The true answer is that securitization is a process that is still on going and not an event.The Real Party in Interest (and the real amount of principal due, if any) is in a state of flux hidden by obscure, hidden or “confidential documentation.” Don’t make it your problem to unravel it. Use your strength to force THEM to prove their claim whether it is in a judicial or non-judicial proceeding.
Editor’s Comment: In case you haven’t noticed, this case, along with some others I’ve heard about but not received, closes the loop. The Pretender Lenders have now tried to use all the major parties and some of the minor parties in foreclosures and when tested have failed to prove standing. standing is a jurisdictional matter and it basically boils down to “You don’t belong here, you have no rights to enforce, you have no interest in this litigation, so get out of here and don’t come back.”
They tried MERS, Servicers, Foreclosure Specialty processors, Trustees, originating “lenders” and they come up empty. why because they are all intermediaries and as Judge Holloway put it, the note is not payable to them, the mortgage does not secure them, the obligation is not due to them and therefore they can’t proceed. In non-judicial states they get around this requirement unless the homeowner brings suit.
So who is the real party in interest? See the Fordham Law Review article posted on this blog more than two years ago “Will the Real Party in Interest Please Stand Up.”
The answer isn’t easy, but the strategy is very simple — don’t accept responsibility for the narrative or you will be taking on the burden of proof in THEIR case. They have the information and you don’t. The true answer is that securitization is a process that is still on going and not an event. The Real Party in Interest (and the real amount of principal due, if any) is in a state of flux hidden by obscure, hidden or “confidential documentation. Don’t make it your problem to unravel it. Use your strength to force THEM to prove their claim whether it is in a judicial or non-judicial proceeding.
The real reason for them NOT simply bringing in the investors who at least WERE parties in interest is multifold:
- The meeting of the investor with the borrower will result in comparing notes and the fact that not all the money advanced by investors was actually invested in mortgages will be “problematic” for the investment bankers who put this scheme together.
- The meeting of the investor and borrower could result in an alliance in litigation in which the shell game would be impossible.
- The meeting of the investor and the borrower could result in a settlement that cuts the servicers and other intermediaries out of the gravy train of servicing fees, foreclosures with rigged bids, etc.
- The conflict of interest between the intermediaries and the investors might become evident, and lead to further litigation both from the investors and the SEC, state attorneys general and Department of Justice.
- The investment vehicle (the “trust” or Special Purpose Vehicle) might have been dissolved with the investors paid off and/or with the “assets” resecuritized into a new BBB rated vehicle. This could lead to the nuclear question: what if any, is the balance due in principal on this OBLIGATION. Warning: If you let the narrative shift to the NOTE (which is merely evidence of the obligation) you risk being entrapped by the simple question “Did you make your payments under this note?” This immediately puts you on the defensive BEFORE they have established THEIR case. Since THEY are the party seeking affirmative relief, THEY should establish the foundation first.
- And the last thing that comes to my mind is the last thing anyone wants to hear — was this obligation satisfied in whole or in part by third party payments through credit enhancements or federal bailout?
Hon. Arthur M. Schack does it again!
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.
_______________________________________________
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..
Filed under: CASES, CORRUPTION, Eviction, expert witness, foreclosure, foreclosure mill, GTC | Honor, HERS, investment banking, Investor, MODIFICATION, Mortgage, Motion Practice and Discovery, securities fraud, Servicer, STATUTES, trustee | Tagged: Arthur M. SchackJ. S. C, Fordham Law Review, George, GMAC MORTGAGE CORPORATION, JPM, lender, loan originator, MERS, NOMURA ASSET ACCEPTANCE CORPORATION MORTGAGE PASS-THROUGH CERTIFICATES, non-judicial, originator, Precious L. Williams, REAL PARTY IN INTEREST, SERIES 2004-AR4, servicer, shack, standing, Steven J Baum, trustee, vacate, Vacate foreclosure judgment |
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ANONYMOUS,
in bk context when u file ur petition all your “legal” claims transfer over to the bk trustee and brings the adversary proceeding in his name because he is considered the “real party in interest”. If you are trying to bring one the trustee is not, iit is possible but i’m not sure about details here’s some case law> However, the debtor may retain standing to prosecute TILA claims if the trustee abandons the claims. Abandonment may “ratify” debtor’s standing if debtor made an “understandable mistake” in initiating or continuing a TILA action, as opposed to a strategic manipulation. Cullen v. Bank One Corp., 145 Fed. Appx. 192, 193 (9th Cir. 2005) (unpublished opinion), citing Dunmore v. United States (In re Dunmore), 358 F.3d 1107, 1112-1113 (9th Cir. 2004).
Roxanna,
Do not sign or agree to any offer they pitch, when the time comes for sale which it will(I’m sorry to say but it’s the truth, it happened to me my house worth over $500k sold at auction for $0) so you have to be strong and prepared, don’t give up any of your rights no matter how scared they try to make you feel. Attend the trustee’s sale, or better yet have someone like a friend or family member you trust that looks business savy(that could play off being a vulture) attend and maybe audio/and/or/video record for bid rigging. meanwhile start gathering all things you desire to keep to be ready to move or put in storage, then you should start working on your own(don’t hire an attorney they’ll screw you) complaint for a rescission or any such other relief desired, some case law here on bid rigging> http://scholar.google.com/scholar_case?case=1592099286796178345 if they do bid rig contact the us att anti-trust div at or around the time you file your complaint for rescission.
Best of Luck All
DT
[…] Neil Garfield says…The Pretender Lenders have now tried to use all the major parties and some of the minor […]
Ian,
You need to now contact the PA department of banking, and file a claim with them. They are now enforcing the laws the fed made against the banks for mediation of bad loans. Make a full markup of everything you see wrong with your loan, check all dates and address’s of lender(s) because, if your loan is like mine, the lender has 8 different address’s, yes 8! Not to mention the fraudulent notary, and the fraudulent income verification form.
I never got a closing package from my broker either, but after working with Foreclosure Defense Group, and the QWR’s they sent, i got most of the final loan paperwork from the bank, and with my complaints to the PA Attorney General, i got the paperwork thru them too. So now several state agencies have the copies, so they can’t say that those are wrong and substitute new papers in court. Otherwise they frauded the other agencies.
The state department of banking, will do what they can, but if they banks still refuse, they will take to the federal level, and then at that point if they still don’t budge, then at least when you go to court, you can show the judge, “look i found all this wrong, and tried all these times with all these other people who have authority and the banks didn’t care”. That will/should give you more credence with the judge, instead of going to court and asking for a free house.
Now, if the department of notaries finds that the notarized documents are fraudulent, then you done, they will terminate the loan contract, and all monies are to be returned to each party, end of story. Here’s hoping for you!
Got some disclosure in my suit against BoA. We’re not in discovery yet. Among the documents was a MERS Milestone report showing that my loan was sold to Fannie Mae a little over a week after the closing. I was already 99% sure that was the case, but it never hurts to have confirmation.
I believe edgetraderplus quoted something from a Freddie Mac servicers’ manual abot how servicers are “agents” of Freddie Mac and “controlled by it,” therefore any assignments to the servicer or allegations of holding the note by the servicer are as good as if it were Freddie Mac itself. While that may be Freddie Mac/Fannie Mae policy, it is not the law as I read it. Agency has limits, and the agency role of servicers is clearly defined in pooling and servicing agreements, is it not?
In other words, I plan to argue that even though my servicer is an agent of Fannie Mae, that does not make the servicer the holder in due course of the note, even by assignment–especially when the assignment is not from Fannie Mae to my servicer, the assignment is from my servicer posing as MERS to itself.
Now that I have a pool number and an investor number, I plan on trying to ferret out the specific pooling and servicing agreeement that exists between my servicer and Fannie Mae. My suspicion is that it specifically prohibits any of its agents from stepping in as temporary noteholder. If another entity besides the actual noteholder is allowed to become noteholder for any reason, including enforcement, then the status of “noteholder” or “holder in due course” is meaningless, in my opinion, which is based on my research here and in the law.
RESPA QWR- does anyone know if I can serve the Master Servicer, Fannie Mae a RESPA QWR, and hold them accountable under RESPA to repsond per the 20/60 day rule. Fannie Mae is the alleged investor and Master Servicer of the loan, as stated by the the bank(servicer)
Richard and Forensic Mortgage Examiners- thanks so much for the positive information regarding my fraudulent notarization of the assignment of mortgage from xxx to MERS. Also, the “person of authority” who signed as director of secondary marketing, Ms.xxx, I am sure is a forgery- turns out she was chief corporate counsel, and her signature looks like that of an infirm 100 yr old. not a 51 yr.old. I would have an audit of some type done, but never received closing documents. The trust, SNMLT 2005-2 has no mortgage schedule, pages “intentionally left blank”, closed April 25th 2005, assignment of mortgage to xxx dated August 2009, servicer and trust same address, persons signing in California all work for servicer, it seems like a fraud from start to finish. Any more tips greatly appreciated. Thanks again, Ian
Ian,
You need to contact the department of notaries of PA. I have a similar situation, and i have them doing an investigation into the notary, that sealed my documents, and said i was present, when i wasn’t, they wrote in my name, and you can clearly see the difference in hand writing.
You need to call them, and file a complaint, then fax them a written complaint with a copy or your fraudulent notary documents.
As far as i can tell, the notary department of the state is the only branch of government that is seeming to take their jobs seriously, because all the others just don’t care, just like the feds.
The department of notary told me, that if the notary fordged the documents, then they are illegal, and thus that makes the loan null and void, the bank has no standing to do anything! It’s an automatic recission that the bank cannot fight.
By the way, Ian, take a close look at section 16… there’s mention of “perjury”….
Ian, you need to fire your attorney, he’s an idiot.
Here is a link to Pennsylvania ‘s Notary Law. If I were you I’d read both the Revised Law and the Uniform Acknowledgement Act.
http://www.dos.state.pa.us/portal/server.pt/community/laws/12628
Good luck!
My challenges to the documents resulted in after-the-fact forging of an allonge. The allonge was not attached to the copy of the note pleaded along with the complaint. Whether it was the attorney, or one of the fabrication mills (perhaps the same one that fabricated the assignment), is something I can’t say. Regardless, the allonge did not make its first appearance until 2 years after suit was filed.
Anonymous or Jan van Eck- here’s one for you: I had thought that an assignment which was notarized by someone who was not a notary (as per State notary board) would be a “smoking gun” but my atty here in Pa. ,who definitely doesn’t get it, has informed me that the notary “is just attesting to an agreement that has been made”. Further, a forged, fraudulent notarization is “nothing to hang your hat on”. Well, what gives here? Is proper notarization just a requirement of securitized mortgages, or some other SEC or IRS rules/laws? Is there an actual statute that states that forgery or other fabrication of documents is frowned upon? Thanks, Ian
Jan van Eck
Thanks a lot, You have given so many solutions to this issue. This is about VIRGINIA.
Thanks and Be Safe
Mega-suit by investors. Class action. Would go on forever, and ever, Amen. I’m not gonna live that long.
By the way, Jan, I love your paintings !
Yup, that’s a real problem. It may not be possible. One implausible but theoretical way is the mega-lawsuit, where everybody ends up in Court before the Jury. And that is where it starts to get interesting…
Folks, help me out with this one:
“The real reason for them NOT simply bringing in the investors who at least WERE parties in interest is multifold:
• The meeting of the investor with the borrower will result in comparing notes and the fact that not all the money advanced by investors was actually invested in mortgages will be “problematic” for the investment bankers who put this scheme together.
• The meeting of the investor and borrower could result in an alliance in litigation in which the shell game would be impossible.
• The meeting of the investor and the borrower could result in a settlement that cuts the servicers and other intermediaries out of the gravy train of servicing fees, foreclosures with rigged bids, etc.”
I don’t see how such a borrower-lender/investor meeting can occur.
Consider the following.
Let’s say that a $1 billion mortgage trust deal is put together by the Street. There are 5,000 mortgages averaging $200K each in the deal. You got a mortgage for $200,000 as a result of the deal, and now your mortgage and note are in the deal or trust.
Let’s say that I’m a pension fund that bought $10 million of the certificates at the deal’s origination (1% of the deal). I was an original investor/lender. Myself and other similarly situated investors made the deal happen. Since the pension fund’s investment of $10 million on a pro rata basis only purchased 1% of the notes, the pension fund is entitled to 1% of the note’s cashflow, to include yours.
A year later I sell these certificates for $9.8 million in the open securities markets. I’m now out of the deal, with no further interest in subsequent happenings. Other investors bought out my position.
Several months after I sell out my position, you default on your mortgage loan. Who is the investor with whom you should now be meeting with to discuss this matter? What “investor” is going to have any identifiable interest in your particular mortgage loan, such that it warrants his showing up to have a chat with you about the matter? And how could you and he possibly resolve the deal via a restructuring? He has no authority or means to accomplish this result, as far as I can tell, unless he owns the whole loan and not the certificates.
And even if the pension fund was still holding the original certificates, I don’t see how you would ever get them to show up for such a meeting, since they can accomplish nothing dealing with an individual mortgagor. Their remedy would be against the Street players for fraud in the inducement and violation of various securities laws. Don’t see how that helps anyone here.
• And the last thing that comes to my mind is the last thing anyone wants to hear — was this obligation satisfied in whole or in part by third party payments through credit enhancements or federal bailout?
Asserting this as a defense means that the one so asserting has the burden of proof. It would be very difficult for a mortgagor-defendant to prove this in a timely fashion. Alleging on information and belief that the obligation was satisfied in whole or in part by a third party is not sufficient to defeat a mortgage foreclosure motion for summary judgment, given that plaintiff may have already presented a prima facie entitlement to judgment. Actual proof of third party payment is required. How do we prove that?
to Roxana and others:
Whi8le it may be small solace after being tossed out of your house, do remember that you can (and in my view should) always file suit against the prosecuting law firm if you later establish that the foreclosure was done without “authority,” either Standing or Party in Interest or document forgery or notary forgery or other like causes. The attorneys become liable by virtue of Court Rules that require any attorney signing a Pleading or Complaint has made diligent effort to ensure the accuracy of the contents. Admittedly a Rule that is interpreted with considerably “flex” in it. (By allowing the attorney to rely on the representations of his client, etc). Nonetheless, you always retain the right to sue for damages.
Fannie Mae will not let MERS be a party to any loan under its control. Here is some more of my notes from
looking up Restatement 3rd that happened to mention
Fannie:
(FHLMC) procedures allow an apparent separation of the note and the mortgage. However, this is not problematic because the loan servicers are agents of FHLMC and are controlled by it. Specifically, the procedure states:
When the mortgage loan is sold to Freddie Mac, the lender endorses the note “in blank” and delivers the note to Freddie Mac or our custodian. The note remains in our or our custodian’s possession until the loan is paid off, foreclosed or repurchased by the mortgage loan servicer. The assignee of the note also prepares an assignment of the mortgage which is held by the custodian, but is not recorded until Freddie Mac instructs the custodian to do so. The assignee of the note usually is the servicer of the mortgage and remains the mortgagee of record until and unless Freddie Mac has the assignment recorded. This arrangement accommodates the mortgage servicer and Freddie Mac.81
The FNMA process is essentially identical.
Transferring a mortgage to one party and the obligation it secures to another rarely makes sense unless one of the transferees controls the other as in FHLMC’s case.82 The reason, as the Mortgages Restatement points out, is that a mortgage is enforceable only by or on behalf of a person who can enforce the obligation that the mortgage secures.83 Parties who hold the mortgage, but who cannot enforce the note it secures, can never experience a default because nothing is owed to them. Hence, such mortgage holders can never foreclose the mortgage. In effect, splitting the mortgage from the note simply wastes the mortgage security without providing any benefit. A lawyer contemplating a transaction that will split the mortgage and the obligation, putting them in the hands of two unrelated parties, should consider carefully the wisdom of doing so; it is almost always a bad idea.
It is important to know that in court action a plaintiff must possess both legal standing and be the real party interest. However, standing and real party in interest are defined differently. See below. I am not an attorney and this is not meant to be construed as legal advise and only for educational purposes.
“Every action shall be prosecuted in the name of real party in interest” (Federal Rules of Civil Procedure (F.R.C.P. 17(a)). The court, in In re: Kang Jin Hwang, U.S. Bankr. Ct. for the C.D. of Calif. (note11), distinguishes between legal standing and real party in interest, but confirms that a plaintiff must have both legal standing and be the real party in interest to proceed with a legal action. Citing 6A Wright, Miller & Kane, Federal Practice and Procedure” Civil 2d section 1541 (1990) (“Wright”), the court defines the purpose of Rule 17 as to require that an action be brought “in the name of the party who possesses the substantive rights being asserted under the applicable law.” In comparison, the court, relying on developed case law, determines that legal standing “subsumes a blend of constitutional requirements and prudential considerations,” and “that a party may have standing – having suffered an “injury in fact” – but this may not make it the real party in interest.” In Kang Jin Hwang, Id., the court determined that although IndyMac is in possession of the mortgage note, IndyMac had sold the note to Fannie Mae, which in turn most likely sold it again as part of securitization transaction. Thus, the court concludes that IndyMac may have legal standing since they are in possession of the note, but that IndyMac is not the real party in interest. IndyMac failed to join the real party in interest as required under F.R.C.P (17), and the court therefore, denied the bankruptcy motion for relief from stay to proceed with foreclosure.”
HOW DOES THE STEVEN J BAUM FORECLOSURE MILL CONTINUE TO OPERATE
Where is the OUTRAGE where is the JUSTICE??????
This firm has been thrown out of court so many times.
Lack of standing.
Representing MERS and The Banks, Conflict of Interest?
Where are the SANCTIONS????????
How is this firm and there band of thiefs allowed to continue??????
I think its time to do what all the people in Florida did.
This firm has tobe stopped.
Jan Van E,
Yes, I also saw that Fannie Mae has instructed MERS to not file foreclosures naming themselves as plaintiff when Fannie owns the loan. That’s why I believe that the next NOD will be in the name of BAC.
I’m in California so I’m hoping that there will be some case law in my favor before my turn is up. A lot could happen between now and then and it seems like there is something new in all this happening every day.
I feel worse for those who lost their homes before “the cat was out of the bag.” Those poor souls didn’t stand a chance.
to Roxana:
Note that MERS cannot be a plaintiff as MERS is only a nominee, and a nominee is not a real party in interest.
Of course, some Courts just ignore that little reality and continue to play the MERS fantasy…….
Jan Van Eck,
Thank you for the reply.
Reconstruct as trustee filed a NOD naming MERS as the plaintiff but that was over a year ago and it has since expired. My guess is that BAC will be filing another NOD very soon now that they’ve denied me a mod..
I guess I’ll find out soon enough! Yikes!
Note: Countrywide
DOT: MERS
Fannie Mae supposedly owns the loan.
to Roxana:
Depends on how much litigation has already taken place. If there is a ton of litigation, the Note is probably sitting in the litigation folder of the (previous) foreclosure lawyer mill firm, and never made it to and from Fannie Mae. If not much has happened, for all anybody knows they cannot even find the Note.
In cases in which Fannie Mae supposedly owns the loan, would they be more likely to be able to produce the note? Does anyone have any knowledge of cases where Fannie also could NOT produce the original note?
to Raja:
I cannot (and will not) offer you direct legal advice on your specific problem as (1) I do not know what State you are in, and State laws will obviously apply; and (2) I have no idea of how your locality would view your particular situation, and (3) I have no idea if your “safe” was to a third party innocent buyer or was simply a buy-in by the bank. .
That said, let us talk in general principles.
You had a home, which is a “titled” item. It belongs to whoever it is titled to. Right now, it is titled to you. I would maintain that you are entirely rightful in being in that home while it is titled to you. It is empty; nobody else is maintaining a possessory interest.
You go down to the Land title records and purchase a dated; self-authenticating certified copy for one dollar of the Deed. And you obtain a dated copy of the tax rolls reciting you as the owner of the property. Same day, you go down to your house and bust in a window, climb in and move in your furniture. Along come the cops; the neighbor called. You show them the documents establishing it is titled to you. What do you suppose the cops are going to do? that’s right; say “Thank you very much, sir, sorry to trouble you.”
Along comes the rep for the “purchaser,” presumably the bank that bought it in at foreclosure. He finds you there and goes to the cops. He shows them a copy of a bill of sale. the cops against show up on your door. You have a copy of the certified land record and the tax roll. He has a bill of sale. What do you suppose the cops are going to do? that’s right: they say to you both: “Go to Court; this is a civil dispute, and the police are here only to enforce the peace.”
You go to your house and some squatter is living there. You throw them out and toss their stuff on the street. the cops are called. What do you suppose they do? Well, they arrest you. You have “breached the peace.” their attitude: Go to Court and settle your controversy.
Suppose you were sitting int he house and the foreclosure sale took place. There is no change of title registered. How does the bank get you out? they have to apply for an eviction, a “dispossession of premises.” That is done by Hearing and “trial” of sorts. An Order ensues. An Order flows. The buyer can go to the cops (typically, a marshal or Sheriff) and have you tossed. They arrive with the Order, but you still have the same-day Certified document stating the property is yours on the land title records. What do you suppose happens? Assuming the cops are bright, exactly nothing: once again, there is a controversy as to rights to property, you are in peaceable possession, they have an Order, but you have the title, so it remains a civil dispute (of course, if your sheriff is named Joe Arpiaio, this logic does not apply).
Do you see a pattern? Property is “yours” until there is a registration on the Land title records of a change of ownership. You can be an “owner” in the sens you bought something at a sale, but you have not “perfected” your title Interests and if somebody else is living there, you have to “prefect” your interests and then go to Curt to dispossess. Why? Because the Law does not approve of self-help. the Courts do not want people to go beating each other up in fist-fights in the street; that is why there are Courts. So if you go park yourself in there, and you have the documents to establish a colorable right to be there, hey: in my book, you are there by right, and if the :”buyer” does not like it, they can go back to Court. For all you (and the buyer) knows, there is a defect in the purchase agreement (the “sale”) that precludes him taking possession. Just because you paid money does not mean you own it. Ownership flows with Title.
The link below I believe is a note worth case, just for the simple principle and procedure of assignments not being conducted lawfully.
http://www.courts.state.ny.us/reporter/3dseries/2010/2010_20167.htm
Jeff,
Thank you for the direct link to your information. What do you make of the conflict of names not matching?
Richard,
Here isthe link.
http://www.courts.state.ny.us/reporter/3dseries/2010/2010_50819.htm
Jan van Eck
Please solve this issue
One borrower who had a rental home which went to foreclosure sale. He filed the Lis Pendens and Complaint before the sale and attempted to stop the sale. The tenant turned his keys into the new buyer and ran. Borrower would now like to move in based on some personal problems at home. We have not heard anything from a buyer or the bank (other than answer, discovery, etc.) As per County land records the house is still in his name. Any thoughts about him moving back in? He may have to break in because he does not have the keys.
If he was already living there, we would have told him not to move until the Unlawful detainer — but I am unsure about to move in.
Do you have any thoughts.
Jeff, The index number to your posting does not match the defendant’s name on the Kings Count website e-courts. Nor is Rafaela Diaz noted anywhere in the Dept of Finance recording. See as follows: e-courts. Not saying your info is meant to deceive just trying to connect the dots. I would like to have the facts correct as I will need all the data to use in my proceedings.
19271 /2009
Plaintiff : BAC HOME LOANS SERVICING LP ETC.
Plaintiff Attorney : BAUM
Defendant : DIAZ, RAFAELA ETAL
Defendant Attorney :
Remarks :
Opened : 07/30/2009
Type : Foreclosure
to edgetraderplus:
You have to speculate if it is a forfeiture action, with the U.S. as party plaintiff. Typically handled differently. Also, could be eminent domain or a tax lien enforcement. Who knows? Have to pull the case and take a look.
But that is not typical. The typical result is that the assignment of mortgage without the first assignment of the Note is a nullity.
Excellent point on not knowing what the case cited is. Enter “Federal district judge opinion” into the search function. An article, [appearing on the second page of results], mentioning this case references many others, as well.
Have not read them, yet. The above came about on a google search for U.S. v. Freidus, 769 Fed Supp 1266.
MORE ON JUDGE SCHACK
U.S. Bank, N.A. v Emmanuel
2010 NY Slip Op 50819(U)
Decided on May 11, 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 11, 2010
Supreme Court, Kings County
U.S. Bank, N.A., AS TRUSTEE FOR SG MORTGAGE SECURITIES ASSET BACKED CERTIFICATES, SERIES 2006-FRE2,, Plaintiff,
against
Arriana Emmanuel, et. al., Defendants.
19271/09
Plaintiff- US Bank
Steven J Baum, P.C.
Amherst NY
Arthur M. Schack, J.
The ex parte motion of plaintiff U.S. BANK, NATIONAL ASSOCIATION, AS
TRUSTEE FOR SG MORTGAGE SECURITIES ASSET BACKED CERTIFICATES, SERIES 2006-FRE2 [U.S. BANK], for service of a supplemental summons by publication upon defendant ARRIANA EMMANUEL [EMMANUEL] and related relief, in the instant mortgage foreclosure action for the premises located at 1388 Lincoln Place, Brooklyn, New York (Block 1391, Lot 13, County of Kings) is denied with prejudice. The instant action is dismissed and the instant notice of pendency is cancelled. Plaintiff U.S. BANK never had standing to prosecute this action because of an ineffective assignment of the subject mortgage and note to it. Plaintiff U.S. BANK’s attempt to foreclose upon a mortgage in which it has no legal or equitable interest is without foundation in law or fact.
Further, even if this action was not dismissed, there is a conflict of interest in that [*2]plaintiff’s counsel, Steven J. Baum, P.C., appears to be in violation of 22 NYCRR § 1200.0 (Rules of Professional Conduct, effective April 1, 2009) Rule 1.7, “Conflict of Interest: Current Clients.” The Baum firm represents both MORTGAGE ELECTRONIC REGISTRATION SYSTEMS [MERS], as nominee for FREMONT INVESTMENT AND LOAN [FREMONT], the ineffective assignor of the instant mortgage, and plaintiff U.S. BANK, the ineffective assignee of the instant mortgage. If the Court did not dismiss the action, the Court would need proof, in an affirmation by Steven J. Baum, Esq., the principal of Steven J. Baum, P.C., that both MERS, as nominee for FREMONT, and U.S. BANK each gave “informed consent, confirmed in writing” to the concurrent conflict of interest in their representation by Steven J. Baum, P.C., with both MERS, as nominee for FREMONT, and U.S. BANK each being “aware of the relevant circumstances, including the material and reasonably foreseeable ways that the conflict could adversely affect the interests of that client.”
Background
Plaintiff’s moving papers do not contain exhibits with the underlying mortgage and assignment of the instant mortgage to plaintiff U.S. BANK. I checked the Automated City Register Computer System (ACRIS) website of the Office of the City Register of the City of New York to verify the information in the complaint and moving papers, discovering that defendant EMMANUEL executed the instant mortgage and note on May 3, 2006 and borrowed $480,000.00 from FREMONT. MERS, as nominee for FREMONT, recorded the instant mortgage and note on May 23, 2006, in the Office of the City Register of the City of New York, at City Register File Number (CRFN) 2006000287060. Then, MERS, as nominee for FREMONT, on June 16, 2009, assigned to plaintiff U.S. BANK “said Mortgage, and the full benefit of all the powers and of all the covenants and Provisions therein contained and the said Assignor hereby grants and conveys until the said Assignee, the Assignors beneficial interest under the Mortgage.” The note was not assigned. The June 16, 2009 assignment of the mortgage and “the full benefit of all the powers and of all the covenants and Provisions therein contained” were recorded on July 17, 2009, in the Office of the City Register of the City of New York, at CRFN 2009000111146. Subsequently, plaintiff U.S. BANK commenced the instant action by filing the summons, complaint and notice of pendency with the Office of the Kings County Clerk on July 30, 2009.
The June 16, 2009 assignment was executed by “Elpiniki Bechakas, Assistant Secretary and Vice President” of MERS. Ms. Bechakas is a member of the New York State Bar and her business address, according to the Office of Court Administration’s Attorney Registration, is “Steven Baum, P.C., 220 Northpointe Parkway, Suite G, Amherst, NY 14228-1894.” Steven J. Baum, P.C. is the attorney for plaintiff U.S. BANK, the assignee. The Court is concerned that the concurrent representation by Steven J. Baum, P.C. of both assignor MERS, as nominee for FREMONT, and assignee plaintiff U.S. BANK is a conflict of interest, in violation of 22 NYCRR § 1200.0 (Rules of Professional Conduct, effective April 1, 2009) Rule 1.7, “Conflict of Interest: Current Clients.”
Subsequently, in January 2010, plaintiff U.S. BANK made the instant motion to serve defendant EMMANUEL by publication, pursuant to CPLR Rules 315 and 316, claiming that after a diligent search defendant EMMANUEL could not be found. Plaintiff’s complaint correctly states, in ¶ 3, that “[t]he mortgage was subsequently assigned to U.S. BANK.” The [*3]complaint is silent as to whether the subject note was assigned. However, the affidavit of plaintiff’s counsel in support of service by publication incorrectly states, in ¶ 6, that “[t]his action is based upon a bond or note and mortgage which is secured by real property.” MERS, as nominee for FREMONT, did not assign the note with the mortgage, but assigned, as noted above, the mortgage and “and the full benefit of all the powers and of all the covenants and Provisions therein contained” and “the Assignors beneficial interest under the Mortgage.” This verbiage is not the note.
Plaintiff’s lack of standing
“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
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]). “Standing is jurisdictional and goes to a court’s authority to resolve litigation, we [the Court] can raise this matter sua sponte.” (Axelrod v New York State Teachers’ Retirement System, 154 AD2D 827, 828 [3d Dept 1989]).
The instant June 16, 2009 assignment from MERS, as nominee for FREMONT, to U.S. BANK is a nullity, because MERS, as nominee for FREMONT, did not assign the note, but only assigned “said Mortgage, and the full benefit of all the powers and of all the covenants and Provisions therein contained and the said Assignor hereby grants and conveys until the said Assignee, the Assignors beneficial interest under the Mortgage.” The Appellate Division, Second Department in 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 [Emphasis added].” Moreover, “a mortgage is but an incident to the debt which it is intended to secure . . . the logical conclusion is that a transfer of the mortgage without the debt is a nullity, and no interest is assigned by it. The security cannot be separated from the debt, and exist independently of it. This is the necessary legal conclusion.” (Merritt v Bartholick, 36 NY 44, 45 [1867]. The Appellate Division, First Department, citing Kluge v Fugazy in Katz v East-Ville Realty Co. ( 249 AD2d 243 [1d 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.” Last December, the Appellate [*4]Division, Second Department, instructed that “[w]here a mortgage isrepresented by a bond or other instrument, an assignment of the mortgage without assignment of the underlying note or bond is a nullity (see Merritt v Bartholick, 36 NY 44, 45 [1867]; Kluge v Fugazy, 145 AD2d 537, 538).” (U.S. Bank, N.A. v Collymore, 68 AD3d 752, 754 [2d Dept 2009]).
Therefore, the subject June 16, 2009 assignment is a nullity and plaintiff U.S. BANK has no standing in this action. The instant motion is denied. The instant action is dismissed with prejudice and the instant notice of pendency is cancelled.
Conflict of interest of plaintiff’s counsel
Even if plaintiff could cure the assignment defect, plaintiff’s counsel would then have to address its conflict of interest in its concurrent representation of both purported assignor MERS, as nominee for FREMONT, and purported assignee U.S. BANK. 22
NYCRR § 1200.0 (Rules of Professional Conduct, effective April 1, 2009) Rule 1.7, “Conflict of Interest: Current Clients,” states in relevant part:
(a) Except as provided in paragraph (b), a lawyer shall not represent
a client if a reasonable lawyer would conclude that either:
(1) the representation will involve the lawyer in representing
differing interests; or (2) there is a significant risk that the lawyer’s professional
judgment on behalf of a client will be adversely affected by the
lawyer’s own financial, business, property or other personal
interests.
(b) Notwithstanding the existence of a concurrent conflict of interest
under paragraph (a), a lawyer may represent a client if: (1) the lawyer reasonably believes that the lawyer will be able
to provide competent and diligent representation to each
affected client; (2) the representation is not prohibited by law; (3) the representation does not involve the assertion of a
claim by one client against another client represented by the
lawyer in the same litigation or other proceeding before a
tribunal; and (4) each affected client gives informed consent, confirmed
in writing. [Emphasis added]
[*5]Rules of Professional Conduct Rule 1.0 defines various “Terminology” and Rules of Professional Conduct Rule 1.0 (j) states that “[i]nformed consent’ denotes the agreement by a person to a proposed course of conduct after the lawyer has communicated information adequate for the person to make an informed decision, and after the lawyer has adequately explained to the person the material risks of the proposed course of conduct and reasonably available alternatives.” Comment (18) to Rule 1.7 states:
Informed consent requires that each affected client be aware of
the relevant circumstances, including the material and reasonably
foreseeable ways that the conflict could adversely affect the interests
of that client. Informed consent also requires that the client be given
the opportunity to obtain other counsel if the client so desires. See
Rule 1.0 (j) . . . When representation of multiple clients in a single
matter is undertaken, the information must include the implications
of the common representation, including possible effects on loyalty,
confidentiality and the attorney-client privilege, and the advantages
and risks involved.
If the Court allowed the instant action to proceed, Steven J. Baum, Esq., the principal of Steven J. Baum, P.C., would need to provide an affirmation explaining whether both MERS, as nominee for FREMONT, and U.S. BANK gave “informed consent, confirmed in writing” in the instant action, and the information presented to them by the Baum firm included “the implications of the common representation, including possible effects on loyalty, confidentiality and the attorney-client privilege, and the advantages and risks involved.”
The Appellate Division, Fourth Department, the Department where both Ms. Bechakas and Mr. Baum are registered, censured an attorney for, inter alia, violating 22 NYCRR § 1200.24 (the pre-April 1, 2009 Code of Professional Responsibility Rule, dealing with conflict of interest and simultaneous representation), for representing both a buyer and sellers in the sale of a motel. (In re Rogoff, 31 AD3d 111 [2006]). The Rogoff Court, at 112, found that the attorney, “failed to make appropriate disclosures to either the sellers or the buyer concerning dual representation.” Further, the Court, at 113, censured the attorney, after it considered the matters submitted by respondent in mitigation, including:
that respondent undertook the dual representation at the insistence of
the buyer, had no financial interest in the transaction and charged the
sellers and the buyer one half of his usual fee. Additionally, we note
that respondent cooperated with the Grievance Committee and has
expressed remorse for his misconduct.
Cancelling of notice of pendency
The dismissal with prejudice of the instant foreclosure action requires the
cancellation of the notice of pendency. 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 [*6]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 Court of Appeals, in 5308 Realty Corp. v O & Y Equity Corp. (64 NY2d 313, 319 [1984]), commented that “[t]he 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, at 320, that “the statutory scheme permits a party to effectively retard the alienability of real property without any prior judicial review.”
CPLR § 6514 (a) provides for the mandatory cancellation of a notice of pendency by:
The 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 551. [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 Natassi, 26 AD3d 32, 40 [2d Dept 2005]). Further, Nastasi at 36, held that the “[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., supra at 320-321; Rose v Montt Assets, 250 AD2d 451, 451-452 [1d Dept 1998]; Siegel, NY Prac § 336 [4th ed]).” Thus, the dismissal of the instant complaint must result in the mandatory cancellation of U.S. BANK’s notice of pendency against the property “in the exercise of the inherent power of the court.”
Conclusion
Accordingly, it is
ORDERED, that the motion of plaintiff, U.S. BANK, NATIONAL ASSOCIATION, AS TRUSTEE FOR SG MORTGAGE SECURITIES ASSET BACKED CERTIFICATES, SERIES 2006-FRE2, for service of a supplemental summons by publication upon defendant ARRIANA EMMANUEL and related relief, in the instant mortgage foreclosure action for the premises located at 1388 Lincoln Place, Brooklyn, New York (Block 1391, Lot 13, County of Kings) is denied with prejudice; and it is further
ORDERED, that the instant action, Index Number 19271/09, is dismissed with prejudice; and it is further
ORDERED that the Notice of Pendency in this action, filed with the Kings County Clerk on July 30, 2009, by plaintiff, U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR SG MORTGAGE SECURITIES ASSET BACKED CERTIFICATES, SERIES 2006-FRE2, to foreclose a mortgagefor real property located at 1388 Lincoln Place, Brooklyn New York (Block 1391, Lot 13, County of Kings), is cancelled. [*7]
This constitutes the Decision and Order of the Court.
ENTER
______________________________ Hon. Arthur M. Schack
to edgetraderplus:
You are quite correct that assignment of a mortgage by itself does not assign the Note. The Note has to be independently Indorsed and delivered (plus of course the assignment of the security) for the New Note Holder to be a Holder and have the authority to enforce. U.S. v. Freidus, 769 Fed Supp 1266, looks like an anomaly. Since the U.S. is the plaintiff, you have to assume something weird is going on there. It should be worthwhile to pull and study that case.
Again, just because you did not pay the note yourself, does not mead that the Note was not paid. It may well have been paid, just by somebody else (like AIG with a credit-default swap). Nonetheless, I maintain that Paid is Paid. the lender should not care where the money comes from. And one thing for sure: they cannot collect money from another, and then go collect once again from YOU. that is fraud.
More and more we are hearing that the “pretenders” aren’t winning. Gives me hope. I am just starting this game.
206-396-4486.
The mortgage may follow the Note, but it does not follow that the Note follows the mortgage, and this goes back to the “splitting of the two” when, for example, MERS makes an assignment, without apparent authority to do so, re Reststment 3rd case.
From my notes in doing research:
XI. SECONDARY MARKET TRANSFERS OF MORTGAGES
A great majority of cases hold that when a mortgagee transfers the note or other evidence of the obligation, the mortgage automatically follows it.76 Thus, no formal mortgage assignment is required. The Mortgages Restatement agrees,77 holding that a transfer of the mortgage automatically transfers the obligation,78 except when the UCC prevents that result (as it does with a negotiable note).79
78 See id. § 5.4(b). The cases are divided on this point. Compare United States v. Freidus, 769 F. Supp. 1266 (S.D.N.Y. 1991) (holding that an assignment of a mortgage automatically transfers the note as well) with Pierce v. Tavormina (In re Hurricane Resort Co.), 30 B.R. 258 (Bankr. D. Fla. 1983) (holding that an assignment of a mortgage without the note is a nullity).
79 U.C.C. § 3-202 (1987) is generally understood to make the right of enforcement of a negotiable promissory note transferrable only by delivery of the instrument itself. Hence, it would appear that an assignment of the mortgage without delivery of the negotiable note cannot transfer the right to enforce the note.
Do remember that this is now case-law precedent. If your case pleads only the mortgage and it was not assigned, then you now have case-law to favor dismissal. Since it is the trial-level Court, it is not binding. But it starts to set the trend. I think Judge Schack is starting to have a [timy] impact on his colleagues.
Note also that “dismissal with prejudice,” the “holy grail” of homeowners, came ONLY after the prevailing plaintiff failed to respond to the Show Cause Order. I rather suspect that was only because the Plaintiff could no longer forge and alter the underlying documents. that remains still an unusual situation. In your own cases, do not be surprised if challenges to the documents result in after-the-fact forgings of Indorsements. And yes, attorneys do it on behalf of their clients all the time. A sad commentary on professional ethics.
Before you folks get your spirits up unduly over the results in this case, I would gently mention that it is a bit of a special situation. If you pull the entire Order from Scribd and look through it, you will note that Judge Schack ruled that there was no evidence presented, pursuant to his Order to Show Cause, that the plaintiff held the “note and mortgage” on the date the suit was filed.
Yet this is a bit special. In many cases, the Plaintiff may well hold the Note, by assignment, but has not recorded the assignment of the mortgage. They then plead “by assignment of mortgage to be recorded (later) at…” this is in conformance with the long-established pattern that “the mortgage follows the Note.” This is done routinely in Connecticut, next door to New York, and is unassailable.
what sets this case aside as special is that the Pleading of the Complaint was amateurish. It stated “Plaintiff is the holder of a mortgage bearing date ..xxx…to secure the sum of $381,000 and recorded as Instrument No….xxx…; said mortgage is to be duly assigned by an Assignment to be recorded…” The Complaint apparently did not reference the Note.
The subsequent assignment is notarized and made by the notorious ANITA ANTONELLI of whom there is so much controversy.
So it appears the Note was never pled. If the only pleading of ownership is the mortgage, and the mortgage is not assigned, well, the Plaintiff’s case falls apart.
But this is not the typical case. What this demonstrates is that many foreclosure Complaints are being drafted by very junior people; perhaps typically the recent school grad fresh out and on the first job. An experienced foreclosure lawyer would not make this mistake.
Moral: study the Complaint for drafting failures. You might get lucky also.
The search function does not provide results from a lot of searches that I have tried. The most recent one is the Fordam Law Review article mentioned above. Nor could I find it in the Fordam Law Review archives.
Anyone else having better results?
The best piece ever pure and simple crack the shell
You can read the entire case here…
JP Morgan Chase Bank, N.A. Against Gertrude George Et Al
4closureFraud
You can read the entire case here…
JP Morgan Chase Bank, N.A. Against Gertrude George Et Al
4closureFraud