Steven J. Baum P.c. | FORECLOSURE FRAUD | by DinSFLA

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A Foreclosure Film in the Making Awaits Final Scene

A Foreclosure Film in the Making Awaits Final Scene


American Banker-

What do an insurance agent in Tennessee, a homemaker in Ohio, a private investigator from Wisconsin and a helicopter stunt pilot in Hollywood have in common?  Well, for one thing, they’ve all participated in some fashion in “Foreclosure Diaries,” the documentary that my company, Pacific Street Films, has been producing, in fits and starts, since 2006.

When work first started on the film, the original tag was “Follow the Money,” and the road seemed to lead towards a dark and confusing destination. There was all this talk in the industry about scads of money to be made in servicing “subprime” loans.  There were seminars, conferences, it seemed all the rage. 

[AMERICAN BANKER]

image: macgasm.net

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Bank of Am. v Lucido | NYSC Judge Spinner Slams BOA et al & are forever barred, foreclosed and prohibited from demanding, collecting or attempting to collect

Bank of Am. v Lucido | NYSC Judge Spinner Slams BOA et al & are forever barred, foreclosed and prohibited from demanding, collecting or attempting to collect


Decided on April 16, 2012

Supreme Court, Suffolk County

Bank of America N.A., Plaintiff

against

G. Lucido also known as GALINA LUCIDO, JOHN A. LUCIDO et. al., Defendants

2009-03769

Davidson Fink L.L.P.

Attorneys for Plaintiff

28 East Main Street

Rochester, New York 14614

John Lucido

Defendant Pro Se

46 Merrits Path

Rocky Point, New York 11778

Jeffrey Arlen Spinner, J.

Plaintiff commenced this action claiming foreclosure of a mortgage by filing its Notice of Pendency and Summons and Complaint with the Clerk of Suffolk County. The mortgage at issue was given by Defendants to MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC. As Nominee For FIRST FRANKLIN FINANCIAL CORP. on March 23, 2007 in the original principal amount of $ 494,000.00 and was recorded with the Clerk of Suffolk County in Liber 21524 of Mortgages at Page 751. It was given as collateral security for a simultaneously executed Note in the same amount, the same constituting a first lien encumbering premises known as 46 Merrits Path, Rocky Point, New York.

Sometime thereafter and through no fault of their own, Defendants defaulted upon their monthly installment payments due under the Note. It is undisputed that the principal balance owed to Plaintiff, as of the date of default, was and remains at $ 493,219.75. Following the [*2]commencement of this action, an initial settlement conference, as mandated by CPLR § 3408 was convened on June 2, 2009. Thereafter, seventeen additional or adjourned settlement conferences were held, each one a component part of a continuing albeit fruitless effort to resolve this matter. It was only upon the express directive of the Court that one of Plaintiff’s representatives travelled from Fort Worth, Texas to appear with a view toward some amicable resolution of this action. However, in derogation of the mandatory provisions of CPLR § 3408(c), no person ever appeared on Plaintiff’s behalf who was vested with any authority to settle or otherwise compromise the matter. Further delays were occasioned by serious illness having afflicted both of the Defendants as well as the unfortunate passing of Mrs. Lucido (Mr. Lucido requested that the matter be temporarily removed from the conference calendar because he was unable to move forward while attending to the care of his wife). In addition, Plaintiff’s former counsel, Steven J. Baum P.C., was discharged and the firm was thereafter disbanded.

Defendant JOHN LUCIDO has, in the past, been employed as a commercial mortgage broker. Though he was not involved professionally in the procurement of the loan at issue herein, he apparently enjoys a considerable degree expertise in the area of mortgage financing, which knowledge has been displayed to this Court on multiple occasions. Throughout the settlement conference process, Defendants had, on not less than three occasions in the presence of the Court, submitted the rather voluminous financial documentation demanded by Plaintiff, to be used in considering the initial request for a customary modification. At one point in time, Defendants were offered a so-called “trial modification” with no terms disclosed other than a monthly payment amount to be remitted. However, that offer was never accepted by Defendants because of Plaintiff’s steadfast and continued refusal to disclose any of its terms to them, including the interest rate as well as the manner in which their payments would be applied to the debt, a tactic that was strenuously defended by Plaintiff’s successor counsel as “general industry practice.”

At one of the early settlement conferences, Mr. Lucido informed the Court that the servicing of his loan had been transferred to one of Plaintiff’s wholly-owned subsidiaries and that they had embarked upon a print and internet advertising campaign wherein they were offering principal reductions in an apparent effort to help homeowners bring their delinquent loans current. They advertised basic requirements of a delinquency of over 60 days duration coupled with a principal balance in excess of 120% of the value of the property (as just one example of these blandishments by Plaintiff, see homeloanhelp.bankofamerica.com ). Based in large part upon this inducement, Mr. Lucido repeatedly raised the possibility of a principal reduction and when he was advised, in open court, that it would be “considered” by the bank, he obtained a third party evaluation of the Property, reflecting the fair market value to be $ 250,000.00. He thereupon prepared and submitted a written proposal requesting a principal reduction to $ 250,000.00, coupled with the immediate deposit with Plaintiff of $ 23,588.52, a sum equal to twelve months of principal, interest, taxes and insurance for it to hold in escrow to ensure his performance, a reduction in the interest rate to 4.50% (at that time, HAMP modifications were being offered with interest at 2%) and the immediate commencement of payments upon the new principal amount at the new interest rate. This written proposal was sent to Plaintiff prior to January 26, 2011 and by February 9, 2011 it had advised Defendant, by letter, that it had received his proposal and that the same was under consideration. [*3]

The conference was adjourned several more times until June 9, 2011. At that conference, prior counsel advised Defendant and the Court that Plaintiff was “unwilling” to reduce the principal and actually misrepresented to the Court that there had been “…thirteen conferences and Defendant has never submitted financials.” Prior counsel further misrepresented to the Court that Plaintiff did not offer any loan modification programs that included a principal reduction as a component. At that juncture, the Court warned counsel that if there was found to be a lack of good faith in the settlement conference proceedings, the Court would consider the imposition of financial sanctions upon Plaintiff. The Court adjourned the conference to July 13, 2011 with the directive that a representative appear on Plaintiff’s behalf to provide an explanation to the Court.

On July 13, 2011, the matter again appeared for conference with prior counsel present. Plaintiff’s representative informed the Court that the total debt owed by Defendants and secured by the Property (principal, interest, advances, etc.) now stood at $ 673,959.23 and further, affirmatively stated under oath that “This loan is part of a pooling of loans that entrust mortgage—in fact, securities and their pooling and servicing agreement does not allow us to reduce the principal balance.” When the Court called for production of the pooling and servicing agreement (the “PSA”), counsel stated that their office was just informed “today” of this claimed restriction and, in furtherance of Plaintiff’s position, stated that “We can’t consider a principal reduction. It’s prohibited by the PSA.” The bank representative did concede, however, that Defendants had been assiduously trying to work the matter out and that they had, in fact, been submitting financial documentation as requested by Plaintiff. The bank representative also asserted that she had an appraisal showing the property value to be $ 356,000.00 but when pressed for a copy, she stated that it was “tentative.” No such appraisal was ever provided to the Court (indeed Plaintiff never produced any written indicia of the value of the Property), thusleaving the Court to accept the market value of $ 250,000.00 as advanced by Defendants.

The matter was again adjourned while the Court waited patiently for production of a copy of the PSA. Despite the Court’s order, it was not produced on September 14, 2011 nor was it provided on October 19, 2011. However, upon some intense prodding by the Court, prior counsel generously offered to provide the Court only with what Plaintiff considered to be the “salient portions” of the PSA, despite the Court’s clear and unambiguous order that the entire agreement be provided. Once again, the PSA was not provided for the December 7, 2011 conference, necessitating yet another adjournment, this time to December 21, 2011. A document purporting to be a complete copy of the PSA, consisting of 258 pages in PDF form, was finally e-mailed by prior counsel to the Court late in the day on December 15, 2011 (some 155 days after the Court ordered its production), forcing the Court to continue the matter yet again, from December 21, 2011 to January 4, 2012, and advising the parties that there would be a hearing on that date to consider the entire matter, including the possible imposition of sanctions for a lack of good faith.

At the January 12, 2012 hearing, the office of Steven J. Baum P.C. (Plaintiff’s counsel of record) failed to appear. Instead, a gentleman appeared, stating that he was per diem counsel to Pulvers Pulvers & Thompson who, in turn, was of counsel to Davidson Cook who were now attorneys for Plaintiff, though no substitution of attorney had been filed. Counsel indicated his [*4]readiness to proceed with the matter. The same bank representative who had appeared the prior year was present for the hearing as was Defendant Mr. Lucido. At the hearing, it was quickly established that the “complete” PSA as provided to the Court excluded the schedules to which it referred as an integral part, which included a description of the mortgage loans which were to be part of the pool. Although Plaintiff’s representative claimed that she was in possession of the schedules, like the phantom appraisal, they were never provided to the Court. During questioning by the Court, Plaintiff’s representative conceded that Bank of America “…always had…” the PSA in their possession. This failure to disclose, coming upon the heels of Plaintiff’s 155 day delay in providing the PSA coupled with what appears to be the intent, by Plaintiff and its prior counsel, to deceive this Court by deciding to only provide what it deemed to be the “salient” portions of the PSA, leads this Court toward the conclusion that Plaintiff was not acting in good faith throughout the pendency of this matter.

Further examination of documents revealed that Plaintiff claimed standing by virtue of an Assignment from LaSalle Bank National Association acting as Trustee under the PSA that is at issue herein. That Assignment, clearly prepared by the law firm of Steven J. Baum P.C., was acknowledged on December 22, 2008 but expressly stated that it was “…effective as of March 30, 2007. The PSA deals with an entity denominated as “Merrill Lynch First Franklin Mortgage Trust, Mortgage Loan Asset-Backed Certificates, Series 2007-3.” Examination of the PSA reveals that it was consummated on May 1, 2007 (a fact that is reflected in the Assignment), which was the date on which it came into legal existence. The Assignment however expressly states that it became effective some 32 days prior to the existence of the PSA. Though questions were raised by the Court, this issue was not resolved, either by counsel or by Plaintiff.

The hearing went forward with Plaintiff vigorously asserting that the PSA absolutely prohibited any reduction of the principal. Upon pointed inquiry by the Court, the following colloquy transpired:

THE COURT: Where is it in that agreement that it states that principal reductions are absolutely prohibited?

BANK: Okay. I read through that here, and I don’t know something stating completely prohibited. It doesn’t come right out and say that portion.

THE COURT: That’s what was represented to the Court. Where does it say that? Give me a page.

BANK: I highlighted it.

BANK COUNSEL: I will read it for you.

BANK: Page 86 is what I had highlighted, and then on Page 90.

BANK COUNSEL: There are provisions in the PSA permitting—

THE COURT: You said Page 86?

BANK COUNSEL: 86, it is section 301, servicer to service mortgage loans. The sentence starting with “notwithstanding” approximately fifteen lines down.

THE COURT: All right. This refers to servicer not engaging in any conduct which would essentially cause the REMIC, the Real Estate Mortgage Investment Conduit, to fail to qualify as a REMIC or to result in the imposition of certain taxes under the Internal Revenue Code.

BANK COUNSEL: Correct.

THE COURT: Where does it say that a principal reduction is prohibited?

BANK COUNSEL: What this PSA document does state is that there are provisions that can [*5]prohibit the forgiveness of principal or the reduction of principal, but there are other provisions, specifically Page 90, that put it within the discretion of the servicer to recommend a principal reduction which must be signed off on by the investor.

MR. LUCIDO: Where?

BANK COUNSEL: It begins with “notwithstanding Clause 2 above, in the event that mortgage loan is in default.”

MR. LUCIDO: Where is this? Can you highlight that? Page 90? Okay, I see it. This actually allows for it.

THE COURT: This seems to permit—

BANK COUNSEL: Correct, and that’s what we are trying to tell the Court here. There are provisions that prohibit but there are provisions that do allow the servicer to recommend the reduction of principal. But it must be accepted by the investor. It must be in the best interest of the—

THE COURT: But that’s not what has been represented to this Court by the bank and their prior counsel. In fact, prior counsel explicitly represented to this Court on more than one occasion that it is absolutely prohibited under these documents, under this PSA. That is what has been represented to this Court.

BANK COUNSEL: We do submit that it might have been due to some of the provisions prohibiting principal reduction. They would have thought that those provisions may have been triggered. It might have been the opinion of the Court that they have not been.

THE COURT: Where are the express prohibitions, the ones that the bank relies on that they used here in telling this Court that they will not consider a principal reduction because it is absolutely prohibited under the terms of the PSA?

BANK COUNSEL: Under the initial clause, which is 13 lines down from Section 3.01, servicer of service mortgage loan.

THE COURT: Show me where else that it absolutely prohibits a principal reduction? Is there anywhere else in there that you can find?

BANK COUNSEL: We have not found an absolute bar, a prohibition of forgiving or reducing. It is our position, and we submit to this Court, that there are circumstances that if occurring, which is also the signing off of the client, that a principal reduction could occur under certain circumstances.

Subsequent to the foregoing colloquy and without any further concession to the Court’s line of inquiry, counsel advised the Court that an offer was now being made to Defendant, stating that “We are going above and beyond what—we are bending the rules of our underwriting. We are attempting to put together a product here that is not generally offered to the rest of the populace, the rest of the clientele, a 43.5 year product at 2% without the financials.” When the Court inquired as to the reason for Plaintiff’s abrupt about-face, counsel attempted to deflect attention from Plaintiff, instead intimating that the Court was, in effect, coercing a resolution by having “…held the bank’s feet to the fire…” and further mis-stating the facts by incorrectly asserting that “…This Court was not willing to hear it after learning that there was not a principal reduction.” It must be pointed out that in this matter as in all other foreclosure matters assigned to this Part, the Court has only attempted to fulfill its statutory responsibilities and has not, in any manner forced, coerced nor compelled any particular resolution. It is also important to note here that counsel advised the Court that Plaintiff had a new BPO showing a value of $ 346,000.00 and although requested by the Court, this BPO, like the phantom appraisal referred to on July 13, 2011, was never produced.

Based upon the foregoing factual scenario, the Court has serious and substantial questions as to whether or not Plaintiff and its prior counsel of record have acted in good faith in this [*6]matter. By reason of the lengthy delays herein, interest has been accumulating on the debt along with sums that may be due for advances for property taxes and insurance, to say nothing of Plaintiff’s claimed counsel fees (which are, of course, subject to review by the Court). While it is important to note that the Court has grave reservations related to the actions in this matter of Steven J. Baum P.C., Plaintiff’s former counsel of record, the Court hastens to add that it has absolutely no such issues with either Henry P. DiStefano Esq. or Alicia Menechino Esq. (in fact, the appearances covered by these two most excellent attorneys were the only ones upon which the Court was able to obtain a straight answer about anything on the Plaintiff’s case herein).

In 2008, New York’s Assembly and Senate enacted Chapter 472 of the Laws of 2008 which constituted a sweeping reform of the laws governing sub-prime, high cost and non-traditional home loans. Included as part and parcel of that legislation was the newly enacted CPLR § 3408 which required a mandatory settlement conference in an action to foreclose such a mortgage. Since that enactment, this Court, sitting first as Suffolk County’s Residential Mortgage Foreclosure Conference Part and thereafter as an I.A.S. Part, has mandated that the parties to such an action act and negotiate in good faith. Indeed, in December of 2009, both the Assembly and the Senate amended CPLR § 3408 by way of Chapter 507 of the Laws of 2009, which, among other things, added a requirement that the parties act and negotiate in good faith (see CPLR § 3408(f) which states that “Both the plaintiff and the defendant shall negotiate in good faith to reach a mutually agreeable resolution, including a loan modification, if possible.”). This statutory scheme is further buttressed and implemented by the provisions of The Uniform Rules For The Trial Courts, 22 NYCRR § 202.12-a. Indeed, that Rule vests the Court with broad powers to assist the parties in reaching a settlement of their differences, stating, in pertinent part, that “…The court may also use the conference for whatever other purposes the court deems appropriate,” 22 NYCRR § 202.12-a(c)(2). That Rule further imposes upon the Court the duty to be certain that all parties act in compliance therewith, stating that “…The court shall ensure that each party fulfills its obligation to negotiate in good faith…” 22 NYCRR § 202.12-a(c)(4). For this Court to do anything less would be a serious derogation of its statutory responsibilities and would do a great dis-service to the public that it is obligated to serve..

Since an action to foreclose a mortgage is clearly a suit in equity, Jamaica Savings Bank v. M.S. Investing Co. 274 NY 215 (1937), all of the rules and tenets of equity are fully applicable to the proceeding, including the rules governing punitive or exemplary damages, I.H.P. Corp. v. 210 Central Park South Corp. 12 NY2d 329 (1963). In the timeless words of Judge Benjamin Cardozo “The whole body of principles, whether of law or of equity, bearing on the case, becomes the reservoir drawn upon by the court in enlightening its judgment” Susquehannah Steamship Co. Inc. v. A.O. Andersen & Co. Inc. 239 NY 289 at 294 (1925). In a suit in equity, the Court is vested with jurisdiction to do that which ought to be done. While the formal distinctions between an action at law and a suit in equity have long since been abolished in New York (see CPLR 103, David Dudley Field Code of 1848 §§ 2, 3, 4, 69), the Supreme Court, as New York’s trial court of general jurisdiction, is nevertheless vested with equity jurisdiction and the distinct rules governing the application of the principles of equity are still very much applicable, Carroll v. Bullock 207 NY 567 (1913).

While the Court understands that the instruments upon which a mortgage foreclosure [*7]action is based are contractual in nature and, understanding that “[s]tability of contract obligations must not be undermined by judicial sympathy” Graf v. Hope Building Corp. 254 NY 1 at 4 (1930), it is equally true, as decreed in Noyes v. Anderson 124 NY 175 at 179 (1891) that “a party having a legal right shall not be permitted to avail himself of it for the purposes of injustice or oppression.” Thus, equity will not intervene on behalf of one who acts in an unjust, unconscionable or egregious manner, York v. Searles 97 AD 331 (2nd Dept. 1904), aff’d 189 NY 573 (1907). This Court cannot, and will not, countenance a lack of good faith in the proceedings that are brought before it, especially where blatant and repeated misrepresentations of fact are advanced, neither will it permit equitable relief to lie in favor of one who so flagrantly demonstrates such obvious bad faith.

In those very rare instances where the conduct of a party is unconscionable, shocking or egregious, a Court of equity is vested with the power to award exemplary damages. Exemplary damages may lie in a situation where it is necessary to both effectuate some punishment and to deter the offending party from engaging in such reprehensible conduct in the future. Such an award may also be made to address, as so clearly and succinctly enunciated by our Court of Appeals in Home Insurance Co. v. American Home Products Corp. 75 NY2d 196, 550 NE 2d 930, 551 NYS 2d 481 (1989) “…gross misbehavior for the good of the public…on the ground of public policy”. Indeed, exemplary damages are intended to have a deterrent effect upon conduct which is unconscionable, egregious, deliberate and inequitable, I.H.P. Corp. v. 210 Central Park South Corp. 12 NY2d 329, 189 NE 2d 812, 239 NYS 2d 547 (1963).

In the matter that is sub judice, the record unequivocally demonstrates that Plaintiff, through its deliberate and contumacious conduct, has failed to act in good faith, although required by statute to do so. This Court is driven to the inescapable conclusion that Plaintiff has deliberately acted in bad faith over the preceding thirty four months. Through its repeated and persistent failure and refusal to comply with the lawful orders of the Court including those which directed production of documentation that was essential to address critical issues in the present matter, it has repeatedly caused to be put forth material mis-statements of fact which appear to have been calculated to deceive the Court and has delayed these proceedings without good cause, thereby needlessly increasing the amount owed upon the mortgage debt, to say nothing of the needless waste of the Court’s time and resources, as well as those of Defendant. In short, the conduct of Plaintiff in this matter has been over-reaching, willful and unconscionable, is wholly devoid of even so much as a scintilla of good faith and cannot be countenanced by this Court.

Under the unique circumstances of this matter, the Court determines that it is fair and equitable that Plaintiff be forever barred, precluded, prohibited and foreclosed of and from collecting any of the claimed interest accrued on the loan between the date of default and the date of this Order; that Plaintiff be barred and prohibited from recovering any claimed legal fees and expenses; and further, that the amount due Plaintiff under the Note and Mortgage herein be determined at this time to be no more than the principal balance of $ 493,219.75, exclusive of advances for property taxes and property insurance. The Court also determines that under the circumstances herein, the imposition of exemplary damages upon Plaintiff is equitable, necessary and appropriate, both in light of Plaintiff’s shocking and deliberate bad faith conduct as well as to serve as an appropriate deterrent to any future outrageous, improper and wrongful conduct. The Court hereby fixes and determines [*8]the amount of exemplary damages in the sum of $ 200,000.00, recoverable by Defendants from Plaintiff in the nature of a principal reduction upon the mortgage sought to be foreclosed by Plaintiff.

For all of the foregoing reasons, it is, therefore

ORDERED , ADJUDGED and DECREED that Plaintiff, its successors, assigns and others are forever barred, foreclosed and prohibited from demanding, collecting or attempting to collect, directly or indirectly, any and all of the sums secured by the mortgage under foreclosure herein designated or denominated as interest, attorney’s fees, legal fees, costs, disbursements or any sums other than the principal balance as well as advances for property taxes and property insurance if any, that may have accrued from the date of default up to the date of this Order; and it is further

ORDERED, ADJUDGED and DECREED that the debt due Plaintiff under the Note and Mortgage under foreclosure in this action be fixed at $ 493,219.75, exclusive of any sums advanced for property taxes or property insurance; and it is further

ORDERED, ADJUDGED and DECREED that Defendant JOHN LUCIDO be and is hereby awarded exemplary damages as against Plaintiff in the amount of $ 200,000.00 to abide the event; and it is further

ORDERED, ADJUDGED and DECREED that the foregoing award of $ 200,000.00 in exemplary damages shall be and is hereby applied as a credit against the principal balance of the mortgage under foreclosure herein, amending and reducing the same to $ 293,219.75.

This shall constitute the Decision, Judgment and Order of the Court.

Dated: April 16, 2012

Riverhead, New York

E N T E R:

______________________________________

Jeffrey Arlen Spinner, J.S.C.

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Steven J. Baum settles with NY AG Schneiderman; will pay $4M

Steven J. Baum settles with NY AG Schneiderman; will pay $4M


What about the rest? This is an insult!

Update: Pillar Processing is also part of this settlement.

Buffalo Business First-

The case of embattled foreclosure attorney Steven Baum has taken another turn as the Amherst attorney reached a settlement with the New York State Attorney General over charges his firm mishandled foreclosure filings statewide over many years.

Under terms of the agreement, Baum has agreed not to handle mortgages for two years and will pay a penalty of $4 million.

The deal with Attorney General Eric Schneiderman’s office comes five month after the firm settled with the United States Attorney for the Southern District and paid $2 million while agreeing to drastically overhaul its business practices.

[BUFFALO BUSINESS FIRST]

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NEW YORK CONTINUES ASSAULT ON MERS

NEW YORK CONTINUES ASSAULT ON MERS


By Jonathan C. Cross and Stacey Trimmer

New York government officials are continuing their assault against foreclosure actions where Mortgage Electronic Registration Systems, Inc. (“MERS”) was the assignee of the mortgage, and challenges to foreclosures involving MERS are increasingly gaining traction in New York courts. Recently, the New York State Attorney General filed a complaint against MERS and several banks alleging fraud and deception in foreclosure proceedings. People v. JPMorgan Chase Bank N.A., No. 2012/2768 (N.Y. Sup. Ct. Feb. 3, 2012). In addition, three New York trial courts have decided motions involving standing and other issues in such actions. CIT Group/Consumer Fin., Inc. v. Platt, 33 Misc. 3d 1231(A) (N.Y. Sup. Ct. 2011); U.S. Bank N.A. v. Bressler, 33 Misc. 3d 1231(A) (N.Y. Sup. Ct. 2011); Bank of New York Mellon v. Martinez, 33 Misc. 3d 1215(A) (N.Y. Sup. Ct. 2011). Two courts ruled against the foreclosing banks, finding they did not have standing to foreclose where MERS assigned a mortgage without express authority to do so or sufficient documentation evidencing that the note was also transferred. Although the third court dismissed a lack of standing defense, it did so solely for procedural reasons.

Read More Beginning At Page 16

[CHADBOURNE]

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RePOST: U.S. BANK v. BRESSLER | NYSC “ASMT from MERS is defective, as it had no right, authority to assign the mortgage or the note”

RePOST: U.S. BANK v. BRESSLER | NYSC “ASMT from MERS is defective, as it had no right, authority to assign the mortgage or the note”



Decided on December 7, 2011

Supreme Court, Kings County

 

U.S. Bank National Association, AS TRUSTEE FOR SG MORTGAGE SECURITIES ASSET BACKED CERTIFICATES, SERIES 2006-FRE2, Plaintiff,

against

Alan Bressler, CCU LLC, MERS, INC. ET AL, Defendants.

33920/08

Debra Silber, J.

Recitation, as required by CPLR 2219(a), of the papers considered in the review of plaintiff’s motion for summary judgment and for the appointment of a Referee to compute in this foreclosure action, and defendant’s cross-motion to dismiss.

PapersNumbered

Notice of Motion and Exhibits Annexed ……………………………….1-12

Cross-motion and Exhibits Annexed ……………………………………13- 20

Answering Affidavits …………………………………………………………21-30

Reply Affidavits ………………………………………………………………..

Other:

Upon the foregoing cited papers, the Decision/Order on this application is as follows:

Plaintiff’s motion for summary judgment and the appointment of a referee to compute in this foreclosure action concerning 1477 East 32nd Street, Brooklyn, NY, 11234, Block 7694, Lot 85, is denied and defendant mortgagor’s motion to dismiss the complaint for lack of standing is granted, for the reasons set forth herein.

Defendant Alan Bressler alleges in his Answer to the Complaint that the plaintiff lacks standing to bring this action. In response to the plaintiff’s motion for summary judgment, defendant cross moves to dismiss the foreclosure action on the grounds that plaintiff lacks standing to bring this action. The court finds that defendant is correct, and as such, the action must be dismissed.

The mortgage in question was issued by Fremont Investment and Loan on May 4, 2006. The loan states “for purposes of recording, MERS is the mortgagee of record.” The tortured history of MERS is described in Bank of NY v. Silverberg, 2011 NY Slip Op 5002, 86 AD3d 274 (2nd Dept), and need not be repeated. On December 18, 2008, an Assignment of Mortgage was executed, and subsequently recorded, which assigns the mortgage and not the note, and assigns it from MERS to plaintiff. First, the assignment of a mortgage without the note is defective as the transfer of the mortgage without the debt is a nullity. In a decision citing Silverberg, the court said “an assignment of the mortgage without assignment of the underlying note or bond is a nullity” Citimortgage, Inc. v Stosel, 2011 NY Slip Op 8319 (2nd Dept) citing U.S. Bank, N.A. v [*2]Collymore, 68 AD3d at 754; see Bank of NY v Silverberg, 86 AD3d 274, 280, 926 N.Y.S.2d 532.

Secondly, an assignment from MERS to plaintiff is defective, as MERS had no right or authority to assign the mortgage or the note. Bank of NY v Silverberg, supra. “The plaintiff, which merely stepped into the shoes of MERS, its assignor, and gained only that to which its assignor was entitled . . . did not acquire the power to foreclose by way of the

. . . assignment.” Id.

It must also be noted that not only did MERS lack the power and authority to execute the assignment on behalf of Fremont Investment and Loan on December 18, 2008, but Fremont did not exist any longer on that date, as it was first subjected to a cease and desist order from the FDIC and then went into Bankruptcy. Then, its assets were apparently sold sometime in 2010 in a Chapter 11 Bankruptcy proceeding, which started in the summer of 2008, to Signature Group Holdings Inc.[FN1]

Further, it must be noted that the execution of an Assignment of Mortgage by MERS is barred by the Settlement Agreement between the US Attorney’s Office on behalf of the United States of America and the Office of Steven J. Baum P.C. and Pillar Processing, LLC, dated October 6, 2011, which states at paragraph 14 that “Baum shall no longer permit anyone employed by or contracted by Baum to execute any assignment of a mortgage as an officer, director, employee, agent or other representative of MERSCORP, Inc., and/or Mortgage Electronic Registration Systems, Inc.” The office of Mr. Baum was the attorney for the plaintiff when this matter was commenced, the assignment at issue is stamped “Pillar Processing LLC” and is signed on behalf of MERS by Elpiniki M. Bechakas, an attorney in the office of Steven J. Baum, according to the public internet attorney registration website maintained by the State of New York.

To the extent that plaintiff’s counsel opposes the defendant’s motion to dismiss with various affirmations of counsel, including one that states that the Note was indeed also assigned, and annexes (Exhibit B) a photocopy of a document alleged to be an assignment of the note, which is merely a blank piece of paper that states “Pay to the order of US Bank National Association as Trustee, without recourse,” and is undated and signed by “Michael Koch, Vice President, Fremont Investment and Loan,” this is insufficient. Ms. Jones, Vice President for Loan Documentation for Wells Fargo Bank N.A., states in her affidavit (Paragraph 5) “the Note was endorsed and was physically delivered to Wells Fargo/ASC as servicing agent and custodian for US Bank prior to the commencement of this action . . . Thus, Wells Fargo’s records specifically reflect that, it was in physical possession of the endorsed note prior to the commencement of this action.” The language in the affidavit indicates that the loan was assigned and transferred to plaintiff while Fremont Investment & Loan was still in existence, in July of 2006, but this is the only indication of this fact, and does not indicate delivery to plaintiff, but merely alleging delivery to plaintiff’s agent for servicing without any supporting documentation. Ms Jones provides no date of the alleged delivery, and as discussed above, at the time of the alleged delivery, Fremont may not have existed, or may have been subject to the restrictions on transfer in the proceedings in Bankruptcy Court, or may have been subject to the FDIC’s cease [*3]and desist order. This cannot be ascertained without a date.

The affirmation of counsel that indicates that the current loan servicer has confirmed that the information in the complaint is accurate is also insufficient, as there is no indication that the alleged servicer is actually the servicer for this loan. The pooling and servicing agreement is between plaintiff and the servicer. There is nothing in the papers from Signature Group Holdings, Inc., the entity that now appears to own the Note and Mortgage, which confirms that they too have retained Wells Fargo as servicer for this loan.

In conclusion, plaintiff has failed to make out a prima facie case for summary judgment due to the defects in the documentation in their motion, described above. The defendant has made out a prima facie case for dismissal on the grounds that plaintiff lacked standing at the time the action was commenced, and may in fact still lack standing, which plaintiff has not overcome with any documentation, in admissible form or not, to prevent dismissal of the complaint.

This shall constitute the Decision and Order of the Court.

Dated: December 7, 2011

E N T E R :

Hon. Debra Silber A.J.S.C.

Footnotes

Footnote 1:http://nationalmortgageprofessional.com/news18108/former-sub-prime-lender-fremont-exits-bankruptcy-and-re-emerges-signature-group-holdings

[ipaper docId=75268698 access_key=key-11yt6778nbw437v3l28w height=600 width=600 /]

 

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Baum Fraudclosure Mill Leaves NY Homewrecked

Baum Fraudclosure Mill Leaves NY Homewrecked


AND that must be his attorney Vincent Doyle, President of the NY State Bar with him?

Lohud-

New York’s largest foreclosure firm, which once handled thousands of cases in the Lower Hudson Valley, will officially close Monday, but it has left a trail of questions and frustrated property owners caught in legal limbo.

The Steven J. Baum PC law firm, based in Amherst, N.Y., originally was retained for more than 600 foreclosure cases that remain active in Westchester, Rockland and Putnam. In all, Baum’s firm has handled more than 4,000 cases in the three-county region since 1999, court records show.

But last year, the firm announced its official closing, scheduled for Feb. 20, after it came under scrutiny from state and federal agencies for “robo-signing,” or mass producing foreclosure documents without verifying whether they were accurate.

[LOHUD]

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SPIN OFF? | Foreclosure and ‘Home Retention’: a New Firm by Ex-Baum Lawyers, Michigan’s Linda Orlans

SPIN OFF? | Foreclosure and ‘Home Retention’: a New Firm by Ex-Baum Lawyers, Michigan’s Linda Orlans


WSJ-

Two attorneys from one of New York’s largest — and most notorious –foreclosure firms have set up their own shop in suburban Buffalo with 18 attorneys and counting, and they have plans for a downstate satellite office on Long Island.

Steven J. Baum PC shut its doors in November, following a rocky half year that included probes of how the firm handled foreclosures by New York State Attorney General Eric T. Schneiderman and the U.S. Attorney’s Office for the Southern District of New York.

The likely death knell: a New York Times column that mentioned a Halloween party where some firm employees came dressed as foreclosed-upon homeowners. (See our handy timeline here)

Now two former Baum lawyers, Adam Gross and Amy Polowy, have teamed up with another attorney, Linda Orlans, of Michigan, to form Gross, Polowy & Orlans LLC. The Buffalo News has the full report from upstate here.

[WALL STREET JOURNAL]

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Former Union Lawyer Currently Working At Steven J. Baum Law Firm Accused of Claiming $100K in Fake CLE Expenses

Former Union Lawyer Currently Working At Steven J. Baum Law Firm Accused of Claiming $100K in Fake CLE Expenses


A former general counsel for a Teamsters union has been accused of collecting $211,000 by submitting false expense reports for bogus CLE classes, law books never purchased and shipping at a UPS store that doesn’t exist.

ABA Journal-

Federal prosecutors in Manhattan announced the indictment of Amherst, N.Y., lawyer Kevin Clor on Wednesday, report the Buffalo News, the Associated Press, the New York Post and Thomson Reuters News & Insight. Clor, 40, currently works at the mortgage law firm of Steven J. Baum, according to Thomson Reuters. The law firm is closing after it was barred from doing work for Fannie Mae and Freddie Mac.

[ABA JOURNAL]

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Foreclosure king’s unemployment mill

Foreclosure king’s unemployment mill


Not all is lost…you can still catch him in a rare court room appearance this coming Jan 24th @ 12pm in Poughkeepsie!

NYPost-

He’s a one-person, countywide economic disaster.

Steven J. Baum, whose Buffalo-area home-foreclosure mill is slated to close next month under pressure, could move the county unemployment rate up by nearly two-tenths of a percentage point all by himself.

Nearly 700 workers — just under 600 from Pillar Processing, a document processing firm he started years ago, and about 90 lawyers from his firm — will be out of a job when Baum’s firm shuts its doors.

The Baum-fueled pink slips could boost the jobless rate in Buffalo’s Erie County area to nearly 7.4 percent from 7.2 percent.

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Why is the President of The NY State Bar Vincent E. Doyle representing Steven J. Baum? Baum Ordered to personally appear 1/24/2012 at 12:00 PM in Poughkeepsie

Why is the President of The NY State Bar Vincent E. Doyle representing Steven J. Baum? Baum Ordered to personally appear 1/24/2012 at 12:00 PM in Poughkeepsie


Well, I for one am not surprised but isn’t the New York State Bar Association suppose to uphold Truth, Justice and Ethics? Hmm…

Now, here’s the best part, if you can recall the article the New York Post wrote about the Judge that gave NY foreclosure king the Baum’s rush?

Here’s an excerpt:

Doc# 64 Notice of Adjournment of Hearing Re: AMENDED Order to Show Cause ordering Mr. Steven J. Baum, Esq. personally appear To SHOW CAUSE why an Order should not be entered holding him in contempt of the standing General Order M-364 of this Court. Why he should not be sanctioned pursuant Federal Rule of Bankruptcy Procedure 9011 and 28 U.S.C. 1927 and the inherent powers of this Court to control and manage its docket; Failing to participate in loss mitigation in good faith, failing to turn over files, unreasonably, and vexatiously multiplying proceedings; Hearing held and adjourned to 1/24/2012 at 12:00 PM at Poughkeepsie Office – 355 Main Street (LaChappelle, Jennifer). Document #: 64

and last but not least Doc# 65

Doc# 65 Notice of Adjournment of Hearing Re: Declaration in Opposition to the Order to Show Cause Directing Attorney to Appear filed by Vincent E. Doyle on behalf of Steven J. Baum; Hearing held and adjourned to 1/24/2012 at 12:00 PM at Poughkeepsie Office – 355 Main Street (LaChappelle, Jennifer). Document #: 65

[ipaper docId=78824258 access_key=key-ol6lmtcyvl4lcybxgpp height=600 width=600 /]

image:NYPost

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Judge gives NY foreclosure king the Baum’s rush

Judge gives NY foreclosure king the Baum’s rush


What’s really disturbing is all the fraudulent paperwork they push through the courts and filed with the counties …no one seems to care. If a defense attorney or a regular Joe was to pull this shit, would they have the same treatment?

I DON’T THINK SO!


New York Post-

Take that, Steven Baum!

The 50-year-old lawyer, who owns New York’s largest home-foreclosure mill, made a rare appearance in a courtroom yesterday — and was promptly ripped by a Bankruptcy Court judge frustrated by his firm’s sloppy work.

Baum, whose eponymous firm has filed more than 25,000 foreclosure actions across the state over the past three years — many of which have been attacked for containing bogus documents — was lectured by Judge Cecilia Morris to correct his way of practicing law.

“How many times do I have to tell you, you didn’t do it right,” Morris said during the afternoon hearing. “Do you not understand ‘do it right’?” she asked Baum.

[NEW YORK POST]

image: NYPost

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U.S. Bank Natl. Assoc. v Murillo | NYSC Judge Winslow Vacates Judgment “Sewer Service, No Process Records = Null & Void Service”

U.S. Bank Natl. Assoc. v Murillo | NYSC Judge Winslow Vacates Judgment “Sewer Service, No Process Records = Null & Void Service”


SUPREME COURT – STATE OF NEW YORK

U.S. BANK NATIONAL ASSOCIATION, AS
TRUSTEE THE STRUCTURED ASSET INVESTMENT
LOAN 2005-10,
Plaintiff,

-against-

SOLEDAD MURILLO, LUIS DUQUE, BANK
UNITED, FSB,
Defendants.

EXCERPTS:

The process server, Gary Cardi, testified that he was a six-year “self employed”
former Police Officer, and that he received service assignments from A&J Process
Service, which was located on the same floor, at the same address, as the local business
office of plaintiff’s counsel , Steven J. Baum, PC. Mr. Cardi stated that on April 5, 2008
at approximately 11 :30 a. , he served the Summons and Complaint upon Soledad Murilo
personally pursuant to CPLR 308(1) and upon the co-mortgagor Luis Duque by
substituted service pursuant to CPLR 308(2). According to Mr. Cardi, service was made
at defendants ‘ home, 934 Southern Drive , Franklin Square, New York, with additional
mailings to the same address.

[…]

In response, Mr. Spinell argued, essentially, that the failure to keep or produce
records is of no consequence. “Since Nassau County, as I am aware of, does not require a
process server to be licensed, the process server cannot be mandated or penalized for
failng to maintain records required of licensed process servers. As a matter of law, failure
to keep records shall not automatically void purported service and this can be found in the
Appellate Division case Feierstein versus Mullan under 120 Misc2d 574, 467 NYS2d 478
Appellate Term 1983.

Mr. Spinell is wrong. Article 8 and Article 8-A of the General Business Law
govern the duties of process servers. GBL Artcle 8 applies to all process servers (who
meet the statutory definition), and GBL Article 8-A (not applicable here) applies to all
process servers in eities having a population of one milion or more. Under GBL Article
, a process server is defined as a person, other than an attorney or a par to an action
acting on his own behalf, who (a) derives income from the service of papers in an action;
(b) has effected service in five or more actions or proceedings in the twelve month
period immediately preceding the service in question. GBL ~89-t. The definition does not
distinguish between licensed or unlicensed process servers. Thus, even if Nassau County
does not presently require a process server to be licensed, all process servers are subject to
the State s record keeping mandate, and may be penalized for non-compliance. GBL ~
89-u requires each process server to maintain a legible record of all service made by him
as prescribed by that section, and specifies the information required in the log. Compliance
with GBL ~89-u is subject to enforcement by the attorney general, and civil penalties may
be imposed. GBL 89-v. (The licensing requirement, imposed upon process servers by
local ordinance, mayor may not coincide with the more stringent statutory requirements
applicable to process servers in cities having a population of one milion or more. See
GBL Article 8-A; GBL 89-cc.

Mr. Spinellj’ s legal argument – that the failure to maintain records does not void
purported service — is invalid. The case cited by Mr. Spinell, a 1983 decision of the
Supreme Court, Appellate Term, First Deparment, is neither controllng nor relevant.
That case held that non-compliance with the licensing provisions of the New York City
Administrative Code was not grounds for dismissal.

See Feierstein v. Mullan, 120
Misc.2d 574. The Feierstein case did not deal with the record-keeping requirements of
GBL Article 8 or Article 8-A. Mr. Spinell has not cited, and the Court’ s own research
has not revealed, any authority for the proposition proffered by Mr. Spinell, nor any
controllng authority on the issue at bar.

This Court holds – seemingly for the first time – that the failure, at a traverse
hearing, to produc( records kept in accordance with the requirements of GBL 89-u may
result in dismissal of the action. The Court adopts the reasoning articulated by its
companion court in First Commercial Bank of Memphis v. Ndiaye, 189 Misc.2d 523
(Sup. Ct., Queens Co., 2001). See also Inter-Ocean Realty Assoc. v. JSA Realty Corp.,
152 Misc.2d 901 (Civ. Ct., NY County, 1991). In First Commercial Bank, a foreclosure
action, the licensed process server produced a computer-generated log book at a traverse
hearing. The Court found that this method of record-keeping failed to comply with the
precise requirements of GBL 89-cc and local regulations applicable to licensed process
servers in New York City. The Court noted that the purpose of these record-keeping
requirements was ‘C combat the continuing problem of process serving abuse, known as
sewer service,” and to ensure the reliabilty of the records presented in support of
jurisdiction. Accordingly, the Court held that the testimony of the process server who
failed to keep records in accordance with the statutory requirements could not be credited.
This failure to keep appropriate records was considered a failure to comply with the rules
of the court regarding the production of records at a traverse hearing.
See 22 NYCRR ~20S.29. The Court held that, absent a showing of good cause for non-compliance, the
underlying cause of action should be dismissed for lack of jurisdiction.

[…]

ORDERED, that the application of defendant Soledad Murilo, to vacate the
Judgment in this action pursuant to CPLR 5015(a) (4) is granted. The court determines
that the purported service upon defendants is null and void, and the matter is dismissed for
lack of jurisdiction. This constitutes the Order of the Court.

[ipaper docId=77837320 access_key=key-1e1wuu0gk8r2rancr6o7 height=600 width=600 /]

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Freddie Mac adds three New York law firms to attorney network

Freddie Mac adds three New York law firms to attorney network


Lets see all the amended complaints that will hit the road…lets see how they’ll manage to clean up Baum’s docs.

HW-

A few weeks after losing one of its designated New York foreclosure law firms with the closing of the Steven J. Baum law offices, Freddie Mac added three firms to its New York network.

A spokesperson for the company confirmed Tuesday that it named the following businesses to its designated default law network in New York: Sheldon May & Associates, the Law Offices of Jordan Katz, and Sweeney, Gallo, Reich & Bolz.

 [HOUSING WIRE]

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Superintendent Lawsky Protects Homeowners In Foreclosure From Delays Caused By Baum Law Firm’s Closing

Superintendent Lawsky Protects Homeowners In Foreclosure From Delays Caused By Baum Law Firm’s Closing


Press Release

December 16, 2011

Contact: David Neustadt (212) 709-1691

Superintendent Lawsky Protects Homeowners In Foreclosure From Delays Caused By Abusive Law Firm’s Closing

Significant Delays Expected After Closing of Steven J. Baum P.C.; Firm Handled an Estimated 40% of New York Foreclosures.

Benjamin M. Lawsky, Financial Services Superintendent, today said homeowners facing foreclosure should not have to pay additional costs or penalties because of the closing of the largest foreclosure law firm in New York. “New Yorkers facing foreclosure should not be penalized in any way because of delays which may arise because many mortgage servicers will now need to find new counsel. It adds insult to injury for New Yorkers to suffer further as a result of the shuttering of this abusive and discredited firm,” Superintendent Lawsky said. In an industry-wide letter to mortgage servicers operating in New York, Superintendent Lawsky said servicers should proceed expeditiously to substitute new counsel in foreclosure cases previously handled by the Steven J. Baum law firm, which closed last month. However, he said homeowners should not be charged penalties, fees, costs or interest accrued as the direct result of delays caused by the Baum firm’s closing and the substitution of counsel.

A leading mortgage servicer, Ocwen Financial Corporation, has already signed an agreement with the Department of Financial Services (DFS) promising to refrain from charging homeowners for such costs. Ocwen agreed it would not penalize homeowners affected by the Baum closing in an amendment to an agreement reached in September with DFS to adhere to groundbreaking mortgage servicing reforms designed to address troublesome practices in the servicing industry generally.

Based in Amherst in Erie County, Baum closed after being fined $2 million by the federal government for its foreclosure practices, including allegations of “robo-signing,” and after Freddie Mac and Fannie Mae removed the firm from their lists of approved law firms.

The Baum firm represented plaintiffs in an estimated 40 percent of the foreclosure proceedings in New York in 2010. Servicers across the state will now have to hire new counsel, who will have to gather and review case files, and ask courts for the approval of new legal representation. As a result, significant delays in pending foreclosure cases are expected.

In the letter to servicers, Lawsky noted that one Baum attorney had asked for a 60 to 90 day continuance for a settlement conference in order to facilitate a change in counsel. Such a delay could cost a homeowner between $1,540 and $2,310 in additional interest charges based on a $150,000 mortgage at a 6.5 percent interest rate.

Meanwhile on December 12, 2011, another mortgage servicer, Specialized Loan Servicing LLC, became the eighth servicer to agree to adhere to the landmark reforms in Lawsky’s Agreement on Servicing Practices. The others are Ocwen, Morgan Stanley, Saxon, American Home Mortgage Servicing, Vericrest Financial, Goldman Sachs Bank and Litton Loan Servicing. Specialized Loan Servicing LLC, headquartered in Highlands Ranch, Colorado, services more than 216,000 loans nationally with a total unpaid principal balance of more than $16.4 billion and more than 5,800 loans in New York with a total unpaid principal balance of more than $829 million.

Specialized also agreed to refrain from charging homeowners for costs due to delays caused by the Baum firm closing or substitution of counsel.

“I commend Specialized Loan Servicing for being a leader and agreeing to adhere to these higher standards that protect homeowners from abuse. The Cuomo Administration has made it clear that we will do everything possible to see that fair and sensible reforms are put in place in the mortgage industry,” Lawsky said. “Moreover, with the letter issued to the servicing industry today, we are ensuring that borrowers facing foreclosure will not be charged for delays in court appearances, including settlement conferences, which may occur through no fault of their own due to the Baum firm closing.”

Kirsten Keefe, Senior Attorney in the Albany office of Empire Justice Center said, “Empire Justice Center applauds the NYS Department of Financial Services for taking swift steps to prevent any negative financial impact on the thousands of distressed homeowners affected by the closure of the Baum firm. There is a misperception that foreclosure delays benefit homeowners, but that is not the case. Not only is there a psychological cost to homeowners when cases drag on, but there are serious and significant financial consequences as hundreds to even thousands of dollars of additional interest accrues each month a loan languishes in foreclosure. Every dollar of added interest, fees or costs jeopardizes a homeowner’s ability to save their home. We hope the DFS’s actions today are embraced quickly by all servicers so that these innocent homeowners are not left paying for the mistakes of others.”

Josh Zinner, Co-Director of the Neighborhood Economic Development Advocacy Project (NEDAP), said: “The abusive foreclosure practices of the Baum law firm have caused great harm to homeowners and communities throughout the state. We strongly support efforts by the Department of Financial Services to ensure that New York homeowners are not penalized by mortgage servicers for the demise of the Baum law firm.”

Chuck Bell, Programs Director of Consumers Union, said: “Foreclosure proceedings are traumatic enough for consumers, without the pain and expense of lengthy legal delays, higher interest charges and fees. We applaud the Cuomo administration’s efforts to provide vigorous oversight of mortgage servicing practices, and protect New York consumers against the huge potential disruption caused by the closure of the Baum law firm.”

The agreements announced today were arranged through the work of Executive Deputy Superintendent Joy Feigenbaum of the Financial Frauds & Consumer Protection Division, Associate Counsel Brian Montgomery, Assistant Counsel Max Dubin and Associate Counsel Ellen Buxbaum with the assistance of Deputy Superintendent of Mortgage Banking Rholda Ricketts.

 

source: dfs.ny.gov

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NYSC Judge Hammers Fremont, MERS, Pillar, Steven J. Baum PC, U.S. Bank “ASMT from MERS is defective, as it had no right, authority to assign the mortgage or the note”

NYSC Judge Hammers Fremont, MERS, Pillar, Steven J. Baum PC, U.S. Bank “ASMT from MERS is defective, as it had no right, authority to assign the mortgage or the note”



Decided on December 7, 2011

Supreme Court, Kings County

 

U.S. Bank National Association, AS TRUSTEE FOR SG MORTGAGE SECURITIES ASSET BACKED CERTIFICATES, SERIES 2006-FRE2, Plaintiff,

against

Alan Bressler, CCU LLC, MERS, INC. ET AL, Defendants.

33920/08

Debra Silber, J.

Recitation, as required by CPLR 2219(a), of the papers considered in the review of plaintiff’s motion for summary judgment and for the appointment of a Referee to compute in this foreclosure action, and defendant’s cross-motion to dismiss.

PapersNumbered

Notice of Motion and Exhibits Annexed ……………………………….1-12

Cross-motion and Exhibits Annexed ……………………………………13- 20

Answering Affidavits …………………………………………………………21-30

Reply Affidavits ………………………………………………………………..

Other:

Upon the foregoing cited papers, the Decision/Order on this application is as follows:

Plaintiff’s motion for summary judgment and the appointment of a referee to compute in this foreclosure action concerning 1477 East 32nd Street, Brooklyn, NY, 11234, Block 7694, Lot 85, is denied and defendant mortgagor’s motion to dismiss the complaint for lack of standing is granted, for the reasons set forth herein.

Defendant Alan Bressler alleges in his Answer to the Complaint that the plaintiff lacks standing to bring this action. In response to the plaintiff’s motion for summary judgment, defendant cross moves to dismiss the foreclosure action on the grounds that plaintiff lacks standing to bring this action. The court finds that defendant is correct, and as such, the action must be dismissed.

The mortgage in question was issued by Fremont Investment and Loan on May 4, 2006. The loan states “for purposes of recording, MERS is the mortgagee of record.” The tortured history of MERS is described in Bank of NY v. Silverberg, 2011 NY Slip Op 5002, 86 AD3d 274 (2nd Dept), and need not be repeated. On December 18, 2008, an Assignment of Mortgage was executed, and subsequently recorded, which assigns the mortgage and not the note, and assigns it from MERS to plaintiff. First, the assignment of a mortgage without the note is defective as the transfer of the mortgage without the debt is a nullity. In a decision citing Silverberg, the court said “an assignment of the mortgage without assignment of the underlying note or bond is a nullity” Citimortgage, Inc. v Stosel, 2011 NY Slip Op 8319 (2nd Dept) citing U.S. Bank, N.A. v [*2]Collymore, 68 AD3d at 754; see Bank of NY v Silverberg, 86 AD3d 274, 280, 926 N.Y.S.2d 532.

Secondly, an assignment from MERS to plaintiff is defective, as MERS had no right or authority to assign the mortgage or the note. Bank of NY v Silverberg, supra. “The plaintiff, which merely stepped into the shoes of MERS, its assignor, and gained only that to which its assignor was entitled . . . did not acquire the power to foreclose by way of the

. . . assignment.” Id.

It must also be noted that not only did MERS lack the power and authority to execute the assignment on behalf of Fremont Investment and Loan on December 18, 2008, but Fremont did not exist any longer on that date, as it was first subjected to a cease and desist order from the FDIC and then went into Bankruptcy. Then, its assets were apparently sold sometime in 2010 in a Chapter 11 Bankruptcy proceeding, which started in the summer of 2008, to Signature Group Holdings Inc.[FN1]

Further, it must be noted that the execution of an Assignment of Mortgage by MERS is barred by the Settlement Agreement between the US Attorney’s Office on behalf of the United States of America and the Office of Steven J. Baum P.C. and Pillar Processing, LLC, dated October 6, 2011, which states at paragraph 14 that “Baum shall no longer permit anyone employed by or contracted by Baum to execute any assignment of a mortgage as an officer, director, employee, agent or other representative of MERSCORP, Inc., and/or Mortgage Electronic Registration Systems, Inc.” The office of Mr. Baum was the attorney for the plaintiff when this matter was commenced, the assignment at issue is stamped “Pillar Processing LLC” and is signed on behalf of MERS by Elpiniki M. Bechakas, an attorney in the office of Steven J. Baum, according to the public internet attorney registration website maintained by the State of New York.

To the extent that plaintiff’s counsel opposes the defendant’s motion to dismiss with various affirmations of counsel, including one that states that the Note was indeed also assigned, and annexes (Exhibit B) a photocopy of a document alleged to be an assignment of the note, which is merely a blank piece of paper that states “Pay to the order of US Bank National Association as Trustee, without recourse,” and is undated and signed by “Michael Koch, Vice President, Fremont Investment and Loan,” this is insufficient. Ms. Jones, Vice President for Loan Documentation for Wells Fargo Bank N.A., states in her affidavit (Paragraph 5) “the Note was endorsed and was physically delivered to Wells Fargo/ASC as servicing agent and custodian for US Bank prior to the commencement of this action . . . Thus, Wells Fargo’s records specifically reflect that, it was in physical possession of the endorsed note prior to the commencement of this action.” The language in the affidavit indicates that the loan was assigned and transferred to plaintiff while Fremont Investment & Loan was still in existence, in July of 2006, but this is the only indication of this fact, and does not indicate delivery to plaintiff, but merely alleging delivery to plaintiff’s agent for servicing without any supporting documentation. Ms Jones provides no date of the alleged delivery, and as discussed above, at the time of the alleged delivery, Fremont may not have existed, or may have been subject to the restrictions on transfer in the proceedings in Bankruptcy Court, or may have been subject to the FDIC’s cease [*3]and desist order. This cannot be ascertained without a date.

The affirmation of counsel that indicates that the current loan servicer has confirmed that the information in the complaint is accurate is also insufficient, as there is no indication that the alleged servicer is actually the servicer for this loan. The pooling and servicing agreement is between plaintiff and the servicer. There is nothing in the papers from Signature Group Holdings, Inc., the entity that now appears to own the Note and Mortgage, which confirms that they too have retained Wells Fargo as servicer for this loan.

In conclusion, plaintiff has failed to make out a prima facie case for summary judgment due to the defects in the documentation in their motion, described above. The defendant has made out a prima facie case for dismissal on the grounds that plaintiff lacked standing at the time the action was commenced, and may in fact still lack standing, which plaintiff has not overcome with any documentation, in admissible form or not, to prevent dismissal of the complaint.

This shall constitute the Decision and Order of the Court.

Dated: December 7, 2011

E N T E R :

Hon. Debra Silber A.J.S.C.

Footnotes

Footnote 1:http://nationalmortgageprofessional.com/news18108/former-sub-prime-lender-fremont-exits-bankruptcy-and-re-emerges-signature-group-holdings

[ipaper docId=75268698 access_key=key-11yt6778nbw437v3l28w height=600 width=600 /]

 

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Pillar Processing Firm That Helped Steven J. Baum P.C. To Lay Off 590 People

Pillar Processing Firm That Helped Steven J. Baum P.C. To Lay Off 590 People


Just as in Florida with Stern & DJSP, this will continue to repeat with others.

You all know who you are.

Rewind-

In 2007 Steven J. Baum sold all or most of his stake in Pillar to Tailwind Capital. Tailwind is a Hedge Fund that buys companies that are valued between $25 – and $100 Million. Sometime later, Ares Capital Corporation, a publicly traded company invested over $30 Million in Pillar. Both Baum & Pillar share an address.

Ares, Tailwind Said to Be Subpoenaed in N.Y. Foreclosure Probe.

BUFFALO NEWS-

Pillar Processing, a back-office and document-processing firm with close ties to the Steven J. Baum PC foreclosure law firm, will lay off 590 full- and part-time employees at its offices in Amherst.

The company told state and local officials that the layoffs are expected to take effect Feb. 27. Pillar is also laying off about 20 employees in Westbury, on Long Island.

[BUFFALO NEWS]

H/T JeffreyFreedman.com

“I’m not saying Baum and Pillar were not in the wrong, but according to my sources, many other firms in New York were doing the same things as Baum and Pillar,” Freedman said. “However, Baum and Pillar were the only upstate companies handling a large volume of foreclosure business, and now the work is most likely going to move to downstate firms that are still in business.”

I think we all know that they know who they all are. 🙂 Sound Off!

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FANNIE MAE: Authorization for File Transfers from the Baum Law Firm

FANNIE MAE: Authorization for File Transfers from the Baum Law Firm


Effective immediately, servicers are authorized to transfer any Fannie Mae foreclosure or bankruptcy matters in New York from Steven J. Baum, P.C., to any other Retained Attorney Network firms in the State of New York, a listing of which is posted on eFannieMae.com.

[ipaper docId=73952804 access_key=key-29xzzyberswyxcgijtio height=600 width=600 /]

 

 

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



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Foreclosure firm’s collapse could delay cases statewide

Foreclosure firm’s collapse could delay cases statewide


If you think these mills are the only ones? …GUESS AGAIN!

All of these firms should be barred and out of business period. You all know who you are.

REUTERS-

The sudden demise of one of New York’s largest foreclosure law firms has raised concerns of a drag on the thousands of cases it still has pending before the courts.

Steven J. Baum PC filed notice Monday informing federal labor regulators that it is planning “mass layoffs” on Feb. 20 as it prepares to close its doors. While no specific numbers were provided, the firm currently employs about 67 full and part-time employees at its main offices in western New York and 22 full and part-time employees in Long Island.

But while his firm may be on its way out, Steven Baum said in a statement Monday that he and remaining staff members will “fulfill our remaining work on behalf of our clients.”

Whether this means relying on the skeleton crew left behind to wind down the business or transferring cases to new firms will depend on the status of each case, according to attorneys who work on foreclosures in New York.

[REUTERS]

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



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Baum Firm Could Possibly Owe “Millions of Dollars” From Foreclosured Properties

Baum Firm Could Possibly Owe “Millions of Dollars” From Foreclosured Properties


NYPOST-

What’s in this law firm’s wallet?

New York state’s beleaguered, largest foreclosure law firm — which today announced plans to shut down in the face of a firestorm of legal action — has allegedly failed to turn over about $130,000 owed to three people whose co-ops were foreclosed on, and could be sitting on millions of dollars of hundreds of other people’s money without those people knowing, The Post has learned.

Steven J. Baum P.C.’s move to shutter came a week after it was made ineligible to get new referrals on any Fannie Mae or Freddie Mac mortgages — essentially a death knell for the controversial firm. The two federally backed mortgage giants moved in the face of numerous complaints about questionable legal filings by Baum.

 On Friday, a Brooklyn lawyer sued Baum claiming that the firm repeatedly ignored his attempts to obtain about $130,000 for three people whose co-ops were foreclosed on and later sold off in Baum-supervised auctions.
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© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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Steven J. Baum P.C. law firm to close

Steven J. Baum P.C. law firm to close


Get em before they shred… remember 18 wheelers moving boxes at David J. Sterns when they were closing down?

“We will fulfill all of our obligations under WARN and during this process we will also fulfill our remaining work on behalf of our clients,” Baum said in a prepared release. “Disrupting the livelihoods of so many dedicated and hardworking people is extremely painful, but the loss of so much business left us no choice but to file these notices.”

Buffalo Business First-

The embattled Steven J. Baum P.C. law firm is the closing its doors after a series of missteps that included mortgage industry giants Freddie Mac    and Fannie Mae    cutting off business with the Amherst-based firm.

[BUFFALO BUSINESS FIRST]

 

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



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Steven J. Baum Weighs In After Uproar

Steven J. Baum Weighs In After Uproar


“Mr. Nocera — You have destroyed everything and everyone related to Steven J. Baum PC. It took 40 years to build this firm and three weeks to tear down.”

There is blood on your hands for this one, Joe,” he wrote at the end of that second e-mail. “I will never, ever forgive you for this.”

I think that’s what they call shooting the messenger.

 NYT-

Thus began a lengthy e-mail that I received, on Thursday evening, from Steven J. Baum, the owner of his eponymous law firm, the largest “foreclosure mill” in New York State. Foreclosure mills, of course, are firms that represent banks and servicers trying to foreclose on the millions of homeowners who have defaulted since the housing bubble burst.

[NEW YORK TIMES]

image: New York Times

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



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Foreclosure mill getting peppered, Linked to the first criminal case brought against alleged robo-signers

Foreclosure mill getting peppered, Linked to the first criminal case brought against alleged robo-signers


In case you wish to read the transcripts from this story check it out: FULL DEPOSITION TRANSCRIPT OF LENDER PROCESSING SERVICES “LPS” SCOTT A. WALTER PART 1 &

FULL DEPOSITION TRANSCRIPT OF LENDER PROCESSING SERVICES SCOTT A. WALTER PART 2 “STEVEN J. BAUM, P.C.”, “O. MAX GARDNER”, “US TRUSTEE”

NY POST-

The stink is growing around the state’s largest foreclosure mill.

The Steven J. Baum law firm, which last month agreed to pay a $2 million fine to settle a federal probe into bogus foreclosure case filings, has now been barred by federal mortgage giants Fannie Mae and Freddie Mac from getting any more referrals of home loan defaults owned by either company.

In addition, the 70-lawyer firm is linked to the first criminal case brought against alleged robo-signers.

The criminal case was brought by the Nevada attorney general against two title officers — Gary Trafford and Gerri Sheppard — charged with forging signatures on 606 foreclosure-related mortgage documents.

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