Racketeering | FORECLOSURE FRAUD | by DinSFLA

Tag Archive | "racketeering"

NY Judge Gives Green Light On RICO Class Action Against Law Firm in ‘Sewer Service’ Case SIKES v. MEL HARRIS & ASSOCIATES

NY Judge Gives Green Light On RICO Class Action Against Law Firm in ‘Sewer Service’ Case SIKES v. MEL HARRIS & ASSOCIATES


UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

MONIQUE SYKES et al.,
Plaintiffs,

– against –

MEL HARRIS AND ASSOCIATES, LLC,
-et al.,
Defendants

APPEARANCES: (See last page)

CHIN, Circuit Judge:

In this case, eight plaintiffs allege that a debt buying
company, a law firm, a process service company, and others
engaged in a “massive scheme to fraudulently obtain default
judgments against them and more than 100,000 other consumers in
state court. Plaintiffs allege that defendants did so by
engaging in “sewer servicer” — the practice of failing to serve a
summons and complaint and then filing a fraudulent affidavit
attesting to service. When the debtors failed to appear in court
because they did not have notice of the lawsuits, defendants
obtained default judgments against them.

Plaintiffs sue on behalf of themselves and all others
similarly situated. Their second amended complaint (the
“Complaint”) asserts claims under the Fair Debt Collection
Practices Act (the “FDCPA”)1,5 U.S.C. 5 1692 et sea., the
Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18
U.S.C. 5 1961 et sea., New York General Business Law (“GBL”) §
349, and New York Judiciary Law 5 487. Plaintiffs seek
injunctive relief, declaratory relief, and damages.
Defendants move to dismiss the Complaint pursuant to
Rules 9 (b) , 12 (b) (1) , and 12 (b) (6) of the Federal Rules of Civil
Procedure, challenging the sufficiency of every claim and the
subject matter jurisdiction of this Court. For the reasons that
follow, the motions to dismiss are denied in part and granted in
part.

Continue below to the decision…

[ipaper docId=46299681 access_key=key-5agcnkn7aipcco9kw1w height=600 width=600 /]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (1)

WaPO: First, the electronic mortgage superhighway. Then, the pileup.

WaPO: First, the electronic mortgage superhighway. Then, the pileup.


Washington Post Staff Writers
Sunday, January 2, 2011

In the early 1990s, the biggest names in the mortgage industry hatched a plan for a new electronic clearinghouse that would transform the home loan business – and unlock billions of dollars of new investments and profits.

At the time, mortgage documents were moved almost exclusively by hand and mail, a throwback to an era in which people kept stock certificates, too. That made it hard for banks to bundle home loans and sell them to investors. By contrast, a central electronic clearinghouse would allow the companies to transfer thousands of mortgages instantaneously, greasing the wheels of a system in which loans could be bought and sold repeatedly and quickly.

“Assignments are creatures of 17th-century real property law; they do not coexist easily with high-volume, late 20th-century secondary mortgage market transactions,” Phyllis K. Slesinger, then senior director of investor relations for the Mortgage Bankers Association, wrote in paper explaining the system.

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (0)

Bank of America, Countrywide Accused of Racketeering

Bank of America, Countrywide Accused of Racketeering


October 19, 2010, 7:58 PM EDT

By Andrew M. Harris

(Updates with lender’s spokesman in seventh paragraph.)

Oct. 19 (Bloomberg) — Bank of America Corp. and its Countrywide Home Loans unit were sued by two Indiana residents claiming that perjured affidavits were used to foreclose on their Knightstown home.

Plaintiffs Dwayne Ransom Davis and Melisa Davis accused the lender and its unit of racketeering in a complaint filed today in federal court in Indianapolis. Their lawyer, Irwin Levin, confirmed the filing in a phone interview. The filing couldn’t be independently verified.

The defendants and their cohorts engaged in a pattern of racketeering activity in which they routinely and repeatedly prepared perjured affidavits in order to rapidly churn foreclosures,” the couple said in the complaint.

Bank of America, the largest U.S. lender, resumed foreclosures yesterday, after a 10-day nationwide pause to review more than 100,000 cases.

Continue reading…BUSINESS WEEK

.

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (1)

NO. THERE’S NO LIFE AT MERS

NO. THERE’S NO LIFE AT MERS


NO. THERE’S NO LIFE AT MERS

By DinSFLA

Mortgage Electronic Registration Systems, Inc (MERS) has a very long history. The beginning stages have remained a mystery until now.

In 1989, Brian Hershkowitz developed the “Whole Loan Book Entry” concept while serving as a director for the Mortgage Bankers Association (MBA). In 1990, he first introduced this concept to seven different industry groups; Document Custodian, Originators, Servicers, Title Insurers, County Recorders, Government Sponsored Enterprises (GSE’s) and Warehouse/Interim Lenders. The reception was very positive and it was viewed as a very useful recording system to be used for how equity and debt securities could be identified and managed.

In 1991, Mr. Hershkowtiz published Farming It Out in Mortgage Banking Magazine. His main discussion in this article is primarily about getting the opinion of the experts in the technology outsourcing service industry. In 1992, Mr. Hershkowitz published another article called Cutting Edge Solutions in Mortgage Banking Magazine. In this particular article he mentions the actual meeting that took place at the Mortgage Bankers Association of America (MBA) headquarters with many key players that are known today as some of MERSCORP’s shareholders, such as, Fannie Mae and Freddie Mac. In this meeting they discussed a “System” that will bring changes in mortgage records.

Mr. Hershkowitz went on to become President and COO of LandSafe Credit, a leading settlement service provider that was a subsidiary of Countrywide. Mr. Hershkowitz also spent several years serving Countrywide in the areas of strategic planning and executive management.

In 2001, Mr. Hershkowitz became Executive Vice President at Fidelity National Information Services (FNIS) and President of its mortgage and information services division. His responsibilities included management of the Company’s data offerings, including public records information, credit reporting information, flood hazard compliance data, real estate tax information and collateral valuation services. He left FNIS in November of 2006 to become Chief Executive Officer of Maximum Value Group, a consulting firm focused on providing advice to private equity and other market participants in the area of banking and mortgages.

ENTER THE X-FILES

MERS has evolved into a totally different purpose today.

Mortgage Electronic Registration Systems, Inc. is a wholly owned subsidiary of MERSCORP Inc., located at 1595 Spring Hill Rd Ste 310 Vienna, VA 22182.

MERS was founded by the mortgage industry. MERS tracks “changes” in the ownership of the beneficial and servicing interests of mortgage loans as they are bought and sold among MERS members or others. Simultaneously, MERS acts as the “mortgagee” of record in a “nominee” capacity (a form of agency) for the beneficial owners of these loans.

To ensure widespread acceptance within the industry, MERS sought to have security instruments modified to contain MERS as the original mortgagee (MOM) language. MERS began to change decades of business practices after the two biggest mortgage funders in the U.S. the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Ferderal National Mortgage Association (Fannie Mae) modified their Uniform Security Instruments to include MOM language. Their approval opened the doors to incorporate MERS into loans at origination.

Soon after, U.S. government agencies like the Veterans Administration, Federal Housing administration and Government National Mortgage Association (Ginne Mae), and several state housing agencies followed both Fannie/Freddie to approve MERS.

More than 60 percent of all newly-originated mortgages are registered in MERS. Its mission is to register every mortgage loan in the United States on the MERS System. Since 1997, more than 65 million home mortgages have been assigned a Mortgage Identification Number (MIN) and have been registered on the MERS System.

The mortgage-backed security (MBS) sector tested the viability of MERS because a substantial number of mortgages are securitized in the secondary market. In February 1999, Lehman Brothers was the first company to include MERS registered loans in a MBS.

Moody’s Investor Service issued an independent Structured Finance special report  on MERS and it’s impact of MBS transactions and found that where the securitzer used MERS, new assignments of mortgages to the trustee of MBS transactions were not necessary.

Since MERS is a privately owned data system and not public, all mortgages and assignments must be recorded in order to perfect a lien. Since they failed to record assignments when these loans often traded ownership several times before any assignment was created, the legal issue is apparent. MERS may have destroyed the public land records by breaking the chain of title to millions of homes.

IN MERS CEO’S OWN WORDS

In or around the summer of 1997, MERSCORP President and CEO R.K. Arnold wrote, “Yes, There is life on MERS” Mr. Arnold stated, “Some county recorders have expressed concerns that MERS will eliminate their offices nationwide or destroy the public land records by breaking the chain of title. As implemented, MERS will not create a break in the chain of title, and, because MERS is premised on an assignment recorded in the public land records, MERS cannot work without county recorders.”

In this same article Mr. Arnold also states “The sheer volume of transfers between servicing companies and the resulting need to record assignments caused a heavy drag on the secondary market. Loan servicing can trade several times before even the first assignment in a chain is recorded, leaving the public land records clogged with unnecessary assignments. Sometimes these assignments are recorded in the wrong sequence, clouding title to the property”. Mr. Arnold never mentions the fact that the mortgage notes have been securitized, thereby becoming “negotiable securities” under the Uniform Commercial Code.

In an interview for The New York Times, Mr. Arnold said, “that his company had benefited not only banks, but also millions of borrowers who could not have obtained loans without the money-saving efficiencies MERS brought to the mortgage trade.”

Mr. Arnold went on to say that, ” far from posing a hurdle for homeowners, MERS had helped reduce mortgage fraud and imposed order on a sprawling industry where, in the past, lenders might have gone out of business and left no contact information for borrowers seeking assistance.”

“We’re not this big bad animal,” Mr. Arnold said. “This crisis that we’ve had in the mortgage business would have been a lot worse without MERS.”

Unfortunately, even a simple search in the Florida Land Records proves the opposite to be the case. Researchers have  easily found affidavits of lost assignments actually stating, “the said mortgage was assigned to Mortgage Electronic Registration Systems, Inc., from “XXXXXXX”, the original of the said assignment to Mortgage Electronic Registration Systems, Inc., was lost, misplaced or destroyed before same could be placed of record with the Florida Land Records County Clerk’s office; That, “XXXXXXX”, it’s successors and/or assignee is no longer in business/or do not respond to our request for a duplicate assignment, and therefore, a duplicate original of said assignment cannot be obtained.”

According to affidavits such as these, not only have the borrowers lost contact with the lenders, but the same is true that MERS did as well.

On September 25, 2009, Mr. R.K. Arnold was deposed in Alabama. Mr. Arnold admitted MERS does not have a beneficial interest in any loan, does not loan money and does not suffer a default if monies are not paid. On November 11, 2009, William C. Hultman was deposed in Alabama and made the same admissions.

Yet again, researchers have easily located affidavits recorded in the Florida Land Records stating “That said Deed of Trust has not been assigned to any other party and that MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, Inc. is the current holder and owner of the Note and Deed of Trust in question.”

NO. THERE’S NO LIFE AT MERS

Aside from not recording assignments, Mr. Arnold failed to mention that the certifying officers given authority to execute sensitive loan documents would not be paid employees of MERS. This raises the critical legal question as to how one can act as a certified officer and execute any equitable interest on behalf of any security instruments without being an employee of MERS.

On April 7, 2010, in the Superior Court of New Jersey, MERS Treasurer and Secretary William C. Hultman gave an oral sworn video/telephone deposition in the case of Bank Of New York v. Ukpe.:

Q Do the assistant secretaries — first off, are
you a salaried employee of MERS?
A No.

Q Are you a salaried employee of MERS Corp,
Inc.?
A Yes.

Q Are any of the employees of MERS, Inc.
salaried employees?
A I don’t understand your question.

Q Does anyone get a paycheck, if they are an
employee of MERS, Inc., do they get a paycheck from
Mercer, Inc.?
A There is no MERS, Inc.

Q I thought, sir, there’s a company that was
formed January 1, 1999, Mortgage Electronic Registration
Systems, Inc. Does it have paid employees?
A No, it does not.

Q Does it have employees?
A No.

Q Does MERS have any employees?
A Did they ever have any? I couldn’t hear you.

Q Does MERS have any employees currently?
A No.

Q In the last five years has MERS had any
employees?
A No.

<SNIP>

Q How many assistant secretaries have you
appointed pursuant to the April 9, 1998 resolution; how
many assistant secretaries of MERS have you appointed?
A I don’t know that number.

Q Approximately?
A I wouldn’t even begin to be able to tell you
right now.

Q Is it in the thousands?
A Yes.

Q Have you been doing this all around the
country in every state in the country?
A Yes.

Q And all these officers I understand are unpaid
officers of MERS?
A Yes.

Q And there’s no live person who is an employee
of MERS that they report to, is that correct, who is an employee?
A There are no employees of MERS.

If so, how does anyone have any authority to sign security instruments encumbered by any loan documents, if these certifying officers are not paid employees and never attend corporate meetings in the capacity as Vice President, Assistant Secretary, etc. with Mortgage Electronic Registration System, Inc..

COURTS FIND ISSUES WITH MERS

Federal and state judges across America are realizing that the mortgage industry’s nominee is backfiring.

In Mr. Arnold’s own words, “For these servicing companies to perform their duties satisfactorily, the note and mortgage were bifurcated. The investor or its designee held the note and named the servicing company as mortgagee, a structure that became standard.” What has become a satisfactory standard structure for the mortgage industry has not been found by many courts to be legally sufficient to foreclose upon the property.

Again, MERS only acts as nominee for the mortgagee of record for any mortgage loan registered on the computer system MERS maintains, called the MERS System. MERS cannot negotiate a security instrument. Therefore, MERS certifying officers cannot have legal standing to assign what MERS does not own or hold.

The Supreme Court of New York Nassau County:
Bank of New York Mellon V. Juan Mojica Index No: 26203/09

Justice Thomas A. Adams stated, “Not only has plaintiff failed to establish MERS’ right as a nominee for purposes of recording to assign the mortgage, more importantly, no effort has been made to establish the authority of MERS, a non-party to the note, to transfer its ownership.”

The Supreme Court of Maine:
Mortgage Electronic Registration Systems, Inc. v. Saunders, No. 09-640, 2010 WL 3168374,
(Me. August 12, 2010) The Court explains that the only rights conveyed to MERS in either the Saunders’ mortgage or the corresponding promissory note are bare legal title to the property for the sole purpose of recording the mortgage and the corresponding right to record the mortgage with the Registry of Deeds. This comports with the limited role of a nominee. A nominee is a “person designated to act in place of another, usu[ally] in a very limited way,” or a “party who holds bare legal title for the benefit of others or who receives and distributes funds for the benefit of others.” Black’s Law Dictionary 1149 (9th ed. 2009).

In Hawkins, No. BK-S-07-13593-LBR, 2009 WL 901766
The Court found that the deed of trust “attempts to name MERS as both beneficiary and a nominee” but held that MERS was not the beneficiary, as it had “no rights whatsoever to any payments, to any servicing rights, or to any of the properties secured by the loans.”

In Re: Walker, Case No. 10-21656-E-11 Eastern District of CA Bankruptcy court rules MERS has NO actionable interest in title. “Any attempt to transfer the beneficial interest of a trust deed without ownership of the underlying note is void under California law.” “MERS could not, as a matter of law, have transferred the note to Citibank from the original lender, Bayrock Mortgage Corp.” The Court’s ruled that MERS and Citibank are not the real parties in interest.

In re Vargas, 396 B.R. at 517-19. Judge Bufford found that the witness called to testify as to debt and default was incompetent. All the witness could testify was that he had looked at the MERS computerized records. The witness was unable to satisfy the requirements of the Federal Rules of Evidence, particularly Rule 803, as applied to computerized records in the Ninth Circuit. See id. at 517-20. “The low level employee could really only testify that the MERS screen shot he reviewed reflected a default. That really is not much in the way of evidence, and not nearly enough to get around the hearsay rule.”

FRAUD ON THE COURT

In US Bank v. Harpster the Law Offices Of David J. Stern committed fraud on the court by the evidence based on the Assignment of Mortgage that was created and notarized on December 5, 2007. However, that purported creation/notarization date was facially impossible: the stamp on the notary was dated May 19, 2012. Since Notary commissions only last four years in Florida (see F .S. Section 117.01 (l)), the notary stamp used on this instrument did not even exist until approximately five months after the purported date on the Assignment.

The Court specifically finds that the purported Assignment did not exist at the time of filing of this action; that the purported Assignment was subsequently created and the execution date and notarial date were fraudulently backdated, in a purposeful, intentional effort to mislead the Defendant and this Court. The Court rejects the Assignment and finds that is not entitled to introduction in evidence for any purpose. The Court finds that the Plaintiff does not have standing to bring its action.

The Court dismissed this case with prejudice.

In Duval County, Florida another foreclosure case was dismissed with prejudice for fraud on the court. In JPMorgan V. Pocopanni, the Court found that Fishman & Shapiro representing JPMorgan had actual knowledge at all times that the Complaint, the Assignment, and the Motion for Substitution were all false. The Court found that by clear and convincing evidence WAMU, Chase and Shapiro & Fishman committed fraud on this court.

Both these cases involved Mortgage Electronic Registration Systems Inc. assignments.

FRAUD INVESTIGATIONS

Two RICO Class Action lawsuits have commenced against Foreclosure Law Firms and MERSCORP for fabricating and forging documents that are entered into courts as evidence in order to have standing to foreclose. Unknown to judges and the borrowers, they accept these documents because they are executed under perjury of the law. These “tromp l’oeil” actions have finally surfaced and the courts has taking notice.

The lack of supervision and managing of MERS “Robo-Signers” has led to a national frenzy of fabrication, forgery and certifying officers wearing multiple corporate hats. Anyone who compares signatures of these certifying officers will see a major problem with forgery in hundreds of thousands affidavits and assignments which creates an enormous dark cloud of title defects to millions of homes across the US.

On August 10, 2010 Florida attorney general Bill McCollum announced that he is investigating three foreclosure law firms for allegedly providing fraudulent assignments and affidavits relating in foreclosure cases.

In a deposition taken in December 2009, GMAC employee Jeffrey Stephan said he signed 10,000 affidavits or similar documents a month without personally verifying who the mortgage holder was. That means many foreclosures could have taken place based on false documentation and many homes may have been unlawfully foreclosed on.

On September 20, 2010, GMAC halted foreclosures in 23 different states. Two of the three firms being investigated by the Florida attorney general, the Law Office of Marshall C. Watson and the Law Offices of David J. Stern PA, have represented GMAC in foreclosure proceedings.

This is not limited to only GMAC Mortgage. There are many hundreds of thousands of these same documents that are being created by many foreclosure law firms across the nation.

University of Utah law professor Christopher L. Peterson has raised the issue that MERS should be regarded as a debt collector. He argues that some of MERS’ methods are just the sort of deceptive practices that ought to be regulated under The Fair Debt Collection Practices Act (FDCPA), 15 U. S. C. §1692(a),(j).

CONCLUSION

Finally in May, 2009, Mr. Arnold said in Mortgage Technology Magazine, “Every system in the mortgage industry can switch MERS registry on or off at will,” referencing that both the Obama administration and Congressional leaders are aware of this.

President Obama and Congressional leaders it is time to permanently switch MERS lifeless device off!

Not until MERS became the primary focus for challenges to legal standing in foreclosure courts as reported by the alternative media, have the main stream media and the mortgage industry have begun to realize that property records cross the United States have become totally unreliable.

It has taken more than a decade for the courts to recognize that MERS has become a mortgage backfire system leaving clouded titles in over 65 million loans since 1997.

Courts across the nation must comply with the law.  Any documents submitted to the courts regarding property ownership should be assumed to be nothing but smoke in a mirror.

No, Mr. Arnold, there’s no life at MERS.


DinSFLA, “nominee” of stopforeclosurefraud.com, a blog on Foreclosure Fraud.

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

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in featured, STOP FORECLOSURE FRAUDComments (33)

AMENDED |NEW YORK FORECLOSURE CLASS ACTION AGAINST STEVEN J. BAUM & MERSCORP

AMENDED |NEW YORK FORECLOSURE CLASS ACTION AGAINST STEVEN J. BAUM & MERSCORP


Class Action Attorney Susan Chana Lask targets Foreclosure Mill Attorneys as source of foreclosure crisis.

This is the amended complaint against Foreclosure Mill Steven J. Baum and MERSCORP.

Want to join the Class? No problem!

Please contact: SUSAN CHANA LASK, ESQ.

[ipaper docId=37881265 access_key=key-2hj0jnnmfxmm0i37q7l0 height=600 width=600 /]

Related posts:

CLASS ACTION | Connie Campbell v. Steven Baum, MERSCORP, Inc

_________________________

CLASS ACTION AMENDED against MERSCORP to include Shareholders, DJSP

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in assignment of mortgage, concealment, conflict of interest, conspiracy, CONTROL FRAUD, corruption, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, forgery, Law Office Of Steven J. Baum, Law Offices Of David J. Stern P.A., MERS, MERSCORP, mortgage, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., notary fraud, note, racketeering, RICO, Steven J Baum, STOP FORECLOSURE FRAUD, stopforeclosurefraud.com, Susan Chana Lask, Trusts, truth in lending act, Wall StreetComments (2)

CLASS ACTION AMENDED against MERSCORP to include Shareholders, DJSP

CLASS ACTION AMENDED against MERSCORP to include Shareholders, DJSP


Kenneth Eric Trent, P.A. of Broward County has amended the Class Action complaint Figueroa v. MERSCORP, Inc. et al filed on July 26, 2010 in the Southern District of Florida.

Included in the amended complaint is MERS shareholders HSBC, JPMorgan Chase & Co., Wells Fargo & Company, AIG, Fannie Mae, Freddie Mac, WAMU, Countrywide, GMAC, Guaranty Bank, Merrill Lynch, Mortgage Bankers Association (MBA), Norwest, Bank of America, Everhome, American Land Title, First American Title, Corinthian Mtg, MGIC Investor Svc, Nationwide Advantage, Stewart Title,  CRE Finance Council f/k/a Commercial Mortgage Securities Association, Suntrust Mortgage,  CCO Mortgage Corporation, PMI Mortgage Insurance Company, Wells Fargo and also DJS Processing which is owned by David J. Stern.

MERSCORP shareholders…HERE

[ipaper docId=36456183 access_key=key-26csq0mmgo6l8zsnw0is height=600 width=600 /]

Related article:

______________________

CLASS ACTION FILED| Figueroa v. Law Offices Of David J. Stern, P.A. and MERSCORP, Inc.

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in bank of america, chain in title, citimortgage, class action, concealment, CONTROL FRAUD, corruption, countrywide, djsp enterprises, fannie mae, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, forgery, Freddie Mac, HSBC, investigation, jpmorgan chase, Law Offices Of David J. Stern P.A., lawsuit, mail fraud, mbs, Merrill Lynch, MERS, MERSCORP, mortgage, Mortgage Bankers Association, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., Mortgage Foreclosure Fraud, non disclosure, notary fraud, note, racketeering, Real Estate, RICO, rmbs, securitization, stock, title company, trade secrets, trustee, Trusts, truth in lending act, wamu, washington mutual, wells fargoComments (13)

CLASS ACTION FILED| Figueroa v. Law Offices Of David J. Stern, P.A. and MERSCORP, Inc.

CLASS ACTION FILED| Figueroa v. Law Offices Of David J. Stern, P.A. and MERSCORP, Inc.


KABOOM!!! This will send out shock waves.

After last week’s lawsuit filed on behalf of investors for possible securities fraud violations against DJSP Enterprises and another pending. I present to you another Class Action filed 7/26/2010 this time against the Law Offices of David J. Stern P.A., David J. Stern and MERSCORP, Inc..

Mr. Trent totally “gets it” and in this complaint he outlines and points out what we all have a hard time piecing together.

Here are excerpts of the complaint:

Beginning in or about 1999, the Defendant Firm joined with Defendant Merscorp, Inc., and other conspirators in the fraudulent scheme and RICO enterprise herein complained of. The employees of the Defendant Firm, including many licensed attorneys, have become skilled in using the artifice of MERS to sabotage the judicial process to the detriment of borrowers, and, over the past several years, have routinely relied upon MERS to do just that.

As Stern boasted to a room of investors at a recent promotional event, recent “direct source initiatives” by the larger lenders increasingly enable the Defendant Firm, DJSP, and other entities recently formed by Stern to take mortgages “from cradle to the grave.”

The whole purpose of MERS is to allow “servicers” to pretend as if they are someone else: the “owners” of the mortgage, or the real parties in interest. In fact they are not. The standard MERS/Stern complaint contains a lie about this very subject. While the title of the standard complaint makes reference to “lost loan documents,” in the body of the standard complaint, the Defendant Firm alleges that the plaintiff is the “owner and holder” of the note and mortgage. Both cannot be true unless the words used are given new meanings.

With the oversight of Defendant Merscorp and its unknown principals, the MERS artifice and enterprise evolved into an “ultra-fictitious” entity, which can also be understood as a “meta-corporation.” To perpetuate the scheme, MERS was and is used in a way so that to the average consumer, or even legal professional, can never determine who or what was or is ultimately receiving the benefits of any mortgage payments. The conspirators set about to confuse everyone as to who owned what. They created a truly effective smokescreen which has left the public and most of the judiciary operating “in the dark” through the present time.

The preparation, filing, and prosecution of the complaints to “Foreclose Mortgage and to Enforce Lost Loan Documents” were each predicate acts in the pattern of racketeering activity herein complained of, and were actions taken in furtherance of the MERS enterprise. The actions could not have been brought by the Defendant Firm without the MERS artifice and the ability to generate any necessary “assignment” which flowed from it.

By engaging in a pattern of racketeering activity, specifically “mail or wire fraud,” the Defendants subject to this Count participated in a criminal enterprise affecting interstate commerce. In addition to the altered postmarks described below, the mail fraud is the sending of the fraudulent assignments and pleadings to the clerks of court, judges, attorneys, and defendants in foreclosure cases. These Defendants intentionally participated in a scheme to defraud others, including the Plaintiff and the other Class Members, and utilized the U.S. Mail to do so.

These documents were executed by an “Assistant Secretary” or “Vice President,” apparently of MERS. In reality, the person executing the assignments had no knowledge whatsoever of the truth of their contents, and was simply an employee of the Defendant Firm.

Altering common hardware and/or software used by the Defendant Firm so that envelopes used to mail important legal documents, such as final judgments, to defendants contain no date of mailing in the postmark and intentionally delaying in sending the mail until defendants have lost their rights. (Exhibit F). These predicate acts constitute “mail fraud.”

Here is an explanation from David J. Stern of the continuing foreclosure rout:

One of my favorite questions from one of my believers, one of my investors on the first call-in, “What inning are we in? If this was a baseball game, what inning are we in?” And my response is, we’re only in the 2nd inning. We still have 3 innings of foreclosures left, and after the foreclosures, we have 3 innings of REO liquidation and as the REO liquidations pan out, we get into the re-fi and we get into the origination.
[ . . . ]
So yeah, we’re in the 2nd inning, but guess what – when we get to the 9th inning, it’s going to be a doubleheader and we got a second game coming. So when people say, “Oh my God, the economy is bad!” I’m like, “Oh my God, it’s great.” I mean, I hate to hear people are losing their homes and credit isn’t available and credit is such that they can’t re-fi, but if you are in our niche, it’s what we do and it’s what we want to see.

[ipaper docId=34959419 access_key=key-zii1wo2j5d6enxmd05b height=600 width=600 /]

Thank you attorney Kenneth Eric Trent P.A. from Ft. Lauderdale , FL !

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in class action, concealment, conspiracy, CONTROL FRAUD, corruption, djsp enterprises, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, forgery, Law Offices Of David J. Stern P.A., lawsuit, MERS, MERSCORP, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., notary fraud, racketeering, RICO, STOP FORECLOSURE FRAUDComments (35)

EXPLOSIVE CONSIDERATIONS, “RACKETEERING”!! IN RE Mortgage Electronic Registration Systems (MERS) Litigation. No. 09-2119-JAT. United States District Court, D. Arizona.

EXPLOSIVE CONSIDERATIONS, “RACKETEERING”!! IN RE Mortgage Electronic Registration Systems (MERS) Litigation. No. 09-2119-JAT. United States District Court, D. Arizona.


IN RE Mortgage Electronic Registration Systems (MERS) Litigation.

No. 09-2119-JAT.

United States District Court, D. Arizona.

June 4, 2010.

ORDER

JAMES A. TEILBORG, District Judge.

In the transfer order establishing this consolidated multidistrict litigation (“MDL”), the Judicial Panel on Multidistrict Litigation (“Panel”) stated, “IT IS FURTHER ORDERED that claims unrelated to the formation and/or operation of the MERS system are simultaneously remanded to their respective transferor courts.” (Doc. #1.) The parties contest which claims in each of the various cases relate to the formation and/or operation of MERS.[1] This Order addresses the thirteen cases[2] listed below that were transferred by the MDL Conditional Transfer Order (CTO-2) and Simultaneous Separation and Remand of Certain Claims (Doc. #107):

First Plaintiff's Name   Arizona Case Number   Original Jurisdiction Case Number

Huck[3]               CV 10-401-PHX-JAT     3:09-553 (Nevada)
Gillespie                CV 10-413-PHX-JAT     3:09-556 (Nevada)
Duncan                   CV 10-414-PHX-JAT     3:09-632 (Nevada)
Sieben                   CV 10-416-PHX-JAT     3:09-642 (Nevada)
Huck                     CV 10-417-PHX-JAT     3:09-643 (Nevada)
Vo                       CV 10-425-PHX-JAT     3:09-654 (Nevada)
Eastwood                 CV 10-426-PHX-JAT     3:09-656 (Nevada)
Ellifritz                CV 10-427-PHX-JAT     3:09-663 (Nevada)
McConathy                CV 10-428-PHX-JAT     3:09-665 (Nevada)
Smith                    CV 10-429-PHX-JAT     3:09-666 (Nevada)
Sage                     CV 10-456-PHX-JAT     3:09-689 (Nevada)
Mason                    CV 10-457-PHX-JAT     3:09-734 (Nevada)
Freeto                   CV 10-459-PHX-JAT     3:09-754 (Nevada)
Fitzgerald               CV 10-460-PHX-JAT     3:10-1 (Nevada)
Dominguez                CV 10-461-PHX-JAT     3:10-16 (Nevada)

I. General Interpretation of the Transfer Order

In the initial transfer order, the Panel transferred to this Court all allegations within these actions that “the various participants in MERS formed a conspiracy to commit fraud and/or that security instruments are unenforceable or foreclosures are inappropriate due to MERS’s presence as a party” or that otherwise concern the “formation and operation” of MERS. (Doc. #1.) However, the Panel simultaneously remanded unrelated claims to their transferor courts, finding that “plaintiffs’ claims relating to loan origination and collection practices do not share sufficient questions of fact with claims regarding the formation and operation” of MERS and their inclusion “would needlessly entangle the litigation in unrelated, fact-intensive issues.” Id.

Accordingly, this Court will not retain claims that, although naming MERS as a defendant, allege conduct primarily related to loan origination and collection practices, or otherwise stray from the common factual core of the MDL. Only causes of action that in essence turn on the formation or operation of MERS, no matter how framed, have been transferred to the undersigned.

Defendants Mortgage Electronic Registration Systems, Inc. and MERSCORP, Inc. (collectively, “Moving Defendants”) filed a Motion to Remand Claims. (Doc. #364.) Four responses were filed. Defendant OneWest Bank (“OneWest”) disagrees with Moving Defendants on six claims in one case. (Doc. #420.) Defendants Countrywide Home Loans, Inc., Countrywide Financial Corp., Countrywide Bank, F.S.B., Bank of America Corporation, N.A., ReconTrust Company, N.A., First Horizon Home Loans Corporation, and Wells Fargo Bank (collectively, “Responding Defendants”) disagree as to six types of claims in seven cases. (Doc. #428.) Two other responses were filed that do not dispute the Moving Defendants’ analysis. (Doc. ##415, 416.) MERS replied. (Doc. #433.)

II. Claims on Which the Parties Do Not Agree

Within these “tag-along” actions there are several types of claims over which the parties disagree. Where the parties agree as to the proper determination of a claim, the Court adopts the parties’ determination unless otherwise noted.

A. Fraud in the Inducement

The parties disagree about the status of claims for fraud in the inducement in Duncan (Fourteenth Claim), Sieben (Fourteenth Claim), Huck (Fourteenth Claim), and Ellifritz (Fourteenth Claim). Moving Defendants argue that all of these claims have been transferred to the MDL. Responding Defendants argue that the claims in Duncan, Sieben, and Huck have been split with part of each claim transferred to the MDL and part of each claim remanded to the respective transferor court. OneWest argues that the claim in Ellifritz has been remanded in its entirety.

Each of these claims contains the allegation that defendants “failed to disclose the material terms of the loans” and other allegations relating to the loan origination process.[4] But these claims also allege that defendants failed to disclose that they “had no lawful right to foreclose upon” the properties and that “[the plaintiffs’] obligations on the notes had been discharged.” These allegations relate to the operation of MERS.[5]

While either the MERS-related misrepresentations or the non-MERS-related misrepresentations could each be logically sufficient to establish liability, it may be that only all of the misrepresentations together were sufficient to induce the plaintiffs to enter the contract. Thus, these claims cannot be split and—as at least some of the allegations relate to the operation and formation of MERS—these claims have been transferred in their entirety to the MDL.

B. Fraud Through Omission

The Parties disagree about the status of claims for fraud through omission in Duncan (Sixth Claim), Sieben (Sixth Claim), Huck (Sixth Claim), and Ellifritz (Sixth Claim). Moving Defendants argue that these claims have been transferred to the MDL, while Responding Defendants and OneWest argue that these claims have been split with part of each claim transferred to the MDL and part of each claim remanded to the respective transferor court.

Each of these claims contains the allegation that defendants failed to disclose their “predatory, unethical and unsound lending and foreclosure practices” and the “predatory… practices of other major lenders, of which Defendants were aware per the MERS system.”[6] Thus, these claims involve both MERS-related omissions and non-MERS-related omissions which could serve as the basis for a finding of fraud. However, just as with the fraud in the inducement claims above, the fraud through omission claims cannot be severed. Therefore, these claims have been transferred in their entirety to the MDL.

C. Racketeering

Plaintiffs assert claims for racketeering activity under Nevada law in Duncan (Eleventh Claim), Sieben (Eleventh Claim), and Huck (Eleventh Claim). These claims allege vaguely that defendants have “engaged in racketeering” via the “predatory and abusive lending practices described herein.”[7] Responding Defendants argue that because these alleged underlying lending practices have been bifurcated, with some retained and some remanded, this racketeering claim must also have been split. Moving Defendants argue that because these claims are unclear as to which practices actually constitute the racketeering claim, they have been transferred to the MDL in its entirety.

The Court finds that these claims incorporate each and every other claim in their respective complaints. Thus, it would be feasible for either a pair of non-MERS-related violations to support a racketeering claim or a pair of MERS-related violations to support a racketeering claim. Therefore, these racketeering claims should be considered by both this Court and the transferor court. Accordingly, these claims have been bifurcated.[8]

D. Civil Conspiracy

Plaintiffs assert claims for civil conspiracy in, Duncan (Tenth Claim), Sieben (Tenth Claim), and Huck (Tenth Claim). These claims allege vaguely that defendants have “entered into a conspiracy with other members of MERS” in which they “failed to inform Nevada mortgagors of their rights,” continue to illegally “eject Nevadans” from their homes, and commit the violations alleged in the other claims of the complaint.[9] Responding Defendants argue that because these alleged underlying violations include claims that have been retained and claims that have been remanded, this conspiracy claim must also have been split. Moving Defendants argue that all of the allegations are fused with the alleged MERS conspiracy and have thus been transferred to the MDL.

The Court finds that these claims are cumulative of all other claims in their respective complaints. Thus, it would be feasible for either a pair of non-MERS-related violations to support a conspiracy claim or a pair of MERS-related violations to support a conspiracy claim. Therefore, these civil conspiracy claims should be considered by both this Court and the transferor court. Accordingly, these claims have been bifurcated.[10]

E. Contractual Breach of Duty of Good Faith and Fair Dealing and Tortious Breach of the Implied Duty of Good Faith and Fair Dealing

The parties disagree on these two types of claims in Duncan (Eighth and Ninth Claims), Sieben (Eighth and Ninth Claims), Huck (Eighth and Ninth Claims), and Ellifritz (Eighth and Ninth Claims). Moving Defendants argue that these claims have been transferred in full, Responding Defendants argue that these claims in Duncan, Sieben, and Huck have been severed with part transferred and part remanded, and OneWest argues that these claims in Ellifritz have been remanded in full.

Plaintiffs allege that defendants’ participation in MERS created a duty of good faith and fair dealing which was breached in the loan origination process.[11] Thus, even though these claims involve loan origination, they raise questions of fact sufficiently related to operation of MERS. Thus, these claims have been transferred in their entirety to the MDL.

F. Wrongful Foreclosure

Plaintiffs assert a claim for wrongful foreclosure in Ellifritz (Fifth Claim). Moving Defendants argue that the claim has been retained, while OneWest argues that this claim has been split. Specifically, OneWest argues that “Plaintiffs’ allegation that their obligations have been discharged because investors of mortgage-backed securities received federal bailout funds” deals with “collection of payments on the mortgage loan, and whether Plaintiffs’ payment obligation has been discharged” and has been remanded. (Doc. #420 at 5-6.) Moving Defendants contend that because “the federal-bailout allegation concerns the role of [MERS], the `wrongful foreclosure’ claim was transferred to this Court in its entirety.” (Doc. #433 at 6.)

The Panel’s transfer order made clear that the actions transferred to this Court “possess a common factual core regarding allegations that… security instruments are unenforceable or foreclosures are inappropriate due to MERS’s presence as a party.” (Doc. #1 at 2.) Here the allegation is that defendants’ “foreclosures are inappropriate” due to the workings of the federal bailout. This allegation appears to share sufficient questions of fact with claims regarding the formation and operation of MERS that it is properly part of the MDL. Accordingly, the entirety of this claim for wrongful foreclosure has been retained.

G. Conspiracy to Commit Fraud and Conversion

Plaintiffs assert a claim for “conspiracy to commit fraud and conversion” in Ellifritz (Second Claim). Moving Defendants argue that this claim has been transferred to the MDL and OneWest argues that this claim has been remanded. The claim alleges that defendants conspired to defraud plaintiffs “by participating in [MERS]… which was the forming of an association to conspire to deprive Plaintiff(s) of their property through fraud and misrepresentation…”[12] This allegation relates to the formation and operation of MERS and, thus, the Court finds that this claim has been transferred.

Accordingly,

IT IS ORDERED that the Motion to Remand Certain Claims (Doc. #364) is GRANTED IN PART and DENIED IN PART.

IT IS FURTHER ORDERED that with respect to Huck (CV 10-401-PHX-JAT), Gillespie (CV 10-413-PHX-JAT), CV 10-415-PHX-JAT (Caffee), and CV 10-455-PHX-JAT (Barlow) the motion is denied without prejudice. Moving Defendants shall have ten days after the Court rules on the motions for leave to amend to file a motion to remand all claims that it asserts the panel remanded to the respective transferor courts in the transfer orders; Plaintiffs and the non-moving Defendants shall respond to this motion to remand within ten days and in the responses shall specify what claims they agree were remanded, what additional claims, if any, have been remanded, and what claims, if any, they assert were not remanded; Moving Defendants shall reply (in a consolidated reply) within ten days.

IT IS FURTHER ORDERED that with respect to Duncan (CV 10-414-PHX-JAT), Sieben (CV 10-416-PHX-JAT), Huck (CV 10-417-PHX-JAT), Vo (CV 10-425-PHX-JAT), Ellifritz (CV 10-427-PHX-JAT), McConathy (CV 10-428-PHX-JAT), Smith (CV 10-429-PHX-JAT), and Sage (CV 10-456-PHX-JAT) claims 2, 5-9, 13 and 14 and part of claims 3, 4, 10, 11, and 12 remain with the undersigned as part of the MDL and claim 1 and part of claims 3, 4, 10, 11, and 12 have been remanded to their respective transferor courts. MERS shall file a copy of this Order with each transferor court within the next two business days.

IT IS FURTHER ORDERED that with respect to Eastwood (CV 10-426-PHX-JAT) claims 1-2, 5-9, 13 and 14 and part of claims 3, 4, 10, 11, and 12 remain with the undersigned as part of the MDL and part of claims 3, 4, 10, 11, and 12 have been remanded to the transferor court. MERS shall file a copy of this Order with the transferor court within the next two business days.

IT IS FURTHER ORDERED that with respect to Mason (CV 10-457-PHX-JAT) and Fitzgerald (CV 10-460-PHX-JAT) claims 1-4 and part of claim 6 (i.e., injunctive relief, declaratory relief, and quiet title) remain with the undersigned as part of the MDL and claim 5 and part of claim 6 (i.e., injunctive relief, declaratory relief, and reformation) have been remanded to their respective transferor courts. MERS shall file a copy of this Order with each transferor court within the next two business days.

IT IS FURTHER ORDERED that with respect to Freeto (CV 10-459-PHX-JAT) claims 2, 5-11, and 13 and part of claims 3 and 4 remain with the undersigned as part of the MDL and claims 1 and 12 and part of claims 3 and 4 have been remanded to the transferor court.[13] MERS shall file a copy of this Order with the transferor court within the next two business days.

IT IS FURTHER ORDERED that with respect to Dominguez (CV 10-461-PHX-JAT) claims 1-2, 5-11, 13 and 14 and part of claims 3, 4, and 12 remain with the undersigned as part of the MDL and part of claims 3, 4, and 12 have been remanded to the transferor court.[14] MERS shall file a copy of this Order with the transferor court within the next two business days.

IT IS FURTHER ORDERED that the Clerk of the Court shall file a copy of this Order in each member case listed on page 2.

IT IS FURTHER ORDERED that with respect to any claims that are staying with this Court, Defendants shall answer or otherwise respond to those claims within the time limits set in the Initial Practice and Procedure Order (Doc. #25); with respect to any claims that have been remanded to the transferor courts, Defendants shall answer or otherwise respond to those claims within fifteen days of this Order, unless any order of the transferor court is inconsistent with this Order, in which case, the order of the transferor court shall control.

IT IS FURTHER ORDERED within 12 days of this Order, MERS shall file all documents related to a case bifurcated herein into the record of the transferor court in that particular case. (Because this Court will not transfer the entire MDL file and docket to any individual transferor court, this will insure the Judge in the transferor court has a complete record for that specific case).

[1] The parties have fully briefed this issue pursuant to the Court’s Order on Practices and Procedures (Doc. #176). Although the parties sought “remand” of certain claims to the transferor court, under Section 1407(a), remands to a transferor court can only be effected by the Judicial Panel on Multidistrict Litigation. 28 U.S.C. § 1407; see also R.P.J.P.M.L. 7.6. The Court, thus, stresses that this order is solely a determination of which claims are pending before this Court and which claims remain in their respective transferor courts, pursuant to the Panel’s transfer orders.

[2] Twenty-one additional cases transferred by the transfer order have been addressed by a separate set of briefing.

[3] In four cases briefed for this order, CV 10-401-PHX-JAT (Huck), CV 10-413-PHX-JAT (Gillespie), CV 10-415-PHX-JAT (Caffee), and CV 10-455-PHX-JAT (Barlow), Plaintiffs have moved for leave to file amended complaints. (Doc. ##525, 526, 564, 573.) The Court will wait until after it grants or denies those motions to determine which claims have been retained and which claims have been remanded in these four cases. An updated briefing schedule is set forth below.

[4] See, e.g., CV 10-414-PHX-JAT (Duncan), Doc. #1-1 at 48-50

[5] Id.

[6] See, e.g., CV 10-413-PHX-JAT (Duncan), Doc. #1-1 at 31.

[7] See, e.g., CV 10-414-PHX-JAT (Duncan), Doc. #1-1 at 43.

[8] The identical racketeering claims in Vo (Tenth Claim), Eastwood (Tenth Claim), Ellifritz (Tenth Claim), McConathy (Tenth Claim), Smith (Tenth Claim), Sage (Tenth Claim), Freeto (Tenth Claim), and Dominguez (Tenth Claim) are also bifurcated.

[9] See, e.g., CV 10-414-PHX-JAT (Duncan), Doc. #1-1 at 41-42.

[10] The identical civil conspiracy claims in Vo (Eleventh Claim), Eastwood (Eleventh Claim), Ellifritz (Eleventh Claim), McConathy (Eleventh Claim), Smith (Eleventh Claim), Sage (Eleventh Claim), Freeto (Eleventh Claim), and Dominguez (Eleventh Claim) are also bifurcated.

[11] See, e.g., CV 10-414-PHX-JAT (Duncan), Doc. #1-1 at 38-41.

[12] CV 10-437-PHX-JAT (Ellifritz), Doc. #1-1 at 41.

[13] While these remanded claims do not appear to involve Defendants Litton Loan Servicing LP, Bank of New York Mellon as former trustee for the C-BASS Mortgage Loan Asset-Backed Certificates Series 2005-CB4, and JPMorgan Chase Bank, National Association, as former trustee for the C-BASS Mortgage Loan Asset-Backed Certificates Series 2005-CB4 (collectively, “Litton Loan Group”), this argument is better made in a motion to dismiss. Thus, the Court remands these claims even as they relate to the Litton Loan Group.

[14] The Court remands these claims even as they relate to Defendant Litton Loan Servicing LP.

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in concealment, conspiracy, foreclosure, foreclosure fraud, foreclosures, MERS, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., racketeeringComments (0)

Judge ARTHUR SCHACK’s COLASSAL Steven J. BAUM “MiLL” SMACK DOWN!! MERS TWILIGHT ZONE!

Judge ARTHUR SCHACK’s COLASSAL Steven J. BAUM “MiLL” SMACK DOWN!! MERS TWILIGHT ZONE!


2010 NY Slip Op 50927(U)

HSBC BANK USA, N.A. AS TRUSTEE FOR NOMURA ASSET-BACKED CERTIFICATE SERIES

2006-AF1,, Plaintiff,
v.
LOVELY YEASMIN, ET. AL., Defendants.

34142/07

Supreme Court, Kings County.

Decided May 24, 2010.

Steven J Baum, PC, Amherst NY, Plaintiff — US Bank.

ARTHUR M. SCHACK, J.

Plaintiff’s renewed motion for an order of reference, for the premises located at 22 Jefferson Street, Brooklyn, New York (Block 3170, Lot 20, County of Kings), is denied with prejudice. The instant action is dismissed and the notice of pendency for the subject property is cancelled. Plaintiff HSBC BANK USA, N.A. AS TRUSTEE FOR NOMURA ASSET-BACKED CERTIFICATE SERIES 2006-AF1 (HSBC) failed to comply with my May 2, 2008 decision and order in the instant matter (19 Misc 3d 1127 [A]), which granted plaintiff HSBC leave:

to renew its application for an order of reference for the premises located at 22 Jefferson Street, Brooklyn, New York (Block 3170, Lot 20, County of Kings), upon presentation to the Court, within forty-five (45) days of this decision and order of:

(1) a valid assignment of the instant mortgage and note to plaintiff, HSBC . . .;

(2) an affirmation from Steven J. Baum, Esq., the principal of Steven J. Baum, P.C., explaining if both MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. [MERS], the assignor of the instant mortgage and note, and HSBC . . . the assignee of the instant mortgage and note, pursuant to 22 NYCRR § 1200.24, consented to simultaneous representation in the instant action, with “full disclosure of the implications of the simultaneous representation and the advantages and risks involved” explained to them;

(3) compliance with the statutory requirements of CPLR § 3215 (f), by an affidavit of facts executed by someone with authority to execute such an affidavit, and if the affidavit of facts is executed by a loan servicer, a copy of a valid power of attorney to the loan servicer, and the servicing agreement authorizing the affiant to act in the instant foreclosure action; and

(4) an affidavit from an officer of plaintiff HSBC . . . explaining why plaintiff HSBC . . . purchased a nonperforming loan from MERS, as nominee for CAMBRIDGE HOME CAPITAL, LLC [CAMBRIDGE].

[Emphasis added]

Plaintiff made the instant motion on January 6, 2009, 249 days subsequent to the May 2, 2008 decision and order. Thus, the instant motion is 204 days late. Plaintiff’s unavailing lateness explanation, in ¶ 16 of plaintiff’s counsel’s January 6, 2009 affirmation of regularity, states:

A previous application has been made for this or like relief but was subsequently denied without prejudice with leave to renew upon proper papers. By Decision and Order of this court dated the 2nd day of May 2008, plaintiff had 45 days to renew its application.

However on June 29, 2008 the Plaintiff permitted the mortgagor to enter into a foreclosure forbearance agreement. Said agreement was entered into with the hope that the Defendant would be able to keep her home. The agreement was not kept by the mortgagor and Plaintiff has since resumed the foreclosure action. The defects of the original application are addressed in the Affirmation attached hereto at Tab F [sic].

June 29, 2008 was 58 days subsequent to May 2, 2008. This was 13 days subsequent to the Court ordered deadline for plaintiff to make a renewed motion for an order of reference. While it’s laudatory for plaintiff HSBC to have granted defendant a forbearance agreement, plaintiff HSBC never notified the Court about this or sought Court approval of extending the 45-day deadline to make the instant motion. However, even if the instant motion was timely, the documents plaintiff’s counsel refers to at Tab F [exhibit F of motion] do not cure the defects the Court found with the original motion and articulated in the May 2, 2008 decision and order.

Background

Defendant LOVELY YEASMIN borrowed $624,800.00 from CAMBRIDGE on May 10, 2006. The note and mortgage were recorded by MERS, as nominee for CAMBRIDGE, for purposes of recording the mortgage, in the Office of the City Register, New York City Department of Finance, on May 23, 2006, at City Register File Number (CRFN) XXXXXXXXXXXXX. Then, MERS, as nominee for CAMBRIDGE, assigned the mortgage to plaintiff HSBC on September 10, 2007, with the assignment recorded in the Office of the City Register, on September 20, 2007, at CRFN XXXXXXXXXXXXX. The assignment was executed by “Nicole Gazzo, Esq., on behalf of MERS, by Corporate Resolution dated 7/19/07.” Neither a corporate resolution nor a power of attorney to Ms. Gazzo were recorded with the September 10, 2007 assignment. Therefore, the Court found the assignment invalid and plaintiff HSBC lacked standing to bring the instant foreclosure action. Ms. Gazzo, the assignor, according to the Office of Court Administration’s Attorney Registration, has as her business address, “Steven J. Baum, P.C., 220 Northpointe Pkwy Ste G, Buffalo, NY 14228-1894.” On September 10, 2008, the same day that Ms. Gazzo executed the invalid assignment for MERS, as nominee for CAMBRIDGE, plaintiff’s counsel, Steven J. Baum, P.C., commenced the instant action on behalf of purported assignee HSBC by filing the notice of pendency, summons and complaint in the instant action with the Kings County Clerk’s Office. The Court, in the May 2, 2008 decision and order, was concerned that the simultaneous representation by Steven J. Baum, P.C. of both MERS and HSBC was a conflict of interest in violation of 22 NYCRR § 1200.24, the Disciplinary Rule of the Code of Professional Responsibility entitled “Conflict of Interest; Simultaneous Representation,” then in effect. Further, plaintiff’s moving papers for an order of reference and related relief failed to present an “affidavit made by the party,” pursuant to CPLR § 3215 (f). The instant application contained an “affidavit of merit and amount due,” dated November 16, 2007, by Cathy Menchise, “Senior Vice President of WELLS FARGO BANK, N.A. D/B/A AMERICA’S SERVICING COMPANY, Attorney in Fact for HSBC BANK USA, N.A. AS TRUSTEE FOR NOMURA ASSET-BACKED CERTIFICATE SERIES 2006-AF1.” Ms. Menchise stated “[t]hat a true copy of the Power of Attorney is attached hereto.” Actually attached was a photocopy of a “Limited Power of Attorney,” dated July 19, 2004, from HSBC, appointing WELLS FARGO BANK, N.A. as its attorney-in-fact to perform various enumerated services, by executing documents “if such documents are required or permitted under the terms of the related servicing agreements . . . in connection with Wells Fargo Bank, N.A.[‘s] . . . responsibilities to service certain mortgage loans . . . held by HSBC . . . as Trustee of various trusts.” The “Limited Power of Attorney” failed to list any of these “certain mortgage loans.” The Court was unable to determine if plaintiff HSBC’s subject mortgage loan was covered by this “Limited Power of Attorney.” The original motion stated that defendant YEASMIN defaulted on her mortgage payments by failing to make her May 1, 2007 and subsequent monthly loan payments. Yet, on September 10, 2007, 133 days subsequent to defendant YEASMIN’S alleged May 1, 2007 payment default, plaintiff HSBC took the ssignment of the instant nonperforming loan from MERS, as nominee for CAMBRIDGE. Thus, the Court required, upon renewal of the motion for an order of reference, a satisfactory explanation of why HSBC purchased a nonperforming loan from MERS, as nominee for CAMBRIDGE.

Plaintiff HSBC needed “standing” to proceed in the instant action. The Court of Appeals (Saratoga County Chamber of Commerce, Inc. v Pataki, 100 NY2d 801, 912 [2003]), cert denied 540 US 1017 [2003]), held that “[s]tanding to sue is critical to the proper functioning of the judicial system. It is a threshold issue. If standing is denied, the pathway to the courthouse is blocked. The plaintiff who has standing, however, may cross the threshold and seek judicial redress.” In Carper v Nussbaum, 36 AD3d 176, 181 (2d Dept 2006), the Court held that “[s]tanding to sue requires an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant’s request.” If a plaintiff lacks standing to sue, the plaintiff may not proceed in the action. (Stark v Goldberg,297 AD2d 203 [1d Dept 2002]). “Since standing is jurisdictional and goes to a court’s authority to resolve litigation [the court] can raise this matter sua sponte.” (Axelrod v New York State Teachers’ Retirement System, 154 AD2d 827, 828 [3d Dept 1989]).

In the instant action, the September 10, 2007 assignment from MERS, as nominee for CAMBRIDGE, to HSBC was defective. Therefore, HSBC had no standing to bring this action. The recorded assignment by “Nicole Gazzo, Esq. on behalf of MERS, by Corporate Resolution dated 7/19/07,” had neither the corporate resolution nor a power of attorney attached. Real Property Law (RPL) § 254 (9) states: Power of attorney to assignee. The word “assign” or other words of assignment, when contained in an assignment of a mortgage and bond or mortgage and note, must be construed as having included in their meaning that the assignor does thereby make, constitute and appoint the assignee the true and lawful attorney, irrevocable, of the assignor, in the name of the assignor, or otherwise, but at the proper costs and charges of the assignee, to have, use and take all lawful ways and means for the recovery of the money and interest secured by the said mortgage and bond or mortgage and note, and in case of payment to discharge the same as fully as the assignor might or could do if the assignment were not made. [Emphasis added]

To have a proper assignment of a mortgage by an authorized agent, a power of attorney is necessary to demonstrate how the agent is vested with the authority to assign the mortgage. “No special form or language is necessary to effect an assignment as long as the language shows the intention of the owner of a right to transfer it [Emphasis added].” (Tawil v Finkelstein Bruckman Wohl Most & Rothman, 223 AD2d 52, 55 [1d Dept 1996]). (See Suraleb, Inc. v International Trade Club, Inc., 13 AD3d 612 [2d Dept 2004]). To foreclose on a mortgage, a party must have title to the mortgage. The instant assignment was a nullity. The Appellate Division, Second Department (Kluge v Fugazy, 145 AD2d 537, 538 [2d Dept 1988]), held that a “foreclosure of a mortgage may not be brought by one who has no title to it and absent transfer of the debt, the assignment of the mortgage is a nullity.” Citing Kluge v Fugazy, the Court inKatz v East-Ville Realty Co. (249 AD2d 243 [1d Dept 1998]), held that “[p]laintiff’s attempt to foreclose upon a mortgage in which he had no legal or equitable interest was without foundation in law or fact.” Plaintiff HSBC, with the invalid assignment of the instant mortgage and note from MERS, lacked standing to foreclose on the instant mortgage. The Court, in Campaign v Barba (23 AD3d 327 [2d Dept 2005]), held that “[t]o establish a prima facie case in an action to foreclose a mortgage, the plaintiff must establish the existence of the mortgage and the mortgage note, ownership of the mortgage, and the defendant’s default in payment [Emphasis added].” (See Household Finance Realty Corp. of New York v Wynn, 19 AD3d 545 [2d Dept 2005]; Sears Mortgage Corp. v Yahhobi, 19 AD3d 402 [2d Dept 2005]; Ocwen Federal Bank FSB v Miller, 18 AD3d 527 [2d Dept 2005]; U.S. Bank Trust Nat. Ass’n v Butti, 16 AD3d 408 [2d Dept 2005]; First Union Mortgage Corp. v Fern, 298 AD2d 490 [2d Dept 2002]; Village Bank v Wild Oaks Holding, Inc., 196 AD2d 812 [2d Dept 1993]). Even if plaintiff HSBC can cure the assignment defect, plaintiff’s counsel has to address his conflict of interest in the representation of both assignor MERS, as nominee for CAMBRIDGE, and assignee HSBC. 22 NYCRR § 1200.24, of the Disciplinary Rules of the Code of Professional Responsibility, entitled “Conflict of Interest; Simultaneous Representation,” states in relevant part: (a) A lawyer shall decline proffered employment if the exercise of independent professional judgment in behalf of a client will be or is likely to be adversely affected by the acceptance of the proffered employment, or if it would be likely to involve the lawyer in representing differing interests, except to the extent permitted under subdivision (c) of this section. (b) A lawyer shall not continue multiple employment if the exercise of independent professional judgment in behalf of a client will be or is likely to be adversely affected by the lawyer’s representation of another client, or if it would be likely to involve the lawyer in representing differing interests, except to the extent permitted under subdivision (c) of this section. (c) in the situations covered by subdivisions (a) and (b) of this section, a lawyer may represent multiple clients if a disinterested lawyer would believe that the lawyer can competently represent the interest of each and if each consents to the representation after full disclosure of the implications of the simultaneous representation and the advantages and risks involved. [Emphasis added]

The Court, upon renewal of the instant motion for an order of reference wanted to know if both MERS and HSBC were aware of the simultaneous representation by plaintiff’s counsel, Steven J. Baum, P.C., and whether both MERS and HSBC consented. Upon plaintiff’s renewed motion for an order of reference, the Court required an affirmation by Steven J. Baum, Esq., the principal of Steven J. Baum, P.C., explaining if both MERS and HSBC consented to simultaneous representation in the instant action with “full disclosure of the implications of the simultaneous representation and the advantages and risks involved.” The Appellate Division, Fourth Department, the Department, in which both Ms. Gazzo and Mr. Baum are registered (In re Rogoff, 31 AD3d 111 [2006]), censured an attorney for, inter alia, violating 22 NYCRR § 1200.24, by representing both a buyer and sellers in the sale of a motel. The Court, at 112, found that the attorney “failed to make appropriate disclosures to either the sellers or the buyer concerning dual representation.” Further, the Rogoff Court, at 113, censured the attorney, after it considered the matters submitted by respondent in mitigation, including: that respondent undertook the dual representation at the insistence of the buyer, had no financial interest in the transaction and charged the sellers and the buyer one half of his usual fee. Additionally, we note that respondent cooperated with the Grievance Committee and has expressed remorse for his misconduct. Then, if counsel for plaintiff HSBC cures the assignment defect and explains his simultaneous representation, plaintiff HSBC needs to address the “affidavit of merit” issue. The May 2, 2008 decision and order required that plaintiff comply with CPLR § 3215 (f) by providing an “affidavit made by the party,” whether by an officer of HSBC, or someone with a valid power of attorney from HSBC, to execute foreclosure documents for plaintiff HSBC. If plaintiff HSBC presents a power of attorney and it refers to a servicing agreement, the Court needs to inspect the servicing agreement. (Finnegan v Sheahan, 269 AD2d 491 [2d Dept 2000];Hazim v Winter, 234 AD2d 422 [2d Dept 1996]; EMC Mortg. Corp. v Batista, 15 Misc 3d 1143 [A] [Sup Ct, Kings County 2007]; Deutsche Bank Nat. Trust Co. v Lewis, 4 Misc 3d 1201 [A] [Sup Ct, Suffolk County 2006]).

Last, the Court required an affidavit from an officer of HSBC, explaining why, in the middle of our national mortgage financial crisis, plaintiff HSBC purchased from MERS, as nominee for CAMBRIDGE, the subject nonperforming loan. It appears that HSBC violated its corporate fiduciary duty to its stockholders by purchasing the instant mortgage loan, which became nonperforming on May 1, 2007, 133 days prior to its assignment from MERS, as nominee for CAMBRIDGE, to HSBC, rather than keep the subject mortgage loan on CAMBRIDGE’s books.

Discussion

The instant renewed motion is dismissed for untimeliness. Plaintiff made its renewed motion for an order of reference 204 days late, in violation of the Court’s May 2, 2008 decision and order. Moreover, even if the instant motion was timely, the explanations offered by plaintiff’s counsel, in his affirmation in support of the instant motion and various documents attached to exhibit F of the instant motion, attempting to cure the four defects explained by the Court in the prior May 2, 2008 decision and order, are so incredible, outrageous, ludicrous and disingenuous that they should have been authored by the late Rod Serling, creator of the famous science-fiction televison series, The Twilight Zone. Plaintiff’s counsel, Steven J. Baum, P.C., appears to be operating in a parallel mortgage universe, unrelated to the real universe. Rod Serling’s opening narration, to episodes in the 1961-1962 season of The Twilight Zone (found at www.imdb.com/title/tt005250/quotes), could have been an introduction to the arguments presented in support of the instant motion by plaintiff’s counsel, Steven J. Baum, P.C. — “You are traveling through another dimension, a dimension not only of sight and sound but of mind. A journey into a wondrous land of imagination. Next stop, the Twilight Zone.” With respect to the first issue for the renewed motion for an order of reference, the validity of the September 10, 2007 assignment of the subject mortgage and note by MERS, as nominee for CAMBRIDGE, to plaintiff HSBC by “Nicole Gazzo, Esq., on behalf of MERS, by Corporate Resolution dated 7/19/07,” plaintiff’s counsel claims that the assignment is valid because Ms. Gazzo is an officer of MERS, not an agent of MERS. Putting aside Ms. Gazzo’s conflicted status as both assignor attorney and employee of assignee’s counsel, Steven J. Baum, P.C., how would the Court have known from the plain language of the September 10, 2007 assignment that the assignor, Ms. Gazzo, is an officer of MERS? She does not state in the assignment that she is an officer of MERS and the corporate resolution is not attached. Thus, counsel’s claim of a valid assignment takes the Court into “another dimension” with a “journey into a wondrous land of imagination,” the mortgage twilight zone. Next, plaintiff’s counsel attached to exhibit F the July 17, 2007 “Agreement for Signing Authority” between MERS, Wells Fargo Home Mortgage, a Division of Wells Fargo Bank NA (WELLS FARGO), a MERS “Member” and Steven J. Baum, P.C., as WELLS FARGO’s “Vendor.” The parties agreed, in ¶ 3, that “in order for Vendor [Baum] to perform its contractual duties to Member [WELLS FARGO], MERS, by corporate resolution, will grant employees of Vendor [Baum] the limited authority to act on behalf of MERS to perform certain duties. Such authority is set forth in the Resolution, which is made a part of this Agreement.” Also attached to exhibit F is the MERS corporate resolution, certified by William C. Hultman, Corporate Secretary of MERS, that MERS’ Board of Directors adopted this resolution, effective July 19, 2007, resolving:

that the attached list of candidates are employee(s) of Steven J. Baum, P.C. and are hereby appointed as assistant secretaries and vice presidents of Mortgage Electronic Registration Systems, Inc., and as such are authorized to: Execute any and all documents necessary to foreclose upon the property securing any mortgage loan registered on the MERS System that is shown to be registered to the Member . . . Take any and all actions and execute all documents necessary to protect the interest of the Member, the beneficial owner of such mortgage loan, or MERS in any bankruptcy proceedings . . . Assign the lien of any mortgage loan registered on the MERS System that is shown to be registered to Wells Fargo.

Then, the resolution certifies five Steven J. Baum, P.C. employees [all currently admitted to practice in New York and listing Steven J. Baum, P.C. as their employer in the Office of Court Administration Attorney Registry] as MERS officers. The five are Brian Kumiega, Nicole Gazzo, Ron Zackem, Elpiniki Bechakas, and Darleen Karaszewski. The language of the MERS corporate resolution flies in the face of documents recorded with the City Register of the City of New York. The filed recordings with the City Register show that the subject mortgage was owned first by MERS, as nominee for CAMBRIDGE, and then by HSBC as Trustee for a Nomura collateralized debt obligation. However, if the Court follows the MERS’corporate resolution and enters into a new dimension of the mind, the mortgage twilight zone, the real owner of the subject mortgage is WELLS FARGO, the MERS Member and loan servicer of the subject mortgage, because the corporate resolution states that the Member is “the beneficial owner of such mortgage loan.” The MERS mortgage twilight zone was created in 1993 by several large “participants in the real estate mortgage industry to track ownership interests in residential mortgages. Mortgage lenders and other entities, known as MERS members, subscribe to the MERS system and pay annual fees for the electronic processing and tracking of ownership and transfers of mortgages. Members contractually agree to appoint MERS to act as their common agent on all mortgages they register in the MERS system.” (MERSCORP, Inc. v Romaine, 8 NY3d 90, 96 [2006]). Next, with respect to Ms. Gazzo’s employer, Steven J. Baum, P.C, and its representation of MERS, through Ms. Gazzo, the Court continues to journey through the mortgage twilight zone. Also, attached to exhibit F of the instant motion is the August 11, 2008 affirmation of Steven J. Baum, Esq., affirmed “under the penalties of perjury.” Mr. Baum states, in ¶ 3, that “My firm does not represent HSBC . . . and MERS simultaneously in the instant action.” Then, apparently overlooking that the subject notice of pendency, summons, complaint and instant motion, which all clearly state that Steven J. Baum, P.C. is the attorney for plaintiff HSBC, Mr. Baum states, in ¶ 4 of his affirmation, that “My firm is the attorney of record for Wells Fargo Bank, N.A., d/b/a America’s Servicing Company, attorney in fact for HSBC Bank USA, N.A., as Trustee for Nomura Asset-Backed Certificate Series 2006-AF1. My firm does not represent . . . [MERS] as an attorney in this action.” In the mortgage world according to Steven J. Baum, Esq., there is a fine line between acting as an attorney for MERS and as a vendor for a MERS member. If Mr. Baum is not HSBC’s attorney, but the attorney for WELLS FARGO, why did he mislead the Court and defendants by stating on all the documents filed and served in the instant action that he is plaintiff’s attorney for HSBC? Further, in ¶ 6 of his affirmation, he states “Nowhere does the Resolution indicate that Ms. Gazzo, or my firm, or any attorney or employee of my firm, shall act as an attorney for MERS. As such I am unaware of any conflict of interest of Steven J. Baum, P.C. or any of its employees, in this action.” While Mr. Baum claims to be unaware of the inherent conflict of interest, the Court is aware of the conflict. ¶ 3 of the MERS “Agreement for Signing Authority,” cited above, states that “in order for Vendor [Baum] to perform its contractual duties to Member [WELLS FARGO], MERS, by corporate resolution, will grant employees of Vendor [Baum] the limited authority to act on behalf of MERS to perform certain duties. Such authority is set forth in the Resolution, which is made a part of this Agreement.” As the Court continues through the MERS mortgage twilight zone, attached to exhibit F is the June 30, 2009-affidavit of MERS’ Secretary, William C. Hultman. Mr. Hultman claims, in ¶ 3, that Steven J. Baum, P.C. is not acting in the instant action as attorney for MERS and, in ¶ 4, Ms. Gazzo in her capacity as an officer of MERS executed the September 10, 2007 subject assignment “to foreclose on a mortgage loan registered on the MERS System that is being serviced by Wells Fargo Bank, N.A.” Thus, Mr. Hultman perceives that mortgages registered on the MERS system exist in a parallel universe to those recorded with the City Register of the City of New York. While Mr. Hultman waives, in ¶ 9, any conflict that might exist by Steven J. Baum, P.C. in the instant action, neither he nor Mr. Baum address whether MERS, pursuant to 22 NYCRR § 1200.24, consented to simultaneous representation in the instant action, with “full disclosure of the implications of the simultaneous representation and the advantages and risks involved” explained to MERS. Then, attached to exhibit F, there is the June 11, 2008-affidavit of China Brown, Vice President Loan Documentation of WELLS FARGO. This document continues the Court’s trip into “a wondrous land of imagination.” Despite the affidavit’s caption stating that HSBC is the plaintiff, Mr. or Ms. Brown (the notary public’s jurat refers several times to China Brown as “he/she”), states, in ¶ 4, that “Steven J. Baum, P.C. represents us as an attorney of record in this action.” The Court infers that “us” is WELLS FARGO. Moving to the third issue that plaintiff was required to address in the instant motion, compliance with the statutory requirements of CPLR § 3215 (f) with an affidavit of facts executed by someone with authority to execute such an affidavit, plaintiff’s instant motion contains an affidavit of merit, attached as exhibit C, by Kim Miller, “Vice President of Wells Fargo Bank, N.A. as Attorney in Fact for HSBC,” executed on December 8, 2008, 220 days after my May 2, 2008 decision and order. The affidavit of merit is almost six months late. Again, plaintiff attached a photocopy of the July 19, 2004 “Limited Power of Attorney” from HSBC [exhibit D], which appointed WELLS FARGO as its attorney-in-fact to perform various enumerated services, by executing documents “if such documents are required or permitted under the terms of the related servicing agreements . . . in connection with Wells Fargo[‘s] . . . responsibilities to service certain mortgage loans . . . held by HSBC . . . as Trustee of various trusts.” Further, the “Limited Power of Attorney” fails to list any of these “certain mortgage loans.” Therefore, the Court is unable to determine if the subject mortgage loan is one of the mortgage loans that WELLS FARGO services for HSBC. The “Limited Power of attorney” gives WELLS FARGO the right to execute foreclosure documents “if such documents are required or permitted under the terms of the related servicing agreements.” Instead of presenting the Court with the “related servicing agreement” for review, plaintiff’s counsel submits copies of the cover page and redacted pages 102, 104 and 105 of the October 1, 2006 Pooling and Servicing Agreement between WELLS FARGO, as Master Servicer, HSBC, as Trustee, and other entities. This is in direct contravention of the Court’s May 2, 2008-directive to plaintiff HSBC that it provides the Court with the entire pooling and servicing agreement upon renewal of the instant motion. Thomas Westmoreland, Vice President Loan Documentation of HSBC, in ¶ 10 of his attached June 13, 2008-affidavit, also in exhibit F, claims that the snippets of the pooling and servicing agreement provided to the Court are “a copy of the non-proprietary portions of the Pooling and Servicing Agreement that was entered into when the pool of loans that contained the subject mortgage was purchased.” The Court cannot believe that there is any proprietary or trade secret information in a boilerplate pooling and servicing agreement. If plaintiff HSBC utilizes an affidavit of facts by a loan servicer, not an HSBC officer, to secure a judgment on default, pursuant to CPLR § 3215 (f), then the Court needs to examine the entire pooling and servicing agreement, whether proprietary or non-p

roprietary, to determine if the pooling and servicing agreement grants authority, pursuant to a power of attorney, to the affiant to execute the affidavit of facts.

Further, there is hope that Mr. Westmoreland, unlike Steven J. Baum, Esq., is not in another dimension. Mr. Westmoreland, in ¶ 1 of his affidavit, admits that HSBC is the plaintiff in this action. However, with respect to why plaintiff HSBC purchased the subject nonperforming loan, Mr. Westmoreland admits to a lack of due diligence by plaintiff HSBC. His admissions are straight from the mortgage twilight zone. He states in his affidavit, in ¶’s 4-7 and part of ¶ 10: 4. The secondary mortgage market is, essentially, the buying and selling of “pools” of mortgages. 5. A mortgage pools is the packaging of numerous mortgage loans together so that an investor may purchase a significant number of loans in one transaction. 6. An investigation of each and every loan included in a particular mortgage pool, however, is not conducted, nor is it feasible. 7. Rather, the fact that a particular mortgage pool may include loans that are already in default is an ordinary risk of participating in the secondary market . . . 10. . . . Indeed, the performance of the mortgage pool is the measure of success, not any one individual loan contained therein. [Emphasis added] The Court can only wonder if this journey through the mortgage twilight zone and the dissemination of this decision will result in Mr. Westmoreland’s affidavit used as evidence in future stockholder derivative actions against plaintiff HSBC. It can’t be comforting to investors to know that an officer of a financial behemoth such as plaintiff HSBC admits that “[a]n investigation of each and every loan included in a particular mortgage pool, however, is not conducted, nor is it feasible” and that “the fact that a particular mortgage pool may include loans that are already in default is an ordinary risk of participating in the secondary market.”

Cancelling of notice of pendency

The dismissal with prejudice of the instant foreclosure action requires the cancellation of the notice of pendency. CPLR § 6501 provides that the filing of a notice of pendency against a property is to give constructive notice to any purchaser of real property or encumbrancer against real property of an action that “would affect the title to, or the possession, use or enjoyment of real property, except in a summary proceeding brought to recover the possession of real property.” The Court of Appeals, in 5308 Realty Corp. v O & Y Equity Corp. (64 NY2d 313, 319 [1984]), commented that “[t]he purpose of the doctrine was to assure that a court retained its ability to effect justice by preserving its power over the property, regardless of whether a purchaser had any notice of the pending suit,” and, at 320, that “the statutory scheme permits a party to effectively retard the alienability of real property without any prior judicial review.” CPLR § 6514 (a) provides for the mandatory cancellation of a notice of pendency by: The Court, upon motion of any person aggrieved and upon such notice as it may require, shall direct any county clerk to cancel a notice of pendency, if service of a summons has not been completed within the time limited by section 6512; or if the action has beensettled, discontinued or abated; or if the time to appeal from a final judgment against the plaintiff has expired; or if enforcement of a final judgment against the plaintiff has not been stayed pursuant to section 551. [emphasis added] The plain meaning of the word “abated,” as used in CPLR § 6514 (a) is the ending of an action. “Abatement” is defined (Black’s Law Dictionary 3 [7th ed 1999]) as “the act of eliminating or nullifying.” “An action which has been abated is dead, and any further enforcement of the cause of action requires the bringing of a new action, provided that a cause of action remains (2A Carmody-Wait 2d § 11.1).” (Nastasi v Natassi, 26 AD3d 32, 40 [2d Dept 2005]). Further, Nastasi at 36, held that the “[c]ancellation of a notice of pendency can be granted in the exercise of the inherent power of the court where its filing fails to comply with CPLR § 6501 (see 5303 Realty Corp. v O & Y Equity Corp., supra at 320-321; Rose v Montt Assets, 250 AD2d 451, 451-452 [1d Dept 1998]; Siegel, NY Prac § 336 [4th ed]).” Thus, the dismissal of the instant complaint must result in the mandatory cancellation of plaintiff HSBC’s notice of pendency against the property “in the exercise of the inherent power of the court.”

Conclusion

Accordingly, it is ORDERED, that the renewed motion of plaintiff, HSBC BANK USA, N.A. AS TRUSTEE FOR NOMURA ASSET-BACKED CERTIFICATE SERIES 2006-AF1, for an order of reference, for the premises located at 22 Jefferson Street, Brooklyn, New York (Block 3170, Lot 20, County of Kings), is denied with prejudice; and it is further

ORDERED, that the instant action, Index Number 34142/07, is dismissed with prejudice; and it is further

ORDERED that the Notice of Pendency in this action, filed with the Kings County Clerk on September 10, 2007, by plaintiff, HSBC BANK USA, N.A. AS TRUSTEE FOR NOMURA ASSET-BACKED CERTIFICATE SERIES 2006-AF1, to foreclose a mortgage for real property located at 22 Jefferson Street, Brooklyn New York (Block 3170, Lot 20, County of Kings), is cancelled.

This constitutes the Decision and Order of the Court.

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in case, cdo, concealment, conspiracy, corruption, dismissed, foreclosure, foreclosure fraud, foreclosure mills, forensic mortgage investigation audit, HSBC, investigation, judge arthur schack, MERS, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., Mortgage Foreclosure Fraud, note, reversed court decision, robo signer, robo signers, securitization, Supreme CourtComments (1)

Haley v. ELEGEN HOME LENDING, LP, Dist. Court, D. Nevada 2010

Haley v. ELEGEN HOME LENDING, LP, Dist. Court, D. Nevada 2010


Learn From This

 

BART E. HALEY, Plaintiff,
v.
ELEGEN HOME LENDING, LP; et al., Defendants.

No. 3:10-cv-00046-LRH-RAM.

United States District Court, D. Nevada.

March 15, 2010.

 

ORDER

LARRY R. HICKS, District Judge. 

Before the court is defendant PNC Bank National Association’s (“PNC”) motions to dismiss and expunge lis pendens filed on January 29, 2010 (Doc. ##5, 6[1]) to which the other defendants have joined (Doc. #9). Plaintiff Bart E. Haley (“Haley“) filed an opposition and request for leave to amend on February 16, 2010. Doc. #11. Thereafter, PNC filed a reply on February 26, 2010. Doc. #14. 

I. Facts and Procedural History

Haley refinanced real property through a loan with defendant Elegen Home Lending. The property was secured by a note and deed of trust. Haley defaulted on the loan and defendant Cal-Western Reconveyance Corporation, the substitute trustee, filed a notice of default on May 29, 2009. Doc. #5, Exhibit C. A notice of trustee’s sale was filed on November 13, 2007. Doc. #5, Exhibit D.Subsequently, on December 3, 2003, Haley filed a complaint alleging ten causes of action: (1) wrongful foreclosure; (2) fraud in the omission; (3) fraud in the inducement; (4) contractual breach of good faith and fair dealing; (5) tortious breach of good faith and fair dealing; (6) racketeering; (7) quiet title; (8) unjust enrichment; (9) declaratory relief; and (10) permanent injunction. Doc. #1, Exhibit 1. Thereafter, PNC filed the present motions to dismiss and expunge lis pendens. Doc. ##5, 6.

II. Legal Standard

In considering “a motion to dismiss, all well-pleaded allegations of material fact are taken as true and construed in a light most favorable to the non-moving party.” Wyler Summit P’ship v. Turner Broad. Sys., Inc., 135 F.3d 658, 661 (9th Cir. 1998) (citation omitted). However, a court does not necessarily assume the truth of legal conclusions merely because they are cast in the form of factual allegations in a plaintiff’s complaint. See Clegg v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994)

There is a strong presumption against dismissing an action for failure to state a claim. See Gilligan v. Jamco Dev. Corp., 108 F.3d 246, 249 (9th Cir. 1997) (citation omitted). “The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence in support of the claims.” Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds by Harlow v. Fitzgerald, 457 U.S. 800, 807 (1982). However, a plaintiff’s obligation to provide the grounds of his entitlement to relief requires more than labels, conclusions, and a formulaic recitation of the elements of the cause of action. Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955, 1965 (2007). “Factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Id. (internal citations omitted). 

III. Discussion

Wrongful Foreclosure

An action for wrongful foreclosure requires that, at the time of the foreclosure sale, the plaintiff was not in breach of the mortgage contract. Collins v. Union Federal Sav. & Loan Ass’n, 662 P.2d 610, 623 (Nev. 1983). Here, Haley was in default on his mortgage obligations so there can be no sustainable action for wrongful foreclosure. See Doc. #1, Exhibit 1. 

Furthermore, a claim for wrongful foreclosure does not arise until the power of sale is exercised. Collins, 662 P.2d at 623. Haley filed his complaint before the property was sold. As such, his claim for wrongful foreclosure is premature and not actionable. 

Fraud

“In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.” FED. R. CIV. P. 9(b). In order meet the heightened pleading requirements a plaintiff must specify the time, place, and content of the misrepresentation as well as the names of the parties involved. See Yourish v. Cal. Amplifier, 191 F.3d 983, 993 n.10 (9th Cir. 1999); see also, Parnes v. Gateway 2000, 122 F.3d 539, 549-50 (8th Cir. 1997) (requiring a plaintiff to allege the requisite who, what, where, when, and how of the misrepresentation). Here, Haley fails to allege anything more than defendants made misrepresentations to him. These allegations are insufficient to support a claim for fraudulent misrepresentation. 

In his opposition, Haley argues that where facts are peculiarly within the defendant’s knowledge, fraud may be alleged in general terms. See Rocker v. KPMG LLP, 148 P.3d 703, 709 (Nev. 2006) (overruled on other grounds Buzz Stew, LLC v. City of N. Las Vegas, 181 P.3d 670 (Nev. 2008)). However, the information here was not solely within defendants’ knowledge. Haley was present when the alleged misrepresentations were made and documents signed. Despite his personal knowledge of the events, he has failed to allege the requisite specificity under Rule 9(b). 

Good Faith and Fair Dealing

a. Contractual Breach

Under Nevada law, “[e]very contract imposes upon each party a duty of good faith and fair dealing in its performance and execution.” A.C. Shaw Constr. v. Washoe County, 784 P.2d 9, 9 (Nev. 1989) (quoting Restatement (Second) of Contracts § 205). To establish a claim for breach of the implied covenant of good faith and fair dealing, a plaintiff must show that: (1) the plaintiff and defendant were parties to a contract; (2) the defendant owed a duty of good faith and fair dealing to the plaintiff; (3) the defendant breached his duty by performing in a manner unfaithful to the purpose of the contract; and (4) the plaintiff’s justified expectations were denied. See Perry v. Jordan, 134 P.3d 698, 702 (Nev. 2006) (citing Hilton Hotels Corp. v. Butch Lewis Prod. Inc., 808 P.2d 919, 922-23 (Nev. 1991)

Here, Haley alleges that defendants breached the implied covenant because they misrepresented the cost of credit involved in the loan agreement. However, these alleged misrepresentations occurred before a contract was formed. See Doc. #1, Exhibit 1. A party cannot breach the covenant of good faith and fair dealing before a contract is formed. See Indep. Order of Foresters v. Donald, Lufkin & Jenrette, Inc., 157 F.3d 933, 941 (2d Cir. 1998) (“an implied covenant relates only to the performance of obligations under an extant contract, and not to any pre-contract conduct”). Haley fails to allege facts to establish that a breach occurred after the contract between the parties was formed. Because Haley’s claim revolves entirely around alleged promises and misrepresentations made before the contract was entered into, it fails as a matter of law. 

b. Tortious Breach

Haley also alleges that defendants breached their duty of good faith and fair dealing as fiduciary’s in their dealings with him. Generally, a lender does not owe a borrower a fiduciary duty. See Yerington Ford, Inc. v. General Motors Acceptance Corp., 359 F.Supp.2d 1075, 1092 (D. Nev. 2004). Haley has failed to allege sufficient facts to establish that defendants acted as anything other than arms length lenders which does not, in itself, create a fiduciary relationship. 

Absent a duty, there can be no breach. See A.C. Shaw Constr. v. Washoe County, 784 P.2d 9, 10 (Nev. 1989). Accordingly, Haley’s claim for breach of a fiduciary duty fails to state a claim upon which relief can be granted. See FED. R. CIV. P. 12(b)(6). 

Racketeering

In Nevada, civil racketeering claims brought under NRS 207.400, et seq., must be plead with specificity. Hale v. Burkhardt, 764 P.2d 866, 869 (Nev. 1988). That is, the complaint must allege at least two predicate crimes related to racketeering in order to sufficiently plead a racketeering claim upon which relief can be granted. Id. 

Here, Haley merely alleges that his loan was one of many executed in violation of the Nevada state laws. From Haley’s complaint, it is unclear what these violations were and, more importantly, what the two requisite “crimes” were. The court finds that Haley has failed to sufficiently plead a claim for civil racketeering upon which relief can be granted. 

Quiet Title

Under Nevada law, a quiet title action may be brought by someone who claims an adverse interest in property. NRS 40.010. No defendant is claiming an interest in the property that is adverse to Haley. Therefore, Haley has no grounds to quiet title against the named defendants. 

Unjust Enrichment

To set forth a claim for unjust enrichment, a plaintiff must allege that a defendant unjustly retained money or property of another against fundamental principles of equity. See Asphalt Prods. Corp. v. All Star Ready Mix, 898 P.2d 699, 700 (Nev. 1995). However, an action for unjust enrichment cannot stand when there is an express written contract which guides that activities of the parties. LeasePartners Corp. v. Robert L. Brooks Trust Dated Nov. 12, 1975, 942 P.2d 182, 187 (Nev. 1997)

Here, there was a written contract between the parties, namely, the deed of trust and mortgage note. These documents guided the interactions, obligations, and rights of the parties. As such, Haley cannot make a claim in equity for actions that are guided by contract he is a party to. See LeasePartners Corp., 942 P.2d at 187-88

Declaratory Relief and Permanent Injunction

Haley’s remaining causes of action for declaratory relief and a permanent injunction are remedies that may be afforded to a party after he has sufficiently established and proven his claims. Here, all of Haley’s other claims fail to establish a claim for relief. Accordingly, Haley is not entitled to his requested remedies. 

Request to Amend

In opposition to PNC’s motion to dismiss, Haley requests leave to amend his complaint to correct any deficiencies. However, other than briefly asking for leave to amend, Haley has not established how any proposed amended pleading would address and fix the issues raised by PNC’s motion. In particular, Haley has failed to state how he could satisfy the heightened pleading standard for his fraud claims; he has not alleged, or stated he could allege, whom he allegedly spoke to, what fraudulent statements he was told, and when he was told them. 

In light of Haley’s failure to provide the court with any indicia that amendment would not result in dismissal, the court declines to exercise its discretion and shall deny Haley’s request to amend. See United States ex rel. Lee v. SmithKline Beecham, Inc., 245 F.3d 1048, 1052 (9th Cir. 2001) (courts may refuse to grant leave to amend if the amendment would be futile). Additionally, the court notes that Haley’s request is procedurally improper. Pursuant to Local Rule 15-1(a), a party requesting leave to amend a pleading shall attached the proposed pleading to the request to amend. Haley did not attach a proposed amended pleading with his opposition. Accordingly, his request is procedurally defective. 

IT IS THEREFORE ORDERED that defendant’ motion to dismiss (Doc. #5) is GRANTED. The complaint is DISMISSED as to all defendants. 

IT IS FURTHER ORDERED that defendant’s motion to expunge lis pendens (Doc. #6) is GRANTED. Defendant PNC Bank National Association shall file an appropriate order with the court expunging the lis pendens and submit the same for signature. 

IT IS FURTHER ORDERED that the clerk of court shall enter judgment appropriately. 

IT IS SO ORDERED. 

[1] Refers to the court’s docketing number. 

 

Posted in case, foreclosure fraudComments (1)


GARY DUBIN LAW OFFICES FORECLOSURE DEFENSE HAWAII and CALIFORNIA
Advertise your business on StopForeclosureFraud.com
Kenneth Eric Trent, www.ForeclosureDestroyer.com

Archives