Federal 6th Circuit in Ohio Court Slaps Down BOA — Homeowner DOES have standing to challenge title and therefore challenge validity of transactions that purport to Transfer the debt, note or mortgage.

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see Opinion+File+Stamped+9.29.14 Slorp v Lerner, Sampson et al

This decision reflects the changing judicial climate in which the courts are taking a closer look at these transactions. They don’t like what they are seeing and in this case, the appellate court practically recommended a RICO action.

The essence of this case is that it enables homeowner, EVEN IF THERE WAS AN ALLEGED DEFAULT, to file defenses or an action for damages and challenge based upon the allegation that the assignment was false. And THAT in layman terms, means that the assignment is just piece of paper that purports to be evidence of a transaction in which the debt, note and mortgage were transferred. If no such transaction exists, then the assignment is void, even if it is recorded, thus opening the door for nullification of the mortgage or at least the assignment.

Hence discovery directed at the actual transaction in which money was paid and delivery of the debt, note and mortgage followed, should now be allowed.

CAUTION: THIS ISSUE MIGHT BE DECIDED LARGELY ON PROCEDURAL GROUNDS WHEN USED AS A DEFENSE. If you have not asked for the documents, correspondence etc. as to the underlying transaction for the loan, the “assignment” or the endorsement, then you will have nothing to impeach the witness or the assignment as an exhibit.

While this is a Federal District case from Ohio, it should be used as very persuasive authority for the reasoning and analysis that the Sixth Circuit Court of Appeals applied. It also highlights why pro se litigants should at least consult with licensed attorneys as to strategy and tactics.

These the important excerpts in my opinion:

“We remand the case to the district court with instructions to permit Slorp to amend his complaint to add a RICO claim.

“Slorp does not attribute his injuries to the false assignment of his mortgage; rather, he attributes his injuries to the improper foreclosure litigation. According to the complaint, Bank of America (through LSR) filed a foreclosure action against Slorp despite its lack of interest in the mortgage; the defendants misled the trial court by fraudulently misrepresenting Bank of America’s interest in the suit; and Slorp incurred damages when he was compelled to defend his interests. If Bank of America had no right to file the foreclosure action, it makes no difference whether Slorp previously had defaulted on his mortgage.2

“The district court in Livonia Properties stated that an individual “who is not a party to an assignment lacks standing to challenge that assignment,” and our Livonia Properties opinion quoted and endorsed that general statement, perhaps inartfully. 399 F. App’x at 102. But we quickly limited the scope of that rule, clarifying that a non-party homeowner may challenge the validity of an assignment to establish the assignee’s lack of title, among other defects. Id. (citing 6A C.J.S. Assignments § 132); see also Carmack v. Bank of N.Y. Mellon, 534 F. App’x 508, 511– 12 (6th Cir. 2013) (“Livonia’s statement on standing should not be read broadly to preclude all borrowers from challenging the validity of mortgage assignments under Michigan law.”). Thus a non-party homeowner may challenge a putative assignment’s validity on the basis that it was not effective to pass legal title to the putative assignee. See Conlin v. Mortg. Elec. Registration Sys., 714 F.3d 355, 361 (6th Cir. 2013); Livonia Props., 399 F. App’x at 102; see also Woods v. Wells Fargo Bank, N.A., 733 F.3d 349, 353–54 (1st Cir. 2013); 6A C.J.S. Assignments § 132 (“The debtor may also question a plaintiff’s lack of title or the right to sue.”).

33 Responses

  1. Rock, had a customer with a house in a crappy zip code that Wells sent him the deed and satisfaction for as soon as he contested.
    this is far from over, counselor.

  2. Consumer Right Defenders, can you provide one case where a homeowner received a financial settlement form a bank and/or free title to their property?

  3. Agreed Deb because thIs fraud was backed by the good faith of taxpayers. The last I heard is that each child in automatically born with $80,000 plus in debt. And the impact of this mess isn’t tallied in. 680 trillion?

  4. There’s a revised edition to Bill Blacks book – best way to rob a bank is to own one. Our kids and great grand kids need to read this book after we give them a huge apology.

  5. tolle, I posted a response but it was blocked.

  6. What lead me to list the tax issue is
    I got to thinking about citi because they were purportedly second lien ( was first money loan tho 85/15) and the TARP money and after considering my circumstances, ( and I’m sure there are many similar ones, to sat the least, which is why I post) it’s a case of fool me once shame on you fool me twice shame on me, we taxpayers are getting the tab- more than once as I see it.
    Heres the link. I could go on – but off topic -I scrutinized my credit report and I don’t think I can stand being fooled 3 times. Thing is what more will I discover- it truly is identity theft and slander of my prior good credit reputation- however I’m not buying into that trap either. I froze all 3 credit reporting. Five dollars to opt out for AZ total 15 dollars to Opt out ! As Aman says ” never again”. So here’s one ” golden goose”( hat tip Louise) just a little one – but there are many little golden gooses they killed,, and It don’t work.


  7. “lawyers forgetfulness”

    Gotta love that one! Priceless!

    Maybe explains our commander-in-chief?

    Deb, just look at the big picture….our dear gov forecloses on us all through GSEs, then sends us a tax bill for the suffering. You couldn’t possibly make this shit up….no one would believe it.

    Only in the US of A.

  8. Folks sorry to get off topic but this may be iMPORTANT to understand to many – my big beef has been the issuance of a 1099a by the servicer who describes themselves as ” lender” well they can’t be in my case, and I have raised this FACT in my case(s) and with the IRS those who have been foreclosed upon wrongfully may like to consider the following and take issue up with a reputable tax accountant.


    “Every time real property is sold or transferred, the IRS must be notified. In a traditional sale of property, the seller will receive a Form 1099-S (Proceeds from Real Estate Transactions) to report the sale of the property to the IRS. This form is used to determine whether there is a gain or loss on the sale of the property. In a short sale or deed in lieu of foreclosure, the seller also receives a 1099-S because the property is sold willingly.
    However, in the case of a foreclosure, no 1099-S is issued because the “sale” is involuntary. Instead, the seller will receive a 1099-A (Acquisition or Abandonment of Secured Property) to report the transfer of the property. The 1099-A reports the date of the transfer, the fair market value on the date of the transfer and the balance of principal outstanding on the date of the transfer. Just like the 1099-S, the 1099-A is used to determine whether there is a gain or loss on the sale of the property.
    Many sellers mistakenly believe that if their property is sold in a foreclosure auction, they will not have any capital gain. This is not always the case. As a result of the adjustments to cost basis in certain situations, there may be a capital gain on property that is sold in a foreclosure auction. This may cause yet another source of unexpected tax liability that the seller is unable to pay.
    Now that short sales have become so common, many sellers understand they may receive a 1099-C (Cancellation of Debt), to report the cancellation of debt resulting from a short sale or deed in lieu of foreclosure. What comes as a surprise to many sellers is that they may receive a 1099-C as a result of foreclosure sale as well. Some sellers believe that if they allow their property to go into foreclosure, they will avoid the tax consequences of the cancellation of debt. However, the tax ramifications are the same for cancellation of debt income, whether it is generated from a short sale, deed in lieu of foreclosure or foreclosure.
    At the time the seller/borrower obtained the loan to purchase or refinance the property, the loan proceeds were not included in taxable income because the borrower had an obligation to repay the lender. When that obligation to repay the lender is forgiven or cancelled, the amount that is not required to be repaid is considered income by the IRS. The lender is required to report the amount of the cancelled debt to the borrower and the IRS on Form 1099-C, when the forgiven debt is $600 or greater.
    There are certain exclusions that can be used to reduce or eliminate the cancellation of debt income from taxable income. This includes discharge of the debt in bankruptcy, insolvency of the seller before the creditor agreed to forgive or cancel the debt, or, if the seller qualifies, relief pursuant to the Mortgage Forgiveness Debt Relief Act (MFDRA).
    To summarize, any sale or transfer of property, whether voluntary or involuntary, must be reported to the IRS. Form 1099-S is used for a traditional sale, short sale or deed in lieu of foreclosure; Form 1099-A is used for a foreclosure. A lender may forgive or cancel debt in any case – where it’s a short sale, deed in lieu of foreclosure, or foreclosure – which will result in the issuance of a 1099-C. ”

    Every time real property is sold or transferred, the IRS must be notified. The seller will receive a 1099-A (Acquisition or Abandonment of Secured Property) to report the transfer of the property. The 1099-A reports the date of the transfer, the fair market value on the date of the transfer and the balance of principal outstanding on the date of the transfer (the balance differs between the Trustee’s Deed of Sale and Form 1099-A). The lender is required to report the amount of the cancelled debt to the borrower and the IRS on Form 1099-C, when the forgiven debt is $600 or greater. There are certain exclusions that can be used to reduce or eliminate the cancellation of debt income from taxable income. This includes discharge of the debt in bankruptcy, insolvency of the seller before the creditor agreed to forgive or cancel the debt, or, if the seller qualifies, relief pursuant to the Mortgage Forgiveness Debt Relief Act (MFDRA).

  9. Ocwen…Hubzu…Alti-source….one in the same. They sent me a Quasi-modification going back, 53 pages, indemnifying everyone from the janitor working at Ocwen to the president of the company, for anything, everything, possible things, imaginary things, related to omissions, defaults, fault, insurance, breaches, unknown liens or encumbrances, potential liens or encumbrances, diligence, lawyers forgetfulness, fees, unknown fees that may occur-after the fact, etc…I just giggled. They couldn’t possibly think “anyone” with an IQ over 22 would sign it?

  10. You’re right Poppy. I’d love to see the bank lobby tapes (actually not), at least the ones showing the bank stooges as they watch the multiple deposits left in real time. What an effort on his part!

    Check out this comment left on a finance forum recently. It makes one want to leave a hefty deposit for Ocwen, if you didn’t already have that desire…….. I guess they figure they can simply rewrite all contract law to suit.


    Even when you do read the fine print, often the only choices you have are doing without, (as in walking away,) or which flavor of K-Y Jelly is used (‘assume the position!’)

    We were investigating a foreclosed property in Hazelhurst, Mississippi. It ended up on Hubzu.com in an auction. Perusing the ‘Purchase and Sale Agreement’ form, we first discovered that the property was being ‘offered’ by Ocwen. Alarm bells went off immediately. Ocwen has a horrible reputation. After a litany of ‘Screw the Customer’ codicils, we stopped dead in our tracks at the “Get Out of Jail Free” card cleverly disguised as Agreement Part 12.5, “Limitation of Liability.” (All capitals in original.)


  11. Charles said
    “But the bigger picture is the entire batch of securitized loans foreclosed already following this open door!”
    This is what stops a jury trial ! Hat tip Charles.

  12. You know ..,as in are you sure you read my pleadings

  13. Concerned did you motion for reconsideration

  14. Unfortunately in MA judges do not care about the truth or validity of a loan. The corrupt Judges ignore the Rules of Law and are allowing these illegal foreclosures to take place. We met the Burden of Proof & had the preponderance of evidence to prove FRAUD & ILLEGAL FORECLOSURE etc and the Judge ignored and made an UNETHICAL JUDGMENT!

  15. To my feeble mind, this is a bout of rare and sensible reasoning….an unusual occurrence, when common sense meets judicial rule. UKG, I had an erection when you posted this case a few days ago….I should have thanked you for the heads up (literally and figuratively).

    This is such basic law, so necessary for taking the tilt out of the slanted tables we’ve all been up against. How many hundreds of thousands….millions, have been tossed to the curb for lack of standing? Lack of standing against obvious fraudulent/forged documents? I know in my own case, the federal judge recited with glee how he forbade me from gaining any ground on an obvious felonious AOM committed by the local mill attorney. Defending oneself wouldn’t be a fraction as hard if we got to play by the same rules as the banksters.

    Now, things would be a whole lot better if all involved would simply come to their senses and realize that anyone assigning a mortgage from a long defunct entity, a clearly illegal setup no doubt, with the sole intention of taking a property that they have no rights to whatsoever….that anyone attempting that feat would be facing the same types of criminal prosecutions the Department of Injustice hands down to little fish in mortgage scams daily. Things would improve 1000 fold overnight.

    Rock, you should be on stage. Only one thing, who would put their hand up your back to mime that crap you come up with? Too funny!

    There’s nothing frivolous about the courts recognizing that borrowers have the right to toss a mortgage assignment if its very existence voids the paper it’s written on. Go back and stroke that brass bull one more time before we come for it, and you. It’s not going to be pretty when the shit hits the fan. By then, you and your kind will not be asked if you’re ready to switch sides. Too late it will be, as Yoda would say. Screwed you are.

  16. What happens in CA when no party holds anything, apparently …
    Cross-Defendant JP Morgan Chase Bank, N.A.’s Motion for Summary Judgment on Party’s First Amended Cross-Complaint for declaratory relief is granted. (Code Civ. Proc., section 437c, subd. (a).)

    A summary judgment motion shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. (CCP § 437c, subd. (c).) A defendant moving for summary judgment meets this burden by presenting evidence showing that one or more elements of the cause of action cannot be established or that there is a complete defense to that cause of action. (CCP § 437c, subd. (p)(2); Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 853.) Once the defendant makes this showing, the burden shifts to the plaintiff to show that a triable issue of material fact exists as to that cause of action or defense. (CCP § 437c, subd. (p)(2); Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at 849.)

    To be valid, a deed must (a) be in writing; (b) name the grantor and grantee; (c) be subscribed by the grantor (Jones v. Coulter (1925) 75 Cal.App.540, 547); and (d) be delivered to and accepted by the grantee. (Meyer v. Wall (1969) 270 Cal.App.2d 24, 27.)

    “Delivery” is a word of well-defined meaning of law. The elements are that the writing must be meant by the maker to take immediate effect and be presumably or in fact, accepted by the other party. The delivery and acceptance are of necessity simultaneous and correlative acts. Reina v. Erassarret (1949) 90 Cal.App.2d 418, 426. “‘A deed takes effect from its delivery, and if delivery is wanting, it is void ab initio.'” Id. (citations omitted). (See also, 3 Miller & Starr, Cal. Real Est. (3d ed.) § 8:41 (“[A] deed that has not been delivered is void and completely ineffective.”)

    The uncontroverted evidence shows that that the Unsigned party Note and the party Deed of Trust remained in the custody of broker’s employee, All Smiles, at brokers’s offices located at NorCAL. [UMFs 1-2, cites to evidence.] The Court notes that the party Deed of Trust provides that after recording it was to be delivered to broker, and not to party, at broker’s office address: NorAL. [cites to evidence]
    On July 30, All Smiles submitted corrections to the deposition testimony to offer new testimony that party “held [the Unsigned party Note] and looked at it for a while.” [cites to evidence] However, Smiles’ deposition testimony that party did not take the file because “he didn’t want it”, was not “corrected”. [cites to evidence]
    Chase objects to All Smiles’ corrections on the grounds that a party may not create a triable issue of fact by offering a declarant’s conflicting sworn statements. (D’Amico v. Board of Medical Examiners (1974) 11 Cal.3d. 1, 22. See also, Archdale v. American Internat. Specialty Lines Ins. Co. (2007) 154 Cal.App.4th 449, 473 [The trial court properly rejected a declaration directly contradicting deposition testimony.])
    Even if All Smiles’ corrections are admissible, they do not establish that there was delivery of the Unsigned party Note and the party Deed of Trust.

  17. A non party homeowner may challange the validity of an assignment to establish the assignees lack of title among Other Defects. That’s IT!

  18. One thing I agree upon is ” the devil is in the details”.

  19. Rock Tnharry, etc………………………………………………….

  20. Rock the Wrenchthrower, what is your stake in this? Bank attorney?

  21. Funny thing Charles. Rock knows exactly what he is not talking about. I heard from a reliable source that you can’t stop the FC but you could delay it for years. Pissed me off! Now if you will excuse me, I have a burial to attend.

  22. Here comes Rock again telling us that these decisions don’t mean anything. However this guy who dealing with a Countrywide originated loan that BOA shown not proof of purchasing the loan, and a MERS coming in do an assignment to BOA by what authority?

    So we got an unknown debtor (Kingpin) and these other separate corporations taking these unwritten commands to work in concert to foreclose on him. So the guy got a point as to how is BOA a party to this action.

    Now how many RICO attorneys outside the Federal Government and NY City are there? Like None! Maybe there is a grandchild to the old Capone gang that could point you to Elliott Nest’s office, but in most these case the Fed Government is involved in Fannie, Freddie and Ginnie that pulling the string.

    So the reason Rock is not seeing these arguments is that there are no bottom feeder attorney practicing foreclosures and real estate attorney bright enough to handle a RICO case against a trillion dollar asset corporation?

    I get it that we are not the sharpest tools dropped out the legal tool shed, but what we got is a take the hill attitude, and hopefully we don’t all get killed trying. But if we don’t charge the hill, we will never take the hill and we got to over come the fear. Rock we pass the point of you coming in here with nothing but to gives us instruction how to tie a white sheet to a pole and surrender. If we are wrong then we going down fighting that battle. Rock I am guessing you never been in the military? We not the rich, but we are the warriors!

  23. Transfer convey and warrant free of liens n encumb. Must defend Title. Defend from sellers estate? Because sellers estate only granted what they had via Trustee Deed w/o Trustee Agreement and NO Warranty Deed. Granny got Snooker Doodled.

  24. Admittly they are rabbit holes, but it goes to show how far they are willing to go. They don’t want the money, they want a FC. That didn’t compute in a simple minded person like myself. Fee Simple.

  25. Since these decisions are not decisions on the merits of the case there is little value in repeatedly posting these types of decisions. Why?Because 99% of the time the homeowner loses their home making these frivolous arguments. At the end of the day, who makes out, some hack that should know better.

  26. The homeowner is the homeowner and is a party to the debt, and that debt is being transferred to attached to the property being the collateral. I would agree that the homeowners are not a party to who the lender can sell the loan too as long as it is another entity that can service the loan as a mortgage lender, but if that assignment is not to a legal successor, then there is an argument to be made.

    BOA is not the party that could be in title as they had no financial interest in the loan while trying to foreclose on Slorp. Now the RICO action is about the Kingpin giving the wink and nod to BOA to take action and those fund would have ended up in other hands through BOA!

    This decision is great because there is RICO activity taken place with the Fannie, Freddie loan s and the Ginnie Mae pooled loans. I would not be surprised if situations is not settled because for Slorp the up side is the industry would want it to go away at the most the cost of the home and the least attorney fees. But the bigger picture is the entire batch of securitized loans foreclosed already following this open door!

  27. There was a Farmer who had a dog named R.I.C.O. R.I.C.O. Taking a Bite out of Crime!

  28. Yom Kippur, For the Fasting People. Have an Easy and fast Fast. May this be the beginning of a good year. Neil Garfield Family and Company “Be Strong and Courageous”


  29. Its the Title Stupid! POAs / Pile Of Asswipes in my book. Just Saying, it Signing Capacity.

  30. Way to Go Ohio! Scratch that one!

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