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SEE LIVINGLIES LITIGATION SUPPORT AT LUMINAQ.COM

INDUSTRY PRACTICES DO NOT OVERRIDE THE REQUIREMENTS OF LAW

Submitted by Ron Ryan, Esq. , Tucson, Az

SUMMARY OF LINDA DIMARTINI TESTIMONY
Linda DeMartini worked for 10 years for Countrywide Home Loans Servicing, LP (“CHLS”) and BAC after it took over all CHLS’s servicing and other business. She worked as: Customer Service Representative; Supervisor; Trainer; Training Developer; Manager of Policies and Procedures Writers; Communications leader; Senior Team Leader; and at the time of the testimony she was the number 3 Officer in Charge of the Litigation Unit.
She testified that she had personally seen the “original note” in the “original loan file” of BAC in Simi Valley. Pursuant to standard procedures there was no endorsement on the original note although there was room at the end of the note for it to be placed thereon.
She also testified that pursuant to standard customary procedures, the allonge that allegedly transferred the note to the Trust was prepared several weeks before the hearing specifically for the hearing at the request of CHLS’s attorneys. This was the only document she could provide that purported to be a negotiation and physical transfer of any documents to the Trust. The allonge was not attached to the Note. She also said that the original Allonge, after the court hearing, would have been placed back in the Countrywide loan file. At the hearing the Judge said that this inandof itself established that CHLS could not be a holder in due course, and would have to prove its case without the benefits of negotiable instruments law.
Ms. DeMartini also testified based upon PERSONAL KNOWLEDGE that it was standard operating procedure that everytime Countrywide originated a loan intended for securitization with servicing rights retained by Countywide, the ORIGINAL NOTE WAS ALWAYS kept in the loan origination file in Countrywide’s Simi Valley office. On the other hand, in cases where Countrywide sold the note with servicing rights released then and only then would Countrywide transfer and deliver the note to the new servicer.
On direct examination, DeMartini testified that it was “not the custom for the notes to go the investors but for the original notes to stay with us [Countrywide].” She also testified that Countrywide “had possession of the original documents [in Kemp} from the outset” and up to an including the day of the hearing. She also clearly testified that Countrywide transferred the “rights” to the Trust, but not “the physical documents,” without any testimony or knowledge as to how said transferred occurred, She also testified that this “was standard operating procedure in the mortgage business.” Immediately, the Judge stated that regardless of whether it was standard operating procedure, such practices are invalid under the law pursuant to the UCC.
The judge gave CHLS more time to try to establish ownership of the Trust by the transfer without negotiation exception or pursuant to the Pooling and Servicing Agreement, pursuant to some hypothetical special provision in the PSA the existence of which neither Demartini, CHLS’s attorney, nor the Judge had any idea could be found. But because the Note had never left possession of CHLS, as was standard operating procedure in all cases, the transfer without negotiation exception would obviously not
work.1 Additionally, as was made firmly clear by Kemp’s attorney at the hearing, the PSA would be of no help, because it states what everyone knowledgeable in the field knows to be the case, it is impossible for the originator to transfer a note directly to the Trust. They all require that the note be physically transferred from the originator to the sponsor, from the sponsor to the depositor, and from the depositor to the trust, with all intervening endorsements, after which the the Trustee delivers the note and other documents to the custodian for the Trust. Moreover, the loan related to a Trust that was formed and closed out in 2006. Evidence in the form of a fabricated allonge or any other form of transfer documentation created in 2009 cannot under any circumstances transfer to loan to such a trust in 2009, nor be backdated.

Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: bankruptcy, borrower, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, fraud, investors, lost note, rescission, securitization, trustee |