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Two Colorado residents felt cheated when Bank of America tried to sell their condominium that was in foreclosure. Bringing an appeal to the Tenth Circuit, their primary arguments were based on due process rights and a violation of the Colorado Fair Debt Collection Practices Act (CFDCPA).
None of the plaintiff's arguments stuck. Finding that their claims were either off base or speculative, the Tenth agreed with the lower court and dismissed the complaint.
Possible Forgery: Who Signed the Promissory Note?
In 2008. the plaintiffs obtained a loan of $166,995 to refinance their Denver condominium. In 2010, BAC Home Loan Servicing foreclosed on the condo since the plaintiffs had defaulted on payments. The original beneficiary of the trust deed assigned the deed of trust and promissory note to BAC, which merged into Bank of America.
The plaintiffs dispute the authenticity signature on the promissory note. On the final page of the note, the endorsement is signed by "Erla Carter-Shaw." According to the plaintiffs, "Erla Carter-Shaw" doesn't exist, so how could she have signed their promissory note? Even if she did exist, they never authorized her signature.
Alleging fraud by Bank of America, the plaintiffs claim that the forgery by this non-existent person constitutes a violation of the CFDCPA which prohibits "any false, deceptive, or misleading representation or means in connection with the collection of debt."
The court couldn't buy this argument, however, because the plaintiffs failed to provide any facts showing that the signature by Erla Carter-Shaw was a forgery. Under the Tenth Circuit case U.S. ex. Rel. Sikkenga v. Regency Bluecross Blueshield, a party alleging fraud must "set forth the who, what, when, where and how of the alleged fraud."
Due Process Claim
According to the plaintiffs, Bank of America violated their due process rights because the foreclosure was based on a "fabricated assignment of their promissory note and deed of trust." The court dismissed this argument for failing to state a claim. The fundamental problem with the argument was that the sale proceedings weren't based on the assignment; instead, the proceedings were based on the promissory note held by Bank of America.