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How can you write off Odious Debt like Greece?

“Odious Debt” Has Finally Arrived: Greece To Write Off “Illegal” Debt


It was back in June 2011 when we first hinted that the time of Odious Debt is rapidly approaching.

As a reminder, this is what Odious Debt is: In international law, odious debt is a legal theory which holds that the national debt incurred by a regime for purposes that do not serve the best interests of the nation, should not be enforceable. Such debts are thus considered by this doctrine to be personal debts of the regime that incurred them and not debts of the state. In some respects, the concept is analogous to the invalidity of contracts signed under coercion.

Today, nearly four years later, Odious Debt is now a reality in Greece, where Zoi Konstantopoulou, the head of the Greek parliament and a SYRIZA member, released two videos which have promptly gone viral, designed to promote the investigative parliamentary committee to look into the circumstances surrounding the signing of the country’s two bailout agreements that led Greece to implement its austerity measures.

Read the rest of the article here:

You can, in effect, get the court to write off  your odious debt, if you can prove that you got SCAMMED in your mortgage transaction.

You have only one way to find out if you got scammed:

Obtain a Professional Comprehensive Mortgage Transaction Examination.

For details, see http://MortgageAttack.com

Mort Gezzam photo
Mort Gezzam

TILA Rescission in the wake of Jesinoski

Truth In Lending Act (TILA)

See the full law here:
https://www.law.cornell.edu/uscode/text/15/1635
See the regulation Z here:
https://www.law.cornell.edu/cfr/text/12/226.23

Congress intended the right of rescission to protect the consumer from putting the family home at risk by using the home or the equity in it to secure a loan. It doesn’t apply in mortgage loans for the purpose of PURCHASING the house.  The TILA right of rescission doesn’t protect the home purchaser; it protects the borrower who has the home or equity in it.When looking at laws, read the whole area of a topic to find the definitions and rules of construction, like this one:


15 U.S. Code § 1602 – Definitions and rules of construction 


(x) The term “residential mortgage transaction” means a transaction in which a mortgage, deed of trust, purchase money security interest arising under an installment sales contract, or equivalent consensual security interest is created or retained against the consumer’s dwelling to finance the acquisition or initial construction of such dwelling.

The SCOTUS recently affirmed the simplicity of rescission in Jesinoski v Countrywide Home Loans.

Read a discussion of the opinion here:

http://www.scotusblog.com/2015/01/opinion-analysis-shortest-opinion-of-the-year-explains-tila-rescission-right/

The lender, upon receiving a rescission notice may either accept the rescission or dispute it.  If accepted the lender must return all payments and terminate its security interest. The borrower then must tender the loan proceeds to the lender. Should the lender wish to contest the rescission notice, it should send a letter so stating to the borrower. Then either the lender or the borrower may file a declaratory judgment action to determine whether the notice was valid.

Warning, if the borrower files a lawsuit, there is a filing fee and there is an obligation by the borrower to certify that they are making a pleading in good faith and upon a reasonable investigation. That should weed out a lot of truly frivolous claims. Without that mechanism in place, anyone can send a letter and assert a rescission demand, but if they do, they will be sanctioned.

 
In the case of the borrower defaulting, the lender might file a foreclosure action or initiate nonjudicial foreclosure proceedings as appropriate. The borrower would then assert rescission as an affirmative defense to foreclosure or in a declaratory judgment action to halt a nonjudicial sale. 
  
Remember, courts have the discretion to not only determine whether there is a proper basis for a rescission notice but also to reorder the creditor’s and debtor’s obligations in the event rescission was proper. Even if the rescission notice is well founded, a court can still require the borrower to show an ability to tender before forcing the lender to return funds and void a security interest.

Charlatans and Bozos in the foreclosure pretense defense industry have made grand pronouncements about how many lawsuits borrowers will file for rescission or injury resulting from having a rescission effort denied.  Frankly, I have no idea how many borrowers gave the lender a TIMELY TILA rescission notice.  But it makes no sense for the majority of borrowers over the past 7 or 8 years because many bought at the peak of the market, and 3 years later they had underwater loans because of the collapse of house values generally.  How could they pay that back?  Well, the arithmetic would allow subtraction Borrower Repayment minus Lender Repayment.  That might yield a sufficiently low amount for the borrower to sell the house in order to raise the money for repaying the lender.   But, in many cases, borrowers would still fall short, and they could not repay the lender, so the court would not order a rescission.

Yes, a few rescission lawsuits will come up, but not that many.  The Foreclosure pretender defenders will gladly take those borrower’s money for filing the action.

Mort Gezzam photo
Mort Gezzam

Should You Report the Mortgage Broker for Fraud?

A mortgage victim recently wrote this to me:

“I sent the lender a letter. They responded within 2 weeeks with a letter that  had a 2 copies of the loan application from a bank with different information in spots and signed by a TLC. One set was different than what was given to me at settlement.  An extra year was added to my years of employment. Also a $1000 bonus was added to my salary, and they changed the reason for refinance from cash out to home improvement. I never told them any of those things. I have no idea why that is on the papers and I wasn’t aware of it until I got their letter.  Could they have changed it to pass the loan through at the time and sent it to me by mistake? “

Clearly, this borrower feels acutely aware of misbehavior by the mortgage broker or lender through falsification of the loan application.  The borrower does not admit signing the loan application, but of course we know he must have signed a loan application, the note, and the security instrument at closing.  Typically, the closing officer shoves one form after another across the table to the borrower and shows where to sign it.  Typically, the borrower never bothers reading it or having an attorney review it in advance.

And, look at this text from the Acknowledgement and Agreement section of FannieMae’s Uniform Residential Loan Application, which most mortgage borrowers sign:

“Each of the undersigned specifically represents to Lender and to Lender’s actual or potential agents, brokers, processors, attorneys, insurers, servicers, successors and assigns and agrees and acknowledges that:  (1) the information provided in this application is true and correct as of the date set forth opposite my signature and that any intentional or negligent misrepresentation of this information contained in this application may result in civil liability, including monetary damages, to any person who may suffer any loss due to reliance upon any misrepresentation that I have made on this application, and/or in criminal penalties including, but not limited to, fine or imprisonment or both under the provisions of Title 18, United States Code, Sec. 1001, et seq. …”

I have supplied that and other criminal laws from the Legal Information Institute that might interest you.  These and other federal criminal laws might stimulate you into reporting your crooked mortgage broker to the FBI.  However, if you signed the loan application at closing, FBI agents, DOJ attorneys, and federal judges might construe that as meaning you read and understood and agreed with the content of every document you signed BEFORE signing it.  If so, whom might they consider committed bank fraud, etc?

In spite of this, Congress has established statutes that impose time limitations for prosecuting people for crimes.  If too much time goes by between commission of the crime and indictment, the government might lose the authority to prosecute.  These statutes can get a little complicated and non-uniform, so attorneys must study them carefully to learn the effect on their clients.  The student can find a Congressional Research Service report on the Statutes of Limitations here.

Note that this article deals only with federal crimes.  Your state has its own criminal and civil laws that might affect appraisers, mortgage brokers, title companies, Realtors, lenders, servicers, and borrowers.

This author thinks it makes sense to contact a competent attorney and seek legal advice about whether and how to report suspicions that a mortgage broker or other entity involved in your mortgage loan transaction has committed a crime by hoodwinking you.

You might have many kinds of criminal and civil issues in your mortgage transaction.  It makes most sense to get a competent professional to examine your mortgage so as to find ALL of those issues so you can identify them to your attorney in preparation for suing or filing a criminal complaint.  If you want a comprehensive mortgage examination, notify Maven via Mortgage Attack‘s Contact page.

————— Start of US Code ————-

18 USC 4 – Misprision of felony.

Whoever, having knowledge of the actual commission of a felony cognizable by a court of the United States, conceals and does not as soon as possible make known the same to some judge or other person in civil or military authority under the United States, shall be fined under this title or imprisoned not more than three years, or both.

18 USC 1001 – Statements or entries generally.

(a) Except as otherwise provided in this section, whoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly and willfully—

(1) falsifies, conceals, or covers up by any trick, scheme, or device a material fact;
(2) makes any materially false, fictitious, or fraudulent statement or representation; or
(3) makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry;
shall be fined under this title, imprisoned not more than 5 years or, if the offense involves international or domestic terrorism (as defined in section2331), imprisoned not more than 8 years, or both. If the matter relates to an offense under chapter 109A, 109B, 110, or 117, or section 1591, then the term of imprisonment imposed under this section shall be not more than 8 years.
(b) Subsection (a) does not apply to a party to a judicial proceeding, or that party’s counsel, for statements, representations, writings or documents submitted by such party or counsel to a judge or magistrate in that proceeding.
(c) With respect to any matter within the jurisdiction of the legislative branch, subsection (a) shall apply only to—

(1) administrative matters, including a claim for payment, a matter related to the procurement of property or services, personnel or employment practices, or support services, or a document required by law, rule, or regulation to be submitted to the Congress or any office or officer within the legislative branch; or
(2) any investigation or review, conducted pursuant to the authority of any committee, subcommittee, commission or office of the Congress, consistent with applicable rules of the House or Senate.

18 USC 1341 – Frauds and swindles.

Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, or to sell, dispose of, loan, exchange, alter, give away, distribute, supply, or furnish or procure for unlawful use any counterfeit or spurious coin, obligation, security, or other article, or anything represented to be or intimated or held out to be such counterfeit or spurious article, for the purpose of executing such scheme or artifice or attempting so to do, places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or deposits or causes to be deposited any matter or thing whatever to be sent or delivered by any private or commercial interstate carrier, or takes or receives therefrom, any such matter or thing, or knowingly causes to be delivered by mail or such carrier according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing, shall be fined under this title or imprisoned not more than 20 years, or both.

18 USC 1344 – Bank Fraud. 
Whoever knowingly executes, or attempts to execute, a scheme or artifice—
(1) to defraud a financial institution; or
(2) to obtain any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations, or promises;
shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.
18 USC 1346 – Scheme or Artifice to Defraud.
For the purposes of this chapter, the term “scheme or artifice to defraud” includes a scheme or artifice to deprive another of the intangible right of honest services.

 

————— End of US Code ————-

 

Dilemmas of Appraising and Mortgaging Land Separate from Improvements

 

Copyright © 15 November 2014 by Bob Hurt.  All rights reserved.  chimera_328Distribute intact freely.

Traditional Lending

In this modern age where every smart phone out-computes office computers of the early 1980’s, why do Americans suffer mortgages with the same terms on the land as on the improvements?  Surely, investors’ computers and MBA finance specialists can figure out ways of securing home loans with different terms for the land and the improvement.  That could provide a good return on investment for both the borrower and the lender.

Residential realty consists of

  1. The raw land;
  2. General amenities (roads, sidewalks, water, sewer, electricity, cable for phone/internet/tv, HOA deed restrictions, zoning restrictions);
  3. Specific improvements (the house, landscaping, garage and other outbuildings, sport facilities, pool, patio, etc);
  4. Community amenities (location, recreation facility, common area, economic stratum and quality of residents).

The lending process for such realty these days typically results in at least one note and one security instrument.  The lender assigns an interest rate based on numerous factors, principally the conjectured ability and reliability of the borrower to repay, the volatility of the market, term of the loan, the Federal Reserve prime rate, and the likelihood that a foreclosure sale will equitably compensate the lender.  In most loans, the lender lumps together all of the above-enumerated components in the mortgage, and the borrower pays the same interest rate over the same term for the land as for the improvements.

Innovative Bifurcated Loan Products

But, what if the lender charged a different interest rate for the land than for its improvements?  After all, the house and grounds can fall into disrepair, and that will diminish the value in an emergency foreclosure sale.  The raw land stays the same, and its value won’t diminish unless a sink hole opens up under the house or the entire community value diminishes because of fracking or a massive demographic change.  In other words, the raw land has much more stable and predictable value than the improvements to the property.

Lenders could break the loan apart into two amounts, one for the land and the other for the house and other improvements.  Lenders could charge a lower interest rate on the land, and finance it for a different amount of time, than the improvements.  This would allow borrowers to retire the debt early, reduce lender risk, and give the lender a fair return on investment.

SCOTUS Throws a Wrench in the Works

Finance specialists might develop such bifurcated loan products, but it seems doubtful that they will introduce any in the near future because of the US Supreme Court ruling in Alice v CLS Bank on 19 June 2014 (see arguments here).  In the opinion, the SCOTUS invalidated hundreds of patents for financial products or business methods, claiming patent laws do not apply to them because they fit within the exception categories of “Laws of nature, natural phenomena, and abstract ideas” within the scope of 35 USC §101, in other words, “building blocks of human ingenuity.”  Simply put, the idea itself is not patentable.  Justice Sotomayor summarized the principle nicely:

“I adhere to the view that any “claim that merely describes a method of doing business does not qualify as a ‘process’ under §101.” Bilski v. Kappos, 561 U. S. 593, 614 (2010) (Stevens, J., concurring in judgment); see also In re Bilski, 545 F. 3d 943, 972 (CA Fed. 2008) (Dyk, J., concurring) (“There is no suggestion in any of th[e] early [English] consideration of process patents that processes for organizing human activity were or ever had been patentable”). As in Bilski, however, I further believe that the method claims at issue are drawn to an abstract idea. Cf. 561 U. S., at 619 (opinion of Stevens, J.). I therefore join the opinion of the Court. ”

How the Lenders Guarantee the Loan Benefits Them

Let us ever bear in mind the cogent reality that lenders do not care about the borrower’s return on investment whatsoever.  Lenders and their agents and associates do everything lawfully possible to maximize their own return on investment and minimize their cost.  The note, the mortgage or deed of trust, the appraisal, the HUD1 report, the TILA disclosures and every other document related to the loan has but one purpose, from the lender’s perspective – to make money.  Therefore, they design NOTHING to benefit the borrower except as required by government.   The lender wants the seller to sell the house for top dollar, the appraiser to value the collateral property for that same top dollar, the mortgage broker to qualify the borrower for repayment of a loan for that top dollar.  All the legal forms are engineered to benefit the lender first and foremost.

How Appraisals Benefit the Lender, not the Borrower

I mentioned at the beginning of this essay the idea of separate loans for the land and for the improvements.  Naturally, that implies separate appraisals.  In speaking with a seasoned real estate professional and former appraiser on this very subject today, I began to see a significance of appraisals that I had not previously considered.  The appraiser works for the lender, not for the borrower.  The lender pays the appraiser and gives the appraiser an assignment.  That assignment tells the appraiser how to focus the valuation.  It normally seeks to justify the selling price, not the actual value of the property.  Of course, the comparable sales constitute biggest indicator of price justification.  The appraiser focuses mostly on whether similar properties have sold for an amount similar to the target property asking price.

This does not at all benefit the borrower.  The borrower wants to know whether the property has the worth of the asking price, not whether other buyers have paid a similar price.  The appraiser never answers that question because the borrower does not pay the appraiser or give the appraiser that assignment.

Yet, borrowers nearly universally believe that the appraised value of the realty constitutes its actual worth.  It does not.  And that means the lending and appraisal industry basically runs a scam of deception to fool the borrower into thinking the realty has a value at least as high as the selling price, or in the case of refinances, that the house has the worth of the appraised value.

Legislative Intervention Warranted

I believe the legislatures should intervene in this deception by mandating that appraisers must give equal balance to replacement cost, income capitalization, and market value approaches to property valuation, and estimate the actual worth of the property, not to estimate whether the selling price is justified.  Ultimately, the borrower pays the cost of that appraisal, even if the lender orders it.  Therefore, it should serve the borrower’s interest at least as much as it serves the lender’s.

Today, appraisers ignore income capitalization altogether, give scant weight to replacement cost, and focus mostly on market value – what people seem willing to pay for similar properties.

The main problem with market value lies in the vagaries of markets.  If the FED lowers the interest rate, people will rush to refinance or buy realty on credit so as to get the most property possible for their monthly payments.  This will create an artificial demand, and force up the market value through competition of many buyers for few houses.  Ultimately, that will cause replacement cost to rise as builders seek to benefit from the windfall.

Additionally, as we saw in the financial crisis, widespread job loss causes widespread foreclosure which collapses housing prices, and consequently leaves other home loan borrowers with underwater loan balances – they owe more than the value of the house, and therefore they have lost their equity in the home and must sell it at a loss if they sell it at all.  This means they cannot sell it to avert the foreclosure, and the deficiency leads many to seek bankruptcy protection. It has become a gargantuan disaster over the past decade.  This provides further insight into the scam of market valuation method of appraisal.

Dramatic Importance of Income Capitalization Valuation

In reality, all real estate constitutes a business investment.  The owner might use it as a residence or rent it out or convert it into a business site, zoning and deed restrictions permitting.    As an investment, borrowers have good reason to look for a return. This makes the income capitalization approach to valuation intensely important to borrowers.  Appraisers should always ask “How much money could this property produce if turned to business use?”  Obviously, renting it out constitutes the most common such use.  So the appraiser should evaluate the rental income of similar properties similarly situated.

Borrowers should consider this valuation carefully before agreeing to borrow the money.  Why?  Well, what if the borrower suffered a stroke and the family needed to rent out the house to pay for a care-giver?  The rent and maintenance should exceed the monthly debt service, shouldn’t it?  If it doesn’t, that means the property was overpriced or overvalued.  That makes the typical appraised value a lie, from the borrower’s viewpoint.   Doesn’t it?

Challenge to Financial Innovators

If inventors concoct some slick loan products with different interest rates and terms for land and improvements, then they should also concoct some new USPAP (Uniform Standards of Professional Appraisal Practice) guidelines in order to support the borrower’s interest as well as the lender’s.  Of course, the lenders will never support such appraisal guidelines.  But if they did, they would have far more secure collateral for their investments, and in the end everyone would win.

Bob Hurt            Blog 1 2   f  t
2460 Persian Drive #70
Clearwater, FL 33763
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Public Access to Law; Discipline for Foreclosure Pretender Defenders

To:

Professor Dale A. Whitman, Dean Emeritus
University of Missouri-Columbia Law School

Dear Professor Whitman:

I saw your article “Learning from the Mortgage Crisis” in a friend’s magazine.  I thought I’d write and ask you to send me a copy of the pdf file.  Will you send it to me, please, by return email?  Why haven’t you posted that article on your site?

In reading your UCC law journal article (April 2013) recommending a proper nationwide standard of electronic registration for mortgages and notes, I noted several issues which I believe warrant comment.

1.  I fully agree with you.  I don’t blame banks for creating MERS in order to reduce their costs related to recording loan security instruments with county clerks.  But the problems related to the musical chairs game with notes, the robosigning, the securitization, the phony bond ratings, the questionable assignments, the foreclosure plaintiffs who lack standing, and the note assignment after suing all beg for a standardized solution.  That system you recommend should also mandate notice from the court clerk of any lis pendens regarding a registered mortgage or deed of trust, and of any foreclosure complaint and of any related final judgment encumbering or freeing the mortgage.

2.  I doubt seriously that anyone but an idiot would destroy the note, and I believe none of the banks did.  I believe they stashed those notes in their warehouse file cabinets and did not want to risk their lost by giving handing them to the courts; furthermore, they wanted the freedom to use them commercially by assigning or handing them to others without the fetter of the court’s having possessions, SIMPLY BECAUSE of the UCC requirement that possession alone entitles enforcement.

From your footnote 16 about the article Naked Capitalism, FUBAR Mortgage Behavior; Florida Banks Destroyed Notes;  Others Never Transferred Them, Sept. 27, 2010, available at http://www.nakedcapitalism.com/2010/09/more-evidence-of-bank-fubar-mortgage-behavior-orida-banks-destroyed-notes-others-never-transferred-them.html.
3. I don’t believe the destroyed note allegation of the article because, in spite of Florida Statute 673.3091 permitting enforcement of the lost or destroyed note, we have the issue of admission of evidence in Florida courts.  I hope you will address it in a future commentary.

From Florida’s Evidence Code in Florida Statute 90.953:

90.953 Admissibility of duplicates.—A duplicate is admissible to the same extent as an original, unless:
(1) The document or writing is a negotiable instrument as defined in s. 673.1041, a security as defined in s. 678.1021, or any other writing that evidences a right to the payment of money, is not itself a security agreement or lease, and is of a type that is transferred by delivery in the ordinary course of business with any necessary endorsement or assignment.
(2) A genuine question is raised about the authenticity of the original or any other document or writing.
(3) It is unfair, under the circumstance, to admit the duplicate in lieu of the original.

4.  If the court cannot admit the copy of the lost note into evidence, how does the note become a fact before the court so that the court can enforce it?  Well, how about this handy statute that allows re-establishment?

71.011 Reestablishment of papers, records, and files.—All papers, written or printed, of any kind whatsoever, and the records and files of any official, court or public office, may be reestablished in the manner hereinafter provided.
(1) WHO MAY REESTABLISH.—Any person interested in the paper, file or record to be reestablished may reestablish it.
(2) VENUE.—If reestablishment is sought of a record or file, venue is in the county where the record or file existed before its loss or destruction. If it is a private paper, venue is in the county where any person affected thereby lives or if such persons are nonresidents of the state, then in any county in which the person seeking the reestablishment desires.
(3) REMEDY CONCURRENT.—Nothing herein shall prevent the reestablishment of lost papers, records and files at common law or in equity in the usual manner.
(4) EFFECT.—
(a) Any paper, record or file reestablished has the effect of the original. A private paper has such effect immediately on recording the judgment reestablishing it, but a reestablished record does not have that effect until recorded and a reestablished paper or file of any official, court or public officer does not have that effect until a certified copy is filed with the official or in the court or public office where the original belonged. A certified copy of any reestablished paper, the original of which is required or authorized by law to be recorded, may be recorded.
(b) When any deed forming a link in a chain of title to land in this state has been placed on the proper record without having been acknowledged or proven for record and has thereafter been lost or destroyed, certified copies of the record of the deed as so recorded may be received as evidence to reestablish the deed if the deed has been so recorded for 20 years.
(5) COMPLAINT.—A person desiring to establish any paper, record or file, except when otherwise provided, shall file a complaint in chancery setting forth that the paper, record or file has been lost or destroyed and is not in the custody or control of the petitioner, the time and manner of loss or destruction, that a copy attached is a substantial copy of that lost or destroyed, that the persons named in the complaint are the only persons known to plaintiff who are interested for or against such reestablishment.

Apparently, a Plaintiff can re-establish the lost note and then enforce it so long as he indemnifies the Defendant against some other party’s effort to enforce the original note.  Unfortunately, not many plaintiffs claiming to have lost the note have reestablished it in order to admit it into evidence.  In fact, I don’t know of any, but I have imperfect access to court records for conducting a research into the question.

FYI, I am not an attorney and have not attended law school.  I’d love to attend, but it isn’t likely to produce any benefit at this stage of my life except to satisfy my curiosity.  I study law issues as an avocation.

Since 2007 I have focused on Mortgage issues.  I started by inquiring into the means to beat foreclosures.  Eventually I abandoned that interest in favor of a principle I call “Mortgage Attack.”  I have fleshed out the principle in my web site http://MortgageAttack.com.  As I see it, a borrower who breached a valid note cannot defeat a mortgage foreclosure generally.  However, a colossal foreclosure defense legal industry has arisen by which attorneys deceive foreclosure victims with a contrary suggestion.   In actuality, they bilk their clients out of, for example, $2500 retainer plus $500 per month “for as long as we can keep you in the house.”  In my opinion, all those attorneys belong in prison for fraud.  To begin with, they KNOW the client will lose the house unless they con the client into a loan modification or short sale.  And then they continue using the same tired and frivolous arguments in the foreclosure pretense defense which they know will fail – complaining about statute of limitation tolling, robosigning, vapor money, no original note, conditions precedent, etc. They use copy-machine pleadings and motions in a dilatory effort to make it seem that they earn their fees.  And worst of all they NEVER bother examining the mortgage transaction documents for evidence of borrower injury by the lender and lender’s agents and associates.

If I came to you and said “Professor, I just got accused of breaching the note, and now they want to take my house.  Will you help me please?” what would you suggest?  Wouldn’t you say something like this:

Well did you take out a loan?  Did you sign the papers?  Did you breach the note by failing to pay timely?  Let me see those papers, and tell me a little about the events surrounding that loan.  Let me see the appraisal and original loan application, and HUD-1 report, and your TILA notices.?”

Wouldn’t you interview the supplicant to determine whether any shady activities happened?  Wouldn’t you verify that the appraiser, mortgage broker, and lender had proper licenses and operated from offices registered with the Secretary of State? Wouldn’t you ascertain whether the broker promised one set of terms, but hoodwinked the borrower into signing papers with a different set of terms.  Wouldn’t you look for broker lies on the loan application that made the borrower seem more than actually qualified?  Wouldn’t you look at the interest rates and origination fees to determine whether they exceeded standards?  Wouldn’t you look for patterns of misbehavior that might justify offsets even in the event the statute of limitations had tolled on the behaviors? Wouldn’t you look for evidence of violations of the FCRA, FDCPA, TILA, RESPA, HOEPA, ECOA, etc? Wouldn’t you look for contract breaches, fraud and other tortious conduct, legal errors, and regulatory violations that injured the borrower?

Normal foreclosure pretender defender attorneys might give those efforts lip service, but virtually never do them. They don’t do them because they don’t know how, a byproduct of lack of intimate familiarity with the regulations and tort/contract/mortgage law, and because of laziness and greed.  A competent mortgage examination team might spend 40 to 60 hours on such a project.  A typical. lawyer would want to charge a broke foreclosure victim $12,000 to $18,000 for the service.  As a result, the lawyer would have to get out of the business of foreclosure defense.

But, that is exactly what it will take for lawyers actually to give their foreclosure victim clients any hope of convincing the lender to modify the loan to the borrower’s benefit, or of convincing the court to order set-offs from the debt or compensatory and punitive damages to salve the borrower’s injuries.

Such winning awards do happen, but they are exceedingly rare.  And we shall never know how many such cases settle out of court because the borrower managed to convince the lender to avoid the related litigation.

Here’s an anomalous case for your reference:

http://mortgageattack.com/2014/07/10/brown-v-quicken-loans-shows-how-to-punish-abusive-mortgagees/

In that small article, I provided a link to all of the case documents I could find on the web.  You might find more using your WestLaw resources.  I have expected a final resolution of the case for several days.  The appraiser settled for $700K, and the trial court ordered Quicken Loans to pay nearly $5 million in damages, fees, and costs.  Quicken appealed.  Maybe you can find out when the West Virginia Supreme Court will issue its final opinion.

I consider Brown v Quicken Loans the “Poster Child” Mortgage Attack methodology case from which all pretender defender lawyers should learn.  But I estimate that lenders and their agents and associates have injured or cheated at least 80%, and upwards of 95% of mortgage borrowers in the past 15 years.  Precious few attorneys hold them accountable for that maleficent behavior.  And let’s face reality.  Brown’s lawyer took the case on contingency because he knew the judge and his sentiments well and knew his client had suffered extraordinary injuries, and he knew the client as decent person.  Few lawyers will take any foreclosure case on contingency until after having made it ready for trial.  That means the injured borrower must handle the case personally, if anyone handles it at all.

And this brings me to my final point.

You have wisely suggested a dramatic and electronic improvement to the loan registration problem.  But we have two far worse problems:

  1. Bad ethics in the foreclosure “Pretense Defense” attorney business model – it should be outlawed.
  2. Lack of availability of online resources for pro se litigants who should not need a lawyer for “mortgage attack,” coupled with the exorbitant cost imposed by the legal services monopoly.

I know of no cure for the bad ethics other than widespread class actions against foreclosure pretender defenders and State Attorneys attacking them for fraud.  Any attorney commits fraud by re-using frivolous legal arguments that he knows will lose.  Obviously, judges will not punish them, or they already would have.  And just as obviously, law school ethics professors have had little impact on the greed factor that drives attorneys to cheat their clients .

People would find it easier to prevail against crooked banks if they could afford an aggressive, competent attorney. But people cannot afford them generally because the attorneys enjoy a monopoly on legal services. Unauthorized Practice of Law statutes (UPL is a felony in Florida) have made possible that legal services monopoly.   But the law does not protect people against incompetent, lazy, or crooked attorneys. Legal writers have recognized this as an outrage for decades:

And of course many people would fare well in court on their own if they only learned the basics of litigation, civil procedure, and evidence code in high school.  Unfortunately, it has become exceedingly difficult to obtain a decent legal education in high school, college, or on one’s own because of the practice of hiding the law or making it inordinately expensive to discover.  Yes, we have the laws.  But government has posted them on a sign 20 feet in the air, and only attorneys have the ladder needed to read that sign.  By this I mean the actual law has become out of reach, not because people cannot find it, but because of the skill they need to locate the relevant part – court rulings.

Good attorneys support their legal arguments in their court filings with case law.  They generally find that case law using a legal search engine to which they subscribe for a monthly fee.  But the filings that resulted in that case law sit in a clerk’s file cabinet in courts across America, or in law books in law libraries that most people simply cannot access.

And that law which people can access suffers from exiguity or poor organization. In Florida only parties to the case and their lawyers can access the electronic filings in the case.  This seem more than a little strange in light of the reality that the constitution mandates that nearly all proceedings remain open to the public.

Thank God for Google Scholar and Google Books.  Google has made many old law books available, and many if not most of the appellate opinions across America available to the public without requiring that people browse the court sites.  Google has done the job that rightly belongs to government, particularly the courts, of making the law available and visible to, and through the search engine somewhat well-organized for, the masses.

I realize that you personally can do nothing about the terrible ethics in the mortgage foreclosure and foreclosure defense industry.

But perhaps you can propose an electronic means of solving the problem of relative unavailability of the law to non-attorneys.  Some federally coordinated electronic repository should exist akin to PACER, but free, and fully searchable by topic, party, judge, attorney, clerk, and bailiff, nationwide, making all court dockets and filings, from traffic and all other administrative courts, county and other trial courts, and appellate courts, available to the public, particularly to Americans and students in public and private schools.  And that access should cost the public nothing, for the law and the documents leading up to it, should become and remain free for all to read at home through internet access.

And need only one good reason for this.  People can easily commit a vast array of “infractions” and crimes without ever leaving home, and become most susceptible to harassment and arrest for alleged infractions and criminal acts upon setting foot outside the home.  It seems only fair that people should have the benefit of finding, reading, learning, and knowing the law before venturing out of the privacy of one’s home, if any such privacy remains.

Sincerely,

Bob Hurt

Why Mortgagors Lack Standing to Dispute or Enforce Note Assignment or PSA

These two opinions (excerpts from the list below) show why securitization and assignment arguments MUST fail in a foreclosure dispute.  Borrower suffered no injury, has no interest in, and never became a party to the Pooling and Servicing Agreement (PSA) or any assignment of the note.  So, the borrower has no standing to dispute or enforce the assignment or PSA.

  1. Maynard v. Wells Fargo Bank, N.A. (S.D. Cal., 2013) (“Plaintiffs also allege that they conducted a Securitization Audit of Plaintiffs’ chain of title and Wachovia’s PSA, and as a result, determined that Plaintiffs’ Note and DOT were not properly conveyed into the Wells Fargo Trust on or before July 29, 2004, the closing date listed in the Trust Agreement. (Id. at ¶ 34.)… To the extent Plaintiffs challenge the validity of the securitization of the Loan because Wells Fargo and U.S. Bank failed to comply with the terms of the PSA or the Trust Agreement, Plaintiffs are not investors of the Loan, nor are Plaintiffs parties to the PSA or Trust Agreement. Therefore, as many courts have already held, Plaintiffs lack standing to challenge the validity of the securitization of the Loan…Furthermore, although Plaintiffs contend they have standing to challenge the validity of the Assignment because they were parties to the DOT with the original lender (Wells Fargo), this argument also fails. (Doc. No. 49 at 11-12.).
  2. Jenkins v. JP Morgan Chase Bank, N.A., 216 Cal. App. 4th 497, 511-13, 156 Cal. Rptr. 3d 912 (Cal. Ct. App. 2013) (“[E]ven if any subsequent transfers of the promissory note were invalid, [the borrower] is not the victim of such invalid transfers because her obligations under the note remained unchanged.”). As stated above, these exact arguments have been dismissed by countless other courts in this circuit. Accordingly, Plaintiffs’ contentions that the Assignment is void due to a failure in the securitization process fails.”).

Cases Where Homeowners Lost by Arguing Securitization

  1. Rodenhurst v. Bank of Am., 773 F. Supp. 2d 886, 899 (D. Haw. 2011) (“The overwhelming authority does not support a [claim] based upon improper securitization.”) “[S]ince the securitization merely creates a separate contract, distinct from plaintiffs’ debt obligations under the Note and does not change the relationship of the parties in any way, plaintiffs’ claims arising out of securitization fail.” Lamb V. Mers, Inc., 2011 WL 5827813, *6 (W.D. Wash. 2011) (citing cases);
  2. Bhatti, 2011 WL 6300229, *5 (citing cases);
  3. In re Veal, 450 B.R. at 912 (“[Plaintiffs] should not care who actually owns the Note-and it is thus irrelevant whether the Note has been fractionalized or securitized-so long as they do know who they should pay.”);
  4. Horvath v. Bank of NY, N.A., 641 F.3d 617, 626 n.4 (4th Cir. 2011) (securitization irrelevant to debt);
  5. Commonwealth Prop. Advocates, LLC v. MERS, 263 P.3d 397, 401-02 (Utah Ct. App. 2011) (securitization has no effect on debt);
  6. Henkels v. J.P. Morgan Chase, 2011 WL 2357874, at *7 (D.Ariz. June 14, 2011) (denying the plaintiff’s claim for unauthorized securitization of his loan because he “cited no authority for the assertion that securitization has had any impact on [his] obligations under the loan, and district courts in Arizona have rejected similar arguments”);
  7. Johnson v. Homecomings Financial, 2011 WL 4373975, at *7 (S.D.Cal. Sep.20, 2011) (refusing to recognize the “discredited theory” that a deed of trust ” ‘split’ from the note through securitization, render[s] the note unenforceable”);
  8. Frame v. Cal-W. Reconveyance Corp., 2011 WL 3876012, *10 (D. Ariz. 2011) (granting motion to dismiss: “Plaintiff’s allegations of promissory note destruction and securitization are speculative and unsupported. Plaintiff has cited no authority for his assertions that securitization has any impact on his obligations under the loan”).”The Court also rejects Plaintiffs’ contention that securitization in general somehow gives rise to a cause of action – Plaintiffs point to no law or provision in the mortgage preventing this practice, and cite to no law indicating that securitization can be the basis of a cause of action. Indeed, courts have uniformly rejected the argument that securitization of a mortgage loan provides the mortgagor a cause of action.”
  9. See Joyner V. Bank Of Am. Home Loans, No. 2:09-CV-2406-RCJ-RJJ, 2010 WL 2953969, at *2 (D. Nev. July 26, 2010) (rejecting breach of contract claim based on securitization of loan);
  10. Haskins V. Moynihan, No. CV-10-1000-PHX-GMS, 2010 WL 2691562, at *2 (D. Ariz. July 6, 2010) (rejecting claims based on securitization because plaintiffs could point to no law indicating that securitization of a mortgage is unlawful, and “[p]laintiffs fail to set forth facts suggesting that Defendants ever indicated that they would not bundle or sell the note in conjunction with the sale of mortgage-backed securities”);
  11. Lariviere V. Bank Of N.Y. As Tr., Civ. No. 9-515-P-S, 2010 WL 2399583, at *4 (D. Me. May 7, 2010) (“Many people in this country are dissatisfied and upset by [the securitization] process, but it does not mean that the [plaintiffs] have stated legally cognizable claims against these defendants in their amended complaint.”);
  12. Upperman V. Deutsche Bank Nat’l Trust Co., No. 01:10-cv-149, 2010 WL 1610414, at *3 (E.D. Va. Apr. 16, 2010) (rejecting claims because they are based on an “erroneous legal theory that the securitization of a mortgage loan renders a note and corresponding security interest unenforceable and unsecured”);
  13. Silvas V. Gmac Mortg., Llc, No. CV-09-265-PHX-GMS, 2009 WL 4573234, at *5 (D. Ariz. Dec. 1, 2009) (rejecting a claim that a lending institution breached a loan agreement by securitizing and cross-collateralizing a borrower’s loan). The overwhelming authority does not support a cause of action based upon improper securitization. Accordingly, the Court concludes that Plaintiffs cannot maintain a claim that “improper restrictions resulting from securitization leaves the note and mortgage unenforceable);
  14. Summers V. Pennymac Corp. (N.D.Tex. 11-28-2012) (any securitization of Plaintiffs’ Note did not affect their obligations under the Note or PennyMac’s authority as mortgagee to enforce the Note and foreclose on the property if Plaintiffs defaulted).;
  15. Nguyen V. Jp Morgan Chase Bank (N.D.Cal. 10-17-2012) (“Numerous courts have recognized that a defendant bank does not lose its ability to enforce the terms of its deed of trust simply because the loan is assigned to a trust pool. In fact, ‘securitization merely creates a separate contract, distinct from [p]laintiffs[‘] debt obligations under the note, and does not change the relationship of the parties in any way. Therefore, such an argument would fail as a matter of law”);
  16. Flores v. Deutsche Bank Nat’l Trust Co., 2010 WL 2719848, at *4 (D. Md. July 7, 2010), the borrower argued that his lender “already recovered for [the borrower’s] default on her mortgage payments, because various ‘credit enhancement policies,’” such as “a credit default swap or default insurance,” “compensated the injured parties in full.” The court rejected the argument, explaining that the fact that a “mortgage may have been combined with many others into a securitized pool on which a credit default swap, or some other insuring-financial product, was purchased, does not absolve [the borrower] of responsibility for the Note.” Id. at *5;
  17. see also Fourness v. Mortg. Elec. Registration Sys., 2010 WL 5071049, at *2 (D. Nev. Dec. 6, 2010) (dismissing claim that borrowers’ obligations were discharged where “the investors of the mortgage backed securities were paid as a result of . . . credit default swaps and/or federal bailout funds);
  18. Warren v. Sierra Pac. Mortg. Servs., 2010 WL 4716760, at *3 (D. Ariz. Nov. 15, 2010) (“Plaintiffs’ claims regarding the impact of any possible credit default swap on their obligations under the loan . . . do not provide a basis for a claim for relief”).
  19. Welk v. GMAC Mortg., LLC., 850 F. Supp. 2d 976 (D. Minn., 2012) (“At the end of the day, then, most of what Butler offers is smoke and mirrors. Butler’s fundamental claim that his clients’ mortgages are invalid and that the mortgagees cannot foreclose because they do not hold the notes is utterly frivolous.);
  20. Vanderhoof v. Deutsche Bank Nat’l Trust (E.D. Mich., 2013) (internal citations omitted) (“s]ecuritization” does not impact the foreclosure. This Court has previously rejected an attempt to assert a claim based upon the securitization of a mortgage loan. Further, MERS acts as nominee for both the originating lender and its successors and assigns. Therefore, the mortgage and note are not split when the note is sold.”);
  21. Chan Tang v. Bank of America, N.A. (C.D. Cal., 2012) (internal citations omitted) (“Plaintiffs’ contention that the securitization of their mortgage somehow affects Defendants’ rights to foreclose is likewise meritless. Plaintiffs have identified no authority supporting their position that securitization voids the power of sale contained in a deed of trust. Other courts have dismissed similar arguments. Thus, the claim that Defendants lack the authority to foreclose because the Tangs’ mortgage was pooled into a security instrument is Dismissed With Prejudice.);
  22. Wells v. BAC Home Loans Servicing, L.P., 2011 WL 2163987, *2 (W.D. Tex. Apr. 26, 2011) (This claim—colloquially called the “show-me-the-note” theory— began circulating in courts across the country in 2009. Advocates of this theory believe that only the holder of the original wet-ink signature note has the lawful power to initiate a non-judicial foreclosure. The courts, however, have roundly rejected this theory and dismissed the claims, because foreclosure statutes simply do not require possession or production of the original note. The “show me the note” theory fares no better under Texas law.);
  23. Maynard v. Wells Fargo Bank, N.A. (S.D. Cal., 2013) (“Plaintiffs also allege that they conducted a Securitization Audit of Plaintiffs’ chain of title and Wachovia’s PSA, and as a result, determined that Plaintiffs’ Note and DOT were not properly conveyed into the Wells Fargo Trust on or before July 29, 2004, the closing date listed in the Trust Agreement. (Id. at ¶ 34.)… To the extent Plaintiffs challenge the validity of the securitization of the Loan because Wells Fargo and U.S. Bank failed to comply with the terms of the PSA or the Trust Agreement, Plaintiffs are not investors of the Loan, nor are Plaintiffs parties to the PSA or Trust Agreement. Therefore, as many courts have already held, Plaintiffs lack standing to challenge the validity of the securitization of the Loan…Furthermore, although Plaintiffs contend they have standing to challenge the validity of the Assignment because they were parties to the DOT with the original lender (Wells Fargo), this argument also fails. (Doc. No. 49 at 11-12.);
  24. Jenkins v. JP Morgan Chase Bank, N.A., 216 Cal. App. 4th 497, 511-13, 156 Cal. Rptr. 3d 912 (Cal. Ct. App. 2013) (“[E]ven if any subsequent transfers of the promissory note were invalid, [the borrower] is not the victim of such invalid transfers because her obligations under the note remained unchanged.”). As stated above, these exact arguments have been dismissed by countless other courts in this circuit. Accordingly, Plaintiffs’ contentions that the Assignment is void due to a failure in the securitization process fails.”);
  25. Demilio v. Citizens Home Loans, Inc. (M.D. Ga., 2013) (“Frankly, the Court is astonished by Plaintiff’s audacity… Plaintiff requires the Court to scour a poorly-copied, 45-page “Certified Forensic Loan Audit” in an attempt to discern the basic facts of his case. This alone would be sufficient for dismissal. However, the Court is equally concerned by Plaintiff’s attempt to incorporate such an “audit,” which is more than likely the product of “charlatans who prey upon people in economically dire situation,”… As one bankruptcy judge bluntly explained, “[the Court] is quite confident there is no such thing as a ‘Certified Forensic Loan Audit’ or a ‘certified forensic auditor…. The Court will not, in good conscience, consider any facts recited by such a questionable authority.”);
  26. Leong v. JPMorgan Chase (D. Nev., 2013) (“Plaintiff insists that Defendant failed to provide the original note. The only possibly relevant Nevada statute requiring the presentation of the original note or a certified copy is at a Foreclosure Mediation. Nev. Rev. Stat. § 107.086(4). Moreover, the Court treats copies the same as originals: “a duplicate is admissible to the same extent as an original.” Nev. Rev. Stat. § 52.245. Defendants correctly point out that Plaintiff fails to cite to any authority that requires Defendants to produce the original Note, and Defendants additionally provide non-binding legal authority to the contrary. As such, this cause of action is dismissed with prejudice.’);
  27. Rivac v. NDEX W. LLC (N.D. Cal., 2013) (This court is persuaded by the “majority position” of courts within this district, which is that Glaski is unpersuasive, and that “plaintiffs lack standing to challenge noncompliance with a PSA in securitization unless they are parties to the PSA or third party beneficiaries of the PSA.” Shkolnikov v. JPMorgan Chase Bank, 2012 WL 6553988 at *13 (N.D. Cal. Dec. 14, 2012);
  28. see also, e.g., Zapata v. Wells Fargo Bank, N.A., 2013 WL 6491377 at *2 (N.D. Cal. Dec. 10, 2013); Apostol v. CitiMortgage, Inc., 2013 WL 6328256 at *7 (N.D. Cal. Nov. 21, 2013); Dahnken v. Wells Fargo Bank, N.A., 2013 WL 5979356 at *2 (N.D. Cal. Nov. 8, 2013);
  29. Almutarreb v. Bank of New York Trust Co., N.A., 2012 WL 4371410 at *2 (N.D. Cal. Sept. 24, 2012);
  30. Rivac v. NDEX W. LLC (N.D. Cal., 2013) (District courts have consistently found that conclusory allegations of robo-signing are insufficient to state a claim, absent some factual support. See Baldoza v. Bank of America, N.A., 2013 WL 978268 at *13 (N.D. Cal. Mar. 12, 2013);
  31. see also Chan Tang v. Bank of America, N.A., 2012 WL 960373 at *10-11 (C.D. Cal. March 19, 2012);
  32. Sohal v. Fed. Home Loan Mortg. Corp., 2011 WL 3842195 at *5 (N.D. Cal. Aug. 30, 2011);
  33. Chua v. IB Property Holdings, LLC, 2011 WL 3322884 at *2 (C.D. Cal. Aug. 1, 2011))…Further, where a plaintiff alleges that a document is void due to robo-signing, yet does not contest the validity of the underlying debt, and is not a party to the assignment, the plaintiff does not have standing to contest the alleged fraudulent transfer.
  34. See Elliott v. Mortgage Electronic Registration Systems, Inc., 2013 WL 1820904 at *2 (N.D. Cal. Apr. 30, 2013);
  35. Javaheri v. JPMorgan Chase Bank N.A., 2012 WL 3426278 at *6 (C.D. Cal. Aug. 13, 2012). (Plaintiffs here do not dispute that they defaulted on the loan payments, and the robo-signing allegations are without effect on the validity of the foreclosure process);
  36. Deutsche Bank Nat’l Trust Co. v. Tibbs, 2014 WL 280365, at *5 (M.D. Tenn. Jan. 24, 2014) (“[a] Deed of Trust need not be separately assigned so that the holder may enforce the note; as goes the note, so goes the Deed of Trust.’”)

May California Deed of Trust Assignee enforce it without recording

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Conundrum:  You find out that the
assignee of your California Deed of Trust never acknowledged and
recorded the deed of trust with the clerk of courts, and now wants
to enforce the mortgage in order to foreclose.  You dig around and
find these California Civil Code sections below.  Should you attack
the assignee’s standing to foreclose?

Answer:  No. In California, the assignee of
beneficial interest in a mortgage security instrument must duly
acknowledge and record the assignment in order to have the right to
force a foreclosure sale.  The assignee of a beneficial interest in
a deed of trust need not record the assignment in order to force a
foreclosure sale.

Discussion:  A mortgage differs from a deed of
trust.  Both secure the note, such that they entitle the owner of
beneficial interest in the note (or agent) to enforce the note by
foreclosure and forcible sale of the property.  However, a mortgage
requires enforcement through judicial action – the foreclosing party
must sue the borrower for breaching the note.  By contrast, a deed
of trust involves a trustee who receives notice of the breach and of
fulfillment of conditions precedent from the owner of beneficial
interest in the note (or holder or agent), then orders the sale of
the property held in trust.  A mortgage operates as a lien with
title remaining in the borrower (technically, it goes to the
mortgagee for purposes of a mortgage only), and a deed of trust
conveys title to the trustee until the borrower has retired the
debt.

It seems axiomatic that owner of beneficial interest in the note
(oobi) may, in the event the borrower breaches the note, enforce the
note through foreclosure and forcing the sale of the property
securing the debt. Furthermore, it seems axiomatic that the oobi may
assign the security instrument, to another party who may enforce the
security instrument by forcing a foreclosure sale. 

But… always verify what the law means by looking at how the courts
have opined.

For reference see Calvo v HSBC Bank, 199 CAL.APP.4TH 118 (CAL. APP.
2011)

http://www.usfn.org/AM/Template.cfm?Section=USFN_E_Update&section=Q415&template=/CM/ContentDisplay.cfm&ContentFileID=5889
https://casetext.com/case/calvo-v-hsbc-bank-usa-na#.U_KluvldV8E

California
Civil Code Section

2932. A power of sale may
be conferred by a mortgage upon the mortgagee or any other
person, to be exercised after a breach of the obligation for
which the mortgage is a security.

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.

2924. (a) Every transfer of an interest in
property, other than in
trust, made only as a security for the performance of another
act, is
to be deemed a mortgage, except when in the case of personal
property it is accompanied by actual change of possession, in
which
case it is to be deemed a pledge. Where, by a mortgage created
after
July 27, 1917, of any estate in real property, other than an
estate
at will or for years, less than two, or in any transfer in trust
made
after July 27, 1917, of a like estate to secure the performance
of
an obligation, a power of sale is conferred upon the mortgagee,
trustee, or any other person, to be exercised after a breach of
the
obligation for which that mortgage or transfer is a security,
the
power shall not be exercised except where the mortgage or
transfer is
made pursuant to an order, judgment, or decree of a court of
record,
or to secure the payment of bonds or other evidences of
indebtedness
authorized or permitted to be issued by the Commissioner of
Corporations, or is made by a public utility subject to the
provisions of the Public Utilities Act, until all of the
following
apply: (1) The trustee, mortgagee, or beneficiary, or any of
their
authorized agents shall first file for record, in the office of
the
recorder of each county wherein the mortgaged or trust property
or
some part or parcel thereof is situated, a notice of default.
That
notice of default shall include all of the following: (A) A
statement identifying the mortgage or deed of trust by
stating the name or names of the trustor or trustors and giving
the
book and page, or instrument number, if applicable, where the
mortgage or deed of trust is recorded or a description of the
mortgaged or trust property. (B) A statement that a breach of
the obligation for which the
mortgage or transfer in trust is security has occurred. (C) A
statement setting forth the nature of each breach actually
known to the beneficiary and of his or her election to sell or
cause
to be sold the property to satisfy that obligation and any other
obligation secured by the deed of trust or mortgage that is in
default. (D) If the default is curable pursuant to Section
2924c, the
statement specified in paragraph (1) of subdivision (b) of
Section
2924c. (2) Not less than three months shall elapse from the
filing of the
notice of default. (3) Except as provided in paragraph (4),
after the lapse of the
three months described in paragraph (2), the mortgagee, trustee,
or
other person authorized to take the sale shall give notice of
sale,
stating the time and place thereof, in the manner and for a time
not
less than that set forth in Section 2924f. (4) Notwithstanding
paragraph (3), the mortgagee, trustee, or
other person authorized to take sale may record a notice of sale
pursuant to Section 2924f up to five days before the lapse of
the
three-month period described in paragraph (2), provided that the
date
of sale is no earlier than three months and 20 days after the
recording of the notice of default. (5) Until January 1, 2018,
whenever a sale is postponed for a
period of at least 10 business days pursuant to Section 2924g, a
mortgagee, beneficiary, or authorized agent shall provide
written
notice to a borrower regarding the new sale date and time,
within
five business days following the postponement. Information
provided
pursuant to this paragraph shall not constitute the public
declaration required by subdivision (d) of Section 2924g.
Failure to
comply with this paragraph shall not invalidate any sale that
would
otherwise be valid under Section 2924f. This paragraph shall be
inoperative on January 1, 2018. (6) No entity shall record or
cause a notice of default to be
recorded or otherwise initiate the foreclosure process unless it
is
the holder of the beneficial interest under the mortgage or deed
of
trust, the original trustee or the substituted trustee under the
deed
of trust, or the designated agent of the holder of the
beneficial
interest. No agent of the holder of the beneficial interest
under the
mortgage or deed of trust, original trustee or substituted
trustee
under the deed of trust may record a notice of default or
otherwise
commence the foreclosure process except when acting within the
scope
of authority designated by the holder of the beneficial
interest. (b) In performing acts required by this article, the
trustee shall
incur no liability for any good faith error resulting from
reliance
on information provided in good faith by the beneficiary
regarding
the nature and the amount of the default under the secured
obligation, deed of trust, or mortgage. In performing the acts
required by this article, a trustee shall not be subject to
Title
1.6c (commencing with Section 1788) of Part 4. (c) A recital in
the deed executed pursuant to the power of sale
of compliance with all requirements of law regarding the mailing
of
copies of notices or the publication of a copy of the notice of
default or the personal delivery of the copy of the notice of
default
or the posting of copies of the notice of sale or the
publication of
a copy thereof shall constitute prima facie evidence of
compliance
with these requirements and conclusive evidence thereof in favor
of
bona fide purchasers and encumbrancers for value and without
notice. (d) All of the following shall constitute privileged
communications pursuant to Section 47: (1) The mailing,
publication, and delivery of notices as required
by this section. (2) Performance of the procedures set forth in
this article. (3) Performance of the functions and procedures
set forth in this
article if those functions and procedures are necessary to carry
out
the duties described in Sections 729.040, 729.050, and 729.080
of the
Code of Civil Procedure. (e) There is a rebuttable presumption
that the beneficiary
actually knew of all unpaid loan payments on the obligation owed
to
the beneficiary and secured by the deed of trust or mortgage
subject
to the notice of default. However, the failure to include an
actually
known default shall not invalidate the notice of sale and the
beneficiary shall not be precluded from asserting a claim to
this
omitted default or defaults in a separate notice of default. (f)
With respect to residential real property containing no more
than four dwelling units, a separate document containing a
summary of
the notice of default information in English and the languages
described in Section 1632 shall be attached to the notice of
default
provided to the mortgagor or trustor pursuant to Section 2923.3.

COURT OF APPEAL OF
CALIFORNIA, SECOND DISTRICT. EIGHT.
CALVO V. HSBC BANK USA, N.A. 
199 CAL.APP.4TH 118 (CAL. APP. 2011)

DECIDED SEPT. 13, 2011

EUGENIA
CALVO, Plaintiff and Appellant, v. HSBC BANK USA, N.A.,
as Trustee, etc., Defendant and Respondent.

No.
B226494.

Court
of Appeal of California, Second District. Eight.

September
13, 2011.

Appeal
from the Superior Court of Los Angeles County, No.
BC415545, Mark V. Mooney, Judge. *119

Dennis
Moore for Plaintiff and Appellant.

Houser
Allison, Eric D. Houser, Robert W. Norman, Jr., and
Carrie N. Heieck for Defendant and Respondent.

*120

OPINION

Plaintiff
Eugenia Calvo obtained a loan secured by a deed of trust
against her residence. The original lender assigned the
loan and deed of trust to HSBC Bank USA, N.A. (HSBC Bank).
A new trustee was also substituted after the loan was
originated. Plaintiff defaulted in payment of the loan.
The new trustee initiated foreclosure proceedings and
executed a foreclosure sale of plaintiffs residence.
Notice of the assignment of the deed of trust appeared
only in the substitution of trustee, which was recorded on
the same date as the notice of trustee’s sale. The second
amended complaint seeks to set aside the trustee’s sale
for an alleged violation of Civil Code section 2932.5, 1 which requires the
assignee of a mortgagee to record an
assignment before exercising a power to sell real
property. HSBC Bank and its agent, the nominal beneficiary
under the deed of trust, demurred to the second amended
complaint, and the trial court sustained the demurrer
without leave to amend.

1.

All statutory
references are to the Civil Code unless otherwise
specified.

We
find defendant HSBC Bank did not violate section 2932.5
because that statute does not apply when the power of sale
is conferred in a deed of trust rather than a mortgage. We
affirm the judgment dismissing the complaint.

BACKGROUND

Plaintiff
sued HSBC Bank and Mortgage Electronic Registration
Systems, Inc. (MERS), its agent and nominal beneficiary
under the deed of trust recorded against her residence.
Plaintiff had borrowed money from CBSK Financial Group,
Inc., which is not a defendant in this lawsuit. Her loan
was secured by a deed of trust against her residence that
was recorded on September 1, 2006. The deed of trust
identified plaintiff as the trustor, CBSK Financial Group
as the lender, MERS as the nominal beneficiary and
lender’s agent, and Lawyers Title Company as the trustee.
In the deed of trust, plaintiff granted title to her
residence to the trustee, in trust, with the power of
sale. The deed of trust stated: “MERS (as nominee for
Lender and Lender’s successors and assigns) has the right:
to exercise any or all of those interests, *121 including, but not
limited to, the right to foreclose and sell the Property;
and to take any action required of Lender including, but
not limited to, releasing and canceling the Security
Instrument.”

Aztec
Foreclosure Corporation was substituted as trustee under
the deed of trust on or about June 2, 2008. The
substitution of trustee stated that MERS, as nominee for
HSBC Bank, “is the present Beneficiary” under the deed of
trust, as MERS had been for the original lender. The
substitution of trustee was not recorded until October 14,
2008, the same date on which Aztec Foreclosure Corporation
recorded a notice of trustee’s sale. More than three
months before recordation of the substitution of trustee,
Aztec Foreclosure Corporation had recorded a notice that
plaintiff was in default in payment of her loan and that
the beneficiary had elected to initiate foreclosure
proceedings. The notice of default advised plaintiff to
contact HSBC Bank to arrange for payment to stop the
foreclosure.

HSBC
Bank bought plaintiffs residence in the foreclosure sale,
and a trustee’s deed upon sale was recorded on January 9,
2009. The gist of the complaint is that HSBC Bank
initiated foreclosure proceedings under the deed of trust
without any recordation of the assignment of the deed of
trust to HSBC Bank in violation of section 2932.5.

DISCUSSION

A
demurrer tests the legal sufficiency of the complaint. We
review the complaint de novo to determine whether it
alleges facts sufficient to state a cause of action. For
purposes of review, we accept as true all material facts
alleged in the complaint, but not contentions, deductions
or conclusions of fact or law. We also consider matters
that may be judicially noticed. ( Blank v. Kirwan (1985) 39 Cal.3d 311, 318 [ 216 Cal.Rptr. 718, 703 P.2d 58].) When a
demurrer is sustained without leave to amend, “we decide
whether there is a reasonable possibility that the defect
can be cured by amendment: if it can be, the trial court
has abused its discretion and we reverse; if not, there
has been no abuse of discretion and we affirm.” ( Ibid.) Plaintiff has
the burden to show a reasonable possibility the complaint
can be amended to state a cause of action. ( Ibid.)

The
trial court did not err in sustaining the demurrer without
leave to amend. Plaintiffs lawsuit rests on her claim that
the foreclosure sale was void and should be set aside
because HSBC Bank invoked the power of sale without
complying with the requirement of section 2932.5 to record
the assignment of the deed of trust from the original
lender to HSBC Bank. We find no merit in this contention. *122

Section
2932.5 provides: “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.”

It
has been established since 1908 that this statutory
requirement that an assignment of the beneficial interest
in a debt secured by real property must be recorded in
order for the assignee to exercise the power of sale
applies only to a mortgage and not to a deed of trust. In Stockwell v. Barnum(1908) 7 Cal.App. 413 [ 94 P. 400] ( Stockwell), the
court affirmed the judgment against a plaintiff who sought
to set aside and vacate a sale of real property under a
deed of trust. In Stockwell, a couple
borrowed money from two individuals and gave them a
promissory note that provided, in case of default in the
payment of interest, the holder of the note had the option
to demand payment of all the principal and interest. To
secure payment of the note, the borrowers executed and
delivered a deed of trust by which they conveyed to the
trustee legal title to a parcel of real estate, with the
power of sale on demand of the beneficiaries of the
promissory note. The borrowers defaulted. The original
lenders assigned the note to another individual, who
elected to declare the whole amount of principal and
interest due and made demand on the trustee to sell the
property. Before the trustee’s sale was made, but on the
same day as the trustee’s sale, the defaulting couple
conveyed the real property to the plaintiff, who then sued
to set aside the trustee’s sale.

One
of the bases on which the plaintiff in Stockwell sought to set
aside the sale was that no assignment of the beneficial
interests under the deed of trust was recorded and
therefore the original lender’s assignee had no right to
demand a trustee’s sale of the property. The plaintiff inStockwell relied on former
section 858, the predecessor of section 2932.5, as support
for this contention. (The parties correctly acknowledge
that § 2932.5 continued former § 858 without substantive
change.) (Law Revision Com. com., Deering’s Ann. Civ.
Code, § 2932.5 (2005 ed.) p.
454.) TheStockwell court found the
statute did not apply to a trustee’s sale.

The Stockwell court
distinguished a trust deed from a mortgage, explaining
that a mortgage creates only a lien, with title to the
real property remaining in the borrower/mortgagee, whereas
a deed of trust passes title to the trustee with the power
to transfer marketable title to a purchaser. The court
reasoned that since the lenders had no power of sale, and
only the trustee could transfer title, it was immaterial
who held the note. ( Stockwell, supra, 7
Cal.App. at p. 416
.) “The transferee of a
negotiable promissory note, *123 payment of which
is secured by a deed of trust whereby the title to the
property and power of sale in case of default is vested in
a third party as trustee, is not an encumbrancer to whom
power of sale is given, within the meaning of section 858
. . . .” ( Id. at p. 417.)

The
holding of Stockwell has never been
reversed or modified in any reported California decision
in the more than 100 years since the case was decided. The
rule that section 2932.5 does not apply to deeds of trust
is part of the law of real property in California. After
1908, only the federal courts have addressed the question
whether section 2932.5 applies to deeds of trust, and only
very recently. Every federal district court to consider
the question has followed Stockwell. (See, e.g., Roque v. SunTrust
Mortgage, Inc.
(N.D.Cal., Feb. 10, 2010, No.
C-09-00040 RWM) 2010
U.S.Dist. Lexis 11546
, p. *8 [“Section 2932.5
applies to mortgages, not deeds of trust. It applies only
to mortgages that give a power of sale to the creditor,
not to deeds of trust which grant a power of sale to the
trustee.”]; Parcray v. Shea
Mortgage, Inc.
 (E.D.Cal.,
Apr. 23, 2010, No. CV-F-09-1942 OWW/GSA) 2010
U.S.Dist. Lexis 40377
, p. *31 [“There is no
requirement under California law for an assignment to be
recorded in order for an assignee beneficiary to
foreclose.”]; Caballero v. Bank of
America
 (N.D.Cal.,
Nov. 4, 2010, No. 10-CV-02973-LHK) 2010
U.S.Dist. Lexis 122847
, p. *8 [“§ 2932.5 does not require the
recordation of an assignment of a beneficial interest for
a deed of trust, as
opposed to a mortgage”].)2

2.

Plaintiff cited only one
bankruptcy court decision in support of her argument
that section 2932.5 applies to deeds of trust. ( U.S. Bank N.A. v.
Skelton (In re Salazar
) (Bankr. S.D.Cal. 2011) 448
B.R. 814
.) We find the analysis in that case
unpersuasive. Holdings of the federal courts are not
binding or conclusive on California courts, though they
may be entitled to respect and careful consideration. ( Bank of Italy etc.
Assn. v. Bentley
 (1933) 217 Cal. 644,653 [20 P.2d 940] ( Bank of Italy).) A
federal bankruptcy court decision interpreting
California law, however, is not due the same deference.
(SeeStern v. Marshall (2011) 564
U.S. ___
 [ 180
L.Ed.2d 475
, 131 S.Ct. 2594].)

Plaintiff
argues that Stockwell is “[o]utdated”
and, that in the “modern era,” there is no difference
between a mortgage and a deed of trust. Plaintiff
misconstrues Bank of Italy, supra, 217 Cal. 644 as holding that
deeds of trust are the same as mortgages with a power of
sale, and therefore, as supporting her argument that
section 2932.5 applies to both mortgages and deeds of
trust. First, our Supreme Court inBank of Italy did not consider
or construe section 2932.5 or its predecessor statute.

Second,
the court in Bank of Italy did not hold that
a mortgage is the same as a deed of trust. Far from it;
theBank of Italy court recognized
that the distinction between a mortgage, which creates
only a lien, and a deed of trust, *124which
passes title to the trustee, “has become well settled in
our law and cannot now be disturbed.” ( Bank of Italy, supra, 217
Cal. at p. 655
.) Third, the court’s holding was
expressly limited to the question (not in issue here)
whether in California it is permissible to sue on a
promissory note secured by a deed of trust without first
exhausting the security or showing that it is valueless.
The trial court had found “that no action may be brought
on a note secured by a deed of trust unless and until the
security is exhausted. The correctness of this conclusion
is the sole point involved on this appeal.” ( Id. at pp. 647, 648,
650.)

The
plaintiff in Bank of Italy had argued the
only statute requiring that security be exhausted before
suing on the note was limited to mortgages and did not
include the distinctly different deeds of trust. ( Bank of Italy, supra, 217
Cal. at p. 653
.) The Bank of Italy court therefore
considered whether the differences between a mortgage and
a deed of trust under California law should permit the
holder of a note secured by a deed of trust to sue on the
note without exhausting the security by a sale of the
property. The court recognized there were an increasing
number of cases that applied the same rules to deeds of
trust that are applied to mortgages and concluded that
“merely because `title’ passes by a deed of trust while
only a `lien’ is created by a mortgage,” in both
situations the security must be exhausted before suit on
the personal obligation. ( Bank of Italy, supra, 217
Cal. at pp. 657-658
.) Nothing in the holding or
analysis of the Bank of Italy opinion supports
plaintiffs position here that we should find section
2932.5 applies to a deed of trust.

Plaintiff
also is mistaken in contending that Strike v. Trans-West
Discount Corp.
 (1979) 92 Cal.App.3d 735 [ 155 Cal.Rptr. 132] ( Strike) supports her
position. In Strike, a homeowner
had a judgment entered against him on a business debt he
had guaranteed. The homeowner later defaulted in payments
on a bank loan that was secured by a deed of trust against
his home, and he asked the judgment creditor to help him
out. The judgment creditor agreed to buy an assignment of
the home loan and deed of trust from the bank, consolidate
the indebtedness on the home loan with the amount owed to
satisfy the judgment, and extend the maturity date of
these obligations.

The
homeowner defaulted again, and the judgment creditor
initiated nonjudicial foreclosure proceedings. The
homeowner sued in an attempt to avoid foreclosure and
eviction but did not prevail at trial. The Court of Appeal
affirmed. Among the homeowner’s arguments that were
rejected on appeal was the contention that the judgment
creditor’s interest in his home was an equitable lien that
could only be foreclosed by judicial process. The Court of
Appeal found the creditor had the right to pursue
nonjudicial foreclosure, distinguishing an equitable
subrogee from an assignee of a deed of trust with *125 the power of sale.
The court stated: “A recorded assignment of note and deed
of trust vests in the assignee all of the rights,
interests of the beneficiary [citation] including
authority to exercise any power of sale given the
beneficiary ([§ 858]).” (Strike, supra, 92
Cal.App.3d at p. 744
.)

Plaintiff
contends the sentence quoted above establishes that
section 2932.5 (formerly codified at § 858) applies to
deeds of trust. But the Strike court was not
asked to consider or construe the predecessor of section
2932.5. TheStrike court briefly
referred to the predecessor of section 2932.5 by way of
illustrating the difference between an equitable subrogee
and an assignee under a deed of trust with a power of
sale. ( Strike, supra, 92
Cal.App.3d at p. 744
.) “`It is axiomatic, of
course, that a decision does not stand for a proposition
not considered by the court.`” ( Agnew v. State Bd. of
Equalization
 (1999) 21 Cal.4th 310, 332 [ 87 Cal.Rptr.2d 423, 981 P.2d 52].)

In
California, over the course of the past century, deeds of
trust have largely replaced mortgages as the primary real
property security device. (See 4 Miller Starr, Cal. Real
Estate (3d ed. 2003) former § 10:2, p. 15.) Thus, section
2932.5 (and its predecessor, § 858) became practically
obsolete and was generally ignored by borrowers,
creditors, and the California courts. On the other hand,
other statutes expressly give MERS the right to initiate
foreclosure on behalf of HSBC Bank irrespective of the
recording of a substitution of trustee. Section 2924,
subdivision (a)(1), states that a “trustee, mortgagee, or
beneficiary, or any of their authorized agents,” may
initiate the foreclosure process. MERS was both the
nominal beneficiary and agent (nominee) of the original
lender and also of HSBC Bank, which held the note at the
time of the foreclosure sale of plaintiffs residence.
Thus, MERS had the statutory right to initiate foreclosure
on behalf of HSBC Bank pursuant to section 2924,
subdivision (a)(1).

MERS
also had the right to initiate foreclosure on behalf of
HSBC Bank pursuant to the express language of the deed of
trust. Plaintiff agreed in the deed of trust that MERS had
the right to initiate foreclosure and to instruct the
trustee to exercise the power of sale as nominee (i.e.,
agent) of the original lender and its successors and
assigns. (Gomes v. Countrywide Home Loans, Inc.
 (2011) 192 Cal.App.4th 1149,1157,
fn. 9 [ 121 Cal.Rptr.3d 819]
[construing a deed of trust identical in pertinent part to
the trust deed in this case as granting MERS power to
initiate foreclosure as the agent of the note holder, even
if not also as beneficiary].) HSBC Bank was the assignee
of the original lender. Accordingly, HSBC Bank and MERS,
its nominal beneficiary and agent, were entitled to invoke
the power of sale in the deed of trust, and plaintiff has
alleged no legal basis for setting aside the sale in this
case. *126

We
affirm the judgment of dismissal. Respondent is to recover
its costs of appeal.

Bigelow,
P. J., and Flier, J., concurred.

*127

Bob Hurt            Blog
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To ALL Real Estate Short Sale & Loan Mod Agents:

Mortgage Exam Ethically Mandatory Prior to Negotiation with Bank

I write to toss a business philosophy gauntlet before you.  I do not run a business.  I function as ombudsman and consumer activist in support of mortgage victims.  I help people with mortgage problems obtain the best possible advantage for any negotiation with the bank and its agents, or to beat them in a lawsuit.

I consider ANYTHING that operates to defeat that purpose as inimical to it. So, I might become YOUR enemy.  I DO NOT SUPPORT efforts of negotiators and other service providers who undermine the mortgage victim’s ability to negotiate from a position of power.  I shall explain why.

Mortgage Attack, the Only Worthy Methodology

ONE and ONLY one methodology has proven worthy at enabling the best financial outcome possible for mortgagors.  I term it the “Mortgage Attack” methodology.  The Mortgage Attack methodology consists of finding any and all of the ways the mortgage lender and its agents and associates injured the borrower, and using those injuries as negotiating leverage against the bank. This applies whether or not the borrower faces foreclosure.  And the negotiating scenario can include a simple negotiation for a loan modification favoring the borrower, as well as a lawsuit or counter/cross-complaint against the injurious parties.

The Mortgage Attack methodology provides a negotiating advantage to the borrower because it carries an explicit or implicit threat of litigation against the injurious parties for injuring the borrower.  It has become common knowledge that jurors loath lenders and associates who injure borrowers with scurrilous tactics.  Since lawyers for the bank know this, the smarter ones will encourage their clients to settle in some way to avoid the litigation and related damage to the lender’s reputation, not to mention the possibility of monumental damages awards against the bank by the courts.

The Bad Guys in the Transaction

By “lender and its agents and associates” I mean the loan originator, owners of beneficial interest in the note, Realtor, mortgage broker, appraiser, title company operative, servicer, and/or related attorney.  In short, it includes everyone involved in the mortgage transaction and related events other than the borrower.  These are the “Bad Guys” in the transaction, EVEN IF the borrower erred too.  Why?  Because YOU work for the borrower, not the bank, etc.

The borrower’s own attorney or other practitioner can become culpable for injuries to the borrower resulting from the attorney’s failure aggressively to look for such causes of action and to lodge corresponding affirmative defenses, motions to dismiss, or counter/cross-complaints against the lenders and its agents and associates who injured the borrower.

By implication, EVERY PRACTITIONER employed by the mortgagor, including agents for short sale and loan modifications, has ethical and moral duties to guide the borrower toward the Mortgage Attack methodology before undertaking any negotiation for short sale or loan modification on behalf of a mortgage victim.  The reason: only that methodology lets you negotiate from a position of power for the borrower.

Mortgage Examination Critically Important for Finding Evidence of Wrongdoing

The Mortgage Attack paradigm requires a comprehensive mortgage examination by a competent professional to find the causes of action against the lender and its agents and associates.  The examination service provider should render a report showing the causes of action in a form that facilitates admission into evidence in a court of law.  I know of only ONE firm capable of performing such an examination and delivering such a report.  I shall happily divulge the identity of the firm to any with sincere need for the information.

The Challenge, the Gauntlet for Negotiators

I write this commentary to challenge short sale and loan modification agents to encourage their mortgage victim prospects to spend the necessary money on a proper mortgage examination (as above) BEFORE undertaking any short sale or loan modification effort.  The reason should seem obvious, but I’ll explain it anyway.  The prospect might decide to sue the injurious parties instead of negotiating from a position of weakness.  As a consequence of winning such a law suite, the borrower might win huge compensatory and punitive damages, enough to buy several houses.  That will certainly leave the borrower in possession of the mortgaged property at risk.  Furthermore, the borrower can negotiate a short sale or loan modification or keys for cash deal from a position of power and strength, rather than from a position of weakness.

Certainly, the agents for short sale and loan mods will lose some commissions by advocating Mortgage Attack.  But they will also win better negotiated settlements AND more clients because of their integrity.

In essence, I assert in this commentary that agents for short sale and loan mod commit ethics breaches and violate their duties to their prospective clients by telling them a mortgage exam is not always the best way to go when the opposite is obviously true.

Mortgage Attack and Mortgage Exam ALWAYS Come First

Mortgage Attack paradigm demands that the mortgage examination ALWAYS comes first in an effort to deal with a troubling mortgage.  In point of fact, a mortgagor who owes more for a property that its actual value, and a mortgagor facing foreclosure, should ALWAYS purchase a comprehensive mortgage examination by a competent professional FIRST AND FOREMOST, before doing any other thing, to minimize the danger in the mortgage.  ONLY a mortgage examination can give the mortgagor the necessary negotiating leverage for dealing with a bank and its stable of attorneys.

You’ll Earn More Commissions If You DO THE RIGHT THING

Agents for short sale and loan mod seem so terribly desperate for commissions that they will sacrifice the mortgagor client’s best interest by denigrating a mortgage exam as the primary step in resolving the mortgagor’s problems.  That is, plainly, unethical and immoral.

Thus the gauntlet becomes the challenge to do the right thing.  Recommend a mortgage examination for all of your clients as a prerequisite for doing business with them.

Here’s How…

Contact me NOW for free help with that process.

Call 727 669 5511 • Or Click Here.

Mort Gezzam photo
Mort Gezzam

Fight the Right Battle to Cure Your Mortgage Crisis

How to Solve Mortgage and Foreclosure Woes

Do you have an underwater mortgage (you owe more than the value of the property)?

Do you face foreclosure?

You can solve those problems with relative ease and minimize damage to your credit rating if you follow the below decision tree.

You have two battles to fight in the war against the bank over your mortgage.

1.  Foreclosure Defense –  On one side of the hill you have the foreclosure.  If you fight the foreclosure battle, you always lose because of several factors – you signed the note and mortgage, failed to pay, and must forfeit the collateral.

2.  Mortgage Attack – On the other you have the mortgage itself.  When you fight the mortgage (challenge its validity), you can get the loan balance reduced (a “cram-down” loan mod) or get financial compensation or the house free and clear IF you find sufficient causes of action and prosecute them effectively.  The mortgage examination  finds those causes of action.  The examination report shows the causes of action so you can point them out to the bank or judge.

It’s that simple.

Now you face a variety of courses of action depending on your financial condition and the mortgage exam results:

Mortgage Examination Decision Tree

  1. If you are broke
    1. go to Minimize Loss
  2. Else (you are not broke)
    1. get the mortgage examined
    2. If the exam shows causes of action
      1. Negotiate settlement with lender (may need to hire lawyer for $1000)
      2. If you can accept the settlement
        1. embrace the settlement
        2. go to Enjoy Life
      3. else (settlement unacceptable)
        1. Sue lender for causes of action or file counter/cross claim
        2. embrace the result
        3. go to Enjoy Life
    3. else (no causes of action)
      1. go to Minimize Loss
  3. Minimize Loss:
    1. Do Short Sale, Deed in Lieu, or beneficial Loan Mod
    2. go to Enjoy Life
  4. Enjoy Life:
    1. Live happily ever after

I imagine you signed a note and mortgage in which you admitted receiving a loan, having seisen (possession) of the estate, and conveying the estate to the mortgagee for purposes of the mortgage.  Article I Section 10 of the Florida Constitution forbids any law from impairing the obligation of contracts (like the note and mortgage) and Section 21 grants injured persons (including banks) the right to use the courts for redress and justice.  You must forfeit the house for defaulting on the note.  You might drag out the process through legal shenanigans, but I guess you will lose the house in the end at great expense to your fortune and peace of mind…

Unless you can prove that the lender or lender’s agents injured you first.

The key to saving a house from foreclosure AND obtaining financial compensation lies in a comprehensive, competent mortgage examination, and negotiating with or suing the originating lender for the related causes of actions.  If the exam report reveals tortious conduct, legal errors, or contract breaches underlying the mortgage loan, those will provide a measure of opportunity to hammer the lender into a settlement.  Otherwise you don’t negotiate from a position of power, and you lose.  Done right, settling or suing stops the foreclosure, of course.

I know only one mortgage examiner with any degree of competence.  He does not negotiate on price, period.  You fill in a non-disclosure agreement and a questionnaire.  You scan and zip them and all your mortgage and foreclosure related documents (plus loan app and appraisal) and upload the file to the examiner.  He invoices you by PayPal.  You pay with Credit Card or PayPal account.  7 business days later you receive the report.  If it shows causes of action (red ink), you or your attorney negotiate settlement with the originating lender and plaintiff.  If you like the settlement, you settle.  If you don’t, you hire another attorney (fee or contingency) and sue.  The process might drag out a couple of years, but you will probably win (just like the mortgagee wins foreclosures).

  • Click the Contact menu item on the Mortgage Attack web site.
  • Email a request for the Non-Disclosure and Services Agreement, and the  QUESTIONNAIRE.
  • When you receive them, fill them in and execute the agreement.
  • Scan those with all mortgage and foreclosure related documents (closing docs plus appraisal, loan application, etc.) and compress them in a ZIP archive file.
  • Contact Mortgage Attack again for an explanation of how to send the archive file.  You will receive necessary details.
  • Upload the archive to the location provided.  The examination firm will invoice you.  Pay the fee, then receive the report in 7 business days
  • Settle or sue for the causes of action in the report, or (if no causes) walk from the  house with short sale, deed in lieu, keys for cash, etc.

Some gentle reminders…

Contact me by phone (727 669 5511) or Email for further details. I’ll put you in touch with the Chief Examiner after I have answered all your questions.

Yes, you may distribute this article Far and Wide.

Mort Gezzam photo
Mort Gezzam

Securitization Audits Worthless in Spite of Glaski

I have compiled an array of articles dealing with the California 5th District Court of Appeals RED HERRING case known as “Glaski.”  I refer to it as a red herring because foreclosure defense buffs love delaying foreclosure proceedings using securitization arguments that ALWAYS ULTIMATELY FAIL to save the house from foreclosure.  Glaski lost the house to California’s non-judicial foreclosure process for failing to make timely mortgage payments.  He sued and the trial court ruled against him.  He appealed and the appellate panel ruled that the foreclosure lacked validity because the owner of the note never received ownership of it because the assignment to the trustee lacked validity for occurring after the closing date named in the Pooling and Servicing agreement, according to New York state law.

Securitization auditors went wild with glee because that meant their expensive, worthless audits now had value.  However anyone with common sense knows what happens.  The party with the note finds a way to get proper ownership of it and forecloses anyway, and the borrower loses the house anyway.

Well, other California and Federal courts had more sense than the 5th District panel, and they gave the ruling short shrift as they opined that the borrower is not a party to the assignment of the note nor to the Pooling and Servicing Agreement, and has no standing to challenge or enforce either one in court.

So now securitization auditors slide back into their funk, and continue on selling their scam audits to hopeful foreclosure victims who don’t know any better.

Bottom line, NOBODY EVER SAVED A HOUSE FROM FORECLOSURE WITH A SECURITIZATION AUDIT.

I go on to repeat tirelessly that only one thing beats the bank and its associates in mortgage issues:  MORTGAGE ATTACK.  You can read about it elsewhere on http://mortgageattack.com.

 

Why the Glaski Foreclosure Reversal Means NOTHING and Charles Cox Got It Wrong


Law Strategist Proves Glaski Panel & Charles Cox Wrong
19 October 2013 by Bob Hurt. Distribute freely.

Last week DeadlyClear.com published the comments and letter from California paralegal Charles Cox to the California Supreme Court asking it to publish the Glaski opinion which banks don’t want published. In Glaski, the CA 5th District Court overturned a foreclosure because the plaintiff lacked standing because the Depositor indorsed the note in blank to the Trustee of AFTER the closing date of the trust in violation of the Pooling and Servicing agreement. The court claimed the assignment lacked validity under New York trust law, apparently ignoring the PSA’s establishment under Delaware trust law. Banks want the opinion depublished because it could motivate lower courts to halt foreclosures because of violations of the PSA under trust law in other states. See the Court’s Glaski opinion here:

http://www.courts.ca.gov/opinions/documents/F064556.PDF

I have argued that the Plaintiff had these practical choices:

  1. appeal the obviously bad decision, or
  2. correct the standing problem and redo the foreclosure.

I figure choice 2 would cost less, but the appeal would do the legal community more good by using the California Supreme Court to clear up this nonsense. Either way, Glaski gets to keep the house a while longer, eventually losing it to foreclosure sale. I wrote to Glaski, suggesting Glaski get the mortgage examined comprehensively by a competent professional so as to find proof that the lender cheated Glaski from the beginning. I received no reply to my letter. Clearly, Glaski has drunk the Kool-Aid of useless foreclosure-defenses and securitization-audits that merely postpone the inevitable.

I present below the text from DeadlyClear including Charles Cox’s letter, and follow it with a commentary by premier litigation strategist Storm Bradford which proves the nonsense of Cox’s position.

Why Charles Cox Agrees with the Glaski Panel

http://deadlyclear.wordpress.com/2013/10/10/high-priced-attorneys-dont-necessarily-buy-truth/

The GLASKI opinion has made the Wall Street banking industry crazy. There was an outcry for publication of this case as it allowed homeowners to challenge fabricated assignments. The Court agreed to publish the opinion.
The securitization case was briefed and argued as a New York law trust case when in fact it was actually a Delaware trust. While the outcome may have likely been the same, the Court’s opinion was based upon New York Trust Law. Thereafter, the banks (that it appears failed to raise these issues during or after the hearings) wanted the opinion to be de-certified for publication.
Apparently, no one realized that the WaMu Mortgage Pass-­Through Certificates Series 2005-­AR17 Trust was a Delaware trust. Frankly, it is hard to believe that anybody even bothered to read the PSA. As a seasoned researcher, right after you verify the Closing Date, the next stop is usually Article II – Conveyances of Mortgages and then you go to Governing Law. The first full paragraph of Section 2.01. Creation of the Trust reads:

LaSalle Bank National Association is hereby appointed as the trustee of the Trust, to have all the rights, duties and obligations of the Trustee with respect to the Trust expressly set forth hereunder, and LaSalle Bank National Association hereby accepts such appointment and the trust created hereby. Christiana Bank & Trust Company is hereby appointed as the Delaware trustee of the Trust, to have all the rights, duties and obligations of theDelaware Trustee with respect to the Trust hereunder, and Christiana Bank & Trust Company hereby accepts such appointment and the trust created hereby. It is the intention of the Company, the Servicer, the Trustee and theDelaware Trusteethat the Trust constitute a statutory trust under the Statutory Trust Statute, that this Agreement constitute the governing instrument of the Trust, and that this Agreement amend and restate the Original Trust Agreement. The parties hereto acknowledge and agree that, prior to the execution and delivery hereof, the Delaware Trustee has filed the Certificate of Trust. [emphasis added]

C’mon guys – Delaware Trustee is mentioned 4 times in one paragraph. Nevertheless, the point that the Court was making was that challenge to the assignment by the homeowner should be permitted and even though New York Trust Law was used in the decision, had Delaware trust law been on the table the Court may have reached the same conclusion as Delaware trust law appears even more stringent.
What is amazing is that the banks attorneys tried to use correspondence to re-argue the case and made some disingenuous statements in order to ultimately requestdepublication of Glaski v. Bank of America, N.A. The depublication rules allow for any person to argue why an opinion should not be published.
While the banks hired their flashy high-priced attorneys to make their depublication requests, it has caused several excellent letters to be written in support of maintaining the publication that the public originally requested to be published.
Michael T. Pines’ letter can be found on Stopforeclosurefraud.com Letter to CA Supreme Court from Michael T. Pines in Response and Opposition to the Requests to Depublish Glaski v. Bank of America N.A. Opinion. ”I am writing in opposition to the request by Deutsche Bank National Trust Company’s request to depublish in the above matter. I will only address one issue – the wrongful conduct of counsel seeking depublication,” writes Pines and continues, “A problem with the securitization of loans, is that the banks and their attorneys, that were, and are, involved in securitization serve no one but their own interests. They have violated countless laws. There are of course countless government and private cases pending regarding such. There are government actions, including criminal investigations against foreclosure law firms.”
Charles Cox, a California Contract Paralegal penned another brilliant letter to the Court [Click HERE for PDF version]:

October 11, 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. 5213814;
Appellate Case No. F064556, Disposition Date 07/31/2013;
Trial Court Case No. 09CECG03601

CORRECTED RESPONSE AND OPPOSITION TO REQUEST FORDEPUBLICATION
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 providing the following corrected response.
STATEMENT OF INTEREST AND INTRODUCTION
The undersigned’s interest in this response to the depublication request, relates to clients served in the undersigned’s 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 will be affected by this currently citable appellate court Opinion with some cases having already cited Glaski as applicable authority.
The clarity the appellate court provided in its well-reasoned Opinion was qualified for
publication, certified for publication and accordingly, was rightfully published. The undersigned respectfully requests that the 
Glaski appellate court Opinion not be upset for the following additional reasons.
THE DEPUBLICATION REQUEST PROCESS IS NOT A FORUM TO RE-TRY THECASE A DEPUBLICATION REQUEST SHOULD ONLY BE UTILIZED TO CONFIRMTHAT THE APPELLATE COURT’S OPINION MET THE STANDARD FORPUBLICATION1
The depublication process should not be used as a forum to re-try the case. Supreme
Court review was an available option to the defendants but no petition was filed.
Justice Joseph R. Grodin wrote in 1984 confirming earlier explanations by the late Chief
Justice Donald R. Wright 2 and then Chief Justice Rose Elizabeth Bird,3 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.4 Such is not the case here.
The appellate court had no choice but to assume the purported “Trust” was formed under New York Trust Laws because Plaintiff claimed it was and the defendants failed to refute or object to this stated fact in the instant case. The law under which the trust was purportedly formed does not change the general concept the appellate court established, that assets are prohibited from entering a trust after the trust closing-date. This is in order to mitigate tax liability and the potential of losing the trust’s tax exempt status by utilizing the restrictive requirements required to maintain limited liability for the trust as a pass through entity.
Regardless of whether or not organized under New York Trust Laws, it was still a Real
Estate Mortgage Investment Conduit (“REMIC”) trust where I.R.S. Code § 860 et seq., and Delaware Code, Title 12, Chapters 35 and 38 et seq., 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.”5
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 appellate justices’ Opinion 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 certified for publication.
THE APPELLATE COURT’S OPINION MET THE STANDARDS
FOR CERTIFICATION AND PUBLICATION
The appellate court’s Opinion met 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.
The undersigned contends the appellate court’s well-reasoned Opinion was published on the grounds of sub-sections 2, 3, 5, 6, and 8 referenced above and more specifically related to Sections III. sub-sections A-H and Section IV. sub-section B of the appellate court’s Opinion. 6
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 REMIC trusts, which is further clarified in FN 12 of the opinion? 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 not previously held by other courts clarifying the question of whether the purported assignment was void, 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 lII.E. This section distinguishes the Gomes 8 case which seems to be universally 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 appellate court’s interpretation allowing borrowers to pursue questions regarding the chain of ownership and consolidation with the Herrera 9 case as opposed to Gomes which applies to not only Glaski but many other cases. The Opinion of the appellate court clarifies important characteristics authorized by the standards for publication per 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 whether applicable or not. The Glaski opinion correctly holds that tender is not required where the foreclosure sale is void, rather than voidable which meets the standard for publication per CRC, Rules 8.1105(c)(3), (5), (6) and (8).
GLASKI WAS CORRECTLY DECIDED
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 to challenge assignment into the trust or not. The same holds true whether or not the borrower was a party or third-party beneficiary of 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 as a REMIC as further addressed herein.
Professor Adam Levitin 10 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 afterIbanez, 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.11

CONCLUSION

The arguments proffered supporting depublication are nothing more than meritless
attempts to re-argue the 
Glaski case. The appellate court’s Opinion was well-reasoned and correctly decided. The appellate court’s opinion promotes the requirement that in order to foreclose on an owner’s property, the foreclosing entity must have obtained standing to foreclose properly, not based on a void assignment in contravention of the foreclosing entity’s controlling documents. In this case an assignment into a securitized trust after the closing-date of the trust has been properly deemed invalid and void by the appellate court.
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 has provided and will continue to provide in the future.
Sincerely,
[Charles Cox Signature]

  1. 1 See Joseph R. Grodin, The Depublication Practice o/the California Supreme Court, 72 Cal. L. Rev. 514, 514 n.1 (1984).
  2. See Julie H. Biggs, Note 8. at 1185 n.20, Decertification of Appellate Opinions: The Need for Articulated Judicial Reasoning and Certain Precedent in California Law, 50 S. Cal. L. Rev. 1181, 1200 (1977) quoting Chief Justice Wright.
  3. In Justice Bird’s address at the State Bar Convention in San Francisco, CA Sept. 10, 1978, in Report, LA. Daily J., Oct. 6, 1978, at 4, 8, speaking of depublished opinions as ones “with which the court does not agree” and as “erroneous ruling[s]“.
  4. Grodin, supra, note 7, at 514-15.
  5. Delaware Decedents’ Estates and Fiduciary Relations, Chapter 35, Trusts, Subchapter III. General Provisions § 3536.
  6. The “Section” stated herein and below, relate to the applicable Sections of the appellate court’s Opinion.
  7. This allegation comports with the following view of pooling and servicing agreements and the federal tax code provisions applicable to REMIC trusts. “Once the bundled mortgages are given to a depositor, the [pooling and servicing agreement] and IRS tax code provisions require that the mortgages be transferred to the trust within a certain time frame, usually ninety dates from the date the trust is created. After such time, the trust closes and any subsequent transfers are invalid. The reason for this is purely economic for the trust. If the mortgages are properly transferred within the ninety-day open period, and then the trust properly closes, the trust is allowed to maintain REMIC tax status.” (Deconstrueting Securitized Trusts, supra, 41 Stetson L.Rev. at pp. 757-758.)” Glaski, supra fn 12.
  8. Gomes v. Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th 1149.
  9. Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366. 
  10. See: http://www.law.georgetown.edu/faculty/levitin-adam-j.cfm.
  11. http://www.creditslips.arg/creditslips/2011/07/standing-ta-challenge-standing.html

Why the Glaski Panel Was DEAD Wrong

Even assuming, as Glaski insisted, that New York law governs interpretation of the PSA, which it did not because the PSA was under Delaware law, and further assuming that the transfer of Glaskis’ loan to the Trust violated the terms of the PSA, that after-the-deadline transactions would merely bevoidable at the election of one or more of the parties—not void as Glaski and the illiterates would have everyone believe. Consequently, Glaski, was not a party to the PSA, and did not have standing to challenge it.
This concurs with time-honored principles of contract law. A void contract is “invalid or unlawful from its inception” and therefore cannot be enforced. 17A C.J.S. Contracts § 169. Thus, a mortgagor who was not a party to an assignment between mortgagees may nevertheless challenge the enforcement of a void assignment. A voidable contract, on the other hand, “is one where one or more of the parties have the power, by the manifestation of an election to do so, to avoid the legal relations created by the contract.” Id. Therefore, only one who was a party to a voidable contract has standing to challenge it.
It is true that New York Estate Powers & Trusts Law § 7-2.4 states: “every act in contravention of the Trust is void.” New York case law, however, makes clear “that section 7-2.4 is not applied literally in New York.”Bank of Am. Nat’l Ass’n v. Bassman FBT, LLC, 366 Ill. Dec. 936981 N.E.2d 1 (Ill. App. Ct. 2012). Instead, New York courts have held that a beneficiary can ratify a trustee’s ultra vires act. See, e.g., Mooney v. Madden, 597 N.Y.S.2d 775 (N.Y. App. 1993) (holding that trustee may bind trust to an otherwise invalid act or agreement that is outside scope of trustee’s power when beneficiary or beneficiaries consent or ratify trustee’s ultra vires act or agreement); Matter of Estate of Janes, 630 N.Y.S.2d 472, 477 (Sur. 1995), aff’d as modified sub nom. Matter of Janes, 643 N.Y.S.2d 972 (N.Y. App. Div. 1996), aff’d sub nom. Matter of Estate of Janes, 90 N.Y.2d 41 (N.Y. 1997)(acknowledging that a beneficiary may ratify a trustee’s ultra vires act if “the ratification was done with knowledge of material facts”); Leasing Serv. Corp. v. Vita Italian Restaurant, 566 N.Y.S.2d 796, 797-98 (N.Y. App. Div. 1991) (“It is hornbook law that a contract entered into by . . . an unauthorized agent, corporate officer, trustee or other person purporting to act in a representative capacity . . . is voidable.”); Hine v. Huntington, 103 N.Y.S. 535, 540 (1907) (“We have before this called attention to the fact that the cestui que trust is at perfect liberty to elect to approve an unauthorized investment and enjoy its profits, or to reject it at his option.”); 106 N.Y. Jur. 2d Trusts § 431 (“[T]rustee may bind trust to an otherwise invalid act or agreement which is outside the scope of the trustee’s power when beneficiary consents to or ratifies the trustee’s ultra vires act or agreement.”);see also In re Levy, 893 N.Y.S.2d 142, 144 (N.Y. App. Div. 2010) (explaining that “[t]he essence of ratification ‘is that the beneficiary unequivocally declares that he does not regard the act in question as a breach of trust but rather elects to treat it as a lawful transaction under the trust’”) (quoting Bogert, Law of Trusts and Trustees § 942).
If an act may be ratified, it is voidable rather than void. See Hacket v. Hackett, 950 N.Y.S.2d 6082012 WL 669525, at *20 (N.Y. Sup. Ct. Feb. 21, 2012) (“A void contract cannot be ratified; it binds no one and is a nullity.
However, an agreement that is merely voidable by one party leaves both parties at liberty to ratify the transaction and insist upon its performance.”) (quoting 27 Williston on Contracts § 70:13 [4th ed.]) (internal quotation marks omitted); 17 C.J.S. Contracts § 4 (noting that “a void contract . . . is no contract whatsoever” and “cannot be validated by ratification”) (emphasis added); id. (“A contract that is merely voidable is capable of being confirmed or ratified by the party having the right to avoid it . . . .”).
These cases above make it obvious that, under New York law, a trustee’s unauthorized transactions may be ratified; such transactions, voidable—not void.
That being the case, if the trustee of the securitized trust can’t, on its own, decide to accept these late-delivered notes, then it’s clear the beneficiaries can. They can ratify or waive anything they want. Common sense dictates that they can either, accept the notes/mortgages even though they were delivered late, giving the trust power to enforce, but theoretically putting the trust’s tax-exempt REMIC status at risk; or not allowing the trustee to accept the notes/mortgages, keeping their REMIC status alive, but denying themselves the income from the notes/mortgages they bought.
Common sense would also dictate that if there are enormous numbers of late-delivered notes/mortgages, does anyone really believe that the holders of these notes/mortgages would rather lose the tax benefits by virtue of it becoming a taxable event, which is highly unlikely because the IRS has failed to take any action so far, or lose the income from the notes/mortgages. Anyone who got out of the third grade can figure this one out.

Ideal Strategy for Glaski and ALL Mortgagors

I take this position: if you borrow money to buy a house on a valid mortgage deal, pay it back timely in accordance with your agreements or give up the house. Don’t fight the foreclosure because you will lose and you might suffer Post Traumatic Brain Injury as a result. But, if the mortgage lacks validity because the lender or lender’s agents cheated you, do your best to hammer the lender into a concession that leaves you with the house and compensation. To that end, I propose the following strategy:

  1. Get a comprehensive mortgage examination by a competent professional who has knowledge of all the related areas of law AND consummate litigation skill. Then,
  2. If no causes of action (reasons to sue) exist, walk from the house as you should, with a short-sale or deed-in-lieu-of-foreclosure deal to salvage as much as you can of your credit rating.
  3. Use the discovered causes of action to force a settlement for money or cram-down (reduced balance) refinance, or sue for compensatory and punitive damages and legal fees and costs.
  4. Do not EVER accept a loan modification, for all are just scams to increase your debt, increase the likelihood of foreclosure, and deprive you of the right to sue over prior predatory lending injuries.

If you obtained a home mortgage loan in the past 10 to 15 years, you might have numerous causes of action underlying the mortgage. In that case you should demand settlement or sue, whether or not you face foreclosure. I can review your situation and introduce you to America’s premier mortgage fraud examiner if circumstances warrant it.

For full details in a FREE discussion, call Mortgage Attack at 727 669 5511 now, or fill in, save, and email the Mortgage Attack Questionnaire at http://mortgageattack.com.

Aug 30, 2013
Securitization haters have gone giddy or berserk with the news of the Glaski, Erobobo, and Saldivar opinions denouncing foreclosure on the basis of broken chain of assignment of the note. Courts have said assignment into …

 

USDC Judge denounces Glaski, tosses Mottale.

Mortgage Victims, Get a Clue:

ATTACK THE MORTGAGE, NOT THE FORECLOSURE

I have repeatedly denounced the Glaski opinion of California’s 5th District Court, explaining that Glaski wasted his money fighting a foreclosure that the courts had to allow because he did in fact breach his mortgage note.

Now USDC Judge Gonzalo Curiel of California’s Southern District has given Michael and Erica Mottale similarly shrift justice to their foreclosure defense which cited the Glaski opinion as a basis for the court to consider their reasons for halting the foreclosure.  His honor cited an array of opinions in opposition to the Glaski opinion, and explains why.

I have excerpted the below text from the opinion in Mottale v Kimball, Tirey & St. John et al
http://law.justia.com/cases/federal/district-courts/california/casdce/3:2013cv01160/414549/27

“B. Motion to Dismiss

“Defendants move to dismiss Plaintiffs’ “securitization” theory as failing to set forth a cognizable legal theory. (Dkt. No. 20-1 at 7-8) (“Plaintiff’s securitization argument is simply not the law in California and thus the related claims against KTS[J] are improper and baseless as a matter of law.”). In response, Plaintiffs cite the recent California Court of Appeal case Glaski v. Bank of America National Association, et al., 218 Cal. App. 4th 1079 (Aug. 8, 2013), to support the plausibility of Plaintiffs’ unlawful securitization theory of liability. (Dkt. No. 22 at 3.) In Glaski, the court interpreted New York trust law to find that a borrower could have standing to challenge the assignment of the borrower’s loan if the defect asserted by the borrower would void the assignment. Id. at 1095. The Court first notes that the weight of authority rejects Glaski as a minority view on the issue of a borrower’s standing to challenge an assignment as a third party to that assignment. See Rivac v. Ndex West LLC, No. C 13-1417 PJH, 2013 WL 6662762 at *4 (N.D. Cal. Dec. 17, 2013) (collecting cases); Boza v. U.S. Bank Nat. Ass’n, LA CV12-06993 JAK, 2013 WL 5943160 at *10 (C.D. Cal. Oct. 28, 2013) (same); In re Sandri, 501 B.R. 369, 374-78 (Bankr. N.D. Cal. 2013) (same).

“Additionally, even if the Court found the Glaski court’s reasoning persuasive, the Court finds that Plaintiffs fail to plead the facts to support such a theory. For example in Glaski, the court considered many factual details regarding the loan at issue in that case, including facts regarding the payments owed and the borrower’s attempts to obtain loan modifications. 218 Cal. App. 4th 1079, 1083-84 (2013). The court considered details regarding the creation of the alleged fraudulent trust and assignment of plaintiff’s loan challenged by the plaintiff in that case, including: the factual allegations that assignment was attempted after the closing date; the specifics of alleged transfers of plaintiff’s loan; and the alleged roles the defendants played in these actions. Id. at 1084-85. Furthermore, the court in Glaski considered facts regarding alleged misrepresentations made by defendants to plaintiff, including what the plaintiff was told, how the plaintiff interpreted the statements made, and who made the representations at issue. Id. at 1085-86. In summary, even if Glaski supports a finding that Plaintiffs’ legal theory is legally cognizable, Glaski cannot relieve Plaintiffs of the burden of alleging sufficient facts to state a claim under Federal Rule of Civil Procedure 12(b)(6) or, where Plaintiffs are alleging fraud, of pleading allegations of fraud with particularity, Fed. R. Civ. P. 9(b). The Court therefore turns to addressing each of the Causes of Action challenged for factual sufficiency in Defendants’ motion to dismiss.”

What lesson shall we take away from Glaski and the host of opinions in opposition to it?  Consider this:

One who takes out a mortgage loan must repay it timely according to the terms of the note or forfeit the collateral realty according to terms of the mortgage.

Any defense against forfeiture of the collateral must fail. But, the mortgagor has a glimmer of hope in attacking the lender or lender’s agents for injuring the mortgagor at the inception of the loan.  You see, a good offense can become one’s best defense.

Otherwise defenses against foreclosures of valid loans must fail.  And that includes every single securitization argument one can conjure.  Securitization has nothing to do with the obligation of the mortgagor to pay off the note according to its terms.  If you, the mortgagor, can prove that the lender or lender’s agents injured you, then you can attack them for those injuries, and a court will rule in your favor if the lender or agents don’t convince you to settle with them first.  Ruling in your favor can consist of financial set-off of the amount you owe, cram-down of the loan to a lower balance refinanced at terms favorable to you, compensatory damage, punitive damages, and legal fees and costs paid by your opponent.

Have you seriously contemplated how you might go about discovering the various ways the lender or agents injured you at the beginning of the loan?  They might have lied to you about the value of the house, or submitted false information on your loan application, or any one of DOZENS of other items of tortious conduct, contract breaches, or legal errors still within the statute of limitations.  Some tortious acts, like fraud, can justify treble (triple) damages in your favor.  That could become quite a win for you.

Look at it this way.

  1. ALWAYS LOSE when you defend against foreclosure; or…
  2. ALWAYS WIN when you attack against the lending team for torts, breaches, and errors

It’s that simple.  Defend and LOSE, or Attack and WIN.  Which do you prefer?

Here’s a stack of examples of DEFEND-and-LOSE:

http://fe.gd/Slq

Here’s a STELLAR example of ATTACK-and-WIN:

http://fe.gd/JYF

So, take your choice:  Defend and LOSE or Attack and WIN.  Got it?   Good.

Now, if you want to learn how to find the torts, errors and breaches underlying your mortgage, CALL ME at 727 669 5511 right NOW, or Email Me right NOW.  I’ll explain everything to you FREE.

Courts Deprecate Glaski – Only parties to the PSA may enforce it.

Violations of the PSA Won’t Save your House!

The July 2013 opinion by the California 5th District in Glaski v BOA caused an uproar of hope in the foreclosure pretense defense community.  Finally a California appeals panel’s judges had their heads screwed on straight.  They struck down Glaski’s foreclosure because assignment of the note to the supposed trustee who foreclosed became void under New York law because it happened after the closing date which the Pooling and Servicing Agreement (PSA) stipulated.

But now an array of California courts have tossed the Glaski opinion in the trash, favoring instead  the prior May 2013 Jenkins v JP Morgan Chase Bank contrary opinion and the more recent contrary opinions by the CSD USDC in Mottale v Kimball Tirey.

I have cited those and a number of related cases below, a treasure trove of opinions to get the point across thoroughly, and copied a related article by Locke Lord lawyers.  The point is:

If you are not a party to the PSA and you did not get injured by its parties, then you have NO STANDING to enforce or dispute it in court.

Consider this a warning to foreclosure victims:  don’t pin your hopes on Glaski – if you do, you’ll lose your house.  Period.

Okay, so HOW SHALL I SAVE MY HOUSE?

I put attacks against the PSA and securitization in the category of FAILING FORECLOSURE DEFENSE ARGUMENTS.  You can count on foreclosure pretender defender lawyers across America to try to use them, but all they end up doing is costing foreclosure victims more money and losing the house anyway.  They (and you, if you hire one of them) only waste resources to delay the inevitable foreclosure sale of the house.

I know of only one sure-fire way to WIN some form of concession or financial benefit from a mortgagee or mortgage note holder:  ATTACK them or the loan originator and/or agents for injuring you at the inception of the loan (including any attempted scam loan modification where they con you into breaching the note to qualify for mod).

In order to attack them for injuring you, you must first discover HOW they injured you.  That means you must examine your mortgage related documents comprehensively and thoroughly, having a good knowledge of related law, and take note of all the causes of action against them (reasons to sue them) that you can find.

If you don’t have that skill and your lawyer does not have that skill, and neither of you have the willingness to do that difficult and onerous job, then you must hire a competent mortgage examiner to do it for you.

I know only ONE such competent mortgage examiner in the world with the willingness and ability to examine your mortgage and find all the underlying causes of action.

If you call me at 727 669 5511, or send me your name and contact information by email I shall explain the process in detail for you, and connect you to the mortgage examiner IF YOU QUALIFY and IF you won’t just waste his time.  I shall do this free of charge, and with no further obligation to you because I like helping sincere people.

But if you are just a tire-kicker or dilettante with no intention or heart for attacking your scurrilous lender, appraiser, mortgage broker, title officer, servicer, etc, don’t bother contacting me because I won’t be able to do anything for you, and it will just waste time for both of us.

Picture thi s –  With a mortgage examination report in hand, you can negotiate a settlement with your lender, or prepare and file a lawsuit against the lender and confederates.  You could win anything from a loan balance cram down (to an affordable level, refinanced) to monetary set-offs against your debt, to your house free and clear, to compensatory damages, to punitive damages, possibly in the millions.

All you get if you beat the foreclosure (which you won’t) is the same old house needing repairs and a huge mortgage you cannot afford.  When fighting the foreclosure, you will not eliminate the debt, and if you foolishly do a loan mod, you will end up owing double to triple the value of your house and have a balloon you probably will never be able to pay, and you’ll end up in foreclosure again.  You might as well slap a ball and chain around your ankle and sell yourself into servitude as the bank’s slave.

Or, picture you and your family with the peace of mind and money to enjoy a nice hot tub experience after you win a settlement from the bank for injuring you.  If you like that picture, CALL me.  I’ll show you the path to liberation.

Bob Hurt
727 669 5511
E-mail 

REFERENCE MATERIALS

http://scholar.google.com/scholar_case?case=8443134560105369166
Mottale v Kimball Tirey & St. John, LLP
, Dist. Court, SD California 10 January 2014 – The opinion in this California Federal case showed the futility of using Glaski as the basis for arguing against securitization:

Defendants move to dismiss Plaintiffs’ “securitization” theory as failing to set forth a cognizable legal theory. (Dkt. No. 20-1 at 7-8) (“Plaintiff’s securitization argument is simply not the law in California and thus the related claims against KTS[J] are improper and baseless as a matter of law.”). In response, Plaintiffs cite the recent California Court of Appeal case Glaski v. Bank of America National Association, et al., 218 Cal. App. 4th 1079 (Aug. 8, 2013), to support the plausibility of Plaintiffs’ unlawful securitization theory of liability. (Dkt. No. 22 at 3.) In Glaski, the court interpreted New York trust law to find that a borrower could have standing to challenge the assignment of the borrower’s loan if the defect asserted by the borrower would void the assignment. Id. at 1095. The Court first notes that the weight of authority rejects Glaski as a minority view on the issue of a borrower’s standing to challenge an assignment as a third party to that assignment. See Rivac v. Ndex West LLC, No. C 13-1417 PJH, 2013 WL 6662762 at *4 (N.D. Cal. Dec. 17, 2013) (collecting cases); Boza v. U.S. Bank Nat. Ass’n, LA CV12-06993 JAK, 2013 WL 5943160 at *10 (C.D. Cal. Oct. 28, 2013) (same); In re Sandri, 501 B.R. 369, 374-78 (Bankr. N.D. Cal. 2013) (same).

Additionally, even if the Court found the Glaski court’s reasoning persuasive, the Court finds that Plaintiffs fail to plead the facts to support such a theory. For example in Glaski, the court considered many factual details regarding the loan at issue in that case, including facts regarding the payments owed and the borrower’s attempts to obtain loan modifications. 218 Cal. App. 4th 1079, 1083-84 (2013). The court considered details regarding the creation of the alleged fraudulent trust and assignment of plaintiff’s loan challenged by the plaintiff in that case, including: the factual allegations that assignment was attempted after the closing date; the specifics of alleged transfers of plaintiff’s loan; and the alleged roles the defendants played in these actions. Id. at 1084-85. Furthermore, the court in Glaski considered facts regarding alleged misrepresentations made by defendants to plaintiff, including what the plaintiff was told, how the plaintiff interpreted the statements made, and who made the representations at issue. Id. at 1085-86. In summary, even if Glaski supports a finding that Plaintiffs’ legal theory is legally cognizable, Glaski cannot relieve Plaintiffs of the burden of alleging sufficient facts to state a claim under Federal Rule of Civil Procedure 12(b)(6) or, where Plaintiffs are alleging fraud, of pleading allegations of fraud with particularity, Fed. R. Civ. P. 9(b). The Court therefore turns to addressing each of the Causes of Action challenged for factual sufficiency in Defendants’ motion to dismiss.

http://www.lexology.com/library/detail.aspx?g=6b56d02a-06f0-4d51-a384-f525c0712c56

California Court follows well-established case law in ruling – borrower cannot challenge validity of loan securitization

 

  • USA

 

  • October 10 2013

Glaski v. Bank of America, N.A., 218 Cal. App. 4th 1079 (July 31, 2013) –  “a borrower may challenge [a] securitized trust’s chain of ownership by alleging the attempts to transfer the deed of trust to the securitized trust (which was formed under New York law) occurred after the trust’s closing date.”

Diunugala is the first case coming out of a California court to expressly reject the California Court of Appeal’s reasoning inGlaski and deem Glaski unpersuasive. While not binding authority, other State and Federal Courts in California may followDiunugala as persuasive authority and similarly follow well-established case law holding that a borrower lacks standing to challenge an allegedly invalid assignment of a deed trust.

 

The Glaski opinion contradicted Jenkins v. JP Morgan Chase Bank, N.A., 216 Cal. App. 4th 497 (May 17, 2013 – borrowers lack standing to challenge the validity of an assignment to which they are neither party nor beneficiary. “As an unrelated third party to the alleged securitization, and any other subsequent transfers of the beneficial interest under the promissory note, [plaintiff] lacks standing to enforce any agreements, including the investment trust’s pooling and servicing agreement, relating to such transactions.”

Gomes v. Countrywide Home Loans, Inc., 192 Cal. App. 4th 1149, (2011) – California non-judicial foreclosure statutes do not “provide for a judicial action to determine whether the person initiating the foreclosure process is indeed authorized.”

Diunugala v. JP Morgan Chase Bank, N.A. (Case No. 12-cv-02106-WQH-NLS) (October 3, 2013) –  “[we find] the reasoning in [cases such as Jenkins and Gomes] to be more persuasive than that in Glaski.” Even if the Glaski court correctly decided the case, a plaintiff cannot assert a claim based upon an allegedly ineffective assignment of a deed of trust without alleging facts demonstrating that the deed of trust was not assigned in any manner or alleging resulting prejudice to the borrower.

Google Scholar Search Results

 

Jenkins v. JP Morgan Chase Bank, NA

Cal: Court of Appeal, 4th Appellate Dist., 3rd Div., 2013 – Google Scholar

Diane Jenkins (Jenkins) requests the reversal of the trial court’s dismissal of her lawsuit after
it sustained the two separate demurrers of (1) JPMorgan Chase Bank NA (Chase) and Bank
of America, NA (B of A) and (2) Quality Loan Service Corporation (Quality). (These entities 

Cited by 30 Related articles All 2 versions Cite Save

 

Jenkins v. JP Morgan Chase Bank

Court of Appeals, 9th Circuit, 2013 – Google Scholar

The district court properly dismissed Jenkins‘ action because, under the Purchase and Assumption
Agreement between JP Morgan Chase Bank (“Chase“) and the Federal Deposit Insurance Corporation
(“FDIC”), Chase did not assume any liability associated with borrower claims against 

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IN RE CHOUDHURI

Bankr. Court, ND California, 2013 – Google Scholar

 This argument is both unsupported and incorrect.”); Jenkins v. JP Morgan Chase Bank, NA, 216
Cal. App. 4th 497, 156 Cal.Rptr.3d 912 (Cal. App. 4th Dist. 2013) (borrower does not have the
right to bring a preemptive judicial action to determine defendants’ standing to foreclose 

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ATTILI v. E* TRADE BANK

Cal: Court of Appeal, 2nd Appellate Dist., 6th Div., 2013 – Google Scholar

 2012) 211 Cal.App.4th 505, 511 (Shuster), “California’s statutory nonjudicial foreclosure scheme
(§§ 2924-2924k) does not require that the foreclosing party have a beneficial interest in or physical
possession of the note.” (Accord, Jenkins v. JP Morgan Chase Bank, NA (2013 

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GILBERT-DAVIS v. Los Angeles County Metropolitan Transportation Authority

Cal: Court of Appeal, 2nd Appellate Dist., 7th Div., 2013 – Google Scholar

 v. JPMorgan Chase Bank, NA, supra, 214 Cal.App.4th at p. 752; accord, Landmark Screens,
LLC v. Morgan, Lewis &  the plaintiff’s] previous unsuccessful attempts to plead,'”‘ it is improbable
the plaintiff can state a cause of action.” (Jenkins v. JPMorgan Chase Bank, NA (2013 

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SABHERWAL v. BANK OF NEW YORK MELLON

Dist. Court, SD California, 2013 – Google Scholar

 Mar. 21, 2012)); see also Jenkins v. JP Morgan Chase Bank, NA, 216 Cal. App.  July 17, 2013)
(collecting cases). Plaintiffs rely upon Ansanelli v. JP Morgan Chase Bank, NA, No.  See, eg,
Bernardi v. JPMorgan Chase Bank, NA, No. 11-cv-4212, 2012 WL 2343679, at *5 (ND Cal. 

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Gomes v. Countrywide Home Loans, Inc.

192 Cal. App. 4th 1149 – Cal: Court of Appeal, 4th Appellate Dist., …, 2011 – Google Scholar

 (Weingartner v. Chase Home Finance  the California Rules of Court do not prohibit citation to
unpublished federal cases, which may properly be cited as persuasive, although not binding,
authority.” (Landmark Screens, LLC v. Morgan, Lewis &  (Landmark National Bank v. Kesler 

Cited by 227 How cited Related articles Cite Save

Allen v. United Financial Mortg. Corp.

660 F. Supp. 2d 1089 – Dist. Court, ND California, 2009 – Google Scholar

660 F.Supp.2d 1089 (2009). Euel ALLEN, Plaintiff, v. UNITED FINANCIAL MORTGAGE CORP.;
Alliance Bancorp; Mortgage Electronic Registration Systems, Inc., California Reconveyance Co.;
GMAC Mortgage; JP Morgan Chase Bank and Does 1-25, inclusive, Defendants. No. 

Cited by 78 How cited Related articles Cite Save

Siliga v. Mortgage Electronic Registration Systems, Inc.

219 Cal. App. 4th 75, 161 Cal. Rptr. 3d … – Cal: Court of Appeal, 2nd …, 2013 – Google Scholar

 the nonjudicial foreclosure process by pursuing preemptive judicial actions challenging the
authority of a foreclosing “beneficiary” or beneficiary’s “agent.” (Jenkins v. JPMorgan Chase Bank,
NA (2013) 216 Cal.App.4th 497, 511 [156 Cal.Rptr.3d 912] (Jenkins); Gomes, supra 

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Jenkins v. JPMorgan Chase Bank, NA

216 Cal. App. 4th 1541 – Cal: Court of Appeal, 4th Appellate Dist., …, 2013 – Google Scholar

216 Cal.App.4th 1541 (2013). DIANE JENKINS, Plaintiff and Appellant, v. JPMORGAN
CHASE BANK, NA, et al., Defendants and Respondents. No. G046121. Court of Appeals
of California, Fourth District, Division Three. June 12, 2013. 

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Sporn v. JPMorgan Chase Bank, NA

Cal: Court of Appeal, 4th Appellate Dist., 3rd Div., 2014 – Google Scholar

 The power of sale may be exercised by the assignee if the assignment is duly acknowledged
and recorded.” (Italics added.) This section does not apply to a deed of trust. (Jenkins v.
JPMorgan Chase Bank, NA (2013) 216 Cal.App.4th 497, 518 (Jenkins).). 

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Zapata v. WELLS FARGO BANK, NA

Dist. Court, ND California, 2013 – Google Scholar

 No. C 13-1983, 2013 WL 6140528, at 6 (ND Cal. Nov. 21, 2013) (Judge William
H. Orrick Jr.). Instead, courts in this district rely on the majority rule in Jenkins v.
JP Morgan Chase Bank, NA, 216 Cal.App.4th 497 (2013). The 

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PEDERY-EDWARDS v. JP Morgan Chase Bank, NA

Cal: Court of Appeal, 4th Appellate Dist., 1st Div., 2014 – Google Scholar

 Appellant Judith Pedery-Edwards appeals from a judgment entered in favor of defendants JP
Morgan Chase Bank, NA (Chase) and  do everything the contract presupposes the party will do
to accomplish the agreement’s purposes.” (Jenkins v. JPMorgan Chase Bank, NA (2013 

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Holmes v. HSBC BANK USA

Cal: Court of Appeal, 2nd Appellate Dist., 8th Div., 2014 – Google Scholar

 (2013) 219 Cal.App.4th 75, 82; Jenkins v. JPMorgan Chase Bank, NA (2013) 216
Cal.App.4th 497, 511-512 [same].).  Javaheri v. JP Morgan Chase Bank, NA (CDCal.
June 2, 2011, No. CV10-08185 ODW (FFMx)) 2011 USDist. 

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CHAOUI v. Bank of America, NA

Cal: Court of Appeal, 2nd Appellate Dist., 8th Div., 2013 – Google Scholar

 (Jenkins v. JPMorgan Chase Bank, NA (2013) 216 Cal.App.4th 497, 506 (Jenkins).). [2] The notice
incorrectly cites title 15 United States Code section 1692(G), which does not exist. [3] On March
11, 2011, a “Notice of Rescission of a Trustee’s Deed Upon Sale” was recorded. 

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Glaski v. Bank of America

218 Cal. App. 4th 1079, 160 Cal. Rptr. 3d … – Cal: Court of Appeal, 5th …, 2013 – Google Scholar

Before Washington Mutual Bank, FA (WaMu), was seized by federal banking regulators in
2008, it made many residential real estate loans and used those loans as collateral for
mortgage-backed securities. [1] Many of the loans went into default, which led to 

Cited by 26 Cite Save

Zapata v. WELLS FARGO BANK, NA

Dist. Court, ND California, 2013 – Google Scholar

 Dec. 21, 2012). Plaintiffs rely on Glaski v. Bank of America, NA, 218 Cal.App.4th 1079 (2013),
to argue that they can challenge the securitization process. Glaski, however, is in the clear minority
on this issue. The Glaski decision relies on New York law to reach its conclusion. 

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MOTTALE v. KIMBALL TIREY & ST. JOHN, LLP

Dist. Court, SD California, 2014 – Google Scholar

 In response, Plaintiffs cite the recent California Court of Appeal case Glaski v. Bank of America
National Association, et al., 218 Cal. App. 4th 1079 (Aug. 8, 2013), to support the plausibility
of Plaintiffs’ unlawful securitization theory of liability. (Dkt. No. 

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Sporn v. JPMorgan Chase Bank, NA

Cal: Court of Appeal, 4th Appellate Dist., 3rd Div., 2014 – Google Scholar

 (Glaski v. Bank of America (2013) 218 Cal.App.4th 1079 (Glaski); Jenkins, supra, 216
Cal.App.4th 497, 518; Gomes, supra, 192 Cal.App.4th 1149.) Plaintiff has not alleged any specific
facts supporting such a claim and these cases do not save plaintiff’s cause of action. 

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GLASKI v. BANK OF AMERICA, NATIONAL ASSOCIATION

Cal: Court of Appeal, 5th Appellate Dist., 2013 – Google Scholar

Before Washington Mutual Bank, FA (WaMu) was seized by federal banking regulators in
2008, it made many residential real estate loans and used those loans as collateral for
mortgage-backed securities. [1] Many of the loans went into default, which led to 

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Nguyen v. JP Morgan Chase Bank, NA

Dist. Court, ND California, 2014 – Google Scholar

 [13] Although Chase’s original motion argues that the Nguyens do not have standing
to raise such issues, the Nguyens’ opposition brief contends that they do based on
a single California appellate case, Glaski v. Bank of America. 

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Haddad v. Bank of America, NA

Dist. Court, SD California, 2014 – Google Scholar

 28, 30). Plaintiff contends that the First Amended Complaint adequately states claims for relief
pursuant to the holding of Glaski v. Bank of America, NA, 218 Cal. App.  Plaintiff contends that
he has standing for the reasons stated in Glaski v. Bank of America, NA, 218 Cal. App. 

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Maxwell v. DEUTSCHE BANK NATIONAL TRUST COMPANY

Dist. Court, ND California, 2013 – Google Scholar

 Expungement is warranted. The plaintiffs have provided almost no argument in opposition. They
merely cite to Glaski v. Bank of America, 218 Cal. App. 4th 1079 (Ct.  Oct. 31, 2013) (citing cases
disagreeing with Glaski). II. THE REQUEST FOR ATTORNEY’S FEES IS GRANTED. 

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DAHNKEN v. WELLS FARGO BANK, NA

Dist. Court, ND California, 2013 – Google Scholar

 valid beneficiary is unknown,” but “[w]hat is known is that the defendants to this action do not
have the authority to exercise the power of sale or to collect mortgage payments from the plaintiff.”
See Complaint at 9. To support this argument, plaintiff largely relies on Glaski v. Bank 

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IN RE SANDRI

Bankr. Court, ND California, 2013 – Google Scholar

 The court disagrees, as Glaski is inconsistent with the majority line of cases and
is based on a questionable analysis of New York trust law. 1. The Weight of Authority
is Against Glaski 2. Glaski’s Reasoning is Not Persuasive. 

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Bergman v. Bank of America, NA

Dist. Court, ND California, 2014 – Google Scholar

 As to the claim that Defendants breached the PSA, Plaintiffs newly argue that the Court
should follow Glaski v. Bank of Am., Nat’l Ass’n, 218 Cal. App.  See FAC ¶¶ 25-26. However,
as Defendants point out, Glaski represents a minority view. 

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SUBRAMANI v. WELLS FARGO BANK NA

Dist. Court, ND California, 2013 – Google Scholar

 Sept. 24, 2012). On this point, Plaintiff contends that a recent California Court of Appeals case,
Glaski v. Bank of America, NA, 218 Cal. App. 4th 1079 (Cal. Ct. App.  at 1094-95. Defendant
counters that the Court should ignore Glaski as stating the minority rule. 

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Grimm v. CAPITAL ONE, NA

Cal: Court of Appeal, 4th Appellate Dist., 1st Div., 2013 – Google Scholar

 The Grimms filed a letter bringing to our attention a recently published case, Glaski v. Bank of
America (2013) 218 Cal.App.4th 1079, which they claim “is relevant to the issue on appeal related
to [Capital One’s] improper securitization procedures and lack of assignment into the 

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Apostol v. CITIMORTGAGE, INC.

Dist. Court, ND California, 2013 – Google Scholar

 Plaintiff relies on Glaski v. Bank of Am., Nat’t Ass’n, 218 Cal. App. 4th 1079, 1097 (2013).  Id.
at 1097-98. However, Glaski represents a distinct minority view on the standing of third parties
to enforce or assert claims based on alleged violations of a PSA. 

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IN RE SCOMPARIN

Bankr. Court, ND California, 2014 – Google Scholar

 In support of his position, Plaintiff cites Thomas A. Glaski v. Bank of America, 2013 WL 4037310
(Cal. Ct. App. July 31, 2013).  As determined in In re Sandri, 501 BR 369 (Bankr. ND Cal. 2013),
the clear weight of authority is against Glaski and its reasoning is unpersuasive. 

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US Bank National Association v. FRIEDRICHS

Dist. Court, SD California, 2013 – Google Scholar

 She contends that the proposed amendment is not made in bad faith and not futile as the law
in California has changed under Glaski v. Bank of America, Nat’l Assoc., 218 Cal. App. 4th 1079
(2013).  Oct. 5, 2012). Here, both parties argue, in detail, the merits of the Glaski case. 

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Engler v. RECONTRUST COMPANY

Dist. Court, CD California, 2013 – Google Scholar

 May 30, 2012) (Chen, J.) (granting preliminary injunction preventing foreclosure sale because
the plaintiff was likely to prevail on claim that foreclosure was improper due to fraudulent
substitution of trustee); Glaski v. Bank of Am., Nat’l Ass’n, 218 Cal. App.  See Glaski, 218 Cal. 

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RIVAC v. NDEX WEST LLC

Dist. Court, ND California, 2013 – Google Scholar

 for securitization” as they argue in the opposition. Plaintiffs rely on Glaski v. Bank of
America, 218 Cal. App.  IT IS SO ORDERED. [1] The court also notes that even in California
courts, the holding in Glaski has not been adopted universally. 

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Holmes v. HSBC BANK USA

Cal: Court of Appeal, 2nd Appellate Dist., 8th Div., 2014 – Google Scholar

 2012) 885 F.Supp.2d 964, 973-974; Glaski v. Bank of America (2013) 218 Cal.App.4th 1079,
1097; Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366, 1378-1379;
Sacchi v. Mortgage Elec. Registration Sys. (CDCal. June 24, 2011, No. 

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PEDERY-EDWARDS v. JP Morgan Chase Bank, NA

Cal: Court of Appeal, 4th Appellate Dist., 1st Div., 2014 – Google Scholar

 that a foreclosure was wrongful because it was initiated by a nonholder of the deed of trust has
also been phrased as (1) the foreclosing party lacking standing to foreclose or (2) the chain of
title relied upon by the foreclosing party containing breaks or defects.” (Glaski v. Bank of 

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SEPEHRY-FARD v. DEPARTMENT STORES NATIONAL BANK

Dist. Court, ND California, 2013 – Google Scholar

 39-3 at 4-5). [6] In making his argument that securitization of the credit debt somehow prevents
the Financial Entities from collecting on his debt, plaintiff relies extensively on Glaski v. Bank
of America, 218 Cal.App.4th 1079 (Cal.App. 2013). That reliance is wholly misplaced. 

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YOUKHNA v. AMERICA’S WHOLESALE LENDER

Cal: Court of Appeal, 2nd Appellate Dist., 4th Div., 2013 – Google Scholar

 The notes may thereafter be transferred among members without requiring recordation in the
public records.”. [5] As explained in Glaski v. Bank of America (2013) 218 Cal.App.4th 1079, 1082,
“In simplified terms, `securitization’ is the process where (1) many loans are bundled 

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Siliga v. Mortgage Electronic Registration Systems, Inc.

219 Cal. App. 4th 75, 161 Cal. Rptr. 3d … – Cal: Court of Appeal, 2nd …, 2013 – Google Scholar

219 Cal.App.4th 75 (2013). 161 Cal. Rptr. 3d 500. JOHNNY SILIGA et al., Plaintiffs and Appellants,
v. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., et al., Defendants and
Respondents. No. B240531. Court of Appeals of California, Second District, Division Three. 

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Wolford v. AMERICAN HOME MORTGAGE SERVICING, INC.

Cal: Court of Appeal, 2nd Appellate Dist., 2nd Div., 2013 – Google Scholar

 Thus, the homeowner-plaintiff does not suffer an injury as a result of the assignment of deed of
trust, even if the assignment was fraudulent”]; but cf. Glaski v. Bank of America (2013) 218
Cal.App.4th 1079, 1097, fn. 16 [finding forgery a question of fact under New York law].). 

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DIUNUGALA v. JPMorgan Chase Bank, NA

Dist. Court, SD California, 2014 – Google Scholar

On January 6, 2014, Plaintiff filed the Ex Parte Application for a Temporary Restraining
Order. (ECF No. 39). Plaintiff “seeks a TRO to preliminary enjoin Defendants . . . and any other
persons or entities acting on their behalf, including the San Diego County Sheriff, from 

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DIUNUGALA v. JP Morgan Chase Bank, NA

Dist. Court, SD California, 2013 – Google Scholar

After review of the filings of the parties, the Court finds that there has been an insufficient showing
of prejudice to Defendants or undue delay in bringing the proposed class allegations to overcome
the “presumption under Rule 15(a) in favor of granting leave to amend.” Id. To the extent 

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SUBRAMANI v. WELLS FARGO BANK NA

Dist. Court, ND California, 2013 – Google Scholar

 See Newman v. Bank of NY Mellon, No. 1:12-CV-1629 AWI GSA, 2013 WL 5603316, at *3 n.2
(ED Cal. Oct. 11, 2013) (“Glaski is in a clear minority” on this issue); Diunugala v. JP Morgan
Chase Bank, NA, No. 12-cv-2106-WQH-NLS, 2013 WL 5568737, at *8 (SD Cal. Oct. 

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Lueras v. BAC Home Loans Servicing, LP

221 Cal. App. 4th 49, 163 Cal. Rptr. 3d … – Cal: Court of Appeal, 4th …, 2013 – Google Scholar

 For this reason, `[n]umerous cases have characterized a loan modification as a
traditional money lending activity.'” (See Diunugala v. JP Morgan Chase Bank, NA
(SDCal., Oct. 3, 2013, No. 12cv2106-WQH-NLS) 2013 USDist. 

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More Failing Securitization Arguments by Foreclosure Victims

  • Rodenhurst v. Bank of Am., 773 F. Supp. 2d 886, 899 (D. Haw. 2011) (“The overwhelming authority does not support a [claim] based upon improper securitization.”) “[S]ince the securitization merely creates a separate contract, distinct from plaintiffs’ debt obligations under the Note and does not change the relationship of the parties in any way, plaintiffs’ claims arising out of securitization fail.”
  • Lamb V. Mers, Inc., 2011 WL 5827813, *6 (W.D. Wash. 2011) (citing cases);
  • Bhatti, 2011 WL 6300229, *5 (citing cases);
  • In re Veal, 450 B.R. at 912 (“[Plaintiffs] should not care who actually owns the Note-and it is thus irrelevant whether the Note has been fractionalized or securitized-so long as they do know who they should pay.”);
  • Horvath v. Bank of NY, N.A., 641 F.3d 617, 626 n.4 (4th Cir. 2011) (securitization irrelevant to debt);
  • Commonwealth Prop. Advocates, LLC v. MERS, 263 P.3d 397, 401-02 (Utah Ct. App. 2011) (securitization has no effect on debt);
  • Henkels v. J.P. Morgan Chase, 2011 WL 2357874, at *7 (D.Ariz. June 14, 2011) (denying the plaintiff’s claim for unauthorized securitization of his loan because he “cited no authority for the assertion that securitization has had any impact on [his] obligations under the loan, and district courts in Arizona have rejected similar arguments”);
  • Johnson v. Homecomings Financial, 2011 WL 4373975, at *7 (S.D.Cal. Sep.20, 2011) (refusing to recognize the “discredited theory” that a deed of trust ” ‘split’ from the note through securitization, render[s] the note unenforceable”);
  • Frame v. Cal-W. Reconveyance Corp., 2011 WL 3876012, *10 (D. Ariz. 2011) (granting motion to dismiss: “Plaintiff’s allegations of promissory note destruction and securitization are speculative and unsupported. Plaintiff has cited no authority for his assertions that securitization has any impact on his obligations under the loan”).”The Court also rejects Plaintiffs’ contention that securitization in general somehow gives rise to a cause of action – Plaintiffs point to no law or provision in the mortgage preventing this practice, and cite to no law indicating that securitization can be the basis of a cause of action. Indeed, courts have uniformly rejected the argument that securitization of a mortgage loan provides the mortgagor a cause of action.” See
  • Joyner V. Bank Of Am. Home Loans, No. 2:09-CV-2406-RCJ-RJJ, 2010 WL 2953969, at *2 (D. Nev. July 26, 2010) (rejecting breach of contract claim based on securitization of loan);
  • Haskins V. Moynihan, No. CV-10-1000-PHX-GMS, 2010 WL 2691562, at *2 (D. Ariz. July 6, 2010) (rejecting claims based on securitization because plaintiffs could point to no law indicating that securitization of a mortgage is unlawful, and “[p]laintiffs fail to set forth facts suggesting that Defendants ever indicated that they would not bundle or sell the note in conjunction with the sale of mortgage-backed securities”);
  • Lariviere V. Bank Of N.Y. As Tr., Civ. No. 9-515-P-S, 2010 WL 2399583, at *4 (D. Me. May 7, 2010) (“Many people in this country are dissatisfied and upset by [the securitization] process, but it does not mean that the [plaintiffs] have stated legally cognizable claims against these defendants in their amended complaint.”);
  • Upperman V. Deutsche Bank Nat’l Trust Co., No. 01:10-cv-149, 2010 WL 1610414, at *3 (E.D. Va. Apr. 16, 2010) (rejecting claims because they are based on an “erroneous legal theory that the securitization of a mortgage loan renders a note and corresponding security interest unenforceable and unsecured”);
  • Silvas V. Gmac Mortg., Llc, No. CV-09-265-PHX-GMS, 2009 WL 4573234, at *5 (D. Ariz. Dec. 1, 2009) (rejecting a claim that a lending institution breached a loan agreement by securitizing and cross-collateralizing a borrower’s loan). The overwhelming authority does not support a cause of action based upon improper securitization. Accordingly, the Court concludes that Plaintiffs cannot maintain a claim that “improper restrictions resulting from securitization leaves the note and mortgage unenforceable);
  • Summers V. Pennymac Corp. (N.D.Tex. 11-28-2012) (any securitization of Plaintiffs’ Note did not affect their obligations under the Note or PennyMac’s authority as mortgagee to enforce the Note and foreclose on the property if Plaintiffs defaulted).;
  • Nguyen V. Jp Morgan Chase Bank (N.D.Cal. 10-17-2012) (“Numerous courts have recognized that a defendant bank does not lose its ability to enforce the terms of its deed of trust simply because the loan is assigned to a trust pool. In fact, ‘securitization merely creates a separate contract, distinct from [p]laintiffs[‘] debt obligations under the note, and does not change the relationship of the parties in any way. Therefore, such an argument would fail as a matter of law”);
  • Flores v. Deutsche Bank Nat’l Trust Co., 2010 WL 2719848, at *4 (D. Md. July 7, 2010), the borrower argued that his lender “already recovered for [the borrower’s] default on her mortgage payments, because various ‘credit enhancement policies,'” such as “a credit default swap or default insurance,” “compensated the injured parties in full.” The court rejected the argument, explaining that the fact that a “mortgage may have been combined with many others into a securitized pool on which a credit default swap, or some other insuring-financial product, was purchased, does not absolve [the borrower] of responsibility for the Note.” Id. at *5; see also
  • Fourness v. Mortg. Elec. Registration Sys., 2010 WL 5071049, at *2 (D. Nev. Dec. 6, 2010) (dismissing claim that borrowers’ obligations were discharged where “the investors of the mortgage backed securities were paid as a result of . . . credit default swaps and/or federal bailout funds);
  • Warren v. Sierra Pac. Mortg. Servs., 2010 WL 4716760, at *3 (D. Ariz. Nov. 15, 2010) (“Plaintiffs’ claims regarding the impact of any possible credit default swap on their obligations under the loan . . . do not provide a basis for a claim for relief”).
  • Welk v. GMAC Mortg., LLC., 850 F. Supp. 2d 976 (D. Minn., 2012) (“At the end of the day, then, most of what Butler offers is smoke and mirrors. Butler’s fundamental claim that his clients’ mortgages are invalid and that the mortgagees cannot foreclose because they do not hold the notes is utterly frivolous.);
  • Vanderhoof v. Deutsche Bank Nat’l Trust (E.D. Mich., 2013)(internal citations omitted) (“s]ecuritization” does not impact the foreclosure. This Court has previously rejected an attempt to assert a claim based upon the securitization of a mortgage loan. Further, MERS acts as nominee for both the originating lender and its successors and assigns. Therefore, the mortgage and note are not split when the note is sold.”);
  • Chan Tang v. Bank of America, N.A. (C.D. Cal., 2012) (internal citations omitted)(“Plaintiffs’ contention that the securitization of their mortgage somehow affects Defendants’ rights to foreclose is likewise meritless. Plaintiffs have identified no authority supporting their position that securitization voids the power of sale contained in a deed of trust. Other courts have dismissed similar arguments. Thus, the claim that Defendants lack the authority to foreclose because the Tangs’ mortgage was pooled into a security instrument is Dismissed With Prejudice.);
  • Wells v. BAC Home Loans Servicing, L.P., 2011 WL 2163987, *2 (W.D. Tex. Apr. 26, 2011) (This claim—colloquially called the “show-me-the-note” theory— began circulating in courts across the country in 2009. Advocates of this theory believe that only the holder of the original wet-ink signature note has the lawful power to initiate a non-judicial foreclosure. The courts, however, have roundly rejected this theory and dismissed the claims, because foreclosure statutes simply do not require possession or production of the original note. The “show me the note” theory fares no better under Texas law.);
  • Maynard v. Wells Fargo Bank, N.A. (S.D. Cal., 2013) (“Plaintiffs also allege that they conducted a Securitization Audit of Plaintiffs’ chain of title and Wachovia’s PSA, and as a result, determined that Plaintiffs’ Note and DOT were not properly conveyed into the Wells Fargo Trust on or before July 29, 2004, the closing date listed in the Trust Agreement. (Id. at ¶ 34.)… To the extent Plaintiffs challenge the validity of the securitization of the Loan because Wells Fargo and U.S. Bank failed to comply with the terms of the PSA or the Trust Agreement, Plaintiffs are not investors of the Loan, nor are Plaintiffs parties to the PSA or Trust Agreement. Therefore, as many courts have already held, Plaintiffs lack standing to challenge the validity of the securitization of the Loan…Furthermore, although Plaintiffs contend they have standing to challenge the validity of the Assignment because they were parties to the DOT with the original lender (Wells Fargo), this argument also fails. (Doc. No. 49 at 11-12.);
  • Jenkins v. JP Morgan Chase Bank, N.A., 216 Cal. App. 4th 497, 511-13, 156 Cal. Rptr. 3d 912 (Cal. Ct. App. 2013) (“[E]ven if any subsequent transfers of the promissory note were invalid, [the borrower] is not the victim of such invalid transfers because her obligations under the note remained unchanged.”). As stated above, these exact arguments have been dismissed by countless other courts in this circuit. Accordingly, Plaintiffs’ contentions that the Assignment is void due to a failure in the securitization process fails.”);
  • Demilio v. Citizens Home Loans, Inc. (M.D. Ga., 2013) (“Frankly, the Court is astonished by Plaintiff’s audacity… Plaintiff requires the Court to scour a poorly-copied, 45-page “Certified Forensic Loan Audit” in an attempt to discern the basic facts of his case. This alone would be sufficient for dismissal. However, the Court is equally concerned by Plaintiff’s attempt to incorporate such an “audit,” which is more than likely the product of “charlatans who prey upon people in economically dire situation,”… As one bankruptcy judge bluntly explained, “[the Court] is quite confident there is no such thing as a ‘Certified Forensic Loan Audit’ or a ‘certified forensic auditor…. The Court will not, in good conscience, consider any facts recited by such a questionable authority.”)
Mort Gezzam photo
Mort Gezzam

How to Win $16 Million in the Loan Mod Lottery

You Can Win Colossal Damage Awards in a Jury Trial by Proving the Lender Injured you at the Inception of the Loan

The Linza v PHH case shows the good photo of $16000000
sense of MORTGAGE ATTACK (http://mortgageattack.com) as a methodology for dealing with foreclosure.  It shows how to win $16 million if the mortgagee cheats you in the loan modification process.

In a nutshell, mortgage company PHH agreed to a loan modification to reduce Phillip Linza’s payments about $500, then jacked the payments higher than before, then demanded over $7000, and then refused to accept payments, and THEN foreclosed. Linza hired a lawyer, sued, and after 3-years of legal combat the jury awarded $16 million to Linza because of egregious lender behavior including credit rating damage.

If a lender/servicer has jilted YOU in a loan mod,  you might see something familiar in this scenario.  If so, you should do what Linza did:  SUE.

This does not exactly constitute a Loan Mod Lottery, but it might as well because so few mortgagors sue the lender for cheating them in the loan mod.  You can easily see why.  In a lottery you pay a dollar for a ticket and have a slim chance of winning.  In a loan mod lawsuit, you must find an attorney willing to take the case on contingency, or have enough money to pay for a 3-year litigation, but you have a HUGE chance of winning IF your lawyer has sufficient skill and perseverance.

I see a major problems with Loan Modifications.  To begin with the interest rate goes sky high in 5 years and you have a balloon you can never pay off.  Most loan mod agreements require the borrower to agree to an indemnity clause which waives the right to sue for prior injuries in the loan.  I see THAT as INSANE because lenders and their agents have injured 90% of all single family home mortgagors in the past 12 to 15 years.

If you need help unraveling the weirdness of your mortgage and loan mod, and finding the causes of action underlying either, visit http://mortgageattack.com to learn the basics, and then call me for a discussion.  I don’t practice law or give legal advice, but you might appreciate my business perspectives.

Yuba jury awards homeowner $16 million in mortgage case

Published: Friday, Jul. 18, 2014 – 2:43 pm

It started out as a simple loan modification for a troubled homeowner. It turned into a $16.2 million jury verdict against a nationwide loan-servicing company.

A Yuba Superior Court jury this week awarded $16.2 million in damages to a homeowner who nearly lost his home to foreclosure after the loan servicer botched his mortgage modification, the homeowner’s lawyers said Friday.

Phillip Linza, a homeowner in Plumas Lake, was awarded the damages after a three-year battle against PHH Mortgage Services, a loan servicer based in Mount Laurel, N.J.

Linza’s attorneys, Andre Chernay and Jon Oldenburg of the United Law Center in Roseville, said the award included $514,000 in compensatory damages and $15.7 million in punitive damages.


Securitization and Show-Me-The-Loan MALARKEY Destroys Mortgagor Case

By Bob Hurt, 13 July 2014, Distribute Freely

With respect to the message from Lee, way below, John Stuart is full of baloney and so is N.W. Raja the so-called mortgage forensic auditor.  Please forward this reply to your mailing list.  I write to set the below issue straight for the readers misled by the Stuart (show-me-the-loan) and Raja (securitization audit) BULLSHOUTS.  This has to do with the 2011 Virginia Eastern USDC case of Jeffrey Brown v HSBC, for which Raja prepared a long-winded forensic exam (securitization audit).

  1. The so-called forensic audit report is full of meaningless history and conjecture and legal conclusions and contains not a single salient, demonstrable fact in support of the conclusions.  Therefore it is worthless, and Jeffrey Brown wasted his money on  it.
  2. In the memorandum opinion
    1. The court dismissed the counts 1 and 2 for fraud because the complaint did not contain the proper elements for that cause of action.
    2. The court dismissed count 3 and chided the plaintiff for his “show me the note” nonsense because Virginia’s non-judicial foreclosure procedure does not require a show of the note.
    3. The court denounced the securitization argument on the basis that nothing related to it made the note unenforceable, and because it had nothing to do with the plaintiff’s failure to make payments.  And the court cited two cases in support of that view.
    4. The court dismissed the RICO claim Count 4 for failure to state a claim of fraud, or that any RICO violation injured the plaintiff.
    5. The Court dismissed count 5 (TILA rescission, RESPA, FDCPA) for failing to show the will and allege the ability to repay the lender the amount of the loan, and RESPA statute of limitations had tolled, the plaintiff’s conclusory allegations about FDCPA violations lacked factual support, etc.
    6. The court dismissed count 6 (slander of title) for failure to state a claim, and denounced the diatribe against mortgage backed securities and the mortgage industry (neither are illegal).
    7. The court dismissed count 7 (unjust enrichment) as just more whining about the mortgage industry, and because it provided no legal basis for relief.
    8. The court dismissed count 8 (civil conspiracy) for failure to state a colorable claim
    9. The court dismissed count 9 (breach of fiduciary duty), a bogus legal conclusion, for failure to state a claim.
    10. For all of the above reasons, the court denied the request for declaratory judgment AND dismissed the whole case, counts 1-3 and 6 with prejudice, and warned plaintiff not to file any more frivolous complaints or suffer sanctions under Rule 11.
  3. Here are the relevant case documents:

Bottom line, Brown got his bottom torn up in federal court because of

  1. The incompetence of his legal adviser (John Stuart, I presume?),
  2. Reliance on a worthless securitization audit (a roll of T.P. would have more value) to save the day, and
  3. A TERRIBLE litigation strategy.

The mortgagor never became a party to assignment or securitization of the note, and has no standing to dispute or enforce either one in court, in spite of 2 or 3 anomalous court opinions to the contrary.

REMEMBER, all who read this, ONLY ONE METHODOLOGY stands a chance of beating the bank in a foreclosure mess –  MORTGAGE ATTACK:

  1. Get a comprehensive mortgage examination by a competent professional, and
  2. Use the resulting evidence to negotiate a settlement or
  3. Sue for the torts, breaches, and legal errors underlying the mortgage itself.

You cannot successfully defend against foreclosure of a valid mortgage which the mortgagor BREACHED.  Your best and only viable defense lies in MORTGAGE ATTACK with proof in hand that the mortgage lacks validity.  Here’s the best example of such an attack that I know of:

For full details on the principles of Mortgage Attack, see http://mortgageattack.com.  NO, I don’t sell anything. I’m just a mortgage attack evangelist.

Bob Hurt            Blog 1 2 3   f  t
2460 Persian Drive #70
Clearwater, FL 33763
Email Call: (727) 669-5511
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Learn to Litigate with Jurisdictionary

 

 

On 2014-07-08 02:57, paralegals wrote:

 

——————–

 

From: Lee

Date: June 17, 2014 21:44:55 PM PDT

Subject: Fw: INFO on HOW MORTGAGES are created !!

 

 

Thought you all would be interested in this info, if you don’t

already have it….

 

I have a link from John Stuart, which then provides two HYPER links,

so I will give you those here….

<http://www.myprivateaudio.com/John-Stuart-SMTL-Clarification-and-Forensic-Exam.html>

 

Here is the TEXT from the above link and below that will be the

two LINKS with a total of 32 pages.  Share with others you know

that have a MORTGAGE.  At least you will have the facts of what

they do when the BANKS create a FAKE LOAN from THIN AIR>>>>

 

Show me the loan!

 

A legal doctrine developed by: John Chester; of the family Stuart

 

Show Me the Loan Clarification and Example of a Forensic Exam From

John Stuart

 

Attached is some of the best shit I have EVER forwarded, I mean

that. You need to read them both.

 

We all know I created the saying “Show me the Loan” because every

one else was saying “show me the Note” I don’t believe anyone. I

know almost everyone else has been brainwashed by the government

and the banks.

 

But holy shit. Some one has used my phrase Show me the loan

and written a short paper explaining exactly why I say it. Its

excellent. I get plagarized a lot, usually it pisses me off. This

time I don’t care. I just want the truth out there. That short

document shows the truth, I think better than I have shown it. This

document kicked my ass as far as teaching goes. I don’t mind getting

my ass kicked if it helps save some of you. Shit, my life is a

daily ass kicking any way.

 

I have also attached by link below a 27 page forensic exam and 5

page HOW LOAN ARE CREATED.

 

You MUST read both of these until you understand them. When you

understand these you will get it.

John C. Stuart http://www.showmetheloan.net/ — Not sure if this

link is still good…. These are the other two links that are tied to

the above article http://www.myprivateaudio.com/show_me_the_loan2.pdf

— 5 pages <http://www.myprivateaudio.com/68-1_Forensic_Exam.pdf>

–27 pages

 

 

 

Brown v Quicken Loans Shows How to Punish Abusive Mortgagees

Here’s Proof that A Talented Attorney Can Beat the Stuffing out of a Crooked Mortgage Lender

Okay to distribute this freely.

THE BEAUTY OF BROWN V QUICKEN LOANS

The outcome of the Brown v Quicken Loans case gives hope to all mortgage victims and should embarrass all Foreclosure Pretense Defense Attorneys.  This compilation  shows the public and the legal community HOW TO BEAT THE ABUSIVE MORTGAGE LENDER and obtain a nearly $5 million judgment.  I challenge every Mortgagor to READ the above-linked document COMPLETELY.

https://archive.org/details/BrownVQuickenLoansOverviewAndCaseFiles

Hats off to Jim Bordas and Jason Causey of Bordas & Bordas Law firm, Wheeling WV, for engineering the defeat of Quicken Loans and using the LAW to bludgeon them into submission.  I expect the final opinion in Quicken’s second appeal from the WV Supreme Court soon.

THE KEY TO WINNING – ATTACK THE MORTGAGE, NOT THE FORECLOSURE.

How did the Bordas team win?  They examined the mortgage and discovered a horror story of criminal and civil abuses by lender Quicken Loans.  Quicken made the loan so toxic they couldn’t sell or securitize it.

Quicken refused to offer Brown a reasonable settlement, so Bordas sued, and won a whopping $2+ million judgment.  Quicken appealed, the Supreme Court of WV remanded, the trial court upped the judgment to nearly $5 million.  Quicken appealed again, and the Supreme Court of WV will soon end the case with a final opinion against Quicken.

What lesson shall we learn from this?  Just this… If you face foreclosure, you need a comprehensive mortgage examination to prove the causes of action against the lender, and you need a lawyer willing and able to attack the mortgage, not merely defend against the foreclosure.

If your lawyer won’t seek and find the causes of action underlying your mortgage and then attack the lender on that basis, you need to FIRE that attorney.  Don’t rest until you have found a competent litigator like Jim Bordas.

LEGAL MALPRACTICE LAWSUIT OPPORTUNITIES FOR FORECLOSURE VICTIMS

If you have already lost your home to foreclosure AND you had a lawyer helping you who FAILED to seek causes of action or to attack on that basis, you may have a valid legal malpractice claim against that attorney. Call me at 727 669 5511 to discuss your issues.

STEP-BY-STEP PLAN FOR COMING OUT AHEAD

In order to save your home from foreclosure, or become able to negotiate a cram-down of the loan balance (and other favorable terms), or to sue the lender for injuring you, you must do one thing first:

  1. HIRE A COMPETENT MORTGAGE EXAMINER OR ATTORNEY to examine your mortgage and find all the causes of action.

Of course, a good mortgage examiner will charge you a fraction of what the lawyer will charge, IF you can find an examiner or lawyer with the requisite competence.  Which worries me.  Which is why I have gone to the trouble of writing this message.

Read http://MortgageAttack.com then call 727 669 5511 for more info.  I know the only competent professional mortgage examiner in America.

What?  You want to know steps 2 and 3?  Okay, I’ll give you the other steps…

  1. If the examination report reveals causes of action (torts, breaches, legal errors) against the lender or lender’s agents (title company,  mortgage broker, appraiser, servicer)…
    1. Notify the servicer and then attempt to negotiate a settlement.  I suggest finding a “CLOSER” type of lawyer to negotiate for you.  I suggest a “loan mod” type of settlement where the lender lowers the balance to the present market value, gives a favorable fixed interest rate, sets the term for 30 years, no prepayment penalty, assumable, no balloon, forgive arrears and legal fees/costs.  If this fails…
    2. Sue via complaint, counter complaint, cross complaint as necessary.  I suggest hiring a COMPETENT lawyer (not a foreclosure pretender defender) for this purpose.  If possible, find one to take your case on contingency.  The lawyer will use the causes of action from the mortgage examination report to formulate the pleading.
    3. Go to next step if you have no money or no causes of action.
  2. DO NOT let your home go to foreclosure final judgment.  If you do, it will haunt your credit record for 10 years AND (depending on your state) leave you owing a huge deficiency judgment when the auction does not bring enough money to discharge your debt.  Instead, try to work with the lender to do one of these:
    1. Short-Sale:  Bank agrees that you may sell the house at a discounted price in order to end the foreclosure, and hand over all the proceeds from the sale to the bank.  This imposes some work and stress on you, but if you have equity in the house (it has higher resale value than you owe on the mortgage note), this should be your first choice
    2. Keys-for-Cash:  Bank pays you cash ($2,000 to $20,000, depending on the value of the home) to move out, leave the home broom clean, and deed the property to the bank.   This can save a huge litigation cost for the bank, and make leaving the property less stressful for you.  Sometimes a mortgage examination can reveal weak causes of action that can pressure the bank to give you a Keys-for-Cash deal.
    3. Deed-in-Lieu-of-Foreclosure:  Same as Keys-for-Cash, except the bank gives you no cash.

TAKE THE RIGHT ACTION – CONTACT ME NOW

Okay, I have given you the proof that you can beat your abusive lender, and I have shown you the strategic plan for doing so.  If you simply refuse to do what I have outlined above, then you really deserve to lose your home to foreclosure, or to make underwater loan payments.  But if you feel READY TO ACT SENSIBLY, contact me immediately for help.

And if you don’t need help, SOMEBODY you know DOES.  Pass on this message and encourage your friends, associates, family members, loved ones to call me or write me for help.  And send them to http://MortgageAttack.com for an education on the issues.

No, I have no authorization to practice law or give legal advice, so I refrain from both.  But I’ll discuss the academic and strategic business aspects of your situation as necessary.

Yes, if you fit into the category of “Foreclosure Pretender Defender,”  you can contact me too, and I’ll help you the best I can.  Believe it or not, training for kool-aid drinkers like you has become available.  Sorry, no CLE credits.

AND… I don’t charge money for giving business guidance.  So, what do you have to lose?  Give me a call.  727 669 5511

Mort Gezzam photo
Mort Gezzam

Mortgage-Related Laws, Regs, Rules, Cases

Whether or not a person can afford an attorney, it makes good sense to know the law, rules, regulations related to the case, and to know how and where to find case law.  OBVIOUSLY, you should go to a law library or consult an attorney if you can find a competent one willing to fight for you and with some kind of proven track record.

It also makes sense to have a subscription to prepaid legal service like Legal Shield so you can talk to a lawyer inexpensively about your rights and options.

Unfortunately I have learned better than to trust an attorney to develop a sound strategy or to manage a case efficiently  or to advocate my cause aggressively.  In the end YOU are responsible for winning or losing your case, and YOU suffer (the lawyer doesn’t) if you lose your case.   So, you need to keep your “thumb on the pulse” of the case at all times, to keep the lawyer “honest” so to speak, particularly if you have had the sad misfortune of hiring a foreclosure pretender defender (don’t make me name names).

In order to remain aware and capable, you need to learn the law and become disposed to using it.  And you should learn about litigation practice   – rules of procedure and evidence.  I have collected some links to federal and Florida laws, and legal research sites.  Enjoy.

Federal mortgage related Law/Regulations

ConsumerFinancialProtectionBureau Chapter X

  • Equity skimming on HUD property or VA loan property a Federal Crime – 12 USC 1709-2
12 USC 1709-2
Whoever, with intent to defraud, willfully engages in a pattern or practice of—
(1) purchasing one- to four-family dwellings (including condominiums and cooperatives) which are subject to a loan in default at time of purchase or in default within one year subsequent to the purchase and the loan is secured by a mortgage or deed of trust insured or held by the Secretary of Housing and Urban Development or guaranteed by the Department of Veterans Affairs, or the loan is made by the Department of Veterans Affairs,
(2) failing to make payments under the mortgage or deed of trust as the payments become due, regardless of whether the purchaser is obligated on the loan, and
(3) applying or authorizing the application of rents from such dwellings for his own use,
shall be fined not more than $250,000 or imprisoned not more than 5 years, or both. This section shall apply to a purchaser of such a dwelling, or a beneficial owner under any business organization or trust purchasing such dwelling, or to an officer, director, or agent of any such purchaser. Nothing in this section shall apply to the purchaser of only one such dwelling.

Florida Mortgage Related Civil Litigation

Florida Evidence code Chapter 90
Witnesses, Records, Documents Code Chapter 92
Civil Practice
Rules of Civil procedure and Judicial Admin – http://floridabar.org
Go to Florida Judicial Circuit web site to find local court rules and administrative orders
Florida Code of judicial conduct
Oath of Admission to the Florida Bar
Rules regulating Florida Bar

Florida Consumer Collection Practices Act
Article III Chapter 673 and IX Chapter 679 UCC
marketable titles Chapter 712
Foreclosure Chapter 702
Florida Equity Skimming Chapter 697,

Books:

Trawick’s Florida Practice and Procedure
Florida Causes of Action
Florida Evidence Code with Objections
https://pushlegal.com/ online/phone law, rules, etc $1 per book per month rent.

Cheap legal research

http://www.stetson.edu/law/library/ –  Sometimes one can call with a question and get it answered

LII / Legal Information Institute

http://www.law.cornell.edu/wex legal dictionary/encyclopedia
http://law.lexisnexis.com/infopro/zimmermans/  Zimmerman research guide

http://constitution.org – founding documents, scholarly articles, searchable Statutes at Large
Google Scholar
http://Archive.org
Federal Digital System (laws etc)
Florida Appellate court web sites
  Florida appellate Opinions

http://www.findlaw.com/casecode/
http://www.justia.com/
http://www.plol.org/Pages/Search.aspx
http://www.lawguru.com/ilawlib/
http://thelawengine.com/
ABA Free Full-text Online Law Review/Law Journal Search Engine
Law Journals: Submissions and Rankings
http://www.fastcase.com/
http://www.versuslaw.com/
http://estore.loislaw.com/
http://www.lexisweb.com/ – Expensive
http://westlaw.com – Expensive
http://www.lexisone.com/freecaselaw/formulatingsearches.html
http://www.law.gmu.edu/library/research
http://www.law.duke.edu/lib/researchguides/intresearch
Federal case dockets and documents:  http://pacer.gov (you’ll need a credit card)

 

Developing a Mortgage Attack Mentality

I’m Mort Gezzam, the Main Maven here at MortgageAttack.Com.  I want to say a few words about the importance of developing a Mortgage Attack mentality.  Back in 2008 I put on a foreclosure defense seminar and invited 5 self-appointed “whizbangs” to impart their wisdom to a room of 60 mortgage investors  whom the financial crisis had virtually destroyed.  Lenders had attacked them, and they had started losing their properties to foreclosure.  Their fiscal worlds had ground to a halt and time seemed to stand still as banks ground their money and real estate dreams into dust.  All of them yearned for some way to DEFEND against that inexorable foreclosure.  And all knew intuitively that their efforts would fail.

It should go without my saying, but I’ll say it anyway, that the 5 gurus didn’t know diddly squat about defending against foreclosure effectively.  They were clueless.  None of them seemed to realize then that a mortgagor cannot defend against foreclosure of a valid mortgage note which the mortgagor breached by non-payment.  God help us, they STILL DON’T realize it.  They are still clueless.  They still try to defend against foreclosures, and those they “help” continue to lose their houses.

All of them, and most lawyers who try to help foreclosure victims, mount defenses with failing arguments.  They do that mainly because it takes less work than the alternative, AND because they never developed a MORTGAGE ATTACK MENTALITY.

Along the way I met an inter-planetary-class litigation consultant who explained it to me against all my protestations:  you never defend against foreclosure of a valid mortgage when you can attack the mortgage for its lack of validity.

This strategy has a simple basis in the two principles of the typical state constitution (Florida’s for example):

  1. No law impairing the obligation of [valid] contracts shall be passed;
  2. All persons shall have access to the courts for redress of injury, and justice shall be administered without sale, denial, and delay.

Naturally, the foreclosure authorities, whether trustees or judges, assume the plaintiffs have submitted valid mortgage contracts to them for adjudication or settlement.  So they want to know only two things:

  1. Did the borrower breach the note;
  2. Did the servicer properly give notice of acceleration and demand for payment according to state and federal law.

The judges and trustees don’t much care whether the note is an original because the proceedings lie in equity, and the judge must do what he deems fair.  You cannot imagine that the judges believe it fair to give unjust enrichment to a recalcitrant mortgagor, regardless of the reason the mortgagor could not pay the debt timely.  So naturally the authorities want to grant the foreclosure forthwith so that the creditor can collect his money or the house and go on about his life.

But if the mortgagor can scramble around and find where the lender or mortgage broker or appraiser or title company made a serious legal error, breached the contract, or defrauded him, presenting that issue to the trier of fact and artfully demanding redress for that injury can net the cheated mortgagor a whole pile of concessions from the lender, from minor setoffs to the house free and clear, a favorable loan modification deal, or millions in compensatory and punitive damages.  And in point of fact, lenders and their agents have injured 90% of all single family home mortgagors who have obtained loans over the past 15 years.

The mortgagor who sees this clearly, he will dig a tunnel to Hades itself in order to find those injuries and present them to the court for redress.  And such a mortgagor might even feel willing to sue an attorney for legal malpractice  who fails to do exactly that out of greed or laziness.  In other words, understanding what works and what doesn’t can transform a mortgagor or attorney from a foreclosure defense “Kool-Aid drinker” into a steely-eyed, fire-belching Mortgage Attack monster.

America does not have a Mortgage Attack culture among attorneys.  But I and other Mortgage Attack mavens hope to instill a new verve into the foreclosure pretender defenders, so they can enjoy living up to their law school dreams and ambitions of helping others.

If you are a mortgage victim, go to your lawyer’s office today and yell MORTGAGE ATTACK in his face 5 times, then demand to know why he doesn’t ATTACK.

Send him to this Mortgage Attack web site.  It explains everything the mortgagor or attorney needs to know in order to mount a successful attack against injurious lenders and their agents.  Then he might start winning for a change.

Mort Gezzam photo
Mort Gezzam