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A lot of the questions that come in to me relate to the issue of whether the ability to enforce a set of loan documents is a question of law or a question of fact. The answer, I think, is both.
The confusion seems to be on the issue of pleading vs proof. As a matter of law, the courts are largely correct as to their ruling on whether the Plaintiff in a judicial state is fine with alleging bare statements of ultimate facts upon which relief could be granted. But where the judges go astray, based upon improper legal reasoning advanced by the banks, is that they apply the same pleading requirements at trial or even summary judgment.
At trial they must prove the transactions upon which they rely. If the allegation from the owner or the denial and affirmative defenses of the homeowner raise an issue of fact as to the authenticity, validity or enforceability of the paperwork relied upon by the bank, then the bank must prove the underlying transaction. If the homeowner does not raise that issue of fact, then the court is correct in allowing virtually anything in as evidence and awarding the foreclosure to the bank.
But that said, to return to yesteryear, Judges are supposed to actually review the paperwork even in an uncontested situation to see if there are inconsistencies or even something that jumps out at them this is plainly wrong. for example, if the default letter says that for reinstatement, you must pay $6700 in monthly payments to bring the account current and your monthly payments are $3100, the letter is defective. How many months are they saying you are in default? It’s a simple matter of division. This also throws off the date of the alleged default, so there is no compliance with paragraph 22 provisions.
Similarly, if the foreclosing party is saying they have rights to enforce, that is enough to plead their case. But at trial they must tell the story of how they came into the right to enforce the paper. It is this latter part where the courts have erred and where the reversals from appellate courts are coming from. The presumptions at the pleading stage do not apply to the burden of proving facts.
The presumption at the pleading stage is that possession implies being a holder. And being a holder implies being a holder with rights to enforce, and potentially one might even infer that the holder is a holder in due course. But at trial where the facts are contested, the thief must tell the story of his possession and rights to enforce. The fact that the actual payee or holder does not know the note was stolen does not or should not shift the burden of proof onto the homeowner to prove facts that are exclusively within the knowledge and care, custody and control of the thief.
The homeowner must merely deny that the thief is a holder with rights to enforce.