August, 2018 | FORECLOSURE FRAUD | by DinSFLA

Archive | August, 2018

Investment Firms Sue US Bank Over RMBS Trust Losses

Investment Firms Sue US Bank Over RMBS Trust Losses

LAW 360-

BlackRock, Prudential and other investment firms have sued US Bank in New York state court, alleging it ignored “pervasive and systemic” issues in the underlying loan pools of 21 residential mortgage-backed securities trusts it administers, which were secured by more than $18.3 billion at the time of securitization.

The proposed class action filed Monday alleges the bank — described as the nation’s largest corporate trustee, with nearly one-third of all structured financial trust business — has a fiduciary duty and a contractual obligation to enforce their…

[LAW 360]

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Bank of America freezes account of immigrant Ph.D candidate who’s studied in U.S. for seven years

Bank of America freezes account of immigrant Ph.D candidate who’s studied in U.S. for seven years

Dallas News-

Saeed Moshfegh woke up earlier this month to discover the strangest thing: though he had plenty of money in his Bank of America account, he couldn’t access it.

An Iranian getting his Ph.D in physics at the University of Miami in Florida, Moshfegh used the account for everyday transactions. All he had to do to maintain the account was show proof of legal residency every six months.

“I think it’s onerous, but I’d been doing it,” said Moshfegh, who has lived in the U.S. for the past seven years. He recently married an American.

[DALLAS NEWS]

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Supreme Court Could Kill Some Foreclosure Collection Lawsuits

Supreme Court Could Kill Some Foreclosure Collection Lawsuits

Bloomberg-

The fate of potentially thousands of lawsuits challenging nonjudicial foreclosures is up for grabs after the U.S. Supreme Court on June 28 agreed to hear a case that will determine whether federal debt collection laws apply to out-of-court home repossessions.

The high court elected to hear an appeal of a Jan. 19 ruling in the U.S. Court of Appeals for the Tenth Circuit that found that the Fair Debt Collection Practices Act does not apply to foreclosures that are not done with a judge’s supervision.

While the specifics of the case turn on narrow technical readings of the FDCPA, a 1977 law that aimed to stop abusive debt collection practices, the stakes of the case are high.

[BLOOMBERG]

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Debt-Collection Dispute Gets U.S. Supreme Court Review

Debt-Collection Dispute Gets U.S. Supreme Court Review

Bloomberg-

The U.S. Supreme Court agreed to decide whether thousands of borrowers can invoke a federal debt-collection law when they are facing foreclosure.

The justices said they will hear an appeal from a Colorado man who defaulted on a $330,000 home loan in 2009 and is now battling a law firm that sought foreclosure on behalf of lender Wells Fargo & Co.

The issue is whether the Fair Debt Collection Practices Act, which protects borrowers, applies in foreclosure proceedings that take place outside the court system. Lower courts are divided on the question.

[BLOOMBERG]

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Kavanaugh: Good for Corporations, Bad for Your Wallet

Kavanaugh: Good for Corporations, Bad for Your Wallet

Better Markets-

With the Senate Judiciary Committee poised to open hearings to consider Judge Brett Kavanaugh’s nomination to be an Associate Justice of the Supreme Court, Better Markets is issuing a report examining his record on economic and financial cases.  The detailed report finds that Judge Kavanaugh wants to cut back on investor protections and limit agency authority, consistently favoring business interests over American consumers.

The report, “A Supreme Court Justice Kavanaugh: Good for Corporations, Bad for Your Wallet” reviews key pending Supreme Court cases, analyzes Judge Kavanaugh’s record as a judge on the D.C. Circuit in economic and financial cases, and surveys some of the most important legal holdings in the financial arena, showing the profound impact that these cases have on the economic well-being of every American.

“If you care about what’s in your wallet, you should be very worried if Judge Kavanaugh becomes Justice Kavanaugh on the Supreme Court,” said Better Markets President and CEO Dennis Kelleher.  “Anyone who gets a paycheck, has a savings or checking account, uses a credit card or debit card, or conducts financial transactions of any shape or form—in other words, every single American—should care about how a Justice Kavanaugh would rule on critical financial issues that directly impact every American family.”

[BETTER MARKETS]

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New York Federal Court Holds County Tax Foreclosure May Constitute Fraudulent Conveyance

New York Federal Court Holds County Tax Foreclosure May Constitute Fraudulent Conveyance

Lexology-

The United States District Court for the Western District of New York recently reversed a Bankruptcy Court’s dismissal of an action and held that sales arising from tax foreclosures may be avoidable as fraudulent transfers. See Hampton v. Ontario Cty., New York, 2018 WL 3454688 (W.D.N.Y. July 18, 2018). The case involves two adversary proceedings commenced by homeowners against the County of Ontario (the “County”). In each matter, the County foreclosed on plaintiffs’ homes after plaintiffs failed to pay property taxes. In one case the plaintiffs owed about $1,200 in taxes and in the other they owed about $5,200. After the County obtained a final judgment in each matter, the plaintiff homeowners filed Chapter 13 bankruptcy petitions and then adversary proceedings against the County, alleging that the taking of their homes were constructively fraudulent transfers under 11 U.S.C. § 548(a)(1)(B) due to the disparity between the value of the homes and the minimal taxes owed. The County proceeded to sell the properties—one for $22,000 and one for $27,000—under a stipulation that the sales were subject to the determination in the adversary proceedings. The County moved to dismiss the actions, and the Bankruptcy Court granted the motion. In doing so, it cited BFP v. Resolution Trust Corp., 511 U.S. 531 (1994), where the United States Supreme Court held that a reasonably equivalent value for foreclosed property “is the price in fact received at the foreclosure sale, so long as all the requirements of the State’s foreclosure law have been complied with[.]”.

[LEXOLOGY]

also

NCBRC-

A tax sale was avoidable as constructively fraudulent where the state tax foreclosure sale procedures did not include notice and bidding procedures likely to result in the debtors’ receiving “reasonably equivalent value.” Hampton v. Ontario County, No. 17-6808, and Gunsalus v. Ontario County, No. 17-6810 (W.D. N.Y. July 18, 2018).

In two separate cases with substantially identical facts, the Western District of New York addressed whether the bankruptcy court improperly dismissed the debtors’ adversary proceeding seeking to avoid the transfers of the debtors’ homes in tax sales.

Gliee and Brian Gunsalus, and Joseph and Brenda Hampton, owned their homes free and clear of mortgages. When both couples failed to pay county taxes, Ontario County instituted foreclosure actions in accordance with state law, and foreclosure judgments were entered against the homeowners. Both couples filed chapter 13 bankruptcy plans proposing to pay the tax arrears in full. The homes were sold at auction and the buyers notified of the pending adversary proceeding. The surplus from the sale of the properties went to the county.

[NCBRC]

 

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Lender’s “Boilerplate” Disavowal Dooms Rescission of a Common Loan Modification Agreement

Lender’s “Boilerplate” Disavowal Dooms Rescission of a Common Loan Modification Agreement

LEXOLOGY-

In a case with potentially broad implications, the Sixth Circuit becomes the first federal circuit court to hold that the Truth in Lending Act provides no right to rescind a loan modification agreement entered into with a successor creditor. TILA exempts from rescission “refinancing” transactions with “the same creditor secured by an interest in the same property” but not “refinancing” with a different creditor.

The case impacts those borrowers whose loans were assigned after origination (an everyday occurrence), and who seek rescission after receiving a common form of modification that lowered their interest rate, recalculated the principal due to include only the unpaid balance plus earned finance charges and premiums for continuation of insurance, and perhaps even extended their payment schedule.

Regulation Z provides that a “refinancing occurs when an existing obligation … is satisfied and replaced by a new obligation undertaken by the same consumer” and that a refinancing does not include a “reduction in the annual percentage rate with a corresponding change in the payment schedule.”

[LEXOLOGY]

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DEROUIN v. UNIVERSAL AMERICAN MORTGAGE COMPANY, LLC | FL 2nd DCA – compliance with 24 C.F.R. § 203.604 is a condition precedent to foreclosure, and the trial court erred in finding that the Derouins waived Universal’s compliance with the HUD regulations, we reverse and remand for entry of an order of involuntary dismissal

DEROUIN v. UNIVERSAL AMERICAN MORTGAGE COMPANY, LLC | FL 2nd DCA – compliance with 24 C.F.R. § 203.604 is a condition precedent to foreclosure, and the trial court erred in finding that the Derouins waived Universal’s compliance with the HUD regulations, we reverse and remand for entry of an order of involuntary dismissal

 

RICHARD J. DEROUIN and KIM E. DEROUIN, Appellants,
v.
UNIVERSAL AMERICAN MORTGAGE COMPANY, LLC, a Florida limited liability company, Appellee.

Case No. 2D17-1002.
District Court of Appeal of Florida, Second District.
Opinion filed August 22, 2018.
Appeal from the Circuit Court for Pasco County; Alicia Polk, Judge.

Dineen Pashoukos Wasylik and Jared M. Krukar of DPW Legal, Tampa, for Appellants.

Laura H. Howard and Stanford R. Solomon of The Solomon Law Group, P.A., Tampa, for Appellee.

LaROSE, Chief Judge.

Richard and Kim Derouin appeal a final foreclosure judgment entered in favor of Universal American Mortgage Company, LLC. We have jurisdiction. See Fla. R. App. P. 9.030(b)(1)(A). The Derouins contend that Universal failed to engage in the face-to-face meeting required by 24 C.F.R. § 203.604 (2012) prior to filing the foreclosure lawsuit. Critical to our resolution of this matter, they maintain that the trial court erred in finding that they waived Universal’s compliance with the federal regulations. Because the record before us does not show waiver, we reverse and remand for entry of an order of involuntary dismissal.

Background

Universal loaned money to the Derouins to buy a home. The loan, insured by the Federal Housing Administration, was memorialized by a note and secured by a mortgage. The note provided that, if the Derouins defaulted, Universal “may, except as limited by regulations of the Secretary [of Housing and Urban Development] in the case of payment defaults, require immediate payment in full of the principal balance remaining due and all accrued interest. . . . This Note does not authorize acceleration when not permitted by HUD regulations.” (Emphasis added).

The HUD regulations upon which the Derouins rely provide, in relevant part, as follows: “The mortgagee must have a face-to-face interview with the mortgagor, or make a reasonable effort to arrange such a meeting, before three full monthly installments due on the mortgage are unpaid.” 24 C.F.R. § 203.604(b).[1] The regulations also cabin the mortgagee’s ability to foreclose until the face-to-face interview is conducted. See 24 C.F.R. § 203.500 (“This subpart identifies servicing practices of lending institutions that HUD considers acceptable for mortgages insured by HUD. . . . It is the intent of the Department that no mortgagee shall commence foreclosure or acquire title to a property until the requirements of this subpart have been followed.”).

The regulations establish several exceptions to the face-to-face meeting requirement, two of which apply here. First, a mortgagee may be excused from conducting the interview when “[t]he mortgagor has clearly indicated that he will not cooperate in the interview.” 24 C.F.R. § 203.604(c)(3). Second, a meeting is unnecessary when “[a] reasonable effort to arrange a meeting is unsuccessful.” 24 C.F.R. § 203.604(c)(5). “A reasonable effort to arrange a face-to-face meeting with the mortgagor” includes “at a minimum . . . one letter sent to the mortgagor certified by the Postal Service as having been dispatched” and “at least one trip to see the mortgagor at the mortgaged property.” 24 C.F.R. § 203.604(d).

Universal sued the Derouins after they defaulted on their loan payments. Universal alleged that “[a]ll conditions precedent to commencement and maintenance of this action have been performed, satisfied[,] or otherwise discharged.” The Derouins answered the complaint, denied the substantive allegations, and asserted several affirmative defenses. Universal replied to the affirmative defenses.

With the trial court’s permission, the Derouins filed a second amended answer. See Thompson v. Jared Kane Co., Inc., 872 So. 2d 356, 360 (Fla. 2d DCA 2004)(“The Florida Rules of Civil Procedure reflect a clear policy that, absent exceptional circumstances, requests for leave to amend pleadings should be granted.”). In that pleading, the Derouins specifically denied that Universal satisfied all conditions precedent to filing suit. Specifically, they alleged that Universal had failed to conduct, or otherwise attempt to conduct, a face-to-face meeting within ninety days of default. The Derouins also raised a corresponding affirmative defense: Universal “[f]ailed to make face-to-face contact or failed to make reasonable attempts to contact Defendants face-to-face as required by 24 C.F.R. § 203.604.” Universal did not reply to this new defense.

Following trial, the trial court granted the Derouins’ motion for involuntary dismissal based on an evidentiary issue not before us. Universal moved for rehearing. The Derouins opposed that motion, arguing that there were several alternative bases supporting dismissal, including Universal’s failure to comply with HUD’s face-to-face meeting requirement.

The trial court granted Universal’s rehearing motion, finding that the Derouins had “waived their right to seek compliance with 24 C.F.R. § 203.604.” The trial court relied on Ms. Derouin’s trial testimony “that shortly after the default, she received a telephone call from the Plaintiff or Plaintiff’s servicer and that she no longer wished to deal directly with [them].” The trial court observed that the Derouins “were not prejudiced by the lack of a [face-to-face] meeting,” and that Universal could not reasonably be expected to engage in such a meeting “[a]fter Ms. Derouin communicated to [Universal] that she was not to be contacted directly.” The trial court awarded Universal a final judgment of foreclosure.

Standards of Review

The record compels us to employ several standards of review. To the extent that we review the trial court’s interpretation of the note, we utilize de novo review. See Mgmt. Comput. Controls, Inc. v. Charles Perry Constr., Inc., 743 So. 2d 627, 630 (Fla. 1st DCA 1999) (“[A] decision interpreting a contract presents an issue of law that is reviewable by the de novo standard of review.”). “However, the trial court’s order in this case is based-at least in part-on findings of fact and legal conclusions regarding an alleged [waiver]. We defer to the [trial] court’s findings of fact when they are based on competent, substantial evidence.” U.S. Bank Nat’l Ass’n v. Rios, 166 So. 3d 202, 207 (Fla. 2d DCA 2015). Yet, we are not obligated “to disregard record evidence that disproves the lower court’s findings or that reveals its ruling to be an abuse of discretion.” In re Doe, 932 So. 2d 278, 284 (Fla. 2d DCA 2005).

Because the trial court’s grant of rehearing, which vacated the prior dismissal order and resulted in entry of a final judgment, was not based upon competent substantial evidence, we reverse. Moreover, because our de novo review of the note demonstrates that involuntary dismissal was appropriate, we order such relief on remand. See Simpson v. State, 33 So. 3d 776, 778 (Fla. 4th DCA 2010) (“The standard of review of a trial court’s denial of a motion to dismiss is de novo.”); Perez v. Perez, 973 So. 2d 1227, 1231 (Fla. 4th DCA 2008) (“An involuntary dismissal is properly entered only where the evidence considered in the light most favorable to the non-moving party fails to establish a prima facie case.”); Robinson v. Wright, 425 So. 2d 589, 589 (Fla. 3d DCA 1982) (“Where no evidence [i]s presented in a non-jury trial to establish a prima facie case, it [i]s proper to grant defendant’s motion . . . for involuntary dismissal. . . .”).

Analysis

I. 24 C.F.R. § 203.604 as a condition precedent

The parties tacitly agree that the face-to-face meeting requirement is a condition precedent to filing a foreclosure lawsuit. For purposes of this appeal, we assume the same. See, e.g., ARC HUD I, LLC v. Ebbert, 212 So. 3d 513, 515-16 (Fla. 2d DCA 2017) (reversing an award of summary judgment because the mortgagee created an issue of material fact as to whether an exception applied to the “condition precedent” of a face-to-face interview); White v. Planet Home Lending, LLC, 234 So. 3d 802, 803 n.1 (Fla. 4th DCA 2018) (“Absent evidence that Appellee engaged in a face-to-face interview with Appellant before the former filed its foreclosure complaint or that any exception to the interview requirement applied, it would be appropriate to enter an involuntary dismissal of Appellee’s foreclosure complaint.” (citing McIntosh v. Wells Fargo Bank, N.A., 226 So. 3d 377, 379 (Fla. 5th DCA 2017))); Harris v. U.S. Bank Nat’l Ass’n, 223 So. 3d 1030, 1032 (Fla. 1st DCA 2017) (holding that compliance with face-to-face meeting requirement was a condition precedent to initiating foreclosure action); Palma v. JPMorgan Chase Bank, Nat’l Ass’n, 208 So. 3d 771, 773, 775 (Fla. 5th DCA 2016)(holding that mortgage language providing, in the event of a default, the debt could be accelerated “except as limited by regulations of the Secretary . . . of Housing and Urban Development” incorporated the federal regulations, including the face-to-face interview requirement, as a condition precedent to filing suit); cf. Laws v. Wells Fargo Bank, N.A., 159 So. 3d 918, 919 (Fla. 1st DCA 2015) (reversing mortgagee’s award of summary judgment because mortgagor was “entitled to raise failure to comply with [HUD regulations] as a valid defense to foreclosure”).

Seemingly, the case law is unsettled as to whether noncompliance with the regulations must be raised as an affirmative defense or as a specific denial in an answer. Compare Palma, 208 So. 3d at 774 (“We find that the trial court erred by requiring Appellant to raise Bank’s noncompliance with section 203.604 as an affirmative defense.”), with Harris, 223 So. 3d at 1033 (“A `defending party’s assertion that a plaintiff has failed to satisfy conditions precedent necessary to trigger contractual duties under an existing agreement is generally viewed as an affirmative defense, for which the defensive pleader has the burden of pleading and persuasion.'” (quoting Custer Med. Ctr. v. United Auto. Ins. Co., 62 So. 3d 1086, 1096 (Fla. 2010))). But see Chrzuszcz v. Wells Fargo Bank, N.A., 43 Fla. L. Weekly D1486, D1487 (Fla. 1st DCA June 28, 2018) (“Here, as in Palma, where the Bank asserted in the complaint that all conditions precedent had been satisfied, but the Borrower denied that assertion with the specific claim that the Bank failed to meet the face-to-face counseling requirement of section 203.604, the burden of proving the condition precedent was shifted back to the Bank.”).

We need not weigh in on the conflict. See Pagan v. Sarasota Cty. Pub. Hosp. Bd., 884 So. 2d 257, 264 (Fla. 2d DCA 2004) (“It is a long-standing rule of appellate jurisprudence that the appellate court should not undertake to resolve issues which, though of interest to the bench and bar, are not dispositive of the particular case before the court.”). As the Derouins inform us, “in an abundance of caution” they raised noncompliance as both an affirmative defense and as a specific denial.[2] Consequently, as the pleadings progressed below, Universal had to demonstrate its compliance with the regulations or that its compliance was excused. See McIntosh, 226 So. 3d at 379 (“Here, Borrowers raised noncompliance with § 203.602 and the terms of the note and mortgage as both a specific denial and an affirmative defense. Thus, the burden remained on Wells Fargo to demonstrate compliance with the applicable HUD regulations.”). As we shall explain, Universal demonstrated neither.

II. Whether the Derouins waived compliance

Whether the Derouins waived Universal’s compliance with the face-to-face meeting requirements begets an antecedent inquiry of whether the trial court could consider the issue.

A. Universal did not avoid the noncompliance affirmative defense

“In pleading to a preceding pleading a party shall set forth affirmatively. . . . waiver, and any other matter constituting an avoidance or affirmative defense.” Fla. R. Civ. P. 1.110(d) (emphasis added). “As a matter of law, waiver . . . [is an] affirmative defense[] that must be pleaded.” Louie’s Oyster, Inc. v. Villaggio Di Las Olas, Inc., 915 So. 2d 220, 223 (Fla. 4th DCA 2005) (emphasis added). Once the Derouins raised noncompliance as an affirmative defense, Universal should have replied if it sought to avoid the defense. “If an answer . . . contains an affirmative defense and the opposing party seeks to avoid it, the opposing party must file a reply containing the avoidance.” Fla. R. Civ. P. 1.100(a); see, e.g., Reno v. Adventist Health Sys./Sun-Belt, Inc., 516 So. 2d 63, 64-65 (Fla. 2d DCA 1987) (“[A] reply to an affirmative defense is necessary only in order to entitle the plaintiff to, in effect, prove an affirmative defense to an affirmative defense.”); see also Kitchen v. Kitchen, 404 So. 2d 203, 205 (Fla. 2d DCA 1981) (“[I]t is only when `new matter’ is sought to be asserted to avoid the affirmative defense that a reply is required. Consequently, where, as here, the plaintiff does not seek to avoid the substantive allegation of the defendant’s affirmative defense, he need not file . . . a reply.”); Lazar v. Allen, 347 So. 2d 457, 458 (Fla. 2d DCA 1977) (“Where a party files no reply to an affirmative defense, this merely denies (as opposed to avoids) the affirmative defense.” (citing Fla. R. Civ. P. 1.110(e))).

After all, “[l]itigants in civil controversies must state their legal positions within a particular document, a pleading, so that the parties and the court are absolutely clear what the issues to be adjudicated are.” Bank of Am., N.A. v. Asbury, 165 So. 3d 808, 809 (Fla. 2d DCA 2015). “An issue that has not been framed by the pleadings, noticed for hearing, or litigated by the parties is not a proper issue for the court’s determination.” Gordon v. Gordon, 543 So. 2d 428, 429 (Fla. 2d DCA 1989). Because Universal failed to address the waiver issue by reply to an affirmative defense, the trial court could not award Universal relief on such a basis. See, e.g., Wolowitz v. Thoroughbred Motors, Inc., 765 So. 2d 920, 923 (Fla. 2d DCA 2000) (“Since the defense was waived, it should not have been considered by the trial court, much less used as the basis for granting summary judgment.”); Frisbie v. Carolina Cas. Ins. Co., 162 So. 3d 1079, 1081 (Fla. 5th DCA 2015)(“Here, because Appellee raised the issue of unclean hands as an avoidance of Appellants’ two affirmative defenses, Appellee should have pleaded the issue in a reply to Appellants’ answer. . . .”); Boca Golf View, Ltd. v. Hughes Hall, Inc., 843 So. 2d 992, 993 (Fla. 4th DCA 2003) (“The trial court erred when it relied on a defense not raised by the pleadings to grant the motion for involuntary dismissal.”).

B. The Derouins’ specific denial

Universal fares no better against the Derouins’ specific allegation that it “[f]ailed to make face-to-face contact or failed to make reasonable attempts to contact [the Derouins] face-to-face as required by 24 C.F.R. § 203.604.” Their specific denial shifted the burden to Universal to prove compliance or an exception to compliance. See Nelson v. Hillsborough County, 189 So. 3d 1037, 1039 (Fla. 2d DCA 2016)(“Provided such compliance is specifically denied by the defendant, the burden shifts `to the plaintiff to prove the allegations concerning the subject matter of the specific denial.'” (quoting Sheriff of Orange Cty. v. Boultbee, 595 So. 2d 985, 987 (Fla. 5th DCA 1992))). Universal failed on both fronts. See 24 C.F.R. § 203.604(c)(3), (5). Although the trial court’s order granting Universal’s rehearing motion failed to specify which of the five enumerated exceptions it relied on to find waiver, subsections (3) and (5)[3] most aptly apply. See 24 C.F.R. § 203.604(c)(1)-(5).

i. 24 C.F.R. § 203.604(c)(3)

At trial, Ms. Shannon Georgantas, a senior staff account manager for Universal, admitted that Universal paid no visit to the Derouins’ residence for the purpose of conducting the face-to-face meeting. Elaine Marie Henning, an employee of Universal’s loan servicer, conceded that neither Universal nor its servicer requested a face-to-face meeting with the Derouins in the three-month period following their initial default.

Ms. Henning testified that the servicer’s records reflected that the servicer called the Derouins’ residence roughly forty-five days after default. Apparently, Ms. Derouin instructed the servicer to “only contact [the Derouins’] attorney, he is now handling everything. . . . She will not speak or give any info to us.” Ms. Henning offered that the servicer did not “go out and knock on the Derouin[s’] door” because “[w]e were told to direct everything to her attorney.” Curiously, the servicer continued to mail letters directly to the Derouins. Ms. Henning admitted that there had been no request of the Derouins, or their attorney, for the required face-to-face meeting.

Ms. Derouin testified that the servicer never offered a face-to-face meeting. She also testified that she never told Universal or its servicer that she was unwilling to conduct a face-to-face meeting “because they didn’t offer.” Ms. Derouin readily admitted, that when she spoke on the phone with the servicer, she “told them that I contacted an attorney and they should direct all questions to the attorney.” She denied that she “ever indicated to them that [she was] no longer open to a face-to-face meeting notwithstanding [she] hired an attorney.”

We cannot say that the Derouins clearly indicated that they would not engage in the face-to-face meeting. Indeed, if Universal never offered such an opportunity, it cannot be the case that the Derouins demonstrated a reluctance or refusal to meet sufficient to excuse Universal’s obligations. We are even less inclined to conclude that Ms. Derouin’s statement that Universal or its servicer should speak to her lawyer constitutes a clear indication that she was unwilling to cooperate in the face-to-face interview. There was no evidence Universal or its servicer was prohibited from asking the Derouins for a face-to-face meeting through their attorney, nor was there any evidence that the Derouins would not participate in one if asked.

In an apparent effort to buttress its waiver finding, the trial court pointed out that the Derouins “had no interest in mediation.” Section 203.604 does not mandate postfiling mediation. Ms. Derouin’s rejection of mediation after suit was filed is not indicative of her willingness to meet face-to-face prior to filing. In any event, postfiling actions cannot cure Universal’s failure to comply with section 203.604. A party’s right to sue “must be measured by the facts as they exist when the suit was instituted.” Voges v. Ward, 123 So. 785, 793 (Fla. 1929) (holding that party did not have a right to repossess a car when it filed suit before it possessed the notes necessary to have the right to repossession under the contract).

ii. 24 C.F.R. § 203.604(c)(5)

Section 203.604(c)(5) excuses the face-to-face meeting requirement where “[a] reasonable effort to arrange a meeting is unsuccessful.” However, this presupposes that an effort was made. Universal’s witnesses, Ms. Georgantas and Ms. Henning, as well as Ms. Derouin, testified that neither Universal nor its servicer made any such effort. Thus, the trial court’s finding of waiver is unsupported under this claimed exception.

III. Trial by consent

Universal urges that the parties tried the waiver issue by consent. See Fla. R. Civ. P. 1.190(b) (“When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings.”).

An exception to the rule requiring relief to be pled is if the issue is tried by consent of the parties. “When issues not raised by the pleadings are tried by express or implied consent, they shall be treated in all respects as if they had been raised in the pleadings.” An issue is tried by consent “when there is no objection to the introduction of evidence on that issue.”

Fed. Home Loan Mortg. Corp. v. Beekman, 174 So. 3d 472, 475 (Fla. 4th DCA 2015) (first quoting Fla. R. Civ. P. 1.190(b); then quoting Scariti v. Sabillon, 16 So. 3d 144, 145-46 (Fla. 4th DCA 2009)). We reject Universal’s position.

Although an unpleaded issue may be tried by consent when a party fails to object to the introduction of evidence on that issue:

[I]n order to rely on questions and answers not objected to during trial as evidencing the opposing party’s implied consent to try unpled issues, it must be shown that such questions and answers are irrelevant to any pled issues; the failure to object cannot be taken as implied consent to try unpled issues when there is no occasion for such party to object that such evidence is irrelevant to the issues being tried.

Bilow v. Benoit, 519 So. 2d 1114, 1116 (Fla. 1st DCA 1988). Stated differently, “[a] failure to object cannot be construed as implicit consent to try an unpled theory when the evidence introduced is relevant to other issues properly being tried.” Raimi v. Furlong, 702 So. 2d 1273, 1285 (Fla. 3d DCA 1997); see also Nichols v. Michael D. Eicholtz, Enter., 750 So. 2d 719, 720 (Fla. 5th DCA 2000) (“We reject appellee’s argument that the parties tried the unpled action on an express contract by implied consent because an unpled theory may not be tried by implied consent when the evidence presented at trial is relevant to other issues which are properly being tried.”).

Universal argues that the Derouins consented to try the waiver issue by presenting evidence of Ms. Derouin’s request that Universal or its servicer contact her attorney. However, this evidence was relevant to the Derouins’ pleaded affirmative defense that Universal failed to make a reasonable effort to arrange a face-to-face meeting. See 24 C.F.R. § 203.604(c)(3), (5). The evidence was unrelated to Universal’s unpleaded avoidance.

In further support of its trial by consent argument, Universal notes the trial court’s request for posttrial written memoranda on the waiver issue. Universal apparently maintains that the Derouins’ failure to contemporaneously object to the trial court’s request evidenced that the parties tried the waiver issue by consent.

This argument is unavailing for two reasons. First, because the trial court sought written argument on the issue, we cannot conceive of why the Derouins would have been required to lodge a contemporaneous oral objection. Second, in accordance with the trial court’s request, the Derouins explained in their written memorandum that waiver was unavailable as an avoidance because Universal did not plead it. To the extent a contemporaneous objection is even necessary to prevent an unpleaded issue from being tried by consent, we believe that the Derouins’ written closing argument was tantamount to such an objection. See, e.g., Da Cunha v. Mann, 183 So. 3d 1113, 1115-16 (Fla. 3d DCA 2015) (stating that an issue was not tried by consent when the opposing party raised an objection upon receipt of the written order); cf. Givens v. Holmes, 241 So. 3d 232, 235 (Fla. 2d DCA 2018) (explaining that failure to raise contemporaneous objection did not preclude appellate review of issue “[b]ecause the trial court abruptly ended the hearing without articulating any findings or announcing the particular terms of the final judgment”).

Further, in their opening statement at trial, the Derouins proclaimed that “there is no valid excuse for [Universal]’s noncompliance. They haven’t raised it in the pleadings.” This was sufficient to alert both the trial court and Universal that the Derouins had no intent to allow for the waiver issue to be tried by consent. Cf. Arky, Freed, Stearns, Watson, Greer, Weaver & Harris, P.A. v. Bowmar Instrument Corp., 537 So. 2d 561, 563 (Fla. 1988) (“We cannot see the difference between objecting to the introduction of the evidence pertaining to an unpled claim at trial or by a motion in limine immediately prior to the trial. The effect is the same-calling the court’s attention to the fact that an unpled claim is not being tried by consent. . . .”).

Conclusion

Because the parties agree that compliance with 24 C.F.R. § 203.604 is a condition precedent to foreclosure, and the trial court erred in finding that the Derouins waived Universal’s compliance with the HUD regulations, we reverse and remand for entry of an order of involuntary dismissal.

Reversed and remanded with instructions.

LUCAS and ROTHSTEIN-YOUAKIM, JJ., Concur.

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

[1] These regulations, pertaining to FHA-backed loans to “high-risk borrowers,” ensure that the lender “would engage in `loss mitigation’ measures . . . with the defaulting borrower, before foreclosing.” U.S. ex rel. Advocates for Basic Legal Equality, Inc. v. U.S. Bank, N.A., 816 F.3d 428, 429 (6th Cir. 2016).

[2] The Derouins sufficiently pleaded their claims that Universal failed to comply with the face-to-face meeting requirement. See Fla. R. Civ. P. 1.120(c) (“In pleading the performance or occurrence of conditions precedent, it is sufficient to aver generally that all conditions precedent have been performed or have occurred. A denial of performance or occurrence shall be made specifically and with particularity.” (emphasis added)); see also Bank of Am., N.A. v. Asbury, 165 So. 3d 808, 810 (Fla. 2d DCA 2015) (“A defendant, as the responding party, shoulders the responsibility of identifying a specific, unfulfilled condition precedent should it wish to deny that general averment.”).

[3] 24 C.F.R. § 203.604(c)(3) provides that a face-to-face meeting is not required if “[t]he mortgagor has clearly indicated that he will not cooperate in the interview.” Further, 24 C.F.R. §203.604(c)(5) excuses the face-to-face meeting when “[a] reasonable effort to arrange a meeting is unsuccessful.”

 

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In The United States Supreme Court – Obduskey v. McCarthy & Holthus LLP | DEBT COLLECTION PETITION GRANTED

In The United States Supreme Court – Obduskey v. McCarthy & Holthus LLP | DEBT COLLECTION PETITION GRANTED

H/T to DUBIN LAW OFFICES

20180530130041333_obduskey — cert. reply — FILED by DinSFLA on Scribd

20180516092613375_Obduskey brief in opposition 17-1307 by DinSFLA on Scribd

20180313120722163_obduskey — Cert. Petition — FILED by DinSFLA on Scribd

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TFH 8/26 | DUE TO HURRICANE LANE, WE ARE REBROADCASTING THIS SUNDAY THE FOLLOWING SHOW AS YOUR CO-HOSTS AND PRODUCTION STAFF TAKE SHELTER:  It’s the Rules of Evidence Stupid: 25 Ways in Which Foreclosure Attorneys Are Knowingly Committing Fraud on Our State and Federal Courts (Rebroadcast from June 14, 2015)

TFH 8/26 | DUE TO HURRICANE LANE, WE ARE REBROADCASTING THIS SUNDAY THE FOLLOWING SHOW AS YOUR CO-HOSTS AND PRODUCTION STAFF TAKE SHELTER: It’s the Rules of Evidence Stupid: 25 Ways in Which Foreclosure Attorneys Are Knowingly Committing Fraud on Our State and Federal Courts (Rebroadcast from June 14, 2015)

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 – August 26, 2018

DUE TO HURRICANE LANE, WE ARE REBROADCASTING THIS SUNDAY THE FOLLOWING SHOW AS YOUR CO-HOSTS AND PRODUCTION STAFF TAKE SHELTER:

It’s the Rules of Evidence Stupid: 25 Ways in Which Foreclosure Attorneys Are Knowingly Committing Fraud on Our State and Federal Courts (Rebroadcast from June 14, 2015)

.

 ———————

 

Not very long ago lenders filing foreclosure actions merely went into court nationwide reciting self-serving statements that a borrower was behind in mortgage payments, offering into evidence virtually no original supporting documentation, not even a loan payment accounting known as the “loan general ledger.”

Notwithstanding whatever evidentiary challenges borrowers might have made previously, unlike in other areas of American Law, foreclosure judges typically would merely take a foreclosing plaintiff’s printed word for it.

It was only, for instance, as late as 2001 that Hawaii Courts were instructed by the Hawaii Supreme Court to require that the loan general ledger in order to prove a “default” be submitted into evidence before a summary judgment could be entered.

And it was only more recently in 2017 that the Hawaii Supreme Court held that a foreclosing mortgagee must prove its “standing at inception” to foreclose, producing evidence of the possession of and right to enforce the underlying promissory note at the time the foreclosure lawsuit was first filed.

These evidentiary requirements in one form or another, in Hawaii enforced to the extent of reversing summary judgments where supported by inadmissible hearsay declarations of loan servicers, are now becoming commonplace in almost every State, but questions still remain concerning what level of proof on the part of a foreclosing mortgagee is necessary.

Unfortunately, in many state foreclosure courts such evidentiary requirements are still nonsensically considered satisfied where loan servicers merely attest to the foreclosing plaintiff having had possession of the underlying note at the time suit was filed and that their representatives are generally familiar with all of the records of prior loan servicers, even where there have been a succession of prior loan servicers, and even, for instance, regarding the service of default notices years earlier by unnamed others, another usually missing threshold evidentiary requirement for foreclosing.

Such testimony as “I saw the supporting documents back at the office” or “I am totally familiar with how Ioan servicers generally handle their books and records (called “boarding”) is inadmissible hearsay unless supported by evidence based on personal knowledge.

The Foreclosure Hour took our listeners in June 2015 inside a courtroom in Kona, Hawaii, where one foreclosure judge, Judge Ibarra, now retired, years before it became popular to require evidentiary support in the form of personal knowledge for securing a foreclosure decree displayed considerable foresight in refusing to accept mere allegations from otherwise polished foreclosure attorneys, requiring instead supporting proof, creating the now famous simple inquisitive admonition: ‘How does he knew?”, referring to loan servicer hearsay declarations.

Today, we rebroadcast that June 2015 show, as timely as ever, suggesting that today borrowers facing foreclosure as well as judges presiding over foreclosure cases need to confront foreclosing plaintiffs with similar challenges and demanding greater evidentiary detail.

For instance, today foreclosure plaintiffs must prove a payment default and standing to foreclose.

Don’t let your pretender lender merely submit an affidavit simply swearing that “here is a copy of the default notice” and here is a copy of the “original” of the promissory note entitling it to foreclosure.

Regarding the default notice, for instance, foreclosing mortgagees must prove that it was actually sent.

If accompanied by no signed return receipt requested, which is usually the case, courts should require an affidavit from whoever claims to have sent out the default notice, or computer or other evidence that it was created on the date it bears.

Remember, you can defeat summary judgment with your declaration that you never received a default notice and had you, the copy presented by the foreclosing mortgagee is in any event defective as it includes a demand for unexplained amounts in addition to claimed monthly arrearages and late fees.

Next, regarding the standing issue, demand to see how the foreclosing mortgagee supposedly came to possess a bearer note, for instance, asking for proof of payment for an assignment of the mortgage debt, including banking records and copies of transmittal documents. And hire an expert such as Dr. Kelley (with us on past shows) to scientifically evaluate the so-called “original’ note.

If a lost note affidavit is submitted to the court, seek to enforce the UCC evidentiary requirement in most jurisdictions that still an affidavit is required signed by the person claiming to have possessed and lost the original note.

Go to Court armed with your jurisdiction’s “Rules of Evidence” in hand and read the applicable Rules to your Judge with confidence.

Listen to what happened in one Kona Courtroom rebroadcast on today’s show, accompanied by our review all of the 25 ways in which foreclosing attorneys have similarly been attempting to defraud our courts, transforming them too often into collection agencies for crooks, ashamedly with the aid of the Bar.

And remember: “It’s the Rules of Evidence Stupid” as one of the best ways to defeat foreclosure.

Gary Dubin

.
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

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3:00 PM HAWAII 
6:00 PM PACIFIC
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ON KHVH-AM
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The Foreclosure Hour 12

 

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A Candidate Backed Medical Marijuana. Wells Fargo Closed Her Bank Account.

A Candidate Backed Medical Marijuana. Wells Fargo Closed Her Bank Account.

NYT-

Nikki Fried, a Democrat running for agriculture commissioner in Florida, has made no secret of her support for medical marijuana.

Further expansion of the state’s program is the highest priority on her campaign website. Before entering the race, she ran a lobbying firm, Igniting Florida, and described herself as “one of most visible faces and key activists in Florida’s burgeoning medical cannabis industry.”

Even so, employees at Wells Fargo, where her campaign held an account, had questions about her platform.

The bank, which says it has a policy against serving marijuana-related businesses, had noticed that Ms. Fried was “advocating for expanded patient access to medical marijuana.” It asked the campaign in July whether it would be receiving money from “lobbyists from the medical marijuana industry in any capacity.”

[NEW YORK TIMES]

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How a Wells Fargo Counting Error Cost Hundreds Their Homes

How a Wells Fargo Counting Error Cost Hundreds Their Homes

The Atlantic-

In a short section of its most recent quarterly report, Wells Fargo revealed that for more than five years, beginning in April 2010, the company had made “an automated miscalculation” that had dropped 625 mortgage holders below a threshold where they could receive a loan modification. Four hundred of these people subsequently had their homes foreclosed on. Wells Fargo finally caught the error in October 2015.

Coverage of the problem described it as “an error,” or even “a computer glitch.” The description in the Securities and Exchange Commission filing, meanwhile, raises as many questions as it answers: “This error in the modification tool caused an automated miscalculation of attorneys’ fees that were included for purposes of determining whether a customer qualified for a mortgage loan modification.”

As a result, Senators Elizabeth Warren and Brian Schatz sent Wells Fargo executives a long list of questions demanding to know the details of the case. In sum, their queries add up to an exasperated How could this have happened?

[THE ATLANTIC]

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MCGINNIS v. AMERICAN HOME MORTGAGE SERVICING, INC, |  11 Cir. – The jury found against Homeward on all claims and awarded McGinnis $3,506,000 in damages ($6,000 for economic injury, $500,000 for emotional distress, and $3,000,000 in punitive damages).

MCGINNIS v. AMERICAN HOME MORTGAGE SERVICING, INC, | 11 Cir. – The jury found against Homeward on all claims and awarded McGinnis $3,506,000 in damages ($6,000 for economic injury, $500,000 for emotional distress, and $3,000,000 in punitive damages).

201711494 by DinSFLA on Scribd

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Appellate Court Ordered CA Governor to Return “Unlawfully Diverted” Subprime Crisis Funds

Appellate Court Ordered CA Governor to Return “Unlawfully Diverted” Subprime Crisis Funds

Canada Free Press-

Gov. Jerry Brown was recently ordered by the state’s 3rd Appellate District Court to repay more than $331 million in funds the state illegally diverted from a national fund intended to help homeowners struggling with foreclosures from the housing crisis. Instead of complying with the court order, Democrats are pushing through a bill to legitimize the theft of funds.

The Assembly already passedAssembly Bill 1829, which makes the statutory changes related to the National Mortgage justifying this theft.  AB 1829 was passed on a party line in the Senate Committee on Budget and Fiscal Review, 12—5, with all Republicans on the committee voting no.

[CANADA FREE PRESS]

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Essex County Tech Schools Pull $16M from Bank over Foreclosure Practices

Essex County Tech Schools Pull $16M from Bank over Foreclosure Practices

TAPinto-

Essex County Schools of Technology is following suit with the county government and will no longer bank with Wells Fargo over the bank’s foreclosure practices.

Essex County Executive Joseph N. DiVincenzo, Jr. earlier this month announced the county was cutting ties with the bank and putting its $3.6 million in holdings elsewhere. The move was in defiance of what DiVincenzo called “predatory lending schemes and aggressive foreclosure proceedings” from the bank that have impacted residents.

Essex County Schools of Technology Superintendent James Pedersen, who oversees schools in Newark and West Caldwell, gave kudos to DiVincenzo for his decision.

“While the County Executive is speaking for Essex County residents, the school district is speaking for our students who see and understand how this affects their neighborhoods,” Pedersen said in a statement. “There are other more reputable banking institutions we can do business with that can provide us with first-class service and more peace of mind.”

[TAPinto]

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Hacker v. HOMEWARD RESIDENTIAL, INC., Cal: Court of Appeal | we conclude that Hacker has standing to pursue his claim for wrongful foreclosure. It follows that Hacker also has standing to pursue the remaining claims that derive from his action for wrongful foreclosure

Hacker v. HOMEWARD RESIDENTIAL, INC., Cal: Court of Appeal | we conclude that Hacker has standing to pursue his claim for wrongful foreclosure. It follows that Hacker also has standing to pursue the remaining claims that derive from his action for wrongful foreclosure

 

RON HACKER, as Trustee, etc., Plaintiff and Appellant,
v.
HOMEWARD RESIDENTIAL, INC., et al., Defendants and Respondents.

No. B278537.
Court of Appeals of California, Second District, Division One.
Filed August 16, 2018.
Appeal from a judgment of the Superior Court of Los Angeles County, Super. Ct. No. BC610795, Teresa A. Beaudet, Judge. Reversed with directions.

Law Office of Richard L. Antognini and Richard L. Antognini for Plaintiff and Appellant.

Wright, Finlay & Zak, Jonathan D. Fink and Charles C. McKenna for Defendants and Respondents Homeward Residential, Inc., Deutsche Bank National Trust Company, as Trustee for Soundview Home Loan Trust 2006-OPT 3, Asset-Backed Certificates, Series 2006-OPT 3, Western Progressive, LLC, Ocwen Loan Servicing, LLC, Wells Fargo Bank, N.A., as Trustee for Option One Mortgage Loan Trust 2006-2, Power Default Services, Inc., Brandy Berns, and Vicki Pospisil.

Jeffer Mangels Butler & Mitchell, Michael J. Hassen and Christopher H. Doyle for Defendant and Respondent Sand Canyon Corporation.

CERTIFIED FOR PUBLICATION

JOHNSON, J.

Ron Hacker (Hacker), as successor trustee to the 1713 Stearns LaVerne Family Trust (Stearns), sued Homeward Residential, Inc., (Homeward) formerly known as American Home Mortgage Servicing, Inc. (AHMSI); Sand Canyon Corporation, formerly known as Option One Mortgage Corporation (Sand Canyon); Western Progressive, LLC (Western Progressive); Deutsche Bank National Trust Company, as Trustee for Soundview Home Loan Trust 2006-OPT 3, Asset-Backed Certificates, Series 2006-OPT 3 (Deutsche Bank); Ocwen Loan Servicing, LLC (Ocwen); Linda Greene; Brandy Berns; DOC X; Larraine Brown; Vicki Pospisil; Wells Fargo Bank, N.A., as Trustee for Option One Mortgage Loan Trust 2006-2 (Wells Fargo); Power Default Services, Inc. (Power Default); T.D. Service Company; AHMSI Default Services; and DOES 10 through 100 for claims arising from an allegedly void assignment of the deed of trust (DOT) on real property located at 1713-1717 Stearns Drive in Los Angeles, California (the property), and a failed short sale agreement. The trial court sustained the demurrer by Homeward, Deutsche Bank, Western Progressive, Ocwen, Wells Fargo, Power Default, Brandy Berns, and Vicki Pospisil to all causes of action; and the court sustained the demurrer by Sand Canyon to the third through eighth causes of action.

The trial court also denied Hacker’s request for leave to amend. On appeal, he contends he can amend his pleading to allege causes of action for wrongful foreclosure, fraud, slander of title, declaratory relief, unfair business practices, and cancellation of instruments against Homeward, Deutsche Bank, Western Progressive, Ocwen, Wells Fargo, Power Default, Brandy Berns, Vicki Pospisil, and Sand Canyon.[1]

We find that the trial court abused its discretion in denying leave to amend. We therefore reverse.

FACTUAL SUMMARY

In 2006, Marcia Chaissions (Chaissions) obtained an $875,000 loan from Option One Mortgage Corporation (Option One). The loan was secured by a deed of trust against the property, which she acquired on February 2, 2006. On June 1, 2006, Option One transferred the loan to the Option One Mortgage Loan Trust 2006-2 (Option One Trust), a securitized investment trust, pursuant to a pooling and service agreement (PSA), under which Wells Fargo functioned as trustee and Option One as master servicer.

In December of 2007, Option One stopped originating new mortgage loans but continued to service its extant loans. On April 30, 2008, pursuant to a purchase and sale agreement dated March 17, 2008, Option One legally changed its name to Sand Canyon and sold its mortgage servicing portfolio to AHMSI.

On August 21, 2008, AHMSI assigned the DOT to Deutsche Bank as trustee for the certificate holders of the Soundview Home Loan Trust (Soundview Trust). On July 23, 2008, AHMSI Default Services, Inc. was named as the trustee on the DOT and, on July 31, 2009, Power Default became the trustee on the DOT.

Chaissions defaulted on the loan and T.D. Service Company recorded a notice of default on October 9, 2009. The notice reflects that T.D. Service Company recorded the instrument “as authorized agent for the beneficiary” and directed the borrower (Chaissions) to contact Deutsche Bank, as trustee for the Soundview Trust, care of AHMSI, if she wished to arrange payment to prevent foreclosure. T.D. Service Company recorded notices of trustee’s sale on January 11, 2010, June 20, 2011, and January 12, 2012.[2]

On May 29, 2012, AHMSI’s name was changed to Homeward Residential, Inc. On August 8, 2012, Marcia and Dennis Chaissions (collectively, Chaissionses),[3]Homeward, and Stearns entered into a short sale agreement whereby Stearns would purchase the property and Homeward would release the loan. At the time, Estrelita Lane was the Stearns trustee and she signed the agreement. The terms of the agreement required the Chaissionses to deliver free and clear title to the property before August 31, 2012. The agreement did not close because the title company advised Stearns and the Chaissionses that there were “questionable title documents” from the August 21, 2008 assignment and the subsequent substitutions of trustee, notice of default, and notices of trustee’s sales.

On October 16, 2012, Lane filed a complaint against the Chaissionses, AHMSI, Homeward, Deutsche Bank and others. In her second amended complaint, she alleged multiple causes of action stemming from the failed short sale agreement, which included challenges to the August 21, 2008 assignment. On November 20, 2014, the Chaissionses entered into an out-of-court settlement agreement with Mark Meador, who had become the successor trustee to Stearns. Under the agreement, Meador would dismiss the entire action once the Chaissionses vacated the property and transferred it to Stearns via a grant deed. On January 29, 2015, the Chaissionses signed a grant deed, which granted “any and all of their interest” in the property to Meador, as trustee for Stearns. On December 18, 2015, Meador withdrew the complaint and the action was dismissed without prejudice.

On February 12, 2015, Western Progressive was named as trustee on the DOT. On August 10, 2015, Western Progressive recorded a notice of default and election to sell under deed of trust, directing the borrower to contact Deutsche Bank, as trustee for the Soundview Trust, if the borrower wished to arrange for payment in order to avoid foreclosure. Western Progressive recorded a notice of trustee’s sale on January 19, 2016.

The Soundview Trust acquired the property at a foreclosure sale on July 6, 2016; Western Progressive recorded the trustee’s deed upon sale on July 13, 2016 at 8:00 a.m. Hacker’s grant deed was recorded shortly thereafter on July 13, 2016; the record does not indicate who requested the recording.

TRIAL COURT PROCEEDINGS

On February 19, 2016, Hacker filed a complaint against AHMSI, Sand Canyon, Homeward, Western Progressive, Deutsche Bank, Ocwen, Linda Green, Brandy Berns, and Doc X. On April 4, 2016, Hacker filed a first amended complaint (FAC), adding Larraine Brown, Vicki Pospisil, Wells Fargo Bank, Power Default, T.D. Service Company, and AHMSI Default Services as defendants. The FAC alleged causes of action for: (1) breach of written contracts; (2) breach of the covenant of good faith and fair dealing; (3) wrongful, improper and fraudulent trustee sale; (4) fraud; (5) unfair business practices; (6) cancellation of void instruments; (7) slander of title; (8) declaratory relief; and (9) specific performance of contract. The first, second, and ninth causes of action were premised on Hacker’s claim that Respondents breached the terms of the DOT and short sale agreement. The remaining causes of action challenged the August 21, 2008 assignment of the DOT and subsequent recorded instruments, which he alleged were “`void'” and a “`sham.'”

Defendants filed a demurrer on May 17, 2016 and Sand Canyon filed a demurrer on May 19, 2016. On July 12, 2016, Hacker filed an “opposition to demurrer of defendants AHMSI, Inc.,” along with a declaration in which he informs that court that Stearns acquired the property through a settlement agreement “whereby the Cha[i]ssionses assigned us their all rights [sic] they had affecting the property, including the defendants and the [p]roperty itself by way of a Grant Deed to the property signed and acknowledged on or about January 29, 2015.”[4] In the opposition, Hacker requested leave to amend the complaint in a brief paragraph that cites case law and statutory authority, but does not introduce any facts to show the trial court how he could have amended the complaint to state a valid cause of action. Hacker contemporaneously filed a request for judicial notice (RJN) of the November 20, 2014 settlement agreement, the January 29, 2015 grant deed, the trial court’s summary of the case, and the trustee’s deed upon sale.

Hacker filed his opposition to Defendants’ demurrer on July 14, 2016, which included two requests for leave to amend. The first appears in a brief paragraph wherein he alleges, “facts have developed to warrant amendment, amendment should be granted. Indeed, the very recent foreclosure has materially affected the `standing’ argument trumpeted by Defendants.” The second request appears toward the middle of the opposition and merely repeats the same brief paragraph from the July 12, 2016 opposition in which he requests leave to amend. The opposition to Homeward’s demurrer does not include any declarations and does not mention the January 29, 2015 grant deed. Hacker filed a second RJN in conjunction with the opposition to Homeward’s demurrer in which he requests judicial notice of the same documents that were the topic of his first request along with a number of court documents from federal cases around the country against Larraine Brown, AHMSI, Homeward, Sand Canyon, and Ocwen.[5] Hacker never opposed Sand Canyon’s demurrer.

On July 18, 2016, Defendants filed evidentiary objections, including an objection to the admission of Hacker’s grant deed on the grounds that it is hearsay; is irrelevant; did not meet the requirements under Evidence Code section 450 et seq.; and “constitutes a default under the provisions of the loan documents, as such transfer of interest in the loan and property requires the lender’s consent and no such consent was given.”

On July 22, 2016, Hacker filed a motion for leave to amend with a proposed second amended complaint attached. The hearing on the motion for leave to amend was scheduled for August 23, 2016.

The hearing on the demurrers took place on July 25, 2016. The trial court sustained Defendants’ evidentiary objections, granted judicial notice of the case summary and August 12, 2012 short sale agreement (incorrectly labeled “Homeward’s letter of the Trustee’s Sale”), and denied Hacker’s RJN of all remaining exhibits, including the grant deed. The trial court sustained the demurrers to all causes of action without leave to amend; Hacker subsequently took his motion for leave to amend off calendar.

Hacker now appeals, presenting two new facts in support of causes of action for wrongful foreclosure and fraud. First, the Chaissionses allegedly deeded the property to Stearns on January 29, 2015; second, the property was sold at a foreclosure auction on July 6, 2016. Hacker contends that these two facts “converted [his] case into a wrongful foreclosure claim.” Hacker also contends that he can state a cause of action for fraud, and that his causes of action for unfair business practices, cancellation of void instruments, slander of title, and declaratory relief survive because they are derived from the wrongful foreclosure claim.

DISCUSSION

I. Standard of review

We independently review the ruling on a demurrer and determine de novo whether the pleading alleges facts sufficient to state a cause of action. (McCall v. PacifiCare of Cal., Inc. (2001) 25 Cal.4th 412, 415.) We “accept the truth of material facts properly pleaded in the operative complaint, but not contentions, deductions, or conclusions of fact or law.” (Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 924.)

Where, as here, an appellant proposes facts and theories that were not heard by the trial court, we determine whether the trial court abused its discretion in denying leave to amend. (Code Civ. Proc., § 472c, subd. (a); Connerly v. State of California(2014) 229 Cal.App.4th 457, 460 (Connerly).)[6] In applying this standard, we decide whether there is a “reasonable possibility” the plaintiff can amend to state a cause of action. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “The burden of proving such reasonable possibility is squarely on the plaintiff.” (Ibid.) To satisfy that burden on appeal, a plaintiff “must show in what manner he can amend his complaint and how that amendment will change the legal effect of his pleading.” (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.)

II. The trial court properly sustained the demurrers to all causes of action

The trial court found that Hacker lacked standing to challenge the chain of assignments because: (1) the DOT required the lender’s prior written consent before the borrower could transfer her rights; (2) the short sale agreement prohibited the Chaissionses from assigning the property to another party; (3) the August 21, 2008 assignment was not void; and (4) Hacker was not the owner of the property nor the borrower of the note secured by the property. We find only the last rationale persuasive; the trial court properly found that, in his FAC, Hacker failed to allege facts establishing an ownership interest in the property sufficient to confer standing.

A. The DOT did not prohibit Hacker from claiming rights to the property

The trial court found that Hacker could not claim rights as the Chaissionses’ assignee because, under the DOT, “sale or transfer of the borrower’s rights required prior written consent to avoid acceleration of the entire debt.” This conclusion is incorrect. The DOT includes a clause that states, “[i]f all or any part of the Property or any interest in it is sold or transferred . . . without Lender’s prior written consent, Lender may, at its option, require immediate payment in full of all sums secured by this Security Instrument.” This clause imposes no sanctions upon the assignee; it merely gives the lender the option to accelerate the entire debt if the borrower transferred the property without prior written consent. Therefore, the terms of the DOT did not nullify Hacker’s interest in the property.

B. The short sale agreement did not prohibit the Chaissionses from assigning an interest in the property

The trial court also found that the short sale agreement “prohibited” assignment of the property to another party. The short sale agreement was executed on August 12, 2012 and expired on August 31, 2012 once it became evident that the owner could not deliver free and clear title. By the time the Chaissionses allegedly gave Hacker a grant deed on January 29, 2015, the short sale agreement no longer had any legal effect. Therefore, the terms of the short sale agreement were not operative in January of 2015 and have no bearing on the Chaissionses ability to assign rights to the property more than two years after the agreement had expired.

C. Hacker did not allege the DOT violated the PSA

The trial court also found that Hacker lacked standing because “to the extent that [he] contends that the [DOT] violated the operative [PSA] related to the securitization of the loan obligation, [Hacker] lacks standing because the assignment would be merely voidable.”[7]

It appears the trial court misconstrued the nature of Hacker’s challenge to the August 21, 2008 assignment. Hacker did not allege that the parties violated the terms of the PSA nor did he challenge any aspect of the securitization process whereby the original mortgage owned by Option One was transferred to the Option One Trust pursuant to the June 1, 2006 PSA. To the contrary, Hacker has consistently maintained his position that the Option One Trust maintained its ownership of the loan from that date forward.

Hacker argues the subsequent assignment of the DOT on August 21, 2008 is void, not merely voidable. Throughout the FAC and the second amended complaint, Hacker claimed that the August 21, 2008 assignment by AHMSI to the Soundview Trust, which was conducted on behalf of Option One, was void because Option One had already sold the Chaissionses’ loan to the Option One Trust. Option One could not have conveyed the Chaissionses’ loan to the Soundview Trust because it no longer had any beneficial interest in the Chaissionses’ loan to convey. This contention is not a challenge to the terms of the PSA.

D. Based on the allegations in the FAC, the trial court properly found Hacker lacked standing because he did not have a sufficient ownership interest in the property

In the FAC, Hacker referred to himself as the “owner” of the property but did not substantiate this claim by attaching the grant deed or otherwise bringing it to the court’s attention. Although he claimed ownership of the property via a grant deed in his declaration attached to the July 12, 2014 opposition and attached copies of it to two RJN’s, the trial court gave no indication that it had considered this alleged documentary support for Hacker’s ostensible ownership of the property. Instead, the trial court focused on Hacker’s failure in the FAC to establish that he was the owner of the property or the borrower of the note securing the property. In addressing Hacker’s claim that he obtained an “[a]ssignment of [r]ights” from the Chaissionses, the court observed that “`an estate in real property . . . can be transferred only by deed or by operation of law'” and “`[t]itle passes by deed and not by assignment of the deed to the assignee.'”

To the extent that the trial court confined its analysis to the allegations in the FAC, the sustention of the demurrers as to all causes of action was logical; Hacker failed there to plead an ownership interest in the property sufficient to confer standing. However, our analysis does not stop there. We must determine whether the trial court’s denial of leave to amend fell within the court’s reasonable discretion.

III. The trial court abused its discretion in denying leave to amend

The trial court found that Hacker “fail[ed] to specifically identify how amendment can cure the numerous defects discussed above. In light of the numerous defects discussed above, the Court finds that granting leave to amend would be futile.”

As noted above, in his July 12, 2016 and July 14, 2016 oppositions to the demurrers, Hacker did not indicate with any specificity how he could amend his complaint to state a cause of action other than to say that “the very recent foreclosure has materially affected the `standing’ argument trumpeted by Defendants.”[8] However, the trial court was on notice that Hacker claimed to have owned the property. He presented the trial court with evidence of his ownership by attempting to place in the record the grant deed via both of his RJN’s, and by informing the court in a declaration filed July 12, 2016 that he had received a grant deed on January 29, 2015.

We therefore find the trial court abused its discretion in denying leave to amend, as Hacker is the owner of the property and has proposed facts that, if true, are sufficient to establish that the August 21, 2008 assignment was void.

Hacker indicates that he would assert six causes of action in a second amended complaint: wrongful foreclosure, fraud, slander of title, declaratory relief, unfair business practices, and cancellation of instruments. We find that Hacker has not shown that he can amend the fraud cause of action to allege facts sufficient to state a claim, but has pleaded facts sufficient to establish causes of action for wrongful foreclosure and the remaining actions that derive therefrom.

A. Hacker has standing to bring a cause of action for wrongful foreclosure

1. Hacker has proposed facts sufficient to show that he was the owner of the property

Hacker obtained a grant deed from the Chaissionses on January 29, 2015. The grant deed conveyed “any and all of [the Chaissions’] interest” in the property to Mark Meador, as trustee for Stearns. Such pleadings would be sufficient to establish a colorable claim that Hacker was the owner of the property at the time of the foreclosure on July 6, 2016.

Defendants argue that the circumstances surrounding the grant deed are “suspicious.” In considering the merits of a demurrer, however, “the facts alleged in the pleading are deemed to be true, however improbable they may be.” (Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604; see Alcorn v. Anbro Engineering, Inc. (1970) 2 Cal.3d 493, 496.) To the extent that Defendants would challenge the validity of the grant deed, such a challenge would constitute an issue of triable fact, which is for the trier of fact to decide.[9]

2. Hacker has proposed facts sufficient, if true, to show that the August 21, 2008 assignment was void

The Soundview Trust acquired the property via a foreclosure sale on July 6, 2016. Hacker claims Soundview Trust had no power to foreclose on the property because it was never the true owner of the DOT.

As discussed above, respondents and the trial court have misconstrued Hacker’s challenge to the August 21, 2008 assignment as an allegation that the assignment violated the PSA. Were this case, the assignment would indeed be voidable under New York and California law. A number of cases have held that assignments which “allegedly breach[ ] a term or terms of a PSA” are voidable rather than void because “the beneficiaries, not the borrower, have the right to ratify the trustee’s unauthorized acts.” (Mendoza v. JPMorgan Chase Bank, N.A. (2016) 6 Cal.App.5th 802, 812-813.) In contrast, an assignment by a party that never possessed legal title to the property is void. Hacker’s allegation is unequivocally of the latter type.

In Sciarratta v. U.S. Bank National Assn. (2016) 247 Cal.App.4th 552 (Sciarratta), the plaintiff alleged that the original owner of her DOT, JPMorgan Chase, assigned the DOT to Deutsche Bank in April of 2009. (Id. at p. 557.) Chase then purported to sell the DOT to Bank of America in November 2009. (Ibid.) On the same day, Bank of America foreclosed and, as the purported “`foreclosing beneficiary,'” acquired the property via a trustee’s deed upon sale. (Id. at p. 558.) The court found the assignment to Bank of America void because it had already assigned “`all beneficial interest'” to Deutsche Bank months earlier. (Id. at p. 564.)

Hacker’s factual allegations mirror those of the plaintiff in Sciarratta. Hacker contends Option One sold all beneficial interest in the property when it sold the mortgage to the Option One Trust pursuant to the PSA on June 1, 2006. Two years later, on August 21, 2008, AHMSI, as successor in interest to Option One, executed an assignment of the DOT to Soundview Trust, with Deutsche Bank as trustee. Hacker contends this assignment was void because AHMSI had no legal authority to convey an interest in property that it had already sold to the Option One Trust.

We find that Hacker has successfully alleged facts supporting a claim that the August 21, 2008 assignment is void. As such, he has standing to pursue an action for wrongful foreclosure.[10]

B. Hacker fails to propose facts sufficient to sustain a cause of action for fraud

With respect to the fraud claim, the trial court also found that Hacker failed to allege any actual misrepresentation, failed to plead facts with the specificity required to support a fraud claim, and was barred by the three-year statute of limitations for fraud.

We agree that Hacker is time-barred from pursuing a cause of action for fraud. “An action for relief on the ground of fraud . . . is not deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud.” (Code Civ. Proc., § 338, subd. (d).) Hacker asserts that a cause of action accrues when “the damage is complete,” and urges us to find that his action for fraud accrued when the July 2016 foreclosure sale took place. He attempts to support this argument by referencing Miller v. Bechtel Corp. (1983) 33 Cal.3d 868 (Miller).

Hacker misconstrues Miller, supra, 33 Cal.3d 868, which held that an action for fraud accrues when a plaintiff becomes aware of facts that would cause a “reasonably prudent person” to suspect fraud. (Id. at pp. 875-876.) An action for fraud, therefore, does not accrue when the damage is “complete,” as Hacker argues. The action accrues when a plaintiff first learns that a fraud may have occurred, so long as he or she could have confirmed the fraud through further investigation. (Ibid.Miller is thus inapposite.

Here, the action for fraud accrued in August of 2012, when Estrelita Lane, prior trustee to Stearns, learned that there were questionable title documents related to the August 21, 2008 assignment. Hacker is therefore time-barred from bringing an action for fraud.

As we find this cause of action is time-barred by the three-year statute of limitations, we need not address the trial court’s findings that Hacker failed to allege any actual misrepresentation or to plead facts with the specificity required to support a fraud claim.

C. The remaining causes of action

Hacker alleges claims for slander of title, declaratory relief, unfair business practices, and cancellation of instruments.

The trial court sustained the demurrers to these causes of action because each of them was predicated on the challenge to the August 21, 2008 assignment. As the trial court found Hacker had no standing to challenge any of the assignments in the chain of title, it followed that Hacker could not pursue these derivative claims.

Here, we conclude that Hacker has standing to pursue his claim for wrongful foreclosure. It follows that Hacker also has standing to pursue the remaining claims that derive from his action for wrongful foreclosure. (Glaski v. Bank of America, National Association (2013) 218 Cal.App.4th 1079, 1101.)[11]

DISPOSITION

The judgment is reversed. The trial court is directed to grant Hacker leave to amend the complaint consistent with this opinion. The parties are to bear their own costs on appeal.

CHANEY, Acting P. J. and BENDIX, J., concurs.

[1] Sand Canyon filed a reply brief, and the remaining respondents filed a separate reply brief. For the purpose of brevity, we refer to the remaining respondents as Defendants.

[2] The record is silent as to the why these trustee’s sales either never took place or never resulted in a sale of the property.

[3] The record is silent as to how and when, but at some point Marcia Chaissions’s son, Dennis, acquired an interest in the property.

[4] There is no indication in the record that AHMSI filed a demurrer; in fact, as noted above, Hacker claims that AHMSI changed its name to Homeward on May 29, 2012.

[5] The RJN also includes a letter of the Trustee’s Sale from Homeward dated August 8, 2012 (listed as exhibit 11) and the July 6, 2016 trustee’s deed upon sale (listed as exhibit 12). Exhibit 11, however, is a copy of the short sale agreement and exhibit 12 was never attached.

[6] In Connerly, the plaintiff raised a new legal theory on appeal that was based on the same set of facts before the trial court. (Connerly, supra, 229 Cal.App.4th at p. 462.) Here, as discussed below, the trial court also had before it all the facts to support Hacker’s new legal theory, but did not acknowledge one of the most crucial among them: that Hacker allegedly had a grant deed to demonstrate that he owned the property at the time of the foreclosure. We therefore conclude that applying the abuse of discretion standard to the trial court’s denial of leave to amend is appropriate.

[7] Under New York law, which governs the PSA, unauthorized acts by a trustee are not void but voidable because the trust’s beneficiaries can ratify any such acts. (Rajamin v. Deutsche Bank Nat. Trust Co. (2d Cir. 2014) 757 F.3d 79, 90.) And, in California, an action for wrongful foreclosure by a borrower will not stand if the challenged assignment is merely voidable, not void. (Yvanova v. New Century Mortgage Corp., supra, 62 Cal.4th at p. 923.) As discussed below, many courts in New York and California have held that alleged violations of the terms of a PSA are merely voidable and therefore do not confer standing upon a plaintiff to pursue an action for wrongful foreclosure.

[8] Hacker raised specific, amendment-worthy facts in his motion for leave to amend filed on July 22, 2016. However, as noted above, the court never heard the motion as the hearing on the motion was calendared for August 23, 2016 and the trial court had already sustained the demurrers without leave to amend at the July 25, 2016 hearing.

[9] Defendants also contend Hacker has not shown that the Chaissionses’ note was actually conveyed to the Option One Trust. This is also an issue for the trier of fact to decide.

[10] Sand Canyon alleged in its pleadings and at oral argument that Hacker forfeited his right to allege any causes of action against Sand Canyon because he did not oppose their demurrer, request leave to amend as to them specifically, or address their arguments on appeal. Sand Canyon relies on two cases to support its position: In re S.B. (2004) 32 Cal.4th 1287, and Sciarratta. In In re S.B., the California Supreme Court noted that “the loss of the right to challenge a ruling on appeal because of the failure to object in the trial court . . . is [a] `forfeiture,’ because a person who fails to preserve a claim forfeits that claim.” (Id. at p. 1293, fn. 2.) Sciarratta observed that ordinarily, when an appellant does not assert the court erred in sustaining the demurrer to all causes of action, “any contentions regarding the correctness of the trial court’s ruling sustaining the demurrer to [the unaddressed] causes of action would be abandoned.” (Sciarratta, supra, 247 Cal.App.4th at p. 568.) Sciarratta supported this observation by quoting Ram v. OneWest Bank, FSB (2015) 234 Cal.App.4th 1, which notes that “where [a] demurrer [is] sustained without leave to amend, appellant’s failure to raise arguments in connection with one of several causes of action is deemed abandonment of that cause of action.” (Ram, at p. 9, fn. 2, quoting Bagley v. International Harvester Co. (1949) 91 Cal.App.2d 922, 926.)

These cases, however, address the failure of a plaintiff to preserve the claim itself, not the failure to preserve a claim as to a particular defendant. We find no support for the contention that a plaintiff forfeits the right to amend a complaint against a defendant who was named as a party to the original complaint but was not thereafter named specifically in the pleadings requesting leave to amend. Indeed, there is no prohibition against the court allowing a party to amend a pleading to add a new party to the action. “The court may, in furtherance of justice, and on any terms as may be proper, allow a party to amend any pleading or proceeding by adding or striking out the name of any party.” (Code Civ. Proc., § 473, subd. (a)(1).) We therefore see no reason to preclude Hacker from pursuing his claim against all the defendants named in his FAC. If, as Sand Canyon contends, Hacker cannot plead specific facts as to Sand Canyon’s involvement in the allegedly void assignment, Sand Canyon can make such an argument on remand. We make no determination as to whether the facts regarding Sand Canyon’s involvement ended before the contested conveyance occurred, as this is a factual question for the trier of fact to determine.

[11] We express no views on the factual merits of Hacker’s claims.

 

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Fannie and Freddie Foreclosures Must Meet Constitutional Due Process Standards

Fannie and Freddie Foreclosures Must Meet Constitutional Due Process Standards

NCLC Digital Library –

A federal court’s August ruling in Sisti v. Federal Housing Finance Agency, 2018 WL 3655578 (D.R.I. Aug. 2, 2018), has the potential to revolutionize Fannie Mae and Freddie Mac foreclosure procedures in the majority of states that allow nonjudicial foreclosures. By finding Fannie and Freddie to be state actors, those entities’ foreclosure practices must meet constitutional due process standards. If followed by other courts, this may radically change Fannie and Freddie foreclosure practices in nonjudicial foreclosure states.

Fannie and Freddie Are Now Under Federal Agency Conservatorship

Sisti finds Fannie Mae and Freddie Mac to be state actors because they are under conservatorship of a federal agency. In 2008, Congress authorized the federal government to take over operation of both Fannie and Freddie, known as government sponsored enterprises (GSEs). Congress created the Federal Housing Finance Agency (FHFA) to place the GSEs in receivership or conservatorship. See 12 U.S.C. § 4617(a)(2). The GSEs have remained under the FHFA’s conservatorship ever since then. Under the conservatorship FHFA controls all aspects of the GSEs’ activities. See Leon Cty. Fla v. FHFA, 700 F.3d 1273, 1279 (11th Cir. 2012).

[NCLC]

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M&T Bank v. Plaisted | Maine Supreme Judicial Court – M&T Bank failed to meet its burden of proving the amount owed by presenting evidence of information regarding the original amount of the loan, the total amount paid by the mortgagor, and other information in a form that was both accessible and admissible

M&T Bank v. Plaisted | Maine Supreme Judicial Court – M&T Bank failed to meet its burden of proving the amount owed by presenting evidence of information regarding the original amount of the loan, the total amount paid by the mortgagor, and other information in a form that was both accessible and admissible

2018-2018-me-121 by DinSFLA on Scribd

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TFH 8/19 | Foreclosure Workshop #65: Hacker v. Homeward Residential; M&T Bank v. Plaisted; and U.S. Bank Trust v. Barbier — Ten Strategies for Defeating Foreclosure by Objecting to the Admissibility of Business Records as an Exception to the Hearsay Rule

TFH 8/19 | Foreclosure Workshop #65: Hacker v. Homeward Residential; M&T Bank v. Plaisted; and U.S. Bank Trust v. Barbier — Ten Strategies for Defeating Foreclosure by Objecting to the Admissibility of Business Records as an Exception to the Hearsay Rule

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 – August 19, 2018

Foreclosure Workshop #65: Hacker v. Homeward Residential; M&T Bank v. Plaisted; and U.S. Bank Trust v. Barbier — Ten Strategies for Defeating Foreclosure by Objecting to the Admissibility of Business Records as an Exception to the Hearsay Rule

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 ———————

 

Three especially noteworthy judicial decisions occurred this week: (1) Hacker, appeal decided 8/16/18 in the California Court of Appeal, Second Appellate Division, (2) Plaistead, appeal decided 8/16/18 in the Supreme Judicial Court of Maine; and (3) Barbier, motion for summary judgment orally decided 8/15/18 in the Second Circuit Court in Hawaii on the Island of Maui.

These three decisions provide important practical examples of successful evidentiary objections that are becoming exceptionally useful for defeating foreclosures in state courts nationally, and all three will be posted, attached to the audio of this show in the past broadcast section of our website shortly after airing.

More and more, state courts are recognizing what the Supreme Judicial Court of Maine in an earlier case in 2015 found to be wide gaps in evidence regarding missing elements essential to proving the foreclosure claims of securitized trusts, observing:

‘’The financial services industry, through the practice of securitization, spawning a byzantine mass of assignments, transfers, and documentation, has made it difficult for subsequent assignees to demonstrate that they have standing to bring foreclosure claims and prove the elements necessary to prevail in a foreclosure action in a manner compliant with the laws governing foreclosure.’’

The Maine Court further explained that securitization has made it “difficult or impossible to acquire necessary records that qualify for admission under the business records exception to the hearsay rule . . . in order to prove ownership of the mortgage, proper notices of defaults, and sums due and paid,” Homeward Residential Inc. v. Gregor, 2015 ME 108, 122 A.3d 947, para. 13.

As our listeners know, pretender lenders invariably support their efforts at foreclosure by submitting in court to establish an “evidentiary foundation” for admissibility a loan servicer‘s declaration attempting to authenticate business records, which contrary to the mistaken belief of many, by themselves are not self-authenticating.

On today’s show we encourage our listeners therefore to become familiar with the following ten powerful evidentiary objections to the admissibility of business records in their foreclosure cases which we discuss on today’s show, time permitting.

Any one of these ten evidentiary objections, challenging a lack of trustworthiness, singularly can defeat motions for summary judgment as well as give homeowners a victory at trial, remembering that pretender lenders have the burden of proof regarding all but #10 below.

1. Object to the admission into evidence of business records that were not made at or near the time, or not transmitted by someone at the time with personal firsthand knowledge;

2. Object to the admission into evidence of business records not kept in the ordinary course of the business activity;

3. Object to the admission into evidence of business records not made as a regular practice of that business activity;

4. Object to the admission into evidence of business records not supported by testimony based on firsthand personal knowledge;

5. Object to the admission into evidence of business records where the chain of ownership or title is broken, thus void;

6. Object to the admission into evidence of business records not disclosed in response to prior requests for discovery;

7. Object to the admission into evidence of business records that are contradicted by other business records;

8. Object to the admission into evidence of business records containing signatures by unauthorized representatives;

9. Object to the admission into evidence of business records that are incomplete; and

10. Object to the admission into evidence of business records the product of fraud in the factum or fraud in the inducement.

Please join us this Sunday as John and I examine, time permitting, these ten powerful evidentiary objections for both defeating foreclosure summary judgments and winning foreclosure cases at trial.

Also, we regretfully announce on today’s show that we are not going forward with the concept of a Homeowners SuperPAC due to a lack of interest by our listeners, not having yet spent any of the money contributed, all held in a trust account, and will be returning the disappointing few thousand dollars volunteered by contributing listeners.

Unfortunately, homeowners unwisely yet understandably are focused only on their own foreclosure cases, not realizing that without collective organization and cooperation the pretender lenders will continue to prevail in court with false documentation except in a sprinkling of cases where individual homeowners are represented by competent counsel and have knowledgeable presiding judges or sympathetic jurors.

In place of the Homeowners SuperPAC, and so as not to abandon our overall goal, our law firm is starting a new National Foreclosure Defense Initiative.

In order to attempt to replicate in other States the same success we have had in Hawaii, where originally there was no foreclosure defense whatsoever, our law firm is starting a “legal audit” service nationally outside of Hawaii to supplement what are presently known as more limited “forensic audits” written generally by nonlawyers, heretofore the only available technical help to many homeowners facing foreclosure.

Our “legal audits” will apply the same wide-ranging type of legal analysis we have been sharing and will continue to share with listeners on this show, targeted however at ongoing individual cases, and will be much more useful in court than present forensic audits which are generally inadmissible in court proceedings except in very limited circumstances.

However, due to the present but criticized prohibitions against multi-jurisdictional practice of law without a law license in each State, notwithstanding the First Amendment protection afforded freedom of speech, this new “legal audit” service will be offered on a limited basis as follows, given that I am licensed only in Hawaii and California:

In jurisdictions in which I am not licensed, I can only provide in-State licensed attorneys with legal audits as a consultant or expert. I cannot give legal advice in any form to pro se parties.

I am not permitted to give legal advice directly to individuals in jurisdictions in which I am not licensed. However, in exceptional cases, I could be available to formally appear as co-counsel pro hac vice.

In California where I am licensed but as a practical matter no longer maintain a law office there, I can provide legal audits directly to individuals as well as serve in a broader role as co-counsel with a California attorney with boots on the ground.

An announcement of this new nationwide service will shortly appear on our website, www.foreclosurehour.net.

And meanwhile, your comments and suggestions at info@foreclosurehour.com will be very much appreciated.

Gary Dubin

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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

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Submit questions to info@foreclosurehour.com

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

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COMPLAINT | NM AG Balderas Brings Lawsuit against Wells Fargo for Opening Thousands of Fake Accounts

COMPLAINT | NM AG Balderas Brings Lawsuit against Wells Fargo for Opening Thousands of Fake Accounts

FOR IMMEDIATE RELEASE Contact: David Carl
August 16, 2018 (505) 288-2465

AG Balderas Brings Lawsuit against Wells Fargo for
Opening Thousands of Fake Accounts

Albuquerque, NM – Today, Attorney General Hector Balderas announced that the Office of the
Attorney General’s Consumer and Environmental Protection Division filed a lawsuit against
Wells Fargo Bank, N.A. for illegal business practices in opening unauthorized accounts in the
name of thousands of New Mexicans.

“As the fiscal agent for the State, and a provider of banking services to thousands of New
Mexicans, Wells Fargo has failed to resolve their violations of law,” said Attorney General
Hector Balderas. “Its deeply troubling that a company with this much at stake in our state would
mislead New Mexico consumers and allow unlawful profiteering. We look forward to seeking
justice in a court of law.”

The complaint alleges that Wells Fargo violated the New Mexico Unfair Trade Practices Act by
opening accounts without authorization of the consumer, enrolling consumers in unauthorized
products and lying to consumers about the true status of their relationship with Wells Fargo. By
the company’s own public statements, it is estimated that more than 20,000 New Mexico
accounts may have been opened without authorization.

The Attorney General is bringing this action on behalf of New Mexican taxpayers and will direct
funds recovered to increasing financial literacy for students and at-risk families in New Mexico.
If you had an unauthorized account opened by Wells Fargo, the Attorney General urges you to
report it. File a complaint online at https://www.nmag.gov/file-a-complaint.aspx or call the
Office of the Attorney General at 1-844-255-9210.

A copy of the complaint is attached.

AG Balderas Brings Lawsuit Against Wells Fargo for Opening Thousands of Fake Accounts by DinSFLA on Scribd

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New Mexico sues Wells Fargo over unauthorized accounts

New Mexico sues Wells Fargo over unauthorized accounts

WHIG-

New Mexico is suing Wells Fargo over a scandal in which the financial institution was accused of opening millions of unauthorized bank and credit card accounts across the nation to meet unrealistic sales quotas, state Attorney General Hector Balderas announced Thursday.

Balderas’ office filed a lawsuit in district court alleging that Wells Fargo violated state laws, following major fines and penalties already levied by federal regulators because of the scandal, which severely damaged Wells Fargo’s reputation.

Balderas claimed Wells Fargo opened more than 20,000 fake accounts in the name of New Mexico residents and that that the bank enrolled consumers in unauthorized products and lied to them about their status.

[WHIG]

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Posted in STOP FORECLOSURE FRAUD0 Comments

Deutsche Bank Inks $21.9M Deal to End 401(k) Fee Class Action (1)

Deutsche Bank Inks $21.9M Deal to End 401(k) Fee Class Action (1)

Bloomberg-

Deutsche Bank Americas Holding Corp. agreed to pay $21.9 million to settle claims that it mismanaged its employees’ retirement savings by offering proprietary, expensive, and underperforming investment options in its 401(k) plan.

The proposed settlement, if approved, would be the largest reached by a financial company facing similar claims.

More than two dozen financial companies have been sued in the past several years by workers accusing them of adding affiliated, high-fee, poorly performing funds in the 401(k) plans at their expense. Deutsche is the sixth company to settle similar claims, following American Airlines Group Inc. ($22 million)Allianz SE ($12 million)TIAA ($5 million)New York Life Insurance Co. ($3 million), and Principal Life Insurance Co. ($3 million). So far, Wells Fargo andCapital Group have been the only companies that have defeated these lawsuits.

[BLOOMBERG]

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