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CLE Credit: 1.0 Wednesday, June 6, 2012 1:40 p.m. - 2:40 p.m. Combs-Chandler Room Galt House Hotel Louisville, Kentucky
A NOTE CONCERNING THE PROGRAM MATERIALS
The materials included in this Kentucky Bar Association Continuing Legal Education handbook are intended to provide current and accurate information about the subject matter covered. No representation or warranty is made concerning the application of the legal or other principles discussed by the instructors to any specific fact situation, nor is any prediction made concerning how any particular judge or jury will interpret or apply such principles. The proper interpretation or application of the principles discussed is a matter for the considered judgment of the individual legal practitioner. The faculty and staff of this Kentucky Bar Association CLE program disclaim liability therefore. Attorneys using these materials, or information otherwise conveyed during the program, in dealing with a specific legal matter have a duty to research original and current sources of authority.
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TABLE OF CONTENTS
The Presenter .................................................................................................................... i Timeline for a Foreclosure Proceeding ............................................................................. 1 Alternatives to Foreclosure – Borrower’s Copy ................................................................. 3 What is HAMP? ................................................................................................................. 5 HAMP Loan Modification Application ................................................................................ 9 Foreclosure Clinic Data Sheet ........................................................................................ 13 Securitization Diagram .................................................................................................... 15 Franklin County Rules of Court – Rule 18: Foreclosure Mediation Program ................. 17 Foreclosure Defense ....................................................................................................... 23
In 2007. After graduating from Davidson College in North Carolina in 2001 and the University of Kentucky College of Law in 2006. Kentucky 40222 (502) 416-3430 BEN W. CARTER is an attorney with Morris & Player in Louisville. Carter Morris & Player 1211 Herr Lane. county-wide response to its foreclosure crisis. they moved to Louisville and Mr. he and his wife moved to the Republic of Palau where he served as one of two Public Defenders for the small island nation. Suite 205 Louisville. Carter worked at Legal Aid Society and helped Jefferson County build an innovative. the Kentucky Bar Association recognized him as the Outstanding Young Lawyer of 2010. Mr.THE PRESENTER Ben W. For this work. Carter clerked in the Franklin County Circuit Court for the Honorable Thomas Wingate. Carter began defending homeowners in foreclosure for the Legal Aid Society. i . Upon return to their native Kentucky. Mr. Prior to joining the firm.
Pre-Foreclosure Phase Lenders refer loans to their foreclosure attorneys at 60-90 days past due.Timeline for a Foreclosure Proceeding Notice of Default Default occurs as soon as you miss a payment. often based on the recommendation of the Master Commissioner. you have one year to buy it back for the price paid at auction plus interest at 10%. If you do respond. The judge makes a final ruling. Case Sent to Commissioner’s Office This office conducts an appraisal. you and/or your bank may ask the judge for summary judgment. Foreclosure Auction A public auction (you can attend) is held at 514 W. sets a sale date. your bank sends notice that it is accelerating the debt. which means that the entire sum that you owe is now due. A hearing may be held if you file an Answer or respond to a motion for summary judgment. and gives notice of the sale. 1 Redemption Period If your home sells for less than 2/3 of its appraised value. . Liberty Street. The case is assigned to one of 13 divisions. Eviction & Cash for Keys The new owner of the property asks the court for a writ of possession. After default. Complaint Is Filed Your bank files a complaint in Circuit Court. Deputy sheriffs supervise the setting-out of your things. your bank sends you a notice of default. The highest bidder wins and receives the deed to the property upon payment. your bank will seek a default judgment. Afterward. a Warning Order Attorney is appointed. the new owner may pay you $500-$1. You are served by the Sheriff or certified mail and have 20 days to respond to the Complaint. If you cannot be served personally.000 to move out voluntarily and leave the house in good condition. In order to avoid this hassle and expense. Judgment & Order of Sale If you do not respond to the complaint. This Is When Legal Aid Society Can Take Cases Legal Aid Society may not take a foreclosure case before the complaint is filed or after the time to file an Answer has passed. usually waiting until a payment is at least 30 days late.
Give your bank the deed to the home. 3 . and have regular income and a good credit score. interest rate and or reduced income.” and you have your bank’s permission to do this. This is often a any applicable late fees.ALTERNATIVES TO FORECLOSURE BORROWER’S COPY Leave the Home What Happens Sell your home and use the proceeds to pay off the loan. Option Forbearance Agreement Loan Modification Reverse Mortgage Chapter 13 Bankruptcy Chapter 7 Bankruptcy Reinstatement Refinance Keep the Home What Happens When it works best Your bank allows you to suspend You cannot currently afford your payments temporarily. You lose your equity in the home but avoid the expenses of foreclosure. for the terms of the loan. You find another bank to borrow You owe less than the house is money to pay back original bank. which is home. You pay missed payments plus You can afford it. You have regular income and can afford monthly payments outside bankruptcy and payments within bankruptcy. Your bank agrees to reaffirm the debt outside of bankruptcy. Option Sale Deed in Lieu Short Sale Sell your home for less than you owe. When it works best You owe less than the sale price of the home. fees and foreclosure fees. with no You are sixty-two (62) or older monthly payment or with a and have some equity in your monthly payment to you. You can no longer afford your You and your bank renegotiate monthly payments because of. You file for bankruptcy protection. duration. legal very expensive option. You get a new mortgage. You owe less than the fair market value of the home and there are no junior liens on the home. paid off when you sell the home or pass away. increased interest rates principal. worth. but expect to be able to afford them in the future. You file for bankruptcy protection. You are “under water. monthly payments. including example.
Worst-Case Scenario: Cash for Keys If your home is sold in a foreclosure auction and the buyer wants to avoid the expenses of eviction by the Sheriff. the buyer may pay you to move out and leave the home in good condition. 4 .
2. E. D. and principle balance. E. F.000/year for three years for sustained loan modification. 2. F. Even If Servicer Not Participating For Non-GSE Loans. amortization period.WHAT IS HAMP? HAMP is a voluntary. HAMP Handbook for Servicers: Google “HAMP Handbook” The HAMP Three-Step I. Default caused by hardship. II. Has to Be a Homeowner (No Investment Property. low cash reserves.450 Loan Cap (for One-Unit Homes) Not Previously Modified under HAMP Default or Imminent Risk of Default 1.000 for each completed modification. incentive-based plan that requires servicers to review their portfolio of loans for modification under a specific regime of changes to a loan’s interest-rate. Current Payment of 31 Percent or More (PITIA) 5 . Eighty-five Percent of All Loans Are Being Serviced by Participating Servicers Full List of Participating Servicers at www. resetting rate. C. $1. B. IS HOMEOWNER ELIGIBLE? A. D. Default is imminent due to hardship: loss of income.makinghomeaffordable. Servicers Choose Whether to Participate or Not Similar HAMP Programs for VA and FHA Loans Servicer Incentives 1. IS SERVICER PARTICIPATING? A. B. C. divorce.gov Mandatory for All Fannie Mae and Freddie Mac Insured Loans. $1. No Rental Property) One to Four Units $729. death.
2. 6 . Hardship affidavit. NPV test is not public. Net Present Value (NPV) Test: Is Our Investor Going to Lose More Money Foreclosing or Modifying This Loan under HAMP? 1.III. Current delinquency. 4506-T: Request for Transcript of Tax Return. Things That Can and Probably Will Go Wrong 1. x 2. Value of existing loan x probability of default How much money they’re going to lose modifying the loan. b. MTM Loan-to-Value. Degradation. Waterfall. B. breach of duty of good faith and fair dealing. Servicers don’t modify an eligible and qualifying homeowner (they do the NPV math wrong). Verified income. DTI IV. Equity. B. HOW TO ADVISE AND REPRESENT HOMEOWNERS A. HAMP Application 1. x Value of modified loan (less revenue stream) x probability of re-default 3. a. How much money they’re going to lose in foreclosure. Demand in discovery. DOES THE HOMEOWNER QUALIFY? A. 3. x FICO score. negligent/fraudulent misrepresentation. 2. Servicers encourage current homeowners to miss payment in order to qualify. Default model. What Homeowners Can Expect 1. 2. a. Default model based on current delinquency and FICO score (both impacted by servicer’s actions). i.
p. Servicers who sign contracts must modify eligible and qualifying homeowners (and comply with existing laws. “Investor isn’t participating. but HAMP is the “usual and customary industry standards.” If investor forbids modification. 2010): homeowner has right to sue for failure to comply with HAMP requirements under third-party beneficiary theory. FDIC Mod in a Box. 2010 WL 3212131 (S. Cal. 11: servicers are required to use “reasonable efforts” to get approval and provide a list of non-participating investors and to contact each in writing at least once to encourage participation. Inc. Aug. Wells Fargo Home Mortgage. d. 12). p. c..” a. MHA Handbook. 3.ii. V. SERVICER DOES WHAT IT’S SUPPOSED TO DO 7 . Dodd-Frank requires disclosure of certain inputs. ii. Equity prohibits a servicer from enjoying the extreme remedy of foreclosure while it is not complying with a federal program designed to preserve home ownership c. HAMP doesn’t override PSA. b. Marques v.D. b. 12. servicer must request waiver.
: ______________________________________ Insurance Co. For example: unemployment. underemployment. are insuﬃcient to maintain my current mortgage payment and cover basic living expenses at the same time. just write same) Is the property listed for sale? Yes No Have you received an offer on the property? Yes No Date of offer _________ Amount of offer $_____________________ Agent’s Name: ___________________________________________ Agent’s Phone Number: ____________________________________ For Sale by Owner? Yes No Who pays the real estate tax bill on your property? I do Lender does Paid by condo or HOA Are the taxes current? Yes No Condominium or HOA Fees Yes No $ __________________ Paid to: _________________________________________________ Have you filed for bankruptcy? Yes Has your bankruptcy been discharged? No Yes If yes: No E-mail address Have you contacted a credit-counseling agency for help Yes No If yes. home equity or other debt. For example: monthly mortgage payment reset. increased utilities or property taxes.Pri n t F orm Making Home Affordable Program Request For Modification and Affidavit (RMA) REQUEST FOR MODIFICATION AND AFFIDAVIT (RMA) page 1 Loan I. disability or divorce of a borrower or co-borrower. My expenses have increased. uninsured losses. I am having difficulty making my monthly payment because of financial difficulties created by (check all that apply): My household income has been reduced. death. My cash reserves. Number____________________________________ COMPLETE ALL THREE PAGES OF THIS FORM Servicer ____________________________________ BORROWER Borrower’s name Social Security number Home phone number with area code Cell or work number with area code Date of birth Co-borrower’s name Social Security number CO-BORROWER Date of birth Home phone number with area code Cell or work number with area code I want to: The property is my: The property is: Mailing address Keep the Property Primary Residence Owner Occupied Sell the Property Second Home Renter Occupied Investment Vacant Property address (if same as mailing address. Other: Explanation (continue on back of page 3 if necessary): __________________________________________________________________________ ______________________________________________________________________________________________________________________ My monthly debt payments are excessive and I am overextended with my creditors. reduced pay or hours. including all liquid assets. Debt includes credit cards. Tel #: _________________________________________ Chapter 7 Chapter 13 Filing Date:_________________________ Bankruptcy case number _________________________________ Additional Liens/Mortgages or Judgments on this property: Lien Holder’s Name/Servicer Balance Contact Number Loan Number HARDSHIP AFFIDAVIT I (We) am/are requesting review under the Making Home Affordable program. decline in business earnings. 9 page 1 of 3 . high medical or health care costs. please complete the following: Counselor’s Name: _________________________________________ Agency Name: ____________________________________________ Counselor’s Phone Number: __________________________________ Counselor’s E-mail: ________________________________________ Who pays the hazard insurance premium for your property? I do Lender does Paid by Condo or HOA Is the policy current? Yes No Name of Insurance Co.D.
) Total (Gross Income) $ $ $ $ $ Monthly Household Expenses/Debt First Mortgage Payment Second Mortgage Payment Insurance Property Taxes Credit Cards / Installment Loan(s) (total minimum payment per month) Alimony. you may check more than one designation. 2You are not required to disclose Child Support. For race. You are not required to furnish this information. please specify using the back of this form if necessary. annuities. child support payments Net Rental Expenses HOA/Condo Fees/Property Maintenance Car Payments Other ________________ _____________________ $ $ $ $ $ Household Assets Checking Account(s) Checking Account(s) Savings/ Money Market CDs Stocks / Bonds $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Other Cash on Hand Other Real Estate (estimated value) Other _____________ Other _____________ $ $ $ $ Do not include the value of life insurance or retirement plans when calculating assets (401k. pension funds. annuities or retirement plans Tips. The law provides that a lender or servicer may not discriminate either on the basis of this information.REQUEST FOR MODIFICATION AND AFFIDAVIT (RMA) page 2 COMPLETE ALL THREE PAGES OF THIS FORM Number of People in Household: INCOME/EXPENSES FOR HOUSEHOLD1 Monthly Household Income Monthly Gross Wages Overtime Child Support / Alimony / Separation2 Social Security/SSDI Other monthly income from pensions. or on whether you choose to furnish it. INFORMATION FOR GOVERNMENT MONITORING PURPOSES The following information is requested by the federal government in order to monitor compliance with federal statutes that prohibit discrimination in housing. please provide both ethnicity and race. or sex. etc. Alimony or Separation Maintenance income.) Total Assets $ $ Total Debt/Expenses $ INCOME MUST BE DOCUMENTED 1Include combined income and expenses from the borrower and co-borrower (if any). dividends etc. If you do not furnish ethnicity. If you do not wish to furnish the information. If you include income and expenses from a household member who is not a borrower. but are encouraged to do so. Keogh plans. commissions. please check the box below. If you furnish the information. the lender or servicer is required to note the information on the basis of visual observation or surname if you have made this request for a loan modiﬁcation in person. BORROWER Ethnicity: Race: I do not wish to furnish this information Hispanic or Latino Not Hispanic or Latino American Indian or Alaska Native Asian Black or African American Native Hawaiian or Other Paciﬁc Islander White Female Male CO-BORROWER Ethnicity: Race: I do not wish to furnish this information Hispanic or Latino Not Hispanic or Latino American Indian or Alaska Native Asian Black or African American Native Hawaiian or Other Paciﬁc Islander White Female Male Name/Address of Interviewer’s Employer Sex: Sex: To be completed by interviewer This request was taken by: Face-to-face interview Mail Telephone Internet Interviewer’s Name (print or type) & ID Number Interviewer’s Signature Date Interviewer’s Phone Number (include area code) 10 page 2 of 3 . unless you choose to have it considered by your servicer. race. royalties. IRAs. interest. bonus and self-employed income Rents Received Unemployment Income Food Stamps/Welfare Other (investment income.
engaged in fraud or misrepresented any fact(s) in connection with this document. That: my property is owner-occupied. please contact the SIGTARP Hotline by calling 1-877-SIG-2009 (toll-free). mismanagement or misrepresentations aﬃliated with the Troubled Asset Relief Program. 2. (d) companies that perform support services in conjunction with Making Home Aﬀordable. Any misstatement of material fact made in the completion of these documents including but not limited to misstatement regarding your occupancy in your home. or their agents may investigate the accuracy of my statements and may require me to provide supporting documentation. waste.” If you are aware of fraud. 7. expenses. mail fraud. 11 page 3 of 3 . payment history. Department of the Treasury. (c) any investor. and there has been no change in the ownership of the Property since I signed the documents for the mortgage that I want to modify. and wire fraud. income. but the Servicer is not obligated to oﬀer me assistance based solely on the statements in this document. are true and correct. represent and agree that: “Under penalty of perjury. (b) Fannie Mae and Freddie Mac in connection with their responsibilities under the Homeowner Aﬀordability and Stability Plan. I understand the Servicer will pull a current credit report on all borrowers obligated on the Note. 5. I am willing to commit to credit counseling if it is determined that my ﬁnancial hardship is related to excessive debt. 8. That all of the information in this document is truthful and the event(s) identiﬁed on page 1 is/are the reason that I need to request a modiﬁcation of the terms of my mortgage loan. Any potential misrepresentation will be referred to the appropriate law enforcement authority for investigation and prosecution. 4. insurer. the U. and information about account balances and activity. social security number. government monitoring information. telephone number. false statements. 6. The Hotline can help with questions about NOTICE TO BORROWERS Be advised that by signing this document you understand that any documents and information you submit to your servicer in connection with the Making Home Aﬀordable Program are under penalty of perjury. 202-622-4559 (fax). or assets will subject you to potential criminal investigation and prosecution for the following crimes: perjury. and (e) any HUD-certiﬁed housing counselor. I also understand that knowingly submitting false information may violate Federal law. hardship circumstances. 1801 L St. guarantees or services my ﬁrst lien or subordinate lien (if applicable) mortgage loan(s). Department of the Treasury. I have not received a condemnation notice. The information contained in these documents is subject to examination and veriﬁcation. Mail can be sent to Hotline Oﬃce of the Special Inspector General for Troubled Asset Relief Program. address. short sale or deed-in-lieu of foreclosure. I am willing to provide all requested documents and to respond to all Servicer questions in a timely manner. or www.S. abuse. guarantor or servicer that owns. I understand that the Servicer will collect and record personal information.S. 3. including. Borrower Signature Date Co-Borrower Signature HOMEOWNER’S HOTLINE Date If you have questions about the program that your servicer cannot answer or need further counseling. but not limited to. By signing this document you certify.sigtarp. I intend to reside in this property for the next twelve months. I understand that if I have intentionally defaulted on my existing mortgage. my name. I understand and consent to the disclosure of my personal information and the terms of any Making Home Aﬀordable Agreement by Servicer to (a) the U. all documents and information I have provided to Lender in connection with the Making Home Aﬀordable Program.gov. I understand that the Servicer will use the information in this document to evaluate my eligibility for a loan modiﬁcation or short sale or deed-in-lieu of foreclosure.REQUEST FOR MODIFICATION AND AFFIDAVIT (RMA) page 3 COMPLETE ALL THREE PAGES OF THIS FORM ACKNOWLEDGEMENT AND AGREEMENT 1. and/or income. DC 20220. NW. the Servicer may cancel any Agreement under Making Home Aﬀordable and may pursue foreclosure on my home. insures. you can call the Homeowner’s HOPE™ Hotline at 1-888-995-HOPE (4673). Washington. including the documents and information regarding my eligibility for the program. credit score. 9. I understand that the Servicer.
31 Working with Counselor HPI UL N/A Bankruptcy Other Debts Filed: Ch.Foreclosure Clinic Data Sheet Contact Information Name Address Phone Email Case Number KHC Case Number Servicer Opposing Counsel Selling the Home FMV of Home Unpaid Balance Current Payment Amount Behind Loan Mod/Forbearance Current Payment Taxes & Insurance Interest Rate ARM Fixed Monthly Income Other Income Escrow: Income x . 7 Ch 13 N/A Date Filed Date Discharged Other Date of Loan Loan Purpose Place Closed 13 .
Potential Defenses Note Unavailable Blank Endorsement Lack of Endorsement Rescission Possibility Servicing Abuses Origination Abuses Case Acceptance _____ LAS Eligible _____ Not LAS eligible because: Not in foreclosure Does not want to remain in home Not income eligible _____ Needs KHC entry Received complaint long ago Defenses outside LAS priorities Next Steps _____ Work with HPI/UL _____ Go to a conciliation conference _____ Sell the home _____ Explore bankruptcy _____ Hire an attorney _____ File a pro se answer _____ Get a reverse mortgage _____ Other: Notes: LAS Representative: Homeowner: _____________________________ _____________________________ 14 .
A. Series 2005-HE5 Wells Fargo Bank.A. Ace Securities Corp. Home Equity Loan Trust. Fremont Investment & Loan ORIGINATOR PROCESSES AND FUNDS INDIVIDUAL LOANS SERVICES INDIVIDUAL LOANS. DB Structured Products.Borrower Funds Deutsche Bank Securities Inc. Inc. N. ACE Securities Corp. 2005 Related Documents Monthly Payments Homeland Mortgage Company MORTGAGE BROKER A. COLLECTS OFFERING PROCEEDS 15 C.Mortgage Documents Blue . ISSUES CERTIFICATES D. LLC Copyright 2009 . DEFAULT AND PREPAYMENT REPORTS & RECOMMENDATIONS TO THE DEPOSITOR Certificates Related Documents Certificates Offering Proceeds Unknown SWAP COUNTERPARTY TRUST FUND / ISSUING ENTITY HOLDS POOL OF LOANS. SECURITIES ADMINISTRATOR PAYING AGENT FOR CERTIFICATEHOLDERS Cede & Co. Home Equity oan Trust. PERFORMS DUTIES UNDER TRUST'S POOLING & SERVICING AGREEMENT Cash to Fund Mortgage Loan Wells Fargo Bank. Series 2005-HE5 Consumer MORTGAGOR / CONSUMER May 19. CLAIMS AND NOTICES TO SERVICER REGARDING MORTGAGED PROPERTY Truth In Lending Audit & Recovery Services. National Association TRUSTEE REMITS COMPLAINTS. SELLER PURCHASES LOANS FROM ORIGINATOR. N. DEPOSITOR CREATES ISSUING ENTITY CUTOFF DATE: 8/1/2005 The Murrayhill Company CREDIT RISK MANAGER PROVIDES DELINQUENCY. UNDERWRITERS Certificates SELLS CERTIFICATES TO INVESTORS.Securities Certificates Orange . AGGREGATES COLLECTIONS. FORMS POOL ARROW LEGEND Monthly Distributions Net Offering Proceeds Net Offering Proceeds Purple . (DTC) MORTGAGEE / CERTIFICATEHOLDERS PURCHASE MORTGAGE BACKED SECURITIES AS DEFINED IN CERTIFICATES See SWAP AGREEMENT Return On Investment HSBC Bank USA. MASTER SERVICER & CUSTODIAN Unknown INTERIM SERVICER SERVICES INDIVIDUAL LOANS.Investor Funds Green . PERFORMS DUTIES UNDER TRUST'S POOLING & SERVICING AGREEMENT RECEIVED A BROKER'S AND PROCESSING FEE FROM LOAN PROCEEDS Loan Purchase Price B.SECURITIZATION DIAGRAM ACE Securities Corp. AGGREGATES COLLECTIONS.
No answer or motion shall be required of any defendant subject to the automatic stay until the stay is dissolved as to that defendant or the Court otherwise orders. The filing and service by the Mediator of notice that after electing to participate in the Program that Defendant has not participated in the Program. (c) (d) 18. 18. The Mediator shall conduct meetings between the parties. “Mediator” means the person appointed as the Foreclosure Mediator for the Program.02 Appointment of Mediator. The filing and service by the Mediator of notice that mediation of the claims against that Defendant has concluded. “Court” means the Franklin Circuit Court.01 Definitions.COMMONWEALTH OF KENTUCKY 48TH JUDICIAL CIRCUIT FRANKLIN COUNTY RULES OF COURT RULE 18: FORECLOSURE MEDIATION PROGRAM 18. A regularly-practicing member of The Bar of the Court shall be appointed by the Court Judges as the Mediator for the Program.04 Automatic Stay. (a) As to each Defendant the automatic stay shall terminate without further order of the Court upon the earlier of: (1) That Defendant’s failure to contact the Mediator within 20 days of service of process upon that defendant and that Defendant’s failure to elect to participate in the Program. All proceedings in a Qualifying Foreclosure action shall be stayed upon commencement of the action. and issue reports and recommendations to the Court. As used in this Rule 18: (a) (b) “Program” means the Franklin County Foreclosure Diversion Program. (2) (3) (b) The automatic stay may be terminated as to any Defendant by order of the Court upon motion by Plaintiff’s counsel to lift the stay. The Mediator shall conduct the Program and assist Plaintiffs and Defendants participating in the program.03 General Duties of Mediator. 18. “Qualifying Foreclosure” means an action seeking as a remedy foreclosure on owner-occupied residential property. 17 . including mediation. or upon property that was owner-occupied following its purchase or construction by a Defendant.
and determine whether the Defendant elects to participate in the Program. (2) (3) (b) Shall provide to the clerk and cause to be served with each Qualifying Foreclosure Complaint the following forms: (1) A Request for Modification Affidavit (RMA) in the form illustrated at Appendix FM-1 to these rules. Upon commencement of a Qualifying Foreclosure Action the Plaintiff: (a) Shall file with the Clerk of the Court and cause to be served with each Qualifying Foreclosure Complaint a Notice conspicuously printed on colored paper containing the following: (1) The Mediator’s contact information.07 Notice of Election. 18.06 Information To Be Provided To Defendants. Upon contact by a Defendant the Mediator shall provide the Defendant with information regarding the Program. all papers required to be served shall also be served on the Mediator until further Order of the Court. A statement that a Defendant’s failure to contact the Mediator within 20 days of service of process will result in dissolution of the automatic stay as to that Defendant without further order of the Court. The contact information may be obtained by the Plaintiff from the Clerk of the Court. Dodd-Frank Certificate. (2) (3) (c) Shall serve the Mediator with a copy of the Qualifying Foreclosure Complaint.(c) Upon termination of the automatic stay as to any Defendant. 18 . A statement that within 20 days of service of process each Defendant may contact the Mediator by telephone. including fees. Upon filing of a Notice of Election in a Qualifying Foreclosure Proceeding. that Defendant shall have 20 days to answer. any Judge of the Court may order any foreclosure case to mediation. If a Defendant elects to participate in the Program the Mediator shall file a Notice of Election with the Court identifying the electing Defendant and provide copies of the Notice to the Plaintiff and all Defendants named in the Qualifying Foreclosure Complaint. and 4506T-EZ. 18. e-mail or inperson to request a mandatory Status Conference. Notwithstanding the termination of the automatic stay under this Rule 18.05 Plaintiff’s Duties Upon Filing Of The Complaint. (d) 18. move or take any other action required or permitted under the Rules of Civil Procedure.
or the date the Mediator determines it is otherwise appropriate to proceed. including a loan modification. The plaintiff or its attorney shall have immediate access (either in-person or telephonically) to the Plaintiff or its agent with full authority to approve or deny an alternative to foreclosure. or Plaintiff’s counsel if represented. short sale. The Mediator may direct any Defendant allegedly indebted to the Plaintiff to submit a hardship packet to the Plaintiff for Plaintiff’s review and action. At the Status Conference. by a Defendant 30 days after the Mediator directs that Defendant to submit a Hardship Packet. A Dodd-Frank Certificate. or the date the Mediator otherwise determines it is appropriate to proceed.18. A 4506T-EZ form. the parties shall report to the Mediator the progress made in resolving Plaintiff’s claims without foreclosure. (b) (c) (d) (e) (f) 18. The Status Conference shall not be scheduled earlier than 10 days after the earlier of the date service of process on all Defendants is complete. At any Status Conference the Mediator may determine whether to order additional conferences or order other action by the parties. a) The Hardship Packet must be delivered to the Plaintiff.09 Hardship Packet. The Mediator shall schedule a Status Conference once the Defendants alleged in the Complaint to be liable to the Plaintiff on the debt giving rise to the foreclosure have contacted the Mediator. The attorney for any party represented by counsel must appear in person at any Status Conference.08 Status Conference. or a forbearance agreement. or the Mediator otherwise determines it is appropriate to proceed. The Status Conference shall be conducted by the Mediator no later than 70 days after the earlier of the date service of process on all Defendants is complete. (a) The Plaintiff and all Defendants electing to participate in the Program shall be required to appear at the Status Conference to explore alternatives to foreclosure. The Hardship Packet shall include the following: (1) A Request for Modification Affidavit (RMA) in the form shown at Appendix FM-1 to these rules and documents supporting the Defendant or Defendants’ reported income. At the conclusion of any status conference. 19 (b) (2) (3) . deed-in-lieu of foreclosure. the Mediator shall recommend whether to lift the existing stay of the foreclosure proceedings based on parties' good faith in attempting to settle the case without a foreclosure sale.
18. A Plaintiff may request that the Mediator recommend to the Court that a stay be terminated as to any Defendant who fails to perform under any agreement reached through mediation.00) shall be paid by those defendants who are alleged in the Complaint to be liable for the debt giving rise to the foreclosure proceeding. One half of the fee ($150. (c) (d) 20 . or A written statement denying a loan modification and a detailed explanation of the reasons Defendant does not qualify for a loan modification. The Mediator’s fee of $300.10 Plaintiff’s Obligations Upon Receipt of Hardship Packet. The Plaintiff may move the Court to terminate a stay without regard to the Mediator’s recommendation.13 Mediator’s Fee. the Plaintiff must serve one of the following on the submitting Defendant: (a) (b) A written offer of trial or permanent loan modification. or A written denial of the application that articulates the reasons for Plaintiff’s refusal to modify the loan. Upon such request. or A written notice describing the additional documents required by the Plaintiff to review of the loan for modification or other alternative to foreclosure. or a forbearance agreement.11 Loan Modification Application.00 is payable at or before the Mandatory Status Conference.g. (c) 18. or the necessity of seeking such a recommendation. including a deed-in-lieu of foreclosure. the Mediator may file a report with the Court recommending that the stay be lifted. (a) (b) One-half of the fee ($150.00) shall be paid by the Plaintiff(s). No later than 14 days after delivery by a Defendant of a Hardship Packet the Plaintiff shall acknowledge receipt of the Hardship Packet and serve on the submitting Defendant one of the following: (a) (b) A loan modification or trial payment plan offer. The written denial must also explain why other alternatives to foreclosure.12 Failure to Perform Mediation Agreement. No additional Mediator fees will be assessed absent good cause (e. 18. are not appropriate.) Plaintiff may not charge the Defendants or the Defendants’ account the $150. a short sale.18. a repayment plan. Within thirty (30) days after service by a Defendant of a completed loan modification application.00 fee payable by the Plaintiff. failure of a party to appear at a status conference or to have the required authority.
Any party to the action or the Mediator may make a motion to modify or waive this local rule in that action. 21 .(e) For good cause. the Court may adjust or reallocate the Mediator’s $300.15 Order of Sale. 18. or other equitable cause. the failure a party to participate in good faith. A motion for an Order of Sale must be accompanied by the moving party’s certification that: (a) (b) The moving party complied with the requirements of Local Rule 18. This local rule governing the Program may be waived or modified in a pending action only by Order of the Court entered following hearing on a motion with notice to all parties and the Mediator. and The Defendant(s) alleged in the Complaint to be liable for the debt giving rise to the foreclosure proceeding elected not to participate in the Program or the mediation was unsuccessful.14 Modification or Waiver of Local Rule 18. a Defendant’s inability to pay the fee.00 fee based on the time and expense incurred in the mediation. 18. The Mediator may move to waive or modify the local rule governing the Program.
Technically.D. Pa. Real party in interest with standing to enforce the note. The Stakes What Every Lawyer (and Homeowner) Needs to Know about Foreclosure 1. Many can afford and should hire an attorney. UCC Standing 1. and 2) it can be raised at any time. 2009): gives excellent background as to how opposing counsel “interact” with their client through computer program. Subprime mortgage lending.FORECLOSURE DEFENSE OUTLINE Ben W. D. a. Empowering Homeowners: The Psychology and Rhetoric of Foreclosure II. 2. 23 . C. I use the phrase “real party in interest with standing to enforce the note” as an allencompassing statement of what interests the Plaintiff must prove it possesses in the case. 618 (Bankr. INTRODUCTION A. these are separate inquiries. In re Taylor. Long process. the role of Lender Processing Systems (sanctions reversed by 2010 WL 624909 (E. the foreclosing plaintiff must be the real party in interest and have standing to pursue foreclosure. Opposing counsel. 2.3d 274 (3rd Cir. 407 B. Feb 18. As a practical matter. I like to focus on the requirements of standing for two reasons: 1) the standard for showing standing is higher. How We Got Here 1.Pa. Technically. PART ONE: DEFENDING CLIENTS FROM FORECLOSURE IN COURT A. Carter I. B. E. a claim that a Plaintiff is not the real party in interest should be brought in a motion to dismiss prior to (or contemporaneously with) filing an answer. 2010). and aff’d in part. reversed in part by 655 F. Communicating with bank.D. though they often get blended in court opinions and in the heat of argument in our cases. 3. 2011)).R.
2d 71. v. RPI claim must be “by demurrer” (motion to dismiss). Johnson v. 1987).2d 1002. within the meaning of the Code provision. a) b) Question is whether KCA is RPI. 95 (Ky. See State ex. c) d) iii. However. Charged with supervising construction and had statutory power to take. KCA held no legal or equitable title to property. 1919) (citation omitted). “If a party is not the real party in interest.W. 1947). the D must be prejudiced by a mid-suit showing of RPI for SJ to be inappropriate.” i. . App. If not. such claims are waived. Suster. for example. and had no contract with Whittenberg. 1008 (Ohio 1998). Mason’s Adm’rs.W.. Hurst. Mar. 746 S. Suing for breach of construction contract of KCA in downtown Louisville. at minimum. Thompson-Starret Co. 216 S. 73 (Ky. acquire and hold property.W. Rel. 30.Defendants can assert the Plaintiff lacks standing at any time – after discovery is over.01): “Every action shall be prosecuted in the name of the real party in interest. ii. “The real party in interest. 2007). Which route you go is a matter of personal preference and the client’s situation.W. Taylor v. Ruby Lumber Co.” Bank of New York v. Stuart. one who is actually and substantially interested in the subject-matter. 2007 WL 936706 (Ohio. real party in interest must have a significant interest. App. Real Party in Interest (CR 17.. is the party who will be entitled to the benefits of the action upon a successful termination thereof. Does he satisfy the call for the person who has the right to control and receive the fruits of the litigation?” In foreclosures. 24 .2d 876 (Ky. 701 N. this is the party entitled to be paid from the foreclosure sale. Kentucky Center for the Arts v.E. Stuart. 201 S. b. however. v. Jones v.. 278 S. Whittenberg Engineering & Construction Company. In Kentucky. the party lacks standing to prosecute the action.2d iv.
banks. Stockyards Bank & Trust Co. Ky.). 843 S. 1944).W. See generally. 2.E. 184 S. Chris Markus. N. 897 N. Bank of Commerce of Louisville v.A. 1992).W. et. just dismiss without prejudice. 2011). Bank of New b.. Stockyards Bank & Trust Co. iii.W. v. 342 S. It CANNOT be relied on for the ways in which foreclosing Plaintiffs may prove their status as real party in interest with standing to foreclose. L. City of Louisville v. Coleman. Bushelman. Wells Fargo Bank. Kentucky Employers Mut.71 (Ky. 328-329 (Ky.. 2007). 1992) Burden is on Plaintiff to prove standing to invoke the jurisdiction of the Court. v.R. 395. Mar.W. Standing requirements. This article can be relied upon for an analysis of the real party in interest problem for servicers. 2008).” City of Louisville v. Ins. d. Rev.S. overruled on other grounds by J. Plaintiff bank cannot get standing halfway through the case through assignment of mortgage. 2009 WL 625560 (Ohio App. J.2d 327 (Ky. al. 12. c. v. but dismissal with prejudice was a little much.W. 25 . it is necessary to look at the date when the endorsement is actually made as that is the time negotiation takes effect for that purpose.W.3d 850 (Ky. 236 S.A.N.2d 86. 843 S. i." 36 N. Plaintiff must have standing at the time the suit is filed. and trustees of securitized trusts. Standing requires a “judicially recognizable interest in subject matter. ii. 2008). "From Main Street to Wall Street: Mortgage Loan Securitization and New Challenges Facing Foreclosure Plaintiffs in Kentucky.’ but must be a present and substantial interest in the subject matter. Jordan. Abell. Court can inquire sua sponte into parties’ standing (as it impacts subject matter jurisdiction) at any time. a.” Wells Fargo v. 1955) (note: standing can never be waived). c. “In order to determine the time when a transferee becomes a holder in due course.. 15 (Ky. v.2d 722 (Ohio App. 89 (Ky. 264 S.3d 9.2d 327. The interest may not be ‘remote and speculative. iv.3d 587 (Ky. Byrd. O’Reilly. 2009.
220 P. f. 30. 2006): Servicer has standing to sue if agreement between it and holder give it that authority.” Buckley v.3d 1073. 1078 (Idaho 2009). Sanders. LLC v. v. 458. Trustee’s standing depends on whether trustee “possesses certain customary powers to hold.3d 497 (7th Cir. 2010) follows Byrd. has standing to sue. 2006 WL 2033668 (Ky.’ Questions that may never arise or are purely advisory or hypothetical do not establish a justiciable controversy. g. It is well-established that the issue of subject matter jurisdiction can be raised at any time. LLC. Because an unripe claim is not justiciable. 3. July 21. manage. Servicer’s standing to sue. consent.” Navarro Sav. 2010 WL 571981 (Ohio App. Judgments entered without Plaintiff having standing are void and subject to collateral attack. Questions of standing must be decided by this Court before reaching the merits of the case. 2010). 464 (1980).S. App. Gindele. and dispose of assets for the benefit of others. the circuit court has not subject matter jurisdiction over it. Provides support to Green Tree’s position that servicer has standing to foreclose (but only after inquiring into the PSA terms). 2007 WL 4210675 at *3 (Ky. Chicago Properties. Kroger Co. 26 . 446 U. i. Lee. Judge Posner gives a good background of the legal ramifications of the servicer/trustee relationship. 610 F. Ripeness: “Section 112(5) of the Kentucky Constitution states in relevant part that ‘[t]he Circuit Court shall have original jurisdiction of all justiciable causes not vested in some other court. LLC v. CWCapital Asset Management.. Ass’n v. Trustee’s standing to sue. Nov. as it cannot be acquired by waiver. 19.York v. or estoppel. “Because [Plaintiff] was the sole owner of Carroll’s account at the time it brought suit. 2007). Carroll. h. Green Tree Servicing. Citibank v. and therefore. Feb. it is entitled to recovery on the funds on that account.” e. ii. App. even sua sponte. Plaintiff’s prima facie case.
If a defense or claim in recoupment is proved. Thompson.” HSBC v. a plaintiff producing the instrument is entitled to payment if the plaintiff proves entitlement to enforce the instrument under KRS 355. 2009). unless the defendant proves a defense or claim in recoupment. Prove that he is a person entitled to enforce the instrument. According to 6 Hawkland’s Uniform Commercial Code Series §308:3 (Rev. 965 S. the right to payment of the plaintiff is subject to the defense or claim. 1997)). Otherwise.a. KRS 355. is the duly qualified holder. Inc. (2) A nonholder in possession of the instrument who has the rights of a holder. ii. Cramer Financial Group. 3. except to the extent the plaintiff proves that the plaintiff has rights of a holder in due course which are not subject to the defense or claim. Three ways to be PETE under 355.3-301: ““Person entitled to enforce” an instrument means: (1) The holder of the instrument. Produce the instrument. A person may be a person entitled to enforce the instrument even though the person is not the owner of the instrument or is in wrongful possession of the instrument.. 2010 WL 3451130 at *11 (Ohio App. 27 . Here is the whole point of requiring the Plaintiff to prove its case: “it becomes essential to establish that the person who demands payment of a negotiable note.3-309 or KRS 355.W. b.3-301.3-308(2) states.2d 532 (Tex. or at least to the expense of litigation incurred to prevent duplicative satisfaction of the instrument. the obligor is exposed to the risk of double payment.” iii. App. (Also. there’s the test in Geiselman v. “If the validity of signatures is admitted or proved and there is compliance with subsection (1) of this section.3-418(4). or (3) A person not in possession of the instrument who is entitled to enforce the instrument pursuant to KRS 355. Plaintiff’s burden. or to whom payment is made. These risks provide makers with a recognizable interest in demanding proof of the chain of title. i. 2010). Sep. Establish the effectiveness of the obligor’s signature.
2010 WL 5625883 (Bankr. 873 (Bkrtcy.” In re Wells. v. If an instrument is payable to bearer. Second.2d 86. negotiation requires transfer of possession of the instrument and its indorsement by the holder. 1924).” Bank of Commerce of Louisville v. N. N.a) (1) Negotiation §3-201: “(1) “Negotiation” means a transfer of possession. 407 B.W. Abell. 89 (Ky. it is the Plaintiff’s burden to prove the elements of negotiation. Ohio 2009). First. 626 (Ky.W. it may be negotiated by transfer of possession alone.D. ii) iii) b. Conklin.R. if an instrument is payable to an identified person. (2) Except for negotiation by a remitter. The transfer of possession requires the physical delivery of the note “for the purpose of giving the person receiving delivery the right to enforce the instrument. Harponola Co. Transfer of possession. 266 S. In re Koontz. Ind. 28 . mere possession of a note payable to the order of another is subject to a motion to dismiss. 30. a.D. Bank’s physical possession of note (and date of indorsement) is a genuine issue of material fact that precludes summary judgment. Sep. 184 S. whether voluntary or involuntary. of an instrument by a person other than the issuer to a person who thereby becomes its holder. 1944). i) “The instrument sued on is payable to order and can be negotiated only by the endorsement of the Bank of Commerce and completed by delivery. 2010). This case from the old Court of Appeals stands for a few important propositions.
(b) Does not state a payee. a. whether or not the transfer is a negotiation. if an instrument is transferred for value and the transferee does not become a holder because of lack of indorsement by the transferor. negotiation of the instrument does not occur. The transferee obtains no rights under this article and has only the rights of a partial assignee. the transferee has a specifically enforceable right to the unqualified indorsement of the transferor. (2) Transfer of an instrument. but the transferee cannot acquire rights of a holder in due course by a transfer. vests in the transferee any right of the transferor to enforce the instrument.” i) Comment 1 to 3-203: right to enforce depends on obtaining possession of the instrument. KRS 355-109: (1) A promise or order is payable to bearer if it: (a) States that it is payable to bearer or to the order of bearer or otherwise indicates that the person in possession of the promise or order is entitled to payment.iv) Indorsement by the holder. (3) Unless otherwise agreed. Blank indorsements. b. but negotiation of the instrument does not occur until the indorsement is made. directly or indirectly. or (c) States that it is payable to or to the order of cash or otherwise indicates that it is not payable to an identified person. (4) If a transferor purports to transfer less than the entire instrument. b) (2) Transfer 355-3. 29 . including any right as a holder in due course.203: “(1) An instrument is transferred when it is delivered by a person other than its issuer for the purpose of giving to the person receiving delivery the right to enforce the instrument. from a holder in due course if the transferee engaged in fraud or illegality affecting the instrument.
An assignment of the deed of trust [mortgage] separate from the note has no “force. 1992).” Bellistri v. the assignment of the mortgage alone does not give the assignee any interest in the note or its proceeds. U. Was entitled to enforce the instrument when loss of possession occurred. or it is in the wrongful possession of an unknown person or a person that cannot be found or is not amenable to service of process.2d 340. overruled by Rodney v.W. 343 (Ariz.ii) Transferring the Mortgage without the Note is a nullity. LLC. 836 P. (2) A person seeking enforcement of an instrument under subsection (1) of this section must prove the terms 30 .S. Has directly or indirectly acquired ownership of the instrument from a person who was entitled to enforce the instrument when loss of possession occurred. Ocwen Loan Servicing. v. 826 P. (b) The loss of possession was not the result of a transfer by the person or a lawful seizure.3d 619 (Mo. 284 S.” b. or 2. Arizona Bank. Hoffman. App. i) (1) A person not in possession of an instrument is entitled to enforce the instrument if: (a) The person seeking to enforce the instrument: 1. App. its whereabouts cannot be determined. c) (3) Lost Note (3-309).2d 434 (1992). a. “The law is clear in Arizona that while an assignment of the note carries the mortgage with it. and (c) The person cannot reasonably obtain possession of the instrument because the instrument was destroyed. 2009).
KRE 1003: A photocopy is admissible to the same extent as the original unless: 1) A genuine question is raised as to the authenticity of the original. when the indorsement is made on a piece of paper so attached to the original instrument as in effect to become part thereof or be incorporated with it. 1893): “As a general rule the legal title to a negotiable paper. only by the payee's indorsement on the security itself. L. passes. This addition is called. Production of the original. If that proof is made. Rptr. The device had its origin in cases where the back of the instrument had been covered with indorse- 31 . See In re Cook. 2006). Sup. a) Traders Deposit Bank v. The established exception to this rule is.3d 561 (6th Cir. Attorneys should not sign lost note affidavits.of the instrument and the person's right to enforce the instrument. iii) c. according to the law merchant. Ct. Chiles. Thompson & Co. 14 Ky. payable to order. 617 at *2 (Ky. ii) Kentucky has made it easier to enforce lost notes with recent changes to UCC. ii. or 2) In the circumstances it would be unfair to admit the duplicate in lieu of the original. in the adjudged cases and elementary treatises.. The court may not enter judgment in favor of the person seeking enforcement unless it finds that the person required to pay the instrument is adequately protected against loss that might occur by reason of a claim by another person to enforce the instrument. 457 F.3-308 applies to the case as if the person seeking enforcement had produced the instrument. Allonges. Adequate protection may be provided by any reasonable means. KRS 355. an allonge. Proving holder status in practice. i.
the District of Columbia. 2010 WL 3451130 (Ohio App. and the Virgin Islands. Further.R. leaving no room for further indorsements thereon.ments or writing. 853 F..” The court continues to note that this requirement serves to prevent fraud and preserves a traceable chain of title. 2010) holding that dismissal is appropriate when Plaintiff fails to prove that allonge is actually affixed to the Note. Thompson. 1988): The Code’s requirement that an indorsement be “firmly affixed” to its instrument is a settled feature of commercial law. But neither the general doctrines of commercial law nor any established exception thereto make words of mere assignment and transfer of such paper. equivalent to an indorsement within the rule which admits the payor to urge. 167 (3d Cir. In re Weisband. any valid defense which he had against the original payee. With a unanimity unusual in decisional law.” b) McRae stands for the common sense proposition that when indorsements and allonges start showing up in the middle of litigation. D. payable to order. 427 B.2d 163. Madison Realty & Dev.. adopted verbatim by every American state. Inc. as against the holder of an unindorsed negotiable security. they were created for litigation (and are not therefore business records). 2010): a piece of paper not attached to the note at the time the note was produced was not an effective indorsement sufficient to negotiate the note to make the party a holder with standing to enforce the note. the fact that the piece of paper called an allonge was not included with the copy of the note provided at an earlier date was a “further indication that the allonge containing the Endorsement was not affixed to the note. Ariz. 13 (Bankr. contained in a separate instrument executed for a wholly different and distinct purpose. the directibe has been faithfully observed. c) 32 . 3.” See also Adams v. See also HSBC v. Sep.
For a business record to be admissible as an exception to the hearsay rule. 21. it must meet three requirements: 1) the maker of the record as well as the person providing the information for the record must have been acting under a “business duty” to report the information.iii. though. 2010). We agree with the circuit court that Aurora sufficiently established that it was the holder of the note. Aurora Loan Services.) The burden is on the party wishing to use the exception to establish that foundation.3d 932 (Fla. 36 So. The problems with supporting affidavits: a) They don’t exist. Aurora Loan Services. Riggs v. §27:239 (20112012). 2010 WL 1561873 (Fl. Apr. but no supporting affidavits or deposition testimony that establish valid transfer to servicer. Business records exception. LLC. Crim. is self-authenticating. & Proc. payment histories. Prac. and 3) the record must be made at or near the time of the activity by someone with knowledge. etc. “The circuit court granted summary judgment in favor of Aurora over Riggs's objections that Aurora's status as lawful ‘owner and holder’ of the note was not conclusively established by the record evidence. Servicer forecloses and produces original note and mortgage endorsed in blank. Prac. Commercial paper. at 933 33 . App. a) This arises with letters sent to the homeowner. (Note: whether something is authentic and therefore admissible under BRE has no bearing on whether admission of a copy would be unfair on KRE 1003. b) c) d) iv. Attacking affidavits. LLC. 9 Ky. App. 2) the record must have been made in the regular practice of that business activity.1 1 This opinion was withdrawn and superseded on rehearing by Riggs v.” Id. 2010).
11. LLP. 238 F.P. §4. ii) d) They are also communications for purposes of FDCPA (cannot be false or misleading) Gionis v. 336 B. v. Ohio Aug. LLC v.” The statement. 2010 WL 2228289 (Bankr. LLC v. 4. In re Box.D. Imwinkelried. 2009 WL 2437243 (N. Appx 24. x b. Mo. W. Proving lost note cases. B.b) They are based on computer evidence. 2009). Additional problems of securitization.03 (5th ed. lacks credibility. Locating and reading securitization documents. In re Vee Vinhnee. Block. 437 (9th Cir.A. Rathbone. Midland Funding. Ocwen Loan Servicing. 2005).D. 27-30 (6th Cir. Evidentiary Foundations. outlines a detailed inquiry for verifying the authenticity of business records See Edward J. not a fact. and inappropriate for such an affidavit. 2010) quoting Bellistri v. c) The affiants have no idea what they are saying. EDGAR Who has standing to sue under the PSA? This question can only be answered by looking at the language of the Pooling and Servicing Agreement. Additional requirements of assignee. claiming to be the “holder” is a “legal conclusion. 2002). Javitch. June 3. See Green Tree Servicing. 2007). Sanders for Kentucky 34 . x Attacking sufficiency of pleadings vi. and is entirely unpersuasive on the question of whether the Note and Deed of Trust were properly assigned to BAC. Brent.R. a. i) Affidavit traditionally used by foreclosure mills “is self serving.
d. it was in effect a mortgage to Mrs.. c. b. a) Note follows mortgage. conveyance or other act of the trustee in contravention of the trust. Governed by New York law: i. Securities Inv. Understanding MERS. Both Green Tree and CWCapital Asset Management both find that the servicer has standing to sue on behalf of the trust. except as authorized by this article and by any other provision of law. therefore assignees of MERS have no standing. Assignment of mortgage is totally irrelevant to question of entitlement to enforce. In re Weisband. Additional problems of MERS. either. but only AFTER looking at the language in the PSA. not the other way around.” “If the trust is expressed in the instrument creating the estate of the trustee.W. MERS is not a real party in interest. Harrod Bros. Co. Servicer or other foreclosing Plaintiff must “connect the dots” in order to have standing to foreclose. Negotiation of note creates equitable assignment: “Though the mortgage was not assigned of record. 493 (Ky. McKinney’s EPTL §7-2. 7 S. Attacking securitization processes. a.2d 492. Do not let servicers foreclose without producing the Pooling and Servicing Agreement. of St. In re Weisband. Drinkard.analysis. 5. Attacking MERS arguments. How securitization works. Louis v. every sale. and the transfer of the notes operated as an equitable b) 35 . 1928). i. ii. MERS has no financial interest in the notes.4 “Act of Trustee in Contravention of the Trust.” ii. is void.
App. Oct. Ohio Bankruptcy: Assignment of mortgage “did not transfer the right to enforce the note to [Plaintiff]. U.D. Wells Fargo Bank. Jordan. 2004).C. 321. 36 S.2d 722 (Ohio App.2d 680 (Fla.” Plaintiff would not become PETE until compliance with the UCC for negotiation or transfer.” Drinkard v.C. §3-23 cmt. 873 (Bankr. 69 B.D. N. E.R.assignment of the mortgage. 2009) (citation omitted): “While ‘mortgagee’ has been defined to include assignees of a mortgage. 874 So. N.A. George. but dismissal with prejudice was a little much.1930). 2009). Mar.E. Ocwen. 14. d) e) f) ii) iii) 36 . Possession of the note created equitable interest in the person possessing it. 897 N.” Bellistri v. v. Ass’n v. 2009 WL 625560 (Ohio App. 2009 WL 3297551 at *3 (Mass.A. i) “Assignment of mortgage subsequent to initiation of suit deprives Plaintiff of standing to bring foreclosure. Ohio 2009). Ibanez. Bank Nat. Plaintiff bank cannot get standing halfway through the case through assignment of mortgage. See U. Mich. LLC v. 12. just dismiss without prejudice.S. Solomon. 324 (Bankr. 1 (2002). 1987). WM Specialty Mortgage.W. v. Byrd.” In re Atlantic Mortgage Corporation. c) Missouri: An assignment of the deed of trust [mortgage] separate from the note has no “force. it only gave that entity a claim to ownership of the Note. In re Wells.R.2d 56 (Ky. Land Ct. Assignment of mortgage after suit is filed is especially damning. Michigan Bankruptcy: “a [creditor’s] interest in a mortgage assigned to him must be analyzed separately from that [creditor’s] interest in the corresponding underlying note.N.” Wells Fargo Bank.. 407 B. 2008).
Failure to request additional documentation. 1994).2d 366 (Ky. B. b. a. Common problems. HAMP Enforcement 1. 2009). App. 2. Deutsche Bank Nat. C. West Point Nat. Equitable Standing 1. Bank.” iv) MERS case out of Kansas: Landmark Nat. e.2d 919 (Pa. Failure to timely review for permanent modification. Ct. 2009): assignment of mortgage after start of suit is allowable so long as there is evidence plaintiff is the current holder and owner of the note. Smith. Fleet Real Estate Funding Corp v. Kesler. 2009 WL 3440028 (Ohio App. v.W. Oct. 1987). c. Communication requirements. 37 . 23. Super. there is nothing to suggest that one who expects to receive the mortgage by assignment may undertake any foreclosure activity. See Equity Memo for full treatment. General program guidelines. b. Failure to review. Trust Co. 530 A. There are some cases against us.3d 158 (Kan. d. 2. 887 S. See also Pearman v. a.in other words the current mortgagee. 216 P. Bank v. Failure to review homeowners for loss mitigation options under federal program (FHA in this case) impacted the Plaintiff’s equitable standing to pursue foreclosure. Failure to provide reason why homeowner is not eligible. Failure to calculate income correctly. Standard waterfall within NPV test. Pagani. v) 3.
The duty of good faith and fair dealing does not extend to an obligation to accept a third party offer to purchase a property subject to foreclosure. 327 (Bankr. 2010). 391 B. x See Jury Instructions document for elements F. Affirmative Defenses 1. All contracts under the UCC are governed by a duty of good faith and fair dealing: KRS 355. x See Jury Instructions document for elements E. x 2. See Jury Instructions document for elements Negligent misrepresentation.D. servicer’s multiple late fees not allowed. Breach of duty of good faith and fair dealing. Exhaustive. Equitable estoppel. Pearman. 310 S.1-304.W. Torts 1. In Pearman: A bank cannot sell real property subject to a foreclosure proceeding to a third party during the proceeding. Breach of Contract 1. bogus fees not allowed. Mortgage servicing. inside-look at the mortgage servicing industry.D. In re Stewart. damning. App.R.3d 218 (Ky. b. Waiver. the West Point Bank sold the house to a third party for a profit. 2. La. Before the foreclosure proceedings were complete. Fraudulent misrepresentation.. 2. ii. Harvest Homebuilders LLC v. i. a. legal fees partly not allowed. Commonwealth Bank & Trust Co. The court held that the bank had a duty to act in a bona fide manner and this sale ran contrary to that duty. To do so violates the implied covenant of good faith and fair dealing. E. 2008). 38 . Kentucky law recognizes that every mortgage contract has an implied covenant of good faith and fair dealing.
Va. family. 19.A. 2008 WL 4267847 (Ky.2d 549 (S. Inc. 3. App.Supp. HOEPA. 2008). Sep. 2. Ky. App. so long as it was purchased for personal use. i. Statutory Violations 1. Yield-Spread-Premium as a HOEPA point and fee: Short v.G.D. 2003). Dupont de Nemours & Co. Ky. 2008). a.W. W. Stafford v. First Security Trust Bank.I. Heart- b) 39 . 401 F. 726 (Ky. KCPA does not apply to purchase money mortgage transactions.3d 723. TILA. Kentucky Consumer Protection Act. 40 F. a consumer must demonstrate intentional or grossly negligent conduct which amounts to “substantial wrongs” rather than mere irritations. iv. UDAP: KRS 367. iii. A federal court has interpreted case law and the KCPA to determine that the sale of credit. Inc. E. 2000).D.Supp. Burden of proof: Under KCPA. RESPA. Credit as “service” under KCPA. or household purposes... b) ii. Lexington Truck Sales. People protected: people who purchased goods or services primarily for personal.D. a) KCPA does not apply to real estate transactions such as a contract with a builder to build a home. 4. N. 2005). 792-793 (W. Taylor v. Mortgages and real estate. Wells Fargo Bank Minnesota. Supp.. Ky.2d 776.. Craig v. Todd v. 262 F. Keeton v. 1998). Keene. Cross Country Bank. App.W. 32 S.3d 90 (Ky. 865 (W.110-367-300.2d 857. 275 S. is covered by KCPA. a) Gooch v.
Nichols. App. FDCPA applies to lawyers. 2003) v. and Clark. App.land Mortgage. Padrick. Durbin v. Law firms as debt collectors: Miller v. 1. 2004). c) KCPA does not apply to mortgages made for business or commercial uses. McCalla. 40 . Aug. a) Is servicing a good or service that can be purchased? Can violations of HAMP be an unfair or deceptive act or practice? Can statements made to homeowners during the loan modification process be KCPA violations? b) c) b. Credit card case: whether credit card company’s inquiry into a consumer’s dispute satisfies the requirements of the FCRA is a question for the jury: Johnson v. 5. Cobb.3d 872 (7th Cir. x See Jury Instructions Document for elements vi. NA. Jury instructions. FCRA. H. FDCPA prohibits law firm’s statement of debt that only includes principle balance but does not include the interest. Raymer. realtors.. 214 F. 2006 WL 1510479 (Ky. and other charges. 3d 426 (4th Cir. 7. Available in fraudulent misrepresentation. title companies. Bank of the Bluegrass & Trust Co. MBNA America Bank. Critical questions.L. 6. Inc. and/or loan originators.C. 2003 WL 21770805 (Ky. Punitive Damages 1.. L. FDCPA. 357 F. Kentucky Consumer Protection Act.. late charges. Proving joint venture between loan brokers. Proving joint venture.). Home solicitation. 2000).
” 2. Homeowner must have opportunity to complete discovery. City of Newburgh.365. Deed-in-lieu. App. 2001). Mazyck. 2006 WL 2454647 (Ky. 2. 841 (Ky. Short sale. 226 S.2. a.W. 2006). Protecting Your Client Following Foreclosure x Securing a release of the lien: KRS 382. Mortgagee’s failure to comply with loss mitigation procedures (FHA in this case) created a genuine issue of material fact that precluded foreclosure (and impacted the foreclosing Plaintiff’s equitable standing). Jurors allowed to consider the financial resources of defendant in awarding punitive damages. Mitigating the impact of foreclosure.3d 146. Cash-for-keys. Aug. 41 . Smith. Roberie v. a. K. 262 F. Sale. Preparing the Client to Consider Options Leaving the House 1. Compensatory damages are not necessary in order for a jury’s award of punitive damages to survive appeal.3d 837. b. 3. J. I. (Kate’s bonanza claims) III. c. Suter v. 24. Provost v. B. Fleet Real Estate Funding Corp v. b. PART TWO: HELPING CLIENTS PURSUE ALTERNATIVES TO FORECLOSURE A.163 (2nd Cir. Discovery Requests Defeating Summary Judgment Motions 1. Vonbokern. Avoiding foreclosure. 2007): Entry of judgment “is proper only after the party opposing summary judgment has been given ample opportunity to complete discovery and then fails to offer controverting evidence. Chapter 7 bankruptcy.
HAMP. General considerations. Reverse mortgage. c. d. The res. 3. c. Refinance. 42 . 2. Saving the House 1. Chapter 13 bankruptcy. Reinstatement. b. Repayment. Forbearance agreements. 4. a. b.C. In-house products. a. Loan modification.
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