Guidance for discovery in foreclosure defense

I frequently need to guide homeowners and their attorneys away from generic labels. When the word “creditor” is used, it could mean a servicer without ever corroborating the principal. The company named as servicer may in fact be construed as performing a service and that service might even be tied to the presentation of the named or designated claimant, but it is only human nature that makes the subject of the claim labeled as a  unpaid loan account, much less owned by the “servicer” or “claimant.”

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Always take note that no allegation or assertion ever appears stating that the law firm, the servicer or the claimant (plaintiff or beneficiary) is a holder in due course, For a party to even start claiming application of article 3 of the UCC, the purported transfer of “must have occurred before the note was known to be claimed in default by someone possessing the authority to make such a declaration. To claim rights as a holder in due course. Even if the purported transfer of rights under the promissory note occurred before the claimed default occurred, one would also need to assert and prove payment of value in good faith without knowledge of the maker’s defenses. None of these attributes exist because the transaction was disguised as a loan but failed to include the attributes of a loan.

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What we ordinarily mean by “creditor” is a party possessing the following attributes:

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1. Not the servicer
2. Not the law firm
3. A party who owns the underlying debt, note or obligation by virtue of having paid for it. —Where such payment was received by the owner of the obligation.
4. The referenced obligation is a legal debt reflecting the outcome of a transaction in the real world that both parties intended to be owed to the payee.
5. A party who has been receiving payments derived from the tender of payment by the homeowner.
6. A party who suffered economic loss strictly resulting from the non-receipt of payments due from the maker (homeowner).
7. A party who has been named in similar actions as a creditor and who typically collects money proceeds from settlement or sale.