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Deborah Brignac’s Changing Signature

Deborah Brignac’s Changing Signature


Who is Deborah Brignac?

 

[click link below]

BREAKING: Sarah Palin, Your New AZ Home Robo-Signed… Again, Meet Deborah Brignac

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READ | SUPPLEMENTAL BRIEF RE DEUTSCHE BANK NATIONAL TRUST COMPANY’S MOTION FOR RELIEF FROM THE AUTOMATIC STAY – GOMES v. COUNTRYWIDE HOME LOANS

READ | SUPPLEMENTAL BRIEF RE DEUTSCHE BANK NATIONAL TRUST COMPANY’S MOTION FOR RELIEF FROM THE AUTOMATIC STAY – GOMES v. COUNTRYWIDE HOME LOANS


Excerpt:

In this case, DBNTC clearly had no standing to bring the motion. Debtors never consented to MERS to act as Nominee under the terms of the DOT. Even if one assumes that MERS had authority to assign IndyMac Bank’s beneficial interest to DBNTC, IndyMac Bank ceased to exist at the time MERS purportedly made an assignment to DBTNC. DBNTC received nothing by virtue of the assignment; the assignment constitutes a fraudulent conveyance.

For the foregoing reasons, Debtors respectfully request the Court to make findings of fact and to deny DBNTC’s second Motion for Relief from the Automatic Stay with prejudice. Debtors further request this Court to award attorney fees incurred by Debtors against DBNTC and its attorney for bringing this frivolous motion.

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CA DEBTORS’ OPPOSITION TO THE REDO MOTION FOR RELIEF FROM THE AUTOMATIC STAY In re NGUYEN

CA DEBTORS’ OPPOSITION TO THE REDO MOTION FOR RELIEF FROM THE AUTOMATIC STAY In re NGUYEN


UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
SANTA ANA DIVISION

In Re:
THUAN X. NGUYEN AND TAMMY H. NGUYEN

excerpt:

The deception and fraud committed by Deutsche Bank National Trust Company and its known foreclosure mill counsels, Barrett Daffin Frappier Treder & Weiss, LLP, upon the Court and harassment upon Debtors with unwarranted motion to cause delay and to increase litigation costs by Debtors must be stopped.

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Battle of The Unauthorized Fraudulent Signature: DEUTSCHE BANK NATIONAL TRUST COMPANY v. JP MORGAN, Ga: Court of Appeals 2010

Battle of The Unauthorized Fraudulent Signature: DEUTSCHE BANK NATIONAL TRUST COMPANY v. JP MORGAN, Ga: Court of Appeals 2010


DEUTSCHE BANK NATIONAL TRUST COMPANY,
v.
JP MORGAN CHASE BANK, N. A.

A10A1509.

Court of Appeals of Georgia.

Decided: November 19, 2010.

BARNES, Presiding Judge.

JP Morgan Chase Bank, N. A. commenced this action against Deutsche Bank National Trust Company f/k/a Banker’s Trust Company after the two banks conducted competing foreclosure sales of certain real property in DeKalb County. JP Morgan’s claim of title to the property was predicated on a 2004 security deed, while Deutsche Bank’s claim of title was predicated on a 2001 security deed. The case turned on the legal effect of a notarized warranty deed recorded in 2003 and on whether JP Morgan was a bona fide purchaser for value based upon the warranty deed. The trial court granted summary judgment to JP Morgan, concluding that JP Morgan’s interest in the property was superior to and not subject to any interest held by Deutsche Bank. We conclude that the uncontroverted evidence shows that the 2003 warranty deed was not a forgery, but was signed by someone fraudulently assuming authority, and that JP Morgan was a bona fide purchaser for value entitled to take the property free of any outstanding security interest held by Deutsche Bank. Thus, we affirm.

To prevail on a motion for summary judgment, the moving party must demonstrate that there is no genuine issue of material fact, and that the undisputed facts, viewed in a light most favorable to the party opposing the motion, warrant judgment as a matter of law. Our review of a grant of summary judgment is de novo, and we view the evidence and all reasonable inferences drawn from it in the light most favorable to the nonmovant.

(Citations and punctuation omitted.) Consumer Solutions Fin. Svc. v. Heritage Bank, 300 Ga. App. 272 (684 SE2d 682) (2009). See OCGA § 9-11-56 (c); Lau’s Corp. v. Haskins, 261 Ga. 491 (405 SE2d 474) (1991). Guided by these principles, we turn to the record in the present case.

This case involves a dispute over the tract of real property located at 275 Haas Avenue, Atlanta, Georgia 30316 in DeKalb County (the “Property”). The Property was conveyed to Rebecca Diaz by warranty deed recorded in September 2001. On the same date, Diaz executed and recorded a security deed encumbering the Property in favor of People’s Choice Home Loan, Inc. (the “2001 Security Deed”). IndyMac Bank, F. S. B. acquired the 2001 Security Deed by assignment.

In July 2003, a notarized warranty deed from “Indy Mac Bank, F. S. B.” to Diaz was recorded which purported to reconvey the Property to Diaz in fee simple (the “Warranty Deed”). The Warranty Deed was executed by an individual named Pamela Whales, who identified herself as an Assistant Vice President of IndyMac. The Warranty Deed was attested by two witnesses, one of whom was a notary public.

The Property subsequently was deeded to various parties but ultimately to an owner who, in April 2004, executed and recorded a security deed encumbering the Property in favor of OneWorld Mortgage Corporation (the “2004 Security Deed”). Washington Mutual Bank F. A. acquired the 2004 Security Deed by assignment.

In June 2004, IndyMac assigned the 2001 Security Deed to Deutsche Bank. That same month, Deutsche Bank foreclosed upon the Property pursuant to the power of sale provision contained in the 2001 Security Deed. Deutsche Bank was the highest bidder at the foreclosure sale.

In December 2005, Washington Mutual also foreclosed upon the Property pursuant to the power of sale provision contained in the 2004 Security Deed. Washington Mutual was the highest bidder at the foreclosure sale. Thereafter, Washington Mutual was closed by the federal Office of Thrift Supervision, and JP Morgan succeeded to Washington Mutual’s interest in the Property under the terms of a purchase and assumption agreement.

Following the competing foreclosure sales, JP Morgan brought this action against Deutsche Bank for declaratory relief and attorney fees, alleging that its interest in the Property was superior to and not subject to any interest held by Deutsche Bank. Deutsche Bank answered and counterclaimed for a declaratory judgment that its interest in the Property was superior to and not subject to any interest held by JP Morgan.

The parties cross-moved for summary judgment on their declaratory judgment claims. JP Morgan argued that the 2001 Security Deed upon which Deutsche Bank predicated its interest in the Property had been canceled by the Warranty Deed as a matter of law. Alternatively, JP Morgan argued that the uncontroverted evidence showed that it qualified as a bona fide purchaser for value such that it was protected against any outstanding security interest in the Property held by Deutsche Bank. Deutsche Bank strongly disputed these arguments, contending that the Warranty Deed was facially irregular, had been forged, and failed to satisfy the statutory requirements for cancellation of a security deed. The trial court granted summary judgment to JP Morgan and denied it to Deutsche Bank. Deutsche Bank now appeals the trial court’s grant of JP Morgan’s motion for summary judgment.[1]

1. We affirm the trial court’s grant of summary judgment in favor of JP Morgan because the uncontroverted evidence shows that JP Morgan was afforded the protection of a bona fide purchaser for value, not subject to any outstanding security interest in the Property held by Deutsche Bank.

“To qualify as a bona fide purchaser for value without notice, a party must have neither actual nor constructive notice of the matter at issue.” (Citation and punctuation omitted.) Rolan v. Glass, 305 Ga. App. 217, 218 (1) (699 SE2d 428) (2010). “Notice sufficient to excite attention and put a party on inquiry shall be notice of everything to which it is afterwards found that such inquiry might have led.” (Citation and footnote omitted.) Whiten v. Murray, 267 Ga. App. 417, 421 (2) (599 SE2d 346) (2004). “A purchaser of land is charged with constructive notice of the contents of a recorded instrument within its chain of title.” (Citation and footnote omitted.) VATACS Group v. HomeSide Lending, (2005). Furthermore, the grantee of a security interest in land and subsequent purchasers are entitled to rely upon a warranty deed that is regular on its face and duly recorded in ascertaining the chain of title. See Mabra v. Deutsche Bank & Trust Co. Americas, 277 Ga. App. 764, 767 (2) (627 SE2d 849) (2006), overruled in part on other grounds by Brock v. Yale Mtg. Corp., ___ Ga. ___ (2) (Case No. S10A0950, decided Oct. 4, 2010). 276 Ga. App. 386, 391 (2) (623 SE2d 534)

On motion for summary judgment, JP Morgan argued that it was entitled to protection as a good faith purchaser because the notarized, recorded Warranty Deed purported to transfer the Property back to Diaz, thereby extinguishing the 2001 Security Deed, and there was no reason to suspect a defect in the Warranty Deed calling into question the chain of title. In contrast, Deutsche Bank argued that JP Morgan was not entitled to such protection because the Warranty Deed was facially irregular in that it misidentified the grantor and failed to comply with OCGA § 14-5-7 (b).

We agree with JP Morgan and reject the arguments raised by Deutsche Bank. The Warranty Deed was regular on its face and duly recorded. See OCGA § 44-5-30 (“A deed to lands must be in writing, signed by the maker, and attested by at least two witnesses.”). See also OCGA § 44-2-21 (a) (4), (b) (one of two required attesting witnesses may be a notary public). Also, the Warranty Deed on its face was executed in a manner that conformed with OCGA § 14-5-7 (b), which provides:

Instruments executed by a corporation releasing a security agreement, when signed by one officer of the corporation or by an individual designated by the officers of the corporation by proper resolution, without the necessity of the corporation’s seal being attached, shall be conclusive evidence that said officer signing is duly authorized to execute and deliver the same.

The Warranty Deed appeared to be executed by an assistant vice president of IndyMac, and thus by an “officer of the corporation.” Moreover, the only interest that IndyMac held in the Property prior to execution of the Warranty Deed was its security interest arising from the 2001 Security Deed, and reconveyance of the Property by way of a warranty deed was a proper way to release that security interest. See Clements v. Weaver, 301 Ga. App. 430, 434 (2) (687 SE2d 602) (2009) (grantor of quitclaim deed estopped from asserting any interest in property conveyed); Southeast Timberlands v. Haiseal Timber, 224 Ga. App. 98, 102 (479 SE2d 443) (1996) (physical precedently only). The Warranty Deed, therefore, facially complied with OCGA § 14-5-7 (b) and would appear to anyone searching the county records to serve as “conclusive evidence” that execution of the deed had been authorized by IndyMac.

(a) In opposing summary judgment, Deutsche Bank argued that the Warranty Deed was facially irregular because it improperly identified the grantor as “Indy Mac Bank, F. S. B.” rather than “IndyMac Bank, F. S. B.” But “a mere misnomer of a corporation in a written instrument . . . is not material or vital in its consequences, if the identity of the corporation intended is clear or can be ascertained by proof.” (Citation, punctuation, and emphasis omitted.) Hawkins v. Turner, 166 Ga. App. 50, 51-52 (1) (303 SE2d 164) (1983). It cannot be said that the mere placement of an additional space in the corporate name (i.e., “Indy Mac” versus “IndyMac”) made the identity of the corporation unclear. As such, the misnomer did not render the Warranty Deed irregular on its face.

(b) Deutsche Bank also argued that the Warranty Deed failed to comply with OCGA § 14-5-7 (b) because the phrase “when signed by one officer of the corporation” should be construed as requiring the signature of the corporate president or vice president. “The cardinal rule of statutory construction requires that we look to the intention of the legislature. And in so doing, the literal meaning of the statute prevails unless such a construction would produce unreasonable or absurd consequences not contemplated by the legislature.” Johnson v. State, 267 Ga. 77, 78 (475 SE2d 595) (1996). The words of OCGA § 14-5-7 (b) are unambiguous and do not lead to an unreasonable or absurd result if taken literally: any officer of the corporation has authority to sign the instrument releasing the security interest. There is no basis from the language of the statute to limit that authority to a subset of corporate officers such as a president or vice president.

It is clear that the legislature knew how to specify such a limitation when it chose to do so. In OCGA § 14-5-7 (a),[2] the legislature imposed a limitation on the specific types of corporate officers who could execute instruments for real estate conveyances other than those releasing security agreements. Consequently, we must presume that the legislature’s failure to include similar limiting language in OCGA § 14-5-7 (b) “was a matter of considered choice.” Transp. Ins. Co. v. El Chico Restaurants, 271 Ga. 774, 776 (524 SE2d 486) (1999).

Deutsche Bank further argued that the Warranty Deed failed to comply with OCGA § 14-5-7 (b) because the statute should be construed as requiring the instrument to expressly state that it was “releasing a security agreement,” and the Warranty Deed did not contain such express language. But nothing in the plain language of OCGA § 14-5-7 (b) imposes an express language requirement, “and the judicial branch is not empowered to engraft such a [requirement] on to what the legislature has enacted.” (Citation omitted.) Kaminer v. Canas, 282 Ga. 830, 835 (1) (653 SE2d 691) (2007).

(c) Given the facial regularity of the recorded Warranty Deed, there was no reason to suspect that it might be defective in some manner or that there might be a problem in the chain of title resulting from the deed. Nothing in the Warranty Deed would have excited attention or put a party on inquiry that the 2001 Security Deed might remain in full force and effect. Accordingly, the original grantee of the 2004 Security Deed (OneWorld Mortgage Corporation) was entitled to rely upon the facially regular Warranty Deed and was afforded the protection of a bona fide purchaser of the Property, entitled to take the Property free of the 2001 Security Deed. See generally Farris v. Nationsbanc Mtg. Corp., 268 Ga. 769, 771 (2) (493 SE2d 143) (1997) (“A bona fide purchaser for value is protected against outstanding interests in land of which the purchaser has no notice.”). Because OneWorld Mortgage Corporation had the status of a bona fide purchaser, subsequent holders of the 2004 Security Deed were likewise afforded that status, including Washington Mutual (now JP Morgan). See OCGA § 23-1-19 (“If one without notice sells to one with notice, the latter shall be protected[.]”; Murray v. Johnson, 222 Ga. 788, 789 (3) (152 SE2d 739) (1966); Thompson v. Randall, 173 Ga. 696, 701 (161 SE 377) (1931). Consequently, summary judgment was appropriate to JP Morgan on the issue of its status as a bona fide purchaser for value.

2. In opposing summary judgment, Deutsche Bank contended that even if JP Morgan qualified as a bona fide purchaser for value, there was a genuine issue of material fact over whether the Warranty Deed constituted a forgery, and thus over whether JP Morgan acquired good title to the Property. JP Morgan responded that the uncontroverted evidence showed that the Warranty Deed did not constitute a common law forgery, which occurs when someone signs another person’s name, since the Warranty Deed was signed by a person using her own name but who fraudulently assumed authority to act on behalf of IndyMac. JP Morgan further maintained that its status as a bona fide purchaser for value protected it against any fraud (rather than forgery) that might have been involved in the execution of the Warranty Deed.

The dispute between the parties centered on the assertions contained in the affidavit of Yolanda Farrow, which was filed by Deutsche Bank in opposition to summary judgment (the “Farrow Affidavit”). Farrow averred that she was a records keeper formerly employed by IndyMac and currently employed at IndyMac’s successor bank. Farrow further averred that her office maintained the IndyMac personnel records in an electronic database; that she had personal knowledge of the maintenance and upkeep of those records; and that she had personally researched and examined the records database for the person identified in the Warranty Deed as Pamela Whales, Assistant Vice President. Based upon her review of the records database, Farrow opined that to the best of her knowledge and belief, no one by that name was an employee or agent of IndyMac when the Warranty Deed was executed. Deutsche Bank maintained that the Farrow Affidavit served as circumstantial evidence creating a genuine issue of material fact over whether the Warranty Deed was a forgery.

[W]e have . . . long recognized that a forged deed is a nullity and vests no title in a grantee. As such, even a bona fide purchaser for value without notice of a forgery cannot acquire good title from a grantee in a forged deed, or those holding under such a grantee, because the grantee has no title to convey.

(Citations and punctuation omitted.) Brock, ___ Ga. at ___ (2). See also Second Refuge Church of Our Lord Jesus Christ v. Lollar, 282 Ga. 721, 726-727 (3) (653 SE2d 462 (2007). In contrast, a bona fide purchaser is protected against fraud in the execution or cancellation of a security deed of which he or she is without notice. See Murray, 222 Ga. at 789 (4).

We conclude that the Farrow Affidavit filed by Deutsche Bank was insufficient to raise a genuine issue of material fact as to whether the Warranty Deed was a forgery.

A recorded deed shall be admitted in evidence in any court without further proof unless the maker of the deed, one of his heirs, or the opposite party in the action files an affidavit that the deed is a forgery to the best of his knowledge and belief. Upon the filing of the affidavit, the genuineness of the alleged deed shall become an issue to be determined in the action.

OCGA § 44-2-23. While “forgery” is not defined in the statute, we have previously noted that the general principles espoused in the statute were “taken from the common law.” McArthur v. Morrison, 107 Ga. 796, 797 (34 SE 205)Intl. Indem. Co. v. Bakco Acceptance, 172 Ga. App. 28, 32 (2) (322 SE2d 78)Barron v. State, 12 Ga. App. 342, 348 (77 SE 214)Gilbert v. United States, 370 U. S. 650, 655-658 (II) (82 SC 1399, 8 LE2d 750) (1962) (discussing the common law of forgery); People v. Cunningham, 813 NE2d 891, 894-895 (N. Y. 2004) (same). On the other hand, (1899). Furthermore, we favor the construction of a statute in a manner that is in conformity with the common law, rather than in derogation of it. See (1984). Under the common law, a forgery occurs where one person signs the name of another person while holding out that signature to be the actual signature of the other person. See (1913) (“[T]o constitute forgery, the writing must purport to be the writing of another party than the person making it.“) (citation and punctuation omitted). See also

[w]here one executes an instrument purporting on its face to be executed by him as the agent of the principal, he is not guilty of forgery, although he has in fact no authority from such principal to execute the same. This is not the false making of the instrument, but merely a false and fraudulent assumption of authority.

(Citation and punctuation omitted.) Ga. Cas. & Surety Co. v. Seaboard Surety Co., 210 F. Supp. 644, 656-657 (N. D. Ga. 1962), aff’d, Seaboard Surety Co. v. Ga. Cas. & Surety Co., 327 F.2d 666 (5th Cir. 1964) (applying Georgia law). This common law distinction between forgery and a fraudulent assumption of authority has been discussed and applied in several Georgia cases. See Morgan v. State, 77 Ga. App. 164, 165 (48 SE2d 115) (1948); Samples v. Milton County Bank, 34 Ga. App. 248, 250 (1) (129 SE 170) (1925); Barron, 12 Ga. App. at 347-350.

In the present case, the Farrow Affidavit merely asserted that Whales, the individual who signed the Warranty Deed, was not an employee or agent of IndyMac. It is undisputed that the individual signing the Warranty Deed was in fact Whales. Hence, the Farrow Affidavit alleged a fraudulent assumption of authority by Whales, not a forgery, under the common law. See Georgia Cas. & Surety Co., 210 F. Supp. at 656-657; Morgan, 77 Ga. App. at 165; Samples, 34 Ga. App. at 250 (1); Barron, 12 Ga. App. at 347-350.

Arguing for a contrary conclusion, Deutsche Bank maintained that the cases applying the Georgia common law of forgery which have addressed the doctrine of a “fraudulent assumption of authority” have involved an admitted agent with some authority to act on behalf of its principle, but who exceeded that authority. Deutsche Bank asserted that the present case is thus distinguishable, since the Farrow Affidavit reflected that Whales had no authority to act as an agent of IndyMac in any capacity or under any circumstances.

We are unpersuaded. Nothing in the language or reasoning of the cases applying the doctrine of fraudulent assumption of authority suggests that the doctrine should be limited in the manner espoused by Deutsche Bank. See Georgia Cas. & Surety Co., 210 F. Supp. at 656-657;Morgan, 77 Ga. App. at 165; Samples, 34 Ga. App. at 250 (1); Barron, 12 Ga. App. at 347-350. Indeed, in Georgia Cas. & Surety Co., 210 F. Supp. at 652, 656-657, the district court did not hesitate to apply the doctrine, even though the court found that the individuals who had executed the corporate documents were “purely intruders” with “no contract of employment existing nor even in contemplation,” who lacked any authority whatsoever to act on behalf of the corporation as officers or otherwise.

For these reasons, the trial court correctly rejected Deutsche Bank’s contention that there was evidence that the Warranty Deed had been forged. Because the Farrow Affidavit at best showed a fraudulent assumption of authority by Whales as signatory to the Warranty Deed, JP Morgan, as a bona fide purchaser, was protected against the fraudulent actions alleged by Deutsche Bank. See Murray, 222 Ga. at 789 (4).

3. In opposing summary judgment, Deutsche Bank also maintained that the Warranty Deed could not cause the 2001 Security Deed to be canceled because the Warranty Deed failed to comply with the requirements of OCGA § 44-14-67 (b) (2). That statute provides in pertinent part:

(b) In the case of a deed to secure debt which applies to real property, in order to authorize the clerk of superior court to show the original instrument as canceled of record, there shall be presented for recording:

. . .

(2) A conveyance from the record holder of the security deed, which conveyance is in the form of a quitclaim deed or other form of deed suitable for recording and which refers to the original security deed[.]

According to Deutsche Bank, the Warranty Deed did not authorize the clerk of the superior court to cancel the 2001 Security Deed because the Warranty Deed made no express reference to the 2001 Security Deed, as required by this statute. As such, Deutsche Bank argued that, as a matter of law, the Warranty Deed could not effectuate the cancellation of the 2001 Security Deed and thereby extinguish Deutsche Bank’s interest in the Property.

Deutsche Bank’s argument was predicated on the false assumption that OCGA § 44-14-67 (b) provides the exclusive means for the cancellation or extinguishment of a security deed. But as previously noted, a bona fide purchaser for value is entitled to take property free of any outstanding security interest of which the purchaser had no actual or constructive notice. See Farris, 268 Ga. at 771 (2). And it would produce an anomalous result to interpret Georgia’s recording statutes, including OCGA § 44-14-67 (b), in a manner that would defeat the interests of a bona fide purchaser for value. See Lionheart Legend v. Northwest Bank Minn. Nat. Assn., 253 Ga. App. 663, 667 (560 SE2d 120) (2002) (noting that Georgia’s recording acts are intended to protect bona fide purchasers for value). It follows that because JP Morgan was a bona fide purchaser for value, it was entitled to take the Property free of the 2001 Security Deed, separate and apart from the procedures for cancellation by the clerk of the superior court set forth in OCGA § 44-14-67.

For these combined reasons, the trial court correctly concluded that the uncontroverted evidence of record showed that JP Morgan’s interest in the Property was superior to and not subject to any interest held by Deutsche Bank. The trial court, therefore, committed no error in granting summary judgment in favor of JP Morgan on its claim for a declaratory judgment.

Judgment affirmed. Blackwell, and Dillard, JJ., concur.

[1] Deutsche Bank does not appeal the trial court’s denial of its motion for summary judgment.

[2] OCGA § 14-5-7 (a) provides:

Instruments executed by a corporation conveying an interest in real property, when signed by the president or vice-president and attested or countersigned by the secretary or an assistant secretary or the cashier or assistant cashier of the corporation, shall be conclusive evidence that the president or vice-president of the corporation executing the document does in fact occupy the official position indicated; that the signature of such officer subscribed thereto is genuine; and that the execution of the document on behalf of the corporation has been duly authorized. Any corporation may by proper resolution authorize the execution of such instruments by other officers of the corporation.

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FIVE (5) NYSC CASES INVOLVING ROBO-SIGNER TAMARA PRICE

FIVE (5) NYSC CASES INVOLVING ROBO-SIGNER TAMARA PRICE


Excerpts:

#1 TP1_US BANK v. Ronnie Fishbein

The purported affidavit of Tamara Price, “Vice President of CITI RESIDENTIAL LENDING MORTGAGE, a
servicing agent who has power of attorney for the plaintiff,” does not contain a jurat, and there is
no language of oath or affirmation. The absence of a jurat renders the “affidavit” inadmissible as
there is no evidence that an oath or affirmation was taken (Pagano v Kingsbury, 182 AD2d 268
[ 2d Dept 19921; see also, People v Lieberman, 57 Misc 2d 1070 [Sup. Ct 19681). Moreover, the
purported power of attorney pursuant to which 1 he affidavit was assertedly prepared is not
annexed to the motion papers, and the submissions do not otherwise establish the authority of an
officer of plaintiffs servicer to execute the affidavit on behalf of plaintiff.

#2 TP2_ARGENT v. Olivera

The Affidavit of Merit and Amount Due was executed and notarized in San Bernadino, California
by Tamara Price and it is unaccompanied by a certificate of conformity and, therefore, cannot
provide evidence on this application. (see Daimler Chrysler Services North America LLC v,
Tammaro 14 Misc 34128 [A]; 2006 NY Slip OP 52506[U]* [App Term, 2Deptl; Bath Meaka1
Suppw, Inc. v. Allstate Indemnity Co., 13 Misc 3d142[A] 2006 NY Slip OP52273[U] *1-*2 [App
Term 2d Dept]).

#3 TP 3 DBNT v. Halverson

Moreover, the submissions do not reflect the authority of Tamara Price, a
self-described “authorized agent” of AMC Mortgage Services, hc., a
non-party to this mortgage foreclosure action, to represent plaintiff in this action, nor do the
submissions contain evidence that AMC Mortgage Services, Inc. is the attorney in fact for the
plaintiff in this action, as alleged in the affidavit of Ms. Price. Similarly, the assignment whereby
the mortgage was purportedly assigned to plaintiff was executed by Tamara Smith on behalf of
AMC Mortgage Services, Inc. as “authorized agent” for the assignor, without any evidence of
such agency. Accordingly, the motion is denied, with leave to renew upon proper submissions
that address the deficiencies identified herein.

#4 FROM JUDGE SCHACK

TP 4 JUDGE SCHACK_ DEUTSCHE v. Ezagui

According to plaintiffs application, defendant Ezaguis’ default began with the
nonpayment of principal and interest due on September 1,2006. Yet, more than five
months later, plaintiff DEUTSCHE BANK was idling to take an assignment of a
nonperforming loan from AMERIQUEST. Further, both assignor AMC, as Attorney in
Fact for AMERIQUEST, and assignee, DEUTSCHE BANK, have the same address, 505
City Parkway West, Orange, CA 92868. Plaintiffs “affidavit of amount due,” submitted
in support of the instant application for a default order of reference was executed by
Tamara Price, on February 16, 2007. Ms. Price states that “I am the Vice President for
DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE OF
AMERIQUEST MORTGAGE SECURITIES, INC., ASSET-BACKED PASS
THROUGH CERTIFICATES, SERIES 2004-R1( 1, UNDER THE POLING AND
SERVICING AGREEMENT DATED AS OF OCTOBER 1,2004, WITHOUT
RECOURSE (DEUTSCHE BANK.” However, i he February 7,2007 assignment from
AMERIQUEST, by AMC, its Attorney in Fact, is executed by Tamara Price, Vice
President of AMC. The Tamara Price signatures on both the February 7,2007 affidavit
and the February 16,2007 assignment are identical. Did Ms. Price change employers
from February 7,2007 to February 16,2007? The Court is concerned that there may be
fraud on the part of AMERIQUEST, or at least malfeasance. Before granting an
application for an order of reference, the Court requires an affidavit from Ms. Price,
describing her employment history for the past three years. Further, irrespective of her
employment history, Ms. Price must explain why DEUTSCHE BANK would purchase a
nonperforming loan from AMERIQUEST, and why DEUTSCHE BANK shares office

THE BIGGIE

#5 JUDGE SCHACK_DBNT v. CLOUDEN

In the instant action, Argent’s defective assignment to Deutsche Bank affects the
standing of Deutsche Bank to bring this action. The recorded assignment from Argent to
Deutsche Bank, made by “Tamara Price, as Authorized Agent” on behalf of “AMC
Mortgage Services Inc. as authorized agent,” lacks any power of attorney granted by
Argent to AMC Mortgage Services, Inc. and/or Tamara Price to act on its behalf. The
first mortgage assignment, from Grand Pacific Mortgage to Argent, was proper. It was
executed by the President of Grand Pacific Mortgage.

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Posted in STOP FORECLOSURE FRAUDComments (3)

FOR SALE: DEUTSCHE BANK NATIONAL TRUST CO CALIFORNIA BUILDING

FOR SALE: DEUTSCHE BANK NATIONAL TRUST CO CALIFORNIA BUILDING


I just got this tip that DBNT is selling it’s California address that is in many many SEC filings. I wish I can make more comments but am limited. I’ll leave it up to you all.

Source: Loopnet

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Posted in deutsche bank, foreclosure, foreclosures, Real Estate, trustee, trustee sale, TrustsComments (0)

TILA Violations ‘Originator’| HUBBARD v Ameriquest, Deutsche, AMC Mtg. Svcs. 2008

TILA Violations ‘Originator’| HUBBARD v Ameriquest, Deutsche, AMC Mtg. Svcs. 2008


Conclusion

Based on the foregoing analysis, the Court denies Plaintiff’s motion for summary judgment [103] as to AMC and grants Plaintiff’s motion for summary judgment [103] as to Ameriquest and Deutsche Bank, finding both Ameriquest and Deutsche Bank liable for rescission, statutory damages, and costs and attorneys’ fees. Plaintiff is given until October 14, 2008, in which to submit supplemental briefing, consistent with this decision, on the appropriate damage calculations and how to properly unwind the transaction for rescission purposes.

Ameriquest and Deutsche Bank will have until October 25, 2008, in which to respond to 12 In Payton, the court concluded that statutory damages could not be imposed on the assignee because the violation was not apparent on its face, but that an award of attorney’s fees against the assignee was appropriate because the plaintiff had brought a successful action for rescission. 2003 WL 22349118, at *7-*8.

Case 1:05-cv-00389 Document 143 Filed 09/30/2008

Plaintiff’s calculation of damages and briefing on rescission. Finally, the Court denies
Defendants’ motion to strike portions of Plaintiff’s renewed motion for summary judgment [113]
as moot in light of the discussion above.

[ipaper docId=34060224 access_key=key-rk9bwrurkff7w7wfmw8 height=600 width=600 /]

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



Posted in deutsche bank, foreclosure, foreclosures, originator, tila, truth in lending act, ViolationsComments (0)

POWERFUL BK CASE! Mortgage Was Not Properly Executed | IN RE CLEARY

POWERFUL BK CASE! Mortgage Was Not Properly Executed | IN RE CLEARY


In re: DAVID CLEARY JR., Chapter 7, Debtor.
LAUREN HELBLING, TRUSTEE, Plaintiff,
v.
DAVID CLEARY JR., et al., Defendants.

Case No. 09-14900, Adversary Proceeding No. 09-1285.

United States Bankruptcy Court, N.D. Ohio.

July 1, 2010.

MEMORANDUM OF OPINION[ 1 ]

ARTHUR I. HARRIS, Bankruptcy Judge.

This matter is currently before the Court on the motion for partial summary judgment filed by the plaintiff-trustee, Lauren Helbling, and the joint brief in opposition of Carrington Mortgage and Deutsche Bank National Trust Company (“Deutsche Bank”). The main issue is whether the trustee is entitled to avoid a mortgage because the notary’s certificate of acknowledgment failed to recite the names of the parties whose signatures were acknowledged. The Court must also decide whether the filing of one or both foreclosure actions imparted the trustee with constructive notice resulting in inability to act as a bona fide purchaser for value. If the trustee is charged with constructive notice, then the Court must consider whether the second foreclosure action was an avoidable preference. For the reasons that follow, the Court holds that the Mortgage was not executed in accordance with Ohio’s statutory requirements but that the trustee is charged with constructive notice of the interest of Deutsche Bank as a result of the filing of the second foreclosure action. However, the filing of the second foreclosure acted to perfect the defective mortgage as against third persons, and it is a preferential transfer. As such, the Mortgage can be avoided by the trustee as a preference. Accordingly, the trustee’s motion for partial summary judgment is granted.

FACTS AND PROCEDURAL BACKGROUND

On December 30, 2009, the plaintiff-trustee and defendants Deutsche Bank and Carrington submitted the following stipulations:

1. Jurisdiction of this Court is proper and as set forth in Paragraph 1 of the complaint.

2. This is a core proceeding as set forth in Paragraph 2 of the Complaint.

3. Plaintiff is the duly appointed, qualified and acting Trustee of the estate of the debtor.

4. A legal description for property known as 4155 West 114th Street, Cleveland, OH is shown as Exhibit A to the Complaint (“Property”).

5. The petition in this case was filed on May 31, 2009.

6. The Debtor’s interest in the Property is property of the bankruptcy estate pursuant to 11 U.S.C. § 541.

7. The Debtor is the owner, in fee simple of the Property, by virtue of a General Warranty Deed filed in Instrument No. 200302030753 of the records of Cuyahoga County, Ohio on February 3, 2003.

8. Deutsche Bank National Trust Company (“Deutsche”) is the holder of a mortgage on the Property (the “Mortgage”), which Mortgage is at issue in this proceeding.

9. The Mortgage was filed on May 5, 2004, as Instrument No. 200405050625 in the records of Cuyahoga County, Ohio.

10. A true and exact copy of the Mortgage is attached to the Complaint as Exhibit B.

11. The original mortgagee under the Mortgage is New Century Mortgage Corporation. The Mortgage was assigned to Deutsche of record by assignment filed December 16, 2008 as Instrument No. 200812160236, Cuyahoga County Records.

12. The acknowledgment provision of the Mortgage on page 15 reads as follows:

  This instrument was acknowledged before me this 30th day of April 2004, by

  Stamp JERRY RUSSO
        Notary Public
        In and for the State of Ohio
        My Commission Expires
        May 19, 2008
                                  /s/ Jerry Russo
                                   Notary Public

13. Debtor’s initials appear at the bottom of Mortgage pages 1 through 13, and page 15 and page 17.

14. A foreclosure action was filed as to thea subject property in Case No. 663230 of the Cuyahoga County, Ohio Common Pleas Court on June 25, 2008 by Deutsche. The property was described in the foreclosure Complaint. The debtor answered in that case on September 25, 2008. The case was dismissed without prejudice on October 30, 2008.

15. A foreclosure action was filed as to the subject property in Case No. 694194 of the Cuyahoga County, Ohio Common Pleas Court on May 28, 2009 by Aeon Financial. The property was described in the foreclosure Complaint. The debtor filed a Notice of Suggestion of Stay on June 15, 2009. The Court entered an Order staying the case on June 19, 2009. The case was dismissed without prejudice on August 5, 2009.

On August 28, 2009, the trustee of the Chapter 7 estate initiated this adversary proceeding seeking to avoid the Mortgage and to determine the respective interests of various parties in the real property. The complaint named as defendants the debtor; Carrington Mortgage; CitiFinancial Inc.; Aeon Financial, LLC; Beneficial Ohio, Inc.; TFC National Bank; Deutsche Bank National Trust Company; and the Cuyahoga County Treasurer. The treasurer, Citifinancial, David Cleary, Aeon Financial, TFC National Bank, and Carrington/Deutsche Bank filed answers to the complaint. Aeon Financial and TFC National Bank disclaimed any interest, and all parties stipulated that the Cuyahoga County Treasurer has a first lien for taxes and assessments. Default was entered against Beneficial Ohio on March 24, 2010. On January 13, 2010, the trustee filed a motion for partial summary judgment seeking to avoid the Mortgage held by Deutsche Bank. On February 3, 2010, Deutsche Bank filed a brief in response. Briefing on the trustee’s partial motion for summary judgment is complete, and the Court is ready to rule.

JURISDICTION

Determinations of the validity, extent, or priority of liens are core proceedings under 28 U.S.C. section 157(b)(2)(K). The Court has jurisdiction over core proceedings under 28 U.S.C. sections 1334 and 157(a) and Local General Order No. 84, entered on July 16, 1984, by the United States District Court for the Northern District of Ohio.

SUMMARY JUDGMENT STANDARD

Federal Rule of Civil Procedure 56(c), as made applicable to bankruptcy proceedings by Bankruptcy Rule 7056, provides that a court shall render summary judgment, if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.

The moving party bears the burden of showing that “there is no genuine issue as to any material fact and that [the moving party] is entitled to judgment as a matter of law.” Jones v. Union County, 296 F.3d 417, 423 (6th Cir. 2002). See generally Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Once the moving party meets that burden, the nonmoving party “must identify specific facts supported by affidavits, or by depositions, answers to interrogatories, and admissions on file that show there is a genuine issue for trial.” Hall v. Tollett, 128 F.3d 418, 422 (6th Cir. 1997). See, e.g., Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986) (“The mere existence of a scintilla of evidence in support of the plaintiff’s position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff.”). The Court shall view all evidence in a light most favorable to the nonmoving party when determining the existence or nonexistence of a material fact. See Tenn. Dep’t of Mental Health & Mental Retardation v. Paul B., 88 F.3d 1466, 1472 (6th Cir. 1996).

DISCUSSION

Under the “strong arm” clause of the Bankruptcy Code, the bankruptcy trustee has the power to avoid transfers that would be avoidable by certain hypothetical parties. See 11 U.S.C. § 544(a). Section 544 provides in pertinent part:

(a) The trustee shall have, as of the commencement of the case, and without regard to any knowledge of the trustee or of any creditor, the rights and powers of, or may avoid any transfer of property of the debtor or any obligation incurred by the debtor that is voidable by —

. . . .

(3) a bona fide purchaser of real property, other than fixtures, from the debtor, against whom applicable law permits such transfer to be perfected, that obtains the status of a bona fide purchaser and has perfected such transfer at the time of the commencement of the case, whether or not such a purchaser exists.

11 U.S.C. § 544. Any transfer under section 544 is preserved for the benefit of the estate. See 11 U.S.C. § 551.

Page 10 of the Mortgage provides that “[t]his Security Instrument shall be governed by federal law and the law of the jurisdiction in which the Property is located.” Accordingly, because the real property in question is located in Ohio, the Court will apply Ohio law to determine whether the trustee may avoid the Mortgage using the “strong arm” clause. See Simon v. Chase Manhattan Bank (In re Zaptocky), 250 F.3d 1020, 1024 (6th Cir. 2001) (applicable state law governs determination whether hypothetical bona fide purchaser can avoid mortgage).

Under Ohio law, a bona fide purchaser is a purchaser who ” `takes in good faith, for value, and without actual or constructive knowledge of any defect.’ ” Stubbins v. Am. Gen. Fin. Servs. (In re Easter), 367 B.R. 608, 612 (Bankr. S.D. Ohio 2007) (quoting Terlecky v. Beneficial Ohio, Inc. (In re Key), 292 B.R. 879, 883 (Bankr. S.D. Ohio 2003)); see also Shaker Corlett Land Co. v. Cleveland, 139 Ohio St. 536 (1942). The Bankruptcy Code expressly provides that a bankruptcy trustee is a bona fide purchaser regardless of actual knowledge. See In re Zaptocky, 250 F.3d at 1027 (“actual knowledge does not undermine [trustee’s] right to avoid a prior defectively executed mortgage”). Because actual knowledge does not affect the trustee’s strong-arm power, contrary to the assertions made by the defendants, the Court need only determine whether the trustee had constructive knowledge of the prior interest held by Deutsche Bank.

Ohio law provides that “an improperly executed mortgage does not put a subsequent bona fide purchaser on constructive notice.” In re Zaptocky, 250 F.3d at 1028. Ohio courts have refused to allow a recorded mortgage to give constructive notice when the mortgage has been executed in violation of a statute. See In re Nowak, 104 Ohio St. 3d 466, 469 (2004) (listing cases). The first question, then, is whether the Mortgage was executed in compliance with, or substantially conforms to applicable statutory law.

The Mortgage Was Not Properly Executed in Accordance with Ohio Revised Code § 5301.01

Ohio Revised Code § 5301.01, requires four separate acts to properly execute a mortgage: (1) the mortgage shall be signed by the mortgagor; (2) the mortgagor shall acknowledge his signing in front of a notary public, or other qualified official; (3) the official shall certify the acknowledgment; and (4) the official shall subscribe his name to the certificate of acknowledgment. Ohio Rev. Code § 5301.01(A) (2004); see Drown v. GreenPoint Mortgage Funding, Inc. (In re Leahy), 376 B.R. 826, 832 (Bankr. S.D. Ohio 2007) (listing four requirements provided by Ohio Rev. Code. § 5301.01).[ 2 ] The first issue in this case is whether the certificate of acknowledgment, which omitted the name of the borrower, satisfies the third requirement to proper execution of a mortgage.

Certification of an acknowledgment is governed by Ohio Revised Code sections 147.53-147.58. Ohio Revised Code section 147.53 provides:

The person taking an acknowledgment shall certify that:

(A) The person acknowledging appeared before him and acknowledged he executed the instrument;

(B) The person acknowledging was known to the person taking the acknowledgment, or that the person taking the acknowledgment had satisfactory evidence that the person acknowledging was the person described in and who executed the instrument.

The Ohio Revised Code further provides that a certificate of acknowledgment is acceptable in Ohio if it is in a form prescribed by the laws or regulations of Ohio or contains the words “acknowledged before me,” or their substantial equivalent. Ohio Rev. Code § 147.54. Ohio’s statutory short form acknowledgment for an individual is as follows:

  State of ________

  County of ________

  The foregoing instrument was acknowledged before me this (date) by
  (name of person acknowledged.)

  (Signature of person taking acknowledgment)
  (Title or rank) (Serial number, if any)

Ohio Rev. Code § 147.55(A).

The trustee argues that the Mortgage is invalid because the certification of acknowledgment fails to indicate or recite who appeared before the notary public as required by Ohio law. The Court agrees. Recent case law, including a 2008 decision from the Sixth Circuit BAP, supports the trustee’s position that an acknowledgment is defective if it fails to identify the person whose signature is being acknowledged. See In re Nolan, 383 B.R. 391, 396 (6th Cir. B.A.P. 2008); In re Sauer, 417 B.R. 523, (Bankr. S.D. Ohio 2009); Daneman v. Nat’l City Mortg. Co. (In re Cornelius), 408 B.R. 704, 708 (Bankr. S.D. Ohio 2009) (“The absence of the name of the mortgagee acknowledging election is the functional equivalent of no certificate of acknowledgment and renders an acknowledgment insufficient.”); Drown v. Countrywide Home Loans, Inc. (In re Peed), 403 B.R. 525, 531 (Bankr. S.D. Ohio 2009) affirmed at No. 2:09cv347 (S.D. Ohio May 1, 2009); Terlecky v. Countrywide Home Loans, Inc. (In re Baruch), No. 07-57212, Adv. No. 08-2069, 2009 Bankr. Lexis 608 at *22 (Bankr. S.D. Ohio Feb. 23, 2009) (“An acknowledgment clause containing nothing relative to the mortgagor’s identity is insufficient; rather, an acknowledgment clause must either identify the mortgagor by name or contain information that permits the mortgagor to be identified by reference to the mortgage.”); In re Leahy, 376 B.R. at 832. See also Smith’s Lessee v. Hunt, 13 Ohio 260, 269 (1844) (holding that court was unable to infer name of grantor when acknowledgment was blank as to the grantor and, thus, the mortgage was defective and did not convey title).

The holdings in Nolan, Smith’s Lessee, and similar cases are also supported by case law interpreting almost identical statutory provisions for acknowledgment clauses in Kentucky and Tennessee. See, e.g., Gregory v. Ocwen Fed. Bank (In re Biggs), 377 F.3d 515 (6th Cir. 2004) (affirming bankruptcy court’s decision avoiding deed of trust under section 544 and Tennessee law when deed of trust omitted names of acknowledging parties); Select Portfolio Servs. v. Burden (In re Trujillo), 378 B.R. 526 (6th Cir. B.A.P. 2007) (affirming bankruptcy court’s decision avoiding mortgage under section 544 and Kentucky law when debtor was not named or identified in certificate of acknowledgment).

Although no argument was made, the execution of the Mortgage does not “substantially comply” with the statutory requirements. When the validity of a mortgage is challenged for failure to comply with the statutory mandates of Ohio Revised Code section 5301.01, a court can “review the nature of the error and the balance of the document to determine whether or not the `instrument supplies within itself the means of making the correction.’ ” Menninger v. First Franklin Fin. Corp. (In re Fryman), 314 B.R. 137, 138 (Bankr. S.D. Ohio 2004) (quoting Dodd v. Bartholomew, 44 Ohio St. 171, 176 (1886)). This principle enunciated by the Dodd court essentially allows a court to determine whether the execution of a mortgage is in “substantial compliance” with section 5301.01. See In re Fryman, 314 B.R. at 138. Under Ohio law, a mortgage that substantially complies with section 5301.01 will be considered valid. See Drown v. EverHome Mortg. Co. (In re Andrews), 404 B.R. 275, 279 (Bankr. S.D. Ohio 2008) (citing Mid-American Nat’l Bank & Trust, 451 N.E.2d 1243, 1245-46) (Ohio Ct. App. 1982)).

Nothing in the present case provides evidence of substantial compliance with section 5301.01. See In re Peed, 403 B.R. at 536 (presence of initials on each page of mortgage, including acknowledgment clause page, did not substantially comply with requirement that acknowledgment clause identify person whose signature is being acknowledged); accord Bank of America N.A. v. Corzin, (In re Bergman), 2010 U.S. Dist. LEXIS 8755 Case No. 5:09cv2520 (N.D. Ohio Feb. 2, 2010) (same), In re Cornelius, 408 B.R. at 708 (same); In re Andrews, 404 B.R. at 279 (same). Therefore, the Mortgage was improperly executed because the certification of acknowledgment fails to indicate or recite who appeared before the notary public as required under Ohio Revised Code section 5301.01.

The Second Foreclosure Action Precludes the Trustee from Avoiding the Mortgage under 11 U.S.C. § 544

Having found that the Mortgage is defective, the Court must determine whether the trustee is charged with constructive notice of Deutsche Bank’s interest as a result of either of the foreclosure actions. This Court finds that the second foreclosure action imparted constructive notice to the trustee, under the rule of lis pendens.

The most recent version of Ohio’s lis pendens statute provides that “[w]hen a complaint is filed, the action is pending so as to charge a third person with notice of its pendency. While pending, no interest can be acquired by third persons in the subject of the action, as against the plaintiff’s title.” Ohio Rev. Code Ann. § 2703.28. Thus, the filing of a foreclosure complaint prior to the date of filing of the bankruptcy petition imparts constructive notice to a bankruptcy trustee of the plaintiff’s interest, whatever that might be, in the property. See Treinish v. Norwest Bank Minn. (In re Periandri), 266 B.R. 651, 659 (6th Cir. BAP 2001).

As to the June 25, 2008, foreclosure, filed by Deutsche Bank, the trustee cannot be charged with constructive notice because the case was not pending at the commencement of the bankruptcy petition on May 31, 2009. The section requires that the case be “pending” in order to charge third parties with notice. Ohio Rev. Code Ann. § 2703.28.

Deutsche Bank asserts that because the second foreclosure action was pending when the case was filed, the trustee was on notice of Deutsche Bank’s interest due to the fact it was a defendant and the complaint listed it as holding an interest in the property. This Court agrees. “The Ohio lis pendens statute operates to provide constructive notice of the pendency of a suit concerning specifically described property and with it the knowledge, albeit deemed or imputed, of all claims against the property that might reasonably be discerned from an investigation into the circumstances of the litigation.” In re Periandri, 266 B.R. at 656. The Ohio Supreme Court has quoted this passage from Periandri, holding that lis pendens puts a prospective purchaser on notice of any possible claims to the subject property. See Beneficial Ohio, Inc. v. Ellis, 121 Ohio St. 3d 89, 92 (Ohio 2009) (“the statute places the burden upon [third persons] to examine the county records to determine whether a lawsuit involving the property is pending . .. . a person who seeks to acquire an interest in property should bear the responsibility for checking county records.”) See also Stern v. Stern, No. 97 JE 77, 1999 WL 1243316 at *3 fn. 2 (Ohio App. 1999) (“Pursuant to R.C. 2703.26, which is the codification of the doctrine of lis pendens, a purchaser is charged with notice of any issues presented in a pending lawsuit which directly concern the property to be purchased.”)

The complaint, taken as a whole, provides constructive notice of the interest of Deutsche Bank. The complaint provides in part

the following named defendants, to wit: David Cleary, Jr., Spouse, if any, of David Cleary Jr., Deutsche Bank National Trust Company, as Indenture Trustee for New Century Home Equity Loan Trust 2004-2, Beneficial Ohio, Inc., and James Rokakis, Treasurer of Cuyahoga County, Ohio, have or may claim to have some interest in or lien upon said premises, but Plaintiff, not being fully advised as to the extent, if any, of such liens or claims, says that the same, if any, are inferior and subsequent to the lien of Plaintiff. (See Preliminary Judicial Report, Exhibit C.)

Exhibit C to the Complaint lists Deutsche Bank as an interest holder by way of a second mortgage, in the amount of $104,500. As a result of lis pendens, third parties had constructive notice of the interest of Deutsche Bank at the commencement of the bankruptcy case, and therefore the trustee cannot avoid the mortgage pursuant to her strong arm powers. “When any purchaser would have constructive knowledge of the mortgage, the trustee, cannot assume the position of a hypothetical BFP because no such good-faith purchaser can exist.” Argent Mortgage Company, LLC v. Drown (In re Bunn), 578 F.3d 487, 489 (6th Cir. 2009).

The Perfection of Deutsche Bank’s Interest by way of Lis Pendens is an Avoidable Preferential Transfer

A trustee may avoid as a preference any transfer of an interest of the debtor’s property that is for the benefit of a creditor, on account of an antecedent debt, made while the debtor was insolvent within 90 days before the filing of a bankruptcy case that allows the creditor to receive more than what it would have received in a typical liquidation. 11 U.S.C. § 547(b). Additionally, “a transfer of real property other than fixtures, but including the interest of a seller or purchaser under a contract for the sale of real property, is perfected when a bona fide purchaser of such property from the debtor against whom applicable law permits such transfer to be perfected cannot acquire an interest that is superior to the interest of the transferee.” 11 U.S.C. § 547(e)(1). Thus, this Court must determine whether a “transfer” occurred. The Sixth Circuit BAP has held that lis pendens provides constructive notice of a defectively acknowledged mortgage but that because the filing of a notice of lis pendens “took place within the preference period, it is considered a transfer, subject to avoidance as a preference, assuming the other required elements of a preference exist.” Kendrick v. CIT Small Business Lending Corp. (In re Gruseck), No. 06-8091, 2008 WL 1756243 at *8 (6th Cir. BAP 2008). See also Hurst Concrete Products Inc. v. Lane (In re Lane), 980 F.2d 601, 604 (9th Cir 1992) (because the recording of the lis pendens operated to perfect the filer’s interest against bona fide purchasers, the recording was a transfer under § 547(e)(1)(A)). Here, a transfer occurred because the trustee could no longer acquire an interest superior to the interest of Deutsche Bank upon the filing of the foreclosure complaint. The filing of the complaint acted to perfect Deutsche Bank’s interest as against third parties (while the suit was pending) such that no bona fide purchaser could exist.

It is undisputed that the bankruptcy was filed on May 31, 2009, and the foreclosure was filed only three days prior on May 28, 2009. Because a transfer of property of the debtor on account of a debt incurred in 2008, took place within the 90 day preference window that allowed Deutsche Bank to receive more than it would have as an unsecured creditor, the transfer is avoidable under 11 U.S.C. § 547.

CONCLUSION

For the reasons stated above, the Court holds that the certificate of acknowledgment in the Mortgage at issue is defective, that the filing of the second foreclosure complaint provided the trustee with constructive notice, and the that trustee may avoid the Mortgage as a preferential transfer. Accordingly, the trustee’s motion for partial summary judgment is granted. While it appears that this decision is largely dispositive, the precise interests and relative priorities of all parties have yet to be determined. Therefore, this is not a final judgment for purposes of 28 U.S.C. § 158. See Bankr. Rule 7054 and Fed R. Civ. P. 54(b). The Court will conduct a status conference at 1:30 p.m. on July 20, 2010. Counsel shall be prepared to advise the Court as to what additional steps are needed to resolve all remaining claims in this adversary proceeding.

IT IS SO ORDERED.

1. This Memorandum of Opinion is not intended for official publication.
2. In Zaptocky, the Sixth Circuit identified “three major prerequisites for the proper execution of a mortgage: (1) the mortgagor must sign the mortgage deed; (2) the mortgagor’s signature must be attested by two witnesses; and (3) the mortgagor’s signature must be acknowledged or certified by a notary public.” Zaptocky, 250 F.3d at 1024. The differences between Zaptocky’s three requirements and Leahy’s four requirements are (A) the deletion in Leahy of Zaptocky’s second requirement — attestation by two witnesses — due to a change in the statute, and (B) the Leahy court’s breaking down of Zaptocky’s third requirement — certification of acknowledgment — into three separate parts.

This copy provided by Leagle, Inc.

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



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