If my fraud senses are correct, I anticipate foreclosure mills and those document mills, you know who I speak of to get the first whack.

The only thing I see keeping him from his promise is his Co-Chair in charge.

LA Times-

New York Atty. Gen. Eric Schneiderman, who was tapped by President Obama to lead a new Financial Fraud Enforcement Task Force, promised Wednesday to move aggressively to coordinate state and local investigations into the causes of the subprime mortgage market meltdown.

“We’re undertaking a more coordinated effort to pull together all of the various strands of investigations relating to the conduct that created the mortgage-backed securities bubble and led to the market crash,” Schneiderman told reporters in Washington after an event at the Consumer Financial Protection Bureau.

“There have been investigations going on in various states and branches of the federal government,” he said. “We’re now making a concerted effort to pull everything together and move forward aggressively to address these issues.”

He said the task force would go after “every aspect of the conduct that created the bubble and crash,” including the origination of mortgages and the packaging of them into securities.

[LA TIMES]

image: ibtimes

PROSECUTING MORTGAGE DOCUMENT FRAUD

In the State of the Union address on January 24, 2012, President Barack Obama announced the creation of a special unit within the Financial Fraud Enforcement Taskforce to deal with mortgage origination and securitization abuses:

And tonight, I am asking my Attorney General to create a special unit of federal prosecutors and leading state attorneys general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis.

This new unit will hold accountable those who broke the law,
speed assistance to homeowners, and help turn the page on an
era of recklessness that hurt so many Americans.

The members of the new Mortgage Securitization Abuses Unit were
identified as New York Attorney General Eric Schneiderman; Assistant
U.S. Attorney General Lanny Breuer, who currently heads the Criminal
Division at the Department of Justice; Robert Khuzami, Director of
Enforcement at the SEC; John Walsh, U.S. Attorney, District of
Colorado; and Tony West, Assistant Attorney General, Civil Division,
Department of Justice.

Later in the evening, New York Attorney General Eric Schneiderman
released the following statement:

I would like to thank President Obama for his leadership in the
creation of a coordinated investigation that marshals state and
federal resources to bring justice for the victims of the
misconduct that caused the mortgage crisis.

In coordination with our federal partners, our office will
continue its steadfast commitment to holding those responsible
for the economic crisis accountable, providing meaningful relief
for homeowners commensurate with the scale of the
misconduct, and getting our economy moving again.

The American people deserve a robust and comprehensive
investigation into the global financial meltdown to ensure
nothing like it ever happens again, and today’s announcement
is a major step in the right direction.

New York Attorney General Schneiderman and Delaware Attorney
General Beau Biden have been among the most outspoken of those in
law enforcement regarding the prosecution of crimes relating to
mortgage securitization. In May, 2011, Attorney General
Schneiderman’s office announced probes of two Florida firms, Lender
Processing Services and Nationwide Title Clearing. This office also
announced probes into the mortgage securitization practices of major
investment banks Goldman Sachs, Morgan Stanley, Deutsche Bank
and UBS.

Attorneys General Schneiderman and Biden have repeatedly
announced their opposition to any grant of immunity from criminal
prosecution to those involved in illegal acts involving mortgage
securitization.

Fabrication of mortgage documents is one of the major
unaddressed crimes involving mortgage securitization. False
documents were created to convince homeowners that mortgagebacked
trusts owned their homes and had the legal right to foreclose.
Based on these documents, hundreds of thousands of homeowners
forfeited their homes. Every day, tens of thousands of homeowners
lose their battle to get local foreclosure judges to recognize that the
documents presented by the banks and mortgage companies are
fraudulent.

Those few County Recorders who have conducted in-depth
examinations of the documents have found widespread abuses that
occurred over at least seven years. County Recorders John O’Brien of
Massachusetts and Jeff Thigpen of North Carolina have declared their
offices as “crime scenes.”

These documents were created in large part because the mortgage
securitizers never obtained the mortgage documents they promised to
obtain. Investors and the SEC believed that the securitizers had
obtained properly endorsed mortgage notes and mortgage
assignments and had recorded every change of ownership on the
MERS system as promised.

“Providing meaningful relief for homeowners commensurate with
the scale of the misconduct” is a tremendous, but achievable goal.
Congratulations to Attorney General Schneiderman for setting this goal.

[ipaper docId=79356900 access_key=key-12letnx8gj93rmf8pfvc height=600 width=600 /]

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

SF Bay News-

The Wall Street Journal reportsthat the Obama administration is now engaged in heavy arm-twisting to get the 50 state attorneys general to agree to a settlement with five major banks in the “robo-signing” scandal. The scandal involves employees signing names not their own, under titles they did not really have, attesting to the veracity of documents they had not really reviewed. Investigation is revealing that it did not just happen occasionally but was an industry-wide practice, dating back to the late 1990s, and that it may have invalidated the titles to tens of thousands of homes.

The settlement would let Wall Street bankers off the hook for crimes that would land the rest of us in jail – fraud, forgery, securities violations and tax evasion – raising some interesting legal issues. But the question explored here is something else: Why were the banks doing it? The alleged justification – that they were so busy they cut corners – hardly seems credible given the extent of the practice.

[SAN FRANCISCO BAY NEWS]

You all should have seen twitter light up with all sorts of confusion, but Abigail sums it all up in this one single piece.

Abigail C. Field-

President Obama,

you’re right, critics of yours from the left–people like me–love the idea of NY Attorney General Eric Schneiderman chairing a “special unit to investigate misconduct and illegalities that contributed to both the financial collapse and the mortgage crisis” that would be “part of a new Unit on Mortgage Origination and Securitization Abuses.” But that’s not what you’re announcing.

Schneiderman isn’t chairing anything. He’s Co-Chairing. That’s a huge difference. If he’s Chair he’s in charge. If he’s Co-Chair he needs consensus. And who is he Co-Chairing with? Lanny Breuer. That’s unacceptable.

[REALITY CHECK]

Kinda wondering why Eric never filed a lawsuit? I’m trusting him to continue to do as he promised and hold the banks accountable, this meaning criminal.

His Co-Chair’s firm represented MERS…is leading this unit and they have been covering up for the banks for years!

And thinking out loud but if this task force is being created either because the DOJ hasn’t done an investigation, or because the 3 yr DOJ investigation is a failure, how does Holder keep his job? I think we have an idea.

And as Neil Barofsky, Former IG for TARP, put it “So, since this state AGs have done such a thorough job on robosigning, we’re now reassigning 3yrs of DOJ fed securities fraud to them? Plz”

I wasn’t willing to provide a release that … released conduct that hadn’t been investigated, essentially. So we started our own investigation.

– Eric Schneiderman, New York attorney general

HuffPO-

During his State of the Union address tonight, President Obama will announce the creation of a special unit to investigate misconduct and illegalities that contributed to both the financial collapse and the mortgage crisis.

The office, part of a new Unit on Mortgage Origination and Securitization Abuses, will be chaired by Eric Schneiderman, the New York attorney general, according to a White House official.

Schneiderman is an increasingly beloved figure among progressives for his criticism of a proposed settlement between the 50 state attorneys generals and the five largest banks. His presence atop this new special unit could give it immediate legitimacy among those who have criticized the president for being too hesitant in going after the banks and resolving the mortgage crisis. He will be in attendance at Tuesday night’s State of the Union address.

“The goal of this joint investigation will be threefold: to hold accountable any institutions that violated the law; to compensate victims and help provide relief for homeowners struggling from the collapse of the housing market, caused in part by this wrongdoing; and to help us finally turn the page on this destructive period in our nation’s history,” reads a White House document outlining the objectives.

[HUFFINGTON POST]

Lets say it all together, what these banks did, was & continue to do is plain FRAUD…FRAUD….FRAUD!!!

What part of FRAUD do these States not understand?

Business week-

State attorneys general reviewed a proposed settlement with banks over foreclosure and mortgage- servicing practices that negotiators are pressing to complete as Delaware said it would reject a deal said to total $25 billion.

Representatives of Democratic attorney general offices met at a Chicago hotel yesterday to discuss the negotiated terms and ask questions, said Iowa Attorney General Tom Miller. Miller, who is helping to lead talks, said an agreement with the banks is getting closer.

“There are still issues to be worked out,” Miller said in an interview. “This is one step along the way, and it was a very productive day.”

[BUSINESS WEEK]

Letter Documents Committee’s Effort to Protect Banks While Attacking New Consumer Protection Agency

Washington, DC (Jan. 23, 2012) – Today, Rep. Elijah E. Cummings, Ranking Member of the House Committee on Oversight and Government Reform, sent a letter to Chairman Darrell Issa renewing his requests to call top executives from the nation’s biggest mortgage banks to testify and issue subpoenas for documents relating to widespread foreclosure abuses.  Cummings’ letter documents the contrast between the Committee’s lax investigation of mortgage servicing companies to date and its aggressive scrutiny of the new Consumer Financial Protection Bureau (CFPB).

“Rather than using its substantial investigative powers to protect American consumers from the abuses of banks, the Committee has focused instead on attacking the new agency created by Congress to protect these same consumers,” Cummings wrote.

As Cummings’ letter noted, in its first full year of investigations this Congress, the Committee held 118 hearings with 342 witnesses, but not a single bank executive was called to testify on the foreclosure crisis.  In contrast, the letter noted that tomorrow the Committee will hold its third hearing with officials from the CFPB.

Cummings’ letter also highlighted that in 2011, the Committee issued more than 200 detailed document requests and subpoenas, but none sought documents relating to wrongful foreclosures or abusive lending practices.  The only exception was a joint document request to Bank of America, which has not produced a single responsive document.  In contrast, the Committee has received hundreds of pages of documents in response to detailed document requests regarding unfounded allegations that CFPB acted outside its authority in providing advice during negotiations toward a possible settlement with mortgage servicing companies relating to foreclosure abuses.

“Based on the witnesses the Committee has called and the documents it has requested so far this Congress, it appears that the Committee is more interested in protecting powerful banks than vulnerable American consumers,” Cummings wrote.  “I do not believe these priorities reflect the best interests of the American public.  Given the extent of the foreclosure crisis and the harm it has caused our constituents, I sincerely hope we can work together to reverse this trend in the coming year.”

Below is the full letter:

January 23, 2011

The Honorable Darrell E. Issa
Chairman
Committee on Oversight and Government Reform
U.S. House of Representatives
Washington, DC 20515

Dear Mr. Chairman:

     At the outset of the 112th Congress, the Oversight Committee unanimously adopted an oversight plan that included a proposal I offered to “examine the foreclosure crisis including wrongful foreclosures and other abuses by mortgage servicing companies.”  Although the Committee has taken some preliminary steps to examine these issues, to date it has failed to conduct a full, fair, or thorough investigation of the widespread abuses committed by mortgage servicing companies against American families, particularly military servicemembers. 

     In its first full year of investigations this Congress, the Committee held 118 hearings with 342 witnesses, but not a single bank executive was called to testify on the foreclosure crisis, despite multiple requests from me and other Committee Members.  In addition, in 2011, the Committee issued more than 200 detailed document requests and subpoenas, but none sought documents relating to wrongful foreclosures or abusive lending practices.  The only exception was a document request you and I sent jointly to Bank of America, but it has not produced a single responsive document, and the Committee has taken no action to compel production. 

     Rather than using its substantial investigative powers to protect American consumers from the abuses of banks, the Committee has focused instead on attacking the new agency created by Congress to protect these same consumers.  Tomorrow, the Committee will hold its third hearing with officials from the Consumer Financial Protection Bureau (CFPB).  In addition, the Committee has received hundreds of pages of documents in response to a detailed document request you sent in June 2011, as well as numerous questions for the record after Committee hearings, regarding allegations that CFPB acted outside its authority in providing advice during negotiations toward a possible settlement with mortgage servicing companies relating to foreclosure abuses.

     Based on the witnesses the Committee has called and the documents it has requested so far this Congress, it appears that the Committee is more interested in protecting powerful banks than vulnerable American consumers.  I do not believe these priorities reflect the best interests of the American public.  Given the extent of the foreclosure crisis and the harm it has caused our constituents, I sincerely hope we can work together to reverse this trend in the coming year.

Bank Abuses Neglected

     Recent mortgage lending practices and the resulting collapse of housing prices have cost American households $7 trillion, and millions of households are in, or facing the possibility of, foreclosure.  One of the most troubling aspects of the crisis is the continued allegations of abusive and fraudulent practices by the nation’s banks against homeowners. 

     In April 2011, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the then-Office of Thrift Supervision released an Interagency Review of Foreclosure Policies and Practices, which identified “critical weaknesses” in the foreclosure practices of 14 federally regulated mortgage servicers.  The Review found that these weaknesses resulted in “unsafe and unsound practices and violations of applicable federal and state law and requirements.”  The Review indicated the regulatory agencies found multiple examples of foreclosures that should not have proceeded, including illegal foreclosures against military homeowners in violation of the Servicemembers Civil Relief Act.  Thousands of affected servicemembers have been identified, and three major banks have been forced to pay unprecedented, multimillion dollar settlements related to the abuses. 

    Since becoming Ranking Member, I have written to you multiple times highlighting the need to investigate abusive and improper conduct against homeowners.  In December 2010, I requested that the first hearing convened by the Committee consider alleged flawed and fraudulent practices by the mortgage servicing industry. 
In January 2011, I asked that you invite the Executive Vice President and General Counsel of JPMorgan Chase to testify, which you refused. 

     In February, the Committee adopted its oversight plan for the 112th Congress, which included a commitment I proposed to “examine the foreclosure crisis including wrongful foreclosures and other abuses by mortgage servicing companies.”  At the time, you commended my efforts and stated, “I believe we now have a plan that can be unanimously adopted.”

     Later that month, I asked that you join me in requesting from the ten largest mortgage servicing companies key documents relating to alleged illegal foreclosures and inflated fees charged to homeowners.  When you did not act, I sent letters to those companies myself. 

     In May, I requested that you issue subpoenas to the six mortgage servicing companies that had refused to comply voluntarily with my February requests for documents.  You did not issue the subpoenas.

     In June, I sent you a letter providing additional information on mortgage servicer abuses and reiterating the need for subpoenas for documents relating to illegal foreclosures, inflated fees, and other abuses being committed against military servicemembers.  Again, you did not act.

     During a hearing in July, after receiving no indication that you planned to move forward, I moved to subpoena mortgage servicing companies that allegedly initiated or completed illegal foreclosures and committed other abuses against military servicemembers.  After suspending the hearing and consulting with staff, you agreed to join me in requesting documents relating to the abuses affecting U.S. servicemembers.

     To date, however, you have not sent these document requests.  Instead, you sent letters requesting that mortgage servicing companies provide narrative descriptions of violations they have committed and the steps they have taken to address them.  Although their responses were interesting and helpful, they did not include the production of any pre-existing documents that would be helpful to the Committee’s investigation. 

     The Committee has not used its full investigative power to protect American consumers or to thoroughly examine the numerous allegations of wrongdoing by mortgage servicers.  Among the 342 witnesses who were called to testify at our 118 Committee and subcommittee hearings in 2011, not a single bank executive was called to testify on the foreclosure crisis.  Though you issued over 200 document requests and subpoenas in 2011, only one bank – Bank of America – was asked to produce documents about wrongful foreclosure or abusive lending practices.  It still has not produced a single responsive document, and the Committee has taken no action to compel production. 

Bank Reform Efforts Scrutinized

     Instead of investigating the widespread abuses committed by banks against American homeowners, the Committee has repeatedly attacked efforts to protect consumers from financial abuse. 

     Tomorrow, the Committee will hold its third oversight hearing with leadership of the CFPB, a newly created federal agency charged with protecting ordinary American consumers from abusive, misleading, or confusing financial practices.  During the first two hearings, the majority repeatedly questioned the character of Professor Elizabeth Warren, who was charged with standing up the Bureau, and criticized the Bureau’s structure, funding, and regulatory authority, even though these were established by an act of Congress. 

     In addition, on June 20, 201l, you sent a letter along with TARP, Financial Services, and Bailouts of Public and Private Programs Subcommittee Chairman McHenry, Financial Services Chairman Spencer Baucus, and three Financial Services Subcommittee Chairmen, Representatives Shelly Moore Capito, Scott Garrett, and Randy Neugebauer, to the Treasury Department.  This letter included a wide-ranging request for the following documents:

All documents and communications between Elizabeth Warren or the CFPB and any State Attorney General, representative of any State Attorney General, and any federal agency or mortgage servicer, or any other potentially interested party, including plaintiffs’ attorneys preparing class action lawsuits, referring or reacting to mortgage servicing, foreclosures, or a possible settlement involving State Attorneys General from September 2010- present, relating in whole or in part to mortgage servicing or foreclosures or a possible settlement involving State Attorneys General from September 2010-present.

    You also sent a letter to the Treasury Department on August 15, 2011, with a series of detailed and far-reaching questions for the record following the Committee’s hearing with Professor Warren on July 14, 2011.  In response, CFPB has now produced hundreds of pages of responsive documents to the Committee showing that CFPB was providing helpful advice to state and federal authorities and appropriately preparing to carry out its critical mission to oversee the mortgage servicing industry. 
Now that the President’s appointment of Richard Cordray to be Director of the CFPB has activated the full panoply of the Bureau’s statutory authorities, Chairman McHenry’s invitation for Mr. Cordray to testify at tomorrow’s hearing appears to be motivated primarily by an effort to protect financial entities from the Bureau’s “new powers to broadly regulate consumer financial products and services.” 

     The Committee has also leapt to investigate other highly improbable allegations that banks have been victims of abuse.  On the basis of an anonymous tip and a press report, for example, you sent letters to five of the largest U.S. banks seeking documents about whether representatives of the Occupy Wall Street movement attempted to extort financial support from them.  The three banks that responded all refuted the allegations and stated clearly that they had not been subjected to any such abuses.

Renewal of Minority Requests

The foreclosure crisis is affecting millions of Americans across the country, devastating communities, and impairing our nation’s economic recovery.  I am particularly alarmed by increasing reports that U.S. servicemembers and their families have been illegally evicted from their homes and charged millions of dollars in unwarranted fees.  We cannot wait any longer to use the full authority of this Committee to investigate these actions.

In the context of a different investigation, you made a strong statement about the need for prompt action by the Committee. You stated:  “oversight delayed is often oversight denied.  I believe that path would be unacceptable to the American public.”  This same sense of urgency should apply even when the targets of the Committee’s investigation are banks.

To fulfill the Committee’s unanimously approved oversight agenda, and to adequately investigate abuses against our constituents, we must obtain responsive documents from mortgage servicing companies, and we must call top executives from the nation’s mortgage servicers to testify.  For these reasons, I renew my requests that you:

1. Issue subpoenas to Bank of America, Wells Fargo & Company, U.S. Bank N.A., PHH Mortgage, Suntrust Banks, Inc., and MetLife, Inc., which all refused to comply voluntarily with my previous document requests.
2. Invite top executives of JPMorgan Chase, Bank of America, Wells Fargo, Citibank, US Bank, Ally Bank, HSBC, and MetLife, to testify at a public hearing about abusive mortgage servicing practices, including illegal foreclosures of servicemembers, illegal and inflated fees, and wrongful foreclosures.With the start of the second session of the 112th Congress, I truly hope the Committee will take the side of the American people and begin work on these critical issues. 

Sincerely,

Elijah E. Cummings
Ranking Member

source: http://democrats.oversight.house.gov

[ipaper docId=79254788 access_key=key-7ietcltf12su0s9giiu height=600 width=600 /]

via: Leagle

 PATTERSON v. GMAC MORTGAGE, LLC

 Reginald A. Patterson and Diana V. Patterson, v. GMAC Mortgage, LLC.

 No. 2100490.

 Decided January 20, 2012.

 PER CURIAM.¹

Reginald A. Patterson and Diana V. Patterson appeal from a judgment in favor of GMAC Mortgage, LLC (“GMAC Mortgage”). We vacate the judgment of the trial court and dismiss the appeal.

On September 4, 2007, GMAC Mortgage brought an ejectment action against the Pattersons. GMAC Mortgage alleged that the Pattersons had mortgaged their house located on Southcrest Trail in Bessemer (“the house”) to Option One Mortgage Corporation (“Option One”), that Option One had transferred the mortgage to GMAC Mortgage, that GMAC Mortgage had foreclosed the mortgage on August 7, 2007, and that GMAC Mortgage was the owner of the house by virtue of the foreclosure sale. GMAC Mortgage further alleged that it had made a written demand for possession of the house in accordance with § 6-5-251(a), Ala. Code 1975,² and that the Pattersons had not vacated the house. As relief, GMAC Mortgage sought possession of the house, damages for wrongful detention of the house, and a determination that the Pattersons had forfeited their right to redeem the house by failing to vacate it within 10 days after GMAC Mortgage demanded possession.³ Answering, the Pattersons asserted, among other things, that the foreclosure was unlawful. They also asserted a counterclaim seeking a determination that the foreclosure was unlawful.

GMAC Mortgage moved for a summary judgment and later supplemented its summary-judgment motion with additional evidence. The Pattersons submitted evidence in opposition to the summary-judgment motion.

The evidence submitted by GMAC Mortgage in support of its summary-judgment motion included the foreclosure deed purporting to convey title to the house to GMAC Mortgage. The foreclosure deed recites that GMAC Mortgage accelerated the debt secured by the mortgage.⁴ The foreclosure deed also recites that GMAC Mortgage gave notice of the foreclosure of the mortgage in a newspaper of general circulation in Jefferson County on May 19, May 26, and June 2, 2007, and that GMAC Mortgage foreclosed the mortgage on August 7, 2007. The evidence submitted by GMAC Mortgage also included a written assignment executed by Option One on August 6, 2007, in which Option One assigned the mortgage to GMAC Mortgage.

Following a hearing, the trial court entered an order granting GMAC Mortgage’s summary-judgment motion insofar as it sought a determination that the foreclosure was valid but denied the motion in all other respects on the ground that a genuine issue of material fact existed regarding whether the Pattersons had received notice of GMAC Mortgage’s demand for possession of the house after the foreclosure.

Following a bench trial regarding the issue whether the Pattersons had received notice of GMAC Mortgage’s demand for possession, the trial court entered a judgment (1) finding that GMAC Mortgage had given the Pattersons notice of its demand for possession, (2) ordering the Pattersons to deliver possession of the property to GMAC Mortgage, and (3) ruling that the Pattersons had forfeited their right to redeem the property; however, the trial court did not award any damages for wrongful detention of the property. The Pattersons timely appealed to the supreme court, which transferred the appeal to this court pursuant to § 12-2-7(6), Ala. Code 1975.

On appeal, the Pattersons assert, among other things, that the trial court erred in determining that the foreclosure was valid. While the Pattersons’ appeal was pending, this court delivered its decision in Sturdivant v. BAC Home Loans, LP, [Ms. 2100245, Dec. 16, 2011] ___ So. 3d ___ (Ala. Civ. App. 2011). In Sturdivant, BAC Home Loans, LP (“BAC”), initiated foreclosure proceedings on the mortgage encumbering Bessie T. Sturdivant’s house before the mortgage had been assigned to BAC. BAC then held a foreclosure sale at which it purchased Sturdivant’s house, and the auctioneer executed a foreclosure deed purporting to convey title to Sturdivant’s house to BAC. BAC was assigned the mortgage the same day as the foreclosure sale. Thereafter, BAC brought an ejectment action against Sturdivant, claiming that it owned title to her house by virtue of the foreclosure deed. After the trial court entered a summary judgment in favor of BAC, Sturdivant appealed to the supreme court, which transferred her appeal to this court. We held that BAC lacked authority to foreclose the mortgage because it had not been assigned the mortgage before it initiated foreclosure proceedings and that, therefore, the foreclosure and the foreclosure deed were invalid. We further held that, because the foreclosure and the foreclosure deed were invalid, BAC did not acquire legal title to Sturdivant’s house through the foreclosure deed and thus BAC did not own an interest in the house when it commenced its ejectment action. We further held that, because BAC did not own any interest in Sturdivant’s house when it commenced its ejectment action, BAC did not have standing to bring that action and, consequently, the trial court never acquired subject-matter jurisdiction over the ejectment action. Because BAC did not have standing to bring its ejectment action and the trial court never acquired jurisdiction over the ejectment action, we held that the judgment of the trial court was void, and we vacated that judgment. Moreover, because a void judgment will not support an appeal, we dismissed the appeal.

In the case now before us, GMAC Mortgage, like BAC in Sturdivant, had not been assigned the mortgage before it initiated foreclosure proceedings. Consequently, under our holding in Sturdivant, GMAC Mortgage lacked authority to foreclose the mortgage when it initiated the foreclosure proceedings, and, therefore, the foreclosure and the foreclosure deed upon which GMAC based it ejectment claim are invalid. Moreover, under our holding in Sturdivant, because GMAC Mortgage did not own any interest in the house, it lacked standing to bring its ejectment action against the Pattersons. Because GMAC Mortgage lacked standing to bring the ejectment action, the trial court never acquired subject-matter jurisdiction over the ejectment action. Accordingly, the judgment of the trial court is void and is hereby vacated. Moreover, because a void judgment will not support an appeal, we dismiss this appeal. Id.

JUDGMENT VACATED; APPEAL DISMISSED.

Pittman, Thomas, and Moore, JJ., concur.

Thompson, P.J., concurs in the result, with writing.

Bryan, J., dissents, with writing.

THOMPSON, Presiding Judge, concurring in the result.

Reginald A. Patterson and Diane V. Patterson executed a mortgage, secured by their house, to Option One Mortgage Corporation on January 25, 2006, and they later defaulted on the mortgage. GMAC Mortgage, LLC, initiated foreclosure proceedings, and, in May 2007, GMAC began publishing notice of its intent to conduct a foreclosure sale. On August 6, 2007, Option One assigned the mortgage to GMAC, and the next day, August 7, 2007, GMAC conducted the foreclosure sale and purchased the property at that sale. Also on August 7, 2007, GMAC sent the Pattersons a letter demanding possession of the property.

In their brief on appeal, the Pattersons argue, among other things, that GMAC failed to demonstrate proof of a valid foreclosure. Specifically, the Pattersons argue, as they did before the trial court, that GMAC, which first obtained an interest in the property the day before it conducted its foreclosure sale, did not have an interest in the property at the time it initiated the foreclosure process and that one without an interest in a mortgage may not institute foreclosure proceedings. In support of those arguments, the Pattersons cite § 6-6-280, Ala. Code 1975; Steele v. Federal Nat’l Mortgage Ass’n, 69 So.3d 89, 93 (Ala. 2010) (“[Section 6-6-280(b)] unambiguously states that a complaint seeking ejectment `is sufficient if it alleges that the plaintiff was possessed of the premises or has the legal title thereto, properly designating or describing them, and that the defendant entered thereupon and unlawfully withholds and detains the same.'”); MacMillan Bloedell, Inc. v. Ezell, 475 So.2d 493 (Ala. 1985); Kelly v. Carmichael, 217 Ala. 534, 117 So.2d 67 (1928); and Berry v. Deutche Bank Nat’l Trust Co., 57 So.3d 142 (Ala. Civ. App. 2010).

While the Pattersons’ appeal was pending in this court, this court decided Sturdivant v. BAC Home Loans Servicing, LP, [Ms. 2100245, Dec. 16, 2011] So. 3d (Ala. Civ. App. 2011). In Sturdivant, supra, this court considered an appeal from a summary judgment proceeding in which the record demonstrated that in September 2009 BAC Home Loans Servicing, LP, had initiated foreclosure proceedings with regard to a mortgage Bessie T. Sturdivant had executed and that was secured by Sturdivant’s house. BAC Home Loans conducted a foreclosure sale on December 1, 2009, and, also on December 1, 2009, it received an assignment from the holder of the mortgage on Sturdivant’s property. BAC Home Loans, relying on the deed it received as a result of the December 1, 2009, foreclosure sale, sought to eject Sturdivant from the property. This court noted that in order to demonstrate a prima facie case in support of its claim in ejectment, BAC Home Loans was required to show, among other things, that it had legal title to the property. Sturdivant v. BAC Home Loans Servicing, LP, So. 3d at (citing § 6-6-280(b), Ala. Code 1975). In that case, BAC Home Loans claimed that it had legal title by virtue of the deed it had received after it had conducted the foreclosure sale. Article 1 of Title 35, Chapter 10, Ala. Code 1975, governs sales conducted to foreclose on a mortgage and, in pertinent part, requires that a power of sale may be executed by “any person … who, by assignment or otherwise, becomes entitled to the money” secured by the mortgage. § 35-10-1, Ala. Code 1975. In Sturdivant, this court, relying on several of the authorities cited in the Pattersons’ brief on appeal in this case, concluded that because BAC Home Loans had no interest in the property at the time it initiated its foreclosure proceedings, the foreclosure sale was invalid. So. 3d at (citing § 35-10-9, Ala. Code 1975). This court held that, because the foreclosure sale was invalid, BAC Home Loans had no legal title on which to base it claim in ejectment and, as a result, that BAC Home Loans lacked standing to assert its ejectment action. Sturdivant, So. 3d at.

In this case, GMAC initiated foreclosure proceedings at least four months before it obtained an interest in the mortgage.⁵ GMAC was first assigned an interest in the mortgage on August 6, 2007, the day before it conducted its already scheduled August 7, 2007, foreclosure sale. Given the Pattersons’ arguments on appeal, the authorities they cited in support of those arguments, and the holding of Sturdivant, supra, I agree with the Pattersons that GMAC failed to demonstrate that it had standing to prosecute its ejectment action and that the trial court erred in allowing GMAC to prosecute its action. I therefore concur in the result reached by the main opinion.

BRYAN, Judge, dissenting.

In Sturdivant v. BAC Home Loans Servicing, LP, [Ms. 2100245, Dec. 16, 2011] ___ So. 3d ___ (Ala. Civ. App. 2011), BAC Home Loans Servicing, LP (“BAC”), brought an ejectment action against Bessie T. Sturdivant, seeking, among other things, possession of her house. BAC based its claim to title to Sturdivant’s house on a foreclosure deed that had resulted from the foreclosure of a mortgage encumbering Sturdivant’s house. BAC had foreclosed the mortgage as the assignee of the mortgagee. The trial court entered a summary judgment in favor of BAC, and Sturdivant appealed. The main opinion in Sturdivant held that the foreclosure conducted by BAC and the foreclosure deed purporting to convey title to Sturdivant’s house to BAC were invalid because BAC had not been assigned or succeeded to the interest of the mortgagee in the mortgage when BAC commenced the foreclosure proceedings. Moreover, relying on the supreme court’s decision in Cadle v. Shabani, 950 So.2d 277 (Ala. 2006), the main opinion held that, because the foreclosure and the foreclosure deed were invalid, BAC lacked standing to prosecute its ejectment action, the trial court never acquired subject-matter jurisdiction over that action, and, therefore, the judgment of the trial court was void.

I dissented from the main opinion in Sturdivant because, in my opinion, Cadle was distinguishable on its facts from Sturdivant; in Cadle, the ejectment plaintiff did not have paper title to the property that was the subject of the ejectment action when it commenced its ejectment action, whereas BAC, the ejectment plaintiff in Sturdivant, did have paper title to the property that was the subject of the ejectment action when it commenced its ejectment action. It was my opinion that Sturdivant was entitled to assert and prove that the paper title upon which BAC relied, i.e., the foreclosure deed, was invalid as an affirmative defense to BAC’s ejectment action but that Sturdivant’s successfully proving that BAC’s paper title was invalid did not deprive BAC of standing to bring the ejectment action and did not justify the conclusion that the trial court had never acquired subject-matter jurisdiction over the ejectment action. Moreover, because, in my opinion, proof that BAC’s paper title was invalid did not deprive BAC of standing or deprive the trial court of subject-matter jurisdiction over the ejectment action, I disagreed with the main opinion’s basing its decision on a ground that had not been argued to the trial court because of the well-established principle that an appellate court may not base a reversal of the trial court’s judgment on a ground that was not argued to the trial court. See Smith v. Equifax Servs., Inc., 537 So.2d 463, 465 (Ala. 1988). As the supreme court explained in Smith:

“An appellee can defend the trial court’s ruling with an argument not raised below, for this Court `will affirm the judgment appealed from if supported on any valid legal ground.’ Tucker v. Nichols, 431 So.2d 1263, 1265 (Ala. 1983). There is a rather obvious fundamental difference in upholding the trial court’s judgment and reversing it; this Court will not reverse the trial court’s judgment on a ground raised for the first time on appeal, Costarides v. Miller, 374 So.2d 1335 (Ala. 1979), even though it affirms judgments on bases not asserted in the trial court, Bank of the Southeast v. Koslin, 380 So.2d 826 (Ala. 1980). This difference is predicated on the `long-standing, well-established rule that [in order to secure a reversal] the appellant has an affirmative duty of showing error upon the record.’ Tucker v. Nichols, supra, at 1264.”

537 So. 2d at 465(emphasis on “affirms” in original; other emphasis added).

In my opinion, Cadle is distinguishable from the case now before us for the same reason it was distinguishable from Sturdivant — the ejectment plaintiff in Cadle did not have paper title to the property when it commenced its ejectment action, whereas GMAC Mortgage, LLC (“GMAC Mortgage”), the ejectment plaintiff in the case now before us, did have paper title to Reginald A. Patterson and Diane V. Patterson’s house when it commenced its ejectment action. Therefore, consistent with my dissent in Sturdivant, I believe that, although the Pattersons were entitled to prove that GMAC’s foreclosure and foreclosure deed were invalid as an affirmative defense to GMAC Mortgage’s ejectment claim, proof that the foreclosure and the foreclosure deed were invalid did not establish that GMAC Mortgage lacked standing to prosecute the ejectment action or that the trial court lacked subject-matter jurisdiction over the ejectment action. Consequently, in my opinion, the Pattersons are subject to the long-standing principle that an appellate court may not base a reversal of the trial court’s judgment on a ground that was not argued to the trial court. See Smith. Although the Pattersons argued to the trial court that the foreclosure and the foreclosure deed were not valid, they did not argue to the trial court that they were invalid on the ground that the mortgage had not been assigned to GMAC Mortgage when it commenced the foreclosure proceedings. Consequently, I dissent from the main opinion because it bases its decision on a ground that was not argued to the trial court. See Smith.

Footnotes

1. Because of the issues involved, this appeal was held in abeyance pending the adjudication of the appeal in Sturdivant v. BAC Home Loans Servicing, LP, [Ms. 2100245, Dec. 16, 2011] ___ So. 3d ___ (Ala. Civ. App. 2011).

Back to Reference

2. Section 6-5-251(a) provides:”The possession of the land must be delivered to the purchaser or purchaser’s transferees by the debtor or mortgagor if in their possession or in the possession of anyone holding under them by privity of title, within 10 days after written demand for the possession has been made by, or on behalf of, the purchaser or purchaser’s transferees.”

Back to Reference

3. Section 6-5-251(c), Ala. Code 1975, provides:”Failure of the debtor or mortgagor or anyone holding possession under him or her to comply with the provisions of this section forfeits the right of redemption of the debtor or one holding possession under the debtor.”

Back to Reference

4. The Pattersons deny that they received notice of the acceleration of the debt.

Back to Reference

5. The record indicates that notice of the foreclosure by publication was first made in May 2007 and completed in June 2007. The Pattersons contend that they were not provided notice of the acceleration of the mortgage indebtedness or of foreclosure, and the record does not contain evidence that they received those notices.

[ipaper docId=79237711 access_key=key-1t8pa6imo4tv3894wxb9 height=600 width=600 /]

THE SUPREME COURT OF THE STATE OF NEVADA

CAROLINE J. KARL,
Appellant,

vs.

HSBC BANK, USA, NA, AS TRUSTEE
FOR MERRILL LYNCH ALTERNATIVE
NOTE ASSET TRUST, SERIES 2007-A3,
AN UNKNOWN ENTITY; AMERICA’S
SERVICING COMPANY, AN
UNKNOWN ENTITY; AND QUALITY
LOAN SERVICE CORPORATION, A
FOREIGN ENTITY,
Respondents.

ORDER AFFIRMING IN PART,
REVERSING IN PART AND REMANDING

EXCERPT:

Karl now appeals, contending (1) HSBC did not provide all the
required documents, which constitutes bad faith; and (2) a proper
representative did not attend the mediation.’ For the reasons set forth
below, we affirm in part, reverse in part, and remand the district court’s
order denying judicial review. Specifically, we take issue with the district
court’s finding that HSBC provided proper documentation at the
mediation.

Because the parties are familiar with the facts and procedural
history in this case, we do not recount them further except as is necessary
for our disposition.

Standard of review

This court reviews a district court’s factual determinations for
clear error, Valladares v. DMJ, Inc., 110 Nev. 1291, 1294, 885 P.2d 580,
582 (1994), and its legal determinations de novo, Clark County v. Sun
State Properties, 119 Nev. 329, 334, 72 P.3d 954, 957 (2003). Absent
factual or legal error, the choice of sanction, if any, in an FMP judicial
review proceeding is committed to the sound discretion of the district
court. Pasillas v. HSBC Bank USA, 127 Nev. „ 255 P.3d 1281,
1287 (2011).

HSBC failed to provide the required documentation

To obtain a foreclosure certificate, it is mandatory that a
beneficiary of a deed of trust or its representative “(1) attend the
mediation, (2) mediate in good faith, (3) provide the required documents,
and (4) have a person present with authority to modify the loan or access
to such a person.” Id. at     , 255 P.3d at 1284; see Leyva v. National
Default Servicing Corp., 127 Nev.     „ 255 P.3d 1275, 1276 (2011)
(requiring strict compliance with NRS 107.086’s requirements). A letter
certifying the mediation cannot be entered until all the requirements of
NRS 107.086 are met. Pasillas, 127 Nev. at , 255 P.3d at 1286. If the
homeowner petitions the district court for judicial review, the court may
impose sanctions against the “beneficiary of the deed of trust or the
representative as the court determines appropriate” if any one of these
four requirements is not satisfied. NRS 107.086(5).

Karl contends that HSBC failed to provide the documents
required under NRS 107.086(4). We agree. NRS 107.086(4) requires that
the beneficiary provide “the original or a certified copy of the deed of trust,
the mortgage note and each assignment of the deed of trust or mortgage
note.” The record lacks clarity as to whether HSBC provided all the
proper documentation. 2 The only evidence provided is that the mediator
did not note missing documents on the mediator statement. The
documents in the appellate record, however, fail to show whether HSBC
established that it was the proper beneficiary that provided the required
documents. Thus, we conclude that the district court abused its discretion
in determining that the necessary documents were provided. 3 Accordingly
we,
ORDER the judgment of the district court AFFIRMED
IN PART AND REVERSED IN PART AND REMAND this matter to the
district court to clarify its findings regarding the sufficiency of the
documents produced by HSBC at the mediation and whether sanctions are
appropriate. 4

[ipaper docId=79217873 access_key=key-51z9v73kmy1rf58460w height=600 width=600 /]

IN THE SUPREME COURT OF THE STATE OF NEVADA

CARL F. PIAZZA,
Appellant,

vs.

CITIMORTGAGE, INC.,
Respondent.

ORDER AFFIRMING IN PART, REVERSING IN PART, AND
REMANDING

EXCERPTS:

On appeal, Piazza contends that the district court abused its
discretion in refusing to sanction CitiMortgage and in ordering that it be
issued a foreclosure certificate. He argues that the issuance of a
foreclosure certificate was improper because the Broker’s Price Opinion
(BPO) that CitiMortgage produced at the mediation did not strictly comply
with the statutory requirements set forth in NRS 645.2515(3), and the
assignments of the deed of trust that CitiMortgage presented at the
mediation were flawed. 2 For the reasons set forth below, we affirm in part
and reverse in part the district court’s order granting CitiMortgage’s
petition for judicial review, and remand for further proceedings.

The district court abused its discretion in ordering a foreclosure certificate
to be issued to CitiMortgage[

[…]

Nonetheless, based upon the record on appeal, it does not
appear that the district court reviewed the assignments presented by
CitiMortgage to ensure that they were in strict compliance. The district
court, therefore, abused its discretion in ordering a foreclosure certificate
to be issued. We therefore reverse and remand this matter to the district
court for further proceedings. On remand, we direct the district court to
evaluate whether the assignments presented by CitiMortgage were in
strict compliance. In this, the court must consider whether the documents
presented establish that the deed of trust was properly assigned and make
appropriate findings related thereto. Accordingly, we
ORDER the judgment of the district court AFFIRMED IN
PART AND REVERSED IN PART AND REMAND this matter to the
district court for proceedings consistent with this order.

[ipaper docId=79216724 access_key=key-4lxgi0au6330aa2gdgo height=600 width=600 /]

DEUTSCHE BANK NATIONAL TRUST v. BRUMBAUGH
2012 OK 3
Case Number: 109223
Decided: 01/17/2012

THE SUPREME COURT OF THE STATE OF OKLAHOMA

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

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

DEUTSCHE BANK NATIONAL TRUST, AS TRUSTEE FOR LONG BEACH MORTGAGE LOAN 2002-1, Plaintiff/Appellee,
v.
DENNIS BRUMBAUGH, Defendant/Appellant.

ON APPEAL FROM THE DISTRICT COURT OF TULSA COUNTY
HONORABLE LINDA G. MORRISSEY
DISTRICT JUDGE

¶0 The Plaintiff /Appellee, Deutsche Bank National Trust as Trustee for Long Beach Mortgage Loan 2002-1, filed this foreclosure action against the Defendant/Appellant, Dennis Brumbaugh. Plaintiff filed a motion for summary judgment which was granted by the trial court. Defendant contends there is not enough evidence to show Plaintiff has standing. Plaintiff asserts it is the holder of the note and has standing. We find there are material issues of fact that need to be determined and summary judgment is not appropriate.

REVERSED AND REMANDED WITH INSTRUCTIONS

Phillip A. Taylor, TAYLOR & ASSOCIATES, Broken Arrow, Oklahoma, for Defendant/Appellant.
Ray E. Zschiesche, PHILLIPS MURRAH P.C., Oklahoma City, Oklahoma, for Plaintiff/Appellee.

COMBS, J.

FACTS

¶1 This is an appeal from a foreclosure action initiated by Appellee, Deutsche Bank National Trust As Trustee for Long Beach Mortgage Loan 2002-1 (Appellee) against Appellant Dennis Brumbaugh (Appellant) and others. Appellant and his wife, Debra Brumbaugh, (Brumbaughs) executed a note and mortgage with Long Beach Mortgage Company on February 27, 2002. On December 27, 2006, the Brumbaughs entered into a loan modification agreement with U.S. Bank, N.A., successor trustee to Wachovia Bank, N.A. (formerly known as First Union National Bank), as Trustee for Long Beach Mortgage Loan Trust 2002-1, Asset Backed Certificates, Series 2002-1 in trust for the benefit of the Certificateholders. On July 20, 2007, the Brumbaughs divorced, and in 2008, Debra Brumbaugh executed a quitclaim deed to Dennis Brumbaugh.

¶2 Appellant defaulted on the note in January 2009, and Appellee filed its petition for foreclosure on June 2, 2009. Attached to the petition was a copy of the note, mortgage, loan modification agreement, and copies of statements of judgments and liens by other entities. Appellee claims it is the present holder of the note and mortgage having received due assignment through mesne assignments of record or conveyance via mortgage servicing transfer. The Appellant answered, denying Appellee owns any interest in the note and mortgage, and the copies attached to the petition were not the same as those he signed. He claims Appellee lacked capacity to sue and the trial court lacks jurisdiction over the subject matter. He also denied being in default and asserted the Appellee/servicing agent caused the alleged default.

¶3 On April 1, 2010, Appellee filed a motion for summary judgment. Attached to the motion was an affidavit from an employee of JP Morgan Chase Bank (Chase) as the servicing agent for Appellee. The affidavit states the Appellee is the current owner and holder of the original note, mortgage, and the modification agreements. However, there is no mention of when Appellee became the holder.

¶4 Appellant asserts in his response to the motion for summary judgment that Appellee failed to prove the affiant is a competent witness and no documentation was presented that connects Appellant to Appellee. The note attached to the petition and the motion did not show it had been negotiated to any other party including Appellee. Negotiation requires transfer of possession of the instrument and its indorsement by the holder. 12A O.S. 2001, § 3-201(b). He asserts because there is no indorsement whatsoever by Long Beach Mortgage Company attached to the petition and motion for summary judgment, Appellee cannot be the holder of the note. Therefore, Appellant asserts Appellee cannot be the real party in interest. However, in Appellee’s reply to Appellant’s response to the motion for summary judgment and at the hearing, a copy of the note with a blank, undated indorsement signed by Long Beach Mortgage Company was attached and presented.

¶5 Appellee asserts that even if negotiation of the note was at issue, Appellee has possession of the note and that satisfies the “negotiation” requirements of 12A O.S. 2001, § 3-201. Further, the Chase affiant has personal knowledge because he reviewed and examined the account files and Chase is the servicing agent for Appellee. Appellee further asserts, it has the original note and mortgage, and is therefore, the real party in interest.

¶6 The trial court reviewed the note presented at the hearing and agreed with Appellee that Appellee was the holder of the note because it had possession of the note and it was indorsed in blank. The court granted summary judgment in favor of Appellee on January 27, 2011.

STANDARD OF REVIEW

¶7 An appeal on summary judgment comes to this court as a de novo review. Carmichael v. Beller, 1996 OK 48, ¶2, 914 P.2d 1051, 1053. All inferences and conclusions are to be drawn from the underlying facts contained in the record and are to be considered in the light most favorable to the party opposing the summary judgment. Rose v. Sapulpa Rural Water Co., 1981 OK 85, 621 P.2d 752. Summary judgment is improper if, under the evidentiary materials, reasonable individuals could reach different factual conclusions. Gaines v. Comanche County Medical Hospital, 2006 OK 39, ¶4, 143 P.3d 203, 205.

ANALYSIS

¶8 The Uniform Commercial Code adopted in Oklahoma, 12A O.S. 2001, § 1-101 et seq., defines who is a “person entitled to enforce” the note (instrument).¹ A “person entitled to enforce” the note requires possession of the note with a very limited exception.² It will be either one who is a “holder” of the note or a “nonholder in possession of the note who has the rights of a holder.”³

¶9 Appellee must demonstrate it is a person entitled to enforce the note. It must provide evidence it has possession of the note either by being a holder or a nonholder in possession who has the rights of a holder. Appellee attached to its Reply to Defendant’s Response to Plaintiff’s Motion for Summary Judgment a copy of the note with a blank indorsement from Long Beach Mortgage Company. Appellee states this allonge⁴ was inadvertently omitted from the copy of the note that was attached to its Motion for Summary Judgment. However, this allonge was not attached to the Petition for Foreclosure of Mortgage. Appellee is trying to establish it is a “holder” of the note. Evidence establishing when Appellee became a person entitled to enforce the note must show Appellee was a person entitled to enforce the note prior to filing its cause of action for foreclosure.

¶10 Appellant argues Appellee does not have standing to bring this foreclosure action. The issue presented to this Court is standing. This Court has previously held:

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

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

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

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

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

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

¶11 To commence a foreclosure action in Oklahoma, a plaintiff must demonstrate it has a right to enforce the note and, absent a showing of ownership, the plaintiff lacks standing. Gill v. First Nat. Bank & Trust Co. of Oklahoma City, 1945 OK 181, 159 P.2d 717.⁵ Being a person entitled to enforce the note is an essential requirement to initiate a foreclosure lawsuit. In the present case, there is a question of fact as to when Appellee became a holder, and thus, a person entitled to enforce the note. Therefore, summary judgment is not appropriate. If Deutsche Bank became a person entitled to enforce the note as either a holder or nonholder in possession who has the rights of a holder after the foreclosure action was filed, then the case may be dismissed without prejudice and the action may be re-filed in the name of the proper party. We reverse the granting of summary judgment by the trial court and remand back for further determinations as to when Appellee acquired its interest in the note.

CONCLUSION

¶12 It is a fundamental precept of the law to expect a foreclosing party to actually be in possession of its claimed interest in the note, and have the proper supporting documentation in hand when filing suit, showing the history of the note, so the defendant is duly apprised of the rights of the plaintiff. This is accomplished by establishing that the party is a holder of the instrument or a nonholder in possession of the instrument who has the rights of a holder, or a person not in possession of the instrument who is entitled to enforce the instrument pursuant to 12A O.S. 2001, § 3-309 or 12A O.S. 2001, § 3-418. 12A O.S. 2001, § 3-301. Likewise, for the homeowners, absent adjudication on the underlying indebtedness, the dismissal cannot cancel their obligation arising from an authenticated note, or loan modification, or insulate them from foreclosure proceedings based on proven delinquency. See, U.S. Bank National Association v. Kimball 27 A.3d 1087, 75 UCC Rep.Serv.2d 100, 2011 VT 81 (VT 2011); and Indymac Bank, F.S.B. v. Yano-Horoski, 78 A.D.3d 895, 912 N.Y.S.2d 239 (2010).

REVERSED AND REMANDED WITH INSTRUCTIONS

¶13 CONCUR: TAYLOR (This Court’s decision in no way releases or exonerates the debt owed by the defendants on this home.), C.J., KAUGER (joins Taylor, C.J.), WATT, WINCHESTER (joins Taylor, C.J.), EDMONDSON, REIF, COMBS, GURICH (joins Taylor, C.J.), JJ.

¶14 RECUSED: COLBERT, V.C.J.

FOOTNOTES

¹12A O.S. 2001, § 3-301.

² A person who is not reasonably able to obtain possession of the note because it was lost, destroyed, in the wrongful possession of another, or it is paid or accepted by mistake. 12A O.S. 2001, § 3-301.

³ A holder is a person in possession of the note that is payable either to bearer (blank indorsement) or to an identified person (special indorsement) that is the person in possession. 12A O.S. 2001, §§ 1-201(b)(21), 3-204 and 3-205. A “nonholder in possession who has the rights of a holder” is a person in possession of the note but the note was not indorsed by the previous holder; special indorsement or blank indorsement. No negotiation has occurred because the person now in possession did not become a holder by lack of the note being indorsed as mentioned. An example would be when a sale of notes in bulk is made by the holder to a transferee and the holder is transferring the right to enforce the notes even though there has been no negotiation. (See the REPORT OF THE PERMANENT EDITORIAL BOARD FOR THE UNIFORM COMMERCIAL CODE, APPLICATION OF THE UNIFORM COMMERCIAL CODE TO SELECTED ISSUES RELATING TO MORTGAGE NOTES (NOVEMBER 14, 2011)). Negotiation is the voluntary or involuntary transfer of an instrument by a person other than the issuer to a person who thereby becomes its holder. 12A O.S. 2001, § 3-201. Transfer occurs when the instrument is delivered by a person other than its issuer for the purpose of giving to the person receiving delivery the right to enforce the instrument. 12A O.S. 2001, § 3-203. Delivery of the note would still have to occur even though there is no negotiation. Delivery is defined as the voluntary transfer of possession. 12A O.S. 2001, § 1-201(b)(15). The transferee would then be vested with any right of the transferor to enforce the note. 12A O.S. 2001, § 3-203(b). Some jurisdictions have held that without holder status and therefore the presumption of a right to enforce, the possessor of the note must demonstrate both the fact of the delivery and the purpose of the delivery of the note to the transferee in order to qualify as the person entitled to enforce. In re Veal, 450 B.R. 897, 912 (B.A.P. 9th Cir. 2011).

⁴According to Black’s Law Dictionary (9th ed. 2009) an allonge is “[a] slip of paper sometimes attached to a negotiable instrument for the purpose of receiving further indorsements when the original paper is filled with indorsements.” See, 12A O.S. 2001, § 3-204(a).

⁵ This opinion occurred prior to the enactment of the UCC and as explained in footnote 3 of this opinion, the person entitled to enforce the note in almost all situations is required to be in possession of the note and therefore if the owner of the note is not in possession of the note it is not a person entitled to enforce the note. (See the REPORT OF THE PERMANENT EDITORIAL BOARD FOR THE UNIFORM COMMERCIAL CODE, APPLICATION OF THE UNIFORM COMMERCIAL CODE TO SELECTED ISSUES RELATING TO MORTGAGE NOTES (NOVEMBER 14, 2011)).

DEUTSCHE BANK NATIONAL TRUST COMPANY v. BYRAMS
2012 OK 4
Case Number: 108545
Decided: 01/17/2012

THE SUPREME COURT OF THE STATE OF OKLAHOMA

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

DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE IN TRUST FOR THE BENEFIT OF THE CERTIFICATE HOLDERS FOR ARGENT SECURITIES INC., ASSET-BACKED PASS THROUGH CERTIFICATES, SERIES 2006-W2, Plaintiff/Appellee,

v.

JEVESTER BYRAMS, JR. and NATACHA BYRAMS, ET AL Defendant/Appellant,

ON APPEAL FROM THE DISTRICT COURT OF CREEK COUNTY
HONORABLE LAWRENCE W. PARISH
DISTRICT JUDGE

¶0 Appeal of a summary judgment granted in Deutsche Bank National Trust Company’s favor against the Byramses on May 11, 2010. The Byramses filed a petition and motion to vacate, as well as, requests to stay any proceedings regarding the property. The parties appeared before the trial court on June 15, 2010, and the petition, motion and other requests were denied. The order was filed on July 6, 2010. The Byrams appealed on July 28, 2010, and this Court retained the matter on April 21, 2011.

REVERSED AND REMANDED WITH INSTRUCTIONS

Phillip A. Taylor, TAYLOR & ASSOCIATES, Broken Arrow, Oklahoma, for Defendant/Appellants.
A. Grant Schwabe, KIVELL, RAYMENT AND FRANCIS, P.C., Tulsa, Oklahoma, for Plaintiff/Appellee.

COMBS, J.

FACTUAL AND PROCURAL HISTORY

¶1 In a petition filed on December 8, 2009, Deutsche Bank National Trust company, as Trustee in Trust for the benefit of the Certificate Holders for Argent Securities Inc., Asset-Backed Pass-Through Certificates, Series 2006-W2,claiming to be the present holder of the note (hereinafter Deutsche Bank) filed a foreclosure action against the Byramses. Deutsche Bank claimed at that time to hold the note and mortgage having received due assignment through mesne assignments of record or conveyance via mortgage servicing transfer. A review of the note shows no indorsement. Argent Mortgage Company, LLC, was the original lender. In its brief in support of motion for summary judgment, filed March 9, 2010, Deutsche Bank attached a document entitled “Assignment of Mortgage.” This assignment of mortgage was acknowledged on January 12, 2010, and stamped as being recorded with the County Clerk of Tulsa County on January 26, 2010. This was over one month after the filing of the foreclosure proceeding (December 8, 2009). Additionally, this Assignment of Mortgage, from Argent Mortgage Company, LLC, by Citi Residential Lending, Inc., made to plaintiff, Deutsche Bank as the trustee of Argent Mortgage Company, LLC, was signed by Citi Residential Lending, Inc. Both the assignor and assignee list the same address, “c/oAmerican Home Mtg Servicing, Inc. 1525 S. Beltline Rd, Coppell, TX 75019.” A summary judgment granted in Deutsche Bank’s favor against the Byrams on May 11, 2010, memorialized a final journal entry of judgment order. A petition for new trial to vacate the final journal entry of judgment, and motion to dismiss plaintiff’s petition for lack of standing was filed on May 21, 2010, which was denied by order on June 28, 2010, by the trial court. The Byrams appeal this summary judgment arguing Deutsche Bank National Trust Company failed to demonstrate standing.

STANDARD OF REVIEW

¶2 An appeal on summary judgment comes to this court as a de novo review. Carmichael v. Beller, 1996 OK 48, ¶2, 914 P.2d 1051, 1053. All inferences and conclusions are to be drawn from the underlying facts contained in the record and are to be considered in the light most favorable to the party opposing the summary judgment. Rose v. Sapulpa Rural Water Co., 1981 OK 85, 631 P.2d 752. Summary judgment is improper if, under the evidentiary materials, reasonable individuals could reach different factual conclusions. Gaines v. Comanche County Medical Hospital, 2006 OK 39, ¶4, 143 P.3d 203, 205.

ANALYSIS

¶3 Appellant argues Appellee does not have standing to bring this foreclosure action. Although Appellee has argued it holds the note, there is no evidence in the record supporting it is a holder of the note. The face of the note does not indicate it was indorsed and the purported “assignment of mortgage” was filed after the filing of the foreclosure proceedings.

¶4 The issue presented to this Court is standing. This Court has previously held:

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

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

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

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

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

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

¶5 To commence a foreclosure action in Oklahoma, a plaintiff must demonstrate it has a right to enforce the note and, absent a showing of ownership, the plaintiff lacks standing. Gill v. First Nat. Bank & Trust Co. of Oklahoma City, 1945 OK 181, 159 P.2d 717.1 An assignment of the mortgage, however, is of no consequence because under Oklahoma law, “[p]roof of ownership of the note carried with it ownership of the mortgage security.” Engle v. Federal Nat. Mortg. Ass’n, 1956 OK 176, ¶7, 300 P.2d 997, 999. Therefore, in Oklahoma it is not possible to bifurcate the security interest from the note.” BAC Home Loans Servicing, L.P. v. White, 2011 OK CIV APP 35, ¶ 10, 256 P.3d 1014, 1017. Because the note is a negotiable instrument, it is subject to the requirements of the UCC. Thus, a foreclosing entity has the burden of proving it is a “person entitled to enforce an instrument” by showing it was “(i) the holder of the instrument, (ii) a nonholder in possession of the instrument who has the rights of a holder, or (iii) a person not in possession of the instrument who is entitled to enforce the instrument pursuant to Section 12A-3-309 or subsection (d) of Section 12A-3-418 of this title.” 12A O.S. 2001 §3-301.

¶6 To show you are the “holder” of the note you must prove you are in possession of the note and the note is either “payable to bearer” (blank indorsement) or to an identified person that is the person in possession (special indorsement).2 Therefore, both possession of the note and an indorsement on the note or attached allonge3 are required in order for one to be a “holder” of the note.

¶7 To be a “nonholder in possession who has the rights of a holder” you must be in possession of a note that has not been indorsed either by special indorsement or blank indorsement. The record in this case reflects the note has not been indorsed. No negotiation has occurred because the person now in possession did not become a holder by lack of the note being indorsed as mentioned. Negotiation is the voluntary or involuntary transfer of an instrument by a person other than the issuer to a person who thereby becomes its holder. 12A O.S. 2001, § 3-201. Transfer occurs when the instrument is delivered by a person other than its issuer for the purpose of giving to the person receiving delivery the right to enforce the instrument. 12A O.S. 2001, § 3-203. Delivery of the note would still have to occur even though there is no negotiation. Delivery is defined as the voluntary transfer of possession. 12A O.S. 2001, § 1-201(b)(15). The transferee would then be vested with any right of the transferor to enforce the note. 12A O.S. 2001, 3-203(b). Some jurisdictions have held that without holder status and therefore the presumption of a right to enforce, the possessor of the note must demonstrate both the fact of the delivery and the purpose of the delivery of the note to the transferee in order to qualify as the person entitled to enforce. In re Veal, 450 B.R. 897, 912 (B.A.P. 9th Cir. 2011). See also, 12A O.S. 2001, § 3-203.

¶8 In the present case, Appellee has only presented evidence of an unindorsed note and an “Assignment of Mortgage.” Without an indorsement on the note the Appellee cannot be a holder of the note. Therefore, from the record presented to this Court, the Appellee must assert it is a nonholder in possession who has the rights of a holder.

¶9 The assignment of a mortgage is not the same as an assignment of the note. If a person is trying to establish it is a nonholder in possession who has the rights of a holder it must bear the burden of establishing its status as a nonholder in possession with the rights of a holder. Appellee must establish delivery of the note as well as the purpose of that delivery. In the present case, it appears Appellee is trying to use the assignment of mortgage in order to establish the purpose of delivery. The assignment of mortgage purports to transfer “the following described mortgage, securing the payment of a certain promissory note(s) for the sum listed below, together with all rights therein and thereto, all liens created or secured thereby, all obligations therein described, the money due and to become due thereon with interest, and all rights accrued or to accrue under such mortgage.” This language has been determined by other jurisdictions to not effect an assignment of a note but to be useful only in identifying the mortgage. Therefore, this language is neither proof of transfer of the note nor proof of the purpose of any alleged transfer. See, In re Veal, 450 B.R. 897, 905 (B.A.P. 9th Cir. 2011).

¶10 Appellee must show it became a “person entitled to enforce” prior to the filing of the foreclosure proceeding. In the present case, there is a question of fact as to when and if this occurred and summary judgment is not appropriate. Therefore, we reverse the granting of summary judgment by the trial court and remand back for further determinations. If Deutsche Bank became a person entitled to enforce the note as either a holder or nonholder in possession who has the rights of a holder after the foreclosure action was filed, then the case may be dismissed without prejudice and the action may be re-filed in the name of the proper party.

CONCLUSION

¶11 It is a fundamental precept of the law to expect a foreclosing party to actually be in possession of its claimed interest in the note, and have the proper supporting documentation in hand when filing suit, showing the history of the note, so that the defendant is duly apprised of the rights of the plaintiff. This is accomplished by showing the party is a holder of the instrument or a nonholder in possession of the instrument who has the rights of a holder, or a person not in possession of the instrument who is entitled to enforce the instrument pursuant to 12A O.S. 2001, § 3-309 or 12A O.S. 2001, § 3-418. Likewise, for the homeowners, absent adjudication on the underlying indebtedness, the dismissal cannot cancel their obligation arising from an authenticated note, or insulate them from foreclosure proceedings based on proven delinquency. See, U.S. Bank National Association v. Kimball 27 A.3d 1087, 75 UCC Rep.Serv.2d 100, 2011 VT 81 (VT 2011); and Indymac Bank, F.S.B. v. Yano-Horoski, 78 A.D.3d 895, 912 N.Y.S.2d 239 (2010).

REVERSED AND REMANDED WITH INSTRUCTIONS

¶12 CONCUR: TAYLOR (This Court’s decision in no way releases or exonerates the debt owed by the defendants on this home.), C.J., KAUGER (joins Taylor, C.J.), WATT, WINCHESTER (joins Taylor, C.J.), EDMONDSON, REIF, COMBS, GURICH (joins Taylor, C.J.), JJ.

¶13 RECUSED: COLBERT, V.C.J.

FOOTNOTES

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

2 12A O.S. 2001, §§ 1-201(b)(21), 3-204 and 3-205.

3 According to Black’s Law Dictionary (9th ed. 2009) an allonge is “[a] slip of paper sometimes attached to a negotiable instrument for the purpose of receiving further indorsements when the original paper is filled with indorsements.” See, 12A O.S. 2001, § 3-204(a).

IN THE COURT OF COMMON PLEAS
CUYAHOGA COUNTY, OHIO

REO PROPERTIES CORP.,
Plaintiff,

vs.

THOMAS E. JEFFERS, et al,

EXCERPT:

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

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

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

Q. SerVertis is a trust is it not?

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

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

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

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

A. The owner of record is REO Properties Corp.

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

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

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

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

On redirect examination Degneau testified further:

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

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

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

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

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

[…]

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

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

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

Hard-hitting investigative film that shows how the financial crisis was built on a foundation of criminal activity.

IMO the reason they are trying to rush into a settlement today, rather than later, is because there is a new Ticking Time Bomb that is about to explode that will most likely cost these banksters in the 100’s of billions. So taking baby steps this settlement won’t harm them as much as the next robo-signing scandal will and they want this out of the way long before the next scheme plays in a court room near you.

AB-

Pity Shaun Donovan. The much beset upon Housing and Urban Development secretary has the thankless task of facilitating that long sought after agreement between the state attorneys general and the banks, the one that would finally put that nasty robo-signing scandal behind us.  Long anticipated, it was supposed to be signed by Christmas (not).

[AMERICAN BANKER]

I wasn’t willing to provide a release that … released conduct that hadn’t been investigated, essentially. So we started our own investigation.

– Eric Schneiderman, New York attorney general

NPR-

Some of the biggest banks in the country are reportedly close to a settlement with authorities over the so-called robo-signing scandal in which mortgage company officials signed and notarized foreclosure documents without properly reviewing them.

Many lenders and mortgage servicers acknowledged making serious mistakes in foreclosure paperwork.

But the much-delayed settlement still faces challenges. New York Attorney General Eric Schneiderman is raising objections, and may reject the settlement because he believes authorities have done too little to investigate the role of big banks in the financial crisis.

On a ride with the attorney general in his state-issued SUV, we pass the site of the Occupy Wall Street protests. Schneiderman didn’t take part in the protests, but he agrees with some of the message.

“People aren’t sure what happened, but they know that … this was a man-made catastrophe, [and] that there are people who caused the bubble and the crash,” he says.

So Schneiderman is out for justice — his idea of justice.

Starting His Own Investigation …

[NPR]

See this is how things get twisted because just today, Shaun Donovan announced that the Principal Forgiveness isn’t going to happen.

Fox News-

The Obama administration came under fire Monday from U.S. Democratic lawmakers and liberal groups, who argued that a forthcoming settlement over alleged foreclosure abuses won’t do enough to penalize the banking industry.

Administration officials and state attorneys general are have been putting the finishing touches on a settlement with major banks of foreclosure-processing problems that erupted into public view in fall 2010.

Housing and Urban Development Secretary Shaun Donovan and Associate U.S. Attorney General Thomas Perrelli were meeting in Chicago on Monday with Democratic attorneys general to review potential settlement terms, according to a spokesman for Iowa Attorney General Tom Miller, who has been leading the talks.

The officials were scheduled to hold a separate conference call with Republican attorneys general later in the day, but no announcement of a settlement was expected this week.

[FOX NEWS]

NEWS RELEASE
For Immediate Release Contact:

Corinne Russell (202) 649-3032
January 23, 2012 Stefanie Johnson (202) 649-3030

FHFA Releases Analysis on Principal Forgiveness
As Loss Mitigation Tool

Washington, DC – In response to a request from members of Congress, the Federal Housing
Finance Agency (FHFA) has publicly disclosed the analysis that led the agency to exclude
principal forgiveness from its menu of loss mitigation tools. On Friday, FHFA delivered to
Representative Cummings, Representative Tierney and other members a letter summarizing
the agency’s determination and three separate staff analyses prepared over the past year that
formed the basis for the determination.

As requested, the information here provides the analytic and legal basis for FHFA’s previously
announced determination on the use of principal forgiveness as a loss mitigation tool. FHFA is
not seeking any legislative action in this area. FHFA remains committed to achieving its
statutory mandate to conserve the assets and property of Fannie Mae and Freddie Mac in
conservatorship while maximizing assistance to troubled homeowners, mindful of the net
present value cost to taxpayers. As FHFA has noted before and states in the letter, changing
circumstances may call for an updating of our analysis.

Background

Each month, FHFA reports on the full array of loss mitigation activities undertaken by Fannie
Mae and Freddie Mac, including loan modifications. Each quarter, FHFA reports on the
redefault rates on loan modifications. Those Foreclosure Prevention & Refinance reports may
be found here. Since establishment of the conservatorships, Fannie Mae and Freddie Mac have
modified more than one million mortgages and undertaken about 2 million foreclosure
prevention actions. Notably, the re-performance rate on loan modifications has improved
substantially as the modifications themselves now typically involve far greater reductions in
monthly payments than did modifications in the early months of the housing crisis.

When a homeowner owes more on their mortgage than the property is worth, this is typically
referred to as being underwater on a mortgage. Being underwater does not imply that a
borrower lacks the ability or the desire to make good on one’s financial obligation, nor does it
relieve a household from that responsibility. Indeed, FHFA estimates that, as of June 30, 2011,
Fannie Mae and Freddie Mac held 1.4 million mortgages with current loan-to-value ratios
above 115 percent. Of these, 1 million were current and 176,000 had been delinquent for more
than a year. For delinquent and deeply underwater borrowers, Fannie Mae and Freddie Mac
offer loan modifications that include principal forbearance, which means no interest is charged
on a portion of the underwater amount.

Finally, for underwater borrowers who remain current on their mortgage, last October FHFA
announced changes to the Home Affordable Refinance Program (HARP), which further
enhance the opportunity to refinance. These HARP changes allow these underwater borrowers
whose mortgages are owned or guaranteed by Fannie Mae and Freddie Mac to take advantage
of today’s lower mortgage rates and to shorten their mortgage term, which would enable
borrowers to get back above water more quickly.

###

The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks. These government-sponsored enterprises provide more than $5.7 trillion in funding for the U.S. mortgage markets and financial institutions.

[ipaper docId=79146703 access_key=key-2gk26a3k0xv5ndi5g1l7 height=600 width=600 /]

Once more, why would anyone go to work for a company that is being investigated for fraud and at the core of robo-signing?

LinkedIn-

Janis Smith joined MERSCORP in 2011, where she is responsible for corporate communications strategy and initiatives, media relations, media risk management and internal communications.

Smith has provided strategic communications, media relations, and writing services to Fannie Mae and other organizations as a contractor/consultant since 2009, and from 2000 to early 2009, she managed a team of professionals who reported publicly on Fannie Mae’s financial performance, business and economic data and fixed-income securities. She was also a media spokesperson for the company.

Smith’s previous employers include the Office of the Comptroller of the Currency – Administrator of National Banks (OCC) from 1993 to 2000; and, the Office of Thrift Supervision (OTS) from 1989 to 1993. The OCC and OTS are financial institution regulatory agencies and bureaus of the U.S. Department of Treasury. Smith was also employed by the Federal Home Loan Bank Board (FHLBB) from 1986 through October 1989, and at the Federal Home Loan Bank of Boston from 1982 to 1985. From 1981-1982, she worked in the trust department of The Massachusetts Companies, Inc., in Boston.

[LINKEDIN]

Read The BK Order: In Re: JOHNSON – Bank. EDArk – Chase/JP Morgan Chase – No access to Arkansas non-judicial f/c process if not authorized to do business in state

Arkasas Online-

LITTLE ROCK Many title insurance companies in Arkansas are refusing to issue policies in the sale of certain foreclosed-on properties, after a local U.S. Bankruptcy Court ruling in September called into question the validity of the homes’ titles. Sales …

[ARKANSAS ONLINE] subscription

ONE of the richest and most secretive sources of profit in the mortgage business is coming under scrutiny.

It’s about time.

 Gretchen Morgenson-

Investigators are training their sights on a type of hazard insurance policy known as force-placed insurance, a type of policy that has driven up costs for homeowners and pushed some into foreclosure. People who buy certain mortgage securities may be getting hurt, too.

Benjamin M. Lawsky, the superintendent of the New York State Department of Financial Services, is investigating institutions that underwrite and sell force-placed insurance. Last fall, his office began sending subpoenas to insurance agents and brokers. Requests for information also went out to insurance companies that write such policies.

[NEW YORK TIMES]