Converting from nonjudicial to judicial foreclosure

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In several dozen cases, I have experimented with such motions. They were not successful. That may have been because the local counsel lawyers didn’t understand what they were doing.

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I think the path to success might be establishing the case as “complex litigation” and THEN asking for realignment of the parties requiring the lawyers who initiated the nonjudicial foreclosure to file a complaint that you can deny and put the issues in dispute.

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To get to that point, you need to file a TRO complaint that says you deny the existence of an unpaid loan account owned by the designated “beneficiary.”

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Thus the designated beneficiary does not qualify as a beneficiary under state statute. THEN plead that the burden is on the claimant to plead and prove a case and that a realignment of the parties is required. Plaintiff (homeowner) should become the defendant, and Defendant (foreclosure mill/beneficiary) should become Plaintiff based on a timely filed complaint.

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ONLY then is the homeowner legally able to deny the allegation that the foreclosure mill/beneficiary is attempting to enforce an unpaid loan account owned by the designated beneficiary. That is your argument for realignment.

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Nonjudicial was intended to speed up an inevitable result. But the result is not inevitable if the issues are in dispute. Nonjudicial should be converted to judicial if the issues are in dispute. At the stage of early motions, the allegations made by the plaintiff homeowner should be taken as true, thus supporting the motion for realignment of parties.

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I would add that opposition from the foreclosure mill would be good cause for you to demand their formal allegation that the unpaid loan account exists and is owned by the designated beneficiary.

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PRACTICE HINT: The issue is not whether the unpaid loan account exists or whether the designated plaintiff or beneficiary owns it. The issue is whether the foreclosure mill lawyer can prove it exists. He/she cannot prove it exists if (1) the issue is contested and (2) they are unable to corroborate the truth of the matter asserted in the documents (assignments, allonges, etc.).

Such documents are evidence of a transfer of the unpaid loan account, but they do not rise to the level of solid proof — if the issues are contested. If the issues remain uncontested, the only evidence before the court is the legal presumption arising from the document’s content that was admitted into evidence. 

You don’t need to believe that the unpaid loan account does not exist or that the designated plaintiff or “beneficiary” owns it. You only need to prevent the opposing lawyer from proving the truth of the matters being asserted and argued, to wit:

(a) that the unpaid loan account exists,

(b) that this is an action to enforce it, and

(c) that the designated Plaintiff or “beneficiary” owns it. 

What you will find in response to your challenge is that the lawyer from the foreclosure mill is willing to talk about anything rather than discuss the existence, status, and ownership of an unpaid loan account on the books of any creditor, much less the one they designated as plaintiff or beneficiary.

Instead, they will talk about ownership of the note or ownership of the mortgage lien by virtue of some document of transfer that appears to grant “new ownership” when in fact the document of transfer is creating the illusion of ownership where no such ownership exists because no such asset exists.