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Onewest Bank, FSB v Galli | NYSC “ASMT between WMC & WAMU a nullity and therefore the plaintiff must establish how it procured the notes and mortgages”

Onewest Bank, FSB v Galli | NYSC “ASMT between WMC & WAMU a nullity and therefore the plaintiff must establish how it procured the notes and mortgages”


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

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OneWEST BANK, FSB v. Dorner “CitiMortgage mortgage was defectively executed in that Dorner’s signature was not acknowledged by a notary public”

OneWEST BANK, FSB v. Dorner “CitiMortgage mortgage was defectively executed in that Dorner’s signature was not acknowledged by a notary public”


H/T The Home Equity Theft Reporter

2011 Ohio 4177
164 Ohio Misc.2d 63.

OneWest Bank, FSB,
v.
Dorner et al.

No. CI09-7477

Court of Common Pleas of Ohio, Lucas County.

 DATE: January 7, 2011.

 

Matthew J. Richardson and Robert B. Holman, for plaintiff.Joyce Anagnos, for defendant Toledo Department of Public Utilities.Steven E. Elder, Michelle Polly Murphy, Nicholas D. Donnermeyer, and Andrew P. George for intervening defendant, CitiMortgage, Inc.

 

OPINION AND JUDGMENT ENTRY

McDONALD, Judge.

{¶1} This case is before the court upon the motion for summary judgment as to lien priority filed by plaintiff OneWest Bank, FSB, against intervening defendant CitiMortgage, Inc. Upon consideration of the pleadings, the evidence, the written arguments of counsel, and the applicable law, I find that the motion for summary judgment should be granted.

I

{¶2} Defendant Kevin Dorner is the current owner of real estate located at 2026 N. Michigan Street, Toledo, Lucas County, Ohio (“the property”).

{¶3} On April 5, 2005, Dorner executed a mortgage and note on the property in favor of mortgagee Mortgage Electronic Registration Systems, Inc. (“MERS”). Mortgage Method, L.L.C. was the lender.[1]

{¶4} On February 8, 2007, Dorner executed a mortgage and note on the property in favor of mortgagee MERS. Indymac Bank, FSB was the lender.[2]

{¶5} On October 13, 2009, OneWest filed its complaint for foreclosure on its mortgage and note against Dorner, unknown spouse (if any) of Dorner, and the city of Toledo, Department of Public Utilities (“the city”). The city filed an answer to the complaint.

{¶6} On October 13, 2009, a preliminary judicial report for the property was filed.

{¶7} On October 22, 2009, the notice of filing of the final judicial report for the property was filed.

{¶8} On November 16, 2009, OneWest filed a motion for default judgment against Dorner and his unknown spouse, if any. This motion was granted.

{¶9} On December 18, 2009, CitiMortgage filed a motion to intervene as a party defendant. This motion was granted.

{¶10} On January 13, 2010, CitiMortgage filed an answer, cross-claim, and counterclaim. In its cross-claim and counterclaim, CitiMortgage alleges that Dorner is in default under the note and mortgage filed April 11, 2005, that it declared the debt due, and that it is entitled to have the mortgage foreclosed. CitiMortgage further alleges that OneWest and the city may claim an interest in the property. CitiMortgage prays that its mortgage be adjudged a valid first lien on the property, that its mortgage be foreclosed, that the property be sold, and that CitiMortgage be paid out of the proceeds of the sale. OneWest filed a reply to the counterclaim.

{¶11} An order of sale for the property was issued on March 5, 2010.

{¶12} On March 15, 2010, OneWest filed its motion for summary judgment as to the lien priority between its mortgage and CitiMortgage’s alleged mortgage.

{¶13} On April 20, 2010, CitiMortgage filed its motion to stay the sheriff sale so that the dispute over the priority of liens could be resolved. This motion was granted on May 4, 2010.

{¶14} On August 23, 2010, CitiMortgage filed an opposition to OneWest’s motion for summary judgment. Thereafter, OneWest filed a reply. The motion is now decisional.

II

{¶15} The general rules governing motions for summary judgment filed pursuant to Civ.R. 56 are well established. In Harless v. Willis Day Warehousing Co. (1978), 54 Ohio St.2d 64, 66, the Supreme Court of Ohio stated the requirements that must be met before a motion for summary judgment can be granted:

{¶16} “The appositeness of rendering a summary judgment hinges upon the tripartite demonstration: (1) that there is no genuine issue as to any material fact; (2) that the moving party is entitled to judgment as a matter of law; and (3) that reasonable minds can come to but one conclusion, and that conclusion is adverse to the party against whom the motion for summary judgment is made, who is entitled to have the evidence construed most strongly in his favor.

{¶17} “The burden of showing that no genuine issue exists as to any material fact falls upon the moving party in requesting a summary judgment.”

{¶18} A party who claims to be entitled to summary judgment on the ground that a nonmovant cannot prove its case bears the initial burden of (1) specifically identifying the basis of its motion, and (2) identifying those portions of the record that demonstrate the absence of a genuine issue of material fact regarding an essential element of the nonmovant’s case. Dresher v. Burt (1996), 75 Ohio St.3d 280, 293; see also Dresher, 75 Ohio St.3d at 299 (Pfeifer, J., concurring in judgment only). The movant satisfies this burden by calling attention to some competent summary-judgment evidence, of the type listed in Civ.R. 56, affirmatively demonstrating that the nonmovant has no evidence to support his or her claims. Id. Once the movant has satisfied this initial burden, the burden shifts to the nonmovant to set forth specific facts, in the manner prescribed by Civ.R. 56(E), indicating that a genuine issue of material fact exists for trial. Dresher at 293. Accord Mitseff v. Wheeler (1988), 38 Ohio St.3d 112, 114-115.

{¶19} The Sixth District Court of Appeals has consistently held that summary judgment should be granted with caution in order to protect the nonmoving party’s right to trial. As stated by the court in Viock v. Stowe-Woodward Co. (1983), 13 Ohio App.3d 7, 14-15:

{¶20} “We recognize that summary judgment, pursuant to Civ.R. 56, is a salutary procedure in the administration of justice. It is also, however, a procedure which should be used cautiously and with the utmost care so that a litigant’s right to a trial, wherein the evidentiary portion of the litigant’s case is presented and developed, is not usurped in the presence of conflicting facts and inferences. * * * It is settled law that `[t]he inferences to be drawn from the underlying facts contained in the affidavits and other exhibits must be viewed in the light most favorable to the party opposing the motion, * * *’ which party in the instant case is appellant. * * * It is imperative to remember that the purpose of summary judgment is not to try issues of fact, but rather to determine whether triable issues of fact exist.” (Citations omitted.)

III

{¶21} OneWest contends that it is entitled to summary judgment, as its lien is superior to CitiMortgage’s lien. OneWest argues that CitiMortgage’s alleged mortgage is invalid because it is not notarized. Moreover, OneWest maintains that its knowledge of the defective mortgage is irrelevant. OneWest cites R.C. 5301.01 and 5301.25, as well as numerous cases, including Citizens Natl. Bank v. Denison (1956), 165 Ohio St. 89, and Mtg. Elec. Registration Sys. v. Odita, 159 Ohio App.3d 1, 2004-Ohio-5546.

{¶22} In opposition, CitiMortgage asserts that its mortgage, which properly described the property, was recorded first, and OneWest had actual or constructive notice of the mortgage. CitiMortgage claims that pursuant to R.C. 5301.23, it is entitled to priority because first in time should be first in right, and its mortgage was recorded almost two years before OneWest’s mortgage. CitiMortgage submits that even if there is an error in the acknowledgement clause, this mistake does not void the instrument, as it is subject to reformation pursuant to R.C. 2719.01. CitiMortgage maintains that OneWest would be unjustly enriched if OneWest were allowed to maintain an interest in the property to the exclusion of CitiMortgage.

{¶23} In its reply, OneWest observes that R.C. 5301.23 is not applicable, as it applies to only properly executed mortgages. OneWest agrees with CitiMortgage that first in time means first in right, but OneWest notes that this provision applies to only properly executed mortgages, not defective instruments. OneWest offers that Ohio law is clear that when a notary’s ackowledgement is defective, the instrument is ineffective against subsequent creditors. OneWest maintains that because its mortgage is properly executed, it takes priority over the defective mortgage, which was not entitled to be recorded and is not entitled to reformation.

{¶24} Before the motion for summary judgment is analyzed, it must be noted that the assignment of the mortgage from MERS to OneWest occurred on October 22, 2009, more than a week after OneWest filed its complaint in the present case. The notice of assignment was filed with the court less than one month later. Thus, the notice was sufficient to alert the court, Dorner, and others that OneWest was the real party in interest. See Campus Sweater & Sportswear Co. v. M. B. Kahn Constr. Co. (D.C.S.C.1979), 515 F.Supp. 64, 84-85 (because the assignment took place a year before trial, the defendant was not prejudiced by the assignment, and the assignee was the real party in interest to bring the suit.). Moreover, no party has raised the issue that OneWest is not the real party in interest. See Wachovia Bank, N.A. v. Cipriano, 5th Dist. No. 09CA007, 2009-Ohio-5470, at ¶ 38 (“Pursuant to Civ.R. 17(A), the real party of interest shall `prosecute’ the claim. The rule does not state `file’ the claim”). See also LaSalle Bank Natl. Assn. v. Street, 5th Dist. No. 08 CA 60, 2009-Ohio-1855, at ¶ 28. Accordingly, OneWest, as the real party in interest, has legal standing to bring this foreclosure action.

{¶25} With respect to the motion for summary judgment, OneWest contends that CitiMortgage’s mortgage is defective, yet CitiMortgage maintains that the mortgage should be reformed.

{¶26} R.C. 5301.01 provides:

{¶27} “(A) A deed, mortgage * * * shall be signed by the grantor, mortgagor * * *. The signing shall be acknowledged by the grantor, mortgagor * * * before a judge or clerk of a court of record in this state, or a county auditor, county engineer, notary public, or mayor, who shall certify the acknowledgement and subscribe the official’s name to the certificate of the acknowledgement.”

{¶28} R.C. 5301.23 provides:

{¶29} “(A) All properly executed mortgages shall be recorded in the office of the county recorder of the county in which the mortgaged premises are situated and shall take effect at the time they are delivered to the recorder for record. * * *

{¶30} “(B) A mortgage that is presented for record shall contain the then current mailing address of the mortgagee. The omission of this address or the inclusion of an incorrect address shall not affect the validity of the instrument or render it ineffective for purposes of constructive notice.”

{¶31} In Citizens Natl. Bank v. Denison, 165 Ohio St. at 95, the Ohio Supreme Court held that when the acknowledgment or execution of a deed is defective, the deed is ineffective as against subsequent creditors, but the deed “is valid as between the parties thereto, in the absence of fraud.” Moreover, a defectively executed mortgage is invalid as to a subsequent lienholder, even if the subsequent lienholder had actual knowledge of the prior, defectively executed mortgage. Odita, 159 Ohio App.3d 1, 2004-Ohio-5546, at ¶ 15.

{¶32} R.C. 2719.01 states:

“When there is an omission, defect, or error in an instrument in writing or in a proceeding by reason of the inadvertence of an officer, or of a party, person, or body corporate, so that it is not in strict conformity with the laws of this state, the courts of this state may give full effect to such instrument or proceeding, according to the true, manifest intention of the parties thereto.”

{¶33} Reformation of an instrument is an equitable remedy wherein a court modifies the instrument that, due to mutual mistake on the part of the original parties to the instrument, does not express the real intention of those parties. Greenfield v. Aetna Cas. & Sur. Co. (1944), 75 Ohio App. 122, 128. However, a defectively executed instrument, not acknowledged, cannot be reformed. Delfino v. Paul Davies Chevrolet, Inc. (1965), 2 Ohio St.2d 282, paragraphs two and three of the syllabus (“The curative effect of Section 2719.01, Revised Code, operates to validate instruments in relation to technical defects of content. It does not validate a lease which does not comply with the mandatory requirements of the statute of conveyances (Section 5301.01, Revised Code) as to execution. Where * * * [R.C. 5301.01] requires certain formalities for the execution of an instrument, reformation cannot be granted to supply these formalities”).

{¶34} Applying these principles to the present case, the CitiMortgage mortgage was defectively executed in that Dorner’s signature was not acknowledged by a notary public as required by R.C. 5301.01. Moreover, this defect cannot be cured by reformation. Thus, CitiMortgage’s defectively executed mortgage cannot take priority over a subsequent, valid, recorded mortgage. The record shows that OneWest’s subsequent mortgage was properly executed, valid, and recorded. Accordingly, OneWest’s mortgage is entitled to priority over CitiMortgage’s defective mortgage.

JUDGMENT ENTRY

{¶35} The court finds that there are no genuine issues of material fact and that plaintiff OneWest Bank, FSB is entitled to summary judgment as to lien priority against intervening defendant CitiMortgage, Inc. as a matter of law. It is ordered that plaintiff OneWest Bank, FSB have summary judgment against intervening defendant CitiMortgage, Inc. as to lien priority. It is further ordered that plaintiff OneWest Bank, FSB’s mortgage is entitled to priority over the defective mortgage of intervening defendant CitiMortgage, Inc.

So ordered.

[1] MERS assigned the mortgage to CitiMortgage on December 2, 2009.

[2] On November 16, 2009, OneWest filed a notice of filing of assignment of mortgage from MERS to OneWest. The assignment occurred on October 22, 2009.

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The Law Offices of David J. Stern, P.A. v. OneWest Bank, FSB

The Law Offices of David J. Stern, P.A. v. OneWest Bank, FSB


Case Number: 0:2011cv61005
Filed: May 6, 2011
Court: Florida Southern District Court
Office: Fort Lauderdale Office
Presiding Judge: Judge William J. Zloch
Referring Judge: Magistrate Judge Robin S. Rosenbaum
Nature of Suit: Contract – Other Contract
Cause: 28:1332 Diversity
Jury Demanded By: None
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OUTRAGEOUS |NYSC Judge Suspends 30 Cases From Steven J. Baum PC for Intentional Failure of Improper and Inadequate Submissions

OUTRAGEOUS |NYSC Judge Suspends 30 Cases From Steven J. Baum PC for Intentional Failure of Improper and Inadequate Submissions


What in the world is happening to America? What laws exist that permits this to happen over and over and over …again?

After StopForeclosureFraud posted the Class Action against a Foreclosure Mill in Florida it took the FL AG 4 days to request information from this case that lead to an Investigation.

Then within a matter of days after SFF released information on another Foreclosure Mill in Massachusetts, they too launched one.

SFF has posted numerous court orders involving this firm and nothing has come about the fraud they are submitting and swearing to under oath. Shocking.

Lets set aside that these are FORECLOSURES for a second…T h e s e   a r e   o f f i c e r s   o f   t h e   c o u r t    [PERIOD END OF STORY], intentionally submitting bogus, fraudulent documents even after they were made aware of new filing requirements.

“We cannot allow the courts in New York State to stand by idly and be party to what we now know is a deeply flawed process, especially when that process involves basic human needs–such as a family home–during this period of economic crisis,” said New York State Chief Judge Jonathan Lippman in a statement.

Judge Melvyn Tanenbaum suspends the following cases

Excerpt:

This Court has repeatedly directed plaintiffs counsel to submit proposed orders of reference
and judgments of foreclosure in proper form and counsel has continuously failed to do so. The Court
provided counsel’s office directly with copies of orders and judgments which would satisfy the
requirements and counsel has responded by submitting correspondence addressed to the Court from
non-attorney employees with improper and inadequate submissions. The Court deems plaintiffs
counsel’s actions to be an intentional failure to comply with the directions of the Court and a
dereliction of professional responsibility.
Accordingly it is…

Continue to the Orders All The Way Down…

.

Another 18 reasons why an Investigation should be in order…some of us are keeping track and trust me there is many more!

  1. NY Judge Hammers “Foreclosure Mill” STEVEN J. BAUM For Failing To Comply (25.049)
  2. NYSC LPS FORECLOSURE AFFIDAVIT ‘NO PERSONAL KNOWLEDGE’ & ‘FAILURE IN SUPPORT’
  3. NEW YORK STATE COURT FORECLOSURE FRAUD CASES (14.441)
  4. GMAC, Steven Baum Law Firm Face FORECLOSURE FIGHT in NY COURT (14.273)
  5. Judge ARTHUR SCHACK’s COLASSAL Steven J. BAUM “MiLL” SMACK DOWN!! MERS TWILIGHT ZONE! (14.077)
  6. NY SUPREME COURT: WELLS FARGO, MERS & STEVEN J. BAUM “FATAL DEFECT”
  7. NY BANKRUPTCY COURT In Re: Fagan DECISION GRANTING SANCTIONS FOR MOTION TO LIFT STAY BASED ON FALSE CERTIFICATION
  8. HSBC BANK and STEVEN J. BAUM LAW FIRM both SANCTIONED for filing a FRIVOLOUS lawsuit
  9. “TRO” ISSUED ON MERS, MERRILL & STEVEN J. BAUM
  10. HEY NY TIMES…’NO PROOF’ JEFFREY STEPHAN HAS AUTHORITY TO EXECUTE AFFIDAVIT FOR WELLS FARGO
  11. GMAC, MERS & STEVEN J. BAUM PC…THE COURT IS AT LOSS ON A PURPORTED “CORRECTIVE ASSIGNMENT”
  12. ‘NO PROOF’ MERS assigned BOTH Mortgage and NOTE to HSBC
  13. NY Law Offices of Steven J. Baum P.C. may get sanctions for False Representations
  14. NEW YORK COURT DISMISSES FORECLOSURE WITH PREJUDICE ON ILLEGAL MERS ASSIGNMENT EXECUTED BY COUNSEL FOR THE FORECLOSING PLAINTIFF
  15. Lasalle Bank N.A. v Smith 2010: NY Slip Judge Schack does it again! Slams BAUM Law Firm!
  16. [NYSC] MERS HAS NO INTEREST, STANDING, OFFICER AFFIDAVIT HAS NO PROVATIVE VALUE
  17. [NYBKC] WELLS FARGO ASSIGNMENT, STEVEN J. BAUM P.C. COUNSEL UNABLE TO ANSWER QUESTIONS IN SUPPORT
  18. AMENDED |NEW YORK FORECLOSURE CLASS ACTION AGAINST STEVEN J. BAUM & MERSCORP

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MARYLAND CLASS ACTION: STEWART v. Biermen, Geesing, Ward & Wood Law Firm “BGWW”, Unamed Fidelity National Information Services “FNIS”

MARYLAND CLASS ACTION: STEWART v. Biermen, Geesing, Ward & Wood Law Firm “BGWW”, Unamed Fidelity National Information Services “FNIS”


FIRST CAUSE OF ACTION

Violation of the Fair Debt Collection Practices Act (FDCPA) (15 U.SC. 1692, et seq.)

SECOND CAUSE OF ACTION

Wrongful Foreclosure: Failure to Comply with Maryland Real Property Article, 7-105.1 0r 7.105.2

THIRD CAUSE OF ACTION

Negligence

FOURTH CAUSE OF ACTION

Violation of the Maryland Consumer Protection Act (MCPA) (MD. CODE ANN., COM. LAW., 13-101, ET SED.)

FIFTH CAUSE OF ACTION

Declaratory Judgment (MD. CODE ANN., CTS. & Jud. Proc., 3-406)

SIXTH CAUSE OF ACTION

Respondeat Superior

EXHIBITS

MARYLAND FABRICATED HERRERA SIGNATURES

Exhibit re Notaries Johnson and Mendoza_ DECOMMISSION


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[NYSC] JUDGE SCHACK TAKES ON ROBO-SIGNER ERICA JOHNSON SECK: ONEWEST BANK v. DRAYTON (3)

[NYSC] JUDGE SCHACK TAKES ON ROBO-SIGNER ERICA JOHNSON SECK: ONEWEST BANK v. DRAYTON (3)


STRIKE 1, STRIKE 2,

STRIKE 3…below

.

2010 NY Slip Op 20429

ONEWEST BANK, F.S.B., Plaintiff,
v.
COVAN DRAYTON, ET AL., Defendants.

15183/09.Supreme Court, Kings County.

Decided October 21, 2010.Gerald Roth, Esq., Stein Wiener and Roth, LLP, Carle Place NY, Defendant did not answer Plaintiff.

ARTHUR M. SCHACK, J.

In this foreclosure action, plaintiff ONEWEST BANK, F.S.B. (ONEWEST), moved for an order of reference and related relief for the premises located at 962 Hemlock Street, Brooklyn, New York (Block 4529, Lot 116, County of Kings), upon the default of all defendants. The Kings County Supreme Court Foreclosure Department forwarded the motion papers to me on August 30, 2010. While drafting this decision and order, I received on October 14, 2010, in the midst of the present national media attention about “robo-signers,” an October 13, 2010-letter from plaintiff’s counsel, by which “[i]t is respectfully requested that plaintiff’s application be withdrawn at this time.” There was no explanation or reason given by plaintiff’s counsel for his request to withdraw the motion for an order of reference other than “[i]t is our intention that a new application containing updated information will be re-submitted shortly.”

The Court grants the request of plaintiff’s counsel to withdraw the instant motion for an order of reference. However, to prevent the waste of judicial resources, the instant foreclosure action is dismissed without prejudice, with leave to renew the instant motion for an order of reference within sixty (60) days of this decision and order, by providing the Court with necessary and additional documentation.

First, the Court requires proof of the grant of authority from the original mortgagee, CAMBRIDGE HOME CAPITAL, LLC (CAMBRIDGE), to its nominee, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. (MERS), to assign the subject mortgage and note on March 16, 2009 to INDYMAC FEDERAL BANK, FSB (INDYMAC). INDYMAC subsequently assigned the subject mortgage and note to its successor, ONEWEST, on May 14, 2009.

Second, the Court requires an affidavit from Erica A. Johnson-Seck, a conflicted “robo-signer,” explaining her employment status. A “robo-signer” is a person who quickly signs hundreds or thousands of foreclosure documents in a month, despite swearing that he or she has personally reviewed the mortgage documents and has not done so. Ms. Johnson-Seck, in a July 9, 2010 deposition taken in a Palm Beach County, Florida foreclosure case, admitted that she: is a “robo-signer” who executes about 750 mortgage documents a week, without a notary public present; does not spend more than 30 seconds signing each document; does not read the documents before signing them; and, did not provide me with affidavits about her employment in two prior cases. (See Stephanie Armour, “Mistakes Widespread on Foreclosures, Lawyers Say,” USA Today, Sept. 27, 2010; Ariana Eunjung Cha, “OneWest Bank Employee: Not More Than 30 Seconds’ to Sign Each Foreclosure Document,” Washington Post, Sept. 30, 2010).

In the instant action, Ms. Johnson-Seck claims to be: a Vice President of MERS in the March 16, 2009 MERS to INDYMAC assignment; a Vice President of INDYMAC in the May 14, 2009 INDYMAC to ONEWEST assignment; and, a Vice President of ONEWEST in her June 30, 2009-affidavit of merit. Ms. Johnson-Seck must explain to the Court, in her affidavit: her employment history for the past three years; and, why a conflict of interest does not exist in the instant action with her acting as a Vice President of assignor MERS, a Vice President of assignee/assignor INDYMAC, and a Vice President of assignee/plaintiff ONEWEST. Further, Ms. Johnson-Seck must explain: why she was a Vice President of both assignor MERS and assignee DEUTSCHE BANK in a second case before me, Deutsche Bank v Maraj, 18 Misc 3d 1123 (A) (Sup Ct, Kings County 2008); why she was a Vice President of both assignor MERS and assignee INDYMAC in a third case before me, Indymac Bank, FSB, v Bethley, 22 Misc 3d 1119 (A) (Sup Ct, Kings County 2009); and, why she executed an affidavit of merit as a Vice President of DEUTSCHE BANK in a fourth case before me, Deutsche Bank v Harris (Sup Ct, Kings County, Feb. 5, 2008, Index No. 35549/07).

Third, plaintiff’s counsel must comply with the new Court filing requirement, announced yesterday by Chief Judge Jonathan Lippman, which was promulgated to preserve the integrity of the foreclosure process. Plaintiff’s counsel must submit an affirmation, using the new standard Court form, that he has personally reviewed plaintiff’s documents and records in the instant action and has confirmed the factual accuracy of the court filings and the notarizations in these documents. Counsel is reminded that the new standard Court affirmation form states that “[t]he wrongful filing and prosecution of foreclosure proceedings which are discovered to suffer from these defects may be cause for disciplinary and other sanctions upon participating counsel.”

Background

Defendant COVAN DRAYTON (DRAYTON) executed the subject

mortgage and note on January 12, 2007, borrowing $492,000.00 from CAMBRIDGE. MERS “acting solely as a nominee for Lender [CAMBRIDGE]” and “FOR PURPOSES OF RECORDING THIS MORTGAGE, MERS IS THE MORTGAGEE OF RECORD,” recorded the instant mortgage and note on March 19, 2007, in the Office of the City Register of the City of New York, at City Register File Number (CRFN) XXXXXXXXXXXXX. Plaintiff DRAYTON allegedly defaulted in his mortgage loan payment on September 1, 2008. Then, MERS, as nominee for CAMBRIDGE, assigned the instant nonperforming mortgage and note to INDYMAC, on March 16, 2009. Erica A. Johnson-Seck executed the assignment as a Vice President of MERS, as nominee for CAMBRIDGE. This assignment was recorded in the Office of the City Register of the City of New York, on March 24, 2009, at CRFN XXXXXXXXXXXX. However, as will be discussed below, there is an issue whether MERS, as CAMBRIDGE’s nominee, was authorized by CAMBRIDGE, its principal, to assign the subject DRAYTON mortgage and note to plaintiff INDYMAC. Subsequently, almost two months later, Ms. Johnson-Seck, now as a Vice President of INDYMAC, on May 14, 2009, assigned the subject mortgage and note to ONEWEST. This assignment was recorded in the Office of the City Register of the City of New York, on May 22, 2009, at CRFN XXXXXXXXXXXXX. Plaintiff ONEWEST commenced the instant foreclosure action on June 18, 2009 with the filing of the summons, complaint and notice of pendency. On August 6, 2009, plaintiff ONEWEST filed the instant motion for an order of reference. Attached to plaintiff ONEWEST’s moving papers is an affidavit of merit by Erica A. Johnson-Seck, dated June 30, 2009, in which she claims to be a Vice President of plaintiff ONEWEST. She states, in ¶ 1, that “[t]he facts recited herein are from my own knowledge and from review of the documents and records kept in the ordinary course of business with respect to the servicing of this mortgage.” There are outstanding questions about Ms. Johnson-Seck’s employment, whether she executed sworn documents without a notary public present and whether she actually read and personally reviewed the information in the documents that she executed.

July 9, 2010 deposition of Erica A. Johnson-Seck in the Machado case

On July 9, 2010, nine days after executing the affidavit of merit in the instant action, Ms. Johnson-Seck was deposed in a Florida foreclosure action, Indymac Federal Bank, FSB, v Machado (Fifteenth Circuit Court in and for Palm Beach County, Florida, Case No. 50 2008 CA 037322XXXX MB AW), by defendant Machado’s counsel, Thomas E. Ice, Esq. Ms. Johnson-Seck admitted to being a “robo-signer,” executing sworn documents outside the presence of a notary public, not reading the documents before signing them and not complying with my prior orders in the Maraj and Bethley decisions. Ms. Johnson-Seck admitted in her Machado deposition testimony that she was not employed by INDYMAC on May 14, 2009, the day she assigned the subject mortgage and note to ONEWEST, even though she stated in the May 14, 2009 assignment that she was a Vice President of INDYMAC. According to her testimony she was employed on May 14, 2010 by assignee ONEWEST. The following questions were asked and then answered by Ms. Johnson Seck, at p. 4, line 11-p. 5, line 4:

Q. Could you state your full name for the record, please.

A. Erica Antoinette Johnson-Seck.

Q. And what is your business address?

A. 7700 West Parmer Lane, P-A-R-M-E-R, Building D, Austin, Texas 78729.

Q. And who is your employer?

A. OneWest Bank.

Q. How long have you been employed by OneWest Bank?

A. Since March 19th, 2009.

Q. Prior to that you were employed by IndyMac Federal Bank, FSB?

A. Yes.

Q. And prior to that you were employed by IndyMac Bank, FSB?

A. Yes.

Q. Your title with OneWest Bank is what?

A. Vice president, bankruptcy and foreclosure.

Despite executing, on March 16, 2009, the MERS, as nominee for CAMBRIDGE, assignment to INDYMAC, as Vice President of MERS, she admitted that she is not an officer of MERS. Further, she claimed to have “signing authority” from several major banking institutions and the Federal Deposit Insurance Corporation (FDIC). The following questions were asked and then answered by Ms. Johnson-Seck, at p. 6, lines 5-21:

Q. Are you also an officer of Mortgage Electronic Registration Systems?

A. No.

Q. You have signing authority to sign on behalf of Mortgage Electronic Registration Systems as a vice president, correct?

A. Yes.

Q. Are you an officer of any other corporation?

A. No.

Q. Do you have signing authority for any other corporation?

A. Yes.

Q. What corporations are those?

A. IndyMac Federal Bank, Indymac Bank, FSB, FDIC as receiver for Indymac Bank, FDIC as conservator for Indymac, Deutsche Bank, Bank of New York, U.S. Bank. And that’s all I can think of off the top of my head.

Then, she answered the following question about her “signing authority,” at page 7, lines 3-10:

Q. When you say you have signing authority, is your authority to sign as an officer of those corporations?

A. Some.

Deutsche Bank I have a POA [power of attorney] to sign as attorney-in-fact. Others I sign as an officer. The FDIC I sign as attorney-in-fact. IndyMac Bank and IndyMac Federal Bank I now sign as attorney-in-fact. I only sign as a vice president for OneWest. Ms. Johnson-Seck admitted that she is not an officer of MERS, has no idea how MERS is organized and does not know why she signs assignments as a MERS officer. Further, she admitted that the MERS assignments she executes are prepared by an outside vendor, Lender Processing Services, Inc. (LPS), which ships the documents to her Austin, Texas office from Minnesota. Moreover, she admitted executing MERS assignments without a notary public present. She also testified that after the MERS assignments are notarized they are shipped back to LPS in Minnesota. LPS, in its 2009 Form 10-K, filed with the U.S. Securities and Exchange Commission, states that it is “a provider of integrated technology and services to the mortgage lending industry, with market leading positions in mortgage processing and default management services in the U.S. [p. 1]”; “we offer lenders, servicers and attorneys certain administrative and support services in connection with managing foreclosures [p. 4]”; “[a] significant focus of our marketing efforts is on the top 50 U.S. banks [p. 5]”; and, “our two largest customers, Wells Fargo Bank, N.A. and JP Morgan Chase Bank, N.A., each accounted for more than 10% of our aggregate revenue [p. 5].”LPS is now the subject of a federal criminal investigation related to its foreclosure document preparation. (See Ariana Eunjung Cha. “Lender Processing Services Acknowledges Employees Allowed to Sign for Managers on Foreclosure Paperwork,” Washington Post, Oct. 5, 2010). Last week, on October 13, 2010, the Florida Attorney-General issued to LPS an “Economic Crimes Investigative Subpoena Duces Tecum,” seeking various foreclosure documents prepared by LPS and employment records for various “robo-signers.” The following answers to questions were given by Ms. Johnson-Seck in the Machado deposition, at p. 116, line 4-p. 119, line 16:

Q. Now, given our last exchange, I’m sure you will agree that you are not a vice president of MERS in any sense of the word other than being authorized to sign as one?

A. Yes.

Q. You are not —

A. Sorry.

Q. That’s all right. You are not paid by MERS?

A. No.

Q. You have no job duties as vice president of MERS?

A. No.

Q. You don’t attend any board meetings of MERS?

A. No.

Q. You don’t attend any meetings at all of MERS?

A. No.

Q. You don’t report to the president of MERS?

A. No.

Q. Who is the president of MERS?

A. I have no idea.

Q. You’re not involved in any governance of MERS?

A. No.

Q. The authority you have says that you can be an assistant secretary, right?

A. Yes.

Q. And yet you don’t report to the secretary —

A. No.

Q. — of MERS. You don’t have any MERS’ employees who report to you?

A. No.

Q. You don’t have any vote or say in any corporate decisions of MERS?

A. No.

Q. Do you know where the MERS’ offices are located?

A. No.

Q. Do you know how many offices they have?

A. No.

Q. Do you know where they are headquartered?

A. No.

Q. I take it then you’re never been to their headquarters?

A. No.

Q. Do you know how many employees they have?

A. No.

Q. But you know that you have counterparts all over the country signing as MERS’s vice-presidents and assistant secretaries?

A. Yes.

Q. Some of them are employees of third-party foreclosure service companies, like LPS?

A. Yes.

Q. Why does MERS appoint you as a vice president or assistant secretary as opposed to a manager or an authorized agent to sign in that capacity?

A. I don’t know.

Q. Why does MERS give you any kind of a title?

A. I don’t know.

Q. Take me through the procedure for drafting and — the drafting and execution of this Assignment of Mortgage which is Exhibit E.

A. It is drafted by our forms, uploaded into process management, downloaded by LPS staff in Minnesota, shipped to Austin where we sign and notarize it, and hand it back to an LPS employee, who then ships it back to Minnesota, up uploads a copy and mails the original to the firm.

Q. Very similar to all the other document, preparation of all the other documents.

A. (Nods head.)

Q. Was that a yes? You were shaking your head.

A. Yes.

Q. As with the other documents, you personally don’t review any of the information that’s on here —

A. No.

Q. — other than to make sure that you are authorized to sign as the person you’re signing for?

A. Yes.

Q. Okay. As with the other documents, you signed these and took them to be notarized just to a Notary that’s outside your office?

A. Yes.

Q. And they will get notarized as soon as they can. It may or may not be the same day that you executed it?

A. That’s true. Further, with respect to MERS, Ms. Johnson-Seck testified in answering questions, at p. 138, line 2-p. 139, line 17:

Q. Do you have an understanding that MERS is a membership organization?

A. Yes, yes.

Q. And the members are —

A. Yes.

Q. — banking entities such as OneWest?

A. Yes.

Q. In fact, OneWest is a member of MERS?

A. Yes.

Q. Is Deutsche Bank National Trust Company a member of MERS?

A. I don’t know.

Q. Most of the major banking institutions in the Untied States, at least, are members of MERS, correct?

A. That sounds right.

Q. It’s owned and operated by banking institutions?

A. I’m not a big — I don’t, I don’t know that much about the ins and outs of MERS. I’m sorry. I understand what it’s for, but I don’t understand the nitty-gritty.

Q. What is it for?

A. To track the transfer of doc — of interest from one entity to another. I know that it was initially created so that a servicer did not have to record the assignments, or if they didn’t, there was still a system to keep track of the transfer of property.

Q. Does it also have a function to hold the mortgage separate and apart from the note so that note can be transferred from entity to entity to entity, bank to bank to bank —

A. That sounds right.

Q. — without ever having to rerecord the mortgage?

A. That sounds right.

Q. So it’s a savings device. It makes it more efficient to transfer notes?

A. Yes.

Q. And cheaper?

A. Yes. Moreover,

Ms. Johnson-Seck testified that one of her job duties was to sign documents, which at that time took her about ten minutes per day [p. 11]. Further, she admitted, at p. 13, line 11-p. 14, line 15, that she signs about 750 documents per week and doesn’t read each document.

Q. Okay. How many documents would you say that you sign on a week on average, in a week on average?

A. I could have given you that number if you had that question in there because I would brought the report. However, I’m going to guess, today I saw an e-mail that 1,073 docs are in the office for signing. So if we just — and there’s about that a day. So let’s say 6,000 a week and I do probably — let’s see. There’s eight of us signing documents, so what’s the math?

Q. Six thousand divided by eight, that gives me 750..

A. That sounds, that sounds about right.

Q. Okay. That would be a reasonable estimate of how many you sign, you personally sign per week?

A. Yes.

Q. And that would include Lost Note Affidavits, Affidavits of Debt?

A. Yes.

Q. What other kinds of documents would be included in that?

A. Assignments, declarations. I can sign anything related to a bankruptcy or a foreclosure.

Q. How long do you spend executing each document?

A. I have changed my signature considerably. It’s just an E now.

So not more than 30 seconds.

Q. Is it true that you don’t read each document before you sign it?

A. That’s true. [Emphasis added]

Ms. Johnson-Seck, in the instant action, signed her full name on the March 16, 2009 MERS, as nominee for CAMBRIDGE, assignment to INDYMAC. She switched to the letter E in signing the May 14, 2009 INDYMAC to ONEWEST assignment and the June 30, 2009 affidavit of merit on behalf of ONEWEST. Additionally. she testified about how LPS prepares the documents in Minnesota and ships them to her Austin office, with LPS personnel present in her Austin office [pp. 16-17]. Ms. Johnson-Seck described the document signing process, at p. 17, line 6-p. 18, line 18:

Q. Take me through the procedure for getting your actual signature on the documents once they’ve gone through this quality control process?

A. The documents are delivered to me for signature and I do a quick purview to make sure that I’m not signing for an entity that I cannot sign for. And I sign the document and I hand it to the Notary, who notarizes it, who then hands it back to LPS who uploads the document so that the firms know it’s available and they send an original.

Q. “They” being LPS?

A. Yes.

Q. Are all the documents physically, that you were supposed to sign, are they physically on your desk?

A. Yes.

Q. You don’t go somewhere else to sign documents?

A. No.

Q. When you sign them, there’s no one else in your office?

A. Sometimes.

Q. Well, the Notaries are not in your office, correct?

A. They don’t sit in my office, no.

Q. And the witnesses who, if you need witnesses on the document, are not sitting in your office?

A. That’s right.

Q. So you take your ten minutes and you sign them and then you give them to the supervisor of the Notaries, correct?

A. I supervise the Notaries, so I just give them to a Notary.

Q. You give all, you give the whole group that you just signed to one Notary?

A. Yes. [Emphasis added]

Ms. Johnson-Seck testified, at p. 20, line 1-p. 21, line 4 about notaries not witnessing her signature:

Q. I’m mostly interested in how long it takes for the Notary to notarize your signature.

A. I can’t say categorically because the Notary, that’s not the only job they do, so.

Q. In any event, it doesn’t have to be the same day?

A. No.

Q. When they notarize it and they put a date that they’re notarizing it, is it the date that you signed it or is it the date that they’re notarizing it?

A. I don’t know.

Q. When you execute a sworn document, do you make any kind of a verbal acknowledgment or oath to anyone?

A. I don’t know if I know what you’re talking about. What’s a sworn document?

Q. Well, an affidavit.

A. Oh. No.

Q. In any event, there’s no Notary in the room for you to

A. Right.

Q. — take an oath with you, correct?

A. No there is not.

Q. In fact, the Notaries can’t see you sign the documents; is that correct?

A. Not unless that made it their business to do so?

Q. To peek into your office?

A. Yes. [Emphasis added]

As noted above, I found Ms. Johnson-Seck engaged in “robo-signing” in Deutsche Bank v Maraj and Indymac Bank, FSB, v Bethley. In both foreclosure cases I denied plaintiffs’ motions for orders of reference without prejudice with leave to renew if, among other things, Ms. Johnson-Seck could explain in affidavits: her employment history for the past three years; why she was a Vice President of both assignor MERS and assignee Deutsche Bank National Trust Company in Maraj; and, Vice President of INDYMAC in Bethley. Mr. Ice questioned Ms. Johnson-Seck about my MarajMaraj decision as exhibit M in the Machado deposition. The following colloquy at the Maraj deposition took place at p. 153, line 15-p. 156, line 9. decision and showed her the

Q. Exhibit M is a document that you saw before in your last deposition, correct?

A. Yes.

Q. It’s an opinion from Judge Schack up in New York —

A. Yes.

Q. — correct? You’re familiar with that?

A. Yes.

Q. In it, he says that you signed an Assignment of Mortgage as the vice president of MERS, correct —

A. Yes.

Q. — just as you did in this case? Judge Schack also says that you executed an affidavit as an officer of Deutsche Bank National Trust Company, correct?

A. Yes.

Q. And is that true, you executed an affidavit for Deutsche Bank in that case?

A. That is not true.

Q. You never executed a document as an officer of Deutsche Bank National Trust Company in that case, Judge Schack’s case?

A. Let me just read it so I can — I have to refresh my memory completely.

Q. Okay.

A. I don’t remember. Most likely.

Q. That you did?

A. It sounds reasonable that I may have. I don’t remember, and since it’s not attached, I can’t say.

Q. And as a result, Judge Schack wanted to know if you were engaged in self-dealing by wearing two corporate hats?

A. Yes.

Q. And the court was concerned that there may be fraud on the part of the bank?

A. I guess.

Q. I mean he said that, right?

A. Oh, okay. I didn’t read the whole thing. Okay.

Q. Okay. The court ordered Deutsche Bank to produce an affidavit from you describing your employment history for the past three years, correct?

A. That’s what this says.

Q. Did you do that?

A. No, because we were never — no affidavit ever existed and no request ever came to produce such a document. The last time we spoke, I told you that in-house counsel was reviewing the whole issue and that’s kind of where — and we still haven’t received any communication to produce an affidavit.

Q. From your counsel?

A. From anywhere.

Q. Well, you’re reading Judge Schack’s opinion. He seems to want one. Isn’t that pretty clear on its face.

A. We didn’t get — we never even got a copy of this.

Q. Okay. But now you have it —

A. And —

Q. And you had it when we met at our deposition back in February 5th.

A. And our in-house counsel’s response to this is we were never — this was never requested of me and it was his recommendation not to comply.

Q. What has become of that case?

A. I don’t know.

Q. Was it settled?

A. I don’t know. After a break in the Machado deposition proceedings, Mr. Ice questioned Ms. Johnson-Seck about various documents that were subpoenaed for the July 9, 2010 deposition, including her employment affidavits that I required in both Maraj and Bethley. Ms. Johnson-Seck answered the following questions at p. 159, line 19-p. 161, line 9:

Q. So let’s start with the duces tecum part of you notice, which is the list of documents. No. 1 was: The affidavit of the last three years of deponent’s employment provided to Judge Schack in response to the order dated January 31st, 2008 in the case of Deutsche Bank National Trust Company vs. Maraj, Case No. 25981-07, Supreme Court of New York. We talked about that earlier. There is no such affidavit, correct?

A. Correct.

Q. By the way, why was IndyMac permitted to bring the case in Deutsche Bank’s name in that case?

A. I don’t — I don’t know. Now, errors have been made.

Q. No. 2: The affidavit of the deponent provided to Judge Schack in response to the order dated February 6th, 2009 in the case of IndyMac Bank, FSB vs, Bethley, New York Slip Opinion 50186, New York Supreme Court 2/5/09, “explaining,” and this is in quotes, “her employment history for the past three years; and, why a conflict of interest does not exist in how she acted as vice president of assignee IndyMac Bank, FSB in the instant action, and vice president of both Mortgage Electronic Registrations Systems, Inc. and Deutsche Bank in Deutsche Bank vs. Maraj,” and it gives the citation and that’s the case referred to in item 1 of our request. Do you have that affidavit with you here today?

A. No.

Q. Were you aware of that second opinion where Judge Schack asks for a second affidavit?

A. Nope. Where is Judge Schack sending these?

Q. Presumably to your counsel.

A. I wonder if he has the right address. Maybe that’s what we should do, send Judge Schack the most recent, and I will gladly show up in his court and provide him everything he wants.

Q. Okay. Well, I sent you this back in March. Have your or your counsel or in-house counsel at IndyMac pursued that?

A. No. [Emphasis added] Counsel for plaintiff ONEWEST has leave to produce Ms. Johnson-Seck in my courtroom to “gladly show up . . . and provide [me] . . . everything he wants.”

Discussion

Real Property Actions and Proceedings Law (RPAPL) § 1321 allows the Court in a foreclosure action, upon the default of the defendant or defendant’s admission of mortgage payment arrears, to appoint a referee “to compute the amount due to the plaintiff.” In the instant action, plaintiff ONEWEST’s application for an order of reference is a preliminary step to obtaining a default judgment of foreclosure and sale against defendant DRAYTON. (Home Sav. of Am., F.A. v Gkanios, 230 AD2d 770 [2d Dept 1996]). Plaintiff’s request to withdraw its application for an order of reference is granted. However, to allow this action to continue without seeking the ultimate purpose of a foreclosure action, to obtain a judgment of foreclosure and sale, makes a mockery of and wastes the resources of the judicial system. Continuing the instant action without moving for an order of reference is the judicial equivalent of a “timeout.” Granting a “timeout” to plaintiff ONEWEST to allow it to re-submit “a new application containing new information . . . shortly” is a waste of judicial resources. Therefore, the instant action is dismissed without prejudice, with leave granted to plaintiff ONEWEST to renew its motion for an order of reference within sixty (60) days of this decision and order, if plaintiff ONEWEST and plaintiff ONEWEST’s counsel can satisfactorily address the various issues previously enumerated. Further, the dismissal of the instant foreclosure action requires the cancellation of the notice of pendency. CPLR § 6501 provides that the filing of a notice of pendency against a property is to give constructive notice to any purchaser of real property or encumbrancer against real property of an action that “would affect the title to, or the possession, use or enjoyment of real property, except in a summary proceeding brought to recover the possession of real property.” The Court of Appeals, in 5308 Realty Corp. v O & Y Equity Corp. (64 NY2d 313, 319 [1984]), commented that “[t]he purpose of the doctrine was to assure that a court retained its ability to effect justice by preserving its power over the property, regardless of whether a purchaser had any notice of the pending suit,” and, at 320, that “the statutory scheme permits a party to effectively retard the alienability of real property without any prior judicial review.” CPLR § 6514 (a) provides for the mandatory cancellation of a notice of pendency by:

The Court, upon motion of any person aggrieved and upon such notice as it may require, shall direct any county clerk to cancel a notice of pendency, if service of a summons has not been completed within the time limited by section 6512; or if the action has been settled, discontinued or abated; or if the time to appeal from a final judgment against the plaintiff has expired; or if enforcement of a final judgment against the plaintiff has not been stayed pursuant to section 551. [emphasis added] The plain meaning of the word “abated,” as used in CPLR § 6514 (a) is the ending of an action. “Abatement” is defined as “the act of eliminating or nullifying.” (Black’s Law Dictionary 3 [7th ed 1999]). “An action which has been abated is dead, and any further enforcement of the cause of action requires the bringing of a new action, provided that a cause of action remains (2A Carmody-Wait 2d § 11.1).” (Nastasi v Nastasi, 26 AD3d 32, 40 [2d Dept 2005]). Further, Nastasi at 36, held that the “[c]ancellation of a notice of pendency can be granted in the exercise of the inherent power of the court where its filing fails to comply with CPLR § 6501 (see 5303 Realty Corp. v O & Y Equity Corp., supra at 320-321; Rose v Montt Assets, 250 AD2d 451, 451-452 [1d Dept 1998]; Siegel, NY Prac § 336 [4th ed]).” Thus, the dismissal of the instant complaint must result in the mandatory cancellation of plaintiff ONEWEST’s notice of pendency against the subject property “in the exercise of the inherent power of the court.”

Moreover, “[t]o have a proper assignment of a mortgage by an authorized agent, a power of attorney is necessary to demonstrate how the agent is vested with the authority to assign the mortgage.” (HSBC Bank, USA v Yeasmin, 27 Misc 3d 1227 [A], *3 [Sup Ct, Kings County 2010]). “No special form or language is necessary to effect an assignment as long as the language shows the intention of the owner of a right to transfer it [Emphasis added].” (Tawil v Finkelstein Bruckman Wohl Most & Rothman, 223 AD2d 52, 55 [1d Dept 1996]). (See Suraleb, Inc. v International Trade Club, Inc., 13 AD3d 612 [2d Dept 2004]). MERS, as described above, recorded the subject mortgage as “nominee” for CAMBRIDGE. The word “nominee” is defined as “[a] person designated to act in place of another, usu. in a very limited way” or “[a] party who holds bare legal title for the benefit of others.” (Black’s Law Dictionary 1076 [8th ed 2004]). “This definition suggests that a nominee possesses few or no legally enforceable rights beyond those of a principal whom the nominee serves.” (Landmark National Bank v Kesler, 289 Kan 528, 538 [2009]). The Supreme Court of Kansas, in Landmark National Bank, 289 Kan at 539, observed that: The legal status of a nominee, then, depends on the context of the relationship of the nominee to its principal. Various courts have interpreted the relationship of MERS and the lender as an agency relationship. See In re Sheridan, 2009 WL631355, at *4 (Bankr. D. Idaho, March 12, 2009) (MERS “acts not on its own account. Its capacity is representative.”); Mortgage Elec. Registrations Systems, Inc. v Southwest,La Salle Nat. Bank v Lamy, 12 Misc 3d 1191 [A], at *2 [Sup Ct, Suffolk County 2006]) . . . (“A nominee of the owner of a note and mortgage may not effectively assign the note and mortgage to another for want of an ownership interest in said note and mortgage by the nominee.”) The New York Court of Appeals in MERSCORP, Inc. v Romaine (8 NY3d 90 [2006]), explained how MERS acts as the agent of mortgagees, holding at 96: In 1993, the MERS system was created by several large participants in the real estate mortgage industry to track ownership interests in residential mortgages. Mortgage lenders and other entities, known as MERS members, subscribe to the MERS system and pay annual fees for the electronic processing and tracking of ownership and transfers of mortgages. Members contractually agree to appoint MERS to act as their common agent on all mortgages they register in the MERS system. [Emphasis added] 2009 Ark. 152 ___, ___SW3d___, 2009 WL 723182 (March 19, 2009) (“MERS, by the terms of the deed of trust, and its own stated purposes, was the lender’s agent”);

Thus, it is clear that MERS’s relationship with its member lenders is that of agent with principal. This is a fiduciary relationship, resulting from the manifestation of consent by one person to another, allowing the other to act on his behalf, subject to his control and consent. The principal is the one for whom action is to be taken, and the agent is the one who acts.It has been held that the agent, who has a fiduciary relationship with the principal, “is a party who acts on behalf of the principal with the latter’s express, implied, or apparent authority.” (Maurillo v Park Slope U-Haul, 194 AD2d 142, 146 [2d Dept 1992]). “Agents are bound at all times to exercise the utmost good faith toward their principals. They must act in accordance with the highest and truest principles of morality.” (Elco Shoe Mfrs. v Sisk, 260 NY 100, 103 [1932]). (See Sokoloff v Harriman Estates Development Corp., 96 NY 409 [2001]); Wechsler v Bowman, 285 NY 284 [1941]; Lamdin v Broadway Surface Advertising Corp., 272 NY 133 [1936]). An agent “is prohibited from acting in any manner inconsistent with his agency or trust and is at all times bound to exercise the utmost good faith and loyalty in the performance of his duties.” (Lamdin, at 136). Therefore, in the instant action, MERS, as nominee for CAMBRIDGE, is an agent of CAMBRIDGE for limited purposes. It can only have those powers given to it and authorized by its principal, CAMBRIDGE. Plaintiff ONEWEST has not submitted any documents demonstrating how CAMBRIDGE authorized MERS, as nominee for CAMBRIDGE, to assign the subject DRAYTON mortgage and note to INDYMAC, which subsequently assigned the subject mortgage and note to plaintiff ONEWEST. Recently, in Bank of New York v Alderazi,Lippincott v East River Mill & Lumber Co., 79 Misc 559 [1913]) and “[t]he declarations of an alleged agent may not be shown for the purpose of proving the fact of agency.” (Lexow & Jenkins, P.C. v Hertz Commercial Leasing Corp., 122 AD2d 25 [2d Dept 1986]; see also Siegel v Kentucky Fried Chicken of Long Is. 108 AD2d 218 [2d Dept 1985]; Moore v Leaseway Transp/ Corp., 65 AD2d 697 [1st Dept 1978].) “[T]he acts of a person assuming to be the representative of another are not competent to prove the agency in the absence of evidence tending to show the principal’s knowledge of such acts or assent to them.” (Lexow & Jenkins, P.C. v Hertz Commercial Leasing Corp., 122 AD2d at 26, quoting 2 NY Jur 2d, Agency and Independent Contractors § 26). Plaintiff has submitted no evidence to demonstrate that the original lender, the mortgagee America’s Wholesale Lender, authorized MERS to assign the secured debt to plaintiff. Therefore, in the instant action, plaintiff ONEWEST failed to demonstrate how MERS, as nominee for CAMBRIDGE, had authority from CAMBRIDGE to assign the DRAYTON mortgage to INDYMAC. The Court grants plaintiff ONEWEST leave to renew its motion for an order of reference, if plaintiff ONEWEST can demonstrate how MERS had authority from CAMBRIDGE to assign the DRAYTON mortgage and note to INDYMAC. Then, plaintiff ONEWEST must address the tangled employment situation of “robo-signer” Erica A. Johnson-Seck. She admitted in her July 9, 2010 deposition in the Machado case that she never provided me with affidavits of her employment for the prior three years and an explanation of why she wore so-many corporate hats in Maraj and Bethley. Further, in Deutsche Bank v Harris, Ms. Johnson-Seck executed an affidavit of merit as Vice President of Deutsche Bank. If plaintiff renews its motion for an order of reference, the Court must get to the bottom of Ms. Johnson-Seck’s employment status and her “robo-signing.” The Court reminds plaintiff ONEWEST’s counsel that Ms. Johnson-Seck, at p. 161 of the Machado deposition, volunteered, at lines 4-5 to “gladly show up in his court and provide him everything he wants.” Lastly, if plaintiff ONEWEST’S counsel moves to renew its application for an order of reference, plaintiff’s counsel must comply with the new filing requirement to submit, under penalties of perjury, an affirmation that he has taken reasonable steps, including inquiring of plaintiff ONEWEST, the lender, and reviewing all papers, to verify the accuracy of the submitted documents in support of the instant foreclosure action. According to yesterday’s Office of Court Administration press release, Chief Judge Lippman said: We cannot allow the courts in New York State to stand by idly and be party to what we now know is a deeply flawed process, especially when that process involves basic human needs — such as a family home — during this period of economic crisis. This new filing requirement will play a vital role in ensuring that the documents judges rely on will be thoroughly examined, accurate, and error-free before any judge is asked to take the drastic step of foreclosure. 28 Misc 3d at 379-380, my learned colleague, Kings County Supreme Court Justice Wayne Saitta explained that: A party who claims to be the agent of another bears the burden of proving the agency relationship by a preponderance of the evidence (

(See Gretchen Morgenson and Andrew Martin, Big Legal Clash on Foreclosure is Taking Shape, New York Times, Oct. 21, 2010; Andrew Keshner, New Court Rules Says Attorneys Must Verify Foreclosure Papers, NYLJ, Oct. 21, 2010).

Conclusion

Accordingly, it is

ORDERED, that the request of plaintiff ONEWEST BANK, F.S.B., to withdraw its motion for an order of reference, for the premises located at 962 Hemlock Street, Brooklyn, New York (Block 4529, Lot 116, County of Kings), is granted; and it is further

ORDERED, that the instant action, Index Number 15183/09, is dismissed without prejudice; and it is further

ORDERED, that the notice of pendency in the instant action, filed with the Kings County Clerk on June 18, 2009, by plaintiff ONEWEST BANK, F.S.B., to foreclose a mortgage for real property located at 962 Hemlock Street, Brooklyn, New York (Block 4529, Lot 116, County of Kings), is cancelled; and it is further

ORDERED, that leave is granted to plaintiff, ONEWEST BANK, F.S.B., to renew, within sixty (60) days of this decision and order, its motion for an order of reference for the premises located at 962 Hemlock Street, Brooklyn, New York (Block 4529, Lot 116, County of Kings), provided that plaintiff, ONEWEST BANK, F.S.B., submits to the Court: (1) proof of the grant of authority from the original mortgagee, CAMBRIDGE CAPITAL, LLC, to its nominee, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., to assign the subject mortgage and note to INDYMAC FEDERAL BANK, FSB; and (2) an affidavit by Erica A. Johnson-Seck, Vice President of plaintiff ONEWEST BANK, F.S.B., explaining: her employment history for the past three years; why a conflict of interest does not exist in how she acted as a Vice President of assignor MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., a Vice President of assignee/assignor INDYMAC FEDERAL BANK, FSB, and a Vice President of assignee/plaintiff ONEWEST BANK, F.S.B. in this action; why she was a Vice President of both assignor MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. and assignee DEUTSCHE BANK in Deutsche Bank v Maraj, 18 Misc 3d 1123 (A) (Sup Ct, Kings County 2008); why she was a Vice President of both assignor MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. and assignee INDYMAC BANK, FSB in Indymac Bank, FSB, v Bethley, 22 Misc 3d 1119 (A) (Sup Ct, Kings County 2009); and, why she executed an affidavit of merit as a Vice President of DEUTSCHE BANK in Deutsche Bank v Harris (Sup Ct, Kings County, Feb. 5, 2008, Index No. 35549/07); and (3) counsel for plaintiff ONEWEST BANK, F.S.B. must comply with the new Court filing requirement, announced by Chief Judge Jonathan Lippman on October 20, 2010, by submitting an affirmation, using the new standard Court form, pursuant to CPLR Rule 2106 and under the penalties of perjury, that counsel for plaintiff ONEWEST BANK, F.S.B. has personally reviewed plaintiff ONEWEST BANK, F.S.B.’s documents and records in the instant action and counsel for plaintiff ONEWEST BANK, F.S.B. confirms the factual accuracy of plaintiff ONEWEST BANK, F.S.B.’s court filings and the accuracy of the notarizations in plaintiff ONEWEST BANK, F.S.B.’s documents.

This constitutes the Decision and Order of the Court.

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OneWest’s Servicer Rating May Be Downgraded on Foreclosures

OneWest’s Servicer Rating May Be Downgraded on Foreclosures


October 28, 2010, 7:50 PM EDT

By Dakin Campbell

Oct. 28 (Bloomberg) — OneWest Bank, formed in the aftermath of IndyMac Bancorp’s failure, may have its mortgage- servicing ratings downgraded by Moody’s Investors Service, which cited “potential irregularities” in the foreclosure process.

The ratings of IndyMac Mortgage Services, a division of OneWest, may be downgraded if faulty foreclosures increase the time it takes to sell bank-owned homes or boost legal costs, Moody’s said today in a statement. OneWest is resubmitting affidavits in certain cases after a review, Moody’s said.

“Employees signing affidavits may not have had full personal knowledge of every item in the affidavit,” Linda Stesney and Cecilia Lam, analysts at New York-based Moody’s, said in the statement. “Notaries may not always have been physically present at the time of signing.”

Court documents surfaced this year showing employees of the largest U.S. lenders signed paperwork without ensuring accuracy. Attorneys general in all 50 states started a probe into those practices and Bank of America Corp., JPMorgan Chase & Co. and Ally Financial Inc. suspended some foreclosure sales or evictions, pending reviews.

Moody’s assigns a rating of SQ3, or average, to IndyMac as a primary servicer of prime home loans, and SQ3- as a primary servicer of subprime home loans or as a special servicer, or overseer of distressed debt.

IndyMac had a servicing portfolio of more than 565,000 loans with an unpaid balance of $133.5 billion at the end of June, Moody’s said. The company is the ninth-largest U.S. home- loan servicer, according to Barclays Capital Inc

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INDYMAC, ONEWEST DENIED|’Lost Assignment’ ‘Break In Chain of Title’

INDYMAC, ONEWEST DENIED|’Lost Assignment’ ‘Break In Chain of Title’


YOU AIN’T FOOLING THIS JUDGE! Dated 8/18/2010

Lets see how they produce the assignment from 2005!  We bet we already know!

Plaintiff subsequently purchased the aforementioned mortgage and note from Defendant. However, an Assignment of Mortgage from Defendant to Plaintiff has been lost and was never recorded. Plaintiff, as the current holder of the note, desires to foreclose on the subject mortgage.

However, Plaintiff cannot do so because of the break in chain of title.

the Clerk of the County of Suffolk be directed to record an Order reflecting the assignment of mortgage as Lancaster Mortgage Bankers as original assignor to Indymac Bank, FSB, as the assignee with an effective date-of December 20,2005. The Plaintiff interests originates from a mortgage from Hem-Ur Nekhet to Lancaster Mortgage Bankers, in the principal amount of $608,000.00, dated December 20,2005 and recorded on February 9,2006 in CRFN: 2006000079624. Plaintiff subsequently purchased the aforementioned mortgage and note from Defendant.

She goes on and hand writes the following:

Insufficient proof of ownership of mortgage to make up for lost assignment of mortgage, service was pursuant to BCC 306 on a corporation that is alleged to no longer be in operation and the proposed judgment says that the summons & complaint were filed in Suffolk County

[ipaper docId=36737497 access_key=key-gruibe35ftph4mqwn8f height=600 width=600 /]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in chain in title, concealment, conflict of interest, conspiracy, CONTROL FRAUD, corruption, foreclosure, foreclosure fraud, foreclosures, indymac, onewest, STOP FORECLOSURE FRAUDComments (0)

FDIC launches Lawsuit to Four former Indymac Executives

FDIC launches Lawsuit to Four former Indymac Executives


FDIC sues four former IndyMac executives

The agency accuses the managers of the defunct bank’s Homebuilder Division of acting negligently by granting loans to developers who were unlikely to repay the debts.

By E. Scott Reckard, Los Angeles Times
July 14, 2010

Launching a new offensive against leaders of failed financial institutions, federal regulators are accusing four former executives of Pasadena’s defunct IndyMac Bank of granting loans to developers and home builders who were unlikely to repay the debts.

The lawsuit by the Federal Deposit Insurance Corp. alleges that the IndyMac executives acted negligently and seeks $300 million in damages.

It is the first suit of its kind brought by the FDIC in connection with the spate of more than 250 bank failures that began in 2008. Regulators said it wouldn’t be the last.

“Clearly we’ll have more of these cases,” said Rick Osterman, the deputy general counsel who oversees litigation at the agency.

The FDIC has sent letters warning hundreds of top managers and directors at failed banks — and the insurers who provided them with liability coverage — of possible civil lawsuits, Osterman said. The letters go out early in investigations of failed banks, he added, to ensure that the insurers will later provide coverage even if the policy expires.

The four defendants in the FDIC lending negligence case, who operated the Homebuilder Division at IndyMac, collectively approved 64 loans that are described in the 309-page lawsuit.

They are:

•Scott Van Dellen, the division’s president and chief executive during six years ending in its seizure;

•Richard Koon, its chief lending officer for five years ending in July 2006;

•Kenneth Shellem, its chief credit officer for five years ending in November 2006;

•William Rothman, its chief lending officer during the two years before the seizure.

Through their attorneys, they vigorously denied the allegations.

“The FDIC has unfairly selected four hard-working executives of a small division of the bank … to blame for the failure of IndyMac,” said defense attorney Kirby Behre, who represents Shellem and Koon. “We intend to show that these loans were done at all times with a great deal of care and prudence.”

Defense attorney Michael Fitzgerald, who represents Van Dellen and Rothman, said no one at the company or its regulators foresaw the severity of the housing crash before it struck, and that IndyMac was one of the first construction lenders to pull back when trouble struck the industry in 2007.

Fitzgerald added that the FDIC thought Van Dellen trustworthy enough that it kept him on to run the division after the bank was seized.

The suit naming the IndyMac executives was filed this month in federal court in Los Angeles, two years after the July 2008 failure of the Pasadena savings and loan. The bank is now operated under new ownership as OneWest Bank.

IndyMac, principally a maker of adjustable-rate mortgages, was among a series of high-profile bank failures early in the financial crisis that were blamed on defaults on high-risk home loans and the securities linked to them.

But the majority of failures since then have been at banks hammered by losses on commercial real estate, particularly loans to residential developers and builders — and IndyMac had a sideline in that business as well through its Homebuilder Division.

The suit alleges that IndyMac’s compensation policies prompted the home-building division to increase lending to developers and builders with little regard for the quality of the loans.

“HBD’s management pushed to grow loan production despite their awareness that a significant downturn in the market was imminent and despite warnings from IndyMac’s upper management about the likelihood of a market decline,” the FDIC said in its complaint.

An investigation of IndyMac’s residential mortgage lending practices could lead to another civil suit, potentially naming higher-up executives, attorneys involved in the case said.

Continue reading… LA TIMES

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A ‘Little Judge’ Who Rejects Foreclosures, Brooklyn Style: Judge Arthur Schack

A ‘Little Judge’ Who Rejects Foreclosures, Brooklyn Style: Judge Arthur Schack


If other judges knew more of what really is than whats not perhaps they would also know the fraud that is being played in their court rooms.

By MICHAEL POWELL Published: August 30, 2009

The judge waves you into his chambers in the State Supreme Court building in Brooklyn, past the caveat taped to his wall — “Be sure brain in gear before engaging mouth” — and into his inner office, where foreclosure motions are piled high enough to form a minor Alpine chain.

 Nicole Bengiveno/The New York Times

“I don’t want to put a family on the street unless it’s legitimate,” Justice Arthur M. Schack said.

Every week, the nation’s mightiest banks come to his court seeking to take the homes of New Yorkers who cannot pay their mortgages. And nearly as often, the judge says, they file foreclosure papers speckled with errors.

He plucks out one motion and leafs through: a Deutsche Bank representative signed an affidavit claiming to be the vice president of two different banks. His office was in Kansas City, Mo., but the signature was notarized in Texas. And the bank did not even own the mortgage when it began to foreclose on the homeowner.

The judge’s lips pucker as if he had inhaled a pickle; he rejected this one.

“I’m a little guy in Brooklyn who doesn’t belong to their country clubs, what can I tell you?” he says, adding a shrug for punctuation. “I won’t accept their comedy of errors.”

The judge, Arthur M. Schack, 64, fashions himself a judicial Don Quixote, tilting at the phalanxes of bankers, foreclosure facilitators and lawyers who file motions by the bale. While national debate focuses on bank bailouts and federal aid for homeowners that has been slow in coming, the hard reckonings of the foreclosure crisis are being made in courts like his, and Justice Schack’s sympathies are clear.

He has tossed out 46 of the 102 foreclosure motions that have come before him in the last two years. And his often scathing decisions, peppered with allusions to the Croesus-like wealth of bank presidents, have attracted the respectful attention of judges and lawyers from Florida to Ohio to California. At recent judicial conferences in Chicago and Arizona, several panelists praised his rulings as a possible national model.

His opinions, too, have been greeted by a cry of affront from a bank official or two, who say this judge stands in the way of what is rightfully theirs. HSBC bank appealed a recent ruling, saying he had set a “dangerous precedent” by acting as “both judge and jury,” throwing out cases even when homeowners had not responded to foreclosure motions.

Justice Schack, like a handful of state and federal judges, has taken a magnifying glass to the mortgage industry. In the gilded haste of the past decade, bankers handed out millions of mortgages — with terms good, bad and exotically ugly — then repackaged those loans for sale to investors from Connecticut to Singapore. Sloppiness reigned. So many papers have been lost, signatures misplaced and documents dated inaccurately that it is often not clear which bank owns the mortgage.

Justice Schack’s take is straightforward, and sends a tremor through some bank suites: If a bank cannot prove ownership, it cannot foreclose.

“If you are going to take away someone’s house, everything should be legal and correct,” he said. “I’m a strange guy — I don’t want to put a family on the street unless it’s legitimate.”

Justice Schack has small jowls and big black glasses, a thin mustache and not so many hairs combed across his scalp. He has the impish eyes of the high school social studies teacher he once was, aware that something untoward is probably going on at the back of his classroom.

He is Brooklyn born and bred, with a master’s degree in history and an office loaded with autographed baseballs and photographs of the Brooklyn Dodgers. His written decisions are a free-associative trip through popular, legal and literary culture, with a sideways glance at the business pages.

Confronted with a case in which Deutsche Bank and Goldman Sachs passed a defaulted mortgage back and forth and lost track of the documents, the judge made reference to the film classic “It’s a Wonderful Life” and the evil banker played by Lionel Barrymore.

“Lenders should not lose sight,” Justice Schack wrote in that 2007 case, “that they are dealing with humanity, not with Mr. Potter’s ‘rabble’ and ‘cattle.’ Multibillion-dollar corporations must follow the same rules in the foreclosure actions as the local banks,savings and loan associations or credit unions, or else they have become the Mr. Potters of the 21st century.”

Last year, he chastised Wells Fargo for filing error-filled papers. “The court,” the judge wrote, “reminds Wells Fargo of Cassius’s advice to Brutus in Act 1, Scene 2 of William Shakespeare’s ‘Julius Caesar’: ‘The fault, dear Brutus, is not in our stars, but in ourselves.’ ”

Then there is a Deutsche Bank case from 2008, the juicy part of which he reads aloud:

“The court wonders if the instant foreclosure action is a corporate ‘Kansas City Shuffle,’ a complex confidence game,” he reads. “In the 2006 film ‘Lucky Number Slevin,’ Mr. Goodkat, a hit man played by Bruce Willis, explains: ‘A Kansas City Shuffle is when everybody looks right, you go left.’ ”

The banks’ reaction? Justice Schack shrugs. “They probably curse at me,” he says, “but no one is interested in some little judge.”

Little drama attends the release of his decisions. Beaten-down homeowners rarely show up to contest foreclosure actions, and the judge scrutinizes the banks’ papers in his chambers. But at legal conferences, judges and lawyers have wondered aloud why more judges do not hold banks to tougher standards.

“To the extent that judges examine these papers, they find exactly the same errors that Judge Schack does,” said Katherine M. Porter, a visiting professor at the School of Law at the University of California, Berkeley, and a national expert in consumer credit law. “His rulings are hardly revolutionary; it’s unusual only because we so rarely hold large corporations to the rules.”

Banks and the cottage industry of mortgage service companies and foreclosure lawyers also pay rather close attention.

A spokeswoman for OneWest Bank acknowledged that an official, confronted with a ream of foreclosure papers, had mistakenly signed for two different banks — just as the Deutsche Bank official did. Deutsche Bank, which declined to let an attorney speak on the record about any of its cases before Justice Schack, e-mailed a PDF of a three-page pamphlet in which it claimed little responsibility for foreclosures, even though the bank’s name is affixed to tens of thousands of such motions. The bank described itself as simply a trustee for investors.

Justice Schack came to his recent prominence by a circuitous path, having worked for 14 years as public school teacher in Brooklyn. He was a union representative and once walked a picket line with his wife, Dilia, who was a teacher, too. All was well until the fiscal crisis of the 1970s.

“Why’d I go to law school?” he said. “Thank Mayor Abe Beame, who froze teacher salaries.”

He was counsel for the Major League Baseball Players Association in the 1980s and ’90s, when it was on a long winning streak against team owners. “It was the millionaires versus the billionaires,” he says. “After a while, I’m sitting there thinking, ‘He’s making $4 million, he’s making $5 million, and I’m worth about $1.98.’ ”

So he dived into a judicial race. He was elected to the Civil Court in 1998 and to the Supreme Court for Brooklyn and Staten Island in 2003. His wife is a Democratic district leader; their daughter, Elaine, is a lawyer and their son, Douglas, a police officer.

Justice Schack’s duels with the banks started in 2007 as foreclosures spiked sharply. He saw a plague falling on Brooklyn, particularly its working-class black precincts. “Banks had given out loans structured to fail,” he said.

The judge burrowed into property record databases. He found banks without clear title, and a giant foreclosure law firm, Steven J. Baum, representing two sides in a dispute. He noted that Wells Fargo’s chief executive, John G. Stumpf, made more than $11 million in 2007 while the company’s total returns fell 12 percent.

“Maybe,” he advised the bank, “counsel should wonder, like the court, if Mr. Stumpf was unjustly enriched at the expense of W.F.’s stockholders.”

He was, how to say it, mildly appalled.

“I’m a guy from the streets of Brooklyn who happens to become a judge,” he said. “I see a bank giving a $500,000 mortgage on a building worth $300,000 and the interest rate is 20 percent and I ask questions, what can I tell you?”

Posted in concealment, conspiracy, corruption, erica johnson seck, foreclosure fraud, foreclosure mills, judge arthur schack, onewest, robo signer, robo signersComments (0)

IndyMac got IndySMACK Down via Hon. Samuel J. Bufford!

IndyMac got IndySMACK Down via Hon. Samuel J. Bufford!


From BMcDonald

This is a bankruptcy case in which IndyMac Bank wanted relief of stay so they could proceed with a foreclosure. The judge ordered them to produce the original note and deed, which they did but ended up having to admit they didn’t own them. This judge Bufford goes into great detail about the issues of “party in interest” and “real party in interest” and who has the right to foreclose. Only a party with a real investment in the property has a right to collect on the debt.

[scribd id=28524908 key=key-15d3p0a4ew0xlkthl48k mode=list]

Posted in conspiracy, foreclosure fraud, indymac, judge samuel bufford, MERS, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., note, onewestComments (0)

[NYSC] JUDGE SCHACK TAKES ON ROBO-SIGNER ERICA JOHNSON SECK: DEUTSCHE BANK v. HARRIS (2)

[NYSC] JUDGE SCHACK TAKES ON ROBO-SIGNER ERICA JOHNSON SECK: DEUTSCHE BANK v. HARRIS (2)


Excerpt:

Plaintiffs affidavit, submitted in support of the instant application for a default judgment, was executed by Erica Johnson-Seck, who claims to be a Vice President of plaintiff DEUTSCHE BANK. The affidavit was executed in the State of Texas, County of Williamson (Williamson County, Texas is located in the Austin metropolitan area, and its county seat is Georgetown, Texas). The COURT is perplexed as to why the assignment was not executed in Pasadena, California, at 46U Sierra Madre Villa, the alleged “principal place of business” for both the assign1,)r and the assignee. In my January 3 1, 2008 decision (Deutsche Bank National Trust company v Maraj, – Misc 3d – [A], 2008 NY Slip Op 50176 [U]), I noted that Erica Johnson-Seck, claimed that she was a Vice President of MERS in her July 3,2007 INDYMAC to DEUTSCHE BANK assignment, and then in her July 3 1,2007 affidavit claimed to be a DEUTSCHE BANK Vice President. Just as in Deutsche Bank National Trust Company v Maraj, at 2, the Court in the instant action, before granting itn application for an order of reference, requires an affidavit from Ms. Johnson-Seck, describing her employment history for the past three years.

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[NYSC] JUDGE SCHACK TAKES ON ROBO-SIGNER ERICA JOHNSON SECK: DEUTSCHE BANK v. MARAJ (1)

[NYSC] JUDGE SCHACK TAKES ON ROBO-SIGNER ERICA JOHNSON SECK: DEUTSCHE BANK v. MARAJ (1)


2008 NY Slip Op 50176(U)
DEUTSCHE BANK NATIONAL TRUST COMPANY As Trustee under the Pooling and Servicing Agreement Series Index 2006-AR6, Plaintiff,
v.
RAMASH MARAJ A/K/A RAMISH MARAJ, ET AL., Defendants.
25981/07.

Supreme Court of the State of New York, Kings County.
Decided January 31, 2008.

Plaintiff: Kevin M. Butler, Esq., Eschen Frenkel Weisman & Gordon, De Rose & Surico, Bayside NY.

Defendant: No Opposition submitted by defendants to plaintiff’s Judgment of Foreclosure and Sale.

ARTHUR M. SCHACK, J.

Plaintiff’s application, upon the default of all defendants, for an order of reference for the premises located at 255 Lincoln Avenue, Brooklyn, New York (Block 4150, Lot 19, County of Kings) is denied without prejudice, with leave to renew upon providing the Court with a satisfactory explanation to various questions with respect to the July 3, 2007 assignment of the instant mortgage to plaintiff, DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE UNDER THE POOLING AND SERVICING AGREEMENT SERIES INDEX 2006-AR6 (DEUTSCHE BANK). The questions deal with: the employment history of one Erica Johnson-Seck, who assigned the mortgage to plaintiff DEUTSCHE BANK, and then subsequently executed the affidavit of facts in the instant application as an officer of DEUTSCHE BANK; plaintiff DEUTSCHE BANK’s purchase of the instant non-performing loan; and, why INDYMAC BANK, F.S.B., (INDYMAC), Mortgage Electronic Registration Systems, Inc. (MERS), and DEUTSCHE BANK all share office space at Building B, 901 East 104th Street, Suite 400/500, Kansas City, MO 64131 (Suite 400/500).

Defendant RAMASH MARAJ borrowed $440,000.00 from INDYMAC on March 7, 2006. The note and mortgage were recorded in the Office of the City Register, New York City Department of Finance on March 22, 2006 at City Register File Number (CRFN) XXXXXXXXXXXXX. INDYMAC, by Mortgage Electronic Registration Systems, Inc. (MERS), its nominee for the purpose of recording the mortgage, assigned the note and mortgage to plaintiff DEUTSCHE BANK, on July 3, 2007, with the assignment recorded on September 5, 2007 at CRFN XXXXXXXXXXXXX.

According to plaintiff’s application, defendant MARAJ’s default began with the nonpayment of principal and interest due on March 1, 2007. Yet on July 3, 2007, more than four months later, plaintiff DEUTSCHE BANK accepted the assignment of the instant non-performing loan from INDYMAC. Further, both assignor MERS, as nominee of INDYMAC, and assignee DEUTSCHE BANK list Suite 400/500 on the July 3, 2007 Assignment as their “principal place of business.” To compound corporate togetherness, page 2 of the recorded Assignment, lists the same Suite 400/500 as the address of INDYMAC.

The Assignment by MERS, on behalf of INDYMAC, was executed by Erica Johnson-Seck, Vice President of MERS. The notary public, Mai La Thao, stated in the jurat that the assignment was executed in the State of Texas, County of Williamson (Williamson County is located in the Austin metropolitan area, and its county seat is Georgetown, Texas). The Court is perplexed as to why the assignment was not executed in Kansas City, the alleged “principal place of business” for both the assignor and the assignee.

Twenty-eight days later, on July 31, 2007, the same Erica Johnson-Seck executed plaintiff’s affidavit submitted in support of the instant application for a default judgment. Ms. Johnson-Seck, in her affidavit, states that she is “an officer of Deutsche Bank National Trust Company as Trustee under the Pooling and Servicing Agreement Series INDX 2006-AR6, the plaintiff herein.” At the end of the affidavit she states that she is a Vice President of DEUTSCHE BANK. Again, Mai La Thao is the notary public and the affidavit is executed in the State of Texas, County of Williamson. The Erica Johnson-Seck signatures on both the July 3, 2007 assignment and the July 31, 2007 affidavit are identical. Did Ms. Johnson-Seck change employers from July 3, 2007 to July 31, 2007, or does she engage in self-dealing by wearing two corporate hats? The Court is concerned that there may be fraud on the part of plaintiff DEUTSCHE BANK, or at least malfeasance. Before granting an application for an order of reference, the Court requires an affidavit from Ms. Johnson-Seck, describing her employment history for the past three years.

Further, the Court requires an explanation from an officer of plaintiff DEUTSCHE BANK as to why, in the middle of our national subprime mortgage financial crisis, DEUTSCHE BANK would purchase a non-performing loan from INDYMAC, and why DEUTSCHE BANK, INDYMAC and MERS all share office space in Suite 400/500.

With the assignor MERS and assignee DEUTSCHE BANK appearing to be engaged in possible fraudulent activity by: having the same person execute the assignment and then the affidavit of facts in support of the instant application; DEUTSCHE BANK’s purchase of a non-performing loan from INDYMAC; and, the sharing of office space in Suite 400/500 in Kansas City, the Court wonders if the instant foreclosure action is a corporate “Kansas City Shuffle,” a complex confidence game. In the 2006 film, Lucky Number Slevin, Mr. Goodkat, (a hitman played by Bruce Willis), explains (in memorable quotes from Lucky Number Slevin, at www.imdb.com/title/tt425210/quotes).

A Kansas City Shuffle is when everybody looks right, you go left . . .

It’s not something people hear about. Falls on deaf ears mostly . . .

No small matter. Requires a lot of planning. Involves a lot of people. People connected by the slightest of events. Like whispers in the night, in that place that never forgets, even when those people do.

In this foreclosure action is plaintiff DEUTSCHE BANK, with its “principal place of business” in Kansas City attempting to make the Court look right while it goes left?

Conclusion

Accordingly, it is

ORDERED, that the application of plaintiff, DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE UNDER THE POOLING AND SERVICING AGREEMENT SERIES INDEX 2006-AR6, for an order of reference for the premises located at 255 Lincoln Avenue, Brooklyn, New York (Block 4150, Lot 19, County of Kings), is denied without prejudice; and it is further

ORDERED, that leave is granted to plaintiff, DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE UNDER THE POOLING AND SERVICING AGREEMENT SERIES INDEX 2006-AR6, to renew its application for an order of reference for the premises located at 255 Lincoln Avenue, Brooklyn, New York (Block 4150, Lot 19, County of Kings), upon presentation to the Court, within forty-five (45) days of this decision and order, of: an affidavit from Erica Johnson-Seck describing her employment history for the past three years; and, an affidavit from an officer of plaintiff

DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE UNDER THE POOLING AND SERVICING AGREEMENT SERIES INDEX 2006-AR6, explaining why (1) plaintiff purchased a nonperforming loan from INDYMAC BANK, F.S.B., (2) shares office space at Building B, 901 East 104th Street, Suite 400/500, Kansas City, MO 64131 with Mortgage Electronic Registration Systems, Inc. and INDYMAC BANK, F.S.B., and (3), claims Building B, 901 East 104th Street, Suite 400/500, Kansas City, MO 64131 as its principal place of business in the Assignment of the instant mortgage and yet executed the Assignment and affidavit of facts in this action in Williamson County, Texas.

This constitutes the Decision and Order of the Court.

[ipaper docId=40494321 access_key=key-18trq6o8869pcgoq0lxh height=600 width=600 /]

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Freedom of Information Act Requests Show OneWest Bank Misrepresentation

Freedom of Information Act Requests Show OneWest Bank Misrepresentation


When will ALL this Bull Shit come to an END? Everything is a stage and all these “Non-Bank’s” are characters!

 Freedom of Information Act Requests Show OneWest Bank Misrepresentation
Posted on March 17, 2010 by Neil Garfield

Submitted by BMcDonald

Most of us are trying to get the info from the banks, which they will not do unless forced. Well, now many of us can walk right in through the back door. FOIA requests! I fought for 7 months to get the bank to cough up the info and it only took 6 days by going through the FDIC. So now I’m in the drivers seat. This damned bank has been lying from day one claiming they are the sole beneficiary of my loan. Now they have committed the fraud and done the crime by illegally selling my home. They are now in deep, deep, trouble.

I’ve been fighting OneWest Bank since August of last year here in Colorado. In Colorado they have nonjudicial foreclosures and the laws as so totally banker-biased it’s insane. All the bank has to do is go to the public trustee with a note from an attorney who “certifies” that the bank is the owner of the loan. What they don’t tell you is the bank has to go before a judge and get an order for sale in a 120 hearing. Most only find out about it at the last minute and don’t even show up because the only issue discussed is whether a default has occurred or not.

I discovered however that if you raise the question of whether the foreclosing party is a true party in interest or not, the court has to hear that as well. I raised that issue and demanded the bank produce the original documents and endorsements or assignements. The judge only ordered them to produce originals, which they did.

Long story short, I managed to hold them off for seven months after hiring an attorney. I found a bankruptcy case from CA in 2008 in which IndyMac produced original documents and ended up having to admit they didn’t own them. I had a letter from OneWest that only stated they purchased servicing rights. I had admissions from the bank’s attorney that there were no endorsements. And at the last minute I discovered the FDIC issued a press release in response to a YouTube video that went viral over the sweetheart deal OneWest did with the FDIC. The FDIC stated in their press release that OneWest only owned 7% of the loans they service. I presented all this to the judge but he ended up ignoring it all and gave OneWest an order to sell my home, which they did on the 4th.

About a week before the sale I went directly to the FDIC and filed a FOIA request for any and all records indicating ownership rights and servicing rights related to my loans and gave them my loan numbers. I managed to get the info in about 6 days. I got PROOF from the FDIC that OneWest did not own my loan. Fredie Mac did. And the info came directly from OneWest systems. And just last Friday I got a letter from IndyMac Mortgage services, obviously in compliance with the FOIA request that Freddie Mac owned the loan. So I now have a confession from OneWest themselves that they have been lying all along! I have a motion in to have the sale set aside and once that’s done I’m going to sue the hell out of them and their attorneys in Federal court.

So I found a wonderful little back door to the proof most of us need. If the FDIC is involved, you can do a FOIA request for the info. I don’t know if it applies to all banks since they are all involved in the FDIC. You all should try it to see.

Most of us are trying to get the info from the banks, which they will not do unless forced. Well, now many of us can walk right in through the back door. FOIA requests! I fought for 7 months to get the bank to cough up the info and it only took 6 days by going through the FDIC. So now I’m in the drivers seat. This damned bank has been lying from day one claiming they are the sole beneficiary of my loan. Now they have committed the fraud and done the crime by illegally selling my home. They are now in deep, deep, trouble.


  

Posted in concealment, conspiracy, corruption, fdic, FOIA, foreclosure fraud, foreclosure mills, freedom of information act, indymac, Law Offices Of David J. Stern P.A., Lender Processing Services Inc., livinglies, LPS, MERS, neil garfield, note, onewest, respa, scamComments (2)


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