I have access to lexus because my wife is a criminal attorney (she is a Prosecuter). Even if she were familiar with this area of law, her relationship with the State prevents her from participating in my litigation. When I was asking "where do I find that law", I should have asked, how do I find it! I don't know what terms I would use to bring it to the surface. I have tried standing, mortgage
, holder in due course, foreclosure and others but cannot find the case that I once saw.
I understand that the holder in due course may enforce their note at any time within the statute of limitations. Are you suggesting that the servicer is also the holder? My understanding is that the servicer need not be the lein holder and that it is common practice for lenders, holders and buyers of notes to hire 3rd party servicing. After all, the largest buyer of notes, Fannie Mae, does not service their own notes. BOA, Chase, Citi all have 3rd party servicers and oddly they also service loans for others. I am under the presumption that the servicer is paid a fee or commission on the collected revenue which is why the larger banks would only want to service the more lucrative contracts. The poa even says in specific language "Green Tree is appointed as IUBT's and IMC's agent for the limited purpose of servicing mortgage loans that are subject to servicing agreements". This is why I believe that the "servicer" is not the holder of the note in due course, and therefore; does not have the right to sue independently. This is specifically the area of the case law that I remember seeing. Obviously, I need to doublecheck but, I remember that in the case MERS was acting as servicer but judgment was overturned at the appellate level based on the fact that mers was the servicer and did not have standing to sue independently. In this case, the holder of the note in due course was not included in the lawsuit and the case was overturned for failure to name an indispensable party. As I understand it, this is because MERS was charged in their agreement with enforcing the note, but since they were not suing on their own behalf, but instead on behalf of the true holder of the note in due course, that proper Plaintiff needed to be named in the suit.
I am gaining the opinion that banks are suing now for foreclosure more out of tradition than of actual right. Once upon a time when a borrower went to the bank for a mortgage loan, they brought all their records and a 20% down payment. The bank then lent them the money out of the banks resources that they got from depositors. The bank would then service their own note and borrowers would go into that particular banking branch and pay their loans. The individual bank was the holder of the note in due course and kept the note in its portfolio. With the advent of the secondary market this is no longer necessarily the case. Banks are able to make loans at a particular interest rate and sell them in the secondary market at a profit, thus returning to them the resources they need to make new loans. This newer practice allows banks and financial institutions to make an unlimited amount of loans as long as there's money in the secondary market to buy them. This latter ability provides banks of the opportunity to make riskier and riskier loans as investors in the secondary market are also willing to take that risk. I believe that these secondary market buyers are the owners of the notes in due course. Because of the greed and the haste to get these loans made and out into the secondary market the banks have played fast and loose with the rules. They became evermore sloppy with their transitions, paperwork, assignments, tracking and execution of documents. They relied on lowly paid, disinterested third parties for closing and execution of notes and mortgages (title companies). These errors and omissions have left the banks wide open to attacks on grounds of TILA, RESPA
, HOEPA, Unfair and Deceptive Trade Practices Act, FDIC regulations, the Fair Credit Reporting Act, Fair Debt Collection Practices Act and any number of other federal and state violations.
Determining the holder of the note in due course becomes even more mysterious and vague given the many times the note may be sold on the secondary market, the disbursement and securitization of the loans and, multi-transaction sales and servicing agreements. This means that loans maybe bundled together with hundreds of millions of dollars of similar quality notes and broken down in pieces to be sold to millions of investors nationwide. Who is the holder of this note in these circumstances? Is it the maker? Is it a servicer, secondary buyer, the tertiary buyer, the wholesaler, the trustee, the hedge fund or insurance company, the individual holder of the derivative? Is there another party at play that might hold the note in due course? I don't know the answer to this question, and it is on this basis that I'm attacking the mortgage note.
I am raising several affirmative defenses. Among them are, lack of standing; unclean hands; violation of RESPA; fraud; violation of Unfair and Deceptive Trade Practices Act; unconscionability; failure to join an indispensable party; lack of jurisdiction; duress; failure to state a claim for which relief may be granted; fraud in the inducement, I have grounds for each of these. I am currently gathering discovery and will amend my answer accordingly once I have the evidence. Interestingly enough, the limited power of attorney that was presented to me by opposing counsel opened the doors to explore all sorts of relationships that are named within the document.
You are correct that the basis for attacking the plaintiff's claim is that there is no evidence that the original note was transferred. There are a great many relationships that need to be explored to prove that there are no relationships, and I intend to make the plaintiff go through each of them in turn, as I attack each motion and compel him to defend his motion many times. I am hoping that, since I have no costs, and he is expensive the plaintiff will realize that the cost of litigating is beyond the value of the suit. The weakness of the argument made in his motion to substitute party plaintiff indicates that I may be able to run circles around him. The motion to substitute party plaintiff arises from his claim that the note was transferred subsequent to the filing of the lawsuit. My argument is that there is no evidence as you stated before, to indicate that the note has been transferred properly. There are at least 25 relationships that need to be explored before we can tell whether or not the note was transferred properly from the original maker. All of this is simply to prove up his motion without even getting to the case! Provided I am successful I will then move to involuntarily dismiss the case.
I hope I have been clear enough, but that this has not been too long a discourse to arrive at the answers to my questions.