MERS is an artifice and they are going to blow up!

Read this carefully…Judge Schack knows exactly where this is going and where he is taking it!

Decided on August 25, 2010

The Bank of New York, AS TRUSTEE FOR THE CERTIFICATEHOLDERS CWALT, INC. ALTERNATIVE LOAN TRUST 2006-OC1 MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-OC1, Plaintiff,

against

Denise Mulligan, BEVERLY BRANCHE, et. al., Defendants.

Plaintiff:
McCabe Weisberg Conway PC
Jason E. Brooks, Esq.
New Rochelle NY

Defendant:
No Appearances.

Arthur M. Schack, J.

Plaintiff’s renewed application, upon the default of all defendants, for an order of reference for the premises located at 1591 East 48th Street, Brooklyn, New York (Block 7846, Lot 14, County of Kings) is denied with prejudice. The complaint is dismissed. The notice of pendency filed against the above-named real property is cancelled.

In my June 3, 2008 decision and order in this matter, I granted leave to plaintiff, THE BANK OF NEW YORK, AS TRUSTEE FOR THE CERTIFICATEHOLDERS CWALT, INC. ALTERNATIVE LOAN TRUST 2006-OC1 MORTGAGE PASS-THROUGH CERTIFICATES, [*2]SERIES 2006-OC1 (BNY), to renew its application for an order of reference within forty-five (45) days, until July 18, 2008, if it complied with three conditions. However, plaintiff did not make the instant motion until May 4, 2009, 335 days after June 3, 2008, and failed to offer any excuse for its lateness. Therefore, the instant motion is 290 days, almost ten months, late. Further, the instant renewed motion failed to present the three affidavits that this Court ordered plaintiff BNY to present with its renewed motion for an order of reference: (1) an affidavit of facts either by an officer of plaintiff BNY or someone with a valid power of attorney from plaintiff BNY and personal knowledge of the facts; (2) an affidavit from Ely Harless describing his employment history for the past three years, because Mr. Harless assigned the instant mortgage as Vice President of MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. (MERS) and then executed an affidavit of merit for assignee BNY as Vice President of BNY’s alleged attorney-in-fact without any power of attorney; and, (3) an affidavit from an officer of plaintiff BNY explaining why it purchased the instant nonperforming loan from MERS, as nominee for DECISION ONE MORTGAGE COMPANY, LLC (DECISION ONE).

Moreover, after I reviewed the papers filed with this renewed motion for an order of reference and searched the Automated City Register Information System (ACRIS) website of the Office of the City Register, New York City Department of Finance, I discovered that plaintiff BNY lacked standing to pursue the instant action for numerous reasons. Therefore, the instant action is dismissed with prejudice.

Background

Defendant DENISE MULLIGAN (MULLIGAN) borrowed $392,000.00 from

DECISION ONE on October 28, 2005. The mortgage to secure the note was recorded by MERS, “acting solely as a nominee for Lender [DECISION ONE]” and “FOR PURPOSES OF RECORDING THIS MORTGAGE, MERS IS THE MORTGAGEE OF RECORD,” in the Office of the City Register of the City of New York, New York City Department of Finance, on February 6, 2006, at City Register File Number (CRFN) 2006000069253.

Defendant MULLIGAN allegedly defaulted in her mortgage loan payments with her May 1, 2007 payment. Subsequently, plaintiff BNY commenced the instant action, on August 9, 2007, alleging in ¶ 8 of the complaint, and again in ¶ 8 of the August 16, 2007 amended complaint, that “Plaintiff [BNY] is the holder of said note and mortgage. said mortgage was assigned to Plaintiff, by Assignment of Mortgage to be recorded in the Office of the County Clerk of Kings County [sic].” As an aside, plaintiff’s counsel needs to learn that mortgages in New York City are not recorded in the Office of the County Clerk, but in the Office of the City Register of the City of New York. However, the instant mortgage and note were not assigned to plaintiff BNY until October 9, 2007, 61 days subsequent to the commencement of the instant action, by MERS, “as nominee for Decision One,” and executed by Ely Harless, Vice President of MERS. This assignment was recorded on October 24, 2007, in the Office of the City Register of the City of New York, at CRFN 2007000537531.

I denied the original application for an order of reference, on June 3, 2008, with leave to renew, because assignor Ely Harless also executed the March 20, 2008-affidavit of merit as Vice President and “an employee of Countrywide Home Loans, Inc., attorney-in-fact for Countrywide Home Loans, Inc.” The original application for an order of reference did not present any power of attorney from plaintiff BNY to Countrywide Home Loans, Inc. Also, the Court pondered how [*3]Countrywide Home Loans, Inc. could be its own an attorney-fact?

In my June 3, 2008 decision and order I noted that Real Property Actions and Proceedings Law (RPAPL) § 1321 allows the Court in a foreclosure action, upon the default of defendant or defendant’s admission of mortgage payment arrears, to appoint a referee “to compute the amount due to the plaintiff” and plaintiff BNY’s application for an order of reference was a preliminary step to obtaining a default judgment of foreclosure and sale. (Home Sav. Of Am., F.A. v Gkanios, 230 AD2d 770 [2d Dept 1996]). However, plaintiff BNY failed to meet the clear requirements of CPLR § 3215 (f) for a default judgment, which states:

On any application for judgment by default, the applicant shall file proof of service of the summons and the complaint, or a summons and notice served pursuant to subdivision (b) of rule 305 or subdivision (a) of rule 316 of this chapter, and proof of the facts constituting the claim, the default and the amount due by affidavit made by the party . . . Where a verified complaint has been served, it may be used as the affidavit of the facts constituting the claim and the amount due; in such case, an affidavit as to the default shall be made by the party or the party’s attorney. [Emphasisadded].

Plaintiff BNY failed to submit “proof of the facts” in “an affidavit made by the party.” (Blam v Netcher, 17 AD3d 495, 496 [2d Dept 2005]; Goodman v New York City Health & Hosps. Corp. 2 AD3d 581[2d Dept 2003]; Drake v Drake, 296 AD2d 566 [2d Dept 2002]; Parratta v McAllister, 283 AD2d 625 [2d Dept 2001]; Finnegan v Sheahan, 269 AD2d 491 [2d Dept 2000]; Hazim v Winter, 234 AD2d 422 [2d Dept 1996]). Instead, plaintiff BNY submitted an affidavit of merit and amount due by Ely Harless, “an employee of Countrywide Home Loans, Inc.” and failed to submit a valid power of attorney for that express purpose. Also, I required that if plaintiff renewed its application for an order of reference and provided to the Court a valid power of attorney, that if the power of attorney refers to a servicing agreement, the Court needs a properly offered copy of the servicing agreement to determine if the servicing agent may proceed on behalf of plaintiff. (EMC Mortg. Corp. v Batista, 15 Misc 3d 1143 (A), [Sup Ct, Kings County 2007]; Deutsche Bank Nat. Trust Co. v Lewis, 14 Misc 3d 1201 (A) [Sup Ct, Suffolk County 2006]).

I granted plaintiff BNY leave to renew its application for an order of reference within forty-five (45) days of June 3, 2008, which would be July 18, 2008. For reasons unknown to the Court, plaintiff BNY made the instant motion to renew its application for an order of reference on May 4, 2009, 290 days late. Plaintiff’s counsel, in his affirmation in support of the renewed motion, offers no explanation for his lateness and totally ignores this issue.

Further, despite the assignment by MERS, as nominee for DECISION ONE, to plaintiff BNY occurring 61 days subsequent to the commencement of the instant action, plaintiff’s counsel claims, in ¶ 17 of his affirmation in support, that “[s]aid assignment of mortgage [by MERS, as nominee for DECISION ONE to BNT] was drafted for the convenience of the court in establishing the chain of ownership, but the actual assignment and transfer had previously occurred by delivery.” The alleged proof presented of physical delivery of the subject MULLIGAN mortgage is a computer printout [exhibit G of motion], dated April 30, 2009, from [*4]Countrywide Financial, which plaintiff’s counsel calls a “Closing Loan Schedule,” and claims, in ¶ 21 of his affirmation in support, that this “closing loan schedule is the mortgage loan schedule displaying every loan held by such trust at the close date for said trust at the end of January 2006. The closing loan schedule is of public record and demonstrates that the Plaintiff was in possession of the note and mortgage about nineteen (19) months prior to the commencement of this action.” There is an entry on line 2591 of the second to last page of the printout showing account number 1232268089, which plaintiff’s counsel, in ¶ 22 of his affirmation in support, alleges is the subject mortgage. Plaintiff’s counsel asserts, in ¶ 23 of his affirmation in support, that “[t]he annexed closing loan schedule suffices to proceed in granting Plaintiff’s Order of Reference in this matter proving possession prior to any default.” This claim is ludicrous. The computer printout, printed on April 30, 2009, just prior to the making of the instant motion, has no probative value with respect to whether physical delivery of the subject mortgage was made to plaintiff BNY prior to the August 9, 2007 commencement of the instant action.

Further, even if the mortgage was delivered to BNY prior to the August 9, 2007 commencement of the instant action, this claim is in direct contradiction to plaintiff’s claim previously mentioned in ¶ 8 of both the complaint and the amended complaint, that “Plaintiff [BNY] is the holder of said note and mortgage. said mortgage was assigned to Plaintiff, by Assignment of Mortgage to be recorded in the Office of the County Clerk of Kings County [sic].” Both ¶’s 8 allege that the assignment of the subject mortgage took place prior to August 9, 2007 and the recording would subsequently take place. The only reality for the Court is that the assignment of the subject mortgage took place 61 days subsequent to the commencement of the action on October 9, 2007 and the assignment was recorded on October 24, 2007.

Moreover, plaintiff’s counsel alleges, in ¶ 18 of his affirmation in support, that “[p]ursuant to a charter between Mortgage Electronic Registrations Systems, Inc. ( MERS’) and Decision One Mortgage Company, LLC, all officers of Decision One Mortgage Company, LLC, a member of MERS, are appointed as assistant secretaries and vice presidents of MERS, and as such are authorized” to assign mortgage loans registered on the MERS System and execute documents related to foreclosures. ¶ 18 concludes with “See Exhibit F.” None of this appears in exhibit F. Exhibit F is a one page power of attorney from “THE BANK OF NEW YORK, as Trustee” pursuant to unknown pooling and servicing agreements appointing “Countrywide Home Loans Servicing LP and its authorized officers (collectively CHL Servicing’)” as its “attorneys-in-fact and authorized agents” for foreclosures “in connection with the transactions contemplated in those certain Pooling and Servicing Agreements.” The so-called “charter” between MERS and DECISION ONE was not presented to the Court in any exhibits attached to the instant motion.

Further, attached to the instant renewed motion [exhibit D] is an affidavit of merit

by Keri Selman, dated August 23, 2007 [47 days before the assignment to BNY], in which Ms. Selman claims to be “a foreclosure specialist of Countrywide Home Loans, Inc. Servicing agent for BANK OF NEW YORK, AS TRUSTEE FOR THE CERTIFICATEHOLDERS CWALT, INC. ALTERNATIVE LOAN TRUST 2006-OC1 MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-OC1 . . . I make this afidavit upon personal knowledge based on books and records of Bank of New York in my possession or subject to my control [sic]” Countrywide Home Loans, Inc. is not Countrywide Home Loans Servicing LP, referred to in the power of attorney attached to the renewed motion [exhibit F]. Moreover, plaintiff failed to [*5]present to the Court any power of attorney authorizing Ms. Selman to execute for Countrywide Home Loans, Inc. her affidavit on behalf of plaintiff BNY. Also, Ms. Selman has a history of executing documents presented to this Court while wearing different corporate hats. In Bank of New York as Trustee for Certificateholders CWABS, Inc. Asset-Backed Certificates, Series 2006-22 v Myers (22 Misc 3d 1117 [A] [Sup Ct, Kings County 2009], in which I issued a decision and order on February 3, 2009, Ms. Selman assigned the subject mortgage on June 28, 2008 as Assistant Vice President of MERS, nominee for Homebridge Mortgage Bankers Corp., and then five days later executed an affidavit of merit as Assistant Vice President of plaintiff BNY. I observed, in this decision and order, at 1-2, that:

Ms. Selman is a milliner’s delight by virtue of the number of hats she wears. In my November 19, 2007 decision and order (BANK OF NEW YORK A TRUSTEE FOR THE NOTEHOLDERS OF CWABS, INC. ASSET-BACKED NOTES, SERIES 2006-SD2 v SANDRA OROSCONUNEZ, et. al. [Index No., 32052/07]),

I observed that:

Plaintiff’s application is the third application for an order of reference received by me in the past several days that contain an affidavit from Keri Selman. In the instant action, she alleges to be an Assistant Vice President of the Bank of New York. On November 16, 2007, I denied an application for an order of reference (BANK OF NEW YORK A TRUSTEE FOR THE CERTIFICATEHOLDERS OF CWABS, INC. ASSET-BACKED CERTIFICATES, SERIES 2006-8 v JOSE NUNEZ, et. al., Index No. 10457/07), in which Keri Selman, in her affidavit of merit claims to be “Vice President of  COUNTRYWIDE HOME LOANS, Attorney in fact for BANK OF NEW YORK.” The Court is concerned that Ms. Selman might be engaged in a subterfuge, wearing various corporate hats. Before granting an application for an order of reference, the Court requires an affidavit from Ms. Selman describing her employment history for the past three years. This Court has not yet received any affidavit from Ms. Selman describing her employment history, whether it is with MERS, BNY, COUNTRYWIDE HOME LOANS, or any other entity. [*6]

Further, the Court needs to address the conflict of interest in the June 20, 2008 assignment by Ms. Selman to her alleged employer, BNY.

I am still waiting for Ms. Selman’s affidavit to explain her tangled employment relationships. Interestingly, Ms. Selman, as “Assistant Vice President of MERS,” nominee for “America’s Wholesale Lender,” is the assignor of another mortgage to plaintiff BNY in Bank of New York v Alderazi (28 Misc 3d 376 [Sup Ct, Kings County 2010]), which I further cite below.

It is clear that plaintiff BNY failed to provide the Court with: an affidavit of merit by an officer of plaintiff BNY or someone with a valid power of attorney from BNY; an affidavit from Ely Harless, explaining his employment history; and, an explanation from BNY of why it purchased a nonperforming loan from MERS, as nominee of DECISION ONE. Moreover, plaintiff BNY did not own the subject mortgage and note when the instant case commenced. Even if plaintiff BNY owned the subject mortgage and note when the case commenced, MERS lacked the authority to assign the subject MULLIGAN mortgage to BNY, as will be explained further. Plaintiff’s counsel offers a lame and feeble excuse for not complying with my June 3, 2008 decision and order, in ¶ 23 of his affirmation in support, claiming that “[t]he affidavits requested in Honorable Arthur M. Schack’s Decision and Order should not be required, given the annexed closing loan schedule.”

Plaintiff BNY lacked standing

The instant action must be dismissed because plaintiff BNY lacked standing to bring this action on August 9, 2007, the day the action commenced. “Standing to sue is critical to the proper functioning of the judicial system. It is a threshold issue. If standing is denied, the pathway to the courthouse is blocked. The plaintiff who has standing, however, may cross the threshold and seek judicial redress.” (Saratoga County Chamber of Commerce, Inc. v Pataki, 100 NY2d 801 812 [2003], cert denied 540 US 1017 [2003]). Professor Siegel (NY Prac, § 136, at 232 [4d ed]), instructs that:

[i]t is the law’s policy to allow only an aggrieved person to bring a lawsuit . . . A want of “standing to sue,” in other words, is just another way of saying that this particular plaintiff is not involved in a genuine controversy, and a simple syllogism takes us from there to a “jurisdictional”

dismissal: (1) the courts have jurisdiction only over controversies; (2) a plaintiff found to lack “standing”is not involved in a controversy; and (3) the courts therefore have no jurisdiction of the case when such a plaintiff purports to bring it.

“Standing to sue requires an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant’s request.” (Caprer v Nussbaum (36 AD3d 176, 181 [2d Dept 2006]). If a plaintiff lacks standing to sue, the plaintiff may not proceed in the action. (Stark v Goldberg, 297 AD2d 203 [1st Dept 2002]). [*7]

Plaintiff BNY lacked standing to foreclose on the instant mortgage and note when this action commenced on August 7, 2007, the day that BNY filed the summons, complaint and notice of pendency with the Kings County Clerk, because it did not own the mortgage and note that day. The instant mortgage and note were assigned to BNY, 61 days later, on October 7, 2007. The Court, in Campaign v Barba (23 AD3d 327 [2d Dept 2005]), instructed that “[t]o establish a prima facie case in an action to foreclose a mortgage, the plaintiff must establish the existence of the mortgage and the mortgage note, ownership of the mortgage, and the defendant’s default in payment [Emphasis added].” (See Witelson v Jamaica Estates Holding Corp. I, 40 AD3d 284 [1st Dept 2007]; Household Finance Realty Corp. of New York v Wynn, 19 AD3d 545 [2d Dept 2005]; Sears Mortgage Corp. v Yahhobi, 19 AD3d 402 [2d Dept 2005]; Ocwen Federal Bank FSB v Miller, 18 AD3d 527 [2d Dept 2005]; U.S. Bank Trust Nat. Ass’n Trustee v Butti, 16 AD3d 408 [2d Dept 2005]; First Union Mortgage Corp. v Fern, 298 AD2d 490 [2d Dept 2002]; Village Bank v Wild Oaks, Holding, Inc., 196 AD2d 812 [2d Dept 1993]).

Assignments of mortgages and notes are made by either written instrument or the assignor physically delivering the mortgage and note to the assignee.

“Our courts have repeatedly held that a bond and mortgage may be transferred by delivery without a written instrument of assignment.” (Flyer v Sullivan, 284 AD 697, 699 [1d Dept 1954]). The written October 7, 2007 assignment by MERS, as nominee for DECISION ONE, to BNY is clearly 61 days after the commencement of the action. Plaintiff’s BNY’s claim that the gobblygook computer printout it offered in exhibit G is evidence of physical delivery of the mortgage and note prior to commencement of the action is not only nonsensical, but flies in the face of the complaint and amended complaint, which both clearly state in ¶ 8 that “Plaintiff [BNY] is the holder of said note and mortgage. said mortgage was assigned to Plaintiff, by Assignment of Mortgage to be recorded in the Office of the County Clerk of Kings County [sic].” Plaintiff BNY did not own the mortgage and note when the instant action commenced on August 7, 2007.

“[A] retroactive assignment cannot be used to confer standing upon the assignee in a foreclosure action commenced prior to the execution of an assignment.”

(Wells Fargo Bank, N.A. v Marchione, 69 AD3d 204, 210 [2d Dept 2009]). The Marchione Court relied upon LaSalle Bank Natl. Assoc. v Ahearn (59 AD3d 911 [3d Dept 2009], which instructed, at 912, “[n]otably, foreclosure of a mortgage may not be brought by one who has no title to it’ (Kluge v Fugazy, 145 AD2d 537 [2d Dept 1988]) and an assignee of such a mortgage does not have standing unless the assignment is complete at the time the action is commenced).” (See U.S. Bank, N.A. v Collymore, 68 AD3d 752 [2d Dept 2009]; Countrywide Home Loans, Inc. v Gress, 68 AD3d 709 [2d Dept 2009]; Citgroup Global Mkts. Realty Corp. v Randolph Bowling, 25 Misc 3d 1244 [A] [Sup Ct, Kings County 2009]; Deutsche Bank Nat. Trust Company v Abbate, 25 Misc 3d 1216 [A] [Sup Ct, Richmond County 2009]; Indymac Bank FSB v Boyd, 22 Misc 3d 1119 [A] [Sup Ct, Kings County 2009]; Credit-Based Asset Management and Securitization, LLC v Akitoye,22 Misc 3d 1110 [A] [Sup Ct, Kings County Jan. 20, 2009]; Deutsche Bank Trust Co. Americas v Peabody, 20 Misc 3d 1108 [A][Sup Ct, Saratoga County 2008]).

The Appellate Division, First Department, citing Kluge v Fugazy, in Katz v East-Ville Realty Co., (249 AD2d 243 [1d Dept 1998]), instructed that “[p]laintiff’s attempt to foreclose upon a mortgage in which he had no legal or equitable interest was without foundation in law or [*8]fact.” Therefore, with plaintiff BNY not having standing, the Court lacks jurisdiction in this foreclosure action and the instant action is dismissed with prejudice.

MERS had no authority to assign the subject mortgage and note

Moreover, MERS lacked authority to assign the subject mortgage. The subject DECISION ONE mortgage, executed on October 28, 2005 by defendant MULLIGAN, clearly states on page 1 that “MERS is a separate corporation that is acting solely as a nominee for Lender [DECISION ONE] and LENDER’s successors and assigns . . . FOR PURPOSES OF RECORDING THIS MORTGAGE, MERS IS THE MORTGAGEE OF RECORD.”

The word “nominee” is defined as “[a] person designated to act in place of another, usu. in a very limited way” or “[a] party who holds bare legal title for the benefit of others.” (Black’s Law Dictionary 1076 [8th ed 2004]). “This definition suggests that a nominee possesses few or no legally enforceable rights beyond those of a principal whom the nominee serves.” (Landmark National Bank v Kesler, 289 Kan 528, 538 [2009]). The Supreme Court of Kansas, in Landmark National Bank, 289 Kan at 539, observed that:

The legal status of a nominee, then, depends on the context of the relationship of the nominee to its principal. Various courts have interpreted the relationship of MERS and the lender as an agency relationship. See In re Sheridan, 2009 WL631355, at *4 (Bankr. D.

Idaho, March 12, 2009) (MERS “acts not on its own account. Its capacity is representative.”); Mortgage Elec. Registrations Systems, Inc. v Southwest, 2009 Ark. 152 ___, ___SW3d___, 2009 WL 723182 (March 19, 2009) (“MERS, by the terms of the deed of trust, and its own stated purposes, was the lender’s agent”); La Salle Nat. Bank v Lamy, 12 Misc 3d 1191 [A], at *2 [Sup Ct, Suffolk County 2006]) . . .

(“A nominee of the owner of a note and mortgage may not effectively assign the note and mortgage to another for want of an ownership interest in said note and mortgage by the nominee.”)

The New York Court of Appeals in MERSCORP, Inc. v Romaine (8 NY3d 90 [2006]), explained how MERS acts as the agent of mortgagees, holding at 96:

In 1993, the MERS system was created by several large participants in the real estate mortgage industry to track ownership interests in residential mortgages. Mortgage lenders and other entities, known as MERS members, subscribe to the MERS system and pay annual fees for the electronic processing and tracking of ownership and transfers of mortgages. Members contractually agree to appoint [*9] MERS to act as their common agent on all mortgages they register in the MERS system. [Emphasis added]

Thus, it is clear that MERS’s relationship with its member lenders is that of agent with the lender-principal. This is a fiduciary relationship, resulting from the manifestation of consent by one person to another, allowing the other to act on his behalf, subject to his control and consent. The principal is the one for whom action is to be taken, and the agent is the one who acts.It has been held that the agent, who has a fiduciary relationship with the principal, “is a party who acts on behalf of the principal with the latter’s express, implied, or apparent authority.” (Maurillo v Park Slope U-Haul, 194 AD2d 142, 146 [2d Dept 1992]). “Agents are bound at all times to exercise the utmost good faith toward their principals. They must act in accordance with the highest and truest principles of morality.” (Elco Shoe Mfrs. v Sisk, 260 NY 100, 103 [1932]). (See Sokoloff v Harriman Estates Development Corp., 96 NY 409 [2001]); Wechsler v Bowman, 285 NY 284 [1941]; Lamdin v Broadway Surface Advertising Corp., 272 NY 133 [1936]). An agent “is prohibited from acting in any manner inconsistent with his agency or trust and is at all times bound to exercise the utmost good faith and loyalty in the performance of his duties.” (Lamdin, at 136).

Thus, in the instant action, MERS, as nominee for DECISION ONE, is an agent of DECISION ONE for limited purposes. It only has those powers given to it and authorized by its principal, DECISION ONE. Plaintiff BNY failed to submit documents authorizing MERS, as nominee for DECISION ONE, to assign the subject mortgage to plaintiff BNY. Therefore, even if the assignment by MERS, as nominee for DECISION ONE, to BNY was timely, and it was not, MERS lacked authority to assign the MULLIGAN mortgage, making the assignment defective. Recently, in Bank of New York v Alderazi, 28 Misc 3d at 379-380, my learned Kings County Supreme Court colleague, Justice Wayne Saitta explained that:

A party who claims to be the agent of another bears the burden of proving the agency relationship by a preponderance of the evidence (Lippincott v East River Mill & Lumber Co., 79 Misc 559 [1913]) and “[t]he declarations of an alleged agent may not be shown for the purpose of proving the fact of agency.” (Lexow & Jenkins, P.C. v Hertz Commercial Leasing Corp., 122 AD2d 25 [2d Dept 1986]; see also Siegel v Kentucky Fried Chicken of Long Is. 108 AD2d 218 [2d Dept 1985]; Moore v Leaseway Transp/ Corp., 65 AD2d 697 [1st Dept 1978].) “[T]he acts of a person assuming to be the representative of another are not competent to prove the agency in the absence of evidence tending to show the principal’s knowledge of such acts or assent to them.” (Lexow & Jenkins, P.C. v Hertz Commercial Leasing Corp., 122 AD2d at 26, quoting 2 NY Jur 2d, Agency and Independent Contractors § 26). [*10]

Plaintiff has submitted no evidence to demonstrate that the original lender, the mortgagee America’s Wholesale Lender, authorized MERS to assign the secured debt to plaintiff [the assignment, as noted above, executed by the multi-hatted Keri Selman].

In the instant action, MERS, as nominee for DECISION ONE, not only had no authority to assign the MULLIGAN mortgage, but no evidence was presented to the Court to demonstrate DECISION ONE’s knowledge or assent to the assignment by MERS to plaintiff BNY.

Cancellation of subject notice of pendency

The dismissal with prejudice of the instant foreclosure action requires the cancellation of the notice of pendency. CPLR § 6501 provides that the filing of a notice of pendency against a property is to give constructive notice to any purchaser of real property or encumbrancer against real property of an action that “would affect the title to, or the possession, use or enjoyment of real property, except in a summary proceeding brought to recover the possession of real property.” The Court of Appeals, in 5308 Realty Corp. v O & Y Equity Corp. (64 NY2d 313, 319 [1984]), commented that “[t]he purpose of the doctrine was to assure that a court retained its ability to effect justice by preserving its power over the property, regardless of whether a purchaser had any notice of the pending suit,” and, at 320, that “the statutory scheme permits a party to effectively retard the alienability of real property without any prior judicial review.”

CPLR § 6514 (a) provides for the mandatory cancellation of a notice of pendency by:

The Court, upon motion of any person aggrieved and upon such notice as it may require, shall direct any county clerk to cancel a notice of pendency, if service of a summons has not been completed within the time limited by section 6512; or if the action has been settled, discontinued or abated; or if the time to appeal from a final judgment against the plaintiff has expired; or if enforcement of a final judgment against the plaintiff has not been stayed pursuant to section 551. [emphasis added]

The plain meaning of the word “abated,” as used in CPLR § 6514 (a) is the ending of an action. “Abatement” is defined as “the act of eliminating or nullifying.” (Black’s Law Dictionary 3 [7th ed 1999]). “An action which has been abated is dead, and any further enforcement of the cause of action requires the bringing of a new action, provided that a cause of action remains (2A Carmody-Wait 2d § 11.1).” (Nastasi v Natassi, 26 AD3d 32, 40 [2d Dept 2005]). Further, Nastasi at 36, held that the “[c]ancellation of a notice of pendency can be granted in the exercise of the inherent power of the court where its filing fails to comply with CPLR § 6501 (see 5303 Realty Corp. v O & Y Equity Corp., supra at 320-321; Rose v Montt Assets, 250 AD2d 451, 451-452 [1d Dept 1998]; Siegel, NY Prac § 336 [4th ed]).” Thus, the [*11]dismissal of the instant complaint must result in the mandatory cancellation of plaintiff BNY’s notice of pendency against the property “in the exercise of the inherent power of the court.”

Conclusion

Accordingly, it is ORDERED, that the renewed motion of plaintiff, THE BANK OF NEW YORK, AS TRUSTEE FOR THE CERTIFICATEHOLDERS CWALT, INC. ALTERNATIVE LOAN TRUST 2006-OC1 MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-OC1, for an order of reference, for the premises located at 1591 East 48th Street, Brooklyn, New York (Block 7846, Lot 14, County of Kings), is denied with prejudice; and it is further ORDERED, that the instant action, Index Number 29399/07, is dismissed with prejudice; and it is further ORDERED that the Notice of Pendency in this action, filed with the Kings County Clerk on August 9, 2007, by plaintiff, THE BANK OF NEW YORK, AS TRUSTEE FOR THE CERTIFICATE HOLDERS CWALT, INC. ALTERNATIVE LOAN TRUST 2006-OC1 MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-OC1, to foreclose a mortgage for real property located at 1591 East 48th Street, Brooklyn, New York (Block 7846, Lot 14, County of Kings), is cancelled.

This constitutes the Decision and Order of the Court.

ENTER

________________________________HON. ARTHUR M. SCHACK

J. S. C.

~

VIA: ForeclosureHamlet & 4closureFraud

Dismissed With PREJUDICE!

Court finds convincing evidence that Wamu, Chase and Fishman & Shapiro committed fraud on this court!

JP MORGAN V. POCOPANNI DUVAL, COUNTY FLORIDA CASE NO.: 16-2008-CA-3989

[ipaper docId=35835555 access_key=key-31q8zmp0797mp741isl height=600 width=600 /]

2010 NY Slip Op 50927(U)

HSBC BANK USA, N.A. AS TRUSTEE FOR NOMURA ASSET-BACKED CERTIFICATE SERIES

2006-AF1,, Plaintiff,
v.
LOVELY YEASMIN, ET. AL., Defendants.

34142/07

Supreme Court, Kings County.

Decided May 24, 2010.

Steven J Baum, PC, Amherst NY, Plaintiff — US Bank.

ARTHUR M. SCHACK, J.

Plaintiff’s renewed motion for an order of reference, for the premises located at 22 Jefferson Street, Brooklyn, New York (Block 3170, Lot 20, County of Kings), is denied with prejudice. The instant action is dismissed and the notice of pendency for the subject property is cancelled. Plaintiff HSBC BANK USA, N.A. AS TRUSTEE FOR NOMURA ASSET-BACKED CERTIFICATE SERIES 2006-AF1 (HSBC) failed to comply with my May 2, 2008 decision and order in the instant matter (19 Misc 3d 1127 [A]), which granted plaintiff HSBC leave:

to renew its application for an order of reference for the premises located at 22 Jefferson Street, Brooklyn, New York (Block 3170, Lot 20, County of Kings), upon presentation to the Court, within forty-five (45) days of this decision and order of:

(1) a valid assignment of the instant mortgage and note to plaintiff, HSBC . . .;

(2) an affirmation from Steven J. Baum, Esq., the principal of Steven J. Baum, P.C., explaining if both MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. [MERS], the assignor of the instant mortgage and note, and HSBC . . . the assignee of the instant mortgage and note, pursuant to 22 NYCRR § 1200.24, consented to simultaneous representation in the instant action, with “full disclosure of the implications of the simultaneous representation and the advantages and risks involved” explained to them;

(3) compliance with the statutory requirements of CPLR § 3215 (f), by an affidavit of facts executed by someone with authority to execute such an affidavit, and if the affidavit of facts is executed by a loan servicer, a copy of a valid power of attorney to the loan servicer, and the servicing agreement authorizing the affiant to act in the instant foreclosure action; and

(4) an affidavit from an officer of plaintiff HSBC . . . explaining why plaintiff HSBC . . . purchased a nonperforming loan from MERS, as nominee for CAMBRIDGE HOME CAPITAL, LLC [CAMBRIDGE].

[Emphasis added]

Plaintiff made the instant motion on January 6, 2009, 249 days subsequent to the May 2, 2008 decision and order. Thus, the instant motion is 204 days late. Plaintiff’s unavailing lateness explanation, in ¶ 16 of plaintiff’s counsel’s January 6, 2009 affirmation of regularity, states:

A previous application has been made for this or like relief but was subsequently denied without prejudice with leave to renew upon proper papers. By Decision and Order of this court dated the 2nd day of May 2008, plaintiff had 45 days to renew its application.

However on June 29, 2008 the Plaintiff permitted the mortgagor to enter into a foreclosure forbearance agreement. Said agreement was entered into with the hope that the Defendant would be able to keep her home. The agreement was not kept by the mortgagor and Plaintiff has since resumed the foreclosure action. The defects of the original application are addressed in the Affirmation attached hereto at Tab F [sic].

June 29, 2008 was 58 days subsequent to May 2, 2008. This was 13 days subsequent to the Court ordered deadline for plaintiff to make a renewed motion for an order of reference. While it’s laudatory for plaintiff HSBC to have granted defendant a forbearance agreement, plaintiff HSBC never notified the Court about this or sought Court approval of extending the 45-day deadline to make the instant motion. However, even if the instant motion was timely, the documents plaintiff’s counsel refers to at Tab F [exhibit F of motion] do not cure the defects the Court found with the original motion and articulated in the May 2, 2008 decision and order.

Background

Defendant LOVELY YEASMIN borrowed $624,800.00 from CAMBRIDGE on May 10, 2006. The note and mortgage were recorded by MERS, as nominee for CAMBRIDGE, for purposes of recording the mortgage, in the Office of the City Register, New York City Department of Finance, on May 23, 2006, at City Register File Number (CRFN) XXXXXXXXXXXXX. Then, MERS, as nominee for CAMBRIDGE, assigned the mortgage to plaintiff HSBC on September 10, 2007, with the assignment recorded in the Office of the City Register, on September 20, 2007, at CRFN XXXXXXXXXXXXX. The assignment was executed by “Nicole Gazzo, Esq., on behalf of MERS, by Corporate Resolution dated 7/19/07.” Neither a corporate resolution nor a power of attorney to Ms. Gazzo were recorded with the September 10, 2007 assignment. Therefore, the Court found the assignment invalid and plaintiff HSBC lacked standing to bring the instant foreclosure action. Ms. Gazzo, the assignor, according to the Office of Court Administration’s Attorney Registration, has as her business address, “Steven J. Baum, P.C., 220 Northpointe Pkwy Ste G, Buffalo, NY 14228-1894.” On September 10, 2008, the same day that Ms. Gazzo executed the invalid assignment for MERS, as nominee for CAMBRIDGE, plaintiff’s counsel, Steven J. Baum, P.C., commenced the instant action on behalf of purported assignee HSBC by filing the notice of pendency, summons and complaint in the instant action with the Kings County Clerk’s Office. The Court, in the May 2, 2008 decision and order, was concerned that the simultaneous representation by Steven J. Baum, P.C. of both MERS and HSBC was a conflict of interest in violation of 22 NYCRR § 1200.24, the Disciplinary Rule of the Code of Professional Responsibility entitled “Conflict of Interest; Simultaneous Representation,” then in effect. Further, plaintiff’s moving papers for an order of reference and related relief failed to present an “affidavit made by the party,” pursuant to CPLR § 3215 (f). The instant application contained an “affidavit of merit and amount due,” dated November 16, 2007, by Cathy Menchise, “Senior Vice President of WELLS FARGO BANK, N.A. D/B/A AMERICA’S SERVICING COMPANY, Attorney in Fact for HSBC BANK USA, N.A. AS TRUSTEE FOR NOMURA ASSET-BACKED CERTIFICATE SERIES 2006-AF1.” Ms. Menchise stated “[t]hat a true copy of the Power of Attorney is attached hereto.” Actually attached was a photocopy of a “Limited Power of Attorney,” dated July 19, 2004, from HSBC, appointing WELLS FARGO BANK, N.A. as its attorney-in-fact to perform various enumerated services, by executing documents “if such documents are required or permitted under the terms of the related servicing agreements . . . in connection with Wells Fargo Bank, N.A.[‘s] . . . responsibilities to service certain mortgage loans . . . held by HSBC . . . as Trustee of various trusts.” The “Limited Power of Attorney” failed to list any of these “certain mortgage loans.” The Court was unable to determine if plaintiff HSBC’s subject mortgage loan was covered by this “Limited Power of Attorney.” The original motion stated that defendant YEASMIN defaulted on her mortgage payments by failing to make her May 1, 2007 and subsequent monthly loan payments. Yet, on September 10, 2007, 133 days subsequent to defendant YEASMIN’S alleged May 1, 2007 payment default, plaintiff HSBC took the ssignment of the instant nonperforming loan from MERS, as nominee for CAMBRIDGE. Thus, the Court required, upon renewal of the motion for an order of reference, a satisfactory explanation of why HSBC purchased a nonperforming loan from MERS, as nominee for CAMBRIDGE.

Plaintiff HSBC needed “standing” to proceed in the instant action. The Court of Appeals (Saratoga County Chamber of Commerce, Inc. v Pataki, 100 NY2d 801, 912 [2003]), cert denied 540 US 1017 [2003]), held that “[s]tanding to sue is critical to the proper functioning of the judicial system. It is a threshold issue. If standing is denied, the pathway to the courthouse is blocked. The plaintiff who has standing, however, may cross the threshold and seek judicial redress.” In Carper v Nussbaum, 36 AD3d 176, 181 (2d Dept 2006), the Court held that “[s]tanding to sue requires an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant’s request.” If a plaintiff lacks standing to sue, the plaintiff may not proceed in the action. (Stark v Goldberg,297 AD2d 203 [1d Dept 2002]). “Since standing is jurisdictional and goes to a court’s authority to resolve litigation [the court] can raise this matter sua sponte.” (Axelrod v New York State Teachers’ Retirement System, 154 AD2d 827, 828 [3d Dept 1989]).

In the instant action, the September 10, 2007 assignment from MERS, as nominee for CAMBRIDGE, to HSBC was defective. Therefore, HSBC had no standing to bring this action. The recorded assignment by “Nicole Gazzo, Esq. on behalf of MERS, by Corporate Resolution dated 7/19/07,” had neither the corporate resolution nor a power of attorney attached. Real Property Law (RPL) § 254 (9) states: Power of attorney to assignee. The word “assign” or other words of assignment, when contained in an assignment of a mortgage and bond or mortgage and note, must be construed as having included in their meaning that the assignor does thereby make, constitute and appoint the assignee the true and lawful attorney, irrevocable, of the assignor, in the name of the assignor, or otherwise, but at the proper costs and charges of the assignee, to have, use and take all lawful ways and means for the recovery of the money and interest secured by the said mortgage and bond or mortgage and note, and in case of payment to discharge the same as fully as the assignor might or could do if the assignment were not made. [Emphasis added]

To have a proper assignment of a mortgage by an authorized agent, a power of attorney is necessary to demonstrate how the agent is vested with the authority to assign the mortgage. “No special form or language is necessary to effect an assignment as long as the language shows the intention of the owner of a right to transfer it [Emphasis added].” (Tawil v Finkelstein Bruckman Wohl Most & Rothman, 223 AD2d 52, 55 [1d Dept 1996]). (See Suraleb, Inc. v International Trade Club, Inc., 13 AD3d 612 [2d Dept 2004]). To foreclose on a mortgage, a party must have title to the mortgage. The instant assignment was a nullity. The Appellate Division, Second Department (Kluge v Fugazy, 145 AD2d 537, 538 [2d Dept 1988]), held that a “foreclosure of a mortgage may not be brought by one who has no title to it and absent transfer of the debt, the assignment of the mortgage is a nullity.” Citing Kluge v Fugazy, the Court inKatz v East-Ville Realty Co. (249 AD2d 243 [1d Dept 1998]), held that “[p]laintiff’s attempt to foreclose upon a mortgage in which he had no legal or equitable interest was without foundation in law or fact.” Plaintiff HSBC, with the invalid assignment of the instant mortgage and note from MERS, lacked standing to foreclose on the instant mortgage. The Court, in Campaign v Barba (23 AD3d 327 [2d Dept 2005]), held that “[t]o establish a prima facie case in an action to foreclose a mortgage, the plaintiff must establish the existence of the mortgage and the mortgage note, ownership of the mortgage, and the defendant’s default in payment [Emphasis added].” (See Household Finance Realty Corp. of New York v Wynn, 19 AD3d 545 [2d Dept 2005]; Sears Mortgage Corp. v Yahhobi, 19 AD3d 402 [2d Dept 2005]; Ocwen Federal Bank FSB v Miller, 18 AD3d 527 [2d Dept 2005]; U.S. Bank Trust Nat. Ass’n v Butti, 16 AD3d 408 [2d Dept 2005]; First Union Mortgage Corp. v Fern, 298 AD2d 490 [2d Dept 2002]; Village Bank v Wild Oaks Holding, Inc., 196 AD2d 812 [2d Dept 1993]). Even if plaintiff HSBC can cure the assignment defect, plaintiff’s counsel has to address his conflict of interest in the representation of both assignor MERS, as nominee for CAMBRIDGE, and assignee HSBC. 22 NYCRR § 1200.24, of the Disciplinary Rules of the Code of Professional Responsibility, entitled “Conflict of Interest; Simultaneous Representation,” states in relevant part: (a) A lawyer shall decline proffered employment if the exercise of independent professional judgment in behalf of a client will be or is likely to be adversely affected by the acceptance of the proffered employment, or if it would be likely to involve the lawyer in representing differing interests, except to the extent permitted under subdivision (c) of this section. (b) A lawyer shall not continue multiple employment if the exercise of independent professional judgment in behalf of a client will be or is likely to be adversely affected by the lawyer’s representation of another client, or if it would be likely to involve the lawyer in representing differing interests, except to the extent permitted under subdivision (c) of this section. (c) in the situations covered by subdivisions (a) and (b) of this section, a lawyer may represent multiple clients if a disinterested lawyer would believe that the lawyer can competently represent the interest of each and if each consents to the representation after full disclosure of the implications of the simultaneous representation and the advantages and risks involved. [Emphasis added]

The Court, upon renewal of the instant motion for an order of reference wanted to know if both MERS and HSBC were aware of the simultaneous representation by plaintiff’s counsel, Steven J. Baum, P.C., and whether both MERS and HSBC consented. Upon plaintiff’s renewed motion for an order of reference, the Court required an affirmation by Steven J. Baum, Esq., the principal of Steven J. Baum, P.C., explaining if both MERS and HSBC consented to simultaneous representation in the instant action with “full disclosure of the implications of the simultaneous representation and the advantages and risks involved.” The Appellate Division, Fourth Department, the Department, in which both Ms. Gazzo and Mr. Baum are registered (In re Rogoff, 31 AD3d 111 [2006]), censured an attorney for, inter alia, violating 22 NYCRR § 1200.24, by representing both a buyer and sellers in the sale of a motel. The Court, at 112, found that the attorney “failed to make appropriate disclosures to either the sellers or the buyer concerning dual representation.” Further, the Rogoff Court, at 113, censured the attorney, after it considered the matters submitted by respondent in mitigation, including: that respondent undertook the dual representation at the insistence of the buyer, had no financial interest in the transaction and charged the sellers and the buyer one half of his usual fee. Additionally, we note that respondent cooperated with the Grievance Committee and has expressed remorse for his misconduct. Then, if counsel for plaintiff HSBC cures the assignment defect and explains his simultaneous representation, plaintiff HSBC needs to address the “affidavit of merit” issue. The May 2, 2008 decision and order required that plaintiff comply with CPLR § 3215 (f) by providing an “affidavit made by the party,” whether by an officer of HSBC, or someone with a valid power of attorney from HSBC, to execute foreclosure documents for plaintiff HSBC. If plaintiff HSBC presents a power of attorney and it refers to a servicing agreement, the Court needs to inspect the servicing agreement. (Finnegan v Sheahan, 269 AD2d 491 [2d Dept 2000];Hazim v Winter, 234 AD2d 422 [2d Dept 1996]; EMC Mortg. Corp. v Batista, 15 Misc 3d 1143 [A] [Sup Ct, Kings County 2007]; Deutsche Bank Nat. Trust Co. v Lewis, 4 Misc 3d 1201 [A] [Sup Ct, Suffolk County 2006]).

Last, the Court required an affidavit from an officer of HSBC, explaining why, in the middle of our national mortgage financial crisis, plaintiff HSBC purchased from MERS, as nominee for CAMBRIDGE, the subject nonperforming loan. It appears that HSBC violated its corporate fiduciary duty to its stockholders by purchasing the instant mortgage loan, which became nonperforming on May 1, 2007, 133 days prior to its assignment from MERS, as nominee for CAMBRIDGE, to HSBC, rather than keep the subject mortgage loan on CAMBRIDGE’s books.

Discussion

The instant renewed motion is dismissed for untimeliness. Plaintiff made its renewed motion for an order of reference 204 days late, in violation of the Court’s May 2, 2008 decision and order. Moreover, even if the instant motion was timely, the explanations offered by plaintiff’s counsel, in his affirmation in support of the instant motion and various documents attached to exhibit F of the instant motion, attempting to cure the four defects explained by the Court in the prior May 2, 2008 decision and order, are so incredible, outrageous, ludicrous and disingenuous that they should have been authored by the late Rod Serling, creator of the famous science-fiction televison series, The Twilight Zone. Plaintiff’s counsel, Steven J. Baum, P.C., appears to be operating in a parallel mortgage universe, unrelated to the real universe. Rod Serling’s opening narration, to episodes in the 1961-1962 season of The Twilight Zone (found at www.imdb.com/title/tt005250/quotes), could have been an introduction to the arguments presented in support of the instant motion by plaintiff’s counsel, Steven J. Baum, P.C. — “You are traveling through another dimension, a dimension not only of sight and sound but of mind. A journey into a wondrous land of imagination. Next stop, the Twilight Zone.” With respect to the first issue for the renewed motion for an order of reference, the validity of the September 10, 2007 assignment of the subject mortgage and note by MERS, as nominee for CAMBRIDGE, to plaintiff HSBC by “Nicole Gazzo, Esq., on behalf of MERS, by Corporate Resolution dated 7/19/07,” plaintiff’s counsel claims that the assignment is valid because Ms. Gazzo is an officer of MERS, not an agent of MERS. Putting aside Ms. Gazzo’s conflicted status as both assignor attorney and employee of assignee’s counsel, Steven J. Baum, P.C., how would the Court have known from the plain language of the September 10, 2007 assignment that the assignor, Ms. Gazzo, is an officer of MERS? She does not state in the assignment that she is an officer of MERS and the corporate resolution is not attached. Thus, counsel’s claim of a valid assignment takes the Court into “another dimension” with a “journey into a wondrous land of imagination,” the mortgage twilight zone. Next, plaintiff’s counsel attached to exhibit F the July 17, 2007 “Agreement for Signing Authority” between MERS, Wells Fargo Home Mortgage, a Division of Wells Fargo Bank NA (WELLS FARGO), a MERS “Member” and Steven J. Baum, P.C., as WELLS FARGO’s “Vendor.” The parties agreed, in ¶ 3, that “in order for Vendor [Baum] to perform its contractual duties to Member [WELLS FARGO], MERS, by corporate resolution, will grant employees of Vendor [Baum] the limited authority to act on behalf of MERS to perform certain duties. Such authority is set forth in the Resolution, which is made a part of this Agreement.” Also attached to exhibit F is the MERS corporate resolution, certified by William C. Hultman, Corporate Secretary of MERS, that MERS’ Board of Directors adopted this resolution, effective July 19, 2007, resolving:

that the attached list of candidates are employee(s) of Steven J. Baum, P.C. and are hereby appointed as assistant secretaries and vice presidents of Mortgage Electronic Registration Systems, Inc., and as such are authorized to: Execute any and all documents necessary to foreclose upon the property securing any mortgage loan registered on the MERS System that is shown to be registered to the Member . . . Take any and all actions and execute all documents necessary to protect the interest of the Member, the beneficial owner of such mortgage loan, or MERS in any bankruptcy proceedings . . . Assign the lien of any mortgage loan registered on the MERS System that is shown to be registered to Wells Fargo.

Then, the resolution certifies five Steven J. Baum, P.C. employees [all currently admitted to practice in New York and listing Steven J. Baum, P.C. as their employer in the Office of Court Administration Attorney Registry] as MERS officers. The five are Brian Kumiega, Nicole Gazzo, Ron Zackem, Elpiniki Bechakas, and Darleen Karaszewski. The language of the MERS corporate resolution flies in the face of documents recorded with the City Register of the City of New York. The filed recordings with the City Register show that the subject mortgage was owned first by MERS, as nominee for CAMBRIDGE, and then by HSBC as Trustee for a Nomura collateralized debt obligation. However, if the Court follows the MERS’corporate resolution and enters into a new dimension of the mind, the mortgage twilight zone, the real owner of the subject mortgage is WELLS FARGO, the MERS Member and loan servicer of the subject mortgage, because the corporate resolution states that the Member is “the beneficial owner of such mortgage loan.” The MERS mortgage twilight zone was created in 1993 by several large “participants in the real estate mortgage industry to track ownership interests in residential mortgages. Mortgage lenders and other entities, known as MERS members, subscribe to the MERS system and pay annual fees for the electronic processing and tracking of ownership and transfers of mortgages. Members contractually agree to appoint MERS to act as their common agent on all mortgages they register in the MERS system.” (MERSCORP, Inc. v Romaine, 8 NY3d 90, 96 [2006]). Next, with respect to Ms. Gazzo’s employer, Steven J. Baum, P.C, and its representation of MERS, through Ms. Gazzo, the Court continues to journey through the mortgage twilight zone. Also, attached to exhibit F of the instant motion is the August 11, 2008 affirmation of Steven J. Baum, Esq., affirmed “under the penalties of perjury.” Mr. Baum states, in ¶ 3, that “My firm does not represent HSBC . . . and MERS simultaneously in the instant action.” Then, apparently overlooking that the subject notice of pendency, summons, complaint and instant motion, which all clearly state that Steven J. Baum, P.C. is the attorney for plaintiff HSBC, Mr. Baum states, in ¶ 4 of his affirmation, that “My firm is the attorney of record for Wells Fargo Bank, N.A., d/b/a America’s Servicing Company, attorney in fact for HSBC Bank USA, N.A., as Trustee for Nomura Asset-Backed Certificate Series 2006-AF1. My firm does not represent . . . [MERS] as an attorney in this action.” In the mortgage world according to Steven J. Baum, Esq., there is a fine line between acting as an attorney for MERS and as a vendor for a MERS member. If Mr. Baum is not HSBC’s attorney, but the attorney for WELLS FARGO, why did he mislead the Court and defendants by stating on all the documents filed and served in the instant action that he is plaintiff’s attorney for HSBC? Further, in ¶ 6 of his affirmation, he states “Nowhere does the Resolution indicate that Ms. Gazzo, or my firm, or any attorney or employee of my firm, shall act as an attorney for MERS. As such I am unaware of any conflict of interest of Steven J. Baum, P.C. or any of its employees, in this action.” While Mr. Baum claims to be unaware of the inherent conflict of interest, the Court is aware of the conflict. ¶ 3 of the MERS “Agreement for Signing Authority,” cited above, states that “in order for Vendor [Baum] to perform its contractual duties to Member [WELLS FARGO], MERS, by corporate resolution, will grant employees of Vendor [Baum] the limited authority to act on behalf of MERS to perform certain duties. Such authority is set forth in the Resolution, which is made a part of this Agreement.” As the Court continues through the MERS mortgage twilight zone, attached to exhibit F is the June 30, 2009-affidavit of MERS’ Secretary, William C. Hultman. Mr. Hultman claims, in ¶ 3, that Steven J. Baum, P.C. is not acting in the instant action as attorney for MERS and, in ¶ 4, Ms. Gazzo in her capacity as an officer of MERS executed the September 10, 2007 subject assignment “to foreclose on a mortgage loan registered on the MERS System that is being serviced by Wells Fargo Bank, N.A.” Thus, Mr. Hultman perceives that mortgages registered on the MERS system exist in a parallel universe to those recorded with the City Register of the City of New York. While Mr. Hultman waives, in ¶ 9, any conflict that might exist by Steven J. Baum, P.C. in the instant action, neither he nor Mr. Baum address whether MERS, pursuant to 22 NYCRR § 1200.24, consented to simultaneous representation in the instant action, with “full disclosure of the implications of the simultaneous representation and the advantages and risks involved” explained to MERS. Then, attached to exhibit F, there is the June 11, 2008-affidavit of China Brown, Vice President Loan Documentation of WELLS FARGO. This document continues the Court’s trip into “a wondrous land of imagination.” Despite the affidavit’s caption stating that HSBC is the plaintiff, Mr. or Ms. Brown (the notary public’s jurat refers several times to China Brown as “he/she”), states, in ¶ 4, that “Steven J. Baum, P.C. represents us as an attorney of record in this action.” The Court infers that “us” is WELLS FARGO. Moving to the third issue that plaintiff was required to address in the instant motion, compliance with the statutory requirements of CPLR § 3215 (f) with an affidavit of facts executed by someone with authority to execute such an affidavit, plaintiff’s instant motion contains an affidavit of merit, attached as exhibit C, by Kim Miller, “Vice President of Wells Fargo Bank, N.A. as Attorney in Fact for HSBC,” executed on December 8, 2008, 220 days after my May 2, 2008 decision and order. The affidavit of merit is almost six months late. Again, plaintiff attached a photocopy of the July 19, 2004 “Limited Power of Attorney” from HSBC [exhibit D], which appointed WELLS FARGO as its attorney-in-fact to perform various enumerated services, by executing documents “if such documents are required or permitted under the terms of the related servicing agreements . . . in connection with Wells Fargo[‘s] . . . responsibilities to service certain mortgage loans . . . held by HSBC . . . as Trustee of various trusts.” Further, the “Limited Power of Attorney” fails to list any of these “certain mortgage loans.” Therefore, the Court is unable to determine if the subject mortgage loan is one of the mortgage loans that WELLS FARGO services for HSBC. The “Limited Power of attorney” gives WELLS FARGO the right to execute foreclosure documents “if such documents are required or permitted under the terms of the related servicing agreements.” Instead of presenting the Court with the “related servicing agreement” for review, plaintiff’s counsel submits copies of the cover page and redacted pages 102, 104 and 105 of the October 1, 2006 Pooling and Servicing Agreement between WELLS FARGO, as Master Servicer, HSBC, as Trustee, and other entities. This is in direct contravention of the Court’s May 2, 2008-directive to plaintiff HSBC that it provides the Court with the entire pooling and servicing agreement upon renewal of the instant motion. Thomas Westmoreland, Vice President Loan Documentation of HSBC, in ¶ 10 of his attached June 13, 2008-affidavit, also in exhibit F, claims that the snippets of the pooling and servicing agreement provided to the Court are “a copy of the non-proprietary portions of the Pooling and Servicing Agreement that was entered into when the pool of loans that contained the subject mortgage was purchased.” The Court cannot believe that there is any proprietary or trade secret information in a boilerplate pooling and servicing agreement. If plaintiff HSBC utilizes an affidavit of facts by a loan servicer, not an HSBC officer, to secure a judgment on default, pursuant to CPLR § 3215 (f), then the Court needs to examine the entire pooling and servicing agreement, whether proprietary or non-p

roprietary, to determine if the pooling and servicing agreement grants authority, pursuant to a power of attorney, to the affiant to execute the affidavit of facts.

Further, there is hope that Mr. Westmoreland, unlike Steven J. Baum, Esq., is not in another dimension. Mr. Westmoreland, in ¶ 1 of his affidavit, admits that HSBC is the plaintiff in this action. However, with respect to why plaintiff HSBC purchased the subject nonperforming loan, Mr. Westmoreland admits to a lack of due diligence by plaintiff HSBC. His admissions are straight from the mortgage twilight zone. He states in his affidavit, in ¶’s 4-7 and part of ¶ 10: 4. The secondary mortgage market is, essentially, the buying and selling of “pools” of mortgages. 5. A mortgage pools is the packaging of numerous mortgage loans together so that an investor may purchase a significant number of loans in one transaction. 6. An investigation of each and every loan included in a particular mortgage pool, however, is not conducted, nor is it feasible. 7. Rather, the fact that a particular mortgage pool may include loans that are already in default is an ordinary risk of participating in the secondary market . . . 10. . . . Indeed, the performance of the mortgage pool is the measure of success, not any one individual loan contained therein. [Emphasis added] The Court can only wonder if this journey through the mortgage twilight zone and the dissemination of this decision will result in Mr. Westmoreland’s affidavit used as evidence in future stockholder derivative actions against plaintiff HSBC. It can’t be comforting to investors to know that an officer of a financial behemoth such as plaintiff HSBC admits that “[a]n investigation of each and every loan included in a particular mortgage pool, however, is not conducted, nor is it feasible” and that “the fact that a particular mortgage pool may include loans that are already in default is an ordinary risk of participating in the secondary market.”

Cancelling of notice of pendency

The dismissal with prejudice of the instant foreclosure action requires the cancellation of the notice of pendency. CPLR § 6501 provides that the filing of a notice of pendency against a property is to give constructive notice to any purchaser of real property or encumbrancer against real property of an action that “would affect the title to, or the possession, use or enjoyment of real property, except in a summary proceeding brought to recover the possession of real property.” The Court of Appeals, in 5308 Realty Corp. v O & Y Equity Corp. (64 NY2d 313, 319 [1984]), commented that “[t]he purpose of the doctrine was to assure that a court retained its ability to effect justice by preserving its power over the property, regardless of whether a purchaser had any notice of the pending suit,” and, at 320, that “the statutory scheme permits a party to effectively retard the alienability of real property without any prior judicial review.” CPLR § 6514 (a) provides for the mandatory cancellation of a notice of pendency by: The Court, upon motion of any person aggrieved and upon such notice as it may require, shall direct any county clerk to cancel a notice of pendency, if service of a summons has not been completed within the time limited by section 6512; or if the action has beensettled, discontinued or abated; or if the time to appeal from a final judgment against the plaintiff has expired; or if enforcement of a final judgment against the plaintiff has not been stayed pursuant to section 551. [emphasis added] The plain meaning of the word “abated,” as used in CPLR § 6514 (a) is the ending of an action. “Abatement” is defined (Black’s Law Dictionary 3 [7th ed 1999]) as “the act of eliminating or nullifying.” “An action which has been abated is dead, and any further enforcement of the cause of action requires the bringing of a new action, provided that a cause of action remains (2A Carmody-Wait 2d § 11.1).” (Nastasi v Natassi, 26 AD3d 32, 40 [2d Dept 2005]). Further, Nastasi at 36, held that the “[c]ancellation of a notice of pendency can be granted in the exercise of the inherent power of the court where its filing fails to comply with CPLR § 6501 (see 5303 Realty Corp. v O & Y Equity Corp., supra at 320-321; Rose v Montt Assets, 250 AD2d 451, 451-452 [1d Dept 1998]; Siegel, NY Prac § 336 [4th ed]).” Thus, the dismissal of the instant complaint must result in the mandatory cancellation of plaintiff HSBC’s notice of pendency against the property “in the exercise of the inherent power of the court.”

Conclusion

Accordingly, it is ORDERED, that the renewed motion of plaintiff, HSBC BANK USA, N.A. AS TRUSTEE FOR NOMURA ASSET-BACKED CERTIFICATE SERIES 2006-AF1, for an order of reference, for the premises located at 22 Jefferson Street, Brooklyn, New York (Block 3170, Lot 20, County of Kings), is denied with prejudice; and it is further

ORDERED, that the instant action, Index Number 34142/07, is dismissed with prejudice; and it is further

ORDERED that the Notice of Pendency in this action, filed with the Kings County Clerk on September 10, 2007, by plaintiff, HSBC BANK USA, N.A. AS TRUSTEE FOR NOMURA ASSET-BACKED CERTIFICATE SERIES 2006-AF1, to foreclose a mortgage for real property located at 22 Jefferson Street, Brooklyn New York (Block 3170, Lot 20, County of Kings), is cancelled.

This constitutes the Decision and Order of the Court.

You should see these bird houses Mr. Geeai is building.   They really are fun.  He took me into his shop to show off his work.  Lined up on his workbench were a series of seven birdhouses in various stages of construction.  My favourite  looks rather like the sorting hat from Hogwarts only it is covered in beehive paper.   Only from Mr. Geeai.

After the appropriate ooh’s and ah’s  on my part (genuine,  I assure you, for I do enjoy his work) he looked up at me and grinned.  “Guess what?”

“What?” I ask.

“I checked all eight of my houses on MERS’s own website and I don’t have MERS on any of my mortgages.”  He seemed rather pleased with himself.

Something didn’t sit right with this news.  You see,  there are 60MM+ mortgages on the MERS system.  Countrywide was one of the worst offenders of the MERS system and Countrywide did bang up business in this area during the hay days.    I could see not having one house with MERS on the mortgage,  but all eight?  Something just didn’t add up.   I’m no statistician,  but I took enough of it in college to know that there was just something wrong with this information.

“Mr. Geeai”,  I said.  “Something is just not right here.”

“Hey,  I did what you said,  I checked with the website and it showed no records on my name and addresses.”

I explained to him the idea of statistical abnormalities and why it didn’t make sense that all of his houses should not be in the system.  Then I asked him if I could take his tax information,  go to the courthouse and do a little title search of my own on his behalf.  I knew he wouldn’t,  and I knew something was wrong.  He heartily agreed with this idea and  was well pleased he was going to get the information without having to deal with the courthouse.  So he gave me the information on his eight houses and I left.

As work was awaiting me,  piling up,  actually,  I wasn’t able to get to the courthouse until later that afternoon.  I finally got to the recorder’s office about 4:30.  I had to get help finding what I was looking for and I ran out of time before I was  able to look up all eight properties.    MERS was on four out of the four I was able to find before I was kicked out.

I stopped by Mr. Geeai’s house on the way home and found him happily ensconced in his workshop playing with his birdhouses.  I waved the printouts at him and said “Guess what?  You have MERS on every mortgage I was able to find.  Four out of four.    I would have gotten the others but before I was able to get to them,  the nice lady came into the room to tell me that while I didn’t have to go home,  I couldn’t stay there.”

Mr. Geeai put down his paper mache goo,  wiped his hands,  looked over his glasses at me and said,  “what do you mean?  Let me see those”

So I showed him the printouts and where the Mortgage Identification Numbers (MIN) was.

“Those numbers right there means you have MERS on your mortgage.”

Mr. Geeai was not pleased with the information.  “Now what do I do?”  he asked?

“Now”,  I said,  “you have a choice.  You can choose to do nothing with the full knowledge that you are buying into a fraud,  or,  you can take action to make sure that you aren’t.”

“What do I do?”

“Well,  the first thing you should do is file a request to your service provider in accordance with 15 USC whatever it is asking them to provide you with the name and contact information of the person or entity who holds the beneficial interest in your mortgage.  When they blow you off,  which they probably will,  you file it a second time.  When they blow you off the second time,  you hire an attorney and tell them you want to file a chain of title action to make sure your title is clear.”

He looked at me for a few moments.  I could tell his mind was ticking as he weighed information and possible consequences of various courses of action.  “What’s up?  I asked.

He shook his head.  “I don’t like it,”  he said.

“What don’t you like?”

He sighed,  pulled his glasses from his nose and looked at me for about 10 seconds.   “There are several things I don’t like,”  he finally began.  “I don’t like having to hire a lawyer,  I don’t like having to take action,  and I feel ….  weird about going down this road because from what you are telling me,  if I am successful,  I end up with my house and no mortgage.  I feel weird about that because I did borrow the money and if you borrow the money,  you are obligated to pay it back.  And I worry that if I take action,  they will foreclose on me while I go through it and I have too much to lose to risk that.”

“Well,”  I began,  “let’s look at this.  Do you see the danger of having MERS on your mortgage?”

He nodded.

“Do you understand that if they are not able to show a clear chain of title and you take no action,  you will never see clear title to your houses or worse,  that you may believe your house is paid off only to have someone show up years later claiming to have a valid assignment trying to force you to pay a second time?”

“Yes”

“And do you see that if that last part happens you will have to hire an attorney to figure a way out of it 20 years down the road?”

“Yes”

“I understand your fear,”  I said.  “But there is a way you can do away with the issue of foreclosure while you are in this lawsuit,  assuming it goes there.  There is a thing called an interpleader action which is where you pay the money to the court while the action is pending.  The court then demands your mortgage service provider not do anything until the suit is resolved.  The service provider is secure because all of your mortgage payments are going to the court.  You won’t have to pay any penalties,  that whole issue goes away.  Do you understand that?”

“Yes”

“As far as hiring a lawyer,  let me ask you something.  Supposing you spend $10K on attorney fees only to end up owning  several hundred thousand dollars worth of property free and clear.  Is that a good business decision?”

Long pause,  “yes.  But I feel weird.”

“Why do you feel weird,  Mr Geeai?”

“I borrowed the money,  I made an agreement.”

“But they are stealing from you.”

“Yes”.

“Mr. Geeai,  I understand your reluctance to pursue this because you feel you are getting something for nothing.  But I ask you,  what is the greater moral hazard,  you supporting the fraud or you calling a stop to it even though  in the process you come out ahead?  And let me ask you another question;  we talked last week about how dangerous it is to have a second,  very private database where the chain of title is hidden from view,  where there is no public,  transparent record of just who owns what.  What is the greater moral hazard?  Letting them get away with stealing all of this property AND controlling critical information with absolutely no oversight,  or you coming out ahead because you stopped them from stealing your property from you and putting you at risk from their bogus data?”

Mr. Geeai did not respond.  He just looked at me.  And then he looked at the papers I had handed him.

“And let me point out to you Mr.  Geeai,  they lied to you.  You went to the MERS website and they told you that you didn’t have anything to worry about.  They told you that their private database which they control absolutely was correct,  that you did not have MERS on your mortgage,  that you had nothing to worry about.  They told you everything was fine.  I went to the courthouse,  which is the only database that matters,  and looked.  They lied to you.  You do have MERS on your mortgage.”

Mr. Geeai just looked at me.

I looked at my watch.  “My goodness,  will you look at the time.  I have to go home and prepare dinner for the little ones.”

I started to leave.  “I hate you”  he called out in a friendly voice as I let myself through his back gate.

“I know,”  I called back.

“I don’t want to deal with this.  I just want to play with my birdhouses.”

“I know Mr. Geeai.  But while you are playing with your birdhouses,  they are playing with your real houses.”

I’ll let you know what happens.

Source: Chink In The Armor

I was told “I haven’t seen anything yet” stay tuned folks this is going to get interesting!

Monday, May 17, 2010, 1:50pm EDT  |  Modified: Monday, May 17, 2010, 1:51pm

Jacksonville Business Journal – by Christian Conte Staff Writer

The Florida Attorney General’s Office has launched a civil investigation similar to one launched by a Florida U.S. Attorney’s Office against Fidelity National Financial Inc. and Lender Processing Services Inc., along with an LPS subsidiary, relating to possible forged documents in foreclosure cases.

According to the Attorney General’s website, DOCX LLC, based in Alpharetta, Ga., “seems to be creating and manufacturing ‘bogus assignments’ of mortgage in order that foreclosures may go through more quickly and efficiently. These documents appear to be forged, incorrectly and illegally executed, false and misleading. These documents are used in court cases as ‘real’ documents of assignment and presented to the court as so, when it actually appears that they are fabricated in order to meet the documentation to foreclosure according to law.”

The Attorney General’s Economic Crimes Division in Fort Lauderdale is handling the case.

Fidelity National Financial (NYSE: FNF), based in Jacksonville, provides title insurance, specialty insurance, claims management services and information services. Lender Processing Services (NYSE: LPS), also based in Jacksonville, provides mortgage processing services, settlement services, mortgage performance analytics and default solutions.

Fidelity National acquired DOCX, which processes and files lien releases and mortgage assignments for lenders, in 2005.

The U.S. Attorney’s office launched its investigation of DOCX in February.

LPS stated in its 2009 annual report that there was a “business process that caused an error in the notarization” of mortgage documents, some in the foreclosure proceedings in “various jurisdictions around the country,” according to a filing with the U.S. Securities and Exchange Commission.

While the company said it fixed the problem, the annual report stated it spurred an inquiry by the Clerk of Superior Court in Fulton County, Ga., and most recently, LPS was notified by the U.S. Attorney’s Office for the Middle District of Florida, based in Tampa, that it is also investigating the “business processes” of DOCX.

cconte@bizjournals.com | 265-2227
Read more: Florida AG investigating LPS subsidiary – Jacksonville Business Journal:

RELATED STORY: MISSION: VOID LENDER PROCESSING SERVICES “ASSIGNMENTS”

PICKET…anyone??

Posted by Harriet Brackey on April 30, 2010 10:46 AM SunSentinel

If you want to speak to Florida’s Attorney General about foreclosure or loan modifications or mortgage fraud, here’s your chance.

Saturday, May 8, in Miami, Attorney General Bill McCollum will be on hand for a Mortgage Fraud Community Forum. He’s hosting the event with Florida’s Interagency Mortgage Task Force.

The session is on “The Housing Crisis, Who to Trust and Where to Turn.”

It’s open to the public and free, but reservations are required. Call 877-385-1621.
It will be held from 10 a.m. to 4 p.m. at Miami Dade College, Wolfson Campus, Chapman Conference Center, 300 N.E. Second Ave.

The AG’s office says you can get help on how to face foreclosure, housing scams, mortgage fraud, loan modifications and finding legal assistance.

Certified housing counselors, volunteer lawyers, as well as representatives of Bank of America, JP Morgan Chase, Wells Fargo/Wachovia and SunTrust will be on hand.

Also attending will be representatives of:
Florida Department of Law Enforcement, Office of Financial Regulation, Department of Business and Professional Regulation, Florida Bar, Dade County Bar Legal Aid Society, Cuban American Bar and the Collins Center Foreclosure Mediation Program.

For more information, go to www.myfloridalegal.com/mortgagefraud.

Again…AMIR…SETS IT OFF!!

April 29, 2010, 12:46 PM ET

By Amir Efrati The Wall Street Journal

These are precarious times for lawyers in the business of filing foreclosure cases for banks. This is particularly true in one of the epicenters of the foreclosure crisis, Florida.

As we’ve noted before, the feds in Jacksonville recently started a criminal investigation of a company that is a top provider of the documentation used by banks in the foreclosure process. And a state-court judge ruled that a bank submitted a “fraudulent” document in support of its foreclosure case. That document was prepared by a local law firm.

For more Law Blog background on the foreclosure mess in our nation’s courts, this post will help.

The news today: the Florida Attorney General’s office said it has launched a civil investigation of Florida Default Law Group, based in Tampa, which is one of the largest so-called foreclosure-mill law firms in the state.

According to the AG’s website, it’s looking at whether the firm is “fabricating and/or presenting false and misleading documents in foreclosure cases.” It added: “These documents have been presented in court before judges as actual assignments of mortgages and have later been shown to be legally inadequate and/or insufficient.”

The issue: judges are increasingly running into situations in which banks are claiming ownership of properties they actually don’t own. Some of them end up chewing out the lawyers representing the banks.

The AG’s office said Florida Default Law Group appears to work closely with Lender Processing Services — the company we referenced earlier that is being investigated by the Justice Department.

LPS processes and sometimes produces documents needed by banks to prove they own the mortgages. LPS often works with local lawyers who litigate the foreclosure cases in court. Sometimes those same law firms produce documents that are required to prove ownership.

We’ve reached out to Florida Default Law Group and LPS and will let you know if we hear back.

UPDATE: Cannot confirm YET but others might be as well! Stay Tuned!

FDLG, LPS’ DocX is being investigated…lets see who’s next!

If you have evidence of Fraud make sure you contact them.

Active Public Consumer-Related Investigation

MISSION: VOID Lender Processing Services “Assignments” (LPS)

Dear Mr. Jadlos,

Exactly who is gaming what sir? Please see this post and lets call it BULLSHIT! 

Foreclosure Backlog Helps Troubled Borrowers

21 April 2010 @ 03:03 pm EDT

An estimated 1.4 million borrowers have failed to pay their mortgages in more than a year, but continue to live in the properties, according to Lender Processing Services, which tracks mortgages on 40 million homes.

Under the new government regulations, it takes banks 14 months to evict nonpaying borrowers – longer in some states. “Many of these people are gaming the system,” said Ted Jadlos, a managing director at Lender Processing.

Also, banks aren’t in a hurry because once they take possession of a property they must write down its value to reflect market price. Plus, unoccupied homes are more likely to fall into disrepair or be vandalized.

Some analysts predict that this shadow inventory will cause prices to slide further, but so far it’s not happening.

Reprinted from REALTOR® Magazine Online with permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright

Before the great article AMIR EFRATI and CARRICK MOLLENKAMP wrote in The Wall Street Journal called U.S. Probes Foreclosure-Data Provider:Lender Processing Services Unit Draws Inquiry Over the Steps That Led to Faulty Bank Paperwork and then my post LENDER PROCESSING SERVICES (LPS) Hits Local NEWS!, many recall the BOGUS ASSIGNMENTS 2…I’m LOVING this!! LPS DOCx ADMISSIONS SEC 10K ROOFTOP SHOUT OUT! &  BOGUS ASSIGNMENTS 3…Forgery, Counterfeit, Fraud …Oh MY! posts.

Lynn Szymoniak, ESQ. of Fraud Digest precise skills unraveling this massive scheme has placed spot lights and raised many eyebrows on Foreclosure Mill’s strategies and what they are fabricating with the help of LPS on the courts. One can read EXTRA! EXTRA! Read All about the misconduct of Lender Processing Services f/k/a FIDELITY a/k/a LPS and Fidelity’s LPS Secret Deals With Mortgage Companies and Law Firms to witness some cases of alleging fraud.

Lynn recently wrote an Open Letter to Honorable Judges in Foreclosure and Bankruptcy Proceedings.

Lender Processing Inc. is the TIP of The Pyramid; please click the link to see their admission to this whole scheme of fraud in question. As it turns out Big Brother has been watching! Anyone want shares NOW?? Goldman had met with LPS on 2/23 in a GS’s Tecnology and Internet Confrence Presentation. In turn of events following the Wall Street Journal story and amongst many other media articles displaying LPS’s on-going investigations, Brian Chip’s article on SmarTrend identified a Downtrend for Lender Processing Services (NYSE: LPS) on March 31, 2010 at $38.26 stating “In approximately 2 weeks, Lender Processing Services has returned 3.3% as of today’s recent price of $36.99. Lender Processing Services is currently below its 50-day moving average of $38.94 and below its 200-day moving average of $37.98. Look for these moving averages to decline to confirm the company’s downward momentum”. Then two days later LPS (NYSE: LPS) climbed 1.16% to $37.42 after Goldman Sachs upgraded the company’s share from Neutral to Buy with an one year price target of $48. How lucky right? So I guess GS has every right to upgrade LPS since their last meeting with them on possible involvement. But the world is now well aware of GS’s shenanigans thanks to LOUISE STORY and GRETCHEN MORGENSON’s article in the New York Times U.S. Accuses Goldman Sachs of Fraud: THE NEW YORK TIMES, According to the complaint, Goldman created Abacus 2007-AC1 in February 2007, at the request of John A. Paulson, a prominent hedge fund manager who earned an estimated $3.7 billion in 2007 by correctly wagering that the housing bubble would burst. Should we put any vailidity into their ratings or upgrades? NOT!

The good thing that came along the 10’s of thousands of visits within the last month, this blog has been used in several court houses.

CHEER UP, ONWARD!

Joining efforts along with 4closurefraud’s beautifully WRITTEN IN WEASEL, SO GET OUT YOUR DICTIONARY OF WEASELEASE – FNF, FIS, DOCX, LPS and ForeclosureHamlet’s amazing article Stopping A Defective Title Wave With A Coupla Outstretched Helping Hands. They have knocked on doors, got media attention and ran with Homeowners and Attorneys Meet in Tallahassee To Celebrate Homeowner Rights And The Rule of Law with the help of attorney’s Matthew Weidner, Thomas Ice and others!

Today I am happy to say progress is in the making!

Please pass out the samples of these video’s below…

We are being heard LOUD & CLEAR!

Actual Court Filings throughout the nation of BOGUS Filings Below!

[youtube=http://www.youtube.com/watch?v=3tL8mNL4bYw]

[youtube=http://www.youtube.com/watch?v=hY4aRn6bWKg&hl=en_US&fs=1&]
[youtube=http://www.youtube.com/watch?v=hn-5KN_vvMw&hl=en_US&fs=1&]

[youtube=http://www.youtube.com/watch?v=LoSPTjd_PXM]
[youtube=http://www.youtube.com/watch?v=SD6XUboT1JM&hl=en_US&fs=1&]

[youtube=http://www.youtube.com/watch?v=kkMeuSB68E4&hl=en_US&fs=1&]

STOP THESE UNLAWFUL FORECLOSURES FROM CONTINUING ASAP.

SEND THIS TO EVERYONE YOU KNOW!

DON’T QUIT!

Posted Apr 20, 2010 11:59 AM CDT
By Martha Neil

The Law Offices of David J. Stern has only about 15 attorneys, according to legal directories.

However, it’s the biggest filer of mortgage foreclosure suits in Florida, reports the Tampa Tribune. Aided by a back office that dwarfs the law firm, with a staff of nearly 1,000, the Miami area firm files some 5,800 foreclosure actions monthly.

The back-office operation, DJSP Enterprises, is publicly traded and hence must file financial reports with the Securities and Exchange Commission. It netted almost $45 million in 2009 on a little over $260 million in gross revenue that year. The mortgage meltdown of recent years apparently has been good to the company: In 2006, it earned a profit of $8.6 million on $40.4 million in revenue.

Stern, who is the company’s chairman and chief executive officer, could not be reached for comment, the newspaper says.

His law firm has been in the news lately, after one Florida judge dismissed a foreclosure case due to what he described as a “fraudulently backdated” mortgage document, and another said, in a hearing earlier this month concerning another of the Stern firm’s foreclosure cases, “I don’t have any confidence that any of the documents the court’s receiving on these mass foreclosures are valid.”

Earlier coverage:

ABAJournal.com: “Judge Dismisses Mortgage Foreclosure Over ‘Fraudulently Backdated’ Doc”

LYNN E. SZYMONIAK, ESQ.

The Metropolitan, PH2-05 403

South Sapodilla Avenue

West Palm Beach, Florida 33401

April 19, 2010

In these foreclosure actions, DBNTC is usually acting as the trustee for a mortgagebacked securitized trust. This means that a securities company made a commodity out of approximately 5,000 mortgages that were bundled together. The notes in the trust have a face value of approximately $1.5 billion in each trust. Investors buy shares of these trusts. Deutsche Bank is the most common name in the business of being a Trustee for Mortgage-Backed trusts. Other banks very active in this role of Trustee include Wells Fargo, U.S. Bank, Citibank, Bank of New York, JP Morgan Chase and HSBC.

When each of these trusts was made, the securities company responsible for the securitization (often Financial Assets Securities Corporation in Greenwich, Connecticut) was supposed to have obtained mortgage assignments showing that the trust had acquired each mortgage and note from the previous owner, which was most often the original lender. The trust documents specify that the mortgages, notes and assignments in recordable from will have been obtained by the trust. Most mortgage-backed trusts included the following or equivalent language regarding Assignments:

Assignments of the Mortgage Loans to the Trustee (or its nominee) will not be recorded in any jurisdiction, but will be delivered to the Trustee in recordable form, so that they can be recorded in the event recordation is necessary in connection with the servicing of a Mortgage Loan.

Trustees take very few actions relating to the individual properties in the trust. Typically, the bank acting as a trustee for a mortgage-backed trust hires a mortgage servicing company to deal with issues involving the individual mortgages in the trust. The mortgage servicing companies in turn hire a “default management company” to foreclose when a homeowner defaults on payments on a loan that is part of the trust. Lender Processing Services in Jacksonville, Florida, is the largest mortgage default management company. Deutsche Bank National Trust Company uses several mortgage servicing companies, but most often uses American Home Mortgage Servicing, Inc. in Irving, Texas as its mortgage servicing company.

In tens of thousands of foreclosure cases filed by Deutsche Bank National Trust Company as trustee for a mortgage-backed trust, Deutsche Bank has not produced the mortgage, note or Assignment and instead has filed pleadings claiming that the original mortgage and note were inexplicably lost. In these cases, Deutsche Bank uses specially prepared Mortgage Assignments to show that they have the right to foreclose. These documents were often prepared by clerical employees of Docx, LLC, a subsidiary company of Lender Processing Services, the default management company. Hundreds of thousands of other Mortgage Assignments came from the LPS office in Dakota County, Minnesota. More recently, these documents were produced from the LPS offices in Jacksonville, Duval County, Florida. In thousands of other cases, LPS directs the law firms it hires to use the employees of the law firms to sign as officers of Mortgage Electronic Registration Systems to create the documents necessary for foreclosure

a) Mortgage Electronic Registration Services (MERS) is identified as the grantor and American Home Mortgage Servicing, Inc. is identified as the grantee; within days (or minutes), a second Assignment is filed, identifying American Home Mortgage Servicing, Inc. as the grantor and Deutsche Bank National Trust Company as trustee for the trust as the grantee;

b) a mortgage company no longer in existence is identified as the grantor and American Home Mortgage Servicing, Inc. is identified as the grantee; within days (or minutes), a second Assignment is filed, identifying American Home Mortgage Servicing, Inc. as the grantor and Deutsche Bank National Trust Company as trustee for the trust as the grantee;

c) a mortgage company no longer in existence is identified as the grantor and Deutsche Bank National Trust Company as trustee is identified as the grantee;

d) American Home Mortgage Servicing, Inc., purporting to be the “successor-in-interest” to Option One Mortgage Company, is identified as the grantor and Deutsche Bank National Trust Company as trustee is identified as the grantee;

e) Sand Canyon Corporation, formerly known as Option One Mortgage Company, is identified as the grantor and Deutsche Bank National Trust Company as trustee is identified as the grantee, with no further explanation of how both American Home Mortgage Servicing and Sand Canyon have authority to act for Option One Mortgage.

On several hundred thousand Assignments, the individuals signing as officers of the grantor were actually clerical employees of Lender Processing Services, the mortgage default management company hired by American Home Mortgage Servicing, Inc., working for the grantee – Deutsche Bank National Trust Company. On several hundred thousand Assignments, the very same individuals signed as officers of both the grantor and grantee.

In all of these hundreds of thousands of cases, no Assignment actually took place on the date stated and no consideration was paid by the grantee to the grantor despite the representations in the Assignments. Most significantly, no disclosure was ever made to the Court in the foreclosure or bankruptcy case or to the homeowners in default that the original Assignments to the Trust were never made – or were lost – or were defective and that the recently-filed Assignments were specially made to facilitate foreclosures years after the property was transferred to the trust.

An examination of the signatures on these Assignments shows that many are forgeries, with several different people signing the names Linda Green, Tywanna Thomas, Korell Harp, Jennifer Ohde, Linda Thoresen and many of the other names used on several million mortgage assignments, as I have reported in my article “Compare These Signatures.” Many of these same individuals use at least a dozen different job titles as I have reported in my article, “An Officer of Too Many Banks.” These articles are available at www.frauddigest.com.

A summary of my credentials can be found at www.szymoniakfirm.com.

Please do not hesitate to contact me for additional information.

Yours truly,

Lynn E. Szymoniak, Esq.

This article could also have been titled:

For a copy of the Exhibits referenced below, please contact szymoniak@mac.com.

Copies of Assignments from MERS to American Home Mortgage Servicing, Inc. are attached hereto as Exhibit 1.

Copies of Assignments from American Home Mortgage Servicing Inc. to Deutsche Bank as Trustee are attached as Exhibit 2.

Copies of Assignments from American Brokers Conduit, a mortgage company no longer in existence at the time the Assignments were made, to Deutsche Bank as trustee are attached as Exhibit 3.

Copies of other Assignments to Deutsche Bank as Trustee signed by employees of Lender Processing Services, working for the grantee Deutsche Bank, but signing on behalf of the grantor mortgage companies or banks, or MERS as nominee for the grantor mortgage companies or banks, are attached as Exhibit 4.

Copies of Assignments from American Home Mortgage Servicing, Inc. as the successorin-interest to Option One Mortgage as grantor and Deutsche Bank as Trustee as the grantee are attached as Exhibit 5.

Copies of Assignments from Sand Canyon, formerly known as Option One Mortgage as grantor and Deutsche Bank as Trustee as the grantee are attached as Exhibit 6.

Copies of Assignments signed by employees of law firms working for Lender Processing Services on behalf of American Home Mortgage Servicing, Inc. and ultimately for grantee Deutsche Bank, where such employees signed as officers of MERS as grantor are attached as Exhibit 7.

Copies of Assignments signed by employees of Lender Processing Services on behalf of grantors and notarized in Duval County, Florida for grantee Deutsche Bank, filed by law firms working for Deutsche Bank are attached as Exhibit 8.

[ipaper docId=30196520 access_key=key-207awt0wqnpqx442chjm height=600 width=600 /]

Anytime you have the word “FRAUD” involved in an on-going investigation, It makes you wonder when corps go at it together even more…click the links below to see what I mean.

Lender Processing Services, Inc. (NYSE: LPS) climbed 1.16% to $37.42 after Goldman Sachs upgraded the company’s share from Neutral to Buy with an one year price target of $48.

DOJ Probing Mortgage Data Processing Firms

The Department of Justice is conducting a nationwide probe of the company whose automated systems handle half the mortgages in the U.S., looking for evidence Lender Processing Services Inc. (LPS) has “improperly directed” the actions of lawyers in bankruptcy court.

The Jacksonville, Fla., company was spun out last year from Fidelity National Information Services Inc. (FIS), a financial technology giant that is also under scrutiny for its role in court actions, according to documents filed with the U.S. Bankruptcy Court in Philadelphia.

Although the companies say they are providers of electronic information services, the U.S. trustee believes LPS and Fidelity play a “much greater” role in court actions where thousands of homes are at risk of foreclosure, according to Bankruptcy Judge Diane Weiss Sigmund.

“The thoughtless mechanical employment of computer-driven models and communications to inexpensively traverse the path to foreclosure offends the integrity of our American bankruptcy system,” Sigmund wrote in a decision released Wednesday, April 15.

A spokeswoman for Fidelity did not respond to requests seeking comment on the investigation by the Office of the U.S. Trustee, an arm of the Department of Justice whose mission includes safeguarding the integrity of the bankruptcy courts.

Michelle Kersch, a spokeswoman for LPS, said the U.S. trustee has “advised outside counsel for LPS that it is seeking to better understand LPS’ role.” In an e-mail, Kersch pointed out that the judge held the lawyers, not LPS, responsible for the problems in the case before her.

The probe of the mortgage technology operation surfaced in a Philadelphia case after Sigmund started asking questions about the source of false court filings that came from HSBC Mortgage Corp. In pursuit of homeowners Niles and Angela Taylor, HSBC filed the wrong mortgage, gave incorrect payment amounts and claimed the Taylors had missed monthly payments. This “was simply not true,” Sigmund wrote in a 58-page decision.

Continue reading….HERE

RELATED STORIES:

EXTRA! EXTRA! Read All about the misconduct of Lender Processing Services f/k/a FIDELITY a/k/a LPS

U.S. Probing LPS Unit Docx LLC: Report REUTERS

All over the US there is mass title defects that have been created to our homes…we are being evicted and titles to our stolen homes are being fabricated by means of Forgery/FRAUD! If these homes have been stolen from us…we have the right to claim them back! Let the unsuspecting homeowner who buys your home that it was fraudulently taken from you! What happens when your car is stolen and reclaimed? It goes back to it’s owner!

Stop by, say hello to the new owner of your stolen home and welcome them to the bogus neighborhood! Oh make sure to show some hospitality and bring them a gift…Umm your Foreclosure Mill Docs!

[youtube=http://www.youtube.com/watch?v=zQ9p6ZFquNY]

Now you know when the Law Offices of David J. Stern reaches the Wall Street Journal, we certainly are getting our point A C R O S S! Thank You AMIR!

LAW APRIL 16, 2010, 11:20 P.M. ET

Judge Bashes Bank in Foreclosure Case

U.S. Accuses Goldman Sachs of Fraud

By LOUISE STORY and GRETCHEN MORGENSON “GOTTA LOVE THESE TWO FOR THEIR EXCELLENT WORK”

Published: April 16, 2010

Goldman Sachs, which emerged relatively unscathed from the financial crisis, was accused of securities fraud in a civil suit filed Friday by the Securities and Exchange Commission, which claims the bank created and sold a mortgage investment that was secretly devised to fail.

Lets not act surprised…GS is going to turn into Butta’ all the wealth created is/was all an illusion…I bet “oil” is next…watch!

This might be the key that opens up Pandora’s Little Big Box! “John Paulson”

APRIL 16, 2010, 11:26 A.M. ET

Stocks Fall, Treasurys, Dollar Rise, On SEC Goldman Charges

By Michael J. Casey Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)–Stocks fell and Treasurys rose as news of Securities and Exchange Commission charges against Goldman Sachs Group Inc. (GS) sparked a flight out of risky assets.

The SEC said Goldman Sachs failed to disclose to investors vital information about a synthetic collateralized debt obligation, or CDO, based on subprime mortgage-backed securities–in particular the role played by a major hedge fund that had bet against the CDO. Subprime CDOs were at the heart of the recent financial crisis.

In response, investors moved into safe haven assets and out of riskier securities, buying Treasurys and the dollar, while selling stocks and commodities.

“The revival of risk aversion has benefited traditional safe-haven assets, like the dollar and the Japanese yen,” said Omer Esiner, senior market analyst at Travelex Global Business Payments in Washington.

Noting that the complaint is focused on a specific incident, he said the broad flight out of risk appeared to be a “knee-jerk reaction.”

Golmdan stock was down 12.45% to $161.33 on the news. The Dow Jones Industrial Average was down 86 points at 11057, while the 10-year Treasury note was up 17/32 to yield 3.778%. Gold futures, which have tended to rise with commodities and other risk assets over the past year, were down 1.4%, according the most active June contract.

The euro plummeted to $1.3486 from $1.3577 late Thursday, according to EBS via CQG, while the dollar fell to Y92.11 from Y93.04.

“That word ‘fraud’ is the key. When you throw that word fraud in there, all bets are off then,” said Jay Suskind, senior vice president of Duncan-Williams.

-By Michael Casey; Dow Jones Newswires; 212-416-2209; michael.j.casey@dowjones.com

 (Bradley Davis and Kristina Peterson contributed to this report.)

Lets See if the END IS NEAR for these FRAUD MILLS!

THIS WAS MY CASE!!! SAME FRAUD MILL!!! SAME AS EVERYONE!!!

From 4closureFraud

Another Great Contribution by Matthew Weidner.

Search this blog and you will see that for months now I’ve been arguing that the “evidence” submitted by Plaintiffs in foreclosure cases does not even come close to meeting the legal and evidentiary requirements for courts to grant summary judgment.

After performing extensive legal research to confirm this hunch, I have drafted and filed detailed memoranda, supported by all available case law, that stands for the proposition that the practices used by virtually every foreclosure mill in the state do not provide the evidentiary basis for a court to grant summary judgment.

So why are courts across this state continuing to grant summary judgment?  There really is NO LEGAL BASIS TO SUPPORT THE GRANTING OF SUMMARY JUDGMENT IN THE VAST MAJORITY OF FORECLOSURE CASES CURRENTLY FILED IN COURTS ACROSS THIS STATE.

I attach here the most fantastic transcript of a hearing I’ve heard in a long time.  This transcript shows a couple things:

First, the judges in the Sixth Circuit of Florida really, really get it.

Second, this particular judge goes far and above to do his job and deliver real, hard, honest legal work.

Third, as I mentioned above…the current processes and procedures used by the foreclosure mills do not provide courts the evidentiary or legal basis required to grant summary judgment.

But now the big question that comes to mind….now that this judge gets it…and now that my memos and others like my friend and fellow Foreclosure Fighter Mike Wasylik are starting to leak out there…

What happens to all the hundreds of thousands of homes that have been foreclose on by improper evidence?

Some excerpts from the begging of the transcript… Be sure to read it in its entirety. It is an absolute must read…

Gmac Mortgage LLC

v

Debbie Visicaro, et al.

April 7, 2010

THE COURT: Okay, we are here today in GMAC v Visicaro. This is a motion for rehearing the previously drafted motion for summary judgement…

MR. WASYLIK: I am here for Defendants… We have submitted a fairly detailed brief…

THE COURT: What’s the Plaintiff’s position regarding the motion…

MR FRAISER: I object… You’ve considered all the evidence before when you entered the summary judgment back in January 2010. The opposing party then could not support their position on any genuine material facts. Right now, Your Honor, there are no convincing exigent, you know, circumstances being offered up at the time.

THE COURT: Did you not read the motion? It sounds liker you’re making a very generalized argument, and this is an, as I viewed it, extremely targeted motion which basically elaborates on the assertions that were raised at the time of the motion for summary judgment.

As I recall that, counsel appeared on behalf of his clients, I think it was by phone and made arguments that the Court really gave short shrift to it, did not review the case…

Since that time, the Court delved further into it…

I’ve had several events which have occurred in cases which cause the Court to have great concern about the validity of fillings in our mortgage foreclosure cases, and that precipitated my reevaluation of the evidentiary considerations.

I’ll give you an example of that. I have one case that was called up for summary judgment hearing, and I thought it was going to be the typical granted situation, and then a lawyer showed up for the defendant homeowner.

I was beginning to recite to the lawyer what I had typically recited, that there was no affidavit in opposition. And the lawyer said, “Well, I thought you might want to see this,” and handed me some documents which were from another file in our circuit, and it turned out, it was the same note and mortgage that was in a separate and independent file.

There was a different plaintiff pursuing a foreclosure proceeding on the same note and mortgage as the one that was being proceeded on. Both of the cases contained allegations in the original complaints that the separate plaintiffs were owners and holders of the note. Both of them had gone so far to have affidavits filed in support of a summary judgment whereby an individual represented to the court in the affidavit that the separate plaintiffs had possessed the note and had lost the note while it was in their possession.

Interestedly, both affidavits, although they were different plaintiffs, purported the same facts and they were executed by the same individual in alleged capacity as a director of two separate corporations, one of which was ultimately found to me to be an assignee of the original note…

So that really increased my interest in this subject matter, because

I really honestly don’t have any confidence that any of the documents the Courts are receiving on these mass foreclosures are valid…

So I’ve said enough…

Honorable
Anthony Rondolino

Be sure to read the transcript in its entirety below…

Judge reversed his own ruling that had granted summary judgment to GMAC Mortgage (DAVID J. STERN)

I have a feeling this is going to be the beginning to many reports on Local Media Outlets in time.

Legal Source:  http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=7072146-89320-93959&type=sect&TabIndex=2&companyid=774307&ppu=%252fdefault.aspx%253fcik%253d1429775

“LPS’ characterization of itself as a stranger to this bankruptcy case is unsupported by the evidence. There is a very live case or controversy concerning the conduct of Fidelity in this bankruptcy case.”

“Lawyers must not allow the interests or dictates of a client to control their professional judgment.”

Source: FRAUD DIGEST Lynn Szmoniak ESQ.

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