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Abigail Field: Insider Says Promontory’s OCC Foreclosure Reviews for Wells are Frauds. Brought to You by HUD Sec. Donovan

Abigail Field: Insider Says Promontory’s OCC Foreclosure Reviews for Wells are Frauds. Brought to You by HUD Sec. Donovan


If anyone can set the record straight, Abigail is just the person to do it!

Naked Cap-

U.S. Housing Secretary Shaun Donovan has embarrassed himself yet again. This time, though, he’s gone in for total humiliation. See, he praised the bank-run Office of the Comptroller of the Currency’s (OCC) foreclosure reviews as an important part of the social justice delivered by the mortgage “settlement“. But thanks to an insider working on an OCC review, we know that process is a sham. Worse, the insider’s story shows that enforcement of the settlement is likely to be similar, which is to say, meaningless. Doesn’t matter how pretty the new servicing standards are if the bankers don’t have to follow them.

Let’s start with Donovan’s sales pitch for the OCC reviews:

For families who suffered much deeper harmwho may have been improperly foreclosed on and lost their homes and could therefore be owed hundreds of thousands of dollars in damages — the settlement preserves their ability to get justice in two key ways.

First, it recognizes that the federal banking regulators have established a process through which these families can receive help by requesting a review of their file. [ACF: That’s the OCC process] If a borrower can document that they were improperly foreclosed on, they can receive every cent of the compensation they are entitled to through that process.

Second, the agreement preserves the right of homeowners to take their servicer to court. Indeed, if banks or other financial institutions broke the law or treated the families they served unfairly, they should pay the price — and with this settlement they will. [bold throughout mine]

Now, the justice of the settlement has been debunked many times over. And David Dayen debunks Donovan’s OCC pitch here. What’s important is that Bank Housing Secretary Donovan wants you to believe the Wells Fargo OCC process is a meaningful contribution to holding bankers accountable and compensating victims.

Wells Fargo’s Fraudulent OCC ‘Independent’ Foreclosure Reviews

[NAKED CAPITALISM]

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Insider Says Wells Fargo’s Independent Foreclosure Review for OCC is “a Sham” – Mandelman Matters

Insider Says Wells Fargo’s Independent Foreclosure Review for OCC is “a Sham” – Mandelman Matters


I got an email the other night from one of my readers.  It said…

 

“I was hired as one of those “Independent File Review Specialist” at a company called Promontory working on Wells Fargo Bank. I have 15 years industry experience in all facets of the mortgage & title industry, and just needed a job at the moment.  I must say the whole project is a mess, and a terrible joke on the victims of foreclosure and the American people. It’s a total sham.”

 

No kidding, I said to myself.  Or, as Yves Smith would say… “Quelle surprise.”  The email continued…

 

“I have found errors that should be moved up through the ranks, but am told “quit digging so deep”…”put your shovel away”…Focus on the questions “in scope”… The review forms are set up so no harm could ever be found. It’s equivalent of an attorney presenting his case to a judge with just 20% of the evidence.”

 

Well, that can’t be good, right?  He went on…

 

“I would also like to mention that I was brought in through a temp agency…..some of the people brought in with me do not know the difference between a truth in lending statement, and a note. It’s a shame, these are your reviewers!!! The supervisors don’t want any trouble…they are mostly temps too, just trying to get a promotion to full time. Does this sound like a fair and impartial review to you? Since we’re temps I suppose that’s impartial, not to mention they made us “affiant notaries” so we can so-called “notarize each others reviews.”

 

Doesn’t sound “fair and impartial” in the least, now does it?  But I do like the ability to notarize each other’s reviews.  That sounds handier than a pocket on a man’s shirt.  He closed by saying…

 

“The foreclosed victims don’t realize if they do not provide specific dates on the intake forms… their complaints are considered “general comments” out of scope. They should specifically ask for a “full file review” and hopefully their info has not been scrubbed or purged… I could go on and on, but I just felt I needed to share this.”

 

And in my opinion, you’ve done a very good thing.

 

Our insider says he was hired by Promontory Compliance Solutions, LLC to do work on the Independent Foreclosure Review for Wells Fargo Bank.  The company’s Website describes itself as follows:

 

Promontory excels at helping financial companies grapple with and resolve critical issues, particularly those with a regulatory dimension. Taken as a whole, Promontory professionals have unparalleled regulatory credibility and insight, and we provide our clients with frank, proactive advice informed by evolving best practices and regulatory expectations.

Promontory is a leading strategy, risk management and regulatory compliance consulting firm focusing primarily on the financial services industry. Led by our Founder and CEO, Eugene A. Ludwig, former U.S. Comptroller of the Currency, our professionals have deep and varied expertise gained through decades of experience as senior leaders of regulatory bodies, financial institutions and Fortune 100 corporations. 

 [Continue to Mandelman Matters] it gets much better!

.

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



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Banks face crisis in bungled commercial mortgages

Banks face crisis in bungled commercial mortgages


Oh yes, MERS is in this rabbit hole as well: From a 10/10 post EXCLUSIVE | NYSC COMMERCIAL (CMBS), MERS and a $65 MILLION NOTE

If this doesn’t do them in then look for the Next Robo-Signing Scandal: RePOST: CHASE BANK v. GERGIS | NY Civ. Court “ROBO-TESTIMONY, WAMU, CREDIT-CARD DEBT” Dismissed w/ PREJUDICE

Either way the banks are screwed on these as well.

CBS-

The nation’s banks are looking at a robo-signing problem with commercial real estate which may dwarf the one for home mortgages, according to a new study.

Research by Harbinger Analytics Group shows the widespread use of inaccurate, fraudulent documents for land title underwriting of commercial real estate financing. According to the report:

This fraud is accomplished through inaccurate and incomplete filings of statutorily required records (commercial land title surveys detailing physical boundaries, encumbrances, encroachments, etc.) on commercial properties in California, many other western states and possibly throughout most of the United States.

[CBS NEWS]

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COMPLAINT | CURTIS HERTEL, NANCY HUTCHINS, REG. OF DEEDS vs. MORTGAGE ELECTRONIC REGISTRATION  SYSTEMS, INC., MERSCORP, INC.

COMPLAINT | CURTIS HERTEL, NANCY HUTCHINS, REG. OF DEEDS vs. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., MERSCORP, INC.


STATE OF MICHIGAN
30THCIRCUIT COURT FOR THE COUNTY OF INGHAM

CURTIS HERTEL, the Register of Deeds and

Representative of INGHAM COUNTY; and

NANCY HUTCHINS, the Register of Deeds

and Representative of BRANCH COUNTY,

both as Class Representatives of all 83

counties in the State of Michigan.

 Plaintiffs,

V                                                                                     

MORTGAGE ELECTRONIC REGISTRATION

SYSTEMS, INC., MERSCORP,INC., JEANNE

KIVI, ELLEN COON, MARSHALL ISAACS,

BANK OF AMERICA N.A., JP MORGAN CHASE & CO,

CHASE HOME MORTGAGE CORPORATION f/k/a

CHASE HOME FINANCE, WELLS FARGO BANK, N.A.,

CITIMORTGAGE INC., eTITLE AGENCY INC,

1ST CHOICE TITLE SERVICES INC, ATTORNEYS

TITLE AGENCY LLC, f/k/a WARRANTY TITLE

AGENCY LLC, and FEDERAL NATIONAL

MORTGAGE ASSOCIATION, and

JOHN DOE as Any Other authorized signers for MERS

or MERSCORP,INC. and Defendants JOHN DOE

Corporations I – MMM,

 Defendants.

 

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Michigan, Ingham & Branch Counties file class action lawsuit against MERS

Michigan, Ingham & Branch Counties file class action lawsuit against MERS


For immediate release:  November 15th, 2011

CONTACT:  Curtis Hertel Jr., Ingham County Register of Deeds, Ph:  517-281-3574

Ingham & Branch Counties file class action lawsuit against MERS

Ingham County Register of Deeds Curtis Hertel Jr. & Branch County Register of Deeds Nancy Hutchins have filed a new lawsuit in the 30th Circuit Court, against Mortgage Electronic Registration Systems.  The lawsuit alleges that MERS has avoided paying state and county transfer taxes that would have been due on multiple property deeds filed within the last decade.  The transfers usually took place shortly following sheriff’s sales on foreclosed homes.

                “This is another case we’ve found, where the state’s residents have been shortchanged by questionable bank practices”, said Hertel.  “This is money that is intended for public education funds on the state level, and money that the county could have used for local programs like health and police.  The law requires that transfer tax is paid on the value of a property, whenever that property is transferred on a document such as a deed.  The big banks have found multiple ways of dodging those taxes.”

                The lawsuit was filed as a class-action, which means that other counties around Michigan are free to join the suit.  Ingham County and Branch County are the two current plaintiffs.  Hertel is hoping that other Registers from Michigan’s 83 counties will join the action.

                “It’s time for this nonsense to stop”, said the Branch County Register Nancy Hutchins.  “These organizations need to step up to the plate, pay the transfer tax that is due and stop claiming exemptions that by law they are not entitled to.”

                “MERS has transformed the entire mortgage industry into a giant shell game”, said Hertel.  “The current servicer of a mortgage is no longer a matter of public record, and once a property is foreclosed, the real games begin, as deeds and other paperwork are filed in such a way as to avoid transfer taxes at every step.   Property ownership is clouded, and the simple task of collecting transfer tax has been turned into this legal battle, largely because of the involvement of MERS.”

                The lawsuit also lists many of the country’s largest banks, as well as individual officers of MERS, as defendants in the case.  Because MERS has represented and acted in the stead of dozens of different banks in property transactions, Hertel & Hutchins are hoping that the court action will bring clarity to the issue of these delinquent taxes.

                Ingham County residents can ask questions about the lawsuit at a pair of town-hall meetings being held this week.  As part of a series of meetings that Hertel has been convening in various communities across the county this year, there are meetings this week on Tuesday in Okemos, and Thursday in Lansing.  The meeting on Tuesday will take place at Okemos High School, in the 2nd floor library, at 5:30pm, and the meeting on Thursday will take place at the Lansing Church of God in Christ, at 5304 Wise Road, also at 5:30pm.  Citizens can get questions answered about how the foreclosure crisis has affected Ingham County, and also get legal help if they are facing such a problem with their own home.

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Homeowners, Investors in Mortgage Backed Securities Feel Your Pain. Hear Their Lawyer Talk About Servicer Nightmares.

Homeowners, Investors in Mortgage Backed Securities Feel Your Pain. Hear Their Lawyer Talk About Servicer Nightmares.


Absolutely do not miss this piece from Abigail Field – So head over and please absorb the information.

 

Abigail C. Field-

If you want to cut through some of the nonsense the banks have managed to sell as information about the housing situation, robosigning, mortgage modifications, check out this very accessible interview of attorney Talcott Franklin by Martin Andelman.

Tal represents the majority of investors hosed once by Wall Streeers selling AAA-rated mortgage backed junk, and constantly being hosed again by the big bank servicers of those mortgages. Interestingly, his perspective sounds very much like homeowners’. Yes, a couple of times it gets a little too legalistic, but only for about 5 minutes of the slightly longer than the hour chat—when you hit the overview of the contracts structuring securitization, or any other topic that is more in the weeds than you want to go, take a deep breath and keep going. Most of the interview is in a rhythm and a language that creates clarity I’ve not seen or heard elsewhere.

[REALITY CHECK]

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



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The World of the Investor with Attorney Talcott Franklin – A Mandelman Matters Podcast

The World of the Investor with Attorney Talcott Franklin – A Mandelman Matters Podcast


Please find some time today or over the weekend to listen to this excellent podcast of Martin Andelman’s interview with Attorney Talcott Franklin, who represents more than half of all the investors in mortgage-backed securities on the planet.  Tal’s the co-author of the “Mortgage and Asset-backed Securities Litigation Handbook,” and he’s a very experienced and highly sophisticated litigator. You will learn a whole lot and many thanks to Martin for this super interview.

Please head over to Mandelman Matters for the full article.

The podcast is available in two versions… MP4 and MP3.  The MP4 version includes a couple of slides that show diagrams of the basic securitization process, but the MP4 format may not play on some computers.  The MP3 version is audio only, and should play on most any computer.  Most listeners will have no trouble following along either way.

So, turn up the volume on your speakers, and click the MP4 or MP3 version.  I loved recoding this podcast.  If you want to know more about the foreclosure crisis, you’re about to learn from an expert on the other side of the foreclosures, the investor side… it doesn’t get any better than this!

CLICK HERE TO PLAY THE ENHANCED MP4 VERSION

… INCLUDES SLIDES ON SECURITIZATION

 OR

CLICK HERE TO PLAY THE MP3 VERSION

Mandelman out.


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



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Fitch: Large RMBS Servicers Prone to High Operational Risk

Fitch: Large RMBS Servicers Prone to High Operational Risk


Mortgage Servicing News

Recent operational risk downgrades of various mega-servicers of securitized residential mortgage loans by Fitch Ratings indicate the agency is staying true to its resolution to start a new era in mortgage banking evaluations. It appears to involve more frequent updates of rating criteria.

Diane Pendley, Fitch’s managing director, told this publication the agency’s ratings program is “emphasizing the higher expected levels of performance for servicers” based on developing best practices and proposed new regulation. It is the second expansive downgrade since November 2010 when Fitch assigned a negative outlook to the U.S. residential mortgage servicer sector.

This month Fitch downgraded the RMBS servicer ratings of Bank of America, CitiMortgage Inc., MetLife Bank, PNC Bank, Suntrust Mortgage Inc., Wells Fargo Bank, BAC Home Loans Servicing and Chase Home Finance.

Continue reading [MORTGAGE SERVICING NEWS]

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IA APPEALS COURT |”MORTGAGE NULL & VOID” DEUTSCHE BANK NATIONAL TRUST COMPANY v. GAUPPS

IA APPEALS COURT |”MORTGAGE NULL & VOID” DEUTSCHE BANK NATIONAL TRUST COMPANY v. GAUPPS


Back by popular demand…first posted this back on July 1, 2010.

DEUTSCHE BANK NATIONAL TRUST COMPANY, As Trustee of Ameriquest Mortgage Securities, Inc., Asset-Backed Pass Through Certificates, Series 2004-X3, Under the Pooling and Servicing Agreement Dated as of September 1, 2004, Without Recourse, Plaintiff-Appellant,
v.
DAVID J. GAUPP, ALEXANDRA C. GAUPP, NATHAN PARTON and SPOUSE OF NATHAN PARTON, REBEKAH J. BARTON and SPOUSE OF REBEKAH J. BARTON, WELLS FARGO BANK, N.A., and PARTIES IN POSSESSION,, Defendants-Appellees.

No. 0-272/09-0700.

Court of Appeals of Iowa.

Filed June 30, 2010.

Excerpt:

On October 21, 2008, the Partons and Wells Fargo filed a motion for summary judgment asserting that (1) the mortgage held by Deutsche Bank was invalid; and (2) the mortgage held by Deutsche Bank could not be foreclosed because the Partons were bona fide purchasers for value. On February 12, 2009, the district court issued its ruling finding that the Gaupps and Granger conveyed their interest in the property to G & G Properties on July 3, 2002, and when G & G Properties recorded the deed on September 24, 2002, it became the record titleholder. Gaupp did not have any interest in the property when he executed the mortgage in favor of Ameriquest/Deutsche Bank and after the mortgage was executed, Gaupp never obtained title to the property. G & G Properties did not convey the property to anyone prior to May 19, 2006, when the Partons purchased the property. As a result, the mortgage held by Deutsche Bank was “null and void.” The district court granted the Partons and Wells Fargo’s motion for summary judgment and dismissed the petition for foreclosure. Deutsche Bank appeals.

<SNIP>

Deutsche Bank asserts that the district court erred in granting the defendants’ motion for summary judgment. The parties do not dispute that at the time Gaupp executed the promissory note and mortgage, he did not hold title to the property and that G & G Properties was the record titleholder. Deutsche Bank cannot avoid the fundamental principal that a party that has no interest in a particular piece of real property cannot validly mortgage that property. See, e.g., Lee v. Lee, 207 Iowa 882, 885, 223 N.W. 888, 890 (Iowa 1929) (holding a mortgage invalid because the mortgagor had no interest in the property at the time the mortgage was given); 59 C.J.S. Mortgages § 111, at 102-03 (2009) (discussing that “[o]ne who has no ownership interest in property has no right to mortgage it” and if one does so, the mortgage creates no interest in the property). At the time Gaupp obtained the loan from Ameriquest, he did not have any interest in the property and therefore, the mortgage instrument attempting to secure the promissory note was invalid.

Deutsche Bank argues that Gaupp acquired title to the property on December 31, 2003, when the Gaupps and Granger executed the “Corrected Warranty Deed,” which Deutsche Bank further argues resulted in the mortgage becoming valid.[ 3 ] However, this argument fails because Gaupp did not acquire an interest in the property when the “Corrected Warranty Deed” was executed on December 31, 2003. On July 3, 2002, the Gaupps and Granger conveyed the property to G & G Properties. After this conveyance, Gaupp had no interest in the property and could not convey the property to anyone. See Iowa Code § 557.3 (2007) (“Every conveyance of real estate passes all the interest of the grantor therein, unless a contrary intent can be reasonably inferred from the terms used.”). After the July 3, 2002 conveyance, only G & G Properties was able to convey title to the property. Any such attempt by Gaupp to do so would be and was invalid as he was no longer the titleholder. Therefore, the attempts by the Gaupps and Granger to convey the property on December 31, 2003, and February 2, 2005, were not valid conveyances.[ 4 ] Additionally, because the invalid conveyances were outside the chain of title, they were stray deeds when recorded. See William Stoebuck and Dale Whitman, The Law of Property § 11.11 (3rd ed. 2000) (“The term `chain of title’ is a shorthand way of describing the collection of documents which one can find by the use of the ordinary techniques of title search.”); 1 C.J.S. Abstracts of Title § 15, at 320 n.8 (2009) (“Instrument executed by owner [that] is recorded before acquisition or after relinquishment of title by owner is outside chain of title . . . .”).[ 5 ] Title remained with G & G Properties from July 3, 2002 until May 5, 2006, when G & G Properties conveyed its solely held interest in the property to the Partons. Therefore the chain of title went from G & G Properties to the Partons. Gaupp did not have title to the property when he executed the mortgage instrument now held by Deutsche Bank nor did he subsequently obtain title. We affirm the district court’s findings and ruling.

Continue reading below…

deutsche bank v. gaupp

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EXCLUSIVE | NYSC COMMERCIAL (CMBS), MERS and a $65 MILLION NOTE

EXCLUSIVE | NYSC COMMERCIAL (CMBS), MERS and a $65 MILLION NOTE


Recently many blogs have been discussing MERS and CMBS, well here is an example of one case from a NY Supreme Court. You can read it and draw your own conclusions by commenting down below if you wish.

Be sure you catch Judge IRA B. WARSHAWSKY’s valid points!

SUPREME COURT : STATE OF NEW YORK
COUNTY OF NASSAU

MASS OP LLC and MASS ONE LLC

against

PRINCIPAL LIFE INSURANCE COMPANY
PRINCIPAL GLOBAL INVESTORS, LLC,
WELLS FARGO BANK, N.A., CENTERLINE
CAPITAL GROUP, INC., BANK OF AMERICA
NATIONAL ASSOCIATION, Successor by
Merger to LASALLE BANK NATIONAL
ASSOCIATION, as TRUSTEE for the Registered
Holders of Bear Stearns Commercial Mortgage
Securities, Inc. Commercial Mortgage Pass-
Through Certificates Series 2006-PWR14

Excerpts:

The application stated that the lender intended to ” securitize” the loan and the borrower was to “cooperate in connection with any such securitization.” The application recited that each borrower was a “single purpose bankruptcy-remote entity…formed exclusively for the purpose of owning and operating the property.” The application stated that the loan amount would be not less than $65 million provided, among other conditions, that the loan amount would be equal to 80% of the appraised value of the property “pursuant to an appraisal approved by lender. “

However, the court hastens to add that it is not insensitive to plaintiffs ‘ predicament. Traditionally, mortgage assignments were recorded with the County Clerk. By searching the mortgage records, the mortgagor could determine the present mortgage holder and attempt to negotiate a “work out” or forbearance. In 1993, several large participants in the mortgage industry created the Mortgage Electronic Registration System (“MERS”). Pursuant to MERS, assignments of residential mortgages, instead of being publicly recorded, are tracked electronically in a private system (See MERSCORP, Inc. Romaine 8 NY3d 90 (2006)). By visiting MERS’ website or dialing its 800 number , a homeowner may access information regarding his or her loan servicer, but not the holder of the mortgage.

This lack of disclosure may create substantial difficulty when a homeowner wishes to negotiate the terms of his or her mortgage or enforce a legal right against the mortgagee and is unable to learn the mortgagee s identity (See 8 NY3d at 104, Kaye, J. dissenting). This

“information deficit” may function to “insulate a note holder from liability… and hide predatory lending practices”

(Id). The MERS system applies only to residential mortgages. However, as the present case illustrates , securitized financing creates the potential for the same abuses with commercial mortgages because of a similar “information deficit. ” While a breach of contract action against the lender does not lie, this court echoes Judge Kaye in calling the issue to the attention of the Legislature (ld). The court will now proceed to determine the sufficiency of plaintiffs ‘ fraud claims.

[ipaper docId=40293648 access_key=key-ewvrbg41h8im0oc3odn height=600 width=600 /]

Just recently:

2010 NY Slip Op 51791(U)

MASS OP LLC AND MASS ONE LLC, Plaintiffs,
v.
PRINCIPAL LIFE INSURANCE COMPANY, PRINCIPAL LIFE GLOBAL INVESTORS, LLC, WELLS FARGO BANK, N.A., CENTERLINE SERVICING, INC., BANK OF AMERICA NATIONAL ASSOCIATION, SUCCESSOR BY MERGER TO LA SALLE BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES, INC. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2006-PWR14, BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INC., AND “JOHN DOE” NO. 1 THROUGH “JOHN DOE” #7 INCLUSIVE, THE ACTUAL IDENTITIES OF THE LAST NAMED, defendants BEING UNKNOWN TO Plaintiffs, THE PARTIES INTENDED BEING PERSONS, CORPORATIONS, ASSOCIATIONS AND OTHER ENTITIES HAVING OR CLAIMING AN INTEREST IN THE LOAN DESCRIBED IN THIS COMPLAINT, Defendants.

Supreme Court, Nassau County.

Decided September 30, 2010.

IRA B. WARSHAWSKY, J.

PRELIMINARY STATEMENT

Defendants Bear Stearns and Principal Life Insurance move to dismiss the amended complaint. Bear Stearns, which first appears as a defendant in the amended complaint, assert that by entering into a settlement agreement with certain defendants, and have thereby reaffirmed the valuation of the shopping center and have recovered damages, bars them from further claims under the “one recovery” doctrine. They also claim that the breach of fiduciary duty claim against Bear Stearns is barred by the 3-year statute of limitations, which commenced with the refinancing on November 8, 2006, with service upon Bear Stearns on December 24, 2009. Bear Stearns also contends that the plaintiff has failed to allege a “relationship of higher trust”, essential to a claimed breach of a fiduciary duty; that the claim which plaintiff asserts against Bear Stearns is barred by the Martin Act; and, to the extent a claim of “joint venture” with Bear Stearns is asserted, recovery is also barred under the “one recovery” doctrine.

In similar fashion, Principal Life contends that plaintiffs’ settlement with the servicer defendants renders the amended complaint moot; there was no fiduciary relationship between plaintiffs and Principal Life; the Pooling and Servicing Agreement did not establish a joint venture; and plaintiffs have failed to state a claim for breach of a fiduciary duty.

BACKGROUND

This action arises from the refinancing of the Phillips at Sunrise Mall in Massapequa. Plaintiff, the owner of the mall, sought to borrow $65,000,000 from Principal Life to refinance the existing $40,000,000 mortgage on the mall. Plaintiff contends that prior to the November 8, 2006 refinancing transaction, Principal Life represented that the $65,000,000 represented no more than 80% of the value of the real estate. They claim that this was erroneous, based upon a defective appraisal performed by Cushman & Wakefield, allegedly based upon faulty data. Plaintiff claims to have expressed concern about repaying the loan, but were advised that Principal Life’s servicing entity, Principal Global Investors, LLC would be responsive to the needs of plaintiff.

After the closing, Principal Life assigned the loan to Principal Commercial Funding, LLC, which then sold the loan to Bear Stearns as the “depositor” for a commercial mortgage-backed securities trust (“CMBT”). Plaintiff contended in part that the failure of Principal Life Insurance to divulge its fee arrangement with Bear Stearns, which encouraged them to inflate the amount of the mortgage, breached a duty to plaintiff. The mortgage was deposited along with many other mortgages in the securitization process. Through underwriters, commercial mortgage certificates were sold in the open market.

By December 2008, in the midst of a global economic crisis, plaintiffs had lost two major tenants, and were experiencing difficulty in making payments under the mortgage. Their efforts to modify the mortgage with Principal Global were not successful, and they were advised to contact Wells Fargo Bank, N.A., the “master servicer”. Plaintiffs contend that they were unable to make headway in such discussions with any servicer.

Plaintiffs commenced the original action on March 11, 2009, suing the maker and seller of the loan, the servicers and trustee for their roles in originating and servicing the loan. They did not sue Bear Stearns or any underwriters or other entities involved in bringing the commercial mortgage certificates to market. The complaint was dismissed by Order dated July 1, 2009, but the dismissal was without prejudice to plaintiffs’ seeking to replead to allege a breach of fiduciary duty.

Plaintiffs did so move on September 16, 2009, seeking to add Bear Stearns as a defendant. Defendant Bear Stearns notes that the moving papers included a copy of the proposed amended complaint, but not a summons, and that this is a significant factor in the claimed expiration of the statute of limitations. By Order of December 14, 2009, the Court granted plaintiffs’ motion in part and denied it in part. Plaintiff was permitted to allege a first cause of action in the Amended Complaint claiming a breach of fiduciary duty claim against Principal Life and Bear Stearns, and also permitted the assertion of a similar claim against Wells Fargo and Centerline Servicing, Inc. and Bank of America N.A. under a joint venture theory in the second cause of action. Plaintiff was also permitted to replead a cause of action against Principal Life.

On December 24, 2009 plaintiff made service of the Amended Complaint and Supplemental Summons upon Bear Stearns by service on the New York Secretary of State. By letter dated April 29, 2010 from June Diamant, Esq., Bear Stearns learned that plaintiff reached a settlement with defendants Centerline, Bank of America, Wells Fargo and Principal Global. While Bear Stearns has not seen the settlement agreement, a reading of the letter indicates that there has been no reduction in the principal amount of the loan, but interest is being deferred for some period of time.

Principal Life’s motion asserts that the only claim surviving against them after the Decision and Order of the Court and the settlement with Wells Fargo Bank, N.A. as “master servicer”, Centerline Servicing, Inc. as “special servicer”, Bank of America, N.A., and Principal Global Investors, LLC, are an alleged breach of fiduciary duty based upon its failure to reveal its compensation arrangement with Bear Stearns, and a second cause of action on the theory of a joint venture and breach of a fiduciary duty thereunder.

The Amended Complaint

The complaint alleges Five Causes of Action as follows:

First: Principal assigned an appraised value which would be relied upon by plaintiff to determine the amount of debt which they could safely assume. Principal and Bear Stearns, possessing superior knowledge and expertise than plaintiff in originating loans and issuing debt, placed the loan in a securitized pool. The undisclosed compensation agreements between Principal and Bear Stearns incentivized Principal to originate the loan and Bear Stearns to deposit it into the CMBS trust. The failure of Principal and Bear Stearns to advise plaintiff of the fee arrangement constituted a breach of fiduciary duty.

Second: Wells Fargo, Bank America and Centerline, as trustees and servicers of the loan, acted as joint venturers with Principal and Bear Stearns. In this capacity they owed a fiduciary duty to plaintiffs, which they breached.

Third: Principal failed to disclose the methodology by which it valued the property at an inflated price so as to benefit from undisclosed compensation agreements with Bear Stearns. Had plaintiffs been aware of the profit motive which caused Principal to misrepresent the value of the property, they would not have committed to the mortgage. Plaintiff seeks a reformation of the Loan by reducing the principal to 80% of the fair market value and a prohibition against defendants or other owner of the loan from declaring plaintiffs in default.

Fourth: In order to induce plaintiff to agree to the loan Principal made fraudulent misrepresentations of a material fact, that is, that the servicers would be responsive to plaintiff at a time when Principal knew that the loan would be transferred to others who would refuse to communicate with plaintiff, and whose preference was to have the loan go into default rather than resolve issues so as to maintain it as a performing loan.

Fifth: Despite the provision in the mortgage that communications to the lender were to be directed to Principal, neither Principal nor any other defendant notified plaintiff that the contact had been changed, resulting in a lack of communication from Principal in response to contacts from plaintiff. Principal’s servicing arm, Global, advised that communications must be directed to the Master Servicer, yet neither the Master Servicer nor any of the other defendants were willing to respond or carry out the obligations of the lender/mortgagee, although holding the powers of the mortgagee. Defendants thereby breached their obligations under the Mortgage Agreement and Loan Documents by failing to exercise the discretion granted in the Mortgage Agreement in a reasonable manner.

Plaintiffs demand damages of $28,000,000 on the First, Second, Fourth and Fifth Causes of Action, and reformation of the Mortgage in the Third Cause of Action.Plaintiffs oppose the motions of Bear Stearns and Principal, in part asserting that by virtue of the prior Order of the Court, after review of the proposed amended complaint, the Court directed an answer as opposed to a further motion to dismiss. They also contend that the prior settlement with servicer-defendants does not render the matter moot, that the claims against Bear Stearns are not time-barred, that the breach of fiduciary duty claim is sufficiently pleaded, the information that the moving defendants failed to disclose is material, that the action is not barred by the Martin Act, and that the breach of fiduciary claim is adequately pleaded against Bear Stearns on the theory of joint venture liability. Plaintiff asserts the same claims with respect to defendant Principal.

DISCUSSION

Defendants Principal and Bear Stearns move for dismiss pursuant to Civil Practice Law and Rules §§ 3211 (a)(1) and 3211 (a)(7).

CPLR § 3211 (a)(1) provides as follows:

(a) Motion to dismiss cause of action. A party may move for judgment dismissing one or more causes of action asserted against him on the ground that: 1. a defense is founded upon documentary evidence;

In order to succeed in a claim based upon documentary evidence, “. . . the defendant must establish that the documentary evidence which forms the basis of the defense be such that it resolves all factual issues as a matter of law and conclusively disposes of the plaintiff’s claim”. (Symbol Technologies, Inc. v. Deloitte & Touche, LLP, 69 AD3d 191, 194 [2d Dept. 2009]); (DiGiacomo v. Levine, 2010 WL 3583424 (N.Y.AD2d Dept.]).

When determining a motion to dismiss for failure to state cause of action pursuant to Civil Practice Law and Rules § 3211 (a)(7), the pleadings must be afforded a liberal construction, facts as alleged in the complaint are accepted as true, and the plaintiff is accorded the benefit of every favorable inference, and the court must determine only whether the facts as alleged fit within any cognizable legal theory. (Uzzle v. Nunzie Court Homeowners Ass’,. Inc. 55 AD3d 723[2d Dept. 2008]). A pleading will not be dismissed for insufficiency merely because it is inartistically drawn; rather, such pleading is deemed to allege whatever can be implied from its statements by fair and reasonable intendment; the question is whether the requisite allegations of any valid cause of action cognizable by the state courts can be fairly gathered from all the averments. (Brinkley v. Casablancas, 80 AD2d 815 [1st Dept. 1981]).

Defendants contention with respect to § 3211 (a)(1) is, in part, that the settlement agreement with servicing defendants belies the claims that the appraised value was inflated, or the interest rate too high. Aside from the fact that the Court has not seen the settlement agreement, defendants argument presumes that plaintiffs had the opportunity to reduce the principal balance or interest rate in conjunction with their settlement negotiations, and that their failure to do so is an acknowledgment on their part that the loan was not based upon an inflated appraisal and that the interest rate was appropriate. Instead, the settlement merely provided for a deferral of interest payments for some period of time in an effort to allow plaintiff to recover from the loss of two anchor tenants.

The Mortgage Consolidation, Extension and Modification Agreement between Mass Op, LLC and Mass One, LLC, as borrower, and Principal Life Insurance as lender, provides at ¶ 6.1 as follows:

The relationship between Borrower and Lender is solely that of debtor and creditor, and Lender has no fiduciary or other special relationship with Borrower and no term or condition of any of the Note, this Security Instrument and the other Loan Documents shall be construed so as to deem the relationship between Borrower and Lender to be other than that of debtor and creditor. Borrower is not relying on Lender’s expertise, business acumen or advice in connection with the Property”.

This is documentary evidence which clearly refutes any claim that plaintiff relied upon the expertise of Principal and was thereby in a relationship which required a higher level of trust than that between debtor and creditor. New York Courts have been reluctant to find a fiduciary relationship between lenders and borrowers, and the language of the security agreement simply amplifies this position. (Dobroshi v. Bank of America, N.A., 65 AD3d 882, 884 [1st Dept.2009]). There have been relatively rare circumstances in which a fiduciary relationship between a lender and a borrower has been found, but these inevitably involved certain unique circumstances, as when the Court concluded that the underlying motivation for a lender was to drive the borrower out of business. (In re Monahan Ford Corp. of Flushing, 340 B.R. 1 [Bankr. E.D.NY 2006]).

In the absence of such special circumstances, plaintiff did not have a fiduciary relationship with Principal. Principal’s motion to dismiss the First Cause of Action for Breach of Fiduciary Duty is granted.

The motion by Bear Stearns to dismiss is also granted as to the First Cause of Action. Plaintiff has no contractual relationship with Bear Stearns, and certainly no fiduciary responsibility on the part of Bear Stearns to advise plaintiff of its financial arrangement with Principal.

The Second Cause of Action is directed as the servicing defendants, claiming that they were joint venturers with Principal and Bear Stearns in that they divided responsibilities and compensation with respect to the loan, all without the knowledge of plaintiff. As such joint venturers, they all owed a fiduciary responsibility to plaintiff. As noted, however, neither Principal or Bear Stearns were in a fiduciary relationship with plaintiff, and, even if the subsequent servicing defendants were part of a joint venture, they did not assume a fiduciary responsibility from their assignors, who had none.

The Second Cause of Action is dismissed for failure to state a cause of action.

The Third Cause of Action seeks a reformation of the loan agreement based upon Principal’s failure to reveal to plaintiff the methodology by which the value of $82,000,000 was arrived at or its financial arrangement with Bear Stearns. In the absence of a fiduciary relationship, Principal had no obligation to reveal the methodology by which it estimated the value of the property; nor was it obligated to reveal its financial arrangement with Bear Stearns.

In fact, plaintiffs seem to have been fully apprised of the Cushman Wakefield appraisal, which is what formed the basis for Principal’s determination that the loan did not exceed 80% of the value of the property. The proposed terms of loan, described as an “application”, made it clear that the loan amount represented 80% of the appraised value pursuant to an appraisal approved by the Lender. Principal’s motion to dismiss the Third Cause of Action is granted.

The Fourth Cause of Action alleges fraud and fraudulent misrepresentation against Principal. In order to sustain a cause of action for actual fraud, plaintiff must prove:

• defendant made a representation, as to a material fact;

• the representation was false;

• the representation was known to be false by defendant;

• it was made to induce the other party to rely upon it;

• the other party rightfully relied upon the representation;

• the party relying upon the representation was ignorant of its falsity;

• the party suffered injury or damage based on its reliance. (Otto Roth & Co. Inc., v. Gourmet Pasta, Inc. 277 AD2d 293 [2d Dept. 2000]).

The Fourth Cause of Action in the Amended Complaint adds nothing to the claim of fraud which was previously dismissed. This is the law of the case, and the motion by Principal to dismiss the Fourth Cause of Action is granted.

In its earlier decision the Court determined that representations with respect to the servicer being “extraordinarily accessible in servicing the loan”, made to sophisticated investors, was a matter of puffery, not a representation of a material fact upon which plaintiffs were entitled to rely.

The Fifth Cause of Action alleges a breach of contract in that Principal is identified as the party to be contacted by mortgagor with respect to the mortgage; but after the securitization, neither Principal nor any other defendant advised Principal of the identity of the party with whom to make contact with respect to the mortgage. If there is any obligation on the part of Principal to advise the mortgagor of the identity of a special or master servicer, it would have to be contained in the only agreements between them, the Consolidation, Modification and Extension Agreement of November 8, 2006, and the Note and Mortgage executed in conformity with the Agreement.

The Consolidation Agreement is silent on the subject. The note in the amount of $65,000,000 calls for the payment to the order of Principal Life Insurance Company, at 711 High Street, Des Moines, Iowa 50392 (“Lender”) or at such other place as the holder hereof may from time to time designate, in writing, . . .”. This gives the lender the right to direct payment to the order of another, or to a different location, but places no obligation upon it to do so. To the contrary, ¶ 12 of the Promissory Note, Exh. “G” to the Affirmation of Joshua A. Zielinski, provides as follows:

(a) Upon the transfer of this Note, Borrower hereby waiving notice of any such transfer, Lender may deliver all the collateral mortgaged, granted, pledged or assigned pursuant to the Security Instrument and the other Loan Documents, or any part thereof, to the transferee who shall thereupon become vested with all the rights herein or under applicable law given to Lender with respect thereto, and Lender shall thereafter forever be relieved and fully discharged from any liability or responsibility in the matter accruing after said transfer; but Lender shall retain all rights hereby given to it with respect to any liabilities and the collateral not so transferred.

Lender, Principal Life, transferred the Note, notice of which Borrower (plaintiffs) waived, and upon such transfer of the Note and collateral, Lender was absolved from all further liability in the matter. (Exh. “K” to Affirmation of Joshua A. Zielinski).

The Fifth Cause of Action, as set forth in the Amended Complaint, is dismissed.

In light of the foregoing determinations as to each of the causes of action, the Court finds it unnecessary to address the claims of Bear Stearns that the failure of the plaintiff to annex a Supplemental Summons to their motion to amend the complaint caused service to be beyond the three year statute of limitations, that the claim is barred by the Martin Act, and that recovery is barred by the “one recovery” doctrine.

This constitutes the Decision and Order of the Court.

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



Posted in STOP FORECLOSURE FRAUDComments (1)

Well, Would You Look At That…Homeowners Scared the Heck Out of Fannie Mae

Well, Would You Look At That…Homeowners Scared the Heck Out of Fannie Mae


A few weeks ago, Fannie Mae issued an outright threat to homeowners in this country, creating a new rule that would punish anyone who stops paying their mortgage and walks away from their home, referred to as a “strategic default,” by not allowing those who choose that path to get a Fannie Mae loan for seven years.

They call it their “Seven-Year Lockout Policy for Strategic Defaulters,” and if you haven’t realized it already… look what’s been accomplished here: Homeowners have scared the heck out of industry giant, Fannie Mae.  I mean… these guys are shaking like leaves, absolutely running scared.  I know homeowners have been feeling like they have no power against the bankers, but this should prove otherwise.  It’s like we pushed the bully, and the bully ran home and got his Mom to come lay down a new rule in response.

On Fannie’s Website, Terence Edwards, Executive Vice President for Credit Portfolio Management has the following to say about the new rule:

“Walking away from a mortgage is bad for borrowers and bad for communities and our approach is meant to deter the disturbing trend toward strategic defaulting.”

Bad for borrowers, Terrence?  Really, how so?  Are you trying to say that people who walk away from their underwater mortgages are doing it because it’s bad for them?  Because I don’t think they think that, Terence.  I’m pretty sure that those that choose to walk away from their mortgages do so because they’ve figured out that it’s better for them… in their own best interests, as they say.

Hey Terrence, you disingenuous prick, I understand that my walking away from my mortgage is bad for you, but that’s only because my house is now worth half of what I owe.  You wouldn’t mind if I walked away from my mortgage if I had equity, right?  So, in other words, you want me to lose the couple hundred grand instead of you, does that about sum up your position here?  Yeah, well… I’m sure you do.  But I, on the other hand, would prefer that you lose the money instead of me.  Sorry about that.

Terrence, last I checked you’re just a giant failed mortgage lender who is as much a part of why we’re in this mess as any, and you’re going to need $1.5 trillion in taxpayer dollars to bail you out.

I’m a taxpayer, Terrence… isn’t that enough of a loss for me to take on your behalf?  You want me to contribute my tax dollars and probably my child’s future tax dollars to your $1.5 trillion bailout.  And on top of that, you also want me to eat the loss of a couple hundred grand on my house?

Geeze… when are you guys planning to kick in on this?  Your CEO gets a $6 million a year salary, I looked it up, and best I can tell he gets paid to say “yes” to just about everything.  I don’t know, Terrence, but I’m pretty sure that I could have bankrupted Fannie Mae for a lot less than $1.5 trillion.

Walking away from a $500,000 mortgage on a house that’s now worth $250,000 isn’t bad for the borrower, it’s good for the borrower… it makes all the financial sense in the world, for the borrower.  I mean, would you recommend that someone hold onto a stock that’s lost half its value.

Continue reading…Mandleman Matters

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



Posted in conspiracy, CONTROL FRAUD, corruption, fannie mae, foreclosure, foreclosure fraud, foreclosures, STOP FORECLOSURE FRAUD, walk awayComments (1)

DEUTSCHE BANK Gets the BOOT (Broken Chain of Title): DEUTSCHE BANK NATIONAL TRUST COMPANY v. GAUPP

DEUTSCHE BANK Gets the BOOT (Broken Chain of Title): DEUTSCHE BANK NATIONAL TRUST COMPANY v. GAUPP


Most of us can make the assumption that instead of Mr. Gaupp place we might as well enter MERS in his place right?

The real issue with the case as stated is that DBNT magically appears!  Where is the assignment from Ameriquest to *them*??  (I’d like to see the signatures on the note!)

DEUTSCHE BANK NATIONAL TRUST COMPANY, As Trustee of Ameriquest Mortgage Securities, Inc., Asset-Backed Pass Through Certificates, Series 2004-X3, Under the Pooling and Servicing Agreement Dated as of September 1, 2004, Without Recourse, Plaintiff-Appellant,
v.
DAVID J. GAUPP, ALEXANDRA C. GAUPP, NATHAN PARTON and SPOUSE OF NATHAN PARTON, REBEKAH J. BARTON and SPOUSE OF REBEKAH J. BARTON, WELLS FARGO BANK, N.A., and PARTIES IN POSSESSION,, Defendants-Appellees.

No. 0-272/09-0700.

Court of Appeals of Iowa.

Filed June 30, 2010.

Matthew E. Laughlin and Sarah K. Franklin of Davis Brown Law Firm, Des Moines, for appellant.

Charles R. Hannan, IV, Council Bluffs, for appellees David J. Gaupp and Alexandra C. Gaupp.

Aaron W. Rodenburg, Council Bluffs, for appellees G&G Properties and Troy Granger.

Brian D. Nolan of Nolan, Olson & Stryker, P.C., L.L.O., Omaha, Nebraska, for appellees Wells Fargo Bank, N.A., Nathan Parton, Spouse of Nathan Parton, Rebekah J. Barton, and Spouse of Rebekah J. Barton.

Alexandra Gaupp, Council Bluffs, appellee pro se.

David Gaupp, Council Avenue, appellee pro se.

Heard by Vogel, P.J., and Potterfield and Danilson, JJ.

VOGEL, P.J.

I. Background Facts and Proceedings.

In 2002, David Gaupp and Troy Granger formed a partnership, G & G Properties. On March 23, 2002, Gaupp and Granger purchased a duplex to use as a rental home for their partnership. Charles and Betty Bowes conveyed the property to “David J. Gaupp and Troy Granger” by warranty deed, which was recorded on April 9, 2002. On July 3, 2002, Gaupp, his wife, Alexandra Gaupp, and Granger conveyed the property to “G & G Properties” by warranty deed, which was recorded on September 24, 2002.

On December 8, 2003, Gaupp borrowed $162,000 from Ameriquest Mortgage Company (Ameriquest), which was evidenced by a promissory note and signed by Gaupp individually. In spite of the fact that Gaupp was not the titleholder of the property, the note purported to be secured by a mortgage on the property showing the borrower/mortgagor as “David J. Gaupp, married,” and bearing the signatures of “David J. Gaupp” and “Alexandra C. Gaupp,”[ 1 ] but the acknowledgment is only as to “David J. Gaupp” and was notarized by a Nebraska notary public. The mortgage instrument was recorded on January 8, 2004. Ameriquest subsequently sold and assigned the mortgage to Deutsche Bank National Trust Company (Deutsche Bank).

Although G & G Properties was the record titleholder of the property, the Gaupps and Granger subsequently executed two deeds regarding the property. On December 31, 2003, a “Corrected Warranty Deed” attempted to convey the property from “David J. Gaupp and Alexandra C. Gaupp” and “Troy S. Granger” to “David J. Gaupp and Alexandra C. Gaupp,” which was then recorded on January 8, 2004. On February 2, 2005, the Gaupps attempted to convey the real estate from “David J. Gaupp and Alexandra C. Gaupp” to “G & G Properties” by a quitclaim deed, which was recorded on July 28, 2005. In David Gaupp’s deposition testimony, he explained that these conveyances were done so that Granger’s name would not appear in the title, in an effort to keep Granger’s child support obligations from being a lien against the real estate.

In April 2006, G & G Properties agreed to sell the real estate. On May 5, 2006, “G & G Properties” conveyed the property to “Nathan D. Parton, a single person and Rebekah J. Barton, a single person” by warranty deed, which was recorded on May 19, 2006.[ 2 ] In order to purchase the property, the Partons obtained a loan from Wells Fargo Bank, N.A. (Wells Fargo) that was secured by a mortgage on the real estate, which was recorded on May 19, 2006. G & G Properties received proceeds in the amount of $188,273.02 from the sale of the real estate.

At some point, Gaupp defaulted on the note held by Deutsche Bank. On January 30, 2007, Deutsche Bank filed a petition to foreclose its mortgage, seeking judgment in rem against the real estate in the amount of $154,147.19, plus attorney’s fees, costs, and interest, naming the Gaupps as defendants, parties in possession. On March 16, 2007, Deutsche Bank amended its petition to add the Partons and Wells Fargo as additional defendants. On November 1, 2007, the Partons filed a third-party complaint against G & G properties and Granger.

On October 21, 2008, the Partons and Wells Fargo filed a motion for summary judgment asserting that (1) the mortgage held by Deutsche Bank was invalid; and (2) the mortgage held by Deutsche Bank could not be foreclosed because the Partons were bona fide purchasers for value. On February 12, 2009, the district court issued its ruling finding that the Gaupps and Granger conveyed their interest in the property to G & G Properties on July 3, 2002, and when G & G Properties recorded the deed on September 24, 2002, it became the record titleholder. Gaupp did not have any interest in the property when he executed the mortgage in favor of Ameriquest/Deutsche Bank and after the mortgage was executed, Gaupp never obtained title to the property. G & G Properties did not convey the property to anyone prior to May 19, 2006, when the Partons purchased the property. As a result, the mortgage held by Deutsche Bank was “null and void.” The district court granted the Partons’ and Wells Fargo’s motion for summary judgment and dismissed the petition for foreclosure. Deutsche Bank appeals.

II. Standard of Review.

We review a district court’s ruling on a motion for summary judgment for correction of errors at law. Iowa R. App. P. 6.907; City of Johnston v. Christenson, 718 N.W.2d 290, 296 (Iowa 2006). Summary judgment should be granted when the entire record demonstrates there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Iowa R. Civ. P. 1.981(3).

Thus, on review, we examine the record before the district court to decide whether any material fact is in dispute, and if not, whether the district court correctly applied the law. In considering the record, we view the facts in the light most favorable to the party opposing the motion for summary judgment.

Shriver v. City of Okoboji, 567 N.W.2d 397, 400 (Iowa 1997) (internal citations and quotation omitted).

III. Analysis.

Deutsche Bank asserts that the district court erred in granting the defendants’ motion for summary judgment. The parties do not dispute that at the time Gaupp executed the promissory note and mortgage, he did not hold title to the property and that G & G Properties was the record titleholder. Deutsche Bank cannot avoid the fundamental principal that a party that has no interest in a particular piece of real property cannot validly mortgage that property. See, e.g., Lee v. Lee, 207 Iowa 882, 885, 223 N.W. 888, 890 (Iowa 1929) (holding a mortgage invalid because the mortgagor had no interest in the property at the time the mortgage was given); 59 C.J.S. Mortgages § 111, at 102-03 (2009) (discussing that “[o]ne who has no ownership interest in property has no right to mortgage it” and if one does so, the mortgage creates no interest in the property). At the time Gaupp obtained the loan from Ameriquest, he did not have any interest in the property and therefore, the mortgage instrument attempting to secure the promissory note was invalid.

Deutsche Bank argues that Gaupp acquired title to the property on December 31, 2003, when the Gaupps and Granger executed the “Corrected Warranty Deed,” which Deutsche Bank further argues resulted in the mortgage becoming valid.[ 3 ] However, this argument fails because Gaupp did not acquire an interest in the property when the “Corrected Warranty Deed” was executed on December 31, 2003. On July 3, 2002, the Gaupps and Granger conveyed the property to G & G Properties. After this conveyance, Gaupp had no interest in the property and could not convey the property to anyone. See Iowa Code § 557.3 (2007) (“Every conveyance of real estate passes all the interest of the grantor therein, unless a contrary intent can be reasonably inferred from the terms used.”). After the July 3, 2002 conveyance, only G & G Properties was able to convey title to the property. Any such attempt by Gaupp to do so would be and was invalid as he was no longer the titleholder. Therefore, the attempts by the Gaupps and Granger to convey the property on December 31, 2003, and February 2, 2005, were not valid conveyances.[ 4 ] Additionally, because the invalid conveyances were outside the chain of title, they were stray deeds when recorded. See William Stoebuck and Dale Whitman, The Law of Property § 11.11 (3rd ed. 2000) (“The term `chain of title’ is a shorthand way of describing the collection of documents which one can find by the use of the ordinary techniques of title search.”); 1 C.J.S. Abstracts of Title § 15, at 320 n.8 (2009) (“Instrument executed by owner [that] is recorded before acquisition or after relinquishment of title by owner is outside chain of title . . . .”).[ 5 ] Title remained with G & G Properties from July 3, 2002 until May 5, 2006, when G & G Properties conveyed its solely held interest in the property to the Partons. Therefore the chain of title went from G & G Properties to the Partons. Gaupp did not have title to the property when he executed the mortgage instrument now held by Deutsche Bank nor did he subsequently obtain title. We affirm the district court’s findings and ruling.

AFFIRMED.

1. Alexandra denies she signed the mortgage.
2. Nathan and Rebekah subsequently married and are referred to herein as “the Partons.”
3. Deutsche Bank cites to Iowa Code section 577.4 (codifying the common-law doctrine of estoppel by deed); Sorenson v. Wright, 268 N.W.2d 203, 205 (Iowa 1978) (discussing the doctrine of estoppel by deed); Bisby v. Walker, 185 Iowa 743, 169 N.W. 467 (1918) (same). However, this authority is not on point. The doctrine of estoppel by deed relies upon a factual scenario where one purports to give a mortgage on property although not in title, but subsequently obtains an interest in the property. As we discuss above, Gaupp did not have an interest in the property when he attempted to mortgage the property and subsequently never obtained an interest in the property. As the district court noted, Deutsche Bank does not cite any authority that someone without any interest in property may utilize a “Corrected Warranty Deed” to convey property that the grantor has no interest in and is titled in another person or entity.
4. These transfers were made by the Gaupps and Granger individually and not on behalf of the partnership. See Iowa Code § 486A.302 (stating that “partnership property held in the name of the partnership may be transferred by an instrument of transfer executed by a partner in the partnership name”).
5. See also Iowa State Bar Ass’n, Comm. on Title Standards, Iowa Land Title Standards ch. 4, standard 4.5 at 18-19 (8 ed. 2010) (discussing the showing necessary regarding stray deeds between persons who have no apparent interest in record title).

This copy provided by Leagle, Inc.

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



Posted in chain in title, deutsche bank, lawsuit, wells fargoComments (0)

Frivilous Pleading Letter (Florida) to Law Offices Of David J. Stern P.A.

Frivilous Pleading Letter (Florida) to Law Offices Of David J. Stern P.A.


I really enjoy MR. BARNES work!

 

July 23, 2008

William Jeff Barnes, Esq. 1515 North Federal Highway
Atrium Building, Suite 300
Member of Florida and Colorado Bars Boca Raton, Florida 33432
Certified Mediator (Florida, Minnesota)
Certified Arbitrator (Florida) telephone: (561) 864-1067
telefax: (702) 804-8137
Ruth Barnes: International/Multilingual
Certified Mediator (Florida, Minnesota) e-mail: wjbarnes@cox.net
Certified Arbitrator (Florida)

July 2, 2008

VIA FAX AND MAIL
(954) 233-8333
Maria M. Solomon, Esq.
Law Offices of David J. Stern, P.A.
801 South University Drive, Suite 500
Plantation, Florida 33324

Re: Wells Fargo Bank, N.A. v. Defendant (Key West, Florida): FORMAL STATUTORY

DEMAND TO DISMISS FORECLOSURE ACTION WITH PREJUDICE, CLEAR
TITLE TO REAL PROPERTY, REFUND MONIES PAID, AND FOR PAYMENT
OF ATTORNEYS’ FEES AND COSTS PURSUANT TO FLA.STAT. SEC. 57.105

Dear Ms. Solomon:
This letter is being provided to you, the Law Offices of David J. Stern, P.A., and your client Wells Fargo Bank, N.A. (Plaintiff in the Action identified herein) as formal notice, pursuant to the matters herein and Fla.Stat. sec. 57.105, of this Firm’s client Defendant demand that you immediately and forthwith dismiss, with prejudice, that certain civil action styled Wells Fargo Bank, N.A. v. Defendant et al., 16th Judicial Circuit Court Case No. 2007-CA-1120-K (Key West, Florida, hereafter referred to as the “Action”); to provide clear title to the real property the subject of the Action; for refund of all monies paid by Defendant incident to the alleged “loan” the subject of the Action; and for payment of attorneys’ fees and costs which are awardable under various Federal and state statutes violated by your filing of the Action. This letter is also being sent as formal notice of Defendant’s Motion for Sanctions (copy attached hereto) which will be filed and set for hearing unless, pursuant to Fla.Stat. sec. 57.105(4), within twenty-one (21) days of today, Defendant’s demands as set forth herein are not complied with in writing confirmed by fax receipt, by this Firm, of the July 2, 2008 57.105 demand and notice to Maria Solomon, Esq. re: Wells Fargo Bank, N.A. v. Defendant et al., page 2 of 3

necessary documents to legally effect the demands made herein. The facts supporting this demand and the attached Motion are as follows, which are admissions by you, as an agent of the Law Offices of David J. Stern, P.A., in the Complaint which you filed:

(a) On or about August 22, 2007, you, as an agent and attorney of the Law Offices of David J. Stern, P.A., caused a civil action for foreclosure and to “enforce loan documents” to be filed in the 16th Judicial Circuit in and for Monroe County, Florida, which has been assigned case number 2007-CA-1120-K;

(b) In paragraph “5.” of Count I of the Complaint, you affirmatively represent to the Court that “The Plaintiff owns and holds the Note and Mortgage”;

(c) In paragraph “4? of Count I, you affirmatively represent to the Court that the mortgage was “subsequently” assigned to the Plaintiff “by virtue of an assignment to be recorded” (that being some time in the future);

(d) In paragraph “20? of Count II, you affirmatively represent to the Court that “The Plaintiff is not presently in possession of the Note and Mortgage” and “the Plaintiff cannot reasonably obtain possession of the Note and Mortgage because THEIR whereabouts cannot be determined (original emphasis):

(e) In paragraph “22? of Count II, you affirmatively represent to the Court that “The Plaintiff will agree to the entry of a Final Judgment of Foreclosure wherein it will be required to indemnify and hold harmless the Defendant(s) [sic] Defendant, from any loss they [sic] may occur by reason of a claim by another person to enforce the lost Note and Mortgage.”;

(f) The Action thus inconsistently but affirmatively alleges, in Count I, that “Plaintiff owns and holds the Note and Mortgage” when in fact the admissions in Count II demonstrate, by the allegations of paragraphs “20? and “22? of the Complaint, that the Plaintiff DOES NOT and CANNOT legally establish possession or ownership of the Note or the Mortgage and that same is/are in the possession of an unknown party or parties;

(g) A copy of the Note is not even attached to the Complaint (only an alleged “ledger of loan”);

(h) By virtue of the admissions of the Plaintiff in paragraphs “20?, “21?, and “22? of the Complaint, the Plaintiff has actual knowledge that it never, at any time material, had possession of either the mortgage or the note as same were sold, assigned, or transferred as part of the single-transaction securitization process which resulted in the subject mortgage and/or note being sold as

July 2, 2008 57.105 demand and notice to Maria Solomon, Esq. re: Wells Fargo Bank, N.A. v. Defendant et al., page 3 of 3

parceled obligations and becoming part of one or more tranches within a special investment vehicle;

(i) that the Plaintiff cannot establish that the subject note or mortgage is owned or controlled by the Plaintiff “indenture trustee” for unnamed holders of a series of asset-backed bonds (a copy of which are not even attached to the Complaint);

(j) As a direct and proximate result of the transaction referred to in paragraph “h” above, the Plaintiff does not and cannot establish legal standing to even institute a foreclosure action;

(k) As such, the allegation by the Plaintiff in paragraph “5? of the Complaint constitutes matters which are completely devoid of factual or legal support and are thus “frivilous” within the meaning of Fla.Stat. sec. 57.105;

(l) As the primary and threshold issue of legal standing to institute the Action cannot be satisfied (which was known to you, the Law Offices of David J. Stern, P.A., and the Plaintiff at the time that the Action was instituted), the Action is a patently frivilous claim within the meaning of Fla.Stat. sec 57.105 and the filing and prosecution thereof constitutes a fraud upon the Court.

Your client and your Firm are thus charged with actual notice of the filing of an frivilous claim, as you, your client, and the Law Offices of David J. Stern, P.A. knew or should have known that the Action was both not supported by the material (and record) facts necessary to establish the claim for foreclosure and would not (and could not) be supported by the application of then-existing law to the material (and record) facts.

As such, this Firm has been directed to file and set for hearing, after the expiration of twenty-one (21) days from today (that being Thursday, July 24, 2008), the attached Motion for Sanctions and to seek attorneys’ fees from both your client and your Firm if the demands set forth herein for immediate dismissal of the Action with Prejudice, providing of clear title to the property the subject of the action, refund of all monies paid by Defendant in connection with the original “loan” the subject of the Action, and payment of all attorneys’ fees and costs associated with this demand are not complied with in writing by the close of business (5:00 p.m.) Wednesday, July 23, 2008.

Sincerely,

Jeff Barnes, Esq.

WJB/bhs
attachment (enclosed with mailed original)
copy to: Defendant (w/attachment)

Source: foreclosuredefensenationwide.com

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GARY DUBIN LAW OFFICES FORECLOSURE DEFENSE HAWAII and CALIFORNIA
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