Wrongful Foreclosure | FORECLOSURE FRAUD | by DinSFLA

Tag Archive | "wrongful foreclosure"

STUBBS v. Bank of America, BAC, Fannie Mae | GA Nothern District Court “BAC …was not the ‘SECURED CREDITOR’ entitled to foreclose”

STUBBS v. Bank of America, BAC, Fannie Mae | GA Nothern District Court “BAC …was not the ‘SECURED CREDITOR’ entitled to foreclose”


h/t NYE LAVALLE

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION

GARY STUBBS,
Plaintiff,

v.

BANK OF AMERICA, BAC HOME
LOANS SERVICING, LP, and
FEDERAL NATIONAL MORTGAGE
ASSOCIATION,
Defendants.

EXCERPT:

Plaintiff has alleged facts making it plausible that Fannie Mae was in fact
the secured creditor at the time of the foreclosure and has alleged that no
assignment to Fannie Mae was filed prior to the time of sale as required by
O.C.G.A. § 44-14-162(b). Therefore, based on the allegations in the amended
complaint, BAC evaded the most substantive requirements of Georgia’s
foreclosure statute in that (1) it was not the secured creditor entitled to foreclose
despite providing a notice letter affirmatively representing it was the creditor;
and (2) it failed to file the assignment of the security deed to the secured creditor
in the county deed records prior to the foreclosure. See O.C.G.A. § 162(b);
Weems v. Coker, 70 Ga. 746, 749 (Ga. 1883); Cummings v. Anderson, 173 B.R.
959, 963 (Bankr. N.D. Ga. 1994).3 The Court accordingly DENIES the motion to
dismiss Plaintiff’s claim for wrongful foreclosure based on failure to comply with
Georgia foreclosure law.

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The 11 Most Bizarre Foreclosure Stories Of 2011

The 11 Most Bizarre Foreclosure Stories Of 2011


HuffPO-

The housing collapse and subsequent foreclosure crisis has claimed the homes of millions of Americans. But that tragedy may only be matched by the absurdity of some of its tales.

As of February, lenders had foreclosed on 2.7 million homes out of the 42.2 million mortgages borrowers took out between 2004 and 2008, according to a recent report by the Center for Responsible Lending. Though many of the foreclosures have been routine, the sheer volume has resulted in some glaring errors and bizarre evictions.

One Florida couple was threatened with foreclosure for making a payment too early. In Texas, a man faced foreclosure on a home that was destroyed by Hurricane Ike years ago, while in Massachusetts, Bank of America threatened to seize a home if it didn’t receive an outstanding mortgage payment worth $0.00.

But there is some indication that these ridiculous stories are indicative of a systematic pattern of wrongdoing on the part of the lenders. Massachusetts Attorney General Martha Coakley announced a lawsuit, earlier this week, against five of the biggest mortgage lenders, JPMorgan Chase, Bank of America, Wells Fargo, Citbank and Ally Financial Inc., alleging the lenders used fraudulent paper work to foreclose on “hundreds if not thousands” of Massachusetts homes, BusinessWeek reports.

[HUFFINGTONPOST]

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MORGAN v. OCWEN, MERS, MERSCORP | GA Dist. Court “Only Secured Creditors Can Foreclosure Non-Judicially in Georgia”

MORGAN v. OCWEN, MERS, MERSCORP | GA Dist. Court “Only Secured Creditors Can Foreclosure Non-Judicially in Georgia”


Via: NYE LAVALLE author of Report On Fraudulent & Forged Assignments Of Mortgages & Deeds In U.S. Foreclosures

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION

MICHAEL L. MORGAN,
Plaintiff,

v.

OCWEN LOAN SERVICING,
LLC, MORTGAGE
ELECTRONIC REGISTRATION
SYSTEMS, INC., and
MERSCORP, INC.
Defendants.

ORDER

The action is presently before the Court on Defendants’ motion to dismiss (“motion”) [Doc. 15], filed on November 22, 2010. For the following reasons, the Court GRANTS IN PART and DENIES IN PART the motion.

I. Background1

Plaintiff filed his complaint against Ocwen Loan Servicing, LLC (“Ocwen”), Mortgage Electronic Registration Systems, Inc. (“MERS”), and Merscorp, Inc. (“Merscorp”) on November 1, 2010. In the complaint, Plaintiff raises state law claims against Defendants for declaratory judgment, injunctive relief, cancellation of deed to secure debt, slander of title, quiet title, wrongful foreclosure, intentional infliction of emotional distress, and negligence. (Compl. at 1-20.) He also raises a claim under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. 1961-1968.
(Id. at 20-22.)

Plaintiff’s claims for declaratory judgment, cancellation of security deed, slander of title, and quiet title rest on the fact that he obtained a residential mortgage loan from Guaranteed Rate, Inc., and in connection with the loan he executed a promissory note to Guaranteed Rate and a deed to secure debt in favor of MERS “as nominee” for Guaranteed Rate. (Id. ¶¶ 11-13.) He alleges that because MERS had no pecuniary interest in the transaction, and was acting solely as “nominee” for the lender, the security deed to MERS is void. (Id. ¶¶ 19, 20.) Plaintiff’s claims for injunctive relief, wrongful foreclosure, intentional infliction of emotional distress, and negligence are based on allegations that Ocwen commenced a nonjudicial foreclosure against his property (1) when Ocwen was not the holder of the promissory note, and (2) without sending the statutorily required notice of foreclosure sale to the proper address. (Id. ¶¶ 24-27.) Plaintiff’s RICO claim is based on allegations that Defendants fraudulently used MERS in mortgage transactions, mailed fraudulent notices of foreclosure, and committed other unlawful acts. (Id. ¶¶ 79-80.)

Defendants filed a motion to dismiss the complaint on November 22, 2010, that contended: (1) Plaintiff failed to effect service of process, (2) Plaintiff’s claim for wrongful foreclosure based on Defendant’s failure to properly mail the foreclosure notice was moot, because Defendant canceled the November foreclosure sale, and (3) all counts based on allegations that the security deed is void failed to state a claim. (Defs.’ Mem. Supp. Mot. Dismiss at 6-15.) Plaintiff filed a response in opposition to the motion to dismiss on December 9, 2010,2 and Defendants filed a reply on December 22, 2010.

On December 30, 2011, all Defendants executed the waiver of service of summons, which was filed with the Clerk’s office on January 3, 2011. (Waiver of Service of Summons, Jan. 3, 2011.)

II. Motion to Dismiss Standard

In determining whether a complaint states a claim upon which relief can be granted, courts accept the factual allegations in the complaint as true and construe them in the light most favorable to the plaintiff. Hill v. White, 321 F.3d 1334, 1335 (11th Cir. 2003). To survive a motion to dismiss, a complaint must allege facts that, if true, “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quotations omitted). A claim is plausible where the plaintiff alleges factual content that “allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. The plausibility standard requires that a plaintiff allege sufficient facts “to raise a reasonable expectation that discovery will reveal evidence” that supports the plaintiff’s claim. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007).

The Court recognizes that Plaintiff is appearing pro se. Thus, his complaint is to be liberally construed and “held to less stringent standards than formal pleadings drafted by lawyers.” Erickson v. Pardus, 551 U.S. 89, 94 (2007) (citations and internal quotation marks omitted).

III. Analysis

A. Service of Process

As Defendants executed the waiver of service on December 30, 2010, their arguments for dismissal based on insufficient process, insufficient service of process, and lack of jurisdiction are moot. (See Waiver of Service of Summons, Jan. 3, 2011.) Defendants’ sole basis for alleging a lack of personal jurisdiction was the (previously true, but no longer so) assertion that service had not been effected under Rule 4. (Defs.’ Mem. Supp. Mot. Dismiss at 6-8.)

B. Alleged Failure to Send Notice of Foreclosure

Defendants argue that Plaintiff’s claims arising out of failure to send the foreclosure notice to the proper address are moot because the foreclosure did not go forward on November 2, 2010. However, a court may refuse to dismiss as moot claims in which the former controversy is one “capable of repetition, yet evading review.” United Steelworkers of America v. Bishop, 598 F.2d 408, 412 (5th Cir. 1979) (internal citations omitted).3 Claims will be preserved for review on this basis when they meet the following criteria: (1) “the challenged action was too brief in duration to be fully litigated prior to its cessation or expiration,” and (2) there is a reasonable likelihood that the plaintiff will face the same challenged conduct again. Id. As Plaintiff is still in default on his mortgage, and the Court’s predecessor judge terminated the injunction barring foreclosure on January 3, 2011, it is very likely that Defendants will again attempt a nonjudicial foreclosure. Since the statutorily required notice of foreclosure sale is only required to be sent 30 days prior to the sale date, there would not likely be time to adjudicate this issue should it arise again by virtue of another foreclosure sale notice mailed to the incorrect address. See O.C.G.A. § 44-14- 162.2. Plaintiff contends that Defendant failed to send proper notice, despite his written provision of an updated address. (Compl. ¶ 16.) Under these circumstances, the Court declines to dismiss as moot Plaintiff’s claims for wrongful foreclosure arising out of failure to give the required foreclosure notice.

C. Validity of the Security Deed and Wrongful Foreclosure

The issues presented here regarding ownership of the note and the effectiveness of an assignment executed by MERS have been the subject of much litigation, in this district and throughout the country. Therefore, the Court takes this opportunity to carefully address the complex issues presented.

The following are the facts relevant to these claims that must be presumed true for purposes of the instant motion. Plaintiff obtained a residential mortgage loan from Guaranteed Rate. (Compl. ¶ 9.) Like most residential mortgages in Georgia, this transaction was memorialized by two documents: a promissory note and a deed to secure debt (or “security deed”). The original grantee of the promissory note was Guaranteed Rate. (Id. ¶ 11.) The original grantee of the security deed was MERS “as nominee” for Guaranteed Rate and its successors and assigns. (Id. ¶¶ 12-13.)
Guaranteed Rate later transferred the note to Taylor, Bean & Whitaker. (Id. ¶ 14.)

Subsequently, MERS executed a purported assignment of the security deed to Ocwen. (Id. ¶ 64.) Ocwen is not now and has never been the holder of the note.4 (Id. ¶ 25.)

1. Validity of the Security Deed

A promissory note and a security deed are two separate, but interrelated, instruments. See Frank S. Alexander, GEORGIA REAL ESTATE FINANCE AND FORECLOSURE LAW, § 3:7 (2010-11 ed.). The security deed arises from the indebtedness memorialized in the promissory note, and “the deed’s power of sale depend[s] on default under the note.” Boaz v. Latson, 580 S.E.2d 572, 578 (Ga. Ct. App. 2003), rev’d on other grounds, 598 S.E.2d 485, 487 (Ga. 2004). Historically, the note and security deed have traveled together. If an originating lender decided to sell a mortgage loan, that lender would endorse and physically transfer the note (a negotiable instrument) to a new holder, and assign the security deed to that holder as well. See Bowen v. Tucker Fed. Sav. & Loan Assoc., 438 S.E.2d 121, 122 (Ga. Ct. App. 1993) (“the holder of a note who is also the grantee of a security deed has the right to exercise the power of sale in the security deed upon default”). The parties would then record the assignment in the county deed room, giving record notice to the homeowner and all the world of who held the mortgage. Christopher L. Peterson, Foreclosure, Subprime Mortgage Lending, and the Mortgage Electronic Registration System, 78 U. CIN. L. REV. 1359, 1362 (2009-10).

With the rise of securitization of mortgage loans, the financial services industry sought to maximize profitability by developing shortcuts to these cumbersome paperwork requirements. Peterson, 78 U. CIN. L. REV. at 1368-69. One such costsaving method was to have the original lender endorse the note in blank, so that it would not have to be specifically endorsed to every holder in the chain of ownership. In the securitization process, ownership of a note might be transferred four or five times, from the original lender to the issuer of the securities, through one or more special purpose entities, and finally to the trustee bank, which holds the legal interest in the note for the benefit of the securities holders. Id. at 1367; Adam Ashcraft and Til Schuermann, Understanding the Securitization of Subprime Mortgage Credit, 318 FEDERAL RESERVE BANK OF NEW YORK STAFF REPORT at 5 (2008).

Along the same lines, the mortgage industry created MERS to facilitate tracking ownership of mortgage loans without the necessity of executing and recording assignments of the security deeds. Peterson, 78 U. CIN. L. REV. at 1369.

The Georgia Supreme Court has described the MERS system as follows:

MERS, which began operating in 1997, is a private company
created by the mortgage banking industry for the purpose of
establishing a centralized, electronic system for registering the
assignments and sales of residential mortgages, with the goal
being the elimination of costly paperwork every time a loan is
sold . . . . Under the MERS system, the borrower and the original
lender name MERS as the grantee5 of any instrument designed
to secure the mortgage loan. The security instrument is then
recorded in the local land records, and the original lender
registers the original loan on MERS’s electronic system.
Thereafter, all sales or assignments of the mortgage loan are
accomplished electronically under the MERS system.

Taylor, Bean & Whitaker v. Brown, 583 S.E.2d 844, 845 n.1 (Ga. 2003) (internal citations omitted).

Whereas the cost-saving benefits to the mortgage banking industry of the MERS system are clear, its harmony with Georgia real estate law is less evident. Indeed, the use of MERS as a record “holder” of the security instrument (and tracking system for actual ownership of same) has created a great deal of confusion for homeowners attempting to communicate with the owner of their loan, as well as for judges and lawyers attempting to parse out ownership of the debt and authority to foreclose. See Landmark Nat’l Bank v. Kesler, 216 P.3d 158, 168 (Kan. 2009).

Several of Plaintiff’s claims rest on the argument that the security deed is void because of the fact that MERS was named as the grantee-as-nominee in the security deed rather than Guarantee Rate, the actual lender and payee on the note. This argument is unsupported by Georgia law. Separation of the note and security deed creates a question of what entity would have the authority to foreclose, but does not render either instrument void. See Boaz, 580 S.E.2d at 578; Alexander at § 3.7. Therefore, the Court dismisses Plaintiff’s claims for declaratory judgment (Count I), cancellation of the security deed (Count III), slander of title (Count IV), and quiet title (Count V), all of which seek either injunctive relief or damages based on the assertion that the security deed is void because of the MERS involvement.

2. Wrongful Foreclosure

Although the separation of the note and the security deed does not render either instrument void, it does create a substantial question of what entity has the right to foreclose when the borrower defaults on the loan. The Georgia Supreme Court has expressly reserved ruling on the question of “whether MERS, as nominee for the original lender and its successors, has the power to foreclose on an existing security deed either with or without the participation of the existing note holder.” Taylor, Bean & Whitaker v. Brown, 583 S.E.2d at 848. Many other courts have questioned MERS’s right to foreclose or effect an assignment of a security instrument, as it admittedly holds no beneficial interest in the note or security instrument. See Landmark v. Kesler, 216 P.3d at 167 (“If MERS is only the mortgagee, without ownership of the mortgage instrument, it does not have an enforceable right.”); Bellistri v. Ocwen Loan Servicing, LLC, 284 S.W.3d 619, 624 (Mo. Ct. App. 2009) (“MERS never held the promissory note, thus its assignment of the deed of trust to Ocwen separate from the note had no force.”); In re Agard, No. 810-77338, 2011 WL 499959, at *16 (E.D.N.Y. Feb. 10, 2011) (“[W]ithout more, this Court finds that MERS’s ‘nominee’ status and the rights bestowed upon MERS within the Mortgage itself, are insufficient to empower MERS to effectuate a valid assignment of mortgage.”).

The question presented by this case is not whether MERS has authority to foreclose under Georgia law, but whether an assignment of a security deed from MERS to Ocwen empowers Ocwen to foreclose when Ocwen does not hold the note.6

Georgia law authorizes the secured creditor, the holder of the obligation, to exercise a power of sale. See O.C.G.A. §§ 44-14-162 et seq.7 The Georgia Supreme Court has clearly indicated that the right to foreclose lies with the party that holds the indebtedness:

Could there be a more conclusive defense to the foreclosure
than that the party prosecuting it was not the holder of the debt
or demand secured by the mortgage, which he failed to produce
when called on, and offered nothing to show that he controlled
it, or to explain why it was not forthcoming at the trial?

Weems v. Coker, 70 Ga. 746, 749 (1883), cited by Truitt v. Moister, 11 B.R. 15 (Bankr. N.D. Ga. 1981); see also Bowen, 438 S.E.2d at 122; Boaz, 580 S.E.2d at 578; Cummings v. Anderson, 173 B.R. 959, 963 (Bankr. N.D. Ga. 1994) (foreclosure was null and void where the entity foreclosing did not have an actual assignment of the note and security deed), aff’d, 112 F.3d 1172 (11th Cir. 1997); Weston v. Towson, No. 5:04- CV-416, 2006 WL 2246206, at *6 (M.D. Ga. Aug. 4, 2006) (“[T]he holder of the note continues to retain remedies under the security deed so long as the debt evidenced by the note has not been satisfied.”).

Plaintiff has alleged that Ocwen is attempting to foreclose when it is not the holder of the note. (Compl. ¶ 25.) Moreover, in publishing the foreclosure notice, Ocwen did not purport to be acting as agent for the actual holder of the note, but rather asserted that it was acting on its own behalf. (Id. ¶ 61.) These allegations clearly support a claim for wrongful foreclosure.8 The Court need not reach the question of whether an agent for the holder of the debt can carry out a power of sale foreclosure under Georgia law, as Ocwen did not advertise the foreclosure as agent for any disclosed principal. Defendants further argue that there can be no cause of action for wrongful foreclosure here because the foreclosure has not taken place. However, courts have recognized a cause of action for wrongful attempted foreclosure when a foreclosure action was commenced, but not completed, where plaintiffs have shown that a defendant “knowingly published an untrue and derogatory statement concerning the plaintiffs’ financial conditions and that damages were sustained as a direct result.” Sale City Peanut & Milling Co. v. Planters & Citizens Bank, 130 S.E.2d 518, 520 (Ga. Ct. App. 1963).9 Furthermore, Plaintiff is clearly seeking injunctive relief barring Ocwen from foreclosing wrongfully because it allegedly is not the holder of the note. (Compl. ¶¶ 40-43, 63.) A court may enjoin a nonjudicial foreclosure sale in a wrongful foreclosure action where the authority to foreclose is in question. See Atlanta Dwellings, Inc. v. Wright, 527 S.E.2d 854, 856 (Ga. 2000); West v. Koufman, 384 S.E.2d 664, 666 (Ga. 1989); Cotton v. First Nat’l Bank of Gwinnett Co., 220 S.E.2d 132 (Ga. 1975).

Thus, Plaintiff’s claims for injunctive relief (Count II), wrongful foreclosure (Count VI), and negligence (Count VIII) are not subject to dismissal at this time.

D. Remaining Claims

Defendants have not made any argument for dismissal of the claims for intentional infliction of emotional distress (Count VII) or RICO (Count IX) other than their general argument that Ocwen had the right to foreclose, which cannot prevail at this stage for the reasons cited above. Therefore, because Defendants have not challenged these claims, Court does not address them in this Order.

IV. Conclusion

For the foregoing reasons, Defendants’ motion to dismiss [15] is GRANTED IN PART and DENIED IN PART. Plaintiff’s claims for declaratory judgment (Count I), cancellation of the security deed (Count III), slander of title (Count IV), and quiet title (Count V) are DISMISSED. Defendants’ motion to dismiss Plaintiff’s claims for injunctive relief (Count II), wrongful foreclosure (Count VI), negligence (Count VIII), intentional infliction of emotional distress (Count VII), and RICO (Count IX) is DENIED.

IT IS SO ORDERED, this 7th day of July, 2011.

__________________________________
AMY TOTENBERG
UNITED STATES DISTRICT JUDGE

Footnotes:

1 The facts described here are taken from Plaintiff’s complaint [Doc. 1] and presumed true for purposes of resolving Defendants’ motion to dismiss. See infra Part II.

2 Plaintiff exceeded the twenty-five-page limit imposed by the local rules in his response brief. See Local Rule 7.1(D). Because Plaintiff is appearing pro se, he is entitled to some lenience from this Court regarding the formalities of litigation. However, Plaintiff is advised in the future to keep any original briefs to no more than twenty-five pages, and reply briefs to no more than fifteen pages.

3 In Bonner v. Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), the Eleventh Circuit adopted as binding precedent all decisions of the former Fifth Circuit handed down prior to October 1, 1981.

4 The facts in the complaint must be presumed true at this stage. Hill v. White, 321 F.3d at 1335. Defendants assert that the Court may consider documents referenced in the complaint, including the promissory note and the purported assignment of the security deed to Ocwen, without converting this motion to a motion for summary judgment. However, Defendants are attempting to use these documents to dispute a central factual allegation of Plaintiff’s complaint, compared to the securities cases wherein courts have considered on a motion to dismiss documents  required to be filed with the SEC of which the contents, and not the truth, were at issue. See Bryant v. Avado Brands, Inc., 187 F.3d 1271, 1278 (11th Cir. 1989) (“When SEC documents are relevant only to determine what statements or disclosures are actually contained therein, there can be little question as to authenticity, nor can the fact that such statements or disclosures were thus publicly filed be reasonably questioned.”); Oxford Asset Mgmt. Ltd. v. Jahar, 297 F.3d 1182, 1188 (11th Cir. 2002) (documents outside the complaint may only be considered at the motion to dismiss stage to show their contents, not for the truth of matters asserted therein). The Court must therefore assume at this motion to dismiss stage of the proceedings that Ocwen is not the holder of the note, based on the allegations of  Plaintiff’s complaint. (Compl. ¶ 25.) Furthermore, the documents attached to the motion to dismiss do not support anyfactual finding to the contrary, as an assignment of the security deed is not indicative of who holds the note, and the promissory note shows no endorsement to Ocwen.

5 MERS is listed on the original security deed as the grantee of the instrument “as nominee” for the lender and lender’s successor and assigns.

6 Defendants cite O.C.G.A. § 44-14-64 and Redwine v. Frizzell, 190 S.E. 789 (Ga. 1937) to support their argument that the purported assignment of the security deed also transferred the promissory note. However, this statute and Redwine were authored at a time when the promissory note and the security deed where not commonly separated. Neither support the proposition that a party who has never held the promissory note (MERS) could transfer it by an assignment of the security deed.

7 “The security instrument or assignment thereof vesting the secured creditor with title to the security instrument shall be filed prior to the time of sale in the office of the clerk of the superior court of the county in which the real property is located.” O.C.G.A. § 44-14-162(b) (emphasis added). “Notice of the initiation of proceedings to exercise a power of sale in a mortgage, security deed, or other lien contract shall be given to the debtor by the secured creditor no later than 30 days before the date of the proposed foreclosure.” O.C.G.A. § 44-14-162.2(a) (emphasis added).

8 Defendants cite Nicholson v. OneWest Bank, No. 1:10-CV-0795, 2010 WL 2732325 (N.D.Ga. Apr. 20, 2010) for the proposition that MERS has the ability to foreclose even if it does not hold the promissory note. However, in Nicholson the court denied a motion for TRO because the plaintiff in that case failed to carry his burden on a TRO motion to show the likelihood of success on the merits when he failed to overcome the defendant OneWest’s showing that it held both the note and security deed. Id. at *4. Nicholson is therefore inapposite to the facts that must be assumed true herein.

Defendants also cite Trent v. Mortgage Electronic Registration Systems, Inc., 288 Fed. Appx. 571 (11th Cir. 2008) (unpublished) and Mortgage Electronic Registration Systems, Inc. v. Revoredo, 955 So.2d 33 (Fla. Dist. Ct. App.2007). These cases interpret Florida law and therefore are not relevant to the instant case.

9 It is not clear whether Plaintiff can prevail on a claim for wrongful attempted foreclosure, which requires a showing of intentional publication of derogatory and untrue financial information about the complainant. See Sale City Peanut, 130 S.E.2d at 520. Plaintiff does not specify in the complaint whether he was actually in default on the mortgage at the time Ocwen commenced foreclosure proceedings against him or whether a default had been cured through a loan modification. However, to the extent Plaintiff fails to establish the required elements for the tort of attempted wrongful foreclosure, his claim for wrongful foreclosure may proceed as a claim for injunctive relief.

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Homeowner Win: Mortgage Servicers Must Obey GA Law

Homeowner Win: Mortgage Servicers Must Obey GA Law


Abigail C. Field-

Foreclosures are often done in the name of mortgage servicers rather than the person who actually owns the defaulted loan. Fannie Mae, for example, generally requires servicers to foreclose in the servicers’ name rather than Fannie Mae. (The link is to Fannie Mae’s current servicing guidelines; see Section 101 at p. 801-2.) Well, based on this recent opinion, the practice should no longer fly in Georgia, at least if servicers are trying to foreclose without going to court. In addition the many Georgia foreclosures servicers have already completed non-judicially are now in question.

Only Secured Creditors Can Foreclosure Non-Judicially in Georgia

[REALITY CHECK]

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Disabled Man Buys House With Cash, Bank of America Almost Forecloses

Disabled Man Buys House With Cash, Bank of America Almost Forecloses


Here we go…again


Sacramento Bee

Kamal Sharma almost lost his house in a foreclosure auction the other day. The funny thing is: He doesn’t even owe any money on it.

Sharma’s story – an extreme case even in Sacramento’s chaotic real estate market – shows that lenders continue to make foreclosure mistakes despite extensive publicity and promises to fix problems, which include sloppy paperwork and communication breakdowns.

“There are a lot of people that have been wrongly foreclosed upon,” said Kevin Stein, associate director of the San Francisco-based California Reinvestment Coalition.

Continue reading [SACRAMENTO BEE]

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MAX GARDNER | Why Don’t AGs Want to Get to the Bottom of the Mortgage Mess?

MAX GARDNER | Why Don’t AGs Want to Get to the Bottom of the Mortgage Mess?


via Max Gardner

Gretchen Morgenson’s column in the New York Times yesterday points out a connection we should all be making:  the high-speed, no time to think or do things right mindset of the mortgage industry is to blame for a lot of the problems we’re facing today, and that same mindset seems to be controlling the actions of the Attorneys General right now.  Tom Miller, the Iowa Attorney General leading the talks, told us just last week, “We’re going to move as fast as we can.”

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ARE YOU KIDDING? Fed Investigation Can’t Find 1 Homeowner Wrongfully Foreclosed Upon

ARE YOU KIDDING? Fed Investigation Can’t Find 1 Homeowner Wrongfully Foreclosed Upon


Fed Report Finds No Wrongful Foreclosures By Banks, Consumer Advocates Slam Methodology

Shahien Nasiripour
Shahien Nasiripour HuffPost Reporting shahien@huffingtonpost.com

WASHINGTON, D.C. — A months-long investigation into abusive mortgage practices by the Federal Reserve found no wrongful foreclosures, members of the Fed’s Consumer Advisory Council said Thursday.

During a public meeting attended by Fed chairman Ben Bernanke and other regulators, consumer advocates on the panel criticized federal bank regulators for narrowly defining what constitutes a “wrongful foreclosure.” At least one member of the panel voiced concerns that the public would not take the Fed’s findings of improper practices seriously, since the wide-ranging review did not find a single homeowner who was wrongfully foreclosed upon.

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MERS and OCWEN GET CAUGHT IN NEVADA

MERS and OCWEN GET CAUGHT IN NEVADA


On June 23, 2009, MERS substituted MTC Financial Inc., d.b.a. Trustee Corps, as trustee. (See Id., Ex. B.) Trustee Corps recorded a notice of trustee’s sale (“NOS”) on or about September 15, 2009, indicating that it would sell the Property on October 5, 2009, (see Id., Ex. C), but Plaintiff claims to have never received notice of the NOS, (see id. ¶ 63).

The most obvious potential defect in this foreclosure stems from the fact that Trustee Corps was substituted as trustee after it recorded the NOD, but before it recorded the NOS. In Nevada, the power of sale cannot be exercised until one of two particular entities–the beneficiary or the trustee–or an agent thereof, records the NOD. Nev. Rev. Stat. § 107.080(2)(c). Trustee Corps was not such an entity when it recorded the NOD. Thus, unless Trustee Corps can provide evidence indicating that the beneficiary–Taylor–or the trustee–Equity Title–caused Trustee Corps to file the NOD, it may be liable for wrongful foreclosure.
Further complicating matters, some other unusual events occurred prior to the filing

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Posted in chain in title, conflict of interest, conspiracy, CONTROL FRAUD, corruption, deed of trust, discovery, dismissed, foreclosure, foreclosure fraud, foreclosures, MERS, mortgage, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., note, Ocwen, reversed court decision, trustee, trustee sale, TrustsComments (1)

JUDGE SCHACK BLOWS ‘MERS’ & Bank Of New York (BNY) OUT THE DOOR!

JUDGE SCHACK BLOWS ‘MERS’ & Bank Of New York (BNY) OUT THE DOOR!


MERS is an artifice and they are going to blow up!

Read this carefully…Judge Schack knows exactly where this is going and where he is taking it!

Decided on August 25, 2010

Supreme Court, Kings County

The Bank of New York, AS TRUSTEE FOR THE CERTIFICATEHOLDERS CWALT, INC. ALTERNATIVE LOAN TRUST 2006-OC1 MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-OC1, Plaintiff,

against

Denise Mulligan, BEVERLY BRANCHE, et. al., Defendants.

Plaintiff:
McCabe Weisberg Conway PC
Jason E. Brooks, Esq.
New Rochelle NY

Defendant:
No Appearances.

Arthur M. Schack, J.

Plaintiff’s renewed application, upon the default of all defendants, for an order of reference for the premises located at 1591 East 48th Street, Brooklyn, New York (Block 7846, Lot 14, County of Kings) is denied with prejudice. The complaint is dismissed. The notice of pendency filed against the above-named real property is cancelled.

In my June 3, 2008 decision and order in this matter, I granted leave to plaintiff, THE BANK OF NEW YORK, AS TRUSTEE FOR THE CERTIFICATEHOLDERS CWALT, INC. ALTERNATIVE LOAN TRUST 2006-OC1 MORTGAGE PASS-THROUGH CERTIFICATES, [*2]SERIES 2006-OC1 (BNY), to renew its application for an order of reference within forty-five (45) days, until July 18, 2008, if it complied with three conditions. However, plaintiff did not make the instant motion until May 4, 2009, 335 days after June 3, 2008, and failed to offer any excuse for its lateness. Therefore, the instant motion is 290 days, almost ten months, late. Further, the instant renewed motion failed to present the three affidavits that this Court ordered plaintiff BNY to present with its renewed motion for an order of reference: (1) an affidavit of facts either by an officer of plaintiff BNY or someone with a valid power of attorney from plaintiff BNY and personal knowledge of the facts; (2) an affidavit from Ely Harless describing his employment history for the past three years, because Mr. Harless assigned the instant mortgage as Vice President of MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. (MERS) and then executed an affidavit of merit for assignee BNY as Vice President of BNY’s alleged attorney-in-fact without any power of attorney; and, (3) an affidavit from an officer of plaintiff BNY explaining why it purchased the instant nonperforming loan from MERS, as nominee for DECISION ONE MORTGAGE COMPANY, LLC (DECISION ONE).

Moreover, after I reviewed the papers filed with this renewed motion for an order of reference and searched the Automated City Register Information System (ACRIS) website of the Office of the City Register, New York City Department of Finance, I discovered that plaintiff BNY lacked standing to pursue the instant action for numerous reasons. Therefore, the instant action is dismissed with prejudice.

Background

Defendant DENISE MULLIGAN (MULLIGAN) borrowed $392,000.00 from

DECISION ONE on October 28, 2005. The mortgage to secure the note was recorded by MERS, “acting solely as a nominee for Lender [DECISION ONE]” 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, New York City Department of Finance, on February 6, 2006, at City Register File Number (CRFN) 2006000069253.

Defendant MULLIGAN allegedly defaulted in her mortgage loan payments with her May 1, 2007 payment. Subsequently, plaintiff BNY commenced the instant action, on August 9, 2007, alleging in ¶ 8 of the complaint, and again in ¶ 8 of the August 16, 2007 amended complaint, that “Plaintiff [BNY] is the holder of said note and mortgage. said mortgage was assigned to Plaintiff, by Assignment of Mortgage to be recorded in the Office of the County Clerk of Kings County [sic].” As an aside, plaintiff’s counsel needs to learn that mortgages in New York City are not recorded in the Office of the County Clerk, but in the Office of the City Register of the City of New York. However, the instant mortgage and note were not assigned to plaintiff BNY until October 9, 2007, 61 days subsequent to the commencement of the instant action, by MERS, “as nominee for Decision One,” and executed by Ely Harless, Vice President of MERS. This assignment was recorded on October 24, 2007, in the Office of the City Register of the City of New York, at CRFN 2007000537531.

I denied the original application for an order of reference, on June 3, 2008, with leave to renew, because assignor Ely Harless also executed the March 20, 2008-affidavit of merit as Vice President and “an employee of Countrywide Home Loans, Inc., attorney-in-fact for Countrywide Home Loans, Inc.” The original application for an order of reference did not present any power of attorney from plaintiff BNY to Countrywide Home Loans, Inc. Also, the Court pondered how [*3]Countrywide Home Loans, Inc. could be its own an attorney-fact?

In my June 3, 2008 decision and order I noted that Real Property Actions and Proceedings Law (RPAPL) § 1321 allows the Court in a foreclosure action, upon the default of defendant or defendant’s admission of mortgage payment arrears, to appoint a referee “to compute the amount due to the plaintiff” and plaintiff BNY’s application for an order of reference was a preliminary step to obtaining a default judgment of foreclosure and sale. (Home Sav. Of Am., F.A. v Gkanios, 230 AD2d 770 [2d Dept 1996]). However, plaintiff BNY failed to meet the clear requirements of CPLR § 3215 (f) for a default judgment, which states:

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

Plaintiff BNY failed to submit “proof of the facts” in “an affidavit made by the party.” (Blam v Netcher, 17 AD3d 495, 496 [2d Dept 2005]; Goodman v New York City Health & Hosps. Corp. 2 AD3d 581[2d Dept 2003]; Drake v Drake, 296 AD2d 566 [2d Dept 2002]; Parratta v McAllister, 283 AD2d 625 [2d Dept 2001]; Finnegan v Sheahan, 269 AD2d 491 [2d Dept 2000]; Hazim v Winter, 234 AD2d 422 [2d Dept 1996]). Instead, plaintiff BNY submitted an affidavit of merit and amount due by Ely Harless, “an employee of Countrywide Home Loans, Inc.” and failed to submit a valid power of attorney for that express purpose. Also, I required that if plaintiff renewed its application for an order of reference and provided to the Court a valid power of attorney, that if the power of attorney refers to a servicing agreement, the Court needs a properly offered copy of the servicing agreement to determine if the servicing agent may proceed on behalf of plaintiff. (EMC Mortg. Corp. v Batista, 15 Misc 3d 1143 (A), [Sup Ct, Kings County 2007]; Deutsche Bank Nat. Trust Co. v Lewis, 14 Misc 3d 1201 (A) [Sup Ct, Suffolk County 2006]).

I granted plaintiff BNY leave to renew its application for an order of reference within forty-five (45) days of June 3, 2008, which would be July 18, 2008. For reasons unknown to the Court, plaintiff BNY made the instant motion to renew its application for an order of reference on May 4, 2009, 290 days late. Plaintiff’s counsel, in his affirmation in support of the renewed motion, offers no explanation for his lateness and totally ignores this issue.

Further, despite the assignment by MERS, as nominee for DECISION ONE, to plaintiff BNY occurring 61 days subsequent to the commencement of the instant action, plaintiff’s counsel claims, in ¶ 17 of his affirmation in support, that “[s]aid assignment of mortgage [by MERS, as nominee for DECISION ONE to BNT] was drafted for the convenience of the court in establishing the chain of ownership, but the actual assignment and transfer had previously occurred by delivery.” The alleged proof presented of physical delivery of the subject MULLIGAN mortgage is a computer printout [exhibit G of motion], dated April 30, 2009, from [*4]Countrywide Financial, which plaintiff’s counsel calls a “Closing Loan Schedule,” and claims, in ¶ 21 of his affirmation in support, that this “closing loan schedule is the mortgage loan schedule displaying every loan held by such trust at the close date for said trust at the end of January 2006. The closing loan schedule is of public record and demonstrates that the Plaintiff was in possession of the note and mortgage about nineteen (19) months prior to the commencement of this action.” There is an entry on line 2591 of the second to last page of the printout showing account number 1232268089, which plaintiff’s counsel, in ¶ 22 of his affirmation in support, alleges is the subject mortgage. Plaintiff’s counsel asserts, in ¶ 23 of his affirmation in support, that “[t]he annexed closing loan schedule suffices to proceed in granting Plaintiff’s Order of Reference in this matter proving possession prior to any default.” This claim is ludicrous. The computer printout, printed on April 30, 2009, just prior to the making of the instant motion, has no probative value with respect to whether physical delivery of the subject mortgage was made to plaintiff BNY prior to the August 9, 2007 commencement of the instant action.

Further, even if the mortgage was delivered to BNY prior to the August 9, 2007 commencement of the instant action, this claim is in direct contradiction to plaintiff’s claim previously mentioned in ¶ 8 of both the complaint and the amended complaint, that “Plaintiff [BNY] is the holder of said note and mortgage. said mortgage was assigned to Plaintiff, by Assignment of Mortgage to be recorded in the Office of the County Clerk of Kings County [sic].” Both ¶’s 8 allege that the assignment of the subject mortgage took place prior to August 9, 2007 and the recording would subsequently take place. The only reality for the Court is that the assignment of the subject mortgage took place 61 days subsequent to the commencement of the action on October 9, 2007 and the assignment was recorded on October 24, 2007.

Moreover, plaintiff’s counsel alleges, in ¶ 18 of his affirmation in support, that “[p]ursuant to a charter between Mortgage Electronic Registrations Systems, Inc. ( MERS’) and Decision One Mortgage Company, LLC, all officers of Decision One Mortgage Company, LLC, a member of MERS, are appointed as assistant secretaries and vice presidents of MERS, and as such are authorized” to assign mortgage loans registered on the MERS System and execute documents related to foreclosures. ¶ 18 concludes with “See Exhibit F.” None of this appears in exhibit F. Exhibit F is a one page power of attorney from “THE BANK OF NEW YORK, as Trustee” pursuant to unknown pooling and servicing agreements appointing “Countrywide Home Loans Servicing LP and its authorized officers (collectively CHL Servicing’)” as its “attorneys-in-fact and authorized agents” for foreclosures “in connection with the transactions contemplated in those certain Pooling and Servicing Agreements.” The so-called “charter” between MERS and DECISION ONE was not presented to the Court in any exhibits attached to the instant motion.

Further, attached to the instant renewed motion [exhibit D] is an affidavit of merit

by Keri Selman, dated August 23, 2007 [47 days before the assignment to BNY], in which Ms. Selman claims to be “a foreclosure specialist of Countrywide Home Loans, Inc. Servicing agent for BANK OF NEW YORK, AS TRUSTEE FOR THE CERTIFICATEHOLDERS CWALT, INC. ALTERNATIVE LOAN TRUST 2006-OC1 MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-OC1 . . . I make this afidavit upon personal knowledge based on books and records of Bank of New York in my possession or subject to my control [sic]” Countrywide Home Loans, Inc. is not Countrywide Home Loans Servicing LP, referred to in the power of attorney attached to the renewed motion [exhibit F]. Moreover, plaintiff failed to [*5]present to the Court any power of attorney authorizing Ms. Selman to execute for Countrywide Home Loans, Inc. her affidavit on behalf of plaintiff BNY. Also, Ms. Selman has a history of executing documents presented to this Court while wearing different corporate hats. In Bank of New York as Trustee for Certificateholders CWABS, Inc. Asset-Backed Certificates, Series 2006-22 v Myers (22 Misc 3d 1117 [A] [Sup Ct, Kings County 2009], in which I issued a decision and order on February 3, 2009, Ms. Selman assigned the subject mortgage on June 28, 2008 as Assistant Vice President of MERS, nominee for Homebridge Mortgage Bankers Corp., and then five days later executed an affidavit of merit as Assistant Vice President of plaintiff BNY. I observed, in this decision and order, at 1-2, that:

Ms. Selman is a milliner’s delight by virtue of the number of hats she wears. In my November 19, 2007 decision and order (BANK OF NEW YORK A TRUSTEE FOR THE NOTEHOLDERS OF CWABS, INC. ASSET-BACKED NOTES, SERIES 2006-SD2 v SANDRA OROSCONUNEZ, et. al. [Index No., 32052/07]),

I observed that:

Plaintiff’s application is the third application for an order of reference received by me in the past several days that contain an affidavit from Keri Selman. In the instant action, she alleges to be an Assistant Vice President of the Bank of New York. On November 16, 2007, I denied an application for an order of reference (BANK OF NEW YORK A TRUSTEE FOR THE CERTIFICATEHOLDERS OF CWABS, INC. ASSET-BACKED CERTIFICATES, SERIES 2006-8 v JOSE NUNEZ, et. al., Index No. 10457/07), in which Keri Selman, in her affidavit of merit claims to be “Vice President of  COUNTRYWIDE HOME LOANS, Attorney in fact for BANK OF NEW YORK.” The Court is concerned that Ms. Selman might be engaged in a subterfuge, wearing various corporate hats. Before granting an application for an order of reference, the Court requires an affidavit from Ms. Selman describing her employment history for the past three years. This Court has not yet received any affidavit from Ms. Selman describing her employment history, whether it is with MERS, BNY, COUNTRYWIDE HOME LOANS, or any other entity. [*6]

Further, the Court needs to address the conflict of interest in the June 20, 2008 assignment by Ms. Selman to her alleged employer, BNY.

I am still waiting for Ms. Selman’s affidavit to explain her tangled employment relationships. Interestingly, Ms. Selman, as “Assistant Vice President of MERS,” nominee for “America’s Wholesale Lender,” is the assignor of another mortgage to plaintiff BNY in Bank of New York v Alderazi (28 Misc 3d 376 [Sup Ct, Kings County 2010]), which I further cite below.

It is clear that plaintiff BNY failed to provide the Court with: an affidavit of merit by an officer of plaintiff BNY or someone with a valid power of attorney from BNY; an affidavit from Ely Harless, explaining his employment history; and, an explanation from BNY of why it purchased a nonperforming loan from MERS, as nominee of DECISION ONE. Moreover, plaintiff BNY did not own the subject mortgage and note when the instant case commenced. Even if plaintiff BNY owned the subject mortgage and note when the case commenced, MERS lacked the authority to assign the subject MULLIGAN mortgage to BNY, as will be explained further. Plaintiff’s counsel offers a lame and feeble excuse for not complying with my June 3, 2008 decision and order, in ¶ 23 of his affirmation in support, claiming that “[t]he affidavits requested in Honorable Arthur M. Schack’s Decision and Order should not be required, given the annexed closing loan schedule.”

Plaintiff BNY lacked standing

The instant action must be dismissed because plaintiff BNY lacked standing to bring this action on August 9, 2007, the day the action commenced. “Standing to sue is critical to the proper functioning of the judicial system. It is a threshold issue. If standing is denied, the pathway to the courthouse is blocked. The plaintiff who has standing, however, may cross the threshold and seek judicial redress.” (Saratoga County Chamber of Commerce, Inc. v Pataki, 100 NY2d 801 812 [2003], cert denied 540 US 1017 [2003]). Professor Siegel (NY Prac, § 136, at 232 [4d ed]), instructs that:

[i]t is the law’s policy to allow only an aggrieved person to bring a lawsuit . . . A want of “standing to sue,” in other words, is just another way of saying that this particular plaintiff is not involved in a genuine controversy, and a simple syllogism takes us from there to a “jurisdictional”

dismissal: (1) the courts have jurisdiction only over controversies; (2) a plaintiff found to lack “standing”is not involved in a controversy; and (3) the courts therefore have no jurisdiction of the case when such a plaintiff purports to bring it.

“Standing to sue requires an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant’s request.” (Caprer v Nussbaum (36 AD3d 176, 181 [2d Dept 2006]). If a plaintiff lacks standing to sue, the plaintiff may not proceed in the action. (Stark v Goldberg, 297 AD2d 203 [1st Dept 2002]). [*7]

Plaintiff BNY lacked standing to foreclose on the instant mortgage and note when this action commenced on August 7, 2007, the day that BNY filed the summons, complaint and notice of pendency with the Kings County Clerk, because it did not own the mortgage and note that day. The instant mortgage and note were assigned to BNY, 61 days later, on October 7, 2007. The Court, in Campaign v Barba (23 AD3d 327 [2d Dept 2005]), instructed that “[t]o establish a prima facie case in an action to foreclose a mortgage, the plaintiff must establish the existence of the mortgage and the mortgage note, ownership of the mortgage, and the defendant’s default in payment [Emphasis added].” (See Witelson v Jamaica Estates Holding Corp. I, 40 AD3d 284 [1st Dept 2007]; Household Finance Realty Corp. of New York v Wynn, 19 AD3d 545 [2d Dept 2005]; Sears Mortgage Corp. v Yahhobi, 19 AD3d 402 [2d Dept 2005]; Ocwen Federal Bank FSB v Miller, 18 AD3d 527 [2d Dept 2005]; U.S. Bank Trust Nat. Ass’n Trustee v Butti, 16 AD3d 408 [2d Dept 2005]; First Union Mortgage Corp. v Fern, 298 AD2d 490 [2d Dept 2002]; Village Bank v Wild Oaks, Holding, Inc., 196 AD2d 812 [2d Dept 1993]).

Assignments of mortgages and notes are made by either written instrument or the assignor physically delivering the mortgage and note to the assignee.

“Our courts have repeatedly held that a bond and mortgage may be transferred by delivery without a written instrument of assignment.” (Flyer v Sullivan, 284 AD 697, 699 [1d Dept 1954]). The written October 7, 2007 assignment by MERS, as nominee for DECISION ONE, to BNY is clearly 61 days after the commencement of the action. Plaintiff’s BNY’s claim that the gobblygook computer printout it offered in exhibit G is evidence of physical delivery of the mortgage and note prior to commencement of the action is not only nonsensical, but flies in the face of the complaint and amended complaint, which both clearly state in ¶ 8 that “Plaintiff [BNY] is the holder of said note and mortgage. said mortgage was assigned to Plaintiff, by Assignment of Mortgage to be recorded in the Office of the County Clerk of Kings County [sic].” Plaintiff BNY did not own the mortgage and note when the instant action commenced on August 7, 2007.

[A] retroactive assignment cannot be used to confer standing upon the assignee in a foreclosure action commenced prior to the execution of an assignment.

(Wells Fargo Bank, N.A. v Marchione, 69 AD3d 204, 210 [2d Dept 2009]). The Marchione Court relied upon LaSalle Bank Natl. Assoc. v Ahearn (59 AD3d 911 [3d Dept 2009], which instructed, at 912, “[n]otably, foreclosure of a mortgage may not be brought by one who has no title to it’ (Kluge v Fugazy, 145 AD2d 537 [2d Dept 1988]) and an assignee of such a mortgage does not have standing unless the assignment is complete at the time the action is commenced).” (See U.S. Bank, N.A. v Collymore, 68 AD3d 752 [2d Dept 2009]; Countrywide Home Loans, Inc. v Gress, 68 AD3d 709 [2d Dept 2009]; Citgroup Global Mkts. Realty Corp. v Randolph Bowling, 25 Misc 3d 1244 [A] [Sup Ct, Kings County 2009]; Deutsche Bank Nat. Trust Company v Abbate, 25 Misc 3d 1216 [A] [Sup Ct, Richmond County 2009]; Indymac Bank FSB v Boyd, 22 Misc 3d 1119 [A] [Sup Ct, Kings County 2009]; Credit-Based Asset Management and Securitization, LLC v Akitoye,22 Misc 3d 1110 [A] [Sup Ct, Kings County Jan. 20, 2009]; Deutsche Bank Trust Co. Americas v Peabody, 20 Misc 3d 1108 [A][Sup Ct, Saratoga County 2008]).

The Appellate Division, First Department, citing Kluge v Fugazy, in Katz v East-Ville Realty Co., (249 AD2d 243 [1d Dept 1998]), instructed that “[p]laintiff’s attempt to foreclose upon a mortgage in which he had no legal or equitable interest was without foundation in law or [*8]fact.” Therefore, with plaintiff BNY not having standing, the Court lacks jurisdiction in this foreclosure action and the instant action is dismissed with prejudice.

MERS had no authority to assign the subject mortgage and note

Moreover, MERS lacked authority to assign the subject mortgage. The subject DECISION ONE mortgage, executed on October 28, 2005 by defendant MULLIGAN, clearly states on page 1 that “MERS is a separate corporation that is acting solely as a nominee for Lender [DECISION ONE] and LENDER’s successors and assigns . . . FOR PURPOSES OF RECORDING THIS MORTGAGE, MERS IS THE MORTGAGEE OF RECORD.”

The word “nominee” is defined as “[a] person designated to act in place of another, usu. in a very limited way” or “[a] party who holds bare legal title for the benefit of others.” (Black’s Law Dictionary 1076 [8th ed 2004]). “This definition suggests that a nominee possesses few or no legally enforceable rights beyond those of a principal whom the nominee serves.” (Landmark National Bank v Kesler, 289 Kan 528, 538 [2009]). The Supreme Court of Kansas, in Landmark National Bank, 289 Kan at 539, observed that:

The legal status of a nominee, then, depends on the context of the relationship of the nominee to its principal. Various courts have interpreted the relationship of MERS and the lender as an agency relationship. See In re Sheridan, 2009 WL631355, at *4 (Bankr. D.

Idaho, March 12, 2009) (MERS “acts not on its own account. Its capacity is representative.”); Mortgage Elec. Registrations Systems, Inc. v Southwest, 2009 Ark. 152 ___, ___SW3d___, 2009 WL 723182 (March 19, 2009) (“MERS, by the terms of the deed of trust, and its own stated purposes, was the lender’s agent”); La Salle Nat. Bank v Lamy, 12 Misc 3d 1191 [A], at *2 [Sup Ct, Suffolk County 2006]) . . .

(“A nominee of the owner of a note and mortgage may not effectively assign the note and mortgage to another for want of an ownership interest in said note and mortgage by the nominee.”)

The New York Court of Appeals in MERSCORP, Inc. v Romaine (8 NY3d 90 [2006]), explained how MERS acts as the agent of mortgagees, holding at 96:

In 1993, the MERS system was created by several large participants in the real estate mortgage industry to track ownership interests in residential mortgages. Mortgage lenders and other entities, known as MERS members, subscribe to the MERS system and pay annual fees for the electronic processing and tracking of ownership and transfers of mortgages. Members contractually agree to appoint [*9] MERS to act as their common agent on all mortgages they register in the MERS system. [Emphasis added]

Thus, it is clear that MERS’s relationship with its member lenders is that of agent with the lender-principal. This is a fiduciary relationship, resulting from the manifestation of consent by one person to another, allowing the other to act on his behalf, subject to his control and consent. The principal is the one for whom action is to be taken, and the agent is the one who acts.It has been held that the agent, who has a fiduciary relationship with the principal, “is a party who acts on behalf of the principal with the latter’s express, implied, or apparent authority.” (Maurillo v Park Slope U-Haul, 194 AD2d 142, 146 [2d Dept 1992]). “Agents are bound at all times to exercise the utmost good faith toward their principals. They must act in accordance with the highest and truest principles of morality.” (Elco Shoe Mfrs. v Sisk, 260 NY 100, 103 [1932]). (See Sokoloff v Harriman Estates Development Corp., 96 NY 409 [2001]); Wechsler v Bowman, 285 NY 284 [1941]; Lamdin v Broadway Surface Advertising Corp., 272 NY 133 [1936]). An agent “is prohibited from acting in any manner inconsistent with his agency or trust and is at all times bound to exercise the utmost good faith and loyalty in the performance of his duties.” (Lamdin, at 136).

Thus, in the instant action, MERS, as nominee for DECISION ONE, is an agent of DECISION ONE for limited purposes. It only has those powers given to it and authorized by its principal, DECISION ONE. Plaintiff BNY failed to submit documents authorizing MERS, as nominee for DECISION ONE, to assign the subject mortgage to plaintiff BNY. Therefore, even if the assignment by MERS, as nominee for DECISION ONE, to BNY was timely, and it was not, MERS lacked authority to assign the MULLIGAN mortgage, making the assignment defective. Recently, in Bank of New York v Alderazi, 28 Misc 3d at 379-380, my learned Kings County Supreme Court colleague, Justice Wayne Saitta explained that:

A party who claims to be the agent of another bears the burden of proving the agency relationship by a preponderance of the evidence (Lippincott v East River Mill & Lumber Co., 79 Misc 559 [1913]) and “[t]he declarations of an alleged agent may not be shown for the purpose of proving the fact of agency.” (Lexow & Jenkins, P.C. v Hertz Commercial Leasing Corp., 122 AD2d 25 [2d Dept 1986]; see also Siegel v Kentucky Fried Chicken of Long Is. 108 AD2d 218 [2d Dept 1985]; Moore v Leaseway Transp/ Corp., 65 AD2d 697 [1st Dept 1978].) “[T]he acts of a person assuming to be the representative of another are not competent to prove the agency in the absence of evidence tending to show the principal’s knowledge of such acts or assent to them.” (Lexow & Jenkins, P.C. v Hertz Commercial Leasing Corp., 122 AD2d at 26, quoting 2 NY Jur 2d, Agency and Independent Contractors § 26). [*10]

Plaintiff has submitted no evidence to demonstrate that the original lender, the mortgagee America’s Wholesale Lender, authorized MERS to assign the secured debt to plaintiff [the assignment, as noted above, executed by the multi-hatted Keri Selman].

In the instant action, MERS, as nominee for DECISION ONE, not only had no authority to assign the MULLIGAN mortgage, but no evidence was presented to the Court to demonstrate DECISION ONE’s knowledge or assent to the assignment by MERS to plaintiff BNY.

Cancellation of subject notice of pendency

The dismissal with prejudice 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 Natassi, 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 [*11]dismissal of the instant complaint must result in the mandatory cancellation of plaintiff BNY’s notice of pendency against the property “in the exercise of the inherent power of the court.”

Conclusion

Accordingly, it is ORDERED, that the renewed motion of plaintiff, THE BANK OF NEW YORK, AS TRUSTEE FOR THE CERTIFICATEHOLDERS CWALT, INC. ALTERNATIVE LOAN TRUST 2006-OC1 MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-OC1, for an order of reference, for the premises located at 1591 East 48th Street, Brooklyn, New York (Block 7846, Lot 14, County of Kings), is denied with prejudice; and it is further ORDERED, that the instant action, Index Number 29399/07, is dismissed with prejudice; and it is further ORDERED that the Notice of Pendency in this action, filed with the Kings County Clerk on August 9, 2007, by plaintiff, THE BANK OF NEW YORK, AS TRUSTEE FOR THE CERTIFICATE HOLDERS CWALT, INC. ALTERNATIVE LOAN TRUST 2006-OC1 MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-OC1, to foreclose a mortgage for real property located at 1591 East 48th Street, Brooklyn, New York (Block 7846, Lot 14, County of Kings), is cancelled.

This constitutes the Decision and Order of the Court.

ENTER

________________________________HON. ARTHUR M. SCHACK

J. S. C.

~

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Posted in bank of new york, chain in title, concealment, conflict of interest, conspiracy, CONTROL FRAUD, corruption, dismissed, Economy, Ely Harless, foreclosure, foreclosure fraud, foreclosures, forgery, judge arthur schack, lawsuit, MERS, MERSCORP, mortgage, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., note, Real Estate, robo signers, securitization, servicers, stopforeclosurefraud.com, Wall StreetComments (3)

FRAUD on the COURT…”WAMU, CHASE AND FISHMAN & SHAPIRO” DISMISSED WITH PREJUDICE!

FRAUD on the COURT…”WAMU, CHASE AND FISHMAN & SHAPIRO” DISMISSED WITH PREJUDICE!


VIA: ForeclosureHamlet & 4closureFraud

Dismissed With PREJUDICE!

Court finds convincing evidence that Wamu, Chase and Fishman & Shapiro committed fraud on this court!

JP MORGAN V. POCOPANNI DUVAL, COUNTY FLORIDA CASE NO.: 16-2008-CA-3989


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Posted in concealment, conspiracy, CONTROL FRAUD, corruption, ctx mortgage, ex parte, fannie mae, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, jpmorgan chase, reversed court decision, shapiro & fishman paComments (4)

NEVADA is on a ROLL! ALOUA v. AURORA LOAN SERVICES, LLC, Dist. Court, D. Nevada 2010

NEVADA is on a ROLL! ALOUA v. AURORA LOAN SERVICES, LLC, Dist. Court, D. Nevada 2010


PIA MARIE T. CORDERO ALOUA, Plaintiff,
v.
AURORA LOAN SERVICES, LLC; LEHMAN BROTHERS BANK, FSB; QUALITY LOAN SERVICE CORPORATION; Does I-X, inclusive, Defendants.

Case No. 2:09-CV-00207-KJD-RJJ.

United States District Court, D. Nevada.

June 23, 2010.

ORDER

KENT J. DAWSON, District Judge. Currently before the Court is Defendants Aurora Loan Services, LLC, and Lehman Brothers Bank, FSB’s Motion to Dismiss (#15).[1] Plaintiff Pia Marie T. Cordero Aloua filed a Response and Opposition (#18) to Defendants’ Motion on October 5, 2009, to which Defendants filed a Reply (#19) on October 20, 2009.

I. Background

Plaintiff financed the real property located at 116 Peachy Court in Las Vegas, Nevada (“subject property”) on or about the 5th day of July, 2007. At that time, Plaintiff executed an adjustable rate loan (“first loan”) in the principal amount of $768,987.00 and a fixed-rate balloon loan (“second loan”) in the principal amount of $144,185.00. Lehman Brothers, which changed its name to Aurora Bank on April 24, 2009, was the original lender, and Aurora Loan Services (“ALS”) was appointed as the loan servicer on August 16, 2007. Plaintiff’s first loan, which was placed in the sub-prime category, was financed based upon a yearly adjustable interest rate of 9.375% and was to be paid to Lehman Brothers by monthly payments beginning in September 2007. Plaintiff avers that the sub-prime designation of her loan, which led to higher fees and interest, was in error because Plaintiff had verifiable income and a credit score sufficient to qualify for the traditional prime rate. Defendants aver that Plaintiff defaulted on her loans in December 2007, leading to foreclosure proceedings which were ultimately completed on July 14, 2008 through Quality Loan Service Corporation (“QLS”), the appointed substitute trustee. ALS claims to have acquired title to the subject property through said foreclosure proceedings. Plaintiff avers, however, that she did not default on her loans and that the foreclosure sale was carried out without serving the required notices and without giving Plaintiff the appropriate opportunity to avert the sale. On January 7, 2009, Plaintiff commenced this action in the District Court for Clark County, Nevada. The action was removed to this Court on February 2, 2009 on the basis of federal question and diversity jurisdiction. (See #1.) On September 2, 2009, Plaintiff filed an Amended Complaint against all Defendants, alleging the following causes of action: (1) intentional misrepresentation; (2) negligence per se under the federal Real Estate Settlement Procedures Act (“RESPA”) and the federal Truth in Lending Act (“TILA”); (3) negligence; (4) rescission under TILA; (5) wrongful foreclosure; and (6) quiet title. On September 21, 2009, Defendants filed a Motion to Dismiss the First Amended Complaint (#15). For the reasons discussed below, the Court grants the Motion to Dismiss in part and denies it in part.

II. Discussion

A. Motion to Dismiss

A court may dismiss a plaintiff’s complaint for “failure to state a claim upon which relief can be granted.” FED. R. CIV. P. 12(b)(6). A properly pled complaint must provide “a short and plain statement of the claim showing that the pleader is entitled to relief.” FED. R. CIV. P. 8(a)(2); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). While Rule 8 does not require detailed factual allegations, it demands “more than labels and conclusions” or a “formulaic recitation of the elements of a cause of action.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). “Factual allegations must be enough to rise above the speculative level.” Twombly, 550 U.S. at 555. Thus, to survive a motion to dismiss, a complaint must contain sufficient factual matter to “state a claim to relief that is plausible on its face.” Iqbal, 129 S. Ct. at 1949 (internal citation omitted). In Iqbal, the Supreme Court recently clarified the two-step approach district courts are to apply when considering motions to dismiss. First, the Court must accept as true all well-pled factual allegations in the complaint; however, legal conclusions are not entitled to the assumption of truth. Id. at 1950. Mere recitals of the elements of a cause of action, supported only by conclusory statements, do not suffice. Id. at 1949. Second, the Court must consider whether the factual allegations in the complaint allege a plausible claim for relief. Id. at 1950. A claim is facially plausible when the plaintiff’s complaint alleges facts that allow the court to draw a reasonable inference that the defendant is liable for the alleged misconduct. Id. at 1949. Where the complaint does not permit the court to infer more than the mere possibility of misconduct, the complaint has “alleged—but not shown—that the pleader is entitled to relief.” Id. (internal quotation marks omitted). When the claims in a complaint have not crossed the line from conceivable to plausible, plaintiff’s complaint must be dismissed. Twombly, 550 U.S. at 570.

III. Analysis

A. Intentional Misrepresentation

Plaintiff alleges Defendants knowingly made false misrepresentations to Plaintiff, upon which Plaintiff justifiably relied to her detriment. To state a claim for fraudulent misrepresentation in Nevada, a plaintiff must allege that (1) defendant made a false representation; (2) defendant knew or believed the representation to be false; (3) defendant intended to induce plaintiff to rely on the misrepresentation; and (4) plaintiff suffered damages as a result of his reliance. Bartmettler v. Reno Air, Inc., 956 P.2d 1382, 1386 (Nev. 1998). Misrepresentation is a form of fraud where a false representation is relied on in fact. See Pacific Maxon, Inc. v. Wilson, 96 Nev. 867, 871 (Nev. 1980). Fraud has a stricter pleading standard under Rule 9, which requires a party to “state with particularity the circumstances constituting fraud.” FED. R. CIV. P. 9(b). Pleading fraud with particularity requires “an account of the time, place, and specific content of the false representations, as well as the identities of the parties of the misrepresentations.” Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007); see also Morris v. Bank of Nev., 886 P.2d 454, 456 n.1 (Nev. 1994). The Ninth Circuit has held, however, that the stricter pleading requirements of Rule 9(b) “may be relaxed with respect to matters within the opposing party’s knowledge,” reasoning that “[i]n such situations, plaintiffs can not (sic) be expected to have personal knowledge of the relevant facts.” Neubronner v. Milken, 6 F.3d 666, 672 (9th Cir. 1993) (citing Wool v. Tandem Computers, Inc., 818 F.2d 1433, 1439 (9th Cir. 1987); Moore v. Kayport Package Express, Inc., 885 F.2d 531, 540 (9th Cir. 1989). Even under this relaxed version of Rule 9(b), however, “a plaintiff who makes allegations on information and belief must state the factual basis for the belief.” Id. Here, Plaintiff alleges that Defendants knowingly concealed the true nature of her credit score and defrauded her by placing her loan in the sub-prime category to charge higher commissions. Plaintiff also alleges, among other things, that Defendants misrepresented the fees charged and paid in association with her loan, as well as her eligibility to participate in a loan modification program. Taking these assertions as true, the Court finds Plaintiff has sufficiently stated a claim for fraud: Plaintiff alleges that Defendants intentionally misrepresented information to her, that she relied on these representations, and that she was damaged as a result.

B. Negligence per se

To state a claim for negligence per se, a plaintiff must allege that (1) he or she belongs to a class of persons that a statute was intended to protect; (2) defendant violated the relevant statute; (3) plaintiff’s injuries are the type against which the statute was intended to protect; (4) the violation was the legal cause of plaintiff’s injury; and (5) plaintiff suffered damages. See Anderson v. Baltrusaitus, 944 P.2d 797, 799 (Nev. 1997). Whether a particular statute establishes a standard of care in a negligence action is a question of law. Vega v. E. Courtyard Assocs., 24 P.3d 219, 221 (Nev. 2001). Plaintiff claims Defendants violated provisions of TILA, 15 U.S.C. § 1601, et seq., and RESPA, 12 U.S.C. § 2601, et seq., dealing with a lender’s disclosure duties. Defendants argue that the TILA claim is time barred because the statute of limitations has run. Section 1640(e) of TILA requires that claims be brought within one year of the date of the loan transaction. Interpreting this provision, the Ninth Circuit has held that while as a general rule the limitations period runs from the date the transaction is consummated, the doctrine of equitable tolling may, when appropriate, toll the limitations period until the borrower has had a reasonable opportunity to discover the facts giving rise to a TILA claim. King v. California, 784 F.2d 910, 915 (9th Cir. 1986). The Ninth Circuit has also held that the equitable tolling analysis is a factual one: the finder of fact must determine whether equitable tolling will prevent unjust results or maintain the integrity of the relevant statute. Id. Because these factual questions are yet to be resolved, the Court is unable to say at this stage in the litigation whether the statute of limitations has run. Therefore, Defendants’ Motion to Dismiss Plaintiff’s TILA claim on statute of limitations grounds is denied. Moreover, after reviewing the Complaint, the Court finds Plaintiff has adequately stated a TILA claim against Defendants. Plaintiff alleges Defendants (1) failed to disclose the identity of persons and entities who share the service fees and other charges for her loans; (2) failed to disclose the percentage of the loan amount paid to the nominal lender; and (3) failed to disclose relevant credit terms to enable Plaintiff to compare market rates and prevent unfair credit practices. (Dkt. #14, Compl. ¶ 26-28.) Taking these assertions as true, Plaintiff has stated a viable claim for relief under TILA. Plaintiff has failed, however, to sufficiently state a claim for negligence per se under RESPA. 12 U.S.C. § 2601, et seq. As a general rule, RESPA does not create an express or implied private right of action. Collins v. FMHA-USDA, 105 F.3d 1366, 1367-68 (11th Cir. 1997); Bamba v. Resource Bank, 568 F. Supp. 2d 32, 34-35 (D.D.C. 2008); Morrison v. Brookstone, 415 F. Supp. 2d 801, 806 (S.D. Ohio 2005); McWhorter v. Ford Consumer Fin. Co., 33 F. Supp. 2d 1059, 1064 (N.D. Ga. 1997). A limited exception to this rule exists: a private right of action exists under RESPA when a specific statutory provision mentions such a right. See Bloom v. Martin, 865 F. Supp. 1377, 1384-85 (N.D. Cal. 1994). Although Plaintiff alleges Defendants violated several provisions of RESPA, the only section she references with any specificity is § 2605. Accordingly, because this section of the statute does not provide a private right of action, Plaintiff’s claim for negligence per se under RESPA fails.

C. Rescission

Plaintiff also alleges she is entitled to a rescission of the mortgage contract under TILA, 15 U.S.C. § 1635. Plaintiff is incorrect. Section 1635 of TILA establishes that lenders must notify borrowers of their right to rescind and outlines the penalties for failure to comply with this requirement. Nonetheless, § 1635 expressly states that these provisions do not apply to “residential mortgage transactions.” A residential mortgage transaction is defined in 15 U.S.C. § 1602(w) as a “transaction in which a mortgage . . . interest is created or retained against the consumer’s principal dwelling.” See also 12 C.F.R. § 226.2(a)(24). This is precisely what Plaintiff’s mortgage contract entailed: the parties entered into a transaction in which Plaintiff attained financing from Defendants to acquire residential property. Because Plaintiff is not entitled to rescind the mortgage contract, her rescission claim under § 1635 fails as a matter of law and Defendant’s Motion to Dismiss is granted as to Plaintiff’s rescission claims.

D. Wrongful Foreclosure

Plaintiff also alleges wrongful foreclosure. “An action for the tort of wrongful foreclosure will lie if the trustor or mortgagor can establish that at the time the power of sale was exercised or the foreclosure occurred, no breach of condition or failure of performance existed on the mortgagor’s or trustor’s part which would have authorized the foreclosure or exercise of the power of sale.” Collins v. Union Federal Sav. & Loan Ass’n, 662 P.2d 610, 623 (Nev. 1983). “The material issue of fact in a wrongful foreclosure claim is whether the trustor was in default when the power of sale was exercised.” Id. Here, Plaintiff affirmatively alleges that she was not in default of payment to the lender at the time the foreclosure occurred, and therefore, the representations as stated on the Notice of Default were false.[2] Taking these assertions as true, the Court finds that Plaintiff has adequately stated a claim for wrongful foreclosure against Defendants. Therefore, Defendants’ Motion to Dismiss is denied as to Plaintiff’s wrongful foreclosure claim.

E. Negligence against QLS

To bring a negligence claim in Nevada, a plaintiff must show that (1) defendant owed a duty of care to plaintiff; (2) defendant breached that duty; (3) defendant’s breach was the actual and proximate cause of plaintiff’s injuries; and (4) plaintiff was injured. Scialabba v. Brandise Constr., 921 P.2d 928, 930 (Nev. 1996). Liability based on negligence does not exist without a breach of duty. Bradshaw v. Blystone Equip. Co. of Nev., 386 P.2d 396, 397 (Nev. 1963). Plaintiff claims that Defendant QLS, “as trustee under the deed of trust, had a duty to Plaintiff to ensure that any party instructing it to conduct a foreclosure sale of the property actually owned and had rights under the note and deed of trust.” (See #14, Compl. ¶ 32.) Plaintiff also alleges that Defendant QLS’s failure to take the appropriate steps to comply with this duty was the actual and proximate cause of damages to Plaintiff. Id. at ¶ 33-39.) At this point, because Plaintiff’s claim for wrongful foreclosure remains, the Court also finds that Plaintiff has sufficiently pled a claim for negligence.

F. Quiet Title

Finally, Plaintiff brings a claim of quiet title, arguing that because foreclosure was wrongful, Plaintiff remains the rightful owner of the subject property. Taking these assertions as true, Plaintiff has stated a claim for wrongful foreclosure against Defendants. Therefore, Defendants’ Motion to Dismiss is denied as to Plaintiff’s quiet title claim.

IV. Conclusion

Accordingly, IT IS HEREBY ORDERED that Defendants’ Motion to Dismiss (#15) is GRANTED in part and DENIED in part as follows:

Defendants’ Motion to Dismiss Plaintiff’s claim for intentional misrepresentation is DENIED.

Defendants’ Motion to Dismiss Plaintiff’s claim for negligence per se under TILA is DENIED.

Defendants’ Motion to Dismiss Plaintiff’s claim for negligence per se under RESPA is GRANTED.

Defendants’ Motion to Dismiss Plaintiff’s claim for negligence against QLS is DENIED.

Defendants’ Motion to Dismiss Plaintiff’s claim for rescission under TILA is GRANTED.

Defendants’ Motion to Dismiss Plaintiff’s claim for wrongful foreclosure is DENIED.

Defendants’ Motion to Dismiss Plaintiff’s claim for quiet title in DENIED.

[1] Defendant Quality Loan Service Corporation filed a Joinder (#22) to Defendant’s Motion to Dismiss that is considered together with Defendant’s Motion herein. [2] If matters outside of the pleadings are submitted in conjunction with a motion to dismiss, Rule 12(b) grants courts discretion to either accept and consider, or to disregard such materials. See Isquith v. Middle S. Utils., Inc., 847 F.2d 186, 193 n.3 (5th Cir.1988). A court exercises this discretion by examining whether the submitted material, and the resulting conversion from the Rule 12(b)(6) to the Rule 56 procedure, may facilitate disposing of the action. Id. at 193 n.3. If the court elects to convert the motion, “[a]ll parties must be given a reasonable opportunity to present all the material that is pertinent to the motion.” Fed. R. Civ. P. 12(d). Here, Defendants have attempted to provide evidence refuting Plaintiff’s no default claim, Plaintiff however, has not had an adequate opportunity to fully brief this issue. Accordingly, without opining whether Plaintiff’s claims may survive a summary judgment motion, the Court elects not to convert Defendants’ immediate Motion into one for summary judgment.

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Judge ARTHUR SCHACK’s COLASSAL Steven J. BAUM “MiLL” SMACK DOWN!! MERS TWILIGHT ZONE!

Judge ARTHUR SCHACK’s COLASSAL Steven J. BAUM “MiLL” SMACK DOWN!! MERS TWILIGHT ZONE!


2010 NY Slip Op 50927(U)

HSBC BANK USA, N.A. AS TRUSTEE FOR NOMURA ASSET-BACKED CERTIFICATE SERIES

2006-AF1,, Plaintiff,
v.
LOVELY YEASMIN, ET. AL., Defendants.

34142/07

Supreme Court, Kings County.

Decided May 24, 2010.

Steven J Baum, PC, Amherst NY, Plaintiff — US Bank.

ARTHUR M. SCHACK, J.

Plaintiff’s renewed motion for an order of reference, for the premises located at 22 Jefferson Street, Brooklyn, New York (Block 3170, Lot 20, County of Kings), is denied with prejudice. The instant action is dismissed and the notice of pendency for the subject property is cancelled. Plaintiff HSBC BANK USA, N.A. AS TRUSTEE FOR NOMURA ASSET-BACKED CERTIFICATE SERIES 2006-AF1 (HSBC) failed to comply with my May 2, 2008 decision and order in the instant matter (19 Misc 3d 1127 [A]), which granted plaintiff HSBC leave:

to renew its application for an order of reference for the premises located at 22 Jefferson Street, Brooklyn, New York (Block 3170, Lot 20, County of Kings), upon presentation to the Court, within forty-five (45) days of this decision and order of:

(1) a valid assignment of the instant mortgage and note to plaintiff, HSBC . . .;

(2) an affirmation from Steven J. Baum, Esq., the principal of Steven J. Baum, P.C., explaining if both MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. [MERS], the assignor of the instant mortgage and note, and HSBC . . . the assignee of the instant mortgage and note, pursuant to 22 NYCRR § 1200.24, consented to simultaneous representation in the instant action, with “full disclosure of the implications of the simultaneous representation and the advantages and risks involved” explained to them;

(3) compliance with the statutory requirements of CPLR § 3215 (f), by an affidavit of facts executed by someone with authority to execute such an affidavit, and if the affidavit of facts is executed by a loan servicer, a copy of a valid power of attorney to the loan servicer, and the servicing agreement authorizing the affiant to act in the instant foreclosure action; and

(4) an affidavit from an officer of plaintiff HSBC . . . explaining why plaintiff HSBC . . . purchased a nonperforming loan from MERS, as nominee for CAMBRIDGE HOME CAPITAL, LLC [CAMBRIDGE].

[Emphasis added]

Plaintiff made the instant motion on January 6, 2009, 249 days subsequent to the May 2, 2008 decision and order. Thus, the instant motion is 204 days late. Plaintiff’s unavailing lateness explanation, in ¶ 16 of plaintiff’s counsel’s January 6, 2009 affirmation of regularity, states:

A previous application has been made for this or like relief but was subsequently denied without prejudice with leave to renew upon proper papers. By Decision and Order of this court dated the 2nd day of May 2008, plaintiff had 45 days to renew its application.

However on June 29, 2008 the Plaintiff permitted the mortgagor to enter into a foreclosure forbearance agreement. Said agreement was entered into with the hope that the Defendant would be able to keep her home. The agreement was not kept by the mortgagor and Plaintiff has since resumed the foreclosure action. The defects of the original application are addressed in the Affirmation attached hereto at Tab F [sic].

June 29, 2008 was 58 days subsequent to May 2, 2008. This was 13 days subsequent to the Court ordered deadline for plaintiff to make a renewed motion for an order of reference. While it’s laudatory for plaintiff HSBC to have granted defendant a forbearance agreement, plaintiff HSBC never notified the Court about this or sought Court approval of extending the 45-day deadline to make the instant motion. However, even if the instant motion was timely, the documents plaintiff’s counsel refers to at Tab F [exhibit F of motion] do not cure the defects the Court found with the original motion and articulated in the May 2, 2008 decision and order.

Background

Defendant LOVELY YEASMIN borrowed $624,800.00 from CAMBRIDGE on May 10, 2006. The note and mortgage were recorded by MERS, as nominee for CAMBRIDGE, for purposes of recording the mortgage, in the Office of the City Register, New York City Department of Finance, on May 23, 2006, at City Register File Number (CRFN) XXXXXXXXXXXXX. Then, MERS, as nominee for CAMBRIDGE, assigned the mortgage to plaintiff HSBC on September 10, 2007, with the assignment recorded in the Office of the City Register, on September 20, 2007, at CRFN XXXXXXXXXXXXX. The assignment was executed by “Nicole Gazzo, Esq., on behalf of MERS, by Corporate Resolution dated 7/19/07.” Neither a corporate resolution nor a power of attorney to Ms. Gazzo were recorded with the September 10, 2007 assignment. Therefore, the Court found the assignment invalid and plaintiff HSBC lacked standing to bring the instant foreclosure action. Ms. Gazzo, the assignor, according to the Office of Court Administration’s Attorney Registration, has as her business address, “Steven J. Baum, P.C., 220 Northpointe Pkwy Ste G, Buffalo, NY 14228-1894.” On September 10, 2008, the same day that Ms. Gazzo executed the invalid assignment for MERS, as nominee for CAMBRIDGE, plaintiff’s counsel, Steven J. Baum, P.C., commenced the instant action on behalf of purported assignee HSBC by filing the notice of pendency, summons and complaint in the instant action with the Kings County Clerk’s Office. The Court, in the May 2, 2008 decision and order, was concerned that the simultaneous representation by Steven J. Baum, P.C. of both MERS and HSBC was a conflict of interest in violation of 22 NYCRR § 1200.24, the Disciplinary Rule of the Code of Professional Responsibility entitled “Conflict of Interest; Simultaneous Representation,” then in effect. Further, plaintiff’s moving papers for an order of reference and related relief failed to present an “affidavit made by the party,” pursuant to CPLR § 3215 (f). The instant application contained an “affidavit of merit and amount due,” dated November 16, 2007, by Cathy Menchise, “Senior Vice President of WELLS FARGO BANK, N.A. D/B/A AMERICA’S SERVICING COMPANY, Attorney in Fact for HSBC BANK USA, N.A. AS TRUSTEE FOR NOMURA ASSET-BACKED CERTIFICATE SERIES 2006-AF1.” Ms. Menchise stated “[t]hat a true copy of the Power of Attorney is attached hereto.” Actually attached was a photocopy of a “Limited Power of Attorney,” dated July 19, 2004, from HSBC, appointing WELLS FARGO BANK, N.A. as its attorney-in-fact to perform various enumerated services, by executing documents “if such documents are required or permitted under the terms of the related servicing agreements . . . in connection with Wells Fargo Bank, N.A.[‘s] . . . responsibilities to service certain mortgage loans . . . held by HSBC . . . as Trustee of various trusts.” The “Limited Power of Attorney” failed to list any of these “certain mortgage loans.” The Court was unable to determine if plaintiff HSBC’s subject mortgage loan was covered by this “Limited Power of Attorney.” The original motion stated that defendant YEASMIN defaulted on her mortgage payments by failing to make her May 1, 2007 and subsequent monthly loan payments. Yet, on September 10, 2007, 133 days subsequent to defendant YEASMIN’S alleged May 1, 2007 payment default, plaintiff HSBC took the ssignment of the instant nonperforming loan from MERS, as nominee for CAMBRIDGE. Thus, the Court required, upon renewal of the motion for an order of reference, a satisfactory explanation of why HSBC purchased a nonperforming loan from MERS, as nominee for CAMBRIDGE.

Plaintiff HSBC needed “standing” to proceed in the instant action. The Court of Appeals (Saratoga County Chamber of Commerce, Inc. v Pataki, 100 NY2d 801, 912 [2003]), cert denied 540 US 1017 [2003]), held that “[s]tanding to sue is critical to the proper functioning of the judicial system. It is a threshold issue. If standing is denied, the pathway to the courthouse is blocked. The plaintiff who has standing, however, may cross the threshold and seek judicial redress.” In Carper v Nussbaum, 36 AD3d 176, 181 (2d Dept 2006), the Court held that “[s]tanding to sue requires an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant’s request.” If a plaintiff lacks standing to sue, the plaintiff may not proceed in the action. (Stark v Goldberg,297 AD2d 203 [1d Dept 2002]). “Since standing is jurisdictional and goes to a court’s authority to resolve litigation [the court] can raise this matter sua sponte.” (Axelrod v New York State Teachers’ Retirement System, 154 AD2d 827, 828 [3d Dept 1989]).

In the instant action, the September 10, 2007 assignment from MERS, as nominee for CAMBRIDGE, to HSBC was defective. Therefore, HSBC had no standing to bring this action. The recorded assignment by “Nicole Gazzo, Esq. on behalf of MERS, by Corporate Resolution dated 7/19/07,” had neither the corporate resolution nor a power of attorney attached. Real Property Law (RPL) § 254 (9) states: Power of attorney to assignee. The word “assign” or other words of assignment, when contained in an assignment of a mortgage and bond or mortgage and note, must be construed as having included in their meaning that the assignor does thereby make, constitute and appoint the assignee the true and lawful attorney, irrevocable, of the assignor, in the name of the assignor, or otherwise, but at the proper costs and charges of the assignee, to have, use and take all lawful ways and means for the recovery of the money and interest secured by the said mortgage and bond or mortgage and note, and in case of payment to discharge the same as fully as the assignor might or could do if the assignment were not made. [Emphasis added]

To have a proper assignment of a mortgage by an authorized agent, a power of attorney is necessary to demonstrate how the agent is vested with the authority to assign the mortgage. “No special form or language is necessary to effect an assignment as long as the language shows the intention of the owner of a right to transfer it [Emphasis added].” (Tawil v Finkelstein Bruckman Wohl Most & Rothman, 223 AD2d 52, 55 [1d Dept 1996]). (See Suraleb, Inc. v International Trade Club, Inc., 13 AD3d 612 [2d Dept 2004]). To foreclose on a mortgage, a party must have title to the mortgage. The instant assignment was a nullity. The Appellate Division, Second Department (Kluge v Fugazy, 145 AD2d 537, 538 [2d Dept 1988]), held that a “foreclosure of a mortgage may not be brought by one who has no title to it and absent transfer of the debt, the assignment of the mortgage is a nullity.” Citing Kluge v Fugazy, the Court inKatz v East-Ville Realty Co. (249 AD2d 243 [1d Dept 1998]), held that “[p]laintiff’s attempt to foreclose upon a mortgage in which he had no legal or equitable interest was without foundation in law or fact.” Plaintiff HSBC, with the invalid assignment of the instant mortgage and note from MERS, lacked standing to foreclose on the instant mortgage. The Court, in Campaign v Barba (23 AD3d 327 [2d Dept 2005]), held that “[t]o establish a prima facie case in an action to foreclose a mortgage, the plaintiff must establish the existence of the mortgage and the mortgage note, ownership of the mortgage, and the defendant’s default in payment [Emphasis added].” (See Household Finance Realty Corp. of New York v Wynn, 19 AD3d 545 [2d Dept 2005]; Sears Mortgage Corp. v Yahhobi, 19 AD3d 402 [2d Dept 2005]; Ocwen Federal Bank FSB v Miller, 18 AD3d 527 [2d Dept 2005]; U.S. Bank Trust Nat. Ass’n v Butti, 16 AD3d 408 [2d Dept 2005]; First Union Mortgage Corp. v Fern, 298 AD2d 490 [2d Dept 2002]; Village Bank v Wild Oaks Holding, Inc., 196 AD2d 812 [2d Dept 1993]). Even if plaintiff HSBC can cure the assignment defect, plaintiff’s counsel has to address his conflict of interest in the representation of both assignor MERS, as nominee for CAMBRIDGE, and assignee HSBC. 22 NYCRR § 1200.24, of the Disciplinary Rules of the Code of Professional Responsibility, entitled “Conflict of Interest; Simultaneous Representation,” states in relevant part: (a) A lawyer shall decline proffered employment if the exercise of independent professional judgment in behalf of a client will be or is likely to be adversely affected by the acceptance of the proffered employment, or if it would be likely to involve the lawyer in representing differing interests, except to the extent permitted under subdivision (c) of this section. (b) A lawyer shall not continue multiple employment if the exercise of independent professional judgment in behalf of a client will be or is likely to be adversely affected by the lawyer’s representation of another client, or if it would be likely to involve the lawyer in representing differing interests, except to the extent permitted under subdivision (c) of this section. (c) in the situations covered by subdivisions (a) and (b) of this section, a lawyer may represent multiple clients if a disinterested lawyer would believe that the lawyer can competently represent the interest of each and if each consents to the representation after full disclosure of the implications of the simultaneous representation and the advantages and risks involved. [Emphasis added]

The Court, upon renewal of the instant motion for an order of reference wanted to know if both MERS and HSBC were aware of the simultaneous representation by plaintiff’s counsel, Steven J. Baum, P.C., and whether both MERS and HSBC consented. Upon plaintiff’s renewed motion for an order of reference, the Court required an affirmation by Steven J. Baum, Esq., the principal of Steven J. Baum, P.C., explaining if both MERS and HSBC consented to simultaneous representation in the instant action with “full disclosure of the implications of the simultaneous representation and the advantages and risks involved.” The Appellate Division, Fourth Department, the Department, in which both Ms. Gazzo and Mr. Baum are registered (In re Rogoff, 31 AD3d 111 [2006]), censured an attorney for, inter alia, violating 22 NYCRR § 1200.24, by representing both a buyer and sellers in the sale of a motel. The Court, at 112, found that the attorney “failed to make appropriate disclosures to either the sellers or the buyer concerning dual representation.” Further, the Rogoff Court, at 113, censured the attorney, after it considered the matters submitted by respondent in mitigation, including: that respondent undertook the dual representation at the insistence of the buyer, had no financial interest in the transaction and charged the sellers and the buyer one half of his usual fee. Additionally, we note that respondent cooperated with the Grievance Committee and has expressed remorse for his misconduct. Then, if counsel for plaintiff HSBC cures the assignment defect and explains his simultaneous representation, plaintiff HSBC needs to address the “affidavit of merit” issue. The May 2, 2008 decision and order required that plaintiff comply with CPLR § 3215 (f) by providing an “affidavit made by the party,” whether by an officer of HSBC, or someone with a valid power of attorney from HSBC, to execute foreclosure documents for plaintiff HSBC. If plaintiff HSBC presents a power of attorney and it refers to a servicing agreement, the Court needs to inspect the servicing agreement. (Finnegan v Sheahan, 269 AD2d 491 [2d Dept 2000];Hazim v Winter, 234 AD2d 422 [2d Dept 1996]; EMC Mortg. Corp. v Batista, 15 Misc 3d 1143 [A] [Sup Ct, Kings County 2007]; Deutsche Bank Nat. Trust Co. v Lewis, 4 Misc 3d 1201 [A] [Sup Ct, Suffolk County 2006]).

Last, the Court required an affidavit from an officer of HSBC, explaining why, in the middle of our national mortgage financial crisis, plaintiff HSBC purchased from MERS, as nominee for CAMBRIDGE, the subject nonperforming loan. It appears that HSBC violated its corporate fiduciary duty to its stockholders by purchasing the instant mortgage loan, which became nonperforming on May 1, 2007, 133 days prior to its assignment from MERS, as nominee for CAMBRIDGE, to HSBC, rather than keep the subject mortgage loan on CAMBRIDGE’s books.

Discussion

The instant renewed motion is dismissed for untimeliness. Plaintiff made its renewed motion for an order of reference 204 days late, in violation of the Court’s May 2, 2008 decision and order. Moreover, even if the instant motion was timely, the explanations offered by plaintiff’s counsel, in his affirmation in support of the instant motion and various documents attached to exhibit F of the instant motion, attempting to cure the four defects explained by the Court in the prior May 2, 2008 decision and order, are so incredible, outrageous, ludicrous and disingenuous that they should have been authored by the late Rod Serling, creator of the famous science-fiction televison series, The Twilight Zone. Plaintiff’s counsel, Steven J. Baum, P.C., appears to be operating in a parallel mortgage universe, unrelated to the real universe. Rod Serling’s opening narration, to episodes in the 1961-1962 season of The Twilight Zone (found at www.imdb.com/title/tt005250/quotes), could have been an introduction to the arguments presented in support of the instant motion by plaintiff’s counsel, Steven J. Baum, P.C. — “You are traveling through another dimension, a dimension not only of sight and sound but of mind. A journey into a wondrous land of imagination. Next stop, the Twilight Zone.” With respect to the first issue for the renewed motion for an order of reference, the validity of the September 10, 2007 assignment of the subject mortgage and note by MERS, as nominee for CAMBRIDGE, to plaintiff HSBC by “Nicole Gazzo, Esq., on behalf of MERS, by Corporate Resolution dated 7/19/07,” plaintiff’s counsel claims that the assignment is valid because Ms. Gazzo is an officer of MERS, not an agent of MERS. Putting aside Ms. Gazzo’s conflicted status as both assignor attorney and employee of assignee’s counsel, Steven J. Baum, P.C., how would the Court have known from the plain language of the September 10, 2007 assignment that the assignor, Ms. Gazzo, is an officer of MERS? She does not state in the assignment that she is an officer of MERS and the corporate resolution is not attached. Thus, counsel’s claim of a valid assignment takes the Court into “another dimension” with a “journey into a wondrous land of imagination,” the mortgage twilight zone. Next, plaintiff’s counsel attached to exhibit F the July 17, 2007 “Agreement for Signing Authority” between MERS, Wells Fargo Home Mortgage, a Division of Wells Fargo Bank NA (WELLS FARGO), a MERS “Member” and Steven J. Baum, P.C., as WELLS FARGO’s “Vendor.” The parties agreed, in ¶ 3, that “in order for Vendor [Baum] to perform its contractual duties to Member [WELLS FARGO], MERS, by corporate resolution, will grant employees of Vendor [Baum] the limited authority to act on behalf of MERS to perform certain duties. Such authority is set forth in the Resolution, which is made a part of this Agreement.” Also attached to exhibit F is the MERS corporate resolution, certified by William C. Hultman, Corporate Secretary of MERS, that MERS’ Board of Directors adopted this resolution, effective July 19, 2007, resolving:

that the attached list of candidates are employee(s) of Steven J. Baum, P.C. and are hereby appointed as assistant secretaries and vice presidents of Mortgage Electronic Registration Systems, Inc., and as such are authorized to: Execute any and all documents necessary to foreclose upon the property securing any mortgage loan registered on the MERS System that is shown to be registered to the Member . . . Take any and all actions and execute all documents necessary to protect the interest of the Member, the beneficial owner of such mortgage loan, or MERS in any bankruptcy proceedings . . . Assign the lien of any mortgage loan registered on the MERS System that is shown to be registered to Wells Fargo.

Then, the resolution certifies five Steven J. Baum, P.C. employees [all currently admitted to practice in New York and listing Steven J. Baum, P.C. as their employer in the Office of Court Administration Attorney Registry] as MERS officers. The five are Brian Kumiega, Nicole Gazzo, Ron Zackem, Elpiniki Bechakas, and Darleen Karaszewski. The language of the MERS corporate resolution flies in the face of documents recorded with the City Register of the City of New York. The filed recordings with the City Register show that the subject mortgage was owned first by MERS, as nominee for CAMBRIDGE, and then by HSBC as Trustee for a Nomura collateralized debt obligation. However, if the Court follows the MERS’corporate resolution and enters into a new dimension of the mind, the mortgage twilight zone, the real owner of the subject mortgage is WELLS FARGO, the MERS Member and loan servicer of the subject mortgage, because the corporate resolution states that the Member is “the beneficial owner of such mortgage loan.” The MERS mortgage twilight zone was created in 1993 by several large “participants in the real estate mortgage industry to track ownership interests in residential mortgages. Mortgage lenders and other entities, known as MERS members, subscribe to the MERS system and pay annual fees for the electronic processing and tracking of ownership and transfers of mortgages. Members contractually agree to appoint MERS to act as their common agent on all mortgages they register in the MERS system.” (MERSCORP, Inc. v Romaine, 8 NY3d 90, 96 [2006]). Next, with respect to Ms. Gazzo’s employer, Steven J. Baum, P.C, and its representation of MERS, through Ms. Gazzo, the Court continues to journey through the mortgage twilight zone. Also, attached to exhibit F of the instant motion is the August 11, 2008 affirmation of Steven J. Baum, Esq., affirmed “under the penalties of perjury.” Mr. Baum states, in ¶ 3, that “My firm does not represent HSBC . . . and MERS simultaneously in the instant action.” Then, apparently overlooking that the subject notice of pendency, summons, complaint and instant motion, which all clearly state that Steven J. Baum, P.C. is the attorney for plaintiff HSBC, Mr. Baum states, in ¶ 4 of his affirmation, that “My firm is the attorney of record for Wells Fargo Bank, N.A., d/b/a America’s Servicing Company, attorney in fact for HSBC Bank USA, N.A., as Trustee for Nomura Asset-Backed Certificate Series 2006-AF1. My firm does not represent . . . [MERS] as an attorney in this action.” In the mortgage world according to Steven J. Baum, Esq., there is a fine line between acting as an attorney for MERS and as a vendor for a MERS member. If Mr. Baum is not HSBC’s attorney, but the attorney for WELLS FARGO, why did he mislead the Court and defendants by stating on all the documents filed and served in the instant action that he is plaintiff’s attorney for HSBC? Further, in ¶ 6 of his affirmation, he states “Nowhere does the Resolution indicate that Ms. Gazzo, or my firm, or any attorney or employee of my firm, shall act as an attorney for MERS. As such I am unaware of any conflict of interest of Steven J. Baum, P.C. or any of its employees, in this action.” While Mr. Baum claims to be unaware of the inherent conflict of interest, the Court is aware of the conflict. ¶ 3 of the MERS “Agreement for Signing Authority,” cited above, states that “in order for Vendor [Baum] to perform its contractual duties to Member [WELLS FARGO], MERS, by corporate resolution, will grant employees of Vendor [Baum] the limited authority to act on behalf of MERS to perform certain duties. Such authority is set forth in the Resolution, which is made a part of this Agreement.” As the Court continues through the MERS mortgage twilight zone, attached to exhibit F is the June 30, 2009-affidavit of MERS’ Secretary, William C. Hultman. Mr. Hultman claims, in ¶ 3, that Steven J. Baum, P.C. is not acting in the instant action as attorney for MERS and, in ¶ 4, Ms. Gazzo in her capacity as an officer of MERS executed the September 10, 2007 subject assignment “to foreclose on a mortgage loan registered on the MERS System that is being serviced by Wells Fargo Bank, N.A.” Thus, Mr. Hultman perceives that mortgages registered on the MERS system exist in a parallel universe to those recorded with the City Register of the City of New York. While Mr. Hultman waives, in ¶ 9, any conflict that might exist by Steven J. Baum, P.C. in the instant action, neither he nor Mr. Baum address whether MERS, pursuant to 22 NYCRR § 1200.24, consented to simultaneous representation in the instant action, with “full disclosure of the implications of the simultaneous representation and the advantages and risks involved” explained to MERS. Then, attached to exhibit F, there is the June 11, 2008-affidavit of China Brown, Vice President Loan Documentation of WELLS FARGO. This document continues the Court’s trip into “a wondrous land of imagination.” Despite the affidavit’s caption stating that HSBC is the plaintiff, Mr. or Ms. Brown (the notary public’s jurat refers several times to China Brown as “he/she”), states, in ¶ 4, that “Steven J. Baum, P.C. represents us as an attorney of record in this action.” The Court infers that “us” is WELLS FARGO. Moving to the third issue that plaintiff was required to address in the instant motion, compliance with the statutory requirements of CPLR § 3215 (f) with an affidavit of facts executed by someone with authority to execute such an affidavit, plaintiff’s instant motion contains an affidavit of merit, attached as exhibit C, by Kim Miller, “Vice President of Wells Fargo Bank, N.A. as Attorney in Fact for HSBC,” executed on December 8, 2008, 220 days after my May 2, 2008 decision and order. The affidavit of merit is almost six months late. Again, plaintiff attached a photocopy of the July 19, 2004 “Limited Power of Attorney” from HSBC [exhibit D], which appointed WELLS FARGO as its attorney-in-fact to perform various enumerated services, by executing documents “if such documents are required or permitted under the terms of the related servicing agreements . . . in connection with Wells Fargo[‘s] . . . responsibilities to service certain mortgage loans . . . held by HSBC . . . as Trustee of various trusts.” Further, the “Limited Power of Attorney” fails to list any of these “certain mortgage loans.” Therefore, the Court is unable to determine if the subject mortgage loan is one of the mortgage loans that WELLS FARGO services for HSBC. The “Limited Power of attorney” gives WELLS FARGO the right to execute foreclosure documents “if such documents are required or permitted under the terms of the related servicing agreements.” Instead of presenting the Court with the “related servicing agreement” for review, plaintiff’s counsel submits copies of the cover page and redacted pages 102, 104 and 105 of the October 1, 2006 Pooling and Servicing Agreement between WELLS FARGO, as Master Servicer, HSBC, as Trustee, and other entities. This is in direct contravention of the Court’s May 2, 2008-directive to plaintiff HSBC that it provides the Court with the entire pooling and servicing agreement upon renewal of the instant motion. Thomas Westmoreland, Vice President Loan Documentation of HSBC, in ¶ 10 of his attached June 13, 2008-affidavit, also in exhibit F, claims that the snippets of the pooling and servicing agreement provided to the Court are “a copy of the non-proprietary portions of the Pooling and Servicing Agreement that was entered into when the pool of loans that contained the subject mortgage was purchased.” The Court cannot believe that there is any proprietary or trade secret information in a boilerplate pooling and servicing agreement. If plaintiff HSBC utilizes an affidavit of facts by a loan servicer, not an HSBC officer, to secure a judgment on default, pursuant to CPLR § 3215 (f), then the Court needs to examine the entire pooling and servicing agreement, whether proprietary or non-p

roprietary, to determine if the pooling and servicing agreement grants authority, pursuant to a power of attorney, to the affiant to execute the affidavit of facts.

Further, there is hope that Mr. Westmoreland, unlike Steven J. Baum, Esq., is not in another dimension. Mr. Westmoreland, in ¶ 1 of his affidavit, admits that HSBC is the plaintiff in this action. However, with respect to why plaintiff HSBC purchased the subject nonperforming loan, Mr. Westmoreland admits to a lack of due diligence by plaintiff HSBC. His admissions are straight from the mortgage twilight zone. He states in his affidavit, in ¶’s 4-7 and part of ¶ 10: 4. The secondary mortgage market is, essentially, the buying and selling of “pools” of mortgages. 5. A mortgage pools is the packaging of numerous mortgage loans together so that an investor may purchase a significant number of loans in one transaction. 6. An investigation of each and every loan included in a particular mortgage pool, however, is not conducted, nor is it feasible. 7. Rather, the fact that a particular mortgage pool may include loans that are already in default is an ordinary risk of participating in the secondary market . . . 10. . . . Indeed, the performance of the mortgage pool is the measure of success, not any one individual loan contained therein. [Emphasis added] The Court can only wonder if this journey through the mortgage twilight zone and the dissemination of this decision will result in Mr. Westmoreland’s affidavit used as evidence in future stockholder derivative actions against plaintiff HSBC. It can’t be comforting to investors to know that an officer of a financial behemoth such as plaintiff HSBC admits that “[a]n investigation of each and every loan included in a particular mortgage pool, however, is not conducted, nor is it feasible” and that “the fact that a particular mortgage pool may include loans that are already in default is an ordinary risk of participating in the secondary market.”

Cancelling of notice of pendency

The dismissal with prejudice 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 beensettled, 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 (Black’s Law Dictionary 3 [7th ed 1999]) as “the act of eliminating or nullifying.” “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 Natassi, 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 HSBC’s notice of pendency against the property “in the exercise of the inherent power of the court.”

Conclusion

Accordingly, it is ORDERED, that the renewed motion of plaintiff, HSBC BANK USA, N.A. AS TRUSTEE FOR NOMURA ASSET-BACKED CERTIFICATE SERIES 2006-AF1, for an order of reference, for the premises located at 22 Jefferson Street, Brooklyn, New York (Block 3170, Lot 20, County of Kings), is denied with prejudice; and it is further

ORDERED, that the instant action, Index Number 34142/07, is dismissed with prejudice; and it is further

ORDERED that the Notice of Pendency in this action, filed with the Kings County Clerk on September 10, 2007, by plaintiff, HSBC BANK USA, N.A. AS TRUSTEE FOR NOMURA ASSET-BACKED CERTIFICATE SERIES 2006-AF1, to foreclose a mortgage for real property located at 22 Jefferson Street, Brooklyn New York (Block 3170, Lot 20, County of Kings), is cancelled.

This constitutes the Decision and Order of the Court.

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



Posted in case, cdo, concealment, conspiracy, corruption, dismissed, foreclosure, foreclosure fraud, foreclosure mills, forensic mortgage investigation audit, HSBC, investigation, judge arthur schack, MERS, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., Mortgage Foreclosure Fraud, note, reversed court decision, robo signer, robo signers, securitization, Supreme CourtComments (1)

Florida AG investigating LPS subsidiary: Jacksonville Business Journal

Florida AG investigating LPS subsidiary: Jacksonville Business Journal


Monday, May 17, 2010, 1:50pm EDT  |  Modified: Monday, May 17, 2010, 1:51pm

Jacksonville Business Journal – by Christian Conte Staff Writer

The Florida Attorney General’s Office has launched a civil investigation similar to one launched by a Florida U.S. Attorney’s Office against Fidelity National Financial Inc. and Lender Processing Services Inc., along with an LPS subsidiary, relating to possible forged documents in foreclosure cases.

According to the Attorney General’s website, DOCX LLC, based in Alpharetta, Ga., “seems to be creating and manufacturing ‘bogus assignments’ of mortgage in order that foreclosures may go through more quickly and efficiently. These documents appear to be forged, incorrectly and illegally executed, false and misleading. These documents are used in court cases as ‘real’ documents of assignment and presented to the court as so, when it actually appears that they are fabricated in order to meet the documentation to foreclosure according to law.”

The Attorney General’s Economic Crimes Division in Fort Lauderdale is handling the case.

Fidelity National Financial (NYSE: FNF), based in Jacksonville, provides title insurance, specialty insurance, claims management services and information services. Lender Processing Services (NYSE: LPS), also based in Jacksonville, provides mortgage processing services, settlement services, mortgage performance analytics and default solutions.

Fidelity National acquired DOCX, which processes and files lien releases and mortgage assignments for lenders, in 2005.

The U.S. Attorney’s office launched its investigation of DOCX in February.

LPS stated in its 2009 annual report that there was a “business process that caused an error in the notarization” of mortgage documents, some in the foreclosure proceedings in “various jurisdictions around the country,” according to a filing with the U.S. Securities and Exchange Commission.

While the company said it fixed the problem, the annual report stated it spurred an inquiry by the Clerk of Superior Court in Fulton County, Ga., and most recently, LPS was notified by the U.S. Attorney’s Office for the Middle District of Florida, based in Tampa, that it is also investigating the “business processes” of DOCX.

cconte@bizjournals.com | 265-2227
Read more: Florida AG investigating LPS subsidiary – Jacksonville Business Journal:

RELATED STORY: MISSION: VOID LENDER PROCESSING SERVICES “ASSIGNMENTS”

Posted in concealment, conspiracy, corruption, foreclosure fraud, forensic loan audit, Former Fidelity National Information Services, fraud digest, investigation, Law Offices Of David J. Stern P.A., law offices of Marshall C. Watson pa, Lender Processing Services Inc., LPS, Lynn Szymoniak ESQ, mortgage electronic registration system, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., Mortgage Foreclosure Fraud, scam, stop foreclosure fraudComments (0)

Haley v. ELEGEN HOME LENDING, LP, Dist. Court, D. Nevada 2010

Haley v. ELEGEN HOME LENDING, LP, Dist. Court, D. Nevada 2010


Learn From This

 

BART E. HALEY, Plaintiff,
v.
ELEGEN HOME LENDING, LP; et al., Defendants.

No. 3:10-cv-00046-LRH-RAM.

United States District Court, D. Nevada.

March 15, 2010.

 

ORDER

LARRY R. HICKS, District Judge. 

Before the court is defendant PNC Bank National Association’s (“PNC”) motions to dismiss and expunge lis pendens filed on January 29, 2010 (Doc. ##5, 6[1]) to which the other defendants have joined (Doc. #9). Plaintiff Bart E. Haley (“Haley“) filed an opposition and request for leave to amend on February 16, 2010. Doc. #11. Thereafter, PNC filed a reply on February 26, 2010. Doc. #14. 

I. Facts and Procedural History

Haley refinanced real property through a loan with defendant Elegen Home Lending. The property was secured by a note and deed of trust. Haley defaulted on the loan and defendant Cal-Western Reconveyance Corporation, the substitute trustee, filed a notice of default on May 29, 2009. Doc. #5, Exhibit C. A notice of trustee’s sale was filed on November 13, 2007. Doc. #5, Exhibit D.Subsequently, on December 3, 2003, Haley filed a complaint alleging ten causes of action: (1) wrongful foreclosure; (2) fraud in the omission; (3) fraud in the inducement; (4) contractual breach of good faith and fair dealing; (5) tortious breach of good faith and fair dealing; (6) racketeering; (7) quiet title; (8) unjust enrichment; (9) declaratory relief; and (10) permanent injunction. Doc. #1, Exhibit 1. Thereafter, PNC filed the present motions to dismiss and expunge lis pendens. Doc. ##5, 6.

II. Legal Standard

In considering “a motion to dismiss, all well-pleaded allegations of material fact are taken as true and construed in a light most favorable to the non-moving party.” Wyler Summit P’ship v. Turner Broad. Sys., Inc., 135 F.3d 658, 661 (9th Cir. 1998) (citation omitted). However, a court does not necessarily assume the truth of legal conclusions merely because they are cast in the form of factual allegations in a plaintiff’s complaint. See Clegg v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994)

There is a strong presumption against dismissing an action for failure to state a claim. See Gilligan v. Jamco Dev. Corp., 108 F.3d 246, 249 (9th Cir. 1997) (citation omitted). “The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence in support of the claims.” Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds by Harlow v. Fitzgerald, 457 U.S. 800, 807 (1982). However, a plaintiff’s obligation to provide the grounds of his entitlement to relief requires more than labels, conclusions, and a formulaic recitation of the elements of the cause of action. Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955, 1965 (2007). “Factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Id. (internal citations omitted). 

III. Discussion

Wrongful Foreclosure

An action for wrongful foreclosure requires that, at the time of the foreclosure sale, the plaintiff was not in breach of the mortgage contract. Collins v. Union Federal Sav. & Loan Ass’n, 662 P.2d 610, 623 (Nev. 1983). Here, Haley was in default on his mortgage obligations so there can be no sustainable action for wrongful foreclosure. See Doc. #1, Exhibit 1. 

Furthermore, a claim for wrongful foreclosure does not arise until the power of sale is exercised. Collins, 662 P.2d at 623. Haley filed his complaint before the property was sold. As such, his claim for wrongful foreclosure is premature and not actionable. 

Fraud

“In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.” FED. R. CIV. P. 9(b). In order meet the heightened pleading requirements a plaintiff must specify the time, place, and content of the misrepresentation as well as the names of the parties involved. See Yourish v. Cal. Amplifier, 191 F.3d 983, 993 n.10 (9th Cir. 1999); see also, Parnes v. Gateway 2000, 122 F.3d 539, 549-50 (8th Cir. 1997) (requiring a plaintiff to allege the requisite who, what, where, when, and how of the misrepresentation). Here, Haley fails to allege anything more than defendants made misrepresentations to him. These allegations are insufficient to support a claim for fraudulent misrepresentation. 

In his opposition, Haley argues that where facts are peculiarly within the defendant’s knowledge, fraud may be alleged in general terms. See Rocker v. KPMG LLP, 148 P.3d 703, 709 (Nev. 2006) (overruled on other grounds Buzz Stew, LLC v. City of N. Las Vegas, 181 P.3d 670 (Nev. 2008)). However, the information here was not solely within defendants’ knowledge. Haley was present when the alleged misrepresentations were made and documents signed. Despite his personal knowledge of the events, he has failed to allege the requisite specificity under Rule 9(b). 

Good Faith and Fair Dealing

a. Contractual Breach

Under Nevada law, “[e]very contract imposes upon each party a duty of good faith and fair dealing in its performance and execution.” A.C. Shaw Constr. v. Washoe County, 784 P.2d 9, 9 (Nev. 1989) (quoting Restatement (Second) of Contracts § 205). To establish a claim for breach of the implied covenant of good faith and fair dealing, a plaintiff must show that: (1) the plaintiff and defendant were parties to a contract; (2) the defendant owed a duty of good faith and fair dealing to the plaintiff; (3) the defendant breached his duty by performing in a manner unfaithful to the purpose of the contract; and (4) the plaintiff’s justified expectations were denied. See Perry v. Jordan, 134 P.3d 698, 702 (Nev. 2006) (citing Hilton Hotels Corp. v. Butch Lewis Prod. Inc., 808 P.2d 919, 922-23 (Nev. 1991)

Here, Haley alleges that defendants breached the implied covenant because they misrepresented the cost of credit involved in the loan agreement. However, these alleged misrepresentations occurred before a contract was formed. See Doc. #1, Exhibit 1. A party cannot breach the covenant of good faith and fair dealing before a contract is formed. See Indep. Order of Foresters v. Donald, Lufkin & Jenrette, Inc., 157 F.3d 933, 941 (2d Cir. 1998) (“an implied covenant relates only to the performance of obligations under an extant contract, and not to any pre-contract conduct”). Haley fails to allege facts to establish that a breach occurred after the contract between the parties was formed. Because Haley’s claim revolves entirely around alleged promises and misrepresentations made before the contract was entered into, it fails as a matter of law. 

b. Tortious Breach

Haley also alleges that defendants breached their duty of good faith and fair dealing as fiduciary’s in their dealings with him. Generally, a lender does not owe a borrower a fiduciary duty. See Yerington Ford, Inc. v. General Motors Acceptance Corp., 359 F.Supp.2d 1075, 1092 (D. Nev. 2004). Haley has failed to allege sufficient facts to establish that defendants acted as anything other than arms length lenders which does not, in itself, create a fiduciary relationship. 

Absent a duty, there can be no breach. See A.C. Shaw Constr. v. Washoe County, 784 P.2d 9, 10 (Nev. 1989). Accordingly, Haley’s claim for breach of a fiduciary duty fails to state a claim upon which relief can be granted. See FED. R. CIV. P. 12(b)(6). 

Racketeering

In Nevada, civil racketeering claims brought under NRS 207.400, et seq., must be plead with specificity. Hale v. Burkhardt, 764 P.2d 866, 869 (Nev. 1988). That is, the complaint must allege at least two predicate crimes related to racketeering in order to sufficiently plead a racketeering claim upon which relief can be granted. Id. 

Here, Haley merely alleges that his loan was one of many executed in violation of the Nevada state laws. From Haley’s complaint, it is unclear what these violations were and, more importantly, what the two requisite “crimes” were. The court finds that Haley has failed to sufficiently plead a claim for civil racketeering upon which relief can be granted. 

Quiet Title

Under Nevada law, a quiet title action may be brought by someone who claims an adverse interest in property. NRS 40.010. No defendant is claiming an interest in the property that is adverse to Haley. Therefore, Haley has no grounds to quiet title against the named defendants. 

Unjust Enrichment

To set forth a claim for unjust enrichment, a plaintiff must allege that a defendant unjustly retained money or property of another against fundamental principles of equity. See Asphalt Prods. Corp. v. All Star Ready Mix, 898 P.2d 699, 700 (Nev. 1995). However, an action for unjust enrichment cannot stand when there is an express written contract which guides that activities of the parties. LeasePartners Corp. v. Robert L. Brooks Trust Dated Nov. 12, 1975, 942 P.2d 182, 187 (Nev. 1997)

Here, there was a written contract between the parties, namely, the deed of trust and mortgage note. These documents guided the interactions, obligations, and rights of the parties. As such, Haley cannot make a claim in equity for actions that are guided by contract he is a party to. See LeasePartners Corp., 942 P.2d at 187-88

Declaratory Relief and Permanent Injunction

Haley’s remaining causes of action for declaratory relief and a permanent injunction are remedies that may be afforded to a party after he has sufficiently established and proven his claims. Here, all of Haley’s other claims fail to establish a claim for relief. Accordingly, Haley is not entitled to his requested remedies. 

Request to Amend

In opposition to PNC’s motion to dismiss, Haley requests leave to amend his complaint to correct any deficiencies. However, other than briefly asking for leave to amend, Haley has not established how any proposed amended pleading would address and fix the issues raised by PNC’s motion. In particular, Haley has failed to state how he could satisfy the heightened pleading standard for his fraud claims; he has not alleged, or stated he could allege, whom he allegedly spoke to, what fraudulent statements he was told, and when he was told them. 

In light of Haley’s failure to provide the court with any indicia that amendment would not result in dismissal, the court declines to exercise its discretion and shall deny Haley’s request to amend. See United States ex rel. Lee v. SmithKline Beecham, Inc., 245 F.3d 1048, 1052 (9th Cir. 2001) (courts may refuse to grant leave to amend if the amendment would be futile). Additionally, the court notes that Haley’s request is procedurally improper. Pursuant to Local Rule 15-1(a), a party requesting leave to amend a pleading shall attached the proposed pleading to the request to amend. Haley did not attach a proposed amended pleading with his opposition. Accordingly, his request is procedurally defective. 

IT IS THEREFORE ORDERED that defendant’ motion to dismiss (Doc. #5) is GRANTED. The complaint is DISMISSED as to all defendants. 

IT IS FURTHER ORDERED that defendant’s motion to expunge lis pendens (Doc. #6) is GRANTED. Defendant PNC Bank National Association shall file an appropriate order with the court expunging the lis pendens and submit the same for signature. 

IT IS FURTHER ORDERED that the clerk of court shall enter judgment appropriately. 

IT IS SO ORDERED. 

[1] Refers to the court’s docketing number. 

 

Posted in case, foreclosure fraudComments (1)

Foreclosure FRAUD?: Tell it to the Attorney General Bill McCollum 5/8 MIAMI

Foreclosure FRAUD?: Tell it to the Attorney General Bill McCollum 5/8 MIAMI


PICKET…anyone??

Posted by Harriet Brackey on April 30, 2010 10:46 AM SunSentinel

If you want to speak to Florida’s Attorney General about foreclosure or loan modifications or mortgage fraud, here’s your chance.4823741.thl.jpg

Saturday, May 8, in Miami, Attorney General Bill McCollum will be on hand for a Mortgage Fraud Community Forum. He’s hosting the event with Florida’s Interagency Mortgage Task Force.

The session is on “The Housing Crisis, Who to Trust and Where to Turn.”

It’s open to the public and free, but reservations are required. Call 877-385-1621.
It will be held from 10 a.m. to 4 p.m. at Miami Dade College, Wolfson Campus, Chapman Conference Center, 300 N.E. Second Ave.

The AG’s office says you can get help on how to face foreclosure, housing scams, mortgage fraud, loan modifications and finding legal assistance.

Certified housing counselors, volunteer lawyers, as well as representatives of Bank of America, JP Morgan Chase, Wells Fargo/Wachovia and SunTrust will be on hand.

Also attending will be representatives of:
Florida Department of Law Enforcement, Office of Financial Regulation, Department of Business and Professional Regulation, Florida Bar, Dade County Bar Legal Aid Society, Cuban American Bar and the Collins Center Foreclosure Mediation Program.

For more information, go to www.myfloridalegal.com/mortgagefraud.

Posted in foreclosure fraudComments (0)

Attorney general investigating Tampa foreclosure firm: TBO.com

Attorney general investigating Tampa foreclosure firm: TBO.com


Florida Default Law Group, a huge foreclosure law firm has angered judges with its practices.
Florida Default Law Group, a huge foreclosure law firm has angered judges with its practices.

By MICHAEL SASSO | The Tampa Tribune

Published: April 30, 2010

TAMPA – The Florida Attorney General’s Office is investigating a Tampa-based foreclosure law firm that has become one of the state’s largest foreclosure mills.

On the agency’s Web site, the attorney general showed it has an “active public consumer-related investigation” into Florida Default Law Group. The agency notes that it is a civil investigation, rather than a criminal one, and the fact that is has an investigation isn’t proof of any violation of law.

Without going into much detail, the attorney general’s Web site says Florida Default Law Group, “Appears to be fabricating and/or presenting false and misleading documents in foreclosure cases.

“These documents have been presented in court before judges as actual assignments of mortgages and have later been shown to be legally inadequate and/or insufficient. Presenting faulty bank paperwork due to the mortgage crisis and thousands of foreclosures per month.”

Attempts to reach the Attorney General’s Office and Michael Echevarria, the head of Florida Default Law Group, were unsuccessful Thursday.

Based in a business park just off the Veteran’s Expressway, Florida Default Law Group files hundreds of foreclosure lawsuits alone in Hillsborough County on behalf of banks and mortgage servicing companies. The Tribune profiled Florida Default Law Group in January.

According to the Tribune’s review of 1,994 circuit court records, the firm filed initial legal documents for 323 foreclosure lawsuits in October. That was second only to the Law Offices of David J. Stern, a Broward County-based foreclosure firm that filed 352 foreclosure cases in October.

Florida Default Law Group operates in numerous counties in Florida, but it’s not clear how many lawsuits it files outside of Hillsborough County.

Reporter Michael Sasso can be reached at (813) 259-7865.

Posted in concealment, conspiracy, corruption, DOCX, FDLG, florida default law group, foreclosure fraud, foreclosure mills, forensic mortgage investigation audit, Lender Processing Services Inc., LPS, MERS, Mortgage Foreclosure Fraud, scamComments (0)

!BAM! Foreclosure Lawyers Face New Heat In Florida: Wall Street Journal AMIR EFRATI

!BAM! Foreclosure Lawyers Face New Heat In Florida: Wall Street Journal AMIR EFRATI


Again…AMIR…SETS IT OFF!!

April 29, 2010, 12:46 PM ET

By Amir Efrati The Wall Street Journal

Foreclosure DrThese are precarious times for lawyers in the business of filing foreclosure cases for banks. This is particularly true in one of the epicenters of the foreclosure crisis, Florida.

As we’ve noted before, the feds in Jacksonville recently started a criminal investigation of a company that is a top provider of the documentation used by banks in the foreclosure process. And a state-court judge ruled that a bank submitted a “fraudulent” document in support of its foreclosure case. That document was prepared by a local law firm.

For more Law Blog background on the foreclosure mess in our nation’s courts, this post will help.

The news today: the Florida Attorney General’s office said it has launched a civil investigation of Florida Default Law Group, based in Tampa, which is one of the largest so-called foreclosure-mill law firms in the state.

According to the AG’s website, it’s looking at whether the firm is “fabricating and/or presenting false and misleading documents in foreclosure cases.” It added: “These documents have been presented in court before judges as actual assignments of mortgages and have later been shown to be legally inadequate and/or insufficient.”

The issue: judges are increasingly running into situations in which banks are claiming ownership of properties they actually don’t own. Some of them end up chewing out the lawyers representing the banks.

The AG’s office said Florida Default Law Group appears to work closely with Lender Processing Services — the company we referenced earlier that is being investigated by the Justice Department.

LPS processes and sometimes produces documents needed by banks to prove they own the mortgages. LPS often works with local lawyers who litigate the foreclosure cases in court. Sometimes those same law firms produce documents that are required to prove ownership.

We’ve reached out to Florida Default Law Group and LPS and will let you know if we hear back.

Posted in concealment, conspiracy, corruption, DOCX, FDLG, florida default law group, foreclosure fraud, foreclosure mills, Lender Processing Services Inc., LPSComments (0)

*BREAKING NEWS* Economic Crimes Division in Ft. Lauderdale, Florida *INVESTIGATING* FLORIDA DEFAULT LAW GROUP “FORECLOSURE MILL” & LENDER PROCESSING SERVICES “DOCx, LLC”

*BREAKING NEWS* Economic Crimes Division in Ft. Lauderdale, Florida *INVESTIGATING* FLORIDA DEFAULT LAW GROUP “FORECLOSURE MILL” & LENDER PROCESSING SERVICES “DOCx, LLC”


UPDATE: Cannot confirm YET but others might be as well! Stay Tuned!

FDLG, LPS’ DocX is being investigated…lets see who’s next!

If you have evidence of Fraud make sure you contact them.

Active Public Consumer-Related Investigation

The case file cited below relates to a civil — not a criminal — investigation. The existence of an investigation does not constitute proof of any violation of law.
Case Number: L10-3-1095
Subject of investigation: Florida Default Law Group, PL
Subject’s address: 9119 Corporate Lake Drive, Suite 300, Tampa, Florida 33634
Subject’s business: Law Firm, Foreclosures
Allegation or issue being investigated:
Appears to be fabricating and/or presenting false and misleading documents in foreclosure cases. These documents have been presented in court before judges as actual assignments of mortgages and have later been shown to be legally inadequate and/or insufficient. Presenting faulty bank paperwork due to the mortgage crisis and thousands of foreclosures per month. This firm is one of the largest foreclosure firms in the State. This firm appears to be one of Docx, LLC a/k/a Lender Processing Services’ clients, who this office is also investigating.
AG unit handling case: Economic Crimes Division in Ft. Lauderdale, Florida
View contact information for Ft. Lauderdale.
Related Stories:

MISSION: VOID Lender Processing Services “Assignments” (LPS)

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



Posted in DOCX, florida default law group, foreclosure fraud, Lender Processing Services Inc., LPSComments (4)

Lender Processing Services (LPS): "Many of these people are gaming the system"

Lender Processing Services (LPS): "Many of these people are gaming the system"


Dear Mr. Jadlos,

Exactly who is gaming what sir? Please see this post and lets call it BULLSHIT! 

Foreclosure Backlog Helps Troubled Borrowers

21 April 2010 @ 03:03 pm EDT

An estimated 1.4 million borrowers have failed to pay their mortgages in more than a year, but continue to live in the properties, according to Lender Processing Services, which tracks mortgages on 40 million homes.

Under the new government regulations, it takes banks 14 months to evict nonpaying borrowers – longer in some states. “Many of these people are gaming the system,” said Ted Jadlos, a managing director at Lender Processing.

Also, banks aren’t in a hurry because once they take possession of a property they must write down its value to reflect market price. Plus, unoccupied homes are more likely to fall into disrepair or be vandalized.

Some analysts predict that this shadow inventory will cause prices to slide further, but so far it’s not happening.

Reprinted from REALTOR® Magazine Online with permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright

Posted in concealment, conspiracy, corruption, DOCX, FIS, foreclosure fraud, foreclosure mills, Former Fidelity National Information Services, fraud digest, Law Offices Of David J. Stern P.A., Lender Processing Services Inc., LPS, Lynn Szymoniak ESQ, robo signer, robo signersComments (3)

MISSION: VOID Lender Processing Services "Assignments" (LPS)

MISSION: VOID Lender Processing Services "Assignments" (LPS)


Before the great article AMIR EFRATI and CARRICK MOLLENKAMP wrote in The Wall Street Journal called U.S. Probes Foreclosure-Data Provider:Lender Processing Services Unit Draws Inquiry Over the Steps That Led to Faulty Bank Paperwork and then my post LENDER PROCESSING SERVICES (LPS) Hits Local NEWS!, many recall the BOGUS ASSIGNMENTS 2…I’m LOVING this!! LPS DOCx ADMISSIONS SEC 10K ROOFTOP SHOUT OUT! &  BOGUS ASSIGNMENTS 3…Forgery, Counterfeit, Fraud …Oh MY! posts.

Lynn Szymoniak, ESQ. of Fraud Digest precise skills unraveling this massive scheme has placed spot lights and raised many eyebrows on Foreclosure Mill’s strategies and what they are fabricating with the help of LPS on the courts. One can read EXTRA! EXTRA! Read All about the misconduct of Lender Processing Services f/k/a FIDELITY a/k/a LPS and Fidelity’s LPS Secret Deals With Mortgage Companies and Law Firms to witness some cases of alleging fraud.

Lynn recently wrote an Open Letter to Honorable Judges in Foreclosure and Bankruptcy Proceedings.

Lender Processing Inc. is the TIP of The Pyramid; please click the link to see their admission to this whole scheme of fraud in question. As it turns out Big Brother has been watching! Anyone want shares NOW?? Goldman had met with LPS on 2/23 in a GS’s Tecnology and Internet Confrence Presentation. In turn of events following the Wall Street Journal story and amongst many other media articles displaying LPS’s on-going investigations, Brian Chip’s article on SmarTrend identified a Downtrend for Lender Processing Services (NYSE: LPS) on March 31, 2010 at $38.26 stating “In approximately 2 weeks, Lender Processing Services has returned 3.3% as of today’s recent price of $36.99. Lender Processing Services is currently below its 50-day moving average of $38.94 and below its 200-day moving average of $37.98. Look for these moving averages to decline to confirm the company’s downward momentum”. Then two days later LPS (NYSE: LPS) climbed 1.16% to $37.42 after Goldman Sachs upgraded the company’s share from Neutral to Buy with an one year price target of $48. How lucky right? So I guess GS has every right to upgrade LPS since their last meeting with them on possible involvement. But the world is now well aware of GS’s shenanigans thanks to LOUISE STORY and GRETCHEN MORGENSON’s article in the New York Times U.S. Accuses Goldman Sachs of Fraud: THE NEW YORK TIMES, According to the complaint, Goldman created Abacus 2007-AC1 in February 2007, at the request of John A. Paulson, a prominent hedge fund manager who earned an estimated $3.7 billion in 2007 by correctly wagering that the housing bubble would burst. Should we put any vailidity into their ratings or upgrades? NOT!

The good thing that came along the 10’s of thousands of visits within the last month, this blog has been used in several court houses.

CHEER UP, ONWARD!

Joining efforts along with 4closurefraud’s beautifully WRITTEN IN WEASEL, SO GET OUT YOUR DICTIONARY OF WEASELEASE – FNF, FIS, DOCX, LPS and ForeclosureHamlet’s amazing article Stopping A Defective Title Wave With A Coupla Outstretched Helping Hands. They have knocked on doors, got media attention and ran with Homeowners and Attorneys Meet in Tallahassee To Celebrate Homeowner Rights And The Rule of Law with the help of attorney’s Matthew Weidner, Thomas Ice and others!

Today I am happy to say progress is in the making!

Please pass out the samples of these video’s below…

We are being heard LOUD & CLEAR!

Actual Court Filings throughout the nation of BOGUS Filings Below!

[youtube=http://www.youtube.com/watch?v=3tL8mNL4bYw]

[youtube=http://www.youtube.com/watch?v=hY4aRn6bWKg&hl=en_US&fs=1&]
[youtube=http://www.youtube.com/watch?v=hn-5KN_vvMw&hl=en_US&fs=1&]

[youtube=http://www.youtube.com/watch?v=LoSPTjd_PXM]
[youtube=http://www.youtube.com/watch?v=SD6XUboT1JM&hl=en_US&fs=1&]

[youtube=http://www.youtube.com/watch?v=kkMeuSB68E4&hl=en_US&fs=1&]

STOP THESE UNLAWFUL FORECLOSURES FROM CONTINUING ASAP.

SEND THIS TO EVERYONE YOU KNOW!

DON’T QUIT!

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



Posted in foreclosure fraudComments (8)

RALLY in TALLY Activists Heading to Tallahassee to Oppose Judicial Foreclosures…They are OFF!!

RALLY in TALLY Activists Heading to Tallahassee to Oppose Judicial Foreclosures…They are OFF!!


Just spoke with Foreclosure Hamlet & 4closurefraud:

They are on the bus and on their way to Jacksonville… Follow 4closurefraud tweets here

‘Angel’ of Foreclosure Defense April Charney will kick things off at the Rally in Tally!

Come hear April Charney speak to a crowd of fellow Foreclosure Fraud Fighters at 9 am!

Be sure to Join us at The Rally in Tally Wednesday April 21st, 2010 for a full day at the Capitol

Come tell YOUR Story

We Hope to See YOU There!

Posted in Rally in TallyComments (0)

Small Foreclosure Firm’s Big Bucks: Back Office Grossed $260M in 2009: ABAJOURNAL

Small Foreclosure Firm’s Big Bucks: Back Office Grossed $260M in 2009: ABAJOURNAL


Posted Apr 20, 2010 11:59 AM CDT
By Martha Neil

The Law Offices of David J. Stern has only about 15 attorneys, according to legal directories.

However, it’s the biggest filer of mortgage foreclosure suits in Florida, reports the Tampa Tribune. Aided by a back office that dwarfs the law firm, with a staff of nearly 1,000, the Miami area firm files some 5,800 foreclosure actions monthly.

The back-office operation, DJSP Enterprises, is publicly traded and hence must file financial reports with the Securities and Exchange Commission. It netted almost $45 million in 2009 on a little over $260 million in gross revenue that year. The mortgage meltdown of recent years apparently has been good to the company: In 2006, it earned a profit of $8.6 million on $40.4 million in revenue.

Stern, who is the company’s chairman and chief executive officer, could not be reached for comment, the newspaper says.

His law firm has been in the news lately, after one Florida judge dismissed a foreclosure case due to what he described as a “fraudulently backdated” mortgage document, and another said, in a hearing earlier this month concerning another of the Stern firm’s foreclosure cases, “I don’t have any confidence that any of the documents the court’s receiving on these mass foreclosures are valid.”

Earlier coverage:

ABAJournal.com: “Judge Dismisses Mortgage Foreclosure Over ‘Fraudulently Backdated’ Doc”

Posted in Law Offices Of David J. Stern P.A.Comments (1)

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

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