Mills Response To First Horizon's Motion To Dismiss

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Foreclosure Fraud Response to First Horizon's Motion to dismiss I am an attorney who has taken “produce the note” one step further. I am current on my mortgage, and actually what prompted me to take the action I am taking is that I had paid off my second mortgage but my lender refused to surrender my paid off second mortgage note. My lender also refused to prove to me that it had my first mortgage note or that it had the authority to make payment demands. So I decided to sue my lender. I decided that if the “produce the note” strategy was working for people who were in default, it would work for those who are not in default. If the bank doesn’t have the right to foreclose, it doesn’t have the right to demand payment either. The Uniform Commercial Code is the homeowner’s best friend. UCC 3-501 requires a lender to “exhibit the note” when the lender makes demand for payment, and the borrower demands to see the note. Technically a demand for payment occurs every month, and it also occurs when a bank begins foreclosure proceedings. UCC 3-501 also requires a servicer to show authority to make a demand for payment, if it does not own the note, but is merely servicing it. In the event a noteholder or servicer or will not exhibit the note or perform other legal requirements when requested to do so by the borrower, this UCC section allows the borrower to discontinue payments WITHOUT DISHONOR until such time as the noteholder or servicer complies with all laws or contract provisions. Also helpful is UCC 3-309. UCC 3-309 requires the lender go through certain steps to prove up a note (make it enforceable) that is lost or destroyed. This is not easy for the lender to do, if one is willing to contest everything the lender does to try to prove up the note. This proof takes witnesses, who may not be able to say what the law requires, if the witnesses are thoroughly cross-examined. (Tip: Don’t let the lender get by with self-serving affidavits; take their witnesses’ depositions). Moreover, this section requires the lender to give adequate protection in the event the lender can make the lost note enforceable. That may be difficult for a lender that is under FDIC scrutiny and whose stock is in the tank. I filed suit in March and so far my lender has vigorously put off answering my suit with what I believe was a meritless motion to dismiss, but has not yet produced either note, and has confirmed my unpaid note was sold to Fannie Mae. This is clearly a justiciable controversy as will be clear when I ask the court to allow me to put my future payments into the registry of the court until the note is proven up and authority to make demand is proven. If the bank really believed it had the evidence to compel me to pay, it would have gladly produced the note by now with proof of authority to demand payment. They have steadfastly avoided having to do this. Chances are the note is lost or destroyed. It gets even better. MERS is the sole beneficiary of my Deed of Trust (quite often the case for homeowners on Deeds of Trust since 2000). The Arkansas Supreme Court has just ruled in March of this year that MERS was not the beneficiary of a Deed of Trust (with language verbatim to mine) despite what the Deed of Trust said, because MERS has no interest in the note payments or in the corpus of the trust (homeowner’s obligation to pay). No beneficiary means the Deed of Trust is fatally flawed. More and more it is looking like I will have the lien on my home removed and I may well never have a noteholder to pay. I could even get some of my money back.
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  IN THE CHANCERY COURT OF SHELBY COUNTY TENNESSEEFOR THE 30 TH JUDICAL DISTRICT AT MEMPHIS ________________________________________________________________________ DAVID G. MILLS &JULIA MILLS ,Plaintiffs, v.   No. CH-09-0662-2FIRST HORIZON HOME LOAN CORPORATIOND/B/A FIRST TENNESSEE HOME LOANS &MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. Defendants. ________________________________________________________________________PLAINTIFFFS’ RESPONSE TO DEFENDANTS’ MOTION TO DISMISSPLAINTIFFS’ FIRST AMENDED COMPLAINT TO QUIET TITLE ________________________________________________________________________TO THE HONORABLE CHANCELLOR OF SAID COURT: COMES NOW , Plaintiffs, David G. Mills and Julia Mills, who file this theirResponse to Defendant First Horizon Home Loan Corporation, d/b/a First TennesseeHome Loans, (FHHLC) and Defendant Mortgage Electronic Registration Systems, Inc.(MERS) Motion to Dismiss Plaintiffs’ First Amended Complaint to Quiet Title andwould respectfully show unto this Honorable Court the following: I. THE ARGUMENTS OF DEFENDANTS   IN   THEIR MOTION TO DISMISS   A. Defendants First Claim in Part B of their Law and Argument that Plaintiffshave waived the right to make a Claim under T.C.A. 47-3-501. Defendants argue that Plaintiffs have waived the right to presentment under thefirst mortgage note and that this waiver also constitutes a waiver of (1) Plaintiffs’ right to- 1 -  demand Defendants “exhibit the note” and (2) Plaintiffs right to demand that a partydemanding payment on behalf of the holder of the note “show authority” to makedemand.Plaintiffs will show: (1) in Section IV. B, infra, that Defendants cannot rely on acopy of a note, which has not been placed in evidence under proper procedural rules, toassert the defense of waiver contained therein; (2) in Section IV. C, infra, that Defendantsdo not have standing to assert the waiver defense; and (3) in Section IV. D, that a waiverof presentment would not waive the Plaintiff’s right to have the note exhibited, nor wouldit waive the right to demand proof of authority to demand payment. B. Secondly, Defendants Claim in Part C of their Law and Argument thatPlaintiffs’ Claims under T.C.A. 47-3-309 are inapplicable. Defendants claim that with respect to the Plaintiffs’ second mortgage note thatFHHLC is not a party seeking to enforce the second note and therefore T.C.A. 47-3-309does not apply to FHHLC. Plaintiffs will show why this section does apply to FHHLC inSection IV. D infra. Defendants claim with respect to the first mortgage note, that because FHHLC isa “servicer” of the first mortgage note, T.C.A. 47-3-309 does not apply to FHHLC.   Plaintiffs will show: (1) in Section IV. D, infra, that FHHLC’s status as a “servicer isirrelevant to the question of whether a copy of a note needs to be proven to beenforceable; and (2) in Section IV. B, infra, that FHHLC, as a “servicer,” did not havestanding on its own to assert the note’s enforceability without the authority of the note’sholder.- 2 -  C. Thirdly, Defendants claim in Part D of their Law and Argument thatPlaintiffs’ claims with regard to the first mortgage deed of trust are contrary toTennessee Law .Defendants claim, with respect to the Plaintiffs’ first mortgage deed of trust, thatunder Tennessee law the deed of trust was assigned with the note when FHHLC sold itand that MERS can act on behalf of the present holder of the note.Plaintiffs will show in Section IV. E, infra, that neither Defendant has standing toenforce the note. Thus neither Defendant has standing to prove the enforceability of thedeed of Trust. Plaintiffs will further show in Section IV. E, infra, that the enforceabilityof the note is a predicate to the enforceability of the deed of trust and since neither havestanding to enforce the note, neither has standing to assert the validity of the Deed of Trust. Plaintiffs will still further show in Section IV. E, infra , that even if the note isultimately proven to be enforceable by a present holder of the note, MERS does not havethe right to act on behalf of the present holder without the express approval of the presentnote holder. D. Fourth, Defendants claim in Part E of their Law and Argument thatPlaintiffs’ have asserted an injunction is necessary, but failed to show the threat of actual irreparable injury. Defendants allege that Plaintiffs have identified no actual imminent irreparableinjury entitling them to the mandatory injunctive relief the Plaintiffs seek. Plaintiffs willshow in Section IV. F, infra, that, since Defendants have no standing to claim the note isenforceable and have no standing to claim they are entitled to payment by the Plaintiffs,Plaintiffs are being presently harmed by these demands, because these demands forpayment are made under threat of foreclosure for non-payment. Plaintiffs are harmedevery time demand for payment is made without proof of the right to enforce payment or- 3 -  without proof of standing to enforce payment. Plaintiffs are harmed every time demandfor payment is made without proof of authority to demand payment. E. Defendants claim in their Introduction to their Motion to Dismiss thatPlaintiffs refused their offers to remedy Plaintiffs complaints. In Defendants’ Introduction, Defendants assert that Plaintiffs refused to accept acopy of Plaintiffs’ second mortgage note stamped paid in full as a substitute for thesrcinal note. Defendants also assert that Plaintiffs are not satisfied with FHHLC’sconfirmation that the note has been assigned to Fannie Mae and that MetLife HomeLoans, as subservicer for FHHLC, holds the srcinal first mortgage note. As will beshown throughout this response, Plaintiffs maintain they have a genuine right not to besatisfied by these offers, especially by parties who have no legal standing in the case toassert rights of their own or to assert the rights of others.Defendants also complain that the ultimate conclusion to the outcome of this casecould be that Plaintiffs’ mortgages are revoked and Defendants could be compelled toreturn all money paid by Plaintiffs to Defendants. Defendants claim this wouldencourage borrowers to stop making mortgage payments. If this turns out to be the case,it is of Defendants’ own doing, and Defendants have no one to blame except themselves,for it is they who were instigators of and parties to the defective securitization processused in Plaintiffs mortgages.- 4 -
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