American Banker-

What do an insurance agent in Tennessee, a homemaker in Ohio, a private investigator from Wisconsin and a helicopter stunt pilot in Hollywood have in common?  Well, for one thing, they’ve all participated in some fashion in “Foreclosure Diaries,” the documentary that my company, Pacific Street Films, has been producing, in fits and starts, since 2006.

When work first started on the film, the original tag was “Follow the Money,” and the road seemed to lead towards a dark and confusing destination. There was all this talk in the industry about scads of money to be made in servicing “subprime” loans.  There were seminars, conferences, it seemed all the rage. 

[AMERICAN BANKER]

image: macgasm.net

via pacfilm

Segment from an actual call, recorded on October 20, 2008, between a homeowner and a lawyer, Heather Johnson, of the notorious foreclosure mill, Steven J Baum, representing Litton Loan Servicing. Mr.Christopher Wyatt, part of Litton’s “Executive Resolution Team,” begged out of the call when told it would be filmed an recorded. Loan modifications were offered on a take-it-or leave it basis; however requests for follow-up documentation were ignored. This same lawyer then signed off on a foreclosure, nearly ten months later, initiated by the trustee, Wells Fargo, on behalf of the securitized pool holding the homeowner’s mortgage. The “foreclosure mill” law firm, in this case, Steven J Baum, was specifically cited in a New York Times article about NY State Supreme Court Judge Arthur M Shack on August 31st, 2009, and has engendered criticism for its faulty filing practices. The firm has done extensive work for Litton Loan and its host of robo-signers, including Marti Noriega (who also does double duty for MERS). Hedge Fund Tailwind Capital has a hefty investment in this foreclosure mill. Guess they figured that throwing families out of their homes had a financial upside. Now, the Steven J Baum firm believes that any attempt to make them produce evidence is, simply, a “fishing expedition.” Why? Because actually producing evidence would be enough to get them and their clients thrown in the proverbial shitcan (judicial or otherwise). This call will become part of Pacific Street’s upcoming feature documentary, FORECLOSURE DIARIES.

via: Mario Kenny

Excerpts:

Q. Would Litton have reached out to — I’m going to
13 call it MERS in place of Mortgage Electronic
14 Registration Systems. Would Litton have reached out to
15 MERS to execute this assignment?
16 A. Actually, Marti Noriega and Denise Bailey are
17 employed by Litton Loan Servicing. They have authority
18 to sign on behalf of MERS.
19 Q. Does either of those parties have authority to
20 sign on behalf of Accredited Home Lenders?
21 A. No, not to my knowledge.
22 Q. Do you know if Accredited Home Lenders was still
23 in place on the date that this assignment of mortgage
24 was executed?

THE WITNESS: I’m not certain of Accredited
2 Home Lenders’ status at this time.
3 BY MR. KORTE:
4 Q. As of April of 2009, are you aware if Accredited
5 Home Lenders was in bankruptcy?
6 A. I don’t know what their status was.
7 Q. Are there any other assignments of mortgage other
8 than this one as Composite Exhibit C that you’re aware
9 of?
10 A. No.

<SNIP>

Q. Well, is this Allonge a copy of the Allonge; or
3 is this the original Allonge copied with the correct
4 endorsement?
5 A. The only way I could verify that is to see the
6 actual, original note which is on file with the court.
7 Q. Do you know why the Allonges are different from
8 the one that was filed with the complaint and the one
9 that was filed with the court several months later?
10 A. No, I do not.

Continue below to the Depo…

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False Statements

Bank of America
Florida Default Law Group
Law Offices of David Stern
Lender Processing Services
Litton Loan Servicing, LP
Cheryl Samons
Security Connections, Inc.

Action Date: October 10, 2010
Location: Charlotte, NC

On October 8, 2010, Bank of America announced it was extending its suspension of foreclosures to all 50 states. A review of the documents used by Bank of America to foreclose readily shows why this was the only appropriate action for Bank of America. In thousands of cases, Bank of America has used Mortgage Assignments specially prepared just for foreclosure litigation. On these assignments, the identity of the mortgage company officer assigning the mortgage to BOA is wrongly stated. Who has signed most frequently as mortgage officers on mortgage assignments used by BOA to foreclose? Regular signers include the “robo-signers” from Lender Processing Services in both Alpharetta, Georgia and Mendota Heights, Minnesota. LPS employees Liquenda Allotey, Greg Allen, John Cody and others, using dozens of different corporate titles, sign mortgage assignments stating BOA has acquired certain mortgages. When the mortgages involved originated from First Franklin Bank, BOA used Security Connections, Inc. in Idaho Falls, Idaho. Employees Melissa Hively, Vicki Sorg and Krystal Hall also signed for many different corporations for BOA. Litton Loan Servicing in Houston, Texas, a company owned by Goldman Sachs, also produced documents as needed by BOA, usually signed by Denise Bailey, Diane Dixon or Marti Noriega signing as officers of at least a dozen different mortgage companies and banks. BOA also has used mortgage assignments signed by Cheryl Samons, the office administrator for the Law Offices of David Stern, who has admitted to signing thousands of mortgage documents each month with no actual knowledge of the contents. On other cases, employees of the law firm Florida Default Law Group have signed for BOA, using various titles, including claiming to be Vice Presidents of Wells Fargo Bank, all while failing to disclose they actually worked for Florida Default. in most of these cases, BOA is acting as Trustee for residential mortgage-backed securitized trusts. These trusts are claiming to have acquired the mortgages in 2009 and 2010, even though the trusts deadline for acquiring mortgages was often in 2006 and 2007. In hundreds of cases, the mortgage assignments presented by BOA are actually signed months AFTER the foreclosure actions were commenced. At least 50 trusts using BOA as Trustee are involved in using these fraudulent documents. Each trust has between $1.5 billion and $2 billion of mortgages. The BOA documents have been used in thousands of cases, pending and completed, for at least three years. This massive problem cannot be “fixed” in 90 days, but a nationwide suspension of foreclosures is a good, responsible beginning.

IN THE UNITED STATES DISTRICT COURT
DISTRICT OF OREGON
PORTLAND DIVISION

NATACHE D. RINEGARD-GUIRMA, Civil Case No. 10-1065-PK

v.

BANK OF AMERICA, NATIONAL ASSOCIATION
AS SUCCESSOR BY MERGER TO LA SALLE BANK
NATIONAL ASSOCIATION, AS TRUSTEE UNDER
THE POOLING AND SERVICING AGREEMENT
DATED AS OF AUGUST 1, 2006, GSAMP TRUST
2006-HE5, MERS, LITTON LOAN SERVICING LP,
and the ORIGINAL AND PURPORTED SUCCESSOR
TRUSTEES, LSI TITLE COMPANY OF OREGON, LLC,
AND QUALITY LOAN SERVICING CORPORATION
OF WASHINGTON,

Excerpts:

On April 15, 2008, at 4:56 a.m., Marti Noriega, acting as Vice President for “Mortgage Electronic Registration Systems, Inc as nominee in favor of Mortgage Lenders Network USA, Inc.” signed an assignment of the Deed of Trust to LaSalle Bank National Association, as trustee under the Pooling and Servicing Agreement dated as of August 1, 2006, GSAMP Trust 2006-HE5 (“LaSalle Bank National Association”). The assignment was recorded on April 29, 2008. On April 21, 2008, LaSalle Bank National Association, acting through Litton Loan Servicing LP as attorney in fact, appointed LSI Title Company of Oregon, LLC as successor trustee.

The Court, however, is aware of contrary authority. In In re Allman, a case from the United
States Bankruptcy Court for the District of Oregon, the court described MERS as “more akin to that of a straw man than to a party possessing all the rights given a buyer.” Bankr. No. 08-31282-elp7, 2010 WL 3366405, at *10 (Bankr. D. Or. Aug. 24, 2010) (quoting Landmark Nat’l Bank, 289 Kan. at 539). The court considered the meaning of “beneficiary” under Oregon’s trust deed statute as “the person named or otherwise designated in a trust deed as the person for whose benefit the trust deed is given . . . .” ORS 86.705(1). The court then concluded, after examining language of the trust deed that is almost identical to the language contained in the Deed of Trust here, that MERS was not “in any real sense of the word, particularly as defined in ORS 86.705(1), the beneficiary of the trust deed.” Id. Instead, MERS was a nominee and the trust deed was for the benefit of the lender.

Additionally, other courts have held that MERS does not have authority to transfer the note,
even though it has authority to transfer the trust deed. Those courts have noted that when the note and deed of trust are split, the transfer of the deed of trust is ineffective. Bellistri v. Ocwen Loan Servicing, LLC, 284 S.W.3d 619, 623-24 (Mo. Ct. App. 2009) (in spite of deed language purporting to transfer the promissory note, MERS never held the note and the lender never gave

MERS the authority to transfer the note; thus MERS’ transfer of the deed of trust, separate from the note, was ineffective and the successor lender lacked a legally cognizable interest in the property); Saxon Mortg. Serv., Inc. v. Hillery, No. C-08-4357 EMC, 2008 WL 5170180, at *5 (N.D. Cal. Dec. 9, 2008) (same as Bellistri); In re Wilhelm, 407 B.R. 392 (Bankr. D. Idaho 2009) (successor lender had no standing to seek relief from bankruptcy stay and move forward with foreclosure because MERS had no authority to transfer the note).

Oregon cases support the notion that the security, here the Deed of Trust, is “merely an incident to the debt.” West v. White, 307 Or. 296, 300, 766 P.2d 383 (1988); see also U.S. Nat’l Bank of Portland v. Holton, 99 Or. 419, 428, 195 P. 823 (1921) (“The assignment of a mortgage, independent of the debt which it is given to secure, is an unmeaning ceremony.”). Federal courts are bound by pronouncements of the state’s highest court on applicable state law. If the state’s highest court has not decided an issue, and there is no relevant precedent from an intermediate appellate court, the federal court is to predict how the state high court would resolve it. “In assessing how a state’s highest court would resolve a state law question– absent controlling state authority–federal courts look to existing state law without predicting potential changes in that law.” Ticknor v. Choice Hotels International, Inc., 265 F.3d 931, 939 (9th Cir. 2001); see also Ryman v. Sears, Roebuck & Co., 505 F.3d 993, 994 (9th Cir. 2007).

Absent a decision from the Oregon Supreme Court or the Oregon Court of Appeals, and absent further briefing from the parties on this specific issue, I am at least initially persuaded that Rinegard-Guirma has a likelihood of success on the merits.

As for irreparable harm, loss of a home is a grievous injury.

[…]

CONCLUSION

For the foregoing reasons, Rinegard-Guirma’s Motion for a Temporary Restraining Order and Preliminary Injunction (#18) is GRANTED. The defendants are enjoined from foreclosing Rinegard-Guirma’s property described as: Lot 2, Block 16, Highland Park, in the City of Portland,County of Multnomah and State of Oregon, Assessor’s Parcel Number R180361, commonly known as 5731 NE 10th Ave., Portland, OR 97211 until the claims against MERS are resolved.

IT IS SO ORDERED.

Dated this 6th day of October, 2010.
/s/ Garr M. King
Garr M. King
United States District Judge

OREGON DISTRICT COURT ISSUES A TRO AGAINST MERS, BofA and LITTON

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