Counterclaim

STATE OF MAINE DISTRICT COURT LOCATION – SPRINGVALE

YORK, ss CIVIL ACTION DOCKET NO. RE-09-385

Debra J. Reagan

Plaintiff

v.

U.S. BANK NATIONAL ASSOCIATION AS

TRUSTEE ON BEHALF OF SAIL 2006-3 TRUST FUND Et Al

Defendant

and

CitiFinancial , Inc

Party In Interest

COUNTERCLAIM

NOW COMES the Plaintiff, Debra J. Reagan, and files this COUNTERCLAIM against U.S.

BANK NATIONAL ASSOCIATION, in the above mentioned civil action.

Pleadings in this case are being filed by Plaintiff In Propria Persona, wherein pleadings are

to be considered without regard to technicalities. Propria pleadings are not to be held to the same

high standards of perfection as practicing lawyers. See Haines v. Kerner 92 Sct 594. Also see

Power 914 F2d 1459 (11th Cir1990), Hulsey v. Ownes 63 F3d 354 (5th Cir 1995) and HALL v.

BELLMON 935 F.2d 1106 (10th Cir. 1991)."

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FACTS

This plaintiff has asked three (3) times for the defendant to produce the original “wet ink”

mortgage loan document. First time was on May 17, 2010 (See Exhibit A). Second time was

through USPS Certified mail September 21, 2010 (See Exhibit B). Third time was through a

motion to compel filed with this court on November 10, 2010 as well as a demand for the

original Deed of Trust/Security Instrument also being requested along with the “wet ink”

document (See exhibit C). As of this date, even though the defendant’s lawyers declared that the

defendant indeed has the original “wet ink” document, they have refused to produce it for this

plaintiff’s inspection (See Exhibit D). And this honorable court, as of this date, has not moved on

the plaintiff’s motion to compel to demand that the defendant do so. This honorable court also as

of this date, hasn’t moved for a show cause hearing requested by this plaintiff on November 10,

2010 to demand that the defendant not only produce the original documents requested by this

plaintiff but to ultimately prove that the defendant is indeed the true holder in due course and has

standing to foreclose (See Exhibit E).

The reason this plaintiff is demanding for the defendant to produce both the original “wet ink”

mortgage note and the original Deed of Trust/Security Instrument is because this plaintiff can

prove that the defendant is indeed not the true holder in due course and has no standing to

foreclose and has indeed committed frauds upon this court as well as this plaintiff and upon

others, as well as attempting theft and extortion upon this plaintiff in trying to acquire this

plaintiff’s home through, and while knowingly, willingly and recklessly, committing these

frauds. Chief Justice Storey said it best: "You cannot Grant, Vest or Convey that which you are

not Granted, Vested or Conveyed." “A party lacks standing to invoke the jurisdiction of a court

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unless he has, in an individual or a representative capacity, some real interest in the subject

matter of an action.” Wells Fargo Bank, v. Byrd, 178 Ohio App.3d 285-Ohio-4603, 897 N.E.2d

722 (2008). Indymac Bank v. Boyd, 880 N.Y.S.2d 224 (2009), To establish a prima facie case in

an action to foreclose a mortgage, the plaintiff must establish the existance of the mortgage and

the mortgage note. It is the law’s policy to allow only an aggrieved person to bring a lawsuit. The

following points will prove that MERS had no rights to grant/convey my mortgage to the

defendant as it had been sold into a trust fund 19 months prior and that the defendant is not the

true “holder in due course”. Beside the point that MERS had no standing to grant/convey

anything of its own accord, the fact is that they could not grant/convey something that hadn’t

been rightfully granted/conveyed to them in the first place so the defendant has no real interest in

this case.

1. If the defendant has the original “wet ink” mortgage loan note and security instrument, then

why did they submit a copy of the security instrument with a Countrywide/Full Spectrum

Loans officer, Raashed A. Hilaly’s signature attesting to the trueness of the copy (See Exhibit

AA). The only reason to submit a copy, attested by the original lender’s officer to it being a

true copy is because that is all the defendant has. Otherwise, the defendant would only need

to make their own copy from the original that they possess! This is proof that they are lying

and they don’t have the original because the original would not have the attestment from the

previous bank of it being a true copy on it!

2. If the defendant was allegedly assigned my loan in 2007 (See Exhibit F) (which I was never

informed of), why was I paying mortgage payments to Countrywide until 2008 and why was

Countrywide calling me and going to foreclose all the way up to February 2009 (See Exhibit

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J). And why did Bank of America say that I owe them the money in 2008 and they are going

to foreclose even up to today and sending me correspondence to see if I can qualify for help

in my default loan (See Exhibit G). And why did the defendant then assign the loan to

themselves again in 2009 (See Exhibit H) of which I was never informed of (Can a bank

assign a loan to themselves? Is that even legal? And why would a bank even want to assign

to themselves a loan which is, at the date it was assigned, 13 months in default? [See Exhibit

I]). And why did Countrywide in 2009 send me a loan modification (See Exhibit J) if Bank

of America had already bought them out and the loan had already allegedly been assigned to

US Bank in 2007? And how did Bank of America get put onto my State Farm Home Owners

insurance in 2006 as 1st Mortgagee when supposedly Countrywide was my mortgagee and

Bank of America still had two more years before buying them out? (See Exhibit K). Exactly

how many banks own my note? There is only one original loan note. So how is it possible for

three banks to all lay claim to it at the same time? Especially, when it clearly has been

securitized and sold as stock so the original loan note no longer exists (See point #6 on Pg. 8

for explanation)? This means that three banks are lying, and committing fraud. Now does

this honorable court see why the original note instead of a duplicate is much needed in this

case? Three banks are using duplicates to justify their standing to foreclose. Only one can do

so and only if they possess the original “wet ink” mortgage loan note and the original Deed

of Trust/Security Instrument! And since the defendant has not produced the original note and

security instrument, they have not offered any evidence for their claim that they indeed own

the originals. “If plaintiff has offered no evidence that it owned the note and mortgage when

the complaint was filed, it would not be entitled to judgement as a matter of law. Wells Fargo

Bank, v. Byrd, 178 Ohio App.3d 285-Ohio-4603, 897 N.E.2d 722 (2008).

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3. In 1999, the Gramm-Leach-Bliley Act (See Exhibit L) was introduced which allowed banks

to package and securitize their loans onto Wall Street. Now, when a bank grants a loan

(which they don’t loan anything, see next para for details), traditionally they receive 2.5% the

face value of the loan (in a 30 year mortgage loan) over 30 years. But when the banks saw

that they could receive 1.5% immediately (instead of over the course of 30 years) by

securitizing and selling these loans as stock, and also make money on the appreciation of the

stock because they were allowed to hold up to 10% of the security to qualify as a sale under

Financial Accounting Standards, they pooled their mortgages into a SPV (special purpose

vehicle) called a REMIC (Real Estate Mortgage Investment Conduit) Trusts which then got

securitized and sold on Wall Street. When my loan got securitized into that trust it became

stock. That changed the state of the Negotiable Loan Note because once a loan is converted

to stock, it forever loses its security. Nowhere in my loan papers is it stated that they were

going to do this. Once my loan was securitized and sold as stock on Wall Street, the seller

lost control of it. FAS (Financial Accounting Standards) 140 governs the sale and

securitization of a negotiable instrument (See Exhibit M). It states that once an asset is sold,

the seller forever loses the ability to control the asset. So, they sold their right to enforce,

control, or otherwise foreclose on my property. They are no longer the real party in interest

because now it is the shareholders of the REMIC Trust who own the note. They (the bank)

are now just a servicer. They can not have their cake (the money from the sale of my note as

stock at 1.5% face value of my note plus 10% appreciation) and eat it too (getting money

from me for the promissory note that they sold). They have been paid in full for the loan.

4. At the signing of the promissory note and Deed of Trust/Security Instrument something very

interesting happens. Unbeknown to the borrow (but well known to the lender, thus having of 26

“superior knowledge”; see the end of this paragraph) that promissory note becomes a

negotiable note in the amount of what the borrower believes the lender is loaning to them.

The lender then deposits this negotiable note (just like you would a check) into their bank

under an account in the borrower’s name which creates a positive deposit in that amount.

They then take that amount of money out of that account (without the knowledge or

permission of the borrower) and pay the seller. They then take the promissory note and either

sell it to another bank or through a SPV to a REMIC Trust Fund where the note gets

converted into stock and they get 1.5% of the face value of the note plus 10% appreciation of

the stock. Nowhere has the lender ever fronted anything of value towards this contract. But

yet, they have made money, thus being unjustly enriched. In a contract there is supposed to

be “I give something of value, and in return you give something of value”. Where is the

“something of value” from the lender? What has the lender given? Nothing! They created

money based upon the borrower’s signature. It is the borrower whose credit/signature has

created the money of which the lender deposited into their account and paid the seller with.

The lender hasn’t put a dime towards this “loan”, thus hasn’t loan anything. It is the borrower

who has funded the loan. Thus, the loan is already paid for by the borrower. This plaintiff

demands that the defendant produces the bookkeeping records that proves that they “loaned”

this plaintiff anything and also a witness with first hand knowledge of that actual loan. The

Supreme Court of Hawaii in Pacific Concrete Federal Union (Plaintiff) v. Andrew J.S.

Kauaone (defendant) Appellant No 6362 July 17, 1980 says that the bank must produce the

the bookkeeping entries with an affidavit or the banks evidence is hearsay. One can not enter

hearsay in court as evidence. They accepted money from me (my signed promissory note)

and then told me (lied) that they loaned me their money, but it was that very same money that

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my promissory created. They knew this, I did not. They had “superior knowledge” and used

it without disclosing it to me to get me to contract with them (fraud in factum and fraud of

inducement). And then had the nerve to even charge me interest on it which had to be paid

mostly upfront before anything substantial was taken off the principle! I had to pay a sizeable

interest on the money created by my signature on a loan that was funded by me to the bank

that never put up any capital for it but yet got unjustly enriched by selling the very same

promissory note that my signature funded to a REMIC Trust Fund! This not only breaks

many state, federal, and contract laws but also breaks GAAP (Generally Accepted

Accounting Practices) rules which makes the contract an illegal contract. In Fina Supply, Inc.

v. Abilene Nat. Bank , 726 S.W.2d 537, 1987 it says “Party having superior knowledge who

takes advantage of another's ignorance of the law to deceive him by studied concealment or

misrepresentation can be held responsible for that conduct.” In Deutsche Bank v. Peabody,

866 N.Y.S.2d 91 (2008) EquiFirst, when making the loan, violated Regulation Z of the

Federal Truth in Lending Act 15 USC 1601 and the Fair Debt Collections Practices Act 15

USC 1692; “intentionally created fraud in the factum” and withheld from the plaintiff…

“vital information concerning said debt and all the matrix involved in making the loan”.

5. Under the Uniform Commercial Code which governs negotiable instruments (See Exhibit N),

the right for a bank to enforce the instrument and to foreclose, is subject to being a “real

party of interest” or “holder in due course”. If the loan has been sold, as is the case of a

secured trust, then the bank can no longer claim that they are a party of interest or the holder.

They got paid for the loan twice already; the securitization of the trust and sold as stock and

then paid by the appreciation of that stock. So, in trying to collect again without being a real

party in interest or the holder and knowing they aren’t is Fraud #1. In filing this claim of 26

knowing that they are not a real party in interest, they have committed Fraud #2, upon the

court.

6. Once a loan has been converted into stock, it no longer is a loan. A negotiable instrument can

only be in one of two states when it undergoes securitization, but not both at the same time. It

can be either a loan and treated and governed as such, or as stock and treated and governed as

such. But once converted to stock, it is forever stock. When a promissory note gets converted

into stock, that promissory note no longer exists. Because a Deed of Trust/Security

Instrument, securitizes a promissory note and if that promissory note is destroyed or no

longer exists (as it is when converted into stock), then that trust is invalid. The trust secures

nothing. “Mortgage is not a “debt”, but merely a security for payment of debt”- Maine vs

Clack 33 P.2d 283, 43 Ariz. 492 (1934). And since the Deed of Trust/Security Instrument is

what gives the bank the right to foreclose and that Deed of Trust/Security Instrument is

invalid, then the bank loses their right to foreclose. In order to enforce a debt obligation

secured by a mortgage and note, a party must be in possession of the note. See Premier

Capital, Inc. v. Doucette, 2002 ME 83, ¶ 7, 797 A.2d 32, 34 (describing a note associated

with a mortgage as a negotiable instrument). Once a REMIC is formed, its assets (my loan

pooled with many others) are declared a permanent fixture to the REMIC. This is registered

with the SEC. You can not register one thing with the SEC and stock market, and then after

the money is transferred, switch out the asset. This is called “switch and bait”. In other

words, once an asset is registered and traded as part of the security, you can’t just switch it

out because it has become a permanent fixture of the traded asset. This is a permanent

conversion. And this is also why it is so very important for the original “wet ink” mortgage

loan note to be produced. If it got destroyed, by being converted into stock, then the loan has of 26

been paid for. It also breaks the chain of title. Because only the original promissory note has

the legally binding chain of title. When a loan goes into default, the REMIC writes it off.

Once that happens, the REMIC gets tax credits from the IRS. This means it is settled. The

note is gone and paid for. The only way the bank can now try to foreclose on a property is to

buy it back from the open market just like any other debt collector does. And since the debt

has been written off and is no more, the bank buys it for pennies on a dollar. They then try to

reattach the converted loan to the Deed of Trust/Security Instrument and try to say that they

are the real party of interest. In trying to foreclose on this plaintiff’s property knowing this

(or should know as it is basic banking and trading practices under GAAP), the defendant and

their lawyer have committed Fraud #3 by submitting false documentation claiming that the

Deed of Trust/Security Instrument is valid thus being the real party in interest and holder in

due course. By reattaching the loan to the Deed of Trust/Security Instrument they have

deceived this court and plaintiff by adhesion, which this plaintiff objects to and both the bank

and their lawyer should be sanctioned for fraud by adhesion, Fraud # Four. Because my loan

was securitized, it destroyed the note, so anything brought into this court as evidence by the

defendant and their lawyer is prima facie evidence of counterfeit fraud, Fraud # Five. They

also are attempting to steal my home through these fraudulent means which is attempted

theft. They also have committed Fraud # Six, securities fraud. Because if the loan and the

stock exists at the same time (which the defendant’s lawyer admits in Exhibit D), it is known

as double dipping. And double dipping is a form of securities fraud. All of this is clearly

deceptive trade practices. "Fraud vitiates the most solemn Contracts, documents and even

judgments" [U.S. vs. Throckmorton, 98 US 61, at pg. 65]. Also, count 2 of securities fraud

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in submitting a COPY of a promissory note (security note) that has been sold and converted

to stock thus no longer exists.

7. The defendant’s lawyer has also admitted that the defendant is not the original creditor due to

their answer to my second demand for them to produce the original “wet ink” mortgage loan

note and Pg. 5, Notice of Important Rights of the defendant’s November 20, 2009 complaint

for foreclosure (See Exhibit D). Notice the bottom of their response letter. It states “This

communication is from a debt collector”. And Pg. 5 states “the name of the original creditor

is…”. A company may sell the asset (my loan) to a debt collector who will do everything in

their power to collect on the debt. A debt collector is someone who (is not the original

creditor) buys an off-setted debt and tries to collect on it. Debt collectors use deception to

convince people (in this case, this court, the County Record of Deeds and this plaintiff) that

they were assigned the debt. (As proof by the assignments defendant is using as evidence in

this case).Once a debt has been written off for tax purposes, it is discharged. It cannot be

collected again. The individual shareholders of the REMIC are the real and beneficial interest

holders of my promissory note. Since they cannot individually endorse and assign their

portion of the loss, they have to write it off as a bad debt. The trustee of the REMIC cannot

do it either, because s/he is not the real and beneficial holder of the promissory note. The

only way the defendant can try to foreclose now is to rely upon the same deceptive practices

used by all debt collectors. They are only a debt collector now. This is why they need to put a

notice that they are attempting to collect a debt on their correspondence (the original creditor

doesn’t have to do this), just as the defendant’s lawyer did in both the letter and the

complaint. So this is further proof that both the defendant and their lawyer are well aware

and knowingly, willingly and recklessly committing frauds upon this court and this plaintiff. of 26

8. Also, in that letter from the defendant’s lawyer, they state that the defendant has possession

of the original “wet ink” mortgage loan note. If this is a true fact then both the note and the

stock exists at the same time and they are admitting to security fraud. Federal Rules of

Evidence Rules 1002 and 1003 (See Exhibit O) state that the original document should be

produced in court when its terms are material to the argument and that a duplicate is NOT

admissible if there is a genuine question raised as to the authenticity of the original or in

circumstances that would be unfair to accept the duplicate in place of the original. So far, this

plaintiff has given enough proof to not only question the fairness of accepting the duplicate

filed in this case of my mortgage note, but also has given enough doubt as to whether the

original even exists anymore.

9. Under Carpenter v. Longan, the US Supreme Court ruled that the Deed of Trust/Security

Instrument MUST follow the promissory note (See Exhibit P). But if the promissory note

points to one party and the deed to a separate party, then the chain of title is broken.

Bifurcation has occurred. Since this plaintiff has shown that my loan was securitized through

Exhibit F, thus the Deed of Trust/Security Instrument being separated from the note, it is

proof that the chain of title has been broken. And since every Deed of Trust/Security

Instrument states specifically that it is subject to be applicable to state and federal laws, the

assignment of the promissory note without the corresponding Deed of Trust/Security

Instrument, violates state law. Sec. 109(b) of Revised Article 9 of UCC which was enacted

into law in every state provides in Comment 7, "… [O]ne cannot obtain a security interest in

a lien, such as a mortgage on real property, that is not also coupled with an equally effective

security interest in the secured obligation." This is a serious breach of the terms of the Deed

of Trust/Mortgage. When a party to a contract breaches that contract or changes the terms of of 26

that contract without the other party signing agreement to changing the terms (as happened

when the bank securitized my loan and changed it to stock), it makes the contract

(promissory note) voidable. One of the terms I accepted was for a lender to be the holder in

due course of my promissory note. Nowhere in my loan does it state that the state of my

promissory note will be changed and sold as stock, thus also changing the holder in due

course to someone else other than a lender. This changes the terms of my contract. And since

I must give an unqualified acceptance to all the terms of an offer and knew nothing of all

this, the contract is not binding. (See Exhibit Q). If the terms of the Deed of Trust/Security

Instrument is shown to be in violation of state law, then it too is defective. If it is defective,

then it cannot be used to give the lender the “due on sale” clause. The terms of the Deed of

Trust/Security Instrument must be respected in whole and one cannot pick and choose which

part to respect and which part to ignore.

10. When a loan is changed into stock through the REMIC Trust, the shareholders of that trust

became the true holder in due course. This could be thousands of them. With that amount of

parties and with these parties changing hands literally daily, it would be impossible to track

them at the County Record. So, the bankers got together and created MERS (Mortgage

Electronics Registration Systems). Here is the fraud perpetrated on others I mentioned

earlier. In creating MERS, the banks could now circumvent county registration fees and not

pay taxes. The banks feel that they will be insulated from this fraud because the mortgages

were sold into the SPV/REMIC trust fund as a method of controlling their liability. The

problem was that because they never actually transferred the note (and if they did, why didn’t

they pay taxes, hmmm?) as in my case, the transfer took place 19 months later, so the whole

creation of the SPV/REMIC trust fund was fraudulent. Banks are now looking at the choice of 26

of either tanking the entire portfolio back onto their books at massive losses (it would break

the bank) or explaining to the states and IRS why trillions of dollars of taxes were not paid,

Fraud #7, Tax Fraud. MERS functions as a registry much like the County Recorder. But

what is unique about MERS is that they are either named as beneficiary or a nominee (See

Exhibit R) on the Deed of Trust/Security Instrument. This causes several problems. The first

being that to be a beneficiary, one has to put up the money to fund the loan. MERS never

fronted even a dime for the loan. The second problem is MERS recordation is not official.

The only legally recognized recordation on public record is with the County. The third

problem is that MERS is never a true “holder in due course” as the promissory note was

never assigned to them. Thus, they do not have standing to assign it to anyone else. A

recorder is just that, a recorder. They do not have the authority to appoint anyone or assign

anything to anybody. MERS is not a real or beneficial party of interest and this has been

validated in many Federal court decisions to include MERS themselves in an appeal they

filed in Nebraska (See Exhibit Z). Also, by MERS own words in a foreclosure handbook they

made (See Exhibit T). In this handbook, they even describe how to get around the fact that

they don’t hold the promissory note (they admit that the servicer holds it as well as being the

record mortgage holder) by having the servicer’s employees be certifying officers of MERS

so there can be an “in house” transfer of possession of the note so that MERS would be

considered the note holder for purposes of foreclosure! (See footnotes on page 46 of the

MERS Foreclosure Handbook, Exhibit T). And the fact that mortgage lenders, banks and

lawyers went along with this is just mindboggling and makes them as much of integral part

of committing this fraud as MERS. In fact, MERS admits such in their appeal case and

handbook. In my loan it states that the nominee may appoint one. If MERS can not assign it

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to anyone else, then they couldn’t assign it to the defendant. Thus, the defendant is not the

true “holder in due course” and does not have standing to foreclose, as the law and many

court cases say that the defendant must have to file suit (See Exhibit S and Appendix C).

When we have a situation where state law is being violated through improper assignment, the

Deed of Trust/Security Instrument is made invalid. When the trustee is being appointed by

some party, in this case MERS, that is not given the proper authority to do so, this also casts

issue to make the Deed of Trust/Security Instrument defective. In filing an assignment in the

County Record where clearly MERS has no right to assign anything and when the Deed of

Trust/Security Instrument is invalid or defective, this is considered Felony Land Record

Fraud, Fraud #8.

11. In March – May 2006, my mortgage was pooled (with many other notes) and serviced into a

trust fund named SAIL 2006-3 Trust Fund (I was never informed of this transaction)(See

Exhibit W). My mortgage lender sold all rights to my promissory note in order for this trust

to be created as is evident by the discharge of mortgage dated January 20, 2006 (See Exhibit

V). SAIL 2006-3 Trust Fund never went to the York County Record of Deeds office and

recorded that transfer (once again the break in the chain of title). The next recording of

transfer (of which I was never informed of) was done by MERS to US Bank as Trustee to

SAIL 2006-3 Trust Fund on October 16, 2007, nineteen months after the promissory note

was transferred into the SAIL 2006-3 Trust Fund and seventeen months after the closing date

of that fund (See Highlight on Pg. 46 of Exhibit W). Which means it was not possible for the

promissory note to be assigned to that fund seventeen months after the fund closed and when

MERS assigned it to US Bank. Once a promissory note is transferred to a trust fund, it is

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securitized and sold as stock. Once stock, forever stock. So how is it possible then for a

promissory note sold into a trust in March - May 2006 and converted into stock to then re-

appear and be assigned to US Bank National on October 16, 2007 nineteen - seventeen

months later? And then be recorded in a public county record as a mortgage assignment? It is

stock, not a mortgage at this point, being recorded as a valid mortgage assignment by a party

who is not the true holder in due course because the original promissory note is gone and

converted into stock and is separated from the Deed of Trust/Security instrument. This is not

only felony land record fraud, but also"disparagement of title". A "disparagement of title"

suit can be pursued with merit in a variety of circumstances including, but not limited to, the

filing of an invalid lien against real property or virtually any type of recordable instrument

recorded against a property by one without privilege which is untrue.

12. For a contract to be valid, full and fair disclosure (Real Estate Settlement Procedures Act

[RESPA]) and a meeting of the minds or consensus ad idem must be in existence (See Exhibit

Q). I did not know that in signing the Deed of Trust/Security Instrument I was creating a

contract to let the lender securitized my note into a trust to be turned into stock. And the

lender did NOT disclose this at the signing. This is Fraud in Factum, Fraud #9. In inducing

me to sign the contract without disclosing this fact (since the lender knew that in telling me

this truth, that I most likely wouldn’t have signed the contract) they committed Fraud #10,

Fraud of Inducement. Both are a mis representation of a material fact. So my loan right from

the very beginning wasn’t valid and is voidable. "Any false representation of material facts

made with knowledge of falsity and with intent that it shall be acted on by another in entering

into contract, and which is so acted upon, constitutes 'fraud,' and entitles party deceived to

avoid contract or recover damages." Barnsdall Refining Corn. v. Birnam Wood Oil Co. 92 F of 26

26 817. In fact, I was under the impression that I would be doing business with Countrywide

for the next 30 years! But unbeknown to me, even that fact is not true. Because by law, a

bank can only keep a loan for a maximum of five (5) years and then must sell it (See Exhibit

U). This too was not disclosed to me at signing and is another misrepresentation of a material

fact and 2 nd count of Fraud of Inducement. They knew from the start that they were going to

sell my note because MERS is mentioned on page 2 of the security instrument, thus having

superior knowledge. Not all mortgages are registered with MERS. Why? Because most loan

originators don’t use MERS when they don’t intend to sell the servicing rights.

13. If a promissory note is owned by thousands of parties, then no one party may lay claim on

the promissory note. If no one party can be named beneficiary or lender, then the promissory

note is defective. If no loan assignment was properly done, it cannot be fixed. A lender

cannot simple reverse engineer the title of the Deed of Trust/Security Instrument or

promissory note to make it better. Once an instrument is defective, it cannot be used to

collect a debt. So, even as a debt collector, they can not collect on a defective instrument.

14. The Florida case that exposed that these banks trying to foreclose after securitization had

used robo-signers, alerted homeowners that something just wasn’t right and they should

check their documents. Well, this plaintiff is no different and I did. I have found the

following:

1. On the Discharge of Mortgage form filed by MERS on February 2, 2006 the notary’s

signature of Corey Kowalsky does not match other documents with His/her signature.

They are dramatically different (See Exhibit X).

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2. On the Assignment of Mortgage filed by MERS to US Bank National on November 2,

2007, I compared Kimberly Dawson’s signature with other documents she allegedly

signed and they are different (See Exhibit X2).

3. Also on the above #2 Assignment, the notary signature Jorge Vargas is not only different

from other documents with his signature, but is dramatically different from his signature

on his application for appointment form which is on file with the Texas Secretary of State

(See Exhibit X3).

Note: Also please see that in one document X2, are the same two people on my assignment,

Kimberly Dawson and Jorge Vargas. What are the chances of these two people’s signatures

being different at the same time together, from mine?

4. On the Assignment of Mortgage filed by US Bank National on August 28, 2009 the

signature of the Vice President of US Bank National, Jill Wosnak is different from the

signature of the same person on Page 2 of the Certification of Plaintiff (now defendant)

filed in this court as evidence in this foreclosure suit. These two signatures are also

dramatically different from other documents purporting that Jill Wosnak signed it before

a notary (See Exhibit X4).

My questions to this honorable court are these:

1. How can we possibly know which signatures are the real ones (with the exception of the

one from the state of Texas for Vargas) of the people purported to have signed my

documents?

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2. How can such important documents conveying real property have standing of validity

with such a wide variety of signatures of the same persons?

3. How can we give any validity to the attestments of the notaries when, not only the

people’s signatures who allegedly came before them don’t match, but the notaries’

signatures are just as questionable?

Someone (Some people), somewhere is lying and perpetrating a fraud on a massive scale

here and unfortunately, my home is included in all this mess! And since the defendant and

their lawyer are including these forged instruments into this court case, they are a contributor

(at the very least), to the perpetuation of this fraudulent activity. Title 18 USC § 474

Whoever, with intent to defraud, makes, executes, acquires, scans, captures, records,

receives, transmits, reproduces, sells, or has in such person’s control, custody, or possession,

an analog, digital, or electronic image of any obligation or other security of the United States

is guilty of a class B felony. And since there have been many court cases showing this fraud

(some that includes this defendant), and it’s been all over the news media outlets for some

time, the defendant and their lawyer are well aware of it. (Otherwise, they’ve been hiding in

an isolated cave deep in Siberia!). This means that they blatantly don’t care about committing

fraud because they have filed this lawsuit anyways. I found all this out with just a wee bit of

investigation. Couldn’t a knowledgeable law firm such as the defendant’s or even the big,

rich bank of US Bank National have found this out as well before entering these fraudulent

documents as evidence in order to support their claim of right to foreclose?

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And since all of these frauds and violations of state and federal laws were done through

communications across state lines, this also falls under the RICO statute of violations (See

Exhibit Y).

15. Also, should this defendant receive a favorable judgment when it is clear that the plaintiff is

not adequately protected against loss that might occur by reason of claim by another bank

(such as Bank of America as included in Exhibit G) to enforce this duplicated promissory

note and security instrument? No one has the original documents, just duplicates. Who

knows how many duplicates have been distributed and how many will in the future come

knocking at my door saying… “I hold your note and deed, you need to pay me or I’ll

foreclose”. Three already have (at the same time) in my case, so far. If the original

documents were indeed destroyed when they were securitized and sold as stock, that means

they were intentionally destroyed. Shouldn’t that act of intentional destruction discharge the

obligation to pay? Especially since it means that they got paid for the instrument through the

sale of the stock? Why should they then get a third bite (the sale of stock, plus the 10%

interest plus ME) at the apple? A fourth bite if you include the government bailout!

I don’t know about you, your honor, but I think that this defendant (and parties in interest) have

already been paid enough for my loan. They got paid 1.5% of the face of my loan when they

securitized it and sold it as stock, a second time on the appreciation of that stock and a third time

with the government bailout given by President Obama (again, my money, as well as everyone

else’s). Plus, I have personally paid over $145,000.00 in payments on an $83,000.00 loan! I have

proof that it has been paid in full by the SAIL Trust’s own records (See Exhibit W). How many

more times are they going to get paid for this loan? A loan that not only has been paid several

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times over, but also is defective and not valid right from the start! In HAZEL-ATLAS GLASS

CO. v. HARTFORD-EMPIRE CO., 322 U.S. 238 (1944) it states there is no statute of

limitations on fraud. They have committed many frauds, lied, cheated and made a mockery of,

and blatantly thumbed their noses at, state and federal laws. And they have been doing this over

a period of many years. They filed this suit full knowing about all this and hoped that neither this

court nor this plaintiff was wise to their frauds and misdeeds.

CONCLUSION

This has to stop your honor! And the banks as well as their lawyers must be held accountable for

this and sanctioned.

WHEREAS, to just give me clear title and dismiss this case with prejudice is not enough,

because they will not be punished as they lose absolutely nothing as they have already been paid

well for this loan.

WHEREAS, when fraud has clearly been shown to have been committed, then the injured party

may sue for treble damages. In this case, treble the amount of the loan the defendant says is due

($152,848.15 x3= $458,544.45).

WHEREAS, I submit, that even that is not enough as they have already made well over this

amount and so once again won’t be punished in any way. If the defendant and their lawyer stand

accountable where it will be felt the most, in their wallet, then maybe they will think twice

before doing this again because this court will have set a precedent for others to be able to defend

themselves with and it would be very costly for this bank and lawyer (or any other bank or

lawyer, as well) to even attempt doing it again.

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WHEREAS, in May, 2009, Mr. Arnold said in Mortgage Technology Magazine, “Every system

in the mortgage industry can switch MERS registry on or off at will,” referencing that both the

Obama administration and Congressional leaders are aware of this. Not until MERS became the

primary focus for challenges to legal standing in foreclosure courts as reported as the alternative

media, have the main stream media and the mortgage industry have begun to realize that

property records cross the United States have become totally unreliable. It has taken more than a

decade for the courts to recognize that MERS has become a mortgage backfire system leaving

clouded titles in over 65 million loans since 1997.

WHEREAS, courts across the nation must comply with the law.

THEREFORE, I request of this honorable court, that to show the defendant and their lawyer that

the frauds and law violations that they have committed are so impugnant to the fair dealings and

practices in law, and to the sensibilities of this court in bringing forth such a fraudulent suit

before it, with full knowledge of the fraud, that punitive damages be assessed at treble the

amount of the loan to each count of fraud, violations of law and RICO statues and for the

attempted theft and for extortion , along with awarding this plaintiff complete and clear title to

my property, 11 Bennett Street in Sanford, Maine and dismiss this case with prejudice plus any

other relief this honorable court deems just, fair and appropiate.

LIST OF FRAUDS

This is a list of frauds that this plaintiff has found in her opinion has occurred and from her

conclusion of the facts. It is not to represent that this is a complete list as the plaintiff is not a

lawyer and may have missed some other frauds that she is not aware of.

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http://www.homeeqp.com/assets/docs/may2009-kersnar.pdf

1. Fraud #1 – Trying to collect on a debt that the defendant knows that they are NOT the

“real party in interest” but declaring they are, when in truth are only a debt collector, with

deceptive trade practices.

2. Fraud #2 – Knowingly, willingly and recklessly filing a claim to deceive this court by

saying they are the “real party in interest” when they are NOT and know they aren’t..

3. Fraud #3 - Submitting false documentation claiming that the deed of trust is valid.

Because my loan was securitized, it destroyed the note and separated it from the deed of

trust making the deed of trust invalid so this evidence is prima facie evidence of

counterfeit fraud.

4. Fraud #4 - Submitting false documentation claiming that the promissory note is valid.

Because my loan was securitized, it destroyed the note so this evidence is prima facie

evidence of counterfeit fraud.

5. Fraud #5 - Submitting false documentation claiming that the discharge of mortgage is

valid. Invalid/forged signatures of bank officials and notary signatures.

6. Fraud #6 – 2 counts of submitting false documentation claiming that the assignments of

mortgage was valid. Invalid/forged signatures of bank officials and notary signatures.

7. Fraud #7 – Falsely using notary stamps. If the signatures are forged, then the actual

person to whom that notary stamp belongs to didn’t use it. Someone else did who isn’t

authorized to.

8. Fraud #8 - Reattaching the discharged loan (promissory note) to the deed of trust which is

adhesion.

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9. Fraud #9 – 2 counts of Security Fraud - Defendant’s lawyer states that defendant is in

possession of the “original note” as of September 30, 2010, thus admitting that the

promissory note and the stock exists at the same time which is double dipping and

securities fraud. And submitting a copy of the promissory note (which is a security note)

after it has been destroyed by being sold and converted into stock and thus no longer

exists is security fraud.

10. Circumventing registration fees and taxes by using MERS instead of the County

Recorder violates state laws and is tax fraud, Fraud #10.

11. In filing an assignment in the County Record where clearly MERS has not right to assign

anything and when the Deed of Trust/Security Instrument is invalid or defective, this is

considered Felony Land Record Fraud, Fraud #11.

12. Fraud in Factum, Fraud #12 (See note 1)

13. 2 counts of Fraud in inducement, Fraud #13 (See note 1)

14. In securitizing my note, it separated the deed from the promissory note and in assigning

the note without the deed violates state and federal law under Revised Article 9 UCC

code Section 109(b) Comment 7.

15. Attempted theft of my home through fraudulent means.

16. Because this defendant threatened me with foreclosure if I didn’t pay them what they say

is owed on my loan through filing in court a foreclosure suit even though they know they

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have no standing to do so and have committed many frauds to accomplish this, they have

committed a felony, extortion.

17. Because these frauds and violations used communications over state lines, they have

violated Federal RICO statutes. 5 counts; 1. mail fraud, 2. wire fraud, 3. financial institute

fraud, 4. racketeering and 5. engaging in monetary transactions in property derived from

specified unlawful activity.

Notes.

1. In not disclosing material facts and using superior knowledge to get me to enter into a

contract, the lender committed fraud in factum and fraud of inducement. Now, even

though the defendant was not the one at the original signing, the fact is, they took over

the contract assets and liabilities by buying it and saying that they are now the lender.

Thus, they took on the liability of what was or was NOT disclosed at the original signing.

Also, in the irreverseable act of separating the promissory note from the Deed of

Trust/Security Instrument, and causing bifurcation, it made the contract defective and

voidable before the defendant bought it. And because GAAP rules were broken by the

original lender, the contract is illegal. This amounts to “caveat emptor” and the onus is on

the buyer to have all the information about the contract before buying it! “It is not

necessary for rescission of a contract that the party making the misrepresentation should

have known that it was false, but recovery is allowed even though misrepresentation is

innocently made, because it would be unjust to allow one who made false

representations, even innocently, to retain the fruits of a bargain induced by such

representations.” [Whipp v. Iverson, 43 Wis 2d 166]. But the whole fact is that this of 26

defendant, being a big, major bank and being in the banking business for a long time, is

very well aware of all this information I have provided above and has elected to

knowingly, willingly and recklessly participate in this massive fraud in hopes to be

unjustly enriched by this plaintiff. And have used this honorable court as the vehicle to

make it happen.

CERTIFICATE OF SERVICE

I, Debra J. Reagan, hereby certify that a copy of this COUNTERCLAIM was served on April 5, 2011 via US Certified Mail _________________________________________ to :

Shechtman Halperin Savage, LLP

1080 Main Street

Pawtucket, RI 02860

And regular US Postal Mail to:

CitiFinancial, Inc.

647 US Route 1

Suite C1 BO1

York, Maine 03909

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_____________________________ ____________________

Debra J. Reagan Date Signed

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Counterclaim

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Transcript of Counterclaim