If you’ve ever bought or sold a home…you need to hear this. Hank found a signature buried deep in your mortgage documents could be a ticking time bomb for thousands of Massachusetts homeowners. For those in foreclosure: it could be a lifesaver. It’s a shocking, amazing, unbelievable story. Hank Investigates.

http://www1.whdh.com/features/articles/hank/BO145706/

REUTERS–

The Federal Reserve Bank of New York is investigating whether Goldman Sachs’ (GS.N) mortgage servicing arm did not conduct proper reviews before denying borrowers the option to lower their payments under a government loan modification programme.

In its quarterly filing with the SEC earlier this month, Goldman said regulators had sought information on the foreclosure and servicing protocols and activities of its mortgage servicing unit Litton Loan Servicing.

“We are in possession of the letter and are conducting an inquiry,” a NY Fed spokesperson told Reuters, referring to a letter from a Litton employee sent to the NY Fed by the Financial Times. A spokesperson for Goldman Sachs declined to comment when contacted by Reuters.

Chicago — Attorney General Lisa Madigan today expanded her investigation into “robosigning” practices, issuing subpoenas against two national mortgage servicing support providers. The subpoenas are the latest effort in Madigan’s ongoing probe into the fraudulent practices used by banks and other mortgage institutions that contributed to the collapse of the U.S. housing market and the subsequent global financial crisis.

Madigan issued subpoenas against Lender Processing Services Inc. and Nationwide Title Clearing Inc., two Florida-based corporations that provide “document preparation services” and other loan management services to mortgage lenders for use against borrowers who are in default, foreclosure or bankruptcy.

“Foreclosure became a rubber-stamping operation that robbed many homeowners of the American Dream without a fair and accurate process,” Attorney General Madigan said. “I will not relent in my investigation into the fraudulent practices by lenders and others that caused and exacerbated the mortgage crisis and the resulting massive foreclosure crisis.”

Lender Processing Services (LPS) provides loan servicing support for more than 50 percent of all U.S. mortgages. More than 80 financial institutions use LPS to service more than 30 million loans. These loans have an outstanding principal balance exceeding $4.5 trillion.

Nationwide Title Clearing (NTC) provides a range of mortgage loan services to eight of the top 10 lenders and mortgage servicers in the country. NTC specializes in creating, processing and recording mortgage assignments, which are often needed for a lender to foreclose on a borrower.

Madigan will investigate reported allegations that LPS and NTC engaged in the practice of “robosigning” legal documents filed with the court to foreclose on borrowers. Robosigning occurs when an individual has no knowledge of the information contained in the document and often doesn’t even read or understand the document that he or she is signing. The use of robosigned documents was pervasive as lenders foreclosed on borrowers’ homes. The probe will also include a complete review of the accuracy of the systems and services that LPS and NTC provide to the large lenders including servicing platforms, foreclosure attorney interaction with these platforms and the assignment of mortgage process.

Attorney General Madigan said former employees of LPS, NTC, or former employees of any residential mortgage servicer or bank who have knowledge of any unlawful practices relating to mortgage servicing or the execution of documents should call her Homeowner Helpline at 1-866-544-7151 to aid in the investigation.

-30-

[Source: http://illinoisattorneygeneral.gov]

LOS ANGELES – Attorney General Kamala D. Harris today announced she has subpoenaed Lender Processing Services, Inc. (LPS), as part of her continuing probe into “robosigning” of mortgage documents and other illegal activities in the mortgage servicing industry, especially misconduct affecting borrowers facing, or in the midst of, foreclosure.

Robosigning is the practice of signing documents used by banks or mortgage servicing companies to foreclose on borrowers without verifying their accuracy – often thousands of different documents signed by a single individual per day. In many cases, the robosigners don’t even read or understand the document they are signing.

“California homeowners have been exposed to fraud and crime at every step of the mortgage process,” said Attorney General Harris. “Justice demands we come to their aid and a key step in that is to investigate robosigning and the potential for inaccurate or unjust foreclosures.”

Former LPS employees have testified that LPS designees “robosigned” foreclosure documents. LPS prepared and recorded these foreclosure documents on behalf of many of the largest mortgage lenders and servicers in the country.

The Attorney General’s investigative subpoena requires LPS to produce documents and provide written answers to questions from the Attorney General’s office. The time period covered by the subpoena runs from Jan. 1, 2007, until just before the compliance date, which is no later than June 24 of this year.

LPS, based in Jacksonville, Fla., with several offices in California, provides loan management services to mortgage lenders, including document preparation services and a software platform used by much of the mortgage industry. According to its website, LPS systems are used for servicing over 50% of all mortgages in the United States and more than 80 financial institutions contract with LPS to service more than 30 million loans with an outstanding principal balance exceeding $4.5 trillion.

Attorney General Harris warned that the risks posed by robosigning are particularly dangerous in non-judicial foreclosure states such as California, where the courts typically are not involved in overseeing the foreclosure process.

On Monday, Attorney General Harris announced the creation of a Mortgage Fraud Strike Force, staffed by two dozen Department of Justice attorneys and investigators to monitor and prosecute violations at every step of the mortgage process, from the origination of mortgage loans to the marketing of mortgage-backed securities to the investing public.

“All real estate foreclosures conducted by ReconTrust in the state of Utah are not in compliance with Utah’s statutes, and are hence illegal”

[ipaper docId=56254613 access_key=key-1y6gmyihelxc0a0sczvm height=600 width=600 /]

Baltimore Sun-

Baltimore Rep. Elijah E. Cummings on Wednesday requested that the House Oversight Committee issue subpoenas to six banks he said have refused to voluntarily provide documents detailing their role in the mortgage foreclosure meltdown.

Cummings, the top-ranking Democrat on the committee who has made the foreclosure issue a top priority, said the documents are needed to help the committee determine how the foreclosure crisis unfolded. He said it is his first request for subpoenas since starting in the position in January.

The board also gave the reminder that the Bristol County Advisory Board meeting is coming up. It will take place on June 23 at 6 p.m. at the Taunton Superior Courthouse.

The Taunton Gazette-

The Bristol County Board of Commissioners sent a letter to Attorney General Martha Coakley on Tuesday concerning the “deceptive practices” of a mortgage process streamlining corporation, which it says cost county registries millions of dollars in the last decade.

The commissioners say Mortgage Electronic Registration System, commonly known as MERS, skirt public recording laws about recording mortgage assignments with the Registry of Deeds. The board says MERS is able to do this by keeping a secretive recording system for its participants that is not accessible to others.

NOTE: We’ll take the $17 Billion over the AG’s “settlement”!

If settlement happens, they SHOULD prohibit any of them from coming at you with a deficiency!

WSJ-

State attorneys general told the nation’s five largest banks on Tuesday they face a potential liability of at least $17 billion in civil lawsuits if a settlement isn’t reached to address improper foreclosure practices, according to people familiar with the matter.

The figure doesn’t cover additional billions of dollars in potential claims from federal agencies such as the Department of Housing and Urban Development and the Justice Department. State and federal officials haven’t proposed a specific comprehensive settlement figure, but Tuesday’s …

HuffPO-

This is an adaptation from “Reckless Endangerment”, an exploration of the origins of the recent financial crisis, by Gretchen Morgenson and Joshua Rosner. The book will be published today by Times Books. This excerpt examines the cozy relationship between Alan Greenspan’s Federal Reserve and the banks the Fed was charged with regulating. This is the second of three excerpts.

To regulators at the Federal Reserve Board, the financial crisis of 1998 and the collapse of the giant hedge fund Long-Term Capital Management had been an undeniably terrifying event. Officials at the prestigious New York Fed knew how extraordinary it had been for them to help the hedge fund; they were sensitive to the fact that they had aided in a speculator’s rescue and worked hard to downplay their role.

Chicago Sun-Times-

It isn’t clear what is worse: the housing crisis that keeps deepening or the reports of pervasive banking fraud that keep getting exposed. With the banks facing billions in potential damages, perhaps some measure of justice can be done to the homeowners who have been the victims of the crisis and the crimes.

We’re still not at the bottom of the housing mess. Home prices continue to fall. Now nearly 30 percent of homes with mortgages are under water. Another 2 million in foreclosures are due to come. Banks are sitting on hundreds of thousands of foreclosed homes, a dead weight on any recovery in home prices.

[image: Bilerico]

HuffPO-

When banks were caught improperly signing off on foreclosure documents last fall, consumer advocates and property rights experts hoped the public outcry would force the companies to change their foreclosure processing systems to ensure that meaningful document reviews were conducted and wrongful foreclosures were prevented.

But in at least one county in North Carolina, banks have responded by exploiting a filing loophole that has allowed them to continue signing off on key documents en masse, according to a local official.

Come back and check these two links below…

MERS Signing Agreements /Corporate Resolutions Signed Using Stamps

~

ARE MERS’ SIGNATURES ON DOCUMENTS REAL or SCANNED DUPLICATES?

Uploaded by MainStreetInsider on May 24, 2011

On Tuesday, May 24th 2011, during a hearing in a House Oversight and Government Reform subcommittee, Chairman Patrick McHenry (NC-10) ended the hearing by calling Elizabeth Warren a liar. It was a messy and confusing ending for all watching. Warren had stated that the Chairman’s staff and her, after a late-night, last-minute schedule change, had agreed to let her leave by 2:15 to meet other obligations. You can see the look of shock on her face when he outright calls her a liar.

This video, recorded live, comes from the Oversight and Government Reform Committee’s live feed.

Testimony of Elizabeth Warren Special Advisor to the Secretary of the Treasury for the Consumer Financial Protection Bureau
Before the Subcommittee on TARP, Financial Services, and Bailouts of Public and Private Programs
Committee on Oversight and Government Reform
United States House of Representatives
Tuesday, May 24, 2011

[ipaper docId=56166612 access_key=key-235muim1ij7lkuv11omb height=600 width=600 /]

ON APPEAL FROM THE UNITED
STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MICHIGAN

MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC., as
nominee for InterBay Funding, LLC,
Plaintiff-Appellant,

v.

TAMMY CHURCH; CHARLES O.
DAVIS,
Defendants,

EXCERPTS:

SUTTON, Circuit Judge. It sometimes pays to check a map. The mortgage lender in this case did not, and as a result it recorded an interest in Tammy Church’s property in the wrong county. Luckily for the public fisc, the IRS, which also placed a lien on Church’s property, did not make the same mistake. When the lender realized what had happened, it sued, seeking in equity what it could not get in law—a declaration that it had the superior claim to the property. Equity does not save the lender in this instance, and we therefore affirm.

[…]

Everyone makes mistakes, to be sure. But it is difficult to find a basis in Michigan law for overlooking this one. MERS is not just a sophisticated party; its sophistication relates to this precise area of business and law—lending money and securing the loans with an interest in the borrowers’ property. See Deutsche Bank Trust Co. Ams. v. Spot Realty, Inc., 714 N.W.2d 409, 414 (Mich. Ct. App. 2005) (“[T]he doctrine of equitable subrogation was never intended for the protection of  sophisticated financial institutions that can cho[o]se the terms of their credit agreements.”). Nor was
it a state secret that Church’s property was in Antrim County. MERS attached to its own pleadings a settlement statement completed the day the mortgage was executed (reflecting the MERS loan and Church’s payment of her debts) and a sheriff’s deed foreclosing Church’s property, both dated before MERS recorded its interest in the wrong county and both identifying Church’s property as part of Antrim County. “A court’s equitable power is not an unrestricted license for the court” to do what it wishes with the fact patterns that come before it. Devillers v. Auto Club Ins. Ass’n, 702 N.W.2d 539, 556 (Mich. 2005). There must be a legitimate explanation for invoking that power. There is
none here.

Continue below…

[ipaper docId=56122416 access_key=key-p57624wd4uzg1j12273 height=600 width=600 /]

MAINE SUPREME JUDICIAL COURT

HSBC MORTGAGE SERVICES, INC.

v.

DANA S. MURPHY et al.

EXCERPT:

[¶12] In this case, the affidavits submitted by HSBC contain serious irregularities that make them inherently untrustworthy. The first Vadney affidavit, submitted by HSBC in conjunction with its second motion for summary judgment identifies Vadney as “a Vice President of HSBC Mortgage Services, Inc.,” and was dated and notarized on August 24, 2009. It asserts, among other things, that HSBC is the holder of the note and mortgage deed by virtue of an assignment dated December 11, 2006, and a confirmatory assignment of the note and mortgage dated August 24, 2009. Copies of both assignments are attached to the affidavit. The affidavit states that the confirmatory assignment was recorded in the Androscoggin County Registry of Deeds in Book 7775, Page 346. The copy of the confirmatory
assignment attached to the Vadney affidavit indicates that it was also dated and notarized on August 24, 2009, and then recorded at the Registry of Deeds on August 27, 2009, three days after the date Vadney signed the affidavit swearing that it had been recorded as of August 24, 2009.

[¶13] In addition, the confirmatory assignment from MERS, as nominee for Calusa Investments, LLC, to HSBC was also signed by Vadney. It indicates that Vadney signed the confirmatory assignment on behalf of MERS in her capacity as
its vice president. The summary judgment record is otherwise silent as to whether on August 24, 2009, Maria Vadney was simultaneously an officer of both MERS, the assignor, and HSBC, the assignee, as the affidavit and the confirmatory
assignment suggest.

[¶14] HSBC filed a second affidavit on October 1, 2009, signed by Maria Vadney on September 28, 2009, in support of its statement of supplemental facts filed in response to the Murphy’s opposing statement of material facts. The
affidavit contains a notary’s jurat dated September 24, 2009, four days before Vadney signed the affidavit.

[¶15] The Murphys, noting the discrepancies in the two Vadney affidavits and further observing that in both, the signature and jurat appear on a page separate from the body of the affidavit, urge us to infer that the texts of the affidavits submitted by HSBC were attached to the signature and jurat pages after those pages were executed. The Murphys further contend that if this inference is correct, “the potential for fraud is great with all these affidavits and near certain with the August 24th Vadney affidavit.”8

Continue below…

[ipaper docId=56122394 access_key=key-1nrsxamlqg03f3mz4c47 height=600 width=600 /]

IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT

VASILIY GONCHARUK and MARINA GONCHARUK

v.

HSBC MORTGAGE SERVICES, INC.,

EXCERPT:

Vasiliy and Marina Goncharuk appeal a final judgment of foreclosure entered after the trial court granted a motion for summary judgment in favor of HSBC Mortgage Services, Inc. We reverse. The procedural posture of this case and the
disputed issue of fact that requires reversal of the summary judgment appear to be virtually identical to those in Sandoro v. HSBC Bank, USA National Ass’n, 55 So. 3d 730 (Fla. 2d DCA 2011).

[ipaper docId=56122273 access_key=key-u2j5nl1nttbua1jwe5n height=600 width=600 /]

Bloomberg-

JPMorgan Chase & Co., UBS AG and Deutsche Bank AG are being probed in an expanded investigation by New York Attorney General Eric Schneiderman into mortgage securitization, according to a person familiar with the matter.

Four bond insurers also were subpoenaed: Ambac Financial Group Inc., MBIA Inc., Syncora Holdings Ltd. and Assured Guaranty Ltd., according to the person, who couldn’t be identified because the probe isn’t public.

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

Mortgage lenders like Bank of America and Wells Fargo are fighting the fight on all fronts, with the latest being False Claims Act violations. Here’s what to look for in any settlements.

FORTUNE — The trouble for America’s largest mortgage lenders just keeps mounting. How much will it cost them to make it all go away?

This is when those placeholders “A Bad Bene, Bogus Assignee” might come in handy… Maybe AG Harris will put a stop to this madness.

MSNBC–

Not according to Deutsche or other banks. They say they aren’t really the owners, despite the fact that their name appears on the property title. They also say they are not responsible for maintenance.

Representatives of Deutsche, as well as U.S. Bank, BNY Mellon and HSBC — three other major lenders that Los Angeles is investigating with an eye to suing, all said that loan servicers are responsible for property upkeep, as well as tasks such as sending default notices, modifying loans, selling homes, and collecting rent and mortgage payments.

“We’re there in name only,” said Teri Charest, spokeswoman for U.S. Bank. “We’re trustees. We have a very limited role.”

LOS ANGELES – Attorney General Kamala D. Harris today announced the creation of the California Attorney General’s Mortgage Fraud Strike Force, staffed by Department of Justice attorneys and investigators charged with protecting innocent homeowners and bringing to justice those who defraud them.

The Mortgage Fraud Strike Force will operate out of Department of Justice offices in Los Angeles, Fresno, San Francisco and Sacramento. Twenty-five attorneys and investigators will work together in three teams:
– The consumer enforcement team will target scams in the consumer arena, including predatory lending, unfair business practices in originating loans, deceptive marketing, and loan modification and foreclosure consultant scams.
– The criminal enforcement team will prosecute criminal frauds associated with the epidemic of mortgage scams, including fraudulent investment and money laundering schemes related to mortgage lending or foreclosure relief.
– The corporate fraud team will target misconduct involving investments and securities tied to subprime mortgages, as well as false or fraudulent claims made to the state with respect to these securities.

Los Angeles Mayor Antonio R. Villaraigosa offered his support of the new strike force. “With nearly 10,000 foreclosures in the City of Los Angeles last year,” he said, “this strike force is certain to help countless residents and families from becoming victimized.”

“The Attorney General’s authority and attention to this issue brings a critical law enforcement component to the table that will help stop the practice of predatory lending once and for all,” said Mayor Villaraigosa. “I applaud Attorney General Harris for her dedication to employing swift justice to the scam artists who prey on the residents of some of our most economically vulnerable neighborhoods.”

“The fingerprints of illegal activity are all over the foreclosure crisis,” said Paul Leonard, director of the California Office, Center for Responsible Lending. “The Attorney General’s effort marries the need to punish bad actors for the practices that brought our economy to the brink with the need to eliminate the scam artists who have since attempted to profit from it. Given the economic damage wreaked by foreclosures in California, this initiative is very welcome news.”

[Source: http://oag.ca.gov]

KINGMAN HOLDINGS, LLC

v.

CITIMORTGAGE, INC. and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.

CASE NO. 4:10-CV-619

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS, SHERMAN DIVISION

2011 U.S. Dist. LEXIS 52770

April 21, 2011, Decided

April 21, 2011, Filed

COUNSEL: [*1] For Kingman Holdings LLC, Plaintiff: Kenneth Stuart Harter, LEAD ATTORNEY,Law Office of Kenneth S. Harter, Carrollton, TX.

For CitiMortgage, Inc., Defendant: Joshua James Bennett, LEAD ATTORNEY, Christopher Charles Townsend, Akerman Senterfitt, LLP-Dallas, Dallas, TX.

For Mortgage Electronic Registration Systems, Inc., Reston, Va, Defendant: Joshua James Bennett, Akerman Senterfitt, LLP-Dallas, Dallas, TX.

JUDGES: AMOS L. MAZZANT, UNITED STATES MAGISTRATE JUDGE.

OPINION BY: AMOS L. MAZZANT

OPINION

REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

Pending before the Court is CitiMortgage, Inc. and Mortgage Electronic Registration Systems, Inc.’s Motion to Dismiss for Failure to State a Claim (Dkt. #10). The Court, having considered the relevant pleadings, finds that Defendants’ Motion to Dismiss should be granted in part and denied in part.

Plaintiff filed his Original Petition in the 380th Judicial District Court of Collin County on October 29, 2010, against CitiMortgage, Inc. (“CitiMortgage”), seeking to extinguish CitiMortgage’s security interest through a quiet title claim. On November 10, 2010, CitiMortgage removed this case to this Court (Dkt. #1). On January 7, 2011, Plaintiff filed its Amended Complaint  [*2] (Dkt. #6). Mortgage Electronic Registration Systems, Inc. (“MERS”) was added as a Defendant.

On or about April 7, 2008, Robert A. Ross, II and Lisa M. Ross (the “Rosses”) purchased the property located at 1410 Cedar Lake, Prosper, Texas (the “Property”) and executed a Note and Deed of Trust. The Note and Deed of Trust was in the name of Bankers Financial Mortgage Group. The Deed of Trust named MERS as a beneficiary, as nominee for Bankers Financial Mortgage Group. On September 7, 2010, Plaintiff purchased the Property through “a junior lien foreclosure sale.” On December 23, 2009, MERS recorded an Assignment of Deed of Trust to CitiMortgage. Nate Blackstun (“Blackstun”) executed the assignment on MERS’ behalf.

Plaintiff alleges that the assignment by MERS to CitiMortgage is void for the following reasons: (1) Blackstun was not appointed as vice president by MERS’ board of directors; and (2) MERS was without authority to transfer the Note. Plaintiff claims that the Deed of Trust is a cloud on its title and sues to quiet title in the Property and claims the assignment violates Chapiter 12 of the Texas Civil Practices and Remedies Code. Alternatively, Plaintiff sues to enforce its equity  [*3] in redemption.

On February 25, 2011, Defendants filed their motion to dismiss (Dkt. #10). On March 14, 2011, Plaintiff filed a response (Dkt. #12). Defendants filed a reply on March 24, 2011 (Dkt. #15).

Defendants move for dismissal under Rule 12(b)(6) of the Federal Rules of Civil Procedure, which authorizes certain defenses to be presented via pretrial motions. A Rule 12(b)(6) motion to dismiss argues that, irrespective of jurisdiction, the complaint fails to assert facts that give rise to legal liability of the defendant. The Federal Rules of Civil Procedure require that each claim in a complaint include “a short and plain statement . . . showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). The claims must include enough factual allegations “to raise a right to relief above the speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Thus, “[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 570).

Rule 12(b)(6) provides that a party may move for dismissal  [*4] of an action for failure to state a claim upon which relief can be granted. FED. R. CIV. P. 12(b)(6). The Court must accept as true all well-pleaded facts contained in the plaintiff’s complaint and view them in the light most favourable to the plaintiff. Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996). In deciding a Rule 12(b)(6) motion, “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007); Gonzalez v. Kay, 577 F.3d 600, 603 (5th Cir. 2009). “The Supreme Court recently expounded upon the Twombly standard, explaining that ‘[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Gonzalez, 577 F.3d at 603 (quoting Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. “It follows, that ‘where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint  [*5] has alleged – but it has not ‘shown’ – ‘that the pleader is entitled to relief.'” Id.

In Iqbal, the Supreme Court established a two-step approach for assessing the sufficiency of a complaint in the context of a Rule 12(b)(6) motion. First, the Court identifies conclusory allegations and proceeds to disregard them, for they are “not entitled to the assumption of truth.” Iqbal, 129 S.Ct. at 1951. Second, the Court “consider[s] the factual allegations in [the complaint] to determine if they plausibly suggest an entitlement to relief.” Id. “This standard ‘simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of’ the necessary claims or elements.” Morgan v. Hubert, 335 F. App’x 466, 469 (5th Cir. 2009). This evaluation will “be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Iqbal, 129 S.Ct. at 1950.

In determining whether to grant a motion to dismiss, a district court may generally not “go outside the complaint.” Scanlan v. Tex. A & M Univ., 343 F.3d 533, 536 (5th Cir. 2003). When ruling on a motion to dismiss a pro se complaint, however, a district court is “required to look beyond  [*6] the [plaintiff’s] formal complaint and to consider as amendments to the complaint those materials subsequently filed.” Howard v. King, 707 F.2d 215, 220 (5th Cir. 1983); Clark v. Huntleigh Corp., 119 F. App’x 666, 667 (5th Cir. 2005) (finding that because of plaintiff’s pro se status, “precedent compels us to examine all of his complaint, including the attachments”); Fed. R. Civ. P. 8(e) (“Pleadings must be construed so as to do justice.”). Furthermore, a district court may consider documents attached to a motion to dismiss if they are referred to in the plaintiff’s complaint and are central to the plaintiff’s claim. Scanlan, 343 F.3d at 536.

Defendants move to dismiss all claims, asserting that Plaintiff has failed to plead facts that would support a request to quiet title. First, Plaintiff asserts a claim to quiet title. Plaintiff argues that the original payee of the Note no longer owns and holds the Note and therefore may not enforce the Deed of Trust. Plaintiff also alleges that Blackstun has no authority to execute the assignment to CitiMortgage.

Defendants move to dismiss this claim because Plaintiff cannot plead sufficient facts to prevail on a trespass-to-try-title case. Specifically,  [*7] Defendants assert that Plaintiff fails to adequately explain why the Deed of Trust is void merely because the assignment is allegedly void. Defendants also assert that Plaintiff cannot sue to quiet title relying on nothing more than a purported weakness in its opponents’ claim.

“To prevail in a trespass-to-try-title action, Plaintiff must usually (1) prove a regular chain of conveyances from the sovereign, (2) establish superior title out of a common source, (3) prove title by limitations, or (4) prove title by prior possession coupled with proof that possession was not abandoned.” Martin v. Amerman, 133 S.W.3d 262, 265 (Tex. 2004)(citation omitted). “The pleading rules are detailed and formal, and require a plaintiff to prevail on the superiority of his title, not on the weakness of a defendant’s title.” Id. (citation omitted).

Defendants assert that the only way Plaintiff can extinguish their interest in the Property is to plead and prove a trespass-to-try-title action based upon Plaintiff’s superior title to the Property. The Court agrees. Plaintiff does not assert a superior title, and it alleges no facts that would support this claim. Plaintiff merely asserts legal conclusions,  [*8] and until Plaintiff pleads a proper claim to a superior title, Plaintiff’s claim is not plausible.

Although the factual situation does raise interesting questions under Texas law regarding the splitting of the Deed of Trust from the Note, this issue has not been properly presented to this Court. Even if CitiMortgage is not the holder of the Note, Plaintiff purchased the Property at an inferior loan foreclosure and took the Property subject to superior liens. “Foreclosure does not terminate interests in the foreclosed real estate that are senior to the mortgage being foreclosed. In fact, the general rule is that the successful bidder at a junior lien foreclosure takes title subject to the prior liens.” Conversion Properties, L.L.C. v. Kessler, 994 S.W.2d 810, 813 (Tex. App.-Dallas 1999, pet. denied)(citations omitted). Because Plaintiff has failed to allege that it owns superior title to the Property, its claim to quiet title should be dismissed. Furthermore, Plaintiff’s complaint is regarding the assignment, and no facts are pleaded that the Deed of Trust is invalid.

Defendants move to dismiss Plaintiff’s second claim for equity of redemption because Plaintiff has not tendered the redemption  [*9] amount. Defendants assert that although Plaintiff asserts it is “ready, willing and able to cure any default under the note,” this allegation is insufficient to satisfy the requirements of Plaintiff’s equitable claim. Defendants assert that Plaintiff cannot obtain equity without first tendering the redemption amount, which would be the full amount of CitiMortgage’s lien and its foreclosure costs, not merely the amount in default.

Texas courts have made clear that “a necessary prerequisite to the … recovery of title … is tender of whatever amount is owed on the note.” Fillion v. David Silvers Company, 709 S.W.2d 240, 246 (Tex. App.-Houston [14th Dist.] 1986, writ ref’d n.r.e.); see also Lambert v. First National Bank of Bowie, 993 S.W.2d 833, 835-36 (Tex. App.-Fort Worth 1999, pet. denied); Grella v. Berry, 647 S.W.2d 15, 18 (Tex. App.-Houston [1st Dist.] 1982, no writ). “[I]t is a principle of equity that to obtain equitable relief the applicant must have done equity.” Grella, 647 S.W.2d at 18. Plaintiff’s failure to “do equity”-that is, its failure to tender the amount due on the loan-prevents this Court from granting Plaintiff equitable relief. See Lambert, 993 S.W.2d at 835-36.

Plaintiff  [*10] asserts that CitiMortgage has never advised Plaintiff the sum of money required to be tendered in order to cure any default under the underlying Note. Plaintiff’s argument is misplaced. In Texas, “[t]ender of whatever sum is owed on the mortgage debt is a condition precedent” to recovery of title. See Fillion, 709 S.W.2d at 246 (citing Willoughby v. Jones, 151 Tex. 435, 251 S.W.2d 508 (Tex. 1952)). Plaintiff has not tendered the amount CitiMortgage claims is owed on the loan, nor has it attempted to tender any other amount. Plaintiff’s failure to affirmatively demonstrate its ability to tender any amount bars the Court from granting Plaintiff equitable relief.

Defendants next move to dismiss Plaintiff’s claim under Chapter 12 of the Civil Practices and Remedies Code because Plaintiff failed to satisfy Federal Rule of Civil Procedure 9(b).

Section 12.002(a) of the Texas Civil Practices and Remedies Code establishes the requirements for a fraudulent lien cause of action as follows:

A person may not make, present, or use a document or other record with: (1) knowledge that the document or other record is a fraudulent court record or a fraudulent lien or claim against real or personal property  [*11] or an interest in real or personal property;

(2) intent that the document or other record be given the same legal effect as a court record or document of a court created by or established under the constitution or laws of this state or the United States or another entity listed in Section 37.01, Penal Code, evidencing a valid lien or claim against real or personal property or an interest in real or personal property; and

(3) intent to cause another person to suffer:

(A) physical injury;

(B) financial injury; or

(C) mental anguish or emotional distress.

Tex. Civ. Prac. & Rem. Code ß 12.002(a).

Someone who violates the fraudulent lien statute may become liable to an injured person to the greater of $10,000 or the actual damages caused by such violation in addition to incurring liability for court costs, reasonable attorney’s fees, and even exemplary damages as determined by the court. Tex, Civ. Prac. & Rem. Code ß 12.002(b).

Section 12.002 requires a showing that Defendants made, presented, or used a document with: (1) knowledge that the document was a fraudulent lien or claim against real or personal property or an interest in real or personal property; (2) intent that the document or other  [*12] record be given legal effect; and (3) intent to cause another person to suffer: (A) physical injury; (B) financial injury; or (C) mental anguish or emotional distress. Tex. Civ. Prac. & Rem. Code ß 12.002(a); see Aland v. Martin, 271 S.W.3d 424, 430 (Tex. App.-Dallas 2008, no pet.). Plaintiff has the burden to prove all three elements of its claim. See Preston Gate, LP v. Bukaty, 248 S.W.3d 892, 896-97 (Tex. App.-Dallas 2008, no pet.). In the context of Section 12.002(a)(3), Texas courts have interpreted the “intent” element to require only that the person filing the fraudulent lien be aware of the harmful effect that filing such a lien could have on a landowner. Taylor Elec. Services, Inc. v. Armstrong Elec. Supply Co., 167 S.W.3d 522, 531-32 (Tex. App.-Ft. Worth 2005, no pet.).

Defendants assert that Plaintiff’s section 12.002 claim lacks plausibility because it rests on legal conclusions instead of facts and that Plaintiff has failed to allege facts to show that MERS made, presented or used the assignment with knowledge that it was a fraudulent court record or a fraudulent lien or claim against the Property, that MERS intended the assignment be given the same legal effect as a court  [*13] record evidencing a valid lien against the Property, and that MERS intended to cause another person to suffer financial injury.

Defendants argue that Plaintiff alleges that MERS’ corporate secretary appointed Blackstun as a MERS assistant secretary, and the appointment was not valid because Blackstun’s appointment was not also approved by MERS’ board of directors, as allegedly required by MERS’ by-laws. Defendants argue that this is negligence at best, and not fraud. Defendants also assert that the party that would be the defrauded party would be MERS, not Plaintiff, and that Plaintiff’s interest in the Property is wholly unaffected by the assignment.

Plaintiff argues that the Assignment filed in the property records is a fraudulent lien claim. Plaintiff alleges that the assignment is void because it was executed by a person neither employed nor authorized by MERS to execute a conveyance. Plaintiff alleges that MERS intended that the document be given the same effect as a lawfully executed instrument, and the execution and filing of the documents were done for the purpose of harming Plaintiff. Plaintiff alleges that there was a scheme on the part of a MERS officer to bypass the Board  [*14] of Directors and cloak others with authority only allowed by the Board of Directors. Plaintiff argues that this is not an inadvertent failure to comply with a duty, but rather an intentional act, done knowingly with the specific intent that the consequences of his action be brought to fruition.

In this case it is alleged that MERS did not properly appoint Blackstun as an officer of MERS and that Blackstun did not have authority to bind MERS, and when Blackstun executed the assignment, it caused MERS to file a fraudulent document in the deed records. The Court finds that Plaintiff has stated a plausible claim, in part, because Defendants fail to address the issue of the legal effect of Blackstun not being authorized to execute the assignment. If he had no such authority, MERS would know that fact. It appears to be more than mere negligence by MERS. Discovery should be allowed, and after discovery is completed, the issue of whether there is a valid claim under ß12.002 can be determined by a motion for summary judgment.

RECOMMENDATION

Based on the foregoing, the Court recommends that CitiMortgage, Inc. and Mortgage Electronic Registration Systems, Inc.’s Motion to Dismiss for Failure to  [*15] State a Claim (Dkt. #10) should be GRANTED in part and Plaintiffs quiet title and equity of redemption claims should be DISMISSED with prejudice. Plaintiffs claim for violation of the Civil Practices and Remedies Code ß 12.002 should remain at this time.

Within fourteen (14) days after service of the magistrate judge’s report, any party may serve and file written objections to the findings and recommendations of the magistrate judge. 28 U.S.C. ß 636(b)(1)(C).

Failure to file written objections to the proposed findings and recommendations contained in this report within fourteen days after service shall bar an aggrieved party from de novo review by the district court of the proposed findings and recommendations and from appellate review of factual findings accepted or adopted by the district court except on grounds of plain error or manifest injustice. Thomas v. Arn, 474 U.S. 140, 148 (1985); Rodriguez v. Bowen, 857 F.2d 275, 276-77 (5th Cir. 1988).

SIGNED this 21st day of April, 2011.

/s/ Amos L. Mazzant

AMOS L. MAZZANT

UNITED STATES MAGISTRATE JUDGE

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Wall Street Journal-

State attorneys general are stepping up their investigations of mortgage-industry practices by probing for potential misdeeds when banks originated home loans and packaged them into securities, according to people familiar with the examinations.

New York State Attorney General Eric Schneiderman has issued subpoenas to four bond-insurance companies as part of his expanding probe of mortgage-securitization practices, people familiar with the matter said.

At the same time, California Attorney General Kamala D. Harris is expected to announce Monday a new law-enforcement effort aimed at mortgage-industry practices, people familiar with the initiative said. The effort will cover a range of activities, from loan origination to the packaging of mortgages into securities, and will include both civil and criminal prosecutions, these people said.