Documents sold on the Internet and a $700,000 “International Bill of Exchange” weren’t able to keep a minister from losing his 5,608-SF west Little Rock home in a long-running foreclosure action.
However, the “sovereign” actions by Lawrence and Delois Braggs are delaying their eviction by U.S. Bank of Cincinnati.
The meandering path of the case that began in Pulaski County Circuit Court in 2011 is back where it started after two detours to U.S. Bankruptcy Court.
The couple remains entrenched in the house at 15621 Sorrells Road despite defaulting on a residential loan more than three years ago and finally losing title to the property this summer at a $635,000 foreclosure sale.
In April, a $700,000 International Bill of Exchange was sent to settle the matter. But the servicing agent for the loan, an affiliate of Wells Fargo, deemed the check-like payment sent by Lawrence Braggs as worthless.
“The alleged payment claimed in this case does not represent legal payment and cannot be accepted under the terms of the note and deed of trust,” said Jim Hines, assistant vice president of consumer lending communications for Wells Fargo in Chicago.
“This is just one of a number of similar strategies with no real legal basis that we see some borrowers attempt from time to time in an effort to avoid living up to the terms of their financial obligations.”
An international bill of exchange typically purports to shift a debt from an individual to the U.S. Treasury. This phantom financial vehicle is associated with the “sovereign citizen” movement, whose adherents, in general, believe they aren’t necessarily subject to the bounds of federal, state and local law.
The legal logic supporting the financial facade of an IBOE often features a blend of pseudo-Christianity mixed with common-law trappings. Braggs, who is acting as his own attorney in this year’s round of legal action, couldn’t be reached for comment.
“A lot of borrowers play a delay game and try to stay in the house as long as possible,” said a Little Rock lawyer who routinely handles foreclosure actions.
“But the law is pretty cut-and-dry unless there is fraud or the foreclosure statute was not strictly followed.”
U.S. Bank, as trustee for a mortgage-backed securities portfolio that includes the Braggs home loan, is trying to evict him while countering his unspecified allegations of fraud and more.
The mortgage dispute highlights the lengths to which some borrowers will go to fight foreclosure and the legal twists and turns lenders sometimes must navigate to recover collateral.
Lawrence Braggs’ residential loan problems are shared by his similarly named brother Larry, and his wife, Angela. Their west Little Rock home is following a similar winding path of foreclosure that also includes two trips to bankruptcy court and the introduction of sovereign citizen maneuvering to battle eviction from his home at 42 Longwell Loop.
The housing controversies of the Braggs family are linked with the financial travails of their Awareness International Ministries at 900 S. Pine St. The Little Rock church, originally known as Trumpet In Zion, went through Chapter 11 bankruptcy reorganization during October 2012-July 2013.
Lawrence Braggs was unable to keep the loan current on the Sorrells Road house months before the church’s Chapter 11, and that situation didn’t improve after the church emerged from bankruptcy court.
The financial restructuring of Awareness International Ministries included restructuring the financial compensation of Braggs, who founded the church and bears the titles of chairman, president, CEO and pastor.
The five-year Chapter 11 reorganization plan set his maximum monthly pay at $4,400 per month. However, the monthly payment on the home loan is $6,111, according to filings in the foreclosure action.
Despite that ugly mathematical reality, Braggs continues to battle the foreclosure. He began adopting the tactics of the sovereign citizen movement in legal filings this year.
In responding to the eviction action, he and his wife filed an affidavit of special appearance in which they are identified as “a living free man and woman of the soil” who are responding sui juris, not under the power of another.
Included in his sovereign notices was a settlement offer that would forgive him of the full amount of the “fraudulent” debt, grant him payment of $200,000 and bar any negative comments on his credit report.
In exchange, Braggs would forgive and not pursue any financial claims for damages.
Despite his specific “letter of instruction,” the loan servicing company — America’s Servicing Co. of Des Moines, Iowa — declined to zero out his mortgage account. The letter instructed the company as follows:
1) Process the International Bill of Exchange through the collection department of your bank.
2) Your bank is required by law to treat the instrument as an obligation of the United States to the bank.
3) Once the International Bill of Exchange is used as an asset such as a borrower in custody (BIC) arrangement, you are required by law to adjust the account, provide to me a copy of the executed/franked document and evidence of the discharge accounting within 30 days of receipt of these documents. (See attached Memorandum of Law and Points and Authorities document)
4) Should you fail to adjust the account and/or respond within 30 days, the Notary Public will note your non-response with a certificate of non-response.
5) Should you fail to respond and act accordingly, your non action will be evidence of conversion (theft) of funds.
The template for the letter of instruction and other sovereign documents used by Braggs are for sale on the Internet. The financial controversies are in Judge Mackie Pierce’s court.
Foreclosure Trail
1996
April 17: The residential debt train got rolling when Trumpet in Zion Ministries Inc. bought a 5,608-SF house at 15621 Sorrells Road in west Little Rock for $548,000. Backing the deal is a three-year loan of $506,000 from Metropolitan National Bank of Little Rock.
Lawrence Braggs signed off on the Sept. 17 mortgage as chairman of the board for the Little Rock nonprofit corporation, renamed Awareness Center International Ministries in 2001.
2005
April 25: Ownership of the property is transferred from the church to Braggs and a new lender replaces Metropolitan. The property was considered a parsonage, exempt from property taxes, for five years despite the change in ownership.
Dec. 23: Lawrence and Delois Braggs obtain a $656,000 mortgage from Fremont Investment & Loan of Brea, Calif. The interest rate on the 30-year loan started at 7.8 percent and the adjustable rate rider that set a ceiling of 13.8 percent. This loan first entered the foreclosure process more than three years ago. The loan replaced a 30-year adjustable rate mortgage of $528,000 Fremont made eight months earlier, with an initial interest rate of 7.55 percent and a ceiling of 14.55 percent.
2008
July 25: Fremont Investment & Loan, a national sub-prime lender of some repute, is closed in a voluntary liquidation. The corporation recorded $5.6 billion in total assets and a six-month loss of more than $205 million in its final call report dated June 30, 2008. At its peak, the lender recorded total assets of more than $12.7 billion at year-end 2006 and a profit of more than $465 million during 2004.
2011
Feb. 2: The foreclosure process begins with the filing of the first of three legal notices of default and intention to sell the property on behalf of U.S. Bank, as trustee for a portfolio of mortgage-backed securities that holds the Fremont mortgage.
Aug. 31: Lawrence and Delois Braggs file Chapter 13 bankruptcy. The joint filing to reorganize their debts halts the foreclosure action.
2012
Aug. 15: Their bankruptcy case is dismissed because the couple fails to make plan payments.
Sept. 12: Lawrence Braggs files for Chapter 13 bankruptcy, which again halts the foreclosure.
2013
Dec. 11: The case is dismissed after Braggs fails to make full and timely plan payments each month to the bankruptcy trustee.
2014
March 11: Lawrence and Delois Braggs file a series of notices with the Pulaski County Circuit Clerk that claim to rescind the loan agreement and allege unspecified fraud.
- Notice of Right to Cancel, which alleges the couple wasn’t provided all the disclosure documents required under the Truth in Lending Act when the Fremont loan was made.
- Notice of Removal of Trustee, which allegedly removes U.S. Bank as trustee and replaces the couple as the beneficiaries of the mortgage.
- Notice of Revocation of Power of Attorney, which allegedly revokes the couple’s signatures on all of the home loan documents.
March 21: Notice is filed that a foreclosure sale will be conducted on June 3.
June 2: Lawrence Braggs files a lawsuit in Pulaski County Circuit Court asking for an emergency injunction to stop the foreclosure sale. The complaint alleges that U.S. Bank doesn’t have standing to foreclose and asks for a jury trial.
June 10: U.S. Bank takes title to the property after a $635,000 foreclosure sale.
July 9: U.S. Bank starts the eviction process to take possession of the property with a lawsuit in Pulaski County Circuit Court.
Oct. 24: The two circuit court cases are consolidated.
Sign up for Daily E-news
