U.S. District Judge Dee Benson left open a legal window Wednesday for two South Jordan residents facing the loss of their house, one of the first cracks in federal court for Utahns trying to save homes from the wave of foreclosures swamping the state.
Benson declined to grant a motion to dismiss the lawsuit brought by Michael and Dana Geddes to halt the foreclosure on their home while they try to negotiate a loan modification. That means the couple and their attorney can proceed with gathering testimony and documents to try to prove their contention that the foreclosure process to which they’re being subjected does not comply with Utah and federal laws.
On Wednesday, consumer defense attorney Linda Tirelli added another outrageous example of mortgage servicer misbehavior to her growing file of hundreds of such abuses against New York homeowners.
The overcharging by a servicer — which manages mortgages day-to-day for lenders — to bill a homeowner in foreclosure over $2,700 for property inspections that cost just $9.60 a pop came as federal and state regulators are investigating shoddy practices by servicers and big banks, which are often one and the same.
It Teetered, It Tottered, It Was Bound to Fall Down
This article was adapted from “Reckless Endangerment: How Outsized Ambition, Greed and Corruption Led to Economic Armageddon,” by Gretchen Morgenson, a business reporter and columnist for The New York Times, and Joshua Rosner, a managing director at the independent research consultant Graham Fisher. The book is to be published on Tuesday by Times Books.
MARC COHODES had heard the stories.
Heard how these guys would give a mortgage to anyone — even to a corpse, the joke went. How the place was run like a frat house.
You wouldn’t believe the things that go on there, his brother-in-law had told him.
Act 48 specifies that public auctions of real property resulting from non-judicial foreclosures cannot take place on court property. According to the law and effective immediately, non-judicial foreclosure auctions may no longer be held on judiciary grounds and are to be held at state buildings designated by the Department of Accounting and General Services. Judicial foreclosure auctions may continue to be held on court grounds.
MARK C. DILLON, J.P.
DANIEL D. ANGIOLILLO
ARIEL E. BELEN
SHERI S. ROMAN, JJ.
2010-03065
2010-05864
(Index No. 6174/09)
Aurora Loan Services, LLC, respondent,
v
Steven Weisblum, et al., appellants, et al., defendants.
Excerpt:
In order to commence a foreclosure action, the plaintiff must have a legal or equitable interest in the mortgage (see Wells Fargo Bank, N.A. v Marchione, 69 AD3d 204, 207). A plaintiff [*7]has standing where it is both (1) the holder or assignee of the subject mortgage and (2) the holder or assignee of the underlying note, either by physical delivery or execution of a written assignment prior to the commencement of the action with the filing of the complaint (see Wells Fargo Bank, N.A. v Marchione, 69 AD3d at 207-209; U.S. Bank, N.A. v Collymore, 68 AD3d 752, 754). Thus, as long as the plaintiff can establish its lawful status as assignee, either by written assignment or physical delivery, prior to the filing of the complaint, the recording of a written assignment after the commencement of the action does not defeat standing (see U.S. Bank, N.A. v Collymore, 68 AD3d at 754). We find that Aurora has failed to make this showing.
Here, the note and mortgage at issue were originally comprised of a first and second note and mortgage, which were consolidated into a single note in the amount of $704,000 and the single lien reflected in the CEMA. The document submitted by Aurora in support of its motion for summary judgment and in opposition to the Weisblums’ cross motion purports to be an assignment of only the first note and mortgage in the amount of $672,000 to Aurora by MERS, as nominee for Lehman Brothers. However, Aurora failed to produce evidence of MERS’ authority to assign the first note. On its motion for summary judgment, Aurora failed to provide a copy of the first note but submitted a copy of the original first mortgage and a series of assignments culminating in the purported assignment of the first note and mortgage to Aurora. The first mortgage was originally held by MERS, as nominee for Credit Suisse; the mortgage document recites that the lender on the first note is Credit Suisse, but there is nothing in this document to establish the authority of MERS to assign the first note. MERS later assigned the first mortgage “together with” the underlying note, and thereafter, successive assignees assigned the first mortgage “together with” the underlying note. While, in some circumstances, the assignment of a note may effect the transfer of the mortgage as an inseparable incident of the debt (see U.S. Bank, N.A. v Collymore, 68 AD3d at 754), here the assignment instruments purport to do the opposite, without any evidence that MERS initially physically possessed the note or had the authority from the lender to assign it (see LPP Mtge. Ltd. v Sabine Props, LLC, 2010 NY Slip Op 32367[U]; OneWest Bank, F.S.B. v Drayton, 29 Misc 3d 1021, 1038-1041; Bank of N.Y. v Alderazi, 28 Misc 3d 376; cf. Mortgage Elec. Registration Sys., Inc. v Coakley, 41 AD3d 674, 674-675).
Moreover, Aurora produced no documents indicating an assignment to it of the second note and mortgage or of the entire consolidated note and CEMA in the amount of $704,000. Although Aurora’s vice president averred in conclusory fashion that Aurora became holder of the mortgage which is the subject of the action “by delivery without a written assignment,” the affiant failed to give any factual detail of a physical delivery of both the consolidated note and the CEMA to Aurora prior to the commencement of the action. Thus, Aurora failed to establish its standing to commence the action.
Accordingly, the appeal from the order dated February 25, 2010, is dismissed, as that order was superseded by the order dated May 19, 2010, made upon renewal. The order dated May 19, 2010, is reversed insofar as appealed from, on the law and, upon renewal, the order dated February 25, 2010, is vacated, the plaintiff’s motions for summary judgment on the complaint and for an order of reference are denied, and the Weisblums’ cross motion for summary judgment dismissing the complaint insofar as asserted against them is granted.
DILLON, J.P., BELEN and ROMAN, JJ., concur.
ORDERED that the appeal from the order dated February 25, 2010, is dismissed, as that order was superseded by the order dated May 19, 2010, made upon renewal; and it is further,
ORDERED that the order dated May 19, 2010, is reversed insofar as appealed from, on the law, and, upon renewal, the order dated February 25, 2010, is vacated, the plaintiff’s motions for summary judgment on the complaint and for an order of reference are denied, and the cross motion of the defendants Steven Weisblum and Patti Weisblum for summary judgment dismissing the complaint insofar as asserted against them is granted; and it is further,
ORDERED that one bill of costs is awarded to the defendants Steven Weisblum and Patti Weisblum.
ENTER:
Matthew G. Kiernan
Clerk of the Court
Footnotes
Footnote 1:1 Former RPAPL 1304(5)(c) and (d), defined “subprime home loan” as a home loan consummated between January 1, 2003, and September 1, 2008, in which, for a first lien mortgage loan, the annual percentage rate exceeded three percentage points over the yield on treasury securities, or for a subordinate mortgage lien, the annual percentage rate exceeded five percentage points over the yield on treasury securities. The parties here do not dispute that the consolidated loan at issue falls within the definition of subprime.
Measure puts more teeth into 2009 law, moves to House for final action
In regular session this afternoon, the state Senate approved legislation that updates law enacted in 2009 that helps protect municipalities from the disrepair and blight of foreclosed properties in the state of Connecticut.
The 2009 bill required a registration system to track the owners of uninhabited one-to-four family dwellings obtained by strict foreclosure or foreclosure by sale and allowed municipalities to enforce any provision of the General Statutes or any municipal ordinance on the repair or maintenance of uninhabited real estate.
“This action puts a lot more teeth into issue that is rampant in not just our state, but many other states across the country,” said Senator Duff. “The blight that many times comes along with foreclosed properties is more than unattractive. It brings down neighboring property values and leads to an increase of neighborhood crime. As we continue to cope with the foreclosure crisis in our state, this bill gives municipalities even greater opportunity to enforce blight ordinances and combat some of the negative effects that accompany foreclosure.”
Additionally, property owners would no longer be allowed to register with the Mortgage Electronic Registration System (MERS) and instead would be required to register with the local municipal town clerk.
“I think we found a white elephant, flying pig and unicorn”
REUTERS–
Goldman Sachs Group Inc (GS.N) executives have good reason to be worried about the risk of receiving subpoenas from the Justice Department, and investors should be concerned too.
The U.S. government has a real chance of finding inconsistencies between Goldman executives’ testimony to Congress and their internal documents, which means subpoenas could turn into something more serious, lawyers said.
This is not a glamorous approach to law enforcement, It is a slow laborious grind. As I presented to the National Association of Attorneys General, there are 10 major areas of bank and mortgage fraud:
1. MERS
2. Mortgage Pools (Warranties & Reps)
3. Bad Securitization (Quality)
4. “Misplaced” Mortgage Notes
5. Force-Placed Insurance
6. Illegal “Pyramid” Servicing Fees
7. Document Fraud for Sale
8. False Affidavits, Perjury (Robo-Signing)
9. Foreclosure Mills, Process servers exasperate problem
10. Active Servicemen losing homes while on tour of duty
Of this list, five issues are prosecution-ready, where individual states have jurisdiction. These include: 1) Force-Placed Insurance; 2) Illegal “Pyramid” Servicing Fees; 3) Fraud Documents for Sale; 4) False Affidavits, Perjury (Robo-Signing) and 5) Foreclosure Mills, Process servers.
DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
January Term 2011
TATYANA NUDEL,
v.
FLAGSTAR BANK, FSB, UNKNOWN SPOUSE OF TATYANA NUDEL,
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. AS
NOMINEE FOR FLAGSTAR BANK, FSB, PALM BEACH COUNTY,
ADORNO & YOSS, LLP, UNKNOWN TENANT(S) IN POSSESSION, and
ALL OTHER UNKNOWN PARTIES
No. 4D10-3001
[May 18, 2011]
GROSS, C.J.
EXCERPT:
On June 30, 2009, Flagstar Bank sued Tatyana Nudel to foreclose a mortgage. According to the mortgage, Flagstar was defined as the lender” which lent Nudel $220,000; Mortgage Electronic Registration Systems, Inc., (“MERS”) was the “mortgagee” under the instrument, acting as a “nominee” for Flagstar; and Nudel was the “[b]orrower.” Under section 22 of the mortgage, the “lender” Flagstar was entitled to reasonable attorney’s fees and costs in foreclosure proceedings. MERS assigned the mortgage to Flagstar on August 21, 2009.
Nudel moved to dismiss the complaint, arguing that Flagstar lacked standing because MERS did not assign the bank the mortgage until after the bank filed the complaint. See Fla. R. Civ. P. 1.140(b). The circuit court agreed, granted the motion, and dismissed the case without prejudice on March 29, 2010.1 Nudel moved for attorney’s fees and costs on April 15, relying in part on the attorney’s fee provision in the mortgage. The circuit court denied the motion for fees, accepting Flagstar’s argument that Nudel had waived entitlement to fees under Stockman v. Downs, 573 So. 2d 835 (Fla. 1991), and Sardon Foundation v. New Horizons Service Dogs, Inc., 852 So. 2d 416 (Fla. 5th DCA 2003), because she had not sought attorney’s fees in her motion to dismiss.
[…]
For the purpose of determining a “prevailing party” under section 57.105(7), we see no reason to distinguish between a voluntary dismissal without prejudice and a court’s involuntary dismissal without prejudice. This same conclusion was reached in Bank of New York v. Williams, 979 So. 2d 347 (Fla. 1st DCA 2008), where the first district affirmed an award i f prevailing party attorney’s fees on facts similar to those in this case. There, the bank sued the defendant to foreclose a mortgage. Id. at 347. The defendant moved to dismiss because the bank failed to show that it owned the mortgage and promissory note and, thus, it lacked standing to sue. Id. The court dismissed a complaint and amended complaint without prejudice; “[w]hen the Bank declined to file a second amended complaint, the trial court dismissed the amended complaint with prejudice.” Id. The bank did not appeal this order, but instead instituted a new foreclosure action. Id. In the first action, the court awarded the defendant prevailing party attorney’s fees and costs. Id.
If you’re a foreclosure defense lawyer doing work in Broward County, there are lots of reasons to think Chief Judge Victor Tobin doesn’t side with homeowners. In his tenure at the top of the county’s legal system, he has instituted rules that make it tougher on homeowners to fight foreclosures and resisted changes that would protect them from cases being rushed through the system.
The Office of the Comptroller of the Currency met with the 14 mortgage servicers Friday over details in the recently signed consent orders, sources familiar with the matter confirmed.
The orders are meant to settle recent foreclosure investigations. According to the orders, servicers must retain an independent firm to review foreclosure actions pending between Jan. 1, 2009 and Dec. 31, 2010. The review will be conducted to determine any financial injury to borrowers caused by the errors, misrepresentations or other deficiencies.
American Home Mortgage Servicing, one of the largest subprime mortgage servicers, is urging the U.S. Treasury to organize a plan to boost principal reductions for up to 1 million homeowners by unlocking loans from securities.
The servicer is asking for amendments to contracts that govern treatment of delinquent loans in mortgage securities. Currently, most contracts don’t allow sales of loans prior to foreclosure, and in many cases don’t permit a servicer to lower principal when a loan is modified.
In a turn of events that consumer advocates are celebrating, Florida’s infamous “rocket docket” foreclosure courts may be on the verge of extinction, thanks to state budget cuts.
According to a document obtained by The Huffington Post, Palm Beach County has already started cancelling foreclosure cases. “Because of the lack of funding from the Florida legislature, judges will be unable to preside over foreclosure trials beginning July 1, 2011,” the order reads.
Sponsored by Senator BONAMICI; Senators BATES, BOQUIST
SUMMARY
The following summary is not prepared by the sponsors of the measure and is not a part of the body thereof subject
to consideration by the Legislative Assembly. It is an editor’s brief statement of the essential features of the
measure.
Provides that failure to include required modification form with notice of sale, failure to comply with provisions governing loan modifications and failure to record required affidavit of compliance with loan modification requirements are unlawful practices subject to enforcement under unlawful trade practices law. Prescribes time within which beneficiary or beneficiary’s agent must file affidavit for recording. Requires trustee to send copy of required affidavit to Department of Justice.
Requires Department of Consumer and Business Services by rule to prescribe form of affidavit and specifies minimum requirements for affidavit.
Removes certain exemptions from requirement to comply with law governing mortgage loan modifications.
Permits grantor to record affidavit stating that grantor requested loan modification in accordance with law and by applicable deadline.
Requires trustee to be resident of this state or have registered agent that meets certain qualifications.
ATTORNEY GENERAL GEORGE JEPSEN
STATEMENT BY ATTORNEY GENERAL GEORGE JEPSEN
CONCERNING MORTGAGE FORECLOSURE INVESTIGATION
For immediate release ……………………………………..TUESDAY MAY 17, 2011
“The multistate investigation of the nation’s largest mortgage servicing companies confirms what my office has been told by thousands of Connecticut consumers, that these banks have done an incredibly poor job in dealing with the mortgage foreclosure mess they were instrumental in creating. As a result, millions of families have needlessly suffered, homeowners have lost billions of dollars in equity, and the real estate market continues to stagnate. Time is of the essence to fix this problem.
“Thus far, the national servicers have been unwilling to step up to the plate with the money necessary to address the full scope of the problems they themselves created. I believe they face substantial legal liability for their clearly illegal behavior should states be forced to sue. After being bailed out by American taxpayers, the banks owe those same taxpayers a real effort to partner with state and federal officials to clean up this mess.”
Attorney General Jepsen is a member of the National Association of Attorneys General multi-state task force seeking resolution of the mortgage foreclosure crisis
SHANNON S. BARABAS A/K/A SHANNON
SHEETS BARABAS,1
Cross-Claim Defendant,
RECASA FINANCIAL GROUP, LLC,
Appellee-Plaintiff/Cross-Claim Defendant,
and
RICK A. SANDERS,
Appellee/Third-Party Defendant.
EXCERPT:
9. The [c]ourt further finds that [Citi?s] Relief Motion did not provide any notice to ReCasa and the creditors of the [b]ankruptcy [p]roceeding as to any interest of [Citi] in the Real Estate and as to Irwin Mortgage.
***
16. The [c]ourt further finds that [Citi?s] September 22, 2008 Relief Motion and the [b]ankruptcy [p]roceeding could not provide notice of any interest obtained by [Citi] pursuant to the [a]ssignment of [m]ortgage since the [a]ssignment of [m]ortgage was executed more than six months after the filing of the Relief Motion and after the termination and closure of the [b]ankruptcy [p]roceeding.
17. The [c]ourt further finds that no one has provided any evidence to this [c]ourt of the existence of any document providing notice of [Citi?s] interest in the Real Estate and the Irwin Mortgage prior to the filing of ReCasa?s June 13, 2008 [c]omplaint.
18. The [c]ourt further finds that no one has provided to this [c]ourt any document evidencing and providing notice of [Citi?s] interest in Real Estate and Irwin Mortgage other than [Citi?s] submission of an April 1, 2009 [a]ssignment of [m]ortgage recorded 22 months after the filing of ReCasa?s [c]omplaint and six months after the [c]ourt?s September 9, 2008 [d]efault [j]udgment and order of foreclosure.
19. The [c]ourt further finds that pursuant to Indiana Code [§] 32-29-8-2 and the findings herein, [Citi] failed to have its [a]ssignment of [m]ortgage properly placed on the mortgage record, and [Citi] is bound by this [c]ourt?s September 9, 2008 [d]efault [j]udgment, September 16, 2008 [a]mended [d]efault [j]udgment, and order of foreclosure in this cause of action as if [Citi] were a party to ReCasa?s [c]omplaint.
[…]
Ultimately, the Kansas supreme court found that in this case, MERS was little more than a “straw man” for Millennia (and later Sovereign). Id. at 166. The supreme court also noted that the mortgage repeatedly referenced the lender—not MERS—with respect to how notice was to be provided. Id. at 165-166. As such, the supreme court held that
[e]ven if MERS was technically entitled to notice and service in the initial foreclosure action—an issue we do not decide at this time—we are not compelled to conclude that the trial court abused its discretion in denying the motion to vacate default judgment and require joinder of MERS and Sovereign.
Id. at 168.5
We choose to follow the persuasive reasoning of the Landmark case because it is factually similar to the present case. Like Landmark, Citi seeks to have the default judgment set aside based on the fact that it received its interest from MERS, which served as the mortgagee “solely as nominee” for Irwin Mortgage. (Appellant?s App. p. 88). Thus, when Irwin Mortgage filed a petition and disclaimed its interest in the foreclosure, MERS, as mere nominee and holder of nothing more than bare legal title to the mortgage, did not have an enforceable right under the mortgage separate from the interest held by Irwin Mortgage. With respect to notice, just as the mortgage in Landmark referenced all notice to be sent to the lender, here, too, the mortgage states that notice to the lender should be sent to the lender?s address, or “10500 Kincaid Drive, Fishers, IN 46038,” which is the address of Irwin Mortgage. (Appellant?s App. p. 88). Thus, we find that the trial court did not abuse its discretion when it declined to set aside ReCasa?s amended default judgment.6
Fannie Mae — not the courts — should decide what, if anything, is owed to former foreclosure attorney David J. Stern, the government-sponsored enterprise alleges in court filings.
The Law Offices of David J. Stern filed more than 25 lawsuits against servicers in recent months alleging they owe the law firm more than $34 million in unpaid invoices. On Monday, it filed its latest case, a suit against Lender Processing Services (LPS: 28.36 -0.39%), a firm that provides mortgage processing and technology services.
Broward County Chief Judge Victor Tobin is resigning from the bench to work for the Law Offices of Marshall C. Watson, a South Florida firm that recently paid $2 million to settle a state investigation into its foreclosure practices.
Tobin, 64, announced late Tuesday in a four sentence e-mail to staff at the 17th Circuit Court that his last day will be June 30.
The news shocked foreclosure defense attorneys who said it is unusual for a judge with three years remaining in his term to leave the bench, and questioned the move to a so-called “foreclosure mill.”
Recent Comments