Archive | May, 2012

Bank of America, MERS Lose Bid to Dismiss Texas Fee Suit

26 May

From: Charles Cox []
Sent: Friday, May 25, 2012 7:46 AM
To: Charles Cox
Subject: Bank of America, MERS Lose Bid to Dismiss Texas Fee Suit

Bloomberg News

Bank of America, MERS Lose Bid to Dismiss Texas Fee Suit

By Margaret Cronin Fisk and Tom Korosec on May 24, 2012

Bank of America Corp. (BAC) and Mortgage Electronic Registration Systems Inc. failed to persuade a judge to dismiss a lawsuit claiming they shortchanged Texas counties out of uncollected mortgage filing fees.

“The plaintiffs have brought sufficient evidence to allow the case to go forward,” U.S. District Judge Reed O’Connor in Dallas said. O’Connor threw out several claims in the lawsuit at the end of a court hearing yesterday.

O’Connor allowed the counties to seek damages and an injunction limiting future filings by MERS. He rejected county allegations that MERS was filing false liens, which would have allowed the counties to seek $10,000 for each contested filing.

“The $10,000 per is out,” Thomas Hefferon, attorney for Bank of America, said in an interview after the hearing.

Dallas County filed the initial complaint in September, alleging that Merscorp Inc.’s MERS was established by banks including Charlotte, North Carolina-based Bank of America to avoid paying filing fees, as well as to ease transfers of mortgages. Dallas revised the lawsuit in October, seeking to represent all other Texas counties in which a deed of trust has been filed identifying MERS as a beneficiary.

MERS, which runs an electronic registry of mortgages, said it followed Texas law and didn’t shortchange counties on fees.

‘Perfectly Legal’

“What MERS does and how it does it is perfectly appropriate, perfectly legal,” MERS lawyer Robert Brochin said at yesterday’s hearing. “The designation of MERS as a false lienholder should be categorically denied.”

Most of the case remains following Judge O’Connor’s decision, Stephen Malouf, an attorney for Dallas County, said in an interview after the hearing. The counties will be seeking to enjoin MERS from continuing to operate as it has in the state, he said. “We’d like to see it stopped.”

MERS tracks servicing rights and ownership interests in mortgage loans on its registry, allowing banks to buy and sell loans without recording transfers with counties. MERS acts as the lender’s nominee and remains the mortgagee of record as long as the note promising repayment is owned by a MERS member.

Dallas County claims this allows banks that own stakes in MERS to buy and sell loans without properly recording transfers with counties and paying the fee. Dallas County District Attorney Craig Watkins said last year his county may be owed as much as $100 million.

Other Counties

Counties in other states including Kentucky, Michigan, Ohio and Oklahoma also filed suits claiming the MERS system has cheated them out of filing fees. The Kentucky suit was dismissed in February. Delaware’s attorney general last year filed an unrelated suit, alleging MERS used deceptive practices that hide information from borrowers.

“The MERS system has created massive confusion as to the true owners of the beneficial interests in mortgage loans and mortgages throughout the United States, and the loss of revenues has harmed U.S. counties,” Dallas County lawyers said in court papers last year.

“As of today, the system they are so proud of is a complete and total failure,” Malouf said at the hearing before O’Connor. “It has made the property recording system in the U.S. spaghetti.”

Every County

The Dallas County class-action lawsuit would cover every county in Texas where MERS is identified as beneficiary or where “any record has been filed” that would cause MERS to be identified in deed files as a grantor of interest in a property, unless “MERS itself actually holds in the property the interest that MERS purports to be granting,” county lawyers said in court filings.

Under Texas law, “there is no duty to record assignments, or other documents,” lawyers for MERS and Bank of America said in court papers March 9.

“The Texas Property Code, which contains various statutes concerning recording interests in land, allows parties to record interests in land to protect their interests but does not require that any recording occur,” the defendants said in the filing. “The counties have suffered no injury — and thus lack standing — from nonpayment of recording fees for documents that were never recorded.”

MERS doesn’t create new documents when a deed of trust is assigned to a new lender, Hefferon, the Bank of America lawyer, said at yesterday’s hearing. “There is no obligation to send a document that doesn’t exist,” he said. “There is no injury if you haven’t collected a fee or don’t do the work.”

Jason Lobo, a MERS spokesman, didn’t immediately return a call for comment.

The lawsuit is Dallas County v. Merscorp Inc., 11-cv-02733, U.S. District Court, Northern District of Texas (Dallas).

Please Keep April Charney in your prayers…

26 May

From: Charles Cox []
Sent: Friday, May 25, 2012 6:56 AM
To: Charles Cox
Subject: Please Keep April Charney in your prayers…

April Charney’s Latest Battle

Most of you are familiar with Boot Camper April Charney and her tireless work on behalf of homeowners in Florida. Now, April is fighting another unexpected battle: she is hospitalized after complications during treatment for a kidney stone. She has been in critical condition for several days, on a respirator and undergoing dialysis. As of this writing, Max has just learned from April’s family that her condition has seemingly improved though still quite serious. Please send your prayers, good thoughts, positive energy or whatever suits your beliefs to April and her family. Read Matt Weidner’s tribute to April.

More Court Justification and Ratification of Forgery and Fraud

26 May

From: Charles Cox []
Sent: Friday, May 25, 2012 6:54 AM
To: Charles Cox
Subject: More Court Justification and Ratification of Forgery and Fraud

Get ready for more disgust with the “legal system”…


Borrower’s “show me the note” argument fails to halt foreclosure

26 May

From: Charles Cox []
Sent: Friday, May 25, 2012 6:38 AM
To: Charles Cox
Subject: Borrower’s "show me the note" argument fails to halt foreclosure

Borrower’s "show me the note" argument fails to halt foreclosure

· Sheppard Mullin Richter & Hampton LLP

· Alejandro E. Moreno and Shannon Petersen


· May 18 2012


In Debrunner v. Deutsche Bank Nat. Trust Co. (Cal.App. 6 Dist., 2012) — Cal.Rptr.3d —-, 2012 WL 883128, the California Court of Appeal affirmed the dismissal of a complaint for wrongful foreclosure with prejudice, holding that a beneficiary under a deed of trust need not possess the original promissory note to commence foreclosure and that a borrower cannot avoid foreclosure based on a technical deficiency without showing actual prejudice.

Plaintiff Debrunner was a private investor who extended credit to two borrowers secured by a second deed of trust on real property. The borrowers had previously obtained a loan from Quick Loans Funding, Inc. Quick Loans assigned the deed of trust and promissory note to Option One Mortgage Corporation, which later assigned them to FV-1, Inc., which later assigned them to Deutsche Bank, which appointed Saxon Mortgage Services, Inc. to service the loan.

The borrowers defaulted. Deutsche Bank recorded a notice of default naming itself as the creditor but providing the contact information for Saxon Mortgage. The plaintiff filed suit to halt the foreclosure, claiming Deutsche Bank had no right to foreclose because it did not physically possess the original promissory note and had not provided the correct contact information.

The Court rejected both arguments. It held that "nothing in the applicable statutes . . . precludes foreclosure when the foreclosing party does not possess the original promissory note." The plaintiff’s attempted reliance on provisions of the California Commercial Code regarding negotiable instruments was misplaced because those provisions did not "displace the detailed, specific, and comprehensive set of legislative procedures … established for nonjudicial foreclosures." The Court also held that, even if the notice of default was defective because it did not provide contact information for Deutsche Bank, the plaintiff did not and could not show prejudice as required to halt the foreclosure.

Cal.App.6th-DeBrunner v. Deutsche Bank.docx

New Webinar: Making The Attorney General Settlement Work For You

22 May

From: Charles Cox []
Sent: Monday, May 07, 2012 11:37 AM
To: Charles Cox
Subject: New Webinar: Making The Attorney General Settlement Work For You

The Attorney General Settlement has now been approved by the court, and regardless of whether we like the terms, the process, or lack thereof, it is done. There have been many questions regarding the terms of the settlement, and how consumers can benefit from it. In order to answer the most common questions posed and give you guidance on how to submit a credible claim under the new rules, we are offering a comprehensive webinar to help you understand how to make the settlement work for you. We will review the settlement terms relating to foreclosures, loan modifications and shorts sales, discuss tactics and strategies that will help you accomplish your goal and finally, provide demand sample letters that you can submit to let the bank know that you are aware of your rights. The webinar will conclude with a round table discussion including a question and answer session. To accomodate all, the webinar will be offered on May 12, 2012 at 12:00 PDT and again on June 2, 2012 at 12:00 PDT. If you attend on May 12, 2012 and would like to repeat the seminar, you may do so on June 2, 2012 without any additional charge. Sign up now as spaces are limited!

Learn more at

Attorney General Kamala D. Harris Issues Statement on May Revision – Moonbeam at work…why am I not surprised!

22 May

From: Charles Cox []
Sent: Monday, May 14, 2012 4:24 PM
To: Charles Cox
Subject: Attorney General Kamala D. Harris Issues Statement on May Revision – Moonbeam at work…why am I not surprised!

News Release

May 14, 2012


Contact: (415) 703-5837

Attorney General Kamala D. Harris Issues Statement on May Revision

SACRAMENTO — Attorney General Kamala D. Harris today issued the following statement on the Governor’s May Revision:

"The state Department of Justice stood firm for over a year against the nation’s largest banks on behalf of California homeowners harmed by the foreclosure crisis. This effort resulted in an agreement that will provide billions in relief to California homeowners who are experiencing hardship. The agreement also required the banks to pay an additional $410 million to get homeowners the expert help they need to keep their homes.

The Governor’s May Revision, however, proposes to redirect this $410 million from the state’s homeowners to other budget purposes. While the state is undeniably facing a difficult budget gap, these funds should be used to help Californians stay in their homes. I plan to work with the Governor and Legislature toward a balanced budget that honors our obligations to California’s homeowners."

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Max Gardner Personal Message to Bankruptcy Boot Camp Graduates

22 May

From: Charles Cox []
Sent: Wednesday, May 16, 2012 1:41 PM
To: Charles Cox
Subject: Max Gardner Personal Message to Bankruptcy Boot Camp Graduates

Special Announcement

Health and Boot Camp Schedule Update

Bob Godnik

As many of you already know, Max has for some time been undergoing treatment for malignant tumors in his lungs and bladder. Recent testing revealed new tumor growth in his liver. Surgical intervention offers uncertain results, and Max has concluded that his time is better spent with his family and furthering his mission to teach attorneys rather than undergoing and recovering from medical procedures which might do little to extend his remaining time.

There is, of course, still much work to be done. In the interests of accomplishing as much as possible and spreading information to as many consumer attorneys as possible without unduly straining Max’s health, we are making some changes.

First, Max has decided not to travel outside of North Carolina for live events. Second, live Boot Camps at the Farm will end this summer.

While Max loves the intensive, interactive nature of the Farm Boot Camps, attendance is necessarily limited and hosting the event is taxing for him and for his wife, Victoria.

The June Boot Camp at the Farm will go forward as scheduled, from June 7-11. We hope to offer one or two additional Boot Camps at the Farm in July and/or August. After that, all events will be scheduled in more metropolitan locations, at venues that will allow Max to reach a larger number of attorneys in a single session.

Max sincerely thanks each of you for your interest and support and wants you to know that he is as committed as ever to the war on predatory lenders, slippery servicers and dishonest debt collectors.

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