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STATE OF NEW MEXICO
COUNTY OF SANDOVAL
THIRTEENTH JUDICIAL DISTRICT
RICHARD HERRERA AND AMANDA J. HERRERA,
Plaintiffs , vs.
BANK OF AMERICA, N.A.; ELITE CAPITAL FINANCE
DBA ELITE FINANCIAL CORPORATION; MERSCORP
HOLDINGS, INC.; MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.; ALL PERSONS
CLAIMING BY, THROUGH OR UNDER SUCH PERSONS;
ALL PERSONS UNKNOWN CLAIMING ANY LEGAL OR
EQUITABLE TITLE, ESTATE, LIEN OR
INTEREST IN THE PROPERTY DESCRIBED IN
THE COMPLAINT ADVERSE TO PLAINTIFFS
TITLE THERETO; and, DOES 1 to 20, Inclusive,
Defendant(s),
COMPLAINT FOR QUIET TITLE, REQUEST FOR DECLARATORY JUDGMENT AND
CLAIM FOR TEMPORARY RESTRAINING ORDER AND PERMANENT INJUNCTION
Plaintiff alleges:

1. Plaintiffs admit to some technical missteps attributable to the learning curve.
However none of which is fatal to their claim as will be demonstrated below. The Plaintiffs are proceeding without the benefit of legal counsel . Additionally, they are not practicing attorneys, nor have they been trained in the complex study of law. As such, Plaintiffs' pro se papers are to be construed liberally. See Haines v. Kerner, 404 U .
S. 519-20, (1972). "A pro se litigant should be given a reasonable opportunity to remedy defects in their pleadings if the factual allegations are close to stating a claim for relief." Hall v. Bellmon, 935 F .
1106, 1110 (10th Cir . 1991).
Accordingly, such pleadings should be held to a less stringent standard than those drafted by licensed, practicing attorneys.
JURISDICTION AND VENUE
2. This Court has jurisdiction and venue over this proceeding pursuant to State
Statute and under the New Mexico Rules of Civil Procedure and this matter arises out of ownership and possession of the aforementioned described Property being located in the
Thirteenth Judicial District in Sandoval County, New Mexico, the situs of the Property. That no other jurisdiction and venue, specifically, but not limited to, the United States District
Court of the District of New Mexico, is appropriate to resolve the title issues and declaratory judgment issues raised in this Court regarding the Property in question.
PLAINTIFFS’ SUPERIOR TITLE
3. Plaintiffs are the owners and in possession of the following described property located in Sandoval County, New Mexico, including any improvements, fixtures and attachments, such as, but not limited to, mobile homes (hereinafter the "Property") . The
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property is generally described with the street address of 5203 Mayhill Court NE, Rio
Rancho, NM 87144. If there is a conflict between the legal description and the street address, the legal description shall control and is more particularly described as follows:
LOT NUMBERED NINE (9) IN BLOCK NUMBERED SEVEN (7)
IN ENCHANTED HILLS UNIT 14-A, AS SHOWN ON THE PLAT
ENTITLED ENCHANTED HILLS UNIT 14A, A SUBDIVISION OF
UNPLATTED PROPERTY WITHIN UNIT TWENTY, WITHIN
SECTIONS 15, 22 AND 23, T13N, R3E, NMPM, CITY OF RIO
RANCHO, SANDOVAL COUNTY, STATE OF NEW MEXICO,
FILED IN THE OFFICE OF THE COUNTY CLERK OF SANDOVAL
COUNTY, STATE OF NEW MEXICO, IN VOL. 3, FOLIO 2238-B
(RIO RANCHO ESTATES PLAT BOOK NO. 15, PAGE 14).
4.
Plaintiffs acquired fee simple title to the above mentioned Property by
Warranty Deed recorded on April 17, 2009 in the Office of the County Clerk and Recorder of
Sandoval County, New Mexico. The aforementioned Warranty Deed is attached hereto and incorporated herein by reference as Exhibit "A". The Plaintiffs are the owner in fee simple in regard to the Property referred to herein, and the rights of Plaintiffs are superior to any right being alleged by the above Defendants .
5 . Plaintiffs are credibly informed and believe, and upon such information and belief, allege that no person has any right or title to the Property that is superior to that belonging to Plaintiffs. Defendants herein above named or designated, make some claim of lien, or title adverse, and inferior, to the estate of Plaintiffs in and to the real estate, or portion thereof, described herein, and are made a party Defendant herein by name, as near as the same can be ascertained.
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6. Plaintiffs are credibly informed and believes, and upon such information and belief, allege that the Defendants and all persons unknown, claiming any legal or equitable title, estate, lien or interest in the Property described in the Complaint adverse to Plaintiffs' title thereto, claim this interest adverse to Plainti f fs in the above described property as adverse interest holder of a Mortgage against subject Property. On April 17, 2009, Plaintiffs obtained a mortgage account (“Account”) from ELITE. The Account involved, among other documents, a note (“Note”) (attached herein as Exhibit “B”), and a Mortgage (“Mortgage”) that was executed and delivered by Plaintiffs to Defendant, ELITE when the Account was created. Defendant,
BOA , was not named in the Note or the Mortgage.
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7. Plaintiffs seek a determination of the extent and validity of any lien or interest adverse to Plaintiffs in the above described property, in an adversary proceeding, in order to determine the validity, priority, or extent of a lien or other interest in property. The basis for the determination of the extent and validity of the lien claim in New Mexico State Law is the Quiet
Title Statute. An action to determine quiet title to real property may be brought by anyone having or claiming an interest therein, whether in or out of possession, against any person or the state when such person or the state claims an estate or interest in the real property which is adverse to the party bringing the action.
Plaintiffs are the owners of the Property and therefore have standing to bring such action.
ELITE; BOA; and, MERSCORP HOLDINGS, INC. (hereinafter referred to as “MERSCORP”), and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. are parties that claim an interest, in the form of a lien claim, that is adverse to Plaintiffs’ claim to clear title.

As provided by NMSA 1978, Chapter 42, Article 6, Sections 1-17, this Complaint:
1) Is made under oath;
2) Hereby states that the nature and extent of Plaintiff’s estate in the Property is that they are the owner and legal title owner of the Property, and that upon information and belief, Plaintiffs hold the Property free of any legitimate lien claim;
3) Has described the premises in this Complaint;
4) Hereby states that Plaintiffs are credibly informed and believes, ELITE, BOA,
MERSCORP, and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS,
INC. make an adverse claim to Plaintiffs, in that they claim to be the owners of the Note and Mortgage;
5) Hereby and herein prays for the establishment of Plaintiff’s estate free of claims of ELITE, BOA, MERSCORP, and MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC. and that ELITE, BOA, MERSCORP, and
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., and all parties acting on its behalf, and any successor be barred and forever estopped from having or claiming any right or title to the Property adverse to Plaintiffs, including any lien claim.
STATEMENT OF FACTS
“It is well enough that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would
be a revolution before tomorrow morning.” Henry Ford Sr., automaker
President Woodrow Wilson, who voted in the Federal Reserve Bank in 1913: “ I have unwittingly ruined my country.”
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“The end of democracy and the defeat of the American Revolution will occur when government falls into the hands of lending institutions and
moneyed corporations.” …President Thomas Jefferson
8. Alleged lender, ELITE CAPITAL FINANCE DBA ELITE FINANCIAL
CORPORATION (hereinafter referred to as “ELITE”) advertised to us that they would lend us their money if we agreed to repay their loan. The alleged lender, ELITE advertised to us that they had money deposited and that they would lend the deposited money to borrowers, such as us, and the borrowers must repay the money so that the money can be returned to the depositors who funded the loan.
Now we have evidence from the bookkeeping entries per Generally Accepted
Accounting Principles (hereinafter referred to as “GAAP”), that the alleged lender did the opposite of what they claimed they were going to do and actually were in the business of creating economics similar to stealing, counterfeiting and swindling.
Banks accept legal tender money called cash and banks accept promissory notes like money, which is non legal tender money because promissory notes pay interest, and investors will pay cash for the promissory notes giving the promissory notes equal value to cash.
9. According to Federal Reserve Bank publications and GAAP—the standard bookkeeping entries banks are required to follow—the promissory note was recorded as a loan from us to the alleged lender, ELITE, who was the first Defendant bank involved in the alleged loan. Hereinafter, the Defendants, ELITE and BANK OF AMERICA, N.A. (hereinafter referred to as “BOA”), will be collectively called “Defendant banks”. We were the first lender
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and ELITE was first the borrower.
10. I think we all agree in principle that the one who funded the loan should be repaid the money. According to the bookkeeping entries using GAAP, we were the ones who provided the money or funds that created the money that ELITE claimed was lent to us.
At this time the Defendants are concealing the true economics and facts of what they are claiming is a loan. The promissory note is not proof of a loan to us. The bookkeeping entries prove who loaned what to whom. They provide the SUBSTANCE of the transaction and not just the FORM as stated in a promissory note.
If the Defendant banks claim that they did not follow GAAP, then the management of the financial institutions issuing the CPA audit reports, claiming that they follow GAAP will, by law, be committing a fraud. We have every reason to believe the CPA audit reports and that they follow GAAP.
11. If the Defendant banks claim that there is an agreement and a loan, then they must stop concealing material facts, and answer the question as to whether the alleged promissory note was recorded as a loan from us to the alleged original loan originator or financial institution involved in the alleged loan or if the promissory note was used in a manner that was not our intent and in a way that was misrepresented to us, i.e. stolen.
According to our records, the promissory note was stolen or recorded as a loan from us to the original alleged loan originator and that the alleged lender never paid one red cent as
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adequate consideration to purchase the promissory note from us creating the economics similar to stealing, counterfeiting and swindling.
We are now demanding that the Defendant banks stop concealing material facts.
We demand that the Defendant banks immediately repay the loan from us and that they return the promissory note and stop the damage to us.
If a thief stole my property and exchanged the stolen goods for cash and returned the cash to me as a loan, the thief concealed the theft, the thief breached the agreement and we have no legal obligation to repay the alleged loan. If a counterfeiter counterfeits money and lends us the counterfeited money which was used to buy our house, we have no legal obligation to repay the alleged debt because the alleged lender was engaged in a criminal act giving me illegal consideration and breached the agreement.
A promissory note does not prove that there was a loan of the lender’s money, as adequate consideration, to purchase the promissory note from an alleged borrower (us). Past payments made by us are considered extortion payments and do not ratify any alleged loan agreement.
12. Our records show a completely different loan agreement than what the
Defendant banks claim is the agreement . The loan agreement that we understand was agreed to had the following terms and conditions:
1) The original lender or financial institution involved in the alleged loan is to use their money, money equivalent, capital, funds, or thing of value hereinafter called money, to purchase the promissory note (loan papers) from the alleged borrower (us);
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2) The alleged lender or financial institution involved in the alleged loan was to receive no money from the borrower (me) that would be used to fund the alleged loan check or similar instrument;
3) The alleged lender or financial institution involved in the alleged loan must follow Generally Accepted Accounting Principles (GAAP), as directed in CPA audit opinions and the law;
4) The intent of the alleged loan agreement is that the party who provided the money to fund the alleged loan check or similar instrument is to be repaid the money;
5) All material facts are disclosed in the alleged loan agreement;
6) The borrower must repay the loan using the same specie of money, money equivalent, funds, capital, credit, or thing of value, hereinafter called money, that the financial institution, involved in the loan process, used to fund the loan check or similar instrument according to GAAP, thus ending all interest and liens.
13. The Defendant banks have misrepresented the elements of the alleged agreement to us. We cannot testify if something is our signature if we do not know what is agreed to in the alleged agreement . There is no bona fide signature on the alleged note. The signature on the promissory note does not give validity to the document. The promissory note is a forgery. The promissory note—with our name on it—obligates us to pay $232,926 plus interest, giving it value today of $232,926, if it were sold to investors. The alleged lending bank recorded the promissory note as a loan from us to the bank. The alleged lending
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bank used this loan to fund the alleged bank check back to us.
The alleged lending bank refused to loan us legal tender or other depositors’ money in the amount of $232,926 or repay the unauthorized loan it recorded from us to the bank. The bank changed the cost and the risk of the alleged loan.
At all times, the bank operated without my knowledge, permission, authorization, or agreement. They refused to disclose whether the bank loan check was the consideration loaned for the promissory note.
The Defendant banks wrote the agreement, they executed the bookkeeping entries, and we have a right to know and understand what the agreement is and the economics of the agreement. The party who provided the asset that gave value to the alleged bank loan check, per the bookkeeping entries, should be given Equal Protection Under the Law and be repaid an equal amount of value, for the value that was earlier provided to fund the loan check.
EQUAL PROTECTION UNDER THE LAW
14. Equal Protection is defined as a constitutional guarantee wherein no person or class of people shall be denied the same equal protections of the law enjoyed by other persons and the enforcement of contracts. Remember, under the law, a corporation is treated like a person. Concealing the economic effect of stealing and counterfeiting denies equal protection.
Never forget that an agreement or contract is a mutual agreement, and you cannot have mutual agreement without Full Disclosure.
Pretend for a moment that nonbankers and bankers had equal protection under the law, and that the written bank loan agreement showed full disclosure so nonbankers could fully
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understand the agreement. If this were true, and the bank paid the debt it owed in obtaining the promissory note, the debt would be cancelled. Under equal protection, if the bank used your first promissory note to fund the check, would they not have to accept a second promissory note with no interest and no lien to discharge the first one?
Under equal protection under the law, if the bank recorded the first promissory note as a loan from me to the bank, would not the bank have to repay me the principle and interest you paid them, to receive “its equivalent in kind?” Under equal protection under the law, if the bank can create non-legal tender money and spend it, why can’t we do the same? If the bank accepted money that we created, with our promissory note, to issue a bank loan check, would they not then have to accept more to discharge the first alleged bank loan?
15. Under Full Disclosure, what agreement did we sign and have mutual understanding of at the time of signing? What gave Congress the right to deny us equal protection under the law? Are there two classes of citizens, with bankers operating under one set of rules and nonbankers operating under another set of rules, so that the banks can prey upon the nonbanker’s wealth? If there is a bank loan agreement, we want to know what the full agreement is, or we want out of the alleged loan. There must be an agreement with Full
Disclosure and Mutual Consent.
16. If we have equal protection under the law (and we do not have two classes of citizens), plus Full Disclosure in the written agreement so nonbankers can understand who provided the funds to issue the bank loan check, we would be out of debt. If we understood the whole truth, no one would agree to an Unconscionable Contract, an Unenforceable
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Contract, or an Ultra Vires Contract. The intent of Congress, was to give everyone equal protection. The intent was NOT to give the banks the right to create money and deny equal protection to the citizens of this country, and force them into debt just like a counterfeiter of United States Notes would.
PROMISSORY NOTE RECORDED AS A BANK ASSET (BANKS CREATE NEW
MONEY AS LOANS ARE GRANTED)
17. According to Chicago Federal Reserve Bank publication, Modern Money
Mechanics (pages 1-10 attached herein as Exhibit “C”), page six, the bank records the promissory note as a bank asset which is offset by a new bank liability called the borrower’s transaction account (which is commonly called a checking account).
Page three of the same report, second column and second paragraph, claims that the banks create new money as loans are granted . The idea is that if you deposit $100 of cash into a checking account, you can count the checking account (bank liability) as money because there is an equal amount of money, cash, deposited to match the bank liability. According to GAAP, Generally
Accepted Accounting Principles, a bank liability means that the bank owes money and cash, money, is recorded as a bank asset. A check is not money, but acts like money, with the presumption that money is first deposited to make the check good. According to Black’s Law
Dictionary, a check contains an unconditional promise to pay a sum certain in money. The presumption is that if you present a check to the bank teller, the bank teller will give you cash.
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18. Banks are required to adhere to Generally Accepted Accounting Principles
(GAAP). GAAP follows an accounting rule that lies at the heart of double-entry bookkeeping system called the “Matching Principle”. This Principle works as follows: when a bank accepts bullion, coin, currency, checks, drafts, promissory notes, credit card applications, or any other similar instruments (hereinafter referred to as “instruments”) from customers, and then deposits or records the instruments as assets, it must record offsetting liabilities that match the newly deposited assets. These liabilities (Demand
Deposits) represent the amounts that the bank owes the depositor, or customer (i.e., the funds accepted from customers).
19. According to the Federal Reserve Banking System’s literature, the greatest percentage (almost 100%) of the funds advanced to borrowers are created by the banks themselves based upon monetizing the negotiable instruments, promissory note, mortgage, credit card , bond or any other type of negotiable instrument. This is done by debiting the amount from the bank’s asset account instrument and crediting a liability account (demand deposit account) merely for the face value of the executed note. It is important to point that the bank never transferred any money from one set of depositors to another set of borrowers to fund the transaction. So the general rules followed by GAAP are quite simple. For every debit there has to be a corresponding credit.
20. A non-accountant may want to look at it this way. From the bank’s point of view, when it takes the consumer’s money they have created a debit to him personally but to the bank they have taken that negative into the bank’s coffers so it acts as a positive number. The question that must be answered next is, “Will it stay in the banks coffers or can it be recalled by
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the consumer?” Since checking and savings accounts can be recalled by the consumer they have to show it in such a way as to acknowledge it as a transient asset. They do this by creating an account called “Liabilities/Demand Deposit” where they can park the money as an asset until the consumer asks for it.
21. Per GAAP and Federal Reserve publications, two loans were exchanged. We lent the promissory note to the bank that funded the loan back to us. The loan from us to the bank is the deposit of the promissory note. GAAP requires that the bank “match” a new bank liability with our name on it showing that the bank owes us for the deposit they accepted from us just like they do when we deposit cash into our checking account.
The form—contract—says the bank lent us money, but the substance—bookkeeping entries— say that the bank accepted our promissory note as new money as a deposit just like depositing cash into our checking account. Our signatures cannot testify that the bank lent us the bank’s money to purchase our promissory note, but the bookkeeping entries prove that they lent no money to purchase our promissory note.
22. This is the legal concept of FORM vs. SUBSTANCE. The form is the promissory note, which says that the lender lent money to the borrower. The substance is the money trail—bookkeeping entries. The substance shows that there were two loans exchanged—equal value for equal value. The borrower was required to repay the loan to the bank plus interest, but the bank never repaid the debt it owes to the alleged borrower . An
IOU exchanged for an IOU. The two newly created IOU’s cancel each other out. The
Substance, the true transaction, shows that the alleged borrower was actually the lender to the bank. The Form, the alleged bank Loan Agreement shows the opposite.
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23. Example: We sign a paper that says We were to be lent $10,000, but no one loaned us one red cent to obtain the promissory note. If a thief stole $10,000 worth of diamonds and returned the cash to us as a loan, the Form says that there was a loan. Our signature also says that there was a loan.
The true transaction though, says there was no loan. The
Substance, the money trail and the bookkeeping entries, prove that someone took something of value worth $10,000 from us, exchanged it for a different asset of equal value, and returned our $10,000 to us as a loan, that we now have to repay with interest. Our signatures do not prove that we received the loan. The Substance of the transaction was an exchange, and we were charged as if there was a loan.
24. If an attorney uses the promissory note just like a witness to give false testimony in court, claiming that the bank lent money, cash or cash equivalent to the alleged borrower, the attorney should be disbarred for bringing fraud into the court . The
Substance was an exchange of value for value. If the Form and Substance disagree, one must rely on the Substance over the Form, because Substance always triumphs over Form.
25. Federal Reserve Bank of Texas publication Money, Banking and Monetary
Policy, explains on page eleven, that banks create money when they lend it. The loan becomes a new deposit into the customer’s checking account just like a payroll check does.
26. Federal Reserve Bank of New York publication The Story of Banks, page one, claims that the bank first deposits the money and then uses that same deposited money to make the loans. Then it claims that a lot of money is created when the banks, credit unions and savings and loans make new loans.
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27. Federal Reserve Bank of Chicago publication ABC’s of Figuring Interest, page two, claims that when you deposit money into a savings account, you make a loan to the bank.
According to GAAP, the new bank liability proves a loan to the bank.
28. Federal Reserve Bank of New York publication I Bet You Thought, explains it very well on page twenty-seven that banks create new money whenever they grant loans by simply depositing the borrower’s promissory note as a bank asset that is offset by a new bank liability. Page five explains that money does not have to be issued by the government or be in any special form.
29. Combine what the Federal Reserve Banks have admitted in writing and you have the fact that the bank used my promissory note as money or like money, hereinafter money, deposited or recorded it as a bank asset to give value to a check which the bank returns to me as a loan. When the bank deposited the money (or promissory note), the money deposited was a loan to the bank. This is consistent with GAAP and the Matching Principle. So all we ask for is that the party who funded the loan, per the bookkeeping entries, be repaid the money. What honest person would argue otherwise? Why hide the real agreement and bookkeeping entries if it is honest? Why should one class of citizens create new money and loan it out to enslave the second class of citizens?
30. If the bookkeeping entries did prove the promissory note was not used to give value to the check and that other depositor’s money was actually used to fund the loan, the bookkeeping entries would then be a debit to a checking account or demand deposit account and a credit to cash. There would be no new money created . The promissory note
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would not be recorded as a bank asset. The depositors cannot spend the money taken out of their bank account which was lent to the borrower. The borrower repays the loan and the money returned to the party who funded the loan. Economically speaking, everyone would have Equal
Protection Under the Law. There would be no economics similar to stealing, counterfeiting or swindling.
DEFENDANTS ARE NOT ENTITLED TO ENFORCE THE NOTE
31. In addition to the facts stated above in regard to the fact that there has been a
Breach of Contract, which invalidates the Promissory Note and the Security Instrument that is incidental to the Note, upon information and belief, Plaintiffs understand that the Note and
Mortgage, were, evidently, unlawfully sold, assigned and/or transferred by Defendant, ELITE and that they were subsequently traded and/or sold amongst others who may have subsequently claimed some interest in some part of one or both instruments as a result of her dealings with the
Defendants or some later person who claimed an interest of some kind in the Note and Mortgage.
32. It is evident that the Defendant banks have determined that since they have gotten away with the business practices of Non Disclosure, Misrepresentation and denial of Equal
Protection Under the Law, in regard to the nature of the promissory note, that they can also pull the wool over the eyes of the citizens of this country, in regard to who is entitled to enforce the promissory note, and continue the charade. There has been no evidence presented or facts submitted that would show how BOA validly acquired any rights to enforce the Note.
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33 . Upon information and belief, Plaintiffs owe no debt that is secured by any lien or encumbrance filed against the Property.
The Defendants have failed to, or refused to, or are unable to provide the proper chain of ownership and authority respecting the Note since its creation, including the circumstances and details of each alleged transfer, sale, or exchange, claim(s) on insurance, or claims(s) on lost loans, etc.
34 . Upon information and belief, the Note is a negotiable instrument as defined by the
New Mexico Uniform Commercial Code. That is the law that defines who, if any, has a right to enforce the Note, and to who, if any, the maker of the Note has an obligation.
35. Plaintiffs have received no proof that any person has the right to enforce the Note today, and they, upon information and belief, maintain that no person is known today to have the right to enforce the Note.
36.
Banks must make us believe that they lent us other depositor’s money, making us feel that we have an ethical duty to repay the loan. Read UCC 3-302 through
UCC 3-308, HOLDER IN DUE COURSE—real defenses are fraud in the factum, material alteration, want of consideration, fraud in the inducement, which defeat the entity who holds the alleged note, from being a Holder in Due Course and being able to bring a foreclosure action.
37. Even if a claimant produces the original wet-ink Note, there is a defense to the action pursuant to UCC Section 3-305, when an entity purports to be a Holder in Due
Course of the promissory note. Illegality and false representation perpetrated in the
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transaction; non disclosure of the Source of the money for the transaction; non disclosure of the fact that the money for the transaction was provided at no cost to the bank; non disclosure by the banks that Note would be sold at the earliest possible convenience, and that such sale and receipt of money from a third party would actually pay off the Note
(Satisfaction of the Mortgage); false representation by bank that a “Loan” transaction was being executed; and, did the bank identify the issuer of the promissory note (me) as a
“borrower”? All of these defenses against an entity would prevent such entity from being a
Holder in Due Course and being able to bring a foreclosure action.
38. Plaintiffs have received no proof from a person that has proven its status as a person with the right to enforce the Note and/or, that any portion of the initial obligation under the Note remains unsatisfied today. Plaintiffs, upon information and belief, therefore maintain that all obligations under the Note have been fully satisfied, or else are no longer enforceable obligations.
39. Plaintiffs, upon information and belief, maintain that the Mortgage no longer secures performance of an obligation due from Plaintiffs under the Note because there is no known person entitled to enforce the Note and because the obligations under the Note have been fully satisfied. Accordingly, the Mortgage is no longer an instrument securing the performance of an obligation owed under the Note. Thus the Mortgage is an improper cloud on the title to the Property and an order should be entered removing the Mortgage as an encumbrance on Plaintiffs’ title to the Property.
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40. There is no valid, legal, recorded document that reflects the fact that ELITE (the alleged loan originator) transferred the Note to BOA. Proper procedure is to negotiate the Note under cover of a Bailee’s Letter to the subsequent purchaser and then transfer the right to the
Security Instrument (the Mortgage) by filing of record the name of the subsequent purchaser who purchased the Note and completing the Note negotiation. After this Original Obligee indorses the Note and delivers the same to the subsequent purchaser (Second Obligee). Second Obligee then completes the negotiation by accepting the transfer, then files of record an assignment of the mortgage to transfer and perfect the Security Instrument’s lien into the Second Obligee’s name.
If the Second Obligee fails to complete the negotiation, then the Second Obligee, and any subsequent Obligee, may become the possessor or Holder of the Note but has not achieved
Holder in Due Course status with rights to enforce the Note terms or the terms within the
Security Instrument. Additionally, failure to file of record the Assignment of the Security
Instrument fails to transfer lien rights and this failure to transfer lien rights has rendered a once secured Note to “Unsecured” status.
41. Defendants have represented that they owned and controlled all rights related to the Note and Mortgage. In reliance on the representations made by the writings and conduct of
Defendants, Plaintiffs previously sent in mortgage payments.
42. Defendants have not shown that they have proof that they now have the right to enforce the Note pursuant to the UCC, whether for themselves or on behalf of some undisclosed and alleged principal. Defendants have not provided any proof thereof. Plaintiffs have waived no rights entitled to them under the UCC. Plaintiffs do not waive the Presentment and Dishonor of the Note and not forgo any of the protections afforded them under the UCC. No waiver terms
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or verbiage were ever explained to the Plaintiffs and certainly never accepted by them.
43.
The Uniform Commercial Code (“UCC”) was codified into New Mexico State law under NMSA Chapter 55, Uniform Commercial Code, Sections 55-1-102 et seq.
44. Plaintiffs are credibly informed and believe, and based upon that information and belief, allege that the Defendant, BOA , does not have the right to enforce the Note, because under UCC Section 3-203 (b) it can be vested only with the rights of the transferor when they were transferred the Note. The Defendant, BOA, has not shown that there is any entity that can be shown to be the transferor, who transferred the Note to them, and had enforcement rights and that the change of possession was a voluntary act for the purpose of transferring all interests in the Note to the transferee, and thereby acquiring the enforcement rights of the transferor.
45. Plaintiffs are credibly informed and believe, and based upon that information and belief, allege that the Defendants do not have the right to enforce the Note, because even if it can be shown that the Defendants have acquired possession of the Note, it was never intended to vest all of the rights of the Note in the Defendants. The Defendants have borrowed possession under an undisclosed agreement with whomever had the physical possession (which could be a Person without the right to enforce the Note), and then they have asserted they are the holder and can produce the physical Note. The Defendants have kept silent about the ruse that they have contrived. This deceptive tactic is part of an attempt either to hide the identity of the real holder, so they do not get entangled in litigation, or to avoid having the enforcement rights of that accommodating transferor investigated. None of the companies that participate in this kind of
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cover up may have the right to enforce the Note.
MORTGAGE ELECTRONIC REGISTRATION SYSTSEMS, INC. HAS ONLY BARE
LEGAL TITLE WITH NO ECONOMIC INTEREST OR AUTHORITY OVER THE
NOTE
46. MERSCORP and also MORTGAGE ELECTRONIC REGISTRATION
SYSTEMS, INC. (hereinafter referred to as “Shell Game-MERS”), are Defendants in this action, as the name of Shell Game-MERS was inserted into the Mortgage but not the Note.
47. To continue their Misrepresentation, Non Disclosure and denial of Equal
Protection Under the Law, in regard to the promissory note, the Defendant banks, along with other big banks, Title Companies and Government Sponsored Enterprises, created an enterprise called Mortgage Electronic Registration Systems, Inc., which allowed them to become even less transparent in regard to their dealings with the promissory note.
48.
The name “Mortgage Electronic Registration Systems, Inc.” has been held by three different companies created by the mortgage finance industry, the first in 1995, then in 1998, and again in 1999. The 1995 version ceased existence in 1998 when another company with the same name was created. That 1998 company changed its name from Mortgage Electronic Registration
Systems, Inc. to MERSCORP, Inc., in 1999, and created its wholly owned subsidiary, the 1999
“MERS” (Shell Game-MERS) which is now the company named in so many residential mortgages. MERSCORP, Inc. changed its name to MERSCORP Holdings, Inc. on
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September 22, 2011.
49. When Shell Game-MERS was created in January 1999, it was created to do one thing, i.e., hold bare legal title to mortgages. “Bare legal title” basically means having something registered in a person’s name even though that person has no ownership interest or legal authority over the thing. That is, Shell-Game MERS was made so its name could be listed as the legal holder of a mortgage even though it has no economic interest or authority over the mortgage or Note to which the mortgage relates. The company that created Shell Game-MERS retained all of that parent company’s business operations, employees, ownership of the electronic registry, and all intellectual property. That is, Shell Game-MERS was created to have nothing more than a name that could be used as MERSCORP , the parent company, as those in charge of
MERSCORP chose to so dictate.
50. The “About Us” section of the parent company’s website,states that
“MERSCORP, Inc. owns and operates the MERS System, a , national electronic registry system that tracks the changes in servicing rights and beneficial ownership interests in mortgage loans that are registered on the registry
.” Shell Game-MERS, therefore, has no electronic registry and does not operate one, despite the fact that the mortgage industry and the foreclosure mill law firms regularly tell judges otherwise. The name of Mortgage Electronic
Registration Systems, Inc. (Shell Game-MERS), known to most as “MERS” appears on 50-
60 percent of the residential mortgages in America. It was created and is owned by powerful members of the mortgage finance industry. MERS is now controlled by our federal government.
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51. “MERS”, “Mortgage Electronic Registration Systems, Inc. or “MERSCORP” maintains a website and the address of the site is misleading, as it would lead a visitor to think that the site was owned and operated by Mortgage Electronic Registration Systems, Inc., since the name of the site is “mersinc.”
MERSCORP owns both this website and Shell Game-
MERS. The mere name of the website suggests life and activity that Shell Game-MERS does not have. Sleight-of-hand practices and deceptive wordsmithing have resulted in millions of foreclosures and violations of Homeowner rights. These practices appear to be the result of planning and intention. “CONTRIVED CONFUSION” is therefore an apt description of the foreclosure environment spawned by those who use the name of Shell
Game-MERS.
52.
The mortgage banking industry, and their representatives, rely on the industry’s
“CONTRIVED CONFUSION” about Shell Game-MERS to avoid its duty at law to use genuine facts to prove alleged rights when taking homes from people. Representatives for the mortgage banking industry rely upon and continue to use deceptive summaries about Shell Game-MERS to bolster the appearance of merit for the documents they produce that use the name of Shell Game-
MERS.
53.. On April 9, 2013, the Office of Comptroller of the Currency announced that it had identified violations in 4.2 million foreclosure cases in the years 2009 and 2010. San Francisco
County, California conducted a limited audit of foreclosures from January 2009 to 2011 and reported that 84% violated the law. The Southern Essex Registry of Deeds, Essex County,
Massachusetts, revealed 75% of the 2010 foreclosures involving JPMorgan Chase Bank, Wells
Fargo Bank, and Bank of America were invalid. These limited audit results and published court
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decisions reflect that errors are made and that they are made frequently.
54.
The initials “MERS”, for example, are the initials that appear in millions of residential mortgages but they are also the initials used by Shell Game-MERS’ parent company,
MERSCORP, and used in documents MERSCORP publishes about itself and companies with which it is affiliated. The distinction between the parent and Shell Game-MERS is muddled because “MERS” applies to each. The blur is worsened by the actions of, and misinformation from, the mortgage banking industry and the foreclosure mill law firms that do their bidding.
The Shell Game-MERS is the entity identified in those mortgages. Legalities about the “MERS” named in a mortgage are not satisfied with information about “MERS” the parent company, but that is the approach regularly taken in courts by MERSCORP, Shell
Game-MERS and the foreclosure mill law firms representing the mortgage finance industry. Too many court decisions disclose that Homeowners lost their homes because judges are led to make determinations about Shell Game-MERS based on misstated and misleading information rather than facts about the true nature and substance of Shell Game-MERS. Judges cannot be expected to make correct decisions when they are fed so much bad information.
55 . On information and belief, Plaintiff alleges that Shell Game-MERS does not qualify as a Mortgagee. A Mortgagee includes any person, partnership, association, corporation, society, organization or fiduciary, holding a mortgage against real estate in a city or county of the first class, and entitled to payment of the mortgage debt, or the heir, legal representative, successor or assignee of any of the foregoing.
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56. On information and belief, Plaintiff alleges that Shell Game-MERS has loaned no funds for the Mortgage loan; Shell Game-MERS collected no payments for the Mortgage loan; Shell Game-MERS never had possession of the Note or the Mortgage that secures the
Note; Shell Game-MERS never had the authority to assign the Note that is secured by the
Mortgage; Shell Game-MERS has never been entitled to payment of the Note that is secured by the recorded Mortgage; and, that there is no legal definition from the legislature of Nominee
Mortgagee or any derivative of that title or position in law or equity.
When a state agency found that Shell Game-MERS is a Mortgage banker subject to license and registration requirements, Shell Game-MERS appealed to the Supreme Court of
Nebraska and outlined its very limited role as a nominee. Subsequently, the purported counsel for Shell Game-MERS explained that: “Shell Game-MERS does not take applications, underwrite loans, make decisions on whether to extend credit, collect Mortgage payments, hold escrows for taxes and insurance, or provide any loan servicing functions whatsoever.
Mortgage Electronic Registration Systems, Inc. v. Nebraska Department of Banking and
Finance, 704 N. W. 2 nd
784 (Neb. 2005).
“Shell Game-MERS argues that it does not acquire Mortgage loans and …only holds bare legal title in a nominee capacity and is contractually prohibited from exercising any rights with respect to the Mortgages. It is undisputed that Shell Game-MERS serves in a very limited capacity and holds no substantive rights.”
Aurora Loan Services, LLC v. Mendes da Costa,
Collier County Florida, case No. 09-142-CA.
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57. On information and belief, Plaintiffs allege that the rights, responsibilities, and limitations of “Nominee Mortgagee” are not disclosed or defined within the Mortgage.
58. On information and belief, Plaintiffs allege that when an individual is employed by some other company but he or she signs papers as an officer of Shell Game-MERS, the natural question is “on whose behalf is that individual using the name of Shell Game-MERS?”
Shell Game-MERS has no employees. The Rules of Membership for MERSCORP make it clear that the individuals who sign documents as officers of Shell Game-MERS are not doing it for, or in response to a request by, Shell Game-MERS.
According to Mr. Arnold, past president of MERSCORP, in the hearings before the
United States Senate of November 16, 2010, “That those who appear as a signatory and assistant secretary of MERS on “Assignments of Mortgage” are not authorized to act by any lawful official act or corporate resolution of MERSCORP or to act in any MERSCORP representative capacity whatsoever.
59.
The Assignment of Mortgage, referred to herein as Exhibit “F”, that was filed in the property records of Sanddoval County, New Mexico, is a fraudulent lien claim. The assignment is void because, among other things, it was executed by a person neither employed nor authorized by an entity entitled to enforce the promissory note and Mortgage Electronic
Registration Systems, Inc. has no interest in the Note. Mortgage Electronic Registration
Systems, Inc. intended that the document be given the same effect as a lawfully executed instrument, and the execution and filing of the document was done for the purpose of harming
Plaintiffs.
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MERSCORP’s corporate secretary appointed the “certified officer” as the person signing the Assignment of Mortgage as assistant secretary, and the appointment was not valid because the appointment was not approved by MERSCORP’s board of directors, as allegedly required by
MERSCORP’s by laws.
There was a scheme on the part of Mortgage Electronic Registration Systems, Inc. and
MERSCORP to bypass the Board of Directors of MERSCORP and cloak others with authority only allowed by the Board of Directors. This was not an inadvertent failure to comply with a duty, but rather an intentional act, done knowingly, with the specific intent, that the consequences of this action would be brought to fruition.
60. In a Case recently decided in 2011 , UNITED STATES BANKRUPTCY COURT,
EASTERN DISTRICT OF NEW YORK, In re: FERREL L. AGARD, Debtor, Case No.
. 810 -
77338-reg ., Chapter 7, the Honorable Court stated in its MEMORANDUM DECISION that:
“The Court recognizes that an adverse ruling regarding MERS’s (meaning Shell Game-
MERS’s) authority to assign mortgages or act on behalf of its member/lenders could have a significant impact on MERSCORP and upon the lenders which do business with MERS throughout the United States. However, the Court must resolve the instant matter by applying the laws as they exist today. It is up to the legislative branch, if it chooses, to amend the current statutes to confer upon MERS (meaning Shell Game-MERS) the requisite authority to assign mortgages under its current business practices. MERSCORP and its partners made the decision to create and operate under a business model that was designed in large part to avoid the requirements of the traditional mortgage recording process. THIS COURT DOES NOT
ACCEPT THE ARGUMENT THAT BECAUSE MERS (meaning Shell Game-MERS) MAY
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BE INVOLVED WITH 50% OF ALL RESIDENTIAL MORTGAGES IN THIS COUNTRY,
THAT IS REASON ENOUGH FOR THIS COURT TO TURN A BLIND EYE TO THE FACT
THAT THIS PROCESS DOES NOT COMPLY WITH THE LAW (emphasis added).
NO EVIDENCE THAT MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.
(SHELL GAME-MERS) HAS AN AGENCY RELATIONSHIP WITH ANY ENTITY
THAT IS ENTITLED TO ENFORCE THE NOTE
61. On information and belief, Plaintiffs allege that Defendant Shell Game-
MERS cannot assign an enforceable mortgage as it never owned or possessed the Note .
Shell Game-MERS is never entitled to enforce the Note, nor does it represent any entity that is entitled to enforce the Note. Neither Defendant Shell Game-MERS nor any other defendant can prove otherwise.
62. On information and belief, Plaintiffs deny that Defendant Shell Game-MERS had any ownership or beneficial interest in the Note and Mortgage. Furthermore, Plaintiffs maintain that Shell Game-MERS never made a contractually valid, and legally binding assignment or transfer, of either the Note or the Mortgage, in response to the instructions of a company then having the right to enforce the Note pursuant to this state’s UCC
.
Accordingly, any purported assignment or transfer from Shell Game-MERS to any company would be invalid and would transfer no rights or interest in either.
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63 . On information and belief, Plaintiffs allege that Defendant Shell Game-MERS has no authority to transfer or assign any documents on its own authority. In the case In re
Mitchell, Case No. BK-S-07-16226-LBR (Bankr. D. NV. 2009), which consolidated 27 different suits against various homeowners, none of the companies trying to foreclose could enforce the related Notes.
The Court stated: “Agency is a legal relationship created by an express or implied agreement or by operation of law whereby the agent is authorized to act for the principal, subject to the principal’s control. As in the formation of any contract, the consent of BOTH parties is necessary to establish an agency.”
“Agency is never to be presumed; it must be shown affirmatively. The party who asserts the existence of an agency relationship has the burden of proving it. Karl Rove & Co. v.
Thornburgh, 39 F.3d 1273, 1296 (5 th
Cir. 1994)….
Hamm v. Arrowcreek Homeowner’s Ass’n.,
124 Nev. 28, 183 P.3d 895 902 (Nev. 2008). “The party asserting the agency relationship has the burden of proving the relationship by a preponderance of the evidence”…. Trump v Eighth
Judicial Dist. Court of State of Nevada, 109 Nev. 687, 857 P.2d 740, 745 (Nev. 1993). “ The burden of proving an agency relationship rests upon the party asserting that such a relationship exists”.
Bank of N.Y. v. Cepeda, (2013 NY Slip Op 50686(U). The Court stated that: “Thus in the instant action, MERS, as nominee for COUNTRYWIDE, is an agent of COUNTRYWIDE for limited purposes. It only has powers given to it and authorized by its principal,
COUNTRYWIDE. Plaintiff BNY failed to submit documents authorizing MERS, as nominee for COUNTRYWIDE, to assign the subject mortgage to Plaintiff BNY.
Therefore MERS lacked authority to assign the CEPEDA mortgage and note, making the
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assignment to Plaintiff BNY defective.
In Bank of New York v Alderazi, 28 Misc 3d 376 [Sup
Ct Kings County 2010], Justice Saitta, at 379-380 explains: A party who claims to be the agent of another bears the burden of proving the agency relationship by a preponderance of the evidence. (Lippincott v East River Mill & Lumber Co., 79 Misc 559 [1913 ]). In the instant action, MERS, as nominee for COUNTRYWIDE, not only had no authority to assign the
CEPEDA mortgage, but no evidence was presented to the Court to demonstrate
COUNTRYWIDE’s knowledge or assent to the assignment by MERS to Plaintiff BNY. In
Bank of New York v Silverberg (86 AD3d 274 [2d Dept 2011]), the Court instructed, at 281-
282: the assignment of the notes was thus beyond MERS’s authority or agent of the lender
(see Aurora Loan Serv., LLC v Weisblum, AD3d, 2011 NY Slip Op 04184, *6-7 [2d Dept
2011].”
64. Shell Game-MERS lacks the authority to assign, transfer or give instructions regarding the mortgage loan. The name of Shell Game-MERS can neither represent a direct and independent legally exercisable right or an indirect right of a servant acting for its master . In 2007 the mortgage finance industry was forced to admit that it conducted foreclosures under a pretense of legality by claiming that Shell Game-MERS was the owner and controller of the Note when in fact that was not true. MERS v. Azize, 96 So.2
nd
151 (FL Ct.App.
2007).
65. Shell Game-MERS has not done anything that involves the necessary agency relationship between it and any entity that is entitled to enforce the Note . Shell Game-
MERS has not shown or proven any agency relationship with any entity who was entitled to
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enforce the Note for each alleged assignment change or anything else respecting the Note and
Mortgage. Shell Game-MERS cannot show that it is being a servant of an entity entitled to enforce the Note; and therefore, the Assignment of the Mortgage from Mortgage Electronic
Registration Systems, Inc. to BOA has no legal significance and it is just a worthless piece of paper.
66. Shell Game-MERS was not authorized in its nominee role, as stated in the
Mortgage, to carry out acts on behalf of the “lender and its successors” and has no right to do anything respecting the Note and Mortgage because the alleged agency relationship cannot be proven. The Rules of Membership for MERSCORP do not create an agency relationship between Shell Game-MERS and the members of MERSCORP. There is no agreement between Shell Game-MERS and the entity who is entitled to enforce the Note which would establish an agency relationship between the parties.
67.
The label of nominee alone doesn’t convey any legal authority. An agent isn’t permitted to do just whatsoever it desires with the principal’s property unless authorized to do so by the principal. There is no agency agreement that states that Shell
Game-MERS, of its own volition, may assign interests in the Note or Mortgage. Shell
Game-MERS must first get permission from the entity who can enforce the Note. There was no interaction between Shell Game-MERS and the entity entitled to enforce the Note.
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68. Shell Game-MERS never proved that there was an agency agreement created by or upon instruction by an entity entitled to enforce the Note which required Shell Game-MERS to follow any instructions. Because it has no employees, Shell Game-MERS did not create or sign any document involving the Mortgage loan. A so-called “certifying officer” signed the assignment that was created and provided by that individual’s employer.
BREACH OF CONTRACT
69. The Plaintiff signed account papers when the Account was opened. A representative of Defendant, ELITE, signed the papers also, but the ONLY capacity in which the bank’s representative signed was so as to certify that the Plaintiffs’ signature was valid and correct. Put another way, the representative of the bank did NOT append her signature in a mode or manner that creates a contract between the Plaintiffs and the bank. The reason that the bank’s representative did not sign in order to create a contract is that THE BANK WAS
AWARE THAT IT WAS NOT GIVING THE PLAINTIFFS ANYTHING AT ALL.
When the Plaintiffs signed the documentation, what they did was create a new negotiable piece of paper which, provided the bank accepted it as such, could be converted into a Loan .
BUT IT IS A LOAN TO THE BANK AND NOT THE PLAINTIFFS.
As stated herein above, what actually happened is that the Plaintiffs’ Promissory Note was immediately monetized and then deposited as cash into a deposit account at the bank. The
Plaintiffs were never told that this occurred. The bank’s books showed the transaction as a credit, as banks are privileged institutions which enjoy the right to create money by monetizing promissory notes. The Bank placed the amount that the Plaintiffs loaned to them via the loan
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document into the Plaintiffs’ account (deposit account), and issued a certified check or some other payment method from the transaction book entry account, using the bank’s name on a bank check. That process created a debit on the bank’s books. The numbers are of course all just bookkeeping entries, which simply debit the Plaintiffs’ account for the amount of the bank check.
The main reason that Defendants cannot establish who is the Holder in Due Course of the Note, or establish the fact as to any entity who is entitled to enforce the Note, is because there was no actual loan that was received by the Plaintiffs, contrary to the statements made in the Note.
But the Plaintiffs possessed no knowledge they actually funded their own transaction through their own Promissory Note, and there was no disclosure to them as they were never told that this was the basis of the entire transaction, or that they still had a demand deposit account at the bank from which the check to them originated via the transaction account.
So the entire arrangement is absolutely Unconscionable from the outset. There never was any valid contract, so that no obligation could ever have arisen upon its terms .
The bank was clearly unjustly enriched by means of the fraudulently prepared documents which have cleverly and most deviously concealed the true legal nature of the transaction wherein the bank was never in any danger of having incurred any risk whatsoever, and was enriched, while not handing over the money to the Plaintiffs, who were the actual issuer of the Promissory Note and who received no “Consideration” from the Defendants, for the creation of the mortgage. “A lawful consideration must exist and be tendered to support the Note.” Anheuser-Busch Brewing Company v. Emma Mason, 44 Minn. 318, 46 N.W. 558
(1890).
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70. The Mortgage, referred to above, is not a contract as it is only signed by one party, the Plaintiffs . A promissory agreement must be between two or more persons, and the preliminary step in making of which is an offer by one and acceptance by another, in which the minds of parties meet and concur in understanding of the terms . Lee v.
Travelers Ins. Co. of Hartford, Conn. This was an Unilateral Contract, which is a contract which one party makes an express engagement or undertakes a performance, without receiving in return any express engagement or promise of performance from the other.
There is no other!! The alleged lender indicates they gave Plaintiffs a loan, and Plaintiffs promised to pay it back. ELITE gave Plaintiffs nothing.
71. The Defendants have failed to, refused to, or are unable to provide a full accounting that is acceptable under GAAP standards, by providing the T-chart, showing what mortgage company funds, if any, were lent to the Plaintiffs. There has been no showing by
Defendants of all amounts received by the Defendants as a result of financial activity in reference to the mortgage and note.
72. When loans are extended, the party extending the loan MUST PROVIDE
DISCLOSURE, or the transaction is illegal . Once the banking corporation has committed an ultra vires action, their charter is required to be suspended and they are obliged to cease all business transactions immediately until reinstated by the State banking authority.
All the transactions since the ultra vires action are null and void.
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73.
Exhibit “D” attached herein, is a certified, signed Affidavit prepared by Walker
F. Todd, an Attorney who for 20 years, worked as an attorney and legal officer tor the legal departments of the Federal Reserve Banks of New York and Cleveland. His Affidavit and
Memorandum are authoritative and he states therein, pertaining to the case that he was testifying in: “The Plaintiff (the Bank) in fact never lent any of its own pre-existing money, credit or assets as consideration to purchase the Note or credit agreement from the Defendants”.
He also quotes extensively from the Federal Reserve Bulletin “MODERN MONEY
MECHANICS”, stating that, “What they (banks) do when they make loans is to accept promissory notes in exchange for credits to the borrowers’ transaction accounts”.
74. Mr. Todd goes on to state that:
“It has been settled beyond controversy that a bank, under Federal law, being limited in its power and capacity, cannot lend its credit nor guarantee the debt of another. All such contracts being entered into by its officers are ultra vires and not binding upon the corporation.” It is unlawful for banks to loan their deposits. Howard & Foster Co. vs. Citizens National Bank, 133 S.C. 202, 130 S.E. 758
(1926).
“Neither, included in its powers nor incidental to them, is it a part of a bank’s business to lend its credit. If a bank could lend its credit as well as its money, it might, if it received compensation and was careful to put its name only to solid paper, make a great deal more than any lawful interest on its money would amount to. If not careful, the power would be the mother of panics…
Indeed, lending credit is the exact opposite of lending money, which is the real business of a bank, for while the latter creates a liability in favor of the bank, the former gives rise to a liability of the bank to another .
”
I Morse. Banks and Banking 5 th
Ed.
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Es Sec 65; Magee, Banks and Banking, 3 rd
Ed. Sec 248:. American Expess Co. v. Citizens State
Bank, 181 Wis. 172, 194 NW 427 (1923).
There is no doubt but what the law is that a national bank cannot lend its credit or become an accommodation endorser.”
National Bank of Commerce v. Atkinson, 55 F. 465;
(1893).
“A bank can lend its money, but not its credit.” First Nat’l Bank of Tallapoosa v.
Monroe, 135 Ga. 614, 69 S.E. 1123 (1911).
75. See Exhibit “E” attached hereto and made a part hereof, which is a Memorandum prepared from the Official Website of the Bar Association that states therein that: “The “ bank” allegedly “loaned me their money” when in reality they deposited (credited) my promissory note and used that deposit to “pay my seller”. “In Summary it is stated that the bank may say that they gave you a check, you owe the bank money. This information shows you that the check came from the money the alleged borrower provided and the bank never loaned any money from other depositors.”
76. Federal Reserve Bank Policies and Procedures as well as the GAAP requirements imposed upon all Federally Insured Banks (FDIC) banks in Title 12 of the
United States Code, Section 1831(a), prohibits banks from lending their own money from their own assets or from other depositors. The bank never told the Plaintiffs where the funds were to come from. They never Disclosed to the Plaintiffs that they had to exchange their promissory note for cash (because they could not lend their credit), so that they could then loan the money back to them, which had been wrongfully converted from their own
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promissory note.
This entire process, including the Note and the Mortgage, DOES NOT CREATE A
CONTRACT, which a court would require to be filed, in order to support any request for foreclosure. There is no Contract that Defendant banks possess or that they can provide that would defeat our Superior Title to the Subject Property.
No loan can be foreclosed upon without a Contract to back it up. Show us the
Contract !!
77. In conclusion, any claim, that we have made above, against any Defendant that is grounded in Contract Law is made in the alternative because we deny that we have a contractual relationship with any Defendant regarding our Note and Security Instrument.
COMPLAINT FOR QUIET TITLE
78. Upon information and belief, neither Defendants, ELITE, BOA, MERSCORP , or Shell Game-MERS , or any other Defendant who might enter this action has any interest in the
Property that is superior to that of the Plaintiffs.
79. Upon information and belief, any, and each, document within the public records that impairs the Plaintiffs’ clear and unencumbered interest in the Property is invalid and should be released by order of the Court.
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80. Plaintiffs are seeking to quiet title against the claims of all Defendants including the claims of all possessors of inferior title and interest of the Mortgage recorded against the title to the property, the claims of all unknown Defendants whether or not the claim or cloud upon title is known to Plaintiffs and the unknown, uncertain, or contingent claim, if any, or any
Defendants named herein or otherwise unknown. The claims of Defendants are without any right whatsoever and such Defendants have no right to title, estate, lien, or interest whatsoever in the above described property or any part thereof. This action is brought by the Plaintiffs to
Quiet Title to all of the real estate against the claims of each and all of the Defendants.
81. Plaintiffs seek to quiet title as of a date to be determined by this honorable court.
82. Plaintiffs are entitled to equitable relief and quiet title by a judicial decree and declaring Plaintiffs to be the title owner of record of the property as to effective date of said cancellation of the Mortgage recorded against title and quieting the Plaintiffs’ title therein and thereto subject only to such legitimate liens and encumbrances as the court may deem valid, and avoiding any liens or encumbrances upon the property created by the Defendants or by their putative predecessors or by any of them.
DECLARTORY JUDGMENT REQUEST
83. Plaintiffs allege that an actual controversy has arisen and now exists between the
Plaintiffs and Defendants. Plaintiffs desire a judicial determination and declaration of their rights with regard to the property and the corresponding Promissory Note and Mortgage. S uch
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determination is necessary and appropriate at this time under the circumstances so that all parties may ascertain and know their rights, obligations and interests with regard to the Property.
Plaintiffs seek declaratory rulings as are determined by the Court, that are necessary to carry out the purposes and intent of the relief requested in this Complaint.
Plaintiffs seek declaratory rulings pertaining to the documents that constitute a cloud upon Plaintiffs’ title.
84. Plaintiffs also specifically request that this Court immediately also enter an order for publication to the named Defendants, so that all persons or entities who may have an interest in the Property, whether allegedly known or unknown, are notified of this action and may come forward to make a claim, as appropriate. If no other person or entity has claim to the Property and it is so found at the end of the publication period and at the end of the trial of this matter, so that any and all claims to, or interest in, the title, can by fully adjudicated, then at that time, they shall be forever barred, if no claim of interest can be proven. This request for decree is made pursuant to N.M.S.A. in the form so required by the statute.
85 . As stated above, Plaintiffs have named all currently known and unknown persons or entities which may have an interest in the Mortgage and/or Note or may have any claim to the Property which are and could be the subject of this lawsuit. Plaintiffs are also asking this Court, to set for publication in a local newspaper, setting forth legal notifications, a notice consistent with New Mexico Statutes, that Plaintiffs seek and asks, anyone claiming an interest in the Property, the Mortgage and/or Note in the Property, of any kind, or claims any interest of any kind, that could be determined by the Declaratory Judgment, which is part of this Complaint for Quiet Title, come forward at this time to make such claim or be forever
40

precluded from doing so. Plaintiffs allege that each of the entities named in this Complaint for Quiet Title, contributed in one or more ways to the title being slandered and requiring a
Complaint for Quiet Title to remedy the title issues so that it would become insurable by a
Title Company.
86. Plaintiffs, upon information and belief, alleges that based upon the filings and lack of filings at the Sandoval County Clerk & Recorders Office, with regard to the title on
Plaintiffs’ Property, which is the subject of this Complaint for Quiet Title and Declaratory
Judgment action, and which gives rise to the conclusion that the chain of title on the Property is irretrievably broken because transfers of property and recordings have been made by persons not in a correct chain of title; and, therefore without the authority to make such filings. These paragraphs also draw the conclusions from these facts regarding the broken chain of title that are consistent with the laws of this State.
CLAIMS FOR TEMPORARY RESTRAINING ORDER AND PERMANENT
INJUNCTION
87. Come now Plaintiffs for their claim for Temporary and Permanent Injunctive
Relief against all currently named Defendants, as well as, any and all John & Mary Does who may claim to be a holder of Plaintiffs’ Note.
As set forth above, Plaintiffs have been threatened with foreclosure and eviction from their Property, which Property is unique. Under New Mexico Statutes it is provided that an injunction can be granted when it appears by the Complaint that the Plaintiffs are entitled to the relief, or any part thereof, which consists in restraining the commission or
41

42 continuance of the act complained of, either for a limited period or perpetually.
Plaintiffs are entitled to this relief demanded in this Complaint including the restraining and enjoining of the continuance of any foreclosure or eviction proceedings including, but not limited to, the conducting of any Sale of their Property, as the parties seeking to foreclose have failed to demonstrate that they have the legal right to do so and have also instituted the foreclosure through fraudulent misrepresentations.
That if it is found that Defendants have moved forward with said foreclosure, an injunction should be granted stopping any further action and any action shall be found illegal and fraudulent and unwound.
New Mexico Statutes provide that an injunction may be granted when it appears by the Complaint or affidavits that the commission or continuance of some act during litigation would produce waste, or great or irreparable injury, to a party to the action.
As set forth above, hereinabove, the commission or continuance of foreclosure proceedings during this litigation could produce irreparable harm to the Plaintiffs consisting of the loss of their unique real property.
New Mexico Statutes provide that an injunction may be granted when it appears, during litigation, that a party to the action is doing, or threatens, or is about to do, or is procuring or suffering to be done, some act in violation of the rights of another party to the action respecting the subject of the action, and tending to render the judgment ineffectual.
This litigation has been filed prior to the threatened eviction proceedings, and as such if the eviction progresses during the pendency of this litigation, this is an act which is in violation of the rights of the Plaintiffs respecting the Property, which is the subject of this

action, and which act would render any judgment in this case ineffectual, unless the Court were to unwind said transaction and stop any further action by Defendants.
New Mexico Statutes provide that an injunction may be granted when pecuniary compensation would not afford adequate relief. The Property that is the subject of this action is unique. As such, an injunction is necessary, as a pecuniary compensation would not afford adequate relief. As set forth above, Plaintiffs will suffer irreparable harm consisting of the loss of their unique and valuable residential real estate should the relief requested herein not be granted, for which there is no adequate remedy at law.
As, Defendants have not and cannot demonstrate any harm, damages, or impairment of any interest with the granting of the requested relief (as Defendants have not demonstrated interest in either the Note or the Mortgage and instituted a fraudulent foreclosure), no bond should be required of the Plaintiffs as a perquisite to this Court’s granting of the relief requested herein.
At the same time of filing this Complaint for Quiet Title, Plaintiffs are recording a
Notice of Lis Pendens, in regard to this litigation, in the Office of the Clerk and Recorder of
Sandoval County, New Mexico, in accordance with New Mexico law, giving notice to all, that the title is clouded and that they maintain superior title to said Property solely in their names for the reason set forth in this Complaint for Quiet Title, as well as in their Declaratory
Judgment action, which is part of this litigation.
This Lis Pendens shall serve as a notice to any and all persons that any subsequently recorded conveyance or interest in said real estate shall be considered a subsequent purchase or encumbrance and shall be bound by the proceedings taken after the recording of this notice the same as if such person were a party to this action.
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Until such time as all issues are resolved by this Complaint for Quiet Title, in regard to the Property, which includes a request for declaration of the rights of all parties to the
Mortgage/Note, Plaintiffs state that their only remedy to establish their superior title to the
Property, described herein, and to forestall a Complaint for Foreclosure, is for this Court to enter a Temporary Restraining Order and a Permanent Injunction against one or more of
Defendants, named and unnamed, preventing them from going forward with the foreclosure action against the Property. Said foreclosure action was filed on September 15, 2012 in the
Thirteenth Judicial District, Sandoval County, New Mexico as Case No. D-1329-CV-2012-
01964.
Plaintiffs will suffer irreparable damage arising from the sale of their home, if this
Court does not enter a Temporary Restraining Order and Permanent Injunction to stop the foreclosure upon their home. Plaintiffs requests such an order, so that they may pursue their rights to have their Complaint for Quiet Title, which includes a Declaratory Judgment at law and equity, determined by this Court, with a jury of their peers, and if necessary, an appellate
Court.
CONCLUSION
THEREFORE, we were never told where the funds for the loan were coming from;
We were never told that the contract We signed, the promissory note, was going to be a negotiable instrument by the bank and become an asset on the bank’s accounting books;
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The bank never told us that our signature on that note, makes it “money”, according to the Uniform Commercial Code (UCC), sections 1-201(24) and 3-104;
We were never told that our promissory note would be taken, recorded as an asset by the bank, and then sold by the bank for cash, without “valuable consideration” given to obtain our promissory note;
The bank did not give us a deposit slip as a receipt for the promissory note we gave them, just as the bank would normally have to provide when we make a deposit to the bank;
We were never told that the bank would create a new account at the bank that would contain the money that we gave them;
We were never told that a check from this new account would be issued with our signature, without our knowledge, and that this new account would be the source of the funds behind the check that was given to us as a “loan”.
Since we paid money in the form of a promissory note to the “alleged” lender to perform according to a loan agreement, we are now hereby demanding Adequate Assurance of Due Performance pursuant to UCC 2-609 that the “alleged” lender has performed according to the loan agreement and that the “alleged” original lender used their own money to purchase our promissory note and did not accept our promissory note as money, or like money, to fund the check or similar instrument that the “alleged” lender then lent to us— which would have an economic effect similar to stealing, counterfeiting and swindling—and that the “alleged” lender has followed the Federal Laws 12 USC Sec. 1831(a)(2)(A) and/or
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CFR 741.6(b) regarding Generally Accepted Accounting Principles and Generally
Accepted Auditing Standards concerning this loan.
Once again we are stating, that to be a Holder In Due Course, an entity must perform the following 3 deeds: 1) purchase the promissory note from the borrower; 2) take the promissory note in GOOD FAITH using honesty, absence of malice and the absence of design to defraud or to seek an unconscionable advantage (See Black’s Law Dictionary for good faith); and, 3) have no notice of any defenses against payment of other claims on the promissory note.
Here, the “alleged” lender never paid one red cent of consideration to purchase the note from the alleged borrower; the GAAP were violated; and, material facts of the alleged agreement were concealed concerning the transaction. The Defendant bank, BOA, is not a Holder In Due
Course of the promissory note and we demand that the stolen promissory note be returned to us.
WHEREFORE, the Plaintiffs pray that they be permitted to have service by publication upon all of the Defendants upon whom personal service cannot be obtained and for such other and further relief as the Plaintiffs are entitled to in the premises.
Plaintiffs further pray for the establishment of their estate in fee simple in and to the real estate against the inferior adverse claims of the Defendants, and each of them, and everyone claiming by, through or under them, and that the Defendants, and each of them, and everyone claiming by, through or under them is barred and forever stopped from having or reclaiming any lien upon, or right, title or interest in or to the real estate adverse to the estate of the Plaintiffs, and that the title of the Plaintiffs thereto in fee simple be forever Quieted and set at rest.
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“If the American people ever allow private banks to control the issue of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until
their children wake up homeless on the continent their fathers conquered.”
“The issuing power of money should be taken from banks and restored to Congress and the people to whom it belongs. I sincerely believe the banking institutions having the issuing power of money, are more dangerous to liberty than standing armies.”
....President Thomas Jefferson

Respectfully Submitted,
_____________________________
Richard Herrera, Pro Se
5036 Mira Vista Dr. NE
Rio Rancho, New Mexico 87144
(505) 934-9909
_____________________________
Amanda Herrera, Pro Se
5036 Mira Vista Dr. NE
Rio Rancho, New Mexico 87144
(505) 934-9909
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AFFIDAVIT AND VERIFICATION
STATE OF NEW MEXICO )
) ss.
COUNTY OF SANDOVAL )
Richard Herrera and Amanda J. Herrera, being first duly sworn, upon oath, depose and state:
Our names are Richard Herrera and Amanda J. Herrera and that we are the Defendants in the above Motion For Reconsideration and Motion To Vacate Default Judgment For Foreclosure
And Order Of Sale, and the statements therein are true of our own knowledge, except those statements that are made upon information and belief, and as to those, we believe them to be true.
Richard Herrera, Pro Se
5036 Mira Vista Dr. NE
Rio Rancho, New Mexico 87144
(505) 934-9909
_____________________________
Amanda Herrera, Pro Se
5036 Mira Vista Dr. NE
Rio Rancho, New Mexico 87144
(505) 934-9909
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SUBSCRIBED AND SWORN to before me this ________day of ________________, 20___ by
Richard Herrera and Amanda J. Herrera.
(SEAL)
__________________________________________
NOTARY PUBLIC
My commission Expires on the _______of_________________,________
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STATE OF NEW MEXICO
COUNTY OF SANDOVAL
THIRTEENTH JUDICIAL DISTRICT COURT
No. _________________________
RICHARD HERRERA AND AMANDA J. HERRERA,
Plaintiffs , vs.
BANK OF AMERICA, N.A.; ELITE CAPITAL FINANCE
DBA ELITE FINANCIAL CORPORATION; MERSCORP
HOLDINGS, INC.; MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC. ; ALL PERSONS
CLAIMING BY, THROUGH OR UNDER SUCH PERSONS;
ALL PERSONS UNKNOWN CLAIMING ANY LEGAL OR
EQUITABLE TITLE, ESTATE, LIEN OR
INTEREST IN THE PROPERTY DESCRIBED IN
THE COMPLAINT ADVERSE TO PLAINTIFFS
TITLE THERETO; and, DOES 1 to 20, Inclusive,
Defendants,
NOTICE OF LIS PENDENS
NOTICE IS GIVEN that on July 23, 2013, Plaintiffs filed a COMPLAINT FOR QUIET
TITLE, REQUEST FOR DECLARATORY JUDGMENT AND CLAIM FOR TEMPORARY
RESTRAINING ORDER AND A PERMANENT INJUNCTION in the above-named
1
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Thirteenth Judicial District Court against the above-named Defendants to Quiet Title in regard to title of the Property described herein below. The action is pending and undetermined.
That the general object of the suit is to determine and quiet the superior fee simple title of the Plaintiffs, against the above-named Defendants, in and to the Property. The Property is generally described with the street address of 5203 Mayhill Court NE, Rio Rancho, NM 87144.
If there is a conflict between the legal description and the street address, the legal description shall control and is more particularly described as follows:
LOT NUMBERED NINE (9) IN BLOCK NUMBERED SEVEN (7)
IN ENCHANTED HILLS UNIT 14-A, AS SHOWN ON THE PLAT
ENTITLED ENCHANTED HILLS UNIT 14A, A SUBDIVISION OF
UNPLATTED PROPERTY WITHIN UNIT TWENTY, WITHIN
SECTIONS 15, 22 AND 23, T13N, R3E, NMPM, CITY OF RIO
RANCHO, SANDOVAL COUNTY, STATE OF NEW MEXICO,
FILED IN THE OFFICE OF THE COUNTY CLERK OF SANDOVAL
COUNTY, STATE OF NEW MEXICO, IN VOL. 3, FOLIO 2238-B
(RIO RANCHO ESTATES PLAT BOOK NO. 15, PAGE 14).
This Lis Pendens shall serve as a notice to any and all persons that any subsequently recorded conveyance or interest in said real estate shall be considered a subsequent purchase or encumbrance and shall be bound by the proceedings taken after the recording of this notice the same as if such person were a party to this action.
2
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_________________________________
Richard Herrera, Pro Se
5203 Mayhill Court NE
Rio Rancho, NM 87144
(505) 934-9909
_________________________________
Amanda J. Herrera, Pro Se
5203 Mayhill Court NE
Rio Rancho, NM 87144
(505) 934-9909
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SUBSCRIBED AND SWORN to before me this ________day of ________________, 20___ by
Richard Herrera and Amanda J. Herrera.
(SEAL)
__________________________________________
NOTARY PUBLIC
My commission Expires on the _______of_________________,________
4
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