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Is It Time to File Quiet Title Actions on Foreclosed Homes?

Is It Time to File Quiet Title Actions on Foreclosed Homes?


Is It Time to File Quiet Title Actions on Foreclosed Homes?

THIS IS NOT Intended to Be Construed or Relied upon as COMPETENT LEGAL ADVICE—it is an academic paper discussing various perceptions of evolving potential facts and law, which may differ state by state and within jurisdictions within states. Readers are urged to obtain competent legal representation to review their facts.

In the past, foreclosed homeowners and their attorneys have discussed the utility of filing quiet title actions where homes have been seized and deficiency judgments entered by various foreclosure claimants that purport to unknowingly rely on faulty documentation. There are dangers. A buyer that has acquired a foreclosed home—or the foreclosing entity itself—may bring an action against a dispossessed person seeking redress. A pro se plaintiff or an attorney that represents the wronged homeowner may be subject to sanctions for raising a spurious or improperly supported claim. Today facts appear to put a defense attorney at risk of malpractice if he does not preserve his clients’ interest—even post foreclosure—unless he apprises the client of the opportunity to regain title to the family home. Courts have notice of these defects by reason of withdrawals of support documents—beyond GMAC.

Recent disclosures and admissions by document creation groups, together with widespread newspaper reported facts open avenues to additional discovery and formulation of academic legal opinion. These will open the door for claims to set aside erroneous judgments and/or pursue damages against those servicers, Indenture Trustees and document preparers that either knowingly, negligently, or acted with willful disregard to perpetrate fraud on the courts and the hapless home-owners. Mortgage-backed securities investors may also find an interest in these activities. Failed documentation may disguise outright fraud. Attestations and sworn affidavits serve a fundamental purpose—prevention of fraud. These are not mere technicalities as propounded by some industry apologists.  Certainly, homeowners with continuing duties of enforced silence may have opportunity to re-open their settlements in light of these possible fraudulent impositions and inducements.

There are at least two sets of circumstances raised to date whereby potentially void or voidable documents have been used to push homeowners into the streets and into bankruptcy;

  • Complaints in foreclosure supported by assignments of mortgage from purported representatives of MERS to various entities
  • Motions for Summary Judgment supported by Affidavits of Claimants—most notably GMAC’s Jeffrey Stephan

On September 23, 2010 the Washington Post added to the furor surrounding the (majority) federal government owned [ALLY] GMAC’s revelations from earlier this week. GMAC used affidavits executed by an employee, Jeffrey Stephan, who admitted in deposition testimony in December 2009 and June 2010, that he did not actually verify the mortgage foreclosure information to which he was testifying in connection with the foreclosures of two families.

In addition, he admitted signing these “affidavits,” and passing them for later notarization in bulk, a violation of proper notary procedure. Mr. Stephan signed off on 10,000 mortgage documents per month according to his June deposition and the Post article. GMAC, in this instance, took the honest and safe course of “temporarily suspending” some foreclosure-related activities in 23 states – as reported by several large newspapers, including the New York Times, Bloomberg and The Washington Post. The “temporary suspension” allows for evaluation of the impacts of this admitted breakdown in the system, rather than blatantly defrauding foreclosure courts in judicial foreclosure states.  The New York Times on the 22nd speculated that: [GMAC] “actions suggest concern about potential liability in evicting families and selling houses to which it does not have clear title.” [Emphasis added]  The same article notes that; “The lender said it was also reviewing completed foreclosures where the same unnamed procedure might have been used.” [Emphasis Added]. The step referred to in these articles, preparation and filing of an affidavit in support of a Motion for Summary Judgment—along with the Motion itself –occur well into the foreclosure process.

However, there is another critical document created and filed by a claimant with the foreclosure court at the beginning of foreclosure. This document, the Assignment of Mortgage, is supposed to support the claimant’s right or legal “standing” to press the Complaint in Foreclosure. The Complaint is the basis for the foreclosure and creation of a “deficiency judgment” – the amount left owing by the homeowner after the claimant sells the house for less than the amount owed and includes added fees and charges. The claimant uses the deficiency judgment to seize the homeowner assets and future paychecks. In most instances the assignment is the only document before the court that associates the claimant with the borrower. The complaint and supporting assignment frequently surprise and confuse the homeowner by naming an entity or sham “trust” that the homeowner has never heard of before.

The Assignment of Mortgage is significantly more important than the affidavit in support of the Motion for Summary Judgment, if for no other reason sheer numbers.  Typically most homeowners have undergone a psychological bruising and beating from the loan servicer by the time the actual Complaint in Foreclosure is filed. Often the family has lost the pay of one, if not both, wage earners and seeks some relief from one of the high cost, predatory loans created 2003-2007. Unfortunately the servicer typically refuses to discuss modification or any relief unless the homeowner has fallen behind in payments. The servicers may rely on terms limiting its authority within the securitization documents in respect of this hard-nose approach.

The hard-nose response gives the servicer cover for actions or abuses that often characterize its subsequent conduct. At that point, the servicer transfers the loan to the default department or outsources to a “default management” operation. This is an aggrandized term for collection agency. The “department” or collection agency often calls the family up to six or more times a day demanding money—rarely the same caller twice. Typically, this will throw the family into confusion and despair. Pleas for relief fall on deaf ears unless the family meets demands to “make up late payments and added fees.”  It’s just the beginning of a process that has the effect, if not the purpose, of destroying the family’s morale. The servicer may follow up with notices tacked on the homeowner’s door, a barrage of ominous if not outright threatening letters and other actions aimed at driving the homeowner to abandon the home and neglect a legal defense.

If the homeowner is either naïve enough to believe that the touted voluntary [for servicers] relief programs actually operate, or desperate to keep a roof over the family’s head, the loan modification dance begins. Under the guise of compliance with HAMP, the collection agency demands an array of homeowner financial and employment information. Irrespective of the use that the homeowner desires for that information, it will be of great help to the collection agency to locate assets and paychecks down the road to collect the looming deficiency. But today the information rarely satisfies the servicer in respect of moving towards a modification. The demanded documents are often purportedly “lost” by the servicer, or deemed inadequate—anything to drag out the nightmare and break the family’s spirits. After submitting and resubmitting documents, explanations, and hours on the telephone day after day, week after week, any false hopes that are raised are destroyed by a denial. Homeowners often will be told to try again-with the same results.

After about 3-4 months, perhaps even while the family thinks that a modification is soon to be forthcoming, the ax falls instead. An assignment is “created” and the Complaint is filed. Usually the family gives up without opposition at this point. The servicer may go so far as to place a note on the door offering to further discuss modification leaving a phone number. When the number is called by the confounded homeowner, the servicer representative may explain: “we didn’t really mean that; we just wanted to see if you have left yet!”

In some cases born of desperation, the struggling family may contact an attorney who demands $1000-$5000 just to open the case. The family has 30 days to raise the money to cause someone to simply look at the demands in the Complaint and the Assignment. In the vast majority of cases still remaining, the family gives up now, abandons the property, and no response is ever filed to the Complaint—a default judgment is entered in favor of the claimant. Most often, the family is not even aware that the demands seek more than just the home. That realization may take years to occur—when another collector knocks on the door demanding the long-forgotten deficiency. The process is aimed at breaking the family’s will, at winnowing out the homeowners. The servicer wants the home!

The articles printed prior to Sep 23, 2010 in connection with GMAC’s “unnamed procedure” did not focus upon the issue of potential forgery or related systemic fraud on the courts in connection with preparation of Assignments of Mortgage. By way of background, by reference to numerous anecdotes, it appears that often a claimant in possession of a list of homeowner loans in default provides superficial information to a default services company in respect of the borrower and property. One of the largest default service providers, by its own admission, is two-year old publicly traded Lender Processing Services (“LPS”), a spin-off from FINS. “Approximately 50 percent of all U.S. mortgages by dollar volume are serviced using LPS’ Mortgage Servicing Package (MSP)” The lender, a servicer or Indenture Trustee contracts with LPS for creation and delivery of an Assignment of Mortgage to the requesting entity. (see exhibit at end) This document is often sent directly by LPS through the mail to County Recorders to be file-stamped and recorded in the county property records.  These steps lend false authenticity to the piece of paper. By the time the targeted family sees the Complaint and attached Assignment, the assignment has been file-stamped by their local County Recorder, the Clerk of Courts and probably was attached to a subpoena “served” upon them by their County Sherriff. The family is thoroughly intimidated by the Assignment of Mortgage, which has been used to convert the family’s local authorities into apparent agents and enforcers of the distant claimant. The assignment is a powerful weapon in the war of intimidation.

The Washington Post, September 23, 2010, correlated the GMAC admitted breakdown in verification of loan files and notarization process with the assignment creation process operated by LPS. LPS’ document creation division in Alpharetta, Georgia operating under LPS’ DOCX trademark, churned out thousands of assignments. The Post identified one prolific signatory, Linda Green. The article set out in its body several examples of Ms. Green’s signature—which differ dramatically one to another. The Post stated the likely observation that the signatures were made by other LPS employees in addition to Ms Green.  She is but one example at one LPS office: there are others with similar handiwork including Tywanna Thomas and Korrel Harp at that office. Mr. Harp has the added dubious distinction of having been jailed for and plead guilty to “Knowingly Possessing False Identification” relating to an arrest in Oklahoma in 2008.   At the age of 24, Mr. Harp was signing as Vice-President of Mortgage Electronic Services Inc., aka MERS. MERS has been nominal owner of 65 million home mortgages—and receives mortgage title to 60% of all new mortgages.

As a VP of MERS the 24 year-old Harp, like Ms. Green and Thomas, purportedly possessed the power to transfer mortgages with questionable oversight to LPS’ clients—perhaps others?  Based on the signatures of Harp, Green, Thomas— and other varied, yet purportedly notarized signatures, Courts across the country have foreclosed on homes and granted deficiency judgments.  One of the in house LPS notaries was only 18 years old at the time she notarized signature for Harp, Thomas and others at DOCX. Michelle Kersch, a senior vice president for Lender Processing Services, made limited explanations by email in the Post article but did not elaborate “due to the pending criminal investigation”.

Like GMACs Stephan, LPS’ stamp and sign department was a high volume operation. Powers of attorney were not consistently attached to the crucial assignments—if at all.

In the case of Linda Green, there was no power of attorney to represent MERS on an original “assignment of mortgage dated October 17, 2008 and filed on October 13, 2009”. This technicality was disclosed in a corrective filing of assignment by Florida foreclosure firm Shapiro and Fishman dated August 11, 2010 in Lee County, Florida in support of a foreclosure by servicer AHMSI. The POA status of other prolific signers such as Harp seems equally uncertain—but as Harp has emphatically stated “I’m sure everything is legal.” There seems to be little observable difference between the conduct of GMAC’s Stephan and the LPS’ high volume signers—but for the possible failure of the LPS signers to have representative capacity to sign at all.

LPS has also made admissions that GMAC seems to echo in terms of problematic “processes”. In the company’s 2009 Annual Report on file with the Securities and Exchange Commission, published in March 2010, under “regulatory matters”Recently, during an internal review of the business processes used by our document solutions subsidiary, we identified a business process that caused an error in the notarization of certain documents, some of which were used in foreclosure proceedings in various jurisdictions around the country.”

Subsequently, April 3, 2010, the Wall St. Journal published an article regarding the issues with LPS and notary deficiencies; “US Probes Foreclosure-Data Provider”.  Foreclosure activists in Florida did not let the admission pass. These persons identified and brought to light signed and notarized Assignments that actually conveyed mortgages to named entities, “Bogus Assignee” and “Bad Bene”. These clearly established undeniable proof that LPS’ internal controls were compromised and virtually any name could be inserted as a claimant in a foreclosure action.

LPS’ CEO Jeffrey Carbiener authored a Letter to the Editor of the Florida Times-Union responding to an article published May 14, 2010 referring to “bad bene” and “bogus assignee”. In his open letter admissions in the press Carbiener asserted that the bogus names were “placeholders” put in the signed and notarized assignment documents “…until the missing information [claimant name] was provided…” Carbiener noted that the forms, as well as the data inserted, were based on instructions from clients with the “placeholders” used until more data is provided.  This amounts to a Nuremberg Defense.

The Carbiener comments attempt to place the onus of error in naming mortgage claimants on his clients—but for the obvious so-called placeholders. However, Carbiener’s comments have great significance beyond LPS role. This explanation is an admission that assignments were prepared in blank based on client information. According to Carbiener, it would appear that the named claimant was subsequently determined by the client and inserted. This process allows substantial opportunity for abuse, suggesting that a servicer determined that a loan was in default, and then someone engaged in a separate process to identify a claimant to whom the proceeds of foreclosure would be awarded.

The difficulties, or opportunities, for a servicer and his client Indenture Trustees to shift the benefits among potential investor beneficiaries are more apparent when one reviews the SEC filings of now bankrupt mortgage note originators such as American Home Mortgage group (“AHM”) and Option One.

Both originated loans that were supposedly stuffed into trusts. On paper the trusts supposedly issued mortgage-backed securities to trusting investors. However, purported trust-sponsors AHM and Option One and the Indenture Trustees were at best haphazard in meeting basic commitments and representations that were plainly stated in the securitization documents they themselves filed. The trust documents clearly state that the lists of loans included in the trusts were filed with the SEC and the appropriate Secretary of State (UCC). The securitization documents provided detailed descriptions of the information to be included in the filed list. This information was sufficient that a homeowner could determine if the trust owned his/her loan and was the proper party to receive his payments. Investors in the trust MBS could look to the list to determine the principal amount of the loans that “backed” the investment, as well as loan to value ratios and other relevant information that would indicate the value of the loans—and provide information adequate to determine if the same loan was placed in multiple trusts. However, for AHM, 7 of the 12 investment trusts filed with SEC lacked the lists.  The schedule stated, “manually filed”, but the manual filing was not made in many instances. The actual manual filings made are identified on the SEC dockets for the trusts as “SE” for “scanned exhibit.” Under the “SE” docket entry, the list would be found in specificity.  One such example of a trust with a proper loan list was American Home Mortgage Investment Trust 2005-2.

In motion practice in connection with a homeowner’s motion to dismiss a naked claim by one of Korrel Harp’s or Linda Green’s appointed mortgage assignment beneficiary trusts, one could note that the trust lacked a loan list and ownership of the loan could not be independently verified by reference to government records as intended. In so doing, it was possible to refer the court to the properly filed loan lists to note the clear distinction and value of the list. It was possible to prove that the lists were not intentionally missing due to some overriding concern for homeowner privacy—a common speculation. It was also useful to prove that missing loan lists were not customary “industry practice”. The filed list was a government record freely accessible to the public online. That changed between July 21, 2010 and September 02, 2010. Loan lists that had been on file and available for investors and homeowners to view online on the SE site were unceremoniously deleted. The lists are no longer freely accessible. A demand is now necessary under Freedom of Information Act—the proper loan lists can no longer be referenced in motions to dismiss. The effect was equivalent to, if not the same as, intentional destruction of evidence by the SEC. It is of interest that on the same day as the Washington Post detailed the LPS similarity to GMAC in terms of uncertain document authenticity, the WSJ also ran a front-page article detailing questionable actions taken in recent months by SEC. Washington Post, September 22, 2010, SEC Blasted on Goldman.

In summary, SEC failed to require actual filing of loan lists by the trust sponsors and the Indenture Trustees. This failing has lead to LPS and GMAC transfers of claims to unverifiable beneficiaries. This the Times suggests, creates a cloud on the title of the new home buyers of foreclosed properties. Then to complete the injury and remove opportunity for homeowners to defend unsupported claims, SEC destroys evidence that could be useful to homeowners being foreclosed and investors seeking to prove fraud. The mortgage fiasco has roots in SEC failure to regulate and its continuation and concealment of potential fraud is an abuse of discretion by SEC, which is supposed to support disclosure of information—not hide it.

Excerpted from: DOCX eAssignTM brochure (no longer found online)

eAssign utilizes the industry’s most robust property records database and data capture capabilities to significantly reduce timelines and costs for lienholders when creating (emphasis added) and recording lien assignment documents.

This article was contributed by an anonymous supporter of StopForeclosureFraud.com

© 2010 FORECLOSURE FRAUD | by DinSFLA. All rights reserved. www.StopForeclosureFraud.com

Creative Commons License

Related links:

LPS 101

MERS 101


© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

Posted in bogus, conflict of interest, CONTROL FRAUD, corruption, deed of trust, DOCX, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, forgery, GMAC, investigation, jeff carbiener, jeffrey stephan, Korrel Harp, Lender Processing Services Inc., linda green, MERS, MERSCORP, michelle kersch, mortgage, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., notary fraud, note, quiet title, robo signers, S.E.C., securitization, servicers, STOP FORECLOSURE FRAUD, stopforeclosurefraud.com, trade secrets, Tywanna Thomas8 Comments

MERS is a “defective” product, should MERS be recalled nationwide?

MERS is a “defective” product, should MERS be recalled nationwide?

This is not a GMAC thing… this is a MERS thing!



I know if I purchased a stroller for my kid and later knew it these strollers are all defective …I hope the government would kick in and do a nationwide RECALL!!

GMAC stops some evictions, foreclosed home sales


NEW YORK — GMAC Mortgage LLC said Monday it halted certain evictions and sales of foreclosed homes as it corrects “a potential issue” in its foreclosure process.

The action highlights what is becoming a larger problem for lenders and servicers that may have illegally driven homeowners out of their houses. The issue is threatening to clog up an already overloaded foreclosure process.

Lenders took back more homes in August than in any month since the start of the U.S. mortgage crisis, foreclosure listing firm RealtyTrac Inc. said last week. Banks have been stepping up repossessions to clear out their backlog of bad loans.

GMAC, which is owned by Detroit-based Ally Financial Inc., did not identify the specific internal issue that prompted the moratorium in its statement, but it has been linked to lawsuits this year surrounding the alleged falsification of a key foreclosure document.

The Florida attorney general is investigating three law firms for allegedly providing fraudulent affidavits that identify who holds the original mortgage note in foreclosure cases. In Florida and in other states, this document allows lenders to bypass a costly trial and proceed with a foreclosure.

Two of the three firms being investigated — the Law Office of Marshall C. Watson and the Law Offices of David J. Stern PA — have represented GMAC in foreclosure proceedings. And the person who signed many of these allegedly false affidavits was an employee of GMAC.

In a deposition taken in December, GMAC employee Jeffrey Stephan said he signed 10,000 affidavits or similar documents a month without personally verifying who the mortgage holder was. That means many foreclosures could have taken place based on false documentation. Stephan could not be located for comment.

“That’s hundreds of thousands of cases,” said Ice Legal PA attorney Christopher Immel who took the deposition. “And there are other people at other places who sign these kinds of documents as well.”

GMAC did not address how many homeowners would be affected by its suspension of evictions and foreclosure sales. It expects the issues to be resolved within a few weeks or, at latest, by year-end. The company didn’t respond to questions beyond its statement.

The issue of documenting who holds the mortgage is not unique to GMAC. Judges and lawyers nationwide are taking a second look at foreclosure affidavits. Many mortgages have been sliced up and sold to many investors as securities and that makes it harder to determine who is the ultimate mortgage holder.

In August, a judge in Duval County, Fla., ruled that JPMorgan Chase could not foreclose upon two homeowners because Fannie Mae carried the mortgage on its books and JPMorgan Chase only serviced the loan. JPMorgan Chase had identified itself as the owner of the loan. Similar cases across the country are pending.

The law firm that represented JPMorgan Chase in that case — Shapiro & Fishman — is the third law firm being investigated by the Florida state attorney.



© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

Posted in assignment of mortgage, chain in title, concealment, conflict of interest, conspiracy, CONTROL FRAUD, corruption, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, forgery, investigation, jeffrey stephan, Law Offices Of David J. Stern P.A., law offices of Marshall C. Watson pa, MERS, MERSCORP, Moratorium, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., Mortgage Foreclosure Fraud, notary fraud, QUI TAM, quiet title, racketeering, RICO, robo signers, shapiro & fishman pa, signatures, Wall Street0 Comments



The yellow in the picture represents all the hard work and sweat Mr. Nguyen encountered for this victory.

Quiet Title, Rescission and Damages, and Unfair Business Practices


1. This Court has jurisdiction over the subject matter of this case and over the Defendants.

2. Venue as to the Defendants in the Central District of California is proper.

3. Default judgment is hereby entered against Chase Bank USA, N.A. and Chase Home Finance, LLC and in favor of Plaintiffs Paul Nguyen and Laura Nguyen on all claims in Plaintiffs’ SecondAmended Complaint.

4. IT IS THEREFORE ORDERED that the Deed of Trust recorded with Orange County Recorder as instrument No. 2007000731120 on 12/12/2007 is wholly voided as to plaintiff Laura Nguyen.

5. IT IS FURTHER ORDERED that Defendant First American Loanstar Trustee Services record a DEED OF RECONVEYANCE to reconvey unto Plaintiffs thereto all right, title and interest which was heretofore acquired by First American Loanstar Trustee Services under deed of trust recorded with Orange County Recorder as instrument No. 2007000731120 on 12/12/2007.

6. IT IS FURTHER ORDERED that all adverse claims against property known as 16141 Quartz Street, Westminster, CA 92683 are quieted.
The legal description of said property is:


7. IT IS FURTHER ORDERED that the Promissory Note dated 12/12/2007 executed by Plaintiff Paul Nguyen in favor of Chase Bank USA, N.A. rescinded pursuant to 15 U.S.C. §1635(i).

8. IT IS FURTHER ORDERED that pursuant to 15 U.S.C. §1635(b), Plaintiffs had made offer to tender the loan evidenced by promissory note dated 12/12/2007 and Defendant Chase Bank USA, N.A. did not take possession within 20 days after tender by the Plaintiffs. Therefore, ownership of the loan proceed is vested in the Plaintiffs without obligation on their part to pay for it.

9. IT IS FURTHER ORDERED that Defendant Chase Bank USA, N.A. within 20 days after entry of judgment shall return to the Plaintiffs any money or property given as earnest money, down payment, or otherwise pursuant to 15 U.S.C. §1635(b).

10. IT IS FURTHER ORDERED that Plaintiffs are awarded their costs of suit, to be paid by Defendants Chase Bank USA, N.A. and Chase Home Finance, LLC, in an amount to be determined by the Clerk of the Court.

DATED: September 15, 2010
The Honorable A. Howard Matz
JS-6 United States District Judge

[ipaper docId=37596755 access_key=key-1473obcdj4vb1esh5oz5 height=600 width=600 /]

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

Posted in chain in title, chase, conspiracy, deed of trust, foreclosure, foreclosure fraud, foreclosures, mortgage, quiet title, securitization, trustee, Trusts, Unfair Business Practices7 Comments



I was wondering why this site blew up with hits today!

THIS INVOLVES 65 MILLION LOANS…it was ’62’ !!! I have a source that confirmed this.

“The Curse Of The MERS”




© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

Posted in chain in title, class action, concealment, conflict of interest, conspiracy, CONTROL FRAUD, corruption, deed of trust, Economy, fannie mae, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, investigation, mbs, MERS, MERSCORP, mortgage, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., Mortgage Foreclosure Fraud, Notary, notary fraud, note, quiet title, R.K. Arnold, racketeering, Real Estate, repossession, RICO, rmbs, robo signers, stopforeclosurefraud.com, sub-prime, trade secrets, trustee, Trusts, Wall Street4 Comments



The Time To Act Is NOW!

I am working on a special project & need your help to gather as many MERS Assignments as we can possibly get.

What is especially needed are the Certifying Officers signing these assignments for MERS. I don’t care if it’s old, new, signed, undated, unmarked, lender has gone bankrupt ages ago…I just want them ALL!

Click the Envelope to load up your MERS Assignment(s).

Or Info at stopforeclosurefraud.com

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

Posted in Bank Owned, bankruptcy, chain in title, concealment, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, forgery, investigation, mbs, MERS, MERSCORP, mortgage, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., Mortgage Foreclosure Fraud, Notary, notary fraud, note, quiet title, racketeering, Real Estate, REO, RICO, rmbs, robo signers, securitization, servicers, STOP FORECLOSURE FRAUD, stopforeclosurefraud.com, Supreme Court, trade secrets, trustee, Trusts, Wall Street1 Comment

NY JUDGE SPINNER DENIES Deutsche & MERS for NOT Recording Mortgage, Make up Affidavit and Assignment!

NY JUDGE SPINNER DENIES Deutsche & MERS for NOT Recording Mortgage, Make up Affidavit and Assignment!



INDEX NO. 09-3 1067


MERS alleges that the mortgage was never recorded, and upon information and belief, has been lost or inadvertantly destroyed. MERS commenced this action on August 1 1, 2009, with the filing of the summons, verified complaint, and notice of pendency.

Also, in support of its cross motion, MERS submits, inter alia, copies of the alleged note and mortgage, and the affidavit of John Burnett ( “Burnett”), a Vice President of Deutsche Bank National Trust Company as Trustee for the MLMI Trust Series 2007-MLNI (“Deutsche Bank”) who alleges that Deutsche Bank is the current owner and holder of the mortgage that is the subject of this action. Burnett claims that MERS’ mortgage has been assigned to Deutsche Bank by an unrecorded assignment of the mortgage acknowledged on September 4,2009, a copy of which has been submitted to the court. Burnett states that the assignment will be recorded once the mortgage has been established of record. Further, Burnett alleges that out of the loan proceeds that were secured by the mortgage, $641,441.54 was paid to Downey Savings and Loan to satisfy a prior mortgage Torr had given on the property, and the amount of $34,833.22 was paid directly to Torr. Burnett submits a copy of the alleged HUD- 1 A Settlement Statement from Torr’s closing.

Additionally, Burnett asserts that it has been discovered that the original mortgage was never recorded, cannot be located, and is presumed to be lost or inadvertantly destroyed. He claims that the original mortgage is not in Deutsche Bank’s files, and only a copy has been located. Burnett states that Interactive Abstract (“Interactive”) a title abstract company, presided over the November 17, 2006 closing of the mortgage and took the executed original for the purpose of recording it in the Suffolk County Clerk’s Office. He states that, upon information and belief, the mortgage was lost, misplace or destroyed while in Interactive‘s possession or after it had been submitted to the Clerk’s Office for recording. Burnett alleges that he has been advised that Interactive has ceased operating as a title abstract company and is out of business.

MERS alleges that by submitting the affidavit of Burnett, and copies of the affidavits of service, together with the relevant documentary evidence, it has satisfied the proof required by CPLR 321 5 setting forth the facts constituting the claim against Torr and establishing his default. Moreover, MERS alleges that the relief sought herein, a declaratory judgment, is necessary to enable it to realize the security interest in the property that was bargained for when MLN made its $695,000.00 loan to Torr and Torr gave the mortgage to secure the loan. MERS requests that the court render a judgment declaring that the plaintiff is the holder of a mortgage encumbering the premises under the terms and conditions set forth in the unrecorded plaintiffs mortgage, and directing the Suffolk County Clerk’s Office to record such a declaratory judgment, together with a copy of the plaintiffs mortgage.

As to Torr’s motion to dismiss the complaint for failure to state a cause of action, MERS has established that such motion is untimely. Torr was served by two different methods of service. One of the affidavits of service submitted indicates that Torr was served pursuant to CPLR 308(2) on September 2, 2009, by leaving the summons and verified complaint with a person of suitable age and discretion; mailing them to Torr’s residence on September 8,2009; and then filing proof of service with the Suffolk County Clerk’s Office on September 18, 2009. Therefore, under this method of service, Torr would have had to have served an answer or a notice of appearance by October 28,2009 (see CPLR 308[2]; CPLR 320; and CPLR 3012). The other affidavit of service submitted indicates that Torr was served pursuant to CPLR 308( 1) on September 2,2009, by personal delivery of the summons and verified complaint, and then fiIing proof of service with the Suffolk County Clerk’s Office on September 10, 2009. Thus, under this method of service, Torr would have had to have served an answer or a notice of appearance by September 22, 2009 (see CPLR 320 and CPLR 30 12). Furthermore, this motion to dismiss the complaint was made by Torr on December 2 1,2009, the date upon which it was served (see CPLR 221 1). Inasmuch as this motion was not interposed within the time required for service of responsive pleadings (see CPLR 32 1 1 [e]), no matter which of the two afl’ldavits of service submitted herein is used, the motion is untimely. Therefore, Torr’s motion to dismiss is denied.

As to MERS’ cross motion, it is well settledl that when applying for a default judgment, a plaintiff must submit evidence sufficient to demonstrate a prima facie case (see CPLR 32 lS[fl; Silberstein v Presbyterinn Hosp. in the City of New York, 96 AD2d 1096,463 NYS2d 254 [1983]). Thus, if a court finds that the allegations in a complaint or affidavit of facts fail to establish a prima facie case, a movant is not entitled to the requested relief; even on default (Dyno v Rose, 260 AD2d 694,687 NYS2d 497 [1999]; Green v Dolplzy Construction Co., Inc., 187 AD2d 635, 590 NYS2d 238 [1992]). Consistent with the foregoing, and upon review of t.he papers submitted, the court finds MERS’ application for a default judgment to be deficient.

An action to compel the determination of a claim to real property may be maintained where a plaintiff claims an estate or interest in real property (RPAPL § 150 I [ 11). Although the interest had by a mortgagee of real property or its successor in interest is an “interest in real property”(RPAPL tj 150 1 [ 5 ] ) , here MERS has failed to meet its burden by demonstrating that it has standing to maintain this action to quiet title (see Soscin v Soscin, 35 AD3d 841, 829 NYS2d 543 [2006]). MERS has failed to make a prima facie showing that it was the owner or holder of the note and the mortgage at the time this action was commenced (cc Mortgnge Elec. Registration Sys., Inc. v Conkley, 41 AD3d 674, 838 NYS2d 622 [2007]). In addition, the purported mortgage describes MERS as the nominee of MLN, and that for purposes of recording the mortgage, MERS is the mortgagee of record. Thus, MERS as nominee, is the agent of MLN, for limited purposes, “and has only those powers which are conferred to it and authorized by” MLN (Bank of New York v Aldernzi, 201 0 NE’ Slip Op. 20 167,900 NYS2d 82 1, 823 [Sup Ct, Kings County, 20101). There is no evidence that MLN, who is not a party herein, authorized MERS to bring this action’.

Moreover, the effectiveness of the assignment dated September 4, 2009, is unclear as there is no evidence that MLN ever directly assigned the note to MERS or expressly gave MERS the authority to act as MLN’s authorized agent to assign the subject note to Deutsche Bank (see In re Stralern, 303 AD2d 120, 758 NYS2d 345 [2003]; Teitz v Goettler, 191 AD 924, 181 NYS 956 [1920]).Without an effective transfer of MLN’s interest in the note to MERS or express authorization from MLN for MERS to assign the note on its behalf, the assignment of the mortgage is a nullity (see Kluge v Fugazy, 145 AD2d 537, 536 NYS2d 92 [1988]). Thus, it is also iinclear whether Deutche Bank’s Vice President had the authority to act in terms of satisfying the proof of facts constituting this claim (see CPLR 3215[fl; Wells Fargo Barzk, NA v Davilmar, 16 Misc3d 1 13 3A, 847 NYS2d 906 [2007]).

[ipaper docId=37138728 access_key=key-1brfunk8ho62g6uhl4j0 height=600 width=600 /]

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

Posted in chain in title, conflict of interest, conspiracy, deutsche bank, dismissed, foreclosure, foreclosure fraud, foreclosures, MERS, MERSCORP, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., note, quiet title, rmbs, servicers, stopforeclosurefraud.com, trustee, Trusts, Wall Street0 Comments

MERS: Open Letter from Nye Lavalle

MERS: Open Letter from Nye Lavalle

Dear MERS Executives:

As a shareholder in several companies that are MERS Corp owners, I will be sending a report to the board of directors and audit committees of each company in the coming 60 days outlining the plethora of fraudulent representations your company has made via its “certifying officers” to allow the masking of complex trades and financial transactions that assist these corporations that control your corporation to “cook their books.”

As you each know, your prior arguments to me about your policies and practices have been deemed to be incorrect by numerous judges and even state supreme courts that have sided with many of my arguments.

In order to protect the American Public; all land and property owners; the financial markets and investors; our banking system; and the citizens and tax payers of the United States, I ask that you request the disbandment of your company from the board of directors of MERS Corp.  Similar requests will be made by me and other shareholders in each company with shareholder ownership in MERS Corp.

In addition, quite title actions must be initiated in court rooms across America in order to clean up the morass of fraud you have directly helped perpetuate.  I would strongly advise you to preserve and protect every document and communication in your company’s and executive’s personal records (including hard drives and other storage devices) that contain any reference to my name, family, complaints, reports, business dealings, lawsuits, and data related to me in any manner whatsoever.

This information will be the subject of discovery upon ALL YOUR companies (MERS 1 to 3) in upcoming and pending litigation involving your firm.

To that end, please take note of the article below and govern yourselves accordingly!


Federal Judge Sanctions Tech Company Over Handling of E-Discovery

August 27, 2010

A federal judge has sanctioned a leading developer of “flash drive” technology for its mishandling of electronic discovery in what the judge called a “David and Goliath-like” struggle.

Southern District Judge William H. Pauley ruled that he would instruct the jury to draw a negative inference from the fact that SanDisk Corp., a company with a market capitalization of $8.7 billion, had lost the hard drives from laptop computers it issued to two former employees who are the plaintiffs in Harkabi v. Sandisk Corp., 08 Civ. 8230.

SanDisk must be “mortif[ied]” by the ex-employees’ argument that the company, as a leading purveyor of electronic data storage devices, cannot claim that it made an “innocent” mistake in losing the hard-drive data, Pauley wrote.

That argument is on target, the judge concluded, noting that SanDisk’s “size and cutting edge technology raises an expectation of competence in maintaining its own electronic records.”

Pauley also awarded $150,000 in attorney’s fees to the two plaintiffs, Dan Harkabi and Gidon Elazar, because of delays the company caused in producing their e-mails during the 17 months they worked for SanDisk.

In 2004, the plaintiffs sold a software company they had founded in Israel to SanDisk for $10 million up front. An additional $4 million was to be paid depending on the level of sales SanDisk realized over the next two years on products “derived” from technology developed by the Israeli company. As part of the deal, Harkabi and Elazar moved to New York and began working for SanDisk.

At the end of the two-year period, SanDisk contended the threshold for the Israeli software developers to claim their “earn-out” fee had not been met, and offered them $800,000. When the developers continued to demand the full $4 million, SanDisk ended their employment.

One of the key issues in the suit is whether a SanDisk flash drive called “U3” contained software “derived” from a product the two plaintiffs developed in Israel.

Flash drives are compact data storage devices about the size of a stick of gum used to transport data from one computer to another.

The Israeli company had developed software that could be used to encrypt flash drives so the data would be secured for personal use only. The owner would not be able to transfer copyrighted data such as movies, computer applications, books or other materials.

The two developers claim that SanDisk sold 15 million U3 flash drives. Under their contract, SanDisk had to sell 3.2 million flash drives utilizing an encryption system derived from the product plaintiffs had developed in Israel.

The developers contend that the U3 is derived from the Israeli product. SanDisk disputes any connection.

As the dispute began to heat up in 2007, the developers’ lawyers at the time asked SanDisk to preserve information on their client’s laptops.

SanDisk’s in-house counsel issued a “do-not-destroy” letter, and the two laptops were stored in a secure area for more than a year. But at some point a decision was made to re-issue the two laptops to other employees after the data from the hard drives had been separately preserved.

SanDisk’s response in the initial round of electronic discovery was a declaration from an in-house lawyer that “I have no reason to believe” the April 2007 “do-not-destroy” memo “was not fully complied with.”

SanDisk also produced 1.4 million documents, which it described as “everything” found in response to the developers’ electronic discovery demands. Six weeks later, however, the company acknowledged it was unable to retrieve the data from the laptops’ hard drives. But the two developers created their own software to analyze the 1.4 million documents received in discovery and concluded that much of their e-mail correspondence had not been turned over, according to the opinion.

SanDisk subsequently conceded that it had not turned over all of the developers’ e-mails, but has since begun the process of retrieving the missing e-mails from backup files.

A negative inference with regard to the data on the lost hard drives, Pauley concluded, is warranted because “the undisputed facts reveal a cascade of errors, each relatively minor,” which added to a significant discovery failure.

The loss of the hard-drive data has deprived the two developers of the opportunity to present “potentially powerful evidence” on the key issue of whether the U3 flash drive was derived from encryption software developed by the pair in Israel.

Although the missing e-mails eventually will be available at trial, Pauley concluded, SanDisk should nonetheless pay the developers $150,000 to cover their added legal costs for discovery.

SanDisk’s “misrepresentations” about its initial electronic document production, he wrote, “obscured the deficiencies and stopped discovery in its tracks.”

He added, “But for plaintiffs’ forensic analysis and their counsel’s persistence those deficiencies may not have come to light.”

Charles E. Bachman, of O’Melveny & Myers, who represented SanDisk, said the company would have no comment.

Harkabi and Elazar were represented by Charles A. Stillman and Daniel V. Shapiro of Stillman, Friedman & Shechtman.

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

Posted in chain in title, concealment, conflict of interest, conspiracy, CONTROL FRAUD, corruption, discovery, foreclosure, foreclosure fraud, foreclosures, forensic document examiner, forensic mortgage investigation audit, insider, investigation, MERS, MERSCORP, mortgage, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., Mortgage Foreclosure Fraud, notary fraud, note, quiet title, R.K. Arnold, Real Estate, robo signers, sanctioned, securitization, servicers, stopforeclosurefraud.com, Trusts, Wall Street1 Comment



2010 NY Slip Op 51482(U)



Supreme Court, Kings County.

Decided August 19, 2010.

Melissa A Sposato, Esq., Law Offices of Jordan Katz, PC, Melville NY, Plaintiff.

No Appearances, Defendant.


In this mortgage foreclosure action, plaintiff’s motion for an order of reference for the premises located at 732 Hendrix Street, Brooklyn, New York (Block 4305, Lot 22, County of Kings) is denied with prejudice. The complaint is dismissed. The notice of pendency filed against the above-named real property is cancelled. Plaintiff’s successor in interest, AMERICAN HOME MORTGAGE SERVICING, INC. (AHMSI), lacks standing to continue this action because the instant mortgage was satisfied on April 26, 2010. Plaintiff’s counsel never notified the Court that the mortgage had been satisfied and failed to discontinue the instant action with prejudice. I discovered that the mortgage had been satisfied by personally searching the Automated City Register Information System (ACRIS) website of the Office of the City Register, New York City Department of Finance. AHMSI’s President and Chief Executive Officer or its Executive Vice President, Chief Legal Officer and Secretary Jordan D. Dorchuck, Esq., its counsel, Melissa A. Sposato, Esq. and her firm, Jordan S. Katz, P.C., will be given an opportunity to be heard as to why this Court should not sanction them for making a “frivolous motion,” pursuant to 22 NYCRR §130-1.1.


Defendant DAPHINE MAITLAND (MAITLAND) borrowed $392,000.00 from original plaintiff ARGENT MORTGAGE COMPANY, LLC (ARGENT), on August 4, 2006. The loan was secured by a mortgage, recorded by ARGENT, at the Office of the City Register of the City of New York, New York City Department of Finance, on August 23, 2006, at City Register File Number (CRFN) XXXXXXXXXX. Defendant MAITLAND allegedly defaulted in her mortgage loan payments with her June 1, 2007 payment. ARGENT commenced the instant action with the filing of the summons, complaint and notice of pendency with the Kings County Clerk on November 8, 2007. Plaintiff’s counsel, on April 14, 2009, filed the instant motion for an order of reference with the Court’sForeclosure Department. After reviewing the papers, the Foreclosure Department forwarded the instant motion to me on August 16, 2010.

On August 16, 2010, I searched ACRIS and discovered that AHMSI, the successor in interest to plaintiff ARGENT, executed a satisfaction of the instant mortgage almost four months ago, on April 26, 2010. The satisfaction was executed in Idaho Falls, Idaho, by Krystal Hall, Vice President of “AMERICAN HOME MORTGAGE SERVICING, INC., AS SUCCESSOR TO CITI RESIDENTIAL LENDING, INC. AS SUCCESSOR TO ARGENT MORTGAGE COMPANY, LLC,” and the satisfaction was recorded at the Office of the City Register of the City of New York, on May 10, 2010, at CRFN XXXXXXXXXXXXX.

Successor plaintiff AHMSI is one of several companies controlled by billionaire investor Wilbur L. Ross, Jr. through his firm, W. L. Ross & Company. Louise Story, in her April 4, 2008 New York Times article, “Investors Stalk the Wounded of Wall Street,” described Mr. Ross as “a dean of vulture investing.” She wrote:

Almost two centuries ago, as Napoleon marched on Waterloo, a scion of the Rothschilds is said to have declared: The time to buy is when blood is running in the streets.

Now as red ink runs on Wall Street, the figurative heirs of the Rothschilds — bankers, traders, hedge fund gurus and takeover artists — are plotting to profit from today’s financial upheaval. These market opportunists — vulture investors in the Wall Street term — have begun to swoop. They are buying up mortgages of hard-pressed homeowners, the bank loans of cash-short businesses, and companies that seem to be hurtling to bankruptcy. And they are trying to buy them all on the cheap. . . .

“The only time you really know you’ve reached the bottom is when you’re back on the other side and things are going back up,” said Wilbur L. Ross, Jr., a dean of vulture investors, who made a fortune buying steel companies when no one else seemed to want them.

Such caution aside, his firm, W. L. Ross & Company, recently spent $2.6 billion for two mortgage servicers [AHMSI and Option One] and a bond insurance company. He said he planned to buy more as hedge funds and other investor sell at bargain prices.

Moreover, ACRIS revealed that defendant MAITLAND sold the premises to 732 HENDRIX STREET, LLC for $155,000.00, with the deed executed on April 5, 2010 and recorded on April 14, 2010, at the Office of the City Register of the City of New York, at CRFN XXXXXXXXXXXXX.

Plaintiff’s counsel never had the courtesy or professionalism to notify the Court that the instant mortgage was satisfied and file a motion to discontinue the instant action. The Court is gravely concerned that it: expended scarce resources on an action that should have been discontinued; and, would have signed an order that could have possibly damaged the credit rating of defendant MAITLAND and put an unfair cloud on the title to the subject premises now owned by 732 HENDRIX STREET, LLC, causing both defendant MAITLAND and 732 HENDRIX STREET, LLC much time and effort to correct an error caused by the failure of successor plaintiff AHMSI and plaintiff’s counsel to exercise due diligence. If successor plaintiff AHMSI is a responsible lender, not a vulture investor looking to profit “when blood is running in the streets,” it should have notified the Court that the subject mortgage had been satisfied.


It is clear that successor plaintiff AHMSI lacked standing to proceed in the instant action since some time prior to April 26, 2010, when the satisfaction for defendant MAITLAND’s mortgage was executed. The exact date is probably April 5, 2010, when defendant MAITLAND likely paid off the subject mortgage loan as part of her closing with 732 HENDRIX STREET, LLC, for the sale of the subject mortgaged premises. “To establish a prima facie case in an action to foreclose a mortgage, the plaintiff must establish the existence of the mortgage and the mortgage note, ownership of the mortgage, and the defendant’s default in payment.” (Campaign v Barba (23 AD3d 327 [2d Dept. 2005]). The instant mortgage was satisfied months before the instant motion for an order of reference was forwarded to me by the Foreclosure Department. The satisfaction, dated April 26, 2010, states that “AMERICAN HOME MORTGAGE INC. AS SUCCESSOR TO CITI RESIDENTIAL LENDING, INC. AS SUCCESSOR TO ARGENT MORTGAGE COMPANY, LLC . . . does hereby certify that a certain indenture of mortgage . . . to secure payment of the principal sum of $392,000.00, and interest, and duly recorded . . . document no. 2006000477619 on the 23rd day of August 2006, is PAID, and does hereby consent that the same be discharged of record.” (See Household Finance Realty Corp. of New York v Wynn, 19 AD3d 545 [2d Dept. 2005]; Sears Mortgage Corp. v Yahhobi, 19 AD3d 402 [2d Dept. 2005]; Ocwen Federal Bank FSB v Miller, 18 AD3d 527 [2d Dept. 2005]; U.S. Bank Trust Nat. Ass’n Trustee v Butti, 16 AD3d 408 [2d Dept 2005]; First Union Mortgage Corp. v Fern, 298 AD2d 490 [2d Dept 2002]; Village Bank v Wild Oaks, Holding, Inc., 196 AD2d 812 [2d Dept 1993]).

The Court of Appeals (Saratoga County Chamber of Commerce, Inc. v Pataki, 100 NY2d 801, 812 [2003], cert denied 540 US 1017 [2003]) declared that “[s]tanding to sue is critical to the proper functioning of the judicial system. It is a threshold issue. If standing is denied, the pathway to the courthouse is blocked. The plaintiff who has standing, however, may cross the threshold and seek judicial redress.”

In Caprer v Nussbaum (36 AD3d 176, 181 [2d Dept 2006]) the Court held that “[s]tanding to sue requires an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant’s request.” If a plaintiff lacks standing to sue, the plaintiff may not proceed in the action. (Stark v Goldberg, 297 AD2d 203 [1st Dept 2002]).

Since AHMSI executed the satisfaction for the instant mortgage, the Court must not only deny the instant motion, but also dismiss the complaint and cancel the notice of pendency filed by ARGENT with the Kings County Clerk on November 8, 2007. CPLR § 6501 provides that the filing of a notice of pendency against a property is to give constructive notice to any purchaser of real property or encumbrancer against real property of an action that “would affect the title to, or the possession, use or enjoyment of real property, except in a summary proceeding brought to recover the possession of real property.” Professor David Siegel, in NY Prac, § 334, at 535 [4th ed] observes about a notice of pendency that:

The plaintiff files it with the county clerk of the real property county, putting the world on notice of the plaintiff’s potential rights in the action and thereby warning all comers that if they then buy the property or lend on the strength of it or otherwise rely on the defendant’s right, they do so subject to whatever the action may establish as the plaintiff’s right.

The Court of Appeals, in 5303 Realty Corp. v O & Y Equity Corp. (64 NY2d 313, 315 [1984]), commented that “[a] notice of pendency, commonly known as a lis pendens,‘ can be a potent shield to litigants claiming an interest in real property.” The Court, at 318-320, outlined the history of the doctrine of lis pendens back to 17th century England. It was formally recognized in New York courts in 1815 and first codified in the Code of Procedure [Field Code] enacted in 1848. At 319, the Court stated that “[t]he purpose of the doctrine was to assure that a court retained its ability to effect justice by preserving its power over the property, regardless of whether a purchaser had any notice of the pending suit,” and, at 320, “the statutory scheme permits a party to effectively retard the alienability of real property without any prior judicial review.”

In Israelson v Bradley (308 NY 511, 516 [1955]) the Court observed that with a notice of pendency a plaintiff who has an interest in real property has received from the State:

an extraordinary privilege which . . . upon the mere filing of the notice of a pendency of action, a summons and a complaint and strict compliance with the requirements of section 120 [of the Civil Practice Act; now codified in CPLR § § 6501, 6511 and 6512] is required. Proper administration of the law by the courts requires promptness on the part of a litigant so favored and that he accept the shield which has been given him upon the terms imposed and that he not be permitted to so use the privilege granted that itbecomes a sword usable against the owner or possessor of realty. If the terms imposed are not met, the privilege is at an end. [Emphasis added]

Article 65 of the CPLR outlines notice of pendency procedures. The Court, in Da Silva v Musso (76 NY2d 436, 442 [1990]), held that “the specific statutorily prescribed mechanisms for implementing this provisional remedy . . . were designed with a view toward balancing the interests of the claimant in the preservation of the status quo against the equally legitimate interests of the property owner in the marketability of his title.” The Court of Appeals, quoted Professor Siegel, in holding that “[t]he ability to file a notice of pendency is a privilege that can be lost if abused’ (Siegel, New York Practice § 336, at 512).” (In Re Sakow, 97 NY2d 436, 441 [2002]).

The instant case, with successor plaintiff AHMSI lacking standing to bring this action and the complaint dismissed, meets the criteria for losing “a privilege that can be lost if abused.” CPLR § 6514 (a) provides for the mandatory cancellation of a notice of pendency by:

[t]he court, upon motion of any person aggrieved and upon such notice as it may require, shall direct any county clerk to cancel a notice of pendency, if service of a summons has not been completed within the time limited by section 6512; or if the action has been settled, discontinued or abated; or if the time to appeal from a final judgment against the plaintiff has expired; or if enforcement of a final judgment against the plaintiff has not been stayed pursuant to section 5519. [Emphasis added]

The plain meaning of the word “abated,” as used in CPLR § 6514 (a) is the ending of an action. Abatement is defined (Black’s Law Dictionary 3 [7th ed 1999]) as “the act of eliminating or nullifying.” “An action which has been abated is dead, and any further enforcement of the cause of action requires the bringing of a new action, provided that a cause of action remains’ (2A Carmody-Wait 2d § 11.1).” (Nastasi v Nastasi, 26 AD3d 32, 40 [2d Dept 2005]). Further, Nastasi at 36, held that “[c]ancellation of a notice of pendency can be granted in the exercise of the inherent power of the court where its filing fails to comply with CPLR 6501 (see 5303 Realty Corp. v O & Y Equity Corp. at 320-321; Rose v Montt Assets, 250 AD2d 451, 451-452 [1st Dept 1998]; Siegel, NY Prac § 336 [4th ed]).” AHMSI, as successor plaintiff, lacks standing to sue. Therefore, dismissal of the instant complaint must result in mandatory cancellation of the November 8, 2007 notice of pendency against the property “in the exercise of the inherent power of the Court.”

The failure of successor plaintiff AHMSI, by its President David M. Friedman or its Executive Vice President, Chief Legal Officer and Secretary Jordan D. Dorchuck, Esq., and its counsel, Melissa A. Sposato, Esq. and her firm, Jordan S. Katz, P.C., to discontinue the instant action since the April 2010 payoff of the MAITLAND mortgage appears to be “frivolous.” 22 NYCRR § 130-1.1 (a) states that “the Court, in its discretion may impose financial sanctions upon any party or attorney in a civil action or proceeding who engages in frivolous conduct as defined in this Part, which shall be payable as provided in section 130-1.3 of this Subpart.” Further, it states in 22 NYCRR § 130-1.1 (b), that “sanctions may be imposed upon any attorney appearing in the action or upon a partnership, firm or corporation with which the attorney is associated.”

22 NYCRR § 130-1.1 (c) states that:

For purposes of this part, conduct is frivolous if:

(1) it is completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law;

(2) it is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another; or

(3) it asserts material factual statements that are false.

It is clear that since at least April 26, 2010 the instant motion for aan order of reference “is completely without merit in law” and “asserts material factual statements that are false.”

Several years before the drafting and implementation of the Part 130 Rules for costs and sanctions, the Court of Appeals (A.G. Ship Maintenance Corp. v Lezak, 69 NY2d 1, 6 [1986]) observed that “frivolous litigation is so serious a problem affecting the proper administration of justice, the courts may proscribe such conduct and impose sanctions in this exercise of their rule-making powers, in the absence of legislation to the contrary (see NY Const, art VI, § 30, Judiciary Law § 211 [1] [b] ).”

Part 130 Rules were subsequently created, effective January 1, 1989, to give the courts an additional remedy to deal with frivolous conduct. These stand beside Appellate Division disciplinary case law against attorneys for abuse of process or malicious prosecution. The Court, in Gordon v Marrone (202 AD2d 104, 110 [2d Dept 1994], lv denied 84 NY2d 813 [1995]), instructed that:

Conduct is frivolous and can be sanctioned under the court rule if “it is completely without merit . . . and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law; or . . .

it is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another” (22 NYCRR 130-1.1[c] [1], [2] . . . ).

In Levy v Carol Management Corporation (260 AD2d 27, 33 [1st Dept 1999]) the Court stated that in determining if sanctions are appropriate the Court must look at the broad pattern of conduct by the offending attorneys or parties. Further, “22 NYCRR 130-1.1 allows us to exercise our discretion to impose costs and sanctions on an errant party . . .” Levy at 34, held that “[s]anctions are retributive, in that they punish past conduct. They also are goal oriented, in that they are useful in deterring future frivolous conduct not only by the particular parties, but also by the Bar at large.”

The Court, in Kernisan, M.D. v Taylor (171 AD2d 869 [2d Dept 1991]), noted that the intent of the Part 130 Rules “is to prevent the waste of judicial resources and to deter vexatious litigation and dilatory or malicious litigation tactics (cf. Minister, Elders & Deacons of Refm. Prot. Church of City of New York v 198 Broadway, 76 NY2d 411; see Steiner v Bonhamer, 146 Misc 2d 10) [Emphasis added].” Since at least April 26, 2010, and probably since April 5, 2010, the instant action is “a waste of judicial resources.” This conduct, as noted in Levy, must be deterred. In Weinstock v Weinstock (253 AD2d 873 [2d Dept 1998]) the Court ordered the maximum sanction of $10,000.00 for an attorney who pursued an appeal “completely without merit,” and holding, at 874, that “[w]e therefore award the maximum authorized amount as a sanction for this conduct (see, 22 NYCRR 130-1.1) calling to mind that frivolous litigation causes a substantial waste of judicial resources to the detriment of those litigants who come to the Court with real grievances [Emphasis added].” Citing Weinstock, the Appellate Division, Second Department, in Bernadette Panzella, P.C. v De Santis (36 AD3d 734 [2d Dept 2007]) affirmed a Supreme Court, Richmond County $2,500.00 sanction, at 736, as “appropriate in view of the plaintiff’s waste of judicial resources [Emphasis added].”

In Navin v Mosquera (30 AD3d 883 [3d Dept 2006]) the Court instructed that when considering if specific conduct is sanctionable as frivolous, “courts are required to examine whether or not the conduct was continued when its lack of legal or factual basis was apparent [or] should have been apparent’ (22 NYCRR 130-1.1 [c]).” The Court, in Sakow ex rel. Columbia Bagel, Inc. v Columbia Bagel, Inc. (6 Misc 3d 939, 943 [Sup Ct,

New York County 2004]), held that “[i]n assessing whether to award sanctions, the Court must consider whether the attorney adhered to the standards of a reasonable attorney (Principe v Assay Partners, 154 Misc 2d 702 [Sup Ct, NY County 1992]).” In the instant action, plaintiff’s Chief Legal Officer or its outside counsel is responsible for keeping track of whether the mortgage was satisfied. In Sakow at 943, the Court observed that “[a]n attorney cannot safely delegate all duties to others.”

This Court will examine the conduct of successor plaintiff AHMSI and plaintiff’s counsel, in a hearing, pursuant to 22 NYCRR § 130-1.1, to determine if plaintiff AHMSI, by its President, David M. Friedman, or its Executive Vice President, Chief Legal Officer and Secretary, Jordan D. Dorchuck, Esq., and plaintiff’s counsel Melissa A. Sposato, Esq. and her firm Jordan S. Katz, P.C. engaged in frivolous conduct, and to allow successor plaintiff AHMSI, by its President David M. Friedman or Executive Vice President, Chief Legal Officer and Secretary Jordan D. Dorchuck, Esq., and plaintiff’s counsel Melissa A. Sposato, Esq. and her firm Jordan S. Katz, P.C. a reasonable opportunity to be heard. The Court is aware that AHMSI’s Chief Legal Officer, Mr. Dorchuck, is a member of the New York State Bar. (See Mascia v Maresco, 39 AD3d 504 [2d Dept 2007]; Yan v Klein, 35 AD3d 729 [2d Dept 2006]; Greene v Doral Conference Center Associates, 18 AD3d 429 [2d Dept 2005]; Kucker v Kaminsky & Rich, 7 AD3d 39 [2d Dept 2004]).


Accordingly, it is

ORDERED, that the motion of successor plaintiff, AMERICAN HOME MORTGAGE SERVICING, INC., for an order of reference for the premises located at 732 Hendrix Street, Brooklyn, New York (Block 4305, Lot 22, County of Kings), is denied with prejudice; and it is further

ORDERED, that because successor plaintiff, AMERICAN HOME MORTGAGE SERVICING, INC., lacks standing and no longer is the mortgagee in this foreclosure action, the instant complaint, Index No. 41383/07 is dismissed with prejudice; and it is further

ORDERED, that the Notice of Pendency filed with the Kings County Clerk on November 8, 2007, by original plaintiff, ARGENT MORTGAGE COMPANY, LLC, in an action to foreclose a mortgage for real property located at 732 Hendrix Street, Brooklyn, New York (Block 4305, Lot 22, County of Kings), is cancelled; and it is further

ORDERED, that it appearing that successor plaintiff AMERICAN HOME MORTGAGE SERVICING, INC., Melissa A. Sposato, Esq. and Jordan S. Katz, P.C. engaged in “frivolous conduct,” as defined in the Rules of the Chief Administrator, 22 NYCRR § 130-1 (c), and that pursuant to the Rules of the Chief Administrator, 22 NYCRR § 130.1.1 (d), “[a]n award of costs or the imposition of sanctions may be made. . . upon the court’s own initiative, after a reasonable opportunity to be heard,” this Court will conduct a hearing affording: successor plaintiff AMERICAN HOME MORTGAGE SERVICING, INC., by its President David M. Friedman or Executive Vice President, Chief Legal Officer and Secretary, Jordan D. Dorchuck, Esq.; Melissa A. Sposato, Esq.; and, Jordan S. Katz, P.C.; “a reasonable opportunity to be heard” before me in Part 27, on Monday, September 13, 2010, at 2:30 P.M., in Room 479, 360 Adams Street, Brooklyn, NY 11201; and it is further

ORDERED, that because the headquarters of successor plaintiff AMERICAN HOME MORTGAGE SERVICING, INC. is in Irving, Texas, Mr. Friedman or Mr. Dorchuck may appear either in person or by telephone; and it is further

ORDERED, that Ronald David Bratt, Esq., my Principal Law Clerk, is directed to serve this order by first-class mail, upon: David M. Friedman, President of successor plaintiff AMERICAN HOME MORTGAGE SERVICING, INC., 4600 Regent Boulevard, Suite 200, Irving, Texas 75063; Jordan D. Dorchuck, Esq., Executive Vice President, Chief Legal Officer and Secretary of successor plaintiff AMERICAN HOME MORTGAGE SERVICING, INC., 4600 Regent Boulevard, Suite 200, Irving, Texas 75063; Melissa A. Sposato, Esq., Law Offices of Jordan S. Katz, P.C., 395 North Service Road, Suite 401, Melville, New York XXXXX-XXXX; and Jordan S. Katz, P.C., 395 North Service Road, Suite 401, Melville, New York XXXXX-XXXX.

This constitutes the Decision and Order of the Court.

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

Posted in bogus, chain in title, citi, concealment, conflict of interest, conspiracy, CONTROL FRAUD, corruption, discovery, dismissed, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, inc., investigation, judge arthur schack, lawsuit, mortgage, Mortgage Foreclosure Fraud, non disclosure, note, quiet title, Real Estate, scam, Violations2 Comments



Legal information is NOT legal advice. The material or information herein should NOT be taken as legal advice and is NOT a substitute for the assistance of a licensed advisor. I AM NOT AN ATTORNEY.

If you are facing foreclosure or have a sale date pending and you have proper legal grounds to challenge the foreclosure etc., there is a handful of strategies. You may be able to get a Temporary Restraining Order (TRO) and eventually a Preliminary Injunction.

Hopefully, there is valid grounds to halt the foreclosure sale.

Do however, be cautious NOT to file a lawsuit to simply try to delay, look at the options you have:

Do NOT go with the mind set you are going to get a free and clear house.

Do your research before shot gunning to file a Quiet Title. Again, what are the requirements in order to have this ground? This might fire back at you.

If you are not certain of what to do next contact a knowledgeable foreclosure defense attorney. I made a list of what to look for before choosing an Attorney who understands foreclosure defense.

[ipaper docId=30727439 access_key=key-si3seeiaeqhgidqv9yh height=600 width=600 /]

Disclaimer: The information herein should not be taken as legal advice and is not a substitute for the assistance of a licensed advisor. I AM NOT AN ATTORNEY.

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

Posted in foreclosure, foreclosure fraud, foreclosures, lawsuit, quiet title, tila, TRO, truth in lending act, Violations0 Comments

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