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The Magic of the Mortgage Electronic Registration System: It Is and It Isn’t

The Magic of the Mortgage Electronic Registration System: It Is and It Isn’t


“Never imagine yourself not to be otherwise than what it might appear to others that what you were or might have been was not otherwise than what you had been would have appeared to them to be otherwise.”1

Excerpt:

While MERS may be named as the actual mortgagee
or its equivalent on the security instrument, in
substance its role is that of a nominee or agent.23
The language in the mortgage generally states:
“‘MERS’ is Mortgage Electronic Registration
Systems, Inc. MERS is a separate corporation that
is acting solely as nominee for Lender and
Lender’s successors and assigns. MERS is the
mortgagee under this Security Instrument.”24 Here
then begins the magic that is MERS—the dual claim
that it is both a principal (mortgagee) and
nominee/agent of the lender/factual mortgagee.25
MERS undertakes these roles but never lends
money and never gives value for the mortgage, nor
does it benefit from the proceeds of foreclosure
and/or collection actions.26 Were MERS’s
involvement in the mortgage market insignificant,
it might not pose much of a legal problem;however,
MERS appears to be involved in sixty
million loans—roughly half of all U.S. home
mortgages.27 The legal role MERS attempts to fill
and MERS’s argument as to standing is: 1) provide
a mortgage clearinghouse and eliminate recording
obligations by having MERS itself act as mortgagee
of record;28 2) allow the promissory note
evidencing the debt to be transferred freely among
MERS members ad infinitum; and 3) when default
occurs, act as the nominee of the current note
holder and mortgagee of record (rejoining the two
interests) even though the current “lender” did
not appoint MERS as mortgagee and may never have
had the right to do so. Ultimately, the argument
is something akin to a merger argument where MERS
claims that the severed interests, that of
security interest and note, are recombined in MERS
at a later date even though it received those
interests from separate entities. As others have
pointed out, MERS is attempting to derive powers
as an agent greater than the sum of the powers of
its principals.29

[ipaper docId=86987723 access_key=key-2k44k0z1xng0exhlu51n height=600 width=600 /]

 

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Alert To Problems Of Grossly Inaccurate Documents Used In The Land Title Underwriting For Commercial Real Estate Financing – By: David E. Woolley

Alert To Problems Of Grossly Inaccurate Documents Used In The Land Title Underwriting For Commercial Real Estate Financing – By: David E. Woolley


Alert To Problems Of Grossly
Inaccurate Documents Used In The Land Title Underwriting For Commercial Real Estate Financing

By: David E. Woolley
Harbinger Analytics Group

[ipaper docId=82301082 access_key=key-5kdyqvzlns132e68ms1 height=600 width=600 /]

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US Treasury: New HAMP Mortgage Modification Program Includes GSE Principal Reductions

US Treasury: New HAMP Mortgage Modification Program Includes GSE Principal Reductions


I posted the quoted text below back on Nov ’10… I wonder who exactly signs off for MERS, if this is so?

The standard modification agreement
is between the Borrower and
the Lender. The agreement amends
and supplements (1) the Mortgage,
Deed of Trust or Deed to Secure
Debt (Security Instrument) and (2)
the Note bearing the same date as,
and secured by, the Security
Instrument. Prior to MERS, the
standard agreement worked
because the Lender was the mortgagee
of record and could modify
the mortgage and also had the
authority to modify the Note.

However, if MERS is the mortgagee
of record, the Lender can’t
modify the mortgage without the
“mortgagee’s” consent.

MNINEWS-

The Obama Administration Friday announced it is expanding its flagship mortgage modification program and will now encourage lenders to reduce the principal loan balance for Fannie Mae and Freddie Mac loans.

The announcement comes just three days after President Obama said he would do more to support the struggling housing market and two days after Federal Reserve Chairman Ben Bernanke said housing is holding back the economic recovery.

Assistant Secretary for Financial Stability Timothy Massad in a blog post Friday outlined the changes to HAMP — including extending the end-date by one year and refocusing on principal reductions.

Massad said Treasury notified the Federal Housing Finance Agency, the regulator for Fannie Mae and Freddie Mac, that they will pay principal reduction incentives to the GSEs if they allow servicers to forgive principal — if done in conjunction with a HAMP modification.

Massad also said Treasury will triple the incentives for HAMP principal reduction modifications by paying from 18 to 63 cents on the dollar, depending on how much the loan-to-value ratio is reduced.

[MNINEWS]

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Indiana Supreme Court Limits Use of Strict Foreclosure to Clear Title

Indiana Supreme Court Limits Use of Strict Foreclosure to Clear Title


NAILTA

In 2005, Countrywide Home Loans, Inc. obtained a first mortgage against real estate owned by Rita and Kenneth Cloud. Sometime thereafter, the Clouds went into default and the mortgage was foreclosed. On August 28, 2006, Countrywide filed a foreclosure action against the Clouds. At a Sheriff’s Sale on February 22, 2007, Countrywide bid its judgment and took title to the real estate by Sheriff’s Deed. The Deed was recorded on March 15, 2007.

However, prior to the first mortgage and subsequent foreclosure judgment, the Clouds executed an unsecured promissory note to Citizens Bank of New Castle in January of 2003. The Clouds went into default on that note, as well. A complaint was filed against the Clouds to obtain a judgment on the unsecured note. On June 9, 2006, the Steuben County Court entered a default judgment against the Clouds in favor of Citizens Bank.

At the time Countrywide filed its foreclosure action in August of 2006, the Citizens Bank judgment lien was of record, but missed and Citizens Bank was not named as a defendant in the Countrywide foreclosure action.

On April 19, 2007, Countrywide conveyed title to the subject property to Fannie Mae by limited warranty deed.

[NAILTA]

[ipaper docId=65193185 access_key=key-250vg2towm9adue4ls60 height=600 width=600 /]

 

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BANK OF NEW YORK vs. KC BAILEY SJC-10801 | MASS. SJC Vacates Summary JDGMT “Housing Court has jurisdiction to consider the validity of the plaintiff’s title as a defense to a summary process action after a foreclosure sale”

BANK OF NEW YORK vs. KC BAILEY SJC-10801 | MASS. SJC Vacates Summary JDGMT “Housing Court has jurisdiction to consider the validity of the plaintiff’s title as a defense to a summary process action after a foreclosure sale”


NOTICE: The slip opinions and orders posted on this Web site are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports. This preliminary material will be removed from the Web site once the advance sheets of the Official Reports are published. If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA 02108-1750; (617) 557-1030; SJCReporter@sjc.state.ma.us

BANK OF NEW YORK, trustee, [FN1]

vs.

KC BAILEY.

SJC-10801.

April 4, 2011. – August 4, 2011.

Summary Process. Housing Court, Jurisdiction. Jurisdiction, Housing Court, Summary process. Real Property, Record title. Mortgage, Foreclosure. Practice, Civil, Summary process, Summary judgment.

SUMMARY PROCESS. Complaint filed in the Boston Division of the Housing Court Department on January 13, 2009.

The case was heard by Mary Lou Muirhead, J., on a motion for summary judgment.

The Supreme Judicial Court on its own initiative transferred the case from the Appeals Court.

Jennifer Tarr (H. Esme Caramello with her) for the defendant.

Peter Guaetta (Victor Manougian with him) for the plaintiff.

Pamela S. Kogut, for Chelsea Collaborative & others, amici curiae, submitted a brief.

Ilana Gelfman, Richard M.W. Bauer, Nadine Cohen, & Ann Jochnick, for City Life/Vida Urbana, amicus curiae, submitted a brief.

Present: Ireland, C.J., Spina, Cordy, Botsford, Gants, & Duffly, JJ.

DUFFLY, J.

The question we address in this case is whether the Housing Court has jurisdiction to decide the validity of a challenge to a title, raised by a former homeowner as a defense to a summary process eviction action by a party acquiring the property pursuant to a foreclosure sale. The plaintiff, Bank of New York (BNY), asserts that it acquired title to the home of the defendant, KC Bailey, pursuant to foreclosure proceedings. [FN2] Seeking to evict Bailey, BNY filed an action for summary process pursuant to G.L. c. 239, § 1. Bailey’s answer to the complaint alleged, among other claims and defenses, that BNY was not the owner because the sale was not in compliance with the foreclosure statute, due to defective notice, and the deed was thus void. See U.S. Bank Nat’l Ass’n v. Ibanez, 458 Mass. 637, 646 (2011). In its motion for summary judgment, BNY argued that the Housing Court lacked jurisdiction to address the claim raised by Bailey’s defense, and that it had made out a prima facie claim for superior possession by virtue of the deed, a copy of which was attached to the complaint. The motion judge agreed; she allowed BNY’s motion, and entered summary judgment in favor of BNY. Bailey appealed from that judgment and we transferred the case to this court on our own motion. Because we conclude that the Housing Court has jurisdiction to consider the validity of the plaintiff’s title as a defense to a summary process action after a foreclosure sale pursuant to G.L. c. 239, § 1, we vacate the allowance of summary judgment and remand for further proceedings.

1. Background and prior proceedings. In 2005, Bailey obtained a mortgage on a home on West Selden Street in the Mattapan section of Boston, a home he had owned and in which he had lived since 1979. The mortgage was obtained from an entity identified as “Mortgage Electronic Registration Systems, Inc. (‘MERS’), solely as nominee for the Lender (America’s Wholesale Lender)” (MERS as “nominee” [FN3]). The record reflects that on March 6, 2007, proceedings for foreclosure by sale were instituted by MERS as “nominee,” and that MERS as “nominee” was the highest bidder at the foreclosure sale. [FN4] Bailey asserts that on March 26, 2007, he discovered that a notice to evict had been affixed by duct tape to the fence surrounding his West Selden Street property.

[FN5] He thereafter filed an action against MERS as “nominee” in the Superior Court seeking to set aside the foreclosure sale. That complaint eventually was dismissed without prejudice for failure to effect timely service. No further description of the Superior Court proceedings is necessary to an understanding of the issues before us, or the context in which they arose.


Returning to the circumstances that led to this Housing Court action, Bailey asserts that he received no notice of, and was unaware of, the sale by foreclosure that took place on March 6, 2007. [FN6] On December 30, 2008, BNY served Bailey with a notice of its intention to terminate his occupancy. When Bailey failed to vacate the property, BNY instituted the underlying action in the Housing Court and, on January 9, 2009, served Bailey with a summary process (eviction) summons. Bailey answered the summary process complaint, alleging in part that his home was “foreclosed without legally sufficient notice under [G.L. c. 244, § 17B.]” [FN7] Bailey asserted in his answer that he had received all personal, business, and legal correspondence for over thirty years at his United States post office box, the same post office box to which all previous correspondence regarding his mortgage had been sent; but he had received at that post office box no notice of an impending foreclosure.


[FN8] Thereafter, BNY filed its motion for summary judgment, claiming that MERS as “nominee” had assigned to BNY the note and the mortgage; that on Bailey’s default BNY had, on March 6, 2007, foreclosed; that BNY was the highest bidder at the foreclosure sale; and that BNY had served Bailey with a notice to quit and a summary process complaint and summons. [FN9] In a memorandum opposing the motion, Bailey contended that BNY’s “ownership” of Bailey’s home “remains in dispute, because notice of the foreclosure sale … was legally insufficient.” Concluding that Bailey’s challenge to the validity of the foreclosure was not within the Housing Court’s jurisdiction, the judge allowed BNY’s motion. The judge reasoned that “[t]he only issue before the [c]ourt is whether the [p]laintiff is entitled to possession,” and because BNY showed that “its deed was recorded prior to the service of the [n]otice to [q]uit,” BNY had established a prima face case for possession.

2. Discussion. We review a decision to grant summary judgment de novo. See Ritter v. Massachusetts Cas. Ins. Co., 439 Mass. 214, 215 (2003). “The standard of review of a grant of summary judgment is whether, viewing the evidence in the light most favorable to the nonmoving party, all material facts have been established and the moving party is entitled to a judgment as a matter of law.” Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117, 120 (1991).

a. Subject matter jurisdiction. [FN10] That the Housing Court has jurisdiction over summary process actions pursuant to G.L. c. 239 is not in dispute. The Housing Court may hear summary process actions brought by those who acquire ownership of property via foreclosure by sale. See G.L. c. 185C, § 3. See also Bech v. Cuevas, 404 Mass. 249 (1989); Duggan v. Gonsalves, 65 Mass.App.Ct. 250, 254 n. 6 (2005) (Housing Court has appropriate jurisdiction over summary process action pursuant to G.L. c. 185C, § 3); Metropolitan Credit Union v. Matthes, 46 Mass.App.Ct. 326, 330 (1999); Commentary to Rule 1 of the Uniform Summary Process Rules, Mass. Ann. Laws Court Rules 705 (LexisNexis 2010-2011) (“Four Departments of the Massachusetts Trial Court have jurisdiction over summary process actions [Superior Court, District Court, Boston Municipal Court and Housing Court]”).

The question, as stated above, is whether, in the course of a summary process action brought in the Housing Court by a party acquiring the property pursuant to a foreclosure by sale, the judge may consider the former homeowner’s defense that the plaintiff’s title is invalid because the foreclosure was not conducted strictly according to the statute. See U.S. Bank Nat’l Ass’n v. Ibanez, 458 Mass. 637, 646 (2011). The answer to this question is informed by the historical context of the action for summary process.

Although the Housing Court has only been in existence since 1972, see G.L. c. 185A, inserted by St.1971, c. 843, §§ 1, 27, summary process is a long-standing cause of action. The current summary process statute, G.L. c. 239, § 1, derives from the “summary remedy” statute that has its roots in the beginning of the Eighteenth Century in the Province Laws 1700-1701. See Page v. Dwight, 170 Mass. 29, 31-37 (1897) (discussing evolution of “summary remedy,” St. 1825, c. 89, that provided remedies to “persons having the right of possession of houses and tenements”).

The summary remedy statute was in force when the General Statutes were revised in 1835 and was retained through later revisions, to provide a cause of action to those not in a traditional landlord-tenant relationship. See Page v. Dwight, supra at 34 (statute revised in part so that “in all such cases the like proceedings might be had as if the relation of landlord and tenant had theretofore existed between them. St. 1835, c. 114”). The summary remedy statute, codified in Rev. St. (1836) c. 104, “gave the process only to a ‘person entitled to the premises,’ which required him to prove that he was entitled to this possession, and which said that the defendant should have judgment if the plaintiff failed to prove his right to possession.” Id. at 37. In 1879, legislation was enacted specifically directed at those attempting to gain possession who had acquired property pursuant to foreclosure of the mortgage by sale. See id., citing St. 1879, c. 237.

Challenging a plaintiff’s entitlement to possession has long been considered a valid defense to a summary process action for eviction where the property was purchased at a foreclosure sale. See New England Mut. Life Ins. Co. v. Wing, 191 Mass. 192, 195 (1906) (in summary process action “by the purchaser at a mortgagee’s sale, the legal title may be put in issue, and it therefore became incumbent upon the plaintiff to establish its right of possession to the land demanded”). See also Sheehan Constr. Co. v. Dudley, 299 Mass. 51, 53 (1937) (in summary process action available to purchaser at foreclosure sale “it is incumbent upon such purchaser to establish his right of possession. The legal title in those circumstances plainly may be put in issue”). We have upheld that principle as recently as 1966, when we said, “The purpose of summary process is to enable the holder of the legal title to gain possession of premises wrongfully withheld. Right to possession must be shown and legal title may be put in issue…. Legal title is established in summary process by proof that the title was acquired strictly according to the power of sale provided in the mortgage; and that alone is subject to challenge.” Wayne Inv. Corp. v. Abbott, 350 Mass. 775, 775 (1966), citing Sheehan Constr. Co. v. Dudley, supra, and New England Mut. Life Ins. Co. v. Wing, supra.

The Housing Court was established in order to provide “a specialized forum to handle criminal and civil matters regarding housing that arise in the city of Boston.” LeBlanc v. Sherwin Williams Co., 406 Mass. 888, 891-892 (1990). In 1979, the Legislature enacted St.1979, c. 72, § 3, which further defined and expanded the Housing Court’s jurisdiction. See Tedford v. Massachusetts Hous. Fin. Agency, 390 Mass. 688, 693 n. 7 (1984); Boston v. Kouns, 22 Mass.App.Ct. 506, 510-511 (1986). The Housing Court’s jurisdiction over summary process actions is concurrent with that of the District Court and Superior Court. There is nothing in this jurisdictional scheme that supports a conclusion that the Legislature intended to give the Housing Court concurrent jurisdiction over summary process actions, yet preclude its consideration of the long-recognized validity of title defense to summary process.

Our conclusion that the Housing Court may consider the defense promotes the legislative goal of “just, speedy, and inexpensive” resolution of summary process cases. See Rule 1 of the Rules of Summary Process, supra. The pursuit of “speedy and inexpensive” summary process actions is compromised if the Housing Court must stay summary process proceedings while litigation on the validity of the foreclosure proceedings continues in another court. This creates precisely the type of unnecessary delay and inefficiency that the Legislature intended to eliminate when it reorganized the trial courts in the Commonwealth. See G.L. c. 211B; Konstantopoulos v. Whately, 384 Mass. 123, 129-130 (1981).

b. Proof of possession. Having determined that the Housing Court has jurisdiction to decide Bailey’s defense to the summary process action, we now address BNY’s contention that it nevertheless established possession and that the grant of summary judgment in its favor was appropriate.

To prevail on its motion for summary judgment, BNY “had the burden of showing that there are no material facts in dispute regarding its legal title to the property.” Metropolitan Credit Union v. Matthes, 46 Mass.App.Ct. 326, 330 (1999), citing Mass. R. Civ. P. 56(c), 365 Mass. 824 (1974), and Sheehan Constr. Co. v. Dudley, supra at 53-54. BNY contends, without citation to relevant authority, that to meet its burden it had only to prove that the foreclosure deed was recorded prior to service on Bailey of the notice to quit.
[FN11]

[FN11]

In a summary process action for possession after foreclosure by sale, the plaintiff is required to make a prima facie showing that it obtained a deed to the property at issue and that the deed and affidavit of sale, showing compliance with statutory foreclosure requirements, were recorded. See Lewis v. Jackson, 165 Mass. 481, 486-487 (1896); G.L. c. 244, § 15.
[FN12] BNY failed to submit an affidavit of sale “show[ing] that the requirements of the power of sale and of the statute have in all respects been complied with.” Id. [FN13]

Because BNY failed to make out a prima facie showing of possession, and the issues are disputed, the motion for summary judgment should not have been granted.

Conclusion. The decision granting summary judgment for the plaintiff is vacated. The case is remanded to the Housing Court for further proceedings consistent with this opinion.

So ordered.

FN1. For the certificateholders CWABS, Inc., Asset-Based Certificates Series 2005-13.

FN2. We acknowledge the amicus brief of City Life/Vida Urbana, and the amicus brief of the Chelsea Collaborative, Lynn United for Change, and the Merrimack Valley Project, both in support of the defendant.

FN3. Mortgage Electronic Registration Systems acts as nominee and as mortgagee of record for its members and appoints itself nominee, as mortgagee, for its members’ successors and assigns. See Mortgage Elec. Registration Sys. v. Saunders, 2 A.3d 289, 294 (Me.2010), quoting MERSCORP, Inc. v. Romaine, 8 N.Y.3d 90, 100 (2006) (Kaye, C.J., dissenting in part). In this case, we are not faced with the issue whether MERS may properly be both the mortgagee and an agent of the mortgagee, and we do not decide in which capacity MERS acted here.

FN4. A copy of the notice placed in the newspaper is in the record, but the date is illegible. MERS as “nominee” noticed the foreclosure in the newspaper. In its appellate brief, the Bank of New York (BNY) included a copy of an affidavit from MERS as “nominee,” which states that MERS as “nominee” provided notice of the foreclosure to Bailey via certified mail. The affidavit was not included in the summary judgment record that was before the motion judge, and we do not consider it in our analysis on appeal. See Tetrault v. Mahoney, Hawkes & Goldings, 425 Mass. 456, 458-459 (1997); note 13, infra.

FN5. The notice was not included in the record.

FN6. BNY had previously filed a summary process action against Bailey in the Housing Court. On May 10, 2007, however, that action was dismissed without prejudice by agreement of the parties. That action, and the notice preceding it, is dated several months before the June 29, 2007, date of an “assignment of bid for value” purporting to transfer to BNY, as trustee for the certificateholders CWABS, Inc., Asset-Backed Certificates, Series 2005-13, all of the interests of MERS as “nominee” in the West Selden Street property.

FN7. BNY makes much of the fact that Bailey, in his original answer and on appeal, cited G.L. c. 244, § 17B, in support of his claim that notice of the foreclosure was deficient. This statute governs the manner in which notice must be provided in an action for deficiency. It is apparent from his pleadings and arguments that Bailey’s intended reference was to G.L. c. 244, § 14, which sets forth the requirements of notice in connection with a foreclosure by sale. That statute provides, in relevant part:

“The mortgagee or person having his estate in the land mortgaged, or a person authorized by the power of sale, or the attorney duly authorized by a writing under seal, or the legal guardian or conservator of such mortgagee or person acting in the name of such mortgagee or person, may, upon breach of condition and without action, do all the acts authorized or required by the power; but no sale under such power shall be effectual to foreclose a mortgage, unless, previous to such sale, notice thereof has been published once in each of three successive weeks, the first publication to be not less than twenty-one days before the day of sale, in a newspaper, if any, published in the town where the land lies or in a newspaper with general circulation in the town where the land lies and notice thereof has been sent by registered mail to the owner or owners of record of the equity of redemption as of thirty days prior to the date of sale, said notice to be mailed at least fourteen days prior to the date of sale to said owner or owners to the address set forth in [G.L. c. 185, § 61], if the land is then registered or, in the case of unregistered land, to the last address of the owner or owners of the equity of redemption appearing on the records of the holder of the mortgage …” (emphasis added).

Because we look to the substance, rather than the form, of Bailey’s asserted defense, his incorrect citation is not fatal to his claim. See Quinn v. Walsh, 49 Mass.App.Ct. 696, 704 (2000) (label attached to pleadings should not govern their substance). Bailey argued repeatedly that the foreclosing agent failed to provide him proper notice before conducting the foreclosure sale and thus provided sufficient notice to the plaintiff of the defense being asserted. See Clark v. Greenhalge, 411 Mass. 410, 413 n. 6 (1991).

FN8. Bailey’s answer also set forth various counterclaims which were dismissed and are not a subject of this appeal.

FN9. As earlier stated, the record reflects that MERS as “nominee,” not BNY, was the holder of the mortgage on March 6, 2007, and that the foreclosure was conducted by MERS as “nominee,” which was the highest bidder at the foreclosure sale.

FN10. During oral argument, BNY contended that the case might be moot because BNY had foreclosed the mortgage by entry pursuant to G.L. c. 244, § 2, and Bailey therefore could no longer contest BNY’s title based on defective notice of the foreclosure sale. See Grabiel v. Michelson, 297 Mass. 227, 228-229 (1937) (any defect in foreclosure by sale irrelevant after proper foreclosure by entry completed).

In order to foreclose on a mortgage by entry, BNY must have been the mortgagee at the time of entry. See U.S. Bank Nat’l Ass’n v. Ibanez, 458 Mass. 637, 646 n. 15 (2011); G.L. c. 244, §§ 1-2. Nothing in the record indicates when or by what means the entry was made, and whether at the time of entry BNY was the mortgagee of the West Selden Street property. It may well be that BNY can establish that it has acquired an assignment of the mortgage despite defects in the foreclosure by sale. On the record before us, we are unable to make this determination.

FN11. In support of its motion for summary judgment, BNY submitted only the foreclosure deed and the eviction notice.

FN12. General Laws c. 244, § 15, provides: “The person selling, or the attorney duly authorized by a writing or the legal guardian or conservator of such person, shall, after the sale, cause a copy of the notice and his affidavit, fully and particularly stating his acts, or the acts of his principal or ward, to be recorded in the registry of deeds for the county or district where the land lies, with a note or reference thereto on the margin of the record of the mortgage deed, if it is recorded in the same registry. If
the affidavit shows that the requirements of the power of sale and of the statute have in all respects been complied with, the affidavit or a certified copy of the record thereof, shall be admitted as evidence that the power of sale was duly executed.”

FN13. We do not consider the affidavit submitted by BNY on appeal, which it conceded was not part of the record before the judge. See Tetrault v. Mahoney, Hawkes & Goldings, 425 Mass. 456, 458-459 (1997).

END OF DOCUMENT

FULL CASE DOCKET: http://www.ma-appellatecourts.org/display_docket.php?dno=SJC-10801

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Judge OK’s class-action status for homeowner lawsuit against Florida law firm

Judge OK’s class-action status for homeowner lawsuit against Florida law firm


By Christine Stapleton Palm Beach Post Staff Writer
Updated: 9:17 p.m. Wednesday, Dec. 29, 2010
Posted: 6:06 p.m. Wednesday, Dec. 29, 2010

As many as 2,000 homeowners suing the law firm of self-proclaimed foreclosure king David J. Stern over excessive attorney fees and costs won a major victory today when an appeals court blessed the group’s class-action status.

“We are very excited,” said Louis M. Silber, the West Palm Beach attorney who filed the case in January 2007 — the first class-action lawsuit filed against Stern and his Plantation-based law firm stemming from foreclosure fraud accusations.

In a four-page opinion, the 4th District Court of Appeal upheld the findings of Circuit Judge Thomas H. Barkdull,, who decided the complaints and circumstances of the homeowners were so similar that they would best be handled in a class-action lawsuit.

Members of the class are homeowners who received letters from Stern’s firm between Jan. 18, 2003 and Feb. 19 2009 offering to reinstate their loans with Wells Fargo by paying reinstatement charges.

Among the excessive reinstatement fees and costs described in the lawsuit:

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FL APPEALS 4th DCA “FINDS NO ABUSE, AFFIRMS TRIAL COURT DECISION IN CLASS CERTIFICATION”: DAVID J. STERN V. BANNER, WELLS FARGO

FL APPEALS 4th DCA “FINDS NO ABUSE, AFFIRMS TRIAL COURT DECISION IN CLASS CERTIFICATION”: DAVID J. STERN V. BANNER, WELLS FARGO


DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT

July Term 2010

LAW OFFICES OF DAVID J. STERN, P.A. and DAVID J. STERN,
individually,
Appellants,

v.

LOREN BANNER and WELLS FARGO BANK, N.A.,
Appellees.

CASE No. 4D09-3928

[ December 29, 2010 ]

Excerpt:

Using that standard, we find no abuse of discretion in the trial court’s decision to certify the class in this case and
affirm the certification order.

[ipaper docId=46037982 access_key=key-2jvtqr51dbwmtnu8smi7 height=600 width=600 /]

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Stern’s foreclosure mistake leads two to buy same house

Stern’s foreclosure mistake leads two to buy same house


Paperwork error complicates home sale, raises questions about process

By Diane C. Lade and Doreen Hemlock, Sun Sentinel
5:00 p.m. EST, December 4, 2010

Real estate investor Marjorie Oster was pleased when she snagged what looked like a good deal through a Miami-Dade County foreclosure court auction: a four-bedroom house in Cutler Bay, with a swimming pool, for about $95,000.

But when her husband drove by the next day to check on the property, he saw “someone cleaning the pool, a lawn service cutting the grass and a note it was being tented for termites,” said Oster, a Miami resident who has been in real estate for 15 years.

It turns out the house she thought she had purchased had been sold in a short sale the week before to someone else — Osberto Jimenez, a 40-year-old Cuban-born truck driver. The law firm handling the foreclosure for the lender mishandled the paperwork and never canceled the auction sale.

“So we both own the same house and I’m frustrated as hell,” said Oster. “Someone screwed up.”

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Foreclosure Mills and The 4 Minute Foreclosure

Foreclosure Mills and The 4 Minute Foreclosure


For you to understand a little more about “the 4 minute foreclosure” you first have to know some key players in the controversy surrounding the foreclosure process today. I included a few excerpts from an article written by Gerlad B. Alt for DS News March of 2007 that you will find at the end. I only wish MERS was included in this article because without this device none of this would have been made possible.

The Federal Home Loan Mortgage Corporation (FHLMC), known as Freddie Mac, is a public government sponsored enterprise (GSE), headquartered in the Tyson’s Corner CDP in unincorporated Fairfax County, VirginiaFreddie Mac, one of America’s biggest buyers of home mortgages, is a stockholder-owned corporation chartered by Congress in 1970 to keep money flowing to mortgage lenders in support of home-ownership and rental housing.

Freddie Mac was the first investor to improve on the so-called standard timeframes by tightening the noose and imposing what seemed at the time like draconian and arbitrary standards for completion of legal actions for foreclosure and bankruptcy. To reinforce its point, the Federal Home Loan Mortgage Corporation adopted a designated counsel program under which the attorneys chosen to participate were expected to meet and be graded against these more stringent dates.

LOGS Network is a multi-state network of title companies and law firms and connecting them via a proprietary web-hosted software system. They developed a proprietary statistical program called ASAP (Attorney Scorecard and Performance) to help manage the more than 250 law firms its outsourcing division. By introducing , invented the field counsel industry that serves residential mortgage banking. LOGS Network was co-founded by Gerald M. Shapiro of Shapiro & Fishman PA a law firm who handles foreclosures for the financial industry. His network held a virtual monopoly on all foreclosure and bankruptcy work nationwide until the early 1990s. In addition, he preempted the entire industry by creating the “cradle to grave” concept through business developments in title, closing, document preparation, foreclosures, REO, outsourcing, collection, and debt acquisition businesses.

Fidelity National, a national default outsourcing and information provider, was one of the first in the industry to implement time-frames a high priority instead of a guideline standards. It instituted a policy recognizing and rewarding those attorneys who did work for its clients in a consistently shorter time than their competition. Fidelity mentality was the faster the better and by publicizing and comparing the time to completion of various legal tasks among the hundreds of law firms doing work for its client base. It created a demand for attorneys to keep up with their business practices in the same sequence that other industries have had to in the sense of “recreating the wheel” so to speak to keep up with growing competition.

By having a goal of recovering nonconforming assets for the servicers this put pressure on the time frames they had in order to recover title.

Of course, when the only acceptable
test for quality becomes a simple test
of speed, it is inevitable that some of
the participants will feel compelled
to cut corners to stay in the game.

Click Image For PDF

DSN_FORE2_March07

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



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Battle of The Unauthorized Fraudulent Signature: DEUTSCHE BANK NATIONAL TRUST COMPANY v. JP MORGAN, Ga: Court of Appeals 2010

Battle of The Unauthorized Fraudulent Signature: DEUTSCHE BANK NATIONAL TRUST COMPANY v. JP MORGAN, Ga: Court of Appeals 2010


DEUTSCHE BANK NATIONAL TRUST COMPANY,
v.
JP MORGAN CHASE BANK, N. A.

A10A1509.

Court of Appeals of Georgia.

Decided: November 19, 2010.

BARNES, Presiding Judge.

JP Morgan Chase Bank, N. A. commenced this action against Deutsche Bank National Trust Company f/k/a Banker’s Trust Company after the two banks conducted competing foreclosure sales of certain real property in DeKalb County. JP Morgan’s claim of title to the property was predicated on a 2004 security deed, while Deutsche Bank’s claim of title was predicated on a 2001 security deed. The case turned on the legal effect of a notarized warranty deed recorded in 2003 and on whether JP Morgan was a bona fide purchaser for value based upon the warranty deed. The trial court granted summary judgment to JP Morgan, concluding that JP Morgan’s interest in the property was superior to and not subject to any interest held by Deutsche Bank. We conclude that the uncontroverted evidence shows that the 2003 warranty deed was not a forgery, but was signed by someone fraudulently assuming authority, and that JP Morgan was a bona fide purchaser for value entitled to take the property free of any outstanding security interest held by Deutsche Bank. Thus, we affirm.

To prevail on a motion for summary judgment, the moving party must demonstrate that there is no genuine issue of material fact, and that the undisputed facts, viewed in a light most favorable to the party opposing the motion, warrant judgment as a matter of law. Our review of a grant of summary judgment is de novo, and we view the evidence and all reasonable inferences drawn from it in the light most favorable to the nonmovant.

(Citations and punctuation omitted.) Consumer Solutions Fin. Svc. v. Heritage Bank, 300 Ga. App. 272 (684 SE2d 682) (2009). See OCGA § 9-11-56 (c); Lau’s Corp. v. Haskins, 261 Ga. 491 (405 SE2d 474) (1991). Guided by these principles, we turn to the record in the present case.

This case involves a dispute over the tract of real property located at 275 Haas Avenue, Atlanta, Georgia 30316 in DeKalb County (the “Property”). The Property was conveyed to Rebecca Diaz by warranty deed recorded in September 2001. On the same date, Diaz executed and recorded a security deed encumbering the Property in favor of People’s Choice Home Loan, Inc. (the “2001 Security Deed”). IndyMac Bank, F. S. B. acquired the 2001 Security Deed by assignment.

In July 2003, a notarized warranty deed from “Indy Mac Bank, F. S. B.” to Diaz was recorded which purported to reconvey the Property to Diaz in fee simple (the “Warranty Deed”). The Warranty Deed was executed by an individual named Pamela Whales, who identified herself as an Assistant Vice President of IndyMac. The Warranty Deed was attested by two witnesses, one of whom was a notary public.

The Property subsequently was deeded to various parties but ultimately to an owner who, in April 2004, executed and recorded a security deed encumbering the Property in favor of OneWorld Mortgage Corporation (the “2004 Security Deed”). Washington Mutual Bank F. A. acquired the 2004 Security Deed by assignment.

In June 2004, IndyMac assigned the 2001 Security Deed to Deutsche Bank. That same month, Deutsche Bank foreclosed upon the Property pursuant to the power of sale provision contained in the 2001 Security Deed. Deutsche Bank was the highest bidder at the foreclosure sale.

In December 2005, Washington Mutual also foreclosed upon the Property pursuant to the power of sale provision contained in the 2004 Security Deed. Washington Mutual was the highest bidder at the foreclosure sale. Thereafter, Washington Mutual was closed by the federal Office of Thrift Supervision, and JP Morgan succeeded to Washington Mutual’s interest in the Property under the terms of a purchase and assumption agreement.

Following the competing foreclosure sales, JP Morgan brought this action against Deutsche Bank for declaratory relief and attorney fees, alleging that its interest in the Property was superior to and not subject to any interest held by Deutsche Bank. Deutsche Bank answered and counterclaimed for a declaratory judgment that its interest in the Property was superior to and not subject to any interest held by JP Morgan.

The parties cross-moved for summary judgment on their declaratory judgment claims. JP Morgan argued that the 2001 Security Deed upon which Deutsche Bank predicated its interest in the Property had been canceled by the Warranty Deed as a matter of law. Alternatively, JP Morgan argued that the uncontroverted evidence showed that it qualified as a bona fide purchaser for value such that it was protected against any outstanding security interest in the Property held by Deutsche Bank. Deutsche Bank strongly disputed these arguments, contending that the Warranty Deed was facially irregular, had been forged, and failed to satisfy the statutory requirements for cancellation of a security deed. The trial court granted summary judgment to JP Morgan and denied it to Deutsche Bank. Deutsche Bank now appeals the trial court’s grant of JP Morgan’s motion for summary judgment.[1]

1. We affirm the trial court’s grant of summary judgment in favor of JP Morgan because the uncontroverted evidence shows that JP Morgan was afforded the protection of a bona fide purchaser for value, not subject to any outstanding security interest in the Property held by Deutsche Bank.

“To qualify as a bona fide purchaser for value without notice, a party must have neither actual nor constructive notice of the matter at issue.” (Citation and punctuation omitted.) Rolan v. Glass, 305 Ga. App. 217, 218 (1) (699 SE2d 428) (2010). “Notice sufficient to excite attention and put a party on inquiry shall be notice of everything to which it is afterwards found that such inquiry might have led.” (Citation and footnote omitted.) Whiten v. Murray, 267 Ga. App. 417, 421 (2) (599 SE2d 346) (2004). “A purchaser of land is charged with constructive notice of the contents of a recorded instrument within its chain of title.” (Citation and footnote omitted.) VATACS Group v. HomeSide Lending, (2005). Furthermore, the grantee of a security interest in land and subsequent purchasers are entitled to rely upon a warranty deed that is regular on its face and duly recorded in ascertaining the chain of title. See Mabra v. Deutsche Bank & Trust Co. Americas, 277 Ga. App. 764, 767 (2) (627 SE2d 849) (2006), overruled in part on other grounds by Brock v. Yale Mtg. Corp., ___ Ga. ___ (2) (Case No. S10A0950, decided Oct. 4, 2010). 276 Ga. App. 386, 391 (2) (623 SE2d 534)

On motion for summary judgment, JP Morgan argued that it was entitled to protection as a good faith purchaser because the notarized, recorded Warranty Deed purported to transfer the Property back to Diaz, thereby extinguishing the 2001 Security Deed, and there was no reason to suspect a defect in the Warranty Deed calling into question the chain of title. In contrast, Deutsche Bank argued that JP Morgan was not entitled to such protection because the Warranty Deed was facially irregular in that it misidentified the grantor and failed to comply with OCGA § 14-5-7 (b).

We agree with JP Morgan and reject the arguments raised by Deutsche Bank. The Warranty Deed was regular on its face and duly recorded. See OCGA § 44-5-30 (“A deed to lands must be in writing, signed by the maker, and attested by at least two witnesses.”). See also OCGA § 44-2-21 (a) (4), (b) (one of two required attesting witnesses may be a notary public). Also, the Warranty Deed on its face was executed in a manner that conformed with OCGA § 14-5-7 (b), which provides:

Instruments executed by a corporation releasing a security agreement, when signed by one officer of the corporation or by an individual designated by the officers of the corporation by proper resolution, without the necessity of the corporation’s seal being attached, shall be conclusive evidence that said officer signing is duly authorized to execute and deliver the same.

The Warranty Deed appeared to be executed by an assistant vice president of IndyMac, and thus by an “officer of the corporation.” Moreover, the only interest that IndyMac held in the Property prior to execution of the Warranty Deed was its security interest arising from the 2001 Security Deed, and reconveyance of the Property by way of a warranty deed was a proper way to release that security interest. See Clements v. Weaver, 301 Ga. App. 430, 434 (2) (687 SE2d 602) (2009) (grantor of quitclaim deed estopped from asserting any interest in property conveyed); Southeast Timberlands v. Haiseal Timber, 224 Ga. App. 98, 102 (479 SE2d 443) (1996) (physical precedently only). The Warranty Deed, therefore, facially complied with OCGA § 14-5-7 (b) and would appear to anyone searching the county records to serve as “conclusive evidence” that execution of the deed had been authorized by IndyMac.

(a) In opposing summary judgment, Deutsche Bank argued that the Warranty Deed was facially irregular because it improperly identified the grantor as “Indy Mac Bank, F. S. B.” rather than “IndyMac Bank, F. S. B.” But “a mere misnomer of a corporation in a written instrument . . . is not material or vital in its consequences, if the identity of the corporation intended is clear or can be ascertained by proof.” (Citation, punctuation, and emphasis omitted.) Hawkins v. Turner, 166 Ga. App. 50, 51-52 (1) (303 SE2d 164) (1983). It cannot be said that the mere placement of an additional space in the corporate name (i.e., “Indy Mac” versus “IndyMac”) made the identity of the corporation unclear. As such, the misnomer did not render the Warranty Deed irregular on its face.

(b) Deutsche Bank also argued that the Warranty Deed failed to comply with OCGA § 14-5-7 (b) because the phrase “when signed by one officer of the corporation” should be construed as requiring the signature of the corporate president or vice president. “The cardinal rule of statutory construction requires that we look to the intention of the legislature. And in so doing, the literal meaning of the statute prevails unless such a construction would produce unreasonable or absurd consequences not contemplated by the legislature.” Johnson v. State, 267 Ga. 77, 78 (475 SE2d 595) (1996). The words of OCGA § 14-5-7 (b) are unambiguous and do not lead to an unreasonable or absurd result if taken literally: any officer of the corporation has authority to sign the instrument releasing the security interest. There is no basis from the language of the statute to limit that authority to a subset of corporate officers such as a president or vice president.

It is clear that the legislature knew how to specify such a limitation when it chose to do so. In OCGA § 14-5-7 (a),[2] the legislature imposed a limitation on the specific types of corporate officers who could execute instruments for real estate conveyances other than those releasing security agreements. Consequently, we must presume that the legislature’s failure to include similar limiting language in OCGA § 14-5-7 (b) “was a matter of considered choice.” Transp. Ins. Co. v. El Chico Restaurants, 271 Ga. 774, 776 (524 SE2d 486) (1999).

Deutsche Bank further argued that the Warranty Deed failed to comply with OCGA § 14-5-7 (b) because the statute should be construed as requiring the instrument to expressly state that it was “releasing a security agreement,” and the Warranty Deed did not contain such express language. But nothing in the plain language of OCGA § 14-5-7 (b) imposes an express language requirement, “and the judicial branch is not empowered to engraft such a [requirement] on to what the legislature has enacted.” (Citation omitted.) Kaminer v. Canas, 282 Ga. 830, 835 (1) (653 SE2d 691) (2007).

(c) Given the facial regularity of the recorded Warranty Deed, there was no reason to suspect that it might be defective in some manner or that there might be a problem in the chain of title resulting from the deed. Nothing in the Warranty Deed would have excited attention or put a party on inquiry that the 2001 Security Deed might remain in full force and effect. Accordingly, the original grantee of the 2004 Security Deed (OneWorld Mortgage Corporation) was entitled to rely upon the facially regular Warranty Deed and was afforded the protection of a bona fide purchaser of the Property, entitled to take the Property free of the 2001 Security Deed. See generally Farris v. Nationsbanc Mtg. Corp., 268 Ga. 769, 771 (2) (493 SE2d 143) (1997) (“A bona fide purchaser for value is protected against outstanding interests in land of which the purchaser has no notice.”). Because OneWorld Mortgage Corporation had the status of a bona fide purchaser, subsequent holders of the 2004 Security Deed were likewise afforded that status, including Washington Mutual (now JP Morgan). See OCGA § 23-1-19 (“If one without notice sells to one with notice, the latter shall be protected[.]”; Murray v. Johnson, 222 Ga. 788, 789 (3) (152 SE2d 739) (1966); Thompson v. Randall, 173 Ga. 696, 701 (161 SE 377) (1931). Consequently, summary judgment was appropriate to JP Morgan on the issue of its status as a bona fide purchaser for value.

2. In opposing summary judgment, Deutsche Bank contended that even if JP Morgan qualified as a bona fide purchaser for value, there was a genuine issue of material fact over whether the Warranty Deed constituted a forgery, and thus over whether JP Morgan acquired good title to the Property. JP Morgan responded that the uncontroverted evidence showed that the Warranty Deed did not constitute a common law forgery, which occurs when someone signs another person’s name, since the Warranty Deed was signed by a person using her own name but who fraudulently assumed authority to act on behalf of IndyMac. JP Morgan further maintained that its status as a bona fide purchaser for value protected it against any fraud (rather than forgery) that might have been involved in the execution of the Warranty Deed.

The dispute between the parties centered on the assertions contained in the affidavit of Yolanda Farrow, which was filed by Deutsche Bank in opposition to summary judgment (the “Farrow Affidavit”). Farrow averred that she was a records keeper formerly employed by IndyMac and currently employed at IndyMac’s successor bank. Farrow further averred that her office maintained the IndyMac personnel records in an electronic database; that she had personal knowledge of the maintenance and upkeep of those records; and that she had personally researched and examined the records database for the person identified in the Warranty Deed as Pamela Whales, Assistant Vice President. Based upon her review of the records database, Farrow opined that to the best of her knowledge and belief, no one by that name was an employee or agent of IndyMac when the Warranty Deed was executed. Deutsche Bank maintained that the Farrow Affidavit served as circumstantial evidence creating a genuine issue of material fact over whether the Warranty Deed was a forgery.

[W]e have . . . long recognized that a forged deed is a nullity and vests no title in a grantee. As such, even a bona fide purchaser for value without notice of a forgery cannot acquire good title from a grantee in a forged deed, or those holding under such a grantee, because the grantee has no title to convey.

(Citations and punctuation omitted.) Brock, ___ Ga. at ___ (2). See also Second Refuge Church of Our Lord Jesus Christ v. Lollar, 282 Ga. 721, 726-727 (3) (653 SE2d 462 (2007). In contrast, a bona fide purchaser is protected against fraud in the execution or cancellation of a security deed of which he or she is without notice. See Murray, 222 Ga. at 789 (4).

We conclude that the Farrow Affidavit filed by Deutsche Bank was insufficient to raise a genuine issue of material fact as to whether the Warranty Deed was a forgery.

A recorded deed shall be admitted in evidence in any court without further proof unless the maker of the deed, one of his heirs, or the opposite party in the action files an affidavit that the deed is a forgery to the best of his knowledge and belief. Upon the filing of the affidavit, the genuineness of the alleged deed shall become an issue to be determined in the action.

OCGA § 44-2-23. While “forgery” is not defined in the statute, we have previously noted that the general principles espoused in the statute were “taken from the common law.” McArthur v. Morrison, 107 Ga. 796, 797 (34 SE 205)Intl. Indem. Co. v. Bakco Acceptance, 172 Ga. App. 28, 32 (2) (322 SE2d 78)Barron v. State, 12 Ga. App. 342, 348 (77 SE 214)Gilbert v. United States, 370 U. S. 650, 655-658 (II) (82 SC 1399, 8 LE2d 750) (1962) (discussing the common law of forgery); People v. Cunningham, 813 NE2d 891, 894-895 (N. Y. 2004) (same). On the other hand, (1899). Furthermore, we favor the construction of a statute in a manner that is in conformity with the common law, rather than in derogation of it. See (1984). Under the common law, a forgery occurs where one person signs the name of another person while holding out that signature to be the actual signature of the other person. See (1913) (“[T]o constitute forgery, the writing must purport to be the writing of another party than the person making it.“) (citation and punctuation omitted). See also

[w]here one executes an instrument purporting on its face to be executed by him as the agent of the principal, he is not guilty of forgery, although he has in fact no authority from such principal to execute the same. This is not the false making of the instrument, but merely a false and fraudulent assumption of authority.

(Citation and punctuation omitted.) Ga. Cas. & Surety Co. v. Seaboard Surety Co., 210 F. Supp. 644, 656-657 (N. D. Ga. 1962), aff’d, Seaboard Surety Co. v. Ga. Cas. & Surety Co., 327 F.2d 666 (5th Cir. 1964) (applying Georgia law). This common law distinction between forgery and a fraudulent assumption of authority has been discussed and applied in several Georgia cases. See Morgan v. State, 77 Ga. App. 164, 165 (48 SE2d 115) (1948); Samples v. Milton County Bank, 34 Ga. App. 248, 250 (1) (129 SE 170) (1925); Barron, 12 Ga. App. at 347-350.

In the present case, the Farrow Affidavit merely asserted that Whales, the individual who signed the Warranty Deed, was not an employee or agent of IndyMac. It is undisputed that the individual signing the Warranty Deed was in fact Whales. Hence, the Farrow Affidavit alleged a fraudulent assumption of authority by Whales, not a forgery, under the common law. See Georgia Cas. & Surety Co., 210 F. Supp. at 656-657; Morgan, 77 Ga. App. at 165; Samples, 34 Ga. App. at 250 (1); Barron, 12 Ga. App. at 347-350.

Arguing for a contrary conclusion, Deutsche Bank maintained that the cases applying the Georgia common law of forgery which have addressed the doctrine of a “fraudulent assumption of authority” have involved an admitted agent with some authority to act on behalf of its principle, but who exceeded that authority. Deutsche Bank asserted that the present case is thus distinguishable, since the Farrow Affidavit reflected that Whales had no authority to act as an agent of IndyMac in any capacity or under any circumstances.

We are unpersuaded. Nothing in the language or reasoning of the cases applying the doctrine of fraudulent assumption of authority suggests that the doctrine should be limited in the manner espoused by Deutsche Bank. See Georgia Cas. & Surety Co., 210 F. Supp. at 656-657;Morgan, 77 Ga. App. at 165; Samples, 34 Ga. App. at 250 (1); Barron, 12 Ga. App. at 347-350. Indeed, in Georgia Cas. & Surety Co., 210 F. Supp. at 652, 656-657, the district court did not hesitate to apply the doctrine, even though the court found that the individuals who had executed the corporate documents were “purely intruders” with “no contract of employment existing nor even in contemplation,” who lacked any authority whatsoever to act on behalf of the corporation as officers or otherwise.

For these reasons, the trial court correctly rejected Deutsche Bank’s contention that there was evidence that the Warranty Deed had been forged. Because the Farrow Affidavit at best showed a fraudulent assumption of authority by Whales as signatory to the Warranty Deed, JP Morgan, as a bona fide purchaser, was protected against the fraudulent actions alleged by Deutsche Bank. See Murray, 222 Ga. at 789 (4).

3. In opposing summary judgment, Deutsche Bank also maintained that the Warranty Deed could not cause the 2001 Security Deed to be canceled because the Warranty Deed failed to comply with the requirements of OCGA § 44-14-67 (b) (2). That statute provides in pertinent part:

(b) In the case of a deed to secure debt which applies to real property, in order to authorize the clerk of superior court to show the original instrument as canceled of record, there shall be presented for recording:

. . .

(2) A conveyance from the record holder of the security deed, which conveyance is in the form of a quitclaim deed or other form of deed suitable for recording and which refers to the original security deed[.]

According to Deutsche Bank, the Warranty Deed did not authorize the clerk of the superior court to cancel the 2001 Security Deed because the Warranty Deed made no express reference to the 2001 Security Deed, as required by this statute. As such, Deutsche Bank argued that, as a matter of law, the Warranty Deed could not effectuate the cancellation of the 2001 Security Deed and thereby extinguish Deutsche Bank’s interest in the Property.

Deutsche Bank’s argument was predicated on the false assumption that OCGA § 44-14-67 (b) provides the exclusive means for the cancellation or extinguishment of a security deed. But as previously noted, a bona fide purchaser for value is entitled to take property free of any outstanding security interest of which the purchaser had no actual or constructive notice. See Farris, 268 Ga. at 771 (2). And it would produce an anomalous result to interpret Georgia’s recording statutes, including OCGA § 44-14-67 (b), in a manner that would defeat the interests of a bona fide purchaser for value. See Lionheart Legend v. Northwest Bank Minn. Nat. Assn., 253 Ga. App. 663, 667 (560 SE2d 120) (2002) (noting that Georgia’s recording acts are intended to protect bona fide purchasers for value). It follows that because JP Morgan was a bona fide purchaser for value, it was entitled to take the Property free of the 2001 Security Deed, separate and apart from the procedures for cancellation by the clerk of the superior court set forth in OCGA § 44-14-67.

For these combined reasons, the trial court correctly concluded that the uncontroverted evidence of record showed that JP Morgan’s interest in the Property was superior to and not subject to any interest held by Deutsche Bank. The trial court, therefore, committed no error in granting summary judgment in favor of JP Morgan on its claim for a declaratory judgment.

Judgment affirmed. Blackwell, and Dillard, JJ., concur.

[1] Deutsche Bank does not appeal the trial court’s denial of its motion for summary judgment.

[2] OCGA § 14-5-7 (a) provides:

Instruments executed by a corporation conveying an interest in real property, when signed by the president or vice-president and attested or countersigned by the secretary or an assistant secretary or the cashier or assistant cashier of the corporation, shall be conclusive evidence that the president or vice-president of the corporation executing the document does in fact occupy the official position indicated; that the signature of such officer subscribed thereto is genuine; and that the execution of the document on behalf of the corporation has been duly authorized. Any corporation may by proper resolution authorize the execution of such instruments by other officers of the corporation.

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



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Lender can’t modify the mortgage without the “mortgagee’s” consent

Lender can’t modify the mortgage without the “mortgagee’s” consent


This according to Straight Talk by Sharon Horstkamp, MERS Vice President and Corporate Counsel. Below is an excerpt of the newsletter:

The standard modification agreement
is between the Borrower and
the Lender. The agreement amends
and supplements (1) the Mortgage,
Deed of Trust or Deed to Secure
Debt (Security Instrument) and (2)
the Note bearing the same date as,
and secured by, the Security
Instrument. Prior to MERS, the
standard agreement worked
because the Lender was the mortgagee
of record and could modify
the mortgage and also had the
authority to modify the Note.

However, if MERS is the mortgagee
of record, the Lender can’t
modify the mortgage without the
“mortgagee’s” consent. Therefore,
Fannie Mae and Freddie Mac
changed the modification agreements
to reflect MERS as the mortgagee
of record.

Their change states the Agreement
amends and supplements the
Mortgage, Deed of Trust or Deed to
Secure Debt (Security Instrument)
granted or assigned to Mortgage
Electronic Registration Systems,
Inc., as nominee for the Lender.
The change also recommended a
signature line be added for MERS to
sign the agreement in its mortgagee
capacity. A MERS certifying officer
can sign the Agreement. It is important
to note that a MERS signature
doesn’t replace the Lender’s signature,
because MERS isn’t modifying
the note. Therefore, the Lender and
MERS must sign the document.

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



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FDIC Chairman Sheila C. Bair Addresses Robo-Signers

FDIC Chairman Sheila C. Bair Addresses Robo-Signers


Remarks by FDIC Chairman Sheila C. Bair to the Urban Land Institute, Washington, DC
October 13, 2010
Opener

Good afternoon. Thank you for inviting me to speak. The real estate sector has played a leading role in the recession and financial turmoil we have experienced in the past few years. The downturn in residential real estate markets and the ensuing financial crisis plunged the country into deep recession.

The economy is now recovering, but progress is slow, and the effects of the recession — including high unemployment — are likely to persist for some time. Once again, the health of the real estate sector will be crucial in determining the path of the entire economy. Restoring stability and normalcy to residential and commercial real estate markets will be essential to establishing a more robust economic recovery. But we still have a lot of work to do to repair our system of mortgage finance.

What I would like to discuss with you today is the work that needs to be done — in the short term and over the long term — to restore the vitality of real estate finance and the stability of our financial system.

Outlook for Housing and the Mortgage Market

After three long and difficult years for the housing sector, we’ve begun to see positive signs — but also continue to see hurdles to overcome. Home prices have largely stabilized in most markets. The Case-Shiller 10-city home price index, which declined by some 33 percent from the height of the crisis, has risen by just over 4 percent in the past year.

Federal policy initiatives — including tax credits for new buyers, the Treasury’s Home Affordable Modification Program, and the Federal Reserve purchases of mortgage-backed bonds — have played an important role in helping to restore stability to U.S. housing markets. But these initiatives come at the price of unprecedented government intervention. Through the FHA and the GSEs, nearly 60 percent of all mortgages outstanding today have government backing. Of the nearly $2.5 trillion in loan originations since 2009, about 94 percent were guaranteed by the GSEs, the FHA or the VA. In addition, the Federal Reserve has purchased more than $1 trillion of mortgage-backed securities.

And despite this unprecedented intervention, many challenges exist. Expiration of the homebuyer tax credit in April led to a second-quarter slump in new home sales and building-related retail sales that helped to slow the pace of economic growth over the summer.

Mortgage Foreclosures Trends

Meanwhile, a sustained high volume of mortgage foreclosures has been adding to the number of vacant homes and distressed sales. Some 2.4 million mortgages remained in the foreclosure process at the end of June, while another 2.7 million mortgages were at least 60 days past due. As of June, an estimated 11 million homeowners, or nearly 1 in 4 of those with mortgages, were underwater, owing more than their homes are worth. Not only are these borrowers generally unable to take advantage of today’s record low mortgage rates to refinance, but they become more likely to walk-away from their mortgages.

We also need to move away from incentives that encourage the lax underwriting that we saw prior to the crisis.

Sometimes I wonder: Have lenders really learned their lessons?

Just a few days ago, I received a flier from a mortgage lender offering 3.75% fixed rates programs up to 125% of value, and 24-hour underwriting.

And now we have the added concern that lenders may have been foreclosing on homes without proper documentation. The “robo-signing” of foreclosure documents is a serious matter for loan servicers, homeowners, and the entire industry. Upon initial review, it appears that FDIC supervised non-member state banks did not engage in this behavior and have limited exposure to loans signed by “robo-signers.”

We continue to closely monitor the situation, including working with other regulators through our backup examination capacity where the FDIC is not the primary federal regulator. We are also requesting certifications from loss share participants in our failed bank transactions that their foreclosure activity complies with all legal requirements.

The robo-signer situation underscores how wrong things went in the financial crisis and that there is still a lot of work to do. Foreclosure is a costly, unpleasant, and emotional process. It hurts communities and families alike. It should be a last resort. Loan modifications should be considered whenever possible. Foreclosure should only come after careful thought, thorough analysis, and good documentation.

Properly Aligning Incentives and the “Safe Harbor” Rule

The robo-signing issue also points to the poorly aligned incentives that have existed in the mortgage servicing business. Because the pricing of mortgage securitization deals did not adequately provide for special servicing, servicers were not funded or adequately staffed to address problems.

Not only that, servicers are often required to advance principal and interest on nonperforming loans to securitization trusts — but are quickly reimbursed for foreclosure costs. These incentives can have the effect of encouraging foreclosures, while discouraging modifications.

To address these and other problems, the FDIC recently adopted a new rule on securitizations. The new rule requires that the issue of servicer incentives be addressed in order to obtain safe-harbor status. Servicing agreements must provide servicers with the authority to act to mitigate losses in a timely manner and modify loans in order to address reasonably foreseeable defaults. The agreements must require the servicer to act for the benefit of all investors, not for any particular class of investors.

The rule also addresses a recurring problem in servicing: the obligation for servicers to continue funding payments missed by borrowers. Under most current servicing agreements, this obligation has the effect of accelerating foreclosures as servicers seek to recover these payments by selling the home. Our new rule strictly limits advances to just three payments unless there is a way to repay the servicer that does not rely on foreclosure.

While the FDIC’s new rule will help create positive incentives for servicing, it is, by the nature of our authority, limited to banks. The Dodd-Frank financial reform law now provides a chance to improve incentives across the market, whether the securitization is issued by a bank or not. Dodd-Frank requires regulations governing the risk retained by a securitizer. Those regulations may reduce the standard 5 percent risk-retention where the loan poses a reduced risk of default.

Given the important role that quality servicing plays in mitigating the incidence of default, I believe that the new regulations should address the need for reform of the servicing process. We want the securitization market to come back, but in a sustainable manner.

Its return should be characterized by strong disclosure requirements, high-quality loans, accurate documentation, better oversight of servicers, and incentives to assure that servicers act to maximize value for all investors.

The Government’s Footprint in the Mortgage Market

Looking down the road, the big question on everyone’s mind is what to do about federal government involvement in mortgage lending. For now, federal involvement is needed to keep credit flowing on reasonable terms to the housing market as the economy and the financial system recover. But going forward, there needs to be a broader debate about the future role of government in mortgage finance and the housing sector.

In hindsight, the implicit government backing enjoyed by the mortgage GSEs, where profits were privatized and the risks were socialized, was an accident waiting to happen. The time has come to take a hard look at the full range of housing policies and programs, including the size and nature of tax breaks and other subsidies to owner-occupied and rental real estate. As a nation, we must shift our focus away from narrow, short-term political interests and toward policies that create long-term sustainable improvement in the living standards of all Americans.

Commercial Real Estate Lending

We also face significant challenges in commercial real estate. Average CRE prices are down by 30 to 40 percent or more from their peak levels of 2007, and rents continue to drop for most property types and in most geographic markets.

Credit availability has also been limited as lenders have tightened standards, issuers have virtually stopped offering commercial mortgage-backed securities, and the credit standing of many borrowers has declined. FDIC-insured institutions hold about half of the $3.5 trillion in CRE loans outstanding, which means we’ve been focused on commercial real estate for a very long time. Lenders will continue to face some tough choices when loans come up for renewal with collateral values that have declined significantly from peak levels.

The federal regulatory agencies issued guidance last Fall designed to provide more clarity to banks on how to report those cases where they had restructured problem loans. This was an important step to reduce uncertainty as to how restructuring efforts would be viewed and reported for regulatory purposes.

Some have criticized these loan workouts as a policy of “extend and pretend.” But, as on the residential side, the restructuring of commercial real estate loans around today’s cash flows and today’s low interest rates may be preferable to the alternative of foreclosure and the forced sale of a distressed property. And going forward, as is the case with residential mortgage lending, we need better risk management and stronger lending standards for bank and nonbank originators to help prevent a recurrence of problems in commercial real estate finance.

Conclusion

Obviously, these remain very challenging times for the real estate industry, and for our economy at large. Recovery of the U.S. real estate sector will take time. Problem loans will need to be worked out or written off, and credit channels will have to be re-established around a sounder set of market practices.

As this is taking place, the FDIC and other regulators will be doing our part to promptly and carefully implement the various elements of Dodd-Frank. We are committed to transparency and openness in this process, and have established an open-door policy to make it easier for the public to give input and track the rulemaking process.

I know there is a lot of concern out there right now that Washington and the business community are at cross purposes, and that financial regulatory reform could become an impediment to the economic recovery. I understand these concerns.

But I want to emphasize to you, as I said at the outset of my remarks, that I firmly believe that we share the same basic goals: to restore the vitality of real estate finance and the stability of our financial system. The American people have paid a high price for the mistakes, excesses and abuses of the past. And there is plenty of blame to go around.

I think they are looking for us, as leaders in government and business, to work together and come up with common sense approaches that will put our financial system on a sounder and steadier path for the future. I have outlined some of my thoughts on what needs to be done, and I am looking forward to hearing your thoughts as well in the Q&A session.

We have many challenges before us. But we are Americans. And that means that when the challenges are the greatest, we work together to resolve differences, find solutions and fix the problem. That knowledge, of who we are and what we’re capable of, should give all of us confidence that the future remains bright despite the challenges of the present. Thank you.

Last Updated 10/13/2010 communications@fdic.gov


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



Posted in assignment of mortgage, fdic, foreclosure, foreclosure fraud, foreclosures, robo signers, servicers, sheila bair, TrustsComments (3)

Clogged foreclosure pipeline may lead to DJSP layoffs

Clogged foreclosure pipeline may lead to DJSP layoffs


DinSFLA here: Side note…DJSP recently signed what may be the largest lease in Orlando this year. They plan to open a 12,870-square-foot in Highwoods Properties’ Landmark Center Two, near Lake Eola.

by Austin Kilgore September 9, 2010

The clogged foreclosure pipeline is delaying new foreclosure filings, and Florida-based processing services firm DJSP Enterprises said it’s considering layoffs to deal with the decreased business.

DJSP Enterprises’ main client is The Law Offices of David J. Stern, P.A. (DJSPA). In the DJSP Enterprises second quarter 2010 and mid-year earnings report released this week, the company said a slow down in new foreclosure filings will likely necessitate cost cutting and personnel layoffs. The company said it initially believed file volume would increase in the third quarter, leading to the decision to maintain current staffing levels. However, file volumes continue to be delayed and existing staffing levels are not sustainable indefinitely, the report said.

“While a large portion of our business can only be processed with human capital, we are identifying opportunities where technology and process change can be implemented to create efficiency,” recently-appointed DJSPA President and COO Richard “Rick” Powers said in the financial statement. “We are prepared to create efficiencies and make cuts where appropriate over the next three to six months.”

Continue reading ….REO Insider

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



Posted in Bank Owned, djsp enterprises, foreclosure, foreclosure mills, foreclosures, jobless, Law Offices Of David J. Stern P.A., mortgage, REO, stock, title company, Wall StreetComments (3)

NY SUPREME COURT finds RECORDING DEFECTS |Mortgage Electronic Registration Systems Inc., v. Lisser

NY SUPREME COURT finds RECORDING DEFECTS |Mortgage Electronic Registration Systems Inc., v. Lisser


This is an action pursuant to RP APL Article 15 in which determination of its interest in real property, and to direct the Nassau County Clerk’s Office to accept a copy of a deed and mortgage for recording, insofar as the originals were misplaced and never recorded.

  • the Court seeks an explanation as to why the Affidavit of Merit is provided by a principal of the United General Title Insurance Company. What is the relationship of that company to Plaintiff? What authority does the affiant have to speak on behalf of Plaintiff? What is the basis of the affiant’s personal knowledge?
  • the Court questions whether or not MERS, as nominee for Am Trust Bank has standing to bring this action. A party who “claims an estate or interest in real property” may bring an action under Article 15 of the RPAPL. RPAPL ~1501(1). “The interest had by any mortgagee” is an interest in real property for purposes of bringing such an action. ~RPAPL1501(5). Is MERS a mortgagee for purposes of Article 15, or is MERS the mortgagee only for recording purposes? Can MERS bring this action without a Power of Attorney from the beneficial owner of the Mortgage?

Finally, the Court is reluctant to grant declaratory or other relief without evidence of the recorded interests in the Property from July 20 2007 and the current state of title.

[ipaper docId=36625524 access_key=key-27n9yhwldi5upd4adt9n height=600 width=600 /]

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



Posted in chain in title, conflict of interest, conspiracy, foreclosure, foreclosure fraud, foreclosures, MERS, MERSCORP, mortgage, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., note, Real Estate, sewer service, trustee, TrustsComments (0)

From Paper to Electronic: Exploring the Fraud Risks Stemming From the Use of Technology

From Paper to Electronic: Exploring the Fraud Risks Stemming From the Use of Technology


Hmm…now doesn’t this ring close to home?

From Paper to Electronic: Exploring the Fraud Risks Stemming From the Use of Technology to Automate the Australian Torrens System

By Rouhshi Low

Interesting points:

In all electronic systems, land title instruments are prepared electronically. This may make it easier for fraudulent persons with access to the system to perpetrate fraudulent alterations, because unlike a physical alteration, an electronic alteration on an electronic document will not leave any physical evidence of the alteration.

In the paper system, the practice of the Land Titles Office manually checking instruments lodged for registration before updating the register may be said to act as a safeguard against this type of fraud, since any alteration of an instrument might leave some form of a physical mark which might then be noticed by the officer and appropriate action may then be taken. Of course the effectiveness of this safeguard depends on the vigilance of the examining officer.

It is observed that these considerations do not arise in the paper registration system. They are unique to an electronic system because of the use of technology to replace the handwritten signature. In the paper system, handwritten signatures can be forged, but there was never a requirement or a need for individuals to keep their signatures safe. It is simply not possible. Replacing handwritten signatures with digital signatures introduces a new element into the process. And because of the potential for fraud whether because the fraudulent person has managed to obtain an existing digital certificate/PSP or circumvented the registration process to obtain one, the use of digital signatures therefore imposes ‘new’ obligations on users as well as the entity responsible for the registration process that do not exist in the paper system. The user is now responsible for keeping the digital certificate/PSP safe. The entity issuing the digital certificate/PSP is responsible for developing and maintaining effective registration processes to minimize the risk of a fraudulent person impersonating an authorised user. In fact, attacking the registration process in this manner is an additional avenue for the fraudulent person to perpetrate identity fraud so that it could be said that in an electronic system, there might be two opportunities for identity fraud: (i) identity fraud of the owner of the land and (ii) identity fraud of an authorized user of the system.

So to perpetrate fraud in an electronic registration system, the solicitor would not even need to forge the victim’s signature, or mislead the client into signing documents, or create false powers of attorney, or fraudulently alter instruments, as is the case in the paper registration system. All that the solicitor would have to do would be to prepare the instrument, digitally sign it and submit it to the Land Titles Office for registration. As noted above, being able to fraudulently use a digital certificate/PSP to digitally sign instruments for lodgement and registration is a new opportunity for fraud in an electronic system. As seen in the discussion here, solicitors will have the greatest opportunity to perpetrate this new type of fraud.

In all the electronic systems, clients no longer sign land title instruments for registration. Rather an authorisation form is signed instead. This change in practice may see a shift in forgery cases – instead of forging the signature of the victim on the land title instrument, fraudulent persons will now have to forge the signature of the victim on the authorisation form.

The concern in abolishing the paper certificate of title in an electronic registration system is that it will result in more identity fraud. When the New Zealand system was introduced, Thomas argued that ‘[T]he absence of an outstanding duplicate certificate of title (or anything in substitution of the same) is argued to be a key flaw in the new system, making it more vulnerable to fraud’.63

But will this be the case? It is argued that identity fraud might be perpetrated in an electronic registration system in the same way as in the paper registration system – when the fraudulent person is able to successfully impersonate the victim of the fraud to convince the authorised user responsible for the transaction that he or she has a right to deal with the land. The difference is that in the paper registration system, since the certificate of title is the document used to evidence a right to deal with the land, identity fraud uses the certificate of title. In an electronic registration system, the manner in which identity fraud may be perpetrated would depend on the system and how identity and right to deal might be established.

[ipaper docId=35988900 access_key=key-kdw163zwfgg5k11v3i1 height=600 width=600 /]

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



Posted in concealment, conflict of interest, CONTROL FRAUD, foreclosure fraud, forgery, mortgage, Notary, notary fraud, note, Real Estate, robo signers, trade secretsComments (2)

Fannie Mae’s Announcing Miscellaneous Servicing Policy Changes

Fannie Mae’s Announcing Miscellaneous Servicing Policy Changes


Highlights:

Retirement of HomeSaver Advance
Servicing Guide, Part VII, Section 609: HomeSaver Advance

Technology Usage and Electronic Invoice Submission Charges to Attorneys and Trustees
Servicing Guide, Part VII, Section 501.03: Allowable Attorney Fees, and Part VIII, Section 104.04: Attorney (or Trustee) Fees

Prohibition Against Servicer-Specified Vendors for Fannie Mae Referrals
Servicing Guide, Part VII, Section 501.03: Allowable Attorney Fees, and Part VIII, Section 104.04: Attorney (or Trustee) Fees

Prohibition on Outsourcing Fees, Referral Fees, Packaging Fees, and Similar Fees
Servicing Guide, Part VII, Section 501.03: Allowable Attorney Fees, and Part VIII, Section 104.04: Attorney (or Trustee) Fees

Attorney or Trustee File Transfers
Servicing Guide, Part VII, Section 501: Selection of Bankruptcy Attorneys and Avoiding Delays in Case Processing, and Part VIII, Section 104: Referral to Foreclosure Attorney/Trustee

New Documentation Aging Requirements Established for Loss Mitigation Options
Servicing Guide, Part VII, Section 601.01: Requesting Preliminary Financial Information

Mandatory Nature of Retained Attorney Network
Servicing Guide, Part VII, Section 501.01: Fannie Mae-Retained Attorneys, and Part VIII, Section 104.01: Fannie Mae-Retained Attorneys

Deeds-in-Lieu of Foreclosure
Servicing Guide, Part VII, Section 606: Deeds-in-Lieu of Foreclosure

Clarification Regarding Foreclosure Actions in the Name of Mortgage Electronic Registration System (MERS)

Monitoring Pooled from Portfolio (PFP) Mortgage Loans

Announcement 08-31, Fannie Mae 2009 Single-Family Master Trust Agreement, the Amended and Restated 2007 Single-Family Master Trust Agreement, and Certain Servicing Clarifications and Changes, Including Expanded Loss Mitigation Flexibility, and Announcement 07-03R, Reissuance of the Instructions for the Fannie Mae Single-Family MBS Master Trust Agreement

Servicer Responsibilities for Non-Escrow Mortgage Loans
Servicing Guide, Part III, Section 103: Escrow Deposit Accounts

Audit Confirmation Request Process Changes
Servicing Guide, Part X, Section 106: Audit Confirmations

[ipaper docId=35369764 access_key=key-hwlb9q7zv7ait78hgtk height=600 width=600 /]

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



Posted in fannie mae, STOP FORECLOSURE FRAUDComments (1)

Uniform Real Property Electronic Recording Act (URPERA)

Uniform Real Property Electronic Recording Act (URPERA)


DinSFLA Here: Now if we just put these time frames such as ‘1999’ with all that is happening today we arrive to some answers…Don’t we?

Electronic communications make it possible to conduct old transactions in new forms.  Some of the oldest kinds of transactions governed by law are transactions in real estate:  for example, sales, leases and mortgages.  In the Middle Ages transactions in real estate were conducted symbolically, without paper or signatures.  Writing, printing and more universal literacy brought paper deeds, mortgages and leases, memorialized by words on paper with manual signatures.   These were filed in public records to establish who had rightful title to any piece of land.  Several centuries have gone by since that initial migration to the then-new technology of paper documents and manual signatures.  A new technology of computers, software to run them, and electronic communications has come to replace paper.  The law of real property must now make a transition to accommodate the new technology.  The efficiency of real estate markets makes this imminently necessary.

This long dependence on paper, however, casts up certain barriers to using electronic communications to carry on real estate transactions.  The law of the states of the United States has many “statute of fraud” requirements that inhibit the use of electronic communications.  Statute of fraud requirements put total and express reliance upon paper documents and manual signatures to make transactions enforceable.  No paper, no enforcement.  These same requirements have also made it more difficult to develop electronic analogues to transactions in paper that are equally enforceable.

The first step to remedy the problem took place in 1999 when the Uniform Law Commissioners promulgated the Uniform Electronic Transactions Act (UETA).  This act adjusted statute of fraud provisions to include electronic “records” and “signatures” for the memorialization of all kinds of transactions, including basic transactions in real estate.  It is possible to have sale contracts, mortgage instruments (in whatever form a jurisdiction uses) and promissory notes memorialized in electronic form with electronic signatures that will now be treated the equal of the same paper documents with manual signatures.  This is the result of the widespread enactment of UETA and of the subsequent enactment of the Electronic Signatures in Global and National Commerce Act (E-Sign) by Congress.

Real estate documents must be recorded on public records to be effective.  Recording takes place in most states in a county office devoted to keeping these records.  Recording protects current interests in real estate by clarifying who holds those interests.  The chain of title leading to the current title-holder, meaning the historic record of documents relating to transactions for a specific piece of real estate, establishes the marketability of that piece of real estate by the current owner of interests in it.  The real estate records establish this chain of title.  State law governs these local recording offices, and there are requirements in the law of every state relating to the originality and authenticity of paper documents that are presented for recording.  UETA included optional provisions dealing with governmental authority, including that of local governments, to accept and utilize electronic records.  However, not all states adopted these optional provisions, and confusion still persisted whether these provisions, coupled with the rest of UETA, authorized recordation of electronic records.

The Uniform Real Property Electronic Recording Act (URPERA) removes any doubt with regard to the ability of a local recording office to accept and otherwise process electronic documents and signatures for recording.  Further, there must be an orderly conversion of every recording office in the United States for electronic recording to become accepted universally.  That will be a complex process, but it needs a starting point in the law.  URPERA, promulgated by the Uniform Law Commissioners in 2004, provides that essential start.

The act does three fairly simple things that will have monumental effect.  First, it establishes that any requirement for originality, for a paper document or for a writing manually signed before it may be recorded, is satisfied by an electronic document and signature.  This is essentially an express extension of the principles of UETA and E-Sign to the specific requirements for recording documents relating to real estate transactions in any state.  Second, it establishes what standards a recording office must follow and what it must do to make electronic recording effective.  For example, the office must comply with standards set by the board established in a state to set them.  It must set up a system for searching and retrieving electronic documents.  There are a minimum group of requirements established in URPERA.  Third, URPERA establishes the board that sets statewide standards and requires it to set uniform standards that must be implemented in every recording office.

These may be simple steps in the law, but the entire process of implementing electronic recording of electronic real estate documents will be complex from state to state.  Inserting URPERA in the law of a state requires careful scrutiny of its real estate law.  If paper documents are effective, for example, when they are time-stamped when delivered to a recording office, when should electronic documents that may be delivered electronically when an office is closed be considered effective?  Answers to questions like this one will take some work and some complex decisions as URPERA is considered for enactment in any state.

Notwithstanding this need for careful effort, it is important to make the start on electronic recording of real estate documents.  Real estate transactions involve billions of dollars in the United States.  The efficiency of real estate markets depends upon the adoption of technology to make them faster and more competitive.  After UETA and E-Sign, the key is URPERA.  Every state needs to consider it as soon as possible.

More info…ElectronicRecording.org

RELATED ARTICLE:

Electronic Property Document Recording (ERDS)

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



Posted in deed of trust, heloc, mortgage, note, Real EstateComments (1)

THE FLORIDA BAR vs. DAVID J. STERN

THE FLORIDA BAR vs. DAVID J. STERN


I wonder if this was disclosed on DJSP Enterprise’s Prospectus letting investors be aware of this below…

David James Stern, 801 S. University Drive, Ste. 500, Plantation, reprimanded for professional misconduct following an October 24 court order. (Admitted to practice: 1991) Prior to 1999, Stern’s law firm filed potentially misleading affidavits in connection with abstraction work performed for foreclosures handled by the firm. Stern used personnel employed by his law firm to do the abstracting work rather than employees of his title company.(Case no. SC02-1991)

His address is also 900 South Pine Island Road Ste 400, Plantation FL 33324

Yoo Hoo….Bar you mean like this….HERE

[ipaper docId=34497819 access_key=key-1v3hmd3whnpyout9rn6l height=600 width=600 /]

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



Posted in djsp enterprises, foreclosure, foreclosure mills, foreclosures, Law Offices Of David J. Stern P.A., stockComments (1)

Townhouse for sale…but with a catch

Townhouse for sale…but with a catch


Listen up Real Estate agents as you are well too familiar with this tale.

Previously I wrote a post  ARE FORECLOSURE MILLS Coercing Buyers for BANK OWNED homes? ARE ALL THE MILLS? and just today I received another example of these foreclosure mills working hand in hand as title companies demanding you use their terms or else get NO CONTRACT.

Here is the example of this agent from Coldwell Banker who clearly states

“FannieMaeHomePath-Purchase this property for as little as 3% down. This property approved for HomePath Mortgage Financing. Approved for HomePath Renovation Mortgage Financing. Large 3 bedroom unit with two full baths. 2nd floor master suite has hardwood floors and a huge closet. Upgraded kitchen has granite countertops and cherry wood cabinets. Laundry Room.  Fenced yard for added privacy.”

“REO Addendum not furnished until acceptance-See IMPORTANT attachments & Follow**Use FAR9 Contract-No Calls Please- EMAIL only: UNIT HAS NO APPLIANCES.”

Well here’s the catch, I got a sneak peek…read the last few sentences to discover the major RESPA VIOLATION among other serious issues.

I am sure Coldwell Banker would be estatic to see agents working in this fashion as well as Fannie Mae having their addendum crossed out in certain areas.

[ipaper docId=33202164 access_key=key-kovwb3di6vj5wqfk52w height=600 width=600 /]


RELATED STORY:

AGENTS BEWARE! HERE COME THE HAFA VENDORS aka LPS AFTER YOUR COMMISSION

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



Posted in coercion, concealment, conspiracy, CONTROL FRAUD, djsp enterprises, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, Law Offices Of David J. Stern P.A., law offices of Marshall C. Watson pa, respa, ViolationsComments (0)

National foreclosure auctions go online via LPS: "CAVEAT EMPTOR"

National foreclosure auctions go online via LPS: "CAVEAT EMPTOR"


Submitted by Kevin Turner on April 16, 2010 – 4:56pm Market Value

The Duval County Clerk’s Office has offered online bidding for foreclosed properties for some time, and now Jacksonville-based Lender Processing Services is bringing bank-foreclosures all over the U.S. online.

Through its LPSAuctions.com Web site, LPS is to open bidding on single-family homes, condominiums and town homes from Coral Springs to Tacoma, Wash. The bid deadline for the homes listed in the “Spring Clearance” auction on the site is May 10.

So now it’s official they have they’re hands in all Real Estate! My question is how…why would any state permit them to sell anything if they are under the scope of the FEDS?? Take a look below.

RELATED ARTICLES:

AGENTS BEWARE! HERE COME THE HAFA VENDORS aka LPS AFTER YOUR COMMISSION

LPS Asset Management Launches Short-Sale Service: “CAVEAT EMPTOR”

LENDER PROCESSING SERVICES (LPS) Hits Local NEWS!

After ongoing INVESTIGATIONS: Lender Processing Services (LPS) closed the offices of its subsidiary, Docx, LLC, in Alpharetta, Georgia

EXTRA! EXTRA! Read All about the misconduct of Lender Processing Services f/k/a FIDELITY a/k/a LPS

U.S. Probing LPS Unit Docx LLC: Report REUTERS

U.S. Probes Foreclosure-Data Provider:Lender Processing Services Unit Draws Inquiry Over the Steps That Led to Faulty Bank Paperwork (LPS VIDEOS)

Feds Investigating LPS Subsidiary DOCX: Jacksonville Business Journal

Fidelity’s LPS Secret Deals With Mortgage Companies and Law Firms

TOPAKO LOVE; LAURA HESCOTT; CHRISTINA ALLEN; ERIC TATE …Officers of way, way too many banks Part Deux “The Twilight Zone”

Stopping A Defective Title Wave With A Coupla Outstretched Helping Hands

BOGUS ASSIGNMENTS 2…I’m LOVING this!! LPS DOCx ADMISSIONS SEC 10K ROOFTOP SHOUT OUT!

 

Posted in concealment, conspiracy, corruption, DOCX, foreclosure fraud, foreclosure mills, forensic mortgage investigation audit, fraud digest, Lender Processing Services Inc., LPS, Lynn Szymoniak ESQ, MERS, Mortgage Foreclosure FraudComments (1)

MERS KISS: Keep It Simple Stupid… "SCAM"

MERS KISS: Keep It Simple Stupid… "SCAM"


If self nominating officers signing on

behalf of MERS, et al~ wasn’t good

enough…

The Voice of the White House

Washington, D.C., February 24, 2010:  Although only bankers are aware of it, there is a second wave of economic disaster starting to build up that will make the earlier one pale into insignificance. Let us start out with MERS, shall we?

MERS = Mortgage Electronic Registration Inc.holds approximately 60 million American mortgages and is a Delaware corporation whose sole shareholder is Mers Corp. MersCorp and its specified members have agreed to include the MERS corporate name on any mortgage that was executed in conjunction with any mortgage loan made by any member of MersCorp. Thus in place of the original lender being named as the mortgagee on the mortgage that is supposed to secure their loan, MERS is named as the “nominee” for the lender who actually loaned the money to the borrower. In other words MERS is really nothing more than a name that is used on the mortgage instrument in place of the actual lender. MERS’ primary function, therefore, is to act as a document custodian. MERS was created solely to simplify the process of transferring mortgages by avoiding the need to re-record liens – and pay county recorder filing fees – each time a loan is assigned. Instead, servicers record loans only once and MERS’ electronic system monitors transfers and facilitates the trading of notes. It has very conservatively estimated that as of February, 2010, over half of all new residential mortgage loans in the United States are registered with MERS and recorded in county recording offices in MERS’ name

MersCorp was created in the early 1990’s by the former C.E.O.’s of Fannie Mae, Freddie Mac, Indy Mac, Countrywide, Stewart Title Insurance and the American Land Title Association. The executives of these companies lined their pockets with billions of dollars of unearned bonuses and free stock by creating so-called mortgage backed securities using bogus mortgage loans to unqualified borrowers thereby creating a huge false demand for residential homes and thereby falsely inflating the value of those homes. MERS marketing claims that its “paperless systems fit within the legal framework of the laws of all fifty states” are now being vetted by courts and legal commentators throughout the country.

The MERS paperless system is the type of crooked rip-off scheme that is has been seen for generations past in the crooked financial world. In this present case, MERS was created in the boardrooms of the most powerful and controlling members of the American financial institutions. This gigantic scheme completely ignored long standing law of commerce relating to mortgage lending and did so for its own personal gain. That the inevitable collapse of the crooked mortgage swindles would lead to terrible national repercussions was a matter of little or no interest to the upper levels of America’s banking and financial world because the only interest of these entities was to grab the money of suckers, keep it in the form of ficticious bonuses, real estate and very large accounts in foreign banks. The effect of this system has led to catastrophic meltdown on both the American and global economy.

MERS, as has clearly been proven in many civil cases, does not hold any promissory notes of any kind. A party must have possession of a promissory note in order to have standing to enforce and/or otherwise collect a debt that is owed to another party. Given this clear-cut legal definition,  MERS does not have legal standing to enforce or collect on the over 60 million mortgages it controls and no member of MERS has any standing in an American civil court.

MERS has been taken to civil courts across the country and charged with a lack of standing in reposession issues. When the mortgage debacle initially, and inevitably, began, MERS always routinely brought actions against defaulting mortgage holders purporting to represent the owners of the defaulted mortgages but once the courts discovered that MERS was only a front organization that did not hold any deed nor was aware of who or what agencies might hold a deed, they have routinely been denied in their attempts to force foreclosure.  In the past, persons alleging they were officials of MERS in foreclosure motions, purported to be the holders of the mortgage, when, in fact, they not only were not the holder of the mortgage but, under a court order, could not produce the identity of the actual holder. These so-called MERS officers have usually been just employees of entities who are servicing the loan for the actual lender. MERS, it is now widely acknowledged by the courts, has no legal right to foreclose or otherwise collect debt which are evidenced by promissory notes held by someone else.

The American media routinely identifies MERS as a mortgage lender, creditor, and mortgage company, when in point of fact MERS has never loaned so much as a dollar to anyone, is not a creditor and is not a mortgage company. MERS is merely a name that is printed on mortgages, purporting to give MERS some sort of legal status, in the matter of a loan made by a completely different and almost always,a totally unknown entity.

The infamous collapse of the American housing bubble originated, in the main, with one Angelo Mozilo, CEO of the later failed Countrywide Mortgage.

Mozilo started working in his father’s butcher shop, in the Bronx, when he was ten years old. He graduated from Fordham in 1960, and that year he met David Loeb. In 1968, Mozilo and Loeb created a new mortgage company, Countrywide, together. Mozilo believed the company should make special efforts to lower the barrier for minorities and others who had been excluded from homeownership. Loeb died in 2003

In 1996, Countrywide created a new subsidiary for subprime loans.

  • Countrywide Financial’s former management
  • Angelo R. Mozilo, cofounder, chairman of the board, chief executive officer
  • David S. Loeb, cofounder, President and Chairman from 1969 to 2000
  • David Sambol, president, chief operating officer, director
  • Eric P. Sieracki, chief financial officer, executive managing director
  • Jack Schakett, executive managing director, chief operating officer
  • Kevin Bartlett, executive managing director, chief investment officer
  • Andrew Gissinger, executive managing director, chief production officer, Countrywide Home Loans[14]
  • Sandor E. Samuels, executive managing director, chief legal officer and assistant secretary
  • Ranjit Kripalani, executive managing director and president, Capital Markets
  • Laura K. Milleman, senior managing director, chief accounting officer
  • Marshall Gates, senior managing director, chief administrative officer
  • Timothy H. Wennes, senior managing director, president and chief operating officer, Countrywide Bank FSB
  • Anne D. McCallion, senior managing director, chief of financial operations and planning
  • Steve Bailey, senior managing director of loan administration, Countrywide Home Loans

The standard Countrywide procedure was to openly solicit persons who either had no credit or could not obtain it, and, by the use of false credit reports drawn up in their offices, arrange mortgages. The new home owners were barely able to meet the minimum interest only payments and when, as always happens, the mortgage payments are increased to far, far more than could be paid, defaults and repossessions were inevitable. Countrywide sold these mortgages to lower-tier banks which in turn, put them together in packages and sold them to the large American banks. These so-called “bundled mortgages” were quickly sold these major banking houses to many foreign investors with the comments that when the payments increased, so also would the income from the original mortgage. In 1996, Countrywide created a new subsidiary for subprime loans.

At one point in time, Countrywide Financial Corporation was regarded with awe in the business world. In 2003, Fortune observed that Countrywide was expected to write $400 billion in home loans and earn $1.9 billion. Countrywide’s chairman and C.E.O., Angelo Mozilo, did rather well himself. In 2003, he received nearly $33 million in compensation. By that same year, Wall Street had become addicted to home loans, which bankers used to create immensely lucrative mortgage-backed securities and, later, collateralized debt obligations, or C.D.O.s—and Countrywide was their biggest supplier. Under Mozilo’s leadership, Countrywide’s growth had been astonishing.

He was aiming to achieve a market share—thirty to forty per cent—that was far greater than anyone in the financial-services industry had ever attained. For several years, Countrywide continued to thrive. Then, inevitably, in 2007, subprime defaults began to rocket upwards , forcing the top American bankers to abandoned the mortgage-backed securities they had previously prized. It was obvious to them that the fraudulent mortgages engendered by Countrywide had been highly suceessful as a marketing program but it was obvious to eveyone concerned, at all levels, that the mortgages based entirely on false and misleading credit information were bound to eventually default. In August of 2007, the top American bankers cut off.   Countrywide’s short-term funding, which seriously hindered its ability to operate, and in just a few months following this abandonment,  Mozilo was forced to choose between bankruptcy or selling out to the best bidder.

In January, 2008, Bank of America announced that it would buy the company for a fraction of what Countrywide was worth at its peak. Mozilo was subsequently named a defendant in more than a hundred civil lawsuits and a target of a criminal investigation.  On June 4th, 2007 the S.E.C., in a civil suit, charged Mozilo, David Sambol, and Eric Sieracki with securities fraud; Mozilo was also charged with insider trading. The complaint formalized a public indictment of Mozilo as an icon of corporate malfeasance and greed.

In essence, not only bad credit risks were used to create and sell mortgages on American homes that were essentially worthless. By grouping all of these together and selling them abroad, the banks all made huge profits. When the kissing had to stop, there were two major groups holding the financial bag. The first were the investors and the second were, not those with weak credit, but those who had excellent credit and who were able, and willing to pay off their mortgages.

Unfortunately,  just as no one knows who owns the title to any home in order to foreclose, when the legitimate mortgage holder finally pays off his mortgage, or tries to sell his house, a clear title to said house or property cannot ever be found so, in essence, the innocent mortgage payer can never own or sell his house. This is a terrible economic time bomb quietly ticking away under the feet of the Bank of America and if, and when, it explodes, another bank is but a fond memory.

Readers wishing to find out if their title is secure should write to www.ChinkintheArmor.net, leave a comment on any article and ask for contact information for legal advice.

http://www.tbrnews.org/Archives/a3019.htm

Full Deposition of the Infamous Erica Johnson Seck RE: Indymac Federal Bank Fsb, Plaintiff, Vs. Israel a. Machado – 50 2008 CA 037322xxxx Mb

SOON TO BE FAMOUS ROGER STOTTS & DENNIS KIRKPATRICK VP’s, MERS, ATTORNEY in FACT, ONEWEST, INDYMAC, Deutsche BANK et al~~

BOGUS ASSIGNMENTS 3…Forgery, Counterfeit, Fraud …Oh MY!

Posted in chase, concealment, conspiracy, corruption, dennis kirkpatrick, erica johnson seck, fraud digest, geithner, george soros, indymac, Law Offices Of David J. Stern P.A., lehman brothers, Lender Processing Services Inc., LPS, michael dell, Mortgage Foreclosure Fraud, mozillo, note, onewest, roger stotts, scam, sewer service, steven mnuchin, Uncategorized, wachoiva, washington mutual, wells fargoComments (1)

New "Foreclosure Mill" Service Tactic?

New "Foreclosure Mill" Service Tactic?


Whenever I get any mail from anyone I make it a point to save the envelope! Since all outgoing mail postage stamps are “created” by Pitney Bowes machines in-house (foreclosing law firms)…dates can simply be omitted, NO DATE and might have gone “Lost in the Mail” or take a long…long…long…long…time to arrive to you. Oh NO! WE JUST GOT FORECLOSED without any warning!
I know when this is coming because I check my file but those of you who don’t …Take a look at what I mean before you end up in the streets. I am not certain what Pitney Bowes guidelines are but this might be wrong for anyone to do.

CHECK THE DATES

Check out this story on “sewer service

Not only are they post dating the assignments but the material inside the envelopes might be dated months before you get it …thanks to this new tactic!

Posted in erica johnson seck, fraud digest, Law Offices Of David J. Stern P.A., Lender Processing Services Inc., LPS, MERS, Mortgage Foreclosure Fraud, roger stotts, scam, sewer serviceComments (0)

GARY DUBIN LAW OFFICES FORECLOSURE DEFENSE HAWAII and CALIFORNIA
Kenneth Eric Trent, www.ForeclosureDestroyer.com

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