SETTING TRAPS FOR BANKS AND LOAN SERVICERS
“Victory comes from finding opportunities in problems.” – Sun Tzu, The Art of War.
“Never interfere with your enemy when he is making a mistake.”
If you want to stop foreclosure and mortgage fraud you need to find out what cards the other side is holding. One of the first things we recommend you do is demand that your lender or current loan servicer give you a copy of every document they have for your loan file. Often loan servicers do not have the documents they need to foreclose. Sometimes they give fabricated, forged, documents with robo-signed signatures and incorrect fraudulent information. In fact, when one of our Private Members requested their loan servicer provide them copies of all the documents they had on file, the loan servicer sent a copy of their alleged promissory note that contained different loan amounts and different closing dates than those that were on their original loan agreement. Can you imagine what how a bank’s lawyer would explain this to a judge and jury?
You can begin to ask this important Who Are You question by way of sending informal discovery “demand letters” that can include:
- Error Resolution & Information Request (ERIR) Letters
- Federal Debt Validation Letters
- Qualified Written Request (QWR) Letters
- Tort Letters
- Truth in Lending Act (TILA) Rescission Letters
If you are the defendant in a foreclosure lawsuit you can (and should) challenge your opponents’ Standing with motions and discovery tools such as: Request for Admissions, Request for Productions, Interrogatories, Depositions, and Subpoenas.
The main question to ask is: Who Are You? and What Legal Rights Do You Have to Foreclose on My Property? Show me the note, and prove to me that you have legal Standing, Capacity, and Agency to bring this foreclosure action in front of the court.
FRAUD STOPPERS Private Administrative Process is a targeted approach to Informal Discovery under UCC 3-501. PRESENTMENT or your States equivalent.
We start with a Mortgage Error Resolution/Request for Information (ERIR Letter). If you believe there is an error on your mortgage loan statement or you’d like to request information related to your mortgage loan servicing, you must exercise certain rights under Federal law related to resolving errors and requesting information about your mortgage loan. If you think your credit report, bill or your mortgage loan account contains an error, or if you need more information about your mortgage loan, you send a written letter concerning your error and/or request.
Usually the loan servicers will not respond to your “informal discovery requests” in accordance to law. And that’s a good thing! Remember to never interrupt your opponent when they are screwing up. This can give you an advantage when you take legal action. The courts are supposed to be a remedy of last resort: meaning they want you to try and work things out administratively before bringing the issue to the court.
If you are forced to take legal action against your lender or loan servicer, and you can show the judge that you tried to work things out, but they were nonresponsive to your lawful request, or left you no other option but to file suit, you can start off on better footing, rather than if you just filed the lawsuit to start with. Plus, in conducting your informal discovery process you may be able to obtain damning evidence and material facts needed to exhibit to your complaint and win your case. Remember “Never interfere with your enemy when he is making a mistake.”
When dealing with the banks there are two rules to remember:
1. We never ask them to do anything that we expect them to do.
2. We never ask them to do anything they’re not required by law to do.
So, I’m going to ask you to do this thing…
But I’m really hoping you don’t do what I am asking you to do.
Because then I can land on you like a ton of bricks!
However, if you are going to try this you must always be at least two moves in front of your opponent. FRAUD STOPPERS can help you.
One of the advantages of using this technique is it can prevent you from getting frustrated if (and when) the bank doesn’t do what you are asking them to do. Instead you might even get excited, because if, and when, they violate the law by not responding properly to your informal discovery request you could end up with even more leverage against them.
We have found the banks and loan servicers almost never respond to our informal discovery “demand letters” the way the law dictates they respond. They usually send you a non-responsive answer.
FRAUD STOPPERS Administrative Process (Informal Discovery) is designed to catch the banks screwing up, so you can increase your odds of success. This process can help you stop or stall the banks collection efforts (including stopping a foreclosure sale if one is imminent) and buy you the necessary time to lay the necessary groundwork for a lawsuit demanding special or compensatory damages and equitable relief for clear and marketable title to your home.
Now let’s talk about the foreclosure laws as they relate to everybody. If you have received a Notice of Default (NOD) or Notice of Acceleration (NOA), then time is short, and you need to do something fast. And the only thing that will get the banks attention is a lawsuit. If you have an impending sale there are several things you can do. If you haven’t done anything concerning the foreclosure process yet, there are some things you must do simultaneously.
The first thing you want to do is send out several letters. Whoever is attempting to foreclosure on you, on that person you should send a debt validation letter (DVL). Often, a debt validation letter (DVL) will stall the foreclosure. Because when a debt validation letter is filed, the lender is obligated by the Fair Debt Collections Practices Act (FDCPA) to validate the debt.
A presentment under the Uniform Commercial Code (UCC) is defined as a demand for payment on a debt in us dollars. If your sent a presentment (a demand for payment) from anyone, you may dispute the debt with that person, and if you send them a letter stating that you dispute the debt and a demand that the claimant prove up their claim, then the debt collector is required to seize all collection efforts until they have proved up the claim.
So, if your lender is in the process of foreclosure, and you send them a debt validation letter, they’re going to claim that in this case they are not debt collectors, but in fact they are merely attempting to recover collateral. The courts across the country are split on this issue. Some states say yes, they are a debt collector, and some say no they are not a debt collector. For our purpose we don’t care either way, because we’re going to make the claim and by law once the demand is made, they must prove up their position either way. The issue that we’ve been making with the lawsuits we’ve been helping people produce is that they are a debt collector until they show that they are not a debt collector. Usually they like to reply with a Rule 12 (motion to dismiss for failure to state a claim), alleging that they are NOT debt collectors and therefore they do not fall under the FDCPA.
So, the argument that we’re making here is that in order to implement the intent of the legislator (and that intent was to prevent someone with no claim on a debt from collecting on a debt), you are demanding they prove their position.
If you have a debt with GMAC and I call you from Joe Blow collections or send you a letter claiming I’m collecting for GMAC and you need to send all your future payments to me. Well if you send your payments to them and they are not collecting for GMAC the payments you send to them do not extinguish the debt; and that’s in the Uniform Commercial Code.
You see the foreclosure mills and the banks agents are trying to squeeze in under that exclusion and claim that they are not trying to collect money; rather they are attempting to recover property. But in order to recover the property you must get a notice of intent to foreclose in the form of a notice of default (NOD) and opportunity to cure the default (by paying money). This is stated in the mortgage.
Now we are saying that makes you a debt collector. Because the bank is saying you better pay a certain amount in U.S. dollars, or else they will become a collateral collections agent, and take the property as collateral. So, the argument you will be making to the court is even if the jurisdiction says that the debt collector, and the foreclosure agent falls under the exclusion, until such time as they prove that they are in that position, they fall under the FDCPA.
That’s why one of the things you get when you join FRAUD STOPPERS PMA is a Federal FDCPA complaint that challenges your opponent’s Standing, Capacity, and Agency under the federal law and demands $100,000 in financial compensation!
These informal discovery documents include:
- A Tort Letter to stop a foreclosure sale, if one is imminent.
- An Error Resolution & Information Request Letter (ERIR Letter): that demands physical inspection of the original, wet-ink-signature loan documents
- A Professionally prepared Qualified Written Request Letter (QWR Letter): to uncover and verify accounting errors & violations
- Two Federal Debt Validation Letters to help you get the material facts needed to exhibit to complaint and lay the necessary groundwork for a federal FDCPA lawsuit.
- And a TILA Rescission Letter that you can use to rescind or cancel your mortgage loan contract using the federal Truth in Lending Act (TILA) and recent groundbreaking United States Federal Supreme Court Case Decision Jesinoski v. Countrywide
Regarding the TILA Rescission Letter, the supreme court ruled unanimously in Jesinoski v. Countrywide that the moment your TILA Rescission Letter is mailed your mortgage loan contracted is rescinded (or canceled). They cease to exist as a matter of law. Furthermore, if the bank, creditor, or servicer wants to challenge the rescission they only have 20 days to do so and that must be done in federal court.
We have never seen the banks do this. What they almost always do is send a letter to you stating that you cannot rescind the loan because you are past the 3-year status of limitations (SOL). The banks standard response to a TILA rescission letter states: “TILA provides that if required notices or material disclosures are not delivered to the consumer, the right to rescind shall expire three (3) years after consummation of the loan…” and therefore you are past the SOL and cannot rescind this loan.
However, under paragraph (i) of TILA the SOL clock resets upon a notice of default (NOD) or foreclosure notice. Moreover, what if there was never an actual loan consummated within the appropriate legal definition of consummation? FRAUD STOPPERS TILA rescission letter claims that no real loan between the alleged borrower and loan originator ever existed in the first place, and no loan has been consummated within the appropriate legal definition of consummation, and therefore the bank’s SOL defense would be a meaningless argument.