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GMAC v Del Valle | FL Cir. Court – Albertelli Law Order to Show Cause – Robo-Signing…Use of Disbarred David J. Stern Assignment During Trial

GMAC v Del Valle | FL Cir. Court – Albertelli Law Order to Show Cause – Robo-Signing…Use of Disbarred David J. Stern Assignment During Trial

Excellent job to Attorney Kenneth Eric Trent!

IN THE CIRCUIT COURT OF SEVENTEENTH JUDICIAL CIRCUIT
IN AND FOR BROWARD COUNTY, FLORIDA

GMAC MORTGAGE, LLC

Plaintiff,

v.

MYRIAM E. DEL VALLE

Defendant.

Order to Show Cause by DinSFLA on Scribd

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Sanabria v. PENNYMAC MORTGAGE INVESTMENT TRUST HOLDINGS I LLC | FL 2DCA- “the copy of the note attached to the complaint does not contain Defendant’s signature and is not the note signed by Defendant.”

Sanabria v. PENNYMAC MORTGAGE INVESTMENT TRUST HOLDINGS I LLC | FL 2DCA- “the copy of the note attached to the complaint does not contain Defendant’s signature and is not the note signed by Defendant.”

 

LUZ SANABRIA and GAETANO PIRO, Appellants,
v.
PENNYMAC MORTGAGE INVESTMENT TRUST HOLDINGS I LLC. Appellee.

Case No. 2D15-866.
District Court of Appeal of Florida, Second District.
Opinion filed July 15, 2016.
Appeal from the Circuit Court for Manatee County; Thomas M. Gallen, Senior Judge.

Danny E. Eskanos, Clearwater, for Appellants.

Alen H. Hsu of Blank Rome, LLP, Boca Raton; and Michelle Gevias, Paul M. Messina and Manuel S. Hiraldo of Blank Rome LLP, Tampa, for Appellee.

LUCAS, Judge.

Luz Sanabria and Gaetano Piro (the homeowners) appeal the entry of a final judgment of foreclosure in favor of Pennymac Mortgage Investment Trust Holdings I, LLC (Pennymac Trust). The homeowners raise several issues on appeal. Although we are precluded from reaching the merits of their arguments concerning Pennymac Trust’s standing, we nevertheless reverse the final judgment of foreclosure because the circuit court erroneously found that the homeowners had failed to sufficiently plead a properly raised affirmative defense challenging the authenticity of Ms. Sanabria’s signature on a promissory note.

I.

In 2007, in connection with the purchase of their home in Manatee County,

Ms. Sanabria executed a promissory note in favor of American Lending Group, Inc., and, along with her husband, Mr. Piro, a mortgage securing that note in favor of Mortgage Electronic Service, as nominee for American Lending Group. In February 2012, Pennymac Trust filed a complaint against the homeowners, claiming that the homeowners had defaulted on the note and that Pennymac Trust had assumed the right to enforce their note and mortgage through various assignments that, for brevity’s sake, we need not recount. The complaint proceeded, in a somewhat convoluted fashion, through different iterations until it reached the operative pleading, a second amended complaint, and the plaintiff filed what purported to be a copy of the borrower’s original note.[1]

In response to the second amended complaint, the homeowners alleged, as their ninth affirmative defense, the following:

With regard to all counts of the Complaint, the Plaintiff’s claims are barred in whole or in part because the Defendants affirmatively question the veracity and authenticity of any possible endorsement made on any purported note or allonge the Plaintiff may produce pursuant to Fla. Stat. § 673.3081 (2011), assuming, without conceding, that such endorsement exists. Specifically, the Defendants question the veracity and authenticity of any possible endorsement because: (1) there is no mention in the Complaint as to who the endorser is; (2) there is no mention in the Complaint as to what authority the purported endorser may so endorse, (3) the indorsement wasn’t on the documents attached to the original complaint, and (4) the copy of the note attached to the complaint does not contain Defendant’s signature and is not the note signed by Defendant.

(Emphasis added.) Pennymac Trust filed a reply to this defense which, with respect to the issue of Ms. Sanabria’s signature, asserted that the homeowners had failed to plead an issue of “fraud” with sufficient particularity and that there is no proof “that any signature . . . is fraudulent.” The case then proceeded to a nonjury trial on October 14, 2014.

The homeowners’ case-in-chief focused squarely on their claim that Pennymac Trust’s note was not the one Ms. Sanabria signed. The homeowners called as a witness Michael Infanti, Esq., an attorney with the law firm that had performed their original mortgage closing when they purchased the home. Mr. Infanti produced a copy of the note kept by his law firm from the closing. The copy of the note produced by Mr. Infanti contained five pages, with Ms. Sanabria’s signature appearing on the fifth page. In contrast, the copy of the note produced by Pennymac Trust contained six pages, and Ms. Sanabria’s signature appeared on the sixth page. Ms. Sanabria then testified that the signature and initials appearing on Pennymac Trust’s copy of the note were not hers and that its note contained different language than what was in Mr. Infanti’s copy of the note. Finally, the homeowners attempted to call as an expert witness a forensic document examiner, Ms. Jean J. Berrie-Perrino. The court precluded Ms. Berrie-Perrino from testifying, ruling that the homeowners’ defense had not been adequately pleaded. According to the court, the homeowners had essentially waived any defense regarding the authenticity of the note’s signature by failing to specifically plead that issue, citing in support of its ruling the case of Riggs v. Aurora Loan Servs., LLC, 36 So. 3d 932 (Fla. 4th DCA 2010). However, the homeowners proffered the substance of Ms. Berrie-Perrino’s testimony, which would have been that Ms. Sanabria’s signature on Pennymac Trust’s copy of the note and the signature of Ms. Sanabria on Mr. Infanti’s copy of the note from the closing were not executed by the same person.

II.

The circuit court’s ruling, which deemed the homeowners’ authenticity defense as having been improperly pleaded, was premised on the sufficiency of their pleading. We review such an issue de novo. See Ladner v. AmSouth Bank, 32 So. 3d 99, 103 (Fla. 2d DCA 2009) (“The determination of the sufficiency of a pleading is a matter of law and subject to a de novo review.”); Mercedes Lighting & Elec. Supply, Inc. v. Dep’t of Gen. Servs., 560 So. 2d 272, 277 (Fla. 1st DCA 1990) (“[A] decision whether a pleading or motion is legally sufficient involves a question of law subject to de novo review by the appellate court.”).

Throughout the proceedings below and in this appeal, the parties and the circuit court have framed the sufficiency of the homeowners’ defense in terms of section 673.3081, Florida Statutes (2012). Cf. Riggs, 36 So. 3d at 933 (quoting statute and affirming summary judgment in favor of loan servicing company where authentication of the note was not at issue). That statute, a part of Florida’s Uniform Commercial Code, includes what is arguably a heightened civil pleading requirement when a dispute over a signature’s authenticity is raised in connection with a negotiable instrument such as a mortgage note. Section 673.3081(1) reads, in relevant part:

In an action with respect to an instrument, the authenticity of, and authority to make, each signature on the instrument is admitted unless specifically denied in the pleadings. If the validity of a signature is denied in the pleadings, the burden of establishing validity is on the person claiming validity, but the signature is presumed to be authentic and authorized unless the action is to enforce the liability of the purported signer and the signer is dead or incompetent at the time of trial of the issue of validity of the signature.

(Emphasis added.)

Pennymac Trust likens the statute’s passing reference to “specifically” denying a signature’s authenticity to the specificity required to plead a cause of action for fraud under Florida Rule of Civil Procedure 1.120(b): “In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with such particularity as the circumstances may permit.” The circuit court—and to a large measure, the homeowners, as well—appeared to accept Pennymac Trust’s underlying premise that section 673.3081(1) alters civil pleading practice by imposing a heightened specificity requirement when the authenticity of a note’s signature is challenged. Proceeding under that assumption, the homeowners argue that they met this heightened standard of pleading with their ninth affirmative defense.

At the outset, we note the peculiar dilemma of applying a statutory provision that purports to prescribe an aspect of civil practice or procedure. Cf. Massey v. David, 979 So. 2d 931, 937 (Fla. 2008) (“Moreover, where [the Florida Supreme Court] has promulgated rules that relate to practice and procedure, and a statute provides a contrary practice or procedure, the statute is unconstitutional to the extent of the conflict.”); Caple v. Tuttle’s Design-Build, Inc., 753 So. 2d 49, 53 (Fla. 2000) (“The distinction between substantive and procedural law is neither simple nor certain . . . .”); In re Commitment of Cartwright, 870 So. 2d 152, 158 (Fla. 2d DCA 2004) (“The fact that a statutory provision could appropriately be labeled `procedural’ does not necessarily mean that it violates article V, section 2(a) [of the Florida constitution].”); Adhin v. First Horizon Home Loans, 44 So. 3d 1245, 1251 (Fla. 5th DCA 2010) (recognizing that where “a statute contains some procedural aspects, but those provisions are intimately intertwined with the substantive rights created by the statute, the statute will not be viewed as impermissibly intruding on the practice and procedure of the courts in a constitutional sense”).[2]

Regardless, under either a general or a heightened, “specific” pleading standard, we are satisfied that the authenticity of Ms. Sanabria’s signature was an issue that was adequately pleaded and presented for adjudication. None of the cases Pennymac Trust cites in support of affirmance persuades us otherwise. Indeed, the few Florida decisions to address the pleading requirement that section 673.3081(1) appears to impose only arise in the context of a defendant who failed to plead the issue of authenticity as an affirmative defense. See, e.g., Davis v. Timeshare Travel Int’l, Inc., 489 So. 2d 47, 48-49 (Fla. 2d DCA 1986) (noting, in dicta, that guarantor’s equivocating testimony about her signature could not overcome statutory presumption of its validity where she had only pleaded a general denial to the lender’s claims within her answer); Riggs, 36 So. 3d at 933 (“Nothing in the pleadings placed the authenticity of Alday’s signature at issue.”); Lipton v. Se. First Nat’l Bank of Miami, 343 So. 2d 927, 928 (Fla. 3d DCA 1977) (holding that general denials in response to a bank’s complaint failed to meet the requirements of section 673.307(1) and so the borrower’s signatures were deemed admitted); Ferris v. Nichols, 245 So. 2d 660, 661 (Fla. 4th DCA 1971) (observing that defendant, who asserted no affirmative defenses, failed to plead the issue of a signature’s authenticity; “[h]ad the defendant desired to deny that he signed the note, he should have done so by a specific denial addressed to the appropriate allegations in the complaint”).

Here, however, the homeowners fashioned an affirmative defense that plainly denied the authenticity of Ms. Sanabria’s signature on a specific document: “the copy of the note attached to the complaint does not contain Defendant’s signature and is not the note signed by Defendant.” The court and the parties were adequately apprised by this defensive pleading that the homeowners were challenging the veracity of Ms. Sanabria’s signature on the note Pennymac Trust sought to enforce in foreclosure. Cf. VonDrasek v. City of St. Petersburg, 777 So. 2d 989, 991 n.1 (Fla. 2d DCA 2000) (quoting commentary to rule 1.110: “The contents of a pleading . . . should clearly and adequately inform the judge and the opposing party . . . of the position of the pleader”). The homeowners sufficiently alleged their denial of a signature’s authenticity in their affirmative defense, and they were entitled to have that issue decided in their case.

III.

The circuit court erred when it ruled that the issue of Ms. Sanabria’s signature’s authenticity had not been adequately pleaded for the court’s determination. Accordingly, we reverse the final judgment of foreclosure and remand this case for further proceedings.

Reversed and remanded.

CRENSHAW, J., Concurs.

KHOUZAM, J., Concurs specially with opinion.

KHOUZAM, Judge, Concurring specially.

I agree fully with the result of the majority opinion. I write only to note that the majority’s discussion of the constitutionality of section 673.3081(1) has no bearing on the outcome of this case in light of our determination that the homeowners sufficiently raised and pleaded their authenticity defense under either pleading standard.

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

[1] There was, it seems, a degree of confusion on the plaintiff’s part concerning the precise “Pennymac” entity—whether it was Pennymac Trust or a similarly named (but presumably separate) entity known as Pennymac Corporation— that had the right to enforce the homeowners’ note and pursue this litigation. Through pleading amendments and an order of substitution, the plaintiff’s identity vacillated back and forth at various times in the case below. We cannot attempt to unravel this confusion because the homeowners failed to adequately preserve the issue of plaintiff’s standing in their motion for involuntary dismissal. See Franklin v. Patterson-Franklin, 98 So. 3d 732, 738 (Fla. 2d DCA 2012) (“In order to be preserved for further review by a higher court, an issue must be presented to the lower court and the specific legal argument or ground to be argued on appeal or review must be part of that presentation if it is to be considered preserved.” (quoting Sunset Harbour Condo. Ass’n v. Robbins, 914 So. 2d 925, 928 (Fla. 2005))). We trust that, on remand, the circuit court will attend to the question of the plaintiff’s standing at the time the lawsuit was filed, should it be raised again. See Corrigan v. Bank of America, N.A., 41 Fla. L. Weekly D345, D346 (Fla. 2d DCA Feb. 5, 2016). For ease of reference, in this opinion we will simply refer to the plaintiff below as Pennymac Trust, the appellant in the case at bar.

[2] We note that nothing within rule 1.110 (governing answers), rule 1.120 (pleading “special matters,” including fraud), or the relatively recently enacted rule 1.115 (pleading mortgage foreclosures) mentions a heightened or more specific pleading standard in cases where a litigant wishes to challenge the authenticity of a signature.

 

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WHITE PAPER | GUIDING PRINCIPLES FOR THE FUTURE OF LOSS MITIGATION: HOW THE LESSONS LEARNED FROM THE FINANCIAL CRISIS CAN INFLUENCE THE PATH FORWARD

WHITE PAPER | GUIDING PRINCIPLES FOR THE FUTURE OF LOSS MITIGATION: HOW THE LESSONS LEARNED FROM THE FINANCIAL CRISIS CAN INFLUENCE THE PATH FORWARD

GUIDING PRINCIPLES
FOR THE FUTURE OF
LOSS MITIGATION:
HOW THE LESSONS LEARNED FROM
THE FINANCIAL CRISIS
CAN
INFLUENCE THE PATH FORWARD

EXECUTIVE SUMMARY
This white paper has been prepared by the U.S. Department of the Treasury (Treasury) in conjunction with the U.S. Department of Housing and Urban Development (HUD) and the Federal Housing Finance Agency (FHFA) —together the Agencies —to continue the collaborative efforts of the past seven years to stabilize the housing market and help struggling homeowners recover from the financial crisis. With the termination of crisis-era programs at the end of this year, the Agencies are working with stakeholders to maintain strong loss mitigation programs going for
ward. This white paper examines the evolution of loss mitigation programs administered by the Agencies, and discusses the lessons learned from such programs. The paper also lays out five guiding principles that should be a foundation for future loss mitigation programs: accessibility, affordability, sustainability, transparency, and accountability.

The financial crisis of 2008 revealed that the mortgage servicing industry was ill-equipped to adequately respond to the needs of struggling homeowners. Indeed, there was no standard approach among mortgage servicers and investors about how to respond to homeowners who wanted to continue making payments, but were in need of mortgage assistance. Most solutions offered by servicers simply added unpaid interest and fees to the mortgage balance, which often resulted in higher—and thereby less sustainable—payments for homeowners, regardless of a hardship.

In early 2009, a government-sponsored program—Making Home Affordable (MHA)—was established to provide foreclosure alternatives to homeowners impacted by the financial crisis. The Home Affordable Modification Program (HAMP), the first and largest program under MHA, provided a standard for mortgage modifications that crossed mortgage servicer and investor types, with the goal of reducing struggling homeowners’ monthly mortgage payments to an affordable and sustainable amount.

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HERNANDEZ v WILLIAMS, ZINMAN  & PARHAM PC | FDCPA CLASS ACTION DISMISSAL REVERSED BY 9TH CIRCUIT

HERNANDEZ v WILLIAMS, ZINMAN & PARHAM PC | FDCPA CLASS ACTION DISMISSAL REVERSED BY 9TH CIRCUIT

H/T Dave Krieger

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

MARIA HERNANDEZ, on
behalf of herself and all
others similarly situated,
Plaintiff-Appellant,

v.

WILLIAMS, ZINMAN & ARHAM PC,
Defendant-Appellee.

Appeal from the United States District Court
for the District of Arizona
Stephen M. McNamee, District Judge, Presiding

Argued and Submitted March 17, 2016
San Francisco, California

Filed July 20, 2016

Before: John T. Noonan, Ronald M. Gould,
and Michelle T. Friedland, Circuit Judges.

Opinion by Judge Friedland

SUMMARY*

Fair Debt Collection Practices Act The panel reversed the district court’s summary judgment in favor of the defendant in an action under the Fair Debt Collection Practices Act.

The Act requires that within five days of “the initial communication” with a consumer about the collection of a debt, a debt collector must send the consumer a notice containing specific disclosures. The panel held that this requirement, set forth in 15 U.S.C. § 1692g(a), does not apply only to the initial debt collector that tries to collect, but also applies to subsequent collectors that communicate about the same debt.

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TFH 7/24 | Foreclosure Workshop #17: Ke Kailani Partners v. Michael J. Fuchs — A Yankee in King Kamehameha’s Court

TFH 7/24 | Foreclosure Workshop #17: Ke Kailani Partners v. Michael J. Fuchs — A Yankee in King Kamehameha’s Court

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

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

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

.

.

Sunday – July 24, 2016

Foreclosure Workshop #17: Ke Kailani Partners v. Michael J. Fuchs — A Yankee in King Kamehameha’s Court

This is going to be an incredible show, sharing unusual insight into the inner workings of America’s appellate courts in foreclosure cases.

Hurricane Darby, however, is expected to possibly arrive in Honolulu beforehand sometime Saturday evening, as a result of which apologies if we lose electrical power and the show needs to be rescheduled for the following Sunday, but presently we are planning to be on the air nationwide this Sunday as usual, bringing our listeners unique firsthand knowledge of what is going on in this Nation’s Courts.

We will update you if necessary on our website at www.foreclosurehour.com.

Our co-host John Waihee is a delegate attending the Democratic National Convention in Philadelphia, but plans to be with us nevertheless by telephone.

Don’t miss this one.
~

 

.
Host: Gary Dubin - Co-Host: John Waihee -

.

CALL IN AT (808) 521-8383 OR TOLL FREE (888) 565-8383

Have your questions answered on the air.

Submit questions to info@foreclosurehour.com

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

Past Broadcasts

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

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HSBC Bankers Are First Individuals Charged in U.S. Currency Case

HSBC Bankers Are First Individuals Charged in U.S. Currency Case

Bloomberg-

Federal agents surprised an HSBC Holdings Plc executive as he prepared to fly out of New York’s Kennedy airport around 7:30 p.m. Tuesday, arresting him for an alleged front-running scheme involving a $3.5 billion currency transaction in 2011.

Mark Johnson, HSBC’s global head of foreign exchange cash trading in London, was held in a Brooklyn jail overnight and will appear in court Wednesday, according to prosecutors. The U.S. unsealed a complaint against him and Stuart Scott, the bank’s former head of currency trading in Europe, making them the first individuals to be charged in the long-running probe.

The arrest and charges are a coup for the Justice Department, which has struggled to build cases against individuals in its investigation into foreign-exchange trading at global banks. U.S. prosecutors once had so much confidence in the quality of evidence they were gathering thanks to undercover cooperators that in September 2014, then-Attorney General Eric Holder said he expected charges against individuals within months. The U.K. Serious Fraud Office also found it difficult to make cases against currency traders and announced in March that it was dropping its efforts.

[BLOOMBERG]

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Washington state invalidates common mortgage provision

Washington state invalidates common mortgage provision

The Olympian-

Laura Jordan came home from work one day to find herself locked out. She had missed two mortgage payments, and the company servicing her loan had changed the locks without warning.

In a ruling this month, the Washington Supreme Court found that action illegal — a decision that clears the way for a federal class-action case that Jordan brought on behalf of at least 3,600 borrowers in the state, and one that could have broad ramifications on how some lenders respond when homeowners miss payments.

“This is criminal trespass and theft, and it should be treated as such,” said Sheila O’Sullivan, executive director of the Northwest Consumer Law Center. “There’s no basis for them to walk in and change the locks on a person’s home until they have foreclosed. It’s an important ruling.”

The mortgage industry is wrestling with the significance of the 6-3 ruling, which found that provisions standard in mortgage documents around the country conflict with state law. The provisions allow for lenders to change locks, winterize homes or take other steps to preserve the value of properties that are in default or abandoned.

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CFPB Takes Action to Halt Illegal Debt Collection Practices By Lawsuit Mill and Debt Buyer

CFPB Takes Action to Halt Illegal Debt Collection Practices By Lawsuit Mill and Debt Buyer

CFPB-

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) today ordered the debt collection law firm Pressler & Pressler, LLP, two principal partners, and New Century Financial Services, Inc., a debt buyer, to stop churning out unfair and deceptive debt collection lawsuits based on flimsy or nonexistent evidence. The consent orders bar the companies and individuals from illegal practices that can deceive or intimidate consumers, such as filing lawsuits without determining if debts in question are valid. The orders also require the firm and the named partners to pay $1 million, and New Century to pay $1.5 million to the Bureau’s Civil Penalty Fund.

“For years, Pressler & Pressler churned out one lawsuit after another to collect debts for New Century that were not verified and might not exist,” said CFPB Director Richard Cordray. “Debt collectors that file lawsuits with no regard for their validity break the law and violate the public trust. We will continue to take action to protect borrowers from abuse.”

Pressler & Pressler is a New Jersey-based law firm that collects consumers’ debts for creditors through lawsuits and other means. New Century Financial Services, also based in New Jersey, buys and collects defaulted consumer debts and hands off those accounts to Pressler & Pressler for collection. To collect alleged debts on behalf of New Century and others, Pressler & Pressler filed hundreds of thousands of lawsuits against consumers.  Sheldon H. Pressler and Gerard J. Felt, partners of the firm, each participated in the firm’s debt collection litigation practices.

The CFPB found that to mass-produce these lawsuits, Pressler & Pressler used an automated claim-preparation system and non-attorney support staff to determine which consumers to sue. Attorneys generally spent less than a few minutes, sometimes less than 30 seconds, reviewing each case before initiating a lawsuit. This process allowed the firm to generate and file hundreds of thousands of lawsuits against consumers in New Jersey, New York, and Pennsylvania between 2009 and 2014. The CFPB found that the respondents violated the Fair Debt Collection Practices Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, which prohibits unfair and deceptive acts or practices in the consumer financial marketplace. Specifically, the CFPB found that Pressler & Pressler, the firm’s named partners, and New Century Financial Services:

  • Made false or empty allegations about consumer debts: The CFPB found that the firm, the named partners, and New Century filed lawsuits against consumers without sufficient basis. Neither the firm nor New Century reviewed documents supporting the validity of debts.
  • Filed lawsuits based on unreliable or false information: Some consumers had previously challenged the validity or accuracy of the debts, but the firm or New Century did not obtain or review information to justify their claims. The firm and New Century also filed suits and collected debt knowing that some account portfolios targeted for lawsuits contained unreliable or false information.
  • Harassed consumers with unsubstantiated court filings: The CFPB found that the firm, the named partners, and New Century filed collection suits generated mainly by automated processes that relied on summary data. The firm won the vast majority of the lawsuits by default when consumers did not defend themselves, even though neither Pressler & Pressler nor New Century had verified that the debts were actually owed.

Enforcement Action

Under the Dodd-Frank Act, the CFPB has the authority to take action against institutions or individuals that engage in unfair, deceptive, or abusive acts or practices. The CFPB also has authority over debt collection practices under the Fair Debt Collection Practices Act. The CFPB orders require that Pressler & Pressler, the firm’s named partners, and New Century Financial Services must:

  • Stop filing lawsuits with unsubstantiated claims: Pressler & Pressler, the named partners, and New Century cannot file lawsuits or threaten to sue to collect debts unless they obtain and review specific account-level documents and information showing the debt is accurate and enforceable.
  • Ensure accurate court filings: The firm, the named partners, and New Century may not use affidavits as evidence to collect debts unless they accurately describe relevant facts including that the individual executing the affidavit has personal knowledge of the debt, or, if not, has reviewed documentation related to the debt. The firm must also keep an electronic record showing it is following proper procedures.
  • Pay civil penalties: The firm and the named partners must pay a penalty of $1 million to the CFPB’s Civil Penalty Fund. New Century must pay a penalty of $1.5 million.

The CFPB’s order against Pressler & Pressler and the named partners is available at: http://files.consumerfinance.gov/f/documents/201604_cfpb_consent-order-pressler-pressler-llp-sheldon-h-pressler-and-gerard-j-felt.pdf 

The CFPB’s order against New Century Financial Services is available at: http://files.consumerfinance.gov/f/documents/201604_cfpb_consent-order_new-century-financial-services-inc.pdf 

This action continues the Bureau’s work to address illegal debt collection practices across the consumer financial marketplace, including companies that sell, buy, and collect debt. In recent separate enforcement actions, the CFPB has ordered large banks, credit card issuers, debt buyers, and firms to overhaul their debt collection practices and refund millions to harmed consumers. The Bureau will continue working to ensure all players in the collections market treat consumers fairly.

###
The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.

Source: http://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-action-halt-illegal-debt-collection-practices-lawsuit-mill-and-debt-buyer/

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CFPB Sanctions Law Firm and Debt Buyer For Failing to Review Account Documentation

CFPB Sanctions Law Firm and Debt Buyer For Failing to Review Account Documentation

Lexology-

On April 25, the Consumer Financial Protection Bureau (CFPB) entered an enforcement order against New Jersey law firm Pressler and Pressler and its debt-buyer client, New Century Financial Services, for pursuing hundreds of thousands of debt collection lawsuits without reviewing the underlying documentation supporting the existence of a debt. The law firm agreed to pay a $1 million fine, the debt-buyer client agreed to pay a $1.5 million fine, and both agreed to extensive recordkeeping and compliance measures going forward. These recordkeeping and compliance measures include an obligation to file account information in the court file of defaulted debt-collection cases before obtaining a final judgment, and to do no prejudgment discovery of a debtor’s assets.

The sanction stemmed from the manner in which the debt-buyer client communicated with its law firm. Rather than sending account files of the purchased debts, the client would electronically send spreadsheets showing debtor information and amounts of debts to the law firm. The law firm, which was staffed by over 300 employees, only 19 of which were attorneys, would then use proprietary software to turn the information in the spreadsheets into civil complaints. Neither the debt-buyer client, nor the non-legal staff, nor the attorneys signing the complaints, would review the original account-level documentation substantiating the debt. As a result of these practices, the CFPB found the law firm filed an untold number of lawsuits based on false or unreliable information.

[LEXOLOGY]

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Deutsche Bank Slams ‘Generalized’ Claims In RMBS Dispute

Deutsche Bank Slams ‘Generalized’ Claims In RMBS Dispute

LAW 360 –

Deutsche Bank National Trust Co. on Friday knocked an amended complaint in a New York federal suit accusing it of failing to protect investors from over $1 trillion in losses due to poorly underwritten residential mortgage-backed securities, arguing in a memorandum supporting a motion to dismiss that there weren’t sufficient allegations of “actual knowledge.”

BlackRock Inc. claims that Deutsche Bank knew that 62 Delaware statutory trusts created between 2004 and 2008 contained faulty loans that did not conform to representations and warranties by the originators and…

[LAW 360]

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Marsden v. BAC HOME LOANS SERVICING, LP | FL 4DCA – Because the bank did not present any evidence of the amount of interest owed, we reverse and remand for the trial court to amend the final judgment and remove any calculations for interest

Marsden v. BAC HOME LOANS SERVICING, LP | FL 4DCA – Because the bank did not present any evidence of the amount of interest owed, we reverse and remand for the trial court to amend the final judgment and remove any calculations for interest

 

MARIO MARSDEN and ROSAL MARSDEN, Appellants,
v.
BAC HOME LOANS SERVICING, L.P. f/k/a COUNTRYWIDE HOME LOANS SERVICING, L.P.; NEWPORT ISLES PROPERTY OWNERS ASSOCIATION, INC.; PORTOFINO ISLES HOMEOWNERS ASSOCIATION INC.; and Unknown Tenant(s) In Possession Of The Subject Property, Appellees.

No. 4D14-1623.
District Court of Appeal of Florida, Fourth District.
July 13, 2016.
Appeal from the Circuit Court for the Nineteenth Judicial Circuit, St. Lucie County; James W. Midelis, Judge; L.T. Case No. 562009CA005997.

Thomas Erskine Ice of Ice Appellate, Royal Palm Beach, for appellants.

Adam M. Topel of Liebler Gonzalez & Portuondo, for appellee Bank of America, N.A., successor by merger to BAC Home Loans Servicing, L.P., f/k/a Countrywide Home Loans Servicing, L.P.

CIKLIN, C.J.

Mario and Rosal Marsden (the “borrowers”) challenge a final judgment of foreclosure entered in favor of BAC Home Loans Servicing, L.P. f/k/a Countrywide Home Loans Servicing, L.P. (the “bank”). They raise multiple issues on appeal. We find only one has merit, and reverse and remand for the trial court to enter an amended final judgment and therein to eliminate its award of interest, in that the record is devoid of any such proof.

The borrowers argue that the bank did not prove the amount of damages reflected in the final judgment. We agree, but only as to the award of interest. At trial, the bank relied on a payment history to prove its damages. The payment history, however, does not provide an evidentiary basis for the inclusion of any interest. Further, the face of the note does not make apparent how much interest, if any, is owed. The bank’s witness testified that the amounts in a proposed final judgment were consistent with the payment history, but the witness did not offer any testimony as to the amount of interest owed, and the proposed final judgment was not entered into evidence.[1] Because the bank did not present any evidence of the amount of interest owed, we reverse and remand for the trial court to amend the final judgment and remove any calculations for interest.

Reversed and remanded with instructions.

WARNER and GERBER, JJ., concur.

Not final until disposition of timely filed motion for rehearing.

[1] If the bank had offered some, but insufficient, evidence of the amount of interest owed, we would remand for the trial court to take additional evidence. See McMillan v. Bank of New York Mellon, 180 So. 3d 1090, 1091-92 (Fla. 4th DCA 2015).

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Posted in STOP FORECLOSURE FRAUD2 Comments

HON. ARMANDO RAMIREZ IS RUNNING FOR RE-ELECTION AS OSCEOLA COUNTY CIRCUIT CLERK OF COURTS

HON. ARMANDO RAMIREZ IS RUNNING FOR RE-ELECTION AS OSCEOLA COUNTY CIRCUIT CLERK OF COURTS

via CLOUDED TITLES

BREAKING NEWS, OP-ED … (July 18, 2016) … 

This post is divided into two segments that interrelate to each other.

SEGMENT ONE:

I only generally post stuff that is significant and related to chain of title issues.

Here, there is more than meets the eye, which is why I’ve made it more than just a political candidate pitch.

It’s no secret that the Osceola County Circuit Clerk, the Hon. Armando Ramirez, is running for re-election as Clerk of the Circuit Court as Osceola County, Florida.  There are at least 3 other candidates running against him this time, but I find a significant reason to ignore the challengers in favor of the incumbent: OSCEOLA COUNTY FORENSIC EXAMINATION … and for that reason especially, I endorse Armando Ramirez for this post! 

No other candidate in the race would have the cajones to do what Mr. Ramirez has done in exposing the misdeeds of the banks, their servicers and third-party document manufacturing plants and the law firm scumbag attorneys who participate in the schemes to defraud property owners and rely on documents that are recorded in the real property records of county clerks, recorders and registers’ of deeds offices all over the country.

Clerk Ramirez continues to post the Forensic Examination on his website in spite of the attacks that have come against him in the press for undertaking such a feat.  The thing is, this Report is now being used by foreclosure defense attorneys at trial to bolster their cases in defense of property owners, especially in Florida.  This Report is being downloaded by viewers in the United States and Canada on the academia.edu website, where the Report ranks in the Top 2% of research downloads.

It is fundamentally important to realize that even though WFTV’s George Estevez brought Florida foreclosure defense attorney Matt Weidner on his newcast to downgrade the Report as “not worth the paper it’s printed on”, and the Orlando Sentinel smeared the Clerk’s good name on the front page of its internet edition when the Report was released, it’s rather odd that the Sheriff of Osceola County is NOT running for re-election again, and it appears that Florida’s 9th Circuit State’s Attorney Jeff Ashton has a serious contender (Aramis Ayala) running for States Attorney in 2016.  Sadly, as you remember, Weidner was thumbing through individual pages on camera, but seemed to miss the “Attorney Opinion Letter” favoring the outcome and contents of the report in the back of the Report.  I’m glad Weidner is not running for office because you know what I’d have to say about that, right?

Ashton, as you remember, made two improper judgment calls (in my book):

(1) he refused to investigate the allegations in the Report; and

(2) he was caught playing on his personal computer with his personal credit card on the Ashley Madison dot com website (a known website for married men who want to cheat on their spouses), which I find worse than despicable of a public servant.

At least Mr. Ramirez is inclined (and not afraid) to expose the truth, even if the truth hurts.  I’m wondering (aloud) if Ayala is going to use that as ammo against him.  Considering the fact of what I’m going to share with you in the second segment, it became perfectly obvious to me WHY Ashton didn’t want to prosecute the allegations contained in the Report.

I don’t care whether he became “the face of justice” prosecuting the Casey Anthony case in Florida, he became “the disgrace of justice” in refusing to amass state and local authorities together to conduct a wide scale investigation of the frauds perpetrated in the land records throughout his entire judicial district!

At least Armando Ramirez has the fortitude to “stand up for the little guy”, while his Democratic opponents and judicial counterparts do not, just because it’s “too political”.  When it comes to making material misrepresentations in the real property records, by recording them electronically (by wire), which many of them are (and were stated as such in the Report), I want to share a case with you that discusses in principle, the “fullness” of the wire fraud statute, which Ashton could have contacted the Tampa FBI and enlisted their help in prosecuting the allegations contained in the Report.  In my book, failure to act constitutes nonfeasance of office, especially when you know something is a political powder keg.

SEGMENT TWO: 

Here’s the case I wanted to share with you: US v Takhalov et al, 11th App Cir No 13-12385 (July 11, 2016)

I find this case unique because the author of this opinion bothered to discuss the differences between deceiving and defrauding, as well as his implicit interpretation of the wire fraud statute.  I think that discussing the aspects of wire fraud and its implicit definition is important here, because it involves “intent” and “material misrepresentation”.

The next question I posit here is: What was the intent of the third-party document mills in manufacturing “Assignments of Mortgage” (or Deeds of Trust) by people with absolutely no knowledge of the actual event?  Further, why aren’t the servicers also prosecuted for their involvement in directing the foreclosure mill law firm to commit wire fraud by causing these documents to be electronically wired into the land records?   After all, this is the NEW thing the FBI is now investigating, servicer fraud.

After you read this court case, you will clearly understand why statutes need to be not only correctly interpreted, but you’ll see Ashton’s nonfeasance of office for failing to investigate and prosecute those responsible for stealing Florida properties in his own judicial district by the use of electronically-filed, real property records.  Clearly, this scam has reached into every nook and cranny of every recorder’s office in America!

I have publicly endorsed Aramis Ayala for 9th Circuit States Attorney … I hope she whoops Ashton’s butt in the Florida primaries next month.

If you live in Orange or Osceola Counties in Florida, or know someone who does, you may wish to direct them to this post!  Even more, get them to read the Report!

via CLOUDED TITLES

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Posted in STOP FORECLOSURE FRAUD0 Comments

TFH 7/17 | Foreclosure Workshop #16: Paragraph 22, The Notice of Default And Right To Cure — How To Use This Most Overlooked Foreclosure Defense To Defeat Summary Judgment And Win At Trial

TFH 7/17 | Foreclosure Workshop #16: Paragraph 22, The Notice of Default And Right To Cure — How To Use This Most Overlooked Foreclosure Defense To Defeat Summary Judgment And Win At Trial

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

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

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

.

.

Sunday – July 17, 2016

Foreclosure Workshop #16: Paragraph 22, The Notice of Default And Right To Cure — How To Use This Most Overlooked Foreclosure Defense To Defeat Summary Judgment And Win At Trial ~

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Host: Gary Dubin - Co-Host: John Waihee -

.

CALL IN AT (808) 521-8383 OR TOLL FREE (888) 565-8383

Have your questions answered on the air.

Submit questions to info@foreclosurehour.com

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

Past Broadcasts

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SIGTARP: Mortgage Servicers Have Wrongfully Terminated Homeowners Out of the HAMP Program

SIGTARP: Mortgage Servicers Have Wrongfully Terminated Homeowners Out of the HAMP Program

TARP’s major foreclosure prevention program, the Home Affordable Mortgage
Program (“HAMP”), was created to provide sustainable and affordable mortgage
assistance to homeowners at risk of foreclosure.1 Although this program is at a
turning point in its lifecycle, mortgage servicers administering HAMP will continue
to need strict oversight in upcoming years. While HAMP was already scheduled to
stop accepting homeowner applications on December 31, 2016, Congress recently
terminated HAMP as of that date, but protected homeowners’ ability to stay in
HAMP and receive TARP-funded assistance for up to six years.2
To give homeowners in HAMP the best shot at keeping their homes, the
greatest concern going forward should be helping the homeowners who are in
HAMP to stay in HAMP for the full six years. Already, as of December 31, 2015,
507,359 homeowners with permanent HAMP modifications fell out of the program
by missing three payments (referred to as “redefaulting”) – which is almost one out
of every three homeowners in HAMP.3,i

The harm to a homeowner falling out of HAMP is significant, as they are
no longer eligible to receive TARP incentive and other benefits.ii According to a
Treasury survey of HAMP servicers:4
• 23% of all homeowners who redefaulted out of HAMP moved into foreclosure,
• 12% of redefaulted homeowners lost their homes through a short sale or deedin-
lieu of foreclosure, and
• 28% of redefaulted homeowners received an alternative modification,
usually a private sector modification that is less advantageous than a HAMP
modification.iii

Given the high percentage of homeowners falling out of HAMP and known
problems with servicers not following HAMP rules, in October 2013, SIGTARP
recommended that Treasury research and analyze whether, and to what extent, the
conduct of HAMP mortgage servicers contributed to homeowners redefaulting on
HAMP permanent mortgage modifications.iv Although Treasury has not conducted
a full analysis, Treasury has partially implemented SIGTARP’s recommendation,
and reviews samples of 100 homeowners who had redefaulted out of HAMP at
each of the largest HAMP servicers each quarter as part of Treasury’s on-site and
remote compliance testing at each of the largest servicers.

SIGTARP’s concerns over servicer misconduct contributing to homeowner
redefaults in HAMP have been borne out. Treasury’s findings in its on-site visits to
the largest seven mortgage servicers in HAMP over the most recent four quarters
show disturbing and what should be unacceptable results, as 6 of 7 of the mortgage
servicers had wrongfully terminated homeowners who were in “good standing” out
of HAMP.v

These staggering findings clearly show that servicer misconduct is contributing
to some homeowners falling out of HAMP. Homeowners were wrongly terminated
from HAMP by their servicer despite making timely mortgage payments, putting
them at risk of losing their home. These homeowners were forced out of HAMP
through no fault of their own. Mortgage servicers did not give these homeowners a
fair shot. As these instances were found through sampling, Treasury does not know
how many other homeowners were also wrongfully forced out of HAMP.

IN THE LAST YEAR, SIX OF THE SEVEN LARGEST
HAMP SERVICERS WRONGFULLY TERMINATED
HOMEOWNERS OUT OF HAMP WHO WERE PAYING
THEIR MORTGAGE

Homeowners_Wrongfully_Terminated_Out_of_HAMP

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Posted in STOP FORECLOSURE FRAUD0 Comments

Homeowners: From $150 HOA fee to foreclosure

Homeowners: From $150 HOA fee to foreclosure

WTSP-

Hillsborough County homeowners are battling their HOA in a foreclosure fight, but one missed payment could cost the family their home.

“Because of $150, we’re going to lose a $300,000 home,” says homeowner Tina Lopez.

The Riverview family is taking on the Rivercrest Community Association, who just sold the home at auction.  The Lopez family claims they didn’t have any warning.  Now, the HOA fight could leave the family homeless.

“This is our life.  This is our family,” says Tina Lopez.

[WTSP]

© 2010-15 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD1 Comment

REPORT | TOO BIG TO JAIL:  INSIDE THE OBAMA JUSTICE DEPARTMENT’S DECISION NOT TO HOLD WALL STREET ACCOUNTABLE

REPORT | TOO BIG TO JAIL: INSIDE THE OBAMA JUSTICE DEPARTMENT’S DECISION NOT TO HOLD WALL STREET ACCOUNTABLE

TOO BIG TO JAIL:
INSIDE THE OBAMA JUSTICE DEPARTMENT’S DECISION
NOT TO HOLD WALL STREET ACCOUNTABLE

REPORT PREPARED BY THE REPUBLICAN STAFF OF THE
COMMITTEE ON FINANCIAL SERVICES, U.S. HOUSE OF REPRESENTATIVES

HON. JEB HENSARLING, CHAIRMAN
114TH CONGRESS, SECOND SESSION

JULY 11, 2016

 
Executive Summary

In March 2013, the Committee on Financial Services (Committee) initiated a
review of the U.S. Department of Justice’s (DOJ’s) decision not to prosecute HSBC
Holdings Plc. and HSBC Bank USA N.A. (together with its affiliates, HSBC) or any
of its executives or employees for serious violations of U.S. anti-money laundering
(AML) and sanctions laws and related offenses. The Committee’s efforts to obtain
relevant documents from DOJ and the U.S. Department of the Treasury (Treasury)
were met with non-compliance, necessitating the issuance of subpoenas to both
agencies. Approximately three years after its initial inquiries, the Committee
finally obtained copies of internal Treasury records showing that DOJ has not been
forthright with Congress or the American people concerning its decision to decline
to prosecute HSBC. Specifically, these documents show that:

  • Senior DOJ leadership, including Attorney General Holder, overruled an
    internal recommendation by DOJ’s Asset Forfeiture and Money Laundering
    Section to prosecute HSBC because of DOJ leadership’s concern that
    prosecuting the bank would have serious adverse consequences on the
    financial system.
  • Notwithstanding Attorney General Holder’s personal demand that HSBC
    agree to DOJ’s “take-it-or-leave-it” deferred prosecution agreement deal by
    November 14, 2012, HSBC appears to have successfully negotiated with DOJ
    for significant alterations to the DPA’s terms in the weeks following the
    Attorney General’s deadline.
  • DOJ and federal financial regulators were rushing at what one Treasury
    official described as “alarming speed” to complete their investigations and
    enforcement actions involving HSBC in order to beat the New York
    Department of Financial Services.
  • In its haste to complete its enforcement action against HSBC, DOJ
    transmitted settlement numbers to HSBC before consulting with Treasury’s
    Office of Foreign Asset Control (OFAC) to ensure that the settlement amount
    accurately reflected the full degree of HSBC’s sanctions violations.
  • The involvement of the United Kingdom’s Financial Services Authority in the
    U.S. government’s investigations and enforcement actions relating to HSBC,
    a British-domiciled institution, appears to have hampered the U.S.
    government’s investigations and influenced DOJ’s decision not to prosecute
    HSBC.
  • Attorney General Holder misled Congress concerning DOJ’s reasons for not
    bringing a criminal prosecution against HSBC.
    ? DOJ to date has failed to produce any records pertaining to its prosecutorial
    decision making with respect to HSBC or any large financial institution,
    notwithstanding the Committee’s multiple requests for this information and
    a congressional subpoena requiring Attorney General Lynch to timely
    produce these records to the Committee.
  • Attorney General Lynch and Secretary Lew remain in default on their legal
    obligation to produce the subpoenaed records to the Committee.
  • DOJ’s and Treasury’s longstanding efforts to impede the Committee’s
    investigation may constitute contempt and obstruction of Congress.
    The Committee is releasing this report to shed light on whether DOJ is
    making prosecutorial decisions based on the size of financial institutions and DOJ’s
    belief that such prosecutions could negatively impact the economy.

[…]

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Posted in STOP FORECLOSURE FRAUD2 Comments

Justice Department Overruled Recommendation to Pursue Charges Against HSBC, Report Says

Justice Department Overruled Recommendation to Pursue Charges Against HSBC, Report Says

WSJ-

U.S. Justice Department officials overruled their prosecutors’ recommendation to pursue criminal charges against  HSBC  Holdings PLC over money-laundering failings, according to a House committee report prepared by Republicans that sheds new light on the bank’s 2012 settlement.

The report, which was reviewed by The Wall Street Journal ahead of its release Monday morning and was prepared by the Republican staff of the Financial Services Committee, concluded that former Attorney General Eric Holder overruled the internal recommendation and subsequently misled Congress about the Justice Department’s decision not to prosecute the U.K. bank.

“Rather than lacking adequate evidence to prove HSBC’s criminal conduct, internal Treasury documents show that DOJ leadership declined to pursue [the] recommendation to prosecute HSBC because senior DOJ leaders were concerned that prosecuting the bank ‘could result in a global financial disaster,’ ” the 282-page report stated.

[THE WALL STREET JOURNAL]

© 2010-15 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD0 Comments

TFH 7/10 | Foreclosure Workshop #15:  Chase v. Flavin — A Case Study Concerning What Happens When A WaMu FA Borrower Goes To Trial Against Chase

TFH 7/10 | Foreclosure Workshop #15: Chase v. Flavin — A Case Study Concerning What Happens When A WaMu FA Borrower Goes To Trial Against Chase

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

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

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

.

.

Sunday – July 10, 2016

Foreclosure Workshop #15:
Chase v. Flavin — A Case Study Concerning What Happens When A WaMu FA Borrower Goes To Trial Against Chase
~

.
Host: Gary Dubin - Co-Host: John Waihee -

.

CALL IN AT (808) 521-8383 OR TOLL FREE (888) 565-8383

Have your questions answered on the air.

Submit questions to info@foreclosurehour.com

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

Past Broadcasts

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

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Jordan v. Nationstar Mortg., LLC | The Washington Supreme Court held that the deed of trust provisions in this case conflicted with Washington law because they allowed Nationstar to take possession of the property after default

Jordan v. Nationstar Mortg., LLC | The Washington Supreme Court held that the deed of trust provisions in this case conflicted with Washington law because they allowed Nationstar to take possession of the property after default

IN THE SUPREME COURT OF THE STATE OF WASHINGTON

CERTIFICATION FROM THE UNITED
STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF WASHINGTON

IN
LAURA ZAMORA JORDAN, as her
separate estate, and on behalf of others
similarly situated,
Plaintiff,

v.

NATIONSTAR MORTGAGE, LLC,
a Delaware limited liability company,
Defendant.

________________________)

OWENS, J. -After defaulting on her home mortgage payment, plaintiff
Laura Jordan returned home from work one evening to discover she could not enter
her own house: the locks had been changed without warning. A notice informed her
that in order to gain access to her home, she must call defendant Nationstar Mortgage
LLC to obtain the lockbox code and retrieve the new key inside. Although she

eventually reentered her home, she removed her belongings the next day and has not
returned since. Jordan’s home loan was secured by a deed oftrust, a commonly used
security instrument that was created as an alternative to traditional mortgages to
provide for a simpler method offoreclosure. The deed oftrust contained provisions
that allowed Nationstar to enter her home upon default without providing any notice
to the homeowner. Today, we are asked to decide whether those provisions conflict
with Washington law.

Jordan represents a class action proceeding in federal court, which has certified
two questions to us. The first question asks whether the deed oftrust provisions
conflict with a Washington law that prohibits a lender from taking possession of
property prior to foreclosure. We hold that it does because the provisions allow
Nationstar to take possession of the property after default, which conflicts with the
statute. The second question asks whether Washington’s statutory receivership
scheme–providing for a third party to possess and manage property in lieu of either
the lender or homeowner-is the exclusive remedy by which a lender may gain access
to the property. As explained below, we hold nothing in our law establishes the
receivership statutes as an exclusive remedy.

FACTS
In 2007, Jordan bought a home in Wenatchee, Washington, with a home loan of
$172,000 from Homecomings Financial. She secured the loan by signing a deed of

trust. The original lender assigned the loan to the Federal National Mortgage
Association (Fannie Mae), one ofthe nation’s largest mortgagees that primarily
participates in the secondary mortgage market, which hired Nationstar to service the
loan.

Jordan went into default on her mortgage payments in January 20 11. In March
2011, one ofNationstar’s vendors came to Jordan’s home and changed the locks on
her front door. Jordan returned home to find a notice on the front door informing her
that the property was found to be “unsecure or vacant” and that to protect her and the
mortgagee’s interest in the property, it was “secured against entry by unauthorized
persons to prevent possible damage.” Order Certifying Questions to Wash. Supreme
Ct., Jordan v. Nationstar Mortg., LLC, No. 2:14-CV-0175-TOR at 6 (E.D. Wash.
Aug. 10, 20 15). While the above-noted facts are undisputed, the parties dispute
whether the home was vacant. Jordan contends she was living there, left for work that
morning as usual, and returned to find the lockbox and notice. On the other hand,
Nationstar contends that its vendor performed an inspection of the property and
determined it was vacant.

Upon finding the notice when she returned home, Jordan called the phone
number provided and got the key from the lockbox to reenter her home. She took all
of her belongings and vacated the house the next day. Since then, Nationstar’s vendor
has maintained the property’s exterior and winterized the interior. Nationstar does not

3

Jordan v. Nationstar Mortgage, LLC

No. 92081-8

claim to have attempted to provide Jordan any notice of its intention to inspect the
property and rekey it. Nationstar contends that its usual practice is to change the locks
on only one door, such that it can access the home in the future, but also so that the
owner can still enter the home through another door. Here, Jordan’s home had only a
front door and a sliding glass door in the rear ofthe home. Therefore, when
Nationstar’s vendor rekeyed the front door, she had no means of entry.

Jordan represents a certified class of3,600 Washington homeowners who were
locked out oftheir homes pursuant to similar provisions in their deeds oftrust with
Nationstar. This case presents an important issue for these homeowners and the
thousands of others subject to similar provisions, as well as the many mortgage
companies that have a concern with preserving and protecting the properties in which
they have an interest. Three amicus briefs were filed in this case: Federal Home Loan
Mortgage Corporation (Freddie Mac) and the city of Spokane supporting defendant
Nationstar, and the Northwest Consumer Law Center supporting plaintiff Jordan.
Freddie Mac tells us that the provisions such as the ones at issue here are important to
the foreclosure process because they allow lenders to enter the property to maintain
and secure it. It contends that such provisions help meet Freddie Mac’s requirements
it imposes on companies like Nationstar to preserve properties.

In April20 12, Jordan filed a complaint against Nationstar in Chelan County

Superior Court, alleging state law claims that include trespass, breach of contract, and

4

Jordan v. Nationstar Mortgage, LLC

No. 92081-8

violations ofthe Washington Consumer Protection Act and the Fair Debt Collection
Practices Act. Ch. 19.86 RCW; 15 U.S.C. §§ 1692-1692p. Chelan County Superior
Court certified the class action, with Jordan as the representative for the 3,600
similarly situated homeowners. Nationstar removed the action to the United States
District Court for the Eastern District ofWashington (District Court). The parties
each filed motions for partial summary judgment. Nationstar asked the District Court
to find the provisions at issue enforceable under Washington law. Jordan asked the
District Court to find that before the lender can enter a borrower’s property, the lender
must obtain either the borrower’s postdefault consent or permission from a court.
Furthermore, Jordan contends that receivership is the only remedy by which a lender
may gain access to the borrower’s property. Finding that the case raised unresolved

questions of Washington state law, the District Court certified two questions to us.

We accepted the following certified questions.

CERTIFIED QUESTIONS

1. Under Washington’s lien theory ofmortgages and RCW 7.28.230(1), can
a borrower and lender enter into a contractual agreement prior to default that allows the
lender to enter, maintain, and secure the encumbered property prior to foreclosure?
2. Does chapter 7.60 RCW, Washington’s statutory receivership scheme,
provide the exclusive remedy, absent postdefault consent by the borrower, for a lender
to gain access to an encumbered property prior to foreclosure?
5

Jordan v. Nationstar Mortgage, LLC

No. 92081-8

ANALYSIS

Certified questions present questions of law and we review them de novo. See,
e.g., Parents Involved in Cmty. Sch. v. Seattle Sch. Dist., No. 1, 149 Wn.2d 660, 670,
72P.3d 151 (2003).

1.
Washington’s Lien Theory and RCW 7.28.230(1) Prevent a Borrower and a
Lender from Contracting To Allow the Lender To Take Possession Based on
Borrower Default
The District Court asks us to determine whether a predefault clause in a deed of
trust that allows a lender to enter, maintain, and secure the property before foreclosure
is enforceable. We must determine whether these provisions contravene Washington
law. As described below, the deed oftrust provisions authorize a lender to enter the
borrower’s property after default. The parties agree that a Washington statute
prohibits a lender from taking possession of a borrower’s property prior to
foreclosure. The controversial issue here is whether the deed oftrust provisions
allowing the lender to enter constitute taking possession prior to foreclosure, such that
they conflict with state law. Based on Nationstar’s practices, we find that the
provisions do allow the lender to take possession and thus they are in conflict with
state law. As such, we answer the first certified question in the negative.

a.
The Deed ofTrust Provisions Allow a Lender To Enter the Borrower’s
Property upon Default or Abandonment
“[I]t is the general rule that a contract which is contrary to the terms and policy
of an express legislative enactment is illegal and unenforcible [sic].” State v. Nw.

6

Jordan v. Nationstar Mortgage, LLC

No. 92081-8

Magnesite Co., 28 Wn.2d 1, 26, 182 P.2d 643 (1947). While we recognize an

overarching freedom to contract, provisions are unenforceable where they are

prohibited by statute. State Farm Gen. Ins. Co. v. Emerson, 102 Wn.2d 477,481, 687

P.2d 1139 (1984).

The provisions at issue are made up oftwo sections in the deed oftrust. The

first provision, in pertinent part, is as follows:

9. Protection of Lender’s Interest in the Property and Rights
Under this Security Instrument. If (a) Borrower fails to perform the
covenants and agreements contained in this Security Instrument, … or
(c) Borrower has abandoned the Property, then Lender may do and pay
for whatever is reasonable or appropriate to protect Lender’s interest in
the Property and rights under this Security Instrument, including
protecting and/or assessing the value ofthe Property, and securing
and/or repairing the Property …. Securing the Property includes, but is
not limited to, entering the Property to make repairs, change locks,
replace or board up doors and windows, drain water from pipes,
eliminate building or other code violations or dangerous conditions, and
have utilities turned on or off. Although Lender may take action under
this Section 9, Lender does not have to do so and is not under any duty
or obligation to do so.
Ex. 19, at 8. The provisions also allows the lender to “make reasonable entries upon

and inspections ofthe Property” where the lender has reasonable cause and gives the

borrower notice. !d. at 7. It also requires the borrower to maintain and protect the

property. !d.

Together, these sections are the so-called “entry provisions” that are at issue in

this case, which allow the lender to enter, maintain, and secure the property after the

borrower’s default or abandonment. Nationstar hinges its argument on the need to

7

Jordan v. Nationstar Mortgage, LLC

No. 92081-8

secure abandoned property, stating it does not enter occupied property. However, the
provision plainly states that the lender may “secure” the property after the borrower
defaults or abandons the property. The provision specifically lists changing the locks
as a method of securing the property. Thus, the provisions authorize the lender to
enter and rekey the property solely upon default, regardless of whether the borrower
has abandoned the property.

As explained below, it is well settled that Washington law prohibits lenders
from taking possession of borrowers’ property before foreclosure. This question turns
on whether the above provisions authorize lenders to “take possession” and if, in fact,
the lender’s actions here constituted taking possession.

b.
Washington’s Lien Theory Does Not Permit a Lender To Take Possession of
Property Prior to Foreclosure
Our case law is clear that Washington law prohibits a lender from taking
possession of property before foreclosure of the borrower’s home. Importantly, the
parties agree on this point; under state law, a secured lender cannot gain possession of
the encumbered property before foreclosure.

RCW 7.28.230 provides that

(I ) A mortgage of any interest in real property shall not be deemed a
conveyance so as to enable the owner of the mortgage to recover possession of
the real property, without a foreclosure and sale according to law.Pl
1 Before 1969, this section of the statute ended after “without a foreclosure and sale according to
law.” CODE OF 1881, § 546. It was amended in 1969 to make clear that the statute should not be

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This statute essentially codified Washington’s lien theory of mortgages. The
mortgage lien theory prevails in Washington, meaning that the mortgage is seen as
“nothing more than a lien upon the property to secure payment of the mortgage debt,
and in no sense a conveyance entitling the mortgagee to possession or enjoyment of
the property as owner.” W. Loan & Bldg. Co. v. Mifflin, 162 Wash. 33, 39,297 P. 743
(1931). We have interpreted RCW 7.28.230(1) to mean that a mortgagor’s default
does not disrupt the mortgagor’s right to possession ofreal property, and that the
mortgagor retains the right to possession until there has been foreclosure and sale of
the property. Howard v. Edgren, 62 Wn.2d 884, 885, 385 P.2d 41 (1963).

The Restatement (Third) ofProperty takes the approach that mortgagee
possession agreements conflict with lien theory statutes. See RESTATEMENT (THIRD)
OF PROP.: MORTGAGES § 4.1 cmt. b (AM. LAW INST. 1997). Several lien theory
jurisdictions hold that provisions that allow the lender to take possession ofthe
property contravenes public policy that is inherent to the lien theory; indeed, some
states have even codified statutes that specifically invalidate such agreements. See,
e.g., COLO. REV. STAT. ANN.§ 38-35-117; IDAHO CODE ANN.§ 6-104; NEV. REV.
STAT.§ 40.050; OKLA. STAT. ANN. tit. 42, § 10; UTAH CODE ANN.§ 78B-6-1310.

interpreted to prohibit a mortgagee from collecting rents before foreclosure. See LAws OF 1969,
1st Ex. Sess., ch. 122, §I; and see Kezner v. Landover Corp., 87 Wn. App. 458,464,942 P.2d
I 003 (1997). However, the bedrock principle that borrowers have a right to possession prior to
foreclosure was not altered by the amendment.

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Jordan v. Nationstar Mortgage, LLC

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Washington’s legislature, however, did not specifically invalidate such contrary
agreements in its codification of lien theory prohibiting the lender from taking
possession of property before foreclosure. That the legislature did not specifically
invalidate such contract provisions, as did other states, does not mean the provisions
do not conflict with our laws. Thus, we must determine whether its statute is in
conflict with such an agreement.

Nationstar concedes that the borrower’s right to possession cannot be overcome
by a contrary provision in the mortgage or deed oftrust because such a provision
would be nnenforceable as it would contravene Washington law. Def.’s Answering
Br. at 11. However, Nationstar argues that the entry provisions do not authorize the
lender to take “possession” and that its specific conduct at Jordan’s residence did not
constitute possession. Therefore, the determinative issue in answering this first
certified question is whether the entry provisions cause the lender to gain
“possession.” As explained below, the entry provisions do authorize conduct that
constitutes “possession.”

c.
These Entry Provisions Allow a Lender To Take Possession Prior to
Foreclosure and Therefore Conflict with State Law
We must determine if the entry provisions authorize the lender to take
“possession” ofthe property. Ifthey do, the provisions are in conflict with
Washington law. Here, we look to the actions that Nationstar took pursuant to the
entry provisions to see if they constituted “possession.” Possession has slightly

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Jordan v. Nations tar Mortgage, LLC

No. 92081-8

different meanings in different areas ofthe law. The parties supplied defmitions from
real property law, tort law, and landlord-tenant law because it is unclear which
definition is applicable to RCW 7.28.230(1).

Under any definition, the conduct allowed under the entry provisions
constitutes possession because Nationstar’s actions satisfY the key element of
possession: control. In property law, “possession” is defined as “a physical relation to
the land of a kind which gives a certain degree ofphysical control over the land, and
an intent so to exercise such control as to exclude other members of society in general
from any present occupation ofthe land.” RESTATEMENT (FIRST) OF PROP.:
DEFINITION OF CERTAIN GENERAL TERMS§ 7(a) (AM. LAW INST. 1936).

The key element to the property defmition of “possession” is the “certain
degree ofphysical control.” Tort law similarly requires control. In tort law, which is
concerned primarily with liability, a “possessor of land” is defined as “a person who
occupies the land and controls it.” RESTATEMENT (THIRD) OF TORTS: LIABILITY FOR
PHYSICAL AND EMOTIONAL HARM§ 49 (AM. LAW INST. 2012).

The Court ofAppeals applied the tort definition of possession when it
considered the phrase “mortgagees in possession” for purposes of premises liability.
Coleman v. Hoffman, 115 Wn. App. 853, 858-59, 64 P.3d 65 (2003). There, the
lender used RCW 7 .28.230(1) as a defense to its putative possession to avoid liability,
arguing that it could not have been “in possession” because the statute forbids it. !d.

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Jordan v. Nationstar Mortgage, LLC

No. 92081-8

at 863. The court relied on the above tort definition of”possession” and another
prominent source that stated for a lender to be liable, it must ‘”exercise dominion and
control over the property.”‘ !d. at 859 (quoting 62 AM. JUR. 2D Premises Liability
§ 8, at 356 (1990)). In finding that the plaintiff showed enough facts oflender’s
possession, the court pointed to the lender’s repairs and payments of utility bills. !d.
at 862-63.

We also find that landlord-tenant law’s treatment of”possession” helpful-
particularly its analysis ofthe impact of changing locks. In Aldrich v. Olson, the
Court ofAppeals found that when the landlord changed the locks of her tenant’s
home, it was an unlawful eviction. 12 Wn. App. 665, 672, 531 P .2d 825 (1975). The
court reasoned, “It is difficult to visualize an act of a landlord more specifically
intended as a reassumption of possession by the landlord and a permanent deprivation
of the tenant’s possession than a ‘lockout’ without the tenant’s knowledge or
permission.” !d. at 667.

From any approach, we find that Nationstar’s conduct constituted possession.
The foregoing possession definitions, as well as Coleman and Aldrich, are instructive.
Nationstar’s vendor’s actions constituted possession because its actions are
representative of control. The vendor drilled out Jordan’s existing locks and replaced
the lock with its own. Nationstar stated in its brief that it rekeyed Jordan’s property to
allow itself access to return to secure the property by winterizing it and to make

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Jordan v. Nationstar Mortgage, LLC

No. 92081-8

repmrs. Def.’s Answering Br. at 33-34. Perhaps that is true; however, rekeying the
property also had the effect of communicating to Jordan that Nationstar now
controlled the property. The action left Jordan with no method of entering her own
property. Nationstar relies on the fact that it did not change the locks to exclude
Jordan (because it provided her a lockbox and phone nmnber to call) to provide proof
that it did not possess the premises. However, although she was able to obtain a key
by calling, the process made Nationstar the “middle man.” She could no longer
access her home without going through Nationstar. This action of changing the locks
and allowing her a key only after contacting Nationstar for the lockbox code is a clear
expression ofcontrol. Although Nationstar did not exclude Jordan from the premises
(as she was able to gain a key and enter), she left the next day and did not return. In
its amicus brief, the Northwest Consumer Law Center advised us anecdotally that
many similarly situated Washington homeowners felt that when the lender changed
the locks to their homes, they no longer had a right to continue to possess the
property. See Br. ofAmicus Curiae Nw. Consumer Law Ctr. at 6.

Nationstar effectively ousted Jordan by changing her locks, exercising its
control over the property. Although the mortgagee-mortgagor context is different
from the landlord-tenant context, Aldrich provides an apt analogy here because the
court there found that changing the tenant’s locks was the most striking showing of a
reassmnption ofpossession. 12 Wn. App. at 667. Changing the locks is akin to

13

Jordan v. Nationstar Mortgage, LLC

No. 92081-8

exercising control, which is the key element of possession. By changing the locks,
Nationstar took possession ofthe property. Since these actions are authorized by the
entry provisions, the entry provisions allow the lender to take possession ofthe
property. Because Washington law prohibits lenders from taking possession ofthe
borrower’s property before foreclosure, the provisions are in conflict with state law.
Therefore, we must answer the first certified question in the negative and find that the
entry provisions are unenforceable.

2.
Chapter 7. 60 RCWDoes Not Provide the Exclusive Remedy for a Lender To
Gain Access to an Encumbered Property Prior to Foreclosure
The second certified question asks whether this state’s receivership statutes
separately prohibit the entry provisions. Specifically, this second question asks
whether chapter 7.60 RCW, which provides for the judicial appointment ofa third
party receiver to manage the property, is the exclusive method by which lenders can
gain access to encumbered property prior to foreclosure.

This is an issue offirst impression in this court, and no Washington appellate
decision is on point. We must answer this question in the negative because nothing
indicates that the statutory receivership scheme provides the exclusive remedy for
lenders to access a property.

a.
Background on Receivership and Its Role in Mortgage Foreclosure
Chapter 7.60 RCW governs Washington’s receivership scheme. A “receiver”
is a third party appointed by a court to take charge ofproperty and manage it as the

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Jordan v. Nationstar Mortgage, LLC

No. 92081-8

court directs. 18 WILLIAM B. STOEBUCK & JOHN W. WEAVER, WASHINGTON
PRACTICE: REAL ESTATE: TRANSACTIONS,§ 18.6, at 310 (2d ed. 2004). The statutes
enumerate some 40 circumstances under which a receiver may be appointed. Only a
few concern mortgaged real property. See RCW 7.60.025(1)(b), (g), (cc), (dd).
Although authorized by statute, lenders are not entitled to a receiver, even where a
clause in the mortgage provides for the appointment of a receiver. STOEBUCK &
WEAVER, supra, § 18.6, at 312. While statutory grounds exist for a court-appointed
receiver prior to foreclosure, it is rarely sought. I d. at 314.

In the context ofmortgaged real property, a receiver might be appointed as a
“custodial receiver,” who would take possession ofthe property and preserve it.
RCW 7.60.015; 7.60.025(1)(g). Commonly, receivers are appointed to collect rent
from income-producing property. STOEBUCK & WEAVER, supra, § 18.6, at 310-11;
see RCW 7 .28.230(1) (providing grounds for appointing a receiver to collect rent for
application to mortgage). Importantly, nothing in the text ofRCW 7.28.230(1) or
chapter 7.60 RCW requires the appointment of a receiver in this context.

Jordan argues that the entry provisions are Nationstar’s attempt to contract
around chapter 7.60 RCW’s requirements and that the legislature intended for the
statutes to provide lenders an exclusive remedy. However, as explained below,
Jordan’s arguments fail to establish that chapter 7.60 RCW does so.

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Jordan v. Nationstar Mortgage, LLC

No. 92081-8

b. The Contract Provisions Do Not Conflict with Chapter 7. 60 RCW
We have held that the deed of trust act in chapter 61.24 RCW cannot be
contracted around in two recent cases where parties attempted to modify the deed of
trust act’s requirements by private contract. See Bain v. Metro. Mortg. Grp., Inc., 175
Wn.2d 83, 107,285 P.3d 34 (2012) (holding that parties cannot contract to fit a
statutory definition to fulfill the act’s requirements); Schroeder v. Excelsior Mgmt.
Grp., LLC, 177 Wn.2d 94, 107,297 P.3d 677 (2013) (holding that parties cannot
contractually waive a requirement under the act that agricultural properties may only
be foreclosed judicially).
Jordan argues that like in B a in and Schroeder, the entry provisions attempt to
“bypass” statutes that dictate a lender’s only entry method. Pl.’s Opening Br. at 25.
However, Jordan misconstrues the receivership statutes as providing a “list of
requisites to a lender gaining access to a borrower’s property.” Id. at 28. While the
statutes enumerate receivership requirements, they are not concerned with a lender’s
access to borrower’s property but rather merely set forth requirements should a
receiver be necessary. Thus, the entry provisions do not attempt to circumvent the
receivership statutes and thus do not conflict with chapter 7.60 RCW. Similarly,
Jordan’s other arguments do not support her contention that the receivership statutes
provide lenders an exclusive remedy to access property. In fact, as explained below,

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Jordan v. Nationstar Mortgage, LLC

No. 92081-8

the text of the statute and policy considerations support a finding that chapter 7.60
RCW does not provide lenders the exclusive remedy.

c.
The Statute’s Text Supports Finding That It Does Not Provide an
Exclusive Remedy
The text of the statute supports a finding that it does not provide the exclusive
remedy. First, the plain language ofthe statute must be examined to determine
exclusivity. We have held that when engaging in statutory interpretation, our
“fundamental objective is to ascertain and carry out the Legislature’s intent, and ifthe
statute’s meaning is plain on its face, then the court must give effect to that plain
meaning as an expression of legislative intent.” Dep ‘t ofEcology v. Campbell &
Gwinn, LLC, 146 Wn.2d 1, 9-10,43 P.3d 4 (2002).

Of course, an exclusivity clause would be the clearest indication ofthe
legislature’s intent that the statute be exclusive, but as Jordan concedes, this statute
does not have one. However, Jordan argues that because the statutory scheme is
“comprehensive,” the legislature intended for the statute to provide the exclusive
remedy for lenders such that they cannot contract for entry otherwise. See generally
Pl. Opening Br. at 24-37; and see LAWS OF 2004, ch. 165, § 1. It is true that the
receivership statutory scheme is comprehensive, but the plain language ofthe statute
does not suggest that chapter 7.60 RCW was intended to be an exclusive remedy.

If a court were to appoint a receiver in this context, it would likely be pursuant
to RCW 7.60.025(1). Thus, we analyze the question of whether the receivership

17

Jordan v. Nationstar Mortgage, LLC

No. 92081-8

provides lenders the exclusive remedy under that portion of the provision. The statute
provides, in part:
A receiver may be appointed by the superior court ofthis state in the following
instances, but except in any case … in which a receiver’s appointment with
respect to real property is sought under (b)(ii) of this subsection, a receiver
shall be appointed only ifthe court additionally determines that the
appointment of a receiver is reasonably necessary and that other available

remedies either are not available or are inadequate.
RCW 7 .60.025(1) (emphasis added). Subsection (b )(ii) provides that a receiver may
be appointed after the commencement of a foreclosure proceeding on a lien against
real property where the appointment is provided for by agreement or is necessary to
collect rent or profits from the property.

In analyzing this text, we look to its plain language. In general, the court’s
discretion is illustrated by the word “may.” Under subsection (b )(ii), a receiver shall
be appointed, but only ifthe court makes additional fmdings. First the court must find
a receiver is “reasonably necessary.” RCW 7.60.025(l)(b)(ii). Second, and more
importantly, the court determines that “other available remedies either are not
available or are inadequate.” RCW 7.60.025(1) (emphasis added).

Courts consider all ofthe facts and circumstances to determine whether to
appoint a receiver. Union Boom Co. v. Samish Boom Co., 33 Wash. 144, 152, 74 P.
53 (1903). “It is well established that a receiver should not be appointed if there is
any other adequate remedy.” King County Dep ‘t ofCmty. & Human Servs. v. Nw.
Dejs. Ass ‘n, 118 Wn. App. 117, 126, 75 P.3d 583 (2003) (citing Bergman Clay Mfg.

18

Jordan v. Nationstar Mortgage, LLC

No. 92081-8

Co. v. Bergman, 73 Wash. 144, 147, 131 P. 485 (1913)). The Court ofAppeals
reasoned that allowing a current board of directors to oversee a corporation “was not
an adequate remedy” and, thus, found that appointment of a receiver was appropriate.
!d. at 126.

Thus, in general, other remedies exist outside of appointing a receiver. It is not
before us to determine what particular remedies are available. To answer this
question, it is sufficient that the plain language of the provision does not indicate that
chapter 7.60 RCW was meant to provide an exclusive remedy to lenders. Finally,
public policy also supports the finding that the statute is not the exclusive remedy,
which we discuss below.

d.
Public Policy Supports Finding That Chapter 7.60 RCWDoes Not Provide
an Exclusive Remedy
To the extent that chapter 7.60 RCW’s language is not explicit, it is worth
noting a relevant policy consideration. One ofthe advantages of a deed oftrust is that
it offers ‘”efficient and inexpensive”‘ nonjudicial foreclosure. Schroeder, 177 Wn.2d
at 104 (quoting Cox v. Helenius, 103 Wn.2d 383,387,693 P.2d 683 (1985)). Thus,
requiring lenders to wade through the judicial receivership process in all cases-
regardless ofthe facts and circumstances-is illogical. Overall, both policy and the
plain text of the statute support finding that it does not provide an exclusive remedy to
lenders. Thus, we must answer this question in the negative.

19

Jordan v. Nationstar Mortgage, LLC

No. 92081-8

CONCLUSION

We answer the first certified question in the negative. Washington law
prohibits lenders from taking possession of property prior to foreclosure. These entry
provisions enable the lender to take possession after default, and the lender’s action
here constitutes taking possession. Therefore, the entry provisions are in direct
conflict with state law and are unenforceable.

As to the second question, we also answer it in the negative. The text of the
receivership statutes, the legislative intent behind them, and public policy
considerations compel us to find that chapter 7.60 RCW is not the exclusive remedy
for lenders to gain access to a borrower’s property.

20

Jordan v. Nationstar Mortgage, LLC

No. 92081-8

WE CONCUR:

21

Jordan v. Nationstar Mortgage, LLC

No. 92081-8

STEPHENS, J. (dissenting}-! respectfully dissent because the majority
erroneously equates the entry provisions at issue with actual possession. Months
after Laura Jordan defaulted on her loan, Nationstar Mortgage LLC inspected
Jordan’s property and determined that it was vacant. Pursuant to the deed of trust’s
entry provisions, Nationstar secured the home by changing the lock to the front door
and posted instructions on how Jordan could enter the home if she returned. This
practice is not inconsistent with Washington’s lien theory of mortgages and RCW
7.28.230(1). Accordingly, the first certified question should be answered in the
affirmative.

“Washington courts have hesitated to ‘invoke public policy to limit or avoid
express contract terms absent legislative action.”‘ Brown v. Snohomish County
Physicians Corp., 120 Wn.2d 747, 753, 845 P.2d 334 (1993) (quoting State Farm

Jordan v. Nationstar Mortgage, LLC, 92081-8 (Stephens, J. Dissenting)

Gen. Ins. Co. v. Emerson, 102 Wn.2d 477, 481, 687 P.2d 1139 (1984)). It is
undisputed that the deed oftrust’s entry provisions were contractually agreed to and
authorized Nationstar to change the locks on Jordan’s home after default. And as
the majority correctly notes, Washington’s legislature has not “specifically
invalidate[d] such contrary agreements in its codification of lien theory prohibiting
the lender from taking possession ofproperty before foreclosure.” Majority at 10.

The majority nevertheless finds the entry provisions contravene Washington’s
rule against lenders taking preforeclosure possession of borrowers’ property. The
majority does so by describing the entry provisions as authorizing the lender to take
“possession.” Id. at 8, 12. But the certified question asks not whether lenders can
take “possession” ofproperty before foreclosure. Instead, it asks whether the lender
can “enter, maintain, and secure the encumbered property” before foreclosure.
Order Certifying Questions to Wash. Supreme Court, Jordan v. Nationstar Mortg.,
LLC, No. 2:14-CV-0175-TOR at 9 (E. Wash. Aug. 10, 2015). Absent legislation
stating otherwise, the entry provisions at issue are not inconsistent with
Washington’s lien theory ofmortgages and RCW 7.28.230(1).

The majority cites inapposite authority to equate the entry provisions with

actual possession. At the outset, the majority’s reliance on the Restatement is

misplaced. RESTATEMENT (THIRD) OF PROP: MORTGAGES§ 4.1 (AM. LAW. INST.

-2

Jordan v. Nationstar Mortgage, LLC, 92081-8 (Stephens, J. Dissenting)

1997). The Restatement does not contemplate entry provisions, like those considered
here, but rather a lender taking possession. The Restatement merely reiterates the
general rule against accelerated pre foreclosure possession ofproperty. In illustrative
applications of this rule, the Restatement examines instances where the mortgagee
has “file[d] an action to obtain possession of [the property].” REsTATEMENT§ 4.1
cmt. b, illus. 1-3. Here, however, Nationstar has not filed an action to obtain
possession of Jordan’s property. Instead, after Jordan defaulted on her loan,
Nationstar took contractually authorized steps to secure the abandoned propertyand
it posted instructions on how Jordan could access the property, consistent with
her continued right of possession.

Neither of the two Court of Appeals decisions cited by the majority support
equating the entry provisions to possession. Aldrich v. Olson does not even interpret
“possession” in RCW 7.28.230(1). 12 Wn. App. 665, 531 P.2d 825 (1975). And
Coleman v. Hoffman merely clarifies the difference between the right to possession
(applicable to foreclosure actions) and actual possession (applicable to premises
liability matters): “Although RCW 7.28.230 effectively precludes a mortgagee from
obtaining possession of property to the mortgagor’s exclusion, the statute does nof
bear on the question of whether a mortgagee actually possess the property. Actual
possession, not a right to possession, is the critical inquiry in premises liability

-3

Jordan v. Nationstar Mortgage, LLC, 92081-8 (Stephens, J. Dissenting)

cases.” 115 Wn. App. 853, 863-64, 64 P.2d 65 (2003). But unlike the landlords in
Aldrich and Coleman, Nationstar never possessed the property to Jordan’s exclusion.
Rather, Nationstar provided Jordan with instructions on how to enter her home if she
returned. At no point did Nationstar ever object to Jordan’s continued right to
possession before foreclosure.

Finally, even if we regarded the entry provisions as interfering with Jordan’s
right to possession, Nationstar was nevertheless justified in securing Jordan’s
abandoned property. The Restatement recognizes three exceptions to the general
rule that mortgagees cannot obtain possession of the mortgagor’s property before
foreclosure: (1) mortgagor consent, (2) mortgagee’s possession as the result of
peaceful entry in good faith after purchasing the property at a void or voidable
foreclosure sale, and (3) mortgagor abandonment. RESTATEMENT§ 4.1 cmt. c. Here,
the evidence supported Nationstar securing Jordan’s home under the mortgagor
abandonment exception. Months after Jordan defaulted on her loan, Nationstar
inspected Jordan’s property and determined that it was vacant. Nationstar then
changed the locks, which it was allowed to do under the entry provisions in order to
secure the property. Cf PNC Bank, NA v. Van Hoornaar, 44 F. Supp. 3d 846, 85657
(E.D. Wis. 2014) (dismissing trespass claim against lender for changing a
homeowner’s locks upon default because the mortgage agreement authorizing the

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Jordan v. Nations tar Mortgage, LLC, 92081-8 (Stephens, J. Dissenting)

lender to secure the premises upon default or abandonment created an implied
consent to entry); see also Tennant v. Chase Home Fin., LLC, 187 So. 3d 1172,
1181-82 (Ala. Civ. App. 2015). Moreover, public policy considerations support
Nationstar securing Jordan’s abandoned property: “Not only is it important to protect
the [property] against the elements and vandalism, but society is benefited by [the
property’s] productive use.” RESTATEMENT§ 4.1 cmt. c.

Pursuant to entry agreements like the one mutually agreed on by Nationstar
and Jordan, a lender may “enter, maintain, and secure” seemingly abandoned
property before foreclosure without taking “possession” of it. Because the first
certified question should be answered in the affirmative, I dissent.

-5

Jordan v. Nationstar Mortgage, LLC, 92081-8 (Stephens, J. Dissenting)

-6

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Parties in PHH Case Argue the Impact of Recent Supreme Court Decision

Parties in PHH Case Argue the Impact of Recent Supreme Court Decision

Lexology-

In the latest development in PHH Corp. v. Consumer Financial Protection Bureau (CFPB), PHH and the Bureau have both filed letters addressed to the D.C. Circuit arguing over the impact of a recent Supreme Court decision on the case. At issue is whether the Supreme Court’s decision in Encino Motorcars, LLC v. Navarro, No. 15-415 (U.S. June 20, 2016) eliminates the usual deference courts would give to the CFPB’s interpretation of the Real Estate Settlement Procedures Act (RESPA), under which the Bureau penalized PHH to the tune of $109 million.

As we previously reported, PHH is appealing the penalty imposed on it by the Bureau under Director Richard Cordray’s June 4, 2015 decision for alleged violations of RESPA related to mortgage reinsurance. Among the issues on appeal in PHH is Cordray’s decision not to follow the Housing and Urban Development’s (HUD) previous interpretation of RESPA as it relates to mortgage reinsurance arrangements. HUD was the agency responsible for enforcing RESPA before the CFPB assumed responsibility for enforcement in 2011. In a 1997 letter, HUD opined that captive reinsurance arrangements are permissible under RESPA so long as the payments are for services actually performed, and are bona fide compensation that does not exceed the value of the services. In making this determination, HUD read Section 8(c)(2) of RESPA to provide an exemption to Section 8(a), which generally prohibits the exchange of any fee or thing of value pursuant to an agreement to refer settlement service business.

[LEXOLOGY]

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STOLTZ v AURORA LOAN SERVICES, LLC | FL 2DCA – We are again required to reverse a final judgment of foreclosure because of the plaintiff’s failure to prove at trial the existence of standing at inception of the case

STOLTZ v AURORA LOAN SERVICES, LLC | FL 2DCA – We are again required to reverse a final judgment of foreclosure because of the plaintiff’s failure to prove at trial the existence of standing at inception of the case

IN THE DISTRICT COURT OF APPEAL

OF FLORIDA

SECOND DISTRICT

 

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

ROBERT J. STOLTZ,

Appellant,

v.
AURORA LOAN SERVICES, LLC;
NATIONSTAR MORTGAGE, LCC;
HERITAGE BAY UMBRELLA
ASSOCIATION, INC.; THE QUARRY
COMMUNITY ASSOCIATION, INC.;
LORETTA M. STOLTZ; ROBERT B.
STOLTZ; UNKNOWN TENANT N/K/A
JUSTIN STOLTZ,

Appellees.

Opinion filed July 6, 2016.

Appeal from the Circuit Court for Collier
County; Daniel R. Monaco, Judge.

Nicole R. Moskowitz of Neustein Law
Group, P.A., Aventura, for Appellant.

Nancy M. Wallace and Ryan D. O’Connor
of Akerman LLP, Tallahassee, and William

P. Heller of Akerman LLP, Ft. Lauderdale,
for Appellee Aurora Loan Services, LLC.
No appearance for remaining Appellees.

SALARIO, Judge.

Case No. 2D15-1095

We are again required to reverse a final judgment of foreclosure because
of the plaintiff’s failure to prove at trial the existence of standing at inception of the case.
See Dickson v. Roseville Props., LLC, 40 Fla. L. Weekly D2520 (Fla. 2d DCA Nov. 6,
2015) (“For better or for worse, it is settled that it is not enough for the plaintiff to prove
that it has standing when the case is tried; it must also prove that it had standing when
the complaint was filed.”).

In this instance, a mortgage servicer filed suit against the borrower and
homeowner, Robert Stoltz, and a different servicer was substituted as plaintiff prior to
trial. The action was commenced and maintained on the theory that the servicers were
the holders of the note at issue, not on the theory that the servicers were authorized to
foreclose on behalf of a holder. Mr. Stoltz placed the question of standing at inception
at issue by pleading it as an affirmative defense in an amended answer. To satisfy the
requirement of standing at inception, therefore, the second servicer (the one that took
the case to trial) was required to prove at trial that the first servicer (the one that filed the
suit) held the note when the case was filed. See Russell v. Aurora Loan Servs., LLC,
163 So. 3d 639, 642 (Fla. 2d DCA 2015).

At the trial, the second servicer attempted to meet this burden by offering
a note bearing an undated indorsement in blank. An indorsement in blank is sufficient
to prove that the person in possession of the note is its holder. Focht v. Wells Fargo
Bank, N.A., 124 So. 3d 308, 310 (Fla. 2d DCA 2013). Because the indorsement in this
case was undated and was not attached to the original complaint, however, it was
insufficient to prove that the first servicer held the note at the inception of the case
absent additional evidence that the first servicer actually possessed the note at the
inception of the case. See Sorrell v. U.S. Bank Nat’l Ass’n, 41 Fla. L. Weekly D847 (Fla.

– 2

2d DCA Apr. 6, 2016). The only additional evidence the second servicer presented was
the testimony of its representative. That testimony established at most that the first
servicer was in fact servicing the mortgage when it filed suit, not that the first servicer
held the note when it filed suit. For that reason, the second servicer failed to carry its
burden of proving standing at inception, and the borrower’s motion for involuntary
dismissal, made at the close of the second servicer’s case at trial, should have been
granted. See Russell, 163 So. 3d at 643; May v. PHH Mortg. Corp., 150 So. 3d 247,
249 (Fla. 2d DCA 2014).

We observe that the operative complaint attaches a copy of an
assignment purporting to transfer both the note and mortgage to the first servicer prior
to the date suit was originally filed. That document might have proved that the first
servicer had standing at inception. See Focht, 124 So. 3d at 310 (“A plaintiff who is not
the original lender may establish standing to foreclose a mortgage loan by submitting a
note with a blank or special endorsement, an assignment of the note, or an affidavit
otherwise proving the plaintiff’s status as the holder of the note.”). The second servicer,
however, made no effort to have this document admitted into evidence at trial. On
appeal, no argument is made or authority cited that, notwithstanding that failure, the
assignment is sufficient to support the judgment when standing is contested at trial.
See Beaumont v. Bank of N.Y. Mellon, 81 So. 3d 553, 555 n.2 (Fla. 5th DCA 2012)
(noting that a copy of an assignment of a note in the court file was not competent
evidence where it was never authenticated and offered into evidence).

We reverse the final judgment and remand the case to the trial court with
instructions to enter an order of involuntary dismissal.

VILLANTI, C.J., and CRENSHAW, J., Concur.

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Posted in STOP FORECLOSURE FRAUD1 Comment

Colorado AG claims victory in fighting a case against deceptive foreclosures | 9news.com

Colorado AG claims victory in fighting a case against deceptive foreclosures | 9news.com

9NEWS-

Colorado’s Attorney General says she has won a procedural victory in a case that allows her to go after a firm she says inflated foreclosure costs on Colorado homebuyers.

Attorney General Cynthia Coffman said in a statement today that in the case State vs. The Castle Law Group, the Colorado Supreme Court held that she can introduce critical evidence at trial to demonstrate allegations that the Castle Law Firm used affiliated businesses to artificially inflate foreclosure-related costs.

Coffman alleges that the Tennesse-based Castle Law Group and its principals, in concert with affiliated foreclosure-related businesses, systematically charged inflated and deceptive costs for routine services necessary to complete home foreclosures, while falsely representing that those costs were “actual, reasonable and necessary.”

[9NEWS]

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Posted in STOP FORECLOSURE FRAUD1 Comment

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