Archive | June, 2011

Javaheri v. JPMorgan Chase finally !!

23 Jun

From ChaseChase.org:

Federal District Court

Javaheri v. JPMorgan Chase, Case No. CV10-8185 ODW

Otis D. Wright II, Judge, U.S. District Court, Central District of California, Los Angeles
Douglas Gillies, attorney for Daryoush Javaheri

Plaintiff sued to halt a foreclosure initiated by JPMorgan Chase and California Reconveyance Co. Chase responded with a Motion to Dismiss. Two times the court granted Chase’s motion with leave to amend. Plaintiff filed a Second Amended Complaint and Chase again moved to dismiss.

In opposing the motion, Plaintiff requested that the court take judicial notice of:

(1) the Congressional Oversight Panel November Oversight Report (COP Report) released on November 16, 2010 – http://cop.senate.gov/documents/cop-111610-report.pdf

(2) Federal Reserve System Consent Order in the Matter of JPMORGAN CHASE & CO., Docket No. 11-023-B-HC and 11- 023-B-DEO, dated April 13, 2011 – www.federalreserve.gov/newsevents/press/enforcement/enf20110413a5.pdf

Judge Wright denied Chase’s motion to dismiss five causes of action – wrongful foreclosure, quiet title, violation of Cal Civ. Code Sec. 2923.5, quasi contract, and declaratory relief.

The Banksters will get you any way they can

21 Jun

By Niel Garfield

EDITOR’S NOTE AND COMMENT: LAWYERS BEWARE! Starting up an anti-foreclosure venture and making comments criticizing the system has reportedly caused some investigations to begin and may result in bar discipline for technical infractions. From what I can see, the Bar is focused on UPL — unauthorized practice of law. The use of non-licensed people to do either intakes or provide services COULD subject the lawyer to discipline, which the Banks would just love to see. Be careful how you structure and supervise your organization. If grievances pile up (which they will, because you can’t save everyone), the Bar will be at your door-step. Document everything you do and stay in constant contact in writing with each client.

Daily Business Review.com: Lawyers investigated for criticizing system

No attorneys are facing disciplinary charges for their work in foreclosure cases despite a firestorm of complaints about purported fraudulent court filings on behalf of lenders.

But two foreclosure defense attorneys have been actively investigated for publicly criticizing the gridlocked foreclosure process.

The Bar investigated Jacksonville attorney Chip Parker for telling CNN, “Foreclosure courts throughout the state of Florida have adopted a system of ramming foreclosure cases through the final judgments and sale — with very little regard to the rule of law.” He also said, “What I am seeing now is an attack upon the citizens of the state of Florida by retired judges.”

The Bar also is investigating Tampa lawyer Matthew Weidner for “exercising free speech in the courtroom” in violation of a Pinellas County ordinance. Weidner, a prominent foreclosure defense lawyer, runs a blog critical of the state’s foreclosure process and is frequently quoted in national publications.

The article then goes on to say this…

Parker learned he was under scrutiny in a letter from Bar counsel Shanell Schuyler last Dec. 3. The letter, obtained by the Review, includes a link to Parker’s CNN interview and advises him to explain his on-camera statements in writing by Dec. 20 in light of The Bar’s Rule of Professional Conduct 4-8.2 prohibiting lawyers from making false or reckless comments about court personnel.

“I was shocked,” Parker said. “I said, ‘This is a joke, right?’ I have a First Amendment right to free speech. I’ve said a lot worse and been more pointed in my speech in the past. CNN actually toned down my comments.”

Parker responded to The Bar by quoting Oliver Wendell Holmes Jr., the late associate justice of the U.S. Supreme Court, saying his criticism was “consistent with the great traditions of American lawyers.”

Parker said he hasn’t been told who filed the complaint due to confidentiality rules, but he heard it was an offended judge. He reached out to constitutional lawyer Talbot “Sandy” D’Alemberte, a former president of the American Bar Association and Florida State University, whom he had met at a recent dinner honoring Parker. D’Alemberte intervened at The Bar, and the case was dropped Jan. 13, 2011.

D’Alemberte also is helping Weidner at the request of the Florida Press Association and the First Amendment Foundation, which were contacted by Weidner. He declined comment on his pending investigation. But D’Alemberte said he believes the case also will be dropped.

You can check out the article in full here…
(Free registration required)

Unfortunately, these two “good guys” are not the only defense attorneys being investigated. I personally know of a few others that are being “probed” as well…

So there you have it folks. You stand up against the banksters and they come at you any way they can…

But, don’t forget, it’s okay to join a Foreclosure Mill if you are a chief judge….

Beware of foreclosure scams currently under investigation by the District Atorney

19 Jun

Each day I get calls from desperate people hoping against hope the there is a magic document that can be filed or recorded the will magically give them their home free and clear without recourse. I tell them if it sounds to good to be true it probably is. That’s not to say that I don’t agree with the position that the documents that now exist as to these securitized loans are not defective. I do believe that the real party in interest is not the one foreclosing. I also believe that the party who is out the money or the true lender has been paid with insurance (one such insurer was AIG), or is being paid under the pooling and servicing agreement, or has a guarantee from a bailout program. They are going to get paid and they are going to take the house based upon forged documents.

The homeowner is being told he doesn’t qualify for a principal reduction. That although they qualified for a $4,000.00 monthly payment when they got the loan now they do not qualify for a $2,400.00 payment.

The world is crazy right now. Take a look at what the Los Angeles County District Attorney’s Office is investigating now.

Los Angeles County District Attorney’s Office
Responses to Preventing Foreclosures
and Foreclosure Rescue Fraud

1. Types of Foreclosure Rescue Fraud Cases Being Investigated
• Home Equity Sales Contract Fraud: Suspects convince homeowners to grant title of the property to them and pay them rent. Suspects usually promise to return property back to the victims in a year or two when their credit is improved. Suspects either take out loans against the property or sell the property and pocket the equity.
•Mortgage Foreclosure Consultant Fraud: Suspect contacts homeowner whose home is in foreclosure and claims to be able to assist in delaying or preventing foreclosure by obtaining new financing. Suspect instructs homeowner to transfer title of property to an individual (suspect or suspect’s accomplice) who can qualify for new financing. Suspect obtains new loan including all equity. Usually within months, the homeowner receives a notice of default in the mail and the suspect has already absconded with sales proceeds.
•Bankruptcy Fraud: Suspects file fraudulent bankruptcy cases using a fictitious business and/or trust using fractionalized deeds. Homeowners pay a monthly fee to the suspects while foreclosure is being delayed because of the bankruptcy proceedings. When a fraudulent bankruptcy case is dismissed, suspects file another fraudulent bankruptcy case.
•Loan Modification Fraud: Suspects charge an upfront fee and/or monthly fees to negotiate with lenders on the behalf of the homeowners. Typically, they provide no service or minimal service and just take the money.
•Forged Reconveyance Fraud: Suspects file a forged reconveyance on a property, making it appear that the property is owned free and clear. Suspects encumber the property with a new loan and run off with the new loan proceeds.
•Rent Skimming: Trespassing on vacant property and renting to unsuspecting tenants.
2. How Are We Addressing the Crisis
•Cases are investigated where there are a significant number of victims and losses. Consideration to investigate a case is also based on the facts of a complaint submitted to our office for review.
• The Los Angeles County Real Estate Fraud Task Force meets monthly and shares
information on current trends and cases being investigated. The task force has
been in existence for approximately ten years. The task force is comprised of the
following agencies: Department of Real Estate, County Department of Consumer
Affairs, County Registrar Recorder, Los Angeles Police Department, Los Angeles
County Sheriff’s Department and County Assessor. Other law
enforcement/county agencies also attend the task force meetings.
• We coordinate with outside agencies to investigate cases that have multiple
victims in various jurisdictions.
3. Type of Scams
• Phony counseling: Scam artists convince homeowners that they can negotiate a
deal with lenders. Once they collect the fee, they take off.
• Rent-To-Buy Scam/Rent Skimming: Suspects convince homeowners to grant title
of the property to them and pay them rent. Suspects usually promise to return the
property back to the victims in a year or two when their credit is improved.
Suspects either take out loans against the property or sell the property and pocket
the equity. Suspects benefit from rent money and the equity they stole.
• Bankruptcy Foreclosure: Suspects file fraudulent bankruptcy cases using a
fictitious business and/or trust using fractionalized deeds. Sometimes scam artists
file bankruptcy in homeowners’ names – sometimes without their knowledge.
Often attorneys are involved in this scam.
4. Challenges
• Thousands of complaints are received throughout the county annually and due to
limited personnel (e.g. detectives, prosecutors, etc.) many cases are often not
investigated.
• Cases investigated are often complex and labor intensive.
• Many of the companies have gone out of business that have the records to prove
the crime (e.g. Title Company, Escrow Company, financial institution, etc.).
5. Tools or Resources Needed
•Additional investigators and prosecutors.
•Continue Community Outreach Programs to educate the public on what government programs are available to assist them.
•Enhance current statutes with greater punishment (longer prison sentences) and reconvey clear title through the criminal process thus returning the property to the original owner.
•Greater regulatory oversight and accountability over all of the players involved in all real estate transactions (e.g. Appraisers, loan brokers, title companies, etc.) .
•Improve the manner/verification in which records for recordation are accepted.
•Restrict access to real estate records by the general public (Need-to-Know/ Right-to-Know).

Current articles in foreclosure

18 Jun
AKRON, Ohio – The Cuyahoga County judge charged in the county corruption investigation for allegedly fixing a foreclosure case has been found guilty on three of the five charges he was facing. The federal jury returned the verdict against Judge Steven Terry shortly before 2 p.m. Monday in Akron. Terry, who was facing five […]
MOST POPULAR ARTICLES DISCOUNT FOR EARLY BIRD REGISTRATION RUNS OUT ON JUNE 22 CLICK HERE TO REGISTER FOR 2 DAY GARFIELD CONTINUUM CLE SEMINAR GET COMBO TITLE AND SECURITIZATION ANALYSIS – CLICK HERE FROM MARY COCHRANE: MANY THANKS FOR YOUR EXCELLENT WORK Do you know what ‘xxx’ your loan is inside of? Do you know […]
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  • MOST POPULAR ARTICLES GET COMBO TITLE AND SECURITIZATION ANALYSIS – CLICK HERE GET NEWSLETTER: FOR PASSWORD BECOME MEMBER AND LOOK AT YOUR EMAIL Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud Tagged: foreclosure, foreclosure defense, foreclosure offense, foreclosures, securitization, TILA audit
  • MOST POPULAR ARTICLES GET COMBO TITLE AND SECURITIZATION ANALYSIS – CLICK HERE — EVIDENCE COUNTS!!! click-here-to-register-for-seminar   WHY YOU NEED TO ATTEND GARFIELD CONTINUUM SEMINAR If you don’t understand why the bundling of mortgages at the level of the investment banks is important to your case(s) involving securitized mortgages, then you don’t “get it” yet. […]
  • MOST POPULAR ARTICLES GET COMBO TITLE AND SECURITIZATION ANALYSIS – CLICK HERE — EVIDENCE COUNTS!!! “the Court will not participate in a process where OneWest increases its profits by disobeying the rules of this Court and by providing the Court with erroneous information“ NEW NOTE GAMBIT ANGERS JUDGE EDITOR’S COMMENT: We’ve been watching this for […]
  • MOST POPULAR ARTICLES GET COMBO TITLE AND SECURITIZATION ANALYSIS – CLICK HERE — EVIDENCE COUNTS!!! NEIL GARFIELD, GARFIELD CONTINUUM SEMINARS, LIVINGLIES VINDICATED IN FULL NO MERIT TO FORECLOSURE ACTIONS, PAST PRESENT OR FUTURE UNLESS THE REAL CREDITOR IS PRESENT. BURDEN OF PROOF SHIFTS TO PRETENDERS 57568003-IN-RE-VEAL-w “IN THIS CASE, ONE COMPONENT OF PRUDENTIAL STANDING IS […]
  • MOST POPULAR ARTICLES GET COMBO TITLE AND SECURITIZATION ANALYSIS – CLICK HERE Dear Scott, and all ‘Consumers’ stop being bullied! Open up the windows and scream outside at the top of your lungs! Just like in the move was it in BROOKLYN? ‘I AM NOT GOING TO TAKE THIS ANYMORE”? Consumers are in danger of […]
  • MOST POPULAR ARTICLES GET COMBO TITLE AND SECURITIZATION ANALYSIS – CLICK HERE EDITOR’S NOTE: They report this like $20 billion is a big number. The Banks caused tens of trillions of dollars in damages, stole $13 trillion from investors, stole some $5 trillion worth of property from homeowners who legally still probably own the property […]
  • MOST POPULAR ARTICLES GET COMBO TITLE AND SECURITIZATION ANALYSIS – CLICK HERE — EVIDENCE COUNTS!!! The Uncertainty Tax By THOMAS L. FRIEDMAN If you want to understand why the unemployment rate has been stubbornly lodged around 9 percent, a good place to start is with the eye-popping mortgage statistics released last week by the economic […]
  • MOST POPULAR ARTICLES GET COMBO TITLE AND SECURITIZATION ANALYSIS – CLICK HERE ANOTHER LOSS FOR DEUTSCH BANK   Home sweet foreclosed home: Queens man returns to home after judge overrules bank’s foreclosure BY Robert Gearty DAILY NEWS STAFF WRITER Sunday, June 5th 2011, 4:00 AM Johnny Ferreira may be the luckiest guy in Queens. Ninety-nine […]
  • MOST POPULAR ARTICLES GET COMBO TITLE AND SECURITIZATION ANALYSIS – CLICK HERE EDITOR’S NOTE: It is this simple: Nobody wants modifications except homeowners. Everyone else profits from pretending to have a mortgage modification process and then foreclosing. It is the biggest land grab in history. Big Banks Penalized for Performance in Mortgage Modification Program By […]
  • Just Cause Eviction Ordinance Richmond City Council Passes Just Cause Eviction Ordinance Tenants protected from unfair evictions from foreclosed home “It’s unfair for a tenant in good standing to be thrown out of their home because of a foreclosure that they could not prevent.” -Richmond City Council member, Dr. Jeff Ritterman “We see tenants who […]
  • Do We Have a Fraud Problem? The Case of the Mysteriously Appearing Allonge posted by Adam Levitin I have generally been willing to give mortgage servicers, servicer support shops (like LPS), and foreclosure attorneys the benefit of the doubt when it comes to documentation irregularities (to put it mildly) in foreclosures. My working assumption up […]
  • 2924 unconstitutional Check out this pro per complaint they raise some interesting issues. PJATSI+Supplemental+Complaint+March+25+2011 Filed under: 2924, Foreclosure Tagged: 2924, civil code 2924, Foreclosure, foreclosure defense, foreclosure offense, foreclosures, lis pendence, litigation, unconstitutional
  • 20. TIME: 9:00 CASE#: MSC11-00162 CASE NAME: CHRISTINA PENNES vs. PNC MORTGAGE HEARING ON DEMURRER TO COMPLAINT of PENNES FILED BY PNC BANK, NATIONAL ASSOCIATION * TENTATIVE RULING: *   Defendant PNC Bank, N.A.’s Demurrer to each cause of action within the Complaint is sustained with leave to amend in part and without leave […]
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  • BOMBSHELL- ANOTHER 2ND DCA SMACKDOWN- KONSULIAN! June 1st, 2011 Paragraph 22 of almost every mortgage contains a provision that requires the plaintiff to provide notice and an opportunity to cure the default prior to foreclosure. The principle behind this paragraph and the right to cure is not just a helpful little piece for the defendant, […]
  • Posted on May 26, 2011 by Neil Garfield GET COMBO TITLE AND SECURITIZATION ANALYSIS – CLICK HERE EDITOR’S COMMENT: Here is our problem writ large. The commentary written by Shedlock (see below) is basically on the side of punishing the banks for their wrongdoing, but not giving any relief to borrowers. The logic behind the […]
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  • Res Judicata Effect of Prior UD Action – Issues of title are very rarely tried in an unlawful detainer action and moving party has failed to meet the burden of demonstrating that the title issue was fully and fairly adjudicated in the underlying unlawful detainer. Vella v. Hudgins, 20 Cal. 3d 251, 257 (1977). The […]
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– Cause of Action for Violation of Bus. & Prof. Code § 17200 – “The UCL does not proscribe specific activities, but broadly prohibits any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising. The UCL governs anti-competitive business practices as well as injuries to consumers, and has as […]
SEE LIVINGLIES LITIGATION SUPPORT AT LUMINAQ.COM EDITOR’S NOTE: Finding that lawyers and judges are confused about the meaning and use of terms like “real party in interest” and “standing,” it hardly comes as a surprise that pro se litigants and other homeowners are confused as well. These concepts, which have been used and abused for […]

‘enough is enough’ to banks that are throwing tenants and their families out of their homes

17 Jun

Just Cause Eviction Ordinance

Richmond City Council Passes Just Cause Eviction Ordinance
Tenants protected from unfair evictions from foreclosed home

“It’s unfair for a tenant in good standing to be thrown out of their home because of a foreclosure that they could not prevent.”
-Richmond City Council member, Dr. Jeff Ritterman

“We see tenants who have moved three to four times a year, from foreclosed property to foreclosed property, losing thousands in security deposits. It goes without saying that this legislation will provide tremendous relief to many of these individuals.”
-Adam Poe, Staff Attorney, Bay Area Legal Aid

“The City of Richmond took an important step yesterday, saying ‘enough is enough’ to banks that are throwing tenants and their families out of their homes and ruining neighborhoods for no good reason. Other California cities should follow Richmond’s lead and pass eviction protection laws. This is a cost effective way for cities to prevent displacement and blight after foreclosure.”
-Dean Preston, Executive Director of Tenants Together, California’s Statewide Organization for Renters’ Rights

 

On June 16th, before a packed chamber, the Richmond City Council became the second city in California to enact a “Just Cause” ordinance protecting tenants from unfair evictions from foreclosed homes. Passed unanimously, the ordinance spells out 12 specific circumstances where eviction is allowed, none of which is foreclosure. The ordinance provides an affirmative defense for a tenant in an unlawful detainer action, contains retaliatory eviction protection and it requires payment of a relocation fee in the amount of two times the monthly rent plus $1000.

Homeowners are not the only victim’s of the foreclosure crisis. Renters are often overlooked who, by no fault of their own, face eviction. In Richmond, 50% of residents are renters, and with 2,000 current foreclosures and a 30% increase predicted over the next year, there is a crisis. With an eviction on record, residents have difficulty finding new homes and many families have become homeless. The West Contra Costs County School District now reports 850 homeless students, a 44% increase from just 2 years ago.

Introduced by Council Member Dr. Jeff Ritterman, Labor, faith and community groups led by Richmond Vision and Richmond Equitable Development Initiative (REDI)* have long advocated for “Just Cause” tenant protection legislation. Art Hatchett, Co-chair of Richmond Vision and Executive Director of GRIP (The Greater Richmond Interfaith Project), which provides homeless housing and services in West Contra Costa County, expressed satisfaction with the passage. “We’ve seen a significant increase in our communities’ homeless population, both individuals and families. As of July 1, 2009, the new Just Cause legislation will help keep individuals and families who are renters from becoming homeless and victims of unfair evictions.”

This ordinance gained momentum this past March when The Richmond Equitable Development Initiative (REDI) held a community town hall meeting to present their comprehensive housing platform to keep families in their homes. Over 500 community members attended. Their housing platform included: a “Just Cause” eviction ordinance, policies to stabilize and revitalize Richmond neighborhoods, create more long-term affordable housing and put Richmond residents back to work rebuilding Richmond. Since the town hall, REDI community leaders have been meeting with council members and city staff to implement these policies.

The passage of the “Just Cause” ordinance is the first policy initiative to come out of these efforts and Council Member Ritterman has proclaimed, “I hope this will be one of many measures we take as a city to address this crisis. It’s bad for the city to allow neighborhoods to deteriorate and I believe elected officials have an obligation to protect the most vulnerable among us.”

What’s an Allonge anyway ??? thanks Jake

16 Jun

Do We Have a Fraud Problem? The Case of the Mysteriously Appearing Allonge posted by Adam Levitin I have generally been willing to give mortgage servicers, servicer support shops (like LPS), and foreclosure attorneys the benefit of the doubt when it comes to documentation irregularities (to put it mildly) in foreclosures. My working assumption up to this point has been that the documentation problems have been a function of corner cutting with securitization based on the assumptions that (1) the loans would perform better than they did and (2) those that defaulted would result in default judgments in foreclosure, so no one would ever notice the problems. I’ve also assumed that lack of capacity has played a critical role in problems in the default management chain–the system is held together by Scotch tape at this point. In other words, the problems in the system weren’t caused by malice.

I got some grief about this from people down in the trenches when I posted a comment about this a couple of weeks ago. And I was tempted to write it off as a function of litigants being too close to their cases. But a document I read today is making me rethink these assumptions. Here is an order from a Florida court that makes me start to wonder if we might have a serious fraud problem going on with blank endorsements and allonges.

To be sure, one data point isn’t an epidemic, but servicing is an industry where things tend to happen en masse. As Obi-Wan Kenobi

explains:

Obi-Wan: “A fighter that size couldn’t get this deep into space on its own.”

Luke: “Yeah, he must have gotten lost, been part of a convoy or something.”

Han: “Well, he ain’t going to be around long enough to tell anyone about us.”

Luke: “Look at him. He’s headed for that small moon.”

Han: “I think I can get him before he gets there. He’s almost in range.”

Obi-Wan: “That’s no moon. It’s a space station.”

Han: “It’s too big to be a space station.”

Luke: “I have a very bad feeling about this.”

Obi-Wan: “Turn the ship around.”

Han: “Yeah, I think your right. Full reverse! Chewie, lock in the auxiliary power.”

To start with, let me explain endorsements and allonges. And endorsement (or indorsement) is a signature on an instrument for the purpose of transferring rights in the instrument. (See UCC 3-204 for more details.) They work the same with notes as with checks and are governed by the same law. There are three types of endorsements. There are endorsements in blank–just your signature, nothing more (e.g., Adam J. Levitin), and special endorsements (Adam J. Levitin to Katherine Porter), and restrictive endorsements (Adam J. Levitin, for deposit only in Safe’n’Sound Bank).

A blank endorsement (by the instrument’s payee, of course) turns the instrument into bearer paper. That means it’s like cash. Whoever physically possesses the note, including a theif, can enforce it against the maker. And as a recent 9th Circuit BAP opinion, In re Veal (about which I hope to blog more) noted (fn 25), bearer paper has long had lots of nefarious associations (I would add Godfather III to the bearer bonds movie list in that note). In contrast, a special endorsement limits who can enforce the note; only the specially noted endorsee has rights in that note and can enforce it (they could transfer it to someone else, but that’s another matter).

Now allonges.  An allonge isn’t a delicious throat-soothing lozenge from Switzerland. It’s a piece of paper that goes a-long with the note. The allonge is basically an overflow sheet for extra endorsements. Frankly, no one should ever be using an allonge if there is room for an endorsement on the original note. Yes, it’s easier to print on the allonge, but allonges create evidentiary problems, namely that it can be difficult to tell when the endorsement on the allonge was done or if the allonge is even meant to go with that particular note. And I’m not sure what the evidentiary weight of an affidavit or testimony on this point could possibly be. Unless the affiant or witness has some basis for knowing that this particular allonge goes with this particular note (“I distinctly remember the peculiar coffee stain on both pieces of paper–it looked like Karl Malden’s nose”), then there’s little probative value from the affidavit or testimony.

The law on allonges is not particularly well-developed. The 1951 version of the UCC, in force in NY and South Carolina (I think), covers them in section 3-202, but the current version does not. The old version of the UCC required that allonges be “firmly attached.”

That requirement seems to have been fulfilled via pasting or gluing and maybe stapling. Query whether paper clip or rubber band or simply in the same folder will suffice. I’m not sure why any of them would.

None of these methods answers the question of when the allonge was created. I can paste or rubberband the day of trial. There’s a smidgen of state law on this, but it hasn’t been a major issue previously.

Which brings us to BONY v. Faulk. In this case, the foreclosure filing included a 3 page note. The note lacked endorsements connecting the originator to BONY as trustee for the foreclosing securitziation trust. This set up a motion to dismiss on the grounds that BONY didn’t have any right to do anything–it had no connection with the note.

But wait!  Suddenly BONY’s attorney tells the court that she is in possession of the fourth page of the note, which includes a blank endorsement. Puhlease…  What a ridiculous deus ex machina ending.

Are we do believe that this attorney filed 3 pages of the note, but not the 4th? If so, I sure hope she’s not billing for that screw up.

But here’s what perplexes me. Suppose that an allonge is produced. How are we going to know when that allonge was created or that it even relates to the note in question? (Just so everyone’s clear–if the endorsement were created later, then BONY as trustee for CWABS 2006-13 trust had no standing at the time the action was filed because the trust didn’t own the note at that time.) How do we know that this attorney isn’t engaged in fraud on the court (and a host of other violations of state and federal law)?

And this isn’t even getting into the question of whether the PSA at issue requires specific endorsements, not endorsements in blank. As it turns out that’s a problem in this particular case. Here’s the PSA for CWABS 2006-13 trust.  Section 2.01(g)(1) provides that the Depositor deliver to the trustee:

the original Mortgage Note, endorsed by manual of facsimile signature in blank in the following form: “Pay to the order of _______ without recourse”, with all intervening endorsements that show a complete chain of endorsement from the originator to the Person endorsing the Mortgage Note…

As an aside, let me point out that “endorsement…in blank” does not mean endorsed in blank in the UCC sense. In the UCC sense, endorsed in blank simply means the endorser’s signature, just as you might put on the back of a check before depositing it. Here, it means endorsed with a blank for the endorsee’s name.  Critically, this PSA requires a complete chain of endorsement with all intervening endorsements. A single endorsement in blank ain’t gonna do it if this PSA means anything. And there were a lot of MBS investors who assumed that it was going to be followed.

I think this PSA just puts the attorney in an even worse place. The only way there should be a separate blank endorsement page is if there was non-compliance with the PSA. Are we really to believe that happened? (Well, yes, but the attorney can’t really argue that BONY generally doesn’t comply with its duties as trustee, now can she?)

We’ve already seen pretty shocking evidence of documentation fraud in foreclosures.  Remember that the robosigning scandal was the by-product of depositions that aimed to show backdating of assignments to trusts. The shame of the robosigning press coverage was that it focused on some shmucks signing 10,000 assignments in a month–which didn’t necessarily produce any harm itself, just carpal tunnel syndrome–and overlooked the really quite serious criminal problem of the backdating of assignments. The depositions showed pretty clearly that there was backdating–the notarizations were by notaries who didn’t have their commissions until a couple of years subsequent or were done on Christmas Day, etc.

Document fraud in the mortgage industry is nothing new. It’s appeared in all flavors and sizes for centuries. The laws of negotiability are first and foremost evidentiary laws meant to protect against fraud.

Negotiable instruments are reified obligations–the instrument itself is the right to payment (UCC 3-203, cmt. 1).  That means that one can sue on either the instrument or on the underlying contract (but Statute of Frauds might require some writing for enforceability). I hope that courts will recognize that real serious potential for fraud that exists when one combines endorsements in blank with allonges and start demanding (1) that the complete note be filed with the original filing and (2) that anyone using an allonge prove that the allonge goes with the note in question. I think we’ve passed the point were there can be any assumptions of good faith and fair dealing.

I’d be curious to hear if any foreclosure defense attorneys have been pushing on the evidentiary status of allonges–namely what proof beyond a staple or the like is there that an allonge goes with a particular mortgage and wasn’t just photocopied from another one.

And yes, this sort of evidentiary scrutiny adds huge costs to the system. But it would be pretty easily avoided if PSAs had been followed in the first place–there was a reason that they required complete, unbroken chains of endorsement.

June 16, 2011 at 8:43 PM in Mortgage Debt & Home Equity

Adam J. Levitin

Associate Professor of Law

A.B. Harvard; A.M., M.Phil. Columbia; J.D. Harvard

Address:

600 New Jersey Avenue N.W.

Washington, DC 20001-2075

Office Location:  Hotung 6022

Office Phone:  202.662.9234

Office Fax:  202.662.4030

e-mail (preferred contact method): adam.levitin<at>law.georgetown.edu

(replace the <at> with the @ sign in the e-mail)

Assistant:  Terican Gross

Phone:  202.662.9485

Blog:  http://www.creditslips.org

*Please note that I do not provide personal legal advice, including on credit card and mortgage foreclosure issues.*

Biography

Professor Levitin specializes in bankruptcy, commercial law, and financial regulation.  His research focuses on consumer and housing finance, payments, and debt restructuring.

Before joining the Georgetown faculty, Professor Levitin practiced in the Business Finance & Restructuring Department of Weil, Gotshal & Manges LLP in New York and served as law clerk to the Honorable Jane Richards Roth on the United States Court of Appeals for the Third Circuit.  While at Georgetown, he has served as Special Counsel to the Congressional Oversight Panel and as the Robert Zinman Scholar in Residence at the American Bankruptcy Institute.

Professor Levitin holds a J.D. from Harvard Law School, an M.Phil and an A.M. from Columbia University, and an A.B. from Harvard College, all with honors.

Jake Naumer

Resolution Advisors

3187 Morgan Ford

St Louis Missouri 63116

314 961 7600

Fax Voice Mail 314 754 9086

2924 unconstitutional ???

11 Jun

2924 unconstitutional  Check out this pro per complaint they raise some interesting issues.

PJATSI+Supplemental+Complaint+March+25+2011

current rulings on wrongful foreclosure

9 Jun
20.  TIME:  9:00   CASE#: MSC11-00162

 CASE NAME: CHRISTINA PENNES  vs.  PNC MORTGAGE

 HEARING ON DEMURRER TO COMPLAINT of PENNES

 FILED BY PNC BANK, NATIONAL ASSOCIATION

* TENTATIVE RULING: *

 

 

Defendant PNC Bank, N.A.’s Demurrer to each cause of action within the Complaint is sustained with leave to amend in part and without leave to amend in part. (Cal. Code Civ. Proc., section 430.10, subd. (e).)

 

1st cause of action for Cancellation of Instruments (Assignment of Deed of Trust), 2nd cause of action for Cancellation of Instruments (Notice of Default), and  3rd cause of action for Cancellation of Instruments (Notice of Default), sustained with leave to amend. Actions to remove a cloud on title, under Civil Code section 3412, are equitable in nature, and differ from actions to quiet title in that they are aimed at a particular instrument or piece of evidence. Reiner v. Danial (1989) 211 Cal. App. 3d 682, 689.  To state a cause of action to remove a cloud, instead of pleading in general terms that the defendant claims an adverse interest, the plaintiff must allege, inter alia, facts showing actual invalidity of the apparently valid instrument or piece of evidence. (5 Witkin, Cal. Procedure (5th ed. 2008) Pleading, sections 671-674, pp. 97-99.) Plaintiffs have not met this burden. See Complaint par 20, Ex D. See also, Gomes v. Countrywide Home Loans, Inc. (2011) 192 Cal. App. 4th 1149 1154-55 [under Civ C  section 2924(a)(1), a trustee, mortgagee, or beneficiary, or any of their authorized agents, may initiate the foreclosure process. Nowhere, however, does the statute provide for a judicial action to determine whether the person initiating the foreclosure process is indeed authorized, and the court saw no ground for implying such an action, which would have been inconsistent with the policy behind nonjudicial foreclosure of providing a quick, inexpensive and efficient remedy.]

 

4th cause of action for wrongful foreclosure, sustained with leave to amend. The elements of a common-law cause of action for damages for wrongful foreclosure are:  (1) Trustee or mortgagee caused an illegal, fraudulent or willfully oppressive sale of real property; (2) pursuant to a power of sale contained in a mortgage or deed of trust; and (3) the Trustor or mortgagor sustained damages. (Munger v. Moore (1970) 11 Cal. App. 3d 1, 7; see 4 Witkin, Sum. Of Cal. Law (10th ed. 2005) Secured Transactions in Real Property, §168.)

The Plaintiffs  do not allege that the foreclosure sale has taken place. Thus, Plaintiffs fail to plead a necessary element of this cause of action.

 

5th cause of action for violation of UCL,  and 8th caused of action for violation of Rosenthal Debt Collection Practices Act [Civ C section 1788], sustained without leave to amend. California’s Unfair Competition Law (UCL) prohibits any unlawful, unfair or fraudulent business practice. (B&P Code section 17200.)  The broad scope of the statute encompasses both anti-competitive business practices and practices injurious to consumers. (Cel‑Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180.)

This cause of action is based in part upon the 8th cause of action for violation of the Rosenthal Debt Collection Practices Act [Civ C § 1788.]

The Rosenthal Debt Collection Practices Act [RDCPA] prohibits debt collectors from engaging in abusive, deceptive and unfair practices in the collection of consumer debts.  (Civ. Code  section 1788, et. Seq.)  Consumer debt is statutorily defined as money, property or the equivalent owed by reason of a consumer credit transaction, which in turn is defined as a transaction in which property, etc. is acquired on credit for personal, family or household purposes. Cal. Civ. Code  section 1788.2(b), (e)-(f), (h).  There are no California State Court opinions to date applying this statute to the enforcement of deeds of trust or to foreclosure proceedings.

 

6th cause of action for quiet title, sustained with leave to amend:

To state a claim for quiet title,  the complaint shall be verified. CCP section 761.020.  The Complaint is not verified.  Additionally, in order to quiet title, plaintiff  must tender the entire outstanding principal.  See, e.g., Aguilar v. Bocci (1974) 39 Cal.App.3d 475, 477 [Plaintiff cannot quiet title without discharging his debt; the cloud upon his title persists until the debt is paid.]

 

7th cause of action for rescission, sustained without leave to amend. To state a claim for contract rescission, plaintiff must allege some grounds for rescission-fraud, mistake, coercion, etc. (Civ. Code, § 1689, subd. (b).) plaintiffs do not meet hits pleading burden.

Plaintiffs Opposition does not address this cause of action, therefore, they concede that it has no merit.

 

9th cause of action for  violation of Civ C § 2923.5, sustained with leave to amend:

Actual contact is not required. See, Civil Code section 2923.59(g). Additionally, the only remedy for a Section 2923.5 violation is a postponement of the foreclosure sale to enable the defendants to comply with the requirements of the statute — not a claim for damages. (Mabry v. Superior Court (2010) 185 Cal. App. 4th 208, 235.)

The Plaintiffs do not allege that a foreclosure sale date has been noticed.

Defendant’s Request for Judicial Notice is granted. (Evid. Code, section 452(c)[public records].

 

In light of the ruling on the general demurrer, the special demurrer is moot. (Cal. Code Civ. Proc., section 430.10, subd. (f).)

 
 21.  TIME:  9:00   CASE#: MSC11-00162

 CASE NAME: CHRISTINA PENNES  vs.  PNC MORTGAGE

 HEARING ON MOTION TO STRIKE PORTIONS OF PLAINTIFFS’ COMPLAINT

 FILED BY PNC BANK, NATIONAL ASSOCIATION

* TENTATIVE RULING: *

 

In llight of the ruling on the general demurrer, the Motion to Strike is moot.

 

Principal reduction success !!!

9 Jun

Filipino Homeowners Get Principal Reduction Relief

Written by admin Featured News, News Highlights, Top StoriesJun 8, 2011

By Henni Espinosa, ABS-CBN North America Bureau

June 8, 2011

UNION CITY, Calif. – Amy and Peter Asi, who lost both their jobs in 2009, almost gave up on their home.  For two years, they had asked their lender, Wachovia, to modify their loan and lower their home’s principal.

They hired the help of Attorney Timothy McCandless.  Eventually, the amount of the Asi’s principal loan was reduced by 29%.  Their lender cut more than $117,000 off their debt.

Peter said they can now breathe a huge sigh of relief.  He said, “We’re already struggling to pay for this house, which is underwater.  This is a big help.”

Atty. McCandless said since the Obama administration has put pressure on lenders to reduce the principals of struggling homeowners, lenders have been receptive…because they see how it will benefit them, as opposed to foreclosing on homes.

McCandless said, “If they put all these hours on the market all at once — values are going to go down faster and further.  It’s in their best interest to work with the homeowners rather than foreclosing, evicting.  It’s very destrucive to the community.”

McCandless said a third of the the homes in America are now underwater in value.  He said lenders now see principal reduction as a win-win situation.

He said, “They look at the appraised value and the cost it’s going to take to liquidate the home — versus working with the homeowner.  Values continue to drop and it’s making more and more sense for banks to work with the homeowners.”

McCandless said principal reduction is a more viable option for struggling homeowners than loan modification…because homeowners are encouraged to pay on time when they know their homes have value.

At its peak, the Asi’s home was valued at $600,000.  It is now down to $400,000.

Now that the bank reduced the amount of their loan to reflect current values, they said they’re more encouraged to pay…especially now that they have full-time jobs.

Amy said, “Without principal reduction, you feel like there’s no sense in paying.  But with it, homeowners feel motivated to pay.”

Not only was their principal reduced, the Asi’s loan was permanently modified from $4,000 a month to $2,800 a month.

The Asi’s principal reduction has a condition.  They have to pay monthly payments on time for the next three years — before the $177,000 can be fully taken out of their loan — not a problem for these homeowners who are now confident in the value of their home.

You may contact Henni Espinosa at henni_espinosa@abs-cbn.com for more information.

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Paragraph 22 in ALL Deeds of Trust lenders don’t follow the contract

3 Jun

BOMBSHELL- ANOTHER 2ND DCA SMACKDOWN- KONSULIAN! June 1st, 2011 Paragraph 22 of almost every mortgage contains a provision that requires the plaintiff to provide notice and an opportunity to cure the default prior to foreclosure. The principle behind this paragraph and the right to cure is not just a helpful little piece for the defendant, the default and cure provisions recited are an essential element of the entire legal process of foreclosure, deeply rooted in our American Jurisprudence. This is a subject that is discussed in some length in the recent Cardozo Law Review Article on Foreclosures. (attached) That’s all some deep stuff, but here’s where the rubber behind all that hits the road…in an opinion just released today….. Under Florida law, contracts are construed in accordance with their plain language, as bargained for by the parties. Auto-Owners Ins. Co. v. Anderson, 756 So. 2d 29, 34 (Fla. 2000). Further, Busey did not refute Konsulian’s defenses nor did it establish that Konsulian’s defenses were legally insufficient. Because Busey did not prove that it met the conditions precedent to filing for foreclosure, it failed to meet its burden, and it is not entitled to judgment as a matter of law. In addition to being prematurely filed, Konsulian claims that the acceleration letter failed to state the default as required by the mortgage terms. We agree and reverse. Now there are default letters floating all around in Foreclosureland, but I doubt that many of them comply with the express terms of the contract the banks created…..

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