Case-Shiller Still Predicts Massive 45% Fall From Today’s Values

Editor’s Note: This might not be as far-fetched as you think. Median income is dropping like a rock. Housing prices have historically been closely related to median income. I don’t know about the percentage drop, but another crash in real estate values seems likely. median income is still out of whack with housing prices indicating an “adjustment” of very substantial proportions is in the works. With unemployment and underemployment at record highs, it is difficult to see how this will get better any time soon.

Case-Shiller Still Predicts Massive 45% Fall From Today’s Values

November 24th, 2009 • Related • Filed Under

Filed Under: Featured Posthousing bear markethousing stats

 

The 10 major cities in the Standard & Poor’s/Case-Shiller home price index have risen 5% from their April low, but the index is still predicting a massive 45% fall from today’s values.

The index is still showing a current loss of 30% from the high in June 2006. Based upon a trend generated from the actual prices of 1987 to 1997, and generated forward in a linear projection, the index will fall a total of 62% before it reaches the trend norm.

A more comprehensive analysis of the 10-city index based upon a full 120 years of data shows current values off 36% and a comparatively modest 20% fall ahead.

Review four charts and key data based upon major real estate price indexes at “Property Price Index”.

27 Responses

  1. TO: eman205, i will ask you the same question you asked anonymous? “are you an idiot or a moron?” i personally know people whose homes have been broken into by the bank’s reps, be that realtors or whatever, in one instance i found an attorney for those people and they are now in the process of filing suit against the damn Lender!! so once again eman205, i will ask you another question you asked anonymous: “what are you some agent for the “banks” “? you sure sound like one!! , eman205 you are truly an agent for the “banks” or a complete idiot and a total moron!!! i have living proof not with one but with several people whose homes have been broken into while they were out and locks have been re-keyed, and i am not just saying that coming out of *&^%$ i do have the facts!! I had even report Realtors that were involved in the breaking in to the National Association of Realtors and the State Association as well. This is NOT bull crap!!!!!
    no wonder this country is in the pit of crap that is in, is either incredulous, ignorant or purposely blind to the real facts people like you that allow crap like this to happen, we are in the fight of our lives against the EVIL MACHINES called wall street and pretender lenders, you seriously need to have your head checked eman205, wake up and smell the steaming hot crap that the thieves are throwing at us!!!!!!!! to victory America!!!!!!

  2. I am so tired of this fight, the government is despicable, they are totally responsible for this mess. I hope the day will come when they are held to account.

  3. Sorry, I don’t know how snap dot com made it into the name field on some of my posts …

    Deontos,
    I saw nothing in the article that was off-topic.

    Thanks,
    Dan Edstrom
    dmedstrom@hotmail.com

  4. Deontos,
    I saw nothing in the article that was off-topic.

    Thanks,
    Dan Edstrom
    dmedstrom@hotmail.com

  5. Neil, I know this is OFF TOPIC, but I was prompted by your post “CONSENT OF THE GOVERNED”

    545 PEOPLE
    By Charlie Reese

    Politicians are the only people in the world who create problems and then campaign against them.

    Have you ever wondered, if both the Democrats and the Republicans are against deficits, WHY do we have deficits?

    Have you ever wondered; if all the politicians are against inflation and high taxes, WHY do we have inflation and high taxes?

    You and I don’t propose a federal budget. The president does.

    You and I don’t have the Constitutional authority to vote on appropriations. The House of Representatives does.

    You and I don’t write the tax code, Congress does.

    You and I don’t set fiscal policy, Congress does.

    You and I don’t control monetary policy, the Federal Reserve Bank does.

    One hundred senators, 435 congressmen, one president, and nine Supreme Court justices equates to 545 human beings out of the 300 million are directly, legally, morally, and individually responsible for the domestic problems that plague this country.

    I excluded the members of the Federal Reserve Board because that problem was created by the Congress. In 1913, Congress delegated its Constitutional duty to provide a sound currency to a federally chartered, but private, central bank.

    I excluded all the special interests and lobbyists for a sound reason. They have no legal authority. They have no ability to coerce a senator, a congressman, or a president to do one cotton-picking thing. I don’t care if they offer a politician $1 million dollars in cash. The politician has the power to accept or reject it. No matter what the lobbyist promises, it is the legislator’s responsibility to determine how he votes.

    Those 545 human beings spend much of their energy convincing you that what they did is not their fault. They cooperate in this common con regardless of party.
    What separates a politician from a normal human being is an excessive amount of gall. No normal human being would have the gall of a Speaker, who stood up and criticized the President for creating deficits. The president can only propose a budget. He cannot force the Congress to accept it.

    The Constitution, which is the supreme law of the land, gives sole responsibility to the House of Representatives for originating and approving appropriations and taxes. Who is the speaker of the House? Nancy Pelosi. She is the leader of the majority party. She and fellow House members, not the president, can approve any budget they want. If the president vetoes it, they can pass it over his veto if they agree to.

    It seems inconceivable to me that a nation of 300 million can not replace 545 people who stand convicted — by present facts — of incompetence and irresponsibility. I can’t think of a single domestic problem that is not traceable directly to those 545 people. When you fully grasp the plain truth that 545 people exercise the power of the federal government, then it must follow that what exists is what they want to exist.

    If the tax code is unfair, it’s because they want it unfair.

    If the budget is in the red, it’s because they want it in the red.

    If the Army &Marines are in IRAQ , It’s because they want them in IRAQ

    If they do not receive social security but are on an elite retirement plan not available to the people, it’s because they want it that way.

    There are no insoluble government problems.

    Do not let these 545 people shift the blame to bureaucrats, whom they hire and whose jobs they can abolish; to lobbyists, whose gifts and advice they can reject; to regulators, to whom they give the power to regulate and from whom they can take this power. Above all, do not let them con you into the belief that there exists disembodied mystical forces like “the economy,” “inflation,” or “politics” that prevent them from doing what they take an oath to do.

    Those 545 people and they alone, are responsible.

    They and they alone, have the power.

    They and they alone, should be held accountable by the people who are their bosses.

    Provided the voters have the gumption to manage their own employees.

    We should vote all of them out of office and clean up their mess!

    Charlie Reese is a former columnist of the Orlando Sentinel Newspaper.

    What you do with this article now that you have read it………. Is up to you.

    Accounts Receivable Tax
    Building Permit Tax
    CDL license Tax
    Cigarette Tax
    Corporate Income Tax
    Dog License Tax
    Excise Taxes
    Federal Income Tax
    Federal Unemployment Tax (FUTA)
    Fishing License Tax
    Food License Tax
    Fuel Permit Tax
    Gasoline Tax (currently 44.75 cents per gallon)
    Gross Receipts Tax
    Hunting License Tax
    Inheritance Tax
    Inventory Tax
    IRS Interest Charges IRS Penalties (tax on top of tax)
    Liquor Tax
    Luxury Taxes
    Marriage License Tax
    Medicare Tax
    Personal Property Tax
    Property Tax
    Real Estate Tax
    Service Charge T ax
    Social Security Tax
    Road Usage Tax
    Sales Tax
    Recreational Vehicle Tax
    School Tax
    State Income Tax
    State Unemployment Tax (SUTA)
    Telephone Federal Excise Tax
    Telephone Federal Universal Ser vice FeeTax
    Telephone Federal, State and Local Surcharge Taxes
    Telephone Minimum Usage Surcharge=2 0Tax
    Telephone Recurring and Non-recurring Charges Tax
    Telephone State and Local Tax
    Telephone Usage Charge Tax
    Utility Taxes
    Vehicle License Registration Tax
    Vehicle Sales Tax
    Watercraft Registration Tax
    Well Permit Tax
    Workers Compensation Tax

    THINK THIS IS FUNNY? Not one of these taxes existed 100 years ago, and our nation was the most prosperous in the world. We had absolutely no national debt, had the largest middle class in the world, and Mom stayed home to raise the kids.

    What in the ____ happened? Can you spell ‘politicians?’

  6. M. Rowe: You point out the pervasive “axis of evil” that is controlling our lives. Cost of safety nets — medical, food stamps etc are going up but those in power have us squabbling amongst ourselves to distract us from the fact that we are ALL affected by the housing crisis that precipitated the credit crisis that precipitated the economic crisis which caused tens of millions of people to be thrown out of work. Breaking and entering was a crime — now it isn’t enforced unless you are a hapless guy in need. Usury was a crime — morally, ethically and legally. Now it is main street business. Stealing money from taxpayers and causing them to spend trillions of dollars used to be a crime. Now it is the structure of our society which converted social welfare to corporate welfare. Funny thing though, these things are STILL on the books as crimes; they still carry extreme penalties. What we need are more marches, use of our freedom of assembly and more activism getting the existing incumbents out of our lives and putting new people in committed to term limits, public financing of campaigns, enforcement of lobbying laws, and enforcement of the laws designed to protect the public and preserve an orderly society. GOVERNMENT IS ONLY EMPOWERED BY CONSENT OF THE GOVERNED. WHEN WILL YOU WITHDRAW YOUR CONSENT?

  7. Four of these bank toughs in their suits come right into my brother-in-laws house while he was watching the rasslin and they picked him up right in his chair and picked his big TV up too and put him out on the sidewalk but he couldn’t see the rasslin any more cuz the TV cord got pulled out then he was madder than a wet hen.

  8. I have followed this site for over a year and have never made a post, but I now feel compelled to do so. I do Loan Modifications for a living now and I have met with property owners who have had their homes broken into and locks changed by the banks agents. The prorerties were vacant, they were deliquent but not in foreclosure.

  9. “Latest tactics of lenders are to break and enter into homes and literrally steal them.
    In most if not all states, lenders cannot take possession of a home until after they file and unlawful detainer and obtain a court order for possession.
    It has been widely reported that lenders are instead having asset managers instruct real estate agents to literally break into peoples homes, change the locks, and order them to leave.
    This has been admitted to in depositions.”

    This is a lie…maybe the action of an unscrupulous investor…but no lender, asset manager, or Realtor would ever have the nads to do this….not if they wanted to stay in business

  10. Anonymous
    we have law enforcement living in house–they better never try that here.

    real estate agent would not get so far as to have a new key made for the new lock!!

    I’ve heard of similar situations and I found a real estate agent walking around and peering into our front window. The dogs nearly jumped through the glass at them.

  11. Anonymous! Great to hear your voice!

    eman205: You’re the idiot! Get lost, moron!

    That of which anonymous speaks is true.
    Yes, my friends. It’s called “replevin”

    Main Entry: 1re·plev·in
    Pronunciation: \ri-ˈple-vən\
    Function: noun
    Etymology: Middle English, from Anglo-French, from replevir to give security, from re- + plevir to pledge, from Late Latin *plebere — more at pledge
    Date: 15th century

    1 : the recovery by a person of goods or chattels claimed to be wrongfully taken or detained upon the person’s giving security to try the matter in court and return the goods if defeated in the action
    2 : the writ or the common-law action whereby goods and chattels are replevied

    This is a what happens when finance companies come and repossess your car. Yes, it happens. Often. It’s only against the law when they commit a crime doing it. They cannot approach you in a parking lot, knock you down, and take your keys. That’s illegal. But it, too, happens often.
    Now it is happening with homes involved in foreclosure. Whether the homeowner is filing a bankruptcy action to further his efforts to protect the home and defeat the foreclosure, or has possibly lost to a judgment of foreclosure (and pending a sheriff’s sale/right of redemption period) the lender hires someone to dispossess the owner. Once the owner is gone, the lender can claim abandonment of the property and accelerate the right of redemption period. Nothing is beyond their capability to lie, cheat, steal, and defeat the laws already in place to protect you.

  12. 2009 NY Slip Op 51773(U)
    OPTION ONE MORTGAGE CORPORATION, Plaintiff,
    v.
    PATRICK E. DUKE, ET AL., Defendants.

    41590/07
    Supreme Court, Kings County.

    Decided August 18, 2009.
    Charles D.J. Case, Esq., Steven J. Baum, PC, Buffalo NY, Plaintiff.

    ARTHUR M. SCHACK, J.

    In this mortgage foreclosure action, for the premises located at 287 East 37th Street, Brooklyn, New York (Block 4891, Lot 49, County of Kings), plaintiff OPTION ONE MORTGAGE CORPORATION (OPTION ONE) moves, inter alia, for: the appointment of a referee to compute the amount due to plaintiff under the note and mortgage; and, to amend the caption to reflect that due to OPTION ONE’s assignment of the instant mortgage and note subsequent to the commencement of this action, the new plaintiff is DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE FOR THE CERTIFICATEHOLDERS OF SOUNDVIEW HOME LOAN TRUST 2006-OPT4 ASSET BACKED CERTIFICATES SERIES 2006-OPT4 (DEUTSCHE BANK).

    The putative plaintiff, OPTION ONE, never owned the instant $357,000.00 March 18, 2006-mortgage and note, given by CONTOUR MORTGAGE CORPORATION (CONTOUR) to defendant PATRICK E. DUKE (DUKE). CONTOUR, in the instant action, assigned the DUKE mortgage and note OPTION ONE prior to the existence of the instant mortgage and note. Nonexistent mortgages and notes are incapable of assignment. Thus, without a valid assignment from CONTOUR to OPTION ONE, there could not have been a valid assignment of the DUKE mortgage and note from OPTION ONE to DEUTSCHE BANK. Therefore, the order of reference is denied, the instant action is dismissed with prejudice and the Kings County Clerk is directed to cancel OPTION ONE’s notice of pendency, filed on November 9, 2007, against the subject property located at Block 4891, Lot 49, County of Kings.

    Background

    Defendant PATRICK E. DUKE borrowed $357,000.00 from CONTOUR on March 18, 2006 and executed a thirty-year note and a mortgage to secure the loan. The note was for “40/30 years” at 6.85% [exhibit F of motion]. While the loan was amortized for a 40-year term, the loan required a balloon payment for the outstanding balance after 30 years. The instant March 28, 2006-mortgage was recorded in the Office of the City Register, New York City Department of Finance, on April 21, 2006, at City Register File Number (CRFN) XXXXXXXXXXXXX [exhibit G of motion].

    CONTOUR assigned the instant mortgage and note to OPTION ONE. However, Lisa Simeone, Treasurer of CONTOUR executed the assignment on March 17, 2006, one day prior to the execution of the mortgage and note. The March 17, 2006 assignment states that the instant mortgage was executed on March 18, 2006, one day later. Further, the Notary Public who took Ms. Simeone’s signature, Kenneth S. Pelsinger, acknowledged that “[o]n the 17th day of March in the year 2006, before me, the undersigned, personally appeared Lisa Simeone, personally known to me . . . and acknowledged to me that he/she/they executed the same.” The notary public, Mr. Pelsinger, is also the same notary public who took defendant DUKE’s signature on March 18, 2006 for the execution of the instant mortgage. The March 18, 2006-mortgage contains, on page 9, the acknowledgment of Mr. Pelsinger as notary public, stating that “[o]n the 18th day of March in the year 2006, before me, the undersigned, personally appeared Patrick E. Duke, personally known to me . . . and acknowledged to me that he/she/they executed the same.” The purported March 17, 2006 CONTOUR to OPTION ONE assignment was not recorded until more than thirteen months had passed, on April 23, 2007, in the Office of the City Register, New York City Department of Finance, at CRFN XXXXXXXXXXXXX [exhibit H of motion]. Interestingly, Mr. Pelsinger is a member of the Bar of the State of New York, whose listed business address registered with the Office of Court Administration is identical to CONTOUR’s address, 1900 Hempstead Turnpike, East Meadow, New York 11554.

    The July 3, 2008-affidavit of merit [exhibit B of motion] by Raymond Elmes, Vice President of OPTION ONE, admits, in ¶ 3, that the CONTOUR to OPTION ONE assignment took place on March 17, 2006 and that defendant DUKE executed the instant mortgage on March 18, 2006. Plaintiff’s counsel, in ¶ 1 of his affirmation of regularity, states the same information with respect to the assignment being prior to the mortgage execution.

    Mr. Elmes’ affidavit states that defendant DUKE defaulted with his August 1, 2007 loan payment and that at the time of his default there was due and owing the principal balance of $354,654.83 plus 6.85% interest from July 1, 2007. OPTION ONE, despite alleging to have been assigned the mortgage and note that did not exist on March 17, 2006, filed the instant notice of pendency, summons and complaint on November 9, 2007 with the Kings County Clerk. Eleven days subsequent to this, on November 20, 2007, OPTION ONE assigned the instant mortgage and note to DEUTSCHE BANK. While this assignment recites that the instant mortgage and note were dated March 18, 2006 and recorded on April 21, 2006, it is silent as to the date of the CONTOUR to OPTION ONE assignment, but states that this assignment was recorded on April 23, 2007. If this Court allows the defective chain of title to vest the instant mortgage and note with DEUTSCHE BANK, the Court would have had to explore why DEUTSCHE BANK purchased the nonperforming DUKE loan, then 112 days in default? While the assignment of the DUKE nonperforming loan to DEUTSCHE BANK appears to be a small ripple in what former Federal Reserve Board Chairman Alan Greenspan called, in his October 23, 2008 testimony before the House Oversight Committee, “a once in a century credit tsunami,” the Court wonders why DEUTSCHE BANK purchased the DUKE mortgage loan and did DEUTSCHE BANK violate its fiduciary duty to its stockholders with the purchase of a loan that defaulted almost four months prior to its assignment to DEUTSCHE BANK?

    Discussion

    Plaintiff OPTION ONE must have “standing” to bring this action. “Standing to sue is critical to the proper functioning of the judicial system. It is a threshold issue. If standing is denied, the pathway to the courthouse is blocked. The plaintiff who has standing, however, may cross the threshold and seek judicial redress.” (Saratoga County Chamber of Commerce, Inc. v Pataki, 100 NY2d 801 812 [2003], cert denied 540 US 1017 [2003]). Professor David Siegel, in NY Prac, § 136, at 232 [4th ed] instructs that:

    [i]t is the law’s policy to allow only an aggrieved person to bring a lawsuit . . . A want of “standing to sue,” in other words, is just another way of saying that this particular plaintiff is not involved in a genuine controversy, and a simple syllogism takes us from there to a “jurisdictional” dismissal: (1) the courts have jurisdiction only over controversies; (2) a plaintiff found to lack “standing” is not involved in a controversy; and (3) the courts therefore have no jurisdiction of the case when such a plaintiff purports to bring it.
    “Standing to sue requires an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant’s request.” (Caprer v Nussbaum (36 AD3d 176, 181 [2d Dept 2006]). If a plaintiff lacks standing to sue, the plaintiff may not proceed in the action. (Stark v Goldberg, 297 AD2d 203 [1st Dept 2002]). “Since standing is jurisdictional and goes to a court’s authority to resolve litigation [the court] can raise this matter sua sponte.” (Axelrod v New York State Teachers’ Retirement System, 154 AD2d 827, 828 [3d Dept 1989]).

    To foreclose on a mortgage, a party must have title to the mortgage. The instant assignment, before the actual mortgage and note were executed, is a nullity. The Appellate Division, Second Department (Kluge v Fugazy, 145 AD2d 537, 538 [2d Dept 1988]), held that a “foreclosure of a mortgage may not be brought by one who has no title to it and absent transfer of the debt, the assignment of the mortgage is a nullity.” The Appellate Division, First Department, citing Kluge v Fugazy (Katz v East-Ville Realty Co., 249 AD2d 243 [1st Dept 1998]) instructed that “[p]laintiff’s attempt to foreclose upon a mortgage in which he had no legal or equitable interest was without foundation in law or fact.”

    Plaintiff OPTION ONE lacked standing to foreclose on the instant mortgage and note when it commenced the instant action on November 9, 2007, because it never owned the DUKE mortgage and note. The Court, in Campaign v Barba (23 AD3d 327 [2d Dept 2005]), instructed that “[t]o establish a prima facie case in an action to foreclose a mortgage, the plaintiff must establish the existence of the mortgage and the mortgage note, ownership of the mortgage, and the defendant’s default in payment [ Emphasis added].” (See Witelson v Jamaica Estates Holding Corp. I, 40 AD3d 284 [1st Dept 2007]; Household Finance Realty Corp. of New York v Winn, 19 AD3d 545 [2d Dept 2005]; Sears Mortgage Corp. v Yaghhobi, 19 AD3d 402 [2d Dept 2005]; Ocwen Federal Bank FSB v Miller, 18 AD3d 527 [2d Dept 2005]; U.S. Bank Trust Nat. Ass’n Trustee v Butti, 16 AD3d 408 [2d Dept 2005]; First Union Mortg. Corp. v Fern, 298 AD2d 490 [2d Dept 2002]; Village Bank v Wild Oaks Holding, Inc., 196 AD2d 812 [2d Dept 1993]).

    “It is axiomatic that to be effective, an assignment of a note and mortgage given as security therefor must be made by the owner of such note and mortgage and that an assignment made by entities having no ownership interest in the note and mortgage pass no title therein to the assignee.” (LaSalle Bank Nat. Ass’n v Lamy, 12 Misc 3d 1191 [A] [Sup Ct, Suffolk County 2006]). OPTION ONE, in the instant action, claims that CONTOUR assigned the DUKE mortgage and note to it, prior to its execution. Documents not yet executed, and thus not in existence, cannot be assigned, because no present right exists in the thing assigned. “To effect an assignment . . . there [must] be a perfected transaction between the assignor and assignee, intended by those parties to vest in the assignee a present right in the things assigned” (Leon v Martinez, 84 NY2d 83, 88 [1994]).” (Zeman v Falconer Electronics, Inc., 55 AD3d 1240 [4d Dept 2008]).

    In the absence of a valid assignment on March 17, 2006, from CONTOUR to OPTION ONE, OPTION ONE never acquired the rights to the DUKE mortgage possessed by CONTOUR. Thus, OPTION ONE did not have the right to assign the instant mortgage and note to DEUTSCHE BANK. “When a valid assignment is made, he assignee steps into the assignor’s shoes and acquires whatever rights the latter had (see Furlong v Shalala, 156 F3d 394, 392 [2d Cir 1998]).” (In re Stralem, 303 AD2d 120, 123 [2d Dept 2003]).

    Therefore, without a valid assignment from CONTOUR to OPTION ONE, OPTION ONE’s motion for an order of reference is denied, the instant action is dismissed with prejudice, and the notice of pendency filed agaisnt the subject premises on November 9, 2007 is cancelled.

    CPLR § 6501 provides that the filing of a notice of pendency against a property is to give constructive notice to any purchaser of real property or encumbrancer against real property of an action that “would affect the title to, or the possession, use or enjoyment of real property, except in a summary proceeding brought to recover the possession of real property.” “The purpose of the doctrine was to assure that a court retained its ability to effect justice by preserving its power over the property, regardless of whether a purchaser had any notice of the pending suit . . . ” and, that “the statutory scheme permits a party to effectively retard the alienability of real property without any prior judicial review.” (5303 Realty Corp. v O & Y Equity Corp. 64 NY2d 313, 319-320 [1984]).

    Article 65 of the CPLR outlines notice of pendency procedures. The Court, in Da Silva v Musso (76 NY2d 436, 442 [1990]), held that “the specific statutorily prescribed mechanisms for implementing this provisional remedy . . . were designed with a view toward balancing the interests of the claimant in the preservation of the status quo against the equally legitimate interests of the property owner in the marketability of his title.”

    CPLR § 6514 (a) provides for mandatory cancellation of a notice of pendency by: [t]he court, upon motion of any person aggrieved and upon such notice as it may require, shall direct any county clerk to cancel a notice of pendency, if service of a summons has not been completed within the time limited by section 6512; or if the action has been settled, discontinued or abated; or if the time to appeal from a final judgment against the plaintiff has expired; or if enforcement of a final judgment against the plaintiff has not been stayed pursuant to section 5519. [Emphasis added] The plain meaning of the word “abated,” as used in CPLR § 6514 (a), is the ending of an action. Abatement is defined (Black’s Law Dictionary 3 [7th ed 1999]) as “the act of eliminating or nullifying.” ” An action which has been abated is dead, and any further enforcement of the cause of action requires the bringing of a new action, provided that a cause of action remains’ (2A Carmody-Wait 2d § 11.1).” (Nastasi v Nastasi, 26 AD3d 32, 40 [2d Dept 2005]). Further, the Nastasi Court, at 36, instructed that “[c]ancellation of a notice of pendency can be granted in the exercise of the inherent power of the court where its filing fails to comply with CPLR 6501 (see 5303 Realty Corp. v O & Y Equity Corp. at 320-321; Rose v Montt Assets, [1st Dept 1998]; Siegel, NY Prac § 336 [4th ed]).” Thus, the dismissal of the instant complaint must result in the mandatory cancellation of plaintiff OPTION ONE’s November 9, 2006 notice of pendency against the subject property “in the exercise of the inherent power of the Court.”

    Conclusion

    Accordingly, it is

    ORDERED, that the application of plaintiff, OPTION ONE MORTGAGECORPORATION, for an order of reference for the premises located at 287 East 37th Street, Brooklyn, New York (Block 4891, Lot 49, County of Kings) is denied; and it is further
    ORDERED, that the instant complaint, Index Number 41590/078, is dismissed with prejudice because plaintiff, OPTION ONE MORTGAGE CORPORATION, never owned the instant mortgage and note, executed on March 18, 2006 by defendant PATRICK E. DUKE to CONTOUR MORTGAGE CORPORATION; and it is further
    ORDERED, that the Notice of Pendency in the instant action, Index Number 41590/07, filed with the Kings County Clerk on November 9, 2007, by plaintiff, OPTION ONE MORTGAGE CORPORATION, to foreclose a mortgage for real property located at 287 East 37th Street, Brooklyn, New York (Block 4891, Lot 49, County of Kings) is cancelled.
    This constitutes the Decision and Order of the Court.

  13. 007 NY Slip Op 33818(U)
    BANK OF NEW YORK AS TRUSTEE FOR THE NOTEHOLDERS OF CWABS, INC. ASSET-BACKED NOTES, SERIES 2006-SD2, Plaintiff,
    v.
    SANDRA OROSCO, et. al., Defendants.

    0032052/2007
    Supreme Court of the State of New York, Kings County.

    November 19, 2007.
    ARTHUR M. SCHACK, Justice.

    DECISION & ORDER

    Plaintiff’s application, upon the default olall defendants, for an order of reference and related relief for the premises located at 211 Weirfield Street, Brooklyn, New York (Block 3397, Lot 48, County of Kings) is denied without prejudice. The plaintiff, BANK OF NEW YORK AS TRUSTEE FOR THE NOTI HOLLERS OF CWABS, INC. ASSET-BACKED NOTES, SERIES 2006-SD2 (BANK OF NEW YORK), lacks standing to bring this action. Despite claiming to be the owner of tile note and mortgage in this action by assignment of the previous mortgagee, there is no record of the assignment recorded in the Office of the City Register. Therefore, the instant application is denied.

    Background

    Defendant Sandra Orosco borrowed $436.000.00 from Encore Credit Corp., dib/a/ ECC Encore Credit (Encore), on September 15,2005. The Orosco Note and Mortgage were recorded in the Office of the City Register of the City of New York on October 5, 2005 at City Register File Number (CRFN) XXXXXXXXXXXXX.

    Both plaintiff’s counsel, in her affirmation in support of this application, and Keri Selman, who claims to be an Assistant Vick-President of Bank of New York, in her September 25, 2007-affidavit, asserted that Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for Encore for the purpose of recording the mortgage, assigned the mortgage to plaintiff BANK OF NEW YOLK on August 21, 2007. A copy of the putative assignment is Exhibit B of the application. However, according to the Automated City Register Information System (ACRIS) website of the Office of the City Register, New York City Department of Finance, as of today, almost three months subsequent to the alleged assignment, there is no recording of the assignment. Therefore, the Court must conclude that plaintiff is not tilt: mortgagee. However, leave is granted to plaintiff to submit a new application for an order of reference if the putative assignment is recorded.

    Plaintiff must address a second matter if II applies for an order of reference after demonstrating that the alleged assignment was a corded. Plaintiff’s application is the third application for an order of reference receive d by me in the past several days that contain an affidavit from Keri Selman. In the instant action, she alleges to be an Assistant Vice-President of the Bank of New York. On November 16, 2007, I denied an application for an order of reference (BANK OF NEW YORK A TRUSTEE FOR THE CERTIFICATEHOLDERS OF CWABS, INC. ASSET-BACKED CERTIFICATES, SERIES 2006-8 v JOSE NUNEZ, ET. AL., INDEX No. 10457/07), in which Keri Selman, in her affidavit of merit claims to be “Vice President of COUNTRYWIDE HOME LOANS, Attorney in fact for BANK OF NEW YORK.” The Court is concerned that Ms. Selman might be engaged in a subterfuge, wearing various corporate hats. Before granting an application for an order of reference, the Court requires an affidavit from Ms. Selman describing her employment history for the past three years.

    Discussion

    The Court of Appeals (Saratoga County Chamber of Commerce, Inc. v Pataki, 100 NY2d 801, 812 [2003]), cert denied 540 US 1017 [2003]), declared that “[s]tanding to sue is critical to the proper functioning of the judicial system. It is a threshold issue. If standing is denied, the pathway to the courthouse is blocked. The plaintiff who has standing, however, may cross the threshold and seek judicial redress.” Professor David Siegel, in NY Prac, § 136, at 232 [4th ed] instructs is that:

    [i]t is the law’s policy to allow only an aggrieved person to bring a lawsuit . . . A want of “standing to sue,” i n other words, is just another way of saying that this particular plaintiff is not involved in a genuine controversy, and a simple syllogism takes us from there to a “jurisdictional” dismissal: (1) the courts have jurisdiction only over controversies; (2) a plaintiff found to lack “standing” is not involved in a controversy; and (3) the courts therefore have no jurisdiction of the case when such a plaintiff purports to bring it.
    In (Caprer v Nussbaum, 36 AD3d 176, 181 [2d Dept 2006]), the Court held that “[s]tanding to sue requires an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant’s request.” If a plaintiff lacks standing to sue, the plaintiff may not proceed in the action. (Stark v Goldberg, 297 AD2d 203 [1st Dept 2002]).

    It is clear that plaintiff BANK OF NEW YORK lacks standing to foreclose on the instant Orosco note and mortgage. BANK OF NEW YORK has failed to establish ownership of the note and mortgage with a recording of the alleged assignment by MERS on August 21, 2007. Despite alleging that the assignment is in the process of being recorded, it is not recorded. The Court (Campaign v Barba, 23 AD3d 327 [2d Dept 2005], instructed that “[t]o establish a prima facie case in an action to foreclose a mortgage, the plaintiff must establish the existence of the mortgage and the mortgage note, ownership of the mortgage, and the defendant’s default in payment [Emphasis added].” (See Witelson v Jamaica Estates Holding Corp. I, 40 AD3d 284 [1st Dept 2007]; Household Finance Realty Corp. of New York v Wynn, 19 AD3d 545 [2d Dept 2005]; Sears Mortgage Corp. v Yahhobi, 19 AD3d 402 [2d Dept 2005]; Ocwen Federal Bank FSB v Miller, 18 AD3d 527 [2d Dept 2005]; U.S. Bank Trust Nat. Ass’n Trustee v Butti, 16 AD3d 408 [2d Dept 2005]; First Union Mortgage Corp. v Fern, 298 AD2d 490 [2d Dept 2002]; Village Bank v Wild Oaks, Holding, Inc., 196 AD2d 812 [2d Dept 1993]).

    Since BANK OF NEW YORK has failed establish its ownership of the Orosco note and mortgage, the Court denies plaintiff’s application with leave to renew after the recording of the August 21, 2007 assignment and presenting an affidavit from Keri Selman clarifying her employment and what corporation she serves as an officer.

    Conclusion

    Accordingly, it is

    ORDERED, that the application of plaintiff, BANK OF NEW YORK As TRUSTEE FOR THE NOTEHOLDERS OF CWABS, INC. ASSET-BACKED CERTIFICATES, SERIES 2006-SD2, for an order of reference and related relief for the premises located at 211 Weirfield Street, Avenue, Brooklyn, New York (Block 3397, Lot 48, County of Kings) is denied without prejudice; and it is further

    ORDERED, that leave is granted to plaintiff, BANK OF NEW YORK AS TRUSTEE FOR THE NOTEHOLDERS OF CWABS, INC. ASSET-BACKED CERTIFICATES, SERIES 2006-SD2, to renew its application for n order of reference and related relief for the premises located at 211 Weirfield Street, Brooklyn, New York (Block 3397, Lot 48, County of Kings), upon presentation to the Court of: evidence of the recording of the August 21, 2007 assignment of the Orosco note aid mortgage from MERS to plaintiff; and, an affidavit from Keri Selman describing her employment history for the past three years.

    This constitutes the Decision and Order of the Court.

  14. 2009 NY Slip Op 50076(U)
    CREDIT-BASED ASSET SERVICING AND SECURITIZATION, LLC, Plaintiff,
    v.
    BABTUNDE A. AKITOYE, ET AL., Defendants.

    11132/07.
    Supreme Court of the State of New York, Kings County.

    Decided January 20, 2009.
    David P. Case, Esq., Fein Such & Crane LLP, Rochester NY, Plaintiff.

    ARTHUR M. SCHACK, J.

    The motion of plaintiff CREDIT-BASED ASSET SERVICING AND SECURITIZATION, LLC [C-BASS], upon the default of all defendants, for an order of reference in a mortgage foreclosure action for the premises located at 1039 Halsey Street, Brooklyn, New York (Block 1207, Lot 60, County of Kings) is denied without prejudice, with leave to renew upon providing the Court with: documents demonstrating plaintiff C-BASS’s ownership interest in the subject mortgage and note prior to the commencement of this action on April 2, 2007; the loan origination documents for the mortgage and note executed on July 7, 2006 by defendant BABTUNDE A. AKITOYE [AKITOYE] with C-BASS’s assignor, NEW CENTURY MORTGAGE CORPORATION [NEW CENTURY]; and, an affidavit from an officer of C-BASS explaining why its then wholly owned subsidiary, LITTON LOAN SERVICING LP [LITTON], attorney in fact for NEW CENTURY, assigned the instant never performed mortgage and note to C-BASS on July 9, 2007, with an effective date of January 14, 2006, almost six months prior to the execution of the subject mortgage and note; and, how LITTON, then C-BASS’s subsidiary, acted in good faith and loyalty to its principal, NEW CENTURY, by assigning this loan to its parent, C-BASS. Background

    Defendant AKITOYE executed the instant mortgage and note on July 7, 2006 and borrowed $488,000.00 from NEW CENTURY. The mortgage and note were recorded on July 25, 2006, in the Office of the City Register of the City of New York, City Register File Number (CRFN) XXXXXXXXXXXXX [exhibit E of application]. According to the June 19, 2008-affidavit of Debra Lyman, Vice President of C-BASS, plaintiff AKITOYE defaulted on the subject loan with his first payment, due on September 1, 2006, pursuant to the terms of the note [exhibit C of application]. As noted above, plaintiff C-BASS commenced this action with the April 2, 2007 filing of the summons, complaint and notice of pendency with the Kings County Clerk. NEW CENTURY, the originator of the instant loan, on that day, filed for Chapter 11 protection under the U.S. Bankruptcy Code. In the April 3, 2007 New York Times article entitled “Home Lender is Seeking Bankruptcy,” Julie Creswell and Vikas Bajaj wrote: From an 11-story steel-and-glass tower that housed its headquarters in Irvine, Calif., the New Century Financial Corporation ruled as one of the nations’s largest lenders to individuals with weak, or subprime, credit during the recent housing boom. That reign officially ended yesterday, when New Century became the biggest, and most prominent, corporate failure in the subprime mortgage business. Plagued by a spike in loan defaults and a loss of confidence among its financial patron on Wall Street, New Century filed for Chapter 11 protection in Federal Bankruptcy Court in Wilmington, Del. LITTON, attorney in fact for NEW CENTURY, assigned the mortgage and note on July 9, 2007 to plaintiff C-BASS, “effective as of January 14, 2006,” with the assignment recorded on July 30, 2007 in the Office of the City Register of the City of New York, CRFN XXXXXXXXXXXXX [exhibit F of application]. January 14, 2006 was 174 days prior to defendant AKITOYE’s July 7, 2006 execution of the subject mortgage and note. Thus, the effective assignment date is an impossibility. Further, LITTON’s assignment, as attorney in fact for NEW CENTURY, of the subject mortgage and note to C-BASS took place 98 days subsequent to the April 2, 2007 commencement of the instant action. Absent proof that C-BASS had possession of the mortgage and note on April 2, 2008, it is clear that NEW CENTURY, not C-BASS, owned the AKITOYE mortgage on the day that this action commenced. LITTON, according to a July 5, 2007 Atlanta Business Chronicle article, “Litton Loan Servicing plots growth in Henry County,” “is a mortgage servicing company specializing in loss mitigation and default management for residential loans. Litton is a wholly-owned subsidiary of Credit-Based Asset Servicing and Securitization LLC of New York.” Subsequently, C-BASS sold LITTON to Goldman Sachs. A December 10, 2007 C-BASS press release, titled “C-BASS LLC Completes Sale of Litton Loan Servicing,” states:

    Credit-Based Asset Servicing and Securitization LLC (“C-BASS”) today announced that it has successfully completed the sale of Litton Loan Servicing to Goldman Sachs. The sale of Litton, a recognized industry leader in mortgage default management, was a key step for C-BASS (the “Company”) to reach a long-term agreement with its secured and unsecured creditors on November 13, 2007. The terms of the transaction were not disclosed. Since late July 2007, the company had been under liquidity pressure from its lenders and worked with numerous potential counterparties to come up with a solution that would satisfy the Company’s creditors and equity holders. . . . The agreement provides a framework for the Company to manage its portfolio assets, allowing the underlying cashflow to repay the secured and unsecured creditors of C-BASS over time. NEW CENTURY’s limited power of attorney to LITTON, which includes the power to execute mortgage assignments, was not included in plaintiff’s moving papers. However, the Court found this document in a search of the Automated City Register Information System (ACRIS) of the New York City Department of Finance. The Court notes that NEW CENTURY’s limited power of attorney is dated June 22, 2007, which was 80 days after the commencement of the instant action. This Court is concerned that LITTON, as NEW CENTURY’s attorney in fact, assigned the never performed AKITOYE mortgage and note on July 7, 2007 to its owner, C-BASS, for below market value, depriving NEW CENTURY, then in Chapter 11 bankruptcy proceedings of market value for the AKITOYE mortgage and note. Further, the Court wonders why C-BASS would purchase a loan that never performed, 312 days after its September 1, 2006 default. Did C-BASS pay a bargain basement price to NEW CENTURY? Did LITTON report this assignment price to the Bankruptcy Trustee? Did LITTON, NEW CENTURY’s agent, in the July 7, 2007 assignment give an undue advantage to its owner, C-BASS, or did LITTON act properly on behalf of its principal, NEW CENTURY? These questions beg answers, even if C-BASS can prove ownership of the instant mortgage and note when this action commenced on April 2, 2007, 80 days before NEW CENTURY gave LITTON a limited power of attorney and 98 days before the assignment by LITTON, as attorney in fact for NEW CENTURY, to C-BASS.

    Discussion

    Plaintiff C-BASS must have “standing” to bring this action. “Standing to sue is critical to the proper functioning of the judicial system. It is a threshold issue. If standing is denied, the pathway to the courthouse is blocked. The plaintiff who has standing, however, may cross the threshold and seek judicial redress.” (Saratoga County Chamber of Commerce, Inc. v Pataki, 100 NY2d 801 812 [2003], cert denied 540 US 1017 [2003]). Professor David Siegel, in NY Prac, § 136, at 232 [4th ed] instructs that: [i]t is the law’s policy to allow only an aggrieved person to bring a lawsuit . . . A want of “standing to sue,” in other words, is just another way of saying that this particular plaintiff is not involved in a genuine controversy, and a simple syllogism takes us from there to a “jurisdictional” dismissal: (1) the courts have jurisdiction only over controversies; (2) a plaintiff found to lack “standing” is not involved in a controversy; and (3) the courts therefore have no jurisdiction of the case when such a plaintiff purports to bring it. “Standing to sue requires an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant’s request.” (Caprer v Nussbaum (36 AD3d 176, 181 [2d Dept 2006]). If a plaintiff lacks standing to sue, the plaintiff may not proceed in the action. (Stark v Goldberg, 297 AD2d 203 [1st Dept 2002]). Plaintiff C-BASS lacked standing to foreclose on the instant mortgage and note when this action commenced on April 2, 2007, the day C-BASS filed the summons and complaint with the Kings County Clerk, because it did not own the mortgage and note that day. The instant mortgage and note were assigned to C-BASS 98 days later on July 9, 2007. The printed July 9, 2007 assignment states that “[a]ssignor has caused this instrument to be duly executed as of this 9th day of July, 2007, by a duly authorized officer” and then, handwritten, it states “[e]ffective as of January 14, 2006.” This attempt at retroactivity to January 14, 2006, 174 days prior to the July 10, 2006 execution of the mortgage and note, fails to demonstrate C-BASS’s ownership interest on the action’s commencement date. The Court, in Campaign v Barba (23 AD3d 327 [2d Dept 2005]), instructed that “[t]o establish a prima facie case in an action to foreclose a mortgage, the plaintiff must establish the existence of the mortgage and the mortgage note, ownership of the mortgage, and the defendant’s default in payment [Emphasis added].” (See Witelson v Jamaica Estates Holding Corp. I, 40 AD3d 284 [1st Dept 2007]; Household Finance Realty Corp. of New York v Wynn, 19 AD3d 545 [2d Dept 2005]; Sears Mortgage Corp. v Yahhobi, 19 AD3d 402 [2d Dept 2005]; Ocwen Federal Bank FSB v Miller, 18 AD3d 527 [2d Dept 2005];U.S. Bank Trust Nat. Ass’n Trustee v Butti, 16 AD3d 408 [2d Dept 2005]; First Union Mortgage Corp. v Fern, 298 AD2d 490 [2d Dept 2002]; Village Bank v Wild Oaks, Holding, Inc., 196 AD2d 812 [2d Dept 1993]). In this case, “the crucial issue then is whether the written assignment, dated after the commencement of the action but stated to be effective on a date before the commencement, was effective to give plaintiff the requisite interest in the mortgage and thus standing to commence an action to foreclose it.” (Deutsche Bank Trust Co. Americas v Peabody, 20 Misc 3d 1108 [A][Sup Ct, Saratoga County 2008]). Assignments are made by either written instrument or the assignor physically delivering the mortgage and note to the assignee. The written assignment to C-BASS was not effective due to the impossible retroactive effective date. Also, C-BASS failed to demonstrate to the Court that it had physical possession of the AKITOYE mortgage and note on April 2, 2007. “Our courts have repeatedly held that a bond and mortgage may be transferred by delivery without a written instrument of assignment.” (Flyer v Sullivan, 284 AD 697, 699 [1d Dept 1954]). (See Levy v Louvre Realty Co., 222 NY 14, 20 [1917]; Curtis v Moore, 152 NY 159 [1897]; Bankers Trust Co. v Hoovis, 263 AD2d 937, 938 [3d Dept 1999]; Washington Mut. Bank v Patterson, 21 Misc 3d 1145 (A) [Sup Ct, Kings County 2008]; Fremont Investment & Loan v Laroc, 21 Misc 3d 1124 (A) [Sup Ct, Queens County 2008]; Deutsche Bank Trust Co. Americas v Peabody, supra; Countrywide Home Loans, Inc. v Taylor, 17 Misc 3d 595 [Sup Ct, Suffolk County 2007]. Plaintiff C-BASS “offers no evidence that it took physical possession of the note and mortgage before commencing this action, and again, the written assignment was signed after defendant was served. The assignment’s language purporting to give it retroactive effect, absent a prior or contemporary delivery of the note and mortgage is insufficient to grant it standing.” (Deutsche Bank Trust Co. Americas v Peabody, supra). If C-BASS is able to prove that it owned the subject mortgage and note on April 2, 2007, then the Court must address issues regarding the origination of the AKITOYE mortgage and note. Defendant AKITOYE never made any payments of principal and interest. The Court is concerned that defendant AKITOYE’s immediate default was a strong indicator of either defendant AKITOYE’s inability to pay or outright fraud. Therefore, to determine if fraud has been perpetrated, plaintiff C-BASS must provide the Court with all documentation used to grant the subject loan. The Court will determine if the borrower did not have sufficient income to make any payments, which could mean that the loan may have been in violation of federal statutes, or that the entire mortgage event was a fraud. Next the Court is confronted with the issue of LITTON, attorney in fact for NEW CENTURY, assigning the AKITOYE mortgage and note to C-BASS, LITTON’s owner. “An attorney in fact is merely a special kind of agent.” (Etterle v Excelsior Ins. Co. of New York, 74 AD2d 436, 441 [2d Dept 1980]). Further, the agent, who has a fiduciary relationship with the principal, “is a party who acts on behalf of the principal with the latter’s express, implied, or apparent authority.” (Maurillo v Park Slope U-Haul, 194 AD2d 142, 146 [2d Dept 1992]). “Agents are bound at all times to exercise the utmost good faith toward their principals. They must act in accordance with the highest and truest principles or morality.” (Elco Shoe Mfrs. V Sisk, 260 NY 100, 103 [1932]). (See Sokoloff v Harriman Estates Development Corp., 96 NY 409 [2001]); Lamdin v Broadway Surface Advertising Corp., 272 NY 133, [1936]). The incestuous relationship between NEW CENTURY’s agent LITTON and C-BASS, especially while NEW CENTURY was in Chapter 11 bankruptcy, forces the Court to determine if LITTON acted with “the highest good faith toward” NEW CENTURY, when assigning the AKITOYE never performed loan to C-BASS. Did C-BASS purchase the AKITOYE loan for market value or did LITTON take advantage of NEW CENTURY’s Chapter 11 bankruptcy proceedings for the benefit of C-BASS? The Court, without knowledge of the financial details of the July 7, 2007 assignment is unable to make that determination. Further, if LITTON violated its duty of loyalty to NEW CENTURY, then it is not entitled to any compensation from its principal, NEW CENTURY. If an agent acts “adversely to his employer in any part of the transaction or omits to disclose any interest which would naturally influence his employer’s conduct in dealing with the subject of employment, it is such a fraud upon his employer as [the agent] forfeits any right to compensation for his services. (Murray v Beard, 102 NY 505 [1886]).” (Beatty v Guggenheim Exploration Co., 223 NY 294, 304 [1918]). “The faithless agent rule thus is founded upon the agent’s duty of loyalty to the principal.” (G.K. Alan Assoc., Inc. v Lazzari, 44 AD3d 95, 101 [2d Dept 2007]). Therefore, if plaintiff C-BASS renews its application for an order of reference, it must include an affidavit from an officer of C-BASS explaining how its wholly owned subsidiary LITTON acted in good faith and loyalty to its principal, NEW CENTURY, when assigning the instant mortgage and note on July 9, 2007, and why C-BASS purchased a never performed loan, 214 days in default when this action commenced on April 2, 2007.

    Conclusion

    Accordingly, it is ORDERED, that the motion of plaintiff CREDIT-BASED ASSET SERVICING

    AND SECURITIZATION, LLC, for an order of reference for the premises located at 1039 Halsey Street, Brooklyn, New York (Block 1207, Lot 60, County of Kings) is denied without prejudice; and it is further ORDERED, that leave is granted to plaintiff CREDIT-BASED ASSET SERVICING AND SECURITIZATION, LLC, to renew its application for an order of reference for the premises located at 1039 Halsey Street, Brooklyn, New York (Block 1207, Lot 60, County of Kings), if it presents to the Court, within 60 days of the date of this decision and order: documents demonstrating plaintiff CREDIT-BASED ASSET SERVICING AND SECURITIZATION, LLC’s ownership interest in the subject mortgage and note prior to the commencement of this action on April 2, 2007; the loan origination documents for the mortgage and note executed on July 7, 2006 by defendant BABTUNDE A. AKITOYE with NEW CENTURY MORTGAGE CORPORATION; an affidavit from an officer of plaintiff CREDIT-BASED ASSET SERVICING AND SECURITIZATION, LLC explaining why its then wholly owned subsidiary, LITTON LOAN SERVICING LP, attorney in fact for NEW CENTURY MORTGAGE CORPORATION, assigned the instant never performed mortgage and note to plaintiff CREDIT-BASED ASSET SERVICING AND SECURITIZATION, LLC on July 7, 2007, with an effective date of January 14, 2006, almost six months prior to the execution of the subject mortgage and note, and how LITTON LOAN SERVICING LP, then plaintiff CREDIT-BASED ASSET SERVICING AND SECURITIZATION, LLC’s wholly owned subsidiary, acted in good faith and loyalty to its principal NEW CENTURY MORTGAGE CORPORATION, by assigning the subject never performed loan to its parent, CREDIT-BASED ASSET SERVICING AND SECURITIZATION, LLC; and an affidavit or affirmation identifying whether the instant mortgage loan, pursuant to L 2008, ch 472, § 3-a is a subprime home loan as defined in Real Property and Actions Proceedings Law § 1304 or is a high-cost home loan as defined in Banking Law § 6-l. This constitutes the Decision and Order of the Court.

  15. 2009 NY Slip Op 50191(U)
    DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee Under Pooling and Servicing Agreement Dated as of April 1, 2007 Securities Asset Backed Receivables, LLC Trust 2007-BR2 Mortgage Pass-through Certificates, Series 2007-br2, Plaintiff,
    v.
    LINDA BAILEY, ET. AL., Defendants.

    3747/08.
    Supreme Court of the State of New York, Kings County.

    Decided February 9, 2009.
    ARTHUR M. SCHACK, J.

    In this mortgage foreclosure action for the premises located at 177 Grafton Street, Brooklyn, New York (Block 3552, Lot 17, County of Kings) plaintiff DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE UNDER POOLING AND SERVICING AGREEMENT DATED AS OF APRIL 1, 2007 SECURITIES ASSET BACKED RECEIVABLES, LLC TRUST 2007-BR2 MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2007-BR2 [DEUTSCHE BANK] moves, upon the default of all defendants, for an order of reference. The motion is denied without prejudice, with leave to renew upon submitting to the Court within sixty (60) days of this decision and order: documents demonstrating that DEUTSCHE BANK had an ownership interest in the subject mortgage and note prior to the February 4, 2008 commencement of this action; an affidavit from an officer of DEUTSCHE BANK explaining why DEUTSCHE BANK purchased the instant nonperforming loan, then 110 days in arrears; and an affidavit or affirmation identifying whether the instant mortgage loan, pursuant to L 2008, ch 472, § 3-a is a subprime home loan as defined in Real Property and Actions Proceedings Law § 1304 or is a high-cost home loan as defined in Banking Law § 6-l.

    Background

    Defendant LINDA BAILEY [BAILEY] executed the instant mortgage and note on December 8, 2006 and borrowed $433,600.00 from NEW CENTURY MORTGAGE CORPORATION [NEW CENTURY]. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. [MERS], as nominee for NEW CENTURY, recorded the instant mortgage and note on January 5, 2007, in the Office of the City Register of the City of New York, City Register File Number (CRFN) XXXXXXXXXXXX. According to the March 17, 2008-affidavit of Rolando Reyes, Vice President of DEUTSCHE BANK, defendant BAILEY defaulted on the subject loan by failing to make her November 1, 2007 payment.

    As noted above, plaintiff DEUTSCHE BANK commenced this action by filing the summons, complaint and notice of pendency with the Office of the Kings County Clerk on February 4, 2008.

    On February 15, 2008, MERS, as nominee for NEW CENTURY, assigned the subject mortgage and note to plaintiff DEUTSCHE BANK and the assignment was recorded on April 9, 2008 in the Office of the City Register of the City of New York, CRFN XXXXXXXXXXXXXX. Absent proof that DEUTSCHE BANK had possession of the mortgage and note on February 4, 2008, it is clear that MERS, as nominee for NEW CENTURY, not DEUTSCHE BANK, owned the BAILEY mortgage that day, the day that this action commenced.

    Further, the assignment by MERS, as nominee for NEW CENTURY, to DEUTSCHE BANK took place almost four months after BAILEY’S default. The assignment of the BAILEY nonperforming loan to DEUTSCHE BANK appears to be a small ripple in what former Federal Reserve Board Chairman Alan Greenspan called, in his October 23, 2008 testimony before the House Oversight Committee, “a once in a century credit tsunami.” The Court wonders did DEUTSCHE BANK purchase the BAILEY mortgage loan at a deep discount or did DEUTSCHE BANK violate its fiduciary duty to its stockholders with the purchase of a loan that defaulted almost four months prior to its assignment to DEUTSCHE BANK?

    Discussion

    Plaintiff DEUTSCHE BANK must have “standing” to bring this action. “Standing to sue is critical to the proper functioning of the judicial system. It is a threshold issue. If standing is denied, the pathway to the courthouse is blocked. The plaintiff who has standing, however, may cross the threshold and seek judicial redress.” (Saratoga County Chamber of Commerce, Inc. v Pataki, 100 NY2d 801 812 [2003], cert denied 540 US 1017 [2003]). Professor David Siegel, in NY Prac, § 136, at 232 [4th ed] instructs that:

    [i]t is the law’s policy to allow only an aggrieved person to bring a lawsuit . . . A want of “standing to sue,” in other words, is just another way of saying that this particular plaintiff is not involved in a genuine controversy, and a simple syllogism takes us from there to a “jurisdictional” dismissal: (1) the courts have jurisdiction only over controversies; (2) a plaintiff found to lack “standing” is not involved in a controversy; and (3) the courts therefore have no jurisdiction of the case when such a plaintiff purports to bring it.
    “Standing to sue requires an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant’s request.” (Caprer v Nussbaum (36 AD3d 176, 181 [2d Dept 2006]). If a plaintiff lacks standing to sue, the plaintiff may not proceed in the action. (Stark v Goldberg, 297 AD2d 203 [1st Dept 2002]).

    Plaintiff DEUTSCHE BANK lacked standing to foreclose on the instant mortgage and note when this action commenced on February 4, 2008, the day DEUTSCHE BANK filed the summons and complaint with the Kings County Clerk, because it did not own the mortgage and note on that day. The Court, in Campaign v Barba (23 AD3d 327 [2d Dept 2005]), instructed that “[t]o establish a prima facie case in an action to foreclose a mortgage, the plaintiff must establish the existence of the mortgage and the mortgage note, ownership of the mortgage, and the defendant’s default in payment [ Emphasis added].” (See Witelson v Jamaica Estates Holding Corp. I, 40 AD3d 284 [1st Dept 2007]; Household Finance Realty Corp. of New York v Winn, 19 AD3d 545 [2d Dept 2005]; Sears Mortgage Corp. v Yaghhobi, 19 AD3d 402 [2d Dept 2005]; Ocwen Federal Bank FSB v Miller, 18 AD3d 527 [2d Dept 2005]; U.S. Bank Trust Nat. Ass’n Trustee v Butti, 16 AD3d 408 [2d Dept 2005]; First Union Mortg. Corp. v Fern, 298 AD2d 490 [2d Dept 2002]; Village Bank v Wild Oaks Holding, Inc., 196 AD2d 812 [2d Dept 1993]).

    Assignments are made by either written instrument or by the assignor physically delivering the mortgage and note to the assignee. DEUTSCHE BANK failed to demonstrate to the Court that it had physical possession of the BAILEY mortgage and note on February 4, 2008. “Our courts have repeatedly held that a bond and mortgage may be transferred by delivery without a written instrument of assignment.” (Flyer v Sullivan, 284 AD 697, 699 [1d Dept 1954]). (See Levy v Louvre Realty Co., 222 NY 14, 20 [1917]; Curtis v Moore, 152 NY 159 [1897]; Bankers Trust Co. v Hoovis, 263 AD2d 937, 938 [3d Dept 1999]; Indymac Bank, FSB v Boyd, 22 Misc 3d 1113 (A) [Sup Ct, Kings County 2009]; Credit-Based Asset Management and Securitization, LLC v Akitoye, 22 Misc 3d 1110 (A) [Sup Ct, Kings 2009]; Washington Mut. Bank v Patterson, 21 Misc 3d 1145 (A) [Sup Ct, Kings County 2008]; Fremont Investment & Loan v Laroc, 21 Misc 3d 1124 (A) [Sup Ct, Queens County 2008]; Deutsche Bank Trust Co. Americas v Peabody, supra; Countrywide Home Loans, Inc. v Taylor, 17 Misc 3d 595 [Sup Ct, Suffolk County 2007]). Plaintiff DEUTSCHE BANK “offers no evidence that it took physical possession of the note and mortgage before commencing this action, and again, the written assignment was signed after defendant was served.” (Deutsche Bank Trust Co. Americas v Peabody, 20 Misc 3d 1108 [A] [Sup Ct, Saratoga County 2008]).

    Conclusion

    Accordingly, it is

    ORDERED, that the motion of plaintiff DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE UNDER POOLING AND SERVICING AGREEMENT DATED AS OF APRIL 1, 2007 SECURITIES ASSET BACKED RECEIVABLES, LLC TRUST 2007-BR2 MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2007-BR2 for an order of reference for the premises located at 177 Grafton Street, Brooklyn, New York (Block 3552, Lot 17, County of Kings) is denied without prejudice; and it is further

    ORDERED, that leave is granted to plaintiff DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE UNDER POOLING AND SERVICING AGREEMENT DATED AS OF APRIL 1, 2007 SECURITIES ASSET BACKED RECEIVABLES, LLC TRUST 2007-BR2 MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2007-BR2 to renew its motion for an order of reference for the premises located at 177 Grafton Street, Brooklyn, New York (Block 3552, Lot 17, County of Kings), if it submits to the Court, within sixty (60) days of the date of this decision and order:

    (1) documents demonstrating that plaintiff DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE UNDER POOLING AND SERVICING AGREEMENT DATED AS OF APRIL 1, 2007 SECURITIES ASSET BACKED RECEIVABLES, LLC TRUST 2007-BR2 MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2007-BR2 had an ownership interest in the subject mortgage and note prior to the February 4, 2008 commencement of this action;
    (2) an affidavit from an officer of DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE UNDER POOLING AND SERVICING AGREEMENT DATED AS OF APRIL 1, 2007 SECURITIES ASSET BACKED RECEIVABLES, LLC TRUST 2007-BR2 MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2007-BR2 explaining why DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE UNDER POOLING AND SERVICING AGREEMENT DATED AS OF APRIL 1, 2007 SECURITIES ASSET BACKED RECEIVABLES, LLC TRUST 2007-BR2 MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2007-BR2 purchased the instant nonperforming loan, 110 days after its default; and
    (3) an affidavit or affirmation identifying whether the instant mortgage loan, pursuant to L 2008, ch 472, § 3-a is a subprime home loan as defined in Real Property and Actions Proceedings Law § 1304 or is a high-cost home loan as defined in Banking Law § 6-l.
    This constitutes the Decision and Order of the Court.

  16. 2008 NY Slip Op 51133(U)
    WELLS FARGO BANK, N.A., as Trustee C/O LITTON LOAN SERVICING, LP, Plaintiff,
    v.
    HILLARY FARMER, JR., ET. AL., Defendants.

    27296/07.
    Supreme Court of the State of New York, Kings County.

    Decided June 5, 2008.
    Steven J. Baum, PC, Buffalo NY, Plaintiff.

    ARTHUR M. SCHACK, J.,

    Plaintiff has renewed its application for an order of reference for the subject premises, but the papers submitted fail to cure the defects enumerated in my prior decision and order. The purported plaintiff, WELLS FARGO, does not own the instant mortgage loan. Therefore, the instant matter is dismissed with prejudice.

    Background

    Defendant HILLARY FARMER borrowed $460,000.00 from ARGENT on December 3, 2004. The note and mortgage were recorded in the Office of the City Register, New York City Department of Finance on December 21, 2004, at City Register File Number (CRFN) XXXXXXXXXXXXX. Five days subsequent, on December 8, 2004, two invalid assignments of the instant mortgage and note took place, with ARGENT assigning the note and mortgage to AMERIQUEST, and then AMERIQUEST assigning the note and mortgage to plaintiff WELLS FARGO. Both of these assignments were not recorded for more than fourteen months, until February 21, 2006, when they were both recorded at that same time and sequentially, at CRFN XXXXXXXXXXXXX and CRFN XXXXXXXXXXXXX.

    While both assignments list the offices of ARGENT and AMERIQUEST at

    different locations in Orange, California, both assignments were executed by “Jose Burgos — Agent,” before the same notary public, in Westchester County, New York. Both of these assignments failed to have a corporate resolution or a power of attorney attached, which authorized the “Agent” to act for his principal. Thus, these assignments are invalid and plaintiff WELLS FARGO lacks standing to bring the instant foreclosure action.

    I allowed plaintiff an opportunity to cure the assignment defects, by explaining: by what authority did Mr. Burgos act as “Agent” for both ARGENT and AMERIQUEST; why Mr. Burgos acted on the same day as the assignor and the assignee of two mortgage behemoths; and, why corporations located in Orange, California executed assignments on the other side of the continent, in Westchester County, New York?

    Then, assuming that WELLS FARGO could explain and cure the assignment defects, WELLS FARGO had to provide answers about LITTON, its alleged servicer. The instant application for an order of reference contains an “affidavit of merit and amount due” by Debra Lyman, Vice President of LITTON, attorney in fact for WELLS FARGO. The Limited Power of Attorney, dated May 5, 2005, attached to the instant application for an order of reference, states that WELLS FARGO:

    in its capacity as trustee under certain Servicing Agreements relating to Park Place Securities Inc. Asset Backed Pass through Certificates, Series 2005-WLL1 dated as of March 1, 2005 (the “Agreement”) by and among Park Place Securities, Inc. as (“Depositor”) and Litton Loan Servicing LP as (“Servicer”) and Wells Fargo Bank, N.A. as Trustee hereby constitutes and appoints:
    LITTON LOAN SERVICING LP its true and lawful attorney-in-fact . . . to execute and deliver on behalf of [WELLS FARGO] any and all of the following instruments [documents with respect to foreclosures] to the extent consistent with the terms and conditions of the Agreement [sic].
    Since the Court does not know for whom WELLS FARGO is the Trustee, the Court has no way to know if the above-named March 1, 2005 Agreement refers to the instant mortgage. Since a “trustee” is “one who, having legal title to property, holds it in trust for the benefit of another and owes a fiduciary duty to that beneficiary” (Black’s Law Dictionary 1519 [7th ed 1999]), the Court needs to know for whom WELLS FARGO holds the mortgage loan in trust. Further, to determine if Ms. Lyman had the authority to execute her affidavit on behalf of plaintiff WELLS FARGO, the Court required an inspection of the March 1, 2005 Servicing Agreement. (EMC Mortg. Corp. v. Batista, 15 Misc 3d 1143 (A), [Sup Ct, Kings County 2007]; Deutsche Bank Nat. Trust Co. v. Lewis, 14 Misc 3d 1201 (A) [Sup Ct, Suffolk County 2006]).

    Discussion

    In my previous decision and order I determined that plaintiff WELLS FARGO lacked “standing” to bring the instant action. The Court of Appeals (Saratoga County Chamber of Commerce, Inc. v. Pataki, 100 NY2d, 901, 812 [2003]), cert denied 540 US 1017 [2003]) held that “[s]tanding to sue is critical to the proper functioning of the judicial system. It is a threshold issue. If standing is denied, the pathway to the courthouse is blocked. The plaintiff who has standing, however, may cross the threshold and seek judicial redress.” In Carper v. Nussbaum, 36 AD3d 176, 181 (2d Dept 2006), the Court held that “[s]tanding to sue requires an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant’s request.” If a plaintiff lacks standing to sue, the plaintiff may not proceed in the action. (Stark v. Goldberg, 297 AD2d 203 [1d Dept 2002]).

    In the instant action, the two December 8, 2004 assignments — ARGENT to AMERIQUEST and AMERIQUEST to WELLS FARGO — are defective. This denies WELLS FARGO’s standing to bring this action. The recorded assignments are both by “Jose Burgos — Agent.” An “agent” is “one who is authorized to act for or in place of another; a representative” (Black’s Law Dictionary 64 [7th ed 1999]). The assignments lack any power of attorney granted by either ARGENT or AMERIQUEST to Jose Burgos to act as their agents. Real Property Law (RPL) § 254 (9) states:

    Power of attorney to assignee. The word “assign” or other words of assignment, when contained in an assignment of a mortgage and bond or mortgage and note, must be construed as having included in their meaning that the assignor does thereby make, constitute and appoint the assignee the true and lawful attorney, irrevocable, of the assignor, in the name of the assignor, or otherwise, but at the proper costs and charges of the assignee, to have, use and take all lawful ways and means for the recovery of the money and interest secured by the said mortgage and bond or mortgage and note, and in case of payment to discharge the same as fully as the assignor might or could do if the assignment were not made. [Emphasis added]
    “An attorney in fact is merely a special kind of agent.” (Etterle v. Excelsior Ins. Co. of New York, 74 AD2d 436, 441 [2d Dept 1980]). Further, the agent, who has a fiduciary relationship with the principal, “is a party who acts on behalf of the principal with the latter’s express, implied, or apparent authority.” (Maurillo v. Park Slope U-Haul, 194 AD2d 142, 146 [2d Dept 1992]). Therefore, to have a proper assignment of a mortgage by an authorized agent, a power of attorney is necessary to demonstrate how the agent is vested with authority to assign the mortgage. “No special form or language is necessary to effect an assignment as long as the language shows the intention of the owner of a right to transfer it [Emphasis added].” (Tawil v. Finkelstein Bruckman Wohl Most & Rothman, 223 AD2d 52, 55 [1d Dept 1996]; see Suraleb, Inc. v. International Trade Club, Inc., 13 AD3d 612 [2d Dept 2004]).

    In an attempt to explain why Mr. Burgos, the “agent,” acted twice as an assignor and once as an assignee, on December 8, 2004, plaintiff’s counsel has provided the Court with an affidavit of Diane E. Tiberend, dated March 28, 2008. Ms. Tiberend, as of the date of her affidavit is: General Counsel, Senior Vice President and Secretary of ACC Capital Holdings Corporation (ACH), the parent company of ARGENT and AMERIQUEST; Assistant Secretary of AMERIQUEST from September 21, 1999; and, was Assistant Secretary of ARGENT from July 2, 2001 until November 1, 2007, when she became the Secretary of ARGENT. Unmentioned by Ms. Tiberend and plaintiff’s counsel are the August 31, 2007 CITIGROUP purchases of ARGENT and AMERIQUEST. Ms. Tiberend wears another hat, that of corporate functionary for CITIGROUP subsidiaries.

    Eric Dash in his September 1, 2007 New York Times article, “Citigroup Buys Parts of a Troubled Mortgage Lender,” wrote:

    Citigroup’s investment banking arm scooped up the assets of the troubled subprime mortgage lender ACC Capital Holdings yesterday, the same day that the struggling company announced that it was closing.
    Citigroup bought the remnants of ACC’s Argent wholesale mortgage origination division as well as the servicing rights to collect on more than $45 billion in home loans. Terms of the deal were not disclosed.

    ACC said that it was shutting its only other holding, its Ameriquest retail mortgage unit, which once billed itself as the sponsor of the American dream but was tarnished by scandal.

    “ACC Capital Holdings is going to maintain operations as it prepares for the orderly wind-down of our retail mortgage business, which is no longer accepting applications,” the company said.

    ACC Capital is the latest of at least 15 subprime lenders to be closed as Wall Street stopped pouring capital into the industry after 20>rising homeowner delinquencies and defaults. The closing is the end of a long-challenged company, founded by the billionaire Roland E. Arnall, who last year was named United States ambassador to the Netherlands.

    “The whole Ameriquest and Argent businesses have been in limbo for at least a year,” said Guy Cecala, publisher of Inside Mortgage Finance. “They were one of the first subprime lenders to show problems: they had regulatory concerns, volume going down and problems with loan quality.”

    In 2006, the company agreed to pay $325 million to settle federal and state regulators’ claims of deceptive lending practices. Citigroup said yesterday that it would pick up the remnants of Argent, ACC Capital’s wholesale mortgage origination business, whose nationwide broker network was once under fire for abusive practices. Its operations have all but shut down.

    Citigroup executives said that they planned to overhaul the unit’s management team and lending practices, change its name to Citi Residential Lending and broaden its product lines. They plan to restart loan origination operations slowly.

    In ¶ 6 of her affidavit, Ms. Tiberend refers to the “dual assignment process,” stating that “[t]o secure funds to lend a complete chain of assignments had to be provided to the related lender.” Further, in ¶ 6, she refers to unnamed “related warehouse lenders.” A “warehouse lender” provides a line of credit to a loan originator to fund a mortgage until it is sold into the secondary market, directly or through securitization. Defendant FARMER executed the instant mortgage with ARGENT on December 3, 2004. The assignments took place five days later on December 8, 2004. Thus, it appears that ARGENT borrowed the funds from a “warehouse lender(s)” to originate the FARMER loan, anticipating paying the loan back to the “warehouse lender(s)” after the mortgage loan was securitizied into a collateralized debt obligation (CDO) with WELLS FARGO as the Trustee. However, the Court still cannot understand the necessity for the “dual assignment process.” Why couldn’t an officer of ARGENT have assigned the FARMER mortgage to WELLS FARGO, as Trustee for a designated beneficiary, a named CDO?

    Ms. Tiberend also claims, in ¶ 6 of her affidavit, that since ARGENT and AMERIQUEST were located in separate locations and to avoid the loss or destruction of original loan documents while in transit, “the dual assignment process” was conceived and when approved by the related warehouse lenders was implemented. I was instrumental in spearheading the dual assignment process in my position as Senior Counsel of ACH.”

    She claims, in ¶ 7, that both ARGENT and AMERIQUEST authorized by corporate resolution the same personnel to execute both assignments. “This insured that the warehouse lender receive the loan documents in a timely fashion and eliminated the risk posed by transit of the loan documents to a location other than the warehouse lender’s office.”She alleges that Mr. Burgos as an employee of ARGENT was appointed as a limited signing officer of both ARGENT and AMERIQUEST by corporate resolutions.

    However, she states, in ¶ 10:

    A diligent search of corporate records for the specific corporate resolutions cannot currently be found. In lieu thereof, and based on my actual knowledge and officer’s position at both argent and Ameriquest in December 2004 and continuously since that date I have attached an Officer’s Certificate memorializing Mr. Burgos’ appointment on behalf of each of the companies. (See Exhibit 6 and 7). [Emphasis added]
    Exhibits 6 and 7 are her attempt at nunc pro tunc corporate appointments of Mr. Burgos, more than three years after his execution of the assignments as “Agent.” These Officer’s Certificates are unrecorded and lack merit. This is not acceptable to the Court. It is clear that Mr. Burgos in acting as “Agent” needed authority for his actions, either by corporate resolution or by power of attorney. Since none were recorded with the December 8, 2008 assignments, the Court’s approval of Ms. Tiberend’s March 28, 2008 appointments of Mr. Burgos would be a legal miscarriage, despite Ms. Tiberend’s claim that the “dual assignment system” was “conceived and when approved by the related warehouse lenders was implemented.

    “Further, the second December 8, 2008 assignment, from AMERIQUEST to “Wells Fargo Bank, N.A., as Trustee,” fails to name a beneficiary for the Trustee. The failure to name a beneficiary for the Trustee renders the assignment without merit. It is axiomatic that “[t]here are four essential elements of a trust: (1) a designated beneficiary; (2) a designated trustee; (3) a fund or other property sufficiently designated or identified to enable title thereto to pass to the trustee; and (4) actual delivery or legal assignment of the property to the trustee, with the intention of passing legal title to such property to the trustee (Brown v. Spohr, 180 NY 201, 209).” (In re Mannara, 5 Misc 3d 556, 558 [Sur Ct, New York County 2004]). (See In re Marcus Trusts, 2 AD3d 640, 641 [2d Dept 2003]; Orentreich v. Prudential Ins. Co. of America, 275 AD2d 675 [1d Dept 2000]).

    Plaintiff’s counsel has provided the Court with an affidavit, dated March 28, 2008, by Kim M. Miller, “Vice President of Bankruptcy, Litigation, Default Documents and Foreclosures of WELLS FARGO BANK, N.A.” She alleges that WELLS FARGO is Trustee for a CDO, “Park Place Securities Inc. Asset-Backed Pass-Through Certificates,

    Series 2005-WLL1, pursuant to a Pooling and Servicing Agreement between Park Place Securities, Wells Fargo, N.A. and Litton Loan Servicing LP as dated March 1, 2005.” I conducted an in-camera review of the March 1, 2005 Pooling and Servicing Agreement and cannot find any reference in it to the instant FARMER mortgage loan.

    Therefore, since the AMERIQUEST to WELLS FARGO assignment is silent as to for whom WELLS FARGO is the Trustee, plaintiff has failed to demonstrate how the May 5, 2005 limited power of attorney from WELLS FARGO to LITTON authorizes an “affidavit of merit and amount due” by Debra Lyman, Vice President of LITTON. All of the defendants in the instant action have defaulted. CPLR § 3215 (f) requires that in an application for default judgment, “the applicant shall file proof of service of the summons and the complaint, or a summons and notice served pursuant to subdivision (b) of rule 305 or subdivision (a) of rule 316 of this chapter, and proof of the facts constituting the claim, the default and the amount due by affidavit made by the party. [Emphasis added].” Plaintiffs have failed to submit “proof of the facts” in “an affidavit made by the party.” The “affidavit of facts” was submitted by Debra Lyman, Vice President of LITTON, the alleged servicing agent for WELLS FARGO and its unknown beneficiary. As discussed above, the Court cannot determine if Ms. Lyman is the servicing agent for this loan.

    Both December 8, 2004 defective assignments — ARGENT to AMERIQUEST and AMERIQUEST to WELLS FARGO — are voided and cancelled. ARGENT is the owner of the FARMER mortgage loan. Therefore, plaintiff WELLS FARGO’s application for an order of reference is dismissed with prejudice. WELLS FARGO does not have title to the instant mortgage and lacks standing to proceed in the instant action. The Appellate Division, Second Department (Kluge v. Fugazy, 145 AD2d 537, 538 [2d Dept 1988]), held that a “foreclosure of a mortgage may not be brought by one who has no title to it and absent transfer of the debt, the assignment of the mortgage is a nullity.” Citing Kluge v. Fugazy, the Court (Katz v. East-Ville Realty Co., 249 AD2d 243 [1st Dept 1998]), held that “[p]laintiff’s attempt to foreclose upon a mortgage in which he had no legal or equitable interest was without foundation in law or fact.” The Court, in Campaign v. Barba, 23 AD3d 327 [2d Dept 2005], held that “[t]o establish a prima facie case in an action to foreclose a mortgage, the plaintiff must establish the existence of the mortgage and the mortgage note, ownership of the mortgage, and the defendant’s default in payment [Emphasis added].” (See Household Finace Realty Corp. of New York v. Wynn, 19 AD3d 545 [2d Dept 2005]; Sears Mortgage Corp. v. Yahhobi, 19 AD3d 402 [2d Dept 2005]; Ocwen Federal Bank FSB v. Miller, 18 AD3d 527 [2d Dept 2005]; U.S. Bank Trust Nat. Ass’n v. Butti, 16 AD3d 408 [2d Dept 2005]; First Union Mortgage Corp. v. Fern, 298 AD2d 490 [2d Dept 2002]; Village Bank v. Wild Oaks Holding, Inc., 196 AD2d 812 [2d Dept 1993].

    Conclusion

    Accordingly, it is

    ORDERED that the renewed application of plaintiff WELLS FARGO BANK, N.A., AS TRUSTEE, for an order of reference for the premises located at 363 Madison Street, Brooklyn, New York (Block 1820, Lot 76, County of Kings) is denied with prejudice; and it is further

    ORDERED that the following real estate transactions for 363 Madison Street, Brooklyn, New York (Block 1820, Lot 76, County of Kings) are voided and cancelled: the Assignment of Mortgage dated December 8, 2004 and recorded on February 21, 2006, at City Register File Number XXXXXXXXXXXXX; and, the Assignment of Mortgage dated December 8, 2004 and recorded on February 21, 2006, at City Register File Number XXXXXXXXXXXXX; and it is further

    ORDERED that the Office of the City Register of the New York City Department of Finance is directed to amend its records in accordance with this Decision and Order.

    This constitutes the Decision and Order of the Court.

  17. 2007 NY Slip Op 50978(U)

    DEUTSCHE BANK NATIONAL TRUST COMPANY, As TRUSTEE OF ARGENT MORTGAGE SECURITIES, INC. Asset-backed Pass Through Certificates Series 2005-W4 Under the Pooling and Servicing Agreement Dated as of November 1, 2005, Without Recourse, Plaintiff,
    v.
    GUSTAVO CASTELLANOS, Argent Mortgage, LLC, and NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE, Defendants.

    22375/06.
    Supreme Court of the State of New York, Kings County.

    Decided May 11, 2007.
    Plaintiff, Knuckles & Komosinski, PC, Tarrytown NY.

    Defendants, No Defendant(s).

    ARTHUR M. SCHACK, J.

    Plaintiff’s application for a judgment of foreclosure and sale for the premises located at 78 Van Siclen Avenue, Brooklyn, New York (Block 3932, Lot 45, County of Kings) is denied without prejudice. Plaintiff Deutsche Bank National Trust Company (Deutsche Bank), a financial powerhouse, lacks standing to bring this matter before the Court. Deutsche Bank, after making this application, and prior to the instant application being forwarded to me by court clerks, assigned the instant mortgage to MTGLQ Investor, L.P., a subsidiary of the financial goliath, The Goldman Sachs Group, Inc., (Goldman Sachs). Neither Deutsche Bank nor Goldman Sachs informed the Court of this assignment.

    This mortgage, for a property in the East New York section of Brooklyn, illustrates how a subprime mortgage loan is assigned from one huge firm to another to maximize profits in the securitized mortgage asset market. The Deutsche Bank Group, parent of Deutsche Bank, according to a May 8, 2007 press release at its website, http://www.db.com, had income of 3.2 billion Euros (more than four billion dollars) in the first quarter of 2007, while Goldman Sachs, in its 2006 Annual Report, had 2006 net revenues of $37.62 billion. When these financial giants moved to foreclosure on the defendant’s subprime mortgage loan, it appears that they neglected to see who actually owned the mortgage loan.

    Many of today’s mortgage borrowers, in their attempt to obtain a piece of the “American dream” no longer deal with local banks, savings and loan associations or credit unions. Instead, they deal with large financial organizations, national and international in scope, motivated primarily by their interest in maximizing profit, and not necessarily by helping people.

    In 1946, Frank Capra directed the film classic, It’s a Wonderful Life, in which George Bailey (James Steward), the head of a local savings and loan in fictional Bedford Falls, New York, fights the evil banker, Mr. Potter (Lionel Barrymore), in attempting to help the people of Bedford Falls secure mortgages. George Bailey, after his father’s death in 1928, is elected as head of the savings and loan at a tumultuous Board meeting, and tells Mr. Potter, according to the screenplay, at http://www.imdb.com:

    Now, hold on, Mr. Potter. You’re right when you say my father was no businessman. I know that. Why he ever started this cheap, pennyante Building and Loan, I’ll never know. But neither you nor anyone else can say anything against his character . . . But he did help a few people get out of your slums, Mr. Potter, and what’s wrong with that?
    Why — here, you’re all businessmen here. Doesn’t it make them better citizens? Doesn’t it make them better customers? You — you said — what’d you say a minute ago? They had to wait and save their money before they even ought to think of a decent home. Wait? Wait for what? Until their children grow up and leave them? Until they’re so old and broken down that they . . . Do you know how long it takes a working man to save five thousand dollars? Just remember this, Mr. Potter, that this rabble you’re talking about . . . they do most of the working and paying and living and dying in this community. Well, is it too much to have them work and pay and live and die in a couple of decent rooms and a bath? Anyway, my father didn’t think so. People were human beings to him. But to you, a warped, frustrated old man, they’re cattle.In today’s newspapers and magazines we read numerous stories about subprime mortgages and “predatory” lending. Lenders should not lose sight that they are dealing with humanity, not Mr. Potter’s “rabble” and “cattle.” Multibillion dollar corporations must follow the same rules in foreclosure actions as the local banks, savings and loan associations or credit unions, or else they have become the Mr. Potters of the 21st century.
    Background

    Defendant Castellanos borrowed $412,000.00 from Argent Mortgage Company, LLC (Argent), on November 16, 2005. He executed a thirty-year adjustable rate note for this amount and a mortgage to secure the loan for the 78 Van Siclen Avenue premises. I checked the Automated City Register Information System (ACRIS) website of the Office of the City Register, New York City Department of Finance and verified that the Castellanos’ Note and Mortgage were recorded on December 7, 2005.

    The instant mortgage loan is an example of the subprime loan denominated in the mortgage industry as a “2-28” adjustable rate mortgage (ARM) loan. According to the November 16, 2005 Note, defendant Casetellanos was to initially pay principal and interest of $3,023.12 per month for the initial two years, at 8.00 %. Then on December 1, 2007, and every six months thereafter, the interest rate could change on the “change date,” based upon an “index” that is the average of interbank offered rates for the six-month U.S. dollar-denominated deposits in the London market (LIBOR) as published in the Wall Street Journal. The specific terms of the Castellanos note provided that the new interest rate would be the LIBOR rate, 45-days prior to the “change date,” plus 6.00 %, rounded to the nearest .125%. The interest-rate could increase 1.00% on each “change date” until the LIBOR index plus 6.00% would be reached. The LIBOR rate, according to today’s Wall Street Journal, is approximately 5.3%. Therefore, the LIBOR plus 6.00% rate is now approximately 11.30%. The Note capped the adjusted interest at 14.00% and set 8.00% as the floor, if rates go down. If interest rates stay constant, the defendant, if he hadn’t become delinquent in his payments, would be paying his mortgage loan at the rate of 11.25% on December 1, 2009, and thereafter.

    Gretchen Morgenson, in the April 6, 2007 New York Times, reported in “Fair Game; Home Loans: A Nightmare Grows Darker,” that “with home foreclosures and mortgage delinquencies soaring, it is becoming clear that the innovative loans that lenders championed in what the industry called the democratization of credit’ are turning the American dream into a nightmare for many borrowers.” Ms. Morgenson quotes Thomas A. Lawler, founder of Lawler Economic and Housing Consulting Daily, a newsletter, that

    subprime loans, similar to the one in this action, “are designed to make borrowers refinance and keep the loan production mill churning.” Further, Mr. Morgenson writes that “[w]hile subprime borrowers try to climb out of the holes they fell into, those who sold and packaged the loans are laughing all the way to the bank. Folks who ran these companies are going to walk away not just unscathed but extraordinarily well rewarded,’ Mr. Calhoun [Michael D. Calhoun, President of the Center for Responsible Lending] said.”

    U.S. Senator Christopher Dodd (D-Connecticut), Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, in his opening statement at the March 22, 2007 Committee hearing on “Mortgage Market Turmoil: Causes and Consequences,” noted that “[o]ur mortgage system appears to have been on steroids in recent years giving everyone a false sense of invincibility.” He observed that:

    The subprime market has been dominated in recent years by hybrid ARMs, loans with fixed rates for 2 years that adjust upwards every 6 months thereafter. These adjustments are so steep that many borrowers cannot afford to make the payments and are forced to refinance, at great cost, sell the house, or default on the loan. No loan should force a borrower into this kind of devil’s dilemma. These loans are made on the basis of the value of the property, not the ability of the borrower to repay. This is the fundamental definition of predatory lending.
    With respect to the instant mortgage loan, according to the July 21, 2006-affidavit of merit by Jeff Rivas, Deutsche Bank Vice-President for Default Timeline Management, “[t]he mortgage was subsequently assigned to the Plaintiff herein by instrument dated July 21, 2006 which is to be recorded with the City Register of the County of Kings [sic].” Mr. Rivas, possibly because he is in Orange, California, is not aware that the City Register is for the City of New York, not the County of Kings. Further, it is curious that he executed his affidavit on the same day that Argent assigned the Casetellanos mortgage loan to Deutsche Bank. My check of ACRIS verified that Argent assigned the mortgage to Deutsche Bank on July 21, 2006. It was recorded in the Office of the City Register on August 16, 2006.

    Plaintiff Deutsche Bank commenced the instant foreclosure action with the filing of the summons, complaint, and notice of pendency with the Kings County Clerk on July 27, 2006. Initial service of the summons and complaint was made on July 29, 2006. Defendant Castellanos defaulted in answering. On November 16, 2006, I signed an order of reference to ascertain and compute the amount due plaintiff. The Referee prepared a report, dated January 4, 2007, finding that in excess of $427,000.00 was due to the plaintiff as of July 21, 2006. Plaintiff’s counsel prepared an affirmation of regularity on January 10, 2007. Subsequently, counsel for Deutsche Bank filed the proposed judgment of foreclosure and sale in Part 72, the special part for ex-parte applications in Civil Term, Kings County Supreme Court. Part 72 forwarded the instant application for a judgment of foreclosure and sale, with all its exhibits, affidavits, affirmations and attachments to me on April 26, 2007.

    My check of ACRIS discovered that while the proposed judgment of foreclosure and sale was in Part 72, for review by court clerks, plaintiff Deutsche Bank assigned the instant mortgage, on January 19, 2007, to MTGLQ Investors, L.P. According to Exhibit 21.1 of the November 25, 2006 Goldman Sachs 10-K filing with the Securities and Exchange Commission, MTGLQ Investors, L.P. is a “significant subsidiary” of Goldman Sachs. The Deutsche Bank to MTGLQ Investors, L.P. assignment was recorded on February 7, 2007, with City Register File Number XXXXXXXXXXXXX. In the July 21, 2006 Argent to Deutsche Bank assignment, Deutsche Bank used an Orange, California address. However, the January 19, 2007 assignment has the same address for both the assignor Deutsche Bank and the assignee MTGLQ Investors, L.P., at 1661 Worthington Road, Suite 100, West Palm Beach, Florida 33409.

    The Court will not speculate about why two major financial behemoths, Deutsche Bank and Goldman Sachs share space in a West Palm Beach, Florida office suite. What is clear to this Court is that Deutsche Bank assigned the mortgage during the pendency of this application, but neglected to move to amend the caption to reflect the assignment or discontinue the foreclosure action. The Court, as will be explained, has no choice but to deny the application for a judgment of foreclosure and sale without prejudice. Plaintiff Deutsche Bank lacks standing to proceed with this action since January 19, 2007.

    Discussion

    The Court of Appeals, in Saratoga County Chamber of Commerce, Inc. v. Pataki, 100 NY2d 81, 812 (2003), cert denied 540 US 1017 (2003), declared that “[s]tanding to sue is critical to the proper functioning of the judicial system. It is a threshold issue. If standing is denied, the pathway to the courthouse is blocked. The plaintiff who has standing, however, may cross the threshold and seek judicial redress.” Professor David Siegel, in NY Prac, § 136, at 232 [4th ed] instructs that:

    [i]t is the law’s policy to allow only an aggrieved person to bring a lawsuit . . . A want of “standing to sue,” in other words, is just another way of saying that this particular plaintiff is not involved in a genuine controversy, and a simple syllogism takes us from there to a “jurisdictional” dismissal: (1) the courts have jurisdiction only over controversies; (2) a plaintiff found to lack “standing” is not involved in a controversy; and (3) the courts therefore have no jurisdiction of the case when such a plaintiff purports to bring it.
    In Caprer v. Nussbaum, 36 AD3d 176, 181 (2d Dept 2006), the Court held that “[s]tanding to sue requires an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant’s request.” If a plaintiff lacks standing to sue, the plaintiff may not proceed in the action. Stark v. Goldberg, 297 AD2d 203 (1st Dept 2002).

    It is clear that plaintiff Deutsche Bank lacks standing to sue since January 19, 2007, when it assigned its ownership of the Castellanos’ mortgage loan to the Goldman Sachs subsidiary, MTGLQ Investors, L.P. The Court, in Campaign v. Barba, 23 AD3d 327, instructed that “[t]o establish a prima facie case in an action to foreclose a mortgage, the plaintiff must establish the existence of the mortgage and the mortgage note, ownership of the mortgage, and the defendant’s default in payment [Emphasis added].” See Household Finance Realty Corp. Of New York v. Wynn, 19 AD3d 545 (2d Dept 2005); Sears Mortgage Corp. v. Yahhobi, 19 AD3d 402 (2d Dept 2005); Ocwen Federal Bank FSB v. Miller, 18 AD3d 527 (2d Dept 2005); U.S. Bank Trust Nat. Ass’n Trustee v. Butti, 16 AD3d 408 (2d Dept 2005); First Union Mortgage Corp. v. Fern, 298 AD2d 490 (2d Dept 2002); Village Bank v. Wild Oaks, Holding, Inc., 196 AD2d 812 (2d Dept 1993).

    However, in light of the fact that Deutsche Bank has established the existence of the mortgage and the note, and defendant’s default in payment, the Court is denying the judgment of foreclosure and sale without prejudice. If Deutsche Bank moves to substitute assignee MTGLQ Investors L.P. as plaintiff, pursuant to CPLR § 1021, and no other material facts change, the Court will grant the substitution of plaintiff to MTGLQ Investors L.P., which will allow the proper mortgagee, the one with standing, to receive a judgment of foreclosure and sale. East Coast Properties, v. Galang, 308 AD2d 431 (2d Dept 2003); Lincoln Savings Bank, FSB v. Wynn, 7 AD3d 760 (2d Dept 2004); CPLR § 1018; GOL § 13-101.

    Conclusion

    Accordingly, it is

    ORDERED that the application of plaintiff Deutsche Bank National Trust Company, as Trustee of Argent Mortgage Securities, Inc. Asset-backed Pass Through Certificates Series 2005-W4 under the Pooling and Servicing Agreement, dated as of November 1, 2005, Without Recourse, for a judgment of foreclosure and sale for the premises located at 78 Van Siclen Avenue, Brooklyn, New York (Block 3932, Lot 45, County of Kings) is denied without prejudice.

    This constitutes the Decision and Order of the Court.

  18. 138 U.S. 252 (1891)
    WATERMAN
    v.
    MACKENZIE.

    No. 82.
    Supreme Court of United States.

    Argued November 19, 1890.
    Decided February 2, 1891.
    APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK.
    254Mr. Walter S. Logan for appellant.

    No appearance for appellees.

    255 MR. JUSTICE GRAY, after stating the case as above, delivered the opinion of the court.

    Every patent issued under the laws of the United States for an invention or discovery contains “a grant to the patentee, his heirs and assigns, for the term of seventeen years, of the exclusive right to make, use and vend the invention or discovery throughout the United States and the Territories thereof.” Rev. Stat. § 4884. The monopoly thus granted is one entire thing, and cannot be divided into parts, except as authorized by those laws. The patentee or his assigns may, by instrument in writing, assign, grant and convey, either, 1st, the whole patent, comprising the exclusive right to make, use and vend the invention throughout the United States; or, 2d, an undivided part or share of that exclusive right; or, 3d, the exclusive right under the patent within and throughout a specified part of the United States. Rev. Stat. § 4898. A transfer of either of these three kinds of interests is an assignment, properly speaking, and vests in the assignee a title in so much of the patent itself, with a right to sue infringers; in the second case, jointly with the assignor; in the first and third cases, in the name of the assignee alone. Any assignment or transfer, short of one of these, is a mere license, giving the licensee no title in the patent, and no right to sue at law in his own name for an infringement. Rev. Stat. § 4919; Gayler v. Wilder, 10 How. 477, 494, 495; Moore v. Marsh, 7 Wall. 515. In equity, as at law, when the transfer amounts to a license only, the title remains in the owner of the patent; and suit must be brought in his name, and never in the name of the licensee alone, unless that is necessary to prevent an absolute failure of justice, as where the patentee is the infringer, and cannot sue himself. Any rights of the licensee must be enforced through or in the name of the owner of the patent, and perhaps, if necessary to protect the rights of all parties, joining the licensee with him as a plaintiff. Rev. Stat. § 4921. Littlefield v. Perry, 21 Wall. 205, 223; Paper Bag Cases, 105 U.S. 766, 771; Birdsell v. Shaliol, 112 U.S. 485-487. And see Renard v. Levinstein, 2 Hem. & Mil. 628.

    256 Whether a transfer of a particular right or interest under a patent is an assignment or a license does not depend upon the name by which it calls itself, but upon the legal effect of its provisions. For instance, a grant of an exclusive right to make, use and vend two patented machines within a certain district, is an assignment, and gives the grantee the right to sue in his own name for an infringement within the district, because the right, although limited to making, using and vending two machines, excludes all other persons, even the patentee, from making, using or vending like machines within the district. Wilson v. Rousseau, 4 How. 646, 686. On the other hand, the grant of an exclusive right under the patent within a certain district, which does not include the right to make, and the right to use, and the right to sell, is not a grant of a title in the whole patent right within the district, and is therefore only a license. Such, for instance, is a grant of “the full and exclusive right to make and vend” within a certain district, reserving to the grantor the right to make within the district, to be sold outside of it. Gayler v. Wilder, above cited. So is a grant of “the exclusive right to make and use,” but not to sell, patented machines within a certain district. Mitchell v. Hawley, 16 Wall. 544. So is an instrument granting “the sole right and privilege of manufacturing and selling” patented articles, and not expressly authorizing their use, because, though this might carry by implication the right to use articles made under the patent by the licensee, it certainly would not authorize him to use such articles made by others. Hayward v. Andrews, 106 U.S. 672. See also Oliver v. Rumford Chemical Works, 109 U.S. 75.

    An assignment of the entire patent, or of an undivided part thereof, or of the exclusive right under the patent for a limited territory, may be either absolute, or by way of mortgage and liable to be defeated by non-performance of a condition subsequent, as clearly appears in the provision of the statute, that “an assignment, grant or conveyance shall be void as against any subsequent purchaser or mortgagee for a valuable consideration without notice, unless it is recorded in the Patent Office within three months from the date thereof.” Rev. Stat. § 4898.

    257 Before proceeding to consider the nature and effect of the various instruments given in evidence at the hearing in the Circuit Court, it is fit to observe that (as was assumed in the argument for the plaintiff) by the law of the State of New York, where all the instruments were made and all the parties to them resided, husband and wife are authorized to make conveyances and contracts of and concerning personal property to and with each other, in the same manner and to the same effect as if they were strangers. Armitage v. Mace, 96 N. Y 538; Adams v. Adams, 91 N.Y. 381.

    By the deed of assignment of February 13, 1884, the plaintiff assigned to Mrs. Waterman the entire patent right. That assignment vested in her the whole title in the patent, and the exclusive right to sue, either at law or in equity, for its subsequent infringement.

    The next instrument in order of date is the “license agreement” between them of November 20, 1884, by which she granted to him “the sole and exclusive right and license to manufacture and sell fountain penholders containing the said patented improvement throughout the United States.” This did not include the right to use such penholders, at least if manufactured by third persons, and was therefore a mere license, and not an assignment of any title, and did not give the licensee the right to sue alone, at law or in equity, for an infringement of the patent. Gayler v. Wilder, Paper Bag Cases and Hayward v. Andrews, above cited. The plaintiff not having amended his bill, pursuant to the leave granted by the Circuit Court, by joining the licensor as a plaintiff, this point requires no further notice.

    Nor is it doubted that the Circuit Court rightly held that, if the plaintiff was entitled to recover only for infringements occurring between February 12 and November 25, 1884, his remedy was at law. Root v. Railway Co., 105 U.S. 189.

    The remaining question in the case, distinctly presented by the plea, and adjudged by the Circuit Court, is of the effect of the deed of November 25, 1884, by which Mrs. Waterman assigned to the firm of Asa L. Shipman’s Sons all her right, title and interest in the invention and the patent, with an 258 express provision that the assignment should be null and void if she and her husband, or either of them, should pay at maturity a certain promissory note of the same date made by them and payable to the grantees. This instrument, being a conveyance made to secure the payment of a debt, upon condition that it should be avoided by the subsequent payment of that debt at a time fixed, was a mortgage, in apt terms and in legal effect. Conard v. Atlantic Ins. Co., 1 Pet. 386, 446, 447. On the same day, the mortgagees assigned by deed to Asa L. Shipman all their title under the mortgage, and the promissory note thereby secured. Both assignments were recorded in the Patent Office within three months after their date; and the title thereby acquired by Shipman was outstanding in him at the times of the subsequent assignment of the patent right by Mrs. Waterman to the plaintiff, and of the filing of this bill. This last assignment was therefore subject to the mortgage, though not in terms so expressed.

    By a mortgage of personal property, differing in this respect from a pledge, it is not merely the possession or a special property that passes; but, both at law and in equity, the whole title is transferred to the mortgagee, as security for the debt, subject only to be defeated by performance of the condition, or by redemption on bill in equity within a reasonable time; and the right of possession, when there is no express stipulation to the contrary, goes with the right of property. Story on Bailments, § 287; Story Eq. Jur. §§ 1030, 1031; Conard v. Atlantic Ins. Co., 1 Pet. 386, 441; Casey v. Cavaroc, 96 U.S. 467, 477; Boise v. Knox, 10 Met. 40, 43; Brackett v. Bullard, 12 Met. 308, 310.

    A mortgage of real estate has gradually, partly by the adoption of rules of equity in courts of common law, and partly by express provisions of statute, come to be more and more considered as a mere security for the debt, creating a lien or incumbrance only, and leaving the title in the mortgagor, subject to alienation, levy on execution, dower and other incidents of a legal estate; but the rules upon the subject vary in different States; and a mortgage is everywhere considered as passing the title in the land, so far as may be 259 necessary for the protection of the mortgagee, and to give him the full benefit of his security. Stelle v. Carroll, 12 Pet. 201; Van Ness v. Hyatt, 13 Pet. 294; Hutchins v. King, 1 Wall. 53, 58; Brobst v. Brock, 10 Wall. 519, 529, 530. After the mortgagee has taken possession, the mortgagor has no power to lease; and the mortgagee is entitled to have, and is bound to account for, the accruing rents and profits, damages against trespassers, timber cut on the premises, and growing crops. Keech v. Hall, 1 Doug. 21; Turner v. Cameron’s Coalbrook Co., 5 Exch. 932; Dawson v. Johnson, 1 Fost. & Finl. 656; Fairclough v. Marshall, 4 Ex. D. 37, 47, 49; Scruggs v. Memphis &c. Railroad, 108 U.S. 368, 375; Teal v. Walker, 111 U.S. 242; Hutchins v. King, above cited; Gore v. Jenness, 19 Maine, 53; Bagnall v. Villar, 12 Ch. D. 812. Even against a mortgagor in possession, the mortgagee may obtain an injunction or damages for such cutting of timber as tends to impair the value of the mortgage security, or as is not allowed by good husbandry or by express or implied license from the mortgagee. Robinson v. Litton, 3 Atk. 209, 210; Farrant v. Lovel, 3 Atk. 723; Hampton v. Hodges, 8 Ves. 105; Humphreys v. Harrison, 1 Jac. & Walk. 581; King v. Smith, 2 Hare, 239; Kountz v. Omaha Hotel Co., 107 U.S. 378, 395; Verner v. Betz, 1 Dickinson (46 N.J. Eq.) 256, 267, 268; Page v. Robinson, 10 Cush. 99; Searle v. Sawyer, 127 Mass. 491; Waterman v. Matteson, 4 R.I. 539.

    A mortgagee of a leasehold or other personal property has the like right to an injunction to stay waste by the mortgagor. Farrant v. Lovel, above cited; Brown v. Stewart, 1 Maryland Ch. 87; Parsons v. Hughes, 12 Maryland, 1. The right of action against a stranger for an injury to goods mortgaged, generally, though not always, depends upon the right of possession. When the right of possession is in the mortgagor, he is usually the proper party to sue. Sellick v. Smith, 11 J.B. Moore, 459, 475; Brierly v. Kendall, 17 Q.B. 937; Luse v. Jones, 10 Vroom (39 N.J. Law) 707; Copp v. Williams, 135 Mass. 401. But even a mortgagee out of possession may sometimes maintain an action for an injury to his interest. Gooding v. Shea, 103 Mass. 360; Manning v. Monaghan, 23 260 N.Y. 539, and 28 N.Y. 585; Woodside v. Adams, 11 Vroom (40 N.J. Law) 417, 421, 422. And when the right of possession, as well as the general right of property, is in the mortgagee, the suit must be brought by the mortgagee, and not by the mortgagor or any one claiming under a subsequent conveyance from him. Conard v. Atlantic Ins. Co., 1 Pet. 386; Wood v. Weimar, 104 U.S. 786; Clapp v. Campbell, 124 Mass. 50; Watson v. Macquire, 5 C.B. 836, 844. When it is provided by statute that a mortgage of personal property shall not be valid against third persons, unless the mortgage is recorded, a recording of the mortgage is a substitute for, and (unless in case of actual fraud) equivalent to, a delivery of possession, and makes the title and the possession of the mortgagee good against all the world. Aldrich v. Ætna Ins. Co., 8 Wall. 491, 497; Robinson v. Elliott, 22 Wall. 513, 521; Bullock v. Williams, 16 Pick. 33; Coles v. Clark, 3 Cush. 399, 401.

    A patent right is incorporeal property, not susceptible of actual delivery or possession; and the recording of a mortgage thereof in the Patent Office, in accordance with the act of Congress, is equivalent to a delivery of possession, and makes the title of the mortgagee complete towards all other persons, as well as against the mortgagor. The right conferred by letters patent for an invention is limited to a term of years; and a large part of its value consists in the profits derived from royalties and license fees. In analogy to the rules governing mortgages of lands and of chattels, and with even stronger reason, the assignee of a patent by a mortgage duly recorded, whose security is constantly wasting by the lapse of time, must be held (unless otherwise provided in the mortgage) entitled to grant licenses, to receive license fees and royalties, and to have an account of profits or an award of damages against infringers. There can be no doubt that he is “the party interested, either as patentee, assignee or grantee,” and as such entitled to maintain an action at law to recover damages for an infringement; and it cannot have been the intention of Congress that a suit in equity against an infringer to obtain an injunction and an account of profits, in which the court is authorized to award damages, when necessary to fully 261 compensate the plaintiff, and has the same power to treble the damages as in an action at law, should not be brought by the same person. Rev. Stat. §§ 4919, 4921; Root v. Railway Co., 105 U.S. 189, 212.

    The necessary conclusion appears to us to be that Shipman, being the present owner of the whole title in the patent under a mortgage duly executed and recorded, was the person, and the only person, entitled to maintain such a bill as this; and that the plea, therefore, was rightly adjudged good.

    In the light of our legislation and decisions, no weight can be given to the case of Van Gelder v. Sowerby Bridge Society, 44 Ch. D. 374, in which, upon pleadings and facts similar to those now before us, the mortgagor of a patent was treated as a mortgagor in possession, and was allowed to maintain a suit for infringement, under the provisions of the English Judicature Act of 1873 and Patent Act of 1883. Stats. 36 & 37 Vict. c. 66, § 25; 46 & 47 Vict. c. 57, §§ 23, 46, 87.

    Whether, in a suit brought by the mortgagee, the court, at the suggestion of the mortgagor, or of the mortgagee, or of the defendants, might, in its discretion, and for the purpose of preventing multiplicity of suits or miscarriage of justice, permit or order the mortgagor to be joined, either as a plaintiff or as a defendant, need not be considered, because no such question is presented by this record.

    Decree affirmed.

    MR. JUSTICE BROWN, not having been a member of the court when this case was argued, took no part in its decision.

  19. Mario,

    I think for the most part people here really desire the “common good”.
    They desire a fair and JUST outcome to their own dilemmas.
    I certainly do.

    I understand eman205’s view however. There are “shills” HERE.
    IT IS AGGRAVATING THAT IN A CAUSE SO DIRE THAT IS THE CASE. BUT IT IS. The problem is being sure who is and who isn’t.

    The kind of egregious actions that “anonymous” was reporting NEED to be exposed in the “Court” of public opinion. I AM HAPPY TO DO SO.

    But only if I have incontestable references that the “shills” cannot deride. They ignore you or obfuscate; I have learned from posting on other sites. We must tirelessly “TRY” them in public. They can only succeed with secrecy and public ignorance.

    “Anonymous”, if you have SPECIFIC undeniable evidence of these kinds of callous acts, I respectfully say, PLEASE POST.

  20. What else is new????????? It just seems that this new America, is setting a trend of no one being held accountable for their actions, and consequences do not exist, boundaries continuely crossed and the broke taxpayer is left with all costs.

  21. What else is new?????????

  22. Deontos,

    The fact is we have a huge fight on our hands and a lot of work to do, infighting proves to be a distraction, our time is better spent on the issues at hand> Do you think this is correct?

  23. EMAN,

    I wouldn’t say it doesn’t happen, but I would ask “anonymous” if he can show DOCUMENTED proof of this “heinousness”. Are they incredulously FOUL?

    read this:

    From Court News:
    Tuesday, November 24, 2009

    INDYMAC INTENT ON FORECLOSING ON 89-YEAR OLD WIDOW, DESPITE TWO COURT ORDERS TELLING THEM TO STOP
    In Oakland, California, Courthouse News Service reports:

    * Indymac Bank and its successor, One West Bank, keep trying to foreclose on an elderly widow’s house despite two court orders telling them to stop, the 89 year-old woman says in Alameda County Court, Oakland. She says stress from the repeated threats of foreclosure made her husband depressed and may have contributed to his death.

    Irene Jones says foreclosure proceedings on her Oakland home were halted twice, first by an order restraining Indymac from foreclosing in February 2008, then by a second order invalidating Indymac’s foreclosure proceedings in March 2009. Nonetheless, Jones says Indymac and One West notified her they would begin foreclosing again in October.

    CASE FILE: Jones v. One West Bank F.S.B., et al.
    Xhttp://www.courthousenews.com/2009/11/23  /ElderHouse.pdf

  24. eman205,

    I have not heard of anyone breaking in to kick the home owner out but I would put nothing past them. I have seen them do really bad things, so it could be reasonable to think that they are able to do whatever they so like.

  25. Anonymous…Are you an “idiot” or what? Get serious, what are you some agent for the “banks”? NO BODY is breaking into people’s home and changing locks. If they did it is called, “Breaking & Entering” if there is someone is still living in the house. Its a FELONY ..moron! And any person who would leave on a Realtors word if a double-fool! UD rules, only person that can legally remove a person from a piece of property is JUDGE! Banks are doing nothing if someone has an ATTORNEY! Your “scare tactic” is about 2 yrs old by the way!

  26. In San Diego they have frozen all Foreclosures… and they are keeping it quite.. IF you do not believe me go to http://www.ForeclosureRadar.com and log in… you can get a few days to look for free and look at the Notice of Trustee Sales.. they are all suspeneded. WHY… there is no reason to pay your bill… why pay your bill they will not FORECLOSURE…. Hell people are living in there homes for a few years and not paying their mortgage payments.. the word is on the street .. not in the media but in the street and more people are just NOT FRIGGEN PAYING and holding on to the money.. they are just banking it for a rainy day. As Giether says savings are going up .. that is because people are not paying their mortages on homes that are not worth the mortgage amount… THIS IS ONLY GETTING MORE UGLY….

    THE SHIT IS ABOUT TO HIT THE FAN get ready in the next few months… something is in the wind… The Goverment can see it coming.. they know there are thousands of deliquent mortgages and the BANKS are not taking them back to even sell them…They are just being quite about it hoping the situation is going to go away…

  27. Latest tactics of lenders are to break and enter into homes and literrally steal them.
    In most if not all states, lenders cannot take possession of a home until after they file and unlawful detainer and obtain a court order for possession.
    It has been widely reported that lenders are instead having asset managers instruct real estate agents to literally break into peoples homes, change the locks, and order them to leave.
    This has been admitted to in depositions.

Leave a Reply

%d bloggers like this: