WHAT IS A SERVICER ADVANCE? According to Ocwen it has zero credit risk and is not really an advance

One place where securitization players and foreclosure players don’t lie is in reports that are formally filed with the SEC. So in my research, I found a document in which Ocwen describes itself and which is subject to judicial notice because it is a government document downloaded from the Sec.gov website. The filing of 8k and other reports required by securities laws and regulations is an official act. It is a sworn representation by the issuer (Ocwen here) that the facts being presented are accurate and true on penalty of going to jail. Here we see a filing that identifies the people who would go to jail if the facts were not at least arguably accurate.

THIS IS ALSO A MENU OF INDIVIDUALS WHO COULD BE SUED INDIVIDUALLY FOR PARTICIPATING IN FRAUDULENT, NEGLIGENT ENTERPRISES AND WRONGFUL FORECLOSURES. 

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NOTE ON JUDICIAL NOTICE AND SEC.GOV

Note my words here. In most court cases, the documents used by foreclosure mills are merely self-serving documents laundered through the SEC website. If you have the credentials you can upload anything including but not limited to porn.

So for court purposes only they upload as much as they can to the SEC.gov website — and then download it with “sec.gov” in the heading. Then they produce it as a governent document (which it isn’t) and ask for judicial notice. Without opposition, the judge grants the motion for judicial notice and that practically means the case is over.

Most pro se litigants don’t know what judiclal notice is and most lawyers and homeowners take it for granted that they can’t oppose judical notice for a government document. they forget to inquire whether that IS a government document and in virtually ALL cases, it is not a govenrment document — and therefore (1) it is not subject to judicial notice and (2) the attempt to use it as such is subject to a motion for contempt and sanctions — if you file the motion. This is another example of how the banks are using pure fabrications and weaponizing civil procedure to support their thieving scheme.

see https://shareholders.ocwen.com/static-files/24390846-8787-4a36-9c30-53b5b5f0a0e5

OCWEN 8K 0001193125-13-015500

Note that this is a “Lender’s Presentation.” That means it is a presentation to prospective lenders. Any lies would be subject to criminal prosecution not only for violations of securities laws but also for bank fraud.

Take a look at this from Ocwen’s 8k report to the SEC in 2013: Note how the filing is devoid of any representation that Ocwen is a lender, successor lender, or attorney in fact for anyone.

Note how Ocwen is basically always teetering close to bankruptcy because it has very few assets and maintains a business plan that is always based entirely on income from “servicing.”

Note how on page 20 they represent Ocwen, BOA servicing, Chase servicing, Saxon Servicing, Litton Servicing, and HomeEq Servicing to all be the same thing. Since 2013 you can add PHH, REZ, and other entities or names that were used ficitiously.

THEN ON PAGE 36 THEY ANSWER THE QUESTION: WHAT IS A SERVICER ADVANCE?

  1. Note that they use the word “advance” in quotes, just like I did here. That is because if they said it was an advance they would be lying. There is no advance. This is a cover-up for the fact that there is no loss to anyone when scheduled payments are not paid by homeowners. So there is no need for any advance, much less by a “servicer”. No company would accept responsibility for making such advances. Imagine if your bookkeeper said “That’s ok, if they don’t pay you, I will.” Imagine the fees that would need to be paid for any company to incur such liability. Imagine insurance and reserve deposits required. None of those things exist.
  2. So the advance does not come from Ocwen’s balance sheet and it actually does not exist. This is cover for the Master servicer putting in a claim for nonexistent advances. All payments to creditors of the securities brokerage firm (i.e., investors who purchased uncertificated certificates) are made from a huge such fund that is referred to in other documents as a reserve pool which consists of (1) proceeds from the sale of the certificates (2) money deposited with permission of the stockbroker who started this scheme including money received from homeowners and (c) proceeds of sales from other similar schemes. It is all commingled and obviously, this has nothing to do with any homeowner (aka “borrower”).
  3. Next, they say that “servicers incur funding costs on these non-interest bearing advances but do not bear credit risk.” Translation: there is no advance.  But we claim funding costs in order to get paid for pretending that servicer advances are real thus justifying fees for nonexistent services.
  4. Next, they say that “Advances are recoverable at the ‘top of the waterfall’ first from proceeds at a loan level, and then if those funds are insufficient, from cash collected from other loans in an RMBS trust.” Translation: Advances are recoverable but not by Ocwen. It never sees that “recovery.” The money is taken first from “a loan level.” which means it could be any loan. That is reinforced by the remaining words which refer to other loans in any RMBS trust. And that is why I say that there is no loss to anyone in any individual loan. It’s impossible. As long as there is money anywhere from investors, homeowners, or insurance for the certificates, everyone gets paid. So far there has always been money available not only to make all payments to everyone but also to for exceedingly high profits like what we saw with Goldman Sachs in 2009 when they forced the AIG bailout not to cover losses, but rather to cover additional profits.
  5. And lastly, they make the silly statement that “A servicer” can ‘stop advance’ if it believes that an advance will not be recoverable from the borrower.” This is silly because first of all there are no advances except from other people’s money with which Ocwen has no control. Second, because recovery from a borrower is irrelevant as described above. This statement is made solely as part of the coordinated illusion created by the stockbroker (aka investment bank) that started the scheme. It is made to reinforce the false representation that there are any loans, that there is any loan receivable account on the ledgers of anyone, and that therefore those accounts need servicing.
P.S. Note the very beginning where is says: “On January 17, 2013, Ocwen Financial Corporation (“Ocwen”) is making a presentation at a meeting among potential lenders for the proposed Senior Secured Term Loan facility. Barclays, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are acting as Joint Lead Arrangers and Joint Bookrunning Managers for the facility. Barclays Bank PLC is acting as Sole Syndication Agent and Administrative Agent for the facility. A copy of Ocwen’s slide presentation for such conference is attached as Exhibit 99.1 hereto. Such slide presentation shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.” This means they are trying to say, unsuccessfully that even though they’re filing it with the SEC it shouldn’t count against them if they’re lying. 
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Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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Tonight! Steamrolling Using Judicial Notice 6PM EST

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One of the things that irritates most homeowners and lawyers for foreclosure defense is how “evidence” is admitted that “proves” a fact that doesn’t exist. One of the tools for doing that is Judicial Notice or as we call it, “JN.” JN is used for documents that are inherently credible — not some document created by one of the litigants and uploaded to a quasi government site without any validation by any government entity. They are inherently credible because they were prepared by or taken from the records of a credible source — a party with not relationship to the parties in litigation and no stake in the outcome.

If you read the statute in your state you will see plenty of reasons why most documents proffered as being subject to Judicial Notice (JN) should be rejected as evidence without proper foundation and specific foundation for each issue addressed in the document. Foundation means testimony and maybe other documents for which there is a witness to provide the foundation.

In truth when the lawyers for the fictional claimant does this they are opening up the door as well as virtually admitting that they can’t prove the false fact without JN. By aggressively preserving and invoking objections and using motions to strike and motions in limine, as well as effective cross-examination, the truth of the matter asserted by the document can be eliminated.

Institutional litigants are misusing the court system throughout the dozens of state and Federal jurisdictions to get into evidence matters which are and should be barred from evidence or at least subject to dispute, and about which these same litigants often have no or little independent evidentiary support. One such major vehicle for advancing this practice is the use of Requests for Judicial Notice (RJN).

Documents uploaded to SEC.gov, for example, are proffered as subject to judicial notice, even though the SEC website acts merely as a platform for publication, and not a proper registry, and neither monitors nor validates any documents placed on their site.

In California, StorMedia,, Inc. v. Superior Court (1999) 20 Cal.4th 449, 457, fn. 9, has long controlled among other Cal cases RJNs in California litigation.  This case holds that “When judicial notice is taken of a document…the truthfulness and proper interpretation of the document are disputable.”

Yet it is very common in California foreclosure litigation for courts to treat RJNs as if they do establish the truth of the matter asserted within the documents. This enables institutional defendants in Cal. borrower foreclosure litigation, to point as evidence to Plaintiff’s presenting recorded documents only to dispute their content, as if the documents so presented and disputed are not subject to dispute, because of the taking of judicial notice.

JUDICIAL NOTICE IS BEING USED AS A SUBSTITUTE FOR PROOF OF FACTS THAT ARE CONTESTED

The entire playbook of the banks and servicers consists of one underlying theme: to obtain foreclosures based upon presumptions that are contrary to the facts.

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see Judicial Notice in Florida 90.202

and notice these provisions that are common to most if not all Judicial Notice statutes specifically state that judicial notice is ONLY for facts not subject to dispute.

Get up to speed on judicial notice. It is a ruse in the context of foreclosures and especially evictions or unlawful detainer actions filed after a supposed sale. They are seeking to avoid the requirement of proving that which they cannot prove unless the court not only accepts the document has having been judicially noticed but also that what is written on the document is presumptively true.

This is one place where the burden does not shift so easily. As I read the law, once you make the assertion contained in the document a question of fact, then the burden does not shift to you unless and until they introduce testimony (not legal argument) that is the foundation for introducing the document into evidence.   It seems crystal clear that they cannot do this because the facts point in an entirely different direction.

You might want to consider filing your own motion for summary judgment on the premise that if all they have is a plea for judicial notice and  they can’t otherwise prove the truth of the matters asserted in the documents submitted for judicial notice, then they have nothing and there are no issues of fact left to be tried, the burden does not shift to you, and judgment should be entered against the party seeking possession through eviction.

In your argument you should cite specific case law and statutes on judicial notice. Judicial notice is not meant to be a vehicle for skating around the truth. It is meant to streamline admission of evidence that comes from an independent third party with no interest in the outcome of litigation and is therefore presumptively true — because it is 100% credible.

First judicial notice is only good for proving the fact that the document exists. Second, what is written on the document is presumed true UNLESS you deny or object — so they must still prove that what is written on the document is true with other evidence. Third, judicial notice mostly applies to government generated documents — not self serving documents that are recorded or uploaded somewhere for the sole purpose of invoking judicial notice.

The entire reason why judicial notice exists is judicial economy — why require someone to prove something that everyone already knows is true or is contained in government agency files or website wherein the information is generated by an independent third party with no interest in the outcome of the litigation? Such documents are inherently credible.

They will try to say that they took title by virtue of the deed that was issued. The fact that they are seeking the court to admit into evidence as true is that the deed was valid. You contest that the deed was valid. Therefore it is up to them, apart from the deed, to show facts that the deed was valid and that means that the property was sold by a properly authorized trustee on behalf of an actual beneficiary who was either the obligee of the contested debt or the authorized agent for the obligee.

If the property was “sold” on behalf of a party who was not an obligee on the debt then it was sold by a non-beneficiary. And the filing of a substitution of trustee was void. And the “credit bid” was a false statement equivalent to perjury.

Another PennyMac Crash! CA Case for Homeowner

American jurisprudence is clearly still struggling with the fact that in most cases the forecloser either does not exist or does not have any interest in the loans they seek to enforce. In virtually all instances PennyMac is acting in the role of a sham conduit while allowing its name to be used as the front for a nonexistent lender.

Such foreclosers use semantics and legal procedure to create and cover-up the illusion of “ownership” of the debt (the loan) and the illusion of having the rights to enforce the note bestowed by a true creditor. This case opinion is correct in every respect and it conforms with basic black letter law in all 50 states; yet courts still strive to find ways to allow disinterested parties to foreclose.

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THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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Hat tip to Bill Paatalo
see GULIEX v. PennyMAC HOLDINGS LLC, Cal: Court of Appeal, 5th Appellate Dist. 2017 https://scholar.google.com/scholar_case?case=9436462246811997539&hl=en&lr=lang_en&as_sdt=2006&as_vis=1&oi=scholaralrt
This case amply demonstrates the following:
  1. The need for a chain of title report
  2. The need for a chain of title analysis
  3. The need for legal research and good memorandums of law
  4. The need to understand “chains of title” or “chains of events” and the laws applicable thereto (e.g. judicial notice, legal presumptions etc.)
  5. The need to formulate a presentation to the judge that is very persuasive.
  6. The need to appeal when trial judges don’t apply the law or don’t apply the law correctly.

The following are significant quotes from the case.

Plaintiff, a homeowner and borrower, sued the defendant financial institution for wrongs allegedly committed in connection with a nonjudicial foreclosure sale of his residence. Plaintiff’s main theory was that the financial institution did not own his note and deed of trust and, therefore, lacked the authority to foreclose under the deed of trust. (e.s.)

The financial institution convinced the trial court that (1) it was, in fact, the beneficiary under the deed of trust, (2) a properly appointed substitute trustee conducted the foreclosure proceedings, and (3) the plaintiff lacked standing to claim the foreclosure was wrongful. The financial institution argued its chain of title to the deed of trust was established by facts stated in recorded assignments of deed of trust and a recorded substitution of trustee. The trial court took judicial notice of the recorded documents. Based on these documents, the court sustained a demurrer to some of the causes of action and granted summary judgment as to the remaining causes of action. On appeal, plaintiff contends he has standing to challenge the foreclosure and, furthermore, the judicially noticed documents do not establish the financial institution actually was the beneficiary under the deed of trust. We agree. (e.s.)

As to standing, the holding in Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919 (Yvanova) clearly establishes plaintiff has standing to challenge the nonjudicial foreclosure on the ground that the foreclosing party lacked the authority to initiate the foreclosure because it held no beneficial interest under the deed of trust. (e.s.)

As to establishing facts by judicial notice, it is well recognized that courts may take notice of the existence and wording of recorded documents, but not the disputed or disputable facts stated therein. (e.s.) (Yvanova, supra, 62 Cal.4th at p. 924, fn. 1; Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366, 1375 (Herrera).) Under this rule, we conclude the facts stated in the recorded assignments of deed of trust and the substitution of trustee were not subject to judicial notice. (e.s.) Therefore, the financial institution did not present evidence sufficient to establish its purported chain of title to the deed of trust. Consequently, the financial institution failed to show it was the owner of the deed of trust and had the authority to foreclose on plaintiff’s residence.

We therefore reverse the judgment and remand for further proceedings.

….

The Links in PennyMac’s Purported Chain of Title

“Links” in a chain of title are created by a transfer of an interest in the underlying property from one person or entity to another. An examination of each link in the purported chain of title relied upon by PennyMac reveals that certain links were not established for purposes of the demurrer. Our analysis begins with a description of each link in the purported chain (and each related document, where known), beginning with the husband and wife who sold the residence to Borrower and ending with the trustee’s sale to PennyMac.

Link One-Sale: Clarence and Betty Dake sold the residence to Borrower pursuant to a grant deed dated April 19, 2005, and recorded on June 30, 2005. The parties do not dispute this transfer.

Link Two-Loan: Borrower granted a beneficial interest in the residence to Long Beach Mortgage Company pursuant to a deed of trust dated June 21, 2005, and recorded on June 30, 2005. The parties do not dispute this transfer.

Link Three-Purported Transfer: Long Beach Mortgage Company purportedly transferred its rights to Washington Mutual Bank by means of a document or transaction not identified in the appellate record. Also, the appellate record does not identify when the purported transaction occurred. Borrower disputes the existence of this and subsequent transfers of the deed of trust. (e.s.)

Link Four-Purported Transfer: Washington Mutual Bank purportedly transferred its rights to JPMorgan Chase Bank, National Association in an unidentified transaction at an unstated time. (e.s.)

Link Five-Assignment: JPMorgan Chase Bank, National Association, successor in interest to Washington Mutual Bank, successor in interest to Long Beach Mortgage Company, purportedly transferred the note and all beneficial interest under the deed of trust to “JPMorgan Chase Bank, National Association” pursuant to an assignment of deed of trust dated July 25, 2011, and recorded on July 26, 2011.

Link Six(A)-Assignment: JPMorgan Chase Bank, National Association transferred all beneficial interest in the deed of trust to PennyMac Mortgage Investment Trust Holdings I, LLC pursuant to a “California Assignment of Deed of Trust” dated September 14, 2013, and recorded on November 15, 2013.

Link Seven-Trustee’s Sale: California Reconveyance Company, as trustee under the deed of trust, (1) sold the residence to PennyMac at a public auction conducted on November 20, 2013, and (2) issued a trustee’s deed of sale dated November 21, 2013 and recorded on November 22, 2013. PennyMac, the grantee under the deed upon sale, was described in the deed as the foreclosing beneficiary.

Link Six(B)-Purported Assignment: The day after the trustee’s sale, JPMorgan Chase Bank, National Association executed a “Corporate Assignment of Deed of Trust” dated November 21, 2013, purporting to transfer the deed of trust without recourse to PennyMac Holdings, LLC. The assignment was recorded November 22, 2013. This assignment was signed (1) after JPMorgan Chase Bank, National Association had signed and recorded the “California Assignment of Deed of Trust” described earlier as Link Six(A) and (2) after the trustee’s sale was conducted on November 20, 2013. Consequently, it is unclear whether any interests were transferred by this “corporate” assignment.

3. Links Three and Four Are Missing from the Chain

Postscript from Editor: This Court correctly revealed the fraudulent strategy of the banks, to wit: they created the illusion of multiple transfers giving the appearance of a solid chain of title BUT 2 of the transfers were fake, leaving the remainder of the chain void.

Judicial Notice: Banks File Self-Serving Documents on Agency or Other Sites and Then Ask the Court to Take Judicial Notice.

The banks file incomplete, unsigned and often fabricated documents on websites where they can get away with it. http://www.sec.gov is one of those places. I suggest aggressive objection to taking judicial notice of any document on sec.gov because it was not generated by the agency.

The fact that someone filed it doesn’t mean that the filing was authentic and certainly doesn’t mean that anything about that filing is probative evidence that the facts as represented by the banks are true.

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THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
—————-

Be aware of the following:

  1. Reporting information does not make it true. A clever thing the banks do is file online with some agency that doesn’t care what they file and then ask for judicial notice or get a presumption from the judge that the information must be true if it is filed somewhere on the internet. Even sec.gov doesn’t monitor what is on their site except if they are investigating something. Such “reporting” is a ploy.
  2. The distribution report is usually under 15(d) which basically means it is probably the last filing ever. Often it is not filed with an agency but rather on some obscure website that looks official.
  3. If that is true, then the Trust has been closed out and “re-securitized” which at best would mean that it was securitized for the first time, still without any real ownership of the loans.
  4. But re-securitization might enable the new Trust to claim the status of holder in due course IF the new Trust paid the old Trust (or anyone else) money for loans that included your loans.
  5. If no purchase payment is made it simply adds to the pile of fabricated documents giving the impression that there are a lot of people who are depending upon these transactions, and who have paid money based on the premise that there were transactions and that the paper was good. That impression, often an assumption or even a misapplied legal presumption is almost never true.
  6. The banks file incomplete, unsigned and often fabricated documents on websites where they can get away with it. http://www.sec.gov is one of those places. I suggest aggressive objection to taking judicial notice of any document on sec.gov because it was not generated by the agency.The fact that someone filed it doesn’t mean that the filing was authentic and certainly doesn’t mean that anything about that filing is probative evidence that the facts as represented by the banks are true. Who filed it? With what authority? Based upon what knowledge of facts? What are the standards for filing on the website?
  7. The fact that “Trust” documents appear on a website does not mean the trust actually exists or is doing business — unless formed under statutory law where the entity is registered with the secretary of state of whatever is the state of incorporation or creation of whatever entity is in play..

Fagan: Defeats Wells Fargo on Judicial Notice

Editor’s Comment: Following up with the offensive strategy and the concept of attacking every weak point in the pretender lender’s strategies, Fagan went after Wells Fargo on the seemingly innocuous motion for the Judge to take Judicial notice of several documents.

Besides the obvious fact that Judicial notice is narrowly construed to allow the FACT that a document was RECORDED (and not as proof of the matters asserted in such documents), Fagan took the offensive and essentially argued that Wells was trying to win a non-judicial foreclosure (in court, which is an oxymoron) using proof that could not be accepted in a judicial foreclosure.

His argument and his citations are right on point. The moral of this story is that if you keep the faith and realize that this entire foreclosure mess is just one part of the securitization scam, then you arrive at the inescapable conclusion that the homeowners should win, not just delay the foreclosures. Once you know you should win, it is easier to take the offensive and start thinking about the cases in a different way.

The question is not just “how do I protect my client” but also how do I win this case.”

Read the documents below and you’ll see how Fagan artfully slices up the Wells Motion for Judicial Notice and how the Court concluded correctly that Wells can’t get away with violating the rules of evidence simply by slipping documents in through the back door.

It looks to me like we are turning the corner here. Deny and Discover has been getting a lot of traction. Stopa has surprised pretender lenders with summary judgment granted in favor of the borrowers and Fagan, is picking apart Wells Fargo. A fellow I know recently said to me “if you you can make it bleed, you can kill it.” He was referring to foreclosures.

SC117023 WELLS FARGO’S REQUEST FOR JUDICIAL NOTICE OF THE DOT, NOD, & SOT Exhibits A B & C

Barry Fagan v WELLS FARGO BANK SC117023 OBjection to Request for Judicial Notice Craig D. Karlan Oct. 23 12

FAGAN V WELLS FARGO RE ORDER DENYING RJN OF THE DOT, NOD & SOT SC117023

BOA’s Tactic of Attempting to Use Judicial Notice in Lieu of Evidence

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see BOA Request for Judicial Notice

Pro Se litigants and attorneys who have not dealt with evidentiary issues surrounding judicial notice get caught by this tactic all too often. Judicial Notice can ONLY be used to establish that something is in the public domain or in public records. It does not eliminate the need to establish a foundation for the document nor are the contents of the document taken as true unless you let it be that way. By citing to the statutes allowing for judicial notice and maintaining your hearsay and other objections (foundation, authenticity, truth of the matter asserted) you can be sure that BOA or any of the other players achieve nothing.

The factual issues surrounding the possession of the note, creation of the documents, authority to sign, forgery, fabrication and notarization are all preserved unless you waive them. And that is exactly what happens in many courtroom situations. The Judge is not going to help you out on this. You have to know what you are doing and make the proper objections once the judicially recognized document is attempted to be used to prove something. Judicial notice only establishes the existence of the document, not that what is contained in the document is true.

The Banks are successfully using this ploy to escape the necessity of putting on perjured or incompetent testimony from a witness who has no personal knowledge to establish the foundation and authenticity of the document and the truth of what is recited in the document. Pro se litigants and lawyers who have not researched the issue assume a defeatist attitude when the court agrees to take judicial notice, without realizing that the court is only saying “OK, I’ll take it as a fact that this document was recorded on the date shown at the book and page shown on the document.” The Court is saying “there is no need to bring someone in from the property records office to establish that the document was recorded.” For everything else BOA needs a live speaking witness with personal knowledge and competence to establish the document and authenticate it.

What the Judge is not saying is “I accept this document and everything in it as true and I accept this document as evidence of the truth of the matters asserted in the documents, including the authenticity and authority for signatures.” The mistake made is out of ignorance, and staying silent as the attorney for the megabank blithely asserts that the matter is settled. Don’t let it happen to you.

Herrera v Deutsch: CA Appeals Court Deals Death Blow to Deutsch — The House of Cards is Tumbling

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Herrera v Deutsch 5-31-11 Cal 3rd District

SEE HERRERA DECISION GOES PUBLIC MAKING IT BINDING ON OTHER COURTS

The Substitution of Trustee recites that the Bank “is the present beneficiary under” the 2003 deed of trust. As in Poseidon, this fact is hearsay and disputed; the trial court could not take judicial notice of it. Nor does taking judicial notice of the Assignment of Deed of Trust establish that the Bank is the beneficiary under the 2003 deed of trust. The assignment recites that JPMorgan Chase Bank, “successor in interest to WASHINGTON MUTUAL BANK, SUCCESSOR IN INTEREST TO LONG BEACH MORTGAGE COMPANY” assigns all beneficial interest under the 2003 deed of trust to the Bank. The recitation that JPMorgan Chase Bank is the successor in interest to Long Beach Mortgage Company, through Washington Mutual, is hearsay. Defendants offered no evidence to establish that JPMorgan Chase Bank had the beneficial interest under the 2003 deed of trust to assign to the Bank. The truthfulness of the contents of the Assignment of Deed of Trust remains subject to dispute (StorMedia, supra, 20 Cal.4th at p. 457, fn. 9), and plaintiffs dispute the truthfulness of the contents of all of the recorded documents.

STUNNING APPELLATE DECISION “GETS IT” AND DEALS DEUTSCH A BLOW FROM WHICH IT CANNOT RECOVER

The Rules of Evidence Finally Prevail — NO Presumptions and NO Judicial Notice

Slowly but surely, every point made on this blog, started 3 1/2 years ago, is coming true. Don’t lose hope. I knew that eventually the cards would fall the other way. The reason I knew is that the basic law being applied in this decision is inescapable. The failure of the trial judge to apply basic law was reversible error. The failure of the homeowner to properly plead his case might have had something to do with that, but the Appellate Court got the main points anyway. So here are some of the quotes that highlight the decision: (Special Thank You to Jake Naumer)

Plaintiffs Robert and Gail Herrera lost their house in South Lake Tahoe to a nonjudicial foreclosure sale. They brought suit to set aside that sale. They challenge whether the parties that conducted the sale, defendants Deutsche Bank National Trust Company (the Bank) and California Reconveyance Company (CRC), were in fact the beneficiary and trustee, respectively, under a deed of trust secured by their property, and thus had authority to conduct the sale.

Defendants also provided a declaration by a custodian of records for CRC, in which the custodian did not expressly declare that the Bank was the beneficiary and CRC the trustee. Instead, she merely declared that an Assignment of Deed of Trust and a Substitution of Trustee had been recorded and these recorded documents indicated the Bank had been assigned the deed of trust and that CRC had been substituted as trustee.

The Bank claimed to be the owner of the Property by virtue of a trustee’s deed recorded “by an entity purporting to be the trustee.”

Plaintiffs alleged CRC was not the trustee and had no authority to conduct a trustee’s sale, and believed no such sale had taken place. They further alleged any promissory note supporting the 2003 deed of trust was “time barred by the statute” and the maker, if any, “was lulled into believing that no action would be taken to enforce the 2003 [deed of trust] because no collection actions were taken within a reasonable time and no legally required notices of deficiency were sent or recorded.”

Plaintiffs alleged the original promissory note and deed of trust no longer existed and the Bank’s deed was invalid “as it is based solely upon purported copies which have no force and effect.”

The third cause of action was to quiet title to the Property. Plaintiffs alleged defendants had no original, verifiable promissory note or deed of trust and had no standing to foreclose. They further alleged all rights, title and interest asserted by defendants “were sublimated into a non-functional `security’ instrument that gives no one entity rights in individual notes and deeds of trust.” No defendant had an interest in the Property, but they had placed a cloud upon plaintiffs’ title.

The Bank and CRC moved for summary judgment or summary adjudication on each cause of action, contending there was no triable issue of fact as to any of plaintiffs’ claims. They claimed the undisputed evidence showed that the loan was in default, the Bank was the beneficiary under the deed of trust and CRC was the trustee. The default was not cured and CRC properly noticed the trustee’s sale. Notice of the sale was sent to plaintiffs and California law did not require the original promissory note to foreclose. The Bank and CRC further contended that to quiet title, plaintiffs must allege tender, or an offer of tender, of the amount owed.

defendants [Bank and CRC] requested that the court take judicial notice of certain documents pursuant to Evidence Code sections 451, subdivision (f) and 452, subdivisions (d), (g) and (h). These documents were:
(1) the Trustee’s Deed upon Sale recorded August 13, 2008, under which plaintiffs took title to the Property;
(2) a Grant Deed recorded December 13, 2002, showing the transfer of the Property to Sheryl Kotz;
(3) the Deed of Trust recorded April 30, 2003, with Sheryl Kotz as trustor and Long Beach Mortgage Company as trustee and beneficiary (the 2003 deed of trust);
(4) an Assignment of Deed of Trust recorded February 27, 2009, assigning all interest under the 2003 deed of trust to the Bank by JPMorgan Chase Bank, as successor in interest to Washington Mutual Bank, successor in interest to Long Beach Mortgage Company;
(5) a Substitution of Trustee recorded February 27, 2009, under which the Bank substituted CRC as trustee under the 2003 deed of trust;
(6) a “Notice of Default and Election to Sell [the Property] Under Deed of Trust” recorded February 27, 2009;
(7) a Notice of Trustee’s Sale under the 2003 deed of trust recorded May 29, 2009; and
(8) a Trustee’s Deed upon Sale recorded July 6, 2009, under which the Bank, as foreclosing beneficiary, was the grantee of the Property.

plaintiffs admitted the description of the Property and that they purchased it on June 24, 2008, at a foreclosure sale; they disputed all of the remaining facts. They asserted that the Brignac declaration was without foundation and contained hearsay and that all of the recorded documents contained hearsay.

They [Plaintiffs-Homeowners] contended defendants failed to meet their burden of proof for summary judgment because their request for judicial notice and Brignac’s declaration were inadmissible hearsay. They further contended the notice of default and the notice of trustee’s sale failed to meet statutory requirements of California law. Finally, they asserted defendants lacked standing to foreclose because they had not produced even a copy of the promissory note.
Plaintiffs moved to strike the declaration of Brignac as lacking foundation and containing hearsay. They also opposed the request for judicial notice. They argued the recorded documents were all hearsay. Citing only the Federal Rules of Evidence and federal case law grounded on the federal rules, plaintiffs argued a court cannot take judicial notice of disputed facts contained in a hearsay document. Plaintiffs disputed “virtually everything” in the recorded documents, arguing one can record anything, regardless of its accuracy or correctness.

Thus, initial issues framed by the pleadings are whether the Bank was the beneficiary under the 2003 deed of trust and whether CRC was the trustee under that deed of trust.

plaintiffs contend the trial court erred in taking judicial notice of the disputed facts contained within the recorded documents. We agree.

“Taking judicial notice of a document is not the same as accepting the truth of its contents or accepting a particular interpretation of its meaning.” (Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374.) While courts take judicial notice of public records, they do not take notice of the truth of matters stated therein. (Love v. Wolf (1964) 226 Cal.App.2d 378, 403.) “When judicial notice is taken of a document, . . . the truthfulness and proper interpretation of the document are disputable.” (StorMedia, Inc. v. Superior Court (1999) 20 Cal.4th 449, 457, fn. 9 (StorMedia).)

Defendants also relied on Brignac’s declaration, which declared that the 2003 deed of trust permitted the beneficiary to appoint successor trustees. Brignac, however, did not simply declare the identity of the beneficiary and the new trustee under the 2003 deed of trust. Instead, she declared that an Assignment of Deed of Trust and a Substitution of Trustee were recorded on February 27, 2009. These facts add nothing to the judicially noticed documents; they establish only that the documents were recorded.
Brignac further declared that “[t]he Assignment of Deed of Trust indicates that JPMorgan Bank [sic], successor in interest to Washington Mutual Bank, successor in interest to Long Beach Mortgage Company, transfers all beneficial interest in connection with the [deed of trust] to Deutsche Bank National Trust Company as Trustee for Long Beach Mortgage Loan Trust 2003-4.” (Italics added.) This declaration is insufficient to show the Bank is the beneficiary under the 2003 deed of trust. A supporting declaration must be made on personal knowledge and “show affirmatively that the affiant is competent to testify to the matters stated.”

At oral argument, defendants contended that the recorded documents were actually business records and admissible under the business record exception. We note that Brignac did not provide any information in her declaration establishing that the sources of the information and the manner and time of preparation were such as to indicate trustworthiness. (Evid. Code, § 1271, subd. (d).)5 Information concerning this foundational element was conspicuously lacking.6 Yet, this information was critical in light of the evidentiary gap establishing the purported assignments from Long Beach Mortgage Company to Washington Mutual Bank to JPMorgan Chase Bank. The records used to generate the information in the Assignment of Deed of Trust, if they exist, were undoubtedly records not prepared by CRC, but records prepared by Long Beach Mortgage Company, Washington Mutual and JPMorgan Chase. Defendants have not shown how Brignac could have provided information about the source of that information or how those documents were prepared. (See Cooley v. Superior Court (2006) 140 Cal.App.4th 1039

the timing of those purported assignments relative to the recording of those events on the Assignment of Deed of Trust cannot be found in the Brignac declaration or anywhere else in the record.
We also note that Brignac did not identify either the February 27, 2009 Assignment of Deed of Trust, or another key document, the February 27, 2009 Substitution of Trustee, as business records in her declaration. Rather, she referenced both documents in her declaration by stating that “[a] recorded copy” was attached as an exhibit. In light of the request for judicial notice, we take this statement to mean that the exhibits represented copies of records on file at the county recorder’s office.7

had the documents reflecting the assignments and the substitution been offered as business records, there would have been no need to request that the court take judicial notice of them. Accordingly, we reject defendants’ newly advanced theory.
Brignac’s declaration is lacking in yet another way. It is confusing as to the effect of the Substitution of Trustee. She declares, “The Substitution by Deutsche Bank National Trust Company as Trustee for Long Beach Mortgage Loan Trust 2003-4 substitutes the original trustee, Long Beach Mortgage Company for California Reconveyance Company.” Brignac’s declaration (and defendants’ statement of undisputed facts) can be read to state that the Bank substituted Long Beach Mortgage Company for CRC as trustee, rather than that CRC was substituted for Long Beach Mortgage Company. We must strictly construe this statement against the moving party. (Mann, supra, 38 Cal.3d at p. 35.) Even if we were to construe Brignac’s declaration to state that the Bank substituted CRC as trustee under the 2003 deed of trust, it would be insufficient to establish CRC is the trustee. A declaration that the Substitution of Trustee by the Bank made CRC trustee would require admissible evidence that the Bank was the beneficiary under the 2003 deed of trust and thus had the authority to substitute the trustee. As explained ante, defendants failed to provide admissible evidence that the Bank was the beneficiary under the 2003 deed of trust.

[SUMMARY JUDGMENT FOR DEUTSCH WAS REVERSED AND REMANDED. DEUTSCH, WHO PROBABLY DOESN’T EVEN KNOW THE CASE IS PENDING, IS SCREWED]


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