My previous diary, How I am Beating the Crap out of Countrywide/MERS garnered a large response concerning how to combat illegal foreclosures. Several of you suggested that I put into form a step by step guide on how to fight these illegal foreclosures. I will impart to you my knowledge and personal experience in fighting these crooks who tried to illegally foreclose on my house, coupled with my knowledge of the court system, and most importantly how you or a family member or friend can fight these criminals both with, and without an attorney. My hope is that this community uses its skills to get this information out to the many, many Americans in need...
First of all, this advice applies to my state. Some of this may not apply in your state. The major premises of this diary remain however. Many many foreclosures are being conducted illegally. This is how in my state and hopefully in your state you can combat an illegal foreclosure.
This guide will begin with the assumption that you are about ready to be foreclosed upon , or have been foreclosed upon but no final judgement has been rendered in the case. In this diary, the definition of foreclosure is the actual receiving of the complaint(your foreclosure lawsuit). This could come in two forms, certified mail, or hand delivery by a bailiff or sheriff. If you have been told by your mortgage company that they are going to foreclose, ask them to send the complaint via certified mail. It is cheaper and eliminates the drama of having a sheriff knocking at your door on a sunny afternoon with all the neighbors outside (ya, went thru that...twice). Don't dodge the service of the foreclosure, they will just hire a sheriff who will eventually find you and serve the complaint. Remember, you are going to fight these bastards. Be proactive, don't panic, and jump willingly into the fray. I know I can get you through the first couple rounds if they have illegally foreclosed which hopefully will give you the leverage to negotiate a settlement to keep your house.
After they have foreclosed, hire an attorney if you can afford one. Be sure to pass on this guide to that attorney. I am certain that he/she probably has little knowledge of these tactics in this guide however they will appreciate your willingness to fight and appreciate the strong tools you will be using in your battle.
In my state you have 20 days in which to answer the complaint, which is plenty of time in which to respond. If you do not respond, the mortgage company will ask the court for a default judgement. In many cases, since they are so backlogged, it could be months before they file for a default judgement so even if you have missed the deadline, unless they have gotten their default judgement, you can still file a response which I will detail later in this diary and you won't have to worry about the default judgement. Under any circumstance, do not let this happen unless you are prepared to lose the house and you are in agreement as to how much they claim you owe. Don't let them pad their claim for money that is not owed just because you weren't there (which they will do). Remember, if you lose your house, they will still come after you for any short fall after they or the court sells your house.
Now to the complaint itself. Who is listed as the "Plantiff"? If it is a mortgage company or bank "as servicer",and/or Mortgage Electronic Registration Service, Inc. (commonly know as MERS), this is an illegal foreclosure. The reason as laid out in my prior diary is that by law only a "noteholder" can foreclose. In legal terms, only the noteholder has standing (which means the legal right) in which to foreclose. And what is a noteholder? It is exactly that...an entity that is in possession of the original note...thus, the "noteholder". There is no gray area here. It is about as black or white as you can get. It doesn't matter how far behind you are, or how much you owe. It is black letter law that the plantiff must have standing in which to sue.
If they have illegally foreclosed on your house, before you storm the bank with a torch and pitchfork (plenty of time for that), you must take them through the legal process. They are going to wish you had showed up with the pitchfork by the time you are done with them.
As background to understand this guide, understand that there are three distinct entities doing business in the mortgage industry. (1)the noteholder is defined as an original lender that did not sell the note that you gave them into the secondary market (not the case in an illegal foreclosure), or the noteholder are the investors that purchased the note (which is the case 100% of the time if the forclosure is illegal);(2)the mortgagee which is defined as the entity that you gave the mortgage to which would be the bank if they didn't sell the note in the secondary market (not an illegal foreclosure) or it is going to be Mortgage Electronic Registration Service, Inc. (an illegal forclosure). Which of the two has standing to foreclose? Only the noteholder. And only a plantiff (noteholder)that actually has your original note in their possession. Again, there is no gray area here. Just because they show a photocopy of your note in the lawsuit does not mean that they have standing to foreclose. They must have the note in their physical possession, thus being the "noteholder". The third entity in the mortgage industry are the loan servicers who manage the loan on behalf of the noteholder. Companies like Countrywide as well as all of the large banks are loan servicers. A loan servicer has no standing to foreclose. Again, it is very important to understand, there is no gray area here. A loan servicer is only a payment process center, in legal terms, a true "debt collector" with no standing to foreclose. They do not have any interest in the note nor are they the noteholder, even if they were originally the noteholder. In other words, if you closed your loan with Countrywide and the plantiff in the foreclosure is "Countrywide, as servicer" and they produce a copy of the note you gave them with Countrywide as the lender does not mean they have standing to file suit. Quite the opposite, this foreclosure is illegal, and in violation of Federal Law (to be covered in pt. 2).
OK....so if these crooks have illegally foreclosured on you, this is what you do. Go to www.mersinc.com and try to find your note and who is listed as the noteholder. If your plantiff is a loan servicer, the correct noteholder will be listed by MERS. Print this.
If you do not have an attorney, you are going to go to court representing yourself, which is known as "pro se" in legal terms. You have every legal right to represent yourself in court. If you have been sued illegally, you must first prove that to the judge. You do that very simply. You are going to go to court and ask the judge to dismiss the foreclosure. You do this by filing "a motion" in court. To combat your motion the plantiff has no other recourse but to produce the note. This means the original note that you signed at closing. As stated above, a photocopy of the note is worthless. Here is how to file the motion to dismiss. Copy verbatim the top portion of the complaint (the foreclosure lawsuit that they served you). This will include the name of the plantiff, the name of the defendant (you), the case number and (in this state) the circuit court division (the judge). Get online and google your your state and "civil rules of procedure". Each state has them. When you get there scroll down until you find something like "plantiff and defendant, capacity" or "real party in interest" which are the legal terms for standing to sue. When you find this write down the title of the law.
As the centered title in your motion put "Motion to Dismiss". In the text below it write "Plantiff is in violation of Civil Rule _ (insert your state's law)which determines standing to sue and real party in interest. Plantiff is the loan servicer and not the noteholder, and this complaint should be dismissed with prejudice" ( with prejudice means that the plantiff(s) are barred from suing you again over this issue). If your plantiff is only Mortgage Electronic Registration Service, Inc. then state in your motion that "the plantiff is only the mortgagee and not the noteholder and this complaint should be dismissed with prejudice". Further state in the motion "as evidence that plantiff does not have standing to bring this suit, and that this suit should be dismissed with prejudice, included is a copy from the Mortgage Electronic Registration System, Inc.(the mortgagee) website whereby the mortgagee of the property states that the noteholder is not the plantiff". Sign the motion in similar fashion to the original complaint. Go to the court house that houses your court and division. Go to the circuit clerks office (or the clerk that is the like kind in your state). File your motion to dismiss with the clerk and ask the clerk when your motion hour is for that court (Monday afternoons here). That day send a copy of your motion by certified mail or hand deliver a copy of the motion to the attorney's office representing the plantiff.
Congratulations...you have just fucked up somebody who deserves it big time.
Go to motion hour and wait for your case to be called. The judge will not have read a single word of your motion at this time btw. However as I have said before, this is a simple black and white issue. He/she most likely will ask the counsel for the plantiff if the plantiff is indeed the noteholder. No matter what the attorney says, do not back down. Insist (respectfully) on seeing the original note. Most likely the judge is going to schedule a hearing sometime in the future. If you have gotten this far you have won the first several rounds.
You then go to your hearing. Most likely their attorney is going to make all kinds of statements along these lines...their client is kinda the noteholder, their client is the agent of the noteholder (ask to see the agency agreement then, it doesn't exist), that MERS is just a service to bring the mortgage business into the 21st century, that you are in default and owe a bazillion dollars... blah, blah, blah. When he/she is done look to the judge and state, "they can't produce the note your honor". If by chance he/she does show up with the note ask who he/she is representing, the loan servicer who filed the foreclosure or the noteholder, and just when was the note transfered? Whatever he/she says, your lawsuit is still illegal and should be dismissed. He/she may try to substitute the correct noteholder (if indeed they are representing the noteholder...more on this later)for the loan servicer as your plantiff. Object! Substitution rules of civil procedure can only be used when a noteholder has assigned or sold your note to another party after the lawsuit was filed. If the note was sold to the current noteholder prior to the foreclosure (which it was, I guarantee), the foreclosure is illegal and the suit should be dismissed.
If the judge dismisses the lawsuit you have won a couple more rounds. If the judge has dismissed the lawsuit "with prejudice" when MERS is a co-plantiff you really have them screwed. Why? Because MERS is the mortgagee which holds your mortgage (not your note remember) and they are now barred from refiling the foreclosure. The entire collateral (your house) cannot not now be foreclosed on. If they refile a foreclosure with the proper noteholder they can go after you for the debt personally however the collateral in no longer available. If your lawsuit is dismissed "without prejudice" they can refile under the name of the correct noteholder and MERS. Ask to see the agreement whereby the attorney is representing the loan servicer, MERS, and the noteholder. My hunch is that it doesn't exist (and am doing precisely this in my lawsuit just to see what happens and I will have more on this later). The reason why I believe the attorney has no formal agreement to represent the correct noteholder is (1)the noteholder really has one hell of a cross claim (lawsuit) against the loan servicer for screwing everything up so much which means the attorney has a huge conflict of interest and (2)I don't believe a single attorney is going to find a decision maker in these giant investment firms, trusts with their trustees, or banks, who can make a decision. My bet is that the attorney is still taking marching orders from the loan servicer, even though the loan servicer is going to be dismissed as the plantiff. There is no infrastructure at these investment firms and large banks that allow for a single person to make a decision on a single lawsuit of this type (which is why the loan modification programs that have been offered have been such a failure). In fact, I believe today that in my case, my new found noteholder, the Bank of New York, has no idea about how much trouble they are in concerning my lawsuit. No doubt after reading this there is going to be some serious scrambling going on in their offices somewhere. ;)
Once you have determined in court that your original plantiff was not the real party in interest, meaning the current noteholder, you can go after these crooks in court because they have now broken Federal Law. Pt.2 of this Guide on How to Fight Illegal Foreclosure will detail how you are going to take your sock full of quarters to these grifters. I am writing it as we speak however realize that everyday matters for a lot of people so now it is your turn to help and forward this info asap so that those in need can get started. I'll post pt.2 very soon. These flimflam artists may adapt soon. We need to get this info out now...