Borrower Mortgage Fraud Allegations Dismissed

Allison Tussey —  December 1, 2009 — 4 Comments

Antonio English brought a civil action against Flagstar Bank, MERS, and Schneiderman & Schneiderman, P.C. claiming violations of state and federal law arising out of a home foreclosure, despite the fact that he had failed to make his house payments. In his complaint, English made various claims of error regarding the foreclosure proceedings. After answering the lawsuit, the defendants files a motion to dismiss or for summary judgment. English then sought to amend his complaint to include causes of action for (I) Declaratory Judgment; Injunctive Relief, (II) Civil Conspiracy to Commit Mortgage Fraud, (III) Wrongful Foreclosure/Mortgage Fraud, (IV) Intentional Infliction of Emotional Distress, and (V) Punitive Damages. The US District Court, Eastern District of Michigan, Southern Division, granted defendants’ motion and the case was dismissed

By way of background, on July 5, 2005, English obtained a home loan in the amount of $120,051.00 from Flagstar in order to purchase property in River Rouge, Michigan. The note indicates a monthly payment obligation in the amount of $719.77 at a 6% interest rate. In exchange for the loan, English granted a mortgage on the property in favor of MERS as nominee for Flagstar. English ultimately defaulted on the loan and a sheriff’s sale was held on September 18, 2008. Teri Sims Hilson (Hilson) conducted the sheriff’s sale and signed the sheriff’s deed acting as a Special Deputy Sheriff. The redemption period expired on March 18, 2009. English did not redeem. On March 25, 2009, MERS filed an eviction proceeding. Eviction proceedings were scheduled for July 9, 2009.

On April 3, 2009, English filed in pro per an action in Wayne County Circuit Court, Michigan. Defendants timely removed the case to federal court on the grounds that English presented a federal claim under the Fair Debt Collection Practices Act. On June 30, 2009, the Court entered a temporary restraining order preventing eviction proceedings and setting a status conference for July 14, 2009. As previously stated, Flagstar, MERS, and S & S filed a motion to dismiss or for summary judgment. In light of the dispositive motion, English tried to amend his complaint to include actions for (I) Declaratory Judgment; Injunctive Relief, (II) Civil Conspiracy to Commit Mortgage Fraud, (III) Wrongful Foreclosure/Mortgage Fraud, (IV) Intentional Infliction of Emotional Distress, and (V) Punitive Damages. 

The Court denied English‘s motion for leave to amend without prejudice because the proposed amended complaint was deficient. The proposed amended complaint failed to identify any of the defendants, it did not describe the property at issue, it did not name two of the defendants who were originally named, and the fact that two dispositive motions had already been filed by the defendants. Moreover, except for the cause of action for intentional infliction of emotional distress, which was clearly based on state law, the complaint cited no law, state or federal, in support of any of the other claims. The Court believed the better course of action was for English to file a response to defendants’ dispositive motions.

The court held: that the thrust of the proposed complaint still challenged the propriety of the foreclosure. The Flagstar defendants’ maintained in their motion for summary judgment that the foreclosure was valid. The court further held that English’s claims that the sheriff’s sale was invalid, lacks merit. The Sheriff conducted the sale and was acting as a Special Deputy Sheriff as permissible by Michigan statue.  The statute specifically authorizes the appointment of a special deputy to perform certain acts, including an auctioneer for the Wayne County Sheriff for mortgage foreclosure sales by advertisement and the execution of Sheriff’s deeds. Michigan law also clearly provides for foreclosures by advertisement and sale to be conducted by a deputy sheriff. Thus, the sheriff’s sale was valid because Sheriff Hilson was properly authorized to conduct the sale.

To the extent that English claimed MERS improperly foreclosed because the documents, i.e. note and mortgage, are not authentic and/or because he was not credited for every payment made, these claims also fail. Flagstar proved to the court in its motion, that it performed all obligations under the note and mortgage, as did MERS, as nominee. Flagstar lent English $120,051.00 to purchase a home requiring him to make monthly payments. English failed to make payments, thus triggering a notice of default.

Concerning the misrepresentation aspects of the claims, although English allege that a genuine issue of material fact as to the propriety of the foreclosure proceedings, he offered no evidence to support this assertion. English’s claim that he “neither admits nor denies” that he defaulted on the loan by not making payments was insufficient for the court. Likewise, English’s assertion that there was misrepresentation during the mortgage process failed to create a genuine issue as he failed articulate the alleged misrepresentation or provide any evidence to support this assertion. His argument that MERS did not have the right to initiate foreclosure proceedings was belied by the documents filed with the court. The mortgage itself contained an express provision giving MERS the authority to foreclose as nominee for Flagstar. In light of that provision, English could not claim MERS lacked authority.

As to the authenticity of the note and mortgage, although plaintiff says there is a genuine issue of material fact, he offers no evidence that the note and mortgage documents are not authentic. Plaintiff’s assertion that he “neither admits nor denies” whether his signature is on the note is insufficient. Moreover, the fact that the note and mortgage in the record are copies does not change this conclusion. Federal Rule of Evidence 1003 provides that a duplicate is admissible as an original unless there is a “genuine question” as to the authenticity. There is not.

Overall, the record evidence shows that the foreclosure proceedings were warranted and conducted in accordance with applicable state law.

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Allison Tussey

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4 responses to Borrower Mortgage Fraud Allegations Dismissed

  1. Does anyone know anything about PMH Financial? They have the mortage on my mobile home, and I think they are charging me to much interest. I was supposed to have a 7.8% mortage, and have a 19% mortage. When I asked them about this I was told that the 7.8 was an average.

  2. I am desperate for help and answers I have a Fannie Mae Loan and Flagstar. they are not willing to work with me! single mom for the past twenty one years with not one but two dead beat dads. Last year I lost my job. My dad built my home. He took a mortgage out on this home and property when he retired to pay off his debt of $46,000. After a year of living here he got diagnosed with terminal cancer his last wish to die at home with honor. My sister wouldn’t give up her life and move to take care of him so me and my children did.I tried several times with several brokers and lenders and no one could get me approved since I just moved up here and just started working and I have had horrible credit. We accepted that we quick claimed deeded the home to both my sister and I just in case he passed away while I was attempting to get a mortgage and we just sell the home and split the profit. Until I met Patty Fulton from Great lakes Mortgage and she said “Fannie Mae widened their guidelines on a lot of things and we were able to tell them I was working at McDonalds and that I made $2,200 a month I never have for thirteen years when in actuality I hadn’t worked there in over a year and half and just started to work there again when I moved up here. Also she said that we had to put it through as a cash-out refinance because my credit quite where Fannie Mae needed so I need to pay off some of my debt to increase my credit score. The house value is $148,000 and my loan was for $65,000.I spent 30 minutes with her filling out app and that was it she even joked(I could loose my job for this)She had the white out a few times truth she was just setting me up.I was so afraid of the entire thing so I clammed up.I had to do the closing with another lady who had me initial here and there. This Lady her name is Lois from Milltown Title and escrow she actually came to my dad’s death bed to have him sign papers and check for paying off his loan and she took that check to the credit union to pay it off.Dad’s life insurance wasn’t enough to pay off mortgage and gave me this wonderful home and he thought if I stayed current I could get money from equity later.Diagnosed July 3.2006 he died September 14,2006. no food or drink but he didn’t want me to loose this home. now because of unknowing what my rights are and were I have already foreclosed on my home and about to get evicted unless I can pay $90,393 to redeem.Before my home went into foreclosure last year I used MSHda services and she Alice Yoeman told me my only options were to pay off the $12,000 in delinquency(based on her communication with Flagstar) not because my insurance lapsed and now which when I was having problems already paying the $632 and in a payment plan I received a noticed my payments were going up to $1190 a month. After researching this year I know some of my rights would have included a escrow shortage loan options.So My home was sold at the sheriff sale last November 19,2008 and Because I live on more than 3 acres I had a year redemption.When my home was sold I got letters from Flagstar and Trott and Trott saying that there is still options to save my home and to contactIn February them which I did immediately. they told me my only options were to pay $8,000 then we could work on mod. Which I didn’t and still don’t have.Andrea Boeman-Davis at Flagstar is the SupervisorofLossMitigation(248-312-2199 Jarvis from Mission of Peace a HUD faith -based-sponsored program helping me and she told us that I don’t qualify now because I am in the redemption period (this is a lie! I called Fannie Mae hotline and they told me it a lender base decision. Last Monday the Real Estate Agent named Laurie Jamison (Coldwell Banker989-3902464)came to my home and advised me that my options are through another company I never heard of PMH Financial Assets) and told me if I don’t agree to the cash for keys option that the eviction process will start in three days .Will a Truth in lending audit help me? Who do I ask the judge or free legal aid how what who? W I was terrified that if I said anything regarding Patty Fulton predatory lending, mortgage fraud, and misrepresentations, actions that I would get in trouble but now I know that that was part of her plan to make me believe that was my only option to get the loan approved and My father sickness and my vulnerability and unknowingly got taken set up to default so they could flip the house and make a huge profit!Nobody over the past 15 months said hey do you think you may have been a victim?I feel that I have been mistreated by all the partied involved because they want nothing to do with a lawsuit and now I need help to stop the eviction process until legal action can be sought!the courthouse today and the person told me that Federal National Mortgage Association attorney Donald King 248-723-6952 filed paperwork today and that eviction start or court would be on December 10.I need help please.
    Crystal Young

  3. MERS does nothing. Any mortgage that has MERS on it is misrepresented at execution, in my opinion.

    MERS is the mortgagee, eh? Well then why does it state differently on my homeowners’ insurance declarations – the servicer claims it is mortgagee.

    MERS is a scam. MERS will never return your released note to you, even if you pay your house off in full. That means you still technically own the WHOLE loan.

    Refuse MERS at execution by striking out the MERS sentences. Ah, but wait, you are not given a legitimate choice. Either you work with MERS on your mortgage, and you won’t get a loan.

    People will wake up soon, and take this fraud down.

  4. Sorry the legal system screwed you over. From personal experience, flagstar is the slimiest lender and most discriminatory in the marketplace. They are the bottom of the bucket lenders. I will not work with them or refer anyone to them they are totally corrupt. same with Prime lending.

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