Self Serving Fabrications: Watch for “Attorney in Fact”

In short, the proffer of a document signed not by the grantor or assignor but by a person with limited authority and no knowledge, on behalf of a company claiming to be attorney in fact is an empty self-serving document that provides escape hatches in the event a court actually looks at the document. It is as empty as the Trusts themselves that never operated nor did they purchase any loans.

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If you had a promissory note that was payable to someone else, you would need to get it endorsed by the Payee to yourself in order to negotiate it. No bank, large or small, would accept the note as collateral for a loan without several conditions being satisfied:

  1. The maker of the note would be required to verify that the debt and the fact that it is not in dispute or default. This is standard practice in the banking industry.
  2. The Payee on the note would be required to endorse it without qualification to you. Like a check, in which you endorse it over to someone else, you would say “Pay to the order of John Smith.”
  3. The bank would need to see and probably keep the original promissory note in its vault.
  4. The credit-worthiness of the maker would be verified by the bank.
  5. Your credit worthiness would be verified by the bank.

Now imagine that instead of an endorsement from the payee on the note, you instead presented the bank with an endorsement signed by you as attorney in fact for the payee. So if the note was payable to John Jones, you are asking the bank to accept your own signature instead of John Jones because you are the authorized as an agent of John Jones.  No bank would accept such an endorsement without the above-stated requirements PLUS the following:

  1. An explanation  as to why John Jones didn’t execute the endorsement himself. So in plain language, why did John Jones need an agent to endorse the note or perform anything else in relation to the note? These are the rules of the road in the banking and lending industry. The transaction must be, beyond all reasonable doubt, completely credible. If the bank sniffs trouble, they will not lend you money using the note as collateral. Why should they?
  2. A properly executed Power of Attorney naming you as attorney in fact (i.e., agent for John Jones).
  3. If John Jones is actually a legal entity like a corporation or trust, then it would need a resolution from the Board of Directors or parties to the Trust appointing you as attorney in fact with specific powers to that completely cover the proposed authority to endorse the promissory note..
  4. Verification from the John Jones Corporation that the Power of Attorney is still in full force and effect.

My point is that we should apply the same rules to the banks as they apply to themselves. If they wouldn’t accept the power of attorney or they were not satisfied that the attorney in fact was really authorized and they were not convinced that the loan or note or mortgage was actually owned by any of the parties in the paper chain, why should they not be required to conform to the same rules of the road as standard industry practices which are in reality nothing more than commons sense?

What we are seeing in thousands of cases, is the use of so-called Powers of Attorney that in fact are self serving fabrications, in which Chase (for example) is endorsing the note to itself as assignee on behalf of WAMU (for example) as attorney in fact. A close examination shows that this is a “Chase endorses to Chase” situation without any actual transaction and nothing else. There is no Power of Attorney attached to the endorsement and the later fabrication of authority from the FDIC or WAMU serves no purpose on loans that had already been sold by WAMU and no effect on endorsements purportedly executed before the “Power of Attorney” was executed. There is no corporate resolution appointing Chase. The document is worthless. I recently had a case where Chase was not involved but US Bank as the supposed Plaintiff relied upon a Power of Attorney executed by Chase.

This is a game to the banks and real life to everyone else. My experience is that when such documents are challenged, the “bank” generally loses. In two cases involving US Bank and Chase, the “Plaintiff” produced at trial a Power of Attorney from Chase. And there were other documents where the party supposedly assigning, endorsing etc. were executed by a person who had no such authority, with no corporate resolution and no other evidence that would tend to show the document was trustworthy. We won both cases and the Judge in each case tore apart the case represented by the false Plaintiff, US Bank, “as trustee.”

The devil is in the details — but so is victory in the courtroom.

NJ: GAME OVER — STANDING REQUIRED — NO PRETENDER LENDERS ALLOWED — PERSONAL KNOWLEDGE REQUIRED TO AUTHENTICATE

ONE ON ONE WITH NEIL GARFIELD ONE ON ONE WITH NEIL GARFIELD

COMBO ANALYSIS TITLE AND SECURITIZATION

BORROWER APPEARED PRO SE

GAME OVER: EVIDENCE REQUIRED, NOT PRESUMPTIONS

EVEN IF HOLDER, THEY ARE NOT HOLDER IN DUE COURSE; DEFENSES APPLY

SEE 01.28.2011 NJ CT OF APPEALS REVERSE NO STANDING -WELLS-FARGO-BANK-N-A-As-Trustee-Respondent-V-SANDRA-a-FORD-Appellant[1]

NOTABLE QUOTES:

This appeal presents significant issues regarding the evidence required (E.S.) to establish the standing of an alleged assignee of a mortgage and negotiable note to maintain a foreclosure action.

Wells Fargo claims that it acquired the status of a holder in due course as a result of this assignment and therefore is not subject to any of the defenses defendant may have been able to assert against Argent.

Wells Fargo asserted that Argent had assigned the mortgage and note to Wells Fargo but that the assignment had not yet been recorded.

Wells Fargo subsequently filed a motion for summary judgment. This motion was supported by a certification of Josh Baxley, who identified himself as “Supervisor of Fidelity National as an attorney in fact for HomEq Servicing Corporation as attorney in fact for [Wells Fargo].”

Baxley’s certification stated: “I have knowledge of the amount due Plaintiff for principal, interest and/or other charges pursuant to the mortgage due upon the mortgage made by Sandra A. Ford dated March 6, 2005, given to Argent Mortgage Company, LLC, to secure the sum of $403,750.00.” Baxley did not indicate the source of this purported knowledge. Baxley’s certification also alleged that Wells Fargo is “the holder and owner of the said Note/Bond and Mortgage”

The documents defendant alleged were forgeries included a purported handwritten note by her stating that she was employed by Bergen Medical Center at a monthly salary of $9500, even though her actual income was only approximately $10,000 per year.
Defendant also alleged that “[t]he estimate for closing fees that was given to me prior to closing was around $13,000.00 and the Good Faith Estimate of Closing Costs was for $13,673.90 but on the closing statement they were $36,259.06.”

On appeal, defendant argues that (1) Wells Fargo failed to establish that it is the holder of the negotiable note she gave to Argent and therefore lacks standing to pursue this foreclosure action; (2) even if Wells Fargo is the holder of the note, it failed to establish that it is a holder in due course and therefore, the trial court erred in concluding that Wells Fargo is not subject to the defenses asserted by defendant based on Argent’s alleged predatory and fraudulent acts in connection with execution of the mortgage and note; and (3) even if Wells Fargo is a holder in due course, it still would be subject to certain defenses and statutory claims defendant asserted in her answer and counterclaim.

We conclude that Wells Fargo failed to establish its standing to pursue this foreclosure action. Therefore, the summary judgment in Wells Fargo’s favor must be reversed and the case remanded to the trial court. This conclusion makes it unnecessary to address defendant’s other arguments.

we note that Wells Fargo argues in its answering brief that “[defendant] is estopped to contest Wells Fargo’s standing”; “defendant’s brief exceeds the scope of this appeal,” and “[defendant’s] arguments are counterintuitive.” These arguments are clearly without merit and do not warrant discussion. R. 2:11-3(e)(1)(E).
“As a general proposition, a party seeking to foreclose a mortgage must own or control the underlying debt.” Bank of N.Y. v. Raftogianis, ___ N.J. Super. ___, ___ (Ch. Div. 2010) (slip op. at 3). In the absence of a showing of such ownership or control, the plaintiff lacks standing to proceed with the foreclosure action and the complaint must be dismissed. See id. at ___ (slip op. at 35-36).1

If a debt is evidenced by a negotiable instrument, such as the note executed by defendant, the answer to this question is governed by Article III of the Uniform Commercial Code (UCC), N.J.S.A. 12A:3-101 to -605, in particular N.J.S.A. 12A:3-301. See generally Raftogianis, supra, ___ N.J. Super. at ___ (slip op. at 3-8). N.J.S.A. 12A:3-301 states in pertinent part:
“Person entitled to enforce” an instrument means [1] the holder of the instrument, [2] a nonholder in possession of the instrument who has the rights of the holder, or [3] a person not in possession of the instrument who is entitled to enforce the instrument pursuant to [N.J.S.A.]12A:3-309 or subsection d. of [N.J.S.A.] 12A:3-418. [EDITOR’S NOTE: A KEY POINT NOT RAISED BY THE HOMEOWNER NOR DISCUSSED BY THE COURT IS THAT ARGENT DID NOT LOAN THE MONEY CONTRARY TO REPRESENTATIONS AT CLOSING. THEREFORE THE DEBT IS NOT EVIDENCED BY A NEGOTIABLE INSTRUMENT. HENCE THE PREMISE OF THIS COURT AND ALL COURTS IS WRONG. THE DEBT IS NOT EVIDENCED BY ANY WRITING BUT IT STILL EXISTS. SINCE THE NOTE DOES NOT DESCRIBE THE DEBT IT DESCRIBES A NON-EXISTENT TRANSACTION. THUS THE MORTGAGE SECURING THE DEBT REFERENCED IN THE NOTE SECURES A FICTITIOUS TRANSACTION AND IS SUBJECT TO QUIET TITLE]

N.J.S.A. 12A:3-201(b) provides in pertinent part that “if an instrument is payable to an identified person, negotiation requires transfer of possession of the instrument and its indorsement by the holder.”

Therefore, even if Wells Fargo had presented satisfactory evidence that it was in “possession” of the note executed by defendant (which is discussed later in this opinion), Wells Fargo admittedly presented no evidence of “its indorsement by [Argent].” Therefore, Wells Fargo was not a “holder” of the note within the first category of “person entitled to enforce” an instrument under N.J.S.A. 12A:3-301. See Raftogianis, ___ N.J. Super. at ___ (slip op. at 6).

the question is whether Wells Fargo presented adequate evidence that it fell within the second category of “person entitled to enforce” an instrument under N.J.S.A. 12A:3-A-3627-06T1 301; that is, “a nonholder in possession of the instrument who has the rights of a holder.”

Transfer of an instrument occurs “when it is delivered by a person other than its issuer for the purpose of giving to the person receiving delivery the right to enforce the instrument.”

the documents that Wells Fargo relied upon in support of its motion for summary judgment to establish its status as a holder were not properly authenticated. A certification will support the grant of summary judgment only if the material facts alleged therein are based, as required by Rule 1:6-6, on “personal knowledge.” See Claypotch v. Heller, Inc., 360 N.J. Super. 472, 489 (App. Div. 2003). Baxley’s certification does not allege that he has personal knowledge that Wells Fargo is the holder and owner of the note. In fact, the certification does not give any indication how Baxley obtained this alleged knowledge. The certification also does not indicate the source of Baxley’s alleged knowledge that the attached mortgage and note are “true copies.”

Furthermore, the purported assignment of the mortgage, which an assignee must produce to maintain a foreclosure action, see N.J.S.A. 46:9-9, was not authenticated in any manner; it was simply attached to a reply brief. The trial court should not have considered this document unless it was authenticated by an affidavit or certification based on personal knowledge. See Celino v. Gen. Accident Ins., 211 N.J. Super. 538, 544 (App. Div. 1986).

On the remand, defendant may conduct appropriate discovery, (e.s.) including taking the deposition of Baxley and the person who purported to assign the mortgage and note to Wells Fargo on behalf of Argent.

for the guidance of the trial court in the event Wells Fargo is able to establish its standing on remand, we note that even though Wells Fargo could become a “holder” of the note under N.J.S.A. 12A:3-201(b) if Argent indorsed the note to Wells Fargo even at this late date, see UCC Comment 3 to A-3627-06T1 N.J.S.A. 12A:3-203, Wells Fargo would not thereby become a “holder in due course” that could avoid whatever defenses defendant would have to a claim by Argent because Wells Fargo is now aware of those defenses. See N.J.S.A. 12A:3-203(c); UCC Comment 4 to N.J.S.A. 12A:3-203; see generally 6 William D. Hawkland & Larry Lawrence, Hawkland and Lawrence UCC Series [Rev.] § 3-203:7 (2010); 6B Anderson on the Uniform Commercial Code, supra, § 3-203:14R. Consequently, if Wells Fargo produces an indorsed copy of the note on the remand, the date of that indorsement would be a critical factual issue in determining whether Wells Fargo is a holder in due course.




Signors in Fabricated Documentation reported

This is an example of the information I am requesting that everyone send in so we can pool information. I am entering the names and parties in key words so you can search for them. My goal with HERS is to have an ever increasing database that will speed the research for forensic analysts and lawyers.

The following six orders by Judge Arthur M. SCHACK, of King, should be of interest:

American Brokers Conduit v ZAMALLOA, Judge Arthur M. SCHACK, Kings, Index No. 07206/2007 (11 Sep 2007)
In American Brokers Conduit v ZAMALLOA, on September 11, 2007, Judge SCHACK denied an application for a judgemnt of foreclosure and sale of a Kings County property without prejudice due to the plaintiff’s lack of standing.  The plaintiff American Brokers Conduit instituted suit on February 28, 2007, but did not receive an interest in the mortgage which is subject of the suit until a March 5, 2007 assignment (CFRN 2007000169450).  This case is a little bizarre in that American Brokers Conduit seems to have assigned the mortgage to ITSELF at a different address in Melville, New York.  The case does have a good discussion of the case authority requiring a plaintiff to have standing.
American Brokers Conduit v ZAMALLOA, Judge Arthur M. SCHACK, Kings, Index No. 07206/2007 (28 Jan 2008)
In American Brokers Conduit v ZAMALLOA, on January 28, 2008, Judge SCHACK denied an application for an order of reference due to the plaintiff’s failure to include an affidavit of merit by the party.  Rahter than having an officer of American Brokers Conduit execute the affidavit of merit, the plaintiff submitted an affidavit of merit excuted by a Robert HARDMAN, who identified himself as Vice President of Mortgage Electronic Registration Systems, Inc. (MERS).
Aurora Loan Services, LLC v SATTAR, Judge Arthur M. SCHACK, Kings, Index No. 15208/2007 (09 Oct 2007)
In Aurora Loan Services, LLC v SATTAR, Judge SHACK denied an application for an order for service by publication and dismissed the complaint by Aurora Loan Services, LLC, due to the plaintiff’s lack of standing.  The plaintiff pled a promissory note and mortgage iin which the promissory note was in favor of First Magnus Financial Corporation and the mortgage was recorded in favor of MERS.  Judge SCHACK notes that there is no evidence whatsoever within the record that the mortgage was assigned in favor of the plaintiff and notes that no such mortgage assignemnt was either pled or recorded.  Judge SCHACK goes on to note that First Magnus Financial Corporation had gone out of business in AUgust 2007 and filed for bankruptcy on August 21, 2007.  The opinion then contains a thorough discussion of the case authority requiring a plaintiff to have demonstrable standing in order to be eligible to maintian a suit.  In addition to dismissing the suit, Judge SCHACK also cancelled the notice of pendency.  Judge SCHACK also found the original complaint and suit to be frivolous, but declined to impose sanctions upon the law firm filing the suit because it was the first instance that the Court had noted such conduct.
Bank of NY NA v OROSCO, Judge Arthur M. SCHACK, Kings, Index No. 32052/2007 (19 Nov 2007)
In Bank of NY NA v OROSCO, Judge SCHACK denied an application for an order of reference due to the plaintiff’s failure to demonstrate ownership of the mortgage for the subject property.  The plaintiff pled an assignment from MERS to Bank of New York dated August 21, 2007, but Judge SCHACK noted that this assignment had never been recorded.  But Judge SCHACK went on to note that Bank of New York also pled an affidavit executed by a person who is identified as Keri SELMAN.  Judge SCHACK notes that while in her affidavit in the OROSCO case she identified herself as an Assistant Vice President for Bank of New York, in another case before Judge SCHACK Keri SELMAN had signed an affidavit identifying herself as a Vice President of “Countrywide Home Loans, Attorney in Fact for Bank of New York”.  Judge SCHACK ordered that Ms. Keri SCHACK furnish an affidavit describing her employment history for the previous three years. [In point of fact, this would seem to be Keri or Kerri L. SELMAN (b 26 Aug 1969 – Los Angeles, CA), formerly Keri Lynn ATWOOD, of McKinney, Texas.  She seems likely to be an employee of Countrywide, which has a large servicing facility near where Ms. SELMAN lives.]
Deutsche Bank v CASTELLANOS, Judge Arthur M. SCHACK, Kings, Index No. 22375/2006 (11 May 2007)
In Deutsche Bank v CASTELLANOS, on May 11, 2007, Judge SCHACK denied an application for a judgment of foreclosure and sale due to the plaintiff’s lack of standing.  Judge SCHACK noted that the foreclosure was commenced in July 2006 by Deutsche Bank.  After obtaining an order of reference (November 16, 2006) and after preparing an affirmation of regularity (January 10, 2007) and during the pendency of the action, Deutsche Bank seems to have assigned the mortgage to MTGLQ Investors, L.P. on January 19, 2007 (recorded February 7, 2007). Judge SCHACK therefore denied the plaintiff’s application for a judgment of foreclosure and sale without prejudice expressly inviting the Plaintiff to amend its pleadings to appropriately to correct the identity of the plaintiff. Judge SCHACK cites Gretchen Morgenson’s April 6, 2007, New York Times article “Fair Game; Home Loans: A Nightmare Grows Darker” in his opinion.
Deutsche Bank v CASTELLANOS, Judge Arthur M. SCHACK, Kings, Index No. 22375/2006 (14 Jan 2008)
In Deutsche Bank v CASTELLANOS, on May 11, 2007, Judge SCHACK denied a renewed application for a judgment of foreclosure and sale due to the plaintiff’s lack of standing (see case above).  He noted that the defects identified within his May 11, 2007, order remained unaddressed.  In addition, he noted the presence of a affidavit of merit executed by a Mr. Jeff RIVAS, who was identified as Deutsche Bank’s “Vice President Default Timeline Management”.  He then notes the presence of mortgage assignment within the files executed the same date which identifies Mr. Jeff RIVAS as the “Vice President Default Timeline Management” for Argent Mortgage Company, LLC, the assignor of a the mortgage to Deutsche Bank.  Judge SCHACK points out that if Mr. RIVAS was acting as an officer of both the grantor and the grantee of the assignment that this would create a conflict rendering the conveyance VOID.  Judge SCHACK then directs that Mr. RIVAS’ employment history be clarified in any future application for a foreclosure order.  Judge SCHACK then goes on to note that Deutsche Bank and MTGLQ Investors, L.P. are also shown to share the same address at 1661 Worthington lioad, Suite 100, West Palm Beach, where suspicious transactions executed by one Scott ANDERSON seem to be occuring.  Judge SCHACK then also demands an explanation as to WHY so many corporations seem to be sharing the SAME suite in West Palm Beach.

Judge Arthur M. SCHACK is a Justice of the Supreme Court of New York for King County. [See http://www.nycourtsystem.com/Applications/JudicialDirectory/Bio.php?ID=7029077 ]
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