Global Literary Marketplace Foreclosure Fraud Defense by Grace Adams

7. October 2013



Charles Cox 5:43 PM
To: Charles Cox

State AGs settle with LPS for $113 million; only nobody knew
October 6, 2013 | Written for

In February of this year, the state attorneys general settled with Lender Processing Services (LPS) for $113 million dollars in an El Paso district court. This settlement, like the larger nationally-recognized settlement, also relates to robo-signing and fabricated documents used to process illegal foreclosures. This settlement amount is to be split between a number of other state AGs. (See chart)

El Paso, Texas seems to be ground zero for the filing of some of the national mortgage lawsuits, but somehow these cases manage to stay off the mortgage fraud radar and questions what the AG is really doing in the “public interest” during his election year.

Apparently nobody knew about this settlement, and it has one attorney asking: “Where is the money?”

Attorney Richard Roman (pronounced: “Row-Mawn”) discovered STATE OF TEXAS v. LENDER PROCESSING SERVICES, INC.; LPS DEFAULT SOLUTIONS, INC., and DOCX, LLC was filed on February 1, 2013 and ended five days later on February 6 with an Agreed Judgment and Injunction.

Mr. Roman is currently in the process of intervening in another case, STATE OF TEXAS v. AHMSI, to make sure his client is not forgotten as an “afterthought”. It appears Roman’s filing struck a nerve over at the Asst. AG’s Office, who he claims seem eager to make sure his voice is never heard and his client never sees the inside of a courtroom.

For some reason, when mortgage fraud victims file complaints with various Texas Attorney General offices throughout Texas, every complaint we know of ends up in this office that is tucked away in the far west corner of the state – sometimes known as “North Juarez, Mexico”. It is not that the El Paso office possesses an advanced skill-set for mortgage fraud crimes committed by the banks.

When the Asst. AG was told in early 2005 that there was “certified evidence” to confirm both fraud and corruption going on inside a Texas foreclosure court, Mr. Daross responded: “Whenever someone mentions corruption in our courts, I tend not to listen.”

Welcome to Texas

Many of the second-tier bad actors who created the nation’s foreclosure crisis (including LPS), hitched a post in Texas. NBC News reported: “As Texas governor, Rick Perry spent tens of millions in taxpayer money to lure some of the nation’s leading mortgage companies to expand their business in his state, calling it a national model for creating jobs. But the plan backfired.”

It may be for that reason that Texas, like many other states, is basically devoid of foreclosure rulings in favor of its thousands of foreclosure crime victims. The judicial corruption, especially in the Dallas/Collin county corridor, has been confirmed by many lawyers, three judges, and most recently by a Texas law professor, who added that protection for the foreclosure-mills comes straight out of Washington. It seems the “Don’t Mess with Texas” slogan has long been retired.

The $113 Million LPS settlement provides for “Remediation to Homeowners”, but we have yet to hear from a homeowner who benefitted from – or even knew about this settlement.

In his letter to El Paso’s assistant AG, James Daross, Mr. Roman is demanding proof that LPS paid the amounts contained in this settlement:

Dear Mr. Daross and Bischoff:

Please accept this email as my request for information pursuant to the Texas Public Information Act (“TPIA”) for the following information:

1. Copies of the quarterly reports detailing the efforts of LPS to fulfill the obligations placed upon it as described in the Section titled: “IV. 4.1 Remediation to Homeowners”, as part of the “Agreed Final Judgment and Injunction” in 2013DCV-0413, “The State of Texas v. Lender Processing Services, Inc.”;

2. Proof of payment by LPS to The State of Texas of $5,755.050 as a settlement in this matter;

3. Proof of payment of 7 million dollars in attorney’s fees awarded to the State of Texas, as well as $483,333.00 as additional attorney fees.

Provide me with the copying cost and I will see that it is paid expeditiously.

Richard A. Roman, Esq.

Texas has known forged and false documents have been used to steal homes from its own residents dating back to the 1990s, but until lately, the state didn’t seem bothered by all these state jail felonies being committed throughout the state en masse.

In the 2007 (pre-crisis) certified Texas Supreme Court transcript of the “Meeting on Foreclosure Rules”, Michael Barrett (now deceased), of the Texas foreclosure-mill Barrett-Burke, Castle, Daffin & Frappier, admits that the mandated paperwork required to lawfully execute a foreclosure simply does not exist in 90% of the cases:

“So finding a document that says, “I am the owner and holder, and I thereby grant to the servicer the right to foreclose in my name” is an impossibility in 90 percent of the cases.” (transcript page 27, line 16)

The remedy for when, as Mr. Barrett confirmed “There really isn’t such a document” (Page 27, line 8), was revealed by Judge Bruce Priddy (See State of Texas v. Judge Priddy D-1-GV-08-002311) when he added:

“They just create one for the most part sometimes, and the servicer signs it themselves saying that it’s been transferred to whatever entity they name as applicant”. (page 28, line 10)

First American Title added:

“Well, the other problem — Judge, this is Tim Redding. The other problem that I see — and, Tommy, you and I talk about it regularly – that we have a bunch of servicers that are corporations or trusts attempting to foreclose on behalf of other trusts using a power of attorney, and I don’t think that’s really proper. I mean, we all kind of turn a blind eye to it, but I think that’s an issue that’s out there that somebody could use to potentially attack a foreclosure.” (p. 33, line 5)

According to Mr. Barrett’s statements; that means 9 of every 10 foreclosure/eviction cases filed in Texas likely contain uttered documents, a/k/a state jail felonies. That is absolutely stunning! Many people might assume the Texas district attorneys, U.S. Attorneys, FBI, IRS, Texas Rangers, Secret Service, etc. would be investigating this multi-billion dollar criminal enterprise that has been operating in the state for close to twenty-years. But it appears the El Paso AG office is the lone ranger against this massive land grab and transference of wealth, and they don’t seem to want anyone to know. We applaud anyone who goes toe to toe with the banks, but where is the stipulated ‘remediation to homeowners’?

The case against Countrywide

Another obscure case discovered this week was filed in El Paso in 2009 by the State of Texas against Countrywide. The AG obtained an Agreed Final Judgment and Injunction on the same day the petition was filed. Among other things, the injunction places Restrictions on Initiation or Advancement of Foreclosure Process for Eligible Borrowers.

Here is the Docket, Petition and Agreed Judgment in State of Texas v. Countrywide Financial, Countrywide Home Loans and Full Spectrum Lending

Did the media not know about this case either?

1. October 2013

Transfers of mortgages and notes‏

Charles Cox 11:18 AM
To: Charles Cox


Dale A. Whitman

Professor of Law Emeritus

University of Missouri-Columbia

A good deal has been written on DIRT recently about transferring to a securitized trust the right to foreclose. Unfortunately, a lot of the commentary has disregarded the relevance of UCC Article 3. I’m going to try to shed some light on it with this post. Those who want to know more can read the famous PEB report of Nov. 2011, officially entitled REPORT OF THE PERMANENT EDITORIAL BOARD FOR THE UNIFORM COMMERCIAL CODE: APPLICATION OF THE UNIFORM COMMERCIAL CODE TO SELECTED ISSUES RELATING TO MORTGAGE NOTES. It’s readily available on line, and really should be read by everyone with an interest in the legal aspects of the secondary mortgage market.

1. Why is the UCC Article 3 relevant?
A mortgage note may be negotiable or nonnegotiable. The definition of negotiability, found in UCC 3-104(a), is complex, and this isn’t the place to go over it in detail. Suffice to say that now about a dozen cases have held that the Fannie-Freddie uniform residential note is negotiable, and not a single case has held the contrary. Commercial mortgage notes are a very different matter. A reasonable rule of thumb (subject, of course, to an analysis of each individual document) is that commercial mortgage notes are usually nonnegotiable and residential notes on the GSE form are negotiable.

Article 3 governs only negotiable notes, but if the note in question is negotiable, Art. 3 in effect preempts the field and supersedes the common law to the extent of any conflict. For purposes of analysis of residential mortgage-backed securitization, Article 3 is the relevant body of law.

2.What is being transferred?
There are two very distinct aspects of a note that can be transferred, and one can’t write or speak intelligibly about “transferring” a note without making clear which aspect one has in mind. The two aspects are (a) the right to enforce the note (often called PETE status, where PETE means the “person entitled to enforce”); and (b) ownership, which refers to the party with the ultimate right to the economic benefits of the note — the proceeds of payment, prepayment, foreclosure, etc. Transferring PETE status is governed by Article 3 if the note is negotiable; transferring ownership is governed by Article 9 (whether the note is negotiable or not).

For purposes of mortgage foreclosure, it is PETE status that is relevant. This fact has become increasingly clear in the past few years; older cases usually betrayed no understanding of the difference between PETE status and ownership, but many recent cases have clarified it, and virtually without exception, they have held that PETE status (and not ownership per se) confers the right to foreclose. The mortgage, of course, follows the note, so that the same party (the PETE) has the right to sue on the note and foreclose the mortgage. It is common for the owner and the PETE to be the same party, but that isn’t necessarily the case. For example, a securitized trustee may deliver the note to its servicer to foreclose; the servicer thus becomes the PETE, while the trustee remains the owner.

For all purposes related the borrower, it is PETE status that counts. If the borrower pays the PETE, the note is discharged. The PETE is the party who can modify or compromise the note, agree to a short sale, take a deed in lieu, or do any other act that affects the borrower’s rights. The borrower, on the other hand, has no legitimate interest in who owns the note. That’s a matter for the secondary market parties — transferors, transferees, and servicers — to work out among themselves. The borrower need only be concerned with identifying the PETE.

3. How is PETE status transferred?
If the note is negotiable, PETE status is transferred by delivery of the original instrument to the transferee. No separate document of assignment of the note is relevant or required. Hence, it’s confusing to refer to such a transfer as an assignment, since that terms seems to suggest a separate piece of paper.

Delivery is the key. The note need not be endorsed, and no allonge is needed. The ultimate question is whether the party trying to enforce the mortgage has possession of the note or not. An endorsement is helpful, but only in an evidentiary sense; if there’s no endorsement, the party in possession of the note may be required to prove that it was delivered for the purpose of transferring the right of enforcement (while, if there is an appropriate endorsement, no such proof is required). But that sort of proof should not be very difficult to adduce. (A party with possession, but without an endorsement, is called “a nonholder with the rights of a holder.”)

There’s only one exception to the requirement of possession of the note. Under UCC 3-309, if the note has been lost or destroyed, a lost note affidavit may be substituted for possession of the note (though the party filing the affidavit may be required to post a bond, give an indemnity, or provide other security against the possibility of double-enforcement of the note). There are many unresolved questions about lost note affidavits, but in an appropriate situation, such an affidavit can provide an alternative to a missing note.

Because of the UCC’s governance of the process of transferring PETE status, discussions about the common law of assignments simply aren’t relevant or helpful in this area. On the other hand, ownership of notes can be transferred, under Article 9, either by a separate document of assignment or by delivery of the notes. Hence, it’s appropriate to talk about assignments with respect to ownership. But as I’ve indicated above, ownership is of no importance to borrowers.

For New York lawyers, it’s significant that NY has not adopted the current version of Article 3. (It’s the only state not to do so.) However, it probably makes little or no difference for purposes of the points I have made here. For an excellent exposition of NY’s version of Art. 3 in this context, reaching essentially the same results as outlined above, see Bank of New York Mellon v. Deane, 2013 WL 3480255 (N.Y.Supreme Ct., July 11, 2013). (The court does such a nice job that I won’t try to embellish it. It takes the Appellate Division to task because of a number of App.Div. opinions that seem to say that the right to enforce a negotiable note can be transferred either by delivery or by a document of assignment. But even under the old version of Article 3, this is wrong, as the Deane opinion points out very effectively.) And NY has adopted the current version of Article 9.

4. How do Articles 3 and 9 interact?

Operationally, Articles 3 and 9 are not difficult to reconcile. They simply deal with different issues. Here’s a simple, straightforward way to think about it:

Article 3 governs transfers of the right to enforce the note; the common law “mortgage follows the note” rule means that, in effect, Article 3 governs transfers of the right to enforce the mortgage as well. (Incidentally, there are a large number of recent cases — cases that do recognize the difference between ownership and the right to enforce — that agree with this statement.)

Article 9 governs transfers of ownership of the note; the common law “mortgage follows the note” rule, which is embodied in 9-203(g), means that, in effect, Article 9 governs transfers of ownership of the mortgage as well.

5. The role of mortgage assignments.
It is crucial to understand that, for purposes of having the right to foreclose, mortgage assignments are completely irrelevant. A mortgage assignment, particularly if it’s recorded, may be beneficial in other ways. For example, it may ensure that the holder of the mortgage will get notice of litigation filed that affects the property or the mortgage. It will also effectively prevent the assignor from illegally discharging or subordinating the mortgage after assigning it, thus preventing a subsequent BFP from taking free of (or gaining priority over) the mortgage. For these reasons, recording a mortgage assignment may be a good idea. But for purposes of foreclosing, a mortgage assignment is entirely unnecessary.

6. Variations in nonjudicial foreclosure states.
The material above is virtually universally followed in judicial foreclosure proceedings in every state. (Maine is arguably an exception, in the sense that its statutes can be read to require a recorded chain of mortgage assignments as a prerequisite to a nonjudicial foreclosure.)

But nonjudicial foreclosures are another matter. There is a sharp split of authority as to whether PETE status is necessary to conduct a nonjudicial foreclosure. California, Arizona, Idaho, Texas, Minnesota, Michigan, and Georgia have held that it is not, based on their interpretation of their nonjudicial foreclosure statutes. On the other hand, the courts in Nevada, Washington, Maryland, North Carolina, and Massachusetts have disagreed, reading their statutes to require PETE status (essentially possession of the note) as a requirement to foreclose. I think the former group of states are wrong, because they fail to read the UCC in pari materia with foreclosure statutes, but there they are. Most of the states in the former group would say that the foreclosing party must have a recorded chain of mortgage (or deed of trust) assignments in order to foreclose, but in some of them it simply isn’t clear what the documentary requirements to foreclose are. Frankly, the nonjudicial foreclosure statutes generally don’t handle this issue well; they were drafted at a time when secondary market sales of mortgages were rare, and their drafters didn’t think this issue through very carefully. Remember, this is exclusively an issue with nonjudicial foreclosure; even in the states where nonjudicial is the predominant mode of foreclosure, one can always qualify to foreclose judicially under the principles outlines in sections 1-4 above.

7. Transfers to securitized trustees.
By now it is clear that in many thousands of cases involving RMBS, notes were not transferred to securitized trustees within the 90-day REMIC window. Failure to do so was an obvious violation of the Pooling and Servicing Agreements, which universally required such transfers. But let’s be more specific: was it PETE status or ownership that was to be required within the 90-day window? In most cases, the PSA spelled out exactly what was to be transferred: usually possession of the notes, often combined with the original mortgages, mortgage assignments, and appropriate endorsements.

As I’ve already pointed out, failure to comply with most of these PSA requirements is irrelevant to the trust’s power to foreclose. It doesn’t matter whether the trust got endorsements or mortgage assignments. But it must get the notes in order foreclose the corresponding mortgages. Must it do so within the 90-day window? There’s no legal reason that it must, provided it gets them before it institutes foreclosure. Yes, a late delivery of the notes is doubtless a violation of the PSA, and that may make the transferor and its predecessors (the sponsor and the depositor) liable to the trust for damages. But if the trust gets the notes before instituting foreclosure, it has the right to foreclose. From the viewpoint of PETE status, the fact that the notes were transferred late is completely irrelevant.

8. The relevance of New York trust law.
Much has been made of the provision of New York Estates, Powers and Trusts Law § 7-2.4, which provides that acts of the trustee not authorized by the terms of the trust (here, the PSA, which is the only trust instrument) are void. Supposedly, this means that if the notes are not delivered within the 90-day window, acceptance of them by the trustee at a later time is unauthorized, the transfers are void, and the trustee can’t foreclose.

On its face, this argument strikes me as absurd. The “void” language of the statute was designed to protect the trust beneficiaries (here, the bond-holders) against unauthorized acts of the trustee. But in the present context, the result of the argument would be to deprive the bond-holders of the power to foreclose the mortgages that their trust has purchased and paid for — a disastrous result for the bond-holders. This has the effect turning the statute on its head, changing it from a protection for the beneficiaries to a weapon used against the beneficiaries. Isn’t it obvious that the courts will ultimately rule that the bond-holders should be deemed to have ratified the trustee’s action (even though performed late)?

I’m suggesting that recent contrary cases, like Erobobo (NY Supreme Court) and Glaski (Cal. Ct. of App.) will not survive. Their conclusion is nonsensical. The likely logic of the contrary viewpoint, which I believe will survive, is found in Calderon v. Bank of America , 2013 WL 1741951 (W.D.Tex. 2013), which adopts the “beneficiary ratification” approach.

9. The REMIC rules.
Int. Rev. Code 860G requires transfer of the loans to the trust within 90 days of the Start Date. The purpose, as everyone agrees, is to ensure that the REMIC is a “static” investment vehicle; that it won’t engage in active trading of its assets once it has gotten started. The actual language, which defines “qualified mortgage,” is that the mortgage must be “transferred to the REMIC on the startup day in exchange for regular or residual interests in the REMIC, [or] (ii) … purchased by the REMIC within the 3-month period beginning on the startup day.”

Fine, but the language leaves a fundamental question unanswered: which aspect of the mortgage notes, ownership or PETE status, must be transferred during the three-month period? (Pretty obviously, Congress had no idea of the difference when it passed the statute in 1986, but it’s still necessary to impute some intent to Congress.) The more plausible interpretation, I would suggest, is that ownership must be transferred. That view of the statute would allow the establishment of the “static pool” that Congress had in mind. Whether the REMIC got the right to enforce or foreclose the mortgages during the 90-day window would be irrelevant; it would have fixed its right to the economic benefits of the pool by getting ownership.

As I mentioned above, ownership is governed by Article 9, which allows transfers either by delivery of the notes or by a separate document of assignment. Moreover, the description of the notes in a document of assignment can be fairly general — no legal descriptions of the land covered by the mortgages would be necessary, for example. Hence, if the executed PSA included an appendix listing the loans to be transferred by the depositor, in all probability Article 9’s requirements (and hence, the REMIC rules) would be satisfied.

I’m not at all sure that this was done in all cases; during the heyday of RMBS securitization, people got very sloppy indeed. But if it was done, I think the IRS would find it to comply with the Code.

Note that we’re talking here only about satisfying the IRS. The REMIC rules are tax rules; if they are not satisfied, the REMIC becomes a taxable entity, with extremely harsh results to the bond-holders (though not as harsh as the nutty argument that the trust can’t enforce the mortgages, of course). Noncompliance with the REMIC rules has no direct relevance at all to the enforceability of the notes or mortgages.

One last observation. The argument that many REMICs violated the REMIC rules has been floating around for at least two or three years now, and yet the IRS has not shown the slightest inclination to pursue it. Why not? One reason is doubtless a desire to avoid the enormous financial impact on the bond-holders that would result from making all non-complying REMICs into tax-paying entities. Another is the fact that the Federal Reserve Board has bought more than a billion dollars (I wasn’t able to find the exact amout) of private-label RMBS. Does anyone think the IRS (which is part of the Treasury) is going to take an action that will destroy a large part of the value of an asset that the Fed has purchased? The idea is nonsensical. No one should spend much energy on the expectation that the IRS is going to start attacking REMICs; it isn’t going to happen.

10. Can we stop the nonsense?
The extent of outrageous misinformation that exists on the internet about this issue is frightening. As lawyers, we need to be more careful. In particular, let’s try harder to make it clear what we mean when we take about “transferring” or “assigning” a note or a mortgage. If we disregard the difference between transferring ownership and transferring PETE status, we run a real risk of writing gibberish.

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

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

29. September 2013

Baxter Jones Wins Modification Offer, But Still Not Enough

Date: Sat, 28 Sep 2013 15:54:15 -0400
Subject: Baxter Jones Wins Modification Offer, But Still Not Enough

Baxter Wins Modification Offer, But Still Not Enough
After our spirited demo last month at the Chicago offices of Fannie Mae (see YouTube link), Baxter Jones has won an important concession: Fannie has offered a post-foreclosure mortgage modification on the home in Jackson, Michigan, where Baxter had planned to retire after a disabling car accident left him wheel-chair bound. Baxter Jones vs. Fannie Mae – YouTube

That’s the good news. The bad news is that Fannie is demanding a “standard” interest rate of 4.65% and a monthly payment of $1,200— far more than Baxter can afford on disability income of $1,800 a month. Fannie has refused to reduce mortgage principal or sell the home back to an allied investor who offered to buy the property at market value.

Fannie has the power to do so. A modification subsidized by the federal government’s Home Affordable Modification Program would charge interest of only 2% and require monthly payments of about $700. Instead of reducing principal, it would be collected over a longer term. When he first went into default, Baxter should have been considered for a similar modification under a special forbearance program for people with disabilities, but Wells Fargo, the bank servicing the mortgage for Fannie Mae, foreclosed even though Mr. Jones qualified.

We have moved the struggle forward to save Baxter’s home, but we need to pressure Fannie Mae to do what Wells Fargo should have done in the first place: provide Baxter with a sustainable mortgage modification that matches the HAMP guidelines.
Call Fannie Mae’s regional office in Chicago, 312-368-6200, or call Chris Daugherty, Escalation Specialist, 972-656-8600
Baxter Jones’ loan number is 025 301 6042. His address is 8789 Rexford Rd., Jackson, Michigan
Tell Fannie to stop the eviction of S. Baxter Jones and provide a low-interest mortgage modification with monthly payments at no more than a third of Baxter’s gross income, matching the HAMP guidelines.
For more information, go to

16. September 2013

Vigil Alert, call Fannie for Henderson family‏

Stop Fannie Mae From Evicting the Hernandez Family!

Call/email Fannie & Join the Vigil

PDF: Flyer– Stop the Eviction of the Hernandez family

We are gearing up for defense of the Hernandez home in Southwest Detroit against an unjust eviction by Fannie Mae. There are flyers attached in English and Spanish with details on what put the family at risk of losing their home. Contact info for calling on Fannie Mae to stop the eviction is on the flyers and also pasted below, as well as phone numbers for congressional representatives.

Stay tuned from today onwards for emergency notice to start the vigil if/when the judge signs the eviction order and sends it to the bailiff. It could be any time from Tuesday morning onwards when we’ll be putting as many people as possible in front of the home to peacefully demonstrate the community’s opposition to another unjust eviction. Best if you can give us a phone number by return email for contacting in an emergency, and let us know if it is a cell that you want us to text to. (We will only text in an emergency). We will otherwise send update alerts by email and by posting on twitter @evictdefense. For more information go to the web site at

Call/Email Fannie Mae:
Tell them to sell the house at 1136 Morrell St. in Detroit to the Center for
Community Justice and Advocacy so that this non-profit can sell the home back
to the Hernandez family for a fair price! Fannie Mae has done this before and can
do it again to prevent an unjust eviction.

Call: (312)368-6200 or (866)442-8572. Email:
Reference Fannie Mae loan #1702179550, for the Hernandez home at 1136
Morrell St., Detroit, MI 48209

Ask your congressional representatives to contact Fannie Mae.
Senator Debbie Stabenow: (313) 961-4330
Senator Carl Levin: (313) 226-6020
Congressman John Conyers: (313) 961-5670
Congressman Gary Peters: (313) 964-9960
Congressman John Dingell: (313) 278-2936

Meetings: Detroit Eviction Defense holds an open meeting every Thursday, 6pm,
at Old St. John’s Church, 2120 Russell, Detroit (immediately south of
eastern market, near the corner with Gratiot Ave.) Bring your concerns
and ideas.

11. September 2013

California HBOR Collaborative | The Import & Impact of Glaski v. Bank of America – Also see other cases in the attached newsletter‏

The Import & Impact of Glaski v. Bank of America
PDF: September-Newsletter-rev

PDF: Bank of New York Mellon v Preciado

A month has passed since the California Court of Appeal handed down their decision in Glaski v. Bank of America, N.A., 218 Cal. App. 4th 1079 (2013). In that month, the opinion has been published and Bank of America’s petition for rehearing denied. Now binding on all California trial courts, the opinion has attracted much attention and praise in the foreclosure defense world. This article summarizes the court’s major findings, places the decision into the current legal landscape, and analyzes both its potential impact and its limitations.

I. The Court’s Conclusions

Ultimately, the court’s conclusions are rooted in two basic and related inquiries that clarify (and in some respects simplify) the “authority to foreclose” question in California, at least for the time being. First, does the borrower allege that the foreclosing party was not the beneficiary based on specific facts? Second, if borrower’s claim is based on a failed assignment, was the assignment void, or voidable? If borrowers can allege specific facts showing that the purported beneficiary derived their authority from a void assignment, their claims, under Glaski, may now survive the pleading stage in California courts.

A. Alleging that the Assignment Granting the Beneficiary’s Power to Foreclose is Void, is a Specific, Factual Allegation and the Basis for a Valid Wrongful Foreclosure Claim

The court divides wrongful foreclosure claims based on an authority to foreclose theory into two categories: 1) borrowers who allege, generally, that the foreclosing entity was not the “true beneficiary under the deed of trust;” and 2) borrowers who allege, with specific facts, that the foreclosing entity was not the true beneficiary.[1] Borrowers in the first category rarely make it past the pleading stage, but borrowers in the second group may. In other words, it is not enough to say “X is not the true beneficiary,” but it may be enough to allege “X is not the true beneficiary because Y.” If “Y” is a specific, factual allegation that shows the foreclosing entity did not have the authority to foreclose, then the claim is viable.

The court then explained that “[o]ne basis for claiming that a foreclosing party did not hold the deed of trust” is if the assignment purportedly giving that party foreclosing power is void.[2]The court did not say that attacking a beneficiary’s assignment is the only way to bring a wrongful foreclosure claim, only that this particular defect, when alleged with specific facts, is enough to put the authority to foreclose at issue. Glaski alleged that the assignment of his deed of trust and note to the WaMu Securitized Trust was void because it occurred after the trust’s closing date.

B. Standing: Void vs. Voidable Assignment

Many securitization-based wrongful foreclosure claims fail because the borrowers do not have “standing” to challenge how their loan was securitized.[3] The Glaski court framed this issue simply, focusing on the assignment: “When a borrower asserts an assignment was ineffective, a question often arises about the borrower’s standing to challenge the assignment of the loan (note and deed of trust) –an assignment to which the borrower is not a party.”[4] The court cites federal cases from other circuits,[5] and a California Jurisprudence treatise to conclude, “a borrower can challenge an assignment of his or her note and deed of trust if the defect asserted would void the assignment.”[6] California courts have largely adopted a knee-jerk reaction to securitization theories, throwing those claims out because the borrower is not a party to, or third-party beneficiary of, the assignment agreement (the PSA in most cases). The Glaski court broke with California precedent in framing the issue as one of void versus voidable assignments, allowing theories based on void assignments to survive pleading.

C. A Post-Closing Date Transfer to Trust Renders the Assignment Void

The court had thus far established: 1) Glaski’s attack on the beneficiary’s assignment was specific enough that it went beyond a general challenge foreclosing party’s right to foreclose; and 2) generally, void assignments give a borrower standing to challenge the loan’s securitization, even though the borrower was not a party to, or third-party beneficiary of, the PSA. The court then analyzed whether Glaski’s specific allegations, taken as true, would void the assignment, giving him standing.

Like many mortgage loans, Glaski’s note and deed of trust were sold (assigned) to a trust to be bundled with other mortgages, sliced up and sold again. Through a subsequent FDIC takeover, acquisition, and more assignments, defendant Bank of America either became the “successor trustee” to the WaMu trust, or acquired the Glaski deed of trust from JP Morgan, who bought all of WaMu’s assets from the FDIC.[7] Either way, the possible chains of title are broken because the transfer from JP Morgan Chase to the WaMu Securitized Trust occurred long after the closing date of the trust.[8]

But does a post-closing assignment to a trust render that assignment void? To answer this question, the Glaski court analyzed New York law, which, according to the pleadings, was controlling,[9] to conclude that an assignment transferred after a trust’s closing date is void, rather than voidable.[10]

Glaski pled both threshold questions with the requisite specificity: 1) he alleged that Bank of America was not the beneficiary because the assignment purporting to give it foreclosing power was invalid; and 2) the assignment was void, not voidable, because the transfer to the trust occurred after the trust’s closing date. The first point got him past Gomes, and the second established his standing.

D. Tender

The court addressed the tender issue briefly, but it was still critical to its ruling and again emphasizes the importance of distinguishing whether a foreclosure sale is void or voidable. “Tender is not required where the foreclosure sale is void, rather than voidable, such as when a plaintiff proves that the entity lacked the authority to foreclose on the property.”[11] Because tender was not required, and because Glaski stated a cognizable claim for wrongful foreclosure, the court reversed the trial court’s dismissal of the complaint, and vacated and overruled the order sustaining the Bank of America’s demurrer.

II. Placing Glaski in the California Foreclosure Landscape

A. Distinguishing Gomes: Specificity

Gomes was probably Glaski’s biggest hurdle. The court dedicated an entire section of its opinion to differentiate its findings from those in Gomes.[12] The borrower in Gomes also brought a wrongful foreclosure claim, alleging that the foreclosing entity, MERS, was not the beneficiary’s nominee because the unknown beneficiary did not appoint MERS as nominee, or give MERS authorization to foreclose.[13] Unlike Glaski, however, Gomes left his argument there. He did not take the crucial step of explaining why MERS, who was listed as beneficiary and nominee in the deed of trust,[14] was not the true beneficiary.[15] Rather, Gomes alleged that CC § 2924 afforded him the right to “test” whether MERS had the beneficial interest before the sale took place.[16] “Whether” is the key word and the difference between a Gomes claim and a Glaskiclaim. Gomes wanted to investigate whether or not MERS was the beneficiary. By contrast, Glaski alleged that Bank of America was definitely not the beneficiary because the assignment giving them beneficiary status was late to the trust, and therefore void. Gomes asked, “who has the authority to foreclose?” whereas Glaski stated: “X definitely does not have authority for these reasons . . . .” The Gomes court found that CC § 2924 provides no right for borrowers to ask “whether” the foreclosing party had the authority to do so.[17]

B. Distinguishing Nguyen: Void vs. Voidable

The Glaski court also had to reckon with Nguyen v. Calhoun, 105 Cal. App. 4th 428 (2003), which held that anything outside of the foreclosure sale process cannot be used to challenge a presumably valid and complete sale.[18] Specifically, the court had to consider whether an “ineffective transfer to the WaMu Securitized Trust” was an aspect of the foreclosure sale, or if it fell outside of that sale and was therefore irrelevant.[19] Because the transfer to the trust was fundamental to Bank of America’s authority to foreclose, and would void the sale itself, the court decided that the trust transfer was part of the foreclosure sale and a valid basis for challenging the foreclosure.[20]

C. Distinguishing Fontenot: Burden Shifting

The Glaski opinion nowhere cites Fontenot v. Wells Fargo Bank, N.A., 198 Cal. App. 4th 256 (2011), but it is important to recognize why Glaski came out differently from that case. As inGlaski, the borrower in Fontenot alleged that an invalid assignment voided the entire foreclosure transaction.[21] Unlike Glaski, however, Fontenot based her invalid assignment theory, not on specific facts like a late transfer to a trust, but on the theory that the assignor (MERS) had the burden to prove the assignment was valid, and could not do so.[22] The court determined that MERS did not bear that burden because nothing in the statutory scheme regulating nonjudicial foreclosures created that duty: “[A] nonjudicial foreclosure sale is presumed to have been conducted regularly, and the burden of proof rests with the party attempting to rebut this presumption.”[23] If “‘the party challenging the trustee’s sale [can] prove such irregularity and . . . overcome the presumption of the sale’s regularity,’” that could shift the burden to defendant to show a valid assignment.[24] This is precisely what Glaski accomplished: by pleading specifically that the assignment is void because of the late transfer to the trust, Glaski rebutted the presumption of regularity, which is all he needed to do at the pleading stage.

III. The Promise & Limits of Glaski

Glaski cannot be used to bolster every securitization theory. To employ Glaski principles effectively, advocates should undertake the same analysis the court did. First, does the borrower simply allege the foreclosing party does not hold the beneficial interest in the deed of trust (Gomes), or does the borrower allege that the foreclosing party could not possibly be the rightful beneficiary because the assignment giving them that interest was invalid? (Glaski). Second, do the borrower’s allegations render the assignment void or voidable? If void, then Glaski could lend support to both the borrower’s standing and their wrongful foreclosure claim. The HBOR Collaborative will monitor Glaski’s implications and influence as other courts interpret this important decision.


[1] See Glaski v. Bank of Am., N.A., 218 Cal. App. 4th 1079, 160 Cal. Rptr. 3d 449, 460 (2013).

[2] Glaski, 160 Cal. Rptr. 3d at 461 (emphasis added).

[3] See, e.g., Rodenhurst v. Bank of Am., 773 F. Supp. 2d 886, 898-99 (D. Haw. 2011) (“[C]ourts have uniformly rejected the argument that securitization of a mortgage loan provides the mortgagor a cause of action.”); Junger v. Bank of Am., N.A., 2012 WL 603262, at *3 (C.D. Cal. Feb. 24, 2012) (“[P]laintiff lacks standing to challenge the process by which his mortgage was (or was not) securitized because he is not a party to the PSA.”); Bascos v. Fed. Home Loan Mortg. Corp., 2011 WL 3157063, at *6 (C.D. Cal. July 22, 2011) (“Plaintiff has no standing to challenge the validity of the securitization of the loan as he is not an investor in of the loan trust.”).

[4] Glaski, 160 Cal. Rptr. 3d at 461.

[5] Id. (citing Reinagel v. Deutsche Bank Nat’l Trust Co., 722 F.3d 700, at *3 (5th Cir. 2013); Conlin v. Mortg. Elec. Registration Sys., Inc., 714 F.3d 355, 361 (6th Cir. 2013); Culhane v. Aurora Loan Servs. of Neb., 708 F.3d 282, 291 (1st Cir. 2013)).

[6] Glaski, 160 Cal. Rptr. 3d at 461 (emphasis original).

[7] Id.

[8] Id. The WaMu trust, by its own terms, closed in 2005. Id. at 454. An assignment recorded in 2008 “stated that JP Morgan transferred and assigned all beneficial interest under the Glaski deed of trust [and note] to ‘LaSalle Bank NA as trustee for WaMu [Securitized Trust].’”Id.

[9] Id. at 462.

[10] Id. at 463 (“[T]he [WaMu trust] trustee’s attempt to accept a loan after the closing date would be void as an act in contravention of the trust document.”). The closing date is meant to protect the interests of the trust’s investors because it ensures REMIC status, exempting investors from federal income tax (with respect to the trust). Id. at 460 n.12, 463.

[11] Id. at 466.

[12] Glaski, 160 Cal. Rptr. 3d at 464.

[13] Gomes v. Countrywide Home Loans, Inc., 192 Cal. App. 4th 1149, 1152 (2011).

[14] Id. at 1151.

[15] Instead, Gomes claimed he “‘d[id] not know the identity of the Note’s beneficial owner,’” but that whoever “authorized” MERS to foreclose was not the beneficiary or the beneficiary’s agent.Id. at 1152. He gave no specific reason for believing this, other than that his loan was “sold . . . on the secondary mortgage market.” Id.

[16] Id.

[17] Id. at 1155 (“[Section 2924 does not] provide for a judicial action to determine whether the person . . . foreclos[ing] . . . is indeed authorized.”).

[18] See Nguyen v. Calhoun, 105 Cal. App. 4th 428, 441-42 (2003).

[19] Glaski, 160 Cal. Rptr. 3d at 466.

[20] Id.

[21] See Fontenot v. Wells Fargo Bank, N.A., 198 Cal. App. 4th 256, 269 (2011).

[22] See id. at 269-70.

[23] Id. at 270.

[24] Id. (quoting Melendrez v. D & I Inv., Inc., 127 Cal. App. 4th 1238, 1258 (2005)).

4. September 2013

Federal Agent Misconduct in Favor of BofA and McCarthy Holthus and Levine law firm?

Federal Agent Misconduct in Favor of BofA and McCarthy Holthus and Levine law firm?
by Neil Garfield



pdf: 2013-08-29-unexpected-visit-from-the-national-joint-terrorism-task-force

This is a story about abuse of power or abuse of apparent power. The object is to cover-up crimes that remain largely undetected because the complex maze created by the “Thirteen Banks.” The stakes could not be higher. Either the current major Banks will be sustained or they will come crashing down with a feeding frenzy on a carcass of a predator that stole tens of trillions of dollars from multiple countries, hundreds of millions of people, and millions of homes across the world that should, by all accounts under the Law, still belong to the owner who was displaced by foreclosure. The banks are willing to do anything and they are paying outsize fees and other legal expenses (topping $100 Billion now).

The agents involved — Mike Lum from Homeland Security, Tim Hines, FBI Agent, and Sean Locksa, FBI agent — were either moonlighting (the agents say they were acting in their official capacity) and using their badges in appropriately or they were sent to intimidate litigants with Bank of America represented by McCarthy Holthus and Levine. A few years back, I received reports that the law firm, and in particular attorney Levine, had sent letters to local prosecutors to request action against people who were defending their property from foreclosure. The agents admitted to Blomberg today that they received a “tip” and that “it” was “no longer” a criminal manner and that they had ended their investigation.

In one prior case I saw a letter and I believe I might have seen an affidavit signed by Levine. The result was a series of indictments against one individual that were later dismissed. I have no information on the other cases all dating back to around 2010. I know one of the people, the one who I know was indicted, spent the last bit of her money hiring a criminal attorney to defend her. The case was “settled with a dismissal.” She subsequently lost two homes that were previously unencumbered in a foreclosure where different parties stepped in to foreclose than the ones who asked for lift stay in her bankruptcy. None of the parties were creditors or properly identified.

I now believe I have enough information to connect the dots, and raise the question as to whether members of local, federal and state law enforcement are colluding (or are being wrongfully used by the suggestion of false information) with Bank of America and at least one law firm — McCarthy Holthus and Levine — in which litigants and perhaps witnesses are intimidated into submission to wrongful foreclosures. The information contained in this article relates primarily to Arizona and to a lesser degree, California. I have no information on any other such activity in any other state of the union.

It also appears as though Bank of America and McCarthy Holthus and Levine were taking advantage of some sloppiness at the Post Office, for which the Postmaster in Simi Valley has apologized and sent a refund to the complainant, Darrell Blomberg whose story can be read below. The interesting thing here is that Blomberg reports that McCarthy Holthus and Levine directly received a letter that was addressed to Celia Mora, a suspected robo-signor who apparently lives in Simi Valley, according to the post office, but whose mail bears a San Diego postmark.

The joint terrorism task force supposedly represented by the three men identified above, will not answer calls relating to this matter. Thus we only have Blomberg’s report and my own information and analysis — and of course public record. We do have a callback received today by Blomberg who reports that the agents answered a limited number of questions.

The information contained in this report is substantially corroborated by another source who, like Blomberg I consider to have the highest integrity and who was also visited this past week by the same agents who visited Blomberg. Since no specific act was alleged in the interviews except the perfectly legal request to the post office to confirm an address of a potential witness and test mailings to see who was receiving the mailings, it is hard to conclude anything other than that these agents were being used officially or unofficially to intimidate litigants who have been successful at defending their homes in foreclosure for years, and to intimidate them into ceasing their factual and investigative help to other homeowners who are also being wrongfully foreclosed.

If these interviews were sanctioned by the terrorism task force, the FBI or Homeland security it clearly represents the use of Federal law enforcement authority for the benefit of gaining a civil advantage — a crime in most jurisdictions. How high the orders went in those organization I do not know. If there were no such orders and these agents were doing a “favor” then they are subject to discipline for misuse of their badge and deliberately misleading the persons interviewed into thinking that this was an official investigation. The agencies involved might be negligent in supervising the activity of these agents. Neither of the sources for this story have any mark on their record except the mark of distinction — one having worked for decades in law enforcement in economic crimes.

Was Darrel Blomberg getting too close to the truth?

In litigation, one of the points raised by Blomberg was that Celia Mora — allegedly signed an affidavit perhaps by herself and perhaps as a robo signor. The issue of forgery didn’t come up. There was a San Diego post mark same day as the affidavit was allegedly signed 160 miles away. Blomberg’s position was Mora had no actual authority no actual executive position or managerial position, and signed clerically under instruction without knowledge of the contents. That is it. The fact that McCarthy Holthus and Levine actually received the letter addressed to Mora through normal postal service leads one to believe that the affidavit may have been created at the law firm and perhaps even signed there in Arizona. Hence any criminal behavior suggested was not the work of Blomberg but could have been the work of the law firm or Bank of America. To my knowledge there is no investigation pending relating to the use of the mails, false documents, improper signatures, lack of authority or any of the issues presented by Blomberg.

From there it became a vague charge of harassment communicated by three Federal Agents. Harassment was the word used by the agents in the interview with Blomberg and the interview with my other source. But no specific act was stated even in passing as to what act would be investigated as harassment, no less a matter of national security. More telling, when the agents left both interviews, neither source was instructed or requested to stop any specific act. That leads to the question, if there was no conduct they sought to stop, why were they there at all?

Note that McCarthy Hothus and Levine has been replaced by the law firm of Bryan Cave since June, 2013 in Blomberg’s case. Generally speaking Greg Iannelli, Esq. handles the more sensitive pieces of litigation that could blow the lid off of the fraudulent scheme of securitization.

Read Blomberg’s account – attached.

Background and analysis: Why do the banks continue to use low paid clerical workers to sign affidavits and other documents for which they obviously lack authority or knowledge? Why won’t a true executive with true authority and actual personal knowledge based upon his or her own actual observation, investigation and analysis to make sure the foreclosure is proper as to the property, the persons, the balance due and the existence of a default — especially with reference to the actual creditor’s books of account?

Convenience doesn’t cover it. With legal costs topping $100 Billion it would be impossible to pass the giggle test on any explanation of convenience when it comes to the paperwork. My conclusion is that it is worth getting embarrassed in court as long as the number of times is small enough that the overall scheme is not toppled. The use of clerical personnel to sign and approve documents relating to foreclosure is akin to allowing teller’s decide whether you can have a loan on that new car or new house. It doesn’t happen. If it doesn’t happen when the “loan” goes out, then it is fair to assume that the same standards would apply when the loan turns bad and comes back in.

Think about it. The Banks are reporting record profits. U. S. Bank reported $42 Billion in just one quarter. They are attributing their profits to proprietary trading — something I have attributed to laundering the illicit retention of funds that should have been used to pay investors the principal and accrued interest that was due on the promise of investment banks when they issued bogus mortgage bonds. That money was received by the Banks as agents for the investors and therefore, whether paid or not, is a credit against the account receivable owned by the investors.

The Glaski appellate attorneys gratuitously admitted that the true owner of the debts will never be known. Yet the true relationship between the homeowners and the lenders is regarded as known and enforceable. In short, the position of the Banks is that we don’t know who this money belongs to but it must belong to someone so we are going to collect it and foreclose. We’ll get back to you later on what we did with the money. The Banks are required to take that idiotic position because (a) it is still working in court and (b) they get to avoid liability to investors, guarantors, insurers, borrowers and government agencies that could exceed $10 trillion. So $100 Billion in legal expenses is only 1% of their exposure. It is easy to see how the Math works. If the legal expenses were a far more significant portion of the money the Banks were holding then they would find another way to deal with it.

If the false trading and laundering of money was properly entered on the books as merely repatriating money that was hidden, the investors would be spared the losses that threaten our pensions and cities. It would also alleviate or eliminate the corresponding account payable due from homeowners, city budgets and other “borrowers” who were the unwitting pawns in a scheme to defraud investors. The collateral damage to all citizens, all taxpayers, all consumers, all workers and all homeowners has been obvious since 2007.

The extraordinary story is aggravated by the knowledge that the legal expenses of the Banks has now topped $100 Billion. Like I said, think about it. Nobody spends $100 Billion unless it is worth it. It is worth the price because of the amount of liability they are avoiding, and the amount of money they stole that went offshore. The amount of the theft can be estimated in a variety of ways, and the results are always the same. They siphoned trillions of dollars from many countries. In the U.S. alone it appears that the total was in excess of $17 Trillion, which is $3 Trillion MORE than the total amount of lending on residential “loans.” Extrapolating the most recent profit report from U. S. Bank from a quarter (three months) to a year, that one Bank is reporting annual earnings from “proprietary” trading in excess of $160 Billion per year. That is one of 18 Banks that were involved in this crime against humanity. Do the math.

So the Banks retain money that they never legally earned at the expense of deceived investors, Cities and sovereign wealth funds AND at the expense of the “borrowers” in the “underlying” deals. And by not crediting the lenders, the corresponding reduction of the account payable from “Borrowers” is also absent. No consent for principal reduction is required because the balance has also been reduced or extinguished by payment. Follow the money trail and the results was astonish you. This is like organized crime with all the trimmings of governmental complicity.

Now I am reporting that based upon a pattern of conduct that appears particularly egregious in Arizona, this unholy alliance between the people who committed the wrongs and government is becoming apparent. Who would have imagined indictments and “investigations” of people litigating their cases against the Banks after the scale the crime became apparent in 2008-2009?

CAVEAT: The agents in the Blomberg interview insist they were acting in their official capacity and I take them at their word. My problem with that assumption is that it means the system is susceptible of manipulation by attorneys who have no problem playing dirty tricks to gain a civil advantage. Or, worse, it means that there are high level people in the system who are willing to look the other way when this behavior pops up.

By this point in the savings and loan scandal in the 1980’s more than 800 bank presidents and loan officers, along with mortgage brokers and originators had been convicted by a jury and were serving their sentences. This time the tally is zero. But the reverse is not true. Mortgage brokers and originators and investors who played the system against itself have been investigated, prosecuted and sentenced to prison. And even homeowners have been accused of crimes that were identical to the crimes committed by Banks on a much larger scale. Steal a million, go to jail. Steal a Trillion and get immunity because the finance system might not survive removing the criminals from our society. No longer a nation of laws we have become a nation of men, corrupt men, who continue to accumulate wealth and power as they channel their illicit gains into reported Bank “profits” and control over world natural resources.

For about three years I have been investigating an unholy alliance between a law firm, McCarthy Holthus and Levine, Bank of America, U.S. Bank and law enforcement. It appears as though they have some special influence and that local, state and Federal law enforcement agents are acting as collectors and intimidators outside the boundaries of the law. Prosecutors have followed this line of attack against those pro se litigants who are getting close to the truth that the foreclosures — all of them — were bogus, if they were based upon mortgages and deeds of trust carrying claims of securitization, arising from Assignment and Assumption Agreements, Pooling and Servicing Agreements, and false prospectuses to investors.

The attached report from Darrel Blomberg, a person of unparalleled integrity, tells the story of agents from the FBI who (whether they realized it or not) are clearly acting at the behest and for the benefit of Bank of America, who was represented by McCarthy Holthus and Levine. In the past week, the agents have been visiting at least two people based upon a “harassment” allegation. The agents declared themselves to be part of a joint terrorism task force. The act of harassment was a request for confirmation of address and confirmation of address that ended up both in the offices of Bank of America and the office of McCarthy Holthus and Levine. It was addressed to the U.S. Postmaster who apologized for gaffes in processing the requests and even refunded money to Blomberg. No investigation has been threatened by the U.S. Postal inspector against either the Bank or the law firm. And none has been threatened against Blomberg.

Having a few pages of the attempt to get address of a robo signor whose signature appears to have been forged, these agents have interviewed two people in Arizona that have been known to provide factual assistance to other homeowners and whose own cases have been spread out over many years as the Bank continues to fail in its attempt to claim ownership or verify the balance of the debt. These agents identified themselves as having been dispatched from the FBI, Homeland security and the joint task force. Whether they were merely moonlighting or were in fact dispatched by their superiors, it is clear that no criminal matter was under investigation, and that their purpose was to intimidate two people who fortunately are not easily intimidated. Based upon my investigation it appears as though that law Firm, McCarthy, Holthus and Levine who is frequently replaced by Bryan Cave, has been doing dirty work for the banks through contacts in law enforcement.

It is happening and this should be stopped before it becomes a commonplace act throughout the country.

In the final analysis the issue of ownership of the loan is going to unravel this mess because it is only then that we can look at the books of account and see what money is owed on the original account receivable for the creditor/investor/REMIC.

The analysis of ownership does not merely look to the agreements the parties entered into because the label parties give to a transaction does not determine its character. See Helvering v. Lazarus & Co. 308 U.S. 252, 255 (1939). The analysis must examine the underlying economics and the attendant facts and circumstances to determine who owns the mortgage notes for tax purposes. See id. The court in In re Kemp documents in painful detail how Countrywide failed to transfer possession of a note to the pool backing a Mortgage Backed Security (MBS) so that Countrywide failed to comply with the requirements necessary for the mortgage to comply with the REMIC rules. See In re Kemp, 440 F.R. 624 (Bkrtcy D.N.J. 2010). Defendant in this case has done exactly what was adjudicated in Kemp, failure to sufficiently show a timely transfer that complied with the strict language of the trusts’ Agreements.

As the Kemp court notes, “[f]rom the maker’s standpoint, it becomes essential to establish that the person who demands payment of a negotiable note, or to whom payment is made, is the duly qualified holder. Otherwise, the obligor is exposed to the risk of double payment, or at least to the expense of litigation incurred to prevent duplicative satisfaction of the instrument. These risks provide makers (Plaintiff in this case) with a recognizable interest in demanding proof of the chain of title” (specifically referring to the trust participants). 440 B.R. at 631 (quoting Adams v. Madison Realty & Dev., Inc., 853 F.2d 163, 168 (3d Cir. N.J. 1988). And because the originator did not comply with the legal niceties, the beneficial owner of the debt, the trustee, cannot file its proof of claim either.

Good Lawyering

Good Lawyering…‏

Charles Cox 10:07 AM
To: Charles Cox

Matt Weidner Shows Lawyers How to Do Good Lawyering

by Neil Garfield

The difference between Weidner and many other attorneys is that he goes into a case believing he can win it — and he’s right. Other attorneys believe their position is hopeless and seek only delays or modification — and they are wrong. Weidner has resisted the knee jerk reaction to these cases to believe that if the borrower ceases payment that all elements of a foreclosure are presumed met. He understands that the Banks are playing a shell game to conceal the fact that neither the named plaintiff nor the alleged creditor are in fact the real servicer and real creditor.

Matt Weidner has published his summary of essential issues raised in a hearing in which he was the attorney of record for the homeowner. He shows that knowledge of securitization, good preparation and articulate objections that are logically consistent with the proffer of evidence results in a good record and a good result. This transcript — shown on the link below — should be studied, not merely read. Then read it again. Weidner skills are formidable but they can be learned.

Editor’s Note: The background issue here is the conflict between the law permitting the servicer to commence the action and reality. The Servicer might be able to start a foreclosure but they cannot finish it. They can claim they have authority or power of attorney but the fact is they are not a creditor. And only a creditor can submit a credit bid.

So why is this case being brought this way? Is the creditor aware that their right to the title of the house and their right to sue for collection is being stripped from them. Does the creditor have notice? How do we know? Even if the pleading is not required, the proof demands the evidence that the Trustee of the REMIC testify that they have notice, they own the mortgage, they have not resold it, they have received no augments, directly or indirectly to reduce the balance of the account receivable, and that the investor approves of the Servicer/bookkeeper taking title with a credit bid and getting a judgment in its own name despite the obvious fact that the creditor is entitled to judgment. What authority does the Trustee have to let anyone take away property and assets? What reasonable purpose would be served? Doesn’t this show or at least suggest that the Trust does not own the loan? Maybe it never did, but the investors in the “Trust” know it was their money that funded mortgages — they just don’t actually know which loans they funded.

And as this case suggests, the intervention of the investment banks caused a fatal defect in the chain of title. If they wanted to stay out of trouble all they had to do was name the Trust on the note and mortgage or the assignment and record it as such. But they didn’t because they were playing with OPM (Other people’s money) and they still are playing the same game.

Residential funding gets into trouble. This is a very worthwhile read:


I wanted to share some excerpts from a recent foreclosure trial. These things are not for the feint of heart. The risks are huge….for the homeowner…and the deck is often stacked against us. It’s like walking into a gunfight armed with nothing but a switchblade. But it reveal quite a bit about the foreclosure process in Florida, about foreclosure defense, foreclosure laws and shows that foreclosure defense is not about foreclosure delay, but showing the facts in how a foreclosure defense attorney can win a foreclosure case.

Most foreclosure cases are very technically difficult for the Plaintiff, if a judge wants to fairly apply the rules of evidence and procedure…

if a judge wants to fairly apply the rules of evidence and procedure

This is the real challenge in a foreclosure trial….getting the court to believe that a homeowner in foreclosure is entitled to the same due process protections as an accused child molester or murder. Put more plainly, most rulings by a judge are judgment calls and far too often, what we see in foreclosure is the calls falling in favor of the banks. The challenge is getting a judge to believe he owes just as much due process to my clients, as he would to those who are accused of the most heinous crimes.

And now onto the foreclosure trial, starting with the bank witness:

Q And have you had the opportunity to review all
12 of the relevant documents and business records associated
13 with this specific loan and the present foreclosure
14 action?
15 A Yes.
16 Q And what are the sum of the records that you
17 reviewed?
18 A I reviewed the copy of the note, the mortgage,
19 the payment history, the final judgment, the breach
20 letter and the J-fix (ph.).
21 Q And all of the records that you just mentioned
22 are made at or near the time of the event they are
23 created. Correct?
24 A Yes.
25 MR. WEIDNER: Objection. Foundation, your

2 THE COURT: Sustained. You will have to
3 indicate in what fashion they have been
4 substantiated, having been made at or near the time
5 that’s at issue.
6 Q (BY MS. ARENAS:) Okay. Let me rephrase the
7 question. Are these documents kept in the ordinary
8 course of your company’s business records?
9 A Yes.
10 MR. WEIDNER: Objection. Foundation. What
11 documents is she referring to?
12 THE COURT: Well, I think –
13 MS. ARENAS: I’ll withdraw the question. I’ll
14 withdraw the question, your Honor, and move straight
15 to the –
16 THE COURT: Okay.
17 Q (BY MS. ARENAS:) I’m handing you a document
18 right now. Can you tell me what this document is?
19 A This is a copy of the original note executed on
20 July 14, 2006, recorded in –
21 MR. WEIDNER: Objection. Foundation, hearsay,
22 authenticity, your Honor. I further object to the
23 witness, who appears to be reviewing the screen. If
24 she’s going to testify as to matters, those need to
25 be entered into record.

A witness cannot sit on a stand using “secretive” testimony, hiding what she’s doing from the court

MS. ARENAS: Your Honor, she’s not testifying
2 from the screen. She’s looking at the document.
3 THE COURT: If you can shut the screen down
4 just for the — that’s fine — not all the way, if
5 you don’t want to shut the computer off. Okay.

A court cannot ignore basic law anymore than it should ignore rules or procedure

6 MR. WEIDNER: Your Honor, I’m going to point to
7 — we’ll get straight to it. I’m going to point to
8 the specific objection, it’s that document that is
9 sitting before the witness right there, and be real
10 clear about what my objection is. May I voir dire
11 for two sentences?
12 THE COURT: Okay. Well, you said that you were
13 going to be real clear about your objection, so why
14 don’t you be real clear about your objection.
15 MR. WEIDNER: Quite plainly, your Honor, that
16 document is endorsed to a party other than the named
17 plaintiff.
18 A case just came out of the Fourth DCA. May I
19 approach and hand the Court what is marked as Dixon,
20 D-I-X-O-N, vs. Express Lending. That cite is
21 1D10-2127.
22 Reading from that highlighted portion there,
23 your Honor, the case that is before this court is
24 almost precisely what was before the court there in
25 Dixon, your Honor. That document that is before the court,

the note that they’re trying to introduce, is
2 made payable to another party. Because there is a
3 specific endorsement in there in favor of
4 Residential Credit, this witness can’t get that
5 document in.

This Judge, a very good judge, get’s it and knows the Plaintiff’s case is over right here.

6 THE COURT: Okay. Response.

7 MS. ARENAS: Your Honor, the actual original
8 note is with the court file. It is a
9 self-authenticating document. We still are entitled
10 to enforce under 673.3001. We can argue that we are
11 the non-holder in possession with the rights of a
12 holder.
13 THE COURT: Response.
14 MR. WEIDNER: Absolutely not, your Honor. When
15 there is a specific endorsement on that original
16 note that is before the court that I inspected, the
17 only party that can enforce that note is the party
18 to whom that note is payable.
19 THE COURT: Okay. Well, let’s see what our
20 note says here.
21 MR. WEIDNER: And just so the record is clear,
22 there is a promissory note there which is made
23 payable to the original lender. That note,
24 miraculously, subsequently appeared, some allonge,
25 which are not affixed to the note precisely as they should be, as the court tells us in Booker — that’s
2 a Second DCA case. But if you’re flipping through
3 the file there, you see that that note contains
4 what, for purposes of discussion we’ll articulate
5 and identify as an original promissory note, in the
6 of case Booker vs. Sarasota articulates that an
7 allonge must be affixed, permanently affixed is the
8 language that Booker uses, and it’s not.
9 The reason why you’re having a problem finding
10 the note, your Honor, is that there was a subsequent
11 filing in 2012, I believe it is, of the note.
12 Another objection we get to later is that there
13 was not even a copy of the note attached to the
14 complaint, but that’s getting ahead of us. Right
15 now, we’re just looking at the document they’re
16 trying to use to make their case. I assert they
17 can’t get off first base with it.
18 THE COURT: Well, let’s see here –
19 MS. ARENAS: Your Honor –
20 THE COURT: — the note here — the adjustable
21 rate note, which is Exhibit No. 1 to the Complaint,
22 I take it –
23 MS. ARENAS: There is no subsequent filing,
24 your Honor. Everything was filed July 26th of this
25 year. It’s the last –

THE COURT: The note date says July 14, 2006.
2 Is that what we’re talking about?
3 MS. ARENAS: Yes, your Honor.

This Judge really gets it and he’s trying to help the plaintiff understand they’re sunk.

4 THE COURT: Okay. Here is the original. Then
5 there is an allonge to the note that says is paid to
6 the order of Residential Funding Corporation.
7 Correct?
8 MS. ARENAS: Yes.
9 THE COURT: Okay. So how does Aurora get into
10 this?
11 MS. ARENAS: I’m sorry?
12 THE COURT: How do we get Aurora into this as a
13 party plaintiff?
14 THE WITNESS: Can I answer that, your Honor?
15 THE COURT: Yeah.
16 MR. WEIDNER: Well, let me object here.
17 THE COURT: Well, wait a minute. I want to
18 hear from her. She seems to know something.
19 MR. WEIDNER: The reason why I want to
20 interpose an objection right now is she has no
21 evidence. She’s going to provide some hearsay
22 testimony.
23 THE COURT: Well, I’m going to listen to her
24 testimony, and you can object to it being hearsay.
25 MR. WEIDNER: Yes, sir

Here, the witness tries to confuse and mix things around..I’ve got to keep her focused on the questions.

THE WITNESS: Your Honor, we are the servicer
2 for this. Aurora was the previous servicer for the
3 loan. I am a previous Aurora employee; now a
4 Nationstar employee, which service transfer took
5 place from Aurora on July 2012 to Nationstar. So
6 Aurora was the previous servicer for this note, and
7 we are entitled to enforce the note as the servicer,
8 as the holder, and not the owner of the note.
9 MS. ARENAS: Additionally, your Honor, the
10 record is clear there is an order granting our
11 motion to substitute party plaintiff into
12 Nationstar.
13 THE COURT: Is that correct?
14 MR. WEIDNER: There is, but we’re mixing all
15 things together here. We didn’t even get to my
16 arguments over whether the party that’s sitting
17 before the court is a proper party. You will note
18 that the witness did not articulate anything about
19 Residential Funding. She cannot articulate anything
20 about Residential Funding. She cannot make any
21 statements regarding Residential Funding. What she
22 was making was self-serving, hearsay statements,
23 which are contradicted by the record.
24 MS. ARENAS: Objection, your Honor. The note
25 is a self-authenticating document. There is no hearsay statement.
2 MR. WEIDNER: I’m making argument. You’re
3 objecting to my argument?
4 THE COURT: Let him finish.
5 MR. WEIDNER: I have a folder full of agency
6 cases, because we do encounter this from time to
7 time.
8 THE COURT: Well, I appreciate that, but go
9 ahead with your argument. As opposed to referring
10 to what you have, tell me what it says.

The judge gets the facts and the evidence he wants to see, he keeps his courtroom in control and focuses all the parties.

11 MR. WEIDNER: You have got an original note 12 there, your Honor. The case law could not be more
13 explicit — most recently, a little over a month
14 ago. The only party that is entitled to enforce
15 that document that you are holding in your hand is
16 Residential Credit, period. And I know from –
17 THE COURT: Residential Funding?
18 MR. WEIDNER: Residential Funding, yes, sir.
19 It is a specially endorsed note. The Uniform
20 Commercial Code is explicitly clear. Residential
21 Funding is the only party that can enforce it.
22 THE COURT: Well, the opinion here is that if
23 an endorsement is made by a holder of an instrument,
24 whether payable to an identified person or payable
25 to bearer and the endorsement identifies a person towhom it makes the instrument payable, it is a
2 special endorsement. When specially endorsed, an
3 instrument becomes payable to the identified person
4 and may be negotiated only by the endorsement of
5 that person.
6 Now, where do we have something that
7 Residential Funding Corporation is the successor, to
8 the extent that it has been by endorsement, made to
9 the person — made to that entity, for purposes of
10 this being brought before the court.
11 MR. WEIDNER: We absolutely don’t.
12 THE COURT: I didn’t ask you that. I asked
13 them that. If you want to answer and help them, go
14 ahead.
15 MR. WEIDNER: They absolutely don’t have it.

This is not correct, and I take exception, but I’m not sure it’s intentionally misleading.

16 MS. ARENAS: Your Honor, there is no
17 requirement for a promissory note or a mortgage to
18 be transferred by an assignment. The actual
19 physical possession of the note alone gives us
20 standing. There is — although I have not read that
21 case, nor was I provided it by opposing counsel
22 prior to the trial –
23 MR. WEIDNER: I provided opposing counsel, your
24 Honor.
25 MS. ARENAS: I don’t have time to read that right now during trial, your Honor. I apologize. I
2 am not prepared for this case, that specific case.
3 However, there is case law that says physical
4 possession alone entitles you to enforce the note.
5 That gives you standing there. We are not coming as
6 holder. Again, because it is specifically endorsed,
7 we would be the non-holder in possession with rights
8 as a holder.

And here the judge bends backwards to try and save the Plaintiff….But here’s where defendant’s preparation works

9 THE COURT: Well, the next issue is, was this
10 raised as a defense.
11 MR. WEIDNER: Yes, your Honor.
12 MS. ARENAS: No, your Honor. There is very,
13 very general affirmative defenses filed, actually by
14 counsel’s predecessor, stating as to standing.
15 However, it does not say anything about specific
16 endorsements.
17 MR. WEIDNER: That’s a standing argument.
18 First of all, we need to correct some misstatements
19 that counsel made, I believe unintentionally.
20 The Uniform Commercial Code is clear that a
21 note, a negotiable instrument with blank
22 endorsement, may entitle a party in possession to
23 enforce. The Uniform Commercial Code is, likewise,
24 equally clear that when there’s a special
25 endorsement, only the party to whom the instrument is endorsed may enforce the obligation.

Good case law that is on my side, that boxes the plaintiff in…

2 THE COURT: Well, I’ll be happy to let you take
3 a look at this case, but this seems to be rather on
4 point. When you have a specific endorsement and
5 then you don’t have anything that indicates that
6 that’s the entity that is pursuing the foreclosure,
7 that that’s not going to cut it.
8 MS. ARENAS: Your Honor –
9 THE COURT: I understand you have some argument
10 that if they’re just in possession of the note that
11 that’s enough, but I don’t see how that comports
12 with this, nor do I see any law that supports that.
13 MS. ARENAS: Your Honor, if I had time, if I
14 knew this — I feel I’m being surprised today, on
15 the day of trial, and a little bit put in the
16 situation of being prejudiced here, as there are
17 many cases that will rebut this case stating exactly
18 what I’m arguing.
19 THE COURT: Well, it says an affirmative
20 defense, lack of standing. That’s rather specific.
21 Affirmative defense. Failure to show the
22 plaintiff is the owner and holder of a promissory
23 note and mortgage.
24 MS. ARENAS: We did show –
25 THE COURT: That’s rather specific.

And now, the plaintiff, who is in trouble…is digging deep.

MS. ARENAS: Agreed, your Honor. However, we
2 have shown that by filing the original note with the
3 court that we are in possession of.
4 THE COURT: But that original note is endorsed
5 over to — what is the name again?
6 MR. WEIDNER: Residential –
7 THE COURT: Residential Funding Corporation.
8 And they’re not a party in this case.
9 MS. ARENAS: Perhaps I — no, they’re not a
10 party in this case, your Honor.

And now this is really what case is all about….THE PLAINTIFF IS NOT ENTITLED TO FORECLOSE ON THIS HOME

11 THE COURT: Okay. Well, I suggest you have two
12 alternatives. One, there may be an appropriate
13 non-suit that you might elect; or two, this isn’t
14 going to go very far, unless you have some testimony
15 that they are the successor to this note in a
16 fashion or form that indicates that on the record,
17 not just that they’re holding it.
18 MS. ARENAS: Your Honor, there is nothing other
19 than testimony of my client, which you have heard.
20 THE COURT: Okay. Then I’m going to grant the
21 standing objection to the questions that are
22 designed to prove that Aurora is the holder of the
23 note.

This attorney is doing the best she can…it’s not her fault her case is bad…and the judge is going to try to help her

2 MS. ARENAS: Again, your Honor, had I prepared
3 that prior to two seconds ago, I would be able to
4 rebut that issue or this case.
5 THE COURT: Well, we can do a number things,
6 possibly even continue the hearing of this matter.
7 MR. WEIDNER: And we would object to that, your
8 Honor.
9 THE COURT: But these matters were raised by
10 affirmative defense specifically as to standing, so
11 it’s whether you want to proceed now with the court
12 going to sustain the objections or whether you want
13 to take some other alternative action.
14 MS. ARENAS: Your Honor, at this point, I
15 believe that we would be able to move forward if I
16 was properly prepared. A continuance might be the
17 best route.
18 THE COURT: So what are you asking the court?
19 MS. ARENAS: If we may continue this matter for
20 30 days.
21 MR. WEIDNER: Your Honor, I’ll just object on
22 the record. The case law clear. It’s prejudicial
23 to my client. We’re not agreeing to that, and they
24 can’t fix it anyway.
25 MS. ARENAS: It’s not prejudicial to his client. The last time we were here, your Honor,
2 they moved for a continuance, and it was granted.
3 MR. WEIDNER: The trial has started today.
4 THE COURT: Well, that’s the other thing I’m
5 concerned about. The trial has started. It’s not a
6 criminal case where jeopardy is attached.
7 MR. WEIDNER: Your Honor, the case law is very
8 clear, because what would be occurring here is an
9 attempt to fix a fundamental problem which cannot be
10 fixed; make the record real clear here.
11 MS. ARENAS: I’m not trying to fix it.
12 THE COURT: I don’t know that something can’t
13 be fixed, unless that’s the situation that we can
14 find. I tend to think there is a problem here, and
15 the problem is that there is going to have to be
16 some chain showing to show the entitlement of
17 plaintiff with standing. And we don’t have that
18 here, because this has been assigned or paid to the
19 order of, endorsed over to a party who is not before
20 the court or an entity that is not before the court
21 as a party.
22 I’m going to deny the motion to continue.
23 Now, what do you want to do?

Again, the judge recognizing their problem, tries to help them

24 MS. ARENAS: Could I just have a minute to
25 confer with my client, your Honor?


(This was actually a very, very long pause in an open courtroom)

3 MS. ARENAS: Your Honor, I would like to just
4 state on the record again that this case does not
5 speak to 673.3011, as we are coming as a non-holder
6 in possession with rights of a holder. It doesn’t
7 mention 673 at all.
8 So based on that fact, and that I do believe we
9 do still have standing, we can prove that payments
10 were made to the plaintiff. Why would they pay my
11 client if they don’t have standing to bring this
12 action? It’s been in default now for five years.

This is just wrong, wrong, wrong…but what more can I do?

13 MR. WEIDNER: Objection.
14 THE COURT: Okay. Well, you know, I will let
15 you go and put on the record what you want. I think
16 counsel has raised the issue of standing.
17 Now, if this witness is going to testify as to
18 payments, the only holder of the note that’s
19 disclosed in the four corners of this complaint in
20 the court file is an entity that is not before the
21 court.
22 MS. ARENAS: Again, your Honor, to put on
23 record, we’re not arguing as the holder here.
24 THE COURT: I understand. And I’ll let you
25 proceed. Go ahead. But we’re not going to identify the plaintiff as the holder in this case, unless
2 there is some proof that there is an endorsement
3 that indicates that.
4 MS. ARENAS: Your Honor, there is other
5 evidence that I can provide to the court –
6 THE COURT: Okay. Go right ahead.
7 MS. ARENAS: — that would indicate they are
8 the correct party here.
9 THE COURT: Okay. I’ll let you proceed.
10 MS. ARENAS: Just to be clear, your Honor, you
11 are not receiving the original note into evidence.
12 Is that correct?
13 THE COURT: That’s correct, because it does not
14 show that you’re the holder of that note from the
15 standpoint of any endorsement having been made to
16 your client.

What exactly is a “business record” and how doe it get into a foreclosure trial?

17 Q (BY MS. ARENAS:) I’m handing you another
18 document now. Are you familiar with this document
19 labeled Exhibit 1? — I mean Exhibit 2, I’m sorry.
20 A Yes, I am. This is a copy of the original
21 mortgage recorded in Pinellas County, Florida, instrument
22 number –
23 Q Stop.
24 MR. WEIDNER: And I’m going to object to that
25 foundation. THE COURT: What is your objection?
2 MR. WEIDNER: Foundation. The witness has no
3 relevant testimony that she can base that testimony
4 on.
5 THE COURT: Overruled.
6 Go ahead. You’ll have to show a foundation.
7 Q (BY MS. ARENAS:) Is this record made at or
8 near the time of the event?
9 MR. WEIDNER: Objection. Foundation. Hearsay.
10 THE COURT: Okay. Is she’s saying that she was
11 familiar with the business records of the original?
12 MS. ARENAS: I’m getting there, yes.
13 THE COURT: Okay. Then I’ll let you proceed.
14 Go ahead.
15 Q (BY MS. ARENAS:) Was this made by or from a
16 person with knowledge at the time –
17 MR. WEIDNER: Objection. Foundation. Hearsay.
18 MS. ARENAS: Your Honor –
19 THE COURT: Overruled.
20 Go ahead.
21 A Yes.
22 Q (BY MS. ARENAS:) And –
23 THE COURT: Excuse me. And who was that? Who
24 was that person?
25 THE WITNESS: The person with knowledge, your Honor?
3 THE WITNESS: An employee of Nationstar and
4 Aurora.
5 THE COURT: And are you that person?
6 THE WITNESS: No, your Honor.
7 THE COURT: Have you spoken to that person?
8 THE WITNESS: I reviewed our business records,
9 your Honor, with the system of record that we use
10 that keep all of our records.
11 THE COURT: Okay. What about their business
12 records?
13 THE WITNESS: Aurora’s business records?
14 THE COURT: Yes.
15 THE WITNESS: Yes, your Honor. They’re part of
16 the service transfer.
17 THE COURT: Okay. You reviewed their business
18 records?
20 THE COURT: And how did you determine, on
21 review of that, that those records were made in the
22 ordinary course of business?
23 THE WITNESS: Because of the way that our
24 service transfer takes place, your Honor, those
25 records are comported through our computer system, the L-stamp (phonetic) system which we use, which is
2 the system of record for most servicing. It comes
3 over with that information. The information is then
4 transported into the computer with a person of
5 knowledge. I don’t know who that person is because
6 I do not work in that department, but our records
7 are kept using this system of record, your Honor.
8 MR. WEIDNER: Just for the record, I’m
9 objecting to all the hearsay within hearsay
10 foundation.
11 THE COURT: Sustained.
12 She’s obviously not the custodian of the
13 business records of the original party that granted
14 the mortgage.
15 MS. ARENAS: Your Honor, it’s an exception to
16 the hearsay rule as a business record.
17 THE COURT: It is, that’s true, but –
18 MS. ARENAS: To get it in as a business record.
19 THE COURT: — they have to be the custodian of
20 those business records, not just their own business
21 records.
22 MS. ARENAS: By reviewing the records, those
23 records now are a part of her record as well.
24 MR. WEIDNER: Objection.
25 MS. ARENAS: That’s what she just testified to.

THE COURT: Okay. I’m going to sustain the
2 objection.
3 Q (BY MS. ARENAS:) Are the records of Aurora now
4 a part of your records and you were able to review them
5 before coming to court today?
6 A Yes.
7 MR. WEIDNER: Objection. Foundation.
8 THE COURT: What’s the foundation?
9 MS. ARENAS: Your Honor, I’m trying to
10 establish that these are kept in the ordinary course
11 of their business.
12 THE COURT: In whose business?
13 MS. ARENAS: Nationstar, the plaintiff in this
14 case.
15 THE COURT: You’re saying that the records of
16 the original mortgage lender are the business
17 records of Aurora?
18 MS. ARENAS: That’s correct.
19 THE COURT: And I sustain the objection,
20 because this person was never connected with the
21 original lender and they cannot testify –
22 MS. ARENAS: She just testified as to the
23 transfer.
24 THE COURT: Exactly, the transfer — but not of
25 those original business records were prepared. And even if — and how they were prepared in the
2 ordinary course of business. She’s looking at
3 records that were transferred to her that were done
4 by someone with a different company that she wasn’t
5 affiliated with, and the Court finds that that’s not
6 admissible to prove up those business records.
7 MS. ARENAS: Your Honor, case law would suggest
8 that it is, as they are all kept under the same
9 standards and policies of a servicer, as a lender.
10 They all use the same, actually the same — she
11 just testified that they use the same computer
12 system.
13 MR. WEIDNER: I need to interpose another
14 objection. Counsel continues to make references to
15 quote, unquote, business records and are referring
16 to documents which are clearly not before the court.
17 There is nothing before the court to base counsel’s
18 statements on, much less a witness’s statements,
19 about what business records they are even talking
20 about.

This is a whole lot about what the entire case comes down to….

6 THE COURT: Cross-examination.
7 MR. WEIDNER: The mortgage has not been
8 introduced. Accepted into evidence, your Honor.
9 The witness can’t authenticate that document. There
10 is no foundation for it. Even if the Court takes
11 judicial notice, there is no foundation for that,
12 either. It’s not in. I don’t need to cross-examine
13 her on it.
14 MS. ARENAS: It was moved into evidence, your
15 Honor. You accepted it as judicial notice.
16 THE COURT: I’ve taken judicial notice that
17 it’s recorded. That was what you requested, that I
18 take judicial notice that it was recorded in the
19 public records of Pinellas County, Florida; and
20 finding that counsel did not have any good-faith
21 objection to that assertion, I accepted that. So I
22 have taken judicial notice of the fact that it is
23 recorded in the public records of this county.
24 MS. ARENAS: Okay. We’d like to then introduce
25 a copy of the original mortgage into evidence as plaintiff’s exhibit.
2 THE COURT: Okay.
3 MR. WEIDNER: I stated for the record the
4 objection. You have already sustained the
5 objection. They can’t introduce it into evidence.
6 THE COURT: You’re introducing this as your
7 client being the holder of this mortgage. Is that
8 correct?
9 MS. ARENAS: No, your Honor.
10 THE COURT: Just the mortgage, that it exists?
11 MS. ARENAS: Yes.
12 THE COURT: Not in favor of your client?
13 MS. ARENAS: That there is a lien on this
14 property, as she testified.
15 THE COURT: Okay. I’ll receive it for the
16 purpose of showing that it exists as a mortgage.
17 MS. ARENAS: Okay. Thank you, your Honor.
18 MR. WEIDNER: Subject to the exclusion, making
19 clear the objection as to its evidentiary value. I
20 recognize it’s — I’ll voir dire — well, it’s not
21 necessary.
22 THE COURT: Good. Then it’s received.
24 MS. ARENAS: I’m handing you another document
25 here.

MR. WEIDNER: And I’d like a copy of that so
2 that the judge can see it so I can make my
3 objections regarding that document.
4 MS. ARENAS: I don’t have another copy. I did
5 provide it to you prior.
6 THE COURT: What document are we talking about?
7 Q (BY MS. ARENAS:) Can you tell us what that
8 document is?
9 A This is our acceleration letter.
10 MR. WEIDNER: Approaching the Court, your
11 Honor. I’m handing you what I believe they are
12 trying to introduce in. It’s a default letter that
13 was e-mailed to me earlier today.
14 THE COURT: Go ahead.
15 Q (BY MS. ARENAS:) Could you explain the purpose
16 of this letter?
17 MR. WEIDNER: Objection, your Honor. The
18 witness has shown no connection to this document and
19 can’t explain the purpose of it until she can
20 establish a foundation for the testimony.
21 THE COURT: Okay. Please establish some type
22 of connection between this witness and that letter.
23 Q (BY MS. ARENAS:) Is this letter kept in the
24 ordinary course of your company’s business records?
25 A Yes, it is.

MR. WEIDNER: Objection. Foundation.
2 Hearsay. Authenticity. Let me make the record
3 clear about the document, your Honor. What the
4 witness is looking at is a printout. There is no
5 evidence that that letter was actually sent. That
6 is not the best evidence. If anything was ever sent
7 by anybody, as the Court has properly recognized,
8 this party has no connection to the original
9 creditor.
10 THE COURT: Okay. I’m going to let counsel
11 proffer the testimony concerning this and then I’ll
12 revisit this. Go ahead.
13 Q (BY MS. ARENAS:) Was this record made at or
14 near the time of the event?
15 A Yes.
16 Q And was it made by a person with knowledge at
17 the time of the event?
18 A Yes.
19 MR. WEIDNER: Objection. Foundation.
20 THE COURT: Go ahead. Proffer the testimony.
21 Q (BY MS. ARENAS:) Is it kept in your company as
22 regular — I’m sorry, is it your company’s regular
23 practice to keep these business records?
24 A Yes.

8 MR. WEIDNER: Objection, your Honor.
9 Foundation as to testimony; making statements that
10 aren’t related to that document and are not part of
11 the record.
12 THE COURT: Well, we get back to the standing
13 issue in this case. Obviously, this acceleration
14 letter is one that was authored by Aurora Loan
15 Services, and the problem that we have is that the
16 underlying debt instrument, which is the note,
17 doesn’t get to Aurora Loan Services. The last
18 endorsement is a specific endorsement to Residential
19 — Residential I think is the name –
20 MR. WEIDNER: Residential Credit.
21 THE WITNESS: Residential Funding.
22 THE COURT: Thank you.
23 How do we get this to Aurora?
24 MS. ARENAS: Your Honor, no further questions
25 for this witness.

4 Q Have you ever worked at Residential Funding
5 Corporation?
6 A No, I did not.
7 Q Have you ever met with any employees with
8 Residential Funding Corporation?
9 A No, I have not.
10 MR. WEIDNER: No further questions, your Honor.

11 THE COURT: Okay. Anything further of this
12 witness?
13 MS. ARENAS: No, your Honor.
14 THE COURT: Thank you. Call your next witness.

THE COURT: You may inquire.
5 MS. ARENAS: Thank you, your Honor.
6 MR. WEIDNER: Just to start, your Honor, I’m
7 going to object to any questioning regarding an
8 obligation which this plaintiff has not proven they
9 have the right to come to court to try to enforce.
10 THE COURT: Okay. Well, feel free to reassert
11 that after counsel has proffered the testimony of
12 this witness.
13 Go ahead.

You really cannot treat an elderly, sick woman as a hostile witness….

14 MS. ARENAS: Your Honor, I’d like to ask the 15 Court’s permission to treat the witness as hostile, 16 as she is a party to this case. 17 MR. WEIDNER: I’d object to that, but – 18 MS. ARENAS: The rule clearly – 19 THE COURT: Assuming there is some evidence of 20 that, I’ll permit you to ask leading questions. 21 MS. ARENAS: Your Honor, there is an amendment 22 to the rule that provides that – 23 THE COURT: Ma’am, I told you, if she shows 24 something in the way of antagonism to you, you will 25 be permitted to ask leading questions.

MS. ARENAS: No further questions, your Honor.
2 THE COURT: Cross-examination.
3 MR. WEIDNER: I have no questions of my
4 witness, your Honor.
5 THE COURT: Thank you, ma’am. You may stand
6 down. Call your next witness.
7 MS. ARENAS: No witnesses from the plaintiff,
8 your Honor.
9 THE COURT: Okay. We’ll hear your closings –
10 or do you have a motion?
11 MR. WEIDNER: I moved for directed verdict.
12 There has been absolutely no evidence that this
13 party is entitled to enforce the documents of the
14 obligations before the court.

THE COURT: The endorsement on the note is to
25 Residential Funding Corporation. Residential Funding Corporation is not a party to this action.
2 The party to this action is Aurora Loan Services,
3 LLC. There is no chain that indicates that Aurora
4 is the holder of this note, to the extent that it
5 has standing to bring this foreclosure action.
6 Therefore, the motion for directed verdict is
7 granted. The court directs a verdict in favor of
8 the defendants.
9 You can prepare a judgment accordingly.

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

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

Farmington Hills exec David Trott declares candidacy for Bentivolio’s U.S. House seat
By Chad Halcom

David Trott
David Trott, chairman and CEO of Farmington Hills-based Trott & Trott PC and owner of related companies Attorneys Title Agency LLC and National Default Exchange, announced today he is a candidate to replace U.S. Rep. Kerry Bentivolio in Michigan’s 11th congressional district.

Trott, a Republican, will likely appear on the Aug. 5, 2014, Republican primary ballot as a candidate against Bentivolio, who lost a partial term election last November to Democrat David Curson, but won a separate election to a full two-year term in the seat for southwestern Oakland County and northwestern Wayne County.

Bentivolio is expected to seek a second term in November 2014, but Bentivolio communications director Matt Chisholm could not be immediately reached for comment.

Campaign co-chairs for Trott will be former state Senate Majority Leader Mike Bishop, Wayne County Commissioner Laura Cox, Former Congressional candidate Rocky Raczkowski, and Ronna Romney McDaniel.

“I am honored and humbled by the co-chairs’ encouragement and by the outpouring of support we have received this morning,” Trott said in a statement Wednesday.

“The phones have been ringing off the hook from activists all over the district with varying opinions on how we get Washington out of the way to get our country back on track – I am eager to hear from every voter and encourage them to connect with our team on how they can get involved.”

Bentivolio drew national media attention and political criticism in late August for saying at a Republican town hall meeting it would be a “dream come true” to write a bill calling for President Obama’s impeachment and that he has conferred with attorneys on the subject.

But Megan Piwowar, a campaign manager for Trott for Congress Inc., said the timing of the announcement is not related to Bentivolio’s recent statements.

Trott & Trott represents lenders in foreclosure, litigation and bankruptcy services for clients such as the Federal National Mortgage Association or Fannie Mae, JP Morgan Chase Bank NA, Wells Fargo Home Mortgage and Comerica Bank.

The former Compuware Corp. headquarters building, which Trott acquired in 2007, also houses other Trott companies including Attorneys Title Agency LLC. The title company covers subsidiaries Philip R. Seaver Title Co. Inc. in Bloomfield Hills, Greco Title Co. in Mt. Clemens, Midstate Title Agency LLC in Lansing and the assets of Columbus-based Talon Title Agency of Central Ohio Inc., acquired earlier this year.

“David Trott has gotten rich by helping to kick Michigan’s middle class families out of their homes, and somehow thinks he deserves a promotion for it,” Chairman Lon Johnson of the Michigan Democratic Party said in a statement Wednesday on Trott’s candidacy. “With a record of profiting from the misery of Michigan’s families who were hurt by the Wall Street crash, David Trott would only enable predatory lenders and Wall Street fat cats – which is why he cannot win a primary election, much less a general election.”

The Democratic party has been actively recruiting possible contenders for the 2014 district election, but so far none have come forward and declared their candidacy.

Trott has an undergraduate degree from the University of Michigan and a law degree from Duke University. He and his wife, Kappy, have three children and live in Birmingham.

10. July 2013

Bernhardt’s Take on Jolley, Scott and West v JP Morgan Chase‏

Bernhardt Analysis of Jolley, Scott and West v JP Morgan Chase cases[1]

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

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

28. June 2013

Cal. Commercial Code doesn’t apply to mortgages and foreclosures‏

From an attorney on my mailing list (attachments I dug up):



Just a reminder—

The short answer to whether the California Commercial Code applies to mortgages and foreclosures in this State is contained in California Civil Code sec. 2944: 

“None of the provisions of this chapter [refers to Civl Code, Title 14, Chapt. 2, Mortgages, §§ 2920-2967] applies to any transaction or security interest governed by the Commercial Code, except to the extent made applicable by reasons of an election made by the secured party pursuant to subparagraph (B) of paragraph (1) of Section 9604 of the Commercial Code.”  [Civ. Code § 2944, added in 1964.]

[Note—Com Code 9604(a) concerns obligations secured by an interest in personal property or fixtures that is also secured by an interest or estate in real property; 9604(1)(1)(B) deals with how to proceed against real and/or personal property securing the rights of the secured party.’

The inapplicability of the Commercial Code is useful if you have a servicer claiming authority to enforce a note or power of sale in a deed of trust on the basis of some provision of the Commercial Code, or someone is using the Commercial Code to support an argument that a note is validly transferred by an indorsement in blank.

5. April 2013

Lack of Standing – Failing…More courts reject eleventh-hour attempts to avoid foreclosure based on an alleged lack of standing

Subject: Lack of Standing – Failing
Date: Fri, 5 Apr 2013 04:59:44 -0700

Another trend I’m seeing in the cases I’m working on, although in California, the Courts are using the “standing” (and the “show me the note”, “tender”) issue to cover a far more broad base than is alleged in the complaints I’m drafting.  The courts are phrasing their rubber-stamped/copy-and-paste rulings and pat arguments, twisting or ignoring the facts, causes of action and allegations to fit their argument justifying ruling against the clients (more recently, sustaining demurrers without leave to amend) whether or not the case citations apply (they usually do not.)  Given the recent similarities seen in different cases in different courts in California; to me it is just too much of a coincidence that different judges are making the same flawed arguments and rulings to not be collaborating or conspiring in some way.  The “banksters’” lawyers rarely have to say a thing because the judges are doing their work for them.  Charles

More courts reject eleventh-hour attempts to avoid foreclosure based on an alleged lack of standing

  • Porzio Bromberg & Newman PC
  • Peter J. Gallagher
  • USA
  • March 28 2013

Two more Appellate Division panels have refused to allow defendant’s in foreclosure lawsuits to raise standing as an eleventh-hour defense.  As we previously reported — Changing Tide in Forclosure Litigation? Courts Taking Closer Look When Defendants Assert Lack Of Standing At Last Minute — there is now a clear trend against allowing defendants to stay silent in the face of a foreclosure lawsuit only to appear at the last minute, usually on the eve of a sheriff’s sale, and seek to vacate final judgment based on an alleged lack of standing to foreclose.  Two recent Appellate Division cases continue to bring this point home.

In IndyMac Bank FSB v. DeCastro, a residential borrower moved to vacate final judgment and dismiss the complaint 15 months after it was entered, arguing that he was not served with the complaint.  The motion was denied.  Defendant filed a second motion to vacate, arguing, for the first time, that the bank lacked standing to foreclose because it was not assigned the mortgage until after the complaint was filed.  This motion was denied as untimely and defendant appealed.  In an opinion, dated March 13, 2013, the Appellate Division affirmed.  In its decision, among other things, the Appellate Division rejected defendant’s standing argument, noting: “[W]e have now made clear that lack of standing is not a meritorious defense to a foreclosure complaint.”  Moreover, the Appellate Division held that defendant’s standing argument was meritless “particularly given defendant’s unexcused, years-long delay in asserting that defense or any other claim.”  In arriving at this decision, the Appellate Division relied on many of the cases discussed in our prior post.

Similarly, in WellsFargo Bank, N.A. v. Lopez, a different Appellate Division panel rejected another residential home owner’s last-minute attempt to raise standing as a defense to the foreclosure complaint.  The facts in that case were a bit more egregious because the borrower contributed to the four-year delay between the entry of default and the filing of his motion to vacate by filing numerous bankruptcy petitions and seeking a stay to attempt to short sell the property.  Nonetheless, the Appellate Division affirmed the trial court’s denial of the motion to vacate holding, among other things, that the lack of standing, even if true, was not a meritorious defense to a foreclosure complaint, particularly in the post-judgment context.  Again, the Appellate Division relied primarily on the cases included in our prior post.


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

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

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