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RePOST: Open Letter to all attorneys who aren’t PSA literate by April Charney

RePOST: Open Letter to all attorneys who aren’t PSA literate by April Charney


Via: Max Gardner

Are You PSA Literate?

.

We are pleased to present this guest post by April Charney.

If you are an attorney trying to help people save their homes, you had better be PSA literate or you won’t even begin to scratch the surface of all you can do to save their homes. This is an open letter to all attorneys who aren’t PSA literate but show up in court to protect their client’s homes.

First off, what is a PSA? After the original loans are pooled and sold, a trust hires a servicer to service the loans and make distributions to investors. The agreement between depositor and the trust and the truste and the servicer is called the Pooling and Servicing Agreement (PSA).

According to UCC § 3-301 a “person entitled to enforce” the promissory note, if negotiable, is limited to:

(1) The holder of the instrument;

(2) A nonholder in possession of the instrument who has the rights of a holder; or

(3) A person not in possession of the instrument who is entitled to enforce the instrument pursuant to section 3-309 or section 3-418(d).

A person may be a person entitled to enforce the instrument even though the person is not the owner of the instrument or is in wrongful possession of the instrument.

Although “holder” is not defined in UCC § 3-301, it is defined in § 1-201 for our purposes to mean a person in possession of a negotiable note payable to bearer or to the person in possession of the note.

So we now know who can enforce the obligation to pay a debt evidenced by a negotiable note. We can debate whether a note is negotiable or not, but I won’t make that debate here.

Under § 1-302 persons can agree “otherwise” that where an instrument is transferred for value and the transferee does not become a holder because of lack of indorsement by the transferor, that the transferee is granted a special right to enforce an “unqualified” indorsement by the transferor, but the code does not “create” negotiation until the indorsement is actually made.

So, that section allows a transferee to enforce a note without a qualifying endorsement only when the note is transferred for value.? Then, under § 1-302 (a) the effect of provisions of the UCC may be varied by agreement. This provision includes the right and ability of persons to vary everything described above by agreement.

This is where you MUST get into the PSA. You cannot avoid it. You can get the judges to this point. I did it in an email. Show your judge this post.

If you can’t find the PSA for your case, use the PSA next door that you can find on at www.secinfo.com. The provisions of the PSA that concern transfer of loans (and servicing, good faith and almost everything else) are fairly boilerplate and so PSAs are fairly interchangeable for many purposes. You have to get the PSA and the mortgage loan purchase agreement and the hearsay bogus electronic list of loans before the court. You have to educate your judge about the lack of credibility or effect of the lifeless list of loans as the Uniform Electronic Transactions Act specifically exempts Residential Mortgage-Backed Securities from its application. Also, you have to get your judge to understand that the plaintiff has given up the power to accept the transfer of a note in default and under the conditions presented to the court (out of time, no delivery receipts, etc). Without the PSA you cannot do this.

Additionally the PSA becomes rich when you look at § 1-302 (b) which says that the obligations of good faith, diligence, reasonableness and care prescribed by the code may not be disclaimed by agreement, but may be enhanced or modified by an agreement which determine the standards by which the performance of the obligations of good faith, diligence reasonableness and care are to be measured. These agreed to standards of good faith, etc. are enforceable under the UCC if the standards are “not manifestly unreasonable.”

The PSA also has impact on when or what acts have to occur under the UCC because § 1-302 (c) allows parties to vary the “effect of other provisions” of the UCC by agreement.

Through the PSA, it is clear that the plaintiff cannot take an interest of any kind in the loan by way of an A to D” assignment of a mortgage and certainly cannot take an interest in the note in this fashion.

Without the PSA and the limitations set up in it “by agreement of the parties”, there is no avoiding the mortgage following the note and where the UCC gives over the power to enforce the note, so goes the power to foreclose on the mortgage.

So, arguing that the Trustee could only sue on the note and not foreclose is not correct analysis without the PSA.? Likewise, you will not defeat the equitable interest “effective as of” assignment arguments without the PSA and the layering of the laws that control these securities (true sales required) and REMIC (no defaulted or nonconforming loans and must be timely bankruptcy remote transfers) and NY trust law and UCC law (as to no ultra vires acts allowed by trustee and no unaffixed allonges, etc.).

The PSA is part of the admissible evidence that the court MUST have under the exacting provisions of the summary judgment rule if the court is to accept any plaintiff affidavit or assignment.

If you have been successful in your cases thus far without the PSA, then you have far to go with your litigation model. It is not just you that has “the more considerable task of proving that New York law applies to this trust and that the PSA does not allow the plaintiff to be a “nonholder in possession with the rights of a holder.”

And I am not impressed by the argument “This is clearly something that most foreclosure defense lawyers are not prepared to do.”?Get over that quick or get out of this work! Ask yourself, are you PSA adverse? If your answer is yes, please get out of this line of work. Please.

I am not worried about the minds of the Circuit Court Judges unless and until we provide them with the education they deserve and which is necessary to result in good decisions in these cases.

It is correct that the PSA does not allow the Trustee to foreclose on the Note. But you only get there after looking at the PSA in the context of who has the power to foreclose under applicable law.

It is not correct that the Trustee has the power or right to sue on the note and PSA literacy makes this abundantly clear.

Are you PSA literate? If not, don’t expect your judge to be. But if you want to become literate, a good place to start is by attending Max Gardner’s Mortgage Servicing and Securitization Seminar.

April Carrie Charney

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Posted in STOP FORECLOSURE FRAUDComments (6)

ELSTON / LEETSDALE vs CWCAPITAL | FL 4DCA “did not file any evidence, affidavits or other documents, supporting…it was authorized …on behalf of the trust”

ELSTON / LEETSDALE vs CWCAPITAL | FL 4DCA “did not file any evidence, affidavits or other documents, supporting…it was authorized …on behalf of the trust”


DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT

January Term 2012

ELSTON/LEETSDALE, LLC, a Delaware limited liability company,
Appellant,

v.

CWCAPITAL ASSET MANAGEMENT LLC, solely in its capacity as
Special Servicer on behalf of U.S. BANK, N.A., Successor to STATE
STREET BANK AND TRUST COMPANY, as Trustee for the registered
holders of J.P. MORGAN CHASE COMMERCIAL MORTGAGE
SECURITIES CORP., MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2001-C1BC1,
Appellee.

No. 4D11-3151

[April 4, 2012]

POLEN, J.

Elston/Leetsdale, LLC (Elston) appeals the trial court’s non-final
order, requiring it to make payments to CWCapital Asset Management
LLC, solely in its capacity as special servicer on behalf of U.S. Bank,
N.A., successor to State Street Bank and Trust Company, as trustee for
the Registered Holders of J.P. Morgan Chase Commercial Mortgage
Securities Corp., Mortgage Pass-Through Certificates, Series 2001-
C1BC1 (CW) during the pendency of the action. Because CW did not
properly plead standing, we reverse.

The facts are as follows. Elston executed a promissory note as
evidence of a loan made by First Union National Bank; to secure
payment, Elston executed a mortgage and security agreement, along with
an assignment of leases and rents. First Union assigned its rights in the
loan documents to Morgan Guaranty Trust Company of New York, which
then assigned its right, title and interest in the loan to State Street Bank
and Trust Company, as Trustee for J.P. Morgan Chase Commercial
Mortgage Securities Corp., Series 2001-C1BC1 (the trust). Presently, the
trust is the current owner and holder of all the loan documents subject
to this appeal.

CW, the special servicer for the trust, filed a verified complaint, in its
own name, for foreclosure. The complaint alleged that Elston defaulted
on the loan, and the trust elected to accelerate and declare immediately
due and owing the entire unpaid principal balance together with accrued
interest. In response to CW’s motions, the trial court ordered Elston to
show cause as to why payments should not b e ma d e during the
pendency of the foreclosure action. Elston then moved to dismiss the
complaint, arguing that CW failed to properly allege standing to pursue
enforcement of the security instruments. CW argued that it had
standing to bring the foreclosure action because it is duly authorized by
the trust to do so and, as special servicer for the loan, it is entitled to
take all required action to protect the interests of the trust. After a
hearing,1 the trial court entered a payment order, requiring Elston to pay
CW $42,404.91 per month during the pendency of the action. This
appeal followed.

Elston argues that the trial court erred b y ordering it to make
payments to CW because CW failed to properly allege standing. CW
argues that Elston has not furnished a sufficient record for this court to
review the trial court’s ruling.2 On the merits, CW argues that, as agent
and special servicer to the trust, which owns the loan documents at
issue, it has standing to foreclose.

“Whether a party is the proper party with standing to bring an action
is a question of law to be reviewed de novo.” FCD Dev., LLC v. S. Fla.
Sports Comm., Inc., 37 So. 3d 905, 909 (Fla. 4th DCA 2010) (quoting
Westport Recovery Corp. v. Midas, 954 So. 2d 750, 752 (Fla. 4th DCA
2007)).

Every action may be prosecuted in the name of the real party
in interest, but a personal representative, administrator,
guardian, trustee of an express trust, a party with whom or
in whose name a contract has been made for the benefit of
another, or a party expressly authorized by statute may sue
in that person’s own name without joining the party for
whose benefit the action is brought.

Fla. R. Civ. P. 1.210(a). “In its broadest sense, standing is no more than
having, or representing one who has, ‘a sufficient stake in an otherwise
justiciable controversy to obtain judicial resolution of that controversy.’”
Kumar Corp. v. Nopal Lines, Ltd., 462 So. 2d 1178, 1182 (Fla. 3d DCA
1985) (quoting Sierra Club v. Morton, 405 U.S. 727, 731 (1972)).

In the mortgage foreclosure context, “standing is broader than just
actual ownership of the beneficial interest in the note.” Mortgage Elec.
Registration Sys., Inc. v. Azize, 965 So. 2d 151, 153 (Fla. 2d DCA 2007).
“The Florida real party in interest rule, Fla. R. Civ. P. 1.210(a), permits
an action to be prosecuted in the name of someone other than, but
acting for, the real party in interest.” Id. (quoting Kumar, 462 So. 2d at
1183). “Thus, where a plaintiff is either the real party in interest or is
maintaining the action on behalf of the real party in interest, its action
cannot be terminated on the ground that it lacks standing.” Kumar, 462
So. 2d at 1183. See also BAC Funding Consortium Inc. ISAOA/ATIMA v.
Jean-Jacques, 28 So. 3d 936, 938 (Fla. 2d DCA 2010) (“The proper party
with standing to foreclose a note and/or mortgage is the holder of the
note and mortgage or the holder’s representative.”).

In securitization cases, a servicer may b e considered a party in
interest to commence legal action as long as the trustee joins or
ratifies its action. In re Rosenberg, 414 B.R. 826, 842 (Bankr. S.D. Fla.
2009) (emphasis added). In CWCapital Asset Management, LLC v.
Chicago Properties, LLC, 610 F.3d 497 (7th Cir. 2010), the Seventh
Circuit found that CW, as a special servicer to a loan, had standing to
bring an action in its own name against a mortgagor and landlord for
money paid by a tenant in settlement of a suit for unpaid rent. Id. at
499-500. Significantly, however, in opposition to the defendant’s motion
for judgment on the pleadings (based on CW’s lack of standing), CW filed
an affidavit of the trustee, which was not contradicted, ratifying the
servicer’s (CW’S) commencement of the lawsuit. Id. at 502 (emphasis
added). Additionally, the pooling and servicing agreement was placed in
evidence as additional evidence that CW’s principal granted CW authority
to enforce the debt instruments that CW neither owned nor held. Id. at
501.

In Juega v. Davidson, 8 So. 3d 488 (Fla. 3d DCA 2009), relied on by
the trial court, the Third District reversed an order of dismissal for lack
of standing, finding that because the plaintiff was an agent who had been
granted full authority to act for the real party in interest, there was no
violation of rule 1.210(a). Id. at 489. However, in Juega, there was
evidence in the trial court that the agent/plaintiff had been granted full
authority to act on the real party in interest’s behalf: The real party in
interest filed an affidavit in opposition to the motion to dismiss for lack of
standing, averring that Juega was pursuing the litigation for the real
party in interest’s benefit and ratifying all actions taken by Juega since
the inception of the lawsuit. Id. at 489. Finding the affidavit filed by the
real party in interest to be indistinguishable from the affidavit filed by the
principal in Kumar, the Third District held that “the facts stated in [the
affidavit] establish that the agent, Juega, has standing.” Id. at 490
(emphasis added).

Here, the caption of the verified complaint states that the underlying
action is brought by CW “solely in its capacity as special servicer on
behalf of U.S. Bank, N.A.” In the complaint, CW alleges, and verifies as
true, that it “has been and is duly authorized by the Trust to prosecute
this action as agent and special servicer for the Trust.” However, CW did
not file any evidence, affidavits or other documents, supporting its
allegation that it was authorized to prosecute the action on behalf of the
trust, as was done in Kumar, Juega and Chicago Properties. Although
CW’s complaint is verified, it is verified by the “SVP” for CW – not by the
real party in interest, the trust. CW relies on nothing more than its own
allegations and affidavit to support its argument that it has standing to
sue on behalf of the trust. This is insufficient evidence to prove that it is
authorized to sue on the trust’s behalf.

We affirm on the other issue raised by Elston, as we find that the trial
court properly determined that CW was not required to register as a
commercial collection agency or as a licensed mortgage broker under
Chapters 559 and 494, Florida Statutes.

Reversed and Remanded.

TAYLOR and HAZOURI, JJ., concur.
* *

[ipaper docId=88060508 access_key=key-1zi7bzuhrs7m5kl811n5 height=600 width=600 /]

 

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



Posted in STOP FORECLOSURE FRAUDComments (0)

Fannie Mae Is At ALL TIMES The Owner And Holder of The Mortgage Note….

Fannie Mae Is At ALL TIMES The Owner And Holder of The Mortgage Note….


Via MATT WEIDNER, ESQ.

Just what would happen if Americans finally woke up and realized that the federal government was effectively the biggest plaintiff in foreclosure cases all across America?  The banksters don’t really own anything, it’s all Fannie/Freddie…and Fannie/Freddie are in big trouble.  The entire American financial system, and especially real estate finance, is a shell game played atop a rickety old card table.

From the Bulletin:


Fannie Mae is at all times the owner of the mortgage note, whether the note is in Fannie Mae’s portfolio or whether owned as trustee, for example, as trustee for an MBS trust. In addition, Fannie Mae at all times has possession of and is the holder of the mortgage note, except in the limited circumstances expressly described below. Fannie Mae may have direct possession of the note or a custodian may have custody of the note. If Fannie Mae possesses the note through a document custodian, the document custodian has custody of the note for Fannie Mae’s exclusive use and benefit.

[ipaper docId=63239436 access_key=key-agk3ur7x5paluteh1qd height=600 width=600 /]

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Posted in STOP FORECLOSURE FRAUDComments (2)

IN RE SCHWARTZ | MASS. BK Court Re-Opens Case “The fact that it had possession of the mortgage instrument did not render Deutsche the mortgagee and thus it lacked the power to sell the property”

IN RE SCHWARTZ | MASS. BK Court Re-Opens Case “The fact that it had possession of the mortgage instrument did not render Deutsche the mortgagee and thus it lacked the power to sell the property”


UNITED STATES BANKRUPTCY COURT
DISTRICT OF MASSACHUSETTS
CENTRAL DIVISION

In re:
SIMA SCHWARTZ
Debtor

SIMA SCHWARTZ
Plaintiff

v.

HOMEQ SERVICING, AGENT FOR
DEUTSCHE BANK NATIONAL TRUST
COMPANY, AS TRUSTEE and
DEUTSCHE BANK NATIONAL
COMPANY, AS TRUSTEE
Defendants

MEMORANDUM OF DECISION AND ORDER

After the plaintiff, Sima Schwartz, presented her case in chief during the first day of the trial in
this adversary proceeding, upon oral motion of the defendants, HomEq Servicing and Deutsche Bank
National Trust Company, as Trustee, I granted judgment on partial findings in favor of the defendants
on all counts of the complaint, pursuant to Fed. R. Civ. P. 52(c), made applicable to this proceeding by
Fed. R. Bankr. P. 7052. Ms. Schwartz then moved for a new trial as a result of which judgment was
vacated on count I of the complaint only. Schwartz v. HomEq Servicing (In re Schwartz), 2011 WL
1331963 (Bankr. D. Mass. Apr. 7, 2011). In count I, Ms. Schwartz alleges that the May 24, 2006
foreclosure sale of her home by Deutsche was invalid because Deutsche did not own the mortgage on
the property at the relevant time.1 I reopened the trial so that the defendants could present their case
with respect to that count, which they did on June 1, 2011. Based on the evidence and legal
submissions presented by the parties, my findings of fact, conclusions of law and order are set forth
below.

Jurisdiction and Standing

Core jurisdiction over this case is conferred upon the bankruptcy court by 28 U.S.C.
§ 157(b)(2)(G) and (O). See Atighi v. DLJ Mortg. Capital, Inc. (In re Atighi), 2011 WL 3303454, at
*3 (B.A.P. 9th Cir. Jan. 28, 2011). Ms. Schwartz’s standing to seek relief is based on her property
interest in light of the alleged wrongful foreclosure. Brae Asset Fund, L.P. v. Kelly, 223 B.R. 50, 56
(D. Mass. 1998).

Legal Framework

Mass. Gen. Laws ch. 244, § 14 establishes the procedure for a mortgagee to foreclose a
mortgage by exercise of the statutory power of sale. The statute provides that prior to a foreclosure
sale a notice of the sale must appear weekly for three consecutive weeks in a newspaper either
published in or generally circulated in the city or town where the property is located. The
Massachusetts Supreme Judicial Court has recently clarified that a foreclosing mortgagee must hold
the mortgage as of the date that the first notice of sale is published. U.S. Bank Nat. Ass’n v. Ibanez,

The Defendants’ Case

It is undisputed that Deutsche was not the original mortgagee of the mortgage on Ms.
Schwartz’s home, so it must prove that the mortgage was assigned to it prior to the date when the first
foreclosure notice was published. As discussed in the memorandum and order on the plaintiff’s
motion for a new trial, while the evidence established that an assignment of the mortgage from
Mortgage Electronic Registration Systems, Inc. (“MERS”) to Deutsche was executed on May 23,
2006, the day before the foreclosure sale, this assignment, being well after the notice of foreclosure
sale was first published, did not confer on Deutsche the power to foreclose on May 24. The Supreme
Judicial Court in Ibanez, however, offered an alternative method for a party to acquire sufficient rights
in a mortgage to qualify to foreclose:

Where a pool of mortgages is assigned to a securitized trust, the executed agreement
that assigns the pool of mortgages, with a schedule of the pooled mortgage loans that
clearly and specifically identifies the mortgage at issue as among those assigned, may
suffice to establish the trustee as the mortgage holder.

Ibanez, 458 Mass. at 651.

With this in mind, the defendants introduced into evidence at trial all of the agreements
tracking the transfer of Ms. Schwartz’s mortgage loan from its originator, First NLC Financial
Services, LLC (“First NLC”), to Deutsche, complete with the necessary schedules of the pooled
mortgage loans specifically identifying her mortgage as being among those transferred. The
defendants argue that these agreements, together with other evidence introduced by them, establish that
Deutsche was the holder of the mortgage well in advance of the first publication of the notice of sale.
At trial, Ronaldo Reyes, a Deutsche vice president, testified that he had management
responsibility over the administration of the Morgan Stanley Home Equity Loan Trust 2005-4 (the
“Trust”) and that Deutsche had always been the trustee of the Trust. He testified that in his capacity
as vice president he had access to the books and records of the Trust and was qualified to authenticate
and testify about the documents admitted into evidence by the defendants. During the course of his
testimony, Mr. Reyes authenticated executed copies of each of the agreements discussed below, and
demonstrated that Ms. Schwartz’s mortgage loan was included on the mortgage loan schedules
attached as exhibits to several of the agreements. Mr. Reyes testified that each was used in the
ordinary course of Deutsche’s business as trustee of the Trust.

The following documents were admitted into evidence: (i) the mortgage on Ms. Schwartz’s
home; (ii) the original promissory note executed by Ms. Schwartz, which Mr. Reyes noted was
endorsed in blank by First NLC; (iii) the Amended and Restated Mortgage Loan Purchase Agreement
(the “Loan Purchase Agreement”) dated as of September 1, 2005 by and between Morgan Stanley
Mortgage Capital, Inc. (“MS Mortgage Capital”) and First NLC; (iv) the Assignment and Conveyance
Agreement dated September 29, 2005, by and between First NLC and MS Mortgage Capital; (v) the
Bill of Sale dated November 29, 2005 by and between MS Mortgage Capital and Morgan Stanley ABS
Capital I Inc. (“MS ABS Capital”); and (vi) the Pooling and Servicing Agreement (the “PSA”) dated
as of November 1, 2005 by and among MS ABS Capital, HomEq Servicing Corporation, JPMorgan
Chase Bank, National Association, First NLC, LaSalle Bank National Association and Deutsche. Mr.

Findings of Fact2

1. On July 22, 2005, Ms. Schwartz refinanced the mortgage loan on her property at 23 Sigel Street,
Worcester, Massachusetts, executing a promissory note in the amount of $272,000 payable to First
NLC and a mortgage securing her obligation under the note naming MERS, solely as nominee for
First NLC, its successors and assigns, as mortgagee.

2. The mortgage, which was duly recorded at the Worcester District Registry of Deeds, includes the
statutory power of sale under Mass. Gen. Laws. ch 183, § 21 which is invoked by reference to the
statute and which permits a mortgagee to foreclose a mortgage by public auction sale of the
property upon the mortgagor’s default in performance or breach of any conditions thereof.

3. On May 3, May 10 and May 17, 2006, a notice of foreclosure sale was published in the Worcester
Telegram and Gazette stating that “Deutsche Bank National Trust Company, as Trustee,” the
“present holder” of the mortgage, intended to foreclose the mortgage by public sale of Ms.
Schwartz’s property on May 24, 2006.

4. On May 23, 2006, Liquenda Allotey, described as a vice president of MERS, executed an
Assignment of Mortgage for the purpose of assigning the mortgage from MERS to “Deutsche Bank
National Trust Company, as Trustee.”

5. Deutsche, in its capacity as trustee of the Trust,3 conducted the foreclosure sale as scheduled on
May 24, 2006, bid in its mortgage debt and purchased the property.

6. In its answer, Deutsche admitted that a foreclosure deed conveying the property to itself was
recorded on October 13, 2006. There has been no evidence presented of any subsequent
conveyance of the property and hence I find that Deutsche remains the record owner of the Sigel
Street property.

7. As she testified on the first day of trial, Ms. Schwartz continues to reside in the Sigel Street
Property.

8. The original promissory note executed by Ms. Schwartz was endorsed in blank by an officer of
First NLC.

9. The original mortgagee as identified in the mortgage on Ms. Schwartz’s home was MERS, as
nominee for First NLC, its successors and assigns.

10. In accordance with Section 2 of the Loan Purchase Agreement, First NLC agreed to sell “Mortgage
Loans” to MS Mortgage Capital.

11. The Loan Purchase Agreement defines a “Mortgage Loan” as
An individual Mortgage Loan which is the subject of this Agreement, each Mortgage
Loan originally sold and subject to this Agreement being identified on the applicable
Mortgage Loan Schedule, which Mortgage Loan includes without limitation the
Mortgage File, the Monthly Payments, Principal Prepayments, Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds, Servicing Rights and all other rights,
benefits, proceeds and obligations arising from or in connection with such Mortgage
Loan, excluding replaced or repurchased mortgage loans.

12. On September 29, 2005, by way of the Assignment and Conveyance Agreement, First NLC sold,
transferred, assigned, set over and conveyed to MS Mortgage Capital “all right, title and interest of,
in and to the Mortgage Loans listed on the Mortgage Loan Schedule attached hereto as Exhibit A.”

13. Ms. Schwartz’s mortgage loan was listed on the exhibit attached to the Assignment and Conveyance Agreement.

14. First NLC, therefore, transferred all of its right, title and interest in Ms. Schwartz’s mortgage loan
to MS Mortgage Capital on November 29, 2005.

15. By the Bill of Sale dated November 29, 2005, MS Mortgage Capital, as the “Seller,” transferred to
MS ABS Capital “all the Seller’s right, title and interest in and to the Mortgage Loans described on
Exhibit A attached hereto.”

16. Ms. Schwartz’s mortgage loan was listed on Exhibit A to the Bill of Sale.

17. MS Mortgage Capital, therefore, transferred its entire interest in Ms. Schwartz’s mortgage loan to
MS ABS Capital on November 29, 2005.

18. Section 2.01 of the PSA, which was dated November 1, 2005, provides that the MS ABS Capital,
as “Depositor,”

concurrently with the execution and delivery hereof, hereby sells, transfers, assigns, sets
over and otherwise conveys to [Deutsche] for the benefit of the Certificateholders,
without recourse, all the right, title and interest of the Depositor in and to the Trust
Fund, and the Trustee, on behalf of the Trust, hereby accepts the Trust Fund.

19. The “Trust Fund” includes all of the mortgage loans listed on an attached mortgage loan schedule.

20. Ms. Schwartz’s mortgage loan was listed on the mortgage loan schedule attached to the PSA.

21. While the PSA provides that the mortgage loans were transferred from MS ABS Capital to
Deutsche, “concurrently with the execution and delivery hereof” on November 1, 2005, the Bill of
Sale provides that MS ABS Capital did not acquire the mortgage loans until November 29, 2005.
The November 2009 PSA indicates, however, that the transaction in which MS ABS Capital would
transfer the loans to Deutsch, as trustee of the Trust, would not be consummated until November
29, 2005, which is defined as the “Closing Date.” Therefore, MS ABS Capital transferred Ms.
Schwartz’s mortgage loan to Deutsche, as trustee of the Trust, on the Closing Date of November
29, 2005, which is the same date as the Bill of Sale by which MS ABS Capital acquired the loan
from MS Mortgage Capital.

22. Section 2.01(b) of the PSA provides that if

any Mortgage has been recorded in the name of Mortgage Electronic Registration
System, Inc. (“MERS”) or its designee, no Assignment of Mortgage in favor of the
Trustee will be required to be prepared or delivered and instead, the applicable Servicer
shall take all reasonable actions as are necessary at the expense of the applicable
Originator to the extent permitted under the related Purchase Agreement and otherwise
at the expense of the Depositor to cause the Trust to be shown as the owner of the
related Mortgage Loan on the records of MERS for the purpose of the system of
recording transfers of beneficial ownership of mortgages maintained by MERS.

23. Thus MS ABS Capital did not assign to Deutsche the mortgage on Ms. Schwartz’s home in
connection with the transaction through which it transferred Ms. Schwartz’s mortgage loan
pursuant to the PSA.

24. In the chain of transactions by which Ms. Schwartz’s mortgage loan was sold, initially by First
NLC to MS Mortgage Capital, next by MS Mortgage Capital to MS ABS Capital and finally by
MS ABS Capital to Deutsche, the seller sold all of its right, title and interest in the mortgage loans
being transferred. However, as the mortgage itself was originally in the name of MERS as
mortgagee, and not First NLC, First NLC never held legal title to the mortgage and could not have
transferred such title to MS Mortgage Capital. Consequently, neither MS ABS Capital nor
Deutsche, as successors to First NLC and MS Mortgage Capital, obtained legal title to the
mortgage. This is consistent with § 2.01 of the PSA quoted above.

25. As of November 29, 2005, the Closing Date defined in the PSA, MERS continued to hold legal
title to the mortgage on Ms. Schwartz’s home as nominee for First NLC, its successors and assigns.

26. MERS continued to hold legal tile to the mortgage until May 23, 2006, when it assigned the
mortgage to Deutsche.

27. The custodial log establishes that Deutsche received Ms. Schwartz’s mortgage loan documents,
including the promissory note and mortgage instrument, on September 15, 2005 (presumably in
anticipation of the November loan sale), and retained custody of these documents until March 27,
2006, when they were sent to HomEq. The custodial log indicates that the documents were sent
to HomEq for servicing and lists the reason for the transfer as “foreclosure.” According to the
custodial log, the loan documents were returned to Deutsche on May 24, 2006, the day of the
foreclosure sale.
Conclusions of Law

In In re Marron, 2011 WL 2600543, at *5 (Bankr. D. Mass. June 29, 2011), I held that where a
loan was secured by a mortgage in the name of MERS, even when the loan itself changed hands
several times, MERS remained the mortgagee in its capacity as nominee for the original lender, its
successors and assigns.4 As MERS was the mortgagee, it had the authority to assign the mortgage to
the foreclosing entity. In this case too, while Ms. Schwartz’s loan passed from hand to hand, MERS
remained the mortgagee throughout. While MERS held only bare legal title to the mortgage on
behalf of Deutsche, the successor to First NLC, until it assigned the mortgage to Deutsche on May 23,
2006, only MERS had the authority to foreclose.

Having determined that MERS, and not Deutsche, held legal title to the mortgage on Ms.
Schwartz’s home mortgage as of May 3, 2006, when the notice of the foreclosure sale of her home was
first published, it follows that Deutsche did not have the right to exercise the statutory power of sale
and to foreclose the mortgage. See, e.g., Novastar Mortgage, Inc. v. Safran, 79 Mass. App. Ct. 1124,
948 N.E.2d 917 (2011) (finding, in a post-foreclosure eviction proceeding, that the foreclosing entity
had the burden to prove its title to the property by establishing that the mortgage had been assigned to
it by MERS “at the critical stages of the foreclosure process.”). By publishing notice of the
foreclosure sale when it was not the mortgagee, Deutsche failed to comply with Mass. Gen. Laws ch.
244, § 14, and thus its foreclosure sale is void. Ibanez, 438 Mass. at 646-47.5 A declaratory
judgment to that effect shall enter on count I of the complaint.

SO ORDERED.

At Worcester, Massachusetts this 22nd day of August, 2011.

By the Court,
Melvin S. Hoffman
U.S. Bankruptcy Judge

Footnotes:

1 The complaint is unclear as to the relief Ms. Schwartz seeks as a result of the allegedly invalid
foreclosure. In addition to the allegation that the defendants did not own the mortgage, Ms. Schwartz
alleges that she was damaged by the foreclosure sale, which “was conducted fraudulently, in bad faith”
and to her detriment. I previously found that Ms. Schwartz failed to produce any evidence of the
defendants’ intent to defraud her. In addition, Ms. Schwartz failed to establish the extent of her
damages or that the foreclosure sale was conducted in bad faith. Though Ms. Schwartz does not
expressly request a declaratory judgment as to the validity of the foreclosure, based on the allegation of
invalidity in the complaint, and the parties’ arguments in the course of trial, I will consider count I of
the complaint to be a request for a declaratory judgment that the foreclosure sale was invalid.

2 Any finding of fact which should more properly be considered a conclusion of law, and vice versa,
shall be deemed as such.

3 The documents pertaining to the foreclosure sale identify Deutsche as “Deutsche Bank National
Trust Company, as Trustee” without identifying the trust.

4 The sophisticated financial minds who wrought the MERS regime sought to simplify the process of
repeatedly transferring mortgage loans by obviating the need and expense of recording mortgage
assignments with each transfer. No doubt they failed to consider the possibility of a collapse of the
residential real estate market, the ensuing flood of foreclosures and the intervention of state and federal
courts. Professor Alex Tabarrok of George Mason University has observed “[t]he law of unintended
consequences is when a simple system tries to regulate a complex system.” Alex Tabarrok, The Law
of Unintended Consequences, Marginal Revolution (Jan. 24, 2008, 7:47 am),
http://marginalrevolution.com/marginalrevolution/2008/01/the-law-of-unin.html.

5 Deutsche presented sufficient evidence to prove that either it or HomEq, its agent, had possession of
both the Schwartz mortgage and promissory note as of May 3, 2011. The note was endorsed in blank,
which gave Deutsche the right to enforce the note. The fact that Deutsche had possession of the
mortgage, however, is irrelevant to its status as mortgagee. While a promissory note endorsed in
blank may be enforced by the party in possession of the note, this is not the case with a mortgage.
“Like a sale of land itself, the assignment of a mortgage is a conveyance of an interest in land that
requires a writing signed by the grantor.” Ibanez, 458 Mass at 649. Deutsche had not received a
written assignment of the mortgage from MERS prior to May 3, 2011. The fact that it had possession
of the mortgage instrument did not render Deutsche the mortgagee and thus it lacked the power to sell
the property.

[ipaper docId=62936911 access_key=key-2nbd5rwuz8zw839qwzpe height=600 width=600 /]

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



Posted in STOP FORECLOSURE FRAUDComments (1)

LEVITIN | Standing to Invoke PSAs as a Foreclosure Defense

LEVITIN | Standing to Invoke PSAs as a Foreclosure Defense


Make sure you catch who signed the assignment of mortgage down below… but ERICA JOHNSON-SECK!

Credit Slips

A major issue arising in foreclosure defense cases is the homeowner’s ability to challenge the foreclosing party’s standing based on noncompliance with securitization documentation. Several courts have held that there is no standing to challenge standing on this basis, most recently the 1st Circuit BAP in Correia v. Deutsche Bank Nat’l Trust Company. (See Abigail Caplovitz Field’s cogent critique of that ruling here.) The basis for these courts’ rulings is that the homeowner isn’t a party to the PSA, so the homeowner has no standing to raise noncompliance with the PSA.

I think that view is plain wrong.  It fails to understand what PSA-based foreclosure defenses are about and to recognize a pair of real and cognizable Article III interests of homeowners:  the right to be protected against duplicative claims and the right to litigate against the real party in interest because of settlement incentives and abilities.

[CREDIT SLIPS]

ERICA JOHNSON-SECK

INDYMAC FED. BANK FSB v. GARCIA | NYSC Vacates Default JDGMT “Robo-Signer, Fraudulent Erica Johnson-Seck Affidavit”

Full Deposition Of ERICA JOHNSON SECK Former Fannie Mae, WSB Employee

[NYSC] Judge Finds Issues With “NOTE AMOUNTS”, Robo Signer “ROGER STOTTS” Affidavit: ONEWEST v. GARCIA

[NYSC] JUDGE SCHACK TAKES ON ROBO-SIGNER ERICA JOHNSON SECK: DEUTSCHE BANK v. MARAJ (1) (64.591)

[NYSC] JUDGE SCHACK TAKES ON ROBO-SIGNER ERICA JOHNSON SECK: DEUTSCHE BANK v. HARRIS (2) (70.24)

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

Wall Street Journal: Foreclosure? Not So Fast

ONEWEST BANK ‘ERICA JOHNSON-SECK’ ‘Not more than 30 seconds’ to sign each foreclosure document

INDYMAC’S/ONEWEST FORECLOSURE ‘ROBO-SIGNERS’ SIGNED 24,000 MORTGAGE DOCUMENTS MONTHLY

WM_Deposition_of_Erica_Johnson-Seck_Part_I

Deposition_of_Erica_Johnson-Seck_Part_II

Thank you to Mike Dillon for pointing and providing this crucial piece below

[ipaper docId=61704717 access_key=key-16i71qddg7jbehlsos7g height=600 width=600 /]

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



Posted in STOP FORECLOSURE FRAUDComments (1)

Bank Foreclosures Create Dangerous Situations, Make Banks into Slumlord Millionaires

Bank Foreclosures Create Dangerous Situations, Make Banks into Slumlord Millionaires


NBC

A fire that killed three people in the Bronx revealed the dangers of illegally subdivided apartments, but what is less widely known is the building’s cloudy ownership status.

At dispute is a question over who was actually responsible for maintaining the property.

Click image below to go to video and article…


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



Posted in STOP FORECLOSURE FRAUDComments (0)

In re: GILBERT | NC Appeals Court Reversal “Improper Indorsement, No Evidence of Debt” JEFFREY STEPHAN AFFIDAVIT, DEUTSCHE BANK, GMAC, RESIDENTIAL FUNDING

In re: GILBERT | NC Appeals Court Reversal “Improper Indorsement, No Evidence of Debt” JEFFREY STEPHAN AFFIDAVIT, DEUTSCHE BANK, GMAC, RESIDENTIAL FUNDING


Here’s a snippet and highly recommend reading this in its entirety!

Excerpt:

The record is void of any evidence the Note was assigned and securitized to a trust.

[ipaper docId=54673705 access_key=key-1dch86ck9zy229rl5p87 height=600 width=600 /]

IN THE MATTER OF THE FORECLOSURE BY DAVID A. SIMPSON, P.C., SUBSTITUTE TRUSTEE, OF A DEED OF TRUST EXECUTED BY REX T. GILBERT, JR. AND DANIELA L. GILBERT, HUSBAND AND WIFE, DATED MAY 5, 2006 AND RECORDED ON MAY 10, 2006, IN BOOK 219 AT PAGE 53 OF THE HYDE COUNTY PUBLIC REGISTRY.

No. COA10-361.

Court of Appeals of North Carolina.

Filed May 3, 2011.

Katherine S. Parker-Lowe, for respondent-appellants.

The Law Office of John T. Benjamin, Jr., P.A., by John T. Benjamin, Jr. and James R. White for petitioner-appellee.

HUNTER, JR., Robert N., Judge.

Respondents Rex T. Gilbert, Jr. and his wife Daniela L. Gilbert, appeal from the trial court’s Order authorizing David A. Simpson, P.C., as Substitute Trustee, to proceed with foreclosure under a power of sale in the Deed of Trust recorded in Book 219 at Page 53 in the Hyde County Register of Deeds. We reverse.

I. Factual and Procedural History

On 5 May 2006, Respondent Rex T. Gilbert, Jr. executed an adjustable rate note (“the Note”) to refinance an existing mortgage on his home. According to the terms of the Note, Mr. Gilbert promised to pay a principal amount of $525,000.00 plus interest to First National Bank of Arizona. The Note was secured by a Deed of Trust, executed by Mr. Gilbert and his wife, Daniela L. Gilbert, on real property located at 134 West End Road, Ocracoke, North Carolina. The Deed of Trust identified First National Bank of Arizona as the lender and Matthew J. Ragaller of Casey, Grimsley & Ragaller, PLLC as the trustee.

The record reveals that, during 2008, Respondents ceased making payments on the Note and made an unsuccessful attempt to negotiate a modification of the loan. On 9 March 2009, a Substitution of Trustee was recorded in the Hyde County Register of Deeds, which purports to remove Matthew Ragaller as the trustee of the Deed of Trust and appoint his successor, David A. Simpson, P.C. (“Substitute Trustee”). The Substitution of Trustee identified Deutsche Bank Trust Company Americas as Trustee for Residential Accredit Loans, Inc. Series 2006-QA6 (“Petitioner”) as the holder of the Note and the lien created by the Deed of Trust.

On 12 March 2009, the Substitute Trustee commenced this action by filing a Notice of Hearing on Foreclosure of Deed of Trust with the Hyde County Clerk of Superior Court pursuant to section 45-21.16 of our General Statutes. N.C. Gen. Stat. § 45-21.16 (2009). The Notice of Hearing stated, “the current holder of the foregoing Deed of Trust, and of the debt secured thereby, is: Deutsche Bank Trust Company Americas as Trustee for Residential Accredit Loans, Inc. Series 2006-QA6.”

In a letter dated 5 April 2009, Mr. Gilbert purported to exercise his right to rescind the loan transaction he entered into with the original lender, First National Bank of Arizona, pursuant to the federal Truth in Lending Act, 15 U.S.C. § 1635. As justification for his purported rescission, Gilbert alleged that the Truth in Lending Disclosure Statement provided by First National Bank of Arizona failed to accurately provide all required material disclosures including, inter alia, the correct annual percentage rate and payment schedule. The Substitute Trustee responded with a letter from GMAC ResCap, in which it denied any material disclosure errors were made and refused to rescind the loan transaction.

The foreclosure hearing was held on 2 June 2009 before the Clerk of Superior Court of Hyde County. The Honorable Sharon G. Sadler entered an Order on 17 June 2009, permitting the Substitute Trustee to proceed with the foreclosure. In the Order, the Clerk specifically found, inter alia, that Petitioner was the holder of the Note and Deed of Trust that it sought to foreclose and the Note evidenced a valid debt owed by Mr. Gilbert. Respondents appealed the Order to superior court.

The matter came on for a de novo hearing on 18 August 2009 before the Honorable Marvin K. Blount, III, in Hyde County Superior Court. During the hearing, the trial court admitted into evidence a certified copy of the Note and the Deed of Trust and two affidavits attesting to the validity of Gilbert’s indebtedness pursuant to the Note, and that Deutsche Bank Trust Company Americas as Trustee for Residential Accredit Loans, Inc. Series 2006-QA6 is the current owner and holder of the Note. Additionally, Petitioner introduced the original Note and Allonge for the trial court’s inspection.

Reviewing the record before this Court, the Allonge contains a series of indorsements evidencing the alleged assignments of the Note, as follows:

PAY TO THE ORDER OF: First National Bank of Nevada WITHOUT RECOURSE BY: [Signature] ___________________________ AMY HAWKINS, ASSISTANT VICE PRESIDENT FIRST NATIONAL BANK OF ARIZONA Pay to the order of: RESIDENTIAL FUNDING CORPORATION Without Recourse FIRST NATIONAL BANK OF NEVADA By: [Signature] __________________________ Deutsche Bank National Trust Company, F/K/A Bankers Trust Company of California, N.A. as Custodian as Attorney in Fact [Illegible Name and Title] PAY TO THE ORDER OF Deutsche Bank Trust Company Americas as Trustee WITHOUT RECOURSE Residential Funding Corporation BY [Signature] ________________________ Judy Faber, Vice President

Respondents made two arguments at the hearing. First, Respondents argued that the debt evidenced by the Note no longer existed, as Mr. Gilbert had rescinded the transaction for the loan with First National Bank of Arizona. Petitioner objected to Respondents’ rescission argument as being a defense in equity and, as such, inadmissible in a proceeding held pursuant to N.C. Gen. Stat. § 45-21.16. The trial court agreed and refused to let Respondents’ expert witness testify as to alleged material errors in the Truth in Lending Disclosure Statement, which Mr. Gilbert alleged permitted him the right to rescind the loan. Second, Respondents argued that Petitioner had not produced sufficient evidence to establish that Deutsche Bank Trust Company Americas as Trustee for Residential Accredit Loans, Inc. Series 2006-QA6 was the holder of the Note.

Based on the preceding evidence, the trial court entered an order on 18 August 2009 in which it found, inter alia: Mr. Gilbert executed the Note and, with his wife, executed a Deed of Trust in favor of First National Bank of Arizona, secured by the real property described in the Deed of Trust; a valid debt exists and is owed by Gilbert to Petitioner; Gilbert is in default under the Note and Deed of Trust; proper notice of the foreclosure hearing was given to all parties as required by N.C. Gen. Stat. § 45-21.16; Petitioner was the current holder of the Note and the Deed of Trust. The trial court concluded as a matter of law that the requirements of N.C. Gen. Stat. § 45-21.16 had been satisfied. Based on these findings and conclusion of law, the trial court authorized the Substitute Trustee to proceed with the foreclosure. Respondents timely entered notice of appeal.

II. Analysis

A party seeking permission from the clerk of court to proceed with a foreclosure pursuant to a power of sale contained in a deed of trust must prove the following statutory requirements: (1) the party seeking foreclosure is the holder of a valid debt, (2) default on the debt by the debtor, (3) the deed of trust provides the right to foreclose, (4) proper notice was given to those parties entitled to notice pursuant to section 45-21.16(b). N.C. Gen. Stat. § 45-21.16(d) (2009). The General Assembly added a fifth requirement, which expired 31 October 2010: “that the underlying mortgage debt is not a subprime loan,” or, if it is a subprime loan, “that the pre-foreclosure notice under G.S. 45-102 was provided in all material respects, and that the periods of time established by Article 11 of this Chapter have elapsed[.]” Id. The role of the clerk of court is limited to making a determination on the matters specified by section 45-21.16(d). See Mosler ex rel. Simon v. Druid Hills Land Co., Inc., 199 N.C. App. 293, 295-96, 681 S.E.2d 456, 458 (2009). If the clerk’s order is appealed to superior court, that court’s de novo hearing is limited to making a determination on the same issues as the clerk of court. See id.

The trial court’s order authorizing the foreclosure to proceed was a final judgment of the superior court, therefore, this Court has jurisdiction to hear the instant appeal. N.C. Gen. Stat. § 7A-27(b) (2009). Our standard of review for this appeal, where the trial court sat without a jury, is “`whether competent evidence exists to support the trial court’s findings of fact and whether the conclusions reached were proper in light of the findings.'” In re Adams, __ N.C. App. __, __, 693 S.E.2d 705, 708 (2010) (quoting In re Foreclosure of Azalea Garden Bd. & Care, Inc., 140 N.C. App. 45, 50, 535 S.E.2d 388, 392 (2000)).

We note the trial court classified multiple conclusions of law as “findings of fact.” We have previously recognized “[t]he classification of a determination as either a finding of fact or a conclusion of law is admittedly difficult.” In re Helms, 127 N.C. App. 505, 510, 491 S.E.2d 672, 675 (1997). Generally, “any determination requiring the exercise of judgment or the application of legal principles is more properly classified a conclusion of law.” Id. (citations omitted). Any determination made by “`logical reasoning from the evidentiary facts,'” however, “is more properly classified a finding of fact.” Id. (quoting Quick v. Quick, 305 N.C. 446, 452, 290 S.E.2d 653, 657-58 (1982)). When this Court determines that findings of fact and conclusions of law have been mislabeled by the trial court, we may reclassify them, where necessary, before applying our standard of review. N.C. State Bar v. Key, 189 N.C. App. 80, 88, 658 S.E.2d 493, 499 (2008) (citing In re Helms, 127 N.C. App. at 510, 491 S.E.2d at 675).

Looking to the trial court’s Order, we conclude that the following “findings of fact” are determinations that required the application of legal principles and are more appropriately classified as conclusions of law: a valid debt exists and is owed to Deutsche Bank Trust Company Americas as Trustee for Residential Accredit Loans, Inc. Series 2006-QA6; proper notice was given to and received by all parties as required by N.C. Gen. Stat. § 45-21.16 and the Rules of Civil Procedure; Deutsche Bank Trust Company Americas as Trustee for Residential Accredit Loans, Inc. Series 2006-QA6 is the current owner and holder of the Note and Deed of Trust. See In re Watts, 38 N.C. App. 90, 92, 247 S.E.2d 427, 428 (1978) (noting upon the appeal of a N.C. Gen. Stat. § 45-21.16 special proceeding the trial court’s conclusions of lawsee also Connolly v. Potts, 63 N.C. App. 547, 549, 306 S.E.2d 123, 124 (1983) (same). In light of this reclassification of the trial court’s findings of fact and conclusions of law, we turn to the issues raised on appeal. included the existence of a valid debt, the right to foreclose under the deed of trust, and proper notice to the mortgagors);

1. Rescission of the Loan Transaction

Respondents raise several arguments alleging the trial court erred by refusing to consider their defense to the foreclosure action, that the debt Petitioner sought to foreclose was not a valid debt——a required element under the statute for foreclosure by power of sale. See N.C. Gen. Stat. § 45-21.16(d)(i) (requiring, inter alia, that the clerk of court must determine that a valid debt exists). Respondents contend the debt is not valid because Mr. Gilbert rescinded the transaction by which he obtained the loan from First National Bank of Arizona pursuant to the federal Truth in Lending Act (“TILA”), 15 U.S.C. §§ 1601-1667f, and the Federal Reserve Board’s Regulation Z, 12 C.F.R. § 226.1-.58. We conclude the trial court did not err.

The admissibility of evidence in the trial court is based upon that court’s sound discretion and may be disturbed on appeal only upon a finding that the decision was based on an abuse of discretion. Gibbs v. Mayo, 162 N.C. App. 549, 561, 591 S.E.2d 905, 913 (2004). Here, we conclude the trial court properly refused to consider Respondents’ evidence of rescission. Rescission under the TILA is an equitable remedy. See Am. Mortg. Network, Inc. v. Shelton, 486 F.3d 815, 819 (4th Cir. 2007) (“`[A]lthough the right to rescind [under the TILA] is [statutory], it remains an equitable doctrine subject to equitable considerations.'” (quoting Brown v. Nat’l Permanent Fed. Sav. & Loan Ass’n, 683 F.2d 444, 447 (D.C. Cir. 1982)). While legal defenses to a foreclosure under a power of sale are properly raised in a hearing held pursuant to section 45-21.16, equitable defenses are not. Watts, 38 N.C. App. at 94, 247 S.E.2d at 429. As we have previously stated, a hearing under section 45-21.16 is “not intended to settle all matters in controversy between mortgagor and mortgagee, nor was it designed to provide a second procedure for invoking equitable relief.” Id. A party seeking to raise an equitable defense may do so in a separate civil action brought in superior court under section 45-21.34. Id.; N.C. Gen. Stat. § 45-21.34 (2009) (stating that a party with a legal or equitable interest in the subject property may apply to a superior court judge to enjoin a sale of the property upon legal or equitable grounds). Accordingly, the trial court properly concluded Respondents’ argument that Mr. Gilbert had rescinded the loan transaction, invaliding the debt Petitioner sought to foreclose, was an equitable defense and not properly before the trial court. Respondents’ argument is without merit.[1]

2. Evidence that Petitioner was the Owner and Holder of Mr. Gilbert’s Promissory Note

Respondents also argue the trial court erred in ordering the foreclosure to proceed, as Petitioner did not prove that it was the holder of the Note with the right to foreclose under the instrument as required by section 45-21.16(d)(i) and (iii). We agree.

A “foreclosure under a power of sale is not favored in the law and its exercise will be watched with jealousy.” In re Foreclosure of Goforth Props., Inc., 334 N.C. 369, 375, 432 S.E.2d 855, 859 (1993) (citations and internal quotation marks omitted). That the party seeking to foreclose on a promissory note is the holder of said note is an essential element of the action and the debtor is “entitled to demand strict proof of this element.” Liles v. Myers, 38 N.C. App. 525, 528, 248 S.E.2d 385, 388 (1978).

For the trial court to find sufficient evidence that Petitioner is the holder of a valid debt in accordance with section 45-21.16(d), “this Court has determined that the following two questions must be answered in the affirmative: (1) `is there sufficient competent evidence of a valid debt?’; and (2) `is there sufficient competent evidence that [the party seeking to foreclose is] the holder[ ] of the notes [that evidence that debt]?'” Adams, __ N.C. App. at __, 693 S.E.2d at 709 (quoting In re Cooke, 37 N.C. App. 575, 579, 246 S.E.2d 801, 804—05 (1978)); see N.C. Gen. Stat. § 45-21.16(d) (2009) (in order for the foreclosure to proceed, the clerk of court must find, inter alia, the existence of a “valid debt of which the party seeking to foreclose is the holder,” and a “right to foreclose under the instrument” securing the debt) (emphasis added).

Establishing that a party is the holder of the note is essential to protect the debtor from the threat of multiple judgments on the same note.

If such proof were not required, the plaintiff could negotiate the instrument to a third party who would become a holder in due course, bring a suit upon the note in her own name and obtain a judgment in her favor. . . . Requiring proof that the plaintiff is the holder of the note at the time of her suit reduces the possibility of such an inequitable occurrence.

Liles, 38 N.C. App. at 527, 248 S.E.2d at 387.

We have previously determined that the definition of “holder” under the Uniform Commercial Code (“UCC”), as adopted by North Carolina, controls the meaning of the term as it used in section 45-21.16 of our General Statutes for foreclosure actions under a power of sale. See Connolly, 63 N.C. App. at 550, 306 S.E.2d at 125; Adams, __ N.C. App. at __, 693 S.E.2d at 709. Our General Statutes define the “holder” of an instrument as “[t]he person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession.” N.C. Gen. Stat. § 25-1-201(b)(21) (2009); Econo-Travel Motor Hotel Corp. v. Taylor, 301 N.C. 200, 203, 271 S.E.2d 54, 57 (1980). Furthermore, a “`[p]erson’ means an individual, corporation, business trust, estate, trust . . . or any other legal or commercial entity.” N.C. Gen. Stat. § 25-1-201(b)(27) (2009).

As addressed above, we conclude the trial court properly found that a valid debt existed. The remaining issue before this Court is whether there was competent evidence that Petitioner was the holder of the Note that evidences Mr. Gilbert’s debt.

In support of its argument that it provided competent evidence to support the trial court’s findings, Petitioner first points to its production of the original Note with the Allonge at the de novo hearing, as well as its introduction into evidence true and accurate copies of the Note and Allonge. Petitioner asserts this evidence “plainly evidences the transfers” of the Note to Petitioner. We cannot agree.

Under the UCC, as adopted by North Carolina, “[a]n instrument is transferred when it is delivered by a person other than its issuer for the purpose of giving to the person receiving delivery the right to enforce the instrument.” N.C. Gen. Stat. § 25-3-203(a) (2009). Production of an original note at trial does not, in itself, establish that the note was transferred to the party presenting the note with the purpose of giving that party the right to enforce the instrument, as demonstrated in Connolly, 63 N.C. App. at 551, 306 S.E.2d at 125, and Smathers v. Smathers, 34 N.C. App. 724, 726, 239 S.E.2d 637, 638 (1977) (holding that despite evidence of voluntary transfer of promissory notes and the plaintiff’s possession thereof, the plaintiff was not the holder of the note under the UCC as the notes were not drawn, issued, or indorsed to her, to bearer, or in blank. “[T]he plaintiff testified to some of the circumstances under which she obtained possession of the notes, but the trial court made no findings of fact with respect thereto.”)

In Connolly, determining who had possession of the note became the critical question for the foreclosure proceeding. 63 N.C. App. at 551, 306 S.E.2d at 125. Several years prior to the foreclosure proceedings at issue in Connolly, the petitioners obtained a loan from a bank and pledged as collateral a promissory note that was payable to the petitioners by assigning and delivering the note to the bank. Id. at 549, 306 S.E.2d at 124. After obtaining their loan, the petitioners sought to foreclose on the promissory note and deed of trust, which was in the bank’s possession, but were denied at the special proceeding before the clerk of court. Id. at 548, 306 S.E.2d at 124. The petitioners appealed the decision to superior court. Id. During the de novo hearing, the petitioners testified their loan to the bank had been paid, but “they had left the [] note at the bank, for security purposes.” Id. at 551, 306 S.E.2d at 125. The petitioners, however, “introduced the originals of the note and deed of trust” during the hearing. Id. The trial court found the bank was in possession of the note and concluded, as a matter of law, the petitioners were not the holders of the note at the institution of the foreclosure proceedings; the foreclosure was again denied. Connolly, 63 N.C. App. at 550, 306 S.E.2d at 124-25. On appeal, this Court concluded that despite the fact that the party seeking foreclosure introduced the original note at the time of the de novo hearing, the trial court’s findings of fact did not address whether the petitioners were in possession of the note at the time of the trial; the trial court’s judgment was vacated and remanded. Id. at 551, 306 S.E.2d at 125-26.

Similarly, here, the trial court’s findings of fact do not address who had possession of Mr. Gilbert’s note at the time of the de novo hearing. Without a determination of who has physical possession of the Note, the trial court cannot determine, under the UCC, the entity that is the holder of the Note. See N.C. Gen. Stat. § 25-1-201(b)(21) (defining “holder” as “the person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession“) (emphasis added); Connolly, 63 N.C. App. at 550, 306 S.E.2d at 125 (“It is the fact of possession which is significant in determining whether a person is a holder, and the absence of possession defeats that status.“) (emphasis added). Accordingly, the trial court’s findings of fact do not support the conclusion of law that Petitioner is the holder of Mr. Gilbert’s note.

Assuming arguendo that production of the Note was evidence of a transfer of the Note pursuant to the UCC and that Petitioner was in possession of the Note, this is not sufficient evidence that Petitioner is the “holder” of the Note. As discussed in detail below, the Note was not indorsed to Petitioner or to bearer, a prerequisite to confer upon Petitioner the status of holder under the UCC. See N.C. Gen. Stat. § 25-1-201(b)(21) (requiring that, to be a holder, a person must be in possession of the note payable to bearer or to the person in possession of the note). “`[M]ere possession’ of a note by a party to whom the note has neither been indorsed nor made payable `does not suffice to prove ownership or holder status.'” Adams, __ N.C. App. at __, 693 S.E.2d at 710 (quoting Econo-Travel Motor Hotel Corp., 301 N.C. at 203, 271 S.E.2d at 57).

Petitioner acknowledges that following the signing of the Note by Mr. Gilbert, the Note was sequentially assigned to several entities, as indicated by the series of indorsements on the Allonge, reprinted above. Respondents argue these indorsements present two problems. First, Respondents state that Petitioner did not provide any evidence to establish that Deutsche Bank National Trust Company had the authority, as the attorney-in-fact for First National Bank of Nevada, to assign the Note to Residential Funding Corporation in the second assignment. Respondents make no argument——and cite no authority to establish——that such evidence is needed. Therefore, we do not address the merits of this alleged error and deem it abandoned. See N.C. R. App. P. 28(6) (2011) (“Issues not presented in a party’s brief, or in support of which no reason or argument is stated, will be taken as abandoned.”)

Second, Respondents argue Petitioner has not offered sufficient evidence that Deutsche Bank Trust Company Americas as Trustee for Residential Accredit Loans, Inc. Series 2006-QA6 was the holder of the Note and, thus, the party entitled to proceed with the foreclosure action. We agree.

Respondents note the third and final assignment on the Allonge was made to “Deutsche Bank Trust Company Americas as Trustee,” which is not the party asserting a security interest in Respondents’ property; this action was brought by Deutsche Bank Trust Company Americas as Trustee for Residential Accredit Loans, Inc. Series 2006-QA6, the entity the trial court found to be the owner and holder of the Note. Section 3-110 of the UCC, as codified in our General Statutes, states in pertinent part:

For the purpose of determining the holder of an instrument, the following rules apply:

. . . .

(2) If an instrument is payable to (i) a trust, an estate, or a person described as trustee or representative of a trust or estate, the instrument is payable to the trustee, the representative, or a successor of either, whether or not the beneficiary or estate is also named . . . .

N.C. Gen. Stat. § 25-3-110(c) (2009) (emphasis added). Additionally, the official comments to this section of the UCC state, in part, “This provision merely determines who can deal with an instrument as a holder. It does not determine ownership of the instrument or its proceeds.” Id. § 25-3-110, Official Comment 3.

In the present case, the Note is clearly indorsed “PAY TO THE ORDER OF Deutsche Bank Trust Company Americas as Trustee.” Thus, pursuant to section 25-3-110(c)(2), the Note is payable to Deutsche Bank Trust Company Americas as Trustee. See Id. Because the indorsement does not identify Petitioner and is not indorsed in blank or to bearer, it cannot be competent evidence that Petitioner is the holder of the Note. See N.C. Gen. Stat. § 25-1-201(b)(21) (defining “holder” as “[t]he person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession“); Econo-Travel Motor Hotel Corp., 301 N.C. at 204, 271 S.E.2d at 57 (concluding that where the defendants produced a copy of the note indorsed to an entity other than the plaintiff, the “defendants established that plaintiff was not the owner or holder of the note”).

In addition to the Note and Allonge, Petitioner points to two affidavits provided by two GMAC Mortgage employees as further evidence that the trial court’s findings are based on sufficient competent evidence. Again, we disagree.

The first affidavit is an Affidavit of Indebtedness by Jeffrey Stephan (“Stephan”).[2] In his affidavit, Stephan averred, inter alia, he was a limited signing officer for GMAC Mortgage, the sub-servicer of Mr. Gilbert’s loan, and as such, was “familiar with the books and records of [GMAC Mortgage], specifically payments made pursuant to the Note and Deed of Trust.” Accordingly, Stephan testified as to the principal amount of Mr. Gilbert’s loan and to his history of loan payments. Stephan further testified that after the Note and Deed of Trust were executed they were “delivered” to the original lender, First National Bank of Arizona; the original lender then “assigned and transferred all of its right, title and interest” to First National Bank of Nevada, which, in turn, assigned all its rights, title, and interest in the instruments to Residential Funding Corporation. The final assignment to which Stephan averred is an assignment and securitization of the Note and Deed of Trust from Residential Funding Corporation to “Deutsche Bank Trust Company Americas as Trustee.” Stephan then makes the conclusory statement, “Deutsche Bank Trust Company Americas as Trustee for Residential Accredit Loans, Inc. Series 2006-QA6 is the current owner and holder of the Note and Deed of Trust described herein.”

Whether Deutsche Bank Trust Company Americas as Trustee for Residential Accredit Loans, Inc. Series 2006-QA6 is the owner and holder of the Note and Deed of Trust is a legal conclusion that is to be determined by a court of law on the basis of factual allegations. As such, we disregard Stephan’s conclusion as to the identity of the “owner and holder” of the instruments. See Lemon v. Combs, 164 N.C. App. 615, 622, 596 S.E.2d 344, 349 (2004) (“`Statements in affidavits as to opinion, belief, or conclusions of law are of no effect.'” (quoting 3 Am. Jur. 2d, Affidavits § 13 (2002))); see also Speedway Motorsports Int’l Ltd. v. Bronwen Energy Trading, Ltd., __ N.C. App. __, __ n.2, __ S.E.2d __, __ n.2, slip op. at 12 n.2, No. 09-1451 (Feb. 15, 2011) (rejecting a party’s contention that this Court must accept as true all statements found in the affidavits in the record, stating, “our standard of review does not require that we accept a witness’ characterization of what `the facts’ mean”). While Stephan referred to a Pooling and Servicing Agreement (“PSA”) that allegedly governs the securitization of the Note to Deutsche Bank Trust Company Americas as Trustee, the PSA was not included in the record and will not be considered by this Court. See N.C. R. App. P. 9(a) (2011) (“In appeals from the trial division of the General Court of Justice, review is solely upon the record on appeal, the verbatim transcript of proceedings, if one is designated, and any other items filed pursuant to this Rule 9.”) The record is void of any evidence the Note was assigned and securitized to a trust.

We also note that Stephan alleged no facts as to who possesses Mr. Gilbert’s note, other than his averment that the Note was “delivered” to the original lender, First National Bank of Arizona. Stephan referred to a statement made by counsel for GMAC Mortgage that the original Note “would be brought to the foreclosure hearing,” but he did not provide any facts from which the trial court could determine who has possession of the Note. As demonstrated by Connolly,63 N.C. App. at 551, 306 S.E.2d at 125. Thus, we conclude Stephan’s affidavit is not competent evidence to support the trial court’s conclusion that Deutsche Bank Trust Company Americas as Trustee for Residential Accredit Loans, Inc. Series 2006-QA6 is the owner and holder of Mr. Gilbert’s note. discussed above, production of a note at trial is not conclusive evidence of possession.

Petitioner also provided the affidavit of Scott Zeitz (“Zeitz”), who alleged in his affidavit to be a litigation analyst for GMAC Mortgage. Zeitz’s basis for his affidavit testimony is that he works with “the documents that relate to account histories and account balances of particular loans” and that he is familiar with Mr. Gilbert’s account. Accordingly, Zeitz testified to the details of Mr. Gilbert’s loan and the terms of the Note. Zeitz’s affidavit, substantially similar to the affidavit of Jeffrey Stephan, also averred to the transfer of the Note and Deed of Trust through the series of entities indicated on the Allonge, stating in part:

Residential Funding Corporation sold, assigned and transferred all of its right, title and interest in and to the Note and Deed of Trust to Deutsche Bank Trust Company Americas as Trustee for Residential Accredit Loans, Inc. Series 2006-QA6. This is reflected on the Allonge to the Note, a true and accurate copy of which is attached and incorporated hereto as EXHIBIT 5. (Emphasis added.)

This statement is factually incorrect; the Allonge in the record contains no indorsement to Deutsche Bank Trust Company Americas as Trustee for Residential Accredit Loans, Inc. Series 2006-QA6. Zeitz further stated that “Deutsche Bank Trust Company Americas as Trustee for Residential Accredit Loans, Inc. Series 2006-QA6 is the current owner and holder of the Note and Deed of Trust.” This statement is a legal conclusion postured as an allegation of fact and as such will not be considered by this Court. See Lemon, 164 N.C. App. at 622, 596 S.E.2d at 349.

Unlike Jeffrey Stephan, Zeitz stated that Deutsche Bank Trust Company Americas as Trustee for Residential Accredit Loans, Inc. Series 2006-QA6 “has possession of the original Note and Deed of Trust.” We note, however, that “[w]hen an affiant makes a conclusion of fact, it must appear that the affiant had an opportunity to observe and did observe matters about which he or she testifies.” Lemon, 164 N.C. App. at 622, 596 S.E.2d at 348-49 (quoting 3 Am. Jur. 2d Affidavits § 13) (internal quotation marks omitted). Moreover,

[t]he personal knowledge of facts asserted in an affidavit is not presumed from a mere positive averment of facts but rather the court should be shown how the affiant knew or could have known such facts and if there is no evidence from which an inference of personal knowledge can be drawn, then it is presumed that such does not exist.

Id. at 622-23, 596 S.E.2d at 349 (quoting 3 Am. Jur. 2d Affidavits § 14, cited with approval in Currituck Associates Residential P’ship v. Hollowell, 170 N.C. App. 399, 403-04, 612 S.E.2d 386, 389 (2005)). Thus, while Zeitz concluded as fact that Deutsche Bank Trust Company Americas as Trustee for Residential Accredit Loans, Inc. Series 2006-QA6 has possession of the Note, his affidavit provides no basis upon which we can conclude he had personal knowledge of this alleged fact. Because of these deficiencies, we conclude that neither the affidavit of Jeffrey Stephan nor the affidavit of Scott Zeitz is competent evidence to support the trial court’s finding that Deutsche Bank Trust Company Americas as Trustee for Residential Accredit Loans, Inc. Series 2006-QA6 is the owner and holder of Mr. Gilbert’s note.

III. Conclusion

We conclude the record is lacking of competent evidence sufficient to support that Petitioner is the owner and holder of Mr. Gilbert’s note and deed of trust. The trial court erred in permitting the Substitute Trustee to proceed with foreclosure proceedings and its order is

Reversed.

Judges MCGEE and BEASLEY concur.

[1] During the pendency of this action, the Gilberts filed a separate action against Deutsche Bank Trust Company Americas, Residential Funding, LLC, GMAC Mortgage, LLC, and David A. Simpson, P.C. to litigate, inter alia, their TILA claim in Hyde County Superior Court. The defendants removed the action to federal court. See Gilbert v. Deutsche Bank Trust Co. Americas, slip op. at 1, 4:09-CV-181-D, 2010 WL 2696763 (E.D.N.C. July 7, 2010), reconsideration denied, 2010 WL 4320460 (E.D.N.C. Oct. 19, 2010). Because the Gilberts’ claim was filed more than three years after the loan transaction was completed, the federal trial court dismissed the action for failure to state a claim upon which relief could be granted. Id. at __, slip op. at 5.

[2] This Court finds troubling that GMAC Mortgage, LLC was recently found to have submitted a false affidavit by Signing Officer Jeffrey Stephan in a motion for summary judgment against a mortgagor in the United States District Court of Maine. Judge John H. Rich, III concluded that GMAC Mortgage submitted Stephan’s false affidavit in bad faith and levied sanctions against GMAC Mortgage, stating:

[T]he attestation to the Stephan affidavit was not, in fact, true; that is, Stephan did not know personally that all of the facts stated in the affidavit were true. . . . GMAC [Mortgage] was on notice that the conduct at issue here was unacceptable to the courts, which rely on sworn affidavits as admissible evidence in connection with motions for summary judgment. In 2006, an identical jurat signed under identical circumstances resulted in the imposition of sanctions against GMAC [Mortgage] in Florida. James v. U.S. Bank Nat. Ass’n, 272 F.R.D. 47, 48 (D. Me. 2011).

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IN RE: TIFFANY M. KRITHARAKIS | US Bankruptcy Trustee Slams Deutsche Bank and their “Retroactive” Assignments of Mortgage

IN RE: TIFFANY M. KRITHARAKIS | US Bankruptcy Trustee Slams Deutsche Bank and their “Retroactive” Assignments of Mortgage


UNITED STATES BANKRUPTCY COURT
DISTRICT OF CONNECTICUT
BRIDGEPORT DIVISION

In re
TIFFANY M. KRITHARAKIS,
Debtor.

UNITED STATES TRUSTEE’S MOTION FOR RULE 2004 EXAMINATION OF
REPRESENTATIVE(S) OF DEUTSCHE BANK NATIONAL TRUST COMPANY, AS
TRUSTEE FOR SOUNDVIEW HOME LOAN TRUST 2005-OPTI,
ASSET BACKED CERTIFICATES, SERIES 2005-OPTI

EXCERPT:

21. Also annexed to the Amended Proof of Claim is a copy of the Sand Canyon AOM whereby Sand Canyon Corporation f/k/a Option One Mortgage Corporation assigned its rights to the Mortgage to Deutsche. See Amended POC at Part 8. The Sand Canyon AOM is dated June 11, 2010 but has an effective date of assignment of May 1, 2005. Id. The Sand Canyon AOM is signed by Rhonda Werdel (“Werdel”) as Assistant Secretary of Sand Canyon Corporation FKA Option One Mortgage Corporation. Id. The May 1, 2005 effective date contained in the Sand Canyon AOM conflicts with the January 19, 2005 dated contained in the Option One Allonge. See Amended POC at Part 5 and Part 8.

22. On information and belief, American Home Mortgage Servicing, Inc. purchased the mortgage servicing rights of Sand Canyon in April 2008. See Declaration of Dale M. Sugimoto, As President of Sand Canyon Corporation, dated March 18, 2009, doc id # 141 in In re Ron Wilson, Sr. and LaRhonda Wilson, 07-11862 (EWM), United States Bankruptcy Court for the Eastern District of Louisiana attached here to as Exhibit 3 (“March 2009 Sugimoto Declaration”). According to the March 2009 Sugimoto Declaration, Sand Canyon does not own any mortgage servicing rights or any residential real estate mortgages. See Exhibit 3 at ¶ ¶ 5, 6. As such, it appears that the Sand Canyon AOM executed in June 2010 may be deficient because Sand Canyon did not own any mortgages in 2010.

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The Mortgage Was Like a Shell Game; So Is Responsibility in 3 Deaths

The Mortgage Was Like a Shell Game; So Is Responsibility in 3 Deaths


New York Times-

The promise made by a mortgage company in San Diego could not have been more blunt. “Accredited Home Lenders offers an unusually broad line of subprime mortgage products for wholesale mortgage brokers,” the company’s Web site boasted in its heyday.

“Send us your toughest loans, and let us earn your business.”

Those were the days: from 2005 to 2007, Accredited made $29 billion in subprime loans.

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Full Deposition Transcript of ROY DIAZ Shareholder of Smith, Hiatt & Diaz, P.A. Law Firm

Full Deposition Transcript of ROY DIAZ Shareholder of Smith, Hiatt & Diaz, P.A. Law Firm


Excerpts:

Q. So through that corporate authority as
Exhibit 4 to this deposition, MERS assented to the terms
Of this assignment of mortgage?

A. Through me.

Q. So it was you that assented to the terms of
This assignment of mortgage.

A. The one in this case, yes.

Q. And no one else.

A. Correct

Q. And you signed as vice president of MERS
acting solely as a nominee for America’s Wholesale
Lender; is that correct?

A. Yes, it is.

Q. How did you know that MERS was nominee for
America’s Wholesale Lender?

A. By reviewing documentation.

Q. What documentation?

A. I don’t specifically recall what I reviewed
In this case to see that, to determine that, but I would
have reviewed either the mortgage or I would have
reviewed other documentation that would have established
that to me.

Q. So in this case you don’t remember a single
Document that you looked at that would establish the
Nominee status of MERS for America’s Wholesale Lenders;
Is that correct?

A. I don’t

Q. Did someone at America’s Wholesale Lender
Tell you that MERS was acting as the nominee?

A. No.

Q. Did someone at MERS tell you they were
Acting as Nominee for America’s Wholesale Lender?

A. NO.

Q. Was America’s Wholesale Lender in existence
On May 19, 2010?

A. don’t now.

Q. Did you check that before signing this
assignment of mortgage?

A. No.

<SNIP>

Q. Now, you’ve said you review the MERS
Website and you’ve seen documents like this, like
Composite Exhibit 6. Any reason why you wouldn’t review
the documents contained in Exhibit 6 before executing the
assignment of mortgage?

A. It’s not necessary.

Q. Why not?

A. Because it’s not. Because I decided it’s
not.

Q. You as vice president of MERS?

A. In every possible capacity as it relates to
This case.

Q. Did you sign this assignment of mortgage
after being retained as counsel for the plaintiff?

A. After my law firm was retained?

Q. (Nods head.)

A. Is that the question?

Q. Sure.

A. Yes.

Q. Okay. So you executed an assignment to be
Used as evidence in your case, correct?

A. Sure.

Q. Is that a yes?

A. It’s a sure.

Q. Is that a yes o a no?

A. You said sure earlier. Was that a yes or a
No?

Q. Okay. So…

A. It’s a yes.

Q. It’s a yes.

And were you aware when you signed the
assignment of mortgage that MERS was a defendant in this
Case?

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Adam Levitin’s Amicus Brief in CMBS Deal | La VILLITA MOTOR INNS v. ORIX CAPITAL MARKETS

Adam Levitin’s Amicus Brief in CMBS Deal | La VILLITA MOTOR INNS v. ORIX CAPITAL MARKETS


Could this be the Ibanez of CMBS?

AMICUS BRIEF IN SUPPORT OF APPELLANT’S PETITION FOR REVIEW

La Villita Motor Inns, J.V., Executive Motels of San Antonio, Inc., and S.A. Sunvest
Hotels, Inc
.

Appellant,

v.

Orix Capital Markets, LLC, Bank of America, N.A. LNR Partners, Inc., Capmark
Finance, Inc., Nicholas M. Pyka as Trustee, Michael N. Blue as Trustee, and Greta E.
Goldsby as Trustee
,

Appellees.

Excerpt:

INTRODUCTION

This case involves a controversy about mortgage servicing. Mortgage servicing is the administration of mortgage loans—the collection of payments and management of defaults—on behalf of third parties. Mortgage servicing is an essential component of mortgage securitization, which is the predominant method for financing commercial mortgages in major metropolitan markets and for financing residential mortgages nationwide.

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FDIC OIG Report: Evaluation of Federal Regulatory Oversight of Washington Mutual Bank, Department of the Treasury, Federal Deposit Insurance Corporation, Report No. EVAL-10-002 April 2010

FDIC OIG Report: Evaluation of Federal Regulatory Oversight of Washington Mutual Bank, Department of the Treasury, Federal Deposit Insurance Corporation, Report No. EVAL-10-002 April 2010


April 9, 2010

John E. Bowman, Acting Director
Office of Thrift Supervision

Sheila C. Bair, Chairman
Federal Deposit Insurance Corporation

This report presents the results of our review of the failure of Washington Mutual Bank (WaMu), Seattle, Washington; the Office of Thrift Supervision’s (OTS) supervision of the institution; and the Federal Deposit Insurance Corporation’s (FDIC) monitoring of WaMu for insurance assessment purposes. OTS was the primary federal regulator for WaMu and was statutorily responsible for conducting full-scope examinations to assess WaMu’s safety and soundness and compliance with consumer protection laws and regulations. FDIC was the deposit insurer for WaMu and was responsible for monitoring and assessing WaMu’s risk to the Deposit Insurance Fund (DIF). On September 25, 2008, FDIC facilitated the sale of WaMu to JPMorgan Chase & Co in a closed bank transaction that resulted in no loss to the DIF.

Section 38(k) of the Federal Deposit Insurance Act requires the cognizant Inspector General to conduct a material loss review (MLR) of the causes of the failure and primary federal regulatory supervision when the failure causes a loss of $25 million to the DIF or 2 percent of an institution’s total assets at the time the FDIC was appointed receiver. Because the FDIC facilitated a sale of WaMu to JPMorgan Chase & Co without incurring a material loss to the DIF, an MLR is not statutorily required. However, given WaMu’s size, the circumstances leading up to WaMu’s sale, and non-DIF losses, such as the loss of shareholder value, the Inspectors General of the Department of the Treasury and FDIC believed that an evaluation of OTS and FDIC actions could provide important information and observations as the Administration and the Congress consider regulatory reform.

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MA BK Judge Vacates Own Ruling “MERS Assignment Fail, Securitization Fail, Deutsche Was NOT Owner of Mortgage” IN RE: SCHWARTZ

MA BK Judge Vacates Own Ruling “MERS Assignment Fail, Securitization Fail, Deutsche Was NOT Owner of Mortgage” IN RE: SCHWARTZ


Ibanez, 458 Mass. at 651 (emphasis added). None of the evidence thus far presented at trial indicated that the plaintiff’s mortgage was part of the Trust Fund, or how the Depositor acquired the Trust Fund.

In re: SIMA SCHWARTZ, Debtor.

SIMA SCHWARTZ, Plaintiff,

v.

HOMEQ SERVICING, AGENT FOR DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE and DEUTSCHE BANK NATIONAL COMPANY, AS TRUSTEE, Defendants.

Case No. 06-42476-MSH, Adv. Pro. No. 07-04098.

United States Bankruptcy Court, D. Massachusetts, Central Division.

April 7, 2011.

MEMORANDUM AND ORDER ON PLAINTIFF?S MOTION FOR A NEW TRIAL

Excerpt:

A central question at trial was whether defendant Deutsche was the owner of the mortgage on the plaintiff’s home during the foreclosure process which resulted in the foreclosure sale of the home on May 24, 2006.2 The plaintiff introduced into evidence a document entitled “Assignment of Mortgage” dated May 23, 2006, which reflected the assignment of the plaintiff’s mortgage from the original mortgagee, Mortgage Electronic Registration Systems, Inc., as nominee for First NCL Financial Services, LLC, to defendant Deutsche. During the plaintiff’s case, all parties agreed that this assignment was dated prior to the date of the foreclosure sale. No party disputed its authenticity or validity. Because the assignment was executed prior to the foreclosure sale and its validity was not questioned, I ruled at trial that the plaintiff had failed to carry her burden of proving that Deutsche was not the owner of the mortgage when it foreclosed.

In her motion for a new trial, the plaintiff argues that I misconstrued Massachusetts law, pointing out that the Massachusetts Supreme Judicial Court in U.S. Bank. Nat’l Ass’n v. Ibanez, 458 Mass. 673, 941 N.E.2d 40 (2011) recently held that in order for a foreclosure sale to be valid the mortgage must have been assigned to the foreclosing entity not merely before the sale, but prior to the first publication of notice of that sale required by Mass. Gen. Laws. ch. 244, § 14. Ibanez, 458 Mass. at 647-48. I agree with the plaintiff’s interpretation of Ibanez and since the May 23, 2006 assignment was executed after the foreclosure notices had been published, I could not rely on the assignment exclusively in granting the defendants judgment on partial findings. In light of the foregoing I must determine whether and to what extent to open the March 6, 2011 judgment for the defendants.

In Count I of the complaint, the plaintiff seeks a ruling that the foreclosure sale was invalid. Not only does the March 23, 2006 assignment fail to establish the validity of the foreclosure sale, it constitutes the only evidence presented that at the time Deutsche began publishing notice of the sale, Deutsche was not the holder of the mortgage. The defendants argue that the pooling and servicing agreement dated November 1, 2005 which is listed in the joint pretrial  memorandum as a trial exhibit provides evidence that the mortgage on the plaintiff’s property was assigned to Deutsche well before the foreclosure process had begun. The excerpt of the pooling and servicing agreement that was admitted during the plaintiff’s case in chief, however, provides no such evidence. The excerpt indicates that an entity defined as the “Depositor” assigned the “Trust Fund”, which I presume included mortgages listed on a mortgage loan schedule not provided, to Deutsche, as Trustee for the benefit of the certificateholders of the Morgan Stanley Home Equity Loan Trust 2005-4. In Ibanez, the Supreme Judicial Court held that where, as here, a recordable assignment was not executed prior to the first publication of a notice of a foreclosure sale, the foreclosing entity may nevertheless prove that it was the mortgagee at the relevant time. The Court observed:

[w]here a pool of mortgages is assigned to a securitized trust, the executed agreement that assigns the pool of mortgages, with a schedule of the pooled mortgage loans that clearly and specifically identifies the mortgage at issue as among those assigned, may suffice to establish the trustee as the mortgage holder. However, there must be proof that the assignment was made by a party that itself held the mortgage.

Ibanez, 458 Mass. at 651 (emphasis added). None of the evidence thus far presented at trial indicated that the plaintiff’s mortgage was part of the Trust Fund, or how the Depositor acquired the Trust Fund.

I find that the plaintiff has presented sufficient evidence of the chain of title of the mortgage on her property to carry her burden of persuasion that the mortgage was not owned by Deutsche before the first publication of the notice of foreclosure sale. I must, therefore, vacate and open the judgment for the defendants on Count I of the complaint.

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DailyFinance | COURT: Busted Securitization Prevents Foreclosure

DailyFinance | COURT: Busted Securitization Prevents Foreclosure


On March 30, an Alabama judge issued a short, conclusory order that stopped foreclosure on the home of a beleaguered family, and also prevents the same bank in the case from trying to foreclose against that couple, ever again. This may not seem like big news — but upon review of the underlying documents, the extraordinarily important nature of the decision and the case becomes obvious.

No Securitization, No Foreclosure



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Ka-B°oO°M!!! Alabama Judge Denies Securitization Trustee Standing To Foreclose HORACE v. LaSALLE BANK NA

Ka-B°oO°M!!! Alabama Judge Denies Securitization Trustee Standing To Foreclose HORACE v. LaSALLE BANK NA


Attorney Nick Wooten does it again and again!

PHYLLIS HORACE

v.

LASALLE BANK NATIONAL
ASSOCIATION, et al

EXCERPT:

ORDERED, ADJUDGED, AND DECREED:

Following hearing and review of all submissions from the parties the Court has come to two conclusions necessary for the disposition of this case:

First, the Court is surprised to the point of astonishment that the defendant trust (LaSalle Bank National Association) did not comply with the terms of it’s own Pooling and Servicing Agreement and further did not comply with the New York Law in attempting to obtain assignment of plaintiff Horac’s note and mortgage.

Second, the plaintiff Horace is a third party beneficiary of the Pooling and Servicing Agreement created by the defendant trust (Lasalle Bank National Association). Indeed without such Pooling and Servicing Agreements, plaintiff Horace and other mortgages similarly situated would never have been able to obtain financing.

[…]

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[Full Docs]

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Judge Schack Gives One Last Shot For Trust Which Purchased Tax Liens To Produce a Vaild POA of an Officer From Trust

Judge Schack Gives One Last Shot For Trust Which Purchased Tax Liens To Produce a Vaild POA of an Officer From Trust


2011 NY Slip Op 50375(U)

NYCTL 2009-A TRUST AND THE BANK OF NEW YORK AS COLLATERAL AGENT AND CUSTODIAN FOR THE NYCTL 2009-A TRUST, Plaintiffs,
v.
273 BRIGHTON BEACH AVE. REALTY CO., ET AL., Defendants.

8124/10.

Supreme Court, Kings County.

Decided March 15, 2011.

Leonid Krechmer, Esq., Windels Marx Lane & Mittendorf LLP, NY NY, Plaintiff.

The defendant did not answer, Defendant.

ARTHUR M. SCHACK, J.

In this action to foreclose on a tax lien for the premises located at 273 Brighton Beach Avenue, Brooklyn, New York (Block 8672, Lot 31, County of Kings), plaintiffs,

NYCTL 2009-A TRUST AND THE BANK OF NEW YORK AS COLLATERAL AGENT AND CUSTODIAN FOR THE NYCTL 2009-A TRUST (THE TRUST), previously moved for an order to appoint a referee to compute and amend the caption. In my December 7, 2010 decision and order, I denied the motion without prejudice, because the affidavit submitted in support of the motion, upon the default of defendants, was not executed by an officer of THE TRUST or someone with a power of attorney from THE TRUST. I granted leave to plaintiffs to renew their motion, within sixty (60) days of the December 7, 2010 decision and order, upon plaintiffs’ presentation to the Court of its compliance with the statutory requirements of CPLR § 3215 (f), with “an affidavit of facts” executed by someone who is an officer of THE TRUST or someone who has a valid power of attorney from THE TRUST.

Plaintiffs moved in a timely manner, on December 29, 2010, and renewed their motion for the appointment of a referee and to amend the caption. However, plaintiffs failed to comply with my December 7, 2010 decision and order. Therefore, the Court grants plaintiffs one final opportunity to comply, within sixty (60) days of this decision and order, by presenting the Court with “an affidavit of facts” executed by someone who is an officer of THE TRUST or someone who has a valid power of attorney from THE TRUST. A repeated failure to comply with this court order will mandate the dismissal of the instant action with prejudice.

Background

THE TRUST purchased certain tax liens from the City of New York on August 18, 2009. These liens, including the tax lien for the premises known as 273 Brighton Beach Avenue, Brooklyn, New York (Block 8672, Lot 31, County of Kings), were recorded in the Kings County Office of the City Register, New York City Department of Finance, on August 25, 2009, at City Register File Number (CRFN) XXXXXXXXXXXXX.

Plaintiffs’ original moving papers for an order to appoint a referee to compute and amend the caption failed to present an “affidavit made by the party,”pursuant to CPLR § 3215 (f). Instead the previous motion contained an affidavit of merit by Marc Marino, who stated “I am the Authorized Signatory of Mooring Tax Asset Group, LLC, servicing agent for plaintiffs in the within action.” For reasons unknown to the Court, plaintiffs failed to provide any power of attorney authorizing Mooring Tax Asset Group, LLC to go forward with the instant foreclosure action. Therefore, in my December 7, 2010 decision and order, I denied without prejudice the original motion, for the appointment of a referee to compute and to amend the caption. I granted plaintiffs leave to comply with CPLR § 3215 (f) by providing an “affidavit made by the party,” whether by an officer of THE TRUST or someone with a valid power of attorney from THE TRUST, within sixty (60) days from my December 7, 2010 decision and order.

In the instant renewed motion, “[i]n an effort to comply with said [December 7, 2010] Decision and Order, Plaintiffs submit with the instant application the Affidavit of Marc Marino sworn to on December 21, 2010, and a relevant except from the Servicing Agreement, certified pursuant to CPLR § 2105 (Exhibit “E”) [¶ 11 of affirmation in support of motion].” Further, plaintiffs’ counsel alleges that this “establishes . . . Plaintiffs’ compliance with CPLR § 3215 (f), including Marc Marino’s personal knowledge of the facts and his authority to seek the relief requested herein.” Despite the arguments presented by plaintiffs’ counsel, it is clear that plaintiffs’ counsel failed to comply with my December 7, 2010 decision and order. Plaintiff’s submission is not in compliance with the requirements of CPLR § 3215 (f).

Discussion

CPLR § 3215 (f) states:

On any application for judgment by default, the applicant shall file proof of service of the summons and the complaint, or a summons and notice served pursuant to subdivision (b) of rule 305 or subdivision (a) of rule 316 of this chapter, and proof of the facts constituting the claim, the default and the amount due by affidavit made by the party. . . Where a verified complaint has been served, it may be used as the affidavit of the facts constituting the claim and the amount due; in such case, an affidavit as to the default shall be made by the party or the party’s attorney. [Emphasis added].

Plaintiffs continue to fail to submit “proof of the facts” in “an affidavit made by the party.” The renewed “affidavit of facts” was submitted by Marc Marino, “the Authorized Signatory of Mooring Tax Asset Group, LLC, servicing agent for plaintiffs in the within action.” Further, plaintiffs’ counsel provided the Court with snippets of the July 1, 2009 Amended and Restated Servicing Agreement between NYCTL 2009-A TRUST, Issuer, MOORING TAX ASSET GROUP, LLC, Servicer and THE BANK OF NEW YORK MELLON, Paying Agent and Collateral Agent and Custodian, consisting of the cover paper, pages 16, 17, 18 and three signature pages. In my December 7, 2010 decision and order I stated that:

Mr. Marino must have, as plaintiffs’ agent, a valid power of attorney for that express purpose. Additionally, if a power of attorney is presented to this Court and it refers to servicing agreements, the Court needs a properly offered copy of the servicing agreements, to determine if the servicing agent may proceed on behalf of plaintiffs.

(EMC Mortg. Corp. v Batista, 15 Misc 3d 1143 (A), [Sup Ct, Kings County 2007]; Deutsche Bank Nat. Trust Co. v Lewis, 14 Misc 3d 1201 (A) [Sup Ct, Suffolk County 2006]).

While it appears in the snippets, on page 17, that the Servicer might have authority to prepare affidavits in support of a foreclosure action, the Court, in following the requirements of CPLR § 3215 (f), needs an affidavit by an officer of THE TRUST or someone with a valid power of attorney from THE TRUST.

General Obligations Law § 5 — 1501 (10) defines “power of attorney” as “a written document by which a principal with capacity designates an agent to act on his or her behalf.” The selected portions presented of the July 1, 2009 Amended and Restated Servicing Agreement are not a power of attorney. Further, the Court wonders why plaintiffs’ counsel did not present the entire servicing agreement for review. Is there classified information in the document? Moreover, unlike a power of attorney, the parties executing the July 1, 2009 Amended and Restated Servicing Agreement did not sign under penalty of perjury before a notary public. One signatory, Jacqueline Kuhn, Assistant Treasurer, signed the document for THE BANK OF NEW YORK MELLON, as Paying Agent and Collateral Agent and Custodian, and then acknowledged and agreed to the agreement for THE BANK OF NEW YORK MELLON, as Indenture Trustee. It is comforting to know that Ms. Kuhn agreed with herself.

Therefore, the instant renewed motion for an order to appoint a referee to compute and amend the caption is denied without prejudice. The Court will grant THE TRUST a final opportunity for the appointment of a referee to compute and to amend the caption by its timely submission of an affidavit by either an officer of THE TRUST, or someone with a valid power of attorney from THE TRUST, possessing personal knowledge of the facts.

Plaintiffs’ counsel is reminded of the recent December 16, 2010 Court of Appeals decision, in Gibbs v St. Barnabas Hosp. (16 NY3d 74), which instructed, at *5:

As this Court has repeatedly emphasized, our court system is dependent on all parties engaged in litigation abiding by the rules of proper practice (see e.g. Brill v City of New York, 2 NY3d 748 [2004]; Kihl v Pfeffer, 94 NY2d 118 [1999]). The failure to comply with deadlines not only impairs the efficient functioning of the courts and the adjudication of claims, but it places jurists unnecessarily in the position of having to order enforcement remedies to respond to the delinquent conduct of members of the bar, often to the detriment of the litigants they represent. Chronic noncompliance with deadlines breeds disrespect for the dictates of the Civil Practice Law and Rules and a culture in which cases can linger for years without resolution.

Furthermore, those lawyers who engage their best efforts to comply with practice rules are also effectively penalized because they must somehow explain to their clients why they cannot secure timely responses from recalcitrant adversaries, which leads to the erosion of their attorney-client relationships as well. For these reasons, it is important to adhere to the position we declared a decade ago that “[i]f the credibility of court orders and the integrity of our judicial system are to be maintained, a litigant cannot ignore court orders with impunity [Emphasis added].” (Kihl, 94 NY2d at 123).

“Litigation cannot be conducted efficiently if deadlines are not taken seriously, and we make clear again, as we have several times before, thatdisregard of deadlines should not and will not be tolerated (see Miceli v State Farm Mut. Auto Ins. Co., 3 NY3d 725 [2004]; Brill v City of New York, 2 NY3d 748 [2004]; Kihl v Pfeffer, 94 NY2d 118 [1999]) [Emphasis added].” (Andrea v Arnone, Hedin, Casker, Kennedy and Drake, Architects and Landscape Architects, P.C., 5 NY3d 514, 521 [2005]).” As we made clear in Brill, and underscore here, statutory time frames —like court-order time frames (see Kihl v Pfeffer, 94 NY2d 118 [1999]) — are not options, they are requirements, to be taken seriously by the parties. Too many pages of the Reports, and hours of the courts, are taken up with deadlines that are simply ignored [Emphasis added].” (Miceli, 3 NY3d at 726-726).

Conclusion

Accordingly, it is

ORDERED, that the renewed motion of plaintiffs NYCTL 2009-A TRUST AND THE BANK OF NEW YORK AS COLLATERAL AGENT AND CUSTODIAN FOR THE NYCTL 2009-A TRUST, for an order appointing a referee to compute and amend the caption in a tax lien foreclosure action for the premises located at 273 Brighton Beach Avenue, Brooklyn, New York (Block 8672, Lot 31, County of Kings) is denied without prejudice; and it is further

ORDERED, that leave is granted to plaintiffs NYCTL 2009-A TRUST AND THE BANK OF NEW YORK AS COLLATERAL AGENT AND CUSTODIAN FOR THE NYCTL 2009-A TRUST, to renew its application, within sixty (60) days of this decision and order, for an order appointing a referee to compute and amend the caption in a tax lien foreclosure action for the premises located at 273 Brighton Beach Avenue, Brooklyn, New York (Block 8672, Lot 31, County of Kings), upon presentation to the Court of its compliance with the statutory requirements of CPLR § 3215 (f), with an affidavit of facts by someone with authority to execute such an affidavit; and it is further

ORDERED, the failure of plaintiffs NYCTL 2009-A TRUST AND THE BANK OF NEW YORK AS COLLATERAL AGENT AND CUSTODIAN FOR THE NYCTL 2009-A TRUST, to comply with the requirements of the preceding paragraph will result in the dismissal with prejudice of the instant tax lien foreclosure action for the premises located at 273 Brighton Beach Avenue, Brooklyn, New York (Block 8672, Lot 31, County of Kings).

This constitutes the Decision and Order of the Court.

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Posted in STOP FORECLOSURE FRAUDComments (1)

More Evidence That Mortgage Loans Were Not Properly Conveyed to Securitization Trusts

More Evidence That Mortgage Loans Were Not Properly Conveyed to Securitization Trusts


Via: Naked Capitalism

We’ve described in various posts how evidence is growing that the participants in mortgage securitizations sometime early in this century appear to have ignored the requirements of a variety of laws and their own contracts. We believe the most serious and difficult to remedy problem results when the parties involved in the creation of a mortgage securitization failed to take the steps necessary to convey the loans to the legal entity, a trust, which was set up to hold them. As we wrote:

…. there is substantial evidence that in many cases, the notes were not conveyed to the trust as stipulated. As we have discussed, the pooling and servicing agreement, which governs who does what when in a mortgage securitization, requires the note (the borrower IOU) to be endorsed (just like a check, signed by one party over to the next), showing the full chain of title. The minimum conveyance chain in recent vintage transactions is A (originator) => B (sponsor) => C (depositor) => D (trust).

The proper conveyance of the note is crucial, since the mortgage, which is the lien, is a mere accessory to the note and can be enforced only by the proper note holder (the legalese is “real party of interest”). The investors in the mortgage securitization relied upon certifications by the trustee for the trust at and post closing that the trust did indeed have the assets that the investors were told it possessed.

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



Posted in STOP FORECLOSURE FRAUDComments (1)

WHITE PAPER: The Trustee’s Role in Asset-Backed Securities

WHITE PAPER: The Trustee’s Role in Asset-Backed Securities


November 9, 2010

—By the American Bankers Association, Corporate Trust Committee

Executive Summary
In this position paper, the Corporate Trust Committee is responding to current assertions that the obligations of trustees in asset-backed securities1 (?ABS?) are greater than the duties contractually undertaken by those trustees.

These assertions, which have been made by participants in the ABS market by investors, investment advisors, rating agencies and others2, fail to recognize the legal limitations on the duties of ABS trustees and have been made in response to both disappointing ABS investment performance and market issues arising from the current economic crisis. Although ABS investment performance has been disappointing, particularly with respect to certain residential mortgage-backed securities, and there were numerous market issues which gave rise to the current crisis, it is the position of the Committee that the contractual role of the trustee was not a contributing factor to either the investment performance or the market issues which may have caused or affected it.3 Moreover, in many instances, ambiguities or errors in the transaction documents governing impaired asset-backed securities have been construed in ways that were not contemplated or bargained for by the original transaction parties and that seek to alter the role and potential liability of trustees to a degree not warranted either by the contractual language or applicable statutory and common law. As a basic principle, the Committee acknowledges the need for more clarity in transaction documents generally going forward. However, the Committee’s position is that any issues that were neither contemplated by nor addressed in the documents governing current ABS transactions must be resolved in accordance with the legal contracts governing those transactions and generally accepted rules of contractual interpretation. Reliance on clear hindsight, even with the goal of protecting particular constituencies or investors generally, to impose duties retroactively on trustees that are clearly outside the range of duties undertaken in their contracts effectively abrogates those contracts and violates basic tenets of U.S. contract law.

[ipaper docId=42227548 access_key=key-1uknn1d8h89ukxpfkc5z height=600 width=600 /]

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



Posted in STOP FORECLOSURE FRAUDComments (0)

[VIDEO] Mortgage Fraud Clearing House

[VIDEO] Mortgage Fraud Clearing House


MUST WATCH

Investors are looking for banks to buy back potentially fraudulent residential mortgage-backed securities (RMBS). “The Strategy Session” hosts discuss this topic with Talcott Franklin, the principal of Talcott Franklin PC, whose firm has organized a RMBS clearinghouse on behalf of investors.

“Creature of their own Creation”

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



Posted in STOP FORECLOSURE FRAUDComments (3)

NEW YORK STATE COURT FORECLOSURE FRAUD CASES

NEW YORK STATE COURT FORECLOSURE FRAUD CASES


Beginning 4/22/2011

This area is for Members Only

Over 200+ Cases and growing

All at your finger tips

Order now.

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Access code with link will be emailed to you shortly.

These fees help pay for research and costs associated in running this site.

Not all New York cases

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



Posted in STOP FORECLOSURE FRAUDComments (4)

MERS BIFURCATED THE NOTE AND MORTGAGE, NOW THERE IS TROUBLE!

MERS BIFURCATED THE NOTE AND MORTGAGE, NOW THERE IS TROUBLE!


DinSFLA

This is what we have been saying from day 1. By using MERS they have split the Note and Mortgage= “Bifurcate”.

By not assigning from the Originator to the Sponsor this is where lies the problem. Instead they transferred the notes to the Trusts in ___________________________ name? Which leaves this a Bearer instrument.

So by maintaining the notes in a bearer name, each step must have been documented and assigned according to the PSA. If these were securitized, question is did the true sale ever happen? Bottom Line.

Delivery & Acceptance Must Happen


Nearly all Pooling and Servicing Agreements require that On the Closing Date, the Purchaser will assign to the Trustee pursuant to the Pooling and Servicing Agreement all of its right, title and interest in and to the Mortgage Loans and its rights under this Agreement (to the extent set forth in Section 15), and the Trustee shall succeed to such right, title and interest in and to the Mortgage Loans and the Purchaser’s rights under this Agreement (to the extent set forth in Section 15). Also, an Assignment of Mortgage must accompany each note and this almost never happens.

We believe nearly every single loan transferred was transferred to the Trust in blank name. That is to say the actual loans were apparently not, as of either the cut-off or closing dates, assigned to the Trust as required by the PSA.

Quite the can of worms. Anyone who says that the banks will fix all this in a few months is seriously delusional.

I am not a pro, finance guru and that is why there is a comment section below. But I do have common sense and I smell scam.

Vanilla, chocolate, strawberry …each state is different. Eliminate Electronic Recordings PERIOD!

One of the best videos I have seen on this crisis.

MORTGAGE POOL SECURITIZATION CHART

RELATED LINKS:

SECURITIZATION 101

.

MERS 101

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



Posted in assignment of mortgage, bifurcate, chain in title, deed of trust, foreclosure, foreclosure fraud, foreclosures, mbs, MERS, mortgage, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC.Comments (4)

DRAFTING MOTIONS FOR RELIEF FROM STAY IN CHAPTER 13 CASES

DRAFTING MOTIONS FOR RELIEF FROM STAY IN CHAPTER 13 CASES


ANTICIPATING DEBTOR’S CHALLENGES AND WITHSTANDING LITIGATION

Via: Brian Davies

GREAT LOOK AT THE BANKS WAY OF TRYING TO GET AROUND THE BANKRUPTCY. HERE IS THE WAY THEY LOOK AT THE ASSIGNMENTS AND TRANSFERS. NOTE THE POOLING AND SERVICING AGREEMENTS ARE IMPORTANT. IT ALSO SCREWS THEM WHEN THEY TRY TO TRANSFER AFTER THE CLOSE OF THE TRUST.

[ipaper docId=36801375 access_key=key-1gd8wpuuku9gainunkxb height=600 width=600 /]

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



Posted in bankruptcy, brian w. davies, chain in title, deed of trust, discovery, foreclosure, foreclosure fraud, foreclosures, mortgage, note, securitization, servicers, trustee, TrustsComments (1)

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