Archive | August, 2012

What is a Wrongful Foreclosure Action?

29 Aug

The pretender lender does not have the loan and did not invest any of the servicers money. Yet these frauds are occurring every day. They did not loan you the money yet they are the ones foreclosing, taking the bail out money, the mortgage insurance, and then throwing it back on the investor for the loss. We could stop them if a few plaintiffs where awarded multi million dollar verdicts for wrongful foreclosure.
A wrongful foreclosure action typically occurs when the lender starts a non judicial foreclosure action when it simply has no legal cause. Wrongful foreclosure actions are also brought when the service providers accept partial payments after initiation of the wrongful foreclosure process, and then continue on with the foreclosure process. These predatory lending strategies, as well as other forms of misleading homeowners, are illegal.

The borrower is the one that files a wrongful disclosure action with the court against the service provider, the holder of the note and if it is a non-judicial foreclosure, against the trustee complaining that there was an illegal, fraudulent or willfully oppressive sale of property under a power of sale contained in a mortgage or deed or court judicial proceeding. The borrower can also allege emotional distress and ask for punitive damages in a wrongful foreclosure action.
Causes of Action

Wrongful foreclosure actions may allege that the amount stated in the notice of default as due and owing is incorrect because of the following reasons:

Incorrect interest rate adjustment
Incorrect tax impound accounts
Misapplied payments
forbearance agreement which was not adhered to by the servicer
Unnecessary forced place insurance,
Improper accounting for a confirmed chapter 11 or chapter 13 bankruptcy plan.
Breach of contract
Intentional infliction of emotional distress
Negligent infliction of emotional distress
Unfair Business Practices
Quiet title
Wrongful foreclosure

Injunction

Any time prior to the foreclosure sale, a borrower can apply for an injunction with the intent of stopping the foreclosure sale until issues in the lawsuit are resolved. The wrongful foreclosure lawsuit can take anywhere from ten to twenty-four months. Generally, an injunction will only be issued by the court if the court determines that: (1) the borrower is entitled to the injunction; and (2) that if the injunction is not granted, the borrower will be subject to irreparable harm.
Damages Available to Borrower

Damages available to a borrower in a wrongful foreclosure action include: compensation for the detriment caused, which are measured by the value of the property, emotional distress and punitive damages if there is evidence that the servicer or trustee committed fraud, oppression or malice in its wrongful conduct. If the borrower’s allegations are true and correct and the borrower wins the lawsuit, the servicer will have to undue or cancel the foreclosure sale, and pay the borrower’s legal bills.
Why Do Wrongful Foreclosures Occur?

Wrongful foreclosure cases occur usually because of a miscommunication between the lender and the borrower. This could be as a result of an incorrectly applied payment, an error in interest charges and completely inaccurate information communicated between the lender and borrower. Some borrowers make the situation worse by ignoring their monthly statements and not promptly responding in writing to the lender’s communications. Many borrowers just assume that the lender will correct any inaccuracies or errors. Any one of these actions can quickly turn into a foreclosure action. Once an action is instituted, then the borrower will have to prove that it is wrongful or unwarranted. This is done by the borrower filing a wrongful foreclosure action. Costs are expensive and the action can take time to litigate.
Impact

The wrongful foreclosure will appear on the borrower’s credit report as a foreclosure, thereby ruining the borrower’s credit rating. Inaccurate delinquencies may also accompany the foreclosure on the credit report. After the foreclosure is found to be wrongful, the borrower must then petition to get the delinquencies and foreclosure off the credit report. This can take a long time and is emotionally distressing.

Wrongful foreclosure may also lead to the borrower losing their home and other assets if the borrower does not act quickly. This can have a devastating affect on a family that has been displaced out of their home. However, once the borrower’s wrongful foreclosure action is successful in court, the borrower may be entitled to compensation for their attorney fees, court costs, pain, suffering and emotional distress caused by the action. Fortunately, these wrongful foreclosure incidences are rare. The majority of foreclosures occur as a result of the borrower defaulting on their mortgage payments.

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Win the house back at the eviction on summary judgement

26 Aug

Here goes

Timothy L. McCandless, Esq., SBN 147715
LAW OFFICES OF TIMOTHY L. MCCANDLESS
820 Main Street, Suite #1
P.O. Box 149
Martinez, California 94553

Telephone: (925) 957-9797
Facsimile: (925) 957-9799
Email: legal@prodefenders.com

Attorney for Defendant(s):

SUPERIOR COURT OF THE STATE OF CALIFORNIA

IN AND FOR THE COUNTY OF SAN MATEO

SOUTHERN BRANCH – HALL OF JUSTICE & RECORDS

FEDERAL HOME LOAN MORTGAGE
CORPORATION, ITS ASSIGNEES
AND/OR SUCCESSORS,

Plaintiff(s),

VS.

; and DOES 1 -10, Inclusive,

Defendant(s)

CASE NO:

MEMORANDUM OF POINTS AND
AUTHORITIES IN SUPPORT OF MOTION
FOR SUMMARY JUDGMENT BY
DEFENDANT

[Filed concurrently with: Notice of Motion and
Motion for Summary Judgment by Defendant;
Declaration of Alexander B. Paragas in Support
of Motion for Summary Judgment by
Defendant; Defendant’s Separate Statement of
Undisputed Facts and Supporting Evidence on
Motion for Summary Judgment; [Proposed]
Order]

Hearing’s:
Date : September X, 2012
Time : X:XX a.m.
Dept. : Law and Motions
Reservation No.:

Defendant and Movant herein,  (“Defendant”), submits the
following Memorandum of Points and Authorities in Support of his Motion for Summary

Judgment against Plaintiff FEDERAL HOME LOAN MORTGAGE CORPORATION, ITS
ASSIGNEES AND/OR SUCCESSORS,(hereinafter “FHLMC”)(“Plaintiff”).

POINTS AND AUTHORITIES
I
FACTUAL BACKGROUND OF THIS LITIGATION

On or about January 24, 2008, Defendant executed an “Adjustable Rate Note” promising to
pay INDYMAC BANK, F.S.B. (hereinafter “INDYMAC”)1, the sum of $417,000.00, by monthly
payment commencing February 1, 2008.
The Deed of Trust (“DOT”) and the Note are between Defendant, Defendant’s wife Mrs.
Paragas and INDYMAC, Plaintiff was never a signatory to this Note, or DOT. A true and correct
copy of DOT and Adjustable Rate Rider is attached to the Declaration of Alexander B. Paragas
and incorporated herein as Exhibit “1”.
The issue is does Plaintiff has a right as a stranger to the Note to foreclose on the Note and
DOT that was not in its name and for which Plaintiff was not party to the Note or financing
transaction nor a disclosed beneficiary by virtue of a recorded assignment.
Furthermore Defendant alleges that MORTGAGE ELECTRONIC REGISTRATION
SYSTEMS INC., a/k/a MERSCORP, INC. (hereinafter “MERS”) was not listed anywhere on his
Note executed at the same time as DOT. Furthermore Defendant is informed and believes that
directly after INDYMAC caused MERS to go on title as the “Nominee Beneficiary” this is

1 Independent National Mortgage Corporation “INDYMAC” before its failure was the largest savings and loan association in the
Los Angeles area and the seventh largest mortgage originator in the United States. The failure of INDYMAC on July 11, 2008, was the
fourth largest bank failure in United States history, and the second largest failure of a regulated thrift.

The primary causes of INDYMAC’s failure were largely associated with its business strategy of originating and securitizing Alt-
A loans on a large scale. During 2006, INDYMAC originated over $90 billion of mortgages. INDYMAC’s aggressive growth strategy, use
of Alt-A and other nontraditional loan products, insufficient underwriting, credit concentrations in residential real estate in the California
and Florida markets, and heavy reliance on costly funds borrowed from the Federal Home Loan Bank (FHLB) and from brokered deposits,
led to its demise when the mortgage market declined in 2007. As an Alt-A lender, INDYMAC’s business model was to offer loan products
to fit the borrower’s needs, using an extensive array of risky option-adjustable-rate-mortgages (option ARMs), subprime loans, 80/20 loans,
and other nontraditional products. Ultimately, loans were made to many borrowers who simply could not afford to make their payments.
The thrift remained profitable only as long as it was able to sell those loans in the secondary mortgage market.

When home prices declined in the latter half of 2007 and the secondary mortgage market collapsed, INDYMAC was forced to
hold $10.7 billion of loans it could not sell in the secondary market. Its reduced liquidity was further exacerbated in late June 2008 when
account holders withdrew $1.55 billion or about 7.5% of INDYMAC’s deposits. During this time INDYMAC’s financial situation was
unraveling at the seams, culminating on July 11, 2008 when INDYMAC was placed into conservatorship by the Federal Deposit Insurance
Company “FDIC” due to liquidity concerns. A bridge bank, INDYMAC FEDERAL BANK, F.S.B., Defendant in the instant action, was
established to assume control of INDYMAC’s assets and secured liabilities, and the bridge bank was put into conservatorship under the
control of the FDIC.

On March 19, 2009 the Acting Director of Office of Thrift Supervision “OTS” replaced the FDIC as conservator for INDYMAC
pursuant to Section 5(d)(2)(C) of the Home Owners’ Loan Act (HOLA), 12 U.S.C. 1464(d)(2)(C); and appointed the FDIC as the receiver
for INDYMAC pursuant to Section 5(d)(2) of HOLA, 12 U.S.C. 1464(d)(2) and Section 11(c)(5) of the FDIA, 12 U.S.C. 1821(c)(5).

As a result of the OTS Order, INDYMAC became an “inactive institution” on March 19, 2009, the very same day that the Order
was issued. In other words, INDYMAC, as a defunct corporation, was no longer in existence as of March 19, 2009.

routinely done in order to hide the true identity of the successive Beneficiaries when and as the
loan was sold.
Based upon published reports, including MERS’ web site, Defendant believes and hereon
allege, MERS does not: (1) take applications for, underwrite or negotiate mortgage loans; (2)
make or originate mortgage loans to consumers; (3) extend credit to consumers; (4) service
mortgage loans; or (5) invest in mortgage loans.
MERS is used by Plaintiff and foreclosing entities to facilitate the unlawful transfers or
mortgages, unlawful pooling of mortgages and the injection into the United States banking
industry of un-sourced (i.e. unknown) funds, including, without limitation, improper off-shore
funds. Defendant is informed and thereon believes and alleges that MERS has been listed as
beneficiary owner of more than half the mortgages in the United States. MERS is improperly
listed as beneficiary owner of Defendant’s mortgage.
Nationwide, there are courts requiring banks that claim to have transferred mortgages to MERS
to forfeit their claim to repayment of such mortgages.
MERS’ operations undermine and eviscerate long-standing principles of real property law,
such as the requirement that any person who seeks to foreclose upon a parcel of real property: (1)
be in possession of the original Note and mortgage; and (2) possess a written assignment giving it
rights to the payments due from borrower pursuant to the mortgage and Note.
The Plaintiff and its agents did not want to pay the fees associated with recording mortgages
and they did not wanted to bother with the trouble of keeping track of the originals. That is the
significance of the word ‘Electronic’ in Mortgage Electronic Registration Systems, Inc. The
undermined long-established rights and sabotaged the judicial process, eliminating,
“troublesome” documentation requirements. While conversion to electronic loan documentation
may eventually be implemented, it will ultimately be brought about only through duly enacted
legislation which includes appropriate safeguards and counterchecks.
Upon information and belief:
a) MERS is not the original lender for Defendant’s loan;
b) MERS is not the creditor, beneficiary of the underlying debt or an assignee
under the terms of Defendant’s Promissory Note;
c) MERS does not hold the original Defendant’s Promissory Note, nor has it ever
held the originals of any such Promissory Note;

d) At all material times, MERS was unregistered and unlicensed to conduct
mortgage lending or any other type or real estate or loan business in the State of
California and has been and continues to knowingly and intentionally
improperly record mortgages and conduct business in California and elsewhere
on a systematic basis for the benefit of the Plaintiff and other lenders.
Defendant initiated loan modification negotiation efforts with ONEWEST BANK, F.S.B.,
(hereinafter “ONEWEST”) on or about November 2010, after experiencing unforeseen financial
hardship. Defendant believed that his loan servicer would be willing to avoid a foreclosure since
he and his wife Mrs. Paragas were willing to tender unconditionally but needed the monthly
payments restructured to reflect the downturn in their monthly gross income, and reflect the
current market conditions.
Despite Defendant’s efforts, ONEWEST has refused to work in any reasonable way to modify
the loan or avoid foreclosure sale. Furthermore ONEWEST is presently bound by a Consent
Order, WN-11-0112 , with the United States of America Department of the Office of Thrift
Supervision related to its initiation and handling of foreclosure proceedings. The Consent Order is
based in part on foreclosure affidavits that have been found to be false. ONEWEST presently
manages approximately 141 billion dollars in residential mortgage loans in which it has litigated
numerous wrongful foreclosure proceedings and initiated non-judicial foreclosure proceedings
without proper standing.
The challenged foreclosure process is based upon several Assignments of DOT.
a) First Assignment executed and effective January 3, 2011, a true and correct
copy of the Assignment of DOT is attached to the Declaration of Alexander B.
Paragas and incorporated herein as Exhibit “2”;
b) Second Assignment executed and effective May 24, 2011, a true and correct
copy of the Assignment of DOT is attached to the Declaration of Alexander B.
Paragas and incorporated herein as Exhibit “3”; and
c) Third Assignment executed and effective October 31, 2011, a true and correct
copy of the Assignment of DOT is attached to the Declaration of Alexander B.
Paragas and incorporated herein as Exhibit “4”.
There are no documents of which the Court can take judicial notice that establish that MERS

2 See: http://www.mortgagedaily.com/forms/OccConsentOrderOnewest041311.pdf

either held the Promissory Note or was given the authority by INDYMAC, the original lender, to
assign the Note.
Defendant further alleges and according the San Mateo County Recorder’s Office, that first
Assignment of DOT (See Exhibit “2”) was purportedly signed by Mr. BRIAN BURNETT as the
“Assistant Secretary” of MERS, Defendant believes and alleges that Mr. BRIAN BURNETT was
never, in any manner whatsoever, appointed as the “Assistant Secretary” by the Board of
Directors of MERS, as required by MERS’ corporate by-laws and an adopted corporate resolution
by the Board of Directors of MERS. For that reason, Mr. BRIAN BURNETT never had, nor has,
any corporate or legal authority from MERS, or the lender’s successors and assigns, to execute
the purported “Assignment.” Furthermore Mr. BRIAN BURNETT purports to be ONEWEST’s
“Assistant Vice President” according the Substitution of Trustee (“SOT”) executed and effective
January 13, 2011 a true and correct copy of the SOT is attached to the Declaration of Alexander
B. Paragas and incorporated herein as Exhibit “5”.
This is a shell game where Mr. BRIAN BURNETT purports to be “Assistant Secretary” and
“Assistant Vice President” for two different entities at the same time, in reality Mr. BRIAN
BURNETT is an employee for ONEWEST, so that he can manufacture the paperwork necessary
for ONEWEST to hijack the mortgage and then foreclose on the property. Furthermore this is
example of how MERS is being used by its members to perpetrate a fraud.
On or about October 31, 2011 another MERS’ employee Mrs. WENDY TRAXLER as
“Assistant Secretary” once again assigned same DOT to ONEWEST (See Exhibit “4”).
Defendant is left to wonder, which Assignment is valid, and how is possible that two
employees of same entity, in this case MERS’, Mr. BRIAN BURNETT and Mrs. WENDY
TRAXLER, both “Assistant Secretaries”, did not communicated as to the Defendant’s Note and
DOT before the execution of the Assignments, or it appears that MERS’ employees preparing and
signing off on foreclosures without reviewing them, as the law requires.
It has been widely reported in the media that mortgage servicers, lenders, and major banks
have suspended over a hundred thousand foreclosures because relevant documents may not have
been properly prepared by ROBO-SIGNERS. Typically, the ROBO-SIGNERS were given phony
titles such as “Vice President” and “Assistant Secretary” to make it appear that they were bank
officers. In reality, ROBO-SIGNERS were typically, teens, hair stylists, Wal-Mart workers,
students, and unemployed persons of varying backgrounds.

The ROBO-SIGNING of affidavits and Assignments of Mortgage and all other mortgage
foreclosure documents served to cover up the fact that loan servicers cannot demonstrate the facts
required to conduct a lawful foreclosure.
Here in this instant case Mr. BRIAN BURNETT assigned DOT from MERS to ONEWEST on
or about January 3, 2011 (See Exhibit “2”), on or about May 24, 2011 Mrs. MOLLIE
SCHIFFMAN an “Assistant Vice President” of ONEWEST assigned interest of Plaintiffs’ Note
and DOT to the Plaintiff (See Exhibit “3”), yet on or about October 31, 2011 Mrs. WENDY
TRAXLER once again assigns same Note and DOT from MERS to ONEWEST (See Exhibit
“4”), this fabricated Assignments of DOT is nothing more than an attempt of Plaintiff and its
agents to hijack the mortgage and then foreclose on the property, in violation of California Civil
Law.
Defendant further alleges that purported Assignments of his Note and DOT, is attempt to pave
the way for Plaintiff to be able to claim an estate or interest in the Property adverse to that of
Defendant.
Defendant alleges that, on information and belief, ONEWEST, QUALITY LOAN SERVICE
CORPORATION, (hereinafter “QUALITY”), Plaintiff and/or its agents have been fraudulently
enforcing a debt obligation, fraudulently foreclosed on Plaintiff’s Subject Property in which they
did not have pecuniary, equitable or legal interest. Thus, ONEWEST’s, QUALITY’s and/or
Plaintiff’s conduct was part of a fraudulent debt collection scheme.
Defendant further alleges that on or about January 26, 2011 QUALITY recorded Notice of
Default (“NOD”), a true and correct copy of the NOD is attached to the Declaration of Alexander
B. Paragas and incorporated herein as Exhibit “6”.
Defendant further alleges, on or about May 4, 2011, had received Notice of Trustee’s Sale
(“NTS”) a true and correct copy of the NTS is attached to the Declaration of Alexander B.
Paragas and incorporated herein as Exhibit “7”. The sale was scheduled for May 23, 2011 at 1:00
p.m., but postponed to several times, until April 23, 2012, when sale of the Subject Property was
executed.
On or about April 23, 2012 at 12:31 p.m., Defendant filed voluntary Chapter 13 bankruptcy
protection in the United States Bankruptcy Court for the Northern District of California, Case No.
12-31228 a true and correct copy of the filing is attached to the Declaration of Alexander B.
Paragas and incorporated herein as Exhibit “8”, along with Motion to Extend Automatic Stay

pursuant U.S.C. Section 362(c)(3)(B), Notice of Opportunity for Hearing on Motion to Extend
Automatic Stay pursuant U.S.C. Section 362(c)(3)(B), and Declaration in Support of Hearing on
Motion to Extend Automatic Stay pursuant U.S.C. Section 362(c)(3)(B) a true and correct copy of
the filing is attached to the Declaration of Alexander B. Paragas and incorporated herein as
Exhibit “9”.
Plaintiff and its agents have been notified of the filings, but failed to object and proceeded
with the sale of the Subject Property in violation of the 11 U.S.C. Section 362, and conveyed all
its right, tile and interest in and to the Plaintiffs’ property.
On or about May 4, 2012 QUALITY recorded Trustee’s Deed Upon Sale (“TDUS”) a true and
correct copy of the TDUS is attached to the Declaration of Alexander B. Paragas and incorporated
herein as Exhibit “10”, that operated to prefect the lenders/beneficiary interest in the property of
the Defendant during the pendency of the Chapter 13 proceeding.
On or about June 11, 2012 U.S. Bankruptcy Judge, Mr. THOMAS E. CARLSON granted
Motion to Extend Automatic Stay a true and correct copy of the Order is attached to the
Declaration of Alexander B. Paragas and incorporated herein as Exhibit “11”, stating that
Automatic Stay, under 11 U.S.C. Section 362(a), shall remain in force for the duration of
Defendant’s Chapter 13 proceeding, until is terminated under 11 U.S.C. Section 362(c)(1), or a
Motion for Relief from Stay is granted under 11 U.S.C. Section 362(d), no Motion for Relief has
been filed by any Creditor, including Plaintiff herein.
On or about May 16, 2012, Plaintiff filed this instant case. The Unlawful Detainer Complaint
states that the Plaintiff obtained the right to possession by a Trustee’s sale and that title was
perfected and recorded [UD Complaint, ¶11]. Title is “duly perfected” when all steps have been
taken to make it perfect, that is, to convey to purchaser that which he has purchased, valid and
good beyond all reasonable doubt, Kessler v. Bridge (1958, Cal App Dep’t Super Ct) 161 Cal
App 2d Supp 837, 327 P2d 241, 1958 Cal App LEXIS 1814.
In this instant case, the title has not been perfected in Plaintiff’s since the title to the Property
was not conveyed to Plaintiff under the power of sale contained in the DOT and/or was not
conveyed in compliance with California Civil Code Section 2924 et seq., and in violation of 11
U.S.C. Section 362.
///
///

FHLMC DOES NOT HAVE STANDING TO BRING THE INSTANT ACTION

FHLMC lacks standing to bring the instant action for possession of the subject property. (1)
FHLMC is not a proper party to this action, and as such the court is without jurisdiction to grant
possession of the subject property to Plaintiff. Further, (2) Plaintiff or Plaintiff’s predecessor
failed to perform (2) conditions precedent (i) mandated by the original DOT, Section (20) which
requires a separate Notice and opportunity to cure in addition to the procedure established by
California Civil Code Section 2924 thereby cancelling the performance of Defendant, and (ii)
they failed to record the assignment of the deed of Trust a condition precedent to conducting a
foreclosure sale, (3) Plaintiff cannot prove that the non-judicial foreclosure which occurred,
strictly complied with the tenets of California Civil Code Section 2924 in order to maintain an
action for possession pursuant to California Code of Civil Procedure Section 1161.
1. Plaintiff failed to perform a condition precedent contained in the DOT prior to
bringing this action pursuant to California Code of Civil Procedure Section
1161, which mandates that the trustee attempting in writing prior to the
institution of a non-judicial foreclosure to allow defendant to cure the default;
2. Plaintiff failed to record the assignment of the Note and DOT prior to initiating
the foreclosure therefore the foreclosure was invalid under Section 2924;
3. The original promissory note executed by Defendant and his wife Mrs. Paragas
is invalid due to the ineffective method of assignment utilized by the parties,
assignment of the promissory note was not contained on the body of the page of
the Note, but rather was effectuated on a different paper, notwithstanding the
fact that there was sufficient room to draft the assignment on the face of the
note;
4. At the time of making the Note and DOT, Plaintiff’s predecessor ONEWEST
was operating its business from Inside California; however, ONEWEST was not
lawfully registered with the Secretary of State to conduct business pursuant to
California Corporations Code Section 1502 et seq. invalidating the Note and
DOT; and
5. The Trustee that conducted the non-judicial foreclosure sale was not a holder in
due course of the Original Note, because the Note was rendered non-negotiable
by (i) the manner in which the assignment was attempted, and (ii) the failure of

FHLMC to record the assignment, invalidating the Note, and resulting TDUS,
which denies Plaintiff standing to seek possession under California Code of
Civil Procedure Section 1161a.

LEGAL ANALYSIS

In this matter before the Bench, it becomes pellucidly clear that several fatal errors occurred
throughout the assignment of the Defendant’s Note and DOT, and ineffective non-judicial
foreclosure sale, which when weighed together have the effect of denying Plaintiff the necessary
standing to seek possession.
1. Plaintiff failed to perform a condition precedent contained in the DOT
prior to bringing this action pursuant to California Code of Civil
Procedure Section 1161.
This party is charged with the duty to perform and condition precedent prior to bringing the
instant action and failed to do so. Paragraph (20) of the DOT provides in pertinent part:

Neither borrow or lender may commence, join, or be joined to any judicial action
(as either an individual litigant, or the member of a class, that arises from the other
party’s actions pursuant to this security instrument or alleges that the other party has
breached any provision of, or any duty by reason of, this Security Instrument, until
such borrower or lender has notified the other party (with such notice given in
compliance with the requirements of Section 15) of such alleged breach and
afforded the other party hereto a reasonable period after giving of such notice to
take corrective action. If applicable law provides a time period which must elapse
before certain action can be taken, that time period will be deemed to be reasonable for
the purposes of this paragraph. The notice of acceleration and notice to cure given to
borrower pursuant to Section 22 and the notice of acceleration given to borrower
pursuant to Section 18 shall be deemed to satisfy the notice and opportunity to take
corrective action provisions of this Section 20. (Emphasis added.)

When there is an agreement between the Beneficiary and Trustor, such as the Condition Precedent
expressed in Paragraph 20 of the DOT a Foreclosure cannot take place before the condition is
satisfied. If the Beneficiary fails to carry out its obligation a subsequent foreclosure is invalid.
Haywood Lumber & Investment Co. V. Corbett (1934) 138 CA 644, 650, 33 P2d 41;
The DOT was drafted solely by the original beneficiary, Defendant had no part in drafting this
document, only the execution thereof. Defendant contends that the aforementioned language
contained in the DOT creates a condition precedent prior to either Plaintiff or Defendant bringing
any action, without first giving written notice to perform a covenant.

By virtue of the fact that an Unlawful Detainer involves a forfeiture of the tenant’s right to
possession, the Courts strictly construe the statutory proceedings which regulate it. Kwok v.
Bergren, (1982) 130 Cal.App.3d 596, 600,181 Cal.Rptr. 795. The failure of Plaintiff to perform a
condition precedent, to wit, failure to give Defendant notice and a reasonable period to cure a
breach of the terms and conditions, cancels the performance of Defendant, until the condition
precedent is performed according to the terms of the DOT.
In the absence of proof that Plaintiff timely performed the condition precedent giving
Defendant a chance to cure his breach of the terms and conditions of the DOT, Plaintiff cannot
proceed with the present action. The Plaintiff is a stranger who is not in privity with the
tenant/owner, and he must prove that he is authorized by the statute to prosecute an Unlawful
Detainer proceeding pursuant to a properly conducted foreclosure sale. Therefore, the tenant can
raise the limited defense that the foreclosure sale is invalid because it was not processed ,in
compliance, with the statutes regarding foreclosures, and the Plaintiff has the burden of proof that
the foreclosure statutes were satisfied by performance of all of the notices and procedures
required.
2. Plaintiff failed to record the assignment of the Note and DOT prior to
initiating the foreclosure therefore the foreclosure was invalid under
Section 2924.
There is also a condition precedent to enforcing the note by an assignee, see California Civil
Code Section 2932.5 which states:

2932.5. Where a power to sell real property is given to a mortgagee, or
other encumbrancer, in an instrument intended to secure the payment of
money, the power is part of the security and vests in any person who by
assignment becomes entitled to payment of the money secured by the
instrument. The power of sale may be exercised by the assignee if the
assignment is duly acknowledged and recorded. (emphasis added).

The assignment was not Recorded

The assignment was not recorded. Since FHLMC failed to record the assignment they were not
entitled to enforce the Note or to foreclose on this Property therefore the Title was not perfected
under Section 2924 by a foreclosure sale and was not duly carried out under Section 2924 and was
wholly defective and this Plaintiff has no standing in this Unlawful Detainer action.
In addition to recording the assignment, the Beneficiary must also deliver the Original Note to

the Trustee in order for the Trustee to conduct the foreclosure sale. Haskell V. Matranga (1979)
CA 3d. 471, 479-480, 160 CR 177;
In the Case of a Mortgage with a power of Sale an assignee can only enforce the power of sale
if the assignment is recorded, since the assignee’s authority to conduct the sale must appear in the
public records, New York Life Insurance Co. V. Doane, (1936) 13 CA 2d. 233, 235-237, 56 P2d.
984, 56 ALR 224;
3. Plaintiff is not a holder in due course of the original promissory Note
executed by the borrower, because the method of assignment utilized by the
parties to indorse the assignment rendered the note non-negotiable as a
matter of law.
The assignment of the original promissory Note was invalidated by the manner in which the
assignment was attempted. It has long been settled that the assignment of a Note must be reflected
on the body of the note, as long as there is room available. If room to draft the assignment is
available, but the party making the assignment drafts the assignment on a separate piece of paper,
the Note is no longer negotiable. The public policy is to avoid one party from making multiple
assignments of the same property, at the same time, and defrauding each assignee of their
consideration for the assignment. In Privus vs. Bush, (1981) 118 Cal.App.3d 1003, the court held
that a promissory Note executed as security for a DOT was rendered non-negotiable because the
endorsement by the assignor was not contained on the face of the Note, notwithstanding the fact
that there was sufficient space on the Note to effectuate the assignment.
The Privus, supra., Court held at pages 106-107, in pertinent part: California Uniform
Commercial Code Section 3302, Subdivision (1) provides, “A holder in due course is a holder
who takes the instrument (a) For value; and (b) In good faith; and (c) without notice that it is
overdue or has been dishonored or of any defense against or claim to it on the part of any person.”
In the present case, the trial Court did not question Defendant’s status as a holder in due course
because of any failure to satisfy the value, good faith, or no notice requirements. Rather, the Court
concluded that Defendant is not a holder in due course because he is not a holder at all, an
essential prerequisite to qualifying as a holder in due course. A holder is “a person who is in
possession of … an instrument …, issued or indorsed to him ….” (Section 1201(20).) The trial
Court ruled that the Williams’ signature on the paper attached to the promissory Note did not
qualify as an endorsement because there was adequate space for the endorsement on the note

itself.” (emphasis added).
Section 3202(2) states, “An endorsement must be written by or on behalf of the holder and on
the instrument or on a paper so firmly affixed thereto as to become a part thereof.” Thus, the code
does not say whether or not such a paper, called an “allonge,” may be used when there is still
room for an endorsement on the instrument itself. Nor has any reported California case dealt with
this issue under the code. The code does, however, instruct us as to where to look for the law with
which to resolve the issue. Section 1103 states that, “(u)nless displaced by the particular
provisions of this code, the principles of law and equity, including the law merchant … shall
supplement its provisions,” and that section’s Uniform Commercial Code comment Notes “the
continued applicability to commercial contracts of all supplemental bodies of law except insofar
as they are explicitly displaced by this Act.” Therefore, since the Commercial Code has not
addressed the issue, we decide the present case according to the rules on allonges of the law
merchant.” Privus vs. Bush, (1981) 118 Cal.App.3d 1003,1007.
“Although the cases are not unanimous, the majority view is that the law merchant permits the
use of an allonge only when there is no longer room on the negotiable instrument itself to write an
indorsement. (See generally Annot., Indorsement of Negotiable Instrument By Writing Not On
Instrument Itself (1968) 19 A.L.R.3d 1297, 1301-1304; Annot., Indorsement of Bill or Note by
Writing Not On Instrument Itself (1928) 56 A.L.R. 921, 924-926.) Typical of the majority
position is Bishop v. Chase, (1900) 156 Mo. 158, 56 S.W. 1080. There it was held that the general
rule is that an instrument could be indorsed only by writing on the instrument itself, but that an
exception to the rule allows the use of an attached paper “when the back of the instrument is so
covered as to make it necessary.” (Id., 156 Mo. 158, 56 S.W. at p. 1083.) Thus, the Court
invalidated an attempted endorsement by allonge when “there was plenty of room upon the back
of the Note to have made the endorsement, and the only excuse for not doing so was that it was
more convenient to assign it on a separate paper.” (Id., 156 Mo. 158, 56 S.W. at p. 1084.)” Privus
vs. Bush, (1981) 118 Cal.App.3d 1003, 1007.
Here, the original Note executed had sufficient space for an endorsement, however, the note
does not contain an endorsement, and Defendant has never seen a document which purports to
assign the note to a third party. As such, Plaintiff is not a holder in due course, nor was the trustee
who conducted the non-judicial foreclosure a holder in due course. Such failures on the part of the
trustee who conducted the non-judicial foreclosure clearly demonstrate that the sale was not

conducted pursuant to the strict mandates of California Civil Code Section 2924.
A non-judicial foreclosure sale under the power-of-sale in a DOT or Mortgage, on the other
hand, must be conducted in strict compliance with its provisions and applicable statutory law. A
trustee’s powers and rights are limited to those set forth in the DOT and laws applicable thereto.
(See, e.g., Fleisher v. Continental Auxiliary Co., (1963) 215 Cal.App.2d 136, 139, 30 Cal.Rptr.
137; Woodworth v. Redwood Empire Sav. & Loan Assn., (1971) 22 Cal.App.3d 347, 366, 99
Cal.Rptr. 373). No Court order authorizing or approving the sale is involved. A sale under the
power of sale in a DOT or Mortgage is a “private sale.” Walker v. Community Bank, (1974) 10
Cal.3d at p. 736, 111 Cal.Rptr. 897. (emphasis added).
The statutory procedures governing the conduct of such sales are found in Civil Code Sections
2924, 2924a-2924h, which set forth the time periods in which to comply with certain
requirements, the persons authorized to conduct the sale, the requirements of Notice of Nefault
and Election to Sell and for cure of default and reinstatement, inter alia. The sale is concluded
when the trustee accepts the last and highest bid. (Civil Code Section 2924h, Subd. (c)). Coppola
vs. Superior Court, (1989) 211 Cal.App.3d 848, 868.
Here, Plaintiff’s predecessor rendered the note non-negotiable by failing to list the assignment
on the fact of the Note, notwithstanding the fact that sufficient space existed. Thus, the Note could
not be the security interest utilized for execution of the non-judicial foreclosure pursuant to
California Civil Code Section 2924. Plaintiff cannot prove that the foreclosure strictly complied
with Section 2924 as mandated. Thus, the TDUS is invalid, and does not confer upon Plaintiff a
right to seek possession of the subject premises pursuant to California Code of Civil Procedure
Section 1161a. Therefore, Plaintiff does not have standing to prosecute the instant action, and the
matter must be dismissed or in the alternative Defendant is entitled to Summary Judgment.
As a General Rule a Defendant in an Unlawful Detainer cannot test the strength or validity of
Plaintiff’s Title Vella v. Hudgins, (1977) 20 C3d 251, 255, 142 CR 414, 572 P2d 28; Old
National Financial Services, Inc. v. Seibert, (1987) 194 CA 3d 460, 465, 289 CR 728; However,
a different rule applies in an Unlawful Detainer which is brought by a purchaser after a
foreclosure sale. His right to obtain possession is based on the fact that the property has been
“Duly Sold” by foreclosure proceedings California Code of Civil Procedure Section 1161a, and
therefore it is necessary that the Plaintiff “Prove” that each of the statutory procedures have been
complied with as a condition for obtaining possession of the property Vella V. Hudgins Supra;

Stephens, Pertain and Cunningham V. Hollis (1987) 196 CA3d 948, 953, 242 CR 251.
In the first instance, it appears that Plaintiff is not even the real party in interest. Plaintiff has
the burden of proving that it is the proper Plaintiff and that the TDUS resulted from a properly
conducted non-judicial foreclosure sale.
Again as stated in Privus vs. Bush, (1981) 118 Cal.App.3d 1003, the court held that a
promissory note executed as security for a DOT was rendered non-negotiable because the
endorsement by the assignor was not contained on the face of the Note, notwithstanding the fact
that there was sufficient space on the Note to effectuate the assignment and thus the Plaintiff was
not a holder in due course, notwithstanding their title as a “Holders”.
California Code of Civil Procedure Section 1161(3) mandates that in order to seek possession
after a sale pursuant to Civil Code Section 2924, the Plaintiff’s interest must be “duly perfected”.
California Code of Civil Procedure Section 1161 provides in pertinent part:

(b) In any of the following cases, a person who holds over and continues in possession
of a manufactured home, mobile home, floating home, or real property after a three-day
written notice to quit the property has been served upon the person, or if there is a
subtenant in actual occupation of the premises, also upon such subtenant, as prescribed
in Section 1162, may be removed there from as prescribed in this chapter:

(3) Where the property has been sold in accordance with Section 2924 of the Civil
Code, under a power of sale contained in a deed of trust executed by such person, or a
person under whom such person claims, and the title under the sale has been duly
perfected.

Here, it has been shown that Plaintiff, FHLMC did not perfect its interest because the original
assignment rendered the note non-negotiable, and secondarily they failed to record the assignment
prior to commencing the foreclosure, thus, the non-judicial foreclosure could not lawfully
proceed, and the trustee did not strictly comply with the mandates of Section 2924.
A non-judicial foreclosure sale under the power-of-sale in a DOT or Mortgage, on the other
hand, must be conducted in strict compliance with its provisions and applicable statutory law. A
trustee’s powers and rights are limited to those set forth in the deed of trust and laws applicable
thereto. (See, e.g., Fleisher v. Continental Auxiliary Co., (1963) 215 Cal.App.2d 136, 139, 30
Cal.Rptr. 137. Therefore, the Court would properly exercise its discretion pursuant to California
Code of Civil Procedure Section 631.8, by granting the Motion to Dismiss for lack of standing on
the part of Plaintiff or under California Code of Civil Procedure Section 437C and Granting
Summary Judgment in Favor of Defendant.

LEGAL STANDARD

The standard for granting summary judgment

Summary Judgment shall be granted if all the papers submitted show there is no triable issue of
material fact and that the moving party is entitled to a judgment as a matter of law. Code Civil
Procedure Section 437c(c). A Defendant is entitled to Summary Judgment if the record
establishes that none of the Plaintiff’s asserted causes of actions can prevail as a matter of law.
Molko v. Holy Spirit Ass’n, (1988) 46 CAl.3d 1092, 1107. A Defendant moving for Summary
Judgment must conclusively negate a necessary element of the Plaintiff’s case and show there is
no material issue of fact that requires a trial. Ibid.
The moving Defendant has the burden of introducing evidence that the Plaintiff’s action is
without merit on any legal theory. Hulett v. Farmers Insurance Exchange, (1992) 10 Cal.App.
4th 1051, 1064. Once the Defendant has met that burden, the burden shifts to the Plaintiff to show
that a triable issue of material fact exists. Code Civil Procedure Section 437c(o)(1). But if the
Defendant fails to meet that burden, the adverse party has no burden to demonstrate the claim’s
validity, and the court must deny the motion. Hulett, supra, 10 Cal.App.4th at 1064.
Instead of introducing evidence that would negate the Plaintiff’s action, a moving Defendant
may introduce the Plaintiff’s own factually devoid discovery responses to demonstrate that it has
no case. Union Bank v. Superior Court, (1995) 31 Cal.App.4th 573, 589-593. The burden of
proof would then be on the Plaintiff to introduce evidence that would show a triable issue of
material fact. Id., at 593. But the Defendant does not meet its burden merely by asserting that the
Plaintiff has no evidence. Hagen v. Hickenbottom, (1995) 41 Cal.App.4th 168, 186. Instead, the
Defendant must submit discovery responses that would conclusively foreclose any cause of
action. Id. at 186-187.
When no or insufficient affidavits or other evidence is submitted to demonstrate the absence of
an issue of material fact, the Court may treat the motion as in legal effect one for Judgment on the
pleadings. White v. County of Orange, (1985) 166 Cal.App.3d 566, 569. In that case, the motion
performs the same function as a general demurrer. Ibid. A general demurrer will not test whether
a complaint is ambiguous or uncertain or states essential facts only inferentially or conclusionary.
Johnson v. Mead, (1987) 191 Cal.App.3d 156, 160. The Defendants’ failure to challenge those
defects by way of special demurrer waives them. Hooper v. Deukmejian, (1981) 122 Cal.App.3d

987, 994.

CONCLUSION

Defendant respectfully submits his Motion to Summary Judgment and requests that the court
grant the motion as framed herein.

Respectfully submitted;

DATED: August 24, 2012 LAW OFFICES OF TIMOTHY L. MCCANDLESS

_____________________________________
Timothy L. McCandless, Esq.
Attorney for Defendant(s): Alexander B. Paragas

View into the enemy

23 Aug

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Thursday, August 23, 2012 6:21 AM
To: Charles Cox
Subject: View into the enemy

Older newsletter but interesting…they’re organized, we’re not!

Charles
Charles Wayne Cox
Email: mailto:Charles or Charles
Websites: www.BayLiving.com; and www.LDApro.com
1969 Camellia Ave.
Medford, OR 97504-5403
(541) 727-2240 direct
(541) 610-1931 eFax

Paralegal; CA Licensed Real Estate Broker; Forensic Loan Analyst. Litigation Support and Expert Witness Services.

UTA Info.pdf
UTA Newsletter.pdf

JAVAHERI v. JPMorgan Chase Bank, NA, Dist. Court, CD California 2012 …. Javaheri(“Wellworth Property”) goes down … JPMorgan’s Motion for Summary Judgment GRANTED and it gets WORSE from there …

22 Aug

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Tuesday, August 21, 2012 5:28 AM
To: Charles Cox
Subject: JAVAHERI v. JPMorgan Chase Bank, NA, Dist. Court, CD California 2012 …. Javaheri("Wellworth Property") goes down … JPMorgan’s Motion for Summary Judgment GRANTED and it gets WORSE from there …

Prepare to be incensed!

C

<excerpts>

The Court agrees with the majority of courts in the Ninth Circuit and finds that HOLA preempts section 2923.5. The Court therefore GRANTS JPMorgan’s Motion for Summary Judgment on Javaheri’s claim for violation of California Civil Code section 2923.5 as it relates to the Wellworth Property.

. . .

Here, no reasonable jury could conclude that Javaheri’s Note had been sold as part of a securitized trust. The pool number was only a partial entry of what was written in the margin of the Deed of Trust, and the only possible connection to some heretofore unnamed private investors is that the number entered into "Pool Talk" corresponds with a CUSIP number that had a Preliminary status in 2011—several months after the lawsuit was originated and at least two-and-a-half years since the Note was allegedly sold as a securitized trust. While the number written on the Deed of Trust bears a striking resemblance to a number associated with a securitized trust, Plaintiff simply fails to produce sufficient evidence to establish that this is anything more than a rare coincidence. The Court therefore finds that Javaheri has failed to establish that JPMorgan does not own his Note and Deed of Trust.

Javaheri contends finally that the Substitution of Trustee is invalid because it was robo-signed. …..

Indeed, for the purposes of this Motion, the Court finds that the signature of Deborah Brignac on the Substitution of Trustee was signed by a different person than that purporting to be Deborah Brignac on the Notice of Trustee’s Sale. ….. While the allegation of robo-signing may be true, the Court ultimately concludes that Javaheri lacks standing to seek relief under such an allegation. …..

In sum, Javaheri fails to establish that JPMorgan is not the owner, holder, or beneficiary of the Note or that it lacked the authority to foreclose, and he lacks standing to assert his robo-signing contentions. The Court therefore GRANTS JPMorgan’s Motion on Javaheri’s wrongful foreclosure claim as it pertains to the Wellworth Property.

____________________________

JAVAHERI v. JPMorgan Chase Bank, NA, Dist. Court, CD California 2012

DARYOUSH JAVAHERI, Plaintiff,
v.
JPMORGAN CHASE BANK, N.A. and DOES 1-150, inclusive, Defendants.

Case No. 2:10-cv-08185-ODW (FFMx).

United States District Court, C.D. California.

August 13, 2012.

ORDER GRANTING DEFENDANT’S MOTION FOR PARTIAL SUMMARY JUDGMENT [58]

OTIS D. WRIGHT, II, District Judge.

I. INTRODUCTION

Defendant JPMorgan Chase Bank, N.A. moves for partial summary judgment on Plaintiff Daryoush Javaheri’s Second Amended Complaint ("SAC"). (ECF No. 58.) The Court has carefully considered the arguments in support of and in opposition to the JPMorgan’s Motion. For the following reasons, JPMorgan’s Motion is GRANTED.

II. FACTUAL BACKGROUND

On November 14, 2007, Javaheri obtained a $2,660,000.00 mortgage loan from Washington Mutual Bank, FA to finance his property located at 10809 Wellworth Avenue, Los Angeles, California 90024 (the "Wellworth Property"). (Eric Waller Decl. Ex. 4.) In connection with the loan, Javaheri executed a promissory note (the "Note") and a Deed of Trust encumbering the property. (Waller Decl. Exs. 4, 6.) The Deed of Trust identifies Washington Mutual as the lender and Chicago Title Company as the Trustee. (Waller Decl. Ex. 6.)

Javaheri asserts that in November 2007, Washington Mutual transferred the Note to Washington Mutual Mortgage and Securities Corporation. (SAC ¶ 14.) There is no evidence of this. Javaheri also alleges that the Note evidencing his indebtedness was then sold as an investment security to unknown private investors. (SAC ¶¶ 14, 28.) Javaheri identifies this security as Standard and Poor CUSIP number 31379XQC2, Pool Number 432551. (Douglas Gillies Decl. Ex. 5.) Javaheri took this Pool Number from the Deed of Trust and entered it into a "Pool Talk" form on the Fannie Mae website. (Michael B. Tannatt Decl. Ex. 1, Interrogatory No. 5.) But the number on the Deed of Trust was handwritten and read "XXXX-X-XX." (Waller Decl. Ex. 6.) JPMorgan maintains that the number on the Deed of Trust corresponds to the Assessor’s Parcel Number. (Mot. 11.) The Assessor’s Parcel Number is "XXXX-XXX-XXX." (Jessica Snedden Decl. Exs. 1, 4, 6.)

On September 25, 2008, the Office of Thrift Supervision closed Washington Mutual and appointed the Federal Deposit Insurance Corporation as receiver. (Waller Decl. Ex. 1.) JPMorgan acquired certain of Washington Mutual’s assets by entering into a Purchase and Assumption ("P&A") Agreement with the FDIC. (Waller Decl. Ex. 2.) Paragraph 3.1 of the P&A Agreement states, "Notwithstanding Section 4.8, the assuming Bank specifically purchases all mortgage servicing rights and obligations of the Failed Bank." (Waller Decl. Ex. 2.)

In March 2010, JPMorgan sent Javaheri a Notice of Collection Activity letter stating that he was in default of his mortgage because he had not made any payments since November 2009. (SAC Ex. 5.) Javaheri’s attorney at the time responded to the letter, requesting that all future communication related to the loan be conducted through his office. (SAC Ex. 6.)

On May 3, 2010, California Reconveyance Company ("CRC") was substituted as the Trustee for the loan in place of Chicago Title Company. (Snedden Decl. Ex. 1.) Also on May 3, 2010, CRC recorded a Notice of Default and Election to Sell the Wellworth Property in the Los Angeles County Recorder’s Office. (Snedden Decl. Ex. 2.)

On May 14, 2010, CRC recorded a Notice of Rescission and a second Notice of Default. (Snedden Decl. Exs. 3, 4.) CRC then mailed a second Notice of Default to Javaheri on or about May 24, 2010, and again on June 8, 2010. (Snedden Decl. Ex. 5.) On August 16, 2010, a Notice of Trustee’s Sale was recorded and subsequently served on Javaheri, published in a local newspaper, and posted on the Wellworth Property. (Snedded Decl. Exs. 6-9.)

As a result of these events, on October 29, 2010, Javaheri filed a Complaint in this Court against JPMorgan and CRC. (ECF No. 1.) Both Javaheri’s original Complaint and his subsequent First Amended Complaint were dismissed for failure to state claims. (ECF Nos. 20, 28.) On April 12, 2011, Javaheri filed his SAC against JPMorgan. (ECF No. 29.) JPMorrgan filed a Motion to Dismiss (ECF No. 30), which the Court partially granted, leaving only claims for: (1) violation of California Civil Code section 2923.5; (2) wrongful foreclosure; (3) quasi-contract; (4) quiet title; and (5) declaratory and injunctive relief. (ECF No. 36.)

On December 5, 2011, Javaheri filed a Complaint in another action that was nearly identical to the SAC in this case, except that it concerned Javaheri’s condominium on Wilshire Boulevard instead of his house on Wellworth. Javaheri v. JPMorgan Chase Bank N.A., No. CV11-10072-ODW (FFMx) (C.D. Cal. Dec. 5, 2011). Due to the cases’ similarities, the Court consolidated the later-filed case regarding Plaintiff’s condo (CV11-10072) with this earlier-filed case concerning the Wellworth Property (CV10-8185). (ECF No. 50.)

On June 21, 2012, JPMorgan filed a Motion for partial Summary Judgment as to the remaining claims from Javaheri’s SAC. (ECF No. 58.) JPMorgan’s Motion pertains solely to the Wellworth Property originally associated with case number CV10-8185; it does not address Javaheri’s condo.

III. LEGAL STANDARD

Summary judgment is appropriate when, after adequate discovery, the evidence demonstrates that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). A disputed fact is "material" where the resolution of that fact might affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). An issue is "genuine" if the evidence is sufficient for a reasonable jury to return a verdict for the nonmoving party. Id. Where the moving party’s version of events differs from the nonmoving party’s version, "courts are required to view the facts and draw reasonable inferences in the light most favorable to the party opposing the summary judgment motion." Scott v. Harris, 550 U.S. 372, 378 (2007) (internal quotation marks omitted).

The moving party bears the initial burden of establishing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). The moving party may satisfy that burden by demonstrating to the court that "there is an absence of evidence to support the nonmoving party’s case." Id. at 325.

Once the moving party has met its burden, the nonmoving party must go beyond the pleadings and identify specific facts that show a genuine issue for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Celotex, 477 U.S. at 323-34; Liberty Lobby, 477 U.S. at 248. Only genuine disputes over facts that might affect the outcome of the suit will properly preclude the entry of summary judgment. Anderson, 477 U.S. at 248; see also Arpin v. Santa Clara Valley Transp. Agency, 261 F.3d 912, 919 (9th Cir. 2001) (finding that the non-moving party must present specific evidence from which a reasonable jury could return a verdict in its favor).

The evidence presented by the parties on summary judgment must be admissible. See Fed. R. Civ. P. 56(e). "[E]vidence that is merely colorable or not significantly probative does not present a genuine issue of material fact." Addisu v. Fred Meyer, 198 F.3d 1130, 1134 (9th Cir. 2000). Likewise, conclusory or speculative testimony in affidavits and moving papers is insufficient to raise genuine issues of fact and defeat summary judgment. Thornhill’s Publ’g Co. v. GTE Corp., 594 F.2d 730, 738 (9th Cir. 1979). Conversely, a genuine dispute over a material fact exists if there is sufficient evidence supporting the claimed factual dispute, requiring a judge or jury to resolve the differing versions of the truth. Anderson, 477 U.S. at 253.

Finally, it is not the task of the district court "to scour the record in search of a genuine issue of triable fact. [Courts] rely on the nonmoving party to identify with reasonable particularity the evidence that precludes summary judgment." Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir. 1996) (quoting Richards v. Combined Ins. Co., 55 F.3d 247, 251 (7th Cir. 1995)); see alsoCarmen v. S.F. Unified Sch. Dist., 237 F.3d 1026, 1031 (9th Cir. 2001) ("The district court need not examine the entire file for evidence establishing a genuine issue of fact, where the evidence is not set forth in the opposing papers with adequate references so that it could conveniently be found.").

IV. DISCUSSION

A. Violation of Civil Code § 2923.5

Javaheri’s claim for violation of California Civil Code section 2923.5 is preempted by the Home Owner’s Loan Act ("HOLA"), 12 U.S.C. §§ 1461-1468c. In California, section 2923.5 requires mortgagees, beneficiaries, or authorized agents to communicate with borrowers facing foreclosure. Cal. Civ. Code § 2923.5(a)(1). Section 2923.5 is a state law that attempts to regulate banks’ lending and servicing activities, and is "exactly the sort of statute that is proscribed by the HOLA." McNeely v. Wells Fargo bank, N.A., No. SACV 11-01370 DOC (MLGx), 2011 WL 6330170, at *3 (C.D. Cal. Dec. 15, 2011).

HOLA is a comprehensive financial statute providing for the regulation of federal savings banks and associations by the Office of Thrift Supervision ("OTS"). See 12 U.S.C. § 1464; Ngoc Nguyen v. Wells Fargo Bank, N.A., 749 F. Supp. 2d 1022, 1031 (N.D. Cal. 2010). "Through HOLA, Congress gave the OTS broad authority to issue regulations governing federal savings associations." Ngoc Nguyen, 749 F. Supp. 2d at 1031 (citing 12 U.S.C. § 1464; Silvas v. E*Trade Mortg. Corp., 514 F.3d 1001, 1005 (9th Cir. 2008)). In exercising its authority, the OTS "occupies the entire field of lending regulation for federal savings associations." 12 C.F.R. § 560.2. Indeed, the Ninth Circuit has noted that HOLA is "so pervasive as to leave no room for state regulatory control." Silvas, 514 F.3d at 1004-05 (quoting Conference of Fed. Sav. & Loan Ass’ns v. Stein, 604 F.2d 1256, 1257 (9th Cir. 1979), aff’d, 445 U.S. 921).

Here, the loan originator, Washington Mutual Bank, FA, was a federally chartered savings bank at the time the loan originated. (Waller Decl. Ex 1.); see Rodriguez v. JPMorgan Chase & Co.,809 F. Supp. 2d 1291, 1295 (S.D. Cal. 2011). Although JPMorgan is not a federal savings bank and is not regulated by the OTS, the same HOLA preemption analysis still applies because the loan originated with Washington Mutual. Rodriguez, 809 F. Supp. 2d at 1295; see Deleon v. Wells Fargo Bank, N.A., 729 F. Supp. 2d 1119, 1126 (N.D. Cal. 2010).

While the California Court of Appeals, in Mabry v. Superior Court, 185 Cal. App. 4th 208, 213-19 (2010), has construed section 2923.5 to be outside the scope of preemption, the weight of federal authority supports a finding that HOLA preempts section 2923.5. See, e.g., Tanguinod v. World Sav. Bank, FSB, 755 F. Supp. 2d 1064, 1073-74 (C.D. Cal. 2010); Giannini v. Am. Home Mortg. Servicing, Inc., No. C11-04489 TEH, 2012 WL 298254, at *6-8 (N.D. Cal. Feb 1, 2012). "Because the issue is not one of interpreting state law but rather of federal preemption, `the [Court] is not bound by the decision in Mabry.‘" McNeely, 2011 WL 6330170, at *3 (quotingTanguinod, 755 F. Supp. 2d at 1074).

The Court agrees with the majority of courts in the Ninth Circuit and finds that HOLA preempts section 2923.5. The Court therefore GRANTS JPMorgan’s Motion for Summary Judgment on Javaheri’s claim for violation of California Civil Code section 2923.5 as it relates to the Wellworth Property.

B. Wrongful Foreclosure

Javaheri’s claim for wrongful foreclosure relies on three contentions: (1) that JPMorgan is not owner, holder, or beneficiary of the Note; (2) that JPMorgan does not have the authority to foreclose; and (3) that the signatures of Deborah Brignac were robo-signed. The Court addresses each of these arguments in turn.

1. Ownership of the Note

Javaheri alleges that JPMorgan did not own his Note and therefore did not have the right to foreclose. (SAC ¶ 30.) The Second Amended Complaint states that Washington Mutual transferred the Note to Washington Mutual Mortgage Securities Corporation in November 2007, and the Note was then sold to an investment trust. (SAC ¶ 14.)

To support this contention, Javaheri purports to provide evidence of the sale. The number "XXXX-X-XX" is handwritten in the margin of the Deed of Trust.[1] (Waller Decl. Ex. 6.) In April 2011, Counsel for Javaheri entered the number "432551" as a Pool Number in a form titled "Pool Talk" that was publicly available on Fannie Mae’s website.[2] (Gillies Decl. Ex. 5.) But the number that Counsel entered differs in both form and substance from the number written on the deed of trust: it includes neither the dashes nor the last digit. The only information available on the "Pool Talk" form is that the pool number "432551" corresponds to the CUSIP number "31379XQC2" and that as of 2011, the status of this security was "Preliminary." (Gillies Decl. Ex. 5.) Aside from this, Javaheri provides no information on who the private investors are, when the Note was sold, how much it was sold for, or any other evidence that would connect the Note to this loan pool.

JPMorgan’s explanation for the number "XXXX-X-XX" handwritten in the margin of the Deed of Trust is that it refers to the Assessor’s Parcel Number for the Wellworth Property. (Mot. 11.) The Assessor’s Parcel Number for the Wellworth Property is "XXXX-XXX-XXX". (Snedden Decl. Exs. 1, 4, 6.) The parcel number and the handwritten number on the Deed of Trust are the same, and in the same format, except that the handwritten number omits the zeros contained in the Assessor’s Parcel Number.

Ordinarily, summary judgment cannot lie when there is a "genuine" issue of material fact.Anderson, 477 U.S. at 248. But if the evidence is merely colorable or not sufficiently probative, then the Court may grant summary judgment. Id. at 249-50. Only if genuine factual issues may reasonably be resolved in favor of either party should the case proceed to trial. Id. at 250. "Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial." Matsushita Elec. Indus. Co., Ltd., 475 U.S. at 587 (internal quotation marks omitted).

Here, no reasonable jury could conclude that Javaheri’s Note had been sold as part of a securitized trust. The pool number was only a partial entry of what was written in the margin of the Deed of Trust, and the only possible connection to some heretofore unnamed private investors is that the number entered into "Pool Talk" corresponds with a CUSIP number that had a Preliminary status in 2011—several months after the lawsuit was originated and at least two-and-a-half years since the Note was allegedly sold as a securitized trust. While the number written on the Deed of Trust bears a striking resemblance to a number associated with a securitized trust, Plaintiff simply fails to produce sufficient evidence to establish that this is anything more than a rare coincidence. The Court therefore finds that Javaheri has failed to establish that JPMorgan does not own his Note and Deed of Trust.

2. Authority to foreclose

Javaheri also argues that JPMorgan cannot produce the original Note and that there has been no recording of the beneficial interest in the Note to Chase.

The SAC states, "Neither WaMu, Chicago Title, CRC, nor Chase has recorded a transfer of the beneficial interest in the Note to Chase." (SAC ¶ 29.) Javaheri is correct in this assertion, and JPMorgan offer no evidence to counter it. But this argument bears no weight on JPMorgan’s authority to foreclose. California courts have routinely held that a transfer of assignment of a debt does not need to be recorded. See, e.g., Herrera v. Fed. Nat’l Mortg. Assn., 205 Cal. App. 4th 1495, 1506 (2012); Fontenot v. Wells Fargo Bank, N.A., 198 Cal. App. 4th 256, 271-72 (2011).

Javaheri also argues that JPMorgan cannot produce the original Note. (SAC ¶ 31.) This is also true. (Waller Decl. Ex. 5.) Nevertheless, numerous courts have concluded that production or possession of the original promissory note is not necessary for non-judicial foreclosure under California law. See, e.g., Saldate v. Wilshire Credit Corp., 686 F. Supp. 2d 1051, 1068 (E.D. Cal. 2010); Ngoc Nguyen v. Wells Fargo Bank, N.A., 749 F. Supp. 2d 1022, 1035 (N.D. Cal. 2010). The Court agrees.

Therefore, although JPMorgan cannot produce the original Note and has not recorded its interest in the Note, these actions are not required for non-judicial foreclosure in California and thus are inapposite to Javaheri’s claim for wrongful foreclosure.

3. Robo-signing

Javaheri contends finally that the Substitution of Trustee is invalid because it was robo-signed. (SAC ¶ 39.) According to Javaheri, surrogate signers allegedly signed several documents on behalf of and in the name of Deborah Brignac, without reading or understanding the documents’ contents. (Gillies Decl. Ex. 4.) Indeed, for the purposes of this Motion, the Court finds that the signature of Deborah Brignac on the Substitution of Trustee was signed by a different person than that purporting to be Deborah Brignac on the Notice of Trustee’s Sale. (Gillies Decl. Ex. 6.)

While the allegation of robo-signing may be true, the Court ultimately concludes that Javaheri lacks standing to seek relief under such an allegation. District Courts in numerous states agree. See, e.g., Repokis v. Deutsche Bank Nat’l Trust Co., No. 11-15145, 2012 WL 2373350, at *2 (E.D. Mich. June 25, 2012); In re Mortgage Electronic Registration Systems (MERS) Litigation, No. CV 10-1547-PHX-JAT, 2012 WL 932625, at *3 (D. Ariz. Mar. 20, 2012) see also See Bleavins v. Demarest, 196 Cal. App. 4th 1533, 1542 (2011) ("Someone who is not a party to a contract has no standing to challenge the performance of the contract. . . ." (internal quotation marks and alterations omitted)).

Only someone who suffered a concrete and particularized injury that is fairly traceable to the substitution can bring an action to declare the assignment of CRC as void. In re Mortgage Electronic Registration Systems (MERS) Litigation, 2012 WL 932625, at *3. The Substitution of Trustee in this case replaces Chicago Title Company with CRC as trustee of the Deed of Trust. (Snedden Decl. Ex. 1.) Javaheri was not party to this assignment, and did not suffer any injury as a result of the assignment. Instead, the only injury Javaheri alleges is the pending foreclosure on his home, which is the result of his default on his mortgage. The foreclosure would occur regardless of what entity was named as trustee, and so Javaheri suffered no injury as a result of this substitution. See Bridge v. Aames Capital Corp., No. 1:09 CV 2947, 2010 WL 3834059, at *4 (N.D. Ohio Sept. 29, 2010) ("Plaintiff is still in default on [his] mortgage and subject to foreclosure. As a consequence, Plaintiff has not suffered any injury as a result of the assignment.")

In sum, Javaheri fails to establish that JPMorgan is not the owner, holder, or beneficiary of the Note or that it lacked the authority to foreclose, and he lacks standing to assert his robo-signing contentions. The Court therefore GRANTS JPMorgan’s Motion on Javaheri’s wrongful foreclosure claim as it pertains to the Wellworth Property.

C. Quasi-Contract

Javaheri’s claim for quasi-contract alleges that JPMorgan was unjustly enriched when Javaheri paid it monthly mortgage payments because JPMorgan was not the owner, lender, or beneficiary of the note. (SAC ¶ 42.)

In its previous Order, the Court denied JPMorgan’s Motion to Dismiss the quasi-contract claim on the basis that "if indeed JPMorgan did not own the Note yet received payments therefrom, those payments may have been received unjustly." (Order 8.) The Court premised its decision on Javaheri’s well-pleaded allegations that JPMorgan was not the rightful owner of the Note, and so was unjustly enriched by collecting mortgage payments from Javaheri. (SAC ¶ 42.)

These allegations were sufficient to withstand a Rule 12(b)(6) motion to dismiss, but to withstand summary judgment, Javaheri must provide admissible evidence demonstrating that the Note is owned by another entity. Javaheri has not done this, and so, as the Court has already concluded, Javaheri fails to establish that JPMorgan is not the rightful owner of the Note.

Javaheri does not argue that the Note and the Deed of Trust are not valid documents as to the Subject Loan and Wellworth Property; he argues only that JPMorgan is not the valid owner. (SAC ¶ 42.) These documents are thus controlling in establishing the respective rights and obligations between Javaheri and JPMorgan.

Under California law, a claim for quasi-contract alleging unjust enrichment cannot lie "when an enforceable, binding agreement exists defining the rights of the parties." Paracor Fin., Inc. v. Gen. Elec. Capital Corp., 96 F.3d 1151, 1167 (9th Cir. 1996). Here, the Note and the Deed of Trust are express contracts covering the same subject material as Javaheri’s quasi-contract claim. The Court must therefore look to the physical, written contracts (the Note and the Deed of Trust) to determine whether Javaheri’s claim fails as a matter of law. See Klein v. Chevron U.S.A., Inc., 202 Cal. App. 4th 1342, 1388 (2012); Lance Camper Mfg. Corp. v. Republic Indem. Co. of Am., 44 Cal. App. 4th 194, 203 (1996).

The Note instructs the Borrower to make monthly payments to the Note Holder. (Waller Decl. Ex. 4.) The Note Holder is either the original lender, Washington Mutual, or "anyone who takes the Note by transfer and who is entitled to receive payments under this Note." (Waller Decl. Ex. 4.) The Note was properly transferred from Washington Mutual to the FDIC as receiver of the bank, and from the FDIC to JPMorgan through the P&A Agreement. So, JPMorgan is now the Note Holder. Thus, the Note is a valid contract between Javaheri and JPMorgan, and any attempt to plead a quasi-contract claim in substitution of the Note and Deed of Trust must necessarily fail.

Finally, even if the Court could find that there was no enforceable contract governing the parties’ rights and obligations in this case, there is still no evidence that JPMorgan has unjustly benefitted from Javaheri’s mortgage payments at Javaheri’s expense. Unjust enrichment requires the receipt of a benefit and the unjust retention of that benefit at the expense of another. Tilley v. Ampro Mortg., No. S-11-1134 KJM CKD, 2011 WL 5921415, at *9 (E.D. Cal. Nov. 28, 2011) (quoting Peterson v. Cellco Partnership, 164 Cal.App.4th 1583, 1593 (2008));Cross v. Wells Fargo Bank, N.A., No. CV11-00447 AHM (Opx), 2011 WL 6136734, at *3 (C.D. Cal. Dec. 9, 2011) (same). Conspicuously absent from both Javeheri’s Complaint and the evidentiary record in this case is any contention or any evidence that JPMorgan—to the extent that it does not own Javaheri’s Note and is not entitled to keep Javaheri’s mortgage payments—has failed to credit Javaheri’s account or forward Javaheri’s payments to the appropriate entity. Nor does any other creditor appear to claim an interest in any of the payments Javaheri made prior to default. Javaheri therefore has not established the very essence of a quasi-contract claim.

The Court therefore GRANTS JPMorgan’s Motion for Summary Judgment on Javaheri’s quasi-contract claim as it relates to the Wellworth property.

D. Quiet Title

Javaheri’s claim for quiet title is based on allegations (1) that JPMorgan does not own and cannot produce the original promissory note and (2) that all necessary sums have been paid.

California courts have held that a party seeking to quiet title to a property on which he owes a debt must first offer payment in full on that debt. Rosenfeld v. JPMorgan Chase Bank, N.A.,732 F. Supp. 2d 952, 975 (N.D. Cal. 2010); Miller v. Provost, 26 Cal. App. 4th 1703, 1707 (1994). In his SAC, Javaheri alleges, "[T]he obligations owed to WaMu under the DOT were fulfilled and the loan was fully paid when WaMu received funds in excess of the balance on the Note as proceeds of sale through securitization(s) of the loan and insurance proceeds from Credit Default Swaps." (SAC ¶ 63.) In other words, Javaheri suggests that he need not pay off his debt simply because Washington Mutual transferred the Note to a third party. Even assuming that Washington Mutual did sell the Note to a securitized trust, which Javaheri has failed to establish, public policy demands that Javaheri pay off his debt. It would be patently unfair to allow Javaheri to own his home free and clear without fully paying the money he owes on the home. Moreover, district courts have consistently held that "the sale or pooling of investment interests in an underlying note [cannot] relieve borrowers of their mortgage obligations." Upperman v. Deutsche Bank Nat’l Trust Co., No. 01:10-cv-149, 2010 WL 1610414, at *2 (E.D. Va. Apr. 16, 2010); see Matracia v. JP Morgan Chase Bank, NA, No. CIV. 2:11-190 WBS JFM, 2011 WL 3319721, at *3 (E.D. Cal. Aug. 1, 2011).

JPMorgan has satisfied its burden by providing evidence that Javaheri has not tendered the full amount due under the loan. (Tannatt Decl. Ex. 4, at 22.) Javaheri does not refute this. (SeePlaintiff’s Statement of Genuine Issues in Opposition to Motion for Summary Judgment.) Javaheri’s SAC does allege that his obligation to pay Washington Mutual was fulfilled when Washington Mutual received proceeds from the sale of the Deed of Trust to private investors in a securitized trust. (SAC ¶¶ 43, 63.) But while this was enough to survive a Rule 12(b)(6) motion to dismiss, it is not enough to survive summary judgment. Javaheri provides no evidence that there were any proceeds from the sale of the Deed of Trust to private investors. Therefore, even if this sale did occur, there is still no evidence of tender. And because Javaheri provides no evidence that he tendered the full amount owed under the Deed of Trust, there can be no claim to quiet title. Accordingly, JPMorgan’s Motion is GRANTED with respect to Javaheri’s claim for quiet title as it relates to the Wellworth Property.

E. Declaratory and Injunctive Relief

Claims for declaratory and injunctive relief are ultimately prayers for relief, not causes of action.Lane v. Vitek Real Estate Indus. Grp., 713 F. Supp. 2d 1092, 1104 (E.D. Cal. 2010). Javaheri is not entitled to such relief absent a viable underlying claim. Shaterian v. Wells Fargo Bank, N.A., 829 F. Supp. 2d 873, 888 (N.D. Cal. 2011).

The Court stated in its June 2, 2011 Order, "Plaintiff has properly pleaded his underlying claims and Defendant may therefore be found liable at a later stage of the litigation." (Order 9.) Javaheri’s allegations were enough to withstand dismissal under 12(b)(6), but for summary judgment, Javaheri cannot rest upon mere allegations or denials in his pleadings; rather, he must assert evidentiary materials showing that there is a genuine issue for trial. Anderson, 477 U.S. at 256. Because there is no evidence to support Javaheri’s underlying claims, injunctive relief is improper.

To state a claim for declaratory relief, there must be an actual controversy. Am. States Ins. Co. v. Kearns, 15 F.3d 142, 143 (9th Cir. 1994). The Court has dismissed Javaheri’s claims, so there is no longer a controversy regarding the Wellworth Property. Therefore, the Court has no jurisdiction to award declaratory relief on the Wellworth Property.

Accordingly, the Court GRANTS JPMorgan’s Motion for Summary Judgment on Javaheri’s claim for declaratory and injunctive relief as it relates to the Wellworth Property.

V. CONCLUSION

The Court GRANTS Defendant’s Motion for Partial Summary Judgment in its Entirety. The parties shall proceed in this litigation solely on Plaintiff’s Wilshire Boulevard condo, which is the only property remaining subject to this action.

IT IS SO ORDERED.

[1] The number as written on the Deed of Trust is "XXXX-X-XX." But, in his response to Interrogatory No. 5, Javaheri claims that the number was written as "432551." (Tannatt Decl. Ex. 1.) In the Opposition to the JPMorgan’s Motion, Counsel for Javaheri states that the number is "4325514." (Opp’n 3.)

[2] Javaheri is inconsistent in enumerating the number that he entered into the "Pool Talk" form. As stated in the Opposition and as appearing in Exhibit 5, the number entered is "432551." (Opp’n 3; Gillies Decl. Ex. 5.) But, Gillies’ Declaration states that he entered the number "4325514" in the "Pool Talk" form. (Gillies Decl. at 3.)

Demurrer reversed based on allegations of modification agreement alleging formation of contract

22 Aug

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Wednesday, August 22, 2012 10:47 AM
To: Charles Cox
Subject: Demurrer reversed based on allegations of modification agreement alleging formation of contract

In a homeowner’s suit for breach of contract arising from the failed loan modification and eventual foreclosure sale of her home, trial court’s order sustaining a demurrer is reversed to the extent it is based on allegations regarding the parties’ modification agreement, as plaintiff alleged formation of a valid contract to modify her loan documents and sufficiently alleged breach of that modification agreement. Further, plaintiff should be permitted to allege a cause of action for breach of covenant and good faith and fair dealing based on breach of the modification agreement and also be permitted to amend the complaint to allege a cause of action for common law wrongful foreclosure based on the valid modification agreement.

Barroso v. Ocwen_Cal.App.4th.docx

Max Gardner on Standing

22 Aug

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Wednesday, August 22, 2012 10:47 AM
To: Charles Cox
Subject: Max Gardner on Standing

Standing Updates

By Tiffany Sanders on August 22, 2012

See the online link to Max’s site on Standing: http://newsletter.maxbankruptcybootcamp.com/2012/08/standing-updates/

The most recent updates includes several new cases on “holder of the note” standing:

In re Knigge, 2012 WL 1536343 (Bankr. W.D. Mo., April 30, 2012): The creditor, as the party in possession of a promissory note endorsed in blank, was the “holder” of the note and was entitled to enforce the note; while the deed of trust referred to in the note required the debtors to perform a variety of undertakings beyond the payment of money, such as “occupy[ing] the property, refrain[ing] from wasting or destroying the property, maintain[ing] insurance on the property, and giv[ing] notice to Lender of any losses relating to the property,” these additional undertakings did not undermine the negotiability of the note under Missouri law.

In re Griffin, Case No. 11-1362 (9th Cir. B.A.P., April 6, 2012), appeal filed, Case No. 12-60046 (9th Cir., filed June 18, 2012): The stay relief movant’s providing a copy of the Chapter 7 debtor’s promissory note, along with a declaration stating that the copy was a “true and correct copy of the indorsed Promissory Note,” was sufficient to demonstrate that the movant was in possession of the note. Under Fed. R. Evid. 1003, “[a] duplicate is admissible to the same extent as an original unless (1) a genuine question is raised as to the authenticity of the original or (2) in the circumstances it would be unfair to admit the duplicate in lieu of the original,” and the Chapter 7 trustee had not presented a genuine question as to the note’s authenticity such that the original would be required; since the note was properly endorsed in blank, the movant was a holder of the note entitled to enforce it.

In re Balderrama, — B.R. —-, 2012 WL 1893634 (Bankr. M.D. Fla., May 16, 2012): In Florida, standing to enforce a note depends on the type of negotiable instrument the note becomes upon execution. If the note is endorsed in blank, it becomes a bearer instrument and can be enforced by the party in possession, regardless of how that party obtained the note. When a note is payable to an identifiable party, however, the instrument becomes a “special instrument,” and only the party or its assignee, specifically identified as the proper holder, i.e., the holder in due course, may enforce the note. Here, because the movant claimed that it held a special instrument specifically endorsed to the movant, it needed to prove that it was a holder in due course.

In re Fennell, 2012 WL 1556535 (Bankr. E.D. N.Y., May 2, 2012): A party holding the debtor’s mortgage note endorsed in blank is entitled to enforce the note and has standing to move for relief from stay.

Bain Decision is out in Washington – MERS YOU LOSE!!!

18 Aug

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Thursday, August 16, 2012 10:02 AM
To: Charles Cox
Subject: Bain Decision is out in Washington – MERS YOU LOSE!!!

Supreme Court of the State of Washington

Opinion Information Sheet

Docket Number: 86206-1
Title of Case: Bain v. Metro. Mortg. Grp., Inc.
File Date: 08/16/2012
Oral Argument Date: 03/15/2012

SOURCE OF APPEAL

Bain Ruling.pdf

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