LIT Takes a Look at How Foreclosure Mill BDF in Texas Has Tightened the Noose on Homeowners’ Thanks to a Dishonorable Judiciary Since the Financial Crisis
We highlight 3 BDF foreclosure complaints from 2021, 2017 and 2011 and see how it evolved from a sparse template in 2011 to a judicially approved rocket-docket eviction notice for unsuspecting homeowners who end up in court in Texas.
Most recently, the Texas Supreme Court has led the way after a Certified Question (we call it an order) from the federal Fifth Circuit in the Zepeda case led to the Texas Supreme Court rejecting it’s own Constitutional amendments to protect homeowners with HELOC loans (home equity).
Despite being a recent Supreme Court champion, specializing in real estate and constitutional law, appellate attorney Connie Pfeiffer and her winning arguments against equitable subrogation presented to the Texas Supreme Court in Zepeda would be shunned. This was not because her argument failed in law, no – it was because of her documented slight on the Fifth Circuit, wherein she sided with the Burkes and Hon. Stephen Wm. Smith in stating that the Burkes wrongful foreclosure case on appeal by Deutsche Bank should have been affirmed, not reversed (The Burkes had prevailed against Deutsche Bank in a wrongful foreclosure law suit).
As a result, Pfeiffer’s long career as a Partner at Beck Redden would be dissolved practically overnight, after a new, corrupt opinion was issued by the Texas Supreme Court at the instruction of a fuming Fifth Circuit.
This, is turn, has resulted in the “tightening of the noose”, so to speak and any slim chance a homeowner contesting a foreclosure judgment could prevail in a Texas courtroom or on appeal to the Fifth Circuit is drastically diminished.
Now the judiciary are flexing their absolute immunity-driven powers again in 2021 for discreditable reasons.
This time the Fifth Circuit looking to cement Attorney Fees in a documented precedential opinion format to ensure homeowners are left with tens of thousands, if not hundreds of thousands of dollars more debt if they attempt to defend a wrongful foreclosure.
It’s a well-oiled dishonest judicial machine at work, funded by Wall St., dark money e.g. Federalist Society, CATO Institute et al, the Government and the Banksters.
In short, the little people have little hope.
But at LIT we’re not giving up at trying to educate y’all, the people.
You have to stand up and fight against corruption and the mob-rule which they are relying upon. These contemptible human beings believe that donning a black robe entitles them to absolute immunity to lie, cheat and steal millions more residential homesteads from you and your family; the people. They are mistaken.
Congress has the power to change the laws and the President has can also issue executive orders to protect the people. You need to demand that they invoke these rule change(s).
The United States highest court, the US Supreme Court, has refused to assist and prevent the illegal takings by banks, non-banks and their “bus load of attorneys and law firms on retainer“.
These justices have intentionally stayed in the shadows, watching for the last 13 years as millions of families were ejected from their homes and the turmoil that would create to the economy and affordable housing and rentals. Families have lost their security, their future and hope. We want to restore it. But we cannot do it alone. Please help.
Remember those who were there to support the people and those who sold their souls for greed and power. The Supreme Court is part of the judiciary and LIT suggests, the biggest part of the problem – by their silence and inaction.
Join the fight. Subscribe, share, donate and help us change the most dangerous branch of government to a place where access to justice means you are going against a Bank, not a Bank and the Judge(s) you may face.
These highly paid turncoats and executioners need to be ousted and replaced with honest Judges.
JUL 10, 2021
U.S. Bank Trust National Association v. King
(6:21-cv-00678)
District Court, W.D. Texas (2021)
before Judge Alan Albright
“A Good Day for Lenders: Texas Supreme Court Rules that Lenders Still Entitled to Equitable Subrogation for Non-compliant Home Equity Loans”
PLAINTIFF’S ORIGINAL COMPLAINT
U.S. Bank Trust National Association, as Trustee of the Tiki Series IV Trust (“Plaintiff”), Plaintiff, files this suit complaining of Laura L. King and Kenneth R. King, Sr. a/k/a Kenneth R. King and states as follows:
I. Parties
1. Plaintiff U.S. Bank Trust National Association, as Trustee of the Tiki Series IV Trust is the mortgagee of the loan agreement secured by the Property made subject of this suit, as that term is defined in Tex. Prop. Code §51.0001(4).
2. Defendant Laura L. King is an individual who resides in Robertson County, Texas and is a citizen of the State of Texas. She can be served with process at 416 N. Owensville Street, Franklin, Texas 77855, or at such other place as she may be found. Summons is requested.
3. Defendant Kenneth R. King, Sr. a/k/a Kenneth R. King is an obligor of a Texas Home Equity Note and a citizen of the State of Texas. He can be served with citation at 2574 Old Boone Prairie Road, Franklin, Texas 77855, or at such other place as he may be found. Summons is requested.
Biden needs an executive order to end the judiciary as we know it, including revoking immunity. Then, return the stolen homes by banks too big to fail or jail to the citizens they evicted, post 2008. The current housing market is a direct result of securitization and greed. pic.twitter.com/KTBDKx6fOl
— LawsInTexas (@lawsintexasusa) July 9, 2021
II. Diversity Jurisdiction
4. The Court has jurisdiction over the controversy because there is complete diversity of citizenship between Plaintiff and Defendants, and the amount in controversy exceeds $75,000.00. See 28 U.S.C. §1332.
5. Plaintiff is a national association and trustee of a trust. When determining the citizenship of a trust for purposes of diversity jurisdiction, it is determined by the citizenship of its trustee. See Wells Fargo Bank, N.A. v. Am. Gen. Life Ins. Co., 670 F. Supp. 2d 555, 561 (N.D. Tex. 2009); Coury v. Prot., 85 F.3d 244, 248-49 (5th Cir. 1996). A national bank is a citizen of the state in which its main office is located, as set forth in its articles of association. 28 U.S.C. § 1348(c); Wachovia Bank, N.A. v. Schmidt, 546 U.S. 303, 307 (2006). U.S. Bank is and at all times relevant to this action, was a national bank incorporated in Delaware with its main office located in Wilmington Delaware. A national bank is a citizen of the state where its main office, as designated in its articles of association are located. Wachovia Bank, N.A. v. Schmidt, 546 U.S. 303, 307 (2006). Thus, U.S. Bank is a citizen of Delaware for diversity jurisdiction. Id.
6. Defendants are individuals and citizens of the State of Texas.
7. In this lawsuit, Plaintiff seeks to foreclose on a Texas home equity lien with an outstanding amount owed greater than $75,000.00. Pursuant to the records of the Robertson County’s Central Appraisal District online (esearch.robertsoncad.com), the Property is valued at
$141,427.00.1 Accordingly, the amount in controversy meets and exceeds the federal jurisdictional minimum of $75,000.00.
1 See Exhibit A – Robertson County Central Appraisal District property data.
III. Venue
8. Venue is proper in the United States District Court for the Western District of Texas, Waco Division, because this lawsuit concerns title to real property located in Robertson County, Texas. See 28 USC §124(d)(1), 1391(b)(2).
IV. Factual Background
9. On or about March 29, 2004, Laura L. King and Kenneth R. King, Sr. (“Defendants” or “Obligors”) executed a Texas Home Equity Note (hereinafter “Note”) in the principal sum of $90,000.00, with interest at the rate of 6.3750 percent per annum.2 As security for payment of the Note, Defendants executed a Texas Home Equity Security Instrument (hereinafter “Deed of Trust”) (collectively the “Loan Agreement”) encumbering the real property and improvements commonly known as 2574 Old Boone Prairie Road, Franklin, Texas 77855 (hereinafter the “Property”)3 and more particularly described as:
ALL THAT CERTAIN TRACT OR PARCEL OF LAND LYING AND BEING SITUATED IN ROBERTSON COUNTY, TEXAS, OUT OF AND A PART OF THE F. MULLANSTER SURVEY, ABSTRACT NO. 262, AND FURTHER BEING OUT OF A 35.00 ACRE TRACT DESCRIBED IN A DEED TO KENNETH R. KING RECORDED IN VOLUME 400, PAGE 372 OF THE DEED RECORDS OF ROBERTSON COUNTY, TEXAS, SAID TRACT OR PARCEL OF LAND HEREIN DESCRIBED AS FOLLOWS:
BEGINNING AT A FOUND 3/8″ STEEL ROD AT A FENCE CORNER IN THE EAST LINE OF THE OLD BOONE PRAIRIE ROAD FOR THE SOUTH WEST CORNER OF THE ABOVE MENTIONED KING 35.00 ACRE TRACT AND FOR THE NORTH WEST CORNER OF THE JAMES W. STEELE, JR., ET UX, 83.73 ACRE TRACT;
THENCE N 30 DEG 17′ 22″ W 30.00 FEET ALONG THE EAST LINE OF THE OLD BOONE PRAIRIE ROAD TO A FOUND 1/2″ STEEL ROD FOR A CORNER OF THE HEREIN DESCRIBED TRACT;
THENCE N 60 DEG 12′ 04″ E 1094.78 FEET TO A SET 1/2″ STEEL ROD FOR AN INTERIOR CORNER OF THE HEREIN DESCRIBED TRACT;
2 See Exhibit B – Texas Home Equity Note.
3 See Exhibit C – Texas Home Equity Security Instrument.
THENCE N 29 DEG 47′ 56″ W 120.00 FEET TO A SET 1/2″ STEEL ROD FOR A CORNER OF THE HEREIN DESCRIBED TRACT;
THENCE N 60 DEG 12′ 04″ E 200.00 FEET TO A SET 1/2″ STEEL ROD FOR THE NORTH EAST CORNER OF THE HEREIN DESCRIBED TRACT;
THENCE S 29 DEG 47′ 56″ E 150.00 FEET TO A SET 1/2″ STEEL ROD IN THE SOUTH LINE OF THE KING 35.00 ACRE TRACT FOR THE SOUTH EAST CORNER OF THE HEREIN DESCRIBED TRACT;
THENCE S 60 DEG 12′ 04″ W 1294.78 FEET ALONG A FENCE AND THE COMMON LINE BETWEEN THE KING AND STEELE TRACTS TO THE PLACE OF BEGINNING AND CONTAINING 1.44 ACRES OF LAND, MORE OR LESS.
10. The Deed of Trust was recorded in the Official Public Records of Robertson County, Texas at 20041460.
11. Plaintiff is the holder and owner of the Note and beneficiary of the Deed of Trust pursuant to assignment.4 On May 3, 2012, the original beneficiary under the Deed of Trust, Mortgage Electronic Registration Systems, Inc., As Nominee for ARK-LA-TEX Financial Services, LLC, DBA Benchmark Mortgage, Its Successors and Assigns, assigned its interest in the Deed of Trust to JPMorgan Chase Bank, N.A. The assignment was filed in the Official Public Records of Robertson County, Texas at Doc. No. 20122524. On January 27, 2016, JPMorgan Chase Bank, N.A., its Successors and Assigns, assigned its interest in the Deed of Trust to MTGLQ Investors, L.P. The assignment was filed in the Official Public Records of Robertson County, Texas at Doc. No. 20160496. On May 4, 2021, MTGLQ Investors, L.P. assigned its interest in the Deed of Trust to Plaintiff U.S. Bank Trust National Association, as Trustee of the Tiki Series IV Trust. The assignment was filed in the Official Public Records of Robertson County, Texas at Doc. No. 20211733.
4 See Exhibit D – Assignments.
12. The Note contains a blank indorsement. Plaintiff has possession of the Note Plaintiff is the current owner of the Loan Agreement and beneficiary of the Deed of Trust.
13. Defendants materially breached and have failed to cure their respective Loan Agreement obligation by failing to pay scheduled monthly payments. The amount to cure the default as of February 13, 2020 was at least $75,666.46. The payoff, as that term is generally described in Tex. Prop. Code § 12.017(5), of the Loan Agreement obligation as of June 30, 2021 is at least $120,549.92.
14. Prior to the filing of this complaint, the requisite notices to cure the default were mailed to each Obligor as required by the Texas Property Code and the Loan Agreement.5 The opportunity to cure has expired.
15. Defendants failed to cure the default, and Plaintiff ACCELERATES the debt by the filing of this Complaint. See Burney v. Citigroup Global Markets Realty, Corp., 244 S.W.3d 900, 903 (Tex. App.—Dallas 2008); see also Alcala v. Deutsche Bank National Trust Company, No. 16-20609, 2017 WL 1279227 *2 (5th Cir. Apr. 6, 2017).
16. The Loan Agreement obligation evidenced by the Note and Deed of Trust is due, owing, and payable and all conditions precedent under Tex. Prop. Code Chapter 51 and Tex. R. Civ. P. 54 have been accomplished.
5 See Exhibit E – Notice of Default.
NEW: Condition Precedent
A condition precedent is a condition or an event that must occur before a right, claim, duty, or interests arises. Compare condition subsequent.
In a contract, a condition precedent is an event that must occur before the parties are obligated to perform. For example, an insurance contract may require the insurer to pay to rebuild the customer’s home if it is destroyed by fire during the policy period. The fire is a condition precedent. The fire must occur before the insurer is obligated to pay.
Courts prefer to interpret a clause in a contract as a promise rather than a condition precedent to avoid forfeiture. The Second Restatement of Contracts has dropped the term “condition precedent” and simply refers to it as “condition.”
In property, a condition precedent is an event at which the vesting of a property interest occurs. If the condition does not occur before a specified time, the condition fails, and the property interest does not vest.
V. Conditions Precedent
17. All conditions precedent for foreclosure have been performed or have occurred, and any other action required under applicable law and the loan agreement, contract or lien sought to be foreclosure has been performed.
VI. Causes of Action
A. Breach of Contract
18. The foregoing paragraphs are incorporated herein by reference for all purposes.
19. On or about March 29, 2004, the Kings entered into a binding contract with Plaintiff’s predecessor in interest in the form of a Note and Deed of Trust.6 Plaintiff is the successor in interest pursuant to Assignments of the Deed of Trust.7 Plaintiff is the holder of the Note, the assignee of rights under the Deed of Trust, and the Mortgagee as that term is defined by Tex. Prop. Code §51.0001(4). Plaintiff, as beneficiary through assignment, asserts a cause of action for breach of contract for default in that Loan Agreement.
20. The Property serves as security for the Kings’ indebtedness is commonly known as 2574 Old Boone Prairie Road, Franklin, Texas 77855, and is more precisely described in Section IV above. The Note was made to refinance a debt or obtain cash out against the Property. The Kings executed and delivered the Deed of Trust conveying the Property in trust as collateral to secure payment and performance of the separate obligations created under the terms and conditions of the Loan Agreement.
21. Under the terms of the Note, the Kings are obligated to pay the loan amount as prescribed in the Note and Deed of Trust.
6 See Exhibits B and C.
7 See Exhibit D.
22. Plaintiff performed completely under the terms of the Loan Agreement when it, or its predecessor in interest, funded the loan that the Kings promised to repay when they signed the Loan Agreement.
The Kings breached the terms of the Loan Agreement by failing to tender payments in accordance with the payment schedule of the Loan Agreement. Payments are contractually due for the January 1, 2013 payment and subsequent payments.
The original principal balance of the Note to be paid to Benchmark was $90,000.00. The amount required to pay off the Note as of June 30, 2021 is $120,549.92 with interest and allowable fees continuing to accrue. Therefore, there has been a material breach of the Loan Agreement.
23. The requisite notice to cure the default was mailed to Defendants as required under applicable law and the terms of the Loan Agreement, and the opportunity to cure has expired. As a consequence of the failure to cure the default, Plaintiff accelerates the maturity of the debt with the filing of this Complaint.
24. All other actions required by law or the terms of the Loan Agreement requisite for Plaintiff to foreclose under the Deed of Trust have been performed.
25. In accordance with the Texas Rules of Civil Procedure and Tex. Const. art. XVI, §50(a)(6), Plaintiff, or its successors and assigns, seeks judgment for breach of contract whereby allowing Plaintiff to proceed with the non-judicial foreclosure of the lien against the Property. No personal liability is sought against Defendants.
B. Non-Judicial Foreclosure of the Lien
26. The foregoing paragraphs are incorporated herein by reference for all purposes.
27. Because of a material breach of the Loan Agreement, Plaintiff seeks judgment from this Court allowing it to enforce its lien through non-judicial foreclosure pursuant to the terms of the Loan Agreement, the Texas Constitution, and Texas Property Code section 51.002 with respect to Defendants.
This short sizzle reel is for friends, associates and those close to Loren Kieve… https://t.co/eBf0hTb7t7 @stanfordccsre @centerforcrds @ruha9 @YHayaux @CarleyFlanery @sebastiankaplan @logikcull @StanfordHAI @URNUTEACHER @ruthstarkman @glncv @SFPublicPress @WSJ @nytimes @abc pic.twitter.com/GaqC5gsfM8
— LawsInTexas (@lawsintexasusa) July 8, 2021
28. Because of the material breach of the Loan Agreement, a public auction of the Property in conjunction with all other regularly scheduled non-judicial foreclosure sales on the first Tuesday of the month would provide the most practical, efficient and effective means to enforce Plaintiff’s security interest in the Property.
Because the rights, responsibilities, and duties of Plaintiff and the trustee are well known under Texas Property Code section 51.002 and Texas case law, a public auction conducted in the same manner as a non-judicial foreclosure sale would meet all constitutional standards of due process. This Court has the power and authority, pursuant to 28 U.S.C. §§2201-2202, to declare the rights of Plaintiff and Defendants as to the Note and Deed of Trust.
C. Judicial Foreclosure of the Lien
29. The foregoing paragraphs are incorporated herein by reference for all purposes.
30. Plaintiff asserts a cause of action for judicial foreclosure. U.S. Bank, as the successor in interest to the original lender, has the right to enforce the Note and Security Instrument. U.S. Bank has fully performed its obligations under the Loan Agreement; however, the Kings did not comply with the Loan by failing to substantially perform material obligations required under its terms (principally, the payment of amounts due under the Loan). The Kings were provided with notice of default and intent to accelerate if the default was not cured. The default was not cured. To the extent not previously accelerated, the maturity date of the Note is accelerated. U.S. Bank seeks a judgment for judicial foreclosure of the Property.
31. U.S. Bank has been forced to hire the undersigned attorneys to seek an order allowing foreclosure as a result of the Kings’ failure to comply with the Loan Agreement. U.S.Bank is therefore entitled to and seeks judgment for its reasonable attorneys’ fees in this action, both through trial and in the event of a subsequent appeal, as provided by the Deed of Trust and under Texas law. U.S. Bank also seeks a writ of possession.
32. All conditions precedent have been performed or have occurred.
33. U.S. Bank, or its successors and assigns, seeks to judicially foreclose the Property encumbered by the Deed of Trust in accordance with the terms of the Deed of Trust and in accordance with TEX. R. CIV. P. 309, which is adopted by reference in this complaint. U.S. Bank is the beneficiary of the Deed of Trust, is the mortgagee of record and the party entitled to enforce the lien. U.S. Bank asserts a cause of action for judicial foreclosure against the Kings and seeks judgment allowing U.S. Bank to proceed with foreclosure of its lien against the Property.
D. Equitable Subrogation
34. The foregoing is incorporated by reference for all purposes.
35. In the alternative to Plaintiff’s claims for breach of contract, judicial foreclosure and non-judicial foreclosure, Plaintiff asserts a cause of action for equitable subrogation.
36. The doctrine of equitable subrogation provides that a third party will succeed to the rights of the original lender when the third party satisfies the borrower’s obligation to the original lender. The lender is said to “step into the shoes” of the prior lienholder and assume the right to the security interest against the debtor. LaSalle Bank Nat’l Ass’n v. White, 246 S.W.3d 616, 619 (Tex. 2007).
37. Upon the closing of the Loan Agreement, Plaintiff’s predecessor used some of the loan proceeds to pay off prior debts that were secured by the Property. In particular, sums of money were paid to Defendants’ prior secured creditor to pay off their first mortgage lien. Sums were also paid by Plaintiff to the taxing authorities to pay Defendants’ property taxes.
38. Pursuant to the doctrine of equitable subrogation, Plaintiff, as successor in interest to any prior secured creditor, stepped into the prior creditor’s shoes and acquired its respective lien interests in the Property.
39. Defendants breached their obligation to tender full and timely payment to Plaintiff and Plaintiff accelerated the amount of the debt owed. Despite written demand, Defendants failed to tender payment for the amount due under the Note. Plaintiff thus seeks a judgment allowing it to foreclose on its lien on the Property secured by the moneys expended to pay off the prior secured obligations of Defendants.
40. All conditions precedent have been performed or have occurred.
E. Damages
41. Based on Defendants’ breach of their respective obligations under the Loan Agreement, Plaintiff has been damaged in an amount of at least $120,549.92 and is further entitled to attorney’s fees, costs of court, interest, and all other fees and costs allowed to Plaintiff under the terms and conditions of the Loan Agreement.
42. The Loan Agreement is a non-recourse debt pursuant to TEX. CONST. art. XVI
§ 50(a)(6). However, fees, costs and interest can be added to the total debt and collected at the time of foreclosure of the Property pursuant to the terms of the Deed of Trust. Since this Loan Agreement is non-recourse, Plaintiff seeks no personal liability against Defendants. Plaintiff seeks only a judgment against Defendants for an in rem interest in the Property.
F. Attorney’s Fees
43. As a result of the breach of Defendants’ obligation under the Loan Agreement, Plaintiff has been required to retain the undersigned legal counsel to institute and prosecute this action.
44. Under the terms of the Note and Deed of Trust, Defendants agreed to pay all reasonable attorney’s fees and costs of court incurred in enforcing the payment and collection of the Note and Deed of Trust, to include any appeal to U.S. Court of Appeals for the Fifth Circuit or an appeal to the U.S. Supreme Court. Pursuant to the terms of the Deed of Trust, Plaintiff is entitled to recover its reasonable attorney’s fees for the services rendered in instituting and prosecuting this action.
VII. Prayer
WHEREFORE, Plaintiff requests that Defendants be cited to appear and answer, and that Plaintiff have judgment against Defendants, jointly and severally as applicable, for:
a. A judgment authorizing Plaintiff, its successors or assigns, to foreclose its lien pursuant to the power of sale contained in the Deed of Trust by a non- judicial foreclosure sale or alternatively, by judicial foreclosure pursuant to Tex. R. Civ. P. 309;
b. Judgment for damages for the unpaid amounts owing to Mortgagee as evidenced by the Note and Deed of Trust;
c. Pre-judgment interest as provided by law, attorneys’ fees, and costs of court;
d. Post-judgment interest on the judgment from its date until paid;
e. Attorneys’ fees and costs of suit; and
f. Such other and further relief, in law and in equity, to which Plaintiff may be justly entitled.
Respectfully submitted,
BARRETT DAFFIN FRAPPIER TURNER & ENGEL, LLP
By: /s/Crystal G. Gibson
Crystal G. Gibson
State Bar No. 24027322
4004 Belt Line Road, Suite 100
Addison, Texas 75001
972-386-5040/ 800-795-5040
972-341-0734 (Fax)
CrystalR@bdfgroup.com
ATTORNEYS FOR PLAINTIFFS
Did You Know: Illinois Charges an Unconstitutional Premium Foreclosure Fee to Homeowners Filing in Circuit Courts?
Neither did LIT. It’s appalling. But thank goodness the judges agree it’s unconstitutional. Now it’s on appeal to the Illinois Supreme Court.
Former Florida Foreclosure Defense Lawyer Indicted
Former Florida Foreclosure Defense Attorney James Lee Clark indicted on many charges, including bankruptcy fraud, and eight counts of wire fraud.
LIT’s Accurate Foreclosure Prediction Starts Already, the 90 Day Mortgage Relief is No Relief At All for Homeowners
The Banks and non-banks are preparing for the next financial crisis – and this time they are well prepared – a learning curve after the fiasco of 2008 which they still managed to foreclose on millions of homeowners unlawfully. Be warned, the banks and non-banks will be brutal and the courts will implement a ‘rocket docket’ to steal your homes.
HSBC Bank USA, National Association v. Erickson
(1:17-cv-00429)
District Court, W.D. Texas (2017)
before Judge Sam Sparks
D. Attorney’s Fees
33. Under the terms of the Note and Deed of Trust, Defendants agreed to pay all reasonable attorney’s fees and costs of court incurred in enforcing the payment and collection of the Note and Deed of Trust, to include any appeal to U.S. Court of Appeals for the Fifth Circuit or an appeal to the U.S. Supreme Court. Pursuant to the terms of the Deed of Trust, Plaintiff is entitled to recover its reasonable attorney’s fees for the services rendered in instituting and prosecuting this action.
PLAINTIFF’S ORIGINAL COMPLAINT
HSBC Bank USA, National Association, as Trustee for Wells Fargo Home Equity Asset- Backed Securities 2006-3 Trust, Home Equity Asset-Backed Certificates, Series 2006-3 (hereinafter “HSBC Bank”), Plaintiff, files this suit complaining of Cristyn D. Erickson and Wayne A. Erickson and states as follows:
I. Parties
1. Plaintiff HSBC Bank, is a national banking association and trustee of a trust.
2. Defendant Cristyn D. Erickson is an obligor of a Texas Home Equity Note and a citizen of the State of Texas. She can be served with process at 7000 Settlers Trail, Dripping Springs, Texas 78620, or at such other place as she may be found. Summons is requested.
3. Defendant Wayne A. Erickson an obligor of a Texas Home Equity Note and a citizen of the State of Texas. He can be served with citation at 7000 Settlers Trail, Dripping Springs, Texas 78620, or at such other place as she may be found. Summons is requested.
II. Subject Property of this Lawsuit
4. This proceeding concerns a home equity loan agreement, as the term “loan agreement” is generally defined under TEX. BUS. & COM. CODE § 26.02, created according to TEX. CONST. art. XVI, § 50(a)(6) secured by real property and improvements commonly known as 7000 Settlers Trail, Dripping Springs, Texas 78620 (hereinafter the “Property”) and is more particularly described as:
9.75 ACRES (424.706 SQ. FT.) BEING ALL OF TRACTS 7 & 8, SAVE & EXCEPT 0.27 ACRE (11,761 SQ. FT.) PORTION OUT OF TRACT 8 SETTLERS POINT PHASE 1, VOLUME 8, PAGE 125, H.C.P.R. HAYS COUNTY, TEXAS.
SAVE AND EXCEPT BEING MORE PARTICULARLY DESCRIBED AS:
BEING A TRACT OR PARCEL OF LAND CONTAINING 0.27 ACRE OR 11,782 SQ. FT. OUT OF TRACT 8, OF SETTLERS POINT, PHASE 1, ACCORDING TO THE MAP OR PLAT THEREOF RECORDED IN VOLUME 8, PAGE 125, H.C.P.R. SAID 0.27 ACRE TRACT BEING MORE PARTICULARLY DESCRIBED BY METES AND BOUNDS AS FOLLOWS:
BEGINNING AT A 1/2″ IRON ROD FOUND MARKING THE NORTHWEST CORNER OF TRACT 8, OF SAID SETTLERS POINT, SAME BEING AN EXTERIOR CORNER OF SAID SETTLERS POINT, ALSO BEING THE SOUTHWEST CORNER OF THE HUTTO TRACT, CALLED 65.81 ACRES, AS DESCRIBED IN VOLUME 1309, PAGE 112, H.C.O.R. LYING IN THE EAST LINE OF THE WALKER, ET AL TRACT, CALLED 1298.22 ACRES, AS DESCRIBED IN VOLUME 1675, PAGE 734, H.C.O.R.;
THENCE SOUTH 79 DEG. 09′ 21″ EAST, ALONG THE NORTH LINE OF SAID TRACT 8, SAME BEING THE NORTH LINE OF SAID SETTLERS POINT, ALSO BEING THE SOUTH LINE OF SAID HUTTO TRACT, A DISTANCE OF 215.04 TO A 3/8″ IRON ROD FOUND MARKING THE NORTHEAST CORNER OF SAID TRACT 8, SAME BEING THE NORTHWEST CORNER OF TRACT 7, OF SAID SETTLERS POINT;
THENCE SOUTH 54 DEG. 00′ 32″ WEST, THROUGH SAID TRACT 8, A DISTANCE OF 258.54′ TO A CAPPED 1/2″ IRON ROD SET IN THE WEST LINE OF SAID TRACT 8, SAME BEING THE EAST LINE OF SAID WALKER, ET AL TRACT;
THENCE NORTH 00 DEG. 59′ 40″ WEST, ALONG THE WEST LINE OF SAID TRACT 8, SAME BEING THE EAST LINE OF SAID WALKER, ET AL TRACT, A DISTANCE OF 111.06′ TO THE PLACE OF BEGINNING AND CONTAINING 0.27 ACRE (11,761 SQUARE FEET OF LAND).
III. Jurisdiction and Venue
5. The Court has jurisdiction over the controversy because there is complete diversity of citizenship between Plaintiff and Defendants, and the amount in controversy exceeds
$75,000.00. See 28 U.S.C. §1332.
6. Plaintiff is a national association and trustee of a trust. When determining the citizenship of a trust for purposes of diversity jurisdiction, it is determined by the citizenship of its trustee. See Wells Fargo Bank, N.A. v. Am. Gen. Life Ins. Co., 670 F.Supp. 2d 555, 561 (N.D. Tex. 2009); Coury v. Prot., 85 F.3d 244, 248-49 (5th Cir. 1996). A national bank is a citizen of the state in which its main office is located, as set forth in its articles of association. 28 U.S.C. § 1348(c); Wachovia Bank, N.A. v. Schmidt, 546 U.S. 303, 307 (2006). Under its articles of association, HSBC’s main office is located in Virginia. Therefore, HSBC is a citizen of Virginia for diversity purposes. Id.
7. Defendants are individuals and citizens of the State of Texas.
8. In this lawsuit, HSBC seeks to foreclose on a Texas home equity lien with an outstanding amount owed greater than $75,000.00. Pursuant to the records of the Hays County Central Appraisal District (http://www.hayscad.com) online, the Property is valued at
$814,530.00.1 Accordingly, the amount in controversy meets and exceeds the federal jurisdictional minimum of $75,000.00.
9. Venue is proper in the United States District Court for the Western District of Texas, Austin Division, because this lawsuit concerns title to real property located in Hays County, Texas. See 28 USC §124(d)(1), 1391(b)(2).
1 See Hays County Central Appraisal District property data attached hereto as Exhibit 1.
IV. Factual Background
10. On or about October 11, 2006, Cristyn D. Erickson and Wayne A. Erickson (hereinafter “Defendants” or “Obligors”) executed a Texas Home Equity Note (hereinafter “Note”) in the principal sum of $850,000.00, with interest at the rate of 8.1250 percent per annum.2
11. Defendants executed a Texas Home Equity Security Instrument (hereinafter “Deed of Trust”) (collectively the “Loan Agreement”) encumbering the Property as security for payment of the Note.3 Plaintiff is the holder of the Note and beneficiary of the Deed of Trust pursuant to a corrective assignment effective November 5, 2008 and recorded in the Hays County real property records under Instrument No. ASSG20080169807793.4
12. Defendants materially breached and have failed to cure their respective Loan Agreement obligation by failing to pay scheduled monthly payments. The amount to cure the default as of May 3, 2017 is at least $874,876.36. The payoff, as that term is generally described in Tex. Prop. Code § 12.017(5), of the Loan Agreement obligation as of May 26, 2017 is at least
$1,625,220.07. Prior to the filing of this petition, the requisite notice or notices to cure the default were mailed to each Obligor as required by the Texas Property Code and the Loan agreement.5 The opportunity to cure has expired.
13. Defendants failed to cure the default, and Plaintiff initially accelerated the debt by Notice of Acceleration dated August 21, 2012.6 However, the August 21, 2012 acceleration was rescinded via a notice of rescission of acceleration mailed to the Obligors on June 16, 2016 via certified mail.7 The debt was re-accelerated on September 26, 2016 with the filing of HSBC’s
2 See “Note” attached hereto as Exhibit 2.
3 See “Home Equity Security instrument” attached hereto as Exhibit 3.
4 See “Assignment” attached hereto as Exhibit 4.
5 See “Notices of Default” attached hereto as Exhibit 5.
6 See “2012 Notice of Acceleration” attached hereto as Exhibit 6.
7 See “Rescission of Acceleration” attached hereto as Exhibit 7.
736 application to foreclose.8 See Burney v. Citigroup Global Markets Realty, Corp., 244 S.W.3d 900, 903 (Tex. App.—Dallas 2008); see also Alcala v. Deutsche Bank National Trust Company, No. 16-20609, 2017 WL 1279227 *2 (5th Cir. Apr. 6, 2017).
14. The Loan Agreement obligation evidenced by the Note and Deed of Trust is due, owing, and payable and all conditions precedent under Tex. Prop. Code Chapter 51 and Tex. R. Civ. P. 54 have been accomplished.
V. Conditions Precedent
15. All conditions precedent for foreclosure have been performed or have occurred, and any other action required under applicable law and the loan agreement, contract or lien sought to be foreclosure has been performed.
VI. Causes of Action
A. Breach of Contract
16. The foregoing paragraphs are incorporated herein by reference for all purposes.
17. On or about October 11, 2006, Defendants entered into a binding contract with Wells Fargo Bank, N.A. (“Wells Fargo”) in the form of a Note and Deed of Trust.9 Plaintiff, as beneficiary through assignment, asserts a cause of action for breach of contract for default in that Loan Agreement.
18. HSBC Bank is the successor to Wells Fargo in its role as the “Lender” under that Loan Agreement pursuant to a Corrective Assignment of Deed of Trust.10 HSBC Bank is the holder of the Note, the assignee of rights under the Deed of Trust, and the Mortgagee as that term is defined by Tex. Prop. Code §51.0001(4).
8 See “2016 Rule 736 Application for Foreclosure” attached hereto as Exhibit 8.
9 See Exhibits 2 and 3.
10 See Exhibit 4.
19. The Property serves as security for Defendants’ indebtedness is located at 7000 Settlers Trail, Dripping Springs, Texas 78620, and is more precisely described in Section III above.
20. Under the terms of the Note, Defendants are obligated to pay the loan amount as prescribed in the Note and Deed of Trust.
21. Wells Fargo performed completely under the terms of the Loan Agreement when it funded the loan that Defendants promised to repay when they signed the Loan Agreement. By virtue of Wells Fargo’s performance, HSBC Bank performed under the terms of the Loan Agreement.
22. Defendants breached the terms of the Loan Agreement by failing to tender payments in accordance with the payment schedule of the Loan Agreement. Payments under the Loan Agreement are contractually due for the August 1, 2008 payment and subsequent payments. The original principal balance of the Note to be paid to Wells Fargo was $850,000.00. The amount required to pay off the Note as of April 30, 2017 is $1,625,220.07 with interest and allowable fees continuing to accrue.
23. The requisite notice to cure the default was mailed to Defendants as required under applicable law and the terms of the Loan Agreement, and the opportunity to cure has expired.
24. All other actions required by law or the terms of the Loan Agreement requisite for HSBC Bank to foreclose under the Deed of Trust have been performed.
B. Foreclosure of the Lien
25. The foregoing paragraphs are incorporated herein by reference for all purposes.
26. Plaintiff is the current holder of the Note and mortgagee of record and asserts a cause of action for judicial foreclosure against Defendants. Plaintiff seeks an order allowing it to
proceed with foreclosure of its lien against the Property. No personal liability is sought against the Defendants.
27. The Note was made to refinance a debt against the Property or obtain cash out at closing. Defendants executed and delivered the Deed of Trust conveying the Property in trust as collateral to secure payment and performance of the separate obligations created under the terms and conditions of the Loan Agreement.
28. Plaintiff seeks to foreclose the Property encumbered by the Deed of Trust in accordance with the terms of the Deed of Trust. Defendants and all persons taking an interest in the encumbered Property should be divested of all right, title and interest in the Property after the foreclosure sale.
29. After foreclosure of the Property, Plaintiff requests the Court issue a writ of possession and Defendants and anyone taking an interest under Defendants should be dispossessed of the Property.
C. Damages.
30. Based on Defendants’ breach of their respective obligations under the Loan Agreement, Plaintiff has been damaged in an amount of at least $1,625,220.07 and is further entitled to attorney fees, costs of court, interest, and all other fees and costs allowed to Plaintiff under the terms and conditions of the Loan Agreement.
31. The Loan Agreement is a non-recourse debt pursuant to TEX. CONST. art. XVI
§ 50(a)(6). However, fees, costs and interest can be added to the total debt and collected at the time of foreclosure of the Property pursuant to the terms of the Deed of Trust. Since this Loan Agreement is non-recourse, Plaintiff seeks no personal liability against Defendants. Plaintiff seeks only a judgment against Defendants for an in rem interest in the Property.
Attorney Fees
“Plaintiffs are already facing the loss of their home. To saddle them with nearly $20,000 in attorneys’ fees sought by a giant financial institution merely because they had the temerity to file a lawsuit would be worse than inequitable and unreasonable; it would be a travesty.”
– United States District Judge
D. Attorney’s Fees
32. As a result of the breach of Defendants’ obligation under the Loan Agreement, Plaintiff has been required to retain the undersigned legal counsel to institute and prosecute this action.
33. Under the terms of the Note and Deed of Trust, Defendants agreed to pay all reasonable attorney’s fees and costs of court incurred in enforcing the payment and collection of the Note and Deed of Trust, to include any appeal to U.S. Court of Appeals for the Fifth Circuit or an appeal to the U.S. Supreme Court. Pursuant to the terms of the Deed of Trust, Plaintiff is entitled to recover its reasonable attorney’s fees for the services rendered in instituting and prosecuting this action.
VII. Prayer
WHEREFORE, Plaintiff requests that Defendants be cited to appear and answer, and that Plaintiff have judgment against Defendants, jointly and severally as applicable, for:
a. A judgment authorizing Plaintiff, its successors or assigns, to foreclose its lien pursuant to the power of sale contained in the Deed of Trust or alternatively, by judicial foreclosure;
b. Judgment for damages for the unpaid amounts owing to Mortgagee as evidenced by the Note and Deed of Trust;
c. Pre-judgment interest as provided by law, attorneys’ fees, and costs of court;
d. Post-judgment interest on the judgment from its date until paid;
e. Attorneys’ fees and costs of suit; and
f. Such other and further relief, in law and in equity, to which Plaintiff may be justly entitled.
Respectfully submitted,
HOPKINS LAW, PLLC
By: /s/ Mark D. Hopkins
Mark D. Hopkins
State Bar No. 00793975
Shelley L. Hopkins
State Bar No. 24036497
3809 Juniper Trace, Suite 101
Austin, Texas 78738
(512) 600-4320
(512) 600-4326 Fax
mark@hopkinslawtexas.com
BARRETT DAFFIN FRAPPIER TURNER & ENGEL, LLP
By: /s/Crystal G. Roach
Crystal G. Roach
State Bar No. 24027322
4004 Belt Line Road, Suite 100
Addison, Texas 75001
972-386-5040/ 800-795-5040
972-341-0734 (Fax)
CrystalR@bdfgroup.com
ATTORNEYS FOR PLAINTIFF
Post Edited: Florida Attorney Filing Lawsuits Against Deutsche Bank is Facing Sanctions for Telling the Truth, https://t.co/tjUaCH5Rli
— LawsInTexas (@lawsintexasusa) July 10, 2021
Deutsche Bank National Trust Company v. Burke
(4:11-cv-01658)
District Court, S.D. Texas (2011)
before Judge David Hittner
“The Burkes Wanted Certain Judges to be Shot.” – admitted liar Attorney Mark Hopkins stated in open court, intentionally repeated and then concluded by saying he – “wanted this to end, sooner than later…” – Rogue Attorney, Mark Hopkins, BDF Hopkins, TX.
PLAINTIFF’S ORIGINAL PETITION
TO THE HONORABLE JUDGE OF SAID COURT:
NOW COMES Deutsche Bank National Trust Company, as Trustee of the Residential Asset Securitization Trust 2007-A8, Mortgage Pass-Through Certificates, Series 2007-H under the Pooling and Servicing Agreement dated June 1, 2007 (“Plaintiff” or “Deutsche”) and would respectfully show the Court as follows:
A. Parties
1. Plaintiff is a corporation with its principal place of business located at 1761 St. Andrews Place, Santa Ana, California 94705.
2. John Burke and Joanna Burke (“Defendants”) are individuals residing at 46 Kingwood Greens Drive, Kingwood, Texas 77339. Defendant John Burke may be served at his place of residence at 46 Kingwood Greens Drive, Kingwood, Texas 77339. Defendant Joanna Burke may be served at her place of residence at 46 Kingwood Greens Drive, Kingwood, Texas 77339.
B. Jurisdiction and Venue
3. This Court has subject matter jurisdiction over this cause pursuant to 28 U.S.C. § 1332 because the amount in controversy exceeds the minimum jurisdictional limits of this Court and the parties are citizens of different states. Plaintiff maintains its principal place of business in California and is a citizen of California for purposes of jurisdiction. 12 U.S.C. § 1717(a)(2)(B). Upon information and belief, Defendants John Burke and Joanna Burke are Texas citizens.
4. This Court has personal jurisdiction over Defendants because this lawsuit arises out of, and is connected with, the purposeful acts committed by Defendants in Texas.
5. Venue is proper in this District pursuant to 28 U.S.C. § 1391(a) because all or a substantial part of the events or omissions giving rise to the claims occurred in this District. Furthermore, by Order of the United States District Court, cv H-11-341, signed March 4, 2011, this suit should be assigned to the United States District Court for the Southern District of Texas, Houston Division, Judge Lynn Hughes presiding. See Exhibit “E”, a true and correct copy of the Order of Dismissal.
C. Facts
6. On May 21, 2007, Joanna Burke obtained a loan in the amount of $615,000.00 from Indymac Bank, F.S.B., a Federally Chartered Savings Bank (“Indymac”). The loan (“Loan”) is evidenced by a Texas Home Equity Note executed by Joanna Burke (“Note”) promising to repay that amount, plus interest, in regular monthly installments beginning on July 1, 2007 and ending on June 1, 2037 and a Texas Home Equity Security Instrument executed by Joanna Burke and John Burke (“Security Instrument”) securing the obligations under the Note by granting a security interest in the property located at 46 Kingwood Greens Drive, Kingwood, Texas 77339 (“Property”) and more particularly described as:
LOT FIFTY-SIX (56), IN BLOCK TWO (2) OF KINGWOOD GREENS VILLAGE, SECTION FOUR (4), AN ADDITION IN HARRIS COUNTY, TEXAS ACCORDING TO THE MAP OR PLAT THEREOF RECORDED IN FILM CODE NO. 397052 OF THE MAP RECORDS OF HARRIS COUNTY, TEXAS.
See Exhibit “A”, a true and correct copy of the Note. See Exhibit “B”, a true and correct copy of the Security Instrument. The Loan was made, in part, to payoff and release an existing prior mortgage granted by Defendants to American Home Mortgage in the amount of $174,344.27 (“AHM Lien”).
7. The Loan was made pursuant to Art. XVI, Sec. 50(a)(6) et seq. of the Texas Constitution (“Texas Home Equity Amendment”).
8. Following execution of the Loan, the Loan was acquired by the trust of which Deutsche is the trustee. See Exhibit “C”, a true and correct copy of Assignment of Deed of Trust. Defendants defaulted by failing to make all of the payments required by the Loan. As a result of the Defendants’ default, Deutsche, as trustee, by and through its mortgage servicer, Indymac, notified Defendants that the Loan was in default, that they had thirty (30) days to cure the default and, if they failed to cure the default within thirty (30) days, the maturity of the Loan would be accelerated. Defendants did not cure the default in the time and manner required and, therefore, the Loan was accelerated by Plaintiff. See Exhibit “D”, a true and correct copy of Notice of Acceleration.
9. Deutsche hereby invokes the Texas Declaratory Judgments Act, Chapter 37 of the Texas Civil Practice & Remedies Code, and seeks a judgment declaring the rights and obligations of Defendants with respect to the Loan and the Property. The Texas Home Equity Amendment requires, among other things, that a lien created thereunder may be foreclosed upon only by a court order. TEX. CONT. Art. XVI, Sec. 50(1)(6)(D). Rule 735 of the Texas Rules of Civil Procedure provides that a party seeking to foreclose a lien created under the Texas Home Equity Amendment may file suit seeking judicial foreclosure, a suit or counterclaim seeking a final judgment which includes an order allowing foreclosure or an application for foreclosure under Rule 736. TEX. R. CIV. P. 735.
10. Pursuant to Rule 735(2), Deutsche hereby files this suit seeking a final judgment which includes a declaration allowing Deutsche, directly or through its mortgage servicer, to conduct a non-judicial foreclosure sale. Specifically, Deutsche seeks a declaration that: (1) the Loan is a valid and enforceable contract: (2) Deutsche has performed all of its obligations under the Loan; (3) Defendants have failed to perform all of their obligations under the Loan; (4) Defendants’ failure and refusal to pay the monthly installments due under the Loan constitutes a material breach of the terms of the Loan; (5) Deutsche has provided Defendants with notice that the Loan was in default and that, if they did not timely cure the default, the maturity of the loan would be accelerated; (6) Defendants did not cure the default; (7) Deutsche has provided Defendants with notice that the maturity of the Loan was accelerated: (8) Defendants have not discharged the total balance due under the Loan; (9) Deutsche is entitled to foreclose the Deed of Trust and sell the Property at a non-judicial foreclosure sale upon providing notice of the sale required by Section 51.002(b) of the Texas Property Code; and (10) upon foreclosure of the Deed of Trust and sale of the Property, Deutsche, should it acquire the Property at the sale, is entitled to possession of the Property within thirty (30) days after the say of the sale.
11. Deutsche further seeks to recover its attorneys’ fees and costs of court incurred in preparing and presenting this claim.
D. Judicial Foreclosure and Writ of Possession
12. Pleading further, and in the alternative, Deutsche sues for judicial foreclosure of the Deed of Trust and sale of the Property at a judicial foreclosure sale, pursuant to Rule 735(1) of the Texas Rules of Civil Procedure. Pursuant to Rule 309 of the Texas Rules of Civil Procedure, Deutsche seeks a judgment for the foreclosure of the Deed of Trust, together with an order of sale issued to the sheriff or constable of the county where the Property is located directing the sheriff or constable to seize and sell the Property in satisfaction of the payoff of the Note at the time of the judgment. Further, pursuant to Rule 310 of the Texas Rules of Civil Procedure, Deutsche seeks a judgment for writ of possession in favor of the purchaser of the Property sold in accordance with Rule 309 of the Texas Rules of Civil Procedure against Defendants, and/or any person claiming possession by, through or under the Defendants. If Defendants, or any person claiming under Defendants, occupies or claims possession of the Property after the sale in accordance with Rule 309 of the Texas Rules of Civil Procedure, Deutsche is entitled to a judgment for a writ of possession to place the purchaser of the sale in possession of the Property within thirty (30) days after the day of the sale.
E. Prayer
WHEREFORE, PREMISES CONSIDERED, Plaintiff requests that upon final hearing, that Defendants be cited to appear and answer, and, the court enter judgment that:
1. A declaration that Plaintiff’s statutory probate lien against the Property may be enforced by a public auction or foreclosure sale;
2. A writ of possession against any Occupants of the Property if they fail or refuse to leave the Property after foreclosure;
3. A declaration that Plaintiff is vested with all right title and interest in the property;
4. An Order to proceed with foreclosure pursuant to Tex. Prop. Code § 51.002 and in compliance with T.R.C.P 735 and 736;
5. All other relief, in law and in equity, to which Plaintiff may be justly entitled.
Respectfully submitted,
BARRETT DAFFIN FRAPPIER TURNER & ENGEL, LLP
/s/Jason A. LeBoeuf
Jason A. LeBoeuf
State Bar No. 24032662
15000 Surveyor Boulevard, Suite 100
Addison, Texas 75001
(972) 386-5040 Telephone
(972) 341-0734 Facsimile jasonl@bdfgroup.com
