Counterclaim(s)

1. Bank of America N.A. has failed to state a claim upon which relief can be granted and has No
Right of Possession.

Arthur Hinton and LovieDee Hinton, hereinafter referred to as the Plaintiffs in this
Counterclaim have mailed a Qualified Written Request to Bank of America N.A. hereinafter
referred to as the Defendants in this Counterclaim, by Certified, first class postage pre-paid us
mail, and Bank have refused to respond.

Federal law imposes a strict duty on lenders and servicers to both acknowledge and
respond timely to a defined type of inquiry known as a qualified written request, or
QWR. Under the federal Real Estate Settlement Procedures Act and Regulation X, a
QWR must be one that requests information or states reasons for the borrowers belief
that the account is in error. See 12 U.S.C. 2605(e)(1)(B). To qualify, the written request
must also include the name and account of the borrower or must enable the servicer to
identify them. Id. In essence, the servicer has 60 days (Dodd-Frank provides that this
will decrease to 30 days after promulation of the certain final regulations by the CFPB)
pursuant to to (1) correct the borrowers account and provide written notice of the
corrections; (2) investigate and provide the borrower with a written clarification as to
why the account is correct; or (3) investigate and either provide the requested information
or explain why the requested information is unavailable. See 12 U.S.C. 2605(e)(2)(A),
(B), and (C). In what can best be described a mixed result for servicers, the U.S. Court of
Appeals for the Ninth Circuit has now expanded the arguably broad definition of a QWR
but limited its application to the servicing of a borrowers loan.

In Medrano v. Flagstar Bank, FSB, et al., the 9th Circuit expressly adopted the 7th
Circuits approach toward QWRs in Catalan v. GMAC Mortgage Corp., 629 F.3d 676
(7th Cir. 2011), holding that no magic words are required for QWRs and [a]ny
reasonably stated written request for account information can be a qualified written
request. As a result of this ruling, lenders and servicers must essentially treat every
written communication from a borrower as a possible QWR. Despite adopting this broad
definition, the 9th Circuit still affirmed the dismissal of the borrowers RESPA claim
because the borrowers communications challenged the terms of their loan and
requested modification of various loan and mortgage documents, and, as such, they
were not qualified written requests relating to the servicing of Plaintiffs loan. As the
Medrano court emphasized: the statutory duty to respond does not arise with respect to
all inquiries or complaints from borrowers to servicers. RESPA defines the term
servicing to encompass only receiving any scheduled periodic payments from a
borrower pursuant to the terms of any loan, including amounts for escrow accounts . . . ,
and making the payments of principal and interest and such other payments. Id.
2605(i)(3). Servicing, so defined, does not include the transactions and circumstances
surrounding a loans originationfacts that would be relevant to a challenge to the
validity of an underlying debt or the terms of a loan agreement. The Court explained
that because [RESPA] does not require a servicer to respond to such requests, the
district court correctly dismissed Plaintiffs claim. The practical effect of this portion
of the ruling is immense: Numerous borrowers have employed a broad Internet-driven
tactic of challenging the underlying loan. And, with this ruling, the 9th Circuit rejects
such written challenges, even when characterized as QWRs.

2. No Standing and Capacity. Not the Holder In Due Course

To establish standing when bringing forth a foreclosure suit, a lender must have suffered an
injury in fact for which a judicial decision may provide a redress or remedy. [1]Further, standing
requires that the party requesting relief (or the lender in a foreclosure context) must possess a
personal claim, status, or right that is capable of being affected by the grant of such relief. [2]
Whether the lender has standing to sue is determined from the allegations contained within the
complaint. [3] Standing is a jurisdictional requirement which must be continuous throughout the
foreclosure suit. [4] In other words, a lender must have proper standing when it files a suit
against a defendant and may not retroactively establish its standing to sue. [5]
Section 1504 of The Illinois Mortgage Foreclosure Law ("IMFL") establishes that only "the legal
holder of the indebtedness, a pledgee, an agent, or the trustee under a trust deed...." may file
foreclosure. [6] If the lender asserts a right to foreclose within its initial complaint, then the
records must affirmatively show the capacity in which the lender is suing. [7] The lender must
provide adequate proof that it holds legal title from which no other party can recover at the time
that it filed its complaint. [8] In order to verify whether a lender has proper standing, the first
step is to review the allegations of the complaint and the attached mortgage and promissory note.
The most important document to review is the promissory note, which evidences the borrower's
obligation to the lender. In order to verify proper standing, a borrower must understand how a
promissory note is transferred between banks. The standard promissory note in a foreclosure
action is a negotiable instrument under the Illinois Uniform Commercial Code ("IUCC") . A
negotiable instrument is an unconditional promise to pay a fixed amount of money . [9] The
IUCC states the following in regards to enforceability of a negotiable instrument: A "person
entitled to enforce" an instrument means (i) the holder of the instrument, (ii) a nonholder in
possession of the instrument who has the rights of a holder, or (iii) a person not in possession of
the instrument who is entitled to enforce the instrument pursuant to Section 3-309 or 3-418(d)."
[10]
The term "holder," with respect to a negotiable instrument, is defined as the person in possession
if the instrument is payable to bearer [11] or, in the case of an instrument payable to an identified
person, the identified person if that person is in possession. [12] A person can become a holder
when a negotiable instrument is either issued to that person, or as the result of a subsequent
negotiation that occurs after issuance. [13] Furthermore, when a negotiable instrument is first
issued, there must also be a delivery of the instrument, meaning an initial voluntary transfer of
possession. [14]
As a negotiable instrument, the subject mortgage is negotiated either by assignment or
indorsement. [15] Either way, negotiation always requires a change in possession of the
instrument because nobody can become the holder of a negotiable instrument without possessing
the instrument either directly or through an agent. [16] Ordinarily, a promissory note is
transferred by negotiation, which is effected by delivery alone in the case of a bearer instrument

or by indorsement plus delivery in the case of an order instrument. [17] In both instances,
possession of the promissory note is a necessity of being a holder of the note. [18]
Therefore, to verify if the suing plaintiff in the foreclosure case is the proper party, a borrower
must review the chain of title of the subject foreclosure suit and make sure that the plaintiff has
possession of the promissory note. If a promissory note has been properly transferred, the
indorsements on a promissory note will establish a chain of ownership leading from the lending
bank to the foreclosing bank. However, if the plaintiff cannot show a proper chain of title or
produce the original note, the court may dismiss the foreclosure suit for failure to verify that it is
the proper party to bring forth the foreclosure suit.

[1] P & S Grain, LLC v. County of Williamson, 399 Ill. App. 3d 836, 842 (5th Dist. 2010).
[2] Id. at 844.
[3] Id.
[4] Italia Foods, Inc. v. Sun Tours, Inc., 399 Ill. App. 3d 1038, 1069 (2nd Dist. 2010).
[5] Id.
[6] See 735 ILCS 5/15-1504(a)(3)(N).
[7] Bayview Loan Servicing, LLC v. Nelson, 382 Ill. App. 3d 1184, 1188 (5th Dist. 2008).
[8] Ray v. Moll, 336 Ill. App. 360, 364 (4th Dist. 1949).
[9] See 810 ILCS 5/3-104(a).
[10] See 810 ILCS 5/3-301.
[11] A negotiable instrument is payable to bearer if it is not indorsed (i.e. signed) to a specific
entity.
[12] See 810 ILCS 5/1-201.
[13] See 810 ILCS 5/3-201, Official Comment 1.
[14] See 810 ILCS 5/3-105(a).
[15] See 810 ILCS 5/3-201, See also Lewis v. Palmer, 20 Ill. App. 3d 237, 240 (4th Dist. 1974).
[16] See 810 ILCS 5/3-201, Official Comment 1.

[17] See generally 810 ILCS 5/3-205.

[18] Id.

3. Failed to verify and validate.

4. No Valuable Consideration
5. No Meeting of the minds
6. Defaulted on validation, verification and QWR Requests
7. Elements of a valid contract are absent, i.e. Meeting of the minds, valuable consideration and
wet-ink signatures by natural people
8. Original lender and every entity thereafter does not possess:
i)

FR2046 (showing the original balance sheet)

ii) IRS 1099OID which will identify who the principal funds originated from, which capital

iii)
iv)
v)
vi)

and interest was taken and who the recipient of the funds is, and who is holding the
account in escrow, unadjusted.
Form S3-A (registration) to show if, when and where the Promissory Note was sold.
The 424 B-5 prospectus (security filing),
RC-S and RC-B call schedules, and
FAS 125, 133, 140, 5, and 95 forms are required.