Archive | July, 2011

DIXON v. WELLS FARGO | MASS. Dist. Court “Promissory Estoppel, A prompt trial of this case is thus absolutely crucial”

DIXON v. WELLS FARGO | MASS. Dist. Court “Promissory Estoppel, A prompt trial of this case is thus absolutely crucial”



WELLS FARGO BANK, N.A. formerly known as WACHOVIA MORTGAGE, FSB formerly known as WORLD SAVINGS BANK, FSB, Defendant.

Civil Action No. 11-10368-WGY.

United States District Court, D. Massachusetts.

July 22, 2011.


WILLIAM G. YOUNG, District Judge.


Frank and Deana Dixon (collectively “the Dixons”) bring this cause of action against Wells Fargo Bank, N.A. (“Wells Fargo“), seeking (1) an injunction prohibiting Wells Fargo from foreclosing on their home; (2) specific performance of an oral agreement to enter into a loan modification; and (3) damages. Wells Fargo, having removed the action from state court, now moves for dismissal of the Dixons’ complaint under Fed. R. Civ. P. 12(b)(6), arguing that the allegations are insufficient to invoke the doctrine of promissory estoppel and that, to the extent the Dixons have stated a state-law claim, it is preempted by the Home Owners’ Loan Act (“HOLA”), 12 U.S.C. §§ 1461-1700, and its implementing regulations, 12 C.F.R. §§ 500-99.


Undoubtedly, the claim that Wells Fargo failed to uphold a promise to consider the Dixons for a loan modification relates to Wells Fargo’s “servicing” of the mortgage. See 12 C.F.R. § 560.2(b)(10). But the standard for express preemption is more than “relates to.” See Coffman, 2010 WL 3069905, at *6 (citing In re Ocwen Loan Servicing, 491 F.3d at 643-44). The claim must “purport[] to impose requirements” regarding loan servicing for express preemption to apply. 12 C.F.R. § 560.2(b). Here, the Dixons do not aim to impose any substantive requirement on the loan modification process used by Wells Fargo, in particular, or federal savings banks, in general. Coffman, 2010 WL 3069905, at *9. The promissory estoppel claim seeks not to attack Wells Fargo’s underlying loan servicing policies and practices, but rather to hold the lender to its word, on which the Dixons relied to their detriment. Enforcement of Wells Fargo’s promise merely requires the lender to deal fairly and honestly, which no more burdens those lending operations listed in paragraph (b) than it does everyday business transactions. Bishop, 2010 WL 4115463, at *5 (“[R]equiring a bank to perform the obligations of its contract in good faith implicates none of the concerns embodied in HOLA.”); see Morse v. Mutual Fed. Sav. & Loan Ass’n of Whitman, 536 F. Supp. 1271, 1281 (D. Mass. 1982) (Aldrich, J.) (“An award of Chapter 93A exemplary damages against defendant would no more threaten the ability of federal savings and loan associations to perform their functions in the Commonwealth than it would state-chartered savings and loan associations, or other corporations subject to the statute.”). “Only claims that are specific to a defendant’s lending activities, as distinguished from legal duties applicable to all businesses, are preempted by HOLA.” Cuevas v. Atlas Realty/Fin. Servs., Inc., No. C 07-02814 JF, 2008 WL 268981, at *3 (N.D. Cal. Jan. 30, 2008).

Turning to paragraph (c) of section 560.2, the Dixons’ promissory estoppel claim “affect[s] lending businesses, just as [it would] affect any other business that enters into contracts or makes representations during the course of its operations.” Gibson, 128 Cal. Rptr. 2d at 28. Because it has some effect on lending, a presumption of preemption arises. 61 Fed. Reg. at 50966. This presumption is rebutted here, however, because promissory estoppel, as a state common-law doctrine of general applicability, is “not designed to regulate lending and do[es] not have a disproportionate or otherwise substantial effect on lending.” Gibson, 128 Cal. Rptr. 2d at 28-29. All businesses, not just federal savings associations, are subject to the predicate duty that the Dixons seek to enforce — a duty to honor promises made. Compliance with that duty would not require Wells Fargo to alter its loan modification program, or any substantive aspect of its approach to servicing loans, but it would ensure that consumers like the Dixons reasonably could rely on their lenders’ statements without suffering harm as a result.

With the national housing market once again rattled by an overwhelming number of foreclosures, other federal courts have been grappling recently with the preemption issue in cases factually indistinguishable from the present one. Yet, no consensus has emerged with respect to HOLA’s reach. In DeLeon v. Wells Fargo Bank, N.A., No. 10-CV-01390-LHK, 2011 WL 311376 (N.D. Cal. Jan. 28, 2011), for example, the plaintiffs had complied with the steps required by Wells Fargo for a loan modification, which they had been assured would be successful, when abruptly and without warning they lost their home to foreclosure. Id. at *1-2. The court held that the plaintiffs’ intentional misrepresentation claim against Wells Fargo was not preempted by HOLA because it “d[id] not attempt to impose substantive requirements regarding loan terms, disclosures, or servicing or processing procedures.” Id. at *7. Similarly, in Becker v. Wells Fargo Bank, N.A., No. 2:10-cv-02799 LKK KJN PS, 2011 WL 1103439 (E.D. Cal. Mar. 22, 2011), where the plaintiff “allege[d] that he was promised a modification even though [the lender] never intended to modify his loan or seriously consider his application,” the court concluded that the “plaintiff’s fraud claim appears to arise from a more `general duty not to misrepresent material facts,’ and therefore it does not necessarily regulate lending activity.” Id. at *8-9.[9] In contrast, however, the court in Zarif v. Wells Fargo Bank, N.A., No. 10cv2688-WQH-WVG, 2011 WL 1085660 (S.D. Cal. Mar. 23, 2011), held that the plaintiffs’ state-law claims, including intentional misrepresentation, negligent misrepresentation, and promissory estoppel, were preempted by HOLA because they “specifically challenge the processing of Plaintiffs’ loan modification application and servicing of Plaintiffs’ mortgage.” Id. at *3.[10] There, like here, the plaintiffs faced foreclosure after following Wells Fargo’s instruction to stop making their payments while waiting for their loan modification application to be processed.


It is said that talk is cheap. The Dixons’ allegations are easy to make, yet until their veracity is put to the test, foreclosure is inappropriate. But just as the homeowner ought not suffer a wrongful foreclosure, so too the bank has an equal and proper interest in realizing on its mortgage security by putting the home on the market at a foreclosure sale, selling it to a viable buyer, and lending the funds derived to other potential home buyers. This case is but a microcosm of much larger economic issues; to a significant extent, our national economy may depend upon promptly sorting out the issues raised here. Clogging the operation of the mortgage foreclosure system with court delay simply will not work. Either individual rights will be submerged, and people will lose their homes unlawfully, or home mortgage liquidity will atrophy, the larger economy will suffer, and potential home buyers will be denied homeownership, although financially able to support mortgage payments.

A prompt trial of this case is thus absolutely crucial. Here in Massachusetts, this federal district court — one of the most productive in the country, United States v. Massachusetts, Civil Action No. 09-11623-WGY, slip op. at chart, ECF. No. 134-1 (D. Mass. May 4, 2011) (Massachusetts is one of “America’s Most Productive federal district courts”) — can provide such a trial.[11]

Accordingly, this case is ordered placed on the September running trial list,[12] and the parties shall be ready for trial on Tuesday, September 6, 2011.


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


Taxpayers fund, get smacked by Pam Bondi’s ‘revolving door’

Taxpayers fund, get smacked by Pam Bondi’s ‘revolving door’


Earlier this year, the Florida Attorney General’s Office was in the midst of a pull-no-punches investigation into foreclosure fraud.

Investigators were exposing rampant abuses. They’d netted a $2 million settlement from one company. And they were gunning for more.

But then in May, two things happened:

First, the “special counsel” to Attorney General Pam Bondi left to take a high-level job with one of the very companies the office was investigating.

One week later, the investigators were forced out of their jobs, told late on a Friday afternoon that they had 90 minutes to decide whether to resign or be fired.


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


Some Bankers Never Learn – Gretchen Morgenson

Some Bankers Never Learn – Gretchen Morgenson

NY Times

YOU’D think the mortgage bust would qualify as a teachable moment.

But some people refuse to learn from mistakes — a list that apparently includes certain mortgage bankers. Their industry is fighting a new rule that might prevent a repeat of the lending binge that helped drive our economy off a cliff.

In case you just arrived from another planet: America’s mortgage mania was fueled by home loans with poisonous features that made them virtually impossible to repay. It was fun while it lasted, at least for the financial types who profited by making dubious loans and selling them to investors.


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


Florida Supreme Court foreclosure case PINO v. BONY settled

Florida Supreme Court foreclosure case PINO v. BONY settled

Although disappointing not to see the final outcome behind the documents, this does not settle well with the FRAUD obviously involved.

“We conclude that this is a question of great public importance, as many, many mortgage foreclosures appear tainted with suspect documents,” the appeals court wrote in certification to the Supreme Court.

according to Miami Herald-

Both sides have agreed to settle a high-profile foreclosure fraud case pending before the Florida Supreme Court.

Details of the settlement were not disclosed in a brief stipulation filed Thursday with the high court.

The 4th District Court of Appeal in West Palm Beach had certified the case as a matter of “great public importance.”

The appeal court ruled Roman Pino couldn’t try to prove the Bank of New York Mellon defrauded him when it foreclosed on his Greenacres home.

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


Valley National Bank v. Do-Ray 46 | NYSC Order To Show Cause … Just all WRONG!

Valley National Bank v. Do-Ray 46 | NYSC Order To Show Cause … Just all WRONG!


in interest to The Park Avenue Bank,




Order should not be entered as follows:

1. Vacating the default judgment, dated April 8,20 10, in the herein action, pursuant to CPLR 501 5(a) and (a)(3);  Order of Sale, dated May 2 201 1, pursuant to CPLR 501 5(a), (a)(3) and (a)(5);


staying the foreclosure sale of the subject premises, scheduled for Thursday, July 28,201 1; and staying the passing of the deed of the subject premises, since, among other reasons:

(a) plaintiff commenced knowing that it had no cause of action to foreclose on the Subject Premises as there was payment default as alleged in the complaint;
(b) plaintiff misrepresented in some instances, and in other instances, failed to provide certain facts to the Court to secure a default judgment and a judgment of foreclosure and sale;
(c) plaintiff failed to meet the CPLR standard for requisite proof of its claim for a default judgment and for a judgment of foreclosure and sale;
(d) plaintiff failed to comply with the CPLR requirement to substitute in the proper party as plaintiff – that is, the Federal Deposit Insurance Corporation (the “FDIC”) – following the FDIC’s seizure of plaintiff more than 12 months ago;
(e) plaintiff secured a judgment of foreclosure and sale on the basis of an attorney affirmation that failed to substantially comply with the Justice Lippman’s affirmation requirements in foreclosure actions and this Court’s express order of December 10,2010 therefor as part of plaintiff’s application for a judgment of foreclosure and sale;
( f ) plaintiff – which following March 12,20 10 – was no longer in operation – submitted an application for a judgment of foreclosure and sale and substitution of Valley National Bank as plaintiff without the requisite proof that Valley National Bank was the owner and holder of the relevant notes.


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


Lawmaker may push to reinstate two ousted Florida foreclosure investigators

Lawmaker may push to reinstate two ousted Florida foreclosure investigators

Palm Beach Post

An Orlando lawmaker wants two former state foreclosure investigators reinstated if performance evaluations he has requested reflect high rankings for the duo.

Democratic Rep. Darren Soto sent a public records request Wednesday to Florida Attorney General Pam Bondi, asking for evaluations and documents related to the forced resignations of Theresa Edwards and June Clarkson.

The two former assistant attorneys general had been the lead investigators on the state’s foreclosure fraud cases, but were abruptly told in May to resign or they would be fired.


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


GAME CHANGER? | California Homeowner Challenges Wells Fargo, Could Set a Legal Precedent

GAME CHANGER? | California Homeowner Challenges Wells Fargo, Could Set a Legal Precedent


A Bakersfield homeowner is taking on a bank, in a battle that could have sweeping implications for people facing foreclosure.

Mark Demucha wants Wells Fargo to prove it owns his home loan. And, if his lawsuit is successful, it could set a legal precedent that slows or even stops foreclosures across the state.


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


MAZINE v. M & I BANK | FL 1DCA Reversed “Affidavit Fail, Undisputed not the holder of the mortgage and note”

MAZINE v. M & I BANK | FL 1DCA Reversed “Affidavit Fail, Undisputed not the holder of the mortgage and note”

M & I BANK, Appellee.

Case No. 1D10-2127.

District Court of Appeal of Florida, First District.

Opinion filed July 22, 2011.

David H. Charlip of Charlip Law Group, LC, Aventura, for Appellants.

Erin Berger, Florida Default Law Group, PL, Tampa, for Appellee.


Moshe Mazine and Jaacov Bouskila appeal an amended final judgment of mortgage foreclosure in favor of M & I Bank, appellee. Because the documentary evidence necessary to establish the amount owed under the note and mortgage was admitted without proper foundation and it is undisputed that M & I Bank was not the holder of the mortgage and note, we reverse and remand for further proceedings.

The party seeking foreclosure must present evidence that it owns and holds the note and mortgage to establish standing to proceed with a foreclosure action. Servedio v. U.S. Bank Nat. Ass’n, 46 So. 3d 1105 (Fla. 4th DCA 2010). 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 either the holder of the note or a nonholder in possession of the note who has the rights of a holder. See § 673.3011, Fla. Stat. (2009); Taylor v. Deutsche Bank Nat. Trust Co., 44 So. 3d 618 (Fla. 5th DCA 2010). An allegation of default in a complaint must be proven by competent evidence. See Terra Firma Holdings v. Fairwinds Credit Union, 15 So. 3d 885 (Fla. 2d DCA 2009).

In January 2009, M & I Bank filed a complaint seeking foreclosure of a mortgage naming Mazine and Bouskila as party defendants. An amended complaint later followed, but the named plaintiff remained the same. After several motions challenging the sufficiency of service of process and personal jurisdiction, Bouskila eventually filed an answer which denied almost all of allegations of the amended complaint, including the allegation that Bouskila secured a mortgage on the real property at issue and the allegation as to amount in default. Mazine did not file an answer but moved to dismiss the amended complaint on several grounds, including the ground that the entity listed on the note and mortgage was “M & I Marshall & Ilsley Bank,” not the named plaintiff, “M & I Bank.” The motion to dismiss was not considered by the trial court before the cause was heard at a bench trial.

The only witness to testify at the bench trial regarding the allegations of the amended complaint was David Taxdal, the regional security officer for “M & I Marshall and Ilsley Bank” in the State of Florida. According to Taxdal’s testimony, his “duties and responsibilities are fraud investigation, internal investigation and physical security for the branches” in Florida, and he does not originate loans, service loans or collect loans in default. Through Taxdal, the bank attempted to introduce several documents, including an affidavit as to amounts due and owing. The affidavit was executed by Michael Koontz, who did not appear at trial, and the bank sought to introduce it as a business record. Taxdal testified that he had no knowledge as to who prepared the documents submitted at trial by the bank as he is not involved in the preparation of documents such as the ones proffered by the bank, that he does not keep records as a records custodian, that he has no personal knowledge as to how the information in the affidavit as to the amounts due and owing was determined or whether it was prepared in the normal course of business, and that he did not know whether such information was accurate.

Counsel for the defendants vigorously opposed admission of the affidavit of indebtedness, the only evidence of the amount allegedly in delinquency, as a business record. Counsel observed that the affiant (Koontz) was not subject to cross-examination, and that given the matters to which Taxdal testified it was evident that Taxdal “has no knowledge of the basis upon which this affidavit was prepared.”

The trial court denied defendants’ objection and admitted the affidavit without explanation. This was error. Before a document may be admitted as a business record, a foundation for such admission must be laid. Section 90.803(6), Florida Statutes (2010), allows the admission of records of a regularly kept business activity when the business record was made at or near the time of the matters reported and when the business record is made by a person having personal knowledge of the matters reported or when the information supplied in the record is supplied by a person with knowledge. Further, it must be shown that the business record was kept in the ordinary course of a regularly conducted business activity and that it is the regular practice of the business keeping the record to make such a business record. Yisrael v. State, 993 So. 2d 952 (Fla. 2008). While it is not necessary to call the individual who prepared the document, the witness through whom a document is being offered must be able to show each of the requirements for establishing a proper foundation. Forester v. Norman Roger Jewell & Brooks, 610 So. 2d 1369, 1373 (Fla. 1st DCA 1992).

Here, none of the requirements for admission of a business record were met. As noted, Taxdal candidly admitted that he had no knowledge as to the preparation or maintenance of the documents offered by the bank, including the affidavit as to amounts due and owing. Taxdal did not testify and, indeed, could not testify, that the affidavit as to the amounts owed was actually kept in the regular course of business. Further, he did not know if the source of the information contained in the affidavit was correct. He did not know if the amounts reported in the affidavit were accurate. There was no attempt to admit the affidavit by certification or declaration pursuant to section 90.803(6)(c), Florida Statutes.

Accordingly, because no foundation was laid, the admission of the affidavit was erroneous. Because the affidavit was the only evidence as to the amount of defendants’ default, the error was harmful necessitating that the amended final judgment of foreclosure be reversed.

Furthermore, the trial court erred in denying appellants’ motion for a directed verdict given the lack of proof that the named plaintiff and appellee, M & I Bank, holds the mortgage and note. “M & I Marshall & Ilsley Bank” is shown as the holder of both the note and mortgage. At the time the bank offered the affidavit as to amounts due and owing into evidence, Taxdal testified that M & I Bank FSB — which we assume is M & I Bank — and M & I Marshall and Ilsley Bank are different entities.[1] The amended judgment of foreclosure styles the prevailing party as “M & I Bank,” not “M & I Marshall and Ilsley Bank.” To have standing to foreclose, it must be demonstrated that the plaintiff holds the note and mortgage in question. See Khan v. Bank of America, N.A., 58 So. 3d 927 (Fla. 5th DCA 2011), and Philogene v. ABN Amro Mtg. Group, Inc., 948 So. 2d 45 (Fla. 4th DCA 2006). Therefore, because M & I Bank had not demonstrated it possessed the standing to proceed in the foreclosure action, we must reverse on this issue as well.

REVERSED and REMANDED for further proceedings consistent with this opinion.



[1] Although M & I Bank filed a motion to substitute a party by which M & I Marshall and Isley Bank was to be substituted for M & I Bank, the trial court never acted upon this motion. We note that, while the name of the bank in the mortgage and note is spelled “M & I Marshall and Ilsley“, the motion to substitute spells the name somewhat differently, “M & I Marshall and Isley” (italics added).

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


Petition the Inspector General: Investigate Attorney General Bondi’s Firings

Petition the Inspector General: Investigate Attorney General Bondi’s Firings

Progress Florida


Florida Attorney General Pam Bondi seems to think her first duty is to protect some of Gov. Scott’s biggest corporate pals – the banks – instead of hard working Floridians. Recently Bondi fired Florida’s two leading attorneys investigating the epidemic of foreclosure fraud ravaging our communities.

The attorneys investigating foreclosure fraud said they were forced out. Join me and sign this petition calling for an immediate investigation: http://www.progressflorida.org/bondi

June Clarkson and Theresa Edwards were tasked by then-Attorney General Bill McCollum last year to investigate allegations of widespread fraud taking place in foreclosures occurring around the state. They did their jobs well…perhaps too well for Pam Bondi.

The investigation by Clarkson and Edwards produced a blockbuster presentation entitled “Unfair, Deceptive and Unconscionable Acts in Foreclosure Cases. ” The presentation demonstrated numerous outrageous examples of blatant fraud and deception by banks and law firms initiating foreclosures known as “foreclosure mills.” Clarkson and Edward’s work was so effective it was used in other states in prosecuting foreclosure fraud . Then in May, despite a recent glowing performance evaluation, both attorneys were suddenly told by a supervisor to immediately step down or be fired.

Sign the petition calling for an investigation of Attorney General Bondi’s actions:


Thank you for your help.

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


Internal Doc Reveals GMAC Filed False Document in Bid to Foreclose

Internal Doc Reveals GMAC Filed False Document in Bid to Foreclose

by Paul Kiel
ProPublica, July 27, 2011, 1:07 p.m.

GMAC, one of the nation’s largest mortgage servicers, faced a quandary last summer. It wanted to foreclose on a New York City homeowner but lacked the crucial paperwork needed to seize the property.

GMAC has a standard solution to such problems, which arise frequently in the post-bubble economy. Its employees secure permission to create and sign documents in the name of companies that made the original loans. But this case was trickier because the lender, a notorious subprime company named Ameriquest, had gone out of business in 2007.

And so GMAC, which was bailed out by taxpayers [1] in 2008, began looking for a way to craft a document that would pass legal muster, internal records obtained by ProPublica [2]show.

“The problem is we do not have signing authority—are there any other options?” Jeffrey Stephan, the head of GMAC’s “Document Execution” team, wrote to another employee and the law firm pursuing the foreclosure action [2]. No solutions were offered.

Three months later, GMAC had an answer. It filed a document with New York City authorities [3] that said the delinquent Ameriquest loan had been assigned to it “effective of” August 2005. The document [3] was dated July 7, 2010, three years after Ameriquest had ceased to exist and was signed by Stephan, who was identified as a “Limited Signing Officer” for Ameriquest Mortgage Company. Soon after, GMAC filed for foreclosure.

An examination by ProPublica suggests this transaction was not unique. A review of court records in New York identified hundreds of similar assignment documents filed in the name of Ameriquest after 2008 by GMAC and other mortgage servicers.

Get ProPublica’s stories delivered to your inbox [4]

The issue has attracted growing scrutiny in recent months as bloggers [5], consumer attorneys and media outlets [6] have identified what appears to be part of a pattern of questionable assignments filed across the country.

GMAC, which is still majority owned by the government, was at the center of what became known as the robo-signing scandal [7]. The uproar began last fall after revelations that mortgage servicing employees had produced flawed documents to speed foreclosures [8]. GMAC and other banks have acknowledged filing false affidavits in which bank officials claimed “personal knowledge” of the facts underlying thousands of mortgages. But GMAC and other servicers say they’ve since tightened their procedures. They insist that their records were largely accurate and the affidavits amounted to errors of form, not substance.

The issues surrounding the Ameriquest loan and others like it appear to be more serious.

“This assignment of mortgage has all of the markings of GMAC finding that it lacked a needed mortgage assignment in order to foreclose and just making it up,” said Thomas Cox, a Maine foreclosure defense attorney.

In New York, it’s a felony to file a public record with “intent to deceive.”

“It’s fraud,” said Linda Tirelli, a consumer bankruptcy attorney. “I want to know who’s going to do a perp walk for recording this.”

No criminal charges have been filed in the robo-signing cases.

Asked by ProPublica about the document, GMAC acknowledged Stephan did not have authority to sign on behalf of Ameriquest. The bank said it is still planning to push ahead with foreclosure on the homeowner, who remains in the property.

Company spokeswoman Gina Proia said an internal review last fall into “suspected documentation execution issues” had flagged the loan as problematic and that GMAC is “determining what needs to be done in order to receive the necessary authorization.”

“We will determine and complete the necessary steps to remediate and proceed with foreclosure,” Proia said.

GMAC also declined a request from ProPublica to interview Stephan.

Another GMAC document obtained by ProPublica shows that in at least one recent incident, GMAC employees were still discussing the possibility of fabricating evidence needed to facilitate a foreclosure.

The company once again lacked a document that would show it had been assigned the mortgage. Since the lender was defunct and no assignment had ever been made, GMAC again seemed to be stuck. But the employee proposed in June of this year that GMAC file a sworn statement that the assignment had once existed but had been lost. It’s unclear if such an affidavit was ultimately provided to a court.

Records also show that GMAC has continued to rely on documents signed by the very employee at the center of the robo-signing scandal—Jeffrey Stephan, the same employee who also signed the Ameriquest document in 2010. Stephan acknowledged in sworn testimony last year that he had been signing 400 documents each day [9], a revelation that helped kick off the scandal. According to a former employee and a consumer attorney, Stephan still works at GMAC, though he has been transferred to a different unit.

GMAC said it is still pursuing foreclosures based on assignments signed by Stephan. As part of a bid to rebrand itself, GMAC renamed its holding company Ally Financial last year.

“There is no reason or requirement to ‘withdraw’ valid assignments of mortgage that happened to have been signed by Mr. Stephan,” said GMAC spokeswoman Proia, because there’s “no requirement that [the assignment] be signed by a person with knowledge of any particular facts.” All that mattered, she said, was that the signer had received the proper authority.

Banks have little reason to worry about their documents being challenged, since homeowners rarely contest foreclosure actions. In a filing with the New Jersey Supreme Court, GMAC said that of the more than 4,000 foreclosures it has handled in the state only about 4 percent of homeowners had contested the action.

When homeowners do challenge banks’ documentation for foreclosures, they can have success. Late last week, the Vermont Supreme Court threw out a foreclosure case handled by GMAC due, in part, to a flawed assignment document signed by Stephan.

“It is neither irrational nor wasteful to expect the foreclosing party be actually in possession of its claimed interest,” the court said [10], “and have the proper supporting documentation in hand when filing suit.”

Since last fall, GMAC has added staff, increased training and added new procedures, said Proia. But some of those new hires have come from firms themselves accused of filing false foreclosure documents.

One manager at GMAC, Kevin Crecco, moved there from a position at the Law Offices of David Stern in Florida after the firm drew scrutiny from the state’s attorney general for allegedly filing forged documents. Stern’s office, once among Florida’s biggest foreclosure law firms and labeled a “foreclosure mill” by critics, ceased operations earlier this year.

An internal organization chart [11] from this spring for GMAC’s foreclosure department lists Crecco as a manager overseeing roughly two dozen employees. GMAC declined to make Crecco available for an interview. He hasn’t been accused of any wrongdoing.

Mortgage servicers like GMAC continue to be set up like assembly lines, with members of its “Document Execution” team responsible for signing documents. The organizational chart shows two “Document Execution” teams of 13 employees each.

The employees are tasked with, among other things, signing affidavits attesting to the accuracy of the basic facts of the loan, such as the mortgage amount, outstanding fees, etc. Affidavits are a necessary step to foreclosure in many states where banks have to go to court to seize a home.

During the robo-signing scandal, GMAC admitted that employees signing affidavits didn’t verify the underlying facts. The bank says it has fixed the problems.

But consumer attorneys said that while GMAC’s processes have improved, they haven’t corrected basic flaws with their process.

Cox, the attorney who questioned Stephan last year as part of a foreclosure case, said employees on the “Document Execution” team still aren’t truly checking the accuracy of the underlying information. Rather than digging for the original documents, employees on the team look at the numbers given by a GMAC database and double-check the math.

If the employee “just looks at a computer screen, that’s not sufficient in my view,” said Cox. He said he would soon be challenging affidavits GMAC recently filed in court.

Consumer attorneys also said the systems that servicers rely on are consistently plagued with inaccuracies, making a more thorough verification of the information necessary. “These days, homeowners are being forced to save every receipt, every letter, every statement, so that one day they can prove that their payment history is accurate and the bank is wrong,” said Jim Kowalski, a consumer attorney in Florida.

GMAC’s Proia said the company’s procedures—which amount to a review of information in the company’s computerized databases—were sufficient to file affidavits.

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


Mortgage Electronic Registration Systems, Inc. v. Reiley | Wisconsin Appeals Court Reverses “whose mortgage is in a superior position”

Mortgage Electronic Registration Systems, Inc. v. Reiley | Wisconsin Appeals Court Reverses “whose mortgage is in a superior position”




July 26, 2011

A. John Voelker

Acting Clerk of Court of Appeals


This opinion is subject to further editing. If published, the official version will appear in the bound volume of the Official Reports.

A party may file with the Supreme Court a petition to review an adverse decision by the Court of Appeals. SeeWis. Stat. § 808.10 and Rule 809.62.

Appeal No.


Cir. Ct. No. 2008CV555




Mortgage Electronic Registration Systems, Inc., as

nominee for New Century Mortgage Corporation,



Steven M. Reiley, Sabrina L. Reiley and M&M Construction,



Solutions Properties, Inc.,


APPEAL from a judgment of the circuit court for Walworth County: JOHN R. RACE, Judge. Reversed and cause remanded for further proceedings.

Before Hoover, P.J., Peterson and Brunner, JJ.

¶1 PER CURIAM.   Solutions Properties, Inc., appeals a summary judgment in favor of Mortgage Electronic Registration Systems, Inc. (“MERS”). The issue concerns whose mortgage is in a superior position. We conclude factual disputes precluded summary judgment and therefore reverse and remand.

¶2 This matter arises from the purchase of real estate in Lake Geneva by Steven and Sabrina Reiley from William Roth. The Reileys sought a mortgage from New Century Mortgage Corporation to finance the purchase. New Century approved a loan for $180,000 but required a first mortgage lien as security. The Reileys also planned to sign a mortgage with M&M Construction, LLC, for $45,000 at closing. Sheila and Michael Minon were owners of M&M, and the M&M mortgage related to home remodeling.

¶3 New Century sought a title commitment from New Millenium Title Corporation, located in Brookfield. New Millenium contracted with remote agent Gerald Wilcox to act as its agent to close the loan in Walworth County. The closing occurred on December 29, 2006. Sheila Minon recorded the M&M mortgage on January 9, 2007.[1] The deed from Roth and the mortgage to MERS, as nominee for New Century, were recorded on February 5, 2007.

¶4 Nearly a year after the sale to the Reileys, M&M assigned its mortgage to Solutions Properties. Solutions Properties’ principal operating officer, Douglas Norton, had contacted the Minons after their names came up as defendants in a foreclosure action. Norton was interested in purchasing their property before it went through foreclosure. Instead, Solutions Properties purchased M&M’s mortgage.

¶5 Prior to purchasing the M&M mortgage, Norton received a title report that showed the M&M mortgage to be in first priority. Norton also instructed his assistant to contact the Walworth County Register of Deeds to confirm that the M&M mortgage was recorded prior to other mortgages or liens on the property. Norton also testified at his deposition that the Minons told him “that there was a fire, that there was a $180,000 second mortgage that was put into the house to improve it and that satisfied any lingering question that I would have had about the 45,000 first and 180,000 second. That was a reasonable explanation to me.”

¶6 The Reileys subsequently defaulted on the loan to New Century. When a foreclosure action was about to be commenced, it was determined that the M&M mortgage was recorded prior to New Century’s mortgage. MERS then commenced this action for a declaratory judgment to determine the priority of the two mortgages. The circuit court granted summary judgment in favor of MERS, concluding that “the Defendant Solutions Properties was clearly on notice that the Plaintiff’s lien was a purchase money mortgage.” Therefore, the court reasoned that MERS’ mortgage had priority as a matter of law. Solutions Properties now appeals.

¶7 We review summary judgment independently, applying the same methodology as the circuit court. Green Spring Farms v. Kersten, 136 Wis. 2d 304, 315-17, 401 N.W.2d 816 (1987). The methodology is often recited and we need not repeat it. Summary judgment is appropriate when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Wis. Stat. § 802.08(2).[2]

¶8 Solutions Properties argues that under Wis. Stat. §§ 706.08 and 706.09, the M&M mortgage is superior in priority because it was recorded earlier than the New Century mortgage. Solutions Properties contends that it was a good faith purchaser without actual or constructive notice of any adverse claims.

9 Wisconsin Stat. § 706.08(1)(a) protects purchasers of real estate against adverse claims that are not properly recorded as provided by law. See Associates Fin. Servs. Co. v. Brown, 2002 WI App 300, ¶9, 258 Wis. 2d 915, 656 N.W.2d 56. It provides that “every conveyance that is not recorded as provided by law shall be void as against any subsequent purchaser, in good faith and for a valuable consideration, of the same real estate or any portion of the same real estate whose conveyance is recorded first.” Wis. Stat. § 706.08(1)(a). A purchaser or mortgagee in good faith is one without notice of existing rights in land. Grosskopf Oil, Inc. v. Winter, 156 Wis. 2d 575, 584, 457 N.W.2d 514 (Ct. App. 1990). Wisconsin Stat. § 706.09(1) provides that “[a] purchaser for a valuable consideration, without notice as defined in sub. (2) … shall take” priority over an adverse claim. “To be entitled to the benefits of [§ 706.09], a purchaser must not have notice of the adverse claim ….” Schapiro v. Security Sav. & Loan Ass’n, 149 Wis. 2d 176, 186, 441 N.W.2d 241 (Ct. App. 1989). Though § 706.08 does not use the word “notice,” the requirement that a bona fide purchaser lack notice of an adverse claim has long been understood to be a part of the statute. Bank of New Glarus v. Swartwood, 2006 WI App 224, ¶24, 297 Wis. 2d 458, 725 N.W.2d 944.

¶10 MERS insists Solutions Properties is not a good faith purchaser without notice because, had Norton searched the record, he would have discovered the recording of the mortgage to New Century from the Reileys, which was recorded immediately after the deed. MERS argues that a review of that mortgage shows at the top of the first page in bold letters, “Purchase Money MORTGAGE.” MERS contends that under Northern State Bank v. Toal, 69 Wis. 2d 50, 230 N.W.2d 153 (1975), a purchase money mortgage is superior to any other claim as a matter of law.

¶11 However, MERS overstates the holding of Toal. The issue in that case was whether Toal’s purchase money mortgage on real estate took precedence over a judgment a creditor held against Toal before he acquired the real estate covered by the mortgage. Id. at 51. Toal listed the prior judgment as a debt when he made the home mortgage loan application. Id. at 51-52. He later defaulted on the mortgage payments, and the judgment holder and the lender disputed which took priority, the prior judgment or the purchase money mortgage. Id. Relying upon authority stating that a purchase money mortgage has priority over earlier judgments and judgment liens against the mortgagor, our supreme court ruled in favor of the lender. Id. at 55-56. The court considered, however, only the priority of a purchase money mortgage in relation to pre-existing judgments against the mortgagee, not one mortgage’s priority over another. Accordingly, Toal is not dispositive.

¶12 Here, a factual dispute concerning whether Norton performed a reasonable inquiry precluded summary judgment. For instance, Solutions Properties asserts that it contacted Sheila Minon, an M&M principal, and obtained a letter report from her. Solutions also called the register of deeds. MERS concedes that “both Ms. Minon and the register of deeds confirmed that M&M had a first mortgage,” but claims that Solutions Properties “should have been aware that these representations were contrary to the actual record.” However, MERS does not fully elaborate on exactly why this information was contrary to the record. In fact, the record showed that the M&M mortgage recorded prior to the New Century mortgage contained no indication that there were mortgages or liens that had priority.

¶13 In addition, MERS refers to closing documents, including a HUD-1 settlement statement reflecting that the parties to the closing anticipated that a second mortgage in the amount of $45,000 in favor of M&M was to be recorded after the mortgage to New Century. MERS also refers to the Reileys’ loan application that required New Century be granted a first mortgage lien on the real estate. However, it is unclear whether these documents were available in the public record, or if the documents were even referred to in the public record.

¶14 MERS also concedes a factual dispute concerning whether Sheila Minon told representatives of Solutions Properties “that M&M had a second mortgage that had been recorded as a first.” As mentioned previously, Norton testified at his deposition that the Minons told him “that there was a fire in the house” and that “there was a $180,000 second mortgage that was put into the house to improve it ….” MERS also insists that Solutions Properties “should have called New Century to inquire as to the nature of its interest ….” However, we have stated that purchasers for value are not required to see if there is any way conceivable that an interest might possibly be discovered. See Associates Fin. Servs., 258 Wis. 2d 915, ¶14.

¶15 Accordingly, we conclude the circuit court erred by determining that Solutions Properties was on notice of an adverse claim as a matter of law. We therefore reverse the grant of summary judgment and remand for further proceedings concerning the reasonableness of Solutions Properties’ inquiry.[3]

By the Court.—Judgment reversed and cause remanded for further proceedings.

This opinion will not be published. See Wis. Stat. Rule 809.23(1)(b)5.

[1] After closing, Wilcox hand delivered the documents to New Millennium, except for the mortgage to M&M, which was retained by Wilcox. Wilcox faxed to New Millennium the M&M mortgage. Copies of the deed and M&M mortgage as executed at the closing were sent to New Century for certification.

There are discrepancies between the certified M&M mortgage that was faxed to New Millennium and the M&M mortgage that was recorded in Walworth County. The first page of the certified mortgage states that the mortgage was subject to the first mortgage to New Century. The first page of the recorded M&M mortgage states that the mortgage was subject to “NONE.” The fourth page of the recorded mortgage shows a Liberty Banc Mortgage fax number while the certified mortgage does not.

[2] References to the Wisconsin Statutes are to the 2005-06 version unless noted.

[3] MERS also argues that the circuit court’s decision rested upon equitable principles. However, we cannot discern that the court based its ruling on equitable principles and therefore decline to address the doctrine of equitable subrogation.

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Facing criticism, MERS cuts role in foreclosures

Facing criticism, MERS cuts role in foreclosures

(Reuters) –

MERS, the electronic mortgage registry that faces multiple investigations for its role in thousands of problematic foreclosure cases, changed its rules to lower its profile in court-supervised foreclosures.

MERS, a unit of Merscorp Inc. of Reston, Virginia, owns the computerized registry, Mortgage Electronic Registration Systems. Mortgage loan giants Fannie Mae and Freddie Mac and several of the largest U.S. banks established MERS in 1995 to circumvent the costly and cumbersome process of transferring ownership of mortgages and recording the changes with county clerks.

In rule changes announced to MERS members on July 21, the company forbade members to file any more foreclosure actions in MERS’s name.

It also required mortgage servicers to obtain mortgage assignments and record them with county clerks before beginning foreclosures.


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FL Rep. Darren Soto demands records on ousted Foreclosure Fraud Investigators from AG Pam Bondi

FL Rep. Darren Soto demands records on ousted Foreclosure Fraud Investigators from AG Pam Bondi

July 27, 2011

Pam Bondi, Attorney General

Office of Attorney General
State of Florida
The Capitol PL-01
Tallahassee, FL 32399-1050

Re – Public Records Request for Documents Related to Termination of Theresa Edwards and June Clarkson

Dear Madam General,

It has come to my attention that two assistant attorney generals, Theresa Edwards and June Clarkson, were recently terminated by your office for poor performance. However, public records indicate that these terminations occurred while they were in the midst of successful mortgage fraud litigation and in spite of prior successful reviews. As a member who represents an area ravaged by foreclosure fraud, these terminations present an overwhelming public concern.

REQUEST IS HEREBY MADE pursuant to Public Records Act, Chapter 119 of the Florida Statutes that your office provides me with any and all records related to job performance of Theresa Edwards and June Clarkson within the past 3 years. Please also provide a list of all case numbers for all currently active cases managed by Theresa Edwards and June Clarkson for your office as well as the amounts of any settlements occurring within the past 3 years in any cases managed by Theresa Edwards or June Clarkson along with corresponding case number.

If you have any questions or comments, please do not hesitate to contact my office. Thank you in advance for your attention to this matter.


Darren M. Soto

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FHFA v. UBS | Alleging violations in private label MBS sales to FannieMae and FreddieMac

FHFA v. UBS | Alleging violations in private label MBS sales to FannieMae and FreddieMac




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


LAURENCIO v DEUTSCHE BANK NATIONAL TRUST | FL 2nd DCA Reversed “Acceleration Letter, Bank’s failure to comply with its own documents”

LAURENCIO v DEUTSCHE BANK NATIONAL TRUST | FL 2nd DCA Reversed “Acceleration Letter, Bank’s failure to comply with its own documents”


Successor by Merger to Aames Funding
Corporation d/b/a Aames Home Loan;



COMPANY, as Indenture Trustee of the
Aames Mortgage Investment Trust 2005-1,


Opinion filed July 27, 2011.
Appeal from the Circuit Court for Lee
County; Hugh E. Starnes, Judge.


On December 9, 2008, Deutsche Bank’s attorneys sent Laurencio a letter stating that, pursuant to the terms of the Note and Mortgage, Deutsche Bank had “accelerated all sums due and owing, which means that the entire principal balance and all other sums recoverable under the terms of the promissory Note and Mortgage are now due.” The letter stated that the amount owed was $200,715.27. The letter also informed Laurencio: “This law firm is in the process of filing a Complaint on the promissory Note and Mortgage to foreclose on real estate.” Two days later, the bank filed a mortgage foreclosure complaint and attached this letter to the complaint.

Paragraph 22 of Laurencio’s mortgage set forth presuit requirements, including a requirement that Deutsche Bank give Laurencio thirty days’ notice and an opportunity to cure the default prior to filing suit:

Acceleration; Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower’s breach of any covenant or agreement in this SecurityInstrument (but not prior to acceleration under Section 18[3] unless Applicable Law provides otherwise). The notice shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument, foreclosure by judicial proceeding and sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to assert in the foreclosure proceeding the non-existence of a default or any other defense of Borrower to acceleration and foreclosure. If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may foreclose this Security Agreement by judicial proceeding. Lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in this Section 22, including, but not limited to, all attorneys’ fees and costs of title evidence.

(Underline emphasis added.) Clearly, Deutsche Bank’s letter did not comply with paragraph 22.


In this case, Deutsche Bank failed to meet its summary judgment burden because the record before the trial court reflected a genuine issue of material fact as to whether Deutsche Bank had complied with conditions precedent to filing the foreclosure action. In a case with nearly identical facts, this court recently reversed a summary judgment of foreclosure. See Konsulian v. Busey Bank, N.A., 61 So. 3d 1283 (Fla. 2d DCA 2011). In Konsulian, we concluded that the bank was not entitled to summary judgment because it had not established that it had met the conditions precedent to
filing suit. Id. at 1285. The record in that case did not establish that the bank had given the defendant the notice which the mortgage required. Id. We reach the same conclusion in this case.


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The One Hundred Billion Dollar Problem in Small Claims Court: Robo-Signing and Lack of Proof in Debt Buyer Cases

The One Hundred Billion Dollar Problem in Small Claims Court: Robo-Signing and Lack of Proof in Debt Buyer Cases

Peter A. Holland

University of Maryland School of Law

Journal of Business & Technology Law, Vol. 6, p. 101, 2011

University of Maryland Legal Studies Research Paper No. 2011-32

Abstract: Recent years have seen the rise of a new industry which has clogged the dockets of small claims courts throughout the country. It is known as the “debt buyer” industry. Members of this $100 billion per year industry exist for no reason other than to purchase consumer debt which others have already deemed uncollectable, and then try to succeed in collecting where others have failed. Debt buyers pay pennies on the dollar for this charged off debt, and then seek to collect, through hundreds of thousands of lawsuits, the full face value of the debt. The emergence and vitality of this industry presents several legal, ethical and economic issues which merit exploration, study and scholarly debate.

This article focuses on the problem of robo-signing and the lack of proof in debt buyer cases. Although this problem has received limited attention from the media and from regulators, there is a paucity of legal scholarship about debt buyers in general, and this problem in particular. This article demonstrates that robo-signing and fraud are rampant in this industry, and that the debt buyers who pursue these claims often lack proof necessary to show that they own the debt, and often lack proof even that a debt was ever owed in the first place. The fact that this lack of proof has led to consumers being sued twice on the same debt demonstrates the due process concerns which are implicated when courts enter judgments against consumers based on robo-signing and insufficient proof.

This article calls on courts to hold plaintiffs in debt buyer cases to the same standards required of other litigants. Courts must require a demonstration of personal knowledge of the matter at issue before any affidavit is accepted, before any person testifies, and before any documents are admitted into evidence.

[click image below for pdf]

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


Thornburg Mtg. Home Loans, Inc. v Beltrami | NYSC Dismisses Complaint “MERS ASSIGNMENT FAIL”

Thornburg Mtg. Home Loans, Inc. v Beltrami | NYSC Dismisses Complaint “MERS ASSIGNMENT FAIL”

Thornburg Mtg. Home Loans, Inc.


Michael Beltrami

2011 NY Slip Op 32035(U)

July 11, 2011

Supreme Court, New York County

Docket Number: 106026/09

Judge: Joan A. Madden


The mortgage refers to Thornburg as the “lender” and Mortgage Electronic Registration Systems, Inc. (“MERS”) as “a separate corporation that is acting solely as a nominee for Lender,” and states that “[for purposes of recording this mortgage, MERS is the mortgagee of record.” On October 15,2007, the mortgage was recorded, listing Beltrami and Spiering as the “mortgagor/borrower,” and MERS as the “mortgagee/lender.” On May 8,2009, MERS, as nominee for Thornburg executed an assignment of mortgage, assigning the mortgage to Thornburg. The assignment was recorded on September 22,2009, and states that it is “effective as of October 4, 2008.”


Based on the foregoing, the complaint must be dismissed on the ground that Thornburg failed to comply with RPAPL 1304. Id. In view of this conclusion, the court need not determine the additional grounds for dismissal raised by Beltrami. The court notes, however, that Thornburg complied with the RPAPL 1303 notice requirement, which is a separate condition precedent to the commencement of this action. See First -1 Bank o f Chicago v. Silva, 73 AD3d 162 (2“d Dept 2010). Also, in the event Thornburg commences a new mortgage foreclosure action, the issues raised herein as to the assignment of the mortgage by MERS, would presumably be rendered academic, since the assignment would necessarily pre-date the commencement of any subsequent action.

Accordingly, it is
ORDERED that plaintiffs motion is denied in its entirety; and it is further
ORDERED that defendant Beltrami’s cross-motion for summary judgment dismissing the complaint is granted and the complaint is dismissed in its entirety without prejudice, and the Clerk is directed to enter judgment accordingly.

DATED: July 11,2011

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Delaware Attorney General Beau Biden Investigates MERS Registry

Delaware Attorney General Beau Biden Investigates MERS Registry


Mortgage Electronic Registration Systems said it was cooperating with an investigation by Delaware Attorney General Beau Biden.

The Delaware investigation of MERS, a key player in the U.S. mortgage system, follows a Monday announcement by Massachusetts Attorney General Martha Coakley, who said her office had begun investigating MERS for its role in connection with illegal foreclosures.


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


READ LETTER | Massachusetts AG Coakley to Register of Deeds re: Meeting on MERS Fraud

READ LETTER | Massachusetts AG Coakley to Register of Deeds re: Meeting on MERS Fraud


(617) 727-2200

July 25, 2011

William P. O’Donnell
Register of Deeds
Norfolk Registry District of the Land Court
649 High Street
Dedham, MA 02026

Re: Massachusetts Register of Deeds Association Request for Meeting

Dear Register O’Donnell,

Thank you for your letter of July 8, 2011. We look forward to meeting with you and your fellow Registers on August 11th, to discuss your concerns regarding MERS, the filing of false or misleading documents with registries, and other matters.

As you are aware, we are currently investigating creditor misconduct in connection with unlawful foreclosures, including failure to establish the right to start a foreclosure as well as filing false or misleading documents with registries in the Commonwealth. We have focused particularly on creditors’ reliance on MERS and whether MERS conforms to the requirements of Massachusetts law, in the context of foreclosures and otherwise. In the next week, we plan to send civil investigative demands (CID) to Registers in order to gather critical information to our investigation, and appreciate your continuing cooperation in this process. If the Massachusetts Registers of Deeds Associations or any individual Registers have questions or concerns about the CIDs, they should contact Public Protection and Advocacy Deputy Bureau Chief Stephanie Kahn at 617-963-2986.

Many of your fellow Registers also have asked about the impact of our investigation on the ongoing federal-state negotiations with the large banks. We have made clear that Massachusetts will not sign on to any global agreement with the banks if it includes a comprehensive liability release regarding securitization and the MERS conduct. We strongly believe that these investigations must continue and responsible parties must be held accountable in order to fully protect homeowners and return to a healthy economy.

We look forward to continuing to work with you on these important matters.


Martha Coakley

cc: John F. Meade, Barnstable Register
Andrea F. Nuciforo, Jr., Berkshire Middle Register
Frances T. Brooks, Berkshire Northern Register
Wanda M. Beckwith, Berkshire Southern Register
Barry J. Amaral, Bristol Northern Register
J. Mark Treadup, Bristol Southern Register
Bernard J. McDonald, III, Bristol Fall River Register
Dianna E. Powers, Dukes Register
Robert F. Kelley, Northern Essex Register
John L. O’Brien, Jr., Southern Essex Register
Joseph A. Gochinski, Franklin Register
Donald E. Ashe, Hampden Register
Marianne L. Donohue, Hampshire Register
Richard P. Howe, Jr., Northern Middlesex Register
Eugene C. Brune, Southern Middlesex Register
Jennifer H. Ferreira, Nantucket Register
Jolm R. Bucldey, Jr., Plymouth Register
Francis Roache, Suffolk Register
Kathleen Reynolds Daigneault, Northern Worcester Register
Anthony J. Vigliotti, Southern Worcester Register


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MASS Attorney General Martha Coakley to Investigate Key Player “MERS” in Foreclosure Mess

MASS Attorney General Martha Coakley to Investigate Key Player “MERS” in Foreclosure Mess

Will NOT sign any agreement with other State AG’s and Banks to let MERS off the Hook!

In a letter dated Monday, Coakley said, “We have focused particularly on creditors’ reliance on MERS and whether MERS conforms to the requirements of Massachusetts Law, in the context of foreclosures and otherwise.”

Stay tuned for more info as it develops.

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


U.S. BANK NA v. KIMBALL | VT Supreme Court Affirms w/Prejudice “AFFIDAVIT FAIL, Jeffrey Stephan, Scott Zeitz, Accredited, Allonge, MERS, RFC, Homecomings, GMAC”

U.S. BANK NA v. KIMBALL | VT Supreme Court Affirms w/Prejudice “AFFIDAVIT FAIL, Jeffrey Stephan, Scott Zeitz, Accredited, Allonge, MERS, RFC, Homecomings, GMAC”

U.S. Bank National Association (2010-169)

2011 VT 81

[Filed 22-Jul-2011]

NOTICE:  This opinion is subject to motions for reargument under V.R.A.P. 40 as well as formal revision before publication in the Vermont Reports.  Readers are requested to notify the Reporter of Decisions, Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of any errors in order that corrections may be made before this opinion goes to press.

2011 VT 81

No. 2010-169

U.S. Bank National Association

Supreme Court

On Appeal from


Grand Isle Superior Court

Christine Kimball

January Term, 2011

Ben W. Joseph, J.

Andre D. Bouffard of Downs Rachlin Martin PLLC, Burlington, for Plaintiff-Appellant.

Grace B. Pazdan, Vermont Legal Aid, Inc., Montpelier, for Defendant-Appellee.

PRESENT:  Reiber, C.J., Dooley, Johnson, Skoglund and Burgess, JJ.

¶ 1. BURGESS, J. Plaintiff US Bank National Association, as trustee for RASC 2005 AHL1, appeals from a trial court order granting summary judgment for defendant homeowner and dismissing with prejudice US Bank’s foreclosure complaint for lack of standing.  On appeal, US Bank argues that it had standing to prosecute the foreclosure claim and the court’s dismissal with prejudice was in error.  Homeowner cross-appeals, arguing that the court erred in not addressing her claim for attorney’s fees.  We affirm the dismissal and remand for consideration of homeowner’s motion for attorney’s fees.

¶ 2. On appeal from a grant of summary judgment, “the nonmoving party receives the benefit of all reasonable doubts and inferences.”  Samplid Enters., Inc. v. First Vt. Bank, 165 Vt. 22, 25, 676 A.2d 774, 776 (1996). We review the decision de novo under the same standard as the trial court.  Id.  Summary judgment is appropriate if there is no genuine issue of material fact and a party is entitled to judgment as a matter of law.  Id.; see V.R.C.P. 56(c)(3).

¶ 3. So viewed, the record reveals the following facts.  Homeowner purchased property on June 16, 2005.  To finance the purchase, she executed an adjustable rate promissory note in favor of Accredited Home Lenders, Inc. (Accredited) in the amount of $185,520.  The note was secured by a mortgage deed to Mortgage Electronic Registration Systems, Inc. (MERS) as nominee for Accredited.

¶ 4. On January 12, 2009, US Bank filed a foreclosure complaint for homeowner’s failure to make required payments.  The complaint alleged that the mortgage and note were assigned to US Bank by MERS, as nominee for Accredited, by an instrument dated January 6, 2009.  Attached to the complaint was a copy of the instrument entitled “Assignment of Mortgage,” signed by Jeffrey Stephan, identified therein as Duly Authorized Agent and Vice President of MERS.  The promissory note was also attached to the complaint, and appended to it was an undated allonge[1] signed by a corporate officer of Accredited, endorsing the note in blank.

¶ 5. Homeowner initially filed a pro se answer.  After procuring counsel, homeowner filed an amended answer, claiming, among other things, that US Bank failed to present sufficient evidence that it held homeowner’s note and corresponding mortgage.  Homeowner also filed a counterclaim alleging consumer fraud.  In March 2005, homeowner filed a motion for summary judgment arguing that US Bank lacked standing to bring the foreclosure complaint because it failed to establish that it held an interest in the debt secured by homeowner’s property.  Homeowner argued that US Bank had not established proper assignment of the mortgage because MERS as nominee for Accredited lacked authority to assign the mortgage.  Homeowner further argued that US Bank failed to demonstrate that it held or had a right to enforce the promissory note.  In July 2009, in support of the motion for summary judgment, homeowner submitted an affidavit, averring that in mid-June 2009 she received a letter from her mortgage servicer, Homecomings Financial, notifying her that the servicing rights to her loan were being assigned not to US Bank, but to GMAC Mortgage, LLC effective July 1, 2009.  She also averred that she received a concurrent letter from GMAC, confirming that it was servicing the loan on behalf of Residential Funding Corporation (RFC).  The letters referred to in the affidavit were attached.

¶ 6. US Bank opposed the request and responded with its own cross-motion for summary judgment on the merits, claiming that whatever deficiencies were present in its original complaint were now resolved because it had produced and sent to homeowner “a copy of the fully endorsed note specifically payable to [US Bank].”  In its statement of undisputed facts, US Bank asserted that it had the original note, and that it was endorsed from Accredited to RFC and then to US Bank.  No dates, however, were provided for these endorsements.  In support, US Bank attached an affidavit attesting to these facts, but still devoid of any dates for the purported assignments.  The affidavit was signed by Jeffrey Stephan, the same man who had signed the assignment attached to original complaint, but this time identifying himself as a “Limited Signing Officer” for GMAC, the mortgage servicer for homeowner’s loan.  In the affidavit, Stephan claims that he has “familiarity with the loan documentation underlying the mortgage loan entered at issue in the present foreclosure case.”  The copy of the note attached had an allonge, appearing to be the same allonge previously submitted as endorsed in blank, but this time with “RFC” stamped in the blank spot and containing a second endorsement from RFC to US Bank.  Neither endorsement was dated.

¶ 7. The court held a hearing on the summary judgment motions.  Following the hearing, the court issued a written order on October 27, 2009.  The court concluded that to enforce a mortgage note, “a plaintiff must show that it was the holder of the note at the time the Complaint was filed,” and here there was “simply no evidence of an assignment to a party in interest.”  Because neither note submitted by US Bank was dated, the court concluded that there was no evidence that the note was endorsed to US Bank before the complaint was filed.  Therefore, the court held that US Bank lacked standing to bring the foreclosure action.  The court granted homeowner’s motion for summary judgment, dismissed the foreclosure action, and set the matter for hearing on homeowner’s counterclaim.

¶ 8. On November 23, 2009, US Bank moved for reconsideration.[2] US Bank acknowledged that it had created “confusion” by attaching to the complaint “an outdated copy of the note prior to its transfer to [US Bank], and a mortgage assignment that purports to assign the note along with the mortgage.”  It claimed, however, that because it now held the original note, it was entitled to enforce it.  Homeowner did not dispute that US Bank possessed what appeared to be the original note, but she insisted US Bank was required to authenticate the endorsements through credible affidavits and to demonstrate that it had possession when the complaint was filed.  As to this timing issue, US Bank contended that homeowner’s mortgage had been endorsed to it in September 2005.  In support, US Bank submitted an affidavit signed by Scott Zeitz, who is identified as a litigation analyst with GMAC.  In the affidavit, ZeitzZeitz avers that homeowner’s mortgage note was endorsed to RFC and then to US Bank in September 2005.  The affidavit does not explain the obvious inconsistencies with the prior affidavits offered by US Bank or with the letter homeowner received from GMAC identifying RFC as the holder of her note in June 2009.  It also does not explain how obtained this knowledge given that GMAC did not begin servicing the loan until July 1, 2009.  In the alternative, US Bank argued that, even if did not hold an interest in the note at the time the complaint was filed, it could cure the deficiency by now substituting itself as the real party in interest under Rule of Civil Procedure 17(a).  US Bank also filed a motion to amend its complaint to properly reflect the manner in which it now alleged that it acquired an interest in homeowner’s note and mortgage.

¶ 9. Homeowner opposed the motions, contending that the numerous inconsistencies in the information offered by US Bank made it unreliable.  In addition, homeowner argued that the Zeitz affidavit was not based on personal knowledge and therefore insufficient to support the motion.  Homeowner moved for reasonable attorney’s fees under Rule 56(g), claiming that US Bank acted in bad faith by filing affidavits lacking a basis in personal knowledge and contradicting undisputed evidence.[3] Homeowner explained that as a result her attorney “spent numerous hours responding to and refuting the validity of the affidavits.”

¶ 10. Following a hearing, the court denied the motions for reconsideration and to amend the complaint.  The court concluded that US Bank had submitted a defective complaint and the deficiencies therein were not mere technicalities, but essential items, without which the case could not proceed.  The court held that US Bank lacked standing when the complaint was filed, and dismissed the complaint “with prejudice.”  US Bank appeals.

¶ 11. On appeal, US Bank argues that the court erred in (1) dismissing the complaint with prejudice; (2) concluding there was no standing when there was evidence demonstrating that US Bank was the holder of the note before the complaint was filed; and (3) denying US Bank’s request to substitute itself as the real party in interest.  Homeowner cross-appeals, arguing that the court failed to address her request for attorney’s fees and requesting a remand.

¶ 12. We begin with the issue of standing.  “[O]ur review of dismissal for lack of standing is the same as that for lack of subject matter jurisdiction.  We review the lower court’s decision de novo, accepting all factual allegations in the complaint as true.”  Brod v. Agency of Natural Res., 2007 VT 87, ¶ 2, 182 Vt. 234, 936 A.2d 1286.  We have the same standing requirement as the federal courts in that our jurisdiction is limited to “actual cases or controversies.”  Parker v. Town of Milton, 169 Vt. 74, 76-77, 726 A.2d 477, 480 (1998). Therefore, to bring a case “[a] plaintiff must, at a minimum, show (1) injury in fact, (2) causation, and (3) redressability.”  Id. at 77, 726 A.2d at 480 (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)).  This means a plaintiff “must have suffered a particular injury that is attributable to the defendant,” id. at 77, 726 A.2d at 480, and a party who is not injured has no standing to bring a suit.  Bischoff v. Bletz, 2008 VT 16, ¶¶ 15-16, 183 Vt. 235, 939 A.2d 420.  And, as the U.S. Supreme Court has explained, “standing is to be determined as of the commencement of suit.”  Lujan, 504 U.S. at 570 n.5.

¶ 13. To foreclose a mortgage, a plaintiff must demonstrate that it has a right to enforce the note, and without such ownership, the plaintiff lacks standing.  Wells Fargo Bank, N.A. v. Ford, 15 A.3d 327, 329 (N.J. Super. Ct. App. Div. 2011).  While a plaintiff in a foreclosure should also have assignment of the mortgage, it is the note that is important because “[w]here a promissory note is secured by a mortgage, the mortgage is an incident to the note.”  Huntington v. McCarty, 174 Vt. 69, 70, 807 A.2d 950, 952 (2002). Because the note is a negotiable instrument, it is subject to the requirements of the UCC.  Thus, US Bank had the burden of demonstrating that it was a “ ‘[p]erson entitled to enforce’ ” the note, by showing it was “(i) the holder of the instrument, (ii) a nonholder in possession of the instrument who has the rights of a holder, or (iii) a person not in possession of the instrument who is entitled to enforce the instrument.”  9A V.S.A. § 3-301.  On appeal, US Bank asserts that it is entitled to enforce the note under the first category—as a holder of the instrument.

¶ 14. A person becomes the holder of an instrument when it is issued or later negotiated to that person.  9A V.S.A. § 3-201(a). Negotiation always requires a transfer of possession of the instrument.  Id. § 3-201 cmt. When the instrument is made payable to bearer, it can be negotiated by transfer alone.  Id. §§ 3-201(b), 3-205(a). If it is payable to order—that is, to an identified person—then negotiation is completed by transfer and endorsement of the instrument.  Id. § 3-201(b). An instrument payable to order can become a bearer instrument if endorsed in blank.  Id. § 3-205(b).See Bank of N.Y. v. Raftogianis, 13 A.3d 435, 439-40 (N.J. Super. Ct. Ch. Div. 2010) (reciting requirements for bank to demonstrate that it was holder of note at time complaint was filed). Therefore, in this case, because the note was not issued to US Bank, to be a holder, US Bank was required to show that at the time the complaint was filed it possessed the original note either made payable to bearer with a blank endorsement or made payable to order with an endorsement specifically to US Bank.

¶ 15. US Bank lacked standing because it has failed to demonstrate either requirement.  Initially, US Bank’s suit was based solely on an assignment of the mortgage by MERS.  The complaint did not allege that US Bank held the original note.  US Bank simply attached a copy of the note with an allonge endorsement in blank.  Homeowner challenged this evidence as insufficient to show that US Bank held an interest in her note.  Because homeowner supported her position with an affidavit and documentary evidence, US Bank was required to “come forward with an opposing affidavit or other evidence that raises a dispute as to the fact or facts in issue.”  Alpstetten Ass’n, Inc. v. Kelly, 137 Vt. 508, 514, 408 A.2d 644, 647 (1979). At this point, US Bank abandoned its claim of assignment of the mortgage and instead asserted that it held the original note.  It submitted the note with an allonge containing two undated specific endorsements, one to US Bank.  The supporting affidavit claimed that the note had been endorsed to US Bank, but provided no information about when and failed to explain why a note with a blank endorsement was the basis for the complaint.

¶ 16. Based on this contradictory and uncertain documentation, the trial court did not err in concluding that there was no evidence to show that US Bank was a holder of the note at the time it filed the complaint.  US Bank failed to allege or demonstrate that it held the original note endorsed in blank when it commenced the foreclosure action.  In fact, US Bank asserted that the note with the blank endorsement was an earlier copy that was mistakenly attached to the complaint.  It also alleged that the blank endorsement was stamped with RFC’s name in 2005.  Therefore, it could not possibly have held the original note with a blank endorsement when the complaint was filed.  Further, there is no evidence to show that US Bank held the original note endorsed to its name before the complaint was filed.  While US Bank eventually produced the original note with an endorsement to it, none of the evidence submitted at summary judgment by US Bank established the timing of the endorsement.  Given US Bank’s failure to show it had standing, the foreclosure complaint was properly dismissed.

¶ 17. US Bank argues that whatever shortcomings were present in its earlier filings were cured by the documents attached to its motion to reconsider, and, therefore, the court erred in denying this motion.  We disagree.  The additional affidavit submitted with the motion to reconsider did nothing to establish the timing of the endorsement to US Bank because it was not based on personal knowledge and contained conclusions rather than facts.  Affidavits must be “made on personal knowledge [and] set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein.”  V.R.C.P. 56(e). The affiant, Zeitz, declared himself to be an employee of GMAC, the servicer of homeowner’s loan.  Zeitz averred that the note was endorsed to US Bank in September 2005 but provided no explanation of how he gained personal knowledge about this endorsement that supposedly took place several years before his company began servicing homeowner’s loan.  Further, the affidavit failed to explain the obvious contradictions with other evidence.  Specifically, Zeitz did not account for the letter from his company, submitted by homeowner, that identifies RFC, the predecessor-in-interest to US Bank, as the holder of the loan in July 2009, months after the complaint was filed.  Having already failed to succeed on its summary judgment motion, reconsideration of the same issues on new evidence was up to the court’s sound discretion.  See Crosby v. Great Atl. & Pac. Tea Co., 143 Vt. 537, 539, 468 A.2d 567, 568 (1983) (per curiam) (affirming court’s denial of plaintiffs’ motion to reconsider summary judgment ruling using an abuse-of-discretion standard).  Fraught with contradictions and evidently lacking information based on personal knowledge, the affidavit was insufficient to establish that US Bank had an interest in the note prior to the time the complaint was filed.  Thus, it was no abuse of discretion for the court to deny the motion to reconsider.

¶ 18. In the alternative, US Bank argues that even if it did not hold the note at the time the complaint was filed, this should be overlooked because it has now produced the original note with a chain of endorsements ending in US Bank.[4] Thus, US Bank contends it can now be substituted as the real party in interest under Rule 17(a).  US Bank argues that this Court allows liberal substitution of parties, citing Korda v. Chicago Insurance Co., 2006 VT 81, 180 Vt. 173, 908 A.2d 1018.  In that case, the trial court dismissed an estate’s claims against a tortfeasor’s employer’s insurance company where the employer did not assign its rights to the estate until three years after the complaint was filed.  This Court reversed, holding that “where, as here, a plaintiff acquires capacity to sue after the suit is filed, and before the action is dismissed for lack of capacity, the acquisition of capacity relates back to the filing of the action for all purposes, including compliance with the statute of limitations.”  Id. ¶ 16. US Bank contends it is similarly situated and is entitled to substitution as the real party in interest now that it has obtained an interest in the note.

¶ 19. The merit of this argument might have been better received by the trial court had it been supported by the necessary documentation and proffered before summary judgment was granted for defendant.  US Bank had notice of the standing deficiency from the start of the litigation and had an opportunity to prove its case.  It was unable to do so.  Having failed to support its position, the court was not required to give US Bank another opportunity to prove its case following the grant of summary judgment, and did not abuse its discretion in denying the request at that late stage in the proceeding.  See V.R.C.P. 17(a) (directing that action not be dismissed for absence of real party in interest “until a reasonable time has been allowed”).

¶ 20. US Bank argues that for reasons of policy it should be permitted to proceed because it would be wasteful to prevent it from being able to “cure” its standing problem.  While we are sympathetic to the desire to avoid wasteful and duplicative litigation, the source of the unnecessary proceedings in this case was not an overly wooden application of the rules, but US Bank’s failure to abide by them.  It is neither irrational nor wasteful to expect a foreclosing party to actually be in possession of its claimed interest in the note, and have the proper supporting documentation in hand when filing suit.[5] Nor is it irrationally demanding to expect the foreclosing party to provide adequate, satisfying proof in response to a motion for summary judgment challenging standing to bring suit.  What should have here been a fairly straightforward, if not a summary, proceeding under the rules, was rendered inefficient by US Bank’s failure to marshal its case before compelling homeowner and the court to waste time and resources, twice, by responding to what could not be proven.  There was nothing inequitable in dismissing this matter.

¶ 21. We turn next to the question of whether the court erred in dismissing the complaint “with prejudice.”  US Bank argues this was in error and homeowner contends that the court’s determination bars US Bank from filing again to foreclose.  At a minimum, the court certainly intended to put an end to US Bank’s instant foreclosure action and dismissal was appropriate because, as another court explained, when a plaintiff is not able to establish that it possessed the note on the date the complaint was filed, the complaint should be subject to dismissal “if only to provide a clear incentive to plaintiffs to see that the issue of standing is properly addressed before any complaint is filed.”  Raftogianis, 13 A.3d at 455.

¶ 22. Nevertheless, and despite the court’s invocation of “with prejudice” in its dismissal order, US Bank cannot be precluded from pursuing foreclosure on the merits should it be prepared to prove the necessary elements.  Although postured as cross-motions for summary judgment, the motion practice addressed only whether the bank had standing for jurisdictional purposes.  The merits of foreclosure were not, and on this record could not have been, litigated.  The court’s dismissal on just jurisdictional grounds was no adjudication on the merits.  See V.R.C.P. 41(b)(3) (providing that any involuntary dismissal, “other than a dismissal for lack of jurisdiction, . . . operates as an adjudication upon the merits” (emphasis added)); see also Wells Fargo Bank, N.A. v. Byrd, 2008-Ohio-4603, ¶¶ 18-20, 897 N.E.2d 722 (Ct. App.) (reversing trial court’s dismissal with prejudice of foreclosure complaint as inappropriate where dismissal was for lack of standing).

¶ 23. Thus, this may be but an ephemeral victory for homeowner.  Absent adjudication on the underlying indebtedness, the dismissal cannot cancel her obligation arising from an authenticated note, or insulate her from foreclosure proceedings based on proven delinquency.  Cf. Indymac Bank, F.S.B. v. Yano-Horoski, 912 N.Y.S.2d 239, 240 (App. Div. 2010) (reversing trial court’s order canceling mortgage and debt).  Homeowner’s arguments supporting a dismissal with prejudice are not convincing.[6] Homeowner relies on Nolen v. State, but that unpublished three-justice decision simply affirmed the trial court’s decision to dismiss with prejudice plaintiff’s constitutional claim for lack of standing without a challenge to or any analysis of the “with prejudice” designation.  No. 08-131, 2009 WL 2411832, at *2 (Vt. May 29, 2009) (unpub. mem.), available at http://www.vermontjudiciary.org/d-upeo/upeo.aspx.New Eng. Educ. Training Serv., Inc. v. Silver St. P’ship, 156 Vt. 604, 613, 595 A.2d 1341, 1345-46 (1991) (affirming dismissal of foreclosure action where recovery on the underlying note would be unconscionable).  While the trial court may have had discretion to exert its equitable powers in this manner, no findings were made to support such a conclusion, and we will not speculate on a matter of such importance. Further, the court’s order does not support plaintiff’s assertion that the court was warranted in dismissing with prejudice on equitable grounds given what homeowner characterizes as inconsistent and “likely fraudulent filings” submitted by US Bank.  See

¶ 24. Finally, we address homeowner’s cross-appeal.  In response to US Bank’s motion to reconsider, homeowner filed a motion for attorney’s fees asserting that US Bank had filed affidavits in bad faith.  We agree that the request for attorney’s fees under Rule 56(g) was timely and properly raised in the trial court, and that the court erred in failing to consider the motion.  Therefore, we remand for consideration of homeowner’s request.

The foreclosure complaint is dismissed and the case is remanded for consideration of defendant’s motion for attorney’s fees.


Associate Justice

[1] An allonge is “[a] slip of paper sometimes attached to a negotiable instrument for the purpose of receiving further indorsements when the original paper is filled with indorsements.”  Black’s Law Dictionary 83 (8th ed. 2004).  The Uniform Commercial Code (UCC) accepts the use of such endorsements, explaining that “a paper affixed to the instrument is a part of the instrument.”  9A V.S.A. § 3-204(a). Although at one time an allonge could be used only when there was no room on the original document, the official comment to the UCC explains that now an allonge “is valid even though there is sufficient space on the instrument for an indorsement.”  Id. § 3-204 cmt.

[2] Because final judgment had not yet been entered, the motion was filed pursuant to Rule of Civil Procedure 56.  See Kelly v. Town of Barnard, 155 Vt. 296, 307, 583 A.2d 614, 620 (1990) (holding that trial court retains jurisdiction to modify or rescind order prior to entry of final decree and may grant summary judgment motion after denying prior similar motion).

[3] In pertinent part, Rule of Civil Procedure 56(g) states:

Should it appear to the satisfaction of the court at any time that any of the affidavits presented pursuant to this rule are presented in bad faith . . . , the court shall forthwith order the party employing them to pay to the other party the amount of the reasonable expenses which the filing of the affidavits caused the other party to incur, including reasonable attorney’s fees, and any offending party or attorney may be adjudged in contempt.

[4] This argument in and of itself underscores the extent of confusion created by US Bank’s evidence.  While, on the one hand, US Bank wishes us to accept that it has uncontroverted evidence that it has held homeowner’s note since September 2005, on the other hand, it argues that it has acquired an interest in the note recently and can now be substituted as the real party in interest.  It appears that even US Bank is unsure of when the note was endorsed to it.

[5] We note that the foreclosure rule as amended now specifically requires a plaintiff to attach to the complaint “the original note and mortgage deed and proof of ownership thereof, including copies of all original endorsements and assignments of the note and mortgage deed.”  V.R.C.P. 80.1(b)(1) (Cum. Supp. 2010); see 2009, No. 132 (Adj. Sess.) § 1.

[6] We note that two cases cited by homeowner to support dismissal of a foreclosure complaint with prejudice have since been reversed.  U.S. Bank N.A. v. Emmanuel, No.  19271/09, 2010 WL 1856016  (N.Y. Sup. Ct. May 11, 2010), reversed by 921 N.Y.S.2d 320 (App. Div. 2011); IndyMac Bank F.S.B. v. Yano-Horoski, 890 N.Y.S.2d 313 (Sup. Ct. 2009), reversed by 912 N.Y.S.2d 239 (App. Div. 2010).

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The Meaning of MERS by Abigail C. Field

The Meaning of MERS by Abigail C. Field

It’s high time to legislate MERS out of existence.

Reality Check

People have learned a lot about MERS, but in general we haven’t really focused on what it all means. In short, it means that the mortgage industry decided that it was above the law.

MERS was set up thoughtlessly, without regard to its basic legality, and designed with only two objectives: lowering the mortgage industry’s costs and maximizing its convenience. As a result, MERS has none of the advantages of the centuries-old system it was intend to replace, and largely has. MERS is not accurate, not transparent, and not accountable to the public. To let MERS continue simply allows it to continue wreaking havoc on property records and the legal morass it’s created to continue tangling foreclosure and bankruptcy cases nationwide.

The Ultimate Answer: Legislate MERS Out of Existence



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