Park Place Securities, Inc.
Printed Article Version of Podcast No. 5
HOW TO RESPOND TO A FORECLOSURE COMPLAINT AND SUMMONS
From that point, you can expect a foreclosure case to be commenced at any time in states with judicial foreclosure. In Deed of Trust states the lender does not need to take you to court, they can simply advertise your home for sale and then sell it out from under you. Deed of Trust foreclosures will be covered by a separate podcast and article but you can learn more about them by purchasing our 2 books which also gives you access to several dozen newsletters and other resources.
Once you are served with the complaint and summons by the plaintiff and it is not served in person by a process server or a deputy sheriff of your county, you need to research your state law and determine if it was properly served. If not, you can file a motion to quash service.
Generally the complaint and summons must be served by a qualified person directly to the defendant. This is called service of process.
Otherwise, you have 20 days to file an answer and affirmative defenses. This usually is not realistic, but you can file motions to extend this time. Affirmative defenses can be very tricky and it is critical that they be done correctly, so I would suggest reading my two books and the newsletters so you have a foundation for understanding affirmative defenses.
Even if you have the money for an attorney, finding a qualified attorney within 20 days is going to be difficult. If you are pro se, that is, representing yourself, then 20 days is certainly not enough time to determine all of your affirmative defenses.
You can file a motion for an extension of time, but I would not use that as the first motion as that motion will only be granted once and will not buy much time. Typically you might be granted an additional 20 days, but seldom more than that.
If you have been served and significant time has already elapsed, but less than 20 days has gone by, a motion for an extension of time is the simplest thing to file to get more time. Remember though, that motions for any extension of time must be filed before the time is up.
If you allow the 20 days to pass without filing anything, then the plaintiff can get a default judgment against you. You will have squandered all of your legal rights. Getting the default judgment vacated is a whole different issue which we can not get into in this podcast. If you are in that situation, I would recommend you hire an attorney to vacate the default.
Do NOT just send a letter to the court. This is not a proper response, and if you do not also serve it on all the other parties, it is an illegal ex parte communication.
All filings must be in a proper form, such as a motion, and must be served on the plaintiff and any co-defendants. When we say “served” -- that means filed with the clerk and mailed to the other parties. Only the complaint and summons must be served in person by service of process. Everything after that can be filed and served by mail. If you have the capability of filing your motions and other documents at the office of the clerk of court, in person, I would recommend you do it that way.
Foreclosure complaints are generally pretty simple and easy to understand. In other types of cases, the complaint may be poorly written, so one can file a Motion for a More Definitive Statement. This is unlikely to be useful in a foreclosure case.
Thus, the best motion to buy more time is a Motion to Dismiss.
Now, even if you could recognize problems with the complaint or the documents attached to it, these might be good defenses to use later in summary judgment or at trial and you would not want to squander them. If you merely point out something wrong with the complaint, the only thing that will happen is that the court will grant the plaintiff time to amend the complaint. It will not be dismissed.
Actually, right after you file your motion, the plaintiff can amend the complaint to correct the problems before any hearing on your motion. The plaintiff can always amend a complaint once before a responsive pleading is filed. A responsive pleading is an answer. A motion is not a responsive pleading.
This buys you little time and just allows the plaintiff to fix any mistakes they have made.
You need to file a motion to dismiss that has substance and that does not squander your available defenses. In addition, the best kind of motion is one that lays the groundwork for later defenses in the case. The second thing you always want to do is to build the record of the case. The more decisions you force the judge to make, the more chances of error and arguments there will be for an appeal. Also, well crafted motions to dismiss give you an opportunity to educate the judge.
Needless to say, all of this is to buy time and keep you in your home as long as possible. We can provide you with two opening motions that will stall your case for months, provide defenses against summary judgment and at trial. Finally, they provide you with excellent grounds for appeal.
A motion to dismiss must be based on the complaint and the documents attached to it. You can not raise issues that require other evidence or arguments outside of the complaint. The only legal argument outside of a complaint that can be raised by a motion to dismiss is res judicata which would only apply if you had previously been sued for foreclosure and won the case.
Again, if res judicata might apply to your case, I would strongly suggest you obtain legal counsel.
Park Place offers two motions to dismiss that enable you to easily fill in the blanks. Generally, a motion needs to be supported by case law which tells the court why it can grant the motion. These motions can dispense with case law because they are totally original motions and no case law has ever been written on the issues. This also makes it more difficult for the plaintiff to fight, and gives you issues of first impression which are great for an appeal.
Equally important is that they are not legally frivolous and nobody has to worry about sanctions or being ordered to pay the other side's attorney fees.
The advantage of these motions is that you are not squandering any actual defenses you might have or giving the plaintiff an opportunity to simply fix their complaint by amendment. Nobody has ever heard of these defenses before because I have just created them during December of 2018.
These motions can be used in any judicial foreclosure involving REMIC or Delaware Statutory Trusts. If your mortgage and loan were executed before 2008, chances are they are in a REMIC trust. After that, chances are your loan is in a Delaware Statutory Trust. Although they are different types of trusts, they operate and foreclose in substantially the same way.
If you have defaulted previously, it is possible that your loan was sold out of a REMIC trust and into a DST.
To understand the rest of this podcast and the article, it would be best to have read my books, and you certainly must have listened to the 4 podcasts before this one.
Here are the basics. Every single trust is created by a contract. The trust contract creates a Special Purpose Vehicle or SPV to hold the contents, i.e. assets of the trust. The trust contract will name a trustee who operates the trust and the beneficiaries who benefit from the trust.
In the case of a REMIC or DST real estate trust, there is also a Servicer named. In the REMIC there is a Master Servicer but you will hear nothing about them as they hire the actual Servicer who is collecting mortgage payments and is foreclosing on you. That Servicer, such as Ocwen or Select Portfolio Servicing is a contracted entity. It is not a party to the trust.
In the case of LSF trusts of which U.S. Bank Trust, N.A. is the trustee is a different beast in that it does not have two different Servicers involved. The trust contract actually names Caliber Home Loans as the Servicer.
Regardless, the two motions to dismiss can be used in either situation.
The trust contracts give the trustee “raw title” to the mortgage promissory notes and that is why the Servicers foreclose in the name of the trustee. The trustee holds the note. However, the trustee does not have “equitable title” to the note, meaning that it can not sell the note. In a REMIC trust the only way to get the note out of the trust is for the Master Servicer to purchase it out of the trust.
The mortgage assignments used in court will never reflect these actual facts, but that is another separate issue.
In both a REMIC and DST, the trust contract is called the Pooling and Servicing Agreement or PSA. The last thing the plaintiff wants to do is to provide a copy of the PSA much less have it introduced into evidence.
The foreclosure scam is based on two general rulings determined by the courts over the years in all states, which are: 1) you are not a party to the PSA and can not use it , and 2) you are not a party to the mortgage assignments and can not challenge them. The courts say that neither thing really goes to the fact that you got the loan and failed to pay it back.
There is however another way to approach these things which nobody has realized and nobody else has ever made available on the internet.
The point is, without the PSA, the court itself has no idea what the authority, powers or fiduciary duties of the Trustee might consist of. In other words, without the PSA the court is operating by assumption and guesswork. The trustee never collects mortgage payments, never sends the default notice and never has anything to do with foreclosures. The court simply assumes that it does and that is what is pleaded in the complaint. The evidence in the case proves that none of these things are true and all the pleading is false and a sham. No foreclosure complaint pleading is ever proven to be true. The trustee, who is the named plaintiff, never does the things that are pled, they are always done by an agent.
Thus, the first motion to dismiss is based on the fact that there is no evidence whatsoever what the authority, powers or fiduciary duties of the trustee are and that the court abuses its discretion by using guesswork and unsupported assumptions.
The plaintiff will have to file a response brief. You then get to file a reply brief to counter whatever legal arguments they make. A reply brief has to be specifically written and is not included. Filing a reply brief is not mandatory.
If you file a reply or not, when the time allowed for you to do so has passed, a hearing will be scheduled before the court. At that time you get to make an oral argument in support of your motion. The court will likely not issue a decision from the bench, having never heard of this before, but will take it under advisement and issue an opinion and/or an order at a later date.
This will generally buy you 3 months or more and when the court issues its order, it will also order you to file an answer by a certain date.
Again, you do NOT have to file an answer, you can file another motion to dismiss. For an example, I was the plaintiff in a defamation case and the defendants filed 6 motions to dismiss and did not file their answer until 18 months after they were served with the summons and complaint.
The second motion to dismiss attacks the legal standing of the Servicer. This is a motion that no court has seen before. The Servicer is not a party to the case, it is a stranger before the court, it stands naked before the court. The one and only thing that gives it standing in the eyes of the court is a Power of Attorney from the trustee.
Courts have ruled that this PofA does not need to be included with the service of the complaint. The complaint and the documents attached are just giving you notice of what the case is based upon. In any civil case involving a contract, the contract must be attached. If that contract relies upon another contract, it too should be attached.
But the courts have decided that the PofA does not need to be included with the complaint. I think it should be but they do not want you to see this document in advance and have time to study it, because they are afraid that if you do so you will see that it does not actually accomplish what they claim it accomplishes.
However, it must be filed with a motion for summary judgment or introduced into evidence at trial. In the cases I have reviewed over the years, I can say that it is introduced only about half of the time. Even foreclosure defense attorneys seem to be mostly clueless.
The point of the second motion to dismiss is to get the Power of Attorney well before they can file a motion for summary judgment or take the case to trial. It also puts off having to file the answer and affirmative defenses. You should be using all of this time to work on those.
The general basis for the second motion to dismiss is that the trustee never collects mortgage payments, never sends the default notice and never forecloses. All of these things are done by the Servicer. The trustee never makes any demand for payment and has never made any demand for payment.
The evidence always establishes that the Servicer did all of these things.
But, again, as a non-party the Servicer is a stranger to the court and stands naked before the court without the Power of Attorney to prove it is an authorized agent of the trustee and has the right to collect mortgage payments.
In other words, without the PofA, you have no legal duty and no legal obligation to pay the Servicer a single cent. There simply is no evidence that you are legally required to pay the Servicer. That means the complaint has failed to state a claim, which is grounds for dismissal.
If you are in the clutches of Caliber or another Servicer for a Delaware Statutory trust, or if your Servicer has otherwise changed over the years, this gives you even more ammunition.
Chances are in the case of Caliber or another later Servicer that you did not pay them any money. If you did that does not matter. My point is, that you likely paid previous Servicers, so you can also argue that you had no legal duty or obligation to the previous Servicers without them also having Powers of Attorney from the trustee. You would also argue that without those Powers of Attorney, the employee for Caliber who signed things, provided the affidavit and the one that would testify at trial could not testify or introduce evidence from the previous Servicers as they lack standing. Without Powers of Attorney for each, they have no standing and none of their records are admissible.
The makes it impossible for Caliber or any other current Servicer to provide evidence of what you still owe, and thus their case would fail entirely. There is no case law on any of this and the briefing schedule, to say nothing of the time they would take to come up with all these powers of attorney would buy you any number of months and would throw a wrench into their entire case. It would also present fertile ground for an appeal.
Finally, another reason they do not want you to see the Power of Attorney early in the case is that every Power of Attorney from the trustee says it is based upon or contigent upon the Pooling and Servicing Agreement. That means you can force them to provide and introduce the PSA into evidence. This opens up additional defenses.
A competent foreclosure attorney could write the two motions after listening to this podcast or reading the text article. If you do not have an attorney and are appearing pro se, you can receive the two motions with instructions to complete them for a payment of only $150.00.
Ideally you have read both the books, before the plaintiff responds to the first motion. You should absolutely read the books and do the foreclosure audit (explained at the end of the main book) before filing the second motion.
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