Reality Check: Holder in Due Course Doctrine is not some fancy trick to get out of paying

Too many people are looking for an easy way out and reporting that Judge’s don’t like their arguments because they are going into court saying they don’t owe the money and there is no obligation. This argument starts you off on the wrong foot and heads for disaster.

The better approach is to start off with acknowlegding that a mortgage or deed of trust was executed, a note was executed, funding took place, and that an obligation was created. Your approach should be that you are not seeking to eliminate the obligation by some slight of hand trick but rather that the obligations exists, it might be enforeceable if it was not paid by federal bailout or insurance, but that the people and entities that initiated the foreclosure process are imposters.

So your argument is not that your avoiding ALL possibility of liability, but that you are fighting for your right to avoid multiple liability on the same debt — because when the REAL holder in due course walks into court holding the note and an assignment and says you owe the money, the house or both, you will have already lost the money and house to the imposters who said they were foreclosing as the “lender” or on behalf of the “lender.” when they had no documentation or actual authority to do so.

Good Question from Ron Ryan in Tucson:

WHY ARE THEY NOT THE PARTY ENTITLED TO PAYMENT IF THE RECORD SHOWS THAT THEY ARE? Answer: There is no trick here. Either they ARE the holder in due course or they are not. If they gave the loan and funded it from their own accounts using their own loan department at their own bank and they still have the note and they never assigned it, sold it or transferred it, then they have a good loan and it is enforceable by them. There might still be claims for TILA violations and the potential for rescission, but these claims are probably minimal in comparison to the vast majority of loans. There ARE some loans given by local community banks that are substantially in compliance with the law and did not raise the spectre of appraisal fraud etc. But most of the small banks got knocked out of the market because they understood the appraisals were inflated and they couldn’t approve a loan that was (a) already scheduled to fail and (b) where the loan to value ration was vastly skewed. So just like the honest appraisers who didn’t get any more business (8,000 of them petitioned congress in 2005 to do something about it to no avail), the honest banks couldn’t compete because they knew they were competing for lousy business that would bring their bank down with losses. The point of our strategy is that more than 1,000 banks were created or lured into this mess with the prospect of making $30,000 or more on a $300k loan that was bound to fail. In doing so they dropped their underwriting standards to zero without informing the borrower that the borrower could no longer rely on the bank as the expert who was evaluating the value of the property, the borrower’s ability to repay, and the viability of the loan. They didn’t care because it wasn’t their money at risk. If the borrower knew that the “lender” didn’t care whether they could repay the loan or not, the borrower would have been on notice that something unusual was going on — and by the way, something that violated the Truth in Lending Act and a whole host of other statutes, rules, regulations and common law duties..

Tags: bankruptcy, borrower, Chapter 13, disclosure, foreclosure defense, foreclosure offense, Lender Liability, lost note, securitization
Posted in Corruption, Eviction, Modification, securities fraud, Servicer |