Foreclosure Affirmative Defenses

These are some, but by no means all of the affirmative defenses which may or may not be applicable in your case. (The following was taken from suethebanker.com)

1. Standing. The Plaintiff/Note Owner is not registered to do business in your state and therefore unable to maintain this action and the court does not have jurisdiction.

2. Failure To Name Indispensable Parties. The complaint fails to join all indispensable parties, specifically the loan originator and the loan servicer(s). Willey v. W. J. Hoggson Corporation, 90 Fla. 343, 106 So. 408 (1925), contends that since the note and mortgage involved were payable to a business trust, any action on those instruments must be brought by all the members of the trust-not just the trustees.

3. Failure to Show Ownership of Note & Mortgage. The complaint fails to adequately show the chain of title of the Note and Mortgage (called a “Deed of Trust” in non-lien theory states) demonstrating that Plaintiff /Note Owner is in fact the real party in interest (i.e. owner of the Note) with standing to bring this action.

4. Unclean Hands. Plaintiff/Note Owner, or its predecessor(s) in interest, had unclean hands in their course of dealing with Defendant/Property Owner.  Further, Plaintiff/Note Owner may have dealt in bad faith in wrongfully refusing loan reinstatement or modification.

5. Violation of TILA. Plaintiff/Note Owner, or its predecessor(s) in interest, violated various provisions of the Truth in Lending Act (“TILA”), which is codified at 15 U.S.C. section 1601 et seq. and Regulation Z section 226 et seq. by inter alia:

a) failing to deliver to the Defendant/Borrower two (2) copies of notice of the right to rescind (with all of the pertinent statutory disclosures);

b) failing to properly and accurately disclose the “amount financed”;

c) failing to clearly and accurately disclose the “finance charge”;

d) failing to clearly and accurately disclose the “total of payments”;

e) failing to clearly and accurately disclose the “annual percentage rate”;

f) failing to clearly and accurately disclose the number, amounts and timing of payments scheduled to repay the obligation;

g) failing to clearly and accurately itemize the amount financed. In the case of a secondary lien, the transaction was subject to TILA and rescission rights since it was a consumer credit transaction involving a lien or security interest placed on the Defendant/Borrower’s principal dwelling, and was not a residential mortgage as defined in 15 U.S.C. 1602(w), because the mortgage was not created to finance the acquisition of the dwelling. As a result, Defendant/Borrower is entitled to rescind the transaction and may elect to do so.

6. Violation of RESPA. Plaintiff/Note Owner, or its predecessor(s) in interest, violated various provision of the Real Estate Settlement Procedure Act (“RESPA”), which is codified at 12 U.S.C. section 2601, et seq. by, interalia:

a) Failing to provide the Housing and Urban Development (HUD) special information booklet, a Mortgage Servicing Disclosure Statement and Good Faith Estimate of settlement/closing costs to Defendants/Borrowers at the time of the loan application or with three (3) days thereafter;

b) Failing to provide Defendants/Borrowers with an annual Escrow Disclosure Statement for each of year of the mortgage since its inception;

c) Giving or accepting fees, kickbacks and/or other things of value in exchange for referrals of settlement service business, and splitting fees and receiving unearned fees for services not actually performed;

      d) Charging a fee at the time of the loan closing for the preparation of truth-in-lending, uniform settlement and escrow account statements.

7. Violations of HOEPA. Plaintiff/Note Owner, or its predecessor(s) in interest violated various provisions of the Home Ownership Equity Protection Act (“HOEPA”) pursuant to 15 USC § 1639 et seq. by failing to make proper disclosures to Defendants/Borrowers and committed intentional predatory lending by including prohibited terms. These violations provide an extended three (3) year right to rescission and enhanced monetary damages for the Defendants/Borrowers.
   
   
8. Extortionate Extension of Credit. Plaintiff, or its predecessor(s) in interest, are guilty of an extortionate extension of credit, which is defined as “any extension of credit whereby it is the understanding of the creditor and the debtor at the time an extension of credit is made that delay in making repayment or failure to make repayment could result in the use of violence or other criminal means to cause harm to the person, reputation, or property of any person.”  In this case, Plaintiff/Note Owner, or its predecessor(s) in interest, are guilty of such an extension of credit because at the time of the loan, it was understood that Defendants’/Borrowers’ failure to repay the loan could result in the use of criminal means by the Plaintiff/Note Owner to cause harm to Defendants’/Borrowers’ or others’ persons, reputation or property, including trespass on Defendant/Borrower’s property, perjury, mail and wire fraud, and Racketeer Influenced and Corrupt Organization (RICO) violations, as long as Plaintiff/Note Owner, or its predecessor(s) in interest, thought they would not be caught.
   
   
9. Fraud. The alleged Note and Mortgage and other loan documents, were induced by the fraud of the Plaintiff/Note Owner, or its predecessors in interest and its co-conspirators, and are therefore void and unenforceable. Specifically, the originator of the loan and its co-conspirators made the following representations:

a) Before the loan was made, the originator and/or its co-conspirators (hereinafter referred to collectively as “Plaintiff/Note Owner, or its predecessor(s) in interest”) represented to Defendants/Borrowers that they had superior knowledge, information, skill and ability to Defendants/Borrowers in making mortgage loans, and that they would be looking out for the best interests of Defendants/Borrowers in the financing process and, in effect, protecting and promoting Defendants’/Borrowers’ benefit;

b) Before the loan was made, the Plaintiff/Note Owner, or its predecessor(s) in interest, represented to Defendants/Borrowers that:

               (1) Defendants/Borrowers would receive the best mortgage available
               (2) that it would be a “good” loan, and
               (3) it would be of substantial benefit to Defendants/Borrowers.

c) The representations described in a) and b) above were made for the purpose of inducing Defendants/Borrowers to enter into the loan transaction.

d) The representations were false and known by Plaintiff/Note Owner, or its predecessor(s) in interest, to be false at the time the representations were made and at the time the loan was made, in that:

(1) The Plaintiff/Note Owner, or its predecessor(s) in interest, did not have superior knowledge, information, skill and ability to Defendants/Borrowers in making mortgage loans as represented or did not use the same for the benefit and best interest of Defendants/Borrowers;
(2) The Plaintiff/Note Owner, or its predecessor(s) in interest, did not look out for Defendants’/Borrowers’ best interest or protect and promote Defendants’/Borrowers’ benefit;
(3) Defendants/Borrowers did not receive the best loan available;
(4) The loan was not a “good” loan;
(5) The loan was not in Defendants’/Borrowers’ best interest, but rather was in the best interest and to the benefit of the Plaintiff/Note Owner, or its predecessor(s) in interest;
(6) Defendants/Borrowers reasonably relied on the representations by the Plaintiff/Note Owner, or its predecessor( s) in interest, to their detriment.
(7) The Plaintiff/Note Owner, or its predecessor(s) in interest, failed to disclose all costs, fees and expenses; charged excessive fees, gave kickbacks and made payments of fees to parties not entitled to receive them, and failed to provide Defendants/Borrowers with all disclosures required by law.
(8) To confuse, bamboozle and defraud Defendants/Borrowers, the Plaintiff/Note Owner, or its predecessor(s) in interest intentionally scheduled the closing with insufficient time at the closing for Defendants to have the time to actually read the documents requiring Defendants’ signature.

(9) Plaintiff/Note Owner, or its predecessor(s) in interest, with the intent to defraud, intentionally failed to provide the loan closing documents in advance of the closing.

(10) The only parties who benefited from the loan were the Plaintiff/Note Owner, or its predecessor(s) in interest, and their service providers.

10. Payment. Defendants/Borrowers have made all payments required by law under the circumstances; however Plaintiff/Note Owner, and/or its predecessor(s) in interest, improperly applied such payments resulting in the fiction that Defendants/Borrowers were in default.  Defendants/Borrowers are entitled to a full accounting through the master transaction histories and general ledgers for the account since a dump or summary of said information cannot be relied upon to determine the rightful amounts owed.

Further, the principal balance claimed as owed is not owed and is the wrong amount, the loan has not been properly credited or amortized. Additionally, Plaintiff/Note Owner, and/or its predecessor(s) in interest, placed Forced Insurance on the property and is attempting to collect on property taxes, insurance and fees not owed.

11. Violation of Unfair and Deceptive Trade Practices Act. The Plaintiff/Note Owner, and/or its predecessor(s) in interest, also violated the Unfair and Deceptive Trade Practices Act, F.S. 501.201, et seq. By:

a) Failing to promptly and/or properly pay taxes or insurance premiums when due, so that the maximum tax discount available to Defendants/Borrowers could be obtained on Defendants’/Borrowers’ property and so that insurance coverage on the property would not lapse.

b) Failing to provide Defendants/Borrowers with an annual statement of the escrow account kept for payment of taxes and insurance.

c) Failing to properly disclose at or prior to closing all costs, fees and expenses associated with the loan;

d) Charging excessive fees and making payments of fees to parties not entitled to receive them;

e) Obtaining a yield spread premium (YSP) based upon the “selling” of a higher interest rate, and/or non disclosure of the range of interest rates for which Defendants/Borrowers qualified.

12. Unconscionability. In light of all of the foregoing defenses, and on the face of the purported loan documents, the terms and circumstances of the Note and Mortgage were unconscionable when made and were unconscionably exercised, it is unconscionable to enforce the Mortgage by foreclosure.

13. Rescission. The mortgage and note which are the subject of this action have been rescinded and therefore the mortgage(s) and note(s) are void.

14. Lack of Jurisdiction. This court lacks jurisdiction over the subject matter. It appears on the face of the complaint that a person other than the Plaintiff/Note Owner was the true owner of the claim sued upon at the time this action was filed and that the Plaintiff/Note Owner is not the real party in interest and is not shown to be authorized to bring this foreclosure action.

15. Failure to Provide FDCPA Notice. Plaintiff brought this action without providing notice to Defendants/Borrowers of Defendants’/Borrowers’ right to dispute the debt, pursuant to the Fair Debt Collection Practices Act. Plaintiff/Note Owner is required to notify Defendant/Borrower, pursuant to 15 U.S.C §§ 1601, et seq., that Defendant/Borrower may dispute the debt and Plaintiff/Note Owner is required to provide verification of the debt.

16. Duress.
    a) Plaintiff/Note Owner alleges ownership of the note and mortgage in question.
    b) Plaintiff/Note Owner is liable for actions of the named mortgage company and/or its agents.
    c) The named mortgage company, and/or its agent, used unjustified pressure to make Defendants/Borrowers sign the mortgage and note, including telling Defendants/Borrowers that they would be liable for the closing costs if they did not go through with closing.
    d) Defendants/Borrowers were harmed by the named mortgage company.

17. Failure to State a Claim for Which Relief May Be Granted.
    
    a) Plaintiff filed a claim to re-establish a lost note.
    b) Plaintiff claims the right to re-establish such note under Fla. Stat. §673.3091.
    c) Fla. Stat. §673.3091 provides only for re-establishment of negotiable instruments as defined under Fla. Stat. §673.1041.
    d) The note at issue is not a negotiable instrument as defined under §673.1041 because it does not contain an unconditional promise to pay and/or other requirements to qualify as a negotiable instrument.
    e) Therefore Fla. Stat. §673.1041 does not apply to transfer or enforce the promissory note at issue in this foreclosure action.
    f) Therefore, Plaintiff has failed to state a claim for which relief may be granted.

18. Failure to Timely Serve Complaint.
    a) Complaint was filed on February 13, 2008.
    b) However, Defendant was served on July 3, 2008.
    c) Pursuant to Fl. R. Civ. Pro. 1.070(j), Defendant is required to be served within 120 days after filing of the initial pleading.
    d) Plaintiff served Defendant approximately 170 days after filing the initial pleading.
    
    
19. Fraud in The Inducement.
    i. Plaintiff alleges ownership of the note and mortgage in question.
    ii. Plaintiff is liable for actions of ABC Mortgage and/or its agents.
    iii. ABC Mortgage and/or its agents made false statements and/or omissions regarding a material fact;

iv. ABC Mortgage and/or its agents knew or should have known the representation was false;
v. ABC Mortgage and/or its agents intended that the representation induce plaintiff to act on it; and
vi. Mr. Doe suffered damages in justifiable reliance on the representation.