Army Staff Sgt. Phillip Harry learned his house had been foreclosed upon and sold in a letter forwarded to him while he was serving in Iraq.
Harry, a member of the Minnesota National Guard, filed suit on Friday against his mortgage company, alleging the company violated a federal law protecting service members from losing their homes while they are deployed.
Reflecting a convergence of two major social issues: the home foreclosure crisis and the return of thousands of members of the military from Iraq and Afghanistan, attorneys for Harry are seeking to have the suit certified as a class action, saying hundreds of service members are likely to have faced the same situation.
The U.S. Treasury launched an investigation last year into 10 leading banks that may have illegally foreclosed on the mortgages of almost 5,000 members of the U.S. military, some of them activated to duty in Iraq and Afghanistan.
The suit filed in U.S. District Court in Minnesota accuses Illinois-based HSBC Mortgage Services of violations of the Servicemembers Civil Relief Act, signed into law in 2003 as a way of easing the economic and legal burdens on military personnel called to service.
For the next couple of weeks, I’m one of the David Dayen subs at FireDogLake–no one person could fill his shoes–and this post ran there earlier today. This version is slightly updated but essentially the same.
One way to see the double standard at the heart of the foreclosure fraud—one set of laws for the bailed out banks, one for the rest of us—is to focus on the role of notaries public, and then consider that role in light of what our Supreme Court said about notaries in 1984, in a case called Bernal v. Fainter, Secretary of State of Texas.
First, let’s recap the role of notaries in the foreclosure fraud crisis: Notaries are the people who verify that someone actually is who they say they are when that person signs a document. Because banks and their agents industrialized “Document Execution” as part of their foreclosure business model, notaries did not do their jobs. Notaries’ failure to verify identities has been so complete that many people will sign as one person, say, “Linda Green.” Notaries have also been told to sign documents using one name, and then notarize their own “surrogate” signature. “Well, what’s the big deal?” bank defenders say. Beyond the fact that there’s no “business convenience” exception to following the rule of law, consider Bernal.
Bernal involved Texas’s requirement that all notaries be citizens; lawful permanent resident aliens need not apply. Bernal challenged the Constitutionality for the citizenship requirement. To rule on the question, the Court had to consider what notaries did, and whether or not what notaries did was so political, so central to representative democracy, that limiting being a notary to citizens was rational. In finding that notaries were important but not political officers of the state, the Court made some observations of note.
Trudy Kalush, Debtor and Debtor-in-Possession herein (“Debtor”), hereby files her Opposition to the Motion to Reconsider Order Sustaining Objection to Claim No. 6 (“Claim No. 6”) (the “Motion”) filed by Deutsche Bank National Trust Company, as Trustee of the IndyMac INDX Mortgage Loan Trust 2005-AR12, Mortgage Pass-Through Certificates, Series 2005-AR12 under the Pooling and Servicing Agreement dated June 1, 2005 (“Deutsche Bank”). First and foremost, Deutsche Bank’s counsel should be sanctioned pursuant to a separately filed motion for their outright fraud on the Court. What Deutsche Bank fails to tell the Court is that Michael B. Shaw is a Texas attorney that signed Claim No. 6 as “Creditor’s Authorized Agent” and at the time he signed Claim No. 6 he worked for the Brice Firm (as defined below). The Brice Firm is the same firm filing the Motion and never once informs the Court of this fact, nor does it attach a declaration of Mr. Shaw, who was sent letters, discovery pleadings, etc. Typical games of disputed lenders, and no facts or law is presented to support the Motion. Rather, it appears Deutsche Bank has claims against its counsel, which is of no concern to Debtor or the Court.
MARY E. TRAYNOR, ESQ., OF LEGAL SERVICES OF CENTRAL
NEW YORK
For Defendant
Donald A. Greenwood, J.
The defendant moves for an order directing the plaintiff to accept service of a late answer in this mortgage foreclosure action, and provides a proposed answer. Upon the application of a party, this Court may extend the time to appear or plead or compel the acceptance of a pleading untimely served upon such terms as may be just and upon a showing of reasonable excuse for the delay or default. See, CPLR §3012(a). Public policy favors resolving cases on their merits and this Court possesses broad discretion when considering a motion to file a late answer. See, Cleary v. East Syracuse Minoa Central School District, 248 AD2d 1005 (4th Dept. 1998); see also, Constable v. Matie, 145 AD2d 987 (4th Dept. 1988). Such a motion should be granted when the movant establishes a reasonable excuse for the delay, a meritorious defense and a lack of prejudice to the other party. See, Humphrey v. WIXT News Channel 9, 12 AD3d 1087 (4th Dept. 2004).
The defendant has established a reasonable excuse here through her affidavit indicating that she believed no answer was required because after threatening foreclosure the plaintiff bank advised the defendant that there was no need to hire an attorney. Defendant has shown that she [*2]was actively engaged with the plaintiff bank for years to have her payments properly credited and that in late 2009 she received a letter from plaintiff’s counsel threatening foreclosure. She responded by calling the bank, indicating that she had been making payments regularly at a higher rate than the monthly amount due. She asked if the matter was in foreclosure and if she should hire an attorney and was advised that there was no need “at this time.” As a result, when she was served with the summons and complaint, she believed what she had been told. In addition, the defendant indicates that as a pro se litigant she believed that an answer must be filed by an attorney and that her ongoing negotiation and conversations with the plaintiff bank concerning the proper application of her payments constituted an answer. The pro se defendant’s excuse is reasonable that she relied upon plaintiff’s assurances that she did not have to answer the complaint if she continued discussions with respect to the outstanding debt. See, Witzigman v. Drew, 48 AD3d 1172 (4th Dept. 2008); see also, Franklin Credit Management Corp. v. Wik, 75 AD3d 1145 (4th Dept. 2010).
The defendant has also established a meritorious defense. She contends that there was no default because her payments, if properly credited, constitute payment in full. It is important to note that plaintiff and counsel participated in ten settlement conferences over an eleven month period wherein the parties exchanged copies of money order receipts and accounting spreadsheets in an attempt to resolve and determine the actual balance due. Since that time, counsel has met with this Court on numerous occasions, continuing to resolve the issue. During those settlement conferences the defendant has submitted copies of money orders for payments of $460.00 made every month between 2006 throughNovember of 2009, when plaintiff began rejecting her payments and plaintiff has still not, after all of these conferences, established why those payments tendered and accepted each month were insufficient to pay the mortgage in full on a monthly basis. As such, the defendant has established a meritorious defense of full payment and no default. In addition, the plaintiff has suffered no prejudice since the plaintiff has delayed resolution of this case through repeated failures to produce documentation concerning the calculation of the debt due. Based upon the foregoing, the defendant’s motion to compel the plaintiff to accept her late answer is granted. The defendant’s further request seeking a hearing to determine the amount actually owed is denied at this time as premature, as both parties are entitled to discovery after the service of the answer.
NOW, therefore, for the foregoing reasons, it is
ORDERED, that the defendant’s motion seeking an order directing plaintiff to accept service of the late answer is granted, and it is further
ORDERED, that defendant must serve her answer on plaintiff’s law firm by first class mail by March 15, 2012, and it is further
ORDERED, that defendant’s motion for a hearing to determine the amount owed is denied at this time without prejudice.
A Port Saint John family thought they had avoided disaster after a loan modification was approved.
But a year later, they claim, Bank of America is foreclosing on their home even though they haven’t missed a mortgage payment since the modification.
Billie Whaley posted three signs at her home, all attacking Bank of America.
One reads: “Please help us. Bank of America is trying to steal our home.”
Whaley claims the lender double-crossed her family by approving a loan modification, taking payments for nearly a year, and now threatening foreclosure.
“I can’t think about it and not cry. We put everything into this home,” Whaley said.
Have been on deadline this week, but wanted to post a few interesting links:
• I hope everyone saw ex-Federal Deposit Insurance Corporation chief Sheila Bair’s editorial in the Washington Post, entitled, “Fix Income Inequality with $10 million Loans for Everyone!” The piece might have set a world record for public bitter sarcasm by a former top regulatory official.
In it, Bair points out that since we’ve been giving zero-interest loans to all of the big banks, why don’t we do the same thing for actual people, to solve the income inequality program? If the Fed handed out $10 million to every person, and then got each of those people to invest, say, in foreign debt, we could all be back on our feet in no time:
Under my plan, each American household could borrow $10 million from the Fed at zero interest. The more conservative among us can take that money and buy 10-year Treasury bonds. At the current 2 percent annual interest rate, we can pocket a nice $200,000 a year to live on. The more adventuresome can buy 10-year Greek debt at 21 percent, for an annual income of $2.1 million. Or if Greece is a little too risky for you, go with Portugal, at about 12 percent, or $1.2 million dollars a year. (No sense in getting greedy.)
The Obama Administration worked for months on a deal that would have let America’s biggest banks off the hook for a crime wave of runaway mortgage fraud. All they had to do in return was pledge a negligible sum of money, to be paid by their shareholders and not themselves, and which they would dispense themselves. In return, crooked bankers received immunity from prosecution – and even from investigation.
After the deal came under attack from a number of its allies, the Administration settled with the banks anyway. But it promised millions of wronged homeowners – and the nation as a whole – that it would move “aggressively” to investigate criminal misdeeds and prosecute bankers and anyone else who broke the law.
That was then, this is now. Two and half months later the Administration hasn’t even started to take the inadequate steps it promised it would take. The clock is running out on the statute of limitations and there’s no sign that the Administration has lifted a finger to investigate criminal bankers.
The Wall Street Conspiracy explores a pernicious form of fraud called illegal naked short selling that has had an enormous impact on the 2008 collapse of the US economy.
One in 10 U.S. children has been or will be affected by the nation’s surge in foreclosures, a new report says.
Five years into the foreclosure crisis, an estimated 2.3 million children have lived in homes lost to foreclosure, according to a report from First Focus, a Washington, D.C-based bipartisan advocacy group focused on families.
Another 3 million children live in homes at risk of foreclosure because home loans are in the foreclosure process or are seriously delinquent. And 3 million children lived or live in rental homes lost to foreclosure or at risk, the report says.
“Children are the often invisible victims of the foreclosure crisis,” said report author Julia Isaacs. She did the study while at the Brookings Institution and is now a senior fellow at the Urban Institute’s Labor, Human Services and Population Center.
Instead of putting a temporary halt on foreclosures, District Judge Rosemary Collyer, gives the banks 90 days to develop a plan to adhere to the new standards and 180 days to implement those plans. Until then, Americans losing their homes to foreclosure have little assurance that the seizures and sales are proper.
This might be equivalent of giving a burglar enough time to select & steal the high priced items in your home. Very well knowingly they are already inside. Unfreakingbelievable!
In a quiet office in downtown Charlotte, N.C., dozens of Wells Fargo’s foreclosure foot soldiers sit in cubicles cranking out documents the bank relies on to seize its share of the thousands of homes lost to foreclosure every week.
They stare at computer screens and prepare sworn affidavits that are used by lenders in courts across the country to seize homes. Paid $30,700 to start, these legal process specialists, the title that goes with the job, swear an oath under penalty of perjury that they’re corporate vice presidents. They’re peppered with e-mails from managers to meet daily quotas of at least 11 files day.
If they fall short, they face a verbal warning. Then written. Two written warnings could cost them the paycheck that supports a family. As more than one source for this story told msnbc.com, “I can’t afford to lose this job.”
G. Lucido also known as GALINA LUCIDO, JOHN A. LUCIDO et. al., Defendants
2009-03769
Davidson Fink L.L.P.
Attorneys for Plaintiff
28 East Main Street
Rochester, New York 14614
John Lucido
Defendant Pro Se
46 Merrits Path
Rocky Point, New York 11778
Jeffrey Arlen Spinner, J.
Plaintiff commenced this action claiming foreclosure of a mortgage by filing its Notice of Pendency and Summons and Complaint with the Clerk of Suffolk County. The mortgage at issue was given by Defendants to MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC. As Nominee For FIRST FRANKLIN FINANCIAL CORP. on March 23, 2007 in the original principal amount of $ 494,000.00 and was recorded with the Clerk of Suffolk County in Liber 21524 of Mortgages at Page 751. It was given as collateral security for a simultaneously executed Note in the same amount, the same constituting a first lien encumbering premises known as 46 Merrits Path, Rocky Point, New York.
Sometime thereafter and through no fault of their own, Defendants defaulted upon their monthly installment payments due under the Note. It is undisputed that the principal balance owed to Plaintiff, as of the date of default, was and remains at $ 493,219.75. Following the [*2]commencement of this action, an initial settlement conference, as mandated by CPLR § 3408 was convened on June 2, 2009. Thereafter, seventeen additional or adjourned settlement conferences were held, each one a component part of a continuing albeit fruitless effort to resolve this matter. It was only upon the express directive of the Court that one of Plaintiff’s representatives travelled from Fort Worth, Texas to appear with a view toward some amicable resolution of this action. However, in derogation of the mandatory provisions of CPLR § 3408(c), no person ever appeared on Plaintiff’s behalf who was vested with any authority to settle or otherwise compromise the matter. Further delays were occasioned by serious illness having afflicted both of the Defendants as well as the unfortunate passing of Mrs. Lucido (Mr. Lucido requested that the matter be temporarily removed from the conference calendar because he was unable to move forward while attending to the care of his wife). In addition, Plaintiff’s former counsel, Steven J. Baum P.C., was discharged and the firm was thereafter disbanded.
Defendant JOHN LUCIDO has, in the past, been employed as a commercial mortgage broker. Though he was not involved professionally in the procurement of the loan at issue herein, he apparently enjoys a considerable degree expertise in the area of mortgage financing, which knowledge has been displayed to this Court on multiple occasions. Throughout the settlement conference process, Defendants had, on not less than three occasions in the presence of the Court, submitted the rather voluminous financial documentation demanded by Plaintiff, to be used in considering the initial request for a customary modification. At one point in time, Defendants were offered a so-called “trial modification” with no terms disclosed other than a monthly payment amount to be remitted. However, that offer was never accepted by Defendants because of Plaintiff’s steadfast and continued refusal to disclose any of its terms to them, including the interest rate as well as the manner in which their payments would be applied to the debt, a tactic that was strenuously defended by Plaintiff’s successor counsel as “general industry practice.”
At one of the early settlement conferences, Mr. Lucido informed the Court that the servicing of his loan had been transferred to one of Plaintiff’s wholly-owned subsidiaries and that they had embarked upon a print and internet advertising campaign wherein they were offering principal reductions in an apparent effort to help homeowners bring their delinquent loans current. They advertised basic requirements of a delinquency of over 60 days duration coupled with a principal balance in excess of 120% of the value of the property (as just one example of these blandishments by Plaintiff, see homeloanhelp.bankofamerica.com ). Based in large part upon this inducement, Mr. Lucido repeatedly raised the possibility of a principal reduction and when he was advised, in open court, that it would be “considered” by the bank, he obtained a third party evaluation of the Property, reflecting the fair market value to be $ 250,000.00. He thereupon prepared and submitted a written proposal requesting a principal reduction to $ 250,000.00, coupled with the immediate deposit with Plaintiff of $ 23,588.52, a sum equal to twelve months of principal, interest, taxes and insurance for it to hold in escrow to ensure his performance, a reduction in the interest rate to 4.50% (at that time, HAMP modifications were being offered with interest at 2%) and the immediate commencement of payments upon the new principal amount at the new interest rate. This written proposal was sent to Plaintiff prior to January 26, 2011 and by February 9, 2011 it had advised Defendant, by letter, that it had received his proposal and that the same was under consideration. [*3]
The conference was adjourned several more times until June 9, 2011. At that conference, prior counsel advised Defendant and the Court that Plaintiff was “unwilling” to reduce the principal and actually misrepresented to the Court that there had been “…thirteen conferences and Defendant has never submitted financials.” Prior counsel further misrepresented to the Court that Plaintiff did not offer any loan modification programs that included a principal reduction as a component. At that juncture, the Court warned counsel that if there was found to be a lack of good faith in the settlement conference proceedings, the Court would consider the imposition of financial sanctions upon Plaintiff. The Court adjourned the conference to July 13, 2011 with the directive that a representative appear on Plaintiff’s behalf to provide an explanation to the Court.
On July 13, 2011, the matter again appeared for conference with prior counsel present. Plaintiff’s representative informed the Court that the total debt owed by Defendants and secured by the Property (principal, interest, advances, etc.) now stood at $ 673,959.23 and further, affirmatively stated under oath that “This loan is part of a pooling of loans that entrust mortgage—in fact, securities and their pooling and servicing agreement does not allow us to reduce the principal balance.” When the Court called for production of the pooling and servicing agreement (the “PSA”), counsel stated that their office was just informed “today” of this claimed restriction and, in furtherance of Plaintiff’s position, stated that “We can’t consider a principal reduction. It’s prohibited by the PSA.” The bank representative did concede, however, that Defendants had been assiduously trying to work the matter out and that they had, in fact, been submitting financial documentation as requested by Plaintiff. The bank representative also asserted that she had an appraisal showing the property value to be $ 356,000.00 but when pressed for a copy, she stated that it was “tentative.” No such appraisal was ever provided to the Court (indeed Plaintiff never produced any written indicia of the value of the Property), thusleaving the Court to accept the market value of $ 250,000.00 as advanced by Defendants.
The matter was again adjourned while the Court waited patiently for production of a copy of the PSA. Despite the Court’s order, it was not produced on September 14, 2011 nor was it provided on October 19, 2011. However, upon some intense prodding by the Court, prior counsel generously offered to provide the Court only with what Plaintiff considered to be the “salient portions” of the PSA, despite the Court’s clear and unambiguous order that the entire agreement be provided. Once again, the PSA was not provided for the December 7, 2011 conference, necessitating yet another adjournment, this time to December 21, 2011. A document purporting to be a complete copy of the PSA, consisting of 258 pages in PDF form, was finally e-mailed by prior counsel to the Court late in the day on December 15, 2011 (some 155 days after the Court ordered its production), forcing the Court to continue the matter yet again, from December 21, 2011 to January 4, 2012, and advising the parties that there would be a hearing on that date to consider the entire matter, including the possible imposition of sanctions for a lack of good faith.
At the January 12, 2012 hearing, the office of Steven J. Baum P.C. (Plaintiff’s counsel of record) failed to appear. Instead, a gentleman appeared, stating that he was per diem counsel to Pulvers Pulvers & Thompson who, in turn, was of counsel to Davidson Cook who were now attorneys for Plaintiff, though no substitution of attorney had been filed. Counsel indicated his [*4]readiness to proceed with the matter. The same bank representative who had appeared the prior year was present for the hearing as was Defendant Mr. Lucido. At the hearing, it was quickly established that the “complete” PSA as provided to the Court excluded the schedules to which it referred as an integral part, which included a description of the mortgage loans which were to be part of the pool. Although Plaintiff’s representative claimed that she was in possession of the schedules, like the phantom appraisal, they were never provided to the Court. During questioning by the Court, Plaintiff’s representative conceded that Bank of America “…always had…” the PSA in their possession. This failure to disclose, coming upon the heels of Plaintiff’s 155 day delay in providing the PSA coupled with what appears to be the intent, by Plaintiff and its prior counsel, to deceive this Court by deciding to only provide what it deemed to be the “salient” portions of the PSA, leads this Court toward the conclusion that Plaintiff was not acting in good faith throughout the pendency of this matter.
Further examination of documents revealed that Plaintiff claimed standing by virtue of an Assignment from LaSalle Bank National Association acting as Trustee under the PSA that is at issue herein. That Assignment, clearly prepared by the law firm of Steven J. Baum P.C., was acknowledged on December 22, 2008 but expressly stated that it was “…effective as of March 30, 2007.“ The PSA deals with an entity denominated as “Merrill Lynch First Franklin Mortgage Trust, Mortgage Loan Asset-Backed Certificates, Series 2007-3.” Examination of the PSA reveals that it was consummated on May 1, 2007 (a fact that is reflected in the Assignment), which was the date on which it came into legal existence.The Assignment however expressly states that it became effective some 32 days prior to the existence of the PSA. Though questions were raised by the Court, this issue was not resolved, either by counsel or by Plaintiff.
The hearing went forward with Plaintiff vigorously asserting that the PSA absolutely prohibited any reduction of the principal. Upon pointed inquiry by the Court, the following colloquy transpired:
THE COURT: Where is it in that agreement that it states that principal reductions are absolutely prohibited?
BANK: Okay. I read through that here, and I don’t know something stating completely prohibited. It doesn’t come right out and say that portion.
THE COURT: That’s what was represented to the Court. Where does it say that? Give me a page.
BANK: I highlighted it.
BANK COUNSEL: I will read it for you.
BANK: Page 86 is what I had highlighted, and then on Page 90.
BANK COUNSEL: There are provisions in the PSA permitting—
THE COURT: You said Page 86?
BANK COUNSEL: 86, it is section 301, servicer to service mortgage loans. The sentence starting with “notwithstanding” approximately fifteen lines down.
THE COURT: All right. This refers to servicer not engaging in any conduct which would essentially cause the REMIC, the Real Estate Mortgage Investment Conduit, to fail to qualify as a REMIC or to result in the imposition of certain taxes under the Internal Revenue Code.
BANK COUNSEL: Correct.
THE COURT: Where does it say that a principal reduction is prohibited?
BANK COUNSEL: What this PSA document does state is that there are provisions that can [*5]prohibit the forgiveness of principal or the reduction of principal, but there are other provisions, specifically Page 90, that put it within the discretion of the servicer to recommend a principal reduction which must be signed off on by the investor.
MR. LUCIDO: Where?
BANK COUNSEL: It begins with “notwithstanding Clause 2 above, in the event that mortgage loan is in default.”
MR. LUCIDO: Where is this? Can you highlight that? Page 90? Okay, I see it. This actually allows for it.
THE COURT: This seems to permit—
BANK COUNSEL: Correct, and that’s what we are trying to tell the Court here. There are provisions that prohibit but there are provisions that do allow the servicer to recommend the reduction of principal. But it must be accepted by the investor. It must be in the best interest of the—
THE COURT: But that’s not what has been represented to this Court by the bank and their prior counsel. In fact, prior counsel explicitly represented to this Court on more than one occasion that it is absolutely prohibited under these documents, under this PSA. That is what has been represented to this Court.
BANK COUNSEL: We do submit that it might have been due to some of the provisions prohibiting principal reduction. They would have thought that those provisions may have been triggered. It might have been the opinion of the Court that they have not been.
THE COURT: Where are the express prohibitions, the ones that the bank relies on that they used here in telling this Court that they will not consider a principal reduction because it is absolutely prohibited under the terms of the PSA?
BANK COUNSEL: Under the initial clause, which is 13 lines down from Section 3.01, servicer of service mortgage loan.
THE COURT: Show me where else that it absolutely prohibits a principal reduction? Is there anywhere else in there that you can find?
BANK COUNSEL: We have not found an absolute bar, a prohibition of forgiving or reducing. It is our position, and we submit to this Court, that there are circumstances that if occurring, which is also the signing off of the client, that a principal reduction could occur under certain circumstances.
Subsequent to the foregoing colloquy and without any further concession to the Court’s line of inquiry, counsel advised the Court that an offer was now being made to Defendant, stating that “We are going above and beyond what—we are bending the rules of our underwriting. We are attempting to put together a product here that is not generally offered to the rest of the populace, the rest of the clientele, a 43.5 year product at 2% without the financials.” When the Court inquired as to the reason for Plaintiff’s abrupt about-face, counsel attempted to deflect attention from Plaintiff, instead intimating that the Court was, in effect, coercing a resolution by having “…held the bank’s feet to the fire…” and further mis-stating the facts by incorrectly asserting that “…This Court was not willing to hear it after learning that there was not a principal reduction.” It must be pointed out that in this matter as in all other foreclosure matters assigned to this Part, the Court has only attempted to fulfill its statutory responsibilities and has not, in any manner forced, coerced nor compelled any particular resolution. It is also important to note here that counsel advised the Court that Plaintiff had a new BPO showing a value of $ 346,000.00 and although requested by the Court, this BPO, like the phantom appraisal referred to on July 13, 2011, was never produced.
Based upon the foregoing factual scenario, the Court has serious and substantial questions as to whether or not Plaintiff and its prior counsel of record have acted in good faith in this [*6]matter. By reason of the lengthy delays herein, interest has been accumulating on the debt along with sums that may be due for advances for property taxes and insurance, to say nothing of Plaintiff’s claimed counsel fees (which are, of course, subject to review by the Court). While it is important to note that the Court has grave reservations related to the actions in this matter of Steven J. Baum P.C., Plaintiff’s former counsel of record, the Court hastens to add that it has absolutely no such issues with either Henry P. DiStefano Esq. or Alicia Menechino Esq. (in fact, the appearances covered by these two most excellent attorneys were the only ones upon which the Court was able to obtain a straight answer about anything on the Plaintiff’s case herein).
In 2008, New York’s Assembly and Senate enacted Chapter 472 of the Laws of 2008 which constituted a sweeping reform of the laws governing sub-prime, high cost and non-traditional home loans. Included as part and parcel of that legislation was the newly enacted CPLR § 3408 which required a mandatory settlement conference in an action to foreclose such a mortgage. Since that enactment, this Court, sitting first as Suffolk County’s Residential Mortgage Foreclosure Conference Part and thereafter as an I.A.S. Part, has mandated that the parties to such an action act and negotiate in good faith. Indeed, in December of 2009, both the Assembly and the Senate amended CPLR § 3408 by way of Chapter 507 of the Laws of 2009, which, among other things, added a requirement that the parties act and negotiate in good faith (see CPLR § 3408(f) which states that “Both the plaintiff and the defendant shall negotiate in good faith to reach a mutually agreeable resolution, including a loan modification, if possible.”). This statutory scheme is further buttressed and implemented by the provisions of The Uniform Rules For The Trial Courts, 22 NYCRR § 202.12-a. Indeed, that Rule vests the Court with broad powers to assist the parties in reaching a settlement of their differences, stating, in pertinent part, that “…The court may also use the conference for whatever other purposes the court deems appropriate,” 22 NYCRR § 202.12-a(c)(2). That Rule further imposes upon the Court the duty to be certain that all parties act in compliance therewith, stating that “…The court shall ensure that each party fulfills its obligation to negotiate in good faith…” 22 NYCRR § 202.12-a(c)(4). For this Court to do anything less would be a serious derogation of its statutory responsibilities and would do a great dis-service to the public that it is obligated to serve..
Since an action to foreclose a mortgage is clearly a suit in equity, Jamaica Savings Bank v. M.S. Investing Co. 274 NY 215 (1937), all of the rules and tenets of equity are fully applicable to the proceeding, including the rules governing punitive or exemplary damages, I.H.P. Corp. v. 210 Central Park South Corp. 12 NY2d 329 (1963). In the timeless words of Judge Benjamin Cardozo “The whole body of principles, whether of law or of equity, bearing on the case, becomes the reservoir drawn upon by the court in enlightening its judgment” Susquehannah Steamship Co. Inc. v. A.O. Andersen & Co. Inc. 239 NY 289 at 294 (1925). In a suit in equity, the Court is vested with jurisdiction to do that which ought to be done. While the formal distinctions between an action at law and a suit in equity have long since been abolished in New York (see CPLR 103, David Dudley Field Code of 1848 §§ 2, 3, 4, 69), the Supreme Court, as New York’s trial court of general jurisdiction, is nevertheless vested with equity jurisdiction and the distinct rules governing the application of the principles of equity are still very much applicable, Carroll v. Bullock 207 NY 567 (1913).
While the Court understands that the instruments upon which a mortgage foreclosure [*7]action is based are contractual in nature and, understanding that “[s]tability of contract obligations must not be undermined by judicial sympathy” Graf v. Hope Building Corp. 254 NY 1 at 4 (1930), it is equally true, as decreed in Noyes v. Anderson 124 NY 175 at 179 (1891) that “a party having a legal right shall not be permitted to avail himself of it for the purposes of injustice or oppression.” Thus, equity will not intervene on behalf of one who acts in an unjust, unconscionable or egregious manner, York v. Searles 97 AD 331 (2nd Dept. 1904), aff’d 189 NY 573 (1907). This Court cannot, and will not, countenance a lack of good faith in the proceedings that are brought before it, especially where blatant and repeated misrepresentations of fact are advanced, neither will it permit equitable relief to lie in favor of one who so flagrantly demonstrates such obvious bad faith.
In those very rare instances where the conduct of a party is unconscionable, shocking or egregious, a Court of equity is vested with the power to award exemplary damages. Exemplary damages may lie in a situation where it is necessary to both effectuate some punishment and to deter the offending party from engaging in such reprehensible conduct in the future. Such an award may also be made to address, as so clearly and succinctly enunciated by our Court of Appeals in Home Insurance Co. v. American Home Products Corp. 75 NY2d 196, 550 NE 2d 930, 551 NYS 2d 481 (1989) “…gross misbehavior for the good of the public…on the ground of public policy”. Indeed, exemplary damages are intended to have a deterrent effect upon conduct which is unconscionable, egregious, deliberate and inequitable, I.H.P. Corp. v. 210 Central Park South Corp. 12 NY2d 329, 189 NE 2d 812, 239 NYS 2d 547 (1963).
In the matter that is sub judice, the record unequivocally demonstrates that Plaintiff, through its deliberate and contumacious conduct, has failed to act in good faith, although required by statute to do so. This Court is driven to the inescapable conclusion that Plaintiff has deliberately acted in bad faith over the preceding thirty four months. Through its repeated and persistent failure and refusal to comply with the lawful orders of the Court including those which directed production of documentation that was essential to address critical issues in the present matter, it has repeatedly caused to be put forth material mis-statements of fact which appear to have been calculated to deceive the Court and has delayed these proceedings without good cause, thereby needlessly increasing the amount owed upon the mortgage debt, to say nothing of the needless waste of the Court’s time and resources, as well as those of Defendant. In short, the conduct of Plaintiff in this matter has been over-reaching, willful and unconscionable, is wholly devoid of even so much as a scintilla of good faith and cannot be countenanced by this Court.
Under the unique circumstances of this matter, the Court determines that it is fair and equitable that Plaintiff be forever barred, precluded, prohibited and foreclosed of and from collecting any of the claimed interest accrued on the loan between the date of default and the date of this Order; that Plaintiff be barred and prohibited from recovering any claimed legal fees and expenses; and further, that the amount due Plaintiff under the Note and Mortgage herein be determined at this time to be no more than the principal balance of $ 493,219.75, exclusive of advances for property taxes and property insurance. The Court also determines that under the circumstances herein, the imposition of exemplary damages upon Plaintiff is equitable, necessary and appropriate, both in light of Plaintiff’s shocking and deliberate bad faith conduct as well as to serve as an appropriate deterrent to any future outrageous, improper and wrongful conduct. The Court hereby fixes and determines [*8]the amount of exemplary damages in the sum of $ 200,000.00, recoverable by Defendants from Plaintiff in the nature of a principal reduction upon the mortgage sought to be foreclosed by Plaintiff.
For all of the foregoing reasons, it is, therefore
ORDERED , ADJUDGED and DECREED that Plaintiff, its successors, assigns and others are forever barred, foreclosed and prohibited from demanding, collecting or attempting to collect, directly or indirectly, any and all of the sums secured by the mortgage under foreclosure herein designated or denominated as interest, attorney’s fees, legal fees, costs, disbursements or any sums other than the principal balance as well as advances for property taxes and property insurance if any, that may have accrued from the date of default up to the date of this Order; and it is further
ORDERED, ADJUDGED and DECREED that the debt due Plaintiff under the Note and Mortgage under foreclosure in this action be fixed at $ 493,219.75, exclusive of any sums advanced for property taxes or property insurance; and it is further
ORDERED, ADJUDGED and DECREED that Defendant JOHN LUCIDO be and is hereby awarded exemplary damages as against Plaintiff in the amount of $ 200,000.00 to abide the event; and it is further
ORDERED, ADJUDGED and DECREED that the foregoing award of $ 200,000.00 in exemplary damages shall be and is hereby applied as a credit against the principal balance of the mortgage under foreclosure herein, amending and reducing the same to $ 293,219.75.
This shall constitute the Decision, Judgment and Order of the Court.
Sandra Crespo, appellant pro se.Shimberg & Friel, PC, attorneys for respondent (Kevin B. Golden, on the brief).
Before Judges Axelrad and Ostrer.
NOT FOR PUBLICATION
PER CURIAM.
In this mortgage foreclosure case, defendant Sandra Crespo appeals from an order of April 15, 2011, granting the motion of plaintiff, Wells Fargo Bank, NA, dba America’s Servicing Company (Wells Fargo), for summary judgment striking defendant’s answer and dismissing her counterclaims, and order of May 13, 2011, denying defendant’s motion to vacate plaintiff’s motion for summary judgment. Defendant argues there were genuine issues of material fact regarding standing, plaintiff failed to authenticate its documents, and she generally presented sufficient factual and legal bases to withstand summary judgment on her counterclaims. We affirm in part and reverse in part.
On August 2, 2005, defendant borrowed $264,000 from Credit Suisse First Boston Financial Corporation (Credit Suisse) to purchase a residential property located in Ridgefield Park, secured by a note and purchase money mortgage to Credit Suisse.[1] The mortgage was recorded with the Bergen County Clerk on December 8, 2005. On March 1, 2010, defendant defaulted on the loan.
On August 23, 2010, MERS as nominee for Credit Suisse assigned the mortgage and underlying obligation to plaintiff. The assignment was recorded by the Bergen County Clerk on September 13, 2010.
On September 2, 2010, plaintiff filed a foreclosure complaint against defendant. Plaintiff recited the aforementioned history. Defendant was served with the complaint in October.
In December 2010, defendant filed an answer and asserted the affirmative defenses of lack of personal jurisdiction due to failure to properly serve process (first), failure to state a cause of action (second), lack of subject matter jurisdiction (third), lack of standing (fourth), statute of limitations bar (fifth), failure to join a necessary party (sixth), and failure to mitigate damages (seventh). She also asserted counterclaims alleging violations of the Truth in Lending Act, Home Ownership Equity Protection Act, Real Estate Settlement Procedures Act and Deceptive Practices Act.
In March 2011, plaintiff filed a motion for summary judgment to strike defendant’s answer and dismiss her counterclaims. The motion was unopposed and granted on April 15, 2011. In the motion disposition sheet, the court found defendant was properly served and summarily rejected defendant’s second, third, fifth, sixth and seventh affirmative defenses as a matter of law. The court also explained the legal basis for its grant of summary judgment in favor of plaintiff on each of defendant’s counterclaims.
In addressing and rejecting defendant’s standing defense, the court noted that plaintiff submitted a note containing an allonge endorsed in blank, a mortgage, and a Truth in Lending Disclosure Statement, all dated August 2, 2005 and signed by defendant, an assignment of mortgage dated August 23, 2010, and a notice of intention to foreclose dated April 11, 2010. The court found the certification of plaintiff’s counsel, to which the documents were attached, to be legally insufficient under Rule 1:6-6 because there was no indication he had “personal knowledge sufficient to certify [their] accuracy.” However, the court was satisfied the documents were sufficiently authenticated by Erin A. Hirzel Roesch, a litigation specialist with plaintiff, who subsequently certified that she reviewed defendant’s loan file. The court further noted Roesch’s certification that America’s Servicing Company, a division of plaintiff, was “still the holder and owner” of the subject note and mortgage, thereby finding plaintiff had standing to maintain the action.
A week later, defendant filed a motion to vacate the order, claiming she appeared at the courthouse on April 1 and told the clerk she intended to file opposition to plaintiff’s motion, but was not advised of the deadline. According to defendant, when she appeared on April 20 to file opposition, she was told a decision had already been made. Defendant asserted the following three grounds for denial of plaintiff’s motion: (l) lack of standing; (2) failure of plaintiff to present a prima facie case by presenting admissible evidence by a competent witness; and (3) there were genuine issues of fact regarding her defenses.
As to standing, defendant argued plaintiff failed to present properly authenticated evidence that Credit Suisse authorized MERS to assign its mortgage to plaintiff. She noted the assignment of mortgage was executed by Judith T. Romano, “Assistant Secretary and Vice President” of MERS as Credit Suisse’s nominee. Defendant expressed her belief that Romano was an attorney in the law firm representing plaintiff in the foreclosure and noted the absence of any resolution from MERS or Credit Suisse authorizing Romano to act on its behalf. Defendant additionally argued that plaintiff failed to present properly authenticated evidence that it acquired ownership or control of the note prior to the foreclosure complaint, i.e., it was the holder of the note or a nonholder in possession with rights of the holder under N.J.S.A. 12A:3-301 as we required in Wells Fargo Bank, N.A. v. Ford, 418 N.J. Super. 592, 597-99 (App. Div. 20ll). See also Bank of N.Y. v. Raftogianis, 418 N.J. Super. 323, 327-32 (Ch. Div. 2010). Defendant emphasized that Roesch merely certified she “reviewed the loan file” and disclosed no source of knowledge, supporting details, or documentary evidence for her statement that America’s Servicing Company acquired the note and mortgage from Credit Suisse in a transaction dated December 5, 2005, or that America’s Servicing Company was still the holder of the note and mortgage. Defendant noted the assignment of mortgage made no mention of the December 5, 2005 date, and Roesch’s certification made no mention of the August 23, 2010 date reflected on the assignment of mortgage. Defendant also pointed out that the allonge to the note was undated and there was an illegible signature under the legend “PAY TO THE ORDER OF _____________ WITHOUT RECOURSE” identified to represent “Lydian Data Services Its: Attorney-in-Fact for Credit Suisse [],” raising other material issues of fact respecting the note. Defendant then questioned the discrepancy of charges on her Good Faith Estimate of Settlement Charges and Truth in Lending Disclosure Statement, and generally claimed there were violations on the face of the documents that would grant her the right to the counterclaims. Defendant also certified about the pending Home Affordable Modification Program (HAMP) application she had submitted to plaintiff.
Plaintiff’s opposition primarily argued that defendant failed to comply with Rule 4:50-1 entitling her to vacate the judgment. As explained in its motion disposition sheet, the court found sufficient excusable neglect to examine the substantive merits of defendant’s opposition, but by order of May 13, 2011, denied defendant’s request to vacate the summary judgment dismissal. The court incorporated its prior findings. It additionally found that in weighing Roesch’s certification and documents against defendant’s lack of a claim “that some other lender was making a competing demand for payment” and her acknowledgement that she was dealing with plaintiff in attempting to obtain a loan modification, “defendant’s arguments and lack of evidential support pale in comparison to the documentary evidence submitted by plaintiff to support the fact that it has standing in this matter.” The court further noted that defendant did not dispute that she was in default of the loan, and her defenses appeared to relate to charges at the time of closing in July 2005, which were barred by the statute of limitations. This appeal ensued.
On appeal, defendant renews her arguments regarding the genuine issues of material fact regarding standing, emphasizing Roesch’s lack of personal knowledge of the facts and plaintiff’s lack of authentication of the documents. Defendant repeats her general allegations that there were genuine issues of fact respecting her counterclaims and explanation respecting the estimate and settlement charges, referencing, for the first time, the Consumer Fraud Act, N.J.S.A. 56:8-1 to-20.
Plaintiff counters that Roesch had sufficient personal knowledge to satisfy Rule 1:6-6 because she reviewed defendant’s loan file. See Claypotch v. Heller, 360 N.J. Super. 472, 488-89 (App. Div. 2003). According to plaintiff, Roesch’s certification authenticates the note and mortgage, establishes plaintiff acquired the note and mortgage in December 2005, and because the endorsement in blank permits the note to be transferred and negotiated by delivery alone to a bearer, Raftogianis, supra, 418 N.J. Super. at 336, plaintiff demonstrated it was the holder of the note and mortgage. Plaintiff further asserts that although the Uniform Commercial Code does not require a corporate resolution or other documents to prove standing, if defendant had opposed plaintiff’s motion for summary judgment, plaintiff would have produced documentation authorizing Romano to execute the assignment and power-of-attorney or similar documentation respecting the endorsement on the note. Plaintiff additionally addresses the legal bases supporting the court’s dismissal of defendant’s separate defenses and counterclaims.
We commend the court’s willingness to accept defendant’s inadvertent failure to timely respond to the summary judgment motion and consider her opposition on the merits. Based on our review of defendant’s arguments in the context of the record and applicable law, Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995), we are satisfied summary judgment was appropriate and the court correctly ruled that defendant’s separate defenses, with the exclusion of standing, and her counterclaims, were legally without merit. Accordingly, we affirm those aspects of the orders under appeal striking defendant’s first, second, third, fifth, sixth, and seventh affirmative defenses, and the four counterclaims. As defendant did not plead violations of the Consumer Fraud Act as a counterclaim, we will not consider that issue on appeal. See Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973) (holding that appellate courts will decline to consider issues not properly presented to the trial court when an opportunity for such a presentation is available unless the questions involve the trial court’s jurisdiction or concern matters of great public interest).
We reverse and remand, however, with respect to the issue of standing. We are not persuaded the documents relied upon by plaintiff to establish its status as a holder were properly authenticated. Roesch’s certification is woefully deficient. First of all, she does not even certify that the attached documents are “true copies.” Moreover, Roesch provides no indication how she obtained the alleged knowledge that America’s Servicing Company acquired defendant’s note and mortgage from Credit Suisse “in a transaction dated December 5, 2005,” and she provides no specifics or supporting documentation. If that information were contained in defendant’s loan file, it should not have been omitted from the foreclosure complaint. Moreover, no explanation is provided as to why the assignment of mortgage is dated August 23, 2010 and contains no reference to the earlier date. Finally, Roesch does not explain how her review of defendant’s loan file provides her sufficient information to conclude that “America’s Servicing Company is still the holder and owner of the subject note and mortgage.”
Although plaintiff may not be required to produce all of the documentation referenced by defendant in her opposition to summary judgment, it still must present sufficient competent evidence to establish standing to pursue this foreclosure action to be granted summary judgment as a matter of law. Plaintiff’s flip response that it would have provided explanations or supporting documentation if defendant had filed opposition to the summary judgment motion is unacceptable.
This is not a situation where defendant failed to respond to the complaint and on the eve of sheriff’s sale moved to vacate default, challenging plaintiff’s standing and demanding production of documents. Rather, defendant filed an answer to the complaint promptly raising legitimate questions of fact regarding whether plaintiff established that it acquired ownership or control of the note from Credit Suisse as a matter of law to maintain the foreclosure action. Because plaintiff failed to submit facts and documentation to meet its burden to establish the bona fides of the purported assignment to establish standing as a matter of law, summary judgment should not have been granted on this ground.
Accordingly, summary judgment in favor of plaintiff limited solely to defendant’s fourth affirmative defense, i.e., lack of standing, is reversed and the case is remanded to the trial court for further proceedings in conformity with this opinion. We leave to the trial court’s discretion the parameters of further discovery and exchange of documentation.
[1] The mortgage listed Mortgage Electronic Registration Systems, Inc. (MERS) as the nominee for Credit Suisse and its successors and assigns.
State District Court Clerk Doug Welborn of Baton Rouge sued 17 banks and mortgage companies Tuesday, alleging they participated in a racketeering conspiracy to avoid millions of dollars in fees on real estate transactions over the past decade.
No specific dollar amounts are included in the suit, but Welborn’s attorneys in Dallas County, Texas, said approximately $450 million in combined losses were suffered by court clerks in East Baton Rouge and 28 other Louisiana parishes.
“We’re pursuing this matter on behalf of the clerks of court,” said attorney Richard D. Faulkner from his office in Richardson, Texas. Faulkner estimated the alleged loss in East Baton Rouge Parish alone at $40 million.
Attorney Ted B. Lyon, of Mesquite, Texas, also represents Welborn. Lyon said additional suits will be filed against the same mortgage lenders and banks in Texas and several other states, beginning in about a month.
Alleged losses are expected to total billions of dollars, Lyon added. “It’s huge,” he said.
Defendants named in Welborn’s suit include The Bank of New York Mellon; Bank of America; Chase Home Mortgage Corporation of the Southeast; CitiMortgage Inc.; GMAC Residential Funding Corp.; HSBC Finance Corp.; and Merrill Lynch Credit Corp.
DOUG WELBORN East Baton Rouge Parish Clerk of Court
vs.
The Bank of New York Mellon; Bank of America;
Chase Home Mortgage Corporation of the Southeast;
CitiMortgage Inc.; GMAC Residential Funding Corp.;
HSBC Finance Corp.; and Merrill Lynch Credit Corp.
IN THE DISTRICT COURT OF APPEAL FIRST DISTRICT, STATE OF FLORIDA
HARVEY COVINGTON & THOMAS, LLC, as servicing agent for Harvey Covington & Thomas of South Florida LLC (“Harvey Covington”), Appellant,
v.
W M C MORTGAGE CORP., JAMES THOMPKINS, MONICA THOMPKINS, Unknown Parties, Appellees. _________________________________/
Opinion filed April 17, 2012.
An appeal from the Circuit Court for Okaloosa County.
Jack R. Heflin, Judge.
Amy L. Fischer and F. Malcolm Cunningham, Jr., of The Cunningham Law Firm, P.A., West Palm Beach, for Appellant.
No appearance for Appellee.
PER CURIAM.
We reverse the summary final judgment of foreclosure issued in favor of the Appellee/Plaintiff, WMC Mortgage Corp. (“WMC”). The Appellant, Harvey Covington & Thomas, LLC (“Harvey Covington”), raises three issues on appeal.
Two of the three issues lack merit; however, we reverse on the basis of the third issue.
Harvey Covington filed a motion to continue, seeking delay of the summary judgment hearing in order to allow time for it to conduct discovery on the affidavits submitted by WMC. It stated in its motion that WMC had never responded to its discovery requests. The trial court found that “while the plaintiff has not provided the discovery requested by Harvey Covington, in many respects, the discovery requested seeks information that borders on the irrelevant and in light of the age of this case,” the court denied the motion. The denial of this motion was error.
Harvey Covington may have been able to successfully challenge the affidavits as the only evidence of the amount due and owing on hearsay grounds, had it been allowed time to complete discovery and had the case then proceeded. See, e.g., Mazine v. M & I Bank, 67 So. 3d 1129 (Fla. 1st DCA 2011). It is speculative at this stage whether discovery would in fact have shown the documents inadmissible or insufficient evidence, but with discovery pending and such essential questions unresolved, the trial court abused its discretion in denying the motion to continue. See generally A.P.D. Holdings, Inc. v. Reidel, 865 So. 2d 682 (Fla. 4th DCA 2004) (noting that a ruling on a motion to continue is reviewed for abuse of discretion); American Funding, Ltd. v. Hill, 402 So. 2d 1369, 1370 (Fla. 1st DCA 1981) (observing that rule 1.380(a)(2) requires that, if a party fails to respond to a request for inspection under rule 1.350, the inspection shall be permitted as requested). Summary judgment should not be granted until the material facts have been sufficiently developed for the court to be reasonably certain that no genuine issue of material fact exists. See Branauer v. Publix Supermarkets, Inc., 657 So. 2d 932, 933 (Fla. 2d DCA 1995). “Generally, it is an abuse of discretion for a trial court to grant summary judgment where the opposing party has not had an opportunity to complete discovery.” Crowell v. Kaufmann, 845 So. 2d 325, 327 (Fla. 2d DCA 2003). Factual issues inherent in determining issues of agency may preclude summary judgment before discovery into the agency issue has been completed. See Vance v. Barton-Malow Thatcher, Inc., 680 So. 2d 492, 494 (Fla. 1st DCA 1996).
Because the trial court granted summary judgment without allowing Harvey Covington to complete discovery on the colorable issue of the affidavits, we reverse and remand for further proceedings, including allowing the Appellant to conduct discovery on WMC’s affidavits.
EMPIRE DEVELOPERS GROUP, LLC; RICHARD B. MELSON; AMY MELSON; WILLIAM L. SLAVICH; and BRENDA SLAVICH, Appellants, v. LIBERTY BANK; KENNETH D. GOODMAN, Individually and as Trustee of the Bellini Investment Trust; EMPIRE BUILDERS OF COLLIER COUNTY, INC.; BELLINI DEVELOPMENT, LLC; MIROMAR LAKES MASTER ASSOCIATION, INC.; MARK T. BERGMANN; UNKNOWN TENANT 1; UNKNOWN TENANT 2; UNKNOWN TENANT 3; UNKNOWN TENANT 4; UNKNOWN TENANT 5; UNKNOWN TENANT 6; UNKNOWN TENANT 7; UNKNOWN TENANT 8; UNKNOWN TENANT 9; and ALL UNKNOWN PARTIES IN INTEREST, Appellees.
District Court of Appeal of Florida, Second District.
Opinion filed April 13, 2012.
Mark H. Muller of Mark H. Muller, P.A., Naples, for Appellants.Theodore R. Walters and Jayne M. Skindzier of Cummings & Lockwood, LLC, Naples, for Appellee Liberty Bank.
No appearance for remaining Appellees.
CRENSHAW, Judge.
Empire Developers Group, LLC, Richard B. Melson, Amy Melson, William L. Slavich, and Brenda Slavich (collectively referred to as Empire) appeal a final deficiency judgment entered against them in favor of Liberty Bank in the amount of $2,657,219.72. Because the deficiency judgment is not supported by competent, substantial evidence as to the fair market value of the property at the time of foreclosure sale, we reverse and remand for further proceedings.
In July 2009, Liberty Bank brought an action against Empire for the foreclosure of nine residential condominium units. A final judgment of foreclosure was entered on December 7, 2009, in the amount of $6,768,895.09 plus interest. A foreclosure sale was held on January 6, 2010, and Liberty Bank was the successful bidder on the units with a bid of $800,100. Thereafter, Liberty Bank filed a motion for deficiency judgment. To mitigate damages, Liberty Bank sold seven of the nine condominium units by the date of the deficiency hearing.[1] In February 2011, following the deficiency hearing, the trial court entered its final deficiency judgment against Empire for $2,657,219.72. This appeal timely followed.
In calculating the deficiency, the trial court used two methodologies to determine the fair market value of the nine condominium units. To assess the value of the two unsold units, the trial court relied upon appraisals submitted by Liberty Bank, which assessed the fair market value of the units as of June 13, 2010. And to determine the value of the seven units sold by Liberty Bank, the trial court used the value of the net sales proceeds from each sale.
We conclude that the trial court erred by relying upon these values submitted by Liberty Bank to determine the fair market value of the nine units because no evidence was presented to link the value of the units as of the June 13, 2010, appraisal date or the sale dates with the value of the units at the date of foreclosure sale on January 6, 2010. Instead, at the deficiency hearing, counsel for Liberty Bank conceded that the values submitted were not as of the foreclosure sale date, but argued “that in six months there would not have been much change in the rate.” This conclusory statement, without more, is insufficient to show the value of the units at the date of the foreclosure sale. Because there was no competent, substantial evidence presented as to the fair market value of the property at the time of the foreclosure sale, we reverse the deficiency judgment and remand to the trial court for further proceedings.
We also note that the trial court erred in awarding Liberty Bank interest on the entire debt from the date of the final judgment of foreclosure through the date of the deficiency hearing. See Estepa, 678 So. 2d at 878 (“A secured party is not entitled to statutory interest on the entire foreclosure judgment following the date of the foreclosure sale.”). Accordingly, on remand, “statutory interest may only be awarded against the remaining debt” from the date of the foreclosure sale. Shaw v. Charter Bank, 576 So. 2d 907, 909 (Fla. 1st DCA 1991).
Reversed and remanded.
WHATLEY, J., Concurs.
KHOUZAM, J., Concurs in result only.
NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF FILED.
[1] The sales occurred on different dates ranging from May to November 2010.
04/18/12 — eSignSystems, a division of Wave Systems Corp. (NASDAQ: WAVX), announced today that Medallion Analytics has licensed and implemented the SmartSAFE electronic vault for use in its web-based mortgage audit and analytics solutions. SmartSAFE provides lifecycle management of electronically signed, legally-binding documents and records, meeting ESIGN and UETA compliance. The combination of Medallion and eSignSystems’ technology gives loan originators a break-through solution to automate the entire pre- and post-close loan origination audit and compliance process.
[…]
eDeliver, eSign & Conduct MERS eRegistry Transactions Medallion has also licensed the SigningRoom application from eSignSystems to simplify the entire eDelivery and eSigning process. Users can now electronically sign and “seal” electronic documents securely with user name and password, making it convenient for all parties to remotely access and electronically sign important documents related to closing a loan. In addition, Medallion has also incorporated eSignSystems’ SmartCLOSE, an optional module that extends the power of the SmartSAFE to include electronic integration to the MERS® eRegistry to register and track eNotes. MERS® is the industry-endorsed tracking tool for electronic mortgages.
Attorney General Martha Coakley led a coalition of states in urging Fannie Mae and Freddie Mac to reverse its position. AG Coakley made her case in a letter sent yesterday to Edward DeMarco, Acting Director of the Federal Housing Finance Agency (FHFA) and was joined by 10 other states including California, Delaware, Illinois, Iowa, Maryland, Minnesota, New Mexico, New York, Oregon, and Vermont.
For the nearly two years that Kamala Harris has been California’s Attorney General, she has made the fight against fraudulent foreclosures her signature issue. Now, largely due to pressure from business groups, legislators look like they may soon succeed in tanking her most ambitious plan yet to clean up the state’s mortgage market.
Earlier this year, Harris began pushing for California to pass the “Homeowner Bill of Rights,” a collection of six bills that would make significant changes in the way the state regulates mortgages.
Harris was scheduled to testify before the California Assembly’s Senate Banking and Finance Committee on Monday; however, only moments before she was supposed to appear, both of the bills she was discussing were pulled by the committee chairman, Democrat Mike Eng of Monterey Park.
The sudden change reportedly prompted a chorus of catcalls from the assembled crowd.
AG Coakley, 10 Attorneys General Urge Fannie Mae, Freddie Mac to Implement Principal Forgiveness for Homeowners
Joint Letter Sent to FHFA Acting Director DeMarco Seeking Relief For Homeowners
BOSTON – Arguing that the failure to implement principal loan forgiveness in its loan modification programs harms struggling homeowners and investors, Attorney General Martha Coakley led a coalition of states in urging Fannie Mae and Freddie Mac to reverse its position. AG Coakley made her case in a letter sent yesterday to Edward DeMarco, Acting Director of the Federal Housing Finance Agency (FHFA) and was joined by 10 other states including California, Delaware, Illinois, Iowa, Maryland, Minnesota, New Mexico, New York, Oregon, and Vermont.
“The financial stability of Fannie Mae and Freddie Mac will not be harmed if they engage in principal forgiveness and according to new data could save close to $1.7 billion,” AG Coakley said. “We will soon see the results of the country’s largest banks implementing principal loan reduction as required under the recent Multistate Servicing Settlement. It is now time for the FHFA to accept the fact that principal forgiveness programs help borrowers, help communities and can improve the creditors’ bottom line.”
Given Director Demarco’s recent acknowledgment that principal forgiveness may be beneficial to both homeowners and investors, the letter advocates for swift implementation of principal forgiveness in federal loan modification programs. The letter argues there is no data to support the view that forgiveness conflicts with the goal of asset preservation. AG Coakley insists that forgiveness restores a borrower’s status as a stakeholder and provides them a stronger incentive to maintain payments.
In the letter, the Attorneys General argue that the increase of incentive payments to investors for allowing forgiveness under the Home Affordable Modification Program (HAMP) should also reduce concerns regarding the potential impact on the financial stability of Fannie Mae and Freddie Mac as either owner or guarantor of these loans. Additionally, the letter states that reluctance to engage in principal forgiveness based on the inability of internal computer systems to handle new programs is not an excuse as the nations’ largest banks overcame similar concerns after the Multistate Servicing Settlement reached last month.
As part of their argument, the Attorneys General write, “More than five million people have lost their homes due to foreclosure in the past five years, with millions more on the brink of foreclosure. Effectively resolving this foreclosure crisis is a key to restoring a healthy economy for our entire country. Because Fannie Mae and Freddie Mac own a majority of the nation’s home loans, they must be a leader in the arena of loan modification best practices, and not an obstruction.”
The FHFA has formally acknowledged that principal forgiveness can serve the long-term interests of taxpayers when compared to foreclosure by combining the goal of asset preservation and foreclosure prevention. According to Director DeMarco’s remarks to the Brookings Institution on Tuesday, an initial analysis of new incentives from the Treasury Department by the FHFA shows that Fannie Mae and Freddie Mac could save $1.7 billion if they applied principal forgiveness in its modification programs.
This is the second letter sent to Director DeMarco in just the past two months. In February, AG Coakley also insisted that the FHFA should allow for principal forgiveness which would increase loan modifications and help stabilize the housing market and economy. This new letter with additional facts, now backed by 10 additional Attorneys General, reflects a growing consensus around this issue.
Through the agreement, five major lenders are expected to provide approximately $14.6 million in cash payments to Massachusetts borrowers, $257 million worth of mortgage relief, and a direct payment of more than $44.5 million to the Commonwealth that will be used to assist homeowners. The national agreement settles allegations of widespread use of fraudulent documents by Bank of America, Wells Fargo, JP Morgan Chase, Citi, and GMAC/Ally.
###########
Read Letter Sent to FHFA Acting Director DeMarco Below
The Oklahoma Supreme Court has recently issued several opinions:
Deutsche Bank National Trust v. Brumbaugh, 2012 OK 3 {Approved for Publication}
Deutsche Bank National Trust v. Byrams, 2012 OK 4
HSBC Bank USA v. Lyon, 2012 OK 10
Deutsche Bank National Trust Company v. Matthews, 2012 OK 14
Deutsche Bank National Trust Company v. Richardson, 2012 OK 15
CPT Asset Backed Certificates; Series 2004-EC1 v. Kham, 2012 OK 22
Bank of America, N.A. v. Kabba, 2012 OK 23
JPMorgan Chase Bank, N.A. v. Eldridge, 2012 OK 24
(It is important to note that only one of the opinions, Deutsche Bank National Trust v. Brumbaugh, 2012 OK 3, has been approved for publication so far.)
These opinions hold that to commence a foreclosure action, the plaintiff must show that it has the right to enforce the promissory note, and in the absence of such showing, the plaintiff lacks standing to bring the lawsuit. The fact patterns in each of the cases vary slightly (seven are based on appeals from orders granting summary judgment entered by the trial court, and one is based upon a default judgment), but the basic fact pattern is as follows: Plaintiff files a foreclosure action either without attaching a copy of the promissory note or attaching the note without proper indorsement(s) by the original lender. Defendant raises the issue that Plaintiff does not have standing to sue, either in response to a Motion for Summary Judgment or by pleadings filed after the Journal Entry of Judgment. Motions are denied after Plaintiff provides documentation showing indorsement or allonge. Defendant appeals.
What we have learned so far: Whenever dealing with the banks and or with the government, they are from the same mold. We cannot tell any difference.
This “mortgage task force group” thing is also NO Different than that MERS system…There are no employees!
NY Daily News-
On March 9 — 45 days after the speech and 30 days after the announcement — we met with Schneiderman in New York City and asked him for an update. He had just returned from Washington, where he had been personally looking for office space. As of that date, he had no office, no phones, no staff and no executive director. None of the 55 staff members promised by Holder had materialized. On April 2, we bumped into Schneiderman on a train leaving Washington for New York and learned that the situation was the same.
Tuesday, calls to the Justice Department’s switchboard requesting to be connected with the working group produced the answer, “I really don’t know where to send you.” After being transferred to the attorney general’s office and asking for a phone number for the working group, the answer was, “I’m not aware of one.”
The promises of the President have led to little or no concrete action.
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