Tag Archives: substituted service

PREPARING FOR THE FORECLOSURE ONSLAUGHT

(OP-ED) — The author of this post is a paralegal and trial consultant on quiet title, foreclosure and document challenges and does not offer the following information for anything but educational “intake” value; thus, none of this should be regarded as legal advice nor relied upon without the advice of competent counsel.  

THE TIME TO PREPARE IS NOW!

Understand that my postulations on this blog serve as warning signals for “how to head ’em off at the pass” and my notions are served by supporting case law.

I consider Rhode Island to be a hopeless case when it comes to MERS-related cases.  Anytime you want to argue what rights MERS has to do anything in front of a Rhode Island Superior Court judge, you may as well just turn around, bend over and let him … (insert your own imaginative deviations here).

However, on occasion, a case will come up where judges’ deviant behavior is called out by their state’s Supreme Court and I make note of the following case as it relates to other matters you should be looking out for at the inception of the alleged “bank” behavior in its attempt to start a foreclosure action:

Woel v Christiana Trust et al, Sup Ct R. I. No. 2018-347 (June 2, 2020)

The very basic tenets of a foreclosure involve “notice” and what constitutes proper notice.  Many things come into play in this 16-page opinion; however, despite the rantings of the mortgage loan servicer in this opinion (Selene Finance), the state’s highest court vacated the Superior Court judge’s for summary judgment in favor of the alleged REMIC.

Preparation for the onslaught by your alleged “note holder” involves some deliberate planning:

  1. Get out all of your mortgage documents and read them, especially the part where the default and any related notices to you come into play.  If notice does not comport to the terms of your mortgage or deed of trust, your focal point becomes attacking THAT flaw, not everything else.  The foregoing case illustrates that.
  2. Obtain copies of all recorded documents NOW!  You get them from your county land records. Do not wait until you start getting notices from your mortgage loan servicer and go into a state of panic or denial and hit the “pause” button.  Because of this COVID-19  pandemic, you have the ideal opportunity to get proactive to deal with what may be coming at you head-on when the moratoriums are lifted and the servicers go on the warpath.
  3. Locate any/all Assignments of Mortgage or Deed of Trust.  These become your secondary form of attack.  You will need to analyze them fully and understand what constitutes the basis for your attack.  Come at them in the wrong way and your attack plans will fail. Examining these assignments requires due diligence and intensive research.  Plan on spending an entire day looking up everyone that is named within those assignments and background them thoroughly.
  4. Develop a timeline of your chain of title.  You have to be able to clearly identify WHAT happened during the course of ownership of your home and identify with specificity WHEN it happened and attempt to detail the reasons for such occurrences.  Knowing HOW an entity operates in order to develop suspect patterns is important in your research, so don’t skimp here, on time or details.
  5. Obtain certified copies of all recored assignments as well as “office copies” of all recorded documents.  You want a certified copy of the assignment as evidence in support of your two-pronged secondary attack.  What I will be sharing in the upcoming online Foreclosure Defense 101 Workshop will deal with this step in the process.  Keep in mind that you may have experience in dealing with previous foreclosure attempts.  Many of the defenses may have resulted in successes in your favor; however, also keep in mind that the servicers’ lawyers are going to ramp up the next time and probably won’t make the same mistake again.
  6. Open all mail and especially those certified letters and notices from your alleged “note holder” or servicer.  DO NOT let them pile up on the desk or kitchen counter. Be excited when they arrive.  Be excited when the process server comes to your door.  DO NOT avoid service.  If you do, the bank’s lawyers (who are really representing the servicers) will serve you with Substituted Service and/or when that attempt fails, you get hit with a default judgment, which is as good as gold to the bank!  (This of course, does not apply to deed of trust states!)
  7. Examine any notices you receive regarding the “alleged default” on your loan. Understand WHO the letter is coming from and WHO is attempting to accelerate the note, which requires payment in full in lieu of pursuit of a foreclosure action against your property.  The letter should fully explain WHO is claiming to be the “note holder” that has the right to enforce the terms of the mortgage or deed of trust.  If that portion is missing from the notice, you have every right to immediately demand an explanation vis a vis a Qualified Written Request under Section 6 of the Real Estate Settlement Procedures Act (RESPA).  You cannot prepare an adequate defense if you don’t know who’s coming after you.
  8. In all instances, assume that: (a.) any notices you get from a trustee or law firm are based on actions by the mortgage loan servicer, NOT the lender or trustee of a REMIC trust; (b.) any notices you get will likely contain false and misrepresentative statements; and (c.) any notices you get will rely on a corresponding assignment that has been recorded in the land records preceding a Substitution of Trustee or Notice of Default or Notice of Intent to Foreclose.
  9. At all times during the process, keep your eye on the land records!  Check them weekly for any sign of new recordings, corrections to the assignments or newer recordings, attempts to hide the assignments by using alternative means (like putting all of the recorded documents in the name of your spouse, etc.). If need be, ask your county clerk for help in determining if there’s “anything else” in the land records you’ve missed that could defeat your defense, including Limited Powers of Attorney recorded by the mortgage loan servicers, especially when they’re the “assignor” and the “assignee” (called a self-assignment) of any alleged authority.
  10. Understand that YOU are NOT the perpetrator of any alleged foreclosure scheme coming against you!  You have every right as a property owner to defend the home to the best of your ability, even if you lack legal acumen.  As a participant, you may also become the victim of identity theft and numerous felonies committed by the bank, the trustee or the mortgage loan servicer dealing with your mortgage loan.  Assume everything they tell you is a lie … and you won’t be surprised later because you’ve prepared yourself to retaliate against their false assumptions.

Mortgage loan servicers are out to make money to reimburse what they had to pay investors or whatever lender happens to allege it’s the “note holder”.

At a point in time in the near future, the moratoriums will be lifted and you should be well prepared to understand whether the servicer coming against you has any right to offer you a loan modification or forbearance … or for that matter … to come against you at all.  I’ll discuss that in my next segment.  Visit the Clouded Titles website for more information!

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TO FIGHT THE GOOD FIGHT … OR NOT!

OP-ED — THIS IS STEP THREE OF A 3-PART SERIES BY DAVE KRIEGER, AUTHOR OF CLOUDED TITLES

I have conducted intense research for over ten years on chain of title issues and what it means for affected homeowners.

Foreclosure mill attorneys could care less about the chain of title, so long as they can come up with a game plan to steal the property, even if it means participating in the manufacturing of title documents that create standing for their client to allow their little “scalping party” to appear in court.

Once the mess of confusion has subsided and the educational process has begun, the average homeowner discovers (over time) that the method by which the alleged “lender” has preyed upon them has imbued them with a combination of guilt, rage, entitlement or empowerment or the combination of one or more of the above.  This is where things get tricky because the average homeowner generally does not know what the chain of title could possibly reveal in their particular foreclosure case.

As the clock ticks, depending on where you live, the process of foreclosure continues.

If you’re in a deed of trust state, you generally get about 45 days prior to the date of the sale to react.  By “react”, I mean file a lawsuit and get a Temporary Restraining Order (TRO) to stop the sale and have your case heard before a tribunal.

If you’re in a mortgage state, you generally get 20 days to file an answer ONCE YOU’RE SERVED with process.  This is key to your understanding. Once a party to a foreclosure action finds out the lender is attempting to serve them through a process server, they hide to avoid service.  This only works for a short time, as the process server will figure out (through skip tracing) what your daily routine consists of and will eventually catch up with you and serve you with the foreclosure complaint when you least expect it.  Avoiding service usually means the attorneys for the bank (or the servicer) could end up going to the judge and requesting what is known as substituted service, which generally means that a relative who knows you can be served with the papers instead.  Then the 20-day clock starts.  By the end of that 20th day, you would have had to file an “Answer” or face default judgment.

Answer #1 … to Run or Not to Run … 

What you’re about to read is NOT all-encompassing, because every homeowner seems to choose a different path.

95% of homeowners who are served with a notice of foreclosure … RUN AWAY from it!  I know that figure is hard to believe … BUT … that is exactly what the lender wants you to do.  The alleged “lender” knows it’s a “numbers game”.  The majority will run away but some will stay and fight.  By avoiding the foreclosure (by running away or doing nothing), you’ve made the lender’s job 95% easier … provided the lender (or the alleged lender) has done their job right.  When the average homeowner gets served they RUN because they lack education or the funds to get educated and fight the foreclosure.  The lenders know that 95% of all homeowners do not have a legal defense fund set up to wage war in the court against the lender to save their homes.  The lenders know that in most cases, they will end up with the house (whether free and clear is debatable here) because the homeowners are scared away from a fight.  Those who do not understand that the court systems in America are motivated in favor of lenders will soon find out that fighting “the good fight” is not the easiest task in the world.

Now let’s look at the 95% of the homeowners who “run away” from the problem.  Many pack up and move out as soon as they are served with notice.  A certain percentage of them will simply “freeze in place” once served.  They don’t know what to do next.  Rather than pack up and move right away (upon service of process), they stay put and either ignore the paperwork (denial) and whatever notice they are served with and simply wait for the county Sheriff or constabulary to evict them and put their belongings to the curb.  I can’t begin to tell you what that feels like, so I’ve included a video clip to refresh your memory in the event you can’t visualize it.

I cringe watching that video, almost to the point of tears.  This is not HOW I planned to peel away at the onion!   I pray to God that no one has to endure this, but sadly, in order to avoid what that video depicts, the homeowners plan their move accordingly, knowing the bank will eventually show up to their doorstep with law enforcement and they are “moved” whether they like it or not.  This does NOT have to be you!  Even if you have a PLAN B in place, the best well-made plans take time.  You do NOT have to run, now or then.

Answer #2 … to Fight the Good Fight … or Not! 

Not fighting “the good fight” manifests itself with bad behavior.

Remember I first discussed guilt, rage, entitlement and empowerment (or any combination thereof) earlier in this post?

Fighting based on guilt is totally inappropriate.  It basically means that you’ve let the lender and/or its henchmen (the servicer’s $9/hour cubicle employees) take over and run your life based on “power over” collection tactics.  The mortgage loan servicer is obviously trying to fleece you for every dime it can get because that’s how it makes money.  You fight the urge to say “no more” based on guilt feelings.  You fight the urge based on guilt because failing will bring on more guilt.  You want to keep your house and so you’re literally “bending over” at every whim of the foes coming against you.  While this appears normal as part of our built-in defense mechanism, letting guilt drive your emotions means making bad decisions (decisions based on emotion rather than common sense and logic).  It’s basically fighting with yourself because the servicer is making your decisions for you and you’re not making them yourself.  You feel guilty because you let them win … and they’re just getting started!  Guilt can fuel the unthinkable, like murder-suicide.  That is not the answer.

Fighting based on rage is also totally inappropriate, unless your rage is channeled into the fight itself.  Walking around being pissed off at the world, being pissed off at your family and friends and whoever you happen to engage in any related financial conversation is not the answer.  Rage, like guilt, is also an emotional element not worth pursuing if you’re going to fight “the good fight”.  Rage will make you do extremist things, like spend money where it doesn’t need to be spent logistically; spending money going on lavish vacations while ignoring the responsibilities of American homeownership; substituting rage for logic in failing to develop a business plan in order to make things happen.  Rage can also fuel the unthinkable, like murder-suicide. That also, is not the answer.

Fighting based on entitlement is understandable based on the political times we live in.  Most of America has been so conditioned to live off the government (via entitlements) and trust it implicitly that most Americans have been conditioned to believe that “the world owes me a living” and that “if I complain to the government, the government will step in and save me”.  This is false conditioning.  Complaining to any government agency about your foreclosure is a colossal waste of time!  This conditioning was by design, based on deceit by some very powerful oligarchs who have made themselves gods, thinking that their rationale is better than the average Americans’ and that they should be entitled (self-entitlement works in strange ways when you have lots of money) to make decisions for everyone else, including letting the banks run America. When you start to believe that the world owes you a living, then you can easily fall into the trap (when seduced into this false belief) of, “the bank screwed me, so I deserve a free house!”  That is not only illogical in thought, but the courts in this country, who feed off of entitlement, can spot an attitude of entitlement a mile away and shut it down!  Entitlement does not fuel the unthinkable, but it does fuel ego and pride … and pride goeth before a fall. Being entitled means you know everything.  That too is dangerous.  Ego has also hurt the banks in playing their “numbers game” too; however, the banks make up for it through the numbers of homes they’ve “stolen”, making them a more powerful legal adversary.

Fighting based on empowerment is the most desired aspect of fighting “the good fight”!  Knowledge is power and wisdom is knowledge applied.  Knowing WHEN to apply knowledge is what wins battles (Sun Tsu, The Art of War).  Knowing WHEN the enemy is weakest and where their weakest points are to begin with puts the homeowner in a condition of empowerment.  Even Tige Johnson, a transactional lawyer out of Chicago who has lectured at my workshops, has even stated that when homeowners are fully aware of the facts in their case and what the law says, they make very empowered clients.  Employing “rage” as a “fuel” to empower you to search is the greatest attribute, because it’s what drives you to succeed no matter what.  Rage alone, without empowerment, spells doom for every homeowner who wants to fight “the good fight”.

Answer #3 … the average homeowner who litigates a foreclosure can delay a foreclosure for up to 2 years! 

Ahhhh!  The naysayers and the gainsayers will chastise me for creating false hope; however, the foreclosure defense attorneys have figured out a gameplan that will delay a foreclosure for 2 years or longer and in doing so, “buys” their client time.  Time for what?  To sit on their laurels and enjoy the scenery?  Those who are embroiled in litigation MUST stay on top of it.  There is no time to dawdle or take a vacation to the Bahamas just because you’ve forced the alleged “lender” to prove its case. By the tone of your response to the foreclosure notice, whether in a deed of trust or mortgage state, the foreclosure mill law firms can measure how much of a fight is necessary to accomplish their mission.  They want to win.  They want to help their client get your home.  Many of them will engage in misleading tactics designed to throw you off point.  Many of them will commit deceitful acts and make false representations to the court.  This is all part of their game.  It also keeps the foreclosure mills in business longer because there’s no more income stream to them once the foreclosure is over and they’ve won.  And you wonder why the foreclosure mills aren’t coming after me?  It’s because through my efforts, they stay in business because I’ve empowered homeowners to fight “the good fight”!  Think about the logistical financial issues posited to the banks and their attorneys.  As Tige Johnson has stated (in my workshops), “I’m here to make the banks bleed green.”  Thus, it costs the banks to fight your “good fight” too!  This is something to consider.

In a deed of trust state, by law, most states do not allow for anything past the taking of the security, which means that once the foreclosure is complete, there is no deficiency judgment.

However, in order to keep the foreclosure hounds at bay, you have to initiate a lawsuit in the proper court, because deed of trust states do not provide for your “day in court”.   You have to “create” your day in court by filing a claim against the lender or its alleged representative.  Once that suit is filed, you also have to ask the court to stop the foreclosure sale by granting a temporary restraining order (TRO).  Simply filing a lis pendens only “gums up the title”.  It does NOT stop a foreclosure.  I had to get that through my head when I started helping homeowners fight “the good fight”.  As I teach in my Foreclosure Defense Workshop (along with attorneys who lecture at them that are well versed in this subject matter), you have to follow rules of civil procedure and rules of evidence to the letter, which means you have your work cut out for you unless you have the resources to retain counsel to represent you.

In a mortgage state, by law, most states provide for deficiency judgments (post-sale) and attorney’s fees, which means this has to be taken into consideration before you fight “the good fight”.

Many times, a straight forward “Answer” that is timely filed with the court and appropriately served on the foreclosure mill law firm representing your alleged “lender” adds an additional 30-60 days to your “fight”.  Simply put, ANSWER the damned complaint, point for point.  However, just because you’ve filed an Answer to their complaint (in a mortgage state) does NOT mean you get to sit back and relax.  Your fight is just beginning.  Many reading this post have kept the lenders at bay for 8 years or longer!  Whatever made you think you can’t do the same?  Would having an extra 8 years of time give you time to get your financial affairs straightened out to the point where you can strategically leave the suit and enter into a new financial realm you created during that time frame?  Many smart homeowners have figured out that if they can “buy time”, they can re-strategize their financial position and move on! Sadly however, most homeowners aren’t that smart when it comes to litigation, which is why I hold workshops.

Answer #4 … opening the door to “empowerment” by doing your homework! 

Over the years, I have learned that every alleged “lender” (generally through its mortgage loan servicer) creates at least one “assignment” and causes it to be recorded in the land records in the county your home is located in.  Many of these assignments are created just prior to a foreclosure action, which becomes suspect as to its legitimacy.  You can bet that the assignment was “designed” to “manufacture standing” so the lender’s representative can complete the foreclosure without question from the court.  It’s like “manufacturing evidence”, which can be used to the lender’s advantage … or in many cases by you … to the lender’s disadvantage.

Starting with evaluating your chain of title may prove to be the key to discovering the strategies you need to fight “the good fight”. Filing bankruptcy to stall the inevitable is the “cheap way out”, that will hurt your credit more than the foreclosure itself (by more than 300 points), which is why I’m not quick to even think that way.  Unless you have a defined strategy involving an adversarial proceeding, along with a huge mountain of unsecured debt with no way to pay it back, I would never consider filing bankruptcy.  Filing bankruptcy is not empowering anything.  Filing bankruptcy is giving up in a feeble attempt to “stop the bleeding”.  Even if you stop the bleeding, the damage has been done and there will still be a scar, a scar you will live with for ten (10) years (even if you are successful in removing the bankruptcy from your credit reports).

In order to become MORE successful in your efforts, you need to plan a strategy,which includes an exit strategy in case things don’t go as planned. These days, I’m seeing a lot more investors using “end game strategies” (which I also teach at workshops) because they are “calculated” and their financial weight can be measured.  The average homeowner however will find themselves in a different scenario because as I stated before, the “war chest” simply doesn’t exist in most cases.

Thus, once you obtain your entire chain of title, you can look for clues as to how to unwind your dilemma or in the alternative, find the most efficient and affordable way to restructure your life and move on.  The “devil is in the details” and most of the time, the evidence found within the promissory note does NOT match up to what the recorded assignment says.  The other side will twist the truth to prove its case; or in the alternative, throw in stumbling blocks to increase the cost of your litigation in an attempt to discourage you from fighting further and to resort to settling when settling may not be an option when you know the truth and have figured out ways to prove it.

I’ve been involved in numerous cases throughout my years of involvement in the world of foreclosures, which is why I’m called in to consult attorneys on various cases and conduct chain of title assessments (COTAs) for homeowners, which saves them time and money because the attorney can get to the real issues faster, which saves the attorney time as a benefit to the homeowner, especially where time is of the essence.  I can genuinely live with myself in what I’ve been doing, which is to educate homeowners using the research I’ve conducted since 2007.  Whether the research pans out for the homeowner depends on how the homeowner chooses to fight “the good fight”, which is why I’ve developed workshops that teach foreclosure defense.

In closing, I also warn of using “rage” as your guide when it comes to picking your litigation strategies.  You have to have a level head in order to evaluate what strategies are going to work best.  Suing everyone over everything is a sure way to stretch your finances to the limit.  While I believe that walking away (strategic default) from a future problem (home foreclosure) has been used not only by myself but by multitudes of others as well, knowing the truth about the matter may have changed the strategy I’d planned as well as the case outcome.  How then can you make an honest decision without a level head, a true set of facts and multiple strategies with which you can cloak yourself in empowerment?

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