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Mortgage Servicing and Loan Modifications: 11.3.2.2 Authenticating Promissory Notes

Where negotiable notes are concerned, U.C.C. Article 3 will mostly be controlling on authentication issues. While most first mortgage notes on the Fannie/Freddie Uniform Instrument form are negotiable, other forms of notes such as those evidencing home equity lines of credit (HELOCs) and reverse mortgages, and notes on specialized note forms, are not negotiable and therefore different rules of evidentiary proof may apply.103

Home Foreclosures: 3.3.2 Requirement to Have Authority to Enforce the Note

Appellate courts in judicial foreclosure jurisdictions that have addressed the issue have consistently held that the plaintiff seeking to foreclose must be the party with authority to enforce the promissory note.48 There is little reason to expect that appellate courts in other judicial foreclosure states that have not yet addressed this question will decide any differently. There may be questions as to whether the foreclosing party must be the “owner” of the note as opposed to a party with the right to enforce the note under U.C.C.

Home Foreclosures: 3.6.3.1 Lenders’ Attempts to Prove Transfers of Notes and Mortgages Through Securitization Documents

In its Ibanez decision, the Massachusetts Supreme Judicial Court rejected two foreclosing trusts’ claims that they had proven the existence of mortgage assignments to them through the terms of various documents related to the formation of the trusts.336 The court noted that the trusts failed to include in the record any documents that clearly identified the mortgages in question as having been assigned to them.

Mortgage Servicing and Loan Modifications: 11.3.2.3 Authenticating Security Instruments and Assignments

Mortgages, deeds of trust, and assignments of them are typically self-authenticating.122 However, mortgages, deeds of trust, and assignments, if offered as self-authenticating under Federal Rule of Evidence 902(8) must be “accompanied by a certificate of acknowledgment executed in the manner provided by law by a notary public or other officer authorized by law to take acknowledgments.”123 Generally, howev

Mortgage Servicing and Loan Modifications: 11.3.3 Authentication of Electronically Stored Information

Servicers’ lawyers, and often trial judges, tend to ignore the authentication requirements for electronically stored and electronically created loan records such as loan history documents and payoff calculations, and instead focus solely upon the business records exception to the hearsay rule in Fed. R. Evid. 803(6). It is a great mistake for homeowners’ lawyers to allow the authentication rules to be ignored as these rules provide some of the most viable opportunities for successful defenses of foreclosure cases.

Home Foreclosures: 5.5.2.5 The Lender’s Evidence of Compliance with Notice Requirements

Foreclosure notices, when offered as proof of compliance with requirements of the mortgage or related statutes and not to prove the truth of the statements in the notices, are not hearsay235 and do not require proof under Fed. R. Evid. 803(6) in order to be admissible.236 While a party offering such operative documents may not need to comply with the proof requirements of Fed. R. Evid.

Mortgage Servicing and Loan Modifications: 11.3.4 The Requirements for Personal Knowledge—Affidavits and Trial

A “personal knowledge” requirement applies to in-court testimony as well as to affidavits submitted in support of a written motion for judicial relief.147 “Affidavits asserting personal knowledge must include enough factual support to show that the declarant possesses that knowledge.”148 Virtually no servicer witness will have personal knowledge of the details of any loan, because that witness was not present at the loan closing and will have had no day-to-day involveme

Home Foreclosures: 8.3.2.1 Introduction

The evidentiary rules relating to the authentication of documents arise out of the requirement that evidence offered must be relevant to the matter in issue.97 A document offered to prove a fact can be relevant only if the document is actually what it purports to be.98 Some forms of documents are deemed to be sufficiently trustworthy on their face so as to be self-authenticating,99 while the authentication of other forms of documents requires additional

Home Foreclosures: 8.3.4 The Requirements for Personal Knowledge—Affidavits and Trial

A “personal knowledge” requirement applies to in-court testimony as well as to affidavits submitted in support of a written motion for judicial relief.149 “Affidavits asserting personal knowledge must include enough factual support to show that the declarant possesses that knowledge.”150 Virtually no servicer witness will have personal knowledge of the details of any loan, because that witness was not present at the loan closing and will have had no day-to-day involvement with the servicing of t

Home Foreclosures: 7.2.6 Property Flipping and Inflated Appraisals

Inflating appraisals and property flipping are two deceptive activities that often go hand-in-hand but can also occur independently.59 Inflated appraisals can be used by mortgage brokers and loan officers to earn extra fees and commissions or to otherwise increase lending volume. Where a property has a higher loan-to-value ratio than permitted by the lender’s underwriting guidelines, inflating the appraised value of the house may get the transaction approved.

Truth in Lending: 11.7.10.1 Overview

This subsection focuses on liability for statutory damages of an originator (e.g., loan broker), servicer, assignee, or settlement agent where that entity violates the TILA requirement. This subsection also reviews an assignee’s TILA liability for the actions of its agent, the servicer.

Truth in Lending: 11.7.10.5.1 General

When a servicer fails to meet its responsibilities under TILA, consumers may pursue the holder of the debt for the servicer’s misconduct. Holding the creditor or assignee liable likely results in an offset against any debt owed by the homeowner and may save the home from foreclosure. It can also simplify litigation by reducing the number of parties.

Mortgage Servicing and Loan Modifications: 11.4.2.1 Overview

The most critical player in foreclosure defense cases is the mortgage loan owner. The owner is the party that has the right to enforce the note and foreclose on the mortgage or deed of trust.264 In some cases, the owner may be the entity that originated the loan.

Mortgage Servicing and Loan Modifications: 11.4.2.3.3 The Merrill doctrine as a limitation on liability of government agency loan owners

Special issues arise when a servicer acts on behalf of a loan owner that is a federal governmental entity. Most often, this occurs when one of the government-sponsored enterprises (GSEs), such as Fannie Mae or Freddie Mac, owns the borrower’s mortgage loan. In these situations, a court-created rule known as the Merrill doctrine may limit application of otherwise controlling agency principles.

Home Foreclosures: 5.1 Introduction

Few events are more devastating to a family than the loss of a home to foreclosure. Children may be forced to change schools and leave friends. A family may be distanced from workplaces and social support. The homeowner’s equity is often lost as a result of a foreclosure sale, and it is not unusual for the foreclosed homeowner to find that they are personally liable for a large deficiency. Wages may be threatened to pay the deficiency judgment, further contributing to the family’s financial distress.