How to Use Loan Modification to Stop Foreclosure in Nevada?

How Loan Modification Can Be Used To Stop Foreclosure?

Foreclosure is on the rise in Nevada, and everyday scores of homes are foreclosed in Nevada through non-judicial foreclosure process. Remember, there are two kinds of foreclosure: Judicial and Non-judicial and Nevada is a non judicial foreclosure state. In this article, we like to discuss how to avoid an impending foreclosure by starting a loan modification request.

Rule No. 1: Open channels of communication with your bank. Call the Loss Mitigation, or Loan Modification number of your bank right away. Do not hesitate on this issue under any condition.

Rule No. 2: Find and give your financial information right away. Make sure you ask the bank if they have a package for financial information needed to be send to them. Download from their website and sent it to them on the given fax number. Make sure you get the right fax number from Loss Mitigation Department.

Rule No. 3. Tell your lender that you are a primary home owners and have no intention to let this property go to foreclosure.

Rule No. 4: Tell your lender that you have a great payment history.

Rule No. 5: Tell your lender your story, either on phone or via letter. Send a strong hardship letter to them.

Rule No. 6: Ask them again and again if they have received your documentation. If not, send them again.

Rule No. 6: No need to argue, or indulge in heated discussion. Talk on the same level as your representative. Most of these folks are hard working and eager to help. Their education level is slightly above the high school levels, and some of them have this job as the starter job in their career.

Rule No. 7: Do not lose temper under any condition.

Rule No. 8: Write a diary in a systematic way, and write down the name of the representative, name of the supervisors, and date and time.

Rule No. 9: It is hard for your lender to foreclose as well. They will lose half of the value of the home, and they are also trying their best to stop it.

Rule No. 10: Ask them again and again, if they want short sale if loan modification is not possible. A yes answer means more time, and meanwhile you can chalk out other strategy.

How to Defend Foreclosures in Nevada?

Defending Wrongful Foreclosure Actions in Nevada

Foreclosures in Nevada are on the rise, and our law office is contacted everyday by people from all walks of life inquiring about how to stop foreclosure and other foreclosure related questions. It is a complex area of laws, and we do not suggest to go alone or hire an unlicensed attorney or an out of state attorney or their production firm. A Nevada licensed attorney would be an ideal agency to handle such complex legal cases.

Nevada, as we know is a non-judicial foreclosure state. It simply means that your lender does not have to go to court to get a foreclosure status against you. A simple non judicial procedure is enough to foreclose on your property.

In Nevada, a notice of intent to foreclose is followed by a notice of default which is followed by a notice of trustee’s sale. The last step, the actual non-judicial foreclosure sale, usually occurs within approximately 90 days (and in some cases longer from the filing of the notice of default. For the vast majority of loans, the Nevada non-judicial foreclosure process is an effective and relatively inexpensive method for a servicer to obtain its security. In most non-judicial foreclosures, the only court time and court costs involved are those for the usually uncontested municipal court unlawful detainer which is initiated by the servicer in order to obtain possession from former borrowers who refuse to vacate their former homes.

For a small but seemingly growing number of loans, the non-judicial foreclosure process has has almost become judicial. Increasingly, this war has been taken to courts and even in Nevada, a large number of these cases had been filed in court. This war of attrition ranges from bankruptcy, to District Courts Nevada, and to US District Court. It is not a war to stop eviction in municipal courts of Nevada. They are only mean to stop illegal detainer.
Before we go any farther, we like to outline once more the steps taken by your lender in foreclosing your property in Nevada.
Foreclosure Process in General in Nevada:
Most of the loans are premised upon continuous payments to the lenders. If these payments are not timely paid, or not continuously paid, the borrowers can start the foreclosure process. The lender reviews the loan documents and determines about the occurrence of a default. Failure to make loan payments triggers this default process. Also, it is contingent upon events which have not been corrected by payments or failure of a workout package.

A trustee under a deed of trust may exercise its statutory power of sale without the judicial intervention. In Nevada, the foreclosure is mostly a statutory foreclosure. (NRS 107.080(1)). Judicial foreclosures are also permitted under Nevada law (NRS 40.430-40.450) but judicial foreclosures are not the preferred choice in Nevada for most of the lenders because of the looming danger of the right of redemption. Upon default, the initial step is for either the beneficiary or the trustee to execute a notice of breach and election to sell, which is usually accompanied by an unrecorded Declaration of Default. (NRS 107.080(2)(b)). The beneficiary executes the notice, but the trustee records it. The notice of breach and election to see must be recorded in the county in which the property encumbered by the trust deed is situated. This notice must also be mailed (notice of breach and election to sell) by registered or certified mail, return receipt requested with postage prepaid, to the address of the trustor and to the person who holds the title of record, if known, otherwise to the address of the property. (NRS 1076.080(3)
Notice of Default and Election to Sell?
1. Must describe the property
2. Must describe the deficiency in performance of payment.
3. May contain a notice of intent to accelerate the entire unpaid balance if the terms of the obligations so permit (NRS 107.080(3).
4. Within 10 days of recording and mailing the notice of default to the trustor, copies of the notice must also be sent by registered or certified mail, return receipt requested, to each person who has either (1) filed a request for a copy of the notice; or (2) holds a record interest in the property subordinate to the deed of trust being foreclosed. Additionally, 20 or more days before the sale, the trustee must mail a copy of the notice of the time and place of the sale to the same parties by register3ed or certified mail, return receipt requested. (NRS 107.090.)
5. Nevada laws make it immaterial whether the notice is actually received by the trustor. The notice is effective nonetheless. (Turner v. Dewco Services, Inc., 87 Nev. 14, 479 P. Wd 462 (1971)
6. NRS 107.080(2)(a) provides that no power of sale may be exercised unless the trustor or his successor in interest, a beneficiary under a subordinate deed of trust or any other person with a subordinate lien or encumbrance of record (referred to below as “trustor or interested person”) has, for a period of 35 days, “failed to make good the deficiency in performance or payment….” The 35-day period commences on the first day following the day upon which the notice and election is recorded and mailed to the grantor and to the record owner of the property in the manner specified above. (NRS 108.080(3). If the trustor other interested persons “make good” the deficiency in payment or performance within the 35-day period, the trustee’s power of sale may not be exercised, and the obligation may not be accelerated. NRS 107.080(2)(a), (3). The 35-day period in the statute exists independently of any notice or cure periods contained the applicable notes or deeds of trust. If the notice of breach contains a permitted election to accelerate and the breach is not cured within the 35-day period, the trustor or other interested persons can thereafter only prevent the sale by tendering the entire unpaid balance of the obligation, as well as any costs, fees and expenses incidents to the preparation or recordation of the notice and incident to the making good of the deficiency in performance or payment (NRS 107.080(3).

What is the Procedure for Trustee’s Sale?
When three months have elapsed from the date of the recordation of the notice of breach and election to sell, the trustee may give notice of the time and place of the trustee’s sale, which notice must be given in accordance with the statutory provisions for execution sales of real property – posted notice in three public places for 20 successive days and published once a week for three consecutive weeks. (NRS 107.080(4);231.130(1)©. The trustee’s sale may be held at the office of the trustee anywhere in Nevada, even if it is not in the county where the property being sold is located. (NRS 107.080(4).
If the power of sale is exercised in compliance with the Nevada statute, the purchaser is vested with the title of the trustor, without equity or right of redemption NRS 107.080(5).

What are the Guarantor’s Rights to Notice and Subrogation?

The notice of breach and election to sell must be mailed by certified mail, postage prepaid, to each guarantor or surety of the debt at the address of each if known, or at the address of the trust property. The notice must also be mailed to any other obligor who has filed a request for a copy of the notice under NRS107.090. Failure to provide such notice would release that guarantor, surety or obligor from liability on the obligation. (NRS 107.095(1).

Under NRs 107.095(3) a guaranty, surety or other obligor is not released if the required notice is give at least fifteen (15) days before the later of the expiration of the 35-day period described in NRs 107.080 or any extension of that period by the beneficiary, or if the notice of default is rescinded before the sale id advertised.

Upon full satisfaction by the guarantor, surety or other obligor, other than the trustor, of the indebtedness secured by a mortgage or lien, the paying guarantor or obligor is entitled to enforce every remedy which the beneficiary has against the trustor, and is entitled to an assignment from the beneficiary of all of the rights the beneficiary then has by way of security for the payment or performance of the trustor. NRS 40-475 (1989). Such an obligor is also entitled to subrogation, junior only to the secured lender’s rights, in the case of partial satisfaction of the indebtedness. (NRS 40.485 (1989). These rights may only be waived by the guarantor, surety or other obligor after default. NRs 40.495(1)(1989).

What are the rights under One Action Rule?

In Nevada, a deficiency judgment can be filed under non statutory foreclosure provisions without having filed a judicial foreclosure.

What is a deed of Trust in Nevada?
The most common type of security interest in real property in Nevada is a Deed of Trust. A DOT has three parties.

Lender: It is the first party who is referred to as “Beneficiary.”
Borrower: It is the second party who is referred to as the “Maker”, or “Grantor”, or “Trustor” who conveys legal title to the property to the Trustee.
Trustee: This is the third party who holds legal title to the property.
Process: A DOT can be foreclosed in a simple process and cheaper as well. A Trustee sells the property encumbered by the DOT. All the lender needs to do in order to foreclose on a DOT is to determine that an even of default has occurred under the DOT and have the trustee conduct non-judicial foreclosure proceedings. Here, in Nevada, the trustee sale does not entail redemption. The borrower, in Nevada, does not have the statutory rights of redemption unlike the judicial foreclosure where the right of redemption lasts one year. Compare NRS 107.080(5) (no right of redemption in a foreclosure on a DOT ) with NRs 21.210 (one year period of redemption).

Determination of Default.
Your default notice also consists of a determination of default. It can be monetary or non monetary. Monetary is when it is linked to borrowers failure to pay, failure to pay property taxes, failure to pay homeowners association assessments and failure to pay special improvements and other assessments against the property. The non monetary events of default are spelled out in the notice of default and Deed of Trust as well as related loan documents. They can be failure to insure property, the failure to maintain debt service coverage ratios and waste.

Acceleration of Obligation:
A trustee under a deed of trust may exercise its statutory power of sale (commencement of foreclosure process) without judicial intervention in Nevada. NRS 107.080(1). Judicial foreclosure is also permitted under Nevada laws though seldom exercised. (NRs 40.430-40-450). They carry with them a one year right of redemption which lenders does not like it as they like to close this chapter once for all.

Steps in Foreclosure in Nevada?
1. The beneficiary or the trustee to execute a notice of breach and election to sell which is usually accompanied by an unrecorded Declaration of Default. (N>107.080(2)(NRS ). The beneficiary executes the notice, but the trustee records it. The notice of breach and election to sell must be recorded in the county in which the property encumbered by the trust deed is situated. The notice of breach and election to sell must also be mailed by registered or certified mail, return receipt requested with postage prepaid, to the address of the trustor and to the person who holds the title of record, if known, otherwise to the address of the property. (NRS 1076.080(3).
2. The notice and election must describe the deficiency in performance or payment, and may contain a notice of intent to accelerate the entire unpaid balance if the terms of the obligation so permit. (NRS 107.080(3).
3. Within ten days of recording and mailing to the trustor the notice of default, copies of the notice must also be sent by registered or certified mail, return receipt requested, to each person who had either (1) filed a request for a copy of the notice; or (2) holds a record interest in the property subordinate to the deed of trust being foreclosed. Additionally, 20 or more days before the sale, the trustee must mail a copy of the notice of the time and place of the sale to the same parties by registered or certified mail, return receipt requested. (NRS 107.90)
4. Under Nevada law, it is immaterial whether the notice is actually received by the trustor. Turner v. Dewco Services, Inc., 87 Nev 14. 479 P.2d 462 (1971).
5. NRS 107.080(2)(a) provides that no power of sale may be exercised unless the trustor or his successor in interest, a beneficiary under a subordinate deed of trust or any other person with a subordinate lien or encumbrance of record (trustor or interested persons) has, for a period of 35 days, “failed to make good the deficiency in performance or payment….” The 35-day period commences on the first day following the day upon which the notice and election is recorded and mailed to the grantor and to the record owner of the property in the manner specified above. NRS 107.080(3). If the trustor or other interested person “make good” the deficiency in payment or performance within 35-day period, the trustee’s power of sale may not be exercised, and the obligation may not be accelerated. NRS 107.80(2)(a), (3). The 35-day period in the statue exists independently of any notice or cure periods contained in the applicable notes or deeds of trust. If the notice of breach contains a permitted election to accelerate and the breach is not cured within the 35-day period, the trustor or other interested persons can thereafter only prevent the sale by tendering the entire unpaid balance of the obligation, as well as any costs, fees and expenses incident to the preparation or recordation of the notice and incident to the making good of the deficiency in performance or payment. NRS 107.080(3).
6. Nevada Revised Statutes Chapter 107 governs Deeds of Trusts. The transfer of real property may be made in trust to secure loans and other obligations. See NRS 107.020. In the event a transfer is made in trust to secure payment, the Trustee is granted a power of sale which may be exercised if an event of default has occurred. See generally NRS 107.080.

How a Foreclosure Process in Nevada is Commenced?

1. The lender must first determine that an event of default has taken place.
2. The lender employs the Trustee or a successor.
3. The Trustee will prepare and record in the Office of the County of Records of the County in which the property is located a Notice of Default and Election To Sell. (NRS 107.080).
4. The Notice of Default and Election to Sell must be mailed by registered or certified mail, return receipt requested Election to Sell must be mailed by registered or certified mail, return receipt requested and postage prepaid, to the grantor of the Deed of Trust, the person who holds title of record on the date of the Notice of Default and Election to Sell, each guarantor or surety of the debt, NRS 107.095(1), and any person who recorded a request for a Notice of Default and Election to Sell. (NRS 107.090.
5. On the first day after the Notice of Default and Election to Sell is recorded and sent by mail to all interested parties, the borrower and the other obligors are then given 35 days to make good the deficiency in payment or performance. NRS 107.080(2)(a)(2). This essentially allows the borrower or other obligors to de-accelerate the default under the Deed of Trust and terminate the foreclosure proceedings.
6. In the event the borrower or other party in interest fails to cure the deficiency in payment or performance, the Trustee must wait until the expiration of three months following the recording of the Notice of Default and Election to Sell 55 days after the 35 day reinstatement period expires) before giving notice of the time and the place for the sale of the real property (NRS 107.080). The notice of the time and place for the sale of the real property must be published in accordance with Nevada’s execution statutes.

Requirements of Publication for the Notice Under Nevada Laws

Nevada statute requires the following publication of the notice of the date, time and place of the sale:
(1) Personal service or service by registered mail to the last known address of each person entitled to Notice of Default and Election to Sell;
(2) The posting of a similar notice particularly describing the property , for twenty days successively, in three public places of the township or city where the property is situated in or where the property is to be sold; and
(3) Publishing a copy of the Notice three times, once each week for three successive weeks, in a newspaper, if there is one the county. (NRS 21.130(c).
(4) In addition to the notice required by Nevada’s execution statutes, the Trustee is required to, at least twenty days before the date of the sale, deposit in the United States mail and envelope, registered or certified, return receipt requested and with postage prepaid, containing a copy of the Notice of time and place of sale, addressed to each person who has recorded a Request for Notice of Default and Sale. See NRS 107.090(4).
(5) If the Trustee fails to give any person liable to the beneficiary or any other person who has requested a Notice of Default and Sale the required notices, that person may be released of its obligation to the lender. NRs 107.095.
(6) NRs 107.080(4) allows the Trustee to conduct the sale at the Trustee’s office.
(7) At the foreclosure sale, the Trustee may sell the real property by public auction. Generally, the lender will provide the trustee with a minimum credit bid before the foreclosure sale. The amount of the credit bid may be for the full amount of the debt owed to the beneficiary or only a portion of what is owed to the beneficiary. Any person or entity may attend the foreclosure sale and bid for the real property.

What is Nevada’s “One Action Rule”?

Nevada has adopted a one-action rule. It provides that there may be only one action to collect a debt secured by a mortgage or other lien. The Nevada One Action rules provides: (NRs 40.430(1)-(3).
1. There may be but one action for the recovery of any debt, or for the enforcement of any right secured by a mortgage or other lien upon real estate. That action must be in accordance with the provision of this section and NRS 40.433 to 40.459, inclusive. In that action, the judgment must be rendered for the amount found due the plaintiff, and the court, by its decree or judgment, may direct a sale or the encumbered property, or such part thereof as is necessary, and apply the proceeds of the sale as provided in NRS 40.462.
2. This section must be construed to permit a secured creditor to realize upon the collateral for a debt or other obligation agreed upon by the debtor and creditor when the debt or other obligation was incurred.
3. A sale directed by the court pursuant to subsection 1 must be conducted in the same manner as the sale of real property upon execution, by the sheriff of the county in which the encumbered land is situated, and if the encumbered land is situated in two or more counties, the court shall direct the sheriff of one of the counties to conduct the sale with like proceedings and effect as if the whole of the encumbered land were situated in that county.

What is a Wrongful Foreclosure Action?

A wrongful foreclosure action is an action filed in superior court by the borrower against the servicer, the holder of the note, and usually the foreclosing trustee. The complaint usually alleges that there was an "illegal, fraudulent or willfully oppressive sale of property under a power of sale contained in a mortgage or deed of trust." Munger v. Moore (1970) 11 Cal.App.3d. 1. The wrongful foreclosure action is often brought prior to the non-judicial foreclosure sale in order to delay the sale, but the action may also be brought after the non-judicial foreclosure sale.

A borrower in a wrongful foreclosure can allege that the amount stated as due and owing in the notice of default is incorrect for one or more of the following reasons:
- an incorrect interest rate adjustment,
- incorrect tax impound accounts,
- misapplied payments,
- a forbearance agreement which was not adhered to by the servicer, unnecessary forced place insurance,
- improper accounting for a confirmed chapter 11 or chapter 13 bankruptcy plan.
- Wrongful foreclosure actions are also brought when the servicers accept partial payments after initiation of the wrongful foreclosure process, then continue with the foreclosure.
- Companion allegations for emotional distress and punitive damages usually accompany any wrongful foreclosure action.
- Also, a loan modification process was initiated, but stopped in bad faith by your lender.
- Deceptive trade practice under Nevada Laws.
- Violations of TILA
- Violations of RESPA
- Violations of HOEPA.
- Contractual Breach
- Intentional infliction of emotional distress
- Negligent infliction of emotional distress
- Wrongful foreclosure
- Promissory Estoppel.
Damages available to a borrower in a wrongful foreclosure action are an amount sufficient to compensate for all detriment proximately caused by the servicer or trustee’s wrongful conduct. Damages are usually measured by value of the property at the time of the sale in excess of the mortgage and lien against the property. Munger v. Moore (1970) 11 Cal.App.3d. 1. Additionally, the borrower may also obtain damages for emotional distress in a wrongful foreclosure action. Young v. Bank of America (1983) 141 Cal.App.3d 108; Anderson v. Heart Federal Savings & Loan Assn. (1989) 208 Cal.App.3d. 202. Further, if the borrower can prove by clear and convincing evidence that the servicer or trustee was guilty of fraud, oppression or malice in its wrongful conduct, punitive damages may be awarded.

How Can a Wrongful Foreclosure Action Delay Recovery of the Security?

A wrongful foreclosure suit filed in District court will not necessarily delay a servicer’s recovery of its security. The companion filings to such a suit (notice of pending action, injunction and/or motion to consolidate) however can delay a servicer’s ultimate recovery. Delay caused by a wrongful foreclosure action can be anywhere from forty-five days to two years.

A notice of pending action ("lis pendens") is the most common companion to a wrongful foreclosure action. A lis pendens is recorded in the county in which the real property security is located at the time the wrongful foreclosure action is filed. The only requirement for a lis pendens to be recorded is an attorney’s signature that the action which is being noticed actually involves a real property claim. The purpose of the lis pendens is to put all third parties on notice that the borrower and the servicer are litigating over the real property security. Once a lis pendens is recorded, no title insurance company will issue a title insurance policy unless and until the lis pendens is removed. Although the servicer may "bond around" the lis pendens without title insurance, the real property security is virtually inalienable.

While a lis pendens can be filed at any time in the foreclosure process, a borrower applies for an injunction prior to the foreclosure sale with the intent of keeping the foreclosure sale at bay until issues in the lawsuit are resolved. The lawsuit can take anywhere from ten to twenty-four months. Generally, an injunction will only be issued if it appears to the court that: (1) the borrower is entitled to the injunction; and (2) that if the injunction is not granted, the borrower will be subject to irreparable harm. Like an action to expunge a lis pendens, a borrower’s application for an injunction is essentially a "mini-trial" on the merits.

There are important issues which are considered in nearly all injunctive relief action applications is the amount due and owing on the note and deed of trust. Again, it is imperative in any injunctive hearing that the servicer provide a detailed analysis of the amount it contends is due and owing on the note and deed of trust at issue. Sometime it is not possible for your servicer and they are unable to provide a breakdown of the amounts due and owing on the note and deed of trust at issue. Again, sometime they only can provide insufficient information to refute the borrower's allegations, it is likely the injunction will be issued. Now comes the question of producing a bond from the borrowers, and making timely payments. In many cases, judges make their own laws when they experience heart wrenching stories from the borrowers, and their sorrowful tales have a deeper impact upon the judges, the issue injunctions. Of course tough standards are required by Nevada judicial system in issuing these injunctions but sometime the judges issue minimal bonds and little or no debt service requirements. This worst case scenario translates into a servicer being unable to sell the security and receiving no payments on the underlying debt during the life of the lawsuit. In reality, judges are loath to modify an injunction after it is issued and prior to a decision on the merits. Once an injunction with little or no debt service or bond is in place, the wrongful foreclosure suit will be a long and expensive process because the borrower has lost all incentive for a quick resolution of the action.

Another way borrowers delay a servicer's recovery of its security through a wrongful foreclosure action is by consolidating their wrongful foreclosure action with their unlawful detainer action. Asuncion v. Superior Court (1980) 108 Cal. App. 3d 141. The Asuncion case which is usually relied upon by borrowers for consolidation contains an egregious fact scenario including clear fraud in the inducement of the loan. Judges however, do not limit the application of Asuncion to cases where fraud is alleged by the borrower. In applying Asuncion, a court can allow the unlawful detainer suit to be consolidated with the wrongful foreclosure action if there is a mere similarity of issues in the cases.
If the borrowers plays all the cards tactfully the final disposition of the case can be delayed anywhere from ten months to two years.

Nevada law provides many unique procedural remedies which may be employed in battling a wrongful foreclosure action. Judicious use of these procedures by counsel and close coordination between counsel and client can lessen the pain of defending a wrongful foreclosure action.

President of Mortgage Fraud Pled Guilty in Loan Mod

President Of Metropolitan Money Store Pleads Guilty In Over $35M Mortgage Fraud Scheme Joy Jackson, 41, Fort Washington, Maryland, pleaded guilty to conspiracy to commit mail and wire fraud in connection with a mortgage fraud scheme. The accused promised to help homeowners facing foreclosure to keep their homes and repair their damaged credit.

According to her plea agreement, Jackson was a licensed mortgage broker, but was not licensed to provide credit repair. In May 2005, Jackson and coconspirator Jennifer McCall incorporated Metropolitan Money Store, located in Lanham, Maryland, which offered foreclosure consultation and credit services to financially distressed homeowners. Also at that time, Jackson and other coconspirators incorporated Fordham & Fordham Investment Group, Ltd. (F&F) based in Lanham and Greenbelt, Maryland to assist Metropolitan Money Store in its foreclosure consulting and credit servicing business.

From September 2004 to June 2007, Jackson, McCall and others conspired to fraudulently promise to help homeowners, who had substantial equity in their homes but were facing foreclosure because of their inability to make monthly mortgage payments, avoid foreclosure and repair their damaged credit. The homeowners were directed to allow title to their homes to be put in the names of third party purchasers (the straw buyers) for a year, during which time Metropolitan Money Store promised to improve the homeowners’ credit ratings, help them obtain more favorable mortgages, and eventually return title to their homes to them. The homeowners were told that the equity withdrawn from the properties would be used to pay the mortgage and expenses on their homes and to repair their credit. The straw buyers were paid up to $10,000 to participate in the scheme and allow the properties to be put in their names. Jackson also served as a straw buyer on several properties in Maryland.

Using the homeowners’ properties, the conspirators applied for mortgages to extract the maximum available equity from the homes, and prepared and submitted fraudulent loan applications to mortgage lenders to obtain inflated loans on the target properties in the straw buyers’ names. At settlements, the conspirators imposed numerous fees and required “seller contributions” which were far in excess of industry standards; they imposed fees for services which were not performed, disclosed or explained to the homeowners; and they transferred the sale proceeds out of the escrow accounts into the conspirators’ business and personal bank accounts and converted a substantial portion of those funds to their personal use.

In order to carry out the fraud scheme, Jackson and others obtained large cashier’s checks in the names of straw buyers and Metropolitan Money Store employees in order to conceal transactions from the lenders. Jackson misappropriated the license and bond numbers of other brokerage and credit repair companies and used them to broker loans and fraudulently improve homeowners’ credit scores by adding fictitious lines of credit to their credit histories.

During the conspiracy, Jackson and McCall provided a co-conspirator acting as a closing agent with more than $100,000 in kickback payments to process real estate closings quickly. Moreover, whenever Jackson requested, the closing agent permitted Metropolitan Money Store employees to close loans without him or any other closing agent being present. She directed others to prepare fraudulent settlement documents that contained false information. Jackson also paid bank employees to provide false income balances for straw buyers to lenders; add straw buyers and others onto accounts for lender verification purposes; transfer money into accounts to show a certain amount of money was in a bank account and thereafter return those funds to the original account; and shift money between Metropolitan Money Store and F&F accounts to facilitate loans in straw buyer’s names.

Finally, Jackson directed others to transfer the equity proceeds of homeowners into the general checking accounts of Metropolitan Money Store and F&F, as well as Jackson’s personal accounts. Jackson withdrew these funds and paid for goods and services for herself, including art, cars, clothing, credit card bills, homes, fur coats, furniture, airline trips, gambling expenses, jewelry, limousine services, student tuition and a luxury wedding for herself and a conspirator.

As a result of this scheme, the total loss attributable to Jackson, including the estimated losses to the mortgage lenders, is $16,880,884.86.

Jackson faces a maximum sentence of 30 years in prison and a $1 million fine for the conspiracy. U.S. District Judge Roger W. Titus scheduled sentencing for November 16, 2009 at 9:00 a.m. As part of her plea, Jackson has agreed to pay restitution for the full amount of the victims’ losses, and forfeit three residential properties in Oxon Hill, Capitol Heights and Laurel, Maryland, and three vehicles.

Jackson is the seventh defendant to plead guilty in the Metropolitan Money Store mortgage fraud scheme. Jennifer McCall, 47, Ft. Washington, Maryland, a chief executive officer of Metropolitan Money Store and owner of JC and JC Investments LLC; Katisha Fordham, 35, Washington, D.C., a loan processor at the Metropolitan Money Store. Richard Allison, 37, Camp Springs, Maryland, an attorney and employee of the U.S. Census Bureau; Clifford McCall, 47, Lanham, Maryland, president of Burroughs & Smythe Financial Services, Inc., based in Lanham and a director of the Fordham & Fordham Investment Group, Ltd., a foreclosure consulting and credit servicing business based in Lanham and Greenbelt, Maryland; Carlisha Dixon, 31, Hyattsville, Maryland, vice president and a director of Burroughs & Smythe Financial Services, Inc.; and Chandra Jones, 31, Lanham, Maryland, the daughter of co-defendants Jennifer and Clifford McCall, each. pleaded guilty to the conspiracy and are facing a maximum sentencing of 30 years in prison. Three defendants remain scheduled for trial on July 7, 2009.

United States Attorney for the District of Marylan. Rod J. Rosenstein made the announcement.

“Joy Jackson presided over a ‘money store’ that was in the business of ripping off homeowners and mortgage lenders by submitting fraudulent paperwork to support over $16 million of loans that were never intended to be repaid,” said U.S. Attorney Rod J. Rosenstein. “Instead of helping financially distressed homeowners keep their homes as promised, she secretly used their home equity to buy luxuries for herself, includin. furs, jewelry and over $800,000 on her wedding.”

“These types of crimes create a significant loss of tax revenue, drive buyers into foreclosure, and leave lenders burdened with bad loans,” stated C. Andre’ Martin, Internal Revenue Service-Criminal Investigation Special Agent in Charge. “IRS-CI is committed to pursuing individuals who create such havoc.”

United States Attorney Rod J. Rosenstein thanked the Federal Bureau of Investigation, U.S. Secret Service, Internal Revenue Service-Criminal Investigation and the Maryland Department of Labor, Licensing and Regulation’s Division of Financial Regulation Investigative Unit for their investigative work. Mr. Rosenstei. commended Assistant United States Attorneys James A. Crowell IV and Christen Sproule, who are prosecuting the case.

How to Do Your Loan Modification Review for Violations?

How to Do Your Mortgage Documents Review?
For Loan Violations?

Fore best evaluation of your claim on any of the predatory lending violations, it is necessary to do a loan audit. A loan audit is a good thing: but by who? Too many claims an expertise in this field of art. It is a bit mathematics, and a bit law. But definitely not a forensic science which they label. Are they gradute of some forensic science laboratory? Forensic my foot! Too many of them are fraudster and former loan officers, blackjack dealers etc., who spread this mess in the first place. Some of them should have been behind bars. Check their resume, they are loan officers, valet parking lot attendants, and managers of loan companies, who were actually wolves, and now working in sheep’s clothing. No disrespect meant to these respectable professions but that experience is not material here.

Fortunately, we do not vouch for any speciality in this game, unlike lots of others despite having a strong background in loans, mortgages, real estate and other allied fields. Most of them have actually no expertise in it. Truthfully, even if they find anything, any sort of violations of any of the predatory lendign laws, what exactly they can do? They are not licensed to litigate or practice law. They still have to find an attorney willing and knowledgeable in this filed which again is very complex, to litigate and eventually win. Your loan audit, or so called forensic auditor cannot do that. He would charge a hefty sum of $900 or more and give you a computerized printout which may be more than half wrong, and half just assumptions which can be wrong or not.

In order to properly evaluate a claim for mortgage litigation, it will become necessary to do audit you closing documents for violations of state and federal lending laws. We can audit your loan documents well before suit is file to give us the best chance at settlement prior to going to court. We can ask your lender to simply change the terms of your loans based on these violations, and they would listen because it is backed up with the forece of an attorney. When attorney talks, everyone listen–because they mean business, and of course litigations which is very expensive for all the parties. Many lenders will agree to make changes to your loan.

What documents do you need?

In most cases you can get all of the information you need from the following five or six loan documents:

Truth in Lending Disclosure Statement

–(3-Day) Notice of Right to Cancel
–HUD-1 (or HUD-1A) Settlement Statement
–Mortgage and Note (with any riders or attachments)
–Uniform Residential Loan Application
–HOEPA (or “Section 32″) Notice (if lender treated loan as a HOEPA loan)

What we look for?

Violations of the following federal and state laws may entitle the borrower to a reduction in the amount they owe on a refinance or home equity loan.
–Truth in Lending Act (TILA):
–Does the TILA Disclosure Statement clearly and conspicuously display each of the following?
–Annual Percentage Rate (APR)
–Finance Charge
–Amount Financed
–Total of Payments
–Payment Schedule
–APR
–Total of Payments
–Are the disclosures accurate given an independent analysis of the charges?
–Amount Financed (i.e., do we think the lender left out something)
–Did the borrower receive a proper (3-Day)Notice of Right to Cancel?
–Does this loan qualify for Home Ownership and Equity Protection Act protection?
–Real Estate Settlement Procedures Act (RESPA):
–Yield-spread premium (YSP) paid to broker (listed on HUD-1)
–Separate broker fee listed
Is three times the YSP enough to offset the amount the borrower was in default when sued?
–Equal Credit Opportunity Act (ECOA):
–Loan application sets forth requested terms (interest rate, loan amount, fixed-rate)
–No written counter-offer (within 30 days) to terms requested
–Loan includes terms worse than those requested in loan application

Show Me The Note Baby!

Show Me The Note!
To recover on a promissory note, the plaintiff (the lender in the case of foreclosure) must prove:

(1) the existence of the note in question;
(2) that the party sued signed the note;
(3) that the plaintiff is the owner or holder of the note in due course; and
(4) that a certain balance is due and owing on the note.

It is also true, in mortgage foreclosures, prove up of the claim requires presentment of the “ORIGINAL” promissory note and general account and ledger statement. Claim of damages, to be admissible as evidence, must incorporate records such as a general ledger and accounting of an alleged unpaid promissory note, the person responsible for preparing and maintaining the account general ledger must provide a complete accounting which must be sworn to and dated by the person who maintained the ledger.

1) the existence of the note in question

2) If the “ORIGINAL” note you signed in ink that contains your signature is claimed to be lost, stolen, missing and/or destroyed, then your defense is as follows:

3) the “named” Plaintiff is not the ‘holder in due course” of the note and only an agent or nominee for the true beneficial owners and holders in due course;4) there may be fraud upon the court in that the named Plaintiff may not have ANY interest to the note and that the supposedly lost note is not lost, but may have been intentionally destroyed due to missing assignments on the note which may have made it void and a legal nullity, thus they have exploited key and vital evidence;

5) there is no proof that the named Plaintiff ever held the note or took possession of the note and thus has no claim or right to bringing about the foreclosure;

6) there is no proof, without the note, that a proper chain of assignments took place and that the lien positions were properly perfected;

7) other unnamed and disclosed real parties in interest may have a claim to the note and be the rightful beneficial owners to the note and must be identified and brought before the court;

There may be several unnamed and disclosed real parties in interest may have a claim to the note and be the rightful beneficial owners of the note;

8) that the party sued signed the note

9) If the “ORIGINAL” note you signed in ink that contains your signature is claimed to be lost, stolen, missing and/or destroyed, then you need to notify me and also put on affirmative defenses that:
10) the note in question is not the note you signed and executed in ink and only the one you signed in ink that presumably contains your fingerprints can be relied upon by your handwriting analysis expert;

11) in an electronic age, it is a simple matter to place someone’s signature or image upon a document and that it is very difficult to imagine such a valuable negotiable instrument being lost or missing without a nefarious motive.

12) that the plaintiff is the owner or holder of the note in due course;

13) If the “ORIGINAL” note you signed in ink that contains your signature is claimed to be lost, stolen, missing and/or destroyed, then you need put on affirmative defenses that:a) the mortgage industry, investors, and GSE’s such as Fannie Mae, Freddie Mac, and FHLBs etc. have a requirement that the last endorsement to them be undated and “blank” leaving the payee line blank and making the negotiable instrument a sort of “bearer bond” and instrument. as such, any party finding or stealing the note can place their name on the payee line, claim ownership of the note, and sell the note to others who may make a demand upon you in the future. as such, you require money to be deposited in an escrow account or with the court in an amount equal to the amount claimed owed on the note, until such missing note is found or upon your death. notes have a life of their own…

14) if the note was destroyed or lost intentionally (the industry maintains this practice) then they may be trying to hide the beneficial owners and shield them from any assignee liability arising from the actions of the servicer who they hire, supervise and most importantly authorize to foreclose upon you. without the note, since subsequent endorsements are not recorded to avoid payment of taxes and t hide true and real beneficial interests, there is no possible way to determine who ever held a rightful interest in the note and who you may have claims or counter claims against and who should be presently before the court as a real party in interest.

15) Furthermore, if there are missing assignments of the original note and the assignment went from Lender A to Lender B to Lender D without an intervening assignment from Lender B to Lender C and From Lender C to Lender D, then the note may be void and a legal nullity in your state.

16) It is industry practice to not name the GSE, investor, or real party in interest in foreclosure and to use as a front for the Plaintiff:

i) The very original lender who may or may not even be in business any more or sold their interest in the note long ago, only to have a claim made upon them for repurchase;

ii) A Servicer of even “special servicer” who is acting as an agent for the investors, GSE’s or real party in interest, but has no beneficial ownership in the note since they are only being paid to collect and foreclosure by the real parties in interest

iii) A “nominee” such as MERS who has no legal authority to foreclose upon you and do business in your state and who according to their own written documents and verbal assurances never hold the note or own “any” beneficial interest in the note!!!!!

17) Notes are pledged, sold, bifurcated, and traded in various derivative transactions.
Only possession of the actual original note can prove the actual owner and holder in due course of the note and who you can make an offer of payment to for purchase of the note by yourself, another family member or partner.

You have a right to know the rightful owner of the note so an offer for payment of the note at a discount and at fair market value can be made. If the note has been pledged and encumbered, then that party must be made aware of the foreclosure and your right to negotiate with them a payment and release of the note by you, other lien holders or private parties;

18) Notes are traded often and you need to inspect the physical note to see who the real prior parties were that held and endorsed your note since you may have counter and cross claims against them and need to bring them before the court for the action, since they may have improperly inflated your principal balance, amount owed or escrow account by not applying your payments correctly; adding fees not legally owed by you to the principal balance; miscalculating the interest and not properly amortizing your loan; fraudulent selling your loan or misreporting you on your credit report.

19) Federal Circuit Courts have ruled that the only way to prove the perfection of any security [including promissory note] is by actual possession of the security. Current or prior possession must be proved up.

20) that a certain balance is due and owing on the note.

21) You must have the master transaction histories and general ledgers for the account since a “dump,” “summary,” or redacted record cannot be relied upon to determine the rightful amounts owed by having a complete audit of your account. In order to conduct a proper audit, master records and all prior records must be compiled, reviewed, analyzed, and reconciled. In is not you responsibility to prove each payment was made. It is your responsibility to say a payment was made and provide evidence, including your word that it was made. It is the note holder’s duty and responsibility to validate the claims being made on the note and the amount owed. If they have the master records or claim that the records of prior servicers are missing, then there is no rightful way for anyone to prove up the balances and amounts they claim are owed!!!! Furthermore, you must claim:

a) That the principal balance claimed owed, is not owed, and is the wrong amount.

b) That the loan has not been properly credited and amortized;

c) That the current servicer cannot be relied upon to testify and certify that prior amounts, transactions, credits, debits, charges and fees added by prior servicers were indeed proper and correct and that the account they were transferred was properly amortized and credited. As such, the person holding the ledgers at the prior servicer must come and testify as to the amounts owed on the note.

d) dumps and summaries of amounts owed cannot be relied upon and only original ledgers and master records and the keeper of those records cant testify as to the amounts claimed owed and due.

Supporting Case Law
Where the complaining party cannot prove the existence of the note, then there is no note.
See Pacific Concrete F.C.U. V. Kauanoe, 62 Haw. 334, 614 P.2d 936 (1980), GE Capital Hawaii, Inc. v. Yonenaka 25 P.3d 807, 96 Hawaii 32, (Hawaii App 2001).

Siwooganock Bank in Lancaster NH, in alleged foreclosure suit, failed or refused to produce the actual note which Siwooganock alleges Eva J. Lovejoy owed.

To recover on a promissory note, the plaintiff must prove: (1) the existence of the note in question; (2) that the party sued signed the note; (3) that the plaintiff is the owner or holder of the note; and (4) that a certain balance is due and owing on the note. See In Re: SMS Financial LLC. v. Abco Homes, Inc. No.98-50117 February 18, 1999 (5th Circuit Court of Appeals.)

Volume 29 of the New Jersey Practice Series, Chapter 10 Section 123, page 566, emphatically states, “…; and no part payments should be made on the bond or note unless the person to whom payment is made is able to produce the bond or note and the part payments are endorsed thereon. It would seem that the mortgagor would normally have a Common law right to demand production or surrender of the bond or note and mortgage, as the case may be. See Restatement, Contracts S 170(3), (4) (1932); C.J.S. Mortgages S 469, in Carnegie Bank v, Shalleck 256 N.J. Super 23 (App. Div 1992), the Appellate Division held, “When the underlying mortgage is evidenced by an instrument meeting the criteria for negotiability set forth in N.J.S. 12A:3-104, the holder of the instrument shall be afforded all the rights and protections provided a holder in due course pursuant to N.J.S. 12A:3-302″

Since no one is able to produce the “instrument” there is no competent evidence before the Court that any party is the holder of the alleged note or the true holder in due course. New Jersey common law dictates that the plaintiff prove the existence of the alleged note in question, prove that the party sued signed the alleged note, prove that the plaintiff is the owner and holder of the alleged note, and prove that certain balance is due and owing on any alleged note. Federal Circuit Courts have ruled that the only way to prove the perfection of any security is by actual possession of the security.

Supporting Case Law
Unequivocally the Court’s rule is that in order to prove the “instrument”, possession is mandatory.
See Matter of Staff Mortg. & Inv. Corp., 550 F.2d 1228 (9th Cir 1977). “Under the Uniform Commercial Code, the only notice sufficient to inform all interested parties that a security interest in instruments has been perfected is actual possession by the secured party, his agent or bailee.” Bankruptcy Courts have followed the Uniform Commercial Code. In Re Investors & Lenders, Ltd. 165 B.R. 389 (Bankruptcy.D.N.J.1994), “Under the New Jersey Uniform Commercial Code (NJUCC), promissory note is “instrument,” security interest in which must be perfected by possession.

How to Defend Foreclosure in Nevada?

How to Defend Foreclosure In Nevada?
[This article is not a substitute for an attorney advice. If you have more specific questions, please contact a licensed attorney, and that too a Nevada licensed attorney. Malik Ahmad attorney & Counselor at law.]

Welcome to one of the toughest battle of your life.

Ladies and gentlemen: Please tighten your seatbelt. This ride is difficult, and very scary for your lenders.

First of all, I suggest that a consumer has to be educated to be well equipped in this field. It does not mean that you call various law offices, and get tidbits of legal information and fight back. If you can afford, by all means hire an attorney. They have wealth of knowledge and can see a remedy from different angles. Truthfully, there is no substitute for an attorney. I caution against people who are doing it as pro se. Judges frown upon them. They tie up the important times and values of court. Judges throw their cases out on the smallest procedural violations and pretext. Most of the judges are former attorneys and never secretly like pro se folks, not because they hate their causes because of their actions slow down the process for everyone, and takes up important court time for other important matters. When attorneys are involved, things starts moving fasts, phone calls are returned, letters are replied swiftly. You know why because lawsuits are very expensive even for the rich lenders. Now let us discuss some of the weapons in your arsenal.

1. Truth in Lending Act (TILA) - Does your loan have legal violations? Are you the victim of predatory lending? Did you know that 90% of victims do not even know they are victims? The law is designed to protect consumers in credit transactions by requiring clear disclosure of key terms of the lending arrangement and all costs.

By far, this is the most abused laws by lenders and the one that has the most teeth. It has the most potent weapon of rescission. Yes, normally there is three days period provided, if you can prove the violations, the rescission period can be extended to three years.

Homeowners can use this defense even if they are not late on their mortgage and an effective tool to bring litigation against their lender.

Here are some very important Truth in Lending Act cases:
Class Action Under the Truth in Lending ActAndrews v. Chevy Chase Bank, FSB (2007 WL 112568, E.D. Wisconsin, January 16, 2007).

Borrowers alleged that the lender: (1) failed to properly disclose the payment schedule because the schedule did not reflect that the required payments were due monthly;

(2) did not clearly disclose the APR and variable rate feature, based in part on disclosures reflecting a note rate of 1.950% and a five year fixed period that applied to the payment and not the rate;
(3) added information to the TILA disclosure that was not directly related to the information required to be disclosed (i.e., the initial discounted interest rate of 1.950% set forth as the note rate);
and (4) failed to properly disclose the possibility of negative amortization.

The federal district court agreed with the first three allegations and determined that the loan was rescindable because of the violations. The court further determined that this matter was appropriate for class certification, finding nothing in the language of the TILA that precludes the use of the class action mechanism to obtain a judicial declaration of whether a TILA error entitles each member of the class individually to seek rescission.

The MBA and other industry trade groups have 2 filed an amici curiae brief requesting that the United States Court of Appeals for the Seventh Circuit overturn the class certification.

Right to Rescind After Loan Pay-Off Barrett v. JP Morgan Chase Bank, N.A. (445 F.3d 874, 6th Cir., April 18, 2006). The borrowers refinanced their mortgage with Bank One in May 2000 and again in January 2001. In May 2001, the borrowers refinanced the loan with another lender, and Bank One released its security interest in their home. The borrowers requested that the Bank One loans be rescinded based on alleged TILA violations.

Bank One responded that because both loans were refinanced, and the security interest released, there was nothing left to rescind. The district court agreed, but the United States Court of Appeals for the Sixth Circuit reversed.

The Sixth Circuit stated that nothing in the TILA or its implementing regulations provides that the act of refinancing extinguishes an unexpired right to rescind, and that the right to rescind gives consumers the right to recover fees in addition to the right to the release of the security interest.

2. Challenge the Ownership of Your Note - Does your lender really own your mortgage? Are you sure? Why don’t you make them prove it?

Judge Christopher A. Boyko of the Eastern Ohio United States District Court, on October 31, 2007 dismissed 14 Deutsche Bank-filed foreclosures in a ruling based on lack of standing for not owning/holding the mortgage loan at the time the lawsuits were filed.

Judge Boyko issued an order requiring the Plaintiffs in a number of pending foreclosure cases to file a copy of the executed Assignment demonstrating Plaintiff (Deutsche Bank) was the holder and owner of the Note and Mortgage as of the date the Complaint was filed, or the court would enter a dismissal.
More on RESPA, HOEPA later in our next column.

Details of Foreclosure Process in Nevada

Foreclosure Process in Nevada; DetailsForeclosure in Nevada?
How, Whys, and Defense?

By Malik W. Ahmad Attorney at Law
[Malik Ahmad is a licensed attorney and admitted to practice to the Supreme Court of Nevada] He can be reached at (702) 270-9100 or by email at Malik11397@aol.com. His areas of practice includes loan modification based on TILA/RESPA & HOEPA violations, general civil and business litigation, including bankruptcy, and general real estate practice.

All loans in real estate property are considered secured loans. Whenever there is collateral attached to a loan, it is called secured loan. Unsecured loans are mostly credit cards loans and which have no collateral attached with them. Here, in Nevada, and in the real estate context, all loans are secured because they are attached with property. When a loan secured by your lender goes into default, the secured creditor has a right to initiate foreclosure proceedings to take over this collateral. The lender has two choices, one is judicial foreclosure, and the other is non judicial or statutory foreclosure. Also, these days lenders are using other tactics like workout package, surrender deed in lieu of foreclosure, short sale, and of course the much touted loan modifications. A foreclosure happens much after all these remedies or solutions are exhausted. Lenders does not like to lose money and like the homeowners likes to pursue all of the options at all the times. A workout package may or may not work because the lender is exploring all the choices where the homeowners can be made current.

In a workout package, the lender sees your financial situation, the nature and value of your collateral and whether there are advantages which can be accomplished through the workout package. In almost all cases, sooner you talk to your lenders; they would suggest a workout package. The lender may send a workout package. Also, it may follow a forbearance period. There is no uniform method of conducting such negotiation, each lender has their different guidelines and of course very skilled negotiator for this purpose.

A deed in lieu of foreclosure:

The borrower executes a deed where he conveys the property to the secured creditor in lieu of conducting the foreclosure sale. This way the lender becomes the owner of the property without going through the hassle of foreclosing and avoiding extra expenditure of publication. It is a voluntary matter from the borrower where no money in return can be expected. Sometime the borrower offers some money in exchange of clean returning the keys and up keeping the property during the transition times. This paper, however, only discusses situation after the workout package is exhausted or not discussed. There are some advantages of deed in lieu of foreclosure:

1. Quick negotiation process.
2. Borrower avoids negative publicity.
3. Less expensive for the lenders, does not pay for publication of notices.
4. No recordation of documents with the county or recorders office.
5. There is no public record of any kind created.
6. Borrower may obtain some legal as well financial concession from the lender.
7. May stay in the property for sometime without paying any mortgage payments.
8. The foreclosure process is lengthy and parties can avoid for some mutual benefits.
9. Lenders can do to avoid potential bankruptcy problems.
10. The borrower can negotiate the reporting of foreclosure to the credit reporting agencies. A foreclosure on a credit agency is extremely damaging, and the creditors may be approached to report such foreclosure in a more human and decent way.
11. The lenders can have an immediate possession of the property.
12. A deed in lieu of foreclosure does not eliminate junior encumbrances. The lender that takes a deed in lieu of foreclosure takes the title subject to those junior encumbrances. The lender takes over these encumbrances and therefore the rights of secondary lien holders.
13. The lenders who accepts this deed in lieu of foreclosure also loses the right to pursue a deficiency judgment against the borrowers or guarantors either as a matter of law or as a matter of contract. See Maloney v. Boston five Cents Savings Bank FSB, 422 Mass. 431, 436, 663 N.E. 2d 811, 815 (1996). Both parties should pay particular notice to the doctrine of merger.
14. Doctrine of Merger: When one party holds both a fee interest in property and lien on the same property, the lesser interest will merge into the greater interest. See Alladin Heating Corp. v. Trustee of the Central States Pension Plan, 93, Nev. 257(1977) (holding that whether merger occurs is dependent upon the intent of the parties). If a merger occurs, junior liens increase in priority as a result of removal the senior lien held by the lender. If there are junior liens of the property, therefore, the lender may prefer that its higher priority lien remain of record after the conveyance by the deed in lieu.

15. Another pitfall is that if the borrower files a bankruptcy, this can be considered a collusive transaction. The bankruptcy code and state law allow a bankruptcy trustee to avoid certain transfers of property that are made prior to a bankruptcy filing known as “fraudulent transfers” 11 U.S.C. Section 548(a)(1)(B); NRS 112.180,., 190. A transfer of property through a deed in lieu of foreclosure is a voluntary transfer that is not subject to the “protections” of the foreclosure process. See Main v. Brim, 75 B.R. 322, 327 (Bankr. D.Az. 1987)

Foreclosure Process in General in Nevada:
Most of the loans are premised upon continuous payments to the lenders. If these payments are not timely paid, or not continuously paid, the borrowers can start the foreclosure process. The lender reviews the loan documents and determines about the occurrence of a default. Failure to make loan payments triggers this default process. Also, it is contingent upon events which have not been corrected by payments or failure of a workout package.

A trustee under a deed of trust may exercise its statutory power of sale without the judicial intervention. In Nevada, the foreclosure is mostly a statutory foreclosure. (NRS 107.080(1)). Judicial foreclosures are also permitted under Nevada law (NRS 40.430-40.450) but judicial foreclosures are not the preferred choice in Nevada for most of the lenders because of the looming danger of the right of redemption. Upon default, the initial step is for either the beneficiary or the trustee to execute a notice of breach and election to sell, which is usually accompanied by an unrecorded Declaration of Default. (NRS 107.080(2)(b)). The beneficiary executes the notice, but the trustee records it. The notice of breach and election to see must be recorded in the county in which the property encumbered by the trust deed is situated. This notice must also be mailed (notice of breach and election to sell) by registered or certified mail, return receipt requested with postage prepaid, to the address of the trustor and to the person who holds the title of record, if known, otherwise to the address of the property. (NRS 1076.080(3)

Notice of Default and Election to Sell?1. Must describe the property

2. Must describe the deficiency in performance of payment.

3. May contain a notice of intent to accelerate the entire unpaid balance if the terms of the obligations so permit (NRS 107.080(3).

4. Within 10 days of recording and mailing the notice of default to the trustor, copies of the notice must also be sent by registered or certified mail, return receipt requested, to each person who has either (1) filed a request for a copy of the notice; or (2) holds a record interest in the property subordinate to the deed of trust being foreclosed. Additionally, 20 or more days before the sale, the trustee must mail a copy of the notice of the time and place of the sale to the same parties by register3ed or certified mail, return receipt requested. (NRS 107.090.)

5. Nevada laws make it immaterial whether the notice is actually received by the trustor. The notice is effective nonetheless. (Turner v. Dewco Services, Inc., 87 Nev. 14, 479 P. Wd 462 (1971)

6. NRS 107.080(2)(a) provides that no power of sale may be exercised unless the trustor or his successor in interest, a beneficiary under a subordinate deed of trust or any other person with a subordinate lien or encumbrance of record (referred to below as “trustor or interested person”) has, for a period of 35 days, “failed to make good the deficiency in performance or payment….” The 35-day period commences on the first day following the day upon which the notice and election is recorded and mailed to the grantor and to the record owner of the property in the manner specified above. (NRS 108.080(3). If the trustor other interested persons “make good” the deficiency in payment or performance within the 35-day period, the trustee’s power of sale may not be exercised, and the obligation may not be accelerated. NRS 107.080(2)(a), (3). The 35-day period in the statute exists independently of any notice or cure periods contained the applicable notes or deeds of trust. If the notice of breach contains a permitted election to accelerate and the breach is not cured within the 35-day period, the trustor or other interested persons can thereafter only prevent the sale by tendering the entire unpaid balance of the obligation, as well as any costs, fees and expenses incidents to the preparation or recordation of the notice and incident to the making good of the deficiency in performance or payment (NRS 107.080(3).

What is the Procedure for Trustee’s Sale?

When three months have elapsed from the date of the recordation of the notice of breach and election to sell, the trustee may give notice of the time and place of the trustee’s sale, which notice must be given in accordance with the statutory provisions for execution sales of real property – posted notice in three public places for 20 successive days and published once a week for three consecutive weeks. (NRS 107.080(4);231.130(1)©. The trustee’s sale may be held at the office of the trustee anywhere in Nevada, even if it is not in the county where the property being sold is located. (NRS 107.080(4).

If the power of sale is exercised in compliance with the Nevada statute, the purchaser is vested with the title of the trustor, without equity or right of redemption NRS 107.080(5).

What are the Guarantor’s Rights to Notice and Subrogation?

The notice of breach and election to sell must be mailed by certified mail, postage prepaid, to each guarantor or surety of the debt at the address of each if known, or at the address of the trust property. The notice must also be mailed to any other obligor who has filed a request for a copy of the notice under NRS107.090. Failure to provide such notice would release that guarantor, surety or obligor from liability on the obligation. (NRS 107.095(1).

Under NRs 107.095(3) a guaranty, surety or other obligor is not released if the required notice is give at least fifteen (15) days before the later of the expiration of the 35-day period described in NRs 107.080 or any extension of that period by the beneficiary, or if the notice of default is rescinded before the sale id advertised.

Upon full satisfaction by the guarantor, surety or other obligor, other than the trustor, of the indebtedness secured by a mortgage or lien, the paying guarantor or obligor is entitled to enforce every remedy which the beneficiary has against the trustor, and is entitled to an assignment from the beneficiary of all of the rights the beneficiary then has by way of security for the payment or performance of the trustor. NRS 40-475 (1989). Such an obligor is also entitled to subrogation, junior only to the secured lender’s rights, in the case of partial satisfaction of the indebtedness. (NRS 40.485 (1989). These rights may only be waived by the guarantor, surety or other obligor after default. NRS 40.495(1)(1989).

What are the rights under One Action Rule?
In Nevada, a deficiency judgment can be filed under non statutory foreclosure provisions without having filed a judicial foreclosure.

What is a deed of Trust in Nevada?

The most common type of security interest in real property in Nevada is a Deed of Trust. A DOT has three parties.

Lender: It is the first party who is referred to as “Beneficiary.”
Borrower: It is the second party who is referred to as the “Maker”, or “Grantor”, or “Trustor” who conveys legal title to the property to the Trustee.
Trustee: This is the third party who holds legal title to the property.
Process: A DOT can be foreclosed in a simple process and cheaper as well. A Trustee sells the property encumbered by the DOT. All the lender needs to do in order to foreclose on a DOT is to determine that an even of default has occurred under the DOT and have the trustee conduct non-judicial foreclosure proceedings. Here, in Nevada, the trustee sale does not entail redemption. The borrower, in Nevada, does not have the statutory rights of redemption unlike the judicial foreclosure where the right of redemption lasts one year. Compare NRs 107.080(5) (no right of redemption in a foreclosure on a DOT ) with NRs 21.210 (one year period of redemption).

Determination of Default.

Your default notice also consists of a determination of default. It can be monetary or non monetary. Monetary is when it is linked to borrowers failure to pay, failure to pay property taxes, failure to pay homeowners association assessments and failure to pay special improvements and other assessments against the property. The non monetary events of default are spelled out in the notice of default and Deed of Trust as well as related loan documents. They can be failure to insure property, the failure to maintain debt service coverage ratios and waste.

Acceleration of Obligation:
A trustee under a deed of trust may exercise its statutory power of sale (commencement of foreclosure process) without judicial intervention in Nevada. NRS 107.080(1). Judicial foreclosure is also permitted under Nevada laws though seldom exercised. (NRs 40.430-40-450). They carry with them a one year right of redemption which lenders does not like it as they like to close this chapter once for all.

Steps in Foreclosure:
1. The beneficiary or the trustee to execute a notice of breach and election to sell which is usually accompanied by an unrecorded

Declaration of Default. (NRS 107.080(2)(b). The beneficiary executes the notice, but the trustee records it. The notice of breach and election to sell must be recorded in the county in which the property encumbered by the trust deed is situated. The notice of breach and election to sell must also be mailed by registered or certified mail, return receipt requested with postage prepaid, to the address of the trustor and to the person who holds the title of record, if known, otherwise to the address of the property. (NRS 1076.080(3).

2. The notice and election must describe the deficiency in performance or payment, and may contain a notice of intent to accelerate the entire unpaid balance if the terms of the obligation so permit. (NRS 107.080(3).

3. Within ten days of recording and mailing to the trustor the notice of default, copies of the notice must also be sent by registered or certified mail, return receipt requested, to each person who had either (1) filed a request for a copy of the notice; or (2) holds a record interest in the property subordinate to the deed of trust being foreclosed. Additionally, 20 or more days before the sale, the trustee must mail a copy of the notice of the time and place of the sale to the same parties by registered or certified mail, return receipt requested. (NRS 107.90)

4. Under Nevada law, it is immaterial whether the notice is actually received by the trustor. Turner v. Dewco Services, Inc., 87 Nev 14. 479 P.2d 462 (1971).

5. NRS 107.080(2)(a) provides that no power of sale may be exercised unless the trustor or his successor in interest, a beneficiary under a subordinate deed of trust or any other person with a subordinate lien or encumbrance of record (trustor or interested persons) has, for a period of 35 days, “failed to make good the deficiency in performance or payment….” The 35-day period commences on the first day following the day upon which the notice and election is recorded and mailed to the grantor and to the record owner of the property in the manner specified above. NRS 107.080(3). If the trustor or other interested person “make good” the deficiency in payment or performance within 35-day period, the trustee’s power of sale may not be exercised, and the obligation may not be accelerated. NRS 107.80(2)(a),(3). The 35-day period in the statue exists independently of any notice or cure periods contained in the applicable notes or deeds of trust. If the notice of breach contains a permitted election to accelerate and the breach is not cured within the 35-day period, the trustor or other interested persons can thereafter only prevent the sale by tendering the entire unpaid balance of the obligation, as well as any costs, fees and expenses incident to the preparation or recordation of the notice and incident to the making good of the deficiency in performance or payment. NRS 107.080(3).

6. Nevada Revised Statutes Chapter 107 governs Deeds of Trusts. The transfer of real property may be made in trust to secure loans and other obligations. See NRs 107.020. In the event a transfer is made in trust to secure payment, the Trustee is granted a power of sale which may be exercised if an event of default has occurred. See generally NRS 107.080.

How a Foreclosure Process in Nevada is Commenced?

1. The lender must first determine that an event of default has taken place.

2. The lender employs the Trustee or a successor.

3. The Trustee will prepare and record in the Office of the County of Records of the County in which the property is located a Notice of Default and Election To Sell. (NRS 107.080).

4. The Notice of Default and Election to Sell must be mailed by registered or certified mail, return receipt requested Election to Sell must be mailed by registered or certified mail, return receipt requested and postage prepaid, to the grantor of the Deed of Trust, the person who holds title of record on the date of the Notice of Default and Election to Sell, each guarantor or surety of the debt, NRS 107.095(1), and any person who recorded a request for a Notice of Default and Election to Sell. (NRS 107.090.

5. On the first day after the Notice of Default and Election to Sell is recorded and sent by mail to all interested parties, the borrower and the other obligors are then given 35 days to make good the deficiency in payment or performance. NRS 107.080(2)(a)(2). This essentially allows the borrower or other obligors to de-accelerate the default under the Deed of Trust and terminate the foreclosure proceedings.

6. In the event the borrower or other party in interest fails to cure the deficiency in payment or performance, the Trustee must wait until the expiration of three months following the recording of the Notice of Default and Election to Sell (55 days after the 35 day reinstatement period expires) before giving notice of the time and the place for the sale of the real property (NRS 107.080). The notice of the time and place for the sale of the real property must be published in accordance with Nevada’s execution statutes.

Requirements of Publication for the Notice Under Nevada Laws.

Nevada statute requires the following publication of the notice of the date, time and place of the sale:

(1) Personal service or service by registered mail to the last known address of each person entitled to Notice of Default and Election to Sell;

(2) The posting of a similar notice particularly describing the property , for twenty days successively, in three public places of the township or city where the property is situated in or where the property is to be sold; and

(3) Publishing a copy of the Notice three times, once each week for three successive weeks, in a newspaper, if there is one the county. (NRS 21.130(c).

(4) In addition to the notice required by Nevada’s execution statutes, the Trustee is required to, at least twenty days before the date of the sale, deposit in the United States mail and envelope, registered or certified, return receipt requested and with postage prepaid, containing a copy of the Notice of time and place of sale, addressed to each person who has recorded a Request for Notice of Default and Sale. See NRS 107.090(4).

(5) If the Trustee fails to give any person liable to the beneficiary or any other person who has requested a Notice of Default and Sale the required notices, that person may be released of its obligation to the lender. NRS 107.095.

(6) NRs 107.080(4) allows the Trustee to conduct the sale at the Trustee’s office.

(7) At the foreclosure sale, the Trustee may sell the real property by public auction. Generally, the lender will provide the trustee with a minimum credit bid before the foreclosure sale. The amount of the credit bid may be for the full amount of the debt owed to the beneficiary or only a portion of what is owed to the beneficiary. Any person or entity may attend the foreclosure sale and bid for the real property.

What is Nevada’s “One Action Rule”?

Nevada has adopted a one-action rule. It provides that there may be only one action to collect a debt secured by a mortgage or other lien. The Nevada One Action rules provides: (NRs 40.430(1)-(3).

1. There may be but one action for the recovery of any debt, or for the enforcement of any right secured by a mortgage or other lien upon real estate. That action must be in accordance with the provision of this section and NRS 40.433 to 40.459, inclusive. In that action, the judgment must be rendered for the amount found due the plaintiff, and the court, by its decree or judgment, may direct a sale or the encumbered property, or such part thereof as is necessary, and apply the proceeds of the sale as provided in NRS 40.462.

2. This section must be construed to permit a secured creditor to realize upon the collateral for a debt or other obligation agreed upon by the debtor and creditor when the debt or other obligation was incurred.

3. A sale directed by the court pursuant to subsection 1 must be conducted in the same manner as the sale of real property upon execution, by the sheriff of the county in which the encumbered land is situated, and if the encumbered land is situated in two or more counties, the court shall direct the sheriff of one of the counties to conduct the sale with like proceedings and effect as if the whole of the encumbered land were situated in that county.

Conclusion: The Foreclosure–The End of the Dream:The foreclosure is the final and definitive step and the end of the whole nightmare process. There is no right of redemption for a non judicial foreclosure in Nevada. The acceptance of the winning bid concludes the bidding process. The execution sale is final and deprives the debtor of any entitlement to the rights of ownership in the property. It is final elimination of any liens on the property along with the junior encumbrances.

What is right of Redemption?

Few words on redemption: The foreclosure process may not be final unless a final remedy can be exercise in Nevada, and that is called right of redemption. There is no redemption in non judicial foreclosures. However, there is one year period of redemption in a judicial foreclosure sale in Nevada. Right of redemption is paying off all the existing monetary obligations up to and before the final fall of the hammer. The full amount may consist of all delinquent amounts, plus interest and attorney fees and other publication costs. Under Nevada law, there are no rights of redemption in connection with a properly conducted non-judicial foreclosure sale. NRS 107.080(5). There is one year right of redemption in a judicial foreclosure sale (NRS 21.210)

What is Deficiency Judgment, and Where This Money Will Come From?

As it is happening quite often these days, the Trustee will sell property at a foreclosure sale for less than the amount which is owed to the creditor or beneficiary under the Deed of Trust. Deficiency judgments are governed by NRs 40.451 to 40.459. The beneficiary must file the deficiency action within six (6) months after the date of the foreclosure sale or the deficiency action will be time barred. Specifically, NRS 40.455(1) provides:

Upon application of the judgment creditor or the beneficiary of the deed of trust within six months after the date of the foreclosure sale or the Trustee’s sale held pursuant to NRS 107.080, respectively, and after the required hearing, the court shall award a deficiency judgment to the judgment creditor or beneficiary of the deed of trust if it appears from the sheriff’s return or the recital of consideration and the trustee’s deed that there is a deficiency of the proceeds of the sale and a balance remaining due to the judgment creditor or the beneficiary of the deed of trust, respectively. NRS 40.455(1)

Nevada law places stringent limitations on the amount of a money judgment, which may be recovered against the debtor, guarantor or surety who is personally liable for the deficiency. The court shall not render a deficiency judgment for more than:

1. The amount by which the amount of the indebtedness which was secured exceeds the fair market value of the property sold at the time of the sale, with interest from the date of the sale; or

2. The amount which is the difference between the amounts for which the property was actually sold and the amount of the indebtedness which was secured, with interest from the date of sale, whichever is the lessor amount.

3. The court may also consider expert appraisal testimony to evaluate the fair value of the property.

4. The junior lien holder if their rights are not properly extinguished, can also sue for deficiency judgment.

5. Nevada law provides that the anti deficiency legislation protects a guarantor and any other entity that is personally liable for the debt. See generally NRS 40.459.

How to Do Your Documents Review?

How to Do Your Mortgage Documents Review?Document Review How?

Fore best evaluation of your claim on any of the predatory lending violations, it is necessary to do a loan audit. A loan audit is a good thing: but by who? Too many claims an expertise in this field of art. It is bit mathematics, and a bit law. But definitely not a forensic science which they label. Are they gradute of some forensic science laboratory? Forensic my foot. Too many of them are fraudster and former loan officers who spread this mess in the first place. Check their resume, they are loan officer who were actually wolves, and now working in sheep’s clothing.

Fortunately, we do not vouch for any speciality in this unlike lots of others despite having a strong background in loans, mortgages, real estate and other allied fields. Most of them have actually no expertise in it. Truthfully, even if they find anything, any sort of violations of any of the predatory lendign laws, what exactly they can do? They are not licensed to litigate or practice law. They still have to find an attorney willing and knowledgeable in this filed which again is very complex, to litigate and eventually win. Your loan audit, or so called forensic auditor cannot do that. He would charge a hefty sum of $900 or more and give you a computerized printout which may be more than half wrong, and half just assumptions which can be wrong or not.

In order to properly evaluate a claim for mortgage litigation, it will become necessary to do audit you closing documents for violations of state and federal lending laws. We can audit your loan documents well before suit is file to give us the best chance at settlement prior to going to court. We can ask your lender to simply change the terms of your loans based on these violations, and they would listen because it is backed up with the forece of an attorney. When attorney talks, everyone listen–because they mean business, and of course litigations which is very expensive for all the parties. Many lenders will agree to make changes to your loan.

What documents do you need?

In most cases you can get all of the information you need from the following five or six loan documents:

Truth in Lending Disclosure Statement

–(3-Day) Notice of Right to Cancel
–HUD-1 (or HUD-1A) Settlement Statement
–Mortgage and Note (with any riders or attachments)
–Uniform Residential Loan Application
–HOEPA (or “Section 32″) Notice (if lender treated loan as a HOEPA loan)

What we look for?

Violations of the following federal and state laws may entitle the borrower to a reduction in the amount they owe on a refinance or home equity loan.
–Truth in Lending Act (TILA):
–Does the TILA Disclosure Statement clearly and conspicuously display each of the following?
–Annual Percentage Rate (APR)
–Finance Charge
–Amount Financed
–Total of Payments
–Payment Schedule
–APR
–Total of Payments
–Are the disclosures accurate given an independent analysis of the charges?
–Amount Financed (i.e., do we think the lender left out something)
–Did the borrower receive a proper (3-Day)Notice of Right to Cancel?
–Does this loan qualify for Home Ownership and Equity Protection Act protection?
–Real Estate Settlement Procedures Act (RESPA):
–Yield-spread premium (YSP) paid to broker (listed on HUD-1)
–Separate broker fee listed
Is three times the YSP enough to offset the amount the borrower was in default when sued?
–Equal Credit Opportunity Act (ECOA):
–Loan application sets forth requested terms (interest rate, loan amount, fixed-rate)
–No written counter-offer (within 30 days) to terms requested
–Loan includes terms worse than those requested in loan application

Show Me the Note Baby!

Show Me The Note Baby:Show me the Note Baby!

To recover on a promissory note, the plaintiff (the Lender in the case of foreclosure) must prove:

(1) the existence of the note in question;
(2) that the party sued signed the note;
(3) that the plaintiff is the owner or holder of the note in due course;
and
(4) that a certain balance is due and owing on the note.

It is also true, in mortgage foreclosures, prove up of the claim requires presentment of the “ORIGINAL” promissory note and general account and ledger statement. Claim of damages, to be admissible as evidence, must incorporate records such as a general ledger and accounting of an alleged unpaid promissory note, the person responsible for preparing and maintaining the account general ledger must provide a complete accounting which must be sworn to and dated by the person who maintained the ledger.

To recover on a promissory note, the plaintiff must prove:
(1) the existence of the note in question;
(2) that the party sued signed the note;
(3) that the plaintiff is the owner or holder of the note in due course; and
(4) that a certain balance is due and owing on the note.

1) the existence of the note in question

2) If the “ORIGINAL” note you signed in ink that contains your signature is claimed to be lost, stolen, missing and/or destroyed, then your defense is as follows:
3) the “named” Plaintiff is not the ‘holder in due course” of the note and only an agent or nominee for the true beneficial owners and holders in due course;

4) there may be fraud upon the court in that the named Plaintiff may not have ANY interest to the note and that the supposedly lost note is not lost, but may have been intentionally destroyed due to missing assignments on the note which may have made it void and a legal nullity, thus they have exploited key and vital evidence;

5) there is no proof that the named Plaintiff ever held the note or took possession of the note and thus has no claim or right to bringing about the foreclosure;

6) there is no proof, without the note, that a proper chain of assignments took place and that the lien positions were properly perfected;

7) other unnamed and disclosed real parties in interest may have a claim to the note and be the rightful beneficial owners to the note and must be identified and brought before the court;

there may be several unnamed and disclosed real parties in interest may have a claim to the note and be the rightful beneficial owners of the note;

9) that the party sued signed the note

10) If the “ORIGINAL” note you signed in ink that contains your signature is claimed to be lost, stolen, missing and/or destroyed, then you need to notify me and also put on affirmative defenses that:
11) the note in question is not the note you signed and executed in ink and only the one you signed in ink that presumably contains your fingerprints can be relied upon by your handwriting analysis expert;

12) in an electronic age, it is a simple matter to place someone’s signature or image upon a document and that it is very difficult to imagine such a valuable negotiable instrument being lost or missing without a nefarious motive.

13) that the plaintiff is the owner or holder of the note in due course;

14) If the “ORIGINAL” note you signed in ink that contains your signature is claimed to be lost, stolen, missing and/or destroyed, then you need put on affirmative defenses that:a) the mortgage industry, investors, and GSE’s such as Fannie Mae, Freddie Mac, and FHLBs etc. have a requirement that the last endorsement to them be undated and “blank” leaving the payee line blank and making the negotiable instrument a sort of “bearer bond” and instrument. as such, any party finding or stealing the note can place their name on the payee line, claim ownership of the note, and sell the note to others who may make a demand upon you in the future. as such, you require money to be deposited in an escrow account or with the court in an amount equal to the amount claimed owed on the note, until such missing note is found or upon your death. notes have a life of their own…

b) if the note was destroyed or lost intentionally (the industry maintains this practice) then they may be trying to hide the beneficial owners and shield them from any assignee liability arising from the actions of the servicer who they hire, supervise and most importantly authorize to foreclose upon you. without the note, since subsequent endorsements are not recorded to avoid payment of taxes and t hide true and real beneficial interests, there is no possible way to determine who ever held a rightful interest in the note and who you may have claims or counter claims against and who should be presently before the court as a real party in interest.

c) Furthermore, if there are missing assignments of the original note and the assignment went from Lender A to Lender B to Lender D without an intervening assignment from Lender B to Lender C and From Lender C to Lender D, then the note may be void and a legal nullity in your state.

d) It is industry practice to not name the GSE, investor, or real party in interest in foreclosure and to use as a front for the Plaintiff:

i) The very original lender who may or may not even be in business any more or sold their interest in the note long ago, only to have a claim made upon them for repurchase;

ii) A Servicer of even “special servicer” who is acting as an agent for the investors, GSE’s or real party in interest, but has no beneficial ownership in the note since they are only being paid to collect and foreclosure by the real parties in interest

iii) A “nominee” such as MERS who has no legal authority to foreclose upon you and do business in your state and who according to their own written documents and verbal assurances never hold the note or own “any” beneficial interest in the note!!!!!

e) Notes are pledged, sold, bifurcated, and traded in various derivative transactions.
Only possession of the actual original note can prove the actual owner and holder in due course of the note and who you can make an offer of payment to for purchase of the note by yourself, another family member or partner.

You have a right to know the rightful owner of the note so an offer for payment of the note at a discount and at fair market value can be made. If the note has been pledged and encumbered, then that party must be made aware of the foreclosure and your right to negotiate with them a payment and release of the note by you, other lien holders or private parties;

f) Notes are traded often and you need to inspect the physical note to see who the real prior parties were that held and endorsed your note since you may have counter and cross claims against them and need to bring them before the court for the action, since they may have improperly inflated your principal balance, amount owed or escrow account by not applying your payments correctly; adding fees not legally owed by you to the principal balance; miscalculating the interest and not properly amortizing your loan; fraudulent selling your loan or misreporting you on your credit report.

g) Federal Circuit Courts have ruled that the only way to prove the perfection of any security [including promissory note] is by actual possession of the security. Current or prior possession must be proved up.

(h) that a certain balance is due and owing on the note.

15) You must have the master transaction histories and general ledgers for the account since a “dump,” “summary,” or redacted record cannot be relied upon to determine the rightful amounts owed by having a complete audit of your account. In order to conduct a proper audit, master records and all prior records must be compiled, reviewed, analyzed, and reconciled. In is not you responsibility to prove each payment was made. It is your responsibility to say a payment was made and provide evidence, including your word that it was made. It is the note holder’s duty and responsibility to validate the claims being made on the note and the amount owed. If they have the master records or claim that the records of prior servicers are missing, then there is no rightful way for anyone to prove up the balances and amounts they claim are owed!!!! Furthermore, you must claim:

a) That the principal balance claimed owed, is not owed, and is the wrong amount.

b) That the loan has not been properly credited and amortized;

c) That the current servicer cannot be relied upon to testify and certify that prior amounts, transactions, credits, debits, charges and fees added by prior servicers were indeed proper and correct and that the account they were transferred was properly amortized and credited. As such, the person holding the ledgers at the prior servicer must come and testify as to the amounts owed on the note.

d) dumps and summaries of amounts owed cannot be relied upon and only original ledgers and master records and the keeper of those records cant testify as to the amounts claimed owed and due.

Supporting Case Law

Where the complaining party cannot prove the existence of the note, then there is no note.
See Pacific Concrete F.C.U. V. Kauanoe, 62 Haw. 334, 614 P.2d 936 (1980), GE Capital Hawaii, Inc. v. Yonenaka 25 P.3d 807, 96 Hawaii 32, (Hawaii App 2001).

Siwooganock Bank in Lancaster NH, in alleged foreclosure suit, failed or refused to produce the actual note which Siwooganock alleges Eva J. Lovejoy owed.

To recover on a promissory note, the plaintiff must prove: (1) the existence of the note in question; (2) that the party sued signed the note; (3) that the plaintiff is the owner or holder of the note; and (4) that a certain balance is due and owing on the note. See In Re: SMS Financial LLC. v. Abco Homes, Inc. No.98-50117 February 18, 1999 (5th Circuit Court of Appeals.)

Volume 29 of the New Jersey Practice Series, Chapter 10 Section 123, page 566, emphatically states, “…; and no part payments should be made on the bond or note unless the person to whom payment is made is able to produce the bond or note and the part payments are endorsed thereon. It would seem that the mortgagor would normally have a Common law right to demand production or surrender of the bond or note and mortgage, as the case may be. See Restatement, Contracts S 170(3), (4) (1932); C.J.S. Mortgages S 469, in Carnegie Bank v, Shalleck 256 N.J. Super 23 (App. Div 1992), the Appellate Division held, “When the underlying mortgage is evidenced by an instrument meeting the criteria for negotiability set forth in N.J.S. 12A:3-104, the holder of the instrument shall be afforded all the rights and protections provided a holder in due course pursuant to N.J.S. 12A:3-302″

Since no one is able to produce the “instrument” there is no competent evidence before the Court that any party is the holder of the alleged note or the true holder in due course. New Jersey common law dictates that the plaintiff prove the existence of the alleged note in question, prove that the party sued signed the alleged note, prove that the plaintiff is the owner and holder of the alleged note, and prove that certain balance is due and owing on any alleged note. Federal Circuit Courts have ruled that the only way to prove the perfection of any security is by actual possession of the security.

Supporting Case Law
Unequivocally the Court’s rule is that in order to prove the “instrument”, possession is mandatory.
See Matter of Staff Mortg. & Inv. Corp., 550 F.2d 1228 (9th Cir 1977). “Under the Uniform Commercial Code, the only notice sufficient to inform all interested parties that a security interest in instruments has been perfected is actual possession by the secured party, his agent or bailee.” Bankruptcy Courts have followed the Uniform Commercial Code. In Re Investors & Lenders, Ltd. 165 B.R. 389 (Bankruptcy.D.N.J.1994), “Under the New Jersey Uniform Commercial Code (NJUCC), promissory note is “instrument,” security interest in which must be perfected by possession.