Bloomberg–

A possible settlement of a 50-state probe of foreclosure practices was questioned by Nevada’s attorney general, who joined three other states in voicing concern about a deal that protects banks from continuing mortgage investigations.

Nevada Attorney General Catherine Cortez Masto, whose office has sued Bank of America Corp. (BAC) and is conducting civil and criminal foreclosure probes, said she will be “very cautious” about agreeing to a settlement that hinders them.

“If it’s impacting my ongoing litigation and any other future litigation or current investigation, I’m going to be cautious about whether to sign on or not,” Masto said today in a phone interview.

[BLOOMBERG]

State of Nevada v Bank of America, 11-00135, U.S. District Court, District of Nevada (Reno).

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© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

McKenna raps trustee’s claim that it doesn’t have to abide with state law

SEATTLE – Washington Attorney General Rob McKenna today announced that his office is suing ReconTrust Company, a subsidiary of Bank of America, for conducting illegal foreclosures on thousands of Washington homeowners.

“ReconTrust ignored our warnings, repeatedly broke the law and refused to provide information requested during our investigation,” McKenna said. “ReconTrust’s illegal practices make it difficult, if not impossible, for borrowers who might have a shot at saving their homes to stop those foreclosures.”

ReconTrust is a foreclosure trustee that is legally required to act as a neutral party on behalf of both the lender and the borrower while conducting foreclosure proceedings in good faith and in accordance with the law.

The lawsuit filed in King County Superior Court by McKenna and Assistant Attorney General Jim Sugarman, of the office’s Consumer Protection Division, alleges that “ReconTrust has failed to comply with the Washington Deed of Trust Act, RCW 61.24, in each and every foreclosure it has conducted since at least June 12, 2008.” The company is also accused of violating the state’s Consumer Protection Act.

The Attorney General’s Office announced the suit during a news conference held outside a foreclosed home in Seattle. McKenna and Sugarman were joined by two women whose homes were foreclosed by ReconTrust and several private attorneys who are also concerned about ReconTrust’s actions.

“My home is being foreclosed on. The situation has caused great pain for my son and myself,” said Myra Cole, a single mother from Spanaway who struggled to find employment after a layoff. Her loan servicer was reviewing her Spanaway home for a loan modification when ReconTrust sold the house at foreclosure.

“I couldn’t understand how this could have happened,” Cole continued. “I got the run-around. I just can’t believe that the company that’s supposed to be helping me is foreclosing on me. … We are trying to save our homes. We’re doing the steps they tell us. In the end, it’s all for nothing. It’s an injustice.”

Ruby Barrus told a similar story about the home where she and her husband live in Marysville. During a time of financial hardship, their loan servicer promised not to foreclose while they worked out a loan modification.

“Our payments were never late,” Barrus said, adding that they only stopped making payments because the bank indicated they needed to default to qualify for the modification. “We just figured they knew what they were doing because they were our servicer. … Months later, we get a letter from ReconTrust saying they’re our foreclosure attorneys. We had never heard of them.”

Both women are in court battles to keep their homes.

McKenna said an essential requirement of the Deed of Trust statute is that a trustee maintains an office in the state where homeowners can go to ask questions, make last-minute payments and request a foreclosure be postponed for a legitimate reason. But ReconTrust doesn’t have an office in Washington.

“ReconTrust’s claim that the company doesn’t have to follow Washington law and procedures because it is a national bank is wrong,” McKenna added.

The Attorney General’s Office alleges the company:

• Failed to maintain a physical office with telephone service in Washington.
• Failed to identify the actual owner of the promissory notes being foreclosed.
• Provided confusing information regarding how borrowers defaulted and how they can cure that default.
• Failed to conduct foreclosures in a public place, instead holding them at private sites including an office park in Bellevue.
• Created or permitted the use of documents that were improperly executed, notarized or sworn to. Sugarman said notices and agreements contained conflicting dates and improper notarizations and ReconTrust employees sometimes signed as officers of other entities.
• Failed to exercise its duty of good faith toward the borrower by deferring solely to the lender when deciding whether to postpone a foreclosure.

The complaint states that homeowners facing foreclosure are “captive to ReconTrust’s services” and that the company’s failures to abide by the law have concealed material information needed by homeowners to assert rights and defenses, negotiate a loan modification, cure defaults, and postpone or stop a foreclosure sale.

Sugarman said, “It is particularly important right now for trustees to understand and strictly comply with Washington foreclosure law. There have been several changes including a new right for homeowners to request mediation to discuss a possible loan modification or forbearance before the bank pursues foreclosure.”

The complaint asks that the court require ReconTrust to comply with the law and impose civil penalties of up to $2,000 per violation, as well as restitution for consumers.

Based on information obtained during its investigation, the Attorney General’s Office estimates that ReconTrust has issued 9,900 foreclosure notices since January 2008 in King, Pierce and Snohomish counties alone.  ReconTrust forecloses across the state.  It’s unknown how many foreclosures may have been prevented had ReconTrust complied with laws.

In May 2010, the Attorney General’s Consumer Protection Division began investigating reports of lenders and trustee services not properly reviewing foreclosure documents or following other legal procedures. McKenna sent letters in October 2010 and April 2011, outlining concerns and calling on trustees to suspend questionable foreclosures in the state. The office is investigating more than a dozen other trustees for suspected violations.

The office also remains very involved with the multistate investigation into problems in the foreclosure industry.

For more information about these investigations and resources for homeowners, including new mediation rights, visit www.atg.wa.gov/foreclosure.aspx.

Private lawsuits against ReconTrust have been filed in Utah, Nevada, California, Oregon and Arizona concerning its role in foreclosures in those states, as well as by private attorneys in Washington.  The Attorney General of Utah sent a public letter to Bank of America threatening suit if ReconTrust continued to violate Utah foreclosure law.

DOCUMENTS

ReconTrust Complaint

This link lists properties that are listed for sale or have been sold by ReconTrust: http://www.recontrustco.com/upcoming_counties.aspx?state=Washington

Media Contact:

Kristin Alexander, Media Relations Manager,

(206) 464-6432, cell: (206) 437-2654,

kalexander@atg.wa.gov

source: http://www.atg.wa.gov/pressrelease.aspx?&id=28750

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UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA SOUTHERN DIVISION

MICHAEL M. CARNEY, Plaintiff,

vs.

BANK OF AMERICA CORPORATION, ET AL., Defendant

EXCERPT:

ANALYSIS

Mr. Carney has made a showing that ReconTrust might not be the proper trustee with legal authority to conduct the trustee’s sale scheduled for July 11, 2011. The issue is whether MERS properly substituted ReconTrust as trustee in place of First American Title Company prior to MERS assigning its beneficial interest in the deed of trust to US Bank, and whether US Bank has approved of the foreclosure sale. See FAC Ex. 9 (Corporation Assignment of Deed of Trust assigning MERS’ beneficial interest in the deed of trust to US Bank dated June 24, 2010 and recorded July 7, 2010); id. Ex. 6-2 (Substitution of Trustee listing MERS as the beneficiary and ReconTrust as the new trustee but not indicating the date of execution), id. Ex. 6-3 (Affidavit of Mailing for Substitution of Trustee by Code dated May 19, 2011); id. Ex. 6-1 (Notice of Trustee’s Sale listing ReconTrust as trustee and June 9, 2011 sale date); id. ¶ 72 (verified FAC alleging that no properly executed substitution of trustee was recorded prior to ReconTrust filing a Notice of Trustee’s Sale on October 29, 2010). Defendants have asserted in their opposition to Mr. Carney’s ex parte application that “MERS substituted ReconTrust as trustee in place of First American Title Company – and this substitution was recorded,” Opp’n at 5, but they have not produced the records indicating that this substitution properly occurred during the time period that MERS was the beneficiary.

[…]

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Salt Lake City, UT (UTAH NEWS) July 5, 2011

The Salt Lake City-based law firm Mumford West & Snow, LLC , today announced the filing of a class action lawsuit against the lawyers for Bank of America and its wholly own subsidiary ReconTrust, N.A. for conducting thousands of unauthorized foreclosures in the state. The lawsuit, filed in Utah’s Third Judicial District, is the latest development in an intense, ongoing legal battle in a state where the Utah legislature has recently enacted new civil penalties to assist aggrieved homeowners fighting illegal foreclosures and Utah’s Attorney General, Mark Shurtleff, publicly announced that ReconTrust was not in compliance with Utah law.

Lead counsel Marcus R. Mumford explained, “These parties have demonstrated a long standing pattern of illegal activity in taking thousands of homes from Utah homeowners in unauthorized foreclosures. They continue to kick people out of their homes claiming that they are not required to follow Utah law. We intend to put a stop to that.”

The lawsuit, now before Utah Third District Judge Andrew H. Stone, is the first class action suit filed after the recently enacted changes to Utah law. Attorney Tyson B. Snow explains, “We recently met with the Utah Attorney General’s office on this issue and it is our understanding that one of the purposes of the new law is to encourage this very type of lawsuit.” Mumford West & Snow attorneys also intend to seek a statewide restraining order and a preliminary injunction prohibiting the named defendants from conducting any additional foreclosure sales within the state.

Utah’s new law awards $2,000 or actual damages, whichever is greater, and attorney’s fees to homeowners who have been subject to an unauthorized foreclosure conducted by “unauthorized persons.” In the past month, ReconTrust has foreclosed on approximately 200 properties and currently has more than 800 foreclosure sales scheduled in the coming months. The newly filed lawsuit alleges that lawyers for Bank of America and ReconTrust violate Utah law each time they conduct these foreclosure sales. Utah homeowners who have been foreclosed on by ReconTrust or who may currently be facing a wrongful foreclosure can contact Mumford West & Snow through the firms website at http://www.mumfordwest.com

_______________________________

Mumford West & Snow (www.mumfordwest.com) is a Salt Lake City based firm that specializes in representing entrepreneurs, businessmen, executives and individual clients, in Utah and around the country, in complex civil and criminal litigation. The firm handles both defense work and plaintiff’s litigation for clients ranging from individuals and small enterprises to major corporations.

Mumford West & Snow has been called “one of Salt Lake City’s leading new firms in high-profile litigation.”

###

If you’d like more information about this release, or to schedule an interview with an attorney at Mumford West & Snow, please call 801-599-0020 or email contact@mumfordwest.com.

source: www.mumfordwest.com

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Civ. No.6:10-cv-01306-AA

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OREGON

Dated: June 1, 2011

OPINION AND ORDER

Pamela K. Staton Pro se plaintiff

Russell L. Baldwin
Preparation attorney for plaintiff

Stephen P. McCarthy
Pilar C. French
Lane Powell PC
Attorneys for defendants

AIKEN, Chief Judge:

Defendants BAC Home Loans Servicing, L.P. (sued erroneously as Bank of America (BAC) Home Loans Servicing, L.P.), Mortgage Electronic Registration Systems, Inc., and ReconTrust, N.A. move to dismiss all of plaintiff Pamela Staton’s claims pursuant to Fed. R. Civ. P. 12(b)(6) and Fed. R. Civ. P. 8(a). Defendants’ motion is granted in part and denied in part.

In addition, plaintiff moves for partial summary judgment pursuant to Fed. R. Civ. P. 56, seeking an injunction. Plaintiff’s motion is denied.

BACKGROUND

In 2005, plaintiff took out a loan from Countrywide Home Loans, Inc. (“Countrywide”) in the amount of $735,500. Pursuant to this transaction, plaintiff executed a promissory note in favor of Countrywide. The note was secured by a Deed of Trust, which lists Countrywide as the lender, Mortgage Electronic Registration Systems, Inc. (“MERS”) as the beneficiary, “acting solely as a nominee for Lender and Lender’s successors and assigns,” and Fidelity National Title Insurance as the trustee. The Deed of Trust was filed in Lane County, Oregon on November 29, 2005.

In September 2009, plaintiff stopped making payments required under the loan agreement. On October 19, 2009, Countrywide’s loan servicer, BAC Home Loans Servicing, L.P. (“BAC”), sent a Notice of Intent to Accelerate to plaintiff. The Notice of Intent to Accelerate advised plaintiff that she was required to make a payment of $8,915.61, plus other regular payments, by November 18, 2009, otherwise the default would not be considered cured and the mortgage payments would be accelerated with the full amount becoming due and payable. Plaintiff made a partial payment, but failed to fully cure the default.

On November 10, 2009, BAC sent plaintiff another Notice of Intent to Accelerate, relating to a home equity line of credit loan secured by the property. The second Notice of Intent to Accelerate advised plaintiff that she was required to make a payment of $719.61, plus other regular payments, by December 15, 2009, otherwise the default would not be considered cured and the mortgage payments would be accelerated with the full amount becoming due and payable. Plaintiff failed to cure the default.

Sometime prior to initiating foreclosure proceedings in 2010, Countrywide securitized, bundled and sold, or “tranched,” plaintiff’s promissory note. As a result of the “tranching,” one or more parties, including CWALT, Inc. (“CWALT”), gained a beneficial interest in the note.

On January 6, 2010, MERS, as nominee for Countrywide, assigned the Deed of Trust to The Bank of New York Mellon, fka

The Bank of New York (“BNY”), as trustee for certificate holder CWALT. On January 11, 2010, the Assignment of the Deed of Trust was recorded in the official records of Lane County.

On January 6, BNY by BAC appointed ReconTrust to serve as successor trustee for the Deed of Trust. This appointment was executed on January 6, 2010, and recorded in the official records of Lane County on January 11, 2010.

On January 6, 2010, ReconTrust executed a Notice of Default and Election to sell plaintiff’s property. On January 11, 2010, the Notice of Default and Election to Sell was recorded in the official records of Lane County. On June 1, 2010, ReconTrust recorded the following documents in the official records of Lane County: Affidavit of Mailing of Notice of Sale, Affidavit of Publication of Notice of Sale, Affidavit of Service, and a copy of the Notice of Sale.

On September 17, 2010, plaintiff filed a claim against defendants in Lane County Circuit Court. On September 25, 2010, plaintiff filed an amended complaint, alleging the following: 1) declaratory judgment, pursuant to Or. Rev. Stat. § 28.010, that the actions of defendants are void pursuant to Oregon’s Trust Deed Act and enjoining defendants from foreclosing plaintiff’s property; 2) fraud; 3) breach of the covenant of good faith and fair dealing; 4) breach of fiduciary duty; 5) declaratory judgment, pursuant to Or. Rev. Stat. §§ 28.010, 28.020, defining the rights and duties between plaintiff, defendants, and mortgage pass-through certificate holders; 6) quiet title; 7) remove cloud on title; and 8 statutory claim for invalid encumbrance. Plaintiff also seeks economic damages of $1,135,000, non-economic damages of $150,000, and “actual” damages in the amount of $1,060,000. On October 20, 2010, defendants removed this action to this Court.

On November 1, 2010, ReconTrust executed a new Notice of Default and Election to Sell the Property. On November 4, 2010, the Notice of Default and Election to Sell was recorded in the official records of Lane County. The Notice stated that the foreclosure sale was set to occur on March 16, 2011, at the Lane County Courthouse. A foreclosure sale has not yet occurred.

STANDARDS

Where the plaintiff “fails to state a claim upon which relief can be granted,” the court must dismiss the action. Fed. R. Civ. P. 12(b)(6). To survive a motion to dismiss, the complaint must allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 For the purpose of the motion to dismiss, the complaint is liberally construed in favor of the plaintiff, and its allegations are taken as true. Rosen v. Walters, 719 F.2d 1422, 1424 (9th Cir. 1983. However, bare assertions that amount to nothing more than a “formulaic recitation of the elements” of a claim “are conclusory and not entitled to be assumed true.” Ashcroft v. Igbal. 129 S. Ct. 1937, 1951 (2009.

Summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitles to a judgment as a matter of law.” Fed. R. Civ. P. 56(c) . Substantive law on an issue determines the materiality of a fact. T.W. Electrical Serv., Inc. v. Pacific Electrical Contractors Assoc., 809 F.2d 626, 630 (9th Cir. 1987. Whether the evidence is such that a reasonable jury could return a verdict for the nonmoving party determines the authenticity of a dispute. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986.

DISCUSSION

Defendants contend that all of plaintiff’s claims fail to state a claim as a matter of law, and therefore should be dismissed. Defendants also assert that plaintiff’s declaratory relief claims should be dismissed because defendants had the authority to commence and prosecute a nonjudicial foreclosure action.

I. Preliminary Matters

To support their motion to dismiss, defendants request that this Court take judicial notice of MERS’ Terms and Conditions. The agreement outlines the relationship between MERS and its members, such as Countrywide or BNY, and permits MERS to initiate a foreclosure sale on behalf of a lender.

Plaintiff argues that this Court should not take judicial notice “for the purpose of determining whether defendants’ actions were permissible under Oregon law because plaintiff disputes the authenticity of the documents.” Plf.’s Resp. to Defs.’ Mot. For S.J. at pg. 8. The Court assumes that, by referring to “documents,” plaintiff is objecting to more than just the Terms and Conditions. The Court surmises from plaintiff’s response that plaintiff does not want this Court to take judicial notice of the Assignments of the Deed of Trust and Appointment of Successor Trustee, because plaintiff believes they were fraudulently executed.

Additionally, plaintiff requests that this Court take judicial notice of ReconTrust’s “debt collection activity.” In her response, plaintiff reprints a portion of a Notice of Sale issued by ReconTrust, which states that “[t]his is an attempt to collect a debt.” Id. at 15. Plaintiff seeks judicial notice of this document to support her claim that ReconTrust must be licensed with Oregon as a debt collector.

Review of a Rule 12(b)(6) motion is generally limited to the complaint. U.S. v. Ritchie, 342 F.3d 903, 907 (9th Cir. 2003. However, a court may consider extrinsic documents if they are integral to the plaintiff’s claims and their authenticity is undisputed. Parrino v. FHP, Inc. , 146 F.3d 699, 706 & n. 4 (9th Cir. 1998). Under the Federal Rules of Evidence, a “judicially noticed fact must be one not subject to reasonable dispute in that it is either (1) generally known within the territorial jurisdiction of the trial court; or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201; see also Ritchie, 342 F.3d at 909. Facts subject to judicial notice may be considered on a motion to dismiss. Mullis v. U.S. Bankruptcy Ct., 828 F.2d 1385, 1388 (9th Cir. 1987.

Despite plaintiff s statement that she “disputes the authenticity” of MERS’ Terms and Conditions, plaintiff has alleged no facts suggesting that this agreement is counterfeit or false in any way. I find, however, that the Terms and Conditions are not integral to plaintiff’s claims, and therefore, defendants’ request for judicial notice is denied.

Further, regarding documents recorded with Lane County, the Court must take judicial notice if plaintiff intends on using these documents to establish that defendants fraudulently foreclosed on her property. Therefore, these documents are integral to plaintiff’s claims and should have been attached to her complaint. Plaintiff seems to implicitly recognize this fact, as she references these documents in great detail in her complaint, arguably incorporating them by reference. Since plaintiff now attaches these documents to her response, the Court presumes that plaintiff would like the Court to consider them, if only for the sake of establishing defendants’ fault. These documents are also part of the public record. Defendants make no objection to these documents. Thus, even though plaintiff disputes their validity, the Court takes judicial notice of documents recorded with Lane County, including the Assignments of the Deed of Trust and Appointment of Successor Trustee.

Finally, the Court declines to take judicial notice of plaintiff’s document relating to ReconTrust’s “debt collection activity.” The language that plaintiff incorporated into her response was an excerpt from a Notice of Sale for a property other than plaintiff’s. Here, plaintiff has provided no evidence that ReconTrust sent her a similar notice. Thus, the fact that ReconTrust sent a notice to another person in which it identified itself as a debt collector is not integral to plaintiff s claim. Further, the Court has no way to confirm the authenticity of this Notice, since the parties bound by it are not now before this Court. As such, plaintiff’s request for judicial notice is denied.

II. Plaintiff s First Claim for Declaratory Judgment

Plaintiff’s first claim for relief is unclear. It consists of a convoluted list of allegations and facts, supported by “information and belief.” Plaintiff seems to allege that any action of BAC, MERS and ReconTrust are void because they were not licensed under Oregon law. Further, plaintiff is seeking a declaration that defendants Recontrust and MERs are not qualified to act as trustees pursuant to Oregon’s Trust Deed Act, such that defendants’ foreclosure proceedings are invalid. Plaintiff, however, misconstrues the law and facts surrounding this case.

A. Oregon’s Licensing Requirements

BAC, MERS, or ReconTrust are not required to be licensed by the Oregon Secretary of State with respect to foreclosing the Deed of Trust. Moreover, ReconTrust is not required to be registered with the Oregon Department of Business and Consumer Services as a debt collector. As defendant correctly points out, Oregon law excludes corporations that engage in certain corporate business activities from state licensing requirements, and provides that the corporate acts of unlicensed foreign corporations are not invalid. See Or. Rev. Stat. §§ 60.701, 60.704.

Generally, a “foreign corporation may not transact business” in Oregon “until it has been authorized to do so by the Secretary of State.” Or. Rev. Stat. § 60.701(1). However, defendants argue that certain activities, even if conducted in Oregon, do not subject a foreign corporation to licensing requirements. Specifically, defendants cite to § 60.701(2), which states: “[t]he following activities among others, do not constitute transacting business . . . (g) Creating or acquiring indebtedness, mortgages and security interests in real or personal property; (h) Securities or collecting debts or enforcing mortgages and security interests in property securing the debts.” Or. Rev. Stat. § 60.701(2).

Here, defendants’ actions fall expressly within this exception, as they initiated foreclosure proceedings by enforcing plaintiff’s mortgage. Accordingly, I find that defendants were not required to receive a license from the Secretary of State in order to foreclose on plaintiff’s property.

Finally, contrary to plaintiff’s contentions, ReconTrust need not be qualified to act as a debt collector under Oregon law. Plaintiff cites to no authority that imposes such a requirement on an entity such as ReconTrust. Thus, plaintiff’s assertion that ReconTrust must be licensed as a debt collector is conclusory, and as such, this Court must not presume the statement to be true. Iqbal, 129 S.Ct. at 1951. In fact, upon the allegations contained in the complaint, ReconTrust’s conduct is merely that of a trustee seeking foreclosure and sale pursuant to a Deed of Trust, which is not a debt collecting activity. Hulse v. Ocwen Fed. Bank, FSB, 195 F.Supp.2d 1188, 1203-4 (D.Or. 2002). As such, defendants’ motion to dismiss is granted in part in regard to these aspects of plaintiff s first claim.

B. Oregon’s Trust Deed Act

ReconTrust, the only defendant who actually did act as a trustee in this case, does meet the definition of “trustee” under Oregon’s Trust Deed Act. The Act defines trustee as “a person, other than the beneficiary . . . [who] is qualified to be a trustee under ORS 86.790.” Or. Rev. Stat. § 86.705(6). Under § 86.790, a “financial institution or trust company, as defined by ORS 706.008, that is authorized to do business under the laws of Oregon or the United States” is qualified to be a trustee. Or. Rev. Stat. § 86.790 (1) (b) .

Here, all defendants conceivably could meet the definition of a “trustee,” because all are financial institutions authorized to do interstate business. See Or. Rev. Stat. § 706.008 (defining a “financial institution” as “insured institutions . . . and federal credit unions” including “the trust department of a bank”). Specifically, ReconTrust is a subsidiary of Bank of America, an FDIC insured, federally chartered bank. Therefore, as a matter of law, ReconTrust is qualified to act as a trustee.

In addition, plaintiff contends that Oregon’s Trust Deed Act does not permit MERS to be designated as beneficiary as nominee for the lender. Plaintiff relies on a number of cases outside of this district, the majority of which are factually distinct, in support of her claim. See MERSCORP, Inc. v. Romaine, 8 N.Y.3d 90, 861 N.E.2d 81 (2006; Landmark Nat’l Bank v. Kesler, 289 Kan. 528, 216 P.3d 158 (2009), etc. Plaintiff contends that these cases hold that MERS can never acquire a beneficial interest in a promissory note or Deed of Trust, because MERS is merely an entity which tracks and records the sale of mortgage instruments. As such, plaintiff argues that MERS’ lacks authority to assign trust deeds, promissory notes, appoint successor trustees or institute foreclosure.

Further, plaintiff alleges that someone other than the holder of the note is proceeding against the security. Accordingly, plaintiff argues that, to the extent that MERS’ assignment had any effect, it is void, because the “assignment of a security interest without the assignment of the debt that it secures yields the assignee nothing.” Schleef v. Purdy, 107 Or. 71, 78, 214 P. 137 (1923) .

Oregon’s Trust Deed Act defines “beneficiary” as “the person named or otherwise designated in a trust as the person for whose benefit a trust deed is given.” Or. Rev. Stat. § 86.790(1)(d). Thus, nothing in the statute expressly prohibits MERS from being designated as a “beneficiary” under a trust deed.

Defendants argue that, under the broad language of Or. Rev. Stat. § 86.790(1)(d), MERS is an appropriate beneficiary as listed on the Deed of Trust. They contend that courts, both within and outside the Ninth Circuit, have recognized that MERS, acting as nominee for a lender, can serve as a beneficiary, and as such, has the authority to assign its interest under a Deed of Trust. See Vawter v. Quality Loan Serv. Corp. Of Wash., 707 F.Supp.2d 1115 (W.D.Wash., 2010); Stewart v. MERS, 2010 WL 10655131, *12 (D.Or. Feb. 9, 2010) ; In re Huacrins, 357 B.R. 180 (Bkrtcy. D.Mass. 2006); etc.

While neither party cites to it, this Court is aware of authority within this district that has questioned MERS’ authority to assign its beneficial interest under a Deed of Trust. See In Re Allman, 2010 WL 3366405, *9-10 (Bkrtcy.D.Or. Aug. 24, 2010). While not directly on point, Allman held that the relationship of MERS to the lender “is more akin to that of a straw man than to a party possessing all the rights given a buyer,” and accordingly the true “beneficiary” under the Deed of Trust remained the lender. Id.

Regardless, I find that it is inappropriate to resolve this issue at this stage in the proceedings. In the last several months, “a veritable tsunami of investigation into and litigation over mortgage foreclosure practices broke loose on a national scale.” Bertrand v. Suntrust Mortgage, Inc., Civ. No. 09-857, Opinion and Order at 2 (D.Or. Nov. 1, 2010) . Until case law within this jurisdiction is developed regarding MERS’ role as beneficiary, it is impossible to conclude whether plaintiffs’ complaint states a claim.

Moreover, plaintiff is correct that a foreclosure may be invalid where the entity commencing foreclosure is not the holder of the note. Despite plaintiff’s requests, defendants have failed to provide proof that the foreclosing bank owned the promissory note or can trace its assignment. Therefore, the foreclosure may have been improper independent of MERS’ general authority to assign the Deed of Trust.

Therefore, plaintiff’s claim for a judgement declaring that defendants’ actions are void for failure to be licensed by the state of Oregon or to comply with Oregon’s Trust Deed Act fail as a matter of law and are dismissed.

However, to the extent that plaintiff is seeking a declaration that MERS lacks the general authority to assign the Deed of Trust as beneficiary, or that the foreclosure was improper because the foreclosing bank did not own the underlying note or failed to track its assignment, defendants’ motion to dismiss is denied.

Finally, as an equitable matter, I find that it is necessary to enjoin defendants from completing foreclosure proceedings until all issues regarding the disputed property are resolved. As such, this Court finds it unnecessary to address plaintiff’s motion for partial summary judgment, since the result sought therein has now been reached.

III. Plaintiff’s Second Claim for Fraud

Plaintiff’s second claim alleges that BAC and ReconTrust made misrepresentations to plaintiff regarding ReconTrust’s authority to act as trustee under Oregon law. Further, plaintiff contends that BAC made material misrepresentations about a negotiated short sale, a forbearance, and its status as a holder in due course entitled to payment.

As discussed above, ReconTrust is qualified to act as a trustee under Oregon’s Trust Deed Act. Accordingly, any representations that were allegedly made by BAC or ReconTrust relating to ReconTrust’s role as trustee were not false and cannot support a claim for fraud. Therefore, defendants’ motion to dismiss is granted in part in regard to this aspect of plaintiff’s second claim.

Moreover, I find that the remainder of plaintiff’s fraud claim fails to meet Fed. R. Civ. P. 9(b)’s heightened pleading requirements. To satisfy Rule 9(b)’s standard, “the pleader ‘must state the time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations.'” Schreiber Distrib. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986). A plaintiff must also “‘set forth what is false or misleading about a statement, and why it is false.'” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003. Additionally, “Rule 9(b) does not allow a complaint to merely lump multiple defendants together but ‘require[s] plaintiffs to differentiate their allegations . . . and inform each defendant separately of the allegations surrounding his alleged participation in fraud.'” Swartz v. KPMG LLP, 476 F.3d 756, 764-5 (9th Cir. 2007) .

Here, plaintiff failed to identify the time, place, specific content, and the parties that allegedly made false representations. Furthermore, if plaintiff is alleging fraud based in part on an agreement between the parties that BAC would accept payment of a lesser amount in full satisfaction of the loan, plaintiff needs to provide evidence of this agreement to the Court. I will, however, grant plaintiff leave to amend her First Amended Complaint to add pleadings sufficient to meet Fed. R. Civ. P. 9(b).

Finally, while not included in the second claim for relief, plaintiff alleges that defendants fraudulently recorded documents with Lane County. Specifically, plaintiff alleges that defendants impermissibly used a “robo-signer,” who was not authorized to act on defendants’ behalf, in order to endorse the Assignments of the Deed of Trust and the Notice of Default. Plaintiff seeks relief for this alleged wrongdoing in her eighth claim for invalid encumbrances. However, because the basis of that claim is defendants’ fraud, the Court suggests that plaintiff include these allegations instead in her second claim for relief, and plead them in accordance with Fed. R. Civ. P. 9(b).

IV. Plaintiff’s Third Claim for Breach of the Covenant of Good Faith and Fair Dealing

Plaintiff’s third claim for breach of the covenant of good faith and fair dealing appears to be asserted only against defendant BAC. Plaintiff’s claim must be dismissed for two reasons. First, the factual allegations supporting the claim are conclusory. The entirety of plaintiff’s third claim states merely that “BAC had a common law duty of good faith and fair dealing to plaintiff by virtue of the contract between defendant BAC and plaintiff. Defendant BAC breached its covenant of good faith and fair dealing as set forth above.” Amended Complaint ¶ 30-1. Because the pleadings amount to nothing more than bare assertions of the elements of a claim, they are not entitled to the presumption of truth. Ashcroft, 129 S.Ct. at 1951.

Second, plaintiff again misconstrues the law and facts surrounding this case. The basis of plaintiff’s claim appears to be that BAC breached its contract with plaintiff in bad faith. In fact, plaintiff first breached the contract by failing to pay her mortgage in accordance with the terms of the promissory note. Therefore, to the extent that defendants proceeded to foreclose pursuant to the express terms of the contract, there can be no claim for breach of the covenant of good faith and fair dealing. Uptown Heights Assocs. Ltd. P’ship v. Seafirst Corp., 320 Or. 638, 645, 891 P.2d 639 (1995) (“if a written contract between the parties expressly allows for a particular remedy by one of the parties, in the face of a specified breach, the parties’ objectively ‘reasonable expectations’ under the contract include the invocation of that remedy in the face of that breach. The party invoking its express, written contractual right does not, merely by so doing, violate its duty of good faith”).

Accordingly, defendants’ motion to dismiss is granted in part, and plaintiff’s third claim is dismissed.

V. Plaintiff s Fourth Claim for Breach of Fiduciary Duty

Plaintiff withdraws her claim for breach of fiduciary duty against defendant BAC, acknowledging that BAC s relationship with plaintiff is not fiduciary in nature. Uptown Heights, 320 Or. At Page 18 649-50. Therefore, plaintiff’s fourth claim is dismissed.

VI. Plaintiff’s Fifth Claim for Declaratory Judgment

Plaintiff’s fifth claim is for a declaratory judgment defining the rights of the parties. Plaintiff alleges that the securitization of her loan was in direct violation of the parties’ lending agreement. However, as stated above, plaintiff has failed to provide this Court with any documentation of the loan or its terms. Further, plaintiff’s allegations in the complaint regarding the terms of the agreement are unspecific and conclusory. Thus, it is impossible for this Court to determine whether defendants could have acted impermissibly in regard to selling investor certificates in plaintiff’s underlying note.

As stated above, if the foreclosing bank cannot show that they own the underlying note or cannot trace its assignment, in part or wholly due to the securitization of the note, plaintiff may have a right to a declaratory judgement. However, plaintiff’s fifth claim for relief currently fails to state a claim, and is therefore, dismissed. Defendants’ motion to dismiss is granted in that regard.

VII. Plaintiff’s Sixth Claim for Quiet Title

Plaintiff’s six claim seeks a decree from this Court that the property is free and clear of all encumbrances, including the Deed of Trust and promissory note. Here, the factual allegations supporting the complaint are once again conclusory. The entirety of plaintiff’s sixth claim states that ” [p]laintiff is the owner in possession of real property . . . Defendants . . . are not in possession of plaintiff’s real property . . . Defendants claim an interest adverse to plaintiff’s.” Amended Complaint ¶ 4751.

Plaintiff is merely alleging the elements of a claim to quiet title. See Or. Rev. Stat. § 105.605 (“Any person claiming an interest or estate in real property not in the actual possession of another may maintain a suit in equity against another who claims an adverse interest”). However, plaintiff has failed to allege any particular facts entitling her to relief.

In addition, even if plaintiff’s complaint did state a claim to quiet title, it would not be an appropriate remedy here. In general, a person may bring an equitable quiet title action to obtain resolution of a dispute relating to adverse or conflicting claims to real property. Spears v. Dizick, 235 Or. App. 594, 598, 234 P.3d 1037 (2010). While it is possible that defendants may have failed to follow the proper foreclosure procedures, it is undisputed that defendants had the right to foreclose based upon plaintiff’s default under the loan. Thus, because plaintiff is unable to cure the default, she no longer has a valid claim for entitlement to the property. As such, there are no conflicting claims to the property for this Court to resolve.

Further, “[e]quitable relief does not lie if there is an adequate remedy at law.” Alsea Veneer, Inc. v. State of Oregon, 318 Or. 33, 43, 862 P.2d 95 (1993). Here, plaintiff is seeking several other remedies, including over $2 million in monetary damages, an injunction against defendants from foreclosing on her property, and a declaration that she owns the property free of any mortgage. Based on her complaint, plaintiff clearly believes that there are other adequate remedies available at law. Further, this Court is enjoining defendants from commencing foreclosure proceedings until this matter is resolved. As such, plaintiff has failed to show that she is not entitled to further equitable relief.

Accordingly, plaintiff’s claim fails as a matter of law and defendants’ motion to dismiss is granted in part. plaintiff’s sixth claim is dismissed.

VIII. Plaintiff’s Seventh Claim to Remove Cloud on Title

Plaintiff’s seventh claim seeks the removal of cloud on title. Plaintiff’s claim fails for two reasons. First, the factual allegations supporting the complaint are conclusory. The entirety of plaintiff’s seventh claim states only that defendants “claim a lien or other encumbrance adverse to plaintiff’s interest in real property. The encumbrance is invalid because the beneficiary under the deed of trust is not entitled to payment on the note, as set forth above.” Amended Complaint SI 52-3. Once more, plaintiff is merely asserting the bare elements of a claim. Ashcroft, 129 S.Ct. at 1951. Further, because plaintiff “incorporates by reference [all] paragraphs,” it is difficult to even discern what relief plaintiff is seeking and the purported basis for that relief.

Second, as discussed above, MERS, the listed beneficiary under the deed of trust, is not seeking payment on the note. Rather, MERS’ role was limited to essentially recording the transfer of the Deed of Trust. Accordingly, plaintiff is not entitled to relief on that basis.

Therefore, plaintiff’s seventh claim for relief fails as a matter of law. Defendants’ motion to dismiss is granted in part and plaintiff’s seventh claim for relief is dismissed.

VIV. Plaintiff’s Eighth Claim for Invalid Encumbrance

Plaintiff’s final claim is for invalid encumbrances pursuant to Or. Rev. Stat. § 205.450 et seq. The factual allegations supporting the claim are again conclusory. Plaintiff’s eighth claim states only that “[d]efendant BAC knowingly filed, or directed defendants MERS and ReconTrust to file, an invalid claim of incumbrance against plaintiff’s real property.” Amended Complaint St 56. Plaintiff then goes on to list documents that were recorded in the Lane County Clerk’s Office. Amended Complaint SI 57. However, the fact that these documents were recorded in Lane County does not establish that they were in anyway invalid, much less that defendants knew that they were invalid. Thus, plaintiff is again merely asserting the elements of a claim, without identifying any particular facts entitling her to relief. See Or. Rev. Stat. 205.470 (“[a]ny person who knowingly files, or directs another to file, an invalid claim of encumbrance shall be liable to the owner of the property”). Accordingly, plaintiff fails to state a plausible claim upon which relief can be granted. Ashcroft, 129 S.Ct. at 1951.

Therefore, defendants’ motion to dismiss is granted in part, and plaintiff’s eighth claim for relief is dismissed.

CONCLUSION

For the reasons stated above, defendants’ motion to dismiss (doc. 10) is GRANTED in part and DENIED in part as follows: defendants’ motion is GRANTED as to plaintiff’s claims for fraud, breach of covenant of good faith and fair dealing, breach of fiduciary duty, fifth claim for declaratory judgment, quiet title, remove cloud on title, and invalid incumbrance; defendants’ motion is DENIED as to plaintiff’s’ first claim for declaratory judgment.

This Court, however, GRANTS plaintiff leave to amend her First Amended Complaint in order to allege facts sufficient to state a claim for relief, and to replead her fraud claim, such that it complies with Fed. R. Civ. P. 9(b)’s heightened pleading requirements. The parties’ requests for oral argument are DENIED as unnecessary.

Further, because this Court is enjoining defendants from foreclosing until the underlying dispute regarding the property is resolved, plaintiff’s motion for partial summary judgment (doc. 32), seeking an injunction, is DENIED.

Finally, this Court encourages the parties to pursue mediation via the U.S. District Court of Oregon’s Foreclosure Mediation Panel.

IT IS SO ORDERED.

Ann Aiken
United States District Judge

“All real estate foreclosures conducted by ReconTrust in the state of Utah are not in compliance with Utah’s statutes, and are hence illegal”

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Salt Lake Tribune-

U.S. District Judge Dee Benson left open a legal window Wednesday for two South Jordan residents facing the loss of their house, one of the first cracks in federal court for Utahns trying to save homes from the wave of foreclosures swamping the state.

Benson declined to grant a motion to dismiss the lawsuit brought by Michael and Dana Geddes to halt the foreclosure on their home while they try to negotiate a loan modification. That means the couple and their attorney can proceed with gathering testimony and documents to try to prove their contention that the foreclosure process to which they’re being subjected does not comply with Utah and federal laws.

The Salt Lake Tribune

Updated May 11, 2011 07:47PM

Bank of America continued to file foreclosure-related actions in its own name Wednesday, the day after a state law directly aimed at that practice by the mortgage-servicing giant took effect.

The new law allows homeowners who were illegally foreclosed on to go to court to seek payment of damages, penalties of up to $2,000 and legal fees. The Utah Attorney General’s Office asserts that ReconTrust, the foreclosure arm of Bank of America, fails to comply with state law when it institutes foreclosure proceedings under its own name.

Published: Saturday, March 05, 2011, 7:34 PM     Updated: Saturday, March 05, 2011, 7:47 PM

By Brent Hunsberger, The Oregonian

The sales of hundreds of foreclosed homes in Oregon have been halted or withdrawn in recent weeks after federal judges repeatedly questioned their legality, according to a number of real estate attorneys in the state.

Lenders have withdrawn more than 300 foreclosure sales since February in Deschutes County alone, one of the state’s hardest hit by the housing collapse. About 130 of those notices were filed in the past week, attorneys say.

Dozens of foreclosure listings by ReconTrust Co., the foreclosure arm of Bank of America Corp., have disappeared from its website, attorneys say. A BofA spokeswoman declined comment late Friday.

Continue reading … Oregon Live

Brown Order –Barnett v.BAC Home Loan Servicing LP, Federal National Mortgage Association fka Fannie Mae, ReconTrust Co.

Burgett Case –Burgett v. MERS, et al.

EkersonTRO –Ekerson v. MERS, CitiMortgage Inc., et al

King_ruling –Rinegard-Guirma v. Bank of America, et al

McCoy –McCoy v. BNC Mortgage Inc., MERS, U.S. Bank, Finance America LLC, et al.

By David McLaughlin – Feb 17, 2011 4:37 PM ET

A Bank of America Corp. unit is breaking the law by foreclosing on homeowners in Utah because it doesn’t meet state requirements, the state attorney general’s office said in a federal appeals court case.

ReconTrust Co., a subsidiary of Bank of America, the biggest U.S. lender by assets, isn’t a member of the state bar or a title insurance company and is unqualified to carry out trustee foreclosures, Utah Attorney General Mark Shurtleff wrote in court papers filed yesterday with the U.S. Court of Appeals in Denver.

“ReconTrust Co. N.A. is a non-depository national bank initiating approximately 4,000 home foreclosures in Utah each year in violation of Utah law,” the attorney general’s office said.

The court filing was made in a homeowner’s lawsuit against ReconTrust and Bank of America.

“National banks must abide by state law,” said John Christian Barlow, an attorney for the homeowner, Peni Cox. “ReconTrust just wants to foreclose, period,” he said.

[read order below]

By David McLaughlin – Jan 25, 2011 7:19 PM ET

A Bank of America Corp. unit, ReconTrust Co. N.A., was ordered by a Nevada judge to temporarily stop foreclosures in the state that aren’t approved by a court order.

Judge Robert W. Lane in Nye County, Nevada, issued a preliminary ruling that blocks ReconTrust from conducting nonjudicial foreclosures until he holds a hearing Feb. 28 on whether to make the ban permanent, according to a Jan. 20 order provided by the court. The injunction was sought in a Nevada homeowner’s lawsuit against Bank of America and ReconTrust.

Stopping the foreclosures is necessary to prevent the “irreparable injury” that would result from “unlawful” seizure of the plaintiff’s home by ReconTrust Co., the judge wrote. The ruling applies to any real estate or personal property in Nevada.

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by Morgan Skinner, KCSG News

(Salt Lake City, UT) – US District Chief Judge Tena Campbell recused [Recusal order] herself in the class action lawsuit against ReconTrust and Bank of America (NYSE: “BAC”), Mortgage Electronic Registration Systems (“MERS”), Countrywide Home Loans, HSBC Bank (NYSE: “HSBC”), Wells Fargo Bank (NYSE: “WFC”), U.S. Bank (NYSE: “USB”), Bank of New York/Mellon (NYSE: “BK”), KeyBank (NYSE: “KEY”) filed in Utah federal court Friday, November 5, 2010, alleging violations of the, Fair Debt Collections Practices Act, Utah Pattern of Unlawful Activity Act (FDCPA), Unlawful Foreclosures, and Intentional Infliction of Emotional Distress.

Upon Judge Campbell recusal from the case [Class Action Complaint] it was sent to Judge Clark Waddoups who has the Peni Cox case pending in his court against ReconTrust and Bank of America. The case is also on appeal to the 10th Circuit Court in Denver, Colorado.

KCSG News has learned from court records filed Thursday that Judge Waddoups has recused himself. [Recusal order] Why did Judge Waddoups recuse himself in the class action matter? He didn’t recuse himself in the Peni Cox case pending in his court on the same issues against the same defendants, ReconTrust and Bank of America.

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Las Vegas: Attorney General Catherine Cortez Masto announced today that her office is filing a lawsuit against Bank of America Corporation, N.A., BAC Home Loans Servicing, LP, Recon Trust Company (“Bank of America”) for engaging in deceptive trade practices against Nevada homeowners.

The lawsuit, filed in the Eighth Judicial District of the State of Nevada, was triggered by consumer complaints and follows an extensive investigation into Bank of America’s alleged deceptive practices involving its residential mortgage servicing, particularly its loan modification and foreclosure practices.

The Complaint alleges that Bank of America is:
1)
Misleading consumers by promising to act upon requests for mortgage modifications within a specific period of time;
2)
Misleading consumers with false assurances that their homes would not be foreclosed while their requests for modifications were pending, but sending foreclosure notices, scheduling auction dates, and even selling consumers’ homes while they waited for decisions;
3)
Misrepresenting to consumers that they must be in default on their mortgages to be eligible for modifications when, in fact, current borrowers are eligible for assistance;
4)
Making false promises to consumers that their modifications would be made permanent if they successfully completed trial modification periods, but then failing to convert these modifications;
5)
Misleading consumers with inaccurate and deceptive reasons for denying their requests for modifications;
6)
Falsely notifying consumers or credit reporting agencies that consumers are in default when they are not;
7)
Misleading consumers with offers of modifications on one set of terms, but then providing them with agreements on different sets of terms, or misrepresenting that consumers have been approved for modifications.

Continue Below…

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E. Craig Smay #2985
174 E. South Temple
Salt Lake City, Utah 84111
ecslawyer@aol.com, cari@smaylaw.com
Telephone Number (801) 539-8515
Fax Number (801) 539-8544

John Christian Barlow
40 N 300 E #101
St. George UT 84771
jcb@JohnChristianBarlow.com
435-634-1200
Attorneys for Plaintiffs

IN THE UNITED STATES DISTRICT COURT, DISTRICT OF UTAH, CENTRAL DIVISION

JEREMY COLEMAN, DWAYNE WATSON, SAMUEL ADAMSON, ETHNA LYNCH,

Plaintiffs,

vs.

RECONTRUST COMPANY, N.A., MORTGAGE
ELECTRONIC REGISTRATION
SYSTEMS, INC., BANK OF AMERICA,
N.A. AS SUCCESSOR TO COUNTRYWIDE
HOME LOANS, INC., BAC HOME
LOAN SERVICING LP, HSBC BANK
USA, N.A., WELLS FARGO BANK, N.A.,
U.S. BANK N.A., BANK OF NEW YORK
MELLON, KEYBANK, N.A. and Does 1-
10, Defendants.

CLASS ACTION
COMPLAINT FOR VIOLATION OF
FAIR DEBT COLLECTION
PRACTICES ACT, UTAH
PATTERN OF UNLAWFUL
AUTHORITY ACT
JURY DEMANDED

Case No. 2:10-cv-02099-TC

Judge Tena Campbell

Plaintiffs Jeremy Coleman, Dwayne Watson, Samuel Adamson, and Ethna Lynch, individually and on behalf of others Similarly Situated (“Plaintiffs”) bring this action under the Fair Debt Collection Practices Act (“FDCPA”), 15 USC §§ 1692-1692p, and Utah state law, including, without limitation, §§ 76-10-1602, 76-10-1603, and 76-10-1605(1), (2), UCA (1953), and allege as follows:

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If youl recall my post Notice of Appeal Filed – Stay of Court Order to Vacate Injunction Stopping Bank of America Foreclosures in Utah Requested

I stated There is something not right here and I think the outcome might surprise us!

WELL HERE IT IS.

Reported by: Kelli O’Hara
Last Update: 1:29 am

SALT LAKE CITY, Utah (ABC 4 News) – “They’re foreclosing illegally here in Utah,” those were the words of St. George Attorney John Christian Barlow spoken in early June. Barlow at the time had appeared before a Federal Judge arguing that the Banking Giant, Bank of America, was foreclosing illegally in the State of Utah. The Southern Utah Attorney believed that because B.O.A was not a registered business or corporation in the state, they lacked authority to do business here.

Barlow had succeeded in getting a 5^th Circuit Court Judge to agree with him; as a result the judge imposed an injunction on all Bank of America foreclosures. Weeks later, the case went before a Federal Judge where B.O.A. argued that they were regulated by Federal Laws not State. Federal Judge Clark Waddoups heard case, and threw out the injunction therefore Bank of America’s foreclosure company: ReConTrust was allowed to foreclose once again.

After the decision, ABC4 got a tip about the case and started digging. Our tipster said that the Judge may have a conflict of interest in hearing the B.O.A. cases. Why? Because the Judge Waddoups old law firm represents Bank of America.

We checked into Waddoups background and the Federal Judge did work for Parr,Brown, Gee & Loveless for nearly 30 years. And Waddoups, as of 2008, drew a pension from the law firm. We placed a call to the firm, but they wouldn’t comment if the former firm Partner had ever handled B.O.A cases.

Continue reading …ABC4

RELATED ARTICLE BELOW:

_____________________________________

What does DJSP, Enterprises Newly Appointed Counsel have in common with PBC Judge Meenu Sasser?

My friends with the latest articles I posted…take note momentum is starting to build!

(Salt Lake City, UT) – The Bank of America’s motion for dismissal filed July 2, 2010 in US District Court of Utah may have opened the way for Judge Clark Waddoups to set aside his order halting foreclosures in Utah by ReconTrust Company and remand the case to state court. Attorneys John Christian Barlow and E. Craig Smay, in their plaintiff’s response filed Friday, July 8, 2010 say “the defendant’s motion to dismiss re-opens the issue of preemption of State law which previously arose in the analysis of the courts jurisdiction. There, the court analyzed and relied upon the wrong statute, producing an erroneous conclusion of preemption. That conclusion should now be corrected,” the attorneys said.

“The defendant’s motion to dismiss is based upon claims the plaintiff lacked a cause of action under Utah Code §16-10a-1501 and 57-1-21 addresses an issue not in dispute,” Barlow said. “ReconTrust Company is permitted to serve as trustee in Utah, but the company is still required to register and have offices in the state along with its competitor state banks, and may not foreclose non-judicially,” according to Barlow and Smay. “Bank of America’s motion to dismiss serves to more clearly show the federal court lacks jurisdiction to set aside the restraining order previously issued by the state court,” Barlow said. The Plaintiff filing cites the federal court’s own decision denying federal jurisdiction. (Jensen-ReconTrust)

The attorneys conclude “the motion by the defendant to dismiss must be denied and the prior order setting aside the state court injunction should be withdrawn and the matter remanded to the state court.”

While, the judge ponders his response to the filing, the plaintiff has moved the case to the 10th Circuit Court of Appeals in Denver (Appeal) The Bank of America has become the symbol of what’s wrong in America where homeowners (taxpayers) want less federal control and more accountability. The plaintiff Peni Cox has become a symbol of homeowners everywhere caught in the financial meltdown fighting faceless – paperless financial giants of Wall Street and their legal brain trusts.

Shareholders and mortgage investment portfolio managers are beginning to quietly caution banks about their foreclosure policies. Most of the financial institutions with foreclosures have received TARP TARP (Troubled Asset Relief Program) was designed to get so-called toxic assets off the books of major banks. These assets included mortgage-backed securities deemed impossible to value. Because banks could not buy and sell these securities, they were becoming increasingly illiquid, and a credit crunch began to emerge as lending between banks ground to a halt. TARP funds were utilized to purchase these assets, injecting banks with liquidity.

Barlow continues to champion his client’s rights contending remedies were taken away from her by faceless lenders who continue to overwhelm homeowners and the judicial system with motions and petitions as remedies instead of actually making a good-faith effort in face-to-face negotiations to help homeowners. “Mortgage lenders are required by law to be registered and have offices in the State of Utah to do business, that is unless you’re the Bank of America or one of their subsidiary companies which apparently are above the law in Utah,” Barlow said. “The Bank of America and other financial institutions, under the guise of mortgage lenders are trampling the rights of citizens,” he said.

Bank of America acquired the bankrupt Countrywide Home Loan portfolio in a stock deal June 3, 2009. And, according to the ReconTrust, the bank has over 1162 Utah homeowners in foreclosure as of July 10, 2010.

Next week KCSG News will report on Utah court cases in which the plaintiffs (homeowners) claim neither the lender, MERS (Mortgage Electronic Registration System), nor the Bank of America, nor any other defendant in the case, has any remaining interest in the mortgage promissory note bundled with other notes and sold as mortgage-backed securities or otherwise assigned and split from the Trust Deed. Last month the Florida Supreme Court issued a ruling protecting homeowners from losing their homes to foreclosure mills hired by the lenders to foreclose using bogus documents created for lenders in which the lender had no secured interest. Similar cases are now making there way through Utah courts.

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There is something not right here and I think the outcome might surprise us!

by Morgan Skinner, KCSG News

St. George, UT) – A Notice of Appeal to Federal Judge Clark Waddoups court order vacating an Injunction against Bank of America and its subsidiary ReconTrust Company halting all foreclosures in Utah was filed Friday, June 25, 2010 by St. George attorney John Christian Barlow.

Barlow told KCSG News he was “troubled by Court ruling but unrelenting in pursuit of redress for his client (Cox) and other homeowners who have become victims of mortgage lending gone mad.” Barlow said he has motioned the court to allow Cox’s complaint to include a “Class of Citizens” currently in foreclosure in Utah. Barlow contends his client’s rights to remedies were taken away from her by a faceless lender who continues to overwhelm homeowners and the judicial system with motions and petitions as a remedy instead of making a good-faith effort in face-to-face negotiations to help homeowners as the Utah legislature intended. The David and Goliath legal battle over federal versus states-citizens rights is headed to the 10th Circuit Court.

Judge Waddoups’ Memorandum of Explanation in support of vacating a statewide Preliminary Injunction halting all foreclosures by the Bank of America only served to raise more questions.

Some of the questions include:

1.) Why is the judge’s ruling at variance with his previous rulings this year as noted in a Letter to Judge Waddoups submitted to the court June 10th, 2010 by the Plaintiff’s counsel John Christian Barlow, Esq. and E. Craig Smay, Esq. and posted June 21, 2010 in the court docket, after the Ruling and Memorandum of Explanation.

2.) Why did Judge Waddoups essentially brush aside the Plaintiff’s pleading that included the Supreme Court decision Cuomo vs. Clearing House Association in which the Court said…“If a State chooses to pursue enforcement of its laws in court, its targets are protected by discovery and procedural rules” meaning a state has a right to enforce its own laws against national banks.

3.) Why hasn’t Judge Waddoups recused himself from all Bank of America or ReconTrust Company related cases since he was a senior partner in the law firm Parr, Waddoups, Brown, Gee & Loveless now Parr, Brown, Gee & Loveless that represented the Bank of America in Utah Fourth District Court, Case No. 070402786 before he took the bench. And, the law firm continues to represent the Bank of America and its subsidiaries. According to the Code of Conduct for US Judges, a judge should recuse himself when there may be a conflict of interest.

4.) Why shouldn’t Judge Waddoups recuse himself from any case in which his old law firm represents either the plaintiff or the defendant until he takes full distribution of his retirement fund with the law firm as disclosed in Judge Waddoups most recent Financial Disclosure Statement that shows he only took a partial distribution of his retirement from the firm’s 401K

“Bank of America acquired the bankrupt Countrywide Home Loan portfolio in a stock deal June 3, 2009. And, according to the ReconTrust website, the Bank of America has over 1113 Utah homeowners in foreclosure this month, and the numbers keep growing,” Barlow said.

The second part of the Plaintiff’s complaint has yet to be addressed. It alleges neither the lender, nor MERS*, nor Bank of America, nor any other Defendant, has any remaining interest in the mortgage promissory note. The note was bundled with other notes and sold as mortgage-backed securities or otherwise assigned and split from the Trust Deed. Barlow said he has begun a quiet title action and expects the court to adjudicate it according to the facts of evidence which will clearly demonstrate lenders bundling notes into securities and trading in the financial markets have created the underlying homeowner’s mortgage nightmare.

*MERS(Mortgage Electronic Registration System) is a process designed to simplify the way mortgage ownership and servicing rights are originated, sold and tracked created by the real estate finance industry. MERS eliminates the need to prepare and record assignments when trading residential and commercial mortgage loans as securities.

Via: 4ClosureFraud

(St. George, UT) June 5, 2010 – A court order issued by Fifth District Court Judge James L. Shumate May 22, 2010 in St. George, Utah has stopped all foreclosure proceedings in the State of Utah by Bank of America Corporation, ;

Recontrust Company, N.A; Home Loans Servicing, LP; Bank of America, FSB;www.envisionlawfirm.com. The Court Order if allowed to become permanent will force Bank of America and other mortgage companies with home loans in Utah to adhere to the Utah laws requiring lenders to register in the state and have offices where home owners can negotiate face-to-face with their lenders as the state lawmakers intended (Utah Code ‘ 57-1-21(1)(a)(i).). Telephone calls by KCSG News for comment to the law office of Bank of America counsel Sean D. Muntz and attorney Amir Shlesinger of Reed Smith, LLP, Los Angeles, CA and Richard Ensor, Esq. of Vantus Law Group, Salt Lake City, UT were not returned.

The lawsuit filed by John Christian Barlow, a former Weber State University student who graduated from Loyola University of Chicago and receive his law degree from one of the most distinguished private a law colleges in the nation, Willamette University founded in 1883 at Salem, Oregon has drawn the ire of the high brow B of A attorney and those on the case in the law firm of Reed Smith, LLP, the 15th largest law firm in the world.

Barlow said Bank of America claims because it’s a national chartered institution, state laws are trumped, or not applicable to the bank. That was before the case was brought before Judge Shumate who read the petition, supporting case history and the state statute asking for an injunctive relief hearing filed by Barlow. The Judge felt so strong about the case before him, he issued the preliminary injunction order without a hearing halting the foreclosure process. The attorney’s for Bank of America promptly filed to move the case to federal court to avoid having to deal with the Judge who is not unaccustomed to high profile cases and has a history of watching out for the “little people” and citizen’s rights.

The legal gamesmanship has begun with the case moved to federal court and Barlow’s motion filed to remand the case to Fifth District Court. Barlow said is only seems fair the Bank be required to play by the rules that every mortgage lender in Utah is required to adhere; Barlow said, “can you imagine the audacity of the Bank of America and other big mortgage lenders that took billions in bailout funds to help resolve the mortgage mess and the financial institutions now are profiting by kicking people out of them homes without due process under the law of the State of Utah.

Barlow said he believes his client’s rights to remedies were taken away from her by faceless lenders who continue to overwhelm home owners and the judicial system with motions and petitions as remedies instead of actually making a good-faith effort in face-to-face negotiations to help homeowners. “The law is clear in Utah,” said Barlow, “and Judge Shumate saw it clearly too. Mortgage lender are required by law to be registered and have offices in the State of Utah to do business, that is unless you’re the Bank of America or one of their subsidiary company’s who are above the law in Utah.”

Barlow said the Bank of America attorneys are working overtime filing motions to overwhelm him and the court. “They simply have no answer for violating the state statutes and they don’t want to incur the wrath of Judge Shumate because of the serious ramifications his finding could have on lenders in Utah and across the nation where Bank of America and other financial institutions, under the guise of a mortgage lender have trampled the rights of citizens,” he said.

“Bank of America took over the bankrupt Countrywide Home Loan portfolio June 3, 2009 in a stock deal that has over 1100 home owners in foreclosure in Utah this month alone, and the numbers keep growing,” Barlow said.

The second part of the motion, Barlow filed, claims that neither the lender, nor MERS*, nor Bank of America, nor any other Defendant, has any remaining interest in the mortgage Promissory Note. The note has been bundled with other notes and sold as mortgage-backed securities or otherwise assigned and split from the Trust Deed. When the note is split from the trust deed, “the note becomes, as a practical matter, unsecured.” Restatement (Third) of Property (Mortgages) § 5.4 cmt. a (1997). A person or entity only holding the trust deed suffers no default because only the Note holder is entitled to payment. Basically, “[t]he security is worthless in the hands of anyone except a person who has the right to enforce the obligation; it cannot be foreclosed or otherwise enforced.” Real Estate Finance Law (Fourth) § 5.27 (2002).

*MERS is a process that is designed to simplifies the way mortgage ownership and servicing rights are originated, sold and tracked. Created by the real estate finance industry, MERS eliminates the need to prepare and record assignments when trading residential and commercial mortgage loans. www.mersinc.org

May 25, 2010

A Montana Circuit Judge entered a preliminary injunction yesterday enjoining MERS, Recontrust, and Countrywide from undertaking any action to sell, encumber, or transfer the borrower’s property during the pendency of the borrower’s lawsuit challenging a non-judicial foreclosure. The Notice of Trustee’s Sale fraudulently represented that there was an “obligation owed to MERS” when there was never any such obligation, and there is no evidence of any lawful assignment of either the Note or the Deed of Trust from the original lender to anyone. None of the Defendants appeared for the hearing.

The borrower had previously obtained a Temporary Restraining Order which stopped the Trustee’s Sale. Yesterday’s ruling converted the TRO into a preliminary injunction for the duration of the litigation.

This is FDN’s second victory in Montana. The borrowers in both cases are represented by Jeff Barnes, Esq. (who personally appeared at the hearing yesterday and prepared the lawsuit, Motions, and legal memoranda), assisted by local Montana counsel Eric Hummel, Esq.

Jeff Barnes, Esq., www/ForeclosureDefenseNationwide.com