FORECLOSURE SELF-HELP SEMINAR PRESENTED BY TROY DOUCET, ESQ REGENT STREET, SUITE 200 COLUMBUS, OH (614)

Transcription

1 FORECLOSURE SELF-HELP SEMINAR PRESENTED BY TROY DOUCET, ESQ REGENT STREET, SUITE 200 COLUMBUS, OH (614)

2 ABOUT TROY DOUCET Foreclosure Defense Attorney located in Columbus, Ohio. Licensed in Ohio s state and federal courts. Former Mortgage Firm Owner. Mortgage Auditor. Author, 23 Legal Defenses to Foreclosure: How to Beat the Bank Creator, ChecklistForeclosure.com Education BA, Economics, The Ohio State University JD, Capital University Law School, Magna Cum Laude

3 SEMINAR OVERVIEW I. The Foreclosure Process Ohio Judicial Sale State Timeline Mediation II. The Deed, Note, and Mortgage Each defined Purpose in Foreclosure III. HAMP -Break- IV. Defenses to Foreclosure How Lawsuits Work 1. Produce the Note 2. Broken Promises During Failed Modifications 3. Truth in Lending Act 4. Defenses Based on Loan Origination & Predatory Lending 5. Ohio s Consumer Sales Practices Act 6. Fair Debt Collection Practices Act 7. Conditions Precedent 8. Securitization V. Forms You Can Use in Court

4 I. THE FORECLOSURE PROCESS Ohio Judicial Sale State Timeline Mediation

5 OHIO JUDICIAL SALE STATE Judicial Sale versus Non-Judicial Sale States. Ownership of property (lien theory) versus lien on it (title theory). Suing in court versus giving notice. Ohio is a judicial sale state. Benefit: Must go through court system. Negative: Can get a deficiency judgment (matter of state law). Two-year statute of limitations on deficiency judgment R.C (but an action to collect before the two years can survive, and debtor can extend period in writing).

6 OHIO FORECLOSURE TIMELINE Stop Making Payments to Eviction: 8 months 2+ years First Days : Getting Behind in Payments 30 Days Before the Lender Files Foreclosure: Servicer Mails Notice of Acceleration 30 Days Later: Lender Files Foreclosure Lawsuit 1-30 Days Later: Service of Process (You get a copy of the lawsuit) 28 Days to Respond Answer, Motion to Dismiss, or Request for Mediation Within 5-30 Days, if You Do Not Request Mediation, Answer, or Move to Dismiss: Motion for Default Judgment The court can immediately render a default judgment decision and issue a decree. If you Answer, then within the next 4-15 months: Litigation, Discovery, and Summary Judgment Motions (Possible Appeals) If Judgment Found Against You, then bank files a praecipe with the Clerk of Court. Within 3 Days: Clerk Delivers it to sheriff During the Next 3 Months: Appraisal, Advertisements, and Sale Date Set Day of Sale: Property sold to highest bidder for at least 2/3 value of the appraisal Bank will probably bid to the amount it claims is owed on the property, other buyers might also bid on it. Sales occur every Friday morning at 9 AM, in Franklin County, Ohio. The property sales information will be available online at Within 30 Days of Sale: Confirmation of Sale is Issued A Confirmation of Sale is issued by the court, which orders a sheriff s deed be prepared and given to the new owner, who will next file a right to file for writ of possession. Can be delayed if mediation sought or other motion filed with the court showing cause. 14 days after confirmation of sale The Sheriff s deed is issued. New owner files for writ of possession. Sheriff will give you 7 14 days to move out of your home this may be extended up to 30 days for hardship. Franklin County, Ohio foreclosure timeline modified from the Franklin County, Ohio s Homeowner Helpline website, located at

7 TO DO LIST ONCE SERVED 1. File a motion for mediation within 28 days of being served. In Franklin County, allows for 120 days to file answer or motion to dismiss. 2. After mediation, within deadline, file motion to dismiss. Or, file your Answer and Counterclaims within the deadline. 3. If you file a motion to dismiss, file your Answer within 14 days of getting the court s response to that motion (unless case is dismissed). 4. If you filed Counterclaims, wait for bank to respond (28 days). 5. Begin Discovery. 6. After discovery, file for summary judgment. 7. Proceed to trial. 8. Post judgment motions, if appropriate. 9. Appeal, if appropriate.

8 MEDIATION Court can require mediation at ANY time. In an action for the foreclosure of a mortgage, the court may at any stage in the action require the mortgagor and the mortgagee to participate in mediation as the court considers appropriate and may include a stipulation that requires the mortgagor and the mortgagee to appear at the mediation in person. R.C Before You Answer Foreclosure Franklin County Courts issued Administrative Order 10-MS filed March 16, It allows for automatic mediation and a 120 day extension to file a responsive pleading.

9 II. THE DEED, NOTE, AND MORTGAGE Each Defined Purpose in Foreclosure

10 DEED The document executed on the day you bought the property, which transfers ownership to you. It is signed by the old owners. Can be titled, Warranty Deed, Quit Claim Deed, Survivorship Deed, or other deed types. Usually 1-2 pages long. Must be notarized correctly. R.C

11 NOTE The document that establishes the loan. Only the people who sign this are obligated to repay the bank s loan. Usually 2-4 pages long. Does not have to be notarized. Usually considered a negotiable instrument under UCC Article 3.

12 MORTGAGE The document that allows the bank to take the home if you stop paying on the terms of the note. It is called a security instrument. Usually 4-20 pages long. Must be notarized correctly. R.C (Post Feb. 1, 2002): The signing shall be acknowledged by the grantor, mortgagor, vendor, or lessor, or by the trustee, before a judge or clerk of a court of record in this state, or a county auditor, county engineer, notary public, or mayor, who shall certify the acknowledgement and subscribe the official s name to the certificate of the acknowledgement.

13 THE DEED, NOTE, AND MORTGAGE PURPOSE IN FORECLOSURE Deed Note The bank won t challenge. You should closely review. Establishes who has ownership in the property, and who should sign the mortgage. The document that establishes the bank s ability to sue you. It is the most important document because it is the document where you promise to pay the bank back money. Mortgage / Deed of Trust The document that gives the bank the ability to take the property if you don t pay what is due under the note. *** the promissory note is the primary evidence of the debt, and that the mortgage on the real estate in question is merely the security for the payment of the note. Washer v. Tontar, 128 Ohio St. 111, 113, 190 N.E. 231 (Ohio 1934). Each owner in the deed MUST have signed the mortgage. Otherwise, they still have an ownership interest in the property and are entitled to (half) the proceeds of the sheriff s sale. Difference between signing dower release only and actually mortgaging interest. R.C , et seq. (Dower Rights).

14 UNDIVIDED INTEREST IN REAL ESTATE Next: HAMP

15 III. HAMP Home Affordable Modification Program

16 HAMP Program to help people modify their mortgages to more affordable terms. Fannie Mae, Freddie Mac, VA, or FHA servicers must follow HAMP. Each of these have slightly differing underwriting criterion. Subprime servicers can decide whether to opt-in to the program. Sometimes hard to determine whether servicer is involved, despite TILA. Can search Fannie and Freddie s websites for ownership; HAMP participators. Servicers give people the runaround even if they participate. k_30.pdf No Private Right of Action!? Jackson v. Ocwen Loan Servicing, No. 2:10-cv MCE-GGH, 2011 U.S. Dist. LEXIS (E.D. Cal. Feb. 8, 2011) (favorable); Wells Fargo v. Meyers, 913 N.Y.S.2d 500 (Sup. Ct. 2010); Faulkner v. OneWest Bank, No. 3:10-cv-12, 2010 U.S. Dist. LEXIS (N.D. W.Va. June 16, 2010) (favorable); Hanson v. Wells Fargo, No. 4:10CV00318, 2010 U.S. Dist. LEXIS (E.D. Ark. Aug. 18, 2010) (favorable); Durmic v. JP Morgan Chase, NO. 10-CV RGS, 2010 U.S. Dist. LEXIS (D. Mass. Nov. 24, 2010) (favorable); Prasad v. BAC Home Loans Servicing LP, NO. 2:10-CV-2343-FCD/KJN, 2010 U.S. Dist. LEXIS (E.D. Cal. Dec. 7, 2010) (unfavorable); Vida v. Onewest Bank, No AC, 2010 U.S. Dist. LEXIS (D. Or. Dec. 13, 2010) (unfavorable); Grill v. BAC Home Loans Servicing, NO. 10-CV FCD/GGH, 2011 U.S. Dist. LEXIS 3771 (E.D. Cal. Jan. 14, 2011) (unfavorable); Brown v. Bank of New York Mellon, No. 1:10-CV- 550, 2011 U.S. Dist. LEXIS 6006 (W.D. Mich. Jan. 21, 2011) (unfavorable); Wigod v. Wells Fargo, No. 10 CV 2348, 2011 U.S. Dist. LEXIS 7314 (N.D. Ill. Jan. 25, 2011) (unfavorable); Bosque v. Wells Fargo, No FDS, 2011 U.S. Dist. LEXIS 8509 (D. Mass. Jan. 26, 2011) (favorable). Sourced by Kent Qian, NHLP (February, 2011).

17 HAMP General Requirements: Primary Residence (1-4 unit), loan before 1/1/2009, hardship, loan limits ($729,750 for a 1 unit as of 3/5/2011). Goal: To decrease your monthly PITI mortgage payment to 31% of your gross income. Earn $1,000 per month x 31% = $310 maximum payment If your PITI is already below 31%, you do not qualify. To obtain the lower payment, servicer must follow the waterfall 1. Capitalization of all accrued interest, escrow advances, servicing costs and expenses. 2. Decrease the interest rate in.125% increments down to 2% If rate needed is lower than market rates, then it will begin adjusting up after 5 years, 1%/Yr to market rate. 3. Extend the term by re-amortizing the loan up to 40 years. Balloon possible if contract or law prohibits 40 year loans. 4. Principal forbearance that is non-interest bearing and non-amortizing. (Balloon payment.) Can not exceed 30% of the unpaid balance. 5. Principal forgiveness. (Not required, unless LTV is over 115%, then must consider.) After Waterfall, servicer evaluates the loan using the NPV Test Do they make more money foreclosing or modifying? See HAMP Handbook starting on page 65.

18 HAMP Other Programs Under HAMP Home Affordable Unemployment Program (UP) A borrower or co-borrower who is unemployed and requests assistance under HAMP must be evaluated for and, if qualified, must receive an UP forbearance plan before the borrower may be considered for HAMP. Servicers are required to offer an UP forbearance plan to a borrower who meets the following HAMP minimum eligibility criteria (HAMP Handbook, Page 98) Home Affordable Foreclosure Alternatives Program (HAFA) Incentives for short sales and Deeds in Lieu of Foreclosure Second Lien Modification Program (2MP) Works in tandem with HAMP, when second lien servicer participates. Possible extinguishment. Home Affordable Foreclosure Alternatives Program (HAFA) Incentives for short sales and Deeds in Lieu of Foreclosure Governmental First and Second HAMP programs for FHA mortgages. Overall, HAMP has not been successful:

19 BREAK Next: Foreclosure Defenses

20 IV. FORECLOSURE DEFENSES How Lawsuits Work 1. Produce the Note 2. Broken Promises during Failed Modifications 3. Truth in Lending Act 4. Defenses Based on Loan Origination & Predatory Lending 5. Ohio s Consumer Sales Practices Act 6. Fair Debt Collection Practices Act 7. Conditions Precedent 8. Securitization

21 HOW LAWSUITS WORK - THE SHELL TO PUT DEFENSES INTO 1. Plaintiff files a Complaint alleging the defendant did something. 2. Defendant must answer the Complaint by filing an Answer that: Answers each paragraph either admitting or denying the allegations in that paragraph of the Complaint. States all defenses and affirmative defenses to the Complaint. Alleges any Counter Claims (lawsuit back at plaintiff). 3. After Answer is Filed, Discovery Begins. Requests for Admissions, Interrogatories, Requests for Production of Documents/Things, and Depositions 4. Then, the parties generally file for Summary Judgment. Party entitled to judgment when they can show there are no genuine issues as to any material fact and that the moving party is entitled to judgment as a matter of law. Civ.R. 56(C). Bank needs affidavits. You can request more time for discovery under Civ.R. 56(F). 5. If No Resolution, then Trial. 6. Then Possible Appeals.

22 FORECLOSURE DEFENSES 1. Produce the Note Think checkbook.

23 FORECLOSURE DEFENSES PRODUCE THE NOTE Plaintiff Must Show Rights to Enforce the Note 1. Physical Possession,* plus 2. Have the note in the holder s name, indorsed to the plaintiff, or indorsed in blank. Think checks in your checkbook. Indorsed means a signature on the note that is made for the purpose of negotiating the note. R.C (A)(1); UCC R.C (A), (T)(1)(a), (b); In re Wells, 407 B.R. at 879; UCC 3-301, UCC 1-201(21) (revised). *Exceptions if lost or stolen, and ownership of the note not necessary.

24 WHAT AN INDORSEMENT LOOKS LIKE A Note can be indorsed on a separate piece of paper (called an allonge) if no room left on note, so long as it is firmly affixed. In re Nash, 49 B.R. 254, 261 (Bankr. D. Ariz. 1985)

25 FORECLOSURE DEFENSES PRODUCE THE NOTE Why It s Important: 1. Holding rights to enforce is critical because the borrower must make payment to this person in order to receive credit for those payments. R.C (A); UCC Civ.R. 17(A) requires that every action "be prosecuted in the name of the real party in interest." First Union Nat'l Bank v. Hufford, 146 Ohio.App.3d 673, 767 N.E.2d 1206, 2001-Ohio-2271 at 13, quoting Civ.R. 17(A). The purpose behind Civil Rule 17 is to enable the defendant to avail himself of evidence and defenses available against the real party in interest, protect the judgment s finality and against another suit brought by the real party in interest. Id.; Ohio Central Railroad System v. Mason Law Fir Co., L.P.A., 182 Ohio App.3d 814, 2009-Ohio-3238 at Civ.R. 12(B)(6) requires the plaintiff state a claim upon which relief can be granted." Add Language to Your Answer: DEMAND FOR EXHIBITION OF THE NOTE Defendant hereby demands, as of the date of this document s filing, for Plaintiff to produce and exhibit the original note for physical inspection, pursuant to R.C (UCC 3-501)

26 FORECLOSURE DEFENSES PRODUCE THE MORTGAGE Mortgage Transfers Plaintiff must also be named in the mortgage or have an Assignment of Mortgage in order to foreclose. Requires notarization formalities. The mortgage gives the plaintiff the right to foreclose on the specific property. Without it, the bank could bring a contract action, but not a foreclosure action. Mortgages do not generally automatically pass with the note. The plaintiff would have to prove every note transfer and show value. Comment on Robo-signers.

27 FORECLOSURE DEFENSES 2. Broken Promises during Failed Modifications

28 FORECLOSURE DEFENSES BROKEN PROMISES Examples: When the servicer promises a permanent modification if you make trial payments (but doesn t deliver after you pay). When the servicer promises a later modification if you just pay the next 8 full payments on time (but then doesn t deliver after you make the 8 payments). When the servicer promises to review your loan for a modification, but loses all 10 copies of the documents you submitted, and forecloses anyway. When the servicer tells you to stop paying so it can qualify you for a loan modification.

29 FORECLOSURE DEFENSES BROKEN PROMISES Payment is a defense to a contract action, as is waiver. Sue for Breach of Contract (Promissory Estoppel). Allege: The servicer s promise to you. That the servicer should have known you would rely on the promise. You did rely on the promise by either making the payments, or taking some other action to meet their request (like borrowing money to make the payments). Injustice would occur if the judge didn t force the servicer to honor its promise to you. Foreclosure is an equitable remedy and their bad faith prohibits them from requesting foreclosure.

30 FORECLOSURE DEFENSES BROKEN PROMISES Throw in Breach of Good Faith and Fair Dealings. Allege: Breach of contract from previous slide State reasons why Servicer acted in bad faith Unreasonable delay Unreasonable denial Denial despite online HAMP qualification Multiple calls and contacts and hold time to get any answer. Number of times promise was repeated. Filing foreclosure after promise made. Additional fees charged to the account while waiting for the modification. Knew your credit score would decline by delaying.

31 HOW TO AVOID BROKEN PROMISE PROBLEMS Don t mail any payments until you have an agreement in writing that states how much you will repay each month. Servicers must qualify you up front under HAMP. Difference between collection agents and loss mitigation. If they refuse to put it in writing and you are concerned about making payments, send a letter with payment that states what you understand the agreement to be, and that the check satisfies terms of the agreement. Put on check Satisfaction of outstanding balance according agreement met on [date]. Keep detailed call records! Who you talked to, date and time, what you discussed, telephone number called/called from. Keep receipts/check stubs of every payment you make, or keep your bank records showing electronic payments.

32 FORECLOSURE DEFENSES 3. TILA The Truth in Lending Act, 15 U.S.C. 1601, et seq. Regulation Z, 12 C.F.R. Part , et seq.

33 FORECLOSURE DEFENSES TRUTH IN LENDING ACT Federal Law that Requires Specific Disclosures at Time of Closing. Offers greatest protections when loan is: A refinance of your primary residence Under 3 Years Old Some errors can mean rescission, which is the return of almost all payments made and all closing costs. Might have to tender the home after the bank returns your money. HOEPA part of TILA.

34 FORECLOSURE DEFENSES TRUTH IN LENDING ACT Rescission is Available in 4 Main Situations (12 CFR Part ) 1. The finance charge is incorrectly calculated. The total finance charge needs to be accurate within only $35 when the loan goes into foreclosure. 2. A mortgage broker fee was charged but not disclosed. 3. The Notice of Right to Cancel is Incorrect. Either not enough copies given (2 copies each), or it is incorrectly filled out. 4. No disclosures provided at closing (TIL or NRC). HELOC disclosures are different.

35 FORECLOSURE DEFENSES 4. Defenses Based on Loan Origination & Predatory Lending No predatory lending cause of action. Use unconscionability instead, or Fraud Consumer sales practices acts (CSPA, UDAP laws) (Next Defense in Slides) Breach of fiduciary Mortgage broker laws High cost loans under HOEPA.

36 FORECLOSURE DEFENSES PREDATORY LENDING Use unconscionability: Highlight Applicable Factors Procedural: The education, intelligence, business acumen and experience of the borrower. The age of the borrower. The inability of the borrower to understand or read the language of the contract. (Such as Spanish speakers.) Any disabilities the borrower may have, especially those that may impair the ability for the borrower to understand the contract s terms. The sales process being conducted in a language other than the language of the contract. (Sale in French, papers are presented in English.) The closing conducted in English without an interpreter present. The relative bargaining power of the parties. Adverse construction of the language of the contract. (Like fine print clauses.) Manipulation of the rules. The manner in which the contract was formed. Whether the terms of the contract were possible. Whether the seller or lender knowingly took advantage of the consumer s inability to protect his or her interests. Oppressive terms. Last minute hikes in the terms. Failure to provide accurate initial Good Faith Estimate or disclosures. Substantive: Relative fairness of the obligations. Oppressive terms. Overall imbalance of the obligations and rights imposed by the contract. Significant price disparities. Inability of the consumer to receive substantial benefits from the transaction. (Like an unnecessary refinance.) Gross disparity between other loan on the market that like situated consumers could obtain, versus the one this consumer entered into. Not offering to qualify the homeowner for lower mortgage terms at a lower cost instead of going stated income. The income differences between the application form (Document No. 1003) and the tax returns of the borrower are significant. The broker may have filled out the application, not the borrower. Using a No Income No Asset (NINA), Stated Income Stated Asset (SISA), or like program instead of qualifying the borrower at the payment amount he or she could afford. Using an adjustable rate product when a fixed rate product was available, especially if used in conjunction with a NINA or SISA program to loan more money. (Remember, brokers are paid on loan sizes, which is an incentive to secure the biggest loan possible). The loan has a negative amortization schedule (loan size increases over time).

37 FORECLOSURE DEFENSES 5. Ohio s Consumer Sales Practices Act, R.C et seq. ( CSPA ). Each state has its own version of a consumer protection statute.

38 FORECLOSURE DEFENSES CSPA If it smells bad to you, it probably violates the CSPA. CSPA is the catch-all consumer law that protects consumers from just about all businesses..except banks acting in their banking capacity (but may apply if acting as a debt collector). Don t assume the law doesn t apply to the plaintiff as a bank. BAC Home Loan Servicing LP is NOT Bank of America, NA. Damages are increased if you can find a like violation in the Attorney General s Public Inspection Files (PIFs).

39 FORECLOSURE DEFENSES CSPA Allege: Plaintiff is and was a Supplier under the meaning of R.C (C) at all times relevant to this transaction. [Mortgage Broker] is and was a Supplier under the meaning of R.C (C) at all times relevant to this transaction. [Lender in Note] is and was a Supplier under the meaning of R.C (C) at all times relevant to this transaction. The Jones are and were Consumers under the meaning of R.C (D) at all times relevant to this transaction. The Jones refinance transaction is and was a Consumer Transaction under the meaning of R.C (A) at all times relevant to this transaction. The Jones 2009 loan modification is and was a Consumer Transaction under the meaning of R.C (A) at all times relevant to this transaction. Plaintiff, [Broker] and [Lender] were and are subject to Ohio s Consumer Sales Practices Act, O.R.C , et seq. ( CSPA ) at all times relevant to this transaction. Don t forget the Ohio Mortgage Broker Act, R.C , et seq. ( OMBA ).

40 FORECLOSURE DEFENSES PREDATORY LENDING/ CSPA In refinance transactions, look to the terms of the old mortgage to see if the refinance was a benefit. Bring claims otherwise barred by the statute of limitations in recoupment and setoff. Common Law Ohio R.C (C) (CSPA) 15 U.S.C. 1640(e) (TILA) Bring claims against the plaintiff that you had against your original mortgage broker. Plaintiff isn t a holder in due course (UCC 3-302, 3-305; RC ,.35). Liable under agency law and respondeat superior. Agency Lender (Not) Holder in Due Course Plaintiff Broker

41 FORECLOSURE DEFENSES 6. Fair Debt Collection Practices Act, 15 U.S.C. 1692a, et seq. ( FDCPA ).

42 FORECLOSURE DEFENSES FDCPA Governs what Servicers must do if they are covered by the FDCPA. Not all are covered, unless acquired debt during default or are regularly in the business of collecting on debts. FDCPA Prohibits a list of activities: Anything deceptive or false. Charging fees not authorized in the mortgage. Contacting the homeowner once counsel is retained. Contacting the homeowner after being notified in writing to stop. The list goes on. Google 15 U.S.C. 1692a and FDCPA and read the code for other wrongs. Only one set of damages per lawsuit in the 6 th Circuit (OH, MI, KY, TN), but can get attorneys fees and costs.

43 FORECLOSURE DEFENSES FDCPA Allege: The plaintiff was and is subject to the Fair Debt Collection Practices Act, 15 U.S.C. 1692a, et seq. ( FDCPA ) at all times relevant to this transaction. The Jones were and are Consumers, as defined by 15 U.S.C. 1692a(3) at all times relevant to this transaction. Plaintiff is and was a Debt Collector, as defined by 15 U.S.C. 1692a(6), as it is regularly engaged in collecting on the account of another, and is not exempted under the FDCPA, at all times relevant to this transaction. The account subject to Plaintiff s complaint is and was a Debt, as defined by 15 U.S.C. 1692a(5) at all times relevant to this transaction. Then allege the things the servicer (plaintiff) did wrong.

44 FORECLOSURE DEFENSES 7. Conditions Precedent.

45 FORECLOSURE DEFENSES CONDITIONS PRECEDENT Something written into a contract that MUST be done in order to enforce rights under a contract. Civ.R. 9(C). Usually written into paragraph 22 in mortgages. Sometimes in notes under paragraph 6.

46 FORECLOSURE DEFENSES CONDITIONS PRECEDENT Allege: DEFENSE ONE The plaintiff did not comply with all conditions precedent necessary prior to filing this lawsuit, as it did not mail Defendant with a copy of the pre-foreclosure notice required in covenant 22 of the mortgage. DEFENSE TWO The plaintiff did not comply with all conditions precedent necessary prior to filing this lawsuit, as it did not mail Defendant with a copy of the pre-foreclosure notice required in paragraph 6(C) of the note. DEFENSE THREE The plaintiff did not comply with all conditions precedent necessary prior to filing this lawsuit, as it did not mail Defendant with a copy of the pre-foreclosure disclosures required of federally guaranteed loans.

47 FORECLOSURE DEFENSES 8. Securitization

48 FORECLOSURE DEFENSES SECURITIZATION Overhyped defense. Common online variations: 1. REMIC, sometimes called Collateralized Mortgage Obligations. Issue between the IRS and the CMO; issues with UCC enforcement. 2. The note was transformed into a security and cannot be enforced. Again, issues with UCC enforcement; unlikeliness $ trillions voided. 3. No authority by the trust to foreclose based on SPA. Servicing and Pooling Agreement (SPA) states when and how the note was to be transferred. Still issues with UCC enforcement, but may have some grounds under trust law as it relates to whether trust has power to act outside its legal framework. Question standing.

49 MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. (MERS) Organization set up to avoid recording mortgages. Claims to be: Mortgagee Nominee for Lender Nominee for Lender s Successors and Assigns. Entity cannot be an agent and principal at the same time. Entity cannot be an agent for principals without authority from those principals. MERS claims to have no ownership in mortgages or notes. Result: Treat MERS as an agent and demand it show you authorization from its principals (lenders) that it has rights to act.

50 IMPORTANT FINAL NOTES Be wary about bankruptcy due to risk of losing Counter Claims. Retirement accounts usually off limits. Don t move out! Buyback Provisions. Foreclosure audit and modification scams. TILA rescission analysis critical. Do not pay money upfront to modification companies, and do not expect foreclosure to be stalled or stopped. Keep track of every call to/from your servicer Date, Time, Name of representative, and What Discussed. Also keep receipts, copies of checks, and statements showing fees. 23 Legal Defenses to Foreclosure: How to Beat the Bank by today s presenter, Troy Doucet (available at amazon.com) (attorneys only)

51 V. FORMS YOU CAN USE IN COURT See 23 Legal Defenses to Foreclosure: How to Beat the Bank. Tailor these forms to your county and lawsuit. Change the heading to match the heading on the lawsuit document filed by the bank Placement of Court name. Placement of your name, case number, and judge s name. Placement of the document heading. All documents other than the Answer should have a memorandum attached explaining why the court should grant your request. Attorneys:

52 THANK YOU TROY DOUCET, ESQ.