9th Circuit BAP: HSBC, ASC Not Real Party In Interest, No Standing, MERS Has No Interest


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Fontes-MEMO-9th Ciruit BAP – Judge Jury a Member of the Panel

The collateral benefit MUST go solely to the homeowner. If the creditor chooses not to exercise any right or intention to collect, it is not a license for ANYONE to come in as a third party and make the claim.

“If you don’t want it, we’ll take it” is not a cause of action. Pretender lenders are not entitled to collect on the claim of the real creditor under any theory.


Interesting that the Judges on the panel had previously tossed out expert testimony from me and otherwise ruled against the theories and facts reported on this blog. Now, sitting on an appellate review panel, the same Judges decided that Judge Hollowell should be reversed, but like other favorable decisions, announced that their decision should not be used as binding legal precedent. In other words, they are creeping toward our conclusions, accepting them gradually with a toe in the water to see what happens. The primary new event is that these Judges are no longer giving lip service to the “free house” political argument that was previously made and accepted by pretender lenders. Things are changing! Hold on tight, this ride is not over yet.

Despite the acknowledgment by the Bankruptcy Chapter 13 Petitioner that ASC had a secured claim, the appellate panel said that relying on the Petition is not enough. As we have said repeatedly here on these pages, many lawyers suggest that the Petition be filed such that these issues don’t even arise, thus bolstering at the administrative level in Bankruptcy or the Trial level in civil litigation the argument that the borrower already admitted that this was a secured liquidated claim. The truth is, in my opinion, and in the opinion of many other lawyers and Judges, that the claims being presented in nonjudicial (which is the subject of this Fontes case) and judicial proceedings are neither secured nor liquidated.

Whether you look at the Herrera case, reported earlier, or any of the recent cases we have reported in the last week, you will see very clearly that the courts no longer have the automatic knee jerk prejudice to rule against the homeowner. A bad mortgage is a bad mortgage. The securitizers created these table funded loans with undisclosed lenders and messed up almost everything that was a clerical task. If the end result runs negative to the foreclosers, too bad, they never showed they had any loss anyway (because in fact they had no loss).

The real party in interest is the investor-lender who has chosen NOT to enforce against the homeowner because they don’t want any part of the multitude of affirmative defenses and counterclaims for fraud, predatory lending, statutory violations etc. Instead, they are suing the investment banks who sold them “mortgage bonds” without the mortgages.

The collateral benefit MUST go solely to the homeowner. If the creditor chooses not to exercise any right or intention to collect, it is not a license for ANYONE to come in as a third party and make the claim. “If you don’t want it, we’ll take it” is not a cause of action.

Pretender lenders are not entitled to collect on the claim of the real creditor under any theory.


“Under sec 362(d) only a “party in interest” may seek relief from the operation of the automatic stay from the bankruptcy court.”

In Weisband “the court concluded that MERS did not have constitutional standing and, if MERS did not have constitutional standing, its assignee could not satisfy the requirements of constitutional standing either. Id. see also Wilhelm, 407 B.R. at 404 (discussing validity of MERS’s assignments related tot he note). We do not perceive a different result is warranted…”

“it is axiomatic that HSBC must show that it has both constitutional standing and prudential, or party in interest, standing to bring the motion for relief from stay. Satisfying one standing requirements and not the other is insufficient. See Valley Forge Christian Coll. v Ams. United for Separation of Church and State, Inc. 454 U.S. 464, 474-75 (1982)”

“The only manner in which HSBC links itself to ASC in the record is through its repeated assertions (e.s.) without any reference to any evidence that ASC was its “Servicer.” No further details were given [Editor’s note: nor are further details EVER given, thus the importance of this statement in the case]. Does HSBC mean that ASC was its agent at thet ime fo the debtors’ filing? Or, does HSBC mean it somehow became the sucessor in interest to ASC? The record does not support either theory.”

“The record contains no servicing agreement between ASC and HSBC indicating that ASC was HSBC’s agent, and ASC’s proof of claim did not state it was acting as the agent for HSBC.”

“… the only inference to be drawn from the record is that ASC was acting as the servicer for some other party than HSBC when debtors filed their petition.” [Editor’s Note: The court recognized the shell game and put a stop to it]

23 Responses

  1. @ Barbara. That case kept me up most of the night. It can help homeowners in trying to understand the complex UCC issues–albeit, the understanding is a serious brain exercise.

    Here is a document that the 9th referenced in the Neal case:


    Please notice that this document is a draft. May 28, 2011 was the cutoff date for submitting comments. I am setting up a Google alert to try to catch the final document.

  2. @ Pamela, you wrote:

    Isn’t there a statute of limitations on how many times a lender can come back before something like double jeopardy takes place and there just dismissed as the issue is no longer pertinent, relevant, or logical, or for that matter pursuable?

    While there may not be a statute of limitations per se, except as it pertains to acts of fraud, there is the doctrine of laches, which is an area of law that I have yet to hear Neil or others discuss on this site. It is my belief that laches would and should begin to enter itself into the foreclosure arena as a viable defense. As a matter of fact, it may be the area of law that we can all take together to stop this insult to humanity that is taking place all around us. From Wikipedia:

    Laches is an unreasonable delay pursuing a right or claim…in a way that prejudices the opposing party. When asserted in litigation, it is an equitable defense, or doctrine. The person invoking laches is asserting that an opposing party has “slept on its rights,” and that, as a result of this delay, circumstances have changed such that it is no longer just to grant the plaintiff’s original claim. Put another way, failure to assert one’s rights in a timely manner can result in a claim’s being barred by laches.

    The defense of laches resembles, but is not entirely analogous to a plea that the period of time allowed under a statute of limitations has expired. Laches essentially alleges prejudicial delay and unfairness in the context of a particular situation, whereas statutes of limitation tend to define a specific legally prescribed period of time after the cause of action has accrued; within which a lawsuit for a particular type of cause of action may be commenced or after which the right to recovery is barred.

    The simple fact that in my situation, as I’m sure is the case in many hundreds of thousands or even millions of other cases, years have gone by with no contact from the alleged creditor, and in this time frame, the trail has gone cold….memories fade, documents harder to recall or retrieve…. witnesses such as notaries or even bank personnel moved on and are now unreachable….it all adds up, or better said subtracts from one’s ability to counteract the fraud that is foreclosure.

    From Foreclosure Defenses, by Kendall Coffey | 2008:

    ”Even before the statute of limitations has expired on a foreclosure claim, the lender can, in exceptional circumstances, forfeit the right to foreclose by virtue of delay and resulting prejudice to the borrower that constitutes laches. Laches can arise in the foreclosure context when the mortgagee inexcusably delays in bringing its action, resulting in circumstances making it inequitable to permit the plaintiff to enforce its claim against the defendant.”

    Based on the maxim that equity aids the vigilant and not those who procrastinate regarding their rights; neglect to assert a right or claim that, together with lapse of time and other circumstances, prejudices an adverse party. Neglecting to do what should or could, have been done to assert a claim or right for an unreasonable and unjustified time causing disadvantage to another.

    It matters not to me that Bank of America, Citi, Chase, or Wells Fargo haven’t lawyered up enough, or simply don’t have their foreclosure departments whirring at max speed 24/7 to service all of us deadbeats. Millions of us are being kept in limbo. Why? Because it works out well for them. Shadow inventory dilutes the REO pool to their benefit, not ours.

    Our homes are being kept in the root cellar….they can come and remove them whenever it suits them, and we’ve taken care of these homes during this long drawn out process, at no charge to the banksters. Their (our) homes are fresh and neat, ready for their disposal.

    They are allowed to do this thanks to their predatory chain of command leading all the way up the food, uh….make that the money chain, all of the way up to the oval office to the Commander in Chief of Staff, Bill Daley.

    “….when White House Chief of Staff Rahm Emanuel called a top J.P. Morgan executive to ask for the bank’s support in creating a new consumer-protection agency, the executive–former Commerce Secretary William Daley–said no, according to people familiar with the conversation. His boss believed that sufficient consumer safeguards were already on the books.”

    With someone like Daley running the thought processes of our supreme leader Obama, what kind of chance do we stand? None whatsoever.

    Bottom line people….we aren’t going to be getting any help from our so-called leaders who are firmly entrenched in Bankerland, feeding off of the toss out scraps of Bankergraft. We are witnessing every single day that our elected little piggies have no desire to aid us in the foreclosure fraud that is going on right underneath their noses, and furthermore, they have chosen not to act on the employment disaster that feeds the foreclosure crisis flames. Asleep at the wheel is the only forum acceptable term I can apply to these ….rat bastards….OK, I couldn’t help myself. There are simply no polite words I can use to describe them.

    I foresee a time when we should all file lawsuits asserting laches…..millions of us at once. We need to proclaim a date and all ten million of us facing the inevitable taking of our properties with the full endorsement of our government by parties who are acting fraudulently and without ant legal merit whatsoever, all ten million of us proclaim that our rights will not be taken away any longer.

    We need to assert the doctrine of laches en masses and stand our ground, unwilling to surrender against these common foes. For in my mind, there aren’t any greater enemies of the state and our way of life than these ruthless assholes who have co-opted our regulators, judiciary, legislature, administration, as well as the basic way we have lived since we fought these same rentiers as mere tenants back in the 1700’s. This is the same fight against the same foes for the same issues, all over again. Déjà vu centuries later. The right to keep our God given rights, not government given rights. Life, liberty, and the pursuit of happiness are pretty damned difficult to strive for when one is homeless, jobless, and penniless, wouldn’t you agree?

  3. Nice! I’ll have to put that one in our database as well.

    Meanwhile get your popcorn…..It’s another KingCast Mortgage Movie with Rod Class and Carl Weston!

    Be sure to watch this weekend for the actual conference they have scheduled for 10 am this morning!


  4. Hi Pam,

    We have posted it in several place’s please feel free to post it as well!


  5. The veil of “the Matrix” has been lifted very slightly here, some sunlight let into the cave, and the Revelation of Truth


  6. Hi uprootedone,

    just signed the petition. Have you gotten it on the other foreclosure blogs? I hope it makes a big difference!

  7. to SaveAmericaone,

    I am encouraged to hear settlements are being made in private. Mostly what I read or hear from attorneys that I have interviewed is that you can’t win against the bank. I have no plan on foreclosing just to stay in my home for a year or two, I want to make the bank do some bleeding…I’d be interested in hearing about what kinds of settlements are being made, if you don’t mind sharing. Please let me know if you need my email address for me to learn more. Thanks.

  8. Neil, god damn it.

    “Pretender lenders are not entitled to collect on the claim of the real creditor under any theory.”

    This is the same as I have been saying on Credit Card Debt. It is all ABS. So your god damn credit card company in fact first sold you a credit line and then sold it to an investor.

    Thus, it has been 2 1/2 years since I defaulted on my credit card debt, ignored every piece of paper sent to me from the so called original credit card company – yes that would be Chase, B of A, Cap One – and ignored every piece of paper from Collection Companies, which have now been several. They are all pretender lenders——————–NO?

    Pleae Note they are all Private companies and public companies. What does that really mean??????????????

    It means simply they are a public and private company —that would be BofA, Chase, Citi, stupid collection company name———–they are just business’s.

  9. Roger that, SaveAmericaOne! Resistance is victory!

  10. Ray Quiroz. You are an inspiration.

    G-d Bless

  11. http://www.huffingtonpost.com/2011/06/09/obama-administration-temporarily-penalizes-banks_n_874491.html

    I’m SO SICK of this crap (from article linked above), :

    “Potentially “thousands” of troubled homeowners were denied opportunities to lower their monthly mortgage payments under the administration’s program due to servicer errors and inadequate oversight by Treasury, according to a June 2010 audit by the Government Accountability Office (GAO).”

    WHEN the hell are they going to admit that there ARE NO MORTGAGES???

    NOTHING will get better until they do…EVERYTHING that the administration has done amounts to nothing more than putting band-aids on a dying corpse, and then wonder why things aren’t getting better…and people keep trying to get “loan mods”, and keep getting effed-over…it’s NEVER ENDING!!! It makes me so sick…how long do people have to be tortured until the truth is out there??? How do we get the truth out there??? The media isn’t reporting the truth, and I can only assume it’s because the owners of the station or news outlet is being threatened or paid to stay quiet…or they stand to lose a lot of money if they report the truth.

    And they are STILL foreclosing on our troops…what a total catastrophe…and yet all the newspeople talk about is a Weiner.

    Where or where has the sanity gone…

  12. Mr Neil Garfield

    God Bless you for everything you down to help the american people

    I am a pro-se litigant without any legal experience, money or political connections, at this time I have more chance to overturned the decision by the supreme court who ruled against me and my family in a sub- prime loan that was never secured to begin with, I have paid the mortgage for fourth years and never late, until there was an assignment of the mortgage to GMAC that never existed, and they failed to respond my motion to compel discovery, committed predatory lending practices almost triple my mortgage payments, I am very firm in my pleading against the banks and believed I am going to go forward with your help Mr Garfield I have stopped them three times to foreclose my property and i am steel in my property since October, 2007, when they tried to steal my family home.

  13. Don’t lose heart for the ‘settlements’ are happening in private so do right and protect America One Mortgage At A Time.

  14. uprootedone this is a pro se litigant. Although a Great and commendable effort In my opinion pro se has no chance.

    It is like me trying to remove my own appendix.

    ipetition is the way to go. I will continue to spread the word.

    Convincing Big time Lawyers is the way to go.

    Be Strong and Courageous.

  15. @Pamela – you’re referring to the finality of a “decision on the merits”. Many of the cases we’re currently seeing cited are either decisions or reversals of decisions based on procedural matters that take place prior to actual trials.

  16. Isn’t there a statute of limitations on how many times a lender can come back before something like double jepordy takes place and there just dismissed as the issue is no longer,pertinent,relevent,or logical or for that matter pursuable?

  17. This one is an excellent example of actions by pretenders in non MERs cases as well. It is the examination by the court of the claim to be the party in interest that might be overlooked by many as a basic starting point to determine standing. Judges Bufford, Alley, Curley et seq., have been demanding more than just a claim that FR 17 has been satisfied. Go after their 7.1 and 17 statements, as it is supposed to be the party of interest, when it is much more likely to be a servicer at best, a stranger more likely. One of these days, all the jurists will demand to see the note and the deed that they were handed the original of in the 1950’s.

  18. A good read, but I’m not as sure as Neil that it is a big win for the views and theories of this site. The court mainly had issues with the lower court for relying too heavily on the issues of binding effect of the plan, estoppel, etc. Another small victory, but another situation where the creditor fixes their docs and comes back to try again most likely. And usually the courts are quick to say that the binding effect of the plan and petition preclude later inconsistencies, so it could signify a departure from those ideas. Interesting times indeed…

  19. This is good new for my son, his MERS loan that I have absolute proof of fraud I have given to others to help them over these bloggs and to Lynn Syzmonaik and others is in the ninth Circuit in San Francisco Appeal Court Pro Se. Another win for us Americans. We must all stick together and continue to beat these creeps until the last American is paid back for these crimes. Investors to homeowners to income earners and makers.

  20. A California appeals court handed MERScorp, the operator of Mortgage Electronic Registration Systems, another legal victory by ruling MERS can launch foreclosure procedures even when it lacks possession of a promissory note.

    In its Ferguson v. Avelo Mortgage verdict, the California Second District Court of Appeals refused to accept the plaintiff’s assertion that MERS as nominee of lender lacked possession of the original promissory note. Ferguson argued MERS could not foreclose if it did not hold the note.

    The Court disagreed with that argument after applying findings from another California MERS decision, Gomes v. Countrywide Home Loans.

    Please Please sign out petition!

    We need help here in California!


  21. CONGRATULATIONS NEIL… Go out and have a few margaritas… If you visit Orlando I’ll buy you a great dinner…

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