This entry is an update to my blog I posted in 2009 titled: "What happens when a lender can’t produce the original note?" This entry is intended to provide general information only.
Depending on your financial position, it might be very beneficial for you to pursue a case against your mortgage lender if your true goal is to keep your home. You should first seek out a company or an individual that specializes in forensic auditing. They will pick apart every step and aspect of your loan and mortgage, including verifying if you may have also been a victim of Predatory Lending or unfair and deceptive practices. Based on their findings, they will give you a summary of issues they feel are significant to support litigation against your lender.
Here is a review of my blog "What happens when a lender can’t produce the original note?" entered on ActiveRain in 2009. The basic theory of this defense is still the same and is now stronger than ever. However, there are some new points that homeowners seeking to use such a defense should be aware of.
Many homeowners seeking a loan modification in order to save their homes from foreclosure are STILL intentionally being ignored and given constant runaround in order to enable the investor to acquire a family's home via foreclosure proceedings. This enables the investor to make even more profit from their actions with intentions of seeking surplus reimbursements by a variety of means (such as seeking government bail out money, filing mortgage insurance claims, pursuing deficiency judgments against the homeowner, requiring promissory notes, etc.) And, if you have any equity in your home and the bank forecloses, guess who gets that money as well? The link below sheds some light on this issue.
http://www.youtube.com/watch?v=ssl5yb7FewA
You should seek legal counsel from an attorney licensed to practice law for your particular set of circumstances.
Unfortunately, in non-judicial states (like Massachusetts) it is up to the homeowner being foreclosed on to file a law suit against the foreclosing party in order to challenge their lender's actions. Regrettably, many unsuspecting homeowners (who are not aware of their rights) will lose their homes to a fraudulent foreclosure unless they stand up for themselves and challenge such an action!
IT’S ALL IN THE APPROACH! Much of a homeowner's potential success with such a claim greatly depends on how they or their counsel approach the argument with the judge.
Our office (in conjunction with the Consumer Warning Network and other law firms and non-profit organizations across the country) has been educating homeowners about the “Produce the Note” theory/defense for the past several years. Please check out their website below:
http://www.consumerwarningnetwork.com/
Included in their web-site are step by step instructions to handle such a case on your own. However, it is highly recommended you consult with an attorney in order to achieve the very best results possible for your specific set of circumstances.
If a ruling was issued by a general court of law (vs. bankruptcy court) the homeowner would be entitled to have the foreclosure complaint dismissed. This would give the homeowner an indefinite stay of execution unless and until the lender can come back and prove their legal standing to the court. This does NOT discharge the debt against the homeowner. Only the bankruptcy court would have such authority. However, in addition to the homeowner asking the court to dismiss the foreclosure complaint, they can also ask the court to invalidate or void the mortgage lien on the property. This would in turn make the mortgage debt unsecured.
When a court dismisses a foreclosure complaint in favor of a homeowner, there is a very good possibility the lender will eventually approach the homeowner and offer some type of settlement to the issue. The homeowner could also approach the lender to offer some type of settlement.
An example of such settlement offer could be:
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((If the homeowner was upside down)) Lender to re-write the note based on the current appraised value. Lender will write off any deficiency between the alleged principle balance and current appraised value and will waive all deficiency rights against the borrowers. This will also include the write off of all past due payments, outstanding interest and all late fees and penalty charges that may have accrued under all previous note terms to date.
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New Note amount to reflect a 40 year term with a fixed interest rate of 3%.
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Revised monthly payments are to include escrows for taxes and insurance.
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Lender is to dismiss any pending foreclosure and legal actions set forth against the borrowers.
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Lender is to remove all negative credit reporting statuses and report borrower’s new trade line “Account Current – Paid As Agreed” to all credit reporting agencies to which lender may subscribe.
Should a homeowner continue to pay on their existing mortgage in question?
This could actually be a stipulation that a judge could impose on the homeowner pending a final disposition to the issue. A judge could order the homeowner to place any and all subsequent payment made to be place in a separate escrow account. I have seen this on occasion. Even if such a thing is not ordered by the court, it would be a good idea for the homeowner to place any further payments in a separate escrow account (just in case the lender is able to come back and prove legal standing).
A homeowner wishing to file such a lawsuit against their lender may do so in either the Superior Court or Land Court within the Commonwealth of Massachusetts or the U.S. Bankruptcy Court. Bankruptcy Court could be the best forum to achieve your goal of keeping your home. In addition to the Bankruptcy Court having the judicial authority to decide if a foreclosure or collection action is invalid, they also have the authority to discharge the mortgage debt in its entirety.As afforded by Federal Bankruptcy Rule 7001 and Part VII of the Federal Rules of Bankruptcy Procedure, a homeowner my choose to file an Adversary Proceeding in U.S. Bankruptcy Court in order to challenge the validity of the lender’s legal standing to collect or foreclosure in the first place. Should the lender not be able to definitively prove their legal standing to such debt, said Court must rule in favor of the homeowner by discharging the alleged mortgage debt in question, wareas such lien shall be ordered voided and removed. Neither the Land Court or Superior Court have the judicial authority to discharge debts. The homeowner could also file for a Quiet Title action in the Land Court to officially have the mortgage lien on the property invalidated and removed.
Finding an attorney who specializes in foreclosure defense and litigation can be very difficult because it is a specialized area that not many attorneys handle. The ones that do handle such cases may not be taking on new clients as they may be simply overwhelmed with homeowners seeking such representation. You could try and search the web for foreclosure defense/litigation attorneys or perhaps contact the Massachusetts Bar Association for a referral to a consumer attorney that specializes in Foreclosure Defense/Litigation or a bankruptcy attorney that specializes in Adversary Proceedings & Litigation.
Unfortunately, most bankruptcy attorneys don’t like to litigate these types of cases because they are either not comfortable handling such cases or has experience with adversary proceedings litigation or simply can’t commit the time to litigate such a case. Many would just like to file your petition, get a discharge and move on to the next client. Sometimes, the other factor is money. Most bankruptcy attorneys just assume clients don’t have the money to pay them to take on such a case.
You may want to review this information and also forward this information to whatever attorney you may choose for their review and consideration.
Finding an attorney who is familiar with the concept of foreclosure defense is important. He or she will know how to best handle your case in order to achieve your ultimate goal of trying to keep your home. If you do retain a bankruptcy attorney, keep in mind that such representation does go above and beyond the traditional Chapter 7 or 13 representation and would be an additional cost to you in terms of court costs and fees should this be the route you choose to pursue. Attorney fees for such representation can vary greatly from each attorney.
A bankruptcy attorney can file for bankruptcy protection on your behalf and could also represent you for any Adversary Proceedings that may be required to achieve your goal of keeping your home based on the original mortgage note theory/defense. Remember, the right to foreclose belongs only to the person or entity that has LEGITIMATE POSSESSION OF YOUR ORIGINAL MORTGAGE NOTE (not a photo copy, not an electronic entry) but the original note itself with your original signature(s) and the original authorized agent signatures from the entity you allegedly owe the money to along with all appropriate corporate seals and stamps if required.
An adversary proceeding is a lawsuit filed within the bankruptcy case. It is an action commenced by a plaintiff filing a complaint against one or more defendants. An adversary proceeding resembles a typical civil case from state court. The plaintiff is the person, partnership or corporation initiating the lawsuit. The defendant is the person, partnership or corporation being sued.
Certain types of disputes cannot be handled by motion in the bankruptcy case, but instead require the commencement of an adversary proceeding. Federal Bankruptcy Rule 7001 lists types of actions that require an adversary proceeding. Adversary proceedings are governed, for the most part, by Part VII of the Federal Rules of Bankruptcy Procedure. These rules incorporate most of the Federal Rules of Civil Procedure and are designed to make practice before the bankruptcy and district courts as similar as possible.
You may also want to check out this website that may better explain these arguments.
http://foreclosuredefensenationwide.com/
An example of such an affirmative defense could be something like:
AFFIRMATIVE DEFENSES TO FORECLOSING PARTY’S CLAIM OF “LOST NOTE”
A common trend which is emerging in foreclosure cases is the claim of the plaintiff (a/k/a the “foreclosing party”) that they have “lost the note and/or mortgage”. In such a case, the foreclosing party may file an Affidavit as to the lost note and mortgage in a purported attempt to cure the material defect of proof of ownership and production of the original note and mortgage. This position should be met with a vigorous challenge based on what is being discovered in case after case: that the “plaintiff” does not and never had the original note OR mortgage, which was probably sold or assigned more than once and may today be somewhere in the Cayman Islands as part of a specialized investment vehicle.
The UCC places the burden of producing the instrument on a party bringing an action to enforce (collect upon) it. And Massachusetts law follows the Hornbook Rule "that where the facts with regard to an issue lie peculiarly in the knowledge of a party, that party has the burden of proving the issue." Knowles v. Gilchrist, 362 Mass. 642, 651 (1972), quoting McCormick, Evidence (2d ed.) Section 337, p. 787.
This puts the burden of proof on a party claiming to be the note holder or an agent of the note holder to prove the issue. And (as far as I am concerned) given the mortgage industry's track record of producing phony affidavits, an affidavit will carry little evidentiary weight in a court proceeding and a party moving to foreclose will have to produce the original note in discovery in order to prevail.
Thus, when a borrower or borrower’s attorney is met with such a position, several defenses should be considered. These “affirmative defenses” may take the form of or be asserted along the following lines, provided they are asserted in good faith:
1. Upon information and belief, the mortgage note has been paid in whole or in part by one or more undisclosed third party(ies) who, prior to or contemporaneously with the closing on the “loan”, paid the originating lender in exchange for certain unrecorded rights to the revenues arising out of the loan documents.
2. Upon information and belief and in connection with the matters the subject of paragraph “1” above, Plaintiff (foreclosing party) has no financial interest in the note or mortgage.
3. Upon information and belief, the original note was destroyed or was transferred to a structured investment vehicle which may be located offshore, which also has no interest in the note or mortgage or revenue thereunder.
4. Upon information and belief, the revenue stream deriving from the note and mortgage was eviscerated upon one or more assignments of the note and mortgage to third parties and parsing of obligations as part of the securitization process, some of whom were joined as co-obligors and co-obligees in connection with the closing.
5. To the extent that Plaintiff has been paid on the underlying obligation or has no legal interest therein or in the note or mortgage, or does not have lawful possession of the note or mortgage, Plaintiff’s allegations of possession and capacity to institute foreclosure constitute a fraud upon the court.
6. Based upon one or more of the affirmative defenses set forth above, Defendant (borrower’s name) is entitled to a release and satisfaction of the note and mortgage and dismissal of the foreclosure claim with prejudice.
!!Make Them Prove It!!
IMPORTANT TO UNDERSTAND: The rights to collect vs. the rights to foreclosure. Two separate arguments.
If the lender should allege that an original mortgage promissory note has been lost or destroyed, the law requires the lender to prove all of the following under the “Uniform Commercial Code”, which is a set of laws governing commercial transactions that many states (including Massachusetts) have adopted.
It contains a specific provision on this subject (Section 3-309) which states that a person or entity can enforce (collect upon)a promissory note without having the original, BUT only under certain limited circumstances as follows:
1. The person or entity has to swear and attest that it no longer has the original note;
2. The person or entity has to prove that it was properly in possession of the note and was entitled to enforce it WHEN it lost possession of the note;
3. The person or entity has to prove it didn’t “lose” possession simply because it transferred the note to someone else (i.e., it’s not really lost); and
4. The person or entity has to prove that it cannot produce the original note because the instrument was destroyed or its whereabouts cannot be determined or it was stolen by someone who had no right to it.
All of these matters have to be definitively proven by the person or entity trying to foreclose on the property. It is not the obligation of the borrower to prove or disprove any of this. The borrower can simply challenge the right of the person or entity trying to foreclose and demand proof. More and more judges across the country are dismissing foreclosures in their entirety due to the fact that courts are no longer accepting a lender’s dismissive “take our word for it” attitude.
CAUTION: THE RIGHT TO COLLECT VS. THE RIGHT TO FORECLOSE SHOULD BE TWO DISTINCT ARGUMENTS.
This is an important point that has been more clearly defined since 2009.
Christopher Brown (who is a partner in the Westport, Connecticut & Bronxville, New York law firm of Begos Horgan & Brown LLP) also elaborates:
The “Produce the Note” theory has been a popular mortgage foreclosure defense since the revelation that lenders often do not have the paperwork necessary to foreclose. Although this can be a very effective defense for homeowners facing foreclosure, such defense must be used properly to avoid a misstatement of the law, which could actually make it easier for a lender to overcome what might otherwise be an insurmountable problem.
The produce the note defense is rooted in the requirement of standing, which is an aspect of subject matter jurisdiction. If the foreclosing party lacks standing, the court lacks subject matter jurisdiction and the foreclosure action must be dismissed. Aside from a Bankruptcy Court ruling, this does not mean that the debt or mortgage is unenforceable. It means that the wrong party commenced the foreclosure action. The correct party can try again, but make no mistake; a dismissal is a HUGE result for a borrower! And the likelihood of the proper party ever being found or coming forward is minimal at best.
To have standing, the foreclosing party must have a direct injury or be authorized by statute to foreclose. The purpose of a foreclosure action is to remedy the injury resulting from the non-payment of the debt. The party who is owed the debt is the one that is injured by non-payment. The owner of the debt is the party who is owed the debt. In short, the owner of the debt has a direct injury from the borrower’s failure to pay and thus has standing to foreclose.
Generally, foreclosing parties do not try to establish standing by direct injury. Instead, they claim statutory authority to foreclose. More specifically, they rely on section 3-301 of the Uniform Commercial Code (commonly called the “UCC”). Section 3-301 provides the “holder” of the note with the right to enforce the note. “Holder” under the UCC means the person in possession of a note.
The produce the note defense is based on theory that a party who cannot produce the note does not possess the note and so does not have the right to enforce it (collect upon it). The potential flaw in the defense is that the right to enforce the note, without more, is irrelevant to the right to foreclose the associated mortgage.
UCC 3-301 is entitled “Person Entitled to Enforce Instrument.” It provides in relevant part that the “Person entitled to enforce” an “instrument” is the holder of the “instrument.” UCC 3-104 defines “instrument” as “an unconditional promise or order to pay a fixed amount of money.” In other words, as far as the UCC is concerned, an instrument is a promissory note. Instruments under the UCC do not include mortgage deeds or deeds of trust. This is one of the problems with the produce the note defense. By the express terms of UCC 3-301, the party that can produce the note has nothing more than the right to enforce the note. But, the foreclosing party is not trying to enforce the note. The foreclosing party is trying to enforce the mortgage deed or deed of trust, because it’s the mortgage deed or deed of trust, not the note, which describes the lender’s rights to the property and how to exercise those rights.
Not only is UCC 3-301 expressly limited to the enforcement of notes, no court (with the exception of the Land Court in Massachusetts) can expand its reach to mortgage deeds or deeds of trust. The statute provides that “[a] person may be a person entitled to enforce the instrument even though the person is not the owner of the instrument or is in wrongful possession of the instrument.” Under common law the owner of the debt is directly injured by its non-payment (“common law” is judge made law as opposed to legislature made law). UCC 3-301 does not require any injury. It gives the right to enforce the note to a non-owner or even a thief, i.e., a person “in wrongful possession of the instrument.” Because the statute provides a right to sue without requiring an injury, it is “in derogation of the common law” or, more simply, changes common law. It is a fairly universal principal that statutes in derogation of the common law must be “strictly construed.” That’s just a complicated way of saying that a judge can’t expand a statute that changes the common law; the statute means only what it says and nothing more. Under this principle, a judge can’t expand UCC 3-301 to apply to the enforcement of mortgage deeds or deeds of trust.
Using the “produce the note” theory of defense could actually make it easier for a “lender” to overcome challenges to its standing if not implemented properly. UCC 1-201(21)(A) defines “holder” as “the person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession.”
The reason that the “produce the note” defense theory (used on its own) could makes it easy for the foreclosing party to prove standing to foreclose, stems from the principle that the possessor of a note payable to bearer has a right to enforce the note. UCC 3-205 tells us that a note becomes payable to bearer through an endorsement in blank, which occurs when the person to whom the note is payable writes on it “pay to the order of”, leaves a blank space and then signs below the blank space. The endorsement can be on the note itself or on a page attached to the note called an “allonge.” Endorsing the note in blank makes the note “bearer paper” which means that whoever “bears,” or possesses, it has the right to enforce it.
Calling for production of the note exclusively can play right into the foreclosing party’s hand. If the note is endorsed in blank, and virtually all notes that were part of mortgage securitizations were endorsed in blank, all the foreclosing party needs to do is produce the note to show possession (together with evidence that it possessed the note at the time it started the foreclosure lawsuit).
For these reasons, borrowers might be better served by taking the position that the foreclosing party has to own the debt to have the right to collect AND foreclose and merely producing the note does not establish ownership. It is far more difficult for a foreclosing party to produce compelling evidence of ownership than it is for that party to produce a bearer note or a lost note affidavit. These arguments have been successfully raised over the past few years across the country, where very few foreclosing parties are ever able to produce any credible evidence of ownership.
Whether or not a homeowner owes the money is not what is in question here.
We all know the homeowner owes the money to “someone”. However, they have every right to definitively know who that “someone” is. It’s not an issue of a homeowner "looking for a free ride". In fact, it isquite the contrary. Many homeowners have been reaching out to their lenders for quite some time asking for their help and assistance with no results. This is more than likely due to the fact that their loan was part of an asset backed security package that was sold on Wall Street and potentially belongs to multiple people and/or entities that technically requires each party to agree to modify any of the terms that could affect their bottom line. These people/entities (usually big time investors and speculators from all over the world) have no clue as to what investments they own and don’t own (leaving the banks and servicing companies wondering the same thing). Trust me, it is still a BIG mess out there!
One of the biggest hot button questions with regards to foreclosure defense has been: “Can MERS legally foreclose on a homeowner”? The overwhelming answer in a majority of states has been: no they cannot.
You may want to review the Massachusetts bankruptcy decision in regarding MERS at this link:
http://www.foreclosuresinmass.com/MERS.php
MERS can only act for a valid note holder.
The purpose of MERS is to track the transfer of beneficial interests and servicing rights for all mortgages placed into their system. If your mortgage has been assigned to MERS, you should request a MERS Milestone Report (also known as a MIN Summary) from your mortgage company or servicer to verify the rightful and legal party to your note.
Here is an article highlighting a recent debacle that has been uncovered surrounding foreclosures:
http://www.cnbc.com/id/39499044
Below are a couple of links you may also find useful as well.
Helpful Links:
http://foreclosuredefensenationwide.com
http://www.americansunitedforjustice.org
If a court allows a lender (with no proven legal standing) to foreclose on a homeowner, it could enable the wrongful investor to fallaciously acquire a family's home, enabling the unlawful investor to grossly profit from their actions with intentions of seeking surplus reimbursements by a variety of potential means (such as seeking government bailout money, filing a mortgage insurance claim, pursuing a deficiency judgment, requiring a promissory note and potentially stripping homeowners from any equity remaining in their home).
More and more courts across the country are now beginning to understand and realize that this issue is not merely a "technicality" and should not be satisfied with anything less than full proof of this issue. During the past few years, some courts believed lender's stories of original promissory notes being "lost or destroyed" and have moved to finalize foreclosure sales simply by taking the lender's word (only to have other people or entities later turn up with the original note (proving that they were the proper holder of the note) and not the person or entity who foreclosed on the property originally, leaving the original borrower still liable). More judges are now realizing and appreciate the fact that if they should agree that an original note has been legitimately lost (and allows a foreclosure to proceed) it is the borrower who is still at risk.
As equally important as forcing the lender to produce the original mortgage promissory note, is making them clearly prove they have the absolute legal right and authority to collect or foreclose on behalf of another person or entity!
For example, if a Notice of Intent to Foreclosure has been filed against you by the company you thought was your mortgage company (let’s say Bank of America) and the foreclosure complaint and published notices list a different mortgage company other than Bank of America, there is a very good likelihood Bank of America is acting in a “servicing” or “trustee” capacity on behalf of another person or entity. In fact, the foreclosure complaint might state something like this (pay close attention to the highlighted key words):
“By virtue and in execution of the Power of Sale contained in a certain mortgage given by Mr. and Mrs. Smith to Mortgage Electronic Registration Systems, Inc. as “Nominee” for One West Bank, of which mortgage Deutsche Bank National Trust Company, as “Trustee” of the Home Equity Mortgage Loan Asset-Backed “Trust” Series (NABS 2007-A), Home Equity Mortgage Loan Asset-Backed Certificates (Series INABS 2007-A) under the “Pooling and Servicing Agreement” dated March 1, 2007 is the present holder, by “assignment”.
Notice how Bank of America was not even mentioned? I must admit, I don’t even have a complete understanding on what the above passage means! However, it appears the mortgage (which is the actual lien against the property securing the note) is potentially being held by a person or entity that might be different than the person or entity that actually holds the original mortgage promissory note (which is the legal contract to pay someone back under specific terms). When this happens, you now have a separation of the Note & Mortgage, which can potentially invalidate a mortgage lien on a property. And (although Bank of America is not listed as the foreclosing party) it appears Bank of America is somehow making a legal claim they have such an authority to do so by certain powers granted to them by means of a “Trust”, “Servicing Agreement” or other written legal directive which lists them as a “Trustee”, “Nominee”, “Servicer” or “Administrator” on behalf of a third party who allegedly holds the original mortgage note. Under this example, there is a great likelihood no one would be able to determine who actually holds such authority in the first place!
If this is applicable to your set of circumstances, this point should also be vigorously challenged in court of law to force the foreclosing party to produce a copy of the “Trust”, “Servicing Agreement” or other written legal directive that clearly and definitively outlines their actual legal authority to act in a specific capacity as a “Trustee”, “Nominee”, “Servicer” or “Administrator” on behalf of the third party who allegedly holds the original mortgage promissory note.
New and important ruling since 2009!
Under a new Massachusetts law, the mortgagee or servicing agent acting on behalf thereof, must either hold the original note for itself or as custodian, or act under the authority of the note holder in order to foreclose. Eaton v. Federal National Mortgage Association, 462 Mass. 569, 969 N.E.2d 1118 (2012).
http://www.scribd.com/doc/97932678/Eaton-v-Fannie-Mae-SJC-Ruling
On June 22, 2012, the Massachusetts Supreme Judicial Court issued its ruling in Eaton v. Fannie Mae. This case involved the question of whether a "naked mortgagee" (a mortgagee that was not also the holder of the promissory note) had standing to foreclose.
Richard D. Vetstein (who is the founding partner of Vetstein Law Group & Title HUB Closing Services in Massachusetts) surmises:
The first issue that was considered by the court was the fundamental question of “unity” urged by the Eaton side, which basically brought into question whether a foreclosing mortgagee must hold both the promissory note (underlying indebtedness) and the mortgage in order to foreclose. After reviewing Massachusetts common law going back to the 1800′s, the Court answered ‘YES’ there must be unity, reasoning that a “naked” mortgagee cannot foreclose because, essentially, there is nothing to foreclose. The SJC held that in Massachusetts a foreclosing party must have BOTH the mortgage and the note or be acting on behalf of a party with the note.
But, the Court significantly limited the effect of this decision by restricting the ruling to a prospective (future) application. Simply put, this means foreclosures that occurred prior to June 22, 2012 in Massachusetts cannot be reopened or pursued because of this case.
HOWEVER: The Court clearly confined its opinion and judgment to the foreclosure statute, MGL c. 244. It is the interpretation of that statute that is prospective only. There is no reason to expect that the UCC's Article 3 enforcement provisions will be held to apply prospectively only, as they are not ambiguous and they are not real property law.
The fact that the court did not rule on the UCC is HUGE! Possession of the note (and the mortgage) may be good enough under Massachusetts foreclosure law to allow a party to foreclosure on a homeowner, but the UCC requires something more with respect to the note. And that is the possession AND either being the direct holder or having the rights of a holder. That brings the endorsement issues into play. The UCC also permits enforcement of a lost note, but puts the burden on the loser of the note to meet some substantial requirements to show a former right to enforce the note, inability to obtain it, and that nobody else would be able to enforce it. Meaning, be entitled to collect the debt and/or foreclose on a homeowner).
More importantly (for homeowners in Massachusetts who have been foreclosed upon prior to this ruling) ‘Footnote 26’ means they can still challenge the note. Again, the prospective interpretation of the foreclosure statute does not prevent retrospective application of the UCC.
This ruling now makes it clear that in Massachusetts if one wants to foreclose one must have both the note and mortgage. Lenders were previously able to avoid chain of title questions because they would foreclose without the note. Now they've got to show that they are the note holder or acting on the note holder's behalf. Merely proving agency is insufficient; a servicer must show that it is agent for the note holder, so there will be a question of whether the securitization trust has title.
However, there are some risky parameters that have now been established with this case. Under this ruling, the foreclosing party can establish that it is the note holder or acting on its behalf by filing an affidavit to that effect with the appropriate Registry of Deeds. My concern is that this will lead to a recurrence of affidavit fraud. We are going to see lots of affidavits filed claiming ownership of notes even when that ownership has not in fact been proven prior to (as required with judicial foreclosures) which gives even more reason why a homeowner should fight a foreclosure action against them.
It is now very difficult for a judge in Massachusetts to be dismissive towards any of these arguments. For a court to be dismissive regarding such important financial instruments and other intended written legal directives would mean such applications of law would have no further legal bearing, effect or meaning and should simply be written in the air going forward.
I have laid out many examples that can be derived from the contents contained within this entry on how this issue should be approached and explained to a judge presiding over such a case. I would also use the information I have provided in the attached articles as a way to approach this argument. I have also attached just a few of the countless number of examples of mortgage and foreclosure fraud that has been documented in our own state. These examples could be used to further support the importance of the court's understanding of this issue. There is also much case law that has already been laid out across the country that could also be referenced to support the argument (let alone all of the recent media coverage all over the place regarding banks and their fraudulent paperwork)!
Did you happen to catch the60 Minutes story on mortgage fraud? It further exposed a huge fraud on the part of lenders who are attempting to “re-create” documents. Below is the link to the story.
http://www.cbsnews.com/video/watch/?id=7361572n
Again, I am providing this information simply as a basic understanding into the potential merits and options available for homeowners facing foreclosure or who may have been victims to predatory lending practices. As always, homeowners should consult with an attorney for proper legal advice specific to their own set of circumstances.
I hope this information helps a little and I wish you all the best going forward!
All the Best,
Rick D. Misitano
Rick D. Misitano, Senior Paralegal
Law Offices of James M. Bosco
Methuen Executive Park
240 Pleasant Street
Methuen, Massachusetts 01844
Phone: (978) 687-8804
Fax: (978) 687-8872
Cell: (978) 944-0218
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