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Tag Archive | "countrywide"

Joe Nocera: The Mortgage Fraud Fraud

Joe Nocera: The Mortgage Fraud Fraud


This isn’t about a banker going to jail, this is about a homeowner going to jail.


NYT-

I got an e-mail the other day from Richard Engle telling me that his son Charlie would be getting out of prison this month. I was happy to hear it.

Charlie’s ordeal isn’t over yet, of course. When he leaves prison on June 20, Charlie, 49, will move temporarily to a halfway house, after which he will be on probation for another five years. And unless he can get the verdict overturned, he will have to spend the rest of his life with a felony on his record.

Perhaps you remember Charlie Engle. I wrote about him not long after he entered a minimum-security facility in Beaver, W.Va., 16 months ago. He’s the poor guy who went to jail for lying on a liar loan during the housing bubble.

[NEW YORK TIMES]

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Certification battle in Ohio MERS class action heats up

Certification battle in Ohio MERS class action heats up


Lexology-

On April 23, 2012, the plaintiff in State of Ohio ex rel. David P. Joyce, Prosecuting Attorney of Geauga County Ohio v. MERSCORP, Inc., et al., N.D. Ohio Case No. 1:11-cv-02474, filed its motion seeking an order certifying the action as a class action, appointing Geauga County as class representative, and appointing plaintiff’s counsel, the New York law firm of Bernstein Liebhard LLP, as class counsel. The plaintiff argues that the case, which the plaintiff is attempting to bring on behalf of all 88 Ohio counties for relief relating to the allegedly unlawful failure of MERS and its member institutions to record millions of mortgages and mortgage assignments throughout Ohio, meets all requirements of Rule 23(a) and that certification is proper under any one of the 3 subsections of Rule 23(b). The plaintiff hopes to persuade the court that the MERS/member institution policy concerning recordation of mortgages and assignments is a “common scheme or course of conduct” that has given rise to claims “ideally suited for class certification.”

[LEXOLOGY]

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Fannie Refused to Punish Countrywide for Bad Debt, Lockhart Says

Fannie Refused to Punish Countrywide for Bad Debt, Lockhart Says


Hmmmm- Lets see why Fannie refused to? We can maybe name a few dozen since they most likely were in cahoots over the Nothing-Backed Securities.

If there were any punishments happening, there would also be cats coming out the bag from both.

Bloomberg-

Fannie Mae refused to seek large amounts of mortgage repurchases from Countrywide Financial Corp. as housing began to crash, according to the former head of its regulator.

James Lockhart, who led the Federal Housing Finance Agency until 2009 and its predecessor, the Office of Federal Housing Enterprise Oversight, “spent a lot of time” pushing Fannie Mae executives to seek more so-called putbacks on Countrywide loans that failed to match their promised quality, he said today.

“They didn’t want to offend their largest customer,” Lockhart, now the vice chairman at investment firm WL Ross & Co., said during a speech at a Mortgage Bankers Association conference in New York.

[BLOOMBERG]

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Alison Frankel: How BofA could lose big if it wins MBIA regulatory challenge

Alison Frankel: How BofA could lose big if it wins MBIA regulatory challenge


Alison Frankel’s On The Case-

I’ve spent a lot of time talking about what I consider Bank of America’s risky gamesmanship in its multi-pronged litigation with the bond insurer MBIA, but it may be that I’ve underestimated that risk by focusing on the downside for the bank in MBIA’s breach of contract and fraud suit. Under a not-implausible scenario, BofA faces serious risk in its regulatory challenge to MBIA’s transformation that’s going to trial on May 14. And ironically, the risk comes not from losing the case — but from winning it.

According to a sophisticated and well-advised MBIA institutional investor that has devoted serious resources to analyzing the issue — trust me, even though the investor doesn’t want to broadcast its involvement, this is a seriously savvy player — if Bank of America and two French banks succeed in overturning MBIA’s 2009 split into separate muni bond and structured finance businesses, there’s a reasonable likelihood that BofA could wind up at the back of the line of MBIA claimants, waiting years for whatever scraps are left over from payouts to municipal bond insurance policyholders.

Here’s why. For all sorts of reasons…

[REUTERS ON THE CASE]

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Eileen Foster, Former Countrywide Executive, Calls For Investigation Into Cover-Ups

Eileen Foster, Former Countrywide Executive, Calls For Investigation Into Cover-Ups


HuffPO-

A whistleblower who exposed systemic fraud by Countrywide mortgage lenders called on the Department of Justice on Wednesday to prosecute her former colleagues, if not with fraud, then with covering it up.

“If there is insufficient legal evidence to convict these executives of what we believe are obvious crimes, then the federal government should refocus,” Eileen Foster, a former Countrywide fraud investigations chief, told an audience at the National Press Club gathered to honor her and five others for their truth-telling.

“Overwhelming evidence of perjury, witness tampering and obstruction of justice exist in the numerous claims, court filings and trial and investigative transcripts,” Foster said. She herself was fired after reporting that falsified income documentation and faked signatures had been used to steer borrowers into bad mortgages.

[HUFFINGTON POST]

image: iWatchnews.org

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Alison Frankel: Will 2nd Circuit remake AIG’s MBS case against BofA?

Alison Frankel: Will 2nd Circuit remake AIG’s MBS case against BofA?


REUTERS LEGAL-

Mortgage-backed securities litigation has been very good for some of the most obscure laws on the books. I’ve already mentioned the starring role the unheralded statute of repose has taken in bank motions to dismiss securities claims by MBS investors, and we all know about Bank of America’s ingenious (or nefarious, depending on your perspective) use of New York’s Article 77 — a proceeding so rarely invoked that the judge assigned the case had to look it up — to seek approval of its proposed $8.5 billion settlement with investors in Countrywide mortgage-backed notes. Today I bring you the Edge Act, a hundred-year-old law that grants federal-court jurisdiction to civil suits against any U.S corporation in which claims arise from international banking or banking transactions in a U.S. territory.

You’re probably wondering what the Edge Act has to do with U.S. MBS trusts in which securities are backed by U.S.-issued mortgages on properties in the United States. Well, it turns out that a handful of the mortgages backing BofA securities actually originated in the Virgin Islands and Guam. We are talking about a very small handful. According to a brief AIG submitted to the 2nd Circuit Court of Appeals, of the 1.7 million mortgages underlying the 349 MBS trusts at issue in AIG’s $10 billion case against Bank of America, exactly 8 mortgages in 3 trusts originated in U.S. territories.

[REUTERS ON THE CASE]

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Israeli Bank Hapoalim sues Bank of America, Merrill Lynch and Countrywide for $720M

Israeli Bank Hapoalim sues Bank of America, Merrill Lynch and Countrywide for $720M


Haaretz-

Bank Hapoalim has filed a massive $720 million suit against Bank of America, Merrill Lynch and Countrywide over its losses in the U.S. subprime crisis, alleging that the U.S. institutions misled and defrauded it.

Among Israel’s financial institutions, Hapoalim suffered the worst losses in the subprime crisis due to its investments in mortgage-backed securities.

Between 2005 and 2007, the bank, led by Shlomo Nehama and Zvi Ziv, snapped up mortgage-backed securities in an attempt to meet its goal of a 15% return on equity by 2007.

[HAARETZ]

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Alison Frankel: NY AG’s curious new bid to intervene in $8.5 bl BofA MBS deal

Alison Frankel: NY AG’s curious new bid to intervene in $8.5 bl BofA MBS deal


Reuters Legal-

New York Attorney General Eric Schneiderman still wants a say in whether Bank of America’s proposed $8.5 billion settlement with Countrywide mortgage-backed securities investors should be approved by a state-court judge. The AG’s new intervention motion, filed more than seven months after Schneiderman first moved to join the case, makes the exact same arguments as the old motion, which was pending before New York State Supreme Court Justice Barbara Kapnick when the settlement was removed from state court to Manhattan federal court last August. There’s just one notable exception: The AG’s office “deleted” its explosive fraud counterclaims against Countrywide MBS trustee Bank of New York Mellon. Is playing nice (or, at least, nicer) enough to win the AG a seat at the table?

Those fraud counterclaims, as you’ll surely recall, caused quite a stir when Schneiderman’s office tacked them onto its original motion to intervene. One Manhattan business development official questioned the wisdom of attacking a trustee that was at least making an effort to respond to investors’ concerns and warned that the AG was endangering the city’s standing as the preferred home of financial institutions. BNY Mellon and the institutional investors backing the proposed $8.5 billion settlement responded in kind to the AG’s intervention motion, asserting that Scheiderman didn’t have standing to intervene because he’s not a Countrywide MBS investor.

[REUTER’S ON THE CASE]

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NY pushes objection to BofA $8.5 billion mortgage pact

NY pushes objection to BofA $8.5 billion mortgage pact


Reuters-

Bank of America Corp’s proposed $8.5 billion mortgage bond settlement received fresh opposition on Tuesday from New York’s attorney general, who said the accord appears unfair to investors who may deserve to recover more.

Eric Schneiderman, the attorney general, filed papers on Tuesday asking a New York State Supreme Court justice for permission to intervene.

He had made the same request last August before the case moved to federal court. It returned to the state court in February.

The settlement announced last June arose from Charlotte, North Carolina-based Bank of America’s 2008 purchase of Countrywide Financial Corp, once the nation’s largest mortgage lender.

[REUTERS]

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Latest NY appeals ruling is bad news for BofA in monoline cases

Latest NY appeals ruling is bad news for BofA in monoline cases


Alison Frankel-

Ordinarily, there’s not much reason to get excited about a state intermediate appeals court upholding a procedural ruling by a trial court judge. But in the litigation between bond insurers and mortgage-backed securities issuers, decisions are not only magnified by the tens of billions of dollars at stake, but also by the paucity of precedent. Almost every ruling is groundbreaking, which means that decisions have an impact far beyond a single case.

With that in mind, there are two reasons why a ruling Thursday by the New York Appellate Division, First Department, is a setback for Bank of America: timing and authority.

Without much comment, the state appeals court affirmed two rulings by New York State Supreme Court Justice Eileen Bransten, who last fall denied motions by Bank of America to sever and consolidate successor liability claims against the bank in four bond insurer cases against Countrywide. “The court properly exercised its discretion in denying defendant’s motion to sever plaintiffs’ successor liability claims from the primary claims and to consolidate them, for purposes of discovery, in a single action,” the appellate decision said. “The successor liability actions are at completely different stages of discovery, and consolidation would result in undue delay.”

[REUTERS ON THE CASE]

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Ambac v Countrywide | NY App Div., 1st Dept. “denying defendant’s motion to sever plaintiffs’ successor liability claims”

Ambac v Countrywide | NY App Div., 1st Dept. “denying defendant’s motion to sever plaintiffs’ successor liability claims”


Decided on April 5, 2012
Gonzalez, P.J., Tom, Catterson, Renwick, Richter, JJ. 7286N- 7287N- 7288N- 7289N & M-664- M-665-
651612/10 602825/08 650736/09 650042/09 -745

[*1]Ambac Assurance Corp., et al., Plaintiffs-Respondents,

v

Countrywide Home Loans, Inc., et al., Defendants, Bank of America Corp., Defendant-Appellant.

MBIA Insurance Corporation, Plaintiff-Respondent,

v

Countrywide Home Loans, Inc.,et al., Defendants, Bank of America Corp., Defendant-Appellant.

Financial Guaranty Insurance Co., Plaintiff-Respondent,

v

Countrywide Home Loans, Inc.,et al., Defendants, Bank of America Corp., Defendant-Appellant.

Syncora Guarantee, Inc., Plaintiff-Respondent,

v

Countrywide Home Loans, Inc.,et al., Defendants, Bank of America Corp., Defendant-Appellant.

O’Melveny & Myers LLP, New York (Jonathan Rosenberg of
counsel), for appellant.
Patterson Belknap Webb & Tyler LLP, New York (Robert P.
LoBue of counsel), for Ambac Assurance Corp. and The
Segregated Account of Ambac Assurance Corporation, respondents.
Quinn Emanuel Urquhart & Sullivan, LLP, New York (Peter
E. Calamari of counsel), for MBIA Insurance Corporation,
respondent.
Kutak Rock LLP, New York (Robert A. Jaffe of counsel), for
Financial Guaranty Insurance Co., respondent.
Allegaert Berger & Vogel LLP, New York (David A. Berger of
counsel), for Syncora Guarantee, Inc., respondent.

Orders, Supreme Court, New York County (Eileen Bransten, J.), entered October 31, 2011 and November 2, 2011, which, among other things, denied defendant Bank of America Corp.’s motions to sever and consolidate plaintiffs’ successor liability claims for purposes of discovery, and held in abeyance defendant’s motion to consolidate the successor liability claims for purposes of trial, unanimously affirmed, with costs.

This is a consolidated appeal involving four related but separate claims by monoline insurers for primary liability against the Countrywide defendants in connection with financial guarantee insurance covering mortgage-backed securities. The actions also involve successor liability against defendant Bank of America. The court properly exercised its discretion in denying defendant’s motion to sever plaintiffs’ successor liability claims from the primary claims and to consolidate them, for purposes of discovery, in a single action. The successor liability actions are at completely different stages of
discovery, and consolidation would result in undue delay (see Barnes v Cathers & Dembrosky, 5 AD3d 122 [2004]).

M-664 -Syncora Guarantee Inc. v Countrywide Home Loans, Inc., et al. and Bank of America Corp.

M-665 -MBIA Insurance Corporation v Countrywide Home Loans, Inc., et al. and Bank of America Corp.

M-745 -MBIA Insurance Corporation, et al. v Countrywide Home Loans, Inc., [*2]et al. and Bank of America Corp.

Motions to supplement the record on appeal (M-664, M-665) granted; cross motion to strike the supplemental record and reply brief, or for leave to supplement the record in the event the motion (M-665) is granted (M-745), granted to the extent of granting leave to supplement the record.

THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: APRIL 5, 2012

CLERK

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Does Pauley’s BNYM ruling spell new liability for MBS trustees?

Does Pauley’s BNYM ruling spell new liability for MBS trustees?


Alison Frankel-

Beth Kaswan of Scott + Scott has the fervor of a pioneer when she talks about the implications of U.S. District Judge William Pauley‘s ruling Tuesday that her client, a Chicago police officers’ pension fund, can proceed with some claims that Bank of New York Mellon violated its duty to Countrywide mortgage-backed securities investors under the federal Trust Indenture Act. “Judge Pauley is the first judge to say the Trust Indenture Act, in existence since 1939, does apply in this type of circumstance to mortgage-backed securities,” Kaswan told me Wednesday. “That means investors can sue trustees, even if they can’t cobble together 25 percent” of the voting rights in any particular trust — a prerequisite to suing under the pooling and servicing agreements governing most MBS trusts.

Kaswan, who said her firm was the first to assert the federal law against an MBS trustee, believes Pauley’s 19-page decision offers a significant new route to damages for MBS investors. The Manhattan federal judge ruled that the Chicago fund only has standing to bring claims for the trusts in which it invested, reducing the number of Countrywide MBS trusts in the case from 530 to 26. But he also said that investors in those 26 trusts can sue BNY Mellon for allegedly failing to notify certificateholders that Countrywide and Bank of America supposedly breached their obligations to the trusts and for failing to take action on those breaches.

[ON THE CASE -REUTERS]

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Bank of NY Mellon must face lawsuit on Countrywide

Bank of NY Mellon must face lawsuit on Countrywide


first to let investors in mortgage-backed securities pursue claims against a trustee under the 1939 federal Trust Indenture Act.

Reuters-

A federal judge rejected Bank of New York Mellon Corp’s bid to dismiss a lawsuit by investors over its role as trustee for mortgage-backed securities that led to an $8.5 billion settlement by Bank of America Corp.

U.S. District Judge William Pauley in Manhattan said on Tuesday that bondholders who invested in 26 trusts alleged to have contained risky mortgage loans from the former Countrywide Financial Corp may pursue claims against Bank of New York Mellon. He dismissed a variety of other claims.

[REUTERS]

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Alison Frankel: Why NY businesses should worry about BofA’s new MBS defense

Alison Frankel: Why NY businesses should worry about BofA’s new MBS defense


Reuters Legal-

U.S. District Judge Mariana Pfaelzer of federal court in Los Angeles is poised to deliver a ruling in AIG’s mortgage-backed securities case against Countrywide that could have an impact on just about every company headquartered in New York. The issue: How long do N.Y. businesses have to bring fraud claims? Are they entitled to the benefit of the state’s generous six-year statute of limitations? Or, as Countrywide argues in a supplemental motion to dismiss filed on March 23, are companies headquartered in New York instead restricted to the generally stingier time limits in their states of incorporation?

To understand how this question arose in AIG’s MBS case, we have to back up a few steps. It’s no secret that in MBS litigation, there’s no more potent defense than arguments that investors waited too long to file suit. It’s a quick, clean way to excise big chunks of a plaintiff’s case, particularly because federal securities claims, with exceptions for American Pipe tolling (if you don’t know, don’t ask), are generally time-barred after three years under the statute of limitations or the more-obscure-until-MBS-litigation statute of repose. That’s why we’ve seen so many MBS plaintiffs — including AIG and the satellite insurance companies that are also plaintiffs in its Countrywide suit — assert state-law fraud claims in addition to federal securities claims.

[ON THE CASE REUTERS]

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Big news in BofA MBS litig: Kapnick tosses Walnut vs Counrtywide case

Big news in BofA MBS litig: Kapnick tosses Walnut vs Counrtywide case


Alison Frankel via Reuters Legal/ On the Case is working on this story.

Please check back.

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Countrywide Home Loans vs America’s Wholesale Lender | California Western Dist. Court – “Trademark™ Infringement”

Countrywide Home Loans vs America’s Wholesale Lender | California Western Dist. Court – “Trademark™ Infringement”


UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
WESTERN DIVISION

COUNTRYWIDE HOME LOANS, INC.;
BANK OF AMERICA CORPORATION;
BANK OF AMERICA, N.A.,

Plaintiffs,

v.

AMERICA’S WHOLESALE LENDER, INC., a
New York Corporation…

Defendants

Excerpt:

Plaintiff Countrywide Home Loans, Inc. (“CHLI”) will arguably go down in history as the most prolific predatory lenders of all time. One would think this is a matter beyond reasonable dispute by way of a few examples, this point will be illustrated:

PDF LINK BELOW

[AWL v Countrywide]

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BOURFF vs. RUBIN LUBLIN, LLC | GA 11th Cir. Appeals Court “The identity of the “creditor” in these notices is a serious matter, FDCPA”

BOURFF vs. RUBIN LUBLIN, LLC | GA 11th Cir. Appeals Court “The identity of the “creditor” in these notices is a serious matter, FDCPA”


IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT

________________________
No. 10-14618
________________________
D.C. Docket No. 1:09-cv-02437-JEC

MICHAEL BOURFF,
Plaintiff – Appellant,

versus

RUBIN LUBLIN, LLC,
Defendant – Appellee.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
________________________
(March 15, 2012)

Before EDMONDSON and PRYOR, Circuit Judges, and BOWDRE,* District
Judge.
*

PER CURIAM:
This appeal involves a Fair Dept Collection Practices Act claim in which a
“false representation” has been alleged. Michael Bourff appeals the district
court’s dismissal of his civil action under 15 U.S.C. §1692, the Fair Debt
Collection Practices Act (“FDCPA”), for failure to state a claim. The district court
concluded that Bourff’s claim was covered by the FDCPA but that Bourff did not
allege acts that violated the FDCPA. We vacate the dismissal and remand the case
for further proceedings.

Background

This case involves a $195,000 loan by America’s Wholesale Lender
(“AWL”) to Michael Bourff. The loan was evidenced by a note, was used to
purchase property in Fulton County, Georgia, and was secured by a deed to the
property purchased.1

The basics of this case are not in dispute. In April 2009 Bourff failed to
make a payment on the loan and caused default under the terms of the note. AWL
later assigned the loan and the security deed to BAC Home Loan Servicing, LP
f/k/a Countrywide Home Loans Servicing, LP (“BAC”) for the purpose of
collecting on the note. BAC in turn hired defendant law firm, Rubin Lublin, LLC
(“Rubin Lublin”), to assist in collection efforts. In late May 2009 Rubin Lublin
sent a notice to Bourff stating that they had been retained to help collect on the
loan. The notice clearly stated that it was being sent as “NOTICE PURSUANT
TO FAIR DEBT COLLECTION PRACTICES ACT 15 U.S.C. § 1692[,]” and that
it was “AN ATTEMPT TO COLLECT A DEBT.” The notice also identified BAC
as “the creditor on the above-referenced loan.” (Compl. Ex. A.)

Shortly after receiving the notice, Bourff filed this civil action against Rubin
Lublin pursuant to the FDCPA. Bourff claimed that the notice sent by Rubin
Lublin violated §1692e of the FDCPA by falsely representing that BAC was the
“creditor” on the loan, despite entities in BAC’s position being specifically
excluded from the definition of “creditor” by the language of the FDCPA. Rubin
Lublin filed a motion to dismiss under Rule 12(b)(6), and the district court
dismissed the action for failure to state a claim under the FDCPA. The district
court concluded that BAC was a “creditor” according to the ordinary meaning of
the term and that, even if BAC was no creditor, the error in listing it as such was a
harmless mistake in the use of the term because BAC had the power to foreclose
on the property or otherwise to act as the creditor on the loan. (Order 11.)

Standard of Review

We review the grant of a motion to dismiss de novo; and in so doing, we
accept the allegations in the complaint as true while construing them in the light
most favorable to the Plaintiff. Powell v. Thomas, 643 F.3d 1300, 1302 (11th Cir.
2011). The interpretation of a statute is likewise reviewed de novo as a purely
legal matter. Belanger v. Salvation Army, 556 F.3d 1153, 1155 (11th Cir. 2009).
A “complaint must contain sufficient factual matter, accepted as true, to
‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 129 S.Ct.
1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955, 1974
(2007)). Stating a plausible claim for relief requires pleading “factual content that
allows the court to draw the reasonable inference that the defendant is liable for
the misconduct alleged”: which means “more than a sheer possibility that a
defendant has acted unlawfully.” Id.

DISCUSSION

The FDCPA limits what is acceptable in attempting debt collection. The
FDCPA applies to the notice here in question because the notice was an attempt at
debt collection. The notice stated that Rubin Lublin had been retained to “collect
the loan,” stated in bold capital letters that it was “an attempt to collect a debt,”
and advised Bourff to contact Rubin Lublin to “find out the total current amount
needed to either bring your loan current or to pay off your loan in full.” (Compl.
Ex. A.)

The FDCPA, among other things, mandates that, as part of noticing a debt, a
“debt collector” must “send the consumer a written notice containing” — along
with other information — “the name of the creditor to whom the debt is owed[.]”
15 U.S.C. §1692g(a)(2). In addition, the Act prohibits a “debt collector” from
using “any false, deceptive, or misleading representation or means in connection
with the collection of any debt.” 15 U.S.C. §1692e. The use of “or” in §1692e
means that, to violate the FDCPA, a representation by a “debt collector” must
merely be false, or deceptive, or misleading. A false representation in connection
with the collection of a debt is sufficient to violate the FDCPA facially, even
where no misleading or deception is claimed.

Plaintiff claims that Rubin Lublin violated the prohibition on “false,
deceptive, or misleading representation[s]” by falsely stating in its collection
notice that BAC was the “creditor” on Bourff’s loan. The identity of the
“creditor” in these notices is a serious matter. For the FDCPA, “creditor” is
defined this way:

“The term ‘creditor’ means any person who offers or extends credit
creating a debt or to whom a debt is owed, but such term does not include
any person to the extent that he receives an assignment or transfer of a debt
in default solely for the purpose of facilitating collection of such debt for
another.” 15 U.S.C. §1692a(4).

Plaintiff’s complaint alleges that Bourff defaulted on the loan in April 2009
by failing to tender the required monthly payment. The complaint further alleges
that BAC “received an assignment of the security deed and debt on June 19, 2009 .
. ., while the Plaintiff’s loan was in default, for the purpose of facilitating
collection of such debt for another, presently unknown, entity.” (Compl. ¶13)
Accepting Plaintiff’s allegations as true and construing them in the light most
favorable to the Plaintiff, the statement on the May 2009 notice that BAC was
Plaintiff’s “creditor” was a false representation and was made by a “debt collector”
as defined in §1692a of the FDCPA.

The FDCPA provides that “any debt collector who fails to comply with any
provision of this subchapter with respect to any person is liable to such person…”
for potential damages and costs. 15 U.S.C. §1692k(a). The complaint on its face,
taken as true and viewed in the light most favorable to Plaintiff, states a claim
upon which relief may be granted under the FDCPA. As such, we vacate the
dismissal and remand this case to the district court for further proceedings.

VACATED and REMANDED.

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Full Deposition of Michele Sjolander, Executive Vice President of Countrywide Home Loans, Inc. “Stamp Endorsement”

Full Deposition of Michele Sjolander, Executive Vice President of Countrywide Home Loans, Inc. “Stamp Endorsement”


Remember Michele Sjolander? Well, you can read about her in MERS, Endorsed Note Get SLAMMED by Kings County NY Supreme Court | BANK of NEW YORK v. ALDERAZI -

As well as in ARIZONA BK COURT ORDERS BONY MELLON TO PRODUCE ORIGINAL CUSTODIAN DOCUMENTS

and finally in the FULL DEPOSITION OF BANK OF AMERICA ROBO SIGNER RENEE D. HERTZLER

Fresh off the depo wagon comes her Full Deposition courtesy of 4closurefraud.

Excerpts:

Q It’s employees at Recontrust that stamp the
7 endorsements on the notes in general, including this one;
8 is that right?
9 A Yes.
10 Q And you’ve seen that taking place?
11 A Yes.
12 Q In Simi Valley?
13 A Yes.
14 Q Is there some type of manual or set of
15 instructions?
16 A They have my power of attorney.
17 Q Well, okay. That’s not what I’m asking. But I
18 do want to know about that. But what I’m saying: Is
19 there some sort of manual or instructions or –
20 A If you want to know the desk procedures, you
21 would have to speak with an associate of Recontrust.
22 Q Okay. Okay. Sorry. I’m just reading the notes
23 again. Now, I’m going to try to explain this. I may
24 have to do it a couple of times, but just bear with me.
25 And you’ve been very helpful so far. I appreciate it,
1 there it sat is I guess what I’m asking.
2 A In safekeeping, yes.
3 Q Okay. All right. Now, this is something you
4 touched on a minute ago. I’m going to try to phrase it
5 in a way that makes sense. Who — and let’s just deal
6 with Countrywide in 2007.
7 Who is allowed to be an endorser as you were? I
8 mean, who — let me leave it at that and see if that
9 makes sense to you.
10 A I don’t know what you’re asking.
11 Q What I’m saying is: Are there people other than
12 you at Countrywide in 2007 whose names would appear on a
13 note as an endorsement?
14 A For Countrywide Home Loans, Inc.?
15 Q Yes.
16 A In 2007, I was the endorser for Countrywide Home
17 Loans, Inc.
18 Q Okay. And, I mean, can you explain why you, in
19 particular? I mean, how is that established?
20 A Just lucky.
21 Q I mean, I know this is going to sound silly, but
22 was there some competition for it? Did they come to you
23 and say, “Ms. Sjolander, we choose you?” I mean, how did
24 you come to be designated the person?
25 A It is the position I held within Countrywide.
1 Q Okay. And did you know that going in; you know,
2 if you take this job, you’re going to be the endorser?
3 Was that explained to you at some point?
4 A I knew that my previous boss was the endorser,
5 yes.
6 Q Oh, okay. Now, we covered this, that other
7 people stamped your signature and the other — her name
8 is — oh, it’s Laurie Meder?
9 A Meder.
10 Q Okay. So other people have a stamp with her
11 name and your name on it, and how do those people have
12 the authority to put her name and your name on a note for
13 it to be an effective endorsement?
14 A With my name, they have a power of attorney.
15 Q And what does the power of attorney say?
16 A The power of attorney allows them to place my
17 endorsement stamp on collateral.
18 Q How do they come to have your power of attorney?
19 A I gave that to them.
20 Q But, I mean, in what sort of process? You know,
21 how does someone at Recontrust — I mean, I understand
22 that a power of attorney document exists, I’m assuming;
23 correct?
24 A Yes.
25 Q And how do those people come to operate under
1 it?
2 A It’s common, standard practice.
3 Q I may not be asking it quite right. I guess
4 what I’m asking is: Do they — the people who actually
5 use the stamps — is there more than one, or is there
6 just one stamp? I said “stamps” multiple. Is there only
7 one, or is there –
8 A No, there’s multiple stamps.
9 Q So do these people sign something that says, “I
10 understand I’m under Michele Sjolander’s power of
11 attorney”?
12 A Once again, you would have to look at the desk
13 procedures for Recontrust, and you would have to talk to
14 someone at Recontrust.
15 Q So that’s your understanding that you — did you
16 sign a power of attorney document?
17 A Yes, I did.
18 Q And, I mean, can you explain just in — you
19 know, in general, not word for word what it says, but
20 what does it purport to grant as power of attorney?
21 A It grants Recontrust. They can endorse and
22 assign notes on behalf of myself.
23 Q And do you know if this applies to a select
24 group of people?
25 A I do not have — I would have to read the
1 document.
2 Q Okay. But just to clarify, once again, you
3 don’t actually know the legal mechanism by which these
4 people with the stamps operate under this power of
5 attorney?
6 A As I said, I would have to go back through all
7 of the documentation that surrounds the power of
8 attorney, and Recontrust has desk procedures, and it
9 would be their procedures for them to assign that, to
10 place the stamp on the collateral.
11 Q And this was a procedure in 2007, what we’re
12 talking here is 2007?
13 A Correct.
14 Q And to the present?
15 A No.

<SNIP>

4 Q All of it, okay. Let’s see. Now, you mentioned
5 documents that you had reviewed. The AS-400, that’s a –
6 can you just refresh my memory? What was that again?
7 A A servicing system.
8 Q A servicing system, okay. Now, when you looked
9 over these records and documents before that you
10 mentioned before, where were you when you looked at
11 those?
12 A Simi Valley.
13 Q Simi Valley. And where were the documents that
14 you were looking at?
15 A At that time, they were brought into my office.
16 Q Do you have any idea where they were brought
17 from?
18 A They were printed off the system.
19 Q Printed off the system.
20 A From one of my associates.
21 Q Is that a computer system?
22 A As I said, the collateral tracking is printed
23 off the AS-400, which is our servicing system. The
24 investor number commitment was printed off — it’s a
25 web-based application from secondary marketing. It’s
1 printed off of that. The note was printed off of our
2 imaging system. And I think in this case I asked for a
3 copy of the note showing the endorsements, because in our
4 imaging system it does not — the note is actually imaged
5 prior to my endorsement stamp being in place. So I had
6 my associate contact the bank, which is Recontrust, to
7 get a copy of the original note to show my endorsement
8 stamps, because in imaging it is not shown.
9 Q So if a copy is made of a note that you got from
10 Recontrust, it doesn’t have an endorsement? Is that what
11 you’re saying?
12 A From our bank, it does. In our imaging system,
13 it does not. The note is imaged prior to an
14 endorsement — in ’07, the note is imaged prior to an
15 endorsement being placed on the note. So if you look in
16 our imaging system, you wouldn’t see the chain of title
17 of endorsement.
18 Q And where would you see that?
19 A On the original note.
20 Q Which is — which is where?
21 A In this case, it was in the Fannie Mae vault in
22 Simi Valley, California.
23 Q We’ll come back to the Fannie Mae vault. Okay.
24 So they’re printed off in AS-400 imaging system.
25 A AS-400 and the imaging system are two different
systems.
2 Q Oh, you said AS-400 is a servicing software
3 platform of some type?
4 A Yes.
5 Q And the imaging system, what — can you describe
6 that?
7 A It’s a –
8 Q You know –
9 A It’s when all of the collateral documents and
10 credit file documents are imaged after the closing of a
11 loan, and they are put in our imaging system, and we can
12 go into the system by loan number and pull up the
13 documentation of a loan –
14 Q I guess –
15 A — if you have access to the system.
16 Q But imaging, I mean, I’m imagining a scanner of
17 some sort. Is that what it is?
18 A It is not my area. I cannot tell you.

continue below…

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YVES SMITH: The Legal Lie at the Heart of the $8.5 Billion Bank of America and Federal/State Mortgage Settlements

YVES SMITH: The Legal Lie at the Heart of the $8.5 Billion Bank of America and Federal/State Mortgage Settlements


H/T Abigail – If you had any doubts about whether ‘your’ federal gov’t works for you or BofA, read Yves Smith’s latest:

One in a while, you can discern a linchpin lie on which other important lies hinge. We can point to quite a few in America: the notion of a permanent war on terror, which somehow justifies vitiating not just the Constitution, but even the Magna Carta, or the idea of an imperial executive branch.

Now the apparently-to-be-filed-in-court-today Federal/state attorneys general mortgage settlement is less consequential than matters of life and limb. But it still show the lengths to which the officialdom is willing to go to vitiate the law in order to get its way.

HUD Secretary Donovan, the propagandist in chief for the Federal/state mortgage pact, has claimed he has investor approval to do the mortgage modifications that are a significant portion of the value of the settlement. We’ll eventually see what is actually in the settlement, but the early PR was that “no less than $10 billion” of the $25 billion headline total was to come from principal reductions. Modifications of mortgages not owned by banks, meaning in securitized trusts, are counted only 50% and before Donovan realized he was committing a faux pas, he said he expected 85% of the mods to be from securitizations, so that means $17 billion.

[NAKED CAPITALISM]

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Court sides with Nevada in BoA foreclosure case

Court sides with Nevada in BoA foreclosure case


REUTERS-

A federal appeals court on Friday granted Nevada’s request to send its lawsuit alleging mortgage modification and foreclosure abuses against Bank of America Corp back to Nevada state court.

The 9th U.S. Circuit Court of Appeals reversed a decision by a lower court, which had concluded that the lawsuit belonged in federal court.

Nevada’s complaint, filed in Clark County, Nevada, in January 2011, alleges that Bank of America misled consumers about the terms of its home mortgage modification and foreclosure processes.

Nevada also accused the bank of violating terms of a consent judgment it and several of its subsidiaries had entered into with the state in February 2009.

After Bank of America removed the lawsuit to federal court, Nevada’s request to send it back to state court was denied.

Chief Judge Robert Clive Jones of the District of Nevada ruled that the lawsuit belonged in his court because the lawsuit was a class action, which gives federal courts jurisdiction.

[REUTERS]

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BANK OF NEW YORK v. Cupo | NJ Appellate Div. “plaintiff here does not have standing as an assignee to prosecute this foreclosure action”

BANK OF NEW YORK v. Cupo | NJ Appellate Div. “plaintiff here does not have standing as an assignee to prosecute this foreclosure action”


BANK OF NEW YORK AS TRUSTEE FOR THE CERTIFICATE HOLDERS CWABS, INC., ASSET-BACKED CERTIFICATES, SERIES 2006-23, Plaintiff-Respondent,
v.
ALEXANDER T.J. CUPO, Defendant-Appellant,
MRS. ALEXANDER T.J. CUPO, WIFE OF ALEXANDER T.J. CUPO AND CITIBANK SOUTH DAKOTA N.A., Defendants.

No. A-1212-10T2.
Superior Court of New Jersey, Appellate Division.

Argued October 5, 2011.
Decided February 28, 2012.
Gerald J. Monahan argued the cause for appellant.

Kristina G. Murtha argued the cause for respondent.

Before Judges Fuentes, Graves and Koblitz.

NOT FOR PUBLICATION

PER CURIAM.

In this mortgage foreclosure action, defendant Alexander Cupo appeals from the decision of the Chancery Division, General Equity Part, denying his motion to vacate default judgment and dismiss the complaint filed by plaintiff Bank of New York, as Trustees for the Certificate-Holders CWABS, Inc., Asset-Banked Certificates, Series 2006-23. Defendant argues that the trial court erred when it denied his motion because: (1) plaintiff did not have physical possession of the promissory note at the time it filed its complaint for foreclosure; (2) plaintiff did not have standing to prosecute the foreclosure because the original lender, Countrywide Home Loans, assigned the promissory note and mortgage to plaintiff thirty-nine days after the complaint was filed; and (3) both plaintiff and its assignor Countrywide Home Loans failed to satisfy the requirements under N.J.S.A. 2A:50-56.

After reviewing the record before us, we reverse and remand this matter to the General Equity Part for a hearing to determine whether plaintiff has standing to file the complaint. As we made clear in Deutsche Bank Nat’l Trust Co. v. Mitchell, 422 N.J. Super. 214, 224 (App. Div. 2011), a foreclosing mortgagee must demonstrate that it had the legal authority to enforce the promissory note at the time it filed the original complaint for foreclosure. As correctly noted by defendant here, the record shows that the original lender, Countrywide Home Loans, assigned the promissory note and mortgage to plaintiff on May 10, 2007, thirty-nine days after the complaint was filed.

The following facts will inform our analysis of the issues raised by the parties.

I

On December 22, 2006, defendant signed a promissory note to Countrywide Home Loans, Inc., memorializing a $245,000 loan. To secure payment of the note, defendant executed a mortgage to Mortgage Electronic Registration Systems, Inc. (MERS), acting solely as a nominee for Countrywide Home Loans, Inc. The mortgage was recorded on January 11, 2007. Defendant failed to make the first payment on the loan that was due on February 1, 2007. In fact, to date, defendant has not made any payments on the loan. Pursuant to the terms of the loan, defendant defaulted on March 1, 2007. Countrywide mailed defendant a notice of intent to foreclose dated March 5, 2007.

On May 10, 2007, plaintiff Bank of New York filed a complaint in foreclosure, seeking to sell the mortgaged lands to satisfy the amount due. The complaint indicated that “[b]y assignment of mortgage, Mortgage Electronic Registration Systems, Inc., acting solely as a nominee for Countrywide Home Loans, Inc. assigned its mortgage to Bank of New York as Trustee for the Certificateholders CWABS, Inc., Asset-Backed Certificates, Series 2006-03 which assignment has been sent for recording in the office of the clerk of Hudson County.” Plaintiff served the summons and complaint on defendant on June 14, 2007.

The record shows that MERS assigned its mortgage to Bank of New York as Trustee for the Certificateholders CWABS, Inc., Asset-Backed Certificates, Series 2006-23, on June 19, 2007. The assignment was recorded on July 5, 2007. Plaintiff filed a request to enter default against defendant on August 20, 2007. Plaintiff mailed a notice of intent to enter final judgment on August 29, 2007. In this light, the matter was deemed uncontested and the court entered final judgment by default on November 15, 2007.

Despite the entry of final judgment, plaintiff and defendant continued to discuss a possible settlement of the suit. Sheriff sales were postponed a number of times during these negotiations.[1] The parties eventually proceeded to mediation. After two sessions, the parties reached an apparent impasse. Although a third session was scheduled for September 28, 2010,[2] defendant moved to vacate the default judgment and dismiss plaintiff’s complaint on August 26, 2010, arguing that plaintiff lacked standing to prosecute the foreclosure action, and failed to comply with the notice requirements in N.J.S.A. 2A:50-56. Plaintiff argued that defendant had not established excusable neglect nor raised a meritorious defense. The trial court denied defendant’s motion to vacate the default judgment as well as his subsequent motion for reconsideration.

II

We start our analysis by reaffirming certain bedrock principles of appellate review. The decision to vacate a judgment lies within the sound discretion of the trial court, guided by principles of equity. Hous. Auth. of Morristown v. Little, 135 N.J. 274, 283 (1994). Under Rule 4:50-1:

On motion, with briefs, and upon such terms as are just, the court may relieve a party or the party’s legal representative from a final judgment or order for the following reasons: (a) mistake, inadvertence, surprise, or excusable neglect; (b) newly discovered evidence which would probably alter the judgment or order and which by due diligence could not have been discovered in time to move for a new trial under [Rule] 4:49; (c) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (d) the judgment or order is void; (e) the judgment or order has been satisfied, released or discharged, or a prior judgment or order upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment or order should have prospective application; or (f) any other reason justifying relief from the operation of the judgment or order.

The trial court’s decision to vacate a judgment under Rule 4:50-1 “will be left undisturbed unless it represents a clear abuse of discretion.” Hous. Auth. of Morristown, supra, 135 N.J. at 283 (citing Mancini v. EDS, 132 N.J. 330, 334 (1993)). To vacate a default judgment, the defendant “must show that the neglect to answer was excusable under the circumstances and that he has a meritorious defense.” Marder v. Realty Constr. Co., 84 N.J. Super. 313, 318 (App. Div.), aff’d, 43 N.J. 508 (1964). Because a default judgment is not predicated on a determination that plaintiff has met its burden of proof after providing a defendant his or her day in court, the trial court should review a motion to set aside a default judgment “with great liberality, and every reasonable ground for indulgence is tolerated to the end that a just result is reached.” Hous. Auth. of Morristown, supra, 135 N.J. at 283-84 (quoting Marder, supra, 84 N.J. Super. at 318-19).

Here, defendant’s argument challenges directly the power of the court to grant the relief requested by plaintiff. Defendant argues that the default judgment obtained by plaintiff is utterly void from its inception because plaintiff did not have standing to prosecute the case at the time it filed the foreclosure complaint.

A mortgagee may establish standing by showing “that it is the holder of the note and the mortgage at the time the complaint was filed.” Deutsche Bank, supra, 422 N.J. Super. at 224-25 (internal quotation marks omitted). Plaintiff must have “presented an authenticated assignment” dated prior to its filing of the original complaint. See id. at 225. Here, the only evidence of the assignment is the assignment document dated June 19, 2007, which is dated thirty-nine days after plaintiff filed the complaint. As was the case in Deutsche Bank, plaintiff here does not have standing as an assignee to prosecute this foreclosure action.

Because the record before us does not include a certified copy of the original promissory note, we do not address plaintiff’s potential standing under the provisions of the Uniform Commercial Code (UCC) governing the transfer of negotiable instruments. N.J.S.A. 12A:3-101 to-605. We thus remand this matter to the trial court to conduct a hearing to determine whether, before filing the original complaint, plaintiff was in possession of the note or had another basis to achieve standing to foreclose, pursuant to N.J.S.A. 12A:3-301.

Finally, defendant argues that plaintiff failed to provide notice, pursuant to N.J.S.A. 2A:50-56(c), that defendant could sell his home prior to going into foreclosure. We reject this argument substantially for the reasons expressed by the trial court.

N.J.S.A. 2A:50-56(c) requires, in relevant part:

The written notice shall clearly and conspicuously state in a manner calculated to make the debtor aware of the situation

….

(8) the right, if any, of the debtor to transfer the real estate to another person subject to the security interest and that the transferee may have the right to cure the default as provided in this act, subject to the mortgage documents[.]

[(Emphasis added).]

The plain language of the statute only requires inclusion of the right to transfer the real estate if the mortgagor actually has the right to transfer the real estate subject to the security interest. If the mortgage documents do not provide that right, the mortgagee does not have to include that language in its notice of foreclosure.

Here, defendant’s mortgage states:

If all or any part of the Property or any Interest in the Property is sold or transferred… without Lender’s prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument.

[(Emphasis added).]

Thus, although the mortgage permits defendant to transfer the property, a nonconsensual transfer is treated as a default, authorizing plaintiff to accelerate the payment of the outstanding principal.

In this light, the trial judge gave the following explanation for rejecting defendant’s argument:

[T]he statute only requires that language to be in [the notice under N.J.S.A. 2A:50-56(c)] if that right exists, and in this case, as I understand it, the mortgage specifically provides that the defendant does not have the right to have anyone else assume the debt or to transfer his interest in the property without the lender’s consent.

….

There is language in the notice of intent, as I read it…, if you are willing to sell your property, your home, in order to avoid foreclosure, it is possible that the sale of your home can be approved through Countrywide, even if your home is worth less than what is owed on it.

So it tells him he can convey his home, it has to be approved by Countrywide, but to have it sold to anyone or to have someone else assume the debt is precluded by virtue of the mortgage instrument itself.

So… that would actually be misleading if that language were in there, because he doesn’t have that right…. [T]he language that you’re saying should be in the notice of intent is in violation of the mortgage document itself.

We agree with the trial judge’s analysis and ultimate conclusion. N.J.S.A. 2A:50-56(c) does not require the lender to notify the borrower of his or her right to transfer the property; it only requires notice of the right to transfer the property subject to the mortgage. Here, the mortgage document prohibits transfer of the property subject to the mortgage without consent. Under these circumstances, plaintiff was not required to provide defendant with notice of an unequivocal right to transfer the property.

Reversed on the issue of standing and remanded for such further proceedings as may be warranted. We do not retain jurisdiction.

[1] Defendant is an intellectually challenged young man who also suffers from a digestive disorder. His father John Cupo, a realtor, has assumed the responsibility to advocate for his son. The record thus includes a certification by defendant’s father in support of defendant’s application to adjourn a court-ordered sheriff’s sale. According to John Cupo, after extensive negotiations on behalf of his son with representatives of Countrywide, the parties reached a tentative settlement in June 2008, whereby Countrywide agreed to restructure defendant’s outstanding debt “by consolidating the loan balance, late fees and penalties with a[n] 11% interest rate going forward.” John Cupo expressed his frustration that despite “innumerable attempts” to inform the lender of his son’s willingness to accept this settlement, “Countrywide… failed to respond to the acceptance of their proposal….”

[2] The parties met for a third and final mediation session on September 28, 2010. The mediation ended without a settlement.

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2nd Circuit greenlights novel vehicle for BofA’s MBS settlement

2nd Circuit greenlights novel vehicle for BofA’s MBS settlement


Alison Frankel-

Way back in June, a day or so after Bank of America announced its proposed $8.5 billion settlement with Countrywide mortgage-backed securities investors, I wrote about the very peculiar vehicle through which the bank was seeking judicial approval of the arrangement. The settlement was filed by the Countrywide MBS trustee, Bank of New York Mellon, under Article 77 of the New York state code. Article 77, which allows a trustee to seek a judicial endorsement of trust-related decisions, is usually invoked in garden-variety trust disputes, not in an $8.5 billion deal affecting thousands of beneficiaries in 530 trusts. But the law offered distinct advantages for BofA, BNY Mellon, and the group of 22 institutional investors that negotiated the Countrywide MBS settlement. Under New York trust law, trustees have broad discretion to make decisions on behalf of the trusts they oversee. As long as the judge presiding over an Article 77 proceeding determines that the trustee has acted reasonably and hasn’t abused its discretion, the trustee’s decision gets a stamp of judicial approval. Anyone who disagrees with the trustee — and the banks and institutional investors that negotiated the BofA proposed settlement knew that there would be many investors who didn’t like it — bears the heavy burden of proving that the trustee acted outside the bounds of reason.

[REUTERS LEGAL]

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