Count On 2-

Former Wells Fargo CEO, John Stumpf, told congress under oath that he was not notified of a serious fake account problem until 2013.

However, CNNMoney has obtained a 2007 letter addressed to Stumpf that warned of widespread “unethical (and illegal) activity” inside Wells Fargo and the “routine deception and fraudulent exploitation of our clients.”

The letter was written by a Wells Fargo (WFC) employee, who had been transferred from the branch after raising sales concerns, and who later won a federal whistleblower retaliation case against the company.

[COUNT ON 2]

Different Set of Books!!!

WFTV-9

An Apopka couple is being kicked out of their home after losing an eight-year foreclosure battle in court. The couple’s own records show they never missed making a mortgage payment, but their lender had a different set of books that showed otherwise.

Action 9’s Todd Ulrich investigated how this happened, and why it should alarm anyone who thinks his mortgage company made a mistake.

The Mannino’s have been packing all their belongings at the house in Apopka since losing the foreclosure fight. Mike Mannino said his American dream of home ownership just died.

[WFTV-9]

AP-

Ohio’s Republican Gov. John Kasich announced Friday that he was suspending Wells Fargo from doing business with state agencies, and excluding the bank from participating in any state bond offerings.

Kasich’s announcement follows similar moves by the state treasurers of California and Illinois and the cities of Seattle and Chicago, which said earlier this month they were banning Wells Fargo from doing business. The San Francisco-based bank has been under fire after allegations came to light that Wells employees may have opened up to 2 million customer accounts fraudulently in order to meet sales goals.

While the scandal has drawn bipartisan outrage, particularly from members of Congress, Kasich is the first state-level Republican to announce actions against Wells Fargo.

[AP]

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

                                         IN THE DISTRICT COURT OF APPEAL

                                         OF FLORIDA

                                         SECOND DISTRICT

JEFFREY M. POWERS and              )
TAWNYA L. POWERS,                  )
                                   )
            Appellants,            )
                                   )
v.                                 )          Case No. 2D14-4857
                                   )
HSBC BANK USA, N.A., as Trustee    )
under the Pooling and Servicing    )
Agreement Dated as of September 1, )
2006, Fremont Home Loan Trust      )
2006-C,                            )
                                   )
            Appellee.              )
________________________________ )

Opinion filed October 14, 2016.

Appeal from the Circuit Court for
Pinellas County; Thomas H. Minkoff,
Judge.

Peter Ticktin, Josh Bleil, Kendrick
Almaguer, and Heather Cherapkai of
The Ticktin Law Group, P.A., Deerfield
Beach, for Appellants.

Michael W. Smith of Baker, Donelson,
Bearman, Caldwell & Berkowitz, PC,
Orlando, for Appellee.


NORTHCUTT, Judge.


             Jeffrey and Tawnya Powers appeal the final judgment of foreclosure

entered against them in an action brought by HSBC Bank USA, N.A. We reverse
because the bank did not establish that it had standing when the original complaint was

filed.

             HSBC filed the foreclosure suit in its capacity as trustee under the

"Pooling and Servicing Agreement dated as of September 1, 2006, Freemont Home

Loan Trust 2006-C." In count one of the original and amended complaints, it alleged

that it was the holder of the note. However, the note was not attached to either

complaint. In their affirmative defenses, the Powers alleged that HSBC did not hold,

own, or possess the note and that it did not have the right to enforce the note.

             At trial, HSBC called only one witness, Tonya Tillman, a loan analyst with

Ocwen Loan Servicing. Tillman testified that Freemont Investment and Loan was the

original lender and that the original note, which HSBC introduced into evidence, listed

Freemont as the lender. Tillman testified that Freemont originally serviced the loan,

Freemont then transferred the loan to Litton Loan Servicing, and Litton subsequently

transferred the loan to Ocwen for servicing in September 2011. HSBC Bank entered

into evidence a pooling and service agreement dated September 1, 2006, which

identified Freemont Mortgage Securities Corporation as the depositor, Freemont

Investment and Loan as sponsor, originator, and servicer, and HSBC as trustee.

Tillman testified that the closing date on the pooling and servicing agreement was

September 7, 2006. HSBC's initial complaint was filed on November 13, 2008.

             HSBC's theory at trial was that there had been an equitable transfer of the

note because the note was included in the trust assets transferred to HSBC as part of

the pooling and servicing agreement. It makes the same argument on appeal. But

Tillman did not know the date the Powers' loan was transferred into the trust, and she

could not find it listed in the pooling and servicing agreement. Our review of the pooling

                                           -2-
and servicing agreement confirms that it did not identify the Powers' loan as being

included in the transaction.

              Counsel for HSBC advised the trial court that there was an undated, blank

endorsement on the note, which was conceded by the Powers. However, the original

note, which was filed with the trial court at the same time that it was introduced into

evidence, contains no endorsement whatever. When the Powers' attorney asked

Tillman whether she knew the date the endorsement was placed on the note, the trial

court sustained HSBC's relevance objection.

              A party suing to foreclose a mortgage must establish that it had standing

at the time the complaint was filed. Corrigan v. Bank of Am., N.A.,

189 So. 3d 187

, 189

(Fla. 2d DCA 2016) (en banc). A substituted plaintiff acquires only the standing of the

original plaintiff. Id. This court in St. Clair v. U.S. Bank National Association,

173 So. 3d

 1045, 1046 (Fla. 2d DCA 2015), stated:

              Under section 673.3011, Florida Statutes (2014), a person
              entitled to enforce a negotiable instrument must be either:
              (1) the holder 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 but who has the right to
              enforce a lost, destroyed, or stolen instrument or an
              instrument paid by mistake. A holder is a person in
              possession of the negotiable instrument that is payable
              either to bearer or to the holder. § 671.201(21)(a), Fla. Stat.
              (2014). A person in possession of the instrument but who is
              not the original lender can still be a holder, but only if the
              instrument bears a special indorsement in his or her favor or
              a blank indorsement. See McLean v. JP Morgan Chase
              Bank Nat'l Ass'n,

79 So. 3d 170

, 173 (Fla. 4th DCA 2012).
              Absent a special or blank indorsement, "the mere delivery of
              a note and mortgage, with intention to pass the title, upon a
              proper consideration, will vest the equitable interest in the
              person to whom it is so delivered." Seffar v. Residential
              Credit Solutions, Inc.,

160 So. 3d 122

, 125 (Fla. 4th DCA
              2015) (quoting McLean, 79 So. 3d at 173).


                                            -3-
               In the present case, although HSBC was the holder of the note at the time

of trial, it did not prove that it was the holder at the time of the filing of the original

complaint, as it alleged. The parties are in agreement that any blank endorsement that

was on the note was not dated, and it was not established that HSBC possessed the

note with a blank endorsement at the time the complaint was filed. See Focht v. Wells

Fargo Bank, N.A.,

124 So. 3d 308

, 310-311 (Fla. 2d DCA 2013) (holding that in order to

establish standing, Wells Fargo was required to submit evidence that it was in

possession of the original note with the blank endorsement at the time it filed the

complaint).

               HSBC's attempt to prove an equitable transfer through Tillman's testimony

and the pooling and servicing agreement failed because there was no evidence that the

Powers' loan was included in the agreement. See Stone v. BankUnited,

115 So. 3d 411

, 413 (Fla. 2d DCA 2013) (holding that BankUnited established standing to foreclose

where its employee testified at the foreclosure trial that BankUnited acquired all the

assets of the original lender pursuant to a purchase assumption agreement prior to the

filing of the complaint).

               Reversed and remanded with directions to enter judgment for the Powers.



SLEET and SALARIO, JJ., Concur.

.

.

The Nation-

In an extraordinary letter, Warren highlighted several critical shortcomings at the Wall Street oversight agency. 

For many months, Senator Elizabeth Warren has been castigating Securities and Exchange Commission chair Mary Jo White during hearings, media appearances, and in letters to the agency. Friday morning, Warren finally asked President Obama to replace her.

In a strongly worded letter to the White House, Warren outlined her principal objections to White’s tenure and what she described as “brazen conduct”: namely, White’s refusal to develop an SEC rule that would force publicly traded companies to disclose political donations, along with White’s failure to fully implement Dodd-Frank financial reforms.

[THE NATION]

(AP Photo / Tom Williams; Reuters / Gary Cameron)

Dimon to resign in 3…2…

CNBC-

JPMorgan CFO Marianne Lake said Friday that her bank is conducting a “deep dive” into potential cross-selling issues.

Lake, however, explained that “it’s impossible to have zero defects,” acknowledging that there have been some instances of cross-selling issues of their own.

[CNBC]

image: Jamie Dimon REUTERS Dylan Martinez

Credit Union Used False Threats to Collect Debts and Placed Unfair Restrictions on Account Access

WASHINGTON, D.C. – Today the Consumer Financial Protection Bureau (CFPB) took action against Navy Federal Credit Union for making false threats about debt collection to its members, which include active-duty military, retired servicemembers, and their families. The credit union also unfairly restricted account access when members had a delinquent loan. Navy Federal Credit Union is correcting its debt collection practices and will pay roughly $23 million in redress to victims along with a civil money penalty of $5.5 million.

“Navy Federal Credit Union misled its members about its debt collection practices and froze consumers out from their own accounts,” said CFPB Director Richard Cordray. “Financial institutions have a right to collect money that is due to them, but they must comply with federal laws as they do so.”

Navy Federal Credit Union is a federal credit union based in Vienna, Va. As a credit union, it offers a wide range of consumer financial products and services, including deposit accounts and loans. Membership in the credit union is limited to consumers who are, or have been, U.S. military servicemembers, Department of Defense civilian employees or contractors, government employees assigned to Department of Defense installations, and their immediate family members. It is the largest credit union in the country, with more than $73 billion in assets as of December 2015.

The CFPB investigation found that Navy Federal Credit Union deceived consumers to get them to pay delinquent accounts. The credit union falsely threatened severe actions when, in fact, it seldom took such actions or did not have authorization to take them. The credit union also cut off members’ electronic access to their accounts and bank cards if they did not pay overdue loans. Hundreds of thousands of consumers were affected by these practices, which occurred between January 2013 and July 2015. The practices violated the Dodd-Frank Wall Street Reform and Consumer Protection Act. Specifically, the CFPB found that Navy Federal Credit Union:

• Falsely threatened legal action and wage garnishment: The credit union sent letters to members threatening to take legal action unless they made a payment. But in reality, it seldom took any such actions. The CFPB found that the credit union’s message to consumers of “pay or be sued” was inaccurate about 97 percent of the time, even among consumers who did not make a payment in response to the letters. The credit union’s representatives also called members with similar verbal threats of legal action. And the credit union threatened to garnish wages when it had no intention or authority to do so.
• Falsely threatened to contact commanding officers to pressure servicemembers to repay: The credit union sent letters to dozens of servicemembers threatening that the credit union would contact their commanding officers if they did not promptly make a payment. The credit union’s representatives also communicated these threats by telephone. For members of the military, consumer credit problems can result in disciplinary proceedings or lead to revocation of a security clearance. The credit union was not authorized and did not intend to contact the servicemembers’ chains of command about the debts it was attempting to collect.
• Misrepresented credit consequences of falling behind on a loan: The credit union sent about 68,000 letters to members misrepresenting the credit consequences of falling behind on a Navy Federal Credit Union loan. Many of the letters said that consumers would find it “difficult, if not impossible” to obtain additional credit because they were behind on their loan. But the credit union had no basis for that claim, as it did not review consumer credit files before sending the letters. The credit union also misrepresented its influence on a consumer’s credit rating, implying that it could raise or lower the rating or affect a consumer’s access to credit. As a furnisher, the credit union could supply information to the credit reporting companies but it could not determine a consumer’s credit score.
• Illegally froze members’ access to their accounts: The credit union froze electronic account access and disabled electronic services for about 700,000 accounts after consumers became delinquent on a Navy Federal Credit Union credit product. This meant delinquency on a loan could shut down a consumer’s debit card, ATM, and online access to the consumer’s checking account. The only account actions consumers could take online would be to make payments on delinquent or overdrawn accounts.

Enforcement Action

Pursuant to the Dodd-Frank Act, the CFPB has the authority to take action against institutions or individuals engaging in unfair or deceptive acts or practices or that otherwise violate federal consumer financial laws. Under the terms of the order, Navy Federal Credit Union is required to:

• Pay victims $23 million: The credit union is required to pay roughly $23 million in compensation to consumers who received threatening letters. Most will be eligible for redress if they received one of the deceptive debt collection letters and they made a payment to the credit union within 60 days of that letter. In addition, all consumers who received the letter threatening to contact their commanding officer will receive at least $1,000 in compensation. The credit union will contact consumers who are eligible for compensation.
• Correct debt collection practices: The credit union must create a comprehensive plan to address how it communicates with its members about overdue debt. This includes refraining from any misleading, false, or unsubstantiated threats to contact a consumer’s commanding officer, threats to initiate legal action, or misrepresentations about the credit consequences of falling behind on a Navy Federal Credit Union loan.
• Ensure consumer account access: Navy Federal Credit Union cannot block its members from accessing all their accounts if they are delinquent on one or more accounts. The credit union must implement proper procedures for electronic account restrictions.
• Pay a $5.5 million civil money penalty: Navy Federal Credit Union is required to pay a penalty of $5.5 million to the CFPB’s Civil Penalty Fund.

The Navy Federal Credit Union consent order can be found at:http://files.consumerfinance.gov/f/documents/102016_cfpb_NavyFederalConsentOrder.pdf

The CFPB advises all servicemembers to know their rights when a debt collector calls. They should know that a debt collector can’t tell their chain of command that they owe a debt, threaten them with prosecution under the Uniform Code of Military Justice, or threaten to revoke their security clearance. More information, including how to access sample letters to respond to a debt collector, is available at: http://files.consumerfinance.gov/f/CFPB-Servicemembers-Know-Your-Rights-Handout-Debt-Collection.pdf

As I said: @WellsFargo CEO Stumpf should resign, return every nickel he made during the scam, & face DOJ/SEC investigation. He’s 1 for 3.

— Elizabeth Warren (@SenWarren) October 12, 2016

CNBC-

Wells Fargo said on Wednesday that Chairman and CEO John Stumpf will retire effective immediately in the wake of a sales practice scandal at the bank.

The company’s board of directors elected President and Chief Operating Officer Tim Sloan to succeed him as CEO, while Lead Director Stephen Sanger will serve as the board’s non-executive chairman.

The news comes after it was revealed that employees in Wells Fargo’s community banking division opened about 2 million accounts without customer authorization, which resulted in the bank paying $185 million in penalties. Stumpf was grilled on Capitol Hill as he defended the bank’s sales practices.

[CNBC]

Vice-

A Wells Fargo bank manager tried to warn the head of the company’s regional banking unit of an improperly created customer account in January 2006, five years earlier than the bank has said its board first learned of abuses at its branches.

In recent months, the discovery of as many as 2 million improperly created accounts has widened into a public scandal for Wells Fargo, one of the country’s largest banks by assets. Some lawmakers, including Sen. Elizabeth Warren of Massachusetts and Rep. Roger Williams of Texas, have called for CEO John Stumpf to step down. A letter written in 2005 and obtained by VICE News details unethical practices that occurred at Washington state branches of the bank, suggesting the conduct began years before previously understood.

[VICE]

FOX9-

The fake-accounts scandal at Wells Fargo is jeopardizing the future of hundreds of thousands of current and former employees, according to a lawsuit filed in federal court in Minnesota.

The class-action lawsuit alleges senior executives knew the scandal would damage the bank’s stock price and reputation, but still allowed employees’ retirement plans, including 401Ks, to rely on Wells Fargo stock prices.

The suit claims “senior executives sold millions of their personal Wells Fargo stock at inflated rices, earning hundreds of millions of dollars, while failing to take corrective action to protect Plan Participants.”

[FOX 9]

The Regulators

The Bankers

The Mortgage Servicers

The Rating Agencies…

FIB-

This is a comprehensive history documenting the events that caused the 2008 Financial Crisis through news articles, documents, and public pronouncements. We hope this resource will assist fraud investigators and activists in understanding the larger context of the battle we are waging to bring truth and shed light on those who are gutting average Americans through back room deals and fraudulent settlements.

To see the list of information leading up to the financial crises, go to F.I.B. website.

Clouded Titles-

BREAKING NEWS —

The case of MERSCORP Holdings, Inc. v. Daniel and Darla Robinson is headed for the U.S. 9th Circuit Court of Appeals.

Oral arguments are set to be heard on Thursday, December 8, 2016 in the Pasadena, California branch and California Attorney Al West, contributor to THE QUIET TITLE WAR MANUAL is now admitted to practice before the U.S. 9th Circuit and is slated to present the oral argument, at the insistence of the Robinsons.

If you are within traveling distance of the Pasadena, California branch, Al West has requested that you “pack the courtroom” for this event! 

There are several key issues here that are of national importance, which is what some judges are saying makes this case a national landmark case:

1. where a federal judge has reversed a state judge’s ruling on a quiet title action, when the parties who claim an interest had a state court remedy to open up the judgment and challenge it and failed to exercise that right;
2. where MERS and MERSCORP came in and accused the judge of being an “actor” in depriving MERS and MERSCORP of their civil rights; and
3. where MERS and MERSCORP claimed they were entitled to notice, yet there is nothing in the Robinson’s Deed of Trust that entitles MERS to: (a.) notice rights; and (b.) assign any interest to anyone.

[CLOUDED TITLES]

Townspeople await the arrival of the Wells Fargo man, who has an ulterior motive.

Reuters-

A group of nuns and other religiously-affiliated investors have lost faith in embattled Wells Fargo & Co and filed a shareholder resolution calling on the bank to report on the root causes of a fake accounts scandal that led to a $190 million settlement struck with regulators last month.

The faith-based investors say they also want the report to cover improved controls after revelations bank employees opened as many as 2 million checking, savings and credit card accounts without the customers’ permission in order to meet sales quotas.

The resolution resembles one the Sisters of St Francis of Philadelphia and others filed for the bank’s 2014 annual meeting and then withdrew, on the understanding the San Francisco-based bank would provide more specifics on areas like its risk controls.

[Reuters]

KUOW-

The City of Seattle is breaking ties with Wells Fargo after revelations that the bank opened accounts nationwide without the knowledge of the account holders.

Seattle city leaders were considering taking out a $100 million loan from Wells Fargo to cover a Seattle City Light bond. In a letter Friday, city leaders say they’re calling off the contract before it’s finalized this month.

Seattle Mayor Ed Murray, Council President Bruce Harrell and Tim Burgess, the chair of the council’s finance committee, sent the letter.

[KUOW]

Wall Street on Parade-

Yesterday, building on the momentum afforded her by a series of articles in the New York Times, Hillary Clinton asked the audience at a campaign stop in Toledo, Ohio: “What kind of genius loses a billion dollars in one year.” Clinton was referring to the New York Times revelation on Sunday that Donald Trump’s 1995 tax return showed a loss of $916 million. (See video clip below.)

If Hillary really wants to know what kind of genius can lose a billion dollars in one year or $6.2 billion in the case of traders at JPMorgan Chase, she should ask the bank’s CEO Jamie Dimon. The $6.2 billion London Whale loss at JPMorgan Chase is far more scintillating a feat since it involved wild derivative gambles in London in 2012 using the taxpayer-backstopped, insured savings deposits at the largest bank in the U.S. The U.S. Senate’s Permanent Subcommittee on Investigations conducted an in-depth investigation and report of the matter. The Chairman of the Subcommittee at the time, Senator Carl Levin, stated that JPMorgan “piled on risk, hid losses, disregarded risk limits, manipulated risk models, dodged oversight, and misinformed the public.”

continue reading WALL STREET ON PARADE

(Image Credit: AP/J. Scott Applewhite/Jason DeCrow/Photo montage by Salon)

IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 15-15626
________________________
D.C. Docket No. 9:15-cv-80328-KAM,
Bkcy No. 9:11-bkc-34324-PGH

In re:
DAVID A. FAILLA,
DONNA N. FAILLA,
Debtors.
________________________
DAVID A. FAILLA and DONNA N. FAILLA,
Plaintiffs – Appellants,
versus
CITIBANK, N.A.,
Defendant – Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_______________________
(October 4, 2016)

Before MARCUS and WILLIAM PRYOR, Circuit Judges, and LAWSON,District Judge.*
This appeal requires us to decide whether a person who agrees to “surrender” his house in bankruptcy may oppose a foreclosure action in state court. David and Donna Failla filed for bankruptcy in 2011 and agreed that they would surrender their house to discharge their mortgage debt. But the Faillas continued to oppose a foreclosure proceeding in state court. Citibank then filed a motion to compel surrender in the bankruptcy court and argued that the Faillas had breached their duty to surrender the property. The bankruptcy court granted the motion, and the district court affirmed. Because the word “surrender” in the bankruptcy code, 11 U.S.C. § 521(a)(2), requires that debtors relinquish their right to possess the property, we affirm.

I. BACKGROUND

David and Donna Failla own a house in Boca Raton, Florida. They financed their purchase with a $500,000 mortgage. The Faillas defaulted on that mortgage in 2009. Citibank, the owner of the mortgage and the promissory note, filed a foreclosure action in a Florida court. The Faillas are opposing that foreclosure action.

The Faillas filed for bankruptcy in 2011. During the bankruptcy proceedings, the Faillas admitted that they own the house, that the house is collateral for the mortgage, that the mortgage is valid, and that the balance of the mortgage exceeds the value of the house. They also filed a statement of intention, 11 U.S.C. § 521(a)(2), to surrender the house. Because the house had a negative value, the trustee “abandoned” it back to the Faillas, 11 U.S.C. § 554. The Faillas continue to live in the house while they contest the foreclosure action.

Citibank filed a motion to compel surrender in the bankruptcy court. Citibank argued that the Faillas’ opposition to the foreclosure action contradicted their statement of intention to surrender the house. The Faillas argued that their opposition to the foreclosure action is not inconsistent with surrendering the house.

The bankruptcy court granted Citibank’s motion to compel surrender and ordered the Faillas to stop opposing the foreclosure action. See In re Failla, 529 B.R. 786, 793 (Bankr. S.D. Fla. 2014). The bankruptcy court explained that if the Faillas do not comply with its order, it may “enter an order vacating [their] discharge.” Id. The district court affirmed on appeal. See Failla v. Citibank, N.A., 542 B.R. 606, 612 (S.D. Fla. 2015).

The Faillas now appeal to this Court. After the parties filed their briefs, Citibank filed a motion to strike portions of the Faillas’ briefing that were raised for the first time on appeal. The disputed sections argue that the only remedy available to the bankruptcy court was lifting the automatic stay for Citibank, which would allow Citibank to foreclose on the house in the ordinary course. This Court ruled that the motion to strike should be carried with the case.

II. STANDARD OF REVIEW

“Because the district court functions as an appellate court in reviewing bankruptcy court decisions, this court is the second appellate court to review bankruptcy court cases.” In re Glados, Inc., 83 F.3d 1360, 1362 (11th Cir. 1996). We “assess the bankruptcy court’s judgment anew, employing the same standard of review the district court itself used.” In re Globe Mfg. Corp., 567 F.3d 1291, 1296 (11th Cir. 2009). “Thus, we review the bankruptcy court’s factual findings for clear error, and its legal conclusions de novo.” Id.

III. DISCUSSION

We divide our discussion in two parts. First, we explain that section 521(a)(2) prevents debtors who surrender their property from opposing a foreclosure action in state court. Second, we explain that the bankruptcy court had the authority to order the Faillas to stop opposing their foreclosure action.

A. Debtors Who Surrender Their Property in Bankruptcy May Not Oppose a Foreclosure Action in State Court.

Section 521(a)(2) states a bankruptcy debtor’s responsibilities when his schedule of assets and liabilities includes mortgaged property:

(a) The debtor shall ?

(2) if an individual debtor’s schedule of assets and liabilities includes debts which are secured by property of the estate—

(A) within thirty days after the date of the filing of a petition under chapter 7 of this title or on or before the date of the meeting of creditors, whichever is earlier, or within such additional time as the court, for cause, within such period fixes, file with the clerk a statement of his intention with respect to the retention or surrender of such property and, if applicable, specifying that such property is claimed as exempt, that the debtor intends to redeem such property, or that the debtor intends to reaffirm debts secured by such property; and

(B) within 30 days after the first date set for the meeting of creditors under section 341(a), or within such additional time as the court, for cause, within such 30-day period fixes, perform his intention with respect to such property, as specified by subparagraph (A) of this paragraph;

except that nothing in subparagraphs (A) and (B) of this paragraph shall alter the debtor’s or the trustee’s rights with regard to such property under this title, except as provided in section 362(h).

11 U.S.C. § 521(a)(2). Subsection (A) requires the debtor to file a statement of intention about what he plans to do with the collateral for his debts. See Fed. R. Bankr. P. 1007(b)(2). The statement of intention must declare one of four things: the collateral is exempt, the debtor will surrender the collateral, the debtor will redeem the collateral, or the debtor will reaffirm the debt. See In re Taylor, 3 F.3d 1512, 1516 (11th Cir. 1993). After the debtor issues his statement of intention, subsection (B) requires him to perform the option he declared. Id.

The question here is whether the Faillas satisfied their declared intention to surrender their house under section 521(a)(2)(B). To answer that question, we must decide to whom debtors must surrender their property and whether surrender requires debtors to acquiesce to a creditor’s foreclosure action. The district court and the bankruptcy court correctly concluded that the Faillas violated section 521(a)(2) by opposing Citibank’s foreclosure action after filing a statement of intention to surrender their house.

We agree with both the district court and the bankruptcy court that section 521(a)(2) requires debtors who file a statement of intent to surrender to surrender the property both to the trustee and to the creditor. Even if the trustee abandons the property, debtors’ duty to surrender the property to the creditor remains. The text and the context of the statute compel this interpretation.

Reading “surrender” to refer only to the trustee of the bankruptcy estate renders section 521(a)(2) superfluous with section 521(a)(4). Under the surplusage canon, no provision “should needlessly be given an interpretation that causes it to duplicate another provision.” Antonin Scalia & Bryan A. Garner, Reading Law 174 (2012). See also Inhabitants of Montclair Twp. v. Ramsdell, 107 U.S. 147, 152 (1883) (“It is the duty of the court to give effect, if possible, to every clause and word of a statute ?”). Section 521(a)(4) states that “[t]he debtor shall ? surrender to the trustee all property of the estate.” 11 U.S.C. § 521(a)(4). Because section 521(a)(4) already requires the debtor to surrender all of his property to the trustee so the trustee can decide, for example, whether to liquidate it or abandon it, section 521(a)(2) must refer to some other kind of surrender.

When the bankruptcy code means a debtor must surrender his property either to the creditor or the trustee, it says so. On the one hand, section 1325(a)(5)(C) states that “the debtor surrenders the property securing such claim to such holder,” which clearly contemplates surrender to a creditor. 11 U.S.C. § 1325(a)(5)(C) (emphasis added). Congress did not use that language here. On the other hand, section 521(a)(4) states that “[t]he debtor shall ? surrender to the trustee all property of the estate,” which clearly contemplates surrender to the trustee. Id. § 521(a)(4) (emphasis added). Congress did not use that language either.

What Congress did say in section 521(a)(2) is “surrender,” without specifying to whom the surrender is made. But the lack of an object makes sense because a debtor who decides to surrender his collateral must surrender it to both the trustee and the creditor. The debtor first surrenders it to the trustee, id. § 521(a)(4), who decides whether to liquidate it, id. § 704(a)(1), or abandon it, id. § 554. If the trustee abandons it, then the debtor surrenders it to the creditor, id. § 521(a)(2).

The word “surrender” in section 521(a)(2) is used with reference to the words “redeem” and “reaffirm,” and those words plainly refer to creditors. A debtor “redeems” property by paying the creditor a particular amount, and he “reaffirms” a debt by renegotiating it with the creditor. See Taylor, 3 F.3d at 1514 n.2; see also 11 U.S.C. §§ 524(c), 722. Because “[c]ontext is a primary determinant of meaning,” Scalia & Garner, supra, at 167, the word “surrender” likely refers to a relationship with a creditor as well. We said as much in dicta in Taylor. See 3 F.3d at 1514 n.2 (“Surrender provides that a debtor surrender the collateral to the lienholder who then disposes of it pursuant to the requirements of state law.” (emphasis added)).

Other provisions of the bankruptcy code that provide a remedy to creditors when a debtor violates section 521(a)(2) suggest that the word “surrender” does not refer exclusively to the trustee. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, Pub. L. No. 109–8, § 305, 119 Stat. 23, added two sections to the bankruptcy code that provide remedies for creditors with respect to personal property. 11 U.S.C. §§ 362(h), 521(d). Section 362(h) punishes a debtor who violates section 521(a)(2) by lifting the automatic stay which allows the creditor to pursue other remedies against the debtor immediately. 11 U.S.C. § 362(h)(1). Section 362(h) allows the trustee of the bankruptcy estate to override this remedy, but only if the trustee moves the court to “order[?] appropriate adequate protection of the creditor’s interest.” Id. § 362(h)(2). And section 521(d) allows a creditor to consider the debtor in default because he declared bankruptcy if the debtor violates section 521(a)(2). See id. § 521(d).

That these remedies apply only to personal property is irrelevant. Section 521(a)(2) uses the generic word “property” and draws no distinction between real and personal property. Congress provided additional remedies for creditors secured by personal property, but the contextual clue remains the same. These remedies for creditors reflect an obvious point about section 521(a)(2): it is a provision that affects and protects the rights of creditors.

We also agree with the bankruptcy court and the district court that “surrender” requires debtors to drop their opposition to a foreclosure action. The bankruptcy code does not define the word “surrender,” so we give it its “contextually appropriate ordinary meaning.” Scalia & Garner, supra, at 70; see also In re Piazza, 719 F.3d 1253, 1261 (11th Cir. 2013) (applying this canon to the bankruptcy code). One meaning of “surrender” is “to give or deliver up possession of (anything) upon compulsion or demand.” Surrender, Webster’s New International Dictionary 2539 (2d ed. 1961); see also Surrender, Oxford English Dictionary (online ed.) (“To give up (something) out of one’s own possession or power into that of another who has or asserts a claim to it.”) (all Internet materials as visited Sept. 15, 2016, and available in Clerk of Court’s case file). But this meaning is not contextually appropriate. When the bankruptcy code means “physically turn over property,” it uses the word “deliver” instead of “surrender.” See, e.g., 11 U.S.C. §§ 542(a), 543(b)(1); see also id. § 727(d)(2) (using the phrase “deliver or surrender,” which suggests they are different). The presumption of consistent usage instructs that “[a] word or phrase is presumed to bear the same meaning throughout a text” and that “a material variation in terms suggests a variation in meaning.” Scalia & Garner, supra, at 170; see also Russello v. United States, 464 U.S. 16, 23 (1983).

Another meaning of “surrender” is “[t]he giving up of a right or claim.” Surrender, Black’s Law Dictionary (10th ed. 2014); see also Surrender, Webster’s New International Dictionary 2539 (“To give up completely; to resign; relinquish; as, to surrender a right, privilege, or advantage.”). This meaning describes a legal relationship, as opposed to a physical action, which makes sense in the context of section 521(a)(2)—a provision that describes other legal relationships like “reaffirmation” and “redemption.” This definition is in line with existing authorities. See In re Pratt, 462 F.3d 14, 18–19 (1st Cir. 2006) (“[T]he most sensible connotation of ‘surrender’ in the ? context [of section 521(a)(2)] is that the debtor agreed to make the collateral available to the secured creditor—viz., to cede his possessory rights in the collateral ?”); In re White, 487 F.3d 199, 205 (4th Cir. 2007) (“[T]he word ‘surrender’ [in section 1325(a)(5)(C)] means the relinquishment of all rights in property, including the possessory right, even if such relinquishment does not always require immediate physical delivery of the property to another.”); In re Plummer, 513 B.R. 135, 143–44 (Bankr. M.D. Fla. 2014); 8 Collier on Bankruptcy § 1325.06[4] (16th ed.) (“Surrender in th[e] context [of section 1325(a)(5)(C)] means simply the relinquishment of any rights in the collateral.”).

Because “surrender” means “giving up of a right or claim,” debtors who surrender their property can no longer contest a foreclosure action. When the debtors act to preserve their rights to the property “by way of adversarial litigation,” they have not “relinquish[ed] ? all of their legal rights to the property, including the rights to possess and use it.” White, 487 F.3d at 206 (emphasis omitted). The “retention of property that is legally insulated from collection is inconsistent with surrender.” Id. at 207. Ordinarily, when debtors surrender property to a creditor, the creditor obtains it immediately and is free to sell it. Assocs. Commercial Corp. v. Rash, 520 U.S. 953, 962 (1997). Granted, a creditor must take some legal action to recover real property—namely, a foreclosure action. See Fla. Stat. Ann. §§ 702.01–702.11. Foreclosure proceedings ensure that debtors do not have to determine unilaterally issues of priority if there are multiple creditors or surplus if the value of the property exceeds the liability. See Plummer, 513 B.R. at 144. Debtors who surrender property must get out of the creditor’s way. “[I]n order for surrender to mean anything in the context of § 521(a)(2), it has to mean that ? debtor[s] ? must not contest the efforts of the lienholder to foreclose on the property.” In re Elowitz, 550 B.R. 603, 607 (Bankr. S.D. Fla. 2016). Otherwise, debtors could obtain a discharge in bankruptcy based, in part, on their sworn statement to surrender and “enjoy possession of the collateral indefinitely while hindering and prolonging the state court process.” Id. (quoting In re Metzler, 530 B.R. 894, 900 (Bankr. M.D. Fla. 2015)).

The hanging paragraph in section 521(a)(2) also does not give the debtor the right to oppose a foreclosure action. The hanging paragraph states that “nothing in subparagraphs (A) and (B) of this paragraph shall alter the debtor’s or the trustee’s rights with regard to such property under this title, except as provided in section 362(h).” 11 U.S.C. § 521(a)(2). The key words for purposes of this dispute are “under this title.” The hanging paragraph means that section 521(a)(2) does not affect the debtor’s or the trustee’s bankruptcy rights. Section 521(a)(2) does not affect the trustee’s bankruptcy rights because a debtor must first surrender property to the trustee—who liquidates it or abandons it—before surrendering it to the creditor. See id. § 521(a)(4). And section 521(a)(2) does not affect the debtor’s bankruptcy rights because a creditor is still subject to the automatic stay and cannot foreclose on the property until the trustee decides to abandon it. The hanging paragraph spells out an order of operations. It does not mean that a debtor who declares he will surrender his property can then undo his surrender after the bankruptcy is over and the creditor initiates a foreclosure action.

Concerns about fairness are not in tension with this outcome. During the bankruptcy proceedings, the Faillas declared that they would surrender the property, that the mortgage is valid, and that Citibank has the right to foreclose. Compelling them to stop opposing the foreclosure action requires them to honor that declaration. The Faillas may not say one thing in bankruptcy court and another thing in state court:

The concern here is that the Debtor is making a mockery of the legal system by taking inconsistent positions. In an effort to obtain her chapter 7 discharge, the Debtor swears—under the penalty of perjury—an intention to “surrender” her property. In other words, the Debtor is representing to the Court that she will make her property available to the Bank by refraining from taking any overt act that impedes the Bank’s ability to foreclose its interest in the property. Yet, once she receives her discharge, the Debtor in fact impedes the Bank’s ability to foreclose its mortgage.

In re Guerra, 544 B.R. 707, 710 (Bankr. M.D. Fla. 2016). In bankruptcy, as in life, a person does not get to have his cake and eat it too.

Section 521(a)(2) requires a debtor to either redeem, reaffirm, or surrender collateral to the creditor. Having chosen to surrender, the debtor must drop his opposition to the creditor’s subsequent foreclosure action. Because the Faillas filed a statement of intention to surrender their house, they cannot contest the foreclosure action.

B. The Bankruptcy Court Had the Authority to Order the Faillas to Stop Opposing the State Foreclosure Action.

For the first time on appeal, the Faillas argue that even if they breached their duty to surrender under section 521(a)(2), the only remedy available to the bankruptcy court was to lift the automatic stay for Citibank, which would allow Citibank to foreclose on the house in the ordinary course. Citibank asked us to strike this portion of the Faillas’ briefs in their May 25 motion to strike, which was carried with the case. The Faillas concede that they did not raise this argument below. They ask us to excuse their forfeiture because their argument is an important, unsettled question of law. This argument is not forfeited, but fails on the merits, rendering Citibank’s motion to strike moot.

The Faillas’ new argument falls within exceptions to the general rule that a circuit court will not consider an issue not raised in the district court. See Access Now, Inc. v. Sw. Airlines Co., 385 F.3d 1324, 1332 (11th Cir. 2004) (quoting Wright v. Hanna Steel Corp., 270 F.3d 1336, 1342 (11th Cir. 2001)). It is a “pure question of law” and its “proper resolution is beyond any doubt.” Id. Moreover, the Faillas’ argument is intertwined with their other arguments. For instance, part of the reason the Faillas contend the bankruptcy court cannot order them to stop opposing the foreclosure action is that section 521(a)(2) is merely a “notice statute” that does not affect substantive property rights.

On the merits, however, bankruptcy courts are not limited to lifting the automatic stay. Bankruptcy courts have broad powers to remedy violations of the mandatory duties section 521(a)(2) imposes on debtors. See Taylor, 3 F.3d at 1516. Section 105(a) states that bankruptcy courts can “issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title,” 11 U.S.C. § 105(a), which includes section 521(a)(2). Bankruptcy judges also have “broad authority ? to take any action that is necessary or appropriate ‘to prevent an abuse of process.’?” Marrama v. Citizens Bank of Mass., 549 U.S. 365, 375 (2007) (quoting 11 U.S.C. § 105(a)). A debtor who promises to surrender property in bankruptcy court and then, once his debts are discharged, breaks that promise by opposing a foreclosure action in state court has abused the bankruptcy process. See Guerra, 544 B.R. at 710.

If a bankruptcy court could only lift the automatic stay, then debtors could violate section 521(a)(2) with impunity. The automatic stay is always lifted at the end of the bankruptcy proceedings, see 2 Bankruptcy Law Manual § 10:7 (5th ed.), so this remedy does nothing to punish debtors who lie to the bankruptcy court about their intent to surrender property. While a creditor may be able to invoke the doctrine of judicial estoppel in state court to force debtors to keep a promise made in bankruptcy court, its availability does not affect the statutory authority of bankruptcy judges to remedy abuses that occur in their courts. And there is nothing strange about bankruptcy judges entering orders that command a party to do something in a nonbankruptcy proceeding. Bankruptcy courts “regularly exercise jurisdiction to tell parties what they can or cannot do in a non-bankruptcy forum.” In re Lapeyre, 544 B.R. 719, 723 (Bankr. S.D. Fla. 2016). Just as the bankruptcy court may “order [?] creditors who violate the automatic stay to take corrective action in the non-bankruptcy litigation,” the bankruptcy court may “order the Debtors to withdraw their affirmative defenses and dismiss their counterclaim in the Foreclosure Case.” Id. The bankruptcy court had the authority to compel the Faillas to fulfill their mandatory duty under section 521(a)(2) not to oppose the foreclosure action in state court.

IV. CONCLUSION

We AFFIRM the order compelling the Faillas to surrender their home to Citibank. We DENY AS MOOT the motion to strike.

WILLIAM PRYOR, Circuit Judge:

in-re-failla-11th-app-cir-no-15-15626-oct-4-2016

NBC News-

A federal judge in Nevada said professional racecar driver Scott Tucker and several of his companies owe $1.27 billion to the Federal Trade Commission after systematically deceiving payday lending customers about the cost of their loans.

In one example, lending documents indicated that a customer who borrowed $500 would only have a finance charge of $150, for a total payment of $650 — but the actual finance charge was $1,425.

In a decision late on Friday, Chief Judge Gloria Navarro of the federal court in Las Vegas, Nevada said Tucker was “specifically aware” that customers often did not understand the terms of their loans, and was at least “recklessly indifferent” toward how those loans were marketed.

[NBC NEWS]

Fortune –

Government ordered to turn over thousands of documents.

Investors challenging the legality of the government’s effective nationalization of Fannie Mae and Freddie Mac in August 2012 appear to be making some headway with at least one of the two key trial judges presiding over the sprawling, $130 billion litigation stemming from that event.

In an 81-page ruling unsealed Monday evening, Court of Federal Claims judge Margaret Sweeney ordered the U.S. Treasury Department to turn over 11,000 documents that shed light on why it took that extraordinary action—rejecting every single invocation of privilege over them that had been asserted by the Treasury, the Federal Housing Finance Agency (FHFA), and the White House.

[FORTUNE]

H/T Dave Krieger for this opinion

10-3-16-sweeney-order-granting-fairholme-motion-to-compel

MCLEAN, VA–(Marketwired – Oct 5, 2016) –  Freddie Mac (OTCQB: FMCC) today announced it sold via auction 5,364 deeply delinquent non-performing loans (NPLs) from its mortgage-related investments portfolio. The loans are currently serviced by either Wells Fargo Bank, N.A. or Ditech Financial, LLC. The transaction is expected to settle in December 2016, and servicing will be transferred post-settlement. The sale is part of Freddie Mac’s Standard Pool Offerings (SPO^®). Freddie Mac, through its advisors, began marketing the transaction on September 8, 2016, to potential bidders, including minority and women-owned businesses (MWOBs), non-profits, neighborhood advocacy funds and private investors active in the NPL market.

The loans were offered as four separate pools of geographically diverse mortgage loans. Investors had the flexibility to bid on each pool individually and/or a combination of pools. All four pools were sold at a weighted average price in the mid-70s as a percent of the total unpaid principal balance.

The loans have been delinquent for over two years, on average. Given the deep delinquency status of the loans, the borrowers have likely been evaluated previously for or are already in various stages of loss mitigation, including modification or other alternatives to foreclosure, or are in foreclosure. Mortgages that were previously modified and subsequently became delinquent comprise approximately 47.5 percent of the aggregate pool balance. The aggregate pool is geographically diverse and has a loan-to-value ratio of approximately 86 percent, based on Broker Price Opinion (BPO).

The pools and winning bidders are summarized below:

Advisors to Freddie Mac on the transaction were Wells Fargo Securities, LLC and First Financial Network, Inc., a woman-owned business.

Through the first half of 2016, Freddie Mac sold $5.3 billion in NPLs as part of its strategy to reduce the less liquid assets in its mortgage-related investments portfolio. Requirements guiding the servicing of these transactions are focused on improving borrower outcomes and stabilizing communities. In April 2016, Freddie Mac’s regulator, the Federal Housing Finance Agency, announced enhanced requirements [PDF] for NPL sales. Additional information about the company’s NPL sales is at http://www.freddiemac.com/npl/.

H/T YOUNG LAW GROUP

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