Fighting for Your Rights: Foreclosure Defense

In my 12 years of forensic mortgage investigation, I have seen one truth repeat itself: being passive does nothing for the homeowner. Fighting for your rights is exactly that: a fight. You would expect the courts to apply the same law to the banks that the banks apply to you. You would be sadly mistaken. Nothing could be further from the truth.

The Presumption in the Courts

There is a presumption in the courts that the actions taken by the banks are true, accurate, lawful, and legal. This is a fallacy. Homes are taken by deceit, false documentation, accusations, and misapplying the correct findings of law.

You must do the research on the methodology being applied by the foreclosing party. The actions taken by the party attempting to foreclose are sure to be full of errors. It is bringing these errors to light and attacking them with the same ferocity the banks use in taking these homes that will help you. The banks do not come to the table with open arms. They do not want to work with homeowners to procure a proper settlement. They can be pushed into settlement sooner if attacked properly.

Getting Armed for the Fight

You must be properly armed. Your equipment consists of knowing the law and the proper procedures pertaining to a party commencing a foreclosure action. You must set a proper foundation to work from.

Your Tangible Promissory Note comes under the governing of the Uniform Commercial Code (UCC), or your state’s equivalent. The judge may not like what is argued in his court, but the law is the law. There is no excuse for ignoring it.

Your bullets are in understanding the statutes of UCC Article 3, or your state’s equivalent, pertaining to foreclosure actions. An understanding of the capacity of the party attempting the foreclosure will give you an edge.

The UCC is not optional. It is not a suggestion. It is the body of law that governs negotiable instruments, including the promissory note you signed. Every state has adopted some version of the UCC. In Texas, it is the Business and Commerce Code. The principles are the same. The requirements for negotiation, delivery, indorsement, and transfer are the same. The banks are required to follow them just as everyone else is.

Capacity

Capacity requires an inquiry into the litigant’s status:

“its power to appear and bring its grievance before the court.”

The party attempting to foreclose must have the capacity to do so. This means they must be the proper party, with proper standing, and proper authority. When the party attempting to foreclose is a servicer rather than the note holder, or a trustee who has not been properly appointed, or a party who acquired the note through a defective assignment, their capacity to foreclose must be challenged.

The Bank Does Not Own the Note

Homeowners need to realize something. The banks plead that they own the note and mortgage and assert the right to foreclose on the security instrument they allege is in default. But the objection that the bank does not own the note and security instrument is not automatically a defense based on lack of standing. Courts will usually claim the homeowners did not correctly plead the case. Insufficient facts were alleged.

Your argument should be that the facts alleged are not true. It is not a question of whether the bank has alleged a sufficient interest in the dispute. It is whether the bank can prove its prima facie case. You will need competent evidence, which requires good facts.

Can the bank prove it holds the note? Can the bank prove the note was properly indorsed and delivered to it? Can the bank prove the assignment of the security instrument was properly executed and recorded? Can the bank prove the chain of endorsements matches the chain of assignments? These are questions of fact, and you have the right to demand competent evidence on each one.

Start at the County Recorder’s Office

The county recorder’s office is where the search begins. A mortgage fraud investigation examines these filings to identify false documentation and improper transfers. These filings are prima facie evidence of what was supposed to happen and what did not happen pursuant to statutory requirements of law.

The public record tells a story. It shows who was named as lender, who was named as beneficiary, what assignments were recorded and when, and what the chain of transfers looks like. When the public record does not match what the bank is claiming, you have evidence of a defect in the chain of title. This is the foundation of the fight.

Until the gloves come off and blows are thrown, rights will not be given back. The homeowner willing to do the research, understand the law, and bring the errors to light has a fighting chance. The homeowner who is passive, who accepts the bank’s claims without question, has no chance at all. The choice is yours. The tools are available, and the law is on your side when you know how to use it.

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Joseph Esquivel, Mortgage Compliance Investigators. Copyrighted, all rights reserved.