FOR THE FOURTH CIRCUIT
JAMES P. SCHEIDER, JR.; TAFFY G. SCHEIDER
Plaintiffs – Appellants
DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee of the IndyMac
INDA Mortgage Loan 2006-AR2 Mortgage Pass-through Certificates, Series 2006-
AR2 under the Pooling and Servicing Agreement dated August 1, 2006;
INDYMAC MORTGAGE SERVICES; MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INCORPORATED; ONEWEST BANK, F.S.B.;
FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF CHARLESTON
Defendants – Appellees
INDYMAC BANK FEDERAL BANK; MERS, INCORPORATED; MORTGAGE
NETWORK INCORPORATED; INTERNAL REVENUE SERVICE; JOHN DOE
1-1000, inclusive, representing a class of unknown persons who claim or have the
right to claim an interest in certain real property located in Beaufort County, South
Carolina; INDYMAC MBS INCORPORATED
NEW YORK STATE COURT OF APPEALS
. . .
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Pursuant to Article VI Section 3(b)(9) of the New York State Constitution, the Plaintiffs-
Appellants, James P. Scheider, Jr. and TaffY G. Scheider (hereinafter referred to as “Appellants”)
hereby move before this Court for an Order certifying the following questions to the New York
State Court of Appeals.
1. Do Appellants have standing to challenge Appellee, Deutsche National Bank
Trust Company’s (hereinafter referred to as “Deutsche Bank”) failure to honor the
specific delivery, time sensitive, and transfer requirements for notes and mortgages under
the applicable Pooling and Servicing Agreement (hereinafter referred to as “PSA”), the
governing document for the trust supposedly holding Appellants’ note and mortgage?
2. Does New York law control the enforceability of Appellants’ note and mortgage?
3. Did the delivery and transfer of the Appellants’ note to Appellee, Deutsche Bank,
as trustee, after the trust’s closing date render this transfer “void” as opposed to
4. Did the assignment of the Appellants’ mortgage after the commencement of this
action and contrary to the mandates of 26 U.S.C. Section 860D, render this assignment
“void” as opposed to “voidable”?
5. Do Appellants have standing to challenge their loan with Mortgage Electronic
Registrations Systems, Inc. (hereinafter referred to as “MERS”),
6. Do Appellants have standing to challenge the securitization of their mortgage?
Appellants respectfully submit that these issues will be determinative of the pending
Appeal, may be determinative of the entire action, and have not been decided by the New York
State Court of Appeals, the jurisdiction of the controlling law.
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THE EVILS OF SECURITIZATION UNDERLIE THE CASE AT BAR
NEW YORK LAW GOVERNS THE TRANSFERS OF THE APPELLANTS’ NOTE AND
APPELLANTS’ HAVE STANDING TO CHALLENGE APPELLEES
NON-COMPLIANCE WITH THE PSA
. . .
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COURT ORDER OF APRIL 11, 2013 AND SUBSEQUENT CASE LAW TO THE
On April 11, 2013, the District Court dismissed the Appellants’ Complaint and their
argument with regard to standing. While the Court recognized the case of Bank of America, NA.
v. Bassman FBT, LLC, supra., which for the most part advanced Appellants’ arguments, the
District Court adopted the Bassman Court’s finding that a transfer in contravention of n trust’s
tenns is voidable rather than void. A New York court has subsequently spoken with regard to
this issue. New York law controls the governing PSA (Exhibit “22″, Section 10.03).
In the case of Wells Fargo Bank, NA. v Erobobo, supra., (a copy of said decision is
attached hereto and marked as Exhibit “23″), Judge Wayne P. Saitta of the New York Supreme
County for Kings County reasoned as follows…..
. . .
Even though the Erobobo case is relatively recent, having been decided on April 29,
2013, it has already been cited with approval and its reasoning is being followed.
In the case of Saldivar v. JPMorgan Chase Bank, NA., et al., United States Bankruptcy
Court, Case No. 11-10689 (S.D. Texas June 5, 2013) (a copy of which is attached hereto and
marked as Exhibit “24″), the Defendants moved to dismiss the Plaintiffs’ complaint on the basis
that the Plaintiffs lacked standing to challenge the validity of the assignment of their mortgage to
a securitized trust. The Plaintiffs alleged that the note was not timely transferred into the trust in
accordance with the governing PSA. The court reasoned as follows….
Again in Hendricks v. US Bank National Association, as Successor Trustee to Bank of
America, et aI., State of Michigan Washtenaw County Trial Court, Case No. 10-849-CH. (a copy
of which is annexed hereto and marked as Exhibit “25″), the Court held that because the
Defendants failed to strictly comply with the terms of the governing PSA, the loan at issue in that
case was not properly transferred to the trust. Consequently, New York Trust Law rendered the
conveyance of the note and mortgage a nullity. Then, on June 20, 2013, the United States
District Court for the Southern District of Texas in the case of Ortiz v. CitiMortgage, Inc., 2013
U.S. Dist. LEXIS 86484, ( a copy of which is annexed hereto as Exhibit “26″), decided that a
debtor has standing to challenge the validity of a note based on a gap in the chain of title – much
like the Appellee, Deutsche Bank’s failure, in the case of bar, to adhere to the chain of
endorsements of the note required by the governing PSA.
Most recently, on July 31, 2013, the California Court of Appeals recently decided the
case of Glaski v Bank of America, National Association, 218 Cal. App. 41h 1079, Cal. Rptr. 3d
(Cal. Ct. App. July 31,2013). The Appellants in that case argued that the foreclosing bank was
not the true owner of the land because its chain of ownership had been broken by a defective
transfer of the loan to the securitized trust established for the mortgage backed securities. This
specific defect alleged that the attempted transfers were made after the closing date of the
securitized trust and therefore the transfers were ineffective and void. Citing with approval both
the Erobobo and Saldivar cases, the Court held….
. . .
Appeal: 13-1821 Doc: 23-1 Filed: 10/21/2013Pg: 19 of 21 Total Pages: (2 of 1019)
GROUNDS FOR CERTIFICATION
It is imperative that the New York State Court of Appeals determine whether Appellants
have standing to challenge the Appellees’ non-compliance with the applicable pooling and
servicing agreement. There is obviously a difference of opinion on this issue which has far
reaching consequences for the homeowners of this state. The decisions of the District Court in
this case were based on a then existing line of cases. Since those decisions, the legal landscape
has changed dramatically.
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