TIC-TOC…

SFGATE-

Chain of title – proof of who really owns a house – underpins the entire U.S. system of real estate.

Broken chain of title due to slipshod paperwork was a serious issue uncovered in the nationwide robosigning scandal and again last month in a city report that found San Francisco foreclosure paperwork riddled with errors.

Those revelations draw new attention to title companies, which insure a home’s clear title for both buyers and lenders.

“If there is not a clear chain of title in the foreclosure process, how can there be a clear chain of title for the person buying foreclosed property?” said San Francisco Assessor-Recorder Phil Ting, who commissioned the audit. “Given our report, it calls into question whether entities selling a foreclosure really have the right to transfer that property to somebody else.”

Read more: [SFGATE]

Decided on February 28, 2012

18600/09

Plaintiff was represented by Alissa L. Wilson, Esq., Shapiro, DiCaro & Barak, LLC, 250 Mile Crossing Blvd., Rochester, NY 14624. Defendant was represented by Yolande I. Nicholson, PC, 26 Court St., Brooklyn, NY 11242.

Herbert Kramer, J.

The following papers have been read on this motion:

Notice of Motion/Order to Show Cause/Papers Numbered

Petition/Cross Motion and

Affidavits (Affirmations) Annexed _____________________________

Opposing Affidavits (Affirmations) _______ ______________________

Reply Affidavits (Affirmations)______________________________

_______________(Affirmation)______________________________

Other Papers______________________________

Good faith is absent when two versions of the assignment of the note are presented to the Court. Parties are required to come into the court with clean hands despite having instituted the action prior to the effective date of CPLR §3408.^[FN1] [*2]

This matter was referred to this Court for a bad faith hearing under the appropriate statutory scheme. See CPLR §3408.

The instant matter illustrated the wild west mentality that was so prevalent in the early part of this past decade, which allowed for practically anyone breathing to obtain a mortgage by signing their name.^[FN2] It appears that the process of securitization of mortgages led to major improprieties, this case being a prime example.

However, all of that pales in significance to what follows. During the bad faith hearing, two separate notes with attendant assignments were put into evidence by the plaintiff.

The first was in Exhibit “C.” of plaintiff’s “1.” which is the summons and complaint filed on July 23, 2009.The note itself was endorsed by Marie Sene, only. In addition, there is an allonge, dated July 15, 2009, with the “effective date” of April 30, 2007, signed by Kevin M. Jackson.^[FN3]

The allonge is assigned to “HSBC Bank USA, N.A. as Trustee on behalf of Ace Securities Corp. Home Equity Loan Trust and for the Registered Holders of Ace Securities Corp., Home Equity Loan Trust, Series 2007-HE4, asset backed Pass-Through Certificates, without recourse, representation or warranty express or implied…”

The second note was introduced as Exhibit “E.” of plaintiff’s “1.” labeled as the note and assignment. That note included an endorsement from Marjorie Jorgensen, the Collateral Control Manager or ResMae Mortgage Corporation in addition to Ms. Sene’s signature. There was also a purported allonge which was not permitted into evidence. However, the existence of an allonge does not explain the apparent disparity between the two assignments. Both cannot be accurate.^[FN4]

This Court emphatically now joins the judicial chorus who have been wary of the paperwork supplied by plaintiffs and their representatives. There is ample reason for Chief Judge’s requirement for an attorney affirmation in residential foreclosure cases. As stated by [*3]Chief Judge Jonathan Lippman,”we cannot allow the courts in New York State to stand idly and be party to what we now know is a deeply flawed process, especially when that process involves basic human needs-such as a family home-during this period of economic crisis.”^[FN5]

Furthermore, the form affidavit which is now required by Administrative Order 548/10 states that “numerous and widespread insufficiencies in foreclosure filings in various courts around the nation were reported by major mortgage lenders and other authorities…”. See also, HSBC Bank v. Taher, 932 N.Y.S2d 760 [2011].^[FN6]

It is clear in this case, without further hearings, that a fraud has been committed upon this Court. Thus, the only remedy that can be utilized by this Court is to stay these proceedings and any mortgage foreclosure until this matter is cleared up to the satisfaction of this Court.

Further, in connection with this matter, the litigants were directed to submit memorandums of law on issues that arose during the hearing. Plaintiff submitted an affirmation with exhibits. Therein plaintiff attempts to establish Ocwen’s authority to sign as “attorney in fact” for ResMae corporation.

Allegedly, Ocwen’s authority arises from a limited power of attorney attached as exhibit “H.” to Plaintiff’s “1.” The power of attorney between ResMae Mortgage Corporation (the Servicer) and Ocwen, grants the “express power and authority to, for any mortgage loan transferred by the Servicer to Ocwen under that certain Pooling and Servicing Agreement between the Servicer and Deutsche Bank National Trust Company dated March 1, 2006.”

Oddly, the pooling and servicing agreement submitted as plaintiff’s Exhibit “2.” allegedly evidencing Ocwen’s power of attorney is dated April 1, 2007 and is between Ace Securities Corp., Ocwen Loan Servicing, LLC, GMAC Mortgage, LLC, Wells Fargo Bank, National Association, HSBC Bank USA, NA. These submissions fail to establish that Ocwen was granted authority as ResMae’s attorney-in-fact. Regardless, the defect in the assignments remain.

This Court is further reporting the matter to the District Attorney, Kings County, the Attorney General of the State of New York and the U.S. Attorney for the Eastern District of New York. Copies of the two notes are annexed hereto and made a part hereof.

This constitutes the decision and order of the Court.

J.S.C.

Footnote 1:The plaintiff asserts that the language of “good faith” contained in CPLR § 3408 does not apply as this action was commenced prior to the February 13, 2010 amendment. Plaintiff does not argue that the remainder of CPLR 3408 is applicable, which directs settlement conferences in residential foreclosure matters. This Court disagrees with plaintiff that its obligation to act in good faith throughout the litigation is dependent upon a statutory mandate. Honeywell International v. National Avionics Sys. Corp., 343 F.Supp.2d 272 [2004]. “A mortgagee who is invoking the aid of foreclosure action, may be required, as condition precedent to relief, to do equity.” Farmers’ & Mechanics’Sav. Bank of City of Lockport v. Eagle Bldg. Co. et al., 271 N.Y.S. 306 [1934]. This Court has purposefully cited a decision from 1934 due to the discussion found therein as to the devastating economic conditions at that time, and unfortunately finds many parallels to the current economic climate.

Footnote 2: This court was prepared to update its decision regarding reverse redlining and whether the rebuttable presumption followed with the assignment of the note and mortgage. See, M & T Mortgage v. Foy, 858 NYS2d 567 [2008]. In this Court’s view, it is unnecessary to delve into the other legal arguments when faced with the conflicting assignments.

Footnote 3:As manager for Resmae Mortgage Corporation by its attorney-in-fact Ocwen Loan Servicing, LLC

Footnote 4:It should also be noted that ResMae filed for bankruptcy protection in 2007.

Footnote 5:In regards to the issuance of Administrative Order 548/10

Footnote 6:The decision outlines the numerous and widespread irregularities specific to HSBC Bank USA, NA, the plaintiff in this case. A, NA, the plaintiff in this case.

[ipaper docId=83435780 access_key=key-29jb7yoyxz38dwntiqma height=600 width=600 /]

Written by: Oliver Max Gardner III–

The term “Mortgage Note” or “Note” refers to the promise to pay signed by the homeowner or obligor.

The term “Mortgage” refers to the real estate security instrument (mortgage or deed of trust) that must be filed with the local land registry to perfect the rights of the holder of the note and that is subject to the Statute of Frauds.

Note that Standard Fannie and Freddie Uniform Instruments cross-reference the note and the mortgage and provide that a breach of covenants in either document provides right to accelerate balance due and declare a default.

State law determines how mortgages travel—always travel by assignment due to statute of frauds.  An assignment is a conveyance of a security interest in real property.

State law governs the necessity to record assignments.  Some state laws have been amended to accommodate MERS, but not that many.

Failure to record an assignment is a matter of priority and perfection if a bankruptcy is filed…

[AVVO]

Credit Slips-

The first attack is on the credentials and former activities of the auditors. Given the deeply compromised background of the OCC foreclosure review auditors, this is a chutzpadik attack. The sad truth is that there isn’t a huge pool of people who can do this sort of audit. (Yes, takes it takes a thief and all that…) 

[CREDIT SLIPS]

This is an explosive video and the AG’s better listen carefully because titles are in serious jeopardy. Forget the settlement… HOW do they prepare to correct the DEFECTS in YOUR TITLE?

Watch the video and listen to how the “New Lender” is stealing assigning Your Home to themselves… I hope AG Kamala Harris follows up and why haven’t the AG’s conducted these investigations? Truly sad.

58% of conflicts with MERS.

by SFAssessoron Feb 15, 2012

H/T B. Behrens

The Supreme Court of Ohio

Federal Home Loan Mortgage Corp

v.

Duane Schwartzwald et al.

The Supreme Court of Ohio will hold an oral argument on the merits in this case on Wednesday, April 04, 2012. Time allowed for oral argument will be 15 minutes per
side.

[ipaper docId=82147561 access_key=key-oaw4nbp66kdwp9azyrt height=600 width=600 /]

Washington, D.C. – Democratic Leader Nancy Pelosi and Congresswoman Jackie Speier sent a letter today to Attorney General Eric Holder requesting he direct the Justice Department’s Financial Fraud Enforcement Task Force to examine whether any violations of Federal law occurred in the processing of foreclosures in San Francisco. 

The County of San Francisco’s Office of the Assessor-Recorder recently commissioned a report assessing compliance with applicable foreclosure laws by certain entities in the mortgage industry operating in San Francisco.

Below is the full text of the letter. 

February 17, 2012

The Honorable Eric H. Holder, Jr.
Attorney General
Robert F. Kennedy Department of Justice Building
950 Pennsylvania Ave., NW
Washington, DC 20530

Dear Attorney General Holder:

We are writing to request that you direct the Justice Department’s Financial Fraud Enforcement Task Force to examine whether any violations of Federal law occurred in the processing of foreclosures in San Francisco.

The County of San Francisco’s Office of the Assessor-Recorder recently commissioned a report, which is enclosed, assessing compliance with applicable foreclosure laws by certain entities in the mortgage industry operating in San Francisco. The report, based on a review of a random sample of mortgage loans that entered into foreclosure between January 2009 and October 2011, found that 99 percent of the San Francisco mortgages reviewed showed irregularities in the foreclosure process, and 84 percent showed potential violations of California non-judicial foreclosure laws.  In addition, foreclosures involving mortgages that were part of the Mortgage Electronic Registration System (MERS), which are more likely to have been securitized, showed a high rate of conflicting information regarding the actual beneficiary, which raises questions about whether homeowners were denied their due process rights.  We find these findings very troubling. 

Because the report does not specify the mortgage servicers involved, it is not possible to determine whether affected borrowers can seek remedies under provisions in the multi-state mortgage settlement. However, even if some borrowers can seek redress through the settlement process, or through private rights of action, the irregularities and violations cited in the report convince us that further investigation at the Federal level is warranted to determine whether any violations of Federal civil and criminal laws might have occurred.

The Assessor-Recorder has already referred the report’s findings to California Attorney General, Kamala Harris, for her review.  We believe the severity of the report’s conclusions also warrant a thorough review at the Federal level by the Task Force. 

We appreciate the hard work of the Obama Administration and the state Attorneys General, including the helpful protections for borrowers secured by California Attorney General Kamala Harris, in achieving a multi-state mortgage settlement. We are hopeful that preserving the ability of the states and the Federal government to continue to pursue actions not covered by the terms of the settlement will ensure that homeowners who experienced losses unfairly, particularly where abusive practices were the cause, will be able to seek a remedy.

Thank you for your attention to this matter.

best regards,

Nancy Pelosi
Democratic Leader

Jackie Speier
Member of Congress

Cc:           The Honorable Kamala Harris, Attorney General, State of California
                The Honorable Edwin M. Lee, Mayor, San Francisco, California
                The Honorable Phil Ting, Assessor-Recorder, City & County of San Francisco

The robosigning itself and similar lack of internal controls are the small potatoes. There are much more serious things in the SF City Assessor report.

Credit Slips-

* Report found 84 pct of San Francisco disclosures illegal

* High levels found across the country, experts say

REUTERS-

A report this week showing rampant foreclosure abuse in San Francisco reflects similar levels of lender fraud and faulty documentation across the United States, say experts and officials who have done studies in other parts of the country.

The audit of almost 400 foreclosures in San Francisco found that 84 percent of them appeared to be illegal, according to the study released by the California city on Wednesday.

“The audit in San Francisco is the most detailed and comprehensive that has been done – but it’s likely those numbers are comparable nationally,” Diane Thompson, an attorney at the National Consumer Law Center, told Reuters.

Across the country from California, Jeff Thingpen, register of deeds in Guildford County, North Carolina, examined 6,100 mortgage documents last year, from loan notes to foreclosure paperwork.

[REUTERS]

1. Introduction

The City and County of San Francisco’s Office of the Assessor-Recorder retained Aequitas Compliance Solutions, Inc. to review 382 residential mortgage loan transactions (the “subject loans”) that resulted in foreclosure sales that occurred from January 2009 through October 2011.1 Over this period, there were 2,405 foreclosure sales. The subject loans thus represent approximately 16% of the total. (See Appendix B – Methodology.)

We analyzed the subject loans to determine the mortgage industry’s compliance with applicable laws. Specifically, we focused our analysis on important topics relating to six Subject Areas:

• Assignments
• Notice of Default
• Substitution of Trustee
• Notice of Trustee Sale
• Suspicious Activities Indicative of
Potential Fraud
• Conflicts Relating to MERS

[ipaper docId=81783176 access_key=key-23u7jv139fdxzsk3ytub height=600 width=600 /]

“Almost all involved either legal violations or suspicious documentation”

Gretchen Morgenson-

An audit by San Francisco county officials of about 400 recent foreclosures there determined that almost all involved either legal violations or suspicious documentation, according to a report released Wednesday.

Commissioned by Phil Ting, the San Francisco assessor-recorder, the report examined files of properties subject to foreclosure sales in the county from January 2009 to November 2011. About 84 percent of the files contained what appear to be clear violations of law, it said, and fully two-thirds had at least four violations or irregularities.

The report comes just days after the $26 billion settlement over foreclosure improprieties between five major banks and 49 state attorneys general, including California’s. Among other things, that settlement requires participating banks to reduce mortgage amounts outstanding on a wide array of loans and provide $1.5 billion in reparations for borrowers who were improperly removed from their homes.

[NEW YORK TIMES]

More proof FL AG Pam Bondi is not doing her job!

MADIGAN FILES SUIT OVER FAULTY MORTGAGE ASSIGNMENTS FILED WITH COUNTY RECORDERS

Attorney General Alleges Faulty Practices in Foreclosing on
Homeowners in Crisis

Chicago — Attorney General Lisa Madigan today filed a lawsuit against Nationwide Title Clearing for filing faulty documents with Illinois county recorders. Nationwide Title Cleaning Inc. (NTC) is a Florida-based company that prepares documents for mortgage servicers to use against borrowers who are in default, foreclosure or bankruptcy.

“The practices that NTC used were a key contributor to the mortgage crisis by undermining the integrity and accuracy of the mortgage servicing and foreclosure process,” Attorney General Madigan said.

NTC provides a range of mortgage loan services to eight of the top 10 lenders and mortgage servicers in the country. NTC specializes in creating, processing and recording mortgage assignments, which are often used for a lender to foreclose on a borrower.

The lawsuit, filed in Cook County Circuit Court, alleges numerous violations of the Illinois Consumer Fraud and Deceptive Practices Act and the Uniform Deceptive Trade Practices Act. Madigan is asking the court to require NTC to review and correct all documents it unlawfully created and recorded in Illinois, and pay back all revenues, profits and gains achieved in whole or in part due to unlawful practices. The suit also asks the court to impose civil penalties against the company.

[illinoisattorneygeneral.gov]

 United States Court of Appeals, Tenth Circuit.

 No. 11-1232.

 February 1, 2012.

EXCERPT:

3. The BAP Appeal

The Millers appealed the bankruptcy court’s order granting relief from stay to the BAP. The BAP began its decision by noting that “[t]he details surrounding the assignment to Deutsche Bank are not part of the record on appeal.” Aplee. Supp. App. at 6 n.8. In particular, the record submitted to the BAP did not even contain a copy of the Note, much less the original.

In its decision, the BAP spent little time discussing the adequacy of proof that Deutsche Bank was in possession of the original Note, and the legal consequences thereof. Instead, the BAP relied on the Rooker-Feldman doctrine. See Rooker v. Fid. Trust Co., 263 U.S. 413 (1923); D.C. Court of Appeals v. Feldman, 460 U.S. 462 (1983). Though noting that the bankruptcy court had not expressly mentioned this doctrine, it concluded that the court had relied on the state court’s decision on the standing issue. The BAP further concluded that in light of this doctrine, which generally prohibits federal courts from entertaining suits by parties who have lost in state court and who seek review of state court decisions in federal court, “the bankruptcy court properly declined to revisit the state court’s decision that Deutsche Bank was an `interested person’ entitled to a Rule 120 order of sale.” Aplee. Supp. App. at 16. Armed with the state-court decision finding Deutsche Bank had standing to proceed with the foreclosure, the BAP reached a further conclusion that Deutsche Bank had standing to seek relief from stay.

[…]

We conclude that neither the Rooker-Feldman doctrine nor issue preclusion applies to prevent a federal court from determining whether Deutsche Bank is a “party in interest” entitled to seek relief from stay. Because the BAP incorrectly relied on Rooker-Feldman and because neither the bankruptcy court nor the BAP conducted a proper statutory standing analysis under § 362(d), we could simply stop our analysis here and remand for a further consideration of the standing issue. The parties, however, have presented arguments on the merits concerning standing, and the sufficiency of Deutsche Bank’s showing concerning standing in this case is a legal issue that can be resolved on appeal. We will therefore now proceed to discuss why Deutsche Bank has failed to demonstrate its standing as a “party in interest.”

4. Deutsche Bank’s Status as “Party in Interest”

We return to the key question: is Deutsche Bank a “creditor” of the Millers with standing to seek relief from stay? To answer this question, we turn to the Bankruptcy Code. According to the Bankruptcy Code, a “creditor” includes an “entity that has a claim against the debtor.” 11 U.S.C. § 101(10)(a). A “claim” is a “right to payment.” Id. § 101(5)(A).

Does Deutsche Bank have a “right to payment” from the Millers? In examining this question, we begin with the principle that “[w]ithin the context of a bankruptcy proceeding, state law governs the determination of property rights.” In re Mims, 438 B.R. 52, 56 (Bankr. S.D.N.Y. 2010). We must therefore turn to Colorado law, in particular that state’s version of the Uniform Commercial Code (U.C.C. or Code).

We ask first how Colorado law would classify the Note signed by the Millers. Under Colorado law, a promise or order such as the Note is payable “to order” “if it is payable (i) to the order of an identified person or (ii) to an identified person or order.” Colo. Rev. Stat. § 4-3-109(b). The Note at issue here is payable “to the order of Lender. Lender is IndyMac Bank, F.S.B., a federally chartered savings bank[.]” Aplt. App., Vol. I at 14. Thus, the Note is payable to the “order” of IndyMac Bank under § 4-3-109(b).

But “[a]n instrument payable to an identified person [such as IndyMac Bank] may become payable to bearer if it is indorsed in blank pursuant to section 4-3-205(b).” Colo. Rev. Stat. § 4-3-109(c).⁷ Section 4-3-205(b) provides that “[i]f an indorsement is made by the holder of an instrument and it is not a special indorsement, it is a `blank indorsement.’ When indorsed in blank, an instrument becomes payable to bearer and may be negotiated by transfer of possession alone until specifically indorsed.” (emphasis added).

Deutsche Bank presented evidence that IndyMac had indorsed the Note in blank. Is proof of this indorsement sufficient under the U.C.C. requirements to establish Deutsche Bank as the successor holder of the note? As we shall see, it is not, because Deutsche Bank must also prove it has possession of the Note.

The U.C.C. identifies the requirements for “negotiation” of a note, that is, for “transfer of possession . . . to a person who thereby becomes its holder.” Id. § 4-3-201(a). This statute provides that “if an instrument is payable to an identified person, negotiation requires transfer of possession of the instrument and its indorsement by the holder.” Id. § 4-3-201(b) (emphasis added). The Official Commentary to section 4-3-201 explains that negotiation “always requires a change in possession of the instrument because nobody can be a holder without possessing the instrument, either directly or through an agent.” (emphasis added). See also Colo. Rev. Stat. § 4-1-201(b)(20)(A) (defining “holder” of negotiable instrument as “person in possession” of it).

“Possession is an element designed to prevent two or more claimants from qualifying as holders who could take free of the other party’s claim of ownership.” Georg v. Metro Fixtures Contractors, Inc., 178 P.3d 1209, 1213 (Colo. 2008) (citation omitted).⁸ “With rare exceptions, those claiming to be holders have physical ownership of the instrument in question.” Id. (citation omitted).⁹ In the case of bearer paper such as the Note, physical possession is essential because it constitutes proof of ownership and a consequent right to payment.¹⁰

While Deutsche Bank has offered proof that IndyMac assigned the Note in blank, it elicited no proof that Deutsche Bank in fact obtained physical possession of the original Note from IndyMac, either voluntarily or otherwise.¹¹ Under the U.C.C. requirements, Deutsche Bank has therefore failed to show that it is the current holder of the Note.

Colorado law does not limit enforcement of an obligation to a holder who received the instrument through negotiation. A note may also be enforced by a transferee. See Colo. Rev. Stat. § 4-3-203. “Transfer of an instrument, whether or not the transfer is a negotiation, vests in the transferee any right of the transferor to enforce the instrument.” Id. § 4-3-203(b). But transfer requires delivery: “An instrument is transferred when it 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.” Id. § 4-3-203(a) (emphasis added). “Delivery” with respect to an instrument “means voluntary transfer of possession” of the instrument. Id. § 4-1-201(14). Because Deutsche Bank has failed to prove transfer of possession of the original Note it has failed to establish its status as a transferee.

Deutsche Bank also argues that it has standing because under Colorado law it can initiate a public trustee foreclosure without producing the original Note. It cites Colo. Rev. Stat. § 38-38-101(1), which provides that the “holder of an evidence of debt” may initiate a foreclosure. An “evidence of debt” includes a promissory note such as the Note at issue here. Colo. Rev. Stat. § 38-38-100.3(8). Under certain circumstances, the “holder of an evidence of debt” can file a public trustee foreclosure without supplying the original note. See id. § 38-38-101(b)(I)-(III).

But this argument depends, first, on Deutsche Bank’s ability to show that it is a “holder of an evidence of debt.” Article 38 defines a “holder of an evidence of debt” as a person “in actual possession of” or “entitled to enforce an evidence of debt.” Colo. Rev. Stat. § 38-38-100.3(10) (emphasis added). Section 38-38-100.3(10) lists a number of presumptive holders of a debt presumed to be the “holder of an evidence of debt.” Each of these requires possession of the evidence of debt, which Deutsche Bank has thus far failed to demonstrate. See id. § 38-38-100.3(10)(a)-(d).

Deutsche Bank appears to argue that notwithstanding its failure to prove it has actual possession of the Note, it qualifies as a “person entitled to enforce an evidence of debt” under § 38-38-100.3(10) and thus is a “holder of an evidence of debt” because (1) it holds a copy of the Note indorsed in blank and (2) it can initiate a foreclosure without presenting the original Note to the public trustee. Deutsche Bank contends that it is a “qualified holder,” see id. § 38-38-100.3(21), that would be permitted under Colorado law to foreclose without presenting the original note, see id. § 38-38-101(B)(II). But foreclosure under this provision requires either the bank or its attorney to execute a statement “citing the paragraph of section 38-38-100.3(20) under which the holder claims to be a qualified holder and certifying or stating that the copy of the evidence of debt is true and correct” and that the bank agrees to “indemnify and defend any person liable for repayment of any portion of the original evidence of debt in the event that the original evidence of debt is presented for payment to the extent of any amount, other than the amount of a deficiency remaining under the evidence of debt after deducting the amount bid at sale, and any person who sustains a loss due to any title defect that results from reliance upon a sale at which the original evidence of debt was not presented.” Id. §§ 38-38-101(b)(II), 38-38-101(2)(a). There is no evidence that Deutsche Bank or its attorneys have executed such a certification or intend to do so. We therefore reject Deutsche Bank’s claim to standing founded on these statutes.

5. Conclusion

For the foregoing reasons, the evidence is insufficient as it currently stands to establish that Deutsche Bank is a “party in interest” entitled to seek relief from stay. The bankruptcy court therefore abused its discretion by granting Deutsche Bank relief from stay.

The Millers raise a number of other objections to the proceedings and orders in the bankruptcy court and the BAP but we need not reach any of them in light of the remand we now order. The judgment of the BAP is REVERSED and the case is REMANDED to the BAP with instructions to remand to the bankruptcy court for further proceedings in accordance with this opinion. The Millers’ motion for leave to file a supplemental appendix is DENIED.

[ipaper docId=80237945 access_key=key-n7zuye8tx987y499mhx height=600 width=600 /]

I posted the quoted text below back on Nov ’10… I wonder who exactly signs off for MERS, if this is so?

The standard modification agreement
is between the Borrower and
the Lender. The agreement amends
and supplements (1) the Mortgage,
Deed of Trust or Deed to Secure
Debt (Security Instrument) and (2)
the Note bearing the same date as,
and secured by, the Security
Instrument. Prior to MERS, the
standard agreement worked
because the Lender was the mortgagee
of record and could modify
the mortgage and also had the
authority to modify the Note.

However, if MERS is the mortgagee
of record, the Lender can’t
modify the mortgage without the
“mortgagee’s” consent.

MNINEWS-

The Obama Administration Friday announced it is expanding its flagship mortgage modification program and will now encourage lenders to reduce the principal loan balance for Fannie Mae and Freddie Mac loans.

The announcement comes just three days after President Obama said he would do more to support the struggling housing market and two days after Federal Reserve Chairman Ben Bernanke said housing is holding back the economic recovery.

Assistant Secretary for Financial Stability Timothy Massad in a blog post Friday outlined the changes to HAMP — including extending the end-date by one year and refocusing on principal reductions.

Massad said Treasury notified the Federal Housing Finance Agency, the regulator for Fannie Mae and Freddie Mac, that they will pay principal reduction incentives to the GSEs if they allow servicers to forgive principal — if done in conjunction with a HAMP modification.

Massad also said Treasury will triple the incentives for HAMP principal reduction modifications by paying from 18 to 63 cents on the dollar, depending on how much the loan-to-value ratio is reduced.

[MNINEWS]

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)).

NOTE: This is the 2nd Class Action this month alleging “Photo-Shopped” docs.

See the 1st: AURORA Class Action: Photoshopped Assignments and systemic 131g TILA violations

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

ERNEST MICHAEL BAKENIE, on behalf of
themselves and all others similarily situated,

Plaintiffs,

vs.

JPMORGAN CHASE, N.A.; and
DOES 1 through 10, inclusive,

Defendants

Bakenie v JPMC w[1] by DinSFLA

Decided on January 10, 2012

 Federal National Mortgage Association A/K/A FANNIE MAE, Petitioner(s)

LT-003567-11

Rosicki, Rosicki & Associates, P.C., Attorneys for Petitioner, 51 East Bethpage Road, Plainview, NY 11803, 516-741-2585; Jeffrey A. Siegel, Esq., Volunteer Lawyers Project, Attorneys for Respondent, One Helen Keller Way, Hempstead, NY 11550, 516-292-8100.

Scott Fairgrieve, J.

Petitioner Federal National Mortgage Association a/k/a Fannie Mae (hereinafter referred to as petitioner) commenced this holdover action to recover possession of 74 a/k/a 72 Laurel Avenue, Hempstead, New York from the respondents Mary Williams and Lisa Williams.

Petitioner contends in paragraph 6 of the petition, dated June 16, 2011, that it became the owner of said premises pursuant to a public sale on March 2, 2010 when a referee’s deed was duly executed to petitioner.

Respondent Mary Williams has moved pursuant to CPLR Sec. 3211(A)(1), (3) and (7), and RPAPL Sections 713(5), 721 and 741 to dismiss the petition. Respondent Mary Williams contends that petitioner lacks standing to commence this summary proceeding due to defective assignment of the note and mortgage in the underlying foreclosure.

Respondent states that Michael Eastman and Veronica Eastman executed a note and mortgage, both dated May 12, 2006, in favor of Cambridge Home Capital LLC.

Cambridge Home Capital LLC appointed Mortgage Electronic Registration Systems, Inc. (MERS) as its nominee with respect to recording of said mortgage executed by Michael Eastman and Veronica Eastman; this language is reflected in said mortgage as follows:

FOR PURPOSES OF RECORDING THIS MORTGAGE, MERS IS THE MORTGAGEE OF RECORD.

On August 13, 2007, plaintiff Countrywide Home Loans filed the summons and verified complaint in the Office of the Nassau County Clerk. The verified complaint dated August 10, 2007 alleges in paragraph 3 that:

On or about May 12, 2006, MICHAEL EASTMAN; VERONICA EASTMAN executed and delivered to MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. ACTING SOLELY AS NOMINEE FOR CAMBRIDGE HOME CAPITAL, LLC., a note bearing date that day, whereby MICHAEL EASTMAN; VERONICA EASTMAN covenanted and agreed to pay the sum of $342900.00, with interest on the unpaid balance thereof, at the rate of 7.25 percent per annum, to be computed from the date of said note, by payments of $2,071.69 on July 1, 2006 For the first 120 months and thereafter in payments of $2,710.20 on the like date of each subsequent month, until said note is fully paid, except that the final payment of principal and interest remaining due, if not sooner paid, shall become due and payable on June 1, 2036.

A review of the note executed by Mr. & Mrs. Eastman reveals no reference of the note being executed and delivered to MERS or to Countrywide Home Loans, Inc. Paragraph 4 of the verified complaint alleges:

As collateral security for the payment of said indebtedness, the aforesaid defendant(s) MICHAEL EASTMAN; VERONICA EASTMAN, also executed, acknowledged and delivered to MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. ACTING SOLELY AS NOMINEE FOR CAMBRIDGE HOME CAPITAL, LLC., a mortgage dated May 12, 2006 and recorded in the County of Nassau on June 7, 2006 in Liber/Reel D30580 of Mortgages, at page 979-995. The mortgage tax was duly paid. The aforesaid instruments were thereafter assigned to Plaintiff.

Said mortgaged premises being known as and by street address: 72 Laurel Avenue, Hempstead, NY 11550 bearing tax map designation: Dist:Section: 34Block: 377Lot(s): 146-147

which premises are more fully described in Schedule “A,” annexed hereto and made a part hereof.

Plaintiff claims in paragraph 4 of the verified complaint that the note and mortgage were assigned to plaintiff prior to commencing the foreclosure action. This statement may be unfounded. The said note executed by the Eastmans was endorsed in blank by Craig J. Hyman, Vice President/Member of Cambridge:

Pay to the Order of Without Recourse

CAMBRIDGE HOME CAPITAL LLC [*2]

/s/ Craig J. Hyman

BY: CRAIG J. HYMAN

VICE PRESIDENT/MEMBER

However, there is no evidence to demonstrate that this note was in fact assigned to Countrywide Home Loans, Inc. prior to or at the time it commenced the foreclosure action.

The said mortgage was assigned from MERS as nominee for Cambridge Home Capital, LLC to Countrywide Home Loans, Inc. on January 8, 2008, which is 5 months after Countrywide began the foreclosure action.

The said property was purchased on March 2, 2010 at the foreclosure sale by Countrywide Home Loans, Inc. for the sum of $470,090.47.

On March 2, 2010, Rosicki, Rosicki and Associates, on behalf of Countrywide Home Loans, Inc., assigned the bid for said property to Federal National Mortgage Association a/k/a Fannie Mae. Rosicki, Rosicki and Associates accepted the bid on behalf of Federal National.

Petitioner became the owner pursuant to a referee’s deed in foreclosure dated March 8, 2010 and recorded on May 18, 2010.

Petitioner points out that respondent Mary Williams was served personally on September 11, 2007 with the summons and complaint in the foreclosure action, but was sued as a “Jane Doe No.1.” Respondent Mary Williams defaulted in answering the summons and complaint.

The evidence demonstrates that Mary Williams was originally sued as a Jane Doe with no effort being made to ascertain if she resided at the said premises as a tenant. Petitioner did a search of the Nassau County Clerk records but no recorded lease was found.

Petitioner moved to amend the pleadings in February of 2008 to substitute the name Mary Williams for Jane Doe by the submission of the affirmation of Josephine Sangiorgio, Esq., dated February 1, 2008. Thereafter, the judgment of foreclosure and sale was served upon the Eastmans and Mary Williams. No explanation is provided by Countrywide as to how it discovered that Mary Williams was a tenant at the premises and why this information was not ascertained when the action for foreclosure was commenced in the Supreme Court.

Respondent Mary Williams is a Section 8 tenant who has lived at the premises since July 2006. Ms. Williams recertified in June of 2011 and is effective until July 1, 2012.

The issue for this court to decide is whether it has jurisdiction to decide any of the issues raised by respondent in connection with the foreclosure. [*3]

The court agrees that service upon Mary Williams in the foreclosure action was probably invalid. It does not appear that Plaintiff Countrywide made “timely efforts” to ascertain the identity of Mary Williams prior to commencing the foreclosure action. See Porter v. Kingsbrook OB/Gyn Assoc., 209 AD 497, 618 NYS2d 837 (2nd Dept 1994); Tucker v. Lorieo, 291 AD2d 261, 738 NYS2d 33 (1st Dept 2002); and Countrywide Home Loans v. Williams, 20 Misc 3d 1111(A), 867 NYS2d 16 (NY Dist Ct 2008).

Furthermore, it is highly questionable whether Countrywide Home Loans, Inc. had a valid assignment of the note at the time of commencement of the suit. See Bank of New York v. Silverberg, 86 AD3d 274, 926 NYS2d 532 (2nd Dept 2011) holding that a plaintiff which never was an actual assignee or holder of note at the time of commencement of the suit lacked standing to commence the foreclosure action.

If Countrywide lacked standing to bring the foreclosure action due to not being an assignee of the note or holder of same, then any subsequent transfer of title to Federal National Mortgage Association a/k/a Fannie Mae would be a nullity.

However, the foregoing issues raised by respondent cannot be addressed in this court. See Nassau Homes Corp. v. Shuster, 33 Misc 3d 130(A), 2011 WL 4952990 (App Term, 9th & 10th Jud Dists 2011) holding that:

The District Court properly found that petitioner had established its ownership of the subject premises, as evidenced by a certified copy of the referee’s deed, and that petitioner had properly served occupant with a notice to quit. Occupant’s only challenge to this proceeding appeared to be based upon objections to the foreclosure proceeding itself. However, the judgment of foreclosure and sale was final as to all issues and defenses that might have been litigated in the foreclosure action (see Cherico v. Bank of NY, 211 AD2d 961 [1995]), and the Supreme Court’s determination is not subject to collateral attack in the District Court (see Banker’s Trust v. Corbin, 14 Misc 3d 136[A], 2007 NY Slip Op 50239[U] [App Term, 2d & 11th Jud Dists 2007]). Thus, as occupant has shown no basis to disturb the final judgment, the final judgment is affirmed.

Based upon the foregoing, since respondent has raised serious issues concerning the foreclosure, this court will stay these proceedings until March 15, 2012, to afford respondent an opportunity to address all issues in the Supreme Court Nassau County. Unless the Supreme Court has granted a stay to respondent Mary Williams or has vacated the foreclosure judgment, then this case will proceed to trial on March 19, 2012.

So Ordered:

/s/ Hon. Scott Fairgrieve

DISTRICT COURT JUDGE [*4]

Dated:January 10, 2012

CC:Volunteer Lawyers Project

Rosicki, Rosicki & Associates, P.C.

SF/mp

[ipaper docId=77980254 access_key=key-1r7j07874ki06go4pen height=600 width=600 /]

False Statements

Truth-In-Mortgage Documents

Action Date: January 11, 2012
Location: West Palm Beach, FL

Legislation needed in every state:

The Truth-In-Mortgage Documents Act

1. On every Mortgage Assignment, and every Missing or Lost Assignment Affidavit, filed in the Official Records of any county in this State, or filed in any Court in this State, each signer, including any witness or notary, must sign his or her own name, regardless of any authorization by any individual or entity to sign any other name.

2. On every Mortgage Assignment, and every Missing or Lost Assignment Affidavit, filed in the Official Records of any county in this State, or filed in any Court in this State, each signer, including any witness or notary, must set forth his or her actual job title, and the name of his or her actual employer, regardless of any authorization by any individual or entity to state any other job title or employer. Any individual signing as an officer of Mortgage Electronic Registration Systems, Inc. (“MERS”) must state the name of the Nominee/Lender in addition to setting forth his or her actual job title, and the name of his or her actual employer.

3. On every Mortgage Assignment, and every Missing or Lost Assignment Affidavit filed in the Official Records of any county in this State, or filed in any Court in this State, each signer, including any witness, must set forth his or her actual work address at the time of the signing, regardless of any authorization by any individual or entity to state any other address.

4. On every Mortgage Assignment filed in the Official Records of any county in this State, or filed in any Court in this State, the effective date of the Assignment must be plainly and exactly set forth by day, month and year. Effective dates such as “On or before” are not permitted.

5. On every Mortgage Assignment, and every Missing or Lost Assignment Affidavit, filed in the Official Records of any county in this State, or filed in any Court in this State, each signer, including any witness or notary, must sign his or her own name, using a full signature stating first and last name, and may not use initials or abbreviations or marks, regardless of any authorization by any individual or entity to sign using initials, abbreviations or marks.

TBO-

TAMPA —

Erin Cullaro, a former assistant Florida attorney general who was fired last year after moonlighting for a “foreclosure mill,” continues to serve on a state committee that investigates other lawyers for ethical violations.

Some lawyers and consumer advocates question whether such a position of authority with the Florida Bar is appropriate.

“The bar’s self monitoring leaves much to be desired,” said Lisa Epstein, of Foreclosure Hamlet.org, which tracks cases of foreclosure fraud.

Cullaro, who worked for the attorney general’s economic crimes division in Tampa, was fired in April following a formal reprimand by Gov. Rick Scott’s office, which questioned variations of her signature on legal documents.

[TBO]