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]

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]

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]

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]

Via Nick Timiraos

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]

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.,

Scribd

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

Scribd

NEW YORK SUPREME COURT – QUEENS COUNTY

ONEWEST BANK, FSB as successor in
Interest to INDYMAC BANK, FSB
Plaintiff,

-against-

KATHLEEN CUMBERBATCH,
Defendant.

EXCERPT:

A plaintiff establishes that it has standing where it demonstrates that it is both the
holder or assignee of the subject mortgage and the holder or assignee of the underlying note
(see Bank of N.Y. v Silverberg, 86 AD3d 274 [2011]; U.S. Bank, N.A. v Collymore,
68 AD3d 752 [2011]).

The subject mortgage names IndyMac Bank, F.S.B. as the lender,3 and the note is
made payable to IndyMac Bank, F.S.B. and does not bear any endorsement. Plaintiff
OneWest alleged in its complaint, and when seeking the judgment, that it is the “holder” of
the subject mortgage and underlying note. It makes no claim that it is a holder of the subject
mortgage and note based upon the assignment4 offered by defendant Cumberbatch in support
of her motion. Rather, plaintiff OneWest asserts that IndyMac Bank, F.S.B. went into
receivership and the Federal Deposit Insurance Corporation (FDIC), as receiver, transferred
the assets of IndyMac Bank, F.S.B. to IndyMac Federal Bank, FSB on July 11, 2008.

Plaintiff OneWest also asserts that all assets of IndyMac Federal Bank, FSB, including the
subject note, thereafter were sold on March 19, 2009 to OneWest.

Plaintiff OneWest, however, has failed to offer any evidence to demonstrate the
establishment of a FDIC receivership in connection with IndyMac Bank, F.S.B., the note was
part of the assets of such FDIC receivership, or the FDIC, as receiver, transferred such assets
to IndyMac Federal Bank, FSB. Furthermore, the copy of the bill of sale presented by
plaintiff OneWest indicates that the FDIC, as receiver of IndyMac Federal Bank, FSB, sold
only those “Assets,” as defined in a “Servicing Business Asset Purchase Agreement” dated
March 19, 2009, to OneWest. Plaintiff OneWest has not presented evidence of the
establishment of an FDIC receivership in connection with IndyMac Federal Bank, FSB, or
a copy of the March 19, 2009 agreement (or relevant parts thereof), to show the subject note
was one of the assets sold to OneWest. Nor has plaintiff OneWest presented any evidence
that it was in physical possession of the note at the time of the commencement of the action
and the note was endorsed in its favor or in blank (see UCC § 1-201[20] [“ ‘[h]older’ means
a person who is in possession of a document of title or an instrument or an investment
certificated security drawn, issued or indorsed to him or to his order or to bearer or in
blank”]). Under these circumstances, defendant Cumberbatch has presented a possible
meritorious defense based upon lack of standing (see generally Bank of N.Y. v Silverberg,
86 AD3d 274 [2011]; U.S. Bank, N.A. v Adrian Collymore, 68 AD3d 752 [2009]).

[...]

Scribd

Not this word again “Flaw”…it’s FULL   B L O W N   FRAUD!

Why wasn’t this review done prior to any settlement? Because they never began any investigation.

DealBook-

The nation’s biggest banks may have put the huge $25 billion settlement over bad foreclosure practices behind them, but that doesn’t mean their mortgage troubles are over.

A separate review — this time by independent consultants on behalf of the Office of the Comptroller of the Currency — flagged more than 138,000 cases for possible flaws in the foreclosure process at the nation’s largest mortgage servicers. Those include foreclosures involved with the so-called robo-signing scandal, in which bank representatives churned through hundreds of documents a day in foreclosure proceedings without reviewing them for accuracy.

[DEALBOOK]

IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
_________________________
No. 10-14619
__________________________
D.C. Docket No. 1:09-cv-02598-JEC

JONI LEE SHOUP,
on behalf of herself and all others similarly situated,
Plaintiff – Appellant,

versus

MCCURDY & CANDLER, LLC,
Respondent – Appellee.
__________________________
Appeal from the United States District Court
for the Northern District of Georgia

___________________________
(March 30, 2012)

Before DUBINA, Chief Judge, CARNES, Circuit Judge, and FORRESTER,*
District Judge.

*Honorable J. Owen Forrester, United States District Judge for the Northern District of
Georgia, sitting by designation.

PER CURIAM:

Joni Shoup filed a lawsuit against McCurdy & Candler, LLC alleging a
violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692e. The
district court dismissed her complaint for failure to state a claim under Federal
Rule of Civil Procedure 12(b)(6), and Shoup appeals, contending that her
complaint stated a valid claim for statutory damages under the FDCPA because
McCurdy & Candler’s initial communication letter falsely said that its client,
Mortgage Electronic Registration Systems, Inc. (MERS), was Shoup’s “creditor.”

I.

Shoup bought a home in Georgia in 2003. To finance her new home, she
entered into a mortgage contract with America Wholesale Lender. The contract
stated that America Wholesale Lender was the “Lender,” but it also described
MERS as “the grantee under” the mortgage contract and as “a separate corporation
that is acting solely as a nominee for Lender and Lender’s successors and assigns.”
Shoup defaulted on her mortgage, and MERS’ law firm, McCurdy &
Candler, sent Shoup an initial communication letter. That letter was entitled,
“NOTICE PURSUANT TO FAIR DEBT COLLECTION PRACTICES ACT 15
USC 1692,” and stated that its purpose was “an attempt to collect a debt.” The
letter identified MERS as “the creditor on the above referenced loan.” (Emphasis
added.)

Soon after receiving that letter, Shoup filed a complaint against McCurdy &
Candler under the FDCPA. She alleged that MERS is not a “creditor” as defined
in the FDCPA because it did not offer or extend credit to Shoup and she does not
owe MERS a debt. Instead, according to the complaint, MERS is “a company that
tracks, for its clients, the sale of promissory notes and servicing rights.” Shoup,
therefore, alleged that McCurdy & Candler violated the FDCPA by falsely stating
in the initial communication letter that MERS was Shoup’s “creditor.”1
McCurdy & Candler filed a motion to dismiss under Rule 12(b)(6), which
the district court granted. Finding that MERS was a “creditor” under the FDCPA,
the court concluded that Shoup’s complaint did not state a claim for statutory
damages under the FDCPA. The court also concluded that, even if MERS was not
a “creditor,” calling MERS one was harmless. This is Shoup’s appeal.

II.

We review de novo the grant of a motion to dismiss under Rule 12(b)(6) for
failure to state a claim, “accepting the allegations in the complaint as true and
construing them in the light most favorable to the plaintiff.” Belanger v. Salvation
Army, 556 F.3d 1153, 1155 (11th Cir. 2009). “A complaint must state a plausible
claim for relief, and ‘a claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.’” Sinaltraninal v. Coca-Cola Co.,
578 F.3d 1252, 1261 (11th Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662,
129 S.Ct. 1937, 1949 (2009)) (alteration omitted). We also review de novo
matters of statutory interpretation. Belanger, 556 F.3d at 1155.

Under the FDCPA, “[a] debt collector may not use any false, deceptive, or
misleading representation or means in connection with the collection of any debt,”
15 U.S.C. § 1692e, which includes “[t]he use of any false representation or
deceptive means to collect or attempt to collect any debt or to obtain information
concerning a consumer,” id. § 1692e(10). The statute defines “creditor” as “any
person who offers or extends credit creating a debt or to whom a debt is owed, but
such term does not include any person to the extent that he receives an assignment
or transfer of a debt in default solely for the purpose of facilitating collection of
such debt for another.” Id. § 1692a(4). And “[t]he FDCPA provides that ‘any
debt collector who fails to comply with any provision of this subchapter with
respect to any person is liable to such person’ for [actual and statutory] damages
and costs.” Bourff v. Lublin, __ F.3d __, slip op. at 6, No. 10-14618 (11th Cir.
Mar. 15, 2012) (quoting 15 U.S.C. § 1692k(a)).

Our decision in this case is controlled by our recent decision in Bourff. In
that case a law firm sent a letter to the plaintiff in “AN ATTEMPT TO COLLECT
A DEBT.” Id. at __, slip op. at 3 (quotation marks omitted). That letter identified
a loan servicer as “the creditor on the above-referenced loan.” Id. at __, slip op. at
3 (quotation marks omitted). The plaintiff’s complaint alleged that the loan
servicer was not a “creditor” under the FDCPA, id., and that the law firm violated
the FDCPA’s “prohibition on false, deceptive or misleading representations by
falsely stating in its collection notice that [the servicer] was the ‘creditor’ on [the
plaintiff’s] loan,” id. at __, slip op. at 5 (some quotation marks omitted). The
allegation that the loan servicer was not a “creditor” was enough to state a
plausible claim for relief under the FDCPA. Id. at __, slip op. at 6–7.

Here, viewing the allegations in the complaint in the light most favorable to
Shoup, she has alleged that MERS did not offer or extend credit to her and that she
does not owe a debt to MERS. Because the FDCPA defines a “creditor” as “any
person who offers or extends credit creating a debt or to whom a debt is owed,” 15
U.S.C. § 1692a(4), Shoup has alleged that MERS is not a “creditor” under the
FDCPA. Finally, because the complaint alleges that McCurdy & Candler’s initial
communication letter falsely identified MERS as her “creditor,” the complaint
states a plausible claim for relief under the FDCPA. See Bourff, __ F.3d at __,
slip op. at 6–7. And because the FDCPA provides a claim for statutory damages
based on any violation of the statute, see 15 U.S.C. § 1692k(a)(2), McCurdy &
Candler’s alleged violation of the FDCPA is not harmless. See Muha v. Encore
Receivable Mgmt., Inc., 558 F.3d 623, 629 (7th Cir. 2009) (“Were the plaintiffs
seeking actual damages rather than just statutory damages, they would have to
present some evidence that they were misled to their detriment.”); Baker v. G.C.
Servs. Corp., 677 F.2d 775, 780 (9th Cir. 1982) (“The statute clearly specifies the
total damage award as the sum of the separate amounts of actual damages,
statutory damages and attorney fees. There is no indication in the statute that
award of statutory damages must be based on proof of actual damages.”). The
district court erred in dismissing Shoup’s complaint under Rule 12(b)(6).

REVERSED AND REMANDED.

footnote:

1 Shoup also brought her claim on behalf of a putative class and sought class certification.
The district court did not rule on that issue, so it is not before us on appeal.

Scribd

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF RICHMOND

ONEWEST BANK, FSB, as successor in interest to
INDYMAC BANK, FSB,

Plaintiff

against

JOHN A. GALLI,
GEORGANN GALLI, and
“JOHN DOE #1″ through “JOHN DOE #10″,
inclusive the last ten names being fictitious and unknown
to the plaintiff, the persons or parties intended being the persons,
tenants, occupants, or corporations, if any, having or claiming
an interest in or lien upon the mortgaged premises described
in the complaint

Defendants

The plaintiff moves for partial summary judgment dismissing the defendants’ third,
fourth, sixth, seventh, eighth, tenth, eleventh, twelfth, thirteenth, fifteenth and sixteenth
affirmative defenses. In opposition, the defendants cross-move for summary judgment arguing
that the plaintiff lacks standing; lacks capacity to commence and maintain this action; failed to
elect remedies pursuant to RPAPL § 1301; and failed to provide each defendant with the
requisite acceleration notices. The plaintiff’s motion is denied, and the defendants’ motion is
granted.

Facts

This is an action to foreclose real property known as 231 Douglas Road, Staten Island,
New York. On August 26, 2003 John A. Galli and Georgann Galli executed a promissory note
and mortgage in favor of WMC Mortgage Corp. (“WMC”) in the amount of $550,000. The
mortgage contained the following language concerning the business entity known as Mortgage
Electronic Registration Systems, Inc. (“MERS”):

I understand and agree that MERS holds legal title to the rights
granted by me in this Security Instrument, but, if necessary to
comply with law or custom, MERS (as nominee for Lender and
Lender’s successor and assigns) has the right:
(A) to exercise any or all of those rights, including, but not
limited to, the right to foreclose and sell the Property; and
(B) to take any action required of Lender including, but not
limited to, releasing and canceling this Security Instrument.

In addition the Promissory Note submitted in connection with these motions contain an
undated Allonge to Promissory Note stating: “Pay to the Order of INDYMAC BANK, FSB
Without Recourse WASHINGTON MUTUAL BANK”. On October 22, 2004, MERS
purportedly assigned this mortgage as nominee for WMC to Washington Mutual Bank, FA.

On November 16, 2004 the defendants executed a promissory note and mortgage in favor
of Washington Mutual Bank, F.A. in the amount of $457,050.77. Once again, the Promissory
Note submitted for consideration in connection with these motions contains an undated Allonge
to Promissory Note that states “Pay to the Order of IndyMac Bank, FSB Without Recourse
Washington Mutual Bank”. Simultaneously, the defendants executed a Consolidation, Extension
and Modification Agreement (“CEMA”) with Washington Mutual Bank, F.A. on the same day.
Exhibit A of the CEMA lists the 2003 WMC mortgage executed by the defendants as well as the
concurrently executed Washington Mutual Bank, FA mortgage as being consolidated, extended
and modified by this agreement. However, WMC was not a signatory to the November 16, 2004
CEMA.

Two years later on April 5, 2006, MERS as nominee for Washington Mutual Bank, FA
purportedly assigned the 2003 WMC mortgage and the 2004 Washington Mutual Bank, FA
mortgage to Washington Mutual Bank. A second assignment on the same day had Washington
Mutual Bank, F/K/A Washington Mutual Bank, FA purportedly made the following assignments
to MERS as nomminee for Indymac Bank, FSB:

Mortgage dated 08/26/2003 made by John A. Galli and Georgeann
Galli, Husband and Wife to Mortgage Electronic Registration
Systems, Inc. as nominee for WMC Mortgage Corporation in the
principal sum of $550,000.00 and recorded on 01/28/2004, in the
office of the CLERK of the County of RICHMOND, in Book
17109 of Mortgages, page 242.

ASSIGNMENT FROM: Mortgage Electronic Registration
Systems, Inc. as nominee for WMC Mortgage Corporation to
Mortgage Electronic Registration Systems, Inc. as nominee for
Washington Mutual Bank, FA dated 10/22/2004 recorded
6/2/2005.

ASSIGNMENT FROM: Mortgage Electronic Registration
Systems, Inc. As nominee for Washington Mutual Bank FA to
Washington Mutual Bank dated 4/4/2006 to be recorded
concurrently.

2nd Mortgage dated 11/16/2004 recorded 6/2/2005 in document
control 48484 between John A. Galli and Georgeann Galli, aka
Georgeann Galli husband and wife and Washington Mutual Bank,
FA in the amount of $457,050.77

Consolidation, Extension, and Modification Agreement made by
John A. Galli and Georgeann Galli, aka Georeann Galli husband
and wife and Washington mutual Bank, FA dated 11/16/2004
recorded 6/2/2005 in document number 48485 consolidated
mortgages 1 & 2 to form a single lien in the amount of
$1,000,000.00

On April 14, 2006 the defendants executed another Promissory Note and Mortgage this
time in favor of IndyMac Bank, FSB in the amount of $143,595.50. Concurrently with the third
mortgage, the defendants executed a Consolidation, Extension and Modification Agreement in
favor of IndyMac Bank, FSB. Once again, neither WMC, nor Washington Mutual Bank f/k/a
Washington Mutual Bank, FA were signatories to this second CEMA.

According to the affidavit of Brian Burnett, an Assistant Vice President of OneWest
Bank, FSB (“OneWest”) that on or about July 11, 2008, IndyMac Bank, FSB failed and went into
receivership. Upon entering receivership it changed its name to IndyMac Federal Bank, FSB and
on or about March 19, 2009 merged with OneWest. According to Mr. Burnett, OneWest
acquired all of IndyMac’s assets. However, notably absent from the record is a copy of the
purchase and assumption agreement between OneWest and IndyMac.

On or about September 1, 2008 the defendants allegedly defaulted on the notes and
mortgages.

The plaintiff moved for partial summary judgment dismissing the defendants third,
fourth, sixth, seventh, eighth, tenth, twelfth, thirteenth, fifteenth and sixteenth affirmative
defenses. The defendant cross moves to dismiss the plaintiff’s action arguing that the plaintiff:
1) lacks standing; 2) lacks capacity to commence and maintain this action; and 3) failed to elect
remedies pursuant to RPAPL § 1301. In opposition to the defendants’ cross motion, the plaintiff
submits attorney certified copies of the relevant notes and mortgages encumbering 231 Douglas
Road, Staten Island, New York.

Discussion

The court will address the defendants’ cross-motion to dismiss the complaint pursuant to
CPLR § 3211(a). The record in this case shows that MERS assigned the mortgage several times
before the original notes and mortgages found their way to the plaintiff in this action. Here the
court must determine whether the plaintiff in a foreclosure action must establish a clear chain of
title of the relevant notes and mortgages prior to commencing the foreclosure proceeding. This
court concludes that a foreclosing plaintiff must establish how it came to possess the relevant
notes and mortgages it wishes to foreclose.

On June 7, 2011 the Appellate Division, Second Department issued its decision in the
Bank of New York v. Silverberg case.1 In that case the court was called to resolve the issue of,
“. . . whether a party has standing to commence a foreclosure action when that party’s
assignor–in this case, Mortgage Electronic Registration Systems, Inc. . . . was listed as a nominee
and mortgagee for the purposes of recording, but was never the actual holder or assignee of the
underlying notes.”2 The Appellate Division, Second Department held that such a party did not
have standing to commence a foreclosure action.

In a mortgage foreclosure action, a plaintiff must be both the holder or assignee of the
mortgage and the underlying note at the time the action is commenced.3 Here, as was the case in
Silverberg, MERS purportedly transferred the WMC mortgage to Washington Mutual Bank, FA
in connection with a consolidation as nominee. In turn, MERS as the nominee of Washington
Mutual Bank, FA assigned the mortgage to Washington Mutual Bank. Subsequently,
Washington Mutual Bank assigned the mortgages, prior assignments and CEMAs to MERS as
nominee of IndyMac Bank, FSB. The Appellate Division, Second Department found in
Silverberg that “. . . as ‘nominee,’ MERS’s authority was limited to only those powers which
were specifically conferred to it and authorized by the lender.” Here, as was the case in
Silverberg, MERS lacked the authority to assign the underlying notes. Consequently, how the
plaintiff came into possession of the mortgages and notes in this case is suspect.

The plaintiff cites a multitude of cases purportedly holding that possession of the physical
notes establishes its standing to commence this action.4 But each of these cases predate the
Appellate Division, Second Department’s decision in Silverberg. Consequently, this court finds
that the initial transfer between WMC Mortgage and Washington Mutual Bank, F.A. is a nullity
and therefore the plaintiff must establish how it procured the notes and mortgages for 231
Douglas Road, Staten Island, New York.

Given this court’s decision on the cross-motion the plaintiff’s motion for summary
judgment is denied.

Accordingly, it is hereby:

ORDERED, that John A. Galli and Georgann Galli’s cross-motion dismissing the
plaintiff’s complaint is granted and the complaint is dismissed without prejudice; and it is further
ORDERED, that the plaintiff’s motion to foreclose is denied.

ENTER,
DATED: March 23, 2012

Joseph J. Maltese
Justice of the Supreme Court

Scribd

Oregon Live-

With Oregon’s state and federal courts singing a variety of different tunes on the mortgage industry’s controversial nationwide document-registration system, someone has finally asked the state Supreme Court to step in.

If the high court gives the system a thumbs down, it could throw a wrench into thousands of pending foreclosures in Oregon and potentially upend thousands more already completed.

An order filed this week in the U.S. District Court in Portland said that court’s chief judge will certify questions for the Supreme Court. The Supreme Court has to formally accept the questions, and it has the latitude to reject or even reword them.

[OREGON LIVE]

via: Alina

e-discovery is a must. Everything was transmitted electronically. An electronic database where its members “shake hands” to make transfers. Preservation letters must be sent out to the foreclosing entities. Most states have stringent spoliation laws. If evidence is destroyed, it goes against the entity doing the destroying.

Law.Com-

Advanced forensic ability leads to advanced law enforcement capability. That’s not a particularly insightful theorem but, nevertheless, an accurate one.

Probably no forensic realm has seen a more expansive increase in capabilities than the analysis of digital devices, and this reality was brought home in what were certainly the two most prominent trials of 2011 — State of Florida v. Casey Anthony and People of the State of California v. Conrad Murray. In both cases, the timelines generated by digital forensic evidence played significant roles in the prosecutions’ respective attempts to prove guilt.

FORENSIC TIMELINE ANALYSIS …

In the Conrad Murray case, a recording of a cell phone conversation between Michael Jackson and the defendant stored on the latter’s phone was introduced into evidence, which forensic testimony demonstrated occurred six weeks prior to Jackson’s death. Jackson’s obviously slurred and …

[LAW.COM]