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.
I hear what she’s saying about googling her name, because I can tell you there were a ton of “Linda Almonte” searches that lead to SFF.
She’s a hero to many.
HuffPO-
When Linda Almonte alerted her boss at JPMorgan Chase about potential fraud in a major deal she was helping to close, she expected him to applaud her great catch.
Instead, he fired her.
“We went down fast,” said Almonte, 41, about her family. She had been making $100,000 a year as a division vice president at Chase, enough to support her stay-at-home husband, their four kids, ages 12 to 22, and rent a three-bedroom house in San Antonio, Texas.
Her move at Chase amounted to “essentially suicide,” Almonte told The Huffington Post. No bank in town would hire her after word spread that she had stood up to the banking giant, she said. After more than a year of fruitless job hunting, Almonte and her family left town, landing at a hotel near Disney World, paying $300 a week for a two-bedroom with a kitchenette.
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.
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.
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.
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.
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.
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.”
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.
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…
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.
PETER B. SKELOS, J.P. L. PRISCILLA HALL LEONARD B. AUSTIN ROBERT J. MILLER, JJ. 2010-11958 (Index No. 2986/06)
[*1]U.S. Bank National Association, etc., respondent,
v
Joseph Dellarmo, also known as Joseph Dell’Armo, appellant, et al., defendants.
Schloss & Schloss, Airmont, N.Y. (Jonathan B. Schloss of counsel), for appellant. Locke Lord, LLP, New York, N.Y. (R. James DeRose III of counsel), for respondent.
DECISION & ORDER
In an action to foreclose a mortgage, the defendant Joseph Dellarmo, also known as, Joseph Dell’Armo, appeals from an order of the Supreme Court, Rockland County (Weiner, J.), entered October 5, 2010, which denied his motion pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against him for lack of standing.
ORDERED that the order is reversed, on the law, with costs, and the motion of the defendant Joseph Dellarmo, also known as Joseph Dell’Armo, to dismiss the complaint insofar as asserted against him is granted.
In commencing this action on April 25, 2006, to foreclose a mortgage entered into by the defendant Joseph Dellarmo, also known as Joseph Dell’Armo (hereinafter Dellarmo), the plaintiff asserted in its complaint that it had been assigned the subject mortgage by assignment dated April 11, 2006, which was duly recorded with the Clerk of Rockland County. Dellarmo failed to answer or appear, but thereafter moved, inter alia, to enjoin the plaintiff from foreclosing on the property on the ground that it lacked standing, and to vacate a default judgment entered against him. On October 30, 2009, while Dellarmo’s motion was pending, a “Corrective Assignment of Mortgage” (hereinafter the corrective assignment) dated July 28, 2009, to the plaintiff was recorded with the Clerk of Rockland County, purporting to “correct and replace the April 11, 2006 assignment . . . which was sent for recording but was lost prior to being recorded” by the Clerk of Rockland County. The corrective assignment was notarized outside New York State but unaccompanied by a CPLR 2309(c) certification. By order dated January 4, 2010, the Supreme Court determined, based on the April 11, 2006, assignment, which the complaint described as having been recorded, and without referencing the corrective assignment, that the plaintiff had standing to commence this action, and directed a hearing to determine the validity of the service of process. Following the hearing, the Supreme Court vacated the default judgment entered against Dellarmo.
Dellarmo moved pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against him, contending, among other things, that the corrective assignment was a nullity, as it had been notarized out-of-state without the required CPLR 2309(c) certification, and, even if the corrective assignment was valid, the plaintiff nevertheless lacked standing to bring this action, as it was not the holder in due course of both the mortgage and note when it commenced the action. The Supreme Court denied the motion, finding that the failure to accompany the corrective assignment with a CPLR 2309(c) certification was not a fatal defect and that Dellarmo raised merely speculative doubts about the validity of the corrective assignment. Dellarmo appeals, and we [*2]reverse.
Here, as the plaintiff concedes, the complaint incorrectly asserts that the April 11, 2006, assignment of the mortgage to the plaintiff had been duly recorded. Further, there is no allegation that the note or mortgage was physically delivered to the plaintiff prior to commencement of the action (compare Mortgage Elec. Registration Sys., Inc. v Coakley, 41 AD3d 674). The record also suggests that in the order dated January 4, 2010, in which the Supreme Court held that the plaintiff had standing pursuant to the April 11, 2006, assignment, the court relied upon the incorrect assertion in the complaint that the April 11, 2006, assignment had been recorded. The Supreme Court referred only to the April 11, 2006, assignment and made no reference to the corrective assignment’s purported replacement of the April 11, 2006, assignment.
The plaintiff now relies on the corrective assignment, which was recorded with the Clerk of Rockland County on October 30, 2009, to demonstrate that it was a holder of the mortgage as of the April 25, 2006, commencement of this action. The corrective assignment recites, in pertinent part, that it “is meant to correct and replace the April 11, 2006 assignment by and between the parties herein which was sent for recording but was lost prior to being recorded” in Rockland County. However, inasmuch as the complaint does not allege that the note was physically delivered to the plaintiff, and nothing in the plaintiff’s submission in opposition to Dellarmo’s motion could support a finding that such physical delivery occurred, the corrective assignment cannot be given retroactive effect (see Countrywide Home Loans, Inc. v Gress, 68 AD3d at 710; Wells Fargo Bank, N.A. v Marchione, 69 AD3d 204, 210; LaSalle Bank Natl. Assn. v Ahearn, 59 AD3d at 912-913). Moreover, both the unrecorded April 11, 2006, assignment and the recorded corrective assignment indicate only that the mortgage was assigned to the plaintiff. Since an assignment of a mortgage without the underlying debt is a nullity (see Deutsche Bank Natl. Trust Co. v Barnett, 88 AD3d 636; Bank of N.Y. v Silverberg, 86 AD3d at 280), the plaintiff has failed to demonstrate that it had standing to commence this action (see Bank of N.Y. v Silverberg, 86 AD3d at 280; U.S. Bank, N.A. v Collymore, 68 AD3d at 754).
Accordingly, the Supreme Court should have granted Dellarmo’s motion pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against him for lack of standing.
In light of the foregoing, we need not reach Dellarmo’s remaining contentions. SKELOS, J.P., HALL, AUSTIN and MILLER, JJ., concur.
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.
U.S. District Judge Mariana Pfaelzer of federal court in Los Angeles is poised to deliver a ruling in AIG’s mortgage-backed securities case against Countrywide that could have an impact on just about every company headquartered in New York. The issue: How long do N.Y. businesses have to bring fraud claims? Are they entitled to the benefit of the state’s generous six-year statute of limitations? Or, as Countrywide argues in a supplemental motion to dismiss filed on March 23, are companies headquartered in New York instead restricted to the generally stingier time limits in their states of incorporation?
To understand how this question arose in AIG’s MBS case, we have to back up a few steps. It’s no secret that in MBS litigation, there’s no more potent defense than arguments that investors waited too long to file suit. It’s a quick, clean way to excise big chunks of a plaintiff’s case, particularly because federal securities claims, with exceptions for American Pipe tolling (if you don’t know, don’t ask), are generally time-barred after three years under the statute of limitations or the more-obscure-until-MBS-litigation statute of repose. That’s why we’ve seen so many MBS plaintiffs — including AIG and the satellite insurance companies that are also plaintiffs in its Countrywide suit — assert state-law fraud claims in addition to federal securities claims.
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.
The mortgage settlement signed by 49 states and every Federal law enforcer allows the rampant foreclosure fraud currently choking our courts to continue unabated. Yes, I realize the pretty language of Exhibit A promises the banks will completely overhaul their standard operating procedures and totally clean up their acts. Promises are empty if they’re not honored, and worthless if not enforceable.
We know Bailed-Out Bankers’ promises are empty, so what matters is if the agreement is enforceable. And when it comes to all things foreclosure fraud, the enforcement provisions are laughable. But before I detail why, let’s be clear: I’m not being hyperbolic. The bankers running and profiting most from our bailed-out banks are totally dishonest when dealing with the public, and their promises are meaningless.
To see their dishonesty in the mortgage context, read the complaint filed in the mortgage deal, or my take on it here. But the bankers don’t limit their lying, cheating and stealing to homeowners. They abuse their clients the same way. Most broadly damaging, the bankers steal from taxpayers on a federal, state and local level and practically everybody else too. Fraud is just how they do business. When dealing with bankers, you can’t do business on a handshake.
Lets not confuse the word “Flaw” with “Fraud”…There is a major difference!
HW-
John Walsh, acting Comptroller of the Currency, said the recent $25 billion mortgage servicing settlement reached between the big banks and state attorneys general does not conflict or double-up on requirements servicers have to follow in consent agreements banks signed with the OCC and other regulators last year.
In 2010, regulators, including the OCC, examined 14 large federally regulated mortgage servicers and thrifts.
Last year, the agencies issued enforcement orders against all 14 institutions forcing them to take steps to review their foreclosure review processes and to offer aid to borrowers who suffered from flawed foreclosure practices.
Fresh off the depo wagon comes her Full Deposition courtesy of 4closurefraud.
Excerpts:
Q It’s employees at Recontrust that stamp the 7 endorsements on the notes in general, including this one; 8 is that right? 9 A Yes. 10 Q And you’ve seen that taking place? 11 A Yes. 12 Q In Simi Valley? 13 A Yes. 14 Q Is there some type of manual or set of 15 instructions? 16 A They have my power of attorney. 17 Q Well, okay. That’s not what I’m asking. But I 18 do want to know about that. But what I’m saying: Is 19 there some sort of manual or instructions or – 20 A If you want to know the desk procedures, you 21 would have to speak with an associate of Recontrust. 22 Q Okay. Okay. Sorry. I’m just reading the notes 23 again. Now, I’m going to try to explain this. I may 24 have to do it a couple of times, but just bear with me. 25 And you’ve been very helpful so far. I appreciate it, 1 there it sat is I guess what I’m asking. 2 A In safekeeping, yes. 3 Q Okay. All right. Now, this is something you 4 touched on a minute ago. I’m going to try to phrase it 5 in a way that makes sense. Who — and let’s just deal 6 with Countrywide in 2007. 7 Who is allowed to be an endorser as you were? I 8 mean, who — let me leave it at that and see if that 9 makes sense to you. 10 A I don’t know what you’re asking. 11 Q What I’m saying is: Are there people other than 12 you at Countrywide in 2007 whose names would appear on a 13 note as an endorsement? 14 A For Countrywide Home Loans, Inc.? 15 Q Yes. 16 A In 2007, I was the endorser for Countrywide Home 17 Loans, Inc. 18 Q Okay. And, I mean, can you explain why you, in 19 particular? I mean, how is that established? 20 A Just lucky. 21 Q I mean, I know this is going to sound silly, but 22 was there some competition for it? Did they come to you 23 and say, “Ms. Sjolander, we choose you?” I mean, how did 24 you come to be designated the person? 25 A It is the position I held within Countrywide. 1 Q Okay. And did you know that going in; you know, 2 if you take this job, you’re going to be the endorser? 3 Was that explained to you at some point? 4 A I knew that my previous boss was the endorser, 5 yes. 6 Q Oh, okay. Now, we covered this, that other 7 people stamped your signature and the other — her name 8 is — oh, it’s Laurie Meder? 9 A Meder. 10 Q Okay. So other people have a stamp with her 11 name and your name on it, and how do those people have 12 the authority to put her name and your name on a note for 13 it to be an effective endorsement? 14 A With my name, they have a power of attorney. 15 Q And what does the power of attorney say? 16 A The power of attorney allows them to place my 17 endorsement stamp on collateral. 18 Q How do they come to have your power of attorney? 19 A I gave that to them. 20 Q But, I mean, in what sort of process? You know, 21 how does someone at Recontrust — I mean, I understand 22 that a power of attorney document exists, I’m assuming; 23 correct? 24 A Yes. 25 Q And how do those people come to operate under 1 it? 2 A It’s common, standard practice. 3 Q I may not be asking it quite right. I guess 4 what I’m asking is: Do they — the people who actually 5 use the stamps — is there more than one, or is there 6 just one stamp? I said “stamps” multiple. Is there only 7 one, or is there – 8 A No, there’s multiple stamps. 9 Q So do these people sign something that says, “I 10 understand I’m under Michele Sjolander’s power of 11 attorney”? 12 A Once again, you would have to look at the desk 13 procedures for Recontrust, and you would have to talk to 14 someone at Recontrust. 15 Q So that’s your understanding that you — did you 16 sign a power of attorney document? 17 A Yes, I did. 18 Q And, I mean, can you explain just in — you 19 know, in general, not word for word what it says, but 20 what does it purport to grant as power of attorney? 21 A It grants Recontrust. They can endorse and 22 assign notes on behalf of myself. 23 Q And do you know if this applies to a select 24 group of people? 25 A I do not have — I would have to read the 1 document. 2 Q Okay. But just to clarify, once again, you 3 don’t actually know the legal mechanism by which these 4 people with the stamps operate under this power of 5 attorney? 6 A As I said, I would have to go back through all 7 of the documentation that surrounds the power of 8 attorney, and Recontrust has desk procedures, and it 9 would be their procedures for them to assign that, to 10 place the stamp on the collateral. 11 Q And this was a procedure in 2007, what we’re 12 talking here is 2007? 13 A Correct. 14 Q And to the present? 15 A No.
<SNIP>
4 Q All of it, okay. Let’s see. Now, you mentioned 5 documents that you had reviewed. The AS-400, that’s a — 6 can you just refresh my memory? What was that again? 7 A A servicing system. 8 Q A servicing system, okay. Now, when you looked 9 over these records and documents before that you 10 mentioned before, where were you when you looked at 11 those? 12 A Simi Valley. 13 Q Simi Valley. And where were the documents that 14 you were looking at? 15 A At that time, they were brought into my office. 16 Q Do you have any idea where they were brought 17 from? 18 A They were printed off the system. 19 Q Printed off the system. 20 A From one of my associates. 21 Q Is that a computer system? 22 A As I said, the collateral tracking is printed 23 off the AS-400, which is our servicing system. The 24 investor number commitment was printed off — it’s a 25 web-based application from secondary marketing. It’s 1 printed off of that. The note was printed off of our 2 imaging system. And I think in this case I asked for a 3 copy of the note showing the endorsements, because in our 4 imaging system it does not — the note is actually imaged 5 prior to my endorsement stamp being in place. So I had 6 my associate contact the bank, which is Recontrust, to 7 get a copy of the original note to show my endorsement 8 stamps, because in imaging it is not shown. 9 Q So if a copy is made of a note that you got from 10 Recontrust, it doesn’t have an endorsement? Is that what 11 you’re saying? 12 A From our bank, it does. In our imaging system, 13 it does not. The note is imaged prior to an 14 endorsement — in ’07, the note is imaged prior to an 15 endorsement being placed on the note. So if you look in 16 our imaging system, you wouldn’t see the chain of title 17 of endorsement. 18 Q And where would you see that? 19 A On the original note. 20 Q Which is — which is where? 21 A In this case, it was in the Fannie Mae vault in 22 Simi Valley, California. 23 Q We’ll come back to the Fannie Mae vault. Okay. 24 So they’re printed off in AS-400 imaging system. 25 A AS-400 and the imaging system are two different systems. 2 Q Oh, you said AS-400 is a servicing software 3 platform of some type? 4 A Yes. 5 Q And the imaging system, what — can you describe 6 that? 7 A It’s a — 8 Q You know — 9 A It’s when all of the collateral documents and 10 credit file documents are imaged after the closing of a 11 loan, and they are put in our imaging system, and we can 12 go into the system by loan number and pull up the 13 documentation of a loan — 14 Q I guess — 15 A — if you have access to the system. 16 Q But imaging, I mean, I’m imagining a scanner of 17 some sort. Is that what it is? 18 A It is not my area. I cannot tell you.
If the top five mortgage servicers begin to abuse bond investors under the foreclosure settlement write-downs, the attorneys general would consider some protections, according to Iowa AG Tom Miller.
Miller faced down banking executives and analysts during a panel at the REthink Symposium Thursday. The $25 billion settlement signed in March forces servicers to meet roughly $10 billion in principal reductions, which could swell higher because in some instances the full dollar written down will not be credited.
Servicers will get full credit for reducing principal on loans they hold on their own portfolio but receive 45 cents for every dollar written down on mortgages held in private securities.
“To try principal reduction in a targeted way and find out if it works is good for the housing market,” Miller said. “We know what (the banks’) plans are. Two have said they wouldn’t do write-downs on private securities. But we could have some discussions about something to reassure investors.”
Update: Pillar Processing is also part of this settlement.
Buffalo Business First-
The case of embattled foreclosure attorney Steven Baum has taken another turn as the Amherst attorney reached a settlement with the New York State Attorney General over charges his firm mishandled foreclosure filings statewide over many years.
Under terms of the agreement, Baum has agreed not to handle mortgages for two years and will pay a penalty of $4 million.
The deal with Attorney General Eric Schneiderman’s office comes five month after the firm settled with the United States Attorney for the Southern District and paid $2 million while agreeing to drastically overhaul its business practices.
Let’s be clear why there’s a mortgage deal: the banks broke the law. Several laws in fact, in ways that appear criminal as well as civil. Limiting their liability is the only reason the banks did a deal.
In this post I’m going to look at what the banks could be held liable for; how much liability “their” money persuaded law enforcers to ignore will be the next post. But one important kind of peace has not been bought: criminal. So as I detail the wrong doing exposed by the deal, I highlight the crimes our law enforcers seem to allege the bankers committed. After all, a liability release isn’t simply what it says, it’s what law enforcers do with their remaining freedom to act. If crimes were committed, and indictments don’t follow, the release is much broader than its text.
A close read of the complaint and the related language that precedes the releases (see Exhibits F and G) reveals:
The consent agreements the bailed-out bankers (B.O.B.s), the feds and the states are largely as had been promised. One big surprise, however, is that the B.O.B.s would now be allowed to systematically overcharge borrowers and steal their homes. Seriously. Who cares about $1 million or $5 million penalties if horrible damage can be inflicted without punishment?
To see what I’m talking about, you need to look at Exhibit E-1. (It’s in all the consent agreements; here’s Chase‘s.) Exhibit E-1 is a 14 page table titled “Servicing Standards Quarterly Compliance Metrics.” That is, it’s a table that details what, precisely, law enforcers will check to make sure that the B.O.B.s are meeting the very pretty servicing standards in the deal. (See Exhibit A)
(Note: You may want to print out table E-1 while reading this, or at least keep it open in another browser window; what I have to say may be hard to believe and you’ll want to be able to double check that I’m telling you the truth.)
Now, the table doesn’t come right out and say, ‘we, the federal and state governments of the United States of America do hereby bless the institutionalization of servicer abuse,’ but it should. To understand why, you need to keep your eye on how the table’s columns are defined. For most issues, the critical columns are C “Loan Level Tolerance for Error” and D “Threshold Error Rate.” Later I’ll talk about the problems in Column F, the “Test Questions.”
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