Global Literary Marketplace Foreclosure Fraud Defense by Grace Adams

26. October 2013

Input on HOLA‏

Anyone have experience with a demurrer claiming claims related to “securitization of the loan are preempted by HOLA? This is a new one on me. I have a demurrer to deal with this issue (California State Case).

“Plaintiffs’ allegations as to Defendants are partially related to the securitization of the loan and Defendants’ standing to commence foreclosure. In that regard, all of Plaintiffs’ claims relative to the securitization are preempted by the Home Owners Loan Act (“HOLA”) and fail as a matter of law. Despite Plaintiffs’ allegations regarding Defendants’ authority under the subject loan, Plaintiffs’ also contradictorily contend that Defendants’ failed to provide Plaintiffs with a loan modification.”

IV. PLAINTIFFS’ CLAIMS RELATED TO THE SECURITIZATION OF THE LOAN ARE PREEMPTED BY HOLA

Plaintiffs contend that, because the interests in the Note and the Deed of Trust were sold and securitized into a trust, Defendants do not have authority to commence foreclosure. Complaint, ¶36-49. However, Plaintiffs’ contention fails as a matter of law in that any such claims are preempted by the Home Owners Loan Act (“HOLA”).

Section 560.2(b)(10) states that “the types of state laws preempted by [§560.2(a) ] of this section include, without limitation, state laws purporting to impose requirements regarding …[p]rocessing, origination, servicing, sale or purchase of, or investment or participation in, mortgages.” 12 C.F.R. § 560.2(b)(10) (emphasis added). As in this case, the plaintiffs in Hague v. Wells Fargo Bank, 2011 WL 6055759 (N.D.Cal. 2011) sought to challenge the securitization of the loan and whether the REMIC securitization would alter the interest held by virtue of the Note and the Deed of Trust. Id at *5. The Court in Hague found that the securitization of the note does not alter the note and that HOLA preempted such claims. Id.

>Their own quote is emphasized as if they do not have a clue that assigning a deed of trust is hardly the “sale or purchase of, or investment or participation in, mortgages”. These guys seem to be getting more and more bazaar reaching for crap I guess they expect either no one will read or the judges are just too stupid to understand (but I digress…) Too weird…and we’ve got to respond to this garbage?!< Notwithstanding, Plaintiffs base their securitization argument on the notion that the interests in the Note and Deed of Trust were not assigned in compliance with the “PSA.” Complaint, ¶36-49. In that regard, Plaintiffs have no standing to make such challenge to the securitization of the subject loan. See, Lindsay v. Vamerica’s Wholesale Lender, et al., 2012 WL 83475 at *3 (C.D.Cal. Jan. 10, 2012) (“Plaintiffs’ deed of trust was simply securitized, and Plaintiffs appear to argue that this transaction…should have been done in compliance with the underlying Trust Agreement (aka Pooling Services Agreement)…[this theory] does not give rise to a legally cognizable claim.”) (citing Bascos v. Federal Home Loan Mortg. Corp., 2011 WL 3157063 at *6 (C.D.Cal. July 22, 2011) (“To the extent Plaintiff challenges the securitization of the loan because Freddie Mac failed to comply with the terms of its securitization agreement, plaintiff has no standing to challenge the validity of the securitization of the loan as he is not an investor of the loan trust.”). Based on the foregoing, Plaintiffs’ allegations in this regard are without merit.

>Obviously cut and pasted from some other crappy demurrer as we have 3 plaintiffs, two women one man. They must get paid by the word to fill the pages regardless of what they say…< Moreover, the Deed of Trust is clear in specifically authorizing that “[t]he Note or a partial interest in the Note (together with this Security Instrument) can be sold one or more times without prior notice to Borrower.” See, Complaint, Exhibit 2 at ¶20. The Deed of Trust further allows the assignee of the original Lender to exercise any and all interests under the Deed of Trust, including the right to foreclose and sell the Property. See, Complaint, Exhibit 2. Accordingly, all of Plaintiffs’ claims based on the securitization must fail, and this demurrer should be sustained in its entirety.

>Again, what this has to do with anything is beyond me…<

With respect to this one, as is not unusual…my comments are “WTF? Are these morons truly lawyers and from this planet?”

Thanks,

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

8. October 2013

Glaski Update

FYI…see the attached ROA.

Remittitur was issued and case was closed at the appellate level however; notice the letter from attorney Glavinovich from JPMorgan Chase to the Supreme Court requesting the opinion be depublished. (Gee, I wonder why….)

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

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

7. October 2013

ANOTHER TESTIMONY IN THIS ARTICEL OF AT LEAST 90 PERCENT OF MORTGAGES HAVE NO PAPERWORK TO FORECLOSE ON.‏

ANOTHER TESTIMONY IN THIS ARTICEL OF AT LEAST 90 PERCENT OF MORTGAGES HAVE NO PAPERWORK TO FORECLOSE ON.‏

Charles Cox 5:43 PM
To: Charles Cox

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

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?

4. October 2013

Make the call! Call the DOJ and demand prosecutions and substantial assitance for homeowners as the part of any deal with Chase

Filed under: wrongful foreclosure — admin @ 22:37

Perp walk for JPMorganChase?‏

Jaymie Kelly, Home Defenders League (nathan@homedefendersleague.org)Add to contacts 1:35 PM
To: Grace Adams

Dear Grace Adams –

Make the call!

Call the DOJ and demand prosecutions and substantial assitance for homeowners as the part of any deal with Chase

My name is Jaymie Kelly and Chase Bank is stealing my home of 30 years, even though I’ve already paid for it five times. I’m fighting back with Occupy Homes MN and Home Defenders League.

At the same time Chase is doing this, they are also in high-level negotiations with Attorney General Eric Holder at the Department of Justice over the practices that destroyed our economy and stole our homes. I know that if it wasn’t for us telling our stories, signing and delivering petitions, visiting US Attorneys, and sending over 500 people to DOJ headquarters in DC in May where 27 of us got arrested, these negotiations would not be happening.

But without continued pressure we know what kind of “settlement” we’ll get from these fast-moving negotiations. We’ve already seen that movie too many times. We need to make sure insist on prosecutions and substantial assistance for struggling homeowners as part of any deal.

Can you call AG Holder and demand prosecutions and substantial assistance? Here’s a link to both phone numbers, sample scripts, and a place to report how the calls went.

Or you can just call right from this email (but please report the outcome using the link above).

Here’s a sample script you can use with the Department of Justice (the voicemail which may be clogged due to your calls and the shutdown stopping anyone from checking it):

202-353-1555

My name is _____________ and I’m calling about the negotiations between the DOJ and JPMorganChase related to Chase’s practices with Mortgage Backed Securities that helped destroy our economy. Any deal made with Chase must include prosecutions for Wall Street criminals and substantial assistance for struggling homeowners affected by the Great Recession. Thank you.

I’m not alone in fighting for my home as our actions over the past year have shown. We have a chance to get real relief – finally – for other struggling homeowners with a Chase deal that includes prosecutions and substantial assistance for people who’ve lost or are struggling to keep their homes. Now is the time to hold JPMorgan Chase accountable for their predatory actions. Thanks for your support, and we’ll keep you posted.

In solidarity,

Jaymie Kelly, foreclosure fighter, Occupy Home MN supporters, Home Defender

http://www.homedefendersleague.org/

3. October 2013

Florida Appeals Court 2nd District Rules in favor of borrower – Focht v Wellsfargo

Focht v Wellsfargo..

Accordingly, we certify the following question as one of great public importance:
CAN A PLAINTIFF IN A FORECLOSURE ACTION CURE
THE INABILITY TO PROVE STANDING AT THE
INCEPTION OF SUIT BY PROOF THAT THE PLAINTIFF
HAS SINCE ACQUIRED STANDING?

Reversed and remanded.

DAVIS, C.J., Concurs.

ALTENBERND, J., Concurs with opinion.

ALTENBERND, Judge, Concurring.

I concur in this decision because existing precedent requires me to do so.

A requirement that the plaintiff prove that it owned or possessed a promissory note at the commencement of a foreclosure action may have made sense during earlier periods of economic downturn, but in this era of securitization of mortgage debt and computerized banking, it has proven to be a restriction that often provides a windfall to a borrower who can prove no harm by the fact that the plaintiff obtains possession of the note after the filing of the lawsuit but before the entry of judgment. So long as there is no dispute that the borrower received the money and defaulted on the note, the law should not use “standing” to require the dismissal of a lawsuit. If the defendant raises this issue at the inception of the lawsuit this affirmative defense may warrant a delay in the proceedings while the plaintiff establishes that it can enforce the note. But especially when the original note in default has already been filed in the court record, the law should generally permit a plaintiff to obtain a judgment of foreclosure if the plaintiff establishes that it has a right to enforce the note at the time it seeks to obtain a final judgment. See generally Taylor v. Deutsche Bank Nat’l Trust Co., 44 So. 3d 618 (Fla. 5th DCA 2010). The courts have erroneously transformed what should be a defendant’s affirmative defense, permitting the defendant to avoid a judgment of foreclosure by a plaintiff who is a stranger to the note, into a jurisdictional prerequisite that must be established by the plaintiff to avoid a dismissal of the action. There appears to be no genuine dispute in this case that Ms. Focht borrowed about $110,000 from BNC Mortgage, Inc., in 2002, using her duplex as collateral. She signed a promissory note and executed a mortgage. She did not make the payment due in September 2007 or any payment thereafter. As a result, Wells Fargo filed this foreclosure action in January 2008. See generally Tunno v. Robert, 16 Fla. 738 (1878); Smith v. Kleiser, 107 So. 262 (Fla. 1926).

2. October 2013

Max Gardner Explains, Who Owns the Note‏

Filed under: Note,wrongful foreclosure — Tags: , — admin @ 23:35

See the attached.

Max Gardner EXPLAINS _ Who-Owns-the-Note

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

1. October 2013

Servicers Advance Payments When Borrower Stops‏ by Neil Garfield

Charles Cox 11:18 AM

Neil Garfield posted: “The following message and article brings up questions that I have been receiving with increasing frequency as homeowners, their forensic analysts and attorney dig further and further. They are following the money and coming up with the fact that servicers”

The following message and article brings up questions that I have been receiving with increasing frequency as homeowners, their forensic analysts and attorney dig further and further. They are following the money and coming up with the fact that servicers are advancing payments to investors when the borrower stops paying. In fact, they advance those payments to investors after the declaration of default and even after the foreclosure is complete. Where do they get the money from?

The answer is that they either get the money from their own pockets or funds they “borrow” from the investment banker that did the underwriting on the mortgage bonds or they are taking money paid on other performing loans and using it to make payments on loans that are not performing. Either way, the payment has been made and the account receivable of the real creditor is not in default. The only way to conclude that it doesn’t make any difference is if you look at all the players in the cloud of so-called “securitization of debt” as one single venture — a view that would raise all kinds of questions as to why and when you can ignore the corporate veil or the existence of a separate entity.

When this gets litigated, and I am sure it will, Judges will probably tend to the easier cloud view. But on appeal, it is likely that the appellate court will look at each transaction, the pleadings and the proof. They will likely conclude that with the account receivable of the alleged creditor being current, there should have been no declaration of default, acceleration, foreclosure or sale of the house. But they will say that the borrower is not off the hook. The Servicer has a separate claim for contribution or unjust enrichment. But such claims are obviously not secured by a pledge of the house as collateral because no such documentation exists.

Which brings me back to the falsification of securitization as cover for a PONZI scheme. If the bankers had played fair, they would have had the notes payable to the REMIC trusts and the mortgages naming the trusts as mortgagees or immediately record assignments of both. They could have disclosed the securitization at closing but they didn’t. If they did, the advances by servicers could have been covered by the documents producing the cloud effect that the banks want to see from the courts.
=================================================================
From Dan Edstrom, senior mortgage analyst for Livinglies.—

I am not sure if you are aware of a recent article from Martin Andelman. His position on servicer advances of principal and interest is that it has nothing to do with the Borrower and these are just loans. Jim and I talked with him on the phone for a short period of time, but he wasn’t convinced that these payments should be applied to the Borrower (not that we can convince him or have to convince him). But I just read the following article and the light bulb went on again. Martin said the servicer advance is a loan and is to be repaid. Possible, although this isn’t contemplated (that I know of) in UCC 3-602. But now consider the following article that just came out. The advance pays senior tranches in full. By the time the servicer goes to pull the money out of the trust, a lower tranche loses that money (that was paid by other borrowers) and it gets diverted to the servicer for reimbursement. The losing tranche agreed to take these losses. The Borrower did not agree to make a payment to one creditor, give that creditor a discharge, and then take out a new loan with a different creditor and owe that creditor money (the creditor who agreed to lose money). When did I transfer the right to others to open and close credit accounts (or transactions) on my behalf (paying off debt to one party and acquiring debt from another party)?

Investors Warned on Nationstar, Ocwen RMBS Cash Remit Differences
Analysts are warning investors about the impact of different servicing strategies on the cash flow generated by mortgage servicing rights on securitized delinquent loans.

A Moody’s Investors Service analysis of the loss mitigation practices of Nationstar and Ocwen, two of the nation’s largest and fastest-growing servicers, revealed “particularly different advancing rates on delinquent loans,” enable Nationstar to pay more cash from its securitized subprime residential loans than Ocwen.

Findings matter to investors involved in current and future servicing transfers from portfolios acquired by Nationstar and Ocwen as well as to other residential mortgage-backed securities trusts eyeing MSR market deals.

“Ocwen’s recent acquisition of GMAC’s RMBS servicing portfolio is credit negative for that reason, although GMAC’s performing loans will continue to generate strong cash flow,” explained Jiwon Park, a Moody’s analyst who specializes in the MSR market.

Comparatively, Park wrote in a recent report, Nationstar’s scheduled acquisition of certain RMBS loan portfolios from Bank of America Corp. “is likely to have a minimal impact” on affected loans and their securities because “Nationstar has generally remitted” the same amount of cash on these assets as B of A.

The trend persists across the board with subprime RMBS vintages securitized between 2005 and 2010. Data show Nationstar implements higher advancing rates for delinquent loans and consistently pays more cash than Ocwen. Higher cash payments help keep the RMBS credit positive “because they pay down senior bonds with priority and more quickly,” the analyst wrote.

For example, during the first two months of the third quarter of this year, Nationstar’s monthly cash flow remittances from principal and interest collections, net proceeds from short sales and foreclosure liquidations, voluntary prepayments and delinquent loan advances was at 0.82% of the servicer’s outstanding RMBS balance, compared to 0.77% for Ocwen.

Park finds advancing rate differences between the two servicers are significant. During the same time period the amount of cash generated from distressed securities by source, Nationstar paid 0.07% of the balances from delinquent loan advances, compared to only 0.02% paid by Ocwen.

Loss mitigation strategies also influenced the amount of cash remittances leading to higher revenue from Nationstar’s REO property liquidations, while Ocwen is more successful in generating cash from loan modifications.

In the long term, however, even though Ocwen stops generating advances much faster than Nationstar, its much lower cash flow advances on delinquent loans is not expected to have a long-term effect on the relatively large GMAC portfolio, which includes a larger percentage of performing loans.
frequency. As homeowners, their forensic analysis, and lawyers dig further and further Follow the movement of money, they are finding that the so-called real creditor continues to get paid long after the borrower stops paying, and even long after the actual foreclosure. The motivation for this behavior in my opinion is to keep the investors happy, not suing the investment banker and still buying more mortgage bonds.

But the question is what is the effect of these payments? It has been postulated that it changes nothing. I don’t agree. Using generally accepted accounting principles, we find that the the creditor’s receivable account shows no default because they received payment from the Servicer. Since they never receive direct payment from the Borrower, they are satisfied — the amounts payable under the mortgage bond are fully satisfied. And the mortgage bond obligation is based on payments from borrowers plus payments from third party obligors but no where in the PSA or prospectus does it provide that the Servicer has an obligation to continue making payments when the borrower stops.

If the creditor’s account does not show a default then there should be no declaration of default, acceleration, foreclosure and/or eviction — which is why the Banks are doing a two step and moving the goal post around the field on who has the right to initiate a foreclosure. It is also covers up the fact that the Foreclosures are merely a way to conclude the fraudulent PONZI scheme that is mistakenly referred to as securitization.

So does that mean that the debt of the borrower has been extinguished? The answer is yes and no. Yes it satisfies the payment requirement to the creditor on the mortgage. But no, that doesn’t mean that the borrower is off the hook like magic. The Servicer has an action against the borrower for contribution or unjust enrichment. The difference is that the servicer’s claim is not secured with the house because THAT debt has been paid pursuant to the note (readers are reminded that I don’t believe either the note or mortgage are valid instruments in most cases).

When this matter is litigated as I am positive it will be, Judges will want to look at “securitization” of loans as a cloud, and that what goes on in the cloud, doesn’t matter. So my prediction is that at the trial level there will be mostly decisions against the borrower. On appeal, with the issues properly preserved and a good record for the appeals court to see, I think they will be required to look into the cloud and see that if they ignore the existence of separate entities without any pleading or proof as to why the corporate veils should be ignored, they will open the door to a boatload of trail and other moral hazards. Taking the transactions one payment at a time, the payments by the Servicer converts the obligation from payment on a secured note to a liability to the Servicer that is unsecured.

The other question is where do they get the money from if not the borrower making payments? The answer by pure logic is one of two ways — either from payments received from other borrowers or money they have or “borrow” from a very willing investment banker who doesn’t want another investor lawsuit and who wants to sell that investor more mortgage bonds.
==========================================================
From Dan Edstrom, senior mortgage analyst for livinglies.—

I am not sure if you are aware of a recent article from Martin Andelman. His position on servicer advances of principal and interest is that it has nothing to do with the Borrower and these are just loans. Jim and I talked with him on the phone for a short period of time, but he wasn’t convinced that these payments should be applied to the Borrower (not that we can convince him or have to convince him). But I just read the following article and the light bulb went on again. Martin said the servicer advance is a loan and is to be repaid. Possible, although this isn’t contemplated (that I know of) in UCC 3-602. But now consider the following article that just came out. The advance pays senior tranches in full. By the time the servicer goes to pull the money out of the trust, a lower tranche loses that money (that was paid by other borrowers) and it gets diverted to the servicer for reimbursement. The losing tranche agreed to take these losses. The Borrower did not agree to make a payment to one creditor, give that creditor a discharge, and then take out a new loan with a different creditor and owe that creditor money (the creditor who agreed to lose money). When did I transfer the right to others to open and close credit accounts (or transactions) on my behalf (paying off debt to one party and acquiring debt from another party)?

Investors Warned on Nationstar, Ocwen RMBS Cash Remit Differences
Analysts are warning investors about the impact of different servicing strategies on the cash flow generated by mortgage servicing rights on securitized delinquent loans.

A Moody’s Investors Service analysis of the loss mitigation practices of Nationstar and Ocwen, two of the nation’s largest and fastest-growing servicers, revealed “particularly different advancing rates on delinquent loans,” enable Nationstar to pay more cash from its securitized subprime residential loans than Ocwen.

Findings matter to investors involved in current and future servicing transfers from portfolios acquired by Nationstar and Ocwen as well as to other residential mortgage-backed securities trusts eyeing MSR market deals.

“Ocwen’s recent acquisition of GMAC’s RMBS servicing portfolio is credit negative for that reason, although GMAC’s performing loans will continue to generate strong cash flow,” explained Jiwon Park, a Moody’s analyst who specializes in the MSR market.

Comparatively, Park wrote in a recent report, Nationstar’s scheduled acquisition of certain RMBS loan portfolios from Bank of America Corp. “is likely to have a minimal impact” on affected loans and their securities because “Nationstar has generally remitted” the same amount of cash on these assets as B of A.

The trend persists across the board with subprime RMBS vintages securitized between 2005 and 2010. Data show Nationstar implements higher advancing rates for delinquent loans and consistently pays more cash than Ocwen. Higher cash payments help keep the RMBS credit positive “because they pay down senior bonds with priority and more quickly,” the analyst wrote.

For example, during the first two months of the third quarter of this year, Nationstar’s monthly cash flow remittances from principal and interest collections, net proceeds from short sales and foreclosure liquidations, voluntary prepayments and delinquent loan advances was at 0.82% of the servicer’s outstanding RMBS balance, compared to 0.77% for Ocwen.

Park finds advancing rate differences between the two servicers are significant. During the same time period the amount of cash generated from distressed securities by source, Nationstar paid 0.07% of the balances from delinquent loan advances, compared to only 0.02% paid by Ocwen.

Loss mitigation strategies also influenced the amount of cash remittances leading to higher revenue from Nationstar’s REO property liquidations, while Ocwen is more successful in generating cash from loan modifications.

In the long term, however, even though Ocwen stops generating advances much faster than Nationstar, its much lower cash flow advances on delinquent loans is not expected to have a long-term effect on the relatively large GMAC portfolio, which includes a larger percentage of performing loans.

29. September 2013

Baxter Jones Wins Modification Offer, But Still Not Enough

Date: Sat, 28 Sep 2013 15:54:15 -0400
From: s.babson@peoplebeforebanks.org
To:
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.

WE NEED TO CALL FANNIE MAE AND DEMAND THEY DO BETTER!
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 detroitevictiondefense.org

25. September 2013

The UCL Practitioner by Kimberly A. Kralowec‏ – New UCL “unfair” prong opinion: Aspiras v. Wells Fargo Bank, N.A.

New UCL “unfair” prong opinion: Aspiras v. Wells Fargo Bank, N.A.

Posted: 24 Sep 2013 06:00 AM PDT

Back in February, I reported on Jolley v. Chase Home Finance, LLC, 213 Cal.App.4th 872 (2013), in which the Court of Appeal (First Appellate District, Division Two), applying the post-Cel-Tech formulation, held that a finding of “unfair” conduct could be predicated on an expression of legislative policy embodied in the Legislature’s subsequent enactment of a bill outlawing the conduct.

In a recently-published opinion, another Division of the Court of Appeal (the Fourth Appellate District, Division One) disagreed with this part of Jolley. Aspiras v. Wells Fargo Bank, N.A., ___ Cal. App. 4th ___ (Aug. 21, 2013; pub. ord. Sept. 17, 2013).

The Aspiras opinion explains:

[I]n our view, use of the Legislature’s enactment of laws against dual tracking as the underlying basis for a UCL cause of action where the assertedly unfair conduct occurred before January 1, 2018, as here, is to effectuate an improper retroactive application of the law. Where a plaintiff predicates a claim of an unfair act or practice on public policy, it is not sufficient to merely allege the act violates public policy or is immoral, unethical, oppressive or unscrupulous. (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1365.) Rather, this court on numerous occasions has held that to establish a practice is “unfair,” a plaintiff must prove the defendant’s “conduct is tethered to an[] underlying constitutional, statutory or regulatory provision, or that it threatens an incipient violation of an antitrust law, or violates the policy or spirit of an antitrust law.” (Id., at p. 1366; Levine v. Blue Shield of California (2010) 189 Cal.App.4th 1117, 1137; Scripps Clinic v. Superior Court (2003) 108 Cal.App.4th 917, 940; Byars v. SCME Mortgage Bankers, Inc. (2003) 109 Cal.App.4th 1134, 1147.)

Here, plaintiffs’ operative complaint fails to state a claim under the unfairness prong of the UCL because they cannot allege Wells Fargo’s alleged dual tracking, when it occurred in 2010, offended a public policy tethered to any underlying constitutional, statutory or regulatory provision. (Durell v. Sharp Healthcare, supra, 183 Cal.App.4th at p. 1366.) The trial court properly sustained Wells Fargo’s demurrer to that cause of action without leave to amend.

Slip op. at 19-20.

This case might be a good one for Supreme Court review. The opinion not only creates a split in authority with Jolley (and, in doing so, articulates principles inconsistent with Rose), but also appears to squarely present the three-way split on the definition of “unfair.” The Court applied the post-Cel-Tech formulation, found the allegations inadequate, and ended its analysis. Under the pre-Cel-Tech formulation, which the panel declined to consider, the outcome might have been different. I think that’s what it will take for the Supreme Court to accept a case presenting the split. What I can’t tell from the opinion is whether the argument has been preserved; possibly, the plaintiffs conceded that the post-Cel-Tech formulation applied.

split of authority on what constitutes an “unfair” practice. (Bardin v. DaimlerChrysler Corp. (2006) 136 Cal.App.4th 1255, 1260-1261.) Some cases hold an “unfair” practice is one that offends established public policy, that is immoral, unethical, oppressive, unscrupulous, or substantially injurious to consumers, or that has an impact on the victim that outweighs defendant’s reasons, justifications, and motives for the practice. (Pastoria v. Nationwide Ins. (2003) 112 Cal.App.4th 1490, 1498; Smith v. State Farm Mutual Automobile Ins. Co. (2001) 93 Cal.App.4th 700, 718-719; Podolsky v. First Healthcare Corp. (1996) 50 Cal.App.4th 632, 647.) Others, including at least one from our district (Gregory v. Albertson’s, Inc. (2002) 104 Cal.App.4th 845, 853-854), hold that the public policy which is a predicate to a claim under the “unfair” prong of the UCL must be tethered to specific constitutional, statutory, or regulatory provisions. (See also, Scripps Clinic v. Superior Court (2003) 108 Cal.App.4th 917, 938.) Either way, unfairness is independently sufficient to state a claim under the statute. (Allied Grape Growers v. Bronco Wine Co. (1988) 203 Cal.App.3d 432, 451; see Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180 [indicating that conduct may be “unfair” without being “unlawful”].)

23. September 2013

SC RULING – One Judge Gets it‏


Heinrich Decision South Carolina

SOUTH CAROLINA COURT HOLDS THAT FORECLOSURE LAW OF U.S. SUPREME COURT TRUMPS EVERYTHING: FORECLOSING PARTY MUST OWN BOTH THE NOTE AND THE MORTGAGE TO FORECLOSE

In a stunning ruling from the Ninth Judicial Circuit Court of Common Pleas of Charleston, South Carolina, a Judge has issued a detailed, 4-page written opinion dismissing a foreclosure action filed by Deutsche Bank National Trust Company as the claimed trustee of an IndyMac securitization, holding that DB failed to show that it was the owner and holder of the original Note and Mortgage at the time the Complaint was filed. FDN South Carolina network counsel Bill Sloan, Esq. represents the homeowner and prepared and argued the homeowner’s Motion to Dismiss.

Counsel for DB made the familiar argument that it had possession of the original Note endorsed in blank, that the Note was a negotiable instrument under the UCC, that the Mortgage follows the Note, and that thus DB had established its right to foreclose. The Court disagreed, citing precedent from the United States Supreme Court’s decision in Carpenter v. Longan, 83 U.S. 271, 16 Wall. 271, 21 L.Ed. 313 (1872) which the Court found “clearly supports the notion that the Plaintiff must own the Note and the Mortgage to foreclose on the property (emphasis in the opinion).” The Court determined that “Plaintiff failed to show that it owned the Mortgage at the time the Complaint was filed”, and also noted that the Mortgage shows MERS to be the mortgagee but that “MERS is never mentioned in the Note.”

The Court stated: “It is clear that to have standing in this foreclosure case, Plaintiff must not only be the holder and owner of the original Note, but also the Mortgage as well. Plaintiff’s Complaint in this case fails to meet this criteria. Plaintiff lacks standing to initiate and prosecute the foreclosure, and dismissal pursuant to Rule 17(a) and Rule 12(b)(6) SCRCP is appropriate.”

This ruling is based on foreclosure law from the United States Supreme Court, which trumps any contrary state law which does not require the foreclosing Plaintiff to own both the Note and the Mortgage at the time that the foreclosure Complaint is filed. This ruling demonstrates the essential fallacy in the “UCC, I have the Note, mortgage follows the Note” theory espoused by every attorney for the banks and servicers.

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