Michigan Supreme Court
Lansing, Michigan

January 30, 2012

AARON RICHARD,
Plaintiff-Appellee,

v

SCHNEIDERMAN & SHERMAN, P.C.,
Defendant-Appellant,

and

GMAC MORTGAGE, and MORTGAGE
ELECTRONIC REGISTRATION SYSTEMS,
INC.,
Defendants-Appellees.
_________________________________________/

By order of December 29, 2011, the proceedings in this case were automatically
stayed by the filing of a petition in bankruptcy. On order of the Court, the bankruptcy
stay having been lifted and the case having been reopened, the application for leave to
appeal the August 25, 2011 judgment of the Court of Appeals is considered and, pursuant
to MCR 7.302(H)(1), in lieu of granting leave to appeal, we VACATE the judgment of
the Court of Appeals and we REMAND this case to the Court of Appeals for
reconsideration in light of Residential Funding Co, LLC, f/k/a Residential Funding Corp
v Saurman, 490 Mich ___ (decided November 16, 2011).

MARILYN KELLY, J., would grant leave to appeal.

Scribd

‘Kafkaesque’ nightmares plague homeowners facing foreclosure

iWATCH NEWS-

Like millions of stories from the great recession, this one begins with homeowners struggling to keep up with a mortgage payment they simply couldn’t afford.

By 2009, the adjustable interest rate for Cassandra and Bernard Gray’s Durham, N.C., home loan had spiked to more than 12 percent. “I didn’t know if we were going to be on the street or in a shelter,” Cassandra recalls. “We couldn’t afford groceries. It got pretty bad.”

They were thrilled to sign up for a modification plan with their loan servicer, GMAC Home Mortgage, Cassandra Gray said…

[iWATCH NEWS]

Oh my, look what we have here…big mistake because I don’t think this is going very far….his franchises that is.

Bill Warner Private Investigator-

My source in Fort Lauderdale tells me that attorney David J. Stern has rolled over his $Millions in foreclosure home profits and the cash he got up front from the DJSP Entreprises Inc. FKA Chardan 2008 China Acquisition Corp deal into at least 150 Five Guys Burger and Fries Franchise’s, will that be fries with your meal sir?

It appears that David J. Stern is buying ”Five Guys Burger and Fries Franchise’s” in bulk, Stern is trying to acquire 500 Burger Joints NATIONWIDE…

[BILL WARNER]

image: Bill Warner

via: Leagle

 PATTERSON v. GMAC MORTGAGE, LLC

 Reginald A. Patterson and Diana V. Patterson, v. GMAC Mortgage, LLC.

 No. 2100490.

 Decided January 20, 2012.

 PER CURIAM.¹

Reginald A. Patterson and Diana V. Patterson appeal from a judgment in favor of GMAC Mortgage, LLC (“GMAC Mortgage”). We vacate the judgment of the trial court and dismiss the appeal.

On September 4, 2007, GMAC Mortgage brought an ejectment action against the Pattersons. GMAC Mortgage alleged that the Pattersons had mortgaged their house located on Southcrest Trail in Bessemer (“the house”) to Option One Mortgage Corporation (“Option One”), that Option One had transferred the mortgage to GMAC Mortgage, that GMAC Mortgage had foreclosed the mortgage on August 7, 2007, and that GMAC Mortgage was the owner of the house by virtue of the foreclosure sale. GMAC Mortgage further alleged that it had made a written demand for possession of the house in accordance with § 6-5-251(a), Ala. Code 1975,² and that the Pattersons had not vacated the house. As relief, GMAC Mortgage sought possession of the house, damages for wrongful detention of the house, and a determination that the Pattersons had forfeited their right to redeem the house by failing to vacate it within 10 days after GMAC Mortgage demanded possession.³ Answering, the Pattersons asserted, among other things, that the foreclosure was unlawful. They also asserted a counterclaim seeking a determination that the foreclosure was unlawful.

GMAC Mortgage moved for a summary judgment and later supplemented its summary-judgment motion with additional evidence. The Pattersons submitted evidence in opposition to the summary-judgment motion.

The evidence submitted by GMAC Mortgage in support of its summary-judgment motion included the foreclosure deed purporting to convey title to the house to GMAC Mortgage. The foreclosure deed recites that GMAC Mortgage accelerated the debt secured by the mortgage.⁴ The foreclosure deed also recites that GMAC Mortgage gave notice of the foreclosure of the mortgage in a newspaper of general circulation in Jefferson County on May 19, May 26, and June 2, 2007, and that GMAC Mortgage foreclosed the mortgage on August 7, 2007. The evidence submitted by GMAC Mortgage also included a written assignment executed by Option One on August 6, 2007, in which Option One assigned the mortgage to GMAC Mortgage.

Following a hearing, the trial court entered an order granting GMAC Mortgage’s summary-judgment motion insofar as it sought a determination that the foreclosure was valid but denied the motion in all other respects on the ground that a genuine issue of material fact existed regarding whether the Pattersons had received notice of GMAC Mortgage’s demand for possession of the house after the foreclosure.

Following a bench trial regarding the issue whether the Pattersons had received notice of GMAC Mortgage’s demand for possession, the trial court entered a judgment (1) finding that GMAC Mortgage had given the Pattersons notice of its demand for possession, (2) ordering the Pattersons to deliver possession of the property to GMAC Mortgage, and (3) ruling that the Pattersons had forfeited their right to redeem the property; however, the trial court did not award any damages for wrongful detention of the property. The Pattersons timely appealed to the supreme court, which transferred the appeal to this court pursuant to § 12-2-7(6), Ala. Code 1975.

On appeal, the Pattersons assert, among other things, that the trial court erred in determining that the foreclosure was valid. While the Pattersons’ appeal was pending, this court delivered its decision in Sturdivant v. BAC Home Loans, LP, [Ms. 2100245, Dec. 16, 2011] ___ So. 3d ___ (Ala. Civ. App. 2011). In Sturdivant, BAC Home Loans, LP (“BAC”), initiated foreclosure proceedings on the mortgage encumbering Bessie T. Sturdivant’s house before the mortgage had been assigned to BAC. BAC then held a foreclosure sale at which it purchased Sturdivant’s house, and the auctioneer executed a foreclosure deed purporting to convey title to Sturdivant’s house to BAC. BAC was assigned the mortgage the same day as the foreclosure sale. Thereafter, BAC brought an ejectment action against Sturdivant, claiming that it owned title to her house by virtue of the foreclosure deed. After the trial court entered a summary judgment in favor of BAC, Sturdivant appealed to the supreme court, which transferred her appeal to this court. We held that BAC lacked authority to foreclose the mortgage because it had not been assigned the mortgage before it initiated foreclosure proceedings and that, therefore, the foreclosure and the foreclosure deed were invalid. We further held that, because the foreclosure and the foreclosure deed were invalid, BAC did not acquire legal title to Sturdivant’s house through the foreclosure deed and thus BAC did not own an interest in the house when it commenced its ejectment action. We further held that, because BAC did not own any interest in Sturdivant’s house when it commenced its ejectment action, BAC did not have standing to bring that action and, consequently, the trial court never acquired subject-matter jurisdiction over the ejectment action. Because BAC did not have standing to bring its ejectment action and the trial court never acquired jurisdiction over the ejectment action, we held that the judgment of the trial court was void, and we vacated that judgment. Moreover, because a void judgment will not support an appeal, we dismissed the appeal.

In the case now before us, GMAC Mortgage, like BAC in Sturdivant, had not been assigned the mortgage before it initiated foreclosure proceedings. Consequently, under our holding in Sturdivant, GMAC Mortgage lacked authority to foreclose the mortgage when it initiated the foreclosure proceedings, and, therefore, the foreclosure and the foreclosure deed upon which GMAC based it ejectment claim are invalid. Moreover, under our holding in Sturdivant, because GMAC Mortgage did not own any interest in the house, it lacked standing to bring its ejectment action against the Pattersons. Because GMAC Mortgage lacked standing to bring the ejectment action, the trial court never acquired subject-matter jurisdiction over the ejectment action. Accordingly, the judgment of the trial court is void and is hereby vacated. Moreover, because a void judgment will not support an appeal, we dismiss this appeal. Id.

JUDGMENT VACATED; APPEAL DISMISSED.

Pittman, Thomas, and Moore, JJ., concur.

Thompson, P.J., concurs in the result, with writing.

Bryan, J., dissents, with writing.

THOMPSON, Presiding Judge, concurring in the result.

Reginald A. Patterson and Diane V. Patterson executed a mortgage, secured by their house, to Option One Mortgage Corporation on January 25, 2006, and they later defaulted on the mortgage. GMAC Mortgage, LLC, initiated foreclosure proceedings, and, in May 2007, GMAC began publishing notice of its intent to conduct a foreclosure sale. On August 6, 2007, Option One assigned the mortgage to GMAC, and the next day, August 7, 2007, GMAC conducted the foreclosure sale and purchased the property at that sale. Also on August 7, 2007, GMAC sent the Pattersons a letter demanding possession of the property.

In their brief on appeal, the Pattersons argue, among other things, that GMAC failed to demonstrate proof of a valid foreclosure. Specifically, the Pattersons argue, as they did before the trial court, that GMAC, which first obtained an interest in the property the day before it conducted its foreclosure sale, did not have an interest in the property at the time it initiated the foreclosure process and that one without an interest in a mortgage may not institute foreclosure proceedings. In support of those arguments, the Pattersons cite § 6-6-280, Ala. Code 1975; Steele v. Federal Nat’l Mortgage Ass’n, 69 So.3d 89, 93 (Ala. 2010) (“[Section 6-6-280(b)] unambiguously states that a complaint seeking ejectment `is sufficient if it alleges that the plaintiff was possessed of the premises or has the legal title thereto, properly designating or describing them, and that the defendant entered thereupon and unlawfully withholds and detains the same.’”); MacMillan Bloedell, Inc. v. Ezell, 475 So.2d 493 (Ala. 1985); Kelly v. Carmichael, 217 Ala. 534, 117 So.2d 67 (1928); and Berry v. Deutche Bank Nat’l Trust Co., 57 So.3d 142 (Ala. Civ. App. 2010).

While the Pattersons’ appeal was pending in this court, this court decided Sturdivant v. BAC Home Loans Servicing, LP, [Ms. 2100245, Dec. 16, 2011] So. 3d (Ala. Civ. App. 2011). In Sturdivant, supra, this court considered an appeal from a summary judgment proceeding in which the record demonstrated that in September 2009 BAC Home Loans Servicing, LP, had initiated foreclosure proceedings with regard to a mortgage Bessie T. Sturdivant had executed and that was secured by Sturdivant’s house. BAC Home Loans conducted a foreclosure sale on December 1, 2009, and, also on December 1, 2009, it received an assignment from the holder of the mortgage on Sturdivant’s property. BAC Home Loans, relying on the deed it received as a result of the December 1, 2009, foreclosure sale, sought to eject Sturdivant from the property. This court noted that in order to demonstrate a prima facie case in support of its claim in ejectment, BAC Home Loans was required to show, among other things, that it had legal title to the property. Sturdivant v. BAC Home Loans Servicing, LP, So. 3d at (citing § 6-6-280(b), Ala. Code 1975). In that case, BAC Home Loans claimed that it had legal title by virtue of the deed it had received after it had conducted the foreclosure sale. Article 1 of Title 35, Chapter 10, Ala. Code 1975, governs sales conducted to foreclose on a mortgage and, in pertinent part, requires that a power of sale may be executed by “any person … who, by assignment or otherwise, becomes entitled to the money” secured by the mortgage. § 35-10-1, Ala. Code 1975. In Sturdivant, this court, relying on several of the authorities cited in the Pattersons’ brief on appeal in this case, concluded that because BAC Home Loans had no interest in the property at the time it initiated its foreclosure proceedings, the foreclosure sale was invalid. So. 3d at (citing § 35-10-9, Ala. Code 1975). This court held that, because the foreclosure sale was invalid, BAC Home Loans had no legal title on which to base it claim in ejectment and, as a result, that BAC Home Loans lacked standing to assert its ejectment action. Sturdivant, So. 3d at.

In this case, GMAC initiated foreclosure proceedings at least four months before it obtained an interest in the mortgage.⁵ GMAC was first assigned an interest in the mortgage on August 6, 2007, the day before it conducted its already scheduled August 7, 2007, foreclosure sale. Given the Pattersons’ arguments on appeal, the authorities they cited in support of those arguments, and the holding of Sturdivant, supra, I agree with the Pattersons that GMAC failed to demonstrate that it had standing to prosecute its ejectment action and that the trial court erred in allowing GMAC to prosecute its action. I therefore concur in the result reached by the main opinion.

BRYAN, Judge, dissenting.

In Sturdivant v. BAC Home Loans Servicing, LP, [Ms. 2100245, Dec. 16, 2011] ___ So. 3d ___ (Ala. Civ. App. 2011), BAC Home Loans Servicing, LP (“BAC”), brought an ejectment action against Bessie T. Sturdivant, seeking, among other things, possession of her house. BAC based its claim to title to Sturdivant’s house on a foreclosure deed that had resulted from the foreclosure of a mortgage encumbering Sturdivant’s house. BAC had foreclosed the mortgage as the assignee of the mortgagee. The trial court entered a summary judgment in favor of BAC, and Sturdivant appealed. The main opinion in Sturdivant held that the foreclosure conducted by BAC and the foreclosure deed purporting to convey title to Sturdivant’s house to BAC were invalid because BAC had not been assigned or succeeded to the interest of the mortgagee in the mortgage when BAC commenced the foreclosure proceedings. Moreover, relying on the supreme court’s decision in Cadle v. Shabani, 950 So.2d 277 (Ala. 2006), the main opinion held that, because the foreclosure and the foreclosure deed were invalid, BAC lacked standing to prosecute its ejectment action, the trial court never acquired subject-matter jurisdiction over that action, and, therefore, the judgment of the trial court was void.

I dissented from the main opinion in Sturdivant because, in my opinion, Cadle was distinguishable on its facts from Sturdivant; in Cadle, the ejectment plaintiff did not have paper title to the property that was the subject of the ejectment action when it commenced its ejectment action, whereas BAC, the ejectment plaintiff in Sturdivant, did have paper title to the property that was the subject of the ejectment action when it commenced its ejectment action. It was my opinion that Sturdivant was entitled to assert and prove that the paper title upon which BAC relied, i.e., the foreclosure deed, was invalid as an affirmative defense to BAC’s ejectment action but that Sturdivant’s successfully proving that BAC’s paper title was invalid did not deprive BAC of standing to bring the ejectment action and did not justify the conclusion that the trial court had never acquired subject-matter jurisdiction over the ejectment action. Moreover, because, in my opinion, proof that BAC’s paper title was invalid did not deprive BAC of standing or deprive the trial court of subject-matter jurisdiction over the ejectment action, I disagreed with the main opinion’s basing its decision on a ground that had not been argued to the trial court because of the well-established principle that an appellate court may not base a reversal of the trial court’s judgment on a ground that was not argued to the trial court. See Smith v. Equifax Servs., Inc., 537 So.2d 463, 465 (Ala. 1988). As the supreme court explained in Smith:

“An appellee can defend the trial court’s ruling with an argument not raised below, for this Court `will affirm the judgment appealed from if supported on any valid legal ground.’ Tucker v. Nichols, 431 So.2d 1263, 1265 (Ala. 1983). There is a rather obvious fundamental difference in upholding the trial court’s judgment and reversing it; this Court will not reverse the trial court’s judgment on a ground raised for the first time on appeal, Costarides v. Miller, 374 So.2d 1335 (Ala. 1979), even though it affirms judgments on bases not asserted in the trial court, Bank of the Southeast v. Koslin, 380 So.2d 826 (Ala. 1980). This difference is predicated on the `long-standing, well-established rule that [in order to secure a reversal] the appellant has an affirmative duty of showing error upon the record.’ Tucker v. Nichols, supra, at 1264.”

537 So. 2d at 465(emphasis on “affirms” in original; other emphasis added).

In my opinion, Cadle is distinguishable from the case now before us for the same reason it was distinguishable from Sturdivant — the ejectment plaintiff in Cadle did not have paper title to the property when it commenced its ejectment action, whereas GMAC Mortgage, LLC (“GMAC Mortgage”), the ejectment plaintiff in the case now before us, did have paper title to Reginald A. Patterson and Diane V. Patterson’s house when it commenced its ejectment action. Therefore, consistent with my dissent in Sturdivant, I believe that, although the Pattersons were entitled to prove that GMAC’s foreclosure and foreclosure deed were invalid as an affirmative defense to GMAC Mortgage’s ejectment claim, proof that the foreclosure and the foreclosure deed were invalid did not establish that GMAC Mortgage lacked standing to prosecute the ejectment action or that the trial court lacked subject-matter jurisdiction over the ejectment action. Consequently, in my opinion, the Pattersons are subject to the long-standing principle that an appellate court may not base a reversal of the trial court’s judgment on a ground that was not argued to the trial court. See Smith. Although the Pattersons argued to the trial court that the foreclosure and the foreclosure deed were not valid, they did not argue to the trial court that they were invalid on the ground that the mortgage had not been assigned to GMAC Mortgage when it commenced the foreclosure proceedings. Consequently, I dissent from the main opinion because it bases its decision on a ground that was not argued to the trial court. See Smith.

Footnotes

1. Because of the issues involved, this appeal was held in abeyance pending the adjudication of the appeal in Sturdivant v. BAC Home Loans Servicing, LP, [Ms. 2100245, Dec. 16, 2011] ___ So. 3d ___ (Ala. Civ. App. 2011).

Back to Reference

2. Section 6-5-251(a) provides:”The possession of the land must be delivered to the purchaser or purchaser’s transferees by the debtor or mortgagor if in their possession or in the possession of anyone holding under them by privity of title, within 10 days after written demand for the possession has been made by, or on behalf of, the purchaser or purchaser’s transferees.”

Back to Reference

3. Section 6-5-251(c), Ala. Code 1975, provides:”Failure of the debtor or mortgagor or anyone holding possession under him or her to comply with the provisions of this section forfeits the right of redemption of the debtor or one holding possession under the debtor.”

Back to Reference

4. The Pattersons deny that they received notice of the acceleration of the debt.

Back to Reference

5. The record indicates that notice of the foreclosure by publication was first made in May 2007 and completed in June 2007. The Pattersons contend that they were not provided notice of the acceleration of the mortgage indebtedness or of foreclosure, and the record does not contain evidence that they received those notices.

Scribd

Folks, please tweet, forward, whatever. This is a huge story that deserves to be given major coverage in MSM. Local judges need to be aware that they are being handed forged documents.

FDL-

In 2010, the Law Offices of David J. Stern spun off the robo signing document mill part of his business into a separate, publicly traded company.

Stern pocketed some $60 million from that deal. The investors got the company and all its documents, internal procedures and everything you would need in order to find out what really happened within the Stern document mill.

A little after 8 AM EST today, a filing went up on the SEC’s Edgar database. It’s a Complaint in lawsuit, dated yesterday.

[FIRE DOG LAKE]

Scribd

Mortgage Fraud

Law Offices of David J. Stern
ProVest
PTA

Action Date: January 4, 2012
Location: FT. Lauderdale, FL

In the lawsuit filed by DJSP Enterprises against David J. Stern and the Law Offices of David J. Stern, there are also allegations involving ProVest, the process server used by Stern and most of the other major foreclosure mills hired by Lender Processing Services in over 20 states.

The allegations regarding ProVest are found in paragraphs 36-38:

36. Prior to the Transaction, the Seller Defendants also knowingly and systematically inflated their process of service costs to the Court. Specifically, Seller Defendants engineered a fraudulent scheme whereby they directed their process servicing work to a process servicing company called ProVest. The Seller Defendants caused each file to generate four or five separate fees for service of process regardless of whether service of process on multiple defendants was necessary or appropriate and regardless of whether service of process for multiple defendants could be achieved at the same address.

37. In exchange for receiving these inflated service of process fees, ProVest, in turn, routinely referred back to PTA servicing requests for “skip tracing” to locate defendants for whom ProVest purportedly did not have accurate street address information to effect service of process. ProVest “hired” and paid fees to PTA for “skip tracing” services despite the fact that ProVest had the ability and resources to perform “skip tracing” itself and routinely did so itself.

38. The Seller Defendants’ arrangement with ProVest amounted to a kickback scheme. DS Law padded and inflated its process servicing costs which were billed to its clients and added to the court costs assessed to foreclosure defendants. In exchange for feeding this work to ProVest, PTA earned manufactured “skip tracing” fees which inflated PTA’s revenues and profits and which represented another way in which the Seller Defendants artificially inflated the revenues of the Target Business prior to the Transaction.

Mortgage Fraud

DJSP Enterprises
Law Offices of David J. Stern

Action Date: January 4, 2012
Location: FT. Lauderdale, FL

DJSP Enterprises, the publicly-traded company that was supposed to make millions for investors from the foreclosure services it provided to The Law Offices of David Stern (“the Stern Firm”), sued David J. Stern and the Law Offices of David Stern.

Stern Law mortgage foreclosure caseload rose from 15,000 in 2006 to 70,400 in 2009.

In 2009, Stern Law handled 20% of all foreclosures in Florida.

Stern Law’s clients included all 10 of the top 10, and 17 of the top 20 mortgage servicers in the U.S. including Fannie, Freddie, Citibank, BOA, Goldman Sachs, GMAC and Wells Fargo.

The non-legal, back room servicers related to foreclosures included REO services: property inspection, valuation, eviction, broker assignment – these were performed by DJSP Enterprises – the sole client was Stern Law.

Here are Paragraphs 29 -35:

29. The Seller Defendants fraudulently induced Plaintiffs DAL and DJSP into entering into the Transaction by fraudulently and artificially inflating the Target Business’ actual revenues, by intentionally failing to disclose that the Target Business and DS Law were not, in fact, operating in accordance with all applicable laws, and by concealing that DS Law was in jeopardy of losing its largest clients due to DS Law’s unlawful conduct. Indeed, before entering into the Transaction, the Seller Defendants knew that DS Law and the Target Business had been systematically falsifying and/or back-dating pertinent legal documents, submitting such documents to the courts, routinely misplacing and losing original key documents, filing foreclosures with inaccurate and/or incomplete documents, prosecuting foreclosure cases without obtaining proper service of process, and were in jeopardy of losing the Seller Defendants’ largest foreclosure clients due to such conduct.

30. By cutting corners in the foreclosure process without following the rule of law, the Defendants artificially reduced the expenses of the Target Business which falsely inflated the profitability of the Target Business.

31. To summarize, the Seller Defendants failed to disclose to DJSP and DAL that DS Law and the Target Business were systematically operating in an unlawful manner. In addition, the Seller Defendants failed to disclose to DJSP and DAL that the Target Business’ reported revenues were not accurate, inflated, and improperly calculated and that the expenses of the business were also distorted due to the systematic practices designed to “shorten” the legal process. The Seller Defendants falsely led DAL and DJSP to believe that they were acquiring a long-term profitable business that operated in accordance with all applicable laws to induce DAL and DJSP to enter into the Transaction.

33. Prior to the Transaction, the Seller Defendants were at all times well aware that DS Law and the Target Business were intentionally perpetuating a fraud on the courts by, inter alia, systematically filing forged documents, forging signatures on such documents, fraudulently backdating documents, improperly notarizing and witnessing documents, fabricating documents, signing affidavits without reviewing or verifying the information contained therein, prosecuting foreclosure cases without obtaining proper service of process, and filing foreclosures with inaccurate and/or incomplete documents.

34. Indeed, the Seller Defendants directed employees of DS Law and the Target Business to purposefully overlook glaring inaccuracies in foreclosure pleadings and to essentially rubber stamp computer generated documents without reviewing or verifying the accuracy of the documents. New attorneys at DS Law were not only encouraged, but were even ordered to sign legal filings and pleadings without reading them. As a result, false and inaccurate documents were routinely executed and filed with the courts in an effort to hasten foreclosure proceedings and illegally obtain final judgments of foreclosure for the Seller Defendants’ clients.

35. The Seller Defendants even incentivized these unscrupulous and unlawful practices by giving their employees bonuses and extravagant gifts for churning out the highest number of foreclosure cases in the least amount of time. The Seller Defendants encouraged contests between DS Law attorneys to see who could jam a foreclosure case through the courts the fastest.

The irony is that CitiMortgage & GMAC are both shareholders of MERS…Not to mention Freddie Mac is too.

If the courts can’t address clear instances of fraud and injustice, how can they protect our citizens?

 New Deal 2.0-

It has been exactly 18 months since I deposed GMAC Mortgage’s prolific document signer, Jeffrey Stephan, in a case where I was defending a Maine homeowner in foreclosure. Stephan admitted to signing 8,000 to 10,000 foreclosure documents a month (that is about one a minute, if you do the arithmetic), including summary judgment affidavits used by courts as the basis for entering forclosure judgments. Stephan’s affidavits were sent by GMAC to courts all over the country. Obviously, and as Stephan admitted, he did not bother to read those affidavits. He also admitted that he had no idea as to whether the foreclosure affidavits that he signed were true. He didn’t even trouble himself to appear before a notary to be sworn, even though his affidavits said that he had done so. While Stephan admitted that he understood that judges were relying upon his affidavits to take away the homes of homeowners all over the country, he seemed serene and untroubled by his dishonesty in signing these false affidavits. (Conduct like this has since been awarded the slang term “robo-signing,” but I never use it because it fails to adequately describe the dishonesty and deception involved.)

[NEW DEAL 2.0]

A Denmark woman whose case touched off a national uproar over foreclosures with faulty paperwork may finally lose her home.

KJOnline-

By a 5-1 decision released this morning, the Maine Supreme Judicial Court upheld a lower court ruling that allowed loan servicer GMAC Mortgage, despite admittedly flawed practices involved in affadavit signing, to foreclose upon a home in Denmark purchased in 2003 by Nicolle M. Bradbury.

[KJONLINE]

SO WHAT WHO CARES… There are credit unions!

Mass AG: “In this state, banks must follow laws. It appears GMAC acknowledges it has a problem following those laws & being held accountable.”

WSJ-

GMAC Mortgage, the mortgage lender of Ally Financial Inc., is exiting the vast majority of its lending in Massachusetts a day after the state sued it over its foreclosure practices.

The nation’s fifth-largest mortgage originator said it “has taken this action because recent developments have led mortgage lending in Massachusetts to no longer be viable,” ratcheting up the high-stakes mortgage fight there.

Attorney General Martha Coakley sued the five biggest mortgage servicers Thursday, in the first government lawsuit targeting all five for alleged improper foreclosure practices including so-called robo-signing. The practice involves people who allegedly signed many foreclosure documents …

[WALL STREET JOURNAL]

WSJ-

Insurer Financial Guaranty Insurance Co. is suing several Ally Financial Inc. subsidiaries, accusing the government-owned lender of lying about the quality of mortgages it packaged into securities.

Three lawsuits, filed Tuesday in New York State Supreme Court, claim GMAC Mortgage, Residential Capital and other affiliates made “material misrepresentations and omissions” about the “quality of the tens of thousands of mortgage loans” packaged into the securities. FGIC said it issued insurance policies to Ally for the securities based on this information.

[WALL STREET JOURNAL]

Fort Lauderdale, FL (PRWEB) November 14, 2011

On November 14, 2011, Plaintiff Christine Ulbrich filed a nationwide class action lawsuit against GMAC Mortgage, LLC and Balboa Insurance Services, Inc. in the United States District Court for the Southern District of Florida. The lawsuit alleges that GMAC and Balboa illegally backdated force-placed insurance policies and charged borrowers for insurance coverage that was, in some cases, expired on the day it was purchased. The suit also alleges that GMAC and Balboa charged borrowers inflated premiums that were as much as 14 times the market rate. According to Plaintiff’s attorney, Kai Richter, “The whole point of insurance is to protect against future risks. Forcing borrowers to buy expired insurance at inflated premiums is inexcusable.”

The Complaint alleges that GMAC force-placed a windstorm policy on Ulbrich’s property in March 2011, which was backdated for the period from October 1, 2009 to October 1, 2010, and charged Ulbrich almost $10,000 for this already-expired coverage. The lawsuit further alleges GMAC sent Ulbrich a renewal notice on the very same date, stating that “the windstorm insurance coverage we placed on your account has expired,” and then force-placed a second windstorm policy on her property in April 2011, which was backdated by more than six months and cost more than $9,600. According to the Complaint, Ulbrich’s mortgage payments skyrocketed from $1,227.52 per month to $2,695.59 per month after GMAC purchased this backdated coverage, due to an alleged “shortage” in her escrow account. GMAC is now threatening to foreclose on her home because she cannot afford the increased payments, even though she previously was current on her mortgage.

“It is outrageous to drive homeowners into foreclosure by force-placing backdated insurance coverage on their property and charging them inflated premiums for expired coverage,” said Richter. “GMAC received billions of dollars in bailout money from taxpayers, and this is no way to say ‘thank you,’” continued Richter.

In her class action Complaint, Ulbrich seeks relief on behalf of herself and other similarly-situated GMAC borrowers across the country. Ulbrich asserts claims against GMAC for breach of contract, breach of the duty of good faith and fair dealing, breach of fiduciary duty, unjust enrichment, and violation of the Florida Deceptive and Unfair Trade Practices Act. In addition, Ulbrich also asserts an unjust enrichment claim against Balboa, which allegedly accepted premiums for backdated policies and allegedly paid a kickback to GMAC in return.

The case is entitled Ulbrich v.GMAC Mortgage, LLC and Balboa Insurance Services, Inc., No. 0:11-cv-62424 (S.D. Fla.). Plaintiff is represented by Kai Richter, Michelle Drake, and Timothy Selander from Nichols Kaster, PLLP. Nichols Kaster has offices in Minneapolis, Minnesota and San Francisco, California, and is currently pursuing several other cases against major banks for wrongfully force-placing insurance on borrowers, including JPMorgan Chase Bank, N.A., Bank of America, N.A., Wells Fargo Bank, N.A., and RBS Citizens, N.A. (also known as Citizens Bank), and U.S. Bank, N.A.. Additional information is located at http://www.nka.com or may be obtained by calling Nichols Kaster, PLLP toll free at (877) 448-0492.

###

Read the full story at http://www.prweb.com/releases/2011/11/prweb8964133.htm

BANKRUPTCY APPELLATE PANEL OF THE SIXTH CIRCUIT

In re: ELIZABETH R. COLLINS,

Debtor.
No. 10-8085

_____________________________________

J. JAMES ROGAN, Trustee,

Appellant,

v.

LITTON LOAN SERVICING, L.P.,
THE BANK OF NEW YORK, MELLON FKA
THE BANK OF NEW YORK AS SUCCESSOR
TO JP MORGAN CHASE BANK, N.A., AS
TRUSTEE FOR THE BENEFIT OF THE
CERTIFICATE HOLDERS OF POPULAR, ABS,
INC. MORTGAGE PASS-THROUGH
CERTIFICATES SERIES 2005-3,

AIG FEDERAL SAVINGS BANK DBA
WILMINGTON FINANCE,

CITIBANK, NA, and

GMAC MORTGAGE LLC,

Appellees.

Appeal from the United States Bankruptcy Court
for the Eastern District of Kentucky
Bankruptcy Case No. 10-50990; Adv. Proceeding No. 10-05065

EXCERPT:

STEVEN RHODES, Bankruptcy Appellate Panel Judge. J. James Rogan, the trustee in this
chapter 7 case, appeals an opinion and order of the bankruptcy court dismissing his complaint. The
complaint sought a declaratory judgment to determine the validity, extent, and priority of liens on
the real property of the debtor, Elizabeth Collins, held by defendants Litton Loan Servicing, Bank
of New York, GMAC Mortgage, and Wilmington Finance. The trustee also appeals an opinion and
order of the bankruptcy court granting a motion to vacate the default judgment entered against
Wilmington Finance.

For the reasons that follow, as to defendants Litton Loan Servicing and Bank of New York,
the Panel vacates the dismissal and remands the matter for further proceedings to determine who was
the holder of the first mortgage on the date of filing, and if it was either Litton Loan Servicing or
Bank of New York, then whether either was the holder of a fully and properly indorsed note.

[...]

On the day after the first mortgage was recorded, February 5, 2005, Wilmington Finance
assigned the mortgage to Mortgage Electronic Registration Systems, Inc. (“MERS”). On June 16,
2005, this assignment was recorded. (Addendum to Br. of Bank of New York, February 16, 2011,
app. case no. 10-8085, ex. 2.)

The record also includes an assignment dated March 26, 2010, the day after the debtor filed
bankruptcy. MERS assigned this mortgage to the Bank of New York Mellon f/k/a The Bank of New
York, as successor to JPMorgan Chase Bank, N.A. as trustee for the benefit of the certificate holders
of Popular ABS, Inc. Mortgage Pass-Through Certificates Series 2005-3 c/o Litton Loan Servicing.
(bankr. claim 1-1.) On April 7, 2010, which was twelve days after the debtor filed bankruptcy, this
assignment was recorded. Thus, on the day that the debtor filed bankruptcy, it appears that neither
Bank of New York nor Litton Loan Servicing held any interest in the first mortgage. Inexplicably
however, the debtor listed Bank of New York/Litton Loan Servicing on schedule D as the secured
creditor holding the first mortgage. (bankr. dkt. #1.) Schedule D appears to have been filed on the
date of the petition. The record does not provide an explanation for how the debtor would have
known that Bank of New York/Litton Loan Servicing would be the secured creditor prior to the
assignment.

[...]

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