STAND YOUR GROUND! ORIGINAL PROMISSORY NOTE
BEFORE WE GO ANY FURTHER, WE NEED YOU TO BE AWARE OF THE MOST COMMON TACTICS OF THE LENDERS AND THEIR ATTORNEYS. THE ATTORNEYS WORK FOR THE LENDERS AND AT THIS BEGINNING STAGE OF THE PROCESS THEIR SOLE OBJECTIVE IS TO GET YOU OUT OF YOUR HOME AS QUICKLY AS POSSIBLE.
THE QUESTION THAT NEEDS TO BE INVESTIGATED IS THIS:
WHO ACTUALLY GETS YOUR HOME AFTER IT GOES TO SALE BY THE PUBLIC TRUSTEE? THE BANK? A LEGITIMATE INVESTOR? OR THE ATTORNEY AND HIS INVESTORS??
THIS IS WHERE THE HARASSMENT BEGINS. THEY WILL START SENDING THREATENING LETTERS URGING YOU TO LEAVE. WE HAVE HAD NUMEROUS INSTANCES WHERE OFF DUTY SHERIFF OFFICERS HAVE BEEN SENT TO UNSUSPECTING HOMEOWNERS INSTRUCTING THEM TO VACATE.
ALL OF THESE TACTICS ARE ILLEGAL, UNETHICAL, A VIOLATION OF YOUR CIVIL RIGHTS, AND WE NEED TO KNOW OF ANYONE WHO IS BEING HARASSED IN THIS MANNER!!
1. Let's digress for a minute. Your loan agreement consists of two documents. The promissory note is the document you sign at closing that, among other things, outlines the terms of your loan, amount and monthly payment schedule, so forth and so on. The deed of trust, in simple terms, provides the assurance that you will pay the lender as agreed because it pledges your home as security, similar to borrowing money to buy a car and letting your credit union hold the title until you pay the car off. Also, the deed of trust MUST have provisions in the terms specifically giving the Public Trustee the power to sale your home if you cannot make your payments. All three conditions must be in place to initiate a lawful foreclosure thru the Public Trustee. Also important to know is ALL OWNERS OF THE HOME MUST SIGN THE DEED OF TRUST in order for the deed of trust to be valid and enforceable.
2. The Public Trustee's Office, because it is a “public” entity representing both homeowners and banks equally, is suppose to verify the information on these documents to make sure the lenders on the documents match up with the lender attempting to foreclose? Problem is.......most of the people you will deal with at the Public Trustee’s office don’t know, don't care and will almost accept anything from an attorney as being correct and lawful. It is very important to understand this step because if the wrong lender is initiating the foreclosure process, then your foreclosure is ILLEGAL from the start. This folks, is what the attorneys that represent the lenders that are foreclosing on your homes would rather you not know, SO SIT UP AND PAY ATTENTION!!!
3. It is customary with the mortgage lending industry for loans to be sold back and forth to different lenders after you close on your home purchase or refinance your home. This is normal and of no concern because the terms of your loan remain unchanged. If the interest rate on your loan is 8% and it is a 30 year loan, those terms cannot be changed if your loan is sold. So the fact that your loan gets sold, however many times, is no big deal.
4. However, when your loan is sold to another lender, Colorado law requires the lender that purchases the loan to comply with a law that gives public notice of the transfer. (That way we know when lender A stopped being your lender and when Lender B started) This is a requirement is if the purchasing lender wants its interest to be protected in the event of a dispute regarding the ownership of the loan. See C.R.S. §38-35-106 and C.R.S. §38-35-109 Essentially, these are Colorado’s recording statutes. Simply put, these statutes say that any instrument or document that affects title and interest in real estate must be recorded in order to be entitled to the protection under the statute and further, compliance with these statutes give public notice to everyone that the instrument exists. Every county has a Clerk and Recorder’s Office and after paying the nominal cost per page, you’re protected under the recording statute and it can be argued that everyone now has knowledge of that particular instrument. Also. generally speaking, in the event there is a dispute regarding the same property, the document that is recorded first will be given the greater protection. You would think that this one’s pretty academic.
This is where things get murky.
5. By now, everyone is hip to the securitization of mortgage loans. THE BIG SCAM! In simple terms, lenders took cash-producing financial assets (mortgage loans that they originated) and pooled them together; in other words, blended them all together like a bunch of bad steaks sent through a meat grinder. Next, a trust was created to which the pooled mortgage loans/assets are transferred. Securities were then issued which were backed by the pooled mortgage loans (ground beef at this point). Now, the trust owns the mortgage pool/assets and will then sell portions (securities) of it to purchasers and investors, who are then entitled to an income stream from the securities it purchased. The income stream is a result of homeowners making their monthly payment of principal and interest. The securities enable the trust to sell the ground beef as if its the good stuff!
6. Problem is.........everyone was defaulting on their mortgage loans which meant the investors weren't getting what they were promised. The bigger problem is.........because the mortgage loans were converted into securities, they had to stay that way!! That's right......you can't send the ground beef back through the meat grinder and get steaks again. This meant that in order to foreclose on a home, new mortgage documents had to be falsified and fabricated. Promissory notes, assignments of deeds of trusts and mortgages had to be forged because without the proper loan documents, the lender cannot foreclose on your home.
7. Recognizing this, the United States Court of Appeals for the 10th Circuit (right here in Denver) reiterated the requirement of the bank to have possession of the original promissory note in order to foreclose. In re Mark Stanley Miller, Case No. 11-1232 (10th Cir. Court of Appeals, February 1, 2012) In the meantime, in between time, Larry Castle of the Castle Law Group, LLC (which used to be Castle, Meinhold & Stawiarski, LLC; then used to be Castle Stawiarski, LLC) and Robert Hopp of The Hopp Lawfirm, two of the most prolific foreclosure mills, got together with a couple of their legislator buds and got HB-1387 passed which, as we talked about earlier, allows foreclosing attorneys to simply “vouch” for the veracity of their clients' ownership of the loans they seek to foreclosure. Why? Because it is not possible to get the original documents back from when they were securitized.
8. So, the very first thing you must check is if the lender that is foreclosing on your home is the lender you entered into an agreement with on your promissory note and deed of trust.
COLORADO RULES OF CIVIL PROCEDURE (C.R.C.P.) RULE 120 HEARING
9. The Rule 120 hearing is your first opportunity to defend your home. The Rule 120 proceeding is filed in the District Court of the county where the home being foreclosed is located. If, by chance, the Rule 120 is filed in a different county from where the home is located, you have an absolute right to have the case moved to the correct county.
10. The purpose of the Rule 120 proceeding is for the bank to obtain an order authorizing the public trustee to sell your home at a public auction. You have a constitutional right to appear and be heard at this hearing so demand it.
11. This is where you point out any of the things the lender is doing or has done to violate your rights in the taking of your home, up to and including their failure to comply with the notice requirements, if applicable, to let you know the date and time of the Rule 120 which requires strict compliance; so says the Colorado Supreme Court.
“Provision of rule relating to notice of hearing on foreclosure of mortgage under power of sale through public trustee must be strictly complied with.......Court order authorizing sale by public trustee was null and void where notice requirements had not been complied with. Dews v. District Court, 648 P.2d 662 (1982)
12. Rule 120 Hearing. The Colorado Rules of Civil Procedure (C.R.C.P.) designates Rule 120 as the section of law entitled “Orders Authorizing Sales Under Powers.” This section of law was adopted by the Colorado Supreme Court in 1941 and should be regarded as the most important part of the process. This is very, very important folks and this is where the gloves come off!!! The lenders, through their attorneys must file a motion with the court for an "Order Authorizing Sale" which if granted, will direct the Public Trustee to sell your home. The Public Trustee CANNOT sale your home prior to this order. When the motion is filed with the court, a hearing is scheduled. You must be notified of the time, place and date of this hearing at least 15 days before the scheduled date. This is the law! The Rule also requires that the date of the hearing be set no sooner than 20 days and no more than 30 days after the notice is filed with the court. So also says the law! If your “Notice of Hearing” was filed on September 15, then your hearing date can only be set from October 5th thru October 15th. Even though the law requires strict compliance with this section, they screw this one up frequently! Proof of noncompliance with this section of law alone will void a foreclosure sale!! see Dews v. District Court.
“Rule 120 governs the very specialized civil proceeding in which an interested person may file a verified motion in court seeking the order authorizing sale under the power of sale contained in the recorded instrument.” Plymouth Capital Co., Inc. v. Dist. Ct. of Elbert County, 955 P.2d 1014, 1017 (Colo. 1998)(en banc)
13. Rule 17 of Colorado Rules of Civil Procedure allows only for the “real party in interest” to bring a legal action in court. In other words, if your friend is harmed in some way and has grounds to sue, he must bring the lawsuit himself. You cannot bring the suit on his behalf, neither can you bring the lawsuit because he owes you money and intends to pay you when he wins the suit. Your friend must bring this action himself or through his attorney. This is also true when a lender files a motion in court for an Order Authorizing Sale on your home. As explained earlier, it must be the correct lender or the foreclosure action is illegal from the start. If the lender attempting to foreclose is not the lender on the deed of trust or has not been legally assigned the rights of the original lender on the deed of trust, then this lender cannot legally foreclose based on the authority in the deed of trust because the foreclosing lender is not yet the "real party in interest." Let me make this one very clear!! If the lender that is attempting to foreclose is not the lender on your deed of trust and does not have a recorded assignment on file at the Clerk and Recorder’s office, assigning the rights of the original lender to the foreclosing lender, the foreclosing lender has no legal authority to foreclose using the Public Trustee!!! Attorneys, and even some judges will act as if they don’t understand this, but they do, they just think that you don’t. Remember, the system of justice leaves a lot to be desired.
14. As explained earlier, the very first thing you must check is if the lender that is foreclosing on your home is the lender you entered into an agreement with on your promissory note and deed of trust. If not, then you must search the public record of the clerk and recorder’s office to see if there is a recorded assignment transferring the deed of trust or mortgage to the lender that is foreclosing. Secondly, If there is no recorded assignment that was recorded, then the foreclosing lender must have in its possession the original promissory note as the United States Court of Appeals made clear in In re Mark Stanley Miller, Case No. 11-1232 (10th Cir. Court of Appeals, February 1, 2012)
15. The Mark Stanley Miller case was a case where the Millers had initially taken out the loan with IndyMac Bank. Deutsche Bank National Trust, out of nowhere, initiates foreclosure proceedings agains the Millers. In their Rule 120 hearing, the Millers argued that Deutsche Bank had no standing because of what we have explained here. The Arapahoe County District Court, ignoring the law, refused to acknowledge the fact that Deutsche Bank had no valid assignment and had no original promissory note and granted the “Order Authorizing Sale” anyway.
16. The Millers filed bankruptcy and made the same arguments in the bankruptcy proceeding. You would think a Federal Bankruptcy judge would rule in accordance with clear-cut law. Not Judge Michael E. Romero. He too granted Deutsche Bank's request to continue with the foreclosure. The Millers then appealed to the Bankruptcy Appellate Panel (BAP), the next level up from the bankruptcy court, to no avail. It wasn't until they appealed to the United States Court of Appeals that they FINALLY had the case placed in front of a panel of judges that actually had respect for the rule of law.
17. THIS....IS WHAT WE'RE DEALING WITH RIGHT NOW IN THE STATE OF COLORADO!!!