) is broken down into 9 Chapters, 28 subchapters and 1,532 sections.

Chapter 1 deals with “General Provisions,” and is broken down into 12 sections. The first section, “Definitions,” essentially defines keywords to be found throughout the Bankruptcy Code. These words include “attorney,” “claim,” “consumer debt,” corporation,” “debtor,” etc. This particular section is helpful to refer back to frequently when trying to understand the Code. The remainder of this Chapter sets out to establish “General Provisions,” such as the power of the courts, and who may file for bankruptcy.

Chapter 3 is entitled “Case Administration,” and explains how the bankruptcy case is to be administrated. Chapter 3 contains 4 subchapters. The first subchapter is “Commencement of a Case,” and its sections explain how a bankruptcy case is to get started. Subchapters 2 through 4, talk about “Officers,” “Administration,” and “Administrative Powers.” Within these subchapters there is information regarding: the duties and qualifications of a trustee, attorney interaction with debtors, the Meeting of Creditors, examination of debtors, the bankruptcy estate, dismissal of cases, opening and reopening of cases, adequate protection and most importantly the Automatic Stay.

Chapter 5 is “Creditors, The Debtor and The Estate.” This chapter contains 3 subchapters. The first subchapter deals with “Creditors and Claims.” Information regarding proofs of claim and liability can be found in this subchapter. The second subchapter deals with “Debtor’s Duties and Benefits.” This subchapter enumerates the debtor’s duties, exemptions and information regarding discharge and debt relief agencies. The third subchapter is entitled “The Estate.” This subchapter sets out to explain how the bankruptcy estate is formed and works throughout the case.

Chapters 7, 9, 11, 12, 13 and 15, deal with specific types of bankruptcies. Chapter 7, “Liquidation,” deals with what some people call a “straight bankruptcy.” Chapter 7 bankruptcies are the most common type of bankruptcy filed in the United States. Chapter 9, “Adjustments of Debts of a Municipality,” is available only to municipalities. A Chapter 9 allows and assists municipalities to reorganize and restructure their debt. Chapter 11, “Reorganization,” is similar to a Chapter 9, in that it allows for reorganization and restructuring of debts, but it is aimed towards businesses. Chapter 13, “Adjustments of Debt of an Individual with Regular Income,” is the same reorganization process mentioned above for individuals as supposed to businesses or municipalities. Chapter 12, “Adjustments of Debt of a Family Farmer or Fisherman with Regular Annual Income,” is only available to farmers and fisherman and is essentially the same as a Chapter 13, but with some additional provisions. Chapter 15, “Ancillary and Other Cross-Border Cases,” allows for corporations across borders to gain access to United States Bankruptcy Courts.

Homeowers often wonder whether they could file Bankruptcy if they had previously filed one.

Yes, you can file bankruptcy multiple times. In fact, there is no limit to the number of times that you can file. However, if you have received a discharge in a previous case, a certain amount of time must pass before you can receive a discharge again. The amount of time that must elapse depends on which chapter you previously filed, and which chapter your plan on filing now.

If you have previously filed a Chapter 7 bankruptcy, you must wait eight years to file and receive a discharge in a new Chapter 7. If you have filed a Chapter 7 in the last eight years and received a discharge you can still receive the protection of bankruptcy (automatic stay) by filing a Chapter 13. If more than four years has elapsed since you filed your Chapter 7, you can receive a discharge in your new filing.

If you previously received a discharge through a Chapter 13, you can receive a discharge in a Chapter 7 if six years has passed since your Chapter 13 filing. Note, that the clock starts as soon as your case is filed, not when you receive your discharge. If six years, has not passed, you can receive a discharge through another Chapter 13 as long as two years has passed since the previous Chapter 13 filing.

But what if you can’t receive a discharge? Can you still benefit from filing? Absolutely! Student loans and taxes are generally not dischargeable in a Chapter 7. After your Chapter 7 has concluded, student loan creditors can resume garnishing up to 25% of your paycheck. The IRS is even worse. They can take over 90% of your paycheck to pay on back taxes. Even though you may not be eligible for a discharge, you can still receive the protection of bankruptcy by filing a Chapter 13 and your student loan creditors will not be able to garnish your wages. A small monthly payment may give you up to five years of protection from lawsuits, garnishments, levies and liens.

Just because you have previously filed a bankruptcy doesn’t mean you can’t file again. Even if you can’t receive a discharge, you can still enjoy the protection that bankruptcy provides.

Using An Attorney for Bankruptcy Proceeding

You may be asking yourself, “Why do I need to hire an attorney to file bankruptcy?” You may also think, “I’ve done some research and I’ve seen the forms to fill out. It seems simple enough.”

While our package deals with Pro Se Foreclosure defense litigation, Bankruptcy proceeding is a totally different arena. Therefore homeowners are advised to seek counsel for representation. Bankruptcy isn’t as easy as a process as you may think. Time and again, we have people come to us telling us that they tried to file bankruptcy for themselves but their case was dismissed. In truth, the cost of fixing errors that are made in representing yourself can add up and you probably would have been better off having an attorney handle your case in the first place.

Representing yourself in a bankruptcy matter is referred to as filing pro se. Just like a traffic ticket, you are welcome to represent yourself in bankruptcy. However, as many people find out later (when it is too late), it is often necessary to have appropriate representation from an attorney with experience to make sure your interests are protected and you get the most favorable outcome available to you in the matter.

Many pro se cases usually experience problems starting when the petitioners came to their First Meeting of Creditors. This is a meeting where you are asked questions by the trustee of your bankruptcy to make sure everything in your petition is correct. Frequently, pro se filers make mistakes that require amendments to their petitions and coming back to attend future meetings. While it is not impossible for a mistake to be made in a petition filed by an attorney, the chances of having your bankruptcy go smoothly without any problems is a lot better if you have representation.

An attorney will know where your debts and assets need to be listed to prevent problems. Many times I will hear pro se filers say things like “I didn’t think I needed to list THAT.” Your attorney will be able to tell you what needs to be listed and what does not. Also, your attorney will be able to give you advice on when the best time to file will be. If a petition is filed too soon or too late, there may be debts that would have been discharged but will not be if the petition was filed at the wrong time. Finally, your attorney will know how to properly use the available exemptions to protect your property. This can become an issue if you have moved from one state to another within the last two years prior to filing. Some states provide for more property to be exempted from the bankruptcy estate than others. In some situations, the even more generous Federal exemptions may be available to a petitioner.

Why Do you need an Attorney in Bankruptcy

It is an Attorney’s job to know whether a Chapter 7 or a Chapter 13 is the better option for their clients. Attorneys will ask you proper questions at the initial consultation to make this determination. Most clients want to file a Chapter 7, but that is not always the best option for them. Each case is different and the rest of this post will show the differences between the two options so you can have a better understanding of both.

A Chapter 7 is less expensive than a Chapter 13 and it is cheaper. In initial consultation it is important for an Attorney to determine what type of debt his client has. There are three types of debt: priority, secured and general unsecured. Priority debt consists of recent tax debt and domestic support obligations, such as alimony or child support. If someone owes taxes from the last few years and/or a domestic support obligation, a Chapter 7 will not get rid of this debt. Secured debt is another type of debt. Secured debt consists of car loans, mortgages or statutory liens. Secured debt can be taken from you if you are not making the payments. If the client is current with their mortgages and car loans a Chapter 7 may still be a good option for them. However, if they are delinquent on secured debts, a Chapter 13 may be in their best interest. Alternatively, if someone has a high interest rate on a vehicle or the monthly payment leaves them with no disposable income, a Chapter 13 may be a good way to stretch out those payments on the vehicle to free up some other money to take care of other things they may need or start savings. The last type of debt is unsecured debt. Unsecured debt is credit card debt, medical bills, old utility bills, pay day loans, etc. This type of debt is discharged in a Chapter 7, which means it is wiped out. This type of debt is the reason that many potential clients feel they need to file bankruptcy.

As I said, Chapter 7’s are quicker than Chapter 13’s. They usually last 4 months or so, while the Chapter 13 will last from 36-60 months, but Chapter 13’s do have some advantages over Chapter 7 bankruptcies. Below I will list some of the reasons why people may want to file a Chapter 13, rather than a Chapter 7.

For some people, a Chapter 7 is not an option. They may not be eligible. In order to be eligible for a Chapter 7 you are not allowed to have filed one in the last 8 years. Additionally, some people make too much money or have too much monthly disposable income to be able to file a Chapter 7. If any of these restrictions apply, you can still file a Chapter 13. Another great reason to consider a Chapter 13 is if you are behind on your mortgage or car payment. Rather than lose your house to foreclosure or your car to repossession, you could file a Chapter 13 and get protection under the law. A case filing will stop all attempts at the mortgage company selling your house or the car creditor picking up your car. A Chapter 13 will also allow you to catch up on your back mortgage payments over the course of 5 years and stretch out your car payments over the same amount of time.

Chapter 13 bankruptcies are also a great option for people who are “upside down” on their house and have a 2nd or even a 3rd mortgage. In a Chapter 13, if you have no equity in your house in regards to the 1st mortgage, then we can “strip off” the second mortgage. That means these 2nd or 3rd mortgages would become unsecured debts and could be discharged at the end of the Chapter 13 and you would still be able to keep your house. Some people are also often behind on tax debt or domestic support payments and need time to catch up. They might be afraid of a bank levy or a criminal charge. A Chapter 13 will give them the time to become current without facing further penalties. These debts can be paid through the plan in a structured way to make it easier to handle for the debtor.

A Chapter 13 is also the only option when you are trying to discharge a debt that was assigned to you in a divorce decree. It is a good idea if you have gotten a divorce to show the decree to your attorney. If you have assigned debts through that divorce that you want to discharge it cannot be done through a Chapter 7. A good, knowledgeable bankruptcy attorney will be able to sort through all of this paperwork and let you know what the best option is for you.

Additionally, some clients who have filed a Chapter 7 bankruptcy in the last 8 years, will find themselves in a situation where they are getting garnished by a new creditor. They come to see Attorneys hoping to stop the garnishment but cannot file a Chapter 7. Often it is a good idea to file a Chapter 13 to stop the garnishment. Seasoned Attorneys can always file a Chapter 7 later to discharge the debt, but the Chapter 13 will stop the garnishment to free up money so you can pay your rent and utilities and not get further behind on your bills. These garnishments are often up to 25% of your paycheck, which can be devastating to many people.

Another advantage of Chapter 13 bankruptcies is that they can often be cheaper up front since attorney fees can be paid over the course of 5 years. We are very willing to work with clients on payment arrangements in a Chapter 13 if they are employed and have the ability to make the monthly plan payments to the Trustee.

This decision on what kind of bankruptcy to file is a complicated one and should not be taken lightly.

Attending the 341 Meeting of Creditors

Shortly after you file for bankruptcy, the Court sends you a notice to appear at a meeting of creditors, also called a “341 meeting”. This meeting will take place roughly about a month after your case is filed. The notice will contain the date, address, time and the name of the trustee that will be handling your case. This meeting is mandatory. If you do not attend the meeting, your case will be dismissed.

For most people, the meeting goes very quickly. Often, there are no creditors there and it will normally just be you, the trustee and your attorney (assuming you have retained one) involved in the meeting. When your name is called by the trustee, you will need to be prepared with your photo ID and social security card in your hand and ready to give to the trustee. This will keep the process moving along smoothly. The trustee will then swear you in, verify your identification and begin asking you questions regarding your bankruptcy schedules that were filed with the court.

The trustee is interested in recovering non-exempt assets in your estate so that he or she may obtain them, sell them and distribute the proceeds to your unsecured creditors. The trustee will ask you questions regarding the value of your home or your car, and how you came up with the values that you listed on your bankruptcy paperwork. They will also ask you about anticipated tax refunds. Often times, your anticipated tax refund will be an asset of your bankruptcy estate. The trustee may ask you to turn over any non-exempt portion of that tax return so that they can distribute it to creditors.

Additionally, the trustee will be looking for inconsistencies in your paperwork. It is very important that you are honest, both when filling out your bankruptcy paperwork and when you are in front of the trustee at the creditors’ meeting. If your answer to a trustee’s questions is different from what is listed in your bankruptcy paperwork, that will give the trustee a reason to believe that you have not been completely honest and it will make it more difficult for you to get a discharge. Make sure you review your paperwork carefully before filing it with the court because ultimately you are responsible for the information listed on the schedules, even if you did not prepare them.

This is a big step for you in the process of filing bankruptcy. You will likely be a little nervous and apprehensive to go to the meeting and answer more questions in front of someone you have never met before. If you have answered all questions honestly, you have nothing to be worried about. The meeting will likely be brief and you will walk out of there with a fresh start and a real opportunity to get your life back on the right track financially.

How Secured and Unsecured Debts are Treated in Bankruptcy

If you are considering filing a Chapter 7 or Chapter 13 bankruptcy it is important to be able to classify your debts as secured and unsecured. These debts are treated very differently in both Chapter 7 bankruptcies and Chapter 13 bankruptcies. If you file a Chapter 7 the unsecured debts will be discharged in the bankruptcy. If you file a Chapter 13 it is possible that all of your unsecured debts will be discharged, but for some people, a portion or sometimes even all of the unsecured debt will have to be paid back through the Chapter 13 plan.

The most common types of unsecured debts are credit cards. Unsecured debts are debts that are not secured by any of your property. If you were to default on these debts, the only way the creditor could collect money from you would be to file a case in court and get a judgment rendered against you for the contract price. Once this happens, the creditor could begin to garnish wages or place a levy on your bank account, essentially freezing it and whatever cash you have in it. This is where a Chapter 7 or Chapter 13 bankruptcy will help you out. The bankruptcy will stop the garnishment or levy and eventually discharge the unsecured debt. Other types of unsecured debts are medical bills, pay day loans, overdraft charges on bank accounts, old utility bills, deficiencies on repossessed vehicles or foreclosures and, in some case, tax debt.

Secured debts are debts that are linked to some sort of collateral (or personal property). The most common type of secured debt is a home mortgage. The mortgage is the debt and the collateral is the house. In a bankruptcy, if you wanted to keep the property (the home) then you would have to pay the secured debt; the mortgage. If you wanted to surrender the house, then the debt would be listed as unsecured debt, would be discharged in the bankruptcy, and you would not have to pay back any money owed on the mortgage. Another type of secured debt is your car loan. The loan is the debt and the security interest is the vehicle. If you are not paying on your vehicle, the finance company can have the vehicle repossessed. If you file a bankruptcy, you can keep these secured debts. If they have equity in them it may be in your best interest to file a Chapter 13 or you may have to surrender them. However, if you have no equity in your secured debts and meet the other requirements for a Chapter 7 bankruptcy then that may be the best option for you.

Exemption on your children

During consultation, attorney will ask you how many children you have living with you that are under 21. These children that are living with you that you are helping take care of are your dependents and will be listed as such in your bankruptcy filing.

You may wonder why that is important. The bankruptcy laws are set up to help the debtors protect certain assets. The attorney that prepares your petition will use these laws to exempt certain property (such as cars, furniture, money in bank accounts and even your home) from your bankruptcy estate. That is, the Trustee would not be able to get a hold of these assets, liquidate them and pay off your unsecured debt with the money they collect. That is good news for the debtor.

It is obviously important then for a bankruptcy attorney to know the law and the exemptions that are available to use. State statutes sets out the “Head of Household” exemption. In some States for example, Missouri, it states that the debtor is allowed to claim a $1250 exemption if they are head of household and they may also claim an additional $350 for each unmarried dependent child under the age of 21. This means that if you want to file a Chapter 7 bankruptcy, but you have some money in the bank or are expecting a fairly large tax refund, your attorney may still be able to help you protect these assets.

Here is how the exemption would work…debtor wants to file a Chapter 7 to stop a wage garnishment, but they are expecting a $2000 tax refund in 2 months. That tax refund is an asset of the bankruptcy so the Trustee could require you to turn it over so that he or she could pay off your creditors with it. However, you have 3 children under the age of 21 that are all living at home with you. Your attorney can apply the Head of Household exemption for $1250, plus $350 per child (for a total of $1050 for 3 children). These would be a total of $2300 that the law allows you to exempt, which would cover the entire tax refund that you are to receive in 2 months. That means you would not have to wait to file your bankruptcy, you could stop the garnishment right away and still be able to retain all of your tax refund.

These exemptions are important and you obviously will want to protect as much property as you can.

Protecting your Home:

Homeowners often wonder if they could lose their home in Bankruptcy.

The short answer is no…you do not have to surrender your home if you file for bankruptcy. If you are having financial trouble and problems making your ongoing mortgage payment, I would first recommend contacting your lender and trying to modify your mortgage. Some lenders will work with you, but if they are not willing to do, a Chapter 7 or Chapter 13 bankruptcy may be the right option for you.

If you are filing a Chapter 7 bankruptcy and you want to keep your house, you will have to be current on your mortgage. You will also need to continue to make payments on that mortgage and enter into a reaffirmation agreement with your lender. When you reaffirm your debt, you are agreeing to repay a debt (in this case, you are agreeing to continue to pay your mortgage) that would other be discharged in your bankruptcy. You would then need to continue making payments to the mortgage company under the reaffirmation agreement. If you breach this agreement and fail to make the monthly payments that have been agreed upon, the bank could then start foreclosure proceedings because you would have breached your promise to pay them.

If you are filing a Chapter 13 bankruptcy and you want to retain your home you can do so by continuing to make your ongoing mortgage payments. The advantage of filing a Chapter 13 when you want to keep your home is that you will have the ability to pay the mortgage arrearage over a period of 3-4 years through your bankruptcy plan. For example, if you have a $1000 mortgage payment per month and you have not paid anything to the mortgagor in 6 months, you will owe them $6,000 in arrears. In a Chapter 13 plan, you can pay this $6,000 over a period of 3-4 years and the bankruptcy will stop any foreclosure proceedings that may have been started or would ultimately be started.

Some people also have equity in their homes. I’ll use Missouri again as an example here. In that State, they have the Homestead Exemption. You can exempt $15,000 in your home, according to MO. Ann. Stat. §513.475. That means that if you owe $100,000 on your home and it is worth $130,000, you will have $30,000 in equity. The Homestead Exemption will allow you to exempt $15,000, but you will still have $15,000 of non-exempt equity. The trustee will have you pay them the amount of non-exempt equity so that they can distribute it to your unsecured creditors. Rather than paying this amount to the trustee in one lump sum, you can pay this amount over time in your Chapter 13 plan and still be able to keep living in your home.

Both the Chapter 7 and the Chapter 13 bankruptcy options may enable you to keep your home, but it is in your best interest to contact a local attorney and speak to them about whether filing for bankruptcy will be a good option for you. They will be able to tell you how the bankruptcy laws will work in your situation and enable you to keep your home.

Protecting Your Car:

A common concern for debtors that are considering filing for bankruptcy is whether or not they are going to lose their vehicle if they file a bankruptcy. The answer to this question depends on several factors so it would be in your best interest, if this is a concern of yours, to consult a bankruptcy attorney in your area.

Most people believe that if they file a bankruptcy they are going to lose everything, including their vehicle. That, in most cases, is just simply not true. In some States, you can protect up to $3,000 in vehicle equity during a bankruptcy. If you are married and filing jointly $6,000 of equity in your vehicle will be protected by the Missouri Motor Vehicle exemption. Vehicle equity is the fair market value minus the amount of money owed on the vehicle. For example, if your car is worth $10,000 and your loan on that vehicle is $9,000, your equity is $1,000. You can look up the fair market value of your vehicle on KBB.com or NADA.com.

If you do not have more than $3,000 of equity in your vehicle, keeping your car will not be a problem. You can file a Chapter 7 bankruptcy, reaffirm the debt on the vehicle and keep making the payments. When you do have more than $3,000 of equity in your vehicle and want to keep it, Chapter 13 is possibly a better option for you. A Chapter 13 bankruptcy will allow you to keep your vehicle, paying back the un-exempt portion of the equity to the Trustee over a period of 3-5 years. This money paid to the Trustee will be distributed to your unsecured creditors and you will be able to keep your vehicle. A Chapter 13 bankruptcy is also helpful when you are behind on your car payments and the finance company is threatening to repossess the vehicle or already has done so.

It is also alright to own multiple vehicles. There is no limit to the number of vehicles you can keep during your bankruptcy. You can split up the exemption and apply it to as many vehicles as you would like. The types of vehicles that qualify under the Motor Vehicle Exemption in Missouri are defined as a self-propelled vehicle designed primarily for use on highways. That definition covers most cars, trucks and motorcycles.

If you do have more equity in your vehicle than what is allowed by the exemption and you still want to file a Chapter 7 then the Trustee is likely to sell your car and distribute the money to your unsecured creditors. That is a decision you and your bankruptcy attorney can make before the filing of your case and something that should be discussed before the 341 meeting with the Trustee.

If you are filing a Chapter 7 bankruptcy, which will discharge all of your unsecured debts, you still may be able to keep your vehicle, but it mostly depends on whether or not you have equity in that vehicle. For example, if you own a vehicle without a loan on it and your vehicle is worth $5000, the trustee will take an interest in that vehicle. The trustee’s job is to find assets, liquidate them and then disperse the money to unsecured creditors to pay off your bills. In Missouri, we have exemptions that can protect your personal property. If you are a single filer, you can protect up to $3000 of equity in your vehicles. If you are a joint filer with your spouse, the exemptions allow you to protect a total of $6000 in your vehicles. To sum it up, if you have a loan on your vehicle and your vehicle is worth less than what you owe on it or if your vehicle is worth more than what you owe, but less than $3000 more, then you will not have any issues keeping your vehicle. If your vehicle does have equity, then you have a couple of options. Those options include surrendering your vehicle to the trustee, making a cash offer to the trustee that will enable you to keep the vehicle or filing a Chapter 13 bankruptcy and paying off the equity through the course of the Chapter 13 plan.

A Chapter 13 bankruptcy is a good option if you have equity in your vehicle. You could pay back the equity over the course of the plan and that money would go to some of your unsecured creditors to help pay them back what you owe them. Additionally, a Chapter 13 can also save a car if you are behind on your payments or, in certain circumstances, if your car has been repossessed. If you were to file a Chapter 13 bankruptcy, your loan balance for your vehicle will be put inside the plan and paid off over 60 months at the court’s interest rate, which is often a lower interest rate than you received in your original contract with your lender. Additionally, if you are having a hard time making your car payments because they are too high, a Chapter 13 can stretch those payments out over 5 years and make it more affordable.

To summarize, the bankruptcy laws are written to give the debtor an opportunity to protect their personal property, but the laws can be complex and it is always a good idea to speak to an attorney so you know exactly what your rights are in regards to your vehicle and any other property you might own.

When Homeowner’s good faith attempts to amicably work with the Bank in order to resolve the issue fails;

What Borrowers Must Know About How the “Pretender Lenders” Steal Your Home!

24 Tuesday Jun 2014

Posted by BNG in Banks and Lenders, Discovery Strategies, Federal Court, Foreclosure Defense, Fraud, Judicial States, Litigation Strategies, Non-Judicial States, Pro Se Litigation, Trial Strategies, Your Legal Rights

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For those that may have wondered how a loan works in a fiat currency debt based banking system here it is. Here’s how a “bank loan” really works. Homeowners fighting foreclosure in the courtrooms all across America should use these lines of questioning, then watch and see the “pretender lender” sweating like a “he goat” on the witness stand.

Interviews with bankers about a foreclosure. The banker was placed on the witness stand and sworn in. The plaintiff’s (borrower’s) attorney asked the banker the routine questions concerning the banker’s education and background.

The attorney asked the banker, “What is court exhibit A?”

The banker responded by saying, “This is a promissory note.”

The attorney then asked, “Is there an agreement between Mr. Smith (borrower) and the defendant?”

The banker said, “Yes.”

The attorney asked, “Do you believe the agreement includes a lender and a borrower?”

The banker responded by saying, “Yes, I am the lender and Mr. Smith is the borrower.”

The attorney asked, “What do you believe the agreement is?”

The banker quickly responded, saying, ” We have the borrower sign the note and we give the borrower a check.”

The attorney asked, “Does this agreement show the words borrower, lender, loan, interest, credit, or money within the agreement?”

The banker responded by saying, “Sure it does.”

The attorney asked, `”According to your knowledge, who was to loan what to whom according to the written agreement?”

The banker responded by saying, “The lender loaned the borrower a $50,000 check. The borrower got the money and the house and has not repaid the money.”

The attorney noted that the banker never said that the bank received the promissory note as a loan from the borrower to the bank. He asked, “Do you believe an ordinary person can use ordinary terms and understand this written agreement?”

The banker said, “Yes.”

The attorney asked, “Do you believe you or your company legally own the promissory note and have the right to enforce payment from the borrower?”

The banker said, “Absolutely we own it and legally have the right to collect the money.”

The attorney asked, “Does the $50,000 note have actual cash value of $50,000? Actual cash value means the promissory note can be sold for $50,000 cash in the ordinary course of business.”

The banker said, “Yes.”

The attorney asked, “According to your understanding of the alleged agreement, how much actual cash value must the bank loan to the borrower in order for the bank to legally fulfill the agreement and legally own the promissory note?”

The banker said, “$50,000.”

The attorney asked, “According to your belief, if the borrower signs the promissory note and the bank refuses to loan the borrower $50,000 actual cash value, would the bank or borrower own the promissory note?”

The banker said, “The borrower would own it if the bank did not loan the money. The bank gave the borrower a check and that is how the borrower financed the purchase of the house.”

The attorney asked, “Do you believe that the borrower agreed to provide the bank with $50,000 of actual cash value which was used to fund the $50,000 bank loan check back to the same borrower, and then agreed to pay the bank back $50,000 plus interest?”

The banker said, “No. If the borrower provided the $50,000 to fund the check, there was no money loaned by the bank so the bank could not charge interest on money it never loaned.”

The attorney asked, “If this happened, in your opinion would the bank legally own the promissory note and be able to force Mr. Smith to pay the bank interest and principal payments?”

The banker said, “I am not a lawyer so I cannot answer legal questions.”

The attorney asked, ” Is it bank policy that when a borrower receives a $50,000 bank loan, the bank receives $50,000 actual cash value from the borrower, that this gives value to a $50,000 bank loan check, and this check is returned to the borrower as a bank loan which the borrower must repay?”

The banker said, “I do not know the bookkeeping entries.”

The attorney said, “I am asking you if this is the policy.”

The banker responded, “I do not recall.”

The attorney again asked, “Do you believe the agreement between Mr. Smith and the bank is that Mr. Smith provides the bank with actual cash value of $50,000 which is used to fund a $50,000 bank loan check back to himself which he is then required to repay plus interest back to the same bank?”

The banker said, ” I am not a lawyer.”

The attorney said, “Did you not say earlier that an ordinary person can use ordinary terms and understand this written agreement?”

The banker said, “Yes.”

The attorney handed the bank loan agreement marked “Exhibit B” to the banker. He said, “Is there anything in this agreement showing the borrower had knowledge or showing where the borrower gave the bank authorization or permission for the bank to receive $50,000 actual cash value from him and to use this to fund the $50,000 bank loan check which obligates him to give the bank back $50,000 plus interest?”

The banker said, “No.”

The lawyer asked, “If the borrower provided the bank with actual cash value of $50,000 which the bank used to fund the $50,000 check and returned the check back to the alleged borrower as a bank loan check, in your opinion, did the bank loan $50,000 to the borrower?”

The banker said, “No.”

The attorney asked, “If a bank customer provides actual cash value of $50,000 to the bank and the bank returns $50,000 actual cash value back to the same customer, is this a swap or exchange of $50,000 for $50,000.”

The banker replied, “Yes.”

The attorney asked, “Did the agreement call for an exchange of $50,000 swapped for $50,000, or did it call for a $50,000 loan?”

The banker said, “A $50,000 loan.”

The attorney asked, “Is the bank to follow the Federal Reserve Bank policies and procedures when banks grant loans.”

The banker said, “Yes.”

The attorney asked, “What are the standard bank bookkeeping entries for granting loans according to the Federal Reserve Bank policies and procedures?” The attorney handed the banker FED publication Modern Money Mechanics, marked “Exhibit C”.

The banker said, “The promissory note is recorded as a bank asset and a new matching deposit (liability) is created. Then we issue a check from the new deposit back to the borrower.”

The attorney asked, “Is this not a swap or exchange of $50,000 for $50,000?”

The banker said, “This is the standard way to do it.”

The attorney said, “Answer the question. Is it a swap or exchange of $50,000 actual cash value for $50,000 actual cash value? If the note funded the check, must they not both have equal value?”

The banker then pleaded the Fifth Amendment.

The attorney asked, “If the bank’s deposits (liabilities) increase, do the bank’s assets increase by an asset that has actual cash value?”

The banker said, “Yes.”

The attorney asked, “Is there any exception?”

The banker said, “Not that I know of.”

The attorney asked, “If the bank records a new deposit and records an asset on the bank’s books having actual cash value, would the actual cash value always come from a customer of the bank or an investor or a lender to the bank?”

The banker thought for a moment and said, “Yes.”

The attorney asked, “Is it the bank policy to record the promissory note as a bank asset offset by a new liability?”

The banker said, “Yes.”

The attorney said, “Does the promissory note have actual cash value equal to the amount of the bank loan check?”

The banker said “Yes.”

The attorney asked, “Does this bookkeeping entry prove that the borrower provided actual cash value to fund the bank loan check?”

The banker said, “Yes, the bank president told us to do it this way.”

The attorney asked, “How much actual cash value did the bank loan to obtain the promissory note?”

The banker said, “Nothing.”

The attorney asked, “How much actual cash value did the bank receive from the borrower?”

The banker said, “$50,000.”

The attorney said, “Is it true you received $50,000 actual cash value from the borrower, plus monthly payments and then you foreclosed and never invested one cent of legal tender or other depositors’ money to obtain the promissory note in the first place? Is it true that the borrower financed the whole transaction?”

The banker said, “Yes.”

The attorney asked, “Are you telling me the borrower agreed to give the bank $50,000 actual cash value for free and that the banker returned the actual cash value back to the same person as a bank loan?”

The banker said, “I was not there when the borrower agreed to the loan.”

The attorney asked, “Do the standard FED publications show the bank receives actual cash value from the borrower for free and that the bank returns it back to the borrower as a bank loan?”

The banker said, “Yes.”

The attorney said, “Do you believe the bank does this without the borrower’s knowledge or written permission or authorization?”

The banker said, “No.”

The attorney asked, “To the best of your knowledge, is there written permission or authorization for the bank to transfer $50,000 of actual cash value from the borrower to the bank and for the bank to keep it for free?

The banker said, “No.”

The attorney asked, Does this allow the bank to use this $50,000 actual cash value to fund the $50,000 bank loan check back to the same borrower, forcing the borrower to pay the bank $50,000 plus interest? ”

The banker said, “Yes.”

The attorney said, “If the bank transferred $50,000 actual cash value from the borrower to the bank, in this part of the transaction, did the bank loan anything of value to the borrower?”

The banker said, “No.” He knew that one must first deposit something having actual cash value (cash, check, or promissory note) to fund a check.

The attorney asked, “Is it the bank policy to first transfer the actual cash value from the alleged borrower to the lender for the amount of the alleged loan?”

The banker said, “Yes.”

The attorney asked, “Does the bank pay IRS tax on the actual cash value transferred from the alleged borrower to the bank?”

The banker answered, “No, because the actual cash value transferred shows up like a loan from the borrower to the bank, or a deposit which is the same thing, so it is not taxable.”

The attorney asked, “If a loan is forgiven, is it taxable?”

The banker agreed by saying, “Yes.”

The attorney asked, “Is it the bank policy to not return the actual cash value that they received from the alleged borrower unless it is returned as a loan from the bank to the alleged borrower?”

“Yes”, the banker replied.

The attorney said, “You never pay taxes on the actual cash value you receive from the alleged borrower and keep as the bank’s property?”

“No. No tax is paid.”, said the crying banker.

The attorney asked, “When the lender receives the actual cash value from the alleged borrower, does the bank claim that it then owns it and that it is the property of the lender, without the bank loaning or risking one cent of legal tender or other depositors’ money?”

The banker said, “Yes.”

The attorney asked, “Are you telling me the bank policy is that the bank owns the promissory note (actual cash value) without loaning one cent of other depositors’ money or legal tender, that the alleged borrower is the one who provided the funds deposited to fund the bank loan check, and that the bank gets funds from the alleged borrower for free? Is the money then returned back to the same person as a loan which the alleged borrower repays when the bank never gave up any money to obtain the promissory note? Am I hearing this right? I give you the equivalent of $50,000, you return the funds back to me, and I have to repay you $50,000 plus interest? Do you think I am stupid?”

In a shaking voice the banker cried, saying, “All the banks are doing this. Congress allows this.”

The attorney quickly responded, “Does Congress allow the banks to breach written agreements, use false and misleading advertising, act without written permission, authorization, and without the alleged borrower’s knowledge to transfer actual cash value from the alleged borrower to the bank and then return it back as a loan?”

The banker said, “But the borrower got a check and the house.”

The attorney said, “Is it true that the actual cash value that was used to fund the bank loan check came directly from the borrower and that the bank received the funds from the alleged borrower for free?”

“It is true”, said the banker.

The attorney asked, “Is it the bank’s policy to transfer actual cash value from the alleged borrower to the bank and then to keep the funds as the bank’s property, which they loan out as bank loans?”

The banker, showing tears of regret that he had been caught, confessed, “Yes.”

The attorney asked, “Was it the bank’s intent to receive actual cash value from the borrower and return the value of the funds back to the borrower as a loan?”

The banker said, “Yes.” He knew he had to say yes because of the bank policy.

The attorney asked, “Do you believe that it was the borrower’s intent to fund his own bank loan check?”

The banker answered, “I was not there at the time and I cannot know what went through the borrower’s mind.”

The attorney asked, “If a lender loaned a borrower $10,000 and the borrower refused to repay the money, do you believe the lender is damaged?”

The banker thought. If he said no, it would imply that the borrower does not have to repay. If he said yes, it would imply that the borrower is damaged for the loan to the bank of which the bank never repaid. The banker answered, “If a loan is not repaid, the lender is damaged.”

The attorney asked, “Is it the bank policy to take actual cash value from the borrower, use it to fund the bank loan check, and never return the actual cash value to the borrower?”

The banker said, “The bank returns the funds.”

The attorney asked, “Was the actual cash value the bank received from the alleged borrower returned as a return of the money the bank took or was it returned as a bank loan to the borrower?”

The banker said, “As a loan.”

The attorney asked, “How did the bank get the borrower’s money for free?”

The banker said, “That is how it works.”

When Homeowner’s good faith attempts to amicably work with the Bank in order to resolve the issue fails;

How Homeowners Can Effectively Benefit from Foreclosure Defense

21 Saturday Jun 2014

Posted by BNG in Federal Court, Foreclosure Defense, Fraud, Judicial States, Loan Modification, MERS, Non-Judicial States, Pro Se Litigation, State Court, Your Legal Rights

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Over the past few years, a growing number of homeowners in the foreclosure process have begun to fight back, by stalling foreclosure proceedings or stopping them altogether. The legal strategy employed by these homeowners is known as foreclosure defense.

The goal of the foreclosure defense strategy is to prove that the bank does not have a right to foreclose. The chances of success rest on an attorney’s ability to challenge how the mortgage industry operates. The strategy aims to take advantage of flaws in the system, and presumes illegal or unethical behavior on the part of lenders.

Since 2007, nearly 4.2 million people in the United States have lost their homes to foreclosure. By early 2014, that number is expected to climb to 6 million. Historically, the legal process of foreclosure, one that requires a homeowner to return his or her house to a lender after defaulting on a mortgage, has tilted in favor of the banks and lenders — who are well-versed in the law and practice of foreclosure.

The simplest way to avoid foreclosure is by modifying the mortgage. In a mortgage modification, the homeowner convinces the lender to renegotiate the terms of the mortgage in order to make the payments more affordable.

A mortgage modification can include:

A reduction or change in the loan’s interest rate.
A reduction in the loan’s principal.
A reduction or elimination of late fees and penalties for non-payment.
A reduction in your monthly payment.
Forbearance, to temporarily stop making payments, or extend the time for making payments.

Foreclosure defense is a new concept that continues to grow alongside the rising tide of foreclosure cases. While some courts accept foreclosure defense arguments, others find them specious and hand down decisions more beneficial to banks than to homeowners.

A growing number of victories by homeowners in state and federal courts have altered the foreclosure landscape dramatically, giving optimism to tens of thousands of other homeowners in similar situations. And because many of America’s large banks have acknowledged unorthodox, unaccepted or even illegal practices in the areas of mortgages, loan modifications and foreclosures, they inadvertently have given homeowners additional ammunition with which to fight.

Foreclosure Defense Varies by State

A major strategy of foreclosure defense is to make a bank substantiate clear chains of title for a mortgage and a promissory note. If any link in either chain is questionable, it can nullify a lender’s ability to make a valid claim on a property.

The foreclosure process varies somewhat from state to state, depending on whether your state uses mortgages or deeds of trust for the purchase of real property. A mortgage or deed of trust outlines a transfer of an interest in a property; it is not, in itself, a promise to pay a debt. Instead, it contains language that gives the lender the right to take the property if the borrower breaches the terms of the promissory note.

If you signed a mortgage, it generally means you live in a state that conducts judicial foreclosures, meaning that a lender has to sue in court in order to get a judgment to foreclose. If you signed a deed of trust, you live in a state that conducts non-judicial foreclosures, which means that a lender does not have to go to court to initiate a foreclosure action.

In a judicial state, homeowners have the advantage because they can require that the lender produce proof and perfection of claim, at the initial court hearing. In a non-judicial state, the lender does not have to prove anything because the state’s civil code gives it the right to foreclose after a notice of default has been sent. So in non-judicial states, a homeowner must file a civil action against the lender to compel it to provide proof of claim.

Regardless of whether you signed a mortgage or a deed of trust, you also signed a promissory note — a promise to pay back a specified amount over a set period of time. The note goes directly to the lender and is held on its books as an asset for the amount of the promised repayment. The mortgage or deed of trust is a public record and, by law, must be recorded in a county or town office. Each time a promissory note is assigned, i.e. sold to another party, the note itself must be endorsed with the name of the note’s new owner. Each time a deed of trust or mortgage is assigned to another entity, that transaction must be recorded in the town or county records office.

Foreclosure Defense and Chain of Title

Here is where foreclosure defense can begin to chip away at a bank’s claim on your property. In order for a mortgage, deed of trust or promissory note to be valid, it must have what is known as “perfection” of the chain of title. In other words, there must be a clear, unambiguous record of ownership from the time you signed your papers at closing, to the present moment. Any lapse in the chain of title causes a “defect” in the instrument, making it invalid.

In reality, lapses occur frequently. As mortgages and deeds began to routinely be bought and sold, the sheer magnitude of those transfers made it difficult, costly and time-consuming for institutions to record every transaction in a county records office. But in order to have some method of record-keeping, the banks created the Mortgage Electronic Registration System (MERS), a privately held company that tracks the servicing rights and ownership of the nation’s mortgages. The MERS holds more than 66 million American mortgages in its database.

When a foreclosure is imminent, MERS appoints a party to foreclose, based on its records of who owns the mortgage or deed of trust. But some courts have rejected the notion that MERS has the legal authority to assign title to a particular party in the first place. A court can decide MERS has no “standing,” meaning that the court does not recognize its right to initiate foreclosure since MERS does not have any financial interest in either the property or the promissory note.

And since MERS has essentially bypassed the county record-keeping system, the perfection of chain of title cannot be independently verified. This is where a foreclosure defense can gain traction, by questioning the perfection of the chain of title and challenging MERS’ legal authority to assign title.

Promissory Notes are Key to Foreclosure Defense

Some courts may also challenge MERS’ ability to transfer the promissory note, since it likely has been sold to a different entity, or in most cases, securitized (pooled with other loans) and sold to an unknown number of entities. In the U.S. Supreme Court case Carpenter v. Longan, it was ruled that where a promissory note goes, a deed of trust must follow. In other words, the deed and the note cannot be separated.

If your note has been securitized, it now belongs to someone other than the holder of your mortgage. This is known as bifurcation — the deed of trust points to one party, while the promissory note points to another. Thus, a foreclosure defense claims that since the relationship between the deed and the note has become defective, it renders the deed of trust unenforceable.

Your promissory note must also have a clear chain of title, according to the nation’s Uniform Commercial Code (UCC), the body of regulations that governs these types of financial instruments. But over and over again, borrowers have been able to demonstrate that subsequent assignments of promissory notes have gone unendorsed.

In fact, it has been standard practice for banks to leave the assignment blank when loans are sold and/or securitized and, customarily, the courts have allowed blank assignment to be an acceptable form of proof of ownership. However, when the Massachusetts Supreme Court in U.S. Bank v. Ibenez ruled that blank assignment is not sufficient to claim perfection, it provided another way in which a foreclosure can be challenged.

In their most egregious attempts to remedy these glaring omissions, some banks have actually tried to reverse-engineer chains of title, using fraudulent means such as:

Robo-signing of documents.
False notary signatures.
Submission of questionable, inaccurate or patently counterfeit affidavits.

Exposure of these dishonest methods halted many foreclosures in their tracks and helped increase governmental scrutiny of banks’ foreclosure procedures.

Other Foreclosure Defense Strategies

* Another option for a homeowner who wishes to expose a lender’s insufficient perfection of title is to file for bankruptcy. In a Chapter 7 filing, you can declare your home an “unsecured asset” and wait for the lender to object. This puts the burden of proof on the lender to show a valid chain of assignment. In a Chapter 13 bankruptcy, you can file an Adversary Proceeding, wherein you sue your lender to compel it to produce valid proof of claim. The Bankruptcy Code requires that your lender provide evidence of “perfected title.”

* Another foreclosure defense argument explores the notion of whether the bank is a real party of interest. If it’s not, it doesn’t have the right to foreclose. For example, if your loan has been securitized, your original lender has already been paid. At that point, the debt was written off and the debt should be considered settled. In order to prove that your original lender has profited from the securitization of your mortgage, it is advised that you obtain a securitization audit. The audit is completed by a third-party researcher who tracks down your loan, and then provides you with a court-admissible document showing that your loan has been securitized.

* A foreclosure defense can also argue that once a loan has been securitized, or converted to stock, it is no longer a loan and cannot be converted back into a loan. That means that your promissory note no longer exists, as such. And if that is true, then your mortgage or deed of trust is no longer securing anything. Instead of the bank insisting that you have breached the contract specified in the promissory note, foreclosure defense argues that the bank has actually destroyed that agreement itself. And if the agreement doesn’t exist, how can it be enforced? A corollary to this argument states that your loan is no longer enforceable because it is now owned by many shareholders and a promissory note is only enforceable in its whole entirety. How can thousands of people foreclose on your house?

While the foreclosure defense strategy is legal in nature, and can be handled differently by different courts, it should not be ignored when preparing a case.

The tactic of attacking a lender’s shoddy or illegal practices has proven to be the most successful strategy of foreclosure defense, since most courts are loathe to accept unlawful or unethical behavior, even from banks. If a homeowner can present clear instances of lost or missed paperwork, demonstrate that notes were misplaced or improperly endorsed, or prove that documents were forged, robo-signed, or reversed-engineered, the more likely a court will rule in his or her favor.

If you are considering a foreclosure defense, it is imperative that you retain the services of professional legal counsel, if you cannot afford a professional counsel you can fight your own foreclosure “Pro Se” using the “Do it Youself” foreclosure defense package found at http://www.fightforeclosure.net.

Regardless of how educated you are about the process, this is an area of law that requires a well-thought-out, competent presentation in a state or federal court. The only inclusive guides with well defined foreclosure plan at http://fightforeclosure.net can help save your home TODAY! Don’t Delay, Time is not on your side.

A successful foreclosure defense may prohibit or delay the foreclosure process or it simply may induce a lending institution to negotiate a loan modification that allows you to stay in your home — which, of course, was the goal in the first place.

When Homeowner’s good faith attempts to amicably work with the Bank in order to resolve the issue fails;

Home owners should wake up TODAY! before it’s too late by mustering enough courage for “Pro Se” Litigation (Self Representation – Do it Yourself) against the Lender – for Mortgage Fraud and other State and Federal law violations using foreclosure defense package found at http://www.fightforeclosure.net “Pro Se” litigation will allow Homeowners to preserved their home equity, saves Attorneys fees by doing it “Pro Se” and pursuing a litigation for Mortgage Fraud, Quiet Title and Slander of Title; among other causes of action. This option allow the homeowner to stay in their home for 3-5 years for FREE without making a red cent in mortgage payment, until the “Pretender Lender” loses a fortune in litigation costs to high priced Attorneys which will force the “Pretender Lender” to early settlement in order to modify the loan; reducing principal and interest in order to arrive at a decent figure of the monthly amount the struggling homeowner could afford to pay.

Montana Jury Awarded Homeowner Massive Damages Against US BANK in Mortgage Fraud Case

20 Friday Jun 2014

Posted by BNG in Banks and Lenders, Case Laws, Case Study, Foreclosure Defense, Judicial States, Non-Judicial States, Your Legal Rights

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Montana

The Gallatin County, Montana District Court has rejected US Bank’s Motion to reduce a punitive damage award assessed against it by a jury, upholding the $5,000,000.00 award as well as the $1M compensatory damages award on the homeowner’s fraud and constructive fraud claims. The case is McCulley v. US Bank, Cause No. DV09-562C (Montana 18th Judicial District Court). The Order denying US Bank’s Motion to reduce the punitive damage award was entered on April 14, 2014.

The facts of this case are beyond shocking. The 22-page opinion sets out how US Bank intentionally lied to the Court and the homeowner about the underlying transaction and the existence of documents, withheld documents, made the homeowner sign three versions of the loan application while lying to the homeowner that she would receive a specific loan, switching the loan at the last minute, and then foreclosing in order to make a profit of over $350,000.00. The Court also found that the homeowner went from a healthy and athletic individual to one who was severely depressed and attempted a near-successful suicide because of the actions of US Bank.

The Court found that all of the factors to uphold the punitive damages award had been satisfied under Montana law, and that the $5M award was well within US Bank’s ability to pay without serious consequences to it given that US Bank’s Form 10-Q filing with the SEC showed that its net worth was $41,552,000.000 (that’s over $42 and a half BILLION dollars), and that US Bank had a net income for the nine months ending 09/30/13 of over $4.26 billion.

It is thus no wonder why the banks fight requests for jury trials with such vigor. They know that if regular people see the kind of fraudulent conduct which the banks engage in that there will be serious consequences.

When Homeowner’s good faith attempts to amicably work with the Bank in order to resolve the issue fails;

Home owners should wake up TODAY! before it’s too late by mustering enough courage for “Pro Se” Litigation (Self Representation – Do it Yourself) against the Lender – for Mortgage Fraud and other State and Federal law violations using foreclosure defense package found at http://www.fightforeclosure.net “Pro Se” litigation will allow Homeowners to preserved their home equity, saves Attorneys fees by doing it “Pro Se” and pursuing a litigation for Mortgage Fraud, Quiet Title and Slander of Title; among other causes of action. This option allow the homeowner to stay in their home for 3-5 years for FREE without making a red cent in mortgage payment, until the “Pretender Lender” loses a fortune in litigation costs to high priced Attorneys which will force the “Pretender Lender” to early settlement in order to modify the loan; reducing principal and interest in order to arrive at a decent figure of the monthly amount the struggling homeowner could afford to pay.

How Homeowners Can Effectively Use TILA in their Foreclosure Defense

11 Wednesday Jun 2014

Posted by BNG in Case Laws, Case Study, Federal Court, Foreclosure Defense, Fraud, Judicial States, Legal Research, Mortgage Laws, Non-Judicial States, Pro Se Litigation, Your Legal Rights

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Many homeowners often wonder what is TILA and how it applies to them.

The Truth in Lending Act (TILA) (Subject to Update)

This post is designed to enlighten homeowners about the benefits of TILA in their foreclosure defense.

Some of the things homeowners should be aware of is that, Under TILA, a debtor has a right of rescission as to nonpurchase residential
mortgages that lasts for three days after completion of the transaction or delivery of the disclosure, which ever occurs later. It is required that each debtor receives two copies of the notice of their right of rescission. According to Rodriguez v. U.S. Bank (In re Rodriguez), 278 B.R. 683 (Bankr. D.R.I. 2002), the date of the expiration of the right of
rescission must be filled in. If the notices are not given or other material disclosures are not made, the rescission right is extended from three days to three years from the completion of the transaction. See In re Lombardi, 195 B.R. 569 (Bankr. D.R.I. 1996).

Any extension of the right of rescission beyond the three-year period provided by TILA must come from state law. The Supreme Court in Beach v. Ocwen Fed. Bank, 523 U.S. 410 (1998), held that federal law does not provide an extension of more than three years, and that equitable tolling does not apply because the three year limit is a statute of repose, not a statute of limitations. Some states allow rescission in recoupment beyond the TILA’s three-year extension period. See, Fidler v. Cent. Coop.
Bank, 336 B.R. 734 (Bankr. D. Mass. 1998)

TILA §1635(b) provides a three-step rescission process:

1. The debtor must first give notice of the rescission. By invoking rescission, the debtor is relieved of liability for any finance or other charge, and the security interest becomes void.

2. The creditor must return any money paid or property given, including the down payment.

3. The debtor must tender any property received or the value of it.

Courts have considerable discretion concerning the three-step process, and are able to circumvent the process if they see fit. See, Williams v. BankOne, N.A. (In re Williams), 291 B.R. 636 (Bankr. E.D. Pa. 2003); Bell v. Parkway Mortgage, Inc. (In re Bell), 309 B.R. 139, 167 (Bankr. E.D. Pa. 2004).

In the event a court requires that the principal debt be repaid in Chapter 13 bankruptcy, the rescinding borrower/debtor still receives a considerable benefit. In this case, the creditor must reduce the obligation by the amount the borrower has paid through any down payment, closing costs, insurance premiums and by the amount of the finance charges. The obligation to repay only the principal over the life of a Chapter 13 plan is an unsecured claim.

TILA § 1640(a) provides for damage actions for violations of its requirements. In an individual action relating to a closed-end credit transaction secured by real estate or a dwelling, statutory damages of not less than $200 and not greater than $2000 are recoverable. Damages can also be recovered where rescission is available. In cases
dealing with personal property loans, although rescission is not available, the statutory damages are twice the finance charge, with a minimum of $100 and a maximum of $1000. See, Koons Buick Pontiac GMC, Inc. v. Nigh, 125 S. Ct. 460 (2004).

TILA § 1640(e) actions for actual and statutory damages are subject to a one year statute of limitations, measured from the occurrence of the violation. This section also states it, “does not bar a person from asserting a violation of this title in an action to collect the debt which was brought more than one year from the date of the occurrence of the violation as a matter of defense by recoupment or set-off in such
action, except as otherwise provided by State Law.”

Courts recognize that debtors in bankruptcy can assert damages in recoupment by objecting to a creditor’s proof of claim. See, In re Coxson, 43 F.3d 189 (5th Cir. 1995); Roberson v. Cityscape Corp., 262 B.R. 312 (Bankr. E.D. Pa. 2001). Unlike the three-year right of rescission, the statute of limitations for TILA damage actions can be equitably tolled. Fraudulent concealment of a TILA violation is a basis for tolling the
one-year statute of limitations, however, mere failure to make disclosures is not enough. The consumer must prove the creditor concealed the violation and that the consumer exercised due diligence to discover the facts giving rise to the claim. See, Evans v. Rudy-Luther Toyota, Inc., 39 F. Supp. 2d 1177 (D. Minn. 1999).

The Truth in Lending Act requires disclosure of credit terms, applies to most extensions of consumer credit and frequently apply to restructured loans that meet the definition of a refinancing under the Act and Regulation Z. The Truth in Lending Act offers actual damages, statutory damages for some violations, and attorney’s fees. For second mortgage, home equity loans, and some other transactions secured by home,
rescission may be available.

– Citation: 15 U.S.C. §1601, et seq.
12 C.F.R- Part 226 (Regulation Z)

– Liable Parties: Creditor (generally the original lender) Assignee, if violation “apparent on face” of documents

– Actionable Wrongs: Failure to disclose credit information or cancellation
rights

– Remedies: Rescission, unless transaction was for purchase or
construction of home, Actual damages, Statutory damages up to $2,000 (SEE UPDATE PER SUPPLEMENT), Attorney fees

– Limitations: 1 year to rescind under TILA, though limit does not apply to recoupment under state law
1 year to bring damages claim
3 year limitation if used defensively by way of recoupment,
unless effectively brought as a DUTPA claim

Matthews v. New Century Mortgage Corp., 185 F. Supp. 2d 874 (S.D. OH 2002). (An opinion which includes the facts and claims for a typical predatory lending case involving elderly homeowners. Claims include descriptions of TILA, HOEPA, Equitable Tolling, FHA, ECOA, Conspiracy, Fraud, Unconscionability, and Ohio’s Rico Statute.)

Anderson v. Frye, 2007 U.S. Dist. LEXIS 20935. Plaintiff must show each of the following: (1) that she is a member of a protected class; (2) that she applied for and was qualified for loans; (3) that the loans were given on grossly unfavorable terms; and (4) that the lender continues to provide loans to other applicants with similar qualifications,
but on significantly more favorable terms. Citing Matthews,.

In re Nat’l Century Fin. Enters., Inv. Litig., Fed. Sec. L. Rep. (CCH) P94,314 (May 2007) “[W]hile Plaintiff is required to prove the existence of some unlawful act independent of the civil conspiracy itself, that unlawful act does not need to be committed by each of the alleged co-conspirators.” Citing Matthews,.

Regulation Z Sec. 226.20 Subsequent disclosure requirements

(a) Refinancings. A refinancing occurs when an existing obligation that was subject to this subpart is satisfied and replaced by a new obligation undertaken by the same consumer. A refinancing is a new transaction requiring new disclosures to the consumer. The new finance charge shall include any unearned portion of the old finance charge that is not credited to the existing obligation. The following shall not be treated as a refinancing:

(1) A renewal of a single payment obligation with no change in the original terms.

(2) A reduction in the annual percentage rate with a corresponding change in the payment schedule.

(3) An agreement involving a court proceeding.

(4) A change in the payment schedule or a change in collateral requirements as a result of the consumer’s default or delinquency, unless the rate is increased, or the new amount financed exceeds the unpaid balance plus earned finance charge and premiums for continuation of insurance of the types described in Sec. 226.4(d).

(5) The renewal of optional insurance purchased by the consumer and added to an existing transaction, if disclosures relating to the initial purchase were provided as required by this subpart.

Commentary to Section 226.20 Subsequent Disclosure Requirements

Paragraph 20(a) Refinancings.

1. Definition. A refinancing is a new transaction requiring a complete new set of disclosures. Whether a refinancing has occurred is determined by reference to whether the original obligation has been satisfied or extinguished and replaced by a new obligation, based on the parties’ contract and applicable law. The refinancing may involve the consolidation of several existing obligations, disbursement of new money to
the consumer or on the consumer’s behalf, or the rescheduling of payments under an existing obligation. In any form, the new obligation must completely replace the prior one.

– Changes in the terms of an existing obligation, such as the deferral of individual installments, will not constitute a refinancing unless accomplished by the cancellation of that obligation and the substitution of a new obligation.

– A substitution of agreements that meets the refinancing definition will require new disclosures, even if the substitution does not substantially alter the prior credit terms.

1. Annual percentage rate reduction. A reduction in the annual percentage rate with a corresponding change in the payment schedule is not a refinancing. If the annual percentage rate is subsequently increased (even though it remains below its original level) and the increase is effected in such a way that the old obligation is satisfied and
replaced, new disclosures must then be made.

2. Corresponding change. A corresponding change in the payment schedule to implement a lower annual percentage rate would be a shortening of the maturity, or a reduction in the payment amount or the number of payments of an obligation. The exception in §226.20(a)(2) does not apply if the maturity is lengthened, or if the payment
amount or number of payments is increased beyond that remaining on the existing transaction.

Court agreements. This exception includes, for example, agreements such as reaffirmations of debts discharged in bankruptcy, settlement agreements, and post judgment agreements. (See the commentary to §226.2(a)(14) for a discussion of court approved agreements that are not considered “credit.”)

Workout agreements. A workout agreement is not a refinancing unless the annual percentage rate is increased or additional credit is advanced beyond amounts already accrued plus insurance premiums.

Insurance renewal. The renewal of optional insurance added to an existing credit transaction is not a refinancing, assuming that appropriate Truth in Lending disclosures were provided for the initial purchase of the insurance.

This regulation limits refinancing to transactions in which the entire original obligation is extinguished and replaced by a new one. Redisclosure is no longer required for deferrals or extensions.

When Homeowner’s good faith attempts to amicably work with the Bank in order to resolve the issue fails;

Home owners should wake up TODAY! before it’s too late by mustering enough courage for “Pro Se” Litigation (Self Representation – Do it Yourself) against the Lender – for Mortgage Fraud and other State and Federal law violations using foreclosure defense package found at http://www.fightforeclosure.net “Pro Se” litigation will allow Homeowners to preserved their home equity, saves Attorneys fees by doing it “Pro Se” and pursuing a litigation for Mortgage Fraud, Quiet Title and Slander of Title; among other causes of action. This option allow the homeowner to stay in their home for 3-5 years for FREE without making a red cent in mortgage payment, until the “Pretender Lender” loses a fortune in litigation costs to high priced Attorneys which will force the “Pretender Lender” to early settlement in order to modify the loan; reducing principal and interest in order to arrive at a decent figure of the monthly amount the struggling homeowner could afford to pay.

What Every Homeowner Should Know About Fair Debt Collection Practices Act (FDCPA)

11 Wednesday Jun 2014

Posted by BNG in Case Laws, Case Study, Federal Court, Foreclosure Defense, Judicial States, Mortgage Laws, Non-Judicial States, Your Legal Rights

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The Fair Debt Collection Practices Act (FDCPA) provides two ways to stop a
debt collector from calling a consumer:

1. If the consumer notifies the debt collector in writing that the consumer refuses to pay the debt or that the consumer wishes the collector to stop calling, the collector must cease calling after one final communication. 15 USC § 1692c(c).

2. If a debt collector knows that the consumer is represented by an attorney and knows or can readily ascertain the attorney’s name and address, the debt collector may not communicate with the consumer unless the attorney fails to respond to communications within a reasonable time. § 1692c(a)(2).

The FDCPA cannot be used to stop direct collections from creditors because it is applicable only to third-party debt collectors.

The FDCPA does not apply to creditors collecting debts on their own behalf, except if they use a name other than their own to do so. “Debt collector” is defined in §1692a(6) as a person who is “collecting on behalf of another” and who “regularly” collects or attempts to collect debts. Lawyers often come under this definition of debt collector. The Supreme Court in Heintz v. Jenkins, 514 U.S. 291 (1995), held that an attorney who regularly uses litigation to collect consumer debts on behalf of a client is a debt collector, subject to the FDCPA. Therefore, lawyers who bring suits on behalf of clients against consumers, seeking payment of debts, need to adopt practices that comply with the FDCPA and this includes “appearance” attorneys.

Section 1692g requires that a debt collector send a written “validation” notice along with the debt collector’s initial communication to the consumer. The notice must contain the following:

– the amount of the debt;
– the name of the creditor;
– a statement that unless the consumer disputes the validity
of the debt within 30 days of receipt of the notice it will be
assumed to be valid, and
– information that verification of the debt will be obtained if
the consumer disputes it.

Debt collectors must convey the validation notice in a legible manner that will be noticed.

Any debt collector that fails to comply with any FDCPA provisions is liable to the consumer for any actual damages and for up to $1000 in statutory damages. 15 U.S.C. § 1692k(a)(1)-(2). The consumer may recover the costs of the action and a reasonable attorney’s fee as determined by the court. Actual damages include compensation for emotional distress. State law requirements for recovery of negligent or intentional infliction of emotional distress are inapplicable. See Maxwell v. Fairbanks Capital Corp., 281 B.R. 101 at 118 (noting that the appropriate standard for judging unfairness of debt collection practices is from the perspective of “the least sophisticated debtor,” suggesting that damages for subjectively-experienced emotional distress could be recoverable even if that distress is greater than what an ordinary debtor might experience).

A debt collector is, “any person who uses an instrument of interstate
commerce or mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.” 15 U.S.C. § 1692a(6). Repossession and the sale of personal property is not a debt collection activity under the FDCPA. Likewise, with respect to non-judicial foreclosure of security interests in houses. See, Bergs v. Hoover, Bax & Slovacek, LLP, 2003 U.S. Dist. LEXIS 16827, at 1 (N.D. Tex. Sept. 24, 2003); Beadle v. Haughey, 2005 WL 300060, 4 (D.N.H. Feb. 9, 2005) It is not clear whether foreclosing on a mortgage constitutes debt collecting activity under the FDCPA. Id. at 4. However, the most recent case to discuss whether proceeding in rem is debt collecting and subject to the FDCPA seems to suggest it is.
Piper v. Portnoff Law Assocs., Ltd., 396 F.3d 227 (3d Cir. 2005). In Piper, the law firm subjected itself to the FDCPA by attempting to collect a personal liability and requesting payment to be made directly to the firm instead of to the city. Accordingly, the court stated that “the issue for decision is whether PLA’s communications to Piper were communications by a ‘debt collector’ with a ‘consumer’ in ‘connection with the collection
of a [debt].’” Id. at 232.

The Seventh Circuit determined that a loan servicer was not a debt collector under the FDCPA because it was seeking payment currently due under a superseding agreement. Bailey v. Security Nat’l Servicing Corp., 154 F.3d 384 (7th Cir. 1998).

When Homeowners good faith attempts to amicably work with the Bank in order to resolve the issue fails;

Home owners should wake up TODAY! before it’s too late by mustering enough courage for “Pro Se” Litigation (Self Representation – Do it Yourself) against the Lender – for Mortgage Fraud and other State and Federal law violations using foreclosure defense package found at http://www.fightforeclosure.net “Pro Se” litigation will allow Homeowners to preserved their home equity, saves Attorneys fees by doing it “Pro Se” and pursuing a litigation for Mortgage Fraud, Quiet Title and Slander of Title; among other causes of action. This option allow the homeowner to stay in their home for 3-5 years for FREE without making a red cent in mortgage payment, until the “Pretender Lender” loses a fortune in litigation costs to high priced Attorneys which will force the “Pretender Lender” to early settlement in order to modify the loan; reducing principal and interest in order to arrive at a decent figure of the monthly amount the struggling homeowner could afford to pay.

How Homeowners Can Effectively Use RESPA in their Foreclosure Defense

11 Wednesday Jun 2014

Posted by BNG in Affirmative Defenses, Banks and Lenders, Federal Court, Foreclosure Defense, Judicial States, Non-Judicial States, RESPA, Your Legal Rights

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It is important for every homeowner to use the RESPA provisions in their foreclosure defense.

Most Homeowners often wonder what is RESPA. This post is designed to enlighten homeowners as to what RESPA is and how the provisions of RESPA can help them in the foreclosure fight.

So What is RESPA!

Real Estate Settlement Procedures Act (RESPA)

1. RESPA initially applied to loans subject to a first lien on residential property of one to four units. In 1992, it was amended to apply to subordinate loans on such property as well. The implementing regulations are contained in Regulation X, 24 C.F.R. § 3500, as well as in Regulation Z, 12 C.F.R. § 226.19.

2. RESPA requires good faith estimates of Truth In Lending Act disclosures before consummation or within three business days after the creditor receives the consumer’s written application, whichever occurs earlier. Re-disclosure is required no later than consummation or settlement. According to § 226.19(b), when dealing with variable-rate loans a booklet on adjustable rate mortgages must be provided along with other detailed disclosures specified in the regulations.

3. RESPA prohibits mortgage transaction servicers from giving and creditors from accepting “any portion, split or percentage” of any charge made or received for settlement services “other than for services actually performed. 12 U.S.C. § 2607(b). High and unearned fees that are not actionable under RESPA, are still subject to challenge as unconscionable and that it is an unfair and deceptive practice to represent a charge as for a specific purpose, when the actual cost of that item is much less.

4. RESPA also requires servicers of covered mortgages to respond to written requests from the borrower or the borrower’s agent for information or disputes concerning the servicing of the loan, and to either make appropriate corrections or, after investigation, explain why the account is correct. Failure to comply with the response requirements gives rise to liability for actual damages, statutory damages up to $1000 in case of a pattern or practice of noncompliance and attorneys’ fees and costs, with special class action provisions.

5. The provisions of RESPA which deal with mortgage servicing are generally found in either 12 U.S.C. § 2605 or § 2609. Section 2605, known as the “Servicer Act,” requires servicers to respond to borrower requests for information and to correct account errors (referred to as “qualified written requests”), § 2605(e); disclose information relating to the transfer of servicing operations, §§ 2605(a) and (b); and make timely payments out of escrow accounts. § 2605(g); Section 2609 deals
exclusively with escrow accounts and limits the amount servicers can demand to be deposited in an escrow account and requires an escrow analysis be conducted to determine the proper escrow payment. § 2609(a); It also requires servicers to provide an annual escrow statement § 2609(c) and a notice of escrow shortages or deficiencies.
§ 2609(b)

6. There is one requirement imposed by § 2605 that does not apply if the borrower is behind on payments. Section 2505(g) requires a servicer to make payments from an escrow account for taxes, insurance and other charges “in a timely manner as such payments become due.” As long as the borrower’s mortgage payment is not more than thirty days late, the servicer must pay escrow items such as taxes and insurance in a timely manner even if there are not sufficient funds in the escrow account to cover the items. Reg. X, 24 C.F.R. § 3500.17(k)(2). RESPA creates an express right of action for a servicer’s failure to make payments from an escrow account for taxes, insurance and other charges “in a timely manner as such payments become due.” 12 U.S.C. § 2605(g). Regulation X provides that this obligation to make timely disbursements out of escrow does not apply when the “borrower’s payment is more than 30 days overdue.” Reg. X, 24 C.F.R. § 3500.17(k)(1), (2) The regulation has no explanation of this limitation. It could be interpreted to mean that a servicer has no obligation to timely disburse payments for taxes and insurance or other charges whenever the home owner’s mortgage payment is more than thirty days late at the time the disbursement becomes due, even if there are sufficient funds in the escrow account to cover the disbursement.

7. The regulation should not give an exemption to a servicer who wrongly claimed that the borrower was late with payments at the time the disbursement was required, or if timely payments are being made under a forbearance or repayment agreement. If the exemption does not apply, the servicer must pay escrow items such as taxes and insurance timely even if there are not sufficient funds in the escrow account to cover the
items.[ Reg. X, 24 C.F.R. § 3500.17(k)(2) The application of the regulation denies a servicer an opportunity to force-placed insurance from another carrier in this situation. The servicer is required to pay the insurance premium on the borrower’s policy when due by advancing funds. Any escrow deficiency resulting from the advance is paid by the borrower through an adjustment to future escrow payments following an escrow
account analysis.

It is important for homeowners to know that;

RESPA – provides a private cause of action for violation of its prohibitions against misuse of escrowed funds, kickbacks from companies providing settlement services, and steering borrowers to title insurance companies. Either treble or statutory damages plus attorney’s fees are available for violations. RESPA also requires advance disclosures (Good Faith Estimate), and disclosure at settlement of settlement costs in real estate transactions. While the statute does not create a private cause of
action for disclosure violations, analyzing the disclosures often reveals Truth in Lending and HOEPA violations.

The bankruptcy mentors say that to avoid the Reg X 30-day default exception, an argument can be made that the exception does not apply after confirmation of the plan. The reason is that the confirmation designates the account as reinstated. In re Jones, 2007 WL 1112047 (Bankr.E.D.La. Apr 13, 2007)(plan confirmation “recalibrates” the
amounts due as of the petition date); In re Wines, 239 B.R. 703 (Bankr. D.N.J. 1999) (post-petition mortgage debt treated like a current mortgage and consists of those payments which come due after the bankruptcy petition is filed. Ongoing postpetition payments, including escrow amounts and timely disbursements, should be treated under the terms of the note and mortgage as if no default exist. The Fannie Mae/Freddie Mac Single-Family Uniform Instrument for a mortgage or deed of trust
(Section 3, entitled “Funds for Escrow Items”), requires the servicer to maintain the escrow account in compliance with RESPA. A provision in the plan can require the servicer to comply with the RESPA escrow account requirements during the administration of the plan.

The general RESPA preemption provision provides that state laws are
preempted only to the extent of their inconsistency with RESPA. 12 U.S.C. § 2616. State laws providing greater protections to borrowers than RESPA that are not inconsistent with RESPA are not preempted.

– Citation: 12 U.S.C. §2601, et seq. 24 C.F.R. Part 3500 (Regulation X) 64 Fed. Reg. 10079 (HUD Policy Statement on lender paid broker fees)

– Liable Parties: Lender Broker, if not exclusive agent or lender,
Servicer, Title Company

– Actionable Wrongs: Failure to give Good Faith Estimate; disclose other credit-related information and give HUD-1 Settlement Statement and servicing statements; Payment or acceptance of kickbacks or referral
fees; Making charges for which no identifiable services are provided; Improper servicing of loan.

– Remedies: Three times amount of illegal charges Attorney fees

– Limitations: 1 year to bring an affirmative claim No limit if raised by way of recoupment

Hirsch v. Bank of America, 328 F. 3d 1306 (11th Cir. 2003). (provides a two-part test in analyzing RESPA kickback violations involving a mortgage broker. First, the court must “determine whether the broker has provided goods or services of the kind typically associated with a mortgage transaction.” Then, the court must “determine whether the total compensation paid to the broker is reasonably related to the total value of the goods or services actually provided.”

Recently followed by: Culpepper v. Irwin Mortg. Corp., 20 Fla. L. Weekly Fed. C 824 (11th Cir. Ala. July 2, 2007) (applying two part test)

§ 203.508 Providing information.

(a) Mortgagees shall provide loan information to mortgagors and arrange for individual loan consultation on request. The mortgagee must establish written procedures and controls to assure prompt responses to inquiries.

(c) Within thirty days after the end of each calendar year, the mortgagee shall furnish to the mortgagor a statement of the interest paid, and of the taxes disbursed from the escrow account during the preceding year. At the mortgagor’s request, the mortgagee shall furnish a statement of the escrow account sufficient to enable the mortgagor to reconcile the account.

(d) Mortgagees must respond to HUD requests for information concerning individual accounts.

(e) Each servicer of a mortgage shall deliver to the mortgagor a written notice of any assignment, sale, or transfer of the servicing of the mortgage. The notice must be sent in accordance with the provisions of § 3500.21(e)(1) of this title and shall contain the information required by § 3500.21(e)(2) of this title. Servicers must respond to mortgagor inquiries pertaining to the transfer of servicing in accordance with §3500.21(f) of this title.

§ 203.550 Escrow accounts.
It is the mortgagee’s responsibility to make escrow disbursements before bills become delinquent. Mortgagees must establish controls to insure that bills payable from the escrow fund or the information needed to pay such bills is obtained on a timely basis. Penalties for late payments for items payable from the escrow account must not be charged to the mortgagor unless it can be shown that the penalty was the direct
result of the mortgagor’s error or omission. The mortgagee shall use the procedures set forth in § 3500.17 of this title, implementing Section 10 of the Real Estate Settlement Procedures Act (12 U.S.C. 2609), to compute the amount of the escrow, the methods of collection and accounting, and the payment of the bills for which the money has been escrowed.

In the case of escrow accounts created for purposes of § 203.52 or § 234.64 of this chapter, mortgagees may estimate escrow requirements based on the best information available as to probable payments that will be required to be made from the account on a periodic basis throughout the period during which the account is maintained.

The mortgagee shall not institute foreclosure when the only default of the mortgagor occupant is a present inability to pay a substantial escrow shortage, resulting from an adjustment pursuant to this section, in a lump sum.

When the contract of mortgage insurance is terminated voluntarily or because of prepayment in full, sums in the escrow account to pay the mortgage insurance premiums shall be remitted to HUD with a form approved by the Secretary for reporting the voluntary termination of prepayment. Upon prepayment in full sums held in escrow for taxes and hazard insurance shall be released to the mortgagor promptly.

When Homeowners good faith attempts to amicably work with the Bank in order to resolve the issue fails;

Home owners should wake up TODAY! before it’s too late by mustering enough courage for “Pro Se” Litigation (Self Representation – Do it Yourself) against the Lender – for Mortgage Fraud and other State and Federal law violations using foreclosure defense package found at http://www.fightforeclosure.net “Pro Se” litigation will allow Homeowners to preserved their home equity, saves Attorneys fees by doing it “Pro Se” and pursuing a litigation for Mortgage Fraud, Quiet Title and Slander of Title; among other causes of action. This option allow the homeowner to stay in their home for 3-5 years for FREE without making a red cent in mortgage payment, until the “Pretender Lender” loses a fortune in litigation costs to high priced Attorneys which will force the “Pretender Lender” to early settlement in order to modify the loan; reducing principal and interest in order to arrive at a decent figure of the monthly amount the struggling homeowner could afford to pay.

How Homeowners Can Use Available Options to Save their Homes

10 Tuesday Jun 2014

Posted by BNG in Bankruptcy, Federal Court, Foreclosure Crisis, Foreclosure Defense, Judicial States, Loan Modification, MERS, Non-Judicial States, Pro Se Litigation, State Court, Your Legal Rights

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Each state has its own foreclosure laws covering the notices the lender must post publicly and/or with the homeowner, the homeowner’s options for bringing the loan current and avoiding foreclosure, and the process for selling the property. In 22 states – including Florida, Illinois and New York – judicial foreclosure is the norm, meaning the lender must go through the courts to get permission to foreclose by proving the borrower is delinquent.

If the foreclosure is approved, the local sheriff auctions the property to the highest bidder to try to recoup what the bank is owed, or the bank becomes the owner and sells the property through the traditional route to recoup its loss. The entire judicial foreclosure process, from the borrower’s first missed payment through the lender’s sale of the home, usually takes 480 to 700 days, according to the Mortgage Bankers Association of America.

The other 28 states – including Arizona, California, Georgia and Texas – primarily use non-judicial foreclosure, also called power of sale, which tends to be faster and does not go through the courts unless the homeowner sues the lender. In some cases, to avoid foreclosing on a home, lenders will make adjustments to the borrower’s repayment schedule so that he/she can afford the payments and thus retain ownership. This situation is known as a special forbearance or mortgage modification.

What Options are available for Homeowners?

1. Reach out to the lender and explain your situation.

If you think you’ll be at risk for missing a monthly payment or possibly several, putting you at risk of foreclosure, reach out to your lender immediately. Don’t sweep the problem under the rug. As weird as it may sound, it’s in the lender’s best interest not to foreclose on you, as it costs close to $30,000 by some estimatesfor the lender to foreclose. That’s time, hassle, and money down the drain for the lender; they want to avoid foreclosure if at all possible. Talking to your lender will start a dialogue in which both parties can talk about possible solutions before foreclosure becomes the only option.

– Let the lender know if your problems are temporary. If you’ve incurred unexpected medical bills or have been laid off, for example, the lender is more likely to give you a reprieve until you’ve got your head above water. They might ask you to make a payment in one lump sum, or even freeze your monthly payments if you’re lucky.

2. Try to modify the loan in your dialogue with the lender.

As far as the lender is concerned, 50% of something is better than 100% of nothing. That means they’ll often be willing to modify the terms of your loan to get you paying something, even if it’s not the original monthly amount.

Try to extend the amortization period. Amortization period is a fancy word for the life of the loan. If you make the life of the loan longer, your monthly payment will go down.
Change the interest rate. The interest rate of your loan is determined by your credit rating, as well as other factors. Suffice it to know that it can be lowered in order to make monthly payments more manageable.
Switch from an adjustable rate to a fixed rate. Adjustable rate mortgages (ARMs) usually start off with a pretty low interest rate and then shoot up over the life of the loan. They look nice to start off with but they actually end up being pretty expensive. Switching from an ARM to a fixed rate — where the interest rate stays the same for each monthly payment — can save you a lot of money as well as make the monthly payment much more manageable.

3. Ask for forbearance.

Asking for forbearance is a temporary way to stall the foreclosure proceeding, but it works in a lot of instances. Forbearance allows you to either pay partial payments or no mortgage payments for a specified time agreed upon by you and the lender. You must, however, eventually pay the full amount forbore. You may agree to one lump sum payment to catch up on your mortgage or make extra payments in addition to your monthly mortgage payments.

4. Consider hiring a housing counselor.

A housing counselor will work on your behalf to get your finances back on track and find a compromise between you and the lender so that foreclosure can be avoided. A good quality counselor will usually be a good investment, especially if they help you hold onto your house.

Be weary of those housing counselors who “guarantee” a stall or stop in the foreclosure process. These counselors often charge exorbitant sums (think thousands of dollars) and sometimes only stall the proceedings, leaving you no better off than you were to begin with. Visit the Department of Housing and Urban Development’s website to see a full list of approved housing counselors.

5. If you do decide to fight the foreclosure, file a written answer to the foreclosure complaint.

Some of those well written response and other pleadings can be found at http://www.fightforeclosure.net foreclosure defense package. Filing an answer and attending the hearing stops the lender or county from obtaining a default judgment against you. Research the defenses to foreclosure — these are the reasons why the mortgage lender or county shouldn’t win, and they are listed below. A more comprehensive Guide to the fight and well structured foreclosure defense tools can be found in the package.

Select the defense to foreclosure that fits your circumstances.
Write an answer, including your defense to the foreclosure.
Submit the written answer to the county court where the lender or municipality filed the foreclosure complaint.

Foreclosure Defense Package at http://www.fightforeclosure.net will help Homeowners in the following ways.

Homeowners should consider the following options to either retain their homes or secure the equity.

1. Make the lender “produce the note.”

When you sign a mortgage document, there’s a promissory note that lenders are supposed to keep that details all the specifics of the loan agreement. During the housing boom, unscrupulous lenders underwrote so many loan documents and filed them away or sold them off, content simply to know they had made money. Now, many of the documents cannot be found, partly because they were sent off when the mortgage was securitized. The short story is this: if the lender cannot find the note, foreclosure can effectively be postponed, if not stopped completely.

– Making the lender “produce the note” can be effective, especially if the lender used less-than-savory means of getting you to agree to the loan, but it’s not a long term strategy for success. You can buy a lot of time if the lender can’t produce the note, but in most cases you won’t be able to stop foreclosure once the note is found.

2. Consider selling the house before the house is auctioned off.

If you can manage to sell the house before the foreclosure of your home actually clears, you can keep whatever equity you still have invested in the home. It may be hard to sell your home on such a quick turnaround, but it’s definitely possible, especially with the market heating up.

3. Question the chain of title.

Homeowners can effectively question the chain of title to their properties using the information at http://www.fightforeclosure.net

When a property is about to be foreclosed on, a database attempts to make sure that the ownership of the mortgage — from the time you signed the papers up to the present moment — is clear and unambiguous. This way, the courts can recognize the legality of the foreclosure. Because so many mortgages were bundled into complex securities and traded on the marketplace, the chain of title is often not clear and unambiguous. If you can successfully question the database that keeps track of the chain of title, you may be able to keep your home.

– The database that keeps of the chain of title is called the Mortgage Electronic Registration System, or MERS. It was established specifically in order to track the chain of title, a tall task given the rate at which many mortgages were being securitized and then traded. But some courts are skeptical of MERS’s legitimacy. One popular foreclosure defense rests on forcing the lender to independently verify the chain of title without using MERS.

– In order to save your home from foreclosure using the chain of title defense, you’re probably going to need a lawyer. This may be a bit more expensive than some of the other options, but it’s a defense that’s quickly gaining traction.

4. Negotiate a deed in lieu of foreclosure. If you have little other option, you can always ask the lender’s loss mitigation department if they’re willing to accept a deed in lieu of foreclosure. This is a document where you legally agree to transfer ownership of the deed over to the lender in exchange for the ability to walk away owing nothing to the lender. If you don’t think you’ll be able to hold onto your house, this option can be especially attractive if you owe a significant amount on monthly payments in arrears.

To Effectively Negotiate a Deed in Lieu of Foreclosure, homeowners needs to be aware of the following.

A deed in lieu of foreclosure is a foreclosure prevention process that can be used when you are upside down on your mortgage and cannot afford to keep your home. You simply sign a deed transferring ownership of your home back to your mortgage lender in exchange for walking away owing them nothing on your mortgage balance. The deed in lieu is a mechanism used to avoid foreclosure that saves you and your lender the time and costs of having to go through a formal foreclosure process. It benefits you and your lender by saving on court and legal fees. It can also save your credit if negotiated properly.

a. Call your lender’s loss mitigation department and tell them you are experiencing a financial hardship and can no longer afford to keep your home.

b. Ask if they will accept a deed in lieu of foreclosure.

c. Find out what other foreclosure prevention options you qualify for from your lender’s loss mitigation department and also by contacting a HUD Certified Counseling Agency or a real estate foreclosure defense attorney.

d. Download your lender’s deed in lieu of foreclosure forms, complete them and submit them to the lender with a hardship letter and any financial information they require.

e. Negotiate that the deed in lieu satisfies your mortgage balance and that the lender will not come after you later for a for the outstanding mortgage balance.

f. Request and negotiate with the lender that they report the transaction to the three credit bureaus as paid settlement or satisfied and ask them to remove any prior negative reporting from your credit report. Otherwise, they will report it as a foreclosure or deed in lieu of foreclosure, which stays on your credit for 7 years and lowers your credit score.

g. Sign the deed in lieu of foreclosure back over to the lender. Hand them the keys to your home and walk away owing nothing.

Bankruptcy as a last Option.

Bankruptcy is the process of eliminating some of all of your debts in exchange for either regular payments or a seizing of your property. Although it may not seem like an enviable option, it’s the smartest way out of an underwater mortgage for many homeowners. When you file for bankruptcy, the foreclosure proceedings can be stopped with an automatic stay.

Qualify for bankruptcy. In order to qualify, you have to complete a means test, pre-bankruptcy credit counseling, as well as acquire the correct paperwork such as tax documents.

1. Decide between filing chapter 7 and chapter 13 bankruptcy.

There are essentially two different kinds of bankruptcy declarations, each with their own unique rules and specifications. As they relate to stopping a foreclosure, they are briefly described below:

– In chapter 7 bankruptcy, you ask to have most, if not all, or your debts discharged by the courts. In exchange for this discharge, the courts can take any property not exempt from collection, sell it, and distribute the proceeds to your creditors. With chapter 7, you won’t be able to keep your house, but you will be able to stall the foreclosure for at least a couple of months.

– In chapter 13 bankruptcy, you agree to a plan to pay back all or most of your debts over a certain period of time. The time you have to repay the debt, as well as the repayment plan itself, depends on how much you earn, as well as the types of debt you currently own. With chapter 13, you should be able to keep your home, especially if you think you’ll be able to make payments in the future. The repayment plan usually lasts three to five years.

2. File your bankruptcy petition with your local U.S. Bankruptcy Court.

Meet with a lawyer and declare your bankruptcy. Start making payments. After a while, attend a meeting of the creditors. This is a meeting between you and a bankruptcy trustee. However, your creditors may also attend. This meeting will give you a better sense of where foreclosure proceedings are at.

With that said, homeowners should also be aware of What Not to do in Foreclosure

a. Do not sign the title of the property over to another company.

Some companies lure desperate families into a trap by promising to get the mortgage current and then re-sign the mortgage back over to you. Yet this rarely happens. More often than not, the company pulls equity out of the home, lets foreclosure proceedings continue, and dumps the home like a bag of wet peanuts. Worst of all, there’s nothing you can do because the title of the property is no longer in your name.

b. Do not seek counseling from a non-HUD approved organization.

Seeking counseling is an important tool for many homeowners fighting to keep control of their home. Yet many sharks take advantage of people by demanding steep up-front fees and interest rate hikes after the dust has settled. Be sure to vet any counseling service you use on HUD’s list of approved housing counselors.

c. Do not avoid court documents or requests.

Although out of sight, out of mind may be a decent coping strategy for some of life’s problems, it’s generally not a good way to hang on to a house. Promptly honor any requests that come from either the court or lender, as failure to do so may result in hefty fees and even legal trouble.

When Homeowners good faith attempts to amicably work with the Bank in order to resolve the issue fails;

Home owners should wake up TODAY! before it’s too late by mustering enough courage for “Pro Se” Litigation (Self Representation – Do it Yourself) against the Lender – for Mortgage Fraud and other State and Federal law violations using foreclosure defense package found at http://www.fightforeclosure.net “Pro Se” litigation will allow Homeowners to preserved their home equity, saves Attorneys fees by doing it “Pro Se” and pursuing a litigation for Mortgage Fraud, Quiet Title and Slander of Title; among other causes of action. This option allow the homeowner to stay in their home for 3-5 years for FREE without making a red cent in mortgage payment, until the “Pretender Lender” loses a fortune in litigation costs to high priced Attorneys which will force the “Pretender Lender” to early settlement in order to modify the loan; reducing principal and interest in order to arrive at a decent figure of the monthly amount the struggling homeowner could afford to pay.

How Homeowners in ‘Pro Se” Litigation Can Effectively Prepare Their Discovery Requests

02 Monday Jun 2014

Posted by BNG in Discovery Strategies, Fed, Federal Court, Foreclosure Defense, Judicial States, Litigation Strategies, Non-Judicial States, Pro Se Litigation, State Court, Trial Strategies, Your Legal Rights

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There are certain rules of Discovery every litigant must follow when in a lawsuit.

After a lawsuit is filed, each side is permitted to obtain information and documents from the other side. This process is referred to as discovery.

There are several methods of obtaining information – tools in the discovery tool belt. The methods covered in this book are those that are the least costly and easiest to employ: Interrogatories, Requests for Admissions, and Requests for the Production of Documents. Discovery enables you to get damaging information directly from the bank! Serving the lender with discovery. A defendant may usually commence discovery as soon as he or she has been served the complaint (the written document containing information about the lawsuit).

Sometimes, as is the case in federal court, there are mandatory disclosures that must be provided by each side without being asked. See Federal Civil Rule 26 for more information about mandatory disclosures if your foreclosure is in federal court.

Interrogatories are simply questions asked of the other party. For example, an interrogatory might say, “State the date and amount of each and every payment received by the plaintiff in payment of the mortgage or note since May 1, 2005.” They can be questions, or directed statements, such as this one is, telling the other side to provide specific written information you seek.

Usually, interrogatories are preceded by a list of definitions so the other side is clear on what you mean when you use a particular term. For example, in the suggested definitions following this chapter, “identify” has a very specific (and extensive) definition. These are usually used so the other side’s attorney can’t avoid answering the question based on a limited definition.

One of the most important things to remember about interrogatories is that they are generally limited in how many can be asked. In the Federal Rules of Civil Procedure, each party is limited to asking just 25 interrogatories, and they can only be directed to parties.

A party is someone or some organization who is suing or being sued in a lawsuit.

This means interrogatories can’t be served on the mortgage broker who took the borrower’s loan application unless he or she is first brought into the lawsuit as a party (accomplished by filing a third party complaint). Federal Rule 33 governs interrogatories in federal court. Look at your state’s rules for a heading called “Interrogatories.”

Many chapters will have a section that suggests some interrogatories based on that particular defense. This assumes you will be using the model interrogatory form, and adding in the suggested interrogatories as paragraphs where indicated.

Here are some general rules to follow with respect to interrogatories:

· Leave several spaces below each interrogatory for an answer.
· Some courts require the interrogatory form be provided on diskette or CD to the other party, so the other party can type in the answers and return it to you.
· You must mail a copy of your interrogatories to every other party in the lawsuit (everyone suing or being sued), even if the questions are only directed to the bank.
· You will usually need to mail a copy of the interrogatories to the court, to be filed with the case. (Read your state’s rule on interrogatories.)

Requests for Admissions.

Requests for admissions are simple statements that requires the other party to either admit or deny the true of the statement.

A request for admission to the lender might be, “Admit on May 5, 2006, plaintiff purchased the mortgage from ABC Corporation.”

The lender would then respond in writing with a simple “Admit” or “Deny.” If the lender objects to the request, it may state something similar to, “Plaintiff objects to this request for admission because….”

It may state it doesn’t have sufficient information to form a belief, or refuse to answer on other grounds.

The purpose of requests for admissions is that they narrow the scope of what is contested for trial. If the parties can admit that certain facts are true, then these facts do not generally need to be litigated later. These must be presented in a manner where the other side can either admit or deny each.

If you seek to ask questions with open ended responses, then using interrogatories or depositions might be more useful.

Depositions are beyond the scope of this book, but well-crafted interrogatories might get you the information you seek. In federal court,
like interrogatories, they can only be served on parties.

One of the most important facts to remember about requests for admissions is that in many states, failing to respond to requests within the time limit (30 days in federal court) is equivalent to admitting the statement’s truthfulness.

Be very careful if you are served with requests for admissions so your failure to respond doesn’t equate to admitting each!
Do not be late filing your responses, or you may find them deemed admitted.

Many chapters will have a section that suggests some requests based on that particular chapter. This assumes you will be using the model request for admission form, and adding in the suggested requests as paragraphs where indicated.

Here are some general rules to follow with respect to requests for admissions:

· Leave a couple of spaces below each for an answer.
· Some courts require the requests be provided on diskette or CD to the other party.
· You must mail a copy of your requests to every other party in the lawsuit (everyone suing or being sued), even if the questions are only directed to the bank. · You usually must mail a copy of the requests to the court, to be filed with the case.

Requests for the Production of Documents.

Requests for the production of documents or other tangibles (like records) are a right afforded to litigants during a lawsuit. You may ask the lender in a formal document to produce the original mortgage and note, as well as any other physical thing that relates to the lawsuit. Federal Rule 34 governs these requests.
It would be wise to get copy of the closing documents from the title company, lender, broker, real estate agent, and whoever else is involved in the transaction that may have copies.
You may also want obtain copy of the invoice and appraisal via subpoena to ensure the amount showing on the settlement statement is correct. If the party you want information from is not a party to the lawsuit, you may have to subpoena them for the information.

When you have been served with this type of discovery by the lender, you will not mail a packet of documents court (again, do not mail documents in response to this type of discovery request to the court), although the court may want you to file a Notice that you did, in fact, respond. You will only send the packet of documents to the party requesting that you produce documents.

Getting served with discovery.

Be very mindful that failing to respond to discovery within the time period prescribed by the rules can get you into deep trouble. Answering untruthfully can also get a party into trouble, opening up them to sanctions or attorneys fees and costs for trying to avoid a bona fide question.

Discovery Cut-Off.

In some areas, the court may set a date as the cut-off for discovery. That means you must complete your discovery requests to other parties by this deadline. If the court sets a deadline, it will be included within the cover page of the lawsuit, or a notice will be mailed to you directly.

Home owners should wake up TODAY! before it’s too late by mustering enough courage for “Pro Se” Litigation (Self Representation – Do it Yourself) against the Lender – for Mortgage Fraud and other State and Federal law violations using foreclosure defense package found at http://www.fightforeclosure.net “Pro Se” litigation will allow Homeowners to preserved their home equity, saves Attorneys fees by doing it “Pro Se” and pursuing a litigation for Mortgage Fraud, Quiet Title and Slander of Title; among other causes of action. This option allow the homeowner to stay in their home for 3-5 years for FREE without making a red cent in mortgage payment, until the “Pretender Lender” loses a fortune in litigation costs to high priced Attorneys which will force the “Pretender Lender” to early settlement in order to modify the loan; reducing principal and interest in order to arrive at a decent figure of the monthly amount the struggling homeowner could afford to pay.

FightForeclosure.net

~ Your "Pro Se" Foreclosure Fight Solution!

Category Archives: Non-Judicial States

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How Bankruptcy Can Help Protect Homeowner’s Assets

What Borrowers Must Know About How the “Pretender Lenders” Steal Your Home!

How Homeowners Can Effectively Benefit from Foreclosure Defense

Foreclosure Defense and Chain of Title

Promissory Notes are Key to Foreclosure Defense

In their most egregious attempts to remedy these glaring omissions, some banks have actually tried to reverse-engineer chains of title, using fraudulent means such as:

Other Foreclosure Defense Strategies

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How Homeowners Can Use Available Options to Save their Homes

How Homeowners in ‘Pro Se” Litigation Can Effectively Prepare Their Discovery Requests

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Foreclosure Defense and Chain of Title

Promissory Notes are Key to Foreclosure Defense

In their most egregious attempts to remedy these glaring omissions, some banks have actually tried to reverse-engineer chains of title, using fraudulent means such as:

Other Foreclosure Defense Strategies

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