A Montana Circuit Judge entered a preliminary injunction yesterday enjoining MERS, Recontrust, and Countrywide from undertaking any action to sell, encumber, or transfer the borrower’s property during the pendency of the borrower’s lawsuit challenging a non-judicial foreclosure. The Notice of Trustee’s Sale fraudulently represented that there was an “obligation owed to MERS” when there was never any such obligation, and there is no evidence of any lawful assignment of either the Note or the Deed of Trust from the original lender to anyone. None of the Defendants appeared for the hearing.

The borrower had previously obtained a Temporary Restraining Order which stopped the Trustee’s Sale. Yesterday’s ruling converted the TRO into a preliminary injunction for the duration of the litigation.

This is FDN’s second victory in Montana. The borrowers in both cases are represented by Jeff Barnes, Esq., assisted by local Montana counsel Eric Hummel, Esq.

19 Responses

  1. Nye Lavalle,

    Can you contact me via email when you get this. Thanks

  2. Dear Neil:

    I am defending several foreclosures in Florida and, because all loans have mortgages executed to MERS, I have raised the lender’s lack of security interest as a defense.

    As you know, there have been several Florida DCA opinions holding for MERS. But my particular set of facts and circumstances has been heard on appeal.

    My assertion is that the separation of note and security interest is fatal:

    MERS cannot be the mortgagee because MERS has no beneficial interest in the loan. And MERS cannot assign an interest that it does not possess.

    Can I make this fly?

    Can you help me?

  3. I have a blanket state wide preliminary injunction against Recon in Utah.
    Contact me:

  4. Gregory Bryl—- OK it is June 2, What happened in court ????????????????????????? 😀

  5. Hi Anonymous Atlanta

    Ben also said that only cash receivables are passed-on via a Trust – not the mortgage loan itself.

    Someone has to account for monetary recovery in foreclosure. And, it is not the servicer, trustee, trust, or security investors. None of these parties have the ability to account for recovery.

  6. FIRST (SMALL) VICTORY IN VIRGINIA: debtor defeats pretender lender’s lift-stay motion. Details below.

    In 2005, Debtor executed and delivered to “Synergy One” a fixed-rate promissory note in the principal sum of about $290K secured by a Deed of Trust on real property located in Manassas, VA. The Deed of Trust listed Synergy-One as the “Lender,” and Mortgage Electronic Registration Systems, Inc. (“MERS”) as “the beneficiary” of the Deed of Trust “solely as nominee for Lender and Lender’s successors and assigns.”

    During the pendency of a non-judicial foreclosure commenced by SunTrust Mortgage, Debtor filed for Chapter 7 bankruptcy, and then retained counsel. After checking with Fannie Mae and Freddie Mac, Debtor’s counsel ascertained that the loan was (at least at some point) owned by Fannie. Suntrust then moved for lift-stay relief in the bankruptcy court to continue with its (bogus) foreclosure. Debtor, through counsel, opposed the motion on the grounds that SunTrust’s motion contained no evidence that SunTrust had the right to enforce the lien, that SunTrust was not the “real party in interest” as required by the federal rules of procedure, and that the debt was “unenforceable against the debtor and property of the debtor, under any agreement or applicable law.” Additionally, Debtor’s counsel introduced into evidence a copy of the note that was different than the copy submitted by SunTrust and its attorneys (it contained an extra blank endorsement). After a hearing on May 5, 2010, the judge ruled from the bench and agreed with Debtor that SunTrust had not established it was the “real party in interest.” The judge, however, gave SunTrust a chance to establish itself as a “lender” by setting a trial for June 2, 2010, whereby SunTrust would have a chance to produce the original note and bring in other witnesses, including “documents custodian.”

    On May 26, 2010, Debtor’s counsel filed its list of witnesses indicating that it would put on the stand SunTrust’s and Synergy-One officials whose signatures appeared on purported endorsements on the copies of the Note. On May 27, 2010, after seeing Debtor’s list of witnesses, SunTrust withdrew its lift-stay motion! So the stay remains in place and SunTrust can’t foreclose. What’s more, Debtor has now turned the pending non-judicial foreclosure into a judicial one by filing an adversary proceeding (a complaint challenging the pending foreclosure) in the bankruptcy court.

    Those facing foreclosure defense issues or desiring a “forced loan modification” from their bank are encouraged to contact attorney Gregory Bryl.

  7. Correction to my last post.
    My mention of Ben B. “He said some thing like I would need one hundred PHDs. to understand what the loan docs actually mean”.
    (this is not a complete and accurate quote, but the best I could remember)

  8. I have read my loan docs so many times now I need a “PHD” to understand them (quote from “BEN BERNANKE i would need one phds to understand the loans doc”)
    Mers is the “nominee”
    “American Wholesale lender” is the lender
    “Countrywide all so the lender (that is affiliated with A.W.L)
    ‘”Recontrust N.A. (is the possible Trustee)?
    Bank of New York Mellon is? (possible trustee) (I think holds the Security)?
    Bank of America Owns Recontrust N.A.
    Bank of America is the new servicer (supposed owner)
    Bank of America “owned Recontrust N. A.” since before my loan was Funded (possibly or definitely a shell Company before my loan closed in Oct/26/2006)
    . So I think my “Title is clouded and approaching a tornado”.
    I have been granted A motion to Stay
    Any thoughts on this would be helpful.
    I have a good Lawyer in Atlanta if you need one.

    One more thing that is confusing.
    If BOA owned Recontrust N.A. at closing if I connect all the dots where am I?

  9. May 28, 2010

    Mortgage Bankers Association
    The MBA


    FAS 140 and related summary, conditions and events classified under codification provides consistent standards for distinguishing transfers of financial assets that are sales from transfers that are secured borrowings.

    No GAAP rules interpretation has ever received so much attention.

    The new administration has done all they can to change the “sale” accounting rules under GAAP and various pronouncements made over a decade under FASB.

    Specifically FAS 140 and SFAS 140 are my concerns with no mention here for revised rules and codification. Summary of Statement for Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities-a replacement of FASB Statement No. 125 (Issued 9/00)

    This Statement revised from earlier standards for accounting for securitizations and other transfers of financial assets and collateral requires certain disclosures, carries over most of Statement 125’s provisions without reconsideration.

    Again, we are talking about accounting and reporting standards for bulk asset transfers and servicing receivables whereby the logical accounting practices address offsetting value by liabilities.

    (Financial Assets – Liabilities) = Net Value
    Servicing Assets

    Controversy surrounds what I opine are two debilitating factors cause for the implosion of the markets. First is dereconginition or for the extinguishments of liabilities based on consistent application of a financial-components approach second focuses on controlling interest in assets sold subsequent to transfer.

    The MBA by its own admission clearly states no modifications are possible but fail to include foreclosure in this discussion. The feasibility or prohibition of one event is linked to the other.

    If a QSPE ceases to be qualifying because it no longer meets the qualifying conditions in FAS 140, a transferor of the loans to the QSPE would be required to record a ‘repurchase’ of any remaining previously transferred loans to the QSPE and recognize any liabilities assumed.

    The effect would be an expansion of the transferor’s balance sheet to include loans to which they no longer have legal title and liabilities they are not legally obligated to pay, with negative financial statement and regulatory capital implications for the company.

    Consequently, if it were determined that restructurings of troubled loans would cause QSPEs to cease to be qualifying, mortgage servicers could be discouraged from restructuring loans that are expected to end up in foreclosure, to the disadvantage of transferors, servicers, investors, borrowers and communities

    The first leg of the transfer consisting of whole loan assets to cash requires a gain on sale and therefore no concerns for the “missing” assignments.

    Subpoena the general ledger of the seller. The second leg of travel is the transferring of cash for securities which is what I believe is capitalization of new business segments using tax payer insured deposits.

    Come on MBA members and FDIC regulatory chiefs of staff. This is a monumental fraud and you’ve known about it. Upon any transfer of financial assets, an entity recognizes the financial and servicing assets it controls and the liabilities it has incurred, derecognizes financial assets when control has been surrendered, and derecognizes liabilities when extinguished.

    Either a “Repo” exists needed to foreclose or no foreclosure is possible. The fact these moron attorneys and brokers are foreclosing will either bankrupt America or continue to foster secretive and fraudulent acts by the parties trying to back door the lender into the asset they lost at sale.

    Forget the MERS and HERS and HIS arguments and see the cause and need to prostrate the fraud. These mortgages are charged and written down to zero and you cannot recover zero. So the collection agencies are picking up homes from homeowners being diverted by offers of modification and short sales. These homes are up for grams and only the Fee Title holders can fight from a position of strength and fend off adverse claims lacking merit.

    How many homeowners went to their financial death not even knowing the strength of their arguments which were made over two years ago? How many?

    You’re not using these obvious accounting rules to your benefit? FASB and the MBA have evidenced in wiring the acknowledgement a lender who sold the loan cannot foreclose on the borrower.

    Foreclosure equates to major Bank Default while foreclosure restraint equal proper “sale” accounting compliance. Your using these MERS situational conditions and third parties sham sales should result in over one trillion being added to the balance sheets of America’s strongest banks due from recognition and that would spell complete financial disaster.

    Servicing assets a servicing company owned by a lender and whereby it they both control the asset subsequent event means the liabilities must be incurred. Only upon release of the right to foreclose can the lender or NA continue to derecognize financial assets when control has been truly surrendered, and it derecognizes the liabilities when extinguished.

    M. Soliman

    Witness to Counsel
    Tel. 213-880-6288

    Only an licensed attorney can offer or provide legal advice. The parties herein accepts no responsibility for written material, general opinions, comments, open answers and non binding responses to questions when providing information. Only an attorney licensed in the state can offer or provide legal advice. The content herein and found online and part of website content is for reading and educational purposes only. Consult an attorney whenever your rights are in question and you or someone you know requires the expertise of legal counsel.

  10. Congrats Jeff B
    (don’t let anyone steal from you them moment!
    Good Job!)

    San Mateo, Calif. May 27th 2010 / California Superior Court, The Contra Costa County./ Another busy week ourselves and look to stay on pace.

    Four cases to be heard by weeks end. Case on Monday was for a Loss of Possession in a wrongful foreclosure action brought by trustor as Plaintiff .

    The matter includes numerous instances of material breach and misrepresentation. This case went from a complicated stretch to uncovering a serious case of documented lender abusive practices .

    It is an interesting case with layered negligence and verifiable deceptive business practices. We are scheduled to appear in our third hearing tomorrow in late afternoon. We remain overly confident possession will be restored to the borrower based on . . . What’s interesting in the matter is the lenders willingness to move on the trust or who file suit days before the sale transpired.

    Within hours of the sale being called out the lender was occupying the home with door locks changed and alarms disconnected. No notice to quit and or filing of an unlawful detainer.

    Upon the police arriving the borrower was told it is a civil matter and they could not be involved. This obviously made no sense and law enforcement looked curiously confused.

    This gets our WTF award for the month of May
    (Why the Fraud).

    In another more disturbing case counsel is representing the petitioner who filed bankruptcy in a hearing for lenders relief from stay.

    My late assessment was too late. The fraud in the matter, in my opinion, was so overwhelming the court could not resist a motion to move the matter to an adversary. The Transfer deed showed amongst other things :

    1) Third Parties Transfer
    2) Taxes paid by bidder months prior to sale
    3) Sale conducted Pro Tanto
    4) Zero transfer tax
    5) Sale for “at then” consideration
    6) The words “successful bidder” were scratched out to read “Bid” (???)
    7) Notary licensed name is “Sharina” and name below signature is “Shannon”.
    8) The signature was conveniently scribbled in big loops to drown out the mis-spelled name.
    9) “Beny is not the transferee”
    10) Tax paid earlier was calculated at the subsequent transfer price bid at sale.

    So attorney tells the court on behalf of petitioner that –
    “everything in the documents (deed upon sale) looks to be in order! . . . Don’t know how much more one can take.

    Thanks to the court calendar . . . .was permitted to testify in trial on Tuesday in another wrongful foreclosure matter.

    The Judge calendared us as the second case up in a busy courtroom. The initial morning hearing was moved to immediate trial.

    The trail was fought hard , really hard and went for over an hour in a packed courtroom. . . . .and this one will blow you away. I mean blow you away ! (The Superior Court of California, The County of San Diego)

    We will appeal decision for courts lack of understanding in face of obvious fraud for which jurisdiction is not sufficent to throw out evidence and testimony once admitted.

    We believe this case will show several instances of the oppositions counsel prejudicing himself at trial and question curious view and comments by presiding magistrate made before the court whereby the courts decision suffers an overwhelming serious bias…And for no apparent reason.

    More to report here in a few hours.

    M. Soliman

    Congrats again Jeff B

  11. I called a CA Lawyer regarding my attempt to gain a Modification from Well Fargo. He comes to me from a mailer for refi, but being negative in my mortgage, I was referred to him. I was told they could help in my situation. Wells Fargo is playing games with me the borrower, and I am currently in my third round of trying to get a MOD. I even made the three months of trial basis successfully, but then they said I didn’t get new information to them in a timely manner. Duing my trial period, I paid for an AUDIT. I highly suggest getting one. Interesing that we sit in closings with nothing but TRUST in the signing process, only to find we were duped. Excerpts from my audit follows.
    Breach of Implied Covenant of Good Faith and Fair Dealing
    The law provides that in every contract, there is an implied duty of good faith and fair dealing between the parties. This implied covenant imposes the requirement “that neither party will do anything, which will injure the right of the other to receive the benefits of the agreement.” Breach of Fiduciary Duty
    In certain situations, courts have implicitly recognized imposing fiduciary duties on lenders based on policy grounds. For instance, a lender may be considered a fiduciary when it “takes control” of the borrower, or when “moral, social, personal, or domestic” relationships are shown to exist between the
    parties. (Cases cited in American Bar Association – Business Tort Litigation (2d Ed.) Further, when the lender undertakes to perform a task on behalf of the borrower, then it is likely that the lender has made itself a fiduciary for the borrower, based on the law of agency.

    Often times, when a loan officer or mortgage broker is helping to arrange a loan for a borrower, that loan officer/mortgage broker is, in reality, acting as the agent for both the lender and borrower.
    The fiduciary duty of the lender is a responsibility to perform their own diligence to determine if a customer is being placed in a loan that is legal, properly disclosed, is the best loan for the consumer given their financial circumstance and affordable over the life of the loan if present financial positions hold steady.

    If the lender knew or should have known that the Borrower has a likelihood of defaulting on this loan, he/she has a fiduciary duty to the borrower to not place them in that loan (in harm’s way).

    When a loan transaction occurs, any missteps in the loan transaction process can lead to dire consequences for the borrower. It is for this reason that the law should impose more liberally a fiduciary relationship between borrower and lender, especially in the residential home loan marketplace where the
    average borrower is not as sophisticated as the lender. If fiduciary relationships were more liberally imposed, we would likely see lenders implementing more safeguards before underwriting a loan.

    If the lender is aware that the borrowers would be better off with another type of loan that the lender offers, they have violated their duty to the consumers and such act of deception would be likely considered fraud on the consumer and predatory.
    ►Brokers owe a fiduciary duty to borrowers.
    ►Liability potential for lender may exist if borrower can prove either that: (1) a “special relationship or circumstance” existed, (2) the lender “directly ordered, authorized or participated in” the broker’s tortious conduct, or (3) that broker acted as lender’s agent for the transaction.
    Fraud in the factum:
    Fraud in the Factum is a type of fraud where misrepresentation causes one to enter a transaction without accurately realizing the risks, duties, or obligations incurred. Black’s Law Dictionary (2nd Pocket ed. 2001 pg. 293). This can be when the maker or drawer of a negotiable instrument, such as a promissory note or check, is induced to sign the instrument without a reasonable opportunity to learn of its fraudulent character or essential terms. Determination of whether an act constitutes fraud in the factum depends upon consideration of “all relevant factors.” Fraud in the factum usually voids the instrument under state law and is a real defense against even an holder in due course.
    MERS is simply an “artificial” entity designed to circumvent certain laws and other legal requirements dealing with mortgage loans. By designating certain member employees to be MERS corporate officers, MERS has created a situation whereby the foreclosing agency and MERS “designated officer” has a conflict of interest.

    Since neither MERS nor the servicer have a beneficial interest in the note, nor do they receive the income from the payments, and since it is actually an employee of the servicer signing the
    Assignment in the name of MERS, the Assignment executed by the MERS employee is illegal.

    The actual owner of the note has not executed the Assignment to the new party. An assignment of a mortgage in the absences of the assignment and physical delivery of the note will result in a

  12. We are routinely getting TRO’s and Pre.Inj. in Los Angeles County based on California Foreclosure Prevention Law enacted in 2008. If you have any questions or would like a consult, write to our email to
    We travel and do pro hac vice in other jurisdictions.
    Our seminal case is available for publication.


  14. can anyone post the Montanta injunction. I live in a nonjudicial and would love to see what they did and how they filed there injunction paperwork.


  16. Good Point Nye.

  17. Another great blog…Love reading these in the morning, helps to make my day a little brighter while fighting my fight!!!

    The forclosure road is long and difficult but with the victories of others, it helps knowing someone else is saving there home!!!

    Blessing to all

  18. I love all of these “victories,” but none of the Barnes’ victories I read about in this and other blogs contains the the actual orders or findings by the judge or a transcript. All of us are contributing to the common-goal of educating others around the nation and making sure the judges are “getting it.”

    I think it would only be fair to show the orders and any memos that come out. I don’t send out our victories in cases with lawyers we work with unless we have something to show. For example, we are 100% in past 2 years of shutting down EVERY GA foreclosure we have worked on to support the lawyers there.

    Most recently, a judge whose wife worked for BOA shut down a foreclosure by BOA after reading the very detailed complaint. He only recused himself AFTER issuing the TRO less than a 1/2 hour before the property was to be sold on courthouse steps!

    Each week I send countless articles and new rulings to Neil to post for ALL OF YOU. Please be kind enough to share with us your victories, but send the rulings and transcripts so we can see what “points are on target” with the judiciary’s mindset!

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