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Tonight! DISAPPEARING LEGAL PRESUMPTIONS on the Neil Garfield Show 6PM EDT With Charles Marshall, Esq. and Bill Paatalo

Posted on July 19, 2018 by Neil Garfield

Just the Facts, Ma’am!

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Charles Marshall, California attorney and Bill Paatalo, private investigator, discuss the implications of two Hawaii cases that are mirroring other decisions across the country.

Hawaii Schranz Case

Hawaii St. John Case

The above links go to two recent Hawaii cases dealing with legal standing. The fundamental fact of law is that standing must be ACTUAL NOT PRESUMED.

Specifically the issue is whether the foreclosing party actually had the original note at the time the foreclosure was commenced. Reasserting that standing is jurisdictional and therefore must be proven (with actual facts) present before a party takes any action, the courts here reversed (not for publication) Summary Judgments in favor of U.S. Bank and BONY Melon respectively.

The basis of the ruling is really that summary judgment could not have been granted based upon the submissions of so-called trustees of the probably nonexistent trust that never owned the debts. These decisions can be read as brushing aside presumptions and requiring actual proof of the facts that were heretofore assumed or presumed. The reason is simple. Standing is jurisdictional. Since any case that proceeds without jurisdictional is void and subject to being vacated, the proof must be actual and not presumed.

The interesting reasoning in these decisions is that many courts, including these decisions in Hawaii are starting to rethink their formal and informal presumptions. At the height of the tidal wave of foreclosures the courts took to the notion that the foreclosing party would not have filed if they were not the creditor or at least the possessor of the note with rights to enforce. The giant leap that came thereafter was a ruling that presumed the foreclosing party had possession of the note and the right to enforce it.

These decisions show that there is more movement toward requiring proof rather than the sue of legal presumptions. In plain language the courts are beginning to distrust the banks who bring these actions on behalf of alleged trusts.

Since there was question of fact, the summary judgment could not be granted. Thus the court decisions lay out the procedure, requiring actual proof of contested facts rather than resolving them strictly on the basis of applying legal presumptions which we all know leads to erroneous factual and legal conclusions.

Filed under: foreclosure | Tagged: BoNY-MELLON, legal presumptions, PROOF, summary judgment, US BANK | 3 Comments »

PROOF OF STANDING REQUIRED: SEFFAR v. RESIDENTIAL CREDIT SOLUTIONS INC

Posted on July 5, 2017 by Neil Garfield

It is NOT enough to ALLEGE standing. They must PROVE it. Judges across the country are making mistakes with this simple concept. Standing to SUE is presumed if you allege (in words or by incorporation of exhibits) that you have it. Possession of the “original note” can be alleged but at trial the foreclosing party must PROVE (not argue) that (1) they have the original note and (2) they have the right to enforce it either because they own it or because they have been authorized by a person who owns it or a person who has the right to enforce it.

Get a consult! 202-838-6345

https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments.

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

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In the end we are closing in on the unthinkable: that anyone who was entitled to be treated as creditor was severed from the transactions leaving all other parties floating and leaving legal analysts to wonder (the borrower, that is) or make fraudulent representations (the banks and servicers) that the putative creditors cannot refute.

In the end, with very few exceptions, none of the trusts own anything and none of the servicers or trustees have any authority over any loans. This is the direct result of asymmetry of knowledge. The investors, the borrowers and the closing agents and even the sales agents do not have sufficient information to know what is going on — forcing everyone to look to the “Bank” who appears to be the source of funding.

And the Banks get to explain it in whatever way benefits them the most. They are thus permitted to explain away any hint that they were stealing investor money on an unprecedented scale. That is what happened in the TARP bailout and that is what happens in court.

Here is a 4th DCA case in Florida that spells out the difference between alleging a case and proving it.

SEFFAR v. RESIDENTIAL CREDIT SOLUTIONS INC

Taoufiq SEFFAR, Appellant, v. RESIDENTIAL CREDIT SOLUTIONS, INC., Appellee.

No. 4D13–3514.

Decided: March 25, 2015

David H. Charlip of Charlip Law Group, LC, Aventura, for appellant. Raymond Hora of McCalla Raymer, LLC, Orlando, for appellee.

Appellant challenges a final judgment of foreclosure, claiming that the court erred in denying his motion for involuntary dismissal. He claimed that appellee did not prove standing to foreclose at the time suit was filed. We agree that the evidence is insufficient to show the plaintiff had standing and reverse. (e.s.)

Appellant executed a note and mortgage to ABN Amro Mortgage Group [EDITOR’S NOTE: SEARCH ABN AMRO ON THIS BLOG]. (“ABN”) in 2006. In 2009, appellant received a letter from CitiMortgage informing him that the servicing of his note and mortgage was being transferred from CitiMortgage to Residential Credit Solutions (“RCS”). RCS also sent a letter informing appellant of the transfer of the servicing of the loan. When he defaulted on the mortgage, RCS sent him a notice of default and subsequently filed suit, alleging that it had the right to enforce the note and mortgage. [EDITOR’S NOTE: HOMEOWNER DID NOT DEFAULT ON ANY OBLIGATION DUE RCS]

Attached to the complaint was the mortgage and note to ABN. The note was stamped “original” and did not contain any endorsements or allonges. Also attached was an assignment of the mortgage from the Federal Deposit Insurance Corporation (“FDIC”), as receiver for Franklin Bank, to Mortgage Electronic Registrations Systems (“MERS”), as nominee for RCS. [EDITOR’S NOTE: THE PRESENCE OF EITHER FRANKLIN OR MERS TELLS US THAT THE SUBJECT LOAN IS SUBJECT TO FALSE CLAIMS OF SECURITIZATION WHERE THE SOURCE OF FUNDS HAS BEEN CUT OFF FROM ITS INVESTMENT DESTROYING ITS STATUS AS A CREDITOR]

About nine months after filing the complaint, RCS filed what it claimed was the “original” note. Filed with this note was an undated, blank allonge, payable to the bearer, allegedly executed by a vice president of ABN. Nothing about the appearance of this allonge, as contained in the appellate record, shows that it was affixed to the note with which it was filed. (e.s.) [EDITOR’S NOTE: NO PROOF THE “ALLONGE” WAS ATTACHED? THEN THE ALLONGE IS A NULLITY. NO PRESUMPTION APPLIES].

Just two weeks before the foreclosure trial, RCS moved to substitute Bayview Loan Servicing as the plaintiff, alleging it had transferred servicing of the loan to Bayview. The documents attached to the motion do not mention that the ownership of the loan or mortgage was also transferred. The trial court allowed the substitution over appellant’s objection. (e.s.)

At trial, a litigation manager for Bayview testified. He was not a records custodian for RCS or for Bayview. He was not familiar with the computer systems that either of the prior servicers, CitiMortgage and RCS, used for compiling information on the loan or how it was inputted into the systems. He had no information as to whether the information on the loans was inputted into the prior servicers’ systems correctly. He could not testify to the truth or accuracy of RCS’s records, just that they were provided to Bayview. (e.s. [EDITOR’S NOTE: THESE ARE ELEMENTS OF PROOF THAT ARE ABSENT FROM THE TESTIMONY OF NEARLY EVERY ROBO-WITNESS]

He testified that Bayview was the servicer and holder of the note. He believed that Bayview had acquired the note through a purchase agreement with RCS, but he had not seen the agreement, nor did he have a copy of it. His belief that Bayview was the owner of the note under the purchase agreement was based on “a screen shot of our capital assets systems, which has information in regards to the status of the loan with us.” This screen shot was not produced at trial.

[Editor’s NOTE: Recent case decisions state that screen shots are hearsay and do not fall within any exceptions to the hearsay rule and are therefore barred from being admitted into evidence. The most important point to take away from this is that the witness nearly always knows absolutely nothing other than the script that he was required to memorize. Getting to that is actually fairly easy if you know how to do cross examination.]

As to the allonge with the blank endorsement from ABN, he did not know when it was executed or whether the signature on it was a “wet ink” signature or a stamp. He did not know whether the allonge was affixed to the note prior to it being filed in the court file. He did not know if the vice president who signed the allonge on ABN’s behalf was in the employ of ABN in November 2009, when Bayview’s records showed that servicing of the loan had been transferred from ABN to Franklin Bank. (e.s.)

The manager agreed that on January 29, 2010, when RCS mailed appellant a notice of intent to take legal action on the note and mortgage, RCS was not the owner and holder of the note by way of the September 30, 2009 assignment of mortgage, but testified, “[t]here may have been a purchase agreement or some other document.” He testified that, on that date, “I only know that RCS was servicing. I don’t know for a fact who was the holder of the note at the time.” While he did testify that RCS owned the note and mortgage on the date the complaint was filed, he then inconsistently stated that RCS had brought the suit as the servicer of the loan, not its owner. (e.s.)

Although appellant moved for involuntary dismissal on the ground that Bayview had not proved standing because it had not shown that it had the right to enforce the note and foreclose the mortgage, the trial court rejected this claim. It entered a final judgment of foreclosure in which it found that Bayview was due and owing the unpaid balance of the note. This appeal follows.

Appellant argues that Bayview failed to prove that it was the owner or holder of the note and that it had the right to foreclose. Based upon this confusing record, we agree that it presented no competent evidence that RCS was the holder of the note at the time it filed suit or that it was a nonholder in possession and entitled to enforce the note. Therefore, Bayview failed to prove standing.

Standing of the plaintiff to foreclose on a mortgage must be established at the time the plaintiff files suit. See McLean v. JP Morgan Chase Bank Nat’l Ass’n, 79 So.3d 170, 173 (Fla. 4th DCA 2012). McLean set forth the requirements that a plaintiff may prove standing in a mortgage foreclosure:

Standing may be established by either an assignment or an equitable transfer of the mortgage prior to the filing of the complaint ․ For example, standing may be established from a plaintiff’s status as the note holder, regardless of any recorded assignments․

If the note does not name the plaintiff as the payee, the note must bear a special endorsement in favor of the plaintiff or a blank endorsement․ Alternatively, the plaintiff may submit evidence of an assignment from the payee to the plaintiff ․

Even in the absence of a valid written assignment, the mere delivery of a note and mortgage, with intention to pass the title, upon a proper consideration, will vest the equitable interest in the person to whom it is so delivered.

Id. at 173 (citations and quotation marks omitted).

Appellant notes several deficiencies in Bayview’s proof which result in a failure to show standing to foreclose the mortgage. First, while the note and mortgage were originally held by ABN, the only assignment of mortgage attached to the complaint and introduced at trial was one from FDIC as receiver for Franklin Bank to MERS as nominee for RCS. There is no proof of any transfer of the note or mortgage from ABN to Franklin Bank. Second, while Bayview contends that the undated allonge supplies the connection, as it shows a transfer payable to bearer, there was no proof that the allonge was attached to the note, and Bayview presented no proof of when it was executed. (e.s.) [EDITOR’S NOTE: THE ENDORSEMENT MEANS NOTHING IF IT WASN’T ON THE NOTE. IT WASN’T ON THE NOTE UNLESS THE ALLONGE WAS AFFIXED TO THE NOTE. THE ENDORSEMENT MEANS NOTHING WITHOUT FOUNDATION TESTIMONY PROVING THAT THE ENDORSER HAD THE AUTHORITY TO EXECUTE THE ENDORSEMENT] Finally, there was no competent evidence of what rights Bayview acquired from RCS.

We recently addressed how a plaintiff may show it is entitled to foreclose on a promissory note in Murray v. HSBC Bank, 40 Fla. L. Weekly D239 (Fla. 4th DCA Jan. 21, 2015):

“Because a promissory note is a negotiable instrument and because a mortgage provides the security for the repayment of the note, the person having standing to foreclose a note secured by a mortgage may be ․ a nonholder in possession of the note who has the rights of a holder.” Mazine v. M & I Bank, 67 So.3d 1129, 1130 (Fla. 1st DCA 2011).

A “person entitled to enforce” an instrument is: “(1) [t]he holder of the instrument; (2)[a] nonholder in possession of the instrument who has the rights of a holder; or (3)[a] person not in possession of the instrument who is entitled to enforce the instrument pursuant to s[ection] 673.3091 or s[ection] 673.4181(4).” § 673.3011, Fla. Stat. (2013). A “holder” is defined as “[t]he person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession.” § 671.201(21)(a), Fla. Stat. (2013). Thus, to be a holder, the instrument must be payable to the person in possession or indorsed in blank. See § 671.201(5), Fla. Stat. (2013).

Although, nine months after filing the complaint, RCS filed what purported to be the original note with an allonge payable to bearer, it was undated and there is no proof it was affixed to the promissory note. “An allonge is a piece of paper annexed to a negotiable instrument or promissory note, on which to write endorsements for which there is no room on the instrument itself. Such must be so firmly affixed thereto as to become a part thereof.” See Booker v. Sarasota, Inc., 707 So.2d 886, 887 n. 1 (Fla. 1st DCA 1998) (quoting Black’s Law Dictionary 76 (6th ed.1990)); see also Isaac v. Deutsche Bank Nat’l Trust Co., 74 So.3d 495, 496 n. 1 (Fla. 4th DCA 2011). The litigation manager did not know when the allonge was executed, or whether it was affixed to the note prior to filing. No evidence was presented that the allonge was executed and attached to the note prior to the filing of the initial complaint. Indeed, RCS did not allege in the complaint that it owned and held the mortgage. It merely alleged that it had the right to foreclose the note and mortgage. Therefore, the allonge provided no evidence that RCS was a “holder” at the time it filed the complaint.

Alternatively, Bayview argues that RCS was a nonholder in possession. However, Murray shows the fallacy of that claim. In Murray, we held that the lender, HSBC, had not proved standing where it had alleged that it was a nonholder in possession of the note and mortgage, because it did not prove that each prior transfer of the note conferred the right to enforce it: (e.s.)

HSBC was thus left to enforce the note under section 673.3011(2) as a nonholder in possession of the instrument with the rights of a holder. The issue then is whether HSBC is a nonholder in possession with the rights of a holder.

Anderson v. Burson, 424 Md. 232, 35 A.3d 452 (2011), is instructive. There, the court held that the plaintiff was a nonholder in possession and analyzed whether it had rights of enforcement pursuant to a Maryland statute that employs the same language as section 673.3011, Florida Statutes. Anderson, 35 A.3d at 462. “A transfer vests in the transferee only the rights enjoyed by the transferor, which may include the right to enforce [ment],” through the “shelter rule.” Id. at 461–62.

A nonholder in possession, however, cannot rely on possession of the instrument alone as a basis to enforce it․ The transferee does not enjoy the statutorily provided assumption of the right to enforce the instrument that accompanies a negotiated instrument, and so the transferee “must account for possession of the unendorsed instrument by proving the transaction through which the transferee acquired it.” (e.s.) [EDITOR’S NOTE: NO PRESUMPTIONS AND THEREFORE NO CASE FOR ENFORCEMENT IF NO TRANSACTION PROVEN. THE TRANSACTION IS NOT PRESUMED] Com. Law § 3–203 cmt. 2. If there are multiple prior transfers, the transferee must prove each prior transfer. Once the transferee establishes a successful transfer from a holder, he or she acquires the enforcement rights of that holder. See Com. Law § 3–203 cmt. 2. A transferee’s rights, however, can be no greater than his or her transferor’s because those rights are “purely derivative.” (e.s.)

Murray, 40 Fla. L. Weekly D239 (emphasis in original) (internal citations omitted). Because HSBC did not offer evidence of one of the prior transfers of the note, we held it did not prove that it was a nonholder in possession.

Similarly, in this case, Bayview did not prove that either RCS or itself was a nonholder in possession. It never connected FDIC as receiver of Franklin Bank, from which RCS acquired an assignment of mortgage, to ABN, the original note holder.

As alternative proof of its “ownership” of the note and mortgage, Bayview relied on a letter from RCS to the appellant, notifying him of the transfer of servicing rights to RCS, and a similar one from Bayview when it became the servicer of the loan. Neither letter addressed a right to enforce the note. None of the servicer agreements were placed in evidence to prove what rights either RCS or Bayview acquired under those agreements. (e.s.) [EDITOR’S NOTE: It is very rare that the servicer agreements are proffered by “Plaintiff” Trust (or other sham nominee) in evidence because those agreements, like Assignment and Assumption Agreements contain information that the securitization players don’t want the borrower, the court or government regulators or enforcers to see].Finally, as to the transfer between RCS and Bayview, the litigation manager testified that while he believed that Bayview purchased the note and mortgage from RCS, he had never seen a purchase agreement, and no document memorializing the purchase was entered into evidence. Therefore, because there is a gap in the transfer of the note and mortgage, Bayview did not prove that RCS, and subsequently Bayview, were nonholders in possession. See Murray, 40 Fla. L. Weekly D239.

Simply stated, the evidence presented was woefully inadequate to prove standing to foreclose. It was quite apparent from the record that Bayview’s litigation manager did not have the requisite knowledge, nor did he produce documentary evidence, to support the claim.

We thus reverse and direct judgment in favor of the appellant dismissing the foreclosure on the mortgage for failure of the appellee to prove its standing.

Reversed and remanded.

WARNER, J.

CIKLIN and GERBER, JJ., concur.

Filed under: foreclosure | Tagged: ABN AMRO, Bayview LOan Servicing, Citimortgage, evidence, FDIC, MERS, PROOF, Residential Credit Solutions, robo-witness | 11 Comments »

RESCISSION: When the Judge Gets it Wrong

Posted on March 14, 2016 by Neil Garfield

WE HAVE REVAMPED OUR SERVICE OFFERINGS TO MEET THE REQUESTS OF LAWYERS AND HOMEOWNERS. This is not an offer for legal representation. In order to make it easier to serve you and get better results please take a moment to fill out our FREE registration form https://fs20.formsite.com/ngarfield/form271773666/index.html?1453992450583

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THE FOLLOWING ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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Based upon my own experience and what has been reported to me from around the country, most trial judges are making the mistake of confusing argument and facts when it comes to TILA Rescission. They are either expressly or tacitly ruling that at best, TILA Rescission is a claim or defense — which means that in order for Rescission to have any effect, it must be litigated. This is wrong and it has been expressly rejected by both the TILA Rescission Statute, and U. S. Supreme Court in the Jesinoski decision.

I offer the following, drafted by me, as a response to when Court’s essentially overrule the the highest and final court in the land. I suspect that the resistance by trial judges to the effects of rescission will not be resolved, in most instances, without an appellate court saying for the second time that Courts are wrong when they disregard or try to change the wording of the TILA Rescission statute.

Comments are welcome: neilfgarfield@hotmail.com

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Motion for Reconsideration on Defendant’’s Motion to Dismiss For Lack of Subject Matter Jurisdiction

A trial Court has the inherent authority to control its own interlocutory orders prior to Final Judgment. North Shore Hospital Inc. v Barber 143 SO 2d 849, 850 (Fla 1962).
While non-final orders were not subject to a motion for rehearing, a trial judge nevertheless had the discretion to choose to entertain such a motion precisely because it had jurisdiction to control its non-final orders prior to entry of Judgment. Commercial Garden Mall v Success Academy Inc. 57 So 3rd 982 (Fla 2nd DCA 2011).
An order denying a Motion to Dismiss is interlocutory. See Nationwide Ins Co. of Florida v Demo 57 So 3d 982 (Fla 2nd DCA 2011.
Here this Court heard Defendant’s Motion to Dismiss on March 10, 2016 and denied, apparently without prejudice to raise the issue of rescission as a defense, Defendant’s Motion to Dismiss for lack of subject matter jurisdiction.
TILA Rescission is neither a claim nor a defense. It is a legal act that has legal effect when completed. The only factual issues are whether the rescission was sent, which in this case is undisputed. TILA Rescission is effective as a matter of law, when mailed. Its effect is to void the note and void the mortgage and trigger specific statutory duties of the “lender” under 15 U.S.C. §1635 et seq. Jesinoski v Countrywide 574 U.S. ___ (2015) and Regulation Z. C.F.R. (Federal Reserve as succeeded by Consumer Financial Protection Board).
The gravamen of what was argued before the Court was that the note and mortgage, being void by operation of law, could not be the subject of any legal action.
Since the Plaintiff’s entire case rested on the use of two void instruments — the note and mortgage — and there is no allegation in the Plaintiff’s complaint asserting legal standing of an creditor seeking to collect on a debt, the Court does not have any justiciable issue before it. There is no count in Plaintiff’s complaint that seeks to recover on a debt, naming as Plaintiff the owner of the debt. In this case Plaintiff admits the Creditor (owner of the debt) is not the Plaintiff. The complaint seeks solely to enforce the paper instruments — the note and/or mortgage — both of which are now void by operation of law.
There is also no lawsuit by any real party in interest seeking to vacate the rescission that has indisputably been sent, received and recorded in the County records — and which has been indisputably ruled as legally effective by the U.S. Supreme Court.
At the hearing it was admitted by that the owner of the debt was the “investor” who was distinguished from the Trust.
The rescission that was indisputably mailed and received removes standing of the putative Plaintiff. Without the note and mortgage, only the debt remains. And the only party with standing to seek collection on the debt is the Investor, who is not party to the instant action. And according to the TILA Rescission statute such a “creditor” must either first FULLY comply with the TILA Rescission statutory duties or first file a lawsuit to vacate the rescission (which currently has the same force and effect as an order of any court of competent jurisdiction).
No lawsuit demanding that the Court vacate the rescission has been filed by anyone. Yet this Court has effectively granted such relief without any real party in interest, without a lawsuit seeking to vacate the rescission sent by borrower, and without any pleading in which a [proper party seeks to remove the recorded rescission that was filed in the County records. This Court instead is ignoring the rescission as though it does not have any legal effect despite the clear pronouncements of the TILA Rescission Statute, Regulation Z, and the clear and final ruling by a unanimous Supreme Court of the United States.
Plaintiff lacks standing even if Defendant’s defenses based upon an untimely fabricated assignment are over-ruled.
Defendants assert that this Court misapprehended argument and facts.
The undisputed facts are that the TILA rescission was sent and received. The fact remains now that the rescission is effective and remains effective as a matter of law. The undisputed facts, as a matter of law, remain that the note and mortgage were both rendered void by operation of law by the sending of a letter of rescission by the alleged “borrower.”
The Court’s decision was that the issue of the effectiveness of the rescission was a defense and not the proper subject of a Motion to Dismiss for lack of jurisdiction.
The error asserted by Defendants is that this Court’s ruling essentially “over-rules” the Supreme Court of the United States in Jesinoski v Countrywide, a copy of which was provided to the Court at the hearing. Defendants state the obvious: this court lacks authority to overrule the highest court in the land.
To hold that rescission is a defense to be litigated flies in the face of the unanimous Supreme Court ruling that NO LITIGATION is required to make rescission effective. No Lawsuit is required. Jesinoski, Supra.
Rescission is effective by operation of law. 15 U.S.C. §1635, Regulation Z. Jesinoski Supra — all of which state that rescission is effective as a matter of law when mailed and that no claim or lawsuit or ruling by any court is required by the borrower to make it effective.
The effect of this Court’s ruling is to over-rule the Supreme Court of the United States and rewrite the TILA rescission statute that is a very clear and specific remedy WITHOUT THE NECESSITY OF THE BORROWER RAISING THE ISSUE IN LITIGATION. The entire point of the TILA Rescission statute was to prevent “lenders’ from stonewalling the effect of the rescission. The rescission is immediately effective as a matter of law, when mailed.
By ruling otherwise, this Court is following a rule of law explicitly rejected by the U.S. Supreme Court.
This Court is following a rule of law that has been expressly repudiated by the highest and final court in the land. The effect of this Court’s ruling is to make the rescission NOT EFFECTIVE until it is raised in defense of a foreclosure and then only after the effectiveness of there rescission is litigated in a lawsuit. The U.S. Supreme Court says otherwise in a unanimous decision penned by the late Antonin Scalia.
In the Jesinoski decision it was stated clearly and unequivocally that the rescission, whether disputed or not, IS effective upon mailing, without any further action on the part of the borrower. The burden of disputing (pleading and proving standing and a cause of action to vacate the rescission) falls solely and squarely on the parties who received the notice of rescission.
The Jesinoski Court further explicitly stated that hundreds of trial and appellate courts across the land were wrong when they had previously ruled, as this court has just done, that the rescission was subject to litigation and that the “borrower” must bring a legal claim or lawsuit seeking to make the TILA Rescission effective..
The Defendants assert that this Court’s apparent unfamiliarity with the Jesinoski decision, the TILA Rescission Statute and Regulation Z, combined with the Court’s understanding of common law rescission resulted in an erroneous ruling that was expressly and explicitly ruled out by the Supreme Court of the Untied States. This court may not read in the rules of common law rescission to a specific statutory scheme that is clear on its face.
It is clear that the the Supreme Court of the United States has decided, as the Final Authority, that the TILA rescission statute is clear and unambiguous on its face, thus eliminating any right, authority or jurisdiction to read into or interpret the TILA Rescission statute. It is equally clear from the express wording of the Jesinoski decision that reading in common law rules of rescission is erroneous, as such “interpretation” was rejected by a unanimous Supreme Court as unlawful and wrong.
There is no escaping the fact that the rescission is effective by operation of law.
Accordingly, Defendants assert that this court has no room for interpretation or authority or jurisdiction to change or interpret the TILA rescission statute such that the borrower must raise rescission as a defense — a requirement that unlawfully denies the effectiveness of the rescission when mailed.
Accordingly Defendants assert that this Court committed error by ruling that rescission was a defense requiring pleading and proof in order for the rescission to be effective as a matter of law. Defendants thus request this Court revisit the issue and correct its prior ruling.

Filed under: foreclosure | Tagged: disclosure, foreclosure defense, foreclosure offense, jesinoski, JURISDICITION, Pleading, PROOF, Regulation Z, securitization, Supreme Court, TILA rescission | 18 Comments »

Fla 4th DCA: The Starting Point is Standing — If You Don’t Have It, There is no Jurisdicition

Posted on October 20, 2015 by Neil Garfield

For further information please call 954-495-9867 or 520-405-1688

This is not a legal opinion on any case. Consult with an attorney.

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see Rodriguez v. Wells Fargo

“The core element concerning to whom the note was payable on the date suit was filed was not proven.”

Bottom Line: You can’t file a lawsuit without standing. Judgment reversed with instructions to enter Judgment for the homeowner. And you can’t cure standing by getting it later. That would be like filing suit for a slip and fall in front of a super market, and once the suit was filed, you then go to the supermarket, get out of your car and proceed to slip and fall. And the second story is that the BURDEN OF PROOF is on the foreclosing party, not the homeowner.

Many courts are now leaning away from the legal fantasies being promoted by “servicers”, “trustees’ and other parties attempting to “foreclose” on debts that very often are (a) not owned by them (b) they have no authority to represent the owner of the debt (c) the alleged creditor is not showing a default on its books (d) on behalf of a Trust that (1) never operated (b) exists only on paper (c) with no bank account (d) no financial statements (no assets (e) no liabilities (f) no income (g) no expenses.

All this is becoming abundantly clear. The prior assumptions that allowed for some crossover between a holder and a holder in due course are giving way to another look, starting from the beginning. In this case there was no endorsement on the note at all. The Appellate court said that ended the inquiry. There was no lawsuit, it should have been dismissed and now judgment, entered by the Judge in West Palm beach is reversed with instructions to enter judgment for the Defendant homeowner.

In my opinion the courts are now being presented with the correct arguments and facts that leave them in a position where if they allowed these kinds of action they would be setting a precedent making it legal to steal.

And my question remains: IF THERE REALLY WAS A REAL TRANSACTION WHERE SOMEONE FUNDED THE LOAN AND SOMEONE ELSE BOUGHT THE NOTE THEN WHY DON’T THEY ALLEGE THAT THEY ARE HOLDERS IN DUE COURSE? If they alleged HDC status all they would need to prove is payment. No “borrower” defenses would apply. If they don’t have HDC status then on whose behalf is the foreclosure actually being filed, since the investors are getting paid anyway? I think the answer is that the servicer is converting a tenuous claim for volunteer payments on behalf of the borrower to investors who don’t know what loans they own; the real claim is that the servicer wants to “recover” servicer advances that it paid out of third party funds. These servicers are reaping windfalls every time they get a foreclosure sale.

This Court quotes approvingly from the UCC: “… the transferee cannot acquire the right of a holder in due course if the transferee engaged in fraud or illegality affecting the instrument.” And goes on to quote the statute “a person who is party to fraud or illegality affecting the instrument is not permitted to wash the instrument clean by passing into the hands of a holder in due course and then repurchasing it.” see § 673.2031

The court concludes that there is no negotiation of the note until an endorsement appears — which read in conjunction with the rest of the opinion means that the endorsement must be by someone who is either a holder in due course or a party representing a party who is a holder in due course. If no holder in due course exists, then there is no way to construe the instrument as a negotiable instrument and there is no way to construe the instrument as having been negotiated under the UCC. And THAT means they must prove every aspect of the transaction (starting with origination) without relying on the suspect instruments.

See also 4th DCA — Standing is “Foreclosure 101” Peoples v. SAMI II Trust

Filed under: foreclosure | Tagged: HOLDER, holder in due course, Pleading, PROOF, standing, UCC | 40 Comments »

Assignee stands in the shoes of the assignor: It must prove the loan

Posted on June 5, 2015 by Neil Garfield

For further information please call 954-495-9867 or 520-405-1688

This article ( and any other article on this blog) is no substitute for getting advice from an attorney licensed to practice in the jurisdiction in which the subject property or transaction is located.

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see http://www.lowndes-law.com/news-center/1797-two-layers-protection-lenders-need-know-about-floridas-holder-due

There is a difference between alleging you are the holder with rights to enforce and proving it. If the bank, trustee or servicer alleges that it has the right to enforce then they will survive a motion to dismiss. But if the borrower denies that allegation is true, the burden of proof falls on the party making the allegation — the bank, trustee, servicer etc. The mistake made by Judges and lawyers is that they don’t make the distinction between pleading and proof. As a result you get decisions that include multiple rulings that prevent the borrower from conducting adequate discovery and allow the party bringing the foreclosure action to skate by because “it has already been established” that they are a holder with rights to enforce. That being the case the courts further compromise the verdict and judgment by over-ruling objections from the borrower on grounds of relevance.

One of the key points I have been making for 8 years is that the party bringing the foreclosure essentially never says that it is a holder in due course. In fact, we have had cases where opposing counsel expressly denies that the Plaintiff is a holder in due course. That is particularly remarkable where the Plaintiff is, for example, Citimortgage, which maintains an ambiguous status, admitting that it is a servicer but not revealing the creditor or the basis on which they rely in alleging that they are the servicer.

The importance of holder vs holder in due course cannot be over-stated. And if the loan was alleged to have been transferred while the loan was already declared in default, there can’t be a holder or holder in due course because the UCC does not apply those terms to anything but a negotiable instrument which by definition must not be in default at the time of transfer. Otherwise it is not a negotiable instrument and the allegations and proof go the the issue of ownership of the debt.

It is interesting that the banks and servicers, etc. do not allege status as holder in due course. In many cases they have back-dated the assignment or endorsement to before the alleged default. Where the Plaintiff is a trust, all they would need to show is what is in the trust instrument (PSA): purchase in good faith without knowledge of borrower’s defenses. That would be the end of almost every case — the borrower is liable to a holder in due course and may bring claims only against the intermediaries or originator in damages. The foreclosure would be completed in record time and that would be the end of it, except for borrower’s claims for damages against parties other than the Plaintiff who proved they were a holder in due course — i.e., proof of purchase for valuable consideration without knowledge of the borrower’s defenses and in good faith.

The problem with court decisions over the last 10 years is that they treat the alleged “holder” as though they were a holder in due course without any allegation or proof that the foreclosing party purchased the loan, in good faith, without knowledge of borrower’s defenses. A holder is not better than the party before they were an alleged holder. And THAT party is no better than the party before and so on.The only exception to this is where the FDIC involved in certain types of take-overs.

Eventually you get to the origination of the loan. THAT loan contract must be proven by a holder in order to prevail in foreclosure. And as every first year law student knows there is no contract without offer, acceptance and consideration. If the originator did not fund the loan there is no contract and the closing violated Reg Z, which calls such transactions predatory per se (which in turn means that the foreclosing party presumptively has unclean hands and is not entitled to any equitable remedy much less foreclosure).

If an alleged holder did not actually purchase the loan, then they don’t own it. It really is that simple. If they don’t own it then they must allege and prove the basis of their allegation that they possess the right to enforce. That also requires a contract with offer, acceptance and consideration. The existence of assignment does not prove that such a transaction took place but it might be admitted in evidence as evidence that such a transaction took place. On the other hand it might not be admitted in evidence if there are defects relating the instrument to the proof of the matter asserted.

Even if admitted, the assignment is not dispositive. Upon cross examination, the witness will probably know nothing about any transaction in which ownership or the rights to enforce were transferred or conveyed. And it is at that point where Judges and lawyers commit error. The assignment may then be struck from the record as lacking any foundation. This is not just a matter of hearsay. It is a question of how can the trier of fact rely upon an instrument (assignment) when there is nobody to testify that the transaction actually occurred? It is the same problem with the note executed at “closing.” How can the loan contract be completed if the payee on the note didn’t loan any money?

In the article cited above, the author makes the point easily:

As an assignee typically “stands in the shoes” of his assignor,7 without the holder in due course doctrine and its federal counterpart, these allegations may defeat the purchaser’s action or make it much more difficult and costly to pursue, especially given that the purchaser took no part in the these “bad acts,” and that the people who did take part (the management and employees of the failed bank) may be difficult to reach and may have little incentive to cooperate with the purchaser. [e.s.]

most of these difficulties are eliminated by the powerful effect of the holder in due course doctrine as it can clear the way for the purchaser to recover, even if there may have been prior “bad acts” of the failed bank, as the purchaser will acquire the loan free and clear of most defenses—the so-called “personal defenses”— that the borrower could have asserted against the failed bank.8 The holder in due course doctrine, when applicable, enables the purchaser to avoid liability for many of these “personal defenses” which may have been valid defenses to an action brought by the failed bank, but do not impede the ability of a holder in due course to enforce the borrower’s obligation to repay the loan.9 Generally speaking, these defenses are all defenses that would be available in a breach of contract action10 except for the “real defenses,” all of which involve either the original execution of the promissory note or its subsequent discharge in bankruptcy.11 These defenses cannot be avoided, even by a holder in due course. Fortunately, any “bad acts” of the failed bank which may have occurred during the course of the loan will hardly ever form the basis for a “real defense,” and thus can likely be avoided by a holder in due course.

THE RULE IN FLORIDA
In Florida, the holder in due course doctrine is now codified in statute,12 although it first began to develop in the English common-law as early as the late 1600s and early 1700s and was codified in that country by the Bills of Exchange Act in 1882.13 The doctrine first became codified in the United States in the early 1900s as states adopted the Uniform Negotiable Instruments Law, which was later supplanted by the Uniform Commercial Code, which governs today.14

In order to be a holder in due course under current Florida law, a purchaser of a negotiable instrument must generally satisfy three conditions. Specifically, the purchaser must have: (i) acquired an instrument that does not bear any apparent evidence of forgery, alteration, or any other reason to call its authenticity into question;15 (ii) paid value for the instrument;16 and (iii) acquired the instrument in good faith, without notice that it is overdue, dishonored, contains an unauthorized or altered signature, and without notice of any claim to the instrument.17 If these three conditions are met, the purchaser will generally qualify as a holder in due course and take the instrument free all “personal defenses” that the borrower could have asserted against the prior lender.

Filed under: foreclosure | Tagged: Florida UCC, HOLDER, holder in due course, Pleading, PROOF | 94 Comments »

Confusion in The Courts: Pleading vs Proof

Posted on February 2, 2015 by Neil Garfield

For further information please call 954-495-9867 or 520-520-1688

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A lot of the questions that come in to me relate to the issue of whether the ability to enforce a set of loan documents is a question of law or a question of fact. The answer, I think, is both.

The confusion seems to be on the issue of pleading vs proof. As a matter of law, the courts are largely correct as to their ruling on whether the Plaintiff in a judicial state is fine with alleging bare statements of ultimate facts upon which relief could be granted. But where the judges go astray, based upon improper legal reasoning advanced by the banks, is that they apply the same pleading requirements at trial or even summary judgment.

At trial they must prove the transactions upon which they rely. If the allegation from the owner or the denial and affirmative defenses of the homeowner raise an issue of fact as to the authenticity, validity or enforceability of the paperwork relied upon by the bank, then the bank must prove the underlying transaction. If the homeowner does not raise that issue of fact, then the court is correct in allowing virtually anything in as evidence and awarding the foreclosure to the bank.

But that said, to return to yesteryear, Judges are supposed to actually review the paperwork even in an uncontested situation to see if there are inconsistencies or even something that jumps out at them this is plainly wrong. for example, if the default letter says that for reinstatement, you must pay $6700 in monthly payments to bring the account current and your monthly payments are $3100, the letter is defective. How many months are they saying you are in default? It’s a simple matter of division. This also throws off the date of the alleged default, so there is no compliance with paragraph 22 provisions.

Similarly, if the foreclosing party is saying they have rights to enforce, that is enough to plead their case. But at trial they must tell the story of how they came into the right to enforce the paper. It is this latter part where the courts have erred and where the reversals from appellate courts are coming from. The presumptions at the pleading stage do not apply to the burden of proving facts.

I think the courts are coming around on this issue but it must be presented properly. A thief can sue on the note he stole even if he forged a blank or special endorsement. He will survive a motion to dismiss although law enforcement might be waiting in the back of the room to arrest him.

The presumption at the pleading stage is that possession implies being a holder. And being a holder implies being a holder with rights to enforce, and potentially one might even infer that the holder is a holder in due course. But at trial where the facts are contested, the thief must tell the story of his possession and rights to enforce. The fact that the actual payee or holder does not know the note was stolen does not or should not shift the burden of proof onto the homeowner to prove facts that are exclusively within the knowledge and care, custody and control of the thief.

The homeowner must merely deny that the thief is a holder with rights to enforce.

Filed under: foreclosure | Tagged: BURDEN OF PROOF, Pleading, presumptions, PROOF | 28 Comments »

Pleading Wrongful Foreclosure

Posted on January 9, 2015 by Neil Garfield

For more information please call 954-495-9867 or 520-405-1688

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see https://fightforeclosuredotnet.wordpress.com/2013/12/12/what-homeowners-must-know-about-pleading-their-wrongful-foreclosure-cases-in-the-courts/
The above link provides some very good guidance about pleading wrongful foreclosure although it appears to relate more to non-judicial states than judicial states. Remember that pleading fraud not only requires specificity but must be proved. The fact that the foreclosure filing was wrong is one thing but proving it was fraudulent rather than negligent or breach of contract is quite another.

If you are in active litigation then seeking sanctions might be either an alternative or something in addition to a separate lawsuit that arises when the case is decided in favor of the homeowner. As we have seen over the last few years, the grounds upon which these cases are decided in favor of the homeowner vary widely. Some decisions show that the acts of Deutsch or Chase or Wells Fargo or CitiMortgage et al were committed with full knowledge of what they were doing and that they were playing a shell game on the court and on the borrower. Those cases seem more conducive for fraud or spurious litigation or wrongful foreclosure. A decision based upon non-compliance with paragraph 22 — defects in the notice of default or right to reinstate or notice of acceleration might be the subject of abuse of process and might not. But without more in the proof or opinion from the Court the issue of fraud or intentional tort of some other kind seems more difficult.

Lack of standing means the homeowner wins but it does not mean necessarily that a case for fraud or wrongful foreclosure will be successful. The opposition will respond (affirmative defense) that the mistake in standing does not establish any entitlement to damages or any other action by the court because the right to foreclose still exists on behalf of some entity. But this defense is basically a crystal ball defense unless there is an established creditor who is legally pursuing collection on the loan.

Cases in which the bank blocked the sale or refinance of the property, or unilaterally tried to avoid a modification, or where the borrower was in fact current when actions by the bank forced the borrower into the illusion of default are the best cases, in my opinion, for a wrongful foreclosure.

In short, the law is murky on these issues because the whole truth about securitization “fail” has not been fully absorbed and processed by the judicial system. Right now most judges are making rulings based upon the assumption that securitization is irrelevant — a view that is inconsistent with the the alleged right of the beneficiary or mortgagee to initiate foreclosure and pursue collection. The rights to do so exist in the PSA which is often admitted into evidence. Thus the same court that accepts the PSA into evidence will often rule that the provisions that require servicer advances (hence, no default as per books of the Trust or Holders of Certificates) or PSA provisions that block any right to pursue foreclosure or collection by the Trustee or the Trust are not relevant. But the general rule is that once a document is admitted into evidence the parties can use it any way they want.

Filed under: foreclosure | Tagged: fraud, Pleading, PROOF, wrongful foreclosure | 57 Comments »

Basic Pleading Defects Reveal Fatal Flaws in Foreclosures

Posted on September 23, 2013 by Neil Garfield

I have frequently made the point that if you want to protect your case on appeal, you must have a coherent and accurate record established in the court file or you will be shunted away on a technicality of some sort. The strategy I endorse, and the only one I use is aggressive litigation from the start. This alone will help remove your case from the pile of deadbeat borrowers who are just trying to string out the inevitable. In order to do that, you must reject the paradigm that the debt, loan, note, mortgage, default and notice of default are valid and that the sale was valid. In order to do that you need to do your research. It is my opinion that there is going to be a wave of malpractice suits against lawyers who told their clients “there is nothing you can do.”

In most cases, this is not true. There are plenty of defenses, chief among them PAYMENT and denial that the contract was ever formed — because neither the forecloser nor any of its predecessors loaned any money to the homeowner.

The flip side of the coin is also true. If the other side pleads improperly and fails to prove their case, they have a poor record for appeal and usually won’t. Applying basic rules of law and pleading, it is apparent that most foreclosures are based on pleadings that don’t have two essential ingredients. They don’t allege that the borrower received money from the forecloser or its predecessor and they don’t allege financial injury. The first defect leads to the conclusion that there can be no injury if the loan was not made by the forecloser or its predecessors. The second defect fails to invoke the court’s jurisdiction.

It is well-settled in the law that in order to invoke the court’s jurisdiction the Pleader must allege an injury that is recognizable by law. This allegation is required in every type of lawsuit. It is equally well-settled that the Pleader must allege a short plain statement of ultimate facts upon which relief could be granted. Further, it is well settled that the facts alleged cannot be formulaic conclusions. —- a point that is always hammered by the Banks when confronted with a claim or counterclaim from homeowners. They are right. But what is good for the goose is good for the gander.

In the days before the dust cloud of sham securitizations a Bank had to allege it made a loan to the homeowner or that it had purchased a loan, or acquired it through merger from an entity that made the loan. Why then are Banks skipping this essential allegation? And why are the Banks avoiding any allegation that they suffered financial injury?

In the old days if a lawyer went to court on an uncontested Motion for Summary Judgment, if his pleading and affidavit did not allege and prove the existence of the loan he was sent packing until he could come back with his papers in order. In other words, in uncontested hearings where the homeowner did not even show up, the Judge denied or continued the Motion for Summary Judgment where the Bank failed to allege the loan and failed to allege financial injury.

Fast forward to 2013. Foreclosers routinely omit any allegation that the borrower received a loan from the entity foreclosing on the house. They routinely omit any allegation of financial injury. Instead, they merely assert they are the holder of the note and mortgage. This is important because allowing the Banks to avoid alleging the existence of the loan shifts the burden of pleading and proof onto the Homeowner, thus leaving the hapless homeowner with the burden of chasing a ghost instead of simply defending their property.

If the Banks were required to plead that a loan was given to the borrower and the lender in that transaction was the Foreclosers or that it had purchased the loan, the Bank has the burden of proving the existence of the loan. So why did Banks stop pleading the loan? And why did they stop pleading financial injury?

The answer is simple. They didn’t make the loan and they don’t own the loan. Wall Street Banks created a cloud in which they controlled all the appearances and illusions starting with conflicting paperwork given to the lenders (investors) and borrowers (homeowners). If lawyers fail to deny or at least state they are without knowledge as to the essential allegations of the complaint they are making a mistake — one that will move the case inexorably toward foreclosure. If lawyers fail to seek dismissal of the case or vacation of the notice of sale (non-judicial states) on the basis that that the forecloser does not claim to be the lender or even represent the lender and that the lender does not allege financial injury they are making a mistake that will cost them in the trial court and on appeal.

Most lawyers are timid about taking this position despite the glaring absence of the allegations from the banks. They feel they will make fools of themselves by denying the existence of the debt, note, mortgage, and default when they know their client received a loan. Money was on the table. How can you deny that?

The answer is that if the money didn’t come from the payee on the note, the mortgagee on the mortgage, the beneficiary under the deed of trust, then they cannot have any injury. And if they are not the actual owner of an unpaid account receivable, then they cannot submit a credit bid at eh auction. The banks know this. That is why they do a substitution of trustee in 100% of the cases brought to foreclosure in non-judicial states. Because if the original trustee was left there, the trustee might actually do his job — and inquire where this new beneficiary came from and how they stand to lose any money through non payment by the homeowner.

And there is another reason why the banks avoid such issues like the plague. If they open up the issue of payments and money, then the inquiry in discovery will be about money, where it came from, where it went, who was paid, and when they were paid. If that cloud created by the illusion of securitization contains evidence of a principal agent relationship between the lenders (investors in mortgage bonds) and the third party intermediaries (investment banks and affiliates) then the money received for insurance, CDS, guarantees, and proceeds of sale to the Federal Reserve will reduce the accounts receivable and require a reduction in the accounts payable from the homeowners. And if that happens, the insurers and everyone else are going to be making claims based upon multiple payments on the same claim for a loss that the bank never incurred because it was always playing with investor money.

Filed under: CDO, CORRUPTION, Eviction, foreclosure, GARFIELD GWALTNEY KELLEY AND WHITE, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: court jurisdiction, Pleading, pleading the loan, pleading the loss, PROOF, record on appeal, standing | 42 Comments »

Hawaii Federal District Court Applies Rules of Evidence: BONY/Mellon, US Bank, JP Morgan Chase Failed to Prove Sale of Note

Posted on May 9, 2013 by Neil Garfield

This quiet title claim against U.S. Bank and BONY (collectively, “Defendants”) is based on the assertion that Defendants have no interest in the Plaintiffs’ mortgage loan, yet have nonetheless sought to foreclose on the subject property.

Currently before the court is Defendants’ Motion for Summary Judgment, arguing that Plaintiffs’ quiet title claim fails because there is no genuine issue of material fact that Plaintiffs’ loan was sold into a public security managed by BONY, and Plaintiffs cannot tender the loan proceeds. Based on the following, the court finds that because Defendants have not established that the mortgage loans were sold into a public security involving Defendants, the court DENIES Defendants’ Motion for Summary Judgment.

Editor’s Note: We will be commenting on this case for the rest of the week in addition to bringing you other news. Suffice it to say that the Court corroborates the essential premises of this blog, to wit:

Quiet title claims should not be dismissed. They should be heard and decided based upon the facts admitted into evidence.

Presumptions are not to be used in lieu of evidence where the opposing party has denied the underlying facts and the conclusion expressed in the presumption. In other words, a presumption cannot be used to lead to a result that is contrary to the facts.

Being a “holder” is a a conclusion of law created by certain presumptions. It is not a plain statement of ultimate facts. If a party wishes to assert holder or holder in due course status they must plead and prove the facts supporting that legal conclusion.

A sale of the note does not occur without proof under simple contract doctrine. There must be an offer, acceptance and consideration. Without the consideration there is no sale and any presumption arising out of the allegation that a party is a holder or that the loan was sold fails on its face.

Self serving letters announcing authority to represent investors are insufficient in establishing a foundation for testimony or other proof that the actor was indeed authorized. A competent witness must provide the factual testimony to provide a foundation for introduction of a binding legal document showing authority and even then the opposing party may challenge the execution or creation of such instruments.

[Tactical conclusion: opposing motion for summary judgment should be filed with an affidavit alleging the necessary facts when the pretender lender files its motion for summary judgment. If the pretender’s affidavit is struck down and/or their motion for summary judgment is denied, they have probably created a procedural void where the Judge has no choice but to grant summary judgment to homeowner.]

“When considering the evidence on a motion for summary judgment, the court must draw all reasonable inferences on behalf of the nonmoving party. Matsushita Elec. Indus. Co., 475 U.S. at 587.” See case below

“a plaintiff asserting a quiet title claim must establish his superior title by showing the strength of his title as opposed to merely attacking the title of the defendant.” {Tactical: by admitting the note, mortgage. debt and default, and then attacking the title chain of the foreclosing party you have NOT established the elements for quiet title. THAT is why we have been pounding on the strategy that makes sense: DENY and DISCOVER: Lawyers take note. Just because you think you know what is going on doesn’t mean you do. Advice given under the presumption that the debt is genuine when that is in fact a mistake of the homeowner which you are compounding with your advice. Why assume the debt, note , mortgage and default are genuine when you really don’t know? Why would you admit that?}

It is both wise and necessary to deny the debt, note, mortgage, and default as to the party attempting to foreclose. Don’t try to prove your case in your pleading. Each additional “explanatory” allegation paints you into a corner. Pleading requires a short plain statement of ultimate facts upon which relief could be legally granted.

A denial of signature on a document that is indisputably signed will be considered frivolous. [However an allegation that the document is not an original and/or that the signature was procured by fraud or mistake is not frivolous. Coupled with allegation that the named lender did not loan the money at all and that in fact the homeowner never received any money from the lender named on the note, you establish that the deal was sign the note and we’ll give you money. You signed the note, but they didn’t give you the money. Therefore those documents may not be used against you. ]

MELVIN KEAKAKU AMINA and DONNA MAE AMINA, Husband and Wife, Plaintiffs,
v.
THE BANK OF NEW YORK MELLON, FKA THE BANK OF NEW YORK; U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR J.P. MORGAN MORTGAGE ACQUISITION TRUST 2006-WMC2, ASSET BACKED PASS-THROUGH CERTIFICATES, SERIES 2006-WMC2 Defendants.
Civil No. 11-00714 JMS/BMK.

United States District Court, D. Hawaii.
ORDER DENYING DEFENDANTS THE BANK OF NEW YORK MELLON, FKA THE BANK OF NEW YORK AND U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR J.P. MORGAN MORTGAGE ACQUISITION TRUST 2006-WMC2, ASSET BACKED PASS-THROUGH CERTIFICATES, SERIES 2006-WMC2’S MOTION FOR SUMMARY JUDGMENT
J. MICHAEL SEABRIGHT, District Judge.
I. INTRODUCTION

This is Plaintiffs Melvin Keakaku Amina and Donna Mae Amina’s (“Plaintiffs”) second action filed in this court concerning a mortgage transaction and alleged subsequent threatened foreclosure of real property located at 2304 Metcalf Street #2, Honolulu, Hawaii 96822 (the “subject property”). Late in Plaintiffs’ first action, Amina et al. v. WMC Mortgage Corp. et al., Civ. No. 10-00165 JMS-KSC (“Plaintiffs’ First Action”), Plaintiffs sought to substitute The Bank of New York Mellon, FKA the Bank of New York (“BONY”) on the basis that one of the defendants’ counsel asserted that BONY owned the mortgage loans. After the court denied Plaintiffs’ motion to substitute, Plaintiffs brought this action alleging a single claim to quiet title against BONY. Plaintiffs have since filed a Verified Second Amended Complaint (“SAC”), adding as a Defendant U.S. Bank National Association, as Trustee for J.P. Morgan Mortgage Acquisition Trust 2006-WMC2, Asset Backed Pass-through Certificates, Series 2006-WMC2 (“U.S. Bank”). This quiet title claim against U.S. Bank and BONY (collectively, “Defendants”) is based on the assertion that Defendants have no interest in the Plaintiffs’ mortgage loan, yet have nonetheless sought to foreclose on the subject property.

Currently before the court is Defendants’ Motion for Summary Judgment, arguing that Plaintiffs’ quiet title claim fails because there is no genuine issue of material fact that Plaintiffs’ loan was sold into a public security managed by BONY, and Plaintiffs cannot tender the loan proceeds. Based on the following, the court finds that because Defendants have not established that the mortgage loans were sold into a public security involving Defendants, the court DENIES Defendants’ Motion for Summary Judgment.

II. BACKGROUND

A. Factual Background
Plaintiffs own the subject property. See Doc. No. 60, SAC ¶ 17. On February 24, 2006, Plaintiffs obtained two mortgage loans from WMC Mortgage Corp. (“WMC”) — one for $880,000, and another for $220,000, both secured by the subject property.See Doc. Nos. 68-6-68-8, Defs.’ Exs. E-G.^[1]

In Plaintiffs’ First Action, it was undisputed that WMC no longer held the mortgage loans. Defendants assert that the mortgage loans were sold into a public security managed by BONY, and that Chase is the servicer of the loan and is authorized by the security to handle any concerns on BONY’s behalf. See Doc. No. 68, Defs.’ Concise Statement of Facts (“CSF”) ¶ 7. Defendants further assert that the Pooling and Service Agreement (“PSA”) dated June 1, 2006 (of which Plaintiffs’ mortgage loan is allegedly a part) grants Chase the authority to institute foreclosure proceedings. Id. ¶ 8.

In a February 3, 2010 letter, Chase informed Plaintiffs that they are in default on their mortgage and that failure to cure default will result in Chase commencing foreclosure proceedings. Doc. No. 68-13, Defs.’ Ex. L. Plaintiffs also received a March 2, 2011 letter from Chase stating that the mortgage loan “was sold to a public security managed by [BONY] and may include a number of investors. As the servicer of your loan, Chase is authorized by the security to handle any related concerns on their behalf.” Doc. No. 68-11, Defs.’ Ex. J.

On October 19, 2012, Derek Wong of RCO Hawaii, L.L.L.C., attorney for U.S. Bank, submitted a proof of claim in case number 12-00079 in the U.S. Bankruptcy Court, District of Hawaii, involving Melvin Amina. Doc. No. 68-14, Defs.’ Ex. M.

Plaintiffs stopped making payments on the mortgage loans in late 2008 or 2009, have not paid off the loans, and cannot tender all of the amounts due under the mortgage loans. See Doc. No. 68-5, Defs.’ Ex. D at 48, 49, 55-60; Doc. No. 68-6, Defs.’ Ex. E at 29-32.

>B. Procedural Background
>Plaintiffs filed this action against BONY on November 28, 2011, filed their First Amended Complaint on June 5, 2012, and filed their SAC adding U.S. Bank as a Defendant on October 19, 2012.

On December 13, 2012, Defendants filed their Motion for Summary Judgment. Plaintiffs filed an Opposition on February 28, 2013, and Defendants filed a Reply on March 4, 2013. A hearing was held on March 4, 2013.
At the March 4, 2013 hearing, the court raised the fact that Defendants failed to present any evidence establishing ownership of the mortgage loan. Upon Defendants’ request, the court granted Defendants additional time to file a supplemental brief.^[2] On April 1, 2013, Defendants filed their supplemental brief, stating that they were unable to gather evidence establishing ownership of the mortgage loan within the time allotted. Doc. No. 93.

III. STANDARD OF REVIEW

Summary judgment is proper where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). The burden initially lies with the moving party to show that there is no genuine issue of material fact. See Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007) (citing Celotex, 477 U.S. at 323). If the moving party carries its burden, the nonmoving party “must do more than simply show that there is some metaphysical doubt as to the material facts [and] come forwards with specific facts showing that there is a genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 586-87 (1986) (citation and internal quotation signals omitted).

An issue is `genuine’ only if there is a sufficient evidentiary basis on which a reasonable fact finder could find for the nonmoving party, and a dispute is `material’ only if it could affect the outcome of the suit under the governing law.” In re Barboza,545 F.3d 702, 707 (9th Cir. 2008) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). When considering the evidence on a motion for summary judgment, the court must draw all reasonable inferences on behalf of the nonmoving party. Matsushita Elec. Indus. Co., 475 U.S. at 587.

IV. DISCUSSION

As the court previously explained in its August 9, 2012 Order Denying BONY’s Motion to Dismiss Verified Amended Complaint, see Amina v. Bank of New York Mellon,2012 WL 3283513 (D. Haw. Aug. 9, 2012), a plaintiff asserting a quiet title claim must establish his superior title by showing the strength of his title as opposed to merely attacking the title of the defendant. This axiom applies in the numerous cases in which this court has dismissed quiet title claims that are based on allegations that a mortgagee cannot foreclose where it has not established that it holds the note, or because securitization of the mortgage loan was defective. In such cases, this court has held that to maintain a quiet title claim against a mortgagee, a borrower must establish his superior title by alleging an ability to tender the loan proceeds.^[3]

This action differs from these other quiet title actions brought by mortgagors seeking to stave off foreclosure by the mortgagee. As alleged in Plaintiffs’ pleadings, this is not a case where Plaintiffs assert that Defendants’ mortgagee status is invalid (for example, because the mortgage loan was securitized, Defendants do not hold the note, or MERS lacked authority to assign the mortgage loans). See id. at *5. Rather, Plaintiffs assert that Defendants are not mortgagees whatsoever and that there is no record evidence of any assignment of the mortgage loan to Defendants.^[4] See Doc. No. 58, SAC ¶¶ 1-4, 6, 13-1 — 13-3.

In support of their Motion for Summary Judgment, Defendants assert that Plaintiffs’ mortgage loan was sold into a public security which is managed by BONY and which U.S. Bank is the trustee. To establish this fact, Defendants cite to the March 2, 2011 letter from Chase to Plaintiffs asserting that “[y]our loan was sold to a public security managed by The Bank of New York and may include a number of investors. As the servicer of your loan, Chase is authorized to handle any related concerns on their behalf.” See Doc. No. 68-11, Defs.’ Ex. J. Defendants also present the PSA naming U.S. Bank as trustee. See Doc. No. 68-12, Defs.’ Ex. J. Contrary to Defendants’ argument, the letter does not establish that Plaintiffs’ mortgage loan was sold into a public security, much less a public security managed by BONY and for which U.S. Bank is the trustee. Nor does the PSA establish that it governs Plaintiffs’ mortgage loans. As a result, Defendants have failed to carry their initial burden on summary judgment of showing that there is no genuine issue of material fact that Defendants may foreclose on the subject property. Indeed, Defendants admit as much in their Supplemental Brief — they concede that they were unable to present evidence that Defendants have an interest in the mortgage loans by the supplemental briefing deadline. See Doc. No. 93.

Defendants also argue that Plaintiffs’ claim fails as to BONY because BONY never claimed an interest in the subject property on its own behalf. Rather, the March 2, 2011 letter provides that BONY is only managing the security. See Doc. No. 67-1, Defs.’ Mot. at 21. At this time, the court rejects this argument — the March 2, 2011 letter does not identify who owns the public security into which the mortgage loan was allegedly sold, and BONY is the only entity identified as responsible for the public security. As a result, Plaintiffs’ quiet title claim against BONY is not unsubstantiated.

V. CONCLUSION

Based on the above, the court DENIES Defendants’ Motion for Summary Judgment.

IT IS SO ORDERED.

[1] In their Opposition, Plaintiffs object to Defendants’ exhibits on the basis that the sponsoring declarant lacks and/or fails to establish the basis of personal knowledge of the exhibits. See Doc. No. 80, Pls.’ Opp’n at 3-4. Because Defendants have failed to carry their burden on summary judgment regardless of the admissibility of their exhibits, the court need not resolve these objections.

Plaintiffs also apparently dispute whether they signed the mortgage loans. See Doc. No. 80, Pls.’ Opp’n at 7-8. This objection appears to be wholly frivolous — Plaintiffs have previously admitted that they took out the mortgage loans. The court need not, however, engage Plaintiffs’ new assertions to determine the Motion for Summary Judgment.

[2] On March 22, 2013, Plaintiffs filed an “Objection to [87] Order Allowing Defendants to File Supplemental Brief for their Motion for Summary Judgment.” Doc. No. 90. In light of Defendants’ Supplemental Brief stating that they were unable to provide evidence at this time and this Order, the court DEEMS MOOT this Objection.

[3] See, e.g., Fed Nat’l Mortg. Ass’n v. Kamakau, 2012 WL 622169, at *9 (D. Haw. Feb. 23, 2012);Lindsey v. Meridias Cap., Inc., 2012 WL 488282, at *9 (D. Haw. Feb. 14, 2012); Menashe v. Bank of N.Y., ___ F. Supp. 2d ___, 2012 WL 397437, at *19 (D. Haw. Feb. 6, 2012); Teaupa v. U.S. Nat’l Bank N.A., 836 F. Supp. 2d 1083, 1103 (D. Haw. 2011); Abubo v. Bank of N.Y. Mellon, 2011 WL 6011787, at *5 (D. Haw. Nov. 30, 2011); Long v. Deutsche Bank Nat’l Tr. Co., 2011 WL 5079586, at *11 (D. Haw. Oct. 24, 2011).

[4] Although the SAC also includes some allegations asserting that the mortgage loan could not be part of the PSA given its closing date, Doc. No. 60, SAC ¶ 13-4, and that MERS could not legally assign the mortgage loans, id. ¶ 13-9, the overall thrust of Plaintiffs’ claims appears to be that Defendants are not the mortgagees (as opposed to that Defendants’ mortgagee status is defective). Indeed, Plaintiffs agreed with the court’s characterization of their claim that they are asserting that Defendants “have no more interest in this mortgage than some guy off the street does.” See Doc. No. 88, Tr. at 9-10. Because Defendants fail to establish a basis for their right to foreclose, the court does not address the viability of Plaintiffs’ claims if and when Defendants establish mortgagee status.

Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: admissions, allegations, Amina v Bank of New York Mellon et al Civil No. 11-00714 JMS/BMK, bank of new york, debt, default, evidence, foreclosure, JP Morgan, Mellon, Mortgage, note, PROOF, quiet title, sale of loan, securitized pools, U.S. Bank | 61 Comments »

Prosecutors Getting Tough? Small Banks ONLY!!

Posted on February 1, 2013 by Neil Garfield

CHECK OUT OUR EXTENDED DECEMBER SPECIAL!

What’s the Next Step? Consult with Neil Garfield

For assistance with presenting a case for wrongful foreclosure, please call 520-405-1688, customer service, who will put you in touch with an attorney in the states of Florida, Tennessee, Georgia, California, Ohio, and Nevada. (NOTE: Chapter 11 may be easier than you think).

Editor’s Comment and Analysis: Abacus Bank has only $272 million in deposits. In rank, it is near the very bottom of the ladder. And apparently justifiably, federal prosecutors have seen fit to prosecute the bank for fraud. The quandary here is why the prosecutors are putting their muscle behind just the low-hanging fruit and why they are settling with the mega banks for the same acts — without threat of prosecution. If we could offer $17 trillion in various forms of “relief” for the banks, they certainly could pony up $1 billion and investigate the truth behind the securitization claims. The only conclusion I can reach is that the administration, so far, doesn’t want proof of the truth.

One of the things that Yves gets right here is that when Fannie and Freddie get involved, it isn’t the end of the line and it certainly does not mean that the loan was not “securitized” using the same fake documents at origination and the same fake mortgage bonds, albeit guaranteed by Fannie and Freddie who serve as “Master Trustee” of the investment pools that presumably “bought the loans with actual money. Like their cousins in the non government guaranteed loans, the money largely comes from fat accounts where the investors’ money was commingled beyond recognition and the investment bank who created and sold the bogus mortgage bonds was the “buyer” on paper so that they could bet against the same loans and bonds they were selling to investors.

Yves still refers to the scheme as reckless as though a judgment was made without knowing the consequences of the banks’ actions. Nothing could be further from the truth. This wasn’t reckless.

It was intentional because that was where the big money came from. The scheme was to take as much as possible from money advanced by pension funds and keep it, while giving the illusion of a securitization scheme for funding mortgages and reducing risk.

The mega banks even bet on their success and the investors’ loss, the borrowers’ loss and the loss shouldered by taxpayers, increasing their leverage positions up to 42 times (Bear Stearns). As we all know, the risk was magnified not reduced and the only experts that really knew were in the departments where collateralized debt obligations were packaged on paper, sold to investors and never transferred to any trust, REMIC of SPV.

With Abacus, the punch line is that their default rate was 1/10th that of the national average indicating that contrary to the practices of the mega banks, some underwriting was involved and some verification and oversight was employed.

What is avoided is that $13 trillion in loans were originated using the false securitization scheme in which the borrower was kept in the dark about who his lender was, and where upon inquiry the borrower was told that the identity of the lender was confidential and private, nearly all of which loans were classic cases of fraud in the execution, fraud in the inducement, breach of contract, slander of title, and recording false documents in the county records. The perpetrators of these schemes are settling for fractions of a penny on the dollar with full agreement that their conduct will not be reviewed.

So here is the question: If Abacus is guilty of fraud and caused minimal damage to the economy or the borrowers, isn’t the bar set higher for the mega banks. Why are they allowed to slip through without getting the same treatment as a bank whose deposits equal less than 1/10 of 1% of the size of the megabanks who caused mayhem here and around the world?

Quelle Surprise! Prosecutors Get Tough on Mortgage Fraud….At an Itty Bitty Bank
http://www.nakedcapitalism.com/2013/02/quelle-surprise-prosecutors-get-tough-on-mortgage-fraud-at-an-itty-bitty-bank.html

Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: Abacus, Fannie, fraud, Freddie, Investigation, Naked Capitalism, Ponzi scheme, PROOF, prosecution, yves Smith | 101 Comments »

Cochrane: How Deutsche Bank as a Trustee will attempt to harm you in bankruptcy court.

Posted on May 14, 2011 by Neil Garfield

GET COMBO TITLE AND SECURITIZATION ANALYSIS – CLICK HERE

EDITOR’S NOTE: When you actually READ the securitization documents, you will find, as I did, that all of them are quite disingenuous. They mislead the casual reader and even some careful readers who don’t understand what is actually being said. The prospectus says the investor is buying into a pool, but as you continue to read, you find the pool has not been formed, much less filled with loans to satisfy the definition of “asset-backed mortgage bond.” So the investor is buying into a non-existent pool, which may or may not have been formed at a later date, with nothing in it except the income received from selling credit default swaps on the most toxic tranches of a CDO, usually in the same Special Purpose vehicle (Trust).

The so-called “Trustee” seems at first to be an intended fiduciary of a bona fide trust, but as you read the PSA and other securitization documents you find that with each passing page the powers of the Trustee are stripped away until they are at best the contingent agent of a dubious trust that has nothing in it except the income from credit default swaps and whose principal asset, as represented, is neither present nor was there ever any intent to make any legal transfers of legally constituted documents that would fill the pool with assets and thus create the “res” over which the Trustee has power.

With each passing page of each document it is obvious that the powers of the “Trustee” are actually in the hands of the master servicer, who in turn hires a subservicer who actually does the work, but without “knowledge” (plausible deniability). The subservicer in turn has multiple sets of books which it uses for reporting purposes — one for the borrower, one for the investor and one for the securitizers, to start with. Like MERS, the subservicer never lays hands on any document evidencing ownership of the borrower’s obligation which of course is at variance with the undelivered note and undelivered mortgage or deed of trust.

And since the subservicer does not handle or control the payments to securitizers and the investors, it has no way of knowing or accounting for payments that were made — except its own payments to the securitizers, despite the declaration of default against the borrower. The borrower, not knowing the payments are continuing, accepts the allegation that the obligation is in de fault even though it is being paid. UNTIL THE COURT IS MADE AWARE OF THE MULTIPLE SETS OF BOOKS, IT HAS NO WAY OF KNOWING ABOUT THE FRAUD. AND IF IT ISN’T EVEN ALLEGED, THEN THE ISSUE IS NOT BEFORE THE COURT.

The Trustee meanwhile has no idea what is going on in the courts (plausible deniability) and neither do the investor-lenders. Payments of principal and interest made to the securitizers, who are agents of the investor-lenders are neither reported to nor paid to the investors in many cases. While often named as the foreclosing party, the Trustee has no attorney client relationship with the attorney who is representing to the court that he represents the “lender” or “Holder” of the note, which of course does not describe the transaction that was disclosed to the borrower in the loan documents, note and mortgage. Hence the borrower-debtor, is led to believe that the loan documents are the written instruments governing the transaction when in fact they are a lie — but without putting together the securitization documents, the loan level accounting, the title and securitization analysis and the forensic analysis, the borrower and his/her attorney is in the dark about the truth of the matter. Hence the representation in court by the pretender lender appears true because the borrower does not deny them.

How Deutsche Bank as a Trustee will attempt to harm you in bankruptcy court BY MARY COCHRANE

See Case No 07-077227-PB7 (Bankr.S.D.Cal 6/9/2008)
DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee for WaMu Series 2007-HE1 Trust, its
assignees and/or successors

The TRUSTEE will argue against you if you claim Deutsche Bank may not foreclose on the property because the Assignment was not recorded.

US Bankruptcy denied relief as to: CC 2932.5 if DBNTC could not provide ownership documents it could not….

An Assignment of the Note amounts to an Assignment of the Deed of Trust.

Deutsche Bank has provided no convincing evidence that the Note was ever assigned to Deutsche Bank. Furthermore, even if the Note was assigned to Deutsche Bank, Deutsche Bank is not the party asserting a security interest in the Property. Rather the motion is brought by Deutsche Bank as TRUSTEE for HE1 Trust. The record is devoid of any further assignment to HE1 Trust.

In summary, the only question before the Court is whether Deutsche Bank and/or HE1 Trust has an interest in the Proeprty. The Court holds that Deutsche Bank has failed to provide evidence that it, let alone HE1 Trust has a security interest in the Property. Accordingly, the motion is denied. Deutsche Bank’s motion for relief from stay is dened without prejudice.

WaMu retains possession of Note and Deed of Trust as Agent for Deutsche Bank.

The Trustee, Deutsche Bank, argues that based upon “…..” may not foreclose on the Property because the Assignment was not recorded. That may be. However, that is an issue the TRUSTEE can raise with the state court if relief from stay is ultimately granted.

Both parties allotted much ink and paper to issue of whether Deutsche Bank has a perfected security interest in the Note. The Court finds this discussion beyond the scope of the motion before it. Deutsche Bank has moved for relief from stay to proceed against the Property. Whether or not it holds a security interest in the Note is irrelevant. Since we are not concerned with a security interest in the Note, all talk of a ‘perfected lien’ on the Note is beside the point.

http://www.scribd.com/doc/28277345/US-BANKRUPTCY-DEUTSCHE-BANK-NTC-AS-TRUSTEE-DENIED-RELIEF-AS-TO-OWNERSHIP-VIA-TRUST-2932-5

Regarding Asset Backed Securities, could be Depositor, Underwriter, even one of its Special-Purpose Vehicles SPV’s could be a national banking association or sent in during a foreclosure or bankruptcy as a substitute trustee:.

Deutsche Bank National Trust Co.
Formerly Bankers Trust Co of California NA 8/1/96
3 Park Plaza 16th Floor, Irvine CA 92614
Maiing: 1761 East St. Andrew Pl, 2nd FLoor Santa Ana CA 9270a
IRS 13-3347003
7,443 SEC Filings 5/6/97 – 2/14/11
As ‘Filer’ ‘Owner’ ‘Filing Agent’

Deutsche Bank National Trust Company (Deutsche Bank), as Trustee for

In MERSONLINE.Org registry
DB Structured Products Inc.
60 Wall St. NY NY 10005
212-250-9340 Fax 212-797-516
Primary Contact: MERS Dept c/o Deutsche Bank NA
MEMBER ORG ID: 1002829
Lines of Business: Servicer, Subservicer, Interim Funder, Investor, Document Custodian
eRegistry Participant: NO
eDelivery Participant: NO

Business Entity: New York State
Jurisdiction: Delaware
Active – Initial DOS Filing: 4/30/1970
1/11/2002 changed name to DB Structured Products Inc.

Mary reveals below information on Deutsche Corporate Trust Services and imagine name change in line with DB Structured Products Inc. name change. Was Deutsche Bank Shapres Pixley Inc. 1/7/1994 – 1/10/2002
And was 1/6/1994 thru 4/30/1970 Deutsche Bank Sharps Pixley Inc. former name Sharps Pixley Inc established 4/30/1970.

During foreclosure or bankruptcfy in CA for example, the Deed of Trust may list ‘WaMu’ as the beneficiary and “California Reconveyance Company’ as the Trustee. On the SEC, you’ll find Deutsche Bank Trust Company/National Association to be a ‘Filing Agent’ of Deutsche Bank AG and 1 SEC File as ISSUER SEC File 028-12000 13F-NT/A and 13F-NT. First Filing 8/15/06 – Last Filing 2/15/11.

Don’t be frustrated if you are not understanding these facts. The more you read them and try to understand them you’ll realize you are smarter than the average bear. I could not spell ‘SEC’ when I started October 2008.

Deutsche Bank Trust Co National Association
280 Park Avenue
New York NY 10017

How does Deutsche Bank have a perfected lien against the Property and Chain of Title?

Deutsche Bank will assert to the court it is the ‘current beneficiary of a primissory note and deet of trust by way of Assignment’

What is the ‘Trustee’ I mean ‘are’ the TRUSTEE’s in SEC Reconstituted and/or their Reconstituion Servicing Agreements going to do now? regarding

Assignments in CA for example:

MERS Fatal Flaw in Ca, on May 12, 2011 at 10:19 am said:
In California it’s coming down to one key issue, MERS NOT having an assignment of the Note from the Original Lender to MERS, legally recorded.
“The assignment of the lien without a transfer of the debt was a nullity in law.”
“A lien is not assignable unless by the express language of the statute.”
CALIFORNIA SUPREME COURT, DAVIS, BELAU & CO. V. NATIONAL SUR. CO., 139 CAL 223, 224 (1903)
“The note and mortgage are inseparable; the former as essential, the latter as an incident. An assignment of the note carries the mortgage with it, while an assignment of the latter alone is a nullity.”
CARPENTER V. LONGAN, 83 U. S. 271 (1872), U.S. Supreme Court
More info at https://sites.google.com/site/mersfatalflawsincalifornia

Well in the USA Deutsche promoted itself 2002 forward Trust & Securities Services

Deutsche Bank`s Trust & Securities Services provides an extensive range of trust, agency, depositary, custody, fund administration and related services on over EUR 7 trillion in debt and equity securities worldwide. Its six globally integrated product groups ensure that every service is provided by expert, specialist staff.
Debt Services offers a range of products for bonds, CP and MTN programs, project financings, escrows, restructurings, syndicated loans, auction rate securities and Islamic financings
Structured Finance Services specializes in asset and mortgage backed securities, collateralized debt obligations and asset backed CP conduits
Corporate Services provides management and administration for a variety of tax-neutral and tax-advantaged structures
Alternative Fund Services provides administration for hedge funds, fund of hedge funds, private equity and other alternative investment vehicles
Equity Services covers ADRs, global shares, German shares and German capital transactions
Direct Securities Services provides safekeeping and clearing services for securities in more than 32 markets worldwide.
For information about Deutsche Bank residential property foreclosure and REO (real estate owned) inquiries please click here
NOTICE OF CHANGES IN TEMPORARY FDIC INSURANCE COVERAGE FOR TRANSACTION ACCOUNTS
All funds in a “noninterest-bearing transaction account” are insured in full by the Federal Deposit Insurance Corporation from December 31, 2010, through December 31, 2012. This temporary unlimited coverage is in addition to, and separate from, the coverage of at least USD 250,000 available to depositors under the FDIC’s general deposit insurance rules.

The term “noninterest-bearing transaction account” includes a traditional checking account or demand deposit account on which the insured depository institution pays no interest. It also includes Interest on Lawyers Trust Accounts (“IOLTAs”). It does not include other accounts, such as traditional checking or demand deposit accounts that may earn interest, NOW accounts, and money-market deposit accounts.

For more information go to http://www.fdic.gov

2/06/2002 Deutsche Bank wins Trustee Awards in Securitization Markets

2003 – Deutsche Bank Corporate Trust Chicago Office Opens

Deusche Bank expands Municipal Trustee Services

Deutsche Bank Coporate Trust wins EURO CP Award

2004 Deutsche Bank opening new Corporate Trust Office San Francisco

Deutsche Bank also has regional corporate trust offices in Charlotte, NC; New York; Chicago; Olive
Branch, MS; and Santa Ana, CA.

NEW YORK, JANUARY 20, 2004 – Deutsche Bank’s Trust & Securities Services today announced
the opening of a regional corporate trust office in San Francisco, California. The new office is the
latest in the continuing regional expansion of traditional corporate trust services launched by
Deutsche Bank in June 2002 in the US.

Raafat Albert Sarkis heading Unit in CA was a Vice President in US Bank’s corporate trust unit. Head of Global Debt Services within Deutsche Bank’s Trust & Securities Services. “Raafat’s wealth of industry knowledge, his client relationships and his proven track record will help ensure that our clients in the Western states benefit from localized expertise and a commitment to exceptional customer service.

Deutsche Bank ranks among the global leaders in corporate banking and securities, transaction
banking, asset management, and private wealth management, and has a significant private &
business banking franchise in Germany and other selected countries in Continental Europe.

Deutsche Bank’s Trust & Securities Services is one of the leading global providers of trust and
securities administration services.

Through a fully integrated network of specialist offices worldwide, the group provides domestic custody in 23 securities markets as well as trustee, agency, registrar, depositary, SPV management and related services for a wide range of financings. Products serviced include bonds, auction rate securities, medium term note and commercial paper programs, asset backed and mortgage backed securities, CDOs, SIVs, project financings, escrows, syndicated loans, American Depositary Receipts and German equities.
——————–
FDIC Chairman Shelia Blair sure looked uncomfortable in her ‘skin’ on 60 Minutes. What do you think?

Regarding Deutsche Bank… The first chart depicts the mortgage transaction as many (most?) of us still understand it:

Here’s Chairman Bair’s second chart, “Borrowing Under a Securitization Structure”, depicting the typical mortgage transaction in 2007 (click to enlarge):

The County Auditor’s database says the owner of this house is Deutsche Bank National Trust Company. It says Deutsche Bank NTC paid $50,000 for the house in a sheriff’s sale in March 2007. The sheriff’s sale was the outcome of Case CV-05-554639, an action for foreclosure against the previous owners, filed in Common Pleas Court in February 2005 by Deutsche Bank NTC “as Trustee”.

But Deutsche Bank never held a mortgage on 4111 Archwood. And Deutsche Bank doesn’t really own 4111 Archwood now.

We’ll get back to Case CV-05-554639 and that magic word “Trustee” in a minute. But first, a short tour of the New Mortgage Industry, courtesy of the Chairman of the Federal Deposit Insurance Corporation, Sheila Bair.

Chairman Bair testified before the U.S. House Committee on Financial Services last April. Her entire testimony is well worth reading, but it’s modestly famous for two charts.

The first chart depicts the mortgage transaction as many (most?) of us still understand it

As Chairman Bair explained to the Committee:

Securitization takes the role of the lender and breaks it into separate components. Unlike the more traditional relationship between a borrower and a lender, securitization involves the sale of the loan by the lender to a new owner–the issuer–who then sells securities to investors. The investors are buying “bonds” that entitle them to a share of the cash paid by the borrowers on their mortgages. Once the lender has sold the mortgage to the issuer, the lender no longer has the power to restructure the loan or make other accommodations for its borrower. That becomes the responsibility of a servicer, who collects the mortgage payments, distributes them to the issuer for payment to investors, and, if the borrower cannot pay, takes action to recover cash for the investors.

And she listed some of the roles in this modern mortgage transaction:

o Issuer – A bankruptcy-remote special purpose entity (SPE) formed to facilitate a securitization and to issue securities to investors.
o Lender – An entity that underwrites and funds loans that are eventually sold to the SPE for inclusion in the securitization. Lenders are compensated by cash for the purchase of the loan and by fees. In some cases, the lender might contract with mortgage brokers. Lenders can be banks or non-banks.
o Mortgage Broker – Acts as a facilitator between a borrower and the lender.The mortgage broker receives fee income upon the loan’s closing.
o Servicer – The entity responsible for collecting loan payments from borrowers and for remitting these payments to the issuer for distribution to the investors. The servicer is typically compensated with fees based on the volume of loans serviced. The servicer is generally obligated to maximize the payments from the borrowers to the issuer, and is responsible for handling delinquent loans and foreclosures.
o Investors – The purchasers of the various securities issued by a securitization. Investors provide funding for the loans and assume varying degrees of credit risk, based on the terms of the securities they purchase…
o Trustee – A third party appointed to represent the investors’ interests in a securitization. The trustee ensures that the securitization operates as set forth in the securitization documents, which may include determinations about the servicer’s compliance with established servicing criteria.
“Bankruptcy-remote”. What a great adjective.

So what does this all have to do with 4111 Archwood? While I explain, you might want to keep that second chart handy.

In August 2003, the couple that had owned 4111 Archwood since 1996 refinanced it for $93,500. Their lender was Argent Mortgage Company, LLC, a division of ACC Holdings of Orange, CA, which also owned Ameriquest Mortgage and AMC Mortgage Services. Argent was the biggest single subprime lender in Cuyahoga County between 2003 and 2005, going from no originations in 2002 to nearly 2,400 in 2003, 4,900 in 2004, and 3,800 in 2005. (Following several years of lawsuits and other problems, ACC recently closed Ameriquest’s doors and sold Argent, AMC and Ameriquest’s servicing contracts to Citigroup. Argent is now doing business as Citi Residential Lending.)

Less than two months after the mortgage on 4111 Archwood was signed, Argent Mortgage Co. LLC transferred it to Argent Securities, Inc., which “deposited” it, along with thousands of other Argent mortgages into something called “Argent Securities, Inc. Asset-Backed Pass-Through Certificates Series 2003-W5″.

Let’s just call it “ASIABPTCS2003W5″ for short.

As you may have guessed, ASIABPTCS2003W5 is one of those “bankruptcy-remote special purpose entities” Chairman Bair mentioned. It was set up by Argent to be the vehicle by which all that mortgage paper, with a face value of $1.5 billion, would be sold to investors. Once that was accomplished, the mortgage on 4111 Archwood became a tiny piece of the paper assets owned by ASIABPTCS2003W5, a corporate entity owned not by Argent but by its investors.

The “Pooling and Service Agreement” that created ASIABPTCS2003W5 named Argent’s sister company, Ameriquest Mortgage, as “Master Servicer” for all those mortgages.

And it named Deutsche Bank National Trust Company as the “Trustee” of ASIABPTCS2003W5 — the party paid to represent the interests of the investors and oversee the Master Servicer’s performance.

This all happened at the beginning of October, 2003.

Sixteen months later, in February 2005, the borrower was in default and Deutsche Bank — as the Trustee for ASIABPTCS2003W5 — filed an action for foreclosure in Common Pleas Court.

But — funny thing — nobody had bothered to tell the County Recorder, who’s legally in charge of keeping track of these things, that Argent Mortgage had sold the mortgage to ASIABPTCS2003W5. Ten months into the foreclosure proceeding, the magistrate somehow figured out that Argent was still the mortgagee of record and that Deutsche Bank lacked standing to foreclose on the property. (As the case summary, entry for 12/21/05, puts it: “PLAINTIFF’S MOTION TO VACATE CASE AND PLACE ON THE ACTIVE LIST IS DENIED. THE PARTY PURPORTEDLY GRANTED RELIEF FROM STAY IS NOT THE PLAINTIFF IN THIS ACTION.”)

The lawyer for Deutsche Bank quickly filed a motion to make Argent the “substitute plaintiff” in the case. The magistrate agreed to this, putting the foreclosure back on track. Then Argent’s lawyer got it together to file the correct document — it’s called a “Release Assignment” — with the Recorder’s Office in February, confirming the sale of the mortgage on 4111 Archwood to, ahem…

“DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE OF ARGENT SECURITIES INC., ASSET BACKED PASS THROUGH CERTIFICATES SERIES 2003-W5 UNDER THE POOLING AND SERVICING AGREEMENT DATED AS OF OCTOBER 1, 2003″

Finally, seven months later — after the foreclosure was granted to substitute plaintiff Argent, which had sold off its interest in the mortgage three years earlier — the magistrate granted a second plaintiff substitution, swapping Argent out and “Deutsche Bank National Trust Company as Trustee of ASIABPTCS2003W5″ back in.

So it was “Deutsche Bank National Trust Company as Trustee of ASIABPTCS2003W5″ listed as plaintiff on the sheriff’s sale notice, and as the grantee (buyer) on the sheriff’s deed. And now it’s “Deutsche Bank National Trust Company” listed as the owner on County records — with a tax mailing address at 505 City Parkway Suite # 100, Orange, CA, which just happens to be the last-listed address of Ameriquest Mortgage. (Remember them? Master Servicer for ASIABPTCS2003W5. Now defunct. Mortgage servicing contracts bought by Citigroup.)

But of course Deutsche Bank NTC doesn’t actually own 4111 Archwood, any more than it actually ever owned the mortgage.

ASIABPTCS2003W5 — that “bankruptcy-remote special purpose entity”, a paper creation owned by nobody in particular — owns 4111 Archwood.

Deutsche Bank, as Trustee, just represents ASIABPTCS2003W5 for certain purposes. Ameriquest Mortgage was supposed to take care of ASIABPTCS2003W5′s properties, but Ameriquest is out of business; this job may have passed to Citi Residential.

So who’s actually responsible for 4111 Archwood? Good question.

That’s just one house. Deutsche Bank currently “owns” over 900 houses in Cuyahoga County through foreclosures in which it acted as Trustee for some “special purpose entity”, commonly an entity created by Argent. Argent alone organized at least thirty-one of these billion-dollar mortgage-backed investment pools from 2003 through 2006.

So maybe you can see why Judges Boyko, O’Malley, Rose, et al are making a big deal about checking Deutsche Bank’s paperwork.

This entry was posted on Wednesday, November 21st, 2007 at 2:46 pm and is filed under Deutsche Bank. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: accounting, Bank of America, bankruptcy, borrower, Chapter 13, countrywide, creditor, disclosure, Eviction, foreclosure, foreclosure defense, foreclosure offense, fraud, Pleading, PROOF, rescission, securitization, TILA audit, trustee, WAMU, Wells Fargo | 12 Comments »

BKR Judge SLAMS LPS and Sanctions Servicer For Improper Accounting and Fraudulent Practices

Posted on April 13, 2011 by Neil Garfield

SEE LIVINGLIES LITIGATION SUPPORT AT LUMINAQ.COM

REPRESENTATIONS BY COUNSEL ARE NO SUBSTITUTE FOR PROOF

SEE 52867919-In-Re-Wilson-Memorandum-Opinion-07-Apr-2011

NOTABLE QUOTES:

“The fraud perpetrated on the Court, Debtors, and trustee would be shocking if this Court had less experience concerning the conduct of mortgage servicers. One too many times, this Court has been witness to the shoddy practices and sloppy accountings of the mortgage service industry. With each revelation, one hopes that the bottom of the barrel has been reached and that the industry will self correct. Sadly, this does not appear to be reality. This case is one example of why their conduct comes at a high cost to the system and debtors.”

“The abuse begins with a title. In this case, Ms. Goebel was cloaked with the position of “Assistant Secretary,” in a purposeful attempt to convey an experience level and importance beyond her actual abilities. Ms. Goebel is an earnest young woman, but with no training or experience in banking or lending. By her own account, she has rocketed through the LPS hierarchy receiving
92    12/1/10 TT 382:5-8. 93    12/1/10 TT 382:9-384:21. 94 Id. 95    12/1/10 TT 342:25-343:10. 96 12/1/10 TT 341:5-8, 14-19.
21
Case 07-11862    Doc 304    Filed 04/07/11    Entered 04/07/11 08:07:49    Main Document Page 22 of 26
promotions at a pace of one (1) promotion per six (6) to eight (8) month period.97    Her ability to slavishly adhere to LPS’ procedures has not only been rewarded, but has assured the development of her tunnel vision. Ms. Goebel does not understand the importance of her duties, and LPS failed to provide her with the tools to question the information to which she attests.”

“It is evident that LPS blindly relied on counsel to account for the loan and all material representations. In short, the affidavit was nothing other than a farce and hardly the evidence required to support relief. The facts supporting a default are the lender’s to prove, not counsel’s. In this case the lender and LPS cloaked Ms. Goebel with a title that implied knowledge and gravity. LPS could have identified Ms. Goebel as a document execution clerk but it didn’t. The reason is evident, LPS wanted to perpetrate the illusion that she was both Option One’s employee and a person with personal and detailed knowledge of the loan. Neither was the case.“

The hearing on the Motion for Sanctions provides yet another piece to in the puzzle of loan administration. In Jones v. Wells Fargo,104 this Court discovered that a highly automated software
103 12/1/10 TT 341:5-8, 14-19; 379:4-13. 104 Jones v. Wells Fargo, 366 B.R. 584 (Bankr.E.D.La. 2007).
25
Case 07-11862 Doc 304 Filed 04/07/11 Entered 04/07/11 08:07:49 Main Document Page 26 of 26
package owned by LPS and identified as MSP administered loans for servicers and note holders but was programed to apply payments contrary to the terms of the notes and mortgages. In In re Stewart,105 additional information was acquired regarding postpetition administration under the same program, revealing errors in the methodology for fees and costs posted to a debtor’s account.”

Submitted by Nye Lavalle

First, thanks to Lisa Epstein for her dedication and forwarding this ruling to me… Next, as you each know, for years, I have documented thousands of abuses, schemes, frauds, shams etc… involved in mortgage servicing, bankruptcy, securitization, foreclosure etc… I also was the first to show the scams and schemes of Fidelity National and its off-spring such as LPS.

I reduced the banking industry’s scams and abuses into three primary areas or categories OVER 12 YEARS AGO!!!!. The three (3) major issues I have informed you all of are as follows:

#1 BANKS CAN’T COUNT and the amounts they claim are owed for payoff, principal balance, escrow, payments due etc… can NEVER be trusted or accepted without a complete audit of the servicing history from origination to specific date (i.e. acceleration, payoff, foreclosure, bankruptcy etc…) I have informed all of you that the “computer systems” used can’t compute and once a so-called “mistake” is made (i.e. programmed financial engineering scheme) the system can’t go back and adjust the system and amortize the loan correctly. Affiants, as I have said over and over again in countless affidavits and reports, simply take numbers off a computer screen (garbage in – – garbage out) that is usually a third-party system and the affiant has NO INDEPENDENT OR RELEVANT KNOWLEDGE as to the facts of the amount and how those amounts were arrived at. With my scripted depo questions, time-and-time again, affiants never audit or simply conduct a “sample check” of the entire “servicing history” from origination to present date, to ascertain any errors, miscalculations, misapplications, wrongful charges, etc… The lawyers (foreclosure mills) prepare the affidavits and check the payments. As the EMC executive told me in mid 90s “you must sue the lawyers, they are ALL in on it!”

#2 BANKS CAN’T ACCOUNT for the chain of title and ownership of the note and who has authority to foreclose, accelerate, modify, approve assumptions etc… In other words, they can’t account for the actual note holder and how such status was established and if the note has been pledged, sold to others, hypothecated, traded, transferred etc… Affiants, as I have said over and over again in countless affidavits and reports, simply take the information off a computer screen (garbage in – – garbage out) that is usually a third-party system and the affiant has NO INDEPENDENT OR RELEVANT KNOWLEDGE as to the facts of note ownership and they have not reviewed the PSA, necessary assignments, wet ink original notes, indorsements, authorities for the indoresements, checks and wire transmittals, collateral and custodial records and other evidence that the actual holder took possession, control, and ownership of the note. They simply take the information from the last public recording and go with that ignoring all the intermediary assignments. This has been going on for decades now. Again, the lawyers (foreclosure mills) prepare the affidavits and check the title history and often charge a fee for the “title search” that isn’t worth the paper it is written on. As the EMC executive told me in mid 90s “you must sue the lawyers, they are ALL in on it!”

#3 WHEN CAUGHT WITH THEIR HAND IN THE COOKIE JAR (i.e. cooking the books jar) the banks and their lawyers will fabricate evidence, documents, provide perjured testimony, create false affidavits, destroy documents and claim its a gummy bear jar, not a cookie jar. In essence, NOTHING, ABSOLUTELY NOTHING A BANK, LENDER, SERVICER, OR THEIR LAWYERS place in pleadings, affidavits, summary judgment motions, assignments, indorsements, deposition testimony etc… CAN NEVER BE ACCEPTED AS TRUE OR AS FACT without a complete forensic review, audit, and examination of all wet ink docs, records, financial accountings etc… that PROVE EACH AND EVERY ALLEGATION AND FACT IN A PLEADING, AFFIDAVIT, OR TESTIMONY.

The bottom-line here is that lawyers must QUESTION EVERYTHING AND CHALLENGE EVERYTHING. If not, you may be mal-practicing knowing everything you know now. Money MUST be spent in depositions to make them prove up their cases (they can’t) and e-discovery is and will be critical since they will continue to fabricate evidence and testimony.

In any event, you must read each line and paragraph of this order as WELL AS THE TRANSCRIPTS TO THIS CASE. I have read some, will one of you be good enough to go on Pacer and secure rest and post on one of the many sites we support!

Nye

Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: personal knowledge, PROOF, representations by counsel | 13 Comments »

LIES: RATINGS, APPRAISALS, AFFIDAVITS ETC.

Posted on September 30, 2010 by Neil Garfield

SERVICES YOU NEED

The common thread is they were lying.

They lied when they said these were AAA rated liquid investments based upon industry standard underwriting standards for residential mortgages
They lied when they said this property is worth more than the principal that was borrowed.
They lied when they said these loans are in default
They lied when they said they were giving a complete accounting for the transaction
They lied when they said “I have personal knowledge”
And they are lying now when they say the contents of the fraudulent documents are true but the person was wrong. If that was true all they would have to do is submit a corrective instrument signed by someone who would swear again under oath that the facts were true. But they don’t have that person because there are no such “true facts.” The whole thing is a myth and now it is starting to unravel. There is a way out of this mess for everyone, but nobody listens to the facts — they (the banks) insist on stepping on rake after rake as they walk off a cliff. Who is advising these people, Daffy Duck?

Crushing their own credibility, GMAC, Ally and Chase and soon other banks and their foreclosure mills will soon be trying to tell us that the information on the affidavit is correct, that the substitution of trustee is valid, that the notice of default is genuine, that they are the holder of the note (even if the obligation inures to the benefit of another party), and that the lien has been perfected. They continue to proceed as though they can fool all the people all of the time.

Memo to Banks: your advantage in procedure is vanishing — there are about 5,000 judges across the country that are questioning themselves and their docket and most of all YOU, whom they trusted. Judges don’t like it when someone uses the system to make a mockery of the rules, and they really don’t like it when they realize that they just rubber stamped 3,000 foreclosures that were fatally defective. RULE #1: Don’t make the Judge angry. Oops, you already did that.

Nobody liked or trusted the banks before the revelations by GMAC and Chase corroborating what I have been saying for three years and teaching in my seminars about evidence, objections and the rules of civil procedure. Your credibility is going down the drain, what was left of it. You can’t use fake affidavits to circumvent the requirements of evidence and substantive law anymore. You can’t submit assignments, endorsements, substitutions of trustee, notices of default, notices of sale and file motions for summary judgment unless you are actually entitled to win on a level playing field. That means you need a live witness who is going to say that the assignment was executed by them on behalf of an entity that had something to assign and with authority from that entity that can be shown within the proffer of other evidence. You need a live person who is willing to perjure themselves. And even if you found one, they will never survive cross examination, discovery and investigation.

It is no longer a secret that there were no assignments, no endorsements, no allonges, no transmittal of the paperwork until you decided to foreclose. It’s no secret that when the new paperwork was signed, the people signing it had no more idea what they were signing than those characters who signed the affidavits. It’s no secret that the auctions were based upon fraudulent “credit bids” and that title was improperly documented and thus not actually transferred — not in the eyes of any competent title examiner. It’s no secret that it was all a sham — not anymore. So you can either continue to strategize with Daffy Duck as your chief adviser or you can choose another path. If you continue down the current path, do the math. It doesn’t work out very well. Do the politics. It doesn’t work out very well.

Congratulations, you just became the loss insurer for millions of American homeowners — and at the same time you have exposed your other activities in student loans, credit cards, auto loans and other debt.

Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: affidavits, appraisal fraud, authroity to sign, evidence, PROOF, raings, Rules | 16 Comments »

non-judicial sale is NOT an available election for a securitized loan

Posted on May 28, 2010 by Neil Garfield

NON-JUDICIAL STATES: THE DIFFERENCE BETWEEN FORECLOSURE AND SALE:

FORECLOSURE is a judicial process herein the “lender” files a lawsuit seeking to (a) enforce the note and get a judgment in the amount owed to them (b) asking the court to order the sale of the property to satisfy the Judgment. If the sale price is lower than the Judgment, then they will ask for a deficiency Judgment and the Judge will enter that Judgment. If the proceeds of sale is over the amount of the judgment, the borrower is entitled to the overage. Of course they usually tack on a number of fees and costs that may or may not be allowable. It is very rare that there is an overage. THE POINT IS that when they sue to foreclose they must make allegations which state a cause of action for enforcement of the note and for an order setting a date for sale. Those allegations include a description of the transaction with copies attached, and a claim of non-payment, together with allegations that the payments are owed to the Plaintiff BECAUSE they would suffer financial damage as a result of the non-payment. IN THE PROOF of the case the Plaintiff would be required to prove each and EVERY element of their claim which means proof that each allegation they made and each exhibit they rely upon is proven with live witnesses who are competent — i.e., they take an oath, they have PERSONAL KNOWLEDGE (not what someone else told them),personal recall and the ability to communicate what they know. This applies to documents they wish to use as well. That is called authentication and foundation.

SALE: Means what it says. In non-judicial sale they just want to sell your property without showing any court that they can credibly make the necessary allegations for a judicial foreclosure and without showing the court proof of the allegations they would be required to make if they filed a judicial foreclosure. In a non-judicial state what they want is to SELL and what they don’t want is to foreclose. Keep in mind that every state that allows non-judicial sale treats the sale as private and NOT a judicial event by definition. In Arizona and many other states there is no election for non-judicial sale of commercial property because of the usual complexity of commercial transactions. THE POINT is that a securitized loan presents as much or more complexity than commercial real property loan transactions. Thus your argument might be that the non-judicial sale is NOT an available election for a securitized loan.

When you bring a lawsuit challenging the non-judicial sale, it would probably be a good idea to allege that the other party has ELECTED NON-JUDICIAL sale when the required elements of such an election do not exist. Your prima facie case is simply to establish that the borrower objects the sale, denies that they pretender lender has any right to sell the property, denies the default and that the securitization documents show a complexity far beyond the complexity of even highly complex commercial real estate transactions which the legislature has mandated be resolved ONLY by judicial foreclosure.

THEREFORE in my opinion I think in your argument you do NOT want to concede that they wish to foreclose. What they want to do is execute on the power of sale in the deed of trust WITHOUT going through the judicial foreclosure process as provided in State statutes. You must understand and argue that the opposition is seeking to go around normal legal process which requires a foreclosure lawsuit.

THAT would require them to make allegations about the obligation, note and mortgage that they cannot make (we are the lender, the defendant owes us money, we are the holder of the note, the note is payable to us, he hasn’t paid, the unpaid balance of the note is xxx etc.) and they would have to prove those allegations before you had to say anything. In addition they would be subject to discovery in which you could test their assertions before an evidentiary hearing. That is how lawsuits work.

The power of sale given to the trustee is a hail Mary pass over the requirements of due process. But it allows for you to object. The question which nobody has asked and nobody has answered, is on the burden of proof, once you object to the sale, why shouldn’t the would-be forecloser be required to plead and prove its case? If the court takes the position that in non-judicial states the private power of sale is to be treated as a judicial event, then that is a denial of due process required by Federal and state constitutions. The only reason it is allowed, is because it is private and “non-judicial.” The quirk comes in because in practice the homeowner must file suit. Usually the party filing suit must allege facts and prove a prima facie case before the burden shifts to the other side. So the Judge is looking at you to do that when you file to prevent the sale.

Legally, though, your case should be limited to proving that they are trying to sell your property, that you object, that you deny what would be the allegations in a judicial foreclosure and that you have meritorious defenses. That SHOULD trigger the requirement of re-orienting the parties and making the would-be forecloser file a complaint (lawsuit) for foreclosure. Then the burden of proof would be properly aligned with the party seeking affirmative relief (i.e., the party who wants to enforce the deed of trust (mortgage), note and obligation) required to file the complaint with all the necessary elements of an action for foreclosure and attach the necessary exhibits. They don’t want to do that because they don’t have the exhibits and the note is not payable to them and they cannot actually prove standing (which is a jurisdictional question). The problem is that a statute passed for judicial economy is now being used to force the burden of proof onto the borrower in the foreclosure of their own home. This is not being addressed yet but it will be addressed soon.

Filed under: CASES, CORRUPTION, Eviction, expert witness, Fannie MAe, foreclosure, foreclosure mill, Forensic Analysis Workshop, GTC | Honor, HERS, investment banking, Investor, MODIFICATION, Mortgage, Motion Practice and Discovery, securities fraud, Securitization Survey, Servicer, STATUTES, trustee, workshop | Tagged: allegations, ARIZONA, authentication, burden proof, competent witness, due process, election of non-judicial sale, exhibits, FOUNDATION, judicial, judicial economy, lawsuit, NON-JUDICIAL SALE, objection to sale, prima facie case, PROOF | 7 Comments »

Foreclosure Defense: Impact of Bank Failures

Posted on September 28, 2008 by Neil Garfield

I have been thinking about this as the questions pile in. Here are my thoughts so far —

1. Be careful with the Lehman bankruptcy and any other bankruptcy filing by one of the financial services companies that was even tangentially related to the process of the securitization of mortgages. Bankruptcy law has some features that are not apparent or even comprehensible to layman and even many lawyers who do not regularly practice in bankruptcy court. If you even hear that a company went bankrupt, you should consult with a competent bankruptcy practitioner in your area and ask him whether you need to file a proof of claim or some other paper that tells the Federal Court where the bankruptcy was filed that you have claims and defense regarding your mortgage and note, that you do not intend to waive them, and that if anyone buys our note or mortgage they take it subject to your claims and defenses.

2. How this might affect your claims and defenses. The burden is still on the party seeking to foreclose on your mortgage. They must allege that they are the lender, the holder of the note and that the note is in default, subject to acceleration pursuant to the terms of the mortgage indentures and the terms of the note. As with any other situation involving foreclosure if you snooze you lose. Do nothing and the Court is allowed to and required to assume and proceed as though you have no claims or defenses. Do nothing and your house will be sold at auction and then you will be scrambling to set the sale aside, which has been done, as we have reported here, but it sure makes your position more precarious than if you act proactively before anything happens.

ASSUME NOTHING AND CHALLENGE EVERYTHING: Just because a letter was sent out declaring a default doesn’t mean that the person who signed it knew anything about the account or that they were properly authorized to send it, or even that their company was the proper party to declare the default, or, even that their company knew or had performed any due diligence to determine if payments to teh true holder in due course )holders of mortgage backed securities) had been paid by co-obligors acquired as the loan went up through teh chain of securitizarion.

3. Proof and evidence: The failure of a bank and the takeover by another bank creates several opportunities for borrowers that did not exist before, if you know how to navigate the system. The time is NOW to act proactively, get your audit done, announce rescission, demand satisfaction of your mortgage and note, and to file for quiet title.

4. You ALWAYS want to keep the burden on the “lender” or those claiming through the “lender.” Do everything you can to keep the burden on THEM to produce the note, produce ALL the assignments that show proper chain of title on the note and mortgage, and produce the Assignment and Assumption of Mortgage Agreement(S), and the Pooling and Service Agreement(s).

5. Thus far it appears as though there in only ONE set of master agreements executed by the lender, the mortgage aggregation and the trustee of the pool of assets. The date of these agreements will almost always precede the date the date the mortgage and note came into existence and will without exception predate the date of default. For lawyers, this presents a number of arguments that can be used to throw the other side into disarray as to what assignment, if any, was valid, and whether they were hiding third parties at the loan closing (violation of TILA) and whether they were hiding third party payments at closing (TILA violation).

6. It also gives you grounds for saying that since the REAL lender was not disclosed, the three day rescission right continued up to and including the date when the REAL lender was disclosed. Either they disclose the REAL lender and then you have all your remedies against both the pretender lender and the real lender (probably unchartered as bank or lender and even unregistered as business to do business in the state) or they don’t disclose it and you push the issue of non -disclosure by demanding the records of the mortgage servicer and the mortgage originator and the title/escrow agent to track where the money came from and where it went after closing.

7. LAWYERS TAKE WARNING: First of all remember that the competency of a witness contains four elements (oath, perception, memory and communication) and that proof can only be offered upon a proper foundation. It is here where these overnight mergers, the firings of thousands of people, and the locations of records is going to be a real challenge to the lenders.

8. DO NOT TAKE LENDER AFFIDAVITS FOR GRANTED. THEY ARE MOST LIKELY OUTRIGHT FRAUD, FORGED, OR SIGNED BY SOMEONE WITH DUBIOUS AUTHORITY. IN ALMOST ALL CASES EVEN IF THE AUTHORITY is established by a competent witness though the presentation of a proper foundation, IT IS SIGNED WITHOUT ANY PERSONAL KNOWLEDGE — WHICH IS WHY I MENTION THE ELEMETNS OF COMPETENCY OF A WITNESS AND PROPER FOUNDATION. THIS IS BASIC BLACK LETTER LAW. YOU CAN WIN, NOT MERELY DELAY CASES. AND YOU CAN DO THEM ON CONTINGENCY FEES THAT WILL ENABLE YOU TO EARN SUBSTANTIAL FEES THAT YOUR CLIENTS WILL HAPPILY PAY.

Filed under: CDO, Eviction, foreclosure, GTC | Honor, Mortgage | Tagged: bank failures, COMPETENCE OF A WITNESS, EIVDENCE, FORECLOSURE DEFESNE, foreclosure offense, FOUNDATION, PROOF, quiet title, securitization | 6 Comments »

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SEFFAR v. RESIDENTIAL CREDIT SOLUTIONS INC

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This quiet title claim against U.S. Bank and BONY (collectively, “Defendants”) is based on the assertion that Defendants have no interest in the Plaintiffs’ mortgage loan, yet have nonetheless sought to foreclose on the subject property.

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REPRESENTATIONS BY COUNSEL ARE NO SUBSTITUTE FOR PROOF

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The common thread is they were lying.

They lied when they said these were AAA rated liquid investments based upon industry standard underwriting standards for residential mortgages

They lied when they said this property is worth more than the principal that was borrowed.

They lied when they said these loans are in default

They lied when they said they were giving a complete accounting for the transaction

They lied when they said “I have personal knowledge”

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NON-JUDICIAL STATES: THE DIFFERENCE BETWEEN FORECLOSURE AND SALE:

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