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LANCASTER COUNTY, NEBRASKA DISTRICT COURT DENIES BANK OF AMERICA’S MOTION TO DISMISS CLAIMS FOR DECLARATORY RELIEF, QUIET TITLE, ACCOUNTING, CONVERSION, AND INJUNCTIVE RELIEF

April 23, 2015

April 23, 2015

A District Court Judge in Lancaster County, Nebraska has denied Motions to Dismiss filed by Bank of America which were directed toward the homeowner’s claims against BOA and the alleged substitute trustee for declaratory relief, quiet title, accounting, conversion, and injunctive relief. The homeowner is represented by Jeff Barnes, Esq. and local Nebraska counsel Doug Ruge, Esq. Mr. Barnes prepared the Complaint; Mr. Ruge prepared the Brief in opposition to the Motion to Dismiss.

The Court entered a narrative order which made a very important specific finding and legal distinction. The Order recites that the homeowner is not asserting that the holder of the Note and DOT could not assign them, but rather that she is questioning whether what was done actually accomplished that goal. The case involved an alleged MERS assignment. The Court held that the homeowner is entitled to a determination that the party to whom she pays is the party to who she owes the money, and that the other causes of action spring from the possibility of a finding that the defendants are not the proper parties to proceed with the foreclosure.

This is a very significant ruling. It distinguishes the bank and servicer mantra that borrowers do not have standing to challenge assignments (which, by the way, they do pursuant to the recent Slorp decision from the U.S. Court of Appeals for the 6th Circuit which clarified their prior opinion in Livonia Properties which the 6th Circuit held “confounded courts and litigants” across the country).

The Court’s reasoning provides a sound basis for the assertion of an action for declaratory relief and all of the other causes of action alleged while also clarifying an important legal distinction as to a challenge to an alleged transfer of a Note and DOT.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

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FINAL JUDGMENT ENTERED FOR HOMEOWNERS IN KEY WEST, FLORIDA SECURITIZATION CASE

April 8, 2015

April 8, 2015

A Monroe County (Florida Keys) Circuit Judge has today entered Final Judgment in favor of the homeowners in a securitization case where Citibank was the “indenture trustee” for a Bear Stearns securitization. Jeff Barnes, Esq. represented the homeowners and tried the case in Key West on February 10, 2015.

The homeowners’ expert witness Richard Kahn (www.fpg-usa.com), who was the former national product manager for Merrill Lynch’s mortgage-backed securities division on Wall Street whose responsibilities included insuring that all mortgage loans transferred to securitization trusts complied with the trust documents and applicable laws, testified that the Plaintiff did not and never came into any interest in the Note or Mortgage. Citibank offered no countervailing expert and presented no evidence to rebut the expert’s testimony.

The Court found that the homeowners’ affirmative defenses of lack of the Plaintiff acquiring any interest in the Note and Mortgage were not proven to be legally insufficient and were not rebutted by the preponderance of the evidence, and thus the homeowners prevailed on these affirmative defenses. The Court found that the Plaintiff never acquired standing to have instituted the action.

Under Florida law, the homeowners may now seek recovery of their attorneys’ fees and costs as well from Citibank.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

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FLORIDA APPELLATE COURT FINALLY ADDRESSES ISSUE OF NECESSITY OF PROOF THAT UNDATED “ENDORSEMENTS” WERE PLACED ON NOTE PRIOR TO FILING OF COMPLAINT; FINAL JUDGMENTS REVERSED WITH DIRECTIONS TO ENTER JUDGMENT IN FAVOR OF HOMEOWNER

April 2, 2015

April 2, 2015

The Florida Fourth District Court of Appeal, which has jurisdiction over appeals from cases in Broward, Palm Beach, and Martin Counties, has consistently defended homeowner’s rights and upheld the foreclosing party’s burden to prove it case more than any of Florida’s five appellate district courts. Two recent decisions from that Court have clarified the burden even further in cases involving securitizations.

In Murray v. HSBC Bank USA as Trustee, etc., No. 4D13-4316 (Fla. 4th DCA Jan. 21, 2015), the Court reversed a final judgment of foreclosure after trial, introducing the opinion with the the following: “In this foreclosure puzzle, one of the pieces is missing.” HSBC contended that it was a nonholder in possession with the rights of a holder pursuant to an assignment from Sand Canyon Corporation to HSBC. The PSA was introduced, and the borrowers argued that Option One California never transferred its rights to HSBC as HSBC failed to connect the dots between ACE Securities Corporation (the “Depositor” identified in the PSA) and the last identifiable holder of the Note.

The Court found that HSBC did not qualify as a nonholder in possession with the right to enforce, as it failed to produce any evidence to prove its claim and admitted that it was not a holder of the note as the Note was payable to Option One California and there was no blank endorsement. The Court found that although Option One Mortgage Corporation was a party to the PSA, it was only a servicer and nothing in the PSA established the servicer conveyed rights in mortgage loans to any party, as the servicer only “services” loans. The Court reversed the trial court with directions to enter judgment in favor of the homeowners.

One important point of this decision is that the Court found no error in analyzing the chain of alleged transfers using the PSA, and that it was the PSA which established that there was no evidence of any lawful transfer of the loan to HSBC.

On March 25, 2015, the 4th DCA followed with its decision in Jelic v. LaSalle Bank, N.A., No. 4D13-4040 (March 25, 2015) which also reversed a final judgment after trial. Once again, the court examined the case by looking at the PSA which was introduced into evidence through the representative of the servicer (Select Portfolio Servicing). The original note contained two undated special endorsements; one from the original lender to Greenpoint Mortgage Funding (via MERS), and one from Greenpoint to WaMu. The second assignment was executed more than 6 months after the Complaint was filed.

The Court held that the submission of the original Note at trial did not prove standing, as the special endorsements were undated and there was no testimony establishing that these endorsements were affixed to the Note prior to the initiation of the action, citing the Court’s McLean v. JPMorgan Chase Bank decision. “Bank” and “servicer” attorneys have consistently attempted to distinguish the use of McLean for trial purposes by arguing that McLean arose out of a summary judgment decision. The 4th DCA has now kebashed that argument as it applied the principles of McLean in reversing the final judgment which was entered after trial.

The Court also found that the partial PSA failed to establish standing. There was no evidence as to what WaMu’s role in the transaction was and thus there was no proof that WaMu had any authority to enforce the Note or what control LaSalle had, as trustee under the PSA, over WaMu.

Going even further, the Court found that there was no equitable transfer of the mortgage and Note, as there was no evidence that the unidentified party which (allegedly) transferred the Note and mortgage into the Trust under the PSA before the complaint was filed had the intent to transfer its interest to LaSalle. To quote the opinion: “Thus, it is impossible to determine whether the unidentified party transferring the mortgage and note into the PSA had any intent to transfer its interest because there is no indicating assignment from that unidentified party.”  Read that portion carefully, as it establishes a burden on the foreclosing party in a securitization case to prove its intent to transfer as well.

This case finally quashes the myth of the alleged effect of an undated blank endorsement espoused by “bank” and servicer attorneys, to wit: that they have the Note with a blank endorsement and thus they win. No longer, at least not in Florida, and the foreclosing party in a securitization case must also prove intent on the part of the party allegedly transferring the Note and mortgage to the trust to do so.

These two decision also signal the death of the Castillo mantra used on a daily basis by “Bank” and servicer attorneys that the homeowner has no standing to attack standing using the PSA. Numerous Courts have seen through this erroneous argument, including the very court (the U.S. Court of Appeals for the 6th Circuit) whose decision in the Livonia Properties case was the starting point for the erroneous argument that a homeowner has no standing to attack an assignment. As those of you who follow this website know, the 6th Circuit clarified their intent in Livonia Properties in the more recent Slorp decision, which affirmed that a homeowner has standing to attack a purported assignment as not transferring any interest.

Courts across the US who have consistently (and wrongfully) relied on an erroneous interpretation of Livonia Properties thus have to update their research and correct the mistake once and for all.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

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SUMMARY JUDGMENT SOUGHT BY NEW YORK COMMUNITY BANK DENIED

March 17, 2015

March 17, 2015

The Palm Beach County, Florida Circuit Court has denied a Motion for Summary Judgment in a foreclosure filed by New York Community Bank. The homeowner is represented by Jeff Barnes, Esq. who prepared the formal response to the MSJ and argued the matter in court.

The case involves two separate alleged “allonges” on separate sheets of paper, which NYCB attempted to equate to “endorsements” by calling them “endorsement allonges”. There is no endorsement on the Note itself, and there are no dates on the “allonge” documents. Florida case law has specific requirements for an allonge to be effective, which requirements were not demonstrated by NYCB.

NYCB also took the position that one of the stamps on one of the “allonge” papers “was not a true endorsement” with reference to an argument that AmTrust Bank remained in possession of the original Note, which NYCB claimed to have inherited as a result of a purchase of assets from the FDIC as receiver for the failed AmTrust (which allegedly acquired the Note from Ohio Savings Bank which allegedly acquired the Note from the original lender). However, NYCB produced no evidence that the specific loan the subject of the case was purchased, with the Schedule of Certain Assets Purchased being blank.

The “Affidavits” filed by NYCB contained no personal knowledge as to the alleged transfers of the Note from the original lender (First Florida Mortgage Network, Inc.) to either Ohio Savings Bank, or AmTrust, or the FDIC, or the Federal Home Loan Bank of Cincinnati (which name appeared on one of the “allonge” documents).

Florida law provides that if there are issues as to an undated stamp which are timely and properly raised, the homeowner is entitled to an evidentiary hearing on the issues and under these circumstances summary judgment is improper and will be reversed on appeal.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

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“DEFAULT” FORECLOSURE JUDGMENT VACATED ON LACK OF EVIDENCE OF PROPER SERVICE ON FOREIGN NATIONAL

March 11, 2015

March 10, 2015

A “default” judgment of foreclosure was vacated today by a Seminole County, Florida Circuit Judge based on lack of proof that the homeowner, who resides in the United Kingdom, was served with the Summons and Complaint. Jeff Barnes, Esq. represents the homeowner, filed the Motion to Vacate the judgment with supporting affidavits, and argued the motion in court this afternoon.

The foreclosing party claimed that it had complied with the requirements for service of court papers on a British subject in England pursuant to the Hague Convention. However, the Judge, in analyzing the law presented to her by the attorney for the foreclosing party, found that service was not proper as the papers were not placed in the homeowners’ drop mailbox but instead into the mailbox of an investment property owned by the homeowner which she had not lived in for years before the Complaint was filed.

The Judge found that the burden to show proper service shifted back to the foreclosing party after the filing of the affidavits of the homeowner and the tenant of the location where the papers were left, which affidavits consistently stated that the homeowner did not live at the property where the papers were dropped off. The Judge found that there was no diligent search for the proper address of the homeowner after the foreclosing party was put on notice by the affidavits (which were filed November 14, 2014) which showed that the homeowner did not live at the address were service was allegedly made.

The foreclosing party had instituted an action on a deficiency judgment in the UK based on the judgment which the Court vacated today, rendering the deficiency action moot. The underlying foreclosure will now be properly litigated with defenses and discovery.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

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ORANGE COUNTY, FLORIDA JUDGE DISMISSES FORECLOSURE FILED BY CITIBANK AS TRUSTEE FOR A WAMU SECURITIZATION; MERS ISSUES TO BE ARGUED IN SUPREME COURT OF DELAWARE

March 9, 2015

March 9, 2015

An Orange County (Orlando), Florida Judge dismissed a foreclosure filed by Citibank NA as alleged “trustee” for a WaMu securitization. The Plaintiff had failed for eight (8) months to respond to the homeowners’ requests for admissions, and filed a Motion just 8 days before trial asking to be excused from “technical admissions.” The trial Judge did not accept Citi’s argument that there would be “no prejudice” to the homeowners by letting Citi off the hook for its failure to comply with discovery, as the deeming of the admissions (due to Cit’s failure to respond thereto) materially affected the homeowners’ trial preparation (as they relied on the matters being deemed admitted by law), and relieving Citi of its discovery obligations at trial would have amounted to severe prejudice to the homeowners.

Jeff Barnes, Esq. represents the homeowners, who are now entitled to payment of their attorneys’ fees and costs from Citi as they were the prevailing parties in the action and as Florida law provides for the assessment of a homeowner’s attorneys’ fees and costs against the foreclosing party even if the case is dismissed without prejudice.

Mr. Barnes will also be arguing issues relating to MERS (e.g. whether a MERS assignment transferred any interest, the alleged equating of a MERS assignment to an endorsement, and whether the presence of these issues precluded summary judgment) in the Supreme Court of Delaware on Wednesday, March 11, 2015. Several of the issues in the appeal are of “first impression”, meaning that there is currently no Delaware case law “on point” as to those issues. Mr. Barnes represents the homeowner in the multi-tiered appeal.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

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OREGON COURTS COMPEL DISCOVERY OF DOCUMENTS RELATING TO AUTHENTICITY AND AUTHORITY OF CLAIMED “ENDORSEMENTS”

February 23, 2015

February 23, 2015

(Mr. Barnes has been traveling and in numerous trials since the last post)

An Oregon Federal Judge has compelled the production of significant documents related to the defense of a foreclosure over the objection of counsel for Nationstar (the servicer seeking to foreclose). The documents compelled include the MERS Milestone Report; loan notes from all servicers; the “collateral” (origination) file from origination to present; any assignments of the Deed of Trust; and, most importantly, all documents as to the “who, when, and where the endorsements were placed on the Note.” The quoted language is from the Court Order itself.

As we all know, foreclosing parties routinely travel on the “we have the Note with an endorsement” mantra and argue that this is the be-all and end-all. Until now, there were only two states which specifically permitted challenges, by appellate decisions, to the authority and authenticity of alleged “endorsement stamps” on Notes: North Carolina (the Bass decision), and Florida (numerous decisions beginning with the McLean v. JPMorgan Chase Bank N.A. decision and others which have consistently followed it). The issues surrounding the timing and authority of the placement of the claimed “blank endorsements” on Notes relates directly to standing, including whether the foreclosing party had standing at the time that the foreclosure was filed and whether any interest in the Note was ever legally transferred.

Unfortunately, the Supreme Court of North Carolina reversed Bass, but fortunately the Florida appellate courts have consistently reaffirmed McLean and reversed final judgments in foreclosure cases where there were unresolved issues surrounding the claimed “endorsements.” The U.S. District Court for the District of Oregon has now followed suit, and rightfully so. We thank our local Oregon counsel for bringing this decision to us.

Today, a Clackmas county, Oregon Judge denied Nationstar’s Motion to Strike the homeowners’ defenses related to the authenticity and authority of the alleged endorsements on the Note made by the bankrupt Lehman Brothers in a US Bank securitization case. Counsel for Nationstar in this case was the same as in the Federal decision mentioned above. The ruling was consistent with the reasoning of the ruling in the Federal case which deemed the issues related to the authenticity of the Note including the authority to place the stamps on the Note to be relevant to the homeowner’s defense to the foreclosure. Jeff Barnes, Esq. represents the homeowner with local Oregon Counsel Elizabeth Lemoine, Esq.

These developments are of national importance, and show that at least two states are no longer going to blindly accept the “endorsement” theory without question and without issue.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

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JEFF BARNES, ESQ. OF W.J. BARNES, P.A. RETAINED IN FORECLOSURE CASE IN U.S. VIRGIN ISLANDS; FLORIDA APPEALS COURT REVERSES FORECLOSURE JUDGMENT IN SECURITIZATION CASE DUE TO PLAINTIFF’S FAILURE TO “CONNECT THE DOTS”

January 23, 2015

January 23, 2015

Jeff Barnes, Esq. of W. J. Barnes, P.A. has been retained by the homeowner in a foreclosure case pending in the U.S. Virgin Islands. The Plaintiff has just recently sought to file an Amended Complaint. The case involves multiple alleged transfers of the loan and a MERS Assignment “signed” by Michelle Sjolander, who has testified in a prior deposition that she did not execute such documents.

Separately, the Florida 4th District Court of Appeal reversed a final judgment of foreclosure in a securitization case, holding that the plaintiff failed to demonstrate the chain of transfers of the loan where there was no endorsement on the Note. The decision in Murray v. HSBC Bank USA NA as Trustee, etc., No. 4D13-4316, was just issued two days ago on January 21, 2014. The court found that there was no evidence of a transfer from the original lender (Option One California) to the interim party Ace Securities Corp. as the securitization depositor.

HSBC argued that the PSA identified the Option One entity as a “successor” to Option One Mortgage Corporation and that Option One transferred its interest to HSBC through the PSA. The court disagreed.

This portion of the holding is important, as it shows that the borrower may challenge a transfer made allegedly in accordance with the PSA, notwithstanding the Castillo decision from the Florida 3d District Court of Appeal which held only generally, and without any specific facts, that a borrower cannot complain of noncompliance with the PSA.

Florida thus remains split on the issue of whether a borrower may assert defenses based on matters within the PSA, which conflict will remain unless and until the matter is taken to the Supreme Court of Florida for resolution of the conflict between the 3d and 4th appellate district courts.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

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FLORIDA APPEALS COURT SETS UP SUPREME COURT CONFLICT CERTIFICATION ON STATUTE OF LIMITATIONS DEFENSE; OCWEN COULD BE ON THE WAY OUT

January 17, 2015

January 17, 2015

The Florida Third District Court of Appeal has issued a decision which upheld a statute of limitations defense where the prior dismissal was without prejudice and where the subsequent filing was beyond the statutory period for initiating an action where the prior action claimed an acceleration of the amount due under the Note. The decision in Deutsche Bank National Trust Co. v. Beauvais, issued December 17, 2014, sets up a conflict between two Florida appellate courts as to the use of the statute of limitations defense. The Florida 3d District Court of Appeal sits in Miami-Dade County. The 4th District Court of Appeal, which sits in Palm Beach County, previously issued a decision providing that the statute of limitations defense does not apply even with a prior acceleration and regardless of whether the prior dismissal was with or without prejudice.

The Beauvais decision distinguished the 4th DCA decision, and explained that when a prior dismissal is with prejudice, it operates as an “adjudication on the merits” and thus destroys any issue as to acceleration and thus use of the statute of limitations defense. By contrast, when the prior dismissal is without prejudice, the prior acceleration is preserved and keeps the statute of limitations clock ticking.

This has a direct effect on the thousands of cases previously filed by David Stern which were left in limbo when his Firm closed years ago. Many other Firms have since picked up “old Stern files” which were dismissed without prejudice due to, e.g., lack of record activity, but which filings contained an acceleration. These cases are prime targets for use of the statute of limitations defense for foreclosure cases in at least 2 Florida counties for now, and possibly for use in 62 other counties as well.

Florida has 67 counties and 5 appellate court districts. Beauvais is presently binding on foreclosure cases in Miami-Dade and Monroe (Florida Keys) counties, while the 4th DCA decision is binding on foreclosure cases in Broward, Palm Beach, and Martin counties. Any other foreclosure in any other Florida county is up for grabs, and the Judge can accept either decision if they want, but are not bound to do so.

Beauvais has set up what is called “conflict certiorari jurisdiction” to the Florida Supreme Court to decide who is right. Until the Supreme Court sorts the matter out, there is uncertainty in most of Florida as to the use of the statute of limitations defense where a prior dismissal occurred of an action which accelerated the note balance and where the subsequent filing is outside of the statutory period.

Separately, there is no secret that Ocwen Loan Servicing has become the target of several official investigations in several states for fraudulent foreclosure practices. As most of you also know, the “servicer wars” between Ocwen, SPS, SLS, Bayview and Nationstar have resulted in Ocwen getting the lion’s share of the servicing contracts. Thus, if Ocwen folds, there will be literally tens of thousands of foreclosure cases left up in the air.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

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GOODBYE MY DEAR FRIEND, WE WILL MISS YOU FOREVER

January 7, 2015

January 7, 2015

It is with great sadness that we advise that our family member and best friend Keith Goldwater passed away yesterday. He was 58, and lost his life suddenly and without warning from cardiac arrest.

Keith was not only the most trusted employee that W. J. Barnes, P.A. ever had. He was also the kindest, most caring soul that any of us had ever known. No matter how tired he was, no matter how hard he worked, he always took care of what needed to be done, whether for family or work, and never said a word about it. Although suffering from diabetes and a host of other illnesses over the years, Keith never, ever complained, and was there whenever you needed him. His unflinching loyalty and trustworthiness were second to no person in the entire universe.

So long, my friend.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

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