Obviously a NEW Chris Whalen.

Take a look at the old Chris below:

“Years before they can get clear title and actually sell em”

“You guys in the MEDIA have a real tough time…your looking for events, your trying to cover the news minute by minute…”

“THIS IS CANCER”

“There are a lot of investors out there who don’t know what they own… they may own unsecured loans….. trustees that were supposed to do things under state law (and didn’t)… even Fannie and Freddie have issues with this.”

“This is not minutia…this is the Letter of the Law”

“Most securities issues in the United States are governed by New York law”

“Dealer has to deliver to the trustee the notes, that evidence the obligation”

“Trustees have the least duties”

“You have to indemnify them”

image: Business Insider

So it’s ok for banks to have their say but not the homeowner? Eliminate due process and simply throw them out?

Disgraceful! It’s always about the money.

..

.

It’s beginning to sound a lot like Lehman! Massive layoffs probably coming soon…

BUSINESS INSIDER-

Bank of America has over $100 billion in mortgage liabilities, says Chris Whalen Co-founder of Institutional Risk Analytics.

On a web broadcast published on KingWorldNews, he advocates “the classical American way of dealing with this problem”– complete and total restructuring through Chapter 11. Before its too late.

He says, “The only sane way of fixing this and I mean fix it so that Bank of America comes out of the process restructured, ready to support growth, support leverage, is a classic chapter 11…”

His point: Countrywide’s bond trusts are worthless, were never properly constructed, and don’t protect investors at all. Bank of America is on the hook for all of that, and while its subsidiaries are well capitalized, the parent company is bust. The only thing to do to fix this problem is to unmake $100s of billions worth of bond contracts.

“If you don’t have the note today, you don’t have no game.”

REUTERS-

News reports suggest that New York prosecutors are preparing fraud charges against a number of large investment banks for defrauding insurance companies with respect to mortgage loans. These allegations and many civil claims with precisely similar predicates illustrate one of the most important aspects of the subprime financial crisis, namely the construction and collapse of the non-bank financial sector.

[…]

But now we know that this was all nonsense. The creation of the ersatz housing title registry, Mortgage Electronic Registration Systems (MERS), by the banking and mortgage servicing industry was effectively an end-run around the clear legal standard set by Brandeis. In litigation and foreclosures, these make-believe standards for securitizing home loans are turning into dust in the hands of the banks and investors. Lenders who relied upon MERS to document their secured interest in a mortgage are increasingly at risk when the title is contested.

The Fed told us explicitly – many times – that it was taking “good collateral” to back up these loans and that it was quite confident it would not lose any money.

That, it turns out, was true.

What we were not told is that the “collateral” they took was so bad that it was in some cases valued at TEN CENTS on the dollar or less, and in each of these cases it leaves open the question as to where is that collateral now, having been returned to the bank, what is it actually worth, and how is it being carried on the books – because what we do know from the bank’s financial reporting is that it most-certainly was NOT written off.

There’s more than enough here in these tables to call for a massive forensic investigation into the accounting practices of each and every one of these institutions as the fact that FRBNY valued this “collateral” at such a tiny fraction of it’s claimed value by the submitting institution leads to an immediate question as to how one squares that valuation with the values reported by the banks in their quarterly and annual reports, and whether they were at the time, or are today, in point of fact, at anything approaching actual valuations, insolvent.

We the people deserve both answers AND HONEST ACCOUNTING.

-Karl Denninger

Re: National Standards for Loan Servicing

Dear Colleagues:

We the undersigned write to you regarding the urgent need to develop national standards for originating, selling and servicing mortgage loans. The private residential mortgage securitization market is frozen as to new issuance. The housing market is suffering from a dearth of credit, which is causing a serious lack of confidence among potential homebuyers.

Widely reported servicer fraud, whether in the foreclosure process or in the systematic assessment of illegal fees against homeowners, is also a serious problem. It’s bad for investors, it’s bad for homeowners, and it’s ultimately bad for a sustainable residential mortgage securitization market and the U.S economy. Fraud is also a symptom of the disease affecting our broader financial system, namely the lack of accountability in the loan servicing industry and the resulting impairment of the value of securities sold to investors.

Continue reading below…

[ipaper docId=45843142 access_key=key-13a7wirolxaos2h33dmq height=600 width=600 /]

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF WESTCHESTER

———————————————-
Wells Fargo Bank. N.A.,
Plaintiff.

-against-

John C. Belknap alk/a John Belkna; M. Alison Belknap
a/k/a M. Belknap; et aI.,
Defendants.

<snip>

Plaintiffs Standing to Bring This Action

Where, as here, standing is put into issue by defendants, plaintiff must prove its standing
in order to be entitled to relief (U.S. Bank. N.A. v Adrian Collymore, 68 AD3d 752 [2d Dept
2009)). In a mortgage foreclosure action, “a plaintiff has standing where it is both the holder or
assignee of the subject mortgage and the holder or assignee of the underlying note at the time the
action is commenced” (Bank of New York v Silverberg, 86 AD3d 274, 279 [2d Dept 2011]).
Once a promissory note is tendered to and accepted by an assignee, the mortgage passes as an
incident to the note (Mortgage Elec. Registration Sys” Inc. v. Coakley, 41 A.D.3d 674, Bank of
New York v Silverberg, 86 AD3d 274, 280 [2d Dept 201 1)). By contrast, “a transfer of the
mortgage without the debt is a nullity, and no interest is acquired by it. A mortgage is merely
security for a debt or other obligation and cannot exist independently of the debt or obligation.
Consequently, the foreclosure of a mortgage cannot be pursued by one who has not demonstrated
“right to the debt” (Bank of New York v Silverberg, 86 AD3d 274, 280 [2d Dept 2011]).
Moreover, an assignment of a note and mortgage need not be in writing and can be effectuated by
physical delivery (LaSalle Bank Natl. Assn. v. Ahearn, 59 A.D.3d 911, 912, [3d Dept 2009]).
Plaintiff establishes its lawful status as assignee, either by written assignment or physical
delivery, prior to the filing of the complaint (Aurora Loan Services, LLC v Weisblum, 85 AD3d
95 [2d Dept 20 ID. Written assignment of the underlying note or physical delivery of the note
prior to the commencement of the action is sufficient to transfer the obligation (HSBC Bank
USA, Nat. Ass’n v Gilbert, 120 AD3d 756, 757 [2d Dept 2014]), An assignment ofa mortgage
without assignment of the underlying note or bond is a nullity. and no interest is acquired by it
(HSBC Bank USA v, Hernandez, 92 A,D,3d 843 [2d Dept 2012]), Further. the affidavit from the
plaintiff or its servicing agent must include specific factual details of a physical delivery of the
note to establish that the plaintiff had physical possession of the note prior to commencing an
action (HSBC Bank USA v. Hernandez. 92 AD3d 843. 844. (2d Dept 2012]).

If the plaintiff asserts standing based upon a written assignment executed after the
commencement of the action. the plaintiff must also prove physical delivery of the note before
commencement (Wells Fargo Bank. N.A. v. Marchione. 69 AD3d 204, 210. [2d Dept. 2009)).
Indeed, where the plaintiff “establish[ esJ its standing as the holder of the note and mortgage by
physical delivery prior to commencement of the action,” it is unnecessary to “address the validity
of [a] subsequently executed document assigning the mortgage and note” (Deutsche Bank Natl.
Trust Co. v Whalen. 107 AD3d 931,932 [2d Dept 2013]).

In considering standing, a court must consider the negotiability of the promissory note.
Pursuant to ucc ~ 3-202, negotiation is defined as the transfer of an instrument in such form
that the transferee becomes a holder. ucc ~ 3-204 provides that a special indorsement specifies
the person to whom or to whose order the instrument is payable (Ucc ~ 3-204[1]). Pursuant to
ucc ~3-204(2): “An indorsement in blank specifies no particular indorsee and may consist of a
mere signature. An instrument payable to order and indorsed in blank becomes payable to bearer
and may be negotiated by delivery alone until specially indorsed.” The indorsement must be
made either on the face of the note or on an allonge so firmly affixed to the note as to become a
part thereofUeC Section 3-202(20).

[…]

Decided and Entered: November 19, 2015

519429

Calendar Date: September 10, 2015
Before: Lahtinen, J.P., Garry, Lynch and Devine, JJ.; Egan Jr., J., vouched in.

Barbara A. Hill and Robert W. Hill, Coral Gables, Florida, appellants pro se.

Buckley Madole, PC, Rochester (Michael T. Ansaldi of counsel), for respondent.

Lynch, J.

MEMORANDUM AND ORDER

Appeal from an order of the Supreme Court (LaBuda, J.), entered April 14, 2014 in Sullivan County, which, among other things, granted plaintiff’s motion for summary judgment.

In October 2004, defendants Barbara A. Hill and Robert W. Hill (hereinafter collectively referred to as defendants) executed a note in favor of BNY Mortgage Company, LLC to borrow the sum of $132,664 to purchase property located in the Village of Monticello, Sullivan County. The debt was secured by a mortgage on the property. When defendants stopped making monthly

payments, plaintiff commenced this action in February 2013 to foreclose on the mortgage. Supreme Court scheduled a settlement conference (see CPLR 3408; 22 NYCRR 202.12-a), but defendants did not appear. Thereafter, with the court’s permission, plaintiff moved for summary judgment and defendants cross-moved for, among other things, an order directing plaintiff to produce the “wet-ink” note. The court granted plaintiff’s motion, denied defendants’ cross motion and defendants now appeal.

In a foreclosure action, a plaintiff seeking summary judgment “must produce evidence of the mortage and unpaid note along with proof of the mortgagor’s default” (Wells Fargo Bank, NA v Ostiguy, 127 AD3d 1375, 1376 [2015]; see HSBC Bank USA, N.A. v Sage, 112 AD3d 1126, 1127 [2013], lvs dismissed 22 NY3d 1172 [2014], 23 NY3d 1015 [2014]). Plaintiff supported its motion with the required documentation, but because the self-represented [*2]defendants raised the issue of standing in their answer, plaintiff was also obligated to demonstrate that it was a holder or assignee of the note and subject mortgage at the time the action was commenced (see Wells Fargo Bank, NA v Ostiguy, 127 AD3d at 1376; Chase Home Fin., LLC v Miciotta, 101 AD3d 1307, 1307 [2012]). It is the note, not the mortgage, that is the dispositive instrument that conveys standing to foreclose under New York law (see Aurora Loan Servs., LLC v Taylor, 25 NY3d 355, 361 [2015]).

Here, plaintiff maintains that it has standing because it obtained physical possession of the note prior to commencement of the action. “Since the note has only an undated indorsement in blank from the original lender, it does not evidence plaintiff’s possessory interest” (Deutsche Bank Natl. Trust Co. v Monica, 131 AD3d 737, 738-739 [2015] [citation omitted]; see Bank of Am., N.A. v Kyle, 129 AD3d 1168, 1169 [2015]), nor, for that matter, does the June 2012 assignment of the mortgage from the Mortgage Electronic Registration Systems, Inc. confer standing (see id.). To establish physical possession, plaintiff produced an affidavit by an assistant secretary, who stated that plaintiff’s “custodial system of record” showed that plaintiff “received the original [n]ote on February 16, 2007” and that plaintiff maintained “possession of the [n]ote at its storage facility” in Monroe, Louisiana. Noticeably absent is any representation by the assistant secretary that she examined the original note and, contrary to the dissent, the affidavit is devoid of any detail as to how plaintiff actually acquired possession of the original note (compare Aurora Loan Servs., LLC v Taylor, 25 NY3d at 362; Deutsche Bank Natl. Trust Co. v Monica, 131 AD2d at 739). Moreover, the dissent’s reliance on HSBC Bank USA, N.A. v Sage (supra) is misplaced, for the question here is not, as it was in that case, whether plaintiff’s representative had personal knowledge as to the creation of the original loan documents, but whether any direct evidence was presented detailing how plaintiff came into actual possession of the original note. The plaintiff in HSBC Bank USA had already established that the custodian of the trust had actual possession of the note for over two years prior to commencement of the action (id. at 1127-1128). Even accepting that plaintiff met its burden of proving physical possession of the note through the assistant secretary’s review of plaintiff’s custodial records, in opposition, defendants cross-moved for an order directing plaintiff to produce the original or “wet-ink” note, as described by defendants. Defendants made the same demand in their answer.

In Aurora Loan Servs., LLC v Taylor (25 NY3d at 361-362), the Court of Appeals recently addressed the degree of proof necessary to show possession of a note for purposes of standing. In that case, the plaintiff’s representative averred, upon review of its business records and after examining the original note, that it had custody of the note prior to the commencement of the action. The defendants countered that more detail was required as to how the plaintiff acquired the note. While observing that “the better practice would have been for [the plaintiff] to state how it came into possession of the note,” the Court determined that the trial court did not err in granting summary judgment to the plaintiff without requiring production of the original note, emphasizing that no such demand had been made (id. at 362). Not to be overlooked is the fact that the allonge indorsing the note to the plaintiff in Aurora showed a specific chain of ownership to the plaintiff (id. at 359). Here, by comparison, the original note includes only a blank indorsement, the affidavit of the assistant secretary is based on a review of system records without an examination of the original note and defendants demanded production of the original note from the outset. Defendants also represent that a prior foreclosure action was commenced by defendant Bank of New York in 2008 — a year after plaintiff ostensibly obtained possession of the original note — and discontinued in 2010, without prejudice. Given this context, and without any verification as to how plaintiff came into possession of the note, we conclude that Supreme Court should have first compelled it to produce the original note prior to resolving plaintiff’s motion for summary judgment. This is particularly so given the responding affidavit of plaintiff’s representative that it was “ready, wiling (sic) and able to produce the original ‘wet-ink’ note for [*3]inspection” — a representation repeated in plaintiff’s brief on appeal.

Garry and Egan Jr., JJ., concur.
Devine, J. (dissenting).

Our colleagues find that questions of fact exist as to whether plaintiff actually possesses the note; we do not, and, therefore, respectfully dissent.

Plaintiff undoubtedly “produce[d] evidence of the mortgage and unpaid note along with proof of the mortgagor’s default” (Wells Fargo Bank, NA v Ostiguy, 127 AD3d 1375, 1376 [2015]; see HSBC Bank USA, N.A. v Sage, 112 AD3d 1126, 1127 [2013], lvs dismissed 22 NY3d 1172 [2014], 23 NY3d 1015 [2014]). Because defendants Barbara A. Hill and Robert W. Hill (hereinafter collectively referred to as defendants) raised standing as an affirmative defense, plaintiff was further required to show that it was “both the holder or assignee of the subject mortgage and the holder or assignee of the underlying note at the time the action [was] commenced” (Chase Home Fin., LLC v Miciotta, 101 AD3d 1307, 1307 [2012]; see Wells Fargo Bank, NA v Ostiguy, 127 AD3d at 1376). Plaintiff submitted a copy of the mortgage that was assigned to it and a copy of the promissory note indorsed in blank, but a blank indorsement “does not evidence plaintiff’s possessory interest” in the note and requires proof of actual possession (Deutsche Bank Natl. Trust Co. v Monica, 131 AD3d 737, 738-739 [2015]; see UCC 3-204 [2]; Bank of Am., N.A. v Kyle, 129 AD3d 1168, 1169 [2015]).

In that regard, plaintiff provided an affidavit by an assistant secretary, who averred that she reviewed plaintiff’s business records regarding the loan in question, that she was personally familiar with the maintenance of those records and that they had been created and kept in the regular course of business. Her affidavit “was adequately based on a review of the books and records of the company maintained in the ordinary course of business” under these circumstances and, contrary to the assertion of my colleagues, her “lack of personal knowledge as to the creation of the documents is not fatal” (HSBC Bank USA, N.A. v Sage, 112 AD3d at 1127; see CPLR 4518; compare Deutsche Bank Natl. Trust Co. v Monica, 131 AD3d at 739 [records made by another entity]). The majority complains that this affidavit was deficient in failing to “detail . . . how plaintiff actually acquired possession of the original note,” but that issue is irrelevant, as “[a]n instrument payable to order and indorsed in blank becomes payable to bearer and may be negotiated by delivery alone until specially indorsed” (UCC 3-204 [2]). Possession, regardless of how that possession came about, is all that is required to make plaintiff a bearer and holder of a note indorsed in blank (see UCC 1-201 [b] [5], [21]; UCC 3-204 [2]; Getty Petroleum Corp. v American Express Travel Related Servs. Co., 90 NY2d 322, 328 [1997]; Bank of Am., N.A. v Kyle, 129 AD3d at 1169; Wells Fargo Bank, NA v Ostiguy, 127 AD3d at 1376).

The records detailed as to how the original note came into plaintiff’s possession, and the assistant secretary averred with no hesitation that plaintiff “received the original [n]ote on” February 16, 2007 and “maintain[ed] possession of the [n]ote” at its storage facility in Louisiana. While we agree that “the better practice would have been for [plaintiff] to state how it came into possession of the note in its affidavit in order to clarify the situation completely” (Aurora Loan Servs., LLC v Taylor, 25 NY3d 355, 362 [2015]), plaintiff nevertheless met its initial burden by providing admissible proof showing that “physical delivery of the note was made to . . . [it upon an] exact delivery date” that predated the commencement of this action (Aurora Loan Servs., LLC v Taylor, 114 AD3d 627, 629 [2014], affd 25 NY3d 355 [2015]; see Deutsche Bank Natl. Trust Co. v Monica, 131 AD3d at 738; Deutsche Bank Natl. Trust Co. v Whalen, 107 AD3d 931, 932 [2013]).

The burden accordingly shifted to defendants “to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action,” and they failed to do so (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]). Defendants primarily argued that the note was “altered, edited, [and] redacted,” and cross-moved for production of the original note. They made no specific allegations as to how the note had been altered, however, and no obvious changes or material redactions appear in the copy of the note provided. Their conclusory claims therefore constitute the type of “unsubstantiated allegations or assertions” that do not raise a question of fact (Zuckerman v City of New York, 49 NY2d 557, 562 [1980]; see Amatulli v Delhi Constr. Corp., 77 NY2d 525, 533 [1991]). Inasmuch as defendants failed to submit any evidence to warrant “the requisite showing that [further] discovery would yield material and relevant evidence sufficient to defeat the motion” for summary judgment, production of the original note at this late date is not appropriate (Seton Health at Schuyler Ridge Residential Health Care v Dziuba, 127 AD3d 1297, 1300 [2015]; see CPLR 3212 [f]; Banque Nationale de Paris v 1567 Broadway Ownership Assoc., 214 AD2d 359, 361 [1995]; see also Aurora Loan Servs., LLC v Taylor, 25 NY3d at 362).

We perceive nothing in the other arguments advanced by defendants that would warrant a denial of summary judgment. Defendants suggested that something nefarious was afoot because plaintiff came into possession of the note in 2007, but was not assigned the mortgage until 2012. This assertion ignores the role of Mortgage Electronic Registration Systems, Inc., which previously held the mortgage (see Matter of MERSCORP, Inc. v Romaine, 8 NY3d 90, 96 [2006]), and also overlooks “that the note, and not the mortgage, is the dispositive instrument that conveys standing to foreclose under New York law” (Aurora Loan Servs., LLC v Taylor, 25 NY3d at 361). Moreover, while a mortgage foreclosure action had previously been commenced by defendant Bank of New York, that action was discontinued, and defendants provided nothing to suggest that the prior action in any way impaired plaintiff’s rights (see e.g. Credit-Based Asset Servicing & Securitization v Grimmer, 299 AD2d 887, 888 [2002]). The Bank of New York was served with the summons and complaint in this action given its status as a lienholder, and its failure to appear and assert any interest does not speak well of the insinuation by defendants that it has any rights to the note and mortgage at issue. Over five years have passed since the default in payment and, in the absence of any material issues of fact that would defeat an award of summary judgment, we perceive nothing to justify a further delay in the resolution of this matter.

Lahtinen, J.P., concurs.

ORDERED that the order is modified, on the law, with costs to defendants, by reversing so much thereof as granted plaintiff’s motion; said motion denied; and, as so modified, affirmed.

H/T Gary Dubin & Leagle

IN RE MORTGAGE ELECTRONIC REGISTRATION SYSTEMS (MERS) LITIGATION Case No. MD 09-02119-PHX-JAT, No. CV 10-01547-PHX-JAT.

IN RE MORTGAGE ELECTRONIC REGISTRATION SYSTEMS (MERS) LITIGATION THIS DOCUMENT RELATES TO: Stejic v. Aurora Loan Services, LLC, et al. CV 10-01547-PHX-JAT.
United States District Court, D. Arizona.
May 28, 2015.

Doug Moreau, Plaintiff, represented by Robert R Hager, Hager & Hearne & Treva J Hearne, Hager & Hearne.
Eric Mesi, Plaintiff, represented by Robert R Hager, Hager & Hearne.
Fred Mesi, Plaintiff, represented by Robert R Hager, Hager & Hearne.
Richard F Lee, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC & Robert R Hager, Hager & Hearne.
Aunetta M Roach, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC & Robert R Hager, Hager & Hearne.
Sabrina M Caffee, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC, Robert R Hager, Hager & Hearne & Treva J Hearne, Hager & Hearne.
Jonathon E Sieben, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC4>, Robert R Hager, Hager & Hearne & Treva J Hearne, Hager & Hearne.
Tammy Vo, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC & Robert R Hager, Hager & Hearne.
Stuart M Ellifritz, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC & Robert R Hager, Hager & Hearne.
David R McConathy, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC & Robert R Hager, Hager & Hearne.
William C Barlow, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC & Robert R Hager, Hager & Hearne.
Christina Sage, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC.
Clyde Kelley, Plaintiff, represented by Robert R Hager, Hager & Hearne & Treva J Hearne, Hager & Hearne.
Ronald E Freeto, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC, Robert R Hager, Hager & Hearne & Treva J Hearne, Hager & Hearne.
Robert L Fitzgerald, Plaintiff, represented by Robert R Hager, Hager & Hearne & Treva J Hearne, Hager & Hearne.
Merrily Whalen, Plaintiff, represented by Jeffrey D Conway, Rosenfeld Roberson & Rinato.
Michael Greene, Plaintiff, represented by Jeffrey D Conway, Rosenfeld Roberson & Rinato.
Michael Greene, Plaintiff, represented by Jeffrey D Conway, Rosenfeld Roberson & Rinato.
Andrea G Saniel, Plaintiff, represented by Jeffrey D Conway, Rosenfeld Roberson & Rinato.
Connie Kwok, Plaintiff, represented by Jeffrey D Conway, Rosenfeld Roberson & Rinato.
Amira Berilo, Plaintiff, represented by Jacob L Hafter, Law Offices of Jacob Hafter & Associates.
Edward T Fitzwater, Plaintiff, represented by Jacob L Hafter, Law Offices of Jacob Hafter & Associates.
Michael H Evans, Plaintiff, represented by Jacob L Hafter, Law Offices of Jacob Hafter & Associates.
Alan Kartman, Plaintiff, represented by Jacob L Hafter, Law Offices of Jacob Hafter & Associates.
Russell D Bricker, Plaintiff, represented by Jacob L Hafter, Law Offices of Jacob Hafter & Associates.
Philip Golding, Plaintiff, represented by Jacob L Hafter, Law Offices of Jacob Hafter & Associates.
Mark Mausert, Plaintiff, represented by Robert R Hager, Hager & Hearne & Treva J Hearne, Hager & Hearne.
Veronika Lucie Zdenkova, Plaintiff, represented by Robert R Hager, Hager & Hearne & Treva J Hearne, Hager & Hearne.
Kylee Riehm, Plaintiff, represented by Robert R Hager, Hager & Hearne & Treva J Hearne, Hager & Hearne.
Rowan Riehm, Plaintiff, represented by Robert R Hager, Hager & Hearne & Treva J Hearne, Hager & Hearne.
Cynthia F Roberts, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC & Robert R Hager, Hager & Hearne.
Bryan Mikulaco, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC.
Melva D Tyler, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC.
Steven M Tyler, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC.
Rafael Gutierrez, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC.
Jason A Gothan, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC.
Rosalynn R Gothan, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC.
Tonya M Foster, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC.
Christopher J Sieben, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC.
Robert J Funk, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC.
Duane J Sanchez, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC.
Robert C Kelley, Plaintiff, represented by Robert R Hager, Hager & Hearne & Treva J Hearne, Hager & Hearne.
Sally Kelley, Plaintiff, represented by Robert R Hager, Hager & Hearne & Treva J Hearne, Hager & Hearne.
Kurt B Ludlow, Plaintiff, represented by Jeffrey D Conway, Rosenfeld Roberson & Rinato.
Charlie G Habon, Plaintiff, represented by Robert R Hager, Hager & Hearne & Treva J Hearne, Hager & Hearne.
Martha Lopez, Plaintiff, represented by Robert R Hager, Hager & Hearne & Treva J Hearne, Hager & Hearne.
Jonathan Pierce, Plaintiff, represented by Robert R Hager, Hager & Hearne & Treva J Hearne, Hager & Hearne.
Jose Portillo, Plaintiff, represented by Robert R Hager, Hager & Hearne & Treva J Hearne, Hager & Hearne.
David Stinnett, Plaintiff, represented by Robert R Hager, Hager & Hearne & Treva J Hearne, Hager & Hearne.
Tina Stinnett, Plaintiff, represented by Robert R Hager, Hager & Hearne & Treva J Hearne, Hager & Hearne.
Robert C Sedlmayr, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC.
Jose Camacho-Villa, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC.
Michelle Camacho-Villa, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC.
Merly CS Riger, Plaintiff, represented by Robert R Hager, Hager & Hearne, Treva J Hearne, Hager & Hearne & William Albert Nebeker, Koeller Nebeker Carlson & Haluck LLP.
David J Freeman, Plaintiff, represented by Glenn Walters, Sr., Glenn Walters Attorney at Law PA.
Henry B Youmans, Jr., Plaintiff, represented by Glenn Walters, Sr., Glenn Walters Attorney at Law PA.
Eric A Gothan, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC.
Terreia L Gothan, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC.
Herous Yeghiyaian, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC.
Nelson Sandefur, Jr., Plaintiff, represented by Robert R Hager, Hager & Hearne.
Nelson Sandefur, Jr., Plaintiff, represented by Treva J Hearne, Hager & Hearne.
Denise Spracklin, Plaintiff, represented by Robert R Hager, Hager & Hearne & Treva J Hearne, Hager & Hearne.
J E Scott Spracklin, Plaintiff, represented by Robert R Hager, Hager & Hearne & Treva J Hearne, Hager & Hearne.
Steven Meyer, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC.
Michael D Van Blaircom, Plaintiff, represented by Robert R Hager, Hager & Hearne.
Milan Stejic, Plaintiff, represented by Beth Findsen, Law Office of Beth K Findsen PLLC.
Laurie S Bilyea, Plaintiff, represented by William Albert Nebeker, Koeller Nebeker Carlson & Haluck LLP & Donald O Loeb, Donald O Loeb PLC.
Thomas W Bilyea, Plaintiff, represented by William Albert Nebeker, Koeller Nebeker Carlson & Haluck LLP & Donald O Loeb, Donald O Loeb PLC.
Raymond G Harnist, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC.
Maria Vega, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC.
Abdolhamid Ahmadi, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC.
Dustin Rollins, Plaintiff, represented by John R Ates, Ates Law Firm PC & David C Ates, David Ates PC.
Juanita Faye Pualani Lee, Plaintiff, represented by Frederick J Arensmeyer, Dubin Law Offices & Gary Victor Dubin, Dubin Law Offices.
Lady Jennifer Barone, Plaintiff, represented by Valerie Robinson Edwards, Koeller Nebeker Carlson & Haluck LLP & William Albert Nebeker, Koeller Nebeker Carlson & Haluck LLP.
Alan E Grundel, Plaintiff, represented by Rick Lawton, Law Office of Rick Lawton Esq PC.
Gwendell L Philpot, Plaintiff, represented by Joe Ramon Whatley, Jr, Whatley Drake & Kallas LLC & Nicholas B Roth, Eyster Key Tubb Roth Middleton & Adams LLP.
Annette Green Philpot, Plaintiff, represented by Joe Ramon Whatley, Jr, Whatley Drake & Kallas LLC & Nicholas B Roth, Eyster Key Tubb Roth Middleton & Adams LLP.
Phil Rutherford, Plaintiff, represented by Tory M Pankopf.
Pamela Penny-Rutherford, Plaintiff, represented by Tory M Pankopf.
GE Money Bank, Defendant, represented by Andrew R Louis, Buckley Sandler LLP, Cynthia Alexander, Snell & Wilmer LLP, Keith Beauchamp, Coppersmith Brockelman PLC, Matthew P Previn, Buckley Sandler LLP, Richard J Sahatjian, Buckley Sandler LLP & Roopali H Desai, Coppersmith Brockelman PLC.
WMC Mortgage Corporation, Defendant, represented by Maureen Beyers, Osborn Maledon PA & William J Maledon, Osborn Maledon PA.
Wells Fargo Bank NA, Defendant, represented by Barbara J Dawson, Snell & Wilmer LLP, AZ, Cynthia Alexander, Snell & Wilmer LLP, Erica Julie Stutman, Snell & Wilmer LLP, AZ, Gregory James Marshall, Snell & Wilmer LLP, AZ, John Michael DeStefano, III, Snell & Wilmer LLP, AZ, Joseph F Yenouskas, Goodwin Procter LLP, Patrick Gerard Byrne, Snell & Wilmer LLP, Robert J Gibson, Snell & Wilmer LLP, Thomas M Hefferon, Goodwin Procter LLP & U Gwyn Williams, Goodwin Procter LLP.
America’s Servicing Company, Defendant, represented by Cynthia Alexander, Snell & Wilmer LLP, Erica Julie Stutman, Snell & Wilmer LLP, AZ, Gary E Schnitzer, Kravitz Schnitzer Sloane & Johnson Chartered, Gregory James Marshall, Snell & Wilmer LLP, AZ, Joseph F Yenouskas, Goodwin Procter LLP, Thomas M Hefferon, Goodwin Procter LLP & U Gwyn Williams, Goodwin Procter LLP.
MERSCORP Incorporated, Defendant, represented by Robert W Shely, Bryan Cave LLP, Shayna Fernandez Watts, Bryan Cave LLP, Colt B Dodrill, Wolfe & Wyman LLP, Cynthia Alexander, Snell & Wilmer LLP, Elliot S Blut, Ecoff Blut & Salomons, Erica Julie Stutman, Snell & Wilmer LLP, AZ, Gregory James Marshall, Snell & Wilmer LLP, AZ, J Matthew Goodin, Locke Lord Bissell & Lidell LLP, J Christopher Jorgensen, Lewis Roca Rothgerber LLP, James R Condo, Snell & Wilmer LLP, AZ, Jennifer Ann Reiter, Maynard Cronin Erickson Curran & Reiter PLC, Laurel Inman Handley, Aldridge Pite LLP, Melanie D Morgan, Kravitz Schnitzer Sloane & Johnson Chartered, Natalia Burnett, Morgan Lewis & Bockius LLP, P Russell Perdew, Locke Lord Bissell & Lidell LLP, Patrick Gerard Byrne, Snell & Wilmer LLP & Robert M Brochin, Morgan Lewis & Bockius LLP.

Mortgage Electronic Registration Systems Incorporated, Defendant, represented by Robert W Shely, Bryan Cave LLP, Shayna Fernandez Watts, Bryan Cave LLP, Brian M Forbes, K&L Gates LLP, Colt B Dodrill, Wolfe & Wyman LLP, Cynthia Alexander, Snell & Wilmer LLP, Douglas Anthony Toleno, Aldridge Pite LLP, Elliot S Blut, Ecoff Blut & Salomons, Erica Julie Stutman, Snell & Wilmer LLP, AZ, Gary E Schnitzer, Kravitz Schnitzer Sloane & Johnson Chartered, Gregg A Hubley, Aldridge Pite LLP, Gregory N Blase, K&L Gates LLP, Gregory James Marshall, Snell & Wilmer LLP, AZ, J Matthew Goodin, Locke Lord Bissell & Lidell LLP, J Christopher Jorgensen, Lewis Roca Rothgerber LLP, James R Condo, Snell & Wilmer LLP, AZ, Jennifer Ann Reiter, Maynard Cronin Erickson Curran & Reiter PLC, Jessica Renee Kenney, McCarthy Holthus Levine, Joseph T Prete, Smith Larsen & Wixom, Kent F Larsen, Smith Larsen & Wixom, Lane C Hornfeck, Sarn OToole Marcus & Fisher, Laurel Inman Handley, Aldridge Pite LLP, Leonard J McDonald, Jr., Tiffany & Bosco PA, Matthew Allen Silverman, McCarthy Holthus Levine, Melanie D Morgan, Kravitz Schnitzer Sloane & Johnson Chartered, Natalia Burnett, Morgan Lewis & Bockius LLP, P Russell Perdew, Locke Lord Bissell & Lidell LLP, Patrick Gerard Byrne, Snell & Wilmer LLP, Paul M Levine, McCarthy Holthus Levine, Peter E Dunkley, Wolfe & Wyman LLP, Robert Bruce Allensworth, K&L Gates LLP, Robert M Brochin, Morgan Lewis & Bockius LLP, Robert Wayne Norman, Jr., Houser & Allison APC, AZ, Stefan Mark Palys, Stinson Leonard Street LLP, AZ, Stephanie EW Thompson, Starn OToole Marcus & Fisher & William Morris Fischbach, III, Tiffany & Bosco PA.
Countrywide Home Loans Incorporated, Defendant, represented by Emily Snow Cates, Lewis Roca Rothgerber LLP Office, Gregory Bryan Iannelli, Bryan Cave LLP, AZ, J Christopher Jorgensen, Lewis Roca Rothgerber LLP, Joseph F Yenouskas, Goodwin Procter LLP, Robert W Shely, Bryan Cave LLP, Stefan Mark Palys, Stinson Leonard Street LLP, AZ, Thomas M Hefferon, Goodwin Procter LLP, U Gwyn Williams, Goodwin Procter LLP & Ann-Martha Andrews, Lewis & Roca LLP.
Federal Home Loan Mortgage Corporation, Defendant, represented by Cynthia Alexander, Snell & Wilmer LLP, Erica Julie Stutman, Snell & Wilmer LLP, AZ, Gregory W Falls, Sherman & Howard LLC, AZ, Gregory James Marshall, Snell & Wilmer LLP, AZ, Howard S Lindenberg, Federal Home Loan Mortgage Corporation, Jill L Nicholson, Foley & Lardner LLP, Mark S Landman, Landman Corsi Ballaine & Ford PC, Patrick Gerard Byrne, Snell & Wilmer LLP & Robert J Gibson, Snell & Wilmer LLP.
Federal National Mortgage Association, Defendant, represented by Cynthia Alexander, Snell & Wilmer LLP, Erica Julie Stutman, Snell & Wilmer LLP, AZ, Gregory James Marshall, Snell & Wilmer LLP, AZ, Howard S Lindenberg, Federal Home Loan Mortgage Corporation, James R Condo, Snell & Wilmer LLP, AZ, Jill L Nicholson, Foley & Lardner LLP, Joanne Lee, Foley & Lardner LLP, Jonathan W Garlough, Foley & Lardner LLP, Mark S Landman, Landman Corsi Ballaine & Ford PC, Patrick Gerard Byrne, Snell & Wilmer LLP & William J McKenna, Foley & Lardner LLP.
GMAC Mortgage Group LLC, Defendant, represented by Felicia Y Yu, Reed Smith LLP, Henry F Reichner, Reed Smith LLP, Ira Steven Lefton, Reed Smith LLP & Laurel Inman Handley, Aldridge Pite LLP.
National City Mortgage, Defendant, represented by Abran E Vigil, Ballard Spahr LLP, Brian Schulman, Ballard Spahr LLP, AZ & David H Pittinsky, Ballard Spahr LLP.
JPMorgan Chase Bank NA, Defendant, represented by Brian M Forbes, K&L Gates LLP, Daniel D Maynard, Maynard Cronin Erickson Curran & Reiter PLC, Danielle J Szukala, Burke Warren MacKay & Serritella PC, David R Hall, Parsons Behle & Latimer LLC, Douglas Cameron Erickson, Maynard Cronin Erickson Curran & Reiter PLC, Gregory N Blase, K&L Gates LLP, Jennifer Ann Reiter, Maynard Cronin Erickson Curran & Reiter PLC, Joseph T Prete, Smith Larsen & Wixom, Kent F Larsen, Smith Larsen & Wixom, LeAnn Pedersen Pope, Burke Warren MacKay & Serritella PC & Melanie D Morgan, Kravitz Schnitzer Sloane & Johnson Chartered.
CitiMortgage Incorporated, Defendant, represented by James A Ryan, Quarles & Brady LLP, AZ, Lauren Elliott Stine, Quarles & Brady LLP, AZ, Lucia Nale, Mayer Brown LLP & Thomas V Panoff, Mayer Brown LLP.
HSBC Mortgage Corporation USA, Defendant, represented by Cynthia Alexander, Snell & Wilmer LLP, Erica Julie Stutman, Snell & Wilmer LLP, AZ, Gregory James Marshall, Snell & Wilmer LLP, AZ, Joseph E Anthony, Snell & Wilmer LLP, Patrick Gerard Byrne, Snell & Wilmer LLP & Robert J Gibson, Snell & Wilmer LLP.
AIG United Guaranty Corporation, Defendant, represented by Patrick Michael Klein, II, Fennemore Craig & Todd Stephen Kartchner, Fennemore Craig PC, AZ.
Bank of America NA, Defendant, represented by Robert W Shely, Bryan Cave LLP, Ariel E Stern, Akerman Senterfitt LLP, Emily Snow Cates, Lewis Roca Rothgerber LLP Office, Gregory Bryan Iannelli, Bryan Cave LLP, AZ, J Christopher Jorgensen, Lewis Roca Rothgerber LLP, Jacob D Bundick, Akerman Senterfitt LLP, Joseph F Yenouskas, Goodwin Procter LLP, Thomas M Hefferon, Goodwin Procter LLP & U Gwyn Williams, Goodwin Procter LLP.
America’s Wholesale Lender, Defendant, represented by Gregory Bryan Iannelli, Bryan Cave LLP, AZ, Joseph F Yenouskas, Goodwin Procter LLP, Thomas M Hefferon, Goodwin Procter LLP & U Gwyn Williams, Goodwin Procter LLP.
Executive Trustee Services LLC, Defendant, represented by Colt B Dodrill, Wolfe & Wyman LLP, Gregg A Hubley, Aldridge Pite LLP, Gregory Bryan Iannelli, Bryan Cave LLP, AZ, Henry F Reichner, Reed Smith LLP, Ira Steven Lefton, Reed Smith LLP & Laurel Inman Handley, Aldridge Pite LLP.
National City Corporation, Defendant, represented by Brian Schulman, Ballard Spahr LLP, AZ & David H Pittinsky, Ballard Spahr LLP.
PNC Financial Services Incorporated, Defendant, represented by David H Pittinsky, Ballard Spahr LLP.
MortgageIT Incorporated, Defendant, represented by Karen A Braje, Kristine Huajean Chen, Lorenzo Gasparetti, Reed Smith LLP, Brian Jay Schulman, Greenberg Traurig LLP & Laura Elizabeth Sixkiller, Greenberg Traurig LLP.
Deutsche Bank, Defendant, represented by Karen A Braje, Kristine Huajean Chen & Lorenzo Gasparetti, Reed Smith LLP.
Aurora Loan Services LLC, Defendant, represented by Jason Levi Sanders, Locke Lord Bissell & Liddell LLP, Ariel E Stern, Akerman Senterfitt LLP, Colt B Dodrill, Wolfe & Wyman LLP, J Matthew Goodin, Locke Lord Bissell & Lidell LLP, Jessica Renee Kenney, McCarthy Holthus Levine, Jordan Michael Smith, Akerman Senterfitt LLP, Justin Donald Balser, Akerman LLP, Kristin A Schuler-Hintz, McCarthy & Holthus, Matthew Allen Silverman, McCarthy Holthus Levine, P Russell Perdew, Locke Lord Bissell & Lidell LLP, Paul M Levine, McCarthy Holthus Levine, Robert Wayne Norman, Jr., Houser & Allison APC, AZ & Thomas J Cunningham, Locke Lord Bissell & Lidell LLP.
Litton Loan Servicing LP, Defendant, represented by Brian M Forbes, K&L Gates LLP, Gary E Schnitzer, Kravitz Schnitzer Sloane & Johnson Chartered, Gregory N Blase, K&L Gates LLP, Gregory Michael Monaco, Mack Watson & Stratman PLC, Melanie D Morgan, Kravitz Schnitzer Sloane & Johnson Chartered, Robert Bruce Allensworth, K&L Gates LLP & Stephen M Dichter, Christian Dichter & Sluga PC.
ReconTrust Company, Defendant, represented by Ariel E Stern, Akerman Senterfitt LLP, Emily Snow Cates, Lewis Roca Rothgerber LLP Office, J Christopher Jorgensen, Lewis Roca Rothgerber LLP, Joseph F Yenouskas, Goodwin Procter LLP, Stefan Mark Palys, Stinson Leonard Street LLP, AZ, Thomas M Hefferon, Goodwin Procter LLP, U Gwyn Williams, Goodwin Procter LLP & Ann-Martha Andrews, Lewis & Roca LLP.
CR Title Services Incorporated, Defendant, represented by Lauren Elliott Stine, Quarles & Brady LLP, AZ, Lucia Nale, Mayer Brown LLP & Thomas V Panoff, Mayer Brown LLP.
Housekey Financial Corporation, Defendant, represented by Cynthia Alexander, Snell & Wilmer LLP, Erica Julie Stutman, Snell & Wilmer LLP, AZ, Gregory James Marshall, Snell & Wilmer LLP, AZ & Patrick Gerard Byrne, Snell & Wilmer LLP.
American Home Mortgage Servicing Incorporated, Defendant, represented by Andrew R Louis, Buckley Sandler LLP, Cynthia Alexander, Snell & Wilmer LLP, Erica Julie Stutman, Snell & Wilmer LLP, AZ, Matthew P Previn, Buckley Sandler LLP & Patrick Gerard Byrne, Snell & Wilmer LLP.
Fidelity National Title Insurance Company, Defendant, represented by Neil A Ackerman, Neil Ackerman Esq LLC & Zachary T Ball, Fidelity National Law Group.
National Default Servicing Corporation, Defendant, represented by Cynthia Alexander, Snell & Wilmer LLP, Gregory James Marshall, Snell & Wilmer LLP, AZ, Gregory L Wilde, Tiffany & Bosco PA & Jonathan D Fink, Wright Finlay & Zak LLP.
Quality Loan Service Corporation, Defendant, represented by Kristin A Schuler-Hintz, McCarthy & Holthus.
Bank of New York Mellon, Defendant, represented by Gregory Bryan Iannelli, Bryan Cave LLP, AZ, Robert W Shely, Bryan Cave LLP, Thomas M Hefferon, Goodwin Procter LLP, Brian M Forbes, K&L Gates LLP, Danielle J Szukala, Burke Warren MacKay & Serritella PC, David R Hall, Parsons Behle & Latimer LLC, Gregory N Blase, K&L Gates LLP, Jennifer Ann Reiter, Maynard Cronin Erickson Curran & Reiter PLC, Joseph F Yenouskas, Goodwin Procter LLP & LeAnn Pedersen Pope, Burke Warren MacKay & Serritella PC.
MidFirst Bank, Defendant, represented by Kristin A Schuler-Hintz, McCarthy & Holthus.
Midland Mortgage Company, Defendant, represented by Abran E Vigil, Ballard Spahr LLP, Kristin A Schuler-Hintz, McCarthy & Holthus & Shane Jasmine Young, Ballard Spahr LLP.
National City Bank, Defendant, represented by David H Pittinsky, Ballard Spahr LLP.
Bank of New York Mellon, Defendant, represented by Gregory Bryan Iannelli, Bryan Cave LLP, AZ, Robert W Shely, Bryan Cave LLP, Danielle J Szukala, Burke Warren MacKay & Serritella PC, Joseph F Yenouskas, Goodwin Procter LLP, LeAnn Pedersen Pope, Burke Warren MacKay & Serritella PC, Thomas M Hefferon, Goodwin Procter LLP & U Gwyn Williams, Goodwin Procter LLP.
Bank of New York, Defendant, represented by Gary E Schnitzer, Kravitz Schnitzer Sloane & Johnson Chartered, Joseph F Yenouskas, Goodwin Procter LLP, Melanie D Morgan, Kravitz Schnitzer Sloane & Johnson Chartered, Thomas M Hefferon, Goodwin Procter LLP & U Gwyn Williams, Goodwin Procter LLP.
First Franklin Financial Corporation, Defendant, represented by Joseph F Yenouskas, Goodwin Procter LLP, Peter E Dunkley, Wolfe & Wyman LLP, Thomas M Hefferon, Goodwin Procter LLP & U Gwyn Williams, Goodwin Procter LLP.
First Horizon Home Loan Corporation, Defendant, represented by Ariel E Stern, Akerman Senterfitt LLP, Jacob D Bundick, Akerman Senterfitt LLP, Joseph F Yenouskas, Goodwin Procter LLP, Thomas M Hefferon, Goodwin Procter LLP & U Gwyn Williams, Goodwin Procter LLP.
LaSalle Bank NA, Defendant, represented by J Christopher Jorgensen, Lewis & Roca LLP, Emily Snow Cates, Lewis & Roca LLP Office, Joseph F Yenouskas, Goodwin Procter LLP, Thomas M Hefferon, Goodwin Procter LLP & U Gwyn Williams, Goodwin Procter LLP.
Merrill Lynch & Company Incorporated, Defendant, represented by Joseph F Yenouskas, Goodwin Procter LLP, Thomas M Hefferon, Goodwin Procter LLP & U Gwyn Williams, Goodwin Procter LLP.
Bank of America NA, Defendant, represented by Robert W Shely, Bryan Cave LLP, Emily Snow Cates, Lewis Roca Rothgerber LLP Office, J Christopher Jorgensen, Lewis Roca Rothgerber LLP, Joseph F Yenouskas, Goodwin Procter LLP, Stefan Mark Palys, Stinson Leonard Street LLP, AZ, Thomas M Hefferon, Goodwin Procter LLP, U Gwyn Williams, Goodwin Procter LLP & Ann-Martha Andrews, Lewis & Roca LLP.
EMC Mortgage Corporation, Defendant, represented by Danielle J Szukala, Burke Warren MacKay & Serritella PC, David R Hall, Parsons Behle & Latimer LLC, Jay Earl Smith, Smith Larsen & Wixom, Jennifer Ann Reiter, Maynard Cronin Erickson Curran & Reiter PLC, Joseph T Prete, Smith Larsen & Wixom & LeAnn Pedersen Pope, Burke Warren MacKay & Serritella PC.
California Reconveyance Company, Defendant, represented by Danielle J Szukala, Burke Warren MacKay & Serritella PC, David R Hall, Parsons Behle & Latimer LLC, Jennifer Ann Reiter, Maynard Cronin Erickson Curran & Reiter PLC, Joseph T Prete, Smith Larsen & Wixom, Kent F Larsen, Smith Larsen & Wixom & LeAnn Pedersen Pope, Burke Warren MacKay & Serritella PC.
Signature Group Holdings Incorporated, Defendant, represented by Karl L Nielson, Jones Vargas.
GRP Financial Services Corporation, Defendant, represented by Laurel Inman Handley, Aldridge Pite LLP.
GRP Loan LLC, Defendant, represented by Laurel Inman Handley, Aldridge Pite LLP.
GSAA Home Equity Trust 2006-16, Defendant, represented by Ariel E Stern, Akerman Senterfitt LLP, Jacob D Bundick, Akerman Senterfitt LLP & Joseph F Yenouskas, Goodwin Procter LLP.
MERSCORP Incorporated, Defendant, represented by Cynthia Alexander, Snell & Wilmer LLP, Elliot S Blut, Ecoff Blut & Salomons, Erica Julie Stutman, Snell & Wilmer LLP, AZ, Melanie D Morgan, Kravitz Schnitzer Sloane & Johnson Chartered, Natalia Burnett, Morgan Lewis & Bockius LLP, Patrick Gerard Byrne, Snell & Wilmer LLP & Robert M Brochin, Morgan Lewis & Bockius LLP.
Danita F Fallen, Defendant, represented by Thomas P Beko, Erickson Thorpe & Swainston Limited.
Geneva Martrakus, Defendant, represented by Thomas P Beko, Erickson Thorpe & Swainston Limited.
Western Exchange Services Corporation, Defendant, represented by Thomas P Beko, Erickson Thorpe & Swainston Limited.
Western Title Company Incorporated, Defendant, represented by James M Walsh, Walsh Baker & Rosevear PC & Thomas P Beko, Erickson Thorpe & Swainston Limited.
Carrington Mortgage Services LLC, Defendant, represented by Jonathan D Fink, Wright Finlay & Zak LLP.
First Centennial Title, Defendant, represented by James M Walsh, Walsh Baker & Rosevear PC.
HSBC Bank USA NA, Defendant, represented by Brian M Forbes, K&L Gates LLP, Gary E Schnitzer, Kravitz Schnitzer Sloane & Johnson Chartered, Melanie D Morgan, Kravitz Schnitzer Sloane & Johnson Chartered & Rachel Erin Donn, Meier & Fine LLC.
BAC Home Loans Servicing LP, Defendant, represented by Ariel E Stern, Akerman Senterfitt LLP, J Christopher Jorgensen, Lewis Roca Rothgerber LLP, Joseph F Yenouskas, Goodwin Procter LLP & Thomas M Hefferon, Goodwin Procter LLP.
Greenhead Investments Incorporated, Defendant, represented by John Patrick Flynn, Dioguardi Flynn LLP, Peter Jon Moolenaar, Dioguardi Flynn LLP & Todd Alan Williams, Dioguardi Flynn LLP.
Greenpoint Mortgage Funding Incorporated, Defendant, represented by Greenpoint Mortgage Funding Incorporated.
Regional Service Corporation, Defendant, represented by Joe John Andrew Solseng, Robins Tait PS.
Sierra Pacific Mortgage Services Incorporated, Defendant, represented by John Patrick Flynn, Dioguardi Flynn LLP & Todd Alan Williams, Dioguardi Flynn LLP.
Ocwen Loan Servicing LLC, Defendant, represented by Ashley H Chalmers, OMelveny & Myers LLP, Brian P Brooks, OMelveny & Myers LLP Eye St., Elizabeth Lemond McKeen, OMelveny & Myers LLP & Randall W Edwards, OMelveny & Myers LLP.
Western Progressive Trustee LLC, Defendant, represented by Ashley H Chalmers, OMelveny & Myers LLP, Elizabeth Lemond McKeen, OMelveny & Myers LLP & Randall W Edwards, OMelveny & Myers LLP.
Aztec Foreclosure Corporation, Defendant, represented by Jonathan D Fink, Wright Finlay & Zak LLP.
Lehman Brothers Bank FSB, Defendant, represented by Colt B Dodrill, Wolfe & Wyman LLP, J Matthew Goodin, Locke Lord Bissell & Lidell LLP, Jessica Renee Kenney, McCarthy Holthus Levine, Matthew Allen Silverman, McCarthy Holthus Levine, P Russell Perdew, Locke Lord Bissell & Lidell LLP & Paul M Levine, McCarthy Holthus Levine.
Kumud Patel, Defendant, represented by Emily Snow Cates, Lewis Roca Rothgerber LLP Office, J Christopher Jorgensen, Lewis Roca Rothgerber LLP, Joseph F Yenouskas, Goodwin Procter LLP & Ann-Martha Andrews, Lewis & Roca LLP.
Countrywide Financial Corporation, Defendant, represented by Emily Snow Cates, Lewis Roca Rothgerber LLP Office, J Christopher Jorgensen, Lewis Roca Rothgerber LLP, Joseph F Yenouskas, Goodwin Procter LLP & Ann-Martha Andrews, Lewis & Roca LLP.
Countrywide Bank FSB, Defendant, represented by Emily Snow Cates, Lewis Roca Rothgerber LLP Office, J Christopher Jorgensen, Lewis Roca Rothgerber LLP, Joseph F Yenouskas, Goodwin Procter LLP & Ann-Martha Andrews, Lewis & Roca LLP.
Lisa Klimenko, Defendant, represented by Emily Snow Cates, Lewis Roca Rothgerber LLP Office, J Christopher Jorgensen, Lewis Roca Rothgerber LLP, Ann-Martha Andrews, Lewis & Roca LLP, Emily Snow Cates, Lewis Roca Rothgerber LLP Office, J Christopher Jorgensen, Lewis Roca Rothgerber LLP & Ann-Martha Andrews, Lewis & Roca LLP.
National City Bank, Defendant, represented by Brian Schulman, Ballard Spahr LLP, AZ & David H Pittinsky, Ballard Spahr LLP.
National City Corporation, Defendant, represented by David H Pittinsky, Ballard Spahr LLP.
National City Mortgage, Defendant, represented by Abran E Vigil, Ballard Spahr LLP, Brian Schulman, Ballard Spahr LLP, AZ & David H Pittinsky, Ballard Spahr LLP.
PNC Financial Services Group Incorporated, Defendant, represented by Brian Schulman, Ballard Spahr LLP, AZ & David H Pittinsky, Ballard Spahr LLP.
CEREF REO II LLC, Defendant, represented by L Joe Coppedge, Coppedge Emmel & Klegerman.
Specialized Loan Servicing LLC, Defendant, represented by Specialized Loan Servicing LLC.
Stewart Title of Northern Nevada, Defendant, represented by Christian L Moore, Lemons Grundy & Eisenberg & Douglas R Brown, Lemons Grundy & Eisenberg.
HSBC Bank USA, Defendant, represented by Marilyn Fine, Meier & Fine LLC, Melanie D Morgan, Kravitz Schnitzer Sloane & Johnson Chartered & Rachel Erin Donn, Meier & Fine LLC.
IndyMac Federal Bank FSB, Defendant, represented by Marilyn Fine, Meier & Fine LLC.
OneWest Bank, Defendant, represented by Kristin A Schuler-Hintz, McCarthy & Holthus & Marilyn Fine, Meier & Fine LLC.
JPMorgan Chase, Defendant, represented by Danielle J Szukala, Burke Warren MacKay & Serritella PC, Gary E Schnitzer, Kravitz Schnitzer Sloane & Johnson Chartered, LeAnn Pedersen Pope, Burke Warren MacKay & Serritella PC & Melanie D Morgan, Kravitz Schnitzer Sloane & Johnson Chartered.
Chase Home Finance LLC, Defendant, represented by Robert W Shely, Bryan Cave LLP, Shayna Fernandez Watts, Bryan Cave LLP, Jay Earl Smith, Smith Larsen & Wixom, Jennifer Ann Reiter, Maynard Cronin Erickson Curran & Reiter PLC, Joseph T Prete, Smith Larsen & Wixom & Kent F Larsen, Smith Larsen & Wixom.
TD Service Company, Defendant, represented by Gregory L Wilde, Tiffany & Bosco PA.
Cooper Castle Law Firm LLP, Defendant, represented by Aaron Michael Waite, Weinstein Pinson & Riley PS.
U.S. Bank NA, Defendant, represented by Barbara J Dawson, Snell & Wilmer LLP, AZ, Joseph F Yenouskas, Goodwin Procter LLP, Thomas M Hefferon, Goodwin Procter LLP, Brian M Forbes, K&L Gates LLP, Cynthia Alexander, Snell & Wilmer LLP, Gary E Schnitzer, Kravitz Schnitzer Sloane & Johnson Chartered, Gregory N Blase, K&L Gates LLP, Gregory James Marshall, Snell & Wilmer LLP, AZ, Laurel Inman Handley, Aldridge Pite LLP, Leonard J McDonald, Jr., Tiffany & Bosco PA, Melanie D Morgan, Kravitz Schnitzer Sloane & Johnson Chartered & William Morris Fischbach, III, Tiffany & Bosco PA.
Bank of America, Defendant, represented by Emily Snow Cates, Lewis Roca Rothgerber LLP Office, J Christopher Jorgensen, Lewis Roca Rothgerber LLP, Joseph T Prete, Smith Larsen & Wixom, Joseph F Yenouskas, Goodwin Procter LLP & Stefan Mark Palys, Stinson Leonard Street LLP, AZ.
Cal-Western Reconveyance Corporation, Defendant, represented by Gregg A Hubley, Aldridge Pite LLP, Jessica Renee Kenney, McCarthy Holthus Levine, Laurel Inman Handley, Aldridge Pite LLP, Matthew Allen Silverman, McCarthy Holthus Levine & Paul M Levine, McCarthy Holthus Levine.
Bank of New York, Defendant, represented by Brian M Forbes, K&L Gates LLP, Gary E Schnitzer, Kravitz Schnitzer Sloane & Johnson Chartered, Gregory N Blase, K&L Gates LLP, Melanie D Morgan, Kravitz Schnitzer Sloane & Johnson Chartered & Robert Bruce Allensworth, K&L Gates LLP.
Lime Financial Services Limited, Defendant, represented by Aaron Michael Waite, Weinstein Pinson & Riley PS.
IndyMac Bank FSB, Defendant, represented by Kristin A Schuler-Hintz, McCarthy & Holthus & Marilyn Fine, Meier & Fine LLC.
Equity One Incorporated, Defendant, represented by David R Hall, Parsons Behle & Latimer LLC.
First Centennial Title Company of Nevada, Defendant, represented by James M Walsh, Walsh Baker & Rosevear PC.
Deutsche Bank National Trust Company, Defendant, represented by Jami Wintz McKeon, Morgan Lewis & Bockius LLP, Jeremy S Gladstone, Morgan Lewis & Bockius LLP, Joseph F Yenouskas, Goodwin Procter LLP, Peter E Dunkley, Wolfe & Wyman LLP & Ryan W Herrick, Jones Vargas.
First Franklin, Defendant, represented by Peter E Dunkley, Wolfe & Wyman LLP.
Mortgage Electronic Registration Systems Incorporated, Defendant, represented by Robert W Shely, Bryan Cave LLP, Shayna Fernandez Watts, Bryan Cave LLP, Cynthia Alexander, Snell & Wilmer LLP, Elliot S Blut, Ecoff Blut & Salomons, Erica Julie Stutman, Snell & Wilmer LLP, AZ, Gary E Schnitzer, Kravitz Schnitzer Sloane & Johnson Chartered, Joseph T Prete, Smith Larsen & Wixom, Lane C Hornfeck, Sarn OToole Marcus & Fisher, Melanie D Morgan, Kravitz Schnitzer Sloane & Johnson Chartered, Natalia Burnett, Morgan Lewis & Bockius LLP, Peter E Dunkley, Wolfe & Wyman LLP, Robert M Brochin, Morgan Lewis & Bockius LLP & Stephanie EW Thompson, Starn OToole Marcus & Fisher.
National Default Servicing Corporation, Defendant, represented by Jonathan D Fink, Wright Finlay & Zak LLP.
Chicago Title, Defendant, represented by Douglas D Gerrard, Gerrard Cox Larsen & Sheldon A Herbert, Gerrard Cox Larsen.
BAC Home Loans, Defendant, represented by Emily Snow Cates, Lewis Roca Rothgerber LLP Office, J Christopher Jorgensen, Lewis Roca Rothgerber LLP & Stefan Mark Palys, Stinson Leonard Street LLP, AZ.
ReconTrust Company NA, Defendant, represented by Gregory Bryan Iannelli, Bryan Cave LLP, AZ, Robert W Shely, Bryan Cave LLP, Thomas M Hefferon, Goodwin Procter LLP, Ariel E Stern, Akerman Senterfitt LLP, Emily Snow Cates, Lewis Roca Rothgerber LLP Office, J Christopher Jorgensen, Lewis Roca Rothgerber LLP, Jacob D Bundick, Akerman Senterfitt LLP, Joseph F Yenouskas, Goodwin Procter LLP, Stefan Mark Palys, Stinson Leonard Street LLP, AZ & Ann-Martha Andrews, Lewis & Roca LLP.
Fidelity National Title, Defendant, represented by Douglas D Gerrard, Gerrard Cox Larsen, Marybeth Sundstrom, Gerrard Cox Larsen, Sheldon A Herbert, Gerrard Cox Larsen & Zachary T Ball, Fidelity National Law Group.
HSBC Mortgage Services Incorporated, Defendant, represented by Cynthia Alexander, Snell & Wilmer LLP, Erica Julie Stutman, Snell & Wilmer LLP, AZ & Gregory James Marshall, Snell & Wilmer LLP, AZ.
Credit Suisse First Boston Financial Corporation, Defendant, represented by Cynthia Alexander, Snell & Wilmer LLP & Erica Julie Stutman, Snell & Wilmer LLP, AZ.
BAC Home Loans Servicing LP, Defendant, represented by Emily Snow Cates, Lewis Roca Rothgerber LLP Office, J Christopher Jorgensen, Lewis Roca Rothgerber LLP, Joseph F Yenouskas, Goodwin Procter LLP & Ann-Martha Andrews, Lewis & Roca LLP.
MTC Financial Incorporated, Defendant, represented by Richard Joseph Reynolds, Turner Reynolds Greco & OHara & William Fred Hyder, William F Hyder PC.
AmTrust Bank, Defendant, represented by J Christopher Jorgensen, Lewis Roca Rothgerber LLP.
Cal-Western Reconveyance Corporation, Defendant, represented by Laurel Inman Handley, Aldridge Pite LLP.
Central Mortgage Company, Defendant, represented by David Winthrop Cowles, Tiffany & Bosco PA, Kevin Patrick Nelson, Tiffany & Bosco PA, Kevin Hahn, Malcolm & Cisneros, Leonard J McDonald, Jr., Tiffany & Bosco PA & William Morris Fischbach, III, Tiffany & Bosco PA.
First Franklin Loan Services Incorporated, Defendant, represented by Thomas M Hefferon, Goodwin Procter LLP.
GMAC Mortgage LLC, Defendant, represented by Matthew J Christian, Kolesar & Leatham, William D Schuller, Kolesar & Leatham, Douglas Anthony Toleno, Aldridge Pite LLP, Henry F Reichner, Reed Smith LLP, Ira Steven Lefton, Reed Smith LLP, Laurel Inman Handley, Aldridge Pite LLP & Michael R Pennington, Bradley Arant Boult Cummings LLP.
Landmark Onestop Incorporated, Defendant, represented by Beth McNamara Wilson, LandAmerica Financial Group.
Homecomings Financial Company LLC, Defendant, represented by Henry F Reichner, Reed Smith LLP, Ira S Lefton, Reed Smith LLP, Laurel Inman Handley, Aldridge Pite LLP & Michael R Pennington, Bradley Arant Boult Cummings LLP.
Saxon Mortgage Corporation, Defendant, represented by Colt B Dodrill, Wolfe & Wyman LLP, J Matthew Goodin, Locke Lord Bissell & Lidell LLP, P Russell Perdew, Locke Lord Bissell & Lidell LLP & Thomas J Cunningham, Locke Lord Bissell & Lidell LLP.
SunTrust Mortgage Incorporated, Defendant, represented by Abran E Vigil, Ballard Spahr LLP, Ariel E Stern, Akerman Senterfitt LLP, Jacob D Bundick, Akerman Senterfitt LLP & Shane Jasmine Young, Ballard Spahr LLP.
MortgageIT Incorporated, Defendant, represented by Brian Jay Schulman, Greenberg Traurig LLP, Karen A Braje & Laura Elizabeth Sixkiller, Greenberg Traurig LLP.
Countrywide Mortgage Ventures LLC, Defendant, represented by Emily Snow Cates, Lewis Roca Rothgerber LLP Office, J Christopher Jorgensen, Lewis Roca Rothgerber LLP & Ann-Martha Andrews, Lewis & Roca LLP.
Bank of America Corporation, Defendant, represented by Emily Snow Cates, Lewis Roca Rothgerber LLP Office, J Christopher Jorgensen, Lewis Roca Rothgerber LLP & Ann-Martha Andrews, Lewis & Roca LLP.
John Roussel, Defendant, represented by Ariel E Stern, Akerman Senterfitt LLP & Jacob D Bundick, Akerman Senterfitt LLP.
Stewart Title, Defendant, represented by Christian L Moore, Lemons Grundy & Eisenberg & Douglas R Brown, Lemons Grundy & Eisenberg.
Ticor Title of Nevada Incorporated, Defendant, represented by Douglas D Gerrard, Gerrard Cox Larsen, Marybeth Sundstrom, Gerrard Cox Larsen, Sheldon A Herbert, Gerrard Cox Larsen & Zachary T Ball, Fidelity National Law Group.
GMAC Mortgage, Defendant, represented by Colt B Dodrill, Wolfe & Wyman LLP, Gregg A Hubley, Aldridge Pite LLP & Laurel Inman Handley, Aldridge Pite LLP.
Susan Longero, Defendant, represented by Douglas D Gerrard, Gerrard Cox Larsen.
TD Service Company, Defendant, represented by Gregory L Wilde, Tiffany & Bosco PA.
TD Service Company, Defendant, represented by Gregory L Wilde, Tiffany & Bosco PA.
Wells Fargo Home Mortgage, Defendant, represented by Barbara J Dawson, Snell & Wilmer LLP, AZ, John Michael DeStefano, III, Snell & Wilmer LLP, AZ & Joseph F Yenouskas, Goodwin Procter LLP.
Sierra Pacific Mortgage Company Incorporated, Defendant, represented by John Patrick Flynn, Dioguardi Flynn LLP, Peter Jon Moolenaar, Dioguardi Flynn LLP & Todd Alan Williams, Dioguardi Flynn LLP.
Greentree, Defendant, represented by J Christopher Jorgensen, Lewis Roca Rothgerber LLP.
Wells Fargo Home Equity, Defendant, represented by Joseph F Yenouskas, Goodwin Procter LLP.
Shelter Mortgage Company LLC, Defendant, represented by G Lynn Shumway, Law Office of G Lynn Shumway & Roland P Reynolds, Palmer Lombardi & Donohue LLP.
I.B. Property Holdings LLC, Defendant, represented by Gregory L Wilde, Tiffany & Bosco PA.
Fidelity National Default, Defendant, represented by Neil A Ackerman, Neil Ackerman Esq LLC.
IndyMac Mortgage Services, Defendant, represented by Elliot S Blut, Ecoff Blut & Salomons.
Chicago Title Agency of Nevada Incorporated, Defendant, represented by Zachary T Ball, Fidelity National Law Group.
Hometown Mortgage LLC, Defendant, represented by Cynthia Alexander, Snell & Wilmer LLP.
HSBC Bank USA, Defendant, represented by Marilyn Fine, Meier & Fine LLC & Rachel Erin Donn, Meier & Fine LLC.
OneWest Bank FSB, Defendant, represented by Brett J Natarelli, Dykema Gossett PLLC, Marilyn Fine, Meier & Fine LLC & Robin P Wright, Wright Finlay & Zak LLP.
Countrywide Bank NA, Defendant, represented by J Christopher Jorgensen, Lewis Roca Rothgerber LLP & Joseph F Yenouskas, Goodwin Procter LLP.
World Savings Bank FSB, Defendant, represented by Cassie R Stratford, Snell & Wilmer LLP.
E*Trade Financial, Defendant, represented by Jonathan D Dykstra, Severson & Werson & Keegan G Low, Robison Belaustegui Sharp & Robb.
Chase Mortgage, Defendant, represented by Jay Earl Smith, Smith Larsen & Wixom & Joseph T Prete, Smith Larsen & Wixom.
UTLS Default Services LLC, Defendant, represented by Laurel Inman Handley, Aldridge Pite LLP & Douglas Anthony Toleno, Aldridge Pite LLP.
Bank of New York Trust Company NA, Defendant, represented by Douglas Anthony Toleno, Aldridge Pite LLP.
Residential Funding Company LLC, Defendant, represented by Douglas Anthony Toleno, Aldridge Pite LLP & Michael R Pennington, Bradley Arant Boult Cummings LLP.
MAX Default Services Corporation, Defendant, represented by Leonard J McDonald, Jr., Tiffany & Bosco PA & William Morris Fischbach, III, Tiffany & Bosco PA.
Provident Funding Associates LP, Defendant, represented by Leonard J McDonald, Jr., Tiffany & Bosco PA & William Morris Fischbach, III, Tiffany & Bosco PA.
Security Title Agency Incorporated, Defendant, represented by Michael R Scheurich, Dickinson Wright PLLC & Robert C Brown, Dickinson Wright PLLC.
DLSA Mortgage Loan Trust 2006-AR1, Defendant, represented by Leonard J McDonald, Jr., Tiffany & Bosco PA & William Morris Fischbach, III, Tiffany & Bosco PA.
DSL Service Company, Defendant, represented by Leonard J McDonald, Jr., Tiffany & Bosco PA & William Morris Fischbach, III, Tiffany & Bosco PA.
Colonial Bank NA, Defendant, represented by Alex J Flangas, Holland & Hart LLP & Tamara Reid, Holland & Hart LLP.
First Horizon Home Loans, Defendant, represented by Joseph F Yenouskas, Goodwin Procter LLP.
Sharon L Grundel, Defendant, represented by Rick Lawton, Law Office of Rick Lawton Esq PC.
MTC Financial Incorporated, Defendant, represented by Richard Joseph Reynolds, Turner Reynolds Greco & OHara & William Fred Hyder, William F Hyder PC.
GMAC Residential Funding Corporation, Defendant, represented by Henry F Reichner, Reed Smith LLP, Ira Steven Lefton, Reed Smith LLP & Michael R Pennington, Bradley Arant Boult Cummings LLP.
Land Home Financial Services, Defendant, represented by Bradley R Bowles, Bowles & Verna LLP & Michael P Connolly, Bowles & Verna LLP.
Federal Housing Finance Agency, Intervenor Defendant, represented by David B Bergman, Arnold & Porter LLP, David D Fauvre, Arnold & Porter LLP, Howard N Cayne, Arnold & Porter LLP, Michael W Large, Laxalt & Nomura Limited, Stephen E Hart, Office of Thrift Supervision & Steven E Guinn, Laxalt & Nomura Limited.

ORDER

JAMES A. TEILBORG, Senior District Judge.

Pending before the Court is Defendant Aurora Loan Services, LLC’s (“Aurora”) motion for judgment on the pleadings (Doc. 1833).

Background

This Court previously granted a motion to dismiss this case. Plaintiffs appealed that decision and the Court of Appeals reversed the dismissal (Doc. 1797). Following remand, Defendants indicated that they intended to again move to dismiss. This Court ordered that if any Defendant again moved to dismiss, such Defendant must address the Rule of Mandate and how this Court could entertain another round of motions to dismiss having already been reversed for dismissing the case (Doc. 1803).

Defendant Aurora filed its motion for judgment on the pleadings and completely failed to comply with this Court’s Order. While the motion filed was called a “motion for judgment on the pleadings,” Aurora advocates throughout the motion that it is decided on the Federal Rule of Civil Procedure 12(b)(6) standard (see, e.g., Doc. 1833 at 3). Thus, the Court does not see a distinction between a motion to dismiss under 12(b)(6) and a motion for judgment on the pleadings for purposes of Defendants’ obligation to comply with the Order at Doc. 1803.

Further, the Court advised Defendant Aurora at the Rule 16 conference that the Court was “surprised” it did not even cite the Court of Appeals decision in the motion for judgment on the pleadings. Aurora’s response was to indicate they would address it only if Plaintiffs addressed it in their response. However, a lawyer should address controlling case law even if the opposing side fails to cite it.1 Moreover, the Court had twice told Defendants that the Court expected the Court of Appeals decision to be addressed. Nonetheless, in their Reply, Aurora still fails to mention it.

Rule of Mandate

…the Ischay court instructed that the “so-called rule of mandate `presents a specific and more binding variant of the law of the case doctrine.’ The rule of mandate requires that, on remand, the lower court’s actions must be consistent with both the letter and the spirit of the higher court’s decision.”Ischay, 383 F.Supp.2d at 1214 (citations omitted).

The court continued:
The rule of mandate is similar to, but broader than, the law of the case doctrine. A district court, upon receiving the mandate of an appellate court cannot vary it or examine it for any other purpose than execution. Thus, a district court could not refuse to dismiss a case when the mandate required it, and a district court could not revisit its already final determinations unless the mandate allowed it[.]

Id., quoting Cote, 51 F.3d at 181 (citations omitted in original). Coto v. Astrue, No. CV 07-3559-PLA, 2008 WL 4642965, at *6 (C.D. Cal. Oct. 20, 2008).

Here, as discussed above, Aurora fails to explain how this Court granting judgment on the pleadings under the exact same legal standard as the 12(b)(6) standard on which this Court has already been reversed would not violate the Rule of Mandate. This Court has reviewed the Opinion of the Court of Appeals and finds that it bars this Court from reconsidering dismissal under 12(b)(6) by way of a 12(c) motion. Accordingly,

IT IS ORDERED that Aurora’s motion for judgment on the pleadings (Doc. 1833; CV 10-1547, Doc. 22) is denied.

IT IS FURTHER ORDERED that Plaintiff’s request for oral argument is denied because the parties have been given multiple opportunities to address the issue of concern to the Court and have repeatedly failed to do so. Thus, the Court finds that oral argument would not aid the Court’s decisional process on this topic because the parties will not address it. See e.g., Partridge v. Reich, 141 F.3d 920, 926 (9th Cir. 1998); Lake at Las Vegas Investors Group, Inc. v. Pacific. Dev. Malibu Corp., 933 F.2d 724, 729 (9th Cir. 1991).

IT IS FINALLY ORDERED that the Clerk of the Court shall file a copy of this Order in both cases listed above.
FootNotes

1. Specifically, Aurora argues,
…, even if Stejic’s “and/or” allegation were [sic] generously construed as alleging Aurora caused the Deed to be recorded, Stejic offers zero factual enhancement for this bare allegation. Specifically, Stejic alleges no facts showing how or when Aurora allegedly caused QLS to record the Deed. Purely conclusory allegations of this type are insufficient to state a claim, and this pleading deficiency also requires dismissal. See Haller v. Advanced Indus. Comp. Inc., 13 F.Supp.3d 1027, 1029 (D. Ariz. 2014) (a motion for judgment on the pleadings, like a Rule 12(b)(6) motion, “is directed at the legal sufficiency of the opposing party’s pleadings”) (internal quotation omitted); Twombly, 550 U.S. at 555 (a pleader must provide “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do”).
Doc. 1833 at 6-7. In its opinion, the Court of Appeals stated:
Fourth, the MDL Court held that appellants had not pleaded their robosinging claims with sufficient particularity to satisfy Federal Rule of Civil Procedure 8(a). We disagree. … [T]he CAC also alleges that Jim Montes, who purportedly signed the substitution of trustee for the property for Milan Stejic had, on the same day, “signed and recorded, with differing signatures, numerous Substitutions of Trustee in the Maricopa County Recorder’s Office….Many of the signatures appear visibly different than one another.” These and similar allegations of the CAC “plausibly suggest an entitlement to relief,” Ashcroft v. Iqbal, 556 U.S. 662, 681 (2009) and provide defendants fair notice as to the nature of appellants’ claims against them, Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011).
Doc. 1797-1 at 24-25. Based on the foregoing, this Court finds that the Court of Appeals has already directly decided that Plaintiff Stejic stated a claim against defendants.

SUPREME COURT- STATE OF NEW YORK
I.A.S. PART 33 – SUFFOLK COUNTY

US BANK NATIONAL ASSOCIATION, as
Trustee for JP MORGAN MORTGAGE TRUST
2007-S3,
Plaintiff,

-against-

LUC A. FEDNARD, SABINE M. FEDNARD,
JPMORGAN CHASE BANK, NA, “JOHN DOES” :
and “JANE DOES”, said names being fictitious
parties intended being possible tenants or occupants :
of premises, and corporations, other entities or
persons who claim or may claim a lien against the
premises,
Defendants.

Excerpt:

In this mortgage foreclosure action, the plaintiff moves for summary judgment dismissing the
affirmative defenses and counterclaims asserted in the answer served by the obligor/mortgagor
defendants, Fednard, and for summary judgment in favor of the plaintiff on its complaint. The
plaintiff further demands an order fixing the defaults in answering of the remaining defendants who
were served with process and, among other things, the appointment of a referee to compute.

The motion is opposed by the answering defendants in cross moving papers wherein they seek
to compel the plaintiff to comply with outstanding discovery demands and for leave to serve an
amended answer.

The plaintiffs motion ( #001) is denied. The moving papers failed to demonstrate, prima facie
that the affirmative defenses, such as the standing defenses asserted in the answer of the defendants
Fednard, are, as a matter of law, without merit and the plaintiff’s entitlement to judgment on its
complaint for foreclosure and sale against said defendants. Review of the affidavit of Tisha Denney,
Assistant Secretary to the plaintiff’s attorney-in-fact and servicer and the other attachments to the
moving papers reveal that they are insufficient to establish a prima facie entitlement to the dismissal
of the plaintiff’s affirmative standing defenses as particulars regarding note delivery were not
advanced in the affidavit of the plaintiff’s servicer or other its agents (see Deutsche Bank Natl. Trust
Co. v Haller, I 00 AD3d 680, 954 NYS2d 551 [2d Dept 2012]; HSBC Bank USA v Hernandez, 92
AD3d 843, 939 NYS2d 120 [2d Dept 2012]; see also Bank of America, N.A. v Paulsen, 125 AD3d
909, 2015 WL 775197 [2d Dept2015]; Wells Fargo Bank, NA vBurke, 125 AD3d 765, 2015 WL
542140 [2d Dept 2015]; U.S. Bank Natl. Ass’n v Faruque, 120 AD3d 575, 575, 991NYS2d630
[2d Dept 2015]; U.S. Bank Natl. Ass’n v Weinman, 123 AD3d 1108, 2014 WL 7392278 [2d Dept
2014]; Deutsche Bank Natl. Trust Co. v Barnett, 88 AD3d 636, 931NYS2d630 [2d Dept 2011];
cf.,Aurora Loan Serv., LLCv Taylor, 114 AD3d 627, 980 NYS2d 475 [2d Dept 2014]; Wells Fargo
Bllnk, N.A. v Arias, 121 AD3d 973, 995 NYS2d 118 (2d Dept 2014]; Central Mtge. Co. v
McClelland, 119 AD3d 885, 991 NYS2d 87 [2d Dept 2014]; see also Deutsche Bank Natl. Trust
Co. v Whalen , 107 AD3d 931, 969 NYS2d 82 [2d Dept 2013]). The assertion by plaintiff’s counsel
set forth in ~ 43 of his affirmation is woefully insufficient to warrant dismissal of the defendants ‘
standing defenses as a matter of law.
Nor may the plaintiff successfully rely upon the assignment of the mortgage attached to the
moving papers as said assignment did not include an assignment of the mortgage note (see Bank of
America, N.A. v Paulsen, 125 AD3d 909, 2015 WL 775197 [2d Dept 2015]; U.S. Bank Natl. Ass’n
v Faruque, 120 AD3 575, 575, 991NYS2d 630 [2d Dept 2014] ; Bank of New York Mellon v Gtlles,
116 AD3d 723, 982 NYS2d 911 [2d Dept 2014]; US BankofNYvSilverberg, 86 AD3d 274, 280,
[* 2] 926 NYS2d 532 [2d Dept 2011]) .. The plaintiffs motion is thus denied without regard to the
sufficiency of the defendants’ opposing papers.

[…]

Credit Slips-

Can’t get a mortgage? Turns out it’s my fault. As in mine, personally. Yup. That’s the claim in a Housing Wire written by right-wing banking analyst R. Christopher Whalen. Here is Whalen’s argument in a nutshell:

Servicing regulations make banks really reluctant to deal with anyone but very good credit borrowers because it takes so long to foreclose on anyone anymore. Servicing regulations are so onerous because of an article Tara Twomey and I wrote on mortgage servicing that said that servicers were doing bad things. The problem (in Whalen’s view) is that Tara and I had it totally wrong.

I’m flattered that Whalen credits the article with having inspired all of the subsequent foreclosure regulation, but it would be nice if Whalen would accurately characterize the article. (Has he even read it?) It would also be nice if Whalen would acknowledge that servicers have done an awful lot of bad things over the past several years, which might just possibily have something to do with the current regulatory enviornment for servicing. But such an admission that might get in the way of Whalen grinding his political axe (two legs good, regulation ba-a-a-d).

 [CREDIT SLIPS]

US BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR JP MORGAN MORTGAGE ACQUISITION CORP. JPMAC 2006-FREI 10790 Rancho Bernardo Road San Diego CA 92127, Plaintiff,
v.
YOLANDE NICHOLSON, “JOHN DOE”, NANCY ENGELHARDT, Defendants.

 Docket No. 17679-2008, Mtn. Seq. No. 005 & 006.

 Supreme Court, Suffolk County.

 Submit August 14, 2013.

 Motion June 19, 2013.

 November 12, 2013.

 McCabe, Weisberg & Conway, P.C. By Jose O. Hasbun, Esq. 145 Huguenot Street, Suite 210 New Rochelle, NY 10801 Attorneys for Plaintiff.

Alice A. Nicholson, Esq. 26 Court Street, Suite 603 Brooklyn, NY 11242 Attorney for Defendant Nicholson

JOHN J.J. JONES, Jr., Judge.

ORDERED that the motion by the plaintiff, US Bank National Association, as Trustee for JP Morgan Mortgage Acquisition Corp. JPMAC 2006-FRE1 10790 Rancho Bernardo Road San Diego CA 92127 [“the plaintiff’], for an order vacating the Order of Reference dated December 18, 2009, granting a Second Order of Reference and permitting the plaintiff to proceed with foreclosure (motion sequence 005), and the cross motion by the defendant Yolande Nicholson for an Order compelling the acceptance of the Answer previously served upon the plaintiff, dismissing the complaint for the failure to comply with REAL PROPERTY ACTIONS AND PROCEEDINGS LAW [“RPAPL”] § 1303, and denying the plaintiffs motion for a judgment of foreclosure and granting the defendant summary judgment dismissing the complaint (motion sequence 006), are decided together; and it is further

ORDERED that so much of the plaintiffs motion seeking an order vacating the Order of Reference dated December 18, 2009, is granted; and it is further

ORDERED that so much of the plaintiffs motion seeking a Second Order of Reference and permitting the plaintiff to proceed with foreclosure is denied; and it is further

ORDERED that so much of the cross motion by the defendant Yolande Nicholson [“the defendant” or “Nicholson”] for an Order compelling the acceptance of the Answer previously served upon the plaintiff, is granted, and the cross motion is otherwise denied.

 Plaintiff’s Motion for a New Order of Reference

This foreclosure action involves a loan made by Fremont Investment & Loan [“Fremont”] to the defendant on October 14, 2005, in the amount of $632,000.00, secured by a mortgage executed by the defendant on that same date. The mortgage indicates that for purposes of recording Mortgage Electronic Recording Systems, Inc., [“MERS”], is the mortgagee of record. The instant action to foreclose the mortgage was commenced on behalf of the plaintiff on May 8, 2008, by the now-defunct law firm of Steven J. Baum, P.C. It was not until ten days later, on May 18, 2008, that the mortgage was purportedly assigned by MERS as nominee for Fremont to the plaintiff

On two prior occasions the plaintiff sought an Order Appointing a Referee and to Compute. The plaintiff withdrew the first application submitted on December 3, 2008. The second application was submitted on September 30, 2009; the resulting Order of Reference which the plaintiff now seeks to vacate was granted on December 18, 2009. In addition, the plaintiff withdrew a previous motion for a Judgment of Foreclosure and Sale on October 18, 2010.

According to the plaintiffs moving papers, the current law firm representing the plaintiff attempted to comply with the Office of Court Administration’s memorandum dated October 20, 2010, as supplemented, requiring counsel to consult with a representative of the lender and confirm the factual accuracy of the allegations set forth in the complaint and any supporting affidavits or affirmations filed with the Court, as well as the accuracy of the notarizations contained in the supporting documents. Counsel consulted with its client and was advised that the plaintiff could not confirm the accuracy with regard to execution and/or notarization of the prior Affidavit of Fact dated April 21, 2009. Thus, the plaintiff now seeks an order vacating the December, 2009, Order of Reference that was based on the April, 2009 affidavit, and granting a new Order of Reference in order to move forward with the foreclosure.

In support of the plaintiffs application it submitted, inter alia, an “Attorney Statement” dated May 13, 2013, contending that the “subject [n]ote was transferred via indorsement in blank”, referring to an Exhibit attached to the moving papers. The Exhibit consisted of a copy of the note signed by the defendant, and a separate undated page containing no identifying information connecting it with the subject note. Rather, the only writing on the page is a stamp that purports to be a blank indorsement with a signature of one “Michael Koch”, identified as “Fremont Investment & Loan, Vice President”.

The plaintiff contends that the effect of the blank indorsement was to make the note payable to bearer pursuant to UCC § 1-201(5), which may be negotiated by transfer of possession alone relying on UCC §§ 3-204[2] and 3-202 [1]. The “Attorney Statement” contends that under UCC § 9-203 (9) (g), the assignment or transfer by the seller of a security interest in the note automatically transfers a corresponding interest in the mortgage to the assignee, thereby rendering an actual assignment unnecessary. The argument is obviously intended to remedy the fact that the plaintiff was not assigned the mortgage until ten days after it commenced the action to foreclose (see generally Bank of New York v. Silverberg, 86 A.D.3d 274, 926 N.Y.S.2d 532 [2d Dept. 2011] [“In a mortgage foreclosure action, a plaintiff has standing where it is both the holder or assignee of the subject mortgage and the holder or assignee of the underlying note at the time the action is commenced”]).

The “Attorney Statement” relies on the affidavit of Carrie S. Patridge, dated April 15, 2013, as support for the statement that the plaintiff has been in “continuous possession of the Note (and Mortgage) since the commencement of the action”. Patridge is described as the Vice President of the loan servicer authorized to act on the plaintiff’s behalf. The Patridge affidavit states that the defendant defaulted on December 1, 2007, the default has not been cured, and that a notice of default was sent to the defendant on February 11, 2008.

Although the Patridge affidavit states that the plaintiff is the holder of the note, conspicuously absent from the affidavit or anywhere else in the moving papers is evidence that the plaintiff was the holder of the note and mortgage when the action was commenced on May 8, 2008. The “Attorney Statement” does not provide proof when, if ever, Fremont indorsed the subject note to the plaintiff or transferred possession of it. It merely references the Patridge affidavit for the proposition that the plaintiff is in possession of the note, and the UCC for the further proposition that transfer of possession of the note to the plaintiff automatically transferred possession of the mortgage.

The “Attorney Statement” also chronicles that the indorsement of the note was “later memorialized” by the assignment of mortgage dated May 18, 2008, which was later recorded. Anecdotally, although the assignment is dated May 18, 2008, the notary on the assignment is dated May 1, 2008.

Regarding the statutory notice required by RPAPL § 1303, the Attorney Statement states that counsel for the plaintiff provided the process server with the summons and complaint, printed on white paper, together with the notice required by RPAPL § 1303 (a), referring to the attached “Exhibit G”. That exhibit contains a two-page yellow notice with language required by § 1303 by an amendment to the statute that did not take effect until August 5, 2008 (L. 2008, c. 472, §1, eff. August 5. 2008). The action was commenced on May 8, 2008.

The affidavit of service indicates that service of the summons and complaint and § 1303 notice was made by serving a person of suitable age and discretion, one Nancy Engelhardt. Engelhardt is described in the affidavit of service as a co-occupant female, approximately 31 to 39 years of age, 5’4″ to 5′ 7″ tall, 125 to 149 pounds with red hair. The Attorney Statement claims that none of the defendants answered the complaint with the exception of Nicholson, who appeared and requested notice of the application. Based on the foregoing, the plaintiff seeks a new Order of Reference.

Defendant’s Opposition and Cross Motion

The cross motion seeks an Order compelling the acceptance of the Answer previously served upon the plaintiff, dismissing the complaint for the failure to comply with RPAPL § 1303, and denying the plaintiffs motion for a judgment of foreclosure and granting the defendant summary judgment dismissing the complaint. Two grounds for the relief sought include the failure to fulfill a condition precedent to suit, i.e., the service of a § 1303 notice, and the plaintiff’s lack of standing to commence the action.

According to the attorney for Nicholson, even before the defendant’s default, she has been pursuing a loan modification and has provided a voluminous number of documents toward that goal. The defendant denies that the summons and complaint with the required § 1303 notice was ever properly served upon her. In an affidavit dated August 1, 2013, Nicholson denied that she ever received the notice and challenges that the pleadings and the required notice were ever served on Engelhardt who she describes as 5′ 2″ or less, middle-aged, and very thin, weighing much less than the 125-149 pounds as reported by the process server in the affidavit of service. Nicholson also denied that she ever received the required § 1303 notice with any of the copies of the summonses and complaints that were subsequently mailed or left at her home.

Nicholson also attested that the § 1303 notice accompanying the judgment of foreclosure that was ultimately withdrawn on October 18, 2010, is not the same § 1303 notice that is attached as an Exhibit to the instant motion for a new Order of Reference. A review of the plaintiffs withdrawn motion for a Judgment of Foreclosure and Sale confirms this. The “Attorney Statement in Reply/Opposition to Cross-Motion”, dismisses the discrepancy in the § 1303 notices attached to the withdrawn Judgment of Foreclosure and the pending motion for a new Order of Reference, respectively.

The affidavit of service indicates that service on Nicholson was complete on May 20, 2008. By email to Tracy Fourtner of the Baum law firm on July 11, 2008, defense counsel requested an extension of time to answer the complaint until August 15, 2008. Defense counsel affirms that Tracy Fourtner of the Baum law firm told her that the law firm was considering discontinuing the action because the parties were entering into an agreement. Eventually Kathleen Bartkus of the Baum law firm responded by email to defense counsel’s request for an extension to answer: “please be advised our file is on hold due to your client has entered into a forbearance plan. Please advise if you still intend on answering the complaint. Also please forward a signed Notice of Appearance.” Although defense counsel filed a Notice of Appearance, the defendant claims never to have received a forbearance agreement.

By Order to Show Cause signed by this Court dated November 12, 2009, the defendant requested that the Court grant leave to file an Answer pursuant to CPLR 3012(d), vacate any order or judgment previously granted, and order a settlement conference pursuant to CPLR 3408. A proposed Verified Answer was annexed to the Order to Show Cause. The defendant’s Order to Show Cause was submitted at a time when the second motion for an Order of Reference was pending. According to the Court’s internal case management system, it appears that the movant failed to file the signed Order to Show Cause with Special Term. The defendant disputes this and provides proof of filing and service on the cross motion. In any event, the defendant’s motion for leave to file an Answer and schedule a settlement conference, was never marked fully submitted for a decision. The plaintiff was granted an Order of Reference on December 18, 2009. Some time after the Order of Reference was granted, at the defendant’s request, the Court scheduled a settlement conference for April 15, 2010.

At that point, defense counsel asserts that plaintiff’s counsel agreed to accept the Answer that was originally annexed to the November, 2009 Order to Show Cause. The Answer was mailed to the Baum law firm on April 15, 2010, the same day as the first settlement conference. In the Answer, the defendant asserted the affirmative defense of lack of standing and the plaintiff’s failure to provide the statutory notice required by RPAPL § 1303, among other defenses. According to the information maintained by the Court’s computerized database, foreclosure settlement conferences were held in this Court’s Specialized Mortgage Foreclosure Conference Part on April 15, 2010, June 16, 2010, and November 17, 2010.

The plaintiff moved for a judgment of foreclosure and sale on August 10, 2010. It is undisputed that the plaintiff moved for a judgment of foreclosure while the defendant was submitting documents to the plaintiff for review of a loan modification. Although the plaintiff sought a default judgment, the attorney fee application in the proposed judgment of foreclosure sought fees based on its attorneys’ appearance at settlement conferences and for “Review of answer”. By Order dated October 26, 2010, the plaintiff withdrew the motion for a Judgment of Foreclosure.

From October 26, 2010, until recently, this matter remained on the Court’s “shadow docket”^[1]. By Order dated May 17, 2013, the Court directed the plaintiff to either proceed with the action or discontinue it. The Order provided that upon the plaintiff’s failure to act within ninety days, the Court “may” dismiss the action; the Order did not make a dismissal automatic upon the expiration of the ninety day period. In any event, by Notice of Motion dated May 13, 2013, the plaintiff moved for a new Order of Reference.

Defendant’s Excuse for the Default Reasonable

With respect to so much of the plaintiff’s motion for a new Order of Reference, the motion is denied. In an action to foreclose a mortgage, the plaintiff must establish its prima facie entitlement to judgment as a matter of law by producing the mortgage, the unpaid note, and evidence of default (see Deutsche Bank Nat. Trust Co. v. Whalen, 107 A.D.3d 931, 969 N.Y.S.2d 82 [2d Dept. 2013], citing GRP Loan, LLC v. Taylor, 95 A.D.3d 1172, 1173, 945 N.Y.S.2d 336; Deutsche Bank Natl. Trust Co. v. Posner, 89 A.D.3d 674, 674-675, 933 N.Y.S.2d 52). Where standing is put into issue by the defendant, “the plaintiff must prove its standing in order to be entitled to relief” (U.S. Bank, N.A. v. Collymore, 68 A.D.3d 752, 753, 890 N.Y.S.2d 578; see Wells Fargo Bank Minn., N.A. v. Mastropaolo. 42 A.D.3d 239, 242, 837 N.Y.S.2d 247).

“In a mortgage foreclosure action, a plaintiff has standing where it is both the holder or assignee of the subject mortgage and the holder or assignee of the underlying note at the time the action is commenced” (Bank of N.Y. v. Silverberg, 86 A.D.3d 274, 279, 926 N.Y.S.2d 532; see Deutsche Bank Natl. Trust Co. v. Spanos, 102 A.D.3d 909, 911, 961 N.Y.S.2d 200; U.S. Bank, N.A. v. Collymore, 68 A.D.3d at 753, 890 N.Y.S.2d 578). “Either a written assignment of the underlying note or the physical delivery of the note prior to the commencement of the foreclosure action is sufficient to transfer the obligation” (Deutsche Bank Natl. Trust Co. v. Spanos, 102 A.D.3d at 912, 961 N.Y.S.2d 200 [internal quotation marks and citations omitted]; see HSBC Bank USA v. Hernandez, 92 A.D.3d 843, 844, 939 N.Y.S.2d 120; Bank of N.Y. v. Silverberg, 86 A.D.3d at 281, 926 N.Y.S.2d 532; U.S. Bank, N.A. v. Collymore, 68 A.D.3d at 754, 890 N.Y.S.2d 578).

The plaintiff maintains that the defendant’s failure to raise its alleged lack of standing as an affirmative defense in an answer or in a timely motion to dismiss the complaint constituted a waiver of the defense (see generally EM>Wells Fargo Bank Minn., N.A. v. Mastropaolo, 42 A.D.3d at 250). otably, the plaintiff submitted an “Attorney Statement in Reply/Opposition to the Cross-Motion” dated August 7, 2013, [“the Reply Statement”], rather than an attorney’s affirmation. Plaintiff’s attorney submitted no evidence controverting defense counsel’s assertion in her affirmation that in response to counsel’s request for an extension of time to answer in July of 2008, 1) Tracy Fourtner of the Baum law firm told counsel that the Baum law firm was considering discontinuing the action because the parties were entering into an agreement, and 2) on the day of the first settlement conference on April 15, 2010, plaintiff’s counsel accepted the defendant’s Answer that had first been provided as an attachment to the November, 2009 Order to Show Cause to compel acceptance of the Answer.

Counsel’s unsworn and conclusory “Reply Statement” asserting that defense counsel’s affirmation is bald and self-serving, and fails to demonstrate an agreement to accept a late Answer, is not based on personal knowledge, lacks evidentiary value, and is insufficient to support the plaintiff’s motion for a new Order of Reference or to defeat the defendant’s cross motion (Zuckerman v City of New York, 49 N.Y.2d 557, 427 N.Y.S.2d 595, 404 N.E.2d 718 [1980]; Assets Recovery 26 LLC v Rivera, 39 Misc.3d 1240(A), 2013 WL 2996135 [N.Y. Sup.]; see also LaSalle Bank, NA v. Pace, 100 A.D.3d 970, 970-971, 955 N.Y.S.2d 161 [2d Dept. 2012] [stating that attorney affirmation filed in compliance with Administrative Order 548-10, as supplemented by Administrative Order 431-11, is not itself substantive evidence supporting summary judgment] ).

The Reply Statement simply dismisses its predecessor law firm’s emails referring to the fact that the “tile [wa]s on hold” and that the parties were “enter[ing] into a forebearance plan”. It bears repeating that plaintiff’s attorney’s Reply Statement is not affirmed, is not based on counsel’s personal knowledge, and relies on no evidence whatsoever to refute the defendant’s assertions.

Under the circumstances, the Court concludes that even assuming that the defendant defaulted in answering the complaint, under the circumstances as outlined above, the defendant has established a reasonable excuse for a default in answering (Braynin v. Dunleavy, 109 A.D.3d 571, 970 N.Y.S.2d 611 [2d Dept. 2013]). Thus, the issue of the plaintiffs standing to commence the action is properly before the Court (Homecomings Financial, LLC v Guldi, 108 A.D.3d 506, 508, 969 N.Y.S.2d 470 [2d Dept. 2013]).

This case is distinguishable from those cases where a borrower relies on an unsubstantiated loan modification to excuse a default (compare Deutsche Bank Nat. Trust Co. v. Gutierrez, 102 A.D.3d 825, 958 N.Y.S.2d 472 [2d Dept. 2013]). Here, no evidence has been produced to refute the defendant’s assertions that the parties were working toward a loan modification at least until the last foreclosure settlement conference in November of 2010. Thereafter, there was no further action on the part of the plaintiff until the Court sua sponte calendared the matter for a status conference in May of this year and essentially insisted that the plaintiff “fish or cut bait”. It is also telling, and uncontradicted, that in the plaintiffs fee application that was part of the withdrawn Judgment of Foreclosure, the plaintiffs attorney included charges for attending the 2010 settlement conferences and for “Review of answer”. Thus, all the direct and circumstantial evidence supports the defendant’s version of what transpired and in the exercise of this Court’s discretion constitutes a reasonable excuse for the defendant’s default in answering the complaint. (cf. Maspeth Federal Savings & Loan Ass’n, 77 A.D.3d 889, 909 N.Y.S.2d 403 [2d Dept. 2010]).

Defendant’s Meritorious Defense

Where standing is put into issue by the defendant, “the plaintiff must prove its standing in order to be entitled to relief’ (U.S. Bank, N.A. v. Collymore, 68 A.D.3d 752, 753, 890 N.Y.S.2d 578; see Wells Fargo Bank Minn., N.A. v. Mastropaolo, 42 A.D.3d 239, 242, 837 N.Y.S.2d 247). The plaintiff has failed to demonstrate that it had standing when it commenced the action because there is no proof that the plaintiff was in possession of the subject note when the action was commenced. The “Attorney Statement” refers to the Patridge affidavit to establish the plaintiff’s possession but this bootstrapping argument fails. Patridge, a Vice President for the loan servicer, states “[t]he plaintiff is the holder of the note and Chase is the servicer of the loan and is authorized to act on behalf of the holder of the Note.”

The Patridge affidavit does not say that the plaintiff was the holder of the note when the action was commenced. The affidavit also lacks any information about the promissory note’s delivery to the plaintiff (see HSBC Bank USA v Hernandez, 92 A.D.3d 843, 939 N.Y.S.2d 120 [2d Dept. 2012]; Homecomings Financial, LLC v. Guldi, 108 A.D.3d 506, 508-509, 969 N.Y.S.2d 470 [2d Dept. 2013] ). In any event, the Patridge affidavit did not give factual details as to the physical delivery of the note and, thus, was insufficient to establish that the plaintiff had physical possession of the note at any time (Id. at 509, citing Deutsche Bank Natl. Trust Co. v. Haller, 100 A.D.3d 680, 954 N. Y. S.2d 551; HSBC Bank USA v. Hernandez, supra; Aurora Loan Servs., LLC v. Weisblum, 85 A.D.3d 95, 109, 923 N.Y.S.2d 609).

Moreover, the critical proposition upon which the plaintiffs entire argument rests is not without doubt. The mostly blank and undated piece of paper with nothing but a purported signature of “Michael Koch” as Vice President, attached as movant’s Exhibit B, does not demonstrate that the plaintiff was the holder of the subject note when the action was commenced (Assets Recovery 26 LLC v Rivera, 39 Misc.3d 1240(A), 2013 WI, 2996135 [N.Y. Sup.] Deutsche Bank National Trust Co. v Haller, 100 A.D.3d 680, 954 N.Y.S.2d 551 [2d Dept. 2012]).

Thus, even assuming that the previous counsel for the plaintiff did riot agree to accept the defendant’s late Answer on April 15, 2010, the Court concludes that the Answer is deemed served on the plaintiff as of that date as the defendant has established both a reasonable excuse for the failure to Answer and a meritorious defense (see Equicredit Corp. of America v. Campbell, 73 A.D.3d 1119, 900 N.Y.S.2d 907 [2d Dept. 2010]).

RPAPL § 1303

In First National Bank of Chicago v. Silver, (73 A.D.3d 162, 899 N.Y.S.2d 256 [2d Dept 2010] ), the Appellate Division Second Department found that compliance with RPAPL § 1303, which mandates notice to a mortgagor under the Home Equity Theft Prevention Act (REAL PROPERTY LAW § 265-a “HETPA”), is a mandatory condition precedent to foreclosure, compliance with which must be established by plaintiff. The failure to demonstrate compliance is not an affirmative defense, but may be raised at any time. Id. at 166. The Silver Court held that plaintiffs failure to demonstrate compliance with the notice requirement mandates dismissal of the action (73 A.D.3d at 169, 899 N.Y.S.2d 256; see also Aurora Loan Services, LLC v. Weisblum, 85 A.D.3d 95, 102-103, 923 N.Y.S.2d 609 [2d Dept. 2011]).

Here, the defendant denies that she was ever served with the statutorily required notice. Unlike the defendant in Aurora Loan Services, LLC v. Weisblum, supra, Nicholson’s is not a bare and unsubstantiated denial of receipt which is admittedly insufficient to rebut the presumption of proper service created by an affidavit of service (see Deutsche Bank Nat. Trust Co. v. White, ___ N.Y.S.2d ___. 2013 WL 5539360 [2d Dept. 2013]).

Where a defendant submits a sworn denial of receipt of papers that allegedly were served, which contains specific facts to rebut the statements in the process server’s affidavit, it is generally sufficient to rebut the presumption of proper service, and necessitates an evidentiary hearing (see Engel v. Boymelgreen, 80 A.D.3d 653, 654, 915 N.Y.S.2d 596; Tikvah Enters., LLC v. Neuman, 80 A.D.3d at 749, 915 N.Y.S.2d 508; City of New York v. Miller, 72 A.D.3d at 727, 898 N.Y.S.2d 643).

Contrary to plaintiffs attorney’s “Reply Statement”, Nicholson provided an affidavit dated August 1, 2013, with a description of the individual purportedly served pursuant to CPLR 308 (2) that is substantially at odds with the process server’s description of the person served in the affidavit of service (Emigrant Mortg. Co., Inc. v. Westervelt, 105 A.D.3d 896, 964 N.Y.S.2d 543 [2d Dept. 2013]).

In addition, the plaintiff makes little or no attempt to address the defendant’s proof that the copy of the § 1303 notice that supported the withdrawn judgment of foreclosure and sale is not the same notice as the one annexed to the moving papers for a new Order of Reference. As discussed in detail in a scholarly article authored by Mark C. Dillon, Associate Justice of the Appellate Division of the New York State Supreme Court, Second Judicial Department, the RPAPL portion of HETPA, RPAPL § 1303 was enacted in 2006, originally effective as of February 1, 2007, and underwent some tweaking by amendments enacted in 2007, 2008, 2009, 2010, and 2011 (see “Unsettled Times Make Well-Settled Law: Recent Developments in New York State’s Residential Mortgage Foreclosure Statutes and Case Law, 76 Albany Law Review 1085, 1114 [2012-2013]). The plaintiff has failed to establish that it satisfied the statutory-specific notice to the defendant with the service of the summons and complaint that was in effect at the time the action was commenced. For that reason alone, the plaintiff’s motion for a new Order of Reference is denied.

Cross Motion for Summary Judgment

So much of the defendant’s motion to dismiss the complaint pursuant to CPLR 3211, or alternatively for summary judgment, is denied. As discussed above, questions of fact exist as to whether the note was physically delivered to the plaintiff prior to the commencement of the action and when, if at all, the note was endorsed (Deutsche Bank National Trust Co. v Haller, 100 A.D.3d 680, 954 N.Y.S.2d 551 [2d Dept. 2012], citing Deutsche Bank National Trust Co. v Rivas, 95 A.D.3d 1061, 945 N.Y.S.2d 328). Questions of fact also exist as to whether the plaintiff complied with RPAPL § 1303 that was in effect when the action was commenced (First National Bank of Chicago v Silver, 73 A.D.3d 162, 899 N.Y.S.2d 256 [2d Dept. 2010]). Although the Court concludes that the notice annexed to the plaintiff’s motion did not comply, the notice annexed to the withdrawn Judgment of Foreclosure may have. Finally, an issue of fact also exists as to whether the plaintiff failed to provide the defendant with thirty days written notice of the defendant’s default under the mortgage precluding summary judgment (G.E. Capital Mort. Services Inc. v Mittleman, 238 A.D.2d 471, 656 N.Y.S.2d 645 [2d Dept. 1997]).

[1] See Andrew Keshner, Advocates Seek to Eliminate Foreclosure `Shadow Docket’, N.Y.L.J., Mar. 27, 2012, at 1.

THE BANK OF NEW YORK MELLON F/K/A THE BANK OF NEW YORK 3476 STATEVIEW BOULEVARD FT. MILL, SC 29715, Plaintiff,
v.
CARL DEANE, JESSE DEANE, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. AS NOMINEE FOR RBC MORTGAGE COMPANY, NEW YORK CITY ENVIRONMENTAL CONTROL BOARD, NEW YORK CITY TRANSIT ADJUDICATION BUREAU, NEW YORK MERCHANTS PROTECTIVE CO., INC., JOHN DOE (SAID NAME BEING FICTITIOUS, IT BEING THE INTENTION OF Plaintiff TO DESIGNATE ANY and ALL OCCUPANTS OF PREMISES BEING FORECLOSED HEREIN, and ANY PARTIES, CORPORATIONS OR ENTITIES, IF ANY, HAVING OR CLAIMING AN INTEREST OR LIEN UPON THE MORTGAGED PREMISES.), Defendants.

JACK M. BATTAGLIA, J.

In this mortgage foreclosure action commenced on July 2, 2009, plaintiff The Bank of New York Mellon f/k/a The Bank of New York moves for an order, among other things, granting summary judgment on its Complaint as against defendants Carl Deane and Jesse Deane, the mortgagors of the subject property; judgment by default against non-appearing defendants Mortgage Electronic Registration Systems, Inc. as Nominee for RBS Mortgage Company, New York City Environmental Control Board, New York City Transit Adjudication Bureau, New York Merchants Protective Co., Inc., and John Doe; and issuing an order of reference.

“In order to establish prima facie entitlement to summary judgment in a foreclosure action, a plaintiff must submit the mortgage and unpaid note, along with evidence of default.” (Capstone Bus Credit, LLC v Imperia Family Realty, LLC, 70 AD3d 882, 883 [2d Dept 2010]; see also GRP Loan, LLC v Taylor, 95 AD3d 1172, 1173-74 [2d Dept 2012]; U.S. Natl. Assn. Tr U/S 6/01/98 [Home Equity Loan Trust 1998-2] v Alvarez, 49 AD3d 711, 711 [2d Dept 2008].) Plaintiff “must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact.” (See Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986].) Plaintiff must tender “evidentiary proof in admissible form.” (See Zuckerman v New York, 49 NY2d 557, 562 [1980].)

“When the issue of standing is raised by a defendant, a plaintiff must prove its standing in order to be entitled to relief.” (GRP Loan, LLC v Taylor, 95 AD3d at 1173.) Here, in their Verified Answer, defendants Carl Deane and Jesse Deane (the “Deane Defendants”) allege as a Second Affirmative Defense that “Plaintiffs [sic] … lack standing and capacity to sue and are unknown creditors to Defendants” (see Verified Answer ¶ 5.)

“On any application for judgment by default, the applicant shall file proof of service of the summons and complaint, … and proof of the facts constituting the claim, the default and the amount due.” (CPLR 3215 [f].) The proof must establish a prima facie case. (See Walley v Leatherstocking Healthcare, LLC, 79 AD3d 1236, 1238 [3d Dept 2010]; Green v Dolphy Construction Co., Inc., 187 AD2d 635, 637 [2d Dept 1992]; Silberstein v Presbyterian Hosp. in the City of NY, 96 AD2d 1096, 1096 [2d Dept 1983]; see also Woodson v Mendon Leasing Corp., 100 NY2d 62, 71 [2003] [“viable cause of action”].) “There is no mandatory ministerial duty to enter a default judgment against a defaulting party.” (Superior Dental Care, P.C. v Hoffman, 81 AD3d 632, 634 [2d Dept 2011] [internal quotation marks and citation omitted].)

Where a defendant fails to answer the complaint and does not make a pre-answer motion to dismiss the complaint, the defendant is deemed to have “waived the defense of lack of standing.” (See HSBC Bank USA, N.A. v Taher, 104 AD3d 815, 817 [2d Dept 2013].)

In the context of a mortgage foreclosure action, “standing” must mean entitlement to enforce the note and mortgage. One might question whether a plaintiff who is not entitled to enforce the note and mortgage should be able to obtain a judgment by default, whereas that plaintiff would be required to make a prima facie showing on its entitlement to enforce where it seeks summary judgment against a defendant who merely raises the issue. That is, however, the current law in the Second Department.

As recently summarized by the Second Department:

“In order to commence a foreclosure action, the plaintiff must have a legal or equitable interest in the subject mortgage … A plaintiff has standing where it is both the holder or assignee of the subject mortgage and the holder or assignee of the underlying note prior to commencement of the action with the filing of the complaint … Either a written assignment of the underlying note or the physical delivery of the note prior to the commencement of the foreclosure action is sufficient to transfer the obligation, and the mortgage passes with the debt as an inseparable incident.” (GRP Loan, LLC v Taylor, 95 AD3d at 1173 [internal quotation marks and citations omitted] [emphasis added].)

“As a general matter, once a promissory note is tendered to and accepted by an assignee, the mortgage passes as an incident to the note.” (Bank of New York v Silverberg, 86 AD3d 274, 280 [2d Dept 2011.) “By contrast, a transfer of the mortgage without the debt is a nullity, and no interest is acquired by it’.” (Id. [quoting Merritt v Bartholick, 36 NY 44, 45 (1867)].) “[A]n assignment of a note and mortgage need not be in writing and can be effectuated by physical delivery.” (Id.)

This action rests on an Adjustable Rate Note dated April 27, 2005 in the principal amount of $340,000, executed by the Deane Defendants in favor of RBC Mortgage Company (“Note”), and, as security for payment of the Note, a Mortgage of the same date on real property at 9315 Schenck Street, Brooklyn. The Note was specially indorsed, without a date, to the order of JPMorgan Chase Bank, N.A., as Trustee. The Mortgage identified Mortgage Electronic Registration Systems, Inc. (“MERS”) “acting solely as a nominee for Lender and Lender’s successors and assigns,” and as “Mortgagee of Record.”

In its Complaint, plaintiff The Bank of New York Mellon alleges that it is “the owner and holder of the note and mortgage being foreclosed” (see Complaint, FIRST), and that the mortgage was assigned to it “by assignment dated the 17th day of June, 2009” (see id., THIRD.) Plaintiff submits with this motion a copy of an Assignment of Mortgage dated June 17, 2009 from MERS to Plaintiff, transferring the Mortgage given by the Deane Defendants to RBC Mortgage Company. The Assignment of Mortgage does not purport to assign the underlying Note, nor is there any showing that MERS would have had the power or authority to do so. (See Bank of New York v Silverberg, 86 AD3d at 281-82.) There is no evidence of “MERS’s right to, or possession of, the actual underlying promissory note” (see id. at 279), and, if based only upon the Assignment of Mortgage, Plaintiff would lack standing to maintain this foreclosure action (see id. at 283.)

Plaintiff also submits however (1) excerpts from a Pooling and Servicing Agreement dated as of July 1, 2005 among Structured Asset Mortgage Investments II Inc. as “Depositor,” JP Morgan Chase, National Association as “Trustee,” Wells Fargo Bank, National Association as “Master Servicer” and “Securities Administrator,” and EMC Mortgage Corporation as “Seller”; a copy of an Agreement of Resignation and Assumption dated as of October 1, 2006 by and among JPMorgan Chase, National Association as “Resigning Trustee” and The Bank of New York as “Successor Trustee”; and affidavit of Angela Frye, described as “a Vice President Loan Documentation for Wells Fargo Bank, N.A…. d/b/a Americas Servicing Company, as servicing agent for The Bank of New York Mellon, fka The Bank of New York as Successor in interest to JP Morgan Chase Bank NA as Trustee for Structured Asset Mortgage Investments II Inc. Bear Sterns ALT-A Trust 2005-7, Mortgage Pass-Through Certificates, Series 2005-7.”)

Neither the affidavit of Angela Frye, nor the affirmation of counsel, nor counsel’s memorandum of law, attempts to describe the transactions purportedly reflected in the submitted agreements, nor does any of them cite to specific language or provisions that purportedly have the legal effects ascribed to them in conclusory fashion. Indeed, the cursory treatment of the standing question in the memorandum of law evidences a misunderstanding of the general law of negotiable instruments in its equation of the status as “holder” to mere possession of the instrument (see Plaintiff’s Memorandum of Law in Support of its Motion for Summary Judgment and to Amend the Caption Nunc Pro Tunc [“Plaintiff’s Memorandum”] at 7-8.)

The core of the law of negotiable instruments is found in Article 3 of the Uniform Commercial Code, adopted in New York in 1962 (“NYUCC”.) In 1990, The National Conference of Commissioners on Uniform State Laws proposed a revision of Article 3 that has been adopted in all of the states except New York. Amendments to Revised Article 3 were proposed in 2002, and have been adopted in 10 states. The provisions of these later versions of Article 3 (“Revised UCC”) can be helpful in interpreting and applying the former version, still effective in New York. (See Lawyers’ Fund for Client Protection v Bank Leumi Trustm Co., 94 NY2d 398, 406 [2000]; Gabriel v Kost, 2001 NY Slip Op 40288 [U] [Civ Ct, Kings County 2001].)

New York’s version of Article 3 does not in terms define “standing” or otherwise set out those persons who are entitled to enforce a “note” (see NYUCC § 3-104 [2] [d]) or a “draft” (see NYUCC § 3-104 [2] [a]), the two most common forms of negotiable instruments. Revised UCC Article 3 sets out those persons entitled to enforce an instrument, including, in the first instance, “the holder of the instrument” (see Revised UCC § 301 [i]), and “a nonholder in possession of the instrument who has the rights of a holder” (see Revised UCC § 301 [ii].)

The concept of a “holder” and the related concept of “negotiation” are central to one of the unique features of the law of negotiable instruments, i.e., the concept of “holder in due course” (see NYUCC § 3-302) and the immunity from claims and defenses that comes with that status (see NYUCC § 3-305.) “The holder of an instrument … may … enforce payment in his own name.” (See NYUCC § 3-301.)

A “holder” is “a person who is in possession of … an instrument … issued or indorsed to him or to his order or to bearer or in blank.” (See NYUCC § 1-201 [20].) “Negotiation is the transfer of an instrument in such form that the transferee becomes a holder.” (NYUCC § 3-202 [1].) The mechanism of negotiation depends upon the form in which the instrument was originally made or drawn, or in which it has been subsequently indorsed (see NYUCC § 3-204.) Thus, “[i]f the instrument is payable to order it is negotiated by delivery with any necessary indorsement; if payable to bearer it is negotiated by delivery.” (NYUCC § 3-202 [1].)

Here, the Note when made was payable to the order of RBC Mortgage Company (see NYUCC § 3-110 [1]), and was specially indorsed to JP Morgan Chase Bank, N.A. as Trustee (see NYUCC § 3-204 [1].) Assuming that the Note was also delivered to JP Morgan Chase, the Note was negotiated to JP Morgan Chase, which became its holder and entitled to enforce it. “Delivery” of a negotiable instrument “means voluntary transfer of possession.” (See NYUCC § 1-201 [14].)

“Any instrument specially indorsed becomes payable to the order of the special indorsee and may be further negotiated only by his indorsement.” (NYUCC § 3-204 [1].) Assuming, therefore, delivery to JP Morgan Chase Bank, N.A., further negotiation, and conferring of status as holder of the Note, required the indorsement of JP Morgan Chase Bank, N.A., either to the order of another special indorsee, or in blank, with no particular indorsee, in the latter case transforming the Note to an instrument payable to bearer that could be further negotiated “by delivery alone” (see NYUCC § 3-204 [2].)

It is clear that plaintiff The Bank of New York Mellon has not established that it is the holder of the Note. There is no indorsement on the Note by JP Morgan Chase Bank, N.A., and Plaintiff submits no evidence that the Note was ever delivered by the indorser, RBC Mortgage Company, to the indorsee, so that it could be further indorsed and negotiated by the indorsee.

It is also clear, however, that a person need not be the holder of an instrument in order to be a person entitled to enforce it. As noted above, an instrument may also be enforced by “a nonholder in possession … who has the rights of a holder” (see Revised UCC § 301 [ii].) “Transfer of an instrument vests in the transferee such rights as the transferor has therein.” (NYUCC § 3-201 [1].)

New York’s Article 3 does not contain a definition of “transfer.” Revised UCC § 3-203 (a) provides, “An instrument is transferred when it is delivered by a person other than the issuer for the purpose of giving to the person receiving delivery the right to enforce an instrument.” “The right to enforce an instrument and ownership of the instrument are two different concepts,” with ownership “determined by principles of the law of property, independent of Article 3.” (See Comment 1 to Revised UCC § 3-203.) Assuming a transfer “for value” (see NYUCC § 3-303), if the instrument is not then payable to bearer, the transferee has “the specifically enforceable right to have the unqualified indorsement of the transferor,” but “[n]egotiation takes effect only when the indorsement is made and until that time there is no presumption that the transferee is the owner.” (See NYUCC § 3-201 [3]; see also NYUCC § 3-307 [2].)

Language in recent Second Department decisions creates some question as to whether delivery of the instrument by the holder, and, therefore, possession by the putative transferee, is necessary to entitle the putative transferee to claim the rights of the holder, including entitlement to enforce the instrument. As quoted above, it is said that “[a] plaintiff has standing where it is … the holder or assignee of the underlying note prior to commencement of the action” (see GRP Loan, LLC v Taylor, 95 AD3d at 1173 [emphasis added].) Without a definition of transfer, Article 3 does not expressly address the question. Under Revised Article 3, the only occasions for allowing a person not in possession of an instrument to enforce it are where the instrument has been lost, destroyed or stolen, or where the instrument has been paid by mistake and the payment is recovered. (See Revised UCC § 3-301 [iii], §§ 3-309, 3-418 [d].)

Further complicating the issue of entitlement to enforce an instrument are the statements, quoted above, that “[e]ither a written assignment of the underlying note or the physical delivery of the note … is sufficient to transfer the obligation” (see GRP Loan, LLC v Taylor, 95 AD3d at 1173 [internal quotation marks and citation omitted]); and that “an assignment of a note … can be effectuated by physical delivery” (see Bank of New York v Silverberg, 86 AD3d at 45.)

New York’s Uniform Commercial Code speaks of “transfer” of a negotiable instrument that is not a negotiation (see NYUCC § 3-201), as did the Negotiable Instruments Law on which it was based (see Negotiable Instruments Law § 79, quoted in Meuer v Phenix Nat. Bank, 94 AD 331, 334-35 [1st Dept 1904], aff’d 183 NY 511 [1905]), while New York courts have spoken primarily in terms of “assignment,” as did, apparently, the common law “law-merchant.” And so, “[w]hen … [a negotiable ] instrument is transferred but without an indorsement, it is treated as a chose in action assigned to the purchaser [, who] … acquires all the title of the assignor and may maintain an action thereon in his own name” (see Goshen Nat. Bank v Bingham, 118 NY 349, 354 [1890]; see also Wagner v Grimm, 169 NY 421, 428 [1902].) Indeed, quotation of the Code, or even its citation, has virtually disappeared from the caselaw on this part of negotiable instruments law, at least where addressed in mortgage foreclosure actions.

Perhaps as a result, the meaning of terms that have particular effect in negotiable instruments law can become blurred. For example, in a recent opinion the Second Department held that the plaintiff “failed to establish how or when it became the lawful holder of the note either by delivery or valid assignment.” (See Citimortgage, Inc. v Stosel, 89 AD3d 887, 888 [2d Dept 2011]; see also Deutsche Bank Nat. Trust Co. v Rivas, 95 AD3d 1061 [2d Dept 2012]; Morrison v Sheman, 166 AD 264, 266 [1st Dept 1915] [“plaintiff holds the bond and mortgage by written assignment”].) Whatever the rights of a person to enforce an instrument by reason of delivery or assignment, a person is not a “holder” by reason of delivery or assignment alone, unless delivery is made of a bearer instrument.

Nonetheless, there are numerous recent Second Department opinions in mortgage foreclosure actions stating that a plaintiff has standing where, prior to commencement of the action, it is “the holder or assignee of the underlying note” and/or there has been “a written assignment of the underlying note or the physical delivery of the note.” (See, for example, Homecomings Financial, LLC v Guldi, 2013 NY Slip Op 5048 [2d Dept, July 2, 2013]; Deutsche Bank Nat. Trust Co. v Whalen, 2013 NY Slip Op 4770 [2d Dept, June 26, 2013]; Deutsche Bank Nat. Trust Co. v Spanos, 102 AD3d 909, 911-12 [2d Dept 2013]; Deutsche Bank Nat. Trust Co. v Haller, 100 AD3d 680, 682 [2d Dept 2012]; GRP Loan, LLC v Taylor, 95 AD3d at 1173; HSBC Bank USA v Hernandez, 92 AD3d 843, 843-44 [2d Dept 2012]; Deutsche Bank Nat. Trust Co. v Barnett, 88 AD3d 636, 637 [2d Dept 2011]; Citimortgage, Inc. v Stosel, 89 AD3d at 888; Bank of New York v Silverberg, 86 AD3d at 281; Aurora Loan Services, LLC v Weisblum, 85 AD3d 95, 108 [2d Dept 2011]; U.S. Bank, N.A. v Collymore, 68 AD3d 752, 753-54 [2d Dept 2009]; see also La Salle Bank Natl. Assn. v Ahearn, 59 AD3d 911, 912 [3d Dept 2009].)

If the plaintiff asserts standing based upon a written assignment executed after the commencement of the action, the plaintiff must also prove physical delivery of the note before commencement. (See Wells Fargo Bank, N.A. v Marchione, 69 AD3d 204, 210 [2d Dept 2009]; La Salle Bank Natl. Assn v Ahearn, 59 AD3d at 912.) Indeed, where the plaintiff “establish[es] its standing as the holder of the note and mortgage by physical delivery prior to commencement of the action,” it is unnecessary to “address the validity of [a] subsequently executed document assigning the mortgage and note.” (See Deutsche Bank Nat. Trust Co. v Whalen, 2013 NY Slip Op 4770.) Such proof must consist of “factual details as to the physical delivery of the note.” (See Homecomings Financial, LLC v Guldi, 2013 NY Slip Op 5048; Deutsche Bank Nat. Trust Co. v Haller, 100 AD3d at 682; HSBC Bank USA v Hernandez, 92 AD3d at 844; Deutsche Bank Nat. Trust Co. v Bernett, 88 AD3d at 638 [“factual details concerning when the plaintiff received physical possession of the note”]; see also Aurora Loan Services, LLC v Weisblum, 85 AD3d at 109; U.S. Bank, N.A. v Collymore, 68 AD3d at 754.)

Physical delivery of a note is sufficient as a transfer “without a written instrument of assignment” (see Flyer v Sullivan, 284 AD 697, 699 [1st Dept 1954]), or, indeed “without any written words of transfer at all” (see Blake v Weiden, 291 NY 134, 139 [1943].) But, again, “delivery” requires “voluntary transfer of possession” (see NYUCC § 1-201 [14].) Moreover, under Revised Article 3, “An instrument is transferred when it is delivered … for the purpose of giving to the person receiving delivery the right to enforce the instrument” (see Revised UCC § 3-203 [a].) Although the qualification is not found in New York’s Article 3, which contains no definition of “transfer,” this Court has seen nothing that would suggest that such a purpose need not accompany the “voluntary transfer of possession” (see NYUCC § 1-201 [14].) When there is no assignment or other “written words of transfer” (see Blake v Weiden, 291 NY at 139), evidence of such purpose might easily be found in the nature and structure of the overall or related transaction(s) between the transferor and the transferee.

Perhaps a more difficult question is whether an assignment alone, i.e., without possession of the note, is sufficient to constitute a “transfer,” so as to allow the transferee to enforce it. As just noted, Revised Article 3 would require delivery of the note (see Revised UCC § 3-203 [a]), and, as noted above, would allow enforcement of a note without possession only when the note is lost, stolen, or destroyed, or where it has been paid (see Revised UCC § 301 [iii].) Recent Second Department opinions can be read as holding that the assignment alone, without possession, is sufficient. (See GRP Loan LLC v Taylor 95 AD3d at 1174; Deutsche Bank Trust Co. v Codio, 94 AD3d 1040, 1041 [2d Dept 2012].)

This Court is aware of only one appellate decision that has recognized an assignee’s entitlement to enforce a note while expressly recognizing continued possession of the note by the assignor. In that case, the plaintiff had been assigned only one-third of the assignor’s interest under the note; the plaintiff was permitted to sue for his interest because he had joined his “co-assignees” in the action. (See Kronman v Palm Mgmt. Assocs. Ltd. Pshp., 276 AD2d 338, 338-39 [1st Dept 2000].)

Except, perhaps, where there is a common agent, it is not possible for more than one person to have possession of an instrument, which would explain why only an entire instrument can be negotiated (see NYUCC § 3-202 [3]; Hewett v Marine Midland Bank, N.A., 86 AD2d 263, 267 [2d Dept 1982].) Nonetheless, the result in the “co-assignees” case is supported by Blake v Weider (291 NY 134, 138 [1943]), although, in that case, the Court of Appeals found “at least a constructive delivery” to the three indorsees (see id. at 139.)

Requiring possession of the note even where there is an assignment would serve the important purpose of protecting the maker of the note who pays an assignee from a subsequent claim by a holder in due course (see NYUCC § 3-305), against whom a defense of discharge upon payment is not available (see NYUCC §§ 602, 603.) (See also National Bank of Bay Ridge v Albers, 244 AD 127, 128 [2d Dept 1935]; Morrison v Schmeman, 166 AD 264, 266 [1st Dept 1915].) To the contrary, allowing recovery on an assignment without possession would be inconsistent with current Article 3 protections that are imposed when enforcement is sought of a lost, destroyed or stolen instrument (see NYUCC § 3-804; Sills v Waheed Entrs., 253 AD2d 351, 352 [1st Dept 1998].)

The question is somewhat addressed in the Official Comment to Revised Article 3, § 3-203; Transfer of Instrument; Rights Acquired By Transfer:

“The right to enforce an instrument and ownership of the instrument are two different concepts … Ownership rights in instruments may be determined by principles of the law of property, independent of Article 3, which do not depend upon whether the instrument was transferred under Section 3-203. Moreover, a person who has an ownership right in an instrument might not be a person entitled to enforce the instrument. For example, suppose X is the owner and holder of an instrument payable to X. X sells the instrument to Y but is unable to deliver immediate possession to Y. Instead, X signs a document conveying all of X’s right, title, and interest in the instrument to Y. Although the document may be effective to give Y a claim to ownership of the instrument, Y is not a person entitled to enforce the instrument until Y obtains possession of the instrument. No transfer of the instrument occurs under Section 3-203 (a) until it is delivered to Y.” (Official Comment 1 to Revised UCC § 3-203.)

To allow an assignee to sue without possession of the note, therefore, would be inconsistent with Revised Article 3, and put New York out-of-step with the 49 states that have adopted the revision, including, in particular, a conception of “transfer” as “deliver[y] by a person other than its issuer for the purpose of giving to the person receiving delivery the right to enforce the instrument” (see Revised UCC § 3-203 [1].) That misstep, however, if such it is, has apparently already been taken. The caselaw quoted and cited above clearly speaks, in the disjunctive, of standing obtained by “assignment” or “physical delivery” of the note before commencement of the action; if “assignment” must be accompanied by possession of the note, then it seems little different from “physical delivery.” Indeed, where possession before commencement could be established, with a purpose to allow the transferee to enforce the instrument, the assignment would appear superfluous in most cases. There is no evidence that the Second Department has been using the terms synonymously.

One might reconcile these conflicting principles and policies to an extent by taking the Second Department at its words, and finding “standing” to commence and prosecute an action to enforce a note (and related mortgage) with proof only of an assignment before commencement, but to require surrender of the note at judgment, either after trial or accelerated by summary judgment (see CPLR 3212) or judgment by default (see CPLR 3215.) Pending further clarification from the Second Department, this Court will adopt that approach. (See National Bank of Bay Ridge v Albers, 244 AD at 128.)

Finally as to the requirements for “standing,” under New York’s Article 3, “Transfer of an instrument vests in the transferee such rights as the transferor has therein” (see NYUCC § 3-201 [1]; see also Revised UCC § 3-203 [b].) The common-law “assignment” framework utilized by New York courts is consistent. (See Wangner v Grimm, 169 NY 421, 428 [1902]; Goshen Nat. Bank v Bingham, 118 NY 349, 354 [1890]; Meuer v Phenix Nat. Bank, 94 AD 331, 334-39 [1st Dept 1904], aff’d 183 NY 511 [1905].) “It is elementary ancient law that an assignee never stands in a better position than his assignor.” (Matter of International Ribbon Mills [Arjan Ribbons, 36 NY2d 121, 126 [1975]; see also New York & Presbyt. Hosp. v Countrywide Ins. Co., 17 NY3d 586, 592 [2011].)

There is nothing in recent Second Department mortgage foreclosure caselaw that changes this. (See Bank of New York v Silverberg, 86 AD3d at 282.) Where a plaintiff, therefore, is not a holder of the note, but establishes “standing” pursuant to transfer, either by assignment or delivery, the plaintiff must show that its transferor had the right to enforce the note before transfer.

In sum, in the usual case, a plaintiff has “standing” to prosecute a mortgage foreclosure action where, at the time the action is commenced: (1) the plaintiff is the holder of the note (see NYUCC § 1-201 [20]); or (2) the plaintiff has possession of the note by delivery (see NYUCC § 1-201[14]), from a person entitled to enforce it, for the purpose of giving the plaintiff the right to enforce it; or (3) the plaintiff has been assigned the note, by a person entitled to enforce it, for the purpose of giving the plaintiff the right to collect the debt evidenced by the note, and the plaintiff tenders the note at the time of any judgment.

Here, Plaintiff The Bank of New York Mellon has not established prima facie with evidence in admissible form either assignment or delivery of the Note from a holder, sufficient to allow Plaintiff to enforce the Note and related Mortgage. The only “evidence” of assignment of the Note to Plaintiff are excerpts from a Pooling and Servicing Agreement consisting of a title page, a table of provisions and exhibits, and 11 pages of provisions, indicating a document of more than 76 pages. There are no signature pages, and, therefore, no authentication of the document by acknowledged signatures (see Prince, Richardson on Evidence § 9-101 [Farrell 11th Ed]; Stein v Doukas, 78 AD3d 1026, 1029 [2d Dept 2012]; NYCTL 1998-2 Trust v Santiago, 30 AD3d 572, 573 [2d Dept 2006] [“a private document offered to prove the existence of a valid contract cannot be admitted into evidence unless its authenticity and genuineness are first established“].)

Even ignoring the evidentiary threshold, the provision headed “Conveyance of Mortgage Loans to Trustee” states that “[t]he Depositor … sells, transfers and assigns to the Trust without recourse all its right, title and interest in and to … the Mortgage Loans identified in the Mortgage Loan Schedule,” but no Mortgage Loan Schedule is provided, and, in any event, the “Depositor” is Structured Asset Mortgage Investments II Inc., which is not shown to have had any power or authority to transfer the subject Note.

The Agreement of Resolution and Assumption between JP Morgan Chase Bank, National Association and The Bank of New York provides that JP Morgan as Resigning Trustee “assigns, transfers, delivers and confirms to [The Bank of New York as] Successor Trustee all right, title and interest in and to each of the Agreements” listed on a Scheduled A and “all rights, powers and trusts of the Resigning Trustee, as trustee or otherwise, under each of the Agreements,” but nowhere on Schedule A is the subject Note or Mortgage listed, nor is there any showing that any listed Agreement transferred the Note from JP Morgan to Plaintiff. (Also, only one of the two signatures to the Agreement of Resignation and Assumption is acknowledged.)

The affidavit of Angela Frye states that, “[t]o memorialize the transfer of the mortgage loan to Plaintiff, as successor trustee, a written assignment … was subsequently executed on or about June 17, 2009” (see ¶ 12), but, as stated above, the Assignment of Mortgage to Plaintiff by MERS, even if effective, says nothing about the Note, and a transfer of a mortgage does not carry the underlying note (see Bank of New York v Silverberg, 86 AD3d at 280.)

As to delivery and possession, the affidavit of Angela Frye states that “Wells Fargo’s regularly maintained records … reflect that both the Mortgage and Note were physically delivered to Wells Fargo … prior to commencement of this action … [and] further reflect that Wells Fargo … was in physical possession of the Note and Mortgage at the time this action was commenced,” but also states that “Plaintiff is in possession of the Promissory Note, … duly indorsed to JP Morgan Chase Bank, NA as Trustee” (see ¶ 11.) There are no details as to the delivery to Wells Fargo, and, if there was a subsequent delivery to Plaintiff, which would explain the apparent inconsistency, it is not described.

Moreover, the affiant, Angela Frye, does not assert any personal knowledge of delivery to, or possession by, either Wells Fargo or Plaintiff. She does not attach or describe any of Wells Fargo’s “regularly maintained records” on which she relies, nor render them admissible as evidence. (See JP Morgan Chase, N.A. v RADS Group, Inc., 88 AD3d 766, 767 [2d Dept 2011]; HSBC Bank USA, N.A. v Betts, 67 AD3d 735, 736 [2d Dept 2009]; Unifund CCR Partners v Youngman, 89 AD3d 1377, 1377-78 [4th Dept 2011]; Reiss v Roadhouse Rest., 70 AD3d 1021, 1024 [2d Dept 2010]; Lodato v Greyhawk North America, LLC, 39 AD3d 494, 495 [2d Dept 2007]; Whitfield v City of New York, 16 Misc 3d 1115, [A], 2007 NY Slip Op 51433 [U] [Sup Ct, Kings County 2007]; aff’d 48 AD3d 798 [2d Dept 2008].) She does not state that the “regularly maintained records” show delivery of the Note by JP Morgan Chase Bank (or anyone else), and, as noted above, there is no evidence that JP Morgan Chase Bank ever had possession of the Note.

Although Plaintiff’s failure to establish prima+ facie that it is entitled to enforce the Note and Mortgage is enough to require denial of its motion for summary judgment against the Deane Defendants (see Aurora Loan Serv., LLC v Weisblum, 85 AD3d at 108-10), denial of summary judgment is warranted on other grounds. The evidentiary deficiencies in the affidavit of Angela Frye, noted above with respect to delivery and possession of the Note, infect as well other elements of Plaintiff’s claim, including default, acceleration of the loan, and the amount due.

Section 22 of the Mortgage states that “Lender may require Immediate Payment in Full … only if all [specified] conditions are met,” including that “Lender sends … a notice” that complies with the Section. Giving the requisite notice of default is a condition precedent to acceleration, which is a requirement for seeking the equitable remedy of foreclosure. (See HSBC Mtge. Corp. [USA] v Gerber, 100 AD3d 966, 966-67 [2d Dept 2012]; Wells Fargo Bank, N.A. v Burke, 94 AD3d 980, 982-84 [2d Dept 2012]; G.E. Capital Mortg. Servs. v Mittleman, 238 AD2d 471, 471 [2d Dept 1997]; Moet, II, Inc. v McCarthy, 229 AD2d 876, 877 [3d Dept 1996];

Citimortgage, Inc. v Villatoro-Guzman, 2009 NY SlipOp 30983 [U], * 4 [Sup Ct, Suffolk County 2009]; Weitzel v Northern Golf, Inc., 18 Misc 3d 1134 [A], 2008 NY Slip Op 50305 [U], * 4- * 6 [Sup Ct, Livingston County 2008]; QMB Holdings, LLC v Escava Brothers, 11 Misc 3d 1060 [A], 2006 NY Slip Op 50322 [U], * 3 [Sup Ct, Bronx County 2006]; Manufacturers & Traders Trust Co. v Korngold, 162 Misc 2d 669 [Sup Ct, Rockland County 1994].)

Plaintiff submits no proof of service of the December 21, 2008 notice of default. (See HSBC Mtge. Corp. [USA] v Gerber, 100 AD3d at 967; Norwest Bank Minnesota, N.A. v Sabloff, 297 AD2d 722, 723 [2d Dept 2002]; see also Nocella v Fort Dearborn Life Ins. Co. of NY, 99 AD3d 877, 878 [2d Dept 2012]; Lenchner v Chasin, 57 AD3d 623, 624 [2d Dept 2008]; Dune Deck Owners Corp. v JJ & P Assoc. Corp., 34 AD3d 523, 524 [2d Dept 2006]; Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679, 680 [2d Dept 2001].) Further, the December 21, 2008 notice of default was given by an entity that is not the “Lender,” nor shown to have been identified to the mortgagors as authorized to act for the Lender. (See EMC Mtge. Corp. v Suarez, 49 AD3d 592, 593 [2d Dept 2008]; see also QMB Holdings, LLC v Escave Brothers, 2006 NY Slip Op 50322 [U], at * 3; Manufacturers and Traders Trust Co. v Korngold, 162 Misc 2d 669.)

To the extent that Plaintiff’s motion seeks judgment by default against Defendants other than the Deane Defendants, as stated above Plaintiff is not required to show its “standing.” The other noted deficiencies in Plaintiff’s showing as against the Deane Defendants, however, preclude a finding that it has shown “proof of the facts constituting the claim” (see CPLR 3215 [f]) as against the other Defendants to the extent that Plaintiff’s claims against those Defendants depend upon foreclosure of the Mortgage. Indeed, Plaintiff makes no showing at all as against any of the other Defendants.

As to “proof of the facts constituting the … default” (see id.), the respective affidavits of service fail to show proper service on defendant Mortgage Electronic Registration Systems, Inc. pursuant to CPLR 311 (a) (1), or upon defendants New York City Environmental Control Board or New York City Transit Adjudication Bureau pursuant to CPLR 311 (a) (2). Service upon defendant New York Merchants Protective Co., Inc. by service upon the Secretary of State pursuant to CPLR 311 (a) (1) and Business Corporation Law § 306 would be appropriate if Defendant is a corporation, but no evidence is submitted that it is, and, in any event, there is no service of the additional service required by CPLR 3215 (g).

Plaintiff also submits an affidavit of service upon Lynn Deane as “John Doe” by delivery to defendant “Carl Deane (Husband),” but the affidavit does not show the required mailing in accordance with CPLR 308 (2). In any event, the non-military affidavit, included as part of the affidavit of service, is premature. (See Emigrant Mtge. Corp. Inc. v Daniels, 2010 NY Slip Op 32720 [U], * 4- * 5 [Sup Ct, NY County 2010]; DLJ Mortgage Capital, Inc. v Lawrence, 2009 NY Slip Op 30554 [U], * 6 [Sup Ct, Nassau County 2009]; Sunset 3 Realty v Booth, 12 Misc 3d 1184 [A], 2006 NY Slip Op 51441 [U], * 3 [Sup Ct, Suffolk County 2006] [Sgroi, J.]; U.S. Bank NA v Coaxum, 2003 NY Slip Op 51384 [U], * 2- * 3 [Sup Ct, Westchester County 2003].)

The Court notes that, although no Defendant opposed Plaintiff’s motion, Plaintiff is not relieved of its burden of making a sufficient showing for summary judgment(see Yonkers Ave. Dodge, Inc. v BZ Results, LLC, 95 AD3d 774, 774-75 [1st Dept 2003] [“an unopposed summary judgment motion will be denied upon a movant’s failure to establish prima facie entitlement to summary judgment or when the evidence creates a question of fact”]; or for judgment by default (see Superior Dental Care, P.C. v Hoffman, 81 AD3d 632, 634 [2d Dept 2011] [“There is no mandatory ministerial duty to enter a default judgment against a defaulting party”] [internal quotation marks and citation omitted].)

Finally, Plaintiff moves to amend the caption (and, presumably to amend the Complaint to conform) in two respects: to substitute for the name of the plaintiff “The Bank of New York Mellon f/k/a The Bank of New York, as Trustee for Structured Asset Mortgage Investments II Inc. Bear Sterns ALT-A Trust, Mortgage Pass-Through Certificates Series 2005-7”; and to substitute “Lynn Deane” for defendant “John Doe.” As to the latter, counsel offers no explanation in either her affirmation or the memorandum of law, and the Court will not speculate.

As to the identification of Plaintiff, counsel explains that The Bank of New York Mellon “is the proper plaintiff in its capacity as Trustee for the Trust, which … is the holder of the Deanes’ loan” (see Plaintiff’s Memorandum at 15.) But the affidavit of Angela Frye states, “Wells Fargo, as custodian for and on behalf of the Trust, is the current holder of the Mortgage loan, pursuant to the PSA” (see ¶ 13.) Since a person cannot be a “holder” of a negotiable instrument without possession, both statements cannot be literally accurate. It may be that Plaintiff does not use “holder” as it is understood in the law of negotiable instruments, but the term and concept “holder” is too important to “standing” and a plaintiff’s ability to maintain this action for there to be risk of further confusion.

Plaintiff’s motion is denied, with leave to renew with papers that cure, or otherwise resolve, the deficiencies noted above.

Many interesting points here…

Chris Whalen guest post on ZeroHedge-

Over the weekend, I met with John Titus, Executive Producer of the new documentary film “Bailout: The Dukes of Moral Hazard,” which tells the story of individual Americans affected by the financial bust.  Myself, Yves Smith and other members of the blogerati are featured in the film.

We talked about why the film seems to connect with people at a viseral level.  Our conclusion is that the clarity and hilarity comes from the choice of our late friend John Fox as narrator.

http://thecomicscomic.com/2012/05/31/r-i-p-john-fox-1957-2012/

The next screening of “Bailout” will be in Philadelphia later this month:

http://usabailout.com/content/screening-philadelphia-june-20-and-june-23

The subject matter of “Bailout” had to pass through the keen, irreverant perspective that John Fox, a veteran television writer and later stand up commedian, brought to all of his work.  When the man who opened for Rodney Dangerfield for eight years tells you about the subprime crisis, it somehow makes sense.

But even though Bailout Director Sean Patrick Fahey vividly presents the impact of the crisis on home owners, there is another part of the story that remains untold, namely the hundreds of billions of dollars in losses borne by investors.  Incredibly, the vast majority of the losses on residential mortgage backed securities (RMBS) and toxic derivatives like collateralized debt obligations (CDO) have been left on the table.

Consumer and legal advocates, and politicians, focus most of their attention on the impact of the crisis on home owners and communities.  No surprise since this is where the heat is politically.  Likewise for the media, back to the point about John Fox in the role of interlocutor, the most easily understood and conveyed part of the crisis is found in the world of consumer real estate and foreclosures.  Talking about the role of a trustee in an RMBS trust quickly causes the eyes to glaze, but that same complexity and unattractiveness creates vast opportunities for fraud.

[…]

But the trouble is that Scheiderman has done nothing.  It seems that the entire system of government in the US has been compromised by the TBTF banks.  From the Federal Reserve Board in Washington to the office of the US Attorney to the various state AGs to the world of Buy Side managers, nobody has any interest in asking difficult questions about the provenance of the collateral underlying a significant — as in double digit percentages of some RMBS and CDOs.

[…]

If we take Schneiderman’s statement that nothing is “off the table” in terms of prosecuting acts of fraud, an ideal outcome here, IMHO, would be the following:

1)  NY AG Schneiderman goes into federal court next week and files a motion removing BK as custodian with respect to all RMBS trusts governed by NY law.  Schneiderman should ask the court to appoint a receiver with respect to all of the trusts where BK was custodian and immediately investigate whether fraud and professional malfeasance occurred.

2)  Schneiderman asks the court to appoint a receiver with respect to BAC because of ongoing acts of fraud and the recalcitrance shown to the court. Several federal courts have already found BAC to be engaging in “deliberate delay,” discovery abuse and other acts of bad faith in the various lawsuits now underway.  These acts of contempt of court alone are sufficient reason to apppoint a receiver with respect to BAC.

3)  And come to think of it, while Schneiderman is in the court house, he can file an emergency motion to intervene in the MF Global bankruptcy and ask the court to appoint James W. Giddens as receiver in that matter.  Schneiderman has standing to bring this motion and could ask the IL AG and US attorney to join him in making the representations to the court.  Then we wipe that grin off Jon Corzine’s face and start to make some real progress on MF Global.  More tomorrow.

[ZERO HEDGE]

This is a very informative podcast below. Credit Default Swaps 101.

Many thanks to Dylan Ratigan and Chris Whalen for this!

Dylan Ratigan-

Welcome to another episode of Greedy Bastards Antidote — a podcast series that zeroes in on “Greedy Bastardism” in our country, and highlights the people out there who are finding the “Antidotes.” Dylan will be talking to the heroes and the visionaries out there on the front lines of education, health care, the environment, trade, taxes, finance and government, all of whom are finding solutions to America’s biggest challenges — and doing it creatively and fearlessly.

This week, we’re focusing on the swaps market — not only to learn exactly what credit default swaps are, but why they’re one of the favorite financial products of Greedy Bastards. This is the one market that betrays every fundamental principal of American values — it is not transparent, it does not require collateral if you’re a AAA rated bank, and you can sell insurance globally on credit.  This incentivizes clients to buy them by offering  lower interest rates (and who doesn’t want that?)

[DYLAN RATIGAN]

Greedy Bastards Antidote Ep 3: Chris Whalen and Credit Default Swaps by Dylan Ratigan

image: goldonomic.com

Abigail C. Field

The LATimes reported that Brian Moynihan wouldn’t rule out bankruptcy for Bank of America. Chris Whalen urged the bank to go bankrupt. Now rumors are swirling that BofA will try to dodge all Countrywide’s lawsuit liability by putting Countrywide into bankruptcy, saving BofA in the process.

Whether BofA succeeds in ducking Countrywide’s liabilities depends mostly on one question: will the bankruptcy court apply Delaware law, which prizes form over substance, or law like New York or California’s, which looks at substance over form? That choice of law factor is what got BofA off the hook of Countrywide liability in one case, and left it on the hook in another, as detailed by Isaac Gradman at the Subprime Shakeout.  And if you think about it, the idea is incredibly galling.

[REALITY CHECK]

The Honorable Timothy Geithner Secretary of the Treasury Department of the Treasury 1500 Pennsylvania Avenue, N.W. Washington, D.C.

The Honorable Edward DeMarco Director (Acting) Federal Housing Finance Agency (FHFA) 1700 G Street, N.W. 4th Floor Washington, DC 20552

The Honorable Sheila Bair Chairman Federal Deposit Insurance Corporation 550 17th Street N.W. Washington D.C., DC 20006

The Honorable Ben S. Bernanke Chairman Board of Governors of the Federal Reserve System 20th Street and Constitution Avenue N.W. Washington, DC

The Honorable Mary L. Schapiro Chairman Securities and Exchange Commission 100 F Street, N.E. Washington, DC 20549

The Honorable John Walsh Comptroller of the Currency (Acting) Administrator of National Banks 250 E Street, S.W. Washington, DC 20219

Dear Secretary Geithner, Chairman Bair, Chairman Shapiro, Acting Director DeMarco, Chairman Bernanke and Controller Walsh:

We are writing to urge that any exception to the credit risk retention requirements of section 941 of the Dodd-Frank Act include rigorous requirements for servicing securitized residential mortgages.

The Act requires that securitizers retain five percent of the credit risk on mortgage-backed securities. The requirement is the subject of a study by Christopher M. James published by the Federal Reserve Bank of San Francisco dated December 13, 2010, and entitled “Mortgage-Backed Securities: How Important Is ‘Skin in the Game’?”, which finds that the requirement will have the intended effect of reducing “moral hazard” and significantly reducing the loss ratios on mortgage-backed securities.

The Act provides for an exception, however, for “qualified residential mortgages” and for other “exemptions, exceptions, and adjustments” to the risk-retention requirement. We strongly urge that you use great care in allowing any exception to the risk retention requirement, and that you be vigilant in assuring that any exception not defeat the purpose of the requirement. Recent experience in financial regulation has been that seemingly modest, reasonable exceptions have swallowed the rules and allowed abusive practices to continue unabated. In considering any requested exception under section 941, please remember that the advocates for rule-swallowing exceptions to other financial regulation have not been entirely candid with regulators or legislators on the likely effect of those exceptions.

The rules adopted pursuant to section 941 must, of course, require rigorous underwriting standards for “qualified residential mortgages” or any other mortgages excepted from the risk retention requirement, but underwriting requirements are not enough. The rules must also address the servicing of securitized mortgages. Much of the turmoil in the housing market, which is largely responsible for the painfully slow recovery, is the result not just of poorly underwritten mortgages, but of conduct by mortgage servicers.

We direct your attention to the “Open Letter to U.S. Regulators Regarding National Loan Servicing Standards” dated December 21, 2010, and signed by 51 people with extensive knowledge of mortgage servicing (the “Rosner-Whalen letter”). We strongly urge that you consider closely the recommendations included in that letter.

The Rosner-Whalen letter makes sensible recommendations regarding the treatment of payments by homeowners, “perverse incentives” in servicer compensation, mortgage documentation, and foreclosure forbearance during mortgage modification efforts.

We especially urge that any exception require that servicers modify mortgages pursuant to established criteria to avoid foreclosure where possible. The statute governing “Farmer Mac” mortgages provides a useful example of such criteria. See 12 U.S.C. 2202a (“Restructuring Distressed Loans”). Foreclosures are catastrophic for homeowners, holders of mortgage-backed securities, the housing market, and the economy as a whole.

The conduct of servicers is largely responsible for much unnecessary hardship. A requirement that servicers modify mortgage according to established criteria to avoid foreclosure can avoid that hardship in the future. Neutral, established criteria will also avoid “tranche warfare” between classes of investors.

We also especially urge that any rule for securitized mortgages require that servicers not be affiliated with the securitizer. There are obvious potential conflicts of interest, and no apparent countervailing justification. At a recent hearing of the House Financial Services Committee, several witnesses from major servicers were unable to offer any advantage in being affiliated with securitizers, other than to offer “full service” to customers. That justification is entirely unpersuasive. Homeowners may select the bank with which they have a credit card or a checking account, but they have no say in who services their mortgage.

In fact, community banks and credit unions have been reluctant to sell the mortgages that they originate to “private-label securitizers” for fear that the mortgages will be serviced by an affiliate of a bank, and the servicer will use that relationship to “cross market” other banking services to the homeowner. Requiring that servicers be independent of banks, therefore, would advance the goal of increasing the availability of credit on reasonable terms to consumers.

The Dodd-Frank Actives provides you ample authority to reform servicing practices, and regulation of mortgage securitization will be ineffective without such reform.

Sincerely,

Rep. Brad Miller [and others]

[ipaper docId=45930379 access_key=key-1l9vf5uxt2jve5kv4mle height=600 width=600 /]

“Years before they can get clear title and actually sell em”

“You guys in the MEDIA have a real tough time…your looking for events, your trying to cover the news minute by minute…”

“THIS IS CANCER”

“There are a lot of investors out there who don’t know what they own… they may own unsecured loans….. trustees that were supposed to do things under state law (and didn’t)… even Fannie and Freddie have issues with this.”

“This is not minutia…this is the Letter of the Law”

“Most securities issues in the United States are governed by New York law”

“Dealer has to deliver to the trustee the notes, that evidence the obligation”

“Trustees have the least duties”

“You have to indemnify them”

Christopher Whalen, managing director of Institutional Risk Analytics, talks with Bloomberg’s Mark Crumpton about the impact of U.S. mortgage foreclosures on banks and the housing market and the outlook for the economy.

Whalen is author of the book “Inflated: How Money and Debt Built the American Dream.” (Source: Bloomberg)

As many have seen SFF was the first to expose this Bogus Assignment scandal via a YouTubeVideo.

Via: NakedCapitalism by Yves Smith

I’m not quite certain how to calibrate journalism American Banker style, but I found this article, “Challenges to Foreclosure Docs Reach a Fever Pitch,” (sadly, subscription only, e-mailed by Chris Whalen), to be both interesting and more than a tad disingenuous.

The spin starts with the headline, it’s a doozy. The “challenge to foreclosure documents” message persists throughout the article, and it’s perilously close to a misrepresentation:

Because the notes were often sold and resold during the boom years, many financial companies lost track of the documents. Now, legal officials are accusing companies of forging the documents needed to reclaim the properties.

On Monday, the Florida Attorney General’s Office said it was investigating the use of “bogus assignment” documents by Lender Processing Services Inc. and its former parent, Fidelity National Financial Inc. And last week a federal judge in Florida ordered a hearing to determine whether M&T Bank Corp. should be charged with fraud after it changed the assignment of a mortgage note for one borrower three separate times…

In many cases, [plaintiff attorney] Kowalski said, it has become impossible to establish when a mortgage was sold, and to whom, so the servicers are trying to recreate the paperwork, right down to the stamps that financial companies use to verify when a note has changed hands…

In a notice on its website, the Florida attorney general said it is examining whether Docx, an Alpharetta, Ga., unit of Lender Processing Services, forged documents so foreclosures could be processed more quickly.

“These documents are used in court cases as ‘real’ documents of assignment and presented to the court as so, when it actually appears that they are fabricated in order to meet the demands of the institution that does not, in fact, have the necessary documentation to foreclose according to law,” the notice said..

Yves here. Let’s parse the two messages:

1. Note how the problem is presented as one of “documentation”, implying it is not substantive.

2. Because everyone knows mortgages were sold a lot, (which is clearly mentioned in the piece) the idea that some somehow went missing (or as the piece suggests, the “documentation” is missing even though the parties are presented as if they know who really owns the mortgage) is presented as something routine and not very alarming.

OK, let’s dig a little deeper. Even though the media refers to “mortgages”, under the law there are two pieces: the note, which is the indebtedness, and the mortgage (in some states, a “deed of trust”), which is the lien against the property. In 45 of 50 states, the mortgage follows the note (it is an “accessory”) and has no independent existence (as in you can’t enforce the mortgage if you don’t hold the note. You need to have both the note and the mortgage. This is a bit approximate, but will do for this discussion).

Now, the note is a bearer instrument if it is endorsed in blank (as in signed by current owner but not specifically made payable to the next owner, which was common for notes that were sold). It isn’t some damned “documentation”. Remember the days of bonds, when you had the real security, or stock certificates? This is paper with a hard monetary value, the face amount of the note (as long as it’s current, anyhow).

So now go back and look at that little extract. This “oh business was so busy we mislaid a lot of paper” isn’t some mere filing error. It’s like saying you left an envelopes full of cash in the subway on a regular basis. In the late 1960s back office crisis on Wall Street, when the volume of stock trading overwhelmed delivery and settlement infrastructure, a LOT of firms went out of business, in the midst of a bull market.

OK, now the second item with the article finesses is the sale of mortgages versus the role of the servicer. For the overwhelming majority of first mortgages, and I believe about 50% of second mortgages and HELOCs, the servicer is working for a trust that holds the notes pursuant to a securitization.

The standard documentation for a RMBS calls for the trust to gave a certification at closing that it has all the notes and it has to recertify that it has all the assets at two additional future dates, usually 90 days out and a full year after closing.

So this “notes were flyin’ around, yeah we lost track” is presumably impossible if we are discussing securitizations. Or put it another way: it means the fraud here is much more extensive than servicers making up documents ex post facto. It means the fraud extended back into how the securitization took place (as in what investors were told v. what actually happened).

And before you say these reports are exaggerated, my limited sample and my discussions with mortgage professional (not merely plaitiff’s attorneys but mortgage industry lifers) suggests the reverse.

But what about the second claim in the headline, that this activity has reached a “fever pitch”? Wellie, that’s a distortion too, perhaps to energize those who would be enraged by visions of deadbeat borrowers staying in houses due to fancy legal footwork. Trust me, there are FAR more overextended borrowers living in “free” housing due to banks slowing up the foreclosure process than due to legal battles.

First, the story is ONLY about Florida, despite the hyperventilating tone. And Florida is way ahead of other jurisdictions. There is a group of lawyers that are sharing G2 on these cases, and there are also a fair number of sympathetic judges. Note some states (Minnesota in particular) have both extremely pro bank laws and a business friendly bar. So it’s misleading to make sweeping generalizations; you need to get a bit more granular, which this article fails to do.

Second, the “fever pitch” headline also conveys the impression that this is an epidemic, ergo, these cases are widespread. While it is hard to be certain (this activity is by nature fragmented), at this point, that looks to be quite an exaggeration. The vast majority of borrowers, when the foreclosure process moves forward, don’t fight. They lack the energy and the resources. And when the borrower prevails, the case is typically dismissed “without prejudice”, meaning if the servicer and trustee get their act together, they can come back to court and try again.

Most of the battles against foreclosure appear to fall into one of two categories:

1. The borrower can afford the mortgage, but has fallen behind due to what he thinks is a servicing snafu. I can give you the long form, but the way servicers charge extra fees is in violation of Federal law and is designed to put the borrower on a treadmill of escalating fees. And they do not typically inform the borrower that fees have compounded until 6 or more months into the mess, and by that time, the arrearage can be $2000 or more. The borrower is unable to fix the servicing error, the fees continue to escalate, and the house goes into foreclosure.

2. The borrower has filed for a Chapter 13 bankruptcy, but the trustee is fighting the bankruptcy stay and trying to seize the house.

So why this alarmist American Banker article? Even if the numbers of successfully contested foreclosures are not (yet) large, the precedents being set are very detrimental to the foreclosure mills, the servicers, and the trustees. Moreover, the costs of fighting these cases can quickly exceed the value of the mortgage. So it would not take much of an increase in this trend to wreak havoc with servicer economics, and ultimately, the losses on the trust, particularly on prime mortgages, where the loss cushions were considerably smaller than on subprime.

I suspect the real reason for alarm isn’t the “fever pitch,” meaning the current level of activity. It’s that a state attorney general is throwing his weight against the servicers, and what he is uncovering is every bit as bad as what the critics have been saying for some time. That may indeed kick up anti-foreclosure efforts in states with open-minded judges to a completely new level.

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