A Walterboro (Colleton County) South Carolina Judge has ordered the production of numerous documents requested by the homeowner to which the foreclosing plaintiff (SunTrust) objected. The homeowner is represented by Jeff Barnes, Esq. and local South Carolina counsel William H. Sloan, Esq. Mr. Barnes argued the matter in Walterboro in connection with the homeowner’s Motion to Compel documentary discovery to which SunTrust objected.

The Court issued a narrative Order which compels the production of all documents as to the chain of title and money transfer between the original lender and SunTrust as to and for the life of the loan; documents showing the servicing relationship between Freddie Mac and SunTrust; documents showing the authority of MERS to act on behalf of Freddie Mac and SunTrust; documents regarding SunTrust’s application of funds from TARP or any other program regarding payments made towards and in connection with the claimed default on the loan; and documents demonstrating the authority of SunTrust to modify the loan or otherwise complete foreclosure intervention as required by South Carolina Administrative Order.

The Order explained its reasoning for compelling the particular documents. The Court found that the MERS documents were relevant as “MERS signed the assignment of Mortgage that is the basis of Plaintiff’s claimed standing to sue and bring this foreclosure action.”

The Court found that the TARP documents were relevant “as the Plaintiff [SunTrust] may have been forced to accept funds from the U.S. Government and some of these funds may have been applied as an offset to this loan by Plaintiff, Freddie Mac, or a predecessor in interest to the loan”, and, significantly, that the homeowner “may also be allowed to use TARP funds received by the Plaintiff related to this loan in connection with any loan modification or intervention required by the applicable statute.”

This is the first Court Order which we know of which compels documents related to the application and receipt of funds by a foreclosing party from TARP or other programs, and also the first Court Order we are aware of which permits the homeowner to apply received third party funds (TARP or otherwise) as a setoff to the loan or in connection with a loan mod.

A full copy of the Order is available upon e-mail request to us.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com