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New York Judges Slam Baum Law Firm and JP Morgan Chase Citing Questionable Legal Work

29 Responses

1. 

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3. 

   anon, on February 10, 2011 at 6:56 pm said:

   DAMAGES? AWARD THE PROPERTY OWNER DAMAGES, NOT A FEW THOUSAND, BUT A FEW MILLION.

   CANCEL THE WHOLE DEBT. ALL OF IT!

   The lender doesn’t care about you. Send the selfish creep to jail and distribute the bonuses to the soup kitchen and make him in the kitchen chopping carrots.

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4. 

   jeff, on May 6, 2010 at 7:07 am said:

   STEVEN J. BAUM FORECLOSURE MILLN LOST ANOTHER ONE

   JP Morgan Chase Bank, N.A. v George
   2010 NY Slip Op 50786(U)
   Decided on May 4, 2010
   Supreme Court, Kings County
   Schack, J.
   Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
   This opinion is uncorrected and will not be published in the printed Official Reports.

   Decided on May 4, 2010

   Supreme Court, Kings County

   JP Morgan Chase Bank, N.A., AS TRUSTEE FOR NOMURA ASSET ACCEPTANCE CORPORATION MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2004-AR4, Plaintiff,

   against

   Gertrude George, IVY MAY JOHNSON, GMAC MORTGAGE CORPORATION, DANIEL S. PERLMAN, et. al., Defendants.

   10865/06

   Plaintiff- JP Morgan Chase Bank

   Steven J Baum, PC

   Amherst NY

   Defendant- Gertrude George

   Edward Roberts, Esq.

   Brooklyn NY

   Defendant- Ivy Mae Johnson

   Precious L. Williams, Esq.

   Brooklyn NY

   Arthur M. Schack, J.

   In this mortgage foreclosure action for the premises located at 47 Rockaway Parkway, Brooklyn, New York (Block 4600, Lot 55, County of Kings), defendant IVY MAY JOHNSON (JOHNSON) moves by order to show cause to vacate the January 16, 2008 judgment of [*2]foreclosure and sale for the subject premises, pursuant to CPLR Rule 5015 (a) (4), claiming that plaintiff JP MORGAN CHASE BANK, N.A., AS TRUSTEE

   FOR NOMURA ASSET ACCEPTANCE CORPORATION MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2004-AR4 (CHASE), lacked standing to commence the instant action and thus, the Court never had jurisdiction and the instant complaint should be dismissed.

   I signed defendant JOHNSON’s order to show cause on February 16, 2010, and set oral argument for April 30, 2010. Plaintiff CHASE failed to file and serve any opposition to defendant JOHNSON’s order to show cause. After hearing oral arguments on April 30, 2010, and reviewing defendant JOHNSON’s moving papers and recorded documents in the Automated City Register Information System (ACRIS) of the New York City Department of Finance for the subject block and lot, it is clear that plaintiff CHASE did not own the subject mortgage and note on April 7, 2006, the day the instant action commenced. Therefore, plaintiff CHASE did not have standing and the Court never had jurisdiction. Thus, the January 16, 2008 judgment of foreclosure and sale is vacated and the instant complaint is dismissed with prejudice.

   Background
   Defendant GERTRUDE GEORGE (GEORGE) purchased the subject premises from Derrick O’Connor for $545,000.00, by a deed dated September 17, 2004. The deed was recorded in the Office of the City Register of the City of New York, on April 11, 2005, at City Register File Number (CRFN) 2005000206826. At the September 17, 2004 closing, GEORGE executed two notes and mortgages. With respect to the subject note and mortgage in the instant action, GEORGE borrowed $381,500 from CAMBRIDGE HOME CAPITAL, LLC (CAMBRIDGE), and this mortgage was recorded on April 11, 2005, by MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. (MERS), as nominee for CAMBRIDGE.

   Subsequently, defendant GEORGE conveyed, by a deed dated March 23, 2005, the subject premises to defendant JOHNSON and herself, as joint tenants with the right of survivorship. This deed was recorded the next day, March 24, 2005, in the Office of the City Register of the City of New York, at CRFN 2005000172921.

   Then, plaintiff CHASE commenced the instant foreclosure action by filing the summons, complaint and notice of pendency with the Office of the Kings County Clerk on April 7, 2006. Plaintiff CHASE, in ¶ 1 of the instant complaint, alleges that it “is the holder of a mortgage bearing date the 17th day of September 2004 executed by GERTRUDE GEORGE to secure the sum of $381,500.00 and recorded at Instrument No. 2005000206826 in the Office of the Clerk of the County of KINGS, on the 11th day of April 2005; said mortgage is to be duly assigned by an Assignment to be recorded in the Office of the Clerk of KINGS County [sic] [Emphasis added].” Plaintiff’s counsel, who has commenced thousands of foreclosures in Kings County, should be aware that mortgages in Kings County are recorded in the City Register of the City of New York, not the Office of the Kings County Clerk.

   Leaving aside the location of Kings County mortgage recordings, plaintiff’s

   counsel obviously admitted in the complaint that plaintiff CHASE did not own the mortgage on the day the instant action commenced, April 7, 2006, because, as noted above, it states in ¶ 1 of the complaint that “said mortgage is to be duly assigned by an Assignment to be recorded [Emphasis added]” In fact, the assignment of the subject mortgage, from MERS, as nominee for CAMBRIDGE, to CHASE, was not executed until June 21, 2006, 75 days later. The June 21, [*3]2006 assignment states “[t]his assignment is effective as of March 21, 2006.” The notary public who took the assignor’s signature, in Fort Mill, South Carolina, states that Anita L. Antonelli, Assistant Secretary of MERS, appeared before the South Carolina notary public “[o]n the 21st day of June in the year 2006.” The cover sheet for the recording of the assignment, in error, states that the document date is “03-21-06.” This June 21, 2006 assignment was recorded in the Office of the City Register of the City of New York, at CRFN 2006000409470, on July 19, 2006.

   Meanwhile, in the instant foreclosure action, I issued an order of reference on September 5, 2006 and a judgment of foreclosure and sale, on January 16, 2008, with $440,065.67 due to plaintiff CHASE as of June 29, 2007.

   While defendant JOHNSON alleges in the instant order to show cause that she was never served with the complaint, her more important and first priority allegation is that plaintiff CHASE lacked standing to bring this action. If CHASE lacked standing, the Court did not have jurisdiction and the action is a nullity.

   Plaintiff CHASE never submitted opposition papers to refute defendant JOHNSON’s argument that it lacked standing and never submitted any evidence that it possessed the subject mortgage and note on April 7, 2006, the day the instant foreclosure action commenced. Plaintiff CHASE’s clear lack of standing means the Court never had jurisdiction. Therefore, the Court grants the instant order to show cause and dismisses the subject foreclosure action with prejudice.

   Plaintiff’s lack of standing
   Defendant JOHNSON’s order to show, pursuant to CPLR Rule 50515 (a) (4), to vacate the instant judgment of foreclosure and sale “for lack of jurisdiction to render the judgment,” because plaintiff CHASE lacks standing, is a motion that can be made at any time. This is unlike a motion to vacate an “excusable default,” pursuant to CPLR Rule 5015 (a) (1), which must be made within one year of a default, and requires a defendant to demonstrate both a reasonable excuse for the default and a meritorious defense. (See Caba v Rai, 63 AD3d 578 [1d Dept 2009]; Siegel, Practice Commentaries McKinney’s Cons Law of NY, Book 7B CPLR 5015:3). A claim for lack of jurisdiction is “a condition precedent to the maintenance of the claim.” (Siegel, Practice Commentaries McKinney’s Cons Law of NY, Book 7B CPLR 5015:9). Moreover, “[i]f the Court lacked jurisdiction to render the judgment or order, the motion to vacate is based is based on paragraph 4 of CPLR 5015 (a).” (Siegel, NY Prac § 430, at 730 [4d ed]).

   In the instant action, it is clear that plaintiff CHASE lacked “standing” and therefore the Court lacked jurisdiction. This mandates that the Court vacate the January 16, 2008 judgment of foreclosure and sale and dismissal of the instant 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 Siegel (NY Prac, § 136, at 232 [4d 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 [*4]

   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 CHASE lacked standing to foreclose on the instant mortgage and note when this action commenced on April 7, 2006, the day that CHASE filed the summons, complaint and notice of pendency with the Kings County Clerk, because it did not own the mortgage and note that day. The instant mortgage and note were assigned to CHASE, 75 days later, on June 21, 2006. 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]).

   Assignments of mortgages and notes are made by either written instrument or the assignor physically delivering the mortgage and note to the assignee. “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]). The written June 21, 2006 assignment by MERS, as nominee for CAMBRIDGE to CHASE is clearly 75 days after the commencement of the action. Not only did plaintiff CHASE fail to submit evidence that it had physical possession of the note and mortgage on April 7, 2006, plaintiff CHASE admitted, in ¶ 1of the instant complaint, that “said mortgage is to be duly assigned by an Assignment to be recorded.”

   The retroactive statement in the June 21, 2006 MERS, as nominee for CAMBRIDGE, to CHASE assignment, “[t]his assignment is effective as of March 21, 2006,” is unavailing. It demonstrates that plaintiff CHASE did not own the mortgage and note when the instant action commenced on April 7, 2006. “Thus, a retroactive assignment cannot be used to confer standing upon the assignee in a foreclosure action commenced prior to the execution of an assignment.” (Wells Fargo Bank, N.A. v Marchione, 69 AD3d 204, 210 [2d Dept 2009]). The Marchione Court relied upon LaSalle Bank Natl. Assoc. v Ahearn (59 AD3d 911 [3d Dept 2009], which instructed, at 912, “[n]otably, foreclosure of a mortgage may not be brought by one who has no title to it’ (Kluge v Fugazy, 145 AD2d 537 [2d Dept 1988]) and an assignee of such a mortgage does not have standing unless the assignment is complete at the time the action is commenced).” (See U.S. Bank, N.A. v Collymore, 68 AD3d 752 [2d Dept 2009]; Countrywide Home Loans, Inc. v Gress, 68 AD3d 709 [2d Dept 2009]; Citgroup Global Mkts. Realty Corp. v Randolph Bowling, [*5]25 Misc 3d 1244 [A] [Sup Ct, Kings County 2009]; Deutsche Bank Nat. Trust Company v Abbate, 25 Misc 3d 1216 [A] [Sup Ct, Richmond County 2009]; Indymac Bank FSB v Boyd, 22 Misc 3d 1119 [A] [Sup Ct, Kings County 2009]; Credit-Based Asset Management and Securitization, LLC v Akitoye,22 Misc 3d 1110 [A] [Sup Ct, Kings County Jan. 20, 2009]; Deutsche Bank Trust Co. Americas v Peabody, 20 Misc 3d 1108 [A] [Sup Ct, Saratoga County 2008]).

   The Appellate Division, First Department, citing Kluge v Fugazy, in 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.” Moreover, plaintiff CHASE “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, supra). Therefore, with plaintiff CHASE not having standing, the Court lacks jurisdiction in this foreclosure action. The instant judgment of foreclosure and sale is vacated and the instant action is dismissed with prejudice.

   Conclusion

   Accordingly, it is
   ORDERED, that the order to show cause of defendant IVY MAE JOHNSON, to vacate the January 16, 2008 judgment of foreclosure and sale for the premises located at 47 Rockaway Parkway, Brooklyn, New York (Block 4600, Lot 55, County of Kings), pursuant to CPLR Rule 5015 (a) (4), because plaintiff, JP MORGAN CHASE BANK, N.A., AS TRUSTEE FOR NOMURA ASSET ACCEPTANCE CORPORATION MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2004-AR4, lacked standing to commence the instant action and thus, the Court never had jurisdiction, is granted; and it is further

   ORDERED, the instant complaint of plaintiff JP MORGAN CHASE BANK, N.A., AS TRUSTEE FOR NOMURA ASSET ACCEPTANCE CORPORATION MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2004-AR4 for the foreclosure on the premises located at 47 Rockaway Parkway, Brooklyn, New York (Block 4600, Lot 55, County of Kings) is dismissed with prejudice.

   This constitutes the Decision and Order of the Court.

   ENTER

   ___________________________

   Hon. Arthur M. SchackJ. S. C..

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5. 

   jeff, on April 23, 2010 at 3:35 pm said:

   FORECLOSURE MILL STEVEN J. BAUM LOST ANOTHER ONE

   STATE OF NEW YORK
   SUPREME COURT
   DEUTSCHE BANK NATIONAL TRUST
   COMPANY, AS TRUSTEE FOR FFMLT
   TRUST 2006-FF6, MORTGAGE PASSTHROUGH
   CERTIFICATES, SERIES 2006-FF6,
   Plaintiff,
   -against-
   WE! QIANG XU, MORTGAGE ELECTRONIC
   REGISTRATION SYSTEMS, INC. as nominee
   for NATION POINT A DIVISION OF NATIONAL
   CITY BANK OF INDIANA,
   COUNTY OF ALBANY
   DECISION and ORDER
   INDEX NO. 6606-08
   RJI NO. 01-08-95005
   Defendants.
   Supreme Court Albany County All Purpose Term, March 30,2010
   Assigned to Justice Joseph C. Teresi
   APPEARANCES:
   Steven J. Baum, P.C.
   Brian M. Swann, Esq.
   Attorney for Plaintiff
   220 Northpointe Parkway, Suite G
   Amherst, NY 14228
   David M. Freedman, Esq.
   Attorney for Defendant Wei Qiang Xu
   100 State Street
   Albany, New York 12207
   TERESI, J.:
   On August 5, 2008, Plaintiff commenced this action to foreclose a mortgage it holds on a
   parcel of real property (hereinafter the “property”) owned by defendant Wei Qiang Xu
   (hereinafter “Defendant”). On this record it is undisputed that Defendant failed to timely answer
   the complaint. On December 5, 2008 the Hon. John Egan referred this matter to a referee “to
   I
   [* 1]
   ascertain and compute the amount due on the bond/mortgage”.
   It is also undisputed that on December 19, 2008, the Plaintiff and Defendant entered into
   a forbearance agreement (hereinafter “Forbearance Agreement”). The Forbearance Agreement
   required Defendant to make an initial six thousand dollar payment, and then set forth a schedule
   of monthly payments (hereinafter the “Plan”). It further provided that Plaintiff would “allow
   [Defendant’s] loan to remain delinquent during this plan and … forbear from … continuing a
   foreclosure action.” The Forbearance Agreement does not provide Plaintiff with a unilateral
   right of termination, rather it specifically provides for termination upon Defendant’s failure to
   “remit payments in accord with the plan.”
   Approximately one month after the Forbearance Agreement was signed, Defendant
   alleges that he engaged in a foreclosure settlement conference with Plaintiff. He alleges that the
   Hon. Patrick Monserrate conducted the conference, which was attended by Kevin Laurilliard,
   Esq. on behalf of Plaintiff. In its opposition papers, Plaintiff does not dispute such allegation.
   Thereafter, on June 19,2009, the Hon. John Egan executed a Judgment of Foreclosure
   and Sale (hereinafter “Judgment”). The Judgment confirmed the referee’s report, ordered the
   property sold and, in accord with the referee’s report, set forth a specific monetary award due
   Plaintiff under the mortgage. Conspicuously absent from either the Judgment or the referee’s
   report is any reference to the Forbearance Agreement.
   On March 3, 2010, the property sold at a public foreclosure sale. Defendant now moves
   to vacate the Judgment and set aside the foreclosure sale. Plaintiff opposes the motion. Because
   Defendant demonstrated his entitlement to an Order vacating the Judgment, his motion is granted
   in its entirety.
   2
   [* 2]
   CPLR §5015(a)(I)’s “excusable default” provision provides Defendant with the specific
   statutory basis for vacating the Judgment. Excusable default requires the Defendant to “establish
   both a reasonable excuse for the default and a meritorious defense to the underlying claim.”
   (Hohenforst v. DeMagistris, 44 AD3d 1114, 1116 [3d Dept. 2007][quoting Trim v. Trim, 21
   AD3d 1203 [3d Dept. 2005]; Washington Mut. Bank v. Fisette, 66 AD3d 1287 [3d Dept. 2009];
   333 Cherry LLC v. Northern Resorts, Inc., 66 AD3d 1176 [3d Dept. 2009]). On this record,
   Defendant made such showing.
   Here, Defendant demonstrated a “reasonable excuse” for his default. Analyzing
   Defendant’s excuse necessarily starts with the default he seeks to vacate. Defendant does not
   challenge his default in answering the Complaint, but rather seeks to vacate his default on
   Plaintiff’s motion for Judgment. As such, his excuse need not address his failure to timely
   answer the complaint; rather, he must reasonably excuse his failure to oppose Plaintiffs motion
   for Judgment. Here, Defendant alleges that he defaulted on Plaintiffs motion for Judgment,
   because he never received notice of it. Such allegation is not contested or disputed by Plaintiff,
   nor has Plaintiff offered any proof that Defendant received notice its motion for Judgment.
   While a Defendant who defaults in formally appearing, pursuant to CPLR §320(a),
   ordinarily waives notice of any further proceedings. Where a defendant informally appears,
   notice must be given. (USF&G v. Maggiore, 299 AD2d 341 [2d Dept. 2002]; Kurlander v.
   Willie, 45 AD3d 1006 [3d Dept. 2007]; NYCTL 1998-1 Trust v. Prol Properties Corp., 18
   A.D.3d 525, [2d Dept. 2005]; Siegel, New York Practice [4th ed, 2005] §112, p 203). Here,
   although Defendant did not formally appear in this action, he did demonstrate that he informally
   appeared. On this record it is uncontested that Defendant both entered into the Forbearance
   3
   [* 3]
   Agreement and engaged in a settlement conference with Plaintiff. Such acts establishing
   sufficient participation in the merits of this action to constitute Defendant’s informal appearance.
   (11SF&G, supra). As such, Defendant’s failure to contest Plaintiff’s motion for Judgment is
   reasonably excused because he never received notice of it.
   Likewise, Defendant also demonstrated a “meritorious defense”. Defendant alleges that
   he complied with the Forbearance Agreement’s initial payment requirement, and monthly
   payments thereafter. He then alleges that Plaintiff wrongfully rejected, without explanation, his
   March, April and May 2009 payments. As such, Defendant demonstrated his compliance with
   the Forbearance Agreement and a potentially meritorious defense of “tender”. iliational Sav.
   Bank of Albany v. Hartmann, 179 AD2d 76 [3d Dept. 1992]). “Tender” is viable because
   Plaintiff was required to “forbear from … continuing [the] foreclosure action” while Defendant
   continued to make the Plan’s payments. As such, Plaintiff was neither entitled to unilaterally
   cancel the Forbearance Agreement nor to collect the full amount of the accelerated mortgage,
   until Defendant breached the Forbearance Agreement. While Plaintiff’s opposition papers
   specifically acknowledged such provision, it failed to allege that Defendant defaulted under the
   Forbearance Agreement.
   Accordingly, because Defendant set forth both a “reasonable excuse” for his default on
   the Plaintiff’s motion for Judgment and a “meritorious defense” to it, his motion is granted. The
   Judgment is vacated and the sale of the property is cancelled, null and void. To the extent not
   specifically addressed above, the parties’ remaining contentions have been examined and found
   to be lacking in merit.
   This Decision and Order is being returned to the attorneys for the Defendant. A copy of
   4
   [* 4]
   this Decision and Order and all other original papers submitted on this motion are being
   delivered to the Albany County Clerk for filing. The signing of this Decision and Order shall
   not constitute entry or filing under CPLR §2220. Counsel is not relieved from the applicable
   provision ofthat section respecting filing, entry and notice of entry.
   So Ordered.
   Dated: Albany, New York
   April..2! ‘ 2010

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6. 

   Judy, on April 1, 2010 at 7:16 pm said:

   I just noted a meeting that this Steven J Baum attended. He is also doing business as ‘The National Firm”.

   Other interesting characters that are also doing business as ‘The National Firm” are Thomas Holthus of San Diego, CA &
   Kevin R. McCarthy of San Diego, CA who are the principals of ‘QUALITY LOAN SERVICE’ in San Diego.

   Quality is becoming KNOWN for its work with Litton. Litton has their “Marti Noriega’ sign as MERS employee to designate Quality as the “Substitute Trustee”.

   Looks like ‘The National Firm” may start showing up too. I have not seen it as yet, other than the meeting attendee list.

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7. 

   betty, on March 23, 2010 at 10:13 am said:

   Because they have have no proof. They offer up a loan modification, hence person trying to save home signs mortgage modification and thus it becomes the banks. however you will also lose your home if you do not qualifiy, hence you LOST YOUR HOME. Please get your self an Attorney before you sign anything.

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8. 

   Stamford CT Real Estate, on March 17, 2010 at 7:14 am said:

   All the thanks goes to British Government who initiated and supported the rescue at the time of ultimate difficulty

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9. 

   ANONYMOUS, on March 7, 2010 at 4:34 pm said:

   Only emphasis for referring to “In reKerman J. Minbatiwalla” was to cite the reference to to “In re Hayes” and invalid Power of Attorney.

   See – “in addition, the court found the Assignment ineffective to convey standing on Deutsche Bank because Citi lacked authority to assign the mortgage to Deutsche Bank under the PSA. Id.”

   Under PSAs – only Trustees have Power of Attorney – servicers have no Power of Attorney under most PSAs.
   Thus, CIti had no authority to assign the mortgage to Deutsche Bank (trustee) under the PSA.

   Further, Citi-Residential is defunct.

   POAs are highly questionable.

   Only emphasis for point.

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10. New York Judges Slam Baum Law Firm and JP Morgan Chase Citing Questionable Legal Work! « Dinsfla Mortgage Foreclosure Fraud Blog, on March 5, 2010 at 7:00 am said:

    […] LivingLies by Neil Garfield opinion (I urge everyone to bookmark this website) […]

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11. 

    ANONYMOUS, on March 4, 2010 at 9:33 am said:

    Some of you may be interested in decision in “In re Kerman J. Minbatiwalla”. Valid Power of Attorney is very important. See excerpt from case below: Bankruptcy courts appear to be getting tougher on proof of claims.

    “Similarly, in In re Hayes, the court found that an alleged trustee of an entity apparently related to an alleged assignee of a note and mortgage had no standing to lift the automatic stay. Hayes, 393 B.R. at 268. There, the original mortgagee on a mortgage and note for certain property (“Property”) was Argent Mortgage Company, LLC (“Argent”). Id. at 262. AMC Mortgage Services, Inc. [*13] (“AMC”), as alleged servicer for Argent, filed a proof of claim concerning a lien on the Property. Deutsche Bank National Trust Company (“Deutsche Bank”), as alleged Trustee of Argent Mortgage Securities, Inc., under a Pooling and Servicing Agreement (“PSA”), filed a motion to lift the automatic stay with respect to the Property. Id. at 261. The debtor objected to both AMC’s proof of claim and Deutsche Bank’s motion to lift the automatic stay, challenging Deutsche Bank’s standing, and noting the absence of evidence of an assignment to AMC from Argent. Id. at 263. At trial, Deutsche Bank, through a Citi Residential Lending, Inc. (“Citi”) bankruptcy specialist, who testified that Citi was the current servicer of the mortgage, introduced (1) a “Confirmatory Corporation Assignment of Deed of Trust Mortgage,” pursuant to which Argent, by Citi (its “attorney-in-fact”), purported to assign and transfer the mortgage to Deutsche Bank as Trustee of Argent Mortgage Securities, Inc., dated seven months after the filing of the lift stay motion (“Assignment”); (2) a “Limited Power of Attorney” given by Argent to Citi, including the power to assign any Mortgage and the related Mortgage Note; (3) [*14] the PSA between Argent Securities, Inc., Ameriquest Mortgage Co. (“Ameriquest”) and Deutsche Bank, as Trustee, in which Argent was identified as an “Originator.” Id. at 263-66. The Citi bankruptcy specialist also testified that Argent and Ameriquest were affiliated companies, that Ameriquest created AMC to service loans and that Citi purchased AMC’s loan servicing portfolio. Id. at 266. Despite this body of evidence, the court denied Deutsche Bank standing to lift the automatic stay because it failed to prove that the mortgage was assigned from Argent to Argent Mortgage Securities, Inc. Id. at 268. In addition, the court found the Assignment ineffective to convey standing on Deutsche Bank because Citi lacked authority to assign the mortgage to Deutsche Bank under the PSA. Id. Furthermore, it found that Deutsche Bank failed to submit any evidence that the mortgage was included in the PSA. Id. The court also found that “the Debtor’s reference to Deutsche Bank as a secured creditor in several of her proposed Chapter 13 plans cannot confer standing on it as a party in interest for purposes of its Motion for Relief from Stay.” Id. at 268 (citing In re Newcare Health Corp., 244 B.R. 167, 170 (1st Cir. B.A.P. 2000) [*15] (“a defect in standing cannot be waived”)). Lastly, the court denied Deutsche Bank standing to defend the Debtor’s objection to AMC’s proof of claim, and sustained the objection without prejudice to reconsideration under 11 U.S.C. § 502(j) upon the filing of an amended proof of claim by the proper party. Id. at 270.

    These principles apply with equal force here. Chase has the burden of establishing its standing. Claim # 2 does not attach evidence establishing Chase’s standing as loan servicer or as the holder of the note and mortgage. Whatever its reasons, Chase ignored the written requests from Debtor’s counsel for evidence of its standing, and did not respond to the Debtor’s Objection to Claim # 2. Therefore, Chase has failed to present evidence necessary to demonstrate that it is either the servicer, note and mortgage holder, or assignee such that it has standing to bring Claim # 2.”

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12. 

    ANONYMOUS, on March 4, 2010 at 6:24 am said:

    Angry:

    Even if you can get to court – there will likely be discovery problems. The banks law firms are strong and powerful and they will fight hard to quiet you. Believe Mr. Garfield is right that it is very difficult to do it alone – everyone needs help. Even then the court battle will be lopsided due to the banks power.

    I was hoping that a large class action might expose the current practices. If this had occurred, the Department of Justice might be forced to act. But the class actions have been few and far between and, in particular, a large one just settled – with almost all the money going to the attorneys and no resolution for the homeowner’s mortgages.

    I believe that something must be done in Washington by the people themselves. People are “angry” – like you, but we have no real voice in Washington. People need to join together and speak out, but people are weakened from their own individual struggles.

    Games and rules will change because the government cannot afford another meltdown. But how quickly and efficiently will the rules changes? Encouraged that Timothy Geithner is speaking out for the Consumer Protection Agency with full enforcement powers. Currently, we have no place to go. Now is the time to for the people to speak up – to their representatives, and to possibly gain access to speak in Washington. Believe this is critical in addition to individual battles, but where do we start?

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13. 

    angry & and not taking it, on March 3, 2010 at 8:27 pm said:

    ANONYMOUS

    Even when and or if the banks are confronted thru the courts,the game and rules will change to allow the banks to recover unscathed . I truly fear that our gov is [as of the last 100 years] too corrupt & entangled with the blood sucking banks for any hope of nonviolent recovery [at least for the middle-class]. History has long shown the greed & onerous behavior or these slim knows no limits . Those who are not the banks are the targets & have been hit like a bullseye… I’m pissed & will remain so until these leeches have been dislodged, by blood or power i care not which yields the results.

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14. 

    PJ, on March 3, 2010 at 7:22 pm said:

    This makes your brain freeze, Swaps, CDO,etc. Has your obligation been paid has it not? One question here, is it plausible to request such information in a QWR, and if so how should the request for information be formatted.

    As for the lawyer in NY, there are plenty more out there, The Shapiro Attorney Network comes to mind. Shapiro & Dicaro just one facet of this nationwide network are the legal team smacked down in the White Plain’s NY “can’t produce the note” case last October 09′.

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15. 

    ANONYMOUS, on March 3, 2010 at 6:32 pm said:

    dny

    Yes. Exactly. .

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16. 

    dny, on March 3, 2010 at 2:26 pm said:

    “The banks still funds the loan (often through a table funder) – how they (the bank) finance their loans is up to the bank.”

    – But if the “true lender” was not disclosed at the closing table, would that not be a TILA violation? As I understand it, “table funding” is only legal when the parties are disclosed. And, if the “true lender” (financing the loan “through” the prentender lender) becomes “the Seller” in a securitization scheme (skipping the “Originator” in the chain of title), then that might be evidence of such table funding?

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17. 

    ANONYMOUS, on March 3, 2010 at 1:06 pm said:

    DNY

    You are right – what is actually delivered at the swap execution? since many of the loan notes are destroyed. But, my point is that after a loan is in default, nothing is left of it anyway – at least from an accounting perspective. The loan is charged-off and the security is extinguished. But charged-off and extinguishment does not mean the debt is still not owed (according to the banks) to someone. The Comptroller of the Currency will verfity that in charge-off the account is not sold (because the account is extinguished), only the right to collect the debt is sold. Account and debt are two different things. Thus, often attorneys for the debt buyer will claim “the account was not sold”. Have to ask them was the debt sold – i.e. the right to collect.

    Mr. Garfield posts an excellent explanation of CDSs today. I disagree with Mr. Garfield on one point. Mr. Garfield states “Thus, it was the investor who was the ONLY creditor in the transaction tat funded a homeowner’s loan (at least intitially before bailouts and payoffs of insurance proceeds and proceeds of CDS contracts).

    I do not agree because investors in securities are simply investors in securities – derived from the loan. They are fixed income investments that give the investors a pro-rata pass-through of the banks receivables. The banks still funds the loan (often through a table funder) – how they (the bank) finance their loans is up to the bank. It does not mean that the investors directly fund individual loans. The relationship is indirect and not direct. Investors in securities do not hold individual mortgage liens. They do not qualify borrowers, and are not the creditor according to othe TILA. Further, the security is extinguished when the loan is in default. The investor is paid (CDS) but the security investor has no right to collect the debt because the security is paid and gone. It is through the residual/equity tranche (most often held by the servicer and which is not securitized) that transfers collection rights to third parties.

    I know Mr. Garfield has a point to his reasoning, and I am not one to question. I just do not think investors who hold a pro-rata share in a pool of pass-through receivables can be the “creditor”. And I think the Federal Rerserve, in it’s Interim Opinion on the TILA Amendment supports my reasoning.

    Anyway, it is important for all join to together to fight whatever way we can – and it is becoming increasing clear that pretend lenders will eventually be exposed in court. But how many will suffer before we get there?.

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18. 

    angry & and not taking it, on March 3, 2010 at 10:57 am said:

    correction – “” in carpenter – the deed of trust is a nullity without the note.”
    period. the punctuation was need to define the case law understanding.
    sorry… confusion abounds!

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19. 

    angry & and not taking it, on March 3, 2010 at 10:51 am said:

    dny
    fwiw my understanding is-the note… in ca for example is never recorded only the deed of trust is recorded, [naming mers as beneficiary and or assigns ] so the 2 have been split [note & deed of trust ] -“collection rights” is under said deed of trust no mention of note. This split poses a problem of any transfer that most case law indicates the pair [note & deed or mortgage] were never intended to operate separately ” in carpenter – the deed of trust is a nullity without the note,but collection rights appear to exist separately , thus the position as mortgage servicer is a non-holder with holder rights is confusing at best [ imo this is intentionally confusion] , selling of “debt collector rights” creates another layer of fee based bleeding of the general public. fukem …I’ve had enough !!

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20. 

    ian, on March 3, 2010 at 10:34 am said:

    dny- around christmas 09 there was an article on securitization in the Denver Post with regard to the “credit crisis”. In that piece there was an observation that in the Colorado courts system, there was a backlog of appeals from entities who “who sought to be recharacterized from debt collectors to creditors”. But the reason I think that they are buying debt at 2-6 cents on the dollar is precisely the reason that they are debt collectors rather than (secured) creditors. And the secured creditors have written off the loans, as a result of which the debt and its underlying collateral., the mortgage, have been extinguished. Yes No Maybe? They can’t have it both ways, as they separated the note from the mortgage at inception? Anyone?

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21. 

    dny, on March 3, 2010 at 10:07 am said:

    Anonymous, you state, “physically delivery of loans is executed…” but this seems dubious at best since so many original paper note and mortgages appears to have been deliberately destroyed when “converted to electronic data”, etc.

    Can somebody take a crack at defining “collection rights?” Are they rights to “collect” for yet another undisclosed “creditor?” Or do “collection rights” purportedly allow such a holder to become a “creditor?” If so, is such an entity NOW a party to the relevant agreements, namely, the mortgage and the note?

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22. Timothymccandless’s Weblog, on March 3, 2010 at 7:42 am said:

    […] New York Judges Slam Baum Law Firm and JP Morgan Chase Citing Questionable Legal Work […]

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23. 

    ANONYMOUS, on March 3, 2010 at 5:53 am said:

    dny

    1) Some default swaps are used as hedge for trading and are just traded based on the “spread” in which price for swaps is based on the current value of the swap – which is calculated on betting for or against the loan performance that the swaps are derived from. This does not involve removal of securities from from the trust.

    2) When a swap is used to remove default loans from the trust (not as a trading spread hedge), the loan (or portfolio of loans) are removed “swapped) to the swap provider. Since a default loan is no longer a security – only collection rights are swapped out of the trust. The security ceases to exist and the loan that supports the security (and the swap) is charged-off and can no longer be a security. Bloomberg is technically, I believe, in error when it says “underlying securities or cash equivalent.” At settlement of swap (for default loans), physically delivery of loans is executed, and although the securities are removed from the trust, these securities are no longer performing – and, therefore, no longer a security. Only collection rights on the loan remain.

    3) Swaps are contracts – they are not securities. But you may still think of them as an “investment.” There could be multiple “investors” that provide credit enhancement (swap assurance) to a trust for non-performing loans. This very issue is part of the Federal Reserve’s Opinion on the May 2009 TILA Amendment – it’s Request for Comments. That is, certain institutions do not want to divulge multiple investors – and only feel it is necessary to disclose one investor as the current creditor. The Federal Reserve will address this in it’s final opinion. I agree that all investors should be divulged as the party that holds only a fractional interest (maybe even no financial interest), could be selected as the party disclosed to the borrower. This would defeat the purpose of the TILA amendment – which was designed to provide the borrower with the identify of the creditor to whom the debt is owed. At the very least, if only one of multiple investors is to be disclosed, the investor with the largest position (interest) in the debt should be disclosed. The Federal Reserve does indicate that the creditor who accounts for the largest position on it’s balance sheet is the creditor. So, I hope the Fed clarifies that the largest position holder of the debt should be disclosed when there are multiple investors.

    Disclaimer: I am not an attorney and this is not legal advice. This is for educational and informational purposes only.

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24. 

    Barbara Ann Jackson, on March 3, 2010 at 1:05 am said:

    Scores of debt buyers and collection lawyers are DELIBERATELY exploiting borrowers’ predicament to GAIN OWNERSHIP THEMSELVES of properties (sometimes in lieu of payments –in conflict of interest, welcome litigation so they can add more billable fees).

    Unlawful foreclosures enables things like simulated auctions which conveys deeds out of borrowers’ names into the names of feigned foreclosure plaintiffs, and facilitates property “flipping.” Some flips are to Freddie Mac even though foreclosures are completely NULL! Meanwhile, lenders like WELLS FARGO benefit from real estate schemes by filing false IRS (“acquisition”) form 1099-A’s, despite some properties were actually never lawfully “acquired,” due to the fact that fraudulently flipped property occurs by use of either DEFUNCT mortgage lenders or use of lenders’ names which have sold those notes, but no assignments were recorded! See link below for more facts and proof about these schemes –including foreclosure being carried out in civil court via defunct Lehman Brother mortgage as the lender, while at the same time Wells Fargo maintains lawsuit in federal court to demand payment from Allstate Insurance of proceeds for destroyed by Hurricane Katrina. (There are likely hundreds, thousands of such incidences!)

    Illegal Foreclosures & Evictions, Appalling Lender / Lawyer Abuses…
    http://newsblaze.com/story/20091011141440lawg.nb/topstory.html

    Lack of Legal Help: One More Way the Deck Is Stacked Against Homeowners
    http://www.huffingtonpost.com/arianna-huffington/lack-of-legal-help-one-mo_b_310353.html

    OPEN LETTER TO PRESIDENT OBAMA on Foreclosure Crisis
    http://www.pr-inside.com/open-letter-to-president-obama-on-foreclosure-crisis-r1505916.htm

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25. 

    dny, on March 2, 2010 at 9:51 pm said:

    Anonymous: If, as Bloomberg reports, “Credit swaps pay the buyer face value if a borrower defaults in exchange for the underlying securities or the cash equivalent.” ( http://www.bloomberg.com/apps/news?pid=20601087&sid=aiuMIxOKm0C4&pos=3 ) – Then what happens when multiple parties purchase credit default swaps on the same third party’s “default”, which I have read in many different places has occurred? Like several neighbors purchasing fire insurance on the same neighbors home. While it seems more and more like foreclosures are by servicers for swap holders, how can the collection rights to “the underlying securities” (i.e. the notes) possibly be assigned to more than one party? If assigning the underlying security, or collection rights to it to the swap issuer was required or standard practice, then wouldn’t multiple swaps relating to the same default event sold to various parties be outright fraud?

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26. 

    ANONYMOUS, on March 2, 2010 at 5:11 pm said:

    Don-CA

    Because the modifications are being falsely done under the servicer name. Even states that have court-ordered mediation before foreclosure, are allowing modifications under the servicer name without identification of the actual creditor. These modifications are simply bogus and are invalid contracts. Homeowners continue to be victimized and will often do anything in order to safe their home – even if it not legal.

    Loan modifications are simply a modification of the original contract – there must be a lender- and it is NOT the servicer.. .

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27. 

    Sam, on March 2, 2010 at 3:08 pm said:

    What exactly did the New York Judge do to the Baum Law Firm?

    It says the judge “Slammed” them, but there’s no report of what the Judge did.

    It sounds like they didn”t do anything!

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28. 

    Deb wynn, on March 2, 2010 at 1:43 pm said:

    Exactly Don. Game up. Where are they getting thir marching orders from and who trusts them anymore.

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29. 

    Don-CA, on March 2, 2010 at 12:48 pm said:

    Can anyone explain this for me:

    “For clients with aggressive lawyers, pushing back against banks — and forcing them to realize that they can’t prove they own the mortgage and therefore will not be able to foreclose — often result in the banks offering a mortgage modification.”

    How and why are the banks offering a modification when they can’t prove they own it? WTF?

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