KRISTEN BAIN, Plaintiff,
v.
ONEWEST BANK, F.S.B; DEUTSCHE BANK NATIONAL TRUST COMPANY; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC; REGIONAL TRUSTEE SERVICES CORPORATION; Defendants.
Case No. C09-0149-JCC.
United States District Court, W.D. Washington, Seattle.
March 15, 2011.
Excerpt:
F. Consumer Protection Act
Finally, Plaintiff alleges that Defendants violated the Consumer Protection Act (“CPA”). To state a claim under the CPA, Plaintiff must show (1) an unfair or deceptive act or practice, (2) in trade or commerce, (3) that impacts the public interest, (4) which causes injury to the plaintiff in his or her business or property, and (5) which injury is causally linked to the unfair or deceptive act. Griffith v. Centex Real Estate Corp., 969 P.2d 486, 492 (Wash. Ct. App. 1998).
MERS asserts that Plaintiff has not shown an unfair or deceptive practice on its part, has not shown how any act of MERS impacts the public interest, and presents nothing showing injuries caused by an unfair or deceptive practice by MERS. The Court disagrees. Like her other claims arising under the Deed of Trust Act, Plaintiff’s CPA claims depend on whether MERS may be the beneficiary (or nominee of the beneficiary) under Washington state law. MERS’s attempt to serve as the beneficiary may have been improper under state law and it may have led to widespread confusion regarding home ownership, payment delivery, and negotiable positions. If MERS violated state law, its conduct may very well be classified as “unfair” under the CPA. There is no doubt that MERS’s conduct impacts the public interest.See Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 719 P.2d 531, 537-38 (Wash. 1986) (listing factors for determining public interest); Peterson, supra, at 1362 (“Although MERS is a young company, 60 million mortgage loans are registered on its system.”); R. K. Arnold, Yes, There Is Life on MERS, 11 Prob. & Prop. 32, 33 (1997) (“Some have called MERS the most significant event for the mortgage industry since the formation of Fannie Mae and Freddie Mac. Others have compared it to the creation of uniform mortgage instruments, which have become standard throughout the residential mortgage industry. This suggests that the journey to MERS will have a tremendous effect on the mortgage industry.”). And the harm Plaintiff may have suffered because of MERS’s conduct may include expending resources to avert an unlawful foreclosure and preventing Plaintiff from identifying the real beneficiary and negotiating a new arrangement to avoid foreclosure.
The same reasoning applies to Regional, who also argued that Plaintiff cannot show an unfair or deceptive practice or show an impact on the public interest. Regional asserts that it acted appropriately because it was candid and forthcoming about its identity and its authority to conduct the foreclosure. That Regional was candid about its role is not dispositive. See Carlile v. Harbour Homes, Inc., 194 P.3d 280, 289 (Wash. Ct. App. 2008) (“An unfair or deceptive act or practice need not be intended to deceive, it need only have the capacity to deceive a substantial portion of the public.”). Moreover, just as MERS has its hands in countless home loans affecting the general public, so too does Regional play a key role in numerous foreclosure actions affecting the general public. MERS and Regional ultimately may bear no liability under the CPA, but this Court will await the state-court analysis before ruling on the parties’ motions for summary judgment.[5]
III. CONCLUSION
Plaintiff admits that she has been delinquent in her mortgage payments. A ruling favorable to Plaintiff in this case and others like it cannot and should not create a windfall for all homeowners to avoid upholding their end of the mortgage bargain—paying for their homes. But a homeowner’s failure to make payments cannot grant lenders, trustees, and so-called beneficiaries like MERS license to ignore state law and foreclose using any means necessary. Whether these and similar defendants complied with Washington state law remains unclear.
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.
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.
Washington, D.C., Feb. 11, 2011 — The Securities and Exchange Commission today charged three former senior executives at IndyMac Bancorp with securities fraud for misleading investors about the mortgage lender’s deteriorating financial condition.
The SEC alleges that former CEO Michael W. Perry and former CFOs A. Scott Keys and S. Blair Abernathy participated in the filing of false and misleading disclosures about the financial stability of IndyMac and its main subsidiary, IndyMac Bank F.S.B. The three executives regularly received internal reports about IndyMac’s deteriorating capital and liquidity positions in 2007 and 2008, but failed to ensure adequate disclosure of that information to investors as IndyMac sold millions of dollars in new stock.
IndyMac Bank was a federally-chartered thrift institution regulated by the Office of Thrift Supervision (OTS) and headquartered in Pasadena, Calif. The OTS closed the bank on July 11, 2008, and placed it under Federal Deposit Insurance Corporation (FDIC) receivership. IndyMac filed for bankruptcy protection later that month.
“These corporate executives made false and misleading disclosures about IndyMac at a time when the company’s financial condition was rapidly deteriorating. Truthful and accurate disclosure to investors is particularly critical during a time of crisis, and the federal securities laws do not become optional when the news is negative,” said Lorin L. Reisner, Deputy Director of the SEC’s Division of Enforcement.
According to the SEC’s complaints filed in U.S. District Court for the Central District of California, Perry and Keys defrauded new and existing IndyMac shareholders by making false and misleading statements about IndyMac’s financial condition in its 2007 annual report and in offering materials for the company’s sale of $100 million in new stock to investors. In early February 2008, IndyMac projected that it would return to profitability and continue to pay preferred dividends in 2008 without having to raise new capital. In late February 2008, Perry and Keys knew that contrary to the rosy projections released just two weeks earlier, IndyMac had begun raising new capital to protect IndyMac’s capital and liquidity positions. Specifically, Perry and Keys regularly received information that IndyMac’s financial condition was rapidly deteriorating and authorized new stock sales as a result. Yet they fraudulently failed to fully disclose IndyMac’s precarious financial condition in the 2007 annual report and the offering documents for the new stock sales.
The SEC further alleges that Perry knew that rating downgrades in April 2008 on bonds held by IndyMac Bank had exacerbated its capital and liquidity positions to the extent that IndyMac had no choice but to suspend future preferred dividend payments by no later than May 2, 2008. This material information was not disclosed in IndyMac’s ongoing stock offerings. Perry also failed to disclose in various SEC filings or a May 2008 earnings conference call that IndyMac would not have been “well-capitalized” at the end of its first quarter without departing from its traditional method for risk-weighting subprime assets and backdating an $18 million capital contribution.
According to the SEC’s complaint, Abernathy replaced Keys as IndyMac’s CFO in April 2008. He similarly made false and misleading statements in the offering documents used in selling new IndyMac stock to investors despite regularly receiving internal reports about IndyMac’s deteriorating capital and liquidity positions.
The SEC also alleges that in summer 2007 while serving as IndyMac’s executive vice president in charge of specialty lending, Abernathy made false and misleading statements about the quality of the loans in six IndyMac offerings of residential mortgage-backed securities (RMBS) totaling $2.5 billion. Abernathy received internal reports each month revealing that 12 to 18 percent of IndyMac’s loans contained misrepresentations regarding important loan and borrower characteristics. However, the RMBS offering documents stated that nothing had come to IndyMac’s attention that any loan included in the offering contained a misrepresentation. The SEC alleges that Abernathy failed to ensure that the quality of IndyMac’s loans was accurately disclosed and failed to disclose that information had come to IndyMac’s attention about loans containing misrepresentations.
Abernathy agreed to settle the SEC’s charges without admitting or denying the allegations. He consented to the entry of an order that permanently restrains and enjoins him from violating Section 17(a)(2) and 17(a)(3) of the Securities Act and requires him to pay a $100,000 penalty, $25,000 in disgorgement, and prejudgment interest of $1,592.26. Abernathy also consented to the issuance of an administrative order pursuant to Rule 102(e) of the SEC’s Rules of Practice, suspending him from appearing or practicing before the SEC as an accountant. He has the right to apply for reinstatement after two years.
The SEC’s complaint charges Perry and Keys with knowingly violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and aiding and abetting IndyMac’s violations of its periodic reporting requirements under Section 13(a) of the Exchange Act and Rules 12b-20 and 13a-1 thereunder. Perry also is charged with aiding and abetting IndyMac’s reporting violations under Exchange Act Rules 13a-11 and 13a-13. The SEC’s complaint against Perry and Keys seeks permanent injunctive relief, an officer and director bar, disgorgement of ill-gotten gains with prejudgment interest, and a financial penalty.
The SEC acknowledges the assistance of the FDIC in this investigation.
# # #
For more information about this enforcement action, contact:
John M. McCoy III
Associate Regional Director, SEC’s Los Angeles Regional Office
(323) 965-4573
Kelly Bowers
Senior Assistant Regional Director, SEC’s Los Angeles Regional Office
(323) 965-3924
Donald W. Searles
Senior Trial Counsel, SEC’s Los Angeles Regional Office
(323) 965-4573
17 Q. Okay. And how is LPS paid? Are they paid by
18 the attorney? Are they paid by the servicer who’s
19 asked the attorney to perform that service?
20 A. It depends on the service. For many
21 services, they are — the model that we operate under
22 is a vendor supportive model, “vendor” meaning the
23 attorney office would pay for that service. There are
24 some support services that the servicer pays for
25 directly.
Page 22
1 Q. So in your scenario that you just gave me a
2 few minutes ago, a law firm drafts a document, and it’s
3 sent on to LPS to see whether or not it’s appropriate
4 for LPS to sign the document. The law firm then pays
5 LPS for that service? That’s considered a support
6 service?
7 A. That’s — that’s part of the — Yeah.
8 Correct. That would be one of the support services it
9 would provide, and part of what the fee they would pay
10 would include that activity.
11 Q. Okay. And are there also payments made for
12 using the software and the platform?
13 A. There are payments made. That’s part of the
14 technology agreement. There is a technology fee
15 assessed for each, we call it a referral, but it,
16 essentially, would be a legal action of some sort or an
17 action. It’s not always a legal action. But for every
18 referral type there is a fee, and that fee ranges
19 between $5 and $75, depending on the activity to be
20 performed and the technology in play or processes in
21 play to track it.
22 Q. Okay. So, for example, is LPS paid when a
23 servicer makes a referral to a law firm within the
24 network to do — perform some service?
25 A. Yes. LPS is paid upon referral.
In submitting any future orders of reference said application shall include an affidavit from plaintiff indicating whether this loan is subject to a H.A.M.P. review and whether plaintiff is or is not prevented from proceeding with the instant foreclosure by reason of any applicable federal H.A.M.P. directives.
RE: Emergent Amendments to Rules 1:5-6, 4:64-1 and 4:64-2
In light of irregularities in the residential foreclosure practice as reported in sworn deposition testimony in New Jersey and other states, the Court has adopted, on an emergent basis, amendments to Rules 1:5-6, 4:64-1 and 4:64-2. These amendments are effective December 20, 2010. The new rule and the amendments, along with the Order adopting them, appear with this notice. The Court’s Order also contains directions for counsel in pending uncontested residential foreclosure cases.
Ally Financial/GMAC Bank of America Citibank JP Morgan Chase OneWest Bank Wells Fargo Bank
Action Date: December 20, 2010 Location: Mercer County, NJ
New Jersey State Supreme Court Chief Justice Stuart Rabner entered an order To Show Cause “In The Matter of Residential Mortgage Foreclosure Pleadings and Document Irregularities” in Civil Action No. F-059553-10, Superior Court of New Jersey, Chancery Division, General Equity Part, Mercer County on December 20, 2010. Six mortgage servicing companies and their bank-owners were ordered to show cause why the Court should not suspend their rights to foreclose.
First on the list was Ally Financial, formerly known as GMAC. Ally/GMAC is the employer of Jeffrey Stephan who was exposed as one of many “robo-signers” – a phrase indicating that an employee signed thousands of documents used in foreclosure cases with no idea of the truth of the matters asserted in the documents, and more often than not, without even having read what was signed.
Stephan signed thousands of Affidavits, but he signed tens of thousands of Mortgage Assignments – the documents used by mortgage-backed trusts to show that the trusts acquired the mortgages at issue and have the right to foreclose.
Stephan signed these Mortgage Assignments for many different mortgage-backed trusts. Over 50 RALI (Residential Accredit Loans, Inc.) Trusts relied almost exclusively on Mortgage Assignments signed by Stephan. Over 44 RAMP (Residential Asset Mortgage Products) Trusts also used Assignments churned out by Stephan. At least 20 RASC (Residential Asset Securities Corp.) Trusts used Stephan assignments almost exclusively in foreclosures. At least 40 other mortgage-backed trusts, including certain Aames Mortgage Investment Trusts, certain Bear Stearns Trusts and certain Harborview Trusts all relied on Ally/GMAC’s Stephan for proof of their right to foreclose.
These trusts needed the Stephan-made assignments because the trusts’ depositors, sponsors, trustees and document custodians failed to obtain the critical documents, including notes and assignments, at the inception of the trust – despite promises to investors and regulators that these documents had been obtained and were being safeguarded.
In Florida, Stephan’s name appears on thousands of Mortgage Assignments, most often on documents prepared by the Law Offices of David Stern, who is under investigation by the Florida Attorney General. In almost every case, Stephans signed as a Vice President of Mortgage Electronic Registration Systems.
According to the Stephan documents, the trusts almost always acquired these mortgages AFTER they were already in default, and often AFTER foreclosure proceedings had been initiated.
Many different banks, in their capacity as Trustees for mortgage-backed trusts, used Stephan Assignments, but Stephan documents were most often used by Deutsche Bank Trust Company Americas, Bank of NY Mellon and U.S. Bank.
Assuming that each trust has mortgage loans with a face value of one billion dollars – and that over 200 trusts are involved, the amount in controversy is staggering.
Also disturbing is the number of Assignments on Stephan/Stern documents where the assignee trust is unidentified. The Stephan/Stern team repeatedly prepared and filed Assignments where only the Trustees – and not the trusts themselves – were identified as the new owners of the mortgages. “U.S. Bank as Trustee” and “Deutsche Bank Trust Company Americas as Trustee” are the new owners of thousands of mortgages.
Stephan often wrongly stated his own job title, the date the assignment to the trusts took place, and the identity of the trusts. Stephan’s conduct – and the documents he produced – will not stand up to the most superficial examination. Chief Justice Rabner seems determined to dig much deeper.
The other five companies named by Chief Justice Rabner have the very same problems, having produced hundreds of thousands of flawed loan documents for mortgage-backed trusts, signed by individuals with very limited knowledge or authority. Their role was to sign their names without questioning or understanding what they signed.
According to Chief Justice Rabner, the next step may be the Appointment of a Special Master “to inquire into and report to the court on the extent of irregularities concerning affidavits, certifications, assignments and other documents from time to time filed with the court in residential mortgage foreclosure actions…” Past and present business practices would be examined and the Master could also consider whether sanctions should be imposed…and a suggested formula to determine an appropriate sanction.”
By his Order, Chief Justice Rabner gave hope to hundreds of thousands of victims of fraud by securities companies, banks, mortgage companies and mortgage servicing companies.
The nature of the problem calls for a balancing of the court’s supervisory and adjudicatory roles and responsibilities. The court has therefore established the procedure in this Order to address the pressing needs of the Office of Foreclosure while providing due process to affected parties. The court will direct that the six Foreclosure Plaintiff’s named on this order show cause at a hearing scheduled for January 19, 2011, why the court should not suspend the processing of all foreclosures matters involving the six Foreclosure Plaintiffs and appoint Special Masters to review their past and proposed foreclosure practices.
ANITA A. VIDA, Plaintiff,
v. ONEWEST BANK, F.S.B., a Delaware corporation formerly known as IndyMac Federal Bank, F.S.B., and FEDERAL NATIONAL MORTGAGE ASSOCIATION, a Government Chartered Association formerly known as Fannie Mae, Defendants.
Civ. No. 10-987-AC.
United States District Court, D. Oregon, Portland Division.
December 13, 2010.
OPINION AND ORDER
JOHN V. ACOSTA, Magistrate Judge.
Introduction
Plaintiff Anita A. Vida (“Vida”) alleges claims for breach of contract and fraud, and seeks declaratory judgment cancelling the trust deed and reinstating her mortgage. Defendants OneWest Bank, FSB (“OneWest”) and Federal National Mortgage Association (“FNMA”) (collectively “Defendants”) move for dismissal of all claims. Defendants argue that Vida has failed to state a claim for relief on the following grounds: (1) Vida may not state a breach of contract claim arising under the Home Affordable Mortgage Program (“HAMP”) because it does not authorize a private right of action; (2) Vida has not pleaded her fraud claim with sufficient particularity; and (3) Vida’s allegation that she did not receive adequate notice of the foreclosure action is preempted by state law. Defendants assert generally that Vida has otherwise failed to state claims of breach of contract and fraud.
Q. So this doesn’t necessarily mean
3 that someone physically picked up the file
4 from LPS; correct?
5 A. My understanding is that this is
6 a note that automates when the attorney
7 has confirmed receipt through new image.
8 Whether that’s manual or not, I couldn’t
9 say based on the notes. And then new
10 image stamps into the LPS Desktop
11 confirming that NIE ID number 0966 and on
12 was pulled in, those documents were
13 received by the attorney.
14 Q. Does LPS have any employees at
15 the Steven J. Baum law firm?
16 A. Not that I’m aware of.
<SNIP>
Q. This is from the Steven J. Baum
law firm; correct?
3 A. It appears to be.
4 Q. Would you have any reason to
5 doubt that?
6 A. No.
7 Q. And could you tell me what this
8 entry represents.
9 A. To the best of my understanding,
10 they have user has completed a POA
11 requisite data form, exactly what it says.
12 I guess I couldn’t give you a full answer.
13 I don’t manage this process, but it
14 appears they are requesting something.
15 Q. So just start me off, POA
16 underscore requisite, what does that stand
17 for?
18 A. I could guess.
19 Q. Is that a category or a type of
20 document?
21 A. Again, I could guess.
22 Q. I don’t want you to guess, but
23 can you make an educated guess?
24 A. Power of attorney.
25 Q. Who at LPS would have a better
understanding of this process? You said
3 it’s not really you.
4 A. I don’t know.
5 Q. Let’s go to entry two hundred
6 fifty-one dated 11/4/08. User has updated
7 the system for the following. Power of
8 attorney requested, completed on 11/4/08.
9 Do you see that?
10 A. Yes.
11 Q. Can you tell me what that entry
12 is.
13 A. I could give you an educated
14 guess.
15 Q. Go ahead.
16 A. My educated guess would be the
17 attorney has requested a power of
18 attorney.
19 Q. From whom?
20 A. From that note, I couldn’t say
21 for certain. But below the secondary
22 note, it seems to indicate JP Morgan to
23 Scott Walter.
24 Q. Who is asking for that? It’s
25 kind of written in the passive.
Who’s actually asking for the
3 power of attorney?
4 A. Appears to me from the notes
5 that Steven J. Baum’s office is making
6 this request.
<SNIP>
A. It appears to be Steven J. Baum
3 noting the file, memorializing that they
4 have prepared an assignment, they have
5 uploaded it into the LPS Desktop to be
6 reviewed and executed, and that it isn’t
7 back yet. 8 Q. What does it mean assignment was
9 received not signed, who’s receiving that?
10 A. I wouldn’t know.
11 Q. Well, do you read this as the
12 assignment is not signed?
13 A. I read it as an assignment is
14 not signed or, let me better state what I
15 meant to say, is that a signed assignment
16 hasn’t been received by Steven J. Baum. 17 Which assignment though I couldn’t tell
18 from this note.
19 Q. Would this assignment be signed
20 by LPS; is that what this is saying?
21 A. It appears that the attorney is
22 stating that.However, I can’t tell you
23 whether LPS would have signed this
24 document or not without seeing the
25 document that the note’s referencing.
Q. Okay. Do you know how many — on behalf of
2 how many entities you are authorized to sign documents?
3 A. I don’t have the exact number in my head.
4 Q. Can you give me your best estimate?
5 A. More than 20.
6 Q. Okay. And how often on a daily basis do you
7 execute documents?
8 A. Once a day.
9 Q. And how many do you typically sign a day?
10 A. Less than three.
11 Q. Okay. And can you describe to me the process
12 by which you receive these documents for signature?
13 A. Sure. I am delivered, via an LPS employee
14 courier, a document, and I’m advised that it is to be
15 executed. The group that receives the document request
16 from the agent reviews the document per our protocols
17 and procedures. That document is then determined that
18 LPS can execute the document.
19 Based on the various signing authorities, it
20 will be determined that I will be the one authorized to
21 sign it. It will be delivered to me. I will review
22 the document. I will ensure that I do have signing
23 authority for the document. I will verify that the
24 document is what it says it is. Then while they’re
25 watching me, I will execute the document. It is put
back — it is put into a manila envelope, and it is
2 taken away from me.
3 Q. And when you were signing the document in
4 front of this messenger, is that person the notary?
5 A. I’m unaware if they are the notary or not,
6 but they are within the same department.
7 Q. Okay. Do you ever sign a notary log?
8 A. I don’t recall ever signing one.
9 Q. Do you ever keep track of the documents that
10 you sign?
11 A. No.
12 Q. And I meant personally.
Q. But, for example, looking at this assignment,
document, isn’t the signer, Bethany Hood, attesting to
the fact that MERS wants to assign the Deed of Trust to Indymac Federal Bank?
MR. SPOONMORE: That’s a
mischaracterization, I object. Bethany Hood isn’t
representing; MERS is representing. That’s a gross
misinterpretation of the document.
MS. HUELSMAN: No. Ms. Hood is signing on
behalf of MERS; therefore, she is making an affirmation
on behalf of MERS.
MR. SPOONMORE: MERS is making the
affirmation.
MS. HUELSMAN: She’s making it on their
behalf.
MR. SPOONMORE: Yeah, as MERS is the one
making the affirmation.
Q. So could you please answer the question,
Mr. Allen?
A. MERS is making the reaffirmation.
Q. Mr. Allen, you’re not allowed to parrot
your attorney’s response. Please-
MR. SPOONEMOORE: He’s-
MS. HUELSMAN: –answer–
MR. SPOONMORE: –answered your–
MS. HUELSMAN: –the question.
Are you coaching him, Mr. Spoonmore?
MR. SPOONMORE: No. I’m saying the
premise of your question-
MS. HUELSMAN: well-
MR. SPOONEMOORE: –is–
MS. HUELSMAN: –a speaking–
MR. SPOONEMOORE:–misleading–
MS. HUELSMAN: –objection is providing
your client with an answer –your client with an
answer to a question, and that’s improper.
MR. SPOONEMOORE: Well, and a misleading
legal premise to your question is clearly
objectionable, because this client is not an attorney.
When you represent Mr. Hood is representing, that is
a gross legal mischarachterization of this document. I’m
allowed to correct that.
MS. HUELSMAN: Well, I disagree. When
people sign documents in their capacity as alleged
officers of the company, they are, in fact, making a
representation.
If MERS can figure out how, as a corporation,
which doesn’t exist except on paper, it can can sign
documents itself, then, in fact, it can say it’s
doing so without the assistance of a person.
MR. SPOONEMOORE: Legally it is MERS making the representation. People are authorized to sign on behalf of MERS. That doesn’t make them making the representation; it makes MERS making the representation.
Q. Okay. So when did MERS tell Ms. Hood that
this is what it wanted to do?
A. I would think within the –when granting the
signing authority.
Q. No. When did MERS specifically say to
Bethany Hood, We want to assign our interest in the
Deed of Trust referenced herein to IndyMac Federal
Bank? When did that occur?
MR. SPOONEMOORE: Counsel knows very well
that MERS can operate through counsel, which is their
agent. Again, you’re asking misleading questions of
this witness, and you know it. You know that MERS’s
counsel made this request, and that an agent of MERS.
MS. HUELSMAN: Well, then, you can explain
to Regional Trustee why they they violated their duty to-
to the Deed of trust doc by acting on behalf and as an
agent for somebody when they’re suppose to be acting
as a neutral in conjunction with a foreclosure sale.
Is that your representation, Counsel?
MR. SPOONEMOORE: That’s not us. You can
go after who ever you want, but as far as what we’re
doing, you’re way off base here.
Q. When did MERS give instruction to Bethany
Hood to assign this Deed of Trust? Whether it came
through Regional Trustee or Santa Clause, I don’t care.
When did MERS give this instruction to Ms. Hood?
“Issues”…Nah no “issues”? If this isn’t sending us a message or 127 messages that there aren’t any “issues”… Let them continue to submit exactly what they were filing before the *New Rule*… don’t stop now! Believe me there is more than these!
EXCERPT:
Pursuant to an Administrative Order of the Chief Judge, dated October 20, 2010, all residential mortgage foreclosure actions require an affirmation from the attorney representing the plaintiff/lender/bank, as stated in the affirmation attached to this order, that he/she has inspected all documents.
The plaintiff is also directed on any future application to provide a copy of this Court’s order, the prior application/motion papers and an updated affidavit of regularity/merit from the plaintiff/lender/bank’s representative that he/she has reviewed the file in this case and that he/she documents that all paperwork is correct. The plaintiff/lender/bank’s representative shall also provide in said affidavit of regularity her/his position, length of service, training, educational background and a listing of the documents and financial records reviewed substantiating the review of the amounts owed. The affidavit should also include that she/he has personally reviewed both the mortgage and the note and any assignments for accuracy.
The plaintiff bears the burden of proof in a summary judgment proceeding and judgment will only be awarded when all doubt is removed as to the existence of any triable issue of fact. Under the present circumstances, where there have been numerous instances alleged as to “robo” signing of documents and a failure to attest to the accuracy of documents in mortgage foreclosure proceedings, the plaintiff must prove its entitlement to foreclose on a mortgage as a matter of law by establishing the regularity and accuracy of the financial documentary evidence submitted and the Court will be scrutinizing all documents for accuracy.
The foregoing constitutes the decision of the Court.
Any issues with “Defendant MERS VP Roger Stotts” signing an affidavit for “Plaintiff ONEWEST”?? See image below 🙂
ONEWEST BANK, FSB AS SUCCESSOR IN
INTEREST TO INDYMAC‘ BANK, FSB
Plaintiff,
-against-
JESUS GARCIA,
MORTGAGE ELECTRONIC REGISTRATION
SYSTEMS, INC., AS NOMINEE FOR INDYMAC
BANK, FSB,
Excerpt:
Plaintiffs failure to provide a note or notes reflecting the amount it claims is due from
defendant-mortgagor precludes the Court from granting the relief requested. It is well settled that in
order to make a prima facie case in a foreclosure action, the plaintiff must show the existence of the
note and mortgage and that it is the owner of same. Ocwen Fed. Bank FSB v Miffer, 18 AD3d 527
(2d Dept 2005); MERS v Coakfey, 41 AD3d 674 (2d Dept 2007); Kluge v Fugazy, 145 AD2d 537 (2d
Dept 1988). The note provided here reflects only partial proof of the amount allegedly owed.
Additionally, with regard to the proof necessary on a motion for default in general, CPLR
321 5(f) requires that the applicant “shall file … proof of the facts constituting the claim, the default and
the amount due by affidavit …” Neither the affirmation of Jason E. Brooks nor the affidavit of Roger
Stotts satisfies that requirement. Such failure is particularly striking in view of the confusion present
here by virtue of allegations which are inconsistent with documents, and documents which are
submitted without explanation.
Continue below… Make sure you see the image down below as well…
In the matter of:
The Application of Quinn Emanuel Urquhart
& Sullivan, LLP to subpoena documents
from CUSTODIAN OF RECORDS, THE
DEPOSITORY TRUST COMPANY, under
a Commission issued in an action entitled
MBIA INSURANCE CORPORATION, a
New York corporation, Plaintiff v.
INDYMAC ABS, INC., a Delaware
corporation; HOME EQUITY MORTGAGE
2006-H4, a Delaware statutory trust; HOME
BACKED TRUST, SERIES INDS 2007-1, a
New York common law trust; HOME
BACKED TRUST, SERIES INDS 2007-2, a
New York common law trust; CREDIT
SUISSE SECURITIES (USA), L.L.C., a
Delaware limited liability Corporation; UBS
SECURITIES, LLC, a Delaware
corporation; JPMORGAN CHASE & CO., a
Delaware corporation; MICHAEL PERRY,
an individual; A. SCOTT KEYS, an
individual; JILL JACOBSON, an individual;
KEVIN CALLAN, an individual; and JOHN
and JANE DOES 1 – 100, Defendants,
pending in the Superior Court of California,
Los Angeles County, Central District, Case
No. BC422358.
ORDER DIRECTING
PRODUCTION OF BUSINESS
RECORDS FOR USE IN AN
ACTION PENDING
OUTSIDE NEW YORK STATE
I want to tell you all a little story. The story begins, as all American dreams do, with unfettered hope and belief, but has, over time, become a nightmare from the darkest recesses of our national psyche. This is not a fairy tale, and I beg you to see yourself in our heroine; for you could find yourself in her shoes very soon. And I promise you that that is not a place you want to be. But read on, and judge the veracity of my words for yourself.
I have been in the mortgage industry for almost a decade, and have seen my share of the ugly side of lending: the foreclosures, the forgotten families, and the greedy, heartless, faceless “holder of the note” gone wild. I have experienced all of this more times than I care to admit, and have been ashamed of my industry more times than I care to count, but the borrower I wish to tell you of was the reason I broke into this business in the first place. People like her, hard-working, honest Americans, are the ones a broker like myself looks for day and night, and strives to take care of in whatever capacity we are capable of.
Why you ask? What makes her so special? There are many answers to these questions, and the easy answer would be that she perfectly fit the mold we in the business look for. She had been employed for 22 years with the same corporation, and had managed to pay every liability on time for her entire adult life. No late payments, no missed payments, and nothing at all to indicate that she would ever change. Her credit score was 780, and she had owned a home for 10 years in Miami Beach (an expensive place to buy). This showed unequivocally that she understood liability, and knew how to get things done in the lending market. In short, she was a lender’s dream come true. A loan you approve and forget about because the payments are always in on time, and so, as a lender, you just count money for 30 years. What could be better from our point of view than that? Every lender in the world will tell you the answer to that question is nothing; absolutely nothing.
This lady decided to move to Chicago to be closer to her corporate office, so she sold her home in Miami and took her dreams and possessions north to Chicago. This took place in 2006 while the housing bubble was still growing larger, and no one outside of the industry had any expectation that it may burst at any time. She did her due diligence while looking for a home in the Chicago area, and eventually settled on a brand new property in an area ripe for gentrification. Basically, she bought in an older neighborhood that was undergoing massive urban renewal projects that were projected to raise property values in her area significantly; as long as there was no unforeseen disaster looming. That is the danger of things unforeseen. They eventually come to pass, and no one is prepared to combat them.
She started with an Interest-Only Loan as at that time it made more sense to use her principal money on personal investments rather than giving it to a lender to make decisions with. Even though interest rates were high at the time, IO rates slightly higher than fixed, she was able to get the property for almost $75K less than it initially appraised for, so she was already ahead of the game. She maintained her perfect history, 0×30 on her mortgage, and everything else for that matter, but that was before the wise and powerful bankers in America decided to play 3-Card Monty with America’s future.
As the signs of the encroaching financial apocalypse began to show themselves, she attempted, through her lender, to pursue refinancing, but was told her case called for the loan modification process. The press was making a fuss about how these modifications were the way for borrowers to get the help they needed to stay afloat in the carnage that followed the bubble bursting, and as an intelligent and savvy borrower with a perfect history she expected the process to go smoothly for her. In that assumption, she would have been right if not for the new credit card laws passed that allowed the companies to raise their interest rates and reduce the line of credit available on any given card. These changes have had an enormous, unintended consequence in the lending world since loans are in large part based on debt-to-income (DTI) ratios.
Imagine this borrower has a credit line of $10K on a card with only a $2K balance, but is then targeted by the credit card company for a reduced credit line of say $2500, so her 20% balance has now become 80% without her actually doing anything irresponsible. Yet, when lenders looked at her DTI they would see that she is nearly maxed out on her card, and in this industry that is a major red flag. She understood DTI, and how it could affect her ability to qualify for extra money (even though she did nothing untoward or rash in terms of spending), but why should that hamper her from getting a reduced rate? It is asinine to ask a person to re-qualify for something they already have, or to tell them they must qualify to save money, but this is what is happening in America today. She signed no agreement stating she could not refinance in the future with the help of her lender, so all she is left with are questions. Questions that for her and the millions like her, unfortunately, have no good answers. The American Dream, for this model American, is quickly becoming the American Nightmare.
There are so many questions our borrower wants to ask, but there are no phone lines to call or government offices to visit with any answer other than, “talk to the lender”. This is just endless runaround from the lender, and more and more frustration for her and her family. How is it possible to be locked into a loan, with bankruptcy laws so much tougher, and have absolutely no way to refinance? More transparency in the industry is great, but how can our borrowers appease the credit companies interest hikes while losing equity in their property due to the housing catastrophe and still meet the necessary financial obligations they agreed to prior to this meltdown? This is a recipe for mass bankruptcy and foreclosure; two things that hurt us all in the long run.
It was March of 2009 when our borrower started the conversation about refinancing with her current mortgage company, Indy Mac, from the 7.625% IO-Loan to a 4.5% fixed rate. They explained to her that she would need to print out a new financial packet, and send it, along with all other pertinent information, in to be reviewed before they could proceed; she did just that. After an entire month had passed, she called in to check the status of her application, and was told that the servicing company, Indy Mac, was changing hands, but she would still be taken care of by the new investor, One West.
Just like that, she and thousands of other customers were being sold to the highest bidder, and after some research she discovered that One West actually only paid up to far less than full value for these notes. It gets better. One West actually had the federal government guarantee them anything lost over a certain percentage. What does this mean you ask? All the numbers are there in black and white on the internet for anyone to see; but no one looks. You do not have to be a rocket scientist to see that it would be more profitable to foreclose quickly and collect the guaranteed funds than to refinance the borrower’s note at a current market rate.
The changing of the servicer of her note, as unsettling as it was, would have been fine if not for the dramatic change in guidelines and customer service she experienced. This often happens after a change of this magnitude in any business field, but these differences were downright ridiculous. She was informed that the financial packet she had sent was no longer valid, so she would have to assemble another one before any process could begin. So, once again she followed procedure in hopes of capturing that elusive lower interest rate.
She waited and waited for a call to inform her of the status of her newest application, and finally tried calling herself to enquire; but to no avail. Her calls were treated as a joke. They repetitiously asked for the same documents, and even claimed after three business days that they had never received her fax, and that it took all that time to verify whether or not they had received her documentation. They have done this over 50 times from March of 2009 to the present day! That is preposterous, shameful, and ought to be criminal! But it gets better; or worse for our heroine.
After calling repeatedly for three months she finally got them to look at her application. They told our borrower that the check stubs submitted were out of date according to Fannie Mae guidelines (must be less than 90 days old), but when she remedied that they told our borrower that her check stubs were fraudulent. Check stubs from one of the three largest airlines in the world which she has worked with for more than 20 years by the way. They focused on some minutiae that they knew to be nothing, but she was forced to get a complete employment record from her employer to along with a Letter of Explanation (LOX) from her Human Resources department. This process has stretched into years with no results. She was even told that the best way to get help is to be late on her mortgage payments! Imagine that. It has become so bad that when she follows up on any fax or correspondence they claim she has never talked to anyone about her issue, and when she asked about recording the conversation she was told it was against their policy. I am not making this up. Every word is true and to the point, and the point is that One West and Indy Mac, Fannie Mae and the federal government are fleecing, and failing we the people.
This is dangerous and uncontrolled corporate behavior, and it cannot be allowed to continue. One West has become the poster child for what is wrong with this industry; what is wrong with America in fact. In my humble opinion (and that of thousands of other Americans…not to mention all the honest lenders in the industry), they have pulled out all the stops when it comes to delaying and deceiving their customers in order to get a government handout and make a dishonest buck. This must not be allowed to stand.
Help her. She has asked again and again, and researched every option. She can’t refinance due to not having value. She can’t modify because it’s not profitable to the lender to do so, and she can’t walk away as her state won’t allow this. Why I ask myself? Is it considered walking away if you have no more options? Why is it easier to profit from bad deals than good ones? There is no hope for this borrower that she can see. The only hope I can think of is a Federal Reserve for primary borrowers in America. By that, I mean the feds open the vaults to primary homeowners at a specific rate, and work directly with the borrowers from a federal standpoint. Cut the banks out. Let them focus on commercial deals and second homes where the rates are higher and people know what they are getting into from day one. I do not think these customers’ closing paperwork said anything about having to stay in one rate for thirty years. Do you know anyone on record in today’s environment that can say they stayed in their home for thirty years at the same rate? I don’t think that is even possible. Please share…
Here are some sites that clearly have people in the same situation, read, educate, follow and post, let’s start the revolt against One West/ Indy Mac and Fannie Mae.
Go to Google, You-tube or any engine for that matter and type class action Indy Mac, Type Complaints Indy Mac/ One West; you will see firsthand what we are all up against.
R.K. Arnold
Mortgage Electronic Registration Systems
Action Date: November 18, 2010
Location: WASHINGTON, DC
As the many problems (frauds) are exposed regarding documents used by mortgage-backed trusts in foreclosures, some revelations stand out. Literally millions of foreclosures by mortgage-backed trusts hinge on a Mortgage Assignment signed by an officer of Mortgage Electronic Registration Systems (“MERS”) showing that the mortgage in question was transferred to the trust by MERS. The “MERS officer” who signs the Mortgage Assignment is actually most often an employee of a mortgage servicing company that is paid by the trust.
MERS itself has only 50 employees and they are not involved in signing mortgage assignments to trusts. These servicing company employees sign as officers of MERS “as nominee for” a particular mortgage company or bank. They are not employees of the mortgage companies or employees of the original named lender, but their titles on the Mortgage Assignment belie this and typically read: “Linda Green, Vice President, Mortgage Electronic Registration Systems, Inc., as nominee for American Brokers Conduit.”
MERS president R.K. Arnold testified in Senate testimony earlier this week that there are over 20,000 MERS “certifying officers.” To become a MERS certifying officer, a mortgage servicing company employee need only complete an online form and pay $25.00. Because of the concealment of the actual employer on the Mortgage Assignments, it is easy enough for Courts, and homeowners, to believe that they are examining a document prepared by the lender that sold the mortgage to the trust, when, in fact, the signer was a servicing company clerk paid by the trust itself.
The representative of the GRANTOR is, in truth, a paid employee of the GRANTEE. In hundreds of thousands of cases, the authority is, therefore, misrepresented. It is now also coming to light that in tens of thousands of cases, the individuals signing these forms did not even sign their own names. The documents were made to look official because other mortgage servicing company employees signed as witnesses and then all four “signatures” were notarized by yet another mortgage servicing company employee. The titles were false, the signatures were forged, the “witnessing” was a lie, as was the notarization. Despite all of these false statements, the BIGGEST LIE on these documents is that the trust acquired the mortgage on the date stated plainly on the Mortgage Assignment. In truth, no such transfers ever took place as represented by these MERS certifying officers (or their stand-in forgers). The date chosen almost always corresponds not to an actual transfer, but to the date roughly corresponding to the time the loan went into default. The Mortgage Assignment was prepared only to provide “proof” that the trust owned the mortgage. Until courts require Trusts to come forward with actual proof that they acquired the mortgages in question, specifying whom they paid and how much they paid for each such trust-owned mortgage, the actual owner of these mortgages will never be known.
In response to the exposure of the widespread fraud in the securitization process, the American Bankers Association issued a statement essentially saying that Mortgage Assignments were unnecessary. Investors and regulators were told, however, that the trusts owned the mortgages and notes in each pool of mortgages and that valid Assignments of Mortgages had been obtained. Where the proof of ownership put forth by the trusts is a sworn statement by a MERS “certifying officer” who had no knowledge whatsoever of the transactions involved and did not even review documents related to the transactions, such proof of ownership should be deemed worthless by the Courts. Other litigants are not allowed to manufacture their own evidence and offer it as proof at trial – there should be no exception for mortgage-backed trusts.
In particular, where the “MERS Certifying Officer” is actually an employee of the law firm hired to handle the foreclosure, such documents should be stricken and sanctioned. “MERS Certifying Officers” should be the next group required to testify before Congress. Here are the statistics for one Florida county, Palm Beach County, regarding the number of Mortgage Assignments filed by Mortgage Electronic Registration Systems: January, 2009: 1,164; February, 2009: February, 2009: 1,230; March, 2009: March, 2009: 1,113. An examination of just one day’s (March 31, 2009) filed Mortgage Assignments reveals that the signers of these Assignments are the very same mortgage servicing company employees who signed the “no-actual knowledge” Affidavits that triggered the national scrutiny: Jeffrey Stephan from Ally, Erica Johnson-Seck from IndyMac, Crystal Moore from Nationwide Title Clearing, Liquenda Allotey from Lender Processing Services, Denise Bailey from Litton Loan Services, Noriko Colston, Krystal Hall, and other well-known professional signers from the mortgage servicing industry. The most frequent signers from that particular day were two lawyers, associates in the law firm representing the trusts, who signed as Assistant Secretary for Mortgage Electronic Registration Systems.
Oct. 28 (Bloomberg) — OneWest Bank, formed in the aftermath of IndyMac Bancorp’s failure, may have its mortgage- servicing ratings downgraded by Moody’s Investors Service, which cited “potential irregularities” in the foreclosure process.
The ratings of IndyMac Mortgage Services, a division of OneWest, may be downgraded if faulty foreclosures increase the time it takes to sell bank-owned homes or boost legal costs, Moody’s said today in a statement. OneWest is resubmitting affidavits in certain cases after a review, Moody’s said.
“Employees signing affidavits may not have had full personal knowledge of every item in the affidavit,” Linda Stesney and Cecilia Lam, analysts at New York-based Moody’s, said in the statement. “Notaries may not always have been physically present at the time of signing.”
Court documents surfaced this year showing employees of the largest U.S. lenders signed paperwork without ensuring accuracy. Attorneys general in all 50 states started a probe into those practices and Bank of America Corp., JPMorgan Chase & Co. and Ally Financial Inc. suspended some foreclosure sales or evictions, pending reviews.
Moody’s assigns a rating of SQ3, or average, to IndyMac as a primary servicer of prime home loans, and SQ3- as a primary servicer of subprime home loans or as a special servicer, or overseer of distressed debt.
IndyMac had a servicing portfolio of more than 565,000 loans with an unpaid balance of $133.5 billion at the end of June, Moody’s said. The company is the ninth-largest U.S. home- loan servicer, according to Barclays Capital Inc
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