Archive | November, 2012

Stopa: Summary Judgment for Borrowers!

19 Nov

From: Charles Cox []
Sent: Friday, November 16, 2012 7:54 AM
To: Charles Cox
Subject: Stopa: Summary Judgment for Borrowers!

Blazing the Trail

Posted on October 31st, 2012 by Mark Stopa,

Have you ever made an argument in a foreclosure case, and you think it’s a solid, well-taken argument, but there is no case law directly on point? It can create a sinking feeling. “I think I’m right, but how will I ever get a judge to agree with me when there aren’t any appellate court decisions which have ruled this way already?” The tendency, when presented with such a situation, can be to shy away from the argument. To back down. To let someone else try to make the argument first. “I don’t want to look foolish.” “I don’t want to be wrong.” “If this is such a good argument, why aren’t there any cases that have ruled this way already?”

While I understand this feeling, this is absolutely and unequivocally the wrong mindset.

As foreclosure defense lawyers, many of the issues with which we are confronted are novel. That’s just the nature of the beast. Just think of it this way – when, prior to now, in the entire history of America, have property values collapsed by half (or more), causing millions of Americans to face foreclosure, essentially all at once? Obviously, the answer is “never.” These are unprecedented times, so it should come as no surprise that, in the history of jurisprudence, our court system has never before been confronted with some of the legal issues with which we now deal on a daily basis. As a result, to defend homeowners the right way, we have no choice but to argue things we may have never argued before – to present arguments to judges they may have never heard before, for which there is no case law.

One such example? Asking a judge to enter summary judgment for a homeowner in a foreclosure case.

In Florida, I know of no appellate decisions that directly authorize this. Such case law may exist, for example, if it’s undisputed the homeowner paid the mortgage in full all along, but that’s not what I’m talking about here. I’m talking about cases where homeowners are behind on their mortgage payments, perhaps significantly behind, and the bank has filed suit for foreclosure, but the homeowner is entitled to prevail on that case anyway.

I introduced this concept a few months ago, via this blog post. In the ensuing months, I’ve made that same argument many times before Florida judges, often before judges who had never heard it before.

Sometimes, quite candidly, it’s not easy. A few times, the judge seemed to think I was nuts, at least at first, when I told the court that I wanted summary judgment for my client. Typically, however, once I get into the argument, and explain why my client should prevail, that initial skepticism is replaced with intrigue at the argument. Often, in fact, these judges have agreed with my position, entering orders granting summary judgment and dismissing the case.

Invariably, do you know what happens when I go back before that same judge a second time? Or a third time? It’s easier. The judge is familiar with the argument. The judge understands the legal issues and knows how they apply. I’m no longer the crazy lawyer asking for a client who hasn’t paid his/her mortgage to prevail, but the lawyer making sound, legitimate arguments that are perfectly consistent with the law.

Do you know what makes all of this a bit easier? When the judge I’m arguing before sees that other judges have agreed with my argument. That’s why, whenever I have a hearing on this issue, I bring the Orders I’ve obtained which entered summary judgments for my clients in other cases. It’s one thing for me to argue something – it’s another for the judge to see that 5, 10, or 15 other, Florida judges have agreed with my argument and dismissed the case as a result.

In the grand scheme of things, my “success” here is limited. I know that this argument isn’t being made everywhere in Florida. I know there are many capable judges who have yet to hear the argument. I can’t argue this for everyone.

It’s time to get the word out, folks.

Below are several of the Orders I’ve obtained upon making these arguments. By posting these Orders, I am not suggesting that the same result will happen in any particular case. That said, it’s certainly possible, and I have to think the chances for any particular homeowner will improve if/when the judge sees that numerous other, Florida judges have agreed with this argument. Hence, that’s the point here – to blaze a trail. To help everyone (including judges unfamiliar with the argument) realize this argument has worked, and can work in the future. Everyone in foreclosure-world should be aware of these arguments.

Order Granting Summary Judgment – Judge Carven Angel (Hernando County)

Order Granting Summary Judgment – Judge Amy Williams (Pinellas County)

Order Granting Summary Judgment – Judge Pamela Campbell (Pinellas County)

Order Granting Summary Judgment – Judge John Schaefer (Pinellas County)

Order Granting Summary Judgment – Judge Amy Williams (Pinellas County)

Order Granting Summary Judgment – Judge W. Douglas Baird (Pinellas County)

Order Granting Summary Judgment – Judge Robert Foster (Hillsborough County)

Order Granting Summary Judgment – Judge Donald Evans (Hillsborough County)

Order Granting Summary Judgment – Judge Michele Sisco (Hillsborough County)

Order Granting Summary Judgment – Judge Frank Gomez (Hillsborough County)

Order Granting Summary Judgment – Judge James Barton (Hillsborough County)

Order Granting Summary Judgment – Judge J. Rogers Padgett (Hillsborough County)

Order Granting Summary Judgment – Judge Robert Foster (Hillsborough County)

Order Granting Summary Judgment – Judge James Barton (Hillsborough County)

Order Granting Summary Judgment – Judge Donald Evans (Hillsborough County)

Order Granting Summary Judgment – Judge Donald Evans (Hillsborough County)

Order Granting Summary Judgment – Judge George Shahood (St. Lucie County)

Order Granting Summary Judgment – Judge Thomas Kirkland (Orange County)

Order Granting Summary Judgment – Judge Lynn Tepper (Pasco County)

For those of you counting, that’s 14 different Florida judges who have entered summary judgment for a homeowner in a foreclosure case. (Undoubtedly there may be more of which I’m not aware.)

So take these arguments. Use them and apply them, as appropriate. Keep fighting. And, more than anything, realize that there are virtually always defenses that homeowners can utilize, even those facing foreclosure.

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

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

Today’s Legal Research

19 Nov

From: Charles Cox []
Sent: Saturday, November 17, 2012 3:25 PM
To: Charles Cox
Subject: Today’s Legal Research

I found the following I thought interesting as it related to my own case:

As I contend America’s Wholesale Lender was NOT a corporation organized and existing under the laws of New York as stated in the Deed of Trust…

A deed transferred to a corporation having no legal existence does not pass title [Copeland v. Fairview Land (1913) 165 Cal. 148, 162, 131 P. 119; but see Lanktree v. Spring Mt. Acres, Inc. (1931) 213 Cal. 362, 365, 2 P.2d 338 (deed executed in favor of nonexistent corporation held to be valid when it was given to third party to be held until corporation came into existence and, subsequently, was delivered to and accepted by existing corporation)]. In California, a corporation attains legal status on the filing of its articles of incorporation. Once the articles have been filed, the corporation is an existing entity and can receive title to real property [Corp. Code §§ 200(c), 207; Cavin Memorial Corp. v. Requa (1970) 5 Cal. App. 3d 345, 353, 85 Cal. Rptr. 107.]

And, related to the bogus “verifications” sent with the discovery responses I’m contesting:

Presumption Exists That Documents Signed by Two Specified Officers Were Signed on Behalf of Corporation.

A statutory presumption exists that contracts and other specified documents, when signed by at least two specified corporate officers, were validly signed on the corporation’s behalf. This presumption applies unless there is a showing that the other person had actual knowledge that the signing officers had no authority to execute the instrument [Corp Code § 313]. The presumption applies to contracts signed by the chair of the board, the president, or any vice president, and any of the following officers [Corp Code § 313]:


•Any assistant secretary.

•Chief financial officer.

•Any assistant treasurer.

The statute provides a conclusive, rather than a merely rebuttable, evidentiary presumption of authority on the part of the specified corporate officers to enter into the agreement [Snukal v. Flightways Mfg., Inc. (2000) 23 C4th 754, 782, 98 CR2d 1, 3 P3d 286].

The signature of one person is sufficient to bind the corporation if that person holds corporate offices in each of the two groups listed above, even if the instrument lists only one of his or her offices [Snukal v. Flightways Mfg., Inc. (2000) 23 C4th 754, 784, 786–787, 98 CR2d 1, 3 P3d 286].

Cal. Corp. Code

313. Subject to the provisions of subdivision (a) of Section 208,

any note, mortgage, evidence of indebtedness, contract, share

certificate, initial transaction statement or written statement,

conveyance, or other instrument in writing, and any assignment or

endorsement thereof, executed or entered into between any corporation

and any other person, when signed by the chairman of the board, the

president or any vice president and the secretary, any assistant

secretary, the chief financial officer or any assistant treasurer of

such corporation, is not invalidated as to the corporation by any

lack of authority of the signing officers in the absence of actual

knowledge on the part of the other person that the signing officers

had no authority to execute the same.

As indicated in my “meet and confer”… I don’t see “Assistant Vice President” or “Attorney-in-Fact” on the list, do you?

I also find this interesting as it relates to any of these bogus “corporate officers” these banksters seem to produce with such creative titles:

300. (a) Subject to the provisions of this division and any
limitations in the articles relating to action required to be
approved by the shareholders (Section 153) or by the outstanding
shares (Section 152), or by a less than majority vote of a class or
series of preferred shares (Section 402.5), the business and affairs
of the corporation shall be managed and all corporate powers shall be
exercised by or under the direction of the board. The board may
delegate the management of the day-to-day operation of the business
of the corporation to a management company or other person provided
that the business and affairs of the corporation shall be managed and
all corporate powers shall be exercised under the ultimate direction
of the board.
312. (a) A corporation shall have a chairman of the board or a
president or both, a secretary, a chief financial officer and such
other officers with such titles and duties as shall be stated in the
bylaws or determined by the board and as may be necessary to enable
it to sign instruments and share certificates. The president, or if
there is no president the chairman of the board, is the general
manager and chief executive officer of the corporation, unless
otherwise provided in the articles or bylaws. Any number of offices
may be held by the same person unless the articles or bylaws provide
 (b) Except as otherwise provided by the articles or bylaws,
officers shall be chosen by the board and serve at the pleasure of
the board, subject to the rights, if any, of an officer under any
contract of employment. Any officer may resign at any time upon
written notice to the corporation without prejudice to the rights, if
any, of the corporation under any contract to which the officer is a
317. (a) For the purposes of this section, "agent" means any person
who is or was a director, officer, employee or other agent of the
corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another foreign or
domestic corporation, partnership, joint venture, trust or other
enterprise, or was a director, officer, employee or agent of a
foreign or domestic corporation which was a predecessor corporation
of the corporation or of another enterprise at the request of the
predecessor corporation; "proceeding" means any threatened, pending
or completed action or proceeding, whether civil, criminal,
administrative or investigative; and "expenses" includes without
limitation attorneys' fees and any expenses of establishing a right
to indemnification under subdivision (d) or paragraph (4) of
subdivision (e).

Just a few interesting things I found nosing around today…

Charles Wayne Cox
Websites:; and
1969 Camellia Ave.
Medford, OR 97504-5403
(541) 727-2240 direct
(541) 610-1931 eFax

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

Lexis Forms-

19 Nov

From: Charles Cox []
Sent: Saturday, November 17, 2012 3:30 PM
To: Charles Cox
Subject: Lexis Forms-

Found these on Lexis doing my research today…you might (or might not) find some interesting parts in them…

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

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

Deed Procured by Fraud.docx
Brach of implied covenant against encumbrances.docx
Cancel Deed and Quiet Title.docx
Declaratory relief for declaration of rights under deed.docx

How to Contact Chase

19 Nov

How to Contact Chase

Here is all the additional contact information we have come across.

(See the bottom of this post for the latest info)

If you are calling Chase’s main banking number, here is a visual phone tree.

VP of Customer Service (so we are told) at Chase:

Deb Walden
PO BOX 15919
Wilmington, DE 19850
(302) 594-4000 office
(888) 643-9628 fax

Here is another Chase contact to try to ask for help when you can’t find anyone else to help you:

Mr. Frank Bisignano
Chief Administrative Officer
JPMorgan Chase & Co.
270 Park Avenue
New York, NY 10017-2014

Having a problem with the banking side of Chase? Here is a contact to try:

Heather Joyner
Executive Specialist
800.242.7399 ext. 51279
713-262-1279 Direct Line
FAX: 281-915-0984

Having a problem with Chase? Email Chase’s CEO Jamie Dimon for help at or try or send him snail mail at:

James Dimon
Chairman and Chief Executive Officer
JP Morgan Chase
270 Park Avenue, 39th Floor
New York, NY 10017
Phone: 212-270-1111
Fax : 212-270-1121
E-Mail Address:

Charlie Scharf CEO Retail Financial Services (i.e. head of JPMorgan Chase retail banking)
Phone: 212-270-5447
Fax: 212-270-5448
E-Mail Address:

Gerald A. Smith CEO Credit Card Services
Phone: 302-282-3100
Fax: 302-282-3939
E-Mail Address:

Marc Sheinbaum CEO-Retail Auto and Education Finance
Phone: 516-745-3838
Fax: 516-745-4040
E-Mail Address:

David B. Lowman CEO Home Lending
Phone: 636-735-2121
Fax: 314-256-2800
E-Mail Address:

Kevin D. Cook, Home Lending Executive Office Supervisor
614-422-7839 (phone)
614-388-9912 (fax)

Here is a link to lots of contact information for Chase.

Here is a number supposedly for the Chase Executive Team, whatever that is: 800-242-7339

Numbers for Chase executive customer service:

713-262-3866 (Banking, Michelle Crabtree)
800-242-7399 (Banking, General number)
888-622-7547 x 4350 (Credit card, general)
888-622-7547 x 6833 (Credit card, Jessica)
888-622-7547 x 6164 (Credit card, Sharon)
888-622-7547 x 6838 (Credit card, Patrick)

Direct numbers for WaMu loss mitigation (if you are behind on your mortgage and need help). We haven’t verified these numbers

(866) 926-8937
(888) 453-3102
(800) 478-0036
(800) 254-3677

Thanks Consumerist! (link and link)

Here is a handy guide to the Chase phone tree to get to where you want quicker.

Frustrated WaMu customer Alan tells gave me this number to get directly to a live person at WaMu without any prompts: 866-394-4034. He also designed WaMu a new logo:

If you want to record your phone conversations with WaMu/Chase, read this.

Update 8/23/12:  A reader gave us the helpful number:

Chase executive office 888 622 7547 ext 6773 Esmeralda Vasquez, she was very helpful and she truly was a customer advocate.  She assisted me with a fraud account opened in my name and later charged off and sold to some collection agency that took me to court. She retrieved the account(that was sold over 5 years ago) and had those jerks release the judgment.

Also I got a hold of Ms. Vasquez by first calling the banking side executive office at 800-242-7399 for all of those that have issued related to banking

How to chase Chase – People sometimes ask me why do you publish all this stuff. My slogan IF YOUR ENEMY IS MY ENEMY THAN WE ARE FRIENDS !!!!

19 Nov

People sometimes ask me why do you publish all this stuff. My slogan IF YOUR ENEMY IS MY ENEMY THAN WE ARE FRIENDS

2. RESOURCES — Pleadings, Orders, and Exhibits

On this page you will find descriptions and links to various pleadings, orders, and exhibits filed by attorneys as well as individuals representing themselves. Where the outcome is known, that information is included. These documents are public records and are made available for your information, but their accuracy, competency, and effectiveness have not been verified. Only a judge can rule on a pleading and only an appellate court opinion that is certified for publication can be cited as precedent. That said, it can be both educational and entertaining to see how the great race is unfolding in the historic controversy of People v. Banks. For an entertaining public outing of history’s all-time greatest pickpockets, go see the documentary “Inside Job.”

Federal District Court

Carswell v. JPMorgan Chase, Case No. CV10-5152 GW

George Wu, Judge, U.S. District Court, Central District of California, Los Angeles
Douglas Gillies, attorney for Margaret Carswell

Plaintiff sued to halt a foreclosure initiated by JPMorgan Chase and California Reconveyance Co. on the grounds of failure to contract, wrongful foreclosure, unjust enrichment, RESPA and TILA violations, and fraud. She asked for quiet title and declaratory relief. Chase responded with a Motion to Dismiss. At a hearing on September 30, 2010, Judge Wu granted defendants’ motion to dismiss with leave to amend. Plaintiff’s First Amended Complaint was filed on October 18. It begins:

It was the biggest financial bubble in history. During the first decade of this century, banks abandoned underwriting practices and caused a frenzy of real estate speculation by issuing predatory loans that ultimately lowered property values in the United States by 30-50%. Banks reaped the harvest. Kerry Killinger, CEO of Washington Mutual, took home more than $100 million during the seven years that he steered WaMu into the ground. Banks issued millions of predatory loans knowing that the borrowers would default and lose their homes. As a direct, foreseeable, proximate result, 15 million families are now in danger of foreclosure. If the legions of dispossessed homeowners cannot present their grievances in the courts of this great nation, their only recourse will be the streets.

Chase responded with yet another Motion to Dismiss, Carswell filed her Opposition to the motion, and a hearing is scheduled for January 6, 2011, 8:30 AM in Courtroom 10, US District Court, 312 N. Spring Street, Los Angeles, CA.


Khast v. Washington Mutual, JPMorgan Chase, and CRC, Case No. CV10-2168 IEG

Irma E. Gonzalez, Chief Judge, U.S. District Court, Southern District of California
Kaveh Khast in pro se

A loan mod nightmare where Khast did everything right except laugh out loud when WaMu told him that he must stop making his mortgage payments for 90 days in order to qualify for a loan modification. As Khast leaped through the constantly shifting hoops tossed in the air, first by WaMu, then by Chase, filing no less than four applications, Chase issued a Notice of Trustee’s Sale.

Khast filed a pro se complaint in federal court. The District Court granted a Temporary Restraining Order to stop the sale. Hearing on a Preliminary Injunction is now scheduled for December 3. The court wrote that the conduct by WAMU appears to be “immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers,” and thus satisfies the “unfair” prong of California’s Unfair Competition Law, Cal. Bus.&Prof.Code §17200. Plaintiff has stated that he possesses documents which support his contention that Defendant WAMU instructed Plaintiff to purposefully enter into default and assured Plaintiff that, if he did so, WAMU would restructure his loan. Accordingly, Plaintiff has demonstrated that he is likely to succeed on the merits of his claim.

The court also relied upon the doctrine of promissory estoppel. Under this doctrine a promisor is bound when he should reasonably expect a substantial change of position, either by act or forbearance, in reliance on his promise. He who by his language or conduct leads another to do what he would not otherwise have done shall not subject such person to loss or injury by disappointing the expectations upon which he acted.


Saxon Mortgage v. Hillery, Case No. C-08-4357

Edward M. Chen, U.S. Magistrate, Northern District of California
Thomas Spielbauer, attorney for Ruthie Hillery

Hillery obtained a home loan from New Century secured by a Deed of Trust, which named MERS as nominee for New Century and its successors. MERS later attempted to assign the Deed of Trust and the promissory note to Consumer. Consumer and the loan servicer then sued Hillery. The court ruled that Consumer must demonstrate that it is the holder of the deed of trust and the promissory note. In re Foreclosure Cases, 521 F. Supp. 2d 650, 653 (S.D. Oh. 2007) held that to show standing in a foreclosure action, the plaintiff must show that it is the holder of the note and the mortgage at the time the complaint was filed. For there to be a valid assignment, there must be more than just assignment of the deed alone; the note must also be assigned. “The note and mortgage are inseparable; the former as essential, the latter as an incident…an assignment of the note carries the mortgage with it, while an assignment of the latter alone is a nullity.” Carpenter v. Longan, 83 U.S. 271, 274 (1872).

There was no evidence that MERS held the promissory note or was given the authority by New Century to assign the note to Consumer. Without the note, Consumer lacked standing. If Consumer did not have standing, then the loan servicer also lacked standing. A loan servicer cannot bring an action without the holder of the note. In re Hwang, 393 B.R. 701, 712 (2008).


Serrano v. GMAC Mortgage, Case No. 8:09-CV-00861-DOC

David O. Carter, Judge, U.S. District Court, Central District of California, Los Angeles
Moses S. Hall, attorney for Ignacio Serrano

Plaintiff alleged in state court that GMAC initiated a non-judicial foreclosure sale and sold his residence without complying with the notice requirements of Cal. Civil Code Sec. 2923.5 and 2924, and without attaching a declaration to the 2923.5 notice under penalty of perjury stating that defendants tried with due diligence to contact the borrower. Defendants removed the case to federal court on the basis of diversity jurisdiction. The District Court granted defendants’ motion to dismiss without prejudice, and described in detail the defects in the Complaint with directions how to correct the defects. Plaintiff filed his Second Amended Complaint on 4/01/2010.


Sharma v. Provident Funding Associates, Case No. 3:2009-cv-05968

Vaughn R Walker, Judge, U.S. District Court, Northern District of California
Marc A. Fisher, attorney for Anilech and Parma Sharma

Defendants attempted to foreclose and plaintiffs sued in federal court, alleging that defendants did not contact them as required by Cal Civ Code § 2923.5. In considering plaintiffs’ request for an injunction to stop the foreclosure, the court found that plaintiffs had raised “serious questions going to the merits” and would suffer irreparable injury if the sale were to proceed. Property is considered unique. If defendants foreclosed, plaintiffs’ injury would be irreparable because they might be unable to reacquire it. Plaintiffs’ remedy at law, damages, would be inadequate. On the other hand, defendants would not suffer a high degree of harm if a preliminary injunction were ordered. While they would not be able to sell the property immediately and would incur litigation costs, when balanced against plaintiffs’ potential loss, defendants’ harm was outweighed.

The court issued a preliminary injunction enjoining defendants from selling the property while the lawsuit was pending.


Federal Bankruptcy Court

In re: Hwang, 396 B.R. 757 (2008), Case No. 08-15337 Chapter 7

Samuel L. Burford, U.S. Bankruptcy Judge, Los Angeles
Robert K. Lee, attorney for Kang Jin Hwang

As the servicer on Hwang’s promissory note, IndyMac was entitled to enforce the secured note under California law, but it must also satisfy the procedural requirements of federal law to obtain relief from the automatic stay in a Chapter 7 bankruptcy proceeding. These requirements include joining the owner of the note, because the owner of the note is the real party in interest under Rule 17, and it is also a required party under Rule 19. IndyMac failed to join the owner of the note, so its motion for relief from the automatic stay was denied.

Reversed on July 21, 2010. District Court Judge Philip Gutierrez reversed the Judge Burford’s determination that IndyMac is not the real party in interest under Rule 17 and that Rule 19 requires the owner of the Note to join the Motion.


In re: Vargas, Case No. 08-17036 Chapter 7

Samuel L. Burford, U.S. Bankruptcy Judge, Los Angeles
Marcus Gomez, attorney for Raymond Vargas


In re: Walker, Case No. 10-21656 Chapter 11

Ronald H. Sargis, Judge, U.S. Bankruptcy Court, Sacramento
Mitchell L. Abdallah, attorney for Rickie Walker

MERS assigned the Deed of Trust for Debtor’s property to Citibank, which filed a secured claim. Debtor objected to the claim. Judge Sargis ruled that the promissory note and the Deed of Trust are inseparable. An assignment of the note carries the mortgage with it, while an assignment of the Deed of Trust alone is a nullity. MERS was not the owner of the note, so it could not transfer the note or the beneficial interest in the Deed of Trust. The bankruptcy court disallowed Citibank’s claim because it could not establish that it was the owner of the promissory note.


California State Court

Cabalu v. Mission Bishop Real Estate

Superior Court of California, Alameda County
Brian A. Angelini, attorney for Cecil and Natividad Cabalu


Davies v. NDEX West, Case No. INC 090697

Randall White, Judge, Superior Court of California, Riverside County
Brian W. Davies, in pro per


Edstrom v. NDEX West, Wells Fargo Bank, et. al., Case No. 20100314

Superior Court of California, Eldorado County
Richard Hall, attorney for Daniel and Teri Anne Edstrom

A 61-page complaint with 29 causes of action to enjoin a trustee’s sale of plaintiffs’ residence, requesting a judicial sale instead of a non-judicial sale, declaratory relief, compensatory damages including emotional and mental distress, punitive damages, attorneys’ fees, and rescission.


Mabry v. Superior Court and Aurora Loan Services
185 Cal.App.4th 208, 110 Cal. Rptr. 3d 201 (4th Dist. June 2, 2010)
California Court of Appeal, 4th District, Division 3
California Supreme Court, Petition for Review filed July 13, 2010.

Moses S. Hall, attorney for Terry and Michael Mabry

The Mabrys sued to enjoin a trustee’s sale of their home, alleging that Aurora’s notice of default did not include a declaration required by Cal. Civil Code §2923.5, and that the bank did not explore alternatives to foreclosure with the borrowers. The trial court refused to stop the sale. The Mabrys filed a Petition for a Writ of Mandate and the Court of Appeal granted a stay to enjoin the sale. Oral argument was heard in Santa Ana on May 18, 2010.

Aurora argued that a borrower cannot sue a lender that fails to contact the borrower to discuss alternatives to foreclosure before filing a notice of default, as required by §2923.5, because §2923.5 does not explicitly give homeowners a “private right of action.” Aurora also argued that a declaration under penalty of perjury is not required because a trustee, who ordinarily files the notice of default, could not have personal knowledge of a bank’s attempts to contact the borrower. Nobody mentioned that the trustee is not authorized by the statute to make the declaration. §2923.5 states that a notice of default “shall include a declaration from the mortgagee, beneficiary, or authorized agent that it has contacted the borrower…”

The Court of Appeal ruled that a borrower has a private right of action under § 2923.5 and is not required to tender the full amount of the mortgage as a prerequisite to filing suit, since that would defeat the purpose of the statute. Under the court’s narrow construction of the statute, §2923.5 merely adds a procedural step in the foreclosure process. Since the statute is not substantive, it is not preempted by federal law. The declaration specified in §2923.5 does not have to be signed under penalty of perjury. The borrower’s remedy is limited to getting a postponement of a foreclosure while the lender files a new notice of default that complies with §2923.5. If the lender ignores the statute and makes no attempt to contact the borrower before selling the property, the violation does not cloud the title acquired by a third party purchaser at the foreclosure sale. Therefore §2923.5 claims must be raised in court before the sale. It is a question of fact for the trial court to determine whether the lender actually attempted to contact the borrower before filing a notice of default. If the lender takes the property at the foreclosure sale, its title is not clouded by its failure to comply with the statute. Finally, the case is not suitable for class action treatment if the lender asserts that it attempted to comply with the statute because each borrower will present “highly-individuated facts.”

In a petition for review to the California Supreme Court, the Mabrys noted that more than 100 federal district court opinions have considered §2923.5 and an overwhelming majority have rejected a private right of action under the statute. The petition for review was denied.

After the case was remanded to the trial court, Mabry’s motion for preliminary injunction was granted. The trial court found that the Notice of Default contained the form language required by the statute, i.e. that the lender contacted the borrower, tried with due diligence to contact the borrower, etc. However, the declaration on the Notice of Default was not made under panalty of perjury, and therefore had no evidentiary value to show whether the defendant satisfied §2923.5


Moreno v. Ameriquest

Superior Court of California, Contra Costa County
Thomas Spielbauer, attorney for Gloria and Carlos Moreno

Complaint for declaratory relief and fraud against lender for misrepresenting the terms of the loan, promising fixed rate with one small step after two years both orally and in the Truth In Lending Statement. Loan was actually variable rate with negative amortization. Morenos would have qualified for fixed rate 5% for 30 years, but instead received an exploding 7% ARM. Notary rushed plaintiffs through signing of documents with little explanation. Complaint requests a declaration the note is invalid, unconscionable and unenforceable and the Notice of Trustees Sale is invalid.


Other State Courts

JPMorgan Chase Bank v. George, Case No. 10865/06

Arthur M. Schack, Supreme Court Judge, Kings County, New York
Edward Roberts, attorney for Gertrude George


Florida Judge tosses foreclosure lawsuit

Homeowners dispute who owns mortgage

by Steve Patterson
St. Augustine Record
June 15, 2010

Changing stories about who owns a mortgage and seemingly fresh evidence from a long-closed bank led a judge to throw out a foreclosure lawsuit. It’s the second time in as many months that Circuit Judge J. Michael Traynor has dismissed with prejudice a foreclosure case where homeowners disputed who owns the mortgage. Lawyers representing New York-based M&T Bank gave three separate accounts of the ownership, with documentation that kept changing.

“The court has been misled by the plaintiff from the beginning,” the judge wrote in his order. He added that documents filed by M&T’s lawyers seemed to contradict each other and “have changed as needed to benefit the plaintiff.”

The latest account was that Wells Fargo owned the note, and M&T was a servicer, a company paid to handle payments and other responsibilities tied to a mortgage. To believe that, the judge wrote, the “plaintiff is asking the court to ignore the documents filed in the first two complaints.” He added that Wells Fargo can still sue on its own, if it has evidence that it owns the mortgage.

More and more foreclosure cases are being argued on shaky evidence, said James Kowalski, a Jacksonville attorney who represented homeowners Lisa and Larry Smith in the fight over their oceanfront home. “I think it’s very representative of what the banks and their lawyers are currently doing in court,” Kowalski said.

He said lawyers bringing the lawsuits are often pressed by their clients to close the cases quickly. But it’s up to lawyers to present solid evidence and arguments. “We are supposed to be better than that,” Kowalski said. “We are supposed to be officers of the court.”



Department of Treasury and FDIC Report on WaMu, 4/16/2010

The Offices of Inspector General for Department of the Treasury and Federal Deposit Insurance Corporation released its evaluation of the regulatory oversight of Washington Mutual on April 16. The table of contents tells the story. WaMu pursued a high-risk lending strategy which included systematic underwriting weaknesses. They didn’t care if borrowers could pay back their loans. WaMu did not have adequate controls in place to manage its reckless “high-risk” strategy. OTS examiners found weaknesses in WaMu’s strategy, operations, and asset portfolio but looked the other way.


OCC Advisory Letters

How could the regulators allow this breakdown to happen? Was it really fraud when banks arranged loans for homeowners who would inevitably go into defrault, sold them to Wall Street to be bundled into securities, then purchased insurance so that the bank would collect the unpaid balances when the borrowers lost their homes? Did anybody really know that repealing Glass-Steagall and permitting Wall Street banks to get under the covers with Main Street banks would cause so many borrowers to lose their homes? The Glass-Steagall Act, enacted in 1933, barred any institution from acting as any combination of an investment bank, a commercial bank, and an insurance company. It was repealed in 1999, and the repercussions have been immense.

The Office of the Comptroller of the Currency (OCC) issued Advisory Letter 2000-7 only months after Glass-Steagall was repealed. It warned regulators to be on the lookout for indications of predatory or abusive lending practices, including Collateral or Equity Stripping – loans made in reliance on the liquidation value of the borrower’s home or other collateral, rather than the borrower’s independent ability to repay, with the possible or intended result of foreclosure or the need to refinance under duress.

Proving fraud is a painstaking process. Getting inside the mind of a crook requires a careful foundation, and admissable evidence is not always easy to obtain. Many courts will take judicial notice of official acts of the legislative, executive, and judicial departments of the United States and of any state of the United States. See Cal Evidence Code Sec. 452(c).

Here is a set of smoking guns in the form of a series of Advisory Letters issued by OCC:

The Washington Mutual logo prior to its acquis...

The Washington Mutual logo prior to its acquisition by JPMorgan Chase. (Photo credit: Wikipedia)

Banks are double talking settlement

16 Nov

Some big numbers start looking smaller when you take a close look. A case in point: The $85 million Missouri has so far reaped from last February’s national mortgage settlement with big banks.

The bulk of it, $30 million, went to short sales. But banks were doing short sales before the settlement. They’ve picked up the pace this year, but it’s not clear if the settlement was part of the reason.

Banks often save money on short sales. They save the cost of foreclosing and maintaining an empty house. That house usually sells for more in a short sale than in a foreclosure.

In metro St. Louis, for instance, short sale homes sell at a 30 percent discount to similar homes. Foreclosed hopes go at a 40 percent discount, according to figures from RealtyTrac. If the home can attract a decent offer on the market, it’s clearly in the bank’s interest to accept a short sale rather than foreclose.

Troubled homeowners prefer short sales because the banks generally forgive the remaining debt – the difference between the sale price and the amount owed on the mortgage. The $30 million from the settlement represents that forgiven debt.

That raises the question: Would the banks have forgiven that debt even without the settlement? Have banks found a nifty way to reduce the amount $25 billion they agreed to pay to settle the suit over their foreclosure practices?

The figures are similar across the nation. At least 60 percent of the money is supposed to go to homeowner relief. But the bulk of that is going for short sales.

In Missouri, 6.6 million has gone to principal reduction on mortgages, and $1.2 million was in mortgage refinancing, according to Attorney General Chris Koster’s figures.  Another $7.7 million went to other, unspecified consumer relief. Koster said another $28 million was in the process of being provided to Missouri borrowers as of June 30.

The settlement was reached between five giant banks, the federal government and state attorneys general.

Multnomah County gears up to sue national mortgage giant MERS

12 Nov

Dana Tims, The Oregonian By Dana Tims, The Oregonian
on November 09, 2012 at 4:47 PM, updated November 09, 2012 at 7:10 PM

mers.JPG An electronic registry of mortgages has resulted in thousands of home foreclosures nationally. Multnomah County is now preparing to sue the mortgage giant MERS, in part to collect recording fees the county says are being avoided. Associated Press

In an action that has implications for tens of thousands of area homeowners, Multnomah County is taking on a mortgage-industry giant in hopes of recouping potentially millions of dollars in recording fees the county says have been avoided illegally.

County commissioners on Thursday will vote to make Multnomah the first county in Oregon to file a lawsuit against the Mortgage Electronic Registration Systems, a Virginia-based conglomerate created by large national banks to bundle and sell loans without having to record each new transaction.

“What MERS does is take the property recording system we have in Multnomah County and make it worthless,” said Jeff Cogen, commission chairman. “Anyone who buys, sells or owns a home in this county is affected.”

As a result of MERS’ practices, few people know who actually owns their mortgage, he said. Consequently, a public-records search alone on thousands of properties in Multnomah County may be utterly insufficient in identifying a clear title-holder.

Before the rise of MERS’ electronic registry in 1997, anyone buying a house would record the deed with the county. Those recording fees, in turn, provided the public service of making clear who owned which piece of property.

Cogen and others say the outcome of the lawsuit is far from certain. Nationally, MERS has won more suits than it has lost by arguing that it can legally be listed as a “beneficiary” on home-mortgage papers.

“It’s not a sure thing,” said Jenny Morf, Multnomah County counsel. “But we wouldn’t be here if we didn’t think we could succeed.”

The county’s lawsuit will allege that MERS has hopelessly muddied mortgage records by allowing the mortgages to be bought and sold numerous times without a recording fee being paid each time. That process shorts the county what it is due in fees, according to the county’s complaint, in addition to confusing title records.

“Maintaining these records is core to the county’s mission,” Cogen said. “We believe the banks, acting through MERS, have corrupted our public records and deprived the county of money it is entitled to.”

The county, if successful, could collect damages of anywhere from $3 million to $24 million, he said. The actual amount would depend on how many unpaid “conveyances” — selling and re-selling of mortgages among various banking interests — are determined to be involved.

If the county prevails and wins damages, Cogen said, he and other board members would use the proceeds to help county homeowners who have “suffered at the hands of MERS” through non-judicial foreclosures.

Many of the foreclosures that have hit Multnomah County homeowners since the housing meltdown that started in 2007 are a result of MERS being able to stand in as the “beneficiary” on recording documents, Cogen said. Lacking that ability, the housing giant would not have been able to proceed with the raft of non-judicial foreclosures that have left many people on the street.

Jason Lobo, MERS’ corporation communications director, declined to comment on the prospect of the county’s lawsuit.

“As a matter of regular course, we don’t comment on cases outstanding or not yet filed,” he said. “We don’t want to litigate this in the media.”

He did, however, provide information on several cases nationally that have been decided in MERS’ favor. Those include lawsuits filed in Arkansas, Florida, Kentucky and Iowa.

Attorneys advising the county say more recent outcomes have broken in favor of public and private parties suing MERS.

An Oregon Court of Appeals ruling handed down in July, for instance, found that MERS’ controversial document-registry system could not be used to get around state recording law in non-judicial foreclosures.

The Oregon Supreme Court is expected to resolve that lawsuit, filed by Rhododendron real estate agent Rebecca Niday.

A key factor in persuading county commissioners to proceed at this time is the relative lack of risk involved.

Its legal team — a Lake Oswego law firm partnering with an Alabama-based firm that has filed other anti-MERS suits nationally — is working on a contingency basis. Those firms will split one-third of any monetary award, while the county will owe nothing if the case falters.

“The county is only on the hook for a maximum of $20,000 in filing fees and associated court costs,” Cogen said. “In reality, we think the figure will be much less than that.”

Commissioner Deborah Kafoury said it makes sense for the county to take the lead on the issue since it’s county-backed homeless shelters that are now absorbing many who have lost their homes in non-judicial foreclosures over the past few years.

“The system is broken,” she said. “This is one way to start repairing it.”

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