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BOS discuss impact of MERS on county records

BOS discuss impact of MERS on county records

Record Bee

The impact of Mortgage Electronic Registration Systems (MERS) on county records was a topic of interest during the Lake County Board of Supervisors (BOS) meeting on Tuesday.

District 3 Supervisor Denise Rushing requested the issue be placed on the agenda after hearing from several local residents during public comment at previous meetings regarding the unlawful foreclosures.

“It affects a lot of seniors,” Larry Anderson, 76, of Kelseyville said. “What MERS is doing is proven fraud.”

The system is a national database of home mortgages that allows lenders to bypass county recorders in order to more easily transfer mortgage rights, according to County Counsel Anita Grant. The system tracks mortgage loans and servicing interests, but it appears MERS may not be recording all additional mortgage assignments.

[RECORD BEE]

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DEVER v WELLS FARGO BANK ) NATIONAL ASSOCIATION | FL 2DCA – Wells Fargo was barred from claiming the surplus because it had failed to file a claim for the funds within the sixty days following the sale

DEVER v WELLS FARGO BANK ) NATIONAL ASSOCIATION | FL 2DCA – Wells Fargo was barred from claiming the surplus because it had failed to file a claim for the funds within the sixty days following the sale

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

IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT

CORNELIUS J. DEVER and
ASSUNTA A. DEVER,

Appellants,

v.

WELLS FARGO BANK
NATIONAL ASSOCIATION, AS
SUCCESSOR BY MERGER TO
WACHOVIA BANK NATIONAL
ASSOCIATION; FIFTH THIRD
MORTGAGE COMPANY; and RBC
BANK (USA),

Appellees.
___________________________________

Opinion filed August 27, 2014.

Appeal from the Circuit Court for Lee
County; Sherra Winesett, Judge.

Richard E. Stadler of Darby Peele Crapps
Green & Stadler, LLP, Lake City, for
Appellants.

Todd A. Armbruster of Moskowitz, Mandell,
Salim & Simowitz, P.A., Fort Lauderdale,
for Appellee Wells Fargo Bank National
Association, as Successor by Merger to
Wachovia Bank National Association.
No appearance for remaining Appellees.

KHOUZAM, Judge.

This appeal arises from a dispute over the disbursement of surplus
proceeds from a foreclosure sale. Cornelius and Assunta Dever (the record property
owners) as well as Wells Fargo Bank (the holder of an unsatisfied mortgage) claimed
that they were entitled to the surplus proceeds. The circuit court ordered the surplus to
be disbursed to Wells Fargo, and the Devers appealed. We reverse and remand for the
circuit court to order the surplus disbursed to the Devers.

Fifth Third Mortgage Company filed a foreclosure suit against the Devers
in April 2011. In the complaint, Fifth Third asserted that Wells Fargo was a junior
lienholder. Wells Fargo filed an answer, admitting that it was a junior lienholder and
stating that it would be entitled to any and all surplus funds generated by a foreclosure
sale in this case up to the full amount of indebtedness. The Devers owed Wells Fargo
$134,578.17.

A default judgment was entered against the Devers on March 23, 2012.
The final judgment of foreclosure included the following language, as required by
section 45.031(1), Florida Statutes (2011):

IF THIS PROPERTY IS SOLD AT PUBLIC AUCTION,
THERE MAY BE ADDITIONAL MONEY FROM THE SALE
AFTER PAYMENT OF PERSONS WHO ARE ENTITLED
TO BE PAID FROM THE SALE PROCEEDS PURSUANT
TO THIS FINAL JUDGMENT.

IF YOU ARE A SUBORDINATE LIENHOLDER CLAIMING A
RIGHT TO FUNDS REMAINING AFTER THE SALE, YOU
MUST FILE A CLAIM WITH THE CLERK NO LATER THAN
60 DAYS AFTER THE SALE. IF YOU FAIL TO FILE A
CLAIM, YOU WILL NOT BE ENTITLED TO ANY
REMAINING FUNDS.

IF YOU ARE THE PROPERTY OWNER, YOU MAY CLAIM
THESE FUNDS YOURSELF.
A foreclosure sale was held on April 25, 2012, and resulted in a surplus of
$85,899.06, which was placed in the court registry. The certificate of disbursements
was filed on May 8, 2012, and included the following language as required by section
45.031(7)(b):

If you are a person claiming a right to funds remaining after
the sale, you must file a claim with the clerk no later than 60
days after the sale. If you fail to file a claim, you will not be
entitled to any remaining funds. After 60 days, only the
owner of record as of the date of the lis pendens may claim
the surplus.

No claims to the surplus were filed during this sixty-day period.
In November 2012, the Devers filed a motion to disburse surplus sale
proceeds. In the motion, the Devers acknowledged that Wells Fargo, as a subordinate
lienholder, may at one point have had a claim to the surplus funds. But the Devers
argued that Wells Fargo was barred from claiming the surplus because it had failed to
file a claim for the funds within the sixty days following the sale. Wells Fargo responded
in March 2013 by filing its own motion to disburse surplus funds and memorandum of
law opposing the Devers’ motion. Relying on Citibank v. PNC Mortgage Corp. of
America, 718 So. 2d 300 (Fla. 2d DCA 1998), Wells Fargo argued that it had timely
raised a claim to the surplus in its answer. The circuit court granted Wells Fargo’s
motion, denied the Devers’ motion, and ordered the funds to be disbursed to Wells
Fargo.

We hold that the circuit court erred in ordering the funds to be disbursed to
Wells Fargo. Wells Fargo is barred from claiming any interest in the surplus funds
because it failed to file a claim for the surplus within the sixty days after the sale. This
court recently addressed this exact issue in Mathews v. Branch Banking & Trust Co.,
139 So. 3d 498 (Fla. 2d DCA 2014). In Mathews, this court held that the language in
section 45.031(7)(b) is clear and unambiguous: any person claiming a right to the
surplus funds must file a claim with the clerk no later than sixty days after the sale. And
section 45.031(1)(a) specifically warns that if a subordinate lienholder fails to file a
claim, it will not be entitled to any remaining funds. Subsection (7)(b) reiterates this
requirement. Further, section 45.032(2) establishes a rebuttable presumption that the
owner of record is entitled to the surplus after any subordinate lienholders who timely
filed claims have been paid. Accordingly, we must reverse and remand for the circuit
court to order the surplus disbursed to the Devers.

We also note that Citibank, on which both Wells Fargo and the circuit
court relied, does not apply here. In Mathews, this court specifically held that the circuit
court’s reliance on Citibank was misplaced because it was decided before chapter 45
was amended to include the sixty-day time limit to file a claim for surplus funds. 139 So.
3d at 501. The time limit was not added until 2006 and did not take effect until July of
that year. Ch. 06-175, §§ 1-2, at 1810-17, Laws of Fla. We similarly conclude that U.S.
v. Sneed, 620 So. 2d 1093 (Fla. 1st DCA 1993); JP Morgan Chase Bank v. U.S. Bank
National Ass’n, 929 So. 2d 651 (Fla. 4th DCA 2006); and other cases that were decided
before the effective date of the amendment are inapplicable here for the same reason.

We disagree with Wells Fargo’s argument that the language found in
section 45.032(3)(b) undermines the clear language in section 45.031(7)(b). Section
45.032(3)(b) provides in relevant part:

If any person other than the owner of record claims an
interest in the proceeds during the 60-day period or if the
owner of record files a claim for the surplus but
acknowledges that one or more other persons may be
entitled to part or all of the surplus, the court shall set an
evidentiary hearing to determine entitlement to the surplus.
(emphasis added). Wells Fargo argues that this section sets up two possible scenarios
where a hearing would be needed—one where a claim has been filed within the sixtyday
period and another where the owner has acknowledged at any time that there is a
subordinate lienholder that may be entitled to funds. But Wells Fargo has taken this
statutory language out of context.

Section 45.031 sets out the procedure for judicial sales and establishes
the sixty-day deadline for claims to any surplus, see §§ 45.031(1)(a), (2)(f), (7)(b).
Section 45.032 then provides the procedure for the disbursement of surplus funds after
a judicial sale and establishes “a rebuttable legal presumption that the owner of record
on the date of the filing of a lis pendens is the person entitled to surplus funds after
payment of subordinate lienholders who have timely filed a claim,” see § 45.032(2)
(emphasis added). Section 45.032(3) provides that the clerk shall hold the surplus for
sixty days after the certificate of disbursements is issued, pending a court order. If the
owner claims the surplus during the sixty-day period, the owner should acknowledge if
there are any subordinate lienholders who may have a right to the funds. §
45.032(3)(a). So section 45.032(3)(b), read in the context of the surrounding statutory
sections, clearly indicates that a hearing must be held where any subordinate
lienholders have been brought to the clerk’s attention during the sixty-day period—either
where the subordinate lienholder files its own claim or the owner files a claim but
acknowledges the existence of the subordinate lienholder. Thus, section 45.032,
considered in its entirety and read in conjunction with section 45.031, undoubtedly
contemplates that all claims to the surplus be filed within the sixty days following the
sale and that if no claims are filed during that period the owner is presumed to be
entitled to the surplus.

Reversed and remanded with directions.

WALLACE, J., and DAKAN, STEPHEN L., ASSOCIATE SENIOR JUDGE, Concur.

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HSBC, Nomura lose bid to avoid U.S. agency’s mortgage lawsuits

HSBC, Nomura lose bid to avoid U.S. agency’s mortgage lawsuits

Reuters-

A U.S. regulator can proceed with lawsuits accusing HSBC Holdings Plc and Nomura Holdings Inc of misleading Fannie Mae and Freddie Mac into buying mortgage-backed securities that later turned toxic, a federal judge ruled on Thursday.

The decision from U.S. District Judge Denise Cote in Manhattan clears the way for HSBC to face trial Sept. 29 in a case by the Federal Housing Finance Agency that the bank has estimated could expose it to $1.6 billion in liability.

FHFA launched 18 lawsuits in 2011 over about $200 billion in mortgage-backed securities. HSBC, Nomura and Royal Bank of Scotland Group Plc are the remaining banks being sued by the regulator.

[REUTERS]

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HSBC Bank USA, N.A. v Gilbert | NY Appeals Court – plaintiff failed to demonstrate its prima facie entitlement to judgment as a matter of law, because it did not eliminate triable issues of fact regarding whether it had standing as the lawful holder or assignee of the subject note on the date it commenced the action

HSBC Bank USA, N.A. v Gilbert | NY Appeals Court – plaintiff failed to demonstrate its prima facie entitlement to judgment as a matter of law, because it did not eliminate triable issues of fact regarding whether it had standing as the lawful holder or assignee of the subject note on the date it commenced the action

Decided on August 27, 2014 SUPREME COURT OF THE STATE OF NEW YORK Appellate Division, Second Judicial Department
WILLIAM F. MASTRO, J.P.
MARK C. DILLON
ROBERT J. MILLER
JOSEPH J. MALTESE, JJ.
2013-01081
(Index No. 9436/09)

[*1]HSBC Bank USA, National Association, etc., respondent,

v

Arlene Gilbert, et al., appellants, et al., defendants.

Amed Marzano & Sediva, PLLC, New York, N.Y. (Alexander Sediva and Naved Amed of counsel), for appellants.

Friedman Harfenist Kraut & Perlstein, LLP, Lake Success, N.Y. (Andrew Lang of counsel), for respondent.

DECISION & ORDER

In an action to foreclose a mortgage, the defendants Arlene Gilbert and James Coffey appeal, as limited by their brief, from so much of an order of the Supreme Court, Dutchess County (Brands, J.), dated November 30, 2012, as granted that branch of the plaintiff’s motion which was for summary judgment on the complaint insofar as asserted against them.

ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and that branch of the plaintiff’s motion which was for summary judgment on the complaint insofar as asserted against the appellants is denied.

On or about May 14, 2005, the defendant Arlene Gilbert executed a note to borrow the sum of $227,500 from Homebridge Mortgage Bankers Corp. The note was secured by a mortgage executed by Gilbert and the defendant James Coffey (hereinafter together the appellants). The mortgage was subsequently assigned to the plaintiff and, when the appellants defaulted, the plaintiff commenced this action to foreclose the mortgage, alleging, inter alia, that it was the owner and holder of the note and the mortgage. The appellants asserted the plaintiff’s lack of standing as an affirmative defense. The plaintiff moved, inter alia, for summary judgment on the complaint insofar as asserted against the appellants, and the Supreme Court granted that branch of the motion.

In a mortgage foreclosure action, where the plaintiff’s standing to commence the action is placed in issue by the defendant, the plaintiff must prove standing to be entitled to relief (see Bank of N.Y. Mellon v Gales, 116 AD3d 723; U.S. Bank, N.A. v Collymore, 68 AD3d 752). The plaintiff has standing where, at the time the action is commenced, it is the holder or assignee of both the subject mortgage and the underlying note (see Bank of N.Y. Mellon v Gales, 116 AD3d 723; Deutsche Bank Natl. Trust Co. v Haller, 100 AD3d 680; Bank of N.Y. v Silverberg, 86 AD3d 274). Written assignment of the underlying note or physical delivery of the note prior to the commencement of the action is sufficient to transfer the obligation (see Bank of N.Y. Mellon v Gales, 116 AD3d 723; Deutsche Bank Natl. Trust Co. v Haller, 100 AD3d 680; U.S. Bank, N.A. v [*2]Collymore, 68 AD3d 752). Once a promissory note is tendered to and accepted by an assignee, the mortgage passes as an incident to the note (see Bank of N.Y. v Silverberg, 86 AD3d 274; Mortgage Elec. Registration Sys., Inc. v Coakley, 41 AD3d 674). However, the assignment of a mortgage without assignment of the underlying debt is a nullity, and no interest is acquired by it (see Bank of N.Y. Mellon v Gales, 116 AD3d 723; HSBC Bank USA v Hernandez, 92 AD3d 843; Bank of N.Y. v Silverberg, 86 AD3d 274).

Here, the plaintiff failed to demonstrate its prima facie entitlement to judgment as a matter of law, because it did not eliminate triable issues of fact regarding whether it had standing as the lawful holder or assignee of the subject note on the date it commenced the action (see Bank of N.Y. Mellon v Gales, 116 AD3d 723; HSBC Bank USA v Hernandez, 92 AD3d 843; U.S. Bank, N.A. v Collymore, 68 AD3d 752).

Accordingly, the Supreme Court erred in granting that branch of the plaintiff’s motion which was for summary judgment on the complaint insofar as asserted against the appellants.

MASTRO, J.P., DILLON, MILLER and MALTESE, JJ., concur.

ENTER:

Aprilanne Agostino

Clerk of the Court

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U.S. Bank N.A. v Pia | NYSC – Plaintiff cannot escape responsibility for the loan it acquired. Public policy neither provides for shifting the burden of Plaintiff’s violation of TILA to Defendants, nor does it allow for Plaintiff to claim it is somehow insulated or protected from the obligation to correct the violation they acquired

U.S. Bank N.A. v Pia | NYSC – Plaintiff cannot escape responsibility for the loan it acquired. Public policy neither provides for shifting the burden of Plaintiff’s violation of TILA to Defendants, nor does it allow for Plaintiff to claim it is somehow insulated or protected from the obligation to correct the violation they acquired

Decided on August 26, 2014

Supreme Court, Putnam County

 

U.S. Bank National Association AS TRUSTEE UNDER POOLING AND SERVICING AGREEMENT DATED AS OF MARCH 1, 2006 ASSET BACKED SECURITIES CORPORATION HOME EQUITY LOAN TRUST, SERIES NC-2006- HE2 ASSET BACKED PASS-THROUGH CERTIFICATES, SERIES NC 2006-HE2, Plaintiff,

against

Lisa Ann Pia AND XAVIER F. PIA, Defendants.

976/2007

Marco Cercone, Esq.

Rupp, Baas, Pfalzgraf,

Cunningham, & Coppola LLC

Attorneys for Plaintiff

1600 Liberty Building

Buffalo, New York 14202

Daniel A. Schlanger, Esq.

Schlanger & Schlanger, LLP

Attorneys for Defendants

343 Manville Road

Pleasantville, New York 10570
Victor G. Grossman, J.

On December 8, 2005, Defendant Lisa Ann Pia executed a Note and Mortgage in the amount of $372,000.00 secured by her property at 13 Lowell Road, Carmel, New York. On or about May 10, 2007, the instant foreclosure action was commenced. Defendants answered the Complaint, asserted counterclaims, and interposed a third-party action, as well as an Amended Answer on July 9, 2007, and a Second Amended Verified Answer on February 14, 2008, containing counterclaims and a third-party complaint. Plaintiff replied to the counterclaims. The gravamen of Defendants’ allegations are that Plaintiff and Third-Party Defendants violated the Truth-in-Lending Act (“TILA”), Real Estate Settlement Procedures Act (“RESPA”), and various state laws, including General Business Law (“GBL”) §349. They sought, inter alia, rescission of the loan and damages. In May 2009, Defendants moved for partial summary judgment, and Plaintiff moved for summary judgment on the foreclosure action and dismissal of Defendants’ counterclaims. The motions were denied by Decision and Order dated May 15, 2009 as the Court (O’Rourke, J.) observed, “There are many issues which must be determined and cannot be resolved by summary judgment.” The issues were heard in a “framed-issue” hearing before the Hon. Francis A. Nicolai in March 2011.

The Court, by Order entered October 19, 2011 (Nicolai, J.), determined that Defendants were entitled to rescission of the instant mortgage and to attorney’s fees and costs, pursuant to the Truth in Lending Act. A Referee was appointed to determine the specific amounts to be paid to affect rescission of the loan. United States Bank Nat’l Assn v. Pia, 2011 NY Misc. LEXIS 4962 (N.Y.Sup. Ct. Oct. 7, 2011). Justice Nicolai’s Decision was affirmed by the Appellate Division. U.S.Bank, N.A. v Pia, 106 AD3d 991 (2d Dept. 2013), and leave to appeal was denied by the Court of Appeals. 21 NY3d 1071 (2013).

By Order dated April 25, 2013, this Court adopted the Referee’s Report and Recommendation, and directed Plaintiff to:

“1.Tender to the Defendants the sum of $37,472.91 with interest thereon at the statutory rate of 9% from October 9, 2011 to October 9, 2013;

2.Terminate the existing Mortgage on the subject property by preparing a Release of Mortgage for Defendants to review;

3.Deliver to Defendants a proposed new Mortgage for $ 196,277.09 payable by one payment of $37,472.91 and 267 monthly payments of $733.00 and one final payment of $566.09.”[FN1]

No appeal was taken from this Order, and Plaintiff did not undertake any efforts to [*2]comply with the Order between April 25, 2013 and November 6, 2013. Pursuant to the Court’s instructions on November 6, 2013, Defendants filed a proposed order giving Plaintiff a thirty-day opportunity to comply with the prior Orders of the Court. The Order was signed with minor modifications on December 9, 2013, and Plaintiff was served with the Order with Notice of Entry on December 24, 2013. The new Order, in salient terms, directed the same relief as the April 25, 2013 Order. No appeal was taken from the Order entered on December 24, 2013.

The October 19, 2011 Order awarded attorney’s fees, but left the amount to be determined upon future application. This Court, by Justice Nicolai, awarded attorney’s fees of $265,453.86 and costs of $12,252.52, by Decision entered on December 17, 2013, and served with Notice of Entry on December 26, 2013. The Decision was reduced to a money Judgment on January 6, 2014, and was served with Notice of Entry on January 13, 2014. No appeal was taken from that Judgment.

On January 14, 2014, Defendants served an Information Subpoena and Restraining Notice, pursuant to CPLR §§5224(a)(3) and 5222. Plaintiff’s deadline to answer the Information Subpoena and comply with the Restraining Notice has passed, without compliance. No attempt was made to condition or quash the Information Subpoena and/or Restraining Notice until the instant Cross-Motion was filed on or about May 8, 2014.

Plaintiff’s Cross-Motion seeks to quash or modify the Information Subpoena and Restraining Notice on the grounds they are based on an interlocutory judgment, and are calculated to harass, annoy, intimidate, or otherwise put undue pressure on Plaintiff to comply with the Decision and Order of the Trial Court, which Plaintiff considers “unlawful”, despite its affirmance by the Second Department and the denial of leave to appeal by the Court of Appeals. Plaintiff further seeks an Order, pursuant to CPLR §5016, disposing of all claims that remain outstanding, in order to pursue its appellate remedies. Thus, the Court is presented with three Orders and Judgment, which have neither been complied with, nor appealed from. Plaintiff asserts the ordered remedy is unlawful, and Defendants’ assert they are entitled to enforcement of their Judgment and the Orders entered herein.

In view of the issues raised, the parties appeared for oral argument on June 6, 2014, and the Court reserved decision allowing for post-argument submissions.[FN2]

The Judgment awarding attorney’s fees then due and owing has not been appealed. It is final and conclusive on that issue. The finality is strengthened by the Appellate Division’s affirmance of Justice Nicolai’s October 19, 2011 Order, which held attorney’s fees were properly awarded. Moreover, the April 25, 2013 Order, confirming the Referee’s Report and Recommendation, from which no appeal was taken, supports the award of attorney’s fees. Plaintiff fails to offer any support for the claim that the Information Subpoena and Restraining Notices are calculated to harass, annoy, intimidate, or otherwise put undue pressure on Plaintiff. Instead, Plaintiff proposes Justice Nicolai’s Order, affirmed by the Appellate Division, and the Order confirming the Report and Recommendation of the Referee, are “unlawful”. In short, Plaintiff wants “another bite of the apple” by way of a further ruling from this Court that may be appealed.

Specifically, Plaintiff further seeks an Order “fully disposing of all outstanding claims or, in the alternative, issuing a scheduling order with respect to its remaining claims.” Plaintiff asserts there are outstanding claims against it that have not been resolved, precluding the entry of final judgment (Cercone Affirmation ¶81). Plaintiff asserts Defendants’ Third Counterclaim regarding alleged violations of GBL §349 remains unresolved (Cercone Affirmation ¶84), and the Court has not issued a final order or judgment disposing of all claims. As a result, as Plaintiff claims, its appellate remedies are limited because there is no “final determination” of the matter, as the determinations made herein are non-final. Plaintiff observes the denial of leave to appeal Justice Nicolai’s October 19, 2011 Order was due to the fact that it was “not a final order”, and further proceedings were undertaken.

However, a careful reading of the Record reveals the lack of any outstanding issues. Notably, when Justice Nicolai signed an Order, confirming the Referee’s Report and Recommendations, the issue of attorney’s fees and “any remaining claims are hereby severed and shall be addressed at a hearing,” which he scheduled for June 7, 2013. To the extent that the hearing only addressed the issue of attorney’s fees, the remaining issues, such as the third counterclaim (GBL §349) or third-party claims, were waived by Defendants. Defendants’ failure to pursue the third counterclaim constitutes a default under CPLR §3215(a). Eller v. Eller, 116 AD2d 617 (2nd Dept. 1986). Plaintiff cannot rely on Defendants’ default or waiver as a basis for further appellate relief. Certainly, Plaintiff cannot claim to be harmed by not having to defend a claim. Insofar as no further testimony was offered with respect to the Third Counterclaim, or the Third-Party action, those matters have been waived, and the Judgment entered on January 13, 2014, was, and is, the final Judgment in this matter. No appeal was taken from the Judgment; consequently, Plaintiff’s Cross-Motion seeking an order disposing of all claims, or in the alternative, issuing a scheduling order, is denied.

Defendant’s motion is granted. Plaintiff is in contempt for failing to comply with the Order Confirming the Referee’s Report and Judgment of this Court awarding attorney’s fees. The Decision, Order and Judgment of December 17, 2013, to the extent that it addressed two of the three counterclaims, also implicitly dismissed the third counterclaim under GBL §349 as having been waived by Defendants, or defaulted upon, when it was not pursued at the hearing. While the better practice would have been to recite the dismissal of the third counterclaim, the failure to do so is not fatal to the “finality” of the action. The finality of the Order and Judgment rests on the disposition of the causes of action between the parties, leaving nothing for future judicial action. Burke v. Crosson, 85 NY2d 10 (1995). The failure to appeal from the Decision, Order and Judgment entered on June 17, 2013 is not saved or excused by the entry of a separate judgment on the issue of attorney’s fees from which no appeal was taken. Shah v. State, 212 AD2d 876 (3rd Dept. 1995). A final order may not be reviewed on appeal from a later judgment. Crystal v. Manes, 130 AD2d 979 (4th Dept. 1987); Matter of Burke v. Axelrod, 90 AD2d 577 (3d Dept. 1982). According to Professor Siegel, the term “final” “has usually been given a pragmatic interpretation meaning a judgment or order that puts an end to the case, or to a logically separable part of it, and leaves nothing else in respect of it to be decided” Siegel, New York Practice, 4th ed. §527, p. 900 (emphasis added).

Plaintiff fails to offer any viable, or cognizable, excuse for its failure to comply with the Judgment awarding attorney’s fees and disbursements. The delays and excuses offered by Plaintiff’s counsel, based on their recent entry into the matter, are far from persuasive. This is especially true when Plaintiff’s counsel claims, at oral argument, that he “had teams of people [*3]looking at pulling the servicing agreement,” and his firm began its review in February 2014, but did not substitute into the matter until April 4, 2014 (Didone Affidavit ¶80, 84). The explanations offered focus on the enforcement, compliance with, or challenge to the Order Confirming the Referee’s Report, and fail to address the issue of the Judgment awarding attorney’s fees. Interest is accruing on the Judgment awarding attorney’s fees, costs, and disbursements, but compliance is inexcusably outstanding. The Court is concerned that Plaintiff’s pattern of delay, failure to comply, failure to seek relief, and general inertia is designed to evade the remedies to which Defendants are entitled.

Plaintiff’s request to quash Defendants’ Information Subpoena is denied. Plaintiff fails to identify any reason for supporting a Protective Order. Plaintiff’s contention — that “Defendants’ efforts to enforce an interlocutory judgment before the entire matter is brought to finality is premature” — is erroneous. The award of attorney’s fees, which is the basis of the Judgment, occurred after a full opportunity to be heard to litigate the matter. No appeal was taken. Defendants may pursue all enforcement remedies available to them until the Judgment is satisfied. The award of attorney’s fees is derived from violations of TILA. The alleged “unlawful order” (Order Confirming Referee’s Report) is an attempt to remedy the situation which, regardless of whether it had been properly and timely challenged, would not affect Defendants’ rights to recover legal fees for the underlying violation. The Court will reserve decision on the issue of further sanctions, additional attorneys’ fees and orders of commitment as available remedies. Kahn v. Enbar, 2011 NY Slip Op. 31192(U) (Sup. Ct., NY Co., April 26, 2011); 1319 Third Avenue Realty Corp. v. Chauteaubriant Restaurant Development Co., LLC, 57 AD3d 340 (1st Dept. 2008); Lipstick, Ltd. v. Grupo Tribasa, S.A., de C.V., 304 AD2d 482 (1st Dept. 2003).

Plaintiff further claims it cannot be held in contempt for refusing to comply with the Order Confirming the Referee’s Report, because the Order is “unlawful” in that it would force Plaintiff to violate one federal law by complying with another, and it may suffer tax consequences as a result. This claim is rejected. First, no appeal was taken from the Order, nor was any motion made to reargue it. Second, Plaintiff assumed certain risks when it acquired the loan, and it cannot evade or avoid the risks by attempting to insulate itself from liability at Defendants’ expense. Third, the claim made by present counsel, that former counsel “dropped the ball” (Cercone, oral argument, pp. 23), is not a basis for relief. Fourth, TILA violations are subject to equitable remedies, and it cannot be said the equitable remedy here was “unlawful”. Berkely Federal Bank and Trust, FSB, v. Siegel, 247 AD2d, supra at 499; 15 U.S.C. §1635(b). Fifth, Plaintiff has failed to comply with, or appeal from, three separate Orders and a Judgment of this Court. Sixth, Plaintiff’s late submission of a March 20, 2014 letter from Ocwen Loan Servicing to Credit Suisse (Didone Affidavit, July 17, 2014, Exhibit B) contains an acknowledgment that “Repurchase is required under Section 2.03(a) due to a breach of the warranties made by the Seller that render Loan 70651414 to borrower Lisa Ann Pia unenforceable”. The letter also contains the acknowledgment “there is some case law precedent for this [remedy] procedure which ultimately is an equitable remedy” . Plaintiff cannot escape responsibility for the loan it acquired. Public policy neither provides for shifting the burden of Plaintiff’s violation of TILA to Defendants, nor does it allow for Plaintiff to claim it is somehow insulated or protected from the obligation to correct the violation they acquired.

Under these circumstances, contempt is not only an appropriate remedy, but also a necessary one. Should Plaintiff fail to fully comply with the Information Subpoena and [*4]Restraining Notice within thirty (30) days of service of this Decision and Order with Notice of Entry, Defendants may apply to this Court for further relief. In the interim, Defendants may pursue any and all enforcement and contempt remedies they deem appropriate, including additional attorney’s fees. Further, Plaintiff shall pay all attorney’s fees which have been reduced to Judgment entered on January 6, 2014, with interest thereon, and shall pay a statutory fine of $250.00.

The foregoing constitutes the Decision and Order of the Court.

Dated:Carmel, New York

__________________________________

HON. VICTOR G. GROSSMAN, J.S.C.

Footnotes

Footnote 1:TILA (15 U.S.C.§1601 et. seq.) provides for equitable remedies such as those outlined in Referee’s Report. Berkeley Federal Bank & Trust, FSB v. Siegel, 247 AD2d 498 (2nd Dept. 1998). In light of specific statutory authority providing for rescission, an equitable doctrine, upon a TILA violation (15 U.S.C. 1635[b]), it cannot be said the remedy is unlawful.

Footnote 2:

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THE OCWEN CLAIM PACKAGE (THAT NO EVICTED PERSON HAS LIKELY RECEIVED!) MUST BE SUBMITTED ONLINE OR VIA USPS MAIL WITH A DEADLINE DATE OF ***SEPTEMBER 15, 2014*

THE OCWEN CLAIM PACKAGE (THAT NO EVICTED PERSON HAS LIKELY RECEIVED!) MUST BE SUBMITTED ONLINE OR VIA USPS MAIL WITH A DEADLINE DATE OF ***SEPTEMBER 15, 2014*

Via a reader of this site:

JUST LIKE THE NATIONAL MORTGAGE SETTLEMENT (SELLOUT), THERE IS A *CLAIM FILING DEADLINE* FOR HOMEOWNERS WHO WERE FORECLOSED UPON BY AHMSI/HOMEWARD RESIDENTIAL/OCWEN AS SERVICERS.

THE CLAIM PACKAGE (THAT NO EVICTED PERSON HAS LIKELY RECEIVED!) MUST BE SUBMITTED ONLINE OR VIA USPS MAIL WITH A DEADLINE DATE OF ***SEPTEMBER 15, 2014***.

(RUST CONSULTING) CONTACT NUMBER TO REQUEST A CLAIM PACKAGE FOR SUBMISSION:
        CFPB OCWEN SETTLEMENT 866-783-5382 between 7 am and 7 pm CT M-F

=========

THERE ARE CRITICAL LINKS/INFORMATION IN THIS LETTER I RECEIVED VIA USPS YESTERDAY:

Thank you for contacting the CFPB Ombudsman’s Office regarding the settlement made between Ocwen Financial Corporation and the CFPB and authorities in 49 states and the District of Columbia.  As you may know, the Ombudsman’s Office addresses issues that consumers, banks, or nonbanks may have as they interact with the CFPB. More information about our resource can be found at www.consumerfinance.gov/ombudsman.

The court order concerning the settlement is at this link: http://files.consumerfinance.gov/f/201312_cfpb_consent-order_ocwen.pdf . Additionally, information about the Ocwen settlement has been posted on the Web by the settlement administrator. These websites can be found at http://www.nationalmortgagesettlement.com and, more specifically, http://nationalocwensettlement.com.

The CFPB recently published a blog posting with information on making a claim under the Ocwen settlement. That information can be found at http://www.consumerfinance.gov/blog/claim-forms-for-the-ocwen-settlement-available-now .

For additional information concerning the settlement, including the specific eligibility terms for payment as a foreclosure victim of Ocwen (which can be found on page 3 of the PDF document) you may wish to review this Frequently Asked Questions document published by the CFPB: http://files.consumerfinance.gov/f/201312_cfpb_common-questions_ocwen.pdf .

The website of the California Attorney General has a robust FAQ section concerning the settlement which can be reviewed here: http://oag.ca.gov/ag-mortgage-settlements/ocwen-faqs.

Finally, the https://nationalocwensettlement.com website has a phone number through which you may contact the settlement administrator with questions. This phone number is 866-783-5382, and the line is available from Monday-Friday from 7 a.m. to 7 p.m. Central time. You may wish to call this number to inquire about your eligibility for relief arising out of the settlement.

[...]

SEE THE ATTACHED 6 pg. OCWEN SETTLEMENT FAQ PDF.

For additional information concerning the settlement, including the specific eligibility terms for payment as a foreclosure victim of Ocwen (which can be found on page 3 of the PDF document) you may wish to review this Frequently Asked Questions document published by the CFPB: http://files.consumerfinance.gov/f/201312_cfpb_common-questions_ocwen.pdf .

Look at middle of page 3 and top of page 4!

What a joke! It tells already foreclosed-upon homeowners to give their current contact information to their state attorney general????

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You Thought the Mortgage Crisis Was Over? It’s About to Flare Up Again

You Thought the Mortgage Crisis Was Over? It’s About to Flare Up Again

Tic-Toc…tic-toc


New Republic-

We are nearly eight years removed from the beginnings of the foreclosure crisis, with over five million homes lost. So it would be natural to believe that the crisis has receded. Statistics point in that direction. Financial analyst CoreLogic reports that the national foreclosure rate fell to 1.7 percent in June, down from 2.5 percent a year ago. Sales of foreclosed properties are at their lowest levels since 2008, and the rate of foreclosure starts—the beginning of the foreclosure process—is at 2006 levels. At the peak, 2.9 million homes suffered foreclosure filings in 2010; last year, the number was 1.4 million.

But these numbers are likely to reverse next year, with foreclosures spiking again. And it has nothing to do with recent-vintage loans, which actually have performed as well as any in decades. Instead, a series of temporary relief measures and legacy issues from the crisis will begin to bite in 2015, causing home repossessions that could present economic headwinds. In other words, the foreclosure crisis was never solved; it was deferred. And next year, the clock begins to run out on that deferral.

The problem comes from many different angles. First, as the Los Angeles Times reported recently, home equity lines of credit—second mortgages that homeowners took out during the bubble years, essentially using their homes as an ATM—will start to feature increased payments, as borrowers must pay back principal instead of just the interest. TransUnion, the credit rating firm, estimates that between $50 and $79 billion in home-equity loans risk default because of the increased payments, which could add hundreds or even thousands of dollars to payments a month.

Home equity resets will be concentrated in areas most affected by the housing bubble, because that’s where the most lending took place. These are precisely the areas whose economies remain depressed b_

[NEW REPUBLIC]

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In re Demers, 511 B.R. 233 (Bankr. D. R.I. 2014) | In sum, (1) the notice was defective in that it did not mention the right to court action, (2) proper notice was a **condition precedent** to the right to accelerate and foreclose . . .

In re Demers, 511 B.R. 233 (Bankr. D. R.I. 2014) | In sum, (1) the notice was defective in that it did not mention the right to court action, (2) proper notice was a **condition precedent** to the right to accelerate and foreclose . . .

UNITED STATES BANKRUPTCY COURT
DISTRICT OF RHODE ISLAND

In re: Donnalee M. Demers BK No: 13-11539
Debtor Chapter 13
______________________________________________________________________________
MEMORANDUM AND ORDER

Donnalee Demers (“Ms. Demers”) filed a Chapter 13 petition on June 7, 2013, and
shortly thereafter proposed a five year plan to address the claims of her creditors. The Court
confirmed a modified plan in August 2013 (the “Plan”).1 Under the Plan Ms. Demers will pay in
full a pre-petition mortgage arrearage owed to America’s Servicing Company (“ASC”).2 ASC
filed a proof of claim listing an arrearage owed on its mortgage of $14,181.61. Ms. Demers
objected to the amount of ASC’s claim, contending that ASC included in the arrearage
calculation $1,979.40 it is not entitled to be paid, consisting of counsel fees of $1,170.00,
advertising costs of $534.40, and title costs of $275.00 (together the “Disputed Charges”), all of
which relate to a foreclosure proceeding ASC commenced prior to the filing of Ms. Demers’
Chapter 13 petition. See Limited Objection to Allowance of Claim #4 (Doc. #28). Ms. Demers
asserts that ASC is not entitled to payment of the Disputed Charges because it “failed to provide
a proper notice of default prior to acceleration and the commencement of foreclosure” as
required by the loan agreement. ASC counters that it complied with all contractual provisions of
the loan agreement, and even if it did not strictly comply it is contractually entitled to recover the
Disputed Charges from Ms. Demers. After consideration of the parties’ arguments, I conclude
that ASC failed to satisfy a condition precedent to its rights to accelerate the debt and pursue its
foreclosure remedy. Accordingly, it is not entitled to recover the Disputed Charges as part of its
claim.

[...]

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Benz v. Federal Home Loan Mortgage Corp || “…or that the parties to the transfer “were attempting to backdate an event to their benefit.” ” ||| Accordingly, we reverse the summary judgment.

Benz v. Federal Home Loan Mortgage Corp || “…or that the parties to the transfer “were attempting to backdate an event to their benefit.” ” ||| Accordingly, we reverse the summary judgment.

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

IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT

JOHN J. BENZ and TRICIA McLAGAN,

Appellants,

v.

FEDERAL HOME LOAN MORTGAGE
CORP.,

Appellee.
__________________________________
Opinion filed August 22, 2014.

Appeal from the Circuit Court for Polk
County; Ellen S. Masters, Judge.
C. Michael Duncan of Duncan Law
Offices, P.A., Tavares, for Appellants.
Edward J. O’Sheehan of Shutts & Bowen,
LLP, Fort Lauderdale, for Appellee.

NORTHCUTT, Judge.

John Benz and Tricia McLagan, husband and wife, appeal a final
summary foreclosure judgment in favor of Federal Home Loan Mortgage Corp. (Freddie
Mac). We reverse because the record fails to resolve material issues of fact regarding
Freddie Mac’s standing.

Freddie Mac filed the mortgage foreclosure action against Benz,
McLagan, and others on March 11, 2009. The complaint alleged that the note and
mortgage were recorded in January 2005 and that the mortgage was subsequently
assigned to Freddie Mac “by virtue of an assignment to be recorded.” The complaint
attached a copy of the mortgage only and included a count to establish a lost,
destroyed, or stolen note and mortgage. National City Mortgage Co. was the lender
identified in the mortgage; Benz and McLagan were identified as the borrowers. In a
motion to dismiss, the borrowers asserted, in part, that Freddie Mac was not the
mortgagee.

Freddie Mac eventually filed an amended complaint dropping the count to
establish a lost note and mortgage and alleging that the mortgage was assigned to it “by
virtue of an assignment recorded on August 31, 2009.” The attached assignment
reflected that it was executed on August 5, 2009, after the foreclosure action was filed,
and recorded on August 31, 2009. The assignment stated that the mortgage was
assigned to Freddie Mac c/o National City Bank “as of the 3RD day of March, 2009,”
eight days before the foreclosure action was filed. It was executed by a vice president
of National City Bank, successor by merger to National City Mortgage Co. The
amended complaint attached a copy of the note this time, but not the mortgage. The
note bore an undated endorsement in blank by National City Mortgage Co.

Freddie Mac and the borrowers ultimately filed competing motions for
summary judgment. The borrowers’ motion attacked Freddie Mac’s standing at the time
the original complaint was filed. After a hearing, the circuit court granted summary
judgment for Freddie Mac, specifically rejecting the borrowers’ challenge to standing.
Summary judgment is governed by Florida Rule of Civil Procedure 1.510,
which provides in part that judgment “shall be rendered forthwith if the pleadings and
summary judgment evidence on file show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment as a matter of law.” Fla.
R. Civ. P. 1.510(c). We review summary judgments de novo. Volusia Cnty. v.
Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000).

The borrowers argue that the record does not conclusively show that
Freddie Mac had standing at the time it filed the original complaint on March 11, 2009.
Freddie Mac first responds that the issue is not preserved because the borrowers did
not raise lack of standing as an affirmative defense. While that may have been
preferable, the issue was nevertheless raised before the circuit court. As this court has
explained, the issue of standing may be raised by motion rather than by pleading an
affirmative defense.

[W]e reject the University’s argument that because Maynard
did not raise standing as an affirmative defense prior to trial,
he waived the issue. . . . [T]he pertinent question is whether
the issue was raised at the trial court, not how it was raised
. . . . [S]tanding may not be raised for the first time on
appeal; however, it does not necessarily require that
standing be raised only by means of an affirmative defense.
Maynard v. Fla. Bd. of Educ. ex rel. Univ. of S. Fla., 998 So. 2d 1201, 1206 (Fla. 2d
DCA 2009) (citations omitted).

The borrowers’ answer denied the allegations of the amended complaint
that pertained to standing, they raised lack of standing in a motion for summary
judgment, and they argued lack of standing in a memorandum filed in opposition to

Freddie Mac’s motion for summary judgment. Thus, the standing issue was argued to
and directly rejected by the circuit court, and we conclude that it was preserved for
appeal.

On the merits, we reverse. Freddie Mac filed a note endorsed in blank by
the original lender, National City Mortgage Co. But the endorsement was undated, and
the note was not filed with the original complaint. Freddie Mac points out that National
City Mortgage merged out of existence in 2008; the endorsement necessarily predated
that event. But this does not mean that Freddie Mac obtained the note in 2008.
Nothing in the record shows when Freddie Mac obtained the note; specifically, the
record does not establish that it held the note when it filed the foreclosure action in
March 2009.

Further, the document assigning the mortgage to Freddie Mac was
executed and recorded several months after the foreclosure action commenced,
although it recited an effective date just prior to the date the complaint was filed. The
Fourth District has explained that two competing inferences may be drawn from an
assignment that prescribes an earlier effective date: that the subject of the assignment
was equitably transferred on the stated effective date, or that the parties to the transfer
“were attempting to backdate an event to their benefit.” Vidal v. Liquidation Props., Inc.,
104 So. 3d 1274, 1277 (Fla. 4th DCA 2013) (reversing summary judgment of
foreclosure because the record did not reflect as a matter of law the plaintiff’s standing
on the date the complaint was filed).

The record in this case fails to demonstrate Freddie Mac’s standing on the
date the complaint was filed. Accordingly, we reverse the summary judgment. See
Focht v. Wells Fargo Bank, N.A., 124 So. 3d 308 (Fla. 2d DCA 2013) (reversing
summary judgment of foreclosure when there was a genuine issue of material fact
regarding the bank’s standing at the time the complaint was filed; standing not
established by either bank’s subsequent filing of assignment dated after complaint filed
or bank’s filing of note endorsed in blank but undated and not submitted until several
months after complaint was filed). Our decision renders moot the second issue on
appeal.

Reversed and remanded for further proceedings.

CASANUEVA and WALLACE, JJ., Concur.

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FHFA Announces Settlement with Goldman Sachs

FHFA Announces Settlement with Goldman Sachs

HAPPY FRIDAY! In hopes this all is forgotten by Monday and so their stock don’t take a hit. Nice going as usual.

Heard from the sources that Wells Fargo is next…

FOR IMMEDIATE RELEASE
8/22/2014

? Washington, D.C. – The Federal Housing Finance Agency (FHFA), as conservator of Fannie Mae and Freddie Mac, today announced it has reached a settlement with Goldman Sachs, related companies and certain named individuals.  The settlement addresses claims alleging violations of federal and state securities laws in connection with private-label mortgage-backed securities (PLS) purchased by Fannie Mae and Freddie Mac between 2005 and 2007.

Under the terms of the settlement, Goldman Sachs will pay $3.15 billion in connection with releases and the purchase of securities that were the subject of statutory claims in the lawsuit FHFA v. Goldman Sachs & Co., et al., in the U.S. District Court of the Southern District of New York.  Goldman Sachs will pay approximately $2.15 billion to Freddie Mac and approximately $1 billion to Fannie Mae.  This settlement, worth approximately $1.2 billion, effectively makes Fannie Mae and Freddie Mac whole on their investments in the securities at issue.  As part of the settlement, FHFA, Fannie Mae and Freddie Mac will release certain claims against Goldman Sachs & Co. related to the securities involved.

The settlement also resolves claims that involved a Goldman Sachs security in FHFA v. Ally Financial Inc., et al.  FHFA previously settled claims against Ally Financial Inc.

This is the sixteenth settlement reached in the 18 PLS lawsuits? FHFA filed in 2011.  Three cases remain outstanding and FHFA is committed to satisfactory resolution of those actions.

Link to Settlement Agreement with Fannie Mae

Link to Settlement Agreement with Freddie Mac???

 

###

? The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks.  These government-sponsored enterprises provide more than $5.6 trillion in funding for the U.S. mortgage markets and financial institutions.

Contacts:

?Corinne Russell (202) 649-3032 / Stefanie Johnson (202) 649-3030?

SOURCE: fhfa.gov

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BofA Accused of Rolling USA for $900 Million

BofA Accused of Rolling USA for $900 Million

Courthouse News-

Bank of America falsely certified that its home modification loans complied with federal laws in order to reap more than $907 million in government incentive payments, a man claims in a qui tam lawsuit in Federal Court.

Michael J. Fisher, of Southlake, Texas, says in his False Claims Act lawsuit that he worked for four years – 2008 through 2012 – assisting attorneys in securing mortgage loan modification for their homeowner clients.

The complaint was filed under seal in March in Manhattan Federal Court and unsealed this month.

Fisher claims to have reviewed hundreds of loan modification contracts from Bank of America and other lenders. He says he noticed a pattern of violations of the Truth in Lending Act.

[COURTHOUSE NEWS]

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GARCIA vs BAC HOME LOANS, ETC., ET. AL.,| FL 5DCA – Rule 1.420(e) does not authorize the dismissal of a complaint; it requires the dismissal of the action.

GARCIA vs BAC HOME LOANS, ETC., ET. AL.,| FL 5DCA – Rule 1.420(e) does not authorize the dismissal of a complaint; it requires the dismissal of the action.

IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FIFTH DISTRICT

NOT FINAL UNTIL TIME EXPIRES TO
FILE MOTION FOR REHEARING AND
DISPOSITION THEREOF IF FILED

ERIK GARCIA AND IRELA GARCIA,
Appellants,

v.

BAC HOME LOANS, ETC., ET. AL.,
Appellees.
________________________________/
Opinion filed August 22, 2014

Appeal from the Circuit Court
for Marion County,

William T. Swigert, Judge.

Mark P. Stopa, of Stopa Law Firm, Tampa, for
Appellants.

Miguel A. Gonzalez, John S. Graham and Alice K.
Sum, of Fowler White Burnett, PA, Miami; Jason
Joseph of Gladstone Law Group, P.A., Boca Raton;
Tricia J. Duthiers, J. Randolph Liebler, and Joshua
R. Levine, of Liebler, Gonzalez & Portuondo, Miami
for Appellees.

PER CURIAM.

On May 25, 2007, Appellants gave a note and mortgage in the amount of
$156,000 to Appellees. The mortgage went into default on October 1, 2009, and on
March 5, 2010, foreclosure was filed. Appellees sought to foreclose on the Garcias’
property. For several months, litigation proceeded as normal and then, suddenly, all
activity ceased. Nothing transpired between November 12, 2010, and November 7,
2011, when Appellants filed a notice of intent to dismiss for lack of prosecution, which
was mailed to Appellees on November 4, 2011. Nothing more was filed in the sixty
days following the notice of intent until January 6, 2012, when Appellants filed their
motion to dismiss for lack of prosecution, which was mailed to Appellees on January 4,
2012. On January 17, 2012, Appellees filed a motion to amend their complaint. On
February 13, 2012, the court entered its order dismissing Appellee’s complaint “without
prejudice” and, in the same order, granting Appellee’s motion to amend. On June 7,
2012, the court acknowledged in its order that Appellee’s complaint had been dismissed
for failure to prosecute.

The issue on appeal is whether the court erred in granting the leave to amend.

Florida Rule of Civil Procedure 1.420(e) reads:

In all actions in which it appears on the face of the record
that no activity by filing of pleadings, order of court, or
otherwise has occurred for a period of 10 months, and no
order staying the action has been issued nor stipulation for
stay approved by the court, any interested person, whether a
party to the action or not, the court, or the clerk of the court
may serve notice to all parties that no such activity has
occurred. If no such record activity has occurred within the
10 months immediately preceding the service of such notice,
and no record activity occurs within the 60 days immediately
following the service of such notice, and if no stay was
issued or approved prior to the expiration of such 60-day
period, the action shall be dismissed by the court on its own
motion or on the motion of any interested person, whether a
party to the action or not, after reasonable notice to the
parties, unless a party shows good cause in writing at least 5
days before the hearing on the motion why the action should
remain pending. Mere inaction for a period of less than 1
year shall not be sufficient cause for dismissal for failure to
prosecute.

Clearly, Appellees filed nothing within a ten-month period. After they received
notice from Appellants, they filed nothing within the sixty-day period. The court,
apparently acting on its own, dismissed Appellees’ complaint without prejudice and
granted Appellees’ motion to amend. There was, therefore, no noticed hearing to start
the five-day clock to show cause. Appellees’ only issue is whether the court properly
granted the motion to amend. We hold, however, that during the throes of rule 1.420(e),
when it is time to show cause, rule 1.190(a), authorizing amendment of pleadings, is
inapplicable. In any event, the court misinterpreted the rule. Rule 1.420(e) does not
authorize the dismissal of a complaint; it requires the dismissal of the action. Our only
appropriate action is to reverse and remand with instructions for the court to conduct a
good-cause hearing, and if none can be shown, dismiss the action. Appellees’ remedy
then will be to file a new action for those claims not barred by the statute of limitations.
See Singleton v. Greymar Assocs., 882 So. 2d 1004 (Fla. 2004); U.S. Bank Nat’l Ass’n
v. Bartram, 140 So. 3d 1007 (Fla. 5th DCA 2014).

REVERSED and REMANDED with instructions.
ORFINGER, LAWSON, JJ., and HARRIS, C.M., Senior Judge, concur.

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Some homeowners could get hit with a whopping tax bill if they accept help through Bank of America’s settlement

Some homeowners could get hit with a whopping tax bill if they accept help through Bank of America’s settlement

The never-ending saga…


WAPO-

The $17 billion settlement that Bank of America reached with the Department of Justice on Thursday provides mortgage debt relief for some troubled homeowners. But those that accept the help could get hit with a hefty tax bill later.

As part of the settlement, the bank agreed to spend $7 billion on helping struggling homeowners and communities, including lowering the mortgage balances of certain borrowers who owe more than their homes are worth. The problem is that some of these “underwater” borrowers might have to pay taxes on the debt that’s forgiven.

In 2007, Congress adopted a law that spared homeowners from being taxed on the amount of the loan that was written off. But that tax break expired in December, and now that kind of relief can be counted as income by the IRS, an issue we wrote about in April.

[WASHINGTON POST]

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A.G. Eric Schneiderman Led State & Federal Working Group Announces Record-Breaking $16.65 Billion Settlement With Bank Of America

A.G. Eric Schneiderman Led State & Federal Working Group Announces Record-Breaking $16.65 Billion Settlement With Bank Of America

RMBS Task Force, Co-Chaired By Schneiderman, Secures Settlement That Includes $800 Million For New Yorkers, Including, For The First Time, Relief For Borrowers With FHA-Insured Loans

Settlement Addresses Misconduct That Contributed To The 2008 Financial Crisis

Schneiderman: “Today’s Settlement Is A Major Victory In The Fight To Hold Those Who Caused The Financial Crisis Accountable”

NEW YORK – Attorney General Eric T. Schneiderman today joined members of a state and federal working group he co-chairs to announce a $16.65 billion settlement with Bank of America. The settlement is the largest in U.S. history with a single institution, surpassing the $13 billion settlement with JPMorgan Chase that was secured by the same state and federal working group last November. The settlement includes $800 million – $300 million in cash, and a minimum of $500 million worth of consumer relief – that will be allocated to New York State. As part of today’s settlement, Bank of America acknowledged it made serious misrepresentations to the public – including the investing public – arising out of the packaging, marketing, sale and issuance of residential mortgage-backed securities (RMBS) by Bank of America, as well as by Countrywide Financial and Merrill Lynch, institutions that Bank of America acquired in 2008. The resolution also requires Bank of America to provide relief to underwater homeowners, distressed borrowers, and affected communities through a variety of means, including relief that for the first time will assist certain homeowners with mortgages insured by the Federal Housing Administration (FHA) who were ineligible for relief under previous settlements.

The settlement requires Bank of America to pay $9.65 billion in hard dollars and provide $7 billion in consumer relief. New York State will receive at least $800 million: $300 million in cash and a minimum of $500 million in consumer relief for struggling New Yorkers. The settlement was negotiated through the Residential Mortgage-Backed Securities Working Group, a joint state and federal working group formed in 2012 to share resources and continue investigating wrongdoing in the mortgage-backed securities market prior to the financial crisis. Attorney General Schneiderman co-chairs the RMBS working group.

“Since my first day in office, one of my top priorities has been to pursue accountability for the misconduct that led to the crash of the housing market and the collapse of the American economy,” said Attorney General Schneiderman. “This historic settlement builds upon our work bringing relief to families around the country and across New York who were hurt by the housing crisis, and is exactly what our working group was created to do. The frauds detailed in Bank of America’s statement of facts harmed countless of New York homeowners and investors. Today’s result is a major victory in the fight to hold those who caused the financial crisis accountable.”

The settlement includes an agreed-upon statement of facts that describes how Bank of America, Merrill Lynch and Countrywide made representations to RMBS investors about the quality of the mortgage loans they securitized and sold to investors.  Contrary to those representations, the firms securitized and sold RMBS with underlying mortgage loans that they knew had material defects. Bank of America also made representations to the FHA, an agency within the U.S. Department of Housing and Urban Development, about the quality of FHA-insured loans that Bank of America originated and underwrote. Contrary to those representations, Bank of America originated and underwrote FHA-insured mortgages that were not eligible for FHA insurance. Bank of America and Countrywide also made representations and warranties to Fannie Mae and Freddie Mac about mortgages they originated and sold to those Government Sponsored Entities (GSE’s). Contrary to those representations and warranties, many of those mortgages were defective or otherwise ineligible for sale to GSE’s.

As the statement of facts explains, on a number of occasions, Merrill Lynch employees learned that significant percentages of the mortgage loans reviewed by a third party due diligence firm had material defects. Significant numbers of loans—50% in at least one pool—that were found in due diligence not to have been originated in compliance with applicable laws and regulations, not to be in compliance with applicable underwriting guidelines and lacking sufficient offsetting compensating factors, and loans with files missing one or more key pieces of documentation were nevertheless waived into the purchase pool for securitization and sale to investors. In an internal email that discussed due diligence on one particular pool of loans, a consultant in Merrill Lynch’s due diligence department wrote: “[h]ow much time do you want me to spend looking at these [loans] if [the co-head of Merrill Lynch’s RMBS business] is going to keep them regardless of issues? . . . Makes you wonder why we have due diligence performed other than making sure the loan closed.” A report by one of Merrill Lynch’s due diligence vendors found that from the first quarter of 2006 through the second quarter of 2007, 4,009 loans that were part of loan pool samples reviewed by the vendor were not in compliance with underwriting guidelines or applicable laws and regulations, and were waived in to purchase pools by Merrill Lynch. This conduct, along with similar conduct by other banks that bundled defective and toxic loans into securities and misled investors who purchased those securities, contributed to the financial crisis.

Attorney General Schneiderman was elected in 2010 and took office in 2011, when the five largest mortgage servicing banks, 49 state attorneys general, and the federal government were on the verge of agreeing to a settlement that would have released the banks – including Bank of America – from liability for virtually all misconduct related to the financial crisis. Attorney General Schneiderman refused to agree to such sweeping immunity for the banks. As a result, Attorney General Schneiderman secured a settlement that preserved a wide range of claims for further investigation and prosecution.

In his 2012 State of the Union address, President Obama announced the formation of the RMBS Working Group. The collaboration brought together the Department of Justice (DOJ), other federal entities, and several state law enforcement officials – co-chaired by Attorney General Schneiderman – to investigate those responsible for misconduct contributing to the financial crisis through the pooling and sale of residential mortgage-backed securities. The negotiations for settlement, which were led by Associate Attorney General Tony West of DOJ, were part of the RMBS Working Group.

Under the settlement, Bank of America will be required to provide a minimum of $500 million in creditable consumer relief directly to struggling families and communities across the state. The settlement includes a menu of options for consumer relief to be provided, and different categories of relief are credited at different rates toward the bank’s $500 million obligation. The agreement also requires Bank of America to provide minimum amounts of creditable relief under certain priority categories in New York. The Consumer Relief Credit Menu, available here, details the how each category of relief will be credited and the minimum amounts for each category where applicable.

The most significant priority on the Consumer Relief Credit Menu is a change that will allow first lien principal reductions for certain types of FHA-insured mortgages. Borrowers with these types of loans have previously been excluded from getting the benefits of principal reduction under past settlements, despite the fact that a significant number of distressed loans fall into this category. According to data collected by the Office of the Attorney General, roughly 23% of all distressed loans in New York have FHA insurance, and FHA-insured loans represent the largest portion of Bank of America’s remaining distressed loan portfolio in New York.

Attorney General Schneiderman made it a high priority to extend principal forgiveness to FHA-insured mortgages in negotiations with Bank of America, and their inclusion in this settlement represents a huge step forward in Attorney General Schneiderman’s ongoing commitment to helping families move past the foreclosure crisis.

“Empire Justice Center is very pleased that the settlement with Bank of America provides for principal balance reductions on FHA-insured loans,” said Kirsten Keefe, Senior Attorney at the Empire Justice Center. “This is a critical component that has not been included in prior bank settlements. It has left homeowners with FHA loans at a disadvantage when trying to negotiate with their bank to save their homes. We thank Attorney General Schneiderman for making this a priority in the Bank of America Settlement.”

Bank of America will provide a minimum of $60 million in first lien principal reductions in New York, including the FHA-insured portfolio. Other New York-specific minimum requirements for consumer relief under this settlement include:

  • A minimum value of $20 million in donations, including cash and contributions of vacant and abandoned properties to land banks, units of local government and other nonprofits. Bank of America estimates that this will help address as many as 300 vacant properties—also known as zombie properties—across the state of New York.
  • The bank must also earn at least $35 million in credits for making cash donations to legal service providers, housing counseling agencies, land banks and other community development nonprofits. These relief options are a direct compliment to the investment Attorney General Schneiderman has made to these types of programs over the past three years, including more than $60 million in funding to support a network of housing counseling and legal service provider across the state under the Homeowner Protection Program (HOPP), which has provided free, high-quality services to more than 30,000 homeowners since launching in 2012.
  • Bank of America must also provide $125 million in credits to create and preserve hundreds of units of affordable rental housing across New York State. This initiative is particularly critical in New York, where affordable rental housing is scarce and many families are struggling to find decent and affordable alternatives to homeownership following the economic crisis.

New York City Mayor Bill DeBlasiosaid, “We’re in the midst of an affordability crisis hitting New Yorkers from the very poor to those once solidly middle class. We are deeply grateful to the Attorney General for securing a historic settlement that will make a real difference for families struggling across the city and state. We are pushing hard to build and preserve an unprecedented amount of affordable housing to meet this crisis, and the Attorney General’s continued advocacy is proving vitally important in supporting that effort.”

“We applaud AG Schneiderman’s efforts to hold the too-big-to-fail banks accountable to lower income communities,” said Josh Zinner, Co-Director of New Economy Project. “We are hopeful that this settlement will provide relief to people and communities that have been hardest hit by predatory lending and high rates of foreclosure.”

Compliance with the settlement will be overseen by an independent monitor who will be responsible for ensuring that targets under the settlement are met and that quarterly reporting requirements, which will measure how relief is being allocated at a Census Tract level, are made available to the public.

This matter was led by former Deputy Attorney General for Economic Justice Virginia Chavez Romano, Chief of the Investor Protection Bureau Chad Johnson, Senior Enforcement Counsel for Economic Justice Steven Glassman, and Assistant Attorneys General in the Investor Protection Bureau Hannah Flamenbaum and Melissa Gable.

SOURCE: http://ag.ny.gov

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FONTENO vs WELLS FARGO | CA Appeals Court – Plaintiffs have pled viable causes of action for equitable cancellation of the trustee’s deed…

FONTENO vs WELLS FARGO | CA Appeals Court – Plaintiffs have pled viable causes of action for equitable cancellation of the trustee’s deed…

Filed 8/18/14

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION TWO

LEROY FONTENO, et al,
Plaintiffs and Appellants,

v.

WELLS FARGO BANK, N.A., et al,
Defendants and Respondents.
In June 2011, defendant Wells Fargo, N.A. (Wells Fargo) foreclosed on the residential mortgage loan of plaintiffs Leroy Fonteno and Jeanette Childs and purchased their home at a trustee sale conducted by defendant First American Trustee Servicing Solutions LLC (First American). Plaintiffs sued, alleging, among other things, that defendants violated both their deed of trust’s incorporation of a pre-foreclosure meeting requirement contained in National Housing Act (NHA) regulations and the Federal Debt Collection Practices Act (FDCPA). The trial court sustained defendants’ demurrers and denied plaintiffs’ request for a preliminary injunction, leading to this appeal. Plaintiffs argue numerous errors in these rulings.

We conclude that plaintiffs have pled viable causes of action for the equitable cancellation of the trustee’s deed obtained by Wells Fargo based on their allegation that Wells Fargo did not comply with the NHA requirements incorporated into the deed of trust. Because compliance is a condition precedent to the accrual of Wells Fargo’s contractual authority to foreclose on the property, if, as plaintiffs allege, the sale was conducted without such authority, it is either void or voidable by a court sitting in equity. Whether void or voidable, plaintiffs were not required to allege tender of the delinquent amount owed under the circumstances alleged in this case. Accordingly, the trial court should not have sustained Wells Fargo’s demurrers to plaintiff’s wrongful trustee sale and quiet title causes of action without leave to amend. That part of the trial court’s order is reversed. However, we affirm the remainder of the trial court’s demurrer rulings.

[...]

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Bank Of America Agrees Record $17bn Settlement

Bank Of America Agrees Record $17bn Settlement

AND …Again…No jail time!

 

Sky News-

Bank of America has agreed to a record $17bn (£10.2bn) settlement over its sale of mortgage-backed securities in the lead up to the 2008 financial crisis.

The bank will pay $10bn in cash and provide consumer relief valued at $7bn, officials familiar with the deal told the AP news agency.

The settlement is the largest arising from the economic meltdown during which millions of Americans lost their homes to foreclosure.

It also marks the largest settlement in the history of corporate America.

[SKY NEWS]

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