GILBERT v. RESIDENTIAL FUNDING LLC | Borrower May Sue after Three Years To Rescind Mortgage Loan, 4th Circuit Rules

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GILBERT v. RESIDENTIAL FUNDING LLC | Borrower May Sue after Three Years To Rescind Mortgage Loan, 4th Circuit Rules

GILBERT v. RESIDENTIAL FUNDING LLC | Borrower May Sue after Three Years To Rescind Mortgage Loan, 4th Circuit Rules

JD SUPRA-

In a decision that possibly opens the door for renewed foreclosure delays, the U.S. Court of Appeals for the Fourth Circuit has held that a lawsuit seeking rescission is timely where the consumer provided notice of rescission to the subservicer within three years of closing but did not file suit until after the three-year deadline had passed.

The May 3, 2012, decision in Gilbert v. Residential Funding LLC is the first by a federal appellate court to hold that a borrower need only send notice of rescission within the three-year period to validly exercise a right to rescind.

[JD SUPRA]

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

REX T. GILBERT, JR.; DANIELA L. GILBERT, Plaintiffs-Appellants,
v.
RESIDENTIAL FUNDING LLC; GMAC MORTGAGE LLC; DEUTSCHE BANK TRUST COMPANY AMERICAS, as Trustee for Residential Accredit Loans, Incorporated, Defendants-Appellees, and
DAVID A. SIMPSON, Substitute Trustee, Trustee.

 

 

No. 10-2295.
United States Court of Appeals, Fourth Circuit. 

Argued: January 24, 2012.
Decided: May 3, 2012.
ARGUED: Katherine Suzanne Parker-Lowe, Ocracoke, North Carolina, for Appellants.Marc James Ayers, BRADLEY ARANT BOULT CUMMINGS, LLP, Birmingham, Alabama, for Appellees.ON BRIEF: Nicholas J. Voelker, BRADLEY ARANT BOULT CUMMINGS, LLP, Charlotte, North Carolina, Jonathan M. Hooks, BRADLEY ARANT BOULT CUMMINGS, LLP, Birmingham, Alabama, for Appellees.

Before TRAXLER, Chief Judge, FLOYD, Circuit Judge, and J. Michelle CHILDS, United States District Judge for the District of South Carolina, sitting by designation.

Affirmed in part, reversed in part, and remanded by published opinion. Judge Floyd wrote the opinion, in which Chief Judge Traxler and Judge Childs joined.

OPINION

FLOYD, Circuit Judge.

Rex and Daniela Gilbert appeal the district court’s dismissal of their claim that Deutsche Bank Trust Company Americas (Deutsche), as trustee for Residential Accredit Loans, Inc. (RAL); David A. Simpson (Simpson), substitute trustee; Residential Funding LLC (RFL); and GMAC Mortgage LLC (GMAC) violated various consumer protection laws in connection with a mortgage the Gilberts secured on their home, located at 134 West End Road, Ocracoke, North Carolina (the subject property). Specifically, the Gilberts allege that they are entitled to relief on account of violations of the Truth in Lending Act (TILA), 15 U.S.C. §§ 1601-1667(f), and its implementing regulation, Regulation Z, 12 C.F.R. § 1026 (previously codified at 12 C.F.R. § 226); North Carolina usury law, N.C. Gen. Stat. § 24; the North Carolina Unfair and Deceptive Trade Practices Act (NCUDTPA), id. § 75-1.1; and North Carolina’s Prohibited Acts by Debt Collectors statute, id. § 75-50. The Gilberts also claim a breach of contract and that Deutsche lacks the authority to enforce the loan.

Appellees filed a motion to dismiss, which the district court granted. The Gilberts timely appealed. For the reasons that follow, we affirm in part, reverse in part and remand for further proceedings.

I.

We review the district court’s decision granting a motion to dismiss de novo, and we view the facts in the light most favorable to the non-prevailing party. See Chaudhry v. Mobil Oil Corp., 186 F.3d 502, 504 (4th Cir. 1999).

On May 5, 2006, Rex Gilbert executed an adjustable rate note with First National Arizona to refinance the existing lien on the subject property. Pursuant to the terms of the note, Mr. Gilbert agreed to pay a principal amount of $525,000, plus interest to the bank. The Gilberts executed a deed of trust on the subject property to secure the note. As a part of the transaction, First National Arizona provided several disclosures, including a “Truth in Lending Disclosure Statement,” a “Notice of Right to Cancel,” a “Variable Rate Mortgage Program Disclosure,” a “HUD-1 Settlement Statement,” and a “First Payment Letter.”

Thereafter, according to the district court, First National Arizona transferred its interest in the Gilberts’ mortgage to First National Bank of Nevada, First National Bank of Nevada transferred its interest in the mortgage to RFL, and RFL sold its interest to Deutsche, as the trustee for RAL. Gilbert v. Deutsche Bank Trust Co. Ams., No. 09-CV-181-D, 2010 WL 2696763, at *1 (E.D.N.C. July 7, 2010). Thus, the district court stated, Deutsche, as the trustee for RAL, currently owns and holds the note and deed of trust on the subject property. Id. RFC is the master servicer and GMAC is the subservicer. Id. at *2.

The Gilberts defaulted on the loan in 2008. Subsequently, Deutsche chose Simpson as the substitute trustee of the deed of trust. Id. On March 12, 2009, Simpson filed a foreclosure action against the Gilberts in the Hyde County Superior Court.

The Gilberts’ counsel wrote a letter to GMAC dated April 5, 2009, in which she alleged several violations of TILA, provided notice that the Gilberts were rescinding their mortgage transaction, and requested that GMAC cancel its security interest in the subject property and return all consideration paid by the Gilberts. In a letter dated April 14, 2009, counsel for GMAC responded that GMAC had reviewed the Gilberts’ file and found “no basis to conclude that there were any material disclosure errors that would give rise to an extended right of rescission.” As such, counsel for GMAC stated that they would not rescind the transaction.

On June 2, 2009, the Clerk of the Hyde County Superior Court conducted a foreclosure hearing, after which she entered a June 17, 2009, order allowing Simpson to proceed with the foreclosure. According to the order, the Clerk found that Deutsche was the holder of the subject note and deed of trust and that the note evidenced a valid debt. The Gilberts appealed to the Hyde County Superior Court.

Following a de novo hearing on the matter on August 18, 2009, the superior court allowed the foreclosure proceeding to go forward. In doing so, the court relied in part on an affidavit signed by Jeffrey Stephan, a signing officer for GMAC, certifying the validity of the indebtedness pursuant to the note as well as Deutsche’s status as the current owner and holder of the note. The Gilberts appealed that decision to the North Carolina Court of Appeals.

On September 14, 2009, while their appeal was pending, the Gilberts filed suit in the Hyde County Superior Court against Appellees seeking, among other things, to enjoin the mortgage foreclosure sale and to rescind their May 5, 2006, loan. They alleged violations of TILA by Appellees. The Gilberts also claimed that Appellees violated North Carolina usury law, engaged in unfair and deceptive trade practices, engaged in prohibited debt collection acts, and breached the mortgage contract. The Gilberts further maintained that Deutsche was without authority to enforce the note because of a defect in the allonge, which granted Deutsche an interest in the note.

Appellees removed the Gilberts’ suit to the district court and subsequently filed a motion to dismiss the complaint, which the district court granted. This appeal, in which the Gilberts contest the district court’s dismissal of their TILA, usury, and NCUDTPA claims, followed. They also assign error to the district court’s determination that res judicata barred them from raising claims related to the endorsement on the allonge to the note, as well as the district court’s denial of their motion to alter or amend the judgment pursuant to Rule 59(e) of the Federal Rules of Civil Procedure.

After becoming aware that Stephan had engaged in improper affidavit practices in unrelated cases, the Gilberts filed with the district court a motion for relief pursuant to Rule 60(b) of the Federal Rules of Civil Procedure and Rule 12.1 of the Federal Rules of Appellate Procedure. In light of this new evidence, they requested that the district court file an order indicating whether it would be inclined to relieve them of its prior order dismissing their claims and its denial of their Rule 59(e) motion.

On May 3, 2011, the North Carolina Court of Appeals reversed the superior court’s decision to allow Simpson to proceed with a foreclosure sale, finding that “the record is lacking of competent evidence sufficient to support that [Deutsche] is the owner and holder of Mr. Gilbert’s note and deed of trust.” In re Simpson, 711 S.E.2d 165, 175 (N.C. Ct. App. 2011). The court was also troubled by the fact “that [GMAC] was recently found to have submitted a false affidavit by Signing Officer Jeffrey Stephan in a motion for summary judgment against a mortgagor in the United States District Court of Maine.” Id. at 173 n.2. The Gilberts subsequently supplemented their Rule 60(b) motion with a copy of the Simpson opinion.

On June 15, 2011, the district court filed an order stating that “should the Fourth Circuit return jurisdiction to this court, the court would grant the [Rule 60(b)] motion, dismiss the federal claims for the reasons stated in the July 7, 2010[,] order [dismissing all of the Gilberts’ claims], and remand all state-law claims to Hyde County Superior Court.” Gilbert v. Deutsche Bank Trust Co. Ams., No. 4:09-CV-181-D (E.D.N.C. June 15, 2011). In light of this order, the Gilberts filed a motion with us to reverse and remand the case to the district court. We denied the motion. Accordingly, we now undertake a de novo review of each of the Gilberts’ assignments of error. See Chaudhry, 186 F.3d at 504.

II.

A.

The Gilberts first argue that the district court erred in dismissing their TILA claim on the basis that they had failed to exercise their extended right to rescind in a timely manner.

In adopting TILA, Congress declared that “[i]t is the purpose of this subchapter to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit.” 15 U.S.C. § 1601(a). As such, TILA requires that a creditor make certain material disclosures at the time the loan is made. Id. § 1638(a). If the creditor fails to comply with this mandate, the borrower has the right to rescind up to three years after the transaction. Id. § 1635(f).

The Gilberts closed the loan with First National Arizona on May 5, 2006, but they did not file the instant lawsuit until September 14, 2009. They notified GMAC by letter, however, that they were exercising their right to rescind in April 2009. So, although the Gilberts did not file this lawsuit within three years of closing the loan, they did notify GMAC that they were exercising their right to rescind during that three-year time period.

There is a split of authority as to whether the borrower must file a lawsuit within three years after the consummation of a loan transaction to exercise her right to rescind, or whether the borrower need only assert the right to rescind through a written notice within the three-year period. For example, in McOmie-Gray v. Bank of America Home Loans, 667 F.3d 1325 (9th Cir. 2012), the Ninth Circuit held that “rescission suits must be brought within three years from the consummation of the loan, regardless [of] whether notice of rescission is delivered within that three-year period.” Id. at 1328. But, in In re Hunter, 400 B.R. 651 (Bankr. N.D. Ill. 2009), the bankruptcy court held that “TILA gives a consumer the right to rescind a credit transaction simply by notifying the creditor, within a specific period of time, that she intends to do so.” Id. at 659.

The district court cited American Mortgage Network, Inc. v. Shelton, 486 F.3d 815 (4th Cir. 2007), for the proposition that the Gilberts were required to file suit to exercise their right of rescission. Thus, in that the Gilberts failed to file suit until after the three years passed, the district court dismissed their rescission claim. As explained below, however, we are convinced that the Gilberts exercised their right to rescind when they sent their April 5, 2009, letter to GMAC, alleging several violations of TILA and Regulation Z, and providing notice of their rescission of the mortgage transaction. Moreover, we do not think that our prior decision in Shelton compels a contrary conclusion. Further, we disagree with the Ninth Circuit that a borrower must file a lawsuit within the three-year time period to exercise her right to rescind, as opposed simply to notifying the creditor.

We begin, as we must, with the plain meaning of the statute. “The starting point for any issue of statutory interpretation. . . is the language of the statute itself.” United States v. Bly, 510 F.3d 453, 460 (4th Cir. 2007). “We have stated time and again that courts must presume that a legislature says in a statute what it means and means in a statute what it says there. When the words of a statute are unambiguous, then, this first canon is also the last: `judicial inquiry is complete.'” Conn. Nat’l Bank v. Germain, 503 U.S. 249, 253-54 (1992) (citations omitted) (quoting Rubin v. United States, 449 U.S. 424, 430 (1981)).

In the same way, our interpretation of regulations begins with their text. Textron, Inc. v. Comm’r, 336 F.3d 26, 31 (1st Cir. 2003). “The Supreme Court has repeatedly emphasized the importance of the plain meaning rule, stating that if the language of a statute or regulation has a plain and ordinary meaning, courts need look no further and should apply the regulation as it is written.” Id. In most cases, a textual reading will be dispositive. United States v. Ron Pair Enters., Inc., 489 U.S. 235, 242 (1989). Furthermore, “absent some obvious repugnance to the statute, the . . . regulation implementing [TILA] should be accepted by the courts.” Anderson Bros. Ford v. Valencia, 452 U.S. 205, 219 (1981).

Here, we are primarily concerned with just one statute and one regulation. Section 1635(f) provides, in relevant part, the following:

An obligor’s right of rescission shall expire three years after the date of consummation of the transaction or upon the sale of the property, whichever occurs first, notwithstanding the fact that the information and forms required under this section or any other disclosures required under this part have not been delivered to the obligor . . . .

15 U.S.C. § 1635(f). Its implementing regulation, Regulation Z, states as follows:

To exercise the right to rescind, the consumer shall notify the creditor of the rescission by mail, telegram or other means of written communication. Notice is considered given when mailed, when filed for telegraphic transmission or, if sent by other means, when delivered to the creditor’s designated place of business.

12 C.F.R. § 1026.23(a)(2). Taking the plain meaning of these texts, and assuming that the words say what they mean and mean what they say, we come to the conclusion that the Gilberts exercised their right to rescind with the April 5, 2009, letter. Simply stated, neither 15 U.S.C. § 1635(f) nor Regulation Z says anything about the filing of a lawsuit, and we refuse to graft such a requirement upon them.

But what about the Shelton case that the district court relied upon in reaching a different conclusion? There, the creditor filed an action seeking a declaratory judgment that the processing of the borrowers’ home refinancing loan complied with TILA. 486 F.3d at 817. The borrowers counterclaimed, requesting damages for violations of TILA. Id. They also sought rescission and a declaration by the district court that the defendant had forfeited the loan principal pursuant to TILA. Id.

We stated that the “unilateral notification of cancellation does not automatically void the loan contract.” Id. at 821. “[O]therwise, a borrower could get out from under a secured loan simply by claiming TILA violations, whether or not the lender had actually committed any.” Id. (quoting Yamamoto v. Bank of N.Y., 329 F.3d 1167, 1172 (9th Cir. 2003)) (internal quotation marks omitted).

We must not conflate the issue of whether a borrower has exercised her right to rescind with the issue of whether the rescission has, in fact, been completed and the contract voided. The former is the concern of § 1635(f) and Regulation Z, and a borrower exercises her right of rescission by merely communicating in writing to her creditor her intention to rescind. To complete the rescission and void the contract, however, more is required. Either the creditor must “acknowledge[ ] that the right of rescission is available” and the parties must unwind the transaction amongst themselves, or the borrower must file a lawsuit so that the court may enforce the right to rescind. Shelton, 486 F.3d at 821 (quoting Large v. Conseco Fin. Servicing Corp., 292 F.3d 49, 54-55 (1st Cir. 2002)) (internal quotation marks omitted).

At this stage of the litigation, we are not concerned with whether the contract has been effectively voided. A court must make a determination on the merits as to whether that should occur. Instead, the question presented here is whether the Gilberts exercised their right to rescind with the April 5, 2009, letter. Based on the plain meaning of the applicable statute and regulation, we answer that question in the affirmative.

Appellees’ reliance on Beach v. Ocwen Federal Bank, 523 U.S. 410 (1998), is misplaced. The Beach Court did not address the proper method of exercising a right to rescind or the timely exercise of that right. Instead, in Beach, the Court looked at “whether § 1635(f) is a statute of limitation, that is, `whether [it] operates, with the lapse of time, to extinguish the right which is the foundation for the claim’ or `merely to bar the remedy for its enforcement.'” Id. at 416 (alteration in original) (quoting Midstate Horticultural Co. v. Pa. R.R. Co., 320 U.S. 356, 358-59 (1943)). The Court stated the following:

Section 1635(f), however, takes us beyond any question whether it limits more than the time for bringing a suit, by governing the life of the underlying right as well. . . . It talks not of a suit’s commencement but of a right’s duration, which it addresses in terms so straightforward as to render any limitation on the time for seeking a remedy superfluous.

Id. at 417. In other words, the three-year limitation in 15 U.S.C. § 1635 concerns the extinguishment of the right of rescission and does not require borrowers to file a claim for the invocation of that right. Thus, that the Gilberts failed to seek enforcement of their right to rescind within the three years does nothing to take away from the fact that they exercised their right of rescission within that time period.

B.

Next, the Gilberts argue that the district court’s decision to dismiss their claim for rescission on the basis that Appellees are assignees and not creditors was improper. Appellees do not appear to disagree.

Section 1641(c) states, “Any consumer who has the right to rescind a transaction under section 1635 of this title may rescind the transaction as against any assignee of the obligation.” 15 U.S.C. § 1641(c). The district court’s holding to the contrary is reversible error.

C.

According to the Gilberts, the district court also erred in deciding that all of their money damages under TILA are barred by the one-year statute of limitations. We agree.

Section 1640(e) provides a one-year statute of limitations for the filing of a suit once a violation of TILA has occurred. Id. (“Any action under this section may be brought in any United States district court, or in any other court of competent jurisdiction, within one year from the date of the occurrence of the violation.”). The alleged TILA disclosure violations occurred on May 5, 2006, but the Gilberts did not file suit until September 14, 2009. Thus, the statute of limitations for those violations has long past and the district court was correct in dismissing those claims.

But, it appears that the Gilberts’ TILA claim regarding Appellees’ refusal to honor their right to rescind was timely filed. The Gilberts sent a letter to GMAC pursuant to 15 U.S.C. § 1635(f) and Regulation Z on April 5, 2009, indicating that they were exercising their right to rescind the mortgage loan. The creditor then had twenty days to respond. Id. § 1635(b). The alleged violation of TILA occurred when GMAC sent the April 14, 2009, letter indicating that it would not rescind the loan transaction. To maintain an action for damages pursuant to TILA, the action had to be filed “within one year from the date of the occurrence of the violation.” Id. § 1640(e). Inasmuch as the Gilberts filed this lawsuit on September 14, 2009, their TILA claim for damages for GMAC’s refusal to honor their right to rescind is not time barred.

III.

Next, the Gilberts challenge the district court’s dismissal of their usury claim. Appellees make two arguments as to why the district court did not err. We are convinced by neither.

First, Appellees urge that the Gilberts’ usury claim is not ripe for adjudication. According to Appellees, to the extent that the Gilberts might be subject to pay usurious interest, given the manner in which the payment schedule is configured, they have not yet been required to pay the alleged usurious interest rate. The Gilberts counter that because the payments that they made were interest only, they were paying usurious interest with each payment. As such, according to the Gilberts, their claim is ripe. Construing the Gilberts’ allegations as true, as we must at this stage, we accept that this claim is ripe for adjudication.

Second, Appellees maintain that the Gilberts failed to plead a usury claim. According to Appellees, parties have the right to pay any interest rate to which they agree. Therefore, claim Appellees, “to survive a motion to dismiss, the Gilberts would have to allege that they never agreed to the interest rates imposed by the loan documents. On this they are silent.” We disagree.

In their complaint, the Gilberts allege that Appellees “charged and collected interest in excess of the agreed rate or limits set forth in Chapter 24 of the North Carolina General Statutes, including without limitation, the charge, collection and imposition of hidden finance charges contained in the erroneous payment schedule set forth in the Truth in [L]ending disclosure statement.”

The elements of a usury claim are as follows:

a loan or forbearance of the collection of money, an understanding that the money owed will be paid, payment or an agreement to pay interest at a rate greater than allowed by law, and the lender’s corrupt intent to receive more in interest than the legal rate permits for use of the money loaned.

Swindell v. Fed. Nat’l Mortg. Ass’n, 409 S.E.2d 892, 895 (N.C. 1991). “Where the lender intentionally charges the borrower a greater rate of interest than the law allows and his purpose is clearly revealed on the face of the instrument, a corrupt intent to violate the usury law on the part of the lender is shown.” Id. at 895-96 (quoting Kessing v. Nat’l Mortg. Corp., 180 S.E.2d 823, 827 (1971)) (internal quotation marks omitted).

No one disputes that the Gilberts have established the first two elements. We hold that the Gilberts have adequately pled elements three and four as well. Specifically, the Gilberts contend that there was a loan that was to be repaid; pursuant to the terms of the loan, they were charged an agreed upon or stated interest rate; under the repayment schedule for the loan, they were charged a higher interest rate than agreed upon or allowed by Chapter 24 of the North Carolina General Statutes; when they paid a higher interest rate, Appellees collected more than the agreed upon or allowed interest rate; and Appellees charged the higher rate with a corrupt intent. Consequently, they have properly pled a usury claim pursuant to Swindell.

Although not argued by the parties or referenced below, on remand, the district court should consider whether North Carolina General Statute Section 24-1.1A(a)(1) (“Where the principal amount is ten thousand dollars ($10,000) or more the parties may contract for the payment of interest as agreed upon by the parties . . . .”), Section 24-9(a)(3) (“`Exempt loan’ means a loan in which . . . [t]he loan amount is three hundred thousand ($300,000) or more . . . .”), and Section 24-9(b) (“A claim or defense of usury is prohibited in an exempt loan transaction.”) are applicable.

IV.

The Gilberts also urge that the district court erred in granting Appellees’ Rule 12(b)(6) motion as to their NCUDTPA cause of action. To establish a prima facie case of unfair and deceptive trade practices, a plaintiff must demonstrate the following: (1) the defendant committed an unfair or deceptive trade practice; (2) the action in question was in or affecting commerce; and (3) the act proximately caused injury to the plaintiff. Spartan Leasing v. Pollard, 400 S.E.2d 476, 482 (N.C. Ct. App. 1991). An act is unfair when it is unethical or unscrupulous, and it is deceptive if it tends to deceive. Marshall v. Miller, 276 S.E.2d 397, 403 (N.C. 1981).

In their allegations concerning their NCUDTPA claims, the Gilberts make the following complaints: usury law violations, TILA violations, and “falsely representing to be the owner and holder of [the Gilberts’] note and deed of trust.” Thus, they argue the following:

These acts and omissions proximately damaged plaintiffs, are in and affecting commerce, violate public policy, have the capacity to deceive an ordinary consumer, are unscrupulous, immoral, and oppressive, and constitute unfair and/or deceptive trade practices under [North Carolina General Statute] § 75-1.1, thereby entitling plaintiffs to three times their actual damages plus a reasonable attorney’s fee pursuant to [North Carolina General Statute] §§ 75-16 and 75-16.1.

Some of the Gilberts’ allegations concern the actions of the Appellees, and some concern the actions of the original creditor, who is not party to this lawsuit. And, although some claims in this lawsuit can be assigned, “unfair practice claims pursuant to . . . § 75-1.1 cannot be assigned,” Investors Title Ins. Co. v. Herzig, 413 S.E.2d 268, 271 (N.C. 1992). Thus, the district court properly dismissed those portions of the claims. “[A] violation of a consumer protection statute may, in some instances, constitute a per se violation of the UDTPA[,]” however. In re Fifth Third Bank, Nat’l Ass’n-Vill. of Penland Litig., 719 S.E.2d 171, 176 (N.C. Ct. App. 2011). Inasmuch as we have held that certain of the Gilberts’ TILA and usury claims should go forward, and because we are of the opinion that the Gilberts have set forth a sufficient factual basis for these claims, we hold that their unassigned NCUDTPA claims should be allowed to proceed as well.

V.

The Gilberts also contest the district court’s determination that res judicata barred them from raising issues related to the endorsements on the allonge to the note.

As the district court recognized, “[i]ssues that `the clerk of court decides at a foreclosure hearing as to the validity of the debt and the trustee’s right to foreclose are subject to res judicata and cannot be relitigated.'” Gilbert, 2010 WL 2696763, at *4 (quoting Merrill Lynch Bus. Fin. Servs. Inc. v. Cobb, No. 5:07-CV-129-D, 2008 WL 6155804, at *3 (E.D.N.C. Mar. 18, 2008)). Because the superior court affirmed the Clerk’s decision that Deutsche could enforce the note, the district court concluded that res judicata barred the Gilberts from relitigating Deutsche’s enforcement authority. Id.

But, as noted above, on May 3, 2011, the North Carolina Court of Appeals reversed the state trial court’s decision that allowed Simpson to proceed with a foreclosure sale, finding that “the record is lacking of competent evidence sufficient to support that [Deutsche] is the owner and holder of Mr. Gilbert’s note and deed of trust.” In re Simpson, 711 S.E.2d at 175. As such, res judicata no longer bars the Gilberts from litigating whether Deutsche has authority to enforce the note.

VI.

Finally, the Gilberts complain that the district court erred in denying their motion to alter or amend pursuant to Rule 59(e). Because we are reversing and remanding this case to the district court, the argument is moot.

VII.

In light of the foregoing, we affirm in part, reverse in part and remand for further proceedings.

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

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One Response to “GILBERT v. RESIDENTIAL FUNDING LLC | Borrower May Sue after Three Years To Rescind Mortgage Loan, 4th Circuit Rules”

  1. PATRICK THE PATRIOT FARRELL says:

    IN THE CIRCUIT COURT AND 20TH JUDICIAL DISTRICT
    IN AND FOR LEE CO. FLORIDA
    PATRICK LORNE FARRELL©, CONSOLIDATED CASES
    Plaintiff, possessor, Droit-Droit 07-CA-14942 AND 07-CA-16767
    vs. JUDGE FRANK PORTER
    G.M.A.C.; WELLS FARGO, MARCH 30, 2012
    IMPAC, et al, Defendants
    PATRICK FARRELL’S ANSWER TO MORTGAGE FORECLOSURE COMPLAINT, AFFIRMATIVE DEFENSES; COUNTER-CLAIMS; RES JUDICATA;
    REQUEST FOR JUDICIAL NOTICE OF IMPAC LETTERS
    1. DENIED-IN REM is void as Farrell moved the note out of this Court’s Jurisdiction in JAN 2008.
    2. DENIED- that the notice is lawful due to prior Fraud.
    3. DENIED-Farrell executed a Security on OCT 11,2005. The allegations are unknown.
    4. DENIED. Wells Fargo is not the holder, lender, mortgagee or creditor, their claims are a Fraud.
    5. Admitted. #6- DENIED. #7.DENIED. #8. DENIED. #9 DENIED. #10.ILLEGAL. #11. DENIED. #12. DENIED. #13. DENIED. #14-UNKNOWN. WHEREFORE in paragraph #14- DENIED-Entire complaint based on a Fraudulent Security claimed to be a bank Note and Mortgage.
    DEFENSES WHICH ARE CAUSES OF ACTION IN FARRELL V. GMAC, et al
    1. I incorporate by reference as if fully stated herein the entire case 07-CA-14942 filings;
    2. DEC 6,2010-Notice to the Court, Summary of the Strawman, I suggest you read this.
    3. OCT 17,2011- My Motion for Summary Judgment is conclusive of 18 years of litigation.
    4. Plaintiff, PATRICK FARRELLÓ, Secured Party Creditor, as of January 2008, has the final say for all chattel paper on earth, in relation to my NAME, TITLE and Social Security No.Any lawyer or corporate administrator, acting as a Judge, who uses my NAME to take money, title or equity against Common Law and sense, gets sued for $500,000 for Copyright Infringement for starters.
    5. Farrell filed case after spending $100,000 in one case of Mortgage Fraud as per F.S.817.545.
    6. Farrell filed State and Federal QUI TAM Complaints concerning the issues in these 2 cases.
    7. February 2012 defendant CEO’s consented to penalties from the FEDERAL RESERVE for same.
    8. March 2012, the UNITED STATES OF AMERICA sued defendants for same fraud issues.
    9. The FEDERAL RESERVE demands restitution to Farrell by WELLS FARGO and GMAC.
    10. The property is mine and Quiet Title against defendants is proper method to resolve.
    11. FRAUD DURING THE EXECUTION OF THE SECURITY,CLAIMED TO BE A NOTE
    12. July 30,2004 – BUSEY BANK made a Note for $265,000 after Farrell’s $18,000 deposit.
    13. On Aug. 29,2005- Appraisal for the property was for $465,000, based on Fraudulent comparisons.
    14. On Sept.7, 2005 the interest rate on the TILA form for the new note was for only 5.75%.
    15. Oct. 11,2005- A note was executed with PINNACLE FINANCIAL/DBA/TRI-STAR LENDING.
    16. This is not WELLS FARGO as trustee, or IMPAC FUNDING CORP. or GMAC.
    17. The amount was $286,000, and the % rate was 6.25%. Both Fraudulent inflated elements.
    18. FRAUD- Farrell’s $18,000 was stolen at closing, creating an additional loan broker fee and inflated Note, in violation of Regulation Z, which precipitated 20 inflated mortgage payments.
    19. FRAUD IN THE INDUCEMENT- Farrell was told to ignore the $18,000 theft, as the Fraudulent Appraisal for the property was for $465,000, based on Fraudulent comparisons.
    20. DURESS- Farrell was told if he did not sign the closing documents, the loan broker would sell the home to someone else, and Farrell would lose his $18,000 deposit and $10,000 in interest payments made up until the closing. So under duress Farrell signed the papers and paid the $3,000 to close.
    21. U.C.C. – ARTICLE 3 – NEGOTIABLE INSTRUMENTS-PART 3. ENFORCEMENT OF INSTRUMENTS-§ 3-305. DEFENSES AND CLAIMS IN RECOUPMENT.
    22. Except as stated in subsection (b), the right to enforce the obligation of a party to pay an instrument is subject to the following: (1) a defense of the obligor based on;
    23. infancy of the obligor to the extent it is a defense to a simple contract, DEFRAUDED BY LIES
    24. duress or illegality [$18,000 fraud] of the transaction which, under other law, [F.S.817.545] nullifies the obligation of the obligor, FRAUD VOIDS A CONTRACT-AB INITIO
    25. fraud that induced the obligor to sign the instrument with neither knowledge nor reasonable opportunity to learn of its character or its essential terms, APPRAISAL FRAUD
    26. or discharge of the obligor in insolvency proceedings; AHM CASE 07-11049
    27. (3) a claim in recoupment of the obligor [FARRELL] against the original payee [PINNACLE FINANCIAL] of the instrument if the claim arose from the transaction [CLOSING] that gave rise to the instrument; [INFLATED NOTE] but the claim of the obligor may be asserted against a transferee [WELLS FARGO] of the instrument only to reduce the amount owing on the instrument at the time the action is brought.
    28. Farrell’s “agreement” is with PINNACLE FINANCIAL, who never responded to this lawsuit. Farrell got a Default Judgment in July 2008 against PINNACLE FINANCIAL.
    LIST OF AFFIRMATIVE DEFENSES
    29. AFFIRMATIVE DEFENSE-CONTRACT VOID FOR NON-DISCLOSURE AND FRAUD
    30. The alleged note is unintelligible, unconscionable and unenforceable.
    31. Farrell was not given notice at closing as to who the real “lender” was and was therefore deprived of his right to rescission because the defendant was merely a conduit and protective layer for the real “lender” who was not registered or chartered to do business in the State of Florida as lender.
    32. I STILL want to exercise the right of rescission as soon as defendants will tell me who the real lender was. By covering up the real nature of the transaction, [Farrell’s signature alone funded the transaction] defendants deprived the homeowner of sufficient knowledge about the transaction [Security Issuer, not a “borrower”] to properly consider whether to go through with it.
    33. AFFIRMATIVE DEFENSE – FS 817.545-MORTGAGE FRAUD; RESPA, REG. Z; TILA
    34. The note amount was falsely inflated to $286,000, by stealing Farrell’s $18,000 deposit money.
    35. The interest rate was falsely inflated to 6.25% from the correct amount of 5.75%.
    36. AFFIRMATIVE DEFENSE- FRAUD IN THE INDUCEMENT,HOEPA
    37. The appraisal was Fraudulently made to $465,000 using in-comparable properties, inducing Fraud.
    38. AFFIRMATIVE DEFENSE- GAAP; FAS 140; HJR-192, U.C.C.
    39. Farrell’s signature alone created the Credit used to fund the loan, due to Fractional Reserve Banking, the bank uses said note to create an account FOR FARRELL, and an asset on it’s books, and writes a liability for that amount, due back to Farrell, and PINNACLE or IMPAC owes Farrell the $283,000 note amount. There is no debt and Wells Fargo is no party in interest.
    40. SEE AFFIDAVITS on file June 1,2008, June 15, 2009, June 29,2009 Dec. 6,2010, Dec. 5,2011.
    41. “An un-rebutted Affidavit, stands as Truth in Commerce.” Maxim of Law.
    42. See Jerome Daly vs. First National Bank of Montgomery,Dec.9,1968.
    43. Bank lent credit not money, court agreed that bank deserved nothing in return. Never overturned!
    44. The president of the Bank admitted that the Bank created the money “out of thin air” and credit upon its own books by which it acquired or gave as consideration for the Note; that this was standard banking practice, that the credit first came into existence when they created it; that he knew of no United States Statutes which gave them the right to do this. This is the universal practice of these Banks. This is the first time the question has been passed in the United States.
    45. AFFIRMATIVE DEFENSE- REMIC AND SECURITIES FRAUD
    46. There was no loan, Farrell was steered into an Investment Contract as an undisclosed investor, 3rd
    party beneficiary, using Farrell’s Note, same as money, to finance said Investment Co.[IMPAC-2005-2] in the amount of $627,000, the total of the $283,000 note and 30 years of interest.
    47. I, the homeowner, without consent or knowledge, was converted from a borrower to a securities issuer; and the investor was converted from being a part owner in a valid REMIC pool, to being
    the buyer of the security issued by the homeowner. Non-disclosure Voids “contract.”
    48. Once the REMIC [IMPAC SECURED ASSETS 2005-2] containing Farrell’s note was formed, the note was converted into a security stock owned by thousands of investors of Wall Street.
    49. Because of IRS code 860, WELLS FARGO Trustee is not the real and beneficial party in
    interest because the REMIC does not own the Note, the shareholders do.
    50. Since the note went into default, it was written off by the REMIC and received tax credits from
    the IRS, and was therefore discharged, and settled, destroying the Note forever.
    51. Since the note was sold and securitized into stock, WELLS FARGO can no longer claim that it is a real party in interest, or that the note stills exists since double dipping is securities fraud.
    52. The Promissory Note, by conversion into stock, was extinguished as a collateralized asset and therefore the Trust secures absolutely nothing and WELLS FARGO, not being the real party in interest, has no standing to foreclose on Farrell, warranting dismissal.
    53. PINNACLE allegedly endorsed the note to IMPAC, who allegedly sold it to a REMIC. They then lost the ability to assign the Mortgage or the Note. It was no longer the party of interest.
    54. After securitization, the Note cannot be re-attached to the Mortgage through assignment.
    55. The original Note had to be destroyed upon securitization because the Note and the stock cannot exist at the same time. Under the terms of the Pooling and Servicing Agreement a note in default CANNOT be put into the trust, after trust closed, as defendant has tried to do.
    56. The proper parties would be the investors but they have no recorded interest in the Mortgage, which was never delivered to the Trustee Wells Fargo, therefore the note discharged.
    57. Today, with the advent of securitization these Special Deposits are truly investment contracts [Mortgage NOTE sold out-right to generate profit] and the undisclosed investor [FARRELL] has possession rights to the profits generated from said Mortgage NOTE.
    58. Generally, undisclosed investor is unaware of the moneys due, and it abandons the right to receive said funds when Maker fail to make a claim to said funds within three years.
    59. I have not abandoned these funds, as I filed case 07-CA-14942 in November 2007, within 3 years of closing on Oct. 2005, and claimed said funds are MINE=$283,000 amount of note.
    60. AFFIRMATIVE DEFENSE –FRAUD-UNJUST ENRICHMENT-NON DISCLOSURE
    61. Farrell was not told his Note [same as $283,000 in Money] would be used [without valuable consideration] as up front value to be sold, or used as collateral for a MBS, or used in Fraud.
    62. The note was allegedly endorsed to IMPAC FUNDING, who then engaged in securities and foreclosure fraud and lawsuits for same, by the UNITED STATES and consent Orders from the FEDERAL RESERVE to the CEO’s of Wells Fargo and GMAC to settle with homeowners.
    63. AFFIRMATIVE DEFENSE – FRAUD
    64. On Jan. 23rd, 2006, IMPAC SECURED ASSETS 2005-2 filed a Form 15-D with the S.E.C., notifying all parties of its Termination of Registration and suspension of its Duty to File Reports
    under the Securities and Exchange Act of 1934 (15 U.S.C.A. §§ 77a ;78a , went out of business.
    65. There is no legal way for WELLS FARGO, as “trustee” of said dead MBS, to foreclose.
    66. AFFIRMATIVE DEFENSE-SECURITIES FRAUD; REMIC FRAUD
    67. IRS Publication 938 lists existing MBS, since 2007, the IRS states:
    68. WELLS FARGO BANK N.A. AS TRUSTEE UNDER THE POOLING AND SERVICING AGREEMENT RELATING TO IMPAC SECURED ASSETS CORPORATION, MORTGAGE PASS THROUGH CERTIFICATES, SERIES 2005-2, DOES NOT EXIST AND WELLS FARGO, IMPAC OR GMAC CANNOT FORECLOSE!
    69. AFFIRMATIVE DEFENSE – FRAUD- BREACH OF CONTRACT,HOEPA
    70. The monthly payments from Oct. 2005 to Dec. 2006 were inflated by $300, due to Fraud.
    71. In Jan. 2007, GMAC falsely inflated Farrell’s payments by $700 due to forced placed insurance.
    72. AFFIRMATIVE DEFENSE – FRAUD-UNJUST ENRICHMENT
    73. On August 6,2007 American Home Mortgage filed bankruptcy and the Wells Fargo MBS was discharged. No permission to foreclose on discharged asset notes in the MBS was granted by the
    Court. 4,000 boxes of loan documents were destroyed, nullifying Wells Fargo’s case.
    74. AFFIRMATIVE DEFENSE – U.C.C.; HJR-192; GAAP; FAS 140-PRIVATE TRUST
    75. On JAN.9, 2008, Farrell filed SOVEREIGNTY DOCUMENTATION seizing said property.
    76. DEC 5,2010-See case filing-NOTICE TO THE COURT-SUMMARY OF THE STRAWMAN
    77. AFFIDAVIT OF TRUTH- nullifies all previous adhesion contracts and power of attorney.
    78. SECURITY AGREEMENT-The “mortgage” which secures the property as collateral to Farrell.
    79. HOLD HARMLESS AND INDEMNITY AGREEMENT- all property exempt and private.
    80. COMMON LAW COPYRIGHT AGREEMENT- $500,000 fine for use of my NAME in court.
    81. POWER OF ATTORNEY- I am in charge of all commercial/corporate affairs, not anyone else.
    82. THE U.C.C.-1 FINANCING STATEMENT- The Assignment of Mortgage to the original owner and title holder of all property against the trade name on the Birth Certificate.
    83. UCC 9-105 states: “’Security agreement’ means an agreement which creates or provides for a security interest.” Black’s 6th states: “An agreement granting a creditor a security interest in personal property, which security interest is normally perfected either by the creditor taking possession of the collateral or by filing financing statements in the proper public records.”
    84. Farrell’s Security Agreement filed in the Commercial Registry is a binding, sealed contract between DEBTOR and Secured Party which includes, an itemization of the property/collateral the DEBTOR has pledged to the Secured Party. All the property belongs to the DEBTOR but the Secured Party holds all interest in it. Since the DEBTOR has pledged all of DEBTOR’S property/collateral to the Secured Party, and a binding contract is filed registering and recording that agreement and the Fidelity Bond posted by the DEBTOR to indemnify the Secured Party against loss, no third party [WELLS FARGO] is able to state a claim upon which relief can be granted against DEBTOR or any of the property pledged by DEBTOR to Secured Party. All commercial affairs are the province of and interactions of commercial entities with, the DEBTOR, as per the text in one’s UCC-1 “All proceeds, products, accounts, and fixtures, and the Orders therefrom, are released to DEBTOR.” MY DOCS ARE 1 YEAR AHEAD OF DEFENDANTS.
    85. The Certificate of Indebtedness [SUBJECT NOTE] was stamped this way, and sent to Wells Fargo and the United States Treasury for settlement. Insurance and TARP funds discharged the claim.
    86. AFFIRMATIVE DEFENSE – PAYOFF BEFORE WELLS FARGO FILED PAPERS
    87. UNIFORM COMMERCIAL CODE, section 3-302. HOLDER IN DUE COURSE.
    88. Subject to subsection (c) and Section 3-106(d), “holder in due course” means the holder of an instrument if the holder took the instrument (i) for value, …and (vi) without notice that any
    party has a defense or claim in recoupment described in Section 3-305(a).
    89. On November 14,2007,FARRELLÓ filed this case, describing numerous counts of Fraud.
    90. On December 7,2007,WELLS FARGO responded by filing case knowing of the Fraud.
    91. On Dec.22,2007, I took the instrument for value on a UCC-1- INSTRU #2008000017999.
    92. On January 9,2008 I filed all my “SOVEREIGNTY DOCUMENTATION” into this case file.
    93. On Jan.22, 2008, I filed a UCC-1 LIEN for $400,000 INSTRU #2008000018000, along with a BILL OF EXCHANGE discharging the purported debt sent to Wells Fargo and the US Treasury.
    94. AFFIRMATIVE DEFENSE- U.C.C. SETTLEMENT BY BILL OF EXCHANGE
    95. In February 2008, Farrell directed WELLS FARGO to the Treasury to receive satisfaction of any Indebtedness, using a Bill of Exchange. Wells Fargo got TARP funds from this.
    96. In April 2008, WELLS FARGO failed to provide the court with any PROOF OF CLAIM.
    97. Farrell filed a NOTICE OF DEFAULT with the court. “Debt” issue settled.
    98. AFFIRMATIVE DEFENSE- SECURITIES AND MORTGAGE FRAUD
    99. On July 1, 2008, a subsidiary of Bank of America completed the merger with Countrywide
    Financial, an alleged underwriter of this subject MBS defendant but was never formed.
    100. After using Farrell’s note for payment through Credit Default Swap Insurance and TARP funds, Bank of America gave the note to Wells Fargo to use to steal Farrell’s home.
    101. On November 7, 2008, after obtaining the necessary consents and approvals, in exchange for $1.76 billion, Countrywide Home Loans sold Bank of America substantially all of its remaining assets. Second, in exchange for promissory notes of approximately $3.6 billion Bank of America acquired 100 percent of Countrywide Financial’s equity interest in various subsidiaries.
    102. On Nov. 26,2008 WELLS FARGO falsely claimed it filed “Original Note and Mortgage,”
    · after Bank of America claimed ownership of assets and liabilities including this note,
    · after the note was discharged in bankruptcy, and B of A got TARP funds
    · after the note was destroyed. WELLS FARGO and GMAC claim is simply a Fraud.
    103. COUNTRYWIDE was sued herein, and argued the note was not put into the trust, and was dismissed as a defendant in this case, leaving PINNACLE as the only party who could foreclosure.
    104. AFFIRMATIVE DEFENSE-MORTGAGE FRAUD; R.I.C.O.
    105. LOST NOTE AFFIDAVIT- WELLS FARGO Falsely claimed the note was lost. All notes were destroyed as per attorney Virginia Townes representing 300 FBA banks, speaking before the Fl. Supreme Court on 09/29/2009. All mortgages were scanned into MERS, which bifurcated the note from the mortgage. B of A used the note for payoff through TARP, insurance, defendants used the mortgage to collect again through a foreclosure, which is FS 895, Racketeering.
    106. ASSIGNMENT OF MORTGAGE- Does not Assign the Note or the debt thereby.
    107. Assigned from PINNACLE to IMPAC 2005-2, both companies are NOT members of MERS, and cannot Assign by MERS. It claims to be effective as of NOV 21,2007, which is the date Farrell served GMAC with this lawsuit, thereby evincing, the defendants Mortgage Foreclosure Complaint, is a reaction to Farrell’s complaint, that has been ignored.
    108. IMPAC was out of business, cannot assign anything, this document is a Fraud on the Court.
    109. The assignment was filed in this case on January 13,2009, 3 years AFTER the MBS closed.
    110. It is a violation of the PSA to bring a defaulted note into the alleged trust, so this is Void.
    111. The Mortgage cannot be assigned by MERS VP, and GMAC ROBO-signer, Jeffrey Stephan.
    112. The address listed thereon is actually the address of GMAC, not WELLS FARGO.
    113. See Fl. 6th Circuit- U.S.BANK as Trustee, vs. Ernest Harper, #51-2007-CA-6684ES.
    114. Assignment and case dismissed WITH prejudice, attorney’s fee’s granted.
    115. AFFIDAVIT OF AMOUNTS DUE AND OWING signed by ROBO signer Jeffrey Stephan ignored the $18,000 and $7,000 theft by plaintiff, that is the subject of related case 07-CA-14942.
    116. Stating-“For Value Received” was one year AFTER [JAN 13,2009] Farrell filed his Accepted For Value documentation on JAN 9,2008. See UCC-3-302.
    117. GMAC was sanctioned for this on May 1st of 2006 from a case filed in 2004.
    118. FL. 4TH JUDICIAL CIRCUIT-Case 16-2004-CA-4835; TCIF REO2,LLC plaintiff vs. MARTIN LEIBOWITZ defendant –ORDER GRANTING MOTION FOR SANCTIONS.
    119. Despite a Court Order to stop submitting false testimony in AFFIDAVITS OF INDEBTEDNESS and resulting Monetary Sanctions, GMAC continued ROBO-SIGNING, and to a larger degree. ORDERED AND ADJUDGED -Motion for sanction granted; Affidavits stricken; Plaintiff to pay attorney’s fee’s, but ALSO; GMAC required to confirm that Affidavits filed in future foreclosure actions accurately memorialize the actions and conduct of the Affiants.
    120. AFFIRMATIVE DEFENSE- QUI TAM RELATOR-WHISTLEBLOWER
    121. On February 10, 2012, three years AFTER Farrell exposed the Mortgage industry as a colossal Fraud, the FEDERAL RESERVE BANK, issued public notice of massive financial penalties, for ISSUES FARRELL HAS BEEN COMPLAINING ABOUT IN THE QUI TAM COMPLAINTS, AND STATE AND FEDERAL LAWSUITS SINCE 2007.
    122. ALLY BANK, [formerly GMAC] Docket No. 12-006-CMP-HC and DEO; was fined by the FED for $310,000,000, for ILLEGAL ACTIONS pled by Farrell since 2007.
    123. BANK of AMERICA [Countrywide] Docket No. 12-007-CMP-HC, was fined $175,500,000, with other issues of “Hard Money Payments” totaling $10.5 billion, for ILLEGAL ACTIONS
    124. WELLS FARGO Docket No. 12-010-CMP-HC, fined $87,000,000, other issues of “Hard Money Payments” totaling $5 billion, for ILLEGAL ACTIONS pled by Farrell since 2007.
    125. UNITED STATES OF AMERICA has sued the same parties for Foreclosure abuses.
    126. March 19, 2012- Susanne Killian of the FEDERAL RESERVE BOARD OF GOVERNORS, spoke before the Committee on Oversight and Government Reform, and stated that GMAC, WELLS FARGO and BANK OF AMERICA, were required to compensate homeowners such as Plaintiff Patrick Farrell, for foreclosure abuses, which precipitated from note origination abuses.
    127. COUNTER CLAIMS FOR DAMAGES
    128. Farrell incorporates by reference, as if fully stated herein, the entire case filings;
    129. The averments in the 4th Amended Complaint filed on NOV.30, 2009 ;
    130. COUNT 1: HOME OWNERSHIP EQUITY PROTECTION ACT
    131. COUNT 2: REAL ESTATE SETTLEMENT PROCEDURES ACT
    132. COUNT 3: VIOLATIONS OF FEDERAL TRUTH-IN-LENDING ACT
    133. COUNT 4: VIOLATION OF FAIR CREDIT REPORTING ACT
    134. COUNT 5: FL. DECEPTIVE AND UNFAIR AND TRADE PRACTICES ACT
    135. COUNT 7: FRAUDULENT MISREPRESENTATION
    136. COUNT 8: BREACH OF FIDUCIARY DUTY
    137. COUNT 9: UNJUST ENRICHMENT
    138. COUNT 10: CIVIL RICO
    139. COUNT 11: FRAUD
    140. COUNT 12 VIOLATIONS OF TILA-RESPA-15 U.S.C.
    141. The Memorandum for the 4th Amended Complaint filed on APR.6, 2010, and
    142. The Motion for Summary Judgment filed on OCT 17,2011 and;
    143. Farrell’s Sovereignty Documentation filed in JAN 2008, with UCC-1 liens.
    144. I own the TITLE PATRICK FARRELLÓ, that began with the Birth Certificate.
    145. I am the Corpus, the grantor, the equity behind any and every piece of paper, on earth, with respect to my NAME, signature and/or Social Security number, formerly enjoined into Admiralty/Maritime/Corporate Jurisdiction. My NAME carries the right to extend credit.
    146. I AM in charge of the rights to TITLE, which is PATRICK FARRELLÓ.
    147. My JAN 2008 SOVEREIGNTY DOCUMENTATION includes all the contracts, averments and Affidavits, required to establish my Secured Party Creditor Status, revoking any and all claims made by any and all corporations, administrators [Judges] and their lawyers.
    148. THERE WAS NO LOAN, THERE IS NO DEBT, THERE IS NO PROPER PARTY BEFORE THE COURT, TO CLAIM ANY DAMAGE, OTHER THEN PATRICK FARRELL.
    149. RES JUDICATA- FORMER CASES INVOLVING FARRELL HAVE SAME ISSUES
    150. JUDGE JOHN DOMMERICH IS A PERFECT EXAMPLE OF LAW AND ORDER
    151. On June 20, 1993, Carl Woodham, a high ranking member of ISKCON, who worked with and for Alfred Ford, the wealthiest ISKCON member in the world, and the great grandson of Henry Ford, came to Ft.Myers, went into a pool with a 5 year old girl, who asked to squeeze his penis, then fled. The Law states that he at the scene [CARL WOODHAM] is the perpetrator. So……
    152. A fraud based Affidavit was made by the Sheriff blaming Farrell, which caused JUDGE JOHN DOMMERICH to have Farrell arrested. State Attorney Melissa Skeen, filed charges, costing Farrell $20,000, and was fired. The sheriff was also fired.
    153. JUDGE JOHN DOMMERICH in case 96-1990, ruled in favor of Farrell, reversing the arrest.
    154. JUDGE ISAAC ANDERSON threw out all the states evidence, Farrell was acquitted.
    155. The accusers [ISKCON] due to my complaining were subject to arrests, a $400 million lawsuit by 100 victims of child sex abuse, defaulted on said suit, and filed Bankruptcy.
    156. I SUED the STATE OF FLORIDA who then ordered ISKCON to create their own Child protection team, which cost ISKCON $2 Million for the first 3 years, [1999 to 2002].
    157. I SUED the IRS, and then the United States Bankruptcy Trustee in California and West Virginia, settled with ISKCON for $20 Million, all thanks to MY QUI TAM complaints.
    158. An Affidavit in support of a Fraud based Promissory Note, or a STATE Charging Information are the same thing: Counterfeit Money, which cost Farrell $20,000 each time.
    159. CEO John Stumpf and Alfred Ford are REPUBLICANS, being served by STATE OF FLORIDA REPUBLICANS. These cases are political, not Legal. In all cases the “perps” were fined. Before by the IRS and Bankruptcy Court, and now by the U.S. Atty’s. Office and the FED.
    160. In both cases the attorney’s serve rich REPUBLICANS, Court punishes them financially.
    161. When I intervene the Law is followed and sanctions were imposed upon the guilty.
    162. This is why I AM SOVEREIGN. Misuse my name, take equity and I will sue anyone.
    163. Farrell honestly earned the $100,000 that he put into this project, and was victimized by Fraud.
    164. Wells Fargo put in nothing, shuffled dead, discharged, fraud based debt paper, and have failed.
    165. Justice and the Federal Reserve Board requires defendants be sanctioned.
    166. The defendants herein are Predators who forced me to sign fraudulent papers after investing $28,000 into this home. ISKCON are Predators who molest weak innocent children.
    167. Predation doesn’t fly with me, the Federal Reserve, the USA, or the Law. Quiet Title.
    DEMAND FOR JUDICIAL NOTICE OF ATTACHED IMPAC LETTERS
    168. Defense Counsel has falsely claimed that they represent IMPAC.
    169. On JAN 27, 2010 Farrell noticed the Court and IMPAC of Default.
    170. In 2010 IMPAC sent Farrell letters saying they were the “holder” of the mortgage.
    171. In 2011, IMPAC sent Farrell letters and said they were the “master servicer” of the mortgage.
    172. In FEB 2012, IMPAC sent Farrell letters now falsely claims it is the “funder” of the mortgage.
    173. Take Judicial Notice of the attached letters from IMPAC dated 02/06/2012 and 02/13/2012.
    174. This appears to be an attempt to aid in selling the property in a short sale.
    175. IMPAC Mortgage is not part of any paperwork in this case since it began in 2004.
    176. If IMPAC is represented by counsel, what are they doing sending me letters and offers to sell?
    177. If IMPAC Mortgage is the “original funder” why is GMAC acting as WELLS FARGO trying to foreclose? IMPAC, GMAC, and WELLS FARGO are not the same entity.
    178. If the note went into an MBS, then Bank of America, as successor of COUNTRYWIDE is or was the holder, due to COUNTRYWIDE’s involvement as a “loan originator.”
    179. WHEREFORE, I move the Court to;
    180. ORDER WELLS FARGO to pay Farrell $400,000 for his UCC claim and lien; or
    181. Order IMPAC FUNDING to repay Farrell $283,000 for his note and legal fees.
    182. Grant Judgment and relief by way of release of the lien of WELLS FARGO, Quiet the Title to the home that is the subject matter of this case, and further;
    183. ORDER that the Note and Mortgage INSTRU # 2005000110952 in the amount of $ 283,000 dated October 11,2005, shall be and the same is hereby cancelled, voided, nullified, set aside and is of no further force and effect; and further;
    184. ORDER that IMPAC and WELLS FARGO, its successors and assigns are hereby barred, prohibited and foreclosed from attempting, in any manner, directly or indirectly, to enforce any provision of the aforesaid Note and Mortgage or any portion thereof as against Patrick Farrell;
    185. ORDER that the Clerk of Lee County shall cause a copy of this Order & Judgment to be filed in the Land Records so as to effectuate of record; each and every one of the provisions hereinabove
    set forth with respect to cancellation of the instruments and items of record; and further;
    186. ORDER that WELLS FARGO shall pay to the Clerk within ten (10) days from the date of entry hereof, any and all fees and costs required to effect cancellation of record of the Note and Mortgage, and any other fees so levied; and serve a copy of the Order upon the Clerk of Lee County and Patrick Farrell.
    187. ORDER that the Certificate of Title of the subject property to be given to Farrell, free and clear of any and all liens and encumberances.
    188. ORDER attorney’s fees to honor Farrell’s contract for Power Of Attorney made in January 2008, and any other fee’s for services of anyone aiding in this cause.
    189. MEMORANDUM OF LAW
    1. F.S. 817.545 MORTGAGE FRAUD
    2. …the term “mortgage lending process” means the process through which a person seeks or obtains a residential mortgage loan, including…application or origination…third-party provider services, underwriting, signing and closing, and funding. Documents involved in include, mortgages, uniform residential loan applications, appraisals; HUD-1’s.
    3. Plaintiff has pled the misuse of these documents as a basis of this complaint.
    4. A person commits the offense of mortgage fraud IF with the intent to defraud, the person knowingly: (a) Makes any material misstatement, misrepresentation, or omission during the mortgage lending process with the intention that it will be relied on by a mortgage lender, borrower or any other person or entity involved in the mortgage lending process;
    5. THE $18,000 and $7,000 FRAUD,ERROR of Plaintiffs deposits warrants Rescission.
    6. Uses or facilitates the use of any material misstatement, misrepresentation, or omission during the mortgage lending process with the intention that it will be relied on by a mortgage lender, borrower or any other person or entity involved in the mortgage lending process.
    7. Receives any proceeds [$18,000] or any other funds in connection with the mortgage lending process that the person knew resulted from a violation of paragraph (a) or paragraph (b).
    8. All defendants have used the $18,000 error and the resulting note to their benefit, yet fail to acknowledge the predicate for their benefit. Their motions are filled with half truths.
    9. Files or causes to be filed with the clerk of the circuit court for any county of this state a document involved in the mortgage lending process which contains a material misstatement, misrepresentation, or omission.
    10. All filings by defendants with the amount of $283,000 and not $265,000 are violations.
    11. F.S. 772.102 Definitions.:CIVIL REMEDIES FOR CRIMINAL PRACTICES
    12. “Criminal activity” means to commit, attempt, conspire, or solicit another person to commit: (a) Any crime chargeable by indictment or information under the following provisions: j
    13. 22. Chapter 817, relating to fraud generally, including, the mortgage lending process.
    14. Prohibited activities.–It is unlawful for any person:
    15. Who has with criminal intent received any proceeds derived, from a pattern of criminal activity or through the collection of an unlawful debt to use or invest in the acquisition of any title to, or any right, interest, or equity in, real property.
    16. Through …the collection of an unlawful debt, to acquire… any interest in or control of any real property. An interest in any mortgage shall be considered an interest in real property.
    17. Employed by, or associated with, any enterprise to conduct or participate, in such enterprise through a pattern of criminal activity or the collection of an unlawful debt.
    18. F.S. 772.104 – CIVIL CAUSE OF ACTION
    19. Any person who proves by clear and convincing evidence that he has been injured by reason of any violation of the provisions of s. 772.103; shall have a cause of action for threefold the actual damages sustained, attorney’s fees and court costs in the trial and appellate courts.
    20. RACKETEERING- Definitions.–As used in ss. 895.01-895.08, the term:
    21. “Racketeering activity” means to commit, to attempt to commit, to conspire to commit…
    22. Any crime that is chargeable by indictment or information under the following provisions of the Florida Statutes: Chapter 817, relating to fraudulent practices, false pretenses, fraud generally. Chapter 896, relating to offenses related to financial transactions.
    23. “Enterprise” means any individual,, partnership, corporation, business trust, union chartered under the laws of this state, or other legal entity… and it includes illicit as well as licit enterprises and governmental, as well as other, entities.
    24. Defendants, their lawyers, law firms, judges, clerks are all included in this case.
    25. “Pattern of racketeering activity” means engaging in at least two incidents of racketeering conduct that have the same or similar intents… and that the last of such incidents occurred within 5 years after a prior incident of racketeering conduct.
    26. Monthly collecting of inflated “payments,” based on inflated note/Security
    27. F.S. 896.101 MONEY LAUNDERING
    28. (8)(a) If a person is disposing of monetary instruments… or appears likely to, or demonstrates an intent to dispose of monetary instrument… the petitioner may commence a CIVIL ACTION in any circuit court having jurisdiction where such monetary instruments…are located for a temporary injunction to prohibit any person from disposing of any such monetary instruments… The temporary injunction will be obtained pursuant to F.R.C.P. 1.610. FORECLOSURE of fraud based, discharged paper.

    I HEREBY CERTIFY THAT A TRUE AND CORRECT COPY WAS SENT TO COUNSEL
    BRADLEY ARANT-100 N. TRYON St. #2690-CHARLOTTE, NC 28202

    __________________________________
    Patrick Lorne Farrell in Propria Persona
    Attorney In Fact/ Sovereign/Secured Party Creditor
    signed “without the united states” and without prejudice/UCC 1-308
    UCC-1 Filing # 2007-356-2344-8 [12/22/07]-Wash. St. -DOL
    2904 NW14th Terrace-Cape Coral, Fl. 33993

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