Mortgage Meltdown: Rentals at ALL-TIME HIGH

Foreclosures hit renters too
Rise in mortgage defaults ripples beyond homeowners: report
CHICAGO (MarketWatch) — The rise in foreclosures isn’t just affecting homeowners, it’s also putting pressure on renters, according to a report released Wednesday by the Joint Center for Housing Studies at Harvard University.
For one, the uptick in foreclosures is prompting more households to compete for low-cost rentals. Also significant is the number of renters who face sudden eviction when properties they’re living in are foreclosed on, the report found.

    
Lots more
real estate


Coverage of home buying and selling, housing prices, mortgage information and home improvement.

• What’s behind that fixed-rate offer?
• Making the case for ARMs
• Instead of selling … remodeling
• Good market for first-time buyers?


Get our free Real Estate newsletter

 
   
“Today, investor-owned one- to four-family rental properties account for nearly 20% of all foreclosures,” said Nicolas P. Retsinas, director of the Joint Center for Housing Studies, in a news release. “Moreover, because many of the high-risk home-purchase and home-refinance loans now in default are concentrated in low-income and minority communities, the fallout from foreclosures is hitting the same neighborhoods where many of the nation’s most economically vulnerable renters live.”
The number of renter households rose by nearly one million last year, which is more than four times the pace of renter growth between 2003 and 2006, according to the center’s report, “America’s Rental Housing: The Key to a Balanced National Policy.” The U.S. median monthly gross rent reached a record high of $775 last year.
Plus, the turmoil in the credit markets has raised the cost of financing rental-housing construction and preservation, causing completions of multifamily units to fall to 169,000 — two-thirds of the number seen in 2002, according to the report.
Those involved with the study stressed that renters should not be forgotten as housing takes center stage on Capitol Hill.
“A balanced national housing policy should focus renewed energy on preserving the stock of subsidized rental housing, limiting losses of privately owned, low-cost units and eliminating land-use restrictions and other barriers that needlessly increase the cost of producing homes for sale as well as for rent,” Retsinas said.
The current conditions provide an opportunity to transform the inventory of foreclosed and vacant properties into affordable rental housing, he added. In some parts of the country, foreclosure problems aren’t new: Serious mortgage delinquencies and foreclosures have been on the rise in Ohio, Michigan and Indiana for the past decade, according to the report.
The study shows that demand for affordable rental housing is increasing while the supply of low-cost units is declining, said Jonathan Fanton, president of the MacArthur Foundation, which helped in funding the report.
“The debate on national housing policy must not exclude the more than 35 million renter households. We clearly need policies that honor the role of rental housing as well as homeownership,” Fanton said in a news release.
The study also found:
  • With an abundance of mortgage capital available during the housing boom years, there was a substantial rise in high-risk lending to absentee owners of one- to four-unit rental properties. In 2007, almost one in five foreclosure starts were on loans made to nonresident owners.
  • Foreclosures are also adding to the number of units that are held off the market, in part because of the long foreclosure disposition process and also because some who are buying the foreclosed properties are waiting for conditions to improve before putting the units back on the market.
  • While the weak home-buying market is adding to the supply of higher-priced rentals — as owners rent out their vacant condos and homes — many renters don’t have the income required to seize these opportunities.
  • In 2006, 42.6% of all working families didn’t earn enough to afford an appropriately sized housing unit. Nearly half of all renters paid more than 30% of their incomes for housing in 2006 and a quarter spent more than 50%.
  • The minority share of renter households increased from 37% in 1995 to 43% in 2005, and Hispanic renters accounted for nearly half of the gain.
  • Newly built apartments in buildings with five or more units had a median asking rent of $1,057 in 2006, a record high. The median gross rent for all units that year was $766. Only 20,000 new, unfurnished apartments renting for less than $750 were completed in 2006, even though these units were most in demand.
  • Condo conversions rose from a few thousand in 2003 to 235,000 in 2005. Only 60,000 units were converted from rentals to condos in 2006. Virtually no conversions were completed in 2007.
  • From 1995 to 2005, two rental units were removed from the inventory for every three units built. The losses to inventory were the highest in the Northeast; there, two rental units were lost for every one built.

3 Responses

  1. Here is a good example of what the pretender lenders and the wrongful assignments of these people and a case in which the judge gets it. Attorney Mr.George Babcock. Excellant job by all parties for the Plaintiff.

    STATE OF RHODE ISLAND SUPERIOR COURT
    WASHINGTON, SC

    MICHAEL P. HARRINGTON
    Plaintiff

    VS. CA NO. 09-0458

    DEUTSCHE BANK NATIONAL TRUST
    COMPANY, as Trustee for Morgan Stanley
    ABS Capital I Inc., Trust 2006-NC4, NEW
    CENTURY MORTAGE CORPORATION
    In Chapter 11, AMERICA’S SERVICING
    COMPANY-SC

    MEMODRANDUM IN SUPPORT OF
    OBJECTION TO MOTION TO DISMISS

    Facts
    Michael Harrington (“Harrington”) is a resident of the Town of South Kingstown, County of Washington, and State of Rhode Island. New Century Mortgage Corporation (“New Century”), was a mortgage lender identified in a Mortgage to Harrington and was the lender of $400,000.00 to Harrington. On April 2, 2007 New Century filed for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court District of Delaware. New Century’s status as an entity with authority to transact business in the State of Rhode Island was revoked on October 30, 2008. New Century was one of the lenders at the heart of the massive subprime mortgage industry that has played out to the detriment of borrowers, and the entire country, over the past several years. (Some form of article to attach at this point.)
    Deutsche Bank National Trust Company, (“Deutsche”), is a California corporation and upon information and belief is not authorized to transact business in the State of Rhode Island according to the Rhode Island Secretary of State. In this case, it is Deutsche Bank as a Trustee of a Securitized Trust that is the Plaintiff. Deutsche Bank as Trustee is an alleged assignee of an assignment of the Mortgage Harrington granted to New Century.
    America’s Servicing Company, (“ASC”), is a mortgage servicer that is located in Des Moines, Iowa. It is not licensed to do business in the State in RI.
    On April 3, 2006, New Century loaned Harrington the sum of $400,000.00 despite the fact that he did not have sufficient income to support a mortgage of that amount. On April 3, 2006, Harrington executed a promissory note in favor of New Century in the amount of $400,000.00. New Century was named the Lender on the Note. On even date, he executed a mortgage in favor of New Century. On March 16, 2009, New Century, allegedly by Wells Fargo Bank, NA, under a “Corporate Resolution” which was actually a limited power of attorney that was allegedly recorded with the assignment.
    At some point in 2009, Harrington, due to his own financial misfortune, filed a Chapter 7 Petition with the US Bankruptcy Court. On or about January 1, 2009, Deutsche Bank, as trustee for Morgan Stanley ABS Capital I Inc Trust 2006-NC4, a Securitized Trust, received an Order from the Bankruptcy Court granting it relief from the Automatic Stay in Bankruptcy. None of the title issues or issues related to this Superior Court case was considered in Mr. Harrington’s Bankruptcy. When this matter was filed in the Superior Court, it was the first time that the issues set forth were considered by any court related to this Plaintiff.
    In January of 2009, ASC, the servicer of this loan for the securitized trust of which Deutsche Bank was the alleged Trustee, contacted Mr. Harrington to offer him a certain option on how to save his home. Mr. Harrington went to great lengths to work out his situation with ASC but all of his efforts were for naught as his request for modification was ultimately denied.
    Harmon Law was retained by America’s Servicing Company, (“ASC”) – SC to foreclose on a
    “mortgage from Michael Harrington, in the original amount of $400,000.00 dated April 13, 2006, which mortgage is currently held by Deutsche Bank National Trust Company, as Trustee for Morgan Stanley ABS Capital I Inc Trust NC-NC4, under Power of Sale for Breach of conditions in the loan documents.” [emphasis added]

    It is critical to remember throughout this entire memorandum and throughout this entire case, that ASC is a servicer and appears no where in the chain of title to the Harrington property. The Harmon letter goes on as follows:
    “You are further notified that the note is hereby accelerated and the entire balance is due and payable forthwith and without further notice.”

    Mr. Harrington’s note was, by the clear language of this notice from Harmon, accelerated by ASC. Nowhere in this letter, does Harmon state who the holder or owner of the promissory note actually is. To this day, that remains a mystery. The mystery, however, may be solved by the fact that the note is part of a securitized trust and is not held or owned by any of the Defendants named in this action.
    Shortly after receiving the notice from Harmon, Mr. Harrington communicated with Mr. Worrall at Harmon Law. In writing, he disputed the debt owed and requested verification of the debt. Mr. Harrington’s request was never fully complied with. Throughout this entire process, Mr. Harrington has done nothing but try to work with the Plaintiffs to keep his home out of foreclosure.
    On February 27, 2009, Harmon Law again sent Mr. Harrington a communication which allegedly was a response to his request for debt verification. In that letter Harmon Law writes as follows:
    “This office represents America’s Servicing Company, as servicer for Deutsche Bank National Trust Company, as Trustee for Morgan Stanley ABS Capital I Inc Trust 2006-NC4” [emphasis added]

    This letter from Harmon goes on to state as follows:

    “….I have also enclosed the corresponding Promissory Note….”

    The Promissory Note was never provided to Mr. Harrington and to this day, has not been produced as evidence in this case. Another very interesting document is the Insurance Binder from American Security Insurance Company, which names ASC and not New Century or Deutsche Bank as additional named insured under the policy. ASC is a servicer and nothing more.
    As mentioned earlier, on March 5th, 2009. New Century Mortgage, which at this time was in Chapter 11, (It had filed for Chapter 11 in April of 2007), through Wells Fargo, under a limited power of attorney, attempted to assign the original mortgage to Deutsche Bank, as trustee for Morgan Stanley ABS Capital I Inc Trust 2006-NC4. This assignment was recorded without any power of attorney recorded therewith as stated therein, on March 16, 2009. To this date, no power of attorney has been recorded authorizing Well Fargo to sign this particular Assignment on behalf of the debtor in possession, New Century.
    On March 17, 2009, Mr. Harrington received his first Notice of Mortgage Foreclosure Sale from Harmon Law Offices. The Notice was sent from Harmon as “Attorney for the Present Holder of the Mortgage.” [emphasis added]. The name of the holder of the mortgage is a mystery as is the owner of the promissory note allegedly secured by the mortgage. Deutsche Bank appears nowhere in this notice. This sale did not go forward as Mr. Harrington requested time to modify his loan. He was not successful.
    On May 14, 2009, Harmon Law sent another Notice of Mortgage Foreclosure that contained the same language and which did not identify the holder of the note nor any of the named defendants. Harrington did not know who was foreclosing on his mortgage. On July 31, 2009, Harrington, through this counsel, filed a Verified Complaint seeking a Declaratory Judgment and Injunctive Relief. The relief sought was granted in the form of a Temporary Restraining Order without argument.
    During the several months that followed, Harrington submitted his personal financials again to Harmon in an effort to modify his loan. After several months, his application was denied and Harmon, as counsel for Deutsche Bank, filed this motion to dismiss.
    Examination of Mortgage in light of
    Rhode Island General Laws §34-11-22

    The Mortgage executed by Mr. Harrington is the document at the heart of this litigation. On page 1 of the Mortgage, the Lender is identified as New Century Mortgage. On page 2, it goes on to state that “Lender is the Mortgagee under this Security Instrument.” It is settled then that New Century was both the Lender and Mortgagee. Mr. Harrington admits that the instant mortgage contained the Statutory Power of Sale. Mr. Harrington signed the Mortgage and the Note in favor of New Century. The closing of this loan took place before New Century filed for protection under the Bankruptcy Laws of the United States. These facts are not in dispute.
    Title 34 of the General Laws of the State of Rhode Island governs mortgage transactions and the foreclosure of mortgages conducted pursuant to the Statutory Power of Sale. At page 13 and at paragraph 22 of the mortgage it provides that the “Lender” may invoke the statutory power of sale upon breach of the terms of the mortgage.
    In particular, it states as follows:
    22. “Acceleration; Remedies.” It states that “Lender shall [emphasis added] 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). The notice shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument and sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to bring a court action to assert the non-existence of a default or any other defense of Borrower to acceleration and sale. If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may invoke the STATUTORY POWER OF SALE and any other remedies permitted by Applicable Law. Lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in this Section 22, including, but not limited to, reasonable attorneys’ fees and costs of title evidence.

    If Lender invokes the STATUTORY POWER OF SALE, Lender shall mail a copy of a notice of sale to Borrower as provided in Section 15. Lender shall publish the notice of sale, and the Property shall be sold in the manner prescribed by Applicable Law. Lender or its designee may purchase the Property at any sale. The proceeds of the sale shall be applied in the following order: (a) to all expenses of the sale, including, but not limited to, reasonable attorneys’ fees; (b) to all sums secured by this Security Instrument; and (c) any excess to the person or persons legally entitled to it.” [emphasis added]

    It is beyond question that the Lender was New Century. It is beyond question that Deutsche Bank was not the lender. It is beyond question that ASC was not the lender. It is beyond question that Wells Fargo was not the lender. This being the case, and in consideration of the following analysis, Harrington claims that only New Century, the Lender, if it still possesses the note, may invoke the statutory power of sale to foreclose on his home. Harrington is mindful of the fact that Mortgages may be and often are assigned by the original lender to other parties who then stand in the shoes of the Lender. That is why §34-11-22 provides as follows:
    § 34-11-22 Statutory power of sale in mortgage. – The following power shall be known as the “statutory power of sale” and may be incorporated in any mortgage by reference:
    (Power)
    But if default shall be made in the performance or observance of any of the foregoing or other conditions, or if breach shall be made of the covenant for insurance contained in this deed, then it shall be lawful for the mortgagee or his, her or its executors, administrators, successors or assigns to sell, together or in parcels, all and singular the premises hereby granted or intended to be granted, or any part or parts thereof, and the benefit and equity of redemption of the mortgagor and his, her or its heirs, executors, administrators, successors and assigns

    In this case, it seems that it is possible the party that seeks to foreclose pursuant to the Statutory Power of Sale is Deutsche Bank. Deutsche Bank is not the mortgagee or lender in this transaction. In fact, Deutsche Bank, as it stands in this case, is not a bank at all and does not loan money. Deutsche Bank is the trustee of a securitized pool of loans, an entity not contemplated as a party able to foreclose pursuant to the aforesaid statute. Notwithstanding that proposition, Deutsche Bank is neither an executor nor administrator of New Century. Further, it is not a successor in interest to New Century and finally, it is not an assignee of the mortgage to New Century. The law concerning assignments is set forth below.
    Further, if it is ASC that is foreclosing, it has no right to invoke the statutory power of sale because it is a servicer and a servicer is not one of the entities clearly identified in RIGL §34-11-22.
    § 34-11-24 Effect of assignment of mortgage. – An assignment of mortgage substantially following the form entitled “Assignment of Mortgage” shall, when duly executed, have the force and effect of granting, bargaining, transferring and making over to the assignee, his or her heirs, executors, administrators, and assigns, the mortgage deed with the note and debt thereby secured, and all the right, title and interest of the mortgagee by virtue thereof in and to the estate described therein, to have and to hold the mortgage deed with the privileges and appurtenances thereof to the assignee, his or her heirs, executors, administrators and assigns in as ample manner as the assignor then holds the same, thereby substituting and appointing the assignee and his or her heirs, executors, administrators and assigns as the attorney or attorneys irrevocable of the mortgagor under and with all the powers in the mortgage deed granted and contained.

    Examination of alleged Assignment in light of §34-11-24
    The alleged assignment, although proper in form, falls short relative to substance and legal significance. Deutsche Bank, which is named as the assignee of the mortgage and note signed by Mr. Harrington, takes nothing by way of this assignment because it is not duly executed as required by §34-11-1 of the Rhode Island General Laws which is set forth below:
    § 34-11-1 Conveyances required to be in writing and recorded. – Every conveyance of lands, tenements or hereditament absolutely, by way of mortgage, or on condition, use or trust, for any term longer than one year, and all declarations of trusts concerning the conveyance, shall be void unless made in writing duly signed, acknowledged as hereinafter provided, delivered, and recorded in the records of land evidence in the town or city where the lands, tenements or hereditaments are situated; provided, however, that the conveyance, if delivered, as between the parties and their heirs, and as against those taking by gift or devise, or those having notice thereof, shall be valid and binding though not acknowledged or recorded. A lease for the term of one year or less shall be valid although made by parol. Leases for terms of more than one year may be recorded with a memorandum of lease in writing rather than the original lease; provided, however, that the memorandum shall contain the names of the parties to be charged, a description of the real estate, the duration of the lease, including renewal options and purchase
    The assignment upon which Deutsche Bank claims to be an assignee as set forth in RIGL §34-11-22 which would allow it to invoke the Statutory Power of Sale is void pursuant RIGL §34-11-1 because it is not duly signed by the party making the assignment. The alleged assignment contains language as follows: *For signatory authority see corporate resolution recorded herewith. [emphasis added]. A full examination of the title reveals that there is no Corporate Resolution recorded with the Assignment.
    What does follow is a document called a “Limited Power of Attorney” dated June 20, 2007. It is important to note that New Century Mortgage Corporation and its related entities filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code on April 2, 2007, nearly two months before this alleged assignment was executed. The Defendant admits that New Century was the original mortgagee in this matter and that it held the mortgage form the Plaintiff as Mortgagee. The Limited Power of Attorney is defective because it does not give Wells Fargo the rights of the Mortgagee but, instead, states as follows:
    New Century Mortgage Corporation (hereinafter called “Prior Servicer”) hereby appoints Wells Fargo Bank, N.A. (hereinafter “Servicer”) as the true and lawful attorney-in-fact to act in the name and stead of the Prior Servicer for the purposes set forth below. [emphasis added]
    This language in this Limited Power of Attorney clearly establishes that New Century Mortgage Company only assigned its rights as a “SERVICER” [emphasis added] to Wells Fargo as a “SERVICER”. [emphasis added] When RIGL 34-11-27 is applied to this entire transaction, it becomes clear that the New Century did not assign as mortgagee but as a servicer. The aforesaid statute clearly provides that the mortgage can be assigned but only when it and §34-11-1 are complied with. That did not take place in this case. The assignment was not “duly signed” by Wells Fargo because Wells Fargo was a servicer and not the mortgagee, therefore, this assignment fails for the reasons set forth herein. Wells Fargo was given powers as a servicer, not as a mortgagee. Notwithstanding what the remainder of the document says, it does not change the fact that Wells Fargo was nothing more than a servicer. Even New Century, acting as a servicing agent, could not assign this mortgage to Deutsche Bank. New Century, as Mortgagee could assign because it was the holder of the mortgage but not New Century as a servicer. Given this fact, Wells Fargo’s signature is not sufficient to satisfy the “duly executed” requirement of §34-11-1 and §34-11-27.
    Notwithstanding this undisputed fact, the attestation clause reveals that Herman John Kennerty, the alleged VP of Loan Documentation for Wells Fargo Bank, NA, signed as attorney in fact for New Century Mortgage and not as an authorized agent of Wells Fargo, the alleged holder of a limited Power of Attorney. This is not consistent with the signature line which states that Wells Fargo is the Attorney in Fact. The document is fatally internally inconsistent and fails to satisfy the requirement of RIGL §34-11-1 because it is not duly signed and is not properly acknowledged. This being the case, Deutsche Bank does not have standing to foreclose on the instant mortgage.
    Further, there is no evidence that Deutsche Bank is the holder of the note executed by Mr. Harrington. The notices from Harmon Law never identify who the holder or owner of the promissory note is. The importance of this fact cannot be overlooked. In a recent Rhode Island Superior Court decision written by the Honorable Judge Rubine entitled S. Anthony Nadjarian v. Jeffrey Rose, Alias Newmarket Realty, LLC, Guild Funding, GP and Ashley Realty, Inc., RI Superior Court No. PC-05-5213 (November 17, 2009), wrote that “Under Chapter 3 of title 6A, entitled the Uniform Commercial Code (“UCC”), a “person entitled to enforce an instrument” consists of (i) the holder of the instrument, (ii) a nonholder in possession of the instrument who has the rights of the holder, or (iii) a person not in possession of the instrument who is entitled to enforce the instrument pursuant to 6A-3-309 or 6A-3-418(d).” This is significant because in none of the notices of foreclosure sent to Mr. Harrington is the holder of the note identified. In fact, the notices of foreclosure clearly establish that it is ASC, a servicer that is running the foreclosure. One must ask; does ASC have the note or does Deutsche Bank have the note or is the note packaged up somewhere else with hundreds of other notes as part of a securitized trust? One thing is certain and that is before Mr. Harrington loses his house, his note must be produced and it must be in the hands of the party seeking to foreclose.
    In Nadjarian, Judge Rubine went on to write that “In situations “[w]here a party who claims to be the holder of a note….does not produce the note, that party does not have the benefit of the presumption that the signatures on the note are valid.” 12 Am. Jur. Bills and Notes §615 (2008). While Mr. Harrington does not dispute signing a promissory note, he is entitled to know who has the note and it is required by law that the party foreclosing has the note at the commencement of the foreclosure. The Notice of Foreclosure sent to Harrington does not identify who is foreclosing on the original mortgage pursuant to the Statutory Power of Sale. It does not identify the holder of the note. The notice of foreclosure merely states that the foreclosure is being conducted on behalf of the “Holder of the Mortgage.” This being the case, Harrington has no idea who is actually foreclosing on the mortgage.
    There has been a great deal made of Judge Silverstein’s ruling in Bucci v. Lehman Brothers by the foreclosure bar. Although the headlines pertaining to Bucci related to MERS, what was decided in that case was that a mortgage and note must not be disconnected in order for a foreclosure to take place. Judge Silverstein relied on, In Re Huggins, a Massachusetts Bankruptcy Case in reaching his ultimate decision. The Huggins Court ruled the same way. In order to foreclose, there cannot be a disconnection between the note and the mortgage. In this case, there is no proof that the note and mortgage are connected. The only way to prove this, one way or the other, is for discovery to take place and a trial to be had at some point in the future.
    There are no cases on point in Rhode Island relative to this issue but two very recent cases out of the Massachusetts Trial Court, Land Court Department, Hampden County entitled U.S. BANK NATIONAL ASSOCIATION, as trustee for the Structured Asset Securities Corporation Mortgage Pas-Through Certificates, Series 2006-Z v. ANTONIO IBANEZ, 08 MISC 384283 (KCL) & WELLS FARGO BANK, N.A., as trustee for ABFC 2005-OPT1 Trust, ABFC Asset Backed Certificates Series 2005-OPT1 v. MARK A. LARACE and TAMMY L. LARACE, 08 MISC 386755 (KCL), 2009.
    In a written decision based upon a Motion to Vacate by the Plaintiffs, Judge Long wrote in very clear and concise language, that G.L. c. 244 §14 requires “complete transparency.” [emphasis added] He went on to write that “What is at stake is of utmost importance and finality – the complete extinguishment of a person’s right in his or her property (often the home where that person and his or her family live) and the transfer of those rights to someone who wants (and is entitled) the complete assurance of good title to that property so that he or she can live there without concern.” As with this case, this is more than just a title issue. This is an issue that is life altering and because it is, strict compliance with the law is required. How can an unidentified party, such as in this case, be allowed to take another person’s life away from them? It cannot!
    Judge Long continued by writing “Thus, when a foreclosure is noticed and conducted by one party for another, the name of the principal must be disclosed in the notice.” G.L. c. 244 §14. In this case, there is no such disclosure and no such transparency and, therefore, applying the logic of these two cases, the Harrington foreclosure, as currently postured, cannot go forward. Judge Long’s decision cited Bottomly v. Kabachnick, 13 Mass. App. Ct. 480, 483-484 (1982) and McGreevey v. Charlestown Five Cents Savings Bank, 294 Mass. 480, 484 (1936) make clear, G.L. c. 244, § 14 requires strict compliance and a failure to do so means that the foreclosure is invalid.” This case should not be dismissed, but should proceed to discovery and then trial. Simply put, it is required that the note and mortgage be owned by the same party at the time a foreclosure is commenced. There is no evidence to establish where the note is and the evidence clearly establishes that due to a void assignment that the mortgage is still with New Century.
    STANDARD OF REVIEW
    On a Motion to Dismiss pursuant to Rule 12(b)(6) of the Superior Court Rules of Civil Procedure, the Court should grant the same “when it is clear beyond a reasonable doubt that the plaintiff would not be entitled to relief from the defendant under any given set of facts that could be proven in support of plaintiff’s claim.” Hendrick v. Hendrick, 755 A.2d at 793 (R.I. 2000). In this case, the facts set forth herein and in the complaint certainly, if believed and found to be true, would result in judgment for Plaintiff in regard to the issue of whether or not Deutsche Bank has the right to foreclosure. It has been alleged that it does not have a valid assignment and that it does not hold the operative promissory note. Further, the Court must view the allegations set forth in the Plaintiff’s case as true and view them in the light most favorable to the Plaintiff. Bruno v. Criterion Holdings, Inc., 736 A.2d 99, 99 (R.I. 1999). When applying this holding to the facts set forth in this case as alleged by the Plaintiff, dismissal would not be appropriate.
    Further, a Motion to Dismiss for failure to state a claim is “treated as one for summary judgment when ‘matters outside the pleading are presented to and not excluded by the Court.’” Franklin v. Drexel, 936 A.2d 1272, 1275 (R.I. 2007). In this case, the party moving for summary judgment, the Defendant herein, “carries the burden of proving by competent evidence the existence of a disputed material issue of fact and cannot rest on allegations or denials in the pleadings or on conclusions or legal opinion.” This Court, applying these holdings, should not grant the pending Motion to Dismiss.
    Relative to the remainder of the Defendant’s Motion, it is true that the Plaintiff seeks a Declaratory Injunction from this Court ruling that at this point, Duetsche Bank may not foreclose based upon the power of sale contained in the original mortgage. Plaintiff’s position is totally opposite to that of the Defendant relative to it claim that Deutsche Bank is the property mortgagee and that it has authority to foreclose on the mortgage. Deutsche Bank is not the mortgagee and based upon the arguments set forth earlier herein, it is not a proper assignee of the mortgage. The Plaintiff has provided this Court with ample facts upon which to support its claim and, therefore, a claim upon relief can be granted has been made.
    The Plaintiff admits that New Century Mortgage Corporation had the power to invoke the statutory power of sale. In fact, the Plaintiff claims that at this point, due to an invalid assignment, only New Century possesses that right. The Plaintiff agrees that New Century had the right, pursuant to the mortgage and statute, to assign the mortgage. In this case, that was not done correctly and in accordance with the General Laws of the State of Rhode Island. The assignment was signed incorrectly, by a party that did not have an interest in the mortgage. That renders it invalid because it was not duly signed as required by both RIGL §§34-11-1 and 34-11-27.
    Further, the Defendant alleges that the assignment transferred the note as well to Deutsche Bank. There is no proof that the note was ever assigned by New Century. There is no proof that Deutsche Bank holds the note and that it is not held elsewhere by a trust foreign to this action.
    Finally, this matter is about whether or not Deutsche Bank may foreclose on Mr. Harrington. The answer to that question is no.

    The Plaintiff
    By his attorney,

    George E. Babcock, Esquire
    23 Acorn Street, Suite 202
    Providence, RI 02903
    Bar Id# 3747
    Tel: (401) 274-1905
    Fax: (401) 274-1907

    CERTIFICATION
    I hereby certify that I mailed a true and accurate copy of the within to Bethany Whitmarsh, Esquire, Harmon Law, 150 California Street, Newton Highlands MA on January 11, 2010

    _____________________________
    George E. Babcock, Esquire

  2. […] EDT April 30, 2008 CHICAGO MarketWatch ?? The rise in foreclosures isn??t just affecting homeownershttp://livinglies.wordpress.com/2008/04/30/mortgage-meltdown-rentals-at-all-time-high/Robert Shiller Portfolio.com via Yahoo! Finance A rock star among economists, the Yale professor who […]

  3. […] livinglies released a post on Mortgage Meltdown: Rentals at ALL-TIME HIGH that may be of interest. Here’s a brief excerpt: […]

Leave a Reply

%d bloggers like this: