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BofA, U.S. Bancorp sued for role as WaMu bond trustee

BofA, U.S. Bancorp sued for role as WaMu bond trustee


Another day, another new suit against securities.

REUTERS-

Bank of America Corp (BAC.N) and U.S. Bancorp (USB.N) have been sued by a Chicago pension fund that said they failed to protect investors in their roles as trustees for mortgage-backed securities for Washington Mutual Inc.

Wednesday’s complaint was filed eight days after U.S. District Judge William Pauley in Manhattan let four pension funds pursue similar claims against Bank of New York Mellon Corp (BK.N) over its role as trustee for Countrywide Financial Corp mortgage debt.

[REUTERS]

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U.S. BANK v. MOORE | Oklahoma SC “a fundamental precept of the law to expect a foreclosing party to actually be in possession of its claimed interest in the Note”

U.S. BANK v. MOORE | Oklahoma SC “a fundamental precept of the law to expect a foreclosing party to actually be in possession of its claimed interest in the Note”


U.S. BANK v. MOORE
2012 OK 32

Case Number: 109763
Decided: 04/10/2012

THE SUPREME COURT OF THE STATE OF OKLAHOMA


Cite as: 2012 OK 32, __ P.3d __


NOTICE: THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION IN THE PERMANENT LAW REPORTS. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR WITHDRAWAL.

 


U.S. BANK, NATIONAL ASSOCIATION, NOT IN ITS INDIVIDUAL CAPACITY BUT SOLELY AS TRUSTEE ON BEHALF OF GSAA HOME EQUITY TRUST 2006-6, Plaintiff/Appellee,
v.
DAVID F. MOORE, a/k/a DAVID F. MOORE and BARBARA MOORE a/k/a BARBARA K. MOORE, Defendants/Appellants.

ON APPEAL FROM THE DISTRICT COURT OF OKLAHOMA COUNTY
HONORABLE BRYAN C. DIXON
DISTRICT JUDGE

¶0 Appeal of a summary judgment granted on May 13, 2011, in favor of Chase Home Finance, LLC, and against David F. and Barbara Moore. In a Journal Entry of Judgment, filed on August 26, 2011, the trial court found the Appellant was the undisputed owner and holder of the Note and Mortgage. The Moores appealed on September 23, 2011, arguing standing, and this Court retained the matter on November 18, 2011.

REVERSED AND REMANDED WITH INSTRUCTIONS

Gary L. Blevins, GARY L. BLEVINS & ASSOCIATES, PC, Oklahoma City Oklahoma, for Defendants/Appellants.
Bryan Miles Harrington and A. Grant Schwabe, KIVELL, RAYMENT AND FRANCIS, PC, Tulsa, Oklahoma, for Plaintiff/Appellee.

COMBS, J.

FACTUAL AND PROCEDURAL HISTORY

¶1 On October 21, 2005, David F. Moore and Barbara Moore, husband and wife (hereinafter “Appellants”), executed a Note and Mortgage in favor of Colonial Bank, N.A. (hereinafter “Lender”), for property located in Oklahoma County, Oklahoma. Mortgage Electronic Registration Systems, Inc. (hereinafter “MERS”), was designated as the nominee for the lender pursuant to subsection (C) of the Mortgage.1 Within the Mortgage was a security interest provision with the following granting clause:

Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument, but, if necessary to comply with law or custom, MERS (as nominee for Lender and Lender’s successors and assigns) has the right: to exercise any or all of those interests, including. . .the right to foreclose and sell the Property.

¶2 Also contained in the Mortgage was a provision entitled “Sale of Note; Change of Loan Servicer.” Per the terms of this provision:

The Note or a partial interest in the Note (together with this Security Instrument) can be sold one or more times without prior notice to Borrower.

Thus, the borrower may have difficulty in determining who holds the note and mortgage, and to whom the payment is due.

¶3 Appellants defaulted on the Note during August of 2008. U.S. Bank, National Association, commenced foreclosure proceedings on December 24, 2008, not in its individual capacity, but solely as trustee on behalf of GSAA Home Equity Trust 2006-6 (hereinafter “Appellee”). According to the verified petition, the Appellee was “the present holder of said Note and Mortgage having received due assignment through mesne assignments of record or conveyance via mortgaging servicing transfer.” The original petition did not attach a copy of the note in question sued upon. Appellants answered, pro se, on May 20, 2009. Appellants disputed all allegations and requested that the Appellee’s “submit additional documentation to prove their claims including the representation that they were the “present holder of said Note.” Appellee subsequently filed an amended petition and a second amended petition to add additional defendants. Neither of these amendments included a copy of the note sued upon.

¶4 Appellee submitted its Motion for Summary Judgment (hereinafter the “Motion”) to the court on November 20, 2009. Again, the Appellee represented that it was the holder of the Note. Documentation attached to the Motion attempted tosupport this representation: it included the Mortgage, the Note, an Assignment of Mortgage, and an Affidavit in Support of Appellee’s Motion for Summary Judgment. For the first time, Appellee submitted the Note and Mortgage to the trial court. The note was indorsed in blank and contained no date for the indorsement.

¶5 Executed on October 21, 2005, the Note designated the Appellants as the Borrowers and Colonial Bank, N.A., as the Lender. The following agreement, inter alia, was made:

I [Appellants] understand that the Lender may transfer this Note. The Lender or anyone who takes this Note by transfer and who is entitled to receive payments under this Note is called the ‘Note Holder.’

An Assignment of Mortgage (hereinafter the “Assignment”) was attached to the motion. MERS, again as nominee for the Lender, assigned the Mortgage, which secured “the payment of a certain promissory note” described therein, to the Appellee.2 The Assignment was executed and notarized on February 11, 2009; it was recorded one week later, but made effective “11/27/2008.” In other words, the Assignment was executed after the foreclosure suit commenced, but made effective before the filing of the petition as well as any subsequent amendments to the petition.

¶6 Appellants did not respond to Appellee’s Motion, and the trial court entered a default judgment against them. The trial court entered a final judgment, on December 17, 2009, (hereinafter “Judgment”) in favor of the Appellee. The judgment concluded that Appellee was the owner and holder of the Note and Mortgage; the court then approved an Order of Sale. Approximately six (6) weeks later, on January 31, 2010, the Appellants filed for protection under Chapter 7 of Title XI of the United States Bankruptcy Code, which stayed the proceedings. On March 2, 2011, the bankruptcy court granted Appellee’s Motion to Lift the Automatic Stay. Shortly thereafter, on March 18, 2011, with the assistance of counsel, the Appellants filed a Petition to Vacate the Judgment. The trial court subsequently dismissed the Appellants Petition to Vacate the Judgment.

STANDARD OF REVIEW

¶7 The standard of review3for a trial court’s ruling either vacating or refusing to vacate a judgment is abuse of discretion. Ferguson Enterprises, Inc. v. Webb Enterprises, Inc., 2000 OK 78, ¶ 5, 13 P.3d 480, 482; Hassell v. Texaco, Inc., 1962 OK 136, 372 P.2d 233. A clear abuse-of-discretion standard includes appellate review of both fact and law issues. Christian v. Gray, 2003 OK 10, ¶ 43, 65 P.3d 591, 608. An abuse of discretion occurs when a court bases its decision on an erroneous conclusion of law, or where there is no rational basis in evidence for the ruling. Fent v. Oklahoma Natural Gas Co., 2001 OK 35, ¶12; 27 P.3d 477, 481.

ANALYSIS

¶8 The Appellants have questioned the standing of the Appellee to commence foreclosure proceedings against them. “Standing refers to a person’s legal right to seek relief in a judicial forum.” Fent v. Contingency Review Board, 2007 OK 27, ¶ 7, 163 P.3d 512, 519-520. Foremost, the party seeking relief must prove that they suffered an actual and concrete injury. Absent an injury of this nature, the party lacks standing. Whether or not such an injury exists is determined at the commencement of the lawsuit. Lujan v. Defenders of Wildlife, 504 U.S. 555, 570, n. 5, 112 S. Ct. 2130, 2142, 119 L.Ed. 351 (1992).

¶9 Countering, Appellee argues that Appellants have forfeited the opportunity to question enforcement of the Note. However, a review of the record reveals the Appellants, in their pro se Answer, clearly questioned the ability of the Appellee to enforce the Note.4 It is settled law in Oklahoma that standing “may be raised at any stage of the judicial process by any party or by the court sua sponte.” Hendrick v Walters, 1993 OK 162, ¶ 4, 865 P.2d 1232, 1234 (emphasis original). Therefore, this issue is properly before the Court.

¶10 Article III of the Uniform Commercial Code (hereinafter “U.C.C.”) governs negotiable instruments and is codified in the Oklahoma Statutes. Promissory notes are negotiable instruments. See, 12A OS 2001, § 3-104. The Appellee has the burden of showing that it is entitled to enforce the instrument. See Reserve Loan Life Ins. Co. v. Simmons, 1929 OK 669, ¶ 9, 282 P. 279, 281. Unless the Appellee was able to enforce the Note at the time the suit was commenced, it cannot maintain its foreclosure action against the Appellants.

¶11 Ownership of the note determines ownership of the mortgage. Engle v. Federal Nat’l. Mortg. Ass’n, 1956 OK 176, ¶ 7, 300 P.2d 997, 999. Oklahoma law does not permit the bifurcation of the security interest from the note. Deutsche Bank National Trust v. Brumbaugh, 2012 OK 3, ___P.3d ___; BAC Home Loans Servicing, L.P. v. White, 2011 OK CIV APP 35, ¶ 10, 256 P.3d 1014, 1017. A party which is assigned a mortgage without the accompanying promissory note holds no rights of enforcement. Id. Plainly, a party must properly acquire rights to both instruments before such party is able to enforce their terms.

¶12 In the present case, the only instrument attached to Appellee’s petition was the Mortgage. Appellee did not produce the Note until the summary disposition stage. Under the U.C.C., both holders and non-holders in possession of a negotiable instrument are permitted to enforce the instrument. 12A OS 2001, § 3-301. A “holder” is “(A) the person in possession of a negotiable instrument that is payable either to bearer5 or to an identified person that is the person in possession. 12A OS 2001, § 1-201(21).6 The evidence in the present matter is not clear as to whether the Appellee held the Note as a “holder” or as a “non-holder in possession with the ability to enforce the Note.

¶13 To enforce a negotiable instrument as a non-holder in possession, the moving party must show (i) that the party possessed the negotiable instrument when suit was filed; (ii) how possession was achieved; and (iii), if necessary, that the purpose of the transfer was to transfer rights of enforcement. 12A O.S. 2001, § 3-301. The Appellee has not demonstrated its possession of the Note at the time it commenced foreclosure proceedings against Appellants.

¶14 Appellants contend Appellee lacks standing to commence this foreclosure action. Appellants further allege the validity of the affidavit offered in support of Appellees Motion for Summary Judgment. The dispositive issue is whether or not Appellee has standing. Appellants’ argument is based on the failure of Appellee to establish Appellee was a person entitled to enforce the Note at the commencement of the action and the inability to establish the effectiveness of the indorsements attached to the Note when the Note was ultimately produced as an exhibit to the Appellees Motion for Summary Judgment.

¶15 This Court has previously held:

Standing, as a jurisdictional question, may be correctly raised at any level of the judicial process or by the Court on its own motion. This Court has consistently held that standing to raise issues in a proceeding must be predicated on interest that is “direct, immediate and substantial.” Standing determines whether the person is the proper party to request adjudication of a certain issue and does not decide the issue itself. The key element is whether the party whose standing is challenged has sufficient interest or stake in the outcome.

Matter of the Estate of Doan, 1986 OK 15, ¶7, 727 P.2d 574, 576. In Hendrick v. Walters, 1993 OK 162, ¶ 4, 865 P.2d 1232, 1234, this Court also held:

Respondent challenges Petitioner’s standing to bring the tendered issue. Standing refers to a person’s legal right to seek relief in a judicial forum. It may be raised as an issue at any stage of the judicial process by any party or by the court sua sponte. (Emphasis original)

¶16 Furthermore, in Fent v. Contingency Review Board, 2007 OK 27, footnote 19, 163 P.3d 512, 519, this Court stated “[s]tanding may be raised at any stage of the judicial process or by the court on its own motion.” Additionally in Fent, this Court stated:

Standing refers to a person’s legal right to seek relief in a judicial forum. The three threshold criteria of standing are (1) a legally protected interest which must have been injured in fact- i.e., suffered an injury which is actual, concrete and not conjectural in nature, (2) a causal nexus between the injury and the complained-of conduct, and (3) a likelihood, as opposed to mere speculation, that the injury is capable of being redressed by a favorable court decision. The doctrine of standing ensures a party has a personal stake in the outcome of a case and the parties are truly adverse.

Fent v. Contingency Review Board, 2007 OK 27, ¶7, 163 P.3d 512, 519-520. In essence, a plaintiff who has not suffered an injury attributable to the defendant lacks standing to bring a suit. And, thus, “standing [must] be determined as of the commencement of suit; . . .” Lujan v. Defenders of Wildlife, 504 U.S. 555, 570, n.5, 112 S.Ct. 2130, 2142, 119 L.Ed. 351 (1992).

¶17 To commence a foreclosure action in Oklahoma, a plaintiff must demonstrate it has a right to enforce the note and, absent a showing of ownership, the plaintiff lacks standing. Gill v. First Nat. Bank & Trust Co. of Oklahoma City, 1945 OK 181, 159 P.2d 717.7An assignment of the mortgage, however, is of no consequence because under Oklahoma law, “[p]roof of ownership of the note carried with it ownership of the mortgage security.” Engle v. Federal Nat. Mortg. Ass’n, 1956 OK 176, ¶7, 300 P.2d 997, 999. Therefore, in Oklahoma it is not possible to bifurcate the security interest from the note.” Deutsche Bank National Trust v. Brumbaugh, 2012 OK 3, ___P.3d ___; BAC Home Loans Servicing, L.P. v. White, 2011 OK CIV APP 35, ¶ 10, 256 P.3d 1014, 1017. Because the note is a negotiable instrument, it is subject to the requirements of the UCC. Thus, a foreclosing entity has the burden of proving it is a “person entitled to enforce an instrument” by showing it was “(i) the holder of the instrument, (ii) a nonholder in possession of the instrument who has the rights of a holder, or (iii) a person not in possession of the instrument who is entitled to enforce the instrument pursuant to Section 12A-3-309 or subsection (d) of Section 12A-3-418 of this title.” 12A O.S. 2001 §3-301.

¶18 To show you are the “holder” of the Note you must prove you are in possession of the note and the note is either “payable to bearer” (blank indorsement) or to an identified person that is the person in possession (special indorsement).8 Therefore, both possession of the note and an indorsement on the note or attached allonge9 are required in order for one to be a “holder” of the Note.

¶19 Negotiation is the voluntary or involuntary transfer of an instrument by a person other than the issuer to a person who thereby becomes its holder. 12A O.S. 2001, § 3-201. Transfer occurs when the instrument 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. 12A O.S. 2001, § 3-203. Delivery of the note would still have to occur even though there is no negotiation. Delivery is defined as the voluntary transfer of possession. 12A O.S. 2001, § 1-201(b) (15). The transferee would then be vested with any right of the transferor to enforce the note. 12A O.S. 2001, 3-203(b). Some jurisdictions have held, without holder status and therefore the presumption of a right to enforce, the possessor of the note must demonstrate both the fact of the delivery and the purpose of the delivery of the Note to the transferee in order to qualify as the person entitled to enforce. In re Veal, 50 B.R. 897, 912 (B.A.P. 9th Cir. 2011). See also, 12A O.S. 2001, § 3-203.

¶20 Appellee must also demonstrate it became a “person entitled to enforce” prior to the filing of the foreclosure proceeding. We find there is no evidence in the record establishing Appellee had standing to commence this foreclosure action. The trial court’s granting of a default judgment in favor of Appellee could not have been rationally based upon the evidence or Oklahoma law. Therefore, we find that the trial court abused its discretion by dismissing the Appellants Petition to Vacate the default judgment. Because this issue is dispositive, we will not address the remaining issues on appeal. The order denying Appellant’s petition and motion to vacate should be reversed and remanded back for further proceedings to determine whether Appellee is a person entitled to enforce the Note consistent with this opinion.

CONCLUSION

¶21 It is a fundamental precept of the law to expect a foreclosing party to actually be in possession of its claimed interest in the Note, and to have the proper supporting documentation in hand when filing suit, showing the history of the Note, so that the defendant is duly apprised of the rights of the plaintiff. This is accomplished by showing the party is a holder of the instrument or a nonholder in possession of the instrument who has the rights of a holder, or a person not in possession of the instrument who is entitled to enforce the instrument pursuant to 12A O.S. 2001, § 3-309 or 12A O.S. 2001, § 3-418. Likewise, for the homeowners, absent adjudication on the underlying indebtedness, today’s decision to reverse the dismissal of the petition and motion to vacate cannot cancel their obligation arising from an authenticated Note, or insulate them from foreclosure proceedings based on proven delinquency. This Court’s decision in no way releases or exonerates the debt owed by the defendants on this home. See, U.S. Bank National Association v. Kimball, 27 A.3d 1087, 75 UCC Rep.Serv.2d 100, 2011 VT 81 (VT 2011); and Indymac Bank, F.S.B. v. Yano-Horoski, 78 A.D.3d 895, 912 N.Y.S.2d 239 (2010).

REVERSED AND REMANDED WITH INSTRUCTIONS

¶22 CONCUR: TAYLOR, C.J., KAUGER, WATT, EDMONDSON, REIF, COMBS, JJ.

¶23 DISSENT: WINCHESTER (JOINS GURICH, J.), GURICH (BY SEPARATE WRITING), JJ.

¶24 RECUSED: COLBERT, V.C.J.

FOOTNOTES

1 Subsection (C) of the Mortgage reads as follows: “‘MERS’ is Mortgage Electronic Registration Systems, Inc. MERS is a separate corporation that is acting solely as a nominee for Lender and Lender’s successors and assigns. MERS is the mortgagee under this security instrument.”

2 Specifically, the assignment was made to “U.S. Bank National Association, not in its individual capacity, but solely as trustee on behalf of GSAA Home Equity Trust 2006-6.”

3 Summary judgment decisions are reviewed de novo, Carmichael v. Beller, 1996 OK 48, ¶ 2, 914 P.2d 1051, 1053, whereas orders denying or granting a petition to vacate are reviewed for an abuse of discretion, Patel v. OMH Medical Center, Inc. , 1999 OK 33 at ¶ 20.

4 In relevant part, the Answer states: “The defendants hereby dispute the cause and information within the petition and hereby request that the plaintiff provide proper documentation of any and all allegations” including the allegation that the Appellee was present holder of the Note and Mortgage and thereby entitled to enforce its terms.

5 Bearer” means…a person in possession of an instrument, negotiable tangible document of title, or certificated security payable to bearer or endorsed in blank. 12A, O.S. 2001§ 1-201(5).

6 Documents of title are not at issue. Therefore, this is the only relevant U.C.C. definition of “holder.”

7 This opinion occurred prior to the enactment of the UCC. It is, however, possible for the owner of the note not to be the person entitled to enforce the note if the owner is not in possession of the note. (See the REPORT OF THE PERMANENT EDITORIAL BOARD FOR THE UNIFORM COMMERCIAL CODE, APPLICATION OF THE UNIFORM COMMERCIAL CODE TO SELECTED ISSUES RELATING TO MORTGAGE NOTES (NOVEMBER 14, 2011)).

812A O.S. 2001, §§ 1-201(b)(21), 3-204 and 3-205

9 According to Black’s Law Dictionary (9th ed. 2009) an allonge is “[a] slip of paper sometimes attached to a negotiable instrument for the purpose of receiving further indorsements when the original paper is filled with indorsements.” It should be noted that under 12A O.S. 2001, § 3-204(a) and its comments in paragraph 2, it is no longer necessary that an instrument be so covered with previous indorsements that additional space is required before an allonge may be used. An allonge, however, must still be affixed to the instrument.


GURICH, J., with whom WINCHESTER, J. joins dissenting:

¶1 I respectfully dissent. In this case, the record indicates that attached to Plaintiff’s Motion for Summary Judgment was an indorsed-in-blank note, the mortgage, an assignment of mortgage, and an affidavit in support of the motion for summary judgment. Because the Plaintiff was the proper party to pursue the foreclosure and because the Plaintiff presented the proper documentation at summary judgment to prove such, the trial court did not abuse its discretion in denying Defendants’ Petition to Vacate. I would affirm the trial court for the reasons stated in my dissenting opinions in Deutsche Bank National Trust Co. v. Matthews, 2012 OK 14, ___P.3d___ (Gurich, J. dissenting) and Bank of America, NA v. Kabba, 2012 OK 23, ___P.3d___ (Gurich, J. dissenting).1

FOOTNOTES

1 Although I originally concurred in the majority opinion in Deutsche Bank National Trust v. Brumbaugh, 2012 OK 3, ___P.3d___, which the majority now cites as authority in this case, after further consideration, I disagree with the majority’s analysis in that case, and my views on the issues in these cases are accurately reflected in J.P. Morgan Chase Bank N.A. v. Eldridge, 2012 OK 24, ___P.3d___ (Gurich, J. concurring in part and dissenting in part); Kabba, 2012 OK 23, ___P.3d___ (Gurich, J. dissenting); CPT Asset Backed Certificates, Series 2004-EC1 v. Kham, 2012 OK 22, ___P.3d___ (Gurich, J. dissenting); Deutsche Bank National Trust Co. v. Richardson, 2012 OK 15, ___P.3d___ (Gurich, J. concurring in part and dissenting in part); and Matthews, 2012 OK 14, ___P.3d___ (Gurich, J. dissenting).

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NJ gets green light to enter final judgment of uncontested foreclosure actions

NJ gets green light to enter final judgment of uncontested foreclosure actions


“It is FURTHER ORDERED that the Office of Foreclosure is authorized to recommend the entry of final judgment pursuant to Rule 1:34-6 in uncontested actions which the procedures set forth in this Order have been followed.”


 

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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.
* *

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U.S. Bank v Dellarmo | NY Appellate Division, 2nd Dept. “Corrective Assignment of Mortgage”, “Transfer or ASMT of only the mortgage without the debt is a nullity”

U.S. Bank v Dellarmo | NY Appellate Division, 2nd Dept. “Corrective Assignment of Mortgage”, “Transfer or ASMT of only the mortgage without the debt is a nullity”


Decided on April 3, 2012

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE DIVISION : SECOND JUDICIAL DEPARTMENT

PETER B. SKELOS, J.P.
L. PRISCILLA HALL
LEONARD B. AUSTIN
ROBERT J. MILLER, JJ.
2010-11958
(Index No. 2986/06)

[*1]U.S. Bank National Association, etc., respondent,

v

Joseph Dellarmo, also known as Joseph Dell’Armo, appellant, et al., defendants.

Schloss & Schloss, Airmont, N.Y. (Jonathan B. Schloss of
counsel), for appellant.
Locke Lord, LLP, New York, N.Y. (R. James DeRose III of
counsel), for respondent.

DECISION & ORDER

In an action to foreclose a mortgage, the defendant Joseph Dellarmo, also known as, Joseph Dell’Armo, appeals from an order of the Supreme Court, Rockland County (Weiner, J.), entered October 5, 2010, which denied his motion pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against him for lack of standing.

ORDERED that the order is reversed, on the law, with costs, and the motion of the defendant Joseph Dellarmo, also known as Joseph Dell’Armo, to dismiss the complaint insofar as asserted against him is granted.

In commencing this action on April 25, 2006, to foreclose a mortgage entered into by the defendant Joseph Dellarmo, also known as Joseph Dell’Armo (hereinafter Dellarmo), the plaintiff asserted in its complaint that it had been assigned the subject mortgage by assignment dated April 11, 2006, which was duly recorded with the Clerk of Rockland County. Dellarmo failed to answer or appear, but thereafter moved, inter alia, to enjoin the plaintiff from foreclosing on the property on the ground that it lacked standing, and to vacate a default judgment entered against him. On October 30, 2009, while Dellarmo’s motion was pending, a “Corrective Assignment of Mortgage” (hereinafter the corrective assignment) dated July 28, 2009, to the plaintiff was recorded with the Clerk of Rockland County, purporting to “correct and replace the April 11, 2006 assignment . . . which was sent for recording but was lost prior to being recorded” by the Clerk of Rockland County. The corrective assignment was notarized outside New York State but unaccompanied by a CPLR 2309(c) certification. By order dated January 4, 2010, the Supreme Court determined, based on the April 11, 2006, assignment, which the complaint described as having been recorded, and without referencing the corrective assignment, that the plaintiff had standing to commence this action, and directed a hearing to determine the validity of the service of process. Following the hearing, the Supreme Court vacated the default judgment entered against Dellarmo.

Dellarmo moved pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against him, contending, among other things, that the corrective assignment was a nullity, as it had been notarized out-of-state without the required CPLR 2309(c) certification, and, even if the corrective assignment was valid, the plaintiff nevertheless lacked standing to bring this action, as it was not the holder in due course of both the mortgage and note when it commenced the action. The Supreme Court denied the motion, finding that the failure to accompany the corrective assignment with a CPLR 2309(c) certification was not a fatal defect and that Dellarmo raised merely speculative doubts about the validity of the corrective assignment. Dellarmo appeals, and we [*2]reverse.

The plaintiff’s failure to comply with CPLR 2309(c) in submitting various documents, including, among others, the corrective assignment, which were notarized outside the state but not accompanied with a certificate in conformity with CPLR 2309(c), was not a fatal defect, as such certification may be provided nunc pro tunc (see CPLR 2001; Betz v Daniel Conti, Inc., 69 AD3d 545; Matapos Tech. Ltd. v Compania Andina de Comercio Ltda, 68 AD3d 672, 673; Smith v Allstate Ins. Co., 38 AD3d 522).

“In a mortgage foreclosure action, a plaintiff has standing where it is both the holder or assignee of the subject mortgage and the holder or assignee of the underlying note at the time the action is commenced” (Bank of N.Y. v Silverberg, 86 AD3d 274, 279; see Countrywide Home Loans, Inc. v Gress, 68 AD3d 709). Where a defendant raises the issue of standing, the plaintiff must prove its standing to be entitled to relief (see CitiMortgage, Inc. v Rosenthal, 88 AD3d 759; U.S. Bank, N.A. v Collymore, 68 AD3d 752, 753). Moreover, while assignment of a promissory note also effectuates assignment of the mortgage (see Bank of N.Y. Silverberg, 86 AD3d at 280; U.S. Bank, N.A. v Collymore, 68 AD3d at 753-754; Mortgage Elec. Registration Sys., Inc. v Coakley, 41 AD3d 674), the converse is not true: since a mortgage is merely security for a debt, it cannot exist independently of the debt, and thus, a transfer or assignment of only the mortgage without the debt is a nullity and no interest is acquired by it (see Deutsche Bank Natl. Trust Co. v Barnett, 88 AD3d 636; Bank of N.Y. v Silverberg, 86 AD3d at 280). The failure to record an assignment prior to the commencement of the action is not necessarily fatal since “an assignment of a note and mortgage need not be in writing and can be effectuated by physical delivery” (Bank of N.Y. v Silverberg, 86 AD3d at 280; see Deutsche Bank Natl. Trust Co. v Barnett, 88 AD3d 636; U.S. Bank, N.A. v Collymore, 68 AD3d at 754; LaSalle Bank Natl. Assn. v Ahearn, 59 AD3d 911, 912).

Here, as the plaintiff concedes, the complaint incorrectly asserts that the April 11, 2006, assignment of the mortgage to the plaintiff had been duly recorded. Further, there is no allegation that the note or mortgage was physically delivered to the plaintiff prior to commencement of the action (compare Mortgage Elec. Registration Sys., Inc. v Coakley, 41 AD3d 674). The record also suggests that in the order dated January 4, 2010, in which the Supreme Court held that the plaintiff had standing pursuant to the April 11, 2006, assignment, the court relied upon the incorrect assertion in the complaint that the April 11, 2006, assignment had been recorded. The Supreme Court referred only to the April 11, 2006, assignment and made no reference to the corrective assignment’s purported replacement of the April 11, 2006, assignment.

The plaintiff now relies on the corrective assignment, which was recorded with the Clerk of Rockland County on October 30, 2009, to demonstrate that it was a holder of the mortgage as of the April 25, 2006, commencement of this action. The corrective assignment recites, in pertinent part, that it “is meant to correct and replace the April 11, 2006 assignment by and between the parties herein which was sent for recording but was lost prior to being recorded” in Rockland County. However, inasmuch as the complaint does not allege that the note was physically delivered to the plaintiff, and nothing in the plaintiff’s submission in opposition to Dellarmo’s motion could support a finding that such physical delivery occurred, the corrective assignment cannot be given retroactive effect (see Countrywide Home Loans, Inc. v Gress, 68 AD3d at 710; Wells Fargo Bank, N.A. v Marchione, 69 AD3d 204, 210; LaSalle Bank Natl. Assn. v Ahearn, 59 AD3d at 912-913). Moreover, both the unrecorded April 11, 2006, assignment and the recorded corrective assignment indicate only that the mortgage was assigned to the plaintiff. Since an assignment of a mortgage without the underlying debt is a nullity (see Deutsche Bank Natl. Trust Co. v Barnett, 88 AD3d 636; Bank of N.Y. v Silverberg, 86 AD3d at 280), the plaintiff has failed to demonstrate that it had standing to commence this action (see Bank of N.Y. v Silverberg, 86 AD3d at 280; U.S. Bank, N.A. v Collymore, 68 AD3d at 754).

Accordingly, the Supreme Court should have granted Dellarmo’s motion pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against him for lack of standing.

In light of the foregoing, we need not reach Dellarmo’s remaining contentions.
SKELOS, J.P., HALL, AUSTIN and MILLER, JJ., concur.

ENTER:

Aprilanne Agostino

Clerk of the Court

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NEW YORK CONTINUES ASSAULT ON MERS

NEW YORK CONTINUES ASSAULT ON MERS


By Jonathan C. Cross and Stacey Trimmer

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

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U.S. Bank N A. v Nyarkoha | NYSC “endorsement on the underlying note, however, is undated, and in blank…does not state the actual date of physical delivery of the note.”

U.S. Bank N A. v Nyarkoha | NYSC “endorsement on the underlying note, however, is undated, and in blank…does not state the actual date of physical delivery of the note.”


Decided on February 29, 2012

Supreme Court, Queens County

 

U.S. Bank National Association, as Trustee, for CSFB ARMT 2006-2, 3476 Stateview Boulevard, Ft. Mill, SC 29715, Plaintiff,

against

Dorcas Nyarkoha, et al., Defendants.

13409/2009

Appearances of Counsel:

For the Plaintiff:Hogan Lovells U.S. LLP, by Allison J. Schoenthal, Danielle Mastriano, & Nicole Schiavo, Esqs., 875 Third Avenue, New York, NY 10022

For Defendant Dorcas Nyarkoha: Sumani Lanka, Esq., The Legal Aid Society – – Civil Practice, 120-46 Queens Boulevard, Kew Gardens, New York 11415-1204

Charles J. Markey, J.

The following papers numbered 1 to 13 read on this motion by defendant Dorcas Nyarkoha, pursuant to CPLR 3012(d), for leave to serve and file a late answer, as proposed.

Papers Numbered

Notice of Motion – Affidavits – Exhibits ……………………………………………………………….1-4

Answering Affidavits – Exhibits …………………………………………………………………………5-10

Reply Affidavits ……………………………………………………………………………………………..11-13

This mortgage foreclosure action raises two controversial issues that will persist in the case law, with incongruent and inconsistent results, until a definitive ruling is eventually made by the New York Court of Appeals. The first issue, especially in the area of mortgage foreclosures, where the statutory framework provides for a conference to all answering defendants in an attempted foreclosure of a residential mortgage (see, CPLR 3408, L 2008, ch 472, § 3), is whether or not a non-answering defendant’s failure to answer timely be excused because he or she relied on ongoing settlement talks, discussions, and negotiations. The second thorny issue is whether or not a plaintiff bank’s alleged lack of standing is a meritorious defense that may be asserted by a defendant seeking permission to file a late answer.

Defendant Nyarkoha, in effect, moves to vacate her default in answering the complaint and for leave to serve a late verified answer as proposed. She claims that her default is excusable, insofar as she believed her engagement in settlement negotiations with plaintiff’s [*2]servicing agent, Wells Fargo Home Mortgage Inc. d/b/a America’s Servicing Company (“ASC”), excused her from taking further action with respect to the suit. Defendant Nyarkoha also claims she has meritorious defenses and counterclaims. The plaintiff opposes the motion.

A defendant who has failed to timely answer the complaint must provide a reasonable excuse for the default and demonstrate a potentially meritorious defense to the action, when moving to compel the acceptance of an untimely answer (see, Palmer Ave. Corp. v. Malick, 91 AD3d 853 [2nd Dept. 2012]; Lipp v Port Auth. of NY & N.J., 34 AD3d 649 [2nd Dept. 2006]; Juseinoski v Board of Educ. of City of NY, 15 AD3d 353, 356 [2nd Dept. 2005]; see also, Rodriguez v Triani, 28 Misc 3d 130(A), 2010 WL 2802747, 2010 NY Slip Op 51256(U) [App T. 2nd Dept. 2010]). The determination of what constitutes a reasonable excuse for a default in answering lies within the sound discretion of the court (see, Adolph H. Schreiber Hebrew Academy of Rockland, Inc. v Needleman, 90 AD3d 791 [2nd Dept. 2011]; Maspeth Fed. Sav. & Loan Assn. v McGown, 77 AD3d 889 [2nd Dept. 2010]; Grutman v Southgate At Bar Harbor Home Owners’ Assn., 207 AD2d 526, 527 [2nd Dept. 1994]).

Defendant Nyarkoha states that she was out of the country at the time of the service of the copy of the summons and complaint, but after her return on June 28, 2009, contacted ASC, seeking to obtain a modification of the subject mortgage. ASC, which participated in the federal Home Affordable Modification Program (“HAMP”), accepted her application for loan modification under HAMP. Defendant Nyarkoha entered into a three-month Trial Period Plan with ASC through HAMP, commencing October 1, 2009, and attended seven conferences held in the Residential Foreclosure Part, wherein she was represented by the Legal Aid Society for the purpose of the conferences.

While the case was assigned to that Part, defendant Nyarkoha twice moved, in effect, to stop the running of interest on the mortgage debt. Both motions were denied. In addition, defendant Nyarkoha filed, on July 1, 2010, a pro se motion for leave to serve an answer to the complaint, which motion was repeatedly adjourned. The case was released from the Residential Foreclosure Part on December 1, 2010.

On December 28, 2010, the Legal Aid Society served and filed a notice of appearance on behalf of defendant Nyarkoha in this action. On January 27, 2011, defendant Nyarkoha served and filed a notice, indicating her withdrawal of the pro se motion for leave to serve a late answer, without prejudice to her right to refile it. The instant motion was filed six months later.

Regarding defendant Nyarkoha’s argument that she relied on ongoing settlement discussions and negotiations, the cases are mixed. A number of cases show a great reluctance, if not loathing, for such a defense as an excuse for not taking concrete action in a litigation, such as filing an answer (see, e.g., Community Preservation Corp. v Bridgewater Condominiums, LLC, 89 AD3d 784 [2nd Dept. 2011] [reliance on settlement discussions does not constitute reasonable excuse]; Mellon v Izmirligil, 88 AD3d 930 [2nd Dept. 2011] [motion to vacate was properly denied]; Maspeth Fed. Sav. & Loan Assn. v McGown, 77 AD3d 889, supra [purported reliance [*3]on settlement discussions was unsubstantiated]; Jamieson v Roman, 36 AD3d 861 [2nd Dept. 2007] [upholding denial of motion to vacate default despite party’s claim of ongoing settlement discussions, since party delayed in appearing after being served with a copy of the judgment]; Flora Co. v Ingilis, 233 AD2d 418 [2nd Dept. 1996] [reliance on settlement discussions was questionable at best]; Bank of New York v Jayaswal, 33 Misc 3d 1214(A), 2011 WL 5061626, 2011 NY Slip Op 51922(U) [Sup Ct Suffolk County 2011] [Whelan, J.] [denying motion to file a late answer, court stated that “the mere engagement in discussions aimed at a potential modification of the subject mortgage loan may not serve as a means to open up an otherwise inexcusable default in answering the summons and complaint by the defendant/mortgagor.”; discussing the competing cases and reasoning that defendant’s conversation with the plaintiff bank’s “operations consultant” could not be reasonably characterized as “legal advice” that “allegedly duped defendant . . . into not answering the complaint in a timely manner.”).

The defense or excuse of a party’s abstaining from taking any action in good faith reliance on ongoing settlement discussions and negotiations has, nevertheless, been sustained if the underlying facts and circumstances are substantiated and reasonable (see, e.g., Performance Constr. Corp. v Huntington Bldg., LLC, 68 AD3d 737, 738 [2nd Dept. 2009] [record revealed that party was actively engaged in settlement negotiations, and adversary unfairly and manipulatively failed to disclose plan to enter default judgment]; Scarlett v McCarthy, 2 AD3d 623 [2nd Dept. 2003]; HSBC Bank USA, N.A. v Cayo, ____ Misc 3d, 934 NYS2d 792, 794 [Sup Ct Kings County 2011] [party presented meritorious defense and substantiated belief that action was stayed pending settlement talks]; Emigrant Mortgage, Inc. v Abbey, 2011 WL 972555, 2011 NY Slip Op 30600(U) [Sup Ct Queens County 2011] [McDonald, J.]).

This Court, in the present action, concludes that defendant Nyarkoha’s reliance upon settlement negotiations with ASC was reasonable and her participation in the conferences is substantiated and thus constituting a sufficient and reasonable excuse for her failure to serve an answer through at least December 1, 2010.

To the extent Defendant Nyarkoha’s pro se motion for leave to serve a late answer was withdrawn prior to its submission, and the instant motion was not made for another six months, such additional delay may be attributable to her counsel and constitutes, at most, law office failure, which is excusable (see, CPLR 2005). Plaintiff has not demonstrated it has been prejudiced by the additional delay (see, Merchants Ins. Group v. Hudson Valley Fire Protection Co., Inc.,72 AD3d 762, 764 [2nd Dept. 2010]).

Plaintiff made no motion seeking any relief during that six-month period, notwithstanding that the order dated December 1, 2010, permitted it to seek an order of reference, and makes no cross motion for such relief. A strong public policy, furthermore, exists favoring the disposition of matters on their merits (see, Berardo v Guillet, 86 AD3d 459, 459 [1st Dept. 2011]; Yu v Vantage Mgt. Servs., LLC, 85 AD3d 564[1st Dept. 2011]; Billingly v Blagrove, 84 AD3d 848, 849 [2nd Dept. 2011]; Khanal v Sheldon, 74 AD3d 894, 896 [2nd Dept. 2010]; Rakowicz v [*4]Fashion Institute of Technology, 65 AD3d 536, 537 [2nd Dept. 2009]; Reed v Grossi, 59 AD3d 509, 511-512 [2nd Dept. 2009]; Bunch v Dollar Budget, Inc., 12 AD3d 391 [2nd Dept. 2004]).

The motion papers, in the case at bar, adequately demonstrate that the defendant Nyarkoha may have a meritorious defense based upon lack of standing (compare Citigroup Global Markets Realty Corp. v. Randolph Bowling, 25 Misc 3d 1244(A), 2009 WL 4893940, 2009 NY Slip Op 52567(U), slip op at 3 [Sup Ct Kings County 2011] [standing issue was not raised as a last minute gesture to avert sale of property and was thus properly raised on a motion to file a late answer] with Deutsche Bank Nat. Trust Co. v. Young, 66 AD3d 819,819 [2nd Dept. 2009] [upholding lower court’s denial of motion to vacate default in mortgage foreclosure action, Second Department stated that “the Supreme Court did not err in determining that they waived the issue of standing by failing to timely appear or answer”] and HSBC Bank, USA v. Dammond, 59 AD3d 679, 680 [2nd Dept. 2009] [where it was “undisputed that the respondent was personally served” and the defendant did not raise the standing defense until “immediately prior to the date scheduled for the sale of the property,” the Second Department stated: “The respondent waived any argument that HSBC lacked standing to commence the foreclosure action. Having failed to interpose an answer or file a timely pre-answer motion which asserted the defense of standing, the respondent waived such defense pursuant to CPLR 3211(e).”]; and Deutsche Bank Nat. Trust Co. v. Pietranico, 33 Misc 3d 528 [Sup Ct Suffolk County 2011] [Whelan, J.] [alleged lack of standing was untimely asserted on motion to vacate a default in a mortgage foreclosure action]; see, U.S. Bank, N.A. v Collymore, 68 AD3d 752 [2nd Dept. 2009] [upholding denial of plaintiff bank’s motion for summary judgment and appointment of a referee, Second Department stated: “Contrary to the Bank’s contentions, it failed to demonstrate its prima facie entitlement to judgment as a matter of law because it did not submit sufficient evidence to demonstrate its standing as the lawful holder or assignee of the subject note on the date it commenced this action.”]).

In the present action, the assignment agreement indicates that the mortgage, “[t]ogether with all moneys . . . owing or that may . . . become due or owing in [r]espect thereof,” were assigned by First United Mortgage Banking Corp. to plaintiff on May 12, 2009. The endorsement on the underlying note, however, is undated, and in blank and without recourse, and the affidavit of Jennifer Robinson, the vice-president of loan documentation for Wells Fargo, indicates that the note was physically delivered to Wells Fargo as custodian for plaintiff “prior to the commencement of this action on May 25, 2009.” The action, however, was commenced on May 21, 2009, and Ms. Robinson does not state the actual date of physical delivery of the note.

The Court holds, under the circumstances of the present action, that the alleged lack of standing of the plaintiff bank may be considered on a motion to vacate a default in a mortgage foreclosure action. Absent express legislation barring a litigant from proving a meritorious defense in an attempt to vacate a default because of an alleged lack of standing, courts should not engraft such a prohibition on the case law of this State.

The Court grants defendant’s motion for leave to serve a late answer is granted, and the [*5]proposed answer annexed to the motion papers shall be deemed served upon service of a copy of this order bearing the date stamp of the County Clerk, with notice of entry. Plaintiff shall serve a reply or move with respect to the answer, within 30 days of the service of a copy of this order with notice of entry. Defendant Nyarkoha shall file a copy of the answer within 20 days of service of a copy of this order with notice of entry.

The foregoing constitutes the decision, opinion, and order of the Court.

______________________________________

J.S.C.

Dated: February 29, 2012

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

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



Decided on December 7, 2011

Supreme Court, Kings County

 

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

against

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

33920/08

Debra Silber, J.

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

PapersNumbered

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

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

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

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

Other:

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

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

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

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

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

. . . assignment.” Id.

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

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

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

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

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

This shall constitute the Decision and Order of the Court.

Dated: December 7, 2011

E N T E R :

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

Footnotes

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

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US Bank National Association, v. Guillaume, et al. | New Jersey Supreme Court Says Lenders Must Be Named in Foreclosures

US Bank National Association, v. Guillaume, et al. | New Jersey Supreme Court Says Lenders Must Be Named in Foreclosures


Business Week-

New Jersey’s Supreme Court ruled documents indicating a bank’s intention to foreclose on a mortgage must name the lender before a residential property can be seized.

The case involves the foreclosure on an East Orange home owned by Maryse and Emilio Guillaume, who received a notice of intention to foreclose in May 2008. That notice included the name of the mortgage servicer, America’s Servicing Company while omitting the name of the lender. Credit Suisse AG made the loan and assigned it to US Bank National Association.

The state court in Trenton ruled today that the notice sent to the Guillaumes failed to comply with the state’s Fair Foreclosure Act, which requires the name and address of the actual lender, as well as contact information for a loan servicer. Failure to do so creates “potential for significant prejudice” to homeowners, the court said.

[BUSINESS WEEK]

SUPREME COURT OF NEW JERSEY

A-11 September Term 2011
068176

US BANK NATIONAL ASSOCIATION,
AS TRUSTEE FOR CSAB MORTGAGEBACKED
PASS-THROUGH
CERTIFICATES, SERIES 2006-3,
Plaintiff-Respondent,

v.

MARYSE GUILLAUME and EMILIO
GUILLAUME,
Defendants-Appellants,
and
CITY OF EAST ORANGE,
Defendant.

[ipaper docId=83026127 access_key=key-1dy350f9dun9v27dcohr height=600 width=600 /]

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REO PROP CO. vs. JEFFERS | Ohio CT Common Pleas “Servicer mgr testified REO Properties Corp. – a wholly owned sub of a wholly owned sub of Deutsche Bank did not own the note

REO PROP CO. vs. JEFFERS | Ohio CT Common Pleas “Servicer mgr testified REO Properties Corp. – a wholly owned sub of a wholly owned sub of Deutsche Bank did not own the note


IN THE COURT OF COMMON PLEAS
CUYAHOGA COUNTY, OHIO

REO PROPERTIES CORP.,
Plaintiff,

vs.

THOMAS E. JEFFERS, et al,

EXCERPT:

11. Regarding the above letter, Degneau testified on cross-examination:

Q. . . . [H]ave you ever seen these three entities [DB Structured Products,
Inc., Green Tree SerVertis Acquisition LLC and U.S. Bank National
Association, not in its individual capacity, but solely as trustee for
SerVertis REO Pass-Through Trust I] listed as owners [of the note and
mortgage] or having been owners in a succession?

A. Not listed as owners . . . Green Tree services the loan for a group that’s
identified as SerVertis so its kind of an internal. . . classification.

Q. SerVertis is a trust is it not?

A. It’s not necessarily a trust. It’s sort of an investment group. . ..

Q. So that investment group owns the notes and mortgages in [a] pool [of
loans]?

A. In the pool yes. . . . But as far as in this case actually being the owner of
record [given] the status of the account at the time of conversion it was a
business decision not to change the owner of record at the time because
the action has already been started.

Q. [By the magistrate] Is this loan now owned by SerVertis?

A. The owner of record is REO Properties Corp.

Q. I understand the owner of record . . . I want to know who owns it now.. .?

A. Green Tree services the loan for SerVertis who in a pool of loans
purchased [the subject loan]. .. and Green Tree services for them now.
REO Properties is still the record owner.

Q. I understand that. I want to know who is the actual owner and according
to this [letter of November 18, 2009], it’s SerVertis Trust, is that accurate?

A. Well based on this I don’t think I can say yes to that because based on this
it says ‘the transfer of the ownership of your loan will be formally
recorded in the real property records of the county in which your mortgage
was originally recorded’. It was not recorded as SerVertis Pass-Through
Trust.

On redirect examination Degneau testified further:

Q. Can you tell the Court why ownership was not changed from REO
Properties to any other entity? . . .

A. There’s a legal action in place and the decision was made to . . . not
change the owner of record until.. the situation was resolved. It’s my
assumption that after the action . . . there will be a new recording.

Q. At the present time there has been no internal assignment or anything that
has been done to transfer ownership?

A. No, there has been no other internal transfers at all.

12. No other entities other than Ocwen, Green Tree and REO have attempted to
collect this debt from the Jeffers.

[…]

In this case, the note in question is endorsed in blank. Thus, REO would have
been the holder of the note and entitled to enforce the note at the time the case was filed
only if it possessed the note when the case was filed. See R.C. Sec. 1303.21(B); Vitols v.
Citizens Banking Co., 10 F.3d at 1235.

The original note was produced at trial. Off the record, REO’s counsel indicated
that the note came from “the vault”. The location or the owner of the vault was not
disclosed. There is no direct testimony regarding who was in actual possession of the
note either at the time of filing of the case or at the time of trial. Degneau, an employee
of Green Tree, testified that he was familiar with the note and was able to identify it.
Based on this testimony, it is likely that Green Tree possessed the note as servicing agent
on behalf of the party for whom it was servicing. As detailed above, it is more likely than
not that Green Tree was servicing this loan for DB Structured Products, Inc., not REO,
when this case was filed. Therefore, at that time, Green Tree possessed the note as agent
of DB Structured Products, Inc. REO was not in possession of the note when the case
was filed. Consequently, REO has filed to prove it was the “holder” of the note when the
case was filed and was not a party who is entitled to enforce the note as a holder. See Id.;
R.C. Sec.1303.31.

[…]
[ipaper docId=79169914 access_key=key-26i31w67pjtd3an78pt height=600 width=600 /]

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KIMMICK vs U.S. BANK | FL 4DCA Reverses SJ, Atty Fees “Acceleration Letter, Affirmative Defenses, Trial Modification, Waivers”

KIMMICK vs U.S. BANK | FL 4DCA Reverses SJ, Atty Fees “Acceleration Letter, Affirmative Defenses, Trial Modification, Waivers”


BARBARA KIMMICK a/k/a BARBARA WALDON KIMMICK, Appellant,

v.

U.S. BANK NATIONAL ASSOCIATION, as Trustee for the GSAA Home Equity Trust 2007-7 Asset Backed Certificates, Series 2007-7; UNKNOWN TENANT NO. 1; UNKNOWN TENANT NO. 2; and ALL UNKNOWN PARTIES CLAIMING INTERESTS BY, THROUGH, UNDER OR AGAINST A NAMED DEFENDANT TO THIS ACTION, OR HAVING OR CLAIMING TO HAVE ANY RIGHT, TITLE OR INTEREST IN THE PROPERTY HEREIN DESCRIBED, Appellees.

No. 4D10-4158.

District Court of Appeal of Florida, Fourth District. 
January 18, 2012.
Robert P. Bissonnette of Robert P. Bissonette, P.A., Fort Lauderdale, for appellant.Roy A. Diaz and Diana B. Matson of Smith, Hiatt & Diaz, P.A., Fort Lauderdale, for appellee U.S. Bank National Association.HAZOURI, J.

Barbara Kimmick appeals from the granting of U.S. Bank’s amended motion for summary final judgment of foreclosure and attorneys’ fees, which was based upon the affidavit of indebtedness, the mortgage, and the promissory note. Kimmick asserts there were genuine issues of material fact precluding the granting of the summary judgment. We agree and reverse.

Kimmick filed an affidavit in opposition to the motion for summary judgment. She stated that she has resided at the subject property for twenty years and in February of 2009, she lost her job. She continued paying her mortgage from her savings through July of 2009. She then stated:

4. On or about August 6, 2009, I contacted my lender, Bank of America, and explained that I was experiencing financial hardship due to the loss of my job and that I had exhausted my personal savings thereafter in paying the subject note and mortgage from February 2009 to July 2009.

5. I requested assistance from Bank of America in paying my mortgage and, over the phone, Bank of America, by and through its representative, Bethany, calculated a new and reduced mortgage payment in the amount of $506.85 and that I was to start paying the new amount immediately.

6. Bank of America, by and through Bethany, further stated to me that after three (3) month’s payment of the $506.85, they would review my payment history and, if I had consistently met my payment obligations, that they would grant me a permanent mortgage modification at that amount.

7. In reliance on Bank of America’s representations above, I faithfully paid Bank of America the monthly sum of $506.85 for six (6) months from August 2009 through January 2010. A true copy of my Bank of American Payment Overview reflecting and evidencing the foregoing is attached hereto as Exhibit “A”.

8. Importantly, the Bank of America Payment Overview, on its face, clearly states that my six (6) months of reduced mortgage payments was for “mortgage remodification” [emphasis supplied].

9. Thereafter, on January 11, 2010, this foreclosure action was filed against me claiming that I defaulted in the subject mortgage of this action an failing to pay my mortgage payments due commencing September 1, 2009.

10. However, I could not possibly have been in default of the subject mortgage because, as evidenced an Exhibit “A” attached, Bank of America agreed to accept and was accepting monthly mortgage payments from me from August 2009 until January 2010 — when this foreclosure action was unilaterally filed. I have also paid for insurance and real estate taxes on the subject property.

11. Accordingly, Plaintiff is equitably stopped from maintaining this action not only an accepting monthly mortgage payments from me but also by bootstrapping and manufacturing the alleged basis for my mortgage default herein. Thus, Plaintiff has filed the instant action in bad faith without any investigation prior thereto.

Exhibit A is a printout from Kimmick’s online bank account showing the six payments to Bank of America Home Loans from her account.

U.S. Bank filed an affidavit of the assistant secretary of BAC Home Loans Servicing in which he states that the records show that the September 1, 2009, payment was not made. It further states:

7. There has been no payment after the date of October 16, 2009. The borrower has not qualified for a loan modification under the HAMP guidelines and the borrower is not paying on a loan modification currently.

At the summary judgment hearing, Kimmick’s counsel presented the facts from her affidavit to the court. He asserted equitable estoppel. He also argued that where an affirmative defense is pleaded, and the plaintiff does not negate it, the plaintiff is not entitled to summary judgment.

In response to Kimmick’s affidavit U.S. Bank referred the court to the pre-acceleration letter sent to the borrower in September and October which counsel stated they said: “The default will not be considered cured unless BAC Home Loan Servicing, LP receives good funds in the amount of $3,153.77 on or before November 18, 2009. BAC Home Loan Servicing, LP reserves the right to accept or reject a partial payment of the total amount due without waiving any of its rights herein or otherwise. For example, if less than the full amount that is due is sent to us, we can keep the payment and apply it to the debt but still proceed to the foreclosure since the default would not have been cured.” Kimmick’s counsel did not deny that Kimmick received the letter but that they had told her to pay a reduced amount and which the bank accepted. U.S. Bank acknowledged that it received five of six of Kimmick’s payments.

The trial court entered its Summary Final Judgment of Foreclosure which did not address any of Kimmick’s affirmative defenses.

“Summary judgment is proper if there is no genuine issue of material fact and if the moving party is entitled to a judgment as a matter of law.” Volusia Cnty. v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000). The “party moving for summary judgment must factually refute or disprove the affirmative defenses raised, or establish that the defenses are insufficient as a matter of law.” Leal v. Deutsche Bank Nat’l Trust Co., 21 So. 3d 907, 909 (Fla. 3d DCA 2009) (citing Kendall Coffey, Foreclosures in Florida 493 (2008) (citing Stop & Shoppe Mart, Inc. v. Mehdi, 854 So. 2d 784 (Fla. 5th DCA 2003); Manassas Inv., Inc. v. O’Hanrahan, 817 So. 2d 1080 (Fla 2d DCA 2002))). See also Knight Energy Servs., Inc. v. Amoco Oil Co., 660 So. 2d 786, 788 (Fla. 4th DCA 1995) (“Before a plaintiff is entitled to a summary judgment of foreclosure, the plaintiff must either factually refute the alleged affirmative defenses or establish that they are legally insufficient to defeat summary judgment.”).

Kimmick argues that U.S. Bank waived its right to foreclose based upon the representations made to her by the agent she spoke to at Bank of America. The affirmative defense was stated as follows:

24. For her Twelfth Affirmative Defense, KIMMICK states that Plaintiff has waived its rights to foreclosure by the actions of Plaintiff’s agent and loan servicer for the subject mortgage, to-wit: Bank of America, agreeing to and actually accepting reduced mortgage payments from KIMMICK for at least six consecutive months.

In Destin Savings Bank v. Summerhouse of FWB, Inc., 579 So. 2d 232 (Fla. 1st DCA 1991), the court set forth the following principles:

Waiver is defined as an intentional relinquishment or abandonment of a known right or privilege, or conduct that warrants an inference of the intentional relinquishment of a known right. In order to establish a valid waiver, the following elements must be satisfied: (1) the existence at the time of the waiver of a right, privilege, advantage, or benefit that may be waived; (2) the actual or constructive knowledge thereof; and (3) an intention to relinquish that right, privilege, advantage or benefit.

Id. at 235 (citations omitted). In Barnes v. Resolution Trust Corp., 664 So. 2d 1171 (Fla. 4th DCA 1996), this court held:

An acceleration clause in a mortgage confers upon the mortgagee a contract right of constitutional dimensions. Courts are obligated to protect the validity of such contracts and may impair the mortgagee’s right to foreclose only in limited situations. Specifically, courts will bar acceleration and foreclosure as follows:

Foreclosure on an accelerated basis may be denied when the right to accelerate has been waived or the mortgagee estopped to assert it, because of conduct of the mortgagee from which the mortgagor (or owner holding subject to a mortgage) reasonably could assume that the mortgagee, for or upon a certain default, would not elect to declare the full mortgage indebtedness to be due and payable or foreclose therefore; or where the mortgagee failed to perform some duty upon which the exercise of his right to accelerate was conditioned; or where the mortgagor tenders payment of defaulted items, after the default but before notice of the mortgagee’s election to accelerate has been given (by actual notice or by filing suit to foreclose for the full amount of the mortgage indebtedness) or where there was intent to make timely payment, and it was attempted, or steps taken to accomplish it, but nevertheless the payment was not made due to a misunderstanding or excusable neglect, coupled with some conduct of the mortgagee which in a measure contributed to the failure to pay when due or within the grace period.

Id. at 1172-73 (citations omitted) (emphasis supplied).

Kimmick also asserts that U.S. Bank waived acceleration when its agent told Kimmick that she could make the lower payments for several months, possibly get a modification, and then U.S. Bank would not proceed with an acceleration.

U.S. Bank asserts that this court can affirm the judgment with respect to the affirmative defense of waiver for a different reason. In both the note and the mortgage, there is the same provision which states:

Borrower not released; Forbearance an Lender Not a Waiver. Extension of the time for payment or modification of amortization of the sums secured an this Security Instrument granted by Lender to Borrower or any Successor in Interest of Borrower shall not operate to release the liability of Borrower or any Successors in Interest of Borrower. Lender shall not be required to commence proceedings against any Successor in Interest of Borrower or to refuse to extend time for payment or otherwise modify amortization of the sums secured an this Security Instrument by reason of any demand made by the original Borrower or any Successors in Interest of Borrower. Any forbearance by Lender in exercising any right or remedy including, without limitation, Lender’s acceptance of payments from third persons, entities or Successors in Interest of Borrower or in amounts less than the amount then due, shall not be a waiver of or preclude the exercise of any right or remedy.

U.S. Bank argues that this “No Waiver” provision allows it to accept prior late or reduced payments without losing its right to enforce its rights and remedies. Kimmick, however, is asserting that U.S. Bank waived this provision by representing to her that she could make reduced payments, which were timely, and meet the requirements for a permanent mortgage modification.

Therefore, there remain genuine issues of material fact as to the issues raised by the affirmative defense of the loan modification. We reverse and remand for further proceedings consistent with this opinion.

Reversed and remanded.

MAY, C.J., and DAMOORGIAN, J., concur.

Not final until disposition of timely filed motion for rehearing.

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

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


SUPREME COURT – STATE OF NEW YORK

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

-against-

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

EXCERPTS:

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

[…]

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

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

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

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

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

[…]

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

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Institutional Bondholders Issue Instructions to Two Trustees to Open Investigations of Ineligible Mortgages in Over $19 Billion of Wells Fargo-Issued RMBS

Institutional Bondholders Issue Instructions to Two Trustees to Open Investigations of Ineligible Mortgages in Over $19 Billion of Wells Fargo-Issued RMBS


HOUSTON, Jan. 5, 2012 /PRNewswire/ — Gibbs & Bruns LLP announced today that its clients have issued instructions to US Bank and HSBC, as Trustees, to open investigations of ineligible mortgages in pools securing over $19 billion of Residential Mortgage Backed Securities (RMBS) issued by various affiliates of Wells Fargo.  Collectively, Gibbs & Bruns’ clients hold over 25% of the Voting Rights in 48 Trusts that issued these RMBS. 

“Our clients continue to seek a comprehensive solution to the problems of ineligible mortgages in RMBS pools and deficient servicing of those loans.  Today’s action is another step toward achieving that goal,” said Kathy D. Patrick of Gibbs & Bruns LLP, lead counsel for the Holders.     

The Holders anticipate that they may provide additional instructions to Trustees, as needed, to further the investigations.  The securities that are the subject of these instruction letters include: 

 

 

 

 

 

 

 

WFALT 2005-1

 

WFMBS 2005-9

 

WFMBS 2006-19

 

WFMBS 2007-13

WFALT 2007-PA2

 

WFMBS 2005-AR11

 

WFMBS 2006-20

 

WFMBS 2007-8

WFALT 2007-PA3

 

WFMBS 2005-AR12

 

WFMBS 2006-6

 

WFMBS 2007-9

WFALT 2007-PA4

 

WFMBS 2005-AR14

 

WFMBS 2006-7

 

WFMBS 2007-AR3

WFALT 2007-PA6

 

WFMBS 2005-AR16

 

WFMBS 2006-8

 

WFMBS 2007-AR8

WFHET 2005-3

 

WFMBS 2005-AR3

 

WFMBS 2006-AR10

 

WMLT 2005-A

WFHET 2006-3

 

WFMBS 2005-AR5

 

WFMBS 2006-AR13

 

WMLT 2005-B

WFHET 2007-1

 

WFMBS 2005-AR8

 

WFMBS 2006-AR14

 

WMLT 2006-A

WFMBS 2005-12

 

WFMBS 2005-AR9

 

WFMBS 2006-AR18

 

WMLT 2006-ALT1

WFMBS 2005-17

 

WFMBS 2006-11

 

WFMBS 2006-AR2

 

 

WFMBS 2005-18

 

WFMBS 2006-13

 

WFMBS 2006-AR4

 

 

WFMBS 2005-3

 

WFMBS 2006-14

 

WFMBS 2006-AR8

 

 

WFMBS 2005-4

 

WFMBS 2006-17

 

WFMBS 2007-10

 

 

ABOUT GIBBS & BRUNS LLP
Gibbs & Bruns is a leading boutique law firm engaging in high-stakes business and commercial litigation.  The firm is renowned for its representation of both plaintiffs and defendants in complex matters, including significant securities and institutional investor litigation, director and officer liability, contract disputes, fraud and fiduciary claims, energy, oil and gas litigation, construction litigation, insurance litigation, trust & estate litigation, antitrust litigation, legal and professional malpractice, and partnership disputes. Gibbs & Bruns is routinely recognized as a top commercial litigation firm in the US.  For more information, visit www.gibbsbruns.com.

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Davis v. U.S. Bank – Nevada Supreme Court to determine the legality of MERS foreclosures. Oral Argument: 01/04/2012 at 10:00 AM

Davis v. U.S. Bank – Nevada Supreme Court to determine the legality of MERS foreclosures. Oral Argument: 01/04/2012 at 10:00 AM


Docket: Read from top to Bottom

ANDREW DAVIS AND LAURETTA DAVIS,
Appellants,

VS.

US BANK, NATIONAL ASSOCIATION AS
TRUSTEE,
Respondent.

06/29/2010 Notice of Appeal Documents – Certified Copy of Notice of Appeal/Settlement Filed Certified Copy of Notice of Appeal/Settlement. Notice Re Settlement Conference Program and Suspension of Rules mailed to all counsel. (The requesting of transcripts and briefing are stayed pursuant to NRAP 16(a)(1). Docketing Statement Form mailed to counsel for appellant(s).) 10-16890
06/29/2010 Filing Fee – Filing Fee due Filing Fee due. Filing fee will be fowarded by the District Court.
06/30/2010 Filing Fee – Filing Fee Paid with Efiling Received Filing Fee Paid on Filing. $250.00 from Mark Mausert, Esq. Check No. 1311.
07/02/2010 Notice/Outgoing – Notice to File Documents Issued Notice to File Documents. It has been determined that this appeal willl not be scheduled for settlement conference. Transcript request form due: 15 days. Opening Brief due: 120 days. 10-17323
07/19/2010 Docketing Statement – Docketing Statement Filed Docketing Statement. 10-18354
07/30/2010 Transcript – Notice from Court Reporter Filed Notice from Court Reporter. Stephanie Koetting stating that the requested transcripts were delivered. Dates of transcripts: 06/08/10. 10-19737
08/03/2010 Notice/Outgoing – Notice to Request Transcripts Issued Notice to Request Transcripts. 10-19978
08/04/2010 Transcript Request – Request for Transcript of Proceedings Filed Request for Transcript of Proceedings. Transcripts requested: 06/08/10. To Court Reporter: Stephanie Koetting. 10-20088
10/26/2010 Brief – Opening Brief Filed Opening Brief. 10-28063
10/26/2010 Appendix – Appendix to Opening Brief Filed Appendix to Opening Brief. 10-28065
12/06/2010 Order/Procedural – Order Denying Motion Filed Order Denying Motion to Consolidate Appeals and Granting Motion to Enlarge time to File Opening Brief and Appendix in Docket No. 56138. Opening brief and appendix in docket no. 56138 due 14 days. Nos. 56306/56138. 10-31650
12/14/2010 Notice/Outgoing – Notice to File Answering Brief Issued Notice to File Answering Brief. Due Date: 15 days. 10-32638
12/23/2010 Brief – Answering Brief Filed Answering Brief. 10-33603
01/21/2011 Brief – Reply Brief Filed Reply Brief. 11-02154
01/21/2011 Appendix – Appendix to Reply Brief Filed Appendix to Reply Brief. 11-02158
02/28/2011 Notice/Incoming – Substitution of Attorneys Filed Substitution of Attorneys. Kravitz, Schnitzer, Sloane & Johnson, Chtd. substituted in place and stead of McCarthy & Holthus as counsel for respondent Litton Loan Servicing, LP. 11-06065
03/18/2011 Motion – Motion Filed Motion to Dismiss or in the alternative, Motion to File Supplemental Brief. 11-08471
05/11/2011 Order/Procedural – Order Filed Order Dismissing Respondent Litton Loan Servicing, LP. We direct the clerk of this court to remove Litton Loan Servicing, LP from the caption in this appeal. 11-13932
06/28/2011 Order/Procedural – Order Filed Order Directing Filing of Appendix and Clarification of Counsel. Law Firm McCarthy & Holthus: 15 days to file and serve appendix. Law Firm McCarthy & Holthus and Law Firm Kravitz, Schnitzer, Sloane & Johnson: 15 days to file a response to this order, stating whether they represent US Bank, and if not, identifying US Bank’s new counsel. 11-19225
07/12/2011 Appendix – Appendix Filed Respondents Appendix. (Submitted by McCarthy & Holthus). 11-20723
07/19/2011 Motion – Response to Order Filed Response to Order for Clarification for Counsel. 11-21668
12/09/2011 Notice/Outgoing – Notice Scheduling Oral Argument Issued Notice Scheduling Oral Argument. Oral argument is scheduled or January 4, 2012, at 10:00 a.m. in Carson City for 30 minutes before the En Banc Panel. 11-37593
12/22/2011 Notice/Outgoing – Oral Argument Reminder Notice Issued Oral Argument Reminder Notice. 11-39424

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Stand Up for The Bayless Family | America’s Servicing Company, Anita Antonelli, SASCO Trust 2005-RF4, U.S. Bank, Wells Fargo

Stand Up for The Bayless Family | America’s Servicing Company, Anita Antonelli, SASCO Trust 2005-RF4, U.S. Bank, Wells Fargo


Bank Fraud

America’s Servicing Company
Anita Antonelli
SASCO Trust 2005-RF4
U.S. Bank, N.A.
Wells Fargo Bank, N.A.

Action Date: January 3, 2012
Location: Delaware, OH

The Closing Date for SASCO Trust 2005-RF4 is August 31, 2005.

All of the mortgages in the SASCO 2005-RF4 Trust were required to have been deposited in that trust by August 31, 2005.

This is particularly significant right now because SASCO 2005-RF4 is the trust that is claiming to own the Bayless Family Mortgage in Delaware, Ohio, and trying to remove the Bayless family from their home this week.

SASCO is trust shorthand for Structured Asset Securities Corporation.

In almost every case, SASCO trusts CANNOT PRODUCE THE MORTGAGE ASSIGNMENTS required by the trust documents.

In almost every foreclosure case filed by U.S. Bank as Trustee for a SASCO trust, the mortgage assignment is dated several YEARS after the trust was supposed to have acquired the mortgage.

What mortgage document mill consistently supplies these “years late” Assignments? Consistently, that is America’s Servicing Company (ASC) in Ft. Mill, SC, a subsidiary of Wells Fargo Bank.

Who are the signers of these “years late” Assignments? Anita Antonelli, China Brown, Natasha Clark, Nikli Cureton and Herman John Kennerty – the five most prolific robo-signers at ASC -have signed hundreds of these Assignments.

If the trust is a SASCO trust – STRIKE ONE;

If the Assignment is dated years after the trust closing date – STRIKE TWO; and

If the Assignment is signed by Antonelli, Brown, Clark, Cureton or Kennerty and notarized in York County, SC – STRIKE THREE.

Throw the bank out – not the Bayless Family.

As for Anita Antonelli, who signed the Mortgage Assignment in the Bayless case:

Many times Anita Antonelli is the Vice President of Loan Documentation for Wells Fargo Bank.

But then she is also often the Default Documents Manager for Wells Fargo Bank.

At the same time, Antonelli is often an Assistant Secretary of Mortgage Electronic Registration Systems, Inc.

She is also an Assistant Secretary for Mortgage Electronic Registration Systems, Inc. acting as a Nominee for American Home Mortgage…

…and acting as a Nominee for Hilton Head Mortgage, LLC…

…and acting as a Nominee for DHI Mortgage Co., Ltd….

…and acting as a Nominee for Myers Park Mortgage, Inc…

…and acting as a Nominee for CTX Mortgage Co., LLC…

…and acting as a Nominee for Market Street Mortgage Corp…

…and acting as a Nominee for Loan City…

…and acting as a Nominee for Mortgage Network, Inc.

With this history, why would anyone trust the validity of a mortgage assignment signed by Anita Antonelli – and particularly, why would anyone rely on such a document when produced by a SASCO trust?

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I-Team: Nevada Supreme Court MERS Case Could Impact Homeowners

I-Team: Nevada Supreme Court MERS Case Could Impact Homeowners


This isn’t rocket science… The Banks created this unreliable system, destroyed land records, screwed the courts, screwed the counties of fees and fabricated documents that were all pre-dated in order to make them appear legit. All the Supreme Court needs to do is read Max Gardner’s Top Tips for Fake Mortgage Documents or read to spot the crime.

These are a few other interesting Nevada cases:

REDMON v. HOMEQ SERVICING INC. | Nevada Supreme Court Vacating Judgment & Remanding “Mediation, Sanctions, In RE PASILLAS”

Nevada Supreme Court Reversed & Remand – “Mediation, Sanctions, MERS Failed To Produce the Deed of Trust & Any Assignments” | HEREDIA-BONNET v. LOANSTAR

LEYVA v. National Default Servicing Corp. | Nevada Supreme Court Remand and Reverse “Defective ASMT, U.C.C Article 3, No Endorsement, In Re Pasillas, Wells Fargo, MortgageIt”

PASILLAS v. HSBC Bank USA | Nevada Supreme Court Reverse “Sanctionable offenses under the Foreclosure Mediation Program, IBANEZ, AHMSI, Alleged Assignment”

8NEWS NOW-

A case before the Nevada State Supreme Court next week could have far-reaching impact on Nevadans struggling to stay in their homes. Among the issues before the justices is what proof lenders must provide to show they own the property they seek to foreclose.

[8NEWS NOW]

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U.S. Bank N.A. v Mollah | NYSC Denies Wells Fargo s/h/a Mortgage Electronic Registration Systems, Inc. As Nominee and Mortgagee of Records Summary Judgment

U.S. Bank N.A. v Mollah | NYSC Denies Wells Fargo s/h/a Mortgage Electronic Registration Systems, Inc. As Nominee and Mortgagee of Records Summary Judgment


NEW YORK SUPREME COURT – QUEENS COUNTY

U.S. BANK N.A.,
Plaintiff,

-against-

MOHAMMED MOLLAH, et al.,
Defendants.

Excerpt:
Defendant, Wells Fargo Home Mortgage s/h/a Mortgage Electronic Registration Systems, Inc. As Nominee and Mortgagee of Record’s motion for an order pursuant to RPAPL 1521 granting summary judgment on its twenty-second affirmative defense that said defendant’s lien is superior to plaintiffs by virtue of the fact that said defendant’s lien is recorded prior to plaintiffs is hereby denied.

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NYSC Judge Schack Slams Foreclosure Firm Rosicki, Rosicki & Associates, P.C. “Conflicted Robosigner Kim Stewart”

NYSC Judge Schack Slams Foreclosure Firm Rosicki, Rosicki & Associates, P.C. “Conflicted Robosigner Kim Stewart”


Decided on December 12, 2011

Supreme Court, Kings County

U.S. Bank, N.A., Plaintiff,

against

Wayne Ramjit et al., Defendants.

17027/08 Plaintiff Rosicki Rosicki and Associates

Batavia NY

Arthur M. Schack, J.

In this foreclosure action, plaintiff, U.S. BANK N.A. (U.S. BANK), moved for an order of reference and related relief for the premises located at 1485 Sutter Avenue, Brooklyn, New York (Block 4259, Lot 22, County of Kings). For the Court to consider the motion for an order of reference, I ordered plaintiff’s counsel, Rosicki, Rosicki & Associates, P.C., on July 29, 2011, to comply with the October 20, 2010 Administrative Order of then Chief Administrative Judge Ann T. Pfau, as revised on March 2, 2011, and concluded that:

Accordingly, it is

ORDERED, that plaintiff U.S. BANK N. A.’s motion for an

order of reference and related relief for the premises located at 1485

Sutter Avenue, Brooklyn, New York (Block 4259, Lot 22, County of

Kings) and the instant foreclosure action will be dismissed with

prejudice, unless, within sixty (60) days from this decision and order,

counsel for plaintiff, U.S. BANK N.A., complies with the new Rule,

promulgated by the Chief Administrative Judge Ann T. Pfau on

October 20, 2010, as revised on March 2, 2011, by submitting an

affirmation, to my Chambers (not the Foreclosure Department), [*2]

360 Adams Street, Room 478, Brooklyn, NY 11201, using the new

standard Court form, pursuant to CPLR Rule 2106 and under the

penalties of perjury, that counsel for plaintiff, U.S. BANK N.A., has

“based upon my communications [with named representative or

representatives of plaintiff], as well as upon my own inspection and

reasonable inquiry under the circumstances . . . that to the best of

my knowledge, information and belief, the Summons, Complaint and

other papers filed or submitted to the Court in this matter contain no

false statements of fact or law”, and is “aware of my obligations under

New York Rules of Professional Conduct (22 NYCRR Part 1200) and

22 NYCRR Part 130.”

On September 23, 2011, plaintiff’s counsel, Rosicki, Rosicki & Associates, P.C., filed with the Court the instant motion, requesting an extension of thirty (30) days, up to and including October 26, 2011, to submit the required attorney’s affirmation.

According to ¶ 15 of the affirmation in support of the motion, by Timothy Menasco, Esq., of Rosicki, Rosicki & Associates, P.C., “plaintiff and plaintiff’s counsel has been actively reviewing the file in order to properly abide by said Administrative Order creating the delay in submission of the affirmation.” Mr. Menasco then states, in ¶ 16 of his affirmation, “[i]t is unduly harsh and inappropriate to dismiss this action, on the basis of a delay in submitting an affirmation to the court.”

Plaintiff’s counsel, Rosicki, Rosicki & Associates, P.C., continued, for reasons unknown and not satisfactorily explained to the Court, to not comply with the Administrative Order of the Chief Administrative Judge and my July 28, 2011 order. I have not received the affirmation from plaintiff’s counsel, as ordered by the Chief Administrative Judge’s Administrative Order and my previous order.

Today, plaintiff U.S. BANK’S instant motion to extend the time to file the required attorney’s affirmation, appeared on my motion calendar. It is one hundred thirty-seven (137) days since I issued my July 28, 2011 order and four hundred eighteen (418) days since the Chief Administrative Judge issued her Administrative Order. Therefore, for violation of these orders, the instant foreclosure action is dismissed with prejudice and the notice of pendency is cancelled and discharged.

Discussion

The Office of Court Administration issued a press release on October 20, 2010 explaining the reasons for the Administrative Ordered issued that day by Chief Administrative Judge Pfau. It stated:

The New York State court system has instituted a new filing

requirement in residential foreclosure cases to protect the integrity

of the foreclosure process and prevent wrongful foreclosures. Chief

Judge Jonathan Lippman today announced that plaintiff’s counsel in

foreclosure actions will be required to file an affirmation certifying

that counsel has taken reasonable steps — including inquiry to banks

and lenders and careful review of the papers filed in the case — to

verify the accuracy of documents filed in support of residential [*3]

foreclosures. The new filing requirement was introduced by the

Chief Judge in response to recent disclosures by major mortgage

lenders of significant insufficiencies — including widespread deficiencies

in notarization and “robosigning” of supporting documents — in

residential foreclosure filings in courts nationwide. The new requirement

is effective immediately and was created with the approval of the

Presiding Justices of all four Judicial Departments.

Chief Judge Lippman said, “We cannot allow the courts in

New York State to stand by idly and be party to what we now know

is a deeply flawed process, especially when that process involves

basic human needs — such as a family home — during this period of

economic crisis. This new filing requirement will play a vital role in

ensuring that the documents judges rely on will be thoroughly examined,

accurate, and error-free before any judge is asked to take the drastic step

of foreclosure.” [Emphasis added]

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

The failure of plaintiff’s counsel, Rosicki, Rosicki & Associates, P.C., to comply with two court orders, my July 28, 2011 and Chief Administrative Judge Pfau’s October 20, 2010 order, as revised on March 2, 2011, demonstrates delinquent conduct by Rosicki, Rosicki & Associates, P.C. This mandates the dismissal with prejudice of the instant action. Failure to comply with court-ordered time frames must be taken seriously. It cannot be ignored. There are consequences for ignoring court orders. Recently, on December 16, 2010, the Court of Appeals, in Gibbs v St. Barnabas Hosp., 16 NY3d 74, 81 [2010], instructed:

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 [*4]

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).

Despite Mr. Menasco’s assertion, it is not unduly harsh and inappropriate to

dismiss the instant action because of the delay by plaintiff’s counsel, Rosicki, Rosicki & Associates, P.C. to submit the required affirmation. “Litigation cannot be conducted efficiently if deadlines are not taken seriously, and we make clear again, as we have several times before, that disregard 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). The Court cannot wait for plaintiff’s counsel, Rosicki, Rosicki & Associates, P.C., to take its time in complying with court mandates.

Moreover, even if plaintiff U.S. BANK’s counsel complied in a timely manner

with my July 28, 2011 order and the order of the Chief Administrative Judge, plaintiff U.S. BANK would have to address its use, in the instant action, of conflicted robosigner Kim Stewart. The instant mortgage and note, were executed on October 11, 2007 and recorded on December 10, 2007, by MORTGAGE ELECTRONIC REGISTRATIONS SYSTEM, INC. (MERS), “acting solely as a nominee for Lender [U.S. BANK]” and “FOR PURPOSES OF RECORDING THIS MORTGAGE, MERS IS THE MORTGAGEE OF RECORD,” in the Office of the City Register of the City of New York, at City Register File Number (CRFN) 2007000605594. Then on May 23, 2008, MERS assigned the instant mortgage and note back to U.S. BANK. This was recorded on July 24, 2008. in the Office of the City Register of the City of New York, at CRFN 2008000294495.

The assignment was executed for MERS, in Owensboro, Kentucky, by Kim Stewart, Assistant Secretary of MERS, as assignor. The very same Kim Stewart, as Assistant Vice President of assignee U.S. BANK, on April 13, 2009, also in Owensboro, Kentucky, executed the affidavit of merit for an order of reference in the instant action.She signed the affidavit of merit as Assistant Vice President of plaintiff U.S. BANK. However, in ¶ 1 of her affidavit of merit, Ms. Stewart alleges to “a Vice President of U.S. BANK, N.A., the plaintiff.”

Perhaps, plaintiff U.S. BANK and its counsel, Rosicki, Rosicki & Associates, P.C., do not want the Court to confront the conflicted Ms. Stewart? This would certainly contradict the disingenuous opening statement by Richard K. Davis, Chairman, President and Chief Executive [*5]Officer of U.S. BANCORP, (U.S. BANK’s parent corporation), in his cover letter to the 2010 Annual Report of U.S. BANCORP, sent to U.S BANCORP’s shareholders. Mr. Davis stated that “[t]hroughout its history, U.S. Bancorp has operated with a tradition of uncompromising honesty and integrity.”

Further, the dismissal of the instant foreclosure action requires the cancellation of the notice of pendency. CPLR § 6501 provides that the filing of a notice of pendency against a property is to give constructive notice to any purchaser of real property or encumbrancer against real property of an action that “would affect the title to, or the possession, use or enjoyment of real property, except in a summary proceeding brought to recover the possession of real property.” The Court of Appeals, in 5308 Realty Corp. v O & Y Equity Corp. (64 NY2d 313, 319 [1984]), commented that “[t]he purpose of the doctrine was to assure that a court retained its ability to effect justice by preserving its power over the property, regardless of whether a purchaser had any notice of the pending suit,” and, at 320, that “the statutory scheme permits a party to effectively retard the alienability of real property without any prior judicial review.”

CPLR § 6514 (a) provides for the mandatory cancellation of a notice of pendency by:

The Court,upon motion of any person aggrieved and upon such

notice as it may require, shall direct any county clerk to cancel

a notice of pendency, if service of a summons has not been completed

within the time limited by section 6512; or if the action has been

settled, discontinued or abated; or if the time to appeal from a final

judgment against the plaintiff has expired; or if enforcement of a

final judgment against the plaintiff has not been stayed pursuant

to section 551. [emphasis added]

The plain meaning of the word “abated,” as used in CPLR § 6514 (a) is the ending of an action. “Abatement” is defined as “the act of eliminating or nullifying.” (Black’s Law Dictionary 3 [7th ed 1999]). “An action which has been abated is dead, and any further enforcement of the cause of action requires the bringing of a new action, provided that a cause of action remains (2A Carmody-Wait 2d § 11.1).” (Nastasi v Nastasi, 26 AD3d 32, 40 [2d Dept 2005]). Further, Nastasi at 36, held that the “[c]ancellation of a notice of pendency can be granted in the exercise of the inherent power of the court where its filing fails to comply with CPLR § 6501 (see 5303 Realty Corp. v O & Y Equity Corp., supra at 320-321; Rose v Montt Assets, 250 AD2d 451, 451-452 [1d Dept 1998]; Siegel, NY Prac § 336 [4th ed]).” Thus, the dismissal of the instant complaint must result in the mandatory cancellation of plaintiff U.S. BANK’s notice of pendency against the subject property “in the exercise of the inherent power of the court.”

Conclusion

Accordingly, it is

ORDERED, that the instant action, Index Number 17027/08, is dismissed with

prejudice; and it is further

ORDERED that the Notice of Pendency in this action, filed with the Kings

County Clerk on June 16, 2008, by plaintiff, U.S. BANK, N.A., to foreclose on a mortgage for real property located at 1485 Sutter Avenue, Brooklyn, New York (Block 4259, Lot 22, County [*6]of Kings), is cancelled and discharged.

This constitutes the Decision and Order of the Court.

ENTER

________________________________HON. ARTHUR M. SCHACK

J. S. C.

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

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



Decided on December 7, 2011

Supreme Court, Kings County

 

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

against

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

33920/08

Debra Silber, J.

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

PapersNumbered

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

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

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

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

Other:

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

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

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

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

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

. . . assignment.” Id.

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

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

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

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

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

This shall constitute the Decision and Order of the Court.

Dated: December 7, 2011

E N T E R :

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

Footnotes

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

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In RE: BASS | North Carolina Appeals Court Affirms U.S. Bank c/o Wells Fargo ‘Judy Faber’s Invalid Stamp Indorsement, Not the legal holder of a promissory note’

In RE: BASS | North Carolina Appeals Court Affirms U.S. Bank c/o Wells Fargo ‘Judy Faber’s Invalid Stamp Indorsement, Not the legal holder of a promissory note’


NORTH CAROLINA COURT OF APPEALS

In the Matter of the foreclosure
of a Deed of Trust executed by
Tonya R. Bass in the original
amount of $139,988.00 dated
October 12, 2005, recorded in Book
4982, Page 86, Durham County
Registry,

Substitute Trustee Services, Inc.,
as Substitute Trustee,

Appeal by Petitioner from order entered 14 September 2010
by Judge Abraham Penn Jones in Durham County Superior Court.
Heard in the Court of Appeals 27 October 2011.

K&L Gates, LLP, by A. Lee Hogewood, III and Brian C. Fork,
for Petitioner-appellant.

Legal Aid of North Carolina, Inc., by E. Maccene Brown,
Gregory E. Pawlowski, John Christopher Lloyd, and Andre C.
Brown, for Respondent-appellee.

HUNTER, JR., Robert N., Judge.

U.S. Bank, National Association, as Trustee, c/o Wells
Fargo Bank, N.A. (“Petitioner”) appeals the trial court’s order
dismissing foreclosure proceedings against Respondent Tonya R.
Bass. Petitioner assigns error to the trial court’s
determination that Petitioner is not the legal holder of a
promissory note executed by Respondent and therefore lacks
authorization to foreclose on Respondent’s property securing the
note under a deed of trust. After careful review, we affirm.

Excerpt:

Furthermore, Comment 1 to North Carolina General Statutes
§ 25-3-308 defines “presumed” to mean “that until some evidence
is introduced which would support a finding that the signature
is forged or unauthorized, the plaintiff is not required to
prove that it is valid.” Id. In contrast to the stamp at
issue, a handwritten signature accompanies each of the other
stamps on the Note introduced by Petitioner before the trial
court. The stamp purporting to transfer the Note from
Residential to Petitioner, for example, bears the apparent
handwritten signature of Judy Faber, identified as Residential’s
vice president. This signature provides at least some evidence
that this stamp was executed with the requisite intent and
authority. Whether a stamp bearing an apparent handwritten
signature is sufficient competent evidence of the purported
indorsement, however, is not before this Court as Respondent
challenges the only stamp without a handwritten signature. The
omission of a handwritten signature with respect to the
challenged stamp is competent evidence from which the trial
court could conclude that this particular stamp was not executed
by an authorized individual and is therefore facially invalid
indorsement. Thus, even if Respondent had failed to object to
the stamp, which it did not, the burden properly remained upon
Petitioner to prove its validity.

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MUST READ:

FULL_DEPOSITION_OF_GMAC_JUDY_FABER

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Future of foreclosures in N.J. hinges on state Supreme Court decision | US Bank N.A. v. Guillaume

Future of foreclosures in N.J. hinges on state Supreme Court decision | US Bank N.A. v. Guillaume


I disagree with the judge’s motion words below and see video below as to why even attorney’s have a difficult time.

“I have a lot of problems with saying that all that’s going, with all this evidence of [c]ourt process for over a year, to just rely on trying to negotiate something with the bank was like sticking your head in the sand.

This wasn’t going to go away and they
didn’t get any assurance from the bank that
they were succeeding in their negotiation
efforts or that an answer to the complaint
was not required. I mean they just focused
on one path. And they ignored the
negotiation path and they ignored the
litigation side of things. You can’t do
that.

And I have to say that . . . Mrs.
Guillaume was being so aggressive and so
persistent in trying to negotiate and going
to all these different places to get help,
but the one place she wasn’t going was a
member of the bar, a lawyer which is usually
what you do when you get [c]ourt papers.

Or if you absolutely can’t afford a
lawyer and that’s the case of many
foreclosures, a very heavy self-represented
area of the law to at least contact the
[c]ourt yourself and you send in some
rudimentary answer. And it doesn’t have to
be fancy. I mean you write a letter to the
foreclosure unit, they’ll stamp contested on
it.

Because I’ve seen so many of them long
hand. But nothing was done. And I don’t
regard that as excusable neglect. So that
prong is lacking.”  

(emphasis added).

Simply wrong, one does NOT understand how frustrating it is to even try to get anyone from the “bank” on the phone, attempting a modification as we have read time and time again were nothing but DISASTROUS and GOING ABSOLUTELY NO PLACE!

[Please watch Michigan Atty Vanessa Fluker and you’ll understand why].

Lets not forget, this reversal that goes to the heart of this from out of New Jersey: BANK OF NEW YORK vs. LAKS | NJ Appeals Court Reversal “A notice of intention is deficient…if it does not provide the name and address of the lender”

NJ.COM-

In the nearly five months since the state Supreme Court effectively allowed six of the country’s biggest banks to begin filing foreclosures again, attorneys and court officials have been expecting a flood of new filings to hit the courts.

Except it hasn’t happened. Foreclosure filings are down 83 percent as of October this year, compared with the same time period last year, according to court figures, and there are at least 100,000 cases either pending in the system or waiting to be submitted.

Attorneys involved in the work in New Jersey point to at least one reason for the significant delay: a court case that has reached the state Supreme Court, with oral arguments on Wednesday.

The case, US Bank National Association v. Guillaume, is important because the court …

[NJ.COM]

[ipaper docId=74692087 access_key=key-1xrvd0kemha1r7mycu2h height=600 width=600 /]

 

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



Posted in STOP FORECLOSURE FRAUDComments (3)

Phillips vs. U.S. Bank | JUDGE DENNIS BLACKMON NAILS US BANK IN GEORGIA ON HAMP, WRONGFUL FORECLOSURE AND EMOTIONAL DISTRESS DAMAGES

Phillips vs. U.S. Bank | JUDGE DENNIS BLACKMON NAILS US BANK IN GEORGIA ON HAMP, WRONGFUL FORECLOSURE AND EMOTIONAL DISTRESS DAMAGES


H/T Living Lies For This Superb Find

“Sometimes, only courts of law stand to protect the taxpayer. Somewhere, someone has to stand up. Well, sometimes is now, and the place is the Great State of Georgia. The Defendant’s Motion is hereby Denied”

“The United States Government paid taxpayer dollars to the largest of our financial institutions, and to European Union Banks, in order to prop up those poorly run organizations. Twenty Billion of those dollars were handed over to the defendant, U.S. Bank.”

“The HAMP guidelines require U.S. Bank to perform modification services for all mortgage loans its services. Otis Philips applied to modify his mortgage with U.S. Bank. U..S. Bank denied the request, without numbers, figures, or explanation, reasoning, comparison to the guidelines, or anything.”

“A cynical Judge might believe that this entire motion to dismiss is a desperate attempt to avoid the discovery period, where U.S. Bank would have to tell Mr. Phillips how his financial situation did not qualify him for a modification. Or, perhaps he was [Judge’s emphasis, not mine] qualified, yet didn’t receive the modification, in violation of U.S. Bank’s Service Participation Agreement (SPA).”

“U.S. Bank’s silence on this issue might heighten the suspicions of such a cynical jurist.”

“Clearly, U.S. Bank cannot take the money, contract with our government to provide a a service to the taxpayer, violate that agreement, and then say no one on earth can sue them for it. That is not the law in Georgia. In fact, since no administrative review is provided in HAMP [which is something you should put in your OCC letter demanding review], the courts are the only recourse.”

  [ipaper docId=72757477 access_key=key-2mhv6qb83jgun7xscoll height=600 width=600 /]

 

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



Posted in STOP FORECLOSURE FRAUDComments (1)

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

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