New York State of Mind-

On Halloween, the Supreme Court decided that it would not hear an appeal challenging the constitutionality of a Connecticut law which takes direct aim at the MERSCORP model. If you provide mortgages, there is a good chance that you benefit from the efficiencies brought about by the MERS system

Connecticut has a typical mortgage recording framework. Lenders pay the clerk in the locality in which the real property is located for the right to record the mortgage and secure their lien. Traditionally, if that mortgage was sold, a new record would have to be made and additional fees paid.

Starting in the 1990s, MERSCORP changed that model. When a MERS member makes a mortgage loan MERS is recorded as the mortgage holder. When a MERS mortgage or its servicing rights are sold to another MERS member the transfer is electronically recorded in a MERSCORP data base but MERS remains the mortgage holder.

[NEW YORK STATE OF MIND]

Oregon Live-

Eleven Oregon counties are suing a mortgage-industry company that registers loan sales, circumventing public property records.

The counties — Clackamas, Coos, Crook, Jackson, Josephine, Klamath, Lane, Linn, Marion, Washington and Yamhill — announced Thursday they have filed a $50 million lawsuit over unpaid recording fees since the lending industry created Mortgage Electronic Registration Systems, or MERS, in the 1990s.

The counties are following the lead of Multnomah County. They’re represented by the same Lake Oswego attorney, Tom D’Amore.

“MERS was taking advantage of our public records system but not paying the fees,” D’Amore said.

[OREGON LIVE]

Money CNN-

Wells Fargo is catching even more heat for alleged bad behavior, this time from the powerful SEC.

The Securities and Exchange Commission’s investigation was revealed by Wells Fargo in a regulatory filing Thursday. It joins an increasingly-long list of government agencies probing Wells Fargo (WFC) for issues related to the creation of as many as 2 million fake accounts between 2011 and 2015.

The fake account mess, combined with ongoing scrutiny of Wells Fargo’s mortgage tactics, has forced the bank to ramp up its legal defense fund. Walls Fargo warned investors that in a worst-case scenario, its litigation losses could be $1.7 billion “in excess of” what it’s already set aside. That’s up from an estimate of $1 billion as of August.

[Money CNN]

• Español

source: http://www.ag.ny.gov/

Decided on November 2, 2016 SUPREME COURT OF THE STATE OF NEW YORK Appellate Division, Second Judicial Department
RANDALL T. ENG, P.J.
RUTH C. BALKIN
L. PRISCILLA HALL
BETSY BARROS, JJ.

2014-11670
2014-11671
(Index No. 14076/09)

Charles H. Wallshein, Melville, NY (Charles W. Marino of counsel), for appellant.

RAS Boriskin, LLC, Westbury, NY (Jason W. Creech of counsel; Knuckles, Komosinski & Elliott, LLP, Elmsford, NY [Jordan J. Manfro of counsel], former counsel on the brief), for respondent.

DECISION & ORDER

In an action to foreclose a mortgage, the defendant Steven Baritz appeals (1) from a decision of the Supreme Court, Suffolk County (Rebolini, J.), dated August 12, 2014, and (2), as limited by his brief, from so much of an order of the same court, also dated August 12, 2014, as, upon the decision, granted those branches of the plaintiff’s motion which were for summary judgment on the complaint insofar as asserted against him and for an order of reference, and, in effect, denied that branch of his cross motion which was for leave to amend his answer to assert certain counterclaims.

ORDERED that the appeal from the decision is dismissed, as no appeal lies from a decision (see Schicchi v J.A. Green Constr. Corp., 100 AD2d 509); and it is further,

ORDERED that the order is modified, on the law, by deleting the provisions thereof granting those branches of the plaintiff’s motion which were for summary judgment on the complaint insofar as asserted against the defendant Steven Baritz and for an order of reference, and substituting therefor provisions denying those branches of the motion; as so modified, the order is affirmed insofar as appealed from; and it is further,

ORDERED that one bill of costs is awarded to the defendant Steven Baritz.

On May 27, 2005, the defendant Steven Baritz executed a note in the amount of $960,000 in favor of GreenPoint Mortgage Funding, Inc. (hereinafter GreenPoint). On the same date, to secure repayment of the note, Baritz executed a mortgage in favor of Mortgage Electronic Registration Systems, Inc. (hereinafter MERS), acting solely as nominee for GreenPoint, on property he owned in Lake Grove. Thereafter, the mortgage was assigned to the plaintiff. In April 2009, the plaintiff commenced this action to foreclose the mortgage, alleging that Baritz defaulted on his loan payments. Baritz answered the complaint and asserted as an affirmative defense that the plaintiff did not have standing to commence the action. The plaintiff moved, inter alia, for summary [*2]judgment on the complaint insofar as asserted against Baritz and for an order of reference. Baritz cross moved, inter alia, for leave to amend his answer to assert certain counterclaims. The Supreme Court granted those branches of the plaintiff’s motion which were for summary judgment on the complaint insofar as asserted against Baritz and for an order of reference, and denied Baritz’s cross motion. Baritz appeals.

Generally, in moving for summary judgment in an action to foreclose a mortgage, a plaintiff establishes its prima facie case by producing the mortgage and the unpaid note, and evidence of the default (see Wells Fargo Bank, N.A. v Morgan, 139 AD3d 1046, 1048; Flagstar Bank, FSB v Mendoza, 139 AD3d 898, 899; LaSalle Bank, N.A. v Zaks, 138 AD3d 788). Where, as here, the plaintiff’s standing has been placed in issue by the defendant’s answer, the plaintiff must also prove its standing as part of its prima facie showing (see Flagstar Bank, FSB v Mendoza, 139 AD3d at 899; LaSalle Bank, N.A. v Zaks, 138 AD3d at 788; Aurora Loan Servs., LLC v Mercius, 138 AD3d 650, 651). In a foreclosure action, a plaintiff has standing if it is the holder or assignee of the underlying note at the time the action is commenced (see Aurora Loan Servs., LLC v Taylor, 25 NY3d 355, 361-362; One W. Bank, FSB v Albanese, 139 AD3d 831, 832; Aurora Loan Servs., LLC v Mercius, 138 AD3d at 651). A plaintiff may demonstrate that it is the holder or assignee of the underlying note by showing either a written assignment or physical delivery of the note (see Aurora Loan Servs., LLC v Mercius, 138 AD3d at 651).

Here, the plaintiff failed to meet its prima facie burden to establish its standing. In support of its motion, the plaintiff relied on the affidavit of Jaclyn Holloway, an assistant secretary of Nationstar Mortgage, LLC (hereinafter Nationstar). Holloway alleged that, after the action was commenced, the plaintiff delivered the note to NationStar. She alleged that, “pursuant to the business records of [the plaintiff],” the plaintiff had physical possession of the note when it commenced the action. However, the plaintiff failed to demonstrate the admissibility of the records relied upon by Holloway under the business records exception to the hearsay rule (see CPLR 4518[a]) since Holloway did not attest that she was personally familiar with the record-keeping practices and procedures of the plaintiff (see U.S. Bank N.A. v Handler, 140 AD3d 948, 949; Aurora Loan Servs., LLC v Mercius, 138 AD3d at 652; Citibank, N.A. v Cabrera, 130 AD3d 861). Consequently, Holloway’s allegations based on those records were inadmissible (see Aurora Loan Servs., LLC v Mercius, 138 AD3d at 652; US Bank N.A. v Madero, 125 AD3d 757, 758), and, therefore, insufficient to meet the plaintiff’s prima facie burden to establish its standing (see Zuckerman v City of New York, 49 NY2d 557, 562; U.S. Bank N.A. v Handler, 140 AD3d at 949; Aurora Loan Servs., LLC v Mercius, 138 AD3d at 652; Citibank, N.A. v Cabrera, 130 AD3d at 861; US Bank N.A. v Madero, 125 AD3d at 758).

The plaintiff could not rely on the affidavit of its vice president to meet its prima facie burden since the affidavit was improperly submitted for the first time in its reply papers (see HSBC Bank USA, N.A. v Roumiantseva, 130 AD3d 983, 985; Arriola v City of New York, 128 AD3d 747, 749; Poole v MCPJF, 127 AD3d 949, 949-950; DiLapi v Saw Mill Riv., LLC, 122 AD3d 896, 900). Additionally, although the plaintiff submitted evidence that MERS, as nominee for GreenPoint, assigned the mortgage and note to the plaintiff before the action was commenced, the plaintiff failed to establish delivery or assignment of the note to MERS prior to its execution of the assignment (see Aurora Loan Servs., LLC v Mercius, 138 AD3d at 652; HSBC Bank USA, N.A. v Roumiantseva, 130 AD3d at 984; Midland Mtge. Co. v Imtiaz, 110 AD3d 773, 775; Deutsche Bank Natl. Trust Co. v Haller, 100 AD3d 680, 683). Since the plaintiff failed to meet its prima facie burden, the Supreme Court should have denied those branches of its motion which were for summary judgment on the complaint insofar as asserted against Baritz and for an order of reference, without regard to the sufficiency of Baritz’s opposition papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853).

The Supreme Court providently exercised its discretion in denying that branch of Baritz’s cross motion which was for leave to amend his answer to assert certain counterclaims, as the proposed amendments were either patently devoid of merit or their belated addition would have prejudiced the plaintiff, and Baritz failed to offer a reasonable excuse for his nearly five-year delay in seeking to add them (see Yong Soon Oh v Hua Jin, 124 AD3d 639, 640; Brooks v Robinson, 56 [*3]AD3d 406, 407).

Baritz’s remaining contention need not be reached in light of our determination.

ENG, P.J., BALKIN, HALL and BARROS, JJ., concur.

ENTER:

Aprilanne Agostino

Clerk of the Court

COMING TO YOU LIVE DIRECTLY FROM THE DUBIN LAW OFFICES AT HARBOR COURT, DOWNTOWN HONOLULU, HAWAII

LISTEN TO KHVH-AM (830 ON THE AM RADIO DIAL)

ALSO AVAILABLE ON KHVH-AM ON THE iHEART APP ON THE INTERNET

.

.

Sunday – October 6, 2016

Rebroadcast by popular demand of our December 21, 2014 Show entitled “Exclusive Tell-All Interview With Retired Big Five Bank Executive”
.
——————–

Our guest “Larry” shocked the foreclosure defense community almost two years ago with his reverse whistle-blower logic bragging why and how most American courts would continue to do little to protect American homeowners.

And indeed he accurately predicted among other of his insights the ineffectiveness of both the California Glaski and ultimately the Ivanova decisions.

Well worth listening to again.

Those who miss this important live broadcast can listen to it on the Past Broadcast Section of our Website at www.foreclosurehour.com shortly after it airs live on KHVH-AM News Radio in Honolulu and simultaneously throughout the United States on the iHeart Internet App.

EVERY SUNDAY 3:00 PM HAWAII 6:00 PM PACIFIC 9:00 PM EASTERN ON KHVH-AM (830 ON THE DIAL) AND ON iHEART RADIO

IJR-

When Elizabeth and David Ball fell onto financially hard times after David lost his job in 2014, they decided to undergo a home loan modification.

Upon starting the process with CitiMortgage, Elizabeth clearly remembers asking how to proceed with the payments on their home.

[IJR]

Florida Politics-

When a mortgage foreclosure action gets dismissed by a Florida court, it resets the clock on the state’s five-year statute of limitations, the Supreme Court decided Thursday.

That means the lender can try again to get paid, as long as it’s within the next five-year period and the borrower had started paying again and then stopped.

“I think this decision will cause a new wave of foreclosure cases to be filed in the next 12-24 months,” said Jonathan Kline, a Westin attorney who practices primarily in foreclosure defense. “Basically, banks are getting a do-over.”

[FLORIDA POLITICS]

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

VIEN-PHUONG THI HO,
Plaintiff-Appellant,

v.

RECONTRUST COMPANY, NA,
subsidiaries of Bank of
America, N.A.;
COUNTRYWIDE HOME LOANS
INC; BANK OF AMERICA, N.A.,
Defendants-Appellees.

SUMMARY**

Fair Debt Collection Practices Act
Affirming in part and vacating in part the district court’s
dismissal of an action for failure to state a claim, the panel
held that the trustee of a California deed of trust securing a
real estate loan was not a “debt collector” under the Fair Debt
Collection Practices Act.

Seeking damages under the FDCPA, the plaintiff alleged
that the trustee of the deed of trust on her property sent her a
notice of default and a notice of sale that misrepresented the
amount of debt she owed. The plaintiff also sought to rescind
her mortgage transaction under the Truth in Lending Act.

Disagreeing with the Fourth and Sixth Circuits, and
agreeing with the California Courts of Appeal, the panel held
that the trustee was not a “debt collector” subject to damages
under the FDCPA because the trustee was not attempting to
collect money from the plaintiff. The panel held that the
object of a non-judicial foreclosure in California is to retake
and resell the security on the loan. Thus, actions taken to
facilitate a non-judicial foreclosure, such as sending the
notice of default and notice of sale, are not attempts to collect
“debt” as that term is defined by the FDCPA. The panel
wrote that following a trustee’s sale, the trustee collects
money from the home’s purchaser, not the original borrower.
Because the money collected from a trustee’s sale is not
money owed by a consumer, it is not “debt.” Accordingly,
the foreclosure notices were an enforcement of a security
interest, rather than general debt collection under 15 U.S.C.
§ 1692a(6). Citing Sheriff v. Gillie, 136 S. Ct. 1594 (2016),
the panel declined to create a conflict with state foreclosure
law in its interpretation of the ambiguous term “debt
collector.” Accordingly, the panel affirmed the dismissal of
the FDCPA claim.

The panel held that even though the district court twice
dismissed the plaintiff’s TILA rescission claim and she did
not replead it in her third complaint, it was preserved for
appeal because the district court instructed her that she would
be required to allege the ability to repay the loan in order to
state a rescission claim. The panel held that under Merritt v.
Countrywide Fin. Corp., 759 F.3d 1023 (9th Cir. 2014),
decided after the district court’s dismissal, a mortgagor need
not allege the ability to repay in order to state a rescission
claim. Accordingly, the panel vacated the dismissal of the
TILA claim and remanded for consideration of the claim in
light of Merritt.

LINK TO OPINION BELOW:

…there are exemptions that protect lenders from liability for environmental conditions so long as certain requirements are met.

JDSupra-

Readers may recall an earlier blog post regarding a bank’s potential liability for damage to private property caused by a tree falling onto a neighbor’s property.  In addition to property damage from obvious unsafe conditions, banks should also consider the potential liability associated with potential, unseen environmental conditions on property it has foreclosed upon.  Under Connecticut and federal law, landowners are typically responsible for the remediation of environmental contamination that exists on their property, regardless of who caused the contamination in the first instance.  However, there are exemptions that protect lenders from liability for environmental conditions so long as certain requirements are met.

First, the entity that acquires the property via foreclosure must be a lender.  Although “lender” is broadly defined, there are some entities, affiliated with banks, which may not be considered a “lender” who is exempt from liability.  “Lender” specifically includes insured depository institutions, insured credit unions, banks or associations chartered under the Farm Credit Act, and a leasing or trust company affiliated with an insured depository institution as well as “any person (including a successor or assignee of any such person) that makes a bona fide extension of credit to or takes or acquires a security interest from a nonaffiliated person.”

[JDSUPRA]

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

The Salt Lake Tribune-

Texas laws and not those of Utah govern home foreclosures in this state by Bank of America, a panel of the 10th Circuit Court of Appeals ruled on Wednesday.

The decision means that thousands of Utah homeowners who were foreclosed on by Bank of America will not be able to recover monetary damages based on the claim that those actions were illegal under Utah law.

In a separate opinion, Judge Carlos Lucero warned that the decision is a serious blow to state sovereignty and that regulations from the Office of the Comptroller of the Currency on which the court’s decision was based “creates a race to the bottom in which national banks can chose to be governed by the state with the most bank-friendly rules.”

[THE SALT LAKE TRIBUNE]

KTLA–

WSJ-

Five of the country’s biggest banks detailed tweaks to their business models in hopes of persuading regulators they could absorb significant financial distress without requiring taxpayer funds to stay afloat.

The stakes are high for J.P. Morgan Chase & Co., Bank of America Corp., and three others. If regulators deem these revisions of their so-called living wills—made public by the government Tuesday—to be insufficiently credible, those institutions could be ordered to hold higher levels of capital on their books, or to restructure and shed business lines.

Regulators are facing considerable pressure from politicians to use this process to break up the biggest banks, with many—notably Massachusetts Democratic Sen. Elizabeth Warren—arguing these institutions remain “too big to fail.”

[WALL STREET JOURNAL]

Bloomberg BNA-

The U.S. Supreme Court let stand a Connecticut Supreme Court ruling requiring Mortgage Electronic Registration Systems Inc. (MERS) to pay higher recording fees in that state, opening the door for similar action by other states ( MERSCORP Holdings v. Malloy, U.S., No. 15-cv-01538, cert. den. 10/31/16 ).

In February, the Connecticut court upheld amendments to state law that require MERS — a private company that manages a major mortgage registration database — to pay recording fees that are roughly three times higher than other mortgagees.

In June, MERS asked the U.S. Supreme Court to hear its appeal, backed by banking and mortgage groups that said other jurisdictions might enact similar laws if the Connecticut decision was allowed to stand.

[BLOOMBERG BNA]

USA TODAY-

Wells Fargo (WFC) Friday agreed to pay a $50 million settlement arising out of allegations the bank bilked roughly 250,000 homeowners by padding appraisal fees.

The settlement, which still awaits approval by an Oakland, Calif. court, is centered around alleged appraisal markups the banks charged to homeowners who defaulted on mortgage loans. Homeowners who default are traditionally charged fees for appraisals. But the private lawsuit filed in 2012 suggested Wells Fargo overcharged these homeowners, assessing total fees of $95 to $125, according to the lawsuit. The actual cost for the appraisals is often $30 or less according to National Association of BPO Professionals, which is cited in the lawsuit. The fees were difficult to detect since they were shown as “other charges,” the lawsuit says.

This settlement piles on top of other legal issues Wells Fargo is facing following this year’s scandal where thousands of bank employees allegedly opened accounts unknown to customers in order to reach sales goals.

[USA TODAY]