10-2205- CV

NO._______________

MARIA AND JOSE PEREZ IN THE DISTRICT COURT

V. OF GUADALUPE COUNTY

BAC HOME LOANS SERVICING LP,

RECONTRUST, NA 25 th JUDICIAL
____ DISTRICT

PLAINTIFF’S VERIFIED ORIGINAL PETITION

APPLICATION FOR TEMPORARY RESTRAINING ORDER,
PRELIMINARY INJUNCTION
AND
REQUESTS FOR DISCLOSURES AND ADMISSIONS

TO THE HONORABLE JUDGE PRESIDING:

Plaintiffs Maria and Jose Perez, husband and wife, residents of

Seguin, Guadalupe County, Texas (“Plaintiff”) complain of BAC Home

Loans Servicing LP., (“BAC”) and RECONTRUST, N.A. (“Recon”)

collectively referred to as ( “Defendants”) and for cause of action state:

Discovery Level

1. This action is governed by TRCP 190.3 (Level 2).

Corporate Disclosure - Public Company

2. Bank of America Corp., the direct or indirect parent of Bank of

BAC Home Loans Servicing LP., and RECONTRUST, NA, is a publicly

traded, NYSE (symbol BAC) company.

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 Jurisdiction and Venue

3. This action seeks damages within the jurisdiction of the

District Court. The District Court may quiet title and enter declaratory

relief. See Tex .Civ. Prac. & Rem. Code §37.004 1

4. Venue is proper under the mandatory venue rules, C.P.R.C. §

15.011(a) (5) 2 as this action seeks to determine that Defendants have no

present right to foreclose on Plaintiffs’ home and to quiet title, remove

encumbrances and obtain damages arising from Defendants’ wrongful

efforts to collect a previously paid note and deed of trust covering Plaintiffs’

home, property located in Seguin, Guadalupe County.

5. Plaintiffs request that the clerk of the Court prepare citation

and that same be served by the Clerk as authorized by the Texas rules by

certified mail, return receipt requested, to the parties and addressed as

follows:

A BAC Home Loans Servicing LP may be served by serving

its registered agent for service of process to wit

BAC Home Loans Servicing LP

% CT CORPORATION SYSTEM
350 N. ST. PAUL ST. Suite 2900
DALLAS, TX 75201

1
References to the Texas Civil Practices and Remedies Code will hereafter be “CPRC”.
2
See, CPRC Sec. 15.011. LAND. Actions for recovery of real property or an estate or
interest in real property, for partition of real property, to remove encumbrances from the title to
real property, for recovery of damages to real property, or to quiet title to real property shall be
brought in the county in which all or a part of the property is located.

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 B RECONTRUST, N.A. may be served by serving any officer or
agent at its principal business address in the State of Texas, to wit

RECONTRUST N.A.
2380 Performance Drive, TX 2-985-07-03
Richardson, TX 75082

Background

6 Recording acts, like Tex. Prop. Code chapter 13, 3 provide

legal effect (actual and constructive actual notice) for real property deeds,

deeds of trust and assignments of the obligations secured by liens therein

created or retained against third parties without actual notice of the

instrument. The act of recording a document, for which fees are charged

by County Clerk of the County where the property is located, requires that

the instrument have certain formalities, including signature and

acknowledgement. These formalities have served Texans well for

generations providing a written “paper trail” by which owners and

mortgagees or assignees of either can be ascertained. And the fees for

recording of documents, while small per item in Texas 4 , represent a

3
Sec. 13.001. VALIDITY OF UNRECORDED INSTRUMENT. (a) A conveyance of real
property or an interest in real property or a mortgage or deed of trust is void as to a creditor or to a
subsequent purchaser for a valuable consideration without notice unless the instrument has been
acknowledged, sworn to, or proved and filed for record as required by law. (b) The unrecorded instrument
is binding on a party to the instrument, on the party's heirs, and on a subsequent purchaser who does not
pay a valuable consideration or who has notice of the instrument.
Sec. 13.002. EFFECT OF RECORDED INSTRUMENT. An instrument that is properly recorded
in the proper county is: (1) notice to all persons of the existence of the instrument; and (2) subject to
inspection by the public.
4
Other states may impose a “transaction tax” or “stamp fee” for recording of instruments varying
by the dollar amount of the stated transaction. Texas does not.

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 significant element of recovery of the costs of operating the county clerk’s

real property division.

7 At the risk of oversimplification, Wall Street’s interest in

“securitizing” mortgages by creating mortgage backed securities to be sold

without specific reference to the underlying mortgage loans resulted in

efforts to free up transfer of interests in the loans (notes secured by deeds

of trust) by eliminating traditional elements of transactions in notes secured

by deeds of trust covering real property, specific endorsement of the note

and recorded assignment of the deed of trust in the county real property

records. The “mortgage backed securities industry” did so by avoiding that

paper work and even the nominal fees for recording of the assignment of

the mortgages by using a “straw lender” or “nominee” to be the named

beneficiary of the recorded original deed of trust when the loan was made.

Using this short cut, assignments of notes secured by deeds of trust

(mortgages) were no longer recorded in the real property records where

the property securing the loan was located.

8 Mortgage Electronic Registration Systems, Inc. (“MERS”)

entered into the business of being the recorded entity as “nominee” for the

true lender. According to MERS’ statements about its history, MERS has

“saved” lenders “billions in recording fees.” But at the price that there is no

open public record to inspection of who was or is the actual assignee of

the loans secured by real property. Recordkeeping of who the owner of

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 the real property secured loan was, or transfers of the ownership of

interests in the loan from time to time, would be handled by some other

facility or means not accessible to the public. Texas recognized the

market imperative created by securitization, adopting a new set of

definitions to include a “book entry system” and mortgage servicer into its

lexicon, expansively defining both Mortgagee and Mortgage Servicer,

giving them rights and responsibilities and after notice allowing the

Mortgagee’s enforcement of contract liens by non-judicial sale 5 .

The Perez’s “Morgan Loan”

9 In 2007 Maria and Jose Perez purchased the property and

improvements commonly called 148 Tonto Trails, Sequin, Texas and

legally described as: LOT: 107 BLK: ADDN: GERONIMO'S HAVEN #3

(the “Property”). This purchase was financed in part by a note payable to

Mortgage Electronic Registration Systems, Inc., as nominee for Morgan

Financial d/b/a Morgan Funding and secured by a deed of trust covering

the Property recorded at Real Property Records Book 2559 at page 512

(the “Morgan Loan”). There are, on information and inspection of the real

property record of Guadalupe County, no recorded assignments or

transfers of the Morgan Loan to BAC.

5
Tex. Prop. Code Art 51.0001 added “’Mortgage servicer’ means the last person to whom a
mortgagor has been instructed by the current mortgagee to send payments for the debt secured by a security
instrument. A mortgagee may be the mortgage servicer. "Mortgagee" means: (A) the grantee, beneficiary,
owner, or holder of a security instrument; (B) a book entry system; or (C) if the security interest has been
assigned of record, the last person to whom the security interest has been assigned of record.
(5) "Mortgagor" means the grantor of a security instrument.

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 10 In August 2009 Plaintiff’s paid the Morgan Loan in full with the

proceeds of a refinancing loan. This payment is shown by the records of

Orange County Title Company of Texas (see Business Record Affidavit

attached and incorporated herein) documenting payoff of the Morgan Loan

by the title company’s wire transfer of funds effected on August 5, 2009.

The payoff was made to the Mortgage Servicer of the Morgan Loan, Taylor

Bean & Whitaker.

BAC attempts to collect the Perez’s “Morgan Loan”

11 BAC claims to have received rights in the Morgan Loan from

Taylor Bean & Whitaker as of September 1, 2009. 6 Notwithstanding that

by then the Morgan Loan was fully paid BAC has attempted repeatedly to

collect the paid off Morgan Loan.

6. Since September 2009 BAC has sent collection letters,

dunning statements and threatening letters to Plaintiff demanding payment

of the Morgan Loan. Among the letters sent to Plaintiff after the Morgan

Loan was paid off were two sets of notices that the Morgan Loan shortly

would be transferred to HUD and that Plaintiff were going to lose their

home.

6
Letter Notice from BAC dated 8-21-09 attached, stating:

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 7. Since first receipt of dunning notices from BAC, Plaintiffs have

undergone the frustrating process of trying to speak with representatives of

BAC. Patiently Plaintiffs have repeated ventured into the labyrinth that is

BAC explaining that the Morgan Loan was fully paid in August 2009,

before BAC claims that it received rights to the Morgan Loan, and that they

are current with their refinanced note. Despite oral assurances that BAC

would clear up the problem of its records, Defendants continue to

prosecute collection of the paid obligation.

8. In September 2010, Plaintiff received letters from RECON on

behalf of BAC as the “mortgage servicer” of the paid Morgan Loan advising

that it had been designated as substitute trustee to enforce the Morgan

Loan. Included within the demand was notice of default of the Morgan

Loan and notice of substitute trustee’s sale setting a foreclosure sale date

of November 2, 2010 in enforcement of the Morgan Loan. A true copy of

the September 2010 demands made on Plaintiff and its enclosure – notice

of substitute trustee’s sale is attached as an exhibit hereto. RECON

asserted that it was acting both as substitute trustee and as a debt

collector and servicer.

9. The recent foreclosure “moratorium” declared by Bank of

America, parent to BAC and RECON, on information and belief is in partial

recognition that the tried and true means of actual assignment and

endorsement of the note and deed of trust, written loan servicing

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 agreement and required notices must be correctly completed before

enforcement (“administration”) of the deed of trust. 7

10. The notice and demands issued by Defendants to Plaintiff on

the Morgan Loan have caused Plaintiffs to suffer emotional distress,

mental anguish, lose sleep and incur expenses. The notices are wrongful

as the Morgan Loan was paid.

11. BAC and RECON are debt collectors of the Morgan Loan and

Plaintiffs are consumers as such terms are defined by fair debt collection

practices laws. Plaintiffs have been damaged by Defendants conduct and

breach of the contract, the Morgan Loan which Defendants are wrongfully

seeking to collect.

12. Plaintiffs prior to commencement of this suit made demand on

Defendants to withdraw the notice of November 2010 foreclosure sale of

the Property and verify the amount of the obligation Defendants were

seeking to collect. Such demand was made under the Federal Fair Debt

Collection Practices Act and required response within five days of the

demand.

7
Texas law was amended to recognize the role of the mortgage servicer and the servicer’s power to
administer or enforce the deed of trust. Tex. Property Code, Sec. 51.0025 provides: “ ADMINISTRATION
OF FORECLOSURE BY MORTGAGE SERVICER. A mortgage servicer may administer the foreclosure
of property under Section 51.002 on behalf of a mortgagee if: (1) the mortgage servicer and the mortgagee
have entered into an agreement granting the current mortgage servicer authority to service the mortgage;
and (2) the notices required under Section 51.002(b) disclose that the mortgage servicer is representing the
mortgagee under a servicing agreement with the mortgagee and the name of the mortgagee and: (A) the
address of the mortgagee; or (B) the address of the mortgage servicer, if there is an agreement granting a
mortgage servicer the authority to service the mortgage.

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 13. Defendants did not withdraw the notice of foreclosure.

Defendants did not verify the obligation or existence of any debt secured

by the Morgan Loan’s deed of trust.

14. All predicates to suit have occurred.

15. Plaintiff has been required to engage the undersigned

attorney, licensed to practice law in the State of Texas. Plaintiffs’ rights to

recovery of attorney fees from Defendants arise under: C.P.R.C. § 37.009

(declaratory judgment); § 38.001 (contract), and 15 USC §1692 et seq

(FDCPA).

FIRST CAUSES OF ACTION DECLARATORY RELIEF

TO REMOVE ENCUMBERACE OR QUIET TITLE

16. Plaintiffs incorporate all prior allegations of this petition.

17. Defendants are wrongfully seeking to enforce the deed of trust

executed as part of the Morgan Loan. As applied that deed of trust is a

cloud on Plaintiffs’ title to the Property and must be declared inoperative.

18. Plaintiffs are entitled to receive and here demand that

Defendants withdraw their claims to hold any note or right to enforce the

Morgan Loan, and that Court enter its judgment declaring that Defendant

BAC has no right to recover from Plaintiff on the Morgan Loan, declaring

and removing liens securing the Morgan Loan from the title to the Property

save as it may be equitably held by their refinancing lender.

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 19. Plaintiffs seek recovery from Defendants of their reasonable

and necessary attorney fees and contingent awards of attorney fees in the

event Defendants or any of them undertake unsuccessful appeals or

proceed for or obtain discretionary review in the Supreme Court.

SECOND CAUSES OF ACTION – MONEY DAMAGES

20. Plaintiffs incorporate all prior allegations of this petition.

21. Defendants’ efforts and communications seeking to collect the

Morgan Loan after it was paid off breached the contract that was the

Morgan Loan causing Plaintiffs’ damages and consequential damages

foreseeable at the time of the contract.

22. Plaintiffs seek recovery of reasonable attorney fees through

judgment and conditional awards of attorney fees should Defendants or

either of them prosecute unsuccessful appeal of the judgment rendered

including but not limited to proceedings for discretionary review and further

proceedings, if any in the Supreme Court of Texas.

23. Defendants’ efforts and communications seeking to collect the

Morgan Loan after it was paid off were wrongful under violation of the

Texas and Federal Fair Debt Collection Practices Acts proximately causing

Plaintiffs’ actual damages and if no actual damages be proved, Plaintiffs’

seek statutory damages.

24. Plaintiffs seek recovery of reasonable attorney fees through

judgment and conditional awards of attorney fees should Defendants or

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 either of them prosecute unsuccessful appeal of the judgment rendered

including but not limited to proceedings for discretionary review and further

proceedings, if any in the Supreme Court of Texas.

25. Defendants’ efforts and communications seeking to collect the

Morgan Loan after it was paid off breached a civil duty owed by

Defendants to Plaintiffs not negligently issue notices or statements that are

factually wrong or to seek to foreclose on a paid debt. Defendants’ breach

proximately caused Plaintiffs’ damages.

26. Defendants’ efforts and communications seeking to collect the

Morgan Loan after it was paid off acts were negligent, grossly negligent or

intentional actions seeking to extort or wrongfully obtain money not due

from Plaintiff through the use of false, confusing or erroneous demands for

payment, notices Plaintiffs would shortly have to quit living in their home,

and threatened non-judicial foreclosure of Plaintiffs’ home producing or

causing Plaintiffs’ damages.

27. Plaintiffs seek actual and exemplary damages.

28. Prior to trial and after passage of such time, if any, as may be

required by minimum notice provisions of the Deceptive Trade Practices

Act 8 , Plaintiff reserves the right to add damage claims arising under the

DTPA.

8
Tex. Bus. & Com. Code Art 17.41 et seq, (hereafter “DTPA”).

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 Causes of Action for Injunction
Restraining BAC, RECON or their privies from Non-judicial
Foreclosures In whole or in Part

29. Plaintiffs incorporate all prior allegations of this petition.

30. Defendants and all persons in privity with Defendants,

including but not limited to their respective agents, servants or employees

and parent Bank of America are seeking to collect a paid debt and have

threatened Plaintiffs with foreclosure of their home. A non-judicial

foreclosure sale was noticed by RECON for November 2, 2010.

31. The Morgan Loan as sought to be enforced by Defendants

constitutes a cloud on Plaintiffs’ title. Defendants’ foreclosure pendete lite

would further cloud Plaintiffs’ title to their home and frustrate or render

ineffectual complete relief available by declaratory judgment or quiet title

actions.

32. The Court is authorized in the circumstances to issue an

injunction to preserve the subject matter of the suit until the suit is resolved

by judgment. See CPRC §65.011(2) an d (4)

33. While Bank of America has unilaterally announced a

moratorium on its agents’ conduct of foreclosures on its behalf, that

moratorium may end as quickly as it was announced requiring the Court’s

intervention. Plaintiffs lack an adequate remedy at law to protect their

home and continued occupancy of their home

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 34. Plaintiffs as shown by the pay off documents are likely to

prevail on the merits of this action while Defendants will not be damaged in

the slightest by being required to establish that there is any debt obligation

on the Morgan Loan.

35. Proof of fact, that there is a debt in default secured by real

property is elemental before a foreclosure may occur. Moreover

confirmation of debt is a duty imposed on demand by the Federal Fair Debt

Collection Practices Act.

36. No public interest is harmed by the issue of preliminary

injunction. In fact the public interest is served by restraining reckless debt

collectors employing the non-judicial foreclosure statutes of this State in

the terroristic manner employed by Defendants in this case.

37. Noticed foreclosure sales can be passed and re-noticed for

subsequent months. Unless Defendants are restrained from foreclosure

through Judgment by Preliminary Injunction, Plaintiffs will be continuously

at risk of foreclosure on the paid off Morgan Loan.

38. Also as shown by Bank of America’s self declared moratorium

to clarify its entities foreclosure “paperwork” BAC has serious systemic

paperwork problems not only in Texas but across the United States.

These problems, arising from use of MERS or other shortcuts to a prudent

foreclosure, on information and belief led to BAC and RECON issue of

wrongful foreclosure demand letters, such as those sent to Plaintiff - a

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 deceptive trade practice violation, or by foreclosures or seizures of

property where no debt was due.

39. Texas gives a privilege allowing non-judicial foreclosure of

purchase money deeds of trust, but requires judicial foreclosure on an

expedited process to foreclose “home equity loans”. Defendants have

abused the privilege of non-judicial foreclosure and should be required to

proceed by judicial foreclosure generally to enforce any note secured by

Texas property until Defendants or its parent Bank of America can get its

act together to demonstrate that there is a debt unpaid, in default, held by

Defendants or its privies and to be administered or enforced by the party

seeking to administer or enforce the lien.

40. The DTPA authorizes a court to issue equitable relief when

the interests of the public at large are endangered by a defendant’s pattern

of reckless conduct. See DTPA §17.50(b) (2). Defendant Bank of America

and persons or entities in concert with it must be restrained from

conducting non-judicial foreclosures and required to proceed with bona

fide foreclosures only judicially wherein the Court will require proof of facts

that there is a debt secured by the property and that conduct of the

foreclosure meets legal requirements until they can satisfy the Attorney

General of the State of Texas that such relief is not necessary to protect

the consumers of this State. This Court may enter such an order at the

request of a private litigant, and in the circumstances of this case, must

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 enter its order requiring only judicial foreclosures. Notice of suit is being

given to the Attorney General of the State of Texas Consumer Protection

Division but class action status has not been requested at this time.

41. A bond of no greater than $100.00 should be ordered as a

condition of the issue of a temporary or preliminary injunction restraining

Defendants, those in privity with them as well as their agents, servants or

employees from taking any actions on the Morgan Loan against the

Property.

42. Defendants should be enjoined and restrained from

conducting any non-judicial foreclosures in the State of Texas but required

as a consequence of their violations of Texas Deceptive Trade Practices

Act and a bond of no greater than $100.00 should be ordered as a

condition of the issue of such a preliminary injunction.

. Prayer

Wherefore, Premises considered Plaintiffs pray that Defendants be

cited to appear and give answer herein, that upon just trial hereof, and that

consistent with their pleadings herein that Plaintiffs have and recover: their

actual damages, consequential damages, special damages and such

exemplary damages as may be adequate to deter and are constitutionally

appropriate to the Defendants and the wrongs established; reasonable

attorney fees, inclusive of conditional awards of attorney fees in the events

specified in this petition; costs of suit and reasonable disbursements

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 incurred in the prosecution hereof; pre and post judgment interest as

allowed by law; and such other and further relief at law or in equity to

which they may prove themselves entitled.

Plaintiffs further pray that prior to final trial the Court enter its:

a) Orders on notice to Defendants restraining Defendants, those

in privity with Defendants including but not limited to Bank of America and

their respective agents servants and employees from taking any action to

enforce the Morgan Loan or foreclose upon the Property through hearing

on such application and continuing until judgment in this case and directing

the clerk of this Court to issue the Order upon Plaintiffs’ cash deposit or

bond in the amount of $100.00, said deposit or bond to be conditioned as

required by law.

b) Order on notice to Defendants restraining Defendants, those

in privity with Defendants including but not limited to Bank of America and

their respective agents servants and employees from employing non-

judicial foreclosures under the Texas Property Code until adequate

showings eliminating violations of the Texas Deceptive Trade Practices Act

as stated herein have been made.

. Requests for Disclosure to All Defendants

Pursuant to Rule 194 Texas Rules of Civil Procedure (the “Rule”),

each Defendant is requested to disclose within thirty days of service of this
request, the information or material described in Rule 194.2 subparts (a)-(l)
inclusive.

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 . Requests for Admissions to All Defendants
Pursuant to Rule 198 Texas Rules of Civil Procedure, each
Defendant is required no later than Fifty (50) days after service of these
requests upon you to admit or deny or explain in detail the reasons that
you cannot admit or deny the request. Your response must fairly meet the
substance of the request. You may qualify an answer, admitting or denying
a request in part only when good faith requires it. If you fail to timely
respond to the requests the request is considered admitted without
necessity of an other action.

REQUEST No. 1.
Admit that the Morgan Loan (as the term “Morgan Loan” is defined in
the forgoing petition) was paid in full.
ANSWER

REQUEST No. 2.
Admit that BAC Home Loans Servicing LP has no right to take
collection actions on the Morgan Loan or direct exercise of the deed of
trust on the Property (as such terms are defined in the foregoing petition)
ANSWER

REQUEST No. 3 admit that Recontrust, N.A. and or its employees may not
lawfully conduct a foreclosure of the Property or take collection actions on
the Morgan Loan (as such terms are defined in the forgoing petition.
ANSWER

This date: October 19, 2010

x/s Barry A. Brown
________________
Barry A. Brown
SBOT NO. 03093000
Suite 1100, The Arena Tower
7322 Southwest Freeway
Houston, Texas 77074
Tel: 713 981 3880
Fax: 713 981 3881
e-mail: tebear05@msn.com
Attorney For: Plaintiffs
Attachments:
1. Business Record Affidavit
2. Demand & Posting
3. Verification

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