March, 2016 | FORECLOSURE FRAUD | by DinSFLA

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Knowles v. The Bank of New York Mellon | FL 4dca – Contrary to the bank’s request that we remand this case for a new trial, the proper remedy, as in both Jelic and Balch, is remand for entry of an involuntary dismissal

Knowles v. The Bank of New York Mellon | FL 4dca – Contrary to the bank’s request that we remand this case for a new trial, the proper remedy, as in both Jelic and Balch, is remand for entry of an involuntary dismissal

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT

LAVERIA ANN KNOWLES a/k/a LAVERIA KNOWLES,
Appellant,

v.

THE BANK OF NEW YORK MELLON f/k/a THE BANK OF NEW YORK,
AS TRUSTEE FOR THE CERTIFICATEHOLDERS CWALT, INC.
ALTERNATIVE LOAN TRUST 2006-OA6 MORTGAGE
PASS-THROUGH CERTIFICATES SERIES 2006-OA6,
LAKE SHORE VILLAGE NEIGHBORHOOD ASSOCIATION, INC.,
UNKNOWN TENANT NO. 1, and UNKNOWN TENANT NO. 2,
Appellees.

No. 4D15-630

[March 30, 2016]
Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; Catherine M. Brunson, Judge; L.T. Case No.
502009CA042015XXXXMB.

Thomas Erskine Ice of Ice Appellate, Royal Palm Beach, for appellant.
Heidi J. Bassett of Robertson, Anschutz & Schneid, P.L., Boca Raton,
for appellee The Bank of New York Mellon.

ON CONCESSION OF ERROR
PER CURIAM.

The bank properly concedes that the trial court erred in entering a final
judgment of foreclosure. The bank’s concession is based upon case law
which this court issued after the trial. See Jelic v. LaSalle Bank, Nat’l
Ass’n, 160 So. 3d 127, 130 (Fla. 4th DCA 2015) (reversing a final judgment
of foreclosure, in part because there was no evidence that the party
transferring the note into the trust had any intent to transfer an interest
to the trustee); and Balch v. LaSalle Bank N.A., 171 So. 3d 207, 209 (Fla.
4th DCA 2015) (reversing a final judgment of foreclosure, in part because
“evidence that the note was transferred into the trust prior to the
foreclosure action is insufficient by itself to confer standing because there
was no evidence that the indorsee had the intent to transfer any interest
to the trustee”).
Contrary to the bank’s request that we remand this case for a new trial,
the proper remedy, as in both Jelic and Balch, is remand for entry of an
involuntary dismissal. Jelic, 160 So. 3d at 130; Balch, 171 So. 3d at 209.

Reversed and remanded for entry of involuntary dismissal.
CIKLIN, C.J., MAY and GERBER, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.

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Alexandre v. Scribner Village Homeowners Association, Inc., et al. | FL 4DCA –  the sale should not have proceeded until the stay was lifted

Alexandre v. Scribner Village Homeowners Association, Inc., et al. | FL 4DCA – the sale should not have proceeded until the stay was lifted

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT

MARIE R. ALEXANDRE,
Appellant,

v.

SCRIBNER VILLAGE HOMEOWNERS ASSOCIATION, INC., UNKNOWN
SPOUSE OF MARIE R. ALEXANDRE, UNKNOWN TENANT IN
POSSESSION #1 and UNKNOWN TENANT IN POSSESSION #2,
Appellees.

No. 4D15-1514

[March 30, 2016]

Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; Howard H. Harrison, Senior Judge; L.T. Case No.
502014CA008370XXXXMB.
James Jean-Francois of Law Offices of James Jean-Francois, P.A.,
Hollywood, for appellant.

No appearance for appellee.

DAMOORGIAN, J.

Marie Alexandre appeals the order denying her motion to stay the
clerk’s issuance of a writ of possession and/or to set aside a foreclosure
sale following the entry of final judgment in a foreclosure action. We
reverse.

Scribner Village Homeowners Association (the “HOA”) obtained a final
judgment of foreclosure against Appellant on its lien for unpaid
assessments. The judgment set Appellant’s property for a public sale.
Before the sale was set to occur, Appellant filed a suggestion of bankruptcy
in the circuit court reflecting that Appellant filed a petition for Chapter 11
bankruptcy in the federal bankruptcy court. The suggestion stated that
by virtue of her petition, “this action has been stayed by the operation of
11 U.S.C. Section 362.” Despite Appellant’s filing, the sale proceeded and
the clerk of court issued a certificate of sale to HOA as the highest bidder
as well as a certificate of title. Following the HOA’s request for a writ of
possession, Appellant filed a motion asking the court to stay any issuance
2
of a writ of possession and set aside the final judgment of foreclosure and
certificate of title. The trial court denied Appellant’s motion. This appeal
follows.
“The filing of a bankruptcy petition automatically stays the
commencement or continuation of an action against the debtor’s
property.” In re Clarke, 373 B.R. 769, 771 (Bankr. S.D. Fla. 2006) (citing
11 U.S.C. § 362(a)). Accordingly, it is error for a court to enforce a
judgment of foreclosure on property owned by the debtor when an
automatic stay is in place. Heritage Family Pub, Inc. v. First Fed. Sav. and
Loan Ass’n of Clearwater, 315 So. 2d 558, 559 (Fla. 2d DCA 1975) (holding
that trial court erred in denying defendant’s motion to vacate foreclosure
sale and cancel certificate of sale when sale was conducted after the
defendant filed a petition for bankruptcy thus creating an automatic stay
prior to the sale). As Appellant filed a petition for bankruptcy before the
foreclosure sale, the sale should not have proceeded until the stay was
lifted. Id.; 11 U.S.C. § 362(a). Accordingly, the trial court erred in denying
Appellant’s motion to set aside the sale and everything that flowed from it.
Reversed and remanded.
MAY and GERBER, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.

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DEVRIES v. CITIMORTGAGE INC. | FL 5DCA- First, CitiMortgage presented no evidence that the special indorsement in its favor predated the filing of the complaint…Second, CitiMortgage’s witness did not testify that the assignment occurred before the complaint was filed

DEVRIES v. CITIMORTGAGE INC. | FL 5DCA- First, CitiMortgage presented no evidence that the special indorsement in its favor predated the filing of the complaint…Second, CitiMortgage’s witness did not testify that the assignment occurred before the complaint was filed

 

OTTO P. DEVRIES AND BRIGITTE YOUNG DEVRIES, Appellants,
v.
CITIMORTGAGE INC, ET AL., Appellees.

Case No. 5D14-1887.
District Court of Appeal of Florida, Fifth District.
Opinion filed March 24, 2016.
Peter Ticktin, Kendrick Almaguer and Michael S. Wickenhauser, of The Ticktin Law Group, P.A., Deerfield Beach, for Appellants.

Nancy M. Wallace and Kristen M. Fiore, of Akerman LLP, Tallahassee, and William P. Heller, of Akerman LLP, Fort Lauderdale, for Appellees.

PALMER, J.

Otto and Brigitte Devries, the homeowners, timely appeal the final judgment of foreclosure entered by the trial court in favor of CitiMortgage. Determining that CitiMortgage failed to prove its standing to foreclose, we reverse.

The proper party entitled to enforce a note and foreclose a mortgage is the holder of the note, a nonholder in possession who has the rights of a holder, or a person not in possession of a lost instrument who has the right to re-establish the note pursuant to section 673.3091, Florida Statutes (2009). Gorel v. Bank of New York Mellon, 165 So. 3d 44, 46 (Fla. 5th DCA 2015).

CitiMortgage filed this foreclosure suit in 2010, alleging its standing based on its status as holder of the note, yet the note attached to the complaint contained a special indorsement in favor of Standard Federal Bank. At trial, CitiMortgage introduced the original note into evidence which contained an additional indorsement: a special indorsement in its favor. CitiMortgage also introduced a backdated assignment of the note and mortgage. CitiMortgage’s witness testified that the bank’s records showed that the original note was received by transfer in 2007. The witness did not testify that the indorsements or assignment predated the filing of the complaint. The homeowners argue that the evidence at trial was insufficient to establish that CitiMortgage had standing to foreclose the mortgage at the time the complaint was filed. We agree

First, CitiMortgage presented no evidence that the special indorsement in its favor predated the filing of the complaint. See Eagles Master Ass’n, Inc. v. Bank of Am., N.A., 40 Fla. L. Weekly D1510 (Fla. 2d DCA June 26, 2015) (“The endorsement must have occurred before the filing of the complaint because it is axiomatic that standing must be shown as of the filing of the complaint.”).

Second, CitiMortgage’s witness did not testify that the assignment occurred before the complaint was filed. See Lloyd v. Bank of New York Mellon, 160 So. 3d 513, 515 (Fla. 4th DCA 2015) (holding that the bank did not establish standing on basis of backdated assignment where the bank’s witness did not testify that assignment predated filing of complaint); see also Matthews v. Fed. Nat’l Mortg. Ass’n, 160 So. 3d 131, 133 (Fla. 4th DCA 2015) (“[A] backdated assignment, standing alone, [does not] establish standing.”).

While CitiMortgage contends that the date the assignment was executed was not determinative because it was simply memorializing an earlier transfer, CitiMortgage presented no evidence in support of this contention, such as evidence that the note and mortgage were delivered to CitiMortgage in 2007 with the intention of passing title. See generally Jarvis v. Deutsche Bank Nat’l Trust Co., 169 So. 3d 194, 196 (Fla. 4th DCA 2015) (stating that possession of instrument alone is an insufficient basis to prove standing to foreclose); St. Clair v. U.S. Bank Nat’l Ass’n, 173 So. 3d 1045, 1046 (Fla. 4th DCA 2015) (same).

REVERSED and REMANDED for entry of an involuntary dismissal.

SAWAYA and TORPY, JJ., concur.

NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF FILED

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County mulls credit cards for homes in foreclosure

County mulls credit cards for homes in foreclosure

The Daily Star-

Otsego County officials are looking at new ways to help financially-distressed property owners keep the tax foreclosure wolf away from their doors.

The county’s annual tax auction in 2014 left county government mired in three lawsuits filed by property owners who objected to the fact their houses were sold under the gavel to the highest bidder, causing them to lose all equity and leave the county with the profit.

While the latest discussions do not involve extending the payment deadline up to the time of the auction, the plan under consideration would give all taxpayers a new option: paying their tax bills by credit card.

[THE DAILY STAR]

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A New Name of the Game at Nationstar

A New Name of the Game at Nationstar

Foreclosure clean-up firm follows rivals in rebranding effort to expand; here comes ‘Mr. Cooper’

WSJ-

 

The companies that thrived during the foreclosure crisis are entering an identity crisis.

Nationstar Mortgage Holdings Inc., which made its name servicing delinquent loans, this summer plans to rename itself “Mr. Cooper.” Foreclosure sales company Auction.com in January rebranded as “Ten-X.” Mortgage-services firm Altisource Portfolio Solutions last year bought rental-data firm RentRange and real-estate-investment website Investability.

The moves reflect a housing recovery that is threatening the business of foreclosure clean-up firms.

At the end of last year, about 3.4% of mortgages were 90 or more days past due, compared with 9.7% at the peak of the crisis in 2009, according to the Mortgage Bankers Association.

[WALL STREET JOURNAL]

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Mass. Attorney General settles with foreclosure firm

Mass. Attorney General settles with foreclosure firm

NECIR-

Six years ago, former Attorney General Martha Coakley launched an investigation into Newton-based foreclosure firm Harmon Law Offices PC, concerned it was violating certain eviction and foreclosure laws.

Last spring, the new Attorney General Maura Healey quietly settled the case without the company admitting to, or the office finding, any wrongdoing.  Still, Harmon agreed to make a $66,500 donation to the state’s Local Consumer Aid Fund, according to the settlement document obtained by the New England Center for Investigative Reporting.

The Attorney General’s office released the agreement after a request from NECIR. “The settlement agreement resolves all of our claims and our investigation into those claims,’’ the office said in a statement.

[NECIR]

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ALEKSEYEV v. US Bank N.A. | FL 4DCA – In the present case, regardless of whether the underlying complaint failed to establish standing or failed to state a cause of action, the resulting judgment would be voidable, not void.

ALEKSEYEV v. US Bank N.A. | FL 4DCA – In the present case, regardless of whether the underlying complaint failed to establish standing or failed to state a cause of action, the resulting judgment would be voidable, not void.

 Interesting Opinion Here…

VITALY ALEKSEYEV and IRINA ALEKSEYEV a/k/a IRINA SHAPIRO, Appellants,
v.
U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, SUCCESSOR IN INTEREST TO BANK OF AMERICA, NATIONAL ASSOCIATION AS TRUSTEE SUCCESSOR BY MERGER TO LASALLE BANK N.A., AS TRUSTEE FOR WAMU MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2006-AR15 TRUST, CLUB TWO OF HALLANDALE CONDOMINIUM ASSOCIATION, INC., and BEACH CLUB MASTER ASSOCIATION, INC., Appellees.

No. 4D14-2668.
District Court of Appeal of Florida, Fourth District.
March 23, 2016.
Kenneth Eric Trent of Kenneth Eric Trent, P.A., Fort Lauderdale, for appellants.

William L. Grimsley and N. Mark New II of McGlinchey Stafford, Jacksonville, for appellee U.S. Bank National Association.

LEVINE, J.

Appellants appeal the lower court’s entry of final judgment of foreclosure in favor of U.S. Bank N.A. Because we find that the trial court was without jurisdiction when it entered the order from which appellants appeal, we do not reach the merits and instead remand with instructions to reinstate the previously entered final judgment of May 11, 2010.

Bank of America, N.A., brought a foreclosure action against appellants. The lower court granted Bank of America’s summary judgment motion and entered a final judgment of foreclosure on May 11, 2010. Appellants did not appeal.

Almost two years after entry of final judgment, appellants moved to vacate the final judgment, arguing that Bank of America’s complaint failed to establish standing. The lower court granted appellants’ motion and vacated the final judgment because Bank of America’s complaint failed to state a cause of action. Bank of America then substituted U.S. Bank as plaintiff, and the case proceeded to trial. Following trial, the lower court entered final judgment of foreclosure in favor of U.S. Bank on March 13, 2014.

Although neither party presents an argument regarding the trial court’s subject matter jurisdiction, a defect in the trial court’s jurisdiction may be raised sua sponte for the first time on appeal. See Ruffin v. Kingswood E. Condo. Ass’n, 719 So. 2d 951, 952 (Fla. 4th DCA 1998); DNA Ctr. For Neurology & Rehab. v. Progressive Am. Ins. Co., 13 So. 3d 74, 75 (Fla. 5th DCA 2009). See also Snider v. Snider, 686 So. 2d 802, 804 (Fla. 4th DCA 1997) (“Subject matter jurisdiction is conferred upon a court by a constitution or statute, and cannot be created by waiver, acquiescence or agreement of the parties.”)

The trial court loses jurisdiction over a case after it becomes final except to the extent it specifically reserves jurisdiction to enforce the judgment and as provided by the Florida Rules of Civil Procedure. NAFH Nat’l Bank v. Aristizabal, 117 So. 3d 900, 902 (Fla. 4th DCA 2013); Ross v. Wells Fargo Bank, 114 So. 3d 256, 257 (Fla. 3d DCA 2013).

Pursuant to Florida Rule of Civil Procedure 1.540, a trial court retains jurisdiction to grant relief following final judgment in a few limited circumstances. Under rule 1.540(b)(4), a void judgment may be vacated at any time. Nevertheless, this rule does not permit vacating a judgment that is merely “voidable.” Phadael v. Deutsche Bank Trust Co. Ams., 83 So. 3d 893, 894-95 (Fla. 4th DCA 2012); Bank of N.Y. Mellon v. Condo. Ass’n of La Mer Estates, Inc., 175 So. 3d 282, 286 (Fla. 2015). To attack a voidable judgment, one must do so by appeal or by filing a timely motion to vacate pursuant to one of the other enumerated grounds in rule 1.540(b). Condo. Ass’n of La Mer Estates, Inc. v. Bank of N.Y. Mellon Corp., 137 So. 3d 396, 399 (Fla. 4th DCA 2014) (en banc), aff’d 175 So. 3d 282 (Fla. 2015).

Where a complaint fails to establish standing, the resulting judgment is voidable, not void. Phadael, 83 So. 3d at 895. Similarly, “a default judgment, which is based on a complaint that fails to state a cause of action, is voidable, rather than void.” Condo. Ass’n of La Mer Estates, 175 So. 3d at 285.

In the present case, regardless of whether the underlying complaint failed to establish standing or failed to state a cause of action, the resulting judgment would be voidable, not void. Thus, rule 1.540(b)(4) was inapplicable. Therefore, the trial court was without jurisdiction to vacate the 2010 final judgment and reopen the case after it had been final for more than a year. The trial court was further without jurisdiction to entertain proceedings in a case where it had already lost jurisdiction. Ross, 114 So. 3d at 257.

We therefore reverse and remand with directions to vacate the final judgment of foreclosure entered on March 13, 2014, to reinstate the final judgment entered on May 11, 2010, and for further proceedings consistent with this opinion.

Reversed and remanded with directions.

GROSS and CONNER, JJ., concur.

Not final until disposition of timely filed motion for rehearing.

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DEUTSCHE BANK NATIONAL TRUST COMPANY v. Thompson, Conn: Appellate Court | Although the record contains documents memorializing the assignment of the mortgage from MERS to the plaintiff, there are no assignment documents with respect to the note. Thus, the record provides no clues as to when, if ever, the plaintiff acquired the note.

DEUTSCHE BANK NATIONAL TRUST COMPANY v. Thompson, Conn: Appellate Court | Although the record contains documents memorializing the assignment of the mortgage from MERS to the plaintiff, there are no assignment documents with respect to the note. Thus, the record provides no clues as to when, if ever, the plaintiff acquired the note.

 

DEUTSCHE BANK NATIONAL TRUST COMPANY, TRUSTEE,
v.
RODNEY THOMPSON ET AL.

(AC 37362).
Appellate Court of Connecticut.
Argued January 4, 2016.
Officially Released March 22, 2016.
Rodney Thompson, self-represented, the appellant (named defendant).

Jordan W. Schur, for the appellee (substitute plaintiff).

Beach, Sheldon and Harper, Js.

Opinion

HARPER, J.

In this foreclosure action, the self-represented defendant Rodney Thompson[1] appeals from the judgment of strict foreclosure, rendered in favor of the plaintiff, Deutsche Bank National Trust Company, as trustee.[2] On appeal, the defendant claims, among other things, that the plaintiff lacked standing to bring this action because it was not in possession of the subject note at the time the action was commenced.[3] Because the resolution of this claim is dependent upon a factual finding that is not part of the appellate record, and because this claim implicates the subject matter jurisdiction of the trial court, we are unable to review the merits of this appeal. We therefore reverse the judgment of the trial court and remand the case for further proceedings.

The following facts and procedural history guide our analysis. On January 25, 2007, the defendant executed a fixed-rate balloon note in favor of New Century Mortgage Company in exchange for a loan in the principal amount of $213,600 to purchase real property in West Hartford. On March 9, 2009, the plaintiff commenced foreclosure proceedings against the defendant. In paragraph four of the plaintiff’s complaint, it alleged that the defendant executed and delivered a mortgage to Mortgage Electronic Registration Systems, Inc. (MERS), that MERS assigned said mortgage to the plaintiff, and that the plaintiff is the holder of said mortgage and the note securing the mortgage.[4]

On August 18, 2009, the plaintiff filed a motion for default for failure to plead, which was granted by the clerk. The defendant never filed a motion to open judgment following entry of default, nor did he ever move to set aside the default. Also on August 18, 2009, the plaintiff filed a motion for judgment of strict foreclosure. The motion for judgment of strict foreclosure was granted by the court, Vacchelli, J., but not until September 16, 2013—more than four years after it was filed. The reasons for delay were that the parties underwent lengthy foreclosure mediation and the defendant attempted to remove the case to federal court.

On November 6, 2013, the defendant filed a petition in bankruptcy under chapter 7 of the United States Code in the United States Bankruptcy Court for the District of Connecticut. On April 16, 2014, the bankruptcy court, Dabrowski, J., issued a discharge of debtor order pursuant to 11 U.S.C. § 727. The plaintiff subsequently filed a motion to open judgment and reset the law days on August 22, 2014. This motion was granted by the court, Vacchelli, J., on September 22, 2014. The court did not file a memorandum of decision with either the initial September 16, 2013 judgment of strict foreclosure or the September 22, 2014 order opening the judgment and setting new law days, and no transcript of any proceedings before the trial court was filed with this court. This appeal followed.

On appeal, the defendant challenges the plaintiff’s standing to bring the present foreclosure action. Specifically, the defendant claims that the plaintiff did not own or hold the subject note when it filed the foreclosure complaint, and that the defendant’s mortgage lien— which the defendant claims is invalid—did not survive the bankruptcy proceedings. The plaintiff responds that the record is inadequate for review. The plaintiff further argues that because it alleged that it was the holder of the note, and because the defendant failed to plead and was defaulted, the defendant has admitted these crucial jurisdictional allegations and cannot challenge them on appeal.

“We begin our analysis with the subject matter jurisdiction claim and the applicable standard of review. . . . Subject matter jurisdiction involves the authority of the court to adjudicate the type of controversy presented by the action before it. . . . [A] court lacks discretion to consider the merits of a case over which it is without jurisdiction. . . . [T]his court has often stated that the question of subject matter jurisdiction, because it addresses the basic competency of the court, can be raised by any of the parties, or by the court sua sponte, at any time.” (Citations omitted; internal quotation marks omitted.) Peters v. Dept. of Social Services, 273 Conn. 434, 441-42, 870 A.2d 448 (2005). “A court does not have subject matter jurisdiction to hear a matter unless the plaintiff has standing to bring the action.” Western Boot & Clothing Co. v. L’Enfance Magique, Inc., 81 Conn. App. 486, 488, 840 A.2d 574, cert. denied, 269 Conn. 903, 852 A.2d 737 (2004).

“Standing is the legal right to set judicial machinery in motion. One cannot rightfully invoke the jurisdiction of the court unless he [or she] has, in an individual or representative capacity, some real interest in the cause of action, or a legal or equitable right, title or interest in the subject matter of the controversy. . . . [When] a party is found to lack standing, the court is consequently without subject matter jurisdiction to determine the cause. . . . We have long held that because [a] determination regarding a trial court’s subject matter jurisdiction is a question of law, our review is plenary. . . . In addition, because standing implicates the court’s subject matter jurisdiction, the issue of standing is not subject to waiver and may be raised at any time.” (Citations omitted; internal quotation marks omitted.) Equity One, Inc. v. Shivers, 310 Conn. 119, 125-26, 74 A.3d 1225 (2013).

It is well established that “the holder of a note has standing to bring an action for strict foreclosure. . . .” Mengwall v. Rutkowski, 152 Conn. App. 459, 463, 102 A.3d 710 (2014); see also Fleet National Bank v. Nazareth, 75 Conn. App. 791, 794-95, 818 A.2d 69 (2003) (plaintiff who held mortgage but not note lacked standing to institute foreclosure proceedings). “[A] holder of a note is presumed to be the owner of the debt, and unless the presumption is rebutted, may foreclose the mortgage under [General Statutes] § 49-17. The possession by the bearer of a note [e]ndorsed in blank imports prima facie that he acquired the note in good faith for value and in the course of business, before maturity and without notice of any circumstances impeaching its validity. The production of the note establishes his case prima facie against the makers and he may rest there.” (Internal quotation marks omitted.) Equity One, Inc. v. Shivers, supra, 310 Conn. 135.

If the plaintiff did not hold the note at the time it commenced this action, then it would have lacked standing and the case must be dismissed. The key question for us to resolve, therefore, is when the note came into the plaintiff’s possession. We cannot answer this question for two reasons. First, after a thorough review of the record, we conclude that it contains no documents demonstrating when the plaintiff came to hold or own the note. The only note in the record before us is the fixed-rate balloon note. This note is payable to the original lender, New Century Mortgage Company, and contains no endorsement. Although the record contains documents memorializing the assignment of the mortgage from MERS to the plaintiff, there are no assignment documents with respect to the note. Thus, the record provides no clues as to when, if ever, the plaintiff acquired the note. Second, the trial court made no factual finding as to when the plaintiff acquired the note. No memorandum of decision accompanies the court’s judgment of strict foreclosure or order on the plaintiff’s motion to open judgment and reset the law days.[5] Additionally, no transcript of any hearing in which the court might have made such a finding has been provided for our review. At oral argument before this court, the plaintiff’s counsel asserted that in order to be entitled to a judgment of strict foreclosure, the note would have had to have been presented to the trial court and, therefore, the note must have been presented in the present case. We have no evidence before us that this occurred. Because the record lacks a crucial jurisdictional finding by the trial court, and further contains no evidence of when the plaintiff acquired the note, we cannot review whether the plaintiff lacked standing to commence this action.

This court’s holding in Deutsche Bank National Trust Co. v. Bialobrzeski, 123 Conn. App. 791, 3 A.3d 183 (2010), is instructive to our analysis. The plaintiff in that case brought an action against the self-represented defendant to foreclose a mortgage on real property in New Britain. The plaintiff filed a motion for default for failure to plead, which was granted by the clerk. Id., 792-93. The defendant subsequently answered, leaving the plaintiff to its proof with respect to its allegation that it was the holder of the note and mortgage. Id., 793 and n.2. As a result of the defendant’s answer, the court opened the default. Id., 793.

The plaintiff in Bialobrzeski subsequently filed an unopposed motion for summary judgment, which was granted as to liability only. Id. Among the documents submitted by the plaintiff in support of its motion for summary judgment was a fixed-adjustable rate note, which was payable to the original lender, Long Beach Mortgage Company. Id., 793 n.3. This note was not endorsed. Id. Subsequently, the defendant filed a motion to dismiss, arguing that the note contained no endorsement and no date. Id., 796. The trial court denied the defendant’s motion to dismiss. Id., 794.

On appeal, the defendant in Bialobrzeski claimed that the plaintiff was not in possession of the subject note at the time the action was commenced. Id., 792. This court noted that “[t]he key to resolving the defendant’s claim is a determination of when the note came into the plaintiff’s possession.” Id., 797. Ultimately, this court held that “[w]e cannot review the claim because [the trial court] made no factual finding as to when the plaintiff acquired the note. Without that factual determination, we are unable to say whether [the trial court] improperly denied the defendant’s motion to dismiss.” Id., 797-98. Noting that “appellate courts do not make findings of fact”; id., 800; this court ruled that “[w]hen the question regarding the plaintiff’s standing was raised, the [trial] court should have held a hearing to determine whether the plaintiff was the owner or holder of the note at the time the action was commenced.” Id., 799-800.

The record in the present case is likewise devoid of an endorsed note and a factual finding by the trial court concerning if and when the plaintiff acquired the note. The plaintiff nevertheless argues that the defendant cannot challenge the plaintiff’s standing because the defendant failed to set aside the default judgment. In the plaintiff’s view, because it alleged that it held the note, and because a default judgment was rendered in its favor, its status as holder of the note has been conclusively established and cannot be challenged by the defendant on appeal. We disagree. “A default admits the material facts that constitute a cause of action . . . and entry of default, when appropriately made, conclusively determines the liability of a defendant.” (Emphasis altered; internal quotation marks omitted.) Whitaker v. Taylor, 99 Conn. App. 719, 725, 916 A.2d 834 (2007). Although it is established that entry of default conclusively establishes the liability of a defendant, the plaintiff offers no authority to support its position that entry of default conclusively establishes the subject matter jurisdiction of the court. Moreover, we disagree with this position because it essentially posits that a party can waive a subject matter jurisdiction challenge by virtue of a pleading deficiency, namely, a failure to reply to jurisdictional allegations during the pleading stage. This is wholly unsupportable because “[a] subject matter jurisdictional defect may not be waived . . . [or jurisdiction] conferred by the parties, explicitly or implicitly.” (Internal quotation marks omitted.) Kleen Energy Systems, LLC v. Commissioner of Energy & Environmental Protection, 319 Conn. 367, 380-81, 125 A.3d 905 (2005).

Additionally, we reject the plaintiff’s argument that an inadequate record precludes our review of its standing. “The duty to provide this court with a record adequate for review rests with the appellant. . . . It is incumbent upon the appellant to take the necessary steps to sustain its burden of providing an adequate record for appellate review. Practice Book § [60-5]. . . . It is not the function of this court to find facts. . . . Our role is . . . to review claims based on a complete factual record developed by a trial court. . . . Without the necessary factual and legal conclusions furnished by the trial court . . . any decision made by us respecting [the defendant’s claims] would be entirely speculative.” (Internal quotation marks omitted.) Macricostas v. Kovacs, 67 Conn. App. 130, 133, 787 A.2d 64 (2001). Even if we were to accept that the record is inadequate, we are not foreclosed from considering the standing issue. To begin with, although it is indeed the burden of the defendant, as the appellant, to provide an adequate record for review, it is “[t]he plaintiff [who] bears the burden of proving subject matter jurisdiction, whenever and however raised.” (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. New London, 265 Conn. 423, 430 n.12, 829 A.2d 801 (2003). In Bialobrzeski, a case with similar facts and circumstances, this court held that “[a]lthough it is the appellant’s responsibility to provide an adequate record for review; see Practice Book §§ 60-5 and 61-10; that cannot be the end of the matter because [whether a bank acquired a note before the commencement of a foreclosure action] concerns the trial court’s subject matter jurisdiction.” Deutsche National Bank Trust Co. v. Bialobrzeski, supra, 123 Conn. App. 798. On the basis of the foregoing analysis, we, like the court in Bialobrzeski, are unable to review the defendant’s subject matter jurisdiction claim.

The judgment is reversed and the case is remanded for a determination of the jurisdictional issue and for further proceedings according to law.

In this opinion the other judges concurred.

[1] Also named as a defendant in this action was Mortgage Electronic Registration Systems, Inc., but it did not participate in this appeal. We refer to Thompson as the defendant.

[2] The trial court granted the plaintiff’s motion to substitute Deutsche Bank National Trust Company as Trustee for the Registered Holders of Morgan Stanley ABS Capital I, Inc., Trust 2007-NC4 Mortgage Pass-Through Certificates, Series 2007-NC4, as the party plaintiff. We refer to the substitute plaintiff as the plaintiff in this opinion.

[3] The defendant raised a number of additional claims on appeal, including claims that the mortgage was discharged in bankruptcy and that his due process rights were violated. Because we conclude that we are unable to review the defendant’s subject matter jurisdiction claim, we do not address these additional claims.

[4] Although the plaintiff alleged that it was the holder of the mortgage as of the filing of the complaint in March, 2009, the assignment of mortgage between it and MERS is dated June 24, 2009. At oral argument before this court, the plaintiff’s counsel conceded that the mortgage had not been assigned to the plaintiff until after the complaint was filed.

[5] The court made a number of factual findings in granting the motion to open judgment and reset the law days, such as the balance of the debt and the property’s fair market value, but none concerning the plaintiff’s status as holder of the note.

 

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Posted in STOP FORECLOSURE FRAUD2 Comments

Bernie releases incredible ad featuring Tulsi Gabbard

Bernie releases incredible ad featuring Tulsi Gabbard

Rep. Tulsi Gabbard would make an excellent first President!!

 

“I could not in good conscience stay back here in beautiful Hawaii and watch my brothers and sisters in uniform go off into combat. These are people and friends who we never forget.” – Rep. Tulsi Gabbard

image: Time.com

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TFH 3/27/16 – Foreclosure Workshop #8: Successful Strategies for Reversing Otherwise Completed Foreclosures (Or How To Bring Dead Foreclosures Back To Life)

TFH 3/27/16 – Foreclosure Workshop #8: Successful Strategies for Reversing Otherwise Completed Foreclosures (Or How To Bring Dead Foreclosures Back To Life)

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

LISTEN TO KHVH-AM (830 ON THE AM RADIO DIAL)

ALSO AVAILABLE ON KHVH-AM ON THE iHEART APP ON THE INTERNET

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Sunday – March 27, 2016

Foreclosure Workshop #8: Successful Strategies for Reversing Otherwise Completed Foreclosures (Or How To Bring Dead Foreclosures Back To Life)

(Please call in and share your experiences)

~

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Host: Gary Dubin Co-Host: John Waihee

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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

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Past Broadcasts

EVERY SUNDAY 3:00 PM HAWAII 6:00 PM PACIFIC 9:00 PM EASTERN ON KHVH-AM (830 ON THE DIAL) AND ON iHEART RADIO The Foreclosure Hour 12

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CRUZ vs JPMORGAN CHASE | FL 4DCA – The PAA has caveats where JPMorgan could refuse to acquire assets and there is no record evidence that the FDIC transferred the note to JPMorgan before the complaint was filed

CRUZ vs JPMORGAN CHASE | FL 4DCA – The PAA has caveats where JPMorgan could refuse to acquire assets and there is no record evidence that the FDIC transferred the note to JPMorgan before the complaint was filed

H/T CORONA LAW FIRM

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA

FOURTH DISTRICT

OTTONIEL CRUZ and LUZ M. CRUZ,

Appellants,

v.

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, AS
SUCCESSOR IN INTEREST TO WASHINGTON MUTUAL BANK,
FORMERLY KNOWN AS WASHINGTON MUTUAL BANK, F.A.,

Appellee.

No. 4D14-3799

[March 23, 2016]

Appeal from the Circuit Court for the Seventeenth Judicial Circuit,
Broward County; Thomas M. Lynch, IV, Judge; L.T. Case No.
CACE09024572(11).

Paul Alexander Bravo of P.A. Bravo, Coral Gables, and Ricardo Manuel
Corona of Corona Law Firm, Miami, for appellants.

Nancy M. Wallace of Akerman LLP, Tallahassee, William P. Heller of
Akerman LLP, Fort Lauderdale, and Kathryn B. Hoeck of Akerman LLP,
Orlando, for appellee.

MAY, J.

The number of entities through which the note and mortgage traveled
complicates the facts. The bottom line, however, is JPMorgan Chase Bank,
National Association’s (“JPMorgan”) failure to prove standing requires a
reversal of the final judgment of foreclosure.

The borrower executed a mortgage and note in favor of Washington
Mutual Bank F.A. (“WAMU”). On March 5, 2008, the borrower quit-
claimed the property to Ottoniel Cruz and Luz Cruz (“owners”). On
September 25, 2008, the Federal Deposit Insurance Corporation (“FDIC”),
receiver for WAMU, sold substantially all assets and liabilities of WAMU to
JPMorgan through a purchase and assumption agreement (“PAA”).

Section 3.1 of the PAA reads, in part, “[T]he Assuming Bank hereby
purchases from the receiver, and the Receiver hereby sells, assigns,

transfers, conveys, and delivers to the Assuming Bank, all right, title, and
interest of the receiver in and to all of the assets (real, personal and mixed,
wherever located and however acquired) . . . of the Failed Bank.”

Section 3.2 reads, in part, “All Assets and assets of the Failed Bank
subject to an option to purchase by the Assuming Bank shall be purchased
for the amount . . . as specified on Schedule 3.2, except as otherwise may
be provided herein.” Section 3.3 reads, in part, “[T]he conveyance of all
assets . . . purchased by the Assuming Bank under this agreement shall
be made, as necessary, by Receiver’s deed or Receiver’s bill of sale.”
Section 6.2 obligates the FDIC to deliver assets, including loan documents,
“as soon as practicable on or after the date of this Agreement.”

The “Settlement Date” is defined as “the first Business Day immediately
prior to the day which is one hundred eighty (180) days after Bank Closing,
or such other date prior thereto as may be agreed upon by the Receiver
and the Assuming Bank.” Article X explains that as a condition precedent,
the parties were subject to the Receiver “having received at or before the
Bank Closing, evidence reasonably satisfactory to each of any necessary
approval, waiver, or other action by any governmental authority . . . with
respect to this Agreement.”

On December 1, 2008, the owners defaulted by failing to pay their
monthly payment. WAMU sent the default notice on January 28, 2009.
On April 29, 2009, JPMorgan filed a foreclosure action. The complaint
included a count to reestablish a lost note and a count for foreclosure of
the mortgage. JPMorgan alleged that it “owns and holds said note and
mortgage.” The lost note count stated that the note “has been lost or
destroyed and is not in the custody or control of the Plaintiff who is the
owner and holder of the subject Note and Mortgage and its whereabouts
cannot be determined.” It also stated that JPMorgan or its predecessors
were in possession of the note and were entitled to enforce it when the loss
occurred, and “[t]he loss of possession was not the result of a transfer or
a lawful seizure.”

Attached to the complaint was a copy of the mortgage, but not a copy
of the note. On October 26, 2009, JPMorgan dropped the lost note count.

On April 12, 2010, the owners filed their answer and asserted several
affirmative defenses, including lack of standing and failure to comply with
conditions precedent.

In January 2014, JPMorgan transferred its ownership interests in the
mortgage to PennyMac Corporation (“PennyMac Corp.”). On February 21,

2014, the FDIC executed an assignment of the mortgage to JPMorgan. The
assignment read, in part, “This Assignment is intended to further
memorialize the transfer that occurred by operation of law on September
25, 2008 as authorized by Section 11(d)(2)(G)(i)(II) of the Federal Deposit
Insurance Act, 12 U.S.C. § 1821(d)(2)(G)(i)(II).”

On February 21, 2014, JPMorgan then executed an assignment of
mortgage in favor of PennyMac Corp. Servicing of the loan was transferred
from JPMorgan to PennyMac Loan Services, LLC (“PennyMac Loan
Services”), which was the servicer at the time of trial. On August 1, 2014,
JPMorgan moved to substitute PennyMac Corp. as party plaintiff, but the
motion was never heard.

PennyMac Corp. allegedly discovered a week before trial that the
original note was lost. On August 22, 2014, JPMorgan moved to amend
the complaint to add a lost note count, and attached an affidavit from a
PennyMac Loan Services foreclosure operations supervisor. The trial court
denied the motion the day before the trial began.

On August 28, 2014, the case proceeded to a non-jury trial. JPMorgan
called PennyMac Loan Services’ foreclosure operations supervisor as its
witness. She testified that PennyMac Loan Services serviced the loan on
behalf of the current owner, PennyMac Corp., and JPMorgan was the prior
servicer.

She did not have the original note with her because it was lost or
destroyed. The note “was lost after the complaint was filed,” but before it
acquired servicing rights. PennyMac Loan Services conducted its due
diligence, reached out to prior foreclosure counsel, and checked the court
docket to see if the original note was already filed, but it was unable to
find the original note.

The witness reviewed PennyMac Loan Services’ records, and the
original note was not transferred to anyone else or seized by anyone.
PennyMac Corp. was willing to indemnify the note maker for any claims
that might be placed because of the loss. She obtained the copy of the
note from PennyMac Loan Services’ business records, which were
uploaded by PennyMac Loan Services’ loan boarding department at the
time PennyMac Loan Services acquired servicing rights of the subject loan.

When JPMorgan attempted to move the copy of the note into evidence,
defense counsel questioned the witness, and objected to the introduction
of the copy of the note “based on the evidence rule and . . . trustworthiness
and authenticity of it.” Counsel also argued that no reestablishment count

was pending before the court and “their complaint only seeks mortgage
foreclosure and they dropped the establishment of lost mortgage note back
in I believe 2010 . . . . [T]hey are asking the Court to improperly amend
their pleadings . . . .”

JPMorgan responded that it was not asking the court to amend because
“[t]he lost note count is the count that has become tradition to put in the
complaint,” but “it is actually an evidentiary matter.” The trial court
overruled the objection and admitted the copy of the note. The court also
admitted, among other things, a copy of the PAA.

At the end of the trial, the owners moved for an involuntary dismissal,
arguing JPMorgan was required to produce the original note and failed to
comply with the conditions precedent to filing the foreclosure action. The
trial court denied the motion.

The trial court granted final judgment of foreclosure in favor of
JPMorgan. From this judgment, the owners now appeal.

The owners argue JPMorgan failed to prove it had standing to foreclose
at the case’s inception and when the trial court entered final judgment.
JPMorgan failed to attach a copy of the note to the complaint. The copy of
the note that was eventually filed had an undated blank endorsement and
JPMorgan failed to elicit testimony regarding the endorsement date.
JPMorgan also introduced an assignment of mortgage showing its rights
were transferred to PennyMac Corp. six months before trial.

JPMorgan responds that standing is determined at the time suit is filed,
not at the time of trial. The endorsement date was immaterial because it
proved ownership and did not rely on the endorsement. It was authorized
under the Florida Rules of Civil Procedure to continue the action in its
name after transferring its interest to PennyMac Corp.

The owners reply that the evidence failed to establish JPMorgan
acquired standing. The PAA did not provide for the purchase of all WAMU’s
assets, and required a separate conveyance instrument for assets actually
purchased. The PAA provided only that JPMorgan had the right to
purchase certain WAMU assets from the FDIC, but nothing shows any
property was transferred, and 12 U.S.C. § 1821 does not save JPMorgan.

This Court reviews whether a party has standing to bring an action de
novo. Dixon v. Express Equity Lending Grp., LLLP, 125 So. 3d 965, 967
(Fla. 4th DCA 2013).

“A crucial element in any mortgage foreclosure proceeding is that the
party seeking foreclosure must demonstrate that it has standing to
foreclose” when the complaint is filed. McLean v. JP Morgan Chase Bank
Nat’l Ass’n, 79 So. 3d 170, 173 (Fla. 4th DCA 2012). “[S]tanding may be
established from the plaintiff’s status as the note holder, regardless of any
recorded assignments.” Id. (citation omitted). “If the note does not name
the plaintiff as the payee, the note must bear a special endorsement in
favor of the plaintiff or a blank endorsement.” Id. The plaintiff may also
show “an affidavit of ownership to prove its status as a holder of the note.”
Id.; see Sosa v. U.S. Bank Nat’l Ass’n, 153 So. 3d 950, 951 (Fla. 4th DCA
2014).

“A plaintiff alleging standing as a holder must prove it is a holder of the
note and mortgage both as of the time of trial and also that [it] had
standing as of the time the foreclosure complaint was filed.” Kiefert v.
Nationstar Mortg., LLC, 153 So. 3d 351, 352 (Fla. 1st DCA 2014) (emphasis
added).

Such a plaintiff must prove not only physical possession of
the original note but also, if the plaintiff is not the named
payee, possession of the original note endorsed in favor of the
plaintiff or in blank (which makes it bearer paper). If the
foreclosure plaintiff is not the original, named payee, the
plaintiff must establish that the note was endorsed (either in
favor of the original plaintiff or in blank) before the filing of the
complaint in order to prove standing as a holder.

Id. at 353 (internal citations omitted). “A plaintiff’s lack of standing at the
inception of the case is not a defect that may be cured by the acquisition
of standing after the case is filed and cannot be established retroactively
by acquiring standing to file a lawsuit after the fact.” LaFrance v. U.S.
Bank Nat’l Ass’n, 141 So. 3d 754, 756 (Fla. 4th DCA 2014) (citation
omitted) (internal quotation marks omitted).

A “person entitled to enforce” an instrument is: “1) [t]he holder[1] of the
instrument; 2) [a] nonholder in possession of the instrument who has the
rights of a holder; or 3) [a] person not in possession of the instrument who
is entitled to enforce the instrument pursuant to s[ection] 673.3091 or
s[ection] 673.4181(4).” § 673.3011, Fla. Stat. (2014); see Mazine v. M & I
Bank, 67 So. 3d 1129, 1131 (Fla. 1st DCA 2011). “A person may be a

1 A “holder” is defined as “[t]he person in possession of a negotiable instrument
that is payable either to bearer or to an identified person that is the person in
possession.” § 671.201(21)(a), Fla. Stat. (2014).

person entitled to enforce the instrument even though the person is not
the owner of the instrument or is in wrongful possession of the
instrument.” § 673.3011, Fla. Stat.

JPMorgan alleged that it was the note holder, but it failed to prove its
holder status at trial. JPMorgan did not attach the note to the complaint.
It introduced a copy of the note at trial, which contained an attached
allonge indicating a blank endorsement from “JP Morgan Chase Bank, NA
Successor in Interest by Purchaser from the FDIC as receiver of
Washington Mutual Bank F/K/A Washington Mutual Bank, FA.”
However, PennyMac Loan Services’ witness did not testify to when the
allonge was attached to the note or when the endorsement occurred. No
other record evidence indicated when it occurred or when JPMorgan
became the note holder. See Peoples v. Sami II Trust 2006–AR6, 178 So.
3d 67, 69–70 (Fla. 4th DCA 2015).

Although JPMorgan does not meet any of the requirements of a holder—
and does not attempt to prove it did—it argues it proved standing because
it owned the note and mortgage when it initiated the foreclosure action. It
argues the 2008 PAA and a 2014 assignment of mortgage proved
ownership. We disagree.

To prove its standing to foreclose, JPMorgan would have to prove it was
“[a] person not in possession of the instrument who is entitled to enforce
the instrument pursuant to s[ection] 673.3091 or s[ection] 673.4181(4).”
§ 673.3011(3), Fla. Stat. “[N]othing in [section 673.3011] allows an ‘owner’
to enforce the note without possession, except where the instrument is lost
or destroyed.” Snyder v. JP Morgan Chase Bank, Nat’l Ass’n, 169 So. 3d
1270, 1273 (Fla. 4th DCA 2015). Therefore, JPMorgan would have to
prove: (1) it was the owner, and (2) reestablishment of the lost note under
section 673.3091. See id.

Here, there was no proof that JPMorgan had possession of the note at
the time it filed the complaint. JPMorgan acknowledged that the note was
lost and not in its custody or control. Because the original note was never
filed with the court and there was no other evidence of possession, no
competent substantial evidence exists of possession. See id. at 1272. And,
similar to Snyder, there exists no competent substantial evidence of
ownership. The PAA has caveats where JPMorgan could refuse to acquire
assets and there is no record evidence that the FDIC transferred the note
to JPMorgan before the complaint was filed. Id. We reverse the final
judgment of foreclosure based on JPMorgan’s failure to prove standing.

Reversed.

FORST, J., and SCHER, ROSEMARIE, Associate Judge, concur.

* * *

Not final until disposition of timely filed motion for rehearing.

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SOSA v THE BANK OF NEW YORK MELLON | FL 4DCA – the witness’s entire body of knowledge on the subject was limited to what the witness learned from a search on “the internet.” Such evidence is not competent to establish the Bank’s standing as nonholder in possession with the rights of a holder.

SOSA v THE BANK OF NEW YORK MELLON | FL 4DCA – the witness’s entire body of knowledge on the subject was limited to what the witness learned from a search on “the internet.” Such evidence is not competent to establish the Bank’s standing as nonholder in possession with the rights of a holder.

H/T CORONA LAW FIRM

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA

FOURTH DISTRICT

JORGE SOSA and JEANETTE SOSA,

Appellants,

v.

THE BANK OF NEW YORK MELLON, f/k/a THE BANK OF NEW YORK
AS SUCCESSOR IN INTEREST TO JP MORGAN CHASE BANK, N.A.,
AS TRUSTEE FOR STRUCTURED ASSET MORTGAGE INVESTMENTS
II, INC., BEAR STEARNS ALT-A TRUST 2005-2, MORTGAGE PASS-
THROUGH CERTIFICATES, SERIES 2005-2,

Appellee.

No. 4D14-810

[March 23, 2016]

Appeal from the Circuit Court for the Seventeenth Judicial Circuit,
Broward County; John J. Murphy, III, Judge; L.T. Case No. 09-321 (11).

Krista Bordatto and Ricardo Corona of Corona Law Firm, P.A, Miami,
for appellants.

Donna L. Eng, Michael K. Winston and Dean A. Morande of Carlton
Fields Jorden Burt, P.A., West Palm Beach, for appellee.

DAMOORGIAN, J.

This is an appeal from a residential foreclosure which ended in
judgment in favor of Bank of New York Mellon (“the Bank”). On appeal,
Jorge and Jeanette Sosa (“Homeowners”) argue, inter alia, that the Bank
failed to prove it had standing to bring the action. We agree and reverse.

The following facts are pertinent to the standing issue. The Bank filed
a mortgage foreclosure complaint against Homeowners alleging one count
of foreclosure and one count for reestablishment of a lost note. Although
it was not the original lender, the Bank alleged that it was the owner and
holder of the Note and Mortgage and, in support, attached a copy of the
Note containing a blank indorsement.

The matter proceeded to a bench trial. At the onset, the Bank
announced it had located the original Note and intended to submit it as

evidence. The Bank then called a loan verification analyst for its purported
servicer, Wells Fargo Bank, N.A., as its only witness. Through the analyst,
the Bank introduced the original Note which, unlike the copy of the Note
attached to its complaint, was specially indorsed to JP Morgan Bank as
Trustee (“JP Morgan”). When asked about her knowledge of how the Bank
acquired the Note from JP Morgan, the witness testified that she learned
about the transfer through general research she did “on the internet” and
that “the internet will illustrate the transfer occurred in 2006.” The Bank
did not present any additional evidence establishing that it acquired the
Note prior to filing the foreclosure action.

At the conclusion of the witness’ testimony, the Bank rested. At that
point, Homeowners moved for an involuntary dismissal, arguing that the
Bank failed to establish it had standing. Homeowners pointed out that
the Note was indorsed to JP Morgan and there was no evidence
establishing a relationship between JP Morgan and the Bank. The Bank
countered that it identified itself as the successor in interest to JP Morgan
in the style of the complaint. The court denied Homeowners’ motion and
ultimately entered judgment in favor of the Bank. This appeal follows.

It is axiomatic that in a foreclosure case, “the plaintiff must prove that
it had standing to foreclose when the complaint was filed.” McLean v. JP
Morgan Chase Bank Nat’l Ass’n, 79 So. 3d 170, 173 (Fla. 4th DCA 2012).
“A plaintiff who is not the original lender may establish standing to
foreclose a mortgage loan by submitting a note with a blank or special
[i]ndorsement, an assignment of the note, or an affidavit otherwise proving
the plaintiff’s status as the holder of the note.” Focht v. Wells Fargo Bank,
N.A., 124 So. 3d 308, 310 (Fla. 2d DCA 2013). A plaintiff can also establish
standing by submitting evidence that an equitable transfer of the mortgage
and note occurred before the filing of a foreclosure complaint. See McLean,
79 So. 3d at 173.

In the case of a note bearing a special indorsement, under section
673.2051(1), Florida Statutes (2014), the “instrument becomes payable to
the identified person and may be negotiated only by the indorsement of
that person.” See also Dixon v. Express Equity Lending Grp., LLP, 125 So.
3d 965, 967–68 (Fla. 4th DCA 2013) (holding the bank which filed the
foreclosure complaint did not have standing to foreclose when the original
note contained a special indorsement in favor of another party). “Where a
bank is seeking to enforce a note which is specially indorsed to another,
the bank is a nonholder in possession.” Bank of New York Mellon Trust
Co., N.A. v. Conley, 41 Fla. L. Weekly D127, D127 (Fla. 4th DCA Jan. 6,
2016). “A nonholder in possession may prove its right to enforce the note
through: (1) evidence of an effective transfer; (2) proof of purchase of the

debt; or (3) evidence of a valid assignment.” Id. “A nonholder in possession
must account for its possession of the instrument by proving the
transaction (or series of transactions) through which it acquired the note.”
Id.

Here, the Bank claims that it presented through its witness’s testimony
substantial, competent evidence that the Bank was the successor trustee
to JP Morgan and, thus, had standing to sue under the Note. The Bank’s
position is patently overstated. The witness did not work for the Bank or
JP Morgan and was unable to describe the relationship between the two.
Moreover, the witness’s entire body of knowledge on the subject was
limited to what the witness learned from a search on “the internet.” Such
evidence is not competent to establish the Bank’s standing as nonholder
in possession with the rights of a holder. Accordingly, we reverse and
remand for entry of an order of involuntary dismissal of the action. See
Balch v. LaSalle Bank N.A., 171 So. 3d 207, 209 (Fla. 4th DCA 2015)
(reversing and remanding for entry of an order of involuntary dismissal
when the bank failed to provide sufficient evidence of its standing).

Reversed and remanded.

MAY and GERBER, JJ., concur.

* * *

Not final until disposition of timely filed motion for rehearing.

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In Defense of “Free Houses” | Megan Wachspress, Jessie Agatstein & Christian Mott

In Defense of “Free Houses” | Megan Wachspress, Jessie Agatstein & Christian Mott

 

In Defense of “Free Houses”

Megan Wachspress, Jessie Agatstein & Christian Mott

<SNIP>

Banks have lost many foreclosure cases for two reasons, both resulting from recent changes in the mortgage market. First, securitization has created widespread errors in mortgage notes’ chains of assignment, making it difficult for banks to prove that they in fact own any particular mortgage. Second, securitization contracts incentivize banks to use “foreclosure mill” law firms to keep up with the flood of defaults, despite the fact that these firms are unable and sometimes unwilling to detect and rectify basic legal errors.

When addressing faulty foreclosures, courts are afraid to bar future attempts to foreclose—that is, afraid of giving borrowers “free houses.” While courts rarely explain the reasoning behind this aversion, it seems to arise from a reflexive belief that such an outcome would be unjust.1 Courts are therefore quick to sidestep well-established principles of res judicata in favor of ad hoc measures meant to protect banks against the specter of “free houses.”

 

_________________________________

Yale Law Journal – In Defense of “Free Houses”

by M Wachspress

Feb 4, 2016 – In Defense of “Free Houses”. Megan Wachspress,
Jessie Agatstein & Christian Mott. Eight years after the start of
America’s housing crisis, state …
_________________________________

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Wells Fargo Bank, N.A. v Russo | NYSC – “In fact the mortgage industry would have been better served by purchasing Snow White’s wicked stepmother’s magic mirror at her estate sale and asking it to pass on borrower’s mortgage applications rather than relying on mortgage brokers. At least the mirror’s response would be truthful”

Wells Fargo Bank, N.A. v Russo | NYSC – “In fact the mortgage industry would have been better served by purchasing Snow White’s wicked stepmother’s magic mirror at her estate sale and asking it to pass on borrower’s mortgage applications rather than relying on mortgage brokers. At least the mirror’s response would be truthful”

Decided on March 9, 2016

Supreme Court, Richmond County

 

Wells Fargo Bank, N.A., Plaintiff,

against

Rose Marie Russo A/K/A ROSEMARIE RUSSO, NEW YORK CITY ENVIRONMENTAL CONTROL BOARD, NEW YORK CITY TRANSIT ADJUDICATION BUREAU, CONNIE RUSSO MICHAEL RUSSO, Defendants.

101249/08

(P)Hogan Lovells US LLP875 Third AvenueNew York, NY 10022

(D)Nicholas Moccia

60 Bay Street

Staten Island, NY 10301
Philip S. Straniere, J.

The following items were considered in the review of this Motion to Vacate, Cross Motion and Motion to Vacate:

PapersNumbered

Notice of Motion 1

Notice of Cross-Motion 2

Notice of Motion 3

Plaintiff’s Memorandum in Opposition 4

Defendants’ Affirmation in Opposition 5

Plaintiff’s Reply Memorandum of Law 6

Exhibits Attached to Papers

HON. PHILIP S. STRANIERE, J.

Upon the foregoing cited papers, the Decision and Order on this Motion is as follows:

Plaintiff, Wells Fargo Bank, NA, commenced this residential foreclosure proceeding against the defendants, Rose Marie Russo a/k/a Rosemarie Russo, New York City Environmental Control Board, New York City Transit Adjudication Bureau, Connie Russo and Michael Russo. The defendants have never answered although they have participated in conferences in regard to this action at least since 2013. Plaintiff and the defendants Rosemarie Russo and Michael Russo are represented by counsel.

Currently before the court is plaintiff’s motion to:

1. appoint a referee to ascertain the amount due plaintiff and to sell the parcels;

2. amend the caption to substitute Connie Russo and Michael Russo in place of the “John Doe” defendants; and

3. amend the caption to reflect the plaintiff to be Deutsche Bank National Trust Company, as Trustee for GSAA Home Equity Trust 20067-18 Asset-Backed Certificates, Series 2006-18 (Deutsche).

Defendant Rosemarie Russo, defendant Michael Caruso s/h/a Michael Russo have cross-moved to:

1. schedule a settlement conference;

2. stay plaintiff’s motion in light of the Special Referee finding plaintiff negotiated in bad faith in violation or CPLR §3408;

3. dismiss the complaint pursuant to CPLR §3215(c) for plaintiff’s failure to enter a judgment within one year of defendant’s default; and

4. vacate defendant’s default and permitting defendants to file an answer with counterclaims; and production of the original note.

There is a second motion by the plaintiff to vacate the findings of lack of good faith in negotiating modification of the loan by the referee including any financial penalties imposed. Defendants opposed the motion.

Background:

The records of the Richmond County Clerk reveal the following information.

On February 26, 2004, defendant Rose Marie Russo (Russo) purchased the subject premises 1276 Drumgoole Road East, Staten Island, New York for $572,400.00. The sellers were Richard Bonanno and Connie Bonanno, husband and wife. The premises is a legal two-family with a certificate of occupancy having been issued on October 29, 2002.

To finance the purchase Russo secured a mortgage from Berkshire Financial Group, Inc. with a 30 year term in the amount of $475,000.00. The mortgage document had the name “Michael Catanzaro” as an additional borrower. It did not identify what his legal relationship was to Russo or the property. Catanzaro’s name was crossed-out on the mortgage and he did not execute the instrument.

In March 2005, Russo took a second mortgage with a 15 year term from The CIT Group/Consumer Finance, Inc. (NY) in the amount of $106,000.00. The mortgage indicated her status as “married.” The name of the spouse is not disclosed on the instrument and the loan is only in her name.

On May 19, 2006 defendant Rose Marie Russo individually, borrowed $635,000.00 from Wells Fargo Bank, NA (Wells) and executed a promissory note in that amount which was secured by a mortgage which she also signed on that date. Neither document indicates her marital status. The proceeds of the Wells mortgage were used to satisfy both the Berkshire and the CIT Group loans. Satisfactions were filed for both debts in June 2006.

Russo defaulted on the terms of the Wells agreement in late 2007 and on January 7, 2008 Wells issued a notice of default to her. In March 2008 Wells commenced this litigation by filing a summons and complaint and notice of pendency. Russo neither appeared nor answered. In June 2008 Wells sought the appointment of a referee owing to the failure of any defendant to appear or answer. An application for judgment of foreclosure and sale was rejected by the court in February 2009.

Thereafter a tortured procedural history ensued with much of the problems arising because the original attorney of record was Steven J. Baum, PC, whose office practices were called into question by regulators and which resulted in a consent order being entered into with the New York Attorney General. Baum was forced to cease all foreclosure litigation representation. Thereafter, new counsel appeared for plaintiff Wells.

Observations:

1.If the mortgage industry had put in one-tenth of the time in screening borrowers and properties before making this and other loans as it does in having to litigate bad loans and negotiate foreclosure modifications, the court probably would not be involved at all. The financial services industry in the first decade of this century failed to adhere to the “Humpty Dumpty Rule” which is that all the sovereign’s horses and all the sovereign’s men couldn’t put Humpty together again (the court has made the nursery rhyme gender neutral and notes that the obituary in the New York Times referred to Humpty either as Mr. or Ms. Dumpty as the case may be). Had lenders and the federal government focused on making sure that Humpty never got on top of the wall in the first place, the courts would not be buried in “eggs-crement.”

In fact the mortgage industry would have been better served by purchasing Snow White’s wicked stepmother’s magic mirror at her estate sale and asking it to pass on borrower’s mortgage applications rather than relying on mortgage brokers. At least the mirror’s response would be truthful.

2.The record establishes that Wells made this loan in 2006 to Russo without her having any source of income. This being the case, maybe Wells got exactly what it bargained for, a mortgagor who could not repay the loan. Based on this, why was Wells surprised it had to foreclose. Maybe the action should be barred because of Well’s initial unwarranted optimism. [*2]On the other hand, even a murder of crows had to eat their words when they observed that an elephant could fly.

Perhaps the mortgage broker who structured this transaction should be put under oath to explain how this loan was supposed to be paid back. Unfortunately that might result in the court having to endure a modern version of “Pinocchio” as witnesses would have to relate the details of this transaction under oath. Parenthetically when the court inquired as to who and where the broker was, it got a shocked response from counsel similar to that of the first little pig (Fifer Pig in Disney’s version) when his straw house was blown down by the Big Bad Wolf. Perhaps the answer is that the broker’s name was Rumpelstiltskin and he disappeared when inquiry about or mention of his name is made.

The fact that some bureaucrat in the federal government thought it was a good idea to permit the financial services industry to create mortgage products where homeowners could borrow large sums of money without any source of income only reinforces the belief that “Fairy tales can come true. It can happen to you…[FN1] ” was the theme song of lender’s marketing these loan products. Because neither party has produced Russo’s application so as to permit the court the opportunity to rationally examine the origin of this defaulted loan, the court is forced to speculate as to how this happened. There are several possibilities as to how Wells believed repayment would be made.

A possible explanation is that Wells was convinced that Russo would repay the money from some magic beans she acquired which would permit her to ascend to the clouds and steal a giant’s gold. Or maybe while other Staten Islanders were dodging turkeys Russo had found a goose that laid golden eggs. Another source of repayment might be if Russo had inherited a spinning wheel that turned straw into gold.

A more reasonable possibility might be that Russo was planning to “flip” the house within a short period of time and needed monies to make some repairs in order to increase its market value. Although this is pure speculation by the court, there may be some credence to this scenario because the prepayment clause of the note which provided for no prepayment penalty was amended by a rider permitting Wells to charge a 3% penalty for prepayment during the first year of the loan. A similar rider is attached to the mortgage. Why included such a clause unless Wells was under the impression that the loan would be repaid shortly and it would not generate all of the anticipated income over the loans thirty year term.

Based on how this transaction has turned out, Wells would have been better off with one of the “fairy tale” solutions. At least in some of them everyone “lives happily ever after.”

Legal Issues Presented:

A. Does the Defendant Have a Right to a Mandatory Settlement Conference?

Defendant Russo as well as the other individually named defendants defaulted in appearing and answering. Eventually defendant Russo and Caruso retained counsel and moved to vacate their default and file an answer. Defendant also sought a mandatory settlement conference pursuant Civil Practice Law & Rules §3408. The current statute effective February 13, 2010 provides:

In any residential foreclosure action involving a home loan as such term is defined in section thirteen hundred four of the real property actions and proceedings law, in which the defendant is a resident of the property subject to foreclosure, plaintiff shall file proof of service within twenty days of such service, however service is made, and the court shall hold a mandatory conference within sixty days after the date when proof of such service upon such defendant is filed with the county clerk, or on such adjourned dates as has been agreed to by the parties, for the purpose of holding settlement discussions pertaining to the relative rights and obligations of the parties under the mortgage loan documents, including, but not limited to determining whether the parties can reach a mutually agreeable resolution to help the defendant avoid losing his or her home, and evaluating the potential for a resolution in which payment schedules or amounts may be modified or other workout options may be agreed to, and for whatever other purposes the court deems appropriate.

However, this action was commenced with the filing of summons and complaint on March 24, 2008 before the above statute went into effect. At that time CPLR §3408 contained different language which limited the ability to have a mandatory settlement conference only to certain loans. It provided:

In any residential foreclosure action involving a high-cost home loan consummated between January first two thousand three and September first, two thousand eight, or a sub-prime or nontraditional loan, as those terms are defined under section thirteen hundred four of the real property actions and proceedings law, in which the defendant is a resident of the property subject to foreclosure, the court shall hold a mandatory conference within sixty days after the date when proof of service is filed with the county clerk, or such adjourned date as has been agreed to by the parties, for the purpose of holding settlement discussions pertaining to the relative rights and obligations of the parties under the mortgage loan documents, including but not limited to determining whether the parties can reach a mutual agreeable resolution to help the defendant avoid losing his or her home and evaluating the potential for a resolution in which payment schedules or amounts may be modified or other workouts options may be agreed to, and whatever other purposes the court deem appropriate.

Case law has determined that the form of the statute in effect when the action was commenced governs the procedure to obtain a CPLR §3408 mandatory settlement conference [Federal National Mortgage Association v Anderson, 119 AD3d 892 (2014)]. This means that in order for Russo to be entitled to a settlement conference the underlying loan must be either a “high-cost home loan,” or a “sub-prime or nontraditional loan.” There is nothing in the record by which the court could determine if defendant was entitled to a mandatory settlement conference when the action was commenced in 2008. Neither side has addressed this issue.

There are some conclusions in papers submitted by counsel for plaintiff in regard to prior motions where plaintiff’s counsel unilaterally concludes that the defendants did not qualify for a [*3]mandatory settlement conference in 2008 because it was not either a high-cost, sub-prime or nontraditional loan. In fact, plaintiff’s counsel alleged that the loan is not even a “home” loan under Banking Law §6-l(1)(e)(i) which provides:

“Home loan” means a loan,…(i) The principal amount of the loan at origination does not exceed the conforming loan size limit (including any applicable special limit for jumbo mortgages) for a comparable dwelling as established from time to time by the federal national mortgage association;…

In an effort to substantiate this allegation, plaintiff submitted a chart showing the Fannie Mae Historical Conventional Loan Limits. In 2006 when the loan was made to Russo, the loan limit was $533,850.00. The Wells mortgage amount was $635,000.00. Absent a showing that this loan exceeded the appraisal value, it must be concluded it was a “jumbo mortgage” made within lending guidelines. The loan is 19% above the Fannie Mae limit in 2006. The interest rate of 7.85% may also reflect that it is a jumbo loan as that may be a higher rate than was being charged for conventional loans in 2006. Traditionally, jumbo loans have higher interest rates. The information provided by plaintiff is of no use in determining if the loan is either a high-cost, sub-prime or nontraditional loan under the Banking Law because none of the numbers needed to evaluate the loan in that regard have been provided. This makes plaintiff’s representation unsubstantiated.

The record appears to reflect that in spite of the defendants’ failure to appear or answer, once they did the parties treated the litigation as being subjected to the post 2010 criteria for a mandatory settlement conference. The parties did in fact conference the case with the court record disclosing numerous attempts to modify the loan. None of them were successful, but negotiations were ongoing between the parties over the last few years beginning in 2009. It should be noted that although not a party to the note and mortgage based on the transcript from the hearing in June 2014, Caruso apparently has participated in the settlement discussions even providing evidence of his financial status so as to be considered a contributor to the household income under modification guidelines.

The question must be asked, if the defendant had no right to a settlement conference under the statute, how can the plaintiff be held to have failed to negotiate in “good faith” as the court appointed referee found. Especially if the defendant defaulted in appearing and answering.

The Rules of the Supreme Court governing Residential Mortgage Foreclosure Actions; Settlement Conference [22 NYCRR §202.12-a] gives some guidance. Once again there is difference between the current law and that which existed in 2008. Both rules require a notice being sent promptly by the court after the filing of the Request for Judicial Intervention (RJI) to “all parties or their attorneys” scheduling a settlement conference within 60 days. The statute does not indicate whether “parties” refers to “named parties” or “answering parties.”

The RJI was filed on June 25, 2008. As the purpose of the statute is to prevent foreclosure on residential properties if possible, this would seem to give the defendants the right to participate in a settlement conference irrespective of their failure to appear and answer in the litigation. Why a defendant would opt to participate in settlement conferences without answering does not [*4]make sense. But apparently that is what happened in this case starting in 2013, although there is some indication that defendants may have retained counsel in 2011 and negotiations took place even at that time.

That being the case, there is a major difference between the current Rule 202.12-a and the one in effect in 2008 when a conference could have been requested. The Rule now in effect at section (c)(1) specifically makes the conference subject to CPLR §3408 while the 2008 version does not contain that reference. There are other differences.

Paragraph (4) of the current Rule requires:

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 the conferences not be unduly delayed or subject to dilatory tactics so that the rights of the parties may be adjudicated in a timely manner.

No such language exists in the Rule in effect in 2008. Which means that only the general common law duty to negotiate in good faith governed these conferences as opposed to the one now imposed in CPLR §3408(f) and Rule 202.12-a.

On the one hand it could be argued that public policy and the desire to try to resolve residential foreclosures if at all possible so as to keep persons in their homes, dictates applying the current rule to the negotiations between the parties. But doing so places the plaintiff in a less favorable position then it would be in had the defendants either timely appeared and answered or even just showed up and requested as settlement conference. In fact, the current Rule warns against rewarding parties for “dilatory” practices. Defendants doing nothing for over five years, not providing a reasonable explanation for the delay and then seeking to negotiate at a time when there are new restrictions on the plaintiff, seems to be a delaying tactic that the Rule would want to discourage. To apply the “good faith” standard of the post-2010 Rule, would reward the defendants for their failure to take any steps to protect their rights.

It must be concluded that the defendants even if never appearing and answering had the right to a settlement conference in 2008 after the RJI was filed and they never took advantage of that opportunity at that time. Irrespective of their default, they eventually took some interest in the litigation, sometime in 2011 according to the referee, and have in fact negotiated with the plaintiff in an effort to settle the matter at various times since that date.

The facts reveal that the defendants have in fact had the advantage of participating in settlement conferences even though they remain in default.

B. What Are Defendants’ Rights in this Matter?

It is uncontroverted that the action was commenced in March 2008 and that the defendants failed to appear and answer. Apparently in November 2013, defendants awoke from their five plus year slumber (beating Rip Van Winkle by fifteen years and Sleeping Beauty by ninety-five), [*5]retained counsel and sought to vacate their default and file an answer by submitting a motion to do so returnable in January 2014. Unfortunately there is nothing in the court record to indicate if this motion was granted or denied. Instead the matter was referred to a referee to “hear and report/determine” the issues of “whether interest should be decreased, whether 6000 should be deducted and all other arguments concerning mitigation of damages.”

In the current motions before the court, plaintiff asserts that the issue of whether the defendants could appear and answer was never ruled upon by Judge McMahon. Defendants do not challenge that and have resubmitted their motion to vacate their default and file an answer. This course of action leads to the conclusion the issue was not addressed and defendants are still technically in default.

The above being said, if the defendants are in default, and they have no statutory right to a mandatory settlement conference, then what was there to send to the referee to “hear and report/determine?” As noted above, the rule in effect in 2008 did not require statutorily imposed good faith negotiations, so how can the plaintiff be found to have been not in good faith when a serious question exists as to whether the defendants even had a right to a settlement conference at this point in the litigation. The referee should have applied the standards used for settlement conferences in 2008 and not as currently structured. Based on the language used in the report that is not what was done.

The referee in the “contentions of the parties” section of the report recites that the defendants argue that the plaintiff violated the “good faith” requirements of CPLR §3408. As pointed out above, when this action was commenced, there was no “good faith” requirement imposed by the statute. The rules in effect in 2008 are those which govern this transaction. This being the case, the referee’s conclusions must be rejected because the current standards were applied and not those in 2008. The analysis of good faith must be based on the common law standard and not the statutory standard of 2014 or the case law which developed over the period since “good faith” was added to the statute. It does not appear that this was the standard used.

The court record discloses that at least since 2013 when five settlement conferences took place, the parties have been engaged in modification or settlement negotiations, irrespective of defendants’ lack of a right to compel participation in such a process. In fact, according to the record of the hearing, there were modification discussions since 2009. Just because the court did not order or supervise modification negotiations does not change the essential nature of the parties actions. Allegations that defendants’ rights to settle this matter have somehow been impaired are not supported by the facts. The fact that the matter was not resolved on terms satisfactory to the defendants does not automatically rise to the level of lack of good faith on the part of the plaintiff.

The defendants’ rights have not been violated. They have fully participated in settlement negotiations. The imposition of penalties by the referee for lack of good faith must be vacated.

C. Are Defendants Permitted to Vacate Their Default and Answer?

Currently before the court is defendants’ motion to vacate their default and file a late answer. A previous cross-motion by defendants was made in January 2014 and remains in litigation limbo as there is no decision of the court specifically addressing that application. Defendants are seeking to vacate their default pursuant to CPLR §317 and not CPLR §5015 which also gives a defaulting defendant a remedy. CPLR §317 provides:

Defense by person to whom summons not personally delivered.

A person served with a summons other than by personal delivery to him…, who does not appear may be allowed to defend the action within in one year after he obtains knowledge of entry of the judgment, but in no event more than five years after such entry, upon a finding of the court that he did not personally receive notice of the summons in time to defend and has a meritorious defense.

Plaintiff’s process server achieved service on defendants by conspicuous or “affix and mail” service pursuant to CPLR§308(4). The notice was affixed on the door of the premises on April 8, 2008 and mailed on April 10, 2008 to defendants at 1276 Drumgoole Road East. Although this is considered “personal service” under the statute, it is not “personal delivery,” therefore defendants ostensibly qualify to assert this statute in an effort to vacate their default.

The argument that the process server affixed the summons and complaint to the neighbor’s house is a complete misinterpretation of the affidavits of service. They clearly state that the pleadings were posted on the property address 1276 Drumgoole Road East and that the process server confirmed it as the defendants’ address with the neighbor at 1272 Drumgoole Road East. As noted in plaintiff’s opposition to defendants’ motion, a mere denial of receipt of process generally is insufficient to invoke the protections of the statue so as to invalidate service.

Unfortunately, defendants have not met the second prong of the test so as permit vacating their default, that is, the existence of a meritorious defense. A claim that they were not properly served is not a “meritorious defense.” There is nothing contained in their proposed answer which challenges the essential allegations of the complaint that Russo borrowed the money and has failed to make payments as agreed.

On the other hand it appears that defendants’ time to act may not have run as yet because plaintiff has not yet entered a judgment against the defendants. Plaintiff’s original counsel sought an order of reference in July 2008, which was signed by Judge McMahon on July 22, 2008 and appointed a referee to compute and determine if the property may be sold. Thereafter plaintiff submitted an application for a Judgment of Foreclosure and Sale dated February 23, 2009, which allegedly was rejected by the court for formatting issues.

In November 2009, plaintiff submitted a new request for a Judgment of Foreclosure and Sale which was returnable on January 19, 2010. Plaintiff alleges that because it was processing a loan modification pursuant to the Home Affordable Modification Program (HAMP) which indicated that defendant Russo would qualify, they voluntarily withdrew the application for a Judgment of Foreclosure and Sale. If that information is correct, it means that the defendants were participating in the settlement conference procedure in 2010 even though they failed to appear or answer.

In August 2013, plaintiff voluntarily withdrew its Order of Reference existing from 2008 and sought a new Order of Reference in 2013. Plaintiff now has moved to file a new Order of Reference and entry of Judgment of Foreclosure and Sale.

This leads to the conclusion that there is no viable judgment in this action from which to trigger defendants’ right to seek to vacate its default. There is no impediment to them filing an answer even at this late date. Therefore, defendants’ motion to vacate their default and answer is not barred.

D. Should Plaintiff’s Action be Dismissed for Failure to Enter a Judgment Within One Year?

Defendants allege that pursuant to CPLR §3215(c) this action should be dismissed because of plaintiff’s failure to enter a judgment against the defendants within one year of defendants default. The statute provides:

(c) Default not entered within one year. If the plaintiff fails to take proceedings for the entry of judgment within one year after the default, the court shall not enter judgment but shall dismiss the complaint as abandoned, without costs, upon its own initiative or motion, unless sufficient cause is shown why the complaint should not be dismissed. A motion by the defendant under this subdivision does not constitute an appearance in the action.

Plaintiff in opposition asserts that prior counsel did “take proceedings” for the entry of a judgment in that it sought and received an Order of Reference in July 2008. Plaintiff points out that a Judgment of Foreclosure was submitted in February 2009 but rejected by the court for formatting issues. Plaintiff asserts that this meets the criterion for taking steps to enter the judgment. Also based on the history of the litigation with its record of attempts to modify the mortgage with court supervision, it is clear that it was never abandoned.

Defendants gave evidence to the referee that since 2010 they have been negotiating with the plaintiff in an effort to modify the terms of the loan. Is it “good faith” by the defendants to assert the plaintiff’s action should be deemed abandoned when the defendants have yet to appear and answer, while the parties negotiated modifications at various times over the last few years?

The court agrees with plaintiff. The history of this litigation establishes that there is “sufficient cause” to establish that this action has never been abandoned and the complaint should not be dismissed as permitted by the statute. Plaintiff may continue to pursue its right to foreclose once there is compliance with all statutory procedures.

E. May Plaintiff Amend the Caption and Complaint So As to Correct the Defendants’ Names?

Plaintiff wants to amend the complaint to change the “John Doe” defendants to Michael Russo and Connie Russo. Why it would want to do so when even these names may not be correct makes no sense. It seems that Michael Russo’s name is actually Michael Caruso and he is the husband of Russo and was at the time the mortgage was made. You would think the lender would have such information from Russo’s application. But perhaps those documents disappeared with “Rumpelstiltskin” the mortgage broker. None of this information is disclosed in [*6]the mortgage documents currently before the court. It was revealed in the motion papers. Because Wells now has the correct name why would plaintiff want to amend the caption to the wrong name?

There is nothing submitted as to whether Connie Russo is her correct name or is it Caruso or something else. One of the persons selling the property to Russo in 2004 was “Connie Bonanno.” Is it a coincidence that the first name of the defendant is the same first name of the person who sold the property or does she still reside there as a tenant? There is no indication as to what is Connie Russo’s connection to the premises. Is she a relative of Russo or a tenant or perhaps both?

The question must be asked how does plaintiff even have jurisdiction over persons sued with a name different than that of the actual persons residing at the premises especially when service of process was not made by personal delivery to the named defendants? Changing “John Doe” defendants to a named defendant with the wrong name in order to obtain a default judgment against them when the correct name is now known seems to raise a due process issue which even the Queen of Hearts might recognize as being a problem even though she was famous for ordering “off with their heads” for lesser infractions. The plaintiff cannot obtain personal jurisdiction over improperly named defendants served by conspicuous service whose true names are know and who may have occupancy rights in the premises.

Plaintiff has not obtained valid “affix and mail” service over any improperly named defendant. Had the process been personally delivered to the improperly named defendant, perhaps valid service been concluded. It would be hard for a party to claim the party was not served when process was actually delivered to that party when their actual name was unknown and they have some interest in the litigation requiring receipt of notice so as to meet due process requirements. How can conspicuous service over an improperly named defendant who fails to appear be valid? Plaintiff cannot be seriously arguing that personal jurisdiction was obtained over Caruso and Connie Russo in this manner. Because they have no ownership interest in the property nor are they obligated on the note and mortgage, perhaps there is no statute of limitations problem in serving them at this time. Although the parties have not specifically addressed this issue.

Plaintiff’s motion to amend the caption and complaint is granted to the extent that they submit a new complaint with the proper names of Caruso and Connie Russo and their relationship to the premises. Like the Three Bear’s House where there are two unacceptable bowls of porridge, plaintiff has not as yet become Goldilocks and found the bowl which is “just right.” Whether the court has jurisdiction over them is another issue not addressed by the parties in this action.

F. May Plaintiff Amend the Caption to the Name of the Current Note and Mortgage Holder?

Plaintiff seeks to amend the caption to change its name from Wells to Deutsche. Why Wells wants to amend the plaintiff’s name to Deutsche when Deutsche did not become owner of the note and mortgage until September 14, 2011 three and one-half years after the litigation was [*7]commenced is anybody’s guess. On the other hand, when some third party observer looks at this litigation and sees how messed up it is, it becomes apparent why Wells would not want to have its name being sullied by being linked to it. Especially if Deutsche was the owner of the debt in 2006.

CPLR §1018 permits the litigation to continue in the name of the original parties whenever there is a change in interest during the pendency of the action. It provides:

Upon any transfer of interest, the action may be continued by or against the original parties unless the court directs the person to whom the interest is transferred to be substituted or joined in the action.

This raises another question. Why on earth would Deutsche purchase a mortgage loan in September 2011 which had been in default since late 2007 and was already in the court system as a foreclosure action? Did Deutsche believe you really do not get turned into a donkey on Pleasure Island? Or maybe the explanation is that the note with the undated endorsement to Deutsche was actually sold shortly after the loan was made in 2006 and the assignment of the mortgage did not take place until 2011. Which would mean that Wells did not own the debt when the foreclosure was commenced. The 2006 purchase date would seem to comport with the 2006-18 number assigned by Deutsche to both the Asset Backed Certificate Series as well as for the GSAA Home Equity Trust. It may be an assumption but it would seem if Deutsche bought the debt in a year other than 2006, the number assigned would be for that year.

In fact, the assignment of mortgage makes no reference to the note and is labeled a “Default Assignment.” It would seem to indicate that Deutsche already had possession of the promissory note and, pursuant to the agreement between Wells and Deutsche, now was the proud holder of the mortgage as well.

Plaintiff is permitted to amend its name in the caption to reflect that Deutsche is the current owner of the debt. It does not affect defendants’ rights and obligations under the instruments. It does not change the fact that it is not Red Riding Hood’s grandmother in the bed. It still is the wolf. Defendants may still raise the defense that Wells did not having standing to commence this action in 2008 because it did not own or hold the debt at that time.

G. Is the Referee’s Report Valid?

Judge McMahon in March 2014 referred this matter Edward V. Corrigan, as Referee to “hear and determine” certain issues in this case. It is unclear whether the order was to hear and determine or hear and report as both words are underlined. However, the referee interpreted it as “hear and determine” and the parties participated in the process under that assumption.

Pursuant to CPLR §4001 & CPLR §4319 a reference to hear and determine becomes a finding of the court. The referee conducted a hearing over two days in June 2014 and must be applauded for his diligence in conducting the hearing and wading through the at times unexplainable history of this litigation.

Among the findings of the referee was one that plaintiff had acted not in good faith when it improperly calculated Michael Caruso’s overtime in making an offer to modify the mortgage in an amount the defendants could not reasonably pay. According to HAMP guidelines a non-borrower household member can become a “contributor” for refinancing purposes. Interestingly, Michael Caruso s/h/a Michael Russo was not signator to either the note or mortgage in 2004 yet apparently was married to Russo at the time. Only in the world of mortgage foreclosures would a bank lend money to a borrower without a source of income and then deny a refinancing of the debt based on income from someone who has no obligation to them and to whom they never looked to originally to secure the debt. Although this court may not have held that to be a lack of good faith, the referee who conducted the hearing did. To rectify this, the referee imposed penalties on the plaintiff which tolled interest and fees on the loan from July 17, 2013 forward.

As pointed out above, the court must now reject the referee’s findings as he applied the mortgage foreclosure rules in effect on the date of the hearing and not in effect when the action was commenced. Also, reviewing the submissions in regard to the motions and the transcripts of the hearings, it becomes apparent that plaintiff was not negotiating with a lack of “good faith.” There were numerous attempts to modify the mortgage. Plaintiff made legitimate business decisions based on HAMP guidelines. There is no showing that plaintiff violated those guidelines. The court feels on the merits the findings of the referee’s report must be rejected. There was no lack of good faith on the part of the plaintiff and the penalties imposed were not justified and should be vacated.

In fact, there is just as much evidence that the defendants did not negotiate in good faith. Exhibits presented to the referee included copies of paychecks to Caruso as well as tax returns for both Russo and Caruso. What makes these documents interesting is that the checks were mailed to Caruso at a Freehold, New Jersey address. In addition, their federal tax return also has the New Jersey address as their “home address.” If their tax return is correct, then the Drumgoole Road address is not their home. If that is the case, they are not entitled to modify the mortgage and may be committing bank fraud in applying and may have done so if that was not Russo’s address when she obtained the mortgage. If the tax return is wrong, then are they committing tax fraud? It also appears that they filed New Jersey resident returns. Defendants must explain this anomaly.

There is another disclosure in the hearing transcript which questions the defendant’s good faith. There was testimony that the rental from the apartment was sporadic from the tenant implying that this contributed to their difficulty in paying the mortgage. If income from the apartment or apartments was considered by the lender in making the original mortgage, then defendants rather than giving the tenant a free ride leading to Russo defaulting on the mortgage, should have taken steps to evict the tenant, recover possession of the apartment, and put in a paying tenant. There is no indication that this was done by Russo.

At times it seems that HAMP should really be called HAMPER, because the rules impose guidelines which actually restrict the negotiation process. Foreclosure actions are litigation, and litigation gets settled. However, when the court’s efforts to do so are encumbered by federal or state regulations imposed after the fact or the loan has been sold to some unknown investor who [*8]can dictate the terms of the settlement, rather than help the situation it makes the process more difficult to resolve. Hence, HAMPER. Home Affordable Modification Program Eliminating Resolution.

The record does not establish lack of “good faith” by the plaintiff. The referee’s report is vacated along with the penalties imposed therein.

H. Why Was the Mortgage Document Changed by Hand?

The certificate of occupancy for the premises discloses that it is a legal two-family. Yet at the closing someone altered by hand the “one or two family” clause in the mortgage to state it is a “two or three family” home. Does this mean that Russo was collecting rent from one legal apartment and rent from an illegal one? Was rental income included when the loan was made? If yes, then from how many units? That information is not available. In spite of generating rent from one or two rental units Russo did not pay the mortgage nor has she apparently put aside any money to try to bring the loan current. A mortgage foreclosure is an equitable proceeding. Therefore the fact that Russo may have an illegal apartment may be a factor to consider in granting her relief in this proceeding as she may not have “clean hands.”

Defendants have to explain why the mortgage was altered, who is the tenant, and if the tenant does not pay rent, why no steps were taken to evict the tenant.

I. May the Court Allow the Correction of Defects?

Analysis of the issues and problems in the case at bar, and strict application of the law may lead to the action being dismissed owing to technical defects in plaintiff’s pleadings with the results that the defendant gets a “free mortgage” with no obligation to repay the money borrowed. Unlike Hansel and Gretel who were able to enjoy the benefits of a gingerbread house and eventually escape the clutches of the wicked witch, people who borrow money do have an obligation to pay it back and not use the legal system to evade responsibility.

Likewise, in regard to the defendants, application of the law might result in negating the fact that for the last several years they have actively participated through retained counsel in an effort to reinstate a payment plan and that they have raised numerous issues which might constitute a legal defense to the proceeding. Defendants should have the opportunity to have the court determine if they have sprinkled enough of Tinkerbell’s pixie dust over the litigation so as to transport their obligation to Never Never Land and negotiate a settlement or dismissal of the actions.

Article 20 of the CPLR gives the court discretionary power to address most of the procedural errors that have dogged this litigation since its inception.

Based on the forgoing the court is opting on the side of doing justice and will use its statutory and equitable powers to treat this action in the manner the court and the parties have over at least since 2013. Rather than continue to run around with a glass slipper looking for the [*9]foot on which it fits, the court is hopefully going directly to Cinderella’s house with its decision. The parties will have the opportunity to participate in settlement negotiations and enforce their respective rights once they correct their procedural problems.

Conclusion:

Had we used our common sense.

Been worthy of our discontents.

We’d be happy….

To get the money, to save the house.[FN2]

It is therefore Ordered:

1. Plaintiff’s motion in regard to the referee’s report is granted. The referee’s report is vacated and is a nullity. All penalties imposed are lifted. There was no lack of good faith in the settlement negotiations between the parties.

2. Plaintiff’s motion to amend the caption to properly name the defendants is granted on the condition that plaintiff actually amend the named defendants to their correct names.

3. Defendants are to provide and document the names of all persons occupying the premises and their relationship to the property and Russo within 15 days of the date of this decision.

4. Plaintiff’s motion to amend the name of the plaintiff from Wells to Deutsche is granted. As to why they want to do this is anybody’s guess, but apparently it is important to plaintiff and will make them feel better.

5. Plaintiff will serve and file an amended summons and complaint correcting the above mentioned defects and any others identified in the decision within 30 days of the date of this decision.

6. Plaintiff has not abandoned this action.

7. Defendants’ motion to vacate its default and file an answer is granted. Defendants will serve and file an answer to the amended complaint within thirty days after the date of receipt of that pleading. However, any affirmative defense of lack of personal jurisdiction, procedural defects or the running of the statute of limitations is waived and cannot be raised by the defendants. Only substantive or statutory defenses will be entertained including the right to challenge the standing of Wells to be the plaintiff who commenced this action in 2008.

8. The parties will appear for a settlement conference on Monday, June 6, 2016 at 11:00 AM at the Courthouse, 927 Castleton Avenue, Staten Island, New York in Part 19 before Judge [*10]Straniere. Unless stipulated to by the parties, the rules governing settlements in 2008 when the action was commenced will govern the negotiations and not those currently in effect.

9. The parties will consider the following terms recommended by the Court as a possible outline for a settlement of this action.

a. Plaintiff is to repurchase the debt from the investor, keep the loan in its portfolio and negotiate a settlement as if this were litigation and not a transaction now subject to post closing rules and regulations imposed by investors or regulators non-existent at the time of the loan.

b. The parties will determine how much the defendants are able to pay each month for principal, interest, taxes and insurance including in the calculations income from Russo and Caruso and any other adults who may be able to contribute; make that amount the monthly payment at a current interest rate over a forty-year payout with a balloon payment at the end of the term.

c. Require that a new note and mortgage be executed to be signed by all persons whose income is being relied upon by the lender.

d. Any agreement will contain a clause that upon default in any payment, upon defendants’ failure to cure within thirty days, plaintiff may apply in this action for an order of reference and judgment of foreclosure be issued forthwith.

The parties may also want to consider an alternative of entering a money judgment only against Russo on the note, entering into a plan to pay down the judgment and foregoing the mortgage foreclosure.

The foregoing constitutes the decision and order of the court.

The foregoing constitutes the order of the court.

ENTER,

DATED:

______________________________

Philip S. Straniere

Acting Justice of the Supreme Court

Footnotes

Footnote 1:“Young At Heart” music and lyrics by Johnny Richards and Carolyn Leigh.

Footnote 2: “Ever After” from “Into the Woods” music and lyrics by Stephen Sondheim.

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Fannie Mae, Freddie Mac finally set to reduce mortgage balances

Fannie Mae, Freddie Mac finally set to reduce mortgage balances

Housing Wire-

After years of speculation and equivocation, Fannie Mae and Freddie Mac will begin to cut the mortgage balances for a number of homeowners later this year, according to a report from The Wall Street Journal.

The Wall Street Journal report, written by Joe Light, states that the Federal Housing Finance Agency recently approved a plan for the government-sponsored enterprises to engage in principal reduction on a large scale for the first time since the housing crisis.

For years their leaders claimed this would never happen. They all said the GSEs were in conservatorship, not receivership, and so a reduction in asset values would be counterintuitive to that status.

Perhaps this is why the scale of the reduction program is not as significant as some might expect, as Light reports.

From the WSJ:

Fewer than 50,000 “underwater” homeowners, who owe more than their homes are worth and are already behind in their mortgage payments, will likely be eligible, people familiar with the matter said.

Fannie and Freddie—which don’t make mortgages but rather buy them from lenders and wrap them into guaranteed securities—would also forgive principal only in cases where they determine the companies would lose less money with that option than foreclosure or other foreclosure-prevention methods. In addition, the new program will likely be limited to mortgages whose outstanding principal balance is under a certain dollar amount, people familiar with the matter said.

[HOUSING WIRE]

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Posted in STOP FORECLOSURE FRAUD1 Comment

DEUTSCHE BANK v CHIARELLI | Statute of Limitations Foreclosure Dismissal Granted… In addition, the Court awarded defendant $2500.00 in reasonable attorney’s for having to defend the time-barred action

DEUTSCHE BANK v CHIARELLI | Statute of Limitations Foreclosure Dismissal Granted… In addition, the Court awarded defendant $2500.00 in reasonable attorney’s for having to defend the time-barred action

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF SUFFOLK

DEUTSCHE BANK NATIONAL TRUST COMPANY AS
TRUSTEE FOR HIS ASSET SECURITIZATION
CORPORATION TRUST 2007-OPT1, MORTGAGE PASS
THROUGH CERTIFICATES, SERIES 2007-OPT1

AGAINST

JOHN CHIARELLI, STELLA A. SLAVIN AND RICHARD S.
SLAVIN et al

Chiarelli- 20160216 SFO Dismissal

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GEWEYE v. VENTURES TRUST 2013-IHR | FL 2DCA – Ventures failed to explain how the assignment of mortgage, reflecting only the transfer of the mortgage and not the note, provided it with standing; nothing in the assignment of mortgage conferred standing on Ventures to enforce the note

GEWEYE v. VENTURES TRUST 2013-IHR | FL 2DCA – Ventures failed to explain how the assignment of mortgage, reflecting only the transfer of the mortgage and not the note, provided it with standing; nothing in the assignment of mortgage conferred standing on Ventures to enforce the note

CAROLYN M. GEWEYE a/k/a Carolyn May Geweye, Appellant,
v.
VENTURES TRUST 2013-I-H-R; THE UNKNOWN SPOUSE OF CAROLYN M. GEWEYE a/k/a Carolyn May Geweye; THE UNKNOWN HEIRS, DEVISEES, GRANTEES, ASSIGNEES, LIENOR, CREDITORS, TRUSTEES, or other CLAIMANTS claiming by, through, under or against Virginia Larue Wright, deceased; BRUCE CARL WRIGHT a/k/a Bruce C. Wright, as heir of the Estate of Virginia Larue Wright, deceased; HOWARD EDWIN WRIGHT a/k/a Howard E. Wright, as heir of the Estate of Virginia Larue Wright, deceased; CAROLYN MAY GEWEYE, as heir of the Estate of Virginia Larue Wright, deceased; ANY AND ALL UNKNOWN PARTIES claiming by, through, under, and against the herein named individual defendant(s) who are not known to be dead or alive, whether said unknown parties may claim an interest as Spouses, Heirs, Devisees, Grantees, or other claimants; FOXWOOD AT PANTHER RIDGE HOMEOWNERS’ ASSOCIATION, INC.; and JPMORGAN BY MERGER WITH WASHINGTON MUTUAL BANK FA, Appellees.

Case No. 2D14-4668.
District Court of Appeal of Florida, Second District.

Opinion filed March 16, 2016.
H. Daniel McKillop of McKillop Law Firm, Sarasota, for Appellant.

Shaib Y. Rios of Brock & Scott, PLLC, Fort Lauderdale; and Orlando DeLuca and Shawn Taylor of DeLuca Law Group, PLLC, Fort Lauderdale, for Appellee Ventures Trust 2013-I-H-R.

No appearance for remaining Appellees.

BLACK, Judge.

Carolyn Geweye appeals a final judgment of foreclosure entered in favor of Ventures Trust 2013-I-H-R (Ventures), following a bench trial. We reverse because Ventures failed to prove its standing to enforce the note. Because the standing issue is dispositive, we withhold comment on the other issues raised by Ms. Geweye on appeal.

On June 28, 2012, JPMorgan Chase Bank, N.A. (Chase), filed a foreclosure complaint alleging that it was the holder of the note and mortgage and/or was entitled to enforce the note and mortgage.[1] Chase attached a copy of the note indorsed in blank and a copy of the mortgage. On February 8, 2013, Chase filed the original note indorsed in blank and the original mortgage. Thereafter, on March 18, 2014, Chase moved to substitute Ventures as the party plaintiff. In its motion, Chase alleged that subsequent to the commencement of the foreclosure action, the mortgage was “transferred” to Ventures, who became a real party in interest. There was, however, no mention of the note. On April 22, 2014, over Ms. Geweye’s objection, the court granted the substitution.

On May 16, 2014, a nonjury trial was held before a magistrate. Several documents were introduced at trial, including the assignment of mortgage to Ventures. The assignment of mortgage did not purport to assign any interest in the note, and the parties do not dispute that there was no assignment of the note. At the conclusion of Ventures’ case, Ms. Geweye moved for involuntary dismissal based, in part, on Ventures’ failure to prove standing. The magistrate reserved ruling, and on June 25, 2014, he issued his report and recommended order finding that Ventures had standing to foreclose. Ms. Geweye filed exceptions to the recommended order, but the circuit court denied the exceptions following a hearing and entered final judgment in favor of Ventures.

“A plaintiff alleging standing as a holder must prove it is a holder of the note and mortgage both as of the time of trial and also that the (original) plaintiff had standing as of the time the foreclosure complaint was filed.” Russell v. Aurora Loan Servs., LLC, 163 So. 3d 639, 642 (Fla. 2d DCA 2015) (quoting Kiefert v. Nationstar Mortg., LLC, 153 So. 3d 351, 352 (Fla. 1st DCA 2014)). There is no dispute that Chase had standing when the foreclosure complaint was filed. As to Ventures, however, “an order of substitution does not create standing.” Sandefur v. RVS Capital, LLC, 41 Fla. L. Weekly D265 (Fla. 4th DCA Jan. 27, 2016). Rather, “[a] plaintiff who is not the original lender may establish standing to foreclose a mortgage loan by submitting a note with a blank or special [i]ndorsement, an assignment of the note, or an affidavit otherwise proving the plaintiff’s status as the holder of the note.” Focht v. Wells Fargo Bank, N.A., 124 So. 3d 308, 310 (Fla. 2d DCA 2013). Ventures submitted none of these and thus failed to establish its standing at the time of trial.

Ventures asserted that the original note indorsed in blank, coupled with the assignment of mortgage, provided it with standing. However, Chase filed the original note indorsed in blank with the court long before Ventures was substituted as the party plaintiff. As such, Ventures could not establish that it was the holder or nonholder in possession for purposes of standing. See Creadon v. U.S. Bank N.A., 166 So. 3d 952, 954 (Fla. 2d DCA 2015). Further, Ventures failed to explain how the assignment of mortgage, reflecting only the transfer of the mortgage and not the note, provided it with standing; nothing in the assignment of mortgage conferred standing on Ventures to enforce the note. See Russell, 163 So. 3d at 641-42; see also Vance v. Fields, 172 So. 2d 613, 614 (Fla. 1st DCA 1965) (“An assignment of the mortgage without an assignment of the debt creates no right in the assignee.”). And because no assignment of note was introduced, we are compelled to reverse.

Because Ventures failed to present evidence of standing to enforce the note at the time of trial, we reverse and remand with directions that the circuit court enter an involuntary dismissal of the foreclosure complaint. See Creadon, 166 So. 3d at 954.

Reversed and remanded with directions.

WALLACE and LUCAS, JJ., Concur.

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DETERMINED.

[1] The complaint also included a count to reform the legal description of the property contained within the mortgage.

 

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Posted in STOP FORECLOSURE FRAUD0 Comments

House passes measure to provide foreclosure relief for members of the military

House passes measure to provide foreclosure relief for members of the military

The Suburban Times-

Monday the U.S. House of Representatives passed S. 2393, the Foreclosure Relief and Extension for Servicemembers Act of 2015, to extend foreclosure protection for military homeowners from 90 days to a one year period until January 1, 2018.

Rep. Stephen Fincher (TN-08), Rep. Steve Stivers (OH-15), and Heck filed a House companion to S. 2393 (H.R. 4252) on December 16, 2015, and applauded the passage before April 1, when servicemembers would have been first affected by the time crunch.

“Readjusting to civilian life from active duty can be difficult for many of our vets,” Congressman Fincher said. “It is tremendously important to allow our veterans more time to readjust to life at home and get on their feet financially. It’s the least we can do for those who willingly risk their lives every day to protect the freedoms we hold dear.”

[The Suburban Times]

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Posted in STOP FORECLOSURE FRAUD0 Comments

JPMorgan Chase Bank National Association v. Benner | New ICA decision in Hawaii will cancel every ongoing nonjudicial sale in this State and if applied retroactively every nonjudicial foreclosure

JPMorgan Chase Bank National Association v. Benner | New ICA decision in Hawaii will cancel every ongoing nonjudicial sale in this State and if applied retroactively every nonjudicial foreclosure

H/T Gary Dubin for this recent decision his law firm’s involvement!

IN THE IMMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI’I

JPMorgan Chase Bank National Association

v.

Ronald W. Benner

 

2016-caap-13-0002164

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Posted in STOP FORECLOSURE FRAUD0 Comments

TFH 3/20/16 | Foreclosure Workshop #7: How To Successfully Disqualify/Recuse Your Foreclosure Judge When Justified Based on Actual Appearances of Impropriety

TFH 3/20/16 | Foreclosure Workshop #7: How To Successfully Disqualify/Recuse Your Foreclosure Judge When Justified Based on Actual Appearances of Impropriety

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

LISTEN TO KHVH-AM (830 ON THE AM RADIO DIAL)

ALSO AVAILABLE ON KHVH-AM ON THE iHEART APP ON THE INTERNET

.

.

Sunday – March 20, 2016

Foreclosure Workshop #7: How To Successfully Disqualify/Recuse Your Foreclosure Judge When Justified Based on Actual Appearances of Impropriety

(Please call in and share your experiences)

~

.
Host: Gary Dubin Co-Host: John Waihee

.

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

The Foreclosure Hour is a public service of the Dubin Law Offices

Past Broadcasts

EVERY SUNDAY 3:00 PM HAWAII 6:00 PM PACIFIC 9:00 PM EASTERN ON KHVH-AM (830 ON THE DIAL) AND ON iHEART RADIO The Foreclosure Hour 12

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Posted in STOP FORECLOSURE FRAUD1 Comment

Foreclosure Shifts From Summary Denial to Reversal With Opinion

Foreclosure Shifts From Summary Denial to Reversal With Opinion

DAILY BUSINESS REVIEW –

Foreclosure defense attorney Bruce Jacobs achieved a rare feat.

The Miami lawyer surmounted two hurdles: He successfully petitioned the Fourth District of Appeal to write an opinion in a case it had already affirmed without an opinion, then persuaded the court to reverse its ruling.

“This is a unicorn,” said Jacobs of Jacobs Keeley.

His coup in reversing a per curiam affirmance, or PCA, caught the attention of fellow foreclosure defense attorneys.

“It’s the Holy Grail,” said Royal Palm Beach attorney Thomas Ice, who was not involved in the litigation. “I don’t know if I’ve ever seen one in the foreclosure context. It’s very rare for (an appellate court) to write an opinion when they haven’t written one. And the more incredible part is for them to reverse themselves, do a 180-degree turn and rule the opposite way.”

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Posted in STOP FORECLOSURE FRAUD2 Comments

Geweye v. Ventures Trust 2013-I-H-R | The assignment of mortgage did not purport to assign any interest in the note, and the parties do not dispute that there was no assignment of the note.

Geweye v. Ventures Trust 2013-I-H-R | The assignment of mortgage did not purport to assign any interest in the note, and the parties do not dispute that there was no assignment of the note.

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT

CAROLYN M. GEWEYE a/k/a Carolyn May
Geweye,

Appellant,

v.

VENTURES TRUST 2013-I-H-R; THE )
UNKNOWN SPOUSE OF CAROLYN M. )
GEWEYE a/k/a Carolyn May Geweye; THE )
UNKNOWN HEIRS, DEVISEES, )
GRANTEES, ASSIGNEES, LIENOR, )
CREDITORS, TRUSTEES, or other )
CLAIMANTS claiming by, through, under or )
against Virginia Larue Wright, deceased; )
BRUCE CARL WRIGHT a/k/a Bruce C. )
Wright, as heir of the Estate of Virginia )
Larue Wright, deceased; HOWARD EDWIN )
WRIGHT a/k/a Howard E. Wright, as heir of )
the Estate of Virginia Larue Wright, )
deceased; CAROLYN MAY GEWEYE, as )
heir of the Estate of Virginia Larue Wright, )
deceased; ANY AND ALL UNKNOWN )
PARTIES claiming by, through, under, and )
against the herein named individual )
defendant(s) who are not known to be dead )
or alive, whether said unknown parties may )
claim an interest as Spouses, Heirs, )
Devisees, Grantees, or other claimants; )
FOXWOOD AT PANTHER RIDGE )
HOMEOWNERS’ ASSOCIATION, INC.; )
and JPMORGAN BY MERGER WITH )
WASHINGTON MUTUAL BANK FA, )
Appellees. )

Case No. 2D14-4668
Opinion filed March 16, 2016.
Appeal from the Circuit Court for Manatee

County; Thomas M. Gallen, Senior Judge.

H. Daniel McKillop of McKillop Law Firm,
Sarasota, for Appellant.
Shaib Y. Rios of Brock & Scott, PLLC, Fort
Lauderdale; and Orlando DeLuca and
Shawn Taylor of DeLuca Law Group, PLLC,
Fort Lauderdale, for Appellee Ventures
Trust 2013-I-H-R.

No appearance for remaining Appellees.

BLACK, Judge.

Carolyn Geweye appeals a final judgment of foreclosure entered in favor
of Ventures Trust 2013-I-H-R (Ventures), following a bench trial. We reverse because
Ventures failed to prove its standing to enforce the note. Because the standing issue is
dispositive, we withhold comment on the other issues raised by Ms. Geweye on appeal.

On June 28, 2012, JPMorgan Chase Bank, N.A. (Chase), filed a
foreclosure complaint alleging that it was the holder of the note and mortgage and/or
was entitled to enforce the note and mortgage.1 Chase attached a copy of the note
indorsed in blank and a copy of the mortgage. On February 8, 2013, Chase filed the
original note indorsed in blank and the original mortgage. Thereafter, on March 18,
2014, Chase moved to substitute Ventures as the party plaintiff. In its motion, Chase

1The complaint also included a count to reform the legal description of the
property contained within the mortgage.

– 2

alleged that subsequent to the commencement of the foreclosure action, the mortgage
was “transferred” to Ventures, who became a real party in interest. There was,
however, no mention of the note. On April 22, 2014, over Ms. Geweye’s objection, the
court granted the substitution.

On May 16, 2014, a nonjury trial was held before a magistrate. Several
documents were introduced at trial, including the assignment of mortgage to Ventures.
The assignment of mortgage did not purport to assign any interest in the note, and the
parties do not dispute that there was no assignment of the note. At the conclusion of
Ventures’ case, Ms. Geweye moved for involuntary dismissal based, in part, on
Ventures’ failure to prove standing. The magistrate reserved ruling, and on June 25,
2014, he issued his report and recommended order finding that Ventures had standing
to foreclose. Ms. Geweye filed exceptions to the recommended order, but the circuit
court denied the exceptions following a hearing and entered final judgment in favor of
Ventures.

“A plaintiff alleging standing as a holder must prove it is a holder of the
note and mortgage both as of the time of trial and also that the (original) plaintiff had
standing as of the time the foreclosure complaint was filed.” Russell v. Aurora Loan
Servs., LLC, 163 So. 3d 639, 642 (Fla. 2d DCA 2015) (quoting Kiefert v. Nationstar
Mortg., LLC, 153 So. 3d 351, 352 (Fla. 1st DCA 2014)). There is no dispute that Chase
had standing when the foreclosure complaint was filed. As to Ventures, however, “an
order of substitution does not create standing.” Sandefur v. RVS Capital, LLC, 41 Fla.

L. Weekly D265 (Fla. 4th DCA Jan. 27, 2016). Rather, “[a] plaintiff who is not the
original lender may establish standing to foreclose a mortgage loan by submitting a note
– 3

with a blank or special [i]ndorsement, an assignment of the note, or an affidavit
otherwise proving the plaintiff’s status as the holder of the note.” Focht v. Wells Fargo
Bank, N.A., 124 So. 3d 308, 310 (Fla. 2d DCA 2013). Ventures submitted none of
these and thus failed to establish its standing at the time of trial.

Ventures asserted that the original note indorsed in blank, coupled with
the assignment of mortgage, provided it with standing. However, Chase filed the
original note indorsed in blank with the court long before Ventures was substituted as
the party plaintiff. As such, Ventures could not establish that it was the holder or
nonholder in possession for purposes of standing. See Creadon v. U.S. Bank N.A., 166
So. 3d 952, 954 (Fla. 2d DCA 2015). Further, Ventures failed to explain how the
assignment of mortgage, reflecting only the transfer of the mortgage and not the note,
provided it with standing; nothing in the assignment of mortgage conferred standing on
Ventures to enforce the note. See Russell, 163 So. 3d at 641-42; see also Vance v.
Fields, 172 So. 2d 613, 614 (Fla. 1st DCA 1965) (“An assignment of the mortgage
without an assignment of the debt creates no right in the assignee.”). And because no
assignment of note was introduced, we are compelled to reverse.

Because Ventures failed to present evidence of standing to enforce the
note at the time of trial, we reverse and remand with directions that the circuit court
enter an involuntary dismissal of the foreclosure complaint. See Creadon, 166 So. 3d at 954.

Reversed and remanded with directions.

WALLACE and LUCAS, JJ., Concur.

– 4
Down Load PDF of This Case

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