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HomeMy WebLinkAbout13-2237 Supreme Court of Pennsylvania Cou rt0f Co r>E'an Pleas )'t, V4"N For Prothonotary Use Only: vil Cover. Sheen ' ' - 1TMBERLANU Count ' �' Docket No' The information collected on this form is used solely for court administration purposes. This form does not supplement or re .lace the: Mitt and service o` �leadhr s or other �a rsi s as r'e .Hired bji law or rules n court. S Commencement of Action: ❑D Complaint ❑ Writ of Summons ❑ Petition E ❑ Transfer from Another Jurisdiction ❑ Declaration of Taking C Lead Plaintiffs Name: WELLS FARGO BANK, N.A.. Lead Defendant's Name; DONALD D. DORRIS, JR A /KJA T DONALD D. DORRIS I Are money damages requested? ❑ Yes © No Dollar Amount Requested: ❑ within arbitration limits Check one): outside arbitration limits N is this a Class Action Suit? ❑ Yes © No Is this an MDJ Appeal? ❑ Yes 0 No A Name of Plaintiff/Appellant's Attorney: John Michael Kolesnik, Esq., Id. No 348877 Phelan Hallinan LLP ❑ Check here if you have no attorney (are a Self- Represented [Pro Se] .Litigant) , Nature of the Case Place an "X" to the left of the ONE case category that most accurately describes your PRIMARY CASE. If you are making more than one type of claim, check the one that you consider most important. TORT (do not include Mass Tort) CONTRACT (do not include Judgments) CIVIL APPEALS ❑ Intentional ❑ Buyer Plaintiff Administrative Agencies ❑ Malicious Prosecution ❑ Debt Collection: Credit Card ❑ Board of Assessment ❑ Motor Vehicle ❑ Debt Collection: Other ❑ Board of Elections ❑ Nuisance ❑ Dept. of Transportation ❑ Premises Liability ❑ Statutory Appeal: Other ❑ Product Liability (does not S include mass tort) ❑ Employment Dispute: ❑ Slander /Libel/ Defamation Discrimination E ❑ Other: ❑ Employment Dispute; Other ❑ Zoning Board C ❑ Other: T O MASS TORT ❑ Other: ❑ Asbestos N ❑ Tobacco ❑ Toxic Tort - DES r . • Toxic Tort - Implant REAL PROPERTY MISCELLANEOUS • Toxic Waste ❑ Ejectment ❑ Common Law /Statutory Arbitration B ❑ Other: ❑ Eminent Domain/Condemnation ❑ Declaratory Judgment ❑ Ground Rent ❑ Mandamus ❑ Landlord/Tenant Dispute ❑ Non - Domestic Relations ® Mortgage Foreclosure: Residential Restraining Order i PROFESSIONAL LIABILITY ❑ Mortgage Foreclosure: Commercial ❑ Quo Warranto ❑ Dental ❑ Partition ❑ Replevin ❑ Quiet Title ❑ Other: ❑ Legal ❑ Medical ❑Other; ❑ Other Professional: Pa.R.C.P. 205.5 Updated 01/01/2011 ' F1 ED OF THE PROTHONOTARY 201 APR 24 AH I0: 38 CUMBERLAND COUNTY PENNSYLVA141A PHELAN HALLINAN, LLP ATTORNEY FOR PLAINTIFF John Michael Kolesnik, Esq., Id. No.308877 1617 JFK Boulevard, Suite 1400 One Penn Center Plaza Philadelphia, PA 19103 215 -563 -7000 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA " WELLS FARGO BANK, N.A. F 3476 STATEVIEW BOULEVARD CIVIL DIVISION FORT MILL, SC 29715 Plaintiff, NO. J J� �v4(/ VS. DONALD D. DORRIS, JR A/K/A DONALD D. DORRIS ELIZABETH M. DORRIS 709 MCCORMICK ROAD MECHANICSBURG, PA 17055 -5964 Defendants. CIVIL ACTION — COMPLAINT IN MORTGAGE FORE And now comes WELLS FARGO BANK, N.A., by its attorneys, Phelan Hallinan, LLP and files this Complaint in Mortgage Foreclosure as follows: 1. The Plaintiff is WELLS FARGO. BANK, N.A., 3476 STATEVIEW BOULEVARD, MILL, SC 29715 (hereinafter "plaintiff'). otsd - I3 062 'PA V3 /2 2. The Defendants, DONALD D. DORRIS, JR A/K/A DONALD D. DORRIS and ELIZABETH M. DORRIS, are individuals whose last known address are 709 MCCORMICK ROAD, MECHANICSBURG, PA 17055 -5964. 3. WELLS FARGO BANK, N.A., directly or through an agent, has possession. of the Promissory Note. WELLS FARGO BANK, N.A. is either the original payee of the Promissory Note or the Promissory Note has been duly indorsed. A true and correct copy of said Promissory Note is marked Exhibit "A ", attached hereto and made a part hereof. 4. On or about February 1, 2010, DONALD D. DORRIS, JR and ELIZABETH M. DORRIS made, executed and delivered to WELLS FARGO BANK, N.A a Mortgage in the original principal amount of $367,800.00 on the premises described in the legal description marked Exhibit "B ", attached hereto and made a part hereof. Said Mortgage being recorded in the Office of the Recorder of CUMBERLAND County in Instrument No. 201003523. The Mortgage is a matter of public record and is incorporated .herein by reference in accordance with Pa.R.C.P. 1019(8), which rule relieves. the Plaintiff from its obligation to attach documents to pleadings if those documents are of public record. 5. Plaintiff is the current Mortgagee. 6. DONALD D. DORRIS, JR A/K/A DONALD D. DORRIS and ELIZABETH M. DORRIS are record and real owners of the aforesaid mortgaged premises. 7. Defendants are in default under the terms of the aforesaid Mortgage for, inter alia, failure to pay the monthly installments of principal and interest due March 1, 2012. 062 -PA -V3 8. As of 03/01/2013, the amount due and owing Plaintiff on the mortgage is as follows: Principal Balance $356,911.07 Interest $ 19,816.03 02/01/2012 through 03/01/2013 Late Charges $ 400.52 Property Inspections $ 120.00 Escrow Deficit $ 3,911.41 Suspense Balance $ (2,114.69) TOTAL $379,044.34 plus interest and all other additional amounts authorized under the Mortgage and Pennsylvania Law, actually and reasonably incurred by Plaintiff including but not limited to, costs (including escrow advances) and Plaintiff's attorneys' fees and expenses. Plaintiff reserves the right to file a motion in the above - captioned action to add such additional sums authorized under the Mortgage and Pennsylvania Law to the above amount due and owing when incurred 9. Notice of Intention to Foreclose as set forth in Act 6 of 1974, Notice of Homeowner's Emergency Mortgage Assistance Program pursuant to Act 91 of 1983, as amended in 2008, and/or Notice of Default as required by the mortgage document, as applicable, have been sent to the Defendant(s). 10. This is an in rem action only against the aforesaid mortgaged premises. Plaintiff is not seeking a judgment of personal liability against the Defendant(s), but reserves its right to do so in a separate legal action if such right exists. If Defendant(s) have received a discharge of personal liability in a bankruptcy proceeding, this action is in no way an attempt to re- establish such liability. 062 -PA -V3 WHEREFORE, Plaintiff demands an in rem judgment in mortgage foreclosure for the amount due of $379,044.34, with interest thereon plus additional costs (including additional escrow advances), additional attorneys' fees and costs and for foreclosure and sale of the mortgaged premises. By: Date: Jo ichael Kolesnik, Esq., Id. No.308871 A orney for Plaintiff 062 -PA -V3 Exhibit "A" NOTE FEBRUARY 1, 20I0 CARLISLE PENNSYLVANIA faitel K - hyl ISwref 709 MCCOIt41CR AM, DtECHANICSBURG, PA 17055 fNvperiy Addmss] 1. BORROWER'S PROMISE TO PAY In return for a loan that I have received, I promise to pay U.S. S ***367,800. DO (this amount is called "Principal "), plus interest, to the order of the Lender. The Leader is WELLS FARGO HANK, N.A. I will make all payments xmder ibis Note in the form of cash, check or money order. I understand that the Lender may transfer this Note. The Lender or anyone who takes this Nott by transfer and who is entitled to receive payments under this Note is called the "Note Holder." Z. MERFST interest will be charged on unpaid principal until the full amount of Principal has been paid. 1 will pay interest at a yearly rate of 5.125 %. The interest rate required by this Swion 2 is the rate 1 will pay both before and after any default described in Section 6(B) of this Note. 3. PAYMENTS (A) Time and Place of Payments I will pay principal and interest by making a payment every month. I will make my monthly payment on the 1ST day of each inunth beginning onMARCH, 2010 I will make these payments every month until I have paid all of the principal and interest and any other charges described below that I may owe under this Nate. Each monthly payment will be applied as of its scheduled dtte date and will be applied to Interest before Principal. If, ORFEBRUARY 1, 2040 , 1 still owe amouTo under this Note, I will pay those amounts in full on that date, which is called the "Maturity Date." I will make my monthly payments atWELLS PARGO BANK, N.A. P.O. BOX 11701, NEWARK, NJ 07101 -4701 or at a different place if required by the Note Holder. (B) Amount of Monthly Payments My monthly payment will be in the amount of U.S. $ * * * * *2, 002.63 4. BORROWER'S RIGHT TO PREPAY 1 have the right to ,stake payments of Principal at any time before they are due. A payment of Principal only N known ar. a "Prepayment." When I make a Prepayment, I will tell the Now Holder In writing that I ann doing so. I may not designate a payment as a Prepayment if I have not made all the monthly payments due under the Note. I may make a Pill Prepayment or partial Prcpayments without paying a Prepayment charge. The Notc IIulder will use my Prepayments to reduce the amount of Principal that 1 owe under this Note. However, the Note Voider tray apply my Prepayment to the accrued and unpaid interest on the Prepayment amount, before applying my Prepayment to reduce the Principal amount of the Note. If I make a partial Prepayment, there will be no changes in the due date or in the amount of my monthly payment unless the Note Holder agrees in writing to those changes. W.1r.ft tK D RATE NOTE • Stye family - Fannie Mae/FrMdle Mac VNIFORM m 3200 1101 yMp SN40803100 ?*AFL 3200 tt;NOn RW 312008 . I da eqa 7 of 3 S. LOAN CHARGES if a law, which applies to this loan and which wets maxiruum loan charges, is fivally interpreted so that the interest or other loan charges collected or to be collected in connection with this loan exceed the permitted limits, then: (a) any such loan charge shall be reduced by the amount necessary to reduce the charge to the permitted limit-, and (b) any sums already collected from me which exceeded permitted limits will be refunded to me. The Note liolder may choose to make this refund by reducing the Principal I owe under this Note or by mAi ing a direct payment to me. If a refund reduces Principal, the reduction will be treated as a partial Prepayment. b. BORROWER'S FAILURE TO PAY AS REQUIRED (A) Late Charge for Overdue Payments If the Now Holder has not received the full amount of any monthly payment by the end of 15 calendar days after the date it is due, I will pay a lute charge to the Note Holder. The amount of the charge will be 5.000 % of my overdue payment of principal and interest. I will pay this late charge promptly but only once on each late payment. (B) Default If i do not pay the full amount of each monthly payment ou the date it is due, I will be in default. (C) Notice of Default If 1 am in default, the Note Holder may send me a written notice telling the that if 1 do not pay the overdue amount by a certain date, the Note Holder may require me to pay immWiatrly the full amount ol' Principal which has rrd been paid and all the interest that I owe on that amount. 'that date must be at least 30 days after the date on which the notice is mailed to me or delivered by other means. (D) No Waiver By Note Holder Even if, at a time when l am in default, the Note Holder does tint retluire me to pay immediately in full as described above, the Note Holder will still have the right to do so if 1 am in default at a later time. (E) Payment or Note Holder's C. *ts and Expenses If the Note Holder has required the to pay inunediately in full as described above, the Note Holder will have the right to be paid back by me for all of its costs and expenses in enforcing this Note to the extent not prohibited by applicable law. Those expenses include, for example, reasonable attorneys' fees. 7. MVING OF N()T M Unless applicable law requires a different tnethod, any rx)lice that must be given to me under this Note will be given by delivering it or by marling it by first class mail to me at the Property Address above or at a different address If 1 give tins Note Holder a notice of my different address. Any notice that must be given to the Note Holder under this Note will be given by delivering it or by mailiag it by first class mail to the Note Holder at the address stated in Section 3(A) above or at a different address if i am given a notice of that different address. S. OBLIGATIONS OF PERSONS UNDER THIS NOTE If more than one person signs this Note, each person is fully and personally obligated to keep all of the promises made in this Note, including the. promise to pay the full amount owed. Any person who is a guarantor, surety or endorser of this Note is also obligated to do these things. Any person who takes over these obligations, including the obligations of a guarantor, surety or cadomr of this Note, is also obligated to keep all of the promises made in this Note. The Note Holder may enforce its rights under this Note against each person individually or against all of to together. This means that any one of us may be required to pay all of the amounts owed under this Note. 9. WAIVERS I and any other person who has obligations under this Note waive the rights of Presentment and Noticc of Dishonor. 'Presentment" meats the right to require the Note Holder to detuat)d payment of amounts due. "Notice of Dishonor" means the Tight to require the Note Mulder to give notice to orber persons that zanumuls due have not been paid. ED WE NOTE- Shah FemtlY • Fen ,4 ?A —IF .am* Mx UNIFORM INSTAUMENf P 3200 1101 VMO VMP6N am 108031.00 Willa» kMw.r F.r++cbi Swv CRS In Pap4 Z of 3 t 10. UNIFORM SECURED NOTE This Note is a uniform Instrument with limited variations ill SUmc jurisdictions. In addition to the protection` given to the Note Haider under this Note, a Mortgage. Deed of Trust, or Security Deed (thc "Security Instrument*). dated the same date as this Note, protects the Note Holder front possible tosses which might result if I do not keep the promises which I make In this Note. That Security Instrument describes bow and under what conditions I may be required to umake immediate payment in full of all amounts I owe under this Note. Sonic of those conditions arc described as follows: If all or any part of the Property or any Interest in the Properly is sold or transferred (or if Pnrrowcr is not a natural person and a beneficial interest in Bormwcr is sold or transferred) withtfut l.endrr's prior written consent, Lem --r may require immediate payment in full of ail sums secured by this Security Instrument. However, this nption shall nut be exercised by Lender if such exercise is prohibited by Applicable Law. If Lender exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 34 days from the date the notice is given in accordance with Section 15 within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to ihr expiration of this period, Lender may invoke any remedies permitted by this Security Insirument without further notice or demand on Borrower. WITNESS THE I•IAND(S) AND SEALS) OF THE UNDFItSiGNM (Seal (Seal) ONALD D DORMS JP. - &vrowcr fmorruwcr (Seal) (Seal) Borrower - Boffower (Seal) (Seal) Borrower - Borrower (Seal) (Seal) .}�,Irnfwrr 13urr1rwer (Sign Original Only] RATE NOTE -fie F.m2V - Frma Mac/Freddie Mac VNIFQAM INSTRUMENT Form 3200 r of VMP O VMP5N 108031.00 Wotmrs Kluner Fwrcal Scmws Poe 3 of 3 Exhibit"'B" LEGAL DESCRIPTION ALL THAT CERTAIN tract or parcel of ground with the buildings and improvements thereon erected, situate in the Township of Upper Allen, County of Cumberland, Commonwealth of Pennsylvania, bounded and described as follows: BEGINNING at a point on the Northern bank of the Yellow Breeches Creek at a corner of land now or late of John E. Cline; thence extending along said Creek Road North 74 degrees West, 194.71 feet to a corner of land now or late of Eric H. and Mary P. Humphries; thence along said land and crossing Township Road No. T -611 North 8 degrees 15 minutes East 262.06 feet to a point; thence still along said land North 24 degrees 41 minutes East 206.48 feet to a point in line of land now or late of Dr. A. Z. Ritzman; thence along said land south 79 degrees East 270 feet to a corner of land now or late of John E. Cline; thence along said land and recrossing Township Road No. T -611 South 24 degrees 15 minutes West 492.6 feet to the point and place of BEGINNING. BEING known and numbered as 709 McCormick Road. PROPERTY ADDRESS: 709 MCCORMICK ROAD, MECHANICSBURG, PA 17055- 5964 PARCEL # 42 -11- 0272 -043. File #: 300176 VERIFICATION Jasmin McLean, hereby states that he' lie 's Vice President Loan Documentation of WELLS FARGO BANK, N.A., plaintiff in this matter, that he she is authorized to make this Verification, and verify that the statements made in the foregoing Civil Action in Mortgage Foreclosure are true and correct to the best of hi.. ; acr '.nfnrma n. and belief. The undersigned understands that this statement is made subject to the penalties of 18 Pa. C.S. ' Sec. 004 relating to unsworn falsification to authorities. Name: '' s" mi;n! McLean Title: Vice President Loan Documentation Company: Wells Fargo Bank, N.A. Date: 03/04/2013 086 -PA -V2 File # 300176 FORM 1 IN THE COURT OF COMMON PLEAS WELLS FARGO BANK, N.A. OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff(s) �0 M rTl -� vs. N 0 CD DONALD D. DORRIS, JR A /K/A DONALD D. DORRIS� ELIZABETH M. DORRIS 13 J,3 o_ Defendant(s) evil y --+ co NOTICE OF RESIDENTIAL MORTGAGE FORECLOSURE DIVERSION PROGRAM You have been served with a foreclosure complaint that could cause you to lose your home. If you own and live in the residential property which is the subject of this foreclosure action, you may be able to participate in a court- supervised conciliation conference in an effort to resolve this metier with your lender. If you do not have a lawyer, you must take the following steps to be eligible for a conciliation conference. First, within twenty (20) days of your receipt of this notice, you must contact MidPenn Legal Services at (717) 2439400 extension 2510 or (800) 822 -5288 extension 2510 and request appointment of a legal representative at no charge to you. Once you have been appointed a legal representative, you must promptly meet with that legal representative within twenty (20) days of the appointment date. During that meeting, you must,provide:the legal representative with all requested financial information so that a loan resolution proposal can be prepared on your behalf. If you and your legal representative complete a financial worksheet in the format attached hereto, the legal representative will prepare and a Request for Conciliation Conference with the Court, which must be filed with the Court within sixty (60) days of the service upon you of the foreclosure complaint. If you do so aid a conciliation conference is scheduled, you will have an opportunity to meet with a representative of your lender in an attempt to work out reasonable arrangements with your lender before the mortgage foreclosure suit proceeds forward. If you are represented by a lawyer, you and your lawyer must take the following steps °to be eligible for a conciliation conference. It is not necessary for you to contact MidPenn Legal Service for the appointment of a legal representative. However, you must provide your lawyer with all requested financial information so that a loan resolution proposal can be prepared on your behalf. If you and your litwyer complete a financial worksheet in the format attached hereto, your lawyer will prepare and file a Request for Conciliatom Conference with the Court, which must be filed within sixty (60) days of the service upon you of the foreclosure complaint. If you do so and a conciliation conference is scheduled, you will have an opportunity to meet with a representative of your len &r in an attempt to work out reasonable arguments with your lender before the mortgage foreclosure suit proceeds forward. IF YOU WISH TO SAVE YOUR HOME, YOU MUST ACT QUICKLY AND TAKE THE STEPS REQUIRED BY THIS NOTICE. THIS PROGRAM IS FREE. Respectfully submitted: 23 � Date John Michael Kolesnik, Esq., Id. N0.308877 Attorney for Plaintiff FORM 2 Cumberland County Residential Mortgage Foreclosure Diversion Program Financial Worksheet Date Cumberland County Court of Common Pleas Docket# BORROWER REQUEST FOR HARDSHIP ASSISTANCE To complete your request for hardship assistance, your lender must consider your circumstances to determine possible options while working with your counseling agency. Please provide the following information to the best of your knowledge: C1JST0Mj-'.jZ/1'R1NiARV APPLICANT Borrower name(s): Property Address: - City: State; Zip: Is the property for sale? Yes ❑ No ❑ Listing date: Price: $ Realtor Name: Realtor Phone: Borrower Occupied? Yes ❑ No ❑ Mailing Address (if different); City: State: Zip: Phone Numbers: Home: Office: Cell: Other: Email: -- # of people in household; How long? Mailing Address: City: State: Zip: Phone Numbers: Home: Office: Cell: Other: Email: -- # of people in household: How long? FINANCIAL INFORMATION First Mortgage Lender: Type of Loan: Loan Number: Date You Closed Your Loan: Second Mortgage Lender: Type of Loan: Loan Number: - Total Mortgage Payments Amount: $ Included Taxes & Insurance: ` Date of Last Payment: Primary Reason for Default: Is the loan in Bankruptcy? Yes ❑ No ❑ If yes, provide names, location of court, case number & attorney: Assets Amount Owed Value: Home: $. $ Other Real Estate: $ $ Retirement Funds: $ $ Investments: $ Checking: $ $ Savings: $ Other: $ $ Automobile #1: Model: Year: Amount owed: Value: Autom #2 : Model: _ Year: Amount owed: Value: Other transportation automobiles, boats, motorcyclesZ: Model:� Year: Amount owed: Value Monthly Income Name of Employers: 1:. Monthly Gross Monthly Net 2. Monthly Gross Monthly Net 3. Monthly Gross Monthly Net Additional Income Description (not wages): 1. monthly amount: 2, monthly amount:, Borrower Pay Days: Co- Borrower Pay Days: Monthly Expenses: (Please only include expenses you are currently paying) EXPENSE AMOUNT EXPENSE AMOUNT Mort a' a Food 2" Mortgage Utilities Car Pa ment s Condo/Neigh. Fees Auto Insurance Med. not covered Auto fuel/repairs Other prop. paymen Install. Lo Pa yment Cable TV Child Su ort /Alim, Spending Mone Da . /Child Care/Tuit. Other Ex pens Amount Available for Monthly Mortgage Payments Based on Income & Expenses: Have you been working with a Housing Counseling Agency? Yes ❑ No ❑ If yes, please provide the following information: Counseling Agency: Counselor: Phone (Office) Fax; Email' Have you made application for Homeowners Emergency Mortgage Assistance Program (HEMAP) assistance? Yes ❑ No ❑ If yes, please indicate the status of the application: ' Have you had any prior negotiations with your lender or lender's loan servicing company to resolve your delinquency? Yes ❑ No ❑ If yes, please indicate the status of those negotiations: Please provide the following information, if known, regarding your lender and lender's loan servicing company: Lender's Contact (Name): Phone: Servicing Company (Name): Contact: Phone; I/We, authorize the above named to use /refer this information to my lender / servicer for the sole purpose of evaluating my financial situation for possible mortgage options. I/We understand that I /we am /are under no obligation to use the counseling services provided by the above named Borrower Signature Date Co- Borrower Signature Date Please forward this document along with the following information to lender and lender's counsel: 1. Proof of income 2. Past 2 bank statements 3. Proof of any expected income for the last 45 days 4. Copy of a current utility bill 5. Letter explaining reason for delinquency and any supporting documentation (hardship letter) 6. Listing agreement (if property is currently on the market) NOTICE You have been sued in Court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and Notice are served by entering a written appearance personally or by attorney and filing in writing with the Court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so, the case may proceed without you, and a judgment may be entered against you by the Court without further notice for any money claimed in the Complaint or for any other claim or relief requested by the plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE, IF YOU DO NOT HAVE A LAWYER, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE t TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. CUMBERLAND COUNTY ATTORNEY REFERRAL CUMBERLAND COUNTY BAR ASSOCIATION CUMBERLAND COUNTY COURTHOUSE 2 LIBERTY AVENUE CARLISLE, PA 17013 (717) 249 -3166 (800) 990 -9108 File N: 300176 SHERIFF'S OFFICE OF CUMBERLAND COUNTY Ronny R Anderson '=-,'L�: r•-- ,� Sheriff _ �•`� f Jody S Smith 1313 HQ y !o Chief Deputy r, .T # Richard W Stewart CUMBERLAND RLAND Cotjt 1 Solicitor `' °'~ '� PEMSYLVANI, Wells Fargo Bank, N.A. Case Number vs. 2013-2237 Donald Dennis Dorris, Jr(et al.) SHERIFF'S RETURN OF SERVICE 05/02/2013 04:26 PM- Deputy Jason Kinsler, being duly sworn according to law, served the requested Notice of Residential Mortgage Foreclosure Diversion Program and Complaint in Mortgage Foreclosure by "personally" handing a true copy to a person representing themselves to be the Defendant, to wit: Donald Dennis Dorris, Jr at 709 McCormick Road, Upper Allen, Mechanicsburg, PA 17055. ( ��- J SON KINSLER, DEPUTY 05/02/2013 04:26 PM - Deputy Jason Kinsler, being duly sworn according to law, served the requested Notice of Residential Mortgage Foreclosure Diversion Program and Complaint in Mortgage Foreclosure by handing a true copy to a person representing themselves to be Donald Dorris, Husband of defendant,who accepted as"Adult Person in Charge"for Elizabeth M Dorris at 709 McCormick Road, Upper Allen, Mechanicsburg, PA 17055. J ON KINSLER, DEPUTY SHERIFF COST: $55.30 SO ANSWERS, May 03, 2013 RbNtrY R ANDERSON, SHERIFF F F1 C E - n iiOTHONU IAV or 2013 My 15 PH 2. 3 1 CUMBERLAND C13UNTY PEf4NSyL\jAt#A Forma Pauperis WELLS FARGO BANK,N.A., IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, Plaintiff PENNSYLVANIA VS. NO.: 2013-2237 CIVIL TERM DONALD and ELIZABETH DORRIS, RESIDENTIAL MORTGAGE Defendants FORECLOSURE DIVERSION PROGRAM PRAECIPE TO PROCEED IN FORMA PAUPERIS TO THE PROTHONOTARY: Kindly allow, Donald and Elizabeth Dorris, Defendants,to proceed in forma pauperis. 1, Stephen L. Grose, attorney for the party proceeding, in forma pauperis, certify that I believe the party is unable to pay the costs and that I am providing free legal services to the party. Respectfully submitted, SAIDIS SULLIAN &ROGERS Dated: May 2013 By: /STE EN L'-GROSE Attorney I.D. #31006 635 N. 12'' Street, Suite 400 Lemoyne, PA 17043 (717) 612-5802 sarose@ssr-attomeys.com CERTIFICATE OF SERVICE 1, Stephen L. Grose, Esquire, one of the attorneys for defendants, Donald and Elizabeth Dorris,hereby certify that I have served the foregoing paper upon counsel of record this date by depositing a true and correct copy of the same in the United States mail, first-class postage prepaid, addressed as follows: John Michael Kolesnik,Esquire Phelan Hallinan,LLP 1617 JFK Boulevard, Suite 1400 One Penn Center Plaza Philadelphia, PA 17103 SAIDIS SULLIVAN&ROGERS By: Step en L. Grose Dated: May , 2013 FORM 3 Wells Fargo Bank, N.A. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY,PENNSYLVANIA Plaintiff(s) Residential Mortgage Foreclosure VS. Program Donald and ElizabetIDefendant(s) 2013-2237 CIVIL CD Dorris co C- rn rn REQUEST FOR CONCILIATION CONFERENCE r-,-J Cn C) Pursuant to the Administrative Order dated Feb. 28 2012 governing the C rland County Residential Mortgage Foreclosure Diversion Program,the undersigned hereby leg as follows: — C) -7.7 I Defendant is the owner of the real property which is the subject of this mortgage'-n foreclosure action; 2. Defendant lives in the subject real property,which is defendant's'primary residence; 3. Defendant has b'een served with a"Notice of Residential Mortgage Foreclosure Diversion Program" and has taken all of the steps required in that Notice to be eligible to participate in a court-supervised conciliation conference. The undersigned verifies that the statements made herein are true and correct. I understand that false statements are made subject to the penalties of 18 Pa. C.S. §4904 relating to unsworn falsification to authorities. (, 11-3113 Sig"naturg of Defendant's Counsel/Appointed Date Legal Representative h Signature of Defendant Date/ Signal-are of Defendant Da WELLS FARGO BANK,N.A., IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVA vs. CIVIL ACTION Cl) �i rn Co . Cfl-- NO. 13-2237 CIVIL irA DONALD AND ELIZABETH k�l to DORRIS, r- Defendants: , Cj �. N c j CASE MANAGEMENT ORDER AND NOW, this /9-0 day of June, 2013, the parties having agreed to a conciliationy conference, it is hereby ORDERED AND DECREED that: 1. The parties and their counsel are directed to participate in a court-supervised conciliation Conference on 9 ad/3, at /,'S(j 712 in. in Chambers No. 4 at the Cumberland County Courthouse, Carlisle, Pennsylvania. 2. At least twenty-one (21) days prior to the date of the Conciliation Conference, the defendantiborrower must serve upon the plaintiff/lender and its counsel a copy of the "Cumberland County Residential Mortgage Foreclosure Diversion Program Financial Worksheet" (Form 2) which has been completed by the defendant/borrower. Upon agreement of the parties in writing or at the discretion of the Court, the Conciliation Conference ordered may be rescheduled to a later date and/or the date upon which service of the completed Form 2 is to be made may be extended. Upon notice to the Court of the defendant/borrower's failure to serve the completed Form 2 within the time frame set forth herein or such other date as agreed upon by the parties in writing or ordered by the Court,the case shall be removed from the Conciliation Conference schedule and the temporary stay of proceedings shall be terminated. y 3. The defendant/borrower and counsel for the parties must attend the Conciliation Conference in person and an authorized representative of the plaintiff/lender must either attend the Conciliation Conference in person or be available by telephone during the course of the Conciliation Conference. The representative of the plaintiff/lender who participates in the Conciliation Conference must possess the actual authority to reach a mutually acceptable resolution, and counsel for the plaintiff/lender must discuss resolution proposals with the authorized representative in advance of the Conciliation Conference. If the duly authorized representative of the plaintiff/lender is not available by telephone during the Conciliation Conference, the Court will schedule another Conciliation Conference and require the personal attendance of the authorized representative of the plaintiff/lender at the rescheduled Conciliation Conference. 4. At the Conciliation Conference, the parties and their counsel shall be prepared to discuss and explore all available resolution options which shall include: bringing the mortgage current through a reinstatement; paying off the mortgage; proposing a forbearance agreement or repayment plan to bring the account current over time; agreeing to tender a monetary payment and to vacate in the near future in exchange for not contesting the matter; offering the lender a deed in lieu of foreclosure; entering into a loan modification or a reverse mortgage; paying the mortgage default over sixty months; and the institution of bankruptcy proceedings. 5. All proceedings in this matter are stayed pending the completion of the scheduled conciliation conference. BY THE COURT, Kev' A. Hess, P.J. John Michael Kolesnik, Esquire Phelan, Hallinan, LLP 1617 JFK Boulevard, Suite 1400 Philadelphia, PA 19103 For the Plaintiff Stephen L. Grose, Esquire 635 N. 12' Street, 4t'Floor Lemoyne, PA 17043 For the Defendants :rlm WELLS FARGO BANK,N.A., IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVA VS. CIVIL ACTION NO. 13-2237 CIVIL DONALD AND ELIZABETH DORRIS, Defendants IN RE: CONCILIATION CONFERENCE ORDER AND NOW,this day of August, 2013, following conciliation conference,the parties being unable to agree on options in this case and the Court noting that the defendants will have the right to apply for a loan modification during the pendency of this action,this matter is removed from the Residential Mortgage Foreclosure Diversion Program and the stay entered in this case is VACATED. BY THE COURT, � Kevi Hess, P. J. DTroy Sellars,.lars,Esquire For the Plaintiff -- Stephen L. Grose, Esquire For the Defendants C C= :rlm CD C7- s7 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA WELLS FARGO BANK, N.A., Plaintiff CIVIL DIVISION V. : NO. 13-2237 Civil DONALD D. DORRIS JR. 'C--) A/K/A DONALD D. DORRIS and ELIZABETH M. DORRIS, p Defendants NOTICE TO PLEAD TO: Plaintiff, Wells Fargo.Bank, N.A. and its attorney John Michael Kolesnik, Esquire PHELAN HALLINAN, LLP 1617 JFK Boulevard, Suite 1400 One Penn Center Plaza Philadelphia, PA 19103 Attorneys for Plaintiff You are hereby notified to file a written response to the enclosed DEFENDANT'S ANSWER WITH NEW MATTER & COUNTERCLAIMS TO PLAINTIFF'S COMPLAINT within twenty (20) days from service hereof or a judgment may be entered against you. Dated: f Stephen K. Portko, Esq. Bratic & Portko 101 South U.S. Route 15 Dillsburg, PA 17019 Attorneys for Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA WELLS FARGO BANK, N.A., Plaintiff CIVIL DIVISION V. : NO. 13-2237 Civil DONALD D. DORRIS, JR. A/K/A DONALD D. DORRIS and ELIZABETH M. DORRIS, Defendants DEFENDANTS' ANSWER NEW MATTER & COUNTERCLAIMS TO PLAINTIFF'S COMPLAINT AND NOW, come Defendants, Donald D. Dorris, Jr. a/k/a Donald D. Dorris and Elizabeth M. Dorris, by their attorneys, who file the within Answer with New Matter & Counterclaims to Plaintiff's Complaint, as follows: 1. Denied. After reasonable investigation, Defendants are without knowledge or information sufficient to form a belief.as to the truth or falsity of the averment contained in paragraph 1 of the Complaint and therefore denies the allegations thereof. 2. Admitted. 3. Denied. After reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth or falsity of the averment contained in paragraph 3 of the Complaint and therefore denies the allegations thereof. By way of further answer, Defendants believe and therefore aver that Federal National Mortgage Association (Fannie Mae) is actually the owner of the loan with an acquisition date of 03-01-2010; however, Defendants timely rescinded the mortgage and, thus, Plaintiff's transfer or assignment of the subject loan subsequent to Defendants' rescission violated the law. 1 4. Denied. On or before February 3, 2010 and within the three-day rescission period, Defendants timely exercised their right to rescind the loan sending their rescission notice to Plaintiff. As a result, the mortgage on Defendants' properly became automatically voided by operation of law. By way of further answer, Plaintiffs interest in the property is automatically negated regardless of whether or not it was recorded. 5. Denied. The allegations are legal conclusions to which no answer is required. To the extent a reply may be appropriate, these allegations are denied, and Defendants deny that Plaintiff is the current mortgagee. Further, the mortgage was automatically voided when Defendants' exercised their right to rescind the mortgage loan. 6. Admitted in part and denied in part. Admitted that Defendants are the record and real owners of the premises. Denied that the property is mortgaged. To the contrary, the mortgage was automatically voided when Defendant's exercised their right to rescind the mortgage loan. 7. Denied. The allegations of Paragraph 7 of the Complaint are legal conclusions to which no response is required. To the extent an answer may be appropriate, these allegations are denied. To the contrary, the mortgage was automatically voided when Defendant's exercised their right to rescind the mortgage loan. By way of further answer, Defendants aver that they were lied to and deceived about the transaction and about the terms of the loan and as to the amount required to refinance the mortgage. Further, Plaintiff misrepresented the benefits of the loan to Defendants, leading them to believe that a refinance of the mortgage would improve their financial situation. The mortgage was obtained by fraud, misrepresentation,trickery and other misconduct and is not enforceable. 8. Denied. The allegations of Paragraph 8 of the Complaint are legal conclusions to which no response is required. To the extent an answer may be appropriate, these allegations are denied. To the contrary, the mortgage was automatically voided when Defendant's exercised their right to rescind the mortgage loan. By way of further answer, the mortgage does not set forth the terms of payment but refers to the note, which note is not attached to the Complaint and, therefore, the allegations are denied. 2 9. Denied. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth or falsity of the averment contained in paragraph 9 of the Complaint and therefore denies the allegations thereof. 10.Denied. The allegations are legal conclusions to which no answer is required. To the extent a reply may be appropriate, these allegations are denied, and Defendants aver that the mortgage, note or lien is void for the reasons set forth in Defendants' New Matter and, accordingly, Plaintiff is not entitled to the relief requested. WHEREFORE, Defendants respectfully requests that Plaintiffs claim be dismissed, and that judgment be entered in favor of Defendants with attorney's fees and costs, and that Defendants be awarded any other relief that this Honorable Court deems appropriate. NEW MATTER 11.Defendants incorporate their answers to paragraphs 1 through 10 above as if fully set forth in their entirety. 12.Defendants have resided in their home at 709 McCormick Road, Mechanicsburg, Pennsylvania since 1993. 13.On February 28, 2008, Defendants refinanced their home with Atlantic Pacific Mortgage Corp., (herein "Lender"). The mortgage was recorded on 04/24/2008 and named Mortgage Electronic Registration Systems, Inc. (herein "MERS"), as mortgagee and nominee for Lender. 14.Due to a change in Defendants' financial circumstances and increased expenses, they started to look for a loan with more affordable terms that would lower their rate and reduce the monthly payment by an amount of$400 to $500 each month. 15. Defendants, who had a sizable equity in their home, were a prime target for predatory mortgage lenders and brokers. 16.Defendants were unsophisticated borrowers who did not understand many of the basic terms and costs of a typical mortgage loan transaction. 17. Sometime in December of 2009, Defendants saw an advertisement by Wells Fargo that it made loan refinances to consumers that were suitable and affordable, and made its lending decisions based upon a consumer's credit and ability to pay. 3 18.Defendants contacted Plaintiff Wells Fargo Bank, N.A. (herein "Wells Fargo") who represented to them that it offered a wide range of products as solutions to match a family's income level or credit file and that its selection of loans was built to suit specific needs of a customer and that it was ready to help them find a loan that was perfect for them. Defendants were also told that they were making the right decision to enter into a loan with Wells Fargo and that they could refinance at a better rate. 19.As a result, Defendants were then contacted by an agent or employee of Wells Fargo loans who explained to Defendants that Wells Fargo could offer a new loan that would reduce their mortgage payments. 20.All contacts between Defendants and Wells Fargo or their agent were by phone. Wells Fargo's agent repeated the assertions about the loan's benefits and urged Defendants to complete loan application over the phone. In reliance on Wells Fargo's promises that the loan would lower their monthly mortgage payments, they applied for a loan. 21.Defendants aver that contrary to the representations made Wells Fargo's agent, Plaintiff made a loan to them on terms that differed materially from those represented to them prior to closing, which was not suitable and affordable, was not appropriate for their specific situation and was not based on their ability to pay. By way of example, Wells Fargo's loan representative led Defendants to believe that the principal and interest payment would be in the range of$1700 -- an amount Defendants had indicated would be suitable and affordable. 22.Subsequently, Wells Fargo's agent contacted Defendants and informed them that their loan was ready to close without disclosing the terms of the loan. 23.At the closing on February 1, 2010, Defendants were presented with a myriad of loan documents to sign over a short period. The settlement agent showed Defendants the documents and told them where to sign while providing no explanation of what they were signing other than a cursory review. Defendants, who lacked financial sophistication and the ability to fully understand the complicated financial documents placed before them, signed all the documents. 24.After attending settlement, Defendants had the opportunity to carefully review the loan documents they had been asked to sign and discovered that the terms of the new loan were not suitable and affordable and were not what had been promised to them when 4 they initially applied for the loan. Moreover, through another mortgage broker, they had been offered better terms with a VA loan. 25.As a result, on February 2, 2010, Defendants contacted Wells Fargo and spoke with Sharon Eliker about rescinding the mortgage and what steps they needed to take to confirm their rescission. In addition, Defendants communicated in writing their Notice to cancel the loan. A copy of Defendant's letter dated February 2, 2010 and sent to Plaintiff on February 3, 2010 is attached hereto as Exhibit "1" and incorporated by reference herein. 26. On February 8, 2010, Defendant sent another letter to Wells Fargo requesting confirmation of receipt of their notice to cancel and again informing Wells Fargo that they intended to obtain VA loan refinancing, which offered better terms and a lower monthly payment. A copy of Defendant's letter sent on February 8, 2010 is attached hereto as Exhibit "2" and incorporated by reference herein. 27.Having received no communication from Plaintiff regarding their notice to cancel, Defendants sent a third written communication to Wells Fargo's employee, Karen Iblings, on May 17, 2010. A copy of Defendant's letter dated May 17, 2010 sent to Plaintiff is attached hereto as Exhibit "Y and incorporated by reference herein. 28.Wells Fargo sent Defendants a copy of a mortgage satisfaction; however, it was not for the new mortgage loan obtained on February 1, 2010, which loan they had asked Plaintiff to cancel pursuant to their Notice of Rescission. 29.Confused by Wells Fargo's delay and misleading action, Defendants communicated by phone with Wells Fargo on several occasions to inquire if Wells Fargo had effectuated the rescission. Defendants were not given any information except to continue making payments to be applied to the old loan. On June 10, 2010, Defendants sent another letter requesting a response, a copy of which is attached hereto as Exhibit 'A" and incorporated by reference herein. 30.Not knowing whether the old loan was still in effect and fearing the loss of their home, Defendants continued to make payments waiting for Wells Fargo to comply with their notice to cancel the new loan. 5 31.Plaintiff did not process the rescission. Instead, Plaintiffs concocted a plan to avoid its statutory obligation by telling Defendants that Mrs. Dorris is not on the loan so her signing the rescission request is invalid as she was not a qualifying party on the loan. 32.In disregard of Defendant's notice to cancel and follow up letters, Plaintiff went ahead and recorded the new mortgage (although Fannie Mae claims to own the loan with an acquisition date of 03/01/2010) instead of processing Defendants' rescission request. 33.Notwithstanding the above, and without Defendants' knowledge, Wells Fargo had entered into Assignment and Assumption Agreements with one or more parties and Pooling and Service Agreements with one or more parties, including Fannie Mae, prior to or contemporaneously with the "Closing" of the subject "loan transaction." The same was deliberately concealed and the reason Wells Fargo failed to respond to or act upon Defendants' notice to cancel the loan transaction. 34.Contrary to the documents presented before and during the "closing" of the "loan transaction", Wells Fargo was neither the source of funding nor the "Lender." 35.Thus at the time of closing, the source of funding and the "Lender"was a different entity than the nominal mortgagee and was neither named nor disclosed in any fashion. 36.Defendants do not know what version of documentation was presented to Fannie Mae and if Fannie Mae took one or more varying descriptions of the alleged "loan documents" into more than one pool of assets which was eventually sold for the purpose of securitizing the assets of the pool which included the subject loan transaction either once or more than once. 37. There is no assignment of the subject mortgage in the county records to Fannie Mae, but there is a non-recorded Pooling and Services"Agreement and a non-recorded Assignment and Assumption Agreement 38.The note from the subject "loan transaction" was eventually allocated into a new corporation (Special Purpose Vehicle) formed for the express purpose of holding the pooled assets under certain terms. 39.The terms included the allocation of payments from one note to pay any deficiency in payment of another note in unrelated "loan transactions" contrary to the terms of each 6 such note which required payments to be allocated to the principal, interest, escrow and fees associated with only that specific"loan transaction." 40.Whether such "deficiency"was caused by the difference between the higher general terms of description of the note or the lower actual payment requirements from the "borrower" is not known, because Plaintiff failed to disclose any such information and continues to conceal all of the documents that make up the "loan transaction". 41.The pool assets, including the Plaintiff's subject "loan transaction" were pledged completely to the owners of the "asset-backed securities."All the certificates were then transferred to a Seller who in turn sold the certificates in varying denominations, each of which had slightly different terms depending upon which segment of the pool (tranche) secured the investment. 42. If there is a holder in due course of the Defendant's note arising from the subject "loan transaction" it is the investors who purchased said securities (certificates). 43.In order for this Plaintiff to maintain legal standing in connection with the subject loan transaction they are required to show the entire chain of title of the note and the entire chain of title of the mortgage. 44.The fact that the "loan"was table-funded without a disclosed source of funds and without disclosing thousands of dollars in fees all contrary to the requirements of state and federal law was withheld from Defendants by Wells Fargo and continues to be withheld by Plaintiff. But for the expenditure of time, money and effort on research, Defendants would not have discovered the various deceptions of the Wells Fargo at the alleged loan closing. 45.Defendants believe and therefore aver that the closing was an "alleged loan closing" because in fact it was part of an undisclosed hidden illegal scheme to issue unregulated securities (mortgage backed securities) based upon the negotiation of non-negotiable notes, the terms of which had been changed, altered, amended or modified AFTER the execution by the Defendants. 46.Wells Fargo then purported to "negotiate" the note by adding terms which allowed the proceeds of the note to be allocated to the payment of the notes of other borrowers and adding co-obligors as aforesaid through insurance, guarantees, additional collateralization and reserves all of which were undisclosed, as aforesaid. 7 47.The note was not negotiable because it was no longer an unconditional promise to pay by the original borrower. The terms had changed, adding conditions to payment that were inherent in the "securitization process" that Wells Fargo fraudulently promoted. 48.Said "negotiation" of Defendant's note was in actuality the theft of his identity to hide the vast number of"toxic waste" mortgages, notes and obligations that the enterprise Wells Fargo was selling up through their "securitization" chain. 49.The end result of the false and misleading representations and material omissions of Wells Fargo as to the true nature of the mortgage loan actually being processed, which said Wells Fargo had actual knowledge was in direct conflict with the original Uniform Residential Loan Application, early TIL, and Defendant's stated intentions and directions to said Wells Fargo at the time of original application for the loan, fraudulently caused Defendant to execute predatory loan documents. Wells Fargo continued the false and misleading representations and material omissions when they failed to respond to Defendants' rescission notice or take action necessary to terminate the security interest and return any money, including that which may have passed on to a third party. 50. At no time whatsoever did Wells Fargo ever advise Defendants (nor, as far as Defendants can determine, any "investor" in certificates of mortgage-backed securities) that: a. the mortgage loan being processed was not in their best interest; b. that based on Defendant's position and lack of financial sophistication, the loan being processed was unconscionable, improvident and costly, while providing them little economic benefit; C. that the mortgage loan was an inter-temporal transaction (transaction where terms, risks, or provisions at the commencement of the transaction differ at a later time) on which Defendants were providing cover for Wells Fargo's illegal activities; d. that the originating "lender", that being Wells Fargo and/or Fannie Mae, had no intention of retaining ownership interest in the mortgage loan or fully servicing same and in fact may have and probably had already pre-sold the loan, prior to closing, to a third party mortgage aggregator pursuant to previously executed documentation 8 (Assumption and assignment Agreement, Pooling Services Agreement, etc.) all executed prior to Defendants' "loan Closing." e. that the mortgage loan was actually intended to be repeatedly sold and assigned to multiple third parties, including one or more mortgage aggregators and investment bankers, for the ultimate purpose of bundling the Defendants' mortgage with hundreds or perhaps thousands of others as part of a companion, support, or other tranche in connection with the creation of a REMIC security known as a Collateralized Mortgage Obligation ("CMO"), also known as a "mortgage-backed security" to be sold by a securities firm (and which in fact ended up as collateral for Asset-Backed Securities Certificates, created the same year as the closing); f. that the mortgage instrument and Promissory Note may be sold, transferred, or assigned separately to separate third parties so that the later"holder" of the Promissory Note may not be in privity with or have the legal right to foreclose in the event of default; and g. that in connection with the multiple down line resale and assignment of the mortgage and Promissory Note that assignees or purchasers of the Note may make "pay-downs" against the Note which may effect the true amount owed by the Defendant on the Note. 51.As a result of the closing and in connection therewith, Wells Fargo placed the Defendants into a pool of a sub-prime mortgage programs, with Wells Fargo intentionally misleading Defendants and the other borrowers and engaging in material omissions by failing to disclose to Defendants and other borrowers the fact that the nature of the mortgage loan applications had been materially changed without Defendants' knowledge or consent. 52. Wells Fargo was under numerous legal obligations as fiduciaries and had the responsibility for overseeing the purported loan consummation to insure that the consummation was legal, proper, and that Defendants received all legally required disclosures pursuant to the Truth-In- Lending Act and RESPA both before and after the closing. 9 53.Defendants, not being in the consumer lending, mortgage broker, or residential loan business, reasonably relied upon Wells Fargo, to insure that the consumer credit transaction was legal, proper, and complied with all applicable laws and regulations. 54.Wells Fargo assigned or attempted to assign the Note and mortgage to parties who did not take these instruments in good faith or without notice that the instruments were invalid or that Defendants had timely exercised their right to cancel the mortgage. 55.On or before February 3, 2010, Defendants timely notified Wells Fargo that they were exercising the right to rescind the loan transaction. See Exhibit I" attached hereto. 56.Pursuant to the "Right of Rescission" provisions of the Truth and Lending Act ("TILA) including but not limited to, 15 U.S. C. § 1635 and rescission remedies of Regulation Z (Closed End Credit: § 226.23) Defendants rescinded the above referenced loan and have made demand for restitution, reformation and other equitable relief against the original lender referenced and any lender assignees (15 U.S.C. § 1641(c)). AFFIRMATIVE DEFENSES 57.Plaintiff has failed to state a claim upon which relief can be granted. Plaintiffs Complaint fails to state facts sufficient to constitute a cause of action against the Defendants for which relief can be granted. 58.Defendants timely elected to rescind the transaction with Wells Fargo, pursuant to their right of rescission, by sending the Notice to cancel to Plaintiff within three business days after closing on February 1, 2010. 59.When a consumer elects to rescind pursuant to the Truth-in-Lending Act, any security interest taken in connection with the transaction becomes void. 15 U.S.C. § 1635(b). 60.The mortgage that is the subject of this action was taken in connection with the transaction that Defendants have elected to rescind. 61.Since the mortgage is now void, this case is due to be dismissed. 62.Defendants invoke the Doctrine of Unclean Hands as the Defendants allege that the Plaintiff acted in a dishonest or fraudulent manner with respect to the dispute at issue in this case. 10 63.Defendant alleges that Plaintiffs Complaint and cause of action therein is barred by the Doctrine of Estoppel. 64.Plaintiff does not properly hold the mortgage it recorded and Plaintiff has failed to join the proper party with the rights of enforcement. Therefore, Plaintiff has failed to join indispensable parties. 65.Plaintiff is not the true owner of the claim sued upon, is not the real party in interest and is not shown to be authorized to bring this action. 66.Upon information and belief, the mortgage note has been paid in whole or in part by one or more undisclosed third party(ies) who, prior to or contemporaneously with the closing on the "loan", paid the originating lender (Wells Fargo) in exchange for certain unrecorded rights to the revenues arising out of the loan documents. 67.Upon information and.belief and in connection with the matters the subject of the paragraph immediately above, Plaintiff has no financial interest in the note or mortgage. 68.Upon information and belief, the original note was destroyed or was transferred to a structured investment vehicle, which also has no interest in the note or mortgage or revenue thereunder. 69.Upon information and belief, the revenue stream deriving from the note and mortgage was eviscerated upon one or more assignments of the note and mortgage to third parties and parsing of obligations as part of the securitization process, some of whom were joined as co-obligors and co-obligees in connection with the closing. 70.To the extent that Wells Fargo has been paid on the underlying obligation or has no legal interest therein or in the note or mortgage, or does not have lawful possession of the note or mortgage, Plaintiffs allegations of possession and capacity to institute this lawsuit constitute a fraud upon the court. 71.Based upon one or more of the affirmative defenses set forth herein, the rescinded note and mortgage are void and Defendants are entitled to a dismissal of the Plaintiffs claim with prejudice. 72.The Plaintiff comes to court with unclean hands and is prohibited by reason thereof from obtaining the equitable relief it seeks from this Court. 11 73.The Plaintiffs unclean hands result from the improvident and predatory lending, failure to disclose the material terms of the loan transaction and failure to comply with Defendant's Notice of Rescission requirements that applies to this loan, all as described herein above. 74.This court should refuse Plaintiffs request for relief because the mortgage was timely rescinded and, thus, void. WHEREFORE, Defendants respectfully requests that Plaintiffs claim be dismissed, and that judgment be entered in favor of Defendants with attorney's fees and costs, and that Defendants be awarded any other relief that this Honorable Court deems appropriate. COUNTERCLAIMS COUNT I: DECLARATORY AND INJUNCTIVE RELIEF 75.The Defendants reassert and allege, as their statement of facts, paragraphs 1 through 74 above as if set forth at length herein. 76.This is an action for declaratory and injunctive relief against the Plaintiff. 77.The Plaintiff has no right to pursue the claims it seeks because the Plaintiff received timely notice of Defendants election to cancel the mortgage. 78.Defendants are consumers within the meaning of the TILA. 15 U.S.C. § 1602(h). 79.Plaintiff is a creditor within the meaning of the TILA in that they regularly extend or offer to extend consumer credit. 15 U.S.C. § 1602(f). 80.The transaction between Plaintiff and Defendants is subject to a finance charge or is payable by a written agreement in more than four installment payments. 15 U.S.C. § 1602(f). 81.The credit extended to Defendants by Plaintiff is for personal, family, or household purposes. 15 U.S.C. § 1602(h). 82.As part of this consumer credit transaction, Plaintiff retained a security interest in 709 McCormick Road, Mechanicsburg, PA, which is Defendants' home. 83.The security interest was not created to finance the acquisition or initial construction of Defendants' home. 12 84.This consumer credit transaction was subject to Defendants' right of rescission. 15 U.S.C. § 1635 and Regulation Z § 226.23. 85.Any consumer"whose ownership interest is or will be subject to the security interest" has the right to rescind the transaction and to receive the disclosures". Reg. Z § 226.15(a)(1). 86.On February 3, 2010, Defendant Elizabeth M. Dorris rescinded the transaction by sending notice of rescission to Plaintiff. 87.More than 20 calendar days have passed since Wells Fargo received Defendants' notice of rescission. 88.Plaintiff has failed to take any action necessary or appropriate to reflect the termination of any security interest created by the transaction, as required by 15 U.S.C. § 1635(b) and Regulation Z § 226.23(d)(2). 89.Plaintiff has failed to return to Defendants any money or property given by the Defendants to anyone, including Wells Fargo, as required by 15 U.S.C. § 1635(b) and Regulation Z § 226.23(d)(2). 90.As a result of the above mentioned violations of the Truth in Lending Act and Regulation Z, Plaintiff is liable to Defendants for: a. Rescission of the transaction pursuant to 15 U.S.C. § 1635(b). b. Termination of any security interest in Defendants' property created by the transaction pursuant to 15 U.S.C. § 1635. c. Return of any money or property given by the Defendants to anyone, including Wells Fargo, in connection with this transaction, under 15 U.S.C. § 1635(b). e. Statutory damages of$2000 for Plaintiffs failure to respond properly to Defendants' rescission notice pursuant to 15 U.S.C. § 1640(a)(2)(A). f. Forfeiture of return of loan proceeds under 15 U.S.C. § 1635. g. Actual damages in an amount to be determined pursuant to 15 U.S.C. § 1640. h. Costs and a reasonable attorney fee in accordance with 15 U.S.C. § 1640. WHEREFORE, Defendants request the following relief: A. Declaratory and/or injunctive relief rescinding the mortgage on Defendants' home and declaring the mortgage void; 13 B. Order Plaintiff to take all action necessary to terminate any security interest in Defendants' property created under the transaction and that the Court declare all such security interests void, including but not limited to the mortgage related to the transaction of February 1, 2010; C. Order the return to the Defendants of any money or property given by the Defendants to anyone, including the Plaintiff, in connection with the transaction; D. Enjoin Plaintiff during the pendency of this action, and permanently thereafter, from instituting, prosecuting, or maintaining foreclosure proceedings on the Defendants' property, from recording any deeds or mortgages regarding the property or from otherwise taking any steps to deprive Defendants of ownership of that property; E. Award the Defendants statutory damages for Plaintiffs failure to respond properly to the Defendants' rescission notice, in the amount of twice the finance charge in connection with this transaction, but not less than $200 or more than $2,000 as provided under 15 U.S.C. § 1640(a); F. Order that, because the Plaintiff failed to respond to the Defendants' notice of rescission, the Defendants have no duty to tender, but in the alternative, if tender is required, determine the amount of the tender obligation in light of all of the Defendants' claims, and order the Plaintiff to accept tender on reasonable terms and over a reasonable period of time, provided Plaintiff establishes that it actually funded the account to pay off Defendants' previous mortgage loan; G. Award actual damages in an amount to be established at trial; H. Award the Defendants' costs and a reasonable attorney fee as provided under 15 U.S.C. § 1640(a); I. Award such other and further relief as the Court deems just and proper. COUNT II: COMPLAINT TO QUIET TITLE TO REAL PROPERTY 91.Paragraphs 1 through 74 above are incorporated herein as if set forth at length herein. 92.Defendant has sent or has caused to be sent a timely Notice of Rescission to Plaintiff, which the said Plaintiff has failed and refused to answer. 93.The real party in interest on the lender side may be the owner of the asset backed security issued by the SPV, the insurer through some claim of equitable interest, or the Federal government through the United States Department of the Treasury or the Federal Reserve. The security is a "securitized" bond deriving its value from the underlying mortgages of which the subject mortgage is one. Thus Defendants are entitled to quiet title against Wells Fargo, clearing title of the purported subject mortgage encumbrance. 14 94.Defendants are informed and believe and thereon allege that, at all times herein mentioned, the claim of Wells Fargo is without any right whatsoever, and said Wells Fargo has no legal or equitable right, claim, or interest in said property. 95.Defendants therefore seek a declaration that the title to the subject property is vested in Defendants alone and that Wells Fargo be declared to have no estate, right, title or interest in the subject property and that said Wells Fargo be forever enjoined from asserting any estate, right, title or interest in the subject property adverse to Defendants herein. WHEREFORE, in this Count, Defendants pray this Court will enter judgment against Plaintiff as follows: A. For an order compelling said Wells Fargo to transfer or release legal title and alleged encumbrances thereon and possession of the subject property to Defendants herein; B. For a declaration and determination that Defendants are the rightful holders of title to the property and that Wells Fargo be declared to have no estate, right, title or interest in said property; C. For a judgment forever enjoining said Wells Fargo from claiming any estate, right, title or interest in the subject property; D. For costs of suit herein incurred and statutory damages for failing to respond to Defendants' Notice of Rescission; E. For such other and further relief as the court may deem proper COUNT III: VIOLATIONS OF UNFAIR TRADE PRACTICE ACT 96.Paragraphs 1 through 74 above are incorporated herein as if set forth at length herein. 97.The actions of Plaintiff alleged hereinabove constitute a transaction, practice or course of business which operated as a fraud or deceit upon Defendants. 98.The acts, conduct or activity of Plaintiff described hereinabove constitute a violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 P.S. Section 201-2 et seq., ("Act") in that Plaintiff: failed to comply with the Defendant's rescission rights; failed to comply with express statements and assurances; failed to acknowledge and act promptly upon oral or written communication with respect to Defendants' dispute of the loan transaction; and failed to provide applicable mortgage servicing protocols. 99.Plaintiff's activities violated the Act in the following particulars: 15 a. The Plaintiff is claiming, attempting and threatening to enforce this consumer mortgage debt by a bogus action when the Plaintiff knows that it does not have standing and the right to pursue the action does not exist. b. Plaintiff does not have a legal right to pursue this action because Defendant rescinded the mortgage and the mortgage is void. c. Plaintiff has failed to respond to Defendant's Notice of Rescission or otherwise comply with the Pooling and Servicing or trust Agreement that controls and applies to the subject mortgage loan. d. Plaintiff is not the true current owner of the note because Plaintiff does not know the true holder in due course of the note after Wells Fargo sold it and, further, it is a fraud and violation of the Pennsylvania UDAP to falsely claim to be a lawful or nominee for the true holder in due course in order to collect a note for a party actually unknown to Plaintiff. e. Plaintiff took advantage of Defendants and wrongfully manipulated and controlled the mortgage financing unfairly to disadvantage Defendants, who were kept in the dark and deprived of a full and complete understanding of the mortgage credit transaction upon when they entered into, and, that Plaintiff had a duty to divulge the true nature of the mortgage financing transaction, including that the note would be sold to parties unknown and perhaps unascertainable and that Wells Fargo would profit from the origination of Defendant's note immediately upon Defendant's signing of the note which Wells Fargo originated. f. By creating a mortgage backed security or collateral backed obligation of the undisclosed sale, securitization, and transfer of Defendant's mortgage note and contractual obligation and without consent, or even disclosure or notice of the intent to securitize and bundle Defendant's identity in the creation of a securitized equity or collateral based obligation, effected a conversion by fraud of the identity and other intangible rights of Defendant in this transaction. g. Defendants allege that they made payments to Plaintiff in reliance on the aforesaid misrepresentations of fact concealing the status of their rescission, the actual sale or transfers of the legal and equitable interests in Defendant's note to another party, and were thereby injured, by suffering actual monetary losses. h. Plaintiff has engaged in unfair and deceptive trade practices with their sale or transfer of securities (mortgage notes) into securitized bundles, and also in connection with concealing the true nature of the transactions involved in mortgage note 'lending" or "origination" as defined under the U.C.C. and 16 thereby swindled these Defendants of many thousands of dollars above the actual value of the note issued and signed by Defendant. i. The securitization of Defendant's mortgage note intended for sale on public securities markets by Wells Fargo is a deceptive and misleading devise, scheme, and artifice to defraud Defendant. 100. By failing to act upon and process Defendants notice to cancel and by failing to fully and fairly disclose all material facts regarding Defendant's loan transaction, Plaintiff has engaged in unfair and deceptive acts or practices within the meaning of the Act, 73 P.S. Section 201-1 et seq. and Defendants are entitled to recover treble damages. 101. Plaintiff continues to claim, attempt, and threaten to enforce the loan transaction when the Plaintiff knows that such conduct is in bad faith and that Plaintiff in predatory lending, charged and collected money from defendants that they did not owe; withheld the true nature of the transaction and securitization of the loan, forced defendants into deepening indebtedness and then failed to meet the contractual and statutory conditions regarding Defendants' right to cancel before filing this action to foreclose against Defendants' home. 102. Asa result of the Plaintiff's actions and engagement in predatory lending and failure to properly rescind this mortgage loan instead of filing this action, Defendants have been damaged and Defendants seek to recover their actual and statutory damages from Plaintiff under 73 P.S. Section 201-1 et seq. WHEREFORE, Defendants demand the Plaintiff's complaint be dismissed with prejudice, for an award of TREBLE DAMAGES in defendant's favor and against the plaintiff for their actual or statutory damages whichever is greater and for their attorney's fees and costs and for all other relief to which this Court finds Defendant entitled pursuant to 73 P.S. Section 201-9.2. COUNT IV: BREACH OF CONTRACT 103. Paragraphs 1 through 74 above are incorporated herein as if set forth at length herein. 104. The conduct, practices and activities of Plaintiff described herein constitute a material breach of its implied duty to act in good faith and fair dealing and, further, 17 constitute a material breach of the representations, statements and undertakings set forth hereinabove, and made expressly or implicitly a part of said agreement for which breach Defendant is entitled to recover damages. 105. Plaintiff has breached its agreement and its duty to exercise good faith to Defendant's detriment. WHEREFORE, defendant requests judgment against Plaintiff in an amount not yet quantified but to be proven at trial and such other amounts to be proven at trial, and for costs and attorneys'fees; that the Court find that the transactions the subject of this action are illegal and are deemed void; that the action which was instituted be deemed and declared illegal and void and that further proceedings in connection with this action be enjoined; and for any other relief which is just and proper. COUNT V: FRAUDULENT MISREPRESENTATION 106. Paragraphs 1 through 74 above are incorporated herein as if set forth at length herein. 107. Wells Fargo knowingly and intentionally concealed material information from Defendants which is required by Federal Statutes and Regulations to be disclosed to the Defendant both before and at the closing. 108. Wells Fargo knowingly and intentionally concealed material information about Defendants' election to cancel the loan and the reason Wells Fargo did not act upon and process Defendants' timely notice to cancel the loan transaction. 109. Wells Fargo also materially misrepresented material information to the Defendants with full knowledge by Wells Fargo that their affirmative representations were false, fraudulent, and misrepresented the truth at the time said representations were made. 110. Under the circumstances, the material omissions and material misrepresentations of the Wells Fargo were malicious. 111. Defendants, not being an investment banker, securities dealer, mortgage lender, mortgage broker, or mortgage lender, reasonably relied upon the representations of Wells Fargo in agreeing to execute the mortgage loan documents. 18 112. Had Defendants known of the falsity of Wells Fargo's representations, they would not have entered into the transactions the subject of this action. 113. Wells Fargo's material omissions and material misrepresentations constitute fraud in the inducement and Wells Fargo and/or Plaintiff is liable to Defendant for the following, which Defendant demands as relief. WHEREFORE, defendant requests judgment against Plaintiff as follows: A. rescission of the mortgage loan transactions; B. termination of the mortgage and security interest in the property the subject of the mortgage loan documents created in the transaction; C. return of any money or property paid by the Defendant including all payments made in connection with the transactions; D. an amount of money equal to treble the finance charge in connection with the transactions; E. relinquishment of the right to retain any proceeds; and F. actual damages in an amount to be determined at trial, including attorneys' fees. DEMAND FOR JURY TRIAL Defendants demands trial by jury of all matters so triable as a matter of right. Date: /3 Respectfully submitted, sw� Step n K. Portko, Esquire #34538 101 South U.S. Route 15 Dillsburg, PA 17019 (717)432-9706 Attorneys for Defendants 19 Elizabeth M Dorris . 709 McCormick'Road Mechanicsburg,Pa 17055 Phone: 717-512-9700 Feb 2,2010 Wells Fargo Bank,N.A. 2001 Killebrew Drve Minnesapolis MN 55425 Attention:Karen Iblings Dear Karen: RE:Notice of Right to Cancell As per a conversation with Sharon Eliker we have decided to exercise are right to cancel the refinance as stated in the the Right to Cancel Notice that came with the documents. Please acknowledge as we found out we can receive a better loan and interest rate from the VA as my husband is a disabled Vet. Find enclosed the cancellation form. Thank for your co-operation in this matter. 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U.S.Postal Service Delivery Confirmation Receipt ° Postage and Delivery Confirmation fees must be paid before mailing. -a Ardele Sent Ta(to-be completed b M014 ......---------- - --- -- - --._.. -- —- -- — ---- ._ W S U1 CCs Ago^"'07 XArJP-1&flV of )j2krvNC- At o POSTAL CUSTOMER: ° Cq Keep this receipt.For Inquiries: z°Here Access internet®b site at tald and Elizabeth Dorris � a° y www.usps.com ¢'` I or call 1-800-222-1811 109 McCormick Road C3 C° N a a =CHMONE-tPll$I•ACtISt:ONLY)- ;Chanicsburg,PA 17055 0 0 0�� .QPriority mail service Feb. 7,2010 ° ❑First-Class Maif parcel 0 Package services parcel PS Foirn 152;Msy 2002 Wells Fargo Bank 2001 Killebrew Drive Minneapolis,MN. 55225 Att: Karen Iblings or Associates Dear Karen or Somebody: RE: LOAN RESCISION ON 709 McCORMICK ROAD MECHANICSBURG,PA On Feb 4,you received our right to rescind the loan we signed on Feb.1,2010. I checked to make sure the overnight from the USPS was delivered on their website. I had tried calling your office several times without results. So I am sending this priority letter confident this loan has been rescinded as we are attempting to get a VA loan as I explained with better terms and a lower rate. I was surprised at closing that so many things changed at closing and the monthly payment amount ended up being different than expected. Please we need verification that this loan has been rescinded before we proceed. Thank you, At.-AV, �G Elizabeth Dorris Elizabeth Dorris 709 McCormick Road Mechanicsburg, PA 17055 Phone: 717-512-9700 May 17th 2010 Karen Iblings 2001 Killebrew DR. Minneapolis,MN 55225 Att: Karen Iblings Dear Karen: RE: loan number 0207572967 and loan number 0265922443 Confusion still abounds as to why our loan number 0265922443 was not rescinded according to our written timely request. We had secured a VA loan at a better rate and terms and that is why I called and confirmed with you the required procedure to rescind this loan. We are still waiting on a response concerning this matter. Please inform us as to the status of these loans.ASAP. Sincerely Elizabeth Dorris U.S.Postal:Senrice Defivery CcnormationIteceipt Postage and Delivery Confirmation fees must be paid before mailing. tr Aettcie SerdTor(to'be completed by rnailm) mac© r` n PEAL CUSTOMER: 0 1 C3 Lis Keep this receipt For lnquides: v a Access intemet web site at or call 1.800-222-1811 C3 WWW.LISPS.COM 'u CHECK rOSraI.USE ONLY) Priority Mairservice m []First-OassMairparml 0 ❑Package Setvim parcel PS Form 152,May 2002 (see Reverse) Elizabeth Dorris 709 McCormick Road Mechanicsburg, Pa 17055 -Phone: 717-512-9700 June 10, 2010 Wells Fargo Bank,NA 2001 Killebrew Dr Minneapolis, MN 55425 Attention: Karen Iblings Dear Karen: RE: Mortgage Right to Cancel Find enclosed letter dated Feb. 2,2010 as well as a letter I am sending today to Mariana Oganesyan requesting the original note payoff for loan number 0207572967. 1 had sent in the right to cancel notice no later than February 4, 2010 as requested and discovered the new loan had gone through. I want to know if this is just the same loan and you just changed the loan number or did you in fact not cancel the loan and this is a new loan. I am quite confused. Because I did not receive the original note back as I requested and was promised I would receive from your satisfaction department. The same thing occurred when we had a loan with Washington Mutual and my brother lend us the money to pay it off. I never received the satisfaction note and it was a problem. I had been told by a conversation I had with a Sharon Eliker, the one who originated the second loan, that the loan would be rescinded and we still have the same loan. So we are paying a loan which shows a lower rate the loan number is different and I am assuming the 2nd loan was never rescinded. If so I am requesting from you as well the original promissory note back on the V loan_ My brother gave me both the mortgage and original paid off note on the loan I had with him when I paid him off. What is the deal with Wells Fargo? Can't they do the same? Sincerely, _ u.S. Postal Service'Delivery Confirmation" Receipt Elizabeth Dorris o Postage and Delivery confirmation fees must be paid before mailing. .n Article Sent To:(to be completed by mailer) Ir .'� (auuf ,r jlo- f v f' # .F �rj,t`a POSTAL CUSTOMER: CC°o Keep this receipt.For Inquiries: zo a 'Postmark Access intemet web site at Here www.usps.com or call 1-800-222-1811 o ru CHEEK ONE(POSTAL USE ONLY) Q ❑Priority Mail Service M ❑First-Class Malrparcel M OPackage Services parcel PS Forth 152,May 2002 (see Reverse) 64 61+ Lf VERIFICATION 1, Elizabeth Dorris, hereby acknowledge that I am a Defendant in the foregoing pleading, that I have read the foregoing, and the facts stated therein are true and correct to the best of my knowledge, information and belief. I understand that any false statements herein are made subject to penalties of 18 Pa.C.S. Section 4904, relating to unsworn falsification to authorities. DATE: Elizabet orris 1 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing Answer with New Matter and Counterclaims was provided by U.S. Mail, postage prepaid, first class, to the following: John Michael Kolesnik, Esquire PHELAN HALLINAN, LLP 1617 JFK Boulevard, Suite 1400 One Penn Center Plaza Philadelphia, PA 19103 Date: g ZZ l� BY: Stephen K. Portko IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA WELLS FARGO BANK, N.A., Plaintiff CIVIL DIVISION V. : NO. 13-2237 Civil DONALD D. DORRIS, JR. ° A/K/A DONALD D. DORRIS and ELIZABETH M. DORRIS, Defendants r r pT' CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing Defendant's First Set of Interrogatories Addressed To Plaintiff was furnished by U.S. Mail,first class,postage prepaid on the date set forth below,to: John Michael Kolesnik, Esquire PHELAN HALLINAN, LLP 1617 JFK Boulevard, Suite 1400 One Penn Center Plaza Philadelphia, PA 19103 Attorneys for Plaintiff Dated: (3 ' Stephen K. Portko, Esq. Attorney for Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA WELLS FARGO BANK, N.A., : CIVIL DIVISION Plaintiff : NO. 13-2237 Civil V. DONALD D. DORRIS, JR. A/K/A DONALD D. DORRIS and ELIZABETH M. DORRIS, Defendants ENTRY OF APPEARANCE ; 7-11:7'.:4-, :.• '1./'1,!! A To the Prothonotary: Kindly enter the appearance of Craig A. Hirneisen, Esquire and the law firm of Stevens & Lee, P.C. as co -counsel for Plaintiff, Wells Fargo Bank, N.A., in the above captioned case. Dated: November 7, 2014 STEVENS & LEE By: SL1 1333147v1 104945.00426 Craig A. Hideisen Attorney I.D. No. 209108 111 N. Sixth Street P.O. Box 679 Reading, PA 19603-0679 (610) 478-2229 Co -counsel for Plaintiff Wells Fargo Bank, N.A. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA WELLS FARGO BANK, N.A., : CIVIL DIVISION Plaintiff : NO. 13-2237 Civil v. DONALD D. DORRIS, JR. A/K/A DONALD D. DORRIS and ELIZABETH M. DORRIS, Defendants CERTIFICATE OF SERVICE I, CRAIG A. HIRNEISEN, ESQUIRE, certify that on this date, I served a true and correct copy of the foregoing Entry of Appearance upon the following counsel of record by depositing the same in the United States mail, postage prepaid, addressed as follows: Stephen K. Portko, Esq. Bratic & Portko 101 South U.S. Route 15 Dillsburg, PA 17019 John Michael Kolesnik, Esq. Phelan Hallinan, LLP 1617 JFK Blvd., Suite 1400 One Penn Center Plaza Philadelphia, PA 19103 Craig eisen Date: November 7, 2014 SL1 1333147v1 104945.00426 Craig A. Hirneisen, Esquire Attorney I.D. No. 209108 Stevens & Lee 111 North Sixth Street P.O. Box 679 Reading, Pennsylvania 19603 E-mail: cah@stevenslee.com Telephone: (610) 478-2229 Facsimile: (610) 371-1220 Co -counsel for Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA WELLS FARGO BANK, N.A., : CIVIL DIVISION Plaintiff : NO. 13-2237 Civil v. DONALD D. DORRIS, JR. A/K/A DONALD D. DORRIS and ELIZABETH M. DORRIS, Defendants PLAINTIFF'S PRELIMINARY OBJECTIONS TO DEFENDANTS' NEW MATTER AND COUNTERCLAIM Plaintiff Wells Fargo Bank, N.A. ("Wells Fargo"), hereby files the following preliminary objections to the New Matter and Counterclaims filed by defendants Donald D. Dorris, Jr. a/ka/a Donald D. Dorris and Elizabeth M. Dorris (the "Defendants") on August 22, 2013 pursuant to Pa. R. Civ. P. 1028. I. PROCEDURAL HISTORY OF THE CASE 1. This action is an in rem mortgage foreclosure action that was initiated by Wells Fargo on April 24, 2013, by the filing of a complaint against the Defendants (the "Complaint"). 2. A true and correct copy of the Complaint is attached hereto as Exhibit "A." 1 SL1 1327448v1 104945.00426 3. On August 22, 2013, the Defendants filed their Answer to Wells Fargo's Complaint (the "Answer") with New Matter (the "New Matter") and Counterclaims (the "Counterclaims"). 4. A true and correct copy of the Defendants' Answer with New Matter and Counterclaims is attached hereto as Exhibit "B." 5. Wells Fargo now timely' files these Preliminary Objections to the Defendants' New Matter and Counterclaims.2 II. FACTUAL BACKGROUND 6. The Defendants allege in their New Matter that beginning in December of 2009 they decided to refinance their mortgage debt with Wells Fargo. [New Matter, ¶¶ 12-23]. 7. Accordingly, on February 1, 2010, Wells Fargo loaned to defendant Donald D. Dorris, Jr. a/ka/a Donald D. Dorris ("Mr. Dorris") the principal sum of $367,800.00 (the "Loan"). [See Note, attached to the Complaint as Exhibit "A", at page 1]. 8. To evidence his obligation to repay the Loan, Mr. Dorris executed and delivered to Wells Fargo his promissory note dated February 1, 2010, in the principal amount of $367,800.00, plus interest as set forth therein (the "Note"). 9. A true and correct copy of the Note is attached to the Complaint as Exhibit 2 Defendants' counsel granted Wells Fargo's co -counsel an extension of time until November 10, 2014 to file Preliminary Objections to the New Matter and Counterclaims. Between August 22, 2013 and November 10, 2014, the parties were attempting to resolve this case. Those efforts were not successful. Wells Fargo's Preliminary Objections to the New Matter and Counterclaims are proper because Pa. R. Civ. P. 1028(a) provides that "preliminary objections may be filed by any party to any pleading." Donegal Mut. Ins. Co. v. Stroker, 15 Pa. D. & C. 5th 245, 247 (Pa. Com. Pl. 2010) (sustaining plaintiff's preliminary objections to defendants' new matter and counterclaim). 2 SL1 1327448v1 104945.00426 10. To secure payment of Mr. Dorris's obligations under the Note, on February 1, 2010, the Defendants made, executed, and delivered a mortgage (the "Mortgage") to Wells Fargo, its successors and assigns. [Complaint, ¶ 4]. 11. A true and correct copy of the recorded Mortgage is attached hereto as Exhibit "C." 3 12. The Mortgage was recorded on February 9, 2010 in the Office of the Recorder of Deeds of Cumberland County at Instrument Number 2010003523. [Complaint, ¶ 4; Exhibit "C" hereto]. 13. Pursuant to the Mortgage, the Defendants granted to Wells Fargo, its successors and assigns, a lien and security interest in real property owned by the Defendants situate at 709 McCormick Road, Mechanicsburg, Cumberland County, Pennsylvania 17055 (the "Property"). [Complaint, ¶ 4 & Ex. D]. 14. Mr. Dorris defaulted on his obligations under the Note, and the Defendants defaulted on their obligations under the Mortgage, because Mr. Dorris failed to make all of the required monthly payments when due under the Note, which resulted in the institution of this in rem mortgage foreclosure action. [Complaint, ¶¶ 7-8]. 15. In their New Matter, the Defendants assert that after the closing with respect to the Loan, they decided that the terms were not suitable or affordable and that they were offered better terms with a VA loan. [New Matter, ¶ 24]. The Court can take judicial notice of the Mortgage, a public record, in ruling on Wells Fargo's Preliminary Objections. See Solomon v. U.S. Healthcare Sys. of Pa., Inc., 797 A.2d 346, 352 (Pa. Super. Ct. 2002) (a court may take judicial notice of public documents in ruling on a preliminary objection in the nature of a demurrer); Bykowski v. Chesed Co., 625 A.2d 1256, 1258 n.1 (Pa. Super. Ct. 1993) (finding that when considering a demurrer, the Court may consider information contained in the County Recorder of Deeds Office, because the Court has the right to take judicial notice of public documents). 3 SL1 1327448v1 104945.00426 16. The Defendants allege that by letter dated February 2, 2010 and purportedly sent to Wells Fargo on February 3, 2010, they attempted to communicate with Wells Fargo in writing "their Notice to cancel the loan." [New Matter, ¶¶ 25, 55 and Exhibit 1 thereto]. 17. At the closing on February 1, 2010, the Defendants each received and acknowledged receipt of a Notice of Right to Cancel (the "Notices of Right to Cancel"). 18. The Notices of Right to Cancel are attached hereto collectively as Exhibit "D„4 19. The Notices of Right to Cancel advised the Defendants that they needed to notify Wells Fargo in writing at 2001 Killebrew Drive, Minneapolis, MN 55425 if they wished to rescind the Loan and they needed to do so within 3 days of the closing on February 1, 2010. [See Exhibit "D” (emphasis added)]. 20. The purported rescission notice dated February 2, 2010 attached to the Answer, New Matter, and Counterclaims as part of Exhibit 1 was allegedly sent to Wells Fargo at 2001 Killebrew Drive, Minneapolis, MN 55225, as indicated by the Express Mail receipt included as part of Exhibit 1. 21. The Defendants do not allege when Wells Fargo allegedly received this improperly addressed rescission notice dated February 2, 2010 that is attached to the Answer, New Matter, and Counterclaims as part of Exhibit 1. 22. The Defendants do not allege that they sent (or that Wells Fargo received) 4 Although the Notices of Right to Cancel were not attached to the Answer, New Matter and Counterclaims, they are referenced therein and therefore can be attached to Wells Fargo's preliminary objections for the Court's consideration. See Regal Indus. Corp. v. Crum & Forster, Inc., 890 A.2d 395, 398-99 (Pa. Super. Ct. 2005) (holding that documents referenced in a complaint could be attached to preliminary objections in the nature of a demurrer and considered by the Court). For example, Exhibit 1 to the Answer, New Matter, and Counterclaims references "the Right to Cancel Notice that came with the [Loan] documents" and purportedly "enclosed the cancellation form." 4 SL1 1327448v1 104945.00426 any other rescission notices within 3 days of the closing on February 1, 2010 (i.e., by February 4, 2010). [See generally New Matter and Counterclaims]. 23. The Defendants also allege in their New Matter that even though Wells Fargo is identified as the Lender on the Note and the Mortgage and is the current mortgagee of record, that "Wells Fargo was neither the source of funding nor the `Lender' and that the Loan was securitized. [New Matter, ¶¶ 34-51]. 24. In their New Matter, the Defendants also assert numerous "Affirmative Defenses" based on their assertions that they attempted to rescind the loan and that Wells Fargo does not have standing to foreclose on the Mortgage. [New Matter, ¶¶ 57-74]. 25. In the New Matter, the Defendants seek "attorney's fees and costs." [New Matter, wherefore clause]. 26. In their Counterclaims, the Defendants assert claims for "Declaratory and Injunctive Relief' (Count I), a claim to quiet title (Count II), violations of the Pennsylvania Unfair Trade Practices and Consumer Protection Law ("UPTPCL") (Count III), breach of contract (Count IV), and fraudulent misrepresentation (Count V) based on the Defendants' allegations that they timely rescinded the Loan and that Wells Fargo improperly securitized the Loan. 27. In the Counterclaims, the Defendants seek, inter alia, "statutory damages," "actual damages," "costs and a reasonable attorney fee," "treble damages," "return of any money paid by the Defendant[s]," and "an amount of money equal to treble the finance charge in connection with the transaction." [Counterclaims, wherefore clauses]. 5 SL1 1327448v1 104945.00426 III. LEGAL INSUFFICIENCY — COUNTERCLAIMS AND REQUESTS FOR IN PERSONAM DAMAGES 28. Wells Fargo incorporates by reference all preceding paragraphs herein. 29. Rule 1028(a)(4) permits the filing of preliminary objections when the pleading is legally deficient and fails to set forth a cause of action or defense for which relief can be granted. 30. In ruling on preliminary objections in the nature of a demurrer, the court should consider as true "all of the well pleaded material facts set forth in [preceding pleading] and all reasonable inferences that may be drawn from those facts." Bower v. Bower, 611 A.2d 181, 182 (Pa. 1992); Pa. R. Civ. P. 1028(a)(4). 31. The court should not, however, accept as true any argumentative allegations or expressions of opinion, Gaster v. Twp. of Nether Providence, 556 A.2d 947, 948-49 (Pa. Commw Ct. 1989), nor should it accept as true any conclusions of law. Gekas v. Shapp, 364 A.2d 691, 693 (Pa. 1976). 32. A demurrer should be granted if the defendant's allegations fail to state claims upon which relief should be granted. Id. A. The Counterclaims Must Be Dismissed Because the Defendants Fail to State Any Claims Upon Which Relief Can Be Granted. 1. The Counterclaims Must Be Dismissed Because The Defendants Have Not Alleged That Wells Fargo Received a Properly Addressed Notice of Rescission By February 4, 2010. 33. At the heart of Defendants' Counterclaims is their assertion that they timely rescinded the Loan pursuant to TILA. 34. Defendants assert that on February 3, 2010, Ms. Dorris rescinded the Loan by sending a notice of rescission to Wells Fargo. [Counterclaims, ¶ 86]. 6 SL1 1327448v1 104945.00426 35. While the Defendants aver that "more than 20 calendar days have passed since Wells Fargo received Defendants' notice of rescission" [Counterclaims, ¶ 87], the Defendants do not identify when Wells Fargo purportedly received the notice of rescission. 36. As discussed above, at the closing with respectto the Loan on February 1, 2010, the Defendants each received and acknowledged receipt of the Notices of Right to Cancel, attached hereto collectively as Exhibit "D." 5 37. These Notices of Right to Cancel advised the Defendants that they needed to notify Wells Fargo in writing at 2001 Killebrew Drive, Minneapolis, MN 55425 if they wished to rescind the Loan and they needed to do so within 3 days of the closing on February 1, 2010. [See Exhibit "D" (emphasis added)]. 38. However, the purported rescission notice dated February 2, 2010, that is attached to the Answer, New Matter, and Counterclaims as part of Exhibit 1 and referenced in the Counterclaims, was allegedly sent to Wells Fargo at 2001 Killebrew Drive, Minneapolis, MN 55225, as indicated by the Express Mail receipt included as part of Exhibit 1. 39. The Defendants do not allege when (or if) Wells Fargo allegedly received this improperly addressed rescission notice. 40. The Defendants also do not allege that they sent (or that Wells Fargo received) any other rescission notices within 3 days of the closing on February 1, 2010 (by February 4, 2010). [See generally New Matter and Counterclaims]. 41. Accordingly, the Defendants' Counterclaims—which are premised on Defendants' assertion that they timely rescinded the Loan pursuant to TILA—must be dismissed because the Defendants have not alleged that they sent a valid rescission notice to the address 5 See note 4, supra. 7 SL 1 1327448v1 104945.00426 specified on the Notices of Right to Cancel by February 4, 2010 (or that Wells Fargo received any such timely notice). See 12 C.F.R. § 226.23(a)(3) (a consumer may only exercise the right to rescind under TILA until midnight of the third business day following consummation of the loan); In re Porter, 961 F.2d 1066, 1073 (3d Cir. 1992) ("Under the statute and regulations, if the lender's notice is proper, the borrower's right to rescind lasts for three days"); see also Smith v. Jenkins, 777 F. Supp. 2d 264, 267-68 (D. Mass. 2011) (holding that the "mailbox rule" does not apply when a letter is not received by the intended recipient) (citing Univ. Emergency Med. Found. v. Rapier Invs., Ltd., 197 F.3d 18, 23 (1st Cir. 1999); Lightfoot v. United States, 564 F.3d 625, 628 (3d Cir. 2009) (noting the "almost uniform[]" rule that "[m]ailing is not presenting; there must be receipt ....") (citation omitted). 2. To the Extent the Defendants Purport to State an Affirmative Claim for Damages Under TILA, It Must Be Dismissed Because a Claim Under the TILA Cannot Be Raised in a Mortgage Foreclosure Action. 42. To the extent the Defendants assert counterclaims for affirmative monetary relief under TILA in their Counterclaims, such as their request for "statutory damages" and "actual damages" in Paragraph 90 of the Counterclaims and the wherefore clause with respect to Count I of the Counterclaims, these claims should be dismissed because such a claim cannot be raised in a mortgage foreclosure action. 43. The provisions of TILA make clear that a person may assert a claim under TILA only in an action for a money judgment either as a counterclaim to an action or to collect money owed by the consumer, or in an original claim brought by the consumer. 15 U.S.C.A. § 1640(h). 44. In contrast, an action in mortgage foreclosure is strictly an in rem proceeding, and the purpose of a mortgage foreclosure is solely to effect a judicial sale of the mortgaged SL1 1327448v1 104945.00426 property. Green Tree Consumer Discount Co. v. Newton, 909 A.2d 811 (Pa. Super. Ct. 2006). Further, a judgment in a mortgage foreclosure action is not a judgment for money damages and therefore cannot be an "action to collect amounts owed" or "an action to collect the debt," as required under the TILA for a counterclaim. Id. at 815. 45. Because this action is for in rem foreclosure of the mortgage only and Wells Fargo does not seek a money judgment against the Defendants, a TILA claim cannot be asserted here as a counterclaim for affirmative monetary relief. Id. at 814; see also Kondour Capital Corp. v. Williams, No. 0235, 2011 WL 4352214 (Pa. Com. Pl. Sept. 1, 2011) (following Green Tree and holding that it is impermissible to assert a claim for monetary damages in a mortgage foreclosure action); Wells Fargo Bank v. Cruz, No. 2844, 2010 WL 752354 (Pa. Com. Pl. Feb. 3, 2010) (same). 3. The Defendants' "Complaint to Quiet Title" (Counterclaims Count II) Must Be Dismissed For Failure to State a Claim. 46. In Count II, the Defendants assert a "Complaint to Quiet Title to Real Property" based on (1) their assertion that a timely notice of rescission was sent to Wells Fargo and (2) their assertion that "[t]he real party in interest on the lender side may be the owner of the asset backed security issued by the SBV, the insurer through some claim of equitable interest, or the Federal government through the United States Department of the Treasury or the Federal Reserve. The Security is a `securitized' bond deriving its value from the underlying mortgages of which the subject mortgage is one. Thus Defendants are entitled to quiet title against Wells Fargo, clearing title of the purported subject mortgage encumbrance." [Counterclaims, ¶¶ 92-93 (emphasis added)]. 47. Based on these assertions, the Defendants seek a declaration that Wells Fargo has no interest in the Property. [Counterclaims, ¶¶ 94-95]. 9 SL 1 1327448v1 104945.00426 48. The Defendants' claim based on their contention that a timely notice of rescission was sent to Wells Fargo must be rejected for the reasons discussed in Section III.A.1., supra. 49. As to the Defendants' assertion that "[t]he real party in interest on the lender side may be the owner of the asset backed security...." [Counterclaims, ¶ 93 (emphasis added)], the Defendants do not dispute that they executed and delivered the Mortgage to Wells Fargo (plaintiff herein), the originating Lender. [Complaint and Answer, ¶ 4]. 50. In the Mortgage, the Defendants specifically granted Wells Fargo a security interest in the Property (the Mortgage). As Wells Fargo, in its own capacity, is the plaintiff in this foreclosure action, the Defendants' bald assertion that the "real party in interest ... may be the owner of the asset backed security...." is insufficient to void the very Mortgage that the Defendants granted to Wells Fargo. A duly recorded mortgage (such as the Mortgage) is presumed valid and Defendants cannot allege otherwise based upon the facts in the record. See Pitti v. Pocono Bus. Furniture, Inc., 859 A.2d 523, 525 n.3 (Pa. Commw. Ct. 2004) ("[i]n Pennsylvania a mortgage duly executed will be presumed to be valid until the contrary is shown, and the burden is on the party attacking the mortgage to prove its invalidity"); Saafield v. Manrow, 30 A. 823, 824 (Pa. 1895) (a party attacking the validity of a mortgage has the burden of proving its invalidity). 51. In addition, the recorded Mortgage was granted to Wells Fargo as mortgagee, and a mortgagee has standing to foreclose on a mortgage. See Wells Fargo Bank v. Lupori, 8 A.3d 919, 922 n.3 (Pa. Super. Ct. 2010) (the mortgagee is a real party in interest in a foreclosure action) (citing U.S. Bank, N.A. v. Mallory, 982 A.2d 986, 994 (Pa. Super. Ct. 2009)). 10 SL 1 1327448v1 104945.00426 52. The Defendants do not allege that the Mortgage was ever assigned to any other person. 53. Therefore, the Defendants' "Complaint to Quiet Title" (Counterclaims Count II) must be dismissed because the Defendants have failed to state a cause of action to quiet title. 4. The Defendants' UTPCPL Counterclaim (Count III) Must Be Dismissed For Failure to State a Claim. 54. The Defendants' UTPCPL claim (Count III) should be dismissed because the Defendants fail to allege justifiable reliance on any supposed misrepresentation or wrongful conduct by Wells Fargo. 55. Private actions under the UTPCPL are governed by 73 P.S. § 201-9.2, which provides: (a) Any person who purchases or leases goods or services primarily for personal, family or household purposes and thereby suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment by any person of a method, act or practice declared unlawful by section 3 of this act, may bring a private action, to recover actual damages or one hundred dollars ($100), whichever is greater...." (emphasis added). 56. In Yocca v. Pittsburgh Steelers Sports, Inc., 854 A.2d 425, 438 (Pa. 2004), the Pennsylvania Supreme Court unequivocally held that "[t]o bring a private cause of action under the UTPCPL, a plaintiff must show that he justifiably relied on the defendant's wrongful conduct or representation and that he suffered harm as a result of that reliance." 854 A.2d at 438 (citing Weinberg v. Sun Co., 777 A.2d 442, 446 (Pa. 2001) (emphasis added)). 57. In Weinberg, 777 A.2d at 446, the Supreme Court found that "[n]othing in the legislative history [of the UTPCPL] suggests that the legislature ever intended statutory language directed against consumer fraud to do away with the traditional common law elements of reliance and causation .... The statute clearly requires, in a private action, that a plaintiff 11 SL1 1327448v1 104945.00426 suffer an ascertainable loss as a result of the defendant's prohibited action. That means, in this case, a plaintiff must allege reliance ...." 777 A.2d at 446 (emphasis added). 58. Here, the Defendants do not allege any justifiable reliance on any supposed conduct or representation(s) engaged in by Wells Fargo. Therefore, their UTPCPL claim (Counterclaims Count III) must be dismissed. 59. The Defendants' UTPCPL claim --based on assertions regarding the rescission notice and alleged "securitization" practices—should also be dismissed for the reasons discussed above. 60. As explained above, the Defendants have not plausibly alleged with specificity that Wells Fargo received a properly addressed rescission notice by February 4, 2010 and have only offered boilerplate assertions in support of their claim that because of a "securitization," Wells Fargo "is not the true current owner [and holder] of the Note" (and there is no question that Wells Fargo has at all times been and remains the mortgagee of record with respect to the Mortgage). 61. The Defendants also do not specify what "material facts regarding [the] [L]oan transaction" were not "fully and fairly disclose[d] by Wells Fargo." [Counterclaims, ¶ 100]. Likewise, the Defendants do not specify how "Plaintiff in predatory lending, charged and collected money from defendants that they did not owe." [Counterclaims, ¶ 101]. Accordingly, the Defendants' UTPCPL claim should be dismissed with prejudice. 5. The Defendants' Breach of Contract Counterclaim (Count IV) Must Be Dismissed For Failure to State a Claim. 62. The Defendants also fail to state a breach of contract claim (Counterclaims Count IV) against Wells Fargo. 12 SL1 1327448v1 104945.00426 63. To state a breach of contract claim, a party must allege (1) the existence of a contract; (2) a breach of a duty imposed by the contract; and (3) damages. Braun v. Wal-Mart Stores, Inc., 24 A.3d 875, 896 (Pa. Super. Ct. 2011). 64. Here, the Defendants do not allege any specific duty imposed by a contract (such as the Note or Mortgage) supposedly violated by Wells Fargo. The Defendants also do not specify when Wells Fargo breached a duty imposed by the Mortgage or Note (or other contract). 65. Therefore, the Defendants have failed to state a breach of contract claim. See Harker v. Juniata College, No. 88-0206, 1989 WL 297959, at *4 (Pa. Corn. Pl. Oct. 17, 1989) (sustaining preliminary objections in the nature of a demurrer to breach of contract claim which only made conclusory allegations); Scocca v. Cendant Mortgage Corp., No. Civ. A. 04-704, 2004 WL 2536837, at *1-2 (E.D. Pa. Nov. 9, 2004) (dismissing breach of contract claims because plaintiff failed to identify a specific duty imposed by the mortgage that the defendant allegedly breached). 66. The Defendants also fail to allege any damages that they have suffered as a result of Wells Fargo's supposed breach of contract. See Solarz v. DaimlerChrysler Corporation, No. 2033 April Term 2001, Control 112087, 2002 WL 452218, at *6 (Pa. Corn. Pl. Mar. 13, 2002) (sustaining preliminary objections and dismissing breach of contract claims because plaintiffs did not allege that they suffered damages resulting from the alleged breach of contract). 67. Finally, as to the Defendants' assertion that Wells Fargo "breach[ed] its implied duty to act in good faith and fair dealing" [Counterclaims, ¶ 104], Pennsylvania law does not recognize an independent cause of action for breach of a covenant or duty of good faith and fair dealing separate from a breach of contract claim (and, as explained above, the Defendants do not state a claim for breach of contract). See CRS Auto Parts, Inc. v. Nat'l Grange Mut. Ins. Co., 13 SL1 1327448v1 104945.00426 645 F. Supp. 2d 354, 369 (E.D. Pa. 2009) ("Notably, a claim for breach of a covenant of good faith and fair dealing may not be maintained as an independent cause of action separate from the breach of contract claim.") (citing LSI Title Agency, infra, 951 A.2d at 391); McHale v. NuEnergy Group, No. Civ.A. 01-4111, 2002 WL 321797, at *8 (E.D. Pa. Feb. 27, 2002) ("A breach of such covenant is a breach of contract action, not an independent action for breach of a duty of good faith and fair dealing."); LSI Title Agency, Inc. v. Evaluation Servs., Inc., 951 A.2d 384, 391-92 (Pa. Super. Ct. 2008) (citing cases holding that Pennsylvania does not recognize a breach of contractual duty of good faith and fair dealing claim separate from a breach of contract claim), JHE, Inc. v. SEPTA, No. 1790 NOV. TERM 2001, 2002 WL 1018941, at *5 (Pa. Corn. Pl. May 17, 2002) (holding that "the implied covenant of good faith does not allow for a claim separate and distinct from a breach of contract claim. Rather, a claim arising from a breach of the covenant of good faith must be prosecuted as a breach of contract claim, as the covenant does nothing more than imply certain obligations into the contract itself.") (emphasis in original). 68. Therefore, the Defendants' breach of contract claim (Counterclaims Count IV) must be dismissed with prejudice. 6. The Defendants' Fraudulent Misrepresentation Counterclaim (Count V) Must Be Dismissed For Failure to State a Claim. 69. The Defendants have also failed to state a claim for fraudulent misrepresentation and Count V of the Counterclaims should be dismissed with prejudice. 70. To state a claim for fraudulent misrepresentation, a party must allege (i) a representation; (ii) which is material to the transaction at hand; (iii) made falsely, with knowledge of its falsity or recklessness as to whether it is true or false; (iv) with the intent of misleading another into relying on it; (v) justifiable reliance on the misrepresentation; and (vi) 14 SL1 1327448v1 104945.00426 resulting injury. E.g., Commonwealth of Pennsylvania v. Rockwood Area School District, 907 A.2d 1157, 1170 (Pa. Commw. Ct.. 2006) (citations omitted). 71. Similar to their UTPCPL claim (Count IV), the Defendants have failed to allege justifiable reliance on any supposed misrepresentation or wrongful conduct by Wells Fargo. 72. Further, the Defendants do not specify what specific "material information" was supposedly "knowingly and intentionally concealed," nor do they specify what "material information" was allegedly "materially misrepresented." [Counterclaims, 1- 107-110]. 73. Therefore, the Defendants' fraudulent misrepresentation claim must be dismissed. B. The Counterclaims Should Be Dismissed Pursuant to Pa. R. Civ. P. 1148 To the Extent the Defendants Seek to Assert Claims That Are Not Part of or Incidental to the Creation of the Mortgage. 74. To the extent the Defendants seek to assert claims that are not part of or incidental to the creation of the mortgage, the Counterclaims should be dismissed pursuant to Pa. R. Civ. P. 1148, which limits the types of counterclaims that can be raised in a mortgage foreclosure action. 75. Rule 1148 provides that, "[a] defendant may plead a counterclaim which arises from the same transaction or occurrence or series of transactions or occurrences from which the plaintiff's cause of action arose." Pa. R. Civ. P. 1148. As such, a counterclaim that does not arise out of the same transaction or occurrence as the plaintiffs cause of action is not a proper counterclaim and must be stricken. Chrysler First Bus. Credit Corp. v. Gourniak, 601 A.2d 338, 341 (Pa. Super. Ct. 1992) (holding that Pa. R. Civ. P. 1148 "restricts every 15 SL 1 132 7448v 1 104945.00426 defendant to claims which arise from the same transaction or occurrence or series of transactions or occurrences from which the plaintiffs cause of action arose ...."). 76. This principle was recently reaffirmed by the Superior Court in Rearick v. Elderton State Bank, --- A.3d ---, 2014 PA Super 157, 2014 WL 3795152 (Pa. Super. Ct. July 23, 2014). In Rearick, the Superior Court held that "... in Pennsylvania, the scope of a foreclosure action is limited to the subject to the foreclosure, i.e., disposition of the property subject to any affirmative defenses to foreclosure or counterclaims arising from the execution of the instrument(s) memorializing the debt and the security interest in the mortgaged property." 2014 WL 3795152, at *7 (emphasis added). 77. Consistent with the holding in Rearick, other Pennsylvania courts have consistently interpreted Rule 1148 as only permitting counterclaims that are part of or incidental to the creation of the mortgage itself Gourniak, 601 A.2d at 341 (mortgagors' allegations of fraudulent misrepresentation and unjust enrichment in mortgage foreclosure action were not part of or incident to the creation of the mortgage, and, thus, could not be asserted against mortgagee); Cunningham v. McWilliams, 714 A.2d 1054, 1057 (Pa. Super. Ct. 1998) ("Our law is clear that Rule 1148 must be interpreted narrowly ... As the courts of Pennsylvania have applied this Rule, only those counterclaims are permitted that are part of or incident to the creation of the mortgage relationship itself." (citing Gourniak, 601 A.2d at 341)); July 3, 2014 Order in Wells Fargo Bank, N.A. v. Desiderio, No. 2013 -03757 -RC (C.C.P. Chester July 3, 2014) (striking counterclaims that were not incidental to the creation of the mortgage relationship pursuant to Rule 1148), attached hereto as Exhibit "E"; December 10, 2012 Order and Opinion in Wells Fargo Bank, N.A. v. Ratmansky, No. C -48 -CV -2012-2302 (C.C.P. Northampton Dec. 10, 2012) (dismissing counterclaims for "Fraudulent and unfair loan 16 SL1 1327448v1 104945.00426 modification attempts" and "Harassment—Estoppel and Bad Faith" because these claims did not arise out of the creation of the mortgage relationship), attached hereto as Exhibit "F"; Bank of America, N.A. v. Jagruti Corp., No. 2009-31604, 2010 WL 6309974 (Pa. Corn. Pl. Aug. 17, 2010) (holding that counterclaim concerning payment arrangements regarding the underlying mortgage was barred by Rule 1148 because there was no allegation that the payment arrangement was contemplated, negotiated or agreed to at the time that the mortgage was entered into); Beneficial Consumer Discount Co. v. Hoffman, 79 Pa. D. & C.4th 496, 503-04 (Pa. Corn. Pl. 2006) (dismissing breach of contract, fraudulent representation, negligent representation, and UTPCPL counterclaims because those claims arose or occurred after the creation of the mortgage "and are unrelated to the actual creation of the security interest."). 78. Here, the Defendants seek to assert claims based on (vague) allegations that Wells Fargo "failed to provide applicable mortgage servicing protocols," attempted to "enforce this consumer mortgage debt by a bogus action when the Plaintiff knows that it does not have standing and the right to pursue this action," "falsely claim[ed] to be a lawful or nominee for the true holder in due course in order to collect a note," and improperly securitized the loan thereby "effect[ing] a conversion by fraud" [Counterclaims, ¶1198-99]. 79. These claims are based on allegations that took place after the creation of the Mortgage on February 1, 2010. Defendants' assertions that Wells Fargo failed to service the Mortgage correctly, improperly brought this foreclosure action, and improperly securitized the loan (after origination), all of which necessarily involve conduct that was not incidental to the creation of the Mortgage, but rather could only occur after its execution. 17 SL 1 1327448v1 104945.00426 80. As such, these claims may not be brought in this in rem mortgage foreclosure action and should be dismissed as a matter of law pursuant to Pa. R. Civ. P. 1148. See Rearick, 2014 WL 3795152, at *7. C. The Counterclaims Must Be Dismissed Because A Counterclaim For Affirmative In Personam Money Damages Cannot Be Asserted in an In Rem Mortgage Foreclosure Action and the Defendants' Requests for In Personam Money Damages Must Be Stricken. 81. The Counterclaims should also be dismissed because the Defendants improperly seek an award of in personam money damages which cannot be granted in this in re foreclosure proceeding. 82. Under Pennsylvania law, a foreclosure action is strictly in rem and may not include a demand for an in personam money judgment. Pa. R. Civ. P. 1141(a); Rearick, 2014 WL 3798152, at *7; Newtown Village P'ship v. Kimmel, 621 A.2d 1036, 1037 (Pa. Super. Ct. 1993); Insilco Corp. v. Rayburn, 543 A.2d 120, 123 (Pa. Super. Ct. 1988); Signal Consumer Discount Co. v. Babuscio, 390 A.2d 266, 270 (Pa. Super. Ct. 1978); Ratmansky, attached hereto as Exhibit "F," at pages 7-8. 83. This restriction is equally applicable to both mortgagee and mortgagor. Newtown Village, 621 A.2d at 1037; Signal Consumer Discount Co., 390 A.2d at 270. 84. Because the Defendants improperly seek in personam money judgments against Wells Fargo throughout their Counterclaims, the Counterclaims must be dismissed. 85. In the Counterclaims, the Defendants seek, inter alia, "statutory damages," "actual damages," "costs and a reasonable attorney fee," "treble damages," "return of any money paid by the Defendant[s]," and "an ount of money equal to treble the finance charge in connection with the transaction." [Counterclaims, wherefore clauses]. 18 SLI 1327448v 1 104945.00426 86. Such awards of in personam money damages may not be sought in this in e mortgage foreclosure action. Rearick, 2014 WL 3795152, at *7; Newtown Village, 621 A.2d at 1037; Insilco Corp., 543 A.2d at 123; Signal Consumer Discount Co., 390 A.2d at 270. 87. Therefore, the Counterclaims must be dismissed. 88. Further, in the New Matter, the Defendants seek, inter alia, "attorney's fees." [New Matter, wherefore clause]. 89. As explained above, such an award of in personam money damages may not be sought in this hj mortgage foreclosure action. WHEREFORE, Wells Fargo requests the Court to sustain these preliminary objections, to dismiss the Defendants' Counterclaim with prejudice, and to strike the Defendants' request for attorneys' fees in their New Matter. IV. FAILURE TO CONFORM TO LAW OR RULE OF COURT AND INSUFFICIENT SPECIFICITY — FAILURE TO PLEAD SPECIFIC, MATERIAL FACTS IN NEW MATTER AND COUNTERCLAIMS 90. Wells Fargo incorporates by reference all preceding paragraphs herein. 91. The Pennsylvania Rules of Civil Procedure authorize preliminary objections for failure of a pleading to conform to law or rule of court. Pa. R. Civ. P. 1028(a)(2). 92. The Pennsylvania Rules of Civil Procedure authorize preliminary objections for insufficient specificity in a pleading. Pa. R. Civ. P. 1028(a)(3). 93. Pursuant to Pa. R. Civ. P. 1019(a), a party is required to plead the material facts to support its alleged claims or defenses. Pennsylvania Rule Civil Procedure 1019(a) requires a party to state "[t]he material facts on which a cause of action or defense is based . . . in a concise and summary form." Pa. R. Civ. P. 1019(a). 19 SL1 1327448v1 104945.00426 94. A party must plead sufficient material facts in support of its new matter defenses. Donegal Mutual Ins. Co. v. Stroker, 15 Pa. D. & C. 5th 245 (Pa. Corn. Pl. 2010) ("In our case, defendants fail to provide any facts that would corroborate the averments presented in their new matter."). 95. In pleading a counterclaim, a defendant must "formulate the issues by summarizing those facts essential to support the claim." Sevin v. Kelshaw, 611 A.2d 1232, 1235 (Pa. Super. Ct. 1992); 611 A.2d at 1235; Youndt v. First Nat'l Bank of Port Allegany, 868 A.2d 539, 544 (Pa. Super. Ct. 2005). Moreover, averments of fraud must be averred with particularity. Pa. R. Civ. P. 1019(b). 96. The New Matter and Counterclaims offers insufficient specific, material allegations in support of the Defendants' claims and defenses. 97. For example, the Defendants allege that "Defendants believe and therefore aver that the closing was an 'alleged loan closing' because in fact it was part of an undisclosed hidden illegal scheme to issue unregulated securities (mortgage backed securities) based upon the negotiation of non-negotiable notes, the terms of which had been changed, altered, amended or modified AFTER the execution by the Defendants." [New Matter, ¶ 45]. 98. The Defendants do not offer any details or specifics regarding this supposed "hidden illegal scheme," including who was involved in such scheme and what terms of "notes" were "changed, altered, amended or modified" after execution. 99. Likewise, while the Defendants allege that Wells Fargo "placed the Defendants into a pool of a sub -prime mortgage program[], with Wells Fargo intentionally misleading Defendants and the other borrowers and engaging in material omissions by failing to disclose to Defendants and other borrowers the fact that the nature of the mortgage loan 20 SLI 1327448v1 104945.00426 applications had been materially changed without Defendants' knowledge or consent" [New Matter, 1151], the Defendants fail to identify any specifics regarding the "pool of a sub -prime mortgage program" or when or how Wells Fargo supposedly failed to disclose anything to the "Defendants and other borrowers." 100. Similar to the New Matter, the Defendants' Counterclaims do not include sufficient specific, material facts in support of the Defendants' claims. 101. For example, the Defendants allege that "[m]ore than 20 calendar days have passed since Wells Fargo received Defendants' notice of rescission." [Counterclaims, ¶ 86]. The Defendants, however, do not specify when Wells Fargo allegedly received a rescission notice, and the notice they claimed to have sent was not properly addressed. 102. Likewise, the Defendants baldly allege that Wells Fargo "failed to provide applicable mortgage servicing protocols." [Counterclaims, ¶ 98]. The Defendants do not specify what "mortgage servicing protocols" were not "provide[d]." 103. The Defendants also assert that Wells Fargo has failed to "comply with the Pooling and Servicing or [T]rust Agreement that controls and applies to the subject mortgage loan." [Counterclaims, ¶ 99]. The Defendants do not specify what "Agreement" they are referring to, nor do they attach any such "Agreement" to their Counterclaims. 104. In addition, in their breach of contract claim (Counterclaims Count IV), the Defendants also assert that Wells Fargo "breached its agreement." 105. The Defendants have not identified any specific duty imposed by a contract (such as the Note or Mortgage) that was been supposedly breached by Wells Fargo (or when any such breach occurred). 21 SL1 1327448v1 104945.00426 106. The Defendants also assert that Wells Fargo "knowingly and intentionally concealed material information from Defendants which is required by Federal Statutes and Regulations to be disclosed to the Defendant[s] both before and at the closing." [Counterclaims, ¶ 107]. The Defendants do not specify what "material information ... required by Federal Statutes and Regulations" was allegedly "knowingly and intentionally concealed." 107. By pleading in such a vague and uninformative manner, the Defendants run afoul of Pennsylvania's fact -pleading standard. Sevin v. Kelshaw, 611 A.2d 1232, 1235 (Pa. Super. Ct. 1992); Pa. R. Civ. P. 1019. "[Pennsylvania's] Rules of Civil Procedure are drawn on the theory that the issues are to be formed by the pleadings and the discovery process is merely an auxiliary aid to counsel." Marine Bank v. Orlando, 25 Pa. D.&C.3d. 264, 267 (Pa. Corn. Pl. 1982). 108. Defendants should have pled, in concise and summary form, the material facts on which their claims and defenses are based to enable Wells Fargo to prepare a response. See Landau v. W. Pa. Nat'l Bank, 282 A.2d 335, 339 (Pa. 1971) ("The purpose of [Rule 1019(a)] is to require the pleader to disclose the `material facts' sufficient to enable the adverse party to prepare his case."); Smith v. Wagner, 588 A.2d 1308, 1310 (Pa. Super. Ct. 1991) (quoting Landau); Pa. R. Civ. P. 1019(a). 109. Accordingly, the New Matter and Counterclaims should be dismissed pursuant to Pa. R. Civ. P. 1028(a)(2) for failure to conform with the rules of court and for insufficient specificity pursuant to Pa. R. Civ. P. 1028(a)(3). See Green v. Klein, 16 Pa. D. & C. 5th 144, 155 (Pa. Corn. Pl. 2010) (finding insufficient specificity in a pleading and holding that "[t]he purpose behind the rules of pleading is to enable parties to ascertain, by utilizing their own professional discretion, the claims and defenses asserted in the case.") (citation omitted); 22 SL 1 1327448v1 104945.00426 American Exp. Centurion v. Decker, 9 Pa. D. & C. 5th 299, 301 (Pa. Corn. Pl. 2009) (sustaining preliminary objection for insufficient specificity because the pleading party failed to explicitly state a material fact). WHEREFORE, Wells Fargo requests this Court to sustain these preliminary objections and to dismiss the Defendants' New Matter and Counterclaims with prejudice. STEVENS & LEE Dated: November 7, 2014 By SL 1 1327448v1 104945.00426 Crai: A. r irneisen Atto '_ T.D. No. 209108 111 North Sixth Street P.O. Box 679 Reading, Pennsylvania 19603 Telephone: (610) 478-2229 Facsimile: (610) 371-1220 Email: cah@stevenslee.com Co -counsel for Plaintiff 23 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA WELLS FARGO BANK, N.A., : CIVIL DIVISION Plaintiff : NO. 13-2237 Civil V. DONALD D. DORRIS, JR. • A/K/A DONALD D. DORRIS and ELIZABETH M. DORRIS, Defendants CERTIFICATE OF SERVICE I, CRAIG A. HIRNEISEN, ESQUIRE, certify that on this date, I served a true and correct copy of the foregoing Plaintiff's Preliminary Objections to Defendants' New Matter and Counterclaims and proposed Order upon the following counsel of record by depositing the same in the United States mail, postage prepaid, addressed as follows: Date: November 7, 2014 SL1 1327448v1 104945.00426 Stephen K. Portko, Esquire Bratic & Portko 101 South U.S. Route 15 Dillsburg, PA 17019 John Michael Kolesnik, Esq. Phelan Hallinan, LLP 1617 JFK Blvd., Suite 1400 One Penn Center Plaza Philadelphia, PA 19103 Exhibit A • O -t rrA 34r: r— cYT1 C:0 Q PHELAN HALLINAN, LLP John Michael Kolesnik, Esq., Id. No.308877 1617 JFK Boulevard, Suite 1400 One Penn Center Plaza Philadelphia, PA 19103 215-563-7000 1<C2 .i.4l 1 zc - '_l w CO ATTORNEY FOR PLAINTIFF IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA WELLS FARGO BANK, N.A. 3476 STATEVIEW BOULEVARD CIVIL DIVISION FORT MILL, SC 29715 Plaintiff, NO.: ) S:03? eitt cal vs. DONALD D. DORRIS, JR A/K/A DONALD D. DORRIS ELIZABETH M. DORRIS 709 MCCORMICK ROAD MECHANICSBURG, PA 17055-5964 Defendants. CIVIL ACTION — COMPLAINT IN MORTGAGE FO?ECLOBURE And now comes WELLS FARGO BANK, N.A., by its attorneys, Phelan Hallinan, LLP and files this Complaint in Mortgage Foreclosure as follows: 1. The Plaintiff is WELLS FARGO BANK, N.A., 3476 STATEVIEW BOULEVARD, FORT MILL, SC 29715 (hereinafter "plaintiff'). 062 -PA -V3 2. The Defendants, DONALD D. DORRIS, JR A/K/A DONALD D. DORRIS and ELIZABETH M. DORRIS, are individuals whose last known address are 709 MCCORMICK ROAD, MECHANICSBURG, PA 17055-5964. 3. WELLS FARGO BANK, N.A., directly or through an agent, has possession of the Promissory Note, WELLS FARGO BANK, N.A, is either the original payee of the Promissory Note or the Promissory Note has been duly indorsed. A true and correct copy of said Promissory Note is marked Exhibit "A", attached hereto and made a part hereof. 4. On or about February 1, 2010, DONALD D. DORRIS, JR and ELIZABETH M. DORRIS made, executed and delivered to WELLS FARGO BANK , N.A a Mortgage in the original principal amount of $367,800,00 on the premises described in the legal description marked Exhibit "B", attached hereto and made a part hereof. Said Mortgage being recorded in the Office of the Recorder of CUMBERLAND County in Instrument No. 201003523, The Mortgage is a matter of public record and is incorporated herein by reference in accordance with Pa.R.C.P. 1019(g), which rule relieves the Plaintiff from its obligation to attach documents to pleadings if those documents are of public record, 5. Plaintiff is the current Mortgagee. 6. DONALD D. DORRIS, JR A/K/A DONALD D. DORRIS and ELIZABETH M. DORRIS are record and real owners of the aforesaid mortgaged premises, 7. Defendants are in default under the terms of the aforesaid Mortgage for, inter alia, failure to pay the monthly installments of principal and interest due March 1, 2012. 062 -PA -V3 8. As of 03/01/2013, the amount due and owing Plaintiff on the mortgage is as follows: Principal Balance $356,911.07 Interest $ 19,816.03 02/01/2012 through 03/01/2013 Late Charges $ 400.52 Property Inspections $ 120.00 Escrow Deficit $ 3,911.41 Suspense Balance $ (2,114.69) TOTAL $379,044.34 plus interest and all other additional amounts authorized under the Mortgage and Pennsylvania Law, actually and reasonably incurred by Plaintiff, including but not limited to, costs (including escrow advances) and Plaintiff's attorneys' fees and expenses. Plaintiff reserves the right to file a motion in the above -captioned action to add such additional sums authorized under the Mortgage and Pennsylvania Law to the above amount due and owing when incurred. 9. Notice of Intention to Foreclose as set forth in Act 6 of 1974, Notice of Homeowner's Emergency Mortgage Assistance Program pursuant to Act 91 of 1983, as amended in 2008, and/or Notice of Default as required by the mortgage document, as applicable, have been sent to the Defendant(s). 10. This is an in rem action only against the aforesaid mortgaged premises. Plaintiff is not seeking a judgment of personal liability against the Defendant(s), but reserves its right to do so in a separate legal action if such right exists. If Defendant(s) have received a discharge of personal liability in a bankruptcy proceeding, this action is in no way an attempt to re-establish such liability. 062 -PA. -V3 WHEREFORE, Plaintiff demands an in rem judgment in mortgage foreclosure for the amount due of $379,044.34, with interest thereon plus additional costs (including additional escrow advances); additional attorneys' fees and costs and for foreclosure and sale of the mortgaged premises. By Date: 462-PA•V3 o ichael. Kolesnik, Esq., Id. No.308877 A:'crney for Plaintiff Exhibit "A" FEBRUARY 1, 2010 fame' NOTE CARLISLE PENNSYLVANIA laity( (Slate) /09 MCCOR ICK ROAD, MECHANQICSBURG, PA 17055 1Promrty Addsessl 1. BORROWER'S PROMISE TO PAY In return for a loan that I have received, I promise to pay U.S. $ ***367 ,800. DO plus interest, to the order of the Lender. The Lender is W&aLS FABGC BANK, N.A. (this amount is called "Principal"), 1 will make all payments under this Note in the form of cash, check or money order. I understand that the Lender may transfer this Note. The Lender or anyone who takes this Note by transfer and who is entitled to receive paytnentc under this Note is called the "Note Holder." 2. INTEREST Interest will be charged ou unpaid principal until the fuU amount of Principal has been paid. I will pay interest at a yearly rate of 5.125 ` • The interest rate required by this Section 2 is the rate I wilt pay both before and after any default described in Section 6(0) of this Note. 3. PAYMENTS (A) Time and Place of Payments 1 will pay principal and interest by malting a payment every month. l will make ary monthly payment an the IST day of each nautili: beginning onMA1 CH, 2010 . I will make theca payments every month until 1 have paid all of the principal and interest and any other charges described below that I may owe under this Note. Each monthly payment will be applied as of its scheduled due date and will be applied In interest before Principal. If. on atu7ARY 1 r 2040 , I still owe amounts under this Note, I will pay those amounts in full on that date, which is called the 'Maturity Date." i willmake my monthly payments atWELLS PtR1 0 BANK, N.R. B.O. BOX 11701, NEWARK, NJ 07101-4701 or at a different place if required by the Note Holder. (B) Amount of Monthly Payments My tnoathiy payment will be in tate amount of U.S. $ ***k*2, 002.63 4. BORROWER'S RIGHT TO PREPAY I have the right to snake payments of' Principal at any tient before they are due. A payment of Principal only is known as a "Prepayment." When I make a Prepayment, 1 will tell the Note Ilulder In writing that I am doing so. I may not designate a payment as a Prepayment if I have not made all the monthly payments due under the Note. I may mike a 1L11 Prepayment or partial Prepayments without paying; a Prepayment charge. The Note Holder will use my Prepayments to reduce the amount of Principal that 1 owe under this Note. However, the Note Holder may apply my Prepaynneat to the accrued and unpaid interest on the Prepayment amount, before applying my Prepayment to reduce the Prinlcipat amount of the Notc. If I matte a partial Prepayment, there will be no changes in the due date or in the amount of my monthly payment unless the Note Holder agrees in writing to those changes. BATE NOTE • S~e.lata Family - Parma Ma rlFndCia Mat UNIFORM INSTRUMENT L 3200 tCNOT) trot 312000 7720 Tif) i l0ana140 Wa t nl S. LOAN CHARGES If a law, which applies to this loan and which acts maximum loan charges, is finally interpreted so that the interest or other loan charges collected or to be collected in connection with this loan exceed the permitted limits, then: (a) any such loan charge shall be reduced by the amount necessary to reduce the charge to the permitted limit: and (b) any sums already collected from me which exceedcdpermitted limits will be refunded to me. The Note Holder may choose to make this refund by reducing the Principal I awe under this Note or by making a direct payment to me. If a refund reduces Principal, the reduction will be tzvated as a partial Prepayment. 6. BORROWER'S FAILURE TO PAY AS REQUIRED (A) Late Charge for Overdue Payments If the Note Holder has not received the full amount of any monthly payment by the end of 15 calendar days after the date it is due, I will pay a lute charge to the Note Holder. The amount of the charge will be 5.000 % of my overdue payment of principal and interest. I will pay this late charge promptly but only trice ern each late payment. (B) Default If I do not pay the full amount of each monthly payment on the date it is due, I will be in default. (C) Notice of Default If I am in default, the Note Holder may send me a written notice telling me that if 1 do not pay the overdue amount by a certain date, the Note Holder may require me to pay itntnetitately the full amount of Principal which has not hcen paid and all the interest that I owe on that amount. That date must be at least 30 days after the date on which the notice is marled to me or delivered by other mean. (fI) No Waiver By Note Ilolder Even if, at a time when t ata in default, the Note Holder does not retluirc the to pay immediately in full as described above, the Note Holder wUi still have the right to do so if 1 am in default at a later time. (E) Payment of Note Holder's Cosh; and Expenses Tf the Note Holder has required me to pay immediately in full as described above, the Note Holder will have the right to be paid back by the for all of its costs and expenses in enforcing this Note to the extent not prohibited by applicable law. Those expenses include, for example. reasonable attorneys' fees. 7. GIVING OF NOTICRS Unless applicable law requires a different method, any police that toast be giveu to me under this Note wilt be given by delivering it or by mailing it by first class mall to me at the; Property Address above or at a different address If I give the Note Holder a notice of my different addreas. Any notice that must be given to the Note Holder under this None will be given by delivering it or by mailing it by fust class mail to the Note Holder at the address nested in Section 3(A) above or at a different address if I am given a notice of that different address. 8. OBLIGATIONS OF PERSONS UNDER THIS NOTE If more than one person signs this Nutc, each person is fully and personally obligated to keep all of the promises made in this Note, including the promise to pay the full amount owed. Any person who is a guarantor, surety or endorser of this Note is also obligated to do these things. Any person who takes over these obligations, including the obligations of a guarantor, surety or endorser of thio Note, is also obligated to keep all of the pmreieee made in this Note. The Note Holder may enforce its rights under this Note against each person individually or against ail of us together. This means that any one of us may be required to pay alt of the amounts owed under this Note. 9. WAIVERS 1 and any other person who has obligations under this Note waive the rights of Presentment and Notice of Dishonor. "Presentment" means the right to require the Nate 'bolder to demand payment of amounts due. "Notice of Dishonor" means the right to require the Note ilnicler to give notice to ocher persons that amounts due have not been paid. VMP Waltara lOuww RAT£ NOTE - Simla remlly • Fun -ie Mrtrrwalr Moe UNIFORM tNSTA MEN2 form 3200 7r41 WPM IO6O31.Ot) P"pa2 or 10. UNIFORM SECURED NOTE This Note is a utriform Instrument with limited variations in some ,jurisdictions. In addition to the protections given to the Note Holder under this Note, a Mortgage. Deed of Trust, or Security Deed (the "Security instrument"). dated the sante date as this Note, gratetats the Note Holder from possible tosses which might result if I do not keep the promises which I make In this Note. That Security Instrument describes how and under what conditions I may be required to make itruncdiste payment in full of all amounts I owe under this Note. Some of those conditions arc described as Fallows: If all or any part of the Property or any Interest in the Property is sold or transferred (or if Borrower is not a natural person and a beneficial interest In Borrower is sold or transferred) without Lender's prior written consent, Lender may require: immediate payment in full of alt sums secured by this Security Instrument. However, this option shall not be exercised by Lender if such exercise is prohibited by Applic hoc Law. If Lender exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice Ts given in accordance with Seniott 15` within which Borrower must pay all sums secured by this Security lnstnttnent. If Borrower faits to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand an Borrower. ESS THE HANDS) AND SEALS) OF T1- E UNDERSIGNrn. dir a all D P DORRIS 3 (Seat) -&vtrtrncr (Seal) ttorrowcr I) -Borrower (Scat) -Borrower (Seal): -Borrower (Seal) -ticrnmsr (Seal) (Seal) -Ikrcmwrt •Borrower (Sign Original Only/ • 1NAM 5407E •game ramify - mire Matikado%Mae UNIFORM INSTRUMENT .Yai.eea rtf r i S:. uq Form 5200 1101 VMPSN 10803840 Pip4 3 of 3 Exhibit "B" LEGAL DESCRIPTION ALL THAT CERTAIN tract or parcel of ground with the buildings and improvements thereon erected, situate in the Township of Upper Allen, County of Cumberland, Commonwealth of Pennsylvania, bounded and described as follows: BEGINNING at a point on the Northern bank of the Yellow Breeches Creek at a corner of land now or late of John E. Cline; thence extending along said Creek Road North 74 degrees West, 194.71 feet to a corner of land now or late of Eric H. and Mary P. Humphries; thence along said land and crossing Township Road No. T-611 North 8 degrees 15 minutes East 262.06 feet to a point; thence still along said land North 24 degrees 41 minutes East 206.48 feet to a point in line of land now or late of Dr. A. Z. Ritzman; thence along said land south 79 degrees East 270 feet to a corner of land now or late of John E. Cline; thence along said land and recrossing Township Road No. T-611 South 24 degrees 15 minutes West 492.6 feet to the point and place of BEGINNING. BEING known and numbered as 709 McCormick Road. PROPERTY ADDRESS: 709 MCCORMICK ROAD, MECHANICSBURG, PA 17055- 5964 PARCEL # 42-11-0272-043. File #: 300176 VERIFICATION Jasmin McLean, hereby states that he he 's Vice President Loan Documentation of WELLS FARGO BANK, N.A., plaintiff in this matter, that he is authorized to make this Verification, and verify that the statements made in the foregoing Civil Action in Mortgage Foreclosure are true and correct to the best of hi na tion and belief. The undersigned understands that this statement is made subject to the penalties of 18 Pa. C.S. Sec. 4904 relating to unsworn falsification to authorities. Name: snlin McLean Title: Vice President Loan Documentation Company: Wells Fargo Bank, N.A. Date: 03/04/2013 086 -PA -V2 File # 300176 Exhibit B IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA WELLS FARGO BANK, N.A., . G. Plaintiff : CML DIVISION c .l' rrICO 13* r11 -- v. NO. 13-2237 Civil., fir: r ry DONALD D. DORRIS,JR. ��" r" o CD A/K/A DONALD D. DORRIS and <a -; C:::: ELIZABETH M. DORRIS, zr# `,? c cn Defendants : P'z NOTICE TO PLEAD TO: Plaintiff, Wells Fargo Bank, N.A. and its attorney John Michael Kolesnik, Esquire PHELAN HALLINAN, LLP 1617 JFK Boulevard, Suite 1400 One Penn Center Plaza Philadelphia, PA 19103 Attorneys for Plaintiff You are hereby notified to file a written response to the enclosed DEFENDANT'S ANSWER WITH NEW MATTER & COUNTERCLAIMS TO PLAINTIFF'S COMPLAINT within twenty (20) days from service hereof or a judgment may be entered against you. Dated: Stephen K. Portko, Esq. Bratic & Portko 101 South U.S. Route 15 Dillsburg, PA 17019 Attorneys for Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA WELLS FARGO BANK, N.A., Plaintiff CIVIL DIVISION NO. 13-2237 Civil DONALD D. DORRIS, JR. A/K/A DONALD D. DORRIS and ELIZABETH M. DORRIS, Defendants DEFENDANTS' ANSWER NEW MATTER & COUNTERCLAIMS TO PLAINTIFF'S COMPLAINT AND NOW, come Defendants, Donald D. Dorris, Jr. afk/a Donald D. Dorris and Elizabeth M. Dorris, by their attorneys, who file the within Answer with New Matter & Counterclaims to Plaintiffs Complaint, as follows: 1. Denied. After reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth or falsity of the averment contained in paragraph 1 of the Complaint and therefore denies the allegations thereof. 2. Admitted. 3. Denied. After reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth or falsity of the averment contained in paragraph 3 of the Complaint and therefore denies the allegations thereof. By way of further answer, Defendants believe and therefore aver that Federal National Mortgage Association (Fannie Mae) is actually the owner of the loan with an acquisition date of 03-01-2010; however, Defendants timely rescinded the mortgage and, thus, Plaintiff's transfer or assignment of the subject loan subsequent to Defendants' rescission violated the law. 4. Denied. On or before February 3, 2010 and within the three-day rescission period, Defendants timely exercised their right to rescind the loan sending their rescission notice to Plaintiff. As a result, the mortgage on Defendants' property became automatically voided by operation of law. By way of further answer, Plaintiffs interest in the property is automatically negated regardless of whether or not it was recorded. 5. Denied. The allegations are legal conclusions to which no answer is required. To the extent a reply may be appropriate, these allegations are denied, and Defendants deny that Plaintiff is the current mortgagee. Further, the mortgage was automatically voided when Defendants' exercised their right to rescind the mortgage loan. 6. Admitted in part and denied in part. Admitted that Defendants are the record and real owners of the premises. Denied that the property is mortgaged. To the contrary, the mortgage was automatically voided when Defendant's exercised their right to rescind the mortgage loan. 7. Denied. The allegations of Paragraph 7 of the Complaint are legal conclusions to which no response is required. To the extent an answer may be appropriate, these allegations are denied. To the contrary, the mortgage was automatically voided when Defendant's exercised their right to rescind the mortgage loan. By way of further answer, Defendants aver that they were tied to and deceived about the transaction and about the terms of the loan and as to the amount required to refinance the mortgage. Further, Plaintiff misrepresented the benefits of the loan to Defendants, leading them to believe that a refinance of the mortgage would improve their financial situation. The mortgage was obtained by fraud, misrepresentation, trickery and other misconduct and is not enforceable. 8. Denied. The allegations of Paragraph 8 of the Complaint are legal conclusions to which no response is required. To the extent an answer may be appropriate, these allegations are denied. To the contrary, the mortgage was automatically voided when Defendant's exercised their right to rescind the mortgage loan. By way of further answer, the mortgage does not set forth the terms of payment but refers to the note, which note is not attached to the Complaint and, therefore, the allegations are denied. 2 9. Denied. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth or falsity of the averment contained in paragraph 9 of the Complaint and therefore denies the allegations thereof. 10. Denied. The allegations are legal conclusions to which no answer is required. To the extent a reply may be appropriate, these allegations are denied, and Defendants aver that the mortgage, note or lien is void for the reasons set forth in Defendants' New Matter and, accordingly, Plaintiff is not entitled to the relief requested. WHEREFORE, Defendants respectfully requests that Plaintiffs claim be dismissed, and that judgment be entered in favor of Defendants with attorney's fees and costs, and that Defendants be awarded any other relief that this Honorable Court deems appropriate, NEW MATTER 11. Defendants incorporate their answers to paragraphs 1 through 10 above as if fully set forth in their entirety. 12. Defendants have resided in their home at 709 McCormick Road, Mechanicsburg, Pennsylvania since 1993. 13.On February 28, 2008, Defendants refinanced their home with Atlantic Pacific Mortgage Corp., (herein "Lender"). The mortgage was recorded on 04/24/2008 and named Mortgage Electronic Registration Systems, Inc. (herein "MERS"), as mortgagee and nominee for Lender. 14. Due to a change in Defendants' financial circumstances and increased expenses, they started to look for a loan with more affordable terms that would lower their rate and reduce the monthly payment by an amount of $400 to $500 each month. 15. Defendants, who had a sizable equity in their home, were a prime target for predatory mortgage lenders and brokers. 16. Defendants were unsophisticated borrowers who did not understand many of the basic terms and costs of a typical mortgage loan transaction. 17. Sometime in December of 2009, Defendants saw an advertisement by Wells Fargo that it made loan refinances to consumers that were suitable and affordable, and made its lending decisions based upon a consumer's credit and ability to pay. 3 18. Defendants contacted Plaintiff Wells Fargo Bank, N.A. (herein "Wells Fargo") who represented to them that it offered a wide range of products as solutions to match a family's income level or credit file and that its selection of loans was built to suit specific needs of a customer and that it was ready to help them find a loan that was perfect for them. Defendants were also told that they were making the right decision to enter into a loan with Wells Fargo and that they could refinance at a better rate. 19.As a result, Defendants were then contacted by an agent or employee of Wells Fargo loans who explained to Defendants that Wells Fargo could offer a new loan that would reduce their mortgage payments. 20.AII contacts between Defendants and Wells Fargo or their agent were by phone. Wells Fargo's agent repeated the assertions about the loan's benefits and urged Defendants to complete loan application over the phone. In reliance on Wells Fargo's promises that the loan would lower their monthly mortgage payments, they applied for a loan. 21. Defendants aver that contrary to the representations made Wells Fargo's agent, Plaintiff made a loan to them on terms that differed materially from those represented to them prior to closing, which was not suitable and affordable, was not appropriate for their specific situation and was not based on their ability to pay. By way of example, Wells Fargo's loan representative led Defendants to believe that the principal and interest payment would be in the range of $1700 -- an amount Defendants had indicated would be suitable and affordable. 22. Subsequently, Wells Fargo's agent contacted Defendants and informed them that their loan was ready to close without disclosing the terms of the loan. 23.At the closing on February 1, 2010, Defendants were presented with a myriad of loan documents to sign over a short period. The settlement agent showed Defendants the documents and told them where to sign while providing no explanation of what they were signing other than a cursory review. Defendants, who lacked financial sophistication and the ability to fully understand the complicated financial documents placed before them, signed all the documents. 24,After attending settlement, Defendants had the opportunity to carefully review the loan documents they had been asked to sign and discovered that the terms of the new loan were not suitable and affordable and were not what had been promised to them when 4 they initially applied for the loan. Moreover, through another mortgage broker, they had been offered better terms with a VA loan. 25.As a result, on February 2, 2010, Defendants contacted Wells Fargo and spoke with Sharon Eliker about rescinding the mortgage and what steps they needed to take to confirm their rescission. In addition, Defendants communicated in writing their Notice to cancel the loan. A copy of Defendant's letter dated February 2, 2010 and sent to Plaintiff on February 3, 2010 is attached hereto as Exhibit "1" and incorporated by reference herein. 26. On February 8, 2010, Defendant sent another letter to Wells Fargo requesting confirmation of receipt of their notice to cancel and again informing Wells Fargo that they intended to obtain VA loan refinancing, which offered better terms and a lower monthly payment. A copy of Defendant's letter sent on February 8, 2010 is attached hereto as Exhibit "2" and incorporated by reference herein. 27. Having received no communication from Plaintiff regarding their notice to cancel, Defendants sent a third written communication to Wells Fargo's employee, Karen !Wings, on May 17, 2010. A copy of Defendant's letter dated May 17, 2010 sent to Plaintiff is attached hereto as Exhibit "3" and incorporated by reference herein. 28.Wells Fargo sent Defendants a copy of a mortgage satisfaction; however, it was not for the new mortgage loan obtained on February 1, 2010, which loan they had asked Plaintiff to cancel pursuant to their Notice of Rescission. 29.Confused by Wells Fargo's delay and misleading action, Defendants communicated by phone with Wells Fargo on several occasions to inquire if Wells Fargo had effectuated the rescission. Defendants were not given any information except to continue making payments to be applied to the old loan. On June 10, 2010, Defendants sent another letter requesting a response, a copy of which is attached hereto as Exhibit "4" and incorporated by reference herein. 30. Not knowing whether the old loan was still in effect and fearing the loss of their home, Defendants continued to make payments waiting for Wells Fargo to comply with their notice to cancel the new loan. 5 31. Plaintiff did not process the rescission. Instead, Plaintiffs concocted a plan to avoid its statutory obligation by telling Defendants that Mrs. Dorris is not on the loan so her signing the rescission request is invalid as she was not a qualifying party on the loan. 32. In disregard of Defendant's notice to cancel and follow up letters, Plaintiff went ahead and recorded the new mortgage (although Fannie Mae claims to own the loan with an acquisition date of 03/01/2010) instead of processing Defendants' rescission request. 33. Notwithstanding the above, and without Defendants' knowledge, Wells Fargo had entered into Assignment and Assumption Agreements with one or more parties and Pooling and Service Agreements with one or more parties, including Fannie Mae, prior to or contemporaneously with the "Closing" of the subject "loan transaction." The same was deliberately concealed and the reason Wells Fargo failed to respond to or act upon Defendants' notice to cancel the loan transaction. 34. Contrary to the documents presented before and during the "closing" of the "loan transaction", Wells Fargo was neither the source of funding nor the "Lender." 35. Thus at the time of closing, the source of funding and the "Lender" was a different entity than the nominal mortgagee and was neither named nor disclosed in any fashion. 36. Defendants do not know what version of documentation was presented to Fannie Mae and if Fannie Mae took one or more varying descriptions of the alleged "loan documents" into more than one pool of assets which was eventually sold for the purpose of securitizing the assets of the pool which included the subject loan transaction either once or more than once. 37. There is no assignment of the subject mortgage in the county records to Fannie Mae, but there is a non -recorded Pooling and Services" Agreement and a non -recorded Assignment and Assumption Agreement 38. The note from the subject "loan transaction" was eventually allocated into a new corporation (Special Purpose Vehicle) formed for the express purpose of holding the pooled assets under certain terms. 39.The terms included the allocation of payments from one note to pay any deficiency in payment of another note in unrelated "loan transactions" contrary to the terms of each 6 such note which required payments to be allocated to the principal, interest, escrow and fees associated with only that specific "loan transaction." 40. Whether such "deficiency" was caused by the difference between the higher general terms of description of the note or the lower actual payment requirements from the "borrower" is not known, because Plaintiff failed to disclose any such information and continues to conceal all of the documents that make up the "loan transaction". 41. The pool assets, including the Plaintiff's subject "loan transaction" were pledged completely to the owners of the "asset-backed securities." All the certificates were then transferred to a Seller who in tum sold the certificates in varying denominations, each of which had slightly different terms depending upon which segment of the pool (tranche) secured the investment. 42. If there is a holder in due course of the Defendant's note arising from the subject "loan transaction" it is the investors who purchased said securities (certificates). 43. In order for this Plaintiff to maintain legal standing in connection with the subject loan transaction they are required to show the entire chain of title of the note and the entire chain of title of the mortgage. 44. The fact that the "loan" was table-funded without a disclosed source of funds and without disclosing thousands of dollars in fees all contrary to the requirements of state and federal law was withheld from Defendants by Wells Fargo and continues to be withheld by Plaintiff. But for the expenditure of time, money and effort on research, Defendants would not have discovered the various deceptions of the Wells Fargo at the alleged loan closing. 45. Defendants believe and therefore aver that the closing was an "alleged loan closing" because in fact it was part of an undisclosed hidden illegal scheme to issue unregulated securities (mortgage backed securities) based upon the negotiation of non-negotiable notes, the terms of which had been changed, altered, amended or modified AFTER the execution by the Defendants. 46.Wells Fargo then purported to "negotiate" the note by adding terms which allowed the proceeds of the note to be allocated to the payment of the notes of other borrowers and adding co-obligors as aforesaid through insurance, guarantees, additional collateralization and reserves all of which were undisclosed, as aforesaid. 7 47. The note was not negotiable because it was no longer an unconditional promise to pay by the original borrower. The terms had changed, adding conditions to payment that were inherent in the "securitization process" that Wells Fargo fraudulently promoted. 48. Said "negotiation" of Defendant's note was in actuality the theft of his identity to hide the vast number of "toxic waste" mortgages, notes and obligations that the enterprise Wells Fargo was selling up through their "securitization" chain. 49. The end result of the false and misleading representations and material omissions of Wells Fargo as to the true nature of the mortgage loan actually being processed, which said Wells Fargo had actual knowledge was in direct conflict with the original Uniform Residential Loan Application, early TIL, and Defendant's stated intentions and directions to said Wells Fargo at the time of original application for the loan, fraudulently caused Defendant to execute predatory loan documents. Wells Fargo continued the false and misleading representations and material omissions when they failed to respond to Defendants' rescission notice or take action necessary to terminate the security interest and return any money, including that which may have passed on to a third party. 50. At no time whatsoever did Wells Fargo ever advise Defendants (nor, as far as Defendants can determine, any "investor" in certificates of mortgage-backed securities) that: a. the mortgage loan being processed was not in their best interest; b. that based on Defendant's position and lack of financial sophistication, the loan being processed was unconscionable, improvident and costly, while providing them little economic benefit; c. that the mortgage loan was an inter -temporal transaction (transaction where terms, risks, or provisions at the commencement of the transaction differ at a later time) on which Defendants were providing cover for Wells Fargo's illegal activities; d. that the originating "lender", that being Wells Fargo and/or Fannie Mae, had no intention of retaining ownership interest in the mortgage loan or fully servicing same and in fact may have and probably had already pre -sold the loan, prior to closing, to a third party mortgage aggregator pursuant to previously executed documentation 8 (Assumption and assignment Agreement, Pooling Services Agreement, etc.) all executed prior to Defendants' "loan Closing." e. that the mortgage loan was actually intended to be repeatedly sold and assigned to multiple third parties, including one or more mortgage aggregators and investment bankers, for the ultimate purpose of bundling the Defendants' mortgage with hundreds or perhaps thousands of others as part of a companion, support, or other tranche in connection with the creation of a REMIC security known as a Collateralized Mortgage Obligation ("CMO"), also known as a "mortgage-backed security" to be sold by a securities firm (and which in fact ended up as collateral for Asset-Backed Securities Certificates, created the same year as the closing); f. that the mortgage instrument and Promissory Note may be sold, transferred, or assigned separately to separate third parties so that the later "holder" of the Promissory Note may not be in privity with or have the legal right to foreclose in the event of default; and g. that in connection with the multiple down line resale and assignment of the mortgage and Promissory Note that assignees or purchasers of the Note may make "pay-downs" against the Note which may effect the true amount owed by the Defendant on the Note. 51. As a result of the closing and in connection therewith, Wells Fargo placed the Defendants into a pool of a sub-prime mortgage programs, with Wells Fargo intentionally misleading Defendants and the other borrowers and engaging in material omissions by failing to disclose to Defendants and other borrowers the fact that the nature of the mortgage loan applications had been materially changed without Defendants' knowledge or consent. 52. Wells Fargo was under numerous legal obligations as fiduciaries and had the responsibility for overseeing the purported loan consummation to insure that the consummation was legal, proper, and that Defendants received all legally required disclosures pursuant to the Truth-ln- Lending Act and RESPA both before and after the closing. 9 53. Defendants, not being in the consumer lending, mortgage broker, or residential loan business, reasonably relied upon Wells Fargo, to insure that the consumer credit transaction was legal, proper, and complied with all applicable laws and regulations. 54. Wells Fargo assigned or attempted to assign the Note and mortgage to parties who did not take these instruments in good faith or without notice that the instruments were invalid or that Defendants had timely exercised their right to cancel the mortgage. 55.0n or before February 3, 2010, Defendants timely notified Wells Fargo that they were exercising the right to rescind the loan transaction. See Exhibit "1" attached hereto. 56. Pursuant to the "Right of Rescission" provisions of the Truth and Lending Act ("TILA) including but not limited to, 15 U.S. C. § 1635 and rescission remedies of Regulation Z (Closed End Credit: § 226.23) Defendants rescinded the above referenced loan and have made demand for restitution, reformation and other equitable relief against the original lender referenced and any lender assignees (15 U.S.C. § 1641(c)). AFFIRMATIVE DEFENSES 57. Plaintiff has failed to state a claim upon which relief can be granted. Plaintiffs Complaint fails to state facts sufficient to constitute a cause of action against the Defendants for which relief can be granted. 58. Defendants timely elected to rescind the transaction with Wells Fargo, pursuant to their right of rescission, by sending the Notice to cancel to Plaintiff within three business days after closing on February 1, 2010. 59. When a consumer elects to rescind pursuant to the Truth -in -Lending Act, any security interest taken in connection with the transaction becomes void. 15 U.S.C. § 1635(b). 60. The mortgage that is the subject of this action was taken in connection with the transaction that Defendants have elected to rescind. 61. Since the mortgage is now void, this case is due to be dismissed. 62. Defendants invoke the Doctrine of Unclean Hands as the Defendants allege that the Plaintiff acted in a dishonest or fraudulent manner with respect to the dispute at issue in this case. 10 63. Defendant alleges that Plaintiffs Complaint and cause of action therein is barred by the Doctrine of Estoppel. 64. Plaintiff does not properly hold the mortgage it recorded and Plaintiff has failed to join the proper party with the rights of enforcement. Therefore, Plaintiff has failed to join indispensable parties. 65. Plaintiff is not the true owner of the claim sued upon, is not the real party in interest and is not shown to be authorized to bring this action. 66. Upon information and belief, the mortgage note has been paid in whole or in part by one or more undisclosed third party(ies) who, prior to or contemporaneously with the closing on the "loan", paid the originating lender (Wells Fargo) in exchange for certain unrecorded rights to the revenues arising out of the loan documents. 67. Upon information and belief and in connection with the matters the subject of the paragraph immediately above, Plaintiff has no financial interest in the note or mortgage. 68. Upon information and belief, the original note was destroyed or was transferred to a structured investment vehicle, which also has no interest in the note or mortgage or revenue thereunder. 69. Upon information and belief, the revenue stream deriving from the note and mortgage was eviscerated upon one or more assignments of the note and mortgage to third parties and parsing of obligations as part of the securitization process, some of whom were joined as co -obligors and co -obligees in connection with the closing. 70. To the extent that Wells Fargo has been paid on the underlying obligation or has no legal interest therein or in the note or mortgage, or does not have lawful possession of the note or mortgage, Plaintiffs allegations of possession and capacity to institute this lawsuit constitute a fraud upon the court. 71. Based upon one or more of the affirmative defenses set forth herein, the rescinded note and mortgage are void and Defendants are entitled to a dismissal of the Plaintiffs claim with prejudice. 72. The Plaintiff comes to court with unclean hands and is prohibited by reason thereof from obtaining the equitable relief it seeks from this Court. 11 73.The Plaintiffs unclean hands result from the improvident and predatory lending, failure to disclose the material terms of the loan transaction and failure to comply with Defendant's Notice of Rescission requirements that applies to this loan, all as described herein above. 74. This court should refuse Plaintiffs request for relief because the mortgage was timely rescinded and, thus, void. WHEREFORE, Defendants respectfully requests that Plaintiffs claim be dismissed, and that judgment be entered in favor of Defendants with attorney's fees and costs, and that Defendants be awarded any other relief that this Honorable Court deems appropriate. COUNTERCLAIMS. COUNT I: DECLARATORY AND INJUNCTVERELIEF 75. The Defendants reassert and allege, as their statement of facts, paragraphs 1 through 74 above as if set forth at length herein. 76. This is an action for declaratory and injunctive relief against the Plaintiff. 77. The Plaintiff has no right to pursue the claims it seeks because the Plaintiff received timely notice of Defendants election to cancel the mortgage. 78. Defendants are consumers within the meaning of the TILA. 15 U.S.C. § 1602(h). 79. Plaintiff is a creditor within the meaning of the TILA in that they regularly extend or offer to extend consumer credit. 15 U.S.C. § 1602(f). 80. The transaction between Plaintiff and Defendants is subject to a finance charge or is payable by a written agreement in more than four installment payments. 15 U.S.C. § 1602(f). 81.The credit extended to Defendants by Plaintiff is for personal, family, or household purposes. 15 U.S.C. § 1602(h). 82.As part of this consumer credit transaction, Plaintiff retained a security interest in 709 McCormick Road, Mechanicsburg, PA, which is Defendants' home. 83.The security interest was not created to finance the acquisition or initial construction of Defendants' home. 12 84. This consumer credit transaction was subject to Defendants' right of rescission. 15 U.S.C. § 1635 and Regulation Z § 226.23. 85. Any consumer "whose ownership interest is or will be subject to the security interest" has the right to rescind the transaction and to receive the disclosures". Reg. Z § 226.15(a)(1). 86.0n February 3, 2010, Defendant Elizabeth M. Dorris rescinded the transaction by sending notice of rescission to Plaintiff. 87. More than 20 calendar days have passed since Wells Fargo received Defendants' notice of rescission. 88. Plaintiff has failed to take any action necessary or appropriate to reflect the termination of any security interest created by the transaction, as required by 15 U.S.C. § 1635(b) and Regulation Z § 226.23(d)(2). 89. Plaintiff has failed to return to Defendants any money or property given by the Defendants to anyone, including Wells Fargo, as required by 15 U.S.C. § 1635(b) and Regulation Z § 226.23(d)(2). 90. As a result of the above mentioned violations of the Truth in Lending Act and Regulation Z, Plaintiff is liable to Defendants for: a. Rescission of the transaction pursuant to 15 U.S.C. § 1635(b). b. Termination of any security interest in Defendants' property created by the transaction pursuant to 15 U.S.C. § 1635. c. Return of any money or property given by the Defendants to anyone, including Wells Fargo, in connection with this transaction, under 15 U.S.C. § 1635(b). e. Statutory damages of $2000 for Plaintiff's failure to respond properly to Defendants' rescission notice pursuant to 15 U.S.C. § 1640(a)(2)(A). f. Forfeiture of retum of loan proceeds under 15 U.S.C. § 1635. g. Actual damages in an amount to be determined pursuant to 15 U.S.C. § 1640. h. Costs and a reasonable attorney fee in accordance with 15 U.S.C. § 1640. WHEREFORE, Defendants request the following relief: A. Declaratory and/or injunctive relief rescinding the mortgage on Defendants' home and declaring the mortgage void; 13 B. Order Plaintiff to take all action necessary to terminate any security interest in Defendantsproperty created under the transaction and that the Court declare all such security interests void, including but not limited to the mortgage related to the transaction of February 1, 2010; C. Order the return to the Defendants of any money or property given by the Defendants to anyone, including the Plaintiff, in connection with the transaction; D. Enjoin Plaintiff during the pendency of this action, and permanently thereafter, from instituting, prosecuting, or maintaining foreclosure proceedings on the Defendants' property, from recording any deeds or mortgages regarding the property or from otherwise taking any steps to deprive Defendants of ownership of that property; E. Award the Defendants statutory damages for Plaintiff's failure to respond properly to the Defendants' rescission notice, in the amount of twice the finance charge in connection with this transaction, but not less than $200 or more than $2,000 as provided under 15 U.S.C. § 1640(a); F. Order that, because the Plaintiff failed to respond to the Defendants' notice of rescission, the Defendants have no duty to tender, but in the alternative, if tender is required, determine the amount of the tender obligation in light of all of the Defendants' claims, and order the Plaintiff to accept tender on reasonable terms and over a reasonable period of time, provided Plaintiff establishes that it actually funded the account to pay off Defendants' previous mortgage loan; G. Award actual damages in an amount to be established at trial; H. Award the Defendants' costs and a reasonable attorney fee as provided under 15 U.S.C. § 1640(a); I. Award such other and further relief as the Court deems just and proper. COUNT II: COMPLAINT TO QUIET TITLE TO REAL PROPERTY 91. Paragraphs 1 through 74 above are incorporated herein as if set forth at length herein. 92. Defendant has sent or has caused to be sent a timely Notice of Rescission to Plaintiff, which the said Plaintiff has failed and refused to answer. 93.The real party in interest on the lender side may be the owner of the asset backed security issued by the SPV, the insurer through some claim of equitable interest, or the Federal government through the United States Department of the Treasury or the Federal Reserve. The security is a "securitized" bond deriving its value from the underlying mortgages of which the subject mortgage is one. Thus Defendants are entitled to quiet title against Wells Fargo, clearing title of the purported subject mortgage encumbrance. 14 94. Defendants are informed and believe and thereon allege that, at all times herein mentioned, the claim of Wells Fargo is without any right whatsoever, and said Wells Fargo has no legal or equitable right, claim, or interest in said property. 95. Defendants therefore seek a declaration that the title to the subject property is vested in Defendants alone and that Wells Fargo be declared to have no estate, right, title or interest in the subject property and that said Wells Fargo be forever enjoined from asserting any estate, right, title or interest in the subject property adverse to Defendants herein. WHEREFORE, in this Count, Defendants pray this Court will enter judgment against Plaintiff as follows: A. For an order compelling said Wells Fargo to transfer or release legal title and alleged encumbrances thereon and possession of the subject property to Defendants herein; B. For a declaration and determination that Defendants are the rightful holders of title to the property and that Wells Fargo be declared to have no estate, right, title or interest in said property; C. For a judgment forever enjoining said Wells Fargo from claiming any estate, right, title or interest in the subject property; D. For costs of suit herein incurred and statutory damages for failing to respond to Defendants' Notice of Rescission; E. For such other and further relief as the court may deem proper COUNT 111: VIOLATIONS OF UNFAIR TRADE PRACTICE ACT 96. Paragraphs 1 through 74 above are incorporated herein as if set forth at length herein. 97.The actions of Plaintiff alleged hereinabove constitute a transaction, practice or course of business which operated as a fraud or deceit upon Defendants. 98. The acts, conduct or activity of Plaintiff described hereinabove constitute a violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 P.S. Section 201-2 et seq., ("Act") in that Plaintiff: failed to comply with the Defendant's rescission rights; failed to comply with express statements and assurances; failed to acknowledge and act promptly upon oral or written communication with respect to Defendants' dispute of the loan transaction; and failed to provide applicable mortgage servicing protocols. 99. Plaintiffs activities violated the Act in the following particulars: 15 a. The Plaintiff is claiming, attempting and threatening to enforce this consumer mortgage debt by a bogus action when the Plaintiff knows that it does not have standing and the right to pursue the action does not exist. b. Plaintiff does not have a legal right to pursue this action because Defendant rescinded the mortgage and the mortgage is void. c. Plaintiff has failed to respond to Defendant's Notice of Rescission or otherwise comply with the Pooling and Servicing or trust Agreement that controls and applies to the subject mortgage loan. d. Plaintiff is not the true current owner of the note because Plaintiff does not know the true holder in due course of the note after Wells Fargo sold it and, further, it is a fraud and violation of the Pennsylvania UDAP to falsely claim to be a lawful or nominee for the true holder in due course in order to collect a note for a party actually unknown to Plaintiff. e. Plaintiff took advantage of Defendants and wrongfully manipulated and controlled the mortgage financing unfairly to disadvantage Defendants, who were kept in the dark and deprived of a full and complete understanding of the mortgage credit transaction upon when they entered into, and, that Plaintiff had a duty to divulge the true nature of the mortgage financing transaction, including that the note would be sold to parties unknown and perhaps unascertainable and that Wells Fargo would profit from the origination of Defendant's note immediately upon Defendant's signing of the note which Wells Fargo originated. g. By creating a mortgage backed security or collateral backed obligation of the undisclosed sale, securitization, and transfer of Defendant's mortgage note and contractual obligation and without consent, or even disclosure or notice of the intent to securitize and bundle Defendant's identity in the creation of a securitized equity or collateral based obligation, effected a conversion by fraud of the identity and other intangible rights of Defendant in this transaction. Defendants allege that they made payments to Plaintiff in reliance on the aforesaid misrepresentations of fact concealing the status of their rescission, the actual sale or transfers of the legal and equitable interests in Defendant's note to another party, and were thereby injured, by suffering actual monetary losses. h. Plaintiff has engaged in unfair and deceptive trade practices with their sale or transfer of securities (mortgage notes) into securitized bundles, and also in connection with concealing the true nature of the transactions involved in mortgage note 'lending" or "origination" as defined under the U.C.C. and 16 thereby swindled these Defendants of many thousands of dollars above the actual value of the note issued and signed by Defendant. The securitization of Defendant's mortgage note intended for sale on public securities markets by Wells Fargo is a deceptive and misleading devise, scheme, and artifice to defraud Defendant. 100. By failing to act upon and process Defendants notice to cancel and by failing to fully and fairly disclose all material facts regarding Defendant's loan transaction, Plaintiff has engaged in unfair and deceptive acts or practices within the meaning of the Act, 73 P.S. Section 201-1 et seq. and Defendants are entitled to recover treble damages. 101. Plaintiff continues to claim, attempt, and threaten to enforce the loan transaction when the Plaintiff knows that such conduct is in bad faith and that Plaintiff in predatory lending, charged and collected money from defendants that they did not owe; withheld the true nature of the transaction and securitization of the loan, forced defendants into deepening indebtedness and then failed to meet the contractual and statutory conditions regarding Defendants' right to cancel before filing this action to foreclose against Defendants' home. 102. As a result of the Plaintiffs actions and engagement in predatory lending and failure to properly rescind this mortgage loan instead of filing this action, Defendants have been damaged and Defendants seek to recover their actual and statutory damages from Plaintiff under 73 P.S. Section 201-1 et seq. WHEREFORE, Defendants demand the Plaintiff's complaint be dismissed with prejudice, for an award of TREBLE DAMAGES in defendant's favor and against the plaintiff for their actual or statutory damages whichever is greater and for their attorney's fees and costs and for all other relief to which this Court finds Defendant entitled pursuant to 73 P.S. Section 201-9.2. COUNT IV: BREACH OF CONTRACT 103. Paragraphs 1 through 74 above are incorporated herein as if set forth at length herein. 104. The conduct, practices and activities of Plaintiff described herein constitute a material breach of its implied duty to act in good faith and fair dealing and, further, 17 constitute a material breach of the representations, statements and undertakings set forth hereinabove, and made expressly or implicitly a part of said agreement for which breach Defendant is entitled to recover damages. 105. Plaintiff has breached its agreement and its duty to exercise good faith to Defendant's detriment. WHEREFORE, defendant requests judgment against Plaintiff in an amount not yet quantified but to be proven at trial and such other amounts to be proven at trial, and for costs and attorneys' fees; that the Court find that the transactions the subject of this action are illegal and are deemed void; that the action which was instituted be deemed and declared illegal and void and that further proceedings in connection with this action be enjoined; and for any other relief which is just and proper. COUNT V: FRAUDULENT MISREPRESENTATION 106. Paragraphs 1 through 74 above are incorporated herein as if set forth at length herein. 107. Wells Fargo knowingly and intentionally concealed material information from Defendants which is required by Federal Statutes and Regulations to be disclosed to the Defendant both before and at the closing. 108. Wells Fargo knowingly and intentionally concealed material information about Defendants' election to cancel the loan and the reason Wells Fargo did not act upon and process Defendants' timely notice to cancel the loan transaction. 109. Wells Fargo also materially misrepresented material information to the Defendants with full knowledge by Wells Fargo that their affirmative representations were false, fraudulent, and misrepresented the truth at the time said representations were made. 110. Under the circumstances, the material omissions and material misrepresentations of the Wells Fargo were malicious. 111. Defendants, not being an investment banker, securities dealer, mortgage lender, mortgage broker, or mortgage lender, reasonably relied upon the representations of Wells Fargo in agreeing to execute the mortgage loan documents. 18 112. Had Defendants known of the falsity of Wells Fargo's representations, they would not have entered into the transactions the subject of this action. 113. Wells Fargo's material omissions and material misrepresentations constitute fraud in the inducement and Wells Fargo and/or Plaintiff is liable to Defendant for the following, which Defendant demands as relief. WHEREFORE, defendant requests judgment against Plaintiff as follows: A. rescission of the mortgage loan transactions; B. termination of the mortgage and security interest in the property the subject of the mortgage loan documents created in the transaction; C. return of any money or property paid by the Defendant including all payments made in connection with the transactions; D. an amount of money equal to treble the finance charge in connection with the transactions; E. relinquishment of the right to retain any proceeds; and F. actual damages in an amount to be determined at trial, including attorneys' fees. DEMAND FOR JURY TRIAL Defendants demands trial by jury of all matters so triable as a matter of right. 19 Respectfully submitted, Stephbn K. Portko, Esquire #34538 101 South U.S. Route 15 Dillsburg, PA 17019 (717)432-9706 Attorneys for Defendants Wells Fargo Bank, N.A. 2001 Killebrew Drve Minnesapolis MN 55425 Attention: Karen Iblings Dear Karen: • Elizabeth M Dorris . 709 McCormickRoad Mechanicsburg, Pa 17055 Phone: 717-512-9700 Feb 2, 2010 RE: Notice of Right to Cancel' Aspera conversation with Sharon Eliker we have decided to exercise are right to cancel the refinance as stated m the the Right -to Cancel Notice that came with the documents. Please aclatowledge as we found out we ctm receive a better loan and interest rate from the VA as my husband is a disabled Vet. Find enclosed the cancellation form. Thank for your co-operation in this matter. Elizabeth Dorris 11 1 1111 115, 11111 1 ORI (11 TA. V USE LY ', ' ' ,' ,• , . PO ZP Ck Day or Ceavery Postage — Bettedvlete ter i r Return Pv•cat Fee Date Actep le . Day Yew e uted t V Of !l+tp,y . , , Di cF , lime Accepted 7 Am , ,,, , 0/ d r,.1 2 . end On i . 0 Total stage Fees & Sf" Fiat Pate 0 prWeM I4.,s, am At pha Co ij, C exre 01 C t q p a ce itials 411'01 'ilk FROM.: (PEASE PAINT, P;10sE '2 '7 1 JDMA4O yfiLl comicie AtAmess-,64,42c; 94, ;5, EXPRESS MAIL • Customer Label 11-3„ Marrt t Post() To Addresset. DELIVERY (POSTAL USE ONLY • • z . mployvo Signatli el Aut. I a. Day ,42 Li i /A lwery Atiortag Mo .. C Solt 0 Am UP I Sg-t elDIy •MO. ,. ay 0 Am rJ PM ,rnployee S,ignatoge , ... FOR PICKUP OR TRACKING isit www.usps.com I -800-222-1811 PAYMENT EN ACCOUNT Express MO Corperpte Acct o • • Federal Agency Acct. No. ar''' Postal S!'nfieft Acct IJp O OEUVI�Y 44 „Icte tebEetturs p4D:eita;;T;.&t, *or+ " dm, tey gat 61 de, ii#4411. TO: IrVEASS ppoln , 'tagmy. I/ /4 ptiv Ad-Apofir, mfr. IS frA/16:0 ZIP 4, 4 W.S,ACTOPOSSES-Offt. CO Tkpr OSS POP, eOSSISS POSTL AOODEs4 / T1 INTERNATIONAL DEAlltikDNIt, SWINE OtioNTRY NAME BELOW. U.S. Postal Service"'Delivery ConfirmatiorrRdoeipt Postage and Delivery Confirmation fees must be paid before mailing. 03 Aril* Sentjtc (to crOatilfil 03 I= WpiL LS A -P4 ° 4A tet'iti-Te 4r Cia.41 t A6.01. KI.84/7/1Cia Og. ca /17 HY4gL1ri r- @ cr:la 1ZHEcr OAETWAL 11SE mum rzrLapiodty Malr Sande° E:3 Ci Flrat-Class Mae parcel POSTAL CUSTOMER: Keep this receipt. For Inquiries: Access Internet web site at www.usps. cam to or call 1-800-222-1811 Package Services parcel PS Forth 152; Mei 2002 • —Weir. Rtrinitee) Wells Fargo Bank 2001 Killebrew Drive Minneapolis, MN. 55225 Att: Karen Iblings or Associates Dear Karen or Somebody: iald and Elizabeth Dorris 09 McCormick Road chanicsburg, PA 17055 Feb. 7, 2010 RE: LOAN RESCISION ON 709 McCORMICK ROAD MECHANICSB'URG, PA On Feb 4, you received our right to rescind the loan we signed on Feb.1, 2010. I checked to make sure the overnight from the USPS was delivered on their website. I had tried calling your office several times without results. So I am sending this priority letter confident this loan has been rescinded as we are attempting to get a VA loan as I explained with better terms and a lower rate. I was surprised at closing that so many things changed at closing and the monthly payment amount ended up being different than expected. Please we need verification that this loan has been rescinded before we proceed. Thank you, 44.4 Elizabeth Dorris Karen Iblings 2001 Killebrew DR Minneapolis, MN 55225 Att: Karen Iblings Dear Karen: Elizabeth Dorris 709 McCormick Road Mechanicsburg, PA 17055 - Phone: 717-512-9700 May 17th 2010 RE: loan number 0207572967 and loan number 0265922443 Confusion still abounds as to why our loan number 0265922443 was not rescinded according to our written timely request. We had secured a VA loan at a better rate and terms and that is why I called and confirmed with you the required procedure to rescind this loan. We are still waiting on a response concerning this matter. Please inform us as to the status of these loans. ASAP. Sincerely 4.412r4 DP4Ace beth Donis U.S. Postal Servicembelivery C rmatiorrReceipt Postage and Delivery Confirmation fees must be paid before mailing. Arkle Sent To-. (bate cempiettil by miter) 148;,/,. S k 6L A PO ;0&41-C' p 4 .4,0iiu • 8/1”. 1114 POSTAL CUSTOMEit Keep this receipt For inquiries: Access Internet web site at wwwusp5.com0 or calk 1-800222-1811 LliEDJOHEIPOSTAL -ITV Priority MarSeivice I:First-Class MaIrparcel CiPackage Services parcel (Srp Reverse) PS Form 152, May 2052 F)( Wells Fargo Bank, NA 2001 Killebrew Dr Minneapolis, MN 55425 Attention: Karen Iblings Dear Karen: Elizabeth Dorris 709 McCormick Road Mechanicsburg, Pa 17055 Phone: 717-512-9700 June 10, 2010 RE: Mortgage Right to Cancel Find enclosed letter dated Feb. 2, 2010 as well as a letter I am sending today to Mariana Oganesyan requesting the original note payoff for loan number 0207572967. I had sent in the right to cancel notice no later than February 4, 2010 as requested and discovered the new loan had gone through. I want to know if this is just the same loan and you just changed the loan number or did you in fact not cancel the loan and this is a new loan. I am quite confused. Because I did not receive the original note back as I requested and was promised I would receive from your satisfaction department. The same thing occurred when we had a loan with Washington Mutual and my brother lend us the money to pay it off. I never received the satisfaction note and it was a problem. I had been told by a conversation I had with a Sharon Eliker, the one who originated the second loan, that the loan would be rescinded and we still have the same loan. So we are paying a loan which shows a lower rate the loan number is different and I am assuming the 2"d loan was never rescinded. If so I am requesting from you as well the original promissory note back on the 1loan_ My brother gave me both the mortgage and original paid off note on the loan I had with him when I paid him off. What is the deal with Wells Fargo? Can't they do the same? Sincerely, Elizabeth Dorris %.0 D.S. Postai ServiceDelivery Confirmatiorf Receipt I:3 Postage and Dellvety Confirmation fees must be paid before mailing. rr rr- LU L2:3 1-, •• rzrJ nJ R27, 2:) ?- Archl Scni To; (tn be cemplotod by mailer) rn Postmark Here PS Form 152, May 2022 1.4 fav .61,ki POSTAL CUSTOMER: Keep this recelpt For Inquiries: Access internal web site at www.usps,com o or call 1-800-292-1811 C1ECK ONE (POSTAL USE ONO!) OPrlority AtarService DFirst-Class Mae parcel 1:1Pacicage Semites parcel (See Reverse) VERIFICATION 1, Elizabeth Dorris, hereby acknowledge that I am a Defendant in the foregoing pleading, that I have read the foregoing, and the facts stated therein are true and correct to the best of my knowledge, information and belief. I understand that any false statements herein are made subject to penalties of 18 Pa.C.S. Section 4904, relating to unsworn falsification to authorities. DATE: ff/i;; ie208 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing Answer with New Matter and Counterclaims was provided by U.S. Mail, postage prepaid, first class, to the following: John Michael Kolesnik, Esquire PHELAN HALLINAN, LLP 1617 JFK Boulevard, Suite 1400 One Penn Center Plaza Philadelphia, PA 19103 Exhibit C Prepared By: KAREN ISLINGS WELLS FARGO BANK, N.A. P.O. BOX 1629 MINNEAPOLIS, MN 55440-1629 Rcurrn To: FINAL DOCUMENTS X2599-024 405 SW 5TE STREET DES MOINES, IA 50309-4600 Parcel Number: t-ia-ti-oa9a-6L3 Premises: 709 14CCORMICK ROAD M2CBANICSBURG, PA 17055 (Spree Abore'ibb Lane For Recording Data) MORTGAGE DEFINITIONS Words used in multiple sections of this document are defined below and other words are defined in Sections 3, 11, 13, 18, 20 and 21. Certain rules regarding the usage of words used in this document are also provided in Section 16. (A) "Security Instrument" means this document, which is dated FEBRUARY 1, 2010 together with all Riders to this document. (B) "Borrower" is DONALD D. DORRIS AND ELIZABETH 11. DORRIS Security ➢nstrument. VIYIP Welts Kluwer Femnerl Sonnet' NMF1.13039 4PAO91 RAnr 112003 t.YANIA • N{o.1F. GU IN n m 3039 1,01 PAI 090.400 Pge1of17 u (C) "Lender" is WELLS FARGO BANE, N.A. Lender is a National Association organized and existing under the laws of THE UNITED STATES or AMERICA Leader's address is P. O. BOX 5137 DIM MOINES, IA 50306-5137 Leudet is the mortgagee under this Security Instrument. (D) "Note".means the pmmissory note signed by Borrower and dated FEBRUARY 1, 2010 The Note states that Borrower owes Lender THREE HUNDRED SIXTY-SEVEN THOUSAND EIGHT HUNDRED AND NO/100 Dollars (U.S. $"**367,800.00 ) plus interest Borrower has promised to pay this debt in regular Periodic Payments and to pay the debt in full not tater than FEBRUARY 1, 2040 (E) "Property" means the property that is described below under the heading "Transfer of Rights in the Property.' h (F) "Loan" loJ1W n" means the debt evidenced by thc Note. plus interest, any prepayment charges and late charges due under the Note, and all stuns due under this Security Instrument, plus interest. (G) "Riders" means all Riders to this Security Instrument that are executed by Borrower. The following Riders are to he executed by Borrower [chick box as applicable!: Adjustable Rate Rider Balloon Rider VA Rider Corxlnminiunt Rider 0 Second Horne Rider Plarmed Unit Development Rider —11-4 Family Rider Biweeldy Payment Rider 1 Other(s) [.specify) (11) "Applicable Law" means and controlling applicable federal, state and local statutes, regulations, ordinances and administrative rules and orders (that have the effect of law) as well as all applicable final. non -appealable judicial opinions. (I) "Community Association Dues, Fees, and Assessments" means all dues, fees, assessments and other charges that are imposed on Borrower or the Property by a condominium association, homeowners association or similar organization. (J) "Electronic Funds Transfer" means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic terminal, telephonic iestrtuneat, computer, or magnetic tape so as to under, instruct, or authorize a financial institution to debit or credit an account. Such term includes, but is not limited to, point -of --sale transfers, automated teller machine transactions, transfers initiated by telephone, wire transfers, and automated clearinghouse transfers. (K) "Escrow Items" means those items that are described in Section 3. (L) "Miseellaneons Proceeds" mcanc any cumperrsatiuu, settlement, award of damages, or proceeds paid by any third party (other than insurance proceeds paid under the coverages described in Section 5) for: (i) damage to, or destitution uf, the Property: (ii) condemnation or other taking of all or any pari of thc PFMNNNSYLVANIA.S1119r y i FU-FanndF ie MeblUNIFORMLM or Mar UNIFORM INSTRUMENT VR Wolter RImmIr rg,11 iN Serves' IAiVNi: Form 3039 IA71 P8►PA 10004.00 Pogo 1 of 17 Property; (iii) conveyance in lieu of condemnation; or (iv) misrepresentations of, or omissions as to, the value and/or condition of the Property. (M) "Mortgage Insurance" means insurance protecting Lender against the nonpayment of, or default on, the Loan. (N) "Periodic Payment" means the regularly scheduled amount due for (i) principal and interest under the Note, plus (ii) any amounts under Section 3 of this Security Instrument. (0) "RESPA" means the Real Estate Settlement Procedures Act (12 U.S.C. Section 2601 et seq.) and its implementing regulation, Regulation X (24 C.F.R. Part 3500), as they might be amended from time to time, or any additional or successor legislation or regulation that governs the same subject matter. As used in this Security Instrument, "RESPA" refers to all requirements and restrictions that are imposed in regard to a "federally related mortgage loan" even if the Loan does not qualify as a "federally related mortgage loan" under RESPA. (P) "Successor in Interest of Borrower" means any party that has taken title to the Property, whether or not that party has assumed Borrower's obligations under the Note and/or this Security Instrument TRANSFER OF RIGHTS IN THE PROPERTY This Security Instrument secures to Lender: (i) the repayment of the Loan, and all renewals, extensions and modifications of the Note; and (ii) the performance of Borrower's covenants and agreements under this Security Instrument and the Note. For this purpose, Borrower does hereby mortgage, grant and convey to Lender the following described property located in the COUNTY [Type of Recording Jurisdiction] of CUMBERLAND [Name of Recording Jurisdiction]: LEGAL DESCRIPTION IS ATTACHED HERETO AS SCHEDULE "A" AND MADE A PART HEREOF. which currently has the address of 709 MCCORMICX ROAD MECHANICSBURG [City], Pennsylvania 17055 ("Property Address"): [Street] [Zip Code] PENNSVLVANIA-Single Family -Fannie Mee/Freddie Mac UNIFORM INSTRUMENT VMP® Waiters Kluwer Financial Services lolls Form 3039 1/01 8(PAI l0a04).00 Page 3 of 17 r TOGETHER WITH all the improvements now or hereafter erected on the property, and all easements, appurtenances, and fixtures now or hereafter a part of the property. All replacements and additions shall also be covered by this Security Instrument. All of the foregoing is referred to in this Security Instrument as the "Property." BORROWER COVENANTS that Borrower is lawfully seised of the estate hereby conveyed and has the right to mortgage, grant and convey the Property and that the Property is unencumbered, except for encumbrances of record. Borrower warrants and will defend generally the title to the Property against all claims and demands, subject to any encumbrances of record. THIS SECURITY INSTRUMENT combines uniform covenants for national use and non-uniform covenants with limited variations by jurisdiction to constitute a uniform security instrument covering real property. UNIFORM COVENANTS. Borrower and Lender covenant and agree as follows: 1. Payment of Principal, Interest, Escrow Items, Prepayment Charges, and Late Charges. Borrower shall pay when due the principal of, and interest on, the debt evidenced by the Note and any prepayment charges and late charges due under the Note. Borrower shall also pay funds for Escrow Items pursuant to Section 3. Payments due under the Note and this Security Instrument shall be made in U.S. currency. However, if any check or other instrument received by Lender as payment under the Note or this Security Instrument is returned to Lender unpaid, Lender may require that any or all subsequent payments due under the Note and this Security Instrument be made in one or more of the following forms, as selected by Lender: (a) cash; (b) money order, (c) certified check, bank check, treasurer's check or cashier's check, provided any such check is drawn upon an institution whose deposits are insured by a federal agency, instrumentality, or entity; or (d) Electronic Funds Transfer. Payments are deemed received by Lender when received at the location designated in the Note or at such other location as may be designated by Lender in accordance with the notice provisions in Section 15. Lender may return any payment or partial payment if the payment or partial payments are insufficient to bring the Loan current. Lender may accept any payment or partial payment insufficient to bring the Loan current, without waiver of any rights hereunder or prejudice to its rights to refuse such payment or partial payments in the future, but Lender is not obligated to apply such payments at the time such payments are accepted. If each Periodic Payment is applied as of its scheduled due date, then Lender need not pay interest on unapplied funds. Lender may hold such unapplied funds until Borrower makes payment to bring the Loan current. If Borrower does not do so within a reasonable period of time, Lender shall either apply such funds or return them to Borrower. If not applied earlier, such funds will be applied to the outstanding principal balance under the Note immediately prior to foreclosure. No offset or claim which Borrower might have now or in the future against Lender shall relieve Borrower from making payments due under the Note and this Security Instrument or performing the covenants and agreements secured by this Security Instrument. 2. Application of Payments or Proceeds. Except as otherwise described in this Section 2, all payments accepted and applied by Lender shall be applied in the following order of priority: (a) interest due under the Note; (b) principal due under the Note; (c) amounts due under Section 3. Such payments PENNSYLVANIA -Single Family -Fannie Mae/Freddie Mac UNIFORM INSTRUMENT VMPta writers Kluwer Financial Services Form 3039 1101 MP81PA1 108041.00 �j Pepe 4 of 17 shall be applied to each Periodic Payment in the order in which it became due. Any remaining amounts shall be applied first to late charges, second to any other amounts due under this Security Instrument, and then to reduce the principal balance of the Note. If Lender receives a payment from Borrower for a delinquent Periodic Payment which includes a sufficient amount to pay any late charge due, the payment may be applied to the delinquent payment and the late charge. If more than one Periodic Payment is outstanding, Lender may apply any payment received from Borrower to the repayment of the Periodic Payments if, and to the extent that, each payment can be paid in full. To the extent that any excess exists after the payment is applied to the full payment of one or more Periodic Payments, such excess may be applied to any late charges due. Voluntary prepayments shall be applied first to any prepayment charges and then as described in the Note. Any application of payments, insurance proceeds, or Miscellaneous Proceeds to principal due under the Note shall not extend or postpone the due date, or change the amount, of the Periodic Payments. 3. Funds for Escrow Items. Borrower shall pay to Lender on the day Periodic Payments are due under the Note, until the Note is paid in full, a sum (the "Funds") to provide for payment of amounts due for: (a) taxes and assessments and other items which can attain priority over this Security Instrument as a lien or encumbrance on the Property; (b) leasehold payments or ground rents on the Property, if any; (c) premiums for any and all insurance required by Lender under Section 5; and (d) Mortgage Insurance premiums, if any, or any sums payable by Borrower to Lender in lieu of the payment of Mortgage Insurance premiums in accordance with the provisions of Section 10. These items are called "Escrow Items." At origination or at any time during the term of the Loan, Lender may require that Community Association Dues, Fees, and Assessments, if any, be escrowed by Borrower, and such dues, fees and assessments shall be an Escrow Item. Borrower shall promptly furnish to Lender all notices of amounts to be paid under this Section. Borrower shall pay Lender the Funds for Escrow Items unless Lender waives Borrower's obligation to pay the Funds for any or all Escrow Items. Lender may waive Borrower's obligation to pay to Lender Funds for any or all Escrow Items at any time. Any such waiver may only be in writing. In the event of such waiver, Borrower shall pay directly, when and where payable, the amounts due for any Escrow Items for which payment of Funds has been waived by Lender and, if Lender requires, shall furnish to Lender receipts evidencing such payment within such time period as Lender may require. Borrower's obligation to make such payments and to provide receipts shall for all purposes be deemed to be a covenant and agreement contained in this Security Instrument, as the phrase "covenant and agreement" is used in Section 9. If Borrower is obligated to pay Escrow Items directly, pursuant to a waiver, and Borrower fails to pay the amount due for an Escrow Item, Lender may exercise its rights under Section 9 and pay such amount and Borrower shall then be obligated under Section 9 to repay to Lender any such amount. Lender may revoke the waiver as to any or all Escrow Items at any tune by a notice given in accordance with Section 15 and, upon such revocation, Borrower shall pay to Lender all Funds, and in such amounts, that are then required under this Section 3. Lender may, at any time, collect and hold Funds in an amount (a) sufficient to permit Lender to apply the Funds at the time specified under RESPA, and (b) not to exceed the maximum amount a lender can require under RESPA. Lender shall estimate the amount of Funds due on the basis of current data and PENrySYLVANIA-5ingle FamllyFannie Mae/Fred/ie Mac UNIFORM INSTRUMENT VMP99 Woken Kluwer Financial Services rj�� Initials•,. /r7 Fc m 3039 1/01 P6IPA1 108041-00 raga 5of17 reasonable estimates of expenditures of future Escrow Items or otherwise in accordance with Applicable Law. The Funds shall be held in an institution whose deposits are insured by a federal agency, instrumentality, or entity (including Lender, if Lender is an institution whose deposits are so insured) or in any Federal Home Loan Bank. Lender shall apply the Funds to pay the Escrow Items no later than the time specified under RESPA. Lender shall not charge Borrower for holding and applying the Funds, annually analyzing the escrow account, or verifying the Escrow Items, unless Lender pays Borrower interest on the Funds and Applicable Law permits Lender to make such a charge. Unless an agreement is made in writing or Applicable Law requires interest to be paid on the Funds, Lender shall not be required to pay Borrower any interest or earnings on the Funds. Borrower and Lender can agree in writing, however, that interest shall be paid on the Funds. Lender shall give to Borrower, without charge, an annual accounting of the Funds as required by RESPA. If there is a surplus of Funds held in escrow, as defined under RESPA, Lender shall account to Borrower for the excess funds in accordance with RESPA. If there is a shortage of Funds held in escrow, as defined under RESPA, Lender shall notify Borrower as required by RESPA, and Borrower shall pay to Lender the amount necessary to make up the shortage in accordance with RESPA, but in no more than 12 monthly payments. If there is a deficiency of Funds held in escrow, as defined under RESPA, Lender shall notify Borrower as required by RESPA, and Borrower shall pay to Lender the amount necessary to make up the deficiency in accordance with RESPA, but in no more than 12 monthly payments. Upon payment in full of all sums secured by this Security Instrument, Lender shall promptly refund to Borrower any Funds held by Lender. 4. Charges; Liens. Borrower shall pay all taxes, assessments, charges, fines, and impositions attributable to the Property which can attain priority over this Security Instrument, leasehold payments or ground rents on the Property, if any, and Community Association Dues, Fees, and Assessments, if any. To the extent that these items are Escrow Items, Borrower shall pay them in the manner provided in Section 3. Borrower shall promptly discharge any lien which has priority over this Security Instrument unless Borrower. (a) agrees in writing to the payment of the obligation secured by the lien in a manner acceptable to Lender, but only so long as Borrower is performing such agreement; (b) contests the lien in good faith by, or defends against enforcement of the lien in, legal proceedings which in Lender's opinion operate to prevent the enforcement of the lien while those proceedings are pending, but only until such proceedings are concluded; or (c) secures from the holder of the lien an agreement satisfactory to Lender subordinating the lien to this Security instrument. If Lender determines that any'part of the Property is subject to a lien which can attain priority over this Security Instrument, Lender may give Borrower a notice identifying the lien. Within 10 days of the date on which that notice is given, Borrower shall satisfy the lien or take one or more of the actions set forth above in this Section 4. Lender may require Borrower to pay a one-time charge for a real estate tax verification and/or reporting service used by Lender in connection with this Loan. 5. Property Insurance. Borrower shall keep the improvements now existing or hereafter erected on the Property insured against loss by fire, hazards included within the term "extended coverage," and any PENNSYLVANIA -Single Family -Fannie Nlee/Frad6a Mac UNIFORM INSTRUMENT Form 3039 1101 VMP v P6;PAI (08041.00 Wolters Kluwer Financial Services 1, i •. Page 6 of 17 other hazards including, but not limited to, earthquakes and floods, for which Lender requires insurance. This insurance shall be maintained in the amounts (including deductible levels) and for the periods that Lender requires. What Lender requires pursuant to the preceding sentences can change during the term of the Loan. The insurance carrier providing the insurance shall be chosen by Borrower subject to Lender's right to disapprove Borrower's choice, which right shall not be exercised unreasonably. Lender may require Borrower to pay, in connection with this Loan, either: (a) a one-time charge for flood zone determination, certification and tracking services; or (b) a one-time charge for flood zone determination and certification services and subsequent charges each time remappings or similar changes occur which reasonably might affect such determination or certification. Borrower shall also be responsible for the payment of any fees imposed by the Federal Emergency Management Agency in connection with the review of any flood zone determination resulting from an objection by Borrower. If Borrower fails to maintain any of the coverages described above, Lender may obtain insurance coverage, at Lender's option and Borrower's expense. Lender is under no obligation to. purchase any particular type or amount of coverage. Therefore, such coverage shall cover Lender, but might or might not protect Borrower, Borrower's equity in the Property, or the contents of the Property, against any risk, hazard or liability and might provide greater or lesser coverage than was previously in effect. Borrower acknowledges that the cost of the insurance coverage so obtained might significantly exceed the cost of insurance that Borrower could have obtained. Any amounts disbursed by Lender under this Section 5 shall become additional debt of Borrower secured by this Security Instrument. These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable, with such interest, upon notice from Lender to Borrower requesting payment. All insurance policies required by Lender and renewals of such policies shall be subject to Lender's right to disapprove such policies, shall include a standard mortgage clause, and shall name Lender as mortgagee and/or as an additional loss payee. Lender shall have the right to hold the policies and renewal certificates. If Lender requires, Borrower shall promptly give to Lender all receipts of paid premiums and renewal notices. If Borrower obtains any form of insurance coverage, not otherwise required by Lender, for damage to, or destruction of, the Property, such policy shall include a standard mortgage clause and shall name Lender as mortgagee and/or as an additional loss payee. In the event of loss, Borrower shall give prompt notice to the insurance carrier and Lender. Lender may make proof of loss if not made promptly by Borrower. Unless Lender and Borrower otherwise agree in writing, any insurance proceeds, whether or not the underlying insurance was required by Lender, shall be applied to restoration or repair of the Property, if the restoration or repair is economically feasible and Lender's security is not lessened. During such repair arid restoration period, Lender shall have the right to hold such insurance proceeds until Lender has had an opportunity to inspect such Property to ensure the work has been completed to Lender's satisfaction, provided that such inspection shall be undertaken promptly. Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed. Unless an agreement is made in writing or Applicable Law requires interest to be paid on such insurance proceeds, Lender shall not be required to pay Borrower any interest or earnings on such proceeds. Fees for public adjusters, or other third parties, retained by Borrower shall not be paid out of the insurance proceeds and shall be the sole obligation of Borrower. If PENNSYLVANIA-SIngle Family -Fannie Meter reddie Mac UNIFORM INSTRUMENT VMP® Wolters Kluwer Financial Services Form 3039 1,01 Pf3IRA) 108041.00 Page 7 o1 17 the restoration or repair is not economically feasible or Lender's security would be lessened, the insurance proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any, paid to Borrower. Such insurance proceeds shall be applied in the order provided for in Section 2. If Borrower abandons the Property, Lender may file, negotiate and settle any available insurance claim and related matters. If Borrower does not respond within 30 days to a notice from Lender that the insurance carrier has offered to settle a claim, then Lender may negotiate and settle the claim. The 30 -day period will begin when the notice is given. In either event, or if Lender acquires the Property under Section 22 or otherwise, Borrower hereby assigns to Lender (a) Borrower's rights to any insurance proceeds in an amount not to exceed the amounts unpaid under the Note or this Security Instrument, and (b) any other of Borrower's rights (other than the right to any refund of unearned premiums paid by Borrower) under all insurance policies covering the Properly, insofar as such rights are applicable to the coverage of the Property. Lender may use the insurance proceeds either to repair or restore the Property or to pay amounts unpaid under the Note or this Security Instrument, whether or not then due. 6. Occupancy. Borrower shall occupy, establish, and use the Property as Borrower's principal residence within 60 days after the execution of this Security Instrument and shall continue to occupy the Property as Borrower's principal residence for at least one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent shall not be unreasonably withheld, or unless extenuating circumstances exist which are beyond Borrower's control. 7. Preservation, Maintenance and Protection of the Property; Inspections. Borrower shall not destroy, damage or impair the Property, allow the Property to deteriorate or commit waste on the Property. Whether or not Borrower is residing in the Property, Borrower shall maintain the Property in order to prevent the Property from deteriorating or decreasing in value due to its condition. Unless it is determined pursuant to Section 5 that repair or restoration is not economically feasible, Borrower shall promptly repair the Property if damaged to avoid further deterioration or damage. If insurance or condemnation proceeds are paid in connection with damage to, or the taking of, the Property, Borrower shall be responsible for repairing or restoring the Property only if Lender has released proceeds for such purposes. Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed. If the insurance or condemnation proceeds are not sufficient to repair or restore the Property, Borrower is not relieved of Borrower's obligation for the completion of such repair or restoration. Lender or its agent may make reasonable entries upon and inspections of the Property. If it has reasonable cause, Lender may inspect the interior of the improvements on the Property. Lender shall give Borrower notice at the time of or prior to such an interior inspection specifying such reasonable cause. 8. Borrower's Loan Application. Borrower shall be in default if, during the Loan application process, Borrower or any persons or entities acting at the direction of Borrower or with Borrower's knowledge or consent gave materially false, misleading, or inaccurate information or statements to Lender (or failed to provide Lender with material information) in connection with the Loan. Material representations include, but are not limited to, representations concerning Borrower's occupancy of the Property as Borrower's principal residence. PENNYLVANIA•Single Famllyfannie MeelFreddle Mac UNIFORM INSTRUMENT VMP Wolters Kfuwer Financial Service, Form 3039 1/01 P8IPA) 108041.00 Page 8 of 17 9. Protection of Lender's Interest in the Property and Rights Under this Security Instrument. If (a) Borrower fails to perform the covenants and agreements contained in this Security Instrument, (b) there is a legal proceeding that might significantly affect Lender's interest in the Property and/or rights under this Security Instrument (such as a proceeding in bankruptcy, probate, for condemnation or forfeiture, for enforcement of a lien which may attain priority over this Security Instrument or to enforce laws or regulations), or (c) Borrower has abandoned the Property, then Lender may do and pay for whatever is reasonable or appropriate to protect Lender's interest in the Property and rights under this Security Instrument, including protecting and/or assessing the value of the Property, and securing and/or repairing the Property. Lender's actions can include, but are not limited to: (a) paying any sums secured by a lien which has priority over this Security Instrument; (b) appearing in court; and (c) paying reasonable attorneys' fees to protect its interest in the Property and/or rights under this Security Instrument, including its secured position in a bankruptcy proceeding. Securing the Property includes, but is not limited to, entering the Property to make repairs, change locks, replace or board up doors and windows, drain water from pipes, eliminate building or other code violations or dangerous conditions, and have utilities turned on or off. Although Lender may take action under this Section 9, Lender does not have to do so and is not under any duty or obligation to do so. It is agreed that Lender incurs no liability for not taking any or all actions authorized under this Section 9. Any amounts disbursed by Lender under this Section 9 shall become additional debt of Borrower secured by this Security Instrument. These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable, with such interest, upon notice from Lender to Borrower requesting payment. If this Security Instrument is on a leasehold, Borrower shall comply with all the provisions of the lease. If Borrower acquires fee title to the Property, the leasehold and the fee title shall not merge unless Lender agrees to the merger in writing. 10. Mortgage Insurance. If Lender required Mortgage Insurance as a condition of making the Loan, Borrower shall pay the premiums required to maintain the Mortgage Insurance in effect. If, for any reason, the Mortgage Insurance coverage required by Lender ceases to be available from the mortgage insurer that previously provided such insurance and Borrower was required to make separately designated payments toward the premiums for Mortgage Insurance, Borrower shall pay the premiums required to obtain coverage substantially equivalent to the Mortgage Insurance previously in effect, at a cost substantially equivalent to the cost to Borrower of the Mortgage Insurance previously in effect, from an alternate mortgage insurer selected by Lender. If substantially equivalent Mortgage Insurance coverage is not available, Borrower shall continue to pay to Lender the amount of the separately designated payments that were due when the insurance coverage ceased to be in effect. Lender will accept, use and retain these payments as a non-refundable loss reserve in lieu of Mortgage Insurance. Such loss reserve shall be non-refundable, notwithstanding the fact that the Loan is ultimately paid in full, and Lender shall not be required to pay Borrower any interest or earnings on such loss reserve. Lender can no longer require loss reserve payments if Mortgage Insurance coverage (in the amount and for the period that Lender requires) provided by an insurer selected by Lender again becomes available, is obtained, and Lender requires separately designated payments toward the premiums for Mortgage Insurance. if Lender required Mortgage Insurance as a condition of making the Loan and Borrower was required to make separately designated payments toward the premiums for Mortgage .Insurance, Borrower shall pay the premiums required to maintain Mortgage Insurance in effect, or to provide a non-refundable loss reserve, until Lender's requirement for Mortgage Insurance ends in accordance with any written agreement between Borrower and PENNSYLVANIA-Slnple Family -Fannie Mae/Freddie Mac UNIFORM INSTRUMENT VMP Wolters Kluwer Financial Services Form 3039 1/01 P6(PAI (0804).00 Papa 9 0117 Lender providing for such termination or until termination is required by Applicable Law. Nothing in this Section 10 affects Borrower's obligation to pay interest at the rate provided in the Note. Mortgage Insurance reimburses Lender (or any entity that purchases the Note) for certain losses it may incur if Borrower does not repay the Loan as agreed. Borrower is not a party to the Mortgage Insurance. Mortgage insurers evaluate their total risk on all such insurance in force from time to time, and may enter into agreements with other parties that share or modify their risk, or reduce losses. These agreements are on terms and conditions that are satisfactory to the mortgage insurer and the other party (or parties) to these agreements. These agreements niay require the mortgage insurer to make payments using any source of funds that the mortgage insurer may have available (which may include funds obtained from Mortgage Insurance premiums). As a result of these agreements, Lender, any purchaser of the Note, another insurer, any reinsurer, any other entity, or any affiliate of any of the foregoing, may receive (directly or indirectly) amounts that derive from (or might be characterized as) a portion of Borrower's payments for Mortgage Insurance, in exchange for sharing or modifying the mortgage insurer's risk, or reducing losses. If such agreement provides that an affiliate of Lender takes a share of the insurer's risk in exchange for a share of the premiums paid to the insurer, the arrangement is often termed "captive reinsurance.'' Further: (a) Any such agreements will not affect the amounts that Borrower has agreed to pay for Mortgage Insurance, or any other terms of the Loan. Such agreements will not increase the amount Borrower will owe for Mortgage Insurance, and they will not entitle Borrower to any refund. (b) Any such agreements will not affect the rights Borrower has - if any - with respect to the Mortgage Insurance under the Homeowners Protection Act of 1998 or any other law. These rights may include the right to receive certain disclosures, to request and obtain cancellation of the Mortgage Insurance, to have the Mortgage Insurance terminated automatically, and/or to receive a refund of any Mortgage Insurance premiums that were unearned at the time of such cancellation or termination. 11. Assignment of Miscellaneous Proceeds; Forfeiture. All Miscellaneous Proceeds are hereby assigned to and shall be paid to Lender. If the Property is damaged, such Miscellaneous Proceeds shall be applied to restoration or repair of the Property, if the restoration or repair is economically feasible and Lender's security is not lessened. During such repair and restoration period, Lender shall have the right to hold such Miscellaneous Proceeds until Lender has had an opportunity to inspect such Property to ensure the work has been completed to Lender's satisfaction, provided that such inspection shall be undertaken promptly. Lender may pay for the repairs and restoration in a single disbursement or in a series of progress payments as the work is completed. Unless an agreement is made in writing or Applicable Law requires interest to be paid on such Miscellaneous Proceeds, Lender shall not be required to pay Borrower any interest or earnings on such Miscellaneous Proceeds. If the restoration or repair is not economically feasible or Lender's security would be lessened, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any, paid to Borrower. Such Miscellaneous Proceeds shall be applied in the order provided for in Section 2. In the event of a total taking, destruction, or loss in value of the Property, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any, paid to Borrower. PENNSYLVANIA-SIngle Fanuly-Fannre Mae/Freddie Mac UNIFORM INSTRUMENT Form 3039 1101 VMP4IF VMPBIPAI {08041.00 Wolters Kluwer Financial Services In a , Page 10 of 17 In the event of a partial taking, destruction, or loss in value of the Property in which the fair market value of the Property immediately before the partial taking, destruction, or loss in value is equal to or greater than the amount of the sums secured by this Security Instrument immediately before the partial taking, destruction, or loss in value, unless Borrower and Lender otherwise agree in writing, the sums secured by this Security Instrument shall be reduced by the amount of the Miscellaneous Proceeds multiplied by the following fraction: (a) the total amount of the sums secured immediately before the partial taking, destruction, or loss in value divided by (b) the fair market value of the Property immediately before the partial taking, destruction, or loss in value. Any balance shall be paid to Borrower. In the event of a partial taking, destruction, or loss in value of the Property in which the fair market value of the Property immediately before the partial taking, destruction, or loss in value is less than the amount of the sums secured immediately before the partial taking, destruction, or loss in value, unless Borrower and Lender otherwise agree in writing, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument whether or not the sums are then due. If the Property is abandoned by Borrower, or if, after notice by Lender to Borrower that the Opposing Party (as defined in the next sentence) offers to make an award to settle a claim for damages, Borrower fails to respond to Lender within 30 days after the date the notice is given, Lender is authorized to collect and apply the Miscellaneous Proceeds either to restoration or repair of the Property or to the sums secured by this Security Instrument, whether or not then due. "Opposing Party" means the third party that owes Borrower Miscellaneous Proceeds or the party against whom Borrower has a right of action in regard to Miscellaneous Proceeds. Borrower shall be in default if any action or proceeding, whether civil or criminal, is begun that, in Lender's judgment, could result in forfeiture of the Property or other material impairment of Lender's interest in the Property or rights under this Security Instrument. Borrower can cure such a default and, if acceleration has occurred, reinstate as provided in Section 19, by causing the action or proceeding to be dismissed with a ruling that, in Lender's judgment, precludes forfeiture of the Property or other material impairment of Lender's interest in the Property or rights under this Security Instrument. The proceeds of any award or claim for damages that are attributable to the impairment of Lender's interest in the Property are hereby assigned and shall be paid to Lender. All Miscellaneous Proceeds that are not applied to restoration or repair of the Property shall be applied in the order provided for in Section 2. 12. Borrower Not Released; Forbearance By Lender Not a Waiver. Extension of the time for payment or modification of amortization of the sums secured by this Security Instrument granted by Lender to Borrower or any Successor in Interest of Borrower shall not operate to release the liability of Borrower or any Successors in Interest of Borrower. Lender shall not be required to commence proceedings against any Successor in Interest of Borrower or to refuse to extend time for payment or otherwise modify amortization of the sums secured by this Security Instrument by reason of any demand made by the original Borrower or any Successors in Interest of Borrower. Any forbearance by Lender in exercising any right or remedy including, without limitation, Lender's acceptance of payments from third persons, entities or Successors -in Interest of Borrower or in amounts less than the amount then due, shall not be a waiver of or preclude the exercise of any right or remedy. 13. Joint and Several Liability; Co-signers; Successors and Assigns Bound. Borrower covenants and agrees that Borrower's obligations and liability shall be joint and several. However, any Borrower who co-signs this Security Instrument but does not execute the Note (a "co-signer"): (a) is co-signing this PENNSYLVANIA -Single Femily.Fannia Mae/Freddie Mac UNIFORM INSTRUMENT VMPa Wokers Kluwer Financial Services Form 3039 1/01 VMP81PAI 108041.00 Page 11 of 17 Security Instrument only to mortgage, grant and convey the co-signer's interest in the Property under the terms of this Security Instrument; (b) is not personally obligated to pay the sums secured by this Security Instrument; and (c) agrees that Lender and any other Borrower can agree to extend, modify, forbear or make any accommodations with regard to the. terms of this Security Instrument or the Note without the co-signer's consent. Subject to the provisions of Section 18, any Successor in Interest of Borrower who assumes Borrower's obligations under this Security Instrument in writing, and is approved by Lender, shall obtain all of Borrower's rights and benefits under this Security Instrument. Borrower shall not be released from Borrower's obligations and liability under this Security Instrument unless Lender agrees to such release in writing. The covenants and agreements of this Security Instrument shall bind (except as provided in Section 20) and benefit the successors and assigns of Lender. 14. Loan Charges. Lender may charge Borrower fees for services performed in connection with Borrower's default, for the purpose of protecting Lender's interest in the Property and rights under this Security Instrument, including, but not limited to, attorneys' fees, property inspection and valuation fees. In regard to any other fees, the absence of express authority in this Security Instrument to charge a specific fee to Borrower shall not be construed as a prohibition on the charging of such fee. Lender may not charge fees that are expressly prohibited by this Security Instrument or by Applicable Law. If the Loan is subject to a law which sets maximum loan charges, and that law is finally interpreted so that the interest or other loan charges collected or to be collected in connection with the Loan exceed the permitted limits, then; (a) any such loan charge shall be reduced by the amount necessary to reduce the charge to the permitted limit; and (b) any sums already collected from Borrower which exceeded permitted limits will be refunded to Borrower. Lender may choose to make this refund by reducing the principal owed under the Note or by making a direct payment to Borrower. If a refund reduces principal, the reduction will be treated as a partial prepayment without any prepayment charge (whether or not a prepayment charge is provided for under the Note). Borrower's acceptance of any such refund made by direct payment to Borrower will constitute a waiver of any right of action Borrower might have arising out of such overcharge. 15. Notices. All notices given by Borrower or Lender in connection with this Security Instrument must be in writing. Any notice to Borrower in connection with this Security Instrument shall be deemed to have been given to Borrower when mailed by first class mail or when actually delivered to Borrower's notice address if sent by other means. Notice to any one Borrower shall constitute notice to all Borrowers unless Applicable Law expressly requires otherwise. The notice address shall be the Property Address unless Borrower has designated a substitute notice address by notice to Lender. Borrower shall promptly notify Lender of Borrower's change of address. If Lender specifies a procedure for reporting Borrower's change of address, then Borrower shall only report a change of address through that specified procedure. There may be only one designated notice address under this Security Instrument at any one time. Any notice to Lender shall be given by delivering it or by mailing it by fu-st class mail to Lender's address stated herein unless Lender has designated another address by notice to Borrower. Any notice in connection with this Security Instrument shall not be deemed to have been given to Lender until actually received by Lender. if any notice required by this Security Instrument is also required under Applicable Law, the Applicable Law requirement will satisfy the corresponding requirement under this Security Instrument. PENNSYLVANIA-SIngle Femily-Fannle Mae/Freddie Mac UNIFORM INSTRUMENT VMP Wolters Kluwer Financial Services Form 3039 1101 VMP6(PA) (0804.00 Page 12 of.17 16. Governing Law; Severability; Rules of Construction. This Security Instrument shall be governed by federal law and the law of the jurisdiction in which the Property is located. All rights and obligations contained in this Security Instrument are subject to any requirements and limitations of Applicable Law. Applicable Law might explicitly or implicitly allow the parties to agree by contract or it might be silent, but such silence shall not be construed as a prohibition against agreement by contract. In the event that any provision or clause of this Security Instrument or the Note conflicts with Applicable Law, such conflict shall not affect other provisions of this Security Instrument or the Note• which can be given effect without the conflicting provision. As used in this Security Instrument: (a) words of the masculine gender shall mean and include corresponding neuter words or words of the feminine gender; (b) words in the singular shall mean and include the plural and vice versa; and (c) the word "may" gives sole discretion without any obligation to take any action. • 17. Borrower's Copy. Borrower shall be given one copy of the Note and of this Security Instrument. 18. Transfer of the Property or a Beneficial Interest in Borrower. As used in this Section 18, "Interest in the Property" means any legal or beneficial interest in the Property, including, but not limited to, those beneficial interests transferred in a bond for deed, contract for deed, installment sales contract or escrow agreement, the intent of which is the transfer of title by Borrower at a future date to a purchaser. If all or any part of the Property or any Interest in the Property is sold or transferred (or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without Lender's prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law. If Lender exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is given in accordance with Section 15 within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. 19. Borrower's Right to Reinstate After Acceleration. If Borrower meets certain conditions, Borrower shall have the right to have enforcement of this Security Instrument discontinued at any time prior to the earliest of: (a) five days before sale of the Property pursuant to any power of sale contained in this Security Instrument; (b) such other period as Applicable Law might specify for the termination of Borrower's right to reinstate; or (c) entry of a judgment enforcing this Security Instrument. Those conditions are that Borrower: (a) pays Lender all sums which then would be due under this Security Instrument and the Note as if no acceleration had occurred; (b) cures any default of any other covenants or agreements; (c) pays all expenses incurred in enforcing this Security instrument, including, but not limited to, reasonable attorneys' fees, property inspection and valuation fees, and other fees incurred for the purpose of protecting Lender's interest in the Property and rights under this Security Instrument; and (d) takes such action as Lender may reasonably require to assure that Lender's interest in the Property and rights under this Security Instrument, and Borrower's obligation to pay the sums secured by this Security Instrument, shall continue unchanged. Lender may require that Borrower pay such reinstatement sums and expenses in one or more of the following forms, as selected by Lender: (a) cash; (b) money order; (c) certified check, bank check, treasurer's check or cashier's check, provided any such check is drawn upon PENNSYLVANIA -Single Family -Fannie Mae/Freddie Mac UNIFORM INSTRUMENT VMP® Wolters Kluwer Financial Services ik 1 al Farm 3039 1101 VMPO(PAI (0804).00 Page 13 of 17 an institution whose deposits are insured by a federal agency, instrumentality or entity; or (d) Electronic Funds Transfer. Upon reinstatement by Borrower, this Security Instrument and obligations secured hereby shall remain fully effective as if no acceleration had occurred. However, this right to reinstate shall not apply in the case of acceleration under Section 18. 20. Sale of Note; Change of Loan Servicer; Notice of Grievance. The Note or a partial interest in the Note (together with this Security Instrument) can be sold one or more times without prior notice to Borrower. A sale might result in a change in the entity (known as the "Loan Servicer") that collects Periodic Payments due under the Note and this Security Instrument and perforins other mortgage loan servicing obligations under the Note, this Security Instrument, and Applicable Law. There also might be one or more changes of the Loan Servicer unrelated to a sale of the Note. If there is a change of the Loan Servicer, Borrower will be given written notice of the change which will state the name and address of the new Loan Servicer, the address to which payments should be made and any other information RESPA requires in connection with a notice of transfer of servicing. If the Note is sold and thereafter the Loan is serviced by a Loan Servicer other than the purchaser of the Note, the mortgage loan servicing obligations to Borrower will remain with the Loan Servicer or be transferred to a successor Loan Servicer and are not assumed by the Note purchaser unless otherwise provided by the Note purchaser. Neither Borrower nor Lender may commence, join, or be joined to any judicial action (as either an individual litigant or the member of a class) that arises from the other party's actions pursuant to this Security Instrument or that alleges that the other party has breached any provision of, or any duty owed by reason of, this Security Instrument, until such Borrower or Lender has notified the other party (with such notice given in compliance with the requirements of Section 15) of such alleged breach and afforded the other party hereto a reasonable period after the giving of such notice to take corrective action. If Applicable Law provides a time period which must elapse before certain action can be taken, that time period will be deemed to be reasonable for purposes of this paragraph. The notice of acceleration and opportunity to cure given to Borrower pursuant to Section 22 and the notice of acceleration given to Borrower pursuant to Section 18 shall be deemed to satisfy the notice and opportunity to take corrective action provisions of this Section 20. 21. Hazardous Substances. As used in this Section 21: (a) "Hazardous Substances" are those substances defined as toxic or hazardous substances, pollutants, or wastes by Environmental Law and the following substances: gasoline, kerosene, other flammable or toxic petroleum products, toxic pesticides and herbicides, volatile solvents, materials containing asbestos or formaldehyde, and radioactive materials; (b) "Environmental Law" means federal laws and laws of the jurisdiction where the Property is located that relate to health, safety or environmental protection; (c) "Environmental Cleanup" includes any response action, remedial action, or removal action, as defined in Environmental Law; and (d) an "Environmental Condition" means a condition that can cause, contribute to, or otherwise trigger an Environmental Cleanup. Borrower shall not cause or permit the presence, use, disposal, storage, or release of any Hazardous Substances, or threaten to release any Hazardous Substances, on or in the Property. Borrower shall not do, nor allow anyone else to do, anything affecting the Property (a) that is in violation of any Environmental Law, (b) which creates an Environmental Condition, or (c) which, due to the presence, use, or release of a Hazardous Substance, creates a condition that adversely affects the value of the Property. The preceding two sentences shall not apply to the presence, use, or storage on the Property of small quantities of PENNSYLVANIA -Single Family -Fannie MaeIFreddie Mac UNIFORM INSTRUMENT VMP Wolters Kluwer Financial Services n Form 3039 1101 VMP81PA1 108041.00 Page l4 of 17 Hazardous Substances that are generally recognized to be appropriate to normal residential uses and to maintenance of the Property (including, but not limited to, hazardous substances in consumer products). Borrower shall promptly give Lender written notice of (a) any investigation, claim, demand, lawsuit or other action by any governmental or regulatory agency or private party involving the Property and any Hazardous Substance or Environmental Law of which Borrower has actual knowledge, (b) any Environmental Condition, including but not limited to, any spilling, leaking, discharge, release or threat of release of any Hazardous Substance, and (c) any condition caused by the presence, use or release of a Hazardous Substance which adversely affects the value of the Property. If Borrower learns, or is notified by any governmental or regulatory authority, or any private party, that any removal or other remediation of any Hazardous Substance affecting the Property is necessary, Borrower shall promptly take all necessary remedial actions in accordance with Environmental Law. Nothing herein shall create any obligation on Lender for an Environmental Cleanup. NON-UNIFORM COVENANTS. Borrower and Lender further covenant and agree as follows: 22. Acceleration; Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security Instrument (but not prior to acceleration under Section 18 unless Applicable Law provides otherwise). Lender shall notify Borrower of, among other things: (a) the default; (b) the action required to cure the default; (c) when the default must be cured; and (d) that failure to cure the default as specified may result in acceleration of the sums secured by this Security Instrument, foreclosure by judicial proceeding and sale of the Property. Lender shall further inform Borrower of the right to reinstate after acceleration and the right to assert in the foreclosure proceeding the non-existence of a default or any other defense of Borrower to acceleration and foreclosure. If the default is not cured as specified, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may foreclose this Security Instrument by judicial proceeding. Lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in this Section 22, including, but not limited to, attorneys' fees and costs of title evidence to the extent permitted by Applicable Law. 23. Release. Upon payment of all sums secured by this Security Instrument, this Security Instrument and the estate conveyed shall terminate and become void. After such occurrence, Lender shall discharge and satisfy this Security Instrument. Borrower shall pay any recordation costs. Lender may charge Borrower a fee for releasing this Security Instrument, but only if the fee is paid to a third party for services rendered and the charging of the fee is permitted under Applicable Law. 24. Waivers. Borrower, to the extent permitted by Applicable Law, waives and releases any error or defects in proceedings to enforce this Security Instrument, and hereby waives the benefit of any present or future laws providing for stay of execution, extension of time, exemption from attachment, levy and sale, and homestead exemption. 25. Reinstatement Period. Borrower's time to reinstate provided in Section 19 shall extend to one hour prior to the commencement of bidding at a sheriff's sale or other sale pursuant to this Security Instrument. 26. Purchase Money Mortgage. If any of the debt secured by this Security Instrument is lent to Borrower to acquire title to the Property, this Security Instrument shall be a purchase money mortgage. 27. Interest Rate After Judgment. Borrower agrees that the interest rate payable after a judgment is entered on the Note or in an action of mortgage foreclosure shall be the rate payable from time to time under the Note. PENNSgYLVANIA-SIngIe Family -Fannie Mae/Freddie Mac UNIFORM INSTRUMENT � Form 3039 1101 VMP® `' P6IPA) 10804).00 Wolters Kluwer Financial Services Inftiels: Page 15 o1 17 BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Security Instrument and in any Rider executed by Borrower and recorded with it. Witnesses: (Seal) -Borrower (Seal) -Borrower (Seal) -Borrower (Seal) (Seal) -Borrower -Borrower ELIAB$TH M.'DORRIS (Seal) (Seal) -Borrower -Borrower PENNSYLVANIA -Single Family -Fannie Mae/Freddie Mac UNIFORM INSTRUMENT VMP Wolters Kluwer Financial Services Form 3039 1101 P8fPA( (08041.00 Page ll fi of 17 COMMONWEALTH OF PENNSYLVANIA, CUMBERLAND County ss: On this, the 1ST day of FEBRUARY, 2010 undersigned officer, personally appeared DONALD D DORRIS JR NON-BWRS:ELIZABETH M. DORRIS , before me, the known to me (or satisfactorily proven) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged that he/she/they executed the same for the purposes herein contained. IN WITNESS WHEREOF, I hereunto set my hand and official seal. My Commission Expires: "rot /Oh /c/a COMMONWEALTH OF PENNSYLVANIA NOTARIAL SEAL ANGELA F. UNGER, Notary Public Southampton Twp., Franklin County My Commission Expires October 7, 2012 _ Certificate of Residence /Lfafu.iyf uhIt c Title of Officer /1r7yel< fGln�e/ the correct address of the within -named Mortgagee is DSS MOINES, IA 50306-5137 Witness my hand this 1ST P. O. BOX 5137 day of FEBRUARY, 2010 , do hereby certify that Agent of Mortgagee PENNSYLVANIA -Single Family -Fannie Mee/Freddie Mac UNIFORM INSTRUMENT VMP® Wolters Kluwer Financial Services Initials Form 3039 1/01 PRIPA110804).00 Paye 17 of 17 File No. 10-01 COMMITMENT FOR TITLE INSURANCE SCHEDULE A (continued) LEGAL DESCRIPTION ALL THAT CERTAIN tract or parcel of ground with the buildings and improvements thereon erected, situate in the Township of Upper Allen, County of Cumberland, Commonwealth of Pennsylvania, bounded and described as follows: BEGINNING at a point on the Northern bank of the Yellow Breeches Creek at a corner of land now or late of John E. Cline; thence extending along said Creek Road North 74 degrees West, 194.71 feet to a corner of land now or late of Eric H. and Mary P. Humphries; thence along said land and crossing Township Road No. T-611 North 8 degrees 15 minutes East 262.06 feet to a point; thence still along said land North 24 degrees 41 minutes East 206.48 feet to a point in line of land now or late of Dr. A. Z. Ritzman; thence along said land south 79 degrees East 270 feet to a corner of land now or late of John E. Cline; thence along said land and recrossing Township Road No. T-611 South 24 degrees 15 minutes West 492.6 feet to the point and place of BEGINNING. BEING known and numbered as 709 McCormick Road. AND BEING the same premises which Wilson C. Everhart and Frances D. Everhart, by Deed dated 12/27/93 and recorded 1/6194 in Cumberland County Deed Book 36-S-1182, granted and conveyed unto Donald D. Dorris & Elizabeth M. Dorris. Schedule A — Page 2 of 3 Nile #: 10-01 - A&A Abstract & Settlement Services, I,LC ALTA Commitment (6-17-06) - TIRBOP & STG modifications (4-1-07) tew� Ltitre guaranty company ROBERT P. ZIEGLER RECORDER OF DEEDS CUMBERLAND COUNTY 1 COURTHOUSE SQUARE CARLISLE, PA 17013 717-240-6370 Instrument Number - 201003523 Recorded On 2/9/2010 At 1:38:17 PM * Instrument Type - MORTGAGE Invoice Number - 60680 User ID - AF *Mortgagor - DORRIS, DONALD D * Mortgagee - WELLS FARGO BK N A * Customer - A & A ABSTRACT * FEES STATE WRIT TAX STATE JCS/ACCESS TO JUSTICE RECORDING FEES — RECORDER OF DEEDS PARCEL CERTIFICATION FEES AFFORDABLE HOUSING COUNTY ARCHIVES FEE ROD ARCHIVES FEE TOTAL PAID $0.50 $23.50 $39.50 $10.00 $11.50 $2.00 $3.00 $90.00 * Total Pages - 19 Certification Page DO NOT DETACH This page is now part of this legal document. I Certify this to be recorded in Cumberland County PA RECORDER O D EDS * - Information denoted by an asterisk may change during the verification process and may not be reflected on this page. Exhibit D Notice of Right to Cancel You are entering into a transaction that will result in a mortgage, lien or other security interest on or in your home. You have a legal right under federal law to cancel this transaction, without cost, within three business days from whichever of the following events occurs last: (1) the date of the transaction, which is FEBRUARY 1, 2010 ; or (2) the date you received your Truth -in - Lending disclosures; or (3) the date you received this notice of your right to cancel. If you cancel the transaction, the mortgage, lien or other security Interest Is also canceled, Within 20 calendar days after we receive your notice, we must take the steps necessary to reflect the fact that the mortgage, lien or other security interest on or in your home has been canceled, and must return to you any money or property you have given to us or to anyone else in connection with this transaction. You may keep any money or property we have given you until we have done the things mentioned above, but you must then offer to return the money or property. If it Is impractical or unfair for you to return the property, you must offer its reasonable value. You may offer to return the property at your home or at the location of the property. Money must be returned to the address below. if we do not take possession of the money or property within 20 caiendar days of your offer, you may keep it without further obligation. itN If you decide to cancel this new transaction, you may do so by notifying us in writing at: WELLS FARGO BANK, N.A. 2001 KILLEBREW DRIVE MINNEAPOLIS, MN 55425 - ATTENTION: KAREN IBLINGS You may use any written statement that is signed and dated by you and states your intention to cancel, or you may use this notice by dating and signing below. Keep one copy of this notice because it contains important information about your rights. If you cancel by mail or teiegram, you must send the notice no later than midnight of FEBRUARY 4, 2010 (or midnight of the third business day following the latest of the three events listed above). If you send or deliver your written notice to cancel some other way, it must be delivered to the above address no later than that time. ��:Can � el1���••i`��n=1 • I wish to cancel thls transaction. Date - (Seal) Borrower - DONALD D DORRIS JR cknow lee •'f elft of: Recel ;.. .._ ..•�:.r;n!.: :::: .........tet:; !the undersigned acknowledge receiving 2 copies of this notice on the 1st day of FEBRUARY 2010 Date. 2-- / ' 2.0 / N M FL# 0140 11/96 LPS# RC140 Rev. 11/08/99 Borrower - DONALD D DORRIS J Loan Number: 0265922443 (Seat) i.}.r i'�'iw +4:{.•a�'4Ta.*F, F:F: f .F}F:r::::l•i$F:i:i: 4i.� :•: Notice of Right to Cancel You are entering into a transaction that will result in a mortgage, lien or other security interest on or in your home. You have a legal right under federal law to cancel this transaction, without cost, within three business days from whichever of the following events' occurs last: (1) the date of the transaction, which is FEBRUARY 1, 2010 ; or (2) the date you received your Truth -in - Lending disclosures; or (3) the date you received this notice of your right to cancel. If you cancel the transaction, the mortgage, lien or other security interest Is also canceled. Within 20 calendar days after we receive your notice, we must take the steps necessary to reflect the fact that the mortgage, lien or other security interest on or in your home has been canceled, and must return to you any money or property you have given to us or to anyone else in connection with this transaction. You may keep any money or property we have given you until we have done the things mentioned above, but you must then offer to return the money or property. If it is Impractical or unfair for you to return the property, you must offer its reasonable value. You may offer to return the property at your home or at the location of the property. Money must be returned to the address below. If we do not take possession of the money or property within 20 calendar days of your offer, you may keep it without further obligation. 11C :r. If you decide to cancel this new transaction, you may do so by notifying us In writing at: WELLS FARGO BANK, N.A. 2001 KILLEBREW DRIVE MINNEAPOLIS, MN 55425 - ATTENTION: KAREN IBLINGS You may use any written statement that is signed and dated by you and states your intention to cancel, or you may use this notice by dating and signing below. Keep one copy of this notice because it contains important information about your rights. If you cancel by mail or telegram, you must send the notice no later than midnight of FEBRUARY 4, 2010 (or midnight of the third business day following the latest of the three events listed above). If you send or deliver your written notice to cancel some other way, it must be delivered to the above address no later than that time. ttan I wish to cancel this transaction. Date: Borrower - ELI7ABETH M. DORRIS (Seal) 01N18 fpman At!% I the undersigned acknowledge receiving 2 copies of this notice on the 1st day of FEBRUARY 2010 Date: . )1 POO NMFL# 0140 11/98 LPS# RC140 Rev. 11/08/99 4 (Seal) Borrower - EL B M. DO RIS Loan Number. 0265922443 Exhibit E u. S:\AdminTre-Trial\ord\obilWells Fargo v. Desiderio pos to cc 13-03757.1anb.docx WELLS FARGO BANK, N.A. : IN THE COURT OF COMMON PLEAS : CHESTER COUNTY, PENNSYLVANIA vs. : CIVIL ACTION - LAW ROCCO DESIDERIO and PAULA DESIDERIO : NO. 2013 -03757 -RC Emily M. Phelan, Esquire, Matthew Brushwood, Esquire, Adam H. Davis, Esquire and Craig A. Himeisen, Esquire, Attorneys for Plaintiff Barry J. Goldstein, Esquire, Attorney for Defendants. AND NOW, this ORDER day of , 2014 upon consideration of Plaintiff's Preliminary Objections to Defendants' Counterclaims and Defendants' response thereto, it is hereby ORDERED and DECREED that the Objections are SUSTAINED and Defendants' Counterclaims are STRICKEN.1 BY THE COURT: I Pursuant to Pa. R.C.P. 1148, the only counterclaims available in a mortgage foreclosure action are those which arise from the same transaction or series of transactions from which the plaintiff's cause of action arose. Our courts have interpreted this rule to mean that counterclaims are permitted only if they were part of or incident to the creation of the mortgage relationship itself. Cunningham v. McWilliams, 714 A.2d 1054 (Pa. Super. 1998), appeal den. 734 A.2d 861; Chrysler First Business Credit Corp. v. Gourniak, 411 Pa. Super. 259, 601, A.2d 338 (1992). In addition, a counterclaim based on actions which occurred after the parties were in default of the mortgage is improper. Mellon Bank, N.A. v. Joseph, 267 Pa. Super. 307, 406 A.2d 1055 (1979). Exhibit F IN THE COURT OF COMMON PLEAS OF NORTHAMPTON COUNTY, PENNSYLVANIA CIVIL, DIVISION WELLS FARGO BANK, N.A., Plaintiff v. DMITRIY S. RATMANSKY and ANNA L. RATMANSKY, Defendants. NO: C -48 -CV -2012-2302 ORDER OF COURT • < :.; . AND NOW, this 1644' day of December, 2012, upon consideration of Plaina, Wtils Fargo Bank, N.A.'s, Preliminary Objections to Defendants' Counterclaims, it is hereby ORDERED that Plaintiff's Preliminary Objections are SUSTAINED. It is further ORDERED that Defendants' Counterclaims are hereby DISMISSED with prejudice. STATEMENT OF REASONS Factual and Procedural History This matter arises out of a civil action in mortgage foreclosure. Plaintiff Wells Fargo Bank, N.A.("Plaintiff') filed a Complaint against Defendants Dmitriy S. Ratmansky and Anna L. Ratmansky (together, "Defendants") on March 7, 2012. In the Complaint, Plaintiff alleges that Defendants are the mortgagors and/or real owners of the property located at 2822 Santee Drive, Bethlehem, Pennsylvania 18017 (the "Property"). Plaintiff states that Defendants executed and delivered a mortgage (the "Mortgage") on the Property on May 23, 2005. Plaintiff claims that the Mortgage is in default, because monthly payments of principal and interest due December 1, 2008, and each month thereafter, are due and unpaid. Specifically, Plaintiff alleges that the following amounts are due on the Mortgage as of February 21, 2012: $167,126.37 in Principal Balance; $23,602.85 in Interest; $313.00 in Late Charges; $490.00 in Property Inspections; and $11,874.92 in Escrow Deficit. Plaintiff also states that Defendants have a Corporate Advance Credit of $2,546.00. Therefore, Plaintiff claims that Defendants owe a total of $200,861.14 on the Mortgage. Plaintiff asserts that there is an acceleration clause in the Mortgage that permits, upon failure of Defendants to make such payments after a date specified by written notice sent to Defendants, Plaintiff to collect the entire principal balance and all interest due thereon. Accordingly, Plaintiff filed its Complaint in Mortgage Foreclosure for the purpose of foreclosing the Mortgage and selling the Property. Plaintiffnotes that it is not seeking a judgtnent of personal liability; this action seeks only an in rem judgment. Defendants, who arepro se, responded to Plaintiff's Complaint with an Answer, Affirmative Defenses, and Counterclaims filed on July 20, 2012. In the first of three Counterclaims, Defendants bring a claim for "Fraudulent and unfair loan modification attempts." Pursuant to this claim, Defendants state that Plaintiffwas not reasonable when attempting to modify the terms of Defendants' loan to accommodate Defendants' financial difficulties. Defendants further state that Plaintiff "intentionally failed to provide crucial and material terms of the mortgage modification." Defendants bring a second Counterclaim for "Harassment - Estoppel and Bad Faith." Defendants allege that Plaintiff had the opportunity to argue its case in a previous action that was ultimately withdrawn. Defendants claim that Plaintiff "now sues again based on the same facts [as the earlier action] and harasses Defendants because of its own procrastination." Finally, Defendants bring a third Counterclaim for "No evidence of the loan." 2 Defendants claim that there is no documentary evidence that Plaintiff is the lender of the Mortgage and, therefore, Plaintiff has not suffered any recoverable damages with respect to the Mortgage. Defendants also make the following requests for relief: dismissal of the lawsuit with prejudice; rescission of the entire Mortgage and note amounting to clear title to the Property; monetary damages for Plaintiff's actions in violation of "numerous laws," including Plaintiff's "unfair and deceptive acts and practices"; judgment against Plaintiff for retum ofthe down payment and other payments, including interest; costs of litigation; and any other relief the Court deems just and proper. Plaintiff responded to Defendants' Counterclaims with Preliminary Objections filed on August 21, 2012. Plaintiffasserts a number of grounds on which Defendants' Counterclaims should be dismissed. First, Plaintiff argues that, under Pennsylvania Rule of Civil Procedure 1148, counterclaims must arise out of the same transaction or occurrence as a plaintiff's original cause of action. Plaintiff states that, in a mortgage foreclosure action, this Rule only permits counterclaims that relate to the creation of the mortgage itself. Plaintiff argues that Counterclaims One and Two do not arise out of the creation of -the Mortgage and, therefore, should be dismissed pursuant to Pa. R. Civ. P. 1148. Next, Plaintiff asserts that Counterclaim Three for "No evidence ofthe loan" should be dismissed for failure to state a claim. Plaintiff also asserts that Defendants' Counterclaims should be dismissed, because Defendants have improperly requested in personam money damages in an in rem mortgage foreclosure action. Plaintiff contends that, under Pennsylvania law, such money damages may not be sought in this action. Plaintiff also seeks dismissal of Defendants' Counterclaims based on Pennsylvania Rule of Civil Procedure 1019(a), because the Counterclaims fail to set forth the specific, material facts on which they are based. Therefore, pursuant to Pa. R. Civ. P. 1028(a)(2), Plaintiff claims that the Counterclaims fail to conform with the rules of court and should be dismissed. Finally, Plaintiff objects to Defendants' Counterclaims for insufficient specificity under Pa. R. Civ. P. 1019(f) and seeks their dismissal pursuant to Pa. R. Civ. P. 1028(a)(3). Defendants did not respond to Plaintiff's Preliminary Objections to the Counterclaims Plaintiff filed a Brief in support of its Preliminary Objections on September 10, 2012. This matter was placed on the September 25, 2012, Argument List and oral argument was heard. At oral argument, Defendants stated that they have not filed a response to Plaintiff's Preliminary Objections, because they are waiting for Plaintiff to produce more discovery. However, as we noted during oral argument and as we discuss below, we consider only the face of the pleadings when ruling on preliminary objections and, therefore, any additional discovery is irrelevant at this stage in the action. Accordingly, we now consider Plaintiff's Preliminary Objections to Defendants' Counterclaims based solely on the face.of the pleadings, Le. the Coimterclaims Legal Standard In ruling on preliminary objections in the nature of a demurrer, the trial court may consider no testimony or evidence outside of the complaint. Mellon Bank, N.A. v. Fabinyi, 650 A.2d 895, 899 (Pa. Super. Ct. 1994) (citation omitted). In ruling upon a demurrer, we must accept as true allwell-pleaded allegations and material facts averred in the complaint as well as all reasonable inferences deducible therefrom. Wurth v. City of Phila., 584 A.2d 403, 407 (Pa. Comnaw. Ct. 1990) (citation omitted). However, when ruling on preliminary objections, although a court must accept as true all clearly -pled facts, there is no such requirement as to a pleader's legal conclusions or mere averments of law. Santiago v. Pa. Nat'l Mut. Cas. Tns. Co., 613 A.2d 1235, 1238-39 (Pa. Super. Ct. 1992) (citations omitted). In the face of a demurrer, a complaint should only be dismissed in cases that are free and clear from doubt. Id. at 1238. If any theory °flaw vvill support a claim, preliminary objections should not be sustained as any doubt should be resolved against the objecting party. Foster v. Peat Marwick Main & Co., 587 A.2d 382, 384 (Pa. Commw. Ct. 1991); Ambrose v. Cross Creek Condos., 602 A.2d 864, 869 (Pa. Super. Ct. 1992). In order to grant a demurrer, it must be certain from the face of the complaint that the claims will not support recovery under any legal theory. Mellon Bank, 650 A.2d at 899; Eckell v. Wilson, 597 A.2d 696, 698 (Pa. Super. Ct. 1991), appeal denied, 607 A.2d 253 (Pa. 1992) (citations omitted). Discussion 1. The Counterclaims Are Dismissed Pursuant to Pa. R. Civ. P. 1148 Plaintiff first objects to Defendants' Counterclaims on the grounds that they violate Pennsylvania Rule of Civil Procedure 1148, which states, "A defendant may plead a counterclaim which arises from the same transaction or occurrence or series of transactions or occurrences from which the plaintiffs caus of action arose." It is well-settled that Rule 1148 must be interpreted narrowly. Cunmngham v. McWilliams, 714 A.2d 1054, 1057 (Pa. Super. Ct. 1998) (citing Chrysler First Bus. Credit Corp. v. Goumiak, 601 A.2d 338, 341 (Pa. Super. Ct. 1992)). In a mortgage foreclosure action, the Rule permits only those counterclaims that are "part of or incident to the creation of the mortgage relationship itself." Id. Here, the Counterclaims clearly are not permissible under Rule 1148. Counterclaims One and Two are: (1) "Fraudulent and unfair loan modification attempts," and (2) "Harassment - 5 Estoppel and Bad Faith." These Counterclaims do not arise out of the creation of the mortgage relationship, but to incidents that allegedly occurred later, pursuant to that relationship. Specifically, with regard to Counterclaim One, Defendants refer to actions of the Plaintiff that allegedly took place during failed conciliation meetings where the parties attempted to reach an agreed modification of the Mortgage. With regard to Counterclaim Two, Defendants point to an alleged previous lawsuit instituted by Plaintiff against Defendants, based on the same facts as the present suit and thus arising out of the parties' conduct after the creation of the mortgage relationship. As neither Counterclaim One nor Counterclaim Two arises out of the creation of the mortgage relationship, they are improper counterclaims to Plaintiff's Complaint under Pa. R. Civ. P. 1148. Therefore, Plaintiff's Preliminary Objection to Counterclaims One and Two based on Pa. R. Civ. P. 1148 is SUSTAINED, and these two Counterclaims are DISM1SSED. . Counterclaim Three Is Dismissed for Failure to State a Claim Plaintiff objects to Counterclaim Three for "No evidence of the loan" on the ground that it fails to state a cognizable claim. Plaintiff argues that it is unclear exactly what type of claim Defendants are attempting to assert in Counterclaim Three and that there is no claim under Pennsylvania law for "No evidence of the loan." A fair reading of Counterclaim Three suggests that Defendants may have misplaced a response that would be more appropriate as an affirmative defense than as a counterclaim. Under Pennsylvania law, counterclaims and affirmative defenses are two distinct concepts. Riverside Mem'l Mausoleum, Inc. v. UMET Trust, 581 F.2d 62, 68 (3d Cir. 1978) (applying Pennsylvania state law). A counterclaim may entitle the defendant to some amount of affirmative relief, 6 whereas a defense merely precludes or diminishes the plaintiffs recovery. Id. Here, Defendants assert a counterclaim for "No evidence of the loan," but, if in fact there was not a valid loan between the parties, Defendants would not be entitled to affirmative relief; Plaintiff's recovery would simply be barred. This result is consistent with the assertion of an affirmative defense rather than a counterclaim. Indeed; Plaintiff notes in its Brief that "[t]he allegation[s] in [Counterclaim] Three might constitute affirmative defenses, but they certainly are not the proper subject of a counterclaim." Plaintiff's Brief at 8 n. 3. Accordingly, Counterclaim Three does not state a claim upon which relief may be granted.' Therefore, Plaintiff's Preliminary Objection to Counterclaim Three on the grounds that it fails to state a claim is SUSTAINED, and Counterclaim Three is DISMISSED with prejudice. III. Defendants' Counterclaims Are Dismissed Due to the Improper Request for Money Damages Although we have already dismissed all of Defendants' Counterclaims on the grounds discussed above, we will address Plaintiff's argument that the Counterclaims should also be . dismissed due to Defendants' improper request for money damages Pursuant to Pennsylvania Rule of Civil Procedure 1141(a), a civil action in mortgage foreclosure shall not include an action to enforce a personal liability. In accordance with this Rule, "[i]t is well-established that an action in mortgage foreclosure is strictly in rem and thus may not include an in personam action to enforce personal liability." Newtown Vill. P'ship v. ' We note, however, that Counterclaim Three essentially restates Defendants' two Affirmative Defenses, which contend that (1) Plaintiff has no standing with respect to the Mortgage, and (2) Plaintiff has not proven that it is a party to the Mortgage. If Defendants were to prevail on either of these Affirmative Defenses, they would have the same result as if "No evidence of the loan" were a cognizable counterclaim. In either case, the effect would be that Plaintiff is barred from recovering on the Mortgage. 7 Kimmel, 621 A.2d 1036, 1037 (Pa. Super. Ct. 1993) (citations omitted). This restriction applies to both mortgagees and mortgagors. Id. Citing this rule, Plaintiff argues that, because Defendants have requested money damages along with their Counterclaims, the Counterclaims should be dismissed. As the case law is clear on the restriction on money damages in mortgage foreclosure actions, Plaintiff is correct and Defendants' Counterclaims must be dismissed. Therefore, Plaintiff's Preliminary Objection based on Defendants' improper request for money damages in an in rem mortgage foreclosure action is SUSTAINED, and Defendants' Counterclaims are DISMISSED with prejudice. W. Defendants' Counterclaims Are Dismissed for Insufficient Specificity Once again, although we have already dismissed Defendants' Counterclaims as set forth above, we will address Plaintiffs remaining arguments. Plaintiffalso objects to the Counterclaims on the grounds that (1) Defendants have not pled specific, material facts to support the Counterclaims as required by Pennsylvania Rule of Civil Procedure 1019(a), and(2) the Counterclaims do not include averments of time and place as required by Pennsylvania Rule of Civil Procedure 1019(f). Although Plaintiff technically advances two separate Preliminary Objections based on each of these sections of the Rule, we consider them together, as they both stem from the same central objection - that Defendants' Counterclaims lack sufficient specificity. Pennsylvania Rule of Civil Procedure 1019(a) states that "[t]he material facts on which a cause of action or defense is based shall be stated in a concise and summary form." Pennsylvania Rule of Civil Procedure 1019(f) states that "[a]verments of time [and] place . . . shall be specifically stated." The purpose of invoking Rule 1019 and challenging the specificity of a 8 pleading is to ensure that a party's "ability to answer and defend will not be unduly impaired by a pleader's vagueness in stating the grounds of his suit." Stilp v. Com., 910 A.2d 775, 786 (Pa. Commw. Ct. 2006) (citing Paz v. Dep't of Corr., 580 A.2d 452 (Pa. Commw. Ct. 1990)). Thus, it is necessary to require the pleader to disclose the material facts sufficient to enable the adverse party to prepare his case (citing (citing Landau v. W. Pa. Nat'l Bank, 282 A.2d 335 (Pa. 1971)). Plaintiff contends that Defendants have not complied with these provisions of Rule 1019 in asserting their Counterclaims With respect to Counterclaim One for "Fraudulent and unfair loan modification attempts," Defendants allege that Plaintiff "intentionally failed to provide crucial and material terms of the mortgage modification" to Defendants and that Plaintiff "claimed that they did not receive any of the paperwork" Defendants' Counterclaims ¶ 1. Defendants do not set forth what "material terms" Plaintiff allegedly failed to provide, what paperwork they are referencing, or what person or persons were acting on Plaintiffs behalf. Defendants also do not provide any details regarding the time and place of these interactions with Plaintiff. Regarding Counterclaim Two for "Harassment - Estoppel and Bad Faith," Defendants make the bald assertion that Plaintiff is harassing them by filing a lawsuit that is allegedly based on the same facts as an earlier, withdrawn lawsuit. See Defendants' Counterclaims ¶ 2. Defendants do not offer any facts or explanation as to how Plaintiff's conduct constitutes harassment or bad faith. Finally, in support of Counterclaim Three for "No evidence of the loan," Defendants simply state, "After a thorough review of all papers concerning this mortgage, Defendants have found absolutely no evidence that they actually received a loan." Defendants' Counterclaims ¶ 3. Defendants do not elaborate as to what "papers" they reviewed or provide any factual support to contradict Plaintiff's claim that Plaintiff is entitled to foreclose on the Mortgage. 9 In reviewing each of the three Counterclaims, we conclude that none of them conforms to the specificity requirements of Pennsylvania Rules of Civil Procedure 1019(a) and (f). Defendants set forth essentially no factual basis for any of their Counterclaims and, in the absence of such material information, Plaintiff is unable to properly defend against these Counterclaims. Such vague pleading is in conflict with the requirements of Pa. R. Civ. P. 1019(a) and (f), and, as a result, Defendants' Counterclaims must be dismissed. Therefore, Plaintiff s Preliminary Objections based on insufficient specificity pursuant to Pa. R. Civ. P. 1019(a) and (f) are SUSTAINED, and Defendants' Counterclaims are DISMISSED with prejudice. BY itiE COURT: 10 PRAECIPE FOR LISTING CASE FOR ARGUMENT (Must be typewritten and submitted in triplicate) TO THE PROTHONOTARY OF CUMBERLAND COUNTY: (List the within matter for the next Argument Court.) CAPTION OF CASE (entire caption must be stated in full) WELLS FARGO BANK, N.A. vs. DONALD D. DORRIS, JR. A/K/A DONALD D. DORRIS AND ELIZABETH M. DORRIS 1. State matter to be argued (i.e., plaintiff's motion for new trial, defendant's demurrer to complaint, etc.): PLAINTIFF'S PRELIMINARY OBJECTIONS TO DEFENDANTS' NEW MATTER AND COUNTERCLAIMS 2. Identify all counsel who will argue cases: (a) for plaintiffs: Craig A. Hirneisen, Esquire, 111 North Sixth Street, P.O. Box 679, Reading, PA 19603 (Name and Address) (b) for defendants: Stephen K. Portko, Esquire, 101 South U.S. Route 15, Dillsburg, PA 17019 (Name and Address) 3. I will notify all parties in writing within two days that this case has been listed for argument. 4. Argument Court Date: December 19, 2014 Date: November 7, 2014 Signatufe /� r4 A A. ry QISe Print your name Wells Fargo Bank, N.A. Attorney for Plaintiff INSTRUCTIONS: 1. Original and two copies of all briefs must be filed with the COURT ADMINISTRATOR (not the Prothonotary) before argument. 2. The moving party shall file and serve their brief 14 days prior to argument. 3. The responding party shall file their brief 7 days prior to argument. 4. If argument is continued new briefs must be filed with the COURT ADMINISTRATOR (not the Prothonotary) after the case is relisted. af � i-�, �� io �tt� 7 -14- 94 2,Q i 5 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA WELLS FARGO BANK, N.A., Plaintiff : CIVIL DIVISION v. : NO. 13-2237 Civil DONALD D. DORRIS, JR. A/K/A DONALD D. DORRIS and ELIZABETH M. DORRIS, Defendants : NOTICE TO PLEAD TO: Plaintiff, Wells Fargo Bank, N.A. and its attorney Craig A. Hirneisen, Esquire STEVENS & LEE 111 N. Sixth Street P.O. Box 679 Reading PA 19603 Attorneys for Plaintiff f+7 C=I fir,_... fit r C) r ry ,r-. Cnt CO You are hereby notified to file a written response to the enclosed DEFENDANTS' AMENDED ANSWER WITH NEW MATTER & COUNTERCLAIMS TO PLAINTIFF'S COMPLAINT within twenty (20) days from service hereof or a judgment may be entered against you. Dated: /2/1 IL/ vv P5AQQ, Stephen K. Portko, Esq. 101 South U.S. Route 15 Dillsburg, PA 17019 Attorney for Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA WELLS FARGO BANK, N.A., v. • Plaintiff : CIVIL DIVISION : NO. 13-2237 Civil DONALD D. DORRIS, JR. A/K/A DONALD D. DORRIS and ELIZABETH M. DORRIS, Defendants : DEFENDANTS' AMENDED ANSWER NEW MATTER & COUNTERCLAIMS TO PLAINTIFF'S COMPLAINT AND NOW, come Defendants, Donald D. Dorris, Jr. a/k/a Donald D. Dorris and Elizabeth M. Dorris, by their attorney, who files the within Amended Answer with New Matter & Counterclaims to Plaintiff's Complaint, as follows: 1. Denied. After reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth or falsity of the averment contained in paragraph 1 of the Complaint and therefore denies the allegations thereof. 2. Admitted. 3. Denied. After reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth or falsity of the averment contained in paragraph 3 of the Complaint and therefore denies the allegations thereof. By way of further answer, Defendants believe and therefore aver that Federal National Mortgage Association (Fannie Mae) is actually the owner of the loan with an acquisition date of 03-01-2010; however, Defendants timely rescinded the mortgage and, thus, Plaintiffs transfer or assignment of the subject loan subsequent to Defendants' rescission violated the law. 4. Denied. On or before February 3, 2010 and within the three-day rescission period, Defendants timely exercised their right to rescind the loan sending their rescission 1 notice to Plaintiff. By way of further Answer, on February 7th, May 17th and June 10th of 2010, and within the extended three-year rescission period, Defendants timely exercised their right to rescind the loan sending their cancellation notices to Plaintiff. As a result, the mortgage on Defendants' property became automatically voided by operation of law. By way of further answer, Plaintiff's interest in the property is automatically negated regardless of whether or not it was recorded. 5. Denied. The allegations are legal conclusions to which no answer is required. To the extent a reply may be appropriate, these allegations are denied, and Defendants deny that Plaintiff is the current mortgagee. Further, the mortgage was automatically voided when Defendants' exercised their right to rescind the mortgage loan. 6. Admitted in part and denied in part. Admitted that Defendants are the record and real owners of the premises. Denied that the property is mortgaged. To the contrary, the mortgage was automatically voided when Defendant's exercised their right to rescind the mortgage loan. 7. Denied. The allegations of Paragraph 7 of the Complaint are legal conclusions to which no response is required. To the extent an answer may be appropriate, these allegations are denied. To the contrary, the mortgage was automatically voided when Defendant's exercised their right to rescind the mortgage loan. By way of further answer, Defendants aver that they were lied to and deceived about the transaction and about the terms of the loan and as to the amount required to refinance the mortgage. Further, Plaintiff misrepresented the benefits of the loan to Defendants, leading them to believe that a refinance of the mortgage would improve their financial situation. The mortgage was obtained by fraud, misrepresentation, trickery and other misconduct and is not enforceable. 8. Denied. The allegations of Paragraph 8 of the Complaint are legal conclusions to which no response is required. To the extent an answer may be appropriate, these allegations are denied. To the contrary, the mortgage was automatically voided when Defendant's exercised their right to rescind the mortgage loan. By way of further answer, the mortgage does not set forth the terms of payment but refers to the note, which note is not attached to the Complaint and, therefore, the allegations are denied. 2 9. Denied. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth or falsity of the averment contained in paragraph 9 of the Complaint and therefore denies the allegations thereof. 10. Denied. The allegations are legal conclusions to which no answer is required. To the extent a reply may be appropriate, these allegations are denied, and Defendants aver that the mortgage, note or lien is void for the reasons set forth in Defendants' New Matter and, accordingly, Plaintiff is not entitled to the relief requested. WHEREFORE, Defendants respectfully requests that Plaintiffs claim be dismissed, and that judgment be entered in favor of Defendants with attorney's fees and costs, and that Defendants be awarded any other relief that this Honorable Court deems appropriate. NEW MATTER 11. Defendants incorporate their answers to paragraphs 1 through 10 above as if fully set forth in their entirety. 12.Defendants have resided in their home at 709 McCormick Road, Mechanicsburg, Pennsylvania since 1993. 13.0n February 28, 2008, Defendants refinanced their home with Atlantic Pacific Mortgage Corp., (herein "Lender"). The mortgage was recorded on 04/24/2008 and named Mortgage Electronic Registration Systems, Inc. (herein "MERS"), as mortgagee and nominee for Lender. Subsequent thereto, Wells Fargo began to service this loan. 14. Due to a change in Defendants' financial circumstances and increased expenses, they started to look for a loan with more affordable terms that would lower their rate and reduce the monthly payment by an amount of $400 to $500 each month. 15. Defendants, who had a sizable equity in their home, were a prime target for predatory mortgage lenders and brokers. 16. Defendants were unsophisticated borrowers who did not understand many of the basic terms and costs of a typical mortgage loan transaction. 17. Sometime in December of 2009, Defendants saw an advertisement by Wells Fargo that it made loan refinances to consumers that were suitable and affordable, and made its lending decisions based upon a consumer's credit and ability to pay. 3 18. Defendants contacted Plaintiff Wells Fargo Bank, N.A. (herein "Wells Fargo") who represented to them that it offered a wide range of products as solutions to match a family's income level or credit file and that its selection of loans was built to suit specific needs of a customer and that it was ready to help them find a loan that was perfect for them. Defendants were also told that they were making the right decision to enter into a loan with Wells Fargo and that they could refinance at a better rate. 19.As a result, Defendants were then contacted by an agent or employee of Wells Fargo loans who explained to Defendants that Wells Fargo could offer a new loan that would reduce their mortgage payments. 20.All contacts between Defendants and Wells Fargo or their agent were by phone. Wells Fargo's agent repeated the assertions about the loan's benefits and urged Defendants to complete loan application over the phone. In reliance on Wells Fargo's promises that the loan would lower their monthly mortgage payments, they applied for a loan. 21. Defendants aver that contrary to the representations made Wells Fargo's agent, Plaintiff made a loan to them on terms that differed materially from those represented to them prior to closing, which was not suitable and affordable, was not appropriate for their specific situation and was not based on their ability to pay. By way of example, Wells Fargo's loan representative led Defendants to believe that the principal and interest payment would be in the range of $1700 -- an amount Defendants had indicated would be suitable and affordable. 22.Subsequently, Wells Fargo's agent contacted Defendants and informed them that their loan was ready to close without disclosing the terms of the loan. 23.At the dosing on February 1, 2010, Defendants were presented with four different loan closing instructions, each of which contained different loan terms. Further, the HUD -1 presented at closing was incomplete, contained inaccurate figures and inaccurately disclosed the loan charges imposed by Plaintiff. 24.Additionally, at closing on February 1, 2010, Defendants were presented with a myriad of loan documents to sign over a short period. The settlement agent showed Defendants the documents and told them where to sign while providing no explanation of what they were signing other than a cursory review. Defendants, who lacked 4 financial sophistication and the ability to fully understand the complicated financial documents placed before them, signed all the documents. 25.After attending settlement, Defendants had the opportunity to carefully review the loan documents they had been asked to sign and discovered that the terms of the new loan were not suitable and affordable and were not what had been promised to them when they initially applied for the loan. Moreover, through another mortgage broker, they had been offered better terms with a VA loan. 26. Further, the loan documents were incomplete and contained inaccurate figures, including but not limited to the finance charge and amount financed, in violation of 15 U.S. C. §§ 1602(u), 1635(a), Reg. Z §§ 226.15(a)(3), 226.23(a)(3). 27. Plaintiff failed to make material disclosures pursuant to 15 USC §1602(u), Regulation Z, §§226.18, 226.23(a)(3), n. 48, thus extending Defendants right of rescission up to 3 years after closing. 28.0n February 2, 2010, Defendants contacted Wells Fargo and spoke with its employee and representative, Sharon Eliker, about cancelling the mortgage loan and what steps they needed to take to confirm their rescission. Accordingly, Wells Fargo had notice of Defendants intent to cancel and, thus, was required to delay its own contractual performance until the rescission period had expired. 29. In addition, Defendants communicated in writing their Notice to cancel the loan. A copy of Defendant's letter dated February 2, 2010 and sent to Plaintiff on February 3, 2010 is attached hereto as Exhibit "1" and incorporated by reference herein. 30.The rescission notice sent on February 2, 2010 was mailed by Express Mail to: Wells Fargo, 2001 Killebrew Drive, Minneapolis, MN. Although Defendants used the correct address for the street, city and state in the mailing slip, they inadvertently inserted the wrong zip code ("55225" instead of "55425"). However, while attempting to track their Express Mail, they contacted the U.S. Postal Service and where advised that in spite of the misprinted zip code, the Post Office had delivered their Express Mail envelope on February 4, 2010 to Wells Fargo's with the correct zip code and mailing address of 2001 Killebrew Drive, Minneapolis, MN, "55425". Defendants were also able to confirm via the USPS website that their rescission notice was delivered to Wells Fargo at the correct address on February 4, 2010. 5 31. On February 8, 2010, May 17, 2010 and June 10, 2010, Defendants sent other letters to Wells Fargo, all of which requested a response to their cancellation request and again informing Wells Fargo that they were offered VA loan refinancing with better terms and a lower monthly payment. 32. Concerned by Wells Fargo's delay and failure to act, Defendants communicated by phone with Wells Fargo on several occasions to inquire if Wells Fargo had effectuated the rescission. Defendants were given little information other than that it was being looked into and that Defendants should continue making payments in the meantime to apply to the old loan. 33. Not knowing the status of either the new or old loan and fearing the loss of their home, Defendants continued to make payments waiting for Wells Fargo to comply with their notice to cancel the loan transaction on February 1, 2010. 34. Plaintiff did not process the rescission. Instead, Wells Fargo concocted a plan to avoid its statutory obligation by simply ignoring the communications and failing to timely respond to or act upon Defendants' requests to cancel the loan. 35. Defendants believe and therefore aver that Wells Fargo did not act upon their timely rescission notice(s) because the loan had been table funded in which an undisclosed third party had funded the loan and, as a result, disbursement was made prior to the expiration of the three day rescission period in violation of federal laws. 36. When Wells Fargo did finally respond to Defendants notice to cancel, it claimed that the reason it had not acted upon the Cancellation Request and why it did not process the rescission was because "Mrs. Dorris was not on the loan so her signing the rescission request is invalid as she was not a qualifying party on the loan". Wells Fargo also stated that "Mr. Donald Dorris is actually our borrower and the only qualifying party for whom we should have received the rescission request from, not the non- qualifying spouse. Hence why WFHM did not process the rescission." 37. Defendants' believe and therefore aver that the explanation given by Wells Fargo as to why they did not act on the notice to cancel was a ruse and that the real reason was because the loan had been table funded by an undisclosed third party and the contract performed before the expiration of the rescission period, a fact that Wells Fargo attempted to hide from Defendants. 6 38. The loan transaction designated by Wells Fargo as a Loan, extended consumer credit which was subject to a finance charge and which was initially payable to Wells Fargo. However, no loan was ever made, directly or indirectly by Wells Fargo on the Note and Mortgage because this was a table funded loan in which an undisclosed third party funded the loan. 39. In fact, the Federal National Mortgage Association (FNMA), commonly known as Fannie Mae, claims to own the loan with an acquisition date of 03/01/2010. Thus, in violation of the Truth in Lending Act (TILA), Wells Fargo failed to delay its own contractual performance but allowed Fannie Mae to acquire the loan on the date of closing and prior to the expiration of the three day rescission period. 40. Notwithstanding the above, and without Defendants' knowledge, Wells Fargo had entered into Assignment and Assumption Agreements with one or more parties and Pooling and Service Agreements with one or more parties, including Fannie Mae, prior to or contemporaneously with the "Closing" of the subject "loan transaction." The same was deliberately concealed and the reason Wells Fargo failed to respond to or act upon Defendants' notice to cancel the loan transaction. 41. Furthermore, contrary to the documents presented before and during the "closing" of the "loan transaction", Wells Fargo was neither the source of funding nor the "Lender." 42. Thus at the time of closing, the source of funding and the "Lender" was a different entity than the nominal mortgagee and was neither named nor disclosed in any fashion. 43. The Dorris mortgage was defective on its face for naming the wrong lender and for not disclosing, as required by Federal and Pennsylvania law all the parties to the transaction and all the intermediaries who were receiving compensation and profits arising from the origination of the loan — since it was the investor funds that were used in the origination or acquisition of the loan. 44. Defendants affirmatively allege that they were tricked into signing the documents that were predicated upon the advance of money by the originator — an advance that never occurred. 45. Unbeknownst to Dorris, immediately at closing and prior to the expiration of the three day right to cancel, the mortgage loan was assigned, transferred or sold to Fannie 7 Mae, who then packaged it for securitization purposes and transferred it to one or more Trusts, in the form of Mortgage Backed Securities. Securitization is the financial practice of pooling various types of contractual debt such as residential mortgages and selling said consolidated mortgage debt as bonds, pass-through securities, or collateralized mortgage obligation (CMOs), to various investors. 46.There is no assignment of the subject mortgage in the county records to Fannie Mae, but there is a non -recorded Pooling and Services" Agreement and a non -recorded Assignment and Assumption Agreement 47. Accordingly, Defendants affirmatively allege that the loan transaction was a sham unsupported by consideration and that the true lender was concealed from Defendants for the purpose of creating a false paper trail and a false history of payments that would encourage investors to buy more mortgage bonds. 48. Moreover, by concealing and blocking information about the true lender and failing to act upon Defendants' notice to cancel, Defendants were denied compliance under the TILA, Real Estate Settlement Procedures Act (RESPA), and other applicable state and Federal Statutes, which the Plaintiff has either ignored or refused to acknowledge or refused to resolve. 49.The note from the subject "loan transaction" was eventually allocated into a new corporation (Special Purpose Vehicle) formed for the express purpose of holding the pooled assets under certain terms. 50.The pool assets, including the Plaintiff's subject "loan transaction" were pledged completely to the owners of the "asset-backed securities." All the certificates were then transferred to a Seller who in turn sold the certificates in varying denominations, each of which had slightly different terms depending upon which segment of the pool (tranche) secured the investment. 51. If there is a holder in due course of the Defendant's note arising from the subject "loan transaction" it is the investors who purchased said securities (certificates). 52. In order for this Plaintiff to maintain legal standing in connection with the subject loan transaction they are required to show the entire chain of title of the note and the entire chain of title of the mortgage. 8 53.The fact that the "loan" was table -funded without a disclosed source of funds and without disclosing thousands of dollars in fees all contrary to the requirements of state and federal law was withheld from Defendants by Wells Fargo and continues to be withheld by Plaintiff. But for the expenditure of time, money and effort on research, Defendants would not have discovered the various deceptions of the Wells Fargo at the alleged loan closing. 54. Defendants believe and therefore aver that the closing was an "alleged loan closing" because in fact it was part of an undisclosed hidden illegal scheme to issue unregulated securities (mortgage backed securities) based upon the negotiation of non-negotiable notes, the terms of which had been changed, altered, amended or modified AFTER the execution by the Defendants. 55.Wells Fargo then purported to "negotiate" the note by adding terms which allowed the proceeds of the note to be allocated to the payment of the notes of other borrowers and adding co -obligors as aforesaid through insurance, guarantees, additional collateralization and reserves all of which were undisclosed, as aforesaid. 56.The note was not negotiable because it was no longer an unconditional promise to pay by the original borrower. The terms had changed, adding conditions to payment that were inherent in the "securitization process" that Wells Fargo fraudulently promoted. 57. Said "negotiation" of Defendant's note was in actuality the theft of his identity to hide the vast number of "toxic waste" mortgages, notes and obligations that the enterprise Wells Fargo was selling up through their "securitization" chain. 58. The end result of the false and misleading representations and material omissions of Wells Fargo as to the true nature of the mortgage loan actually being processed, which said Wells Fargo had actual knowledge was in direct conflict with the original Uniform Residential Loan Application, early TIL, and Defendant's stated intentions and directions to said Wells Fargo at the time of original application for the loan, fraudulently caused Defendant to execute predatory loan documents. Wells Fargo continued the false and misleading representations and material omissions when they failed to respond to Defendants' rescission notice(s) or take action necessary to terminate the security interest and return any money, including that which may have passed on to a third party. 9 59. At no time whatsoever did Wells Fargo ever advise Defendants (nor, as far as Defendants can determine, any "investor" in certificates of mortgage-backed securities) that: a. the mortgage loan being processed was not in their best interest; b. that based on Defendant's position and lack of financial sophistication, the loan being processed was unconscionable, improvident and costly, while providing them little economic benefit; c. that the mortgage loan was an inter -temporal transaction (transaction where terms, risks, or provisions at the commencement of the transaction differ at a later time) on which Defendants were providing cover for Wells Fargo's illegal activities; d. that the originating "lender", that being Wells Fargo and/or Fannie Mae, had no intention of retaining ownership interest in the mortgage loan or fully servicing same and in fact may have and probably had already pre -sold the loan, prior to closing, to a third party mortgage aggregator pursuant to previously executed documentation (Assumption and assignment Agreement, Pooling Services Agreement, etc.) all executed prior to Defendants' "loan Closing." e. that the mortgage loan was actually intended to be repeatedly sold and assigned to multiple third parties, including one or more mortgage aggregators and investment bankers, for the ultimate purpose of bundling the Defendants' mortgage with hundreds or perhaps thousands of others as part of a companion, support, or other tranche in connection with the creation of a REMIC security known as a Collateralized Mortgage Obligation ("CMO"), also known as a "mortgage-backed security" to be sold by a securities firm (and which in fact ended up as collateral for Asset -Backed Securities Certificates, created the same year as the closing); f. that the mortgage instrument and Promissory Note may be sold, transferred, or assigned separately to separate third parties so that the later "holder" of the Promissory Note may not be in privity with or have the legal right to foreclose in the event of default; and g. that in connection with the multiple down line resale and assignment of the mortgage and Promissory Note that assignees or purchasers of the Note may make 10 "pay -downs" against the Note which may effect the true amount owed by the Defendant on the Note. 60. As a result of the closing and in connection therewith, Wells Fargo placed the Defendants into a pool of a sub -prime mortgage programs, with Wells Fargo intentionally misleading Defendants and the other borrowers and engaging in material omissions by failing to disclose to Defendants and other borrowers the fact that the nature of the mortgage loan applications had been materially changed without Defendants' knowledge or consent. 61. Wells Fargo was under numerous legal obligations as fiduciaries and had the responsibility for overseeing the purported loan consummation to insure that the consummation was legal, proper, and that Defendants received all legally required disclosures pursuant to the TILA and RESPA both before and after the closing. 62. Defendants, not being in the consumer lending, mortgage broker, or residential loan business, reasonably relied upon Wells Fargo, to insure that the consumer credit transaction was legal, proper, and complied with all applicable laws and regulations. 63.Wells Fargo assigned or attempted to assign the Note and mortgage to parties who did not take these instruments in good faith or without notice that the instruments were invalid or that Defendants had timely exercised their right to cancel the mortgage. 64.0n or before February 3, 2010, Defendants timely notified Wells Fargo that they were exercising the right to rescind the loan transaction. See Exhibit "1" attached hereto. 65.0n February 8, 2010, May 17, 2010 and June 10, 2010, Defendants again timely notified Wells Fargo that they were exercising their right to rescind the loan transaction, which right was extended due to Wells Fargo's failure to make material disclosures pursuant to the TILA. 66. Pursuant to the "Right of Rescission" provisions of the Truth and Lending Act ("TILA) including but not limited to, 15 U.S. C. § 1635 and rescission remedies of Regulation Z (Closed End Credit: § 226.23) Defendants rescinded the above referenced loan and have made demand for restitution, reformation and other equitable relief against the original lender referenced and any lender assignees (15 U.S.C. § 1641(c)). AFFIRMATIVE DEFENSES 11 67. Plaintiff has failed to state a claim upon which relief can be granted. Plaintiffs Complaint fails to state facts sufficient to constitute a cause of action against the Defendants for which relief can be granted. 68. Defendants timely elected to rescind the transaction with Wells Fargo, pursuant to their right of rescission, by sending the Notice to cancel to Plaintiff within three business days after closing on February 1, 2010 and also by sending other Notice(s) to cancel to Plaintiff within the extended three year period. 69.When a consumer elects to rescind pursuant to the Truth -in -Lending Act, any security interest taken in connection with the transaction becomes void. 15 U.S.C. § 1635(b). 70. The mortgage that is the subject of this action was taken in connection with the transaction that Defendants have elected to rescind. 71. Since the mortgage is now void, this case is due to be dismissed. 72. Defendants invoke the Doctrine of Unclean Hands as the Defendants allege that the Plaintiff acted in a dishonest or fraudulent manner with respect to the dispute at issue in this case. 73. Defendant alleges that Plaintiffs Complaint and cause of action therein is barred by the Doctrine of Estoppel. 74. Plaintiff does not properly hold the mortgage it recorded and Plaintiff has failed to join the proper party with the rights of enforcement. Therefore, Plaintiff has failed to join indispensable parties. 75. Plaintiff is not the true owner of the claim sued upon, is not the real party in interest and is not shown to be authorized to bring this action. 76. Upon information and belief, the mortgage note has been paid in whole or in part by one or more undisclosed third party(ies) who, prior to or contemporaneously with the closing on the "loan", paid the originating lender (Wells Fargo) in exchange for certain unrecorded rights to the revenues arising out of the loan documents. 77. Upon information and belief and in connection with the matters the subject of the paragraph immediately above, Plaintiff has no financial interest in the note or mortgage. 12 78. Upon information and belief, the original note was destroyed or was transferred to a structured investment vehicle, which also has no interest in the note or mortgage or revenue thereunder. 79. Upon information and belief, the revenue stream deriving from the note and mortgage was eviscerated upon one or more assignments of the note and mortgage to third parties and parsing of obligations as part of the securitization process, some of whom were joined as co -obligors and co -obligees in connection with the closing. 80. To the extent that Wells Fargo has been paid on the underlying obligation or has no legal interest therein or in the note or mortgage, or does not have lawful possession of the note or mortgage, Plaintiff's allegations of possession and capacity to institute this lawsuit constitute a fraud upon the court. 81. Based upon one or more of the affirmative defenses set forth herein, the rescinded note and mortgage are void and Defendants are entitled to a dismissal of the Plaintiff's claim with prejudice. 82.The Plaintiff comes to court with unclean hands and is prohibited by reason thereof from obtaining the equitable relief it seeks from this Court. 83.The Plaintiff's unclean hands result from the improvident and predatory lending, failure to disclose the material terms of the loan transaction and failure to comply with Defendant's Notice of Rescission requirements that applies to this loan, all as described herein above. 84. This court should refuse Plaintiff's request for relief because the mortgage was timely rescinded and, thus, void. WHEREFORE, Defendants respectfully requests that Plaintiffs claim be dismissed, and that judgment be entered in favor of Defendants with attorney's fees and costs, and that Defendants be awarded any other relief that this Honorable Court deems appropriate. COUNTERCLAIMS GENERAL ALLEGATIONS 85. The Defendants reassert and allege, as their statement of facts, paragraphs 1 through 84 above as if set forth at length herein. 13 86. This counterclaim is an action in support of a single consumer victim of predatory lending who was fraudulently induced into a mortgage loan transaction, for which they did not bargain, that was not in their interest, that was misrepresented and coerced, that incorporated falsified documents, that violated state laws, that violated federal laws, that violated common laws, and for which plaintiff-counter-defendant has profited or is attempting to profit to the consumer's detriment. 87. Defendants aver that Wells Fargo issued securities collateralized by the mortgage under a master pooling and servicing agreement by which all legal and equitable interest was transferred to undisclosed certificate holders; and, accordingly, Plaintiff Wells Fargo is not the holder or owner of the note. 88. Defendants aver that Wells Fargo through Fannie Mae, by selling and securitizing the mortgage and note given by Defendant as a publicly traded security available on an open and public securities market, had already recovered (Le. been paid fair market value) any investment it had made in the Defendant's note, and accordingly, Wells Fargo had thereafter no injury standing or personal stake in this action. 89. Plaintiff falsely holds itself out to be the holder in due course or lawfully designated agent for the true holder in due course. 90. Plaintiff is not the genuine creditor, and, further, Wells Fargo engaged in the sham of securitized mortgage finance without affording or extending any genuine credit to Defendant, solely for private (corporate) enrichment through a combination of securities fraud (the securitization of mortgage notes without benefit or credit to the consumer "grantor" such as the defendant herein or disclosure in the "origination" process of creating the security). 91. Defendants allege that the signed mortgage agreement itself was bundled, sold, and transferred together with the note as a collateral backed obligation, and that Plaintiff is aware of this fact, and of the unavailability of the current actual note owner to appear in court, due to lack of actual interest in the subject property, and that Plaintiff has profited from this transaction without giving any notice or credit to the Defendants (whose interest in the property should be adjudicated and evaluated in light of the fiduciary accounting demanded and violates of fiduciary duty alleged in the following paragraphs). 14 92. What renders this action "typical" of a growing number of mortgage foreclosure proceedings in the United States and yet completely illegal is that Plaintiff is acting as servicer only and, upon information and belief, cannot show that it owns, or if it claims to own, how it acquired by purchase, as opposed to mere "nomination" any legal or equitable interest in the note, for which note Wells Fargo, in fact, was compensated by selling the note. 93. Defendants believe and therefore allege that Plaintiff does not own the original ink - signed "paper" note and that any interest or authority it may have regarding this note is divorced from legal or equitable rights of ownership. 94. Further, because Defendant's mortgage was securitized without Defendant's knowledge or consent and because Defendants timely canceled the loan, the mortgage was rendered unenforceable. Plaintiff Tacks standing because plaintiff does not own or hold the note and cannot have the power and authority to represent the actual owners of the note, as a matter of law. COUNT I: DECLARATORY AND INJUNCTIVE RELIEF 95. The Defendants reassert and allege, as their statement of facts, paragraphs 1 through 94 above as if set forth at length herein. 96.This is an action for declaratory and injunctive relief against the Plaintiff. 97.The Plaintiff has no right to pursue the claims it seeks because the Plaintiff received timely notice of Defendants election to cancel the mortgage. 98. Defendants are consumers within the meaning of the TILA. 15 U.S.C. § 1602(h). 99. Plaintiff is a creditor within the meaning of the TILA in that they regularly extend or offer to extend consumer credit. 15 U.S.C. § 1602(f). 100. The transaction between Plaintiff and Defendants is subject to a finance charge or is payable by a written agreement in more than four installment payments. 15 U.S.C. § 1602(f). 101. The credit extended to Defendants by Plaintiff is for personal, family, or household purposes. 15 U.S.C. § 1602(h). 15 102. As part of this consumer credit transaction, Plaintiff retained a security interest in 709 McCormick Road, Mechanicsburg, PA, which is Defendants' home. 103. The security interest was not created to finance the acquisition or initial construction of Defendants' home. 104. This consumer credit transaction was subject to Defendants' right of rescission. 15 U.S.C. § 1635 and Regulation Z § 226.23. 105. Any consumer "whose ownership interest is or will be subject to the security interest" has the right to rescind the transaction and to receive the disclosures". Reg. Z § 226.15(a)(1). 106. On February 3, 2010, Defendant Elizabeth M. Dorris rescinded the transaction by sending notice of rescission to Plaintiff, which notice was delivered to Plaintiff on February 4, 2010. 107. More than 20 calendar days have passed since Wells Fargo received Defendants' notice of rescission. 108. Plaintiff has failed to take any action necessary or appropriate to reflect the termination of any security interest created by the transaction, as required by 15 U.S.C. § 1635(b) and Regulation Z § 226.23(d)(2). 109. Plaintiff has failed to return to Defendants any money or property given by the Defendants to anyone, including Wells Fargo, as required by 15 U.S.C. § 1635(b) and Regulation Z § 226.23(d)(2). 110. As a result of the above mentioned violations of the Truth in Lending Act and Regulation Z, Plaintiff is liable to Defendants for: a. Rescission of the transaction pursuant to 15 U.S.C. § 1635(b). b. Termination of any security interest in Defendants' property created by the transaction pursuant to 15 U.S.C. § 1635. c. Return of any money or property given by the Defendants to anyone, including Wells Fargo, in connection with this transaction, under 15 U.S.C. § 1635(b). e. Statutory damages of $2000 for Plaintiffs failure to respond properly to Defendants' rescission notice pursuant to 15 U.S.C. § 1640(a)(2)(A). f. Forfeiture of return of loan proceeds under 15 U.S.C. § 1635. 16 g. Actual damages in an amount to be determined pursuant to 15 U.S.C. § 1640. h. Costs and a reasonable attorney fee in accordance with 15 U.S.C. § 1640. WHEREFORE, Defendants request the following relief: A. Declaratory and/or injunctive relief rescinding the mortgage on Defendants' home and declaring the mortgage void; B. Order Plaintiff to take all action necessary to terminate any security interest in Defendants' property created under the transaction and that the Court declare all such security interests void, including but not limited to the mortgage related to the transaction of February 1, 2010; C. Order the return to the Defendants of any money or property given by the Defendants to anyone, including the Plaintiff, in connection with the transaction; D. Enjoin Plaintiff during the pendency of this action, and permanently thereafter, from instituting, prosecuting, or maintaining foreclosure proceedings on the Defendants' property, from recording any deeds or mortgages regarding the property or from otherwise taking any steps to deprive Defendants of ownership of that property; E. Award the Defendants statutory damages for Plaintiff's failure to respond properly to the Defendants' rescission notice, in the amount of twice the finance charge in connection with this transaction, but not Tess than $200 or more than $2,000 as provided under 15 U.S.C. § 1640(a); F. Order that, because the Plaintiff failed to respond to the Defendants' notice of rescission, the Defendants have no duty to tender, but in the alternative, if tender is required, determine the amount of the tender obligation in light of all of the Defendants' claims, and order the Plaintiff to accept tender on reasonable terms and over a reasonable period of time, provided Plaintiff establishes that it actually funded the account to pay off Defendants' previous mortgage loan; G. Award actual damages in an amount to be established at trial; H. Award the Defendants' costs and a reasonable attorney fee as provided under 15 U.S.C. § 1640(a); I. Award such other and further relief as the Court deems just and proper. COUNT II: COMPLAINT TO QUIET TITLE TO REAL PROPERTY 111. Paragraphs 1 through 94 above are incorporated herein as if set forth at length herein. 112. Defendant has sent or has caused to be sent a timely Notice of Rescission to Plaintiff, which the said Plaintiff has failed and refused to answer. 17 113. The real party in interest on the lender side may be the owner of the asset backed security issued by the SPV, the insurer through some claim of equitable interest, or the Federal government through the United States Department of the Treasury or the Federal Reserve. The security is a "securitized" bond deriving its value from the underlying mortgages of which the subject mortgage is one. Thus Defendants are entitled to quiet title against Wells Fargo, clearing title of the purported subject mortgage encumbrance. 114. Defendants are informed and believe and thereon allege that, at all times herein mentioned, the claim of Wells Fargo is without any right whatsoever, and said Wells Fargo has no legal or equitable right, claim, or interest in said property. 115. Defendants therefore seek a declaration that the title to the subject property is vested in Defendants alone and that Wells Fargo be declared to have no estate, right, title or interest in the subject property and that said Wells Fargo be forever enjoined from asserting any estate, right, title or interest in the subject property adverse to Defendants herein, WHEREFORE, in this Count, Defendants pray this Court will enter judgment against Plaintiff as follows: A. For an order compelling said Wells Fargo to transfer or release legal title and alleged encumbrances thereon and possession of the subject property to Defendants herein; B. For a declaration and determination that Defendants are the rightful holders of title to the property and that Wells Fargo be declared to have no estate, right, title or interest in said property; C. For a judgment forever enjoining said Wells Fargo from claiming any estate, right, title or interest in the subject property; D. For costs of suit herein incurred and statutory damages for failing to respond to Defendants' Notice of Rescission; E. For such other and further relief as the court may deem proper COUNT III: VIOLATIONS OF UNFAIR TRADE PRACTICE ACT 116. Paragraphs 1 through 94 above are incorporated herein as if set forth at length herein. 117. The actions of Plaintiff alleged hereinabove constitute a transaction, practice or course of business which operated as a fraud or deceit upon Defendants. 18 118. The acts, conduct or activity of Plaintiff described hereinabove constitute a violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 P.S. Section 201-2 et seq., ("Act") in that Plaintiff: failed to comply with the Defendant's rescission rights; failed to comply with express statements and assurances; failed to acknowledge and act promptly upon oral or written communication with respect to Defendants' dispute of the loan transaction; and failed to provide applicable mortgage servicing protocols. 119. Plaintiff's activities violated the Act in the following particulars: a. The Plaintiff is claiming, attempting and threatening to enforce this consumer mortgage debt by a bogus action when the Plaintiff knows that it does not have standing and the right to pursue the action does not exist. b. Plaintiff does not have a legal right to pursue this action because Defendant rescinded the mortgage and the mortgage is void. c. Plaintiff has failed to respond to Defendant's Notice of Rescission or otherwise comply with the Pooling and Servicing or trust Agreement that controls and applies to the subject mortgage loan. d. Plaintiff is not the true current owner of the note because Plaintiff does not know the true holder in due course of the note after Wells Fargo sold it and, further, it is a fraud and violation of the Pennsylvania UDAP to falsely claim to be a lawful or nominee for the true holder in due course in order to collect a note for a party actually unknown to Plaintiff. e. Plaintiff took advantage of Defendants and wrongfully manipulated and controlled the mortgage financing unfairly to disadvantage Defendants, who were kept in the dark and deprived of a full and complete understanding of the mortgage credit transaction upon when they entered into, and, that Plaintiff had a duty to divulge the true nature of the mortgage financing transaction, including that the note would be sold to parties unknown and perhaps unascertainable and that Wells Fargo would profit from the origination of Defendant's note immediately upon Defendant's signing of the note which Wells Fargo originated. f. By creating a mortgage backed security or collateral backed obligation of the undisclosed sale, securitization, and transfer of Defendant's mortgage note and contractual obligation and without consent, or even disclosure or notice of the intent to securitize and bundle Defendant's identity in the creation of a securitized equity or collateral based obligation, effected a conversion by fraud of the identity and other intangible rights of Defendant in this transaction. 19 g. Defendants allege that they made payments to Plaintiff in reliance on the aforesaid misrepresentations of fact concealing the status of their rescission, the actual sale or transfers of the legal and equitable interests in Defendant's note to another party, and were thereby injured, by suffering actual monetary losses. h. Plaintiff has engaged in unfair and deceptive trade practices with their sale or transfer of securities (mortgage notes) into securitized bundles, and also in connection with concealing the true nature of the transactions involved in mortgage note `lending" or "origination" as defined under the U.C.C. and thereby swindled these Defendants of many thousands of dollars above the actual value of the note issued and signed by Defendant. i. The securitization of Defendant's mortgage note intended for sale on public securities markets by Wells Fargo is a deceptive and misleading devise, scheme, and artifice to defraud Defendant. 120. By failing to act upon and process Defendants notice to cancel and by failing to fully and fairly disclose all material facts regarding Defendant's loan transaction, Plaintiff has engaged in unfair and deceptive acts or practices within the meaning of the Act, 73 P.S. Section 201-1 et seq. and Defendants are entitled to recover treble damages. 121. Plaintiff continues to claim, attempt, and threaten to enforce the loan transaction when the Plaintiff knows that such conduct is in bad faith and that Plaintiff in predatory lending, charged and collected money from defendants that they did not owe; withheld the true nature of the transaction and securitization of the loan, forced defendants into deepening indebtedness and then failed to meet the contractual and statutory conditions regarding Defendants' right to cancel before filing this action to foreclose against Defendants' home. 122. As a result of the Plaintiff's actions and engagement in predatory lending and failure to properly rescind this mortgage loan instead of filing this action, Defendants have been damaged and Defendants seek to recover their actual and statutory damages from Plaintiff under 73 P.S. Section 201-1 et seq. WHEREFORE, Defendants demand the Plaintiff's complaint be dismissed with prejudice, for an award of TREBLE DAMAGES in defendant's favor and against the plaintiff for their actual or statutory damages whichever is greater and for their attorney's 20 fees and costs and for all other relief to which this Court finds Defendant entitled pursuant to 73 P.S. Section 201-9.2. COUNT IV: BREACH OF CONTRACT 123. Paragraphs 1 through 94 above are incorporated herein as if set forth at length herein. 124. The conduct, practices and activities of Plaintiff described herein constitute a material breach of its implied duty to act in good faith and fair dealing and, further, constitute a material breach of the representations, statements and undertakings set forth hereinabove, and made expressly or implicitly a part of said agreement for which breach Defendant is entitled to recover damages. 125. Plaintiff has breached its agreement and its duty to exercise good faith to Defendant's detriment. WHEREFORE, defendant requests judgment against Plaintiff in an amount not yet quantified but to be proven at trial and such other amounts to be proven at trial, and for costs and attorneys' fees; that the Court find that the transactions the subject of this action are illegal and are deemed void; that the action which was instituted be deemed and declared illegal and void and that further proceedings in connection with this action be enjoined; and for any other relief which is just and proper. COUNT V: FRAUDULENT MISREPRESENTATION 126. Paragraphs 1 through 94 above are incorporated herein as if set forth at length herein. 127. Dorris is informed and believes and thereon alleges that Wells Fargo is merely a servicer of the loan and entered into Servicing Agreements with one or more parties for the purchase of servicing rights. 128. Plaintiff engaged in a course of conduct to continue to disguise the original loan transaction so as not to disclose that the real party in interest, i.e. the source of funding for the loan and the person to whom the note was transmitted or eventually "assigned" was neither a financial institution nor an entity or person authorized, chartered or 21 registered to do business in Pennsylvania nor to act as a banking, lending or other financial institution anywhere else. 129. Wells Fargo knowingly and intentionally concealed material information from Defendants which is required by Federal Statutes and Regulations to be disclosed to the Defendant both before and at the closing. 130. Wells Fargo knowingly and intentionally concealed material information about Defendants' election to cancel the loan and the reason Wells Fargo did not act upon and process Defendants' timely notice to cancel the loan transaction. 131. Wells Fargo also materially misrepresented material information to the Defendants with full knowledge by Wells Fargo that their affirmative representations were false, fraudulent, and misrepresented the truth at the time said representations were made. 132. Under the circumstances, the material omissions and material misrepresentations of the Wells Fargo were malicious. 133. Defendants, not being an investment banker, securities dealer, mortgage lender, mortgage broker, or mortgage lender, reasonably relied upon the representations of Wells Fargo in agreeing to execute the mortgage loan documents. 134. Had Defendants known of the falsity of Wells Fargo's representations, they would not have entered into the transactions the subject of this action. 135. Wells Fargo's material omissions and material misrepresentations constitute fraud in the inducement and Wells Fargo is liable to Defendant for the following, which Defendant demands as relief. WHEREFORE, defendant requests judgment against Plaintiff as follows: A. rescission of the mortgage loan transactions; B. termination of the mortgage and security interest in the property the subject of the mortgage loan documents created in the transaction; C. return of any money or property paid by the Defendant including all payments made in connection with the transactions; D. an amount of money equal to treble the finance charge in connection with the transactions; E. relinquishment of the right to retain any proceeds; and 22 F. actual damages in an amount to be determined at trial, including attorneys' fees. DEMAND FOR JURY TRIAL Defendants demands trial by jury of all matters so triable as a matter of right. Date: ii/Z2/ 23 Respectfully submitted, Stephen K. Portko, Esquire #34538 101 South U.S. Route 15 Dillsburg, PA 17019 (717)432-9706 Attorneys for Defendants Wells Fargo Bank, N.A. 2001 Killebrew Drve Minnesapolis MN 55425 Attention: Karen lblings Dear Karen: Elizabeth M Dorris . 709 McCormickRoad Mechanicsburg, Pa 17055 Phone: 717-512-9700 Feb 2, 2010 RE: Notice of Right to Cancel' As per a conversation with Sharon Eliker we have decided to exercise are right to cancel the refinance as stated in the the Right to Cancel Notice that came with the documents, Please acknowledge as we found out we can receive a better loan and interest rate from the VA as my husband is a disabled Vet. Find enclosed the cancellation form. Thank for your co-operation in this matter. Elizabeth Dorris Oft EXPRESS Customer L III III 111111 111101 „ ostpfficelb Additittes El '857257853 US' • ' DELIVERY (POSTAL USE ONLY) - ORIGIN (POSTAL SEOVICE USE ONLY) Posengt. 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AN,. lur Lt.:..: 1. 434 , , , • • •, egt • gi 4. , t . ri roiatma, Winne 4•001•114Yegutt 11 . .4••44, 34 44'.. ..,, . 81/'115 .r.4 .1r# it 4. 4. . 4 .4 . i -1.: ... .. • :# . . • . • • VERIFICATION I, Elizabeth Dorris, hereby acknowledge that I am a Defendant in the foregoing pleading, that I have read the foregoing, and the facts stated therein are true and correct to the best of my knowledge, information and belief. 1 understand that any false statements herein are made subject to penalties of 18 Pa.C.S. Section 4904, relating to unsworn falsification to authorities. DATE: 1f/ / tdhaiti‘e; Elizabet1 Dorris CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing Amended Answer with New Matter and Counterclaims was provided by U.S. Mail, postage prepaid, first class, to the following: Date: Craig A. Hirneisen, Esquire STEVENS & LEE 111 N. Sixth Street P.O. Box 679 Reading PA 19603 BY: Stephen K. Portko Al- _3.t.rice.. IN THE COURT OF COMMON PLEAS OF C ! HBO CUMBERLAND COUNTY, PENNSYLVANIA 2i4-I Pil 2: F�y� WELLS FARGO BANK, N.A., Plaintiff : CIVIL DIVISION v. : NO. 13-2237 Civil DONALD D. DORRIS, JR. A/K/A DONALD D. DORRIS and ELIZABETH M. DORRIS, Defendants : CUMBERLAND COUNTY PENNSYLVANIA PRAECIPE TO MARK PLAINTIFF'S PRELIMINARY OBJECTIONS TO DEFENDANTS' ANSWER WITH NEW MATTER AND COUNTERCLAIM AS MOOT And TO REMOVE PLAINTIFF'S LISTING CASE FOR ARGUMENT Please mark as moot the Plaintiff's Preliminary Objections to Defendants' Answer with New Matter and Counterclaim. Pursuant to Pennsylvania Rules of Civil Procedure Rule 1028(c)(1) "[A] party may file an amended pleading as of course within twenty days after service of a copy of preliminary objections." Defendants have filed an amended pleading as of course and Plaintiff's preliminary objections to the original pleading shall be deemed moot. The preliminary objections being deemed moot, kindly remove and/or notify the Court Administrator to remove Plaintiffs listing case for Argument. Respectfully submitted Dated: 124(((L -j 1 Stephen K. Portko, Esq. 101 South U.S. Route 15 Dillsburg, PA 17019 Attorney for Defendants Donald and Elizabeth Dorris CERTIFICATE OF SERVICE. I HEREBY CERTIFY that the foregoing "Praecipe to Mark Plaintiff's Preliminary Objections to Defendants' Answer With New Matter and Counterclaim as Moot and to Remove Listing of Case for Argument" was provided by U.S. Mail, postage prepaid, first class, to the following: Date: 14/ f'/q Craig A. Hirneisen, Esquire STEVENS & LEE 111 N. Sixth Street P.O. Box 679 Reading PA 19603 BY:Lc-- 2 Stephen K. Portko