In Re Bailey vs Bank of New York Mellon et al. Case #2:09-01728-SSC

Report and summary: Hearing on Motion to Dismiss Plaintiff’s 4th Amended Complaint, with prejudice.
Chief Bankruptcy Judge Sarah Sharer Curley, Phoenix, AZ. January 19, 2011.

At the previous hearing on Nov 9 the Court ordered BONY Mellon to produce two things:
(1) the custodial file and
(2) certification that the file has not been altered since 2007.

(1) They produced the custodial file at the hearing. Bailey had an extremely limited opportunity to examine the file, which consists of hundreds of pages. He could not find and did not see the most important page, the signature page of the Note with the disputed stamp thereon. The file was then handed to the judge who found everything to be in order.
(2) They did NOT provide certification that the file had not been altered since 2007.

Bailey, to his chagrin, was unprepared for the possibility that they would produce the file.
He was convinced they would be unable to do so.
So there he was, in the courtroom, trying to think on his feet. He reasonably assumed that there would be a future opportunity to examine the documents, but the judge denied his request for a viewing, on the grounds that Bailey would use the docs to invent “yet another new theory” and further prolong the proceedings. BONY’s counsel sincerely tried on two occasions during the hearing to allow Bailey to see the docs, to no avail. The hearing was simply not the place and no expert was present to authenticate. Bailey also failed to bring up the disputed question of exactly when the endorsement stamp was added to the signature page of the note.*

Bailey was successful however, in bringing up a number of issues which the court instructed BONY to respond to by February 22.

FIRST: They must produce an affidavit stating precisely when and how the loan was added to the CWALT trust. Would this satisfy the certification requirements of (2) above? Maybe.

SECOND: They must produce the fully executed PSA and demonstrate that the single endorsement in blank (belatedly) stamped on the note (from Countrywide Bank to Countrywide Home Loans) did not violate the endorsement and transfer terms of the PSA Section 2:01. The judge opined that a single endorsement in blank was sufficient. Bailey argued that the PSA required that the note be specifically endorsed to the trust, and in fact endorsed and transferred every step of the way, from Originator to Trustee. The Judge thinks not.

THIRD: Bailey pointed out that there is no assignment of the Deed of Trust in the record. Opposing counsel conceded that fact. The court ordered BONY to explain the absence. No pre-petition assignment of the DOT should be fatal. There is NO assignment to date. However, this is Arizona, where MERS** can do anything it likes, so we shall see what they come up with.

Bailey also produced, courtesy of William McCaffrey, loan level evidence from the CWALT trust’s August 25, 2009 monthly report that the Note was not added into the Trust until July 2009. The shut-off date for the Trust was August 1, 2007. Additionally the loan was 14 months delinquent in July 2009. The Judge opined that it was fine for the loan to be added to the Trust at any time, not limited by the shut-off date of the PSA. She did not comment on the fact that the loan was delinquent at the time it was added. She did not order any action on the part of the Defendant.

*BONY has not disputed or denied Bailey’s allegation in his 4th Amended complaint that the stamp was added no earlier than November 9, 2009. Admitted as a matter of law pursuant to Rule 7008. Effect of failure to deny. If the stamp was added to the note no earlier than November, 2009, and yet the loan was added to the Trust in July of 2009, it would seem that something is amiss.
** This judge seems to be a big supporter of MERS.

The hearing was well-attended. A lot of people are watching this case. It was hardly a victory, but Bailey survived an hour of oral argument. In the lobby outside, the opinion was expressed that the missing DOT would prove fatal to the Defendants’ position.

SUPPORT Bailey’s film “COPS ‘n ROBBERS vs THE PEOPLE: The Death and Rebirth of the American Dream”

15 Responses

  1. You just have to hand it to the Ignorant JUDGE!

    The Judge just makes it up as she goes along! “F” the LAW! I WILL ALLOW IT!
    She practically just re-wrote the SEC laws by saying ” I WILL ALLOW IT “.

    Well, theres your APPEAL right there. I suspect this Judge has been over-turned many times!

  2. Greg AZ ATTY Donald Loeb 480 7007 5000 hes my attorney

  3. So, are we all in agreement then, that the likelihood of an apparent bias due to Judges’ investments is most likely materially effecting their impartiality?

  4. FIRST STANDING-RELATED VICTORY IN VIRGINIA: Aurora’s claim to title thrown out for lack of standing!

    PS! I have a securitization case in VA practically identical to Bailey’s, except its a specific endorsement rather than a blank one (so mine is “stronger” 🙂 ). I understand the issues and would be willing to do this pro hac vice, but he still needs to find an AZ attorney.

  5. This judge shows signs of trying to be fair but there’s a fundamental
    problem with many AZ judges that defy common sense and ofcourse the little problem of where their investments are , giving rise to cnflict of interest which as Neil once Pointed out that if they are unaware of this ( which is hard to believe ) then they aren necessarily biased ( Also hard to believe)

  6. I could have sworn there was something in the 5th amendment of the bill of rights that granted every citizen the righ to “due process of law”.

    I think this man has clearly had his 5th amendment viloated by this judge, by not giving him the proper time he required, and requested for reviewing the documents properly, which is granted him by the Bill of Rights!

    Sue the judge on that!

  7. A California Judge said that it “didn’t matter” that on the Trustee’s Deed Upon Sale recorded against the WRONG person it stated:
    “The total amount of the outstanding debt is [Blank]”
    “The total amount of the highest bid paid for at auction is [Blank]”

    Neither did it matter that the Trustee was never the Trustee, nor was it ever Substituted as such EVEN after the fact.

  8. Holy Moly.

    “The Judge opined that it was fine for the loan to be added to the Trust at any time, not limited by the shut-off date of the PSA.”

    Are you kidding me?

    Oh, well, a bad dismissal makes for a good appeal, I always say.

    The PSA is part of a large set of agreements/contracts under which investors have invested money, and filings were made to comply with SEC and IRS rules. No federal judge, no matter how blonde, can say it “doesn’t matter.” Might as well say the Constitution doesn’t matter…..oh, wait……

  9. Anyone pro mers is not getting it

  10. The Judge certainly did a fine job of defending the Defendants. Having said that, each Plaintiff insisted that there was an issue, she would stop, spend several minutes looking at her computer monitor, then order BONY’s counsel to come up with the answer. She seems fair, if biased, if that’s not too much of a contradiction.

  11. I know what the documents in this case must look like. My loan was listed as being in a CWALT, Note and DT altered, allonge with one endorsement in blank, assignment of DT to BONY over 5 years later and after a NOD. All loan docs received from BAC have either no borrowers signatures, forged escrow officers signatures or missing borrowers initials. No proof that the loan was ever in CWALT at all….only the one edorsement with no date…nothing but a blank endorsement. I am going to be watching this case close.
    And how can one say that it doesn’t matter when the mortgage loan is deposited into the trust?? the Pool would be in direct violation of the PSA if it accepted a non preforming loan, as well as keeping a loan that does not have a complete chain endorsement and recordable assignment. At least that is what I am reading the PSA that BONY states my loan was (is) in

  12. I would personally pay for a copy if Dave kriegers clouded titles for one judge in az. Who else is in having said that you can take a horse to water but you can’t make it drink




  14. And she’s a blonde. How bout that

  15. As to being able to fully examine the Custodial File by Bailey…..

    1. Find within the rules of the court to do so and…..point it out to the judge!

    2. If the rules of the court allow, file a Motion for leave with ample time to Review and Object on proper grounds.

    These fast-track issues must be properly argued and not ram-rodded against the people



Contribute to the discussion!

%d bloggers like this: