ONE 79th STREET ESTATES, INC. v. AMERICAN INVESTMENT SERVICES

One 79th Street Estates, Inc. and Darrell Wilson a/k/a Keith D. Wilson, a single man; Po Boy Realty Investment, Inc., Appellants,
v.
American Investment Services, Appellee.

No. 3D09-3134.

District Court of Appeal of Florida, Third District.

Opinion filed October 27, 2010.

Dorothy F. Easley, for appellants.
Mark Evans Kass, for appellee.

Before RAMIREZ, C.J., and GERSTEN and SALTER, JJ. SALTER, J.

One 79th Street Estates, Inc., Po Boy Realty Investments, Inc., and their president, Mr. Wilson, appeal a final summary judgment of foreclosure on a commercial mortgage loan for $759,600, documented in June 2006. Because the appellee/lender, American Investment Services (AIS), accepted a very substantial paydown after an initial payment default and acceleration, and because of the conflicting terms of documents offering reinstatement of the mortgage after the entry of an earlier judgment, we reverse the final summary judgment and remand the case for further proceedings.

No Stamps, No Foreclosure

This was a commercial loan on stationery-store documents that were modified as additional advances occurred. There is nothing inherently wrong with pre-printed notes and mortgages, but in this case the forms omitted certain terms that might have guided the parties and the court after an unusual series of occurrences and problems. Less is not always more.

The first problem was a payment default by the appellants; this gave rise to a foreclosure complaint in 2006. The second problem was AIS’s failure to pay for documentary stamp and intangible taxes on the mortgage, and to record it. Notwithstanding the fatal deficiency inherent in AIS’s failure to pay the required taxes,1 and apparently as a result of the appellants’ failure to mount any meaningful defense, a predecessor trial judge entered a final summary judgment of foreclosure in January 2007. A foreclosure sale was then set for April 5, 2007.

At some point before that sale, the parties entered into a reinstatement and mortgage modification agreement. The April 2007 “Agreement for Reinstatement of Mortgage and to Secure Additional Advances” included (among other terms) a recitation of the loan history, an itemized reinstatement amount of $100,503 (acknowledging receipt of $34,100 paid by the appellants to reduce that arrearage to $66,403), and a postponement of the foreclosure sale for 75 days so that the appellants could pay that balance. Paragraph 6 of the agreement stipulated that “the mortgage note and mortgage are a good and valid mortgage on the subject property and that [the appellants] have no defenses thereto.” In June 2007, it is undisputed that the appellants made a further payment of $82,000 to AIS, bringing the total post-judgment payments to $116,100.2

No Reinstatement, No Refund, No Judgment

AIS later maintained that the payments of $116,100 were insufficient to reinstate the mortgage, but were tendered and accepted only in consideration of AIS’s agreement to reschedule foreclosure sale dates. Ultimately, AIS did not reinstate the mortgage, dismiss the foreclosure, or return any of the payments made by the appellants. In December 2007, just before a rescheduled sale, Mr. Wilson filed a petition under Chapter 13 of the United States Bankruptcy Code and the sale was cancelled. During the bankruptcy, Mr. Wilson raised the lender’s non-payment of taxes and resulting unenforceability of the mortgage. The bankruptcy court sent the parties back to the circuit court for a resolution of that issue. In June 2008, the trial court vacated the foreclosure judgment and abated the foreclosure lawsuit to permit AIS to pay the documentary stamp and intangible taxes and record the mortgage. AIS then took those steps.
Resumption of the Foreclosure Action

In November 2008, the bankruptcy court dismissed Mr. Wilson’s Chapter 13 case. In 2009, AIS resumed its prosecution of the original 2006 foreclosure case and moved again for final summary judgment. The appellants were allowed to amend their affirmative defenses before AIS’s motion was heard.

Although the appellants raised a number of affirmative defenses and related issues in Mr. Wilson’s affidavit,3 only one issue merits consideration here. The appellants’ second and third amended affirmative defenses asserted that the mortgage was to have been reinstated upon AIS’s receipt of the $116,100 in payments in April and June of 2007. After a hearing, these amended affirmative defenses were rejected. AIS’s motion was granted, the final summary judgment was entered, and this appeal followed.

Analysis

When a mortgage is foreclosed, the mortgage is “merged” into the final judgment and loses its separate identity. Nack Holdings, LLC v. Kalb, 13 So.3d 92, 94 n.2 (Fla. 3d DCA 2009). The “reinstatement” of a mortgage after the entry of a foreclosure judgment is considerably more significant than merely rescheduling a foreclosure sale date. Reinstatement signifies that the mortgage is returned to its pre-default status asan effective instrument, by definition anticipating that any foreclosure judgment is vacated and the lawsuit dismissed.4 There is no apparent reason the parties could not have agreed to some form of settlement agreement whereby the foreclosure judgment would be reduced by the amounts paid, the lawsuit would not be dismissed, and a sale would only be set if the judgment debtor defaulted on future obligations, but that is not the agreement memorialized in this case.

Rather, the April 2007 reinstatement agreement expressly refers to an opportunity for the mortgagor to “reinstate” the AIS mortgage, to a “cure” of past amounts due, to the addition of the liquor license foreclosure amount “to the amount due under [AIS’s] note and mortgage,” and to a stipulation that “the mortgage note and mortgage are a good and valid mortgage on the subject property.” Each of these terms indicates a withdrawal of acceleration and a return of the mortgage loan to its pre-default, pre-foreclosure status. Coupled with the appellants’ undisputed payment of amounts exceeding the specified “arrearage,” and AIS’s retention of those payments,5 AIS is not entitled to judgment as a matter of law.

Another incongruity in the pleadings, affidavits, and judgment is evident in the interest amounts computed by AIS and included in the summary final judgment. Simple arithmetic discloses that AIS used the default interest rate of 18% per annum versus the “good standing” rate of 16%. If, as the appellants plainly intended, the $116,100 was tendered for “reinstatement,” the lower rate would have applied unless and until further (post-reinstatement) defaults arose and were noticed, and until the reinstated loan was again accelerated as a result of any such defaults.

Conclusion

Reviewing this record and all inferences in favor of the appellants as required,6 we conclude that a triable issue exists regarding the June 2007 reinstatement agreement and the parties’ performance under it. Because the final summary judgment was denied as to any personal liability of Mr. Wilson under the mortgage loan, we have not addressed the parties’ contentions on that point.

The final summary judgment is reversed and the case is remanded for further proceedings.7
Not final until disposition of timely filed motion for rehearing.

Footnotes

5. In AIS’s affidavits in support of its motion for summary judgment, AIS attached a letter from AIS’s counsel in June 2007 purporting to add additional terms for reinstatement. If there was not a meeting of the minds, however, and the appellants were not entitled to reinstatement, AIS had no right to retain the payments tendered pursuant to the agreement.

6. Sheikh v. Coregis Ins. Co., 943 So.2d 242, 244 (Fla. 3d DCA 2006).

7. Such further proceedings should also address the appellants’ requests for additional discovery and leave to amend to add a counterclaim. Those motions were denied in connection with the summary judgment rulings.

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Recently many blogs have been discussing MERS and CMBS, well here is an example of one case from a NY Supreme Court. You can read it and draw your own conclusions by commenting down below if you wish.

Be sure you catch Judge IRA B. WARSHAWSKY’s valid points!

SUPREME COURT : STATE OF NEW YORK
COUNTY OF NASSAU

MASS OP LLC and MASS ONE LLC

against

PRINCIPAL LIFE INSURANCE COMPANY
PRINCIPAL GLOBAL INVESTORS, LLC,
WELLS FARGO BANK, N.A., CENTERLINE
CAPITAL GROUP, INC., BANK OF AMERICA
NATIONAL ASSOCIATION, Successor by
Merger to LASALLE BANK NATIONAL
ASSOCIATION, as TRUSTEE for the Registered
Holders of Bear Stearns Commercial Mortgage
Securities, Inc. Commercial Mortgage Pass-
Through Certificates Series 2006-PWR14

Excerpts:

The application stated that the lender intended to ” securitize” the loan and the borrower was to “cooperate in connection with any such securitization.” The application recited that each borrower was a “single purpose bankruptcy-remote entity…formed exclusively for the purpose of owning and operating the property.” The application stated that the loan amount would be not less than $65 million provided, among other conditions, that the loan amount would be equal to 80% of the appraised value of the property “pursuant to an appraisal approved by lender. “

However, the court hastens to add that it is not insensitive to plaintiffs ‘ predicament. Traditionally, mortgage assignments were recorded with the County Clerk. By searching the mortgage records, the mortgagor could determine the present mortgage holder and attempt to negotiate a “work out” or forbearance. In 1993, several large participants in the mortgage industry created the Mortgage Electronic Registration System (“MERS”). Pursuant to MERS, assignments of residential mortgages, instead of being publicly recorded, are tracked electronically in a private system (See MERSCORP, Inc. Romaine 8 NY3d 90 (2006)). By visiting MERS’ website or dialing its 800 number , a homeowner may access information regarding his or her loan servicer, but not the holder of the mortgage.

This lack of disclosure may create substantial difficulty when a homeowner wishes to negotiate the terms of his or her mortgage or enforce a legal right against the mortgagee and is unable to learn the mortgagee s identity (See 8 NY3d at 104, Kaye, J. dissenting). This

“information deficit” may function to “insulate a note holder from liability… and hide predatory lending practices”

(Id). The MERS system applies only to residential mortgages. However, as the present case illustrates , securitized financing creates the potential for the same abuses with commercial mortgages because of a similar “information deficit. ” While a breach of contract action against the lender does not lie, this court echoes Judge Kaye in calling the issue to the attention of the Legislature (ld). The court will now proceed to determine the sufficiency of plaintiffs ‘ fraud claims.

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Just recently:

UNITED STATES BANKRUPTCY APPELLATE PANEL
OF THE NINTH CIRCUIT

In re: BAP No. CC-09-1396-HPDu

Bk. No. 09-15088-TD

FAWN RIDGE PARTNERS, LP,

FAWN RIDGE PARTNERS, LP,
Appellant,

v.

BAC HOME LOANS SERVICING, LP,
Appellee.
______________________________)
Submitted on March 18, 2010
at Pasadena, California
Filed – March 29, 2010

M E M O R A N D U M

VI. CONCLUSION

For the foregoing reasons, we REVERSE the bankruptcy court’s order granting stay relief to BAC. BAC is free to file a new motion for relief from stay if it can properly demonstrate its standing. 13

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From Bloomberg:

Wells Fargo & Co., conceding that some foreclosure affidavits “did not strictly adhere to the required procedures,” said it will file supplemental statements to courts in about 55,000 proceedings….. The bank will begin filings in 23 states immediately and aims to complete them by mid-November, subject to local laws, according to the statement.

“The issues the company has identified do not relate in any way to the quality of the customer and loan data,” the San Francisco-based lender said in the statement. “Nor does the company believe that any of these instances led to foreclosures which should not have otherwise occurred.”….

“The company has identified instances where a final step in its processes relating to the execution of the foreclosure affidavits (including a final review of the affidavit, as well as some aspects of the notarization process) did not strictly adhere to the required procedures,” it said in the statement.

Wells Fargo has assigned 160 employees in four offices to be part of the review, said Teri Schrettenbrunner, a spokeswoman for the company, in a phone interview

From

Wednesday it made mistakes in the paperwork for thousands of foreclosure cases and promised to fix them.

The San Francisco-based bank said it plans to refile documents in 55,000 of the cases by mid-November. The company said not all those cases included errors but didn’t say how many thousands did.

Wells Fargo described the mistakes as technical and said it has no plans to halt the foreclosure process, though filing new paperwork will cause some delays.

“We don’t believe that there are instances in which the foreclosures would not have occurred otherwise,” said Teri Schrettenbrunner, a Wells Fargo spokeswoman. The documents are being refiled in the 23 states where a judge’s approval is needed to complete a foreclosure.

Wells Fargo & Co.’s CEO, John Stumpf, has declined to join Bank of America Corp., Ally Financial Inc.’s GMAC Mortgage and other banks in suspending foreclosures because of flawed paperwork that surfaced at several large banks.

Via ForeclosureBlues

Ohio AG Cordray Asks Court to Consider GMAC Fraud in Cleveland Foreclosure Case

“Judges rely upon the accuracy of affidavits to grant judgments and ensure that the integrity of the judicial system can be trusted,” said Attorney General Cordray. “False affidavits throw the entire system into question. Foreclosures should not move forward when the basis of evidence is perjured statements.”

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DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT

July Term 2010

GUISEPPE SERVEDIO
a/k/a Joseph Servedio,
Appellant,

v.

US BANK NATIONAL ASSOCIATION, as Indenture Trustee, on behalf of
the holders of Terwin Mortgage Trust 2007-AHL1, Asset-Backed
Securities Series 2007-AHL1,
Appellee.

No. 4D10-1898

[October 27, 2010]

PER CURIAM.

The issue presented in this appeal is whether the trial court erred in
granting a final summary judgment of foreclosure where appellee failed
to file with the court a copy of the original note and mortgage prior to the
entry of judgment. Because the absence of the original note created a
genuine issue of material fact regarding appellee’s standing to foreclose
on the mortgage, summary judgment was not proper. We reverse.

In November 2008, appellee filed a n unverified complaint against
appellant, seeking both foreclosure of the mortgage and reestablishment
of the lost promissory note. Appellant attached to the complaint a copy
of the mortgage it sought to foreclose, but this document identified
Bankers Express Mortgage, Inc. as the lender and mortgagee. An
adjustable rate rider a n d prepayment penalty rider also identified
Bankers Express as the lender and mortgagee.

Appellant answered and denied all of the allegations in appellee’s
complaint. In addition, appellant asserted affirmative defenses that
appellee was not “in privity” with the lender and mortgagee and that
appellee lacked standing to seek foreclosure.

Appellee filed for summary judgment on the foreclosure count alone.
In support of its motion, appellee filed an affidavit from a representative
of the loan servicing company who stated the total amount due on the
mortgage. The affidavit did not indicate that appellee was an owner or
holder of the mortgage and note, and no documentary evidence was
appended to the affidavit. The trial court granted appellee’s motion for
summary judgment. The record on appeal contains no indication that
appellee filed the original note with the trial court.1

Summary judgment is proper if there is no genuine issue of material
fact and the moving party is entitled to judgment as a matter of law.
Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130
(Fla. 2000). The court may consider “affidavits, answers to
interrogatories, admissions, depositions, and other materials as would be
admissible in evidence” o n which the parties rely. Fla. R. Civ. P.
1.510(c). The court must draw “every possible inference” in favor of the
non-moving party. Edwards v. Simon, 961 So. 2d 973, 974 (Fla. 4th
DCA 2007). The facts must be “so crystallized that nothing remains but
questions of law.” Moore v. Morris, 475 So. 2d 666, 668 (Fla. 1985.) The
moving party bears the burden of showing the complete absence of
genuine issues of material fact. Frost v. Regions Bank, 15 So. 3d 905,
906 (Fla. 4th DCA 2009). Moreover, the “party moving for summary
judgment must factually refute or disprove the affirmative defenses
raised, or establish that the defenses are insufficient as a matter of law.”
770 PPR, LLC v. TJCV Land Trust, 30 So. 3d 613, 618 (Fla. 4th DCA
2010) (quoting Leal v. Deutsche Bank Nat’l Trust Co., 21 So. 3d 907, 909
(Fla. 3d DCA 2009)). We review de novo an order granting summary
judgment. Frost, 15 So. 3d at 906.

“The party seeking foreclosure must present evidence that it owns and
holds the note and mortgage in question in order to proceed with a
foreclosure action.” Lizio v. McCullom, 36 So. 3d 927, 929 (Fla. 4th DCA
2010). A plaintiff must tender the original promissory note to the trial
court or seek to reestablish the lost note under section 673.3091, Florida
Statutes. State St. Bank & Trust Co. v. Lord, 851 So. 2d 790, 791 (Fla.
4th DCA 2003). Moreover, if the note does not name the plaintiff as the
payee, the note must bear a special indorsement in favor of the plaintiff
or a blank indorsement. Riggs v. Aurora Loan Servs., LLC, 36 So. 3d 932,
933 (Fla. 4th DCA 2010). Alternatively, the plaintiff may submit evidence
of a n assignment from th e payee to the plaintiff or a n affidavit of
1 Appellee has twice moved this court to supplement the record on appeal to
include a copy of the original note and mortgage it claims to have filed at the
summary judgment hearing. This court denied the motions with leave for
appellee to seek relinquishment of jurisdiction to the trial court to recreate the
record. Appellee has not sought leave to recreate the record in the court below.

Likewise, appellee has not designated any transcripts to support its position.
ownership to prove its status as a holder of the note. Verizzo v. Bank of
N.Y., 28 So. 3d 976 (Fla. 2d DCA 2010); Stanley v. Wells Fargo Bank, 937
So. 2d 708 (Fla. 5th DCA 2006).

The record on appeal does not contain the original note, evidence of
an assignment of the mortgage and note to appellee, or an affidavit of
ownership by appellee. Appellee filed no other admissible “pleadings,
depositions, answers to interrogatories, admissions, affidavits, and other
materials” to support its contention that it owns and holds the note and
mortgage. Fla. R. Civ. P. 1.510(c). “[I]t is apodictic that summary
judgments may not be granted . . . absent the existence” of admissible
evidence in the record. TRG-Brickell Point NE, Ltd v. Wajsblat, 34 So. 3d
53, 55 (Fla. 3d DCA 2010). Without evidence demonstrating appellee’s
status as holder and owner of the note and mortgage, genuine issues of
material fact remain, and summary judgment was improper.

Appellee argues on appeal that it presented to the trial court a copy of
the original note and an affidavit of ownership at the summary judgment
hearing. Appellee concedes, however, that the documents were not filed
with the clerk of the court until several days after the entry of summary
judgment. The documents were not part of the record at the time the
motion for summary judgment was granted, so we cannot determine
whether the trial court considered those documents in rendering its
decision. See Poteat v. Guardianship of Poteat, 771 So. 2d 569 (Fla. 4th
DCA 2000) (noting that a n appellate court may review only items
considered by the trial court). Because appellant does not stipulate that
the documents were considered at the hearing, and because appellee has
not sought relief in the trial court to recreate the record, we must reverse
the order granting summary judgment. We cannot rely o n the
representations of counsel alone. Wright v. Emory, 41 So. 3d 290, 292
(Fla. 4th DCA 2010) (“[An] attorney’s unsworn, unverified statements do
not establish competent evidence.”).

Even if the trial court considered the note and mortgage at the
hearing, the documents were not authenticated, filed, and served more
than twenty days before the hearing as required by Rules 1.510(c) and
1.510(e). Appellee’s failure to abide by these rules also necessitates
reversing the order granting summary judgment. Verizzo, 28 So. 3d at
977-78; Mack v. Commercial Indus. Park, Inc., 541 So. 2d 800 (Fla. 4th
DCA 1989).

Accordingly, we reverse the entry of final summary judgment in favor
of appellee a n d remand for further proceedings. We note that a
summary judgment motion may b e filed “at any time” under Rule
1.510(a), and “this opinion does not preclude a re-filing of such motion if
and when the necessary legal documents are before the court.” Mack,
541 So. 2d at 800.

Reversed and remanded.

WARNER, POLEN and LEVINE, JJ., concur.
* * *
Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; Thomas H. Barkdull, III, Judge; L.T. Case No.
502008CA037754XXXXMB.

Peter J. Snyder of Peter J. Snyder, P.A., Boca Raton, for appellant.
Heidi J. Weinzetl of Shapiro & Fishman, LLP., Boca Raton, for
appellee.

Not final until disposition of timely filed motion for rehearing.

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SUPREME COURT – STATE OF NEW YORK

Index No. 10123/09

PRESENT:
Honorable Karen V. Murphy
Justice of the Supreme Court

JP. Morgan Mortgage Acquisition Corp.,

v.

Richard Simmons, Eleanor Simmons, Bank of
America, NA, First Chicago, et aI.,

Excerpts:

The Notice of Pendency fied May 27 2009 stated that Plaintiff “is also in possession
of the original note with a proper endorsement and/or allonge and is therefore the holder of
both the note and mortgage” and the complaint contained a similar allegation however
Margaret Dalton, a self proclaimed “Officer” of EMC Mortgage Corporation, a non-par,
submitted an ‘ affidavit of lost note’ sworn to on Januar 27, 2010. It is not clear whether the
alleged servicer, EMC has authority to act on Plaintiff’s behalf in this matter , as no power
of attorney was submitted to the Court. The basis for Ms. Dalton s purported knowledge of
the circumstances surrounding the assignment in question are not clearly stated in her
affidavit, which by its terms, is contradictory. Bald assertions of possession of the original
note, without more, in light of the conflicting evidence, is not sufficient to establish a prima
facie case.

Furthermore, the assignment recorded on May 20, 2009 specifically states that it is
an “assignment of mortgage ” and makes no reference to the note. Thus, a question of fact
exists as to whether the note was ever assigned or delivered to Plaintiff. It may well be that
the note was neither assigned nor delivered to Plaintiff prior to commencement of this action
and Plaintiff would then be without authority to bring this action.

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This is a case you may not recognize but NY is very lucky to have.

Thank you for paving the way.

.

145 A.D.2d 537 (1988)

John W. Kluge, Respondent,
v.
William D. Fugazy et al., Appellants, et al., Defendants

Appellate Division of the Supreme Court of the State of New York, Second Department.
December 19, 1988

Mangano, J. P., Thompson, Brown and Kunzeman, JJ., concur.

Ordered that the order is reversed, on the law, with costs, and the motion is granted.

As the result of a series of financial transactions, the 538*538 plaintiff received an assignment of a mortgage as collateral security for a promise of indemnification. The underlying note was not assigned and was expressly excluded from transfer.

The plaintiff’s first and second causes of action for foreclosure and a deficiency judgment, respectively, must fail since foreclosure of a mortgage may not be brought by one who has no title to it and absent transfer of the debt, the assignment of the mortgage is a nullity (Merritt v Bartholick, 36 N.Y. 44, 45; Flyer v Sullivan, 284 App Div 697, 698; Beak v Walts, 266 App Div 900; Manne v Carlson, 49 App Div 276, 278). Moreover, we find that the written agreement and assignment between the parties were clear and unambiguous. They indicate that no delivery of the underlying obligation was intended, and they were entered into by sophisticated, counseled businessmen (see, Chimart Assocs. v Paul, 66 N.Y.2d 570, 573; Nau v Vulcan Rail & Constr. Co., 286 N.Y. 188, 198-199, rearg denied 287 N.Y. 630). As a result, the plaintiff’s third cause of action, for specific performance, must fail.

MUST WATCH

Investors are looking for banks to buy back potentially fraudulent residential mortgage-backed securities (RMBS). “The Strategy Session” hosts discuss this topic with Talcott Franklin, the principal of Talcott Franklin PC, whose firm has organized a RMBS clearinghouse on behalf of investors.

“Creature of their own Creation”

By Matt Schifrin FORBES
Oct. 25 2010 – 1:01 am

I pity CEO Brian Moynihan and the 284,000 other employees of Bank of America Corp (BAC).  That includes 15,000 Merrill Lynch brokers who are still recovering from the financial crisis and now have to explain to their clients why they work for a firm that is at the epicenter of America’s housing crisis.

Not only have they seen $80 billion in stock market value evaporate since April but they also have to suffer the humiliation of having a parent company bone-headed enough to pay $4 billion for Countrywide, the financial firm created by subprime mortgage pimp Angelo Mozilo. That mess could wind up costing BAC $50 billion, excluding legal fees and brand value deterioration. Remember Countrywide originated  $1.4 trillion in mortgages from 2005 to 2007 alone.

The latest ugly news for Bank of America is actually coming from Europe, where big institutional money managers and other mortgage securities buyers are now beginning to organize for an assault. This information comes from  John Mauldin’s, Thoughts from the Frontline Weekly Newsletter. His e-letter is a must-read for many money managers and serious investors.

.

By Thom Weidlich, Laurel Brubaker Calkins and Jody Shenn – Oct 26, 2010 12:01 AM ET

Kathy D. Patrick is a Houston lawyer who spends her Sundays teaching children about God. The rest of the week, according to one attorney who knows her, she can be “as frightening as a pit bull on steroids.”

That’s bad news for issuers of mortgage-backed securities like Bank of America Corp. Patrick represents bond investors including the Federal Reserve Bank of New York and BlackRock Inc. who are seeking to force the bank to buy back bad home loans, claiming the debt failed to match contractual promises about its quality.

Her law firm, Gibbs & Bruns LLP, is a 30-lawyer outfit that says it specializes in “bet the company” litigation. This month, it reached a settlement with JPMorgan Chase & Co. and Bank of Montreal stemming from an alleged fraud at a Canadian gold company. Earlier this year, Goldman Sachs Group Inc. and UBS AG settled with the firm over the sale of $550 million in mortgage-backed securities. Patrick reached that settlement on behalf of her clients just two months after filing suit.

Patrick, 50, is “fearless and tenacious,” said Dan Cogdell, a Houston criminal-defense lawyer who said she is capable of pit bull-like aggressiveness “if the need be.” If she succeeds in getting Bank of America to settle, it may trigger more calls for buybacks in the $1.4 trillion market for so-called non-agency mortgage securities, which lack government backing.

Bank costs from repurchasing mortgages in such securities may total as much as $179.2 billion, including expenses related to suits against bond underwriters, Chris Gamaitoni, a Compass Point Research and Trading LLC analyst, estimated in August.

$1.73 Billion

In June 2009, Patrick got Credit Suisse Group AG and Deutsche Bank AG to agree to pay $1.73 billion to end litigation over their decision to back out of the leveraged buyout of Huntsman Corp. Her firm is suing Zurich-based Credit Suisse as bond underwriter for a now-defunct Ohio company that sold securities based on health-care providers’ unpaid bills.

“She has a deep understanding of the banking process and the constraints, motivations and incentives of the banking industry,” said Harry M. Reasoner, a partner at Vinson & Elkins LLP in Houston, who also represented Huntsman.

In the fight against Charlotte, North Carolina-based Bank of America, Patrick represents the biggest bond investors in the U.S., including Pacific Investment Management Co., which runs the world’s biggest bond fund.

$47 Billion

On Oct. 18, she wrote Bank of America and Bank of New York Mellon Corp., the trustee for $47 billion of bonds created by Bank of America’s Countrywide Financial unit. In the letter, she accused Countrywide of failing to service the home loans properly. Her clients want Bank of America, which bought Countrywide in 2008, to take back some of the underlying loans, and are questioning its servicing as a way to broaden their legal options, Patrick said the next day.

“We continue to review and assess the letter, and have a number of questions about its content, including whether these investors have standing to bring these claims,” Bank of America Chief Financial Officer Charles H. Noski said Oct. 19 on a conference call with analysts. “We continue to believe the servicer is in compliance with the servicing obligations.”

.

?

October 25, 2010, 8:54 PM EDT

By Margaret Cronin Fisk

(Updates with spokesman’s comment in second paragraph.)

Oct. 25 (Bloomberg) — Texas Attorney General Greg Abbott sent subpoenas to JPMorgan Chase & Co., Bank of America Corp. and seven other banks or loan servicers seeking information about foreclosure practices, a spokesman said.

“The state is subpoenaing information and documents,” Jerry Strickland, the spokesman, said in an interview. He didn’t elaborate. The state also subpoenaed Ally Financial Inc., CitiMortgage Inc. and Wells Fargo & Co.

Abbott began investigating foreclosure practices in Texas following the disclosure of a December deposition in which an employee of Ally’s GMAC Mortgage unit testified that his team signed about 10,000 documents a month without verifying their accuracy. On Oct. 13, all 50 state attorneys general announced a joint investigation of foreclosures.

The Texas subpoenas followed letters sent by Abbott’s office to 30 loan servicers on Oct. 4, asking them to halt foreclosures in the state pending a review of their practices.

Abbott asked banks then to identify employees who filed faulty affidavits or other documents in the state and identify foreclosures that used such documents. He also asked lenders and servicers to halt all sales of properties previously foreclosed upon and stop all evictions.

Twenty-six of those companies responded to the letters, according to a spreadsheet of answers sent today by Strickland.

.

To: ALL HOLDERS OF RESIDENTIAL MORTGAGE BACKED SECURITIES FOR WHICH DEUTSCHE BANK NATIONAL TRUST COMPANY OR DEUTSCHE BANK TRUST COMPANY AMERICAS ACTS AS A SECURITIZATION TRUSTEE

FROM: DEUTSCHE BANK TRUST NATIONAL COMPANY, AS TRUSTEE AND DEUTSCHE BANK TRUST COMPANY AMERICAS, AS TRUSTEE (the “Trustee”)

Date: October 25, 2010

Re: Certain Allegations Regarding Loan Servicer Foreclosure Practices

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Today DJSP Enterprises Inc. announced Mark P. Harmon has resigned from the Board of Directors of the Company and the Board of Managers of DAL Group, LLC, a subsidiary of the Company.

Harmon Law Office from Newton Highlands, Massachusetts is being investigated by the state attorney general’s office for allegedly unlawfully evicting residents from bank-owned properties.

For more information on Mr. Harmon and Harmon Law Office be sure to catch the related to links down below.

October 25, 2010, 2:59 PM EDT

By David McLaughlin

Oct. 25 (Bloomberg) — Banks continue to cancel foreclosure hearings and sales in Florida, the U.S. state with the highest foreclosure rate behind Nevada and Arizona, after Bank of America Corp. said it was resuming efforts to seize homes.

Banks had called off about a third of their foreclosure- judgment hearings and more than half of their auctions at two Florida courthouses as of this morning, according to court records and personnel. Court administrators said rules mandating that homeowners be notified mean that foreclosures won’t resume in earnest for at least a month.

Bank of America and Detroit-based Ally Financial Inc.’s GMAC Mortgage unit said they were moving to complete pending foreclosures following complaints that home seizures nationwide were based on faulty documentation. Attorneys general in all 50 states, as well as federal agencies including the U.S. Department of Justice, are investigating.

GMAC said it is reviewing foreclosure cases that potentially have defective affidavits in the 23 states that use judicial proceedings for foreclosures, including Florida. If there are problems, they will be fixed and the cases then allowed to proceed, said Gina Proia, a spokeswoman for GMAC. Any case going to foreclosure sale in non-judicial states will also be reviewed, she said in an interview.

‘Ongoing Process’

“It’s an ongoing process and we expect the majority will be completed by the end of the year,” Proia said. In Palm Beach County, banks had canceled 139 out of 213 foreclosure auctions scheduled for today, according to court records. Citigroup Inc., Deutsche Bank AG, JPMorgan Chase & Co. and Bank of America were among those listed as canceling the sales.

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Nothing like starting off a Monday morning with back to back complaints! Except this one has lots of meat.

As mentioned in a previous post

Keep your eye on Harmon Law Offices, P.C. in Newton Highlands, MA 02461 aka Mark P. Harmon who serves as a director of Law offices of David J. Stern’s “DJSP Enterprises Inc.”

Birds of a feather flock together…so they say

[ipaper docId=40072124 access_key=key-1d3oxfv2a4fdg66e1dj9 height=600 width=600 /]

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

Tanya Beals, on behalf of herself and all
other persons similarly situated

VS.

Bank of America, N.A, BAC Home Loans
Servicing, L.P., a wholly owned subsidiary
of Bank of America, N.A., LaSalle Bank,
N.A., John Does 1-10

Excerpts:

Defendants Have Consistently Demonstrated a Willful Disregard
for the Procedural Safeguards Entitled to All Borrowers

Defendants Routinely Act in Bad Faith and in Breach of Contractual
Obligations During the Course of their Settlement Negotiations with Plaintiffs

FIRST COUNT
(Fraud)

SECOND COUNT
(Violation of the New Jersey Consumer Fraud Act
codified at N.J.S.A. §§ 56.8-1, et. seq.(NJCFA))

THIRD COUNT
(Breach of Contract)

FOURTH COUNT
(Breach of the Covenant of Good Faith and Fair Dealing)

FIFTH COUNT
(BREACH OF IMPLIED CONTRACT)

SIXTH COUNT
(Quantum Meruit)

SEVENTH COUNT
(Violation of the New Jersey Fair Foreclosure Act)

[ipaper docId=40043122 access_key=key-sxo1jhcdyw2v12wo6tc height=600 width=600 /]

BY Robert Gearty
DAILY NEWS STAFF WRITER

Sunday, October 24th 2010, 4:00 AM

Thousands of foreclosures across the city are in question because paperwork used to justify the seizure of homes is riddled with flaws, a Daily News probe has found.

Banks have suspended some 4,450 foreclosures in all five boroughs because of paperwork problems like missing and inaccurate documents, dubious signatures and banks trying to foreclose on mortgages they don’t even own.

The city’s not alone. All 50 states are investigating foreclosure paperwork, evicted homeowners are hiring lawyers and buyers of foreclosed homes are fretting over the legality of their purchases.

Last week, New York‘s top judge, Jonathan Lippman, began requiring all bank lawyers to sign a form vouching for the accuracy of their foreclosure paperwork.

That could have been a problem for one Long Island foreclosure that was being brought by GMAC Mortgage last year.

A sworn affidavit dated March 30 was signed by someone identified as Sherry Hall, vice president of a GMAC affiliate called Homecomings Financial Network.

Fifteen days later another sworn affidavit surfaced in another Suffolk County foreclosure, this time signed by a GMAC vice president named Sheri D. Hall.

Despite the difference in the names, the signatures were identical – and were vouched for by the same notary.

Suffolk Supreme Court Justice Peter Mayer refused to approve the foreclosure bearing the name Sherry Hall and ordered her, and the notary, to appear in court Nov. 17. GMAC officials did not return calls.

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Related link:

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CASE EVERYONE SHOULD READ: DEUTSCHE BANK TRUST AMS. AS TRUSTEE v. McCoy, 2010 NY Slip Op 51664 – NY: Supreme Court, Suffolk

This may be the first lawsuit from an individual homeowner seeking to undo a completed foreclosure.

I am sure these are lining up as I type…

Keep your eye on Harmon Law Offices, P.C. in Newton Highlands, MA 02461 aka Mark P. Harmon who serves as a director of Law offices of David J. Stern’s “DJSP Enterprises Inc.”

Enjoy!

[ipaper docId=40005374 access_key=key-ar2tlhnlp15p7ysmrmr height=600 width=600 /]

Perhaps if the Florida Bar followed each complaint homeowners filed, this would’ve never been been so “intense”.

Fast forward a few months and here we are:

IN THE SUPERIOR COURT OF FULTON COUNTY
STATE OF GEORGIA

DUSTIN ROLLINS

v.

MORTGAGE ELECTRONIC :
REGISTRATION SYSTEMS, Inc.;
and MERSCORP, Inc

The Plaintiff shows herein that MERS’ foreclosure on Plaintiff’s property was not valid and was wrongful, as are those foreclosures by MERS on the property in the State of Georgia of all similarly situated persons to the Plaintiff wherein MERS sent the notice of foreclosure to the debtor and wherein MERS purports to have exercised the power of sale and auctioned the property. MERS does not have the authorized power to send a valid notice of foreclosure within the State of Georgia for those deeds where it is “solely a nominee” and does not have the authority or power under Georgia law to foreclose on a property or engage in an auction of sale on such property where is is “solely a nominee” on such deeds.

[ipaper docId=39968483 access_key=key-7smnwqncufavpx6wof7 height=600 width=600 /]