BK During Foreclosure

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Tuesday, October 29, 2013 4:39 AM
To: Charles Cox
Subject: BK During Foreclosure

Attached Paper

Charles Wayne Cox
Email: mailto:Charles
Websites: www.BayLiving.com; www.FdnPro.com and www.ForensicLoanAnalyst.com
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.


26 USC 860F – Other Rules on REMIC Prohibited Transactions (support for Glaski Opinion not Addressed)

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Monday, October 28, 2013 4:45 PM
To: Charles Cox
Subject: 26 USC 860F – Other Rules on REMIC Prohibited Transactions (support for Glaski Opinion not Addressed)

In looking up argument to support the Glaski Opinion, I found the statutes in the USC for 90 days in which a REMIC to be designated as such. I also ran across this section of rules (below) I found interesting. You will find the 90 day rule in 860D and other interesting stuff in 860G.

Fourth Circuit Holds Inheritances Are Estate Property In Chapter 13 Cases

From: Charles Cox [mailto:charles@ldapro.com]
Sent: Wednesday, October 30, 2013 5:50 AM
To: Charles Cox
Subject: Fourth Circuit Holds Inheritances Are Estate Property In Chapter 13 Cases

Fourth Circuit Holds Inheritances Are Estate Property In Chapter 13 Cases

Yesterday, the Fourth Circuit Court of Appeals issued an opinion in Carroll v Logan. This will have an impact for future chapter 13 cases in this circuit.

In Carroll, the debtors filed a chapter 13 case in 2009. The Carrolls’ plan provided for a payment to unsecured creditors of approximately 3.8%, that is, each unsecured creditor who filed a claim would receive approximately 4% of what they claimed was owed.

A little over three years after the debtors’ filed bankruptcy, Mr. Carroll notified the court that he would receive $100,000.00 from an inheritance. Upon such notice, the chapter 13 trustee moved to modify their plan to provide for the $100,000.00 to be paid through the plan toward unsecured creditors. The debtors’ objected to the trustee’s motion.

At issue were two provisions of the Bankruptcy Code: Section 541 and Section 1306. Section 541 defines what property interests come into the bankruptcy estate upon filing for bankruptcy protection. In particular, Section 541(a)(5) states that any property that the debtor acquires or is entitled to within 180 days after filing bankruptcy by bequest, devise or inheritance becomes property of the bankruptcy estate. A reason for this provision is so that if a debtor knows that a family member is going to pass on soon and the debtor has lots of debts, the debtor won’t file bankruptcy immediately before the family member passes to discharge his debts and then have the full inheritance. If a debtor inherits property within 180 days after filing, the trustee can get those assets to pay creditors.

In the Carrolls’ case, they had filed for bankruptcy in 2009 and did not become entitled to inherit anything until well after the 180 days since filing had passed. As such, the debtors’ argued, they should not have to submit their inheritance to the chapter 13 trustee.

The trustee countered and the Fourth Circuit agreed that Section 1306 allows the trustee to reach the inheritance. Section 1306 states that property of the bankruptcy estate includes, in addition to the property specified in Section 541 (see above), all property that the debtor acquires after commencement of the case but before the case is closed, dismissed, or converted to a case under a different chapter. As such, under Section 1306, even though the debtor did not acquire the property within 180 days after his bankruptcy filing as set forth under Section 541, Section 1306 states that the after acquired property does come into the bankruptcy estate until the case is closed, dismissed or converted. Therefore, the debtors would be required to pay the $100,000.00 inheritance into the plan (less their exemptions, if any).

This can create another factor to carefully consider before choosing a chapter 7 case or a chapter 13 case. If you do not stand to inherit much from family members, it may not be much of a factor. If you do stand to inherit something, a chapter 13 case can go on for up to five years and any inheritance acquired could go to paying your creditors. At the same time, if you do not qualify for a chapter 7 case because you “flunk” the means test or if you must file a chapter 13 to cure mortgage arrears or other reasons, there may not be any other bankruptcy options.

A skilled bankruptcy professional such as those on this website can help you navigate the world of bankruptcy. If you are facing financial issues, contact one of us today.

Carroll v. Logan.pdf


We conclude plaintiffs have sufficiently alleged causes of action for breach of contract, promissory estoppel, and fraud based on false promise. Therefore, we shall reverse on those bases.[1]
See More

RICHARD BUSHELL et al., Plaintiffs and Appellants,v.JPMORGAN CHASE BANK, N.A., Defendant and Respondent.
No. C070643.
Court of Appeals of California, Third District, Placer.
Filed October 22, 2013.United Law Center, John S. Sargetis and Jon L. Oldenburg for Plaintiffs and Appellants.AlvaradoSmith, Theodore E. Bacon and Ricardo Diego Navarrette for Defendant andRespondent.
iStock_000015861187MediumBUTZ, J.In this action arising from a home foreclosure, the trial court sustained, without leave to amend,defendant lender’s demurrer to plaintiff borrowers’ complaint. The complaint alleges causes of action for breach of contract, promissory estoppel, and fraud based on intentionalmisrepresentation or false promise. Specifically, plaintiffs allege that defendant, under a trialmodification mortgage plan, offered to permanently modify the plaintiffs’ mortgage loan, provided plaintiffs complied with the terms of the trial modification plan by returning certainrequested documents, making timely trial modification payments, and qualifying under a federal program that seeks to reduce home foreclosures, the Home Affordable Mortgage Program(hereafter, HAMP).Two recent appellate decisions provide guidance on this subject, one from the California Courtof Appeal, Fourth Appellate District, Division Three (
West v. JPMorgan Chase Bank, N.A.
(2013) 214 Cal.App.4th 780 (
)) and the other from the federal Seventh Circuit Court of Appeals (
Wigod v. Wells Fargo Bank, N.A.
(7th.Cir. 2012) 673 F.3d 547 (

). These twodecisions, which were issued after the trial court ruled here, concluded that when a borrower hasalleged that he or she has complied with all the terms of a trial modification plan offered under HAMP—including making all required payments and providing all required documentation— and if the borrower’s representations on which the modification is based remain true and correct,the lender or loan servicer (collectively hereafter, the lender) must offer the borrower a goodfaith permanent modification; and if the lender fails to do so, the borrower may sue the lender,under state law, for breach of contract of the trial modification plan, among other causes of action.We conclude plaintiffs have sufficiently alleged causes of action for breach of contract, promissory estoppel, and fraud based on false promise. Therefore, we shall reverse on those bases.

In reviewing a demurrer-based judgment of dismissal, we determine, independently of the trialcourt, whether, assuming the facts alleged in the complaint are true, a cause of action has been or can be stated. (
Blank v. Kirwan
(1985) 39 Cal.3d 311, 318

Rogoff v. Grabowski
(1988) 200Cal.App.3d 624, 628.) We may also consider judicially noticeable matters and facts in theexhibits attached to the complaint. (
Picton v. Anderson Union High School Dist.
(1996) 50Cal.App.4th 726, 732-733.)The complaint at issue here, the plaintiffs’ first amended complaint, alleges the following facts.In May 2004, plaintiffs Richard and Susan Bushell obtained a loan from then defendantWashington Mutual Bank to purchase a home in Roseville. Plaintiffs executed a deed of trustencumbering the property as security. Subsequently, defendant JPMorgan Chase Bank, N.A.,acquired certain assets and liabilities of Washington Mutual, including plaintiffs’ loan and deedof trust (we will refer collectively to these defendants as Chase).
CIO, 2 Others To Resign After JPMorgan Chase $2 Billion Trading ErrorIn December 2008, plaintiffsdefaulted on their loan.In May 2009, plaintiffs received from Chase a trial modification plan (called a “Trial PeriodPlan” or TPP), which stated in part: “If you qualify under the federal government’s HomeAffordable Modification [P]rogram [(HAMP)] and comply with the terms of the [trialmodification plan], we will modify your mortgage loan and you can avoid foreclosure.” In thetrial modification plan, Chase requested that plaintiffs (1) sign and return certain documents (the plan itself, if they accepted it; a financial hardship affidavit; a tax return disclosure form; anddocumentation to verify previously stated income), and (2) submit the first trial period payment(in the amount of $1,420.31, calculated from income and loan information Chase already hadand calculations Chase had already performed pursuant to HAMP guidelines). (See U.S. Dept.Treasury, HAMP Supplemental Directive No. 09-01, Apr. 6, 2009, pp. 2-5, 8-10, 14-15(hereafter, Supplemental Directive 09-01).) Plaintiffs signed and provided all the requesteddocuments and made the first trial period payment.In June 2009, plaintiffs received a letter from Chase confirming the trial modification plan andspecifying in part: “If you make all [3] trial period payments on time [under the trialmodification plan] and comply with all of the applicable [HAMP] program guidelines, you willhave qualified for a final [permanent] modification.” The letter also contained four coupons withwhich to return the trial modification payments, and instructed plaintiffs to continue making thetrial modification payments after the first three in the event of a paperwork delay.After making the first four trial period payments, plaintiffs inquired about the status of their loanmodification. Chase advised them to continue making the trial payments. Plaintiffs did, making26 trial modification payments between June 2009 and August 2011.Plaintiffs contacted Chase multiple times between November 2009 and June 2010, inquiringabout the status of their loan modification. Between November and December 2009, Chase
indicated it was processing the paperwork. Then, on December 30, 2009, when plaintiffs againinquired, Chase told plaintiffs the loan modification had been denied “`by the investor'” andChase could not accept any more payments. In the ensuing months, plaintiffs requested writtenexplanation, but received nothing. Plaintiffs called Chase and were told to stop making payments because Chase was “`crunching the numbers'” for the modification and payment schedule, andadditional payments at that point would skew the outcome. And then in June 2010, plaintiffswere told that their file had been reviewed and cleared to resume the trial modification payments,which plaintiffs resumed. In November 2010, plaintiffs received a letter from Chase requestingupdated information. This was the first written communication from Chase since the trialmodification plan provided to plaintiffs in May 2009 and the confirming letter sent in June 2009.Plaintiffs provided the requested information in person on December 3, 2010. The next writtencommunication plaintiffs received from Chase was on January 27, 2011—a notice of trustee’ssale regarding the property (posted on their front door).
After Chase demurred to plaintiffs’ original complaint, plaintiffs filed their first amendedcomplaint alleging (1) breach of contract, including breach of the implied covenant of good faithand fair dealing, (2) promissory estoppel, and (3) fraud—intentional misrepresentation and false promise.The trial court, which ruled before
were decided, sustained Chase’s demurrer without leave to amend and dismissed the case, finding: (1) as to breach of contract and theimplied covenant of good faith and fair dealing—the trial modification plan was not, on its face,a binding contract for a loan modification; plaintiffs did not allege they qualified under HAMP;and the implied covenant theory fell with the lack of a contract; (2) as to promissory estoppel— the alleged promise was conditional rather than clear and unambiguous as required; and plaintiffsfailed to allege detrimental reliance (damages) because monthly mortgage payments that plaintiffs were already obligated to make cannot constitute damages; and (3) as to fraud— plaintiffs failed to allege their facts with the requisite level of specificity, and similarly failed toallege detrimental reliance.This appeal followed.
action alert imagesDISCUSSIONI. Plaintiffs State a Cause of Action for Breach of ContractIncluding Breach of the Implied Covenant of Good Faithand Fair DealingA. Breach of Contract

Was Glaski correctly decided ?

October 9, 2013

Chief Justice Tani G. Cantil-Sakauye
and Associate Justices
Supreme Court of California
350 McAllister Street
San Francisco, CA 94102-4797
Re: Glaski v. Bank of America, National Association et al.
Supreme Court Case No. S213814;
Appellate Case No. F064556, Disposition Date 07/31/2013;
Trial Court Case No. 09CECG03601
Dear Justices of the Supreme Court:
Pursuant to California Rules of Court (“CRC”), Rule 8.1125(b) et seq., the undersigned writes to respectfully and timely oppose and object to the requests to depublish the published opinion of the appellate court for the above referenced case by the following response.
The undersigned’s interest in this response to the depublication request, relates to clients served in my practice as a California Bus & Prof. Code qualified paralegal which consists of working on these types of cases with attorneys on a regular basis. We represent many clients who are, and will be affected by this currently citable Appellate Court Opinion. Some already relying on the Glaski Opinion. The clarity the Appellate Court provided in its well-reasoned Opinion qualified for publication and respectfully, should not be upset.
The depublication process should not be used as a forum to re-try the case. Supreme Court review was an available option but no petition filed.
Justice Joseph R. Grodin wrote in 1984 in confirming earlier explanations by the late Chief Justice Donald R. Wright and then Chief Justice Rose Elizabeth Bird , that depublication is only ordered because the majority of the justices consider the opinion to be wrong in some significant way, such that it would mislead the bench and bar if it remained citable as precedent . Such is not the case here.
friv-courtThe Appellate Court had no choice but to assume the purported “Trust” was formed under New York Trust Laws because Plaintiff claimed that it was. Defendants never refuted or objected to this stated fact in the instant case. This does not change the general concept the Court established that assets are prohibited from entering a trust after it is closed and the restrictive requirements to maintain limited liability for a pass through entity in order to mitigate tax liability or a tax exempt status.
Regardless of what law organized under, this was still a REMIC Trust. I.R.S. Code § 860 et seq. and Del. Code Ann. Title 12 §§ 3801-3824 each provides similar if not more comprehensive requirements related to the actual purpose of the trust; for instance:
“Every direct or indirect assignment, or act having the effect of an assignment, whether voluntary or involuntary, by a beneficiary of a trust of the beneficiary’s interest in the trust or the trust property or the income or other distribution therefrom that is unassignable by the terms of the instrument that creates or defines the trust is void. ”

Statements in the requests for depublication that Delaware Statutes provide no comparable provision that would render a belated assignment to a trust void is simply untrue.
The justices’ reasoning was sound, applicable and well-reasoned. Defendants’ Petition for Rehearing was rightfully denied and the numerous requests for publication were properly considered and the case was properly certified for publication.

The Appellate Court’s Opinion meets the standard for certification and publication as authorized by Cal. Rules of Court, Rule 8.1105(c) which provides that an opinion of a Court of Appeal or a superior court appellate division-whether it affirms or reverses a trial court order or judgment-should be certified for publication in the Official Reports if the opinion:
(1) Establishes a new rule of law;
(2) Applies an existing rule of law to a set of facts significantly different from those stated in published opinions;
(3) Modifies, explains, or criticizes with reasons given, an existing rule of law;
(4) Advances a new interpretation, clarification, criticism, or construction of a provision of a constitution, statute, ordinance, or court rule;
(5) Addresses or creates an apparent conflict in the law;
(6) Involves a legal issue of continuing public interest;
(7) Makes a significant contribution to legal literature by reviewing either the development of a common law rule or the legislative or judicial history of a provision of a constitution, statute, or other written law;
(8) Invokes a previously overlooked rule of law, or reaffirms a principle of law not applied in a recently reported decision; or
(9) Is accompanied by a separate opinion concurring or dissenting on a legal issue, and publication of the majority and separate opinions would make a significant contribution to the development of the law.
I contend the Appellate Court’s well-reasoned Opinion was published on the grounds of sub-sections 2, 3, 5, 6, and 8 referenced above, more specifically related to Sections III. sub-sections A-H and Section IV. sub-section B of the Appellate Court’s Opinion .
Section III.A. The appellate court’s Opinion clarifies securitization issues related to the lack of transfer of the deed of trust into securitized trusts after the closing date, which was deemed not acceptable due to the controlling “pooling and servicing agreement” and statutory requirements applicable to a Real Estate Mortgage Investment Conduit (REMIC) trusts, which is further clarified in FN 12 of the opinion with appropriate citations. This meets the standard for publication per CRC, Rules 8.1105(c)(3), (5), (6) and (8).
Section III.B. Clarifies previous issues and opinions related to wrongful foreclosure by a nonholder of the deed of trust; or when a party alleged not to be the true beneficiary, instructs the trustee to file a Notice of Default and initiate nonjudicial foreclosure which conflicts with other holdings; adopts more applicable holdings and further clarifies that a plaintiff must allege facts that show the defendant who invoked the power of sale was not the true beneficiary. This meets the standard for publication per CRC, Rules 8.1105(c) (3), (5), (6) and (8).
Section III. C. This is an important opinion for these cases not previously held by other opinions clarifying the question of whether the purported assignment was void and not dependent on whether the borrower was a party to, or third party beneficiary of the assignment agreement. This meets the standard for publication per CRC, Rules 8.1105(c)(2), (3), (5), (6) and (8).
Section III.E. This section distinguishes the Gomes case which seems to be utilized by other courts and defendant attorneys in California whether the application applies to the actual facts of the case at bar or not. Of particular note is the Court’s interpretation allowing borrowers to pursue questions regarding the chain of ownership and such compatibility with Herrera as opposed to Gomes under the circumstances of this and many other cases. The opinions made by the Court clarify Important distinguishing characteristics authorized by the standards for publication CRC, Rules 8.1105(c)(3), (5), (6) and (8).
Section III.F. Banks raise failure to tender as a defense in virtually every case. The Glaski opinion correctly holds that tender is not required where the foreclosure sale is void, rather than voidable. This meets the standard for publication per CRC, Rules 8.1105(c)(3), (5), (6) and (8).
Whether Glaski was a party or third party beneficiary to the purported Securitized Trust Agreement or Pooling and Servicing Agreement (“PSA”) is irrelevant. The PSA itself did NOT allow transfer into the purported trust AFTER the closing date whether the borrower invokes “standing” or not and whether or not a party to the PSA. The Appellate Court ruled that such a transfer after the “closing-date” was not allowed as it would violate the purpose of the “securitized trust.”
Professor Adam Levitin of Georgetown Law School states the following, regarding the view (as expressed in the requests for depublication) that a homeowner has no standing to challenge assignments into a trust because of not being a party to the PSA:
“I think that view is plain wrong. It fails to understand what PSA-based foreclosure defenses are about and to recognize a pair of real and cognizable Article III interests of homeowners: the right to be protected against duplicative claims and the right to litigate against the real party in interest because of settlement incentives and abilities.
The homeowner is obviously not party to the securitization contracts like the PSA (query, though whether securitization gives rise to a tortious interference with the mortgage contract claim because of PSA modification limitations…). This means that the homeowner can’t enforce the terms of the PSA. The homeowner can’t prosecute putbacks and the like. But there’s a major difference between claiming that sort of right under a PSA and pointing to noncompliance with the PSA as evidence that the foreclosing party doesn’t have standing (and after Ibanez, it’s just incomprehensible to me how this sort of decision could be coming out of the 1st Circuit BAP with a MA mortgage).
Let me put it another way. Homeowners are not complaining about breaches of the PSA for the purposes of enforcing the PSA contract. They are pointing to breaches of the PSA as evidence that the loan was not transferred to the securitization trust. The PSA is being invoked because it is the document that purports to transfer the mortgage to the trust. Adherence to the PSA determines whether there was a transfer effected or not because under NY trust law (which governs most PSAs), a transfer not in compliance with a trust’s documents is void. And if there isn’t a valid transfer, there’s no standing. This is simply a factual question–does the trust own the loan or not? (Or in UCC terms, is the trust a “party entitled to enforce the note”–query whether enforcement rights in the note also mean enforcement rights in the mortgage…) If not, then it lacks standing to foreclosure.
It’s important to understand that this is not an attempt to invoke investors’ rights under a PSA. One can see this by considering the other PSA violations that homeowners are not invoking because they have no bearing whatsoever on the validity of the transfer, and thus on standing. For example, if a servicer has been violating servicing standards under the PSA, that’s not a foreclosure defense, although it’s a breach of contract with the trust (and thus the MBS investors). If the trust doesn’t own the loan because the transfer was never properly done, however, that’s a very different thing than trying to invoke rights under the PSA.
I would have thought it rather obvious that a homeowner could argue that the foreclosing party isn’t the mortgagee and that the lack of a proper transfer of the mortgage to the foreclosing party would be evidence of that point. But some courts aren’t understanding this critical distinction.
Even if courts don’t buy this distinction, there are at least two good theories under which a homeowner should have the ability to challenge the foreclosing party’s standing. Both of these theories point to a cognizable interest of the homeowner that is being harmed, and thus Article III standing.
First, there is the possibility of duplicative claims. This is unlikely, although with the presence of warehouse fraud (Taylor Bean and Colonial Bank, eg), it can hardly be discounted as an impossibility. The same mortgage loan might have been sold multiple times by the same lender as part of a warehouse fraud. That could conceivably result in multiple claimants. The homeowner should only have to pay once. Similarly, if the loan wasn’t properly securitized, then the depositor or seller could claim the loan as its property. Again, potentially multiple claimants, but the homeowner should only have to pay one satisfaction.
Consider a case in which Bank A securitized a bunch of loans, but did not do the transfers properly. Bank A ends up in FDIC receivership. FDIC could claim those loans as property of Bank A, leaving the securitization trust with an unsecured claim for a refund of the money it paid Bank A. Indeed, I’d urge Harvey Miller to be looking at this as a way to claw back a lot of money into the Lehman estate.
Second, the homeowner had a real interest in dealing with the right plaintiff because different plaintiffs have different incentives and ability to settle. We’d rather see negotiated outcomes than foreclosures, but servicers and trustees have very different incentives and ability to settle than banks that hold loans in portfolio. PSA terms, liquidity, capital requirements, credit risk exposure, and compensation differ between services/trustees and portfolio lenders. If the loans weren’t properly transferred via the securitization, then they are still held in portfolio by someone. This means homeowners have a strong interest in litigating against the real party in interest .
The arguments proffered supporting depublication are nothing more than meritless attempts to re-argue the case. The Appellate Court’s Opinion was correctly decided. It promotes the accurate determination of standing to foreclose based on having the actual authority to do so, not based on a void assignment to a trust after the closing date.
For the foregoing reasons and on behalf of clients and persons this case affects, the undersigned respectfully request this Honorable Court NOT depublish the above referenced Appellate Court Opinion due to the importance that the continued ability to cite this well-reasoned Opinion will provide.


Charles W. Cox
California Contract Paralegal
322 West Center Street
Yreka, CA 96097
Tel. (541) 727-2240
Fax. (541) 310-1931
Glaski v. Bank of America, National Association et al.
Supreme Court Case No. S213814
Appellate Case No. F064556
I, Charles W. Cox, am over the age of eighteen and not a party to this action. My business address is 322 West Center St., Yreka, CA 96097. On the date set forth below, I served the foregoing RESPONSE AND OPPOSITION TO REQUEST FOR DEPUBLICATION for the above referenced case, by placing a copy of the document in a sealed envelope with first-class postage fully prepaid and placing the envelope for collection and mailing with the United States Postal Service following our ordinary business practices, addressed to the following.
Thomas A. Glaski
C/O Richard L. Antognini
Law Offices of Richard L. Antognini
919 I St.
Lincoln, CA 95648
C/O Catarina Maria Benitez
Attorney at Law
2014 Tulare Street, Suite 400
Fresno, CA 93721 JPMorgan Chase Bank, N.A.
C/O Nanette Barba Barragan
A Professional Corporation
633 W. Fifth Street, Suite 1100
Los Angeles, CA 90071
Mikel Allison Glavinovich
Alvarado Smith
633 W. Fifth Street, suite 1150
Los Angeles, CA 90071
Alan E. Schoenfeld
7 World Trade Center
250 Greenwich Street
New York, NY 10007
Noah Levine
7 World Trade Center
250 Greenwich Street
New York, NY 10007
Leah Litman
Wilmer Hale
1875 Pennsylvania Avenue NW
Washington, DC 20006

California Court of Appeal
Fifth Appellate District
2424 Ventura Street
Fresno, CA 93721 Bank of America, National Association, et al.
C/OTheodore E. Bacon
1 Macarthur Pl Ste 200
Santa Ana, CA 92707

Deutsche Bank National Trust Company
C/O Bernard Garbutt, III
101 Park Avenue
New York, NY 10178 Supreme Court of California
350 McAllister St.
San Francisco, CA 94102-4797

Superior Court of California County of Fresno
B.F. Sisk Courthouse
1130 “O” Street
Fresno, CA 93721

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