Bank of Am., NA v. LAM | NYSC - did not establish that the Note was physically delivered to Bank of America prior to the commencement of the action

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Bank of Am., NA v. LAM | NYSC – did not establish that the Note was physically delivered to Bank of America prior to the commencement of the action

Bank of Am., NA v. LAM | NYSC – did not establish that the Note was physically delivered to Bank of America prior to the commencement of the action

2013 NY Slip Op 33406(U)
 

 

BANK OF AMERICA NATIONAL ASSOCIATION AS SUCCESSOR BY MERGER TO LASALLE BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR MORGAN STANLEY LOAN TRUST 2006-2 3476 Stateview Boulevard Ft. Mill, SC 29715, Plaintiff,
v.
CHAU T. LAM, YAH RONG TING, ALAN CHILUNG WONG A/K/A ALAN CHI LUNG WONG, ADAMAR OF NEW JERSEY INC., BOARD OF MANAGERS OF EIGHT EAST TWELFTH CONDOMINIUM, HSBC BANK USA, NEW YORK CITY ENVIRONMENTAL CONTROL BOARD, NEW YORK CITY PARKING VIOLATIONS BUREAU, NEW YORK CITY TRANSIT ADJUDICATION BUREAU, JOHN DOE (said name being fictitious, it being the intention of Plaintiff to designate any and all occupants of premises being foreclosed herein, and any parties, corporations or entities, if any, having or claiming an interest or lien upon the mortgaged premises, Defendants.

 

Docket No. 0115035/2009, Motion Seq. No. 007.
 

Supreme Court, New York County.
 

December 6, 2013.
 

Filed December 9, 2013.
 

ALICE SCHLESINGER, Judge.

 

It is ordered that this motion and cross-motion are determined in accordance with the accompanying memorandum decision.

 

This is an action to foreclose a mortgage on a condominium apartment located at 8 East 12th Street, Unit # 2, New York, New York 10003. Plaintiff Bank of America National Association, as successor by merger to LaSalle Bank National Association, as Trustee for Morgan Stanley Loan Trust 2006-2 moves, pursuant to CPLR 3212, for summary judgment of foreclosure and sale, and for dismissal of the defenses asserted in the answers of defendants Chau T. Lam (“Lam”), Yah Rong Ting (“Ting”) and the Board of Managers of Eight East Twelfth Condominium (“Board of Managers”), pursuant to CPLR 3211(b). Plaintiff also requests the following additional relief: (I) that all answering defendants’ cross claims be severed or that the cross claims be ordered separately tried pursuant to CPLR 603; (ii) that “John Doe” be dropped as a party defendant in this action; (iii) that plaintiffs name be amended to reflect the succession of Bank America National Association (“Bank of America”) by U.S. Bank National Association (“U.S. Bank”) as trustee, and that the caption be amended accordingly; (iv) that the address of the plaintiff be deleted from the caption, and the caption be amended accordingly; (v) that all non-appearing defendants “be deemed in default, and the defaults fixed and determined; and (vi) “for such other and further relief as to the Court may deem just and proper.” Notice of Motion, at 2.

 

Defendants Lam and Alan Chi-Lung Wong a/k/a Alan Chi Lung Wong (“Wong”) cross-move, pursuant to CPLR 3212, for summary judgment dismissing plaintiff’s complaint with prejudice on the ground that plaintiff lacks standing. Defendant Ting, by way of her attorney’s affirmation, supports the plaintiff’s motion and the Board of Managers, too, offers no opposition to the motion.

 

FACTUAL ALLEGATIONS

 

On September 1, 2005, defendant Lam borrowed $900,000 from nonparty Lynx Mortgage Bank LLC (“Lynx”). The loan was evidenced by a promissory note (the “Note”) signed by Lam, and secured by a mortgage on the condominium, also dated September 1, 2005 (the “Mortgage”). The Mortgage was executed by Lam, and her husband, defendant Wong. Defendant Ting, who is alleged to be a 50% owner of the condominium apartment,[1] is also a signatory.

 

In support of plaintiffs motion, plaintiff submits an Assignment of Mortgage that is dated October 6, 2009 (the “Assignment”). This document purports to assign the Mortgage to plaintiff. Weinert Affirm., Ex. E. The Assignment identifies the assignor as the Mortgage Electronic Registration Systems, Inc. (“MERS”), as nominee for Lynx. In this regard, the Mortgage provides in a section entitled “Borrower’s Transfer to Lender of Rights in the Property”:

 

“I mortgage, grant and convey the Property to MERS (solely as nominee for Lender and Lender’s successors in interest) and its successors in interest subject to the terms of this Security Instrument. This means that, by signing this Security Instrument, I am giving Lender those rights that are stated in this Security Instrument and also those rights that Applicable Law gives to lenders who hold mortgage on real property. I am giving Lender these rights to protect Lender from possible losses that might result if I fail to [comply with certain obligations under the Security Instrument and accompanying Note.]

 

I understand and agree that MERS holds only legal title to the rights granted by me in this Security Instrument, but, if necessary to comply with law or custom, MERS (as nominee for Lender and Lender’s successors and assigns) has the right:

 

(A) To exercise any or all of those rights, including, but not limited to, the right to foreclose and sell the Property; and

 

(B) To take any action required of Lender including, but not limited to, releasing and canceling this Security Instrument.”

 

Weinert Affirm., Ex. D: Mortgage, at 3. The Assignment is executed by Elpiniki M. Bechaka, identified as an assistant secretary and vice president of MERS.

 

Plaintiff also submits an affidavit of merit from Laresea T. Jett sworn to on May 24, 2013. Ms. Jett avers that she is:

 

“Vice President Loan Documentation of Wells Fargo Bank, N.A. DBA America’s Servicing Company, (hereinafter “Wells Fargo”) the servicer for U.S. Bank National Association, as Trustee, successor in interest to Bank of America, National Association, as Trustee, successor by merger to LaSalle Bank National Association, as Trustee for Morgan Stanley Mortgage Loan Trust 2006-2, Mortgage Pass-Through Certificates, Series 2006.”

 

Jett Aff., ¶ 1. Ms. Jett avers that “Plaintiff is the mortgagee of record and was in possession of the note prior to the commencement of this action.” Id., ¶ 3. She then contends that

 

“U.S. Bank National Association, As Trustee, successor in interest to Bank of America, National Association, as Trustee successor by merger to LaSalle Bank National Association, as Trustee for Morgan Stanley Mortgage Loan Trust 2006-2, Mortgage Pass-Through Certificates, Series 2006-2 is in possession of the Promissory Note. The Promissory Note was executed in blank.”

 

Id., ¶ 3. Thus, according to Ms. Jett, the trustee of the entity that owns the Mortgage and Note changed from LaSalle Bank National Association, to Bank of America as a result of a merger, and then to U.S. Bank at some time after this action was commenced. Plaintiff’s counsel submits a copy of an affidavit sworn to in April 2012, both by a vice-president of Bank of America and a vice-president of U.S. Bank, who aver that substantially all of Bank of America’s corporate trust business was sold to US Bank pursuant to a purchase agreement dated November 11, 2010. See Weinert Affirm., Ex. R. According to the Schedule A attached thereto, one of the assets sold to U.S. Bank was the “Morgan Stanley Mtg Loan Trust 2006-2,” with a succession date of June 10, 2011. Id. Plaintiff requests that the caption be amended to reflect that U.S. Bank is now the trustee of this mortgage-backed security.

 

Ms. Jett avers that, from her review of the records kept by Wells Fargo, defendants defaulted on the loan by failing to make the payment due on June 1, 2009. As of the date of the complaint, there was due and owing an unpaid principal balance of $856,079.00, plus interest at the rate of 5.75% from May 1, 2009. As of May 23, 2013, Ms. Jett avers that the loan remains in default and that the total amount due plaintiff on the Note is $1,107,596.48. Jett Aff., ¶¶ 8-9.

 

This action was commenced by plaintiff on October 26, 2009. The unverified complaint alleges that “Plaintiff is . . . the owner and holder of a note and mortgage being foreclosed.” Complaint, ¶ First. Defendant Lam, appearing pro se, answered the complaint on or about November 27, 2009, contending, inter alia, that plaintiff lacked standing to bring the action. Defendant Wong, also appearing pro se, served an answer to the complaint on November 16, 2009 and filed his answer with the County Clerk on December 7, 2009. Wong’s answer is identical to the answer filed by Lam, and thus he, too, has raised plaintiffs lack of standing as an affirmative defense. The settlement conference required by CPLR 3408 was held by the court on May 5, 2010. On or about December 15, 2011, a new law firm was substituted as counsel for plaintiff in place and stead of Stephen J. Baum, P.C. (the Baum firm), the law firm that commenced the action.

 

DISCUSSION

 

Wong’s Alleged Default

 

As an initial matter, I deny plaintiffs motion to the extent that it seeks a default judgment against defendant Wong. This defendant served and filed his answer to the complaint back in 2009, and a copy of that pleading is easily found on SCROLL (“The Supreme Court Records On-Line Library”). On reply, plaintiffs counsel explains that Wong’s answer was not in the file transmitted from prior counsel, the Baum firm, but argues that since his answer is identical to the answer filed by defendant Lam and he is now represented by an attorney who has briefed the merits of plaintiffs summary judgment motion, plaintiff’s motion should be treated as one for summary judgment against both Lam and Wong.

 

It is well settled that a movant cannot introduce new arguments in support of, or new grounds for relief, in reply papers (Schultz v 400 Coop. Corp., 292 AD2d 16, 21-22 [1st Dep’t 2002]), and it is equally well settled that a notice of motion must specify the relief demanded (CPLR 2214[a]). However, where a notice of motion contains a general relief clause, i.e., “for such other and further relief as the Court may deem just and proper,” as is the case herein, the court has discretion “to grant relief that is not too dramatically unlike that which is actually sought, as long as the relief is supported by proof in the papers and the court is satisfied that no party is prejudiced.” Tirado v Miller, 75 AD3d 153, 158 (2nd Dep’t 2010).

 

The relief sought herein is foreclosure, and I find that there is no prejudice to Wong if I treat the plaintiffs motion as seeking summary judgment pursuant to CPLR 3212. Wong and Lam are now both represented by legal counsel who has thoroughly briefed their defenses and defense counsel has cross-moved, on behalf of both defendants, for dismissal of the complaint for lack of standing.

 

Plaintiffs Standing

 

In opposition to this motion, defendant Lam submits an affidavit in which she contends that plaintiff has not submitted any evidence demonstrating that it held the Note and Mortgage at the time this action was commenced on October 26, 2009. Defendant Lam further contends that Elpiniki M. Bechaka, the person who executed the Assignment from Lynx to plaintiff on October 6, 2009, is or was an attorney with the Baum firm and is a “robosigner,”[2] and that less than one month after the Mortgage was assigned, her law firm commenced this foreclosure action. Wong, too, asserts plaintiff’s lack of standing as a defense to this action. Counsel for defendants Lam and Wong argue that, although the Assignment purports to assign the Mortgage, it does not assign the Note. He further points out that: (1) no copy of the Note was attached to the complaint at the time the action was commenced; (2) the signature of the Lynx representative who endorsed the Note in blank is illegible and undated; (3) the Jett affidavit claims that plaintiff was in possession of the Note prior to the commencement of this action, but Ms. Jett does not explain when or how Bank of America came into possession of the Note; (4) Ms. Jett is an employee of Wells Fargo, and plaintiff has not established that Wells Fargo has authority to act on behalf of the plaintiff in this case; and (5) none of the documents allegedly relied upon by Ms. Jett are attached as exhibits to plaintiff’s motion.

 

Where standing is put into issue by a defendant, the plaintiff must prove its standing in order to be entitled to relief. See US Bank N.A. v Madero, 80 AD3d 751, 752 (2nd Dep’t 2011); U.S. Bank, N.A. v Collymore, 68 AD3d 752, 753 (2nd Dep’t 2009); Wells Fargo Bank Minn., N.A. v Mastropaolo, 42 AD3d 239, 242 (2nd Dep’t 2007). “`In a mortgage foreclosure action, 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.'” Homecomings Fin., LLC v Guldi, 108 AD3d 506, 507-508 (2nd Dep’t 2013), quoting Bank of N.Y. v Silverberg, 86 AD3d 274, 279 (2nd Dep’t 2011); see also Bank of N.Y. Mellon Trust Co. NA v Sachar, 95 AD3d 695, 695 (1st Dep’t 2012). “`Either a written assignment of the underlying note or the physical delivery of the note prior to the commencement of the foreclosure action is sufficient to transfer the obligation.'” HSBC Bank USA v Hernandez, 92 AD3d 843, 844 (2nd Dep’t 2012), quoting U.S. Bank, N.A. v Collymore, 68 AD3d at 754.[3]

 

Assignment of the Mortgage

 

Defendants Lam and Wong attack the validity of the Assignment of the Mortgage on two grounds. First, defendants argue that where the plaintiff in a foreclosure action receives its interest in the mortgage from MERS acting as the “nominee” of the original lender, plaintiff must submit documents showing that the original lender consented to the assignment of the mortgage. Defendants rely on Bank of N.Y. v Cepeda, 39 Misc 3d 1221(A), 2013 NY Slip Op 50686(U) (Sup Ct, Kings County 2013) (Schack, J.); Bank of N.Y. v Mulligan, 28 Misc 3d 1226(A), 2010 NY Slip Op 51509(U) (Sup Ct, Kings County 2010) (Schack, J.); Bank of N.Y. v Alderazi, 28 Misc 3d 376 (Sup Ct, Kings County 2010) (Saitta, J.); HSBC Bank USA, N.A. v Yeasmin, 27 Misc 3d 1227(A), 2010 NY Slip Op 50927(U) (Sup Ct, Kings County 2010) (Schack, J.). The gist of these decisions is that, as a mere nominee, MERS possesses few or no legally enforceable rights beyond what its principal, the lender, gives it and that the language of the mortgages at issue therein were not sufficient to bestow any authority on MERS to assign the mortgage.

Notably, defense counsel does not cite to US Bank N.A. v Flynn, 27 Misc 3d 802 (Sup Ct, Suffolk County 2010) (Whelan, J.), which reached a contrary result. In the Flynn case, the bank had successfully argued that the language of the mortgage indenture itself, which names MERS as mortgagee of record and nominee of the lender, its successors and assigns, and confers upon it broad authority to act with respect to the mortgage in all ways that the original lender, its successors and assigns could act, including the right to foreclose, and to take any action required of the lender, including, but not limited, to releasing or discharging the mortgage, was sufficient to confer authority upon MERS to effect a valid assignment of the mortgage. Both the First and Second Departments have adopted this reasoning, and rejected the argument that MERS lacks authority to assign a mortgage.

In Bank of New York v Silverberg, 86 AD3d 274, the Second Department specifically recognized that a mortgage consolidation agreement, identical in all respects to the Mortgage at issue herein, “gave MERS the right to assign the mortgages themselves.” Id. at 281. The borrowers had argued in that case that MERS could not assign the consolidated mortgage, because the clauses in the mortgages delegating to MERS the powers to act as the original lender’s nominee had no force and effect without a power of attorney from the original lender to MERS. Brief for Plaintiff-Respondent in Bank of N. Y. v Silverberg, available at 2010 WL 9583720, at *12. The bank, however, argued that the underlying mortgages specifically provided in the section titled “Borrower’s Transfer To Lender Of Rights in The Property” that MERS, as the original lender’s nominee, had the right “to exercise any and all of those rights, including, but not limited to, the right to foreclose and sell the Property.” The bank further argued that the borrowers had granted the lender “those rights that are stated in this Security Instrument,” and that one of these rights, set forth in paragraph 20 of the mortgage, was that the “Note, or an Interest in the Note, together with this Security Instrument, may be sold one or more times.” Thus, the bank argued that MERS was expressly authorized to sell or transfer the mortgages, as it did pursuant to the written assignment it executed. Id., at *12-13. The First Department has also ruled that where the mortgage contract confers broad powers upon MERS as nominee to act on the original lender’s behalf, MERS has the authority to assign the mortgage. See Bank of N. Y. Mellon Trust Co. NA v Sachar, 95 AD3d at 696.

The Mortgage at issue herein is the same “Fannie Mae/Freddie Mac Uniform Security Instrument” at issue in the Silverberg and Sachar cases and contains the same paragraph 20, which provides that the “Note, or an Interest in the Note, together with this Security Instrument, may be sold one or more times.” See Weinert Affirm., Ex. D: Mortgage, ¶ 20, at 12. Accordingly, I reject the argument that plaintiff must submit documents showing that Lynx specifically consented to the Assignment.

Defendants Lam and Wong also argue that plaintiff should be barred from relying on the Assignment, because the Baum firm, through its employee Ms. Bechakas, served as both assignor of the Mortgage and plaintiffs counsel at the commencement of this action, and that this presents an impermissible conflict of interest. Defendants rely on U.S. Bank, N.A. v Guichardo, 22 Misc 3d 1116(A), 2009 NY Slip Op 50151(U) (Sup Ct, Kings County 2009) (Schack, J.) and Bank of N.Y. Mellon v Martinez, 33 Misc 3d 1215 (A), 2011 NY Slip Op 51937(U) (Sup Ct, Queens County 2011) (Flug, J.).

In the Guichardo case, Justice Schack merely required the Baum firm to submit proof that the bank and MERS consented to the simultaneous representation, and his later sua sponte dismissal of the foreclosure action was reversed by the Appellate Division. See U.S. Bank, N.A. v Guichardo, 90 AD3d 1032 (2nd Dep’t 2001). In the Martinez case, Justice Flug held only that:

“These actions undoubtedly raise the appearance of impropriety. Indeed, these practices were the subject of the October 6, 2011 settlement agreement between Steven J. Baum and the United States Attorney’s Office for the Southern District of New York. Nevertheless, defendant has failed to establish that these actions breached a specific duty to plaintiff and require a dismissal of the action as a matter of law.”

33 Misc 3d 1215(a) at 2. In response to this challenge to the Assignment, plaintiff submits a copy of Opinion 847, dated December 21, 2010, issued by the New York State Bar Association’s Committee on Professional Ethics, which reached the conclusion that a lawyer may concurrently serve as an officer of MERS, for the purpose of executing a mortgage assignment to the beneficial owner and prosecuting a mortgage foreclosure action in the assignee’s name. See Bundt Affirm., Ex. J. Plaintiff has presented documentary proof that Ms. Bechakas held the position of assistant secretary and vice president of MERS as of July 19, 2007, and was authorized to execute mortgage assignments on behalf of MERS. Bundt Affirm., Ex. I. In any event, since the Baum firm no longer represents the plaintiff, any conflict of interest no longer exists, and I find that this is not an independent basis to hold the Assignment invalid.

Ownership of the Note

Although I am not persuaded by the defendants’ challenges to the Assignment, plaintiff has not proved that it owned the Note at the time this action was commenced. Although the Mortgage was properly assigned by MERS as the nominee of the original mortgagee, Lynx, to Bank of America, the transfer of a mortgage without a note is a nullity and insufficient to confer standing to foreclose. U.S. Bank N.A. v Dellarmo, 94 AD3d 746, 748 (2nd Dep’t 2012); Deutsche Bank Natl. Trust Co. v Barnett, 88 AD3d 636, 637 (2nd Dep’t 2011); Bank of N.Y. v Silverberg, 86 AD3d at 280. Here, MERS purportedly assigned the Mortgage to Bank of America without the Note. See Weinert Affirm., Ex. E.

Plaintiff argues that it acquired standing based upon a physical transfer of the indorsed Note prior to the commencement of the action. This claim is based entirely on the Jett affidavit, which states that plaintiff “was in possession of the note prior to the commencement of this action.” Jett Aff., ¶ 3. The Appellate Division has held that the affidavit of the plaintiff’s servicing agent must give “factual details as to the physical delivery of the note.” Homecomings Fin., LLC v Guldi, 108 AD3d at 509, citing Deutsche Bank Natl. Trust Co. v Haller, 100 AD3d 680, 682 (2nd Dep’t 2012); HSBC Bank USA v Hernandez, 92 AD3d at 844; Aurora Loan Servs., LLC v Weisblum, 85 AD3d 95, 109 (2nd Dep’t 2011) (conclusory statement by loan servicing officer that his company was the holder of the mortgage by delivery without a written assignment was insufficient to establish standing to commence action).

In addition to the lack of any detail, the affiant, Laresea Jett, does not purport to have any personal knowledge of the delivery of the Note to Bank of America. Nor does she attach or describe any of Wells Fargo’s books and records upon which she relies. “Where an officer’s knowledge has been obtained either from unnamed, and unsworn employees or unidentified and unproduced work records, the affidavit lacks any probative value . . .” Dempsey v Intercontinental Hotel Corp., 126 AD2d 477, 479 (1st Dep’t 1987). What makes matters worse is that Ms. Jett admits that her affidavit is based, in part, on the unverified complaint drafted by the Baum firm.

In addition, Ms. Jett is an employee of nonparty Wells Fargo, and no proof of its authority to act on behalf of the plaintiff was submitted with plaintiff’s moving papers. Even plaintiff’s counsel admits, on reply, that an affidavit of merit must be executed either by an officer of the plaintiff or a person with a valid power of attorney. Plaintiff attempts to rectify this omission by submitting a document entitled “Limited Power of Attorney,” executed by Bank of America on August 27, 2009, and purporting to name Wells Fargo as its loan servicer. However, the power itself states that it is “given pursuant to a certain Servicing Agreement and solely with respect to the assets serviced pursuant to such an agreement . . . dated July 1, 2006. . . .” Bundt Affirm., Ex. L. Plaintiff has not submitted a copy of this Servicing Agreement nor established that the Note and Mortgage at issue in this lawsuit are serviced pursuant to this agreement.

Accordingly, I find that plaintiff failed to demonstrate its prima facie entitlement to judgment as a matter of law, because it did not establish that the Note was physically delivered to Bank of America prior to the commencement of the action. An issue of fact exists as to who was in possession of the Note on October 26, 2009, which cannot be resolved on these papers. Accordingly, plaintiff’s motion for summary judgment must be denied, and the cross motion of defendants Lam and Wong also denied since the latter have not proven, as a matter of law, that plaintiff lacks standing. Deutsche Bank Natl. Trust Co. v Spanos, 102 AD3d 909, 912 (2nd Dep’t 2013); Deutsche Bank Natl. Trust Co. v Haller, 100 AD3d at 683-684; HSBC Bank USA v Hernandez, 92 AD3d at 844; US Bank N.A. v Madero, 80 AD3d at 753; but see Homecomings Fin., LLC v Guldi,

CONCLUSION and ORDER

For the foregoing reasons, plaintiff’s motion for summary judgment of foreclosure and sale against defendants Lam, Wong and Ting is denied, as is the plaintiff’s initial request for a declaration that defendant Wong is in default. That portion of plaintiff’s motion requesting that “John Doe” be dropped as a party defendant in this action, that plaintiff’s name be amended to reflect the succession of U.S. Bank, as trustee, for Bank of America, that the address of the plaintiff be deleted from the caption, and the caption be amended accordingly, is granted without opposition. The remaining portion of the plaintiff’s motion seeking to declare all non-appearing defendants in default is also granted, without opposition. The cross motion of defendants Lam and Wong for dismissal of the complaint based on plaintiff’s lack of standing is denied. Thus, it is hereby

ORDERED that plaintiff’s motion for summary judgment of foreclosure and sale is denied; and it is further

ORDERED that plaintiff’s motion to amend the caption is granted, and that the caption shall now read as follows:

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, SUCCESSOR IN INTEREST TO BANK OF AMERICA, NATIONAL ASSOCIATION, AS TRUSTEE, SUCCESSOR BY MERGER TO LASALLE BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR MORGAN STANLEY LOAN TRUST 2006-2, Plaintiff, – against – Index No. 115035/09 CHAU T. LAM, YAH RONG TING, ALAN CHLUNG WONG A/K/A ALAN CHI LUNG WONG, ADAMAR OF NEW JERSEY INC., BOARD OF MANAGERS OF EIGHT EAST TWELFTH CONDOMINIUM, HSBC BANK USA, NEW YORK CITY ENVIRONMENTAL CONTROL BOARD, NEW YORK CITY PARKING VIOLATIONS BUREAU, and NEW YORK CITY TRANSIT ADJUDICATION BUREAU, Defendants.

;and it is further

ORDERED that plaintiffs counsel shall serve a copy of this order with notice of entry on the Trial Support Office and the County Clerk, who are directed to mark the court’s records to reflect the change in the caption herein; and it is further

ORDERED that plaintiffs motion to declare all non-appearing defendants in default is granted, and that defendants New York City Transit Adjudication Bureau, New York City Parking Violations Bureau, New York City Environmental Control Board, Adamar of New Jersey Inc., and HSBC Bank USA have not appeared or answered the complaint and are deemed in default; and it is further

ORDERED that the cross motion by defendants Chau T. Lam and Alan Chi-Lung Wong a/k/a Alan Chi Lung Wong for summary judgment dismissing plaintiff’s complaint is denied.

[1] According to the Board of Manager’s answer, defendants Lam and Wong acquired title to the condominium by deed dated September 1, 2005 and recorded on September 23, 2005. Amended Answer and Cross-Claims of Defendant Board of Managers of Eight East Twelfth Condominium, dated March 23, 2010, ¶ 25.

[2] “Robosigning” refers to the fraudulent practice wherein an affiant signs, in a short time frame, numerous affidavits and legal documents asserting the lender’s right to foreclose, despite having no personal knowledge of the facts contained in them. See generally Ohio v GMAC Mtge., LLC, 760 F Supp 2d 741, 743 (ND Ohio 2011).

[3] Delivery of the note during the pendency of the action is insufficient. Homecomings Fin., LLC v Guldi, 108 AD3d at 508-509; Wells Fargo Bank, N.A. v Marchione, 69 AD3d 204, 210 (2nd Dep’t 2009).

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4 Responses to “Bank of Am., NA v. LAM | NYSC – did not establish that the Note was physically delivered to Bank of America prior to the commencement of the action”

  1. Look what I found!

    The assignments are VOID per the Securities Exchange Act. This letter is to inform all the above including US Bank Trustees, by certified letter. I include that I am not indentured to any trust, therefore have no liability as a debtor, and owe no obligation to any party under the SEA, the Trust Indentures Act, or any other securities law.
    Nobody but the Depositor (Settlor) can transfer property to the trust.

    Every trust indenture states the recourse available when trust property is not transferred to the trust within it’s strict compliance. I AM NOT THE RECOURSE PARTY. See attached securities pool trust investigation on my mortgage.

    I AM “CC” this letter, to the Securities Exchange Commission.

    MERS activities in relation to trusts, are violations of the Securities Exchange Act.

    Among other violations, MERS acts as an unregistered exchange http://www.law.cornell.edu/uscode/text/15/78e

    Also, any agreement, contract, or condition, where MERS holds trust property is VOID !!! (not voidable) http://www.law.cornell.edu/uscode/text/15/78cc

    in addition, under the SEA, no cause of action (based on registered securities) can be brought in any state court. The “Power of Sale” provision in a mortgage, becomes VOID upon the trust’s “acceptance” of it (as shown above). The USDCs have exclusive jurisdiction of any to enforce any liability under SEA. Since I am not indentured to the trust as a “debtor” (which you are required to be under the Trust Indentures Act), I have no liability to any trust beneficiaries. That is why, when you read any PSA, the trust is the only obligor under a securitization. The trust has no legal authority to enforce ANY borrower liability to certificateholders (as beneficiaries), as they are the only party that can be in default under securitization. http://www.law.cornell.edu/uscode/text/15/78aa

    When a “bank” acts in a fiduciary capacity in a securitized trust, the National Bank Act is inapplicable, and they only have powers contained in the indentures (see the OCC Interpretive Letter that I attached).
    Since the trust registered is registered with the SEC;

    1. The state court lacks personal jurisdiction over the securities intermediaries and beneficiaries, under the Securities Exchange Act. Liability under the SEA is under the exclusive jurisdiction of the USDCs per Section 27(a).

    2. The “statutory power of sale” provision in the mortgage contract became VOID upon securitization, per Section 29(a) of the Securities Exchange Act.

    3. “MERS as mortgagee” became VOID upon securitization, per Sections 29(b), 41(A)(i), 5, 6(h)(1), 9(j), 10(b), 11(a)(1), and of the Securities Exchange Act. MERS rights under the contract become VOID as well per Section 29(b)(2).

    4. Since MERS, who does not have “investment discretion” under any indenture, retained the mortgage when securitized, and not transferred to the Indentured Custodian, the trust corpus only consisted of the notes,unsecured (which is doubtful that even occurred). Any subsequent lien acquired by the trust is VOID, per Sections 29(c), 20(b), 20(c) of the Securities Exchange Act. Grantor Trusts are prohibited in dealing with securities future trading / security-based swaps, under their own indentures, and the IRS REMIC law.

    5. Every PSA explicitly provides for recourse when property is not properly transferred to the trust in accordance with it’s indentures (which prevents it from being a “qualified mortgage”). The borrower, (See OCC letter attached page seven, stating the borrower is the ultimate party to the securitization, and the investor are the parties violated by the securities fraud and illegal attempts of the parties listed above to steal property and funds ), is never the recourse party…Therefore, the indentured parties, without any authority to do so, are evading the SEA, evading the trust indentures, and transferring trust liability from the recourse party in USDC, to the third- party borrower in state court.

    6. Due to Item 5, the foreclosure action is a fraud upon the court.

    7. Due to Item 5, it is an extortionate transaction.

    8. Due to Items 2-5, the foreclosure action is a violation of Federal Securities Law.

    9. All banks, servicers, and or trustees of the trust , and MERS, whom are not party to the foreclosure, are liable to the borrower and Securities Exchange Commission, for violation of an “implied warranty of authority”, and under Section 20(a) of the Securities Exchange Act.

    10. Bank of America, RECONTRUST, US Bank National Trustee’s, FOR , US BANK TRUST GSAA HOME EQUITY TRUST 2006-1 ASSETS BACKED CERTIFICATES, SERIES 2006-1 US BANK NATIONAL ASSOCIATION AS TRUSTEE, MERS, and Specialized Loan Servicing have no authority to take part as beneficiaries, or in any capacity, only the investors in the trust, have authority, causing “vicarious liability” to the borrower and investors, as they are the intended beneficiaries of the securities pool and property. Servicers and trustees only functions are to take funds from the borrower and give the funds to the investor. The servicers duty is to make as much money for the investor as possible, however not by being party to the foreclosing, nor by committing securities fraud.

    Page 45 of the “MERS Legal” file is proof that you never entered into any legal contract with MERS.

    “Question: What happens when a loan is closed by a non-MERS member using MOM documents in error?

    From time to time, (MERS) we have been contacted by various lenders and title companies that have erroneously closed loans using MOM (MERS as Original Mortgagee) documents (“Erroneous MOMs”). Erroneous MOMs are loans that are originated and recorded by lenders or individuals who are not MERS members. Contractually, MERS only agrees to be the lien holder in the land records for MERS Member. When MERS is contacted about Erroneous MOM documents, MERS takes one of two courses of action depending on the circumstances:

    1) If the originating lender is an institutional lender that is not a MERS member, MERS may execute an assignment out of MERS, provided that the originating lender indemnifies MERS for any potential liability that MERS may be unnecessarily exposed to by erroneously being named as the mortgagee at the time of the origination of the Erroneous MOM. The indemnification agreement is prepared by MERS and executed by the originating lender (and title company where applicable). Both the assignment and the indemnification agreement are submitted to the relevant county recorder’s office for recording.

    2) MERS takes a different approach if the lender that originated an Erroneous MOM is an individual. When this happens, MERS executes a Disclaimer of Interest. Through this document, MERS disclaims any interest in the property that is purportedly created by the Erroneous MOM because MERS never agreed to hold the lien on behalf of the non-member individual. The Disclaimer is recorded in the applicable land records.”

    Paragraph 1 is an overt fraudulent act. The mortgage is void ab initio under every states Statute of Frauds. It can never be “duly executed”, either. The Indemnification Agreement is a nullity, as the mortgagor MUST be a party to it (as the property that is held as security, is the real property of the mortgagor), to pass the SOF. No mortgagor in their right mind would enter into such agreement. Legally, the mortgage would need to be corrected, and then executed by the mortgagor.

    There should be no difference in MERS’ actions between paragraphs 1 & 2. They both involve the same legal issues, whether they are “institutional” or “individual” lenders. Curiously, MERS does not state the reasons for the separate and distinct actions. In both instances, the MERS mortgage contract lacked “mutual assent” (meeting of the minds), “capacity”, “consideration”, and “legality” (the basic parts to any contract). There must be an “intention to be legally bound”, as well.

    With MERS “nominee” status, and the black-letter language of the MERS mortgage, the “intention to be legally bound” is obfuscated. Clause 2 of the MERS System “Terms & Conditions” states;

    “The Member, at its own expense, shall promptly, or as soon as practicable, cause MERS to appear in the appropriate public records as the mortgagee of record with respect to each mortgage loan that the Member registers on the MERS® System (each, a “MERS Loan”) . MERS shall serve as mortgagee of record with respect to all MERS Loans solely as a nominee, in an administrative capacity, for the beneficial owner or owners thereof from time to time. MERS shall have no rights whatsoever to any payments made on account of MERS Loans, to any servicing rights related to MERS Loans, or to any mortgaged properties securing MERS Loans. MERS agrees not to assert any rights (other than rights specified in the Governing Documents) with respect to MERS Loans or mortgaged properties. References herein to “mortgage(s)” and “mortgagee of record” shall include deed(s) of trust and beneficiary under a deed of trust and any other form of security instrument under applicable state law.” [Washington Courts have found MERS is never a beneficiary].
    MERS cannot be a “mortgagee” (especially in title-theory states) without having any rights in the mortgaged property. A “nominee” stands in the shoes of it’s principal. This means that the principal surrenders rights to the nominee, for a limited purpose. Under the Terms & Conditions, the mortgage would be void ab initio, as MERS is contractually estopped from receiving ANY conveyance or transfer of rights, from the borrower. The Electronic Tracking Agreements are even more restrictive;

    “NOW, THEREFORE, the parties, intending to be legally bound, agree as follows: ……

    … MERS agrees that in no event shall MERS’ status as mortgagee of record with respect to any MERS Designated Mortgage Loan confer upon MERS any rights or obligations as an owner of any MERS Designated Mortgage Loan or the servicing rights related thereto, and MERS will not exercise such rights unless directed to do so by the Lender…..

    No Adverse Interest of the Electronic Agent or MERS.

    By execution of this Agreement, the Electronic Agent and MERS each represents and warrants that it currently holds, and during the existence of this Agreement shall hold, no adverse interest, by way of security or otherwise, in any MERS Designated Mortgage Loan. The MERS Designated Mortgage Loans shall not be subject to any security interest, lien or right to set-off by the Electronic Agent, MERS, or any third party claiming through the Electronic Agent or MERS, and neither the Electronic Agent nor MERS shall pledge, encumber, hypothecate, transfer, dispose of, or otherwise grant any third party interest in, the MERS Designated Mortgage Loans….

    …Status of Electronic Agent.

    Nothing herein contained shall be deemed or construed to create a partnership, joint venture between the parties hereto and the services of the Electronic Agent and MERS shall be rendered as independent contractors for the Lender and the Borrower. Other than the obligations of the Electronic Agent and MERS expressly set forth herein, the Electronic Agent and MERS shall have no power or authority to act as agent for the Lender or the Borrower pursuant to any grant of authority made under or pursuant to this Agreement.”
    Agains See OCC letter attached page seven. The servicers nor the trustee of the trust have any part in the foreclosure. Only the borrower and the investor. For any servicer or trustee of the trust to claim they are beneficiaries, or have authority in the foreclosure, CLAIMING AUTHOURITY TO ASSIGN ARE COMMITTING SECURITIES FRAUD! There is no lender nor holder in a securities pool.

    This is the ridiculousness of MERS. It has no power or authority to enter into a contract with a borrower. It’s sole authority is to be the “mortgagee of record” in the public land records. Even MERS’ own rules are devoid of any language authorizing their “legal capacity” to contract on behalf of a lender, by Power of Attorney or otherwise. When three parties are involved in a contract, at least two of them must execute it by signature, under the Statute of Frauds. Neither MERS, nor the Lender, ever execute the contract as an “accommodation party” or as an “accommodating party”, or attach any Power of Attorney. MERS is therefore liable to mortgagors for “breach of warranty of authority”.

    http://www.scribd.com/doc/131912650/MERS-Show-Me-the-Nomination-Bryant-03-2013

  2. http://www.msfraud.org/LAW/Lounge/U_S_BANK_Brochure_Borrower-is-a-party_9-13.pdf
    see attached pdf or http://www.occ.gov/publications/publications-by-type/comptrollers-handbook/assetsec.pdf STATES THE BORROWER AND INVESTOR ARE THE ONLY PARTY’S TO THE SECURITIES POOL. SPECIFICALLY STATES THE SERVICER AND THE TRUSTEE OF THE TRUST HAVE NO PART IN THE FORECLOSURE.
    http://foreclosuredefensenationwide.com/?p=533
    RESEARCH: This squarely disprove and nullify the holdings of various courts around the country which have taken the position that the borrower “is not a party to” the securitization
    Countless Foreclosure Rulings are Wrong!
    US BANK ADMITS THE BORROWER IS A PARTY TO AN MBS TRANSACTION
    Jeff Barnes, Esq. wrote: “We have been provided with a copy of U.S. Bank Global Corporate Trust Services’ “Role of the Corporate Trustee” brochure which makes certain incredible admissions, several of which squarely disprove and nullify the holdings of various courts around the country which have taken the position that the borrower “is not a party to” the securitization and is thus not entitled to discovery or challenges to the mortgage loan transfer process.” The second page sets forth that U.S. Bank, as Trustee, “does not have any discretion or authority in the foreclosure process.” If this is true, how can U.S. Bank as Trustee be the Plaintiff in judicial foreclosures or the foreclosing party in non-judicial foreclosures if it has “no authority in the foreclosure process”?
    US Bank Brochure
    http://stopforeclosurefraud.com/2013/11/11/bombshell-us-bank-admits-the-borrower-is-a-party-to-an-mbs-transaction-that-securitization-trustees-are-not-involved-in-the-foreclosure-process/
    “We have been provided with a copy of U.S. Bank Global Corporate Trust Services’ “Role of the Corporate Trustee” brochure which makes certain incredible admissions, several of which squarely disprove and nullify the holdings of various courts around the country which have taken the position that the borrower ‘is not a party to’ the securitization and is thus not entitled to discovery or challenges to the mortgage loan transfer process…The first heading of the brochure is styled “Distinct Party Roles”. The first sentence of this heading states: ‘Parties involved in a MBS transaction include the borrower, the originator, the servicer and the trustee, each with their own distinct roles, responsibilities and limitations.’”
    That’s big enough, but here’s where what Neil has said all along is admitted to by a bank itself:
    “THE FOURTH PAGE OF THE BROCHURE STATES THAT THE INVESTORS ARE ‘THE TRUE BENEFICIAL OWNERS OF THE MORTGAGES’, and the third page of the brochure states ‘Whether the servicer pursues a foreclosure or considers a modification of the loan, the goal is still to maximize the return to investors’ (who, again, are the true beneficial owners of the mortgage loans).”
    Here is a link to the brochure: https://www.usbank.com/pdf/community/Role-of-Trustee-Sept2013.pdf

  3. AARON says:

    HI SHELLY I WOULD LIKE O CONTACT YOU, YOUR KNOWLEDGE IS VERY HELPFUL
    SPECIAL FOR PEOPLE THAT ARE BEEN VICTIM OF ALL CAIN OF MORTGAGE SCAM
    PLEASE CONTACT ME VIA EMAIL AFFORDABLESHOMES@GMAIL.COM
    MY NAME IS AARON QUINDER FROM NY PH: 212 404-6216

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