The West Coast Radio Show with Charles Marshall: California’s revised Homeowner Bill of Rights still offers Homeowner Protections

Thursdays LIVE! Click in to the:

The West Coast Foreclosure Show with Charles Marshall

Or call in at (347) 850-1260, 6pm Eastern Thursdays

Attorney Charles Marshall will discuss California’s Homeowner Bill of Rights today on the West Coast Foreclosure Show.

Loan servicers and banks have tried to convince Californians that California’s Homeowner Bill of Rights has been repealed effective on Jan. 1, 2018.   However, this is not completely true.  Only parts of the HOBR will be repealed and the Consumer Financial Protection Bureau’s Loss Mitigation Rules still apply.

Sections of the HOBR are being replaced by new rules that go into effect on January 1st, 2018.  Some of the new rules can actually cause compliance issues for loan servicers.

The new rules referred to as “HOBR II” remove no longer distinguishes between servicers conducting more or less than 175 annual servicers.   Civil Code Section 2923.55 will no longer be applicable in 2018, and is replaced with Section 2923.5 that defines all pre-Notice of Default (pre-NOD) contact requirements for Servicers of all sizes.

Although these two statutes are similar, the differences are for the written notice regarding service-members and the statement that borrowers can request a copy of the note, deed of trust, assignment, or payment history starting in 2018 will no longer be required.

The provisions in Section 2923.6 that prohibited dual tracking is replaced by Section 2924.11, which prohibits recording a notice of sale or conducting a foreclosure sale upon receipt of a “complete application for a foreclosure prevention alternative.” In the past, loan servicers were required to stay foreclosure proceedings upon receipt of a completed loan modification application.  Beginning in 2018, the dual tracking prohibition is expanded and now applies to all applications for all foreclosure prevention options.

Section 2924.11 currently does not require an appeal period following a written denial. Instead, the denial of a first lien loan modification application will state “with specificity” the reasons for the denial of the modification and will include a statement that the borrower may obtain additional information regarding the denial decision upon written request to the mortgage servicer. Interestingly, Section 2924.11 does not prohibit recording a Notice of Default when there is a pending complete foreclosure prevention alternative but the CFPB rules do.

Old Section 2923.6(g) allowed servicers to refuse to review multiple loan modification applications that did not involve a “material change in financial circumstances.” That provision was very vague, but was useful to loan servicers who could reject an application by denying that there was a material change in the homeowner’s financial circumstances.   Fortunately, that provision is gone at the end of the year and there is no replacement.

Servicers must now review multiple applications from the homeowner, regardless of whether there is a “material change in financial circumstances”.   However, this provision allows a servicer who finds itself in trouble with an issue of multiple applications an alternative.

Section 2923.7 remains the same as before, and requires that the servicer provide a single point of contact,  to communicate with the homeowner about the loss mitigation options and the application process, obtain documents, notify the borrower of any missing documents, and to provide access to information that accurately informs the homeowner of the current modification status.  This section applies to servicers who conduct more than 175 foreclosures annually.

Section 2924.10 expires, meaning servicers are no longer required to provide a written acknowledgment within five business days of receiving loan modification documents.  However, the CFPB rules still require an acknowledgement letter within five business days.

Under Section 2924(a)(5) Servicers and foreclosure trustees will no longer have to provide notice to the homeowner when a sale is postponed more than 10 business days.

Section 2924.12 allows a private right of action for homeowners to enforce HOBR, but it will now only apply to material violations of “sections 2923.5, 2923.7, 2924.11, 2924.17.”  The homeowner is only allowed injunctive relief prior to the Trustee’s Deed Upon Sale recording.

After the servicer records the Trustee’s deed, it is potentially liable for actual economic damages resulting from a material violation of the covered sections and, if those material violations are considered “intentional or reckless, or resulted from willful misconduct by a mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent,” the greater of treble actual damages or $50,000. This section allows for attorney’s fees for the homeowner if they prevail.

Section 2924.17 remains in effect, and states that all servicers, regardless of size, prior to recording or filing a declaration pursuant to section 2923.5, including a notice of default, notice of sale, assignment of deed of trust, substitution of trustee, or a declaration or affidavit in court relative to a foreclosure proceeding, must declare that it has reviewed reliable and credible evidence that substantiates the homeowner’s default and the right to foreclose.  This provision includes the borrower’s loan status and loan information, but some government enforcement provisions also expire at the end of 2017.

Servicers will be challenged to handle completed modification packages that are received shortly before a foreclosure sale, but must comply with the new HOBR sections that require that all foreclosure actions must stop when a complete foreclosure application is received.  However, the new HOBR sections do not directly address what happens when a servicer receives a complete loan modification application minutes or hours before a foreclosure sale occurs.

Because the new HOBR extends the dual-tracking restriction on all preventative foreclosure alternatives, not only to loan modifications, the homeowner is afforded options they didn’t have previously.  Homeowners should keep detailed notes regarding the actions of their loan servicers, and document every transaction and conversation when applying for a loan modification.

To Contact Charles Marshall:

Charles Marshall, Esq.
Law Office of Charles T. Marshall

California Attorney Patricia Rodriguez: Litigation of Possession of Real Property & Unlawful Detainer In California

By Patricia Rodriguez, California Attorney at Law

The Plaintiff (the bank in an unlawful detainer) must prove three issues: (1)the defendant is still in possession, (2) the defendant was properly served with three day notice to quit and (3) the plaintiff has a duly perfected security interest.

You can request a temporary restraining order or preliminary injunction either before the sale takes place or within the unlawful detainer, but you must be able to show a likelihood of success on the merits, exigent circumstances, and irreparable harm.

A temporary restraining order provides a temporary stop and prevents the selling of the home, while a preliminary injunction is a permanent restraint from selling the home for the duration of ongoing litigation.

After the unlawful detainer complaint is filed, then it must be personally served. Upon personal service or an order to post and mail the defendant (homeowner), the defendant has five days to respond to the complaint. Unknown occupants who want to make a claim for possession must file and serve a prejudgment claim of possession within ten days of service of the complaint.

If service of the complaint is not proper, then the defendant’s may file a motion to quash. A motion to consolidate, in a title action, can also be filed to bring the title action and unlawful foreclosure claims together, stopping the eviction (unlawful detainer).  A bond may be required for this action, a temporary restraining order or preliminary injunction.
Once a defendant(s) responds to the complaint via demur then the court will likely order defendants to answer the complaint within 5 days at the demur hearing. Once an answer is filed, Plaintiff(s) will file a request for a trial to be set. Defendants may file a counter-request asking for a jury trial within five days of the original request to set the case for trial.
At trial, if a judgment is rendered for Plaintiffs, then the defendants will have to appeal within 30 days and can also file a motion to stay the judgment pending the appeal. If the stay is denied then defendants may take a writ to the order to deny the request for a stay. The writ is successfully granted on many occasions.

In Wedgewood v. Brown-Wilson (California), the Court reversed a trial court because Plaintiff failed to provide duly perfected title as mandated by CCP Section 1161 and a trustee’s deed upon sale is not prima facie evidence of a duly perfected title contrary to previous holdings in the appellate division. Riverside – is not published so it is not persuasive case law.

For a Free Consultation contact:
Patricia Rodriguez, Esq.

626-888-5206
Lead Attorney/Chief Executive Officer
Rodriguez Law Group, Inc.

California Foreclosure Process Overview

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By Patricia Rodriguez, Attorney

The process of foreclosure defense begins with pre-litigation (gathering all of the necessary information); once that is accomplished then Litigation of Real Property Ownership/Title in California can occur. First you must file the complaint. Questions to pose are when to file, what to write, what to file, and how to file. You want to file asap so that you do not miss any statute of limitations.

It is recommended that you use a checklist of possible causes of actions. Compare your facts to the checklist and build your complaint from there. You must include with your filed complaint, a summons, civil case cover sheet, attachments, complaint, complaint verification page, and the complaint exhibits. You will want to determine if you should file in Federal or State Court. You will also want to determine which court, based on jurisdictional issues.

Once a complaint is filed you can seek a temporary restraining order and a preliminary injunction to stop a sale of the property. The court may require you to put  upa bond to be granted such an order. Temporary restraining orders are temporary until an order to show cause hearing can be had on the matter. The court will look to see if there has been proper notice, exigent circumstances exist, and if Plaintiff has a likelihood of succeeding on the merits of the case.  The court will not look favorably on a party that waits until the last minute to seek such an order and may conclude any exigent circumstances that exist, are due to Plaintiff’s failure to bring the request sooner and deny it on that basis alone.

Once the case is filed, an analysis should be done to determine whether or not to record a Lis Pendens which is a two-page document which attaches the lawsuit over the title to the property; thus, when it’s sold at a trustee sale date, no one but the bank will buy the lawsuit –and the bank must buy it back. There can not be a bona-fide purchaser because everyone is on record of the notice of the lawsuit. The lis pendens should only be recorded if there are real property issues and if there is a likelihood of success on the merits. The defendants will likely file a motion to expunge the lis pendens and if its not voluntarily withdrawn the court may award attorneys fees and costs to the defendants who had to bring the motion to expunge. In order for the motion to expunge to be granted but attorneys fees and costs to be denied the Plaintiff must show that it had substantial justification in recording and maintaining the lis pendens.

To contact Patricia Rodriguez (if located in California), please call 626-888-5206.

The Rodriguez Law Firm: http://www.attorneyprod.com/

For a free consultation, fill out the contact form: http://www.attorneyprod.com/contact.html

This article is not legal advice, but for educational purposes only.

Attorney Patricia Rodriguez: California Foreclosure Overview

Attorney Patricia Rodriguez has been defending homeowners from wrongful foreclosure for over a decade.  Located in Los Angeles, California, Ms. Rodriguez has been appointed to serve as a legal expert and provider of expert testimony on unlawful detainers and foreclosures in Los Angeles Superior Court.  She has been on the foreclosure forefront since the housing market crashed, and recognizes the legal strategies most-likely to gain traction, while avoiding arguments that have been proven ineffective.
Ms. Rodriguez provided the following overview of California foreclosure law.  Click here to contact the Rodriguez Law firm, or set up a free consultation.
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California Foreclosure Law Overview

By Attorney Patricia Rodriquez

 

The Process of Non-Judicial Foreclosure In California begins with the Notice of Default (NOD): The Bank is giving the Homeowner notice that according to the Bank Homeowner owes the bank and hasn’t paid. This can be recorded after 90 days straight of non payment.
The Notice of Trustee Sale (NoTS): This is notice to the Homeowner that the bank is electing to sale the property under the allege authority of the Deed of Trust using the power of sale clause. This can be recorded 90 days after the NOD. The bank must set the sale out at least 21 days from the date of the NofTS.
The Trustee Sale Date: This is the actual date of the sale. The Trustee’s Deed Upon Sale is what is recorded after the sale is conducted. It can be sold to a third party or revert back to the alleged beneficiary (who claims the right to sell it under the Deed of Trust power of sale clause).
Delaying Trustee Sale Dates can be done through filing a bankruptcy (although it is not appropriate if this is the sole purpose of the bankruptcy and not restructuring or liquidating the debt)., litigation and recording a lis pendens, a restraining order, and informal negotiations with the bank directly.
Advertisements of Trustee Sale Delays – lots of companies advertise through the mail they can postpone sales. Be cautious as these can be companies that will deed of a percentage of your deed of trust to others and then file bankruptcy for that other individual(s) and then include your property in that bankruptcy. This is bankruptcy fraud and can cause you significant harm ultimately.

THE TRANSFERRING OF SERVICING RIGHTS TO AVOID REVIEWING COMPLETE MODIFICATION APPLICATION

 

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To listen to Patricia Rodriguez discuss the latest foreclosure defense issues please visit the Neil Garfield Show here and here.

By Patricia Rodriguez, Esq.

Nothing in this article is meant to be construed as legal advice; there is no attorney-client relationship that is being created. This is for general education purposes only. 

After years of litigating against alleged lenders, investors, servicers, and foreclosure trustee’s we are starting to see a clear trend of the servicing rights being transferred upon receiving a complete loan modification application. What is an alleged lender – this is usually the party that claims to have funded the original loan or the originator.

The alleged investors are those who claim to have received an ownership interest in the loan through an assignment and endorsements or multiple assignments and endorsements. The foreclosure trustee in non-judicial foreclosure states such as California are entrusted with overseeing the foreclosure process. The servicers are entities that claim a right to collect payments, modify the loan, etc. as agents of the principals (lender or investor). The servicer’s, through an agreement with these other entities, claim to have the right to enforce the note on behalf of the principal (lender or investor).

The servicer can start as one entity in the Deed of Trust and be changed by a simple letter from the original servicer to the borrower advising them that there is a new servicer. The borrower typically has agreed to such in the Deed of Trust. It is generally this servicer that the borrower or the borrower’s representative is negotiating with in order to conduct a short sale, short pay, cash for keys settlement, reinstatement, forbearance, and/or modification. The servicer could stay the same the life of the loan or switch anywhere from 1 to 10 times.

Each time the servicer changes the new servicer is obligated to credit the borrower’s account with all prior payments, honor any pending offers (for a short sale, short pay, settlement, reinstatement, forbearance, and/or modification), and continue to review any pending complete applications for a short sale, short pay, etc. However, many times this is why servicer changes are made so that the new servicer can claim they will not honor an offer to short sale, short pay, etc. or to state that the new servicer never received the complete package.

The above scenario will at most times be actionable; meaning this is something that is a cause of action. There is an obligation on the part of the new servicer to honor offers and pending complete applications, otherwise, it is a breach of contract- among other claims. In addition, to there being an obligation on the part of the servicer to honor offers and pending complete applications, the homeowner needs to make sure that the servicer’s failure to do such caused you or the party you are representing harm (damages).

MAKING HOMES AFFORDABLE – HAMP & HARP ARE GONE

Making homes affordable is an official program of the United States Department of Treasury and the United States Department of Housing and Urban Development.  HAMP and HARP were government funded programs in existence until December 31, 2016. As of December 31, 2016, the programs no longer exist as there was a sunset statute. These two programs were designed to help struggling borrower’s who could no longer afford their mortgages to modify their loan under specific government guidelines. Now that these government programs have ended that does not mean modifications will end.

“As far as the consumer financial protection bureau (CFPB) and Mark Mc Ardle, deputy secretary for the Office of Financial Stability is concerned ‘the economy is still not back on track and may take much more time while many homeowners are struggling, they still are having a difficult time making  their mortgage payments. The CFPB has issued non-binding guidelines based on proven principles and protocols. Based on NPV (net present value); with this foundation the CFPB has stated principle goals for financial institutions to follow when dealing with at- risk homeowners including affordability, accessibility, sustainability and transparency.  The overall goal is to prevent “avoidable foreclosures” and offer a win-win situation for investors and homeowners.'” David Smith

There are still government sponsored programs to help struggling homeowners such as the hardest hit funds that reaches eighteen states. It is Keeping Your Home California for the state of California and offers funds to help with a portion of the arrears for reinstatement or modification. Additionally, the Making Homes Affordable website still has a vast amount of information contained on it; especially, if you are already in a HAMP trial or permanent modification.

Contact Attorney Patricia Rodriguez:

Patricia Rodriguez, Esq.

Lead Attorney/Chief Executive Officer

http://attorneyprod.com

Rodriguez Law Group, Inc.

 

1492 West Colorado Boulevard Suite 120

Pasadena, CA 91105

phone: (626) 888-5206

fax: (626) 282-0522

The Neil Garfield Radio Show LIVE at 6 pm Eastern: The Statute of Limitation

Thursdays LIVE! Click in to the The Neil Garfield Show

Or call in at (347) 850-1260, 6pm Eastern Thursdays

Q and A: Statute of Limitations

In this episode I will be discuss two states with drastically different interpretations of Statute of Limitations.  In Florida the Bartram decision ruled that every time a homeowner misses a payment, the statute resets.  In stark contrast is a New York case called Costa v. Deutsche Bank that clarified that statute of limitations will be enforced.

The Bartram decision created a bad precedent where Pretender lenders (or any other Plaintiff) can look to Bartram as support for taking a pot luck shot at getting a foreclosure judgment and sale, followed by eviction. If they fail they can try again.

The application of res judicata, statute of limitations and Rooker Feldman don’t apply to the banks.

This creates a double standard.  The ambidextrous treatment of homeowners versus the financial sector is exactly what the equal protection clause of the U.S. Constitution (and, the Florida Constitution) says cannot occur under guarantees of equal protection under the law.

In stark contrast to Bartram was a New York decision last week called Costa v. Deutsche Bank.

The court was asked whether the statute of limitations applies. It did and according to NY Law it was too late for the pretend lender to take action.

Get a consult! 202-838-6345 or https://www.vcita.com/v/lendinglies

THIS DISCUSSION IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE.

Contact Attorney Charles Marshall at:

Charles Marshall, Esq.
Law Office of Charles T. Marshall
415 Laurel St., #405
San Diego, CA 92101

California Attorney Patricia Rodriguez: The Transferring of Servicing Rights to Avoid Reviewing Complete Modification Applications

Attorney Patricia Rodriguez will join Neil Garfield Live Tonight on the Neil Garfield Show at 6pm Eastern (3pm Pacific).  Please read Patricia’s story below at 4closurefraud.com

Thursdays LIVE! Click in to the The Neil Garfield Show

Or call in at (347) 850-1260, 6pm Eastern Thursdays

http://4closurefraud.org/2017/03/08/the-transferring-of-servicing-rights-to-avoid-reviewing-complete-modification-applications/

The Transferring of Servicing Rights to Avoid Reviewing Complete Modification Applications

The Transferring of Servicing Rights to Avoid Reviewing Complete Modification Applications

The Rodriguez Law Group, Inc

After years of litigating against alleged lenders, investors, servicers, and foreclosure trustee’s we are starting to see a clear trend of the servicing rights being transferred upon receiving a complete loan modification application. What is an alleged lender – this is usually the party that claims to have funded the original loan or the originator. The alleged investors are those who claim to have received an ownership interest in the loan through an assignment and endorsements or multiple assignments and endorsements. The foreclosure trustee in non judicial foreclosure states such as California are entrusted with overseeing the foreclosure process. The servicers are entities that claim a right to collect payments, modify the loan, etc. as agents of the principals (lender or investor). The servicer’s through an agreement with these other entities claim to have the right to enforce the note on behalf of the principal (lender or investor).

The servicer can start as one entity in the Deed of Trust and be changed by a simple letter from the original servicer to the borrower advising them that there is a new servicer. The borrower typically has agreed to such in the Deed of Trust. It is generally this servicer that the borrower or the borrower’s representative is negotiating with in order to conduct a short sale, short pay, cash for keys settlement, reinstatement, forbearance, and/or modification. The servicer could stay the same the life of the loan or switch anywhere from 1 to 10 times.

Each time the servicer changes the new servicer is obligated to credit the borrower’s account with all prior payments, honor any pending offers (for a short sale, short pay, settlement, reinstatement, forbearance, and/or modification), and continue to review any pending complete applications for a short sale, short pay, etc. However, many times this is why servicer changes are made so that the new servicer can claim they will not honor an offer to short sale, short pay, etc. or to state that the new servicer never received the complete package.

The above scenario will at most times be actionable; meaning this is something that is a cause of action. There is an obligation on the part of the new servicer to honor offers and pending complete applications otherwise, it is a breach of contract, among other claims. In addition, to there being an obligation on the part of the servicer to honor offers and pending complete applications you need to make sure that their failure to do such caused you or the party you are representing harm (damages).

MAKING HOMES AFFORDABLE – HAMP & HARP ARE GONE

Making homes affordable is an official program of the United States Department of Treasury and the United States Department of Housing and Urban Development. HAMP and HARP were government funded programs in existence until December 31, 2016. As of December 31, 2016, the programs no longer exist as there was a sunset statute. These two programs were designed to help struggling borrower’s who could no longer afford their mortgages to modify their loan under specific government guidelines. Now that these government programs have ended that does not mean modifications will end.

As far as the consumer financial protection bureau (CFPB) and Mark Mc Ardle, deputy secretary for the Office of Financial Stability is concerned ‘the economy is still not back on track and may take much more time while many homeowners are struggling, they still are having a difficult time making  their mortgage payments. The CFPB has issued non-binding guidelines based on proven principles and protocols. Based on NPV (net present value); with this foundation the CFPB has stated principle goals for financial institutions to follow when dealing with at- risk homeowners including affordability, accessibility, sustainability and transparency.  The overall goal is to prevent “avoidable foreclosures” and offer a win-win situation for investors and homeowners.  ~ David Smith

There are still government sponsored programs as well to help struggling homeowners such as the hardest hit funds that reaches eighteen states. It is Keeping Your Home California for the state of California and offers funds to help with a portion of the arrears for reinstatement or modification. Additionally, the Making Homes Affordable website still has a vast amount of information contained on it; especially, if you are already in a HAMP trial or permanent modification.

~

If you are in California and are looking for help with foreclosure, call The Rodriguez Law Group, Inc  at 626-888-5206 or fill out their online form for a FREE Case Evaluation. Let the lawyers and staff at The Rodriguez Law Group, Inc serve you!

For more information on Foreclosure Fraud News visit: http://4closurefraud.org/2017/03/08/the-transferring-of-servicing-rights-to-avoid-reviewing-complete-modification-applications/

“Prejudice” Element of Wrongful Foreclosure

http://www.jdsupra.com/legalnews/court-of-appeal-addresses-prejudice-48045/

By Kevin Brodehl

If a property owner loses their property through a foreclosure sale initiated by someone who did not validly own the debt, has the property owner automatically suffered enough “prejudice” to pursue a claim for wrongful foreclosure?  Or does the property owner also need to show that it would have been able to avoid foreclosure by paying the debt to the true lender?

The California Supreme Court’s recent Yvanova decision (reviewed on Money and Dirt here: California Supreme Court:  Borrowers Have Standing to Allege Wrongful Foreclosure Based on Void Assignment of Note) only partially addressed the “prejudice” issue.  In Yvanova, the Supreme Court discussed prejudice, but only “in the sense of an injury sufficiently concrete and personal to provide standing,” not “as a possible element of the wrongful foreclosure tort.”  The Court held that the plaintiff in that case demonstrated sufficient prejudice — lost ownership of property in an allegedly illegal foreclosure sale — to confer standing to pursue a wrongful foreclosure claim.

A recent opinion by the California Court of Appeal (Fourth District, Division One, in San Diego) — Sciarratta v. U.S. Bank National Association — picks up the “prejudice” analysis where Yvanova left off, and addresses prejudice as an element of a wrongful foreclosure claim.

The facts: a twisted tale of note assignments

In 2005, the property owner obtained a $620,000 loan secured by real property in Riverside County.  The note and deed of trust identified the lender as Washington Mutual (WaMu).

In April 2009, JPMorgan Chase Bank (Chase), as successor in interest to WaMu, assigned the note and deed of trust to Deutsche Bank.  The trustee promptly recorded a Notice of Default, followed by a Notice of Sale.

In November 2009, Chase recorded a document assigning the note and deed of trust to Bank of America (even thought just months earlier, Chase had already assigned the note and deed of trust to Deutsche Bank — oops!).  On the same date as the assignment, Bank of America recorded a Trustee’s Deed, reflecting that Bank of America had acquired the property at a trustee’s sale in exchange for a credit bid.

In December 2009, Chase recorded a “corrective” assignment of the note and deed of trust, suggesting that the April 2009 assignment to Deutsche Bank was a mistake, and was really intended to be an assignment to Bank of America.

The property owner sued the banks and the trustee for wrongful foreclosure.

The trial court’s ruling: no prejudice; case dismissed

The banks filed a demurrer, arguing that the property owner could not allege “prejudice,” which is an essential element of a wrongful foreclosure claim.

The trial court sustained the banks’ demurrer and dismissed the case.

The property owner appealed.

The court of appeal’s opinion

The Court of Appeal reversed, holding that a property owner who loses property to a foreclosure sale initiated by someone purporting to exercise rights under a void assignment suffers enough prejudice to state a claim for wrongful foreclosure.

The court first relied on the Supreme Court’s holding in Yvanova that “only the entity currently entitled to enforce a debt may foreclose on the mortgage or deed of trust securing that debt.”  In this case, based on the clear paper trail of assignments, the entity entitled to enforce the debt was Deutsche Bank, but the entity that foreclosed was Bank of America.

Based on the complaint’s allegations, the court noted, the assignment was not merely voidable but void.  The court observed, “Chase, having assigned ‘all beneficial interest’ in [the property owner’s] notes and deed of trust to Deutsche Bank in April 2009, could not assign again the same interests to Bank of America in November 2009.”

The court concluded that a property owner “who has been foreclosed on by one with no right to do so — by those facts alone — sustains prejudice or harm sufficient to constitute a cause of action for wrongful foreclosure.”  The court added:

The critical issue is not the plaintiff’s ability to pay, but rather whether defendant’s conduct resulted in the plaintiff’s harm; i.e., a foreclosure that was wrongful because it was initiated by a person or entity having no legal right to do so; i.e. holding void title.

The court also offered policy grounds supporting its decision.  The court’s ruling would encourage “lending institutions to employ due diligence to properly document assignments and confirm who currently holds a loan.”  A contrary ruling, on the other hand, would subject property owners to unfairly losing their property in foreclosure to someone who does not even own the underlying debt, with no court oversight.

Lesson

The Sciarratta decision will make it easier for property owners to assert wrongful foreclosure claims…….

To read more please visit:

http://www.jdsupra.com/legalnews/court-of-appeal-addresses-prejudice-48045/

California’s New Gieseke Decision-A New Playing Field Emerges Post-Yvanova

 

Charles Marshallby Charles Marshall, Esquire

Gieseke Remand Order 5 20 16 from 9th Circuit

THE FOLLOWING ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
On the heels of Sciarratta v. US Bank, in the wake of Keshtgar v. US Bank, under the umbrella of Yvanova v. New Century Mortgage, comes now a unifying decision which applies at a base level at least these California Supreme Court and appellate decisions to the non-judicial firmament throughout the Greater West, that of Gieseke v. Bank of America.

Gieseke is a 9th Circuit decision, thus making itself persuasive if not controlling law in California and 9th Circuit states outside California, including Oregon, Washington, Montana, Idaho, Nevada, Arizona, Alaska, and Hawaii. While it is not mandatory for 9th Circuit Fed Courts in these states to follow Gieseke, due to the causes of action at issue being primarily state-based property claims as opposed to Fed-based claims, the persuasive authority of Gieseke will doubtless be useful and may prove to be compelling in many a future non-judicial foreclosure case in which the ‘borrower’ (never concede even, nay especially, fundamental terms in case pleading) is the Plaintiff.

It is also important to keep in mind that Federal authority is not controlling in a state litigation matter. Nevertheless, the persuasiveness of Fed to State and State to Fed authority must be acknowledged and understood among foreclosure litigants.

One of the reasons Glaski v. Bank of America failed largely to get traction until revived by Yvanova, is that even though it was controlling authority in the 5th Appellate District of California, and very much persuasive authority elsewhere in California, California’s Fed Courts tamped this brave and groundbreaking decision down from an oak to a stump, in a matter of months, following its publication in August of 2013.

Now with Gieseke, the entire 9th Circuit has greatly amplified the already-dramatic impact of Yvanova and its progeny Keshtgar and Sciarratta. Indeed, the way the Gieseke decision came to be is an event of great moment for this long-time foreclosure warrior-attorney. The underlying Gieseke case, which I had filed in the Northern District of California Fed Court on behalf of my clients back in late 2013, and appealed many months ago, was set for oral argument on July 5, 2016 before the 9th Circuit.

The Clerk of the 9th Circuit Court issued an order-to-show-cause (OTS) on May 2, 2016 with the breathtaking directive to the institutional defendants in the case, including Bank of America, to wit: why shouldn’t we the 9th Circuit simply remand this case summarily, in light of the Yvanova decision.

The institutional defendants had their best appellate firm at the ready, Severson Werson, and put forward a shallow but superficially credible case. I ‘marshalled’ (you’ll forgive the pun) my extensive network of resources, putting forward my considerably more credible Neil Garfield-inspired and ready arguments, and awaited the decision which just came down May 20: Gieseke Appellants win summarily, without even having to go to oral argument, which hearing was vacated upon the remand of the case to District Court, where it is to be reconsidered in light of Yvanova and Keshtgar.

Keep in mind that while Yvanova and Sciarratta are both post-auction cases, Keshtgar, and now Gieseke, are pre-auction, post-NOD cases. Which means at this point in California, through the California Supreme Court and now the 9th Circuit, all post-NOD lawsuits will have at least persuasive authority battering the opposition from the moment of filing. Strategically for once, Californians litigating non-judicial foreclosure matters have real options in choosing venue.

Where the focus of a case is directed to wrongful foreclosure and quiet title, state courts may be the better venue, since Yvanova and Keshtgar are controlling authority in all State Courts at this point. On the other hand, where rescission is an important cause of action in a compliant, a Federal venue using Gieseke for non-rescission state-based claims litigated in the same Federal venue may be the best way to frame a case.

Remember, Federal authority is persuasive, not mandatory, when applied to state claims. On the other hand, the breakthrough case of Jesinoski v. Countrywide Home Loans is controlling authority throughout the US on the issue of rescission (always a Fed-based issue vis a vis the TILA Federal law), as the decision came out of the US Supreme Court.

One might reasonably anticipate at this juncture to wonder what might one expect in light of the above cases, in trying to move a given plaintiff’s foreclosure case forward. Here follows a primer: For starters, from case inception, when facing a sale date, TROs will be much more readily granted. Be mindful that the standard applied to granting a preliminary or permanent restraining order, and derivatively a TRO, is whether the movant for an injunction is likely to prevail on the merits in the litigation at issue.

Before Yvanova, getting TROs in foreclosure-related matters was fraught with difficulty, though still doable in a number of cases, depending upon the district, the court, etc, although winning the preliminary injunction hearing to follow was another matter typically. With Keshtgar and Gieseke (pre-auction holdings), a TRO and preliminary injunction movant is likely to find getting the relief requested is much more straightforward and readily available. Also take note that TROs and their kindred hearings are much more easily brought, procedurally, in state courts, as opposed to Federal courts, at least in California.

As a still-relatively new lawsuit moves forward in the new dispensation of our post-Yvanova foreclosure world, plaintiffs will likely face as before, a surfeit of demurrer filings from the usual-suspect institutional servicers and sales trustees, such as Chase and Quality Loan Service Corp. Do not be feint of heart. New playing field, to which our opposition will have trouble adjusting much more than our side will. The new field largely benefits us, and will doubtless delimit and one hopes eventually demoralize our opposition. Can’t wait for the role reversal.

If California courts, state or Federal, are working properly, demurrers in this new litigation climate should routinely be overruled where the proper causes of action are pled, such as wrongful foreclosure, various Homeowner Bill of Rights statutory sections such as California Civil Code 2924.17 and 2923.55, and quiet title—this latter cause of action I believe will see a great revival with our side finally getting standing to present our arguments.

Equally important in this new terrain, is of course to plead void not voidable, when it comes to addressing the broken chain of assignments, the front-dating, back-dating, and robo-signing associated with same assignments.

Expect to see many motions for summary judgment, and the occasional judgment on the pleadings, from our not-so-friendly and often ruthless defendants, who will resort to these at present little-used devices to try and get out of a case they are no longer able to exit via a demurrer.

So yes, be heartened as a plaintiff when you see the opposition file an Answer as opposed to a demurrer (State level) or motion to dismiss (Fed). Do be cautious though, as a motion for summary judgment may soon follow.

Which brings us to discovery: This aspect of our litigation will grow dramatically, as our cases move to trial, instead of being snuffed in a proverbial litigation crib. More about the useful tool of discovery in a future blog post. Also on deck for a future blog post: Trial practice in our foreclosure cases, and appellate practice.

____________________________________________________________

California-licensed attorney Charles T. Marshall (CA Bar # 176091) earned his Juris Doctorate in 1992 from the University of San Diego School of Law. His practice includes Foreclosure Relief, Civil Litigation, Bankruptcy, Immigration, Estate Planning and all facets of Personal Financial Management.

Charles Marshall can be contacted at:

415 Laurel Street, Suite 405 San Diego CA 92101 US
+1.530.888.9600
Charles@MarshallLawCa.com

Website:  http://www.marshalllawca.com/home.html

 

 

The Real Deal and How to Get There

Internet Store Notice: As requested by customer service, this is to explain the use of the COMBO, Consultation and Expert Declaration. The only reason they are separate is that too many people only wanted or could only afford one or the other — all three should be purchased. The Combo is a road map for the attorney to set up his file and start drafting the appropriate pleadings. It reveals defects in the title chain and inferentially in the money chain and provides the facts relative to making specific allegations concerning securitization issues. The consultation looks at your specific case and gives the benefit of litigation support consultation and advice that I can give to lawyers but I cannot give to pro se litigants. The expert declaration is my explanation to the Court of the findings of the forensic analysis. It is rare that I am actually called as a witness apparently because the cases are settled before a hearing at which evidence is taken.
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The Real Deal and How to Get There

If you read the Glaski case any of the hundreds of other decisions that have been rendered you will see one glaring error — failure to raise an issue or objection in a timely manner. This results from ignorance of the facts of securitization. So here is my contribution to all lawyers, wherever you are, to prosecute your case. I would also suggest that you use every tool available to disabuse the Judge of the notion that your goal is delay — so push the case even when the other side is backpedaling, ask for expedited discovery. Act like you have a winning case on your hands, because, in my opinion, you do.

The key is to attack the Judge’s presumption whether stated or not, that a real transaction took place, whether at origination or transfer. Once you let the Court know that is what you are attacking the Judge must either rule against you as a matter of law which would be overturned easily on appeal and they know it, or they must allow penetrating discovery that will reveal the real money trail. The error made by nearly everyone is that the presumption that the paperwork tells THE story. The truth is that the paperwork tells a story but it is false.

Nevertheless the burden is on the proponent of that argument to properly plead it with facts and as we know the facts are largely in the hands of the investment banker and not even the servicer has it. My law firm represents clients directly in Florida and provides litigation support to any attorney wherever they are located. We now send out a preservation letter (Google it) as soon as we are retained. We send it to everyone we know or think might have some connection to the file. If they can’t find something, the presumption arises they destroyed it if we show that in the ordinary course of business they would keep records like that. We also have a computer forensic analyst who is a lawyer that can go into the computers and the data and see when they were created, by whom and reveal the input that was done to create certain files and instruments.

Once the facts are properly proposed, then the proponent still has the burden of proving the allegations through discovery. That is because the paperwork raises a rebuttable presumption of validity. The Glaski case gives lots of hints as to how and when to do this. Neither judicial notice of an instrument nor the rebuttable presumption arising out of an instrument of commerce gives the bank immunity. And the requests for discovery should attack the root of their position — that the foreclosing party is true beneficiary or mortgagee.

With the Glaski Case in California and we have one just like it in Florida, the allegation must be made that the transaction is void as to the transfer to the Trust. You have a related proof challenge when they insist that the loan was not securitized. You say it was subject to claims of securitization. That puts you in a he said she said situation — which puts you in the position of the Judge ruling against you because you have not passed the threshold of moving the burden back to the Bank. What penetrates that void is the allegation and proof of the absence of any actual transaction — i.e., one in which there was an offer, acceptance of the offer and consideration. The UCC says an instrument is negotiated when sold for value. You say there was no value. Proving the loan is subject to claims of securitization may require discovery into the accounting records of the parties in the securitization chain. What you are looking for is a loan receivable account or account receivable that is owned by the party to whom the money is owed. At the servicer this does not exist, which is why the error in court is to go with the servicer’s records, which are incomplete because they do not reveal the payments OUT to third party creditors or others, nor other payments IN like from the investment bank who funds continued payment to the creditors to keep them ignorant that their portfolio is collapsing.

The transaction is void if there was an attempt to assign the loan into the trust. First, it violated the instrument of the trust (PSA) because of the cutoff rule. The court in Glaski correctly pointed out that under the circumstances this challenge was valid because of the prejudice to the beneficiaries of the trust. They use discretion to assert that there is prejudice to the beneficiaries because of the economic impact of losing their preferential tax status. They did not add (because nobody raised it), that the additional prejudice to the beneficiaries is that it is usually a loan that is already declared in default that is being assigned. Judge Shack in New York has frequently commented on this.

Hence the proposed transfer violates the cutoff date, the tax status and the requirement that the loan be in good standing. Sales of the bonds issued by the trust were based upon the premise that the bonds were extremely low risk. Taking defaulted loans into the trust certainly  violates that and under federal and state regulations the pension funds, as “Stable managed funds” can ONLY invest in extremely low risk securities.

Hence the possibility of ratification is out of the question. First, it is isn’t allowed  under the IRC and the PSA and second, it isn’t allowed under the PSA because the investors are being handed an immediate loss — a purchase with their funds (which you will show never happened anyway) of a defaulted loan. But to close the loop on the argument of possible ratification, you must take the deposition of the trustee of the trust.

Without the possibility of ratification, the transaction is definitely void. In that depo it will be revealed that they had no access or signature authority to any trust account and performed no duties. But they are still the party entrusted with the fiduciary duties to the beneficiaries. So when you ask whether they would allow the purchase of a bad loan or any loan that would cause the REMIC to lose its tax status they must answer either “no” or I don’t know. The latter answer would make appear foolish.

A note in the Glaski case is also very revealing. It is stated there that BOTH sides conceded that the real owner of the debt is probably unknown and can never be known. So tread softly on the proposition that the real owner of the loan NOW is the investor. But there is a deeper question suggested by this startling admission by the Court and both sides of the litigation. If the facts are alleged that a given set of investors somehow pooled their money and it was used to fund the loan origination or to fund the loan acquisition, what exactly do the investors have NOW? It would appear to be a total loss on that loan. They paid for it but they don’t own it because it never made it into the trust.

The alternative, proposed by me, is that this conclusion is prejudicial to the beneficiary, violates basic fairness, and is contrary to the intent of the real parties in interest — the investors as lenders and the homeowners as borrowers. The proper conclusion should be, regardless of the form of transaction and content of instruments that were all patently false, that the investors are lenders and the homeowner is a borrower. The principal is the amount borrowed. The terms are uncertain because the investors were buying a bond with repayment terms vastly different than the repayment terms of the note that the homeowner signed. Where this occurs the note or obligation is generally converted into a demand obligation, which like tender of money in a loan dispute, is enforced unless it produces an inequitable result, which is patently obvious in this case since it would result in a judgment and judgment lien that might be foreclosed against the homeowner.

With the assignment to the trust being void, and the money of the investor being used to fund the loan, and there being no privity between the investor and the homeowner, the only logical conclusion is to establish that the debt exists, but that it is unsecured and subject to the court’s determination to fashion the terms of repayment — or mediation in which the unsecured loan becomes legitimately secured through negotiations with the investors.

Since the loan was not legally assigned into the trust and the trust did not fund the origination of the loan, the PSA no longer governs the transaction; thus the authority of the servicer is absent, but the servicer should still be subpoenaed to produce ALL the records, which is to say the transactions between the servicer and the borrower AND the transactions between the servicer and any third parties to whom it forwarded the payment, or with whom it engaged in other receipts or disbursements related to this loan.

Since the loan was not legally assigned into the trust, the trustee has no responsibility for that loan, but the investment bank who used the investors money to fund the the loan is also a proper target of discovery as is the Maser Servicer and aggregators, all of whom engaged in various transactions that were based upon the ownership of the loan being in the trust. Now we know it isn’t in the trust. The Banks have used this void to jump in and claim that they own the loan, which is obviously inequitable (if not criminal). But the equitable and proper result would be to establish that the investors own an account receivable from borrowers in this type of situation since they were the ones who advanced the money, not the banks.

Since the loan was not legally assigned into the trust, the servicer has no  actual authority or contract with the investors who are now free to enter into direct negotiations with the borrowers and avoid the servicers who are clearly serving the interest of the parties in the securitization chain (which failed) and not the investors. Thus any instrument executed using the securitization or history of “assignments” (without consideration) as the foundation for executing such an instrument is void. That includes substitutions of trustees, assignments, notices of default, notices of sale, lawsuits to foreclose or any effort at collection.

Note that without authority and based upon intentionally false representations, the servicers might be subject to a cause of action for interference with contractual rights, especially where a modification proposal was “turned down by the investor. “ If the investor was not the Trust and it was the Trust allegedly who turned it down (I am nearly certain that the investors are NEVER contacted), then the servicer’s push into foreclosure not only produces a wrongful foreclose but also interference with the rights and obligations of the true lenders and borrowers who are both probably willing to enter into negotiations to settle this mess.

The second inquiry is about the balance of the account receivable and the obvious connection between the account receivable owned by the investors and the account payable owed by the homeowners. I don’t think there is any reasonable question about the initial balance due, because that can easily be established and should be established by reference to a canceled check or wire transfer receipt. But the balance now is affected by sales to the Federal Reserve, insurance, bailouts and credit default swaps (CDS).

Since the loan was not assigned to the trust then the bond issued by the trust that purports to own the loan is wrong. The insurance, CDS, guarantees, purchases and bailouts were all premised on the assumption that the false securitization trail was true, then it follows that the money received by anyone represents proceeds that does not in any way belong to them. They clearly owe that money to the investor to the extent of the investors’ advance of actual money, with the balance due to the homeowner, as per the agreement of the parties at the closing with the homeowner. But the payors of those moneys also have a claim for refund, buy back, or unjust enrichment, fraud, etc.

Those payors have one obvious problem: they executed agreements that waived any right to collect from the borrower. Thus they are stuck with the bond which is worthless through no fault of the beneficiaries. So their claim, I would argue, is against the investment bank. The guarantors (Fannie, Freddie et al) have buyback rights against the parties who sold them the loans they didn’t own or the bonds representing ownership that was non-existent. Here a fair way of looking at it is that the investors are credited with the third party mitigation payments, the account payable of the borrower is reduced proportionately with the reduction of the account receivable (by virtue of cash payment to their agents which reduces the account receivable because the money should be paid to and credited to the investor) and the balance of the money received should then go to the guarantor to the extent of their loss, and then any further balance left divided equally amongst the investors, borrowers and guarantors.

To do it any other way would either leave the banks with their ill-gotten gains and unjust enrichment, or over payment to the investors, over payment to the borrowers who are entitled to such proceeds as per most statutes governing the subject, or over payment to the guarantors. The argument would be made that the investors, borrowers and guarantors are getting a windfall. Yes that might be the case if the over payments resulting from multiple sales of the same loan exceeded all money advanced on the actual loan. But to leave it with the Banks who were never at risk and who are still getting preferential treatment because of their shaky status would be to reward those who intended to be the risk takers, but who masked the absence of risk to them through false statements to the parties who all collectively advanced money and property to this scheme without knowing that they were all doing so.

 

The question is on what basis should the banks be rewarded with the windfall. I can find no support for that proposition. But based upon public policy or other considerations regarding the nature of the hedge transactions used to sell the same loan over and over again, it might be argued that the investment bank is entitled to retain SOME money if the total exceeds the full balances owed to the investors (thereby extinguishing the payable from the borrower), and the full balances owed to the guarantors.

Bank of America to Pay $108 Million in Countrywide Case

GET LOAN SPECIFIC RECORDS PROPERTY SEARCH AND SECURITIZATION SUMMARY

FTC v Countrywide Home Loans Incand BAC Home Loans ServicingConsent Judgment Order 20100607

Editor’s Comment: This “tip of the iceberg”  is important for a number of reasons. You should be alerted to the fact that this was an industry-wide practice. The fees tacked on illegally during delinquency or foreclosure make the notice of default, notice of sale, foreclosure all predicated upon fatally defective information. It also shows one of the many ways the investors in MBS are being routinely ripped off, penny by penny, so that there “investment” is reduced to zero.
There also were many “feeder” loan originators that were really fronts for Countrywide. I think Quicken Loans for example was one of them. Quicken is very difficult to trace down on securitization information although we have some info on it. In this context, what is important, is that Quicken, like other feeder originators was following the template and methods of procedure given to them by CW.Of course Countrywide was a feeder to many securities underwriters including Merrill Lynch which is also now Bank of America.

Sometimes they got a little creative on their own. Quicken for example adds an appraisal fee to a SECOND APPRAISAL COMPANY which just happens to be owned by them. Besides the probability of a TILA violation, this specifically makes the named lender at closing responsible for the bad appraisal. It’s not a matter for legal argument. It is factual. So if you bought a house for $650,000, the appraisal which you relied upon was $670,000 and the house was really worth under $500,000 they could be liable for not only fraudulent appraisal but also for the “benefit of the bargain” in contract.

Among the excessive fees that were charged were the points and interest rates charged for “no-doc” loans. The premise is that they had a greater risk for a no-doc loan but that they were still using underwriting procedures that conformed to industry standards. In fact, the loans were being automatically set up for approval in accordance with the requirements of the underwriter of Mortgage Backed Securities which had already been sold to investors. So there was no underwriting process and they would have approved the same loan with a full doc loan (the contents of which would have been ignored). Thus thee extra points and higher interest rate paid were exorbitant because you were being charged for something that didn’t exist, to wit: underwriting.
June 7, 2010

Bank of America to Pay $108 Million in Countrywide Case

By THE ASSOCIATED PRESS

WASHINGTON (AP) — Bank of America will pay $108 million to settle federal charges that Countrywide Financial Corporation, which it acquired nearly two years ago, collected outsized fees from about 200,000 borrowers facing foreclosure.

The Federal Trade Commission announced the settlement Monday and said the money would be used to reimburse borrowers.

Bank of America purchased Countrywide in July 2008. FTC officials emphasized the actions in the case took place before the acquisition.

The bank said it agreed to the settlement “to avoid the expense and distraction associated with litigating the case,” which also resolves litigation by bankruptcy trustees. “The settlement allows us to put all of these matters behind us,” the company said.

Countrywide hit the borrowers who were behind on their mortgages with fees of several thousand dollars at times, the agency said. The fees were for services like property inspections and landscaping.

Countrywide created subsidiaries to hire vendors, which marked up the price for such services, the agency said. The company “earned substantial profits by funneling default-related services through subsidiaries that it created solely to generate revenue,” the agency said in a news release.

The agency also alleged that Countrywide made false claims to borrowers in bankruptcy about the amount owed or the size of their loans and failed to tell those borrowers about fees or other charges.

New Forms Entries

california-order-to-appear-and-show-cause-ndex-notification

california-oppsition-to-motion-with-8k-exhibit

california-notice-of-hearing-notice-of-motion

california-nod-and-1st-substitution-of-trustee

california-defendants-motion-to-strike-demurrer-with-cites

california-declaration-of-cg-esq

california-court-bond-0808

california-complaint

california-borrowers-memorandum-of-points

california-bond-app

california-app-for-tro-and-order-to-show-cause

securitization-flow-chart-dougal

the-effects-of-the-rooker-feldman-doctrine-on-repeat-filings-in-federal-court

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