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MERS FRAUD & WALL SREET BANKSTERS: You Probably Don’t Even Own the House You Are Paying For

MERS FRAUD & WALL SREET BANKSTERS: You Probably Don’t Even Own the House You Are Paying For


by

In 2012, when we think Wall Street we think: MF Global theft, JPM criminality, Goldman naked shorting, DTTC failures to deliver, precious metals manipulation, fractional reserve banking, Comex games, HFT trading and endless derivatives. But don’t forget about MERS and mortgage fraud – because according to Vermont Trotter, the National Director of ‘Protect Americas Dream’ it’s all tied together in one giant Ponzi scheme. The worst part is, the bank you pay for your mortgage probably does not even hold the title to your home. It’s a mess – and we are ALL victims.

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Certification battle in Ohio MERS class action heats up

Certification battle in Ohio MERS class action heats up


Lexology-

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

[LEXOLOGY]

[ipaper docId=94254592 access_key=key-2nn3qssi6kdpdxy704up height=600 width=600 /]

 

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The Big Lie: MERS Mortgages in Massachusetts by Jamie Ranney, Esq.

The Big Lie: MERS Mortgages in Massachusetts by Jamie Ranney, Esq.


This is a repost from a previous post dated 11/30/2010

by Jamie Ranney, Esq.
Jamie Ranney, PC
4 Thirty Acres Lane
Nantucket, MA 02554
jamie@nantucketlaw.pro
508-228-9224

This memo will focus on MERS-designated mortgages in Massachusetts.

In this author’s opinion two (2) things are evident after a survey of Massachusetts law.

First, MERS cannot be a valid “mortgagee” under Massachusetts law and thus MERS designated mortgages are invalid in the Commonwealth of Massachusetts.

This is because MERS-designated mortgages by definition “split” the security instrument (the mortgage) from the debt (the promissory note) when they are signed. This “split” invalidates the mortgage under Massachusetts law. Where the security interest is invalid upon the signing of the mortgage, MERS cannot occupy the legal position of a “mortgagee” under Massachusetts law no matter what language MERS inserts into their mortgages that purports to give them the legal position of “mortgagee”. Since MERS-designated mortgages are invalid at their inception, it follows logically therefore that MERS mortgages are not legally capable of being recorded in the Commonwealth of Massachusetts by its Registers of Deeds.

Second, even if a MERS-designated mortgage were found to be a valid security instrument in Massachusetts, each and every assignment of the mortgage and note “behind” a MERS-designated mortgage must be recorded on the public land records of the Commonwealth in order to comply with the Massachusetts recording statute at M.G.L. c. 183, s. 4 which requires that “conveyances of an estate” be recorded to be valid. A mortgage is a “conveyance of an estate” under Massachusetts law. Since MERS-designated mortgages exist for the primary purpose of holding “legal” title on the public land records while the “beneficial” interest is transferred and sold multiple times (and a mortgage cannot exist without a note under Massachusetts law), MERS-mortgages unlawfully avoid recording fees due the Commonwealth for the transfer(s) of interests under MERS-designated mortgages.

“If you tell a lie that’s big enough, and you tell it often enough, people will believe you are telling the truth, even when what you are saying is total crap.”1

Continue reading below…

[ipaper docId=44370743 access_key=key-1en9gd3bwhh0zs2atypk height=600 width=600 /]

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Action Alert – Facing foreclosure in Massachusetts? Please call your reps asap – the vote is 5/16/2012!

Action Alert – Facing foreclosure in Massachusetts? Please call your reps asap – the vote is 5/16/2012!


via: BOSTON67

Jamie Ranney, Esq. vs FRAUDclosures

There is a bill pending in the Massachusetts Legislature called H-04083 that is designed to provide more requirements that lenders work with  borrowers to provide real loan modifications before they can commence foreclosure and to hold lenders accountable where they unlawfully foreclose.  Unfortunately, the bill suffers from some substantial weaknesses which I have tried to remedy with edits and amendments.

The bill is scheduled to be voted on – THIS WEDNESDAY MAY 16, 2012 – so your immediately action is needed.

I would ask that you take the time to immediately contact your state representative and state senator, ask them to stand up for  the homeowners and borrowers of the commonwealth and request that they amend H-04083 to include these changes and amendments.  You can email the edits and comments directly to your state rep and state senator.

Their contact list can be found here: http://www.malegislature.gov/People/FindMyLegislator

Please email the following amendments and a memo explaining them:
Bill H-04083 edits    Memo RE H-04083 amendments and edits

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SoFla Woman’s 2-Year Battle Gets Mortgage Wiped Out

SoFla Woman’s 2-Year Battle Gets Mortgage Wiped Out


Wonder whose signature was/is still on her documents? His name is Scott Anderson!

Read all about Scott Anderson here.


NBC 6-

A South Florida woman succeeded with the unheard of when she was able to get her mortgage wiped out by a lender.

In an effort to save her mother’s home, Idania Castro waged a two-year battle with the bank.

“The mortgage got wiped out, so I have no mortgage payment, everything was completely satisfied,” Castro said.

The woman, who took it upon herself to go through every document related to the mortgage, finally discovered robo-signing. She said the signatures on her foreclosure documents appeared to have been signed by different people.

[NBC 6]

Image Source: ABC

Here are the many different signatures of Scott Anderson below:

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Abigail C. Field: Assessing Schneiderman’s Task Force Gamble

Abigail C. Field: Assessing Schneiderman’s Task Force Gamble


Abigail Field-

My latest for FireDogLake. For even more confirmation that the Feds aren’t interested in bank accountability, regardless of the State half of the task force’s intentions, see Congressman Brad Miller on why he’s not the task force Executive Director and Richard Eskow on the obviousness of the problem. 

As people increasingly realize that the mortgage settlement was an enforcement fraud, attention’s turned to the “new“ joint Federal/State task force that’s supposed to make the settlement into a “down payment,” by delivering much more. And so far people don’t like what they see, and are saying so. What’s striking about the resulting PR push back, however, is that it just highlights how banker-fraud-friendly our federal government is.

For example, Attorney General Eric Schneiderman penned a Daily News Op-Ed in which he pitches “More than 50 attorneys, investigators and analysts have already been deployed to support our investigations, with many more on the way” as somehow adequate to deliver on that “down payment” promise when the Savings and Loan crisis took over 1,000 and Enron alone took over 100. Not only hasn’t the federal government corroborated AG Schneiderman’s claim of “many more on the way”; “many more” than 50+ doesn’t sound like anywhere near the 1,000+ needed to approach the ballpark of accountability.

[REALITY CHECK]

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The Bankers’ Subversion of the Rule of Law, Notary and Land Records edition

The Bankers’ Subversion of the Rule of Law, Notary and Land Records edition


Abigail C. Filed-

Hi

For the next couple of weeks, I’m one of the David Dayen subs at FireDogLake–no one person could fill his shoes–and this post ran there earlier today. This version is slightly updated but essentially the same.

One way to see the double standard at the heart of the foreclosure fraud—one set of laws for the bailed out banks, one for the rest of us—is to focus on the role of notaries public, and then consider that role in light of what our Supreme Court said about notaries in 1984, in a case called Bernal v. Fainter, Secretary of State of Texas.

First, let’s recap the role of notaries in the foreclosure fraud crisis: Notaries are the people who verify that someone actually is who they say they are when that person signs a document. Because banks and their agents industrialized “Document Execution” as part of their foreclosure business model, notaries did not do their jobs. Notaries’ failure to verify identities has been so complete that many people will sign as one person, say, “Linda Green.” Notaries have also been told to sign documents using one name, and then notarize their own “surrogate” signature. “Well, what’s the big deal?” bank defenders say. Beyond the fact that there’s no “business convenience” exception to following the rule of law, consider Bernal.

Bernal involved Texas’s requirement that all notaries be citizens; lawful permanent resident aliens need not apply. Bernal challenged the Constitutionality for the citizenship requirement. To rule on the question, the Court had to consider what notaries did, and whether or not what notaries did was so political, so central to representative democracy, that limiting being a notary to citizens was rational. In finding that notaries were important but not political officers of the state, the Court made some observations of note.

[REALITY CHECK]

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Richard (RJ) Eskow: The White House And Mortgage Fraud: So Far It’s All Talk, No Action

Richard (RJ) Eskow: The White House And Mortgage Fraud: So Far It’s All Talk, No Action


HuffPO-

The Obama Administration worked for months on a deal that would have let America’s biggest banks off the hook for a crime wave of runaway mortgage fraud. All they had to do in return was pledge a negligible sum of money, to be paid by their shareholders and not themselves, and which they would dispense themselves. In return, crooked bankers received immunity from prosecution – and even from investigation.

After the deal came under attack from a number of its allies, the Administration settled with the banks anyway. But it promised millions of wronged homeowners – and the nation as a whole – that it would move “aggressively” to investigate criminal misdeeds and prosecute bankers and anyone else who broke the law.

That was then, this is now. Two and half months later the Administration hasn’t even started to take the inadequate steps it promised it would take. The clock is running out on the statute of limitations and there’s no sign that the Administration has lifted a finger to investigate criminal bankers.

Talk vs. Action …

[HUFFINGTON POST]

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Inside the foreclosure factory: Pushing the files

Inside the foreclosure factory: Pushing the files


Instead of putting a temporary halt on foreclosures, District Judge Rosemary Collyer, gives the banks 90 days to develop a plan to adhere to the new standards and 180 days to implement those plans. Until then, Americans losing their homes to foreclosure have little assurance that the seizures and sales are proper.

This might be equivalent of giving a burglar enough time to select & steal the high priced items in your home. Very well knowingly they are already inside. Unfreakingbelievable!

I suppose the title could have also been called Foreclosure Mills and The 4 Minute Foreclosure, in which I wrote briefly about back in 2010.

MSN-

In a quiet office in downtown Charlotte, N.C., dozens of Wells Fargo’s foreclosure foot soldiers sit in cubicles cranking out documents the bank relies on to seize its share of the thousands of homes lost to foreclosure every week.

They stare at computer screens and prepare sworn affidavits that are used by lenders in courts across the country to seize homes. Paid $30,700 to start, these legal process specialists, the title that goes with the job, swear an oath under penalty of perjury that they’re corporate vice presidents. They’re peppered with e-mails from managers to meet daily quotas of at least 11 files day.

If they fall short, they face a verbal warning. Then written. Two written warnings could cost them the paycheck that supports a family. As more than one source for this story told msnbc.com, “I can’t afford to lose this job.”

[MSN]

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Medallion Analytics Selects eSignSystems’ SmartSAFE for Its Electronic Mortgage Web Services Platform

Medallion Analytics Selects eSignSystems’ SmartSAFE for Its Electronic Mortgage Web Services Platform


E~Sign Your Life Away

SYS-CON-

04/18/12 — eSignSystems, a division of Wave Systems Corp. (NASDAQ: WAVX), announced today that Medallion Analytics has licensed and implemented the SmartSAFE electronic vault for use in its web-based mortgage audit and analytics solutions. SmartSAFE provides lifecycle management of electronically signed, legally-binding documents and records, meeting ESIGN and UETA compliance. The combination of Medallion and eSignSystems’ technology gives loan originators a break-through solution to automate the entire pre- and post-close loan origination audit and compliance process.

[…]

eDeliver, eSign & Conduct MERS eRegistry Transactions
Medallion has also licensed the SigningRoom application from eSignSystems to simplify the entire eDelivery and eSigning process. Users can now electronically sign and “seal” electronic documents securely with user name and password, making it convenient for all parties to remotely access and electronically sign important documents related to closing a loan. In addition, Medallion has also incorporated eSignSystems’ SmartCLOSE, an optional module that extends the power of the SmartSAFE to include electronic integration to the MERS® eRegistry to register and track eNotes. MERS® is the industry-endorsed tracking tool for electronic mortgages.

[SYS-CON MEDIA]

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Obama’s mortgage unit is AWOL … NY AG Eric Schneiderman should quit this fraud

Obama’s mortgage unit is AWOL … NY AG Eric Schneiderman should quit this fraud


What we have learned so far: Whenever dealing with the banks and or with the government, they are from the same mold. We cannot tell any difference.

This “mortgage task force group” thing is also NO Different than that MERS system…There are no employees!

NY Daily News-

On March 9 — 45 days after the speech and 30 days after the announcement — we met with Schneiderman in New York City and asked him for an update. He had just returned from Washington, where he had been personally looking for office space. As of that date, he had no office, no phones, no staff and no executive director. None of the 55 staff members promised by Holder had materialized. On April 2, we bumped into Schneiderman on a train leaving Washington for New York and learned that the situation was the same.

Tuesday, calls to the Justice Department’s switchboard requesting to be connected with the working group produced the answer, “I really don’t know where to send you.” After being transferred to the attorney general’s office and asking for a phone number for the working group, the answer was, “I’m not aware of one.”

The promises of the President have led to little or no concrete action.

Read more:  [NY DAILY NEWS]

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PNMAC Mtge. CO, L.L.C. v Friedman | NYSC ‘endorsement “was erroneous”, subsequently endorsed “en blanc by allonge” and physically delivered to nonparty’

PNMAC Mtge. CO, L.L.C. v Friedman | NYSC ‘endorsement “was erroneous”, subsequently endorsed “en blanc by allonge” and physically delivered to nonparty’


Decided on March 21, 2012

Supreme Court, Richmond County

PNMAC Mortgage CO, L.L.C., Plaintiff,

against

Eva Friedman, JACOB FRANKFURTER, NEW YORK CITY ENVIRONMENTAL CONTROL BOARD, and “JOHN DOE”and “JANE DOE”, the last two names being fictitious, said parties intended being tenants or occupants, if any, having or claiming an interest in, or lien upon the premises described in the complaint, Defendants.

130486/11

Thomas P. Aliotta, J.

The following papers were marked fully submitted on the 19th day of January, 2012:

Pages

Numbered

Notice of Motion to Dismiss

by Defendants Eva Friedman and Jacob Frankfurter,

with Supporting Papers, Exhibits and Memorandum of Law

(dated September 1, 2011)………………………………………………………………………….1

Affirmation in Opposition

by Plaintiff, with Supporting Papers and Exhibits

(dated November 8, 2011)………………………………………………………………………….2

Affirmation in Reply

(dated December 12, 2011)…………………………………………………………………………3

Upon the foregoing papers, the motion is granted and the complaint is dismissed.

This is an action to foreclose a mortgage in which plaintiff PNMAC Mortgage Co., LLC. (hereinafter “plaintiff”) alleges that defendants Eva Friedman and Jacob Frankfurter (hereinafter “defendants”) are in default as a result of their having failed to make the required payments since June 1, 2008. To the extent relevant, defendants executed a mortgage in favor of nonparty Mortgage Electronic Registration Systems, Inc (hereinafter “MERS”) as nominee for American Brokers Conduit (hereinafter “ABC”) as security for a note in the principal sum of $440,000 given to fund their purchase of the premises known as 502 Weser Avenue on Staten Island (see Defendants’ Exhibit “C”). Both the mortgage and an “Interest First Adjustable Rate Note” (hereinafter “note”) in favor of ABC were executed on August 29, 2005 (id.).

It is undisputed that the above note was thereafter endorsed to nonparty Wells Fargo Bank, NA (hereinafter “Wells Fargo”). However, plaintiff contends that this endorsement “was erroneous”, and that the note in question either was never delivered or was returned to ABC (see Affirmation of Daniel H. Richland, Esq., para 10). Insofar as it appears, the note was subsequently endorsed “en [*2]blanc by allonge” and physically delivered to nonparty CitiMortgages, Inc. (id. at 11), which acquired ABC’s interest in the subject mortgage via assignment by MERS on behalf of ABC on January 27, 2009 (id. at 12; see Plaintiff’s Exhibit “B”). Following these transfers, MERS sought to foreclose on the subject mortgage, but its action was dismissed with prejudice, as it was the holder of neither the note or mortgage at the time the action was commenced.[FN1] The ensuing order of dismissal, entered on August 4, 2010, also directed the County Clerk to cancel the notice of pendency (see Plaintiff’s Exhibit “C”). CitiMortgage, Inc. subsequently assigned its rights under the above mortgage to plaintiff on March 15, 2011 (see Plaintiff’s Exhibit “B”), which commenced the instant foreclosure action on or about June 21, 2011 (see Defendants’ Exhibit “A”).

In a pre-answer motion to dismiss the complaint, defendants maintain, inter alia, (1) that plaintiff lacks standing; (2) the action is barred under the doctrines of collateral estoppel and/or res judicata; and (3) the complaint fails to state a cause of action (see CPLR 3211[a][3], [5], [7]). In addition, defendants seek an order directing the County Clerk to cancel the notice of pendency and to enter an order pursuant to CPLR 6514(a) declaring the mortgage to be unenforceable because “it has become bifurcated from the note”.

A prima facie case in foreclosure is established by the mortgagee’s production of the mortgage, the unpaid note and evidence of the mortgagor’s default. However, where, as here, a plaintiff’s standing has been placed in issue, it bears the initial burden of proving same before it is entitled to any relief (see Citimortgage, Inc. v. Stosel, 89 AD3d 887 [2nd Dept 2011]).

A plaintiff establishes its standing in a mortgage foreclosure action by demonstrating that it is the holder or assignee of both the mortgage and underlying note, “either by physical delivery or execution of a written assignment prior to the commencement of the action” (id. at 888 [internal quotation marks omitted]). While the mortgage passes with the debt as an inseparable incident thereof (see US Bank NA v. Sharif, 89 AD3d 723, 725 [2nd Dept 2011), the reverse is not true, i.e., an assignment of the mortgage without the underlying note is a nullity (id., see Citimortgage, Inc. v. Stosel, 89 AD3d at 888).

In the instant case, plaintiff asserts its ownership of the note by claiming that the erroneous endorsement to nonparty Wells Fargo was properly voided when the endorser, ABC, subsequently added an “allonge endorsed en blanc” while in possession of the note (see Affirmation of Daniel H. Richland, Esq., paras 23-25).[FN2] The “allonge” submitted by plaintiff provides that “[t]his Note Allonge is attached to and made a part of the Note, for the purpose of Noteholder Endorsement to evidence a transfer of Interest”. It names “American Brokers Conduit” as the originator and is made payable to “to the Order of Without Recourse American Brokers Conduit by: Roger Kistler, Assistant Treasurer” (see Plaintiff’s Exhibit “A”). The document is undated, but must have been added after the erroneous endorsement to Wells Fargo. According to plaintiff, this endorsement was sufficient under Uniform Commercial Code (“UCC”) §3-208, which provides, in relevant part, that “[w]here an instrument is returned to or reacquired by a prior party he may cancel any indorsement which is not necessary to his title and reissue or further negotiate the instrument”.

Nevertheless, there is no proof in the papers presently before the Court as to when the subject note was negotiated or transferred to plaintiff. As a result of this failure to establish that it was the [*3]lawful holder of both the note (whether by delivery or assignment) and mortgage prior to the commencement of this action, plaintiff has failed to sustain its burden of demonstrating its standing to commence this foreclosure action (see US Bank NA v. Sharif, 89 AD3d at 725; Deutsche Bank Natl Trust Co v. Barnett, 88 AD3d 636, 637-638 [2nd Dept 2011]). Accordingly, defendants’ motion to dismiss is granted.

So, too, is that branch of defendants’ motion seeking to cancel the notice of pendency. In this regard, since the matter does not appear to involve issues of faulty service of a summons, bad faith, or any of the other grounds enumerated in CPLR 6514(a), (b) (see generally Lessard Architectural Group, Inc., PC v. X & Y Dev Group, LLC, 88 AD3d 768 [2nd Dept 2011]; Deans v. Sorid, 56 AD3d 417 [2nd Dept 2008]), the notice of pendency will be cancelled in the exercise of the inherent power of the Court (see generally Ewart v. Ewart, 78 AD3d 992 [2nd Dept 2010]; Coleman v. Coker, 66 AD3d 812 [2nd Dept 2009]); Congel v. Malfitano, 61 AD3d 807 [2nd Dept 2009]).

The action being dismissed for lack of standing, there is no occasion for the Court to consider any further issue.

Accordingly, it is

ORDERED that the motion to dismiss is granted, without prejudice; and it is further

ORDERED that the complaint and any cross claims are dismissed; and it is further

ORDERED that the Clerk is directed to cancel the Notice of Pendency filed in connection herewith and mark his records accordingly.

ENTER,

_/s/ Hon. Thomas P. Aliotta_________

J.S.C.

DATED:March 21, 2012

Footnotes

Footnote 1:See Mortgage Electronic Registration Systems, Inc. as Nominee for American Brokers Conduit v. Eva Friedman, Jacob Frankfurther, et al., Index No. 131345/2009.

Footnote 2:UCC §3-204(2) provides that “An indorsement in blank specifies no particular indorsee and may consist of a mere signature. An instrument payable to order and indorsed in blank becomes payable to bearer and may be negotiated by delivery alone until specially indorsed.”

Down Load PDF of This Case

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Green Tree Servicing LLC v Lopez | NYSC “there is no evidence that MERS initially physically possessed the note or had the authority from the lender to assign it”

Green Tree Servicing LLC v Lopez | NYSC “there is no evidence that MERS initially physically possessed the note or had the authority from the lender to assign it”


SUPREME COURT – STATE OF NEW YORK
I.A.S. PART 37 – SUFFOLK COUNTY

GREEN TREE SERVICING LLC,
Plaintiff,

– against –

HILDA LOPEZ, VICTOR CASAS BAUTISTA,
“JOHN DOE #1” through unknown to plaintiff, the
persons or parties intended being the tenants,
occupants, persons or corporations, if any, having
or claiming an interest in or lien upon the premises,
described in the complaint,
Defendants.

Upon the following papers numbered 1 to —12…. read on this motion and cross motion for summary judgment; Notice
of Motion/ Order to Show Cause and supporting papers 1- 15; Notice of Cross Motion and supporting papers 16 – 22;
Answering Affidavits and supporting papers __ ; Replying Affidavits and supporting papers 23 – 25 ; Other __ ; it is,

ORDERED that this motion by plaintiff for an order granting summary judgment on its
complaint; striking the answer of defendants Hilda Lopez and Victor Casas Bautista and dismissing their
affirmative defenses; an order of reference appointing a referee to compute the amount due and owing to
plaintiff; an amendment of the caption of this action; and awarding the costs of this motion is denied;
and 1t is further

ORDERED that the cross-motion by defendants for an order granting summary judgment in their
favor based on fraud and pla111tiffs lack of standing is denied.

This is an action to foreclose a mortgage on property known as 723 Amsterdam Avenue, East
Patchogue, New York. Defendants Hilda Lopez and Victor Casas Bautista signed a note dated July 22,
2008, for a loan in the sum of$245,000.00 from the non-party lender BankUnited, FSB. The note
indicated that the yearly interest would be 6.75 percent and the monthly payments $1,589.07. The note
was secured by a mortgage dated July 22, 2008, on the subject property which was signed by defendants
[* 1]

Hilda Lopez and Victor Casas BautIsta. The mortgage indicated that Mortgage Electronic Registration
Systems, Inc. (MERS) was acting solely as a nominee for the lender BankUnited, FSB and that for the
purposes of recording the mortgage, MERS was the mortgagee of record. The mortgage was recorded in
the Suffolk County Clerk’s Office on July 30,2008. Defendants Hilda Lopez and Victor Casas Bautista
allegedly defaulted on their loan payments due on August I, 2009 and thereafter.

Plaintiff, Green Tree Servicing, LLC, commenced this action to foreclose the mortgage on June
4, 20 10. Defendants Hilda Lopez and Victor Casas Bautista, then pro se, answered by affidavit dated
July 6, 2010. Their answer asserts claims sounding in fraud. Defendants claim that they were regularly
makrng their loan payments until they were offered a modification of their mot1gage agreement, that they
paid fees and other monies, and relied on directions to stop payments until the modification became
effective, and that they received no further instructions only to find that their mortgage was being
foreclosed. Their answer also questions the standing of plaintiff to commence this action inasmuch as
defendants state that they did not enter into a mortgage agreement with plaintiff but were infomled that
plaintiff became the servicing agent for their mortgage loan.

Plaintiff now moves for summary judgment on its complaint, to strike the answer of defendants
Hilda Lopez and Victor Casas Bautista, an order of reference appointing a referee to compute the amount
due and owing to plaintiff, an amendment of the caption of this action to add Louis Casiano as a
necessary pm1y defendant in the plaee and stead of “John Doe #1” and to discontinue the action against
defendants “Jo1m Doe #2” through “John Doe #12.” Plaintiff asserts that defendants Hilda Lopez. and
Victor Casas Bautista admit in their answer their obligation under the note and mortgage and their
default. Plaintiff indicates, upon information and belief, that defendants had hired and paid a third party
in California to assist in the modification process. Plaintiff argues that defendants have failed to submit
any proof that plaintiff made any statements or that defendants could reasonably rely on those alleged
statements to their detriment. Plaintiff also asserts that the parties engaged in settlement conferences
with defendants’ counsel in attendance, exchanged financial documents and informed of any missing
documents, and that by letter dated April 7, 2011, addressed to defendant Hilda Lopez, plaintiff advised
that it was not considering the request for a modification because she withdrew the request on April 6,
201 I. In support of its motion plaintiff submits, among other things, the pleadings, the note, mortgage
and assignment of mortgage, and notices of default. Plaintiffs submissions include the affidavit of its
vice president, William Ashley, signed and notarized in South Dakota, stating that “the said note and
mortgage are now held by the Plaintiff having been physically delivered to the Plaintiff by Mortgage
Electronic Registration Systems, Inc. as nominee of BankUnited, FSB and by BankUnited, FSB on July
22, 2008. Thereafter the said assignment of the note and mortgage was memorialized in a written
 assignment of mortgage.”

Defendants Hilda LDpez and Victor Casas Bautista cross-move for summary judgment
contending that they did not withdraw their request for a modification, that plaintiff will be unjustly
enriched if the foreclosure occurs, and that plaintiff lacks standing to commence This action. 111 SUPPOl1
of their cross motion, defendants submit their answer, the note, mortgage and assignment of mortgage,
and the letter dated April 7, 2011, from plaintiff to defendant Hilda Lopez informing her that she
withdrew her modification request one day prior.

To establish a prima fllcie showing of entitlement to judgment as a matter of law in a foreclosure
action, a plaintiff must submit evidence of the mortgagc and note, and the defcndant’s default thereunder
(see Levitill I’ Boardwalk Capital, LLC, 78 AD3d 1019,912 NYS2d 101 [2£1Dcpt 2010]). Where, as
here, a plaintiff’s standing to commence a foreclosure action is placed in issue by a defendant, it is
incumbent upon the plaintiff to prove its standing to be entitled to relief (see Citimortgage, Inc. v Stosel,
89 AD3d 887, 934 NYS2d 182 [2£1Dept 2011]). A plaintiff establishes Its standing in a mortgage
foreclosure action by demonstrating that it is both the holder or assignee of the subject mortgage and the
holder or assignee of the underlying note, either by physical delivery or by execution ofa written
assignment before commencement of the action (see id.). An assib’l1mcnt of a mortgage without
assignment of the underlying note or bond is a nullity, and no interest is acquired by it (see Deutsche
Bank Natl. Trust CO.I’ Barnett, 88 AD3d 636, 931 NYS2d 630 [2£1Oept 2011]; Bank of N. Y. v
Silverberg, 86 AD3d 274, 926 NYS2d 532 [2d Dept 2011]).

Defendants must produce evidentiary proof in admissible fonn sufficient to demonstrate the
existence of a triable issue of fact as to a bona fide defense to the action (see Argelll Mtge. Co., LLC l’
Melltesalla, 79 AD3d 1079,915 NYS2d 591 [2£1Dept 20tO]). Such defenses include waiver, estoppel,
bad faith, fraud, or oppressive or unconscionable conduct by the plaintiff (see Capstone Business
Credit, LLC v Imperia Family Realty, LLC, 70 AD3d 882, 895 NYS2d 199 [2£1Dcpt 2010]; Cochran
Illv. Co., Illc. v Jacksoll, 38 AD3d 704, 834 NYS2d 198 [2d Dcpt 2007]).

Here, plaintiff failed to establish, prima facie, that it had standing to commence the action (see
HSBC Balik USA v Hemalldez, 92 AD3d 843, 939 NYS2d 120 [2d Dept 2012]). The affidavit from
plaintiffs vice president, based on his review and personal knowledge of the facts and books and records
maintained by plaintiff in his possession, is not in admissible form inasmuch as it was signed and
notarized outside of the State of New York, and was not accompanied by the required certificate of
 conformity (see CPLR 2309 [0]; PRA UI, LLC v Gonzalez, 54 AD3d 917, 864 NYS2d 140 [2d Dcpt
2008]; see also Real Property Law § 299-a [1]). In any event, the affidavit is unclear as to which entity,
MERS or BankUnited, FSB, physically delivered the note to plainti ff so as to establish that plaintiff had
physical possession of the note prior to commencement this action (see HSBC Bank USA v Hernandez,
supra; Citimortgage, Illc. v Stosel, supra; Deutsche Bank Nat!. Trust CO. I’ Barnett, supra; Aurora
Loall Serv,”., LLC v Weisbillm, 85 AD3d 95, 923 NYS2d 609 [2d Dopt 2011]; U.s. Balik, N.A. “
Collymore, 68 AD3d 752, 890 NYS2d 578 [2d Dept 2009]). This is particularly important since the
assignment only assigns the mortgage and there is no evidence that MERS initially physically possessed
the note or had the authority from the lender to assign it (see Aurora Loan Services, LLC v Weisblum,
supra). Therefore, the motion for summary judgment is denied.

With respect to the cross-motion for summary judgment by defendants Hilda Lopez and Victor
Casas Bautista, it is deficient inasmuch as it lacks a copy of the complaint as well as affidavits from
defendants Hilda Lopez and Victor Casas Bautista who have personal knowledge of the alleged
modification transaction (see Airel’ll v Shepherd, 89 AD3d 1046,933 NYS2d 597 [2d Dept 2011]) .
CPLR 3212 (b) requires that a motion for summary judgment must be supported by, among other things,
a copy of the pleadings and an affidavit “by a person having knowledge of the facts” (see CPLR 3212
rb]; Maragos I’Sakurtli, 92 AD3d 922, 938 NYS2d 908 [2£1Dept 2012]; id.). Although the motion
papers indicate that defendants’ counsel was present at the settlement conferences, it is unclear from the
cross-motion papers, which do not contam an affinnation in support in proper form by defendants’
counsel, whether defendants’ counsel had any personal knowledge concerning the alleged modification
Iransactlon (see Rizzo l’ Rizzo, 277 AD 888, 97 NYS2d 779 [2d Dept 1950]; compare Davey v DO/WI, 46
AD3d 854, 851 NYS2d 576 [2d Dcrt 2007]). Therefore, the cross-motion for summary judgment is
denied.

Accordingly. the motion for summary judgment, an order of reference, and related relief~and the
cross-motion for summary Judgment are denied.

Dated: March 28, 2012

Hon. Joseph Farneti
Acting Justice Supreme Court

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U.S. BANK v. MOORE | Oklahoma SC “a fundamental precept of the law to expect a foreclosing party to actually be in possession of its claimed interest in the Note”

U.S. BANK v. MOORE | Oklahoma SC “a fundamental precept of the law to expect a foreclosing party to actually be in possession of its claimed interest in the Note”


U.S. BANK v. MOORE
2012 OK 32

Case Number: 109763
Decided: 04/10/2012

THE SUPREME COURT OF THE STATE OF OKLAHOMA


Cite as: 2012 OK 32, __ P.3d __


NOTICE: THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION IN THE PERMANENT LAW REPORTS. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR WITHDRAWAL.

 


U.S. BANK, NATIONAL ASSOCIATION, NOT IN ITS INDIVIDUAL CAPACITY BUT SOLELY AS TRUSTEE ON BEHALF OF GSAA HOME EQUITY TRUST 2006-6, Plaintiff/Appellee,
v.
DAVID F. MOORE, a/k/a DAVID F. MOORE and BARBARA MOORE a/k/a BARBARA K. MOORE, Defendants/Appellants.

ON APPEAL FROM THE DISTRICT COURT OF OKLAHOMA COUNTY
HONORABLE BRYAN C. DIXON
DISTRICT JUDGE

¶0 Appeal of a summary judgment granted on May 13, 2011, in favor of Chase Home Finance, LLC, and against David F. and Barbara Moore. In a Journal Entry of Judgment, filed on August 26, 2011, the trial court found the Appellant was the undisputed owner and holder of the Note and Mortgage. The Moores appealed on September 23, 2011, arguing standing, and this Court retained the matter on November 18, 2011.

REVERSED AND REMANDED WITH INSTRUCTIONS

Gary L. Blevins, GARY L. BLEVINS & ASSOCIATES, PC, Oklahoma City Oklahoma, for Defendants/Appellants.
Bryan Miles Harrington and A. Grant Schwabe, KIVELL, RAYMENT AND FRANCIS, PC, Tulsa, Oklahoma, for Plaintiff/Appellee.

COMBS, J.

FACTUAL AND PROCEDURAL HISTORY

¶1 On October 21, 2005, David F. Moore and Barbara Moore, husband and wife (hereinafter “Appellants”), executed a Note and Mortgage in favor of Colonial Bank, N.A. (hereinafter “Lender”), for property located in Oklahoma County, Oklahoma. Mortgage Electronic Registration Systems, Inc. (hereinafter “MERS”), was designated as the nominee for the lender pursuant to subsection (C) of the Mortgage.1 Within the Mortgage was a security interest provision with the following granting clause:

Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument, but, if necessary to comply with law or custom, MERS (as nominee for Lender and Lender’s successors and assigns) has the right: to exercise any or all of those interests, including. . .the right to foreclose and sell the Property.

¶2 Also contained in the Mortgage was a provision entitled “Sale of Note; Change of Loan Servicer.” Per the terms of this provision:

The Note or a partial interest in the Note (together with this Security Instrument) can be sold one or more times without prior notice to Borrower.

Thus, the borrower may have difficulty in determining who holds the note and mortgage, and to whom the payment is due.

¶3 Appellants defaulted on the Note during August of 2008. U.S. Bank, National Association, commenced foreclosure proceedings on December 24, 2008, not in its individual capacity, but solely as trustee on behalf of GSAA Home Equity Trust 2006-6 (hereinafter “Appellee”). According to the verified petition, the Appellee was “the present holder of said Note and Mortgage having received due assignment through mesne assignments of record or conveyance via mortgaging servicing transfer.” The original petition did not attach a copy of the note in question sued upon. Appellants answered, pro se, on May 20, 2009. Appellants disputed all allegations and requested that the Appellee’s “submit additional documentation to prove their claims including the representation that they were the “present holder of said Note.” Appellee subsequently filed an amended petition and a second amended petition to add additional defendants. Neither of these amendments included a copy of the note sued upon.

¶4 Appellee submitted its Motion for Summary Judgment (hereinafter the “Motion”) to the court on November 20, 2009. Again, the Appellee represented that it was the holder of the Note. Documentation attached to the Motion attempted tosupport this representation: it included the Mortgage, the Note, an Assignment of Mortgage, and an Affidavit in Support of Appellee’s Motion for Summary Judgment. For the first time, Appellee submitted the Note and Mortgage to the trial court. The note was indorsed in blank and contained no date for the indorsement.

¶5 Executed on October 21, 2005, the Note designated the Appellants as the Borrowers and Colonial Bank, N.A., as the Lender. The following agreement, inter alia, was made:

I [Appellants] understand that the Lender may transfer this Note. The Lender or anyone who takes this Note by transfer and who is entitled to receive payments under this Note is called the ‘Note Holder.’

An Assignment of Mortgage (hereinafter the “Assignment”) was attached to the motion. MERS, again as nominee for the Lender, assigned the Mortgage, which secured “the payment of a certain promissory note” described therein, to the Appellee.2 The Assignment was executed and notarized on February 11, 2009; it was recorded one week later, but made effective “11/27/2008.” In other words, the Assignment was executed after the foreclosure suit commenced, but made effective before the filing of the petition as well as any subsequent amendments to the petition.

¶6 Appellants did not respond to Appellee’s Motion, and the trial court entered a default judgment against them. The trial court entered a final judgment, on December 17, 2009, (hereinafter “Judgment”) in favor of the Appellee. The judgment concluded that Appellee was the owner and holder of the Note and Mortgage; the court then approved an Order of Sale. Approximately six (6) weeks later, on January 31, 2010, the Appellants filed for protection under Chapter 7 of Title XI of the United States Bankruptcy Code, which stayed the proceedings. On March 2, 2011, the bankruptcy court granted Appellee’s Motion to Lift the Automatic Stay. Shortly thereafter, on March 18, 2011, with the assistance of counsel, the Appellants filed a Petition to Vacate the Judgment. The trial court subsequently dismissed the Appellants Petition to Vacate the Judgment.

STANDARD OF REVIEW

¶7 The standard of review3for a trial court’s ruling either vacating or refusing to vacate a judgment is abuse of discretion. Ferguson Enterprises, Inc. v. Webb Enterprises, Inc., 2000 OK 78, ¶ 5, 13 P.3d 480, 482; Hassell v. Texaco, Inc., 1962 OK 136, 372 P.2d 233. A clear abuse-of-discretion standard includes appellate review of both fact and law issues. Christian v. Gray, 2003 OK 10, ¶ 43, 65 P.3d 591, 608. An abuse of discretion occurs when a court bases its decision on an erroneous conclusion of law, or where there is no rational basis in evidence for the ruling. Fent v. Oklahoma Natural Gas Co., 2001 OK 35, ¶12; 27 P.3d 477, 481.

ANALYSIS

¶8 The Appellants have questioned the standing of the Appellee to commence foreclosure proceedings against them. “Standing refers to a person’s legal right to seek relief in a judicial forum.” Fent v. Contingency Review Board, 2007 OK 27, ¶ 7, 163 P.3d 512, 519-520. Foremost, the party seeking relief must prove that they suffered an actual and concrete injury. Absent an injury of this nature, the party lacks standing. Whether or not such an injury exists is determined at the commencement of the lawsuit. Lujan v. Defenders of Wildlife, 504 U.S. 555, 570, n. 5, 112 S. Ct. 2130, 2142, 119 L.Ed. 351 (1992).

¶9 Countering, Appellee argues that Appellants have forfeited the opportunity to question enforcement of the Note. However, a review of the record reveals the Appellants, in their pro se Answer, clearly questioned the ability of the Appellee to enforce the Note.4 It is settled law in Oklahoma that standing “may be raised at any stage of the judicial process by any party or by the court sua sponte.” Hendrick v Walters, 1993 OK 162, ¶ 4, 865 P.2d 1232, 1234 (emphasis original). Therefore, this issue is properly before the Court.

¶10 Article III of the Uniform Commercial Code (hereinafter “U.C.C.”) governs negotiable instruments and is codified in the Oklahoma Statutes. Promissory notes are negotiable instruments. See, 12A OS 2001, § 3-104. The Appellee has the burden of showing that it is entitled to enforce the instrument. See Reserve Loan Life Ins. Co. v. Simmons, 1929 OK 669, ¶ 9, 282 P. 279, 281. Unless the Appellee was able to enforce the Note at the time the suit was commenced, it cannot maintain its foreclosure action against the Appellants.

¶11 Ownership of the note determines ownership of the mortgage. Engle v. Federal Nat’l. Mortg. Ass’n, 1956 OK 176, ¶ 7, 300 P.2d 997, 999. Oklahoma law does not permit the bifurcation of the security interest from the note. Deutsche Bank National Trust v. Brumbaugh, 2012 OK 3, ___P.3d ___; BAC Home Loans Servicing, L.P. v. White, 2011 OK CIV APP 35, ¶ 10, 256 P.3d 1014, 1017. A party which is assigned a mortgage without the accompanying promissory note holds no rights of enforcement. Id. Plainly, a party must properly acquire rights to both instruments before such party is able to enforce their terms.

¶12 In the present case, the only instrument attached to Appellee’s petition was the Mortgage. Appellee did not produce the Note until the summary disposition stage. Under the U.C.C., both holders and non-holders in possession of a negotiable instrument are permitted to enforce the instrument. 12A OS 2001, § 3-301. A “holder” is “(A) the person in possession of a negotiable instrument that is payable either to bearer5 or to an identified person that is the person in possession. 12A OS 2001, § 1-201(21).6 The evidence in the present matter is not clear as to whether the Appellee held the Note as a “holder” or as a “non-holder in possession with the ability to enforce the Note.

¶13 To enforce a negotiable instrument as a non-holder in possession, the moving party must show (i) that the party possessed the negotiable instrument when suit was filed; (ii) how possession was achieved; and (iii), if necessary, that the purpose of the transfer was to transfer rights of enforcement. 12A O.S. 2001, § 3-301. The Appellee has not demonstrated its possession of the Note at the time it commenced foreclosure proceedings against Appellants.

¶14 Appellants contend Appellee lacks standing to commence this foreclosure action. Appellants further allege the validity of the affidavit offered in support of Appellees Motion for Summary Judgment. The dispositive issue is whether or not Appellee has standing. Appellants’ argument is based on the failure of Appellee to establish Appellee was a person entitled to enforce the Note at the commencement of the action and the inability to establish the effectiveness of the indorsements attached to the Note when the Note was ultimately produced as an exhibit to the Appellees Motion for Summary Judgment.

¶15 This Court has previously held:

Standing, as a jurisdictional question, may be correctly raised at any level of the judicial process or by the Court on its own motion. This Court has consistently held that standing to raise issues in a proceeding must be predicated on interest that is “direct, immediate and substantial.” Standing determines whether the person is the proper party to request adjudication of a certain issue and does not decide the issue itself. The key element is whether the party whose standing is challenged has sufficient interest or stake in the outcome.

Matter of the Estate of Doan, 1986 OK 15, ¶7, 727 P.2d 574, 576. In Hendrick v. Walters, 1993 OK 162, ¶ 4, 865 P.2d 1232, 1234, this Court also held:

Respondent challenges Petitioner’s standing to bring the tendered issue. Standing refers to a person’s legal right to seek relief in a judicial forum. It may be raised as an issue at any stage of the judicial process by any party or by the court sua sponte. (Emphasis original)

¶16 Furthermore, in Fent v. Contingency Review Board, 2007 OK 27, footnote 19, 163 P.3d 512, 519, this Court stated “[s]tanding may be raised at any stage of the judicial process or by the court on its own motion.” Additionally in Fent, this Court stated:

Standing refers to a person’s legal right to seek relief in a judicial forum. The three threshold criteria of standing are (1) a legally protected interest which must have been injured in fact- i.e., suffered an injury which is actual, concrete and not conjectural in nature, (2) a causal nexus between the injury and the complained-of conduct, and (3) a likelihood, as opposed to mere speculation, that the injury is capable of being redressed by a favorable court decision. The doctrine of standing ensures a party has a personal stake in the outcome of a case and the parties are truly adverse.

Fent v. Contingency Review Board, 2007 OK 27, ¶7, 163 P.3d 512, 519-520. In essence, a plaintiff who has not suffered an injury attributable to the defendant lacks standing to bring a suit. And, thus, “standing [must] be determined as of the commencement of suit; . . .” Lujan v. Defenders of Wildlife, 504 U.S. 555, 570, n.5, 112 S.Ct. 2130, 2142, 119 L.Ed. 351 (1992).

¶17 To commence a foreclosure action in Oklahoma, a plaintiff must demonstrate it has a right to enforce the note and, absent a showing of ownership, the plaintiff lacks standing. Gill v. First Nat. Bank & Trust Co. of Oklahoma City, 1945 OK 181, 159 P.2d 717.7An assignment of the mortgage, however, is of no consequence because under Oklahoma law, “[p]roof of ownership of the note carried with it ownership of the mortgage security.” Engle v. Federal Nat. Mortg. Ass’n, 1956 OK 176, ¶7, 300 P.2d 997, 999. Therefore, in Oklahoma it is not possible to bifurcate the security interest from the note.” Deutsche Bank National Trust v. Brumbaugh, 2012 OK 3, ___P.3d ___; BAC Home Loans Servicing, L.P. v. White, 2011 OK CIV APP 35, ¶ 10, 256 P.3d 1014, 1017. Because the note is a negotiable instrument, it is subject to the requirements of the UCC. Thus, a foreclosing entity has the burden of proving it is a “person entitled to enforce an instrument” by showing it was “(i) the holder of the instrument, (ii) a nonholder in possession of the instrument who has the rights of a holder, or (iii) a person not in possession of the instrument who is entitled to enforce the instrument pursuant to Section 12A-3-309 or subsection (d) of Section 12A-3-418 of this title.” 12A O.S. 2001 §3-301.

¶18 To show you are the “holder” of the Note you must prove you are in possession of the note and the note is either “payable to bearer” (blank indorsement) or to an identified person that is the person in possession (special indorsement).8 Therefore, both possession of the note and an indorsement on the note or attached allonge9 are required in order for one to be a “holder” of the Note.

¶19 Negotiation is the voluntary or involuntary transfer of an instrument by a person other than the issuer to a person who thereby becomes its holder. 12A O.S. 2001, § 3-201. Transfer occurs when the instrument is delivered by a person other than its issuer for the purpose of giving to the person receiving delivery the right to enforce the instrument. 12A O.S. 2001, § 3-203. Delivery of the note would still have to occur even though there is no negotiation. Delivery is defined as the voluntary transfer of possession. 12A O.S. 2001, § 1-201(b) (15). The transferee would then be vested with any right of the transferor to enforce the note. 12A O.S. 2001, 3-203(b). Some jurisdictions have held, without holder status and therefore the presumption of a right to enforce, the possessor of the note must demonstrate both the fact of the delivery and the purpose of the delivery of the Note to the transferee in order to qualify as the person entitled to enforce. In re Veal, 50 B.R. 897, 912 (B.A.P. 9th Cir. 2011). See also, 12A O.S. 2001, § 3-203.

¶20 Appellee must also demonstrate it became a “person entitled to enforce” prior to the filing of the foreclosure proceeding. We find there is no evidence in the record establishing Appellee had standing to commence this foreclosure action. The trial court’s granting of a default judgment in favor of Appellee could not have been rationally based upon the evidence or Oklahoma law. Therefore, we find that the trial court abused its discretion by dismissing the Appellants Petition to Vacate the default judgment. Because this issue is dispositive, we will not address the remaining issues on appeal. The order denying Appellant’s petition and motion to vacate should be reversed and remanded back for further proceedings to determine whether Appellee is a person entitled to enforce the Note consistent with this opinion.

CONCLUSION

¶21 It is a fundamental precept of the law to expect a foreclosing party to actually be in possession of its claimed interest in the Note, and to have the proper supporting documentation in hand when filing suit, showing the history of the Note, so that the defendant is duly apprised of the rights of the plaintiff. This is accomplished by showing the party is a holder of the instrument or a nonholder in possession of the instrument who has the rights of a holder, or a person not in possession of the instrument who is entitled to enforce the instrument pursuant to 12A O.S. 2001, § 3-309 or 12A O.S. 2001, § 3-418. Likewise, for the homeowners, absent adjudication on the underlying indebtedness, today’s decision to reverse the dismissal of the petition and motion to vacate cannot cancel their obligation arising from an authenticated Note, or insulate them from foreclosure proceedings based on proven delinquency. This Court’s decision in no way releases or exonerates the debt owed by the defendants on this home. See, U.S. Bank National Association v. Kimball, 27 A.3d 1087, 75 UCC Rep.Serv.2d 100, 2011 VT 81 (VT 2011); and Indymac Bank, F.S.B. v. Yano-Horoski, 78 A.D.3d 895, 912 N.Y.S.2d 239 (2010).

REVERSED AND REMANDED WITH INSTRUCTIONS

¶22 CONCUR: TAYLOR, C.J., KAUGER, WATT, EDMONDSON, REIF, COMBS, JJ.

¶23 DISSENT: WINCHESTER (JOINS GURICH, J.), GURICH (BY SEPARATE WRITING), JJ.

¶24 RECUSED: COLBERT, V.C.J.

FOOTNOTES

1 Subsection (C) of the Mortgage reads as follows: “‘MERS’ is Mortgage Electronic Registration Systems, Inc. MERS is a separate corporation that is acting solely as a nominee for Lender and Lender’s successors and assigns. MERS is the mortgagee under this security instrument.”

2 Specifically, the assignment was made to “U.S. Bank National Association, not in its individual capacity, but solely as trustee on behalf of GSAA Home Equity Trust 2006-6.”

3 Summary judgment decisions are reviewed de novo, Carmichael v. Beller, 1996 OK 48, ¶ 2, 914 P.2d 1051, 1053, whereas orders denying or granting a petition to vacate are reviewed for an abuse of discretion, Patel v. OMH Medical Center, Inc. , 1999 OK 33 at ¶ 20.

4 In relevant part, the Answer states: “The defendants hereby dispute the cause and information within the petition and hereby request that the plaintiff provide proper documentation of any and all allegations” including the allegation that the Appellee was present holder of the Note and Mortgage and thereby entitled to enforce its terms.

5 Bearer” means…a person in possession of an instrument, negotiable tangible document of title, or certificated security payable to bearer or endorsed in blank. 12A, O.S. 2001§ 1-201(5).

6 Documents of title are not at issue. Therefore, this is the only relevant U.C.C. definition of “holder.”

7 This opinion occurred prior to the enactment of the UCC. It is, however, possible for the owner of the note not to be the person entitled to enforce the note if the owner is not in possession of the note. (See the REPORT OF THE PERMANENT EDITORIAL BOARD FOR THE UNIFORM COMMERCIAL CODE, APPLICATION OF THE UNIFORM COMMERCIAL CODE TO SELECTED ISSUES RELATING TO MORTGAGE NOTES (NOVEMBER 14, 2011)).

812A O.S. 2001, §§ 1-201(b)(21), 3-204 and 3-205

9 According to Black’s Law Dictionary (9th ed. 2009) an allonge is “[a] slip of paper sometimes attached to a negotiable instrument for the purpose of receiving further indorsements when the original paper is filled with indorsements.” It should be noted that under 12A O.S. 2001, § 3-204(a) and its comments in paragraph 2, it is no longer necessary that an instrument be so covered with previous indorsements that additional space is required before an allonge may be used. An allonge, however, must still be affixed to the instrument.


GURICH, J., with whom WINCHESTER, J. joins dissenting:

¶1 I respectfully dissent. In this case, the record indicates that attached to Plaintiff’s Motion for Summary Judgment was an indorsed-in-blank note, the mortgage, an assignment of mortgage, and an affidavit in support of the motion for summary judgment. Because the Plaintiff was the proper party to pursue the foreclosure and because the Plaintiff presented the proper documentation at summary judgment to prove such, the trial court did not abuse its discretion in denying Defendants’ Petition to Vacate. I would affirm the trial court for the reasons stated in my dissenting opinions in Deutsche Bank National Trust Co. v. Matthews, 2012 OK 14, ___P.3d___ (Gurich, J. dissenting) and Bank of America, NA v. Kabba, 2012 OK 23, ___P.3d___ (Gurich, J. dissenting).1

FOOTNOTES

1 Although I originally concurred in the majority opinion in Deutsche Bank National Trust v. Brumbaugh, 2012 OK 3, ___P.3d___, which the majority now cites as authority in this case, after further consideration, I disagree with the majority’s analysis in that case, and my views on the issues in these cases are accurately reflected in J.P. Morgan Chase Bank N.A. v. Eldridge, 2012 OK 24, ___P.3d___ (Gurich, J. concurring in part and dissenting in part); Kabba, 2012 OK 23, ___P.3d___ (Gurich, J. dissenting); CPT Asset Backed Certificates, Series 2004-EC1 v. Kham, 2012 OK 22, ___P.3d___ (Gurich, J. dissenting); Deutsche Bank National Trust Co. v. Richardson, 2012 OK 15, ___P.3d___ (Gurich, J. concurring in part and dissenting in part); and Matthews, 2012 OK 14, ___P.3d___ (Gurich, J. dissenting).

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Abigail Field: Hiding the Enforcement Fraud At the Heart of the Mortgage Settlement

Abigail Field: Hiding the Enforcement Fraud At the Heart of the Mortgage Settlement


Abigail C. Field-

On Thursday, April 5th U.S. District Court Judge Rosemary M. Collyer announced she had decided to sign off on the ”$25 billion” Mortgage Settlement. By “announced”, I mean she signed the consent orders all our major law enforcers and the biggest bankers had agreed to, and entered them into the record. Judge Collyer didn’t actually say anything about the deal. She didn’t let anyone else say anything, either: she didn’t hold a public hearing on the deal.

In acting silently, Judge Collyer not only okayed the deal’s lousy terms, which institutionalize servicer theft and foreclosure fraud, she reinforced the incredibly poor public process that’s kept the enforcement fraud at the heart of the deal hidden. Deliberately hidden.

Magical Misdirection

To understand just how deceptive “our” government and “our” law enforcers have been with us

[REALITY CHECK]

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[VIDEO] Shaun Donovan on the Foreclosure Fraud Settlement & Wish Wash

[VIDEO] Shaun Donovan on the Foreclosure Fraud Settlement & Wish Wash


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Commissioners: Bristol County, MA joining Norfolk, Plymouth counties in filing suits against MERS

Commissioners: Bristol County, MA joining Norfolk, Plymouth counties in filing suits against MERS


Taunton Gazette-

The Bristol County Board of Commissioners received a letter from Attorney Garrett Bradley notifying them that a complaint against Mortgage Electronic Registration Systems (MERS) was filed in Suffolk County on March 29.

Previously, the commissioners voted on Feb. 14 to file a lawsuit to reclaim millions of dollars from MERS for allegedly skirting public recording laws at the expense of the county’s three property registries.

Bristol County is joining Norfolk and Plymouth counties in filing lawsuits against MERS.

Commissioners have previously said the county won’t know exactly how much money they are looking to collect until the discovery process of litigation.

Read more: [TAUNTON GAZETTE]

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Morgan Stanley to be fined in electronic mortgage system (MERS) and foreclosure scandal

Morgan Stanley to be fined in electronic mortgage system (MERS) and foreclosure scandal


Wonder when they will get to LPS…

Computer World UK-

The US Federal Reserve has issued a punishing court order to Morgan Stanley, as it prepares to fine the bank over the use of automated ‘robo signing’ of documents relating to foreclosures for struggling US mortgage payers. It ordered the bank to make significant process, data and systems improvements.

The issue relates to a troubled electronic mortgage registry created by a range of the largest banks, which is allegedly plagued with errors. Those that have brought claims against the banks have said access to the database was deliberately restricted by the banks, and that mortgage foreclosures were often based on incorrect data entered by the banks as they rushed to offload the loans.

The court order issued this week concerns the Saxon business, which Morgan Stanley has sold to mortgage servicing group Ocwen Financial. The Fed said Morgan Stanley retained responsibility for the impact of Saxon’s actions. Saxon had issued over 225,000 residential mortgage loans.

Robo-signing typically involves employees of mortgage servicing companies automatically signing off foreclosure papers without checking them, in the interests of fast processing the papers.

The practice was allegedly supported by the Mortgage Electronic Registration Systems (MERS), which

[COMPUTER WORLD UK]

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Richard (RJ) Eskow: While Jamie Dimon Gently Weeps, Another “Big Stick” Bank Attack on Democracy

Richard (RJ) Eskow: While Jamie Dimon Gently Weeps, Another “Big Stick” Bank Attack on Democracy


HuffPO-

He’s at again – and we’re glad. A lot of smart people are dedicating their lives to fighting the corrosive effect of Wall Street on our economy and our democracy, but the best spokesman for that cause comes from Wall Street itself.

JPMorgan Chase CEO Jamie Dimon is still the poster child for today’s morally degraded, self-entitled banker mentality. I don’t know why he keeps talking, but he’s the gift that keeps on giving.

At every major junction in the post-crisis debate about banking, Dimon has stepped in with a perfectly tactless remark that illustrates both the vacuity and the moral corruption of his industry. This week was no exception.

JPM: CSI

Dimon’s own bank is the perfect case study in

[HUFFINGTON POST]

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BREAKING: The $25B Foreclosure Fraud settlement has been approved by U.S. District Judge Rosemary Collyer.

BREAKING: The $25B Foreclosure Fraud settlement has been approved by U.S. District Judge Rosemary Collyer.


Via

Nothing from the consent judgment entered into court in the $25B foreclosure settlement may constitute “evidence against Defendant.”

WSJ-

The settlement was announced in February and filed in court as a consent judgment last month. Judge Rosemary Collyer approved the landmark settlement on Wednesday. The signed order was filed in U.S. District Court for the District of Columbia.

The pact will offer reductions in loan principal and other assistance to qualifying homeowners. The largest portion of the aid, valued at $17 billion, goes to borrowers at risk of foreclosure. Banks will pay $5 billion in fines, including nearly $1 billion to the Federal Housing Administration.

[WALL STREET JOURNAL]

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Amicus Brief of Oregon AG John Kroger on Hooker v Northwest Trustee, BofA & MERS lawsuit pending before the 9th U.S. Circuit Court of Appeals.

Amicus Brief of Oregon AG John Kroger on Hooker v Northwest Trustee, BofA & MERS lawsuit pending before the 9th U.S. Circuit Court of Appeals.


Hi/5 Dan Marsh

IN THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

IVAN HOOKER, KATHERINE HOOKER

v.

NORTHWEST TRUSTEE SERVICES, INC.;
BANK OF AMERICA, N.A.; MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.,

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ROBERTSON v. MERSCORP, INC. | USDC M.D. Alabama Remands to State Court, Failed to record certain assignments of interests in mortgages

ROBERTSON v. MERSCORP, INC. | USDC M.D. Alabama Remands to State Court, Failed to record certain assignments of interests in mortgages


United States District Court, M.D. Alabama, Northern Division.

NANCY O. ROBERTSON, in her
official capacity as
Probate Judge of Barbour
County, Alabama, on behalf
of herself and all others
similarly situated,

Plaintiff,

v.

MERSCORP, INC., a Delaware
corporation, and MORTGAGE
ELECTRONIC REGISTRATION
SYSTEMS, INC., a Delaware
corporation,

Defendants.

Plaintiff Nancy O. Robertson (“Robertson”), acting in her official capacity as probate judge of Barbour County, Alabama, and on behalf of all probate judges in the State, brought suit in state court against defendants MERSCORP, Inc. (“MERSCORP”), and Mortgage Electronic Registration Systems, Inc. (“MERS”), claiming that the defendants failed to record certain assignments of interests in mortgages. Pursuant to 28 U.S.C. §§ 1332, 1441, and 1446, the defendants removed this case to federal court on a diversity-of-citizenship ground. Robertson moves to remand to state court because the defendants have failed to satisfy their burden of demonstrating that the $75,000 amount-in-controversy requirement for diversity jurisdiction has been met in this case. For the reasons that follow, Robertson’s remand motion will be granted.

I. STANDARD FOR REMAND

Where, as here, a defendant seeks to remove a case on a diversity-jurisdiction ground and the damages have not been specified by the plaintiff, the removing defendant “must prove by a preponderance of the evidence that the amount in controversy exceeds the $75,000 jurisdictional requirement.” Leonard v. Enterprise Rent A Car, 279 F.3d 967, 972 (11th Cir. 2002). “A removing defendant bears the burden of proving proper federal jurisdiction.” Id. The court may not “speculate in an attempt to make up for the notice’s failings.” Lowery v. Alabama Power Co., 483 F.3d 1184, 1215 (11th Cir. 2007).

II. BACKGROUND

The defendants operate the MERS system, which is a digital marketplace for mortgages and mortgage-backed securities. As the Ninth Circuit Court of Appeals succinctly explained:

“MERS is a private electronic database, operated by MERSCORP, Inc., that tracks the transfer of the `beneficial interest’ in home loans, as well as any changes in loan servicers. After a borrower takes out a home loan, the original lender may sell all or a portion of its beneficial interest in the loan and change loan servicers. The owner of the beneficial interest is entitled to repayment of the loan. For simplicity, we will refer to the owner of the beneficial interest as the `lender.’ The servicer of the loan collects payments from the borrower, sends payments to the lender, and handles administrative aspects of the loan. Many of the companies that participate in the mortgage industry—by originating loans, buying or investing in the beneficial interest in loans, or servicing loans—are members of MERS and pay a fee to use the tracking system.

“When a borrower takes out a home loan, the borrower executes two documents in favor of the lender: (1) a promissory note to repay the loan, and (2) a deed of trust, or mortgage, that transfers legal title in the property as collateral to secure the loan in the event of default. State laws require the lender to record the deed in the county in which the property is located. Any subsequent sale or assignment of the deed must be recorded in the county records, as well.
“This recording process became cumbersome to the mortgage industry, particularly as the trading of loans increased. It has become common for original lenders to bundle the beneficial interest in individual loans and sell them to investors as mortgage-backed securities, which may themselves be traded. MERS was designed to avoid the need to record multiple transfers of the deed by serving as the nominal record holder of the deed on behalf of the original lender and any subsequent lender.

“At the origination of the loan, MERS is designated in the deed of trust as a nominee for the lender and the lender’s `successors and assigns,’ and as the deed’s `beneficiary’ which holds legal title to the security interest conveyed. If the lender sells or assigns the beneficial interest in the loan to another MERS member, the change is recorded only in the MERS database, not in county records, because MERS continues to hold the deed on the new lender’s behalf. If the beneficial interest in the loan is sold to a non-MERS member, the transfer of the deed from MERS to the new lender is recorded in county records and the loan is no longer tracked in the MERS system.”

Cervantes v. Countrywide Home Loans, Inc., 656 F.3d 1034, 1038-39 (9th Cir. 2011) (internal citations omitted).

In her role as probate judge of Barbour County, Robertson is responsible for compiling and maintaining an accurate index of grantors and grantees of interests in real estate. Robertson also collects fees for the assignment and recording of mortgages.

Robertson alleges that the MERS system illegally circumvents Alabama’s recording statutes for interests in real estate. Robertson seeks an accurate accounting and index of all transfers in real estate involving the MERS system for the past ten years, an injunction ordering the defendants to comply with Alabama’s recording statutes, and reimbursement for any fees that should have been paid.

III. DISCUSSION

The defendants posit two theories of potential liability that they believe push the amount-in-controversy above the $75,000 threshold. They are uncertain which theory Robertson intends to pursue in this litigation, but base these theories on a reading of the complaint. As the defendants have the burden of establishing this court’s jurisdiction, the court focuses on these two theories to ascertain whether removal jurisdiction is proper.

First, the defendants put forward a Note Transfer Theory: any sale or transfer of notes constitutes an assignment of mortgages that must be recorded under Alabama law. According to the defendants, approximately 3,475 mortgages naming MERS as mortgagee of record were recorded in Barbour County for the past ten years, the relevant time period in Robertson’s complaint. The defendants argue that these mortgages were transferred at least 2,693 times. The Barbour County Probate Court charges a $16.50 fee to record the first page of an assignment and $2.50 for each additional page. Assuming that each assignment is one page, the defendants would owe $44,434.50 in recording fees for the past ten years.

Acknowledging that this figure falls short of the jurisdictional threshold, the defendants extrapolate the cost of recording fees ten years into the future. They presume that the number of note transfers would be the same, thereby reaching an amount-in-controversy of $88,869.
This methodology, however, ignores that the past ten years witnessed an unprecedented housing boom followed by the worst recession since the 1930s. It is simply unrealistic to assume that the number of note transfers in the next ten years would mirror the past decade. The defendants have put forward no evidence to back up their assumption about a constant rate of note transfers over the next ten years. This court cannot speculate as to future-note-transfer rates. Lowery, 483 F.3d at 1215 (“The absence of factual allegations pertinent to the existence of jurisdiction is dispositive and, in such absence, the existence of jurisdiction should not be divined by looking to the stars.”). Because the Note Transfer Theory cannot surmount the amount-in-controversy requirement without resort to hypothetical future costs, the defendants have failed to meet their burden.

The defendants’ alternative theory of liability is the False Mortgage Theory: the listing of MERS as the mortgagee of record is a false designation and concealment. Under this theory, MERS would have to re-record approximately 3,475 mortgages in Barbour County to update the mortgagee of record. According to the defendants, a standard mortgage is 15 pages long and the Barbour County Probate Court charges $16.50 for the first page and $2.50 for each additional page. The total cost to re-record these mortgages would be approximately $178,962.50.

While this figure is above the amount-in-controversy threshold, Robertson expressly disavows any reliance on the False Mortgage Theory. Rather, Robertson claims that the “mortgage, as recorded, does not conceal the real parties in interest.” Robertson’s Reply Brief (Doc. No. 18) at 9. Robertson’s complaint concerns actions taken after the mortgage is recorded, “when the security interest is bought and sold under cover of the Defendants’ operation.” Id. Robertson seeks an accounting of the interests in real estate, not an invalidation and re-recording of mortgages. Given Robertson’s representations to this court, the defendants would not be liable for $178,962.50 under the False Mortgage Theory.

Finally, in their notice of removal, the defendants comment that the costs incurred by them to provide an accurate index would be substantial. They provide no monetary estimate of these costs, however. But even if the defendants were to calculate this figure, “the costs borne by the defendant in complying with the injunction are irrelevant” because “the value of an injunction for amount in controversy purposes must be measured by what the plaintiff stands to gain.” Morrison v. Allstate Indemnity Co., 228 F.3d 1255, 1268 n.9 (11th Cir. 2000).

To the extent that there is any uncertainty as to the theory of liability in this litigation, “uncertainties are resolved in favor of remand.” Burns v. Windsor Insurance Co., 31 F.3d 1092, 1095 (11th Cir. 1994). The defendants, therefore, have failed to satisfy their burden of establishing the amount in controversy.
* * *
Accordingly, it is the ORDER, JUDGMENT, and DECREE of the court that plaintiff Nancy O. Robertson’s motion to remand (Doc. No. 12) is granted and that, pursuant to 28 U.S.C. § 1447(c), this case is remanded to the Circuit Court of Barbour County, Alabama for want of jurisdiction.

It is further ORDERED that all other pending motions are left for resolution by the state court after remand.

The clerk of the court is DIRECTED to take appropriate steps to effect the remand.

This case is closed.

DONE, this the 2nd day of April, 2012.

/s/ Myron H. Thompson
UNITED STATES DISTRICT JUDGE

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