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I can be reached for a FREE consultation at (cell) 617-202-8069 or (703) 584-5998, Praises & Thanks be unto The Lord My God for the wisdom, knowledge and understanding on legal matter because I received countless feedbacks from folks facing foreclosure and bankruptcy around the United States as follows:
Comments: "I have now read your documents. You have got to be the most astute pro se person in America. The failure to give you a hearing is the most blatant denial of due process possible. Although I am not a lawyer, my experience says that this is high quality legal work and that you should win." - Chris, Massachusetts
Press Release: Open Letter to Congressional Members of the Judiciary Committee
Comments: "I must say after reading through your filings, I am absolutely amazed with your knowledge and writings. You missed your calling, you should have been a law professor. I was most impressed in the manner you pulled your thoughts and stressed you view point." - John, Georgia
Comments: "I have been inundated with TILA questions. So I went out hunting to see if anyone had already written about it in terms that a lay person might be able to understand. What I found is shown below. I believe it to be generally correct and the citations are good citations of law. See this site for the entire write-up. It should give most lay people an idea on how to handle this and it will be valuable to your lawyer if he/she is not totally familiar with the TILA context at the following link:" http://www.rcxloan.com/Civil_Action_BK_Motion_14.htm. Statement made by Attorney at Law, Neil F. Garfield, M.B.A., J.D.
Download in PDF - Banking Default Letter/Motion for Violation of Truth-In-Lending Act (TILA)
it's FREE, there is no obligation whatsover...! Sincerely, Pierre R. Augustin, MPA, MBA
INTRODUCTION
“Yet, this Court possesses the independent obligations to preserve the judicial integrity of the federal court and to jealously guard federal jurisdiction. Neither the fluidity of the secondary mortgage market, nor monetary or economic considerations of the parties, nor the convenience of the litigants supersede those obligations.”
- Christopher A. Boyko, U. S. District Judge
“Your Honors, Extraordinary and Swift measures by our Political and Public Policy makers with the proposed $700 billion bailout for Wall Street demands an equal extraordinary, Unprecedented and Exceptional ruling from the First Circuit of Appeals in reversing the decisions below and in nullifying the improper, unwarranted and illegal foreclosure action of May 25, 2007 that resulted in the deprivation of Appellant’s property rights (see Exhibit #4) & in violation of the Federal Fair Debt Collection Practices Act. In support of the point of law, a void judgment cannot give rise to valid claim of title. The general rule is that a void judgment is no judgment at all. Where judgments are void, as was the judgment rendered by the Bankruptcy court for relief of stay without a hearing & opportunity to be heard, any subsequent proceedings based upon the void judgment are themselves void. A void judgment cannot constitute res judicata. Denial of previous motions by the Bankruptcy Court cannot validate the judgment or constitute res judicata and is void from inception. Because of the breach of Fiduciary duties by Appellee and their counsels to perform due diligence as in Cox v. Helenius, 103 Wn.2d 383, 693 P.2d 683 (1985), this court should conclude as well that a trustee’s sale was void under circumstances where the Appellant had filed an action contesting the obligation and that action was pending at the time of the trustee’s sale. The parties that enforced a void ruling are trespassers (High v. Southwestern Insurance Company, 520 P.2d 662, 1974 OK 35 (Okla. 03/19/1974). In retrospect, Appellant was not in default since he had a pleading on file at the Federal district Court, Case #: 06-10368 and the Judge at the Bankruptcy Court deprived Appellant’s due process rights with a stern warning implicitly not to appeal the dismissal decision of Appellant’s Adversary proceeding (see Exhibit #5) by requiring him to seek first the approval of the court before taking any action regarding his property rights. Appellant stands before this court with a sense of sadness for the ongoing foreclosure crisis has resulted in the largest currency devaluation in modern U.S. History and affects every American and every foreign person, government, agency, village or city that put money into pooled funds of the collateralized debt obligations CDO’s.”
In the United States, no one is considered to be above the law. Counsel for Appellee is not without legal objections. However, now the time has come for the opposing counsel to rise above and behind legal technicalities to bring about a fair resolution in the midst of this global financial crisis. Appellant strongly believes in the transparency of the judicial system in the United States of America to uphold the law as well as ponders and reflects on the following oath that every federal judge takes to uphold the Constitution of the United States:
“I, _________, do solemnly swear (or affirm) that I will administer justice without respect to persons, and do equal right to the poor and to the rich, and that I will faithfully and impartially discharge and perform all the duties incumbent upon me as ________ under the Constitution and laws of the United States. So help me God.”
Likewise, “parties appearing pro se are allowed greater latitude with respect to reasonableness of their legal theories (Patterson V. Aiker, 111 F.R.D. 354, 358 [N.D. GA 1986])”. Also, the court is supposed to judge the case based on its merits even if procedural errors are made. Thus, the Court must give this Appellant, “every favorable inference arising from his pro se status” (Hall v. Dworkin, 829 F. Supp. 1403, 1409 (ND NY 1993)).
STATEMENT OF THE ISSUES
Did the Bankruptcy court err in suppressing the Appellant’s Truth-In-Lending notice of rescission of September 21, 2006 that voided the security interest in Debtor’s home according to Reg. Z §§ 226.15(a)(2), 226.23(a)(2), Official Staff Commentary § 226.23(a)(2)-1) and 15 U.S.C. § 1635(b) as a defense to foreclosure?
Did the Bankruptcy court err in suppressing the Appellee’ failure to file a declaratory judgment action within twenty days after receiving the rescission notice, before the deadline of October 10, 2006 to return the plaintiff’s money or property and record the termination of its security interest according to 15 USC 1635(b)?
Did the Debtor meet his burden of proof?
STATEMENT OF CASE
On January 30, 2007, Appellant filed an Emergency Motion for Restraining Order Forbidden Foreclosure and an Emergency Motion to Revise and Revoke order dated December 27, 2005, docket # 38 because there was NO HEARING and Appellant NEVER had the Opportunity to be heard on the motion that granted relief of stay. An evidentiary hearing on those motions was heard on February 1, 2007 via telephone was denied by the bankruptcy court. Then, Appellant filed a notice of appeal to protect his property interest and subsequently, his home was sold illegally through foreclosure on May 25, 2007 while the matter was being contested and litigated.
STATEMENT OF FACTS (See Exhibit #3 for Expanded Facts)
Pierre R. Augustin, Pro Se, Debtor (hereinafter “Appellant”), Deuthsche Bank National Trust or Chase Home Finance (hereinafter “Appellee”) and DanversBank, Ameriquest Mortgage, Commonwealth Land Title Insurance Company or “Commonwealth”, New Century Mortgage, Chase Home Finance or Chase and Deuthsche Bank National Trust (hereinafter “creditors”). Appellant bought his home in January 1999. On March 18, 2002, he conveyed the property to his business, 26-28-30 Cedar Street, Inc., subject to two mortgages. On May 17, 2002, Appellant obtained a loan with DanversBank for the amount of $55,000 on behalf of AdMerk Corp. Inc., secured by his principal dwelling. The DanversBank mortgage note was assigned to Commonwealth Land Title Insurance Company. On March 27, 2003, Appellant obtained an Ameriquest Mortgage in the amount of $244,000, portions of which were used to pay the original two mortgages. On April 15, 2004, Appellant consolidated debts and refinanced his mortgage with New Century Mortgage for $280,000. Also, the New Century mortgage note was assigned to Chase Home Finance. Then Chase assigned it to Deuthsche Bank National Trust. Having found that a foreclosure notice was served at his property in Lowell, Massachusetts while away to help my family in Virginia, on January 30, 2007, Appellant filed two Emergency motions; 1) Motion to revise and revoke relief of stay and Motion to forbidden foreclosure via telephone based on Federal Rule of Civil Procedure Rule 60 (b)(2)(3)(4) which is equivalent to Rule 9024. On February 1, 2007, Appellant clearly states that his invokation of TILA has precedence, negates the foreclosure actions and voided the security interest in his property (Transcript of 2/1/07, 3:2-10). The Appellee wrongly stated that 1635 only provided the right to rescind for three days ((Transcript of 2/1/07, 5:21-25; 6:1-2; 12-18). Three ‘Qualified Written Request’ Letter were sent to Appellee were not answered timely regarding the voiding of the security interest in Appellant’s home. Consequently, Appellee foreclosure action was fraudulent.
SUMMARY OF ARGUMENT OF ISSUES
ISSUE I – TRUTH-IN-LENDING ACT (TILA)
Appellant was left with the only viable option of TILA Rescission filed on September 21, 2006 as a defense to foreclosure (15USC 1635(i)) as enacted by Congress to protect his property rights. The security interest is void and of no legal effect irrespective of whether the creditor makes any affirmative response to the notice. Any misgivings creditors may have about the technical nature of the requirements should be addressed to Congress or the Federal Reserve Board, not the courts.
ISSUE II – APPELLEE FAILED TO FILE A DECLARATORY JUDGMENT ACTION
This case addresses the doctrine of res judicata. If any of the creditors or Appellee dispute the Appellant’s right to rescind, they should have filed a declaratory judgment action within twenty days after receiving the rescission notice, before the deadline of October 10, 2006 to return the Appellant’s money or property and record the termination of its security interest according to 15 USC 1635(b). Thus, when the time to object has expired, res judicata applies.
ISSUE III – BURDEN OF PROOF
The Truth-In-Lending Act (TILA) requirement of two rescission notice copies to each obligor is not a mere technicality. When certain material disclosures are not properly made the right to rescind continues for three years. Under the statutory scheme, the Mortgage taken in the Appellant’s home was automatically void on September 21, 2006. A fundamental error exists since creditors have violated TILA strict liability rule. Also, if uncorrected, it would be a plain error since the unwarranted foreclosure has led to a manifest injustice and the stripping away of Appellant’s property right despite having raised his TILA rights and mortgage Fraud as a defense to foreclosure. A person has standing if the Bankruptcy Court order “diminishes the person’s property, increases the person’s burdens, or impairs the person’s rights.” Williams v. Marlar (In re Marlar), 267 F.3d 749, 753 n.1 (8th Cir. 2001). As an affirmative defense, Appellant asserted that Appellee was not a real party in interest. Appellant has repeatedly argued adamantly that: (1) Appellee did not establish itself as the holder of the note and mortgage; (2) he did not owe the amount Appellee claimed; (3) Appellee did not comply with the requirements of TILA & RESPA; (4) Appellant never executed the note and mortgage at issue in favor of Appellee. He further stated that he never signed an agreement, note, or mortgage in favor of Appellee. The Bankruptcy court sided in favor of Appellee despite Appellant‘s objections. Appellant has sought the revision of this matter at the Federal District Court and is now appealing to the First Circuit court and assigns the following error: The Bankruptcy court erred as a matter of law in granting Motion in favor Appellee and against Appellant which clear the pathway for a meritless foreclosure because there was NO HEARING and Appellant NEVER had the Opportunity to be heard on relief of stay motion.
ARGUMENT – ISSUE I
A Truth-In-Lending Act (TILA) rescission action may not be barred by prior or subsequent TILA litigation which did not involve rescission (In re Laubach, 77 B.R. 483 (Bankr. E.D. Pa. 1987) (doctrine of merger bars raising state and federal law claims arising from a transaction on which a previous successful federal TILA action was based; merger does not bar, however, rescission-based on the same transaction)).
1. TILA Pleading
Specific TILA violations do not necessarily have to be alleged with particularity (Brown v. Mortgagestar, 194 F. Supp. 2d 473 (S.D. W. Va. 2002), Staley v. Americorp. Credit Corp., 164 F. Supp. 2d 578 (D. Md. 2001) (Appellant need not specify specific statute or regulations that entitle him to relief; court will examine the case for relief on any possible legal theory); Hill v. GFC Loan Co., 2000 U.S. Dist. Lexis 4345 (N.D. Ill. Feb. 15, 2000). Appellant need not plead an error exceeded the applicable tolerance, since this is an affirmative defense (15USC 1635(i)), (Inge v. Rock Fin. Corp., 281 F.3d 613 (6th cir. 2002)). Any loan amount greater than $25,000 that is secured by the Appellant’s principal residence is subject to TILA.
2. TILA Rescission Notice (See Exhibit #2 for TILA Steps)
Appellant filed a copy of the notice of rescission letter (12 C.F.R. § 226.23(a)(2)(Reg. Z §§ 226.15(a)(2), 226.23(a)(2), Official Staff Commentary § 226.23(a)(2)-1) and 15 U.S.C. § 1635(b)) in the bankruptcy court notifying the attorneys representing creditors as well as having certified receipt return of proof of delivery to the Lawyers as proof of notification according to the Official Staff Commentary, 226.2(a)(22)-2, authorizing service on attorney. But, the timeframe for any of the creditors to object or to challenge the TILA notice of rescission has already expired on October 10, 2006 according to TILA strict liability rule. As the bare bones nature of the FRB model notice demonstrates, it is not necessary to explain why the consumer is canceling. The FRB Model Notice simply says: “I WISH TO CANCEL,” followed by a signature and date line (Arnold v. W.D.L. Invs., Inc., 703 F.2d 848, 850 (5th cir. 1983) (clear intention of TILA and Reg. Z is to make sure that the creditor gets notice of the consumer’s intention to rescind)). Thus, the security interest or lien arising by operation of law on Appellant’s property becomes automatically void (15 U.S.C. § 1635(b); Reg. Z §§ 226.15(d)(1), 226.23(d)(1) (See also 69 Fed. Reg. 16769, 16771-72 (Mar. 31, 2004) (reiterating that security interest becomes void when consumer rescinds), even if a court has not yet ruled on the validity of the plaintiff’s rescission (Willis v. Friedman, Clearinghouse No. 54,564 (Md. Ct. Spec. App. May 2, 2002)).
ARGUMENT – ISSUE II
1. Creditors Failed To File For Declaratory Judgment
The statute and Regulation Z states that if creditors disputes the Appellant’s right to rescind, they should had filed a declaratory judgment action within the twenty days after receiving the rescission notice, before its deadline to return the consumer’s money or property and record the termination of its security interest (15 USC 1625(b) (see also Robertson v. Strickland (In re Robertson), 333 B.R. 894, 898, 904 n. 14 (Bankr. M.D. Fla. 2005) (after rescission, consumer is not responsible for loan discount fee, mortgage broker fee, closing fee, recording fees, mortgage note stamps or intangible tax). Also, as a matter of contract law, the original loan has no longer been paid off early once the refinance loan is rescinded, so no prepayment penalty is owed by Appellant (Official Staff Commentary §§ 226.23(d)(2)-1)). The statute and Regulation Z make it clear that, if Appellant has the extended right and chooses to exercise it, the security interest and obligation to pay charges are automatically voided. (Cf. Semar v. Platte Valley Fed. Sav. & Loan Ass’n, 791 F.2d 699, 704-05 (9th Cir. 1986) (courts do not have equitable discretion to alter substantive provisions of TILA, so cases on equitable modification are irrelevant). The statute, section 1635(b) states: “When an obligor exercises his right to cancel…, any security interest given by the obligor… becomes void upon such rescission”. Also, it is clear from the statutory language that the court’s modification authority extends only to the procedures specified by section 1625(b)(12 C.F.R.§ 226.23(d)(2)).
2. 11 U.S.C. § 554(C)
A Trustee should abandon any estate property that is burdensome or of inconsequential value to the estate. Property should be abandoned when the total amount to be realized would not result in a meaningful distribution to creditors. Also, scheduled property that is not administered before the case is closed is deemed abandoned upon entry of the order closing the estate. § 554(c). Any scheduled property that the Trustee does not administer is deemed abandoned upon the closing of the case. Under 11 U.S.C. § 554(c), property that has been "scheduled," under 11 U.S.C. § 521(1), is deemed to have been abandoned by the Trustee at the close of the bankruptcy case unless it has been "administered". Also, the usual ground for abandonment is that the property is of no value to the estate. Because the Appellant 's property was scheduled as exempt, on April 17, 2006, the Trustee filed a Trustee’s Report of No Distribution that states: “…has received ‘no property’ nor paid any money on account of the estate except exempt property, and diligent inquiry having been made, Trustee states that there is no nonexempt property available for distribution to creditors.
3. Exempt Property Not Property Of The Estate
Exempt property is property that the Appellant may retain in a liquidation case. In all cases, unless some party successfully objects, the Appellant retains property claimed as exempt (11 U.S.C. § 522 (l); Taylor v. Freeland & Kronz, 503 U.S. 638, 112 S. Ct. 1644, 118 L. Ed. 2d 280 (1992)). Under the Bankruptcy Act, the Trustee does not take title to the Appellant's retains as exempt property and it is no longer part of the estate. Thus, 1) 30-days after the Appellant’s 341 meeting and 2) granting of his civil suit exemption since Appellant’s property and legal claim were exempt property and not administered by the Trustee since it was exempt in the first place, they reverted to the Appellant. Appellant rights to his exempt property which was not administered property by the Trustee are treated as if no bankruptcy petition was filed. Pursuant to FRB 5009, Trustee certifies that the estate is fully administered and requests that the report be approved and the Trustee discharged from any further duties. (Entered: 04/17/2006, Case #: 05-46957). Once the Trustee has filed a final report certifying that the estate has been fully administered, if no objection is filed within thirty days, there is a presumption that full administration has taken place regardless of whether the case is closed (Fed. R. Bankr. P 5009). Once the presumption is in place, all property scheduled and property with no value to the estate which has not been administered are deemed abandoned (11 U.S.C. § 554(c)(see Christy v. Heights Finance Corp., No. 86-1280, United States District Court for the Central District Of Illinois, 101 B.R. 542; 1987 U.S. Dist. Lexis 14996, May 18, 1987, decided, May 18, 1987, filed)).
4. Appellant's Property Is Not Property Of The Estate
The Bankruptcy Code defines "property" very broadly as all legal and equitable interests of the Appellant and any property that is community property of the Appellant and his spouse. 11 U.S.C. § 541. Even the property that the Appellant selects as exempt property is "property of the estate" until the exemption claims are final (generally 30 days after the 341 meeting held on November 3, 2005). Federal Rule of Bankruptcy Procedure provides that if the creditors or the Trustee did not object to the Appellant's claimed exemptions within 30 days from the date that the 341 meeting concluded, unless further time was granted by the court, (F.R.B.P. 4003(b)), along with burden of proof that the exemptions were not properly claimed (F.R.B.P. 4003(c)), then the exemptions are deemed allowed (11 U.S.C. § 522(l)), even if the claimed exemptions are not legally allowable or are invalid as a matter of law. (See Taylor v. Freeland & Kronz, 503 U.S. 638, 112 Sup. Ct. 1644 (1992)). When an exemption as to that property has become final, it loses its character as property of the estate (In re Norman, 157 B.R. 460 (C.D. Cal. 1993)(exempt property is not property of the estate after it is properly exempted)). Exemption has the primary effect of removing property from the estate, allowing Appellant to retain the exempted property for purposes of support and advancing a fresh start. See 11 U.S.C. § 542(a) (exempt property is not required to be turned over to the Trustee); Sherk v. Texas Bankers Life & Loan Ins. Co. (In re Sherk), 918 F.2d 1170, 1174 (5th Cir. 1990) (property found by the bankruptcy court to be exempt “is no longer property of the estate”); In re Gagnard, 17 B.R. 811, 813 (Bankr.W.D. La. 1982) (exempt property, though initially property of the estate “becomes property of the debtor”).
5. Federal Rules Bankruptcy Procedure 4003(B)
According to the Supreme Court,
"Section 522(l) says that '[u]nless a party in interest objects, the property claimed as exempt on such list is exempt.' Rule 4003(b) gives Appellee and creditors 30 days from the initial creditors' meeting to object. By negative implication, the Rule indicates that creditors may not object after 30 days 'unless, within such period, further time is granted by the court.”
The Bankruptcy Court did not extend the 30-day period. Section 522(l) therefore has made the property exempt and operates to remove from the Bankruptcy estate interest that had become property of the estate in a fashion similar to abandonment under section 554 since according to 11 USC 522(a)(2), it explicitly states that exemptions are to be determined as of the date the bankruptcy petition was filed and is analogous to Christy v. Heights Fin. Corp., 101 B.R. 542 (C.D.Ill. 1987)(debtor had standing to assert TILA claim that had been exempted), (Fed. R. Bankr. P. 1009; In re Olson, 253 B.R. 73 (B.A.P. 9th Cir. 2000); see also In re Kaelin, 308 F. 3d 885 (8th Cir. 2002) (debtor who promptly amended to exempt cause of action after he first learned about it was permitted to claim exemption). The difference is that the abandonment effectuated by Section 522(l) is automatic and Appellant can participate in particular litigation independent from the estate’s trustee (In re Gulph (Woods Corp. 24 C.C.C. 2d 206, 116 B.R. 423 (Bankr. Ed. Pa. 1990) which is consistent with the Supreme Court’s decision in Taylor v. Freeland & Kronz., 503 U.S. 638, 112 S.Ct. 1644 (1992)). Put another way, abandonment moots any dispute about whether an asset is exempt (S. Rep. 95-989, at 75-76, reprinted in 1978 U.S.C.C.A.N. 5787, 5861-62;H.R. Rep. 95-595, at 549, reprinted in 1978 U.S.C.C.A.N. 5963,6455.
6. Principle Of Res Judicata
The issue is whether res judicata applies after 1) the 30 days of the 341 meeting, 2) the July 19, 2006 amendment of his schedules granted by the Bankruptcy Court and 3) the TILA’s 20-day period to file a declaratory judgment are final and nonappealable order which should have precluded the Appellee and other creditors from objecting as pointed out in Appellant’s Memorandum of Law in opposition to the Appellee and creditors motion to object submitted to the Bankruptcy Court prior the hearing. (See In re Magallanes, 96 B.R. 253, 256 (9th Cir. BAP 1988). Res Judicata, also known as claim preclusion, bars the relitigation of issues which were actually litigated as well as issues which could have been litigated within the time limit after the 341 meeting, the July 3, 2006 Appellant’s amendment of his schedules and TILA’s strict liability rules states that within the 20-day period should seek a ‘declaratory judgment action’ otherwise any subsequent action will be time barred and analogous to the principle of res judicata.
ARGUMENT – ISSUE III
1. TILA Violations That Triggered Extended Rescission
Appellant and his wife should had received two copies of the notice of rescission ( a total of four copies for a couple)(12 C.F.R.§§ 226.23(b)(1), 226.17(a). Creditors are required to “deliver two copies of the notice of the right to rescind” to the Appellant and two copies as well to his wife at the time of the closing. Appellant and his wife only receive one copy of the notice rather than the two copies per person that the regulations require by 12 C.F.R. § 226.23(b). (See Davison v. Bank One Home Loan Services, 2003 U.S. Dist. LEXIS 514, 2003 WL 124542, at*3-*4 (D. Kansas January 13, 2003) (concluding that under TILA both husband and wife must each be given two copies of the notice of the right to rescind); Hanlin v. Ohio Builders and Remodelers, Inc., 212 F. Supp.2d 752, 759 (S. D. Ohio 2002) (“a lender is required to deliver two copies of the notice of right to rescind”); Stone v. Mehlberg, 728 F. Supp. 1341, 1347 (W.D.Mich. 1990) (noting that TILA was violated because husband and wife should have each been provided with two copies of the notice of the right to rescind). As mentioned above, if material TILA disclosures are not properly given, Including notice of the proper number of the right of rescission, the rescission is extended to three years after consummation of the transaction, §§ 1602(u),1635(a) and (f), Regulation Z, § 226.23(a)(3); Jenkins v. Landmark Mortgage, 696 F.Supp. 1089 (W.D. Va. 1988); Curry v. Fidelity Consumer Discount Co., 656 F.Supp. 1129 (E.D. Pa. 1987). It can also, as noted above, be raised at any time as a defense or by way of recoupment. See also, § 1640(e). In the alternative, the foreclosure proceeding should be dismissed.
2. Relief From The Stay
A request for relief from the stay is a “A hearing on a request for relief from automatic stay is a ‘contested matter’ brought on by a motion not by adversary proceeding. (Grella v. Salem Five Cents Savings Bank, 42 F.3d26, 32 C.B.C. 2d 1303 (1st Cir. 1994). “In D-1 Enterprises, Inc. v. Commercial State Bank, 864 F.2d 36 (5th Cir. 1989), noting the two forms of adversary proceedings and contested matters, the court concluded that res judicata does not apply to ‘contested matters’ which employ a ‘quick motion-and-hearing’ style” and there was NO HEARING and Appellant NEVER had the Opportunity to be heard on the motion of relief of stay. The ‘newly discovered evidence’ of TILA violations and mortgage fraud was unknown to Appellant and were not discovered until September 2006 whereby he timely filed a TILA notice of rescission. Despite the fact all creditors had received the proper and valid TILA notice of rescission, Deuthsche Bank National Trust foreclosure action is a ‘Fraud’ on this Court because TILA voids the security interest and no longer has the authority to foreclose on Appellant’s home. Thus, on newly uncovered claims, facts and evidence highlighted in the subsequent paragraphs, that motion for relief of stay granted to DanversBank and Chase Home Finance should be revised and revoked and should had permanently enjoined Appellee or any other creditors from any foreclosure proceedings.
3. No Valid Mortgage Exists Upon For Appellee To Foreclosure On
Truth-In-Lending Violations - This case involves a loan between Appellant and New Century Mortgage which was assigned to Chase Home Finance then to Deuthsche Bank National Trust. Appellant requests an injunction of the instant foreclosure action pursuant to Massachusetts and Federal laws and Rules relating to injunctions. In the instant case, a valid mortgage does not exist on the property located at 28 cedar Street, Lowell, Massachusetts because Appellant has validly exercised his right to rescind the transaction pursuant to the federal Truth-in-Lending Act, 15 U.S.C. § 1635. Rescission is a complete defense to foreclosure on the property. FDIC v. Ablin, 532 N.E. 2d 379 (Ill. App. 1988); Community National Bank & Trust v. McClammy, 525 N.Y.S. 2d 629 (App. Div. 1988); Yslas v. D.K. Guenther Builders, Inc., 342 So. 2d 859 (Fla. Dist. Ct. App. 1977).
4. Appellant Meets The Criteria
"[O]nce the court finds a violation, no matter how technical, it has no discretion with respect to liability." In re Wright, supra. at 708; In re Porter v. Mid-Penn Consumer Discount Co., 961 F.2d 1066, 1078 (3d. Cir. 1992); Smith v. Fidelity Consumer Discount Co., supra. at 898. A strict interpretation furthers the congressional goal of standardizing terminology and procedures in credit transactions." April v. Union Mortgage Co., 709 F.Supp. 809, 811 (N.D. Ill. 1989); Smith v. No. 2 Galesburg Crown Furnace Corp., 615 F.2d 407, 416 (7th Cir. 1980). Thus, Appellant’s claims as aforesaid are meritorious, has raised “serious questions” and established “probable cause” that the foreclosure should not have been allowed according to the rule of law. (See Exhibit 1 for a Partial Lists of Violations)
5. Appellant Has Suffer Injury
Appellant has suffered injury since the relief sought herein in Bankruptcy Court was not granted. Appellant argues that the lower courts erred in granting the motion to Appellee because there is a genuine issue of fact about whether Appellee was the holder of note/mortgage. Appellant asserts that he executed the note and mortgage in favor of New Century Mortgage Corporation—not Appellee. Appellant states that because Appellee did not present evidence as to how it became the holder of the note and mortgage, it has not shown that it is a real party in interest.
6. Appellant Was Entitled To An Injunction
Appellant was entitled to an injunction to stay the foreclosure sale and any other action in the above-captioned case while the merits of his appeals and affirmative defense action & claims can be litigated. (Butler v. U.S. Dept. of Housing & Urban Dev’t, 595 F. Supp. 1041, 1047 (E.D.Pa. 1984). (“Congress clearly indicated that it is in the public interest to assist low- and moderate-income households in avoiding foreclosure of their mortgages and loss of their homes.”); see also Ruiz v. New Garder Tp., 232 F. Supp. 2d 418, 429 (E.D. Pa. 2002) (granting a preliminary injunction to avoid eviction: “Here, the irreparable harm consists not merely in the asserted due process violation, but in the face that the plaintiffs will be displaced from their homes, a circumstance that would be especially intolerable without an opportunity to be heard.”). As set forth above, Appellant has the right to exercise the rescission remedy pursuant to 15 U.S.C. § 1635(f) as well. Furthermore, none of the creditors had complied with TILA.
7. Without A Valid Mortgage--Appellee Foreclosure is unwarranted
Without a valid mortgage, Deutsche Bank National Trust should not have been allowed to continue with the foreclosure action. The continuance of foreclosure upon an invalid mortgage was a FRAUD on the court which clearly lead to immediate, substantial and irreparable harm to Appellant, his wife and his family. As a judicial notice to this court, Deutsche Bank National Trust, on the other hand, suffered relatively little harm with a windfall profit.
CONCLUSION
The First Circuit Court of Appeals has unequivocally stated that any violation of TILA, regardless of the technical nature of the violation, must result in a finding of liability against the lender (Bizier v. Globe Financial Services, Inc., 654 F.2d 1, 3 (1st Cir. 1981). TILA is a remedial statute designed to protect Appellant who is not on equal footing with Deutsche Bank National Trust. Appellant's rescission was valid for any of the numerous reasons detailed in this appeal. When Appellant rescinds within the context of a bankruptcy, courts have held that the rescission effectively voids the security interest, rendering the debt, if any, unsecured. (See In re Perkins, 106 B.R. 863, 874 (Bankr. E.D.Pa. 1989); In re Brown, 134 B.R. 134 (Bankr. E.D.Pa. 1991); In re Moore, 117 B.R. 135 (Bankr.E.D. Pa. 1990)).
1. Appellee had NO legal standing to foreclose
Appellee and any other parties never provide proof of a signed assignment that they actually own the loan and they did not have legal standing to foreclose in the first instance on Appellant‘s property. Counsel for Chase and Deutsche had taken the position that he represented the lender in the subject transaction. That was a false assertion and that any notice of sale, foreclosure action, sale or eviction proceeding were wrongful abuse of the judicial system. Chase Home Finance or any other entities are not the lender and has no authority, ownership, possession or control over the security instrument or note. Hence, every action that have taken to foreclose and disposed of the Appellant’s property were wrongful. Unequivocally, the initial contract (the loan documents themselves) were legally invalid. They were made fraudulently, overreaching, bad loan practices, and loan origination practices which violated both federal and state law. Appellant is now in the discovery process within the New Century bankruptcy for mortgage fraud that included charging excessive fees and interest rates, while others misused the legally accepted loan practices including disclosure requirements, fair lending requirements, and predatory lending practices. As Officer of the Court, Counsel for Chase is obligated to perform due diligence to confirm the facts alleged by Chase and Deutsche and in particular their legal standing. The Qualify Written Request letter to determine whether Chase and/or Deutsche had the necessary authority, possession of the original note or any other documents entitling them to pursue sale or foreclosure were never provided. Most likely, that information would have revealed that this transaction was securitized — i.e., assigned up to mortgage aggregators, investment bankers,. special purpose vehicle entities, “secured” with credit default swaps and eventually transferred, assigned or pledged to investors in asset backed securities. Notwithstanding the above, Chase and Deutsche have illegally foreclosure, sale and evicted Appellant from his home, despite the facts that Appellant was not in default since he had rescinded the Note and mortgage according to TILA. Both, the lender and trustee were aware of the fact that Appellant and that they were not the real parties in interest (i.e., they lack standing to proceed to judicial or non-judicial sale), the trustee and lender lack authority to proceed but had intentionally and fraudulently filed papers and posted notices as though the authority was present.
2. Law and Analysis
A party seeking to bring a case into federal court on grounds of diversity carries the burden of establishing diversity jurisdiction. Coyne v. American Tobacco Company, 183 F. 3d 488 (6th Cir. 1999). Further, the plaintiff “bears the burden of demonstrating standing and must plead its components with specificity.” Coyne, 183 F. 3d at 494; Valley Forge Christian College v. Americans United for Separation of Church & State, Inc., 454 U.S. 464 (1982). The minimum constitutional requirements for standing are: proof of injury in fact, causation, and redressability. Valley Forge, 454 U.S. at 472. In addition, “the plaintiff must be a proper proponent, and the action a proper vehicle, to vindicate the rights asserted.” Coyne, 183 F. 3d at 494 (quoting Pestrak v. Ohio Elections Comm’n, 926 F. 2d 573, 576 (6th Cir. 1991)). To satisfy the requirements of Article III of the United States Constitution, the plaintiff must show he has personally suffered some actual injury as a result of the illegal conduct of the defendant. (Emphasis added). Coyne, 183 F. 3d at 494; Valley Forge, 454 U.S. at 472. Moreover, this Court is obligated to carefully scrutinize all filings and pleadings in foreclosure actions, since the unique nature of real property requires contracts and transactions concerning real property to be in writing. “Thus, with regards to real property, before an entity assigned an interest in that property would be entitled to receive a distribution from the sale of the property, their interest therein must have been recorded in accordance with Massachusetts law.”
3. Appellee Is Not A Real Party In Interest
"Every action shall be prosecuted in the name of the real party in interest." Civ.R. 17(A). A real party in interest is one who is directly benefited or injured by the outcome of the case. Shealy v. Campbell (1985), 20 Ohio St.3d 23, 24. The purpose behind the real-party-in-interest requirement is
" 'to enable the defendant to avail himself of evidence and defenses that the defendant has against the real party in interest, and to assure him finality of the judgment, and that he will be protected against another suit brought by the real party at interest on the same matter.' "
In foreclosure actions, the real party in interest is the current holder of the note and mortgage. Chase Manhattan Mtge. Corp. v. Smith, Hamilton App. No. C-061069, 2007-Ohio-5874, at ¶18; Kramer v. Millott (Sept. 23, 1994), Erie App. No. E-94-5 (because the plaintiff did not prove that she was the holder of the note and mortgage, she did not establish herself as a real party in interest). A party who fails to establish itself as the current holder is not entitled to judgment as a matter of law. First Union Natl. Bank v. Hufford (2001), 146 Ohio App.3d 673, 677, 679-680. Thus, in Hufford, the Third District Court of Appeals reversed a grant of summary judgment where a purported mortgagee failed to produce sufficient evidence explaining or demonstrating its right to the note and mortgage at issue. In that case, the record contained only "inferences and bald assertions" and no "clear statement or documentation" proving that the original holder of the note and mortgage transferred its interest to the Appellee. Id. at 678. The failure to prove who was the real party in interest created a genuine issue of material fact that precluded summary judgment. Id. at 679-680. Similarly, in Washington Mut. Bank, F.A. v. Green (2004), 156 Ohio App.3d 461, the Seventh District Court of Appeals reversed the trial court's finding of summary judgment where the plaintiff failed to prove that it was the holder of the note and mortgage. There, the defendant executed a note and mortgage in favor of Check 'n Go Mortgage Services, not Washington Mutual Bank, F.A. Although Washington Mutual Bank, F.A. submitted an affidavit alleging an interest in the note and mortgage, it did not state how or when it acquired that interest. Id. at 467. The court concluded that this lack of evidence defeated the purpose of Civ.R. 17(A) by exposing the defendant to the danger that multiple "holders" would seek foreclosure based upon the same note and mortgage. See also, FNMA v. Bryant, 62 Ill.App.3d 25, 378 N.E.2d 333 (5th Dist. 1978), where the court found that the lender had foreclosed too quickly and that the default had been cured. Frequently, mortgage servicers attempt to service loans without consulting the loan documents, with the result that they depart from the their terms. In other cases, mortgage companies have been unable to prove that they actually own the loan and gave notice of acceleration as required by the loan documents. In re Kitts, 2002 WL 416912 (Bankr. E.D.Tenn. Feb. 28, 2002).
4. Appellant’s Due Process of Law
Appellant respectfully submits that the public interest favors the granting the reversal of the Bankruptcy Court decision because the public has an interest in the orderly administration of justice and Public policy favors the proper adjudication of claims. The Fourteenth Amendment prohibits the deprivation of liberty or property without due process of law. (See U.S. v. Premises and Real Prop. At 4492 S. Livonia Rd., F. 2d 1258, 1263 (2d Cir. 1989) ( requiring notice and adversarial hearing for property forfeiture actions to comply with due process, when the property is a home)( Id. At 1264, quoting United States v. Single Family Dwelling, Civ. No. 85-0246-F, slip op. at 38 (D. Mass. Nov. 26, 1986) Report and Recommendation of Magistrate); see also U.S. v. All Assets of Statewide Auto Parts, Inc., 971 F. 2d 896, 902 (2d Cir. 1992) (a claimant’s interest in his home merits special constitutional protection).
5. Public Policy Supports Appellant’s Assertions
The following cases provide strong support the notion to maintain the status quo of Appellant interest in his home until such time that all material fact have been fully litigated; See In re Englander, 95 F.3d 1028, 1031 (11th Cir. 1996) (“[H]omestead exemption laws [should] be liberally applied to the end that the family shall have shelter and shall not be reduced to absolute destitution.”); In Re kretzinger, 103 F.3d 943, 945 (10th Cir. 1996) (quoting First Nat’l bank of Sentinel v. Anderson, 206 Okla. 54, 240 P. 2d 1066, 1068 (1952)) (“[Homestead exemption] provisions are to be liberally construed in the interest of the family home.’); In re Perry, 345 F.3d 303, 317 (5th Cir. 2003) (“Homesteads are favorites of the law….”); In re Miller, 103 B.R. 65, 67 (Bankr. N.D.N.Y. 1989) (“Grounded upon public policy, the purpose of the homestead exemption is to protect a debtor-homeowner and his immediate family from losing their family dwelling because of economic adversity.”) In re Jones, 193, B.R. 503, 506, (Bankr. E.D. Ark. 1995) (“All presumptions are to be made in favor of the preservation and retention of the homestead.”). Thus, the “real party in interest” rule, is not intended to assist banks in avoiding traditional federal diversity requirements. Although Massachusetts law guides federal courts on substantive issues, state procedural law cannot be used to explain, modify or contradict a federal rule of procedure, which purpose is clearly spelled out in the Commentary. “In federal diversity actions, state law governs substantive issues and federal law governs procedural issues.” Erie R.R. Co. v. Tompkins, 304 U.S. 63 (1938); Legg v. Chopra, 286 F. 3d 286, 289 (6th Cir. 2002); Gafford v. General Electric Company, 997 F. 2d 150, 165-6 (6th Cir. 1993).
“Plaintiff’s, “Judge, you just don’t understand how things work,” argument reveals a condescending mindset and quasi-monopolistic system where financial institutions have traditionally controlled, and still control, the foreclosure process. Typically, the homeowner who finds himself/herself in financial straits,fails to make the required mortgage payments and faces a foreclosure suit, is not interested in testing state or federal jurisdictional requirements, either pro se or through counsel. Their focus is either, “how do I save my home,” or “if I have to give it up, I’ll simply leave and find somewhere else to live.” In the meantime, the financial institutions or successors /assignees rush to foreclose, obtain a default judgment and then sit on the deed, avoiding responsibility for maintaining the property while reaping the financial benefits of interest running on a judgment. The financial institutions know the law charges the one with title (still the homeowner) with maintaining the property.
There is no doubt every decision made by a financial institution in the foreclosure process is driven by money. And the legal work which flows from winning the financial institution’s favor is highly lucrative. There is nothing improper or wrong with financial institutions or law firms making a profit — to the contrary , they should be rewarded for sound business and legal practices. However, unchallenged by underfinanced opponents, the institutions worry less about jurisdictional requirements and more about maximizing returns. Unlike the focus of financial institutions, the federal courts must act as gatekeepers, assuring that only those who meet diversity and standing requirements are allowed to pass through. Counsel for the institutions are not without legal argument to support their position, but their arguments fall woefully short of justifying their premature filings, and utterly fail to satisfy their standing and jurisdictional burdens. The institutions seem to adopt the attitude that since they have been doing this for so long, unchallenged, this practice equates with legal compliance. Finally put to the test, their weak legal arguments compel the Court to stop them at the gate. The Court will illustrate in simple terms its decision: “Fluidity of the market” — “X” dollars, “contractual arrangements between institutions and counsel” — “X” dollars, “purchasing mortgages in bulk and securitizing” — “X” dollars, “rush to file, slow to record after judgment” — “X” dollars, “the jurisdictional integrity of United States District Court” — “Priceless.””
- Christopher A. Boyko, U. S. District Judge
6. Why The Lower Court Decision Should Be Reversed?
Because no extreme and unmitigateable prejudice to creditors and Appellee existed in the case below, the Bankruptcy Court was incorrect in denying the Appellant the right to halt all foreclosure proceedings pending the verification that Appellee was the “Real Party In Interest”, the Holder in Due Course and had the Legal Standing to foreclose. Due to the fact tha Appellee never held a hearing with opportunity to Appellant to be heard or produced original copy of the mortgage note in court for inspection, The First Circuit of Appeal should reflect a demarcation from the status quo with an Extraordinary and Exceptional ruling to nullify the unwarranted foreclosure because the original mortgage lender and assignee did not have cleaned hands, acted willfully and maliciously to commit mortgage fraud and to cause injuries to Appellant by not abiding to Massachusetts UDAP Statutes, federal and state laws against predatory lending practices. Lastly, Your Honors, the fact that Appellee is NOT the actual holder, owner of the Note and mortgage are fundamental errors that ‘warrant the reversal’ of the Bankruptcy decision denying Appellant’s right to the Emergency Motion for Restraining Order Forbidden Foreclosure and the Emergency Motion to Revise and Revoke the automatic stay with the New Evidences of TILA and Mortgage Fraud.
“Our regulatory system must protect consumers and investors by punishing individuals who engage in fraud, break contracts, or lie to customers -- like the predatory lenders who know you can't afford an adjustable rate mortgage, but mislead you into signing one. These actions are criminal and the people who commit them should be behind bars.” - Statement by a Presidential Candidate
The greatness of America is intertwined with property rights as "the guardian of every other right". In retrospect, Martin Luther King in his infamous speech could not have said it better:
“But we refuse to believe that the bank of justice is bankrupt. We refuse to believe that there are insufficient funds in the great vaults of opportunity of this nation. And so, we've come to cash this check, a check that will give us upon demand the riches of freedom and the security of justice. For at the real heart of battle for equality is a deep seated belief in the democratic process.“
Equality and fairness cannot co-exist if Appellee is allowed to act above the respect of the law and order. Thus, Appellant stands today with a sense of deep humility and great assurance -- humility in the wake of those great American Jurists who have stood up for righteousness & assurance that a fair & balance ruling will be based on the grounds & principles of public policy.
CERTIFICATE OF SERVICE
I hereby certify that a true copy of the above document is mailed to the First Circuit Court of Appeals, followed Fed. R. App. P. 32(a)(7) and served upon Appellee.
X ____________________________________
Pierre R. Augustin, Pro Se,3941 Persimmon Dr, #102,
Fairfax, VA 22031 Tel: 617-202-8069
VERIFICATION
I, Pierre R. Augustin, hereby depose and state as follows:
1. I am Pierre R. Augustin, represented by self.
2. I have read the foregoing Appeal filed herein and knowing the contents thereof have found that the allegations of fact set forth therein are true of my own personal knowledge, except as to those allegations based on information and belief which I believe to be true.
Signed under the penalties of perjury.
X ___________________________________ Date:_____________________
STATE OF ________________COUNTY OF _____________________________
On this _____ day of __________, 2008, before me, the undersigned
notary public, personally appeared ___________________________,
proved to me through satisfactory evidence of identification,
which was ______________________________________________________,
to be the person whose name is signed on the preceding or
attached document, and acknowledged to me that s/he signed it
voluntarily for its stated purpose.
_________________________
Notary Public
My Commission Expires:
(SEAL)
United States Court of Appeal
Pierre Richard Augustin, PRO SE )
Appellant )
)
v. ) Case #: 08-1408
)
Chase Home Finance )
Appellee )
Appellant Affidavit/Affirmation in Support of His Brief
I, Pierre R. Augustin, affirm the following under penalty of perjury, being duly sworn, deposes and says:
1) I am the Appellant in this action, and I respectfully submit this affidavit/affirmation.
2) This Appeal Brief is to support Appellant Motions to Revise and Revoke the automatic stay and foreclosure action by Appellee that occured.
3) I have personal knowledge of facts, which bear on this motion. In view of the foregoing, it is respectfully submitted that this Appeal to reverse the order below be granted.
I declare under penalty of perjury that the foregoing is true and correct, except as to those allegations based on information and belief, which I believe to be true.
Dated: ______________________________________________________________
Appellant, Pierre-Richard Augustin, Pro Se
3941 Persimmon Dr, #102, Fairfax, VA 22031 617-202-8069
STATE OF ___________________________COUNTY OF _____________________________
On this __day of________, 2008, before me, the undersigned notary public, personally appeared
_______________________, proved to me through satisfactory evidence of identification, which
was _______________________________________________________, to be the person
whose name is signed on the preceding or attached document, and acknowledged to me that s/he
signed it voluntarily for its stated purpose.
______________________________
Notary Public
My Commission Expires:
(SEAL)
Exhibit 1
Appellee has violated TILA, 15 U.S.C. § 1601, Massachusetts and Federal law and other rules as follows:
11 U.S.C. § 522(c) established the postbankruptcy relationship between “property exempted” in the bankruptcy case and prepetition debts. Section 522 (c) states that unless the case is dismissed, property exempted under this section is not liable during or after the case for any debt of the debtor that arose, or that is determined under section 502 of this title as if such debt had arisen, before the commencement of the case…. The legislative history of this section also shows that it was enacted to insulate exempt property from any nondischargeable prepetition debts which are not listed as exceptions. See S. Rep. No. 95-989, at 76 (1978), reprinted in 1978 U.S.C.C.A.N 5787, 5862; H.R. Rep. No. 95-595, at 361 (1977), reprinted in 1978 U.S.C.C.A.N 5963, 6317. Thus, Appellant has timely avoided the security interest in his principal dwelling by invoking TILA.
Violations of the Massachusetts Consumer Protection Act, Mass. Gen. Laws ch.93A & Massachusetts Consumer Cost Disclosure Act, Mass. Gen. Laws chp. 140D 1-35(“CCCDA”) Law for engaging in “unfair or deceptive acts or practices” at, prior to, or subsequent to a consumer transaction since certain creditors failed to respond up to two to three ‘Qualified Written Request letter’ is considered a violation of RESPA as well.
Fraud committed upon Appellant at the registry of deed in Lowell, Massachusetts filed on January 29, 2007 by New Century Mortgage, Chase Home Finance and Deuthsche Bank National Trust in transferring mortgage and note illegally and fraudulently as described in 15USC 1635(i). The transfer of the promissory note is governed by the law of contracts and by the Uniform Commercial Code (UCC). (Harmony Hmes v. United States ex rel. Small Bus. Admin., 936 F. Supp. 907 (M.D. Fla. 1996)).
Violation of the statute of limitations and fraudulent assignment of the mortgage. Without a security interest in the Appellant’s property, New Century Mortgage, Chase Home Finance, Deuthsche Bank National Trust and any other parties do not have the authority to foreclose. (McKay v. Capital Resources, 940 S. W.ed 869 (Ark. 1997); Fleet v. Nazareth, 75 Conn. App. 791, 818 A.2d 69 (2003); State Street Bank and Trust Co. v. Lord, 851 So. 2d 790, 51 U.C.C. Rep. Serv. 2d 191 (Fla. Dist. Ct. App. 2003); Mitchell bank v. Schanke, 676 N.W.2d 849 (Wis. 2004)).
The Appellee or any of the creditors are not Real Party in Interest since the TILA notice of rescission automatically voids the security interest. Upon rescission, none of the mortgage holders have standing to bring a foreclosure action (First Union Nat’l Bank v. Hufford, 146 Ohio App. 3d 673, 767 N.E.2d 1206 (Ohio Ct. App. 2001); Washington Mut. Bank v. Green, 156 Ohio App. 3d 461, 806 N.E.2d 604 (2004); (a real party in interest is one who is directly benefited or injured by the outcome, however, there is not a security interest in the Appellant’s property ).
Appellant states damage claims against creditor for failure to respond properly to his cancellation notice (Gerasta v. Hibernia Nat’l Bank, 575 F.2d 580 (5th Cir. 1978)(Canty v. Equicredit Corp., 2003 WL 21243268 (E.D. Pa. May 8, 2003), (Clay v. Johnson, 77 F. Supp. 2d 879 (N.D. ILL 1999)(borrowers can get damages for rescission violation if rescission is exercised within 3-year period)
Appellant states Tort claims for Negligence (violations of TILA) and intentional infliction of Emotional Distress (Appellant states that New Century Mortgage, Chase Home Finance and Deuthsche Bank National Trust, conduct of moving forward with an illegal foreclosure action and fraudulent transferred Appellant’s mortgage on January 29, 2007 were intentional and reckless which causes severe emotional distress to him.
Appellant states violations of the Federal Fair Debt Collection Practices Act and Massachusetts Debt Collection Laws, Violation of the Fair Credit Reporting ACT and seeking punitive damages per 15 USC 1681 n(a)(2), 15 USC 1681o, 15 USC 1692e(8) because their premature report caused Appellant, his wife, and 4 children unable to attend school and to be classified as homeless in the state of Virginia for a week as a result of false report that the mortgage was foreclosed upon even though creditors had received the TILA notice of rescission on September 21, 2006 which voided automatically the security interest in Appellant’s home.
Appellant states libel claims because the malicious written and reported notice of foreclose mortgage caused the harms mentioned above to Appellant and all his families members as a result of the defamatory language in making false statement to credit reporting agencies that his account with the mortgage companies was delinquent. (Johnson v. Citimortgage, Inc., 351 F. Supp. 2d 1368 (N.D. Ga. 2004). Appellant states claims for loss of consortium, severe emotional distress, punitive or exemplary damages due to the misconduct of Defendants of trampling his TILA rescission rights intentionally.
Appellant is raising defense to foreclosure action since there is strong irrefutable evidence of Civil Conspiracy in committing FRAUD upon Appellant because he suffered injury of fact since (a) Allied (Mortgage Broker/Loan Company) fraudulently manipulated the facts on the mortgage application by (b) approving the mortgage on Debtor’s wife name despite her holding a temporary, seasonal and on call part-time employment of $80 per day that resulted in the stripping of Debtor’s equity, (2) the causal connection of Allied fraudulent mortgage resulted in the civil conspiracy of amongst Allied, New Century now Chase Home Finance and Deuthsche Bank National Trust via assignment in benefiting from the refinance transactions while the Appellant’s debt liability surpassed his asset that contributed to Appellant’s financial dilemma. (See United States v. Western Pacific Railroad, 352 U.S. 59, 71-73, 1 L. Ed. 2d 126, 77 S. Ct. 161 (1956); Heck v. Rodgers, 457 F. 2d 303, 307-08 (7th Cir. 1972).
Appellant states that the statutory notice of foreclosure is deficient. Thus, the foreclosure is defective for lack of compliance, failure to strictly comply with statutory requirements and material dispute of facts remained at large as a matter of law. There is no question that strict compliance with notice requirements is essential to a valid sale. Patton v. First Federal Savings and Loan Ass., 118 Ariz. 473, 578 P.2d 152 (1978).
Deutsche Bank National Trust and Chase Home Finance as assignees are subject to the rescission right to the same extent as the original mortgage originator. This is true whether or not the TILA violation on which the rescission is based was apparent on the face of the disclosure statement. 15 U.S.C.1641(c); McIntosh v. Irwin Union bank & Trust Co., 215 F.R.D. 26 (D. Mass. 2003)(holding assignee liable for rescission regardless of whether violation was apparent on face of documents).
Exhibit # 2
4. TILA Automatically Voids Security Interest
As noted by the Official Staff Commentary, the creditor’s interest in the property is “automatically negated regardless of its status and whether or not it was recorded or perfected.” (Official Staff Commentary §§ 226.15(d)(1)-1, 226.23(d)(1)-1). Also, the security interest is void and of no legal effect irrespective of whether the creditors make any affirmative response to the notice. Also, strict construction of Regulation Z would dictate that the voiding be considered absolute and not subject to judicial modification (See Badaracco v. Commissioner of Internal Revenue, 464 U.S. 386, 398, 104 S. Ct. 76, 78 L. Ed. 2d 549 (1984). This requires creditors to submit canceling documents creating the security interest and filing release or termination statements in the public record. (Official Staff Commentary §§ 226.15(d)(2)-3, 226.23(d)(2)-3)).
5. Court & TILA Violations
Once the court finds a violation such as not responding to the TILA rescission letter, no matter how technical, it has no discretion with respect to liability (In re Wright, supra. At 708; In re Porter v. Mid-Penn Consumer Discount Co., 961 F,2d 1066, 1078 (3d. Cir. 1992); Smith v. Fidelity Consumer Discount Co., Supra. At 898. (See also Family Financial Services v. Spencer, 677 A.2d 479 (Conn. App. 1996) (creditor’s failure to accept consumer’s valid rescission nullified the security interest and relieved the consumer of her obligation to lender). (See Bilad v. Household Fin. Corp. (In re Bilal), 296 B.R. 828 (D. Kan. 2003) (after security interest is voided, secured creditor becomes unsecured)). Any misgivings creditors may have about the technical nature of the requirements should be addressed to Congress or the Federal Reserve Board, not the courts.
2. Non-Compliance With TILA Strict Liability Rule
Non-compliance is a violation of the act which gives rise to a claim for actual and statutory damages under 15 USC 1640. Creditors are obligated to return those charges to Appellant (Pulphus v. Sullivan, 2003 WL 1964333, at *17 (N.D. Apr. 28, 2003) (citing lender’s duty to return consumer’s money as reason for allowing rescission of refinanced loan); McIntosh v. Irwing Union Bank & Trust Co., 215 F.R.D. 26 (D. Mass. 2003) (citing borrower’s right to be reimbursed for prepayment penalty as reason for allowing rescission of paid-off loan).
The voiding of the security interest is not a procedure, in the sense of a step to be followed or an action to be taken. The statute makes no distinction between the right to rescind in three day or extended in three years for federal and four years under Mass. TILA, as neither cases nor statute give courts equitable discretion to alter TILA’s substantive provisions. Since the rescission process was intended to be self-enforcing, failure to comply with the rescission obligations subjects creditors to potential liability as well as assignees (See Madel v. GMAC Mortgage Corp. (In re Madel), 2004 WL 4055247 (Bankr. E.D. Wis. Nov. 8, 2004) (assignee is liable for its own TIL violation if it fails to respond properly to rescission notice).
3. First Step Requirement Of TILA
First, by operation of law, the security interest and promissory note automatically becomes void and Appellant is relieved of any obligation to pay any finance or other charges (15 USC 1635(b); Reg. Z-226.15(d)(1),226.23(d)(1). See Official Staff Commentary § 226.23(d)(2)-1. (See Willis v. Friedman, Clearinghouse No. 54,564 (Md. Ct. Spec. App. May 2, 2002) (Once the right to rescind is exercised, the security interest in the Appellant’s property becomes void ab initio). (See Family Financial Services v. Spencer, 677 A.2d 479 (Conn. App. 1996) (all that is required is notification of the intent to rescind, and the agreement is automatically rescinded).
4. Second Step Requirement Of TILA
Second, the creditors must returned any money, including that which may have been passed on to a third party, such as a broker or an appraiser and to take any action necessary to reflect the termination of the security interest within 20 calendar days of receiving the rescission notice which has expired (15 USC 1635(b); Reg. Z-226.15(d)(2),226.23(d)(2)).
5. Third Step Requirement Of TILA
Appellant was prepared to discuss a tender obligation, if it had arised, and satisfactory ways in which to meet that obligation (Basnight v. Diamond Developers, Inc., 146 F. Supp. 2d 754 (M.D.N.C. 2001) (where creditor refused to cancel, borrower’s duty to return the property never arose). The termination of the security interest is required before tendering and step 1 and 2 have to be respected by creditors.
Appellant, as a judicial notice to this Court, affirmed that the creditors has forfeited the right to retain any of the loans proceeds (In re Lang, Clearinghouse No. 45,907 (D. or. Aug. 1, 1990) since negation of tender duty is appropriate where creditors did not comply with rescission notice since the fundamental duty of the court is to protect the integrity of the statutory policy. (Congress’ intended operation of the statute, as evidenced by the 1635(b) creditor-forfeiture provision, clearly calls for a ‘debtor windfall’ if the creditor does not respond to a valid rescission notice by following the statutory dictates (French v. Wilson, 446 F. Supp. 216, 220 (D.R.I. 1976)). Such a result helps to assure self-enforcement and ultimately promotes uniform compliance by creditors with the Truth-In-Lending Act.
3. TILA And Tolling
The filing of Bankruptcy tolls or extends the rescission time as Appellant had filed for bankruptcy on September 26, 2005 and obtained a discharge on September 26, 2006. Also, the principle of equitable tolling does apply to TILA 3 years period of rescission since despite due diligence, Appellant could not have reasonably discovered the concealed fact of TILA violations in-depth and explicitly until September 17, 2006 at about 5 a.m.. The equitable tolling principles are to be read into every federal statute of limitations unless Congress expressly provides to the contrary in clear and ambiguous language, (See Rotella v. Wood, 528 U.S. 549, 560-61, 120 S. Ct. 1075, 145 L. Ed. 2d 1047 (2000)). Since TILA does not evidence a contrary Congressional intent, its statute of limitations must be read to be subjected to equitable tolling, particularly since the act is to be construed liberally in favor of consumers.
Exhibit #3
By June 2002, Appellant has started a business of exporting merchandise purchased in the United States to Haiti with the DanversBank’s loan. From 2002 to September 25, 2005, much of Appellant’s energies and dominant thought were vested on how to keep himself from financial ruin by experimenting with innovative ideas and strategies to turn around his ailing business in Haiti. The business thrived until 2005 when the political climate worsened and the economical activities in Haiti came to a sudden stop or stagnation. Appellant’s cash flow was non-existent or just enough to barely meet the business operating expenses in Haiti only. Consequently, Appellant ended up depleting all his cash reserves including his pension funds for retirement to keep the business a float. Meanwhile, in the capital of Haiti, Port-au-Prince, the environment became extremely dangerous with waves of kidnapping incidences and killing aimed primarily at business people.
Thus, Appellant having realized that his life is in danger (Transcript of 12/7/05, 2:14-19), despite having invested time, money, effort and energy to say the least, Appellant chose to escape Haiti to save his life (Transcript of 12/7/05, 11:11-17), abandoned his business dreams and lost all of the money he had invested in Haiti. Therefore, Appellant found himself in difficulties to maintain his financial obligations in the United States and to provide support for his family as well.
Upon returning to the United States in July 2005, Appellant begged DanversBank to give him 3 months to find a professional job, but the bank says no, threatened to seize his property, and demanded payment in full despite knowing of his financial hardship (Transcript of 12/7/05, 15:23-25, 16:1-20. Reluctantly, Appellant was forced to file for bankruptcy (Transcript of 12/7/05, 16:16-17) and invoked the TILA right of rescission on September 21, 2006 as a defense to foreclosure to protect his property rights as new evidence which is contrary to the court statement (Transcript of 2/1/07, 10:14-18; 11:7-10; 12:11-14)
Exhibit # 4 (Pages 40 to 50)
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF MASSACHUSETTS
Pierre Richard Augustin, PRO SE )
Debtor ) C.A. No. 05-46957 (JBR)
)
) Amendment to the Motion Objecting to
) Propose Sale Of Debtor’s Property
v. ) on May 16, 2007 pursuant Rule 6004 (b)
)
DANVERSBANK, ET AL., )
Defendants. )
Amendment to the Motion Objecting to Propose Sale (docket # 169) for the consolidation of Debtor‘s Motions & ‘affirmative defense adversary proceedings’ since they are both governed by Rule 9014 with a Motion of Relevant Evidences to Support both Motions
Your Honor, “parties appearing pro se are allowed greater latitude with respect to reasonableness of their legal theories (Patterson V. Aiker, 111 F.R.D. 354, 358 [N.D. GA 1986])”. To the extent that Debtor did not confine strictly to the rules, specifically relating to formatting, Debtor respectfully apologizes to this court. In consequence, the court is supposed to judge the case based on its merits even if procedural errors are made. Therefore, the court must give a Pro Se Debtor, “every favorable inference arising from his pro se status” (Hall v. Dworkin, 829 F. Supp. 1403, 1409 (ND NY 1993).
Despite Debtor’s timely legal objections and defenses, the propose sale or ‘Illegal Foreclosure’ of his property took place on May 23, 2007. Thus, Debtor is amending his previously filed motion scheduled for the Hearing scheduled for 6/7/2007:
1. to ‘set aside the sale of the Illegal Foreclosure of May 23, 2007;
2. to consolidate his ‘affirmative defense adversary proceedings’ and the motion filed on May 11, 2007 (Docket # 169) under rule 6004(b) since they are both governed by Rule 9014 and are considered contested matter or core proceedings.
FUNDAMENTAL BASIS OF ARGUMENT
Ronald Dworkin regards law as an interpretive process under which individual rights are paramount. Therefore, let us consider the following two situation by Dworkin:
1. First Quotation by Dworkin
“An impatient beneficiary under a will murder the testator. Should he be permitted to inherit?”
2. Debtor’s Contextual Analogy of First Quotation
Chase Home Finance as an impatient beneficiary strips away Debtor’s property rights despite his timely legal objections and defenses. Should Chase Home Finance be permitted to inherit the profit by selling Debtor’s property now set for May 23, 2007?
3. Second Quotation by Dworkin
“A chess grand master distracts his opponent by continually smiling at him. The opponent objects. Is smiling in breach of the rule of chess?
4. Debtor’s Contextual Analogy of Second Quotation
Chase Home Finance blind folded their eyes and put their two hands over their ears by not answering to Debtor’s timely legal objections and defenses by maintaining silence. Debtor objects but no one is looking or listening. Is the silence of Chase Home Finance in breach of the rules of law?
5. Fraud On The Court By An Officer Of The Court As Basis To Set Aside The Illegal Foreclosure
all attorneys are considered as officers of the court. Whenever any officer of the court commits fraud during a proceeding in the court, he/she is engaged in "fraud upon the court". In Bulloch v. United States, 763 F.2d 1115, 1121 (10th Cir. 1985), the court stated "Fraud upon the court is fraud which is directed to the judicial machinery itself and is not fraud between the parties or fraudulent documents, false statements or perjury. ... It is where a member is corrupted or influenced or influence is attempted)".
"Fraud upon the court" has been defined by the 7th Circuit Court of Appeals to "embrace that species of fraud which does, or attempts to, defile the court itself, or is a fraud perpetrated by officers of the court so that the judicial machinery can not perform in the usual manner its impartial task of adjudging cases that are presented for adjudication." Kenner v. C.I.R., 387 F.3d 689 (1968); 7 Moore's Federal Practice, 2d ed., p. 512, ¶ 60.23. The 7th Circuit further stated "a decision produced by fraud upon the court is not in essence a decision at all, and never becomes final."
"Fraud upon the court" makes void the orders and judgments of that court. It is also clear and well-settled law that any attempt to commit "fraud upon the court" vitiates the entire proceeding. (See In re Village of Willowbrook, 37 Ill. App.2d 393 (1962) ("It is axiomatic that fraud vitiates everything."); Dunham v. Dunham, 57 Ill. App. 475 (1894), affirmed 162 Ill. 589 (1896); Skelly Oil Co. v. Universal Oil Products Co., 338 Ill. App. 79, 86 N.E.2d 875, 883-4 (1949)). Under Federal law, when any officer of the court has committed "fraud upon the court", the orders and judgment of that court are void, of no legal force or effect.
6. Homestead rights and Federal Rule Civil Procedure 60(b)
Debtor does not in anyway waive his homestead rights (State, ex rel., O'Brien v. Superior Court, 173 Wash. 679, 24 P.2d 117 (1933); State, ex rel., White v. Douglas, 6 Wn.2d 356, 107 P.2d 593 (1940)). Thus, the illegal foreclosure be vacated under rules allowing vacating judgments, e.g. F.R.Civ.P 60(b).
7. Analogous Cases For Basis to Set Aside the ‘Illegal Foreclosure Sale’
Anyone having an interest in the real property security, including the borrower, may restrain the non-judicial foreclosure of a deed of trust on any proper ground (See, e.g., Reiserer v. Foothill Thrift and Loan, 208 Cal.App.3d 1082, 256 Cal.Rptr. 508 (1989) (unpublished opinion); Metropolitan Life Insurance Company v. La Mansion Hotels & Resorts, Ltd., 762 S.W.2d 646 (Tex.App.1988); Bekins Bar V Ranch v. Huth, 664 P.2d 455 (Utah 1983); National Life Insurance Co. v. Cady, 227 Ga. 475, 181 S.E.2d 382 (1971); Peoples National Bank v. Ostrander, 6 Wn.App. 28, 491 P.2d 1058 (1971).
See, generally, note, Court Actions Contesting The Nonjudicial Foreclosure of Deeds of Trust in Washington, 59 Wash.L.Rev. 323 (1984); Restraining Orders in Non-Judicial Deed of Trust Foreclosures, Property Law Reporter, June 1987 (Vol. 3 Nos. 4 & 5)). Proper grounds to set aside this illegal foreclosure include: (1) there is no default on the obligation, Salot v. Wershow, 157 CA.2d 352, 320 P.2d 926 (1958) and (2) proposed conduct of the sale is defective, Crummer v. Whitehead, 230 CA.2d 264, 40 CR 826 (1964) are analogous to Debtor’s situations since he has timely and legally rescinded the mortgage per TILA.
8. Debtor’s Mortgage & Note Were Timely & Properly Rescinded per TILA
A mortgage and a note are two different documents. The note is the pledge that you will pay back the money you "borrowed" to purchase your house. The mortgage is the instrument used to establish your house as collateral. In the event you do not comply with the provisions of your note, the mortgage is the instrument used to establish the right to foreclose. The note dictates what terms and conditions fees, late charges, etc. can be imposed. The note dictates when a "default" can be declared. The note dictates when a mortgage can be accelerated. The note dictates when foreclosure proceedings can commence. The note dictates if the money must be applied to P&I first, or fees first.
The statute and regulation specify that the security interest, promissory note or lien arising by operation of law on the property becomes automatically void. (15 U.S.C. § 1635(b); Reg. Z §§ 226.15(d)(1), 226.23(d)(1). As noted by the Official Staff Commentary, the creditor’s interest in the property is “automatically negated regardless of its status and whether or not it was recorded or perfected.” (Official Staff Commentary §§ 226.15(d)(1)-1, 226.23(d)(1)-1.).
ARGUMENT
The first quotation mentioned above by Dworkin is “drawn from the New York Decision of Riggs v. Palmer in 1899. The will in question was validly executed and was in the murderer’s favour. But whether a murderer could inherit was uncertain: the rules of testamentary succession provided no applicable exception. The murderer should therefore have a right to his inheritance. The New York Court held, however, that the application of the rules was subject to the principle that ‘no person should profit from his own wrong’. Hence, a murderer could not inherit from his victim.”
According to Dworkin, in the second quotation, “the referee is called upon to determine whether smiling is in breach of the rules of chess. The rules are silent. He must therefore consider the nature of chess as a game of intellectual skill; does this include the use of psychological intimidation? He must, in other words, find the answer that best ‘fits’ and explains the practice of chess.”
Debtor is a victim of Predatory Lending (See Motion on ‘Relevant Evidences’) and Mortgage Fraud initiated by New Century Mortgage Company. Debtor’s mortgage was assigned to Chase Home Finance or Deuthsche National Trust Company. As illustrated above in Debtor’s contextual analogy, he has been injured as a result of Chase Home Finance and Deutsche National Trust’s silence and other creditors wrongdoings. However, ‘relevant new evidences’ have surfaced in the Washington Post (See Motion on Relevant Evidences) that confirm the fact that Debtor is a victim of predatory lending and mortgage fraud.
Also, according to an article entitled Mortgage fraud seen as prolonging U.S. housing slump, by Bob Ivry of Bloomberg News published on April 26, 2007 states that, "Misstatements about employment and income are being made every day," said Robert Russell, counsel to the director of the Office of Thrift Supervision, which oversees savings and loans. "The brokers are just putting down on paper what the underwriters would require.” The above mentioned article substantiate what Debtor’s has been arguing in his pleadings and motions.
1. Irrefutable Facts
Chase Home Finance and Deuthsche National Trust Company and other creditors failed to respond to Debtor’s timely TILA notice of rescission and the Mortgage Fraud issue as a defense to foreclosure. As Massachusetts is a non-judicial foreclosure jurisdiction, Debtor will lose his rights of due process, if an entry to set aside the illegal foreclosure sale by this Court is not granted. The whole purpose of the law is that New Century Mortgage, Chase Home Finance or Deuthsche National Trust Company are responsible for the harm that arise out of their act. It should not fall on the Debtor, the innocent victim of that act who have acted timely to protect his property interests.
2. Affirmative Defenses based on TILA
The first circuit court of appeals has unequivocally stated that any violation of TILA, regardless of the technical nature of the violation, must result in a finding of liability against the lender. Bizier v. Globe Financial Services, Inc., 654 F.2d 1, 3 (lst Cir. 1981). TILA is a remedial statute which is designed to balance the scales "thought to be weighed in favor of lenders," and is therefore to be liberally construed in favor of borrowers. Id. A creditor who fails to comply with TILA in any respect is liable to the consumer under the statute, regardless of the nature of the violation or the creditor's intent. Thomka v. A.Z. Chevrolet Inc., 619 F.2d 246, 249-50 (3d Cir. 1980). Even if the borrower can demonstrate no actual damages, TILA's penalties are applied regardless of whether the borrower was misled or injured. See, Griggs v. Provident Consumer Discount Co., 680 F.2d 927, 932-33 (3d Cir.), vacated on other grnds, 459 U.S. 56, 103 S.Ct. 400, 74 L.Ed.2d 225 (1982).
This strict compliance rule is what makes TILA so effective. "This strict interpretation of the TILA has largely been responsible for the TILA's success in achieving widespread compliance with its requirements." In re Brown, 106 B.R. 852, 857 (Bankr. E.D. Pa. 1989).
3. TILA and the Courts
This rule is inviolate and is followed by courts in all jurisdictions. See, e.g., Smith v. Fidelity Consumer Discount Co., 989 F.2d 896, 898 (3rd Cir. 1990)(The federal Truth in Lending Act (TILA) achieves its remedial goals by a system of strict liability in favor of consumers when mandated disclosures have not been made); Lewis v. Dodge, 620 F.Supp. 135, 138 (D. Conn. 1985); In re Porter, 961 F.2d 1066 (3rd Cir. 1992); Rowland (John M., Carol S.) v. Magna Millikin Bank of Decatur, N.A., 812 F.Supp. 875 (C.D. Ill. 1992) ("even technical violations will form the basis for liability"); New Maine Nat. Bank v. Gendron, 780 F.Supp. 52 (D. Me. 1992); Dixon v. S & S Loan Service of Waycross, Inc., 754 F.Supp. 1567 (S.D. Ga. 1990); Woolfolk v. Van Ru Credit Corp., 783 F.Supp. 724 (D. Conn. 1990) (same with Unfair Debt Collection Practices Act); Morris v. Lomas and Nettleton Co., 708 F.Supp. 1198 (D. Kan. 1989); Jenkins v. Landmark Mortg. Corp. of Virginia, 696 F.Supp. 1089 (W.D. Va. 1988); Laubach v. Fidelity Consumer Discount Co., 686 F.Supp. 504 (E.D. Pa. 1988); Searles v. Clarion Mortg. Co., 1987 WL 61932 (E.D. Pa. 1987); "Liability will flow from even minute deviations from requirements of the statute and Regulation Z." Dixon v. S & S Loan Service of Waycross, Inc., 754 F.Supp. 1567, 1570 (S.D. Ga. 1990); Shroder v. Suburban Coastal Corp., supra. at 1380; Charles v. Krauss Co., Ltd., 572 F.2d 544 (5th Cir. 1978).Shroder v. Suburban Coastal Corp., 729 F.2d 1371, 1380 (11th Cir. 1984) ; Goldberg v. Delaware Olds, Inc., 670 F.Supp. 125 (D. Del. 1987); Curry v. Fidelity Consumer Discount Co., 656 F.Supp. 1129 (E.D. Pa. 1987); Laubach v. Fidelity Consumer Discount Co., 1986 WL 4464 (E.D. Pa. 1986); In re Wright, 133 B.R. 704 (E.D. Pa. 1991); Moore v. Mid-Penn Consumer Discount Co., 1991 WL 146241 (E.D. Pa. 1991); In re Marshall, 121 B.R. 814 (Bankr.C.D. Ill. 1990); In re Steinbrecher, 110 B.R. 155 (Bankr.E.D. Pa. 1990); Nichols v. Mid-Penn Consumer Discount Co., 1989 WL 46682 (E.D. Pa. 1989); In re McElvany, 98 B.R. 237 (Bankr.W.D. Pa. 1989); In re Johnson-Allen, 67 B.R. 968 (Bankr.E.D. Pa. 1986); In re Cervantes, 67 B.R. 816 (Bankr.E.D. Pa. 1986); In re McCausland, 63 B.R. 665, 55 U.S.L.W. 2214, 1 UCC Rep.Serv.2d 1372 (Bankr.E.D. Pa. 1986); In re Perry, 59 B.R. 947 (Bankr.E.D. Pa. 1986); In re Schultz, 58 B.R. 945 (Bankr,E.D. Pa. 1986); Solis v. Fidelity Consumer Discount Co., 58 B.R. 983 (E.D. Pa. 1986).
4. HOEPA Disclosures Affirmative Defense
HOEPA disclosure notice must be delivered to Debtor at least three business days prior to the closing of the loan. 15 U.S.C. § 1639(b); 12 C.F.R. 226.31(c). The notice must inform the Debtor that he need not enter into the loan, and that if he does enter the loan, he could lose his home and any money he has put in it. 15 U.S.C. § 1639(a); 12 C.F.R. 226.32(c)(1). The notice must also include an accurate statement of APR, monthly payment and balloon payment amount, and maximum payment amount on a variable-rate loan. 15 U.S.C. § 1639(a)(2); 12 C.F.R. 226.32(c)(2)-(4); Official Staff Commentary 12 C.F.R. 226.32(c)(3)-2.
Failure to deliver the required HOEPA notice or inclusion of a prohibited term triggers an extended (three-year) right of rescission (described above). 15 U.S.C. § 1639(j); 12 C.F.R. 226.23(a)(3) n.48.; Bryant v. Mortgage Capital Resource Corp., 2002 U.S. Dist. LEXIS1566 (N.D. Ga. Jan. 14 ,2002); In re Barber, 266 B.R. 309 (Bankr. E.D. Pa. 2001); In re Jackson, 245 B.R. 23 (Bankr. E.D. Pa. 2000); In re Murray, 239 B.R. 728, 733 (Bankr. E.D. Pa. 1999). In addition to regular TILA monetary damage remedies (see above), HOEPA violations give rise to “enhanced” monetary damages under 15 U.S.C. § 1640(a)(4), namely, all payments made by the borrower. In re Williams, 291 B.R. 636, 663-64 (Bankr. E.D. Pa. 2003).
As with any TILA violation (see above), the rescission remedy runs against any assignee of the loan. 15 U.S.C. § 1641(c). In addition, where the loan documents demonstrate that the loan is covered by HOEPA coverage, assignees “shall be subject to all claims and defenses with respect to that mortgage that the consumer could assert against the creditor.” 15 U.S.C. § 1641(d)(1). This provision mirrors the FTC Holder Rule and creates assignee liability for all state and federal claims and defenses.
5. Breach of Fiduciary Duties (Trustee in the following is referring to Deutsche National Trust)
The breach proximately caused the injury to the Debtor since he was misled as to the true terms of the loan since the secure loan was a higher-than-par rate and the broker pocket a yield-spread premium (a commission on the higher rate) from the lender since it was acting as finder for New Century Mortgage. (Martin v. Heinold Commodities, Inc., 163 Ill. 2d 33, 53, 205 Ill. Dec. 443, 643 N.E.2d 734 (1994)). At the time of the closing, Debtor did know the true meaning of “yield-spread premium” on the loan documents and is a violation of RESPA.
A. “Hostility or Indifference to Rights of Debtor - In Dingus, supra, at 289, it is stated: In an action to set aside a foreclosure sale under a deed of trust, evidence showing that the trustee was hostile and wholly indifferent to any right of the mortgagor warrants setting aside the sale. Lunsford v. Davis, 254 S.W. 878 (Mo. 1923).”
B. Failure to meet these requisites may render the trustee's sale void. In Cox v. Helenius, 103 Wn.2d 383, 693 P.2d 683 (1985), the court concluded that a trustee's sale was void under circumstances where the borrower had filed an action contesting the obligation and that action was pending at the time of the trustee's sale. The action was filed after service of the notice of default but before service of the notice of foreclosure and trustee's sale.
C. Chase Home Finance transfer the note after Debtor has exercised his legal right to rescind the mortgage and the note. Thus, Deutsche National Trust Company as the trustee was not properly appointed and do not have the authority to act and foreclose on Debtor‘s property. When an eager, Deutsche National Trust Company, "jumps the gun", the actions are equally void.
6. Fraud On The Court By An Officer Of The Court and The Illegal Foreclosure based on Previously Statement provided in Federal Courts
Debtor believes in the Justice System whereby all parties whether Attorneys or individual such as myself, self-represented, will not, in any way, grossly file and provide false statements in order to achieve one’s end. The unthinkable had happened in Federal Court; Counsel for Chase Home Finance has provided, in bad faith, not only misstatements of facts but also less than candid, inaccurate and absolutely false information to mislead this court.
Based on personal ethic and principle, Debtor stands by the motto that the ‘truth will set him free’ or the truth shall prevail. For that matter, Debtor repudiated the fact that Counsel for Chase had to result to smear tactics in his March 16, 2007 Motion responding to an order of a Federal Judge as evidences that fraud upon the court and the silencing of Debtor‘s rights have been committed. Also, Chase Home Finance and Deutsche National Trust Company knowingly accepted the “fruits of the fraud” by New Century Mortgage (Moore v. Pinkert, 28 Ill. App. 2d 320, 333, 171 N.E. 73 (1960); Pulphus v. Sullivan, No. 02 C 5794, 2003 U.S. Dist. LEXIS 7080, at **61-62 (N.D. Ill. April 25, 2003)).
A. 1st FALSE and INACCURATE Statements made by Counsel of Chase in Paragraph labeled #1 of page 1
Based on the transcript on page 9, line 22-25 of the bankruptcy hearing on December 7, 2005, Attorney Robert L. Marder, of DanversBank provided documents to state their second mortgage is now the first lien holder as follows:

Excerpt on page 12, line 21-25 of the Judge’s Rosenthal statement at that hearing:

Excerpt on page 13, line 23-25 of the Judge’s Rosenthal statement at that hearing:


A full copy of the transcript of that hearing is included as Exhibits. Based on the provided excerpt of that hearing, the matter of priority has not been resolved legally. On that same day, Chase customer service department told me that if the court states that they are not in first position then Chase is not the first lien holder. However, on September 21, 2006, Debtor invoked his right of rescission per the Truth-in-Lending Act which voided the security interest of those two mortgages in his property. Thus, Counsel of Chase submitted [F]alse and Inaccurate statements to the court in bad faith and willfully despite knowing the facts.
B. 2nd FALSE and INACCURATE Statements made by Counsel of Chase in Paragraph labeled #7 of page 2
On July 3, 2006, Debtor filed a motion at the Bankruptcy Court to amend schedule B & C which was allowed with “No Objection” by the bankruptcy court (See Docket # 94). Debtor cited his civil suit, case#: 06-10368, as an asset in Schedule B and exempted it in Schedule C. According to Collier on Bankruptcy, the debtor has a right to amend the petition, lists, schedules or statement as a matter of course until the case is closed. Thus, for example, before the closing of the case, the debtor may amend the exemption schedule to include property that had been omitted (Lucius v. McLemore, 741 F.2d 125, 11 C.B.C.2d 296 (6th cir. 1984). No court approval is necessary for
an amendment filed before the case is closed (In re Michael, 163 F.3d 526 (9th Cir. 1998)).
The permissive approach to amendments has been construed to give courts no discretion to reject amendments unless the debtor has acted in bad faith or concealed property or the amendment would prejudice creditors (In re Yonikus, 996 F. 2nd 866 (7th Cir. 1993) (clear and convincing evidence of prejudice or bad faith required to deny right to amend); In re Williamson, 804 F.2d 1355, 15 C.B.C. 2d 1225 (5th Cir. 1986); In re Doan, 672 F.2d 831, 6 C.B.C.2d 306 (11th cir. 1982)). Thus, for example, the Court of Appeals for the Eight Circuit in Kaelin v Bassett (In re Kaelin), (308 F.3d, 885 (8th Cir. 2002)), allowed a debtor to amend his schedule of exemptions to claim as exempt a cause of action soon after he learned that the cause of action existed. Because the debtor acted promptly to exempt the cause of action and because the debtor had not concealed the property, the court found that no bad faith existed.
In retrospect, Debtor states that there was absolutely no objection by the Trustee or Creditors/Lenders to the motion to amend schedules and the motion was allowed by the bankruptcy court uncontested. Also, neither the Trustee nor the creditors ever filed an appeal within the 10 days or time limit. Hence, the order entered by Judge Rosenthal (See docket # 94) on July 19, 2006 was deemed final and unappealable. Thus, Counsel of Chase submitted [F]alse and Inaccurate statements to the court in bad faith and willfully despite knowing the facts.
C. 3rd FALSE and INACCURATE Statements made by Counsel of Chase in Paragraph labeled #8 on page 2
Counsel of Chase is misleading the court by stating that Debtor amendment as a matter of right according to Rule 1009 of the Bankruptcy code as long and tortured which contrary to the facts. Here are the reasons why Plaintiff had to amend his schedules according to the text docket entry of the bankruptcy court:
1. October 11, 2005 – Motion to Amend Schedules A through J, Summary of Schedules and Statements
10/11/2005 8 Motion filed by Debtor Pierre R. Augustin to Amend Schedules A-J, Summary of Schedules and Statements RE: 1 Voluntary Petition (Chapter 7)) Receipt Number 527970, Fee Amount $26. (ach, usbc) (Entered: 10/13/2005)
2. November 10, 2005 – Motion to Correct Schedules A through J, Statement of Financial Affairs and Matrix
11/10/2005
11/10/2005
3. February 17, 2006 – Motion to Amend Schedule F to add Unsecured Creditor
02/17/2006
4. April 10, 2006 – Motion to Amend Schedule F to add Unsecured Creditor
04/10/2006
5. July 3, 2006 – Motion to Amend Schedule F to add Unsecured Creditor
07/03/2006
6. July 3, 2006 – Motion to Amend Schedule B & C for Civil Suit; 06-10368
07/03/2006
7. September 21, 2006 – Motion to Amend Schedules B and C to moved Secured Creditors as Unsecured because Plaintiff’s TILA Right of Rescission has voided the security interest in his home
09/21/2006
In determining whether Debtor’s amendment would prejudice Chase or other creditors, the appropriate inquiry is not whether a creditor will recover less or be adversely affected by the amendment (Kaelin v. Bassett (In re Kaelin), 308 F.3d 885 (8th Cir. 2002); see also In re Arnold, 252 B.R. 778 (B.A.P. 9th Cir. 2000) (neither delay, by itself, nor disappointment of creditors’ expectations is prejudice)). Thus, Debtor was merely adjudicating for his right by correcting errors in his schedules, adding creditors and classifying secured creditors as unsecured note holder since TILA states that upon rescission, the security interest is void, rendering the debt, if any, unsecured (See in re Perkins, 106 B.R. 863, 874 (Bankr. E.D.Pa. 1989); In re Brown, 134 B.R. 134 (Bankr. E.D.Pa. 1991); In re Moore, 117 B.R. 135 (Bankr.E.D. Pa. 1990)). Thus, Counsel of Chase submitted [F]alse and Inaccurate statements to the court in bad faith and willfully despite knowing the facts.
D. 4th FALSE and INACCURATE Statements made by Counsel of Chase in Paragraph labeled #8 on page 2
Counsel for Chase [F]alsely and [I]naccurately stated that as follows:

Unfortunately, whether or not the attorneys for Chase like it, the facts are the facts and Debtor has included a copy of Schedule C below that clearly states that his property is claimed as exempt and his original filing (See Exhibit 2). 
According to case law, debtor has claimed his property as exempt was not objected by neither the Trustee nor the creditors. Thus, the property or claim will be deemed exempt, even if there is no basis for the exemption. (Taylor v. Freeland & Kronz, 503 U.S. 638, 643-45 (1992)). Thus, Counsel of Chase is acting maliciously by providing the court with absolutely false information.
CONCLUSION
Debtor cannot undo the damages that preceded. But, however harsh it may seems, the law provides Debtor with the right of rescission if he catches any technical violation within 3 years of the signing of the loan documents. Thus, Debtor’s TILA rescission notice was timely sent to Chase Home Finance, Deuthsche National Trust Company Lawyers’ and other creditors on September 21, 2006. Therefore, Debtor’s right of rescission has precedence, negated any foreclosure actions and voided the security interest in his property.
For that matter, Chase Home Finance and Deutsche National Trust [cannot be allowed]:
1. To profit from the Predatory Lending practices that it inherited from New Century Mortgage.
2. To remain ‘silent’ on the issues of mortgage fraud and TILA rescission.
3. To continuously defying, trampling and usurping Debtor’s rights and the rule of law
4. To commit ‘Fraud’ upon the court by approving the ‘illegal foreclosure’.
Further, given Chase Home Finance and Deutsche’s recalcitrance in refusing to honor this clearly valid assertion of federally mandated rights, it is appropriate in this instance to give effect to the clear language of §1635(b), and declare that the tender obligation has been vitiated by the lender's violation of TILA, requiring the intervention of this court in a matter which is clearly not subject to either factual or legal dispute.
Where a debtor rescinds within the context of a bankruptcy, courts have held that the rescission effectively voids the security interest, rendering the debt, if any, unsecured. See, e.g., In re Perkins, 106 B.R. 863, 874 (Bankr. E.D.Pa. 1989). See also, In re Brown, 134 B.R. 134 (Bankr. E.D.Pa. 1991); In re Moore, 117 B.R. 135 (Bankr.E.D. Pa. 1990); In re Brown, 106 B.R. 852, 862 (Bankr.E.D. Pa. 1989). The creditor would then be entitled to payment upon the same terms as other unsecured creditors.
"[O]nce the court finds a violation, no matter how technical, it has no discretion with respect to liability." In re Wright, supra. at 708; In re Porter v. Mid-Penn Consumer Discount Co., 961 F.2d 1066, 1078 (3d. Cir. 1992); Smith v. Fidelity Consumer Discount Co., supra. at 898. "Any misgivings creditors may have about the technical nature of the requirements should be addressed to Congress or the Federal Reserve Board, not the courts.
Requested Relief
WHEREFORE, the Debtor respectfully requests a Jury Trial and that this honorable Court will Grant the Objection to the Sale, Grant the Motion to Set Aside the Sale and:
a. to declare that the Debtor has validly rescinded the transaction, that the illegal foreclosure sale is therefore void and unenforceable per TILA enacted by Congress;
b. to declare that the Creditors' failure to honor the Debtor 's valid rescission notice in accordance with the dictates of 15 USC §1635 and M.G.L. c. 140D §10 vests in the Debtor the right to retain the net loan proceeds and that the Creditors has no allowable unsecured claim in this bankruptcy case;
c. to ‘set aside the sale of the Illegal Foreclosure of May 23, 2007 and award damages for wrongful foreclosures
d. to consolidate Debtor‘s ‘affirmative defense adversary proceedings’ and the motion filed under rule 6004(b) since they are both governed by Rule 9014 and are considered contested matter or core proceedings.
e. to vacate the illegal foreclosure under rules allowing vacating judgments, F.R.Civ.P 60(b).
Respectufully Submitted,

Pierre R. Augustin, 28 Cedar Street, Lowell, MA 01852, Tel; 617-202-8069
Exhibit #5

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