September, 2013 - FORECLOSURE FRAUD - Page 2

Archive | September, 2013

Barack Obama: We’re in better shape than 5-years ago

Barack Obama: We’re in better shape than 5-years ago

Sept. 24 (Bloomberg) — President Barack Obama addresses the U.N. General Assembly and speaks about the economy. (Source: Bloomberg)

 

 

 

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Wells Fargo fails to win dismissal of U.S. mortgage fraud case

Wells Fargo fails to win dismissal of U.S. mortgage fraud case

Government always knew these cartels were going to break the law from the day they were endorsed!


Reuters-

A federal judge rejected Wells Fargo & Co’s bid to dismiss a lawsuit accusing the largest U.S. mortgage lender of defrauding the government by lying about the quality of mortgages it submitted for insurance coverage.

U.S. District Judge Jesse Furman in Manhattan on Tuesday said the U.S. Department of Justice might pursue all its federal statutory claims against Wells Fargo, which is also the fourth-largest U.S. bank.

[REUTERS]

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FULL COMPLAINTS | NCUA Sues Morgan Stanley and Eight Others over Faulty Securities

FULL COMPLAINTS | NCUA Sues Morgan Stanley and Eight Others over Faulty Securities

NCUA-

The National Credit Union Administration today filed nine lawsuits in Federal District Court in New York against Morgan Stanley & Co., Inc. and eight other institutions over the sale of nearly $2.4 billion in mortgage-backed securities to Southwest and Members United corporate credit unions.

“We continue to pursue accountability and recovery in the wake of billions of dollars in sales of faulty securities that led to the collapse of several corporate credit unions and handed the industry the costly bill of paying for the losses,” NCUA Board Chairman Debbie Matz said. “All the credit unions we supervise and insure are sharing those costs. The people who are responsible should be required to shoulder that burden, as well.”

Defendants Morgan Stanley & Co., Inc. and Morgan Stanley Capital I Inc., Barclays, J.P Morgan/Bear Stearns, Credit Suisse, Royal Bank of Scotland and UBS sold faulty securities to both corporate credit unions. Goldman Sachs, Wachovia and Residential Funding Securities, LLC, now Ally Securities, sold faulty securities to Southwest. The suits make claims under either federal or state securities laws.

[NCUA]

 

COMPLAINTS BELOW:


Alley Securities

Barclays Capital

Bear, Stearns & J.P. Morgan Securities

Credit Suisse

Goldman Sachs

Morgan Stanley

RBS Securities

UBS Securities

Wachovia

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COMPLAINT | National Credit Union Administration Board v. Credit Suisse Group AG

COMPLAINT | National Credit Union Administration Board v. Credit Suisse Group AG

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS

NATIONAL CREDIT UNION
ADMINISTRATION BOARD, as Liquidating
Agent of U.S. Central Federal Credit Union,
Western Corporate Federal Credit Union,
Members United Corporate Federal Credit
Union, Southwest Corporate Federal Credit
Union, and Constitution Corporate Federal
Credit Union,
Plaintiff,

v.

CREDIT SUISSE GROUP AG; JP
MORGAN CHASE & CO.; JPMORGAN
CHASE BANK, NATIONAL
ASSOCIATION; BARCLAYS BANK PLC;
LLOYDS BANKING GROUP PLC;
WESTLB AG; WESTDEUTSCHE
IMMOBILIENBANK AG; UBS AG; THE
ROYAL BANK OF SCOTLAND GROUP
PLC; COÖPERATIEVE CENTRALE
RAIFFEISEN BOERENFLEENBANK B.A.;
THE NORINCHUKIN BANK; THE BANK
OF TOKYO-MITSUBISHI UFJ, LTD.;
HBOS PLC; SOCIÉTÉ GÉNÉRALE S.A;
ROYAL BANK OF CANADA,
Defendants.

COMPLAINT

Plaintiff, National Credit Union Administration Board (“NCUA”), brings this action in its
capacity as Liquidating Agent of U.S. Central Federal Credit Union (“U.S. Central”), Western
Corporate Federal Credit Union (“WesCorp”), Members United Corporate Federal Credit Union
(“Members United”), Southwest Corporate Federal Credit Union (“Southwest”), and Constitution
Corporate Federal Credit Union (“Constitution”) (collectively the “Credit Unions”) against certain
members of the panel of banks that set the London Interbank Offered Rate (“LIBOR” or “Libor”)
for the U.S. Dollar. From at least January 2005 through December 31, 2010 (“the Relevant
Period”) Defendants conspired to suppress LIBOR in violation of the Sherman Act, 15 U.S.C. § 1 et
seq., the Clayton Act, 15 U.S.C. § 12 et seq., and state antitrust laws.

The allegations set forth herein are based on corporate knowledge and documents and
information in NCUA’s possession, and upon information and belief developed through
investigation by NCUA and by counsel that included a review of publicly available documents,
including legal actions brought against Defendants, regulatory and criminal settlements of LIBOR
manipulation charges, documents that appear to have been drafted in whole or in part by certain
Defendants, Defendants’ press releases and filings with the Securities and Exchange Commission
(“SEC”), news articles, scholarly articles, and court documents submitted in LIBOR-related
proceedings.

[…]

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NCUA files suit against 13 international banks, including J.P. Morgan Chase, alleging violations of federal and state anti-trust laws by manipulation of interest rates through the London Interbank Offered Rate (LIBOR) system.

NCUA files suit against 13 international banks, including J.P. Morgan Chase, alleging violations of federal and state anti-trust laws by manipulation of interest rates through the London Interbank Offered Rate (LIBOR) system.

Why this corrupt government hasn’t shut them down? It’s going to only get a lot worse…sigh.


NCUA-

The National Credit Union Administration today filed suit in Federal District Court in Kansas against 13 international banks, including J.P. Morgan Chase, alleging violations of federal and state anti-trust laws by manipulation of interest rates through the London Interbank Offered Rate (LIBOR) system.

The manipulation of LIBOR, the benchmark for setting interest rates around the globe, resulted in a loss of income from investments and other assets held by five failed corporate credit unions: U.S. Central, WesCorp, Members United, Southwest and Constitution. 

“We have a responsibility to pursue recoveries through every available avenue against those who caused billions of dollars in losses to credit unions,” NCUA Board Chairman Debbie Matz said. “Some firms were manipulating international interest rates in a way that cost the five corporates to lose millions of dollars. Just as we are doing in our other suits, we are seeking to hold responsible parties accountable for their actions.”

[NCUA]

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Deutsche Bank National Trust Company v Heinrich | SOUTH CAROLINA COURT HOLDS THAT FORECLOSURE LAW OF U.S. SUPREME COURT TRUMPS EVERYTHING: FORECLOSING PARTY MUST OWN BOTH THE NOTE AND THE MORTGAGE TO FORECLOSE

Deutsche Bank National Trust Company v Heinrich | SOUTH CAROLINA COURT HOLDS THAT FORECLOSURE LAW OF U.S. SUPREME COURT TRUMPS EVERYTHING: FORECLOSING PARTY MUST OWN BOTH THE NOTE AND THE MORTGAGE TO FORECLOSE

H/T FDN

IN THE COURT OF COMMON PLEAS
OF THE NINTH JUDICIAL CIRCUIT

STATE OF SOUTH CAROLINA
COUNTY OF CHARLESTON

Deutsche Bank National Trust Company, as
Trustee of the Indy Mac INDX Mortgage Trust
2007-FLX3, Mortgage Pass-Through
Certificates, Series 2007-FLX3 under the
Pooling and Servicing Agreement dated April 1,
2007
Plaintiff,

vs.

Scott J. Heinrich; Dinah K. Heinrich; One West
Bank, FSB; County of Charleston,
Defendants.

This case came before me on May 13, 2013 on Defendants’ pre-Answer Motion to
Dismiss this case pursuant to Rules 12(b)(6) and 12(b)(7), SCRCP. Defendants, Scott J. Heinrich
and Dinah K. Heinrich (“Defendants”), were represented by William H. Sloan of the Sloan Law
Firm, PA in Summerville, and Plaintiff was represented by John J. Hearn of Rogers Townsend &
Thomas, PC in Columbia.

I. Rule 12(b)(6), SCRCP

Defendants claim that the Complaint should be dismissed pursuant to Rule 12(b)(6),
SCRCP, because Plaintiff “lacks the necessary standing to file this action prior to acquiring and
recording an Assignment of Mortgage” and fails to mention how they are the owner of the Note
and Mortgage in this case under our fact-based pleading scheme. Plaintiff admits that the
assignment of mortgage into Plaintiff was recorded February 23, 2011, about two weeks after
this action was filed. Plaintiff claims to have no obligation to record the assignment into itself
prior to filing this action.

Plaintiff has possession of the original-Note, which is indorsed in blank at the time of the
hearing before me on May 13. 2013. Plaintiff claims that the note is a negotiable instrument
under the South Carolina Uniform Commercial Code, S.C. Code §36-3 et seq. which would
entitle them certainly to sue on the note in this action. However, Plaintiff is seeking to foreclose
on the mortgage that is attached to the real property as opposed to simply suing on the
promissory note.

The idea that the Mortgage follows the Note is one which has been repeatedly confirmed
by our courts: ‘”South Carolina recognizes the ‘familiar and uncontroverted proposition’ that ‘the
assignment of a note secured by a mortgage carries with it an assignment of mortgage. However,
Carpenter v. Longan, 83 U.S. 271, 16 Wall. 271, 21 L.Ed. 313 (1872), quoted by Plaintiffs
counsel in this oral argument and brief, clearly supports the notion that the Plaintiff must clearly
own the Note and the Mortgage to foreclose on the property. Plaintiff failed to show that it
owned the Mortgage at the time the Complaint was filed. In its Complaint, Plaintiff merely
contends in §3 of its Complaint that is a holder and has the right to enforce. Further, the
mortgage of this case shows Mortgage Electronic Registration Systems, Inc. (MERS) to be the
mortgagee. This was confirmed by Plaintiffs counsel in oral argument. MERS is never
mentioned on the Note.

Qur state court of appeals made a recent decision in BAC Home Loan Servicing, L.P. v.
Kinder, 398 S.C. 619, 731 S.E.2d 547 (Ct. App. 2012.) “[T]he assignment of a mortgage does
not need to be recorded, and failure to do so has no effect on the rights of the assignee.” /d. at
623. However, I distinguish the facts of Kinder from this case as the Assignment of Mortgage in
Kinder was after the foreclosure was already complete and the issue at dispute in that case was
the surplus funds going to the,Assignee. Filing is not the issue but
ownership of the note.

It is clear that to have standing in this foreclosure case, Plaintiff must not only be the holder & owner of the original Note, but also the Mortgage as well. Plaintiff’s Complaint in this case fails to meets this criteria. Plaintiff lacks the standing to initiate and prosecute the foreclosure, and
dismissal pursuant to Rule 17(a) and Rule 12(b) (6) SCRCP is appropriate.

II. Failure to Join Necessary Parties under Rule 12(b)(7), SCRCP

Rule 12(b )(7) provides that one defense to an action is the failure to join a party under
Rule 19 of the South Carolina Rules of Civil Procedure. Rule 19 provides that:

A person who is subject to service of process and whose joinder will not deprive
the court of jurisdiction over_ the subject matter of the action shall be joined as a
party in the action if(1) in his absence complete relief cannot be afforded among
those already parties, or (2) he claims an interest relating to the subject of the
action and is so situated that the disposition of the action in his absence may (i) as
a practical matter impair or impede his ability to protect that interest or (ii) leave
any of the persons already parties subject to a substantial risk of incurring double,
multiple, or otherwise inconsistent obligations by reason of his claimed interest. If
he has not been so joined, the court shall order that he be made a party.

Defendants claim that Mortgage Electronic Registration Systems, Inc. (“MERS”) and IndyMac
Bank, FSB (“IndyMac”) are necessary parties to this action, and that the court must join them as
parties to protect the Defendants from “double or triple liability” on the Note and Mortgage at
issue. Again, Defendants misapprehend the applicable law by advancing this argument. Under
South Carolina law, Defendants would not be subject_ to duplicative payment obligations because
Plaintiff’s foreclosure judgment will discharge Defendants’ liability to other claimants. See S.C.
Code Ann §36-3~603(1) (2003) (explaining the circumstances under which cancellation or
satisfaction filed by the holder of a negotiable instrument will discharge liability for other claims
on same instrument.)

There is no reason that the absence of MERS or IndyMac would prevent this court from
issuing a foreclosure judgment establishing Plaintiffs sole authority to enforce the Note and
Mortgage at issue here. Further, even if it is determined that these were necessary parties. Rule
12(b )(7) does not call for dismissal of the action, and instead only requires that the parties be
joined. On a Rule 12(b )(7) motion, “the proper course for the trial· court is to determine the
necessity of adding a new party under Rule 19 to insure a full adjudication of the controversy.”
Bancohio National Bank v. Neville, 310 S.C. 323, 328, 426 S.E.2d 773, 776 (1993). As such,
Defendants’ motion to dismiss pursuant to Rule 12(b)(7) is denied. However, In find this issue
moot as I have dismissed this case pursuantto Defendants’ Heinrich’s Motion to Dismiss under
Rule 12(b)(6), SCRCP.

And it is so ordered that this case be dismissed without prejudice.

IT IS SO ORDERED!

J.C. Nicholas, Jr.
Presiding Judge

July 30,2013

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Obama to tap ex-Enron prosecutor/ Morgan, Lewis & Bockius (MERS) partner to run Justice Department criminal unit

Obama to tap ex-Enron prosecutor/ Morgan, Lewis & Bockius (MERS) partner to run Justice Department criminal unit

Morgan, Lewis & Bockius for those who don’t know have been MERS’ counsel for many many years.


Reuters-

The White House said on Tuesday it planned to nominate a former prosecutor who helped build the case against Enron Corp to serve as the U.S. Justice Department’s top criminal cop.

President Barack Obama said he would nominate Leslie Caldwell, a private lawyer who previously supervised the Justice Department’s case against one of the largest accounting frauds in U.S. history, to run the agency’s criminal division.

Obama’s previous head of the division, Lanny Breuer, raised its profile with record financial settlements but also shouldered much of the blame for bringing few marquee cases related to the financial crisis.

[REUTERS]

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Was This Whistle-Blower Muzzled?

Was This Whistle-Blower Muzzled?

NY Times-

THE fifth anniversary of Lehman Brothers’ bankruptcy has occasioned one legacy-spinning defense after another. We’ve heard from Ben S. Bernanke, chairman of the Federal Reserve; Henry M. Paulson Jr., the Treasury secretary at the time; and Timothy F. Geithner, then the New York Fed president and later Mr. Paulson’s successor at Treasury, about their historic decisions to use trillions of dollars of taxpayers’ money to bail out the banking system.

But will we ever know what really happened behind all those closed doors? The seemingly appalling treatment afforded Richard M. Bowen III, a former Citigroup executive who blew the whistle on years of malfeasance there, shows that we may not. Thanks to political pressure and the revolving door between Washington and Wall Street, the events leading up to the financial crisis remain obscured and may never be fully revealed.

[NEW YORK TIMES]

image: 60 Minutes

Following videos are from Mr. Bowen’s site: http://www.richardmbowen.com/speaking/

Preview

Ethics

Informs

SEC

Email

Educates

The Congressional Commission


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HENNING vs WACHOVIA MORTGAGE, FSB, n/k/a WELLS FARGO BANK, N.A., | D. Mass. Judge Young calls out Wells Fargo

HENNING vs WACHOVIA MORTGAGE, FSB, n/k/a WELLS FARGO BANK, N.A., | D. Mass. Judge Young calls out Wells Fargo

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS

JOSEPH HENNING,
Plaintiff,

v.

WACHOVIA MORTGAGE, FSB, n/k/a
WELLS FARGO BANK, N.A.,1
Defendant.

EXCERPT:

 

III. CONCLUSION

And so, Wells Fargo wins on a technicality. The Court never addresses the merits of this case and expresses no opinion thereon. Still, it is appropriate to point out that, were Henning to prove his case on the merits, the conduct of Wells Fargo would be shown to be nothing short of outrageous. On the other hand, perhaps if Wells Fargo addressed the merits, its conduct would be vindicated by fair-minded American jurors. A quick visit to Wells Fargo’s website confirms that it vigorously promotes itself as consumer friendly, Loans and Programs, page within Home Lending, wellsfargo.com, https://www.wellsfargo.com/mortgage/loanprograms/ (last visited September 17, 2013); a far cry from the hard nosed win-at-any-cost stance it has adopted here.

The technical (and now obsolete) preemption defense upon which Wells Fargo relies is an affirmative defense which can be waived. See, e.g., Tompkins v. United Healthcare of New England, 203 F.3d 90, 97 (1st Cir. 2000). The disconnect between Wells Fargo’s publicly advertised face and its actual litigation conduct here could not be more extreme. These facts lead this Court to inquire whether Wells Fargo wishes to address Henning’s claims on the merits. After all, it may be that Wells Fargo has done nothing wrong.

ACCORDINGLY, it is ORDERED that Wells Fargo, within 30 days of the date of this order, shall submit a corporate resolution bearing the signature of its president and a majority of its board of directors that it stands behind the conduct of its skilled attorneys and wishes to avail itself of the technical preemption defense to defeat Henning’s claim.

Should it do so, judgment will enter for Wells Fargo. If no such resolution is filed, the Court will deem the preemption defense waived and both Wells Fargo and Henning will have the opportunity to address the merits (i.e., what really happened) at a trial before an American jury. “

[…]

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Appeals court says Texas law governs foreclosures in Utah by BofA

Appeals court says Texas law governs foreclosures in Utah by BofA

Everything can always be adjusted. I’d like to find this legal opinion from the Office of the Controller of the Currency that construed federal banking law in the other case that is referenced in this article.

Salt Lake TRIBUNE-

A federal appeals court has ruled that Texas law governs foreclosures in Utah when carried out by a unit of Bank of America. But in doing so it left open a big door for further legal challenges to that position.

In a ruling issued Thursday, the 10th Circuit Court in Appeals upheld an order by U.S. District Judge David Sam, who in 2011 had dismissed the lawsuit of a Utah County resident who’s home had been foreclosed on by ReconTrust, the foreclosure unit of Bank of America.

Sam had agreed with ReconTrust’s arguments that because its offices are in Texas when it carried out foreclosure procedures in Utah, national banking laws and regulations mean that the governing law is in the state in which its offices are located.

[SALT LAKE TRIBUNE]

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Chavez v. Indymac Mortgage Services (PUBLISHED) | Wrongful Foreclosure-Equitable Estoppel-Unjust Enrichment? – HAMP Abuse . . . The judgment is reversed. Plaintiff is entitled to recover her costs on appeal.

Chavez v. Indymac Mortgage Services (PUBLISHED) | Wrongful Foreclosure-Equitable Estoppel-Unjust Enrichment? – HAMP Abuse . . . The judgment is reversed. Plaintiff is entitled to recover her costs on appeal.

CERTIFIED FOR PUBLICATION
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA

ANGELICA CHAVEZ,
Plaintiff and Appellant,

v.

INDYMAC MORTGAGE SERVICES et al.,
Defendants and Respondents.

 

APPEAL from a judgment of the Superior Court of San Diego County, Lorna Alksne, Judge. Reversed.

EXCERPT:
II. Analysis

A. Breach of Contract 9

Under Defendants’ proposed reading of the Modification Agreement, Chavez could do everything required of her to be entitled to a permanent modification, but Defendants could avoid the contract by refusing to send Chavez a signed copy of the Modification Agreement for any reason whatsoever. We reject this interpretation as we must determine the objective intent of the parties based on reading the Modification Agreement as a whole. (Civ. Code, § 1641 [“The whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other.”].) Here, the language of the Trial Period Plan and the Modification Agreement taken together suggest Defendants concluded that Chavez qualified for a permanent modification when it sent her the Modification Agreement, and assuming Chavez’s representations continued to be true and all preconditions to modifications have been satisfied, that Chavez’s original loan documents would automatically be modified on the date stated in the Modification Agreement. (Civ. Code, 10 § 1642 [“Several contracts relating to the same matters, between the same parties, and made as parts of substantially one transaction, are to be taken together.”].)

 . . .

12 Although Chavez has not alleged that Defendants were unjustly enriched, discovery may show unjust enrichment. (See generally, Diane E. Thompson, Foreclosing Modifications: How Servicer Incentives Discourage Loan Modifications (2011) 86 Wash. L.Rev. 755, 777 [Noting that servicers can make more money from foreclosing than from modifying and “the true sweet spot lies in stretching out a delinquency without either a modification or a foreclosure.”].)

 . . . 

13

B. Wrongful Foreclosure

Chavez argues that she alleged a valid claim for breach of the Modification Agreement and she was not required to allege tender. We agree.

14

As discussed above, Chavez properly alleged a cause of action for breach of the Modification Agreement. Under the terms of the Modification Agreement, all late charges were waived and the modified principal balance included any past due amounts and arrearages. Chavez alleged the existence of an enforceable agreement to modify her loan and the payment of all sums due under that agreement until Defendants allegedly breached the agreement by failing to accept her payment. Chavez sufficiently alleged an exception to the tender rule that the foreclosure sale was void because Defendants lacked a contractual basis to exercise the power of sale as Chavez’s original loan had been modified under the Modification Agreement and Chavez fully performed under the Modification Agreement until Defendants breached the agreement by refusing payment.
. . .

Nothing in this opinion prohibits Chavez from seeking leave to amend to add new allegations, assert alternative theories of recovery or add new theories of liability. 16 DISPOSITION The judgment is reversed. Plaintiff is entitled to recover her costs on appeal.

[…]

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Rebalancing Public and Private in the Law of Mortgage Transfer – Hunt, Stanton, Wallace

Rebalancing Public and Private in the Law of Mortgage Transfer – Hunt, Stanton, Wallace

“If MERS, Inc. enters bankruptcy, a bankruptcy trustee with the powers of a judgment creditor of MERS, Inc. and of a bona fide purchaser of real property interests from MERS, Inc. will be appointed to administer MERS, Inc.’s bankruptcy estate for the benefit of creditors. The MERS, Inc. bankruptcy trustee could seek to bring the securitized mortgages that the company nominally owns into its bankruptcy estate and administer the mortgages along with the other estate property for the benefit of MERS, Inc.’s creditors. Speaking generally,unperfected interests in the mortgages could be vulnerable to such a claim, so whether unrecorded interests in the mortgages were nevertheless perfected according to Article 9 could determine the fate of 30 million mortgages.”

 

Rebalancing Public and Private in the Law of Mortgage Transfer


John P. Hunt

University of California, Davis – School of Law; Berkeley Center for Law, Business and the Economy

Richard Stanton

University of California, Berkeley – Finance Group

Nancy Wallace

University of California, Berkeley – Real Estate Group

February 10, 2013

UC Davis Legal Studies Research Paper No. 327

 

Abstract:

The law governing the United States’ $13 trillion mortgage market is broken. Courts and legislatures around the country continue to struggle with the fallout from the effort to build a 21st century global market in mortgages on a fragmented, arguably archaic legal foundation. These authorities’ struggles stem in large part from the lack of clarity about the legal requirements for mortgage transfer, the key process for contemporary mortgage finance.

We demonstrate two respects in which American mortgage transfer law is unclear and offer suggestions for fixing it. It is currently unclear whether a recorded mortgage assignment is needed to make sure that a mortgage transferee has a protected interest in the mortgage. It also is unclear whether a recorded assignment is needed to make sure that the transferee can lawfully foreclose on the mortgage. Revisions to the Uniform Commercial Code adopted around the turn of the century may be interpreted as doing away with preexisting laws arguably requiring parties to record their ownership interests to protect them. But the interaction of these revisions and preexisting state recording laws is most unclear, with consequences for borrowers, investors, and securitization arrangers.

We suggest an approach to law reform that would provide needed clarity and bring about an appropriate balance between private and public. The Article 9 revisions reflect a preoccupation, prevalent in the 1990s, with reducing the cost of mortgage transfers to the transacting parties. Obviating public recording, as the Article 9 revisions purport to do, does reduce cost, but it also tends to eliminate public records of mortgage ownership. As we show, these public records have value not just for parties that may transact in mortgages, but for the public more generally. A more balanced approach would clearly require transacting parties to record their interests in order to protect them, but would adopt this change in tandem with an expansion of low-cost digital recording. This approach provides the public benefits of high-quality mortgage records while reducing the cost and inconvenience of recording to transacting parties.

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THE FORECLOSURE HOUR – EVERY SUNDAY 6:00 PM PACIFIC 9:00 PM EASTERN ON KHVH-AM (830 ON THE DIAL) AND iHEART RADIO

THE FORECLOSURE HOUR – EVERY SUNDAY 6:00 PM PACIFIC 9:00 PM EASTERN ON KHVH-AM (830 ON THE DIAL) AND iHEART RADIO

COMING TO YOU LIVE DIRECTLY FROM THE DUBIN LAW OFFICES AT HARBOR COURT, DOWNTOWN HONOLULU, HAWAII

 LISTEN TO KHVH 830 AM RADIO OR iHEART RADIO

AND CALL IN AT (808) 521-8383 OR TOLL FREE (888) 565-8383

Have your questions answered on the air. 

Submit questions to info@foreclosurehour.com

.

Listen to the first show below

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Man Shoots Property Manager During Eviction Attempt At $1.6 Million Home

Man Shoots Property Manager During Eviction Attempt At $1.6 Million Home

HuffPO-

And you thought you had real estate problems.

A California man shot his property manager through a locked door during an eviction attempt at a $1.6 million home on Wednesday, reported the San Francisco Chronicle.

According to the Chronicle, two deputies, a property manager and a locksmith arrived at a foreclosed home in an upscale gated community in San Ramon, a wealthy San Francisco suburb, to evict the resident. After knocking without answer, the locksmith began drilling when a single shot was reportedly fired through the door, striking the property manager in the leg. The property manager was taken to the hospital, and SWAT team rushed to the scene.

[HUFFINGTON POST]

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OCC Takes Action Against JPMC to Protect Consumers and to Ensure Servicemembers Receive Credit Protections for Their Non-Home Loans

OCC Takes Action Against JPMC to Protect Consumers and to Ensure Servicemembers Receive Credit Protections for Their Non-Home Loans

Contact: Bryan Hubbard
(202) 649-6870

OCC Takes Action Against JPMC to Protect Consumers and to Ensure Servicemembers Receive Credit Protections for Their Non-Home Loans

WASHINGTON – The Office of the Comptroller of the Currency (OCC) today announced an enforcement action against JPMorgan Chase Bank, N.A., Columbus, Ohio, JPMorgan Bank and Trust Company, N.A., San Francisco, California, and Chase Bank USA, N.A., Wilmington, Delaware (collectively, the bank), for unsafe or unsound practices in connection with the bank’s non-home loan debt collection litigation practices and the bank’s non-home loan compliance with the Servicemembers Civil Relief Act (SCRA).

The enforcement action requires the bank to provide remediation to affected consumers and to correct deficiencies in the bank’s practices and procedures related to the preparation and notarization of affidavits and other sworn documents used in the bank’s debt collection litigation and its SCRA compliance program.  The OCC’s action also directs the bank to improve its debt collection litigation policies, procedures and practices to ensure that affidavits and other sworn documents used in connection with non-home loan debt collection litigation are accurate, based on the personal knowledge of the bank employee signing the documents, or other applicable standard, and are notarized in accordance with all applicable legal requirements.  

With respect to its SCRA compliance program, the OCC requires the bank to improve its policies and procedures for determining whether servicemembers are eligible for requested SCRA-related benefits, ensuring that the SCRA benefits are calculated correctly, and verifying the military status of servicemembers prior to seeking or obtaining default judgments on non-home loans.

The OCC’s action also directs the bank to conduct a review of all non-home lending debt collection litigation at the bank from January 1, 2009 until present, and all non-home lending SCRA accounts at the bank from January 2005 until present, to identify consumers eligible for remediation as a result of the deficiencies and unsafe or unsound practices cited by the OCC.  The bank must submit a plan to the OCC detailing how remediation will be made to affected consumers.  OCC national bank examiners will monitor compliance with this order and the remediation required to be provided by the bank.

Related Link:

# # #
source: http://www.occ.gov/news-issuances/news-releases/2013/nr-occ-2013-139.html
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JPMorgan Chase & Co. admits violating Securities Laws to Pay $920 Million in Fines Over Trading Loss

JPMorgan Chase & Co. admits violating Securities Laws to Pay $920 Million in Fines Over Trading Loss

Press Release

Release Date: September 19, 2013

For immediate release

The Federal Reserve Board on Thursday announced that JPMorgan Chase & Co., New York, New York (JPMC), a registered bank holding company, will pay a $200 million penalty for deficiencies in the bank holding company’s oversight, management, and controls governing its Chief Investment Office (CIO).

The consent Order of Assessment of a Civil Money Penalty against JPMC cites the failure by JPMC to appropriately inform its board of directors and the Federal Reserve of deficiencies in risk-management systems identified by management. On January 14, 2013, the Board issued a consent Cease and Desist Order requiring JPMC to take prompt action to correct these deficiencies, which represented unsafe or unsound practices at JPMC. The Board’s Cease and Desist Order followed the disclosure of significant losses in a large synthetic credit portfolio that was managed by the CIO.

The Board’s action on Thursday was taken in coordination with the Office of the Comptroller of the Currency, the Securities and Exchange Commission, and the Financial Conduct Authority of the United Kingdom. The penalties issued by the agencies total approximately $920 million. 

For media inquiries, call 202-452-2955. 

Attachment (PDF)

Related Announcements: 

Securities and Exchange Commission

Financial Conduct Authority

Office of the Comptroller of the Currency

source: http://www.federalreserve.gov/newsevents/press/enforcement/20130919a.htm

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U.S. Bank Natl. Assn. v Guy | NYSC –  plaintiff’s submissions of attorney affirmations and affidavits from SPS, plaintiff’s alleged document custodian, fail to establish that the note was either assigned to US Bank Trust or was physically delivered to US Bank Trust

U.S. Bank Natl. Assn. v Guy | NYSC – plaintiff’s submissions of attorney affirmations and affidavits from SPS, plaintiff’s alleged document custodian, fail to establish that the note was either assigned to US Bank Trust or was physically delivered to US Bank Trust

Decided on August 22, 2013

Supreme Court, Kings County

 

U.S. Bank National Association, As Trustee, On Behalf Of The Holders Of The Adjustable Rate Mortgage Trust 2007-1, Adjustable Rate Mortgage- Backed Pass Through Certificates, Series 2007-1, Plaintiff,

against

Paula Guy, Advantage Assets II, Inc.; Arrow Financial Services, LLC; Mortgage Electronic Registration Systems, Inc., As Nominee For Credit Suisse Financial Corporation; New York City Environmental Control Board, New York City Parking Violations Bureau; New York City Transit Adjudication Bureau; John Does’ and Jane Does’, said names being fictitious, parties intended being possible tenants or occupants of premises, and corporations, other entities or persons who claim, or may claim, a lien the premises, Defendants.

11647/12

Plaintiff Attorney: Tyne Modica, Esq., Rosicki, Rosicki & Assoicated, P.C., 51 E. Bethpage Road, Plainview, NY 11803

Defendant Attorney: Steven Alexander Biolsi, 7101 Austin Street, Suite 201B, Forest Hills, NY 11375

David I. Schmidt, J.

The following papers numbered 1 to 11 read herein:Papers Numbered

Notice of Motion/Order to Show Cause/

Petition/Cross Motion and

Affidavits (Affirmations) Annexed1-3

Opposing Affidavit (Affirmation)4-5

Reply Affidavit (Affirmation)6

Sur-Reply Affidavit8-9

Other PapersDecember 7, 2012 Order7

July 3, 2013 Letters10-11 [*2]

Upon the foregoing papers, defendant Paula Guy (Guy) moves for an order (1) dismissing the complaint of plaintiff U.S. Bank National Association, as trustee, on behalf of the holders of the adjustable rate mortgage trust 2007-1, adjustable rate mortgage-backed pass through certificates, series 2007-1 (US Bank Trust), pursuant to CPLR 3211(a), and (2) granting defendant Guy the full costs of this motion, including an award of counsel fees and expenses in the sum of at least three thousand dollars, assessed against plaintiff.

Background Facts and Procedural History

On October 26, 2006, defendant Guy, as both borrower and mortgagor, executed a promissory note and an adjustable rate mortgage, with an initial interest rate of 8.375%, in the principal amount of $520,000.00. The promissory note named Credit Suisse Financial Corporation (Credit Suisse), the originator of the loan, as the lender/payee. The mortgage named Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for Credit Suisse, as mortgagee. The mortgage was duly recorded in the Office of the New York City Register, Department of Finance, on November 15, 2006, under file number 2006000634899, covering the residential premises located at 947 Liberty Ave., Brooklyn, New York.

The complaint alleges that the mortgage was thereafter assigned to DLJ Mortgage Capital, Inc. (DLJ) on May 18, 2007, and that the mortgage was subsequently assigned to plaintiff US Bank Trust on October 4, 2011. The mortgage recording documents on the Automated City Register Information System (“ACRIS”) website of the Office of the City Register, New York City Department of Finance, are consistent with those allegations.[FN1]

The “Corporate Assignment of Mortgage” between DLJ and plaintiff reflects that Select Portfolio Services, Inc. (SPS), the mortgage servicer of defendant’s home loan, played a dual role in the assignment process by acting as agent for both “Assignor” and “Assignee.” The assignment reflects that SPS executed the mortgage assignment on October 4, 2011, on behalf of DLJ in its capacity as DLJ’s “Attorney-in-Fact,” in care of itself, and accepted the mortgage assignment in favor of US Bank Trust in care of itself. Bill Koch, Document Control Officer at SPS, executed the mortgage assignment from DLJ to US Bank Trust, which was recorded February 14, 2012..

Shortly thereafter, US Bank Trust commenced this foreclosure action against defendant Guy on June 5, 2012, alleging that it “is the holder of the subject note an[d] [sic] mortgage, or has been delegated the authority to institute a mortgage foreclosure action by the owner and holder of the subject mortgage and note ….” The complaint alleges that defendant Guy defaulted upon her monthly payment obligations under a December 20, 2010 loan modification under the Home Affordable Modification Program (HAMP) as of February 1, 2012, and seeks to foreclose on the above-referenced mortgage.

Defendant’s Motion to Dismiss

On July 11, 2012, defendant Guy moved, pursuant to CPLR 3211(a), to dismiss the complaint for lack of standing on the ground that the allegations in the complaint reflect that “[p]laintiff may not have received a proper assignment or delivery, actual or otherwise, of [the] note allegedly giving rise to this action.” Defendant Guy’s moving papers include the affidavit of Paula Guy,[FN2] and an attorney affirmation from Steven Biolosi, Esq., dated July 9, 2012 and July 11, 2012, respectively. [*3]

US Bank Trust opposed defendant’s dismissal motion with an attorney affirmation from Robert King, Esq., and an affidavit from Gary Cloward of SPS, US Bank Trust’s alleged document custodian and the servicer of defendant’s mortgage, both dated September 26, 2012. Plaintiff claims that defendant’s standing argument is without merit since “a plaintiff has standing where it is both the holder or assignee of the subject mortgage and the holder or assignee of the underlying note at the time the action is commenced” (see US Bank v Silverberg, 86 AD3d 274, 279-280 [2011]). Without providing any factual details how plaintiff US Bank Trust derived an interest in the underlying note, plaintiff’s counsel claims that an allonge “affixed to and a permanent part of the note … contain[ing] an endorsement in blank signed by the attorney-in-fact for Credit Suisse” conclusively demonstrates plaintiff’s standing to bring this action.

The Cloward opposing affidavit contends that both the note and mortgage were delivered to SPS on US Bank Trust’s behalf on or about October 26, 2006, the note’s origination date, based on Cloward’s alleged review of US Bank Trust’s business records in SPS’ custody. Other than the alleged delivery date, the Cloward opposing affidavit provides no specific factual details (i.e., who, what, where, how) regarding the circumstances of the note’s delivery to either plaintiff US Bank Trust or to SPS, as US Bank Trust’s document custodian.

The Conditional Order of Dismissal

Because US Bank Trust failed to submit any probative documentary or testimonial evidence from someone with personal knowledge of the note’s delivery to US Bank Trust, and its opposition papers seemingly conflict with the complaint’s allegation regarding the note’s delivery on October 26, 2006,[FN3] this court conditionally granted defendant Guy’s motion to dismiss the complaint, by order dated December 7, 2012, “unless, on or before January 14, 2013, plaintiff provides sufficient and proper documentation to establish plaintiff’s standing in this case” (December 7th Order).

Plaintiff’s Sur-Reply Submission

Prior to the court-imposed deadline for further submissions in the December 7th Order, US Bank Trust submitted another affirmation from Robert King as a sur-reply in further opposition to defendant’s dismissal motion based on “the file maintained in this action.” The King sur-reply affirmation attached a copy of the limited power of attorney from U.S. Bank National Association (US Bank) appointing SPS “Attorney-in-Fact” to, among other things, “execute and acknowledge in writing or by facsimile stamp all documents customarily and reasonably necessary and appropriate [to] . . . [t]ransact business of any kind regarding the Loans, and obtain an interest therein and/or in any building securing payments thereof, as U.S. Bank’s act and deed, to contact for, purchase, receive and take possession and evidence of title in and to the property and/or to secure payment of a promissory note . . . “

While the limited power of attorney between US Bank and SPS expressly provides that it “is being issued in connection with [SPS’s] responsibilities to service certain mortgage loans (the “Loans”) held by U.S. Bank in its capacity as Trustee,” plaintiff failed to submit a schedule reflecting that defendant’s loan is included in the “Loans” referenced therein. Instead, King’s sur-reply affirmation made the conclusory representation that SPS, in its capacities as servicer of “the pooled loans,” and the document custodian and attorney-in-fact for US Bank Trust, “maintains possession of the note on behalf of [US Bank Trust]” as one of its “responsibilities” and “did own and hold the note and mortgage at issue prior to commencement of the action.”

Plaintiff also submitted a sur-reply affidavit from Cloward of SPS, which claims that the note was delivered to SPS “as plaintiff’s attorney-in-fact and document custodian” on November 6, 2006, based on his review of “the subject loan records.” Mr. Cloward’s sur-reply affidavit does not describe or attach the business records upon which his knowledge is based, nor does the affidavit describe any [*4]of the factual details regarding the alleged delivery of the note to SPS on US Bank Trust’s behalf on November 6, 2006.

Importantly, plaintiff’s sur-reply does not explain why: (1) Cloward’s previously submitted “Possession Affidavit” inconsistently averred that the note was delivered to SPS in its capacity as US Bank Trust’s document custodian on or about October 26, 2006; (2) the complaint alleges that defendant Guy delivered the note to Credit Suisse on the October 26, 2006 origination date of the loan; and (3) DLJ, by SPS, assigned the mortgage to US Bank Trust, in care of SPS, on October 4, 2011, nearly five years after the October 26, 2006 origination date of the loan.

Discussion

(1)

A motion to dismiss under CPLR 3211 requires a determination whether the complaint states a cause of action, but “[i]f the court considers evidentiary material, the criterion then becomes whether the proponent of the pleading has a cause of action” (Sokol v Leader, 74 AD3d 1180, 1181-82 [2010] [emphasis added], quoting Guggenheimer v Ginzburg, 43 NY2d 268, 275 [1977]). Dismissal results only if the movant demonstrates conclusively that no cause of action is pled, or that “a material fact as claimed by the pleader to be one is not a fact at all” (Sokol, 74 AD3d at 1182, quoting Guggenheimer, 43 NY2d at 275; see also Lawrence v Graubard Miller, 11 NY3d 588, 595 [2008]). In considering a motion to dismiss for failure to state a claim, all factual allegations are accepted as true (Sokol, 74 AD3d at 1181). Legal conclusions and factual claims flatly contradicted by the evidence, however, will not be presumed true (Sweeney v Sweeney, 71 AD3d 989, 991 [2010]; Meyer v Guinta, 262 AD2d 463, 464 [1999]).

Defendant Guy seeks dismissal of US Bank Trust’s complaint on the ground that the allegations contained therein reflect that US Bank Trust “may not have received a proper assignment or delivery, actual or otherwise, of [the] note allegedly giving rise to this action.” Upon defendant Guy’s assertion of the defense of lack of standing, the burden shifted to plaintiff US Bank Trust to demonstrate that it had standing to commence and prosecute this action (US Bank, NA v Collymore, 68 AD3d 752, 753 [2009]). As discussed below, plaintiff US Bank Trust failed to satisfy its burden of proving that the note was duly delivered to it prior to June 5, 2012, the commencement date of this foreclosure action.

(2)

In addition to an attorney affirmation, which makes the conclusory assertion that “plaintiff currently holds the note and mortgage as of October 26, 2006,” plaintiff opposed defendant’s motion to dismiss the complaint with a “Possession Affidavit” by Gary Cloward, the document control officer of SPS. While Cloward’s opposing affidavit claims that the note and mortgage were delivered to SPS as plaintiff’s alleged document custodian on October 26, 2006, that assertion is not based on Cloward’s personal knowledge, since his affidavit explicitly states that it is based on his “review and examination of the subject loan records” that SPS maintains as document custodian for US Bank Trust.

Moreover, Cloward’s assertion that the note and mortgage were delivered to US Bank Trust on October 26, 2006, is inconsistent with the complaint, wherein US Bank Trust alleges that: (1) defendant Guy executed and delivered the note to Credit Suisse on October 26, 2006, and (2) the mortgage was “thereafter” assigned to US Bank Trust on October 4, 2011.

Plaintiff’s reliance on “an Allonge [to the note] which contains an endorsement in blank signed by the attorneys-in-fact for Credit Suisse” to establish US Bank Trust’s standing is misplaced. It is well-established that “[t]he note secured by the mortgage is a negotiable instrument (see UCC 3-104), which requires indorsement on the instrument itself or on a paper so firmly affixed thereto as to become a part thereof’ (UCC 3-202 [2]) in order to effectuate a valid assignment of the entire instrument” (Slutsky v Blooming Grove Inn, Inc., 147 AD2d 208, 212 [1989]). The five-page note at issue here is numbered “Page 1 of 5 Pages,” “Page 2 of 5 Pages,” “Page 3 of 5 Pages,” “Page 4 of 5 Pages,” and “Page 5 of 5 Pages.” Although there was sufficient space for an endorsement on the last page of the note, plaintiff submitted an “ALLONGE TO NOTE” on a separate unnumbered page, which is not firmly affixed to the promissory note, as is explicitly required under the UCC. In [*5]addition, the court notes that as the subject allonge is undated, there is no indication as to when such document was prepared.

Plaintiff’s contention that “defendant ratified plaintiff’s ownership and authority to modify the terms of the note and mortgage” when defendant accepted a HAMP modification is similarly unavailing. Plaintiff fails to support this assertion with any legal authority whatsoever, and ignores the fact that the mortgage was assigned to US Bank Trust on October 4, 2011, nearly one year after SPS claims to have modified defendant’s mortgage under HAMP in December 2010. Furthermore, defendant could not have ratified US Bank Trust’s ownership of the note upon acceptance of the HAMP modification if defendant never “receive[d] proper notice that any debt due to the original lender was ever assigned to the Plaintiff,” as the defense claims here.

Recognizing that US Bank Trust’s opposition to defendant’s motion was insufficient to establish prima facie standing, this Court issued the December 7th Order, granting defendant Guy’s motion to dismiss “unless … plaintiff provides sufficient and proper documentation to establish plaintiff’s standing in this case.” After this Court issued the December 7th Order, US Bank Trust timely submitted a sur-reply in further opposition to the motion, which consisted of another attorney affirmation and another affidavit from Cloward of SPS. For the reasons discussed below, plaintiff’s sur-reply submission, like its opposition papers, fail to establish plaintiff’s prima facie standing to maintain this action, as a matter of law.

(3)

The Court of Appeals has clearly stated that “[s]tanding to sue is critical to the proper functioning of the judicial system. It is a threshold issue. If standing is denied, the pathway to the courthouse is blocked. The plaintiff who has standing, however, may cross the threshold and seek judicial redress.” (Saratoga Co. Chamber of Commerce v Pataki, 100 NY2d 801, 812 [2003], cert denied 540 US 1017 [2003]). In Caprer v Nussbaum (36 AD3d 176, 181 [2006]), the Second Department held that “[s]tanding to sue requires an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant’s request.”

Under New York law, it is axiomatic that a plaintiff has standing to commence a mortgage foreclosure action “where it is both the holder or assignee of the subject mortgage and the holder or assignee of the underlying note at the time the action is commenced” (Homecomings Fin., LLC v Guldi, 108 AD3d 506, 2013 NY Slip Op 05048, *2 [July 3, 2013]). “An assignment of a mortgage without assignment of the underlying note or bond is a nullity, and no interest is acquired by it” (HSBC Bank USA v Hernandez, 92 AD3d 843, 843 [2012]; see also Kluge v Fugazy, 145 AD2d 537, 538 [1988] [holding that “foreclosure of a mortgage may not be brought by one who has no title to it and absent transfer of the debt, the assignment of the mortgage is a nullity”]).

In Homecomings (108 AD3d at 506), a factually analogous case, the Second Department recently reversed an order granting the plaintiff summary judgment because Homecomings failed to establish prima facie standing to foreclose. In that case, Homecomings failed to submit probative evidence that the note was physically delivered or duly assigned to it prior to commencement of the foreclosure action. Like plaintiff’s submissions in this case, the only proof of physical delivery of the note submitted by Homecomings was an affidavit from its servicing agent, claiming that the note was duly delivered to its “custodian of records.” The court held that an affidavit from plaintiff’s servicer regarding delivery to plaintiff’s custodian of records was “insufficient to demonstrate that the party commencing the action … had standing to do so at the time of the filing of the summons and complaint.” The court further held that the affidavit was “insufficient to establish that the plaintiff had physical possession of the note at any time” because it “did not give factual details as to the physical delivery of the note” (Id. at * 3).

Here, as in Homecomings, plaintiff’s submissions of attorney affirmations and affidavits from SPS, plaintiff’s alleged document custodian, fail to establish that the note was either assigned to US Bank Trust or was physically delivered to US Bank Trust prior to the commencement of this foreclosure action. Furthermore, Cloward’s affidavits, like those submitted in Homecoming, failed to provide any factual details regarding the physical delivery of the note to US Bank Trust and were [*6]not based on personal knowledge. Consequently, dismissal of this action is appropriate.

Finally, an award of attorneys fees to defendant is unwarranted here, since defendant has failed to identify any contractual provision entitling it to such an award. “The general rule is that [a]n attorney’s fee is merely an incident of litigation and is not recoverable absent a specific contractual provision or statutory authority'” (Gorman v Fowkes, 97AD3d 726, 727 [2012] [citations omitted]). Here, defendant’s request for an award of costs is similarly denied as unwarranted.

Accordingly, it is

ORDERED that the branch of defendant Guy’s motion to dismiss plaintiff’s complaint is granted; and it is further

ORDERED that the complaint against defendant Guy is dismissed with prejudice; and it is further

ORDERED that the branch of Guy’s motion for costs of this motion, including an award of counsel fees and expenses in the sum of three thousand dollars, is denied.

This constitutes the decision, order and judgment of the court.

E N T E R,

J. S. C.

Footnotes

Footnote 1:This court properly takes judicial notice of the mortgage recording documents on ACRIS (see Des Fosses v. Rastelli, 283 AD 1069, 1070 [1954] [“[t]his court has taken judicial notice of the deed in the foreclosure action from the Referee, to the respondents, dated April 6, 1953, and recorded April 15, 1953”).

Footnote 2:Defendant Guy’s three-page affidavit is included in, and considered on, this record, although the first two pages of the Guy affidavit were inadvertently omitted from defendant’s moving submission. Because the missing affidavit pages do not raise new factual issues, consideration of the affidavit in its entirety is not prejudicial to a fair adjudication of this motion.

Footnote 3:Plaintiff’s complaint alleges that “[o]n or about October 26, 2006, PAULA GUY executed and delivered to CREDIT SUISSE FINANCIAL CORPORATION, a certain note bearing date that day … .” There is no allegation in US Bank Trust’s complaint regarding the delivery of the note to US Bank Trust or to SPS on US Bank Trust’s behalf on October 26, 2006.

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Bernie Sanders: Angry, Disgusted, Frustrated

Bernie Sanders: Angry, Disgusted, Frustrated

Listen close to these explosive statistics! The Rich have become Richer!

 

 

Image: Yahoo

 

 

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Fannie Mae Servicing Guide Announcement SVC-2013-19 – Eliminations and Foreclosure Rescissions

Fannie Mae Servicing Guide Announcement SVC-2013-19 – Eliminations and Foreclosure Rescissions

Servicing Guide Announcement SVC-2013-19
September 18, 2013

Eliminations and Foreclosure Rescissions

Servicing Guide, Part VIII, Section 116: Notice of Property Acquisition

Effective immediately, Fannie Mae is establishing requirements for eliminations and rescissions of foreclosure sales, as defined below:

  •  Elimination: The process of removing a property from Fannie Mae’s real estate owned (REO) inventory system of record.
  •  Foreclosure Sale Rescission: The legal process of reversing a foreclosure sale and removing Fannie Mae as titleholder to the property.

There are circumstances in which a foreclosure sale rescission may not involve elimination. However, if an REOgram® has been submitted with an associated foreclosure sale, an elimination will also be necessary.

Examples of requests that would trigger one or the other action are shown below:

Examples of elimination only requests
Errors in REOgram submission
Third party sale – need to eliminate REOgram
REOgram sent in error (e.g., foreclosure sale did not occur)

Examples of elimination and rescission requests

Missing or defective assignment or endorsement
Foreclosure sale is legally invalid (other than a title or document issue)
Court ordered rescission (other than a title or document issue)
Bankruptcy filed before foreclosure sale
Fannie Mae-approved sale rescission

When the servicer identifies an issue that requires an elimination and/or rescission, the servicer must submit a request for elimination and/or rescission within five days of that identification. To submit a request for elimination and/or rescission, the servicer must complete and submit the Elimination/Rescission Request Template. The template will be posted on Fannie Mae’s website in the near future. The template can also be obtained by emailing elimination_requests@fanniemae.com and should be submitted to that same email address when completed.

[…]

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MUST WATCH!!!! HSBC Whistleblower Speaks, Uncovered Terrorist Financing

MUST WATCH!!!! HSBC Whistleblower Speaks, Uncovered Terrorist Financing

wearechange

Published on Sep 18, 2013

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U.S. Bank N.A. v Thomas | NYSC – ASC/Wells has failed to comply w[ith] federal HAMP guidelines, and failed to complete its modification review despite…

U.S. Bank N.A. v Thomas | NYSC – ASC/Wells has failed to comply w[ith] federal HAMP guidelines, and failed to complete its modification review despite…

Decided on July 5, 2013

Supreme Court, Kings County

 

U.S. Bank National Association, AS TRUSTEE FOR THE STRUCTURED ASSET INVESTMENT LOAN TRUST, 2005-6, Plaintiff(s),

against

Lydia R. Thomas, et al., Defendant(s).

7054/09

Plaintiff Attorney: Robin L. Muir, Esq., Hogan Lovells, US, LLP, 875 Third Avenue, New York, NY 10022

Defendant Attorney: Pavita Krishnaswamy, Esq., Brooklyn Legal Services, 105 Court Street, 4th Fl., Brooklyn, NY 11201

David I. Schmidt, J.

Upon the foregoing papers, defendant Lydia R. Thomas moves for an order, pursuant to 22 NYCRR § 202.44, confirming the report and recommendation of Referee Deborah Goldstein dated November 14, 2011.

Plaintiff U.S. Bank National Association, as Trustee for the Structured Asset Investment Loan Trust 2005-6 commenced this action to foreclose a mortgage executed by defendant on April 4, 2005. The mortgage secures an adjustable rate note in the amount of $260,000.00. Following a significant upward adjustment of the interest rate, defendant encountered difficulties making payments under the mortgage and note, resulting in a default in December 2008. According to defendant, in May 2009, the servicer for plaintiff, ASC/Wells, which was obligated to follow the guidelines of the Home Affordable Modification Program (HAMP), offered defendant a modification with terms that were significantly less favorable than those which would be required under HAMP. In June 2009, [*2]defendant sent correspondence to ASC/Wells wherein she rejected the modification offer on the basis that it was not affordable and further requested that she be reviewed for a modification under HAMP.

Pursuant to CPLR 3408, this matter action was referred to the Foreclosure Settlement Conference Part (FSCP) for mandatory settlement conferences. Several conferences were thereafter held beginning on August 6, 2009, with ASC/Wells represented by the law firm of Steven J. Baum, P.C. (Baum). According to the report of Referee Goldstein, defendant reported at the initial conference that she had previously submitted modification workout packages to ASC/Wells seeking a HAMP review, but rather than conducting a HAMP review, ASC/Wells reviewed defendant for an in-house modification, erroneously claiming that a borrower must specifically request to be reviewed under HAMP. In subsequent conferences, ASC/Wells requested more documents from defendant and an extension of time to conduct a HAMP review. Instead of completing a HAMP review, ASC/Wells offered defendant a forbearance agreement. The referee states in her report that when she inquired about the details of the modification review that was being conducted, it was discovered that ASC/Wells was using incorrect income information. The referee directed defendant to clarify the income issue by submitting an updated workout package.

At a conference held on March 8, 2010, the appearing attorney from Baum reported that defendant was denied under HAMP as the result of a negative Net Present Value (NPV). According to the referee, ASC/Wells failed to provide defendant with a denial letter specifically stating the basis for denial, along with the inputs used for the NPV test as required by HAMP guideline 09-08. Additionally, the Baum attorney was unable to reach a representative of ASC/Wells with authority to settle and who had knowledge of the HAMP review conducted.

In her report, the referee states that ASC/Wells requested an entirely new workout application from defendant as the result of ASC/Wells’ misplacement of documents and the fact that other documents previously submitted by defendant had become “stale.” The referee instructed defendant to resubmit and update the modification package and instructed Baum and ASC/Wells to expedite a new HAMP review. However, due to apparent law office failure, the modification package was not forwarded by Baum to ASC/Wells when the parties met for the next settlement conference on August 11, 2010. The referee directed Baum to escalate and expedite the HAMP review and to appear at the next settlement conference with the results.

A conference was subsequently held on October 21, 2010. According to the referee, the Baum attorney reported that the modification review was in “the final stages” and that ASC/Wells required no further documentation. Nonetheless, the failure of ASC/Wells to present at the conference a finalized modification, as it was instructed, prompted the referee to issue a directive stating the following:

“Plaintiff/ASC has failed to comply w[ith] federal HAMP guidelines, and failed to complete its modification review despite the fact that defendant [*3]submitted an application for loss mitigation back in 6/09. Although ASC escalated’ the review and conceded that all necessary documents were received from defendant, the review has not been completed. ASC is directed to complete its modification review and provide defense w[ith] a proposal for loss mitigation on or before 10/26/10.”

The referee further directed ASC/Wells “to appear in person by a knowledgeable and authorized representative on 10/26/10 to address the inexplicable delays and blatant failure to adhere to federal guidelines, the good faith requirements under CPLR 3408 amongst other things.”

Despite the directive, ASC/Wells appeared at the October 26, 2010 by Carol Orozco, who admitted that she lacked personal knowledge of the loan and the long history of the HAMP review. Moreover, the referee noted in her report that ASC/Wells failed to complete its HAMP review in accordance with its representations at the prior conference.

At the final settlement conference on November 19, 2010, the referee was advised that ASC/Wells hired the firm of Hogan Lovells to appear with Baum as co-counsel. The referee states in her report that the ASC/Wells attorneys did not address the prior delays in conferencing, but rather took the position that defendant was reviewed and denied under HAMP “a long time ago” for negative NPV. The referee stated that contrary to previous representations, ASC/Wells “had no intention of reviewing Defendant’s recently submitted workout submissions under HAMP or substantiating the basis for the prior NPV denial (that was based on the wrong income).” The referee further stated:

“Throughout the conferencing process, absolutely no progress was made toward the evaluation of Defendant Thomas for a loan modification or the resolution of this foreclosure action. The lack of progress is wholly attributable to the Foreclosing Parties’ dilatory conduct, which has wasted judicial time and resources, and has required Defendant to re-submit documents that were seemingly ignored. For several months, the Baum Law Firm and Servicer ASC/Wells stalled the modification review process by requesting additional and duplicative documents, while interest continued to accrue at the original annual percentage rate of 8.5%, which increased the payoff substantially.

Instead of conducting a timely review, the Foreclosing Parties and/or their counsel made several overlapping document demands; lost track of or failed to examine documents that Defendant submitted, resulting in duplicative requests; have allowed documents that were timely when submitted to become out-dated, thus providing a pretext for demanding multiple submissions of the same documents; denied Defendant’s applications for loss mitigation without complying with federal HAMP guideline 09-08; and have apparently made no effort to evaluate the fundamental financial information that Defendant submitted more than two years ago in order to determine an affordable monthly payment upon which a modification could be structured. This conduct – which would continue ad infinitum if not [*4]checked – demonstrates the Foreclosing Parties’ failure to participate in good faith in the foreclosure settlement conferencing process.

The Foreclosing Parties have prolonged and ultimately frustrated the workout process, inflated Defendant’s original loan, caused the defense to attend successive conferences during which Servicer ASC/Wells and the Baum Law Firm conducted a protracted modification review, and wasted significant judicial resources. Because the Foreclosing Parties come to this Court of equity with unclean hands, having failed to negotiate an affordable loan modification in good faith, or to comply with HAMP guidelines and this Referee’s directives, appropriate sanctions are recommended.”

The matter was thereafter referred to this Part, where additional conferences were held with the parties. Oral argument on the instant motion to confirm the referee’s report and recommendation was heard on April 4, 2013.

CPLR 3408, as amended in 2009, provides that “[b]oth the plaintiff and defendant shall negotiate in good faith to reach a mutually agreeable resolution, including a loan modification, if possible” (CPLR 3408 [f]). The procedures and rules for CPLR 3408 settlement conferences promulgated by the Chief Administrator of the Courts are set forth in 22 NYCRR 202.12—a. With regard to the obligation of the parties to negotiate in good faith imposed by CPLR 3408 (f), these rules provide,

“The parties shall engage in settlement discussions in good faith to reach a mutually agreeable resolution, including a loan modification if possible. The court shall ensure that each party fulfills its obligation to negotiate in good faith and shall see that conferences not be unduly delayed or subject to willful dilatory tactics so that the rights of both parties may be adjudicated in a timely manner” (22 NYCRR 202.12—a[c][4] ).

Courts have found that lenders failed to negotiate in good faith under varied circumstances. In Wells Fargo Bank, N.A. v Hughes (27 Misc 3d 628 [2010]), the court dismissed the subject foreclosure action without prejudice where the lender, contrary to the directives of the court, presented a modification proposal which included an adjustable rate component. “Bad faith” was found where, despite defendants making all required payments under a trial modification, plaintiff denied defendants’ request for a permanent modification based on their debt to income ratio without any evidence to support this determination (Wells Fargo Bank, N.A. v Meyers, 30 Misc 3d 697 [2010]). In the Meyers case, the court ordered that plaintiff execute a final modification based on the terms of the trial modification and dismissed the underlying foreclosure action. In Household Finance Realty Corporation of New York v Philbrick (Sup Ct, Chautauqua County, March 31, 2011, Dillon, J., index No. K1-2010-1354), the court dismissed the action where the lender refused to consider any settlement proposal unless the borrower paid forty percent of the arrears, which was clearly beyond her financial ability. [*5]

In BAC Home Loans Servicing v Westervelt (29 Misc 3d 1224[A], 2010 NY Slip Op 51992[U] [2010]), the court barred plaintiff from collecting certain arrears, interest and fees due to plaintiff’s default in appearing at a settlement conference, its failure to communicate with the referee, its refusal to re-examine defendan”s income pursuant to HAMP directives and its refusal to work toward a modification with a borrower who is gainfully employed. In One West Bank, FSB v Greenhut (36 Misc 3d 1205[A], 2012 NY Slip Op 51197[U] [2012]), the court assessed a $1,000.00 sanction against plaintiff, finding that plaintiff’s failure to produce at a settlement conference a representative with authority to fully dispose of the case demonstrated a failure to proceed in good faith.

In Emigrant Mortgage Co. Inc. v Corcione (28 Misc 3d 161 [2010]), plaintiff’s delay in responding to defendants’ entreaties toward resolution, plaintiff’s offer to defendant of a shockingly unconscionable loan modification agreement and plaintiff’s misrepresentations as to the amount of taxes it advanced, led the court to find that plaintiff failed to act in good faith. As a result, the court barred and prohibited collection of interest accrued, legal fees and expenses for a certain period, fixed principal at a certain amount and awarded exemplary damages of $100,000.00.

Recently, the Appellate Division, First Department advised that “[w]hile the aspirational goal of CPLR 3408 negotiations is that the parties reach a mutually agreeable resolution to help the defendant avoid losing his or her home’ (CPLR 3408 [a]), the statute requires only that the parties enter into and conduct negotiations in good faith (see subd [f]). . .there are situations in which the statutory goal is simply not financially feasible for either party” (Wells Fargo Bank, N.A. v Van Dyke, 101 AD3d 638, 638 [2012]). The court stated that “the mere fact that plaintiff refused to consider a reduction in principal or interest rate does not establish that it was not negotiating in good faith. Nothing in CPLR 3408 requires plaintiff to make the exact offer desired by defendants, and plaintiff’s failure to make that offer cannot be interpreted as a lack of good faith” (id.). Nonetheless, the court pronounced that “merely by proving the absence of fraud or malice on the part of the lender” does not establish compliance with the good faith requirement of CPLR 3408 and that “[a]ny determination of good faith must be based on the totality of the circumstances” (id. at 638-639).

On two occasions, the Appellate Division, Second Department determined that certain remedies, ordered by lower courts for violation of the good faith requirement of CPLR 3408, are not appropriate or authorized under the statute. In IndyMac Bank F.S.B. v Yano-Horoski, 78 AD3d 895 [2010], the court stated that “the severe sanction imposed by the Supreme Court of cancelling the mortgage and note was not authorized by any statute or rule, nor was the plaintiff given fair warning that such a sanction was even under consideration” (IndyMac Bank F.S.B., 78 AD3d at 896 [citation omitted]). Recently, in Wells Fargo Bank, N.A. v Meyers ( ___ AD3d ___ , 2013 NY Slip Op 03085), the court held that the lower court’s remedy of compelling the execution of a final modification based on the terms trial modification was unauthorized and inappropriate, as it had the effect of enforcing a contract [*6]to which the parties never freely agreed and deprived plaintiff of due process since it was not given notice that such remedy would be applied. While holding that the compulsion of a modification under the circumstances was beyond the scope of the court’s power under CPLR 3408, the court stated in conclusion:

“[I]t is beyond dispute that CPLR 3408 is silent as to sanctions or the remedy to be employed where a party violates its obligation to negotiate in good faith. In amending CPLR 3408 to add subdivision (f), the Legislature declined to authorize or set forth any particular sanction or penalty to impose upon a party found to have failed to satisfy its obligation under CPLR 3408(f) to negotiate in good faith. Unless the Legislature chooses to specify appropriate sanctions or remedies to be employed in such circumstances, the courts will continue to endeavor to enforce the mandate of CPLR 3408(f) as best they can in the absence of a sanctioning provision”

* * *

“In the absence of a specifically authorized sanction or remedy in the statutory scheme, the courts must employ appropriate, permissible, and authorized remedies, tailored to the circumstances of each given case. What may prove appropriate recourse in one case may be inappropriate or unauthorized under the circumstances presented in another.” Accordingly, in the absence of further guidance from the Legislature or the Chief Administrator of the Courts, the courts must prudently and carefully select among available and authorized remedies, tailoring their application to the circumstances of the case. (Wells Fargo Bank, N.A. v Meyers, ___ AD3d ___ , 2013 NY Slip Op 03085).

As a general rule, courts will not disturb the findings of a referee as long as they are substantially supported by the record and the referee has clearly defined the issues and resolved matters of credibility (Last Time Beverage Corp. v F & V Distribution Co., LLC, 98 AD3d 947, 950 [2012]). A referee’s credibility determinations are entitled to great weight because, as the trier of fact, he or she has the opportunity to see and hear the witnesses and to observe their demeanor (id.; see Galasso, Langione & Botter, LLP v Galasso, 89 AD3d 897, 898 [2011]). The record here supports the referee’s findings that ASC/Wells and its counsel did not negotiate in good faith from the outset of the conferences by, among other acts and omissions, their failure to follow HAMP directives, their needless delaying of the workout process, their misrepresentations that a modification offer would be finalized by certain times and their violation of the referee’s directive of October 21, 2010.

In its decision, the Meyers court noted that several courts, upon finding that foreclosing plaintiffs failed to negotiate in good faith, barred them from collecting interest, legal fees and expenses (see Bank of Am. N.A. v Lucido, 35 Misc 3d 1211[A], 2012 NY Slip Op 50655[U] [2012]; BAC Home Loans Servicing v Westervelt, 29 Misc 3d 1224[A], 2010 NY Slip Op 51992[U] [2010]; Emigrant Mtge. Co. Inc. v Corcione, 28 Misc 3d 161 [2010]; Wells Fargo Bank, N.A. v Hughes, 27 Misc 3d 628 [2010]). The Meyers court gave no clear indication as to whether such remedies were [*7]permissible or not, stating that “[w]hile we do not rule out the possibility of other permissible remedies, we conclude that the one employed here-imposition of the terms of the so-called original modification agreement proposed by the plaintiff and accepted by the defendants’. . . as the new, binding terms of the agreement between the defendants and Freddie Mac- was unauthorized and inappropriate” (Emphasis added). In addition to the aforesaid cases, there have been other instances where lower courts have cancelled interest as a remedy for a violation of CPLR 3408 (Wells Fargo Bank, N.A. v Ruggiero, 39 Misc 3d 1233[A], 2013 NY Slip Op 50871[U] [2013]; HSBC Bank USA, N.A. v McKenna, 37 Misc 3d 885 [2012]; U.S. Bank N.A. v Green, Sup Ct, Kings County, March 25, 2013, Kurtz, J., index No. 9220/09).

The primary argument of plaintiff against the cancellation of interest is that the court does not have the authority to alter the contractual rights of the parties, particularly in light the Meyers. However, the Meyers court, while holding that a court cannot compel a plaintiff to offer a modification with specific terms, did not explicitly hold that cancellation or tolling of interest cannot constitute an appropriate remedy under certain circumstances. The instant action for foreclosure is equitable in nature (see Notey v Darien Constr. Corp., 41 NY2d 1055 [1977]; Mtge. Elec. Registration Sys., Inc. v Horkan, 68 AD3d 948 [ 2009] ). “Once equity is invoked, the court’s power is as broad as equity and justice require” (Mtge. Elec. Registration Sys., Inc, 68 AD3d at 948, quoting Norstar Bank v Morabito, 201 AD2d 545 [1994]). “In an action of an equitable nature, the recovery of interest is within the court’s discretion” (Dayan v York, 51 AD3d 964, 965 [2008]; see CPLR 5001 [a]; Deutsche Bank Trust Co., Ams. v Stathakis, 90 AD3d 983, 984 [2011]). In an appropriate case, equity requires the cancellation of any interest awarded on the unpaid principal balance of the mortgage (Norwest Bank Minn., NA v E.M.V. Realty Corp., 94 AD3d 835 [2012]). Insofar as the lack of good faith of plaintiff’s servicer resulted in the accumulation of interest during the protracted period of settlement negotiations, the court finds that the cancellation of interest and late fees on the principal balance of the mortgage from August 9, 2009, as recommended by the referee, is the appropriate sanction. In fact, it has been expressed by defendant’s counsel during conferences with this court that such reduction of the indebtedness may result in a feasible modification under recent amendments to HAMP income requirements. Such a result would clearly serve the salutary purpose of CPLR 3408, which is to help defaulting mortgagors remain in their homes.

Of course, there may be a time when the Appellate Division directly addresses the issue of whether cancellation of interest is an authorized and appropriate under CPLR 3408, or when the Legislature or Chief Administrator of the Courts chooses to specify appropriate sanctions or remedies, which may or may not include the cancellation of interest. If plaintiff so elects, this court will issue an order staying this action until such time as the issue is settled. Otherwise, defendant’s motion is granted to the extent that the report and recommendation of the referee is confirmed and that all interest and late fees on the underlying indebtedness are forfeited from August 6, 2009 until the date the parties agree to a modification.

The foregoing constitutes the decision and order of the court.

E N T E R,

J. S. C. [*8]

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Letter | FL AG Bondi Reminds Courts of the Foreclosure Fraud Settlement

Letter | FL AG Bondi Reminds Courts of the Foreclosure Fraud Settlement

Think about how you can utilize this in your foreclosure? Give a copy to your attorney? I don’t know?

 

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



Posted in STOP FORECLOSURE FRAUD1 Comment

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