PHOENIX LIGHT SF LIMITED vs MORGAN STANLEY | NYSC - Contrary to defendants' representations that they would legally and properly transfer the promissory notes and security instruments to the trusts, defendants in fact systematically failed to do so

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PHOENIX LIGHT SF LIMITED vs MORGAN STANLEY | NYSC – Contrary to defendants’ representations that they would legally and properly transfer the promissory notes and security instruments to the trusts, defendants in fact systematically failed to do so

PHOENIX LIGHT SF LIMITED vs MORGAN STANLEY | NYSC – Contrary to defendants’ representations that they would legally and properly transfer the promissory notes and security instruments to the trusts, defendants in fact systematically failed to do so

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
X

PHOENIX LIGHT SF LIMITED, BLUE
HERON FUNDING V LTD., BLUE HERON
FUNDING VI LTD., BLUE HERON
FUNDING VII LTD., SILVER ELMS CDO
PLC, SILVER ELMS CDO II LIMITED and
KLEROS PREFERRED FUNDING V PLC,
Plaintiffs,

vs.

MORGAN STANLEY, MORGAN STANLEY
& CO. LLC, MORGAN STANLEY
MORTGAGE CAPITAL HOLDINGS LLC,
MORGAN STANLEY ABS CAPITAL I,
INC., MORGAN STANLEY CAPITAL I
INC., SAXON CAPITAL, INC., SAXON
FUNDING MANAGEMENT LLC and
SAXON ASSET SECURITIES COMPANY,
Defendants.

EXCERPTS:

440. Contrary to their affirmative representations in the Offering Documents, defendants
knew that the loan originators had, in fact, implemented loan underwriting policies and practices that
were simply designed to extend mortgages to as many borrowers as possible, regardless of whether
those borrowers could actually repay them. These policies and practices included, among other
things:

  •  Falsifying borrowers’ incomes and/or coaching borrowers to misstate their income
    on loan applications to qualify them for loans they could not afford to repay, while
    making it appear the loans complied with the stated underwriting guidelines;
  •  Coaching borrowers to omit or understate debts and expenses on loan applications to
    qualify them for loans they could not afford to repay, while making it appear the
    loans complied with the stated underwriting guidelines;
  •  Steering borrowers to loans that exceeded their borrowing capacity;
  •  Approving borrowers based on “teaser rates” for loans, despite knowing that the
    borrowers would not be able to afford the fully indexed rate when the loan rates
    adjusted; and
  •  Approving non-qualifying borrowers for loans under “exceptions” to the originators’
    underwriting standards based on purported “compensating factors,” when no such
    compensating factors ever existed.

441. Further, the loan originators and their agents had become so aggressive at improperly
approving and funding mortgage loans that many of the loans at issue herein were made to
borrowers who had either not submitted required documents or had falsely altered the required
documentation. In many instances, required income/employment verifications were improperly
performed because the lenders’ clerical staff either did not have adequate verification skills or did
not care to exercise such skills, and oftentimes verifications were provided by inappropriate contacts
at a borrower’s place of employment (e.g., a friend of the borrower would complete the verification
instead of the human resources department at the borrower’s employer). In this way, many suspect
and false income verifications and loan applications were accepted by the originators at issue herein.

442. In addition, borrowers who submitted “stated income” loan applications were
routinely approved on the basis of stated income levels that were inflated to extreme levels relative
to their stated job titles, in order to give the appearance of compliance with stated underwriting
guidelines. In many cases, the loan originators herein actually coached the borrowers to falsely
inflate their stated incomes in order to qualify under the originators’ underwriting guidelines.
Inflation of stated income was so rampant that a study cited by Mortgage Asset Research Institute
later found that almost all stated income loans exaggerated the borrower’s actual income by 5% or
more, and more than half overstated income by at least 50%.

445. The constant pressure appraisers routinely faced from originators such as those at
issue herein was described by Jim Amorin, President of the Appraisal Institute, who stated in his
April 23, 2009 FCIC testimony that “[i]n many cases, appraisers are ordered or severely pressured
to doctor their reports and to convey a particular, higher value for a property, or else never see
work from those parties again. . . . [T]oo often state licensed and certified appraisers are forced
into making a ‘Hobson’s Choice.’” This complete lack of independence by appraisers was also
noted by Alan Hummel, Chair of the Appraisal Institute, in his testimony before the U.S. Senate,
where Hummel noted that the dynamic between lenders and appraisers created a “terrible conflict of
interest” by which appraisers “experience[d] systemic problems with coercion” and were “ordered
to doctor their reports” or else they would never “see work from those parties again” and were
placed on “‘exclusionary appraiser lists.’”
Testimony on “Legislative Proposals on Reforming

Mortgage Practices” presented by Alan E. Hummel before the House Committee on Financial
Services, at 5 (Oct. 24, 2007).

446. As a result of such pressures, appraisers routinely provided the originators at issue
herein with falsely inflated appraisals that had no reasonable basis in fact, in direct contravention of
the Offering Documents’ false and misleading representations that the certificates’ underlying loans
had been originated pursuant to underwriting guidelines that required the lenders to evaluate the
adequacy of the mortgaged properties to serve as collateral for the loans. Moreover, the falsely
inflated property values also resulted in artificially understated LTV ratios, which caused the loans
and certificates to appear to plaintiffs to be of much higher credit quality and to be much less risky
than they actually were.

447. Following below are detailed allegations demonstrating that the loan originators for
the offerings at issue herein did not comply with the loan underwriting guidelines stated in the
Offering Documents, thereby rendering the Offering Documents false and misleading. While the
allegations concerning these originators cover most of the offerings, plaintiffs have not provided
such allegations for every originator at issue herein, in an attempt to streamline the allegations.
Nonetheless, on information and belief, plaintiffs allege that all of the loan originators at issue herein
engaged in similar conduct, and that such allegations are factually supported by both the
investigations of the FCIC and the U.S. Senate, each of which concluded, after extensive
investigations, that the breakdown in residential loan underwriting standards alleged herein was
systemic in the lending industry during the relevant time period (2004-2007). See The Financial
Crisis Inquiry Report (“FCIC Report”) at 125 (“Lending standards collapsed, and there was a
significant failure of accountability and responsibility throughout each level of the lending
system.”
); Levin-Coburn Report at 12 (One of four major causes of worldwide financial collapse was

that “[l]enders introduced new levels of risk into the U.S. financial system by selling . . . home
loans with . . . poor underwriting.”); id. at 50 (“The Subcommittee investigation indicates that”
there were “a host of financial institutions that knowingly originated, sold, and securitized billions
of dollars in high risk, poor quality home loans.”
).

451. The systemic abandonment of stated underwriting guidelines by all of the originators
identified herein during the period 2004-2007, which included the originators’ complete failure to
evaluate borrowers’ repayment ability, is further corroborated by the following allegations, which
demonstrate that the abandonment of loan underwriting guidelines was rampant, pervasive and
commonplace in the residential lending industry during 2004-2007.

2. The Offering Documents Misrepresented the New Century
Originators’ Underwriting Guidelines

452. New Century Mortgage Corporation, Home 123 Corporation, and NC Capital
Corporation are three affiliated companies that originated loans for the offerings at issue herein. All
three companies were subsidiaries of New Century Financial Corporation. New Century Mortgage
Corporation and Home123 Corporation originated and/or acquired loans directly and sold them to
the sponsors for the offerings at issue herein. For the offerings at issue herein identifying NC
Capital Corporation as an originator, NC Capital Corporation acquired the loans from New Century
Mortgage Corporation and then transferred the loans to the sponsors for such offerings. Because
New Century Mortgage Corporation, Home 123 Corporation, and NC Capital Corporation all
operated under the dominion and control of New Century Financial Corporation, and because the
loans they contributed to the trusts at issue herein were all products of the same dubious loan
origination practices, these three originators are collectively referred to herein as “New Century.”

453. As detailed supra, defendants’ Offering Documents purported to describe the
underwriting guidelines that were supposedly used by New Century in originating loans underlying
plaintiffs’ certificates. See §V. For the reasons set forth immediately below, these representations
were false and misleading at the time defendants made them. In truth, New Century had completely
abandoned its stated underwriting guidelines and was routinely originating loans without any regard
for the borrowers’ true repayment ability or the actual adequacy of the mortgaged properties to serve
as collateral.

454. The U.S. Senate investigation found that New Century “w[as] known for issuing poor
quality subprime loans,” but “[d]espite [its] reputation[] for poor quality loans, leading investment
banks [such as the Morgan Stanley Defendants] continued to do business with [New Century] and
helped [it and other lenders] sell or securitize hundreds of billions of dollars in home mortgages.”
Levin-Coburn Report at 21.

455. In 2007, New Century went into bankruptcy. An examiner was appointed by the
bankruptcy court to investigate New Century and its collapse. After reviewing “a large volume of
documents” from numerous sources, including New Century, and interviewing over 100 fact
witnesses, the bankruptcy examiner filed a detailed report concerning New Century. See Final
Report of Michael J. Missal, In re: New Century TRS Holdings, Inc., No. 07-10416 (D. Del. Feb. 29,
2008) (“Examiner’s Report”) at 14, 16. The examiner confirmed that New Century routinely failed
to follow its stated underwriting guidelines when originating loans during the relevant time period.
The examiner, after his comprehensive fact-gathering process, “conclude[d] that New Century
engaged in a number of significant improper and imprudent practices related to its loan
originations.” Id. at 2. Among other things, the examiner found that:

  •  “New Century had a brazen obsession with increasing loan originations, without
    due regard to the risks associated with that business strategy . . . and trained
    mortgage brokers to originate New Century loans in the aptly named ‘CloseMore
    University.’” Id. at 3.
  •  “The increasingly risky nature of New Century’s loan originations created a
    ticking time bomb that detonated in 2007.” Id.
  •  “New Century . . . layered the risks of loan products upon the risks of loose
    underwriting standards in its loan originations to high risk borrowers.” Id.
  •  A New Century employee had informed the company’s senior management in 2005
    that, under New Century’s underwriting guidelines, “‘we are unable to actually
    determine the borrowers’ ability to afford a loan.’” Id.
  •  “New Century also made frequent [unmerited] exceptions to its underwriting
    guidelines for borrowers who might not otherwise qualify for a particular loan,” so
    much so that a senior officer of New Century warned internally that the “‘number
    one issue is exceptions to guidelines.’” Id. at 3-4.
  •  New Century’s Chief Credit Officer had noted as early as 2004 that New Century
    had “‘no standard for loan quality.’” Id. at 4 “‘[L]oan quality’” referred to “New
    Century’s loan origination processes, which were supposed to ensure that New
    Century loans met its own internal underwriting guidelines . . . .” Id. at 109.
  •  “Instead of focusing on whether borrowers could meet their obligations under the
    terms of the mortgages, a number of members of [New Century’s] Board of
    Directors and Senior Management told the Examiner that their predominant
    standard for loan quality was whether the loans New Century originated could be
    sold or securitized . . . .” Id. at 4.
  •  A large number of New Century’s loans did not meet its underwriting guidelines,
    suffering from defects such as “defective appraisals, incorrect credit reports and
    missing documentation.” Id. at 109.
  •  From 2003 forward, New Century’s Quality Assurance and Internal Audit
    departments identified “significant flaws in New Century’s loan origination
    processes.” Id. at 110.
  •  Notwithstanding all the foregoing facts, New Century’s Board of Directors and
    Senior Management did little to nothing to remedy the company’s abandonment of
    its stated underwriting guidelines. Id.

535. These massive downgrades – in many cases, from “safest of the safe” “AAA” ratings
to “junk” (anything below Baa3 or BBB-) – show that, due to defendants’ knowing use of bogus
loan data, the initial ratings for the certificates, as stated in the Offering Documents, were false.
Indeed, the fact that all of the certificates are now rated at “junk” status or below, and more than
64% of the certificates are now in default, is compelling evidence that the initial high ratings touted
by defendants in the Offering Documents were grossly overstated and false.

E. Defendants Materially Misrepresented that Title to the Underlying
Loans Was Properly and Timely Transferred

536. An essential aspect of the mortgage securitization process is that the issuing trust for
each RMBS offering must obtain good title to the mortgage loans comprising the pool for that
offering. This is necessary in order for plaintiffs and the other certificate holders to be legally
entitled to enforce the mortgage and foreclose in case of default. Accordingly, at least two
documents relating to each mortgage loan must be validly transferred to the trust as part of the
securitization process – a promissory note and a security instrument (either a mortgage or a deed of
trust).

537. The rules for these transfers are governed by the law of the state where the property is
located, by the terms of the pooling and servicing agreement (“PSA”) for each securitization, and by
the law governing the issuing trust (with respect to matters of trust law). Generally, state laws and
the PSAs require that the trustee have physical possession of the original, manually signed note in
order for the loan to be enforceable by the trustee against the borrower in case of default.

538. In addition, in order to preserve the bankruptcy-remote status of the issuing trusts in
RMBS transactions, the notes and security instruments are generally not transferred directly from the
mortgage loan originators to the trusts. Rather, the notes and security instruments are generally
initially transferred from the originators to the sponsors of the RMBS offerings. After this initial
transfer to the sponsor, the sponsor in turn transfers the notes and security instruments to the
depositor. The depositor then transfers the notes and security instruments to the issuing trust for the
particular securitization. This is done to protect investors from claims that might be asserted against
a bankrupt originator. Each of these transfers must be valid under applicable state law in order for
the trust to have good title to the mortgage loans.

539. Moreover, the PSAs generally require the transfer of the mortgage loans to the trusts
to be completed within a strict time limit – three months – after formation of the trusts in order to
ensure that the trusts qualify as tax-free real estate mortgage investment conduits (“REMICs”). In
order for the trust to maintain its tax free status, the loans must have been transferred to the trust no
later than three months after the “startup day,” i.e., the day interests in the trust are issued. See
Internal Revenue Code §860D(a)(4). That is, the loans must generally have been transferred to the
trusts within at least three months of the “closing” dates of the offerings. In this action, all of closing
dates occurred in 2005, 2006 or 2007, as the offerings were sold to the public. If loans are
transferred into the trust after the three-month period has elapsed, investors are injured, as the trusts
lose their tax-free REMIC status and investors like plaintiffs may face several adverse draconian tax
consequences, including: (1) the trust’s income becoming subject to corporate “double taxation”; (2)
the income from the late-transferred mortgages being subject to a 100% tax; and (3) if latetransferred
mortgages are received through contribution, the value of the mortgages being subject to
a 100% tax. See Internal Revenue Code §§860D, 860F(a), 860G(d).

540. In addition, applicable state trust law generally requires strict compliance with the
trust documents, including the PSAs, so that failure to strictly comply with the timeliness,
endorsement, physical delivery, and other requirements of the PSAs with respect to the transfers of
the notes and security instruments means the transfers would be void and the trust would not have
good title to the mortgage loans.

541. To this end, all of the Offering Documents relied upon by plaintiffs stated that the
loans would be timely transferred to the trusts. For example, in the MSAC 2006-HE2 Offering
Documents, the Morgan Stanley Defendants represented that “[p]ursuant to the pooling and
servicing agreement, the depositor will sell, without recourse, to the trust, all right, title and interest
in and to each mortgage loan, including all principal outstanding as of, and interest due on or after,
the close of business on the cut-off date.” See MSAC 2006-HE2 Pros. Supp. at S-55. The Offering
Documents for each of the offerings at issue herein contained either the same or very similar
language, uniformly representing that defendants would ensure that the proper transfer of title to the
mortgage loans to the trusts occurred in a timely fashion.

542. However, defendants’ statements were materially false and misleading when made.
Contrary to defendants’ representations that they would legally and properly transfer the promissory
notes and security instruments to the trusts, defendants in fact systematically failed to do so. This
failure was driven by defendants’ desire to complete securitizations as fast as possible and maximize
the fees they would earn on the deals they closed. Because ensuring the proper transfer of the
promissory notes and mortgages hindered and slowed defendants’ securitizations, defendants
deliberately chose to disregard their promises to do so to plaintiffs.

543. Defendants’ failure to ensure proper transfer of the notes and the mortgages to the
trusts at closing has already resulted in damages to investors in securitizations underwritten by
defendants. Trusts are unable to foreclose on loans because they cannot prove they own the
mortgages, due to the fact that defendants never properly transferred title to the mortgages at the
closing of the offerings. Moreover, investors are only now becoming aware that, while they thought
they were purchasing “mortgaged-backed” securities, in fact they were purchasing non-mortgagedbacked
securities.

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4 Responses to “PHOENIX LIGHT SF LIMITED vs MORGAN STANLEY | NYSC – Contrary to defendants’ representations that they would legally and properly transfer the promissory notes and security instruments to the trusts, defendants in fact systematically failed to do so”

  1. project_wolverine says:

    Without the homeowners mortgage their evil plan would of never worked so what recorse does the homeowner have! They used us as collateral in this AAA rated scam and destroyed our economy. Every PSA should investigated back to it’s origination starting from the homeowner to the investor. The homeowners and the investors should somehow be introduced to each other! you show me (the homeowner) how they duped you (the investor) and we (united we stand) will show you the fraud they committed against us to get there and together we could put a stop to this nonsence.

  2. Attorney for the Washington Title Association testimony admitting due to the circumstances in todays mortgages most likely the securitization issues, there are no authentic titles therefore non of the senators will ever be able to sell their houses ever, if they do not pass SB 1435 to reconvey without authentic title. He does not tell the senate Schedule B in the title policies exempts the title companies from any non recorded liens.

    1 Below is a transcribed portion of a TVW video segment.

    2 Participants identified in this video segment are: Stu

    3 Halsan, Denny Eliason, Senator Benton, Holly Chisa, and

    4 Mr. Chairman of the committee.

    5 TRANSCRIPT OF TVW ONLINE VIDEO SEGMENT

    6 STU HALSAN: Thank you, Mr. Chair.

    7 Stu Halsan here now representing the Washington Land

    8 Title Association. And Ijust wanted to bring up a few

    9 things in response to what we just heard.

    10 This is not about foreclosures of deeds of trust. The

    11 talk about mediation and foreclosure counseling and all of

    12 that type of thing is totally irrelevant to this.

    13 This is not about anybody losing their home, this is

    14 about somebody wanting to sell their home. They want to

    15 get the documentation so that they can sell it. And this

    16 bill merely sets up a default system of notices and

    17 filings that can be used when the beneficiary lender and

    18 trustee don’t do what they’re supposed to do.

    19 You know, a lot of the stuff that you just heard –and

    20 I’m — Denny may not like this, but we’re dealing in the
    J
    21 title industry with the environment in which we’re in.

    22 One of your last witnesses talked about securitization.

    23 Yeah, that — that probably is the problem that really is

    24 concerned with them; because Wall Street secured ties to a

    25 lot of these mortgages, packaged them up, they’re owned

    Vicki M. Sproat, CCR — 206-999-2020

    2

    1 somewhere off here, and the collections are run by a

    2 servicing agent here.

    3 You know we’ve never required and this law doesn’t

    4 require an original note to be done in order to do that.

    5 We’re, we’re — the current statute doesn’t require that.

    6 We’re releasing collateral, we’re not releasing the note

    7 in regards to this.

    8 You’re not gonna to be able to change what Wall Street

    9 did with those securitizations of all these things. So

    10 we’re dealing with the situation on the ground how we’re

    11 trying to sell your houses. And if you start requiring

    12 the original note that has been gone through Idon’t know

    13 how many hands — but the collection is being done by a

    14 servicing company that we know — if you require that

    15 original note, none of you will ever be able to sell your

    16 property. You just won’t. And that’s my weak

    17 understanding of this thing. But this bill has nothing to

    18 do with the problems that really seem to have these

    19 previous witnesses worked up. We’re just trying to get

    20 these transactions through. \

    21 And Iwould remind the committee members, we’re title

    22 insurance companies doing closings. We do this closing

    23 and you sell your property, we’re ensuring the person

    24 buying it from anything that might be a problem there.

    25 And this bill only releases the lien. If there are any

    Vicki M. Sproat, CCR — 206-999-2020

    3

    1 lawsuits or whatever that might come of transactions that

    2 they talk about or fraud, those can still be used. It’s

    3 just the property gets to be able to be transferred. All

    4 those other — all those other potential suits out there

    5 still exist, if in fact they’re there.

    6 So that’s my, you know, weak, perhaps, explanation in

    7 response what we’ve just heard . And I’ll defer to Denny

    8 and Holly .

    9 DENNY ELIASON: Good afternoon Mr. Chairman, honorable

    10 members of the committee. For the record my name is Denny

    11 Eliason. I’m here on behalf of the Washington Bankers

    12 Association. We are a trade association that represents

    13 95% plus of all the banks that do business in the state of

    14 Washington from the smallest of community banks to the

    15 largest of national banks. Thank you for the opportunity

    16 to testify regarding this legislation.

    17 Iwant to agree with Stu from the outset that a number

    18 of the objections you have heard to this bill relate to

    19 the foreclosure process. And Iwould remind the committee

    20 that over the last almost three years now there have been

    21 two major pieces of foreclosure legislation that have

    22 covered many of those issues. Both of those legislation

    23 were the product of over a hundred hours of negotiation

    24 with interested parties from all sides, including very

    25 reputable consumer groups who sat at every negotiation of

    Vicki M. Sproat, CCR — 206-999-2020

    4

    1 those two bills.

    2 Irespect very much that there are still objections to

    3 the process, but the process itself as it exists in the

    4 state of Washington has been fully vetted. And Iwould

    5 submit fully addressed by nation-leading legislation as it

    6 relates to foreclosure.

    7 As it relates to this bill, last year the title

    8 companies came to us with this legislation and the

    9 assertion that in the tens of thousands of home sales that

    10 are closed every year there are occasions where financial

    11 institutions were not reconveying as they perceived we

    12 should be. We thoroughly reviewed the issue at the time.

    13 We did not object to the bill last year. When they

    14 brought it forth over the interim we reviewed the

    15 legislation again and did not object in any way to the

    16 legislation that’s before you. It’s aimed at fixing a

    17 scenario where a bank is not properly reconveying once

    18 they have received payment.

    19 Again, we reviewed the legislation, we provided input

    20 last year, we reviewed the legislation and agreed to it

    21 again this year, and that’s why it’s before you and

    22 candidly that’s why it had 95 signatures coming out of the

    23 House.

    24 This legislation has been thoughtfully and fully vetted

    25 by reputable consumer groups, by the title companies, and

    Vicki M. Sproat, CCR — 206-999-2020

    5

    1 by financial institutions. The bill as it sits before you

    2 is, we believe, a thoughtful protection for borrowers who

    3 have paid off their — rightfully paid off their loan and

    4 now want them reconveyed. And that’s why we came to the

    5 table and agreed to it. It does establish additional

    6 burdens on banks; but, again, in those rare circumstances

    7 where reconveyance was not happening we were more than

    8 willing to agree, if you will, to the legislation before

    9 you.

    10 With that I’d be happy to answer any questions.

    11 MR. CHAIRMAN: Senator Benton?

    12 SENATOR BENTON: Thank you, Denny.

    13 It’s the way Iunderstood it when we first started, I

    14 think, but —

    15 In the legislation it talks — in Line 3, Page 2 — If

    16 the trustee of record is unable or unwilling to — unable

    17 or unwilling to reconvey the deed of trust within 120 days

    18 following payment …

    19 Ihave a problem giving somebody 120 days to reconvey

    20 the property after they have already been paid. Most

    21 escrows are — well, 60 days, some can go 30, some can go

    22 90 if they’re complicated. Business transactions for

    23 business enterprises they can go 120, but that’s pretty

    24 rare.

    25 Once payment has already been made reconveyance should

    Vicki M. Sproat, CCR — 206-999-2020

    6

    1 occur very quickly, certainly within 30 days if not within

    2 two weeks, Iwould think. 120 days is, Ijust think, an

    3 exorbitant amount of time to provide a reconveyance deed.

    4 So I’d like to tighten that up. Because Ithink once a

    5 bank’s been paid, they should reconvey the title. End of

    6 story, right?

    7 STU HALSAN: Perhaps if Icould respond, Senator

    8 Benton?

    9 This bill is really a delicate balance. To get

    10 everybody on the same frame we just want the problem to be

    11 solved. We don’t want to get to a situation where the

    12 banks are opposing it because we’ve given them the rush,

    13 making them do something faster than — I’m sure some

    14 banks might have a bureaucracy but, you know — this —

    15 The time frames, yeah, it appears that they’re long;

    16 however, it is that delicate balance. We are satisfied

    17 with this. We will get rid of some of those things like

    18 the escrow association mentioned that have been sitting

    19 around for six years, and we’ll get rid of it in a timely

    20 manner. But if you start to tighten it up, you’re gonna

    21 be then making it so that not everybody is– that some

    22 people may feel they’re being taken by surprise and

    23 everybody’s interest isn’t protected. So it’s a long

    24 process, but it gets the job done.

    25 SENATOR BENTON: But 120 days is better than six years

    Vicki M. Sproat, CCR — 206-999-2020

    7

    1 is what you’re telling me?

    2 DENNY ELIASON: Absolutely.

    3 HOLLY CHISA: Good afternoon, Mr. Sherman, members of

    4 the committee.

    5 For the record I’m Holly Chisa. I’m here on behalf of

    6 the United Trustees Association, and we also do support

    7 this bill.

    8 We actually had a conference call on this piece of

    9 legislation earlier in the week where Iasked our board:

    10 How do you feel? Are you okay with this? And they’ve

    11 seen these laws in other states including notable

    12 California, Nevada where we’ve had — they have had severe

    13 foreclosure issues.

    14 And for those circumstances where say you had a — your

    15 mortgage was held by a financial institution which was

    16 closed on a Friday — which Iwas one of those — it can

    17 be difficult to resolve out those legacies. And we are

    18 coming off the tail of an extraordinary number of years

    19 where an extraordinary number of financial institutions

    20 were closed and shuffled and we need a way to bring

    21 closure to the homeowner, which is the primary intent of

    22 this legislation is to bring closure. It may take 120

    23 days to get there, but at least it brings finality to a

    24 scenario as opposed to completely ending the moving of

    25 this bill, killing the bill. How does that benefit the

    Vicki M. Sproat, CCR — 206-999-2020

    — ——–

    8

    1 homeowner? How does that benefit the homeowner with the

    2 six years pending who doesn’t get his home resolved and

    3 get his payment recognized?

    4 We’d rather see this bill move forward and resolve out

    5 this particular piece of issue. And for those of us who

    6 operate in other states we have not had problems with them

    7 — with this proposal.

    8 MR. CHAIRMAN: Does anybody have any questions?

    9 SENATOR BENTON: Nope.

    10 MR. CHAIRMAN: Well, it’s these bills that give me

    11 great amusement. Iknow that TVW has the camera on us,

    12 but — and Idirect these comments both to con and the pro

    13 side when Isee your reactions when certain people testify

    14 on a bill. Iwish Icould record it. It’s very humorous.

    15 But thank you so much for both sides, for testifying on

    16 this bill. Thank you, thank you very much.

    17 [**end of transcribed portion**]

    18 –oOo–

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    Vicki M. Sproat, CCR — 206-999-2020

    9

    1 AFFIDAVIT

    2 Ihereby certify that the foregoing transcribed

    3 TVW video segment, located at http://www.tvw.org/

    4 index.php?option=com-tvwplayer&eventiD=2013031076#

    5 start=4699, was transcribed to the best of my ability.

    6 The transcription was provided at the request of

    7 Shelley Erickson.

    8 Dated this 3rd day of August, 2013.

    9

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    11 Vicki M. SproatfCCR CCR No. 3130
    12 206-999-2020

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    Vicki M. Sproat, CCR — 206-999-2020
    Disclaimer !only the copy in pdf format can be used legally, due to changes can be done on word. This copy is just for exposure. Not an official copy due to it can be tampered with on word. Contact Shelley for the pdf and a copy from Vickie for cases.

  3. Here’s a better link you can print out, but it is my understanding you should order an original from Vicky for court.

    http://www.foreclosurehamlet.org/profiles/blogs/video-and-transcript-of-a-washington-judge-taking-the-fifth-and

  4. Please sign my petition if you are a Washington registered voter.

    Please pass on to friends, relatives advocates you know in the Washington State area.

    Hi,

    Bill SB 1435 is unconstitutional and in general allows stolen property
    to be sold by thieves.

    That’s why I created a petition to The Washington State Senate and
    Governor Jay Inslee.

    Will you sign this petition? Click here:

    http://petitions.moveon.org/sign/repeal-bs-1435?source=c.em.mt&r_by=4050219

    Thanks!

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